Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 02, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-35618 | |
Entity Registrant Name | LegalZoom.com, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-4752856 | |
Entity Address, Address Line One | 954 Villa Street | |
Entity Address, City or Town | Mountain View | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94041 | |
City Area Code | 323 | |
Local Phone Number | 962-8600 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | LZ | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 175,611,948 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001286139 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 118,795 | $ 225,719 |
Accounts receivable, net of allowances of $3,776 and $4,906, respectively | 15,347 | 11,738 |
Prepaid expenses and other current assets | 22,414 | 15,159 |
Current assets held for sale | 22,722 | 22,722 |
Total current assets | 179,278 | 275,338 |
Property and equipment, net | 57,136 | 48,232 |
Goodwill | 63,318 | 63,318 |
Intangible assets, net | 11,194 | 13,735 |
Operating lease right-of-use assets | 7,212 | 8,518 |
Deferred income taxes | 31,396 | 29,015 |
Available-for-sale debt securities | 1,374 | 1,159 |
Other assets | 8,607 | 8,503 |
Total assets | 359,515 | 447,818 |
Current liabilities: | ||
Accounts payable | 34,247 | 32,282 |
Accrued expenses and other current liabilities | 58,020 | 61,678 |
Deferred revenue | 189,146 | 167,951 |
Operating lease liabilities | 1,630 | 2,052 |
Total current liabilities | 283,043 | 263,963 |
Operating lease liabilities, non-current | 6,255 | 6,966 |
Deferred revenue | 452 | 490 |
Other liabilities | 9,003 | 7,565 |
Total liabilities | 298,753 | 278,984 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 100,000 shares authorized at June 30, 2024 and December 31, 2023, none issued or outstanding at June 30, 2024 and December 31, 2023 | 0 | 0 |
Common stock, $0.001 par value; 1,000,000 shares authorized; 176,108 shares and 188,538 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | 177 | 189 |
Additional paid-in capital | 1,125,942 | 1,101,474 |
Accumulated deficit | (1,066,035) | (933,061) |
Accumulated other comprehensive income | 678 | 232 |
Total stockholders’ equity | 60,762 | 168,834 |
Total liabilities and stockholders’ equity | $ 359,515 | $ 447,818 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 3,776 | $ 4,906 |
Preferred stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock shares authorized (in shares) | 100,000 | 100,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock shares issued (in shares) | 176,108 | 188,538 |
Common stock shares outstanding (in shares) | 176,108 | 188,538 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Revenue | $ 177,362 | $ 168,854 | $ 351,576 | $ 334,790 |
Cost of revenue | 63,609 | 63,748 | 131,993 | 124,143 |
Gross profit | 113,753 | 105,106 | 219,583 | 210,647 |
Operating expenses: | ||||
Sales and marketing | 60,130 | 53,525 | 113,883 | 113,675 |
Technology and development | 25,798 | 19,900 | 49,755 | 39,583 |
General and administrative | 26,679 | 26,936 | 49,744 | 53,440 |
Total operating expenses | 112,607 | 100,361 | 213,382 | 206,698 |
Income from operations | 1,146 | 4,745 | 6,201 | 3,949 |
Interest expense | (112) | (87) | (173) | (171) |
Interest income | 2,315 | 2,240 | 5,202 | 3,905 |
Other (expense) income, net | 11 | 624 | 104 | 1,318 |
Income before income taxes | 3,360 | 7,522 | 11,334 | 9,001 |
Provision for income taxes | 2,046 | 6,127 | 5,276 | 9,964 |
Net income (loss) | $ 1,314 | $ 1,395 | $ 6,058 | $ (963) |
Net income (loss) per share - basic (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.03 | $ (0.01) |
Net income (loss) per share - diluted (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.03 | $ (0.01) |
Weighted-average shares used to compute net income (loss) per share - basic (in shares) | 184,257 | 191,342 | 186,438 | 191,318 |
Weighted-average shares used to compute net income (loss) per share - diluted (in shares) | 186,456 | 194,826 | 189,926 | 191,318 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 1,314 | $ 1,395 | $ 6,058 | $ (963) |
Other comprehensive income (loss), net of tax: | ||||
Change in foreign currency translation adjustments | (4) | (536) | 292 | (1,167) |
Change in available-for-sale debt securities due to unrealized gains | 154 | 0 | 154 | 0 |
Total other comprehensive income (loss) | 150 | (536) | 446 | (1,167) |
Total comprehensive income (loss) | $ 1,464 | $ 859 | $ 6,504 | $ (2,130) |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Stockholders’ Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income |
Beginning Balance (in shares) at Dec. 31, 2022 | 190,822 | ||||
Beginning balance at Dec. 31, 2022 | $ 142,375 | $ 190 | $ 1,032,550 | $ (891,862) | $ 1,497 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options and ESPP (in shares) | 28 | ||||
Issuance of common stock upon exercise of stock options and ESPP | 22 | 22 | |||
Issuance of common stock upon vesting of restricted stock awards (in shares) | 1,164 | ||||
Issuance of common stock upon vesting of restricted stock awards | 0 | $ 1 | (1) | ||
Stock-based compensation | 17,378 | 17,378 | |||
Repurchased common stock (in shares) | (771) | ||||
Repurchased common stock | (6,768) | $ (1) | (6,767) | ||
Other comprehensive income (loss) | (631) | (631) | |||
Net income (loss) | (2,358) | (2,358) | |||
Ending Balance (in shares) at Mar. 31, 2023 | 191,244 | ||||
Ending balance at Mar. 31, 2023 | 150,017 | $ 190 | 1,049,948 | (900,987) | 866 |
Beginning Balance (in shares) at Dec. 31, 2022 | 190,822 | ||||
Beginning balance at Dec. 31, 2022 | 142,375 | $ 190 | 1,032,550 | (891,862) | 1,497 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Other comprehensive income (loss) | (1,167) | ||||
Net income (loss) | (963) | ||||
Ending Balance (in shares) at Jun. 30, 2023 | 191,657 | ||||
Ending balance at Jun. 30, 2023 | 168,349 | $ 191 | 1,070,461 | (902,633) | 330 |
Beginning Balance (in shares) at Mar. 31, 2023 | 191,244 | ||||
Beginning balance at Mar. 31, 2023 | 150,017 | $ 190 | 1,049,948 | (900,987) | 866 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options and ESPP (in shares) | 362 | ||||
Issuance of common stock upon exercise of stock options and ESPP | 2,951 | 2,951 | |||
Issuance of common stock upon vesting of restricted stock awards (in shares) | 661 | ||||
Issuance of common stock upon vesting of restricted stock awards | 0 | $ 1 | (1) | ||
Shares surrendered for settlement of minimum statutory tax withholdings (in shares) | (232) | ||||
Shares surrendered for settlement of minimum statutory tax withholdings | (2,469) | (2,469) | |||
Stock-based compensation | 20,031 | 20,031 | |||
Repurchased common stock (in shares) | (378) | ||||
Repurchased common stock | (3,041) | (3,041) | |||
Other comprehensive income (loss) | (536) | (536) | |||
Net income (loss) | 1,395 | 1,395 | |||
Ending Balance (in shares) at Jun. 30, 2023 | 191,657 | ||||
Ending balance at Jun. 30, 2023 | $ 168,349 | $ 191 | 1,070,461 | (902,633) | 330 |
Beginning Balance (in shares) at Dec. 31, 2023 | 188,538 | 188,538 | |||
Beginning balance at Dec. 31, 2023 | $ 168,834 | $ 189 | 1,101,474 | (933,061) | 232 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options and ESPP (in shares) | 161 | ||||
Issuance of common stock upon exercise of stock options and ESPP | 82 | 82 | |||
Issuance of common stock upon vesting of restricted stock awards (in shares) | 2,236 | ||||
Issuance of common stock upon vesting of restricted stock awards | 0 | $ 2 | (2) | ||
Shares surrendered for settlement of minimum statutory tax withholdings (in shares) | (888) | ||||
Shares surrendered for settlement of minimum statutory tax withholdings | (9,564) | (9,564) | |||
Stock-based compensation | 16,273 | 16,273 | |||
Repurchased common stock (in shares) | (1,172) | ||||
Repurchased common stock | (12,759) | $ (1) | (12,758) | ||
Other comprehensive income (loss) | 296 | 296 | |||
Net income (loss) | 4,744 | 4,744 | |||
Ending Balance (in shares) at Mar. 31, 2024 | 188,875 | ||||
Ending balance at Mar. 31, 2024 | $ 167,906 | $ 190 | 1,108,263 | (941,075) | 528 |
Beginning Balance (in shares) at Dec. 31, 2023 | 188,538 | 188,538 | |||
Beginning balance at Dec. 31, 2023 | $ 168,834 | $ 189 | 1,101,474 | (933,061) | 232 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Repurchased common stock (in shares) | (15,100) | ||||
Other comprehensive income (loss) | $ 446 | ||||
Net income (loss) | $ 6,058 | ||||
Ending Balance (in shares) at Jun. 30, 2024 | 176,108 | 176,108 | |||
Ending balance at Jun. 30, 2024 | $ 60,762 | $ 177 | 1,125,942 | (1,066,035) | 678 |
Beginning Balance (in shares) at Mar. 31, 2024 | 188,875 | ||||
Beginning balance at Mar. 31, 2024 | 167,906 | $ 190 | 1,108,263 | (941,075) | 528 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options and ESPP (in shares) | 309 | ||||
Issuance of common stock upon exercise of stock options and ESPP | 1,733 | 1,733 | |||
Issuance of common stock upon vesting of restricted stock awards (in shares) | 1,338 | ||||
