Five9 (FIVN) 10-Q 3 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 26, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	Five9, Inc.
Trading Symbol	FIVN
Entity Central Index Key	1,288,847
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		54,448,680

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 56,452	$ 58,122
Accounts receivable, net	15,453	13,881
Prepaid expenses and other current assets	5,117	3,008
Total current assets	77,022	75,011
Property and equipment, net	15,830	14,688
Intangible assets, net	1,422	1,539
Goodwill	11,798	11,798
Other assets	2,276	2,203
Total assets	108,348	105,239
Current liabilities:
Accounts payable	3,394	3,366
Accrued and other current liabilities	13,028	9,604
Accrued federal fees	3,018	2,742
Sales tax liability	1,138	1,347
Notes payable	643	742
Capital leases	6,009	6,230
Deferred revenue	10,920	10,047
Total current liabilities	38,150	34,078
Revolving line of credit	32,594	32,594
Sales tax liability — less current portion	1,399	1,476
Notes payable — less current portion	162	318
Capital leases — less current portion	6,468	5,915
Other long-term liabilities	590	530
Total liabilities	79,363	74,911
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000 shares authorized, no shares issued and outstanding at March 31, 2017 and December 31, 2016	0	0
Common stock, $0.001 par value; 450,000 shares authorized, 54,444 shares and 53,363 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively	54	53
Additional paid-in capital	200,637	196,555
Accumulated deficit	(171,706)	(166,280)
Total stockholders’ equity	28,985	30,328
Total liabilities and stockholders’ equity	$ 108,348	$ 105,239

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets - Parenthetical - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred Stock, par value (in USD per share)	$ 0.001	$ 0.001
Preferred Stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred Stock, shares issued (in shares)	0	0
Preferred Stock, shares outstanding (in shares)	0	0
Common Stock, par value (in USD per share)	$ 0.001	$ 0.001
Common Stock, shares authorized (in shares)	450,000,000	450,000,000
Common Stock, shares issued (in shares)	54,443,729	53,363,013
Common Stock, shares outstanding (in shares)	54,443,729	53,363,013

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
Revenue	$ 47,014	$ 38,015
Cost of revenue	19,971	16,610
Gross profit	27,043	21,405
Operating expenses:
Research and development	6,847	5,802
Sales and marketing	15,778	12,706
General and administrative	8,860	6,536
Total operating expenses	31,485	25,044
Loss from operations	(4,442)	(3,639)
Other income (expense), net:
Interest expense	(882)	(1,199)
Interest income and other	118	(45)
Total other income (expense), net	(764)	(1,244)
Loss before income taxes	(5,206)	(4,883)
Provision for income taxes	49	28
Net loss	$ (5,255)	$ (4,911)
Net loss per share:
Basic and diluted (in USD per share)	$ (0.10)	$ (0.10)
Shares used in computing net loss per share:
Basic and diluted (in shares)	53,688	51,377

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Operations and Comprehensive Loss - Parenthetical - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Comprehensive Loss:
Comprehensive loss	$ (5,255)	$ (4,911)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net loss	$ (5,255)	$ (4,911)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	2,095	2,103
Provision for doubtful accounts	24	25
Stock-based compensation	3,129	1,994
Loss on disposal of property and equipment	3	1
Non-cash adjustment on investment	(103)	0
Amortization of debt discount and issuance costs	20	91
Accretion of interest	5	0
Others	(11)	(4)
Changes in operating assets and liabilities:
Accounts receivable	(1,595)	(1,990)
Prepaid expenses and other current assets	(2,129)	(1,715)
Other assets	30	(30)
Accounts payable	(95)	825
Accrued and other current liabilities	3,119	1,935
Accrued federal fees and sales tax liability	(11)	93
Deferred revenue	909	1,659
Other liabilities	24	(24)
Net cash provided by operating activities	159	52
Cash flows from investing activities:
Purchases of property and equipment	(514)	(252)
Net cash used in investing activities	(514)	(252)
Cash flows from financing activities:
Proceeds from exercise of common stock options	793	2,397
Repayments of notes payable	(258)	(1,608)
Payments of capital leases	(1,850)	(1,306)
Net cash used in financing activities	(1,315)	(517)
Net decrease in cash and cash equivalents	(1,670)	(717)
Cash and cash equivalents:
Beginning of period	58,122	58,484
End of period	56,452	57,767
Non-cash investing and financing activities:
Equipment obtained under capital lease	2,603	1,307
Equipment purchased and unpaid at period-end	$ 159	$ 137

Description of Business and Sum

Description of Business and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business and Summary of Significant Accounting Policies	1. Description of Business and Summary of Significant Accounting Policies Five9, Inc. and its wholly-owned subsidiaries (the “Company”) is a provider of cloud software for contact centers. The Company was incorporated in Delaware in 2001 and is headquartered in San Ramon, California. The Company has offices in Europe and Asia, which primarily provide research, development, sales, marketing, and client support services. Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of condensed consolidated financial statements in accordance 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The significant estimates made by management affect revenue, the allowance for doubtful accounts, intangible assets, goodwill, loss contingencies, including the Company’s accrual for federal fees and sales tax liability, accrued liabilities, stock-based compensation, provision for income taxes and uncertain tax positions. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results could differ from those estimates. Significant Accounting Policies The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2016 . During the three months ended March 31, 2017 , there were no changes to the Company's significant accounting policies. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This ASU simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance is effective for the Company beginning in the first quarter of 2017, with early application permitted. Beginning in Q1 2017, the Company is accounting for forfeitures as they occur, rather than by estimating expected forfeitures. The net effect of this change was recognized as a $0.2 million reduction to accumulated deficit in the condensed consolidated financial statements. Upon adoption of the new standard, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards are treated as discrete items in the reporting period in which they occur. The Company also recognizes excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. The Company has applied the modified retrospective adoption approach beginning in Fiscal Year 2017 and prior periods have not been adjusted. As a result, the Company will establish a net operating loss deferred tax asset of $5.3 million to account for prior period excess tax benefits through retained earnings, however an offsetting valuation allowance of $5.3 million will also be established through retained earnings because it is not more likely than not that the deferred tax asset will be realized due to historical and expected future losses, such that there is no impact on the Company’s condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . The ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The ASU does not change the accounting for a customer’s accounting for service contracts. A company can elect to adopt the ASU either prospectively or retrospectively. The Company adopted this guidance prospectively beginning in the first quarter of 2016 and the adoption did not have a material effect on its condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . The ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this ASU. In August 2015, the FASB issued ASU No. 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements , which clarifies that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted this guidance retrospectively beginning in the first quarter of 2016 and the adoption did not have a material effect on its condensed consolidated financial statements for the prior periods or the current period reported. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . The new guidance requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. The standard is effective for the Company's annual period ended December 31, 2016 and interim and annual periods thereafter. Early adoption is permitted. The Company adopted this guidance prospectively beginning in the fourth quarter of 2016 and the adoption did not have a material effect on its consolidated financial statements. Recent Accounting Pronouncements Not Yet Effective In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for certain types of financial assets held. ASU 2016-13 is effective for the Company in its first quarter of 2020, and earlier adoption is permitted beginning in the first quarter of 2019. The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . Under the new guidance, a lessee will be required to recognize assets and liabilities for both finance, or capital, and operating leases with lease terms of more than 12 months. The ASU also will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. Lessor accounting will remain largely unchanged from current GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach that includes a number of optional practical expedients that entities may elect to apply. This guidance is effective for the Company beginning in the first quarter of 2019. Early adoption is permitted. The Company is currently assessing the effect the guidance will have on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016 and May 2016 within ASU 2015-04, ASU 2016-08, ASU 2016-10 and ASU 2016-12, respectively (ASU 2014-09, ASU 2015-04, ASU 2016-08, ASU 2016-10 and ASU 2016-12 collectively, Topic 606). Topic 606 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. Topic 606 is effective for the Company's annual and interim reporting periods beginning January 1, 2018 using either a retrospective or a cumulative effect transition method. The Company has developed an implementation plan to adopt this new guidance. As part of this plan, the Company is currently assessing the impact of the new guidance on its results of operations. Based on procedures performed to date, nothing has come to the Company's attention that would indicate that the adoption of Topic 606 will have a material impact on its financial statements, however, the Company will continue to evaluate this assessment in 2017. The Company intends to adopt Topic 606 on January 1, 2018. The Company has not yet selected a transition method, but expects to do so in the third quarter of 2017 upon completion of further analysis.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value Measurements	2 . Fair Value Measurements The Company carries cash equivalents consisting of money market funds at fair value on a recurring basis. Fair value is based on the price that would be received from selling an asset in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 — Observable inputs which include unadjusted quoted prices in active markets for identical assets. Level 2 — Observable inputs other than Level 1 inputs, such as quoted prices for similar assets, quoted prices for identical or similar assets in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset. Level 3 — Unobservable inputs that are supported by little or no market activity and that are based on management’s assumptions, including fair value measurements determined by using pricing models, discounted cash flow methodologies or similar techniques. The fair value of assets carried at fair value was determined using the following inputs (in thousands): March 31, 2017 Total Level 1 Level 3 Assets Cash equivalents Money market funds $ 20,081 $ 20,081 $ — Other Assets Embedded conversion option held for investment $ 903 $ — $ 903 December 31, 2016 Total Level 1 Level 3 Assets Cash equivalents Money market funds $ 20,069 $ 20,069 $ — Other Assets Embedded conversion option held for investment $ 873 $ — $ 873 Fair Value Measured and Recorded Using Significant Unobservable Inputs (Level 3) (in thousands): March 31, 2017 Beginning balance $ 873 Total gains (losses) included in earnings 30 Ending balance $ 903 The valuation of an embedded conversion option held for investment with a convertible note was performed using a Black-Scholes option-pricing model which relies primarily on estimates of expected term, volatility, risk-free rate, and dividends related to our investment in a privately-held company, or the investee. The most significant unobservable inputs used in the determination of estimated fair value of the option are the estimates of share price and volatility, driven by the investee's ability to meet financial targets, and which directly correlates to the fair value recognized in other non-current assets within the condensed consolidated balance sheets. The fair value of this asset is estimated quarterly by management based on inputs received from the investee's management using the excess earnings method under the income approach. Potential valuation adjustments are made as the progress toward achieving financial targets becomes determinable, with the impact of such adjustments being recorded to 'Interest income and other' in our condensed consolidated statements of operations and comprehensive loss. During the three months ended March 31, 2017 , there were no transfers in or out of Level 3 from other levels in the fair value hierarchy. There were no assets or liabilities measured at fair value on a non-recurring basis as of March 31, 2017 .

