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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

~~☒QUARTERLY~~For ~~REPORT~~the ~~PURSUANT~~quarterly TOperiod ~~SECTION 13~~ended ORSeptember ~~15(d) OF~~30, ~~THE SECURITIES EXCHANGE ACT OF 1934~~2019

For the quarterly period ended June 30, 2019

☐ TRANSITION 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

Commission File Number: 001-38140

Cision Ltd.

(Exact name of registrant as specified in its charter)

Cayman Islands N/A (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

Cayman Islands N/A (State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.)

130 East Randolph Street, 7th Floor

Chicago, Illinois 60601

(Address of principal executive offices)

(Zip code)

(866) 639-5087

(Registrant’s telephone number, including area code)

Not Applicable.

(Former name, former address and former fiscal year, if changed since last report)

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. Yes ☒ No ☐

Indicate by check mark whether the registrant ~~(1)~~ has ~~filed~~submitted ~~all~~electronically ~~reports~~every Interactive Data File required to be ~~filed by Section~~submitted 13pursuant orto ~~15(d)~~Rule 405 of ~~the~~Regulation ~~Securities~~S-T ~~Exchange~~(§ ~~Act~~232.405 of ~~1934~~this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to ~~file~~submit such ~~reports~~files)~~, and (2) has been subject to such filing requirements for the past 90 days~~. Yes ⌧ ☒ No ◻ ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or 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.

~~Indicate~~Large byaccelerated ~~check~~filer ~~mark~~☒ ~~whether~~Accelerated ~~the~~filer ~~registrant~~☐ ~~has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S~~Non-Taccelerated (§filer ~~232.405~~☐ ofSmaller ~~this~~reporting ~~chapter)~~company ~~during~~☐ ~~the~~Emerging ~~preceding~~growth ~~12 months~~company ~~(or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻~~☐

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 7(a)(2)(B) of the Securities Act. ☐

Indicate by check mark whether the registrant is a ~~large~~shell ~~accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting~~ company or(as ~~emerging~~defined ~~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). Yes ☐ No ☒

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

Securities registered pursuant to Section 12(d) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, par value $0.0001 per share	CISN	New York Stock Exchange

The number of ordinary shares, par value $0.0001 per share, of the registrant outstanding at November 5, 2019 was 148,484,875.

The number of ordinary shares, par value $0.0001 per share, of the registrant outstanding at August 5, 2019 was 148,384,467.

Table of Contents

CISION LTD. AND ITS SUBSIDIARIES

INDEX

PART I. – FINANCIAL INFORMATION 3 ~~ ~~ Item 1. – Financial Statements 3 ~~ ~~ Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations 2625 ~~ ~~ Item 3. – Quantitative and Qualitative Disclosures About Market Risk 4240 ~~ ~~ Item 4. – Controls and Procedures 4240 ~~ ~~ PART II. – OTHER INFORMATION 4441 ~~ ~~ Item 1. – Legal Proceedings 4441 ~~ ~~ Item 1A. – Risk Factors 4441 ~~ ~~ Item 2. – Unregistered Sales of Equity Securities and Use of Proceeds 4442 ~~ ~~ Item 3. – Defaults Upon Senior Securities 4442 ~~ ~~ Item 4. – Mine Safety Disclosures 4442 ~~ ~~ Item 5. – Other Information 4442 ~~ ~~ Item 6. – Exhibits 4442 ~~ ~~ SIGNATURES 4543

Table of Contents

PART I. – FINANCIAL INFORMATION

Item 1. – Financial Statements

Cision Ltd. and its Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except per share and share amounts)

(Unaudited)

	September 30, 2019			December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	94,929		$	104,769
Accounts receivable, net		126,975			120,882
Prepaid expenses and other current assets		38,897			22,824
Total current assets		260,801			248,475
Property and equipment, net		62,788			57,210
Other intangible assets, net		376,860			377,146
Goodwill		1,411,646			1,171,859
Operating lease right-of-use assets		59,993			—
Deferred tax asset		4,123			4,034
Other assets		9,296			7,652
Total assets	$	2,185,507		$	1,866,376
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	13,881		$	13,210
Accounts payable		12,867			15,603
Accrued compensation and benefits		35,057			29,323
Operating lease liabilities		14,139			—
Other accrued expenses		61,820			82,507
Current portion of deferred revenue		161,848			139,725
Total current liabilities		299,612			280,368
Long-term debt, net of current portion		1,261,926			1,205,760
Deferred revenue, net of current portion		968			1,098
Operating lease liabilities, net of current portion		59,514			—
Deferred tax liability		74,062			69,232
Other liabilities		9,986			21,601
Total liabilities		1,706,068			1,578,059
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 20,000,000 shares authorized; no shares issued and outstanding at September 30, 2019 and December 31, 2018		—			—
Common stock, $0.0001 par value, 480,000,000 shares authorized; 148,478,535 and 132,716,541 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		15			13
Additional paid-in capital		988,364			797,222
Accumulated other comprehensive loss		(75,204	)		(68,941	)
Accumulated deficit		(433,736	)		(439,977	)
Total stockholders’ equity		479,439			288,317
Total liabilities and stockholders’ equity	$	2,185,507		$	1,866,376


	June 30, 2019		December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	74,401	$	104,769
Accounts receivable, net		137,111		120,882
Prepaid expenses and other current assets		36,606		22,824
Total current assets		248,118		248,475
Property and equipment, net		62,131		57,210
Other intangible assets, net		404,205		377,146
Goodwill		1,425,008		1,171,859
Operating lease right-of-use assets		61,841		—
Deferred tax asset		4,171		4,034
Other assets		10,018		7,652
Total assets	$	2,215,492	$	1,866,376
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	13,996	$	13,210
Accounts payable		12,878		15,603
Accrued compensation and benefits		34,610		29,323
Operating lease liabilities		14,214		—
Other accrued expenses		60,314		82,507
Current portion of deferred revenue		170,738		139,725
Total current liabilities		306,750		280,368
Long-term debt, net of current portion		1,274,267		1,205,760
Deferred revenue, net of current portion		1,038		1,098
Operating lease liabilities, net of current portion		62,972		—
Deferred tax liability		74,564		69,232
Other liabilities		10,359		21,601
Total liabilities		1,729,950		1,578,059
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 20,000,000 shares authorized; no shares issued and outstanding at June 30, 2019 and December 31, 2018		—		—
Common stock, $0.0001 par value, 480,000,000 shares authorized; 148,351,227 and 132,716,541 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively		15		13
Additional paid-in capital		984,663		797,222
Accumulated other comprehensive loss		(63,035)		(68,941)
Accumulated deficit		(436,101)		(439,977)
Total stockholders’ equity		485,542		288,317
Total liabilities and stockholders’ equity	$	2,215,492	$	1,866,376

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~The~~Cision ~~accompanying~~Ltd. ~~notes~~and ~~are~~its ~~an integral part of these condensed consolidated financial statements.~~Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

3(in thousands, except share and per share amounts)

~~Table of Contents~~(Unaudited)

Cision Ltd. and its Subsidiaries

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenue	$	185,653		$	177,236		$	561,953		$	544,004
Cost of revenue		63,408			69,177			198,240			200,212
Gross profit		122,245			108,059			363,713			343,792
Operating costs and expenses
Sales and marketing		30,708			27,503			96,370			85,630
Research and development		7,153			7,292			23,021			22,282
General and administrative		44,988			39,002			142,464			126,762
Amortization of intangible assets		18,770			20,167			56,444			60,681
Total operating costs and expenses		101,619			93,964			318,299			295,355
Operating income		20,626			14,095			45,414			48,437
Non operating income (expense):
Foreign exchange gains		8,062			2,196			5,918			10,277
Interest and other income, net		279			380			840			472
Gain on sale of business		—			—			28,144			—
Interest expense		(18,209	)		(19,785	)		(56,392	)		(59,947	)
Loss on extinguishment of debt		—			—			(355	)		(2,432	)
Total non operating loss		(9,868	)		(17,209	)		(21,845	)		(51,630	)
Income (loss) before income taxes		10,758			(3,114	)		23,569			(3,193	)
Provision for income taxes		8,393			3,070			17,328			10,016
Net income (loss)	$	2,365		$	(6,184	)	$	6,241		$	(13,209	)
Other comprehensive loss - foreign currency translation adjustments		(12,169	)		(2,479	)		(6,263	)		(20,796	)
Comprehensive loss	$	(9,804	)	$	(8,663	)	$	(22	)	$	(34,005	)
Net income (loss) per share:
Basic	$	0.02		$	(0.05	)	$	0.04		$	(0.10	)
Diluted	$	0.02		$	(0.05	)	$	0.04		$	(0.10	)
Weighted-average shares outstanding used in computing per share amounts:
Basic		148,131,135			131,104,859			147,215,180			127,507,314
Diluted		148,520,974			131,104,859			147,257,092			127,507,314

~~Condensed~~The ~~Consolidated~~accompanying ~~Statements~~notes are an integral part of ~~Operations~~these ~~and~~condensed ~~Comprehensive~~consolidated ~~Income~~financial ~~(Loss)~~statements.