Issuance of common stock upon vesting of restricted stock awards | 0 | $ 1 | (1) | ||
Shares surrendered for settlement of minimum statutory tax withholdings (in shares) | (485) | ||||
Shares surrendered for settlement of minimum statutory tax withholdings | (4,595) | (4,595) | |||
Stock-based compensation | $ 20,542 | 20,542 | |||
Repurchased common stock (in shares) | (13,900) | (13,929) | |||
Repurchased common stock | $ (125,199) | $ (14) | (125,185) | ||
Stock repurchase excise tax | (1,089) | (1,089) | |||
Other comprehensive income (loss) | 150 | 150 | |||
Net income (loss) | $ 1,314 | 1,314 | |||
Ending Balance (in shares) at Jun. 30, 2024 | 176,108 | 176,108 | |||
Ending balance at Jun. 30, 2024 | $ 60,762 | $ 177 | $ 1,125,942 | $ (1,066,035) | $ 678 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities | ||
Net income (loss) | $ 6,058 | $ (963) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 16,096 | 11,406 |
Amortization of right-of-use assets | 1,369 | 1,336 |
Amortization of debt issuance costs | 113 | 112 |
Stock-based compensation | 33,771 | 35,423 |
Deferred income taxes | (879) | 7,614 |
Change in fair value of contingent consideration | 0 | (695) |
Unrealized foreign exchange (gain) loss | 338 | (1,104) |
Other | 0 | (1) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,436) | (316) |
Prepaid expenses and other current assets | (7,265) | 3,407 |
Other assets | (254) | 4 |
Accounts payable | 1,935 | 8,319 |
Accrued expenses and other liabilities | (6,309) | (4,082) |
Operating lease liabilities | (1,196) | (1,132) |
Income tax payable | (59) | 8 |
Deferred revenue | 21,158 | 15,037 |
Net cash provided by operating activities | 61,440 | 74,373 |
Cash flows from investing activities | ||
Purchase of property and equipment | (19,351) | (15,227) |
Net cash used in investing activities | (19,351) | (15,227) |
Cash flows from financing activities | ||
Repayment of capital lease obligations | (13) | (18) |
Repurchase of common stock | (136,450) | (9,809) |
Shares surrendered for settlement of minimum statutory tax withholding | (14,160) | (2,469) |
Proceeds from issuance of stock under employee stock plans | 1,642 | 2,973 |
Net cash used in financing activities | (148,981) | (9,323) |
Effect of exchange rate changes on cash and cash equivalents | (32) | 32 |
Net (decrease) increase in cash and cash equivalents | (106,924) | 49,855 |
Cash and cash equivalents, at beginning of the period | 225,719 | 189,082 |
Cash and cash equivalents, at end of the period | 118,795 | 238,937 |
Non-cash operating, investing, and financing activities: | ||
Accrued stock repurchase excise tax | 1,089 | 0 |
Accrued stock repurchase costs | 1,532 | 0 |
Purchase of property and equipment included in accounts payable and accrued expenses and other current liabilities | 2,635 | 983 |
Capitalized stock-based compensation | $ 3,044 | $ 1,986 |
Description of the Business
Description of the Business | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | Description of the Business LegalZoom.com, Inc., was initially formed as a California corporation in 1999 and reincorporated as a Delaware corporation in 2007. LegalZoom.com, Inc., and its wholly owned subsidiaries, are referred to herein as the “Company”, “we,” “us,” or “our”. We are a provider of services that meet the legal needs of small businesses and consumers. Our position at business inception allows us to become a trusted business advisor, supporting the evolving needs of a new business across its lifecycle, and we have expanded our platform to include professional expertise and other products, both legal and non-legal, to better meet the needs of small businesses. Along with business formation, our offerings include ongoing compliance and tax advice and filings, business licenses, accounting, virtual mailbox and e-signature solutions, trademark filings, and estate plans. Additionally, we have insights into our customers and leverage our offerings as a channel to introduce small businesses to leading brands in our partner ecosystem, solving even more of their business needs. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies A summary of the significant accounting policies we follow in the preparation of the accompanying unaudited condensed consolidated financial statements is set forth below. Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023. The December 31, 2023 unaudited condensed consolidated balance sheet was derived from our audited consolidated financial statements as of that date. Our unaudited condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the unaudited condensed consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. There have been no significant changes in accounting policies during the six months ended June 30, 2024 from those disclosed in the audited consolidated financial statements for the year ended December 31, 2023 and the related notes, except as noted below under Recently Adopted Accounting Pronouncements . The operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results expected for the full year ending December 31, 2024. Beginning in the fourth quarter of 2023, we include partner revenue in transaction and subscription revenue to conform with how we evaluate our performance. This change had no impact on total revenue. Prior period disaggregated revenue disclosures have been conformed to the current period presentation. Certain other reclassifications have been made to prior periods amounts to conform to the current period presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, however not limited to, revenue recognition, sales allowances and expected credit loss allowances, available-for-sale debt securities, other equity securities, recoverability of long-lived assets and goodwill, income taxes, commitments and contingencies, valuation of assets and liabilities acquired in business combinations, valuation of assets in asset acquisitions, and fair value of stock-based compensation. Actual results could differ materially from those estimates. On an ongoing basis, we evaluate the estimates compared to historical experience and other factors including the current economic and regulatory environment, which form the basis for our judgments about the carrying value of assets and liabilities. Significant Accounting Policies Significant accounting policies are detailed in "Note 2. Summary of Significant Accounting Policies" of our Annual Report on Form 10-K for the year ended December 31, 2023. Segment and Geographic Information Our Chief Executive Officer, as the Chief Operating Decision Maker, organizes our company, manages resource allocations, and measures performance on the basis of one operating segment. Revenue outside of the U.S., based on the location of the customer, represented less than 1% of our unaudited consolidated revenue for the three and six months ended June 30, 2024 and 2023. Our property and equipment and right-of-use, or ROU, assets located outside of the U.S. were immaterial as of June 30, 2024 and December 31, 2023. Concentrations of Credit Risk We maintain accounts in U.S. and U.K. banks with funds insured by the Federal Deposit Insurance Corporation, or FDIC, and the Financial Services Compensation Scheme, or FSCS, respectively. Our bank accounts may, at times, exceed the FDIC and FSCS insured limits. Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents. Management believes that we are not exposed to any significant credit risk related to our cash or cash equivalents and have not experienced any losses in such accounts. Due to a large and diverse customer base, no individual customer represented more t han 10% of our total r evenue for the three and six months ended June 30, 2024 and 2023. At June 30, 2024 and December 31, 2023, there were no customers with an outstanding balance of 10% or more of our total accounts receivable balance. Accounts Receivable and Allowance for Credit Losses Our accounts receivable balances, which are not collateralized and do not bear interest, primarily consist of amounts receivable from our credit and debit card merchant processors, customer receivables, and fees due from third-parties for services purchased by our customers from such third-parties. We reduce our accounts receivable for sales allowances and a reserve for potentially uncollectible receivables. We determine the amount of the allowances based on various factors, including historical collection experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect our ability to collect from customers. Account balances are charged off against the allowance when we determine that it is not probable we will collect the receivable. At June 30, 2024 and December 31, 2023 the allowance for credit losses was not material. Investments in Other Equity Securities We hold an equity investment in LawPath, Pty Ltd, or LawPath, an Australian proprietary limited company that provides an online legal platform to individuals and small and medium sized businesses. At both June 30, 2024 and December 31, 2023, the carrying