Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 09, 2018 | Jun. 30, 2017 | |
Document Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | PROOFPOINT INC | ||
Entity Central Index Key | 1,212,458 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 50,546,319 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 3,763 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 286,072 | $ 345,426 |
Short-term investments | 45,526 | 51,325 |
Accounts receivable, net | 109,325 | 72,951 |
Inventory | 730 | 598 |
Deferred product costs | 1,541 | 1,829 |
Deferred commissions | 27,144 | 21,168 |
Prepaid expenses and other current assets | 18,669 | 17,498 |
Total current assets | 489,007 | 510,795 |
Property and equipment, net | 73,617 | 52,523 |
Deferred product costs | 259 | 310 |
Goodwill | 297,704 | 167,270 |
Intangible assets, net | 95,602 | 61,708 |
Long-term deferred commissions | 5,811 | 4,496 |
Other assets | 12,813 | 4,558 |
Total assets | 974,813 | 801,660 |
Current liabilities: | ||
Accounts payable | 12,271 | 15,297 |
Accrued liabilities | 63,926 | 50,765 |
Capital lease obligations | 34 | 32 |
Deferred rent | 586 | 409 |
Deferred revenue | 381,915 | 259,109 |
Total current liabilities | 458,732 | 325,612 |
Convertible senior notes | 197,858 | 366,541 |
Long-term capital lease obligations | 55 | 91 |
Long-term deferred rent | 4,102 | 2,413 |
Other long-term liabilities | 11,069 | 9,008 |
Long-term deferred revenue | 69,873 | 53,072 |
Total liabilities | 741,689 | 756,737 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity: | ||
Convertible preferred stock, $0.0001 par value; 5,000 shares authorized; no shares issued and outstanding as of December 31, 2017 and 2016 | 0 | 0 |
Common stock, $0.0001 par value; 200,000 shares authorized; 50,325 and 43,015 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively | 5 | 4 |
Additional paid-in capital | 787,572 | 514,034 |
Accumulated other comprehensive loss | (9) | (7) |
Accumulated deficit | (554,444) | (469,108) |
Total stockholders’ equity | 233,124 | 44,923 |
Total liabilities and stockholders’ equity | $ 974,813 | $ 801,660 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Number of shares of common stock reserved for future issuance | ||
Par value of common stock (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock issued (in shares) | 50,325,000 | 43,015,000 |
Common stock outstanding (in shares) | 50,325,000 | 43,015,000 |
Convertible preferred stock [Member] | ||
Preferred stock: | ||
Par value of preferred stock (USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Revenue: | ||||
Subscription | $ 503,257 | $ 365,960 | $ 257,329 | |
Hardware and services | 12,032 | 9,536 | 8,068 | |
Total revenue | 515,289 | 375,496 | 265,397 | |
Cost of revenue: | ||||
Subscription | [1],[2] | 125,832 | 94,716 | 71,746 |
Hardware and services | [1],[2] | 17,546 | 13,877 | 12,312 |
Total cost of revenue | [1],[2] | 143,378 | 108,593 | 84,058 |
Gross profit | 371,911 | 266,903 | 181,339 | |
Operating expense: | ||||
Research and development | [1],[2] | 129,803 | 98,506 | 74,459 |
Sales and marketing | [1],[2] | 258,837 | 201,204 | 148,414 |
General and administrative | [1],[2] | 52,735 | 52,774 | 36,616 |
Total operating expense | [1],[2] | 441,375 | 352,484 | 259,489 |
Operating loss | (69,464) | (85,581) | (78,150) | |
Interest expense | (25,597) | (23,538) | (18,000) | |
Other income (expense), net | 774 | (1,103) | (1,927) | |
Loss before income taxes | (94,287) | (110,222) | (98,077) | |
Benefit from (provision for) income taxes | 9,950 | (986) | (635) | |
Net loss | $ (84,337) | $ (111,208) | $ (98,712) | |
Net loss per share, basic and diluted (in dollars per share) | $ (1.91) | $ (2.66) | $ (2.48) | |
Weighted average shares outstanding, basic and diluted (in shares) | 44,258 | 41,859 | 39,787 | |
Intangible amortization expense | $ 18,506 | $ 14,421 | $ 12,256 | |
Cost of subscription revenue | ||||
Operating expense: | ||||
Stock-based compensation expense | 10,635 | 7,427 | 5,028 | |
Intangible amortization expense | 14,512 | 9,423 | 7,079 | |
Cost of hardware and services revenue | ||||
Operating expense: | ||||
Stock-based compensation expense | 1,893 | 1,494 | 1,098 | |
Research and development | ||||
Operating expense: | ||||
Stock-based compensation expense | 30,588 | 24,342 | 20,672 | |
Intangible amortization expense | 60 | 60 | 91 | |
Sales and marketing | ||||
Operating expense: | ||||
Stock-based compensation expense | 33,962 | 28,607 | 21,511 | |
Intangible amortization expense | 3,934 | 4,938 | 5,074 | |
General and administrative | ||||
Operating expense: | ||||
Stock-based compensation expense | 20,382 | 16,826 | 11,785 | |
Intangible amortization expense | $ 0 | $ 0 | $ 12 | |
[1] | Includes intangible amortization expense as follows: Cost of subscription revenue $14,512, research and development $60, sales and marketing $3,934 and general and administrative $0 for the year ended December 31, 2017. Cost of subscription revenue $9,423, research and development $60, sales and marketing $4,938 and general and administrative $0 for the year ended December 31, 2016. Cost of subscription revenue $7,079, research and development $91, sales and marketing $5,074 and general and administrative $12 for the year ended December 31, 2015. | |||
[2] | Includes stock-based compensation expenses as follows:Cost of subscription $10,635, cost of hardware and service revenue $1,893, research and development $30,588, sales and marketing $33,962 and general and administrative $20,382 for the year ended December 31, 2017. Cost of subscription $7,427, cost of hardware and service revenue $1,494, research and development $24,342, sales and marketing $28,607 and general and administrative $16,826 for the year ended December 31, 2016. Cost of subscription $5,028, cost of hardware and service revenue $1,098, research and development $20,672, sales and marketing $21,511 and general and administrative $11,785 for the year ended December 31, 2015 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (84,337) | $ (111,208) | $ (98,712) |
Other comprehensive income (loss), net of tax: | |||
Unrealized (losses) gains on investments, net | (2) | 16 | 4 |
Comprehensive loss | $ (84,339) | $ (111,192) | $ (98,708) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
Beginning balance at Dec. 31, 2014 | $ 71,533 | $ 4 | $ 330,744 | $ (27) | $ (259,188) |
Beginning balance (shares) at Dec. 31, 2014 | 38,665 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (98,712) | (98,712) | |||
Unrealized (losses) gains on investments, net | 4 | 4 | |||
Embedded conversion feature on Convertible Senior Notes | 54,049 | 54,049 | |||
Stock-based compensation expense | 54,418 | 54,418 | |||
Common stock issued | 20,292 | 20,292 | |||
Common stock issued (shares) | 2,486 | ||||
Tax withholding upon vesting of restricted stock awards | (18,400) | (18,400) | |||
Tax withholding upon vesting of restricted stock awards (shares) | (311) | ||||
Vesting of early exercise options | 1 | 1 | |||
Ending balance at Dec. 31, 2015 | 83,185 | $ 4 | 441,104 | (23) | (357,900) |
Ending balance (shares) at Dec. 31, 2015 | 40,840 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (111,208) | (111,208) | |||
Unrealized (losses) gains on investments, net | 16 | 16 | |||
Stock-based compensation expense | 70,560 | 70,560 | |||
Acquisition of businesses (Note 2) | 176 | 176 | |||
Acquisition of businesses (shares) | 111 | ||||
Common stock issued | 27,799 | 27,799 | |||
Common stock issued (shares) | 2,474 | ||||
Tax withholding upon vesting of restricted stock awards | (25,605) | (25,605) | |||
Tax withholding upon vesting of restricted stock awards (shares) | (410) | ||||
Ending balance at Dec. 31, 2016 | 44,923 | $ 4 | 514,034 | (7) | (469,108) |
Ending balance (shares) at Dec. 31, 2016 | 43,015 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect adjustment from adoption of new accounting pronouncement (Note 1) | 0 | 999 | (999) | ||
Net loss | (84,337) | (84,337) | |||
Unrealized (losses) gains on investments, net | (2) | (2) | |||
Conversion of convertible senior notes to common stock (Note 8) | 193,154 | $ 1 | 193,153 | ||
Conversion of convertible senior notes to common stock (shares) | 5,159 | ||||
Stock-based compensation expense | 88,449 | 88,449 | |||
Acquisition of businesses (Note 2) | 424 | 424 | |||
Acquisition of businesses (shares) | 0 | ||||
Common stock issued | 34,024 | 34,024 | |||
Common stock issued (shares) | 2,672 | ||||
Tax withholding upon vesting of restricted stock awards | (43,511) | (43,511) | |||
Tax withholding upon vesting of restricted stock awards (shares) | (521) | ||||
Ending balance at Dec. 31, 2017 | $ 233,124 | $ 5 | $ 787,572 | $ (9) | $ (554,444) |
Ending balance (shares) at Dec. 31, 2017 | 50,325 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net loss | $ (84,337) | $ (111,208) | $ (98,712) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 42,098 | 31,552 | 24,900 |
Stock-based compensation | 97,460 | 78,696 | 60,094 |
Change in fair value of contingent consideration | (1,533) | (669) | 0 |
Amortization of debt issuance costs and accretion of debt discount | 21,789 | 20,842 | 14,933 |
Amortization of deferred commissions | 36,865 | 33,147 | 21,899 |
Loss on conversion of convertible notes | 2,696 | 0 | 0 |
Deferred income taxes | (15,953) | 119 | 67 |
Other | (348) | 1,170 | 2,364 |
Changes in assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable | (33,538) | (18,737) | (13,042) |
Inventory | (132) | (113) | 14 |
Deferred product costs | 338 | 402 | (388) |
Deferred commissions | (44,157) | (36,009) | (29,641) |
Prepaid expenses | (1,663) | (2,660) | (1,829) |
Other current assets | (139) | (1,472) | 104 |
Long-term assets | (3,429) | 959 | 47 |
Accounts payable | (1,648) | 4,271 | 2,460 |
Accrued liabilities | 13,943 | 6,398 | 4,448 |
Deferred rent | 1,867 | 292 | (165) |
Deferred revenue | 123,507 | 87,255 | 58,951 |
Net cash provided by operating activities | 153,686 | 94,235 | 46,504 |
Cash flows from investing activities | |||
Proceeds from maturities of short-term investments | 102,556 | 123,405 | 39,056 |
Purchase of short-term investments | (96,741) | (114,686) | (64,537) |
Purchase of property and equipment | (46,958) | (34,407) | (25,827) |
Payments to escrow account | 0 | (9,645) | 0 |
Receipts from escrow account | 6,066 | 260 | 0 |
Acquisitions of business, net of cash and restricted cash acquired | (155,350) | (54,119) | (51,481) |
Net cash used in investing activities | (190,427) | (89,192) | (102,789) |
Cash flows from financing activities | |||
Proceeds from issuance of common stock | 25,725 | 21,779 | 18,583 |
Withholding taxes related to restricted stock net share settlement | (42,823) | (25,588) | (18,108) |
Proceeds from issuance of convertible senior notes, net of discount | 0 | 0 | 223,790 |
Payments of debt issuance costs | 0 | 0 | (371) |
Repayments of equipment loans and capital lease obligations | (34) | (32) | (706) |
Repayment of convertible notes | 14 | 0 | 0 |
Holdback payments for prior acquisitions | 0 | (1,397) | 0 |
Contingent consideration payment | (6,066) | 0 | 0 |
Net cash (used in) provided by financing activities | (23,212) | (5,238) | 223,188 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 1,076 | (545) | (963) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (58,877) | (740) | 165,940 |
Cash, cash equivalents, and restricted cash | |||
Beginning of period | 345,537 | 346,277 | 180,337 |
End of period | 286,660 | 345,537 | 346,277 |
Supplemental disclosures of cash flow information | |||
Cash paid for interest | 4,236 | 4,250 | 3,381 |
Cash paid for taxes | 5,311 | 893 | 672 |
Supplemental disclosure of noncash investing and financing activities | |||
Unpaid purchases of property and equipment and asset retirement obligations | 3,349 | 6,035 | 4,906 |
Liability awards converted to equity | 8,307 | 6,059 | 1,745 |
Convertible senior notes converted to equity | 193,153 | 0 | 0 |
Reconciliation of cash, cash equivalents and restricted cash as shown in the consolidated statement of cash flows | |||
Cash and cash equivalents | 286,072 | 345,426 | 346,205 |
Restricted cash included in prepaid expenses and other current assets | 315 | 79 | 40 |
Restricted cash included in other non-current assets | 273 | 32 | 32 |
End of period | $ 286,660 | $ 345,537 | $ 346,277 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
The Company and Summary of Significant Accounting Policies | The Company and Summary of Significant Accounting Policies The Company Proofpoint, Inc. (the “Company”) was incorporated in Delaware in June 2002 and is headquartered in California. Proofpoint, Inc. is a leading security-as-a-service provider that enables large and mid-sized organizations worldwide to defend, protect, archive and govern their most sensitive data. The Company’s security-and compliance platform is comprised of an integrated suite of threat protection, information protection, and brand protection solutions, including email protection, advanced threat protection, email authentication, data loss prevention, SaaS application protection, response orchestration and automation, digital risk, web browser isolation, email encryption, archiving, eDiscovery, supervision, and secure communication. Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP"). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. During the reporting periods, the Company completed a number of acquisitions which are more fully described in Note 2, "Acquisitions". The consolidated financial statements include the results of operations from these business combinations from their date of acquisition. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ materially from those estimates. Significant items subject to such estimates and assumptions include those related to revenue recognition, deferred commissions, stock-based compensation expense, fair value of assets acquired and liabilities assumed in business combinations, impairment assessments of goodwill, intangible assets and other long-lived assets, loss contingencies, and income taxes. Foreign Currency Remeasurement and Transactions The functional currency of the Company's wholly-owned foreign subsidiaries is the U.S. dollar. Accordingly, the subsidiaries remeasure monetary assets and liabilities at period-end exchange rates, while nonmonetary items are remeasured at historical rates. Income and expense accounts are remeasured at the average exchange rates in effect during the year. Remeasurement adjustments are recognized in the consolidated statements of operations as transaction gains or losses within other income (expense), net, in the period of occurrence. Aggregate transaction gains (losses) included in determining net loss were $574 , $(852) and $(1,657) for the years ended December 31, 2017, 2016 and 2015 , respectively. Cash and Cash Equivalents The Company considers currency on hand, demand deposits, time deposits, money market funds and all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. Cash and cash equivalents are held in various financial institutions in the United States and internationally. Investments The Company classifies all its investments as available-for-sale at the time of purchase since it is management’s intent that these investments be available for current operations, and as such, includes these investments as short-term investments on its balance sheets. These investments consist of money market funds, corporate debt securities, commercial papers, U.S. agency and Treasury securities, and certificates of deposit with original maturities longer than three months. Short-term investments classified as available-for-sale are recorded at fair value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), a component of stockholders’ equity. Realized gains and losses are recorded in the consolidated statements of operations and comprehensive loss based on specific identification. Inventories Inventories are stated at lower of cost or net realizable value, with costs computed on a first-in, first-out basis. The Company periodically reviews its inventories for excess and obsolete items and adjusts carrying costs to estimated net realizable values when they are determined to be less than cost. Inventories held at December 31, 2017 and December 31, 2016 consist primarily of finished goods. Revenue Recognition The Company derives its revenue primarily from two sources: (1) subscription revenue for rights related to the use of the security-as-a-service platform and (2) hardware, training and professional services revenue provided to customers related to their use of the platform. The Company records its revenues net of any value added or sales tax. Subscription revenue is derived from a subscription‑based enterprise licensing model with contract terms typically ranging from one to three years, and consists of (i) subscription fees from the licensing of the security-as-a-service platform, (ii) subscription fees for access to the on-demand elements of the platform and (iii) subscription fees for the right to access the Company’s customer support services. Revenue is recognized when all of the following criteria have been met: • Persuasive evidence of an arrangement exists; • Delivery has occurred or services have been rendered; • Sales price is fixed or determinable; and • Collectability is reasonably assured. The Company generates sales directly through its sales team and, to a growing extent, through its channel partners. Sales to channel partners are made at a discount and revenues are recorded at this discounted price once all revenue recognition criteria are met. Channel partners generally receive an order from an end-customer prior to placing an order with the Company, and these partners do not carry any inventory of the Company’s products or solutions. Payment from channel partners is not contingent on the partner’s success in sales to end-customers. In the event that the Company offers rebates, joint marketing funds, or other incentive programs to a partner, recorded revenues are reduced by these amounts accordingly. From time to time, certain third parties that the Company has an arrangement with provide the Company with referrals for which the Company pays a referral fee. The referral fee paid could vary depending on the level of effort. These fees are recorded in sales and marketing expense in proportion to the related revenue streams consistent with the sales commissions accounting. The Company did not incur any material referral fee expenses during the years ended December 31, 2017, 2016 and 2015 . The Company applies industry-specific software revenue recognition guidance to transactions involving the licensing of software, as well as related support, training, and other professional services. The Company has analyzed all of the elements included in its multiple element software arrangements and has determined that it does not have sufficient VSOE of fair value to allocate revenue to its subscription and software license agreements, support, training and professional services. The Company defers all revenue under the software arrangement until the commencement of the subscription services and any associated professional services. Once the subscription services and the associated professional services have commenced, the entire fee from the arrangement is recognized ratably over the remaining period of the arrangement. If the professional services are essential to the functionality of the subscription, then the revenue recognition does not commence until such services are completed. The Company’s revenue arrangements typically include subscription services to its security-as-a-service platform. These hosted on demand service arrangements do not provide customers with the right to take possession of the software supporting the hosted services. Certain arrangements also include the sale of hardware appliances. Revenue from hardware appliances containing software components and hardware components that function together to deliver the hardware appliance’s essential functionality is excluded from the scope of the industry specific revenue recognition guidance. The Company recognizes revenue from its hosted on demand services in accordance with general revenue recognition accounting guidance. Only revenue derived from the licensing of the software is recognized in accordance with the industry specific revenue guidance. When a sales arrangement contains multiple elements, such as hardware appliances, subscription services, customer support services, and/or professional services, the Company allocates revenue to each unit of accounting or element based on a selling price hierarchy. An element constitutes a separate unit of accounting when the delivered item has standalone value and delivery of the undelivered element is probable and within the Company’s control. When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence (“VSOE”) of selling price. If VSOE does not exist, the Company uses third-party evidence (“TPE”) of selling price. If neither VSOE nor TPE of selling price exist for a deliverable, the Company uses its best estimate of selling price (“BESP”) for that deliverable. Revenue allocated to each element is then recognized when the basic revenue recognition criteria are met for each element. The Company determines BESP for an individual element within a multiple element revenue arrangement using the same methods utilized to determine the selling price of an element sold on a standalone basis. The Company estimates the selling price for its subscription solutions by considering internal factors such as historical pricing practices and it estimates the selling price of hardware and other services using a cost plus model. Hardware appliance revenue is recognized upon shipment. Subscription and support revenue are recognized over the contract period commencing on the start date of the contract. Professional services and training, when sold with hardware appliances or subscription and support services, are accounted for separately when those services have standalone value. In determining whether professional services and training services can be accounted for separately from subscription and support services, the Company considers the following factors: availability of the services from other vendors, the nature of the services, and the dependence of the subscription services on the customer’s decision to buy the professional services. If professional services and training do not qualify for separate accounting, the Company recognizes the professional services and training ratably over the contract term of the subscription services. Delivery generally occurs when the hardware appliance is delivered to a common carrier freight on board shipping point by the Company or the hosted service has been activated and communicated to the customer accordingly. The Company’s fees are typically considered to be fixed or determinable at the inception of an arrangement and are negotiated at the outset of an arrangement, generally based on specific products and quantities to be delivered. In the event payment terms are provided that differ significantly from the Company’s standard business practices, the fees are deemed to not be fixed or determinable and revenue is recognized as the fees become paid. The Company assesses collectability based on a number of factors, including credit worthiness of the customer and past transaction history of the customer. Through December 31, 2017 , the Company has not experienced material credit losses. Deferred Revenue Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from the sale of the Company’s subscription fees, training and professional services. Once the revenue recognition criteria are met, this revenue is recognized ratably over the term of the associated contract. Deferred Commissions Deferred commissions are the direct and incremental selling costs that are associated with the Company's customer contracts and consist of sales commissions paid to the Company's direct sales force and referral fees paid to independent third-parties. The commissions are amortized to sales and marketing expense over the non-cancelable terms of the related contracts with the Company's customers. The commission payments, which are paid in full the month after the customer's service commences, are a direct and incremental cost of the revenue arrangements. Direct sales commissions are deferred when earned and amortized over the same period that revenues are recognized for the related non-cancelable contract. Deferred Product Costs Deferred product costs are the incremental costs that are directly associated with each noncancellable customer contract or hosting agreement and primarily consist of cost of appliances and royalty payments made to third parties, from whom the Company has obtained licenses to integrate certain software into its products. The costs are deferred and amortized over the noncancellable term of the related customer contract or hosting agreement, which typically range from 12 to 36 months. Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the related asset. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the lease term or the estimated useful life of the asset or improvement. Cost of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. When property and equipment are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is included in other (expense) income, net. Impairment of Intangible Assets and Other Long-Lived Assets The Company evaluates long-lived assets, including property, equipment and definitive-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of such assets (or asset group) to the future undiscounted cash flows the assets (or asset group) is expected to generate. If the assets are considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired assets. The Company also evaluates the estimated remaining useful lives of intangible assets and other long-lived assets to assess whether a revision to the remaining periods of amortization is required. No assets were determined to be impaired as of December 31, 2017. Software Development Costs Internally developed software includes security software developed to meet the Company’s internal needs to provide cloud-based subscription services to its end-customers and business software that the Company customizes to meet its operating needs. These capitalized costs consist of internal compensation related costs and external direct costs incurred during the application development stage. The costs capitalized were not material in the years ended December 31, 2017, 2016 and 2015 . The costs to develop software that is marketed externally have not been capitalized as the current software development process is essentially completed concurrently with the establishment of technological feasibility. As such, all related software development costs are expensed as incurred and included in research and development expense in the consolidated statements of operations. Internally and externally developed software is amortized over the software’s estimated useful life of three to five years. Advertising and Promotion Costs Expenses related to advertising and promotion of solutions is charged to sales and marketing expense as incurred. The Company did not incur any material advertising and promotion expenses during the years ended December 31, 2017, 2016 and 2015 . Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of the acquired enterprise over the fair value of identifiable assets acquired and liabilities assumed. The Company performs an annual goodwill impairment test during the fourth quarter of a calendar year and more frequently if an event or circumstances indicates that impairment may have occurred. For the purposes of impairment testing, the Company has determined that it has one operating segment and one reporting unit. The Company performs a two-step impairment test of goodwill whereby the fair value of the reporting unit is compared to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not considered impaired and further testing is not required. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then impairment loss equal to the difference is recorded. The identification and measurement of goodwill impairment involves the estimation of the fair value of the Company. The estimate of fair value of the Company, based on the best information available as of the date of the assessment, is subjective and requires judgment, including management assumptions about expected future revenue forecasts and discount rates, changes in the overall economy, trends in the stock price and other factors. No impairment was identified by the Company as of December 31, 2017 . Intangible assets consist of developed technology, customer relationships, non-compete arrangements, trademarks and patents, and order backlog. The values assigned to intangibles are based on estimates and judgments regarding expectations for success and life cycle of solutions and technologies acquired. Intangible assets are amortized on a straight-line basis over their estimated lives, which approximate the pattern in which the economic benefits of the intangible assets are consumed, as follows (in years): Low High Patents 4 5 Developed technology 3 7 Customer relationships 2 8 Order backlog 1 3 Tradenames and trademarks 1 5 Warranty The Company provides limited warranties on all sales and provides for the estimated cost of the warranties at the date of sale, to the extent not already provided by its own vendors. Warranty costs and the accrued warranty liabilities were not material for all periods presented. Income Taxes The Company accounts for income taxes in accordance with authoritative guidance, which requires use of the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on the difference between the consolidated financial statements carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rates expected to apply to taxable income in the years in which the differences are expected to be reversed. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. The Company recognizes interest and penalties related to uncertain tax positions within the income tax expense line in the consolidated statements of operations. Accrued interest and penalties are included within the related tax liability line on the consolidated balance sheets. Employee Benefit Plans The Company sponsors a 401(k) defined contribution plan covering all employees. The Company may make discretionary contributions to the 401(k). To date, no contributions have been made by the Company. Stock-Based Compensation The Company issues stock-based compensation awards to employees and directors in the form of stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), employee stock purchase plan (“ESPP”) and stock bonus and other liability awards (collectively, “awards”). The Company measures and recognizes compensation expense for all stock-based awards based on the awards’ fair value. Stock-based compensation for RSUs and PSUs is measured based on the value of the Company’s common stock on the grant date. Stock-based compensation for employee stock options and ESPP awards are measured on the date of grant using a Black-Scholes option pricing model. Stock bonus and other liability awards are accounted for as liability-classified awards, because the obligations are based predominantly on fixed monetary amounts that are generally known at the inception of the obligation, to be settled with a variable number of shares of the Company’s common stock. Awards vest either on a graded schedule or in a lump sum. The Company determines the fair value of each award as a single award and recognizes the expense on a straight-line basis over the service period of the award, which is generally the vesting period. The exercise price of stock options granted is equal to the fair value of the Company's common stock on the date of grant. Stock options expire ten years from the date of grant. During the year ended December 31, 2017, the Company adopted Accounting Standards Update (“ASU”) 2016-09 and elected to account for forfeitures as they occur. Refer to Accounting Pronouncements Adopted in 2017 below for changes in the accounting for stock-based compensation expense. Comprehensive Income (Loss) Comprehensive income (loss) includes all changes in equity that are not the result of transactions with stockholders. The Company’s comprehensive income (loss) consists of its net loss and changes in unrealized gains (losses) on its available-for-sale investments. Loss Contingencies The Company may be involved in various lawsuits, claims and proceedings that arise in the ordinary course of business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Company reviews these provisions at least quarterly and adjusts these provisions to reflect the impact of negotiations, settlements, rulings, and updated information. Accounting Pronouncements Adopted in 2017 In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). The ASU 2016-18 provides amendments to current guidance to address the classification and presentation of changes in restricted cash in the statement of cash flows. The Company adopted the ASU in 2017 and retrospectively applied the change to the presentation of the statement of cash flows for the years ended December 31, 2016 and 2015. The adoption of this standard did not have a material impact on the Company's consolidated financial statements and related disclosures. In March 2016, FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The ASU 2016-09 was effective for the Company beginning in the first quarter of 2017. This ASU simplifies various aspects related to how share-based payments are accounted for and presented in the financial statements, including forfeitures, income taxes and statutory tax withholding requirements. As a result of adopting ASU 2016-09, the Company has made an accounting policy election to account for forfeitures as they occur. This change has been applied on a modified retrospective basis, resulting in a cumulative-effect adjustment to increase the accumulated deficit by $999 as of January 1, 2017, the date of adoption. The adoption of this ASU also requires that excess tax benefits and tax deficiencies be recorded in the consolidated statement of operations as opposed to additional paid-in capital when the awards vest or are settled, and has been applied on a prospective basis starting January 1, 2017. As a result of the adoption, the Company's deferred tax assets as of January 1, 2017 include certain deferred tax assets that arose directly from tax deductions related to equity compensation greater than compensation recognized for financial reporting in the amount of $79,336 , which is fully offset by the valuation allowance. The adoption of ASU 2016-09 as it relates to the accounting for minimum statutory withholding tax requirements has no impact on the Company's current consolidated financial statements or on any prior period financial statements presented. ASU 2016-09 also requires changes in the classification of shares withheld to pay employee taxes and excess tax benefits in the consolidated statements of cash flows. The ASU requires that cash paid by an employer when directly withholding shares for tax-withholding purposes be classified as a financing activity and be applied retrospectively to all prior periods presented. As the Company has previously presented these cash flows as financing activities, there is no change resulting from the adoption of this provision of the ASU. ASU 2016-09 also requires excess tax benefits to be classified as an operating activity, consistent with other income tax cash flows, with the application either on a retrospective or prospective basis. The Company has elected to apply this provision on a prospective basis; and there is no impact to its prior year consolidated statements of cash flows. Recent Accounting Policies Not Yet Effective In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment charge will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The update to the standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, and should be applied prospectively. The Company does not expect ASU 2017-04 to have a material impact on its financial statements. In January 2017, FASB issued ASU No. 2017-01, Business Combinations (Topic 805) Clarifying the Definition of Business (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update to the standard is effective for interim and annual periods beginning after December 15, 2017, and applied prospectively. Early adoption is permitted. The Company does not expect ASU 2017-01 to have a material impact on its consolidated financial statements. In October 2016, FASB issued ASU No. 2016-16, I ncome Taxes: Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). ASU 2016-16 eliminates the requirement to defer the recognition of current and deferred income taxes for intra-entity asset transfer until the asset has been sold to an outside party. Therefore, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-16 is effective for interim and annual reporting periods beginning after December 15, 2017. The ASU should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company has evaluated the impact of the adoption of ASU 2016-16 on its consolidated financial statements and anticipates that its accumulated deficit will increase by $3,216 as of January 1, 2018, the date of adoption. In August 2016, FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 20 16-15 clarifies how certain cash receipts and payments should be classified in the statement of cash flows, including the potential cash settlement of the Company's convertible senior notes. If the Company elects to cash settle its convertible senior notes (see Note 8 "Convertible Senior Notes"), repayment of the principal amounts will be bifurcated between (i) cash outflows for operating activities for the portion related to accreted interest attributable to debt discounts arising from the difference between the coupon interest rate and the effective interest rate, and (ii) financing activities for the remainder. See Note 8 "Convertible Senior Notes" regarding timing of settlement. The update to the standard is effective for interim and annual periods beginning after December 15, 2017, and requires adoption on a retrospective transition method unless it is impracticable to apply. The Company is currently evaluating the impact of the adoption of ASU 2016-15 on its consolidated financial statements. In June 2016, FASB issued an ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets, and will require the use of an expected loss model in place of the currently used incurred loss method. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. The update to the standard is effective for interim and annual periods beginning after December 15, 2019. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to put most leases on their balance sheets but recognize the expenses on their statements of operations in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The new standard is effective for interim and annual periods beginning after December 15, 2018 and early adoption is permitted. While the Company is currently assessing the impact ASU 2016-02 will have on the Company’s consolidated financial statements, the Company expects the primary impact to its consolidated financial position upon adoption will be the recognition, on a discounted basis, of the Company’s minimum commitments under non-cancelable operating leases on its consolidated balance sheets resulting in the recording of right of use assets and lease obligations. In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (“ASC 606”), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The standard contains a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods and services. The FASB has issued several amendments to the standard, including clarifications on disclosure of prior-period performance obligations and remaining performance obligations. The Company will adopt ASC 606 effective January 1, 2018 using the full retrospective transition method. While the Company is finalizing the impact this standard has on its consolidated financial statements and related disclosures, the Company expects the new standard to mostly cha |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Acquisitions are accounted for under the purchase method of accounting in which the tangible and identifiable intangible assets and liabilities of each acquired company are recorded at their respective fair values as of each acquisition date, including an amount for goodwill representing the difference between the respective acquisition consideration and fair values of identifiable net assets. The Company believes that for each acquisition, the combined entities will achieve savings in corporate overhead costs and opportunities for growth through expanded geographic and customer segment diversity with the ability to leverage additional products and capabilities. These factors, among others, contributed to a purchase price in excess of the estimated fair value of each acquired company’s net identifiable assets acquired and, as a result, goodwill was recorded in connection with each acquisition. Goodwill related to each acquisition below is not deductible for tax purposes. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value assets acquired and liabilities assumed at the acquisition date, these estimates and assumptions are subject to refinement. When additional information becomes available, such as finalization of negotiations of working capital adjustments and tax related matters, the Company may revise its preliminary purchase price allocation. As a result, during the preliminary purchase price allocation period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Subsequent to the purchase price allocation period, adjustments to assets acquired or liabilities assumed are recognized in the operating results. 2017 Acquisitions Cloudmark, Inc. On November 21, 2017 (the “Cloudmark Acquisition Date”), pursuant to the terms of the merger agreement, the Company acquired all shares of Cloudmark, Inc. (“Cloudmark”), a leader in messaging security and threat intelligence for internet service providers and mobile carriers worldwide. As part of the acquisition, Cloudmark’s Global Threat Network will be incorporated into Proofpoint’s cloud-based Nexus platform, which powers its email, social media, mobile, and SaaS security effectiveness. The Company believes that with this acquisition, it will benefit from increased messaging threat intelligence from the analysis of billions of daily emails, malicious domain intelligence, and visibility into fraudulent and malicious SMS messages directed to mobile carriers worldwide. The Company also expects to achieve savings in corporate overhead costs for the combined entities. These factors, among others, contributed to a purchase price in excess of the estimated fair value of acquired net identifiable assets and, as a result, goodwill was recorded in connection with the acquisition. The Company has provisionally estimated fair values of acquired tangible and intangible assets and assumed liabilities at the Cloudmark Acquisition Date. The amounts reported are considered provisional as the Company is completing the valuation work to determine the fair value of certain assets and liabilities acquired, largely with respect to working capital adjustments. The results of operations and the provisional fair values of the acquired assets and liabilities assumed have been included in the accompanying consolidated financial statements since the Cloudmark Acquisition Date. The Company recorded $3,052 in revenue from Cloudmark for the year ended December 31, 2017, and due to the continued integration of the combined businesses, it was impractical to determine the earnings. At the Cloudmark Acquisition Date, the consideration transferred was $107,283 , net of cash acquired of $31,973 . Of the consideration transferred, $16,700 was held in escrow to secure indemnification obligations, which has not been released as of the filing date of this Annual Report on Form 10-K. The Company incurred $413 in acquisition-related costs which were recorded within operating expenses during the year ended December 31, 2017. Per the terms of the merger agreement, unvested stock options and unvested restricted stock units held by Cloudmark employees were canceled and exchanged for the Company’s unvested stock options and unvested restricted stock units, respectively. The fair value of $91 of these unvested awards was attributed to precombination services and included in consideration transferred. The fair value of $1,180 was allocated to postcombination services. The unvested awards are subject to the recipient’s continued service with the Company, and $1,180 will be recognized ratably as stock-based compensation expense over the required remaining service period. The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Estimated Fair Value Estimated Current assets acquired $ 37,390 N/A Fixed assets acquired 543 N/A Non-current assets acquired 50 N/A Liabilities assumed (4,542 ) N/A Deferred revenue assumed (15,400 ) N/A Customer relationships 15,300 8 Order backlog 1,400 1 Core/developed technology 18,500 4 Deferred tax liability, net (7,905 ) N/A Goodwill 93,920 Indefinite $ 139,256 WebLife Balance, Inc. On November 30, 2017 (the “WebLife Acquisition Date”), pursuant to the terms of a merger agreement, the Company acquired all shares of WebLife Balance, Inc. (“WebLife”), a browser isolation offerings vendor, to extend its advanced threat protection capabilities into personal email, while preserving the privacy of its users. The Company has estimated fair values of acquired tangible assets, intangible assets and liabilities at the WebLife Acquisition Date. The amounts reported are considered provisional as the Company is completing the valuation work to determine the fair value of certain assets and liabilities acquired, largely with respect to working capital adjustments. The results of operations and the provisional fair values of the acquired assets and liabilities assumed have been included in the accompanying consolidated financial statements since the WebLife Acquisition Date. Revenue from WebLife was not material for the year ended December 31, 2017 and due to the continued integration of the combined businesses, it was impractical to determine the earnings. At the WebLife Acquisition Date, the consideration transferred was $48,765 , net of cash acquired of $278 . Of the consideration transferred, $6,203 was held in escrow to secure indemnification obligations, which has not been released as of the filling date of this Annual Report on Form 10-K. The Company incurred $168 in acquisition-related costs which were recorded within operating expenses for the year ended December 31, 2017. Per the terms of the merger agreement, unvested stock options held by WebLife employees were canceled and exchanged for the Company’s unvested awards. The fair value of $333 of these unvested options was attributed to precombination service and included in consideration transferred. The fair value of $1,468 was allocated to postcombination services. The unvested awards are subject to the recipient’s continued service with the Company, and $1,468 will be recognized ratably as stock-based compensation expense over the required remaining service period. Also, as part of the merger agreement, 107 shares of the Company’s common stock were deferred for certain key employees with the total fair value of $9,652 (see Note 9), which was not included in the purchase price. The deferred shares are subject to forfeiture if employment terminates prior to the lapse of the restrictions, and their fair value is expensed as stock-based compensation expense over the vesting period. The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Estimated Fair Value Estimated Current assets acquired $ 534 N/A Fixed assets acquired 23 N/A Liabilities assumed (88 ) N/A Deferred revenue assumed (700 ) N/A Customer relationships 600 5 Core/developed technology 16,600 5 Deferred tax liability, net (4,440 ) N/A Goodwill 36,514 Indefinite $ 49,043 2016 Acquisitions FireLayers On October 24, 2016 (the “FireLayers Acquisition Date”), pursuant to the terms of a share purchase agreement, the Company acquired all shares of FireLayers, Ltd. (“FireLayers”), a provider of solutions for organizations to control and protect their cloud applications. With this acquisition, the Company will extend Targeted Attack Protection to SaaS applications, enabling customers to protect their employees using SaaS applications from advanced malware. The Company has estimated fair values of acquired tangible assets, intangible assets and liabilities at the FireLayers Acquisition Date. The results of operations and the fair values of the acquired assets and liabilities assumed have been included in the accompanying consolidated financial statements since the FireLayers Acquisition Date. The total purchase price was $45,616 , net of cash acquired of $210 . Of the cash consideration paid, $7,740 was held in escrow to secure indemnification obligations, which has not been released as of the filing date of this Annual Report on Form 10-K. The Company incurred $827 in acquisition-related costs which were recorded within operating expenses for the year ended December 31, 2016. Per the terms of the share purchase agreement, unvested stock options held by FireLayers employees were canceled and exchanged for unvested stock options to purchase shares of the Company's common stock. The fair value of $1,326 of these unvested options, which are subject to the recipient’s continued service with the Company and thus excluded from the purchase price, are recognized ratably as stock-based compensation expense over the required service period. Also, as part of the share purchase agreement, 111 shares of restricted stock were issued to certain key employees with the total fair value of $8,669 (see Note 9), which was not included in the purchase price. The shares of restricted stock are subject to forfeiture if employment terminates prior to the lapse of the restrictions, and their fair value is expensed as stock-based compensation expense over the vesting period. The following table summarizes the fair values of acquired assets and liabilities: Fair Value Estimated Current assets acquired $ 432 N/A Developed technology 22,600 5 Fixed assets 52 N/A Deferred tax liability, net (3,530 ) N/A Other liabilities assumed (540 ) N/A Additional-paid-in-capital (176 ) N/A Goodwill 26,988 Indefinite $ 45,826 Return Path On August 24, 2016 (the “Return Path Acquisition Date”), pursuant to the terms of an asset purchase agreement, the Company acquired Return Path, Inc.’s (“Return Path”) Email Fraud Protection (“EFP”) business unit. Return Path’s EFP business, which provides standards-based DMARC authentication and proprietary sender-analysis capabilities, will be integrated into the Company’s suite of email protection solutions to further enhance its business email compromise capabilities. The Company has estimated fair values of acquired tangible assets, intangible assets and liabilities at the Return Path Acquisition