~~(in thousands, except share and per share amounts)~~4

~~(Unaudited)~~Cision Ltd. and its Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)


	Three months ended				Six months ended
	June 30,				June 30,
	2019		2018		2019		2018
Revenue	$	190,496	$	187,475	$	376,300	$	366,768
Cost of revenue		68,779		66,757		134,832		131,035
Gross profit		121,717		120,718		241,468		235,733
Operating costs and expenses
Sales and marketing		32,429		28,419		65,662		58,127
Research and development		7,325		8,290		15,868		14,990
General and administrative		45,511		41,538		97,476		87,760
Amortization of intangible assets		18,863		20,264		37,674		40,514
Total operating costs and expenses		104,128		98,511		216,680		201,391
Operating income		17,589		22,207		24,788		34,342
Non operating income (expense):
Foreign exchange gains (losses)		(5,226)		15,964		(2,144)		8,081
Interest and other income, net		244		348		561		92
Gain on sale of business		—		—		28,144		—
Interest expense		(18,910)		(20,474)		(38,183)		(40,162)
Loss on extinguishment of debt		—		—		(355)		(2,432)
Total non operating loss		(23,892)		(4,162)		(11,977)		(34,421)
Income (loss) before income taxes		(6,303)		18,045		12,811		(79)
Provision for income taxes		1,455		24,628		8,935		6,946
Net income (loss)	$	(7,758)	$	(6,583)	$	3,876	$	(7,025)
Other comprehensive income (loss) - foreign currency translation adjustments		(945)		(25,392)		5,906		(18,317)
Comprehensive income (loss)	$	(8,703)	$	(31,975)	$	9,782	$	(25,342)
Net income (loss) per share:
Basic	$	(0.05)	$	(0.05)	$	0.03	$	(0.06)
Diluted	$	(0.05)	$	(0.05)	$	0.03	$	(0.06)
Weighted-average shares outstanding used in computing per share amounts:
Basic		148,070,969		127,392,151		146,749,612		125,678,727
Diluted		148,070,969		127,392,151		146,833,535		125,678,727

(in thousands, except share and per share amounts)

(Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Share Capital				Additional			Accumulated Other			Accumulated			Total Stockholders’
	Shares		$		Paid-in Capital			Comprehensive Loss			Deficit			Equity (Deficit)
Balances at December 31, 2017		122,634,922	$	12	$	771,813		$	(35,111	)	$	(420,345	)	$	316,369
Adoption of new accounting standards		—		—		—			(986	)		4,762			3,776
Issuance of shares for acquisition		1,735,269		—		20,144			—			—			20,144
Vesting of RSU’s		375		—		—			—			—			—
Equity-based compensation expense		—		—		1,341			—			—			1,341
Net loss		—		—		—			—			(442	)		(442	)
Foreign currency translation adjustments		—		—		—			7,075			—			7,075
Balances at March 31, 2018		124,370,566	$	12	$	793,298		$	(29,022	)	$	(416,025	)	$	348,263
Conversion of warrants to common stock		6,342,989		1		(1	)		—			—			—
Equity-based compensation expense		—		—		868			—			—			868
Net loss		—		—		—			—			(6,583	)		(6,583	)
Foreign currency translation adjustments		—		—		—			(25,392	)		—			(25,392	)
Balances at June 30, 2018		130,713,555	$	13	$	794,165		$	(54,414	)	$	(422,608	)	$	317,156
Issuance of earn-out shares		2,000,000		—		—			—			—			—
Equity-based compensation expense		—		—		1,503			—			—			1,503
Net loss		—		—		—			—			(6,184	)		(6,184	)
Foreign currency translation adjustments		—		—		—			(2,479	)		—			(2,479	)
Balances at September 30, 2018		132,713,555	$	13	$	795,668		$	(56,893	)	$	(428,792	)	$	309,996

Balances at December 31, 2018		132,716,541	$	13	$	797,222		$	(68,941	)	$	(439,977	)	$	288,317
Issuance of shares for acquisitions		15,591,186		2		182,246			—			—			182,248
Vesting of RSU’s		375		—		—			—			—			—
Exercise of stock options		20,625		—		264			—			—			264
Equity-based compensation expense		—		—		2,081			—			—			2,081
Net income		—		—		—			—			11,634			11,634
Foreign currency translation adjustments		—		—		—			6,851			—			6,851
Balances at March 31, 2019		148,328,727	$	15	$	981,813		$	(62,090	)	$	(428,343	)	$	491,395
Vesting of RSU’s		—		—		—			—			—			—
Exercise of stock options		22,500		—		288			—			—			288
Equity-based compensation expense		—		—		2,562			—			—			2,562
Net loss		—		—		—			—			(7,758	)		(7,758	)
Foreign currency translation adjustments		—		—		—			(945	)		—			(945	)
Balances at June 30, 2019		148,351,227	$	15	$	984,663		$	(63,035	)	$	(436,101	)	$	485,542
Vesting of RSU’s		81,960		—		(121	)		—			—			(121	)
Exercise of stock options		—		—		—			—			—			—
Issuance of shares from ESPP		45,348		—		315			—			—			315
Equity-based compensation expense		—		—		3,507			—			—			3,507
Net income		—		—		—			—			2,365			2,365
Foreign currency translation adjustments		—		—		—			(12,169	)		—			(12,169	)
Balances at September 30, 2019		148,478,535	$	15	$	988,364		$	(75,204	)	$	(433,736	)	$	479,439

The accompanying notes are an integral part of these condensed consolidated financial statements.

4Cision Ltd. and its Subsidiaries

~~Table~~Condensed Consolidated Statements of ~~Contents~~Cash Flows

(in thousands)

~~Cision Ltd. and its Subsidiaries~~(Unaudited)

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

	Nine Months Ended September 30,
	2019				2018
Cash flows from operating activities
Net income (loss)	$		6,241		$		(13,209	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			93,709				100,186
Non-cash interest charges and amortization of debt discount and deferred financing costs			7,426				10,158
Equity-based compensation expense			8,206				3,713
Provision for doubtful accounts			4,579				3,972
Deferred income taxes			(332	)			3,437
Unrealized foreign currency gains			(6,528	)			(10,338	)
Gain on sale of business			(28,144	)		—
Payment of contingent consideration			(4,296	)		—
Other		—					86
Changes in operating assets and liabilities, net of effects of acquisitions and disposal:
Accounts receivable			609				967
Prepaid expenses and other current assets			(7,568	)			(848	)
Other assets			(976	)			(726	)
Accounts payable			(4,889	)			(1,721	)
Accrued compensation and benefits			3,229				(321	)
Other accrued expenses			(16,944	)			(7,320	)
Deferred revenue			11,658				1,767
Other liabilities and net change in operating leases			1,488				(14	)
Net cash provided by operating activities			67,468				89,789
Cash flows from investing activities
Purchases of property and equipment			(8,774	)			(10,325	)
Software development costs			(22,531	)			(12,026	)
Acquisitions of businesses, net of cash and restricted cash acquired of $6,068 and $2,711			(148,541	)			(66,463	)
Proceeds from disposal of business			44,865				—
Other			23				5
Net cash used in investing activities			(134,958	)			(88,809	)
Cash flows from financing activities
Proceeds from revolving credit facility			40,000				—
Repayment of revolving credit facility			(40,000	)			—
Proceeds from term credit facility, net of debt discount of $1,013			73,987				—
Repayments of term credit facility			(10,471	)			(59,989	)
Payments of deferred financing costs			(1,619	)			(294	)
Proceeds from the exercise of stock options			552				—
Payment of contingent consideration			(3,695	)			(2,873	)
Net cash provided by (used in) financing activities			58,754				(63,156	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(1,104	)			(2,286	)
Decrease in cash, cash equivalents, and restricted cash			(9,840	)			(64,462	)
Cash, cash equivalents, and restricted cash
Beginning of period			104,769				148,654
End of period	$		94,929		$		84,192

Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents	$		94,929		$		84,192
Restricted cash, included in prepaid expenses and other current assets			—				—
Total cash, cash equivalents, and restricted cash	$		94,929		$		84,192

Supplemental disclosure of cash flows information
Issuance of shares for acquisitions	$		182,248		$		20,143

~~(in~~The ~~thousands,~~accompanying ~~except~~notes ~~share~~are ~~and~~an ~~per~~integral ~~share~~part ~~amounts)~~of these condensed consolidated financial statements.