amount of our investment in LawPath was $4.4 million. The investment in LawPath does not have a readily determinable fair value. Revenue Recognition We derive our revenue from the following sources: Transaction revenue —Transaction revenue is primarily generated from our customized legal document services upon fulfillment of these services. Transaction revenue includes filing fees and is net of cancellations, promotional discounts, sales allowances and credit reserves. Tax preparation services are recognized at the point in time when the customer’s tax return is filed and accepted by the applicable government authority. We also earn fees from third-party providers from leads generated to such providers through our online legal platform. Subscription revenue —Subscription revenue is generated primarily from subscriptions to our registered agent, compliance packages, attorney advice, legal forms, tax and accounting, virtual mail and e-signature services, and software-as-a-service, or SaaS, accounting solution subscriptions and SaaS subscriptions in the U.K. We generally recognize revenue from our subscriptions ratably over the subscription term. Subscription terms generally range from thirty days to one year. Subscription revenue includes the transaction price allocated to bundled free trials for our subscription services and is net of promotional discounts, cancellations, sales allowances and credit reserves and payments to third-party service providers. For transaction and subscription revenue, we generally collect payments and fees at the time orders are placed and prior to services being rendered. We record amounts collected for services that have not been performed as deferred revenue on our consolidated balance sheet. The transaction price that we record is generally based on the contractual amounts and is reduced for estimated sales allowances for price concessions, charge-backs, sales credits and refunds, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Our transaction and subscription revenue is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Transaction $ 68,537 $ 65,863 $ 134,854 $ 133,890 Subscription 108,825 102,991 216,722 200,900 Total revenue $ 177,362 $ 168,854 $ 351,576 $ 334,790 Recently Adopted Accounting Pronouncements In September 2022, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations , which requires that a buyer in a supplier finance program disclose qualitative and quantitative information about its supplier finance programs. We adopted ASU 2022-04 effective January 1, 2023. The adoption of this accounting standard did not have a material impact on our consolidated financial statements. In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements, which amends certain provisions of ASC 842 related to the accounting for leasehold improvements in common-control arrangements. ASU 2023-01 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. We early adopted ASU 2023-01 effective January 1, 2023. The adoption of this accounting standard did not have a material impact on our consolidated financial statements. In March 2023, the FASB issued ASU 2023-02, Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. ASU 2023-02 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. We early adopted ASU 2023-02 effective January 1, 2023. The adoption of this accounting standard did not have a material impact on our consolidated financial statements. In July 2023, the FASB issued ASU 2023-03 to amend various paragraphs in the Accounting Standards Codification, or ASC, to align with the previously issued SEC guidance. ASU 2023-03 did not provide any new guidance, and there is no transition or effective date associated with it resulting in the ASU 2023-03 being effective upon issuance. Consequently, the adoption of this accounting standard did not have a material impact on our consolidated financial statements. In March 2024, the FASB issued ASU 2024-01, which clarifies how an entity determines whether a profits interest or similar award is a share-based payment arrangement that is within the scope of ASC 718, Compensation - Stock Compensation . This accounting standard is effective for fiscal years beginning after December 15, 2024, including interim periods within those years, and early adoption is permitted. ASU 2024-01 can be applied retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies this accounting standard. We early adopted ASU 2024-01 effective January 1, 2024 and will apply the amendments prospectively to profits interest and similar awards granted or modified on or after January 1, 2024. The adoption of this accounting standard did not have a material impact on our consolidated financial statements. In March 2024, the FASB issued ASU 2024-02, Codification Improvements to amend a variety of topics in the accounting codification by removing references to various FASB concepts statements. This accounting standard is effective for fiscal years beginning after December 15, 2024, and early adoption is permitted. ASU 2024-02 can be applied retrospectively to the beginning of the earliest comparative period presented in which the amendments were first applied or prospectively to all new transactions recognized on or after the date that the entity first applies the amendments. We early adopted ASU 2024-02 effective January 1, 2024 and will apply the amendments prospectively to all new transactions recognized on or after January 1, 2024. The adoption of this accounting standard did not have a material impact on our consolidated financial statements. Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Entities must adopt the changes to the segment reporting guidance on a retrospective basis, and early adoption is permitted. We are currently evaluating the impact of the adoption on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires entities to disclose more detailed information in the reconciliation of their statutory tax rate to their effective tax rate. This accounting standard is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. ASU 2023-09 will be applied prospectively with an option for retroactive application to each period in the financial statements, and early adoption is permitted. We are currently evaluating the impact of the adoption on our consolidated financial statements. |
Other Financial Statement Infor
Other Financial Statement Information | 6 Months Ended |
Jun. 30, 2024 | |
Other Financial Information [Abstract] | |
Other Financial Statement Information | Other Financial Statement Information Accounts Receivable Changes in the allowances consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Beginning balance $ 3,433 $ 4,870 $ 4,906 $ 4,730 Add: amounts recognized as a reduction of revenue 1,743 3,962 3,288 6,078 Add (less): allowance for credit losses recognized in general and administrative expense 136 425 (19) 489 Less: write-offs, net of recoveries (1,536) (3,523) (4,399) (5,563) Ending balance $ 3,776 $ 5,734 $ 3,776 $ 5,734 The allowance recognized as a reduction of revenue primarily relates to our installment plan receivables for which we expect we will not be entitled to a portion of the transaction price based on our historical experience with similar transactions. The allowance recognized against general and administrative expense represents an allowance relating to receivables from partners that are no longer considered collectible. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): June 30, 2024 December 31, 2023 Prepaid expenses $ 9,234 $ 10,423 Deferred cost of revenue 2,422 1,678 Capitalized cloud computing development costs 1,362 1,085 Income tax receivable 8,399 35 Other current assets 997 1,938 Total prepaid expenses and other current assets $ 22,414 $ 15,159 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, 2024 December 31, 2023 Accrued payroll and related expenses $ 26,815 $ 33,635 Accrued vendor payables 17,189 11,223 Sales allowances 3,124 3,412 Accrued sales, use and business taxes 5,436 9,795 Other 5,456 3,613 Total accrued expenses and other current liabilities $ 58,020 $ 61,678 Depreciation and Amortization Depreciation and amortization expense of our property and equipment, including capitalized internal-use software, and intangible assets consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Cost of revenue $ 4,618 $ 3,011 $ 9,085 $ 5,633 Sales and marketing 889 1,354 1,688 2,611 Technology and development 1,841 841 3,318 1,699 General and administrative 1,078 631 2,005 1,463 Total depreciation and amortization expense $ 8,426 $ 5,837 $ 16,096 $ 11,406 Deferred revenue Deferred revenue as of June 30, 2024 and December 31, 2023 was $189.6 million and $168.4 million, respectively. Revenue recognized in the three months ended June 30, 2024 and 2023 that was included in deferred revenue as of March 31, 2024 and 2023 was $88.4 million and $88.5 million, respectively. Revenue recognized in the six months ended June 30, 2024 and 2023 that was included in deferred revenue as of December 31, 2023 and 2022 was $131.7 million and $128.2 million, respectively. We have omitted disclosure on the transaction price allocated to remaining performance obligations and the estimated timing of revenue recognition as our contracts with customers that have a duration of more than one year are immaterial. |
