Document and Entity Information
Document and Entity Information Document - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 07, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | PFPT | ||
Entity Registrant Name | PROOFPOINT, INC. | ||
Entity Central Index Key (CIK) | 0001212458 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Common Stock, $0.0001 par value per share | ||
Security Exchange Name | NASDAQ | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity File Number | 001-35506 | ||
Entity Tax Identification Number | 51-0414846 | ||
Entity Address, Address Line One | 892 Ross Drive | ||
Entity Address, City or Town | Sunnyvale | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94089 | ||
City Area Code | 408 | ||
Local Phone Number | 517-4710 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 57,003,654 | ||
Entity Public Float | $ 6,612 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Proxy Statement for its 2020 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed with the Securities and Exchange Commission, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2019. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 847,555 | $ 185,392 |
Short-term investments | 43,385 | 46,307 |
Accounts receivable, net | 265,741 | 199,194 |
Inventory | 1,249 | 481 |
Deferred product costs | 2,723 | 1,800 |
Deferred commissions | 47,250 | 37,391 |
Prepaid expenses and other current assets | 22,081 | 16,872 |
Total current assets | 1,229,984 | 487,437 |
Property and equipment, net | 73,512 | 70,627 |
Operating lease right-of-use asset | 51,852 | |
Long-term deferred product costs | 581 | 303 |
Goodwill | 687,517 | 460,425 |
Intangible assets, net | 186,023 | 136,645 |
Long-term deferred commissions | 90,305 | 69,989 |
Other assets | 17,737 | 7,592 |
Total assets | 2,337,511 | 1,233,018 |
Current liabilities: | ||
Accounts payable | 16,311 | 20,237 |
Accrued liabilities | 119,423 | 90,719 |
Deferred rent | 829 | |
Operating lease liabilities | 20,202 | |
Deferred revenue | 615,874 | 490,296 |
Total current liabilities | 771,810 | 602,081 |
Convertible senior notes | 749,620 | |
Long-term deferred rent | 3,757 | |
Long-term operating lease liabilities | 36,223 | |
Other long-term liabilities | 19,172 | 6,812 |
Long-term deferred revenue | 168,189 | 107,834 |
Total liabilities | 1,745,014 | 720,484 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Convertible preferred stock, $0.0001 par value; 5,000 shares authorized; no shares issued and outstanding as of December 31, 2019 and 2018 | 0 | 0 |
Common stock, $0.0001 par value; 200,000 shares authorized; 56,784 and 55,149 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively | 6 | 6 |
Additional paid-in capital | 1,318,084 | 1,107,953 |
Accumulated other comprehensive income (loss) | 1 | (7) |
Accumulated deficit | (725,594) | (595,418) |
Total stockholders’ equity | 592,497 | 512,534 |
Total liabilities and stockholders’ equity | $ 2,337,511 | $ 1,233,018 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Number of shares of common stock reserved for future issuance | ||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common stock issued (in shares) | 56,784,000 | 55,149,000 |
Common stock outstanding (in shares) | 56,784,000 | 55,149,000 |
Par value of common stock (USD per share) | $ 0.0001 | $ 0.0001 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Revenue: | ||||
Total revenue | $ 888,190 | $ 716,994 | $ 519,681 | |
Cost of revenue: | ||||
Total cost of revenue | [1],[2] | 236,214 | 201,761 | 143,378 |
Gross profit | 651,976 | 515,233 | 376,303 | |
Operating expense: | ||||
Research and development | [1],[2] | 230,463 | 185,391 | 129,803 |
Sales and marketing | [1],[2] | 416,717 | 345,368 | 248,694 |
General and administrative | [1],[2] | 109,727 | 86,185 | 52,735 |
Total operating expense | [1],[2] | 756,907 | 616,944 | 431,232 |
Operating loss | (104,931) | (101,711) | (54,929) | |
Interest expense | (12,526) | (16,761) | (28,608) | |
Other income, net | 7,109 | 1,491 | 3,785 | |
Loss before income taxes | (110,348) | (116,981) | (79,752) | |
(Provision for) benefit from income taxes | (19,917) | 13,232 | 9,950 | |
Net loss | $ (130,265) | $ (103,749) | $ (69,802) | |
Net loss per share, basic and diluted | $ (2.33) | $ (1.99) | $ (1.58) | |
Weighted average shares outstanding, basic and diluted | 55,902 | 52,111 | 44,258 | |
Subscription | ||||
Revenue: | ||||
Total revenue | $ 875,006 | $ 704,400 | $ 506,355 | |
Cost of revenue: | ||||
Total cost of revenue | [1],[2] | 206,997 | 180,253 | 125,832 |
Hardware and Service | ||||
Revenue: | ||||
Total revenue | 13,184 | 12,594 | 13,326 | |
Cost of revenue: | ||||
Total cost of revenue | [1],[2] | $ 29,217 | $ 21,508 | $ 17,546 |
[1] | (1) Includes stock-based compensation expense as follows: Cost of subscription revenue $ 16,966 $ 14,012 $ 10,635 Cost of hardware and services revenue $ 4,001 $ 2,287 $ 1,893 Research and development $ 50,739 $ 40,204 $ 30,588 Sales and marketing $ 61,858 $ 50,320 $ 33,962 General and administrative $ 42,761 $ 35,885 $ 20,382 | |||
[2] | (2) Includes intangible amortization expense as follows: Cost of subscription revenue $ 30,760 $ 26,971 $ 14,512 Research and development $ — $ 45 $ 60 Sales and marketing $ 14,888 $ 14,141 $ 3,934 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible amortization expense | $ 45,648 | $ 41,157 | $ 18,506 |
Cost of subscription revenue | |||
Stock-based compensation expense | 16,966 | 14,012 | 10,635 |
Intangible amortization expense | 30,760 | 26,971 | 14,512 |
Cost of hardware and services revenue | |||
Stock-based compensation expense | 4,001 | 2,287 | 1,893 |
Research and development | |||
Stock-based compensation expense | 50,739 | 40,204 | 30,588 |
Intangible amortization expense | 45 | 60 | |
Sales and marketing | |||
Stock-based compensation expense | 61,858 | 50,320 | 33,962 |
Intangible amortization expense | 14,888 | 14,141 | 3,934 |
General and administrative | |||
Stock-based compensation expense | $ 42,761 | $ 35,885 | $ 20,382 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net loss | $ (130,265) | $ (103,749) | $ (69,802) |
Other comprehensive income (loss), net of tax: | |||
Unrealized gain (loss) on investments, net | 8 | 2 | (2) |
Comprehensive loss | $ (130,257) | $ (103,747) | $ (69,804) |
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] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect adjustment from adoption of new accounting pronouncement | $ 0 | $ 999 | $ (999) | ||
Beginning balance at Dec. 31, 2016 | 96,379 | $ 4 | 514,034 | $ (7) | (417,652) |
Beginning balance (shares) at Dec. 31, 2016 | 43,015 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (69,802) | (69,802) | |||
Unrealized gain (loss) on short-term investments | (2) | (2) | |||
Conversion of convertible senior notes to common stock (Note 10) | 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 3) | 424 | 424 | |||
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 | 299,115 | $ 5 | 787,572 | (9) | (488,453) |
Ending balance (shares) at Dec. 31, 2017 | 50,325 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect adjustment from adoption of new accounting pronouncement | (3,216) | (3,216) | |||
Net loss | (103,749) | (103,749) | |||
Unrealized gain (loss) on short-term investments | 2 | 2 | |||
Conversion of convertible senior notes to common stock (Note 10) | 213,306 | $ 1 | 213,305 | ||
Conversion of convertible senior notes to common stock (shares) | 2,928 | ||||
Stock-based compensation expense | 131,178 | 131,178 | |||
Common stock issued | 36,449 | 36,449 | |||
Common stock issued (shares) | 2,463 | ||||
Tax withholding upon vesting of restricted stock awards | (60,551) | (60,551) | |||
Tax withholding upon vesting of restricted stock awards (shares) | (567) | ||||
Ending balance at Dec. 31, 2018 | 512,534 | $ 6 | 1,107,953 | (7) | (595,418) |
Ending balance (shares) at Dec. 31, 2018 | 55,149 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect adjustment from adoption of new accounting pronouncement | 89 | 89 | |||
Net loss | (130,265) | (130,265) | |||
Unrealized gain (loss) on short-term investments | 8 | 8 | |||
Stock-based compensation expense | 159,694 | 159,694 | |||
Acquisition of businesses (Note 3) | 892 | 892 | |||
Acquisition of businesses (shares) | 72 | ||||
Common stock issued | 40,744 | 40,744 | |||
Common stock issued (shares) | 2,148 | ||||
Tax withholding upon vesting of restricted stock awards | (69,351) | (69,351) | |||
Tax withholding upon vesting of restricted stock awards (shares) | (585) | ||||
Embedded conversion feature on convertible senior notes (Note 10) | 163,023 | 163,023 | |||
Purchase of capped calls (Note 10) | (84,871) | (84,871) | |||
Ending balance at Dec. 31, 2019 | $ 592,497 | $ 6 | $ 1,318,084 | $ 1 | $ (725,594) |
Ending balance (shares) at Dec. 31, 2019 | 56,784 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
Net loss | $ (130,265) | $ (103,749) | $ (69,802) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 80,332 | 73,553 | 42,098 |
Stock-based compensation | 176,325 | 142,708 | 97,460 |
Change in fair value of contingent consideration | 0 | (79) | (1,533) |
Amortization of debt issuance costs and accretion of debt discount | 11,708 | 8,383 | 21,789 |
Amortization of deferred commissions | 50,415 | 37,076 | 28,476 |
Noncash lease costs | 23,339 | 0 | 0 |
Loss on conversion of convertible notes | 0 | 7,207 | 2,696 |
Deferred income taxes | (2,371) | (15,258) | (15,953) |
Other | 1,855 | 1,469 | (348) |
Changes in assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable | (62,239) | (81,890) | (31,744) |
Inventory | (768) | 249 | (132) |
Deferred product costs | (1,203) | (302) | 338 |
Deferred commissions | (80,590) | (66,254) | (45,910) |
Prepaid expenses | (7,915) | (1,905) | (1,663) |
Other current assets | 57 | 2,155 | (139) |
Long-term assets | (499) | 311 | (3,429) |
Accounts payable | (3,569) | 8,396 | (1,648) |
Accrued liabilities | 33,191 | 17,184 | 14,539 |
Deferred rent | 0 | (101) | 1,867 |
Operating lease liabilities | (24,529) | 0 | 0 |
Deferred revenue | 179,234 | 155,591 | 116,724 |
Net cash provided by operating activities | 242,508 | 184,744 | 153,686 |
Cash flows from investing activities | |||
Proceeds from maturities of short-term investments | 93,838 | 66,080 | 102,556 |
Proceeds from sales of short-term investments | 0 | 11,931 | 0 |
Purchase of short-term investments | (90,955) | (78,688) | (96,741) |
Purchase of property and equipment | (35,193) | (29,522) | (46,958) |
Receipts from escrow account | 0 | 3,321 | 6,066 |
Acquisitions of business, net of cash and restricted cash acquired | (317,155) | (223,786) | (155,350) |
Net cash used in investing activities | (349,465) | (250,664) | (190,427) |
Cash flows from financing activities | |||
Proceeds from issuance of common stock | 28,091 | 27,579 | 25,725 |
Withholding taxes related to restricted stock net share settlement | (66,006) | (60,706) | (42,823) |
Proceeds from issuance of convertible senior notes, net of costs | 901,293 | 0 | 0 |
Purchase of capped calls | (84,640) | 0 | 0 |
Repayments of equipment loans and capital lease obligations | 0 | (37) | (34) |
Repayment of convertible notes | 0 | (142) | (14) |
Contingent consideration payments | 0 | (555) | (6,066) |
Net cash provided by (used in) financing activities | 778,738 | (33,861) | (23,212) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (26) | (727) | 1,076 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 671,755 | (100,508) | (58,877) |
Cash, cash equivalents, and restricted cash | |||
Beginning of period | 186,152 | 286,660 | 345,537 |
End of period | 857,907 | 186,152 | 286,660 |
Supplemental disclosures of cash flow information | |||
Cash paid for interest | 0 | 1,249 | 4,236 |
Cash paid for taxes | 10,770 | 120 | 5,311 |
Supplemental disclosure of noncash investing and financing activities | |||
Unpaid purchases of property and equipment and asset retirement obligations | 3,483 | 2,706 | 3,349 |
Operating lease right-of-use assets exchanged for lease obligations | 15,668 | 0 | 0 |
Liability awards converted to equity | 12,651 | 8,870 | 8,307 |
Convertible senior notes converted to equity | 0 | 213,306 | 193,153 |
Reconciliation of cash, cash equivalents and restricted cash as shown in the consolidated statement of cash flows | |||
Cash and cash equivalents | 847,555 | 185,392 | 286,072 |
Restricted cash included in prepaid expenses and other current assets | 3,734 | 283 | 315 |
Restricted cash included in other non-current assets | 6,618 | 477 | 273 |
End of period | $ 857,907 | $ 186,152 | $ 286,660 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
The Company and Summary of Significant Accounting Policies | 1. 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, secure communication, phishing simulation and security awareness computer-based training. Correction of Classification of Short-term and Long-term Deferred Revenue Management has determined that in the Company’s consolidated financial statements for the year ended December 31, 2018, short-term deferred revenue was overstated by $2,446, or 0.5%, in its consolidated balance sheet as of December 31, 2018. The Company has revised the December 31, 2018 consolidated balance sheet to correct the classification from short-term deferred revenue to long-term deferred revenue. The correction had no impact on the results of operations or cash flows of the Company. 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 3 “Acquisitions”. The consolidated financial statements include the results of operations from these business combinations from their date of acquisition. Reclassifications Certain reclassifications have been made to prior year balances in order to conform to the current period presentation. “Interest income” has been reclassified from “Interest expense” to “Other income, net” in the consolidated statements of operations. The reclassifications had no impact on previously reported net loss or accumulated deficit. 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, 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 $ (1,655) , $ (943) and $ 574 for the years ended December 31, 201 9 , 2018 and 2017 , 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, 2019 and December 31, 2018 consist primarily of finished goods. Revenue Recognition Effective January 1, 2018, the Company adopted ASC 606 using the full retrospective method. Refer to Note 2 for a detailed discussion of accounting policies related to revenue recognition, including deferred revenue, deferred commissions and deferred product costs. 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. 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, 2019. 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, 2019, 2018 and 2017. 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, 2019, 2018 and 2017. 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. No impairment indicators were identified by the Company as of December 31, 2019. Intangible assets consist of developed technology, customer relationships, non-compete arrangements, trademarks and patents, order backlog, and in-process research and development asset. 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 Developed technology 2 7 Customer relationships 2 8 Trade names and trademarks 1 5 Patents 4 5 Order backlog 1 3 The in-process research and development asset is not amortized until the associated project is completed. 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. Research and Development Research and development expense consists primarily of personnel costs, consulting services, allocated facilities costs and depreciation. Research and development costs are expensed as incurred. Employee Benefit Plans The Company’s tax-deferred savings plan is qualified under Section 401(k) of the United States Internal Revenue Code. Employees may make voluntary, tax-deferred contributions to the 401(k) Plan up to the statutorily prescribed annual limit. The Company makes discretionary matching contributions to the 401(k) Plan on behalf of employees up to the limit determined by the Board of Directors. The Company contributed $2,816 and $1,563 to the 401(k) Plan in 2019 and 2018. There were no contributions made by the Company in 2017. 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 is measured based on the value of the Company’s common stock on the grant date. The actual number of PSUs earned and eligible to vest are determined based on the Company’s achievement of the financial and operational performance conditions pre-defined when the awards are granted. The Company recognizes share-based compensation expense for the PSUs on a straight-line basis over the requisite service period for each separately vesting portion of the award when it is probable that the performance conditions will be achieved. The Company reassesses the probability of vesting at each reporting period for awards with performance conditions and adjusts stock-based compensation cost based on its probability assessment. The Company recognizes a cumulative catch up adjustment for changes in its probability assessment in subsequent reporting periods. 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. Comprehensive Loss Comprehensive loss includes all changes in equity that are not the result of transactions with stockholders. The Company’s comprehensive loss consists of its net loss and changes in unrealized gains (losses) from its available-for-sale investments. The Company had no material reclassifications out of accumulated other comprehensive income into net loss in 2019, 2018 and 2017. 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 2019 In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02” or “ASC 842”), which requires lessees to record most leases on their balance sheets but recognize the expenses in their statements of operations in a manner similar to current practice. ASU 2016-02 states that a lessee needs to recognize a lease liability for the obligation to make lease payments and a right-to-use(“ROU”) asset for the right to use the underlying asset for the lease term. The Company adopted ASU 2016-02 in the first quarter of 2019, utilizing the modified retrospective transition approach through a cumulative-effect adjustment to the opening accumulated deficit balance as of January 1, 2019. Refer to Note 8 “Leases” for more information regarding the impact of the adoption of ASU 2016-02 on the Company’s financial statements. Recent Accounting Pronouncements Not Yet Effective In December 2019, the FASB issued ASU No. 2019-02, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract 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 the adoption of ASU 20 17 - 04 to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Revenue, Deferred Revenue and D
Revenue, Deferred Revenue and Deferred Contract Costs | 12 Months Ended |