~~(Unaudited)~~6

1. Organization


	Share Capital				Additional Paid-in		Accumulated Other		Accumulated		TotalStockholders’
	Shares		$		Capital		Comprehensive Loss		Deficit		Equity (Deficit)
Balances at December 31, 2017		122,634,922	$	12	$	771,813	$	(35,111)	$	(420,345)	$	316,369
Adoption of new accounting standards		—		—		—		(986)		4,762		3,776
Issuance of shares for acquisition		1,735,269		—		20,144		—		—		20,144
Vesting of RSU’s		375		—		—		—		—		—
Equity-based compensation expense		—		—		1,341		—		—		1,341
Net loss		—		—		—		—		(442)		(442)
Foreign currency translation adjustments		—		—		—		7,075		—		7,075
Balances at March 31, 2018		124,370,566	$	12	$	793,298	$	(29,022)	$	(416,025)	$	348,263
Conversion of warrants to common stock		6,342,989		1		(1)		—		—		—
Equity-based compensation expense		—		—		868		—		—		868
Net loss		—		—		—		—		(6,583)		(6,583)
Foreign currency translation adjustments		—		—		—		(25,392)		—		(25,392)
Balances at June 30, 2018		130,713,555	$	13	$	794,165	$	(54,414)	$	(422,608)	$	317,156

Cision Ltd., a Cayman Islands company and its subsidiaries (collectively, “Cision”, or the “Company”), is a leading provider of cloud-based software, media intelligence and distribution services, and other related professional services to the marketing and public relations industry. Communications professionals use the Company’s products and services to identify and connect with media influencers, manage industry relationships, create and distribute content, monitor media coverage, perform advanced analytics and measure the effectiveness of their campaigns. The Company has primary offices in Chicago, Illinois, Beltsville, Maryland, Ann Arbor, Michigan, New York, New York, Cleveland, Ohio, Austin, Texas, and Albuquerque, New Mexico with additional offices in the United States, as well as Australia, Brazil, Bulgaria, Canada, China, Denmark, France, Germany, Hong Kong, Hungary, India, Indonesia, Malaysia, Mexico, Portugal, Singapore, South Korea, Sweden, Taiwan, the United Kingdom, and Vietnam.

As described in the Company’s 2018 consolidated financial statements included in its Annual Report on Form 10-K, on March 19, 2017, the Company entered into a definitive agreement with Capitol Acquisition Corp. III (NASDAQ: CLAC; “Capitol”), a public investment vehicle, whereby the parties agreed to merge, resulting in the Company becoming a publicly listed company. This merger closed on June 29, 2017.


	Share Capital				Additional Paid-in		Accumulated Other		Accumulated		TotalStockholders’
	Shares		$		Capital		Comprehensive Loss		Deficit		Equity (Deficit)
Balances at December 31, 2018		132,716,541	$	13	$	797,222	$	(68,941)	$	(439,977)	$	288,317
Issuance of shares for acquisitions		15,591,186		2		182,246		—		—		182,248
Vesting of RSU’s		375		—		—		—		—		—
Exercise of stock options		20,625		—		264		—		—		264
Equity-based compensation expense		—		—		2,081		—		—		2,081
Net income		—		—		—		—		11,634		11,634
Foreign currency translation adjustments		—		—		—		6,851		—		6,851
Balances at March 31, 2019		148,328,727	$	15	$	981,813	$	(62,090)	$	(428,343)	$	491,395
Exercise of stock options		22,500		—		288		—		—		288
Equity-based compensation expense		—		—		2,562		—		—		2,562
Net loss		—		—		—		—		(7,758)		(7,758)
Foreign currency translation adjustments		—		—		—		(945)		—		(945)
Balances at June 30, 2019		148,351,227	$	15	$	984,663	$	(63,035)	$	(436,101)	$	485,542

2. Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10‑Q. Accordingly, they do not include all the information and footnotes required by GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair statement have been included. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated balance sheet as of December 31, 2018 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP. Operating results for the nine months ended September 30, 2019 are annot ~~integral~~necessarily ~~part~~indicative of ~~these~~the results that may be expected for the year ending December 31, 2019 or any other period. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10‑K filed with the U.S. Securities and Exchange Commission ("SEC") on March 1, 2019.

Certain prior period amounts have been adjusted to conform with the adoption of Accounting Standard Update (“ASU”) 2014‑09, Revenue from Contracts with Customers (Topic 606 or the “new revenue standard”) during the fourth quarter of 2018, effective as of January 1, 2018.

Use of Estimates

5The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. On an on-going basis, the Company evaluates its estimates, including, but not limited to, those related to the allowance for doubtful accounts, software development costs, useful lives of property, equipment and internal use software, intangible assets and goodwill, contingent liabilities, and fair value of equity-based awards and income taxes. The Company bases its estimates on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities as well as the reported amounts of revenues and expenses during the period. Actual results could differ from these estimates.

~~Table~~Fair ofValue ~~Contents~~Measurements

~~Cision Ltd.~~The Company measures certain financial assets and liabilities at fair value pursuant to a fair value hierarchy based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its ~~Subsidiaries~~own market assumptions. The fair value hierarchy consists of the following three levels:

~~Condensed~~Level ~~Consolidated~~1 ~~Statements~~Inputs ofare ~~Cash~~quoted ~~Flows~~prices in active markets for identical assets or liabilities.

(Level 2 Inputs are quoted prices for similar assets or liabilities in ~~thousands)~~active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

~~(Unaudited)~~7

Level 3 Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.


	Six months ended June 30,
	2019		2018
Cash flows from operating activities
Net income (loss)	$	3,876	$	(7,025)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		62,256		66,878
Non-cash interest charges and amortization of debt discount and deferred financing costs		5,146		7,301
Equity-based compensation expense		4,643		2,209
Provision for doubtful accounts		2,186		3,015
Deferred income taxes		122		2,549
Unrealized foreign currency (gains) losses		1,840		(8,249)
Gain on sale of business		(28,144)		—
Payment of contingent consideration		(4,296)		—
Other		—		87
Changes in operating assets and liabilities, net of effects of acquisitions and disposal:
Accounts receivable		(5,022)		277
Prepaid expenses and other current assets		(4,683)		(2,982)
Operating lease right-of-use assets		8,184		—
Other assets		(1,698)		(168)
Accounts payable		(5,119)		1,877
Accrued compensation and benefits		1,822		(3,347)
Other accrued expenses		(19,675)		(7,097)
Deferred revenue		18,438		8,743
Operating lease liabilities		(8,153)		—
Other liabilities		1,115		(435)
Net cash provided by operating activities		32,838		63,633
Cash flows from investing activities
Purchases of property and equipment		(7,308)		(6,860)
Software development costs		(14,843)		(8,197)
Acquisitions of businesses, net of cash and restricted cash acquired of $6,068 and $2,711		(148,541)		(62,713)
Proceeds from disposal of business		44,865		—
Other		20		5
Net cash used in investing activities		(125,807)		(77,765)
Cash flows from financing activities
Proceeds from revolving credit facility		40,000		—
Repayment of revolving credit facility		(40,000)		—
Proceeds from term credit facility, net of debt discount of $1,013		73,987		—
Repayments of term credit facility		(6,996)		(46,676)
Payments of deferred financing costs		(1,619)		(294)
Proceeds from the exercise of stock options		552		—
Payment of contingent consideration		(3,695)		(2,873)
Net cash provided by (used in) financing activities		62,229		(49,843)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		372		(1,712)
Decrease in cash, cash equivalents, and restricted cash		(30,368)		(65,687)
Cash, cash equivalents, and restricted cash
Beginning of period		104,769		148,654
End of period	$	74,401	$	82,967

Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents	$	74,401	$	82,967
Restricted cash, included in prepaid expenses and other current assets		—		—
Total cash, cash equivalents, and restricted cash	$	74,401	$	82,967

Supplemental disclosure of cash flows information
Issuance of shares for acquisitions		182,248		20,143

Revenue Recognition

The Company accounts for revenue contracts with customers by applying the requirements of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (Topic 606), which includes the following steps:

~~The~~• ~~accompanying~~Identification ~~notes~~of ~~are~~the ancontract, ~~integral~~or ~~part~~contracts ofwith ~~these~~a ~~condensed consolidated financial statements~~customer.

• Identification of the performance obligations in the contract.

6• Determination of the transaction price.

~~Table~~• Allocation of ~~Contents~~the transaction price to the performance obligations in the contract.

~~Notes to~~• ~~Condensed~~Recognition ~~Consolidated~~of ~~Financial~~the ~~Statements~~revenue when, or as, the Company satisfies a performance obligation.

1The Company derives its revenue from access to its cloud based technology platform and related media management and analysis services sold on a subscription basis. ~~Organization~~Revenue is also derived from the distribution of press releases on both a subscription basis and separately from non-subscription arrangements. Dependent on the nature of the distribution contract with the customer, the Company recognizes revenue ratably over the term of the subscription contract, or on a per-transaction basis when the press releases are made available to the public.

