Cover
Cover - shares | 6 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-35840 | |
Entity Registrant Name | Model N, Inc. | |
Entity Incorporation, State | DE | |
Entity Tax Identification Number | 77-0528806 | |
Entity Address, Street Address | 777 Mariners Island Boulevard, | |
Entity Address, Suite | Suite 300 | |
Entity Address, City | San Mateo, | |
Entity Address, State | CA | |
Entity Address, Postal Zip Code | 94404 | |
City Area Code | 650 | |
Local Phone Number | 610-4600 | |
Title of each class | Common Stock, par value $0.00015 per share | |
Trading Symbol | MODN | |
Name of each exchange on which registered | NYSE | |
Entity Current Filing Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 36,824,125 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001118417 | |
Current Fiscal Year End Date | --09-30 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Current assets | ||
Cash and cash equivalents | $ 170,457 | $ 165,467 |
Funds held for customers | 83 | 316 |
Accounts receivable, net of allowance for doubtful accounts of $185 as of #VALUE! and $225 as of September 30, 2021 | 47,907 | 43,185 |
Prepaid expenses | 3,950 | 4,920 |
Other current assets | 5,754 | 8,442 |
Total current assets | 228,151 | 222,330 |
Property and equipment, net | 1,701 | 1,907 |
Operating lease right-of-use assets | 18,088 | 20,565 |
Goodwill | 65,665 | 65,665 |
Intangible assets, net | 41,378 | 45,394 |
Other assets | 9,085 | 7,929 |
Total assets | 364,068 | 363,790 |
Current liabilities | ||
Accounts payable | 4,056 | 4,802 |
Customer funds payable | 83 | 316 |
Accrued employee compensation | 13,822 | 24,662 |
Accrued liabilities | 5,015 | 4,719 |
Operating lease liabilities, current portion | 4,556 | 4,529 |
Deferred revenue, current portion | 57,457 | 57,431 |
Total current liabilities | 84,989 | 96,459 |
Long term debt | 129,769 | 124,301 |
Operating lease liabilities, less current portion | 14,829 | 17,229 |
Other long-term liabilities | 2,553 | 2,283 |
Total liabilities | 232,140 | 240,272 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Common Stock, $0.00015 par value; 200,000 shares authorized; 36,816 and 36,059 shares issued and outstanding at #VALUE! and September 30, 2021, respectively | 6 | 5 |
Preferred Stock, $0.00015 par value; 5,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 403,539 | 380,528 |
Accumulated other comprehensive loss | (1,502) | (1,205) |
Accumulated deficit | (270,115) | (255,810) |
Total stockholders’ equity | 131,928 | 123,518 |
Total liabilities and stockholders’ equity | $ 364,068 | $ 363,790 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 185 | $ 225 |
Common Stock, par value (in dollars per share) | $ 0.00015 | $ 0.00015 |
Common Stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common Stock, shares issued (in shares) | 36,816,000 | 36,059,000 |
Common Stock, shares outstanding (in shares) | 36,816,000 | 36,059,000 |
Preferred Stock, par value (in dollars per share) | $ 0.00015 | $ 0.00015 |
Preferred Stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
Preferred Stock, shares outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues | ||||
Total revenues | $ 53,280 | $ 48,192 | $ 104,822 | $ 90,926 |
Cost of revenues | ||||
Total cost of revenues | 24,051 | 23,377 | 46,702 | 40,493 |
Gross profit | 29,229 | 24,815 | 58,120 | 50,433 |
Operating expenses | ||||
Research and development | 11,811 | 12,495 | 23,238 | 21,192 |
Sales and marketing | 12,039 | 11,509 | 23,078 | 20,965 |
General and administrative | 9,322 | 7,612 | 17,761 | 16,399 |
Total operating expenses | 33,172 | 31,616 | 64,077 | 58,556 |
Loss from operations | (3,943) | (6,801) | (5,957) | (8,123) |
Interest expense, net | 3,848 | 3,552 | 7,626 | 7,014 |
Other expenses (income), net | (112) | 84 | (12) | 214 |
Loss before income taxes | (7,679) | (10,437) | (13,571) | (15,351) |
Provision for income taxes | 360 | 249 | 734 | 488 |
Net loss | $ (8,039) | $ (10,686) | $ (14,305) | $ (15,839) |
Net loss per share attributable to common stockholders: | ||||
Basic (usd per share) | $ (0.22) | $ (0.30) | $ (0.39) | $ (0.45) |
Diluted (usd per share) | $ (0.22) | $ (0.30) | $ (0.39) | $ (0.45) |
Weighted average number of shares used in computing net loss per share attributable to common stockholders: | ||||
Basic (in shares) | 36,619 | 35,305 | 36,419 | 35,119 |
Diluted (in shares) | 36,619 | 35,305 | 36,419 | 35,119 |
Subscription | ||||
Revenues | ||||
Total revenues | $ 38,243 | $ 35,941 | $ 76,331 | $ 67,376 |
Cost of revenues | ||||
Total cost of revenues | 14,464 | 13,734 | 28,380 | 22,726 |
Professional services | ||||
Revenues | ||||
Total revenues | 15,037 | 12,251 | 28,491 | 23,550 |
Cost of revenues | ||||
Total cost of revenues | $ 9,587 | $ 9,643 | $ 18,322 | $ 17,767 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (8,039) | $ (10,686) | $ (14,305) | $ (15,839) |
Other comprehensive income (loss), net of tax | ||||
Unrealized gain (loss) on cash flow hedges | (104) | (56) | (135) | 9 |
Foreign currency translation gain (loss) | (180) | (41) | (162) | 76 |
Total comprehensive loss | $ (8,323) | $ (10,783) | $ (14,602) | $ (15,754) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (14,305) | $ (15,839) |
Adjustments to reconcile net loss to net cash provided by operating activities | ||
Depreciation and amortization | 4,479 | 3,523 |
Stock-based compensation | 15,308 | 12,910 |
Amortization of debt discount and issuance costs | 5,391 | 4,784 |
Deferred income taxes | 280 | 173 |
Amortization of capitalized contract acquisition costs | 2,027 | 1,382 |
Other non-cash charges | 32 | 0 |
Changes in assets and liabilities, net of acquisition | ||
Accounts receivable | (4,682) | (1,106) |
Prepaid expenses and other assets | 2,614 | (1,888) |
Accounts payable | (729) | 682 |
Accrued employee compensation | (5,517) | (3,963) |
Other current and long-term liabilities | (1,707) | (816) |
Deferred revenue | (263) | 3,287 |
Net cash provided by operating activities | 2,928 | 3,129 |
Cash flows from investing activities | ||
Purchases of property and equipment | (349) | (745) |
Acquisition of business | 0 | (56,834) |
Net cash used in investing activities | (349) | (57,579) |
Cash flows from financing activities | ||
Proceeds from exercise of stock options and issuance of employee stock purchase plan | 2,401 | 2,282 |
Net changes in customer funds payable | (233) | 0 |
Net cash provided by financing activities | 2,168 | 2,282 |
Effect of exchange rate changes on cash and cash equivalents | 10 | 22 |
Net increase (decrease) in cash and cash equivalents | 4,757 | (52,146) |
Cash and cash equivalents | ||
Beginning of period | 165,783 | 200,491 |
End of period | $ 170,540 | $ 148,345 |
The Company and Significant Acc
The Company and Significant Accounting Policies and Estimates | 6 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Significant Accounting Policies and Estimates | The Company and Significant Accounting Policies and Estimates Model N, Inc. (“Model N,” “we,” “us,” “our,” and “the Company”) was incorporated in Delaware on December 14, 1999. The Company is a provider of cloud revenue management solutions for the life sciences and high tech industries. The Company’s software and business services enable its customers to maximize revenues and reduce revenue compliance risk by transforming their revenue life cycle from a series of tactical, disjointed operations into a strategic end-to-end process, which enables them to manage the strategy and execution of pricing, contracting, incentives and rebates. The Company’s corporate headquarters are located in San Mateo, California, with additional offices in the United States, India and Switzerland. Fiscal Year The Company’s fiscal year ends on September 30. References to fiscal year 2022, for example, refer to the fiscal year ending September 30, 2022. Basis for Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated balance sheet as of March 31, 2022 has been derived from the audited financial statements which are included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 (“the Annual Report”) on file with the SEC. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Annual Report. In the opinion of management, the unaudited interim consolidated financial statements include all the normal recurring adjustments necessary to present fairly our condensed consolidated financial statements. The results of operations for the six months ended March 31, 2022 are not necessarily indicative of the operating results for the full fiscal year 2022 or any future periods. The condensed consolidated financial statements include the accounts of Model N and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates include revenue recognition, liability and equity allocation of convertible senior notes, legal contingencies, income taxes, stock-based compensation and valuation of goodwill and intangibles. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors. However, actual results could differ significantly from these estimates. COVID-19 The Company is subject to risks and uncertainties as a result of the ongoing COVID-19 pandemic. At this point, the extent to which the COVID-19 pandemic may impact the Company’s financial condition or results of operations is uncertain. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities. The estimates discussed above may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. New Accounting Pronouncements Recently Adopted Accounting Guidance In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which simplifies the accounting for incomes taxes by removing certain exceptions to the general principles in Topic 740 and amending existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this guidance in the first quarter of fiscal year 2022 and it did not have a material impact on the condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles (Topic 350), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which 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. This standard also requires customers to amortize the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. ASU 2018-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance prospectively in the first quarter of fiscal year 2021 and it did not have a material impact on the condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. ASU 2016-13 requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. The Company adopted this guidance in the first quarter of fiscal year 2021 and it did not have a material impact on the condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. ASU 2020-06 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements. In October 2021, the FASB issued Accounting Standards Update No. 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured in accordance with ASC 606, Revenue from Contracts with Customers. ASU 2021-08 is effective for interim and annual periods beginning after December 15, 2022 on a prospective basis, with early adoption permitted. The Company is currently evaluating the potential impact of ASU 2021-08 to its consolidated financial statements. Significant Accounting Policies There have been no changes in the significant accounting policies from those that were disclosed in the audited consolidated financial statements for the fiscal year ended September 30, 2021 included in the Annual Report on Form 10-K. |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 6 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues from Contracts with Customers | Revenues from Contracts with Customers Revenue Recognition The Company derives revenues primarily from subscription revenues and professional services revenues. Disaggregation of Revenues See Note 14, Geographic Information, for information on revenue by geography. Customer Contract Balances The following table reflects contract balances related to contracts with customers (in thousands): As of March 31, 2022 As of September 30, 2021 Accounts receivable, net $ 47,907 $ 43,185 Contract asset 1,803 4,891 Deferred revenue 57,533 57,796 Capitalized contract acquisition costs 11,192 9,539 Accounts Receivable Accounts receivable represents the Company’s right to consideration that is unconditional, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of accounts receivable amounts. Contract Asset Contract asset represents revenue that has been recognized for satisfied performance obligations for which the Company does not have an unconditional right to consideration. Deferred Revenue Deferred revenue, which is a contract liability, consists of amounts that have been invoiced and for which the Company has the right to bill, but that have not been recognized as revenue because the related goods or services have not been transferred. The non-current portion of deferred revenue is included in other long-term liabilities in the condensed consolidated balance sheets. During the three and six months ended March 31, 2022, the Company recognized revenue of $26.9 million and $40.9 million, respectively, that was included in the deferred revenue balances at the beginning of the periods. During the three and six months ended March 31, 2021, the Company recognized revenue of $23.0 million and $35.9 million, respectively, that was included in the deferred revenue balances at the beginning of the periods. Capitalized Contract Acquisition Costs The Company capitalizes incremental costs incurred to acquire contracts with customers, primarily sales commissions, for which the associated revenue is expected to be recognized in future periods. The Company incurs these costs in connection with both initial contracts and renewals. Such costs for renewals are not considered commensurate with those for initial contracts given the substantive difference in commission rates in proportion to their respective contract values. The costs in connection with initial contracts and renewals are deferred and amortized over an expected customer life of five years and over the renewal term, respectively, which corresponds to the period of benefit to the customer. The Company determined the period of benefit by considering the Company’s history of customer relationships, length of customer contracts, technological development and obsolescence, and other factors. The current and non-current portion of capitalized contract acquisition costs are included in other current assets and other assets on the condensed consolidated balance sheets. Amortization expense is included in sales and marketing expenses on the condensed consolidated statements of operations. As of March 31, 2022, the current and non-current portions of capitalized contract acquisition costs were $3.8 million and $7.4 million, respectively. As of September 30, 2021, the current and non-current portions of capitalized contract acquisition costs were $3.3 million and $6.3 million, respectively. The Company amortized $1.0 million and $2.0 million of contract acquisition costs during the three and six months ended March 31, 2022, respectively. The Company amortized $0.7 million and $1.4 million of contract acquisition costs during the three and six months ended March 31, 2021, respectively. For the three and six months ended March 31, 2022 and 2021, there was no impairment related to capitalized contract acquisition costs. Customer Deposits Customer deposits primarily relate to payments received from customers which could be refundable pursuant to the terms of the related arrangement. These amounts are included in accrued liabilities on the condensed consolidated balance sheets. Customer deposits were immaterial as of March 31, 2022 and September 30, 2021. Standard payment terms to customers generally range from thirty to ninety days; however, payment terms and conditions in our customer contracts may vary. In some cases, customers prepay for subscription and services in advance of the delivery; in other cases, payment is due as services are performed or in arrears following the delivery. Remaining Performance Obligations Remaining performance obligations represent non-cancelable contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. As of March 31, 2022, the aggregate amount of the transaction price allocated to performance obligations either unsatisfied or partially unsatisfied was $284.6 million, 43% of which we expect to recognize as revenue over the next 12 months and the remainder thereafter. |
Leases
Leases | 6 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company leases facilities under noncancellable operating leases with lease terms between three years and eleven years. Certain leases include options to extend or terminate the lease. The Company factored into the determination of lease payments the options that it is reasonably certain to exercise. Operating lease costs were $1.4 million and $2.9 million for the three and six months ended March 31, 2022, respectively, and $1.0 million and $1.8 million for the three and six months ended March 31, 2021, respectively. Short-term lease costs, variable lease costs, and sublease income were immaterial for the three and six months ended March 31, 2022 and 2021. Cash flow information related to operating leases is as follows (in thousands): Six Months Ended March 31, 2022 Six Months Ended March 31, 2021 Cash paid for amounts included in the measurement of operating lease liabilities $ 2,540 $ 1,191 Operating lease ROU assets obtained in exchange for new operating lease liabilities — 12,592 The weighted-average remaining lease term is 4.0 years and the weighted-average discount rate is 2.9% as of March 31, 2022. Maturities of operating lease liabilities as of March 31, 2022 are as follows (in thousands): Fiscal Year Remaining fiscal 2022 $ 2,407 2023 5,186 2024 5,037 2025 4,679 2026 2,669 2027 and thereafter 575 Total operating lease payments 20,553 Less imputed interest 1,168 Total operating lease liabilities $ 19,385 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash and cash equivalents, funds held for customers, accounts receivable, accounts payable, customer funds payable, debt and certain accrued liabilities. The Company regularly reviews its financial instruments portfolio to identify and evaluate such instruments that have indications of possible impairment. The Company estimates the fair value of its financial instruments when there is no readily available market data, which involves some level of management estimation and judgment and may not necessarily represent the amounts that could be realized in a current or future sale of these assets. The table below sets forth the Company’s marketable securities which are measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): Reported as: Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents As of March 31, 2022 Level 1: Money market funds $ 64,320 $ — $ — $ 64,320 $ 64,320 US Treasury securities 59,989 2 — 59,991 59,991 Total $ 124,309 $ 2 $ — $ 124,311 $ 124,311 As of September 30, 2021 Level 1: Money market funds $ 40,755 $ — $ — $ 40,755 $ 40,755 US Treasury securities 84,997 — — 84,997 84,997 Total $ 125,752 $ — $ — $ 125,752 $ 125,752 The Company’s financial instruments not measured at fair value on a recurring basis include cash, funds held for customers, accounts receivable, accounts payable, customer funds payable, and certain accrued liabilities. These financial instruments are reflected in the financial statements at cost and approximate their fair value due to their short-term nature. See Note 7 for the fair value measurement of the Company’s derivative contracts and Note 8 for the fair value measurement of the Company’s convertible senior notes. |