Dec. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue, Deferred Revenue and Deferred Contract Costs | 2. Revenue, Deferred Revenue and Deferred Contract Costs The core principle of ASC 606 is to recognize revenue to depict the transfer of services or products to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or products. The Company applies significant judgment in identifying and evaluating any terms and conditions in contracts which may impact revenue recognition. The principle is achieved through the following five-step approach: • Identification of the contract, or contracts, with the customer - The Company considers the terms and conditions of the contract and its customary business practice in identifying its contracts under ASC 606. The Company determines it has a contract with a customer when the contract is approved, the Company can identify each party’s rights regarding the services and products to be transferred, the Company can identify the payment terms for the services and products, the Company has determined the customer has the ability and intent to pay and the contract has commercial substance. At contract inception, the Company evaluates whether two or more contracts should be combined and accounted for as a single contract and whether the combined contract or single contract includes more than one performance obligation. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer. • Identification of the performance obligation in the contract - Performance obligations promised in a contract are identified based on the services or products that will be transferred to the customer that are both i) capable of being distinct, whereby the customer can benefit from the service or product either on its own or together with other resources that are readily available from third parties or from the Company, and ii) distinct in the context of the contract, whereby the transfer of the services or products is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services or products, the Company applies judgment to determine whether promised services or products are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised services or products are accounted for as a combined performance obligation. • Determination of the transaction price - The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services and products to the customer. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company’s contracts contain a significant financing component. • Allocation of the transaction price to the performance obligations in the contract - If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price, or SSP, basis. • Recognition of revenue when, or as, the Company satisfies a performance obligation - The Company recognizes revenue when control of the services or products are transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or products. The Company records its revenue net of any value added or sales tax. 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. Payment terms on invoiced amounts are typically 30 to 45 days. Disaggregation of Revenue The Company derives its revenue primarily from: (1) subscription service revenue; (2) subscription software revenue, and (3) hardware and services, which include professional service and training revenue provided to customers related to their use of the platform. The following table presents the Company’s revenue disaggregation: Year Ended December 31, 2019 2018 2017 Subscription service revenue $ 849,267 $ 681,138 $ 489,274 Subscription software revenue 25,739 23,262 17,081 Hardware and services 13,184 12,594 13,326 Total revenue $ 888,190 $ 716,994 $ 519,681 Subscription service revenue Subscription service revenue is derived from a subscription-based enterprise licensing model with contract terms typically ranging from one to three years, and consists of (1) subscription fees from the licensing of the Company’s security-as-a-service platform and it’s various components, (2) subscription fees for software with support and related future updates where the software updates are critical to the customers’ ability to derive benefit from the software due to the fast changing nature of the technology. These function together as one performance obligation, and (3) subscription fees for the right to access the Company’s customer support services for software with significant standalone functionality and support services for hardware. The hosted on-demand service arrangements do not provide customers with the right to take possession of the software supporting the hosted services. Support revenue is derived from ongoing security updates, upgrades, bug fixes, and maintenance. A time-elapsed method is used to measure progress because the Company transfers control evenly over the contractual period. Accordingly, the fixed consideration related to subscription service revenue is generally recognized on a straight-line basis over the contract term beginning on the date access is provided, as long as other revenue recognition criteria have been met. Most of the Company’s contracts are non-cancelable over the contract term. Customers typically have the right to terminate their contract for cause if the Company fails to perform in accordance with the contractual terms. Some of the Company’s customers have the option to purchase additional subscription services at a stated price. These options are evaluated on a case-by-case basis but generally do not provide a material right as they are priced at or above the Company’s SSP and, as such, would not result in a separate performance obligation. Subscription software revenue Subscription software revenue is primarily derived from term-based software that is deployed on the customers’ own servers and has significant standalone functionality, is recognized upon transfer of control to the customer. The control for subscription software is transferred at the later of delivery to the customer or the software license start date. Hardware and services Hardware revenue consists of amounts derived from the sale of the Company’s on-premise hardware appliance, which is recognized upon passage of control, which occurs upon shipment of the product. Professional services revenue consists of fees associated with consulting, implementation and training services for assisting customers in implementing and expanding the use of the Company’s services and products. These services are distinct from subscription, subscription software licenses and hardware. Professional services do not result in significant customization of the Company’s services and products. The Company recognizes revenue related to the professional services as they are performed. Contracts with multiple performance obligations Most of the Company’s contracts with customers contain multiple performance obligations that are distinct and accounted for separately. The transaction price allocated to subscription services and subscription software that does not have significant standalone functionality is determined by considering factors such as historical pricing practices, and the selling price of hardware and professional services is estimated using a cost plus model. The selling price for support of a functional subscription software license is calculated as a percentage of functional subscription software license value which is derived by analyzing internal pricing practice, customer expectations, and industry practice. Variable consideration Revenue from sales is recorded at the net sales price, which is the transaction price, and includes estimates of variable consideration. The amount of variable consideration that is included in the transaction price is constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue will not occur when the uncertainty is resolved. If the Company’s services or products do not meet certain service level commitments, the Company’s customers are entitled to receive service credits representing a form of variable consideration. The Company has not historically experienced any significant incidents affecting the defined levels of reliability and performance as required by the Company’s subscription contracts. Accordingly, any estimated refunds related to these contracts in the consolidated financial statements are not material during the periods presented. Unbilled accounts receivables Unbilled accounts receivable represents amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for software licenses already delivered and professional services already performed, but billed in arrears and for which the Company believes it has an unconditional right to payment. The unbilled accounts receivable balance, included in accounts receivable in the consolidated balance sheet, was $3,261 Deferred commissions The Company capitalizes sales commissions and associated payroll taxes paid to internal sales personnel, and referral fees paid to independent third-parties, that are incremental to the acquisition of customer contracts. These costs are recorded as deferred commissions on the consolidated balance sheets. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are incremental and would not have occurred absent the customer contract. Sales commissions for renewal of a subscription contract are not considered commensurate with the commissions paid for the acquisition of the initial subscription contract given the substantive difference in commission rate between new and renewal contracts. Commissions paid upon the initial acquisition of a contract are amortized over an estimated period of benefit of five years while commissions paid related to renewal contracts are amortized over a contractual renewal period. Amortization is recognized based on the expected future revenue streams under the customer contracts. Amortization of deferred sales commissions is included in sales and marketing expense in the accompanying consolidated statements of operations. The Company determines the period of benefit for commissions paid for the acquisition of the initial subscription contract by taking into consideration its initial estimated customer life and the technological life of the Company’s software and related significant features. The Company classifies deferred commissions as current or long-term based on the timing of when the Company expects to recognize the expense. The Company periodically reviews these deferred commission costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred contract acquisition costs. There were no material impairment losses recorded during the periods presented. For the years ended December 31, 2019, 2018 and 2017, the Company capitalized $80,590, $66,254 and $45,910 of commission costs, respectively, and amortized $50,415, $37,076 and $28,476, respectively. Deferred product costs Deferred product costs are the incremental costs to fulfill a contract that are directly associated with each non-cancellable customer contract and primarily consist of royalty payments made to third parties, from whom the Company has obtained licenses to integrate certain software into its products. The deferred product costs are recognized based on the contractual term, and included in cost of revenue in the accompanying consolidated statements of operations. The Company classifies deferred product costs as current or long-term based on the timing of when the Company expects to recognize the expense. For the years ended December 31, 2019, 2018 and 2017, the Company capitalized $4,727, $2,765 and $2,510 of deferred product costs, respectively, and amortized $3,531, $2,463 and $2,849, respectively. Deferred revenue The Company records deferred revenue when cash payments are received, or invoices are issued in advance of the Company’s performance, and generally recognizes revenue over the contractual term. The Company recognized revenue of $490,172, $363,483 and $242,428 during the years ended December 31, 2019, 2018 and 2017, respectively, that was included in the deferred revenue balances at the beginning of the respective periods. The Company recognized $1,906, $2,901 and $1,055 of revenue during the years ended December 31, 2019, 2018 and 2017, respectively, related to the performance obligations satisfied in prior periods. The acquisition of ObserveIT, Ltd. (see Note 3 “Acquisitions”) on November 25, 2019, increased deferred revenue by $6,700, of which $681 was recognized in the year ended December 31, 2019. Remaining performance obligations Contracted revenue as of December 31, 2019 that has not yet been recognized (“contracted not recognized”) was $676,707, which includes deferred revenue and non-cancellable amounts that will be invoiced and recognized as revenue in future periods and excludes contracts with an original expected length of one year or less. The Company expects 59% 38% |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | 3. 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 the acquisitions described below, 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 the acquired companies’ net identifiable assets acquired and, as a result, goodwill was recorded in connection with the acquisitions. Goodwill related to the acquisitions of ObserveIT, Ltd. and Meta Networks, Ltd. is deductible for tax purposes, and goodwill related to the acquisition of Wombat Security Technologies, Inc. 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. 2019 Acquisitions ObserveIT, Ltd. On November 25, 2019 (the “ObserveIT Acquisition Date”), pursuant to the terms of the share purchase agreement, the Company acquired all shares of ObserveIT, Ltd. (“ObserveIT”). ObserveIT provides detection and prevention from insider threats solutions including data loss detection and response, user activity monitoring, incident response and compliance. By combining ObserveIT’s endpoint agent technology and data risk analytics with the Company’s information classification, threat detection and intelligence, the Company has an insight into user activity with their sensitive data, wherever it resides, and the ability to immediately remediate risk. 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 estimated fair values of acquired tangible assets, intangible assets and liabilities at the ObserveIT 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 ObserveIT Acquisition Date. At the ObserveIT Acquisition Date, the consideration transferred was $213,747, net of cash acquired of $4,752. Of the consideration transferred, $3,250 was held in escrow to secure indemnification obligations, which has not been released as of the issuance of these consolidated financial statements. The revenue from ObserveIT was not material in 2019, and due to the continued integration of the combined businesses, it was impractical to determine the earnings. Per the terms of the share purchase agreement, unvested stock options held by ObserveIT employees were canceled and exchanged for the Company’s unvested stock options. The fair value of $446 of these unvested awards was attributed to pre-combination services and was included in consideration transferred. The fair value of $5,427 was allocated to post-combination services. The unvested awards are subject to the recipient’s continued service with the Company and $5,427 is recognized ratably as stock-based compensation expense over the required remaining service period. Also, as part of the share purchase three-year The Discounted Cash Flow Method was used to value the acquired developed technology, in-process research and development asset, customer relationships and order backlog. The Relief from Royalty Method was used to value the acquired trade name. Management applied significant judgment in estimating the fair values of these intangible assets, which involved the use of significant assumptions with respect to forecasted revenue, forecasted operating results and discount rates. The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Estimated Fair Value Estimated Useful Life (in years) Current assets $ 10,603 N/A Fixed assets 2,132 N/A Operating lease right-of-use asset 2,669 N/A Other assets 652 N/A Customer relationships 15,800 5 Order backlog 1,300 1 Core/developed technology 35,400 4 Trade name 400 2 In-process research and development * 20,600 N/A Operating lease liabilities (3,317 ) N/A Deferred revenue (6,700 ) N/A Other liabilities (5,414 ) N/A Goodwill 144,374 Indefinite $ 218,499 * Purchased in-process research and development will be accounted for as an indefinite-lived intangible asset until the underlying project is completed or abandoned. Meta Networks, Ltd. On May 15, 2019 (the “Meta Networks Acquisition Date”), pursuant to the terms of the share purchase agreement, the Company acquired all shares of Meta Networks, Ltd. (“Meta Networks”), an innovator in zero trust network access. By combining Meta Networks’ innovative zero trust network access technology with the Company’s people-centric security capabilities the Company expects to make it far simpler for enterprises to precisely control employee and contractor access to on-premises, cloud and consumer applications. 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 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 Meta Networks Acquisition Date. At the Meta Networks Acquisition Date, the consideration transferred was $104,664, net of cash acquired of $104. Of the consideration transferred, $12,500 was held in escrow to secure indemnification obligations, which has not been released as of the issuance of these consolidated financial statements. The revenue from Meta Networks was not material in 2019, and due to the continued integration of the combined businesses, it was impractical to determine the earnings. Per the terms of the share purchase agreement, unvested stock options and unvested restricted stock units held by Meta Networks employees were canceled and exchanged for the Company’s unvested stock options and unvested restricted stock units, respectively. The fair value of $184 of these unvested awards was attributed to pre-combination services and was included in consideration transferred. The fair value of $12,918 was allocated to post-combination services. The unvested awards are subject to the recipient’s continued service with the Company, and $12,918 will be recognized ratably as stock-based compensation expense over the required remaining service period. Also, as part of the share purchase three-year The Cost to Recreate Method was used to value the acquired developed technology asset. Management applied judgment in estimating the fair value of this intangible asset, which involved the use of significant assumptions such as the cost and time to build the acquired technology, developer’s profit and rate of return. The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Fair Value Estimated Useful Life (in years) Current assets $ 356 N/A Fixed assets 68 N/A Core/developed technology 21,000 3 Deferred tax liability, net (1,854 ) N/A Other liabilities (671 ) N/A Goodwill 85,869 Indefinite $ 104,768 2018 Acquisition Wombat Security Technologies, Inc. On February 28, 2018 (the “Wombat Acquisition Date”), pursuant to the terms of the merger agreement, the Company acquired all shares of Wombat Security Technologies, Inc. (“Wombat”), a leader for phishing simulation and security awareness computer-based training. By collecting data from Wombat’s PhishAlarm solution, the Company has access to data on phishing campaigns as seen by non-Company customers, providing broader visibility and insight to the Proofpoint Nexus platform. With this acquisition, the Company’s customers can leverage the industry’s first solution combining the Company’s advanced threat protection with Wombat’s phishing simulation and computer-based security awareness training. With the combined solutions, the Company’s customers can: • use real detected phishing attacks for simulations, assessing users based on the threats that are actually targeting them; • both investigate and take action on user-reporting phishing, leveraging orchestration and automation to find real attacks, quarantine emails in users’ inboxes, and lock user accounts to limit risk; and • train users in the moment immediately after they click for both simulated and real phishing attacks. 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. At the Wombat Acquisition Date, the consideration transferred was $225,366, net of cash acquired of $13,452. Per the terms of the merger agreement, unvested in-the-money stock options held by Wombat employees were canceled and paid off using the same amount per option as for the common share less applicable exercise price for each option. The fair value of $1,580 of these unvested options was attributed to pre-combination service and included in consideration transferred. The fair value of unvested options of $1,571 was allocated to post-combination services and expensed in the three months ended March 31, 2018. Also, as part of the merger agreement, 51 shares of the Company’s common stock were deferred for certain key employees with the total fair value of $5,458 (see Note 11 “Equity Award Plans”), 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 remaining service period. The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Fair Value Estimated Useful Life (in years) Current assets $ 23,344 N/A Fixed assets 954 N/A Customer relationships 37,800 7 Order backlog 6,800 2 Core/developed technology 35,200 4 Trade name 2,400 4 Deferred revenue (14,700 ) N/A Deferred tax liability, net (14,725 ) N/A Other liabilities (1,120 ) N/A Goodwill 162,865 Indefinite $ 238,818 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 was incorporated into Company’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. At the Cloudmark Acquisition Date, the consideration transferred was $107,283, net of cash acquired of $31,973. 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 pre-combination services and included in consideration transferred. The fair value of $1,180 was allocated to post-combination services. The unvested awards are subject to the recipient’s continued service with the Company, and $ 1,180 is 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: Fair Value Estimated Useful Life (in years) Current assets $ 37,390 N/A Fixed assets 543 N/A Non-current assets 74 N/A Liabilities (4,422 ) N/A Deferred revenue (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 93,776 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 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 WebLife Acquisition Date. At the WebLife Acquisition Date, the consideration transferred was $48,765, net of cash acquired of $278. 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 pre-combination service and included in consideration transferred. The fair value of $1,468 was allocated to post-combination services. The unvested awards are subject to the recipient’s continued service with the Company, and $1,468 is 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 11 “Equity Award Plans”), 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 remaining period. The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Fair Value Estimated Useful Life (in years) Current assets $ 534 N/A Fixed assets 23 N/A Liabilities (88 ) N/A Deferred revenue (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 Pro Forma Financial Information (unaudited) The following unaudited pro forma financial information presents the combined results of operations for the years ended December 31, 2019, 2018 and 2017 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. 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, 2019 2018 2017 Total revenue $ 911,968 $ 743,345 $ 594,966 Net loss $ (158,448 ) $ (152,238 ) $ (89,221 ) Basic and diluted net loss per share $ (2.83 ) $ (2.92 ) $ (2.02 ) The unaudited pro forma financial information includes acquisition-related transaction costs of $3,294 recorded within operating expenses for the year ended December 31, 2019. |