Financial Statement Components

Financial Statement Components	3 Months Ended
	Mar. 31, 2017
Financial Statement Components [Abstract]
Financial Statement Components	3 . Financial Statement Components Cash and cash equivalents consisted of the following (in thousands): March 31, December 31, Cash $ 36,371 $ 38,053 Money market funds 20,081 20,069 Cash and cash equivalents $ 56,452 $ 58,122 Accounts receivable, net consisted of the following (in thousands): March 31, December 31, Trade accounts receivable $ 14,268 $ 12,640 Unbilled trade accounts receivable, net of advance client deposits 1,209 1,253 Allowance for doubtful accounts (24 ) (12 ) Accounts receivable, net $ 15,453 $ 13,881 Prepaid expenses and other current assets consisted of the following (in thousands): March 31, December 31, Prepaid expenses $ 3,905 $ 2,199 Other current assets 1,212 809 Prepaid expenses and other current assets $ 5,117 $ 3,008 Property and equipment, net consisted of the following (in thousands): March 31, December 31, Computer and network equipment $ 39,746 $ 37,664 Computer software 5,954 5,133 Internal-use software development costs 500 475 Furniture and fixtures 1,201 1,130 Leasehold improvements 629 624 Property and equipment 48,030 45,026 Accumulated depreciation and amortization (32,200 ) (30,338 ) Property and equipment, net $ 15,830 $ 14,688 Depreciation and amortization expense associated with property and equipment was $2.0 million for each of the three months ended March 31, 2017 and 2016 . Property and equipment capitalized under capital lease obligations consist primarily of computer and network equipment and were as follows (in thousands): March 31, December 31, Gross $ 40,214 $ 35,504 Less: accumulated depreciation and amortization (26,521 ) (23,128 ) Total $ 13,693 $ 12,376 Accrued and other current liabilities consisted of the following (in thousands): March 31, December 31, Accrued compensation and benefits $ 8,840 $ 7,456 Accrued legal expenses (1) 1,995 193 Accrued expenses 2,193 1,955 Accrued and other current liabilities $ 13,028 $ 9,604 (1) The March 31, 2017 balance includes an accrual of the settlement amount, and the legal and indemnification fees related the Melcher litigation. See Part II, Item I “Legal Proceedings."

Intangible Assets

Intangible Assets	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	4 . Intangible Assets The components of intangible assets were as follows (in thousands): March 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 2,460 $ (1,214 ) $ 1,246 $ 2,460 $ (1,126 ) $ 1,334 Customer relationships 520 (359 ) 161 520 (333 ) 187 Domain names 50 (35 ) 15 50 (32 ) 18 Non-compete agreements 140 (140 ) — 140 (140 ) — Total $ 3,170 $ (1,748 ) $ 1,422 $ 3,170 $ (1,631 ) $ 1,539 Amortization expense related to intangible assets was $0.1 million for each of the three months ended March 31, 2017 and 2016 . As of March 31, 2017 , the expected future amortization expense for intangible assets was as follows (in thousands): Period Expected Future Amortization Expense Remainder of 2017 $ 349 2018 442 2019 351 2020 280 Total $ 1,422

Debt

Debt	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Debt	5 . Debt 2016 Loan and Security Agreement On August 1, 2016 , or the Effective Date, the Company entered into a loan and security agreement, or the 2016 Loan and Security Agreement , with the lenders party thereto and City National Bank, as agent for such lenders. The 2016 Loan and Security Agreement provides for a revolving line of credit, or the New Revolving Credit Facility , of up to $50.0 million and matures on August 1, 2019 . On the Effective Date, the Company borrowed $32.6 million under the 2016 Loan and Security Agreement. The proceeds were used to extinguish existing indebtedness under all prior Loan and Security Agreements and will be used for working capital and other general corporate purposes. Loans under the 2016 Loan and Security Agreement bear a variable annual interest rate of the prime rate plus 0.50% , subject to a 0.25% increase if our adjusted EBITDA is negative at the end of any fiscal quarter. The Company has agreed to pay a fee of 0.25% per annum on the unused portion of the revolving credit facility as well as an anniversary fee of $31,250 on each of the first and second anniversaries of the Effective Date. The Company is accreting the total estimation of unused fees and anniversary fees evenly over the full term of the 2016 Loan and Security Agreement. Under the terms of the 2016 Loan and Security Agreement , the outstanding balance cannot exceed the Company’s trailing four months of MRR (monthly recurring revenue including subscription and usage) multiplied by the average trailing 12 month dollar based retention rate (calculated on the same basis as in the Company’s periodic reports filed with the Securities and Exchange Commission). As of March 31, 2017 , the outstanding principal balance under the 2016 Loan and Security Agreement was $32.6 million , which is included in 'Revolving line of credit' in the condensed consolidated balance sheets. As of March 31, 2017 , the amount available for additional borrowings was $17.4 million . The Company incurred approximately $0.2 million in fees that were directly attributable to the issuance of this credit facility. These costs are deferred and included within 'Prepaid expenses and other current assets' and 'Other assets' in the Company's condensed consolidated balance sheets and being amortized to interest expense on a straight-line basis over three years starting from the Effective Date of the New Revolving Credit Facility . The obligations of the Company under the 2016 Loan and Security Agreement are guaranteed by the Company’s subsidiary, Five9 Acquisition. The Company’s obligations under the 2016 Loan and Security Agreement and Five9 Acquisition’s obligations under its guaranty are secured by a first priority perfected security interest in and lien on substantially all of the Company’s and Five9 Acquisition's assets. The 2016 Loan and Security Agreement contains certain customary covenants, including the requirement that the Company maintain $25.0 million of unrestricted cash deposited with the lenders for the term of the agreement, a minimum liquidity ratio of unrestricted cash and accounts receivable to the outstanding amounts under the 2016 Loan and Security Agreement , as well as customary events of default. Under the 2016 Loan and Security Agreement, the Company is also prohibited from declaring dividends or making other distributions on capital stock. The Company was in compliance with these covenants as of March 31, 2017 . The Company recorded a $1.0 million loss on extinguishment of debt in the third quarter of 2016 under the 2013 Loan and Security Agreement and the 2014 Loan and Security Agreement. The loss was comprised of $0.4 million in prepayment penalties , a $0.4 million write-off of unamortized debt discounts , and a $0.2 million write-off of unamortized debt issuance costs . 2013 Loan and Security Agreement Prior to entering into the 2016 Loan and Security Agreement on August 1, 2016 , the Company had a revolving line of credit of up to $20.0 million , or Prior Revolving Credit Facility, under a loan and security agreement with a lender, which was entered into in March 2013 and last amended in December 2014, or 2013 Loan and Security Agreement. The Prior Revolving Credit Facility carried a variable annual interest rate of the prime rate plus 0.50% and would have matured on December 1, 2016 . The 2013 Loan and Security Agreement was collateralized by substantially all the assets of the Company. The balance outstanding could not exceed the lesser of (i) $20.0 million or (ii) an amount equal to the Company’s monthly recurring revenue for the three months prior multiplied by the average Dollar-Based Retention Rate over the prior twelve months, less the amount accrued for the Company’s Universal Service Fund (“USF”) obligation (accrued federal fees). As of August 1, 2016 , the Company had canceled and paid back all amounts due under the Prior Revolving Credit Facility. In connection with its acquisition of SoCoCare in October 2013, the Company also borrowed $5.0 million under a term loan, or the Term Loan, under the 2013 Loan and Security Agreement in October 2013. Monthly interest-only payments were due on the advance at the prime rate plus 1.50% through September 2014. Principal and interest payments were due in equal monthly installments from October 2014 through the maturity of the Term Loan in March 2017. As of August 1, 2016 , the Company had canceled and paid back all amounts due under the Term Loan. The 2013 Loan and Security Agreement contained certain covenants, including the requirement that the Company maintain $7.5 million of cash deposited with the lender for the term of the 2013 Loan and Security Agreement. The Company was in compliance with these covenants through the cancellation date of August 1, 2016 . The 2013 Loan and Security Agreement remained senior to other debt, including the debt issued under the 2014 Loan and Security Agreement discussed below. 2014 Loan and Security Agreement Prior to entering into the 2016 Loan and Security Agreement on August 1, 2016 , the Company had a term loan facility of $30.0 million with a syndicate of two lenders, or Lenders, which was entered into in February 2014 and amended in December 2014 and February 2015, or the 2014 Loan and Security Agreement. The term loan facility was available to the Company in tranches. The first tranche for $20.0 million was advanced upon entering into the agreement. The remaining $10.0 million was available for drawdown by the Company until February 20, 2016 in $1.0 million increments, which expired on February 20, 2016. The Company incurred $0.4 million in debt costs in connection with borrowing the first tranche in February 2014. The term loan bore interest at a variable per annum rate equal to the greater of 10% or LIBOR plus 9% . Interest was due and payable on the last business day of each month during the term of the loan commencing in February 2014. Monthly principal payments were due beginning in February 2016 based on 1/60th of the outstanding balance at that time and would continue until all remaining principal outstanding under the term loan became due and payable in February 2019. As of August 1, 2016 , the Company had canceled and paid back all borrowings under the 2014 Loan and Security Agreement. The term loan was secured by substantially all the assets of the Company and was subordinate to the 2013 Loan and Security Agreement. The 2014 Loan and Security Agreement contained certain covenants and included the occurrence of a material adverse event, as defined in the agreement and determined by the Lenders, as an event of default. The Company was in compliance with these covenants through the effective cancellation date of August 1, 2016 . In connection with entering into the 2014 Loan and Security Agreement, the Company issued to the Lenders warrants to purchase 177,865 shares of common stock at $10.12 per share, which vest and become exercisable over a ten year term from the date of issuance, based on amounts drawn under the $30.0 million term loan facility. Based on the drawdown of $20.0 million in February 2014, 118,577 shares of common stock issuable under the warrants vested and are exercisable by the Lenders. The fair value of these vested warrants of $1.0 million was recorded as a discount against the debt proceeds and was being recognized as additional interest expense over the term of the loan. The remaining 59,288 shares of common stock issuable under the warrants pertaining to the undrawn $10.0 million did not vest and were no longer exercisable on February 20, 2016 when the $10.0 million was no longer available for borrowing. Promissory Note In July 2013, the Company issued a promissory note to the Universal Service Administrative Company, or USAC, for $4.1 million in principal amount as a financing arrangement for that amount of accrued federal fees. The promissory note carried a fixed annual interest rate of 12.75% and was repayable in 42 equal monthly installments of principal and interest beginning in August 2013. As of December 31, 2016 , approximately $0.1 million of this promissory note was outstanding and is included as notes payable in the accompanying condensed consolidated balance sheets. As of March 31, 2017 , the promissory note was fully paid. FCC Civil Penalty In June 2015, the Company entered into a consent decree with the Federal Communications Commission or FCC, Enforcement Bureau (Note 9 ), in which the Company agreed to pay a civil penalty of $2.0 million to the U.S. Treasury in twelve equal quarterly installments starting in July 2015 without interest. As a result, the Company discounted the $2.0 million liability, which was accrued in the third quarter of 2014 for the then tentative civil penalty, to its present value of $1.7 million at an annual interest rate of 12.75% to reflect the imputed interest and reclassified this discounted liability from 'Accrued federal fees' to 'Notes payable.' The $0.3 million discount was recorded as a reduction to general and administrative expense in the three months ended June 30, 2015 and is being recognized as interest expense over the payment term of the civil penalty. As of March 31, 2017 and December 31, 2016 , the outstanding civil penalty payable was $0.8 million and $1.0 million , respectively, of which the net carrying value was $0.8 million and $0.9 million , respectively, and is included as 'Notes payable' in the accompanying condensed consolidated balance sheets. As of March 31, 2017 and December 31, 2016 , the Company’s outstanding debt is summarized as follows (in thousands): March 31, 2017 December 31, 2016 Promissory note to USAC — 120 FCC civil penalty 833 1,000 Total notes payable, gross 833 1,120 Less: discount (54 ) (79 ) Total notes payable, net carrying value 779 1,041 Revolving line of credit 32,594 32,594 Interest accretion under 2016 line of credit $ 26 $ 19 Total debt, net carrying value $ 33,399 $ 33,654 Less: current portion of debt * (643 ) (742 ) Total debt, less current portion ** 32,756 32,912 * Included in ‘Notes payable’ in the condensed consolidated balance sheets. ** Included in ‘Notes payable - less current portion’ and 'Revolving line of credit — less current portion' in the condensed consolidated balance sheets. Maturities of the Company’s outstanding debt as of March 31, 2017 are as follows (in thousands): Period Amount to Mature 2017 500 2018 333 2019 32,594 Total $ 33,427

