Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | AVLR | |
Entity Registrant Name | AVALARA, INC. | |
Entity Central Index Key | 0001348036 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 76,941,547 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-38525 | |
Entity Tax Identification Number | 91-1995935 | |
Entity Address, Address Line One | 255 South King Street | |
Entity Address, Address Line Two | Suite 1800 | |
Entity Address, City or Town | Seattle | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98104 | |
City Area Code | 206 | |
Local Phone Number | 826-4900 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock, Par Value $0.0001 Per Share | |
Security Exchange Name | NYSE | |
Entity Incorporation, State or Country Code | WA | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | |||||||||
Cash and cash equivalents | $ 446,563 | $ 142,322 | $ 138,093 | $ 14,075 | |||||
Trade accounts receivable—net of allowance for doubtful accounts of $632 and $521, respectively | 49,124 | $ 39,482 | 40,287 | ||||||
Deferred commissions | 8,402 | 4,464 | 0 | ||||||
Prepaid expenses and other current assets | 13,856 | 11,307 | |||||||
Total current assets before customer fund assets | 517,945 | 193,916 | |||||||
Funds held from customers | 16,665 | 13,113 | |||||||
Receivable from customers—net of allowance of $293 and $198, respectively | 690 | 270 | |||||||
Total current assets | 535,300 | 207,299 | |||||||
Noncurrent assets: | |||||||||
Property and equipment—net | 34,537 | 33,373 | |||||||
Goodwill | 100,926 | 61,300 | |||||||
Intangible assets—net | 24,543 | 19,371 | |||||||
Deferred commissions | 27,206 | 14,803 | 0 | ||||||
Other noncurrent assets | 2,420 | 1,589 | |||||||
Total assets | 724,932 | 322,932 | |||||||
Current liabilities: | |||||||||
Trade payables | 10,962 | 4,847 | |||||||
Accrued expenses | 49,864 | 44,191 | 42,101 | ||||||
Accrued earnout liabilities | 6,102 | 116 | |||||||
Deferred revenue | 147,713 | 122,103 | 125,260 | ||||||
Total current liabilities before customer fund obligations | 214,641 | 172,324 | |||||||
Customer fund obligations | 17,306 | 13,349 | |||||||
Total current liabilities | 231,947 | 185,673 | |||||||
Noncurrent liabilities: | |||||||||
Deferred revenue | 753 | 1,300 | 9,393 | ||||||
Deferred tax liability | 698 | 560 | |||||||
Deferred rent | 15,905 | 17,317 | |||||||
Accrued earnout liabilities | 9,399 | 0 | |||||||
Other noncurrent liabilities | 2,361 | 436 | |||||||
Total liabilities | 261,063 | 213,379 | |||||||
Commitments and contingencies | 0 | 0 | |||||||
Shareholders' equity: | |||||||||
Preferred stock, $0.0001 par value– no shares issued and outstanding at September 30, 2019 and December 31, 2018, and 20,000 shares authorized as of September 30, 2019 and December 31, 2018 | 0 | 0 | |||||||
Common stock, $0.0001 par value– 76,889 and 66,769 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively, and 600,000 shares authorized as of September 30, 2019 and December 31, 2018 | 8 | 7 | |||||||
Additional paid-in capital | 961,733 | 599,493 | |||||||
Accumulated other comprehensive loss | (3,122) | (2,345) | |||||||
Accumulated deficit | (494,750) | $ (459,980) | (487,602) | ||||||
Total shareholders’ equity | 463,869 | $ 452,128 | $ 168,973 | 109,553 | $ 122,249 | $ 142,154 | $ (407,163) | $ (393,592) | |
Total liabilities and shareholders' equity | $ 724,932 | $ 322,932 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Trade accounts receivable, allowance for doubtful accounts | $ 632 | $ 521 |
Receivable from customers, allowance | $ 293 | $ 198 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares, issued | 76,889,000 | 66,769,000 |
Common stock, shares, outstanding | 76,889,000 | 66,769,000 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands | Oct. 31, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Revenue: | |||||||||
Revenues | $ 98,525,000 | $ 69,919,000 | $ 274,794,000 | $ 195,175,000 | |||||
Cost of revenue: | |||||||||
Cost of revenues | 29,778,000 | 20,236,000 | 82,420,000 | 56,377,000 | |||||
Gross profit | 68,747,000 | 49,683,000 | 192,374,000 | 138,798,000 | |||||
Operating expenses: | |||||||||
Research and development | 21,871,000 | 13,285,000 | 56,823,000 | 38,332,000 | |||||
Sales and marketing | 40,313,000 | 41,276,000 | 119,199,000 | 119,187,000 | |||||