Concentration of Risks
Concentration of Risks | 12 Months Ended |
Dec. 31, 2019 | |
Risks And Uncertainties [Abstract] | |
Concentration of Risks | 4. 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, 2019, two partners accounted for 12% and 11% of total revenue, respectively. During the years ended December 31, 2018 and 2017, one partner accounted for 12% of total revenue in each year. These partners sold to a number of end users, none of which accounted for more than 10% of our total revenue in 2019, 2018 and 2017. Two partners accounted for 13% and 11% of total accounts receivable, respectively, as of December 31, 2019. Two partners accounted for 12% of total accounts receivable each as of December 31, 2018. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Components | 5. Balance Sheet Components Property and equipment at December 31, 2019 and December 31, 2018 consist of the following: Useful Life December 31, (in years) 2019 2018 Computer equipment 2 to 4 $ 170,010 $ 142,777 Software 2 to 5 5,184 3,782 Furniture 5 4,244 3,637 Office equipment 2 to 5 658 585 Leasehold improvements 5 years, or lease term, if shorter 14,819 13,129 Other 2 408 59 Construction in progress 3,630 1,088 198,953 165,057 Less: Accumulated depreciation (125,441 ) (94,430 ) $ 73,512 $ 70,627 Depreciation expense for the years ended December 31, 2019, 2018 and 2017 was $34,684, $32,396, and $23,591, respectively, including depreciation expense for assets under capital leases of $29 and $31 for the years ended December 31, 2018 and 2017, respectively. The allowance for doubtful accounts receivable was not material as of December 31, 2019 and 2018. Accrued liabilities at December 31, 2019 and December 31, 2018 consisted of the following: December 31, 2019 2018 Accrued compensation $ 73,384 $ 55,924 ESPP contributions 4,138 3,224 Customer deposits 12,316 5,961 Accrued royalties 1,528 1,373 Other 28,057 24,237 $ 119,423 $ 90,719 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets The goodwill activity and balances are presented below: Year Ended December 31, 2019 2018 Beginning balance $ 460,425 $ 297,704 Acquisitions during period 230,243 162,865 Purchase accounting adjustments (3,151 ) (144 ) Closing balance $ 687,517 $ 460,425 Intangible Assets Intangible assets consisted of the following: December 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 210,469 $ (110,284 ) $ 100,185 $ 154,069 $ (79,525 ) $ 74,544 Customer relationships 87,200 (25,608 ) 61,592 71,400 (15,166 ) 56,234 Trade names and patents 3,730 (2,349 ) 1,381 3,330 (1,430 ) 1,900 Order backlog 8,100 (6,360 ) 1,740 6,800 (2,833 ) 3,967 In-process research and development 21,125 — 21,125 — — — $ 330,624 $ (144,601 ) $ 186,023 $ 235,599 $ (98,954 ) $ 136,645 Amortization expense of intangibles totaled $45,648, $41,157 and $18,506 during the years ended December 31, 2019, 2018 and 2017, respectively. Future estimated amortization costs of intangible assets as of December 31, 2019 are presented below: Year Ended December 31, 2020 $ 57,990 2021 53,810 2022 31,548 2023 21,983 2024 13,686 Thereafter 7,006 $ 186,023 |
Fair Value Measurements and Inv
Fair Value Measurements and Investments | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Investments | 7. 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. The following tables summarize, for each category of assets or liabilities carried at fair value, the respective fair value as of December 31, 2019 and December 31, 2018 and the classification by level of input within the fair value hierarchy: December 31, 2019 Total Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 815,158 $ 815,158 $ — $ — Commercial paper 9,989 — 9,989 — Short-term investments: Corporate debt securities 13,454 — 13,454 — Commercial paper 27,932 — 27,932 — U.S. Treasury securities 1,999 — 1,999 — Total financial assets $ 868,532 $ 815,158 $ 53,374 $ — December 31, 2018 Total Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 133,202 $ 133,202 $ — $ — Commercial paper 12,478 — 12,478 — Short-term investments: Corporate debt securities 13,470 — 13,470 — Commercial paper 30,838 — 30,838 — U.S. Treasury securities 1,999 — 1,999 — Total financial assets $ 191,987 $ 133,202 $ 58,785 $ — Based on quoted market prices as of December 31, 2019, the fair value of the 2024 Notes (Note 10) was approximately $951,050, 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, 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 Additions during the period — Payments during the period (555 ) Adjustments to fair value during the period recorded in General and administrative expenses (79 ) Balance as of December 31, 2018 $ — 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, 2019 and December 31, 2018 were as follows: December 31, 2019 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents: Cash $ 22,408 $ — $ — $ 22,408 Money market funds 815,158 — — 815,158 Commercial paper 9,989 — — 9,989 Total $ 847,555 $ — $ — $ 847,555 Short-term investments: Corporate debt securities $ 13,453 $ 2 $ (1 ) $ 13,454 Commercial paper 27,932 — — 27,932 U.S. Treasury securities 1,998 1 — 1,999 Total $ 43,383 $ 3 $ (1 ) $ 43,385 December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents: Cash $ 39,712 $ — $ — $ 39,712 Money market funds 133,202 — — 133,202 Commercial paper 12,478 — — 12,478 Total $ 185,392 $ — $ — $ 185,392 Short-term investments: Corporate debt securities $ 13,477 $ — $ (7 ) $ 13,470 Commercial paper 30,838 — — 30,838 U.S. Treasury securities 1,999 — — 1,999 Total $ 46,314 $ — $ (7 ) $ 46,307 As of December 31, 2019 and 2018, 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, 2019, 2018 and 2017. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 8. Leases The Company determines if an arrangement is, or contains, a lease at inception. Operating leases are included in operating right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments based on the lease contracts. Operating lease ROU assets and liabilities were recognized at adoption date, or lease commencement date if the commencement date was after January 1, 2019, based on the present value of lease payments over the remaining lease term. The Company’s lease contracts do not provide an implicit rate, as such the Company used its incremental borrowing rate based on the information available at adoption date , or lease commencement date if the commencement date was after January 1, 2019, in determining the present value of lease payments. The operating lease ROU assets also include s any lease payments made to the lessors at or before the lease commencement date, and exclude s lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. The Company has operating leases for corporate offices, research and development facilities, sales and marketing offices and data centers. The Company adopted ASC 842 in the first quarter of 2019, utilizing the modified retrospective transition approach through a cumulative-effect adjustment to the opening accumulated deficit as of January 1, 2019. Upon adoption of ASC 842, the Company elected: • the package of practical expedients which allows for not reassessing (1) whether existing contracts contain leases, (2) the lease classification for existing leases, and (3) whether existing initial direct costs meet the new definition; • the practical expedient in ASC Subtopic 842-10 to not separate non-lease components from lease components for its real estate and data center leases and instead account for each separate lease component, and non-lease components associated with that lease component, as a single lease component; and • not to recognize ROU assets and lease liabilities for short-term leases, which have a lease term of twelve months or less. The following table summarizes the effects of adopting ASC 842: Ending Balance as of December 31, 2018 Adjustments Opening Balance as of January 1, 2019 Assets Prepaid expenses and other current assets $ 16,872 $ (81 ) $ 16,791 Operating lease right-of-use assets $ — $ 59,549 $ 59,549 Liabilities Accounts payable $ 20,237 $ (216 ) $ 20,021 Deferred rent $ 829 $ (829 ) $ — Operating lease liabilities $ — $ 24,820 $ 24,820 Long-term operating lease liabilities $ — $ 39,361 $ 39,361 Long-term deferred rent $ 3,757 $ (3,757 ) $ — Stockholders’ Equity Accumulated deficit $ (595,418 ) $ 89 $ (595,329 ) The Company’s real estate leases have remaining lease terms for one to ten years, some of which include options to extend the lease period up to ten years. The data center leases have remaining lease terms of one year to three years, some of which have renewal periods of one year. In October 2018, the Company entered into a 127-month lease agreement to lease approximately 242,400 square feet of corporate office space in Sunnyvale, California, which is expected to become the Company’s new corporate headquarters beginning in 2020. The property will be constructed by the landlord, with the completion date expected to occur between August and November 2020, which is when the lease is expected to commence. As such, no ROU assets or related lease liabilities were recorded in the financial statements in 2019. The lease contains a rent holiday period, scheduled rent increases, lease incentives, and renewal option which allow the lease term to be extended by five years. Base rental payments will be approximately $161,300 over the lease term. The components of lease expense were as follows: Year Ended December 31, 2019 Operating lease cost $ 26,115 Short-term lease cost 2,846 Variable lease cost 3,444 Total lease cost $ 32,405 Supplemental information related to leases was as follows: Year Ended December 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 27,104 Right-of-use assets obtained in exchange for operating lease obligations $ 15,668 Weighted-average remaining lease term - operating leases 4 years Weighted-average discount rate - operating leases 5.04 % Maturities of lease liabilities as of December 31, 2019 were as follows: Operating leases Year ending December 31, 2020 $ 20,858 2021 13,531 2022 11,091 2023 6,357 2024 4,304 Thereafter 7,867 Total lease payments 64,008 Less imputed interest (7,583 ) Total $ 56,425 Premises rent expense was $10,944 and $8,010 for the years ended December 31, 2018 and 2017, respectively. As previously disclosed in the Company’s 2018 Annual Report on Form 10-K and under ASC-840, future minimum lease payments for operating leases having initial or remaining noncancelable lease terms in excess of one year as of December 31, 2018 were as follows: Liability as of December 31, 2018 Operating Leases 2019 $ 25,313 2020 17,535 2021 19,155 2022 21,581 2023 19,609 Thereafter 129,154 Total minimum lease payments $ 232,347 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Purchase Commitments As of December 31, 2019, the Company’s minimum purchase commitments for products and services were $100,215, of which $58,137 represent long-term purchase commitments through the year ending December 31, 2023. 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, 2019 | |
Senior Longterm Notes Current And Noncurrent [Abstract] | |
Convertible Senior Notes | 10. Convertible Senior Notes 0.25% Convertible Senior Notes due 2024 On August 23, 2019, the Company issued $920,000 aggregate principal amount of 0.25% Convertible Senior Notes due 2024 (the “2024 Notes”). The offering represented $800,000 aggregate principal amount of the 2024 Notes plus the full exercise of the initial buyers’ option to purchase up to an additional $120,000 aggregate principal amount. used of the net proceeds from the offering to pay the cost of the capped call transactions described below. The Company expects to use the remaining net proceeds for general corporate purposes, which may include acquisitions or other strategic transactions . The initial conversion rate is 6.4941 shares of the Company’s common stock per $1 principal amount of the 2024 Notes, which equates to an initial conversion price of $153.99 per share of common stock. Throughout the term of the 2024 Notes, the conversion rate may be adjusted upon the occurrence of certain events. At the Company’s option, on or after August 20, 2022, the Company will be able to redeem all or a portion of the 2024 Notes at 100% of the principal amount, plus any accrued and unpaid interest, under certain conditions. The Company may redeem the 2024 Notes in shares of the Company’s common stock, cash, or some combination of each. P rior to April 15, 2024, the 2024 Notes will be convertible at the option of the holders only upon the satisfaction of certain conditions and during certain periods upon the following circumstances: • during any calendar quarter commencing after December 31, 2019, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the preceding calendar quarter is greater than or equal to 130 % of the applicable conversion price on each such trading day; • during the five business day period after any five consecutive trading day period in which the trading price per $1 principal amount of the 2024 Notes for each trading day of that five day consecutive trading day 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 in which case, the Company will increase the conversion rate for the 2024 Notes so surrendered for conversion in connection with such redemption notice in accordance with the indenture; or • upon the occurrence of specified corporate transactions, as described in the indenture. On or after April 15, 2024, holders may convert their 2024 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 2024 Notes also have the right to require the Company to repurchase all or a portion of the 2024 Notes at 100% of the principal amount, plus accrued and unpaid interest, if any, upon the occurrence of certain fundamental changes to the Company. In accounting for the issuance of the 2024 Notes, the Company separated the 2024 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of similar liabilities that do not have associated convertible features. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the principal amount of the 2024 Notes. The Company bifurcated the conversion option of the 2024 Notes from the debt instrument, classified the conversion option in equity and will accrete the resulting debt discount as interest expense over the contractual term of the 2024 Notes using the effective interest rate method. The equity component is not remeasured while the 2024 Notes continue to meet the conditions for equity classification. Upon issuance of the 2024 Notes, after allocation of debt discount and issuance costs, the Company recorded $737,912 as debt and $163,023 as additional paid in capital within stockholders’ equity. The effective interest rate of the liability component of the 2024 Notes is 4.76%. This interest rate was based on the interest rates of similar liabilities held by other companies with similar credit risk ratings at the time of issuance that did not have associated convertible features. 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 2024 Notes. The equity issuance costs of $3,450 were recorded as a decrease to additional paid-in capital at the issuance date. The following table represents the carrying value of the 2024 Notes as of December 31, 2019: December 31, 2019 December 31, 2018 Liability component: Principal $ 920,000 $ — Less: debt discount and issuance costs, net of amortization (170,380 ) — Net carrying amount $ 749,620 $ — Equity component (1) $ 163,023 $ — (1) Recorded on the consolidated balance sheets as additional paid-in capital, net of the $3,450 issuance costs in equity. Capped Calls In connection with the issuance of the 2024 Notes, including the initial purchasers’ exercise of the option to purchase additional 2024 Notes, the Company entered into privately negotiated capped call transactions with certain counterparties (the “Capped Calls”). The Capped Calls are expected to reduce potential dilution to the Company’s common stock upon conversion of the 2024 Notes and/or offset any cash payments that the Company is required to make in excess of the principal amount of the converted 2024 Notes, as the case may be, with such reduction and/or offset subject to a cap. The Capped Calls have a cap price equal to $223.98 per share, subject to certain adjustments, and expire on August 15, 2024. The Capped Calls are subject to adjustment upon the occurrence of specified extraordinary events affecting the Company, including merger events, tender offers and announcement events. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings and hedging disruptions. For accounting purposes, the Capped Calls are separate transactions, and not part of the terms of the 2024 Notes. As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders’ equity and are not accounted for as derivatives. The premium paid for the purchase of the Capped Calls in the amount of $83,720 and related issuance cost of $1,151 have been recorded as a reduction to additional paid-in capital and will not be remeasured. 0.75% Convertible Senior Notes On June 17, 2015, the Company issued $200,000 principal amount of 0.75% Convertible Senior Notes (the “2020 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 2020 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 2020 Notes offering were approximately $223,419. The Company used the net proceeds for working capital and general corporate purposes, which included funding the Company’s operations, capital expenditures, and acquisitions of businesses, products or technologies. The 2020 Notes bore interest at 0.75% per year, payable semi-annually in arrears every June 15 and December 15, beginning on December 15, 2015. During the quarter ended September 30, 2018, $229,869 of the principal amount of the 2020 Notes was converted into 2,928 shares of common stock, with the remaining $142 repaid in cash. The shares of common stock had a fair value of $336,994 at the time of the conversion. This transaction resulted in a $7,207 loss on extinguishment that was 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 on the date of conversion and net carrying amount of the liability component. 1.25% Convertible Senior Notes On December 11, 2013, the Company issued $175,000 principal amount of 1.25% Convertible Senior Notes due 2018 (the “2018 Notes,” and together with the 2020 Notes and 2024 Notes, the “Notes”) in a private offering to Holders pursuant to Rule 144A under the Securities Act. The initial Holders of the 2018 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 2018 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 acquisitions of businesses, products or technologies believed to be of strategic importance. The 2018 Notes bore interest at 1.25% per year, payable semi-annually in arrears every June 15 and December 15, beginning on June 15, 2014. During the year ended December 31, 2017, $201,250 of the principal amount of the 2018 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 was 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. For the years ended December 31, 2019, 2018 and 2017, the Company incurred the following interest expense and loss on conversion related to the Notes: 2019 2018 2017 Interest expense related to contractual interest coupon $ 818 $ 1,171 $ 4,123 Amortization of debt discount and issuance costs 11,708 8,383 21,789 Loss on conversion — 7,207 2,696 Total $ 12,526 $ 16,761 $ 28,608 |