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Stockholders' Equity	6 . Stockholders’ Equity Capital Structure The Company is authorized to issue 450,000,000 shares of common stock with a par value of $0.001 per share. As of March 31, 2017 and December 31, 2016 , the Company had 54,443,729 shares and 53,363,013 shares of common stock issued and outstanding, respectively. The Company is also authorized to designate and issue up to 5,000,000 shares of preferred stock with a par value of $0.001 per share in one or more series without stockholder approval and to fix the rights, preferences, privileges and restrictions thereof. As of March 31, 2017 and December 31, 2016 , the Company had no shares of preferred stock issued and outstanding. Warrants As of March 31, 2017 and December 31, 2016 , the Company had outstanding warrants to purchase 13,017 and 131,597 shares of common stock, respectively, with a weighted-average exercise price of $6.93 per share and $9.80 per share, respectively. Most of these warrants expire on October 18, 2023 . Common Stock Reserved for Future Issuance Shares of common stock reserved for future issuance related to outstanding equity awards, common stock warrants, and employee equity incentive plans were as follows (in thousands): March 31, 2017 Stock options outstanding 5,127 Restricted stock units outstanding 2,607 Shares available for future grant under 2014 Plan 7,569 Shares available for future issuance under ESPP 1,636 Common stock warrants outstanding 13 Total shares of common stock reserved 16,952 Equity Incentive Plans Prior to its initial public offering (“IPO”), the Company granted stock options under its Amended and Restated 2004 Equity Incentive Plan, as amended (the “2004 Plan”). In March 2014, the Company’s board of directors and stockholders approved the 2014 Equity Incentive Plan (“2014 Plan”) and 5,300,000 shares of common stock were reserved for issuance under the 2014 Plan. In addition, on the first day of each year beginning in 2015 and ending in 2024, the 2014 Plan provides for an annual automatic increase to the shares reserved for issuance in an amount equal to 5% of the total number of shares outstanding on December 31st of the preceding calendar year or a lesser number as determined by the Company’s board of directors. Pursuant to the automatic annual increase, 2,668,150 and 2,558,231 additional shares were reserved under the 2014 Plan on January 1, 2017 and 2016 , respectively. No further grants were made under the 2004 Plan once the 2014 Plan became effective on April 3, 2014. Upon the effectiveness of the 2014 Plan, all shares reserved for future issuance under the 2004 Plan became available for issuance under the 2014 Plan. After the IPO, any forfeited or expired shares that would have otherwise returned to the 2004 Plan instead return to the 2014 Plan. As of March 31, 2017 , 7,568,651 shares of common stock were available for future grant under the 2014 Plan. The 2004 Plan and the 2014 Plan are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . Stock Options A summary of the Company’s stock option activity during the three months ended March 31, 2017 is as follows (in thousands, except years and per share data): Number of Weighted Weighted Aggregate Outstanding as of December 31, 2016 5,556 $ 5.23 Options granted (weighted average grant date fair value of $7.86 per share) 449 16.21 Options exercised (858 ) 0.92 Options forfeited or expired (20 ) 12.23 Outstanding as of March 31, 2017 5,127 $ 6.88 6.7 $ 49,171 The Company has computed the aggregate intrinsic value amounts disclosed in the above table based on the difference between the exercise price of the options and the closing market price of the Company’s common stock of $16.46 per share as of March 31, 2017 for all in-the-money options outstanding. Restricted Stock Units A summary of the Company's restricted stock unit, or RSU, activity during the three months ended March 31, 2017 is as follows (in thousands, except per share data): Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of December 31, 2016 2,019 $ 7.65 RSUs granted 792 16.26 RSUs vested and released (177 ) 6.71 RSUs forfeited (27 ) 7.67 Outstanding as of March 31, 2017 2,607 $ 10.30 Employee Stock Purchase Plan The Company's 2014 Employee Stock Purchase Plan, or ESPP, became effective on April 3, 2014 and is described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The number of shares of common stock originally reserved for issuance under the ESPP was 880,000 shares, which will increase automatically each year, beginning on January 1, 2015 and continuing through January 1, 2024, by the lesser of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year; (ii) 1,000,000 shares of common stock (subject to adjustment to reflect any split or combination of the Company’s common stock); or (iii) such lesser number as determined by the Company’s board of directors. Pursuant to the automatic annual increase, 533,630 and 511,646 additional shares were reserved under the ESPP on January 1, 2017 and 2016 , respectively. As of March 31, 2017 , 1,635,854 shares of common stock were available for future grants under the ESPP. During the three months ended March 31, 2017 , no shares were purchased under the ESPP. Stock-Based Compensation Stock-based compensation expenses for the three months ended March 31, 2017 and 2016 were as follows (in thousands): Three Months Ended March 31, 2017 March 31, 2016 Cost of revenue $ 434 $ 265 Research and development 637 435 Sales and marketing 928 434 General and administrative 1,130 860 Total stock-based compensation $ 3,129 $ 1,994 As of March 31, 2017 , unrecognized stock-based compensation expenses by award type and their expected weighted-average recognition periods are summarized in the following table (in thousands, except years). Stock Option RSU ESPP Unrecognized stock-based compensation expense $ 8,426 $ 24,752 $ 132 Weighted-average amortization period 2.9 years 3.3 years 0.1 years The Company recognizes stock-based compensation expense that is calculated based upon awards that have vested, reduced for actual forfeitures. All stock-based compensation for equity awards granted to employees and non-employee directors is measured based on the grant date fair value of the award. The Company values RSUs at the closing market price of its common stock on the date of grant. The Company estimates the fair value of each stock option and purchase rights under the ESPP granted to employees on the date of grant using the Black-Scholes option-pricing model and using the assumptions noted in the below table. The weighted-average assumptions used to value stock options granted during the three months ended March 31, 2017 and 2016 were as follows: Stock Options Three Months Ended March 31, 2017 March 31, 2016 Expected term (years) 6.0 6.0 Volatility 49% 48% Risk-free interest rate 2.0% 1.5% Dividend yield — —

Net Loss Per Share

Net Loss Per Share	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Net Loss Per Share	7 . Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding during the period, and excludes any dilutive effects of employee stock-based awards and warrants. Diluted net income per share is computed giving effect to all potentially dilutive common shares, including common stock issuable upon exercise of stock options and warrants and vesting of restricted stock. As the Company had net losses for the three months ended March 31, 2017 and 2016 , all potentially issuable common shares were determined to be anti-dilutive. The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data). Three Months Ended March 31, 2017 March 31, 2016 Net loss $ (5,255 ) $ (4,911 ) Weighted-average shares used in computing basic and diluted net loss per share 53,688 51,377 Basic and diluted net loss per share $ (0.10 ) $ (0.10 ) The following securities were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented (in thousands). March 31, 2017 March 31, 2016 Stock options 5,127 5,980 Restricted stock units 2,607 2,459 ESPP — 162 Common stock warrants 13 132 Total 7,747 8,733