Date. The results of operations and the fair values of the acquired assets and liabilities assumed have been included in the accompanying consolidated financial statements since the Return Path Acquisition Date. The Company recorded $1,025 revenue from Return Path for the year ended December 31, 2016. Pro forma results of operations have not been presented because the acquisition was not material to the Company’s consolidated financial statements. The total purchase price was $17,513 , of which $9,162 was classified and recorded as contingent consideration on the balance sheet as of the Return Path Acquisition Date. The Company expects to pay the contingent consideration within two years depending on the timing of contract assignments following the Return Path acquisition date and the maximum potential payment amount could be up to $9,644 . The Company incurred $406 in acquisition related costs which were recorded within operating expenses for the year ended December 31, 2016. The fair value of the contingent consideration liability was determined as of the acquisition date using unobservable inputs. These inputs include the estimated amount and timing of future contract assignments, the probability of success and a risk-adjusted discount rate to adjust the probability-weighted cash flows to present value. The following table summarizes the fair values of acquired assets and liabilities: Fair Value Estimated Customer relationships $ 7,600 6 Developed technology 3,900 4 Order backlog 700 1 Deferred revenue assumed (1,200 ) N/A Goodwill 6,513 Indefinite $ 17,513 2015 Acquisitions In the fourth quarter of the year ended December 31, 2015, the Company made two acquisitions that were accounted for as business combinations. The results of operations and the fair values of the acquired assets and liabilities assumed have been included in the accompanying consolidated financial statements from the respective date of each acquisition. Pro forma results of operations for these acquisitions have not been presented because the Company does not consider these acquisitions to be material, individually or in the aggregate, to the Company’s consolidated financial statements. The aggregate purchase price was $11,568 . The Company incurred $355 in acquisition related costs which were recorded within operating expenses for the year ended December 31, 2015. The following table summarizes the fair values of acquired tangible and intangible assets, liabilities and goodwill: Fair Value Estimated Current assets acquired $ 414 N/A Fixed assets acquired 73 N/A Liabilities assumed (234 ) N/A Deferred revenue assumed (1,400 ) N/A Deferred tax liability, net (45 ) N/A Customer relationships 2,800 7 Order Backlog 900 3 Developed technology 3,000 4 Goodwill 6,060 Indefinite $ 11,568 Marble Security, Inc. On July 22, 2015 (the “Marble Acquisition Date”), pursuant to the terms of an asset purchase agreement, the Company acquired certain assets of Marble Security, Inc. (“Marble”). The Marble mobile security technology proactively removes malicious mobile applications by leveraging its tight integration with the leading enterprise mobility management platforms, including MobileIron and AirWatch by VMware. The acquisition extends the Company’s threat intelligence and advanced threat protection for email and social media security into the realm of mobile devices. The results of operations and the fair values of the acquired assets and liabilities assumed have been included in the accompanying consolidated financial statements since the Marble Acquisition Date. Revenue from Marble was not material for the year ended December 31, 2015, and due to the continued integration of the combined businesses, it was impractical to determine the earnings. Pro forma results of operations have not been presented because the acquisition was not material to the Company’s results of operations. The total purchase price was $8,500 . The Company incurred $277 in acquisition related costs which were recorded within operating expenses for the year ended December 31, 2015. The following table summarizes the fair values of acquired tangible, intangible assets and goodwill: Fair Value Estimated Fixed assets acquired $ 25 N/A Developed technology 7,300 4 Goodwill 1,175 Indefinite $ 8,500 Emerging Threats Pro, LLC On March 6, 2015 (the “Emerging Threats Acquisition Date”), pursuant to the terms of a purchase agreement, the Company acquired 100% of membership interests in Emerging Threats Pro, LLC (“Emerging Threats”). Based in Indianapolis, Indiana, Emerging Threats provides threat intelligence solutions to help protect networks from known or potentially malicious threats. With this acquisition, the Company integrated Emerging Threat’s advanced threat intelligence solutions with its existing Targeted Attack Protection and Threat Response security solutions to advance threat detection and response across the completed attack chain. The combined technology provides customers with deeper insight into cyberthreats, enabling them to react faster to inbound cyberattacks, and to identify, block, and disable previously undetected malware already embedded in their organizations. The results of operations and the fair values of the acquired assets and liabilities assumed have been included in the accompanying consolidated financial statements since the Emerging Threat Acquisition Date. Revenue from Emerging Threats was $2,477 for the year ended December 31, 2015, and due to the continued integration of the combined businesses, it was impractical to determine the earnings. The total purchase price was $31,803 , net of cash acquired of $52 . The Company incurred $277 in acquisition-related costs which were recorded within operating expenses for the year ended December 31, 2015. The following table summarizes the fair values of tangible and intangible assets acquired, liabilities assumed and goodwill: Fair Value Estimated Current assets acquired $ 1,275 N/A Fixed assets acquired 174 N/A Liabilities assumed (448 ) N/A Deferred revenue assumed (700 ) N/A Holdback liability to the sellers (3,662 ) N/A Trade names 200 2 Customer relationships 4,200 7 Order Backlog 200 1 Developed technology 7,900 7 Goodwill 19,054 Indefinite $ 28,193 Pro Forma Financial Information (unaudited) The following unaudited pro forma financial information presents the combined results of operations for the years ended December 31, 2017 , 2016 and 2015 as though the acquisitions that occurred during the reporting periods had occurred as of the beginning of the comparable prior annual reporting periods, with adjustments to give effect to pro forma events that are directly attributable to the acquisitions such as amortization expense of acquired intangible assets, stock-based compensation directly attributable to the acquisitions and acquisition-related transaction costs. The unaudited pro forma results do not include immaterial acquisitions made in the fourth quarter of 2015 and the acquisitions of Return Path and Marble, and do not reflect any operating efficiencies or potential cost savings which may result from the consolidation of the operations of the Company and acquisitions. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisitions had occurred at the beginning of the period presented, nor are they indicative of future results of operations: Year Ended December 31, 2017 2016 2015 Total revenue $ 550,314 $ 414,539 $ 264,904 Net loss $ (89,515 ) $ (121,147 ) $ (111,440 ) Basic and diluted net loss per share $ (2.02 ) $ (2.89 ) $ (2.80 ) The unaudited pro forma financial information includes acquisition-related transaction costs of $581 for the year ended December 31, 2017 . |
Concentration of Risks
Concentration of Risks | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risks | Concentration of Risks Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents, short-term investments and accounts receivable. The Company limits its concentration of risk in cash equivalents and short-term investments by diversifying its investments among a variety of industries and issuers and by limiting the average maturity to one year or less. The Company’s professional portfolio managers adhere to this investment policy as approved by the Company’s Board of Directors. The Company’s investment policy is to invest only in fixed income investments denominated and payable in U.S. dollars. Investment in obligations of the U.S. government and its agencies, money market instruments, commercial paper, certificates of deposit, bankers’ acceptances, corporate bonds of U.S. companies, municipal securities and asset backed securities are allowed. The Company does not invest in auction rate securities, futures contracts, or hedging instruments. The Company’s accounts receivables are derived from revenue earned from customers primarily located in the United States of America. The Company performs periodic evaluations of its customers’ financial condition and generally does not require its customers to provide collateral or other security to support accounts receivable, and maintains an allowance for doubtful accounts. Credit losses historically have not been material. During the year ended December 31, 2017 , one partner accounted for 12% of total revenue, though the partner sold to a number of end-users, none of which accounted for more than 10% of our total revenue in 2017 . During the years ended December 31, 2016 and 2015 , no individual customers accounted for more than 10% of total revenue. One customer accounted for 11% and 21% of total accounts receivable as of December 31, 2017 and 2016 , respectively. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Balance Sheet Components Property and equipment at December 31, 2017 and December 31, 2016 consist of the following: Useful Life (in years) December 31, 2017 2016 Computer equipment 2 to 4 $ 125,296 $ 92,462 Software 2 to 5 2,647 2,266 Furniture 5 2,523 1,532 Office equipment 2 to 5 587 467 Leasehold improvements 5 years, or lease term, if shorter 10,632 6,198 Other 2 59 59 Construction in progress 1,854 1,483 143,598 104,467 Less: Accumulated depreciation (69,981 ) (51,944 ) $ 73,617 $ 52,523 Property and equipment acquired under capital leases: December 31, 2017 2016 Computer equipment $ 453 $ 453 Less: Accumulated depreciation (372 ) (341 ) $ 81 $ 112 The allowance for doubtful accounts receivable was not material as of December 31, 2017 and 2016. Depreciation expense for the years ended December 31, 2017, 2016 and 2015 was approximately $23,591 , $17,131 , and $12,644 , respectively. This included depreciation expense for assets under capital leases of $31 , $31 and $23 for the years ended December 31, 2017, 2016 and 2015 , respectively. Accrued liabilities at December 31, 2017 and December 31, 2016 consisted of the following: December 31, 2017 2016 Accrued compensation $ 37,028 $ 30,295 ESPP contributions 2,339 1,701 Customer deposits 570 173 Accrued royalties 780 754 Acquisition-related contingent consideration 634 7,629 Other 22,575 10,213 $ 63,926 $ 50,765 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The goodwill activity and balances are presented below: December 31, 2017 2016 Opening balance $ 167,270 $ 133,769 Add: Goodwill from acquisitions 130,434 33,501 Closing balance $ 297,704 $ 167,270 Intangible Assets Intangible assets consisted of the following: December 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 118,869 $ (52,554 ) $ 66,315 $ 83,769 $ (38,042 ) $ 45,727 Customer relationships 33,600 (5,918 ) 27,682 17,943 (3,228 ) 14,715 Trademark and patents 930 (825 ) 105 930 (667 ) 263 Order backlog 2,300 (800 ) 1,500 1,600 (597 ) 1,003 $ 155,699 $ (60,097 ) $ 95,602 $ 104,242 $ (42,534 ) $ 61,708 Amortization expense of intangibles totaled $18,506 , $14,421 and $12,256 during the years ended December 31, 2017, 2016 and 2015 , respectively. Future estimated amortization costs of intangible assets as of December 31, 2017 are presented below: Year Ended December 31, 2018 $ 25,990 2019 21,450 2020 19,199 2021 16,898 2022 6,535 Thereafter 5,530 $ 95,602 |
Fair Value Measurements and Inv
Fair Value Measurements and Investments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Investments | Fair Value Measurements and Investments Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. A hierarchy for inputs used in measuring fair value has been defined to minimize the use of unobservable inputs by requiring the use of observable market data when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on active market data. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs into three broad levels: • Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities. The Company’s Level 1 assets generally consist of money market funds. • Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. The Company’s Level 2 assets and liabilities generally consist of corporate debt securities, commercial papers, U.S. agency and Treasury securities and convertible senior notes. • Level 3: Unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation. In connection with the acquisition of Return Path, a liability was recognized on Return Path Acquisition Date for the estimate of the fair value of the Company’s contingent payment. The Company determined the fair value of the Acquisition-related contingent liability based on the estimated amount and timing of future contract assignments, and the probability of success. This fair value measurement is based on significant inputs not observable in the market and thus represent Level 3 measurement. The following tables summarize, for each category of assets or liabilities carried at fair value, the respective fair value as of December 31, 2017 and December 31, 2016 and the classification by level of input within the fair value hierarchy: December 31, 2017 Total Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 231,828 $ 231,828 $ — $ — Commercial paper 7,995 — 7,995 — U.S. agency securities 1,996 — 1,996 — Short-term investments: Corporate debt securities 11,600 — 11,600 — Commercial paper 27,939 — 27,939 — U.S. agency securities 3,991 — 3,991 — U.S. Treasury securities 1,996 — 1,996 — Total financial assets $ 287,345 $ 231,828 $ 55,517 $ — Liabilities Acquisition-related contingent consideration $ 634 $ — $ — $ 634 December 31, 2016 Total Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 304,020 $ 304,020 $ — $ — Corporate debt securities 2,139 — 2,139 — Commercial paper 13,243 — 13,243 — Short-term investments: Corporate debt securities 24,450 — 24,450 — Commercial paper 22,979 — 22,979 — U.S. agency securities 1,946 — 1,946 — U.S. Treasury securities 1,950 — 1,950 — Total financial assets $ 370,727 $ 304,020 $ 66,707 $ — Liabilities Acquisition-related contingent consideration $ 8,233 $ — $ — $ 8,233 Based on quoted market prices as of December 31, 2017 , the fair value of the 0.75% Convertible Senior Notes (Note 8) was approximately $285,453 , determined using Level 2 inputs as they are not actively traded in markets. The following table represents a reconciliation of the Acquisition-related contingent consideration liability measured at fair value on a recurring basis, using significant unobservable inputs (Level 3): Amount Balance as of December 31, 2015 $ — Additions during the period 9,162 Payments during the period (260 ) Adjustments to fair value during the period recorded in General and administrative expenses (669 ) Balance as of December 31, 2016 8,233 Additions during the period — Payments during the period (6,066 ) Adjustments to fair value during the period recorded in General and administrative expenses (1,533 ) Balance as of December 31, 2017 $ 634 The carrying amounts of the Company's cash equivalents, accounts receivable and accounts payable approximate their fair values due to their short maturities. Investments The cost and fair value of the Company’s cash, cash equivalents and available-for-sale investments as of December 31, 2017 and December 31, 2016 were as follows: December 31, 2017 Amortized Cost Unrealized Unrealized Fair Cash and cash equivalents: Cash $ 44,253 $ — $ — $ 44,253 Money market funds 231,828 — — 231,828 Commercial paper 7,995 — — 7,995 U.S. agency securities 1,996 — — 1,996 Total $ 286,072 $ — $ — $ 286,072 Short-term investments: Corporate debt securities $ 11,607 $ — $ (7 ) $ 11,600 Commercial paper 27,939 — — 27,939 U.S. agency securities 3,992 — (1 ) 3,991 U.S. Treasury securities 1,997 — (1 ) 1,996 Total $ 45,535 $ — $ (9 ) $ 45,526 December 31, 2016 Amortized Cost Unrealized Unrealized Fair Cash and cash equivalents: Cash $ 26,024 $ — $ — $ 26,024 Money market funds 304,020 — — 304,020 Corporate debt securities 2,140 — (1 ) 2,139 Commercial papers 13,243 — — 13,243 Total $ 345,427 $ — $ (1 ) $ 345,426 Short-term investments: Corporate debt securities $ 24,458 $ — $ (8 ) $ 24,450 Commercial papers 22,979 — — 22,979 U.S. agency securities 1,945 1 — 1,946 U.S. Treasury securities 1,950 — — 1,950 Total $ 51,332 $ 1 $ (8 ) $ 51,325 As of December 31, 2017 and December 31, 2016 , all investments mature in less than one year . Fair values for marketable securities are based on quoted market prices for the same or similar instruments. The Company reviews its investments on a quarterly basis to identify and evaluate investments that have an indication of possible impairment and has determined that no other-than-temporary impairments were required to be recognized during the years ended December 31, 2017, 2016 and 2015 . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company leases certain of its facilities under non-cancellable operating leases with various expiration dates through 2027 . Premises rent expense was $8,010 , $5,054 and $3,831 for the years ended December 31, 2017, 2016 and 2015 , respectively. Capital Leases In July 2012, the Company entered into two lease agreements to lease certain office equipment with expiration dates in July and October 2015. The leases bear an annual interest rate of 4.50% . Also, in July 2015, the Company entered into a new lease agreement (the “July 2015 Lease”) to lease certain office equipment with expiration in August 2020. The July 2015 Lease bears an annual interest rate of 6.5% . All leases are secured by fixed assets used in the Company’s office locations. At December 31, 2017 , future annual minimum lease payments under noncancellable operating and capital leases were as follows: Capital Operating 2018 $ 39 $ 17,985 2019 37 15,625 2020 21 7,661 2021 — 4,924 2022 — 4,919 Thereafter — 6,692 Total minimum lease payments 97 $ 57,806 Less: Amount representing interest (8 ) Present value of capital lease obligations 89 Less: Current portion (34 ) Long-term portion of capital lease obligations $ 55 Purchase Commitments As of December 31, 2017, the Company’s minimum purchase commitments for products and services were $35,861 , of which $17,417 represent long-term purchase commitments through the year ending December 31, 2020. Contingencies Under the indemnification provisions of the Company’s customer agreements, the Company agrees to indemnify and defend and hold harmless its customers against, among other things, infringement of any patent, trademark or copyright under any country’s laws or the misappropriation of any trade secret arising from the customers’ legal use of the Company’s solutions. The exposure to the Company under these indemnification provisions is generally limited to the total amount paid by the customers under the applicable customer agreement. However, certain indemnification provisions potentially expose the Company to losses in excess of the aggregate amount paid to the Company by the customer under the applicable customer agreement. To date, there have been no claims against the Company or its customers pursuant to these indemnification provisions. Legal Contingencies From time to time, the Company may be involved in legal proceedings and subject to claims in the ordinary course of business. For lawsuits where the Company is the defendant, the Company is in the process of defending these litigation matters, and while there can be no assurances and the outcomes of these matters are currently not determinable, the Company currently believes that there are no existing claims or proceedings that are likely to have a material adverse effect on the Company's financial position, results of operations or cash flows. |
Convertible Senior Notes
Convertible Senior Notes | 12 Months Ended |
Dec. 31, 2017 | |
Senior Notes [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes 0.75% Convertible Senior Notes due June 2020 On June 17, 2015 , the Company issued $200,000 principal amount of 0.75% Convertible Senior Notes (the “ 0.75% Notes”) due 2020 in a private offering to qualified institutional buyers (“Holders”) pursuant to Rule 144A under the Securities Act of 1934, as amended (the “Securities Act”). The initial Holders of the 0.75% Notes also had an option to purchase an additional $30,000 in principal amount which was exercised in full. The net proceeds after the agent’s discount and issuance costs of $6,581 from the 0.75% Notes offering were approximately $223,419 . The Company uses the net proceeds for working capital and general corporate purposes, which may include funding the Company’s operations, capital expenditures, and potential acquisitions of businesses, products or technologies believed to be of strategic importance. The 0.75% Notes bear interest at 0.75% per year, payable semi-annually in arrears every June 15 and December 15, beginning on December 15, 2015. The 0.75% Notes are unsecured and rank senior in right of payment to any indebtedness expressly subordinated in right of payment to the 0.75% Notes. They rank equally with the Company’s other existing and future unsecured indebtedness that is not subordinated and are structurally subordinated to any current or future secured indebtedness to the extent of the value of the assets securing the indebtedness and other liabilities of the Company’s subsidiaries. The initial conversion rate is 12.3108 shares of the Company’s common stock per $1 principal amount of notes which equates to 2,831 shares of common stock, or a conversion price equivalent of $81.23 per share of common stock. Throughout the term of the 0.75% Notes, the conversion rate may be adjusted upon the occurrence of certain events, such as the payment of cash dividends or issuance of stock warrants. The 0.75% Notes mature on June 15, 2020 , unless repurchased, redeemed or converted in accordance with their terms prior to such date. At the Company’s option, on or after June 20, 2018 , the Company will be able to redeem all or a portion of the 0.75% Notes at 100% of the principal amount, plus any accrued and unpaid interest, under certain conditions. The Company may redeem the 0.75% Notes in shares of the Company’s common stock, cash, or some combination of each. Prior to December 15, 2019 , the 0.75% Notes will be convertible at the option of the Holders only upon the satisfaction of certain conditions and during certain periods if any of the following events occur: • during the calendar quarter commencing after September 30, 2015, if the last reported sale price of the Company’s common stock is greater than or equal to 130% of the applicable conversion price on each such trading day for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the preceding calendar quarter; • during the 5 business day period after any 5 consecutive trading day period in which the trading price, as defined, per $1 principal amount of the 0.75% Notes for each trading day of such measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such trading day; • upon a notice of redemption by the Company; or • upon the occurrence of specified corporate transactions. Subsequent to December 15, 2019 , Holders may convert their 0.75% Notes at the applicable conversion rate at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Holders of the 0.75% Notes also have the right to require the Company to repurchase all or a portion of the 0.75% Notes at 100% of the principal amount, plus accrued and unpaid special interest, if any, upon the occurrence of certain fundamental changes to the Company. In accordance with the authoritative accounting guidance, the Company allocated the total amount of the 0.75% Notes into liability and equity components. The carrying value of the liability component at issuance was calculated as the present value of its cash flows using a discount rate of 6.5% based on the blended rate between the yield rate for a Moody’s B1 rating and the average debt rate for comparable convertible transactions from similar companies. The difference between the 0.75% Notes principal and the carrying value of the liability component, representing the value of conversion premium assigned to the equity component, was recorded as an increase to additional paid in capital and as a debt discount on the issuance date. The equity component is being accreted using the effective interest rate method over the period from the issuance date through June 15, 2020 as a non-cash charge to interest expense. The amount recorded to additional paid in capital is not remeasured as long as it continues to meet the conditions for equity classification. Upon issuance of the 0.75% Notes, the Company recorded $174,359 as debt and $55,641 as additional paid in capital within stockholders’ equity. Additionally, the debt discount and issuance costs were allocated based on the total amount incurred to the liability and equity components using the same proportions as the proceeds from the 0.75% Notes. The equity issuance costs of $1,592 were recorded as a decrease to additional paid-in capital at the issuance date. 