Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36383 | |
Entity Registrant Name | Five9, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-3394123 | |
Entity Address, Address Line One | 3001 Bishop Drive | |
Entity Address, Address Line Two | Suite 350 | |
Entity Address, City or Town | San Ramon | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94583 | |
City Area Code | 925 | |
Local Phone Number | 201-2000 | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | FIVN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 71,176,473 | |
Entity Central Index Key | 0001288847 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 141,359 | $ 180,520 |
Marketable investments | 488,381 | 433,743 |
Accounts receivable, net | 88,085 | 87,494 |
Prepaid expenses and other current assets | 32,018 | 29,711 |
Deferred contract acquisition costs, net | 50,566 | 47,242 |
Total current assets | 800,409 | 778,710 |
Property and equipment, net | 101,057 | 101,221 |
Operating lease right-of-use assets | 45,339 | 44,120 |
Intangible assets, net | 25,346 | 28,192 |
Goodwill | 165,420 | 165,420 |
Marketable investments | 13,498 | 885 |
Other assets | 15,240 | 11,057 |
Deferred contract acquisition costs, net — less current portion | 119,799 | 114,880 |
Total assets | 1,286,108 | 1,244,485 |
Current liabilities: | ||
Accounts payable | 22,461 | 23,629 |
Accrued and other current liabilities | 62,196 | 53,092 |
Operating lease liabilities | 11,739 | 10,626 |
Accrued federal fees | 3,360 | 2,471 |
Sales tax liabilities | 2,209 | 2,973 |
Deferred revenue | 58,082 | 57,816 |
Convertible senior notes | 169 | 169 |
Total current liabilities | 160,216 | 150,776 |
Convertible senior notes — less current portion | 739,284 | 738,376 |
Sales tax liabilities — less current portion | 906 | 899 |
Operating lease liabilities — less current portion | 41,703 | 41,389 |
Other long-term liabilities | 4,913 | 3,080 |
Total liabilities | 947,022 | 934,520 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Common stock | 72 | 71 |
Additional paid-in capital | 690,309 | 635,668 |
Accumulated other comprehensive loss | (961) | (2,688) |
Accumulated deficit | (350,334) | (323,086) |
Total stockholders’ equity | 339,086 | 309,965 |
Total liabilities and stockholders’ equity | $ 1,286,108 | $ 1,244,485 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 218,439 | $ 182,777 |
Cost of revenue | 104,756 | 88,867 |
Gross profit | 113,683 | 93,910 |
Operating expenses: | ||
Research and development | 38,108 | 35,824 |
Sales and marketing | 76,314 | 64,611 |
General and administrative | 28,258 | 24,314 |
Total operating expenses | 142,680 | 124,749 |
Loss from operations | (28,997) | (30,839) |
Other (expense) income, net: | ||
Interest expense | (1,845) | (1,870) |
Interest income and other | 4,121 | 845 |
Total other income (expense), net | 2,276 | (1,025) |
Loss before income taxes | (26,721) | (31,864) |
Provision for income taxes | 527 | 2,256 |
Net loss | $ (27,248) | $ (34,120) |
Net loss per share: | ||
Basic (in USD per share) | $ (0.38) | $ (0.49) |
Diluted (in USD per share) | $ (0.38) | $ (0.49) |
Shares used in computing net loss per share: | ||
Basic (in shares) | 71,259 | 68,974 |
Diluted (in shares) | 71,259 | 68,974 |
Comprehensive Loss: | ||
Net loss | $ (27,248) | $ (34,120) |
Other comprehensive income (loss) | 1,727 | (3,083) |
Comprehensive loss | $ (25,521) | $ (37,203) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 68,488 | ||||
Beginning balance at Dec. 31, 2021 | $ 211,132 | $ 68 | $ 439,787 | $ (287) | $ (228,436) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon partial conversion of the 2023 convertible senior notes (in shares) | 540 | ||||
Issuance of common stock upon partial conversion of the 2023 convertible senior notes | (244) | (244) | |||
Partial unwind of capped calls and retirement of common stock related to the 2023 convertible senior notes (in shares) | (111) | ||||
Partial unwind of capped calls and retirement of common stock related to the 2023 convertible senior notes | 2 | 2 | |||
Issuance of common stock upon exercise of stock options (in shares) | 281 | ||||
Issuance of common stock upon exercise of stock options | 1,277 | $ 1 | 1,276 | ||
Issuance of common stock upon vesting of restricted stock units (in shares) | 323 | ||||
Issuance of common stock upon vesting of restricted stock units | 1 | $ 1 | |||
Stock-based compensation | 39,394 | 39,394 | |||
Other comprehensive income (loss) | (3,083) | (3,083) | |||
Net loss | (34,120) | (34,120) | |||
Ending balance (in shares) at Mar. 31, 2022 | 69,521 | ||||
Ending balance at Mar. 31, 2022 | 214,359 | $ 70 | 480,215 | (3,370) | (262,556) |
Beginning balance (in shares) at Dec. 31, 2022 | 71,047 | ||||
Beginning balance at Dec. 31, 2022 | 309,965 | $ 71 | 635,668 | (2,688) | (323,086) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options (in shares) | 139 | ||||
Issuance of common stock upon exercise of stock options | 3,125 | 3,125 | |||
Issuance of common stock upon vesting of restricted stock units (in shares) | 358 | ||||
Issuance of common stock upon vesting of restricted stock units | 1 | $ 1 | |||
Stock-based compensation | 51,516 | 51,516 | |||
Other comprehensive income (loss) | 1,727 | 1,727 | |||
Net loss | (27,248) | (27,248) | |||
Ending balance (in shares) at Mar. 31, 2023 | 71,544 | ||||
Ending balance at Mar. 31, 2023 | $ 339,086 | $ 72 | $ 690,309 | $ (961) | $ (350,334) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (27,248) | $ (34,120) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 11,347 | 10,795 |
Amortization of operating lease right-of-use assets | 2,934 | 2,403 |
Amortization of deferred contract acquisition costs | 12,423 | 8,678 |
(Accretion of discount) amortization of premium on marketable investments | (1,863) | 700 |
Provision for credit losses | 317 | 222 |
Stock-based compensation | 50,743 | 39,394 |
Amortization of discount and issuance costs on convertible senior notes | 908 | 930 |
Deferred taxes | 59 | 1,889 |
Other | 439 | 470 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (908) | 5,566 |
Prepaid expenses and other current assets | (2,307) | (2,162) |
Deferred contract acquisition costs | (20,665) | (20,160) |
Other assets | (4,231) | 234 |
Accounts payable | 1,557 | 11,133 |
Accrued and other current liabilities | 7,599 | 2,096 |
Accrued federal fees and sales tax liabilities | 133 | (1,239) |
Deferred revenue | 181 | 2,659 |
Other liabilities | 1,994 | (764) |
Net cash provided by operating activities | 33,412 | 28,724 |
Cash flows from investing activities: | ||
Purchases of marketable investments | (140,892) | (105,277) |
Proceeds from sales of marketable investments | 0 | 600 |
Proceeds from maturities of marketable investments | 76,940 | 130,821 |
Purchases of property and equipment | (9,928) | (12,398) |
Capitalization of software development costs | (1,806) | (569) |
Cash paid for an equity investment in a privately-held company | 0 | (2,000) |
Net cash (used in) provided by investing activities | (75,686) | 11,177 |
Cash flows from financing activities: | ||
Repurchase of a portion of 2023 convertible senior notes, net of costs | 0 | (31,905) |
Proceeds from exercise of common stock options | 3,125 | 1,277 |
Net cash provided by (used in) financing activities | 3,125 | (30,628) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (39,149) | 9,273 |
Cash, cash equivalents and restricted cash: | ||
Beginning of period | 180,987 | 90,878 |
End of period | 141,838 | 100,151 |
Supplemental disclosures of cash flow data: | ||
Cash paid for interest | 2 | 0 |
Cash paid for income taxes | 32 | 337 |
Non-cash investing and financing activities: | ||
Equipment and software purchased and unpaid at period-end | 8,310 | 22,365 |
Stock-based compensation included in capitalized software development costs | 773 | 0 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash to the Condensed Consolidated Balance Sheets | ||
Cash and cash equivalents | 141,359 | 100,151 |
Restricted cash in other assets | 479 | 0 |
Total cash, cash equivalents and restricted cash | $ 141,838 | $ 100,151 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [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, Asia and Australia, 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, 2022. 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 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 and related reserves, as well as the fair value of liabilities assumed through business combinations. 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 There have been no material changes from the significant accounting policies previously disclosed in Part II, Item 8, of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as filed with the SEC on February 24, 2023. Recent Accounting Pronouncements Not Yet Effective The Company has reviewed or is in the process of evaluating all issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such accounting pronouncements will cause a material impact on its condensed consolidated financial position, operating results or statements of cash flows. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Contract Balances The following table provides information about accounts receivable, net, deferred contract acquisition costs, net, contract assets and contract liabilities from contracts with customers (in thousands): March 31, 2023 December 31, 2022 Accounts receivable, net $ 88,085 $ 87,494 Deferred contract acquisition costs, net: Current $ 50,566 $ 47,242 Non-current 119,799 114,880 Total deferred contract acquisition costs, net $ 170,365 $ 162,122 Contract assets and contract liabilities: Contract assets (included in prepaid expenses and other current assets) $ 3,209 $ 3,401 Contract liabilities (deferred revenue) (58,082) (57,816) Noncurrent contract liabilities (deferred revenue) (included in other long-term liabilities) (1,093) (1,178) Net contract liabilities $ (55,966) $ (55,593) 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 an estimated customer benefit period of five years. The Company’s contract assets consist of unbilled amounts typically resulting from professional services revenue recognition when it exceeds the total amounts billed to the customer. The Company’s contract liabilities consist of advance payments and billings in excess of revenue recognized. In the three months ended March 31, 2023, the Company recognized revenue of $31.4 million related to its contract liabilities at December 31, 2022. Remaining Performance Obligations As of March 31, 2023, 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 $918.3 million. The Company expects to recognize revenue on approximately three-fifths of the remaining performance obligations over the next 24 months, with the balance recognized thereafter. The Company excludes 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 unsatisfied or partially unsatisfied performance obligations. |
Investments and Fair Value Meas