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Income Taxes	8 . Income Taxes The provision for income taxes for the three months ended March 31, 2017 and 2016 was approximately $49 thousand and $28 thousand , respectively. The provision for income taxes consisted primarily of foreign income taxes. For the three months ended March 31, 2017 and 2016 , the provision for income taxes differed from the statutory amount primarily due to the Company realizing no benefit for current year losses due to maintaining a full valuation allowance against its domestic net deferred tax assets. The realization of tax benefits of deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available objective evidence, the Company does not believe it is more likely than not that the net deferred tax assets will be realizable. Accordingly, the Company has provided a full valuation allowance against the domestic net deferred tax assets as of March 31, 2017 and December 31, 2016 . The Company intends to maintain the remaining valuation allowance until sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance. During the three months ended March 31, 2017 , there were no material changes to the total amount of unrecognized tax benefits.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	9 . Commitments and Contingencies Commitments The Company’s principal commitments consist of future payment obligations under capital leases to finance data centers and other computer and networking equipment purchases, operating lease agreements for office space, research and development, and sales and marketing facilities, and agreements with third parties to provide co-location hosting, telecommunication usage and equipment maintenance services. These commitments as of December 31, 2016 are disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 , and did not change materially during the three months ended March 31, 2017 except for the acquisition of certain additional data center and network equipment and software under multiple capital leases, and certain hosting and telecommunications agreements. As of March 31, 2017 , the total minimum future payment commitments under these capital leases added during the three months ended March 31, 2017 were approximately $2.6 million , of which $0.6 million is due in 2017, with the remainder of $2.0 million due over approximately 28 months . The Company entered into various hosting and telecommunications agreements for terms of 24 months to 36 months commencing on various dates in the first and second quarters of 2017. These agreements require the Company to make monthly payments over the service term in exchange for certain network services. The Company's total minimum future payment commitments under these agreements are $1.0 million . Universal Services Fund Liability During the third quarter of 2012, the Company determined that based on its business activities, it is classified as a telecommunications service provider for regulatory purposes and it should make direct contributions to the federal USF and related funds based on revenues it receives from the resale of interstate and international telecommunications services. In order to comply with the obligation to make direct contributions, the Company made a voluntary self-disclosure to the FCC Enforcement Bureau and registered with the USAC, which is charged by the FCC with administering the USF. The Company filed exemption certificates with its wholesale telecommunications service providers in order to eliminate its obligation to reimburse such wholesale telecommunications service providers for their USF contributions calculated on services sold to the Company. In April 2013, the Company began remitting required contributions on a prospective basis directly to USAC. The Company’s registration with USAC subjects it to assessments for unpaid USF contributions, as well as interest thereon and civil penalties, due to its late registration and past failure to recognize its obligation as a USF contributor and as an international carrier. The Company will be required to pay assessments for periods prior to the Company’s registration. As of December 31, 2012, the total past due USF contribution being imposed by USAC and accrued by the Company for the period from 2003 through 2012 was $8.1 million , of which $4.7 million was undisputed and $3.4 million , including $0.8 million that pertains to 2003 through 2007, was disputed. The Company has submitted two separate Requests for Review (a form of appeal) to the FCC's Wireline Bureau challenging the application of FCC rules to the assessments of USF fees for 2003 to 2007, and from 2008 to 2012. In January 2017, the FCC Wireline Bureau ruled in favor of the Company regarding the principal for the 2008 to 2012 assessments, but not the related interest or penalties, resulting in a reversal of $3.1 million to cost of revenue. The Company has filed a third Request for Review disputing the interest and penalties on the back assessments for the period of 2008 through 2012. The FCC has not yet resolved the Company’s Requests for Review challenging assessments for 2003 to 2007 or its Request for Review on the interest and penalties. If the pending disputes are not resolved in the Company’s favor, it is still possible that the Company will be required to pay back assessments for one or both of those periods. In July 2013, the Company and USAC agreed to a financing arrangement for $4.1 million of the undisputed $4.7 million of the unpaid USF contributions whereby the Company issued to USAC a promissory note payable in the principal amount of the $4.1 million and paid off the remaining undisputed $0.6 million . The repayment terms of the promissory note payable are disclosed in Note 5 . As of December 31, 2016 , approximately $0.1 million of this promissory note was outstanding and is included as notes payable in the accompanying condensed consolidated balance sheets. As of March 31, 2017 , the promissory note was fully paid. In addition to the promissory note payable, as of March 31, 2017 and December 31, 2016 , the Company had an accrued liability for the disputed portion of the unpaid USF contributions and estimated interest and penalties of $2.7 million and $2.5 million , respectively, included in accrued federal fees on the condensed consolidated balance sheets. For each of the three months ended March 31, 2017 and 2016 , the Company recorded interest and penalty expenses of $0.1 million as a charge to general and administrative expense, which were related to its disputed unpaid USF obligations. On June 12, 2015, in connection with the Company’s disclosure to the FCC, the Company entered into a consent decree with the FCC Enforcement Bureau. In the consent decree, the Company agreed to pay a civil penalty of $2.0 million to the U.S. Treasury in twelve equal quarterly installments starting in July 2015 without interest (Note 5 ). In the third quarter of 2014, the Company accrued a $2.0 million liability for the then tentative civil penalty. The consent decree also requires the Company to adopt certain internal regulatory compliance monitoring and training requirements, and to report on the status of those compliance efforts to the FCC’s Enforcement Bureau for three years. The Company’s implementation of the internal regulatory compliance monitoring and training requirements were completed in August 2015, and its annual compliance reporting to the FCC will continue until June 2018. State and Local Taxes and Surcharges In April 2012, the Company commenced collecting and remitting sales taxes on sales of subscription services in all the U.S. states in which it determined it was obligated to do so. During the first quarter of 2015, the Company conducted an updated sales tax review of the taxability of sales of its subscription services. As a result, the Company determined that it may be obligated to collect and remit sales taxes on such sales in four additional states. Based on its best estimate of the probable sales tax liability in those four states relating to its sales of subscription services during the period 2011 through 2014, during the three months ended March 31, 2015, the Company recorded a general and administrative expense of $0.6 million as an immaterial out of period adjustment to accrue for such taxes. During 2013, the Company analyzed its activities and determined it may be obligated to collect and remit various state and local taxes and surcharges on its usage-based fees. The Company had not remitted state and local taxes on usage-based fees in any of the periods prior to 2014 and therefore accrued a sales tax liability for this contingency. In January 2014, the Company commenced paying such taxes and surcharges to certain state authorities. In June 2014, the Company commenced collecting state and local taxes or surcharges on usage-based fees from its clients on a current basis and remitting such taxes to the applicable U.S. state taxing authorities. During the three months ended March 31, 2017, the Company made no payments for its contingent sales taxes on either usage-based fees or sales of subscription services. During the three months ended March 31, 2016, the Company remitted $0.2 million for its contingent sales taxes on both usage-based fees and sales of subscription services. For the three months ended March 31, 2017, the Company recognized a $0.1 million gain as an offset to general and administrative expense related to its estimated sales tax liability on both usage-based fees and sales of subscription services in the U.S. and Canada. For the three months ended March 31, 2016, the Company recognized $6 thousand as general and administrative expense related to its estimated sales tax liability on both usage-based fees and sales of subscription services in the U.S. and Canada, which was not being collected from its clients. As of March 31, 2017 and December 31, 2016 , the Company had total accrued liabilities of $1.9 million and $2.1 million , respectively, for such contingent sales taxes and surcharges that were not being collected from its clients but may be imposed by various taxing authorities, of which $0.5 million and $0.6 million were included in current “Sales tax liability” on the condensed consolidated balance sheets, respectively, and the remaining were included in non-current “Sales tax liability” on the condensed consolidated balance sheets. The Company’s estimate of the probable loss incurred under this contingency is based on its analysis of the source location of its usage-based fees and the regulations and rules in each tax jurisdiction. Legal Matters The Company is involved in various legal and regulatory matters arising in the normal course of business. In management’s opinion, resolution of these matters is not expected to have a material impact on the Company’s consolidated results of operations, cash flows, or its financial position. However, due to the uncertain nature of legal matters, an unfavorable resolution of a matter could materially affect the Company’s future consolidated results of operations, cash flows or financial position in a particular period. The Company expenses legal fees as incurred. The Company is currently involved in the following lawsuits as a defendant. Melcher Litigation On September 28, 2016, a complaint was filed in the United States District Court for the Southern District of California against Five9, Inc., or Five9, as the successor in interest to Face It, Corp., or Face It, and Lance Fried, a former Five9 employee who was the former Chief Executive Officer of Face It. The action, captioned Melcher, et al. v. Five9, Inc., et al., No. 16-cv-02440, or the Federal Lawsuit, was filed as a direct action by Carl Melcher, or Melcher, a purported former stockholder of Face It, and his related investment entity Melcher Family Limited Partnership, or MFLP. In the complaint, the plaintiffs allege that Face It repurchased the plaintiffs’ stock in September 2013 before Five9 acquired Face It, and that in connection with the repurchase, Fried made material misstatements or omissions to Melcher, by failing to disclose that Face It allegedly was in concurrent discussions about a potential sale of the company to Five9. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, as well as various claims under state law and common law. The complaint seeks to set aside Face It’s September 2013 stock repurchase from the plaintiffs, as well as an unspecified amount of damages and an award of attorney’s fees and costs, in addition to other relief. On November 8, 2016, the court entered an order staying the Federal Lawsuit and ordered the parties to proceed to arbitration of the dispute before the American Arbitration Association, or AAA. On November 16, 2016, Melcher and MFLP submitted a Demand for Arbitration to AAA against Five9, asserting claims identical to those alleged in the Federal Lawsuit. On March 31, 2017, Five9 reached a settlement with the plaintiffs that fully resolves the plaintiffs’ claims against Five9 and provides for mutual releases between the parties in exchange for a one-time payment by Five9 to the plaintiffs of $1.7 million . The settlement amount is included in 'accrued and other current liabilities' in the condensed consolidated balance sheets and 'general and administrative' expense in the statements of operations and comprehensive loss. Five9 believes that it has indemnification rights against the former stockholders of Face It for losses it incurred in connection with the defense and resolution of this matter. NobelBiz Litigation On August 5, 2011, NobelBiz sent a letter to the Company asserting infringement of a patent related to virtual call centers. On April 3, 2012, NobelBiz filed a patent infringement lawsuit against the Company in the United States District Court for the Eastern District of Texas. The patent asserted in the complaint is different, but related, to the patent asserted in the original letter. The lawsuit, NobelBiz Inc. v. Five9, Inc., Case No. 6:12-cv-00243-LED, alleges that the Company’s local caller ID management service infringes United States Patent No. 8,135,122, or the ‘122 patent. The ‘122 patent, titled “System and Method for Modifying Communication Information (MCI),” issued on March 13, 2012, and according to the complaint is alleged to relate to “a system for processing a telephone call from a call originator (also referred to as a calling party) to a call target (also referred to as a receiving party), where the system accesses a database storing outgoing telephone numbers, selects a replacement telephone number from the outgoing telephone numbers based on the telephone number of the call target, and originates an outbound call to the call target with a modified outgoing caller identification (‘caller ID’).” NobelBiz seeks damages in the form of lost profits as well as injunctive relief. The lawsuit is one of several lawsuits filed by NobelBiz against various companies including TCN Inc., LiveVox, Inc. and Global Connect LLC. On March 28, 2013, the court granted the Company’s motion to transfer the case to the United States District Court for the Northern District of California. Subsequently, NobelBiz amended its complaint to add claims related to U.S. Patent No. 8,565,399, or the ‘399 patent, which is a continuation in the same family as the ‘122 patent and addresses the same technology. The Company responded to the complaint and amended complaint by asserting noninfringement and invalidity of the ‘122 and ‘399 patents. On January 16, 2015, the court issued an order regarding claim construction of the two patents-in-suit. On March 7, 2016, the court stayed the case pending an appeal in lawsuits involving NobelBiz, Global Connect and TCN that also involve the ‘122 and ‘399 patents. The appeal for those cases is likely to last until later this year, after which time the lawsuit between NobelBiz and Five9 will resume and a new schedule will be entered by the Court. The Company has investigated the claims alleged in the complaint and believes that it has good defenses to the claims. While the Company does not believe that it is probable that a loss has been incurred, the ultimate resolution of the matter could potentially result in a loss. Management’s best estimate of the low end of the range of the potential loss is zero. At this time, it is not possible to reasonably estimate the high end of the range of the potential loss, which could be material to the Company’s results of operations. Accordingly, the Company has not accrued a loss related to this matter. Indemnification Agreements In the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which it agrees to indemnify clients, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. Other than as described below, no demands have been made upon the Company to provide indemnification under such agreements and there are no claims that it is aware of that could have a material effect on the consolidated balance sheet, consolidated statement of operations and comprehensive loss, or consolidated statements of cash flows. On October 27, 2016, the Company received notice from Lance Fried, a former officer and director of Face It, of his claim for indemnification by the Company (as successor in interest to Face It), and for advancement of all legal fees and expenses he incurs in connection with the defense of the Melcher litigation. See PART I, ITEM3 of this Form 10-K. As of March 31, 2017 , the Company had incurred or advanced Mr. Fried $62 thousand in connection with this claim. To the extent that it is ultimately determined that Mr. Fried is not entitled to indemnification, Mr. Fried has undertaken to reimburse the Company for all amounts advanced to him. In addition, the Company believes that it has indemnification rights against the former stockholders of Face It for all losses that are incurred in connection with the Melcher litigation, including without limitation, amounts incurred to indemnify or advance the legal fees and expenses of Mr. Fried pursuant to his indemnification claim against the Company.