Acquisition, Goodwill, and Inta
Acquisition, Goodwill, and Intangible Assets | 6 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Acquisition, Goodwill, and Intangible Assets | Acquisition, Goodwill, and Intangible Assets Acquisition On December 31, 2020, the Company acquired certain assets, properties and rights and certain liabilities and obligations from Deloitte & Touche LLP’s pricing and contracting solutions business for a contractual purchase price of $60.0 million subject to net working capital adjustments (the “Acquisition”). The acquired business operates primarily in the same markets as the Company’s existing operations. The reason for the Acquisition was to increase the Company’s addressable market and expand the opportunity to sell existing Model N products. This Acquisition has been accounted for as a business combination. The Company has included these results in its Consolidated Financial Statements since the date of Acquisition. The Company incurred $2.5 million of acquisition-related expense during the year ended September 30, 2021, which was recorded as general and administrative expenses. The total purchase consideration was $57.8 million and reflected a $2.2 million net working capital adjustment from the contractual purchase price. The original estimate was $0.1 million in the first quarter of fiscal year 2021 which resulted in a measurement period adjustment of $2.1 million. The Company paid the entire purchase consideration in cash during the year ended September 30, 2021. The purchase price was allocated to assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition. The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill. The following table sets forth the allocation of the purchase price in connection with the Acquisition (in thousands): Acquisition Date Fair Value Accounts receivable $ 3,844 Property and equipment, net 511 Operating lease right-of-use assets 2,764 Goodwill 26,382 Intangible assets 28,210 Total assets acquired 61,711 Operating lease liabilities, current portion 656 Deferred revenue, current portion 1,549 Operating lease liabilities, less current portion 1,657 Total liabilities assumed 3,862 Total purchase price $ 57,849 Intangible assets included customer relationships of $15.5 million, developed technology of $10.2 million, non-compete agreements of $1.6 million, and trade name of $0.9 million, which are amortized on a straight-line basis over 15 years, 6 years, 5 years, and 3 years, respectively, and over a weighted average period of 10.8 years. Fair value of the customer relationships was estimated using a multi-period excess earnings valuation method and fair value of the developed technology was estimated using a relief from royalty valuation method. The Company applied significant judgment in estimating the fair value of the customer relationships and developed technology intangible assets, which involved the use of significant assumptions. Significant assumptions used in the valuation of customer relationships intangible asset included subscription revenue growth rates, research and development expenses as percentage of revenue, discount rate, subscription gross margins, and customer attrition rate. Significant assumptions used in the valuation of developed technology intangible asset included royalty rate, obsolescence rate, and discount rate. Goodwill is comprised of expected synergies for the combined operations and the assembled workforce acquired in the Acquisition. This goodwill is deductible for income tax purposes. The Company has not presented the supplemental pro forma information for revenue and earnings related to the Acquisition, as it is deemed impracticable to determine and disclose this information, due to the unavailability of the information provided to the Company by Deloitte & Touche LLP, management’s inability to reasonably estimate the amounts from the carve out business and differing fiscal year-ends. Goodwill The following table summarizes the changes in the carrying amount of goodwill (in thousands): Balance at September 30, 2021 $ 65,665 Additions — Balance at March 31, 2022 $ 65,665 Intangible Assets Intangible assets consisted of the following (in thousands): Estimated As of March 31, 2022 Useful Life Gross Carrying Accumulated Net Carrying Intangible Assets: Customer relationships 3-15 $ 52,109 $ (21,388) $ 30,721 Developed technology 5-6 22,333 (13,372) 8,961 Non-compete agreements 5 1,600 (400) 1,200 Trade name 3 850 (354) 496 Total $ 76,892 $ (35,514) $ 41,378 Estimated As of September 30, 2021 Useful Life Gross Carrying Accumulated Net Carrying Intangible Assets: Customer relationships 3-15 $ 52,109 $ (19,092) $ 33,017 Developed technology 5-6 22,333 (11,954) 10,379 Non-compete agreements 5 1,600 (240) 1,360 Trade name 3 850 (212) 638 Total $ 76,892 $ (31,498) $ 45,394 The Company recorded amortization expense related to acquired intangible assets of $2.0 million and $4.0 million for the three and six months ended March 31, 2022, respectively, and $2.0 million and $3.2 million for the three and six months ended March 31, 2021, respectively. Estimated future amortization expense for the intangible assets as of March 31, 2022 is as follows (in thousands): Fiscal Year Remaining fiscal 2022 $ 4,016 2023 7,186 2024 6,691 2025 6,620 2026 6,069 2027 and thereafter 10,796 Total future amortization $ 41,378 |
Cash, Cash Equivalents, and Fun
Cash, Cash Equivalents, and Funds Held for Customers | 6 Months Ended |
Mar. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, and Funds Held for Customers | Cash, Cash Equivalents, and Funds Held for Customers As part of the acquisition of Deloitte & Touche LLP’s pricing and contracting solutions business, the Company now provides payment processing services to some customers whereby the Company has contractual obligations to remit funds to various third parties on behalf of these customers. Funds received from these customers represent cash and cash equivalents and are reflected in the “Funds held for customers” line item on the condensed consolidated balance sheets. The table below reconciles the cash and cash equivalents and funds held for customers as reported on the condensed consolidated balance sheets to the cash and cash equivalents on the condensed consolidated statements of cash flows (in thousands): As of March 31, 2022 As of September 30, 2021 Cash and cash equivalents $ 170,457 $ 165,467 Funds held for customers 83 316 Total cash and cash equivalents $ 170,540 $ 165,783 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging | 6 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging | Derivative Instruments and Hedging The Company uses foreign currency forward contracts to hedge a portion of the forecasted foreign currency-denominated expenses incurred in the normal course of business. These contracts are designated as cash flows hedges. These hedging contracts reduce, but do not entirely eliminate, the impact of adverse foreign exchange rate movements. The Company does not use any of the derivative instruments for trading or speculative purposes. These contracts have maturities of 12 months or less. The Company records changes in the fair value of cash flow hedges in accumulated other comprehensive loss in the condensed consolidated balance sheets, until the forecasted transaction occurs, at which point, the related gain or loss on the cash flow hedge is reclassified to the financial statement line item to which the derivative relates.The amounts reclassified to expenses related to the hedged transactions were immaterial for the periods presented. The fair value of the outstanding non-deliverable foreign currency forward contracts was measured using Level 2 fair value inputs and was immaterial as of March 31, 2022 and September 30, 2021. Notional Amounts of Derivative Contracts |
Convertible Senior Notes