~~Cision Ltd.,~~Subscription aservices ~~Cayman~~include ~~Islands~~access ~~company~~to ~~and~~the ~~its~~Company’s ~~subsidiaries~~software ~~(collectively,~~platform ~~“Cision”,~~and orassociated ~~the~~hosting ~~“Company”)~~services, iscontent aand ~~leading~~content ~~provider~~updates, ofcustomer ~~cloud-based~~support ~~software,~~and media ~~intelligence~~management and ~~distribution~~analysis services,. ~~and~~Subscription ~~other~~services ~~related~~are ~~professional~~recognized ~~services~~ratably toover the ~~marketing~~contractual ~~and~~period ~~public~~that ~~relations~~the ~~industry.~~services ~~Communications~~are ~~professionals~~delivered, ~~use~~beginning on the ~~Company’s~~date ~~products~~in ~~and~~which ~~services~~such toservice ~~identify~~is ~~and~~made ~~connect~~available ~~with~~to ~~media~~the ~~influencers,~~customer. ~~manage~~Subscription ~~industry~~agreements ~~relationships,~~are ~~create~~typically one year in length and ~~distribute~~are ~~content~~non-cancelable, ~~monitor~~though ~~media~~customers ~~coverage,~~have ~~perform~~the ~~advanced~~right ~~analytics~~to ~~and~~terminate ~~measure~~their agreements if the ~~effectiveness~~Company ofmaterially ~~their~~breaches ~~campaigns~~its obligations under the agreement. ~~The~~Software ~~Company~~subscription ~~has~~agreements ~~primary~~do ~~offices~~not inprovide ~~Chicago,~~customers ~~Illinois,~~the ~~Beltsville,~~right ~~Maryland,~~to ~~Ann~~take ~~Arbor,~~possession ~~Michigan,~~of ~~New~~the ~~York,~~software ~~New~~at ~~York,~~any ~~Cleveland,~~time. ~~Ohio,~~The ~~Austin,~~Company ~~Texas,~~does ~~and~~not ~~Albuquerque,~~charge ~~New~~customers ~~Mexico~~an ~~with~~upfront ~~additional~~fee ~~offices~~for inuse of the ~~United~~platform ~~States,~~and asimplementation ~~well~~activities asare ~~Australia,~~insignificant ~~Brazil,~~and ~~Bulgaria,~~not ~~Canada,~~subject ~~China,~~to ~~Denmark,~~a ~~France,~~separate ~~Germany,~~fee. ~~Hong~~In ~~Kong,~~certain ~~Hungary~~cases, ~~India,~~the ~~Indonesia,~~Company ~~Malaysia,~~charges ~~Mexico,~~annual ~~Portugal,~~membership ~~Singapore,~~fees ~~South~~which ~~Korea,~~are ~~Sweden,~~recognized ~~Taiwan,~~ratably over the ~~United~~one-year ~~Kingdom,~~membership ~~and Vietnam~~period.

AsThe ~~described~~Company inaccounts for a contract when both parties have approved the ~~Company~~contract and are committed to perform their respective obligations, each party’s ~~2018~~rights ~~consolidated~~can ~~financial~~be ~~statements~~identified ~~included~~and inpayment ~~its~~terms ~~Annual~~can ~~Report~~be onidentified, ~~Form~~the ~~10-K,~~contract onhas ~~March 19,~~commercial ~~2017,~~substance and it is probable that the Company ~~entered~~will ~~into~~collect asubstantially ~~definitive~~all ~~agreement~~of ~~with~~the ~~Capitol~~consideration. ~~Acquisition~~Revenue ~~Corp.~~is ~~III~~recognized ~~(NASDAQ:~~when, ~~CLAC;~~or ~~“Capitol”)~~as, aperformance ~~public~~obligations ~~investment~~are ~~vehicle,~~satisfied ~~whereby~~by transferring control of the ~~parties~~promised ~~agreed~~service to ~~merge,~~a ~~resulting~~customer. inThe ~~the~~transaction ~~Company~~price ~~becoming~~for asubscription ~~publicly~~arrangements ~~listed~~and ~~company~~services is generally fixed at contract inception. ~~This~~The ~~merger~~Company’s ~~closed~~standard onpayment ~~June~~terms are generally net 30 29days. For transaction-based services, ~~2017.~~which predominantly comprise press release distributions, customers are invoiced in the month the release is made available to the public.

2In the event that a customer arrangement contains multiple services, the Company determines whether such goods or services are distinct performance obligations that should be accounted for separately in the arrangement. ~~Significant~~When ~~Accounting~~arrangements ~~Policies~~contain multiple performance obligations, further evaluation is usually not required given such performance obligations are generally recognized over time using the same measure of progress and thus, are accounted for as a single performance obligation. Otherwise, when allocating the transaction price in the arrangement, the Company uses the estimated standalone selling price of each distinct performance obligation. In order to estimate the standalone selling prices, the Company relies on the price charged for stand-alone sales, expected cost plus margin and adjusted market assessment approaches. Revenue is then recognized over the pattern of performance as each obligation is satisfied as discussed above.

~~Basis of Presentation~~ 8

~~The~~As ~~accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States~~ of ~~America~~September ~~(“GAAP”)~~30, ~~for interim financial information and the instructions to Form 10-Q. Accordingly~~2019, ~~they do not include all~~ the ~~information~~Company’s ~~and~~remaining ~~footnotes~~performance ~~required~~obligations bywere ~~GAAP~~$162.8 ~~In the opinion of management~~million, ~~all~~approximately ~~adjustments~~99.4% ~~(consisting~~ of ~~normal~~which ~~accruals)~~is ~~considered~~expected ~~for~~to abe ~~fair~~recognized ~~statement~~as ~~have~~revenue ~~been~~over ~~included. The accompanying unaudited condensed consolidated financial statements include~~ the ~~accounts~~next oftwelve months ~~the Company~~ and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated balance sheet as of December 31, 2018 included herein was derived from the ~~audited~~remainder ~~financial statements as of that date, but does not include all disclosures including notes required by GAAP~~thereafter. ~~Operating~~During ~~results for~~ the ~~six~~nine months ended ~~June~~September 30, 2019, ~~are not necessarily indicative of~~ the ~~results~~Company ~~that~~recognized ~~may be expected for the year ending December 31, 2019 or any other period~~$118.3 ~~The~~million ~~accompanying unaudited condensed consolidated financial statements should be read~~ in ~~conjunction~~revenue ~~with~~that ~~the~~was ~~Company’s~~recorded ~~Annual~~as ~~Report~~deferred onrevenue ~~Form 10-K~~as ~~filed~~of ~~with the SEC on March~~December 131, ~~2019~~2018.

~~Certain~~Recent ~~prior period amounts have been adjusted to conform with the adoption of~~ Accounting ~~Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606 or the “new revenue standard”) during the fourth quarter of 2018, effective as of January 1, 2018.~~Pronouncements

~~Use~~New ofAccounting ~~Estimates~~Pronouncements Adopted

~~The~~We ~~preparation~~adopted ofASU ~~financial~~No. 2016‑02, Leases ~~statements~~(Topic in842), ~~conformity~~as ~~with~~of ~~GAAP~~January 1, ~~requires~~2019, ~~management~~using tothe ~~make~~effective ~~certain~~date ~~estimates~~method ~~and~~for ~~assumptions~~the modified retrospective approach. OnComparative anperiods ~~on-going~~were ~~basis~~not restated. In addition, the Company ~~evaluates~~elected ~~its~~the ~~estimates,~~package ~~including~~of practical expedients permitted under the transaction guidance within the new standard, ~~but~~which ~~not~~among ~~limited~~other tothings, ~~those~~allowed ~~related~~us to carry forward the ~~allowance~~historical ~~for~~lease ~~doubtful~~classification. ~~accounts,~~The ~~software~~Company ~~development~~also ~~costs,~~elected ~~useful~~the ~~lives~~practical ofexpedients ~~property,~~pertaining ~~equipment~~to short-term lease exemptions at transition and ~~internal~~going ~~use~~forward. ~~software,~~For ~~intangible~~office ~~assets~~leases beginning in 2019 and ~~goodwill~~later, ~~contingent~~the ~~liabilities,~~Company ~~and~~accounts ~~fair~~for ~~value~~lease ofcomponents ~~equity-based~~(components ~~awards~~of ~~and~~a ~~income~~contract ~~taxes.~~for ~~The~~which the Company ~~bases~~economically ~~its~~benefits ~~estimates~~from ontheir ~~various~~use ~~assumptions~~and ~~that~~is ~~are~~not ~~believed~~highly tointerrelated bewith ~~reasonable~~other ~~under~~right ~~the~~of ~~circumstances,~~use assets underlying the ~~results~~contract ofsuch ~~which~~as ~~form~~base rent) separately from the ~~basis~~non-lease ~~for~~components ~~making~~(e.g., ~~judgements~~common-area ~~about~~maintenance ~~the~~costs). ~~carrying~~For ~~values~~datacenter ofleases ~~assets~~beginning in 2019 and ~~liabilities~~later, asthe ~~well~~Company aselected the ~~reported~~practical ~~amounts~~expedient ofto ~~revenues~~combine its lease and ~~expenses~~non-lease ~~during~~components that meet the ~~period.~~defined ~~Actual~~criteria ~~results~~and ~~could~~will ~~differ~~account ~~from~~for ~~these~~the ~~estimates~~lease component under Topic 842.

