false--12-31Q320190001286225P6MP2YP20DP20DP20DP20DP20DP20DP20DP20DP20DP20DP20DP20D85.17100.4073.0177.84100.0878.4488.9687.85112.9560.8466.9269.50P7YP7YP5YP8YP7Y1705600017056000885000085520000000.0010.001250000000250000000959911629625204193650127949448500.023840.05870.00350.00150.0010.00110000000100000000000P3YP1Y00023410351307191 0001286225 2019-01-01 2019-09-30 0001286225 2019-10-24 0001286225 2018-12-31 0001286225 2019-09-30 0001286225 us-gaap:ServiceMember 2019-07-01 2019-09-30 0001286225 2018-07-01 2018-09-30 0001286225 2019-07-01 2019-09-30 0001286225 2018-01-01 2018-09-30 0001286225 rp:OnDemandMember 2019-01-01 2019-09-30 0001286225 us-gaap:ServiceMember 2018-07-01 2018-09-30 0001286225 us-gaap:TechnologyServiceMember 2019-07-01 2019-09-30 0001286225 us-gaap:TechnologyServiceMember 2018-07-01 2018-09-30 0001286225 us-gaap:TechnologyServiceMember 2019-01-01 2019-09-30 0001286225 rp:OnDemandMember 2018-07-01 2018-09-30 0001286225 rp:OnDemandMember 2019-07-01 2019-09-30 0001286225 us-gaap:ServiceMember 2018-01-01 2018-09-30 0001286225 rp:OnDemandMember 2018-01-01 2018-09-30 0001286225 us-gaap:ServiceMember 2019-01-01 2019-09-30 0001286225 us-gaap:TechnologyServiceMember 2018-01-01 2018-09-30 0001286225 us-gaap:TreasuryStockMember 2019-09-30 0001286225 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-09-30 0001286225 us-gaap:TreasuryStockMember 2019-01-01 2019-09-30 0001286225 us-gaap:RetainedEarningsMember 2019-01-01 2019-09-30 0001286225 us-gaap:RetainedEarningsMember 2019-01-01 0001286225 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001286225 us-gaap:CommonStockMember 2019-01-01 2019-09-30 0001286225 2019-01-01 0001286225 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0001286225 us-gaap:TreasuryStockMember 2018-12-31 0001286225 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-30 0001286225 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001286225 us-gaap:CommonStockMember 2018-12-31 0001286225 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-09-30 0001286225 us-gaap:CommonStockMember 2019-09-30 0001286225 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 0001286225 us-gaap:RetainedEarningsMember 2018-12-31 0001286225 us-gaap:RetainedEarningsMember 2019-09-30 0001286225 us-gaap:CommonStockMember 2018-01-01 2018-09-30 0001286225 us-gaap:TreasuryStockMember 2018-01-01 2018-09-30 0001286225 us-gaap:TreasuryStockMember 2017-12-31 0001286225 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-09-30 0001286225 us-gaap:RetainedEarningsMember 2018-01-01 0001286225 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-09-30 0001286225 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-09-30 0001286225 us-gaap:CommonStockMember 2017-12-31 0001286225 us-gaap:CommonStockMember 2018-09-30 0001286225 us-gaap:TreasuryStockMember 2018-09-30 0001286225 2018-09-30 0001286225 2018-01-01 0001286225 us-gaap:RetainedEarningsMember 2017-12-31 0001286225 us-gaap:RetainedEarningsMember 2018-09-30 0001286225 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0001286225 2017-12-31 0001286225 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0001286225 us-gaap:AdditionalPaidInCapitalMember 2018-09-30 0001286225 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-07-01 2019-09-30 0001286225 us-gaap:CommonStockMember 2019-06-30 0001286225 us-gaap:AdditionalPaidInCapitalMember 2019-07-01 2019-09-30 0001286225 us-gaap:TreasuryStockMember 2019-07-01 2019-09-30 0001286225 us-gaap:TreasuryStockMember 2019-06-30 0001286225 us-gaap:RetainedEarningsMember 2019-06-30 0001286225 2019-06-30 0001286225 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001286225 us-gaap:CommonStockMember 2019-07-01 2019-09-30 0001286225 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001286225 us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0001286225 us-gaap:RetainedEarningsMember 2018-06-30 0001286225 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-07-01 2018-09-30 0001286225 us-gaap:AdditionalPaidInCapitalMember 2018-07-01 2018-09-30 0001286225 us-gaap:CommonStockMember 2018-06-30 0001286225 us-gaap:TreasuryStockMember 2018-07-01 2018-09-30 0001286225 us-gaap:CommonStockMember 2018-07-01 2018-09-30 0001286225 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0001286225 us-gaap:TreasuryStockMember 2018-06-30 0001286225 2018-06-30 0001286225 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0001286225 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0001286225 country:US 2019-09-30 0001286225 rp:InternationalSubsidiariesMember 2018-12-31 0001286225 us-gaap:AccountingStandardsUpdate201602Member 2019-03-31 0001286225 country:US 2018-12-31 0001286225 rp:InternationalSubsidiariesMember 2019-09-30 0001286225 rp:LengthofExpectedCustomerBenefitofLicenseFeesBilledatInitialOrderDateMember 2019-01-01 2019-09-30 0001286225 rp:LeaseTermInsuranceGroupLLCMember 2019-04-01 2019-04-30 0001286225 rp:SimpleBillsCorporationMember 2019-07-31 0001286225 2018-01-01 2018-12-31 0001286225 rp:HiperceptMember rp:ContingentConsiderationCashPaymentsMember 2019-07-31 0001286225 rp:LeaseLabsMember 2019-04-01 2019-04-30 0001286225 srt:MaximumMember rp:SimpleBillsCorporationMember 2019-07-31 0001286225 rp:HiperceptMember 2019-07-31 0001286225 rp:LeaseLabsMember 2019-09-01 2019-09-30 0001286225 rp:LeaseLabsMember 2018-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SimpleBillsCorporationMember rp:ContingentConsiderationStockGrantsMember 2019-07-31 0001286225 rp:NovelPayAndClickPayMember 2019-05-01 2019-05-31 0001286225 srt:MaximumMember rp:HiperceptMember 2019-07-31 0001286225 rp:LeaseTermInsuranceGroupLLCMember 2019-04-30 0001286225 rp:HiperceptMember 2019-07-01 2019-07-31 0001286225 srt:MaximumMember rp:LeaseTermInsuranceGroupLLCMember 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:HiperceptMember 2019-09-30 0001286225 rp:HiperceptMember us-gaap:TradeNamesMember 2019-07-01 2019-07-31 0001286225 rp:LeaseTermInsuranceGroupLLCMember us-gaap:TradeNamesMember 2019-04-01 2019-04-30 0001286225 rp:SimpleBillsCorporationMember us-gaap:TradeNamesMember 2019-07-01 2019-07-31 0001286225 rp:SimpleBillsCorporationMember 2019-07-01 2019-07-31 0001286225 rp:PerformanceBasedRestrictedStockMember rp:HiperceptMember rp:ContingentConsiderationStockGrantsMember 2019-07-31 0001286225 rp:LeaseLabsMember 2018-09-01 2018-09-30 0001286225 rp:BluTrendMember 2018-07-31 0001286225 rp:ClickPayMember 2018-04-01 2018-04-30 0001286225 rp:ClickPayMember 2018-04-30 0001286225 rp:RentlyticsMember 2018-10-31 0001286225 rp:RentlyticsMember 2018-10-01 2018-10-31 0001286225 rp:BluTrendMember 2018-07-01 2018-07-31 0001286225 rp:HiperceptMember us-gaap:CustomerRelationshipsMember 2019-09-30 0001286225 rp:HiperceptMember 2019-09-30 0001286225 rp:SimpleBillsCorporationMember 2019-09-30 0001286225 rp:SimpleBillsCorporationMember 2019-01-01 2019-09-30 0001286225 rp:LeaseTermInsuranceGroupLLCMember 2019-09-30 0001286225 rp:SimpleBillsCorporationMember us-gaap:CustomerRelationshipsMember 2019-09-30 0001286225 rp:SimpleBillsCorporationMember us-gaap:TradeNamesMember 2019-09-30 0001286225 rp:HiperceptMember us-gaap:DevelopedTechnologyRightsMember 2019-09-30 0001286225 rp:LeaseTermInsuranceGroupLLCMember us-gaap:CustomerRelationshipsMember 2019-09-30 0001286225 rp:HiperceptMember 2019-01-01 2019-09-30 0001286225 rp:LeaseTermInsuranceGroupLLCMember us-gaap:TradeNamesMember 2019-09-30 0001286225 rp:LeaseTermInsuranceGroupLLCMember us-gaap:DevelopedTechnologyRightsMember 2019-09-30 0001286225 rp:LeaseTermInsuranceGroupLLCMember 2019-01-01 2019-09-30 0001286225 rp:HiperceptMember us-gaap:TradeNamesMember 2019-09-30 0001286225 rp:SimpleBillsCorporationMember us-gaap:DevelopedTechnologyRightsMember 2019-09-30 0001286225 rp:SimpleBillsCorporationMember us-gaap:CustomerRelationshipsMember 2019-07-01 2019-07-31 0001286225 rp:LeaseTermInsuranceGroupLLCMember us-gaap:CustomerRelationshipsMember 2019-04-01 2019-04-30 0001286225 rp:HiperceptMember us-gaap:DevelopedTechnologyRightsMember 2019-07-01 2019-07-31 0001286225 rp:HiperceptMember us-gaap:CustomerRelationshipsMember 2019-07-01 2019-07-31 0001286225 rp:SimpleBillsCorporationMember us-gaap:DevelopedTechnologyRightsMember 2019-07-01 2019-07-31 0001286225 rp:OnDemandMember 2019-09-30 0001286225 rp:OnDemandMember 2019-01-01 2019-09-30 0001286225 rp:LeasingAndMarketingMember 