Convertible Senior Notes | 6 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes In May 2020, the Company issued $172.5 million aggregate principal amount of 2.625% convertible senior notes in a private placement, including $22.5 million which represents the exercise in full of the initial purchasers’ option to purchase additional notes. The net proceeds from the issuance of the Notes was $166.4 million, net of initial purchasers’ discounts and debt issuance costs of $6.1 million. The Company used $40.0 million of the net proceeds to repay in full the debt outstanding under, and terminated the Credit Agreement dated May 4, 2018, as amended, by and among the Company, Wells Fargo, as administrative agent, and the lenders party thereto. The Notes are senior, unsecured obligations of the Company and bear an interest rate of 2.625% per year payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2020. The Notes mature on June 1, 2025 unless repurchased, redeemed or converted in accordance with their terms prior to such date. The Notes are convertible into cash, shares of the Company’s common stock or a combination thereof, at the Company’s election, at an initial conversion rate of 30.0044 shares of common stock per $1,000 principal amount of the Notes, which is equal to an initial conversion price of approximately $33.33 per share of common stock subject to adjustment, with a maximum conversion rate of 38.2555. The Company intends to settle the principal amount of the Notes with cash. Prior to the close of business on the scheduled trading day immediately preceding March 1, 2025, holders of the Notes may convert all or a portion of their Notes in multiples of $1,000 principal amount, only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five five • if the Company calls any or all of the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or • upon the occurrence of specified corporate events. On or after March 1, 2025 and prior to the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Notes may convert all or a portion of their Notes in multiples of $1,000 principal amount regardless of the foregoing conditions. Holders of the Notes who convert their Notes in connection with a make-whole fundamental change (as defined in the Indenture) or in connection with any optional redemption are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a fundamental change (as defined in the Indenture), holders of the Notes may require the Company to repurchase all or a portion of their Notes at a price equal to 100% of the principal amount of Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date. The Company may not redeem the Notes prior to June 6, 2023. The Company may redeem for cash all or part of the Notes, at its option, on or after June 6, 2023 and on or before the 41st scheduled trading day immediately before the maturity date, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. No sinking fund is provided for the Notes. During the three months ended March 31, 2022, the conditions allowing holders of the Notes to convert were not met. The Notes were classified as long-term debt on the condensed consolidated balance sheets as of March 31, 2022. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component of $115.3 million was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $57.2 million and was determined by deducting the fair value of the liability component from the principal amount of the Notes. The excess of the principal amount of the Notes over the carrying amount of the liability component is amortized to interest expense at an effective interest rate over the contractual terms of the Notes. The equity component was recorded in additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the issuance costs related to the Notes, the Company allocated the total amount incurred to the liability and equity components of the Notes based on the proportion of the proceeds allocated to the debt and equity components. Issuance costs attributable to the liability component were $4.1 million and are amortized to interest expense using the effective interest method over the contractual terms of the Notes. Issuance costs attributable to the equity component of $2.0 million were netted with the equity component in stockholders’ equity. The net carrying amounts of the liability and equity components for the Notes were as follows (in thousands): As of March 31, 2022 As of September 30, 2021 Liability component: Principal amount $ 172,500 $ 172,500 Unamortized discount (39,725) (44,803) Unamortized issuance costs (3,082) (3,396) Net carrying amount $ 129,693 $ 124,301 Equity component, net of issuance costs $ 55,227 $ 55,227 The following table sets forth the interest expense recognized related to the Notes (in thousands): Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Coupon interest expense $ 1,132 $ 1,132 $ 2,264 $ 2,264 Amortization of debt discount 2,575 2,302 5,079 4,541 Amortization of debt issuance costs 161 125 312 243 Total interest expense related to the Notes $ 3,868 $ 3,559 $ 7,655 $ 7,048 Effective interest rate of the liability component 12.32 % 12.32 % 12.32 % 12.32 % The unamortized debt discount and debt issuance costs will be amortized over 38 months as of March 31, 2022. As of March 31, 2022, the total estimated fair value of the Notes was approximately $195.3 million which includes the equity component. The fair value was determined based on the closing trading price per $100 of the Notes as of the last day of trading for the period. The fair value of the Notes is primarily affected by the trading price of the Company’s common stock and market interest rates. The fair value of the Notes is considered a Level 2 measurement as they are not actively traded. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity The following tables present the changes in the components of stockholders’ equity (in thousands): Three Months Ended March 31, 2022 Common Stock Additional Accumulated Accumulated Deficit Total Shares Amount Balance at December 31, 2021 36,433 $ 5 $ 393,278 $ (1,218) $ (262,076) $ 129,989 Issuance of common stock upon exercise of stock options — — 8 — — 8 Issuance of common stock upon release of restricted stock units 275 1 — — — 1 Issuance of common stock upon ESPP purchase 108 — 2,321 — — 2,321 Stock-based compensation — — 7,932 — — 7,932 Other comprehensive loss — — — (284) — (284) Net loss — — — — (8,039) (8,039) Balance at March 31, 2022 36,816 $ 6 $ 403,539 $ (1,502) $ (270,115) $ 131,928 Three Months Ended March 31, 2021 Common Stock Additional Accumulated Accumulated Deficit Total Shares Amount Balance at December 31, 2020 $ 35,049 $ 5 $ 357,106 $ (1,031) $ (231,226) $ 124,854 Issuance of common stock upon exercise of stock options — — 5 — — 5 Issuance of common stock upon release of restricted stock units 452 — — — — — Issuance of common stock upon ESPP purchase 66 — 2,251 — — 2,251 Stock-based compensation — — 6,514 — — 6,514 Other comprehensive loss — — — (97) — (97) Net loss — — — — (10,686) (10,686) Balance at March 31, 2021 35,567 $ 5 $ 365,876 $ (1,128) $ (241,912) $ 122,841 Six Months Ended March 31, 2022 Common Stock Additional Accumulated Accumulated Deficit Total Shares Amount Balance at September 30, 2021 36,059 $ 5 $ 380,528 $ (1,205) $ (255,810) $ 123,518 Issuance of common stock upon exercise of stock options 8 — 80 — — 80 Issuance of common stock upon release of restricted stock units 641 1 — — — 1 Issuance of common stock upon ESPP purchase 108 — 2,321 — — 2,321 Stock-based compensation — — 20,610 — — 20,610 Other comprehensive income — — — (297) — (297) Net loss — — — — (14,305) (14,305) Balance at March 31, 2022 36,816 $ 6 $ 403,539 $ (1,502) $ (270,115) $ 131,928 For the three months ended December 31, 2021, additional paid-in capital included $5.4 million related to restricted stock unit (“RSU”) grants for the portion of the bonus recorded as stock-based compensation for the year ended September 30, 2021. Six Months Ended March 31, 2021 Common Stock Additional Accumulated Accumulated Deficit Total Shares Amount Balance at September 30, 2020 34,821 $ 5 $ 351,952 $ (1,213) $ (226,073) $ 124,671 Issuance of common stock upon exercise of stock options 4 — 31 — — 31 Issuance of common stock upon release of restricted stock units 676 — — — — — Issuance of common stock upon ESPP purchase 66 — 2,251 — — 2,251 Stock-based compensation — — 11,642 — — 11,642 Other comprehensive loss — — — 85 — 85 Net loss — — — — (15,839) (15,839) Balance at March 31, 2021 35,567 $ 5 $ 365,876 $ (1,128) $ (241,912) $ 122,841 |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation As of March 31, 2022, the Company had approximately 2.4 million shares available for future stock awards under its equity plans and any additional releases resulting from an over-achievement relating to performance-based restricted stock units. The following table summarizes our RSU activity which includes performance-based RSUs under all equity plans for the six months ended March 31, 2022: Restricted Weighted Balance at September 30, 2021 1,748 $ 30.54 Granted 1,358 33.91 Released (641) 28.71 Forfeited (195) 30.54 Balance at March 31, 2022 2,270 $ 33.07 Stock-based compensation recorded in the condensed consolidated statements of operations is as follows (in thousands): Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Cost of revenues Subscription $ 1,065 $ 846 $ 1,923 $ 1,369 Professional services 871 1,002 1,492 1,656 Total stock-based compensation in cost of revenues 1,936 1,848 3,415 3,025 Operating expenses Research and development 1,509 1,613 2,790 2,744 Sales and marketing 1,826 1,967 3,446 3,520 General and administrative 3,051 2,354 5,657 3,621 Total stock-based compensation in operating expenses 6,386 5,934 11,893 9,885 Total stock-based compensation $ 8,322 $ 7,782 $ 15,308 $ 12,910 |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded income tax provisions of $0.4 million and $0.7 million, representing effective income tax rates of (4.7)% and (5.4)% for the three and six months ended March 31, 2022, respectively, and $0.2 million and $0.5 million, representing effective income tax rates of (2.4)% and (3.2)% for the three and six months ended March 31, 2021, respectively. The income tax provision for the three and six months ended March 31, 2022 was primarily related to foreign taxes on the Company’s profitable foreign operations, foreign withholding taxes on dividends, and deferred taxes on goodwill resulting from the Acquisition. The income tax provision for the three and six months ended March 31, 2021 was primarily related to foreign taxes on the Company’s profitable foreign operations, foreign withholding taxes on dividends, and deferred taxes on goodwill resulting from the Acquisition. The Company elected to partially reinvest foreign earnings in certain foreign jurisdictions and expects to repatriate future foreign earnings in certain foreign jurisdictions over time. As a result, the Company will record a deferred tax liability for the additional non-U.S. taxes that are expected to be incurred related to the repatriation of these earnings. The Company elected to record GILTI as a period cost. The Company realized no benefit for current period losses due to maintaining a full valuation allowance against the U.S. net deferred tax assets. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders during the periods presented (in thousands, except per share data): Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Numerator Basic and diluted Net loss attributable to common stockholders $ (8,039) $ (10,686) $ (14,305) $ (15,839) Denominator Basic and diluted Weighted average shares used in computing net loss per share attributable to common stockholders 36,619 35,305 36,419 35,119 Net loss per share attributable to common stockholders: Basic and diluted $ (0.22) $ (0.30) $ (0.39) $ (0.45) Potentially dilutive securities that were not included in the calculation of diluted net loss per share because their effect would have been anti-dilutive are as follows (in thousands): As of March 31, 2022 2021 Stock options 17 30 Performance-based RSUs and RSUs 2,270 2,209 Shares issuable pursuant to the employee stock purchase plan 86 63 Convertible senior notes — 5,176 Since the Company expects to settle the principal amount of its Notes in cash and any excess in cash or shares of the Company’s common stock, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share of common stock when the average market price of the Company’s common stock for a given period exceeds the conversion price of $33.33 per share for the Notes. |
Litigation and Contingencies
Litigation and Contingencies | 6 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation and Contingencies | Litigation and Contingencies Legal Proceedings The Company is not currently a party to any pending material legal proceedings. From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. Regardless of outcome, litigation can have an adverse impact on the Company due to defense and settlement costs, diversion of management resources, negative publicity and reputational harm and other factors. |
Geographic Information
Geographic Information | 6 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Geographic Information | Geographic Information The Company has one operating segment with one business activity — developing and monetizing revenue management solutions. Revenues The Company disaggregates the revenues by geographic regions based on the bill to location of its customers. Revenues from customers outside of the United States were 5% and 6% of total revenues for the three and six months ended March 31, 2022, respectively, and 7% and 8% of total revenues for the three and six months ended March 31, 2021, respectively. Long-Lived Assets The following table sets forth the Company’s property and equipment, net, by geographic region (in thousands): As of March 31, 2022 As of September 30, 2021 United States $ 1,131 $ 1,374 India 570 533 Total property and equipment, net $ 1,701 $ 1,907 |
The Company and Significant A_2
The Company and Significant Accounting Policies and Estimates (Policies) | 6 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis for Presentation | Basis for Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated balance sheet as of March 31, 2022 has been derived from the audited financial statements which are included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 (“the Annual Report”) on file with the SEC. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Annual Report. In the opinion of management, the unaudited interim consolidated financial statements include all the normal recurring adjustments necessary to present fairly our condensed consolidated financial statements. The results of operations for the six months ended March 31, 2022 are not necessarily indicative of the operating results for the full fiscal year 2022 or any future periods. The condensed consolidated financial statements include the accounts of Model N and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates include revenue recognition, liability and equity allocation of convertible senior notes, legal contingencies, income taxes, stock-based compensation and valuation of goodwill and intangibles. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors. However, actual results could differ significantly from these estimates. |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Guidance In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which simplifies the accounting for incomes taxes by removing certain exceptions to the general principles in Topic 740 and amending existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company adopted this guidance in the first quarter of fiscal year 2022 and it did not have a material impact on the condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles (Topic 350), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which 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. This standard also requires customers to amortize the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. ASU 2018-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance prospectively in the first quarter of fiscal year 2021 and it did not have a material impact on the condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. ASU 2016-13 requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. The Company adopted this guidance in the first quarter of fiscal year 2021 and it did not have a material impact on the condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. ASU 2020-06 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements. In October 2021, the FASB issued Accounting Standards Update No. 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured in accordance with ASC 606, Revenue from Contracts with Customers. ASU 2021-08 is effective for interim and annual periods beginning after December 15, 2022 on a prospective basis, with early adoption permitted. The Company is currently evaluating the potential impact of ASU 2021-08 to its consolidated financial statements. Significant Accounting Policies There have been no changes in the significant accounting policies from those that were disclosed in the audited consolidated financial statements for the fiscal year ended September 30, 2021 included in the Annual Report on Form 10-K. |
Revenues from Contract with Customer | Accounts Receivable Accounts receivable represents the Company’s right to consideration that is unconditional, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of accounts receivable amounts. Contract Asset Contract asset represents revenue that has been recognized for satisfied performance obligations for which the Company does not have an unconditional right to consideration. Deferred Revenue Deferred revenue, which is a contract liability, consists of amounts that have been invoiced and for which the Company has the right to bill, but that have not been recognized as revenue because the related goods or services have not been transferred. Capitalized Contract Acquisition Costs The Company capitalizes incremental costs incurred to acquire contracts with customers, primarily sales commissions, for which the associated revenue is expected to be recognized in future periods. The Company incurs these costs in connection with both initial contracts and renewals. Such costs for renewals are not considered commensurate with those for initial contracts given the substantive difference in commission rates in proportion to their respective contract values. The costs in connection with initial contracts and renewals are deferred and amortized over an expected customer life of five years and over the renewal term, respectively, which corresponds to the period of benefit to the customer. The Company determined the period of benefit by considering the Company’s history of customer relationships, length of customer contracts, technological development and obsolescence, and other factors. The current and non-current portion of capitalized contract acquisition costs are included in other current assets and other assets on the condensed consolidated balance sheets. Amortization expense is included in sales and marketing expenses on the condensed consolidated statements of operations. Customer Deposits Customer deposits primarily relate to payments received from customers which could be refundable pursuant to the terms of the related arrangement. These amounts are included in accrued liabilities on the condensed consolidated balance sheets. Customer deposits were immaterial as of March 31, 2022 and September 30, 2021. Standard payment terms to customers generally range from thirty to ninety days; however, payment terms and conditions in our customer contracts may vary. In some cases, customers prepay for subscription and services in advance of the delivery; in other cases, payment is due as services are performed or in arrears following the delivery. Remaining Performance Obligations |
Revenues from Contracts with _2
Revenues from Contracts with Customers (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of customer contract balances | The following table reflects contract balances related to contracts with customers (in thousands): As of March 31, 2022 As of September 30, 2021 Accounts receivable, net $ 47,907 $ 43,185 Contract asset 1,803 4,891 Deferred revenue 57,533 57,796 Capitalized contract acquisition costs 11,192 9,539 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of operating lease cost and cash flow information | Cash flow information related to operating leases is as follows (in thousands): Six Months Ended March 31, 2022 Six Months Ended March 31, 2021 Cash paid for amounts included in the measurement of operating lease liabilities $ 2,540 $ 1,191 Operating lease ROU assets obtained in exchange for new operating lease liabilities — 12,592 |