Assets Held for Sale
Assets Held for Sale | 6 Months Ended |
Jun. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale | Assets Held for Sale During the quarter ended September 30, 2022, following an evaluation of our office space and business requirements, we commenced a plan to sell our operational headquarters in Austin, Texas, consisting of land, a building and building improvements, and determined that these assets met the held for sale criteria. We ceased recording depreciation on these assets upon meeting the held for sale criteria. At June 30, 2024, the total carrying value of the assets held for sale remains at $22.7 million as follows: June 30, 2024 Land $ 6,400 Building and building improvements 16,322 Total assets held for sale $ 22,722 |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt In 2021, we entered into an amended and restated credit and guaranty agreement, or 2021 Revolving Facility, providing for revolving borrowings of up to $150.0 million with an availability period of five years. Under the 2021 Revolving Facility, we can use up to $20.0 million in letters of credit and up to $10.0 million in borrowings on same-day notice, referred to as swingline loans. Additional debt issuance costs of $0.8 million were allocated to the 2021 Revolving Facility. In May 2023, we entered into an amendment to the 2021 Revolving Facility to replace the LIBOR interest rate benchmark with the Secured Overnight Financing Rate, or SOFR, benchmark, with a 0.10% credit spread adjustment to the SOFR benchmark, or Adjusted Term SOFR, for all available interest periods, provided that if the Adjusted Term SOFR is less than zero, the Adjusted Term SOFR shall be deemed to be zero. Other than the foregoing, the remaining terms of the 2021 Revolving Facility remained unchanged. The interest rate applicable to the 2021 Revolving Facility is subject to a 1.0% floor and is a rate equal to the greatest of (i) the administrative agent’s prime rate (ii) the federal funds effective rate plus 1/2 of 1.0% or (iii) Adjusted Term SOFR plus 1.0%. The interest rate margins under the 2021 Revolving Facility are subject to a reduction of 0.25% and a further reduction of 0.25% upon achieving total net first lien leverage ratios of 3.50 to 1.00 and 2.50 to 1.00, respectively. We are required to pay a commitment fee in respect of unutilized commitments under the 2021 Revolving Facility. The commitment fee is, initially, 0.35% per annum. The commitment fee is subject to a reduction of 0.10% if the total net first lien leverage ratio does not exceed 3.50 to 1.00. We are also required to pay customary letter of credit fees and agency fees. We have the option to voluntarily repay outstanding loans under the 2021 Revolving Facility at any time without premium or penalty, other than customary “breakage” costs with respect to SOFR loans. There is no scheduled amortization under the 2021 Revolving Facility. Any principal amount outstanding is due and payable in full at maturity, five years from the closing date of the 2021 Revolving Facility. Obligations under the 2021 Revolving Facility are guaranteed by our existing and future direct and indirect material wholly-owned domestic subsidiaries, subject to certain exceptions. The 2021 Revolving Facility is secured by a first-priority security interest in substantially all of our assets, subject to certain exceptions. The 2021 Revolving Facility contains a number of covenants that, among other things, subject to certain exceptions, restrict our ability and the ability of our restricted subsidiaries to incur additional indebtedness and guarantee indebtedness; create or incur liens; pay dividends and distributions or repurchase capital stock; merge, liquidate and make asset sales; change lines of business; change our fiscal year; incur restrictions on our subsidiaries’ ability to make distributions and create liens; modify our organizational documents; make investments, loans and advances; and enter into certain transactions with affiliates. The 2021 Revolving Facility requires compliance with a total net first lien leverage ratio of 4.50 to 1.00, or the Financial Covenant. The Financial Covenant will be tested at quarter-end only if the total principal amount of all revolving loans, swingline loans and drawn letters of credit that have not been reimbursed exceeds 35% of the total commitments under the 2021 Revolving Facility on the last day of such fiscal quarter. At June 30, 2024 and December 31, 2023, we had no amounts outstanding under our 2021 Revolving Facility or any outstanding letters of credit and we were in compliance with all financial covenants. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings From time to time, we may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. We are not currently a party to any material legal proceedings, nor are we aware of any pending or threatened litigation that could have a material adverse effect on our results of operations, cash flows, and financial condition, should such litigation be resolved unfavorably. Indemnifications Indemnification provisions in our third-party service provider agreements provide that we will indemnify, hold harmless, and reimburse the indemnified parties on a case-by-case basis for losses suffered or incurred by the indemnified parties in connection with any claim by any third-party as a result of our website, advertising, marketing, payment processing, collection or customer service activities. The maximum potential amount of future payments we could be required to make under these indemnification provisions is undeterminable. No amounts have been accrued or have been paid during any period presented as we believe the fair value of these indemnification obligations is immaterial. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Stock Repurchase Program In October 2023, our board of directors approved a stock repurchase program authorizing repurchases of up to $100.0 million of our common stock, with no fixed expiration. In May 2024, our board of directors approved a $75.0 million increase in the stock repurchase program, bringing the aggregate amount authorized to $175.0 million. Under this program, we are authorized to repurchase our common stock through any manner, including open market transactions, accelerated stock repurchase agreements, or privately negotiated transactions with third parties, and in such amounts as management deems appropriate. Open market repurchases may be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of our shares of common stock under this authorization. This program does not obligate us to acquire any particular amount of common stock and may be modified, suspended or terminated at any time at the discretion of our board of directors. Shares repurchased under our stock repurchase program are purchased for immediate retirement. During the three months ended June 30, 2024, using Rule 10b5-1 plans, we repurchased a total of 13.9 million shares of our common stock through open market purchases at an average per share price of $8.99 for a total repurchase of $125.2 million including broker commissions. During the six months ended June 30, 2024, using Rule 10b5-1 plans, we repurchased a total of 15.1 million shares of our common stock through open market purchases at an average per share price of $9.14 for a total repurchase of $138.0 million including broker commissions. The repurchases were recorded as a reduction to stockholders' equity . Approximately $37.0 million remained available for future repurchases under the stock repurchase program as of June 30, 2024. The Inflation Reduction Act of 2022, enacted in August 2022, imposed a 1% non-deductible excise tax on net repurchases of shares by domestic corporations whose stock is traded on an established securities market. Consequently, this excise tax is applicable to shares of stock repurchased pursuant to our stock repurchase program beginning in 2023 and represents a cost of the repurchases of our common stock. We have recognized a $1.1 million excise tax liability as of June 30, 2024 because the fair market value of stock repurchases exceeded the fair market value of stock issuances during the six months ended June 30, 2024. |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Stock-based Compensation Expense We recorded stock-based compensation expense in the following categories in the accompanying unaudited condensed consolidated statements of operations and balance sheets (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Cost of revenue $ 1,747 $ 1,105 $ 3,340 $ 1,979 Sales and marketing 1,906 1,447 3,485 2,979 Technology and development 6,525 4,875 12,228 9,195 General and administrative 8,737 11,529 14,718 21,270 Total stock-based compensation expense 18,915 18,956 33,771 35,423 Amount capitalized to