Geographical Information

Geographical Information	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Geographical Information	10 . Geographical Information The following table is a summary of revenues by geographic region based on client billing address and has been estimated based on the amounts billed to clients during the periods (in thousands). Three Months Ended March 31, 2017 March 31, 2016 United States $ 44,358 $ 35,593 International 2,656 2,422 Total revenue $ 47,014 $ 38,015 The following table summarizes total property and equipment, net, in the respective locations (in thousands). March 31, 2017 December 31, 2016 United States $ 14,430 $ 13,025 International 1,400 1,663 Property and equipment, net $ 15,830 $ 14,688

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2017
Subsequent Events [Abstract]
Subsequent Events	11 . Subsequent Events In April 2017, the Company was notified that third parties are suspected of having unlawfully acquired some of its clients’ information. The Company believes this acquisition was the result of a vulnerability that has now been remediated. Clients determined to have been impacted have been notified. The Company is working closely with law enforcement authorities and conducting its own ongoing internal investigation with the assistance of outside counsel and technical experts. Expenses incurred to date related to this incident have not been material. The Company will incur additional expenses and may incur losses in connection with this incident, however, at this time it is unable to reasonably estimate any such additional expenses or losses. Five9 has insurance that is likely to apply to this incident.

Description of Business and S18

Description of Business and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in accordance 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The significant estimates made by management affect revenue, the allowance for doubtful accounts, intangible assets, goodwill, loss contingencies, including the Company’s accrual for federal fees and sales tax liability, accrued liabilities, stock-based compensation, provision for income taxes and uncertain tax positions. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results could differ from those estimates.
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Effective	Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This ASU simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance is effective for the Company beginning in the first quarter of 2017, with early application permitted. Beginning in Q1 2017, the Company is accounting for forfeitures as they occur, rather than by estimating expected forfeitures. The net effect of this change was recognized as a $0.2 million reduction to accumulated deficit in the condensed consolidated financial statements. Upon adoption of the new standard, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards are treated as discrete items in the reporting period in which they occur. The Company also recognizes excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. The Company has applied the modified retrospective adoption approach beginning in Fiscal Year 2017 and prior periods have not been adjusted. As a result, the Company will establish a net operating loss deferred tax asset of $5.3 million to account for prior period excess tax benefits through retained earnings, however an offsetting valuation allowance of $5.3 million will also be established through retained earnings because it is not more likely than not that the deferred tax asset will be realized due to historical and expected future losses, such that there is no impact on the Company’s condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . The ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The ASU does not change the accounting for a customer’s accounting for service contracts. A company can elect to adopt the ASU either prospectively or retrospectively. The Company adopted this guidance prospectively beginning in the first quarter of 2016 and the adoption did not have a material effect on its condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . The ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this ASU. In August 2015, the FASB issued ASU No. 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements , which clarifies that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company adopted this guidance retrospectively beginning in the first quarter of 2016 and the adoption did not have a material effect on its condensed consolidated financial statements for the prior periods or the current period reported. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . The new guidance requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. The standard is effective for the Company's annual period ended December 31, 2016 and interim and annual periods thereafter. Early adoption is permitted. The Company adopted this guidance prospectively beginning in the fourth quarter of 2016 and the adoption did not have a material effect on its consolidated financial statements. Recent Accounting Pronouncements Not Yet Effective In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for certain types of financial assets held. ASU 2016-13 is effective for the Company in its first quarter of 2020, and earlier adoption is permitted beginning in the first quarter of 2019. The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . Under the new guidance, a lessee will be required to recognize assets and liabilities for both finance, or capital, and operating leases with lease terms of more than 12 months. The ASU also will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. Lessor accounting will remain largely unchanged from current GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach that includes a number of optional practical expedients that entities may elect to apply. This guidance is effective for the Company beginning in the first quarter of 2019. Early adoption is permitted. The Company is currently assessing the effect the guidance will have on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016 and May 2016 within ASU 2015-04, ASU 2016-08, ASU 2016-10 and ASU 2016-12, respectively (ASU 2014-09, ASU 2015-04, ASU 2016-08, ASU 2016-10 and ASU 2016-12 collectively, Topic 606). Topic 606 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. Topic 606 is effective for the Company's annual and interim reporting periods beginning January 1, 2018 using either a retrospective or a cumulative effect transition method. The Company has developed an implementation plan to adopt this new guidance. As part of this plan, the Company is currently assessing the impact of the new guidance on its results of operations. Based on procedures performed to date, nothing has come to the Company's attention that would indicate that the adoption of Topic 606 will have a material impact on its financial statements, however, the Company will continue to evaluate this assessment in 2017. The Company intends to adopt Topic 606 on January 1, 2018. The Company has not yet selected a transition method, but expects to do so in the third quarter of 2017 upon completion of further analysis.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Schedule of Assets Carried at Fair Value	The fair value of assets carried at fair value was determined using the following inputs (in thousands): March 31, 2017 Total Level 1 Level 3 Assets Cash equivalents Money market funds $ 20,081 $ 20,081 $ — Other Assets Embedded conversion option held for investment $ 903 $ — $ 903 December 31, 2016 Total Level 1 Level 3 Assets Cash equivalents Money market funds $ 20,069 $ 20,069 $ — Other Assets Embedded conversion option held for investment $ 873 $ — $ 873
Schedule of Fair Value Measured and Recorded Using Significant Unobservable Inputs (Level 3)	Fair Value Measured and Recorded Using Significant Unobservable Inputs (Level 3) (in thousands): March 31, 2017 Beginning balance $ 873 Total gains (losses) included in earnings 30 Ending balance $ 903