Schedule of maturities of operating lease liabilities | Maturities of operating lease liabilities as of March 31, 2022 are as follows (in thousands): Fiscal Year Remaining fiscal 2022 $ 2,407 2023 5,186 2024 5,037 2025 4,679 2026 2,669 2027 and thereafter 575 Total operating lease payments 20,553 Less imputed interest 1,168 Total operating lease liabilities $ 19,385 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measured on recurring basis | The table below sets forth the Company’s marketable securities which are measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): Reported as: Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents As of March 31, 2022 Level 1: Money market funds $ 64,320 $ — $ — $ 64,320 $ 64,320 US Treasury securities 59,989 2 — 59,991 59,991 Total $ 124,309 $ 2 $ — $ 124,311 $ 124,311 As of September 30, 2021 Level 1: Money market funds $ 40,755 $ — $ — $ 40,755 $ 40,755 US Treasury securities 84,997 — — 84,997 84,997 Total $ 125,752 $ — $ — $ 125,752 $ 125,752 |
Acquisition, Goodwill, and In_2
Acquisition, Goodwill, and Intangible Assets (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of allocation of purchase price | The following table sets forth the allocation of the purchase price in connection with the Acquisition (in thousands): Acquisition Date Fair Value Accounts receivable $ 3,844 Property and equipment, net 511 Operating lease right-of-use assets 2,764 Goodwill 26,382 Intangible assets 28,210 Total assets acquired 61,711 Operating lease liabilities, current portion 656 Deferred revenue, current portion 1,549 Operating lease liabilities, less current portion 1,657 Total liabilities assumed 3,862 Total purchase price $ 57,849 |
Schedule of goodwill | The following table summarizes the changes in the carrying amount of goodwill (in thousands): Balance at September 30, 2021 $ 65,665 Additions — Balance at March 31, 2022 $ 65,665 |
Schedule of intangible assets | Intangible assets consisted of the following (in thousands): Estimated As of March 31, 2022 Useful Life Gross Carrying Accumulated Net Carrying Intangible Assets: Customer relationships 3-15 $ 52,109 $ (21,388) $ 30,721 Developed technology 5-6 22,333 (13,372) 8,961 Non-compete agreements 5 1,600 (400) 1,200 Trade name 3 850 (354) 496 Total $ 76,892 $ (35,514) $ 41,378 Estimated As of September 30, 2021 Useful Life Gross Carrying Accumulated Net Carrying Intangible Assets: Customer relationships 3-15 $ 52,109 $ (19,092) $ 33,017 Developed technology 5-6 22,333 (11,954) 10,379 Non-compete agreements 5 1,600 (240) 1,360 Trade name 3 850 (212) 638 Total $ 76,892 $ (31,498) $ 45,394 |
Schedule of estimated future amortization expenses | Estimated future amortization expense for the intangible assets as of March 31, 2022 is as follows (in thousands): Fiscal Year Remaining fiscal 2022 $ 4,016 2023 7,186 2024 6,691 2025 6,620 2026 6,069 2027 and thereafter 10,796 Total future amortization $ 41,378 |
Cash, Cash Equivalents, and F_2
Cash, Cash Equivalents, and Funds Held for Customers (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of restrictions on cash and cash equivalents | The table below reconciles the cash and cash equivalents and funds held for customers as reported on the condensed consolidated balance sheets to the cash and cash equivalents on the condensed consolidated statements of cash flows (in thousands): As of March 31, 2022 As of September 30, 2021 Cash and cash equivalents $ 170,457 $ 165,467 Funds held for customers 83 316 Total cash and cash equivalents $ 170,540 $ 165,783 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The net carrying amounts of the liability and equity components for the Notes were as follows (in thousands): As of March 31, 2022 As of September 30, 2021 Liability component: Principal amount $ 172,500 $ 172,500 Unamortized discount (39,725) (44,803) Unamortized issuance costs (3,082) (3,396) Net carrying amount $ 129,693 $ 124,301 Equity component, net of issuance costs $ 55,227 $ 55,227 The following table sets forth the interest expense recognized related to the Notes (in thousands): Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Coupon interest expense $ 1,132 $ 1,132 $ 2,264 $ 2,264 Amortization of debt discount 2,575 2,302 5,079 4,541 Amortization of debt issuance costs 161 125 312 243 Total interest expense related to the Notes $ 3,868 $ 3,559 $ 7,655 $ 7,048 Effective interest rate of the liability component 12.32 % 12.32 % 12.32 % 12.32 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of stockholder's equity | The following tables present the changes in the components of stockholders’ equity (in thousands): Three Months Ended March 31, 2022 Common Stock Additional Accumulated Accumulated Deficit Total Shares Amount Balance at December 31, 2021 36,433 $ 5 $ 393,278 $ (1,218) $ (262,076) $ 129,989 Issuance of common stock upon exercise of stock options — — 8 — — 8 Issuance of common stock upon release of restricted stock units 275 1 — — — 1 Issuance of common stock upon ESPP purchase 108 — 2,321 — — 2,321 Stock-based compensation — — 7,932 — — 7,932 Other comprehensive loss — — — (284) — (284) Net loss — — — — (8,039) (8,039) Balance at March 31, 2022 36,816 $ 6 $ 403,539 $ (1,502) $ (270,115) $ 131,928 Three Months Ended March 31, 2021 Common Stock Additional Accumulated Accumulated Deficit Total Shares Amount Balance at December 31, 2020 $ 35,049 $ 5 $ 357,106 $ (1,031) $ (231,226) $ 124,854 Issuance of common stock upon exercise of stock options — — 5 — — 5 Issuance of common stock upon release of restricted stock units 452 — — — — — Issuance of common stock upon ESPP purchase 66 — 2,251 — — 2,251 Stock-based compensation — — 6,514 — — 6,514 Other comprehensive loss — — — (97) — (97) Net loss — — — — (10,686) (10,686) Balance at March 31, 2021 35,567 $ 5 $ 365,876 $ (1,128) $ (241,912) $ 122,841 Six Months Ended March 31, 2022 Common Stock Additional Accumulated Accumulated Deficit Total Shares Amount Balance at September 30, 2021 36,059 $ 5 $ 380,528 $ (1,205) $ (255,810) $ 123,518 Issuance of common stock upon exercise of stock options 8 — 80 — — 80 Issuance of common stock upon release of restricted stock units 641 1 — — — 1 Issuance of common stock upon ESPP purchase 108 — 2,321 — — 2,321 Stock-based compensation — — 20,610 — — 20,610 Other comprehensive income — — — (297) — (297) Net loss — — — — (14,305) (14,305) Balance at March 31, 2022 36,816 $ 6 $ 403,539 $ (1,502) $ (270,115) $ 131,928 Six Months Ended March 31, 2021 Common Stock Additional Accumulated Accumulated Deficit Total Shares Amount Balance at September 30, 2020 34,821 $ 5 $ 351,952 $ (1,213) $ (226,073) $ 124,671 Issuance of common stock upon exercise of stock options 4 — 31 — — 31 Issuance of common stock upon release of restricted stock units 676 — — — — — Issuance of common stock upon ESPP purchase 66 — 2,251 — — 2,251 Stock-based compensation — — 11,642 — — 11,642 Other comprehensive loss — — — 85 — 85 Net loss — — — — (15,839) (15,839) Balance at March 31, 2021 35,567 $ 5 $ 365,876 $ (1,128) $ (241,912) $ 122,841 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of restricted stock unit activity (including performance based restricted stock units) under all equity award plans | The following table summarizes our RSU activity which includes performance-based RSUs under all equity plans for the six months ended March 31, 2022: Restricted Weighted Balance at September 30, 2021 1,748 $ 30.54 Granted 1,358 33.91 Released (641) 28.71 Forfeited (195) 30.54 Balance at March 31, 2022 2,270 $ 33.07 |
Schedule of stock-based compensation | Stock-based compensation recorded in the condensed consolidated statements of operations is as follows (in thousands): Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Cost of revenues Subscription $ 1,065 $ 846 $ 1,923 $ 1,369 Professional services 871 1,002 1,492 1,656 Total stock-based compensation in cost of revenues 1,936 1,848 3,415 3,025 Operating expenses Research and development 1,509 1,613 2,790 2,744 Sales and marketing 1,826 1,967 3,446 3,520 General and administrative 3,051 2,354 5,657 3,621 Total stock-based compensation in operating expenses 6,386 5,934 11,893 9,885 Total stock-based compensation $ 8,322 $ 7,782 $ 15,308 $ 12,910 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted net loss per share | The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders during the periods presented (in thousands, except per share data): Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 Numerator Basic and diluted Net loss attributable to common stockholders $ (8,039) $ (10,686) $ (14,305) $ (15,839) Denominator Basic and diluted Weighted average shares used in computing net loss per share attributable to common stockholders 36,619 35,305 36,419 35,119 Net loss per share attributable to common stockholders: Basic and diluted $ (0.22) $ (0.30) $ (0.39) $ (0.45) |
Summary of weighted average shares of common stock equivalents excluded from computation of diluted net loss per share attributable to common stockholders | Potentially dilutive securities that were not included in the calculation of diluted net loss per share because their effect would have been anti-dilutive are as follows (in thousands): As of March 31, 2022 2021 Stock options 17 30 Performance-based RSUs and RSUs 2,270 2,209 Shares issuable pursuant to the employee stock purchase plan 86 63 Convertible senior notes — 5,176 |