Equity Award Plans
Equity Award Plans | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Award Plans | 11. 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 eight equity incentive plans: the Company’s 2002 stock option plan (the “2002 Plan”), the 2012 Plan and six plans assumed by the Company upon various business acquisitions. The assumed plans are the Cloudmark plan, the WebLife plan, the Meta Network plan, the ObserveIT 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”), nonstatutory 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 four-year 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. The Company accounts for forfeitures as they occur. No options were granted during the years ended December 31, 2019, 2018 and 2017. 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, 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 Options exercised (767 ) 12.78 Options forfeited and canceled (18 ) 49.24 Balance at December 31, 2018 1,255 28.67 4.77 $ 69,224 Options assumed per business acquisitions 91 11.77 Options exercised (297 ) 17.00 Options forfeited and canceled (2 ) 13.46 Balance at December 31, 2019 1,047 $ 30.55 4.38 $ 88,190 Exercisable, December 31, 2019 957 $ 31.75 4.03 $ 79,448 Vested and expected to vest, December 31, 2019 1,047 $ 30.55 4.38 $ 88,190 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. The total intrinsic value of options exercised was $30,766, $73,057 and $82,131 for the years ended December 31, 2019, 2018 and 2017, respectively. Total cash proceeds from such option exercises were $5,048, $9,802 and $12,383 for the years ended December 31, 2019, 2018 and 2017, respectively. The grant date fair value of options that vested was $1,373, $3,447 and $7,450 during the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, the Company had unrecognized stock-based compensation expense of $8,594 related to stock options that will be recognized, over the average remaining vesting term of the options of 1.97 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, 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 Awards granted 3,209 101.56 Awards vested (1,446 ) 69.50 Awards forfeited (735 ) 93.70 Awarded and unvested at December 31, 2018 4,568 89.88 Awards assumed per business acquisition 75 119.13 Awards granted 2,228 118.30 Awards vested (1,546 ) 87.98 Awards forfeited (430 ) 94.33 Awarded and unvested at December 31, 2019 4,895 $ 103.48 As of December 31, 2019, there was $383,227 of unamortized stock-based compensation expense related to unvested RSUs, which are expected to be recognized over a weighted average period of 3.38 years. The Company granted 171 shares, 474 shares and 177 shares of PSUs in the years ended December 31, 2019, 2018 and 2017, respectively. The PSU vesting conditions were based on individual performance targets. Unamortized stock-based compensation expense was $32,025 as of December 31, 2019. Stock Bonus Awards and Other Liability Awards The total accrued liability for the stock bonus awards and other liability awards was $13,427 and $12,741 as of December 31, 2019 and 2018, respectively. During the years ended December 31, 2019, 2018 and 2017, 107 shares, 61 shares and 85 shares of common stock earned under the stock bonus program were issued. Stock-based compensation expense related to stock bonus program were $13,427, $12,701 and $6,616, respectively, for the years ended December 31, 2019, 2018 and 2017. In March 2015, the Company issued liability awards with a fair value of $6,885, which vested over three years period and were subject to continuous service and other conditions. The liability awards were settled with a variable number of shares of the Company’s common stock. During the years ended December 31, 2018 and 2017, 20 and 29 shares were vested and issued, respectively. The Company recognized $408 and $2,293 of stock-based compensation expense related to these liability awards in the years ended December 31, 2018 and 2017. There are no outstanding liability awards as of December 31, 2018. 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, 201 9 , there were 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, 2019 2018 2017 Expected life (in years) 0.5 0.5 0.5 Volatility 36% - 37% 33% - 40% 29% - 37% Risk-free interest rate 1.58 - 2.43% 1.76% - 2.50% 0.76% - 1.16% Dividend yield —% —% —% The Company issued 266 shares, 231 shares and 183 shares under the ESPP in the years ended December 31, 2019, 2018 and 2017, respectively, at a weighted average exercise price per share of $86.51, $77.02, and $73.02, respectively. As of December 31, 2019, the Company expects to recognize $3,531 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 As part of the FireLayers acquisition, 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 $2,349, $2,887 and $2,887 of stock-based compensation expense in 2019, 2018 and 2017, respectively. 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 of December 31, 2019, all shares were vested. 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 $2,415, $2,415 and $205 of stock-based compensation in the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, there was $4,617 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. As part of the Wombat acquisition, 51 shares were deferred for certain key employees with the total fair value of $5,458, and a vesting period of two years. The Company recognized $2,788 and $2,288 of stock-based compensation in the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, there was $382 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. As part of the Meta Networks acquisition in 2019, 72 shares were deferred for certain key employees with the total fair value of $8,338 allocated to post-combination expense, and a vesting period of three years. The Company recognized $1,748 of stock-based compensation in the year ended December 31, 2019. As of December 31, 2019, there was $6,590 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. They are considered issued and outstanding shares of the Company at the acquisition date and have the same rights as other shares of common stock |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | 12. 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, 2019 2018 2017 Stock options to purchase common stock 1,047 1,255 2,040 Restricted stock units 4,895 4,568 3,540 Employee stock purchase plan 157 163 118 Common stock subject to repurchase 207 195 90 Stock bonus awards and other liability awards 117 152 98 2024 Notes 5,975 — — 2020 Notes — — 2,831 Total 12,398 6,333 8,717 |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | 13. 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 geographic area. Revenue by geographic area is based upon the billing address of the customer: Year Ended December 31, 2019 2018 2017 Total revenue by geographic area: United States $ 713,305 $ 584,294 $ 432,564 Rest of world 174,885 132,700 87,117 Total revenue $ 888,190 $ 716,994 $ 519,681 The following sets forth long-lived tangible assets by geographic area: December 31, 2019 2018 Long-lived assets: United States $ 58,447 $ 57,682 Rest of world 15,065 12,945 Total long-lived assets $ 73,512 $ 70,627 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes The domestic and foreign components of loss before income taxes were as follows for the years ended December 31, 2019, 2018 and 2017: Year Ended December 31, 2019 2018 2017 Domestic $ (142,830 ) $ (126,128 ) $ (110,192 ) Foreign 32,482 9,147 30,440 Loss before income taxes $ (110,348 ) $ (116,981 ) $ (79,752 ) The (provision for) benefit from income taxes is comprised of: Year Ended December 31, 2019 2018 2017 Current tax expense: Federal $ — $ — $ — State 258 258 80 Foreign 22,030 1,768 5,923 Total current 22,288 2,026 6,003 Deferred tax expense: Federal 264 (12,773 ) (12,268 ) State — (1,812 ) (266 ) Foreign (2,635 ) (673 ) (3,419 ) Total deferred (2,371 ) (15,258 ) (15,953 ) Provision for (benefit from) income taxes $ 19,917 $ (13,232 ) $ (9,950 ) As the result of adopting ASU 2016-09, the Company recorded excess tax benefits on a prospective basis starting January 1, 2017, resulting in a cumulative-effect adjustment recorded in consolidated statements of stockholders’ equity in 2017. The reconciliation of income tax expense (benefit) to the income tax provision (benefit) included in the consolidated statements of operations at the statutory federal income tax rate of 21% for the year ended December 31, 2019 and 2018, and 34% for the years ended December 31, 2017 is as follows: Year Ended December 31, 2019 2018 2017 Tax at federal statutory rate $ (23,173 ) $ (24,566 ) $ (27,116 ) Foreign income tax rate differential 717 307 (3,076 ) State, net of federal benefit (4,939 ) (3,859 ) (2,942 ) Stock compensation charges (11,265 ) (20,341 ) (32,150 ) SubPart F and other permanent items 9,657 1,597 2,155 Section 162m 8,465 5,501 601 Provision to return and other (453 ) (1,082 ) 2,480 Research and development credits (21,413 ) (11,165 ) (7,713 ) Uncertain tax positions 16,110 2,171 5,888 Impact of Tax Act and other tax law changes (42 ) — 85,606 Valuation allowance 46,253 38,205 (33,683 ) Provision for (benefit from) income taxes $ 19,917 $ (13,232 ) $ (9,950 ) 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, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 215,365 $ 192,508 Tax credit carryforwards 49,300 33,799 Research expenditures 12,139 577 Deferred revenue 16,254 17,716 Stock compensation 20,156 16,861 Fixed assets 1,345 313 Accruals and other 13,753 12,619 Gross deferred tax assets 328,312 274,393 Valuation allowance (224,047 ) (222,734 ) Total deferred tax assets 104,265 51,659 Deferred tax liabilities: Intangible assets and other (26,203 ) (23,282 ) Deferred commissions (33,263 ) (26,008 ) Convertible senior notes (42,304 ) — Total deferred tax liabilities (101,770 ) (49,290 ) Total net deferred tax assets (liabilities) $ 2,495 $ 2,369 Non-current deferred income tax assets (included in other long-term assets) $ 3,721 $ 2,946 Non-current deferred income tax liabilities (included in long-term liabilities) $ 1,226 $ 577 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 $1,313, $41,521 and $50,056 during the years ended December 31, 2019, 2018 and 2017, respectively. The change in valuation allowance for the year ended December 31, 2018, included an increase of $3,392 related to the 2020 Notes conversion. The change in valuation allowance for the year ended December 31, 2019, included a decrease of $44,855 related to the 2024 Notes issued in August 2019. During the three months ended March 31, 2017, the Company transferred certain intellectual property rights from its wholly owned subsidiary in Israel to the United States. Although the transfer of intellectual property rights between consolidated entities did not result in any gain in the consolidated statements of operations, the transfer did result in a taxable gain in Israel. In the Company’s financial statements ending before January 1, 2018, taxes incurred related to the intercompany transaction have been treated as a prepaid tax asset in the Company’s consolidated balance sheet and were being amortized to income tax expense over the life of the intellectual property. Effective January 1, 2018, pursuant to the Company’s modified retrospective adoption of ASU 2016-16, the Company’s remaining prepaid tax asset of $3,216 was recorded as an increase to accumulated deficit. 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 during fiscal 2017 to the newly enacted federal rate of 21%. This transitional impact resulted in a provisional deferred tax benefit of $2,024 in the year 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. As of December 31, 2019, the amounts recorded for the Tax Act no longer remain provisional as the Company completed its accounting for the effect of the 2017 Tax Act within the measurement period under the SEC guidance. However, the amounts recorded for the repatriation tax, the remeasurement of deferred taxes, and the Company’s reassessment of permanently reinvested earnings, uncertain tax positions and valuation allowances may be impacted by future clarification and guidance regarding available tax accounting methods and elections, earnings and profits computations, state tax conformity to federal tax changes, among others. During the year ended December 31, 2019, the Company recorded a current and deferred tax expense of $17,670 related to the transfer of certain intellectual property rights from its wholly owned subsidiary in Israel. During the year ended December 31, 2018, the Company recorded a deferred tax benefit of $14,725 related to changes in the Company’s valuation allowance resulting from the Wombat business acquisition. 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, 2019 and 2018, the Company had net operating loss carry-forwards for federal income tax purposes of $841,970 and $797,569, respectively. The federal net operating losses generated prior to tax year beginning in 2018 and which are subject to expiration will expire between 2020 and 2037. As of December 31, 2019 and 2018, the Company had federal research credit carry-forwards of $37,783 and $24,556 respectively. The federal research and development credits will begin to expire in 2022. As of December 31, 2019 and 2018, the Company had net operating loss carry-forwards for state income tax purposes of approximately $417,505 and $396,665, respectively. The state net operating losses will continue to expire between 2019 and 2039. As of December 31, 2019 and 2018, the Company had research and development credit carry-forwards for state income tax purpose of $32,291 and $22,987, respectively. The state research and development credits have no expiration period. As of December 31, 2019, the Company had net operating losses carry-forwards in non-U.S. locations of approximately $52,851. As of December 31, 2018, the Company had no net operating losses carry-forwards in non-U.S. locations. As of December 31, 2019 and 2018, the Company had research and development credit carry-forwards in its non-U.S. locations of approximately $2,863 and $2,426, respectively. The non-U.S. research and development credits will begin to expire in 2032. 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, 2019, the Company increased income tax expense by $368 from interest and penalties related to tax contingencies and has $677 of interest and penalties recorded as a long-term income tax liability. During the year ended December 31, 2018, the Company reduced income tax benefit by $21 from interest and penalties related to tax contingencies and has $309 of interest and penalties recorded as a long-term income tax liability as of December 31, 2018. As of December 31, 2019, the Company had recorded unrecognized tax benefits of $16,068 that if recognized, would benefit the Company’s effective tax rate. As of December 31, 2018, the Company had recorded unrecognized tax benefits of $4,616 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 201 7 . 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 2012 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, 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 Increase in balances related to tax positions taken during the current period 2,692 Increase in balances related to tax positions taken during the prior period 217 Decrease in balances related to tax positions taken during the prior period — Decrease in balances related to statute expirations during the current period (316 ) Balance as of December 31, 2018 16,454 Increase in balances related to tax positions taken during the current period 14,195 Increase in balances related to tax positions taken during the prior period 2,637 Decrease in balances related to tax positions taken during the prior period — Decrease in balances related to statute expirations during the current period (116 ) Balance as of December 31, 2019 $ 33,170 As part of the transition to the new territorial tax system, the Tax Act imposed a one-time repatriation tax on deemed repatriation of historical earnings of foreign subsidiaries. Based on the evaluation of the Company’s operations, no repatriation tax charge was owed due to negative earnings and profits in the Company’s foreign operations. |
The Company and Summary of Si_2
The Company and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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 3 “Acquisitions”. The consolidated financial statements include the results of operations from these business combinations from their date of acquisition. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior year balances in order to conform to the current period presentation. “Interest income” has been reclassified from “Interest expense” to “Other income, net” in the consolidated statements of operations. The reclassifications had no impact on previously reported net loss or accumulated deficit. |
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, 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 |
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. Inventories held at December 31, 2019 and December 31, 2018 consist primarily of finished goods. |
Revenue Recognition | Revenue Recognition Effective January 1, 2018, the Company adopted ASC 606 using the full retrospective method. Refer to Note 2 for a detailed discussion of accounting policies related to revenue recognition, including deferred revenue, deferred commissions and deferred product costs. Subscription service revenue Subscription service revenue is derived from a subscription-based enterprise licensing model with contract terms typically ranging from one to three years, and consists of (1) subscription fees from the licensing of the Company’s security-as-a-service platform and it’s various components, (2) subscription fees for software with support and related future updates where the software updates are critical to the customers’ ability to derive benefit from the software due to the fast changing nature of the technology. These function together as one performance obligation, and (3) subscription fees for the right to access the Company’s customer support services for software with significant standalone functionality and support services for hardware. The hosted on-demand service arrangements do not provide customers with the right to take possession of the software supporting the hosted services. Support revenue is derived from ongoing security updates, upgrades, bug fixes, and maintenance. A time-elapsed method is used to measure progress because the Company transfers control evenly over the contractual period. Accordingly, the fixed consideration related to subscription service revenue is generally recognized on a straight-line basis over the contract term beginning on the date access is provided, as long as other revenue recognition criteria have been met. Most of the Company’s contracts are non-cancelable over the contract term. Customers typically have the right to terminate their contract for cause if the Company fails to perform in accordance with the contractual terms. Some of the Company’s customers have the option to purchase additional subscription services at a stated price. These options are evaluated on a case-by-case basis but generally do not provide a material right as they are priced at or above the Company’s SSP and, as such, would not result in a separate performance obligation. Subscription software revenue Subscription software revenue is primarily derived from term-based software that is deployed on the customers’ own servers and has significant standalone functionality, is recognized upon transfer of control to the customer. The control for subscription software is transferred at the later of delivery to the customer or the software license start date. Hardware and services Hardware revenue consists of amounts derived from the sale of the Company’s on-premise hardware appliance, which is recognized upon passage of control, which occurs upon shipment of the product. Professional services revenue consists of fees associated with consulting, implementation and training services for assisting customers in implementing and expanding the use of the Company’s services and products. These services are distinct from subscription, subscription software licenses and hardware. Professional services do not result in significant customization of the Company’s services and products. The Company recognizes revenue related to the professional services as they are performed. |