Investments and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Investments and Fair Value Measurements | Investments and Fair Value MeasurementsMarketable Investments The Company’s marketable investments have been classified and accounted for as available-for-sale. The Company’s marketable investments as of March 31, 2023 and December 31, 2022 were as follows (in thousands): March 31, 2023 Short-Term Marketable Investments Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit $ 2,201 $ — $ (8) $ 2,193 U.S. treasury 169,888 35 (668) 169,255 U.S. agency securities 267,338 50 (1,019) 266,369 Commercial paper 35,327 1 (39) 35,289 Municipal bonds 12,719 — (97) 12,622 Corporate bonds 2,663 — (10) 2,653 Total $ 490,136 $ 86 $ (1,841) $ 488,381 March 31, 2023 Long-term Marketable Investments Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. agency securities $ 11,478 $ 14 $ (1) $ 11,491 Corporate bonds 2,013 — (6) 2,007 Total $ 13,491 $ 14 $ (7) $ 13,498 December 31, 2022 Short-Term Marketable Investments Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit $ 747 $ — $ (13) $ 734 U.S. treasury securities 186,776 8 (1,382) 185,402 U.S. agency and government-sponsored securities 197,597 29 (1,660) 195,966 Commercial paper 25,386 — — 25,386 Municipal bonds 22,764 — (145) 22,619 Corporate bonds 3,658 — (22) 3,636 Total $ 436,928 $ 37 $ (3,222) $ 433,743 December 31, 2022 Long-term Marketable Investments Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. agency securities $ 885 $ — $ — $ 885 Total $ 885 $ — $ — $ 885 The following table presents the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than 12 months as of March 31, 2023 and December 31, 2022 (in thousands): March 31, 2023 December 31, 2022 Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Certificates of deposit $ (8) $ 490 $ (13) $ 734 U.S. treasury securities (668) 90,248 (1,382) 126,534 U.S. agency securities (1,020) 203,987 (1,660) 172,458 Commercial paper (39) 28,874 — — Municipal bonds (97) 12,622 (145) 12,623 Corporate bonds (16) 4,660 (22) 3,636 Total $ (1,848) $ 340,881 $ (3,222) $ 315,985 Although the Company had certain available-for-sale debt securities in an unrealized loss position as of March 31, 2023, no impairment loss was recorded since it did not intend to sell them, did not anticipate a need to sell them, and the decline in fair value was not due to any credit-related factors. Fair Value Measurements The Company carries cash equivalents and marketable investments at fair value. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 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 or liabilities. Level 2 — Observable inputs other than Level 1 inputs, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. 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 Company determined the fair value of its Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments. Marketable investments classified within Level 2 of the fair value hierarchy are valued based on other observable inputs, including broker or dealer quotations or alternative pricing sources. When quoted prices in active markets for identical assets or liabilities are not available, the Company relies on non-binding quotes from its investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments, historical pricing trends of a security as relative to its peers. To validate the fair value determination provided by its investment managers, the Company reviews the pricing movement in the context of overall market trends and trading information from its investment managers. The Company performs routine procedures such as comparing prices obtained from independent source to ensure that appropriate fair values are recorded. The following tables set forth the Company’s assets measured at fair value by level within the fair value hierarchy (in thousands): March 31, 2023 Level 1 Level 2 Level 3 Total Assets Cash equivalents Money market funds $ 17,296 $ — $ — $ 17,296 Total cash equivalents $ 17,296 $ — $ — $ 17,296 Marketable investments (short and long term) Certificates of deposit $ — $ 2,193 $ — $ 2,193 U.S. treasury 169,255 — — 169,255 U.S. agency securities and government sponsored securities — 277,860 — 277,860 Commercial paper — 35,289 — 35,289 Municipal bonds — 12,622 — 12,622 Corporate bonds — 4,660 — 4,660 Total marketable investments $ 169,255 $ 332,624 $ — $ 501,879 December 31, 2022 Level 1 Level 2 Level 3 Total Assets Cash equivalents Money market funds $ 37,560 $ — $ — $ 37,560 U.S. treasury securities 19,700 — — 19,700 Total cash equivalents $ 57,260 $ — $ — $ 57,260 Marketable investments (short and long-term) Certificates of deposit $ — $ 734 $ — $ 734 U.S. treasury securities 185,402 — — 185,402 U.S. agency and government-sponsored securities — 196,851 — 196,851 Commercial paper — 25,386 — 25,386 Municipal bonds — 22,619 — 22,619 Corporate bonds — 3,636 — 3,636 Total marketable investments $ 185,402 $ 249,226 $ — $ 434,628 As of March 31, 2023 and December 31, 2022, the estimated fair value of the Company’s outstanding 2023 convertible senior notes was $0.3 million for each of the periods. As of March 31, 2023 and December 31, 2022, the estimated fair value of the Company's outstanding 2025 convertible senior notes was $700.7 million and $687.1 million, respectively. The fair values were determined based on the quoted price of the convertible senior notes in an inactive market on the last trading day of the reporting period and have been classified as Level 2 in the fair value hierarchy. See Note 6 for further information on the Company’s convertible senior notes. In February 2022, the Company made a $2.0 million equity investment in a privately-held company that it does not have the ability to exercise significant influence over. The Company elected the measurement alternative for an equity security without a readily determinable fair value. Accordingly, this investment will be accounted for at its cost minus impairment, if any, and is classified within Level 3. If the Company identifies observable price changes in orderly transactions for such investment or a similar investment, it will measure the investment at fair value as of the date that the observable transactions or events occurred. Except for the $2.0 million equity investment described above, there were no assets or liabilities measured at fair value on a non-recurring basis as of March 31, 2023 and December 31, 2022. The fair value of the Company’s other financial instruments, including accounts receivable, accounts payable and other current liabilities, approximate their carrying value due to the relatively short maturity of those instruments. The carrying amounts of the Company’s operating leases approximate their fair value, which is the present value of expected future cash payments based on assumptions about current interest rates and the creditworthiness of the Company. |
Financial Statement Components
Financial Statement Components | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Statement Components | Financial Statement Components Cash and cash equivalents consisted of the following (in thousands): March 31, 2023 December 31, 2022 Cash $ 124,063 $ 123,260 Money market funds 17,296 37,560 U.S. treasury — 19,700 Total cash and cash equivalents $ 141,359 $ 180,520 Accounts receivable, net consisted of the following (in thousands): March 31, 2023 December 31, 2022 Trade accounts receivable $ 77,712 $ 77,621 Unbilled trade accounts receivable, net of advance client deposits 10,614 10,135 Allowance for credit losses (241) (262) Accounts receivable, net $ 88,085 $ 87,494 Prepaid expenses and other current assets consisted of the following (in thousands): March 31, 2023 December 31, 2022 Prepaid expenses $ 22,149 $ 17,151 Other current assets 6,660 9,159 Contract assets 3,209 3,401 Prepaid expenses and other current assets $ 32,018 $ 29,711 Property and equipment, net consisted of the following (in thousands): March 31, 2023 December 31, 2022 Computer and network equipment $ 142,408 $ 148,789 Computer software 54,183 50,955 Internal-use software development costs 8,690 6,111 Furniture and fixtures 3,990 3,326 Leasehold improvements 6,003 6,574 Property and equipment 215,274 215,755 Accumulated depreciation and amortization (114,217) (114,534) Property and equipment, net $ 101,057 $ 101,221 Depreciation and amortization expense associated with property and equipment was $8.5 million and $7.8 million for the three months ended March 31, 2023 and 2022, respectively. Property and equipment capitalized under finance lease obligations consists primarily of computer and network equipment and was immaterial as of March 31, 2023 and December 31, 2022. Other assets consisted of the following (in thousands): March 31, 2023 December 31, 2022 Other assets $ 9,275 $ 5,081 Equity investment in a privately-held company 2,000 2,000 Deferred tax assets 3,965 3,976 Total $ 15,240 $ 11,057 Accrued and other current liabilities consisted of the following (in thousands): March 31, 2023 December 31, 2022 Accrued expenses $ 21,964 $ 19,343 Accrued compensation and benefits 40,232 33,749 Accrued and other current liabilities $ 62,196 $ 53,092 Other long-term liabilities consisted of the following (in thousands): March 31, 2023 December 31, 2022 Deferred revenue $ 1,093 $ 1,178 Deferred tax liabilities 206 157 Other long-term liabilities 3,614 1,745 Other long-term liabilities $ 4,913 $ 3,080 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill There was no activity in the Company's goodwill balance during the three months ended March 31, 2023. Intangible Assets The following table summarizes the activity in the Company's intangible assets balance during the three months ended March 31, 2023 (in thousands): Three Months Ended March 31, 2023 Beginning of the period $ 28,192 Amortization (2,846) End of the period $ 25,346 The components of intangible assets were as follows (in thousands): March 31, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Amortization period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Amortization period (Years) Developed technology $ 56,214 $ (31,647) $ 24,567 3.0 $ 56,214 $ (28,881) $ 27,333 3.2 Acquired workforce 470 (470) — 0.0 470 (470) 0 0.0 Customer relationships 1,600 (821) 779 2.5 1,600 (741) 859 2.7 Trademarks 500 (500) — 0.0 500 (500) — 0.0 Total $ 58,784 $ (33,438) $ 25,346 3.0 $ 58,784 $ (30,592) $ 28,192 3.2 Amortization expense related to intangible assets was $2.8 million and $2.9 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the expected future amortization expense for intangible assets was as follows (in thousands): Period Expected Future Amortization Expense Remaining 2023 $ 8,024 2024 7,527 2025 5,595 2026 4,200 2027 — Thereafter — Total $ 25,346 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt 2025 Convertible Senior Notes and Related Capped Call Transactions In May and June 2020, the Company issued $747.5 million aggregate principal amount of 2025 convertible senior notes in a private offering, which aggregate principal amount included the exercise in full of the initial purchasers’ option to purchase up to an additional $97.5 million principal amount of the 2025 convertible senior notes. The 2025 convertible senior notes mature on June 1, 2025 and bear interest at a fixed rate of 0.500% per annum, payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2020. The total net proceeds from the issuance of the 2025 convertible senior notes, after deducting initial purchasers' discounts and commissions and estimated debt issuance costs, were approximately $728.8 million. Each $1,000 principal amount of the 2025 convertible senior notes is initially convertible into 7.4437 shares of the Company’s common stock (the “2025 Conversion Option”), which is equivalent to an initial conversion price of approximately $134.34 per share of common stock, subject to adjustment upon the occurrence of specified events. The initial conversion price represents a premium of approximately 30% to the $103.34 per share closing price of the Company’s common stock on The Nasdaq Global Market on May 21, 2020. The 2025 convertible senior notes are convertible, in multiples of $1,000 principal amount, at the option of the holders prior to the close of business on the business day immediately preceding March 1, 2025, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “2025 Measurement Period”) in which the trading price (as defined in the 2025 Indenture governing the 2025 convertible senior notes) per $1,000 principal amount of the 2025 convertible senior notes for each trading day of the 2025 Measurement Period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate in effect on each such trading day; (3) if the Company calls any or all of the 2025 convertible senior notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after March 1, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2025 convertible senior notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. If the Company undergoes a fundamental change (as defined in the indenture governing the 2025 convertible senior notes), subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their 2025 convertible senior notes, in principal amounts of $1,000 or a multiple thereof, at a fundamental change repurchase price equal to 100% of the principal amount of the 2025 convertible senior notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their notes in connection with such corporate event or during the relevant redemption period. There have been no changes to the initial conversion price of the 2025 convertible senior notes since issuance. The closing market price of the Company's common stock of $72.29 per share on March 31, 2023, the last trading day during the three months ended March 31, 2023, was below $174.64 per share, which represents 130% of the initial conversion price of $134.34 per share. Additionally, the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day, March 31, 2023, was not greater than or equal to 130% of the initial conversion price. As such, during the three months ended March 31, 2023, the conditions allowing holders of the 2025 convertible senior notes to convert were not met. The 2025 convertible senior notes are therefore not convertible during the three months ending June 30, 2023. The Company may not redeem the 2025 convertible senior notes prior to June 6, 2023. The Company may redeem for cash all or any portion of the 2025 convertible senior notes, at its option, on or after June 6, 2023 and prior to March 1, 2025 if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending not more than two trading days immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2025 convertible senior notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the 2025 convertible senior notes. The 2025 convertible senior notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 2025 convertible senior notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated (including the 2023 convertible senior notes); effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries. The net carrying amount of the 2025 convertible senior notes as of March 31, 2023 and as of December 31, 2022 was as follows (in thousands): March 31, 2023 December 31, 2022 Principal $ 747,500 $ 747,500 Unamortized issuance costs (8,216) (9,124) Net carrying amount $ 739,284 $ 738,376 Interest expense related to the 2025 convertible senior notes was as follows (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Contractual interest expense $ 934 $ 934 Amortization of issuance costs 908 899 Total interest expense $ 1,842 $ 1,833 In connection with the issuance of the 2025 convertible senior notes, the Company entered into privately negotiated capped call transactions (the “2025 Capped Call Transactions”) with certain financial institutions. The initial cap price of the 2025 Capped Call Transactions was $206.68 per share and is subject to certain adjustments under the terms of the 2025 Capped Call Transactions. The 2025 Capped Call Transactions cover, subject to anti-dilution adjustments, approximately 5.6 million shares of the Company’s common stock. 