internal-use software 1,627 1,075 3,044 1,986 Total stock-based compensation $ 20,542 $ 20,031 $ 36,815 $ 37,409 Restricted and Performance Stock Units During the six months ended June 30, 2024, we granted 5.5 million restricted stock units, or RSUs, with a total grant date fair value of $71.9 million to various employees. RSUs are measured based on the fair market value of the underlying stock on the date of grant and recognized as expense over the requisite service period. During the six months ended June 30, 2024 and in July 2024, we also granted 1.5 million and 0.8 million, respectively, RSUs with performance conditions, or PSUs, to members of our senior leadership team. Vesting of the PSUs is contingent upon the recipient’s continuous employment over the requisite service period and is subject to fulfillment by the Company of a predefined profitability target during the performance period. The number of PSUs subject to vesting is determined at the end of the performance period and may equal zero percent (0%) to two hundred percent (200%) of the target award. If the performance criteria are achieved, one third of the PSUs will vest on the date the compensation committee of the board of directors certifies achievement of the performance criteria, and the remaining awards will vest quarterly thereafter through February 2027. These PSU awards also include a modifier to the total number of shares earned based on the Company’s total shareholder return, or TSR, compared to the TSR of the Nasdaq Composite Index during the performance period. The total number of shares issued pursuant to the PSU award may be increased, decreased, or remain unchanged based on the TSR modifier. The TSR modifier applicable to the PSUs is considered a market condition and therefore is reflected in the respective grant-date fair values of the awards. A Monte Carlo simulation was used to account for this market condition in the grant-date fair value of the awards. Expense related to the PSUs is recognized over the employee’s requisite service period using graded vesting attribution method to the extent it is probable that the performance conditions will be achieved. We recognized $3.0 million and $3.5 million in stock-based compensation expense during three and six months ended June 30, 2024, respectively, related to these awards. The assumptions that were used to calculate the grant-date fair value of our PSU grants during the six months ended June 30, 2024 using a Monte Carlo simulation model were as follows: Six Months Ended June 30, 2024 Expected life (years) 0.8 Risk-free interest rate 5.2 % Expected volatility 47.4 % Expected dividend yield — In July 2024, we granted 2.7 million RSUs with a market vesting condition. Vesting of this award is contingent upon the recipient’s continuous employment over the requisite service period and is subject to achievement of predetermined stock price targets, which are measured based on a 45-trading day weighted-average closing price of our common stock during a five-year performance period, subject to a 44-day extension in certain circumstances. The number of RSUs subject to vesting during the performance period may equal zero percent (0%) to two hundred percent (200%) of the target award. Upon the achievement of a stock price target during the performance period, one-half of the eligible RSUs will vest on the date the compensation committee of the board of directors certifies achievement of the stock price target and the other half will vest one year from such date, subject to the recipient’s continued employment through the vesting date. In July 2024, we also granted 0.8 million RSUs to members of our senior leadership team. The RSUs will vest in two substantially equal annual installments in July 2025 and July 2026, subject to the recipient’s continued service through the applicable vesting date. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We recorded a provision for income taxes of $2.0 million and $5.3 million for the three and six months ended June 30, 2024, respectively. We recorded a provision for income taxes of $6.1 million and $10.0 million for the three and six months ended June 30, 2023, respectively. The effective tax rate for the three months ended June 30, 2024 and 2023 was 61% and 82%, respectively. The effective tax rate for the six months ended June 30, 2024 and 2023 was 47% and 111%, respectively. The difference from the federal statutory rate of 21% is primarily due to the recognition of significant non-deductible stock-based compensation and other discrete adjustments. Gross unrecognized tax benefits were $12.5 million and $11.5 million as of June 30, 2024 and December 31, 2023, respectively. The gross unrecognized tax benefits, if recognized by us, will result in a reduction of approximately $12.5 million, excluding interest and penalties, to the provision for income taxes, thereby favorably impacting our effective tax rate. Our policy is to recognize interest and penalties related to income tax matters in income tax expense. For the periods presented, interest and penalties related to income tax positions were not material to our unaudited condensed consolidated financial statements. We are subject to taxation and file income tax returns in the U.S. federal, state, and foreign jurisdictions. The federal income tax returns for the years 2018 and forward and state income tax returns for the tax years 2008 and forward remain open to examination. We are under examination in two states which are not expected to have an impact on our results of operations, cash flows and financial condition. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The following table shows the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Numerator: Net income (loss) $ 1,314 $ 1,395 $ 6,058 $ (963) Denominator: Weighted-average common stock used in computing net income (loss) per share — basic 184,257 191,342 186,438 191,318 Effect of potentially dilutive securities Options to purchase common stock 789 884 1,422 — RSUs 1,386 2,583 2,052 — Employee stock purchase plan 24 17 14 — Weighted-average common stock used in computing net income (loss) per share — diluted 186,456 194,826 189,926 191,318 Net income (loss) per share — basic $ 0.01 $ 0.01 $ 0.03 $ (0.01) Net income (loss) per share — diluted $ 0.01 $ 0.01 $ 0.03 $ (0.01) The following table presents the number of stock options, RSUs, and PSUs excluded from the calculation of diluted net income (loss) per share because they are anti-dilutive (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Options to purchase common stock 6,572 10,529 6,741 21,048 RSUs 9,948 4,660 7,585 15,363 Employee stock purchase plan 6 8 18 122 Total 16,526 15,197 14,344 36,533 |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring From time to time, we initiate cost reduction activities to integrate acquired businesses, to align our workforce with strategic business activities, or to improve efficiencies in our operations. During the three and six months ended June 30, 2023, we incurred $0.1 million and $0.7 million, respectively, in severance costs related to the reduction of our U.K. headcount, which was substantially complete by December 31, 2023. Restructuring expenses include severance for the impacted employees and are included in general and administrative expenses in the accompanying unaudited condensed consolidated financial statements. In August 2024, we committed to a restructuring plan resulting in a reduction of our global workforce. We expect to incur approximately $5.0 million in severance and other termination benefits in conjunction with the forgoing restructuring plan which is expected to be substantially complete by September 30, 2024. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received from selling an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: Level 1 — Quoted prices in active markets for identical assets and liabilities. Level 2 — Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. At June 30, 2024 and December 31, 2023, our financial assets recorded at fair value on a recurring basis consist of cash equivalents and available-for-sale debt securities. The cash equivalents consist of money market funds valued using quoted prices in active markets, which represents Level 1 inputs in the fair value hierarchy. The available-for-sale debt securities are valued using a Monte Carlo simulation, which include inputs that represent Level 3 inputs in the fair value hierarchy. The carrying amounts of accounts receivable, accounts payable and accrued expenses and other current liabilities approximate fair values because of the short-term nature of these items. The following tables summarize our assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy (in thousands): As of June 30, 2024 Level 1 Level 2 Level 3 Available-for-sale debt securities $ — $ — $ 1,374 Money market funds 107,753 — — Total assets $ 107,753 $ — $ 1,374 As of December 31, 2023 Level 1 Level 2 Level 3 Available-for-sale debt securities $ — $ — $ 1,159 Money market funds 208,970 — — Total assets $ 208,970 $ — $ 1,159 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023. The December 31, 2023 unaudited condensed consolidated balance sheet was derived from our audited consolidated financial statements as of that date. Our unaudited condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the unaudited condensed consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. There have been no significant changes in accounting policies during the six months ended June 30, 2024 from those disclosed in the audited consolidated financial statements for the year ended December 31, 2023 and the related notes, except as noted below under Recently Adopted Accounting Pronouncements . The operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results expected for the full year ending December 31, 2024. Beginning in the fourth quarter of 2023, we include partner revenue in transaction and subscription revenue to conform with how we evaluate our performance. This change had no impact on total revenue. Prior period disaggregated revenue disclosures have been conformed to the current period presentation. Certain other reclassifications have been made to prior periods amounts to conform to the current period presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, however not limited to, revenue recognition, sales allowances and expected credit loss allowances, available-for-sale debt securities, other equity securities, recoverability of long-lived assets and goodwill, income taxes, commitments and contingencies, valuation of assets and liabilities acquired in business combinations, valuation of assets in asset acquisitions, and fair value of stock-based compensation. Actual results could differ materially from those estimates. On an ongoing basis, we evaluate the estimates compared to historical experience and other factors including the current economic and regulatory environment, which form the basis for our judgments about the carrying value of assets and liabilities. |
Segment and Geographic Information | Segment and Geographic Information Our Chief Executive Officer, as the Chief Operating Decision Maker, organizes our company, manages resource allocations, and measures performance on the basis of one operating segment. |
Concentrations of Credit Risk | Concentrations of Credit Risk We maintain accounts in U.S. and U.K. banks with funds insured by the Federal Deposit Insurance Corporation, or FDIC, and the Financial Services Compensation Scheme, or FSCS, respectively. Our bank accounts may, at times, exceed the FDIC and FSCS insured limits. Financial instruments that potentially subject us to credit risk consist principally of cash and cash equivalents. Management believes that we are not exposed to any significant credit risk related to our cash or cash equivalents and have not experienced any losses in such accounts. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses |
Revenue Recognition | Revenue Recognition We derive our revenue from the following sources: Transaction revenue —Transaction revenue is primarily generated from our customized legal document services upon fulfillment of these services. Transaction revenue includes filing fees and is net of cancellations, promotional discounts, sales allowances and credit reserves. Tax preparation services are recognized at the point in time when the customer’s tax return is filed and accepted by the applicable government authority. We also earn fees from third-party providers from leads generated to such providers through our online legal platform. Subscription revenue —Subscription revenue is generated primarily from subscriptions to our registered agent, compliance packages, attorney advice, legal forms, tax and accounting, virtual mail and e-signature services, and software-as-a-service, or SaaS, accounting solution subscriptions and SaaS subscriptions in the U.K. We generally recognize revenue from our subscriptions ratably over the subscription term. Subscription terms generally range from thirty days to one year. Subscription revenue includes the transaction price allocated to bundled free trials for our subscription services and is net of promotional discounts, cancellations, sales allowances and credit reserves and payments to third-party service providers. For transaction and subscription revenue, we generally collect payments and fees at the time orders are placed and prior to services being rendered. We record amounts collected for services that have not been performed as deferred revenue on our consolidated balance sheet. The transaction price that we record is generally based on the contractual amounts and is reduced for estimated sales allowances for price concessions, charge-backs, sales credits and refunds, which are accounted for as variable consideration when estimating the amount of revenue to recognize. |
Recently Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In September 2022, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations , which requires that a buyer in a supplier finance program disclose qualitative and quantitative information about its supplier finance programs. We adopted ASU 2022-04 effective January 1, 2023. The adoption of this accounting standard did not have a material impact on our consolidated financial statements. In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842): Common Control Arrangements, which amends certain provisions of ASC 842 related to the accounting for leasehold improvements in common-control arrangements. ASU 2023-01 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. We early adopted ASU 2023-01 effective January 1, 2023. The adoption of this accounting standard did not have a material impact on our consolidated financial statements. In March 2023, the FASB issued ASU 2023-02, Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. ASU 2023-02 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. We early adopted ASU 2023-02 effective January 1, 2023. The adoption of this accounting standard did not have a material impact on our consolidated financial statements. In July 2023, the FASB issued ASU 2023-03 to amend various paragraphs in the Accounting Standards Codification, or ASC, to align with the previously issued SEC guidance. ASU 2023-03 did not provide any new guidance, and there is no transition or effective date associated with it resulting in the ASU 2023-03 being effective upon issuance. Consequently, the adoption of this accounting standard did not have a material impact on our consolidated financial statements. In March 2024, the FASB issued ASU 2024-01, which clarifies how an entity determines whether a profits interest or similar award is a share-based payment arrangement that is within the scope of ASC 718, Compensation - Stock Compensation . This accounting standard is effective for fiscal years beginning after December 15, 2024, including interim periods within those years, and early adoption is permitted. ASU 2024-01 can be applied retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies this accounting standard. We early adopted ASU 2024-01 effective January 1, 2024 and will apply the amendments prospectively to profits interest and similar awards granted or modified on or after January 1, 2024. The adoption of this accounting standard did not have a material impact on our consolidated financial statements. In March 2024, the FASB issued ASU 2024-02, Codification Improvements to amend a variety of topics in the accounting codification by removing references to various FASB concepts statements. This accounting standard is effective for fiscal years beginning after December 15, 2024, and early adoption is permitted. ASU 2024-02 can be applied retrospectively to the beginning of the earliest comparative period presented in which the amendments were first applied or prospectively to all new transactions recognized on or after the date that the entity first applies the amendments. We early adopted ASU 2024-02 effective January 1, 2024 and will apply the amendments prospectively to all new transactions recognized on or after January 1, 2024. The adoption of this accounting standard did not have a material impact on our consolidated financial statements. Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Entities must adopt the changes to the segment reporting guidance on a retrospective basis, and early adoption is permitted. We are currently evaluating the impact of the adoption on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires entities to disclose more detailed information in the reconciliation of their statutory tax rate to their effective tax rate. This accounting standard is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. ASU 2023-09 will be applied prospectively with an option for retroactive application to each period in the financial statements, and early adoption is permitted. We are currently evaluating the impact of the adoption on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Revenue Recognition | Our transaction and subscription revenue is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Transaction $ 68,537 $ 65,863 $ 134,854 $ 133,890 Subscription 108,825 102,991 216,722 200,900 Total revenue $ 177,362 $ 168,854 $ 351,576 $ 334,790 |