1.25% Convertible Senior Notes due December 2018 On December 11, 2013 , the Company issued $175,000 principal amount of 1.25% Convertible Senior Notes (the “ 1.25% Notes,” and together with the 0.75% Notes, the “Notes”) due 2018 in a private offering to Holders pursuant to Rule 144A under the Securities Act. The initial Holders of the 1.25% Notes also had an option to purchase an additional $26,250 in principal amount which was exercised in full. The net proceeds after the agent’s discount and issuance costs of $5,803 from the 1.25% Notes offering were approximately $195,446 . The Company used the net proceeds for working capital and general corporate purposes, which included funding the Company’s operations, capital expenditures, and potential acquisitions of businesses, products or technologies believed to be of strategic importance. The 1.25% Notes bore interest at 1.25% per year, payable semi-annually in arrears every June 15 and December 15, beginning on June 15, 2014. In accordance with the authoritative accounting guidance, the Company allocated the total amount of the 1.25% Notes into liability and equity components. The carrying value of the liability component at issuance was calculated as the present value of its cash flows using a discount rate of 6.5% based on the blended rate between the yield rate for a Moody’s B1-rating and the average debt rate for comparable convertible transactions from similar companies. The difference between the 1.25% Notes principal and the carrying value of the liability component, representing the value of conversion premium assigned to the equity component, was recorded as an increase to additional paid in capital and as a debt discount on the issuance date. The equity component was being accreted using the effective interest rate method over the period from the issuance date through the extinguishment date as a non-cash charge to interest expense. Upon issuance of the Notes, the Company recorded $156,672 as debt and $44,578 as additional paid in capital within stockholders’ equity. Additionally, the discount and issuance costs were allocated based on the total amount incurred to the liability and equity components using the same proportions as the proceeds from the 1.25% Notes. The equity issuance costs of $1,285 were recorded as a decrease to additional paid-in capital at the issuance date. During the year ended December 31, 2017, $201,250 of the principal amount of the 1.25% Notes was converted into 5,159 shares of common stock, with the remaining $14 paid in cash. The shares of common stock had a fair value of $473,176 at the time of the conversion. This resulted in a $2,696 loss on extinguishment that is included in interest expense in the Consolidated Statement of Operations. The loss on extinguishment was calculated as the difference between the fair value amount allocated to the liability component and net carrying amount of the liability component. The following tables represent the carrying values of all Notes as of December 31, 2017 and 2016 : December 31, 2017 0.75% Notes 1.25% Notes Total Liability component: Principal $ 230,000 $ — $ 230,000 Less: debt discount and issuance costs, net of amortization (32,142 ) — (32,142 ) Net carrying amount $ 197,858 $ — $ 197,858 Equity component (1) $ 54,049 $ — $ 54,049 December 31, 2016 0.75% Notes 1.25% Notes Total Liability component: Principal $ 230,000 $ 201,250 $ 431,250 Less: debt discount and issuance costs, net of amortization (43,896 ) (20,813 ) (64,709 ) Net carrying amount $ 186,104 $ 180,437 $ 366,541 Equity component (1) $ 54,049 $ 43,293 $ 97,342 _______________________________________________________________________________ (1) Recorded on the consolidated balance sheets as additional paid-in capital, net of the issuance costs in equity For the years ended December 31, 2017, 2016 and 2015 , the Company incurred the following interest expense and loss on conversion related to the Notes: 2017 2016 2015 Interest expense related to contractual interest coupon $ 4,123 $ 4,240 $ 3,441 Amortization of debt discount and issuance costs 21,789 20,842 14,933 Loss on conversion 2,696 — — Total $ 28,608 $ 25,082 $ 18,374 |
Equity Award Plans
Equity Award Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Award Plans | Equity Award Plans Stock-Based Compensation Plans On March 30, 2012, the Board of Directors and the Company’s stockholders approved the 2012 Equity Incentive Plan (the "2012 Plan"), which became effective in April 2012. The Company has six equity incentive plans: the Company’s 2002 stock option plan (the “2002 Plan”), the 2012 Plan, and four plans assumed by the Company upon various business acquisitions. The assumed plans are the Cloudmark plan, the WebLife plan, and two FireLayers plans. Upon the Company’s initial public offering, all shares that were reserved under the 2002 Plan but not issued, and shares issued but subsequently returned to the plan through forfeitures, cancellations and repurchases became part of the 2012 Plan and no further shares will be granted pursuant to the 2002 Plan. No further shares will be granted pursuant to the assumed plans. All outstanding stock awards under the 2002 Plan, the assumed plans and 2012 Plan will continue to be governed by their existing terms. Under the 2012 Plan, the Company has the ability to issue incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), restricted stock awards, stock bonus awards, stock appreciation rights (“SARs”), restricted stock units (“RSUs”), and performance stock units (“PSUs”). The 2012 Plan also allows direct issuance of common stock to employees, outside directors and consultants at prices equal to the fair market value at the date of grant of options or issuance of common stock. Additionally, the 2012 Plan provides for the grant of performance cash awards to employees, directors and consultants. The Company has the right to repurchase any unvested shares (at the option exercise price) of common stock issued directly or under option exercises. The right of repurchase generally expires over the vesting period. Stock bonus and other liability awards are accounted for as liability-classified awards, because the obligations are based predominantly on fixed monetary amounts that are generally known at the inception of the obligation, to be settled with a variable number of shares of the Company’s common stock. Under the equity incentive plans, the term of an option grant shall not exceed ten years from the date of its grant and options generally vest over a three to four -year period, with vesting on a monthly or annual interval. Under the 2012 Plan, 20,316 shares of common stock are reserved for issuance to eligible participants. As of December 31, 2017 , 5,283 shares were available for future grant. Restricted stock awards generally vest over a four -year period. The Company net-share settles equity awards held by employees by withholding shares upon vesting to satisfy tax withholding obligations. The shares withheld to satisfy employee tax withholding obligations are returned to the Company’s 2012 Plan and will be available for future issuance. Payments for employee’s tax obligations to the tax authorities are recognized as a reduction to additional paid-in capital and reflected as financing activities in the Company’s consolidated statements of cash flows. Stock Options The fair value of options granted is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term (weighted-average period of time that the options granted are expected to be outstanding), the volatility of the common stock price and the assumed risk-free interest rate. Upon adoption of ASU 2016-09 in the year ended December 2017, the Company has made an accounting policy election to account for forfeitures as they occur. No options were granted during the year ended December 31, 2017 . The weighted average fair value of stock options granted to employees during the years ended December 31, 2016 and 2015 was $24.04 and $28.20 , respectively. The fair values were estimated on the grant dates using the Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2016 2015 Expected life (in years) 5.31 - 6.08 5.31 - 6.08 Volatility 45% 50% - 52% Risk-free interest rate 1.3% - 1.4% 1.6% - 1.8% Dividend yield —% —% The estimate for expected life of options granted reflects the midpoint of the vesting term and the contractual life computed utilizing the simplified method as allowed by the SEC staff. The Company does not have significant historical share option exercise experience and hence considers the expected term assumption calculated using the simplified method to be reasonable. Starting January 1, 2016, the expected volatility of the Company's common stock is based on the Company's historical volatility. Prior to January 1, 2016, the common stock price volatility was determined based on the historical average volatilities of the common stock of a group of publicly-traded peer companies that operate in a similar industry as the Company did not have sufficient trading history for its common stock. The risk-free interest rate used was the Federal Reserve Bank's constant maturities interest rate commensurate with the expected life of the options in effect at the time of the grant. The expected dividend yield was zero , as the Company does not anticipate paying a dividend within the relevant time frame. The Company realized no income tax benefit from stock option exercises in each of the periods presented due to recurring losses and the valuation allowances for deferred tax assets. Stock option activity is as follows: Shares subject to Options Outstanding Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Balance at December 31, 2014 5,288 $ 11.06 6.31 $ 196,608 Options granted 284 57.47 Options exercised (1,429 ) 8.31 Options forfeited and canceled (101 ) 19.11 Balance at December 31, 2015 4,042 15.10 5.77 $ 201,736 Options assumed per FireLayers acquisition 20 4.33 Options granted 237 54.11 Options exercised (1,089 ) 11.59 Options forfeited and canceled (27 ) 43.15 Balance at December 31, 2016 3,183 18.91 5.39 $ 164,842 Options assumed per business acquisitions 13 20.27 Options exercised (1,126 ) 11.04 Options forfeited and canceled (30 ) 45.54 Balance at December 31, 2017 2,040 $ 22.88 5.17 $ 134,511 Exercisable, December 31, 2017 1,809 $ 19.37 4.83 $ 125,608 Vested and expected to vest, December 31, 2017 2,040 $ 22.88 5.17 $ 134,511 The total intrinsic value of options exercised was $82,131 , $58,061 and $72,993 , for the years ended December 31, 2017, 2016 and 2015 , respectively. Total cash proceeds from such option exercises were $12,383 , $12,620 and $11,868 for the years ended December 31, 2017, 2016 and 2015 , respectively. The grant date fair value of options that vested was $7,450 , $9,106 and $9,520 during the years ended December 31, 2017, 2016 and 2015 , respectively. As of December 31, 2017 , the Company had unrecognized stock-based compensation expense of $7,341 related to stock options that will be recognized, over the average remaining vesting term of the options of 1.65 years. Restricted Stock Units and Performance Stock Units A following table summarizes the activity of RSUs and PSUs: RSUs and PSUs Outstanding Number of Shares Granted Fair Value Per Unit Awarded and unvested at December 31, 2014 2,934 $ 37.45 Awards granted 1,541 61.48 Awards vested (897 ) 38.70 Awards forfeited (267 ) 41.89 Awarded and unvested at December 31, 2015 3,311 47.94 Awards granted 1,605 64.08 Awards vested (1,116 ) 44.73 Awards forfeited (335 ) 51.40 Awarded and unvested at December 31, 2016 3,465 56.11 Awards assumed per business acquisition 8 91.10 Awards granted 1,865 84.91 Awards vested (1,320 ) 52.36 Awards forfeited (478 ) 63.44 Awarded and unvested at December 31, 2017 3,540 $ 71.77 As of December 31, 2017 , there was $197,681 of unamortized stock-based compensation expense related to unvested RSUs, which are expected to be recognized over a weighted average period of 2.90 years. The Company granted 177 , 146 and 189 PSUs in the years ended December 31, 2017, 2016 and 2015 , respectively. The PSU vesting conditions were based on individual performance targets. Unamortized stock-based compensation expense was $16,367 as of December 31, 2017 . Stock Bonus Awards and Other Liability Awards The total accrued liability for the stock bonus awards and other liability awards was $8,502 and $7,855 as of December 31, 2017 and 2016 , respectively. During the years ended December 31, 2017, 2016 and 2015 , 85 , 93 and 30 shares of common stock earned under the stock bonus program were issued. Stock-based compensation expense related to stock bonus program were $6,616 , $5,288 and $3,792 , respectively, for the years ended December 31, 2017, 2016 and 2015 . In March 2015, the Company issued liability awards with a fair value of $6,885 , which vest over three years period and are subject to continuous service and other conditions. The liability awards will be settled with a variable number of shares of the Company’s common stock. During the year ended December 31, 2017 and December 31, 2016 , 29 and 45 shares were vested and issued. The Company recognized $2,293 , $2,299 and $1,884 of stock-based compensation expense related to these liability awards in the years ended December 31, 2017, 2016 and 2015 . Employee Stock Purchase Plan On March 30, 2012, the Board of Directors and the Company’s stockholders approved the 2012 Employee Stock Purchase Plan (the “ESPP”), which became effective in April 2012. A total of 745 shares of the Company’s common stock were initially reserved for future issuance under the ESPP. The number of shares reserved for issuance under the ESPP will increase automatically on January 1 of each of the first eight years commencing with 2013 by the number of shares equal to 1% of the Company’s shares outstanding on the immediately preceding December 31, but not to exceed 1,490 shares, unless the Board of Directors, in its discretion, determines to make a smaller increase. As of December 31, 2017 , there were 1,608 shares of the Company’s common stock available for future issuance under the ESPP. The fair value of the option component of the ESPP shares was estimated at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions: Year ended December 31, 2017 2016 2015 Expected life (in years) 0.5 0.5 0.5 Volatility 29% - 37% 37% - 48% 42% - 47% Risk-free interest rate 0.76% - 1.16% 0.38% - 0.45% 0.08% - 0.33% Dividend yield —% —% —% The Company issued 183 shares, 200 shares and 161 shares under the ESPP in the years ended December 31, 2017, 2016 and 2015 , respectively, at a weighted average exercise price per share of $73.02 , $45.65 , and $41.84 , respectively. As of December 31, 2017 , the Company expects to recognize $1,864 of the total unamortized compensation cost related to employee purchases under the ESPP over a weighted average period of 0.37 years. Restricted Stock and Deferred Shares The Company granted 54 shares of restricted stock in the fourth quarter of 2014 to certain key employees with a total fair value of $2,357 and two -year cliff vesting in 2016. The shares fully vested in 2016. The Company granted 111 shares of restricted stock in 2016 to certain key employees with a total fair value of $8,669 with annual vesting term of three years . The Company recognized $2,887 and $546 of stock based compensation expense in 2017 and 2016, respectively. As of December 31, 2017 , there was $5,236 of unamortized stock-based compensation expense related to the unvested shares of restricted stock. The shares of restricted stock are subject to forfeiture if employment terminates prior to the lapse of the restrictions, and are expensed over the vesting period. They are considered issued and outstanding shares of the Company at the grant date and have the same rights as other shares of common stock. As part of the Weblife acquisition, 107 shares were deferred for certain key employees with the total fair value of $9,652 , and a vesting period between three and four years . The Company recognized $205 of stock based compensation in 2017. As of December 31, 2017, there was $9,447 of unamortized stock-based compensation expense related to the unvested deferred shares. The deferred shares are subject to forfeiture if employment terminates prior to the lapse of the deferral date, and are expensed over the vesting period. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share Basic net loss per share of common stock is calculated by dividing the net loss by the weighted‑average number of shares of common stock outstanding for the period. The weighted‑average number of shares of common stock used to calculate basic net loss per share of common stock excludes those shares subject to repurchase related to stock options or restricted stock that were exercised or issued prior to vesting as these shares are not deemed to be issued for accounting purposes until they vest. Diluted net loss per share of common stock is computed by dividing the net loss using the weighted‑average number of shares of common stock, excluding common stock subject to repurchase, and, if dilutive, potential shares of common stock outstanding during the period. Basic and diluted net loss per common share was the same for all periods presented as the impact of all potentially dilutive securities outstanding was anti-dilutive. The following table presents the potentially dilutive common shares outstanding that were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been anti-dilutive: December 31, 2017 2016 2015 Stock options to purchase common stock 2,040 3,183 4,042 Restricted stock units 3,540 3,465 3,311 Employee stock purchase plan 118 92 81 Common stock subject to repurchase 90 135 54 Stock bonus awards and other liability awards 98 159 174 1.25% Convertible senior notes — 5,158 5,158 0.75% Convertible senior notes 2,831 2,831 2,831 Total 8,717 15,023 15,651 |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Operating segments are reported in a manner consistent with the internal reporting supported and defined by the components of an enterprise about which separate financial information is available, provided and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s Chief Executive Officer reviews financial information presented on a consolidated basis. The Company has one business activity, and there are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Accordingly, the Company determined that it has one operating and reportable segment. The following sets forth total revenue by solutions offered by the Company and by geographic area. Revenue by geographic area is based upon the billing address of the customer: Year Ended December 31, 2017 2016 2015 Total revenue by solution: Protection and Advanced Threat $ 387,695 $ 272,621 $ 183,050 Archiving, Privacy and Governance 127,594 102,875 82,347 Total revenue $ 515,289 $ 375,496 $ 265,397 Year Ended December 31, 2017 2016 2015 Total revenue by geographic area: United States $ 428,775 $ 312,601 $ 218,424 Rest of world 86,514 62,895 46,973 Total revenue $ 515,289 $ 375,496 $ 265,397 The following sets forth long-lived tangible assets by geographic area: December 31, 2017 2016 Long-lived assets: United States $ 66,134 $ 43,789 Rest of world 7,483 8,734 Total long-lived assets $ 73,617 $ 52,523 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The domestic and foreign components of loss before income taxes were as follows for the years ended December 31, 2017, 2016 and 2015 : Year Ended December 31, 2017 2016 2015 Domestic $ (124,727 ) $ (112,904 ) $ (101,453 ) Foreign 30,440 2,682 3,376 Loss before income taxes $ (94,287 ) $ (110,222 ) $ (98,077 ) The (provision for) benefit from income taxes is comprised of: Year Ended December 31, 2017 2016 2015 Current tax expense: Federal $ — $ — $ — State 80 72 54 Foreign 5,923 795 514 Total current 6,003 867 568 Deferred tax expense: Federal (12,268 ) 411 105 State (266 ) — (45 ) Foreign (3,419 ) (292 ) 7 Total deferred (15,953 ) 119 67 (Benefit from) provision for income taxes $ (9,950 ) $ 986 $ 635 As the result of adopting ASU 2016-09, the Company recorded excess tax benefits on a prospective basis starting January 1, 2017 (Note 1). The reconciliation of income tax expense (benefit) at the statutory federal income tax rate of 34% to the income tax provision (benefit) included in the consolidated statements of operations for the years ended December 31, 2017, 2016 and 2015 is as follows: Year Ended December 31, 2017 2016 2015 Tax at federal statutory rate $ (32,058 ) $ (37,476 ) $ (33,346 ) Foreign income tax rate differential (3,076 ) (187 ) (270 ) State, net of federal benefit (3,378 ) (3,478 ) (2,952 ) Stock compensation charges (32,150 ) 3,517 2,393 SubPart F and other permanent items 2,757 1,422 1,434 Provision to return and other 2,480 1,419 749 Research and development credits (7,713 ) (4,464 ) (2,920 ) Uncertain tax positions 5,888 749 561 Impact of Tax Act and other tax law changes 87,495 — — Valuation allowance (30,195 ) 39,484 34,986 (Benefit from) provision for income taxes $ (9,950 ) $ 986 $ 635 Deferred tax assets and liabilities reflect the net tax effects of net operating loss and tax credit carryovers and the temporary differences between the carrying amount of assets and liabilities for financial reporting and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets were as follows: At December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 158,535 $ 119,168 Tax credit carryforwards 24,700 13,966 Research expenditures 859 2,401 Deferred revenue 14,460 13,698 Stock compensation 14,842 18,509 Fixed assets 274 207 Accruals and other 10,107 11,554 Gross deferred tax assets 223,777 179,503 Valuation allowance (194,943 ) (141,398 ) Total deferred tax assets 28,834 38,105 Deferred tax liabilities: Intangible assets and other (12,086 ) (8,793 ) Deferred commissions (7,881 ) (9,545 ) Convertible senior notes (6,857 ) (21,541 ) Total deferred tax liabilities (26,824 ) (39,879 ) Total net deferred tax assets (liabilities) $ 2,010 $ (1,774 ) Non-current deferred income tax assets (included in other long-term assets) $ 2,543 $ 2,121 Non-current deferred income tax liabilities (included in long-term liabilities) $ 533 $ 3,895 The Company records net deferred tax assets to the extent that Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. The valuation allowance increased by approximately $53,545 and $39,489 during the years ended December 31, 2017 and December 31, 2016 , respectively. The change in valuation allowance for the year ended December 31, 2017, includes an increase of $79,336 related to the prospective adoption of ASU 2016-09, an increase of $2,554 related to 2013 convertible notes conversion, and an increase of $1,525 related to the Cloudmark acquisition. In December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act significantly impacts the future ongoing U.S. corporate income tax by, among things, lowering the U.S. corporate income tax rates from 34% to 21% , providing for unlimited net operating loss carry-forward periods, and implementing a territorial tax system. The reduction of the U.S. corporate tax rate required the Company to revalue its U.S. deferred tax assets and liabilities to the recently enacted federal rate of 21% . This transitional impact resulted in a provisional deferred tax benefit of $2,024 in the period ended December 31, 2017 related to a reduction in a US deferred tax liability on certain long-lived acquired intangibles. This transitional impact also resulted in a $87,621 provisional reduction of certain of the Company’s US deferred tax assets which are offset by a full valuation allowance. During the year ended December 31, 2017, the Company recorded a deferred tax benefit of $7,904 and $4,440 related to changes in the Company’s US valuation allowances as a result of the Cloudmark and WebLife acquisitions, respectively. As of December 31, 2017 and December 31, 2016 , the Company had net operating loss carry-forwards for federal income tax purposes of $659,587 and $533,825 , respectively. The federal net operating losses will expire between 2018 and 2037. As of December 31, 2017 and December 31, 2016 , the Company had federal research credit carry-forwards of $16,122 and $9,231 respectively. The federal research and development credits will begin to expire in 2022 . As of December 31, 2017 and December 31, 2016 , the Company had net operating loss carry-forwards for state income tax purposes of approximately $323,013 and $305,493 , respectively. The state net operating losses will continue to expire between 2018 and 2037. As of December 31, 2017 and December 31, 2016 , the Company had research and development credit carry-forwards for state income tax purpose of $18,362 and $11,195 , respectively. The state research and development credits have no expiration period. As of December 31, 2017 , the Company had no net operating losses carry-forwards in non-U.S. locations. As of December 31, 2016 , the Company had net operating losses carry-forwards in non-U.S. locations of approximately $7,045 . The non-US operating losses carry-forwards have no expiration period. In addition, as of December 31, 2017 and December 31, 2016 , the Company had research and development credit carry-forwards in its non-U.S. locations of approximately $2,375 and $2,010 , respectively. The non-U.S. research and development credits will begin to expire in 2031. Utilization of the federal and state net operating losses may be subject to substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Analyses have been conducted to determine whether an ownership change had occurred since inception. The analyses have indicated that although ownership changes have occurred in prior years, the net operating losses and research and development credits would not expire before utilization as a result of the ownership change. In the event the Company has subsequent changes in ownership, net operating losses and research and development credit carryovers could be limited and may expire unutilized as a result of the subsequent ownership change. The Company recognizes interest and penalties related to uncertain tax positions within the income tax expense line in the consolidated statements of operations. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets. During the year ended December 31, 2017 , the Company reduced income tax benefit by $90 from interest and penalties related to tax contingencies and has $288 of interest and penalties recorded as a long-term income tax liability as of December 31, 2017 . During the year ended December 31, 2016 , the Company reduced income tax expense by $45 from interest and penalties related to tax contingencies and had $182 of interest and penalties recorded as a long-term income tax liability. As of December 31, 2017 , the Company had recorded unrecognized tax benefits of $4,700 that if recognized, would benefit the Company’s effective tax rate. As of December 31, 2016 , the Company had recorded unrecognized tax benefits of $922 that if recognized, would benefit the Company’s effective tax rate. The Company is currently under audit by the Israel Tax Authority for tax years 2013 through 2017. Related to the audit by the Israel Tax Authority it is reasonably possible that the Company’s uncertain tax positions could change within the next 12 months. An estimate of the range of any change cannot be made. The Company believes it has recorded all appropriate provisions for all jurisdictions and open years. However, the Company can give no assurance that taxing authorities will not propose adjustments that would increase its tax liabilities. The Company is not currently under audit by the IRS or any similar taxing authority in any other material jurisdiction. Because of net operating loss and credit carry-forwards, all of the Company’s tax years dating to inception in 2002 remain open to tax examination in U.S. and certain state tax jurisdictions. For other major non-U.S. jurisdictions, tax years from 2010 to present remain open to tax examination. The Company is not currently under audit in any material jurisdictions. The aggregate changes in the balance of gross unrecognized tax benefits were as follows: Balance as of December 31, 2014 $ 4,229 Increase in balances related to tax positions taken during the current period 806 Increase in balances related to tax positions taken during the prior period — Decrease in balances related to tax positions taken during the prior period (130 ) Decrease in balances related to statute expirations during the current period (85 ) Balance as of December 31, 2015 4,820 Increase in balances related to tax positions taken during the current period 1,262 Increase in balances related to tax positions taken during the prior period 20 Decrease in balances related to tax positions taken during the prior period (17 ) Decrease in balances related to statute expirations during the current period (239 ) Balance as of December 31, 2016 5,846 Increase in balances related to tax positions taken during the current period 8,160 Increase in balances related to tax positions taken during the prior period 45 Decrease in balances related to tax positions taken during the prior period (2 ) Decrease in balances related to statute expirations during the current period (188 ) Balance as of December 31, 2017 $ 13,861 As part of the transition to the new territorial tax system, the Act imposes a one-time repatriation tax on deemed repatriation of historical earnings of foreign subsidiaries. Based on the current evaluation of the Company’s operations, no repatriation tax charge is anticipated due to negative earnings and profits in the Company’s foreign operations. The Company continues to appropriately refine such amounts within the measurement period allowed by Staff Accounting Bulletin No. 118, which will continue through the end of 2018. In addition, further interpretations from U.S. Federal and State governments and regulatory organizations may change the accounting treatment of the provisional tax liability. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On February 2, 2018, the Company entered into a definitive agreement to acquire Wombat Securities Technologies, Inc. (“Wombat”). The aggregate consideration payable in exchange for all of the outstanding equity interests of Wombat is approximately $225 million . The consideration is subject to an adjustment based on (i) purchase price adjustment provisions for indebtedness, cash, transaction expenses and net working capital of Wombat and (ii) indemnification obligations of Wombat stockholders and option holders after the acquisition. Approximately 10% of the aggregate consideration will be placed in escrow to satisfy certain indemnification obligations of Wombat stockholders and option holders. Wombat provides security awareness computer-based training. By combining Wombat’s market-leading technology with the Company’s industry leading threat detection and intelligence, enterprises will have the most accurate insights into their employees’ vulnerability to the real phishing attacks. In addition, by collecting user-reported phishing threat data from Wombat’s PhishAlarm solution, the Company’s intelligence will amplify to include data on phishing campaigns as seen by non-company customers, providing broader visibility and intelligence to the Company’s Nexus platform. The acquisition date is subject to customary closing conditions and expected to occur in the first half of 2018. |
The Company and Summary of Si21
The Company and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP"). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. During the reporting periods, the Company completed a number of acquisitions which are more fully described in Note 2, "Acquisitions". The consolidated financial statements include the results of operations from these business combinations from their date of acquisition. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ materially from those estimates. Significant items subject to such estimates and assumptions include those related to revenue recognition, deferred commissions, stock-based compensation expense, fair value of assets acquired and liabilities assumed in business combinations, impairment assessments of goodwill, intangible assets and other long-lived assets, loss contingencies, and income taxes. |
Foreign Currency Remeasurement and Transactions | Foreign Currency Remeasurement and Transactions The functional currency of the Company's wholly-owned foreign subsidiaries is the U.S. dollar. Accordingly, the subsidiaries remeasure monetary assets and liabilities at period-end exchange rates, while nonmonetary items are remeasured at historical rates. Income and expense accounts are remeasured at the average exchange rates in effect during the year. Remeasurement adjustments are recognized in the consolidated statements of operations as transaction gains or losses within other income (expense), net, in the period of occurrence. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers currency on hand, demand deposits, time deposits, money market funds and all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. Cash and cash equivalents are held in various financial institutions in the United States and internationally. |
Investments | Investments The Company classifies all its investments as available-for-sale at the time of purchase since it is management’s intent that these investments be available for current operations, and as such, includes these investments as short-term investments on its balance sheets. These investments consist of money market funds, corporate debt securities, commercial papers, U.S. agency and Treasury securities, and certificates of deposit with original maturities longer than three months. Short-term investments classified as available-for-sale are recorded at fair value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), a component of stockholders’ equity. Realized gains and losses are recorded in the consolidated statements of operations and comprehensive loss based on specific identification. |
Inventories | Inventories Inventories are stated at lower of cost or net realizable value, with costs computed on a first-in, first-out basis. The Company periodically reviews its inventories for excess and obsolete items and adjusts carrying costs to estimated net realizable values when they are determined to be less than cost. |
Revenue Recognition | Revenue Recognition The Company derives its revenue primarily from two sources: (1) subscription revenue for rights related to the use of the security-as-a-service platform and (2) hardware, training and professional services revenue provided to customers related to their use of the platform. The Company records its revenues net of any value added or sales tax. Subscription revenue is derived from a subscription‑based enterprise licensing model with contract terms typically ranging from one to three years, and consists of (i) subscription fees from the licensing of the security-as-a-service platform, (ii) subscription fees for access to the on-demand elements of the platform and (iii) subscription fees for the right to access the Company’s customer support services. Revenue is recognized when all of the following criteria have been met: • Persuasive evidence of an arrangement exists; • Delivery has occurred or services have been rendered; • Sales price is fixed or determinable; and • Collectability is reasonably assured. The Company generates sales directly through its sales team and, to a growing extent, through its channel partners. Sales to channel partners are made at a discount and revenues are recorded at this discounted price once all revenue recognition criteria are met. Channel partners generally receive an order from an end-customer prior to placing an order with the Company, and these partners do not carry any inventory of the Company’s products or solutions. Payment from channel partners is not contingent on the partner’s success in sales to end-customers. In the event that the Company offers rebates, joint marketing funds, or other incentive programs to a partner, recorded revenues are reduced by these amounts accordingly. From time to time, certain third parties that the Company has an arrangement with provide the Company with referrals for which the Company pays a referral fee. The referral fee paid could vary depending on the level of effort. These fees are recorded in sales and marketing expense in proportion to the related revenue streams consistent with the sales commissions accounting. The Company did not incur any material referral fee expenses during the years ended December 31, 2017, 2016 and 2015 . The Company applies industry-specific software revenue recognition guidance to transactions involving the licensing of software, as well as related support, training, and other professional services. The Company has analyzed all of the elements included in its multiple element software arrangements and has determined that it does not have sufficient VSOE of fair value to allocate revenue to its subscription and software license agreements, support, training and professional services. The Company defers all revenue under the software arrangement until the commencement of the subscription services and any associated professional services. Once the subscription services and the associated professional services have commenced, the entire fee from the arrangement is recognized ratably over the remaining period of the arrangement. If the professional services are essential to the functionality of the subscription, then the revenue recognition does not commence until such services are completed. The Company’s revenue arrangements typically include subscription services to its security-as-a-service platform. These hosted on demand service arrangements do not provide customers with the right to take possession of the software supporting the hosted services. Certain arrangements also include the sale of hardware appliances. Revenue from hardware appliances containing software components and hardware components that function together to deliver the hardware appliance’s essential functionality is excluded from the scope of the industry specific revenue recognition guidance. The Company recognizes revenue from its hosted on demand services in accordance with general revenue recognition accounting guidance. Only revenue derived from the licensing of the software is recognized in accordance with the industry specific revenue guidance. When a sales arrangement contains multiple elements, such as hardware appliances, subscription services, customer support services, and/or professional services, the Company allocates revenue to each unit of accounting or element based on a selling price hierarchy. An element constitutes a separate unit of accounting when the delivered item has standalone value and delivery of the undelivered element is probable and within the Company’s control. When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence (“VSOE”) of selling price. If VSOE does not exist, the Company uses third-party evidence (“TPE”) of selling price. If neither VSOE nor TPE of selling price exist for a deliverable, the Company uses its best estimate of selling price (“BESP”) for that deliverable. Revenue allocated to each element is then recognized when the basic revenue recognition criteria are met for each element. The Company determines BESP for an individual element within a multiple element revenue arrangement using the same methods utilized to determine the selling price of an element sold on a standalone basis. The Company estimates the selling price for its subscription solutions by considering internal factors such as historical pricing practices and it estimates the selling price of hardware and other services using a cost plus model. Hardware appliance revenue is recognized upon shipment. Subscription and support revenue are recognized over the contract period commencing on the start date of the contract. Professional services and training, when sold with hardware appliances or subscription and support services, are accounted for separately when those services have standalone value. In determining whether professional services and training services can be accounted for separately from subscription and support services, the Company considers the following factors: availability of the services from other vendors, the nature of the services, and the dependence of the subscription services on the customer’s decision to buy the professional services. If professional services and training do not qualify for separate accounting, the Company recognizes the professional services and training ratably over the contract term of the subscription services. Delivery generally occurs when the hardware appliance is delivered to a common carrier freight on board shipping point by the Company or the hosted service has been activated and communicated to the customer accordingly. The Company’s fees are typically considered to be fixed or determinable at the inception of an arrangement and are negotiated at the outset of an arrangement, generally based on specific products and quantities to be delivered. In the event payment terms are provided that differ significantly from the Company’s standard business practices, the fees are deemed to not be fixed or determinable and revenue is recognized as the fees become paid. The Company assesses collectability based on a number of factors, including credit worthiness of the customer and past transaction history of the customer. |
Deferred Revenue | Deferred Revenue Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from the sale of the Company’s subscription fees, training and professional services. Once the revenue recognition criteria are met, this revenue is recognized ratably over the term of the associated contract. |
Deferred Commissions | Deferred Commissions Deferred commissions are the direct and incremental selling costs that are associated with the Company's customer contracts and consist of sales commissions paid to the Company's direct sales force and referral fees paid to independent third-parties. The commissions are amortized to sales and marketing expense over the non-cancelable terms of the related contracts with the Company's customers. The commission payments, which are paid in full the month after the customer's service commences, are a direct and incremental cost of the revenue arrangements. Direct sales commissions are deferred when earned and amortized over the same period that revenues are recognized for the related non-cancelable contract. |
Deferred Product Costs | Deferred Product Costs Deferred product costs are the incremental costs that are directly associated with each noncancellable customer contract or hosting agreement and primarily consist of cost of appliances and royalty payments made to third parties, from whom the Company has obtained licenses to integrate certain software into its products. The costs are deferred and amortized over the noncancellable term of the related customer contract or hosting agreement, which typically range from 12 to 36 months. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the related asset. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the lease term or the estimated useful life of the asset or improvement. Cost of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. When property and equipment are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is included in other (expense) income, net. |
Impairment of Intangible Assets and Other Long-Lived Assets | Impairment of Intangible Assets and Other Long-Lived Assets The Company evaluates long-lived assets, including property, equipment and definitive-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of such assets (or asset group) to the future undiscounted cash flows the assets (or asset group) is expected to generate. If the assets are considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired assets. The Company also evaluates the estimated remaining useful lives of intangible assets and other long-lived assets to assess whether a revision to the remaining periods of amortization is required. |
Software Development Costs | Software Development Costs Internally developed software includes security software developed to meet the Company’s internal needs to provide cloud-based subscription services to its end-customers and business software that the Company customizes to meet its operating needs. These capitalized costs consist of internal compensation related costs and external direct costs incurred during the application development stage. The costs capitalized were not material in the years ended December 31, 2017, 2016 and 2015 . The costs to develop software that is marketed externally have not been capitalized as the current software development process is essentially completed concurrently with the establishment of technological feasibility. As such, all related software development costs are expensed as incurred and included in research and development expense in the consolidated statements of operations. Internally and externally developed software is amortized over the software’s estimated useful life of three to five years. |
Advertising and Promotion Costs | Advertising and Promotion Costs Expenses related to advertising and promotion of solutions is charged to sales and marketing expense as incurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price of the acquired enterprise over the fair value of identifiable assets acquired and liabilities assumed. The Company performs an annual goodwill impairment test during the fourth quarter of a calendar year and more frequently if an event or circumstances indicates that impairment may have occurred. For the purposes of impairment testing, the Company has determined that it has one operating segment and one reporting unit. The Company performs a two-step impairment test of goodwill whereby the fair value of the reporting unit is compared to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not considered impaired and further testing is not required. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then impairment loss equal to the difference is recorded. The identification and measurement of goodwill impairment involves the estimation of the fair value of the Company. The estimate of fair value of the Company, based on the best information available as of the date of the assessment, is subjective and requires judgment, including management assumptions about expected future revenue forecasts and discount rates, changes in the overall economy, trends in the stock price and other factors. No impairment was identified by the Company as of December 31, 2017 . Intangible assets consist of developed technology, customer relationships, non-compete arrangements, trademarks and patents, and order backlog. The values assigned to intangibles are based on estimates and judgments regarding expectations for success and life cycle of solutions and technologies acquired. Intangible assets are amortized on a straight-line basis over their estimated lives, which approximate the pattern in which the economic benefits of the intangible assets are consumed, as follows (in years): Low High Patents 4 5 Developed technology 3 7 Customer relationships 2 8 Order backlog 1 3 Tradenames and trademarks 1 5 |
Warranty | Warranty The Company provides limited warranties on all sales and provides for the estimated cost of the warranties at the date of sale, to the extent not already provided by its own vendors. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with authoritative guidance, which requires use of the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on the difference between the consolidated financial statements carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rates expected to apply to taxable income in the years in which the differences are expected to be reversed. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. The Company recognizes interest and penalties related to uncertain tax positions within the income tax expense line in the consolidated statements of operations. Accrued interest and penalties are included within the related tax liability line on the consolidated balance sheets. |
Employee Benefit Plans | Employee Benefit Plans The Company sponsors a 401(k) defined contribution plan covering all employees. The Company may make discretionary contributions to the 401(k). |
Stock-Based Compensation | Stock-Based Compensation The Company issues stock-based compensation awards to employees and directors in the form of stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), employee stock purchase plan (“ESPP”) and stock bonus and other liability awards (collectively, “awards”). The Company measures and recognizes compensation expense for all stock-based awards based on the awards’ fair value. Stock-based compensation for RSUs and PSUs is measured based on the value of the Company’s common stock on the grant date. Stock-based compensation for employee stock options and ESPP awards are measured on the date of grant using a Black-Scholes option pricing model. Stock bonus and other liability awards are accounted for as liability-classified awards, because the obligations are based predominantly on fixed monetary amounts that are generally known at the inception of the obligation, to be settled with a variable number of shares of the Company’s common stock. Awards vest either on a graded schedule or in a lump sum. The Company determines the fair value of each award as a single award and recognizes the expense on a straight-line basis over the service period of the award, which is generally the vesting period. The exercise price of stock options granted is equal to the fair value of the Company's common stock on the date of grant. Stock options expire ten years from the date of grant. During the year ended December 31, 2017, the Company adopted Accounting Standards Update (“ASU”) 2016-09 and elected to account for forfeitures as they occur. Refer to Accounting Pronouncements Adopted in 2017 below for changes in the accounting for stock-based compensation expense. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) includes all changes in equity that are not the result of transactions with stockholders. The Company’s comprehensive income (loss) consists of its net loss and changes in unrealized gains (losses) on its available-for-sale investments. |
Loss Contingencies | Loss Contingencies The Company may be involved in various lawsuits, claims and proceedings that arise in the ordinary course of business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Company reviews these provisions at least quarterly and adjusts these provisions to reflect the impact of negotiations, settlements, rulings, and updated information. |
