Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 23, 2018 | |
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 | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 57,683,899 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 80,676 | $ 68,947 |
Accounts receivable, net | 18,534 | 19,048 |
Prepaid expenses and other current assets | 7,150 | 4,840 |
Deferred Costs, Current | 7,562 | 0 |
Total current assets | 113,922 | 92,835 |
Property and equipment, net | 20,876 | 19,888 |
Intangible assets, net | 957 | 1,073 |
Goodwill | 11,798 | 11,798 |
Other assets | 1,120 | 2,602 |
Deferred Costs, Noncurrent | 17,238 | 0 |
Total assets | 165,911 | 128,196 |
Current liabilities: | ||
Accounts payable | 5,482 | 4,292 |
Accrued and other current liabilities | 14,132 | 11,787 |
Accrued federal fees | 1,331 | 1,151 |
Sales tax liability | 1,097 | 1,326 |
Notes payable | 180 | 336 |
Capital leases | 6,810 | 6,651 |
Deferred revenue | 13,700 | 13,975 |
Total current liabilities | 42,732 | 39,518 |
Revolving line of credit | 32,594 | 32,594 |
Sales tax liability — less current portion | 979 | 1,044 |
Capital leases — less current portion | 7,654 | 7,161 |
Other long-term liabilities | 1,500 | 1,041 |
Total liabilities | 85,459 | 81,358 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 5,000 shares authorized, no shares issued and outstanding at March 31, 2018 and December 31, 2017 | 0 | 0 |
Common stock, $0.001 par value; 450,000 shares authorized, 57,654 shares and 56,632 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 58 | 57 |
Additional paid-in capital | 232,277 | 222,202 |
Accumulated deficit | (151,883) | (175,421) |
Total stockholders’ equity | 80,452 | 46,838 |
Total liabilities and stockholders’ equity | $ 165,911 | $ 128,196 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets - Parenthetical - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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) | 57,653,677 | 56,631,647 |
Common Stock, shares outstanding (in shares) | 57,653,677 | 56,631,647 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Revenue | $ 58,905 | $ 47,014 |
Cost of revenue | 24,702 | 19,971 |
Gross profit | 34,203 | 27,043 |
Operating expenses: | ||
Research and development | 7,772 | 6,847 |
Sales and marketing | 17,478 | 15,778 |
General and administrative | 9,103 | 8,860 |
Total operating expenses | 34,353 | 31,485 |
Loss from operations | (150) | (4,442) |
Other income (expense), net: | ||
Interest expense | (810) | (882) |
Interest income and other | 398 | 118 |
Total other income (expense), net | (412) | (764) |
Loss before income taxes | (562) | (5,206) |
Provision for income taxes | 45 | 49 |
Net loss | $ (607) | $ (5,255) |
Net loss per share: | ||
Basic and diluted (in USD per share) | $ (0.01) | $ (0.10) |
Shares used in computing net loss per share: | ||
Basic and diluted (in shares) | 56,399 | 53,688 |
Comprehensive Income (Loss): | ||
Net loss and comprehensive loss | $ (607) | $ (5,255) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (607) | $ (5,255) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 2,320 | 2,095 |
Provision for doubtful accounts | 48 | 24 |
Stock-based compensation | 5,325 | 3,129 |
Gain on sale of convertible notes held for investment | (312) | 0 |
Non-cash adjustment on investment | (40) | (103) |
Amortization of debt discount and issuance costs | 20 | 20 |
Accretion of interest | 16 | 5 |
Others | (10) | (8) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 519 | (1,595) |
Prepaid expenses and other current assets | (1,833) | (2,129) |
Deferred contract acquisition costs | (1,662) | 0 |
Other assets | (90) | 30 |
Accounts payable | 1,181 | (95) |
Accrued and other current liabilities | 2,791 | 3,119 |
Accrued federal fees and sales tax liability | (115) | (11) |
Deferred revenue | 121 | 909 |
Other liabilities | 325 | 24 |
Net cash provided by operating activities | 7,997 | 159 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (433) | (514) |
Proceeds from sale of convertible notes held for investment | 1,923 | 0 |
Net cash provided by (used in) investing activities | 1,490 | (514) |
Cash flows from financing activities: | ||
Proceeds from exercise of common stock options | 4,751 | 793 |
Payments of notes payable | (157) | (258) |
Payments of capital leases | (2,352) | (1,850) |
Net cash provided by (used in) financing activities | 2,242 | (1,315) |
Net increase (decrease) in cash and cash equivalents | 11,729 | (1,670) |
Cash and cash equivalents: | ||
Beginning of period | 68,947 | 58,122 |
End of period | 80,676 | 56,452 |
Supplemental disclosures of cash flow data: | ||
Cash paid for interest | 765 | 840 |
Cash paid for income taxes | 33 | 21 |
Non-cash investing and financing activities: | ||
Equipment obtained under capital lease | 2,635 | 2,603 |
Equipment purchased and unpaid at period-end | $ 281 | $ 159 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | 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, 2017 . In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. All intercompany transactions and balances have been eliminated in consolidation. Certain prior period amounts included in the condensed consolidated financial statements have been reclassified to conform to the current period presentation. 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, loss contingencies, including the Company’s accrual for federal fees and sales tax liability, and accrued liabilities. 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, 2017 . Other than the accounting policies discussed in Note 2 related to the adoption of ASC 606, there has been no material change to the Company’s significant accounting policies during the three months ended March 31, 2018 . See Note 2 for the updated accounting policies. Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers: Topic 606, amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers , which requires the deferral of incremental costs of obtaining a contract with a customer. The Company adopted ASU 2014-09 and its related amendments (collectively “ASC 606”) effective on January 1, 2018 using the modified retrospective method. See Note 2 for disclosure on the impact of adopting this standard. Recent Accounting Pronouncements Not Yet Effective 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 gathering information and evaluating the impact this guidance will have on its consolidated financial statements. There are several other new accounting pronouncements issued by the FASB, which the Company will adopt. However, the Company does not believe any of those accounting pronouncements will have a material impact on its consolidated financial position, operating results or statements of cash flows. |
ASC 606 Adoption Impact and Rev
ASC 606 Adoption Impact and Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
ASC 606 Adoption Impact and Revenue from Contracts with Customers | ASC 606 Adoption Impact and Revenue from Contracts with Customers ASC 606 Adoption Impact On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method, applying to all contracts. The Company recognized the cumulative effect of applying the new revenue standard as an adjustment to the opening balance of accumulated deficit at the beginning of 2018. The comparative information has not been restated and continues to be reported under the accounting standards in effect for the period presented, or “ASC 605.” In connection with the adoption of ASC 606, the Company also adopted ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers , which requires the deferral of incremental costs of obtaining a contract with a customer. Collectively, the Company refers to ASC 606 and ASC 340-40 as the "new standard.” Adoption of the new standard resulted in changes to our accounting policies for revenue recognition, commissions and deferred commissions as discussed below. The Company recorded a net reduction to opening accumulated deficit of $24.1 million as of January 1, 2018 due to the cumulative impact of adopting the new standard. The primary impact of adopting the new standard relates to the deferral of $23.1 million in incremental commission costs of obtaining subscription contracts. Under ASC 605, the Company expensed all commission costs as incurred. Under the new standard, the Company defers all incremental commission costs to obtain the contract, and amortizes these costs over a period of benefit determined to be five years . The remaining $1.0 million impact of adopting the standard relates to revenue being recognized earlier than it would have been under ASC 605. Practical Expedients and Exemptions The Company applies a practical expedient that permits the Company to apply Subtopic 340-40 to a single portfolio of contracts, as they are similar in their characteristics, and the financial statement effects of applying Subtopic 340-40 to that portfolio would not differ materially from applying it to the individual contracts within that portfolio. Additionally, the Company applies a practical expedient of including the remaining value of unsatisfied performance obligations that exist within contracts with original terms of greater than one year. Impact on the condensed consolidated financial statements Select condensed consolidated balance sheet line items, which reflects the adoption impact of the new standard, are as follows: March 31, 2018 (in thousands) As Reported Balances without adoption of ASC 606 Effect of Change Assets: Accounts receivable, net $ 18,534 $ 18,431 $ 103 Prepaid expenses and other current assets 7,150 6,849 301 Deferred contract acquisition costs 24,800 — 24,800 Liabilities: Deferred revenue - current 13,700 14,811 (1,111 ) Shareholders' Equity: Accumulated deficit (151,883 ) (178,198 ) 26,315 Select condensed consolidated statement of operations line items, which reflects the adoption of the new standard, are as follows: Three months ended March 31, 2018 (in thousands, except per share amounts) As Reported Balances without adoption of ASC 606 Effect of Change Revenue $ 58,905 $ 58,152 $ 753 Cost of revenue 24,702 24,457 245 Gross profit 34,203 33,695 508 Sales and marketing 17,478 19,140 (1,662 ) Loss from operations (150 ) (2,320 ) 2,170 Net loss (607 ) (2,777 ) 2,170 Basic and diluted net loss per share $ (0.01 ) $ (0.05 ) $ 0.04 Select condensed consolidated cash flow line items, which reflects the adoption of the new standard, are as follows: Three months ended March 31, 2018 (in thousands) As Reported Balances without adoption of ASC 606 Effect of Change Accounts receivable $ 519 $ 622 $ (103 ) Prepaid expenses and other current assets (1,833 ) (1,532 ) (301 ) Deferred contract acquisition costs (1,662 ) — (1,662 ) Deferred revenue 121 1,232 (1,111 ) Net cash provided by operating activities 7,997 7,997 — Changes in Accounting Policies Revenue Recognition Revenue is recognized when control of the promised services are transferred to customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company generates all of its revenue from contracts with customers. In contracts with multiple performance obligations, it identifies each performance obligation and evaluates whether the performance obligations are distinct within the context of the contract at contract inception. Performance obligations that are not distinct at contract inception are combined. The Company allocates the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation. The Company then looks to how services are transferred to the customer in order to determine the timing of revenue recognition. Most services provided under the Company’s agreements result in the transfer of control over time. The Company’s revenue consists of subscription services and related usage as well as professional services. The Company charges clients subscription fees, usually billed on a monthly basis, for access to the Company’s VCC solution. The monthly subscription fees are primarily based on the number of agent seats, as well as the specific VCC functionalities and applications deployed by the client. Agent seats are defined as the maximum number of named agents allowed to concurrently access the VCC cloud platform. Clients typically have more named agents than agent seats. Multiple named agents may use an agent seat, though not simultaneously. Substantially all of the Company’s clients purchase both subscriptions and related telephony usage. A small percentage of the Company's clients subscribe to its platform but purchase telephony usage directly from a wholesale telecommunications service provider. The Company does not sell telephony usage on a stand-alone basis to any client. The related usage fees are based on the volume of minutes used for inbound and outbound client interactions. The Company also offers bundled plans, generally for smaller deployments, whereby the client is charged a single monthly fixed fee per agent seat that includes both subscription and unlimited usage in the contiguous 48 states and, in some cases, Canada. Professional services revenue is derived primarily from VCC implementations, including application configuration, system integration, optimization, education and training services. Clients are not permitted to take possession of the Company’s software. The Company offers monthly, annual and multiple-year contracts to its clients, generally with 30 days’ notice required for changes in the number of agent seats and sometimes with a minimum number of agent seats required. Larger clients typically choose annual contracts, which generally include an implementation and ramp period of several months. Fixed subscription fees (including bundled plans) are generally billed monthly in advance, while related usage fees are billed in arrears. Support activities include technical assistance for the Company’s solution and upgrades and enhancements to the VCC cloud platform on a when-and-if-available basis, which are not billed separately. The Company generally requires advance deposits from its clients based on estimated usage when such usage is not billed as part of a bundled plan. Any unused portion of the deposit is refundable to the client upon termination of the arrangement, provided all amounts due have been paid. All fees, except usage deposits, are non-refundable Professional services are primarily billed on a fixed-fee basis and are performed by the Company directly or, alternatively, clients may also choose to perform these services themselves or engage their own third-party service providers. The estimation of variable consideration for each performance obligation requires us to make some subjective judgments. In the early stages of our larger contracts, the Company must estimate variable consideration to be included in the transaction fee, to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved, in order to allocate the overall transaction fee on a relative stand-alone selling price basis to its multiple performance obligations. This requires the estimate of unit quantities, especially during the initial ramp period of the contract, during which the Company bills under an ‘actual usage’ model for subscription-related services. The Company recognizes revenue on fixed fee professional services performance obligations based on the proportion of labor hours expended compared to the total hours expected to complete the related performance obligation. The determination of the total labor hours expected to complete the performance obligations involves some judgment, influencing the initial stand-alone selling price estimate as well as the timing of professional services revenue recognition, although this uncertainty is typically resolved in a short time frame. When a contract with a customer is signed, the Company assesses whether collection of the fees under the arrangement is probable. The Company assesses collection based on a number of factors, including past transaction history and the creditworthiness of the client. The Company maintains a revenue reserve for potential credits to be issued in accordance with service level agreements or for other revenue adjustments. The revenue recognition standards include guidance relating to any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not limited to, sales, use, value added and excise taxes. The Company records Universal Service Fund, or USF, contributions and other regulatory costs on a gross basis in its consolidated statements of operations and comprehensive loss and records surcharges and sales, use and excise taxes billed to its clients on a net basis. The cost of gross USF contributions payable to the Universal Service Administrative Company, or USAC, and suppliers is presented as a cost of revenue in the condensed consolidated statements of operations and comprehensive loss. Surcharges and sales, use and excise taxes incurred in excess of amounts billed to the Company’s clients are presented in general and administrative expense in the condensed consolidated statements of operations and comprehensive loss. Disaggregation of Revenue The Company disaggregates its revenue by geographic region. See Note 11 for more information. Contract Balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands): March 31, 2018 Receivables $ 18,534 Deferred contract acquisition costs 24,800 Short-term contract assets 785 Short-term contract liabilities (deferred revenue) 13,700 The Company receives payments from customers based upon billing cycles. Invoice payment terms are usually 30 days or less. Accounts receivable are recorded when the right to consideration becomes unconditional. Deferred contract acquisition costs are recorded when incurred and are amortized over a customer benefit period of five years. Contract assets include amounts related to the Company’s contractual right to consideration for performance obligations not yet invoiced and is included in prepaid and other current assets in the condensed consolidated balance sheets. The Company had no asset impairment charges related to contract assets in the period. Contract liabilities are comprised of amounts billed in advance of performance under the contract, and are realized with the associated revenue recognized under the contract. Significant changes in the contract assets and the contract liabilities balances during the period are as follows (in thousands): Three Months Ended March 31, 2018 Contract Contract (1) Revenue recognized that was included in the contract liability (deferred revenue) balance at January 1, 2018 $ — $ (6,440 ) Increases due to invoicing in current period, excluding amounts recognized as revenue during the period — 6,572 Transferred to receivables from contract assets recognized at January 1, 2018 (86 ) — Additional contract assets recognized, net of reclassification to receivables 135 — Performance obligations satisfied in previous periods (transition adjustment) 736 (407 ) (1) Comprised of deferred revenue Deferred Contract Acquisition Costs In connection with the adoption of ASC 340-40, the Company is required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed and related incremental fringe benefits. As of January 1, 2018, the date of ASC 340-40 adoption, the Company had $23.1 million capitalized in deferred contract acquisition costs related to contracts where the benefit period had not yet expired. In the three months ended March 31, 2018 , amortization from amounts capitalized was $1.9 million and amounts expensed as incurred was $0.5 million . The Company had no impairment loss in relation to costs capitalized. Remaining Performance Obligations As of March 31, 2018, the aggregate amount of the total transaction price allocated in contracts with original duration of greater than one year to the remaining performance obligations was $56.5 million . The Company expects to recognize revenue on approximately three-quarters of the remaining performance obligation over the next 24 months, with the balance recognized thereafter. The Company has elected the optional exemption which allows for the exclusion of the amounts for remaining performance obligations that are part of contracts with an original expected duration of one year or less. Such remaining performance obligations represent the unsatisfied or partially unsatisfied performance obligations pursuant to ASC 606. