People Inc 10-Q for FY2020 Q1

People Inc (PPLI)

10-Q 2020-06-03 For: 2020-03-31

Added on April 08, 2026

About this 10-Q

People Inc filed this 10-Q on June 3, 2020, covering the quarter ended March 31, 2020 (FY2020 Q1).

Headline figures

Quarter ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $684.12M; up 6.7% from $641.22M a year earlier
Net loss: $328.2M; compared with a net loss of $14.25M a year earlier

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Delaware		84-3727412
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of exchange on which registered
	None.



Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒	Smaller reporting company	☐	Emerging growth company	☐



		Page Number
PART I
Item 1.	Combined Financial Statements	3
	Combined Balance Sheet	3
	Combined Statement of Operations	4
	Combined Statement of Comprehensive Operations	5
	Combined Statement of Parent's Equity	6
	Combined Statement of Cash Flows	7
	Note 1—The Company and Summary of Significant Accounting Policies	8
	Note 2—Income Taxes	14
	Note 3—Business Combination	16
	Note 4—Goodwill and Intangible Assets	18
	Note 5—Financial Instruments and Fair Value Measurements	21
	Note 6—Long-term Debt	25
	Note 7—Accumulated Other Comprehensive Loss	27
	Note 8—Segment Information	27
	Note 9—Combined Financial Statement Details	32
	Note 10—Contingencies	34
	Note 11—Related Party Transactions	35
	Note 12—IAC Holdings, Inc. Legal Entity Financial Statements	37
	Note 13—Subsequent Event	39
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	62
Item 4.	Controls and Procedures	63
PART II
Item 1.	Legal Proceedings	64
Item 1A.	Risk Factors	65
Item 2-5.	Not applicable	66
Item 6.	Exhibits	67
	Signatures	67



	March 31, 2020			December 31, 2019
	(In thousands)
ASSETS
Cash and cash equivalents	$	2,029,071		$	839,796
Short-term investments	20,000			—
Marketable securities	49,912			—
Accounts receivable, net of allowance and reserves of $28,075 and $24,148, respectively	207,581			181,875
Note receivable—related party	27,172			55,251
Other current assets	147,714			152,334
Total current assets	2,481,450			1,229,256

Property, capitalized software and equipment, net of accumulated depreciation and amortization	271,477			305,414
Goodwill	1,816,723			1,616,867
Intangible assets, net of accumulated amortization	452,096			350,150
Long-term investments	296,491			347,975
Other non-current assets	273,009			247,746
TOTAL ASSETS	$	5,591,246		$	4,097,408

LIABILITIES AND PARENT'S EQUITY
LIABILITIES:
Current portion of long-term debt	$	13,750		$	13,750
Accounts payable, trade	90,983			72,452
Deferred revenue	215,671			178,647
Accrued expenses and other current liabilities	342,875			320,473
Total current liabilities	663,279			585,322

Long-term debt, net	228,643			231,946
Income taxes payable	6,076			6,410
Deferred income taxes	64,697			44,459
Other long-term liabilities	189,547			180,307

Redeemable noncontrolling interests	42,152			43,818

Commitments and contingencies

PARENT'S EQUITY:
Invested capital	3,935,166			2,547,251
Accumulated other comprehensive loss	(17,926		)	(12,226		)
IAC/InterActiveCorp equity in IAC Holdings, Inc. and subsidiaries	3,917,240			2,535,025
Noncontrolling interests	479,612			470,121
Total parent's equity	4,396,852			3,005,146
TOTAL LIABILITIES AND PARENT'S EQUITY	$	5,591,246		$	4,097,408



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to__________



	Three Months Ended March 31,
	2020			2019
	(In thousands)
Revenue	$	684,124		$	641,220
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	179,327			139,848
Selling and marketing expense	308,207			303,198
General and administrative expense	173,741			154,451
Product development expense	61,963			44,425
Depreciation	15,492			11,140
Amortization of intangibles	45,759			22,341
Goodwill impairment	211,973			—
Total operating costs and expenses	996,462			675,403
Operating loss	(312,338		)	(34,183		)
Interest expense	(2,217		)	(3,267		)
Other expense, net	(57,448		)	(5,417		)
Loss before income taxes	(372,003		)	(42,867		)
Income tax benefit	41,432			29,194
Net loss	(330,571		)	(13,673		)
Net loss (earnings) attributable to noncontrolling interests	2,372			(574		)
Net loss attributable to IAC/InterActiveCorp equity in IAC Holdings, Inc.	$	(328,199	)	$	(14,247	)


Stock-based compensation expense by function:
Cost of revenue	$	18		$	24
Selling and marketing expense	1,276			1,321
General and administrative expense	33,646			30,467
Product development expense	2,241			2,863
Total stock-based compensation expense	$	37,181		$	34,675