Financial Statement Components

Financial Statement Components (Tables)	3 Months Ended
	Mar. 31, 2017
Financial Statement Components [Abstract]
Schedule of Cash and Cash Equivalents	Cash and cash equivalents consisted of the following (in thousands): March 31, December 31, Cash $ 36,371 $ 38,053 Money market funds 20,081 20,069 Cash and cash equivalents $ 56,452 $ 58,122
Schedule of Accounts Receivable	Accounts receivable, net consisted of the following (in thousands): March 31, December 31, Trade accounts receivable $ 14,268 $ 12,640 Unbilled trade accounts receivable, net of advance client deposits 1,209 1,253 Allowance for doubtful accounts (24 ) (12 ) Accounts receivable, net $ 15,453 $ 13,881
Schedule of Prepaid Expenses and Other Current Assets	Prepaid expenses and other current assets consisted of the following (in thousands): March 31, December 31, Prepaid expenses $ 3,905 $ 2,199 Other current assets 1,212 809 Prepaid expenses and other current assets $ 5,117 $ 3,008
Schedule of Property and Equipment	Property and equipment, net consisted of the following (in thousands): March 31, December 31, Computer and network equipment $ 39,746 $ 37,664 Computer software 5,954 5,133 Internal-use software development costs 500 475 Furniture and fixtures 1,201 1,130 Leasehold improvements 629 624 Property and equipment 48,030 45,026 Accumulated depreciation and amortization (32,200 ) (30,338 ) Property and equipment, net $ 15,830 $ 14,688
Schedule of Capital Leased Property and Equipment	Property and equipment capitalized under capital lease obligations consist primarily of computer and network equipment and were as follows (in thousands): March 31, December 31, Gross $ 40,214 $ 35,504 Less: accumulated depreciation and amortization (26,521 ) (23,128 ) Total $ 13,693 $ 12,376
Schedule of Accrued and Other Current Liabilities	Accrued and other current liabilities consisted of the following (in thousands): March 31, December 31, Accrued compensation and benefits $ 8,840 $ 7,456 Accrued legal expenses (1) 1,995 193 Accrued expenses 2,193 1,955 Accrued and other current liabilities $ 13,028 $ 9,604 (1) The March 31, 2017 balance includes an accrual of the settlement amount, and the legal and indemnification fees related the Melcher litigation. See Part II, Item I “Legal Proceedings."

Intangible Assets (Tables)

Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets	The components of intangible assets were as follows (in thousands): March 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 2,460 $ (1,214 ) $ 1,246 $ 2,460 $ (1,126 ) $ 1,334 Customer relationships 520 (359 ) 161 520 (333 ) 187 Domain names 50 (35 ) 15 50 (32 ) 18 Non-compete agreements 140 (140 ) — 140 (140 ) — Total $ 3,170 $ (1,748 ) $ 1,422 $ 3,170 $ (1,631 ) $ 1,539
Schedule of Expected Future Amortization Expense of Intangible Assets	As of March 31, 2017 , the expected future amortization expense for intangible assets was as follows (in thousands): Period Expected Future Amortization Expense Remainder of 2017 $ 349 2018 442 2019 351 2020 280 Total $ 1,422

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Schedule of Outstanding Debt	As of March 31, 2017 and December 31, 2016 , the Company’s outstanding debt is summarized as follows (in thousands): March 31, 2017 December 31, 2016 Promissory note to USAC — 120 FCC civil penalty 833 1,000 Total notes payable, gross 833 1,120 Less: discount (54 ) (79 ) Total notes payable, net carrying value 779 1,041 Revolving line of credit 32,594 32,594 Interest accretion under 2016 line of credit $ 26 $ 19 Total debt, net carrying value $ 33,399 $ 33,654 Less: current portion of debt * (643 ) (742 ) Total debt, less current portion ** 32,756 32,912 * Included in ‘Notes payable’ in the condensed consolidated balance sheets. ** Included in ‘Notes payable - less current portion’ and 'Revolving line of credit — less current portion' in the condensed consolidated balance sheets.
Schedule of Maturities of Debt	Maturities of the Company’s outstanding debt as of March 31, 2017 are as follows (in thousands): Period Amount to Mature 2017 500 2018 333 2019 32,594 Total $ 33,427

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Schedule of Common Stock Reserved for Future Issuance	Shares of common stock reserved for future issuance related to outstanding equity awards, common stock warrants, and employee equity incentive plans were as follows (in thousands): March 31, 2017 Stock options outstanding 5,127 Restricted stock units outstanding 2,607 Shares available for future grant under 2014 Plan 7,569 Shares available for future issuance under ESPP 1,636 Common stock warrants outstanding 13 Total shares of common stock reserved 16,952
Schedule of Stock Option Activity	A summary of the Company’s stock option activity during the three months ended March 31, 2017 is as follows (in thousands, except years and per share data): Number of Weighted Weighted Aggregate Outstanding as of December 31, 2016 5,556 $ 5.23 Options granted (weighted average grant date fair value of $7.86 per share) 449 16.21 Options exercised (858 ) 0.92 Options forfeited or expired (20 ) 12.23 Outstanding as of March 31, 2017 5,127 $ 6.88 6.7 $ 49,171
Schedule of RSU Activity	A summary of the Company's restricted stock unit, or RSU, activity during the three months ended March 31, 2017 is as follows (in thousands, except per share data): Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of December 31, 2016 2,019 $ 7.65 RSUs granted 792 16.26 RSUs vested and released (177 ) 6.71 RSUs forfeited (27 ) 7.67 Outstanding as of March 31, 2017 2,607 $ 10.30
Schedule of Stock-based Compensation Expense	Stock-based compensation expenses for the three months ended March 31, 2017 and 2016 were as follows (in thousands): Three Months Ended March 31, 2017 March 31, 2016 Cost of revenue $ 434 $ 265 Research and development 637 435 Sales and marketing 928 434 General and administrative 1,130 860 Total stock-based compensation $ 3,129 $ 1,994 As of March 31, 2017 , unrecognized stock-based compensation expenses by award type and their expected weighted-average recognition periods are summarized in the following table (in thousands, except years). Stock Option RSU ESPP Unrecognized stock-based compensation expense $ 8,426 $ 24,752 $ 132 Weighted-average amortization period 2.9 years 3.3 years 0.1 years
Schedule of Valuation Assumptions, Stock Option	The weighted-average assumptions used to value stock options granted during the three months ended March 31, 2017 and 2016 were as follows: Stock Options Three Months Ended March 31, 2017 March 31, 2016 Expected term (years) 6.0 6.0 Volatility 49% 48% Risk-free interest rate 2.0% 1.5% Dividend yield — —

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Basic and Diluted Net Loss Per Share	The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data). Three Months Ended March 31, 2017 March 31, 2016 Net loss $ (5,255 ) $ (4,911 ) Weighted-average shares used in computing basic and diluted net loss per share 53,688 51,377 Basic and diluted net loss per share $ (0.10 ) $ (0.10 )
Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share	The following securities were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented (in thousands). March 31, 2017 March 31, 2016 Stock options 5,127 5,980 Restricted stock units 2,607 2,459 ESPP — 162 Common stock warrants 13 132 Total 7,747 8,733

Geographical Information (Table

Geographical Information (Tables)	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Schedule of Revenues and Property and Equipment by Geographic Region	The following table is a summary of revenues by geographic region based on client billing address and has been estimated based on the amounts billed to clients during the periods (in thousands). Three Months Ended March 31, 2017 March 31, 2016 United States $ 44,358 $ 35,593 International 2,656 2,422 Total revenue $ 47,014 $ 38,015 The following table summarizes total property and equipment, net, in the respective locations (in thousands). March 31, 2017 December 31, 2016 United States $ 14,430 $ 13,025 International 1,400 1,663 Property and equipment, net $ 15,830 $ 14,688

Description of Business and S26

Description of Business and Summary of Significant Accounting Policies (Details) - ASU 2016-09 $ in Millions	Jan. 01, 2017USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred tax asset	$ 5.3
Deferred tax asset, valuation allowance	5.3
Accumulated deficit
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Effect on financial statements	$ 0.2

Fair Value Measurements - Sched

Fair Value Measurements - Schedule of Assets Carried at Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Money market funds
Assets
Cash equivalents	$ 20,081	$ 20,069
Money market funds | Level 1
Assets
Cash equivalents	20,081	20,069
Embedded conversion option held for investment
Assets
Other Assets	903	873
Embedded conversion option held for investment | Level 3
Assets
Other Assets	$ 903	$ 873

Fair Value Measurements - Recon

Fair Value Measurements - Reconciliation of Unobservable Inputs (Details) - Level 3 $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 873
Total gains (losses) included in earnings	30
Ending balance	$ 903

Financial Statement Component29

Financial Statement Components - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Financial Statement Components [Abstract]
Cash	$ 36,371	$ 38,053
Money market funds	20,081	20,069
Cash and cash equivalents	$ 56,452	$ 58,122	$ 57,767	$ 58,484

Financial Statement Component30

Financial Statement Components - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accounts Receivable [Line Items]
Allowance for doubtful accounts	$ (24)	$ (12)
Accounts receivable, net	15,453	13,881
Trade accounts receivable
Accounts Receivable [Line Items]
Trade accounts receivable	14,268	12,640
Unbilled trade accounts receivable, net of advance client deposits
Accounts Receivable [Line Items]
Trade accounts receivable	$ 1,209	$ 1,253

Financial Statement Component31

Financial Statement Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financial Statement Components [Abstract]
Prepaid expenses	$ 3,905	$ 2,199
Other current assets	1,212	809
Prepaid expenses and other current assets	$ 5,117	$ 3,008

Financial Statement Component32

Financial Statement Components - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment
Property and equipment	$ 48,030	$ 45,026
Accumulated depreciation and amortization	(32,200)	(30,338)
Property and equipment, net	15,830	14,688
Computer and network equipment
Property, Plant and Equipment
Property and equipment	39,746	37,664
Computer software
Property, Plant and Equipment
Property and equipment	5,954	5,133
Internal-use software development costs
Property, Plant and Equipment
Property and equipment	500	475
Furniture and fixtures
Property, Plant and Equipment
Property and equipment	1,201	1,130
Leasehold improvements
Property, Plant and Equipment
Property and equipment	$ 629	$ 624