2019-07-01 2019-09-30 0001286225 rp:PropertyManagementMember 2018-01-01 2018-09-30 0001286225 rp:ResidentServicesMember 2018-07-01 2018-09-30 0001286225 rp:LeasingAndMarketingMember 2018-01-01 2018-09-30 0001286225 rp:AssetOptimizationMember 2018-01-01 2018-09-30 0001286225 rp:LeasingAndMarketingMember 2018-07-01 2018-09-30 0001286225 rp:ResidentServicesMember 2018-01-01 2018-09-30 0001286225 rp:PropertyManagementMember 2018-07-01 2018-09-30 0001286225 rp:PropertyManagementMember 2019-07-01 2019-09-30 0001286225 rp:AssetOptimizationMember 2018-07-01 2018-09-30 0001286225 rp:AssetOptimizationMember 2019-01-01 2019-09-30 0001286225 rp:ResidentServicesMember 2019-07-01 2019-09-30 0001286225 rp:ResidentServicesMember 2019-01-01 2019-09-30 0001286225 rp:LeasingAndMarketingMember 2019-01-01 2019-09-30 0001286225 rp:PropertyManagementMember 2019-01-01 2019-09-30 0001286225 rp:AssetOptimizationMember 2019-07-01 2019-09-30 0001286225 us-gaap:ComputerSoftwareIntangibleAssetMember 2018-07-01 2018-09-30 0001286225 us-gaap:ComputerSoftwareIntangibleAssetMember 2019-01-01 2019-09-30 0001286225 us-gaap:ComputerSoftwareIntangibleAssetMember 2019-07-01 2019-09-30 0001286225 us-gaap:ComputerSoftwareIntangibleAssetMember 2018-01-01 2018-09-30 0001286225 us-gaap:ComputerSoftwareIntangibleAssetMember 2018-12-31 0001286225 us-gaap:LeaseholdImprovementsMember 2018-12-31 0001286225 rp:FurnitureFixturesAndOtherEquipmentMember 2019-09-30 0001286225 us-gaap:ComputerSoftwareIntangibleAssetMember 2019-09-30 0001286225 us-gaap:LeaseholdImprovementsMember 2019-09-30 0001286225 rp:DataProcessingandCommunicationsEquipmentMember 2018-12-31 0001286225 rp:FurnitureFixturesAndOtherEquipmentMember 2018-12-31 0001286225 rp:DataProcessingandCommunicationsEquipmentMember 2019-09-30 0001286225 rp:HeadquartersRichardsonTXMember 2015-05-31 0001286225 rp:VendorRelationshipsMember 2019-09-30 0001286225 us-gaap:TradeNamesMember 2018-12-31 0001286225 us-gaap:CustomerRelationshipsMember 2019-09-30 0001286225 us-gaap:TradeNamesMember 2018-12-31 0001286225 us-gaap:DevelopedTechnologyRightsMember 2019-09-30 0001286225 us-gaap:DevelopedTechnologyRightsMember 2018-12-31 0001286225 us-gaap:NoncompeteAgreementsMember 2019-09-30 0001286225 us-gaap:TradeNamesMember 2019-09-30 0001286225 us-gaap:CustomerRelationshipsMember 2018-12-31 0001286225 us-gaap:NoncompeteAgreementsMember 2018-12-31 0001286225 rp:VendorRelationshipsMember 2018-12-31 0001286225 us-gaap:TradeNamesMember 2019-09-30 0001286225 us-gaap:FiniteLivedIntangibleAssetsMember 2019-07-01 2019-09-30 0001286225 us-gaap:FiniteLivedIntangibleAssetsMember 2018-01-01 2018-09-30 0001286225 us-gaap:FiniteLivedIntangibleAssetsMember 2019-01-01 2019-09-30 0001286225 us-gaap:FiniteLivedIntangibleAssetsMember 2018-07-01 2018-09-30 0001286225 rp:TermLoanAmendmentMember rp:TermLoanMember 2018-12-31 0001286225 rp:TermLoanMember 2019-09-30 0001286225 rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember 2018-01-01 2018-09-30 0001286225 rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember 2019-07-01 2019-09-30 0001286225 rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember 2018-07-01 2018-09-30 0001286225 rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember 2019-01-01 2019-09-30 0001286225 rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember 2019-09-30 0001286225 srt:MaximumMember us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember 2019-01-01 2019-09-30 0001286225 us-gaap:LetterOfCreditMember us-gaap:LineOfCreditMember 2019-09-05 0001286225 us-gaap:InterestExpenseMember 2019-09-30 0001286225 us-gaap:BridgeLoanMember us-gaap:LineOfCreditMember 2019-09-05 0001286225 us-gaap:OtherAssetsMember rp:TermLoanAmendmentMember 2019-09-30 0001286225 us-gaap:FairValueInputsLevel2Member us-gaap:ConvertibleNotesPayableMember 2018-12-31 0001286225 rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember 2019-04-01 2019-06-30 0001286225 rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember 2017-05-23 0001286225 us-gaap:RevolvingCreditFacilityMember 2019-09-30 0001286225 srt:MaximumMember us-gaap:RevolvingCreditFacilityMember 2019-09-30 0001286225 srt:ScenarioForecastMember rp:TermLoanAmendmentMember 2023-12-31 2023-12-31 0001286225 us-gaap:FairValueInputsLevel2Member rp:TermLoanMember 2018-12-31 0001286225 rp:TermLoanAmendmentMember rp:TermLoanMember 2019-09-05 0001286225 us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-09-30 0001286225 srt:MaximumMember us-gaap:RevolvingCreditFacilityMember 2019-01-01 2019-09-30 0001286225 2017-05-23 0001286225 srt:MinimumMember rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember 2019-01-01 2019-09-30 0001286225 srt:ScenarioForecastMember rp:TermLoanAmendmentMember 2020-12-31 2020-12-31 0001286225 srt:MinimumMember rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember 2019-04-01 2019-06-30 0001286225 srt:MaximumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-09-30 0001286225 rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember us-gaap:MeasurementInputSharePriceMember 2019-09-30 0001286225 us-gaap:RevolvingCreditFacilityMember us-gaap:FederalFundsEffectiveSwapRateMember 2019-01-01 2019-09-30 0001286225 rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember 2019-09-30 2019-09-30 0001286225 us-gaap:OverAllotmentOptionMember us-gaap:ConvertibleNotesPayableMember 2017-05-23 0001286225 srt:MinimumMember us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-09-30 0001286225 us-gaap:FairValueInputsLevel2Member us-gaap:ConvertibleNotesPayableMember 2019-09-30 0001286225 2017-05-23 2017-05-23 0001286225 rp:TermLoanMember 2019-09-30 0001286225 rp:TermLoanAmendmentMember rp:TermLoanMember 2019-09-05 2019-09-05 0001286225 srt:ScenarioForecastMember rp:TermLoanAmendmentMember 2022-12-31 2022-12-31 0001286225 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:FairValueMeasurementsNonrecurringMember 2019-09-30 0001286225 us-gaap:FairValueInputsLevel2Member rp:TermLoanMember 2019-09-30 0001286225 us-gaap:RevolvingCreditFacilityMember 2018-12-31 0001286225 srt:MaximumMember 2017-05-23 0001286225 rp:TermLoanAmendmentMember us-gaap:LineOfCreditMember us-gaap:BaseRateMember 2019-09-30 0001286225 srt:MinimumMember us-gaap:RevolvingCreditFacilityMember 2019-01-01 2019-09-30 0001286225 rp:InitialTermLoanMember rp:TermLoanMember 2019-09-05 0001286225 us-gaap:ConvertibleNotesPayableMember 2017-05-23 2017-05-23 0001286225 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-09-05 0001286225 srt:MinimumMember us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember 2019-01-01 2019-09-30 0001286225 rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember 2018-12-31 0001286225 srt:MinimumMember rp:TermLoanAmendmentMember 2019-01-01 2019-09-30 0001286225 rp:ConvertibleSeniorNotesDueNovember2022Member us-gaap:ConvertibleNotesPayableMember 2018-09-30 0001286225 srt:MaximumMember rp:TermLoanAmendmentMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheTwelveMember 2019-07-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheTwelveMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheEightMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember us-gaap:ShareBasedCompensationAwardTrancheThreeMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheTenMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheElevenMember 2019-07-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheFourMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheElevenMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheNineMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheEightMember 2019-07-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember us-gaap:ShareBasedCompensationAwardTrancheThreeMember 2019-07-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheTenMember 2019-07-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheSixMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheFiveMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2019-07-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheSevenMember 2019-01-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheFiveMember 2019-07-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheSixMember 2019-07-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheNineMember 2019-07-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2019-07-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheSevenMember 2019-07-01 2019-09-30 0001286225 rp:PerformanceBasedRestrictedStockMember rp:SharebasedCompensationAwardTrancheFourMember 2019-07-01 2019-09-30 0001286225 us-gaap:RestrictedStockMember rp:A2010EquityIncentivePlanMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2019-01-01 2019-09-30 0001286225 us-gaap:RestrictedStockMember rp:A2010EquityIncentivePlanMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2019-07-01 2019-09-30 0001286225 us-gaap:RestrictedStockMember rp:A2010EquityIncentivePlanMember us-gaap:ShareBasedCompensationAwardTrancheThreeMember 2019-01-01 2019-09-30 0001286225 us-gaap:RestrictedStockMember rp:A2010EquityIncentivePlanMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2019-01-01 2019-09-30 0001286225 us-gaap:RestrictedStockMember rp:A2010EquityIncentivePlanMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2019-07-01 2019-09-30 0001286225 us-gaap:RestrictedStockMember rp:A2010EquityIncentivePlanMember us-gaap:ShareBasedCompensationAwardTrancheThreeMember 2019-07-01 2019-09-30 0001286225 2018-05-01 2018-05-31 0001286225 2019-01-01 2019-01-31 0001286225 rp:ClickPayAndBluTrendMember 2018-01-01 2018-09-30 0001286225 rp:ClickPayAndBluTrendMember 2019-01-01 2019-09-30 0001286225 rp:LeaseLabsMember 2019-04-01 2019-06-30 0001286225 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MeasurementInputDiscountRateMember 2019-09-30 0001286225 rp:CompstakMember us-gaap:OtherAssetsMember us-gaap:ConvertiblePreferredStockMember rp:SeriesA1Member 2016-08-31 0001286225 rp:CompstakMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsNonrecurringMember 2019-01-01 2019-03-31 0001286225 rp:HiperceptMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MeasurementInputPriceVolatilityMember 2019-09-30 0001286225 rp:HiperceptMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MeasurementInputRiskFreeInterestRateMember 2019-09-30 0001286225 rp:CompstakMember 2019-07-01 2019-09-30 0001286225 rp:CompstakMember us-gaap:OtherAssetsMember us-gaap:ConvertiblePreferredStockMember rp:SeriesA1Member 2018-12-31 0001286225 rp:CompstakMember us-gaap:OtherAssetsMember us-gaap:ConvertiblePreferredStockMember rp:SeriesA1Member 2019-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001286225 rp:LeaseLabsMember us-gaap:FairValueInputsLevel1Member rp:ContingentConsiderationMember us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001286225 rp:LeaseLabsMember us-gaap:FairValueInputsLevel2Member rp:ContingentConsiderationMember us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001286225 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001286225 us-gaap:InterestRateSwapMember us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001286225 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001286225 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001286225 us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001286225 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001286225 rp:LeaseLabsMember us-gaap:FairValueInputsLevel3Member rp:ContingentConsiderationMember us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001286225 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001286225 rp:LeaseLabsMember rp:ContingentConsiderationMember us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001286225 us-gaap:FairValueInputsLevel3Member rp:ContingentConsiderationMember 2018-09-30 0001286225 us-gaap:FairValueInputsLevel3Member rp:ContingentConsiderationMember 2019-01-01 2019-09-30 0001286225 us-gaap:FairValueInputsLevel3Member rp:ContingentConsiderationMember 2018-01-01 2018-09-30 0001286225 us-gaap:FairValueInputsLevel3Member rp:ContingentConsiderationMember 2019-09-30 0001286225 us-gaap:FairValueInputsLevel3Member rp:ContingentConsiderationMember 2017-12-31 0001286225 us-gaap:FairValueInputsLevel3Member rp:ContingentConsiderationMember 2018-12-31 0001286225 us-gaap:ForeignExchangeContractMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 rp:HiperceptMember us-gaap:FairValueInputsLevel3Member rp:ContingentConsiderationMember us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 rp:HiperceptMember us-gaap:FairValueInputsLevel2Member rp:ContingentConsiderationMember us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 us-gaap:ForeignExchangeContractMember us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 us-gaap:ForeignExchangeContractMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 rp:HiperceptMember rp:ContingentConsiderationMember us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 us-gaap:ForeignExchangeContractMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 rp:HiperceptMember us-gaap:FairValueInputsLevel1Member rp:ContingentConsiderationMember us-gaap:FairValueMeasurementsRecurringMember 2019-09-30 0001286225 us-gaap:CommonStockMember 2014-05-01 2014-05-31 0001286225 2018-10-31 0001286225 2014-05-31 0001286225 us-gaap:SubsequentEventMember 2019-11-08 0001286225 us-gaap:OtherAssetsMember us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-09-30 0001286225 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-09-30 0001286225 us-gaap:DesignatedAsHedgingInstrumentMember 2019-09-30 0001286225 us-gaap:OtherAssetsMember us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001286225 us-gaap:OtherCurrentLiabilitiesMember us-gaap:ForeignExchangeContractMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001286225 us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001286225 us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeContractMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-09-30 0001286225 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001286225 us-gaap:OtherCurrentLiabilitiesMember us-gaap:ForeignExchangeContractMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-09-30 0001286225 us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeContractMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001286225 us-gaap:InterestRateSwapMember 2016-03-31 0001286225 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:InterestRateSwapMember 2018-12-24 0001286225 us-gaap:OtherAssetsMember us-gaap:InterestRateSwapMember 2016-03-31 0001286225 us-gaap:InterestRateSwapMember 2019-01-01 2019-09-30 0001286225 us-gaap:InterestRateSwapMember 2018-12-24 0001286225 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-09-30 0001286225 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember rp:CostOfRevenueAndOperatingExpensesMember 2018-07-01 2018-09-30 0001286225 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember rp:CostOfRevenueAndOperatingExpensesMember 2019-07-01 2019-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember rp:InterestExpenseandOtherMember 2019-07-01 2019-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember 2019-07-01 2019-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember rp:InterestExpenseandOtherMember 2018-07-01 2018-09-30 0001286225 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember 2019-07-01 2019-09-30 0001286225 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember 2018-07-01 2018-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember 2018-07-01 2018-09-30 0001286225 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember 2019-01-01 2019-09-30 0001286225 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember rp:CostOfRevenueAndOperatingExpensesMember 2018-01-01 2018-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember rp:InterestExpenseandOtherMember 2019-01-01 2019-09-30 0001286225 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember 2018-01-01 2018-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember 2019-01-01 2019-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember rp:InterestExpenseandOtherMember 2018-01-01 2018-09-30 0001286225 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember rp:CostOfRevenueAndOperatingExpensesMember 2019-01-01 2019-09-30 0001286225 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember 2018-01-01 2018-09-30 0001286225 rp:BuildiumMember us-gaap:SubsequentEventMember 2019-11-06 2019-11-06 iso4217:USD xbrli:shares rp:acquisition iso4217:USD xbrli:shares xbrli:pure rp:day rp:customer rp:derivative_instrument
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
 