Other Financial Statement Inf_2
Other Financial Statement Information (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Other Financial Information [Abstract] | |
Schedule of Changes in the Allowance | Changes in the allowances consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Beginning balance $ 3,433 $ 4,870 $ 4,906 $ 4,730 Add: amounts recognized as a reduction of revenue 1,743 3,962 3,288 6,078 Add (less): allowance for credit losses recognized in general and administrative expense 136 425 (19) 489 Less: write-offs, net of recoveries (1,536) (3,523) (4,399) (5,563) Ending balance $ 3,776 $ 5,734 $ 3,776 $ 5,734 |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): June 30, 2024 December 31, 2023 Prepaid expenses $ 9,234 $ 10,423 Deferred cost of revenue 2,422 1,678 Capitalized cloud computing development costs 1,362 1,085 Income tax receivable 8,399 35 Other current assets 997 1,938 Total prepaid expenses and other current assets $ 22,414 $ 15,159 |
Schedule of Prepaid Expenses and Other Current Assets | Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, 2024 December 31, 2023 Accrued payroll and related expenses $ 26,815 $ 33,635 Accrued vendor payables 17,189 11,223 Sales allowances 3,124 3,412 Accrued sales, use and business taxes 5,436 9,795 Other 5,456 3,613 Total accrued expenses and other current liabilities $ 58,020 $ 61,678 |
Schedule of Depreciation and Amortization Expense | Depreciation and amortization expense of our property and equipment, including capitalized internal-use software, and intangible assets consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Cost of revenue $ 4,618 $ 3,011 $ 9,085 $ 5,633 Sales and marketing 889 1,354 1,688 2,611 Technology and development 1,841 841 3,318 1,699 General and administrative 1,078 631 2,005 1,463 Total depreciation and amortization expense $ 8,426 $ 5,837 $ 16,096 $ 11,406 |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disclosure of Long-Lived Assets Held-for-sale | At June 30, 2024, the total carrying value of the assets held for sale remains at $22.7 million as follows: June 30, 2024 Land $ 6,400 Building and building improvements 16,322 Total assets held for sale $ 22,722 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Based Compensation Cost | We recorded stock-based compensation expense in the following categories in the accompanying unaudited condensed consolidated statements of operations and balance sheets (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Cost of revenue $ 1,747 $ 1,105 $ 3,340 $ 1,979 Sales and marketing 1,906 1,447 3,485 2,979 Technology and development 6,525 4,875 12,228 9,195 General and administrative 8,737 11,529 14,718 21,270 Total stock-based compensation expense 18,915 18,956 33,771 35,423 Amount capitalized to internal-use software 1,627 1,075 3,044 1,986 Total stock-based compensation $ 20,542 $ 20,031 $ 36,815 $ 37,409 |
Schedule of Fair Value Assumptions and Techniques for Performance Shares | The assumptions that were used to calculate the grant-date fair value of our PSU grants during the six months ended June 30, 2024 using a Monte Carlo simulation model were as follows: Six Months Ended June 30, 2024 Expected life (years) 0.8 Risk-free interest rate 5.2 % Expected volatility 47.4 % Expected dividend yield — |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table shows the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Numerator: Net income (loss) $ 1,314 $ 1,395 $ 6,058 $ (963) Denominator: Weighted-average common stock used in computing net income (loss) per share — basic 184,257 191,342 186,438 191,318 Effect of potentially dilutive securities Options to purchase common stock 789 884 1,422 — RSUs 1,386 2,583 2,052 — Employee stock purchase plan 24 17 14 — Weighted-average common stock used in computing net income (loss) per share — diluted 186,456 194,826 189,926 191,318 Net income (loss) per share — basic $ 0.01 $ 0.01 $ 0.03 $ (0.01) Net income (loss) per share — diluted $ 0.01 $ 0.01 $ 0.03 $ (0.01) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the number of stock options, RSUs, and PSUs excluded from the calculation of diluted net income (loss) per share because they are anti-dilutive (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Options to purchase common stock 6,572 10,529 6,741 21,048 RSUs 9,948 4,660 7,585 15,363 Employee stock purchase plan 6 8 18 122 Total 16,526 15,197 14,344 36,533 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities that are Measured at Fair Value on a Recurring Basis | The following tables summarize our assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy (in thousands): As of June 30, 2024 Level 1 Level 2 Level 3 Available-for-sale debt securities $ — $ — $ 1,374 Money market funds 107,753 — — Total assets $ 107,753 $ — $ 1,374 As of December 31, 2023 Level 1 Level 2 Level 3 Available-for-sale debt securities $ — $ — $ 1,159 Money market funds 208,970 — — Total assets $ 208,970 $ — $ 1,159 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 USD ($) | Jun. 30, 2023 | Jun. 30, 2024 USD ($) segment | Jun. 30, 2023 | Dec. 31, 2023 USD ($) | |
Accounting Policies [Line Items] | |||||
Number of operating segments | segment | 1 | ||||
LawPath | |||||
Accounting Policies [Line Items] | |||||
Carrying amount of investment | $ | $ 4.4 | $ 4.4 | $ 4.4 | ||
Revenue Benchmark | Geographic Concentration Risk | Outside United States | |||||
Accounting Policies [Line Items] | |||||
Concentration risk percentage | 1% | 1% | 1% | 1% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 177,362 | $ 168,854 | $ 351,576 | $ 334,790 |
Transaction | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 68,537 | 65,863 | 134,854 | 133,890 |
Subscription | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 108,825 | $ 102,991 | $ 216,722 | $ 200,900 |
Other Financial Statement Inf_3
Other Financial Statement Information - Schedule of Changes in the Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | $ 3,433 | $ 4,870 | $ 4,906 | $ 4,730 |
Less: write-offs, net of recoveries | (1,536) | (3,523) | (4,399) | (5,563) |
Ending balance | 3,776 | 5,734 | 3,776 | 5,734 |
Revenue | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Add (less): amounts recognized | 1,743 | 3,962 | 3,288 | 6,078 |
Selling, General and Administrative Expenses | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Add (less): amounts recognized | $ 136 | $ 425 | $ (19) | $ 489 |
Other Financial Statement Inf_4
Other Financial Statement Information - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Other Financial Information [Abstract] | ||
Prepaid expenses | $ 9,234 | $ 10,423 |
Deferred cost of revenue | 2,422 | 1,678 |
Capitalized cloud computing development costs | 1,362 | 1,085 |
Income tax receivable | 8,399 | 35 |
Other current assets | 997 | 1,938 |
Total prepaid expenses and other current assets | $ 22,414 | $ 15,159 |
Other Financial Statement Inf_5
Other Financial Statement Information - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Other Financial Information [Abstract] | ||
Accrued payroll and related expenses | $ 26,815 | $ 33,635 |
Accrued vendor payables | 17,189 | 11,223 |
Sales allowances | 3,124 | 3,412 |
Accrued sales, use and business taxes | 5,436 | 9,795 |
Other | 5,456 | 3,613 |
Total accrued expenses and other current liabilities | $ 58,020 | $ 61,678 |
Other Financial Statement Inf_6
Other Financial Statement Information - Schedule of Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disclosure Details Of Depreciation And Amortization [Line Items] | ||||
Total depreciation and amortization expense | $ 8,426 | $ 5,837 | $ 16,096 | $ 11,406 |
Cost of revenue | ||||
Disclosure Details Of Depreciation And Amortization [Line Items] | ||||
Total depreciation and amortization expense | 4,618 | 3,011 | 9,085 | 5,633 |
Sales and marketing | ||||
Disclosure Details Of Depreciation And Amortization [Line Items] | ||||
Total depreciation and amortization expense | 889 | 1,354 | 1,688 | 2,611 |
Technology and development | ||||
Disclosure Details Of Depreciation And Amortization [Line Items] | ||||
Total depreciation and amortization expense | 1,841 | 841 | 3,318 | 1,699 |
General and administrative | ||||
Disclosure Details Of Depreciation And Amortization [Line Items] | ||||
Total depreciation and amortization expense | $ 1,078 | $ 631 | $ 2,005 | $ 1,463 |
Other Financial Statement Inf_7
Other Financial Statement Information - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Other Financial Information [Abstract] | |||||
Deferred revenue | $ 189.6 | $ 189.6 | $ 168.4 | ||
Deferred revenue recognized | $ 88.4 | $ 88.5 | $ 131.7 | $ 128.2 |
Assets Held for Sale (Details)
Assets Held for Sale (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total assets held for sale | $ 22,722 | $ 22,722 |