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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, 2018 Total Level 1 Level 3 Assets Cash equivalents Money market funds $ 20,132 $ 20,132 $ — Other Assets Embedded conversion option held for investment $ — $ — $ — December 31, 2017 Total Level 1 Level 3 Assets Cash equivalents Money market funds $ 20,092 $ 20,092 $ — Other Assets Embedded conversion option held for investment $ 984 $ — $ 984 In March 2018, the Company received proceeds of $1.9 million from the conversion and sales of convertible notes with carrying value of $1.6 million . Proceeds from the sale of the investment total $2.1 million . The Company expects to receive the remainder of the proceeds in 2019. There were no assets or liabilities measured at fair value on a non-recurring basis as of March 31, 2018 . |
Financial Statement Components
Financial Statement Components | 3 Months Ended |
Mar. 31, 2018 | |
Financial Statement Components [Abstract] | |
Financial Statement Components | Financial Statement Components Cash and cash equivalents consisted of the following (in thousands): March 31, 2018 December 31, 2017 Cash $ 60,544 $ 48,855 Money market funds 20,132 20,092 Cash and cash equivalents $ 80,676 $ 68,947 As of March 31, 2018 , the Company was required to maintain $25.0 million of unrestricted cash and cash equivalents deposited with two lenders in connection with its credit agreement as a compensating balance. See Note 6 . Accounts receivable, net consisted of the following (in thousands): March 31, 2018 December 31, 2017 Trade accounts receivable $ 16,678 $ 17,481 Unbilled trade accounts receivable, net of advance client deposits 1,884 1,600 Allowance for doubtful accounts (28 ) (33 ) Accounts receivable, net $ 18,534 $ 19,048 Prepaid expenses and other current assets consisted of the following (in thousands): March 31, 2018 December 31, 2017 Prepaid expenses $ 4,431 $ 2,437 Other current assets 1,934 2,403 Contract assets 785 — Prepaid expenses and other current assets $ 7,150 $ 4,840 Property and equipment, net consisted of the following (in thousands): March 31, 2018 December 31, 2017 Computer and network equipment $ 49,780 $ 47,195 Computer software 7,387 6,974 Internal-use software development costs 500 500 Furniture and fixtures 1,433 1,282 Leasehold improvements 817 801 Property and equipment 59,917 56,752 Accumulated depreciation and amortization (39,041 ) (36,864 ) Property and equipment, net $ 20,876 $ 19,888 Depreciation and amortization expense associated with property and equipment was $2.2 million and $2.0 million for the three months ended March 31, 2018 and 2017 , respectively. Property and equipment capitalized under capital lease obligations consist primarily of computer and network equipment and was as follows (in thousands): March 31, 2018 December 31, 2017 Gross $ 49,167 $ 46,624 Less: accumulated depreciation and amortization (32,149 ) (30,438 ) Total $ 17,018 $ 16,186 Accrued and other current liabilities consisted of the following (in thousands): March 31, 2018 December 31, 2017 Accrued compensation and benefits $ 11,153 $ 8,657 Accrued expenses 2,979 3,130 Accrued and other current liabilities $ 14,132 $ 11,787 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The components of intangible assets were as follows (in thousands): March 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 2,460 $ (1,565 ) $ 895 $ 2,460 $ (1,478 ) $ 982 Customer relationships 520 (463 ) 57 520 (437 ) 83 Domain names 50 (45 ) 5 50 (42 ) 8 Total $ 3,030 $ (2,073 ) $ 957 $ 3,030 $ (1,957 ) $ 1,073 Amortization expense for intangible assets was $0.1 million for each of the three months ended March 31, 2018 and 2017 . As of March 31, 2018 , the expected future amortization expense for intangible assets was as follows (in thousands): Period Expected Future Amortization Expense 2018 $ 326 2019 351 2020 280 Total $ 957 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 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 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 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 the Company’s 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 SEC). As of March 31, 2018 , 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, 2018 , 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 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, 2018 . FCC Civil Penalty In June 2015, the Company entered into a consent decree with the Federal Communications Commission, or FCC, Enforcement Bureau, 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, 2018 and December 31, 2017 , the outstanding civil penalty payable was $0.2 million and $0.3 million , respectively, of which the net carrying value was $0.2 million and $0.3 million , respectively, and is included as ‘Notes payable’ in the accompanying condensed consolidated balance sheets. As of March 31, 2018 and December 31, 2017 , the Company’s outstanding debt is summarized as follows (in thousands): March 31, 2018 December 31, 2017 Note payable - FCC civil penalty, gross $ 167 $ 333 Less: discount (1 ) (7 ) Note payable, net carrying value 166 326 Revolving line of credit 32,594 32,594 Interest accretion under 2016 line of credit 14 10 Total debt, net carrying value $ 32,774 $ 32,930 Less: current portion of debt * $ (180 ) $ (336 ) Total debt, less current portion ** $ 32,594 $ 32,594 * Included in ‘Notes payable’ in the condensed consolidated balance sheets. ** Included ‘Revolving line of credit’ in the condensed consolidated balance sheets. Maturities of the Company’s outstanding debt as of March 31, 2018 are as follows (in thousands): Period Amount to Mature 2018 $ 167 2019 32,594 Total $ 32,761 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | 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, 2018 and December 31, 2017 , the Company had 57,653,677 and 56,631,647 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, 2018 and December 31, 2017 , the Company had no shares of preferred stock issued and outstanding. Warrants As of March 31, 2018 and December 31, 2017 , the Company had outstanding warrants to purchase 13,013 shares of common stock with a weighted-average exercise price of $5.76 per share. The warrants outstanding as of March 31, 2018 will 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, 2018 Stock options outstanding 3,491 Restricted stock units outstanding 2,427 Shares available for future grant under 2014 Plan 9,272 Shares available for future issuance under ESPP 1,937 Common stock warrants outstanding 13 Total shares of common stock reserved 17,140 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, 2,831,582 additional shares were reserved under the 2014 Plan on January 1, 2018. 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. 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, 2017 . Stock Options A summary of the Company’s stock option activity during the three months ended March 31, 2018 is as follows (in thousands, except years and per share data): Number of Weighted Weighted Aggregate Outstanding as of December 31, 2017 4,047 $ 8.00 Options granted (weighted average grant date fair value of $14.02 per share) 237 30.08 Options exercised (786 ) 6.04 Options forfeited or expired (7 ) 4.71 Outstanding as of March 31, 2018 3,491 $ 9.95 6.5 $ 69,323 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 $29.79 per share as of March 31, 2018 for all in-the-money options outstanding. Restricted Stock Units A summary of the Company’s restricted stock unit (“RSU”) activity during the three months ended March 31, 2018 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, 2017 2,033 $ 7.65 RSUs granted 656 29.48 RSUs vested and released (236 ) 10.02 RSUs forfeited (26 ) 14.32 Outstanding as of March 31, 2018 2,427 $ 17.56 Employee Stock Purchase Plan The Company’s 2014 Employee Stock Purchase Plan (“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, 2017 . 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, 566,316 additional shares were reserved under the ESPP on January 1, 2018. During the three months ended March 31, 2018 , no shares were purchased under the ESPP. Stock-Based Compensation Stock-based compensation expenses for the three months ended March 31, 2018 and 2017 were as follows (in thousands): Three Months Ended March 31, 2018 March 31, 2017 Cost of revenue $ 678 $ 434 Research and development 877 637 Sales and marketing 1,362 928 General and administrative 2,408 1,130 Total stock-based compensation $ 5,325 $ 3,129 As of March 31, 2018 , 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 $ 12,467 $ 41,974 $ 220 Weighted-average amortization period 2.7 years 3.2 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 right 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, 2018 and 2017 were as follows: Stock Options Three Months Ended March 31, 2018 March 31, 2017 Expected term (years) 6.0 6.0 Volatility 45 % 49 % Risk-free interest rate 2.7 % 2.0 % Dividend yield (1) — — (1) The Company has not paid, and does not anticipate paying, cash dividends on its shares of common stock. Accordingly, the expected dividend yield is zero. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 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. As the Company had net losses for the three months ended March 31, 2018 and 2017 , 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, 2018 March 31, 2017 Net loss $ (607 ) $ (5,255 ) Weighted-average shares of common stock outstanding 56,399 53,688 Basic and diluted net loss per share $ (0.01 ) $ (0.10 ) The following securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive (in thousands). March 31, 2018 March 31, 2017 Stock options 3,491 5,127 Restricted stock units 2,427 2,607 Common stock warrants 13 13 Total 5,931 7,747 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes for the three months ended March 31, 2018 and 2017 was approximately $45 thousand and $49 thousand , respectively. The provision for income taxes consisted primarily of foreign income taxes. For the three months ended March 31, 2018 and 2017 , 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, 2018 and December 31, 2017 . 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, 2018 , there were no material changes to the total amount of unrecognized tax benefits. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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, debt agreements (see Note 6 ), 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, 2017 are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 , and did not change materially during the three months ended March 31, 2018 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, 2018 , the total minimum future payment commitments under these capital leases added during the three months ended March 31, 2018 were approximately $3.7 million , of which $1.1 million is due during the remainder of 2018, with the remaining $2.6 million due in 2019 to 2021 . During the three months ended March 31, 2018 , the Company entered into various hosting and telecommunications agreements for terms of 12 to 36 months commencing on various dates in 2018. 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 $2.1 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 is 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 was disputed. The Company subsequently updated its filings and increased the liability related to 2008 through 2012 by $0.5 million , arriving at a new total of $3.9 million in disputed liability. 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 Company had fully paid the promissory note as of January 2017. In January 2017, the FCC’s Wireline Competition Bureau ruled in the Company’s favor with respect to most of the disputed amount. In September 2017, USAC issued a credit to the Company reflecting the FCC’s ruling for the $3.1 million of the $3.9 million in disputed liability. In addition, USAC reversed the interest and penalties related to the disputed liability of $3.1 million . The remaining $0.8 million in dispute involves USAC’s assessment of liability for the period of 2003 through 2007, which was prior to the five year window during which the Company was required to maintain financial records for USF contribution purposes. The Company filed a Request for Review (a form of appeal) of this disputed amount with the FCC’s Wireline Competition Bureau in 2013, which remains pending. If the Request for Review is not resolved in the Company’s favor, it is possible that the Company will be held to the back assessments of $0.8 million , which includes interest and penalties on that amount. As of March 31, 2018 , the accrued liability on the remaining disputed assessments, including interest and penalties for the period of 2003 through 2007, was $0.8 million offset by $0.7 million in other USF credits. 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 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. As of March 31, 2018 and December 31, 2017 , the Company had total accrued liabilities of $1.4 million and $1.5 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 $0.3 million and $0.4 million , respectively, were included in current “Sales tax liability” on the condensed consolidated balance sheets, 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. 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, Corp., 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 a lawsuit captioned Melcher, et al. v. Five9, Inc., et al. , No. 16-cv-02440, in the U.S. District Court for the Southern District of California. In the lawsuit, plaintiff Carl Melcher, a purported former stockholder of Face It, and his related investment entity Melcher Family Limited Partnership, 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 lawsuit 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. To date, the Company has advanced Mr. Fried $62 thousand in connection with this claim. However, the Company disputes that Mr. Fried is entitled to advancement in connection with the Melcher litigation. On July 31, 2017, Mr. Fried filed a complaint against the Company in the Court of Chancery for the State of Delaware, in which he alleges that the Company breached advancement obligations to him. On December 7, 2017, the Delaware Chancery Court stayed Mr. Fried’s advancement lawsuit, in favor of arbitration. On January 9, 2018, the Company received Mr. Fried’s demand for arbitration against the Company with respect to the same matter. Regardless of the outcome of Mr. Fried’s advancement action against the Company, Mr. Fried is required to reimburse the Company for any amounts advanced to him if it is ultimately determined that Mr. Fried is not entitled to indemnification in connection with the Melcher litigation. In addition, the Company believes that it has indemnification rights against the former stockholders of Face It (including Mr. Fried) for all losses that are incurred by the Company 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, 2018 | |
Segment Reporting [Abstract] | |
Geographical Information | 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 presented (in thousands). Three Months Ended March 31, 2018 March 31, 2017 United States $ 55,171 $ 44,358 International 3,734 2,656 Total revenue $ 58,905 $ 47,014 The following table summarizes total property and equipment, net in the respective locations (in thousands). March 31, 2018 December 31, 2017 United States $ 19,091 $ 17,949 International 1,785 1,939 Property and equipment, net $ 20,876 $ 19,888 |
Description of Business and S17
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017 . In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. 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, loss contingencies, including the Company’s accrual for federal fees and sales tax liability, and accrued liabilities. 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 May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers: Topic 606, amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers , which requires the deferral of incremental costs of obtaining a contract with a customer. The Company adopted ASU 2014-09 and its related amendments (collectively “ASC 606”) effective on January 1, 2018 using the modified retrospective method. See Note 2 for disclosure on the impact of adopting this standard. Recent Accounting Pronouncements Not Yet Effective 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 gathering information and evaluating the impact this guidance will have on its consolidated financial statements. There are several other new accounting pronouncements issued by the FASB, which the Company will adopt. However, the Company does not believe any of those accounting pronouncements will have a material impact on its consolidated financial position, operating results or statements of cash flows. |