Geographic Information (Tables)
Geographic Information (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of company's property and equipment, net by geographic region | The following table sets forth the Company’s property and equipment, net, by geographic region (in thousands): As of March 31, 2022 As of September 30, 2021 United States $ 1,131 $ 1,374 India 570 533 Total property and equipment, net $ 1,701 $ 1,907 |
Revenues from Contracts with _3
Revenues from Contracts with Customers - Customer Contract Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 47,907 | $ 43,185 |
Contract asset | 1,803 | 4,891 |
Deferred revenue | 57,533 | 57,796 |
Capitalized contract acquisition costs | $ 11,192 | $ 9,539 |
Revenues from Contracts with _4
Revenues from Contracts with Customers - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |||||
Revenue recognized that was included in deferred revenue at beginning of period | $ 26,900,000 | $ 23,000,000 | $ 40,900,000 | $ 35,900,000 | |
Amortized over expected customer life (in years) | 5 years | 5 years | |||
Capitalized contract acquisition costs, current portion | $ 3,800,000 | $ 3,800,000 | $ 3,300,000 | ||
Capitalized contract acquisition costs, non-current portion | 7,400,000 | 7,400,000 | $ 6,300,000 | ||
Amortization of capitalized contract acquisition costs | 1,000,000 | 700,000 | 2,027,000 | 1,382,000 | |
Impairment loss related to contract balances | $ 0 | $ 0 | $ 0 | $ 0 |
Revenues from Contracts with _5
Revenues from Contracts with Customers - Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-04-01 $ in Millions | Mar. 31, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Performance obligations not satisfied or partially satisfied | $ 284.6 |
Remaining performance obligation, percentage | 43.00% |
Remaining performance obligation, expected timing of satisfaction (in months) | 12 months |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Lessee, Lease, Description | ||||
Operating lease cost for remaining term | $ 1.4 | $ 1 | $ 2.9 | $ 1.8 |
Weighted average remaining lease term (in years) | 4 years | 4 years | ||
Weighted average discount rate percent | 2.90% | 2.90% | ||
Minimum | ||||
Lessee, Lease, Description | ||||
Noncancelable operating leases term (in years) | 3 years | 3 years | ||
Maximum | ||||
Lessee, Lease, Description | ||||
Noncancelable operating leases term (in years) | 11 years | 11 years |
Leases - Cash Flow Information
Leases - Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 2,540 | $ 1,191 |
Operating lease ROU assets obtained in exchange for new operating lease liabilities | $ 0 | $ 12,592 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Fiscal Year | |
Remaining fiscal 2022 | $ 2,407 |
2023 | 5,186 |
2024 | 5,037 |
2025 | 4,679 |
2026 | 2,669 |
2027 and thereafter | 575 |
Total operating lease payments | 20,553 |
Less imputed interest | 1,168 |
Total operating lease liabilities | $ 19,385 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Fair Value Measured on Recurring Basis (Details) - Level 1 - Fair Value Measurement Recurring - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Amortized Cost | $ 124,309 | $ 125,752 |
Unrealized Gains | 2 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 124,311 | 125,752 |
Cash and Cash Equivalents | 124,311 | 125,752 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Amortized Cost | 64,320 | 40,755 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 64,320 | 40,755 |
Cash and Cash Equivalents | 64,320 | 40,755 |
US Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Amortized Cost | 59,989 | 84,997 |
Unrealized Gains | 2 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 59,991 | 84,997 |
Cash and Cash Equivalents | $ 59,991 | $ 84,997 |
Acquisition, Goodwill, and In_3
Acquisition, Goodwill, and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 |
Business Acquisition | |||||||
Amortization expense of intangible assets | $ 2,000 | $ 2,000 | $ 4,000 | $ 3,200 | |||
Non-compete agreements | |||||||
Business Acquisition | |||||||
Intangible assets, Estimated useful lives | 5 years | 5 years | |||||
Trade name | |||||||
Business Acquisition | |||||||
Intangible assets, Estimated useful lives | 3 years | 3 years | |||||
Acquisition | |||||||
Business Acquisition | |||||||
Base purchase price | $ 60,000 | ||||||
Acquisition related cost | $ 2,500 | ||||||
Total purchase consideration | 57,800 | ||||||
Payments for working capital adjustments | 2,200 | $ 2,100 | |||||
Intangible assets | $ 28,210 | 28,210 | |||||
Intangible assets, Weighted-average estimated useful lives | 10 years 9 months 18 days | ||||||
Acquisition | Scenario, Plan | |||||||
Business Acquisition | |||||||
Payments for working capital adjustments | 100 | ||||||
Acquisition | Customer relationships | |||||||
Business Acquisition | |||||||
Intangible assets | $ 15,500 | 15,500 | |||||
Intangible assets, Estimated useful lives | 15 years | ||||||
Acquisition | Developed technology | |||||||
Business Acquisition | |||||||
Intangible assets | $ 10,200 | 10,200 | |||||
Intangible assets, Estimated useful lives | 6 years | ||||||
Acquisition | Non-compete agreements | |||||||
Business Acquisition | |||||||
Intangible assets | $ 1,600 | 1,600 | |||||
Intangible assets, Estimated useful lives | 5 years | ||||||
Acquisition | Trade name | |||||||
Business Acquisition | |||||||
Intangible assets | $ 900 | $ 900 | |||||
Intangible assets, Estimated useful lives | 3 years |
Acquisition, Goodwill, and In_4
Acquisition, Goodwill, and Intangible Assets - Schedule of allocation of purchase price (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 | Dec. 31, 2020 |
Business Acquisition | |||
Goodwill | $ 65,665 | $ 65,665 | |
Acquisition | |||
Business Acquisition | |||
Accounts receivable | $ 3,844 | ||
Property and equipment, net | 511 | ||
Operating lease right-of-use assets | 2,764 | ||
Goodwill | 26,382 | ||
Intangible assets | 28,210 | ||
Total assets acquired | 61,711 | ||
Operating lease liabilities, current portion | 656 | ||
Deferred revenue, current portion | 1,549 | ||
Operating lease liabilities, less current portion | 1,657 | ||
Total liabilities assumed | 3,862 | ||
Total purchase price | $ 57,849 |
Acquisition, Goodwill, and In_5
Acquisition, Goodwill, and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2022USD ($) | |
Goodwill | |
Beginning balance | $ 65,665 |
Additions | 0 |
Ending balance | $ 65,665 |
Acquisition, Goodwill, and In_6
Acquisition, Goodwill, and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
Acquired Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 76,892 | $ 76,892 |
Accumulated Amortization | (35,514) | (31,498) |
Net Carrying Amount | 41,378 | 45,394 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 52,109 | 52,109 |
Accumulated Amortization | (21,388) | (19,092) |
Net Carrying Amount | $ 30,721 | $ 33,017 |
Customer relationships | Minimum | ||
Acquired Finite-Lived Intangible Assets | ||
Estimated Useful Life (in Years) | 3 years | 3 years |
Customer relationships | Maximum | ||
Acquired Finite-Lived Intangible Assets | ||
Estimated Useful Life (in Years) | 15 years | 15 years |
Developed technology | ||
Acquired Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 22,333 | $ 22,333 |
Accumulated Amortization | (13,372) | (11,954) |
Net Carrying Amount | $ 8,961 | $ 10,379 |
Developed technology | Minimum | ||
Acquired Finite-Lived Intangible Assets | ||
Estimated Useful Life (in Years) | 5 years | 5 years |
Developed technology | Maximum | ||
Acquired Finite-Lived Intangible Assets | ||
Estimated Useful Life (in Years) | 6 years | 6 years |
Non-compete agreements | ||
Acquired Finite-Lived Intangible Assets | ||
Estimated Useful Life (in Years) | 5 years | 5 years |
Gross Carrying Amount | $ 1,600 | $ 1,600 |
Accumulated Amortization | (400) | (240) |
Net Carrying Amount | $ 1,200 | $ 1,360 |
Trade name | ||
Acquired Finite-Lived Intangible Assets | ||
Estimated Useful Life (in Years) | 3 years | 3 years |
Gross Carrying Amount | $ 850 | $ 850 |
Accumulated Amortization | (354) | (212) |
Net Carrying Amount | $ 496 | $ 638 |
Acquisition, Goodwill, and In_7
Acquisition, Goodwill, and Intangible Assets - Schedule of Estimated Future Amortization Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Fiscal Year | ||
Remaining fiscal 2022 | $ 4,016 | |
2023 | 7,186 | |
2024 | 6,691 | |
2025 | 6,620 | |
2026 | 6,069 | |
2027 and thereafter | 10,796 | |
Net Carrying Amount | $ 41,378 | $ 45,394 |
Cash, Cash Equivalents, and F_3
Cash, Cash Equivalents, and Funds Held for Customers (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Cash and Cash Equivalents [Abstract] | ||
Cash and cash equivalents | $ 170,457 | $ 165,467 |
Funds held for customers | 83 | 316 |
Total cash and cash equivalents | $ 170,540 | $ 165,783 |
Derivative Instruments and He_2
Derivative Instruments and Hedging (Details) - Cash flow hedging - Foreign currency exchange contracts - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2022 | Sep. 30, 2021 | |
Derivative | ||
Foreign exchange contract terms | 12 months | |
Notional amount | $ 6.4 | $ 6.8 |
Convertible Senior Notes - Narr
Convertible Senior Notes - Narrative (Details) | 1 Months Ended | 6 Months Ended |
May 31, 2020USD ($)d$ / shares | Mar. 31, 2022USD ($)$ / shares | |
Debt Instrument | ||
Closing trading price (usd per share) | $ / shares | $ 100 | |
Convertible Debt | Notes | ||
Debt Instrument | ||
Aggregate principal amount | $ 172,500,000 | |
Debt instrument, interest rate (percent) | 2.625% | |
Purchase option value | $ 22,500,000 | |