~~Fair~~Topic ~~Value~~842 ~~Measurements~~includes multiple changes with one of the most significant impacts being the addition of a right-of-use (“ROU”) asset and a lease liability to the balance sheet for operating leases. A ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. An additional change under Topic 842 is the lease term evaluation. Under Topic 842, a leasee shall extend the lease term beyond the original contract term if the company is reasonably certain to exercise their renewal option.

~~The~~Upon adoption of the new standard, the Company ~~measures~~recognized ~~certain~~total ~~financial~~ROU assets ~~and~~of approximately $66.8 million, total lease liabilities atof ~~fair~~approximately $78.9 ~~value~~million, and corresponding ~~pursuant~~adjustments to aprepaid ~~fair~~expenses ~~value~~of ~~hierarchy~~$(0.2) ~~based~~million, deferred rent included in other accrued expenses of $1.8 million, and deferred rent included in other liabilities of $10.5 million on ~~inputs~~the toconsolidated ~~valuation~~balance ~~techniques~~sheets ~~that~~as ~~are~~of ~~used~~as toof ~~measure~~January 1, ~~fair~~2019. ~~value~~The ~~that~~standard ~~are~~did ~~either~~not ~~observable~~materially orimpact ~~unobservable~~our consolidated net earnings and had no impact on cash flows. ~~Observable~~The adoption of the new standard also resulted in significant additional disclosures regarding the Company’s leasing activities, as discussed in Note 5.

7In February 2018, the FASB issued ASU 2018‑02, Income Statement – Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which will allow a reclassification from accumulated other comprehensive income to retained earnings for the tax effects resulting from “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the “Act”) that are stranded in accumulated other comprehensive income. This ASU also requires certain disclosures about stranded tax effects; however, it does not change the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations. This ASU is effective on January 1, 2019, with early adoption permitted. It must be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. The Company adopted ASU 2018‑02 during the nine months ended September 30, 2019 and it did not have a material impact on the Company’s condensed consolidated financial statements.

Recent Accounting Pronouncements Not Yet Effective

~~Table~~In August 2018, the FASB issued ASU 2018‑13, Fair Value Measurement (Topic 820), which modifies the disclosure requirements related to fair value measurements. The ASU eliminates the requirement to disclosure and amount and reasons for transfers between Level 1 and Level 2 fair value hierarchy, the policy for timing of ~~Contents~~transfers between levels, and the valuation processes for Level 3 fair value measurements. Entities will now be required to disclose the changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2019, and early adoption is permitted. The Company is in the process of evaluating the impact of this standard on its consolidated financial statements.

~~Notes~~In August to2018, ~~Condensed~~the ~~Consolidated~~FASB ~~Financial~~issued ~~Statements~~ASU 2018‑14, Compensation – Retirement Benefits- Defined Benefit Plans – General (~~continued~~Subtopic 715‑20), which modifies the disclosure requirements for defined benefit pensions and other postretirement plans. The ASU adds and removes disclosure requirements from the current standard in an effort to improve the effectiveness of retirement benefit disclosures. The ASU is effective for fiscal years ended after December 15, 2020, and early adoption is permitted. The Company is in the process of evaluating the impact of this standard on its consolidated financial statements.

inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels:9

~~Level~~In ~~1 Inputs~~August 2018, ~~are~~the ~~quoted~~FASB ~~prices~~issued inASU ~~active~~2018‑15, ~~markets~~Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350‑40), which clarifies the accounting for ~~identical~~costs ~~assets~~of orimplementing ~~liabilities~~a cloud computing service arrangement. The ASU requires companies to capitalize the implementation costs associated with cloud computing service arrangements, regardless as to whether the contract contains a license. The ASU is effective for annual periods in 2020, including interim periods. The Company is in the process of evaluating the impact of this standard on its consolidated financial statements.

~~Level~~3. ~~2 Inputs~~Business ~~are~~Combinations quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and ~~market-corroborated inputs which are derived principally from or corroborated by observable market data.~~Dispositions

~~Level~~Purchase ~~3 Inputs~~of ~~are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.~~ Prime

~~Revenue~~On ~~Recognition~~January 23, 2018, the Company completed its acquisition of PRIME Research (“Prime”). The purchase price was approximately €75.7 million ($94.1 million) and consisted of approximately €53.1 million ($65.4 million) in cash consideration, the issuance of approximately 1.7 million shares of common stock valued at €16.4 million ($20.1 million), and up to €6.2 million ($8.6 million) of deferred payments due within 18 months. The Company has the discretion to pay up to €2.5 million ($3.1 million) of the deferred payments with common stock. The acquisition of Prime expanded the Company’s comprehensive data-driven offerings that help communications professionals identify influencers, craft meaningful campaigns, and attribute business value to those efforts. At the date of the acquisition, Prime had over 700 employees with offices in Brazil, China, Germany, India, Switzerland, the United Kingdom, and the United States.

~~The~~Total ~~Company~~acquisition ~~accounts~~costs ~~for~~related ~~revenue~~to ~~contracts~~the ~~with~~Prime ~~customers~~acquisition bywere ~~applying~~$5.4 million of which $2.3 million were incurred during the nine ~~requirements~~months ended September 30, 2018 and the rest were incurred in 2017. Total acquisition costs were included in general and administrative expense in the condensed consolidated statements of ~~Accounting~~operations ~~Standards~~and ~~Codification~~comprehensive ~~(“ASC”)~~loss. ~~Topic~~The ~~606, Revenue~~acquisition ~~from~~was ~~Contracts~~accounted ~~with~~for ~~Customers (Topic~~under ~~606),~~the ~~which~~purchase ~~includes~~method of accounting. The operating results are included in the ~~following~~accompanying ~~steps:~~condensed consolidated financial statements from January 23, 2018.

●The ~~Identification~~purchase ofprice has been allocated to the ~~contract,~~assets oracquired ~~contracts~~and ~~with~~liabilities aassumed ~~customer~~based on fair values as of the acquisition date.

●The ~~Identification~~following table summarizes the allocation of the ~~performance~~purchase ~~obligations~~price inby the ~~contract~~Company to the fair value of the assets and liabilities of Prime. The identifiable intangible assets include the trade name, customer relationships and purchased technology and are being amortized over three to eleven years on an accelerated basis. The Company completed the purchase price allocation in January 2019.

● Determination of the transaction price.

(in thousands)
Cash and cash equivalents	$	2,711
Accounts receivable, net		8,186
Prepaid and other assets		1,320
Property, equipment and software, net		1,207
Trade name		1,436
Customer relationships		17,903
Purchased technology		9,881
Goodwill		57,465
Total assets acquired		100,109
Accounts payable, accrued liabilities, and other liabilities		(5,627	)
Deferred revenue		(426	)
Total liabilities assumed		(6,053	)
Net assets acquired	$	94,056

●Approximately ~~Allocation~~$39.6 million of goodwill is deductible for tax purposes. The excess of the ~~transaction~~purchase price over the total net identifiable assets has been recorded as goodwill which is primarily attributable to synergies expected from the ~~performance~~expanded ~~obligations~~technology inand service capabilities from the ~~contract~~integrated business as well as the value of the assembled workforce in accordance with GAAP.

~~● Recognition of the revenue when, or as, the Company satisfies a performance obligation.~~10

~~The~~Other ~~Company~~2018 derives its revenue from access to its cloud based technology platform and related media management and analysis services sold on a subscription basis. Revenue is also derived from the distribution of press releases on both a subscription basis and separately from non-subscription arrangements. Dependent on the nature of the distribution contract with the customer, the Company recognizes revenue ratably over the term of the subscription contract, or on a per-transaction basis when the press releases are made available to the public.Acquisition

~~Subscription~~During ~~services~~the ~~include~~third ~~access~~quarter toof 2018, the Company’s ~~software~~purchased ~~platform~~certain ~~and~~immaterial ~~associated~~technology ~~hosting services, content~~ and ~~content~~development ~~updates,~~assets ~~customer~~to ~~support~~expand ~~and~~its ~~media~~products ~~management~~ and ~~analysis~~ services. ~~Subscription services are recognized ratably over the contractual period that the services are delivered~~offerings, ~~beginning~~and on the ~~date~~results inof ~~which~~this ~~such~~acquisition ~~service~~have isbeen ~~made~~included ~~available to the customer. Subscription agreements are typically one year~~ in ~~length and are non-cancelable, though customers have~~ the ~~right~~consolidated toresults ~~terminate~~from ~~their agreements if~~ the ~~Company~~acquisition ~~materially breaches its obligations under the agreement~~date. ~~Software subscription agreements do not provide customers the right to take possession of the software at any time.~~ The ~~Company~~fair ~~does~~value ~~not charge customers an upfront fee~~ for ~~use of~~ the ~~platform~~assets ~~and~~acquired ~~implementation activities are insignificant~~ and ~~not~~liabilities ~~subject~~assumed relate to ~~a separate fee. In~~ certain ~~cases,~~identifiable ~~the~~intangible ~~Company~~assets ~~charges~~and ~~annual membership fees which are recognized ratably over the one-year membership period~~goodwill.