Revenue Recognition | Revenue Recognition Revenue is recognized when control of the promised services are transferred to customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company generates all of its revenue from contracts with customers. In contracts with multiple performance obligations, it identifies each performance obligation and evaluates whether the performance obligations are distinct within the context of the contract at contract inception. Performance obligations that are not distinct at contract inception are combined. The Company allocates the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation. The Company then looks to how services are transferred to the customer in order to determine the timing of revenue recognition. Most services provided under the Company’s agreements result in the transfer of control over time. The Company’s revenue consists of subscription services and related usage as well as professional services. The Company charges clients subscription fees, usually billed on a monthly basis, for access to the Company’s VCC solution. The monthly subscription fees are primarily based on the number of agent seats, as well as the specific VCC functionalities and applications deployed by the client. Agent seats are defined as the maximum number of named agents allowed to concurrently access the VCC cloud platform. Clients typically have more named agents than agent seats. Multiple named agents may use an agent seat, though not simultaneously. Substantially all of the Company’s clients purchase both subscriptions and related telephony usage. A small percentage of the Company's clients subscribe to its platform but purchase telephony usage directly from a wholesale telecommunications service provider. The Company does not sell telephony usage on a stand-alone basis to any client. The related usage fees are based on the volume of minutes used for inbound and outbound client interactions. The Company also offers bundled plans, generally for smaller deployments, whereby the client is charged a single monthly fixed fee per agent seat that includes both subscription and unlimited usage in the contiguous 48 states and, in some cases, Canada. Professional services revenue is derived primarily from VCC implementations, including application configuration, system integration, optimization, education and training services. Clients are not permitted to take possession of the Company’s software. The Company offers monthly, annual and multiple-year contracts to its clients, generally with 30 days’ notice required for changes in the number of agent seats and sometimes with a minimum number of agent seats required. Larger clients typically choose annual contracts, which generally include an implementation and ramp period of several months. Fixed subscription fees (including bundled plans) are generally billed monthly in advance, while related usage fees are billed in arrears. Support activities include technical assistance for the Company’s solution and upgrades and enhancements to the VCC cloud platform on a when-and-if-available basis, which are not billed separately. The Company generally requires advance deposits from its clients based on estimated usage when such usage is not billed as part of a bundled plan. Any unused portion of the deposit is refundable to the client upon termination of the arrangement, provided all amounts due have been paid. All fees, except usage deposits, are non-refundable Professional services are primarily billed on a fixed-fee basis and are performed by the Company directly or, alternatively, clients may also choose to perform these services themselves or engage their own third-party service providers. The estimation of variable consideration for each performance obligation requires us to make some subjective judgments. In the early stages of our larger contracts, the Company must estimate variable consideration to be included in the transaction fee, to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved, in order to allocate the overall transaction fee on a relative stand-alone selling price basis to its multiple performance obligations. This requires the estimate of unit quantities, especially during the initial ramp period of the contract, during which the Company bills under an ‘actual usage’ model for subscription-related services. The Company recognizes revenue on fixed fee professional services performance obligations based on the proportion of labor hours expended compared to the total hours expected to complete the related performance obligation. The determination of the total labor hours expected to complete the performance obligations involves some judgment, influencing the initial stand-alone selling price estimate as well as the timing of professional services revenue recognition, although this uncertainty is typically resolved in a short time frame. When a contract with a customer is signed, the Company assesses whether collection of the fees under the arrangement is probable. The Company assesses collection based on a number of factors, including past transaction history and the creditworthiness of the client. The Company maintains a revenue reserve for potential credits to be issued in accordance with service level agreements or for other revenue adjustments. The revenue recognition standards include guidance relating to any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not limited to, sales, use, value added and excise taxes. The Company records Universal Service Fund, or USF, contributions and other regulatory costs on a gross basis in its consolidated statements of operations and comprehensive loss and records surcharges and sales, use and excise taxes billed to its clients on a net basis. The cost of gross USF contributions payable to the Universal Service Administrative Company, or USAC, and suppliers is presented as a cost of revenue in the condensed consolidated statements of operations and comprehensive loss. Surcharges and sales, use and excise taxes incurred in excess of amounts billed to the Company’s clients are presented in general and administrative expense in the condensed consolidated statements of operations and comprehensive loss. |
Accounts Receivable | The Company receives payments from customers based upon billing cycles. Invoice payment terms are usually 30 days or less. Accounts receivable are recorded when the right to consideration becomes unconditional. |
Contract Assets | Contract assets include amounts related to the Company’s contractual right to consideration for performance obligations not yet invoiced and is included in prepaid and other current assets in the condensed consolidated balance sheets. The Company had no asset impairment charges related to contract assets in the period. |
Contract Liability | Contract liabilities are comprised of amounts billed in advance of performance under the contract, and are realized with the associated revenue recognized under the contract. |
Deferred Contract Acquisition Costs | In connection with the adoption of ASC 340-40, the Company is required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed and related incremental fringe benefits. Deferred contract acquisition costs are recorded when incurred and are amortized over a customer benefit period of five years. |
ASC 606 Adoption Impact and R18
ASC 606 Adoption Impact and Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Impacts from New Accounting Pronouncements | Select condensed consolidated balance sheet line items, which reflects the adoption impact of the new standard, are as follows: March 31, 2018 (in thousands) As Reported Balances without adoption of ASC 606 Effect of Change Assets: Accounts receivable, net $ 18,534 $ 18,431 $ 103 Prepaid expenses and other current assets 7,150 6,849 301 Deferred contract acquisition costs 24,800 — 24,800 Liabilities: Deferred revenue - current 13,700 14,811 (1,111 ) Shareholders' Equity: Accumulated deficit (151,883 ) (178,198 ) 26,315 Select condensed consolidated statement of operations line items, which reflects the adoption of the new standard, are as follows: Three months ended March 31, 2018 (in thousands, except per share amounts) As Reported Balances without adoption of ASC 606 Effect of Change Revenue $ 58,905 $ 58,152 $ 753 Cost of revenue 24,702 24,457 245 Gross profit 34,203 33,695 508 Sales and marketing 17,478 19,140 (1,662 ) Loss from operations (150 ) (2,320 ) 2,170 Net loss (607 ) (2,777 ) 2,170 Basic and diluted net loss per share $ (0.01 ) $ (0.05 ) $ 0.04 Select condensed consolidated cash flow line items, which reflects the adoption of the new standard, are as follows: Three months ended March 31, 2018 (in thousands) As Reported Balances without adoption of ASC 606 Effect of Change Accounts receivable $ 519 $ 622 $ (103 ) Prepaid expenses and other current assets (1,833 ) (1,532 ) (301 ) Deferred contract acquisition costs (1,662 ) — (1,662 ) Deferred revenue 121 1,232 (1,111 ) Net cash provided by operating activities 7,997 7,997 — |
Schedule of Contract with Customer, Asset and Liability | The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands): March 31, 2018 Receivables $ 18,534 Deferred contract acquisition costs 24,800 Short-term contract assets 785 Short-term contract liabilities (deferred revenue) 13,700 Significant changes in the contract assets and the contract liabilities balances during the period are as follows (in thousands): Three Months Ended March 31, 2018 Contract Contract (1) Revenue recognized that was included in the contract liability (deferred revenue) balance at January 1, 2018 $ — $ (6,440 ) Increases due to invoicing in current period, excluding amounts recognized as revenue during the period — 6,572 Transferred to receivables from contract assets recognized at January 1, 2018 (86 ) — Additional contract assets recognized, net of reclassification to receivables 135 — Performance obligations satisfied in previous periods (transition adjustment) 736 (407 ) (1) Comprised of deferred revenue |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 Total Level 1 Level 3 Assets Cash equivalents Money market funds $ 20,132 $ 20,132 $ — Other Assets Embedded conversion option held for investment $ — $ — $ — December 31, 2017 Total Level 1 Level 3 Assets Cash equivalents Money market funds $ 20,092 $ 20,092 $ — Other Assets Embedded conversion option held for investment $ 984 $ — $ 984 |
Financial Statement Components
Financial Statement Components (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Financial Statement Components [Abstract] | |
Schedule of Cash and Cash Equivalents | Cash and cash equivalents consisted of the following (in thousands): March 31, 2018 December 31, 2017 Cash $ 60,544 $ 48,855 Money market funds 20,132 20,092 Cash and cash equivalents $ 80,676 $ 68,947 |