Recent Accounting Pronouncements | Accounting Pronouncements Adopted in 2017 In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). The ASU 2016-18 provides amendments to current guidance to address the classification and presentation of changes in restricted cash in the statement of cash flows. The Company adopted the ASU in 2017 and retrospectively applied the change to the presentation of the statement of cash flows for the years ended December 31, 2016 and 2015. The adoption of this standard did not have a material impact on the Company's consolidated financial statements and related disclosures. In March 2016, FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The ASU 2016-09 was effective for the Company beginning in the first quarter of 2017. This ASU simplifies various aspects related to how share-based payments are accounted for and presented in the financial statements, including forfeitures, income taxes and statutory tax withholding requirements. As a result of adopting ASU 2016-09, the Company has made an accounting policy election to account for forfeitures as they occur. This change has been applied on a modified retrospective basis, resulting in a cumulative-effect adjustment to increase the accumulated deficit by $999 as of January 1, 2017, the date of adoption. The adoption of this ASU also requires that excess tax benefits and tax deficiencies be recorded in the consolidated statement of operations as opposed to additional paid-in capital when the awards vest or are settled, and has been applied on a prospective basis starting January 1, 2017. As a result of the adoption, the Company's deferred tax assets as of January 1, 2017 include certain deferred tax assets that arose directly from tax deductions related to equity compensation greater than compensation recognized for financial reporting in the amount of $79,336 , which is fully offset by the valuation allowance. The adoption of ASU 2016-09 as it relates to the accounting for minimum statutory withholding tax requirements has no impact on the Company's current consolidated financial statements or on any prior period financial statements presented. ASU 2016-09 also requires changes in the classification of shares withheld to pay employee taxes and excess tax benefits in the consolidated statements of cash flows. The ASU requires that cash paid by an employer when directly withholding shares for tax-withholding purposes be classified as a financing activity and be applied retrospectively to all prior periods presented. As the Company has previously presented these cash flows as financing activities, there is no change resulting from the adoption of this provision of the ASU. ASU 2016-09 also requires excess tax benefits to be classified as an operating activity, consistent with other income tax cash flows, with the application either on a retrospective or prospective basis. The Company has elected to apply this provision on a prospective basis; and there is no impact to its prior year consolidated statements of cash flows. Recent Accounting Policies Not Yet Effective In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment charge will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The update to the standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, and should be applied prospectively. The Company does not expect ASU 2017-04 to have a material impact on its financial statements. In January 2017, FASB issued ASU No. 2017-01, Business Combinations (Topic 805) Clarifying the Definition of Business (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update to the standard is effective for interim and annual periods beginning after December 15, 2017, and applied prospectively. Early adoption is permitted. The Company does not expect ASU 2017-01 to have a material impact on its consolidated financial statements. In October 2016, FASB issued ASU No. 2016-16, I ncome Taxes: Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). ASU 2016-16 eliminates the requirement to defer the recognition of current and deferred income taxes for intra-entity asset transfer until the asset has been sold to an outside party. Therefore, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-16 is effective for interim and annual reporting periods beginning after December 15, 2017. The ASU should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company has evaluated the impact of the adoption of ASU 2016-16 on its consolidated financial statements and anticipates that its accumulated deficit will increase by $3,216 as of January 1, 2018, the date of adoption. In August 2016, FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 20 16-15 clarifies how certain cash receipts and payments should be classified in the statement of cash flows, including the potential cash settlement of the Company's convertible senior notes. If the Company elects to cash settle its convertible senior notes (see Note 8 "Convertible Senior Notes"), repayment of the principal amounts will be bifurcated between (i) cash outflows for operating activities for the portion related to accreted interest attributable to debt discounts arising from the difference between the coupon interest rate and the effective interest rate, and (ii) financing activities for the remainder. See Note 8 "Convertible Senior Notes" regarding timing of settlement. The update to the standard is effective for interim and annual periods beginning after December 15, 2017, and requires adoption on a retrospective transition method unless it is impracticable to apply. The Company is currently evaluating the impact of the adoption of ASU 2016-15 on its consolidated financial statements. In June 2016, FASB issued an ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets, and will require the use of an expected loss model in place of the currently used incurred loss method. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. The update to the standard is effective for interim and annual periods beginning after December 15, 2019. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to put most leases on their balance sheets but recognize the expenses on their statements of operations in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The new standard is effective for interim and annual periods beginning after December 15, 2018 and early adoption is permitted. While the Company is currently assessing the impact ASU 2016-02 will have on the Company’s consolidated financial statements, the Company expects the primary impact to its consolidated financial position upon adoption will be the recognition, on a discounted basis, of the Company’s minimum commitments under non-cancelable operating leases on its consolidated balance sheets resulting in the recording of right of use assets and lease obligations. In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (“ASC 606”), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The standard contains a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods and services. The FASB has issued several amendments to the standard, including clarifications on disclosure of prior-period performance obligations and remaining performance obligations. The Company will adopt ASC 606 effective January 1, 2018 using the full retrospective transition method. While the Company is finalizing the impact this standard has on its consolidated financial statements and related disclosures, the Company expects the new standard to mostly change i) the timing of revenue recognition for contracts related to certain on-premise offerings, in which the Company grants customers the right to deploy its subscription software on the customer's own servers. For these contracts, the Company will be required to recognize as revenue a significant portion of the contract price upon delivery of the software compared to the current practice of recognizing the entire contract price ratably over a subscription period; ii) the timing of revenue recognition in instances when all revenue recognition criteria were not met until after the start date of the subscription. Previously these amounts were recognized prospectively over the remaining contract term, while under ASC 606 the Company will be required to recognize revenue on a cumulative catch-up basis for amounts earned up to the time all revenue recognition criteria have been met. The expected impact, upon adoption of ASC 606, is that reported revenue will increase by $4,000 to $5,000 in 2017 and by $2,000 to $3,000 in 2016. The Company expects that certain contract acquisition costs such as sales commissions, will be amortized over an expected benefit period that is longer than the Company’s current policy of amortizing the deferred amounts over the specific revenue contract term for the associated contract. The expected impact, upon adoption of ASC 606 is that reported sales and marketing expense will decrease by $7,000 to $9,000 in 2017 and by $9,000 to $11,000 in 2016. Finally, due to the adoption of ASC 606 the Company expects its accumulated deficit as of January 1, 2016 to decrease by $35,000 to $38,000 . The Company does not expect the adoption of ASC 606 to have any impact on its operating cash flows. |
The Company and Summary of Si22
The Company and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of useful lives intangible assets | Intangible assets are amortized on a straight-line basis over their estimated lives, which approximate the pattern in which the economic benefits of the intangible assets are consumed, as follows (in years): Low High Patents 4 5 Developed technology 3 7 Customer relationships 2 8 Order backlog 1 3 Tradenames and trademarks 1 5 Intangible assets consisted of the following: December 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 118,869 $ (52,554 ) $ 66,315 $ 83,769 $ (38,042 ) $ 45,727 Customer relationships 33,600 (5,918 ) 27,682 17,943 (3,228 ) 14,715 Trademark and patents 930 (825 ) 105 930 (667 ) 263 Order backlog 2,300 (800 ) 1,500 1,600 (597 ) 1,003 $ 155,699 $ (60,097 ) $ 95,602 $ 104,242 $ (42,534 ) $ 61,708 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cloudmark [Member] | |
Business Acquisition [Line Items] | |
Schedule of purchase price | The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Estimated Fair Value Estimated Current assets acquired $ 37,390 N/A Fixed assets acquired 543 N/A Non-current assets acquired 50 N/A Liabilities assumed (4,542 ) N/A Deferred revenue assumed (15,400 ) N/A Customer relationships 15,300 8 Order backlog 1,400 1 Core/developed technology 18,500 4 Deferred tax liability, net (7,905 ) N/A Goodwill 93,920 Indefinite $ 139,256 |
Weblife [Domain] | |
Business Acquisition [Line Items] | |
Schedule of purchase price | The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Estimated Fair Value Estimated Current assets acquired $ 534 N/A Fixed assets acquired 23 N/A Liabilities assumed (88 ) N/A Deferred revenue assumed (700 ) N/A Customer relationships 600 5 Core/developed technology 16,600 5 Deferred tax liability, net (4,440 ) N/A Goodwill 36,514 Indefinite $ 49,043 |
FireLayers [Member] | |
Business Acquisition [Line Items] | |
Schedule of purchase price | The following table summarizes the fair values of acquired assets and liabilities: Fair Value Estimated Current assets acquired $ 432 N/A Developed technology 22,600 5 Fixed assets 52 N/A Deferred tax liability, net (3,530 ) N/A Other liabilities assumed (540 ) N/A Additional-paid-in-capital (176 ) N/A Goodwill 26,988 Indefinite $ 45,826 |
Return Path [Member] | |
Business Acquisition [Line Items] | |
Schedule of purchase price | The following table summarizes the fair values of acquired assets and liabilities: Fair Value Estimated Customer relationships $ 7,600 6 Developed technology 3,900 4 Order backlog 700 1 Deferred revenue assumed (1,200 ) N/A Goodwill 6,513 Indefinite $ 17,513 |
Acquisition in 4th Quarter of 2015 [Member] | |
Business Acquisition [Line Items] | |
Schedule of purchase price | The following table summarizes the fair values of acquired tangible and intangible assets, liabilities and goodwill: Fair Value Estimated Current assets acquired $ 414 N/A Fixed assets acquired 73 N/A Liabilities assumed (234 ) N/A Deferred revenue assumed (1,400 ) N/A Deferred tax liability, net (45 ) N/A Customer relationships 2,800 7 Order Backlog 900 3 Developed technology 3,000 4 Goodwill 6,060 Indefinite $ 11,568 |
Marble Security [Member] | |
Business Acquisition [Line Items] | |
Schedule of purchase price | The following table summarizes the fair values of acquired tangible, intangible assets and goodwill: Fair Value Estimated Fixed assets acquired $ 25 N/A Developed technology 7,300 4 Goodwill 1,175 Indefinite $ 8,500 |
Emerging Threats [Member] | |
Business Acquisition [Line Items] | |
Schedule of purchase price | The following table summarizes the fair values of tangible and intangible assets acquired, liabilities assumed and goodwill: Fair Value Estimated Current assets acquired $ 1,275 N/A Fixed assets acquired 174 N/A Liabilities assumed (448 ) N/A Deferred revenue assumed (700 ) N/A Holdback liability to the sellers (3,662 ) N/A Trade names 200 2 Customer relationships 4,200 7 Order Backlog 200 1 Developed technology 7,900 7 Goodwill 19,054 Indefinite $ 28,193 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of property and equipment | Property and equipment at December 31, 2017 and December 31, 2016 consist of the following: Useful Life (in years) December 31, 2017 2016 Computer equipment 2 to 4 $ 125,296 $ 92,462 Software 2 to 5 2,647 2,266 Furniture 5 2,523 1,532 Office equipment 2 to 5 587 467 Leasehold improvements 5 years, or lease term, if shorter 10,632 6,198 Other 2 59 59 Construction in progress 1,854 1,483 143,598 104,467 Less: Accumulated depreciation (69,981 ) (51,944 ) $ 73,617 $ 52,523 |
Schedule of property and equipment acquired under capital leases | Property and equipment acquired under capital leases: December 31, 2017 2016 Computer equipment $ 453 $ 453 Less: Accumulated depreciation (372 ) (341 ) $ 81 $ 112 |
Schedule of accrued liabilities | Accrued liabilities at December 31, 2017 and December 31, 2016 consisted of the following: December 31, 2017 2016 Accrued compensation $ 37,028 $ 30,295 ESPP contributions 2,339 1,701 Customer deposits 570 173 Accrued royalties 780 754 Acquisition-related contingent consideration 634 7,629 Other 22,575 10,213 $ 63,926 $ 50,765 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The goodwill activity and balances are presented below: December 31, 2017 2016 Opening balance $ 167,270 $ 133,769 Add: Goodwill from acquisitions 130,434 33,501 Closing balance $ 297,704 $ 167,270 |
Intangible assets excluding goodwill | Intangible assets are amortized on a straight-line basis over their estimated lives, which approximate the pattern in which the economic benefits of the intangible assets are consumed, as follows (in years): Low High Patents 4 5 Developed technology 3 7 Customer relationships 2 8 Order backlog 1 3 Tradenames and trademarks 1 5 Intangible assets consisted of the following: December 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 118,869 $ (52,554 ) $ 66,315 $ 83,769 $ (38,042 ) $ 45,727 Customer relationships 33,600 (5,918 ) 27,682 17,943 (3,228 ) 14,715 Trademark and patents 930 (825 ) 105 930 (667 ) 263 Order backlog 2,300 (800 ) 1,500 1,600 (597 ) 1,003 $ 155,699 $ (60,097 ) $ 95,602 $ 104,242 $ (42,534 ) $ 61,708 |
Future estimated amortization costs of intangible assets | Future estimated amortization costs of intangible assets as of December 31, 2017 are presented below: Year Ended December 31, 2018 $ 25,990 2019 21,450 2020 19,199 2021 16,898 2022 6,535 Thereafter 5,530 $ 95,602 |
Fair Value Measurements and I26
Fair Value Measurements and Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair value, by balance sheet grouping | The following tables summarize, for each category of assets or liabilities carried at fair value, the respective fair value as of December 31, 2017 and December 31, 2016 and the classification by level of input within the fair value hierarchy: December 31, 2017 Total Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 231,828 $ 231,828 $ — $ — Commercial paper 7,995 — 7,995 — U.S. agency securities 1,996 — 1,996 — Short-term investments: Corporate debt securities 11,600 — 11,600 — Commercial paper 27,939 — 27,939 — U.S. agency securities 3,991 — 3,991 — U.S. Treasury securities 1,996 — 1,996 — Total financial assets $ 287,345 $ 231,828 $ 55,517 $ — Liabilities Acquisition-related contingent consideration $ 634 $ — $ — $ 634 December 31, 2016 Total Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 304,020 $ 304,020 $ — $ — Corporate debt securities 2,139 — 2,139 — Commercial paper 13,243 — 13,243 — Short-term investments: Corporate debt securities 24,450 — 24,450 — Commercial paper 22,979 — 22,979 — U.S. agency securities 1,946 — 1,946 — U.S. Treasury securities 1,950 — 1,950 — Total financial assets $ 370,727 $ 304,020 $ 66,707 $ — Liabilities Acquisition-related contingent consideration $ 8,233 $ — $ — $ 8,233 |
Reconciliation of the acquisition-related contingent consideration liability measured at fair value | The following table represents a reconciliation of the Acquisition-related contingent consideration liability measured at fair value on a recurring basis, using significant unobservable inputs (Level 3): Amount Balance as of December 31, 2015 $ — Additions during the period 9,162 Payments during the period (260 ) Adjustments to fair value during the period recorded in General and administrative expenses (669 ) Balance as of December 31, 2016 8,233 Additions during the period — Payments during the period (6,066 ) Adjustments to fair value during the period recorded in General and administrative expenses (1,533 ) Balance as of December 31, 2017 $ 634 |
Fair value of cash and cash equivalents, and investments | The cost and fair value of the Company’s cash, cash equivalents and available-for-sale investments as of December 31, 2017 and December 31, 2016 were as follows: December 31, 2017 Amortized Cost Unrealized Unrealized Fair Cash and cash equivalents: Cash $ 44,253 $ — $ — $ 44,253 Money market funds 231,828 — — 231,828 Commercial paper 7,995 — — 7,995 U.S. agency securities 1,996 — — 1,996 Total $ 286,072 $ — $ — $ 286,072 Short-term investments: Corporate debt securities $ 11,607 $ — $ (7 ) $ 11,600 Commercial paper 27,939 — — 27,939 U.S. agency securities 3,992 — (1 ) 3,991 U.S. Treasury securities 1,997 — (1 ) 1,996 Total $ 45,535 $ — $ (9 ) $ 45,526 December 31, 2016 Amortized Cost Unrealized Unrealized Fair Cash and cash equivalents: Cash $ 26,024 $ — $ — $ 26,024 Money market funds 304,020 — — 304,020 Corporate debt securities 2,140 — (1 ) 2,139 Commercial papers 13,243 — — 13,243 Total $ 345,427 $ — $ (1 ) $ 345,426 Short-term investments: Corporate debt securities $ 24,458 $ — $ (8 ) $ 24,450 Commercial papers 22,979 — — 22,979 U.S. agency securities 1,945 1 — 1,946 U.S. Treasury securities 1,950 — — 1,950 Total $ 51,332 $ 1 $ (8 ) $ 51,325 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future annual minimum lease payments under noncancellable operating and capital leases | At December 31, 2017 , future annual minimum lease payments under noncancellable operating and capital leases were as follows: Capital Operating 2018 $ 39 $ 17,985 2019 37 15,625 2020 21 7,661 2021 — 4,924 2022 — 4,919 Thereafter — 6,692 Total minimum lease payments 97 $ 57,806 Less: Amount representing interest (8 ) Present value of capital lease obligations 89 Less: Current portion (34 ) Long-term portion of capital lease obligations $ 55 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Senior Notes [Abstract] | |
Schedule of liability and equity components of convertible debt | The following tables represent the carrying values of all Notes as of December 31, 2017 and 2016 : December 31, 2017 0.75% Notes 1.25% Notes Total Liability component: Principal $ 230,000 $ — $ 230,000 Less: debt discount and issuance costs, net of amortization (32,142 ) — (32,142 ) Net carrying amount $ 197,858 $ — $ 197,858 Equity component (1) $ 54,049 $ — $ 54,049 December 31, 2016 0.75% Notes 1.25% Notes Total Liability component: Principal $ 230,000 $ 201,250 $ 431,250 Less: debt discount and issuance costs, net of amortization (43,896 ) (20,813 ) (64,709 ) Net carrying amount $ 186,104 $ 180,437 $ 366,541 Equity component (1) $ 54,049 $ 43,293 $ 97,342 _______________________________________________________________________________ (1) Recorded on the consolidated balance sheets as additional paid-in capital, net of the issuance costs in equity For the years ended December 31, 2017, 2016 and 2015 , the Company incurred the following interest expense and loss on conversion related to the Notes: 2017 2016 2015 Interest expense related to contractual interest coupon $ 4,123 $ 4,240 $ 3,441 Amortization of debt discount and issuance costs 21,789 20,842 14,933 Loss on conversion 2,696 — — Total $ 28,608 $ 25,082 $ 18,374 |
Equity Award Plans (Tables)
Equity Award Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options valuation assumptions | The fair values were estimated on the grant dates using the Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2016 2015 Expected life (in years) 5.31 - 6.08 5.31 - 6.08 Volatility 45% 50% - 52% Risk-free interest rate 1.3% - 1.4% 1.6% - 1.8% Dividend yield —% —% |
Activity under stock option plan | Stock option activity is as follows: Shares subject to Options Outstanding Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Balance at December 31, 2014 5,288 $ 11.06 6.31 $ 196,608 Options granted 284 57.47 Options exercised (1,429 ) 8.31 Options forfeited and canceled (101 ) 19.11 Balance at December 31, 2015 4,042 15.10 5.77 $ 201,736 Options assumed per FireLayers acquisition 20 4.33 Options granted 237 54.11 Options exercised (1,089 ) 11.59 Options forfeited and canceled (27 ) 43.15 Balance at December 31, 2016 3,183 18.91 5.39 $ 164,842 Options assumed per business acquisitions 13 20.27 Options exercised (1,126 ) 11.04 Options forfeited and canceled (30 ) 45.54 Balance at December 31, 2017 2,040 $ 22.88 5.17 $ 134,511 Exercisable, December 31, 2017 1,809 $ 19.37 4.83 $ 125,608 Vested and expected to vest, December 31, 2017 2,040 $ 22.88 5.17 $ 134,511 |
Summary of the activities of RSUs and PSUs | A following table summarizes the activity of RSUs and PSUs: RSUs and PSUs Outstanding Number of Shares Granted Fair Value Per Unit Awarded and unvested at December 31, 2014 2,934 $ 37.45 Awards granted 1,541 61.48 Awards vested (897 ) 38.70 Awards forfeited (267 ) 41.89 Awarded and unvested at December 31, 2015 3,311 47.94 Awards granted 1,605 64.08 Awards vested (1,116 ) 44.73 Awards forfeited (335 ) 51.40 Awarded and unvested at December 31, 2016 3,465 56.11 Awards assumed per business acquisition 8 91.10 Awards granted 1,865 84.91 Awards vested (1,320 ) 52.36 Awards forfeited (478 ) 63.44 Awarded and unvested at December 31, 2017 3,540 $ 71.77 |
ESPP valuation Assumptions | The fair value of the option component of the ESPP shares was estimated at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions: Year ended December 31, 2017 2016 2015 Expected life (in years) 0.5 0.5 0.5 Volatility 29% - 37% 37% - 48% 42% - 47% Risk-free interest rate 0.76% - 1.16% 0.38% - 0.45% 0.08% - 0.33% Dividend yield —% —% —% |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of antidilutive securities excluded from computation of earnings per share | The following table presents the potentially dilutive common shares outstanding that were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been anti-dilutive: December 31, 2017 2016 2015 Stock options to purchase common stock 2,040 3,183 4,042 Restricted stock units 3,540 3,465 3,311 Employee stock purchase plan 118 92 81 Common stock subject to repurchase 90 135 54 Stock bonus awards and other liability awards 98 159 174 1.25% Convertible senior notes — 5,158 5,158 0.75% Convertible senior notes 2,831 2,831 2,831 Total 8,717 15,023 15,651 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Revenue from external customers by products and services | Revenue by geographic area is based upon the billing address of the customer: Year Ended December 31, 2017 2016 2015 Total revenue by solution: Protection and Advanced Threat $ 387,695 $ 272,621 $ 183,050 Archiving, Privacy and Governance 127,594 102,875 82,347 Total revenue $ 515,289 $ 375,496 $ 265,397 |
Revenue from external customers by geographic areas | Year Ended December 31, 2017 2016 2015 Total revenue by geographic area: United States $ 428,775 $ 312,601 $ 218,424 Rest of world 86,514 62,895 46,973 Total revenue $ 515,289 $ 375,496 $ 265,397 |
Long-lived assets by geographic area | The following sets forth long-lived tangible assets by geographic area: December 31, 2017 2016 Long-lived assets: United States $ 66,134 $ 43,789 Rest of world 7,483 8,734 Total long-lived assets $ 73,617 $ 52,523 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of domestic and foreign components of loss before benefit from (provision for) income taxes | The domestic and foreign components of loss before income taxes were as follows for the years ended December 31, 2017, 2016 and 2015 : Year Ended December 31, 2017 2016 2015 Domestic $ (124,727 ) $ (112,904 ) $ (101,453 ) Foreign 30,440 2,682 3,376 Loss before income taxes $ (94,287 ) $ (110,222 ) $ (98,077 ) |
Schedule of components of income tax expense | The (provision for) benefit from income taxes is comprised of: Year Ended December 31, 2017 2016 2015 Current tax expense: Federal $ — $ — $ — State 80 72 54 Foreign 5,923 795 514 Total current 6,003 867 568 Deferred tax expense: Federal (12,268 ) 411 105 State (266 ) — (45 ) Foreign (3,419 ) (292 ) 7 Total deferred (15,953 ) 119 67 (Benefit from) provision for income taxes $ (9,950 ) $ 986 $ 635 |