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. |
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. No assets were determined to be impaired as of December 31, 2019. |
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, 2019, 2018 and 2017. 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. The Company did not incur any material advertising and promotion expenses during the years ended December 31, 2019, 2018 and 2017. |
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. No impairment indicators were identified by the Company as of December 31, 2019. Intangible assets consist of developed technology, customer relationships, non-compete arrangements, trademarks and patents, order backlog, and in-process research and development asset. 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 Developed technology 2 7 Customer relationships 2 8 Trade names and trademarks 1 5 Patents 4 5 Order backlog 1 3 The in-process research and development asset is not amortized until the associated project is completed. |
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. Warranty costs and the accrued warranty liabilities were not material for all periods presented. |
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. |
Research and Development | Research and Development Research and development expense consists primarily of personnel costs, consulting services, allocated facilities costs and depreciation. Research and development costs are expensed as incurred. |
Employee Benefit Plans | Employee Benefit Plans |
Share-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 is measured based on the value of the Company’s common stock on the grant date. The actual number of PSUs earned and eligible to vest are determined based on the Company’s achievement of the financial and operational performance conditions pre-defined when the awards are granted. The Company recognizes share-based compensation expense for the PSUs on a straight-line basis over the requisite service period for each separately vesting portion of the award when it is probable that the performance conditions will be achieved. The Company reassesses the probability of vesting at each reporting period for awards with performance conditions and adjusts stock-based compensation cost based on its probability assessment. The Company recognizes a cumulative catch up adjustment for changes in its probability assessment in subsequent reporting periods. 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. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes all changes in equity that are not the result of transactions with stockholders. The Company’s comprehensive loss consists of its net loss and changes in unrealized gains (losses) from its available-for-sale investments. The Company had no material reclassifications out of accumulated other comprehensive income into net loss in 2019, 2018 and 2017. |
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. |
New Accounting Pronouncements | Accounting Pronouncements Adopted in 2019 In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02” or “ASC 842”), which requires lessees to record most leases on their balance sheets but recognize the expenses in their statements of operations in a manner similar to current practice. ASU 2016-02 states that a lessee needs to recognize a lease liability for the obligation to make lease payments and a right-to-use(“ROU”) asset for the right to use the underlying asset for the lease term. The Company adopted ASU 2016-02 in the first quarter of 2019, utilizing the modified retrospective transition approach through a cumulative-effect adjustment to the opening accumulated deficit balance as of January 1, 2019. Refer to Note 8 “Leases” for more information regarding the impact of the adoption of ASU 2016-02 on the Company’s financial statements. Recent Accounting Pronouncements Not Yet Effective In December 2019, the FASB issued ASU No. 2019-02, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract 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 the adoption of ASU 20 17 - 04 to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Leases | ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments based on the lease contracts. Operating lease ROU assets and liabilities were recognized at adoption date, or lease commencement date if the commencement date was after January 1, 2019, based on the present value of lease payments over the remaining lease term. The Company’s lease contracts do not provide an implicit rate, as such the Company used its incremental borrowing rate based on the information available at adoption date , or lease commencement date if the commencement date was after January 1, 2019, in determining the present value of lease payments. The operating lease ROU assets also include s any lease payments made to the lessors at or before the lease commencement date, and exclude s lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. The Company has operating leases for corporate offices, research and development facilities, sales and marketing offices and data centers. The Company adopted ASC 842 in the first quarter of 2019, utilizing the modified retrospective transition approach through a cumulative-effect adjustment to the opening accumulated deficit as of January 1, 2019. Upon adoption of ASC 842, the Company elected: • the package of practical expedients which allows for not reassessing (1) whether existing contracts contain leases, (2) the lease classification for existing leases, and (3) whether existing initial direct costs meet the new definition; • the practical expedient in ASC Subtopic 842-10 to not separate non-lease components from lease components for its real estate and data center leases and instead account for each separate lease component, and non-lease components associated with that lease component, as a single lease component; and • not to recognize ROU assets and lease liabilities for short-term leases, which have a lease term of twelve months or less. |
Revenue, Deferred Revenue and_2
Revenue, Deferred Revenue and Deferred Contract Costs (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Effective January 1, 2018, the Company adopted ASC 606 using the full retrospective method. Refer to Note 2 for a detailed discussion of accounting policies related to revenue recognition, including deferred revenue, deferred commissions and deferred product costs. Subscription service revenue Subscription service revenue is derived from a subscription-based enterprise licensing model with contract terms typically ranging from one to three years, and consists of (1) subscription fees from the licensing of the Company’s security-as-a-service platform and it’s various components, (2) subscription fees for software with support and related future updates where the software updates are critical to the customers’ ability to derive benefit from the software due to the fast changing nature of the technology. These function together as one performance obligation, and (3) subscription fees for the right to access the Company’s customer support services for software with significant standalone functionality and support services for hardware. The hosted on-demand service arrangements do not provide customers with the right to take possession of the software supporting the hosted services. Support revenue is derived from ongoing security updates, upgrades, bug fixes, and maintenance. A time-elapsed method is used to measure progress because the Company transfers control evenly over the contractual period. Accordingly, the fixed consideration related to subscription service revenue is generally recognized on a straight-line basis over the contract term beginning on the date access is provided, as long as other revenue recognition criteria have been met. Most of the Company’s contracts are non-cancelable over the contract term. Customers typically have the right to terminate their contract for cause if the Company fails to perform in accordance with the contractual terms. Some of the Company’s customers have the option to purchase additional subscription services at a stated price. These options are evaluated on a case-by-case basis but generally do not provide a material right as they are priced at or above the Company’s SSP and, as such, would not result in a separate performance obligation. Subscription software revenue Subscription software revenue is primarily derived from term-based software that is deployed on the customers’ own servers and has significant standalone functionality, is recognized upon transfer of control to the customer. The control for subscription software is transferred at the later of delivery to the customer or the software license start date. Hardware and services Hardware revenue consists of amounts derived from the sale of the Company’s on-premise hardware appliance, which is recognized upon passage of control, which occurs upon shipment of the product. Professional services revenue consists of fees associated with consulting, implementation and training services for assisting customers in implementing and expanding the use of the Company’s services and products. These services are distinct from subscription, subscription software licenses and hardware. Professional services do not result in significant customization of the Company’s services and products. The Company recognizes revenue related to the professional services as they are performed. |
Contracts With Multiple Performance Obligations | Contracts with multiple performance obligations Most of the Company’s contracts with customers contain multiple performance obligations that are distinct and accounted for separately. The transaction price allocated to subscription services and subscription software that does not have significant standalone functionality is determined by considering factors such as historical pricing practices, and the selling price of hardware and professional services is estimated using a cost plus model. The selling price for support of a functional subscription software license is calculated as a percentage of functional subscription software license value which is derived by analyzing internal pricing practice, customer expectations, and industry practice. |
Variable Consideration | Variable consideration Revenue from sales is recorded at the net sales price, which is the transaction price, and includes estimates of variable consideration. The amount of variable consideration that is included in the transaction price is constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue will not occur when the uncertainty is resolved. If the Company’s services or products do not meet certain service level commitments, the Company’s customers are entitled to receive service credits representing a form of variable consideration. The Company has not historically experienced any significant incidents affecting the defined levels of reliability and performance as required by the Company’s subscription contracts. Accordingly, any estimated refunds related to these contracts in the consolidated financial statements are not material during the periods presented. |
Unbilled Accounts Receivables | Unbilled accounts receivables |
Deferred Commissions | Deferred commissions The Company capitalizes sales commissions and associated payroll taxes paid to internal sales personnel, and referral fees paid to independent third-parties, that are incremental to the acquisition of customer contracts. These costs are recorded as deferred commissions on the consolidated balance sheets. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are incremental and would not have occurred absent the customer contract. Sales commissions for renewal of a subscription contract are not considered commensurate with the commissions paid for the acquisition of the initial subscription contract given the substantive difference in commission rate between new and renewal contracts. Commissions paid upon the initial acquisition of a contract are amortized over an estimated period of benefit of five years while commissions paid related to renewal contracts are amortized over a contractual renewal period. Amortization is recognized based on the expected future revenue streams under the customer contracts. Amortization of deferred sales commissions is included in sales and marketing expense in the accompanying consolidated statements of operations. The Company determines the period of benefit for commissions paid for the acquisition of the initial subscription contract by taking into consideration its initial estimated customer life and the technological life of the Company’s software and related significant features. The Company classifies deferred commissions as current or long-term based on the timing of when the Company expects to recognize the expense. The Company periodically reviews these deferred commission costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred contract acquisition costs. There were no material impairment losses recorded during the periods presented. |
Deferred Product Costs | Deferred product costs Deferred product costs are the incremental costs to fulfill a contract that are directly associated with each non-cancellable customer contract and primarily consist of royalty payments made to third parties, from whom the Company has obtained licenses to integrate certain software into its products. The deferred product costs are recognized based on the contractual term, and included in cost of revenue in the accompanying consolidated statements of operations. The Company classifies deferred product costs as current or long-term based on the timing of when the Company expects to recognize the expense. |
Deferred Revenue | Deferred revenue |
The Company and Summary of Si_3
The Company and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Estimated Useful Life of 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 Developed technology 2 7 Customer relationships 2 8 Trade names and trademarks 1 5 Patents 4 5 Order backlog 1 3 |
Revenue, Deferred Revenue and_3
Revenue, Deferred Revenue and Deferred Contract Costs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Disaggregation of Revenue | The following table presents the Company’s revenue disaggregation: Year Ended December 31, 2019 2018 2017 Subscription service revenue $ 849,267 $ 681,138 $ 489,274 Subscription software revenue 25,739 23,262 17,081 Hardware and services 13,184 12,594 13,326 Total revenue $ 888,190 $ 716,994 $ 519,681 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Acquisition [Line Items] | |
Pro Forma Financial Information of Business 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, 2019 2018 2017 Total revenue $ 911,968 $ 743,345 $ 594,966 Net loss $ (158,448 ) $ (152,238 ) $ (89,221 ) Basic and diluted net loss per share $ (2.83 ) $ (2.92 ) $ (2.02 ) |
ObserveIT, Ltd | |
Business Acquisition [Line Items] | |
Summary of the Fair Values of Tangible Assets Acquired, Liabilities Assumed, Intangible Assets and Goodwill | The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Estimated Fair Value Estimated Useful Life (in years) Current assets $ 10,603 N/A Fixed assets 2,132 N/A Operating lease right-of-use asset 2,669 N/A Other assets 652 N/A Customer relationships 15,800 5 Order backlog 1,300 1 Core/developed technology 35,400 4 Trade name 400 2 In-process research and development * 20,600 N/A Operating lease liabilities (3,317 ) N/A Deferred revenue (6,700 ) N/A Other liabilities (5,414 ) N/A Goodwill 144,374 Indefinite $ 218,499 |
Meta Networks, Ltd | |
Business Acquisition [Line Items] | |
Summary of the Fair Values of Tangible Assets Acquired, Liabilities Assumed, Intangible Assets and Goodwill | The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Fair Value Estimated Useful Life (in years) Current assets $ 356 N/A Fixed assets 68 N/A Core/developed technology 21,000 3 Deferred tax liability, net (1,854 ) N/A Other liabilities (671 ) N/A Goodwill 85,869 Indefinite $ 104,768 |
Wombat | |
Business Acquisition [Line Items] | |
Summary of the Fair Values of Tangible Assets Acquired, Liabilities Assumed, Intangible Assets and Goodwill | The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Fair Value Estimated Useful Life (in years) Current assets $ 23,344 N/A Fixed assets 954 N/A Customer relationships 37,800 7 Order backlog 6,800 2 Core/developed technology 35,200 4 Trade name 2,400 4 Deferred revenue (14,700 ) N/A Deferred tax liability, net (14,725 ) N/A Other liabilities (1,120 ) N/A Goodwill 162,865 Indefinite $ 238,818 |
Cloudmark | |
Business Acquisition [Line Items] | |
Summary of the Fair Values of Tangible Assets Acquired, Liabilities Assumed, Intangible Assets and Goodwill | The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Fair Value Estimated Useful Life (in years) Current assets $ 37,390 N/A Fixed assets 543 N/A Non-current assets 74 N/A Liabilities (4,422 ) N/A Deferred revenue (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 93,776 Indefinite $ 139,256 |
WebLife Balance, Inc. | |
Business Acquisition [Line Items] | |
Summary of the Fair Values of Tangible Assets Acquired, Liabilities Assumed, Intangible Assets and Goodwill | The following table summarizes the fair values of tangible assets acquired, liabilities assumed, intangible assets and goodwill: Fair Value Estimated Useful Life (in years) Current assets $ 534 N/A Fixed assets 23 N/A Liabilities (88 ) N/A Deferred revenue (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 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of property and equipment | Property and equipment at December 31, 2019 and December 31, 2018 consist of the following: Useful Life December 31, (in years) 2019 2018 Computer equipment 2 to 4 $ 170,010 $ 142,777 Software 2 to 5 5,184 3,782 Furniture 5 4,244 3,637 Office equipment 2 to 5 658 585 Leasehold improvements 5 years, or lease term, if shorter 14,819 13,129 Other 2 408 59 Construction in progress 3,630 1,088 198,953 165,057 Less: Accumulated depreciation (125,441 ) (94,430 ) $ 73,512 $ 70,627 |
Schedule of accrued liabilities | Accrued liabilities at December 31, 2019 and December 31, 2018 consisted of the following: December 31, 2019 2018 Accrued compensation $ 73,384 $ 55,924 ESPP contributions 4,138 3,224 Customer deposits 12,316 5,961 Accrued royalties 1,528 1,373 Other 28,057 24,237 $ 119,423 $ 90,719 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill Activity and Balances | The goodwill activity and balances are presented below: Year Ended December 31, 2019 2018 Beginning balance $ 460,425 $ 297,704 Acquisitions during period 230,243 162,865 Purchase accounting adjustments (3,151 ) (144 ) Closing balance $ 687,517 $ 460,425 |
Components of Intangible Assets, Excluding Goodwill | Intangible assets consisted of the following: December 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 210,469 $ (110,284 ) $ 100,185 $ 154,069 $ (79,525 ) $ 74,544 Customer relationships 87,200 (25,608 ) 61,592 71,400 (15,166 ) 56,234 Trade names and patents 3,730 (2,349 ) 1,381 3,330 (1,430 ) 1,900 Order backlog 8,100 (6,360 ) 1,740 6,800 (2,833 ) 3,967 In-process research and development 21,125 — 21,125 — — — $ 330,624 $ (144,601 ) $ 186,023 $ 235,599 $ (98,954 ) $ 136,645 |
Future Estimated Amortization Cost of Intangible Assets | Future estimated amortization costs of intangible assets as of December 31, 2019 are presented below: Year Ended December 31, 2020 $ 57,990 2021 53,810 2022 31,548 2023 21,983 2024 13,686 Thereafter 7,006 $ 186,023 |
Fair Value Measurements and I_2
Fair Value Measurements and Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets or Liabilities Carried at Fair Value | The following tables summarize, for each category of assets or liabilities carried at fair value, the respective fair value as of December 31, 2019 and December 31, 2018 and the classification by level of input within the fair value hierarchy: December 31, 2019 Total Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 815,158 $ 815,158 $ — $ — Commercial paper 9,989 — 9,989 — Short-term investments: Corporate debt securities 13,454 — 13,454 — Commercial paper 27,932 — 27,932 — U.S. Treasury securities 1,999 — 1,999 — Total financial assets $ 868,532 $ 815,158 $ 53,374 $ — December 31, 2018 Total Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 133,202 $ 133,202 $ — $ — Commercial paper 12,478 — 12,478 — Short-term investments: Corporate debt securities 13,470 — 13,470 — Commercial paper 30,838 — 30,838 — U.S. Treasury securities 1,999 — 1,999 — Total financial assets $ 191,987 $ 133,202 $ 58,785 $ — |