					IAC/InterActiveCorp Equity in
					IAC Holdings, Inc.
								Accumulated Other Comprehensive (Loss) Income			Total IAC/ InterActiveCorp Equity in IAC Holdings, Inc.
	Redeemable Noncontrolling Interests				Invested Capital									Noncontrolling Interests			Total Parent's Equity
	Redeemable Noncontrolling Interests				Invested Capital									Noncontrolling Interests			Total Parent's Equity
				(in thousands)
Balance as of December 31, 2019	$	43,818			$	2,547,251		$	(12,226	)	$	2,535,025		$	470,121		$	3,005,146
Net loss	(1,032		)		(328,199		)	—			(328,199		)	(1,340		)	(329,539		)
Other comprehensive income (loss), net of income taxes	99				—			(5,663		)	(5,663		)	(1,078		)	(6,741		)
Stock-based compensation expense	15				11,389			—			11,389			22,211			33,600
Purchase of redeemable noncontrolling interests	(3,165		)		—			—			—			—			—
Adjustment of redeemable noncontrolling interests to fair value	2,418				(2,418		)	—			(2,418		)	—			(2,418		)
Issuance of ANGI Homeservices common stock pursuant to stock-based awards, net of withholding taxes	—				6,996			(37		)	6,959			(10,302		)	(3,343		)
Purchase of ANGI Homeservices treasury stock	—				(38,971		)	—			(38,971		)	—			(38,971		)
Net increase in IAC/InterActiveCorp's investment in IAC Holdings, Inc.	—				1,739,118			—			1,739,118			—			1,739,118
Other	(1		)		—			—			—			—			—
Balance as of March 31, 2020	$	42,152			$	3,935,166		$	(17,926	)	$	3,917,240		$	479,612		$	4,396,852




Balance as of December 31, 2018	$	65,687		$	2,296,583		$	(12,541	)	$	2,284,042		$	400,358	$	2,684,400
Net (loss) earnings	(1,051		)	(14,247		)	—			(14,247		)	1,625		(12,622		)
Other comprehensive income, net of income taxes	186			—			1,621			1,621			278		1,899
Stock-based compensation expense	42			15,393			—			15,393			19,240		34,633
Purchase of redeemable noncontrolling interests	(3,182		)	—			—			—			—		—
Adjustment of redeemable noncontrolling interests to fair value	10,242			(10,242		)	—			(10,242		)	—		(10,242		)
Issuance of ANGI Homeservices common stock pursuant to stock-based awards, net of withholding taxes	—			(25,097		)	7			(25,090		)	9,108		(15,982		)
Net decrease in IAC/InterActiveCorp's investment in IAC Holdings, Inc.	—			(21,213		)	—			(21,213		)	—		(21,213		)
Other	(10		)	—			—			—			—		—
Balance as of March 31, 2019	$	71,914		$	2,241,177		$	(10,913	)	$	2,230,264		$	430,609	$	2,660,873


•	a $212.0 million impairment related to the goodwill of the Desktop reporting unit;


•	a $21.4 million impairment related to certain indefinite-lived intangible assets of the Desktop reporting unit;


•	a $51.5 million impairment of certain equity securities without readily determinable fair values; and


•	a $7.5 million impairment of a note receivable and a warrant related to certain investees.


•	Care.com, a leading global platform for finding and managing family care, designed to meet the evolving needs of today’s families and caregivers, and provider of household payroll and tax services and customized corporate benefits packages covering the care needs of working families, which was acquired on February 11, 2020;


•	Bluecrew, a technology driven staffing platform exclusively for flexible W-2 work;


•	NurseFly, a platform to efficiently connect temporary healthcare professionals with job opportunities, which we acquired a controlling interest in on June 26, 2019;


•	The Daily Beast, a website dedicated to news, commentary, culture and entertainment that publishes original reporting and opinion from its roster of full-time journalists and contributors;


•	College Humor Media, a provider of digital content, including its subscription only property, Dropout.tv, for periods prior to its sale on March 16, 2020; and


•	IAC Films, a provider of production and producer services for feature films, primarily for initial sale and distribution through theatrical releases and video-on-demand services in the United States and internationally.



	Three Months Ended March 31, 2020
	(In thousands)
Balance at January 1	$	20,257
Current period provision of bad debt	19,193
Write-offs charged against the allowance	(16,528		)
Recoveries collected	736
Balance at March 31	$	23,658


•	a refund of federal income taxes due to a five-year carryback of net operating loss incurred in 2019;


•	a deferral of 2020 employer social security payroll taxes.



	Care.com
	(In thousands)
Cash and cash equivalents	$	57,873
Short-term investments	20,000
Accounts receivable	20,292
Other current assets	5,678
Property and equipment	2,894
Goodwill	416,869
Intangible assets	145,300
Other non-current assets	26,852
Total assets	695,758
Deferred revenue	(13,422		)
Other current liabilities	(36,400		)
Deferred income taxes	(33,960		)
Other non-current liabilities	(25,001		)
Net assets acquired	$	586,975



	Care.com
	(In thousands)		Useful Life (Years)
Indefinite-lived trade name and trademarks	$	59,400	Indefinite
Developed technology	49,700		5
Customer relationships	35,400		2 - 7
Provider relationships	800		4
Total identifiable intangible assets acquired	$	145,300