Schedule of reconciliation of income tax expense | The reconciliation of income tax expense (benefit) at the statutory federal income tax rate of 34% to the income tax provision (benefit) included in the consolidated statements of operations for the years ended December 31, 2017, 2016 and 2015 is as follows: Year Ended December 31, 2017 2016 2015 Tax at federal statutory rate $ (32,058 ) $ (37,476 ) $ (33,346 ) Foreign income tax rate differential (3,076 ) (187 ) (270 ) State, net of federal benefit (3,378 ) (3,478 ) (2,952 ) Stock compensation charges (32,150 ) 3,517 2,393 SubPart F and other permanent items 2,757 1,422 1,434 Provision to return and other 2,480 1,419 749 Research and development credits (7,713 ) (4,464 ) (2,920 ) Uncertain tax positions 5,888 749 561 Impact of Tax Act and other tax law changes 87,495 — — Valuation allowance (30,195 ) 39,484 34,986 (Benefit from) provision for income taxes $ (9,950 ) $ 986 $ 635 |
Schedule of deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets were as follows: At December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 158,535 $ 119,168 Tax credit carryforwards 24,700 13,966 Research expenditures 859 2,401 Deferred revenue 14,460 13,698 Stock compensation 14,842 18,509 Fixed assets 274 207 Accruals and other 10,107 11,554 Gross deferred tax assets 223,777 179,503 Valuation allowance (194,943 ) (141,398 ) Total deferred tax assets 28,834 38,105 Deferred tax liabilities: Intangible assets and other (12,086 ) (8,793 ) Deferred commissions (7,881 ) (9,545 ) Convertible senior notes (6,857 ) (21,541 ) Total deferred tax liabilities (26,824 ) (39,879 ) Total net deferred tax assets (liabilities) $ 2,010 $ (1,774 ) Non-current deferred income tax assets (included in other long-term assets) $ 2,543 $ 2,121 Non-current deferred income tax liabilities (included in long-term liabilities) $ 533 $ 3,895 |
Schedule of unrecognized tax benefits | The aggregate changes in the balance of gross unrecognized tax benefits were as follows: Balance as of December 31, 2014 $ 4,229 Increase in balances related to tax positions taken during the current period 806 Increase in balances related to tax positions taken during the prior period — Decrease in balances related to tax positions taken during the prior period (130 ) Decrease in balances related to statute expirations during the current period (85 ) Balance as of December 31, 2015 4,820 Increase in balances related to tax positions taken during the current period 1,262 Increase in balances related to tax positions taken during the prior period 20 Decrease in balances related to tax positions taken during the prior period (17 ) Decrease in balances related to statute expirations during the current period (239 ) Balance as of December 31, 2016 5,846 Increase in balances related to tax positions taken during the current period 8,160 Increase in balances related to tax positions taken during the prior period 45 Decrease in balances related to tax positions taken during the prior period (2 ) Decrease in balances related to statute expirations during the current period (188 ) Balance as of December 31, 2017 $ 13,861 |
The Company and Summary of Si33
The Company and Summary of Significant Accounting Policies - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | ||
Foreign currency remeasurement and transactions: | ||||
Foreign currency transaction gain (loss) | $ 574,000 | $ (852,000) | $ (1,657,000) | |
Deferred product costs: | ||||
Number of segments | segment | 1 | |||
Number of reporting units | segment | 1 | |||
Goodwill, impairment loss | $ 0 | |||
Valuation allowance increase (decrease) | 53,545,000 | 39,489,000 | ||
Increase in revenue | 515,289,000 | 375,496,000 | 265,397,000 | |
Decrease in sales and marketing expense | [1],[2] | $ (258,837,000) | (201,204,000) | (148,414,000) |
Minimum [Member] | ||||
Revenue Recognition | ||||
Contract term | 1 year | |||
Deferred product costs: | ||||
Number of months deferred product costs are recognized | 12 months | |||
Maximum [Member] | ||||
Revenue Recognition | ||||
Contract term | 3 years | |||
Deferred product costs: | ||||
Number of months deferred product costs are recognized | 36 months | |||
Software [Member] | Minimum [Member] | ||||
Deferred product costs: | ||||
Estimated life of intangible assets | 3 years | |||
Software [Member] | Maximum [Member] | ||||
Deferred product costs: | ||||
Estimated life of intangible assets | 5 years | |||
Employee Stock Option [Member] | ||||
Deferred product costs: | ||||
Term until award expiration | 10 years | |||
Employee Stock Option [Member] | Maximum [Member] | ||||
Deferred product costs: | ||||
Term until award expiration | 10 years | |||
Accounting Standards Update 2016-09 [Member] | ||||
Deferred product costs: | ||||
Cumulative effect of change on equity due to ASU adoption | (999,000) | |||
Accounting Standards Update 2016-16 [Member] | ||||
Deferred product costs: | ||||
Cumulative effect of change on equity due to ASU adoption | $ (3,216,000) | |||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | Minimum [Member] | ||||
Deferred product costs: | ||||
Cumulative effect of change on equity due to ASU adoption | 35,000,000 | |||
Increase in revenue | 4,000,000 | 2,000,000 | ||
Decrease in sales and marketing expense | 7,000,000 | 9,000,000 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | Maximum [Member] | ||||
Deferred product costs: | ||||
Cumulative effect of change on equity due to ASU adoption | $ 38,000,000 | |||
Increase in revenue | 5,000,000 | 3,000,000 | ||
Decrease in sales and marketing expense | 9,000,000 | $ 11,000,000 | ||
Accounting Standards Update 2016-09 [Member] | ||||
Deferred product costs: | ||||
Valuation allowance increase (decrease) | $ 79,336,000 | |||
[1] | Includes intangible amortization expense as follows: Cost of subscription revenue $14,512, research and development $60, sales and marketing $3,934 and general and administrative $0 for the year ended December 31, 2017. Cost of subscription revenue $9,423, research and development $60, sales and marketing $4,938 and general and administrative $0 for the year ended December 31, 2016. Cost of subscription revenue $7,079, research and development $91, sales and marketing $5,074 and general and administrative $12 for the year ended December 31, 2015. | |||
[2] | Includes stock-based compensation expenses as follows:Cost of subscription $10,635, cost of hardware and service revenue $1,893, research and development $30,588, sales and marketing $33,962 and general and administrative $20,382 for the year ended December 31, 2017. Cost of subscription $7,427, cost of hardware and service revenue $1,494, research and development $24,342, sales and marketing $28,607 and general and administrative $16,826 for the year ended December 31, 2016. Cost of subscription $5,028, cost of hardware and service revenue $1,098, research and development $20,672, sales and marketing $21,511 and general and administrative $11,785 for the year ended December 31, 2015 |
The Company and Summary of Si34
The Company and Summary of Significant Accounting Policies - Goodwill and Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Minimum [Member] | Patents [Member] | |
Intangible assets: | |
Estimated life of intangible assets | 4 years |
Minimum [Member] | Developed technology [Member] | |
Intangible assets: | |
Estimated life of intangible assets | 3 years |
Minimum [Member] | Customer relationships [Member] | |
Intangible assets: | |
Estimated life of intangible assets | 2 years |
Minimum [Member] | Order Backlog [Member] | |
Intangible assets: | |
Estimated life of intangible assets | 1 year |
Minimum [Member] | Trademarks and trademarks [Member] | |
Intangible assets: | |
Estimated life of intangible assets | 1 year |
Maximum [Member] | Patents [Member] | |
Intangible assets: | |
Estimated life of intangible assets | 5 years |
Maximum [Member] | Developed technology [Member] | |
Intangible assets: | |
Estimated life of intangible assets | 7 years |
Maximum [Member] | Customer relationships [Member] | |
Intangible assets: | |
Estimated life of intangible assets | 8 years |
Maximum [Member] | Order Backlog [Member] | |
Intangible assets: | |
Estimated life of intangible assets | 3 years |
Maximum [Member] | Trademarks and trademarks [Member] | |
Intangible assets: | |
Estimated life of intangible assets | 5 years |
Acquisitions - Acquisitions (De
Acquisitions - Acquisitions (Details) shares in Thousands, $ in Thousands | Nov. 30, 2017USD ($) | Nov. 21, 2017USD ($) | Oct. 24, 2016USD ($) | Aug. 24, 2016USD ($) | Jul. 22, 2015USD ($) | Mar. 06, 2015USD ($) | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)business | Dec. 31, 2014USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | ||||||||||||
Payments to acquire businesses, net of cash acquired | $ 155,350 | $ 54,119 | $ 51,481 | |||||||||
Acquisition-related costs | 581 | |||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Goodwill | $ 167,270 | $ 133,769 | 297,704 | 167,270 | 133,769 | |||||||
Employee Stock Option [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Unrecognized stock options compensation expense | 7,341 | |||||||||||
Restricted Stock [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Unamortized stock-based compensation expense | 5,236 | |||||||||||
Shares granted in period | shares | 54 | |||||||||||
Fair value of shares granted | $ 2,357 | |||||||||||
Cloudmark [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Revenue recorded since acquisition date | 3,052 | |||||||||||
Payments to acquire businesses, net of cash acquired | $ 107,283 | |||||||||||
Cash acquired from acquisitions | 31,973 | |||||||||||
Escrow | 16,700 | |||||||||||
Acquisition-related costs | 413 | |||||||||||
Fair value of unvested awards attributed to preacquisition service | 91 | |||||||||||
Unamortized stock-based compensation expense | 1,180 | |||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Current assets acquired | 37,390 | |||||||||||
Fixed assets acquired | 543 | |||||||||||
Non-current assets acquired | 50 | |||||||||||
Liabilities assumed | (4,542) | |||||||||||
Deferred revenue assumed | (15,400) | |||||||||||
Deferred tax liability, net | (7,905) | |||||||||||
Goodwill | 93,920 | |||||||||||
Recognized identifiable assets acquired and liabilities assumed, net | 139,256 | |||||||||||
Cloudmark [Member] | Customer relationships [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 15,300 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 8 years | |||||||||||
Cloudmark [Member] | Order Backlog [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 1,400 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 1 year | |||||||||||
Cloudmark [Member] | Core/developed technology [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 18,500 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 4 years | |||||||||||
Weblife [Domain] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Payments to acquire businesses, net of cash acquired | $ 48,765 | |||||||||||
Cash acquired from acquisitions | 278 | |||||||||||
Escrow | 6,203 | |||||||||||
Acquisition-related costs | 168 | |||||||||||
Fair value of unvested awards attributed to preacquisition service | 333 | |||||||||||
Unrecognized stock options compensation expense | 1,468 | |||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Current assets acquired | 534 | |||||||||||
Fixed assets acquired | 23 | |||||||||||
Liabilities assumed | (88) | |||||||||||
Deferred revenue assumed | (700) | |||||||||||
Deferred tax liability, net | 4,440 | |||||||||||
Goodwill | 36,514 | |||||||||||
Recognized identifiable assets acquired and liabilities assumed, net | 49,043 | |||||||||||
Weblife [Domain] | Restricted Stock [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Unamortized stock-based compensation expense | $ 9,447 | |||||||||||
Number of shares deferred | shares | 107 | |||||||||||
Fair value of share-based deferred compensation issued | $ 9,652 | |||||||||||
Weblife [Domain] | Customer relationships [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 600 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 5 years | |||||||||||
Weblife [Domain] | Core/developed technology [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 16,600 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 5 years | |||||||||||
FireLayers [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Payments to acquire businesses, net of cash acquired | $ 45,616 | |||||||||||
Cash acquired from acquisitions | 210 | |||||||||||
Escrow | 7,740 | |||||||||||
Acquisition-related costs | 827 | |||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Current assets acquired | 432 | |||||||||||
Fixed assets acquired | 52 | |||||||||||
Liabilities assumed | (540) | |||||||||||
Deferred tax liability, net | (3,530) | |||||||||||
Additional-paid-in-capital | (176) | |||||||||||
Goodwill | 26,988 | |||||||||||
Recognized identifiable assets acquired and liabilities assumed, net | 45,826 | |||||||||||
FireLayers [Member] | Employee Stock Option [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Unamortized stock-based compensation expense | 1,326 | |||||||||||
FireLayers [Member] | Restricted Stock [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Shares granted in period | shares | 111 | |||||||||||
Fair value of shares granted | $ 8,669 | |||||||||||
FireLayers [Member] | Core/developed technology [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 22,600 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 5 years | |||||||||||
Return Path [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Revenue recorded since acquisition date | 1,025 | |||||||||||
Purchase price | $ 17,513 | |||||||||||
Acquisition-related contingent consideration | 9,162 | |||||||||||
Escrow | 9,644 | |||||||||||
Acquisition-related costs | $ 406 | |||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Deferred revenue assumed | (1,200) | |||||||||||
Goodwill | 6,513 | |||||||||||
Recognized identifiable assets acquired and liabilities assumed, net | 17,513 | |||||||||||
Return Path [Member] | Customer relationships [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 7,600 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 6 years | |||||||||||
Return Path [Member] | Order Backlog [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 700 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 1 year | |||||||||||
Return Path [Member] | Core/developed technology [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 3,900 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 4 years | |||||||||||
Acquisition in 4th Quarter of 2015 [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Number of businesses acquired | business | 2 | |||||||||||
Purchase price | $ 11,568 | |||||||||||
Acquisition-related costs | 355 | |||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Current assets acquired | 414 | 414 | ||||||||||
Fixed assets acquired | 73 | 73 | ||||||||||
Liabilities assumed | (234) | (234) | ||||||||||
Deferred revenue assumed | (1,400) | (1,400) | ||||||||||
Deferred tax liability, net | (45) | (45) | ||||||||||
Goodwill | 6,060 | 6,060 | ||||||||||
Recognized identifiable assets acquired and liabilities assumed, net | 11,568 | 11,568 | ||||||||||
Acquisition in 4th Quarter of 2015 [Member] | Customer relationships [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 2,800 | 2,800 | ||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 7 years | |||||||||||
Acquisition in 4th Quarter of 2015 [Member] | Order Backlog [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 900 | 900 | ||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 3 years | |||||||||||
Acquisition in 4th Quarter of 2015 [Member] | Core/developed technology [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 3,000 | 3,000 | ||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 4 years | |||||||||||
Marble Security [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Purchase price | $ 8,500 | |||||||||||
Acquisition-related costs | 277 | |||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Fixed assets acquired | 25 | |||||||||||
Goodwill | 1,175 | |||||||||||
Recognized identifiable assets acquired and liabilities assumed, net | 8,500 | |||||||||||
Marble Security [Member] | Core/developed technology [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 7,300 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 4 years | |||||||||||
Emerging Threats [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Revenue recorded since acquisition date | 2,477 | |||||||||||
Percentage of voting interests acquired | 100.00% | |||||||||||
Purchase price | $ 31,803 | |||||||||||
Cash acquired from acquisitions | 52 | |||||||||||
Acquisition-related costs | $ 277 | |||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Current assets acquired | 1,275 | |||||||||||
Fixed assets acquired | 174 | |||||||||||
Liabilities assumed | (448) | |||||||||||
Deferred revenue assumed | (700) | |||||||||||
Holdback liability to the sellers | 3,662 | |||||||||||
Goodwill | 19,054 | |||||||||||
Recognized identifiable assets acquired and liabilities assumed, net | 28,193 | |||||||||||
Emerging Threats [Member] | Trade names [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 200 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 2 years | |||||||||||
Emerging Threats [Member] | Customer relationships [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 4,200 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 7 years | |||||||||||
Emerging Threats [Member] | Order Backlog [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 200 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 1 year | |||||||||||
Emerging Threats [Member] | Core/developed technology [Member] | ||||||||||||
Fair value of assets acquired and liabilities assumed | ||||||||||||
Finite lived intangible assets | $ 7,900 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 7 years |
Acquisitions - Pro Forma Financ
Acquisitions - Pro Forma Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | |||
Total revenue | $ 550,314 | $ 414,539 | $ 264,904 |
Net loss | $ (89,515) | $ (121,147) | $ (111,440) |
Basic and diluted net loss per share (in dollars per share) | $ (2.02) | $ (2.89) | $ (2.80) |
Acquisition-related costs | $ 581 |
Concentration of Risks (Details
Concentration of Risks (Details) - customer | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Total revenue [Member] | ||
Concentration Risk [Line Items] | ||
Number of customers | 1 | 0 |
Major Customer 1 [Member] | Total revenue [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 12.00% | |
Major Customer 1 [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Number of customers | 1 | |
Concentration risk percentage | 11.00% | 21.00% |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property and Equipment | ||
Property and equipment, gross | $ 143,598 | $ 104,467 |
Less: Accumulated depreciation | (69,981) | (51,944) |
Property and equipment, net | 73,617 | 52,523 |
Computer equipment [Member] | ||
Property and Equipment | ||
Property and equipment, gross | $ 125,296 | 92,462 |
Computer equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years | |
Computer equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 4 years | |
Software [Member] | ||
Property and Equipment | ||
Property and equipment, gross | $ 2,647 | 2,266 |
Software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years | |
Software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Property and Equipment | ||
Property and equipment, gross | $ 2,523 | 1,532 |
Office equipment [Member] | ||
Property and Equipment | ||
Property and equipment, gross | $ 587 | 467 |
Office equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years | |
Office equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Leasehold improvements [Member] | ||
Property and Equipment | ||
Property and equipment, gross | $ 10,632 | 6,198 |
Leasehold improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Other [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years | |
Property and Equipment | ||
Property and equipment, gross | $ 59 | 59 |
Construction in progress [Member] | ||
Property and Equipment | ||
Property and equipment, gross | $ 1,854 | $ 1,483 |
Balance Sheet Components - Pr39
Balance Sheet Components - Property and Equipment, Other Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and equipment acquired under capital leases | |||
Depreciation expense | $ 23,591 | $ 17,131 | $ 12,644 |
Computer equipment [Member] | |||
Property and equipment acquired under capital leases | |||
Capital leased assets, gross | 453 | 453 | |
Less: Accumulated depreciation | (372) | (341) | |
Capital leased assets, net | 81 | 112 | |
Capital leases [Member] | |||
Property and equipment acquired under capital leases | |||
Depreciation expense | $ 31 | $ 31 | $ 23 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued compensation | $ 37,028 | $ 30,295 |
ESPP contributions | 2,339 | 1,701 |
Customer deposits | 570 | 173 |
Accrued royalties | 780 | 754 |
Acquisition-related contingent consideration | 634 | 7,629 |
Other | 22,575 | 10,213 |
Total accrued liabilities | $ 63,926 | $ 50,765 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill activity and balances | ||
Opening balance | $ 167,270 | $ 133,769 |
Add: Goodwill from acquisitions | 130,434 | 33,501 |
Closing balance | $ 297,704 | $ 167,270 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible assets excluding goodwill: | |||
Gross Carrying Amount | $ 155,699 | $ 104,242 | |
Accumulated Amortization | (60,097) | (42,534) | |
Net Carrying Amount | 95,602 | 61,708 | |
Intangible amortization expense | 18,506 | 14,421 | $ 12,256 |
Developed technology [Member] | |||
Intangible assets excluding goodwill: | |||
Gross Carrying Amount | 118,869 | 83,769 | |
Accumulated Amortization | (52,554) | (38,042) | |
Net Carrying Amount | 66,315 | 45,727 | |
Customer relationships [Member] | |||
Intangible assets excluding goodwill: | |||
Gross Carrying Amount | 33,600 | 17,943 | |
Accumulated Amortization | (5,918) | (3,228) | |
Net Carrying Amount | 27,682 | 14,715 | |
Trademark and patents [Member] | |||
Intangible assets excluding goodwill: | |||
Gross Carrying Amount | 930 | 930 | |
Accumulated Amortization | (825) | (667) | |
Net Carrying Amount | 105 | 263 | |
Order Backlog [Member] | |||
Intangible assets excluding goodwill: | |||
Gross Carrying Amount | 2,300 | 1,600 | |
Accumulated Amortization | (800) | (597) | |
Net Carrying Amount | $ 1,500 | $ 1,003 |
Goodwill and Intangible Asset43
Goodwill and Intangible Assets - Future Estimated Amortization Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 25,990 | |
2,019 | 21,450 | |
2,020 | 19,199 | |
2,021 | 16,898 | |
2,022 | 6,535 | |
Thereafter | 5,530 | |
Net Carrying Amount | $ 95,602 | $ 61,708 |
Fair Value Measurements and I44
Fair Value Measurements and Investments - Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 17, 2015 |
Assets | |||
Cash equivalents | $ 286,072 | $ 345,426 | |
Short-term investments | 45,526 | 51,325 | |
Total financial assets | 287,345 | 370,727 | |
Liabilities | |||
Acquisition-related contingent consideration | 634 | 8,233 | |
Money market funds | |||
Assets | |||
Cash equivalents | 231,828 | 304,020 | |
Corporate debt securities | |||
Assets | |||
Cash equivalents | 2,139 | ||
Short-term investments | 11,600 | 24,450 | |
Commercial paper | |||
Assets | |||
Cash equivalents | 7,995 | 13,243 | |
Short-term investments | 27,939 | 22,979 | |
U.S. agency securities | |||
Assets | |||
Cash equivalents | 1,996 | ||
Short-term investments | 3,991 | 1,946 | |
U.S. Treasury securities | |||
Assets | |||
Short-term investments | 1,996 | 1,950 | |
Level 1 [Member] | |||
Assets | |||
Total financial assets | 231,828 | 304,020 | |
Level 1 [Member] | Money market funds | |||
Assets | |||
Cash equivalents | 231,828 | 304,020 | |
Level 2 [Member] | |||
Assets | |||
Total financial assets | 55,517 | 66,707 | |
Level 2 [Member] | Corporate debt securities | |||
Assets | |||
Cash equivalents | 2,139 | ||
Short-term investments | 11,600 | 24,450 | |
Level 2 [Member] | Commercial paper | |||
Assets | |||
Cash equivalents | 7,995 | 13,243 | |
Short-term investments | 27,939 | 22,979 | |
Level 2 [Member] | U.S. agency securities | |||
Assets | |||
Cash equivalents | 1,996 | ||
Short-term investments | 3,991 | 1,946 | |
Level 2 [Member] | U.S. Treasury securities | |||
Assets | |||
Short-term investments | 1,996 | 1,950 | |
Level 3 [Member] | |||
Liabilities | |||
Acquisition-related contingent consideration | $ 634 | $ 8,233 | |
Senior Notes [Member] | 0.75% Convertible Senior Notes [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Interest rate, stated percentage | 0.75% | ||
Senior Notes [Member] | 0.75% Convertible Senior Notes [Member] | Level 2 [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Interest rate, stated percentage | 0.75% | ||
Convertible debt, fair value disclosures | $ 285,453 |
Fair Value Measurements and I45
Fair Value Measurements and Investments - Reconciliation of Acquisition-related Contingent Consideration Liability (Details) - Contingent Consideration - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 8,233 | $ 0 |
Additions during the period | 0 | 9,162 |
Payments during the period | (6,066) | (260) |
Adjustments to fair value during the period recorded in General and administrative expenses | (1,533) | (669) |
Ending balance | $ 634 | $ 8,233 |
Fair Value Measurements and I46
Fair Value Measurements and Investments - Investments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Cash and Cash Equivalents, and Investments [Line Items] | |||
Cash and cash equivalents, amortized cost | $ 286,072,000 | $ 345,427,000 | |
Cash and cash equivalents, unrealized gains | 0 | 0 | |
Cash and cash equivalents, unrealized losses | 0 | (1,000) | |
Cash and cash equivalents, fair value | 286,072,000 | 345,426,000 | |