2023 Convertible Senior Notes and Related Capped Call Transactions In May 2018, the Company issued $258.8 million aggregate principal amount of the 2023 convertible senior notes in a private offering. The 2023 convertible senior notes mature on May 1, 2023 and bear interest at a fixed rate of 0.125% per annum, payable semiannually in arrears on May 1 and November 1 of each year. The total net proceeds from the offering, after deducting initial purchasers' discounts and commissions and estimated debt issuance costs, was approximately $250.8 million. In May 2020, the Company used part of the net proceeds from the issuance of the 2025 convertible senior notes to repurchase, exchange or otherwise retire approximately $181.0 million aggregate principal amount of the 2023 convertible senior notes in privately-negotiated transactions for aggregate consideration of $449.6 million, consisting of $181.0 million in cash and 2,723,581 shares of the Company’s common stock (the "2023 Note Repurchase Transactions"). As of March 31, 2023, after giving effect to the 2023 Note Repurchase Transactions and other settlements upon conversion requests, approximately $0.2 million aggregate principal amount of 2023 convertible senior notes remained outstanding. Each $1,000 principal amount of the 2023 convertible senior notes was initially convertible into 24.4978 shares of the Company’s common stock (the “2023 Conversion Option”), which is equivalent to an initial conversion price of approximately $40.82 per share of common stock, subject to adjustment upon the occurrence of specified events. The 2023 convertible senior notes were convertible, in multiples of $1,000 principal amount, at the option of the holders at any time prior to the close of business on the business day immediately preceding November 1, 2022, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ended on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “2023 Measurement Period”) in which the trading price (as defined in the indenture governing the 2023 convertible senior notes) per $1,000 principal amount of the 2023 convertible senior notes for each trading day of the 2023 Measurement Period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate in effect on each such trading day; (3) if the Company calls any or all of the 2023 convertible senior notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. Commencing on November 1, 2022, and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2023 convertible senior notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. If the Company undergoes a fundamental change (as defined in the indenture governing the 2023 convertible senior notes), subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their 2023 convertible senior notes, in principal amounts of $1,000 or a multiple thereof, at a fundamental change repurchase price equal to 100% of the principal amount of the 2023 convertible senior notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events that occur prior to the maturity date or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their 2023 convertible senior notes in connection with such corporate event or during the relevant redemption period. There have been no changes to the initial conversion price of the 2023 convertible senior notes since issuance. During each of the quarters from the third quarter of 2019 through the third quarter of 2022, one of the triggers for convertibility of the 2023 convertible senior notes was triggered as the last reported sale price of the Company’s common stock was greater than $53.07 per share, which represents 130% of the initial conversion price of $40.82 per share, for at least 20 trading days in the period of 30 consecutive trading days ended on, and including, the last trading day of the quarter for each quarter of 2020 and 2021 and for the first three quarters of 2022. As a result, the 2023 convertible senior notes were convertible, in multiples of $1,000 principal amount, at the option of the 2023 convertible senior note holders between October 1, 2019 to October 31, 2022. The 2023 convertible senior notes continue to be convertible from November 1, 2022 until the close of business on the second scheduled trading day immediately preceding the maturity date. There were no conversions of the 2023 convertible senior notes during the three months ended March 31, 2023. As of March 31, 2023, approximately $0.2 million aggregate principal amount of the Company's 2023 convertible senior notes remained outstanding. The 2023 convertible senior notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 2023 convertible senior notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated (including the 2025 convertible senior notes); effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries. The net carrying amount of the 2023 convertible senior notes as of March 31, 2023 and as of December 31, 2022 was as follows (in thousands): March 31, 2023 December 31, 2022 Principal $ 169 $ 169 Unamortized issuance costs — — Net carrying amount $ 169 $ 169 Interest expense related to the 2023 convertible senior notes was as follows (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Contractual interest expense $ — $ 6 Amortization of issuance costs — 31 Total interest expense $ — $ 37 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Capital Structure Common Stock 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, 2023 and December 31, 2022, the Company had 71,544,294 and 71,047,179 shares of common stock issued and outstanding, respectively. Preferred Stock The Company is 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, 2023 and December 31, 2022, there were no shares of preferred stock issued and outstanding. Common Stock Reserved for Future Issuance Shares of common stock reserved for future issuance related to outstanding equity awards and employee equity incentive plans as of March 31, 2023 were as follows (in thousands): March 31, 2023 Stock options outstanding 1,303 RSUs (including PRSUs) outstanding 4,842 Shares available for future grant under 2014 Plan 16,339 Shares available for future issuance under ESPP 4,281 Total shares of common stock reserved 26,765 Stock Options A summary of the Company’s stock option activity during the three months ended March 31, 2023 is as follows (in thousands, except years and per share data): Number of Weighted Weighted Aggregate Outstanding as of December 31, 2022 1,481 $ 47.75 Options granted — — Options exercised (139) 22.49 Options forfeited or expired (39) 139.87 Outstanding as of March 31, 2023 1,303 $ 47.66 4.5 $ 49,139 The aggregate intrinsic value amounts are computed based on the difference between the exercise price of the stock options and the fair market value of the Company’s common stock of $72.29 per share as of March 31, 2023 for all in-the-money stock options outstanding. Restricted Stock Units (including Performance-Based Restricted Stock Units) A summary of the Company’s restricted stock unit ("RSU") activity (including PRSUs) during the three months ended March 31, 2023 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, 2022 3,718 $ 103.55 RSUs granted (1) 1,673 71.33 RSUs vested and released (358) 114.70 RSUs forfeited or canceled (191) 111.80 Outstanding as of March 31, 2023 4,842 90.00 (1) Includes 35,921 PRSUs granted during the three months ended March 31, 2023. PRSUs with Market and Service Conditions In 2022, the Company granted 284,282 PRSUs subject to market and service conditions (“market-based PRSUs”) with a grant date fair value of $30.6 million as part of its annual grant of equity incentive awards to certain executives and in connection with the appointment of Michael Burkland as its new Chief Executive Officer. During the first quarter of 2023, the Company granted an additional 35,921 market-based PRSUs with a grant date fair value of $3.1 million. The amount that may be earned pursuant to the PRSUs ranges from 0% to 200% of the target number based on the Company’s relative total shareholder return (“RTSR”) performance as compared to the companies in the S&P Software and Services Select Index during three one-year performance periods. One-third of the total PRSUs may be earned and settled in shares following the end of each one-year performance period based on RTSR performance and subject to continued employment through the payment date, but the amount initially paid for the first two one-year performance periods is limited to 100% of the target amount for such years, and any PRSUs resulting from above-target performance in those first two years will be paid following the end of final one-year performance period, subject to the executive’s continued employment through the payment date. If the Company’s absolute total shareholder return for any performance period is negative, then no more than 100% of the target amount of PRSUs for such period may be earned. If an executive's employment with the Company terminates before the end of the final one-year performance period due to death or disability, 100% (if due to death) or 50% (if due to disability) of the unvested PRSUs may be earned subject to ultimate RTSR performance in each remaining performance period. Upon a qualifying termination of employment in connection with a change in control of the Company, the unvested PRSUs will vest on a double-trigger basis (i) at the target level for the market-based PRSUs granted to certain executives, excluding Michael Burkland, subject to the 2022-2024 performance period, and (ii) for the market-based PRSUs granted to certain executives, including Michael Burkland, subject to the 2023-2025 performance period, (a) at the target level for the uncompleted portions of the performance periods and (b) at the actual level of performance measured through the date of the change in control of the Company, based on the price per share paid in such change in control. The fair value of the PRSUs are determined on their grant date using a Monte Carlo Simulation model based upon assumptions presented below. The Company recognizes the fair value of the PRSUs ratably over their requisite service period. During the first quarter of 2023, the Company certified the performance results for the 2022 measurement period for the PRSUs subject to the 2022-2024 performance period. Under the PRSU agreements, the TSR payout percentage ranges from 0% to 200%, with a 50% payout at the 25th TSR percentile (threshold), 100% payout at the 55th TSR percentile (target), 200% payout at the 90th percentile or greater (maximum) and no payout below the threshold performance level. The Company determined that its actual total shareholder return was -52.64% for 2022, and that its relative total shareholder return ranking was in the 30.2 percentile relative to companies in the S&P Software & Services Select Index, which resulted in a payout percentage of 58.7% of target. PRSUs with Revenue and Service Conditions In 2022, the Company granted 66,167 PRSUs subject to revenue-based performance and service conditions (“revenue-based PRSUs”) with a grant date fair value of $6.6 million. The amount of