Reconciliation of the Acquisition-Related Contingent Consideration Liability Measured at Fair Value | Amount 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 Additions during the period — Payments during the period (555 ) Adjustments to fair value during the period recorded in General and administrative expenses (79 ) Balance as of December 31, 2018 $ — |
Summary of Cost and Fair Value of Cash and Cash Equivalents and Available-for-Sale Investments | The cost and fair value of the Company’s cash, cash equivalents and available-for-sale investments as of December 31, 2019 and December 31, 2018 were as follows: December 31, 2019 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents: Cash $ 22,408 $ — $ — $ 22,408 Money market funds 815,158 — — 815,158 Commercial paper 9,989 — — 9,989 Total $ 847,555 $ — $ — $ 847,555 Short-term investments: Corporate debt securities $ 13,453 $ 2 $ (1 ) $ 13,454 Commercial paper 27,932 — — 27,932 U.S. Treasury securities 1,998 1 — 1,999 Total $ 43,383 $ 3 $ (1 ) $ 43,385 December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents: Cash $ 39,712 $ — $ — $ 39,712 Money market funds 133,202 — — 133,202 Commercial paper 12,478 — — 12,478 Total $ 185,392 $ — $ — $ 185,392 Short-term investments: Corporate debt securities $ 13,477 $ — $ (7 ) $ 13,470 Commercial paper 30,838 — — 30,838 U.S. Treasury securities 1,999 — — 1,999 Total $ 46,314 $ — $ (7 ) $ 46,307 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Component of Lease Expense and Supplemental Information Related to Leases | The components of lease expense were as follows: Year Ended December 31, 2019 Operating lease cost $ 26,115 Short-term lease cost 2,846 Variable lease cost 3,444 Total lease cost $ 32,405 Supplemental information related to leases was as follows: Year Ended December 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 27,104 Right-of-use assets obtained in exchange for operating lease obligations $ 15,668 Weighted-average remaining lease term - operating leases 4 years Weighted-average discount rate - operating leases 5.04 % |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities as of December 31, 2019 were as follows: Operating leases Year ending December 31, 2020 $ 20,858 2021 13,531 2022 11,091 2023 6,357 2024 4,304 Thereafter 7,867 Total lease payments 64,008 Less imputed interest (7,583 ) Total $ 56,425 |
Schedule of Future Annual Minimum Lease Payments under Non-cancellable Lease | As previously disclosed in the Company’s 2018 Annual Report on Form 10-K and under ASC-840, future minimum lease payments for operating leases having initial or remaining noncancelable lease terms in excess of one year as of December 31, 2018 were as follows: Liability as of December 31, 2018 Operating Leases 2019 $ 25,313 2020 17,535 2021 19,155 2022 21,581 2023 19,609 Thereafter 129,154 Total minimum lease payments $ 232,347 |
ASC 842 | |
Summary of Effects of Adopting ASC 842 | The following table summarizes the effects of adopting ASC 842: Ending Balance as of December 31, 2018 Adjustments Opening Balance as of January 1, 2019 Assets Prepaid expenses and other current assets $ 16,872 $ (81 ) $ 16,791 Operating lease right-of-use assets $ — $ 59,549 $ 59,549 Liabilities Accounts payable $ 20,237 $ (216 ) $ 20,021 Deferred rent $ 829 $ (829 ) $ — Operating lease liabilities $ — $ 24,820 $ 24,820 Long-term operating lease liabilities $ — $ 39,361 $ 39,361 Long-term deferred rent $ 3,757 $ (3,757 ) $ — Stockholders’ Equity Accumulated deficit $ (595,418 ) $ 89 $ (595,329 ) |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Senior Longterm Notes Current And Noncurrent [Abstract] | |
Summary of Carrying Values and Expenses Related to Convertible Senior Notes | The following table represents the carrying value of the 2024 Notes as of December 31, 2019: December 31, 2019 December 31, 2018 Liability component: Principal $ 920,000 $ — Less: debt discount and issuance costs, net of amortization (170,380 ) — Net carrying amount $ 749,620 $ — Equity component (1) $ 163,023 $ — (1) Recorded on the consolidated balance sheets as additional paid-in capital, net of the $3,450 issuance costs in equity. For the years ended December 31, 2019, 2018 and 2017, the Company incurred the following interest expense and loss on conversion related to the Notes: 2019 2018 2017 Interest expense related to contractual interest coupon $ 818 $ 1,171 $ 4,123 Amortization of debt discount and issuance costs 11,708 8,383 21,789 Loss on conversion — 7,207 2,696 Total $ 12,526 $ 16,761 $ 28,608 |
Equity Award Plans (Tables)
Equity Award Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Option Activity under Stock Incentive 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, 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 Options exercised (767 ) 12.78 Options forfeited and canceled (18 ) 49.24 Balance at December 31, 2018 1,255 28.67 4.77 $ 69,224 Options assumed per business acquisitions 91 11.77 Options exercised (297 ) 17.00 Options forfeited and canceled (2 ) 13.46 Balance at December 31, 2019 1,047 $ 30.55 4.38 $ 88,190 Exercisable, December 31, 2019 957 $ 31.75 4.03 $ 79,448 Vested and expected to vest, December 31, 2019 1,047 $ 30.55 4.38 $ 88,190 |
Summary of RSUs and PSUs under Stock Incentive Plan | 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, 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 Awards granted 3,209 101.56 Awards vested (1,446 ) 69.50 Awards forfeited (735 ) 93.70 Awarded and unvested at December 31, 2018 4,568 89.88 Awards assumed per business acquisition 75 119.13 Awards granted 2,228 118.30 Awards vested (1,546 ) 87.98 Awards forfeited (430 ) 94.33 Awarded and unvested at December 31, 2019 4,895 $ 103.48 |
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, 2019 2018 2017 Expected life (in years) 0.5 0.5 0.5 Volatility 36% - 37% 33% - 40% 29% - 37% Risk-free interest rate 1.58 - 2.43% 1.76% - 2.50% 0.76% - 1.16% Dividend yield —% —% —% |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Potentially Dilutive Common Shares Outstanding that were Excluded from the Computation of Diluted Net Loss 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, 2019 2018 2017 Stock options to purchase common stock 1,047 1,255 2,040 Restricted stock units 4,895 4,568 3,540 Employee stock purchase plan 157 163 118 Common stock subject to repurchase 207 195 90 Stock bonus awards and other liability awards 117 152 98 2024 Notes 5,975 — — 2020 Notes — — 2,831 Total 12,398 6,333 8,717 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Summary of Total Revenue and Long-lived Assets by Geographic Area | The following sets forth total revenue by geographic area. Revenue by geographic area is based upon the billing address of the customer: Year Ended December 31, 2019 2018 2017 Total revenue by geographic area: United States $ 713,305 $ 584,294 $ 432,564 Rest of world 174,885 132,700 87,117 Total revenue $ 888,190 $ 716,994 $ 519,681 The following sets forth long-lived tangible assets by geographic area: December 31, 2019 2018 Long-lived assets: United States $ 58,447 $ 57,682 Rest of world 15,065 12,945 Total long-lived assets $ 73,512 $ 70,627 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of domestic and foreign components of loss before income taxes | The domestic and foreign components of loss before income taxes were as follows for the years ended December 31, 2019, 2018 and 2017: Year Ended December 31, 2019 2018 2017 Domestic $ (142,830 ) $ (126,128 ) $ (110,192 ) Foreign 32,482 9,147 30,440 Loss before income taxes $ (110,348 ) $ (116,981 ) $ (79,752 ) |
Components of (provision for) benefit from income taxes | The (provision for) benefit from income taxes is comprised of: Year Ended December 31, 2019 2018 2017 Current tax expense: Federal $ — $ — $ — State 258 258 80 Foreign 22,030 1,768 5,923 Total current 22,288 2,026 6,003 Deferred tax expense: Federal 264 (12,773 ) (12,268 ) State — (1,812 ) (266 ) Foreign (2,635 ) (673 ) (3,419 ) Total deferred (2,371 ) (15,258 ) (15,953 ) Provision for (benefit from) income taxes $ 19,917 $ (13,232 ) $ (9,950 ) |
Schedule of reconciliation of income tax expense | The reconciliation of income tax expense (benefit) to the income tax provision (benefit) included in the consolidated statements of operations at the statutory federal income tax rate of 21% for the year ended December 31, 2019 and 2018, and 34% for the years ended December 31, 2017 is as follows: Year Ended December 31, 2019 2018 2017 Tax at federal statutory rate $ (23,173 ) $ (24,566 ) $ (27,116 ) Foreign income tax rate differential 717 307 (3,076 ) State, net of federal benefit (4,939 ) (3,859 ) (2,942 ) Stock compensation charges (11,265 ) (20,341 ) (32,150 ) SubPart F and other permanent items 9,657 1,597 2,155 Section 162m 8,465 5,501 601 Provision to return and other (453 ) (1,082 ) 2,480 Research and development credits (21,413 ) (11,165 ) (7,713 ) Uncertain tax positions 16,110 2,171 5,888 Impact of Tax Act and other tax law changes (42 ) — 85,606 Valuation allowance 46,253 38,205 (33,683 ) Provision for (benefit from) income taxes $ 19,917 $ (13,232 ) $ (9,950 ) |
Schedule of deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets were as follows: At December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 215,365 $ 192,508 Tax credit carryforwards 49,300 33,799 Research expenditures 12,139 577 Deferred revenue 16,254 17,716 Stock compensation 20,156 16,861 Fixed assets 1,345 313 Accruals and other 13,753 12,619 Gross deferred tax assets 328,312 274,393 Valuation allowance (224,047 ) (222,734 ) Total deferred tax assets 104,265 51,659 Deferred tax liabilities: Intangible assets and other (26,203 ) (23,282 ) Deferred commissions (33,263 ) (26,008 ) Convertible senior notes (42,304 ) — Total deferred tax liabilities (101,770 ) (49,290 ) Total net deferred tax assets (liabilities) $ 2,495 $ 2,369 Non-current deferred income tax assets (included in other long-term assets) $ 3,721 $ 2,946 Non-current deferred income tax liabilities (included in long-term liabilities) $ 1,226 $ 577 |
Schedule of unrecognized tax benefits | The aggregate changes in the balance of gross unrecognized tax benefits were as follows: 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 Increase in balances related to tax positions taken during the current period 2,692 Increase in balances related to tax positions taken during the prior period 217 Decrease in balances related to tax positions taken during the prior period — Decrease in balances related to statute expirations during the current period (316 ) Balance as of December 31, 2018 16,454 Increase in balances related to tax positions taken during the current period 14,195 Increase in balances related to tax positions taken during the prior period 2,637 Decrease in balances related to tax positions taken during the prior period — Decrease in balances related to statute expirations during the current period (116 ) Balance as of December 31, 2019 $ 33,170 |
The Company and Summary of Si_4
The Company and Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)segmentreporting_unit | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Intangible assets: | |||
Overstatement in Deferred revenue | $ 2,446,000 | ||
Overstatement in deferred revenue, percentage | 0.50% | ||
Foreign currency transaction gain (loss) | $ (1,655,000) | $ (943,000) | $ 574,000 |
Impairment of intangible assets and other long lived assets | $ 0 | ||
Number of operating and reportable segments | segment | 1 | ||
Number of reporting units | reporting_unit | 1 | ||
Goodwill, impairment loss | $ 0 | ||
Defined contribution plan, employer discretionary matching contributions | $ 2,816,000 | $ 1,563,000 | $ 0 |
Defined Contribution Plan, Tax Status [Extensible List] | us-gaap:QualifiedPlanMember | us-gaap:QualifiedPlanMember | us-gaap:QualifiedPlanMember |
Defined Contribution Plan, Sponsor Location [Extensible List] | country:US | country:US | country:US |
Employee Stock Option | |||
Intangible assets: | |||
Term until award expiration | 10 years | ||
Maximum | Employee Stock Option | |||
Intangible assets: | |||
Term until award expiration | 10 years | ||
Software | Minimum | |||
Intangible assets: | |||
Estimated life of intangible assets | 3 years | ||
Software | Maximum | |||
Intangible assets: | |||
Estimated life of intangible assets | 5 years |
The Company and Summary of Si_5
The Company and Summary of Significant Accounting Policies - Summary of Estimated Lives of Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Developed Technology | Minimum | |
Intangible assets: | |
Estimated life of intangible assets | 2 years |
Developed Technology | Maximum | |
Intangible assets: | |
Estimated life of intangible assets | 7 years |
Customer Relationships | Minimum | |
Intangible assets: | |
Estimated life of intangible assets | 2 years |
Customer Relationships | Maximum | |
Intangible assets: | |
Estimated life of intangible assets | 8 years |
Trade Names and Trademarks | Minimum | |
Intangible assets: | |
Estimated life of intangible assets | 1 year |
Trade Names and Trademarks | Maximum | |
Intangible assets: | |
Estimated life of intangible assets | 5 years |
Patents | Minimum | |
Intangible assets: | |
Estimated life of intangible assets | 4 years |
Patents | Maximum | |
Intangible assets: | |
Estimated life of intangible assets | 5 years |
Order Backlog | Minimum | |
Intangible assets: | |
Estimated life of intangible assets | 1 year |
Order Backlog | Maximum | |
Intangible assets: | |
Estimated life of intangible assets | 3 years |
Revenue, Deferred Revenue and_4
Revenue, Deferred Revenue and Deferred Contract Costs - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 25, 2019 | |
Revenue, Deferred Revenue and Deferred Contract Costs [Line Items] | ||||
Unbilled receivable | $ 3,261 | $ 1,276 | ||
Deferred revenue, revenue recognized | 490,172 | 363,483 | $ 242,428 | |
Revenue recognized related to the performance obligations satisfied in prior periods | 1,906 | 2,901 | 1,055 | |
Long-term Contract with Customer | ||||
Revenue, Deferred Revenue and Deferred Contract Costs [Line Items] | ||||
Contracted revenue not yet recognized | 676,707 | |||
ObserveIT, Ltd | ||||
Revenue, Deferred Revenue and Deferred Contract Costs [Line Items] | ||||
Deferred revenue, revenue recognized | 681 | |||
Deferred revenue assumed from business acquisition | $ 6,700 | |||
Sales Commission | ||||
Revenue, Deferred Revenue and Deferred Contract Costs [Line Items] | ||||
Contract cost capitalized | 80,590 | 66,254 | 45,910 | |
Contract cost amortized | 50,415 | 37,076 | 28,476 | |
Product Cost | ||||
Revenue, Deferred Revenue and Deferred Contract Costs [Line Items] | ||||
Contract cost capitalized | 4,727 | 2,765 | 2,510 | |
Contract cost amortized | $ 3,531 | $ 2,463 | $ 2,849 | |
Minimum | ||||
Revenue, Deferred Revenue and Deferred Contract Costs [Line Items] | ||||
Period terms for payment | 30 days | |||
Maximum | ||||
Revenue, Deferred Revenue and Deferred Contract Costs [Line Items] | ||||
Period terms for payment | 45 days |
Revenue, Deferred Revenue and_5
Revenue, Deferred Revenue and Deferred Contract Costs - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 888,190 | $ 716,994 | $ 519,681 |
Subscription service revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 849,267 | 681,138 | 489,274 |
Subscription software revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 25,739 | 23,262 | 17,081 |
Hardware and Service | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 13,184 | $ 12,594 | $ 13,326 |
Revenue, Deferred Revenue and_6
Revenue, Deferred Revenue and Deferred Contract Costs - Additional Information (Details 1) - Long-term Contract with Customer | Dec. 31, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of contracted and not recognized revenue to be recognized | 59.00% |
Revenue to be recognized period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of contracted and not recognized revenue to be recognized | 38.00% |
Revenue to be recognized period | 2 years |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) shares in Thousands, $ in Thousands | Nov. 25, 2019 | May 15, 2019 | Feb. 28, 2018 | Nov. 30, 2017 | Nov. 21, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||||||
Preliminary purchase price allocation estimated period from the acquisition date | 1 year | |||||||
Payments to acquire businesses, net of cash acquired | $ 317,155 | $ 223,786 | $ 155,350 | |||||
Operating Expenses | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition-related costs | 3,294 | |||||||
ObserveIT, Ltd | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to acquire businesses, net of cash acquired | $ 213,747 | |||||||
Cash acquired from acquisitions | 4,752 | |||||||
Escrow | 3,250 | |||||||
Fair value of unvested awards attributed to pre-acquisition service | 446 | |||||||
Fair value of unvested awards attributed to post-acquisition service | 5,427 | |||||||
Unrecognized stock options compensation expense | 5,427 | |||||||
Deferred cash consideration | $ 532 | |||||||
Stock-based compensation expense vesting period | 3 years | |||||||
ObserveIT, Ltd | Restricted Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Deferred cash consideration allocated to post-combination expense | $ 485 | |||||||
Meta Networks, Ltd | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to acquire businesses, net of cash acquired | $ 104,664 | |||||||
Cash acquired from acquisitions | 104 | |||||||
Escrow | 12,500 | |||||||
Fair value of unvested awards attributed to pre-acquisition service | 184 | |||||||
Fair value of unvested awards attributed to post-acquisition service | 12,918 | |||||||
Unrecognized stock options compensation expense | 12,918 | |||||||
Deferred cash consideration | $ 7,827 | |||||||
Stock-based compensation expense vesting period | 3 years | |||||||
Meta Networks, Ltd | Restricted Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Deferred cash consideration allocated to post-combination expense | $ 7,596 | |||||||
Stock-based compensation expense vesting period | 3 years | |||||||
Number of shares deferred | 72 | |||||||
Fair value of share-based deferred cash compensation issued | $ 8,599 | |||||||
Deferred stock allocated to post-combination expense | $ 8,338 | |||||||
Unamortized stock-based compensation expense | 6,590 | |||||||
Wombat | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to acquire businesses, net of cash acquired | $ 225,366 | |||||||
Cash acquired from acquisitions | 13,452 | |||||||
Fair value of unvested awards attributed to pre-acquisition service | 1,580 | |||||||
Fair value of unvested awards attributed to post-acquisition service | $ 1,571 | |||||||
Wombat | Restricted Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock-based compensation expense vesting period | 2 years | |||||||
Number of shares deferred | 51 | |||||||
Fair value of share-based deferred cash compensation issued | $ 5,458 | |||||||
Unamortized stock-based compensation expense | 382 | |||||||
Cloudmark | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to acquire businesses, net of cash acquired | $ 107,283 | |||||||
Cash acquired from acquisitions | 31,973 | |||||||
Fair value of unvested awards attributed to pre-acquisition service | 91 | |||||||
Fair value of unvested awards attributed to post-acquisition service | 1,180 | |||||||
Unamortized stock-based compensation expense | $ 1,180 | |||||||
WebLife Balance, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to acquire businesses, net of cash acquired | $ 48,765 | |||||||
Cash acquired from acquisitions | 278 | |||||||
Fair value of unvested awards attributed to pre-acquisition service | 333 | |||||||
Fair value of unvested awards attributed to post-acquisition service | 1,468 | |||||||
Unrecognized stock options compensation expense | $ 1,468 | |||||||
WebLife Balance, Inc. | Restricted Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of shares deferred | 107 | |||||||
Fair value of share-based deferred cash compensation issued | $ 9,652 | |||||||
Unamortized stock-based compensation expense | $ 4,617 |
Acquisitions - Summary of the F
Acquisitions - Summary of the Fair Values of Tangible Assets Acquired, Liabilities Assumed, Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | Nov. 25, 2019 | May 15, 2019 | Feb. 28, 2018 | Nov. 30, 2017 | Nov. 21, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Fair value of assets acquired and liabilities assumed | ||||||||
Goodwill | $ 687,517 | $ 460,425 | $ 297,704 | |||||
ObserveIT, Ltd | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Current assets | $ 10,603 | |||||||