Schedule of Accounts Receivable | Accounts receivable, net consisted of the following (in thousands): March 31, 2018 December 31, 2017 Trade accounts receivable $ 16,678 $ 17,481 Unbilled trade accounts receivable, net of advance client deposits 1,884 1,600 Allowance for doubtful accounts (28 ) (33 ) Accounts receivable, net $ 18,534 $ 19,048 |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): March 31, 2018 December 31, 2017 Prepaid expenses $ 4,431 $ 2,437 Other current assets 1,934 2,403 Contract assets 785 — Prepaid expenses and other current assets $ 7,150 $ 4,840 |
Schedule of Property and Equipment | Property and equipment, net consisted of the following (in thousands): March 31, 2018 December 31, 2017 Computer and network equipment $ 49,780 $ 47,195 Computer software 7,387 6,974 Internal-use software development costs 500 500 Furniture and fixtures 1,433 1,282 Leasehold improvements 817 801 Property and equipment 59,917 56,752 Accumulated depreciation and amortization (39,041 ) (36,864 ) Property and equipment, net $ 20,876 $ 19,888 |
Schedule of Capital Leased Property and Equipment | Property and equipment capitalized under capital lease obligations consist primarily of computer and network equipment and was as follows (in thousands): March 31, 2018 December 31, 2017 Gross $ 49,167 $ 46,624 Less: accumulated depreciation and amortization (32,149 ) (30,438 ) Total $ 17,018 $ 16,186 |
Schedule of Accrued and Other Current Liabilities | Accrued and other current liabilities consisted of the following (in thousands): March 31, 2018 December 31, 2017 Accrued compensation and benefits $ 11,153 $ 8,657 Accrued expenses 2,979 3,130 Accrued and other current liabilities $ 14,132 $ 11,787 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The components of intangible assets were as follows (in thousands): March 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 2,460 $ (1,565 ) $ 895 $ 2,460 $ (1,478 ) $ 982 Customer relationships 520 (463 ) 57 520 (437 ) 83 Domain names 50 (45 ) 5 50 (42 ) 8 Total $ 3,030 $ (2,073 ) $ 957 $ 3,030 $ (1,957 ) $ 1,073 |
Schedule of Expected Future Amortization Expense of Intangible Assets | As of March 31, 2018 , the expected future amortization expense for intangible assets was as follows (in thousands): Period Expected Future Amortization Expense 2018 $ 326 2019 351 2020 280 Total $ 957 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | As of March 31, 2018 and December 31, 2017 , the Company’s outstanding debt is summarized as follows (in thousands): March 31, 2018 December 31, 2017 Note payable - FCC civil penalty, gross $ 167 $ 333 Less: discount (1 ) (7 ) Note payable, net carrying value 166 326 Revolving line of credit 32,594 32,594 Interest accretion under 2016 line of credit 14 10 Total debt, net carrying value $ 32,774 $ 32,930 Less: current portion of debt * $ (180 ) $ (336 ) Total debt, less current portion ** $ 32,594 $ 32,594 * Included in ‘Notes payable’ in the condensed consolidated balance sheets. ** Included ‘Revolving line of credit’ in the condensed consolidated balance sheets. |
Schedule of Maturities of Debt | Maturities of the Company’s outstanding debt as of March 31, 2018 are as follows (in thousands): Period Amount to Mature 2018 $ 167 2019 32,594 Total $ 32,761 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 Stock options outstanding 3,491 Restricted stock units outstanding 2,427 Shares available for future grant under 2014 Plan 9,272 Shares available for future issuance under ESPP 1,937 Common stock warrants outstanding 13 Total shares of common stock reserved 17,140 |
Schedule of Stock Option Activity | A summary of the Company’s stock option activity during the three months ended March 31, 2018 is as follows (in thousands, except years and per share data): Number of Weighted Weighted Aggregate Outstanding as of December 31, 2017 4,047 $ 8.00 Options granted (weighted average grant date fair value of $14.02 per share) 237 30.08 Options exercised (786 ) 6.04 Options forfeited or expired (7 ) 4.71 Outstanding as of March 31, 2018 3,491 $ 9.95 6.5 $ 69,323 |
Schedule of RSU Activity | A summary of the Company’s restricted stock unit (“RSU”) activity during the three months ended March 31, 2018 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, 2017 2,033 $ 7.65 RSUs granted 656 29.48 RSUs vested and released (236 ) 10.02 RSUs forfeited (26 ) 14.32 Outstanding as of March 31, 2018 2,427 $ 17.56 |
Schedule of Stock-based Compensation Expense | Stock-based compensation expenses for the three months ended March 31, 2018 and 2017 were as follows (in thousands): Three Months Ended March 31, 2018 March 31, 2017 Cost of revenue $ 678 $ 434 Research and development 877 637 Sales and marketing 1,362 928 General and administrative 2,408 1,130 Total stock-based compensation $ 5,325 $ 3,129 |
Schedule of Unrecognized Compensation Expense | As of March 31, 2018 , 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 $ 12,467 $ 41,974 $ 220 Weighted-average amortization period 2.7 years 3.2 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, 2018 and 2017 were as follows: Stock Options Three Months Ended March 31, 2018 March 31, 2017 Expected term (years) 6.0 6.0 Volatility 45 % 49 % Risk-free interest rate 2.7 % 2.0 % Dividend yield (1) — — (1) The Company has not paid, and does not anticipate paying, cash dividends on its shares of common stock. Accordingly, the expected dividend yield is zero. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 March 31, 2017 Net loss $ (607 ) $ (5,255 ) Weighted-average shares of common stock outstanding 56,399 53,688 Basic and diluted net loss per share $ (0.01 ) $ (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 because their effect would have been anti-dilutive (in thousands). March 31, 2018 March 31, 2017 Stock options 3,491 5,127 Restricted stock units 2,427 2,607 Common stock warrants 13 13 Total 5,931 7,747 |
Geographical Information (Table
Geographical Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 presented (in thousands). Three Months Ended March 31, 2018 March 31, 2017 United States $ 55,171 $ 44,358 International 3,734 2,656 Total revenue $ 58,905 $ 47,014 The following table summarizes total property and equipment, net in the respective locations (in thousands). March 31, 2018 December 31, 2017 United States $ 19,091 $ 17,949 International 1,785 1,939 Property and equipment, net $ 20,876 $ 19,888 |
ASC 606 Adoption Impact and R26
ASC 606 Adoption Impact and Revenue from Contracts with Customers - Narrative (Details) - USD ($) | Jan. 01, 2018 | Mar. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Contract acquisition costs expensed as incurred amount | $ 500,000 | |
Retained Earnings | ASU 2014-09 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Impact on opening accumulated deficit from adopting the new accounting standard | $ 24,100,000 | |
Retained Earnings | ASU 2014-09, timing of revenue recognition | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Impact on opening accumulated deficit from adopting the new accounting standard | 1,000,000 | |
Retained Earnings | ASC 340-40 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Impact on opening accumulated deficit from adopting the new accounting standard | 23,100,000 | |
Contract acquisition costs | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Capitalized contract cost amortization period | 5 years | |
Capitalized contract cost, gross | $ 23,100,000 | |
Amortization of capitalized contract cost | $ 1,900,000 | |
Capitalized contract cost impairment loss | $ 0 |
ASC 606 Adoption Impact and R27
ASC 606 Adoption Impact and Revenue from Contracts with Customers - ASC 606 Impact on Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Accounts receivable, net | $ 18,534 | $ 19,048 |
Prepaid expenses and other current assets | 7,150 | 4,840 |
Prepaid expenses and other current assets | 24,800 | |
Deferred revenue | 13,700 | 13,975 |
Accumulated deficit | (151,883) | $ (175,421) |
Balances without adoption of ASC 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Accounts receivable, net | 18,431 | |
Prepaid expenses and other current assets | 6,849 | |
Prepaid expenses and other current assets | 0 | |
Deferred revenue | 14,811 | |
Accumulated deficit | (178,198) | |
Effect of Change Higher (Lower) | ASU 2014-09 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Accounts receivable, net | 103 | |
Prepaid expenses and other current assets | 301 | |
Prepaid expenses and other current assets | 24,800 | |
Deferred revenue | (1,111) | |
Accumulated deficit | $ 26,315 |
ASC 606 Adoption Impact and R28
ASC 606 Adoption Impact and Revenue from Contracts with Customers - ASC 606 Impact on Condensed Consolidated Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | $ 58,905 | $ 47,014 |
Cost of revenue | 24,702 | 19,971 |
Gross profit | 34,203 | 27,043 |
Sales and marketing | 17,478 | 15,778 |
Loss from operations | (150) | (4,442) |
Net loss | $ (607) | $ (5,255) |
Basic and diluted net loss per share (in USD per share) | $ (0.01) | $ (0.10) |
Balances without adoption of ASC 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | $ 58,152 | |
Cost of revenue | 24,457 | |
Gross profit | 33,695 | |
Sales and marketing | 19,140 | |
Loss from operations | (2,320) | |
Net loss | $ (2,777) | |
Basic and diluted net loss per share (in USD per share) | $ (0.05) | |
Effect of Change Higher (Lower) | ASU 2014-09 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue | $ 753 | |
Cost of revenue | 245 | |
Gross profit | 508 | |
Sales and marketing | (1,662) | |
Loss from operations | 2,170 | |
Net loss | $ 2,170 | |
Basic and diluted net loss per share (in USD per share) | $ 0.04 |
ASC 606 Adoption Impact and R29
ASC 606 Adoption Impact and Revenue from Contracts with Customers - ASC 606 Impact on Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Accounts receivable | $ 519 | $ (1,595) |