revenue-based PRSUs that may be earned will be determined based on achievement of two quarterly revenue goals. One third of the revenue-based PRSUs may be earned based on achievement of the first revenue target and, if achieved, will vest in four quarterly installments, with the first installment occurring on the date such achievement is certified, subject to the executive's continuous service through the applicable vesting dates. Two thirds of the revenue-based PRSUs may be earned based on achievement of the second revenue target and, if achieved, will vest in eight quarterly installments, with the first installment occurring on the date such achievement is certified, subject to the executive's continuous service through the applicable vesting dates. The revenue-based PRSUs are otherwise on the Company's standard award terms for its market-based PRSUs. The Company concluded that the first revenue target was probable of achievement at March 31, 2023, and thus recognized the related stock-based compensation expense through this period. The Company, however, concluded that, as of March 31, 2023, the second revenue target was not probable of achievement, and thus did not recognize related stock-based compensation expense through this period. The Company will reassess the probability of the achievement of the performance conditions at each reporting period and a cumulative catch-up adjustment will be recorded to stock-based compensation cost for any change in the probability assessment. Stock-Based Compensation Stock-based compensation expense was as follows (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Cost of revenue $ 9,333 $ 7,793 Research and development 12,382 10,145 Sales and marketing 17,045 13,424 General and administrative 11,983 8,032 Total stock-based compensation expense $ 50,743 $ 39,394 As of March 31, 2023, unrecognized stock-based compensation expense by award type and expected weighted-average recognition periods are summarized in the following table (in thousands, except years). Stock Option RSU PRSU ESPP Unrecognized stock-based compensation expense $ 9,144 $ 375,880 $ 22,462 $ 1,086 Weighted-average amortization period 2.0 years 2.8 years 2.2 years 0.1 years The weighted-average assumptions used to value stock options granted during the periods presented were as follows: Stock Options Three Months Ended March 31, 2023 March 31, 2022 Expected term (years) — 6.0 Volatility — 46.0 % Risk-free interest rate — 1.8 % Dividend yield (1) — — The weighted-average assumptions used to value PRSUs with market conditions granted during the periods presented were as follows: PRSUs (Market Conditions) Three Months Ended March 31, 2023 March 31, 2022 Closing price of common stock as of grant date $ 68.15 $ 110.00 Expected term (years) 2.84 2.84 Volatility 51.1 % 48.8 % Risk-free interest rate 4.5 % 1.6 % 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, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per ShareBasic net loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding during the period, and excludes any dilutive effects of employee stock-based awards and potential shares upon conversion of the convertible senior notes. Diluted net loss per share is computed giving effect to all potentially dilutive shares of common stock, including common stock issuable upon exercise of stock options, vesting of RSUs and PRSUs, and shares of common stock issuable upon conversion of convertible senior notes. As the Company had net losses for the three months ended March 31, 2023 and 2022, all potentially issuable shares of common stock 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, 2023 March 31, 2022 Net loss $ (27,248) $ (34,120) Weighted-average shares used in computing basic and diluted net loss per share 71,259 68,974 Basic and diluted net loss per share $ (0.38) $ (0.49) The following securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Stock options 1,303 1,768 RSUs (includes PRSUs) 4,842 3,236 Convertible senior notes 5,568 6,042 Total 11,713 11,046 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes for the three months ended March 31, 2023 and 2022 was approximately $0.5 million and $2.3 million, respectively. The provision for income taxes for the three months ended March 31, 2023 consisted primarily of state and foreign current income tax expense. The provision for income taxes for the three months ended March 31, 2022 consisted primarily of foreign income tax expense from the intercompany sale of the Company's Australian intellectual property to the United States. For the three months ended March 31, 2023, the provision for income taxes differed from the statutory amount primarily due to domestic state income taxes, foreign income taxes and the Company realizing no benefit for current year domestic losses due to maintaining a full valuation allowance against its domestic net deferred tax assets. For the three months ended March 31, 2022, the provision for income taxes differed from the statutory amount primarily due to foreign income taxes and the Company realizing no benefit for current year domestic 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, 2023 and December 31, 2022. 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, 2023, there were no material changes to the total amount of unrecognized tax benefits. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments The Company’s principal commitments consist of future payment obligations under its convertible senior notes, operating leases for office facilities, cloud services and software and maintenance agreements, and agreements with third parties to provide co-location hosting and telecommunication services. These commitments as of December 31, 2022 are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and material updates to these commitments during the three months ended March 31, 2023 are disclosed herein, including in this Note 10 and in Note 12. As of March 31, 2023, the Company’s commitments under various co-location hosting and telecommunications agreements totaled $15.3 million for terms ranging up to 60 months. These agreements require the Company to make monthly payments over the service term in exchange for certain network services. As of March 31, 2023, the Company had outstanding cloud services and software and maintenance agreement commitments totaling $46.3 million, of which $25.2 million is expected to be paid in the remainder of 2023, $17.1 million is expected to be paid in 2024, and the remaining $4.0 million is expected to be paid in 2025. As of March 31, 2023, $747.7 million of aggregate principal of the convertible senior notes were outstanding. The 2023 convertible senior notes and the 2025 convertible senior notes are due on May 1, 2023 and June 1, 2025, respectively. See Note 6 for more information concerning the convertible senior notes. 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 |
Geographical Information
Geographical Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Geographical Information | Geographical Information The following table summarizes revenues by geographic region based on client billing address (in thousands): Three Months Ended March 31, 2023 March 31, 2022 United States $ 195,363 $ 167,247 International 23,076 15,530 Total revenue $ 218,439 $ 182,777 The following table summarizes total property and equipment, net in the respective locations (in thousands): March 31, 2023 December 31, 2022 United States $ 93,001 $ 92,659 International 8,056 8,562 Property and equipment, net $ 101,057 $ 101,221 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company has leases for offices, data centers and computer and networking equipment that expire at various dates through 2031. The Company’s leases have remaining terms of one one The components of lease expenses were as follows (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Operating lease cost $ 3,382 $ 2,900 Finance lease cost: Amortization of right-of-use assets $ 63 $ 333 Total finance lease cost $ 63 $ 333 Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash used in operating leases $ (3,275) $ (2,709) Right of use assets obtained in exchange for lease obligations: Operating leases 4,153 236 Supplemental balance sheet information related to leases was as follows (in thousands): March 31, 2023 December 31, 2022 Operating leases Operating lease right-of-use assets $ 45,339 $ 44,120 Operating lease liabilities $ 11,739 $ 10,626 Operating lease liabilities — less current portion 41,703 41,389 Total operating lease liabilities $ 53,442 $ 52,015 Finance leases Property and equipment, gross $ 30,015 $ 36,282 Less: accumulated depreciation and amortization (29,999) (36,203) Property and equipment, net $ 16 $ 79 Weighted average remaining terms were as follows (in years): March 31, 2023 December 31, 2022 Weighted average remaining lease term Operating leases 6.1 6.4 Weighted average discount rates were as follows: March 31, 2023 December 31, 2022 Weighted average discount rate Operating leases 3.6 % 3.4 % Maturities of lease liabilities were as follows (in thousands): Year Ending December 31, Operating Leases Remaining 2023 $ 10,155 2024 11,379 2025 8,436 2026 6,541 2027 5,733 Thereafter 17,081 Total future minimum lease payments 59,325 Less: imputed interest (5,883) Total $ 53,442 |
Leases | Leases The Company has leases for offices, data centers and computer and networking equipment that expire at various dates through 2031. The Company’s leases have remaining terms of one one The components of lease expenses were as follows (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Operating lease cost $ 3,382 $ 2,900 Finance lease cost: Amortization of right-of-use assets $ 63 $ 333 Total finance lease cost $ 63 $ 333 Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash used in operating leases $ (3,275) $ (2,709) Right of use assets obtained in exchange for lease obligations: Operating leases 4,153 236 Supplemental balance sheet information related to leases was as follows (in thousands): March 31, 2023 December 31, 2022 Operating leases Operating lease right-of-use assets $ 45,339 $ 44,120 Operating lease liabilities $ 11,739 $ 10,626 Operating lease liabilities — less current portion 41,703 41,389 Total operating lease liabilities $ 53,442 $ 52,015 Finance leases Property and equipment, gross $ 30,015 $ 36,282 Less: accumulated depreciation and amortization (29,999) (36,203) Property and equipment, net $ 16 $ 79 Weighted average remaining terms were as follows (in years): March 31, 2023 December 31, 2022 Weighted average remaining lease term Operating leases 6.1 6.4 Weighted average discount rates were as follows: March 31, 2023 December 31, 2022 Weighted average discount rate Operating leases 3.6 % 3.4 % Maturities of lease liabilities were as follows (in thousands): Year Ending December 31, Operating Leases Remaining 2023 $ 10,155 2024 11,379 2025 8,436 2026 6,541 2027 5,733 Thereafter 17,081 Total future minimum lease payments 59,325 Less: imputed interest (5,883) Total $ 53,442 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event The 2023 convertible senior notes matured on May 1, 2023 and were settled in a combination of cash and shares of the Company's common stock. Upon maturity, the outstanding capped calls associated with the repurchase and early settlements of $194.7 million 2023 convertible senior notes were settled, which resulted in the Company receiving 370,877 shares and $74.5 million. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [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, 2022. 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 and related reserves, as well as the fair value of liabilities assumed through business combinations. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results could differ from those estimates. |
Recent Accounting Pronouncements Not Yet Effective | Recent Accounting Pronouncements Not Yet Effective The Company has reviewed or is in the process of evaluating all issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such accounting pronouncements will cause a material impact on its condensed consolidated financial position, operating results or statements of cash flows. |
Receivables | 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 | Deferred contract acquisition costs are recorded when incurred and are amortized over an estimated customer benefit period of five years. |