FORM 10-Q
 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2019
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 001-34846 
 
RealPage, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
75-2788861
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
                            2201 Lakeside Boulevard
 
75082-4305
Richardson
,
Texas
 
 
(Address of principal executive offices)
 
(Zip Code)
(972) 820-3000
(Registrant’s telephone number, including area code) 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange
on which registered
Common Stock, $0.001 par value
RP
The NASDAQ Stock Market LLC
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 has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
 
 
Accelerated filer
Non-accelerated filer
 
 
Smaller reporting company
 
 
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class
 
October 24, 2019
Common Stock, $0.001 par value
 
94,854,653


Table of Contents

INDEX
 
 
 
 


Table of Contents

PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
RealPage, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
 
September 30, 2019
 
December 31, 2018
 
(unaudited)
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
270,154

 
$
228,159

Restricted cash
158,865

 
154,599

Accounts receivable, less allowances of $8,552 and $8,850 at September 30, 2019 and December 31, 2018, respectively
131,392

 
123,596

Prepaid expenses
21,304

 
19,214

Other current assets
17,699

 
15,185

Total current assets
599,414

 
540,753

Property, equipment, and software, net
159,605

 
153,528

Right-of-use assets
106,942

 

Goodwill
1,104,006

 
1,053,119

Intangible assets, net
260,680

 
287,378

Deferred tax assets, net
35,482

 
42,602

Other assets
25,781

 
20,393

Total assets
$
2,291,910

 
$
2,097,773

Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
35,677

 
$
25,312

Accrued expenses and other current liabilities
79,598

 
95,482

Current portion of deferred revenue
123,062

 
120,704

Current portion of term loans
7,500

 
16,133

Convertible notes, net
302,032

 

Customer deposits held in restricted accounts
158,870

 
154,601

Total current liabilities
706,739

 
412,232

Deferred revenue
4,861

 
4,902

Term loans, net
291,064

 
287,582

Convertible notes, net

 
292,843

Lease liabilities, net of current portion
120,527

 

Other long-term liabilities
19,407

 
37,190

Total liabilities
1,142,598

 
1,034,749

Commitments and contingencies (Note 10)


 


Stockholders’ equity:
 
 
 
Preferred stock, $0.001 par value: 10,000,000 shares authorized and zero shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively

 

Common stock, $0.001 par value: 250,000,000 shares authorized, 96,252,041 and 95,991,162 shares issued and 94,944,850 and 93,650,127 shares outstanding at September 30, 2019 and December 31, 2018, respectively
96

 
96

Additional paid-in capital
1,209,299

 
1,187,683

Treasury stock, at cost: 1,307,191 and 2,341,035 shares at September 30, 2019 and December 31, 2018, respectively
(36,224
)
 
(65,470
)
Accumulated deficit
(21,371
)
 
(58,793
)
Accumulated other comprehensive loss
(2,488
)
 
(492
)
Total stockholders’ equity
1,149,312

 
1,063,024

Total liabilities and stockholders’ equity
$
2,291,910

 
$
2,097,773

See accompanying notes.

1

Table of Contents

RealPage, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Revenue:
 
 
 
 
 
 
 
On demand
$
245,637

 
$
215,413

 
$
707,341

 
$
615,658

Professional and other
9,565

 
9,540

 
26,028

 
26,848

Total revenue
255,202

 
224,953

 
733,369

 
642,506

Cost of revenue
98,783

 
85,540

 
284,685

 
240,319

Amortization of product technologies
10,315

 
8,946

 
29,729

 
26,368

Gross profit
146,104


130,467


418,955


375,819

Operating expenses:
 
 
 
 
 
 
 
Product development
27,866

 
28,942

 
85,914

 
88,753

Sales and marketing
51,906

 
43,179

 
145,849

 
121,523

General and administrative
31,249

 
30,036

 
87,702

 
85,570

Amortization of intangible assets
10,444

 
9,738

 
30,682

 
26,323

Total operating expenses
121,465

 
111,895

 
350,147

 
322,169

Operating income
24,639

 
18,572

 
68,808

 
53,650

Interest expense and other, net
(8,764
)
 
(8,816
)
 
(22,773
)
 
(25,004
)
Income before income taxes
15,875

 
9,756

 
46,035

 
28,646

Income tax expense
4,171

 
683

 
7,996

 
193

Net income
$
11,704

 
$
9,073


$
38,039

 
$
28,453

 
 
 
 
 
 
 
 
Net income per share attributable to common stockholders:
 
 
 
 
 
 
 
Basic
$
0.13

 
$
0.10

 
$
0.41

 
$
0.33

Diluted
$
0.12

 
$
0.09

 
$
0.39

 
$
0.31

Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
92,239

 
91,222

 
91,884

 
85,874

Diluted
97,114

 
96,590

 
96,392

 
90,451

See accompanying notes.