~~The~~Purchase Company accounts for a contract when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights can be identified and payment terms can be identified, the contract has commercial substance and it is probable that the Company will collect substantially all of the consideration. Revenue is recognized when, or as, performance obligations are satisfied by transferring control of the promised service to a customer. The transaction price for subscription arrangements and services is generally fixed at contract inception. The Company’s standard payment terms are generally net 30 days. For transaction-based services, which predominantly comprise press release distributions, customers are invoiced in the month the release is made available to the public.Falcon

On January 3, 2019, the Company completed its acquisition of Falcon.io (“Falcon”). The purchase price was approximately €103.4 million ($119.0 million) and consisted of approximately €53.6 million ($61.7 million) in cash consideration, the issuance of approximately 5.1 million ordinary shares valued at €49.8 million ($57.3 million), and up to €5.2 million ($6.0 million) of deferred payments due within 12 months in cash of €2.4 million ($2.8 million) and ordinary shares of €2.8 million ($3.2 million). The cash portion of the consideration was funded with a combination of cash on hand and borrowings under the Company’s Revolving Credit Facility. The Company drew approximately $40.0 million under its Revolving Credit Facility in connection with the closing of the Falcon acquisition, all of which was repaid during the nine months ended September 30, 2019. The acquisition of Falcon solidifies the Company’s market leadership in driving the future of earned media management, moving beyond the tactical nature of PR point solutions. At the date of the acquisition, Falcon had over 250 employees with offices in Denmark, Germany, Hungary, Australia, Bulgaria, and the United States.

~~Table~~Total acquisition costs related to the Falcon acquisition were $2.4 million of ~~Contents~~which $0.4 million were incurred during the year ended December 31, 2018 and are included in general and administrative expense in the condensed consolidated statements of operations and comprehensive income. The acquisition was accounted for under the purchase method of accounting. The operating results are included in the accompanying condensed consolidated financial statements from January 3, 2019.

~~Notes~~ The purchase price has been preliminarily allocated to ~~Condensed~~the ~~Consolidated~~assets ~~Financial~~acquired ~~Statements~~and ~~(continued)~~liabilities assumed based on estimated fair values as of the acquisition date.

InThe ~~the~~following ~~event~~table ~~that~~summarizes athe ~~customer~~preliminary ~~arrangement~~allocation ~~contains~~of ~~multiple services,~~ the ~~Company~~purchase ~~determines~~price ~~whether~~by ~~such~~the ~~goods~~Company orto ~~services~~the ~~are~~fair ~~distinct~~value ~~performance~~of ~~obligations~~the ~~that~~assets ~~should~~and beliabilities ~~accounted~~of ~~for separately in the arrangement~~Falcon. ~~When~~The ~~arrangements~~amounts ~~contain~~related ~~multiple~~to ~~performance~~taxes ~~obligations,~~and ~~further~~intangible ~~evaluation~~assets isshown ~~usually~~below ~~not required given such performance obligations~~ are ~~generally~~preliminary ~~recognized over time using the same measure of progress~~ and ~~thus,~~subject ~~are~~to ~~accounted~~adjustment ~~for~~ as aadditional ~~single~~information ~~performance~~is ~~obligation.~~obtained ~~Otherwise,~~about ~~when allocating~~ the ~~transaction~~facts ~~price~~and incircumstances ~~the~~that ~~arrangement,~~existed ~~the~~at ~~Company uses~~ the ~~estimated~~date ~~standalone selling price~~ of ~~each distinct performance obligation~~acquisition. InThe ~~order~~identifiable tointangible ~~estimate~~assets include the ~~standalone~~trade ~~selling prices~~name, ~~the~~customer ~~Company~~relationships ~~relies~~and onpurchased ~~the~~technology ~~price~~and ~~charged~~are ~~for~~being ~~stand-alone~~amortized ~~sales,~~over ~~expected~~three ~~cost~~to ~~plus~~seven years ~~margin~~on ~~and~~an ~~adjusted~~accelerated ~~market assessment approaches~~basis. ~~Revenue~~The isCompany ~~then~~expects ~~recognized~~to ~~over~~complete the ~~pattern~~purchase ofprice ~~performance~~allocation ason ~~each~~or ~~obligation~~before isJanuary 3, ~~satisfied as discussed above~~2020.

As of June 30, 2019, the Company’s remaining performance obligations were $171.8 million, approximately 99.4% of which is expected to be recognized as revenue over the next twelve months and the remainder thereafter. During the six months ended June 30, 2019, the Company recognized $101.3 million in revenue that was recorded as deferred revenue as of December 31, 2018.

(in thousands)
Cash and cash equivalents	$		3,492
Accounts receivable, net			5,575
Prepaid and other assets			1,113
Property, equipment and software, net		204
Trade name		483
Customer relationships			33,825
Purchased technology			4,940
Goodwill			87,674
Total assets acquired			137,306
Accounts payable and accrued liabilities			(7,641	)
Deferred revenue			(7,627	)
Deferred taxes			(3,048	)
Total liabilities assumed			(18,316	)
Net assets acquired	$		118,990

~~Recent Accounting Pronouncements~~11

~~New~~Goodwill ~~Accounting~~is ~~Pronouncements~~not ~~Adopted~~deductible for tax purposes. The preliminary purchase price is subject to customary post-closing adjustments. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill which is primarily attributable to synergies expected from the expanded technology and service capabilities from the integrated business as well as the value of the assembled workforce in accordance with GAAP.

WePurchase ~~adopted ASU No. 2016-02, Leases (Topic 842), as~~ of January 1, 2019, using the effective date method for the modified retrospective approach. Comparative periods were not restated. In addition, the Company elected the package of practical expedients permitted under the transaction guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. The Company also elected the practical expedients pertaining to short-term lease exemptions at transition and going forward. For office leases beginning in 2019 and later, the Company accounts for lease components (components of a contract for which the Company economically benefits from their use and is not highly interrelated with other right of use assets underlying the contract such as base rent) separately from the non-lease components (e.g., common-area maintenance costs). For datacenter leases beginning in 2019 and later, the Company elected the practical expedient to combine its lease and non-lease components that meet the defined criteria and will account for the lease component under Topic 842.TrendKite

~~Topic~~On ~~842~~January 23, ~~includes~~2019, ~~multiple~~the ~~changes~~Company ~~with~~completed ~~one~~its acquisition of ~~the~~TrendKite. ~~most~~The ~~significant~~purchase ~~impacts~~price ~~being~~was ~~the~~approximately ~~addition~~$219.0 million ofand aconsisted ~~right-~~of~~-use~~ ~~(“ROU”)~~approximately ~~asset~~$94.1 ~~and~~million ain ~~lease~~cash ~~liability~~consideration, to the ~~balance~~issuance ~~sheet~~of ~~for~~approximately ~~operating leases~~10.3 Amillion ~~ROU~~ordinary ~~asset~~shares ~~represents~~valued ~~the~~at ~~Company’s~~$124.9 ~~right~~million, and up to ~~use~~$3.2 anmillion ~~underlying~~of ~~asset~~deferred ~~for~~payments ~~the~~due ~~lease~~in ~~term~~12 months in cash of approximately $1.3 million and ~~lease~~ordinary ~~liabilities~~shares ~~represent~~of approximately $1.9 million. The cash portion of the ~~Company’s~~consideration ~~obligation~~was tofunded ~~make~~with ~~lease~~a ~~payments~~combination ~~arising~~of ~~from~~cash ~~the~~on ~~lease.~~hand Anand additional ~~change~~borrowing under ~~Topic~~the ~~842~~First isLien ~~the~~Dollar ~~lease~~Credit ~~term~~Facility, ~~evaluation~~as disclosed in Note 6. ~~Under~~The ~~Topic~~acquisition ~~842,~~of aTrendKite ~~leasee~~will ~~shall~~enhance ~~extend~~the ability of the ~~lease~~Company’s ~~term~~customer ~~beyond~~base to demonstrate and measure the ~~original~~business ~~contract~~impact ~~term~~of iftheir earned media. At the ~~company~~date isof ~~reasonably~~acquisition, ~~certain~~TrendKite tohad ~~exercise~~over ~~their~~200 ~~renewal~~employees ~~option~~with offices in the United States and the United Kingdom.