Revenue | The Company’s contract assets consist of unbilled amounts typically resulting from professional services revenue recognition when it exceeds the total amounts billed to the customer. The Company’s contract liabilities consist of advance payments and billings in excess of revenue recognized. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Balances | The following table provides information about accounts receivable, net, deferred contract acquisition costs, net, contract assets and contract liabilities from contracts with customers (in thousands): March 31, 2023 December 31, 2022 Accounts receivable, net $ 88,085 $ 87,494 Deferred contract acquisition costs, net: Current $ 50,566 $ 47,242 Non-current 119,799 114,880 Total deferred contract acquisition costs, net $ 170,365 $ 162,122 Contract assets and contract liabilities: Contract assets (included in prepaid expenses and other current assets) $ 3,209 $ 3,401 Contract liabilities (deferred revenue) (58,082) (57,816) Noncurrent contract liabilities (deferred revenue) (included in other long-term liabilities) (1,093) (1,178) Net contract liabilities $ (55,966) $ (55,593) |
Investments and Fair Value Me_2
Investments and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Marketable Investments | The Company’s marketable investments have been classified and accounted for as available-for-sale. The Company’s marketable investments as of March 31, 2023 and December 31, 2022 were as follows (in thousands): March 31, 2023 Short-Term Marketable Investments Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit $ 2,201 $ — $ (8) $ 2,193 U.S. treasury 169,888 35 (668) 169,255 U.S. agency securities 267,338 50 (1,019) 266,369 Commercial paper 35,327 1 (39) 35,289 Municipal bonds 12,719 — (97) 12,622 Corporate bonds 2,663 — (10) 2,653 Total $ 490,136 $ 86 $ (1,841) $ 488,381 March 31, 2023 Long-term Marketable Investments Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. agency securities $ 11,478 $ 14 $ (1) $ 11,491 Corporate bonds 2,013 — (6) 2,007 Total $ 13,491 $ 14 $ (7) $ 13,498 December 31, 2022 Short-Term Marketable Investments Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit $ 747 $ — $ (13) $ 734 U.S. treasury securities 186,776 8 (1,382) 185,402 U.S. agency and government-sponsored securities 197,597 29 (1,660) 195,966 Commercial paper 25,386 — — 25,386 Municipal bonds 22,764 — (145) 22,619 Corporate bonds 3,658 — (22) 3,636 Total $ 436,928 $ 37 $ (3,222) $ 433,743 December 31, 2022 Long-term Marketable Investments Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. agency securities $ 885 $ — $ — $ 885 Total $ 885 $ — $ — $ 885 |
Schedule of Gross Unrealized Losses and Fair Value of Marketable Investments | The following table presents the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than 12 months as of March 31, 2023 and December 31, 2022 (in thousands): March 31, 2023 December 31, 2022 Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Certificates of deposit $ (8) $ 490 $ (13) $ 734 U.S. treasury securities (668) 90,248 (1,382) 126,534 U.S. agency securities (1,020) 203,987 (1,660) 172,458 Commercial paper (39) 28,874 — — Municipal bonds (97) 12,622 (145) 12,623 Corporate bonds (16) 4,660 (22) 3,636 Total $ (1,848) $ 340,881 $ (3,222) $ 315,985 |
Schedule of Assets Carried at Fair Value | The following tables set forth the Company’s assets measured at fair value by level within the fair value hierarchy (in thousands): March 31, 2023 Level 1 Level 2 Level 3 Total Assets Cash equivalents Money market funds $ 17,296 $ — $ — $ 17,296 Total cash equivalents $ 17,296 $ — $ — $ 17,296 Marketable investments (short and long term) Certificates of deposit $ — $ 2,193 $ — $ 2,193 U.S. treasury 169,255 — — 169,255 U.S. agency securities and government sponsored securities — 277,860 — 277,860 Commercial paper — 35,289 — 35,289 Municipal bonds — 12,622 — 12,622 Corporate bonds — 4,660 — 4,660 Total marketable investments $ 169,255 $ 332,624 $ — $ 501,879 December 31, 2022 Level 1 Level 2 Level 3 Total Assets Cash equivalents Money market funds $ 37,560 $ — $ — $ 37,560 U.S. treasury securities 19,700 — — 19,700 Total cash equivalents $ 57,260 $ — $ — $ 57,260 Marketable investments (short and long-term) Certificates of deposit $ — $ 734 $ — $ 734 U.S. treasury securities 185,402 — — 185,402 U.S. agency and government-sponsored securities — 196,851 — 196,851 Commercial paper — 25,386 — 25,386 Municipal bonds — 22,619 — 22,619 Corporate bonds — 3,636 — 3,636 Total marketable investments $ 185,402 $ 249,226 $ — $ 434,628 |
Financial Statement Components
Financial Statement Components (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | Cash and cash equivalents consisted of the following (in thousands): March 31, 2023 December 31, 2022 Cash $ 124,063 $ 123,260 Money market funds 17,296 37,560 U.S. treasury — 19,700 Total cash and cash equivalents $ 141,359 $ 180,520 |
Schedule of Accounts Receivable | Accounts receivable, net consisted of the following (in thousands): March 31, 2023 December 31, 2022 Trade accounts receivable $ 77,712 $ 77,621 Unbilled trade accounts receivable, net of advance client deposits 10,614 10,135 Allowance for credit losses (241) (262) Accounts receivable, net $ 88,085 $ 87,494 |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): March 31, 2023 December 31, 2022 Prepaid expenses $ 22,149 $ 17,151 Other current assets 6,660 9,159 Contract assets 3,209 3,401 Prepaid expenses and other current assets $ 32,018 $ 29,711 |
Schedule of Property and Equipment | Property and equipment, net consisted of the following (in thousands): March 31, 2023 December 31, 2022 Computer and network equipment $ 142,408 $ 148,789 Computer software 54,183 50,955 Internal-use software development costs 8,690 6,111 Furniture and fixtures 3,990 3,326 Leasehold improvements 6,003 6,574 Property and equipment 215,274 215,755 Accumulated depreciation and amortization (114,217) (114,534) Property and equipment, net $ 101,057 $ 101,221 |
Schedule of Other Assets | Other assets consisted of the following (in thousands): March 31, 2023 December 31, 2022 Other assets $ 9,275 $ 5,081 Equity investment in a privately-held company 2,000 2,000 Deferred tax assets 3,965 3,976 Total $ 15,240 $ 11,057 |
Schedule of Accrued and Other Current Liabilities | Accrued and other current liabilities consisted of the following (in thousands): March 31, 2023 December 31, 2022 Accrued expenses $ 21,964 $ 19,343 Accrued compensation and benefits 40,232 33,749 Accrued and other current liabilities $ 62,196 $ 53,092 |
Schedule of Other Long-term Liabilities | Other long-term liabilities consisted of the following (in thousands): March 31, 2023 December 31, 2022 Deferred revenue $ 1,093 $ 1,178 Deferred tax liabilities 206 157 Other long-term liabilities 3,614 1,745 Other long-term liabilities $ 4,913 $ 3,080 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets Activity | The following table summarizes the activity in the Company's intangible assets balance during the three months ended March 31, 2023 (in thousands): Three Months Ended March 31, 2023 Beginning of the period $ 28,192 Amortization (2,846) End of the period $ 25,346 |
Schedule of Intangible Assets | The components of intangible assets were as follows (in thousands): March 31, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Amortization period (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Amortization period (Years) Developed technology $ 56,214 $ (31,647) $ 24,567 3.0 $ 56,214 $ (28,881) $ 27,333 3.2 Acquired workforce 470 (470) — 0.0 470 (470) 0 0.0 Customer relationships 1,600 (821) 779 2.5 1,600 (741) 859 2.7 Trademarks 500 (500) — 0.0 500 (500) — 0.0 Total $ 58,784 $ (33,438) $ 25,346 3.0 $ 58,784 $ (30,592) $ 28,192 3.2 |
Schedule of Expected Future Amortization Expense of Intangible Assets | As of March 31, 2023, the expected future amortization expense for intangible assets was as follows (in thousands): Period Expected Future Amortization Expense Remaining 2023 $ 8,024 2024 7,527 2025 5,595 2026 4,200 2027 — Thereafter — Total $ 25,346 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Convertible Senior Notes, Due 2025 | |
Debt Instrument [Line Items] | |
Schedule of Net Carrying Amount of Notes and Impact to Additional Paid-in Capital | The net carrying amount of the 2025 convertible senior notes as of March 31, 2023 and as of December 31, 2022 was as follows (in thousands): March 31, 2023 December 31, 2022 Principal $ 747,500 $ 747,500 Unamortized issuance costs (8,216) (9,124) Net carrying amount $ 739,284 $ 738,376 |
Schedule of Interest Expense Related to the Notes | Interest expense related to the 2025 convertible senior notes was as follows (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Contractual interest expense $ 934 $ 934 Amortization of issuance costs 908 899 Total interest expense $ 1,842 $ 1,833 |
Convertible Senior Notes, Due 2023 | |
Debt Instrument [Line Items] | |
Schedule of Net Carrying Amount of Notes and Impact to Additional Paid-in Capital | The net carrying amount of the 2023 convertible senior notes as of March 31, 2023 and as of December 31, 2022 was as follows (in thousands): March 31, 2023 December 31, 2022 Principal $ 169 $ 169 Unamortized issuance costs — — Net carrying amount $ 169 $ 169 |
Schedule of Interest Expense Related to the Notes | Interest expense related to the 2023 convertible senior notes was as follows (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Contractual interest expense $ — $ 6 Amortization of issuance costs — 31 Total interest expense $ — $ 37 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Common Stock Reserved for Future Issuance | Shares of common stock reserved for future issuance related to outstanding equity awards and employee equity incentive plans as of March 31, 2023 were as follows (in thousands): March 31, 2023 Stock options outstanding 1,303 RSUs (including PRSUs) outstanding 4,842 Shares available for future grant under 2014 Plan 16,339 Shares available for future issuance under ESPP 4,281 Total shares of common stock reserved 26,765 |
Schedule of Stock Option Activity | A summary of the Company’s stock option activity during the three months ended March 31, 2023 is as follows (in thousands, except years and per share data): Number of Weighted Weighted Aggregate Outstanding as of December 31, 2022 1,481 $ 47.75 Options granted — — Options exercised (139) 22.49 Options forfeited or expired (39) 139.87 Outstanding as of March 31, 2023 1,303 $ 47.66 4.5 $ 49,139 |
Schedule of RSU Activity | A summary of the Company’s restricted stock unit ("RSU") activity (including PRSUs) during the three months ended March 31, 2023 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, 2022 3,718 $ 103.55 RSUs granted (1) 1,673 71.33 RSUs vested and released (358) 114.70 RSUs forfeited or canceled (191) 111.80 Outstanding as of March 31, 2023 4,842 90.00 |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense was as follows (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Cost of revenue $ 9,333 $ 7,793 Research and development 12,382 10,145 Sales and marketing 17,045 13,424 General and administrative 11,983 8,032 Total stock-based compensation expense $ 50,743 $ 39,394 |
Schedule of Unrecognized Compensation Expense | As of March 31, 2023, unrecognized stock-based compensation expense by award type and expected weighted-average recognition periods are summarized in the following table (in thousands, except years). Stock Option RSU PRSU ESPP Unrecognized stock-based compensation expense $ 9,144 $ 375,880 $ 22,462 $ 1,086 Weighted-average amortization period 2.0 years 2.8 years 2.2 years 0.1 years |
Schedule of Valuation Assumptions, Stock Option | The weighted-average assumptions used to value stock options granted during the periods presented were as follows: Stock Options Three Months Ended March 31, 2023 March 31, 2022 Expected term (years) — 6.0 Volatility — 46.0 % Risk-free interest rate — 1.8 % Dividend yield (1) — — The weighted-average assumptions used to value PRSUs with market conditions granted during the periods presented were as follows: PRSUs (Market Conditions) Three Months Ended March 31, 2023 March 31, 2022 Closing price of common stock as of grant date $ 68.15 $ 110.00 Expected term (years) 2.84 2.84 Volatility 51.1 % 48.8 % Risk-free interest rate 4.5 % 1.6 % 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, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of 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, 2023 March 31, 2022 Net loss $ (27,248) $ (34,120) Weighted-average shares used in computing basic and diluted net loss per share 71,259 68,974 Basic and diluted net loss per share $ (0.38) $ (0.49) |
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): Three Months Ended March 31, 2023 March 31, 2022 Stock options 1,303 1,768 RSUs (includes PRSUs) 4,842 3,236 Convertible senior notes 5,568 6,042 Total 11,713 11,046 |
Geographical Information (Table