2

Table of Contents

RealPage, Inc.
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Net income
$
11,704

 
$
9,073

 
$
38,039

 
$
28,453

Other comprehensive (loss) income:
 
 
 
 
 
 
 
Unrealized (loss) gain on derivative instruments, net of tax
(143
)
 
44

 
(1,720
)
 
410

Reclassification adjustment for gains included in earnings on derivative instruments, net of tax
(135
)
 
(170
)
 
(578
)
 
(413
)
Foreign currency translation adjustment
258

 
80

 
277

 
(33
)
Other comprehensive (loss) income, net of tax
(20
)
 
(46
)
 
(2,021
)
 
(36
)
Comprehensive income
$
11,684

 
$
9,027

 
$
36,018

 
$
28,417

See accompanying notes.

3

Table of Contents

RealPage, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands)
(unaudited)

 
 
Nine-Month Period Ended September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Stock
 
Additional
Paid-in Capital
 
Accumulated Other Comprehensive Loss
 
Accumulated Deficit
 
Treasury Stock
 
Total
Stockholders’ Equity
 
Shares
 
Amount
 
 
 
 
Shares
 
Amount
 
Balance as of January 1, 2019
95,991

 
$
96

 
$
1,187,683

 
$
(492
)
 
$
(58,793
)
 
2,341

 
$
(65,470
)
 
$
1,063,024

Cumulative effect of adoption of ASU 2017-12

 

 

 
25

 
(25
)
 

 

 

Issuance of common stock in connection with our acquisitions
234

 

 
14,846

 

 

 

 

 
14,846

Stock option exercises
32

 

 
(1,962
)
 

 

 
(200
)
 
6,416

 
4,454

Issuance of restricted stock
7

 

 
(40,733
)
 

 

 
(1,331
)
 
41,232

 
499

Treasury stock purchased, at cost

 

 
2,375

 

 

 
509

 
(19,146
)
 
(16,771
)
Retirement of treasury stock
(12
)
 

 
(152
)
 

 
(592
)
 
(12
)
 
744

 

Stock-based compensation

 

 
47,242

 

 

 

 

 
47,242

Other comprehensive income - derivative instruments

 

 

 
(2,298
)
 

 

 

 
(2,298
)
Foreign currency translation

 

 

 
277

 

 

 

 
277

Net income

 

 

 

 
38,039

 

 

 
38,039

Balance as of September 30, 2019
96,252

 
$
96

 
$
1,209,299

 
$
(2,488
)
 
$
(21,371
)
 
1,307

 
$
(36,224
)
 
$
1,149,312


See accompanying notes.


4

Table of Contents

RealPage, Inc.
Condensed Consolidated Statements of Stockholders’ Equity, continued
(in thousands)
(unaudited)

 
Three-Month Period Ended September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Stock
 
Additional
Paid-in Capital
 
Accumulated Other Comprehensive Loss
 
Accumulated Deficit
 
Treasury Stock
 
Total
Stockholders’ Equity
 
Shares
 
Amount
 
 
 
 
Shares
 
Amount
 
Balance as of July 1, 2019
96,152

 
$
96

 
$
1,189,875

 
$
(2,468
)
 
$
(33,075
)
 
1,292

 
$
(34,109
)
 
$
1,120,319

Issuance of common stock in connection with our acquisitions
80

 

 
5,000

 

 

 

 

 
5,000

Stock option exercises
13

 

 
(685
)
 

 

 
(62
)
 
2,070

 
1,385

Issuance of restricted stock
7

 

 
(1,734
)
 

 

 
(63
)
 
2,233

 
499

Treasury stock purchased, at cost

 

 
755

 

 

 
140

 
(6,418
)
 
(5,663
)
Stock-based compensation

 

 
16,088

 

 

 

 

 
16,088

Other comprehensive income - derivative instruments

 

 

 
(278
)
 

 

 

 
(278
)
Foreign currency translation

 

 

 
258

 

 

 

 
258

Net income

 

 

 

 
11,704

 

 

 
11,704

Balance as of September 30, 2019
96,252

 
$
96

 
$
1,209,299

 
$
(2,488
)
 
$
(21,371
)
 
1,307

 
$
(36,224
)
 
$
1,149,312


See accompanying notes.

5

Table of Contents

RealPage, Inc.
Condensed Consolidated Statements of Stockholders’ Equity, continued
(in thousands)
(unaudited)

 
Nine-Month Period Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Stock
 
Additional
Paid-in Capital
 
Accumulated Other Comprehensive Income
 
Accumulated Deficit
 
Treasury Stock
 
Total
Stockholders’ Equity
 
Shares
 
Amount
 
 
 
 
Shares
 
Amount
 
Balance as of January 1, 2018
87,153

 
$
87

 
$
637,851

 
$
243

 
$
(75,046
)
 
3,973

 
$
(61,260
)
 
$
501,875

Cumulative effect of adoption of ASU 2014-09

 

 

 

 
2,221

 

 

 
2,221

Public offering of common stock, net of $17,056 of offering costs
8,050

 
8

 
441,786

 

 

 

 

 
441,794

Issuance of common stock in connection with our acquisitions
1,361

 
2

 
75,148

 

 

 

 

 
75,150

Stock option exercises
25

 

 
4,389

 

 

 
(472
)
 
5,564

 
9,953

Issuance of restricted stock

 

 
(7,824
)
 

 

 
(1,597
)
 
7,824

 

Treasury stock purchased, at cost

 

 
325

 

 

 
660

 
(22,447
)
 
(22,122
)
Stock-based compensation

 

 
38,435

 

 

 

 

 
38,435

Other comprehensive income - derivative instruments

 

 

 
(3
)
 

 

 

 
(3
)
Foreign currency translation

 

 

 
(33
)
 

 

 

 
(33
)
Net income

 

 

 

 
28,453

 

 

 
28,453

Balance as of September 30, 2018
96,589

 
$
97

 
$
1,190,110

 
$
207

 
$
(44,372
)
 
2,564

 
$
(70,319
)
 
$
1,075,723


See accompanying notes.