Prepaid expenses and other current assets | (1,833) | (2,129) |
Deferred contract acquisition costs | (1,662) | 0 |
Deferred revenue | 121 | 909 |
Net cash provided by operating activities | 7,997 | $ 159 |
Balances without adoption of ASC 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Accounts receivable | 622 | |
Prepaid expenses and other current assets | (1,532) | |
Deferred contract acquisition costs | 0 | |
Deferred revenue | 1,232 | |
Net cash provided by operating activities | 7,997 | |
Effect of Change Higher (Lower) | ASU 2014-09 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Accounts receivable | (103) | |
Prepaid expenses and other current assets | (301) | |
Deferred contract acquisition costs | (1,662) | |
Deferred revenue | (1,111) | |
Net cash provided by operating activities | $ 0 |
ASC 606 Adoption Impact and R30
ASC 606 Adoption Impact and Revenue from Contracts with Customers - Schedule of Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 18,534 | $ 19,048 |
Prepaid expenses and other current assets | 24,800 | |
Short-term contract assets | 785 | 0 |
Short-term contract liabilities (deferred revenue) | 13,700 | $ 13,975 |
Contract Assets Increase (Decrease) | ||
Transferred to receivables from contract assets recognized at January 1, 2018 | (86) | |
Additional contract assets recognized, net of reclassification to receivables | 135 | |
Performance obligations satisfied in previous periods (transition adjustment) | 736 | |
Contract Liabilities | ||
Revenue recognized that was included in the contract liability (deferred revenue) balance at January 1, 2018 | (6,440) | |
Increases due to invoicing in current period, excluding amounts recognized as revenue during the period | 6,572 | |
Performance obligations satisfied in previous periods (transition adjustment) | $ (407) |
ASC 606 Adoption Impact and R31
ASC 606 Adoption Impact and Revenue from Contracts with Customers - Remaining Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 56.5 |
Percentage of remaining performance obligations expected to be recognized over the next 24 months | 75.00% |
Remaining performance obligations recognition period | 2 years |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets Carried at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Money market funds | ||
Assets | ||
Cash equivalents | $ 20,132 | $ 20,092 |
Money market funds | Level 1 | ||
Assets | ||
Cash equivalents | 20,132 | 20,092 |
Money market funds | Level 3 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Embedded conversion option held for investment | ||
Assets | ||
Other Assets | 0 | 984 |
Embedded conversion option held for investment | Level 1 | ||
Assets | ||
Other Assets | 0 | 0 |
Embedded conversion option held for investment | Level 3 | ||
Assets | ||
Other Assets | $ 0 | $ 984 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | ||
Proceeds from sale of convertible notes held for investment | $ 1,923,000 | $ 0 |
Carrying value of convertible notes sold | 1,600,000 | |
Total proceeds from sale of convertible notes receivable | 2,100,000 | |
Assets measured at fair value on nonrecurring basis | 0 | |
Liabilities measured at fair value on nonrecurring basis | $ 0 |
Financial Statement Component34
Financial Statement Components - Schedule of Cash and Cash Equivalents (Details) $ in Thousands | Mar. 31, 2018USD ($)lender | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Financial Statement Components [Abstract] | ||||
Cash | $ 60,544 | $ 48,855 | ||
Money market funds | 20,132 | 20,092 | ||
Cash and cash equivalents | 80,676 | $ 68,947 | $ 56,452 | $ 58,122 |
Revolving Credit Facility | ||||
Cash and Cash Equivalents [Line Items] | ||||
Unrestricted cash required to be deposited with lenders | $ 25,000 | |||
Number of lenders where compensating balance deposited | lender | 2 |
Financial Statement Component35
Financial Statement Components - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Accounts Receivable [Line Items] | ||
Allowance for doubtful accounts | $ (28) | $ (33) |
Accounts receivable, net | 18,534 | 19,048 |
Trade accounts receivable | ||
Accounts Receivable [Line Items] | ||
Trade accounts receivable | 16,678 | 17,481 |
Unbilled trade accounts receivable, net of advance client deposits | ||
Accounts Receivable [Line Items] | ||
Trade accounts receivable | $ 1,884 | $ 1,600 |
Financial Statement Component36
Financial Statement Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Financial Statement Components [Abstract] | ||
Prepaid expenses | $ 4,431 | $ 2,437 |
Other current assets | 1,934 | 2,403 |
Contract assets | 785 | 0 |
Prepaid expenses and other current assets | $ 7,150 | $ 4,840 |
Financial Statement Component37
Financial Statement Components - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 59,917 | $ 56,752 | |
Accumulated depreciation and amortization | (39,041) | (36,864) | |
Property and equipment, net | 20,876 | 19,888 | |
Depreciation expense | 2,200 | $ 2,000 | |
Computer and network equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 49,780 | 47,195 | |
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 7,387 | 6,974 | |
Internal-use software development costs | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 500 | 500 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 1,433 | 1,282 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 817 | $ 801 |
Financial Statement Component38
Financial Statement Components - Schedule of Capital Leased Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Financial Statement Components [Abstract] | ||
Gross | $ 49,167 | $ 46,624 |
Less: accumulated depreciation and amortization | (32,149) | (30,438) |
Total | $ 17,018 | $ 16,186 |
Financial Statement Component39
Financial Statement Components - Schedule of Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Financial Statement Components [Abstract] | ||
Accrued compensation and benefits | $ 11,153 | $ 8,657 |
Accrued expenses | 2,979 | 3,130 |
Accrued and other current liabilities | $ 14,132 | $ 11,787 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Acquired Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 3,030 | $ 3,030 |
Accumulated Amortization | (2,073) | (1,957) |
Total | 957 | 1,073 |
Developed technology | ||
Acquired Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 2,460 | 2,460 |
Accumulated Amortization | (1,565) | (1,478) |
Total | 895 | 982 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 520 | 520 |
Accumulated Amortization | (463) | (437) |
Total | 57 | 83 |
Domain names | ||
Acquired Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 50 | 50 |
Accumulated Amortization | (45) | (42) |
Total | $ 5 | $ 8 |
Intangible Assets - Schedule 41
Intangible Assets - Schedule of Expected Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 326 | |
2,019 | 351 | |
2,020 | 280 | |
Total | $ 957 | $ 1,073 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
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) - Revolving Credit Facility - USD ($) | Aug. 01, 2016 | Mar. 31, 2018 |
Line of Credit Facility [Line Items] | ||
Unrestricted cash required to be deposited with lenders | $ 25,000,000 | |
Line of Credit | Loan and Security Agreement 2016 | ||
Line of Credit Facility [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 | |
Payments of debt issuance costs | $ 200,000 | |
Debt issuance costs, amortization period | 3 years | |
Prime Rate | Line of Credit | Loan and Security Agreement 2016 | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread | 0.50% | |
Percentage increase in interest rate if adjusted EBITDA is negative at the end of the quarter | 0.25% |
Debt - FCC Civil Penalty (Detai
Debt - FCC Civil Penalty (Details) $ in Thousands | 1 Months Ended | |||
Jun. 30, 2015USD ($)payment | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2014USD ($) | |
Debt Instrument [Line Items] | ||||
Debt, gross | $ 32,761 | |||
Total debt, net carrying value | 32,774 | $ 32,930 | ||
FCC Civil Penalty | ||||
Debt Instrument [Line Items] | ||||
Accrued civil penalty liability | $ 2,000 | |||
Notes Payable | ||||
Debt Instrument [Line Items] | ||||
Debt, gross | 167 | 333 | ||
Discount on debt | 1 | 7 | ||
Total debt, net carrying value | 166 | 326 | ||
Notes Payable | FCC Civil Penalty | ||||
Debt Instrument [Line Items] | ||||
Debt, gross | $ 2,000 | 200 | 300 | |
Debt instrument, number of quarterly payments | payment | 12 | |||
Debt instrument, stated interest rate | 12.75% | |||
Discount on debt | $ 300 | |||
Total debt, net carrying value | $ 1,700 | $ 200 | $ 300 |
Debt - Schedule of Outstanding
Debt - Schedule of Outstanding Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Debt, gross | $ 32,761 | |
Total debt, net carrying value | 32,774 | $ 32,930 |
Less: current portion of debt | (180) | (336) |
Total debt, less current portion | 32,594 | 32,594 |
Notes Payable | ||
Debt Instrument [Line Items] | ||
Debt, gross | 167 | 333 |
Less: discount | (1) | (7) |
Total debt, net carrying value | 166 | 326 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Debt, gross | 32,594 | 32,594 |
Interest accretion under 2016 line of credit | $ 14 | $ 10 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Debt (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 167 |
2,019 | 32,594 |
Total | $ 32,761 |
Stockholders' Equity - Capital
Stockholders' Equity - Capital Structure (Details) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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) | 57,653,677 | 56,631,647 |
Common Stock, shares outstanding (in shares) | 57,653,677 | 56,631,647 |