General and administrative | 20,511,000 | 10,235,000 | 53,764,000 | 28,787,000 | |||||
Goodwill impairment | $ 0 | 0 | 9,174,000 | 0 | 9,174,000 | ||||
Total operating expenses | 82,695,000 | 73,970,000 | 229,786,000 | 195,480,000 | |||||
Operating loss | (13,948,000) | (24,287,000) | (37,412,000) | (56,682,000) | |||||
Other (income) expense: | |||||||||
Interest income | (2,202,000) | (676,000) | (4,251,000) | (811,000) | |||||
Interest expense | 2,000 | 534,000 | 286,000 | 2,495,000 | |||||
Other (income) expense, net | 265,000 | 49,000 | 694,000 | (423,000) | |||||
Total other (income) expense, net | (1,935,000) | (93,000) | (3,271,000) | 1,261,000 | |||||
Loss before income taxes | (12,013,000) | (24,194,000) | (34,141,000) | (57,943,000) | |||||
Provision for (benefit from) income taxes | 341,000 | (91,000) | 629,000 | (825,000) | |||||
Net loss | $ (12,354,000) | $ (13,173,000) | $ (9,243,000) | $ (24,103,000) | $ (17,766,000) | $ (15,249,000) | $ (34,770,000) | $ (57,118,000) | |
Net loss per share attributable to common shareholders, basic and diluted | $ (0.16) | $ (0.36) | $ (0.48) | $ (1.95) | |||||
Weighted average shares of common stock outstanding, basic and diluted | 76,156 | 66,590 | 72,064 | 29,269 | |||||
Subscription and Returns | |||||||||
Revenue: | |||||||||
Revenues | $ 91,986,000 | $ 64,611,000 | $ 255,225,000 | $ 182,326,000 | |||||
Cost of revenue: | |||||||||
Cost of revenues | 25,621,000 | 17,330,000 | 69,537,000 | 47,984,000 | |||||
Professional Services | |||||||||
Revenue: | |||||||||
Revenues | 6,539,000 | 5,308,000 | 19,569,000 | 12,849,000 | |||||
Cost of revenue: | |||||||||
Cost of revenues | $ 4,157,000 | $ 2,906,000 | $ 12,883,000 | $ 8,393,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||||||
Net loss | $ (12,354) | $ (13,173) | $ (9,243) | $ (24,103) | $ (17,766) | $ (15,249) | $ (34,770) | $ (57,118) |
Other comprehensive income (loss)—Foreign currency translation | (591) | $ 276 | $ (462) | (242) | $ (3,048) | $ 603 | (777) | (2,687) |
Total comprehensive loss | $ (12,945) | $ (24,345) | $ (35,547) | $ (59,805) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (34,770,000) | $ (57,118,000) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 11,684,000 | 9,390,000 |
Goodwill impairment | 0 | 9,174,000 |
Stock-based compensation | 25,906,000 | 11,411,000 |
Deferred tax expense (benefit) | 138,000 | (1,110,000) |
Amortization of deferred rent | (778,000) | 231,000 |
Non-cash change in earnout liability | 610,000 | (430,000) |
Non-cash bad debt expense (recovery) | 602,000 | (382,000) |
Other | 227,000 | 526,000 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (9,648,000) | (7,852,000) |
Prepaid expenses and other current assets | (3,274,000) | (2,688,000) |
Deferred commissions | (16,340,000) | 0 |
Other noncurrent assets | (831,000) | (549,000) |
Trade payables | 4,818,000 | (3,353,000) |
Accrued expenses | 2,305,000 | 6,095,000 |
Deferred rent (lease incentives) | 0 | 579,000 |
Deferred revenue | 24,782,000 | 25,978,000 |
Net cash provided by (used in) operating activities | 5,431,000 | (10,098,000) |
Cash flows from investing activities: | ||
Net (increase) decrease in customer fund assets | (3,986,000) | 2,053,000 |
Cash paid for acquired intangible assets | (139,000) | (5,002,000) |
Cash paid for acquisitions of businesses | (30,310,000) | 0 |
Purchase of property and equipment | (7,196,000) | (12,914,000) |
Net cash used in investing activities | (41,631,000) | (15,863,000) |
Cash flows from financing activities: | ||
Proceeds from common stock offering, net of underwriting discounts | 274,705,000 | 192,510,000 |
Payments of deferred financing costs | (555,000) | (2,084,000) |
Payments on credit facility | 0 | (63,000,000) |
Proceeds from credit facility | 0 | 23,000,000 |
Repayment of note payable | 0 | (234,000) |
Net increase (decrease) in customer fund obligations | 3,986,000 | (2,053,000) |
Proceeds from exercise of stock options and common stock warrants | 51,583,000 | 5,787,000 |
Proceeds from purchases of stock under employee stock purchase plan | 12,293,000 | 0 |
Taxes paid related to net share settlement of stock-based awards | (1,183,000) | (2,326,000) |
Repurchase of shares | 0 | (1,806,000) |
Payment related to business combination earnouts | (375,000) | 0 |
Net cash provided by financing activities | 340,454,000 | 149,794,000 |
Foreign currency effect on cash and cash equivalents | (13,000) | 185,000 |