6

Table of Contents

RealPage, Inc.
Condensed Consolidated Statements of Stockholders’ Equity, continued
(in thousands)
(unaudited)

 
Three-Month Period Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Stock
 
Additional
Paid-in Capital
 
Accumulated Other Comprehensive Income
 
Accumulated Deficit
 
Treasury Stock
 
Total
Stockholders’ Equity
 
Shares
 
Amount
 
 
 
 
Shares
 
Amount
 
Balance as of July 1, 2018
96,486

 
$
96

 
$
1,159,831

 
$
253

 
$
(53,445
)
 
2,526

 
$
(67,360
)
 
$
1,039,375

Public offering of common stock, net of $17,056 of offering costs

 

 
(5
)
 

 

 

 

 
(5
)
Issuance of common stock in connection with our acquisitions
96

 
1

 
18,538

 

 

 

 

 
18,539

Stock option exercises
7

 

 
(1,080
)
 

 

 
(105
)
 
3,294

 
2,214

Issuance of restricted stock

 

 
(1,430
)
 

 

 
(64
)
 
1,430

 

Treasury stock purchased, at cost

 

 
321

 

 

 
207

 
(7,683
)
 
(7,362
)
Stock-based compensation

 

 
13,935

 

 

 

 

 
13,935

Other comprehensive income - derivative instruments

 

 

 
(126
)
 

 

 

 
(126
)
Foreign currency translation

 

 

 
80

 

 

 

 
80

Net income

 

 

 

 
9,073

 

 

 
9,073

Balance as of September 30, 2018
96,589

 
$
97

 
$
1,190,110

 
$
207

 
$
(44,372
)
 
2,564

 
$
(70,319
)
 
$
1,075,723


See accompanying notes.

7

Table of Contents

RealPage, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
Nine Months Ended September 30,
 
2019
 
2018
Cash flows from operating activities:
 
 
 
Net income
$
38,039

 
$
28,453

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
86,106

 
74,018

Amortization of debt discount and issuance costs
10,189

 
9,272

Amortization of right-of-use assets
8,684

 

Deferred taxes
8,031

 
(2,720
)
Stock-based expense
47,276

 
37,492

Loss on disposal and impairment of other long-lived assets
259

 
3,439

Change in fair value of equity investment
(2,600
)
 

Acquisition-related consideration
1,093

 
806

Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
 
 
 
Accounts receivable
(5,087
)
 
6,933

Prepaid expenses and other current assets
(4,746
)
 
(15,778
)
Other assets
171

 
(2,757
)
Accounts payable
7,836

 
4,044

Accrued compensation, taxes, and benefits
(1,620
)
 
2,574

Deferred revenue
1,517

 
(5,193
)
Customer deposits
(1,034
)
 
(6,361
)
Other current and long-term liabilities
(7,969
)
 
740

Net cash provided by operating activities
186,145

 
134,962

Cash flows from investing activities:
 
 
 
Purchases of property, equipment, and software
(38,511
)
 
(37,287
)
Acquisition of businesses, net of cash and restricted cash acquired
(50,059
)
 
(230,474
)
Purchase of other investment
(1,750
)
 
(1,800
)
Net cash used in investing activities
(90,320
)
 
(269,561
)
Cash flows from financing activities:
 
 
 
Proceeds from term loans
300,000

 

Payments on term loans
(304,996
)
 
(10,083
)
Proceeds from revolving credit facility

 
140,000

Payments on revolving line of credit

 
(190,000
)
Payments of deferred financing costs
(3,306
)
 
(1,135
)
Payments on finance lease obligations
(2,879
)
 
(219
)
Payments of acquisition-related consideration
(26,343
)
 
(28,110
)
Proceeds from public offering, net of underwriters’ discount and offering costs

 
441,794

Proceeds from exercise of stock options
4,454

 
9,953

Purchase of treasury stock related to stock-based compensation
(16,771
)
 
(22,122
)
Net cash (used in) provided by financing activities
(49,841
)
 
340,078

Net increase in cash, cash equivalents and restricted cash
45,984

 
205,479

Effect of exchange rate on cash
277

 
(33
)
Cash, cash equivalents and restricted cash:
 
 
 
Beginning of period
382,758

 
165,345

End of period
$
429,019

 
$
370,791

See accompanying notes.

8

Table of Contents

RealPage, Inc.
Condensed Consolidated Statements of Cash Flows, continued
(in thousands)
(unaudited)
 
Nine Months Ended September 30,
 
2019
 
2018
Supplemental cash flow information:
 
 
 
Cash paid for interest
$
15,740

 
$
12,274

Cash paid for income taxes, net
$
1,872

 
$
2,546

Right-of-use assets obtained in exchange for operating lease obligations
$
21,192

 
$

Non-cash investing and financing activities:
 
 
 
Accrued property, equipment, and software
$
2,259

 
$
1,837

Acquisition-related liabilities settled with equity
$
14,846

 
$

Fair value of stock consideration in connection with acquisition of ClickPay
$

 
$
53,334

Redemption of noncontrolling interest in connection with acquisition of ClickPay
$

 
$
21,816

 
 
 
 
       The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets and that shown in the Condensed Consolidated Statements of Cash Flows:
 
September 30, 2019
 
December 31, 2018
Cash and cash equivalents
$
270,154

 
$
228,159

Restricted cash
158,865

 
154,599

Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash flows
$
429,019

 
$
382,758

See accompanying notes.

9

Table of Contents

RealPage, Inc.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
1. The Company
RealPage, Inc., a Delaware corporation (together with its subsidiaries, the “Company” or “we” or “us”), is a leading global provider of software and data analytics to the real estate industry. Our platform of data analytics and software solutions enables the rental real estate industry to manage property operations (such as marketing, pricing, screening, leasing, and accounting), identify opportunities through market intelligence, and obtain data-driven insight for better operational and financial decision-making. Our integrated, on demand platform provides a single point of access and a massive repository of real-time lease transaction data, including prospect, renter, and property data. By leveraging data as well as integrating and streamlining a wide range of complex processes and interactions among the rental real estate ecosystem (owners, managers, prospects, renters, service providers, and investors), our platform helps our clients improve financial and operational performance and prudently place and harvest capital.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements and footnotes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. We believe that the disclosures made are appropriate and conform to those rules and regulations, and that the condensed or omitted information is not misleading.
The unaudited Condensed Consolidated Financial Statements included herein reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year.
These financial statements should be read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 27, 2019, as amended by our Form 10-K/A filed with the SEC on November 5, 2019 (“Annual Report on Form 10-K”).
Segment and Geographic Information
Our chief operating decision maker is our Chief Executive Officer, who reviews financial information presented on a company-wide basis. As a result, we determined that the Company has a single reporting segment and operating unit structure.
Principally, all of our revenue for the three and nine months ended September 30, 2019 and 2018 was earned in the United States. Net property, equipment, and software located in the United States amounted to $151.0 million and $144.3 million at September 30, 2019 and December 31, 2018, respectively. Net property, equipment, and software located in our international subsidiaries amounted to $8.6 million and $9.2 million at September 30, 2019 and December 31, 2018, respectively. Substantially all of the net property, equipment, and software held in our international subsidiaries was located in the Philippines, India, and Spain at both September 30, 2019 and December 31, 2018.
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. Our cash accounts are maintained at various high credit quality financial institutions and may exceed federally insured limits. We have not experienced any losses in such accounts.
Substantially all of our accounts receivable are derived from clients in the residential rental housing market. Concentrations of credit risk with respect to accounts receivable and revenue are limited due to a large, diverse customer base. We do not require collateral from clients. We maintain an allowance for doubtful accounts based upon the expected collectability of accounts receivable.
No single client accounted for 10% or more of our revenue or accounts receivable for the three or nine months ended September 30, 2019 or 2018.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Such significant estimates include, but are not limited to, the determination of the allowances against our accounts receivable; useful