Short-term investments, amortized cost | 45,535,000 | 51,332,000 | |
Short-term investments, unrealized gains | 0 | 1,000 | |
Short-term investments, unrealized losses | (9,000) | (8,000) | |
Short-term investments, fair value | $ 45,526,000 | $ 51,325,000 | |
Maximum investment maturity term | 1 year | 1 year | |
Other-than-temporary impairments | $ 0 | $ 0 | $ 0 |
Cash | |||
Schedule of Cash and Cash Equivalents, and Investments [Line Items] | |||
Cash and cash equivalents, amortized cost | 44,253,000 | 26,024,000 | |
Cash and cash equivalents, unrealized gains | 0 | 0 | |
Cash and cash equivalents, unrealized losses | 0 | 0 | |
Cash and cash equivalents, fair value | 44,253,000 | 26,024,000 | |
Money market funds | |||
Schedule of Cash and Cash Equivalents, and Investments [Line Items] | |||
Cash and cash equivalents, amortized cost | 231,828,000 | 304,020,000 | |
Cash and cash equivalents, unrealized gains | 0 | 0 | |
Cash and cash equivalents, unrealized losses | 0 | 0 | |
Cash and cash equivalents, fair value | 231,828,000 | 304,020,000 | |
Corporate debt securities | |||
Schedule of Cash and Cash Equivalents, and Investments [Line Items] | |||
Cash and cash equivalents, amortized cost | 2,140,000 | ||
Cash and cash equivalents, unrealized gains | 0 | ||
Cash and cash equivalents, unrealized losses | (1,000) | ||
Cash and cash equivalents, fair value | 2,139,000 | ||
Short-term investments, amortized cost | 11,607,000 | 24,458,000 | |
Short-term investments, unrealized gains | 0 | 0 | |
Short-term investments, unrealized losses | (7,000) | (8,000) | |
Short-term investments, fair value | 11,600,000 | 24,450,000 | |
Commercial paper | |||
Schedule of Cash and Cash Equivalents, and Investments [Line Items] | |||
Cash and cash equivalents, amortized cost | 7,995,000 | 13,243,000 | |
Cash and cash equivalents, unrealized gains | 0 | 0 | |
Cash and cash equivalents, unrealized losses | 0 | 0 | |
Cash and cash equivalents, fair value | 7,995,000 | 13,243,000 | |
Short-term investments, amortized cost | 27,939,000 | 22,979,000 | |
Short-term investments, unrealized gains | 0 | 0 | |
Short-term investments, unrealized losses | 0 | 0 | |
Short-term investments, fair value | 27,939,000 | 22,979,000 | |
U.S. agency securities | |||
Schedule of Cash and Cash Equivalents, and Investments [Line Items] | |||
Cash and cash equivalents, amortized cost | 1,996,000 | ||
Cash and cash equivalents, unrealized gains | 0 | ||
Cash and cash equivalents, unrealized losses | 0 | ||
Cash and cash equivalents, fair value | 1,996,000 | ||
Short-term investments, amortized cost | 3,992,000 | 1,945,000 | |
Short-term investments, unrealized gains | 0 | 1,000 | |
Short-term investments, unrealized losses | (1,000) | 0 | |
Short-term investments, fair value | 3,991,000 | 1,946,000 | |
U.S. Treasury securities | |||
Schedule of Cash and Cash Equivalents, and Investments [Line Items] | |||
Short-term investments, amortized cost | 1,997,000 | 1,950,000 | |
Short-term investments, unrealized gains | 0 | 0 | |
Short-term investments, unrealized losses | (1,000) | 0 | |
Short-term investments, fair value | $ 1,996,000 | $ 1,950,000 |
Commitments and Contingencies47
Commitments and Contingencies (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jul. 31, 2015 | Jul. 31, 2012lease_agreement | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Operating leases rent expense | $ 8,010 | $ 5,054 | $ 3,831 | ||
Capital Leases | |||||
2,018 | 39 | ||||
2,019 | 37 | ||||
2,020 | 21 | ||||
2,021 | 0 | ||||
2,022 | 0 | ||||
Thereafter | 0 | ||||
Total minimum capital lease payments | 97 | ||||
Less: Amount representing interest | (8) | ||||
Present value of capital lease obligations | 89 | ||||
Less: Current portion | (34) | $ (32) | |||
Long-term portion of capital lease obligations | 55 | ||||
Operating Leases | |||||
2,018 | 17,985 | ||||
2,019 | 15,625 | ||||
2,020 | 7,661 | ||||
2,021 | 4,924 | ||||
2,022 | 4,919 | ||||
Thereafter | 6,692 | ||||
Total minimum operating lease payments | 57,806 | ||||
Commitments and contingencies: | |||||
Minimum purchase commitments | 35,861 | ||||
Long-term minimum purchase commitments through due in three years | $ 17,417 | ||||
Capital leases | |||||
Commitments and contingencies: | |||||
Number of lease agreement | lease_agreement | 2 | ||||
Interest rate, stated percentage | 6.50% | 4.50% |
Convertible Senior Notes (Detai
Convertible Senior Notes (Details) $ / shares in Units, shares in Thousands | Jun. 17, 2015USD ($)sharesd$ / shares | Dec. 11, 2013USD ($) | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Debt: | |||||
Proceeds from issuance of convertible senior notes, net of discount | $ 0 | $ 0 | $ 223,790,000 | ||
Convertible senior notes converted to equity | 193,153,000 | 0 | 0 | ||
Repayment of convertible notes | 14,000 | 0 | 0 | ||
Fair value of stock issued upon conversion of convertible notes | 8,307,000 | 6,059,000 | 1,745,000 | ||
Loss on conversion of convertible notes | 2,696,000 | 0 | $ 0 | ||
Senior Notes [Member] | |||||
Debt: | |||||
Net carrying amount | 197,858,000 | 366,541,000 | |||
Carrying amount of the equity component net | 54,049,000 | 97,342,000 | |||
0.75% Convertible Senior Notes [Member] | Senior Notes [Member] | |||||
Debt: | |||||
Face amount | $ 200,000,000 | ||||
Debt interest rate | 0.75% | ||||
Option to purchase additional principal amount | $ 30,000,000 | ||||
Agent's discount and issuance costs | 6,581,000 | ||||
Proceeds from issuance of convertible senior notes, net of discount | $ 223,419,000 | ||||
Conversion ratio, initial | 12.3108 | ||||
Number of shares convertible, initial rate | shares | 2,831 | ||||
Conversion price per share, initial (in dollars per share) | $ / shares | $ 81.23 | ||||
Percentage of principle amount that are redeemable | 100.00% | ||||
Threshold percentage of stock price trigger | 130.00% | ||||
Threshold trading days | d | 20 | ||||
Number of threshold consecutive trading days | d | 30 | ||||
Number of consecutive business days following consecutive trading day period | 5 days | ||||
Number of consecutive trading days | 5 days | ||||
Trading price as percentage of closing price of common stock | 98.00% | ||||
Effective rate used to amortization debt discount | 6.50% | ||||
Net carrying amount | $ 174,359,000 | 197,858,000 | 186,104,000 | ||
Carrying amount of the equity component net | 55,641,000 | 54,049,000 | 54,049,000 | ||
Issuance cost recorded at equity | $ 1,592,000 | ||||
1.25% Convertible Senior Notes [Member] | Senior Notes [Member] | |||||
Debt: | |||||
Face amount | $ 175,000,000 | ||||
Debt interest rate | 1.25% | ||||
Option to purchase additional principal amount | $ 26,250,000 | ||||
Agent's discount and issuance costs | 5,803,000 | ||||
Proceeds from issuance of convertible senior notes, net of discount | $ 195,446,000 | ||||
Effective rate used to amortization debt discount | 6.50% | ||||
Net carrying amount | $ 156,672,000 | 0 | 180,437,000 | ||
Carrying amount of the equity component net | 44,578,000 | $ 0 | $ 43,293,000 | ||
Issuance cost recorded at equity | 1,285,000 | ||||
Convertible senior notes converted to equity | $ 201,250,000 | ||||
Shares of commons stock issued for conversion of convertible notes | shares | 5,159 | ||||
Repayment of convertible notes | $ 14,000 | ||||
Fair value of stock issued upon conversion of convertible notes | 473,176,000 | ||||
Loss on conversion of convertible notes | $ 2,696,000 | ||||
Common Stock [Member] | |||||
Debt: | |||||
Shares of commons stock issued for conversion of convertible notes | shares | 5,159 |
Convertible Senior Notes (Liabi
Convertible Senior Notes (Liability Component of Notes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 17, 2015 | Dec. 11, 2013 | |
Interest Expense, Debt | |||||
Interest expense related to contractual interest coupon | $ 4,123 | $ 4,240 | $ 3,441 | ||
Amortization of debt discount and issuance costs | 21,789 | 20,842 | 14,933 | ||
Loss on conversion | 2,696 | 0 | 0 | ||
Total | 28,608 | 25,082 | $ 18,374 | ||
Senior Notes [Member] | |||||
Liability component: | |||||
Principal | 230,000 | 431,250 | |||
Less: debt discount and issuance costs, net of amortization | (32,142) | (64,709) | |||
Net carrying amount | 197,858 | 366,541 | |||
Equity component | 54,049 | 97,342 | |||
Senior Notes [Member] | 0.75% Convertible Senior Notes [Member] | |||||
Liability component: | |||||
Principal | 230,000 | 230,000 | |||
Less: debt discount and issuance costs, net of amortization | (32,142) | (43,896) | |||
Net carrying amount | 197,858 | 186,104 | $ 174,359 | ||
Equity component | 54,049 | 54,049 | 55,641 | ||
Issuance cost recorded at equity | $ 1,592 | ||||
Senior Notes [Member] | 1.25% Convertible Senior Notes [Member] | |||||
Liability component: | |||||
Principal | 0 | 201,250 | |||
Less: debt discount and issuance costs, net of amortization | 0 | (20,813) | |||
Net carrying amount | 0 | 180,437 | $ 156,672 | ||
Equity component | 0 | $ 43,293 | 44,578 | ||
Issuance cost recorded at equity | $ 1,285 | ||||
Interest Expense, Debt | |||||
Loss on conversion | $ 2,696 |
Equity Award Plans - Stock-Base
Equity Award Plans - Stock-Based Compensation Plans (Details) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2017planshares | |
Stock-based compensation: | |||
Equity incentive plans held by the Company (number of plans) | plan | 6 | ||
Employee Stock Option [Member] | |||
Stock-based compensation: | |||
Term until award expiration | 10 years | ||
Employee Stock Option [Member] | Minimum [Member] | |||
Stock-based compensation: | |||
Award vesting period | 3 years | ||
Employee Stock Option [Member] | Maximum [Member] | |||
Stock-based compensation: | |||
Term until award expiration | 10 years | ||
Award vesting period | 4 years | ||
Restricted Stock [Member] | |||
Stock-based compensation: | |||
Award vesting period | 3 years | 2 years | |
2002 Equity Incentive Plan [Member] | |||
Stock-based compensation: | |||
Shares available for future grant under the stock plans | 0 | ||
FireLayers Equity Incentive Plans [Member] | |||
Stock-based compensation: | |||
Shares available for future grant under the stock plans | 0 | ||
2012 Equity Incentive Plan [Member] | |||
Stock-based compensation: | |||
Shares available for future grant under the stock plans | 5,283,000 | ||
Shares authorized for issuance (in shares) | 20,316,000 | ||
2012 Equity Incentive Plan [Member] | Restricted Stock [Member] | |||
Stock-based compensation: | |||
Award vesting period | 4 years | ||
Various Acquisitions [Member] | |||
Stock-based compensation: | |||
Equity incentive plans held by the Company (number of plans) | plan | 4 | ||
FireLayers [Member] | |||
Stock-based compensation: | |||
Equity incentive plans held by the Company (number of plans) | plan | 2 |
Equity Award Plans - Stock Opti
Equity Award Plans - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock option activity under the Plan: | ||||
Outstanding, beginning of period (in shares) | 3,183 | 4,042 | 5,288 | |
Options assumed per acquisitions (in shares) | 13 | 20 | ||
Options granted (in shares) | 237 | 284 | ||
Options exercised (in shares) | (1,126) | (1,089) | (1,429) | |
Options forfeited and canceled (in shares) | (30) | (27) | (101) | |
Outstanding, end of period (in shares) | 2,040 | 3,183 | 4,042 | 5,288 |
Exercisable (in shares) | 1,809 | |||
Vested and expected to vest (in shares) | 2,040 | |||
Shares subject to options outstanding, weighted average exercise price: | ||||
Balance at beginning of period (USD per share) | $ 18.91 | $ 15.10 | $ 11.06 | |
Options assumed per acquisitions (USD per share) | 20.27 | 4.33 | ||
Options granted (USD per share) | 54.11 | 57.47 | ||
Options exercised (USD per share) | 11.04 | 11.59 | 8.31 | |
Options forfeited and canceled (USD per share) | 45.54 | 43.15 | 19.11 | |
Balance at end of period (USD per share) | 22.88 | $ 18.91 | $ 15.10 | $ 11.06 |
Exercisable (in USD per share) | 19.37 | |||
Vested and expected to vest (in USD per share) | $ 22.88 | |||
Weighted average remaining contractual term | 5 years 2 months 1 day | 5 years 4 months 21 days | 5 years 9 months 6 days | 6 years 3 months 22 days |
Weighted average remaining contractual term, Exercisable | 4 years 10 months | |||
Weighted average remaining contractual term, Vested and expected to vest | 5 years 2 months 1 day | |||
Aggregate intrinsic value | $ 134,511 | $ 164,842 | $ 201,736 | $ 196,608 |
Aggregate intrinsic value, exercisable | 125,608 | |||
Aggregate intrinsic value, vested and expected to vest | 134,511 | |||
Total intrinsic value of options exercised | 82,131 | 58,061 | 72,993 | |
Total proceeds from option exercises | 12,383 | 12,620 | 11,868 | |
Fair value of option grants that vested | $ 7,450 | $ 9,106 | $ 9,520 | |
Employee Stock Option [Member] | ||||
Stock-based compensation: | ||||
Weighted-average fair value of stock options granted (in dollars per share) | $ 24.04 | $ 28.20 | ||
Fair value assumptions: | ||||
Dividend yield | 0.00% | 0.00% | 0.00% | |
Shares subject to options outstanding, weighted average exercise price: | ||||
Unrecognized stock options compensation expense | $ 7,341 | |||
Average remaining vesting term | 1 year 7 months 24 days | |||
Minimum [Member] | Employee Stock Option [Member] | ||||
Fair value assumptions: | ||||
Expected life (in years) | 5 years 3 months 22 days | 5 years 3 months 22 days | ||
Volatility | 50.00% | |||
Risk-free interest rate | 1.30% | 1.60% | ||
Maximum [Member] | Employee Stock Option [Member] | ||||
Fair value assumptions: | ||||
Expected life (in years) | 6 years 29 days | 6 years 29 days | ||
Volatility | 52.00% | |||
Risk-free interest rate | 1.40% | 1.80% |
Equity Award Plans - RSUs and P
Equity Award Plans - RSUs and PSUs (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
RSU's Outstanding, Number of Shares: | |||
Awards assumed per business acquisition (in shares) | 8 | ||
RSUs Outstanding, Granted Fair Value Per Unit: | |||
Awards assumed per business acquisitions (USD per share) | $ 91.10 | ||
RSUs and PSUs [Member] | |||
RSU's Outstanding, Number of Shares: | |||
Awarded at beginning of period (in shares) | 3,465 | 3,311 | 2,934 |
Awards granted (in shares) | 1,865 | 1,605 | 1,541 |
Awards vested (in shares) | (1,320) | (1,116) | (897) |
Awards forfeited (in shares) | (478) | (335) | (267) |
Awarded at end of period (in shares) | 3,540 | 3,465 | 3,311 |
RSUs Outstanding, Granted Fair Value Per Unit: | |||
Awarded at beginning of period (USD per share) | $ 56.11 | $ 47.94 | $ 37.45 |
Awards granted (USD per share) | 84.91 | 64.08 | 61.48 |
Awards vested (USD per share) | 52.36 | 44.73 | 38.70 |
Awards forfeited (USD per share) | 63.44 | 51.40 | 41.89 |
Awarded at end of period (USD per share) | $ 71.77 | $ 56.11 | $ 47.94 |
Restricted stock units (RSUs) [Member] | |||
RSUs Outstanding, Granted Fair Value Per Unit: | |||
Unamortized stock-based compensation expense | $ 197,681 | ||
Average remaining vesting term | 2 years 10 months 24 days | ||
Performance Shares [Member] | |||
RSUs Outstanding, Granted Fair Value Per Unit: | |||
Awards granted (in shares) | 177 | 146 | 189 |
Unamortized stock-based compensation expense | $ 16,367 |
Equity Award Plans - Stock Bonu
Equity Award Plans - Stock Bonus Awards and Other Liability Awards (Details) - USD ($) shares in Thousands, $ in Thousands | Mar. 06, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Stock Bonus Awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total accrued liability | $ 8,502 | $ 7,855 | |||
Common stock issued (shares) | 85 | 93 | 30 | ||
Stock-based compensation expense | $ 6,616 | $ 5,288 | $ 3,792 | ||
Liability Awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock issued (shares) | 29 | 45 | |||
Stock-based compensation expense | $ 2,293 | $ 2,299 | $ 1,884 | ||
Fair value of liability awards issued | $ 6,885 | ||||
Award vesting period | 3 years |
Equity Award Plans - Employee S
Equity Award Plans - Employee Stock Purchase Plan (Details) - ESPP 2012 Plan [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Mar. 30, 2012 | Mar. 30, 2012 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Stock-based compensation: | |||||
Shares authorized for issuance (in shares) | 745 | 745 | |||
Period for annual increase | 8 years | ||||
Percentage increase of outstanding shares | 1.00% | ||||
Maximum number of additional shares to be authorized (in shares) | 1,490 | 1,490 | |||
Shares available for future grant under the stock plans | 1,608 | ||||
Fair value assumptions: | |||||
Expected life (in years) | 6 months | 6 months | 6 months | ||
Dividend yield | 0.00% | 0.00% | 0.00% | ||
Shares issued (in shares) | 183 | 200 | 161 | ||
Weighted average price per share (USD per share) | $ 73.02 | $ 45.65 | $ 41.84 | ||
Unamortized stock-based compensation expense | $ 1,864 | ||||
Average remaining vesting term | 4 months 14 days | ||||
Minimum [Member] | |||||
Fair value assumptions: | |||||
Volatility | 29.00% | 37.00% | 42.00% | ||
Risk-free interest rate | 0.76% | 0.38% | 0.08% | ||
Maximum [Member] | |||||
Fair value assumptions: | |||||
Volatility | 37.00% | 48.00% | 47.00% | ||
Risk-free interest rate | 1.16% | 0.45% | 0.33% |
Equity Award Plans - Restricted
Equity Award Plans - Restricted Stock and Deferred Shares (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares granted in period | 54 | |||
Fair value of shares granted | $ 2,357 | |||
Award vesting period | 3 years | 2 years | ||
Stock-based compensation expense | $ 2,887 | $ 546 | ||
Unrecognized stock-based compensation expense | 5,236 | |||
FireLayers [Member] | Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares granted in period | 111 | |||
Fair value of shares granted | $ 8,669 | |||
Restricted Stock [Member] | Weblife [Domain] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of share-based deferred compensation issued | 9,652 | |||
Deferred compensation expense recognized | $ 205 | |||
Number of shares deferred | 107 | |||
Unrecognized stock-based compensation expense | $ 9,447 | |||
Maximum [Member] | Restricted Stock [Member] | Weblife [Domain] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period of deferred compensation awards | 4 years | |||
Minimum [Member] | Restricted Stock [Member] | Weblife [Domain] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period of deferred compensation awards | 3 years |
Net Loss per Share - Antidiluti
Net Loss per Share - Antidilutive Common Shares (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 8,717 | 15,023 | 15,651 |
Stock options to purchase common stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 2,040 | 3,183 | 4,042 |
Restricted stock units (RSUs) [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 3,540 | 3,465 | 3,311 |
Employee stock purchase plan [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 118 | 92 | 81 |
Common stock subject to repurchase [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 90 | 135 | 54 |
Bonus shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 98 | 159 | 174 |
1.25% Convertible Senior Notes [Member] | Convertible senior notes [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 5,158 | 5,158 |
0.75% Convertible Senior Notes [Member] | Convertible senior notes [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 2,831 | 2,831 | 2,831 |
Segment Reporting - Revenue by
Segment Reporting - Revenue by Solution (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Revenue from External Customer [Line Items] | |||
Number of segments | segment | 1 | ||
Revenue | $ 515,289 | $ 375,496 | $ 265,397 |
Protection and Advanced Threat [Member] | |||
Revenue from External Customer [Line Items] | |||
Revenue | 387,695 | 272,621 | 183,050 |
Archiving, Privacy and Governance [Member] | |||
Revenue from External Customer [Line Items] | |||
Revenue | $ 127,594 | $ 102,875 | $ 82,347 |
Segment Reporting - by Geograph
Segment Reporting - by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment reporting: | |||
Revenue | $ 515,289 | $ 375,496 | $ 265,397 |
Long-lived assets | 73,617 | 52,523 | |
United States [Member] | |||
Segment reporting: | |||
Revenue | 428,775 | 312,601 | 218,424 |
Long-lived assets | 66,134 | 43,789 | |
Rest of world [Member] | |||
Segment reporting: | |||
Revenue | 86,514 | 62,895 | $ 46,973 |
Long-lived assets | $ 7,483 | $ 8,734 |
Income Taxes - Domestic and For
Income Taxes - Domestic and Foreign Components of Loss Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | |||
Domestic | $ (124,727) | $ (112,904) | $ (101,453) |
Foreign | 30,440 | 2,682 | 3,376 |
Loss before income taxes | $ (94,287) | $ (110,222) | $ (98,077) |
Income Taxes - Expense for Inco
Income Taxes - Expense for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current tax expense: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 80 | 72 | 54 |
Foreign | 5,923 | 795 | 514 |
Total current | 6,003 | 867 | 568 |
Deferred tax expense: | |||
Federal | (12,268) | 411 | 105 |
State | (266) | 0 | (45) |
Foreign | (3,419) | (292) | 7 |
Total deferred | (15,953) | 119 | 67 |
(Benefit from) provision for income taxes | $ (9,950) | $ 986 | $ 635 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax [Line Items] | ||||
Federal statutory income tax rate | 34.00% | 34.00% | 34.00% | |
Valuation allowance increase (decrease) | $ 53,545 | $ 39,489 | ||
Impact of Tax Act and other tax law changes | 87,495 | 0 | $ 0 | |
Deferred income taxes expense (benefits) | (15,953) | 119 | $ 67 | |
Accrued interest and penalties | 90 | 45 | ||
Liability recorded on interest and penalties | 288 | 182 | ||
Uncertain tax benefits that would affect effective tax rate if recognized | 4,700 | 922 | ||
Federal [Member] | ||||
Income Tax [Line Items] | ||||
Provisional deferred tax benefits related to reduction in US deferred tax liability on acquired intangibles | 2,024 | |||
Impact of Tax Act and other tax law changes | 87,621 | |||
Operating loss carryforwards | 659,587 | 533,825 | ||
State [Member] | ||||
Income Tax [Line Items] | ||||
Operating loss carryforwards | 323,013 | 305,493 | ||
Foreign [Member] | ||||
Income Tax [Line Items] | ||||
Operating loss carryforwards | 0 | 7,045 | ||
Research tax credit carryforward [Member] | Federal [Member] | ||||
Income Tax [Line Items] | ||||
Tax credit carryforward | 16,122 | 9,231 | ||
Research tax credit carryforward [Member] | State [Member] | ||||
Income Tax [Line Items] | ||||
Tax credit carryforward | 18,362 | 11,195 | ||
Research tax credit carryforward [Member] | Foreign [Member] | ||||
Income Tax [Line Items] | ||||
Tax credit carryforward | 2,375 | $ 2,010 | ||
Accounting Standards Update 2016-09 [Member] | ||||
Income Tax [Line Items] | ||||
Valuation allowance increase (decrease) | 79,336 | |||
1.25% Convertible Senior Notes [Member] | ||||
Income Tax [Line Items] | ||||
Valuation allowance increase (decrease) | 2,554 | |||
Cloudmark [Member] | ||||
Income Tax [Line Items] | ||||
Valuation allowance increase (decrease) | 1,525 | |||
Cloudmark [Member] | ||||
Income Tax [Line Items] | ||||
Deferred income taxes expense (benefits) | (7,904) | |||
Weblife [Domain] | ||||
Income Tax [Line Items] | ||||
Deferred income taxes expense (benefits) | $ (4,440) | |||
Forecast [Member] | ||||
Income Tax [Line Items] | ||||
Federal statutory income tax rate | 21.00% |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | |||
Tax at federal statutory rate | $ (32,058) | $ (37,476) | $ (33,346) |
Foreign income tax rate differential | (3,076) | (187) | (270) |
State, net of federal benefit | (3,378) | (3,478) | (2,952) |
Stock compensation charges | (32,150) | 3,517 | 2,393 |
SubPart F and other permanent items | 2,757 | 1,422 | 1,434 |
Provision to return and other | 2,480 | 1,419 | 749 |
Research and development credits | (7,713) | (4,464) | (2,920) |
Uncertain tax positions | 5,888 | 749 | 561 |
Impact of Tax Act and other tax law changes | 87,495 | 0 | 0 |
Valuation allowance | (30,195) | 39,484 | 34,986 |
(Benefit from) provision for income taxes | $ (9,950) | $ 986 | $ 635 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 158,535 | $ 119,168 |
Tax credit carryforwards | 24,700 | 13,966 |
Research expenditures | 859 | 2,401 |
Deferred revenue | 14,460 | 13,698 |
Stock compensation | 14,842 | 18,509 |
Fixed assets | 274 | 207 |
Accruals and other | 10,107 | 11,554 |
Gross deferred tax assets | 223,777 | 179,503 |
Valuation allowance | (194,943) | (141,398) |
Total deferred tax assets | 28,834 | 38,105 |
Deferred tax liabilities: | ||
Intangible assets and other | (12,086) | (8,793) |
Deferred commissions | (7,881) | (9,545) |
Convertible senior notes | (6,857) | (21,541) |
Total deferred tax liabilities | (26,824) | (39,879) |
Total net deferred tax assets | 2,010 | |
Total net deferred liabilities | (1,774) | |
Non-current deferred income tax assets (included in other long-term assets) | 2,543 | 2,121 |
Non-current deferred income tax liabilities (included in long-term liabilities) | $ 533 | $ 3,895 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 5,846 | $ 4,820 | $ 4,229 |
Increase in balances related to tax positions taken during the current period | 8,160 | 1,262 | 806 |
Increase in balances related to tax positions taken during the prior period | 45 | 20 | 0 |
Decrease in balances related to tax positions taken during the prior period | (2) | (17) | (130) |
Decrease in balances related to statute expirations during the current period | (188) | (239) | (85) |
Ending balance | $ 13,861 | $ 5,846 | $ 4,820 |
Subsequent Event (Details)
Subsequent Event (Details) - Forecast [Member] - Wombat [Member] - Subsequent Event [Member] $ in Millions | Feb. 02, 2018USD ($) |
Subsequent Event [Line Items] | |
Purchase price | $ 225 |
Percentage of consideration to be placed into escrow | 10.00% |