Geographical Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Revenues and Property and Equipment by Geographic Region | The following table summarizes revenues by geographic region based on client billing address (in thousands): Three Months Ended March 31, 2023 March 31, 2022 United States $ 195,363 $ 167,247 International 23,076 15,530 Total revenue $ 218,439 $ 182,777 The following table summarizes total property and equipment, net in the respective locations (in thousands): March 31, 2023 December 31, 2022 United States $ 93,001 $ 92,659 International 8,056 8,562 Property and equipment, net $ 101,057 $ 101,221 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Lease Expenses and Terms | The components of lease expenses were as follows (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Operating lease cost $ 3,382 $ 2,900 Finance lease cost: Amortization of right-of-use assets $ 63 $ 333 Total finance lease cost $ 63 $ 333 Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash used in operating leases $ (3,275) $ (2,709) Right of use assets obtained in exchange for lease obligations: Operating leases 4,153 236 Weighted average remaining terms were as follows (in years): March 31, 2023 December 31, 2022 Weighted average remaining lease term Operating leases 6.1 6.4 Weighted average discount rates were as follows: March 31, 2023 December 31, 2022 Weighted average discount rate Operating leases 3.6 % 3.4 % |
Schedule of Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows (in thousands): March 31, 2023 December 31, 2022 Operating leases Operating lease right-of-use assets $ 45,339 $ 44,120 Operating lease liabilities $ 11,739 $ 10,626 Operating lease liabilities — less current portion 41,703 41,389 Total operating lease liabilities $ 53,442 $ 52,015 Finance leases Property and equipment, gross $ 30,015 $ 36,282 Less: accumulated depreciation and amortization (29,999) (36,203) Property and equipment, net $ 16 $ 79 |
Schedule of Operating Lease Maturities | Maturities of lease liabilities were as follows (in thousands): Year Ending December 31, Operating Leases Remaining 2023 $ 10,155 2024 11,379 2025 8,436 2026 6,541 2027 5,733 Thereafter 17,081 Total future minimum lease payments 59,325 Less: imputed interest (5,883) Total $ 53,442 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 88,085 | $ 87,494 |
Deferred contract acquisition costs, net: | ||
Current | 50,566 | 47,242 |
Non-current | 119,799 | 114,880 |
Total deferred contract acquisition costs, net | 170,365 | 162,122 |
Contract assets and contract liabilities: | ||
Contract assets (included in prepaid expenses and other current assets) | 3,209 | 3,401 |
Contract liabilities (deferred revenue) | (58,082) | (57,816) |
Noncurrent contract liabilities (deferred revenue) (included in other long-term liabilities) | (1,093) | (1,178) |
Net contract liabilities | $ (55,966) | $ (55,593) |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Contract revenue recognized | $ 31.4 |
Contract acquisition costs | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Amortization period of capitalized contract cost (in years) | 5 years |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligations (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Performance obligation | $ 918.3 |
Performance obligation, description of timing | The Company expects to recognize revenue on approximately three-fifths of the remaining performance obligations over the next 24 months, with the balance recognized thereafter. The Company excludes 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 unsatisfied or partially unsatisfied performance obligations. |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation satisfaction period (in months) | 24 months |
Remaining performance obligation expected to be recognized (as a percent) | 60% |
Investments and Fair Value Me_3
Investments and Fair Value Measurements - Schedule of Marketable Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | $ 501,879 | $ 434,628 |
Short-Term Marketable Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 490,136 | 436,928 |
Gross Unrealized Gains | 86 | 37 |
Gross Unrealized Losses | (1,841) | (3,222) |
Fair Value | 488,381 | 433,743 |
Long-term Marketable Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 13,491 | 885 |
Gross Unrealized Gains | 14 | 0 |
Gross Unrealized Losses | (7) | 0 |
Fair Value | 13,498 | 885 |
Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 2,193 | 734 |
Certificates of deposit | Short-Term Marketable Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 2,201 | 747 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (8) | (13) |
Fair Value | 2,193 | 734 |
U.S. treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 169,255 | 185,402 |
U.S. treasury | Short-Term Marketable Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 169,888 | 186,776 |
Gross Unrealized Gains | 35 | 8 |
Gross Unrealized Losses | (668) | (1,382) |
Fair Value | 169,255 | 185,402 |
U.S. agency securities | Short-Term Marketable Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 267,338 | 197,597 |
Gross Unrealized Gains | 50 | 29 |
Gross Unrealized Losses | (1,019) | (1,660) |
Fair Value | 266,369 | 195,966 |
U.S. agency securities | Long-term Marketable Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 11,478 | 885 |
Gross Unrealized Gains | 14 | 0 |
Gross Unrealized Losses | (1) | 0 |
Fair Value | 11,491 | 885 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 35,289 | 25,386 |
Commercial paper | Short-Term Marketable Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 35,327 | 25,386 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (39) | 0 |
Fair Value | 35,289 | 25,386 |
Municipal bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 12,622 | 22,619 |
Municipal bonds | Short-Term Marketable Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 12,719 | 22,764 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (97) | (145) |
Fair Value | 12,622 | 22,619 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 4,660 | 3,636 |
Corporate bonds | Short-Term Marketable Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 2,663 | 3,658 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (10) | (22) |
Fair Value | 2,653 | $ 3,636 |
Corporate bonds | Long-term Marketable Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 2,013 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (6) | |
Fair Value | $ 2,007 |
Investments and Fair Value Me_4
Investments and Fair Value Measurements - Schedule of Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Gross Unrealized Losses | $ (1,848) | $ (3,222) |
Fair Value | 340,881 | 315,985 |
Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross Unrealized Losses | (8) | (13) |
Fair Value | 490 | 734 |
U.S. treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross Unrealized Losses | (668) | (1,382) |
Fair Value | 90,248 | 126,534 |
U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross Unrealized Losses | (1,020) | (1,660) |
Fair Value | 203,987 | 172,458 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross Unrealized Losses | (39) | 0 |
Fair Value | 28,874 | 0 |
Municipal bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross Unrealized Losses | (97) | (145) |
Fair Value | 12,622 | 12,623 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gross Unrealized Losses | (16) | (22) |
Fair Value | $ 4,660 | $ 3,636 |
Investments and Fair Value Me_5
Investments and Fair Value Measurements - Schedule of Assets Carried at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash equivalents | $ 17,296 | $ 57,260 |
Marketable investments (short and long term) | 501,879 | 434,628 |
Level 1 | ||
Assets | ||
Cash equivalents | 17,296 | 57,260 |
Marketable investments (short and long term) | 169,255 | 185,402 |
Level 2 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Marketable investments (short and long term) | 332,624 | 249,226 |
Level 3 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Marketable investments (short and long term) | 0 | 0 |
Certificates of deposit | ||
Assets | ||
Marketable investments (short and long term) | 2,193 | 734 |
Certificates of deposit | Level 1 | ||
Assets | ||
Marketable investments (short and long term) | 0 | 0 |
Certificates of deposit | Level 2 | ||
Assets | ||
Marketable investments (short and long term) | 2,193 | 734 |
Certificates of deposit | Level 3 | ||
Assets | ||
Marketable investments (short and long term) | 0 | 0 |
U.S. treasury | ||
Assets | ||
Marketable investments (short and long term) | 169,255 | 185,402 |
U.S. treasury | Level 1 | ||
Assets | ||
Marketable investments (short and long term) | 169,255 | 185,402 |
U.S. treasury | Level 2 | ||
Assets | ||
Marketable investments (short and long term) | 0 | 0 |
U.S. treasury | Level 3 | ||
Assets | ||
Marketable investments (short and long term) | 0 | 0 |
U.S. agency and government-sponsored securities | ||
Assets | ||
Marketable investments (short and long term) | 277,860 | 196,851 |
U.S. agency and government-sponsored securities | Level 1 | ||
Assets | ||
Marketable investments (short and long term) | 0 | 0 |
U.S. agency and government-sponsored securities | Level 2 | ||
Assets | ||
Marketable investments (short and long term) | 277,860 | 196,851 |
U.S. agency and government-sponsored securities | Level 3 | ||
Assets | ||
Marketable investments (short and long term) | 0 | 0 |
Commercial paper | ||
Assets | ||
Marketable investments (short and long term) | 35,289 | 25,386 |
Commercial paper | Level 1 | ||
Assets | ||
Marketable investments (short and long term) | 0 | 0 |
Commercial paper | Level 2 | ||
Assets | ||
Marketable investments (short and long term) | 35,289 | 25,386 |
Commercial paper | Level 3 | ||
Assets | ||
Marketable investments (short and long term) | 0 | 0 |
Municipal bonds | ||
Assets | ||
Marketable investments (short and long term) | 12,622 | 22,619 |
Municipal bonds | Level 1 | ||
Assets | ||
Marketable investments (short and long term) | 0 | 0 |
Municipal bonds | Level 2 | ||
Assets | ||
Marketable investments (short and long term) | 12,622 | 22,619 |
Municipal bonds | Level 3 | ||
Assets | ||
Marketable investments (short and long term) | 0 | 0 |
Corporate bonds | ||
Assets | ||
Marketable investments (short and long term) | 4,660 | 3,636 |
Corporate bonds | Level 1 | ||
Assets | ||
Marketable investments (short and long term) | 0 | 0 |
Corporate bonds | Level 2 | ||
Assets | ||
Marketable investments (short and long term) | 4,660 | 3,636 |
Corporate bonds | Level 3 | ||
Assets | ||
Marketable investments (short and long term) | 0 | 0 |
Money market funds | ||
Assets | ||
Cash equivalents | 17,296 | 37,560 |
Money market funds | Level 1 | ||
Assets | ||
Cash equivalents | 17,296 | 37,560 |
Money market funds | Level 2 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Money market funds | Level 3 | ||
Assets | ||
Cash equivalents | $ 0 | 0 |
U.S. treasury | ||
Assets | ||
Cash equivalents | 19,700 | |
U.S. treasury | Level 1 | ||
Assets | ||
Cash equivalents | 19,700 | |
U.S. treasury | Level 2 | ||
Assets | ||
Cash equivalents | 0 | |
U.S. treasury | Level 3 | ||
Assets | ||
Cash equivalents | $ 0 |
Investments and Fair Value Me_6
Investments and Fair Value Measurements - Narrative (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Feb. 28, 2022 |
Debt Instrument [Line Items] | |||
Equity investment in a privately-held company | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 |
Nonrecurring | |||
Debt Instrument [Line Items] | |||
Assets measured at fair value on nonrecurring basis | 0 | 0 | |
Liabilities measured at fair value on nonrecurring basis | 0 | 0 | |
Convertible Senior Notes, Due 2023 | Level 2 | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Fair value of long-term debt | 300,000 | 300,000 | |
Convertible Senior Notes, Due 2025 | Level 2 | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Fair value of long-term debt | $ 700,700,000 | $ 687,100,000 |
Financial Statement Component_2
Financial Statement Components - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Cash and Cash Equivalents [Line Items] | ||||
Total cash and cash equivalents | $ 141,359 | $ 180,520 | $ 100,151 | $ 90,878 |
Cash | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total cash and cash equivalents | 124,063 | 123,260 | ||
Money market funds | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total cash and cash equivalents | 17,296 | 37,560 | ||
U.S. treasury | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total cash and cash equivalents | $ 0 | $ 19,700 |
Financial Statement Component_3
Financial Statement Components - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accounts Receivable [Line Items] | ||
Allowance for credit losses | $ (241) | $ (262) |
Accounts receivable, net | 88,085 | 87,494 |
Trade accounts receivable | ||