10

Table of Contents

lives of intangible assets; impairment assessments on long-lived assets (including goodwill); contingent commissions related to the sale of insurance products; fair value of acquired net assets and contingent consideration in connection with business combinations; the nature and timing of satisfaction of performance obligations and related reserves; fair values of stock-based awards; loss contingencies; and the recognition, measurement and valuation of current and deferred income taxes. Actual results could differ from these estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable, the result of which forms the basis for making judgments about the carrying value of assets and liabilities. For greater detail regarding these accounting policies and estimates, refer to our Form 10-K.
Cash and Cash Equivalents and Restricted Cash
We consider all highly liquid investments with an initial maturity of three months or less at the date of purchase to be cash equivalents. The fair value of our cash and cash equivalents approximates carrying value.
Restricted cash consists of cash collected from tenants that will be remitted primarily to our clients.
Accounts Receivable
Accounts receivable primarily represent trade receivables from clients recorded at the invoiced amount, net of allowances, which are based on our historical experience, the aging of our trade receivables, and management judgment.
Trade receivables are written off against the allowance when management determines a balance is uncollectible. We incurred bad debt expense of $0.4 million and $0.9 million for the three months ended, and $1.9 million and $3.0 million for the nine months ended September 30, 2019 and 2018, respectively.
Business Combinations
We allocate the fair value of the purchase consideration of our acquisitions to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Purchase consideration includes assets transferred, liabilities assumed, and/or equity interests issued by us, all of which are measured at their fair value as of the date of acquisition. Our business combination transactions may be structured to include a combination of up-front, deferred and contingent payments to be made at specified dates subsequent to the date of acquisition. These payments may include a combination of cash and equity. Deferred and contingent payments are included in the purchase consideration based on their fair value as of the acquisition date. Deferred obligations are generally subject to adjustments specified in the underlying purchase agreement related to the seller’s indemnification obligations. Contingent consideration is an obligation to make future payments to the seller contingent upon the achievement of future operational or financial targets. The fair value of these payments is estimated using a probability weighted discount model based on the achievement of the specified targets.
The valuation of the net assets acquired as well as certain elements of purchase consideration requires management to make significant estimates and assumptions, especially with respect to future expected cash flows, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable but which are inherently uncertain; and, as a result, actual results may differ from estimates. During the measurement period, we may record adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill. Changes to the fair value of contingent payments is reflected in “General and administrative” expenses in the accompanying Condensed Consolidated Statements of Operations.
Acquisition costs are expensed as incurred and are included in “General and administrative” expenses in the accompanying Condensed Consolidated Statements of Operations. We include the results of operations from acquired businesses in our consolidated financial statements from the effective date of the acquisition.
Deferred Revenue
For several of our solutions, we invoice our clients in annual, monthly, or quarterly installments in advance of the commencement of the service period. Deferred revenue is recognized when billings are due or payments are received in advance of revenue recognition from our subscription and other services. Accordingly, the deferred revenue balance does not represent the total contract value of annual subscription agreements.
Revenue Recognition
Revenues are derived from on demand software solutions, professional services and other goods and services. We recognize revenue as we satisfy one or more service obligations under the terms of a contract, generally as control of goods and services are transferred to our clients. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. We include estimates of variable consideration in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur. We estimate and accrue a reserve for credits and other adjustments as a reduction to revenue based on several factors, including past history.

11

Table of Contents

On Demand Revenue
Our on demand revenue consists of license and subscription fees, transaction fees related to certain of our software-enabled value-added services, and commissions derived from our selling certain risk mitigation services.
We generally recognize revenue from subscription fees on a straight-line basis over the access period beginning on the date that we make our service available to the client. Our subscription agreements generally are non-cancellable, have an initial term of one year or longer and are billed either monthly, quarterly or annually in advance. Non-refundable upfront fees billed at the initial order date that are not associated with an upfront service obligation are recognized as revenue on a straight-line basis over the period in which the client is expected to benefit, which we consider to be three years.
We recognize revenue from transaction fees in the month the related services are performed based on the amount we have the right to invoice.
We offer risk mitigation services to our clients by acting as an insurance agent and derive commission revenue from the sale of insurance products to our clients’ residents. The commissions are based upon a percentage of the premium that the insurance company charges to the policyholder and are subject to forfeiture in instances where a policyholder cancels prior to the end of the policy. Our contracts with our underwriting partners provide for contingent commissions to be paid to us in accordance with the agreements. Our estimate of contingent commission revenue considers the variable factors identified in the terms of the applicable agreement. We recognize commissions related to these services as earned ratably over the policy term and insurance commission receivable in “Accounts receivable, less allowances”.
Professional and Other Revenue
Professional services and other revenues generally consist of the fees we receive for providing implementation and consulting services, submeter equipment and ongoing maintenance of our existing on premise licenses.
Professional services are billed either on a time and materials basis or on a fixed price basis, and revenue is recognized over time as we perform the obligation. Professional services are typically sold bundled in a contract with other on demand solutions but may be sold separately. Professional service contracts sold separately generally have terms of one year or less. For bundled arrangements, where we account for individual services as a separate performance obligation, the transaction price is allocated between separate services in the bundle based on their relative standalone selling prices.
Other revenues consist primarily of submeter equipment sales that include related installation services. Such sales are considered bundled, and revenue from these bundled sales is recognized in proportion to the number of installed units completed to date as compared to the total contracted number of units to be provided and installed. For all other equipment sales, we generally recognize revenue when control of the hardware has transferred to our client.
Revenue recognized for on premise software sales generally consists of annual maintenance renewals on existing term or perpetual license, which is recognized ratably over the service period.
Contracts with Multiple Performance Obligations
The majority of the contracts we enter into with clients, including multiple contracts entered into at or near the same time with the same client, require us to provide one or more on demand software solutions, professional services and may include equipment. For these contracts, we account for individual performance obligations separately: i) if they are distinct or ii) if the promised obligations represent a series of distinct services that are substantially the same and have the same pattern of transfer to the client. Once we determine the performance obligations, we determine the transaction price, which includes estimating the amount of variable consideration, if any, to be included in the transaction price. For contracts with multiple performance obligations, we allocate the transaction price to the separate performance obligations on a relative standalone selling price basis. The standalone selling prices of our service are estimated using a market assessment approach based on our overall pricing objectives taking into consideration market conditions and other factors including the number of solutions sold, client demographics and the number and types of users within our contracts.
Sales, value add, and other taxes we collect from clients and remit to governmental authorities are excluded from revenues.