~~Upon~~Total ~~adoption~~acquisition ofcosts ~~the~~related ~~new~~to ~~standard,~~ the ~~Company~~TrendKite ~~recognized~~acquisition ~~total~~were ~~ROU assets of approximately~~ $733.28 million, ~~total lease liabilities~~ of ~~approximately $85.3~~which ~~million, and corresponding adjustments to prepaid expenses of~~ $(0.2)9 million, ~~deferred~~were ~~rent~~incurred ~~included~~during inthe year ~~other~~ended ~~accrued expenses of $1.8 million~~December 31, 2018 and ~~deferred~~are ~~rent~~ included in ~~other~~general ~~liabilities~~and ofadministrative ~~$10.5~~expense ~~million~~in on the condensed consolidated ~~balance~~statements ~~sheets as~~ of asoperations ofand ~~January 1,~~comprehensive ~~2019~~income. The ~~standard~~acquisition ~~did~~was ~~not~~accounted ~~materially~~for ~~impact~~under ~~our~~the ~~consolidated~~purchase ~~net~~method ~~earnings~~of ~~and had no impact on cash flows~~accounting. The ~~adoption~~operating ofresults ~~the~~are ~~new~~included ~~standard also resulted~~ in ~~significant additional disclosures regarding~~ the ~~Company’s~~accompanying ~~leasing~~condensed ~~activities,~~consolidated asfinancial ~~discussed~~statements infrom ~~Note~~January 523, 2019.

InThe ~~February 2018,~~purchase ~~the~~price ~~FASB~~has ~~issued~~been ~~ASU~~preliminarily ~~2018-02,~~allocated Income Statement – Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which will allow a reclassification from accumulated other comprehensive income to ~~retained earnings for~~ the ~~tax~~assets ~~effects~~acquired ~~resulting from “An Act to Provide for Reconciliation Pursuant to Titles II~~ and Vliabilities ofassumed ~~the~~based ~~Concurrent Resolution~~ on ~~the~~estimated ~~Budget~~fair ~~for~~values ~~Fiscal Year~~as 2018” (the “Act”) that are stranded in accumulated other comprehensive income. This ASU also requires certain disclosures about stranded tax effects; however, it does not change the underlying guidance that requires that the effect of ~~a change in tax laws or rates be included in income from continuing operations. This ASU is effective on January 1, 2019, with early adoption permitted. It must be applied either in~~ the ~~period~~acquisition ~~of adoption or retrospectively to each period in which the effect of the change in the U~~date.~~S. federal corporate income tax rate in the Act is recognized. The Company adopted ASU~~

9The following table summarizes the preliminary allocation of the purchase price by the Company to the fair value of the assets and liabilities of TrendKite. The amounts related to taxes and intangible assets shown below are preliminary and subject to adjustment as additional information is obtained about the facts and circumstances that existed at the date of acquisition. The identifiable intangible assets include the trade name, customer relationships and purchased technology and are being amortized over three to eleven years on an accelerated basis. The Company expects to complete the purchase price allocation on or before January 23, 2020.

Table of Contents

(in thousands)
Cash and cash equivalents	$		1,976
Accounts receivable, net			7,714
Prepaid and other assets			1,676
Property, equipment and software, net		820
Trade name		380
Customer relationships			31,930
Purchased technology			4,915
Goodwill			185,108
Total assets acquired			234,519
Accounts payable and accrued liabilities			(4,611	)
Deferred revenue			(8,924	)
Deferred taxes			(2,025	)
Total liabilities assumed			(15,560	)
Net assets acquired	$		218,959

~~Notes~~ Goodwill is not deductible for tax purposes. The preliminary purchase price is subject to ~~Condensed~~customary ~~Consolidated~~post-closing ~~Financial~~adjustments. ~~Statements~~The ~~(continued)~~excess of the purchase price over the total net identifiable assets has been recorded as goodwill which is primarily attributable to synergies expected from the expanded technology and service capabilities from the integrated business as well as the value of the assembled workforce in accordance with GAAP.

~~2018-02 during the six months ended June 30, 2019 and it did not have a material impact on the Company’s condensed consolidated financial statements.~~12

~~Recent~~Sale ~~Accounting~~of ~~Pronouncements Not Yet Effective~~iContact

InOn ~~August~~January ~~2018~~22, ~~the FASB issued ASU 2018-13~~2019, ~~Fair Value Measurement (Topic 820), which modifies~~ the ~~disclosure~~Company ~~requirements~~sold ~~related~~its toemail ~~fair~~marketing ~~value~~business ~~measurements. The ASU eliminates the requirement to disclosure and amount and reasons~~ for ~~transfers~~approximately ~~between~~$49.3 ~~Level~~million 1of ~~and~~cash ~~Level 2 fair value hierarchy~~consideration, ~~the~~net ~~policy for timing~~ of ~~transfers~~working ~~between~~capital ~~levels~~adjustments, ~~and~~with ~~the~~up ~~valuation~~to ~~processes~~an ~~for~~additional ~~Level 3 fair value measurements~~$4.0 ~~Entities~~million ~~will now be required to disclose the changes~~ in ~~unrealized~~cash ~~gains~~based ~~and~~upon ~~losses~~meeting ~~included~~certain inbusiness ~~other~~performance ~~comprehensive~~measures ~~income~~over ~~for~~the ~~recurring~~next ~~Level~~12 months. 3The fair value ~~measurements~~of ~~and~~ the ~~range~~contingent ~~and~~consideration ~~weighted~~was ~~average~~$1.9 ofmillion ~~significant~~based ~~unobservable~~on ~~inputs~~the ~~used~~net topresent ~~develop Level 3 fair~~ value ~~measurements.~~of ~~This~~future ~~ASU~~cash isflows ~~effective~~using ~~for~~internal ~~fiscal years beginning after December 15, 2019, and early adoption is permitted~~models. The Company isused in the ~~process~~proceeds ofto ~~evaluating~~pay down the ~~impact~~Revolving ofCredit ~~this standard on its consolidated financial statements~~Facility.

InSupplemental ~~August 2018,~~Unaudited ~~the~~Pro ~~FASB~~Forma issued ASU 2018-14, Compensation – Retirement Benefits- Defined Benefit Plans – General (Subtopic 715-20), which modifies the disclosure requirements for defined benefit pensions and other postretirement plans. The ASU adds and removes disclosure requirements from the current standard in an effort to improve the effectiveness of retirement benefit disclosures. The ASU is effective for fiscal years ended after December 15, 2020, and early adoption is permitted. The Company is in the process of evaluating the impact of this standard on its consolidated financial statements.Information

InThe ~~August 2018,~~acquired ~~the~~entities ~~FASB~~of ~~issued ASU 2018-15~~Prime, ~~Intangibles –~~Falcon ~~Goodwill~~ and ~~Other –~~TrendKite ~~Internal-Use~~together ~~Software~~contributed ~~(Subtopic~~revenue ~~350-40),~~of ~~which~~$23.8 ~~clarifies~~million ~~the~~and ~~accounting~~$11.8 million for ~~costs~~the ofthree ~~implementing~~months aended ~~cloud~~September ~~computing~~30, ~~service~~2019 ~~arrangement.~~and ~~The~~2018, ~~ASU~~respectively ~~requires~~and ~~companies~~$68.4 tomillion ~~capitalize~~and ~~the~~$34.0 ~~implementation~~million ~~costs~~for ~~associated~~the ~~with~~nine ~~cloud~~months ~~computing~~ended ~~service~~September ~~arrangements~~30, ~~regardless~~2019 asand to2018, ~~whether~~respectively. ~~the~~Net ~~contract~~income ~~contains~~or aloss ~~license.~~from ~~The~~these ~~ASU~~acquisitions ~~is effective~~ for ~~annual~~the ~~periods~~same inperiod ~~2020, including interim periods. The Company~~ is inimpracticable ~~the~~to ~~process~~determine ofdue ~~evaluating~~to the ~~impact~~extent of ~~this~~integration ~~standard on its consolidated financial statements~~activities.

3.The ~~Business~~unaudited ~~Combinations~~pro forma information below gives effect to the acquisition of Prime as if it had occurred as of January 1, 2017 and ~~Dispositions~~Falcon and TrendKite as if they had occurred as of January 1, 2018. The pro forma results exclude the other acquisition in 2018 discussed above, as it was deemed not material.

~~Purchase~~The pro forma results presented below show the impact of ~~Prime~~the acquisitions and related costs as well as the increase in interest expense related to acquisition-related debt.

On January 23, 2018, the Company completed its acquisition of PRIME Research (“Prime”). The purchase price was approximately €75.7 million ($94.1 million) and consisted of approximately €53.1 million ($65.4 million) in cash consideration, the issuance of approximately 1.7 million shares of common stock valued at €16.4 million ($20.1 million), and up to €6.2 million ($8.6 million) of deferred payments due within 18 months. The Company has the discretion to pay up to €2.5 million ($3.1 million) of the deferred payments with common stock. The acquisition of Prime expanded the Company’s comprehensive data-driven offerings that help communications professionals identify influencers, craft meaningful campaigns, and attribute business value to those efforts. At the date of the acquisition, Prime had over 700 employees with offices in Brazil, China, Germany, India, Switzerland, the United Kingdom, and the United States.