Financial Statement Component33

Financial Statement Components - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Financial Statement Components [Abstract]
Depreciation and amortization expense associated with property and equipment	$ 2	$ 2

Financial Statement Component34

Financial Statement Components - Schedule of Capital Leased Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financial Statement Components [Abstract]
Gross	$ 40,214	$ 35,504
Less: accumulated depreciation and amortization	(26,521)	(23,128)
Total	$ 13,693	$ 12,376

Financial Statement Component35

Financial Statement Components - Schedule of Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financial Statement Components [Abstract]
Accrued compensation and benefits	$ 8,840	$ 7,456
Accrued legal expenses	1,995	193
Accrued expenses	2,193	1,955
Accrued and other current liabilities	$ 13,028	$ 9,604

Intangible Assets - Schedule of

Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Acquired Finite-Lived Intangible Assets
Gross Carrying Amount	$ 3,170	$ 3,170
Accumulated Amortization	(1,748)	(1,631)
Total	1,422	1,539
Developed technology
Acquired Finite-Lived Intangible Assets
Gross Carrying Amount	2,460	2,460
Accumulated Amortization	(1,214)	(1,126)
Total	1,246	1,334
Customer relationships
Acquired Finite-Lived Intangible Assets
Gross Carrying Amount	520	520
Accumulated Amortization	(359)	(333)
Total	161	187
Domain names
Acquired Finite-Lived Intangible Assets
Gross Carrying Amount	50	50
Accumulated Amortization	(35)	(32)
Total	15	18
Non-compete agreements
Acquired Finite-Lived Intangible Assets
Gross Carrying Amount	140	140
Accumulated Amortization	(140)	(140)
Total	$ 0	$ 0

Intangible Assets - Schedule 37

Intangible Assets - Schedule of Expected Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2017	$ 349
2,018	442
2,019	351
2,020	280
Total	$ 1,422	$ 1,539

Intangible Assets Intangible As

Intangible Assets Intangible Assets - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Amortization expense related to intangible assets	$ 0.1	$ 0.1

Debt - 2016 Loan and Security A

Debt - 2016 Loan and Security Agreement (Details) - USD ($)	Aug. 01, 2016	Mar. 31, 2017
Loan and Security Agreements 2014 and 2013
Debt Instrument [Line Items]
Loss on extinguishment of debt		$ 1,000,000
Prepayment penalties on extinguishment of debt		400,000
Write-off of unamortized debt discounts		400,000
Write-off of unamortized debt		200,000
Revolving Credit Facility | Line of Credit | Loan and Security Agreement 2016
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 50,000,000
Credit facility, amount outstanding	$ 32,600,000	32,600,000
Unused line of credit capacity, fee	0.25%
First and second anniversary fee for line of credit	$ 31,250
Credit facility, remaining borrowing capacity		17,400,000
Debt issuance costs		$ 200,000
Debt issuance costs, amortization period	3 years
Unrestricted cash required to be deposited with lenders	$ 25,000,000
Revolving Credit Facility | Line of Credit | Loan and Security Agreement 2016 | Prime rate
Debt Instrument [Line Items]
Percentage increase in interest rate if adjusted EBITDA is negative at end of quarter	0.25%
Minimum | Revolving Credit Facility | Line of Credit | Loan and Security Agreement 2016 | Prime rate
Debt Instrument [Line Items]
Debt instrument, basis spread	0.50%

Debt - 2013 Loan and Security A

Debt - 2013 Loan and Security Agreement (Details) - 2013 Loan and Security Agreement - USD ($)	1 Months Ended
	Oct. 31, 2013	Mar. 31, 2013
Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity		$ 20,000,000
Covenant terms, minimum required cash on deposit at lender		$ 7,500,000
Revolving Credit Facility | Prime rate
Debt Instrument [Line Items]
Debt instrument, basis spread		0.50%
Term Loan
Debt Instrument [Line Items]
Credit facility, amount borrowed under agreement	$ 5,000,000
Term Loan | Prime rate
Debt Instrument [Line Items]
Debt instrument, basis spread	1.50%

Debt - 2014 Loan and Security A

Debt - 2014 Loan and Security Agreement (Details)	1 Months Ended
	Feb. 28, 2014USD ($)lender$ / sharesshares	Mar. 31, 2017USD ($)
Debt Instrument [Line Items]
Debt, gross		$ 33,427,000
Term Loan | 2014 Loan and Security Agreement
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 30,000,000
Number of lenders | lender	2
Credit facility, remaining borrowing capacity	$ 10,000,000
Credit facility, minimum incremental borrowing amount	$ 1,000,000
Term Loan | 2014 Loan and Security Agreement | Prime rate
Debt Instrument [Line Items]
Term loan, minimum interest rate	10.00%
Term Loan | 2014 Loan and Security Agreement | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, basis spread	9.00%
Term Loan | Tranche One
Debt Instrument [Line Items]
Credit facility, maximum borrowing capacity	$ 20,000,000
Payments of debt issuance costs	400,000
Debt, gross	$ 20,000,000
Common Stock | Term Loan | 2014 Loan and Security Agreement
Debt Instrument [Line Items]
Warrants issued | shares	177,865
Warrants outstanding, exercise price (in USD per share) | $ / shares	$ 10.12
Common Stock | Term Loan | Tranche One
Debt Instrument [Line Items]
Warrants vested, shares | shares	118,577
Warrants vested, fair value	$ 1,000,000
Common Stock Warrant | Term Loan | 2014 Loan and Security Agreement
Debt Instrument [Line Items]
Class of warrant or right, vesting period (in years)	10 years
Warrants unvested, shares | shares	59,288

Debt - Promissory Note_FCC Civi

Debt - Promissory Note/FCC Civil Penalty (Details) $ in Thousands	1 Months Ended
	Jun. 30, 2015USD ($)installment	Jul. 31, 2013USD ($)installment	Mar. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Jun. 12, 2015USD ($)	Sep. 30, 2014USD ($)
Debt Instrument [Line Items]
Debt, gross			$ 33,427
Total debt, net carrying value			33,399	$ 33,654
Discount on debt			54	79
FCC Civil Penalty
Debt Instrument [Line Items]
Debt, gross					$ 2,000
Notes Payable
Debt Instrument [Line Items]
Debt, gross			833	1,120
Total debt, net carrying value			779	1,041
Notes Payable | Promissory Note
Debt Instrument [Line Items]
Debt, gross		$ 4,100
Debt instrument, stated interest rate		12.75%
Debt instrument, number of monthly payments | installment		42
Notes Payable | FCC Civil Penalty
Debt Instrument [Line Items]
Debt, gross	$ 2,000		833	1,000
Debt instrument, stated interest rate	12.75%
Debt instrument, number of quarterly payments | installment	12
Total debt, net carrying value	$ 1,700		800	900
Discount on debt	$ 300
Notes Payable | Promissory note to USAC
Debt Instrument [Line Items]
Debt, gross			$ 0	$ 120
FCC Civil Penalty
Debt Instrument [Line Items]
Accrued liability						$ 2,000

Debt - Schedule of Outstanding

Debt - Schedule of Outstanding Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2015	Jun. 12, 2015
Debt Instrument [Line Items]
Debt, gross	$ 33,427		$ 33,427
Less: discount	(54)	$ (79)	(54)
Total debt, net carrying value	33,399	33,654	33,399
Interest accretion under 2016 line of credit	26	19	5	$ 0
Less: current portion of debt	(643)	(742)	(643)
Total debt, less current portion	32,756	32,912	32,756
FCC Civil Penalty
Debt Instrument [Line Items]
Debt, gross						$ 2,000
Notes Payable
Debt Instrument [Line Items]
Debt, gross	833	1,120	833
Total debt, net carrying value	779	1,041	779
Notes Payable | Promissory note to USAC
Debt Instrument [Line Items]
Debt, gross	0	120	0
Notes Payable | FCC Civil Penalty
Debt Instrument [Line Items]
Debt, gross	833	1,000	833		$ 2,000
Less: discount					(300)
Total debt, net carrying value	800	900	800		$ 1,700
Line of Credit
Debt Instrument [Line Items]
Debt, gross	$ 32,594	$ 32,594	$ 32,594

Debt - Schedule of Maturities o

Debt - Schedule of Maturities of Debt (Details) $ in Thousands	Mar. 31, 2017USD ($)
Debt Disclosure [Abstract]
2,017	$ 500
2,018	333
2,019	32,594
Total	$ 33,427

Stockholders' Equity - Capital

Stockholders' Equity - Capital Structure (Details) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Equity [Abstract]
Common Stock, shares authorized (in shares)	450,000,000	450,000,000
Common Stock, par value (in USD per share)	$ 0.001	$ 0.001
Common Stock, shares issued (in shares)	54,443,729	53,363,013
Common Stock, shares outstanding (in shares)	54,443,729	53,363,013
Preferred Stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred Stock, par value (in USD per share)	$ 0.001	$ 0.001
Preferred Stock, shares issued (in shares)	0	0
Preferred Stock, shares outstanding (in shares)	0	0

Stockholders' Equity - Warrants

Stockholders' Equity - Warrants (Details) - $ / shares	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Class of Warrant or Right
Warrant expiration date	2023-10
Common Stock
Class of Warrant or Right
Warrants outstanding (in shares)	13,017	131,597
Outstanding warrants exercise price, weighted-average (in USD per share)	$ 6.93	$ 9.80