12

Table of Contents

Fair Value Measurements
We measure our derivative financial instruments and acquisition-related contingent consideration obligations at fair value at each reporting period using a fair value hierarchy. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs are 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.
Level 3 - Inputs are derived from valuation techniques in which one or more of the significant inputs or value drivers are unobservable.
The categorization of an asset or liability is based on the inputs described above and does not necessarily correspond to our perceived risk of that asset or liability. Moreover, the methods used by us may produce a fair value calculation that is not indicative of the net realizable value or reflective of future fair values. Furthermore, although we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments and non-financial assets and liabilities could result in a different fair value measurement at the reporting date.
Certain financial instruments, which may include cash, cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses are recorded at their carrying amounts, which approximates their fair values due to their short-term nature.
We hold an equity investment which does not have a readily determinable fair value. We measure this investment at cost less impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.
Recently Adopted Accounting Standards
Accounting Standards Update 2016-02
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new guidance requires lessees to recognize assets and liabilities arising from all leases with a lease term of more than 12 months, including those classified as operating leases under previous accounting guidance. It also requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations.
We adopted ASU 2016-02 effective January 1, 2019 using the optional transition method provided for in ASU 2018-11, Leases - Targeted Improvements, which eliminated the requirement to restate amounts presented prior to January 1, 2019. We elected the practical expedients permitted under the transition guidance, which allowed us to adopt the guidance without reassessing whether arrangements contain leases, the lease classification and the determination of initial direct costs.
The adoption of ASC 842 resulted in the recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases of $73.9 million and $101.5 million, respectively, at January 1, 2019 (the “Transition Date”) which included reclassifying deferred rent, lease incentives, and favorable and unfavorable leases associated with our acquisitions as a component of the ROU asset. As of the Transition Date, we had insignificant finance leases.
We determine if an arrangement contains a lease at inception. Our ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. For our real estate contracts with lease and non-lease components, we have elected to combine the lease and non-lease components as a single lease component. The implicit rate within our leases are generally not readily determinable, and we use our incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The determination of our incremental borrowing rate requires judgment. We determine our incremental borrowing rate for each lease using our current borrowing rate, adjusted for various factors including collateralization and term to align with the terms of the lease.
We have elected not to recognize a lease liability or ROU asset for short-term leases, defined as those which have a term of twelve months or less.
Certain of our leases include options to extend the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain we will exercise that option. Subsequent to the Transition Date and during the first quarter of 2019, we determined we were reasonably certain to renew the building lease for our corporate headquarters, and as a result, we reassessed the classification of the lease and determined the building lease met the criteria of a finance lease under ASC 842. As a result, an operating ROU asset and lease liability of $36.4 million and

13

Table of Contents

$58.6 million, respectively, were reclassified and remeasured to a finance ROU asset and lease liability of $58.2 million and $80.4 million, respectively.
See Note 6 for additional disclosures related to the impact of adopting the new lease standard.
Accounting Standards Update 2017-12
In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which expands an entity’s ability to apply hedge accounting for nonfinancial and financial risk components and allows for a simplified approach for fair value hedging of interest rate risk. Certain of the amendments in this ASU, as they relate to cash flow hedges, eliminate the requirement to separately record hedge ineffectiveness currently in earnings. Instead, the entire change in the fair value of the hedging instrument is recorded in Other Comprehensive Income (“OCI”), and amounts deferred in OCI will be reclassified to earnings in the same income statement line item in which the earnings effect of the hedged item is reported. Additionally, this ASU simplifies the hedge documentation and effectiveness assessment requirements under the previous guidance. This ASU must be applied on a modified retrospective basis through a cumulative effect adjustment to the opening balance of retained earnings as of the initial application date.
We adopted ASU 2017-12 effective January 1, 2019. As a result of our adoption, we now recognize the entire change in the fair value of our interest rate swaps in OCI. Similar to our treatment of the effective portion of a change in fair value, the ineffective portion is now reclassified into interest expense as interest payments are made on our variable rate debt.
Recently Issued Accounting Standards
In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. We plan to adopt this guidance prospectively to eligible costs incurred on or after January 1, 2020, and we are currently evaluating potential changes to related processes and internal controls.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We will adopt ASU 2016-13 in the first quarter of 2020 utilizing the modified retrospective transition method through a cumulative-effect adjustment to retained earnings. We are currently evaluating appropriate changes to our business processes, systems and controls to support the adoption of the new standard. We are currently evaluating the impact of adopting ASU 2016-13 on our consolidated financial statements.
3. Acquisitions
2019 Acquisitions
Simple Bills
In July 2019, we acquired substantially all of the assets of Simple Bills Corporation (“Simple Bills”), a provider of utility management services for the multi-family student housing market. Aggregate purchase consideration was $18.1 million, including deferred cash obligations of up to $3.4 million that will be released over a two-year period following the closing date, subject to any indemnification claims. In addition, the purchase agreement provides for up to $10.0 million of restricted stock awards contingent upon the achievement of performance targets during 2020 and 2021 for which post-acquisition employment service is required. As these awards are tied to employment services, we will record this amount as stock-based compensation expense over the requisite service period. The acquisition was financed using cash on hand.
The acquired identified intangible assets consisted of developed technology, client relationships and trade names and were assigned estimated useful lives of seven, eight and five years, respectively. Preliminary goodwill recognized of $9.5 million is primarily comprised of anticipated synergies from the expansion of our utility billing solutions. Goodwill and the acquired identified intangible assets are deductible for tax purposes. Acquisition costs associated with this transaction totaled $0.1 million.
Hipercept
In July 2019, we acquired substantially all of the assets of CRE Global Enterprises LLC (“CRE”), and certain of its subsidiaries, including 100% of the shares outstanding in its subsidiaries in the UK, Canada and Colombia (collectively “Hipercept”). Hipercept is a provider of data services and data analytics solutions to institutional commercial real estate owners. Aggregate purchase consideration was $28.2 million, including deferred cash obligations of up to $4.0 million, subject to any indemnification claims, to be released on the first and second anniversary dates of the closing date, and contingent

14

Table of Contents

consideration of up to $28.0 million based on the achievement of certain financial objectives during the six months ended June 30, 2022. The $28.0 million of contingent consideration is comprised of 1) cash payments of up to $25.3 million to CRE, and 2) stock grants of up to $2.7 million to certain individuals for which post-acquisition employment service is required. The fair value of the contingent consideration recorded as purchase consideration was $6.7 million on the date of acquisition and we will record an estimated $0.8 million tied to employment services as stock-based compensation expense over the service period. The acquisition was financed using cash on hand.
The acquired identified intangible assets consisted of developed technology, client relationships and trade names and were assigned estimated useful lives of five, seven and three years, respectively. Preliminary goodwill recognized of $23.1 million is primarily comprised of anticipated synergies from the expansion of our asset and investment management solutions. Goodwill and the acquired identified intangible assets arising from the acquisition of Hipercept’s domestic assets are deductible for tax purposes; those arising from the acquisition of the international entities are not. Acquisition costs associated with this transaction totaled $0.3 million.
LeaseTerm Solutions
In April 2019, we acquired substantially all of the assets of LeaseTerm Insurance Group, LLC (“LeaseTerm Solutions”), a provider of alternatives to traditional renters’ insurance programs and tenant security deposit programs for the multifamily housing industry. Aggregate purchase consideration was $26.5 million, including deferred cash obligations of up to $2.7 million that will be released on the first and second anniversary dates of the closing date, subject to any indemnification claims. The acquisition was financed using cash on hand.
The acquired identified intangible assets consisted of client relationships and trade names and were assigned estimated useful lives of seven and five years, respectively. Preliminary goodwill recognized of $18.6 million is primarily comprised of anticipated synergies from the expansion of our risk management solutions. Goodwill and the acquired identified intangible assets are deductible for tax purposes. Acquisition costs associated with this transaction totaled $0.2 million.
Purchase Consideration and Purchase Price Allocations
The estimated fair values of assets acquired and liabilities assumed are provisional and are based primarily on the information available as of the acquisition date. We believe this information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but we are awaiting additional information necessary to finalize those values. Therefore, the provisional measurements of fair value are subject to change, and such changes could be significant. We expect to finalize the valuation of these assets and liabilities as soon as practicable, but no later than one year from the acquisition closing dates. The components of the purchase consideration and the preliminary allocation of each purchase price, including the effects of measurement period adjustments recorded as of September 30, 2019, are as follows:

15

Table of Contents

 
 
LeaseTerm Solutions
 
Hipercept
 
Simple Bills
 
 
(in thousands)
Fair value of purchase consideration:
 
 
 
 
 
 
Cash, net of cash acquired
 
$
23,417