Accounts Receivable [Line Items] | ||
Trade accounts receivable | 77,712 | 77,621 |
Unbilled trade accounts receivable, net of advance client deposits | ||
Accounts Receivable [Line Items] | ||
Trade accounts receivable | $ 10,614 | $ 10,135 |
Financial Statement Component_4
Financial Statement Components - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 22,149 | $ 17,151 |
Other current assets | 6,660 | 9,159 |
Contract assets | 3,209 | 3,401 |
Prepaid expenses and other current assets | $ 32,018 | $ 29,711 |
Financial Statement Component_5
Financial Statement Components - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 215,274 | $ 215,755 | |
Accumulated depreciation and amortization | (114,217) | (114,534) | |
Property and equipment, net | 101,057 | 101,221 | |
Depreciation and amortization associated with property and equipment | 8,500 | $ 7,800 | |
Computer and network equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 142,408 | 148,789 | |
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 54,183 | 50,955 | |
Internal-use software development costs | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 8,690 | 6,111 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 3,990 | 3,326 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 6,003 | $ 6,574 |
Financial Statement Component_6
Financial Statement Components - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Feb. 28, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Other assets | $ 9,275 | $ 5,081 | |
Equity investment in a privately-held company | 2,000 | 2,000 | $ 2,000 |
Deferred tax assets | 3,965 | 3,976 | |
Total | $ 15,240 | $ 11,057 |
Financial Statement Component_7
Financial Statement Components - Schedule of Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued expenses | $ 21,964 | $ 19,343 |
Accrued compensation and benefits | 40,232 | 33,749 |
Accrued and other current liabilities | $ 62,196 | $ 53,092 |
Financial Statement Component_8
Financial Statement Components - Schedule of Long-term Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred revenue | $ 1,093 | $ 1,178 |
Deferred tax liabilities | 206 | 157 |
Other long-term liabilities | 3,614 | 1,745 |
Other long-term liabilities | $ 4,913 | $ 3,080 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill and Intangible Asset Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Finite-lived Intangible Assets [Roll Forward] | ||
Beginning of the period | $ 28,192 | |
Amortization | (2,846) | $ (2,900) |
End of the period | $ 25,346 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Acquired Finite-Lived Intangible Assets | |||
Gross Carrying Amount | $ 58,784 | $ 58,784 | |
Accumulated Amortization | (33,438) | (30,592) | |
Net Carrying Amount | $ 25,346 | $ 28,192 | |
Weighted Average Remaining Amortization period (Years) | 3 years | 3 years 2 months 12 days | |
Amortization of intangible assets | $ 2,846 | $ 2,900 | |
Developed technology | |||
Acquired Finite-Lived Intangible Assets | |||
Gross Carrying Amount | 56,214 | $ 56,214 | |
Accumulated Amortization | (31,647) | (28,881) | |
Net Carrying Amount | $ 24,567 | $ 27,333 | |
Weighted Average Remaining Amortization period (Years) | 3 years | 3 years 2 months 12 days | |
Acquired workforce | |||
Acquired Finite-Lived Intangible Assets | |||
Gross Carrying Amount | $ 470 | $ 470 | |
Accumulated Amortization | (470) | (470) | |
Net Carrying Amount | $ 0 | $ 0 | |
Weighted Average Remaining Amortization period (Years) | 0 years | 0 years | |
Customer relationships | |||
Acquired Finite-Lived Intangible Assets | |||
Gross Carrying Amount | $ 1,600 | $ 1,600 | |
Accumulated Amortization | (821) | (741) | |
Net Carrying Amount | $ 779 | $ 859 | |
Weighted Average Remaining Amortization period (Years) | 2 years 6 months | 2 years 8 months 12 days | |
Trademarks | |||
Acquired Finite-Lived Intangible Assets | |||
Gross Carrying Amount | $ 500 | $ 500 | |
Accumulated Amortization | (500) | (500) | |
Net Carrying Amount | $ 0 | $ 0 | |
Weighted Average Remaining Amortization period (Years) | 0 years | 0 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remaining 2023 | $ 8,024 | |
2024 | 7,527 | |
2025 | 5,595 | |
2026 | 4,200 | |
2027 | 0 | |
Thereafter | 0 | |
Net Carrying Amount | $ 25,346 | $ 28,192 |
Debt - Convertible Senior Notes
Debt - Convertible Senior Notes and Capped Call (Narrative) (Details) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 39 Months Ended | |||
May 31, 2020 USD ($) shares | May 31, 2018 USD ($) $ / shares | Jun. 30, 2020 USD ($) $ / shares | Mar. 31, 2023 USD ($) day $ / shares Rate shares | Mar. 31, 2022 USD ($) shares | Sep. 30, 2022 day trigger | May 21, 2020 $ / shares | |
Debt Instrument [Line Items] | |||||||
Cash consideration to repurchase note | $ | $ 0 | $ 31,905,000 | |||||
Common Stock | |||||||
Debt Instrument [Line Items] | |||||||
Equity component from partial repurchase of 2023 convertible senior notes (in shares) | shares | 540,000 | ||||||
Convertible Senior Notes, Due 2025 | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate on debt (as a percent) | 0.50% | ||||||
Proceeds from issuance of debt | $ | $ 728,800,000 | ||||||
Conversion ratio on convertible debt | Rate | 0.74437% | ||||||
Conversion price on convertible debt (in USD per share) | $ / shares | $ 134.34 | ||||||
Premium on conversion price in relation to closing price (as a percent) | 30% | ||||||
Closing price of common stock (in USD per share) | $ / shares | 72.29 | $ 103.34 | |||||
Share price of common stock with conversion premium (in USD per share) | $ / shares | $ 174.64 | ||||||
Sinking fund payment | $ | $ 0 | ||||||
Cap price of the capped call transactions (in USD per share) | $ / shares | $ 206.68 | ||||||
Number of shares covered in the capped call transactions (in shares) | shares | 5,600,000 | ||||||
Convertible Senior Notes, Due 2025 | Convertible Debt | Fundamental Change Event | |||||||
Debt Instrument [Line Items] | |||||||
Debt redemption price as percentage of principal amount (as a percent) | 100% | ||||||
Convertible Senior Notes, Due 2025 | Convertible Debt | On or After June 6, 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Number of trading days (in days) | day | 20 | ||||||
Number of consecutive trading days (in days) | day | 30 | ||||||
Threshold percentage of stock price trigger (as a percent) | 130% | ||||||
Debt redemption price as percentage of principal amount (as a percent) | 100% | ||||||
Number of trading days preceding notice of redemption (in days) | day | 2 | ||||||
Convertible Senior Notes, Due 2025 | Convertible Debt | Convertible, Term One | |||||||
Debt Instrument [Line Items] | |||||||
Number of trading days (in days) | day | 20 | ||||||
Number of consecutive trading days (in days) | day | 30 | ||||||
Threshold percentage of stock price trigger (as a percent) | 130% | ||||||
Convertible Senior Notes, Due 2025 | Convertible Debt | Convertible, Term Two | |||||||
Debt Instrument [Line Items] | |||||||
Number of trading days (in days) | day | 5 | ||||||
Number of consecutive trading days (in days) | day | 5 | ||||||
Threshold percentage of stock price trigger (as a percent) | 98% | ||||||
Convertible Senior Notes, Due 2025 | Convertible Debt | Private Placement | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of debt | $ | $ 747,500,000 | ||||||
Option to purchase additional debt through private offering | $ | $ 97,500,000 | ||||||
Convertible Senior Notes, Due 2023 | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate on debt (as a percent) | 0.125% | ||||||
Proceeds from issuance of debt | $ | $ 250,800,000 | ||||||
Conversion ratio on convertible debt | Rate | 2.44978% | ||||||
Conversion price on convertible debt (in USD per share) | $ / shares | $ 40.82 | ||||||
Cap price of the capped call transactions (in USD per share) | $ / shares | $ 62.80 | ||||||
Debt instrument, repurchase amount | $ | $ 181,000,000 | ||||||
Aggregate consideration to repurchase note | $ | 449,600,000 | ||||||
Cash consideration to repurchase note | $ | $ 181,000,000 | ||||||
Convertible debt | $ | $ 200,000 | ||||||
Number of conversion features triggered | trigger | 1 | ||||||
Conversion price per share, requiring conversion of instrument (in USD per share) | $ / shares | $ 53.07 | ||||||
Number of shares covered in the capped call transactions (in shares) | shares | 6,300,000 | ||||||
Convertible Senior Notes, Due 2023 | Convertible Debt | Common Stock | |||||||
Debt Instrument [Line Items] | |||||||
Equity component from partial repurchase of 2023 convertible senior notes (in shares) | shares | 2,723,581 | ||||||
Convertible Senior Notes, Due 2023 | Convertible Debt | Fundamental Change Event | |||||||
Debt Instrument [Line Items] | |||||||
Debt redemption price as percentage of principal amount (as a percent) | 100% | ||||||
Convertible Senior Notes, Due 2023 | Convertible Debt | Convertible, Term One | |||||||
Debt Instrument [Line Items] | |||||||
Number of trading days (in days) | day | 20 | 20 | |||||
Number of consecutive trading days (in days) | day | 30 | 30 | |||||
Threshold percentage of stock price trigger (as a percent) | 130% | 130% | |||||
Convertible Senior Notes, Due 2023 | Convertible Debt | Convertible, Term Two | |||||||
Debt Instrument [Line Items] | |||||||
Number of trading days (in days) | day | 5 | ||||||
Number of consecutive trading days (in days) | day | 5 | ||||||
Threshold percentage of stock price trigger (as a percent) | 98% | ||||||
Convertible Senior Notes, Due 2023 | Convertible Debt | Private Placement | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of debt | $ | $ 258,800,000 |
Debt - Schedule of Net Carrying
Debt - Schedule of Net Carrying Amount of the Liability Component of the Notes (Details) - Convertible Debt - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Principal | $ 747,700 | |
Convertible Senior Notes, Due 2025 | ||
Debt Instrument [Line Items] | ||
Principal | 747,500 | $ 747,500 |
Unamortized issuance costs | (8,216) | (9,124) |
Net carrying amount | 739,284 | 738,376 |
Convertible Senior Notes, Due 2023 | ||
Debt Instrument [Line Items] | ||
Principal | 169 | 169 |
Unamortized issuance costs | 0 | 0 |
Net carrying amount | $ 169 | $ 169 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Debt Instrument [Line Items] | ||
Total interest expense | $ 1,845 | $ 1,870 |
Convertible Senior Notes, Due 2025 | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Contractual interest expense | 934 | 934 |
Amortization of issuance costs | 908 | 899 |
Total interest expense | 1,842 | 1,833 |
Convertible Senior Notes, Due 2023 | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Contractual interest expense | 0 | 6 |
Amortization of issuance costs | 0 | 31 |
Total interest expense | $ 0 | $ 37 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Stockholders' Equity Capital Structure [Line Items] | ||
Common stock shares authorized (in shares) | 450,000,000 | |
Common stock par value (in USD per share) | $ 0.001 | |
Common stock shares issued (in shares) | 71,544,294 | 71,047,179 |
Common stock shares outstanding (in shares) | 71,544,294 | 71,047,179 |
Preferred stock shares authorized (up to) (in shares) | 5,000,000 | |
Preferred stock par value (in USD per share) | $ 0.001 | |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Closing market price of common stock (in USD per share) | $ 72.29 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Reserved for Future Issuance (Details) shares in Thousands | Mar. 31, 2023 shares |
Class of Stock | |
Total shares of common stock reserved (in shares) | 26,765 |
2014 Plan | |
Class of Stock | |
Total shares of common stock reserved (in shares) | 16,339 |
Stock options | |
Class of Stock | |
Total shares of common stock reserved (in shares) | 1,303 |
RSUs (includes PRSUs) | |
Class of Stock | |
Total shares of common stock reserved (in shares) | 4,842 |
Shares available for future issuance under ESPP | |
Class of Stock | |
Total shares of common stock reserved (in shares) | 4,281 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Activity (Details) - Stock options $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Options Outstanding [Roll Forward] | |
Outstanding, beginning balance (in shares) | shares | 1,481 |
Options granted (in shares) | shares | 0 |
Options exercised (in shares) | shares | (139) |
Options forfeited or expired (in shares) | shares | (39) |
Outstanding, ending balance (in shares) | shares | 1,303 |
Options Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding, beginning balance, weighted average exercise price (in USD per share) | $ / shares | $ 47.75 |
Options granted, weighted average exercise price (in USD per share) | $ / shares | 0 |