Stockholders' Equity - Common S

Stockholders' Equity - Common Stock Reserved for Future Issuance (Details) - shares	Mar. 31, 2017	Dec. 31, 2016	Apr. 03, 2014
Class of Stock
Common stock reserved for future issuance (in shares)	16,952,000
Stock options
Class of Stock
Stock options outstanding (in shares)	5,127,000	5,556,000
Restricted stock units
Class of Stock
Restricted stock units outstanding (in shares)	2,607,000	2,019,000
ESPP
Class of Stock
Common stock reserved for future issuance (in shares)	1,635,854		880,000
Common stock warrants outstanding
Class of Stock
Common stock reserved for future issuance (in shares)	13,000
2014 Plan
Class of Stock
Shares available for future grant (in shares)	7,569,000

Stockholders' Equity - Equity I

Stockholders' Equity - Equity Incentive Plans (Details) - 2014 Plan - shares	Mar. 31, 2017	Jan. 01, 2017	Jan. 01, 2016	Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Automatic annual increase in common stock reserved for issuance, percentage				5.00%
Automatic annual increase in common stock reserved for issuance, shares		2,668,150	2,558,231
Number of shares available for future grant	7,569,000
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award
Number of shares originally authorized for issuance (in shares)				5,300,000
Number of shares available for future grant	7,568,651

Stockholders' Equity - Stock Op

Stockholders' Equity - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)$ / sharesshares
Class of Stock
Closing market price of common stock (in USD per share)	$ 16.46
Stock options
Options Outstanding [Roll Forward]
Outstanding, beginning balance (in shares) | shares	5,556
Options granted (weighted average grant date fair value of $7.86 per share) (in shares) | shares	449
Options exercised (in shares) | shares	(858)
Options forfeited or expired (in shares) | shares	(20)
Outstanding, ending balance (in shares) | shares	5,127
Options Outstanding, Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance, weighted average exercise price (in USD per share)	$ 5.23
Options granted, weighted average exercise price (in USD per share)	16.21
Options exercised, weighted average exercise price (in USD per share)	0.92
Options forfeited or expired, weighted average exercise price (in USD per share)	12.23
Outstanding, ending balance, weighted average exercise price (in USD per share)	6.88
Weighted average grant date fair value, options granted (in USD per share)	$ 7.86
Outstanding, ending balance, weighted average remaining contractual life	6 years 8 months 12 days
Outstanding, ending balance, aggregate intrinsic value | $	$ 49,171

Stockholders' Equity - RSU Acti

Stockholders' Equity - RSU Activity (Details) - Restricted stock units shares in Thousands	3 Months Ended
	Mar. 31, 2017$ / sharesshares
Number of Shares
Outstanding, beginning balance (in shares) | shares	2,019
RSUs granted (in shares) | shares	792
RSUs vested and released (in shares) | shares	(177)
RSUs forfeited (in shares) | shares	(27)
Outstanding, ending balance (in shares) | shares	2,607
Weighted Average Grant Date Fair Value Per Share
Outstanding, beginning balance, weighted-average grant date fair value per share (in USD per share) | $ / shares	$ 7.65
RSUs granted, weighted average grant date fair value (in USD per share) | $ / shares	16.26
RSUs vested and released, weighted average grant date fair value (in USD per share) | $ / shares	6.71
RSUs forfeited, weighted average grant date fair value (in USD per share) | $ / shares	7.67
Outstanding, ending balance, weighted-average grant date fair value per share (in USD per share) | $ / shares	$ 10.30

Stockholders' Equity - ESPP (De

Stockholders' Equity - ESPP (Details) - shares	3 Months Ended
	Mar. 31, 2017	Jan. 01, 2017	Jan. 01, 2016	Apr. 03, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Common stock reserved for future issuance (in shares)	16,952,000
ESPP
Share-based Compensation Arrangement by Share-based Payment Award
Common stock reserved for future issuance (in shares)	1,635,854			880,000
Automatic annual increase in common stock reserved for issuance, percentage	1.00%
Maximum annual increase of shares reserved	1,000,000
Automatic annual increase in common stock reserved for issuance, shares		533,630	511,646
Purchases made under the ESPP (in shares)	0

Stockholders' Equity - Stock-ba

Stockholders' Equity - Stock-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Stock-based Compensation Expense
Stock-based compensation expense	$ 3,129	$ 1,994
Stock options
Stock-based Compensation Expense
Unrecognized stock-based compensation expense	$ 8,426
Weighted-average amortization period	2 years 11 months 2 days
Restricted stock units
Stock-based Compensation Expense
Unrecognized stock-based compensation expense	$ 24,752
Weighted-average amortization period	3 years 3 months 19 days
ESPP
Stock-based Compensation Expense
Unrecognized stock-based compensation expense	$ 132
Weighted-average amortization period	1 month 15 days
Cost of revenue
Stock-based Compensation Expense
Stock-based compensation expense	$ 434	265
Research and development
Stock-based Compensation Expense
Stock-based compensation expense	637	435
Sales and marketing
Stock-based Compensation Expense
Stock-based compensation expense	928	434
General and administrative
Stock-based Compensation Expense
Stock-based compensation expense	$ 1,130	$ 860

Stockholders' Equity - Valuatio

Stockholders' Equity - Valuation Assumptions (Details) - Stock options	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Class of Stock
Expected term (years)	6 years 8 days	6 years 8 days
Volatility	49.00%	48.00%
Risk-free interest rate	2.00%	1.50%
Dividend yield	0.00%	0.00%

Net Loss Per Share - Basic and

Net Loss Per Share - Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Net loss	$ (5,255)	$ (4,911)
Weighted-average shares used in computing basic and diluted net loss per share (in shares)	53,688	51,377
Basic and diluted net loss per share (in USD per share)	$ (0.10)	$ (0.10)

Net Loss Per Share - Antidiluti

Net Loss Per Share - Antidilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share	7,747	8,733
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share	5,127	5,980
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share	2,607	2,459
ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share	0	162
Common stock warrants | Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive securities excluded from calculation of diluted net loss per share	13	132

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 49	$ 28

Commitments and Contingencies -

Commitments and Contingencies - Commitments (Details) $ in Millions	3 Months Ended
	Mar. 31, 2017USD ($)
Capital lease obligations
Other Commitments [Line Items]
Capital lease future payment obligations incurred	$ 2.6
Capital lease future minimum payments, remainder of 2017	0.6
Capital lease future minimum payments, due after 2017	$ 2
Period remainder of minimum payments is due	28 months
Hosting and telecommunications agreements
Other Commitments [Line Items]
Various agreements total minimum future payment commitments	$ 1
Hosting and telecommunications agreements | Minimum
Other Commitments [Line Items]
Period for various agreements	24 months
Hosting and telecommunications agreements | Maximum
Other Commitments [Line Items]
Period for various agreements	36 months

Commitments and Contingencies58

Commitments and Contingencies - Universal Services Fund Liability (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended
	Jan. 31, 2017	Jul. 31, 2013	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Jun. 30, 2015	Jun. 12, 2015	Sep. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Loss Contingencies [Line Items]
Accrued federal fees			$ 3,018		$ 2,742
Reversal of accrued federal fees	$ 3,100
Debt, gross			33,427
FCC Enforcement Bureau Civil Penalty
Loss Contingencies [Line Items]
Accrued liability								$ 2,000
General and administrative expense
Loss Contingencies [Line Items]
Interest and penalty expense			100	$ 100
2003 through 2012 | USF obligations
Loss Contingencies [Line Items]
Accrued federal fees										$ 8,100
2003 through 2012 | Undisputed portion | USF obligations
Loss Contingencies [Line Items]
Accrued federal fees									$ 4,700	4,700
Payments		$ 600
2003 through 2012 | Disputed portion | USF obligations
Loss Contingencies [Line Items]
Accrued federal fees			2,700		2,500					3,400
2003 through 2007 | Disputed portion | USF obligations
Loss Contingencies [Line Items]
Accrued federal fees										$ 800
Promissory Note | USF obligations
Loss Contingencies [Line Items]
Debt, gross		4,100
FCC Enforcement Bureau Civil Penalty
Loss Contingencies [Line Items]
Debt, gross							$ 2,000
Notes payable
Loss Contingencies [Line Items]
Debt, gross			833		1,120
Notes payable | Promissory Note
Loss Contingencies [Line Items]
Debt, gross		$ 4,100
Notes payable | Promissory note to USAC
Loss Contingencies [Line Items]
Debt, gross			0		120
Notes payable | FCC Enforcement Bureau Civil Penalty
Loss Contingencies [Line Items]
Debt, gross			$ 833		$ 1,000	$ 2,000

Commitments and Contingencies59

Commitments and Contingencies - State and Local Taxes and Surcharges (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2016
Loss Contingencies [Line Items]
General and administrative	$ 8,860,000	$ 6,536,000
Accrued sales tax liability	1,399,000			$ 1,476,000
Accrued sales tax liability, current	1,138,000			1,347,000
Contingent sales tax liabilities
Loss Contingencies [Line Items]
Payments	0	200,000
Sales tax liability, (gain) expense	(100,000)	$ 6,000
Accrued sales tax liability, current	500,000			600,000
Potential obligation for state taxes on usage based fees
Loss Contingencies [Line Items]
Accrued sales tax liability	$ 1,900,000			$ 2,100,000
Out of period adjustment | Contingent sales tax liabilities
Loss Contingencies [Line Items]
General and administrative			$ 600,000

Commitments and Contingencies60

Commitments and Contingencies - Legal Matters and Indemnification Agreements (Details) - Melcher litigation $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)
Loss Contingencies [Line Items]
Litigation settlement	$ 1,700
Lance Fried, former officer and director of Face It | Indemnification agreement
Loss Contingencies [Line Items]
Incurred or advanced legal fees and expenses	$ 62

Geographical Information - Sche

Geographical Information - Schedule of Revenue and Property and Equipment by Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Revenues from External Customers and Long-Lived Assets
Revenue	$ 47,014	$ 38,015
Property and equipment, net	15,830		$ 14,688
United States
Revenues from External Customers and Long-Lived Assets
Revenue	44,358	35,593
Property and equipment, net	14,430		13,025
International
Revenues from External Customers and Long-Lived Assets
Revenue	2,656	$ 2,422
Property and equipment, net	$ 1,400		$ 1,663