Proceeds from issuance of debt | 166,400,000 | |
Debt issuance cost | $ 6,100,000 | |
Conversion rate | 0.0300044 | |
Initial conversion price (usd per share) | $ / shares | $ 33.33 | $ 33.33 |
Common stock for trading days | d | 20 | |
Consecutive trading days | d | 30 | |
Conversion threshold for trigger price (percent) | 130.00% | |
Measurement period (days) | 5 days | |
Minimum percentage of conversion price in the event of trigger event (percent) | 98.00% | |
Redemption price (percent) | 100.00% | |
Sinking fund | $ 0 | |
Carrying amount of equity component | $ 57,200,000 | |
Equity portion of debt issuance cost | $ 2,000,000 | |
Amortized over period | 38 months | |
Convertible Debt | Maximum | Notes | ||
Debt Instrument | ||
Conversion rate | 0.0382555 | |
Convertible Debt | Estimate of Fair Value Measurement | Notes | ||
Debt Instrument | ||
Carrying amount of the liability component | $ 115,300,000 | |
Estimated fair value | 195,300,000 | |
Convertible Debt | Interest Expense | Notes | ||
Debt Instrument | ||
Debt issuance cost | $ 4,100,000 | |
Convertible Debt | On or After June 6, 2023 | Notes | ||
Debt Instrument | ||
Redemption price (percent) | 100.00% | |
Term Loan | Credit Agreement | ||
Debt Instrument | ||
Repayments of debt | $ 40,000,000 |
Convertible Senior Notes - Liab
Convertible Senior Notes - Liability and Equity Components (Details) - Convertible Debt - Notes - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Liability component: | ||
Principal amount | $ 172,500 | $ 172,500 |
Unamortized discount | (39,725) | (44,803) |
Unamortized issuance costs | (3,082) | (3,396) |
Net carrying amount | 129,693 | 124,301 |
Equity component, net of issuance costs | $ 55,227 | $ 55,227 |
Convertible Senior Notes - Inte
Convertible Senior Notes - Interest Expense Recognized (Details) - Convertible Debt - Notes - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Instrument | ||||
Coupon interest expense | $ 1,132 | $ 1,132 | $ 2,264 | $ 2,264 |
Amortization of debt discount | 2,575 | 2,302 | 5,079 | 4,541 |
Amortization of debt issuance costs | 161 | 125 | 312 | 243 |
Total interest expense related to the Notes | $ 3,868 | $ 3,559 | $ 7,655 | $ 7,048 |
Effective interest rate of the liability component | 12.32% | 12.32% | 12.32% | 12.32% |
Stockholders' Equity - Componen
Stockholders' Equity - Component of Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | $ 129,989 | $ 124,854 | $ 123,518 | $ 124,671 |
Issuance of common stock upon exercise of stock options | 8 | 5 | 80 | 31 |
Issuance of common stock upon release of restricted stock units | 1 | 1 | ||
Issuance of common stock upon ESPP purchase | 2,321 | 2,251 | 2,321 | 2,251 |
Stock-based compensation | 7,932 | 6,514 | 20,610 | 11,642 |
Other comprehensive income (loss) | (284) | (97) | (297) | 85 |
Net loss | (8,039) | (10,686) | (14,305) | (15,839) |
Balance at end of period | 131,928 | 122,841 | 131,928 | 122,841 |
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | $ 5 | $ 5 | $ 5 | $ 5 |
Balance at beginning of period (in shares) | 36,433,000 | 35,049,000 | 36,059,000 | 34,821,000 |
Issuance of common stock upon exercise of stock options (in shares) | 8,000 | 4,000 | ||
Issuance of common stock upon release of restricted stock units | $ 1 | $ 1 | ||
Issuance of common stock upon release of restricted stock units (in shares) | 275,000 | 452,000 | 641,000 | 676,000 |
Issuance of common stock upon ESPP purchase (in shares) | 108,000 | 66,000 | 108,000 | 66,000 |
Balance at end of period | $ 6 | $ 5 | $ 6 | $ 5 |
Balance at end of period (in shares) | 36,816,000 | 35,567,000 | 36,816,000 | 35,567,000 |
Additional Paid-In Capital | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | $ 393,278 | $ 357,106 | $ 380,528 | $ 351,952 |
Issuance of common stock upon exercise of stock options | 8 | 5 | 80 | 31 |
Issuance of common stock upon ESPP purchase | 2,321 | 2,251 | 2,321 | 2,251 |
Stock-based compensation | 7,932 | 6,514 | 20,610 | 11,642 |
Balance at end of period | 403,539 | 365,876 | 403,539 | 365,876 |
Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | (1,218) | (1,031) | (1,205) | (1,213) |
Other comprehensive income (loss) | (284) | (97) | (297) | 85 |
Balance at end of period | (1,502) | (1,128) | (1,502) | (1,128) |
Accumulated Deficit | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | (262,076) | (231,226) | (255,810) | (226,073) |
Net loss | (8,039) | (10,686) | (14,305) | (15,839) |
Balance at end of period | $ (270,115) | $ (241,912) | $ (270,115) | $ (241,912) |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2021USD ($) | |
Equity [Abstract] | |
Additional paid in capital, restricted stock unit grants, portion of bonus recorded as stock-based compensation | $ 5.4 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Restricted Stock Unit Activity (Including Performance Based Restricted Stock Awards) Under All Equity Award Plans (Details) shares in Thousands | 6 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Restricted Stock Units Outstanding | |
Balance at end of period (in shares) | 2,400 |
Restricted Stock Units | |
Restricted Stock Units Outstanding | |
Balance at beginning of period (in shares) | 1,748 |
Granted (in shares) | 1,358 |
Released (in shares) | (641) |
Forfeited (in shares) | (195) |
Balance at end of period (in shares) | 2,270 |
Weighted Average Grant Date Fair Value | |
Balance at beginning of period (in dollars per share) | $ / shares | $ 30.54 |
Granted (in dollars per share) | $ / shares | 33.91 |
Released (in dollars per share) | $ / shares | 28.71 |
Forfeited (in dollars per share) | $ / shares | 30.54 |
Balance at end of period (in dollars per share) | $ / shares | $ 33.07 |
Stock-based Compensation - Su_2
Stock-based Compensation - Summary of Allocated Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation | $ 8,322 | $ 7,782 | $ 15,308 | $ 12,910 |
Total stock-based compensation in cost of revenues | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation | 1,936 | 1,848 | 3,415 | 3,025 |
Total stock-based compensation in operating expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation | 6,386 | 5,934 | 11,893 | 9,885 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation | 1,509 | 1,613 | 2,790 | 2,744 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation | 1,826 | 1,967 | 3,446 | 3,520 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation | 3,051 | 2,354 | 5,657 | 3,621 |
Subscription | Total stock-based compensation in cost of revenues | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation | 1,065 | 846 | 1,923 | 1,369 |
Professional services | Total stock-based compensation in cost of revenues | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation | $ 871 | $ 1,002 | $ 1,492 | $ 1,656 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 360,000 | $ 249,000 | $ 734,000 | $ 488,000 |
Effective income tax expense, rate | 4.70% | 2.40% | 5.40% | 3.20% |
Benefit realized for current period losses | $ 0 | $ 0 |
Net Loss per Share - Computatio
Net Loss per Share - Computation of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Basic and diluted | ||||
Net loss attributable to common stockholders, basic | $ (8,039) | $ (10,686) | $ (14,305) | $ (15,839) |
Net loss attributable to common stockholders, diluted | $ (8,039) | $ (10,686) | $ (14,305) | $ (15,839) |
Denominator | ||||
Weighted average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 36,619 | 35,305 | 36,419 | 35,119 |
Weighted average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 36,619 | 35,305 | 36,419 | 35,119 |
Net loss per share attributable to common stockholders: | ||||
Basic (usd per share) | $ (0.22) | $ (0.30) | $ (0.39) | $ (0.45) |
Diluted (usd per share) | $ (0.22) | $ (0.30) | $ (0.39) | $ (0.45) |
Net Loss per Share - Summary of
Net Loss per Share - Summary of Weighted Average Shares of Common Stock Equivalents Excluded from Computation of Diluted Net Loss per Share Attributable to Common Stockholders (Details) - shares shares in Thousands | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 17 | 30 |
Performance-based RSUs and RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 2,270 | 2,209 |
Shares issuable pursuant to the employee stock purchase plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Shares issuable pursuant to the employee stock purchase plan (in shares) | 86 | 63 |
Convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 0 | 5,176 |
Net Loss per Share - Narrative
Net Loss per Share - Narrative (Details) - $ / shares | Mar. 31, 2022 | May 31, 2020 |
Notes | Convertible Debt | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Conversion price (usd per share) | $ 33.33 | $ 33.33 |
Geographic Information - Narrat
Geographic Information - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022segmentbusiness | Mar. 31, 2021 | |
Segment Reporting Information | ||||
Number of operating segment | segment | 1 | |||
Number of business activity | business | 1 | |||
Outside of United States | Revenue | Geographic concentration risk | ||||
Segment Reporting Information | ||||
Revenues from customers outside United States | 5.00% | 7.00% | 6.00% | 8.00% |
Geographic Information - Compan
Geographic Information - Company's Property and Equipment, Net by Geographic Region (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Sep. 30, 2021 |
Geographic Areas, Long-Lived Assets | ||
Total property and equipment, net | $ 1,701 | $ 1,907 |
United States | ||
Geographic Areas, Long-Lived Assets | ||
Total property and equipment, net | 1,131 | 1,374 |
India | ||
Geographic Areas, Long-Lived Assets | ||
Total property and equipment, net | $ 570 | $ 533 |