Options exercised, weighted average exercise price (in USD per share) | $ / shares | 22.49 |
Options forfeited or expired, weighted average exercise price (in USD per share) | $ / shares | 139.87 |
Outstanding, ending balance, weighted average exercise price (in USD per share) | $ / shares | $ 47.66 |
Outstanding, ending balance, weighted average remaining contractual life (years) | 4 years 6 months |
Outstanding, ending balance, aggregate intrinsic value | $ | $ 49,139 |
Stockholders' Equity - RSU Acti
Stockholders' Equity - RSU Activity (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
RSUs (includes PRSUs) | |
Number of Shares | |
Outstanding, beginning balance (in shares) | 3,718,000 |
RSUs granted (in shares) | 1,673,000 |
RSUs vested and released (in shares) | (358,000) |
RSUs forfeited or canceled (in shares) | (191,000) |
Outstanding, ending balance (in shares) | 4,842,000 |
Weighted Average Grant Date Fair Value Per Share | |
Outstanding, beginning balance, weighted-average grant date fair value per share (in USD per share) | $ / shares | $ 103.55 |
RSUs granted, weighted average grant date fair value (in USD per share) | $ / shares | 71.33 |
RSUs vested and released, weighted average grant date fair value (in USD per share) | $ / shares | 114.70 |
RSUs forfeited or canceled, weighted average grant date fair value (in USD per share) | $ / shares | 111.80 |
Outstanding, ending balance, weighted-average grant date fair value per share (in USD per share) | $ / shares | $ 90 |
Performance Based And Market Based Restricted Stock Units PRSUs | |
Number of Shares | |
RSUs granted (in shares) | 35,921 |
Stockholders' Equity - Performa
Stockholders' Equity - Performance-Based Restricted Stock Units (Narrative) (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2022 | Feb. 28, 2022 | Mar. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2023 shares | Mar. 31, 2023 USD ($) | Mar. 31, 2023 period | Mar. 31, 2023 Rate | Mar. 31, 2023 installment | Dec. 31, 2022 USD ($) goal installment shares | |
Market-Based PRSUs | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Equity instruments granted (in shares) | shares | 35,921 | 284,282 | ||||||||
Equity instruments granted, weighted average grant date fair value | $ | $ 3.1 | $ 30.6 | ||||||||
PRSUs | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Earnout target percentage (as a percent) | 58.70% | |||||||||
Number of performance periods | period | 3 | |||||||||
Term of the performance period (in years) | 1 year | |||||||||
Award vesting percentage | 33.33% | |||||||||
Performance periods limited to 100% of target | period | 2 | |||||||||
Earnout target percentage, maximum for 2022 and 2023 (as a percent) | 1 | |||||||||
Actual total shareholder return (as a percent) | (52.64%) | |||||||||
Relative total shareholder return ranking (as a percent) | 3,020% | |||||||||
PRSUs | Tranche One | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Award vesting percentage | 33.33% | |||||||||
PRSUs | Tranche Two | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Award vesting percentage | 66.67% | |||||||||
PRSUs | Payout At The 25th TSR Percentile | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Earnout target percentage (as a percent) | 50% | |||||||||
PRSUs | Payout At The 55th TSR Percentile | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Earnout target percentage (as a percent) | 100% | |||||||||
PRSUs | Payout At The 90th TSR Percentile | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Earnout target percentage (as a percent) | 200% | |||||||||
PRSUs | Minimum | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Earnout target percentage (as a percent) | 0 | 0% | ||||||||
PRSUs | Maximum | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Earnout target percentage (as a percent) | 2 | 200% | ||||||||
PRSUs | Maximum | Shareholder for Performance Any Period is Negative | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Earnout target percentage (as a percent) | 1 | |||||||||
PRSUs | Maximum | Executive Employment Terminates due to Death by end of 2024 | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Earnout target percentage (as a percent) | 1 | |||||||||
PRSUs | Maximum | Executive Employment Terminates due to Disability by end of 2024 | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Earnout target percentage (as a percent) | 0.50 | |||||||||
Revenue-Based PRSUs | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Equity instruments granted (in shares) | shares | 66,167 | |||||||||
Equity instruments granted, weighted average grant date fair value | $ | $ 6.6 | |||||||||
Number of quarterly revenue goals | goal | 2 | |||||||||
Revenue-Based PRSUs | Tranche One | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Number of quarterly installments | installment | 4 | |||||||||
Revenue-Based PRSUs | Tranche Two | ||||||||||
Stockholders' Equity Capital Structure [Line Items] | ||||||||||
Number of quarterly installments | installment | 8 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock-based Compensation Expense | ||
Total stock-based compensation expense | $ 50,743 | $ 39,394 |
Stock options | ||
Stock-based Compensation Expense | ||
Unrecognized stock-based compensation expense | $ 9,144 | |
Weighted-average amortization period | 2 years | |
RSU (excluding PRSUs) | ||
Stock-based Compensation Expense | ||
Unrecognized stock-based compensation expense | $ 375,880 | |
Weighted-average amortization period | 2 years 9 months 18 days | |
PRSU | ||
Stock-based Compensation Expense | ||
Unrecognized stock-based compensation expense | $ 22,462 | |
Weighted-average amortization period | 2 years 2 months 12 days | |
ESPP | ||
Stock-based Compensation Expense | ||
Unrecognized stock-based compensation expense | $ 1,086 | |
Weighted-average amortization period | 1 month 6 days | |
Cost of revenue | ||
Stock-based Compensation Expense | ||
Total stock-based compensation expense | $ 9,333 | 7,793 |
Research and development | ||
Stock-based Compensation Expense | ||
Total stock-based compensation expense | 12,382 | 10,145 |
Sales and marketing | ||
Stock-based Compensation Expense | ||
Total stock-based compensation expense | 17,045 | 13,424 |
General and administrative | ||
Stock-based Compensation Expense | ||
Total stock-based compensation expense | $ 11,983 | $ 8,032 |
Stockholders' Equity - Valuatio
Stockholders' Equity - Valuation Assumptions (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Class of Stock | ||
Closing price of common stock as of grant date (February 28, 2022) (in USD per share) | $ 72.29 | |
Dividend yield (in percent) | 0% | 0% |
Stock options | ||
Class of Stock | ||
Expected term (years) | 6 years | |
Volatility | 46% | |
Risk-free interest rate | 1.80% | |
Dividend yield (in percent) | 0% | |
PRSUs | ||
Class of Stock | ||
Closing price of common stock as of grant date (February 28, 2022) (in USD per share) | $ 68.15 | $ 110 |
Expected term (years) | 2 years 10 months 2 days | 2 years 10 months 2 days |
Volatility | 51.10% | 48.80% |
Risk-free interest rate | 4.50% | 1.60% |
Dividend yield (in percent) | 0% | 0% |
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, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (27,248) | $ (34,120) |
Weighted-average shares used in computing basic loss per share (in shares) | 71,259 | 68,974 |
Weighted-average shares used in computing diluted loss per share (in shares) | 71,259 | 68,974 |
Basic loss per share (in USD per share) | $ (0.38) | $ (0.49) |
Diluted loss per share (in USD per share) | $ (0.38) | $ (0.49) |
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, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Total (in shares) | 11,713 | 11,046 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Total (in shares) | 1,303 | 1,768 |
RSUs (includes PRSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Total (in shares) | 4,842 | 3,236 |
Convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Total (in shares) | 5,568 | 6,042 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 527 | $ 2,256 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Convertible Debt | |
Other Commitments [Line Items] | |
Debt balance | $ 747.7 |
Hosting and telecommunications agreement | |
Other Commitments [Line Items] | |
Total commitments under agreements | 15.3 |
Purchase Commitment - Cloud Services Agreement | |
Other Commitments [Line Items] | |
Expiring commercial commitment balance | 46.3 |
Commercial commitment to be paid remainder of 2023 | 25.2 |
Commercial commitment to be paid in year 2024 | 17.1 |
Commercial commitment to be paid in year 2025 | $ 4 |
Maximum | Hosting and telecommunications agreement | |
Other Commitments [Line Items] | |
Period for various agreements (in months) | 60 months |
Geographical Information - Sche
Geographical Information - Schedule of Revenue and Property and Equipment by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Revenues from External Customers and Long-Lived Assets | |||
Total revenue | $ 218,439 | $ 182,777 | |
Property and equipment, net | 101,057 | $ 101,221 | |
United States | |||
Revenues from External Customers and Long-Lived Assets | |||
Total revenue | 195,363 | 167,247 | |
Property and equipment, net | 93,001 | 92,659 | |
International | |||
Revenues from External Customers and Long-Lived Assets | |||
Total revenue | 23,076 | $ 15,530 | |
Property and equipment, net | $ 8,056 | $ 8,562 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Lessee, Lease, Description [Line Items] | |
Operating lease termination notice, period (in days) | 30 days |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, term of contract (in years) | 1 year |
Operating lease, extension term (in years) | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, term of contract (in years) | 8 years |
Operating lease, extension term (in years) | 5 years |
Leases - Lease Cost and Supplem
Leases - Lease Cost and Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 3,382 | $ 2,900 |
Finance lease cost: | ||
Amortization of right-of-use assets | 63 | 333 |
Total finance lease cost | 63 | 333 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash used in operating leases | (3,275) | (2,709) |
Operating leases | $ 4,153 | $ 236 |
Leases - Balance Sheet Disclosu
Leases - Balance Sheet Disclosures (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Operating leases | ||
Operating lease right-of-use assets | $ 45,339 | $ 44,120 |
Operating lease liabilities | 11,739 | 10,626 |
Operating lease liabilities — less current portion | 41,703 | 41,389 |
Total operating lease liabilities | 53,442 | 52,015 |
Finance leases | ||
Property and equipment, gross | 30,015 | 36,282 |
Less: accumulated depreciation and amortization | (29,999) | (36,203) |
Property and equipment, net | $ 16 | $ 79 |
Finance Lease, Right-of-Use Asset, Balance Sheet Location [Extensible List] | Property and equipment, net | Property and equipment, net |
Leases - Weighted Average Remai
Leases - Weighted Average Remaining Terms and Discount Rates (Details) | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Weighted average remaining lease term | 6 years 1 month 6 days | 6 years 4 months 24 days |
Weighted average discount rate | 3.60% | 3.40% |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
Remaining 2023 | $ 10,155 | |
2024 | 11,379 | |
2025 | 8,436 | |
2026 | 6,541 | |
2027 | 5,733 | |
Thereafter | 17,081 | |
Total future minimum lease payments | 59,325 | |
Less: imputed interest | (5,883) | |
Total | $ 53,442 | $ 52,015 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
May 01, 2023 | May 31, 2020 | Mar. 31, 2022 | |
Subsequent Event [Line Items] | |||
Early settlement of convertible senior notes | $ (244) | ||
Common Stock | |||
Subsequent Event [Line Items] | |||
Early settlement of convertible senior notes (in shares) | 540,000 | ||
Convertible Senior Notes, Due 2023 | Convertible Debt | |||
Subsequent Event [Line Items] | |||
Debt instrument, repurchase amount | $ 181,000 | ||
Convertible Senior Notes, Due 2023 | Convertible Debt | Common Stock | |||
Subsequent Event [Line Items] | |||
Early settlement of convertible senior notes (in shares) | 2,723,581 | ||
Subsequent Event | Convertible Senior Notes, Due 2023 | Convertible Debt | |||
Subsequent Event [Line Items] | |||
Debt instrument, repurchase amount | $ 194,700 | ||
Subsequent Event | Convertible Senior Notes, Due 2023 | Convertible Debt | Common Stock | |||
Subsequent Event [Line Items] | |||
Early settlement of convertible senior notes (in shares) | 370,877 | ||
Early settlement of convertible senior notes | $ 74,500 |
Uncategorized Items - fivn-2023
Label | Element | Value |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 467,000 |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 0 |