Fixed assets | 2,132 | |||||||
Operating lease right-of-use asset | 2,669 | |||||||
Other assets | 652 | |||||||
Operating lease liabilities | (3,317) | |||||||
Deferred revenue | (6,700) | |||||||
Other liabilities | (5,414) | |||||||
Goodwill | 144,374 | |||||||
Recognized identifiable assets acquired and liabilities assumed, net | 218,499 | |||||||
ObserveIT, Ltd | Customer Relationships | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Finite lived intangible assets | $ 15,800 | |||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 5 years | |||||||
ObserveIT, Ltd | Order Backlog | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Finite lived intangible assets | $ 1,300 | |||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 1 year | |||||||
ObserveIT, Ltd | Developed Technology | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Finite lived intangible assets | $ 35,400 | |||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 4 years | |||||||
ObserveIT, Ltd | In-process Research and Development | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Finite lived intangible assets | $ 20,600 | |||||||
ObserveIT, Ltd | Trade Names | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Finite lived intangible assets | $ 400 | |||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 2 years | |||||||
Meta Networks, Ltd | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Current assets | $ 356 | |||||||
Fixed assets | 68 | |||||||
Deferred tax liability, net | (1,854) | |||||||
Other liabilities | (671) | |||||||
Goodwill | 85,869 | |||||||
Recognized identifiable assets acquired and liabilities assumed, net | 104,768 | |||||||
Meta Networks, Ltd | Developed Technology | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Finite lived intangible assets | $ 21,000 | |||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 3 years | |||||||
Wombat | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Current assets | $ 23,344 | |||||||
Fixed assets | 954 | |||||||
Deferred revenue | (14,700) | |||||||
Deferred tax liability, net | (14,725) | |||||||
Other liabilities | (1,120) | |||||||
Goodwill | 162,865 | |||||||
Recognized identifiable assets acquired and liabilities assumed, net | 238,818 | |||||||
Wombat | Customer Relationships | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Finite lived intangible assets | $ 37,800 | |||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 7 years | |||||||
Wombat | Order Backlog | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Finite lived intangible assets | $ 6,800 | |||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 2 years | |||||||
Wombat | Developed Technology | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Finite lived intangible assets | $ 35,200 | |||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 4 years | |||||||
Wombat | Trade Names | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Finite lived intangible assets | $ 2,400 | |||||||
Acquired finite-lived intangible assets, weighted average useful life (in years) | 4 years | |||||||
Cloudmark | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Current assets | $ 37,390 | |||||||
Fixed assets | 543 | |||||||
Non-current assets | 74 | |||||||
Liabilities | (4,422) | |||||||
Deferred revenue | (15,400) | |||||||
Deferred tax liability, net | (7,905) | |||||||
Goodwill | 93,776 | |||||||
Recognized identifiable assets acquired and liabilities assumed, net | 139,256 | |||||||
Cloudmark | Customer Relationships | ||||||||
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 | Order Backlog | ||||||||
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 | Developed Technology | ||||||||
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 Balance, Inc. | ||||||||
Fair value of assets acquired and liabilities assumed | ||||||||
Current assets | $ 534 | |||||||
Fixed assets | 23 | |||||||
Liabilities | (88) | |||||||
Deferred revenue | (700) | |||||||
Deferred tax liability, net | (4,440) | |||||||
Goodwill | 36,514 | |||||||
Recognized identifiable assets acquired and liabilities assumed, net | 49,043 | |||||||
WebLife Balance, Inc. | Customer Relationships | ||||||||
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 Balance, Inc. | Developed Technology | ||||||||
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 |
Acquisitions - Pro Forma Financ
Acquisitions - Pro Forma Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Combinations [Abstract] | |||
Total revenue | $ 911,968 | $ 743,345 | $ 594,966 |
Net loss | $ (158,448) | $ (152,238) | $ (89,221) |
Basic and diluted net loss per share | $ (2.83) | $ (2.92) | $ (2.02) |
Concentration of Risks - Additi
Concentration of Risks - Additional Information (Details) - Customer | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Total revenue | |||
Concentration Risk [Line Items] | |||
Number of customers | 2 | 1 | 1 |
Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Number of customers | 2 | 2 | |
Major Customer 1 | Total revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 12.00% | 12.00% | 12.00% |
Major Customer 1 | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 13.00% | 12.00% | |
Major Customer 2 | Total revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 11.00% | ||
Major Customer 2 | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 11.00% | 12.00% |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 198,953 | $ 165,057 |
Less: Accumulated depreciation | (125,441) | (94,430) |
Property and equipment, net | 73,512 | 70,627 |
Computer equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 170,010 | 142,777 |
Computer equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 2 years | |
Computer equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 4 years | |
Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 5,184 | 3,782 |
Software | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 2 years | |
Software | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 5 years | |
Furniture | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 4,244 | 3,637 |
Useful life | 5 years | |
Office equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 658 | 585 |
Office equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 2 years | |
Office equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 5 years | |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 14,819 | 13,129 |
Leasehold improvements | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 5 years | |
Other | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 408 | 59 |
Useful life | 2 years | |
Construction in progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 3,630 | $ 1,088 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property and equipment acquired under capital leases | |||
Depreciation expense | $ 34,684 | $ 32,396 | $ 23,591 |
Capital leases | |||
Property and equipment acquired under capital leases | |||
Depreciation expense | $ 29 | $ 31 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Accrued compensation | $ 73,384 | $ 55,924 |
ESPP contributions | 4,138 | 3,224 |
Customer deposits | 12,316 | 5,961 |
Accrued royalties | 1,528 | 1,373 |
Other | 28,057 | 24,237 |
Total accrued liabilities | $ 119,423 | $ 90,719 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill Activity and Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill activity and balances | ||
Beginning balance | $ 460,425 | $ 297,704 |
Acquisitions during period | 230,243 | 162,865 |
Purchase accounting adjustments | (3,151) | (144) |
Closing balance | $ 687,517 | $ 460,425 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Intangible assets excluding goodwill: | ||
Gross Carrying Amount | $ 330,624 | $ 235,599 |
Accumulated Amortization | (144,601) | (98,954) |
Net Carrying Amount | 186,023 | 136,645 |
Developed Technology | ||
Intangible assets excluding goodwill: | ||
Gross Carrying Amount | 210,469 | 154,069 |
Accumulated Amortization | (110,284) | (79,525) |
Net Carrying Amount | 100,185 | 74,544 |
Customer Relationships | ||
Intangible assets excluding goodwill: | ||
Gross Carrying Amount | 87,200 | 71,400 |
Accumulated Amortization | (25,608) | (15,166) |
Net Carrying Amount | 61,592 | 56,234 |
Trade Names and Patents | ||
Intangible assets excluding goodwill: | ||
Gross Carrying Amount | 3,730 | 3,330 |
Accumulated Amortization | (2,349) | (1,430) |
Net Carrying Amount | 1,381 | 1,900 |
Order Backlog | ||
Intangible assets excluding goodwill: | ||
Gross Carrying Amount | 8,100 | 6,800 |
Accumulated Amortization | (6,360) | (2,833) |
Net Carrying Amount | 1,740 | $ 3,967 |
In-process Research and Development | ||
Intangible assets excluding goodwill: | ||
Gross Carrying Amount | 21,125 | |
Net Carrying Amount | $ 21,125 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible assets excluding goodwill: | |||
Intangible amortization expense | $ 45,648 | $ 41,157 | $ 18,506 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Estimated Amortization Cost of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Future estimated amortization costs of intangible assets: | ||
2020 | $ 57,990 | |
2021 | 53,810 | |
2022 | 31,548 | |
2023 | 21,983 | |
2024 | 13,686 | |
Thereafter | 7,006 | |
Net Carrying Amount | $ 186,023 | $ 136,645 |
Fair Value Measurements and I_3
Fair Value Measurements and Investments - Summary of Assets or Liabilities Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash equivalents | $ 847,555 | $ 185,392 |
Short-term investments | 43,385 | 46,307 |
Total financial assets | 868,532 | 191,987 |
Level 1 | ||
Assets | ||
Total financial assets | 815,158 | 133,202 |
Level 2 | ||
Assets | ||
Total financial assets | 53,374 | 58,785 |
Money market funds | ||
Assets | ||
Cash equivalents | 815,158 | 133,202 |
Money market funds | Level 1 | ||
Assets | ||
Cash equivalents | 815,158 | 133,202 |
Commercial paper | ||
Assets | ||
Cash equivalents | 9,989 | 12,478 |
Short-term investments | 27,932 | 30,838 |
Commercial paper | Level 2 | ||
Assets | ||
Cash equivalents | 9,989 | 12,478 |
Short-term investments | 27,932 | 30,838 |
Corporate debt securities | ||
Assets | ||
Short-term investments | 13,454 | 13,470 |
Corporate debt securities | Level 2 | ||
Assets | ||
Short-term investments | 13,454 | 13,470 |
U.S. Treasury securities | ||
Assets | ||
Short-term investments | 1,999 | 1,999 |
U.S. Treasury securities | Level 2 | ||
Assets | ||
Short-term investments | $ 1,999 | $ 1,999 |
Fair Value Measurements and I_4
Fair Value Measurements and Investments - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Maximum investment maturity term | 1 year | 1 year | |
Other-than-temporary impairments | $ 0 | $ 0 | $ 0 |
2024 Notes | Level 2 | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Fair value of convertible senior notes | $ 951,050,000 |
Fair Value Measurements and I_5
Fair Value Measurements and Investments - Reconciliation of Acquisition-related Contingent Consideration Liability (Details) - Contingent Consideration - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 634 | $ 8,233 |
Additions during the period | 0 | |
Payments during the period | (555) | (6,066) |
Adjustments to fair value during the period recorded in General and administrative expenses | (79) | (1,533) |
Ending balance | $ 0 | $ 634 |
Fair Value Measurements and I_6
Fair Value Measurements and Investments - Summary of Cost and Fair Value of Cash and Cash Equivalents and Available-for-Sale Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule Of Cash And Cash Equivalents And Investments [Line Items] | ||
Cash and cash equivalents, amortized cost | $ 847,555 | $ 185,392 |
Cash and cash equivalents, unrealized gains | 0 | 0 |
Cash and cash equivalents, unrealized losses | 0 | 0 |
Cash and cash equivalents, fair value | 847,555 | 185,392 |
Short-term investments, amortized cost | 43,383 | 46,314 |
Short-term investments, unrealized gains | 3 | 0 |
Short-term investments, unrealized losses | (1) | (7) |
Short-term investments, fair value | 43,385 | 46,307 |
Cash | ||
Schedule Of Cash And Cash Equivalents And Investments [Line Items] | ||
Cash and cash equivalents, amortized cost | 22,408 | 39,712 |
Cash and cash equivalents, unrealized gains | 0 | 0 |
Cash and cash equivalents, unrealized losses | 0 | 0 |
Cash and cash equivalents, fair value | 22,408 | 39,712 |
Money market funds | ||
Schedule Of Cash And Cash Equivalents And Investments [Line Items] | ||
Cash and cash equivalents, amortized cost | 815,158 | 133,202 |
Cash and cash equivalents, unrealized gains | 0 | 0 |
Cash and cash equivalents, unrealized losses | 0 | 0 |
Cash and cash equivalents, fair value | 815,158 | 133,202 |
Commercial paper | ||
Schedule Of Cash And Cash Equivalents And Investments [Line Items] | ||
Cash and cash equivalents, amortized cost | 9,989 | 12,478 |
Cash and cash equivalents, unrealized gains | 0 | 0 |
Cash and cash equivalents, unrealized losses | 0 | 0 |
Cash and cash equivalents, fair value | 9,989 | 12,478 |
Short-term investments, amortized cost | 27,932 | 30,838 |
Short-term investments, unrealized gains | 0 | 0 |
Short-term investments, unrealized losses | 0 | 0 |
Short-term investments, fair value | 27,932 | 30,838 |
Corporate debt securities | ||
Schedule Of Cash And Cash Equivalents And Investments [Line Items] | ||
Short-term investments, amortized cost | 13,453 | 13,477 |
Short-term investments, unrealized gains | 2 | 0 |
Short-term investments, unrealized losses | (1) | (7) |
Short-term investments, fair value | 13,454 | 13,470 |
U.S. Treasury securities | ||
Schedule Of Cash And Cash Equivalents And Investments [Line Items] | ||
Short-term investments, amortized cost | 1,998 | 1,999 |
Short-term investments, unrealized gains | 1 | 0 |
Short-term investments, unrealized losses | 0 | 0 |
Short-term investments, fair value | $ 1,999 | $ 1,999 |
Leases - Summary of Effects of
Leases - Summary of Effects of Adopting ASC 842 (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
Prepaid expenses and other current assets | $ 22,081 | $ 16,872 | |
Operating lease right-of-use assets | 51,852 | ||
Liabilities | |||
Accounts payable | 16,311 | 20,237 | |
Deferred rent | 829 | ||
Operating lease liabilities | 20,202 | ||
Long-term operating lease liabilities | 36,223 | ||
Long-term deferred rent | 3,757 | ||
Stockholders’ equity: | |||
Accumulated deficit | $ (725,594) | (595,418) | |
ASC 842 | |||
Assets | |||
Prepaid expenses and other current assets | $ 16,791 | 16,872 | |
Operating lease right-of-use assets | 59,549 | ||
Liabilities | |||
Accounts payable | 20,021 | 20,237 | |
Deferred rent | 829 | ||
Operating lease liabilities | 24,820 | ||
Long-term operating lease liabilities | 39,361 | ||
Long-term deferred rent | 3,757 | ||
Stockholders’ equity: | |||
Accumulated deficit | (595,329) | $ (595,418) | |
ASC 842 | Adjustments | |||
Assets | |||
Prepaid expenses and other current assets | (81) | ||
Operating lease right-of-use assets | 59,549 | ||
Liabilities | |||
Accounts payable | (216) | ||
Deferred rent | (829) | ||
Operating lease liabilities | 24,820 | ||
Long-term operating lease liabilities | 39,361 | ||
Long-term deferred rent | (3,757) | ||
Stockholders’ equity: | |||
Accumulated deficit | $ 89 |
Leases - Additional Information
Leases - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 31, 2018USD ($)ft² | |
Lessee Lease Description [Line Items] | ||||
Operating lease right-of-use assets | $ 51,852,000 | |||
Lease liabilities | $ 56,425,000 | |||
Operating lease rental payments over the lease term | $ 232,347,000 | |||
Operating lease rent expense | $ 10,944,000 | $ 8,010,000 | ||
California | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease agreement term | 127 months | |||
Operating lease agreement renewal term extended | 5 years | |||
Lease agreement corporate office space | ft² | 242,400 | |||
Lease agreement description | beginning in 2020. The property will be constructed by the landlord, with the completion date expected to occur between August and November 2020, which is when the lease is expected to commence. As such, no ROU assets or related lease liabilities were recorded in the financial statements in 2019. | |||
Operating lease right-of-use assets | $ 0 | |||
Lease liabilities | $ 0 | |||
California | Over Lease Term | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease rental payments over the lease term | $ 161,300,000 | |||
Real Estate Leases | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease existence of option to extend | true | |||
Operating lease option to extend, description | The Company’s real estate leases have remaining lease terms for one to ten years, some of which include options to extend the lease period up to ten years. | |||
Real Estate Leases | Minimum | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease agreement term | 1 year | |||
Real Estate Leases | Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease agreement term | 10 years | |||
Operating lease agreement renewal term extended | 10 years | |||
Datacenter Leases | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease agreement renewal term extended | 1 year | |||
Datacenter Leases | Minimum | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease agreement term | 1 year | |||
Datacenter Leases | Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease agreement term | 3 years |
Leases - Schedule of Component
Leases - Schedule of Component of Lease Expense and Supplemental Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | |||
Operating lease cost | $ 26,115 | ||
Short-term lease cost | 2,846 | ||
Variable lease cost | 3,444 | ||
Total lease cost | 32,405 | ||
Cash paid for amounts included in the measurement of operating lease liabilities | 27,104 | ||
Right-of-use assets obtained in exchange for operating lease obligations | $ 15,668 | $ 0 | $ 0 |
Weighted-average remaining lease term - operating leases | 4 years | ||
Weighted-average discount rate - operating leases | 5.04% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 20,858 |
2021 | 13,531 |
2022 | 11,091 |
2023 | 6,357 |
2024 | 4,304 |
Thereafter | 7,867 |
Total lease payments | 64,008 |
Less imputed interest | (7,583) |
Total | $ 56,425 |
Leases - Schedule of Future Ann
Leases - Schedule of Future Annual Minimum Lease Payments under Non-cancellable Lease (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 25,313 |
2020 | 17,535 |
2021 | 19,155 |
2022 | 21,581 |
2023 | 19,609 |
Thereafter | 129,154 |
Total minimum lease payments | $ 232,347 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Minimum purchase commitments | $ 100,215 |
Long-term minimum purchase commitments through due in three years | $ 58,137 |
Convertible Senior Notes - Addi
Convertible Senior Notes - Additional Information (Details) $ / shares in Units, shares in Thousands | Aug. 23, 2019USD ($)d$ / shares | Jun. 17, 2015USD ($) | Dec. 11, 2013USD ($) | Sep. 30, 2018USD ($)shares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)shares |
Debt Instrument [Line Items] | |||||||
Proceeds from issuance of convertible senior notes, net of discount | $ 901,293,000 | $ 0 | $ 0 | ||||
Convertible senior notes converted to equity | 0 | 213,306,000 | 193,153,000 | ||||
Repayment of convertible notes | 0 | 142,000 | 14,000 | ||||
Fair value of common stock shares converted | 12,651,000 | 8,870,000 | 8,307,000 | ||||
Loss on conversion of convertible notes | 0 | 7,207,000 | 2,696,000 | ||||
Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Loss on conversion of convertible notes | $ 0 | 7,207,000 | 2,696,000 | ||||
0.25% Convertible Senior Notes due 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 920,000,000 | ||||||
Debt interest rate | 0.25% | ||||||
Debt instrument aggregate principal amount | $ 800,000,000 | ||||||
Option to purchase additional principal amount | 120,000,000 | ||||||
Agent's discount and issuance costs | 19,065,000 | ||||||
Proceeds from issuance of convertible senior notes, net of discount | 900,935,000 | ||||||
Proceeds from issuance of convertible senior notes, used to payoff capped call transactions | $ 84,871,000 | ||||||
Debt instrument, maturity date, description | The 2024 Notes mature on August 15, 2024, unless repurchased, redeemed or converted in accordance with their terms prior to such date. | ||||||
Debt instrument, convertible, conversion ratio | 6.4941 | ||||||
Debt instrument, convertible, conversion price | $ / shares | $ 153.99 | ||||||
Percentage of principal amount that are redeemable | 100.00% | ||||||
Debt instrument, convertible, threshold trading days | d | 20 | ||||||