Disposal Group, Held-for-sale, Not Discontinued Operations | Austin, Texas Operational Headquarters | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total assets held for sale | 22,722 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | Austin, Texas Operational Headquarters | Land | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total assets held for sale | 6,400 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | Austin, Texas Operational Headquarters | Building and building improvements | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total assets held for sale | $ 16,322 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
May 31, 2023 | Dec. 31, 2021 | Jun. 30, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||||
Letters of credit outstanding | $ 0 | $ 0 | ||
2021 Revolving Facility | ||||
Debt Instrument [Line Items] | ||||
Total net first lien leverage ratio | 4.50 | |||
Percent of total commitments not reimbursed | 35% | |||
Line of credit outstanding | $ 0 | $ 0 | ||
2021 Revolving Facility | Federal Funds Effective Rate | ||||
Debt Instrument [Line Items] | ||||
Effective interest rate | 0.50% | |||
Revolving Credit Facility | 2021 Revolving Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit maximum borrowing capacity | $ 150,000,000 | |||
Maturity period | 5 years | |||
Debt issuance costs | $ 800,000 | |||
One month LIBOR floor | 1% | |||
Rate added to one month LIBOR | 1% | |||
Basis spread on variable rate, initial reduction | 0.25% | |||
Basis spread on variable rate, further reduction | 0.25% | |||
Total net first lien leverage ratio, first reduction requirement | 3.50 | |||
Total net first lien leverage ratio, second reduction requirement | 2.50 | |||
Commitment fee | 0.35% | |||
Commitment fee reduction | 0.10% | |||
Total net first lien leverage ratio, maximum | 3.50 | |||
Revolving Credit Facility | 2021 Revolving Facility | Secured Overnight Financing Rate (SOFR) | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 0.10% | |||
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Line of credit maximum borrowing capacity | $ 20,000,000 | |||
Swingline Loan | ||||
Debt Instrument [Line Items] | ||||
Line of credit maximum borrowing capacity | $ 10,000,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
May 31, 2024 | Jun. 30, 2024 | Jun. 30, 2024 | Oct. 31, 2023 | |
Equity [Abstract] | ||||
Stock repurchase program, amount authorized for repurchase | $ 175 | $ 100 | ||
Stock repurchase program, increase in amount authorized for repurchase | $ 75 | |||
Shares repurchased (in shares) | 13.9 | 15.1 | ||
Average price per share (in dollars per share) | $ 8.99 | $ 9.14 | ||
Shares repurchased, value | $ 125.2 | $ 138 | ||
Stock repurchase program, remaining amount available for future repurchase | 37 | 37 | ||
Excise tax liability | $ 1.1 | $ 1.1 |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Stock Based Compensation Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 18,915 | $ 18,956 | $ 33,771 | $ 35,423 |
Amount capitalized to internal-use software | 1,627 | 1,075 | 3,044 | 1,986 |
Total stock-based compensation | 20,542 | 20,031 | 36,815 | 37,409 |
Cost of revenue | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 1,747 | 1,105 | 3,340 | 1,979 |
Sales and marketing | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 1,906 | 1,447 | 3,485 | 2,979 |
Technology and development | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 6,525 | 4,875 | 12,228 | 9,195 |
General and administrative | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 8,737 | $ 11,529 | $ 14,718 | $ 21,270 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2024 annualInstallment shares | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) shares | Jun. 30, 2023 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ | $ 18,915 | $ 18,956 | $ 33,771 | $ 35,423 | |
RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units granted (in shares) | 5.5 | ||||
Units granted, fair value | $ | $ 71,900 | ||||
RSUs | Subsequent Event | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units granted (in shares) | 2.7 | ||||
Number of trading days measuring weighted-average closing price of common stock to determine vesting | 45 days | ||||
Performance period of weighted-average closing price of common stock to determine vesting | 5 years | ||||
Extension option for performance period | 44 days | ||||
RSUs | Subsequent Event | Share-Based Payment Arrangement, Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 50% | ||||
RSUs | Subsequent Event | Share-Based Payment Arrangement, Tranche Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | ||||
Vesting percentage | 50% | ||||
RSUs | Subsequent Event | Senior Leadership Team | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units granted (in shares) | 0.8 | ||||
Number of annual vesting installments | annualInstallment | 2 | ||||
RSUs | Subsequent Event | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of target awards determining vesting of units | 0% | ||||
RSUs | Subsequent Event | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of target awards determining vesting of units | 200% | ||||
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units granted (in shares) | 1.5 | ||||
Stock-based compensation expense | $ | $ 3,000 | $ 3,500 | |||
Performance Shares | Share-Based Payment Arrangement, Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.33% | ||||
Performance Shares | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of target awards determining vesting of units | 0% | ||||
Performance Shares | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of target awards determining vesting of units | 200% | ||||
Performance Shares | Subsequent Event | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units granted (in shares) | 0.8 |
Stock-based Compensation - Sc_2
Stock-based Compensation - Schedule of Fair Value Assumptions and Techniques for Performance Shares (Details) - Performance Shares | 6 Months Ended |
Jun. 30, 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life (years) | 9 months 18 days |
Risk-free interest rate | 5.20% |
Expected volatility | 47.40% |
Expected dividend yield | 0% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |||||
Provision for income taxes | $ 2,046 | $ 6,127 | $ 5,276 | $ 9,964 | |
Effective tax rate | 61% | 82% | 47% | 111% | |
Gross unrecognized tax benefits | $ 12,500 | $ 12,500 | $ 11,500 | ||
Unrecognized tax benefits that would impact effective tax rate | $ 12,500 | $ 12,500 |
Net Income (Loss) Per Share - E
Net Income (Loss) Per Share - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Numerator: | ||||||
Net income (loss) | $ 1,314 | $ 4,744 | $ 1,395 | $ (2,358) | $ 6,058 | $ (963) |
Denominator: | ||||||
Weighted-average common stock used in computing net income (loss) per share - basic (in shares) | 184,257 | 191,342 | 186,438 | 191,318 | ||
Weighted-average common stock used in computing net income (loss) per share - diluted (in shares) | 186,456 | 194,826 | 189,926 | 191,318 | ||
Net income (loss) per share - basic (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.03 | $ (0.01) | ||
Net income (loss) per share - diluted (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.03 | $ (0.01) | ||
Options to purchase common stock | ||||||
Denominator: | ||||||
Effect of potential dilutive securities (in shares) | 789 | 884 | 1,422 | 0 | ||
RSUs | ||||||
Denominator: | ||||||
Effect of potential dilutive securities (in shares) | 1,386 | 2,583 | 2,052 | 0 | ||
Employee stock purchase plan | ||||||
Denominator: | ||||||
Effect of potential dilutive securities (in shares) | 24 | 17 | 14 | 0 |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total amount of antidilutive securities excluded from computation of earnings per share (in shares) | 16,526 | 15,197 | 14,344 | 36,533 |
Options to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total amount of antidilutive securities excluded from computation of earnings per share (in shares) | 6,572 | 10,529 | 6,741 | 21,048 |
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total amount of antidilutive securities excluded from computation of earnings per share (in shares) | 9,948 | 4,660 | 7,585 | 15,363 |
Employee stock purchase plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total amount of antidilutive securities excluded from computation of earnings per share (in shares) | 6 | 8 | 18 | 122 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | Aug. 07, 2024 | |
Employee Severance | Subsequent Event | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs expected to be incurred | $ 5 | ||
UNITED KINGDOM | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance costs | $ 0.1 | $ 0.7 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | $ 0 | $ 0 |
Total assets | 107,753 | 208,970 |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 107,753 | 208,970 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 0 | 0 |
Total assets | 0 | 0 |
Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 1,374 | 1,159 |
Total assets | 1,374 | 1,159 |
Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 0 | $ 0 |