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, 2018 | Dec. 31, 2017 | |
Class of Warrant or Right | ||
Warrant expiration date | 2023-10 | |
Common Stock | ||
Class of Warrant or Right | ||
Warrants outstanding (in shares) | 13,013 | 13,013 |
Outstanding warrants exercise price, weighted-average (in USD per share) | $ 5.76 | $ 5.76 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Reserved for Future Issuance (Details) shares in Thousands | Mar. 31, 2018shares |
Class of Stock | |
Common stock reserved for future issuance (in shares) | 17,140 |
Stock options | |
Class of Stock | |
Common stock reserved for future issuance (in shares) | 3,491 |
Restricted stock units | |
Class of Stock | |
Common stock reserved for future issuance (in shares) | 2,427 |
ESPP | |
Class of Stock | |
Common stock reserved for future issuance (in shares) | 1,937 |
Common stock warrants outstanding | |
Class of Stock | |
Common stock reserved for future issuance (in shares) | 13 |
2014 Plan | |
Class of Stock | |
Common stock reserved for future issuance (in shares) | 9,272 |
Stockholders' Equity - Equity I
Stockholders' Equity - Equity Incentive Plans (Details) - 2014 Plan - shares | Jan. 01, 2018 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Number of shares authorized for issuance | 5,300,000 | |
Automatic annual increase in common stock reserved for issuance, percentage | 5.00% | |
Automatic annual increase in common stock reserved for issuance, shares | 2,831,582 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Class of Stock | |
Closing market price of common stock (in USD per share) | $ 29.79 |
Stock options | |
Options Outstanding [Roll Forward] | |
Outstanding, beginning balance (in shares) | shares | 4,047 |
Options granted (weighted average grant date fair value of $14.02 per share) (in shares) | shares | 237 |
Options exercised (in shares) | shares | (786) |
Options forfeited or expired (in shares) | shares | (7) |
Outstanding, ending balance (in shares) | shares | 3,491 |
Options Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding, beginning balance, weighted average exercise price (in USD per share) | $ 8 |
Options granted, weighted average exercise price (in USD per share) | 30.08 |
Options exercised, weighted average exercise price (in USD per share) | 6.04 |
Options forfeited or expired, weighted average exercise price (in USD per share) | 4.71 |
Outstanding, ending balance, weighted average exercise price (in USD per share) | 9.95 |
Weighted average grant date fair value, options granted (in USD per share) | $ 14.02 |
Outstanding, ending balance, weighted average remaining contractual life | 6 years 6 months |
Outstanding, ending balance, aggregate intrinsic value | $ | $ 69,323 |
Stockholders' Equity - RSU Acti
Stockholders' Equity - RSU Activity (Details) - Restricted stock units shares in Thousands | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Shares | |
Outstanding, beginning balance (in shares) | shares | 2,033 |
RSUs granted (in shares) | shares | 656 |
RSUs vested and released (in shares) | shares | (236) |
RSUs forfeited (in shares) | shares | (26) |
Outstanding, ending balance (in shares) | shares | 2,427 |
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 | 29.48 |
RSUs vested and released, weighted average grant date fair value (in USD per share) | $ / shares | 10.02 |
RSUs forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 14.32 |
Outstanding, ending balance, weighted-average grant date fair value per share (in USD per share) | $ / shares | $ 17.56 |
Stockholders' Equity - ESPP (De
Stockholders' Equity - ESPP (Details) - ESPP - shares | 3 Months Ended | ||
Mar. 31, 2018 | Jan. 01, 2018 | Apr. 03, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Common stock reserved for future issuance (in shares) | 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 | 566,316 | ||
Purchases made under the ESPP | 0 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock-based Compensation Expense | ||
Stock-based compensation expense | $ 5,325 | $ 3,129 |
Cost of revenue | ||
Stock-based Compensation Expense | ||
Stock-based compensation expense | 678 | 434 |
Research and development | ||
Stock-based Compensation Expense | ||
Stock-based compensation expense | 877 | 637 |
Sales and marketing | ||
Stock-based Compensation Expense | ||
Stock-based compensation expense | 1,362 | 928 |
General and administrative | ||
Stock-based Compensation Expense | ||
Stock-based compensation expense | 2,408 | $ 1,130 |
Stock options | ||
Stock-based Compensation Expense | ||
Unrecognized stock-based compensation expense | $ 12,467 | |
Weighted-average amortization period | 2 years 8 months 12 days | |
Restricted stock units | ||
Stock-based Compensation Expense | ||
Unrecognized stock-based compensation expense | $ 41,974 | |
Weighted-average amortization period | 3 years 2 months 12 days | |
ESPP | ||
Stock-based Compensation Expense | ||
Unrecognized stock-based compensation expense | $ 220 | |
Weighted-average amortization period | 1 month 6 days |
Stockholders' Equity - Valuatio
Stockholders' Equity - Valuation Assumptions (Details) - Stock options | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Class of Stock | ||
Expected term (years) | 6 years | 6 years |
Volatility | 45.00% | 49.00% |
Risk-free interest rate | 2.70% | 2.00% |
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, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (607) | $ (5,255) |
Weighted-average shares of common stock outstanding (in shares) | 56,399 | 53,688 |
Basic and diluted (in USD per share) | $ (0.01) | $ (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, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive securities excluded from calculation of diluted net loss per share | 5,931 | 7,747 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive securities excluded from calculation of diluted net loss per share | 3,491 | 5,127 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive securities excluded from calculation of diluted net loss per share | 2,427 | 2,607 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive securities excluded from calculation of diluted net loss per share | 13 | 13 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 45 | $ 49 |
Commitments and Contingencies -
Commitments and Contingencies - Commitments (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Capital lease obligations | |
Other Commitments [Line Items] | |
Capital lease future payment obligations incurred | $ 3.7 |
Capital lease future minimum payments, remainder of 2018 | 1.1 |
Capital lease future minimum payments, due after 2018 | 2.6 |
Hosting and telecommunications agreement | |
Other Commitments [Line Items] | |
Total minimum future payment commitments for various agreements added during the quarter | $ 2.1 |
Minimum | Hosting and telecommunications agreement | |
Other Commitments [Line Items] | |
Period for various agreements | 12 months |
Maximum | Hosting and telecommunications agreement | |
Other Commitments [Line Items] | |
Period for various agreements | 36 months |
Commitments and Contingencies60
Commitments and Contingencies - Universal Services Fund Liability (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Jul. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2012 | |
Loss Contingencies [Line Items] | ||||||
Accrued federal fees | $ 1,331 | $ 1,151 | ||||
Debt, gross | 32,761 | |||||
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 | |||||
Payments | $ 600 | |||||
2003 through 2012 | Disputed portion | USF obligations | ||||||
Loss Contingencies [Line Items] | ||||||
Accrued federal fees | $ 3,900 | $ 3,400 | ||||
Disputed liability related to the reversal of interest and penalties | $ 3,100 | |||||
USF credits | 3,100 | |||||
Year 2003 To Year 2007 | Disputed portion | USF obligations | ||||||
Loss Contingencies [Line Items] | ||||||
Accrued federal fees | 800 | $ 800 | ||||
2008 through 2012 | Disputed portion | USF obligations | ||||||
Loss Contingencies [Line Items] | ||||||
Increase (decrease) in accrual federal fees | $ 500 | |||||
Promissory Note | USF obligations | ||||||
Loss Contingencies [Line Items] | ||||||
Debt, gross | $ 4,100 | |||||
Universal Services Fund | ||||||
Loss Contingencies [Line Items] | ||||||
USF credits | $ 700 |
Commitments and Contingencies61
Commitments and Contingencies - State and Local Taxes and Surcharges (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2015USD ($)state | Dec. 31, 2017USD ($) | |
Loss Contingencies [Line Items] | ||||
General and administrative | $ 9,103 | $ 8,860 | ||
Accrued sales tax liability, current | 1,097 | $ 1,326 | ||
Contingent sales tax liabilities | ||||
Loss Contingencies [Line Items] | ||||
Number of states with sales taxes liability | state | 4 | |||
General and administrative | $ 600 | |||
Sales tax liability | 1,400 | 1,500 | ||
Accrued sales tax liability, current | $ 300 | $ 400 |
Commitments and Contingencies62
Commitments and Contingencies - Legal Matters (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Indemnification Agreement | |
Loss Contingencies [Line Items] | |
Estimate of possible loss | $ 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, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets | |||
Revenue | $ 58,905 | $ 47,014 | |
Property and equipment, net | 20,876 | $ 19,888 | |
United States | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | 55,171 | 44,358 | |
Property and equipment, net | 19,091 | 17,949 | |
International | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | 3,734 | $ 2,656 | |
Property and equipment, net | $ 1,785 | $ 1,939 |