Debt instrument, convertible, threshold consecutive trading days | d | 30 | ||||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||||||
Number of consecutive business days following consecutive trading day period | 5 days | ||||||
Number of consecutive trading days | 5 days | ||||||
Periodic payment, principal | $ 1,000 | ||||||
Trading price as percentage of closing price of common stock | 98.00% | ||||||
Carrying amount of the debt component net | $ 737,912,000 | ||||||
Carrying amount of the equity component net | $ 163,023,000 | ||||||
Effective interest rate | 4.76% | ||||||
Issuance cost recorded at equity | $ 3,450,000 | ||||||
Cap price of capped calls | $ / shares | $ 223.98 | ||||||
Premium paid for purchase of capped calls | $ 83,720,000 | ||||||
Issuance costs related to capped calls | $ 1,151,000 | ||||||
0.25% Convertible Senior Notes due 2024 | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Agent's discount and issuance costs | $ 170,380,000 | 0 | |||||
Carrying amount of the debt component net | 749,620,000 | 0 | |||||
Carrying amount of the equity component net | $ 163,023,000 | $ 0 | |||||
0.75% Convertible senior notes | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
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 | ||||||
Convertible senior notes converted to equity | $ 229,869,000 | ||||||
Shares of commons stock issued for conversion of convertible notes | shares | 2,928 | ||||||
Repayment of convertible notes | $ 142,000 | ||||||
Fair value of common stock shares converted | 336,994,000 | ||||||
Loss on conversion of convertible notes | $ 7,207,000 | ||||||
1.25% Convertible senior notes | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
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 | ||||||
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 common stock shares converted | 473,176,000 | ||||||
Loss on conversion of convertible notes | $ 2,696,000 |
Convertible Senior Notes - Summ
Convertible Senior Notes - Summary of Carrying Values and Interest Expenses and Loss on Conversion Related to Notes (Details) - 0.25% Convertible Senior Notes due 2024 - USD ($) $ in Thousands | Dec. 31, 2019 | Aug. 23, 2019 | Dec. 31, 2018 |
Liability component: | |||
Less: debt discount and issuance costs, net of amortization | $ (19,065) | ||
Net carrying amount | 737,912 | ||
Equity component | $ 163,023 | ||
Senior Notes | |||
Liability component: | |||
Principal | $ 920,000 | $ 0 | |
Less: debt discount and issuance costs, net of amortization | (170,380) | 0 | |
Net carrying amount | 749,620 | 0 | |
Equity component | $ 163,023 | $ 0 |
Convertible Senior Notes - Su_2
Convertible Senior Notes - Summary of Carrying Values and Interest Expenses and Loss on Conversion Related to Notes (Parenthetical) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
0.25% Convertible Senior Notes due 2024 | |
Debt Instrument [Line Items] | |
Issuance cost recorded at equity | $ 3,450 |
Convertible Senior Notes - Su_3
Convertible Senior Notes - Summary of Carrying Values and Expenses Related to Convertible Senior Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest Expense, Debt | |||
Amortization of debt discount and issuance costs | $ 11,708 | $ 8,383 | $ 21,789 |
Loss on conversion | 0 | 7,207 | 2,696 |
Senior Notes | |||
Interest Expense, Debt | |||
Interest expense related to contractual interest coupon | 818 | 1,171 | 4,123 |
Amortization of debt discount and issuance costs | 11,708 | 8,383 | 21,789 |
Loss on conversion | 0 | 7,207 | 2,696 |
Total | $ 12,526 | $ 16,761 | $ 28,608 |
Equity Award Plans - Stock-Base
Equity Award Plans - Stock-Based Compensation Plans - Additional Information (Details) shares in Thousands | 12 Months Ended | |
Dec. 31, 2019planshares | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity incentive plans held by the company (number of plans) | 8 | |
2002 Plan and 2012 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized for issuance (in shares) | shares | 32,759 | |
Shares available for future grant under the stock plans (in shares) | shares | 7,162 | |
Stock options to purchase common stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Term until award expiration | 10 years | |
Stock options to purchase common stock | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Term until award expiration | 10 years | |
Award vesting period | 4 years | |
Stock options to purchase common stock | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Restricted Stock | 2002 Plan and 2012 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 4 years | |
Various Acquisitions | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity incentive plans held by the company (number of plans) | 6 | |
FireLayers | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity incentive plans held by the company (number of plans) | 2 | |
FireLayers | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years |
Equity Award Plans - Stock Opti
Equity Award Plans - Stock Options - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted | 0 | 0 | 0 |
Stock options to purchase common stock | |||
Stock option activity under the Plan, in weighted average exercise price: | |||
Aggregate intrinsic value, exercised | $ 30,766 | $ 73,057 | $ 82,131 |
Proceeds from stock options exercised | 5,048 | 9,802 | 12,383 |
Fair value of options, vested in period | 1,373 | $ 3,447 | $ 7,450 |
Unrecognized stock options compensation expense | $ 8,594 | ||
Average remaining vesting term | 1 year 11 months 19 days |
Equity Award Plans - Stock Op_2
Equity Award Plans - Stock Option Activity under Stock Incentive Plan (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock option activity under the Plan | ||||
Outstanding, beginning of period (in shares) | 1,255 | 2,040 | 3,183 | |
Options assumed per acquisitions (in shares) | 91 | 13 | ||
Options exercised (in shares) | (297) | (767) | (1,126) | |
Options forfeited and canceled (in shares) | (2) | (18) | (30) | |
Outstanding, ending of period (in shares) | 1,047 | 1,255 | 2,040 | 3,183 |
Exercisable (in shares) | 957 | |||
Vested and expected to vest (in shares) | 1,047 | |||
Stock option activity under the Plan, in weighted average exercise price: | ||||
Balance at beginning of period (USD per share) | $ 28.67 | $ 22.88 | $ 18.91 | |
Options assumed per business acquisition (USD per share) | 11.77 | 20.27 | ||
Options exercised (USD per share) | 17 | 12.78 | 11.04 | |
Options forfeited and canceled (USD per share) | 13.46 | 49.24 | 45.54 | |
Balance at ending of period (USD per share) | 30.55 | $ 28.67 | $ 22.88 | $ 18.91 |
Exercisable (in USD per share) | 31.75 | |||
Vested and expected to vest (in USD per share) | $ 30.55 | |||
Weighted average remaining contractual term | 4 years 4 months 17 days | 4 years 9 months 7 days | 5 years 2 months 1 day | 5 years 4 months 20 days |
Weighted average remaining contractual term, Exercisable | 4 years 10 days | |||
Weighted average remaining contractual term, Vested and expected to vest | 4 years 4 months 17 days | |||
Aggregate intrinsic value, outstanding | $ 88,190 | $ 69,224 | $ 134,511 | $ 164,842 |
Aggregate intrinsic value, exercisable | 79,448 | |||
Aggregate intrinsic value, vested and expected to vest | $ 88,190 |
Equity Award Plans - Summary of
Equity Award Plans - Summary of RSUs and PSUs under Stock Incentive Plan (Details) - Restricted Stock Units and Performance Stock Units - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
RSU's outstanding, number of shares: | |||
Awarded at beginning of period (in shares) | 4,568 | 3,540 | 3,465 |
Awards assumed per business acquisition (in shares) | 75 | 8 | |
Award granted (in shares) | 2,228 | 3,209 | 1,865 |
Awards vested (in shares) | (1,546) | (1,446) | (1,320) |
Awards forfeited (in shares) | (430) | (735) | (478) |
Awarded at end of period (in shares) | 4,895 | 4,568 | 3,540 |
RSUs outstanding, granted fair value per unit | |||
Awarded at beginning of period (USD per share) | $ 89.88 | $ 71.77 | $ 56.11 |
Awards assumed per business acquisitions (USD per share) | 119.13 | 91.10 | |
Awards granted (USD per share) | 118.30 | 101.56 | 84.91 |
Awards vested (USD per share) | 87.98 | 69.50 | 52.36 |
Awards forfeited (USD per share) | 94.33 | 93.70 | 63.44 |
Awarded at end of period (USD per share) | $ 103.48 | $ 89.88 | $ 71.77 |
Equity Award Plans - Restricted
Equity Award Plans - Restricted Stock Units and Performance Stock Units - Additional Information (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
RSU | |||
RSUs outstanding, granted fair value per unit | |||
Unamortized stock-based compensation expense | $ 383,227 | ||
Average remaining vesting term | 3 years 4 months 17 days | ||
Performance Shares | |||
RSUs outstanding, granted fair value per unit | |||
Unamortized stock-based compensation expense | $ 32,025 | ||
RSU's outstanding, number of shares: | |||
Award granted (in shares) | 171 | 474 | 177 |
Equity Award Plans - Stock Bonu
Equity Award Plans - Stock Bonus Awards and Other Liability Awards - Additional Information (Details) - USD ($) shares in Thousands, $ in Thousands | Mar. 06, 2015 | Mar. 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Stock bonus awards and other liability | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Accrued liability for the stock bonus awards and other liability awards | $ 13,427 | $ 12,741 | |||
Common stock issued (shares) | 107 | 61 | 85 | ||
Stock-based compensation expense | $ 13,427 | $ 12,701 | $ 6,616 | ||
Liability Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock issued (shares) | 20 | 29 | |||
Stock-based compensation expense | $ 408 | $ 2,293 | |||
Fair value of liability award issued | $ 6,885 | $ 0 | |||
Award vesting period | 3 years |
Equity Award Plans - Employee S
Equity Award Plans - Employee Stock Purchase Plan - Additional Information (Details) - ESPP 2012 Plan - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Mar. 30, 2012 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Employee stock purchase plan | ||||
Number of shares authorized ESPP (in shares) | 745 | |||
Annual increase period | 8 years | |||
Maximum number of shares to be available for grant ESPP (in shares) | 1,490 | |||
Shares available for future grant under the stock plans (in shares) | 2,165 | |||
Annual percentage increase of maximum number of shares reserved for issuance ESPP | 1.00% | |||
Shares issued (in shares) | 266 | 231 | 183 | |
Weighted average price per share (USD per share) | $ 86.51 | $ 77.02 | $ 73.02 | |
Unamortized stock-based compensation expense | $ 3,531 | |||
Average remaining vesting term | 4 months 13 days |
Equity Award Plans - Employee_2
Equity Award Plans - Employee Stock Purchase Plan (Details) - ESPP 2012 Plan | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair value assumptions: | |||
Expected life (in years) | 6 months | 6 months | 6 months |
Minimum | |||
Fair value assumptions: | |||
Volatility | 36.00% | 33.00% | 29.00% |
Risk-free interest rate | 1.58% | 1.76% | 0.76% |
Maximum | |||
Fair value assumptions: | |||
Volatility | 37.00% | 40.00% | 37.00% |
Risk-free interest rate | 2.43% | 2.50% | 1.16% |
Equity Award Plans - Restrict_2
Equity Award Plans - Restricted Stock and Deferred Shares - Additional Information (Details) - USD ($) shares in Thousands, $ in Thousands | May 15, 2019 | Feb. 28, 2018 | Nov. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Weblife | Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 2,415 | $ 2,415 | $ 205 | ||||
Number of shares deferred | 107 | ||||||
Fair value of share-based deferred compensation issued | $ 9,652 | ||||||
Unamortized stock-based compensation expense | $ 4,617 | ||||||
Weblife | Restricted Stock | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Deferred shares service term | 4 years | ||||||
Weblife | Restricted Stock | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Deferred shares service term | 3 years | ||||||
Wombat | Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 2 years | ||||||
Stock-based compensation expense | $ 2,788 | 2,288 | |||||
Number of shares deferred | 51 | ||||||
Fair value of share-based deferred compensation issued | $ 5,458 | ||||||
Unamortized stock-based compensation expense | 382 | ||||||
Meta Networks, Ltd | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
Meta Networks, Ltd | Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
Stock-based compensation expense | 1,748 | ||||||
Number of shares deferred | 72 | ||||||
Fair value of share-based deferred compensation issued | $ 8,599 | ||||||
Unamortized stock-based compensation expense | 6,590 | ||||||
Deferred stock allocated to post-combination expense | $ 8,338 | ||||||
Restricted Stock | FireLayers | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares granted in period | 111 | ||||||
Fair value of shares granted | $ 8,669 | ||||||
Award vesting period | 3 years | ||||||
Stock-based compensation expense | $ 2,349 | $ 2,887 | $ 2,887 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Potentially Dilutive Common Shares Outstanding that were Excluded from the Computation of Diluted Net Loss per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive securities excluded from computation of earnings per share | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 12,398 | 6,333 | 8,717 |
Stock options to purchase common stock | |||
Antidilutive securities excluded from computation of earnings per share | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 1,047 | 1,255 | 2,040 |
Restricted stock units | |||
Antidilutive securities excluded from computation of earnings per share | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 4,895 | 4,568 | 3,540 |
Employee stock purchase plan | |||
Antidilutive securities excluded from computation of earnings per share | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 157 | 163 | 118 |
Common stock subject to repurchase | |||
Antidilutive securities excluded from computation of earnings per share | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 207 | 195 | 90 |
Stock bonus awards and other liability | |||
Antidilutive securities excluded from computation of earnings per share | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 117 | 152 | 98 |
2024 Notes | |||
Antidilutive securities excluded from computation of earnings per share | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 5,975 | ||
2020 Notes | |||
Antidilutive securities excluded from computation of earnings per share | |||
Total antidilutive securities excluded from computation of earnings per share (in shares) | 2,831 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating and reportable segments | 1 |
Number of reportable segments | 1 |
Segment Reporting - Summary of
Segment Reporting - Summary of Total Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment reporting: | |||
Total revenue | $ 888,190 | $ 716,994 | $ 519,681 |
United States | |||
Segment reporting: | |||
Total revenue | 713,305 | 584,294 | 432,564 |
Rest of world | |||
Segment reporting: | |||
Total revenue | $ 174,885 | $ 132,700 | $ 87,117 |
Segment Reporting - Summary o_2
Segment Reporting - Summary of Long-lived Tangible Assets by Geographic Area (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Segment reporting: | ||
Total long-lived assets | $ 73,512 | $ 70,627 |
United States | ||
Segment reporting: | ||
Total long-lived assets | 58,447 | 57,682 |
Rest of world | ||
Segment reporting: | ||
Total long-lived assets | $ 15,065 | $ 12,945 |
Income Taxes - Schedule of Dome
Income Taxes - Schedule of Domestic and Foreign Components of Loss Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||
Domestic | $ (142,830) | $ (126,128) | $ (110,192) |
Foreign | 32,482 | 9,147 | 30,440 |
Loss before income taxes | $ (110,348) | $ (116,981) | $ (79,752) |
Income Taxes - Components of (P
Income Taxes - Components of (Provision for) Benefit from Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current tax expense: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 258 | 258 | 80 |
Foreign | 22,030 | 1,768 | 5,923 |
Total current | 22,288 | 2,026 | 6,003 |
Deferred tax expense: | |||
Federal | 264 | (12,773) | (12,268) |
State | (1,812) | (266) | |
Foreign | (2,635) | (673) | (3,419) |
Total deferred | (2,371) | (15,258) | (15,953) |
Provision for (benefit from) income taxes | $ 19,917 | $ (13,232) | $ (9,950) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
Valuation allowance | ||||
Federal statutory income tax rate | 21.00% | 21.00% | 34.00% | |
Valuation allowance increase (decrease) | $ 1,313,000 | $ 41,521,000 | $ 50,056,000 | |
Impact of Tax Act and other tax law changes | (42,000) | 0 | 85,606,000 | |
Tax expense related to transfer of certain intellectual property rights from subsidiary | 17,670,000 | |||
Deferred income tax benefit | (2,371,000) | (15,258,000) | (15,953,000) | |
Accrued interest and penalties | 368,000 | 21,000 | ||
Liability recorded on interest and penalties | 677,000 | 309,000 | ||
Uncertain tax benefits that would affect effective tax rate if recognized | 16,068,000 | 4,616,000 | ||
Repatriation tax charge was owed | 0 | |||
State | ||||
Valuation allowance | ||||
Operating loss carryforwards | 417,505,000 | 396,665,000 | ||
Foreign | ||||
Valuation allowance | ||||
Operating loss carryforwards | 52,851,000 | 0 | ||
Research tax credit carryforward | State | ||||
Valuation allowance | ||||
Tax credit carryforward | 32,291,000 | 22,987,000 | ||
Research tax credit carryforward | Foreign | ||||
Valuation allowance | ||||
Tax credit carryforward | 2,863,000 | 2,426,000 | ||
Wombat | ||||
Valuation allowance | ||||
Deferred income tax benefit | 14,725,000 | |||
Cloudmark | ||||
Valuation allowance | ||||
Deferred income tax benefit | 7,904,000 | |||
Weblife | ||||
Valuation allowance | ||||
Deferred income tax benefit | 4,440,000 | |||
Internal Revenue Service (IRS) | ||||
Valuation allowance | ||||
Impact of Tax Act and other tax law changes | 87,621,000 | |||
Provisional deferred tax benefits related to reduction in US deferred tax liability on acquired intangibles | $ 2,024,000 | |||
Operating loss carryforwards | 841,970,000 | 797,569,000 | ||
Internal Revenue Service (IRS) | Research tax credit carryforward | ||||
Valuation allowance | ||||
Tax credit carryforward | 37,783,000 | 24,556,000 | ||
ASU 2016-16 | ||||
Valuation allowance | ||||
Increase in accumulated deficit due to ASU 2016-16 adoption | $ 3,216,000 | |||
2024 Notes | ||||
Valuation allowance | ||||
Valuation allowance increase (decrease) | $ (44,855,000) | |||
2020 Notes | ||||
Valuation allowance | ||||
Valuation allowance increase (decrease) | $ 3,392,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | |||
Tax at federal statutory rate | $ (23,173) | $ (24,566) | $ (27,116) |
Foreign income tax rate differential | 717 | 307 | (3,076) |
State, net of federal benefit | (4,939) | (3,859) | (2,942) |
Stock compensation charges | (11,265) | (20,341) | (32,150) |
SubPart F and other permanent items | 9,657 | 1,597 | 2,155 |
Section 162m | 8,465 | 5,501 | 601 |
Provision to return and other | (453) | (1,082) | 2,480 |
Research and development credits | (21,413) | (11,165) | (7,713) |
Uncertain tax positions | 16,110 | 2,171 | 5,888 |
Impact of Tax Act and other tax law changes | (42) | 0 | 85,606 |
Valuation allowance | 46,253 | 38,205 | (33,683) |
Provision for (benefit from) income taxes | $ 19,917 | $ (13,232) | $ (9,950) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 215,365 | $ 192,508 |
Tax credit carryforwards | 49,300 | 33,799 |
Research expenditures | 12,139 | 577 |
Deferred revenue | 16,254 | 17,716 |
Stock compensation | 20,156 | 16,861 |
Fixed assets | 1,345 | 313 |
Accruals and other | 13,753 | 12,619 |
Gross deferred tax assets | 328,312 | 274,393 |
Valuation allowance | (224,047) | (222,734) |
Total deferred tax assets | 104,265 | 51,659 |
Deferred tax liabilities: | ||
Intangible assets and other | (26,203) | (23,282) |
Deferred commissions | (33,263) | (26,008) |
Convertible senior notes | (42,304) | 0 |
Total deferred tax liabilities | (101,770) | (49,290) |
Total net deferred tax assets (liabilities) | 2,495 | 2,369 |
Non-current deferred income tax assets (included in other long-term assets) | 3,721 | 2,946 |
Non-current deferred income tax liabilities (included in long-term liabilities) | $ 1,226 | $ 577 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 16,454 | $ 13,861 | $ 5,846 |
Increase in balances related to tax positions taken during the current period | 14,195 | 2,692 | 8,160 |
Increase in balances related to tax positions taken during the prior period | 2,637 | 217 | 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 | (116) | (316) | (188) |
Ending balance | $ 33,170 | $ 16,454 | $ 13,861 |