	March 31,		December 31,
	2020		2019
	(In thousands)
Goodwill	$	1,816,723	$	1,616,867
Intangible assets with indefinite lives	259,254		225,296
Intangible assets with definite lives, net of accumulated amortization	192,842		124,854
Total goodwill and intangible assets, net	$	2,268,819	$	1,967,017



	Balance at December 31, 2019		Additions		(Deductions)			Impairment			Foreign Exchange Translation			Balance at March 31, 2020
	(In thousands)
ANGI Homeservices	$	884,296	$	—	$	—		$	—		$	(4,868	)	$	879,428
Vimeo	219,374		—		(38		)	—			—			219,336
Applications:
Desktop	265,146		—		—			(211,973		)	—			53,173
Mosaic Group	239,602		—		—			—			(134		)	239,468
Total Applications	504,748		—		—			(211,973		)	(134		)	292,641
Emerging & Other	8,449		416,869		—			—			—			425,318
Total	$	1,616,867	$	416,869	$	(38	)	$	(211,973	)	$	(5,002	)	$	1,816,723



	Balance at December 31, 2018		Additions		(Deductions)			Impairment			Foreign Exchange Translation			Balance at December 31, 2019
	(In thousands)
ANGI Homeservices	$	895,071	$	18,326	(29,293		)	$	—		$	192		$	884,296
Vimeo	77,152		142,222		—			—			—			219,374
Applications:
Desktop	265,146		—		—			—			—			265,146
Mosaic Group	239,746		—		—			—			(144		)	239,602
Total Applications	504,892		—		—			—			(144		)	504,748
Emerging & Other	7,002		4,765		—			(3,318		)	—			8,449
Total	$	1,484,117	$	165,313	$	(29,293	)	$	(3,318	)	$	48		$	1,616,867



	March 31, 2020
	Gross Carrying Amount		Accumulated Amortization			Net		Weighted-Average Useful Life (Years)
	(In thousands)
Technology	$	193,005	$	(81,350	)	$	111,655	4.7
Service professional relationships	99,850		(83,560		)	16,290		3.0
Customer lists and user base	79,510		(26,548		)	52,962		4.0
Trade names	17,279		(10,955		)	6,324		2.8
Memberships	15,900		(13,264		)	2,636		3.0
Other	11,099		(8,124		)	2,975		3.4
Total	$	416,643	$	(223,801	)	$	192,842	4.0



	(In thousands)
Remainder of 2020	$	59,436
2021	44,154
2022	39,141
2023	29,555
2024	15,391
Thereafter	5,165
Total	$	192,842



	March 31, 2020
	(In thousands)
Available-for-sale marketable debt securities	$	49,912
Total marketable securities	$	49,912



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
Treasury discount notes	$	49,924	$	—	$	(12	)	$	49,912
Total available-for-sale marketable debt securities	$	49,924	$	—	$	(12	)	$	49,912


•	Level 1: Observable inputs obtained from independent sources, such as quoted market prices for identical assets and liabilities in active markets.


•	Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities.



	March 31, 2020
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total Fair Value Measurements
	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	1,597,511	$	—	$	—		$	1,597,511
Treasury discount notes	—		99,882		—			99,882
Time deposits	—		42,809		—			42,809
Short-term investments	—		20,000		—			20,000
Marketable securities:
Treasury discount notes	—		49,912		—			49,912
Other non-current assets:
Warrant	—		—		6,489			6,489
Total	$	1,597,511	$	212,603	$	6,489		$	1,816,603

Liabilities:
Contingent consideration arrangement	$	—	$	—	$	(636	)	$	(636	)



	March 31, 2020						December 31, 2019
	Carrying Value			Fair Value			Carrying Value			Fair Value
	(In thousands)
Notes receivable—related party, current	$	27,172		$	27,172		$	55,251		$	55,251
Current portion of long-term debt	$	(13,750	)	$	(13,750	)	$	(13,750	)	$	(13,681	)
Long-term debt, net^(a)	$	(228,643	)	$	(230,313	)	$	(231,946	)	$	(232,581	)


^(a)	At March 31, 2020 and December 31, 2019, the carrying value of long-term debt, net includes unamortized debt issuance costs of $1.7 million and $1.8 million, respectively.



	(In thousands)
Remainder of 2020	$	10,313
2021	13,750
2022	27,500
2023	192,500
Total	244,063
Less: current portion of long-term debt	13,750
Less: unamortized debt issuance costs	1,670
Total long-term debt, net	$	228,643



	Three Months Ended March 31, 2020
	Foreign Currency Translation Adjustment			Unrealized Losses On Available-For-Sale Debt Securities			Accumulated Other Comprehensive Loss
	(In thousands)
Balance as of January 1	$	(12,226	)	$	—		$	(12,226	)
Other comprehensive loss	(5,651		)	(12		)	(5,663		)
Allocation of accumulated other comprehensive loss related to noncontrolling interests	(37		)	—			(37		)
Balance as of March 31	$	(17,914	)	$	(12	)	$	(17,926	)