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands, except per share data)	2019		2018			2019		2018
Revenue	$	189,395	$	191,637		$	574,231	$	585,763
Net income (loss)		3,891		(12,915	)		13,072		(32,561	)
Net income (loss) per share - basic		0.03		(0.09	)		0.09		(0.23	)
Net income (loss) per share - diluted		0.03		(0.09	)		0.09		(0.23	)

~~Total acquisition costs related to the Prime acquisition were $5.~~4 ~~million of which $2~~.3 ~~million~~Goodwill ~~were incurred during the six months ended June 30, 2018~~ and the rest were incurred in 2017. Total acquisition costs were included in general and administrative expense in the condensed consolidated statements of operations and comprehensive loss. The acquisition was accounted for under the purchase method of accounting. The operating results are included in the accompanying condensed consolidated financial statements from January 23, 2018.Intangibles

~~The~~Changes ~~purchase~~in ~~price has been allocated to~~ the ~~assets~~carrying ~~acquired~~amounts ~~and~~of ~~liabilities~~goodwill ~~assumed~~since ~~based~~December 31, on2018 ~~fair~~consisted ~~values as~~ of the ~~acquisition date.~~following:

The following table summarizes the allocation of the purchase price by the Company to the fair value of the assets and liabilities of Prime. The identifiable intangible assets include the trade name, customer relationships and purchased

(in thousands)
Balance as of December 31, 2018	$	1,171,859
Acquisition of Falcon		87,674
Acquisition of TrendKite		185,108
Sale of iContact		(21,289	)
Effects of foreign currency		(11,706	)
Balance as of September 30, 2019	$	1,411,646

10Definite-lived intangible assets consisted of the following at September 30, 2019 and December 31, 2018:

Table of Contents

	September 30, 2019
	Gross		Foreign						Net
	Carrying		Currency			Accumulated			Carrying
(in thousands)	Amount		Translation			Amortization			Amount
Trade names and brand	$	370,873	$	(8,987	)	$	(141,770	)	$	220,116
Customer relationships		357,958		(22,927	)		(200,869	)		134,162
Purchased technology		138,746		(8,392	)		(107,772	)		22,582
Balances at September 30, 2019	$	867,577	$	(40,306	)	$	(450,411	)	$	376,860

~~Notes to Condensed Consolidated Financial Statements (continued)~~13

technology and are being amortized over three to eleven years on an accelerated basis. The Company completed the purchase price allocation in January 2019.

	December 31, 2018
	Gross		Foreign						Net
	Carrying		Currency			Accumulated			Carrying
(in thousands)	Amount		Translation			Amortization			Amount
Trade names and brand	$	372,010	$	(8,143	)	$	(115,954	)	$	247,913
Customer relationships		321,862		(18,967	)		(203,031	)		99,864
Purchased technology		145,951		(7,408	)		(109,174	)		29,369
Balances at December 31, 2018	$	839,823	$	(34,518	)	$	(428,159	)	$	377,146

Weighted-average useful life at September 30, 2019	Years
Trade names and brand		11.1
Customer relationships		6.2
Purchased technology		2.9


(in thousands)
Cash and cash equivalents	$	2,711
Accounts receivable, net		8,186
Prepaid and other assets		1,320
Property, equipment and software, net		1,207
Trade name		1,436
Customer relationships		17,903
Purchased technology		9,881
Goodwill		57,465
Total assets acquired		100,109
Accounts payable, accrued liabilities, and other liabilities		(5,627)
Deferred revenue		(426)
Total liabilities assumed		(6,053)
Net assets acquired	$	94,056

Future expected amortization of intangible assets at September 30, 2019 is as follows:

(in thousands)
Remainder of 2019	$	24,067
2020		84,202
2021		65,990
2022		48,150
2023		35,024
Thereafter		119,427
	$	376,860

~~Approximately $39~~5.6 million of goodwill is deductible for tax purposes. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill which is primarily attributable to synergies expected from the expanded technology and service capabilities from the integrated business as well as the value of the assembled workforce in accordance with GAAP.Leases

~~Other~~The ~~2018~~Company ~~Acquisition~~has various non-cancelable operating leases, primarily related to office real estate and datacenters, that expire through 2035 and generally contain renewal options for up to five years. Under ASC 842, the lease term includes options to extend or terminate the lease when the Company is reasonably certain that it will exercise the option. The Company will monitor events or changes in circumstances that impact the timing or amount of future lease payments and will adjust the lease liability and corresponding ROU asset as necessary. For office leases beginning in 2019 and later, the Company accounts for lease components (components of a contract for which the Company economically benefits from their use and is not highly interrelated with other right of use assets underlying the contract such as base rent) separately from the non-lease components (e.g., common-area maintenance costs). For datacenter leases beginning in 2019 and later, the Company elected the practical expedient to combine its lease and non-lease components that meet the defined criteria and will account for the lease component under Topic 842. The Company has no significant financing leases. Lastly, the Company has not entered into any future office space leases that will create significant rights and obligations for the Company.

~~During~~At inception of a contract, the ~~third~~Company ~~quarter~~determines if the contract contains a lease based on requirements of ~~2018~~ASC 842. If a lease with a term greater than 1 year is identified, the Company ~~purchased~~will ~~certain~~add ~~immaterial~~a ~~technology~~ROU asset and ~~development~~lease ~~assets~~liability to ~~expand~~the ~~its~~balance ~~products~~sheet. ~~and~~The ~~services~~Company ~~offerings,~~has ~~and~~elected the ~~results~~practical expedient and expenses all leases with a contract term of ~~this~~1 year ~~acquisition~~or ~~have~~less. ~~been~~The ~~included~~Company inrecognizes a lease liability based on the ~~consolidated~~net ~~results~~present ~~from~~value of total lease payments which utilizes an implicit discount rate based on the ~~acquisition~~Company’s ~~date~~collateralized borrowing rate placed on a yield curve. The ~~estimate~~incremental ofborrowing ~~fair~~rate ~~value~~ for a lease is the ~~assets~~rate ~~acquired~~of ~~and~~interest ~~liabilities~~the ~~assumed~~Company ~~was~~would ~~based~~have ~~upon~~to pay on a ~~preliminary~~collateralized ~~calculation~~basis ~~and~~to ~~valuation~~borrow ~~and~~an isamount ~~subject~~equal to ~~change~~the aslease ~~additional~~payments ~~information~~under ~~related~~similar toterms. ~~estimates~~To ~~during~~derive the ~~measurement~~ROU ~~period~~asset, isthe ~~obtained~~Company ~~(up~~makes torequired ~~one year~~adjustments, ~~from~~such as indirect costs and prepaid or deferred balances, to the ~~acquisition~~lease ~~date)~~liability. The ~~primary~~Company ~~areas~~recognizes ofoperating ~~those~~lease ~~preliminary~~expense ~~estimates~~on ~~relate~~a tostraight-line ~~certain~~basis ~~identifiable~~over ~~intangible~~the ~~assets~~term of the lease within operating expenses and ~~goodwill~~cost of revenue.

Purchase of Falcon

	Three months ended			Nine months ended
Lease Cost (in thousands)	September 30, 2019			September 30, 2019
Operating lease cost	$	4,780		$	14,337
Short-term lease cost		822			2,487
Variable lease cost		1,376			5,503
Sublease income		(249	)		(685	)
Total lease cost	$	6,729		$	21,642

On January 3, 2019, the Company completed its acquisition of Falcon.io (“Falcon”). The purchase price was approximately €103.4 million ($119.0 million) and consisted of approximately €53.6 million ($61.7 million) in cash consideration, the issuance of approximately 5.1 million ordinary shares valued at €49.8 million ($57.3 million), and up to €5.2 million ($6.0 million) of deferred payments due within 12 months in cash of €2.4 million ($2.8 million) and ordinary shares of €2.8 million ($3.2 million). The cash portion of the consideration was funded with a combination of cash on hand and borrowings under the Company’s Revolving Credit Facility. The Company drew approximately $40.0 million under its Revolving Credit Facility in connection with the closing of the Falcon acquisition, all of which was repaid during the six months ended June 30, 2019. The acquisition of Falcon solidifies the Company’s market leadership in driving the future of earned media management, moving beyond the tactical nature of PR point solutions. At the date of the acquisition, Falcon had over 250 employees with offices in Denmark, Germany, Hungary, Australia, Bulgaria, and the United States.14

Total acquisition costs related to the Falcon acquisition were $2.4 million of which $0.4 million were incurred during the year ended December 31, 2018 and are included in general and administrative expense in the condensed consolidated statements of operations and comprehensive income. The acquisition was accounted for under the purchase method of accounting. The operating results are included in the accompanying condensed consolidated financial statements from January 3, 2019.

Operating leases (thousands)

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