Net change in cash and cash equivalents | 304,241,000 | 124,018,000 |
Cash and cash equivalents—Beginning of period | 142,322,000 | 14,075,000 |
Cash and cash equivalents—End of period | 446,563,000 | 138,093,000 |
Supplemental cash flow disclosures: | ||
Cash paid for interest expense | 122,000 | 2,367,000 |
Cash paid for income taxes | 417,000 | 314,000 |
Non-cash investing and financing activities: | ||
Accrued purchase price related to acquisitions | 4,902,000 | 0 |
Accrued value of earnout related to acquisitions of businesses | 15,351,000 | 0 |
Property and equipment purchased under tenant improvement allowance | 0 | 1,062,000 |
Property and equipment additions in accounts payable and accrued expenses | 914,000 | 607,000 |
Deferred financing costs in accounts payable and accrued expenses | 0 | 298,000 |
Fair value of common stock issued or issuable to purchase intangible assets | 98,000 | 2,555,000 |
Cashless exercises of options and warrants | 5,000 | 9,214,000 |
Cashless redemptions of options and warrants | $ 98,000 | $ 11,541,000 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Operations | 1. Nature of Operations Avalara, Inc. (the “Company”) provides software solutions that help businesses of all types and sizes comply with transaction tax requirements worldwide. The Company offers a broad and growing suite of compliance solutions for transaction taxes, such as sales and use tax, value-added tax (VAT), excise tax, lodging tax, and communications tax. These solutions enable customers to automate the process of determining taxability, identifying applicable tax rates, determining and collecting taxes, preparing and filing returns, remitting taxes, maintaining tax records, and managing compliance documents. The Company, a Washington corporation, was originally incorporated in 1999 and is headquartered in Seattle, Washington. The Company has wholly owned subsidiaries in the United Kingdom, Canada, Belgium, India, and Brazil that provide business development, software development, and support services. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Interim Financial Information The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2019. The accompanying interim consolidated balance sheet as of September 30, 2019, the consolidated interim statements of operations for the three and nine months ended September 30, 2019 and 2018, the consolidated statements of comprehensive loss for the three and nine months ended September 30, 2019 and 2018, and the consolidated statements of cash flows for the nine months ended September 30, 2019 and 2018, are unaudited. The unaudited interim consolidated financial statements have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the consolidated financial statements. The operating results for the nine months ended September 30, 2019 are not necessarily indicative of the results expected for the full year ending December 31, 2019. The Company adopted the new revenue recognition accounting standard, Accounting Standards Codification (“ASC”) 606, effective January 1, 2019 on a modified retrospective basis (see Recently Adopted Accounting Standards Principles of Consolidation The accompanying consolidated financial statements include those of the Company and its subsidiaries after elimination of all intercompany accounts and transactions. Segments The Company operates its business as one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. Use of Estimates The preparation of financial statements 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could materially differ from those estimates. Fair Value Measurements The Company applies the fair value measurement and disclosure provisions of the Accounting Standards Codification. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 : Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 : Inputs are quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 : Inputs are unobservable inputs based on the Company’s assumptions and valuation techniques used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. The Company’s assessment of the significance of an input to the fair value measurement requires judgment, which may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. The carrying amounts reported in the consolidated financial statements approximate the fair value for cash equivalents, trade accounts receivable, trade payables, and accrued expenses due to their short-term nature. Long-Lived Assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. An impairment is recognized in the event the carrying value of such assets is not recoverable. If the carrying value is not recoverable, the fair value is determined, and an impairment is recognized for the amount by which the carrying value exceeds the fair value. No impairment of long-lived assets occurred in the first nine months of 2019. Self-Insurance Beginning August 1, 2019, the Company established a self-insured healthcare plan for eligible U.S. employees. Under the plan, the Company pays healthcare claims and fees to the plan administrator. Total claim payments are limited by stop loss insurance policies. As there generally is a lag between the time a claim is incurred by a participant and the time the claim is submitted for payment, the Company has recorded a self-insurance reserve for estimated outstanding claims within accrued expenses in the consolidated balance sheets. Income Taxes The Company’s deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and income tax basis of assets and liabilities and are measured using the enacted tax rates expected to apply in the years when the differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. The Company assesses its income tax positions and records income taxes based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. The Company determines whether its uncertain tax positions are more likely than not to be sustained upon examination based on the technical merits of the position. For tax positions not meeting the more likely than not threshold, the tax amount recognized in the consolidated financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority. Stock-Based Compensation The Company accounts for stock-based compensation by calculating the fair value of each option, common stock warrant, restricted stock unit (“RSU”), or purchase right issued under the employee stock purchase plan at the date of grant. The fair value of stock options, common stock warrants, and purchase rights issued under the employee stock purchase plan is estimated by applying the Black-Scholes option-pricing model. This model uses the fair value of the Company’s underlying common stock at the measurement date, the expected or contractual term of the option, warrant or purchase right, the expected volatility of its common stock, risk-free interest rates, and expected dividend yield of its common stock. The fair value of an RSU is determined using the fair value of the Company’s underlying common stock on the date of grant. Reclassifications Certain prior period amounts have been reclassified to conform to current period presentation. Interest income on funds held from customers of $0.4 million and $0.6 million for the three months and nine months ended September 30, 2018 were reclassified from interest income within total other (income) expense, net to subscription and returns revenue in the accompanying consolidated statements of operations. Revenue Recognition – ASC 606 The Company primarily generates revenue from fees paid for subscriptions to tax compliance solutions and fees paid for services performed in preparing and filing tax returns on behalf of its customers. Amounts that have been invoiced are recorded in trade accounts receivable and deferred revenue, contract liabilities, or revenue, depending upon whether the revenue recognition criteria have been met. Revenue is recognized once the customer is provisioned and services are provided in an amount that reflects the consideration expected to be entitled to in exchange for those services. The Company’s revenue recognition policy follows guidance from ASC 606, Revenue from Contracts with Customers The Company determines revenue recognition through the following five-step framework: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the Company satisfies a performance obligation. The Company identifies performance obligations in its contracts with customers, which primarily include subscription services and professional services. The transaction price is determined based on the amount to which the Company expects to be entitled to in exchange for providing the promised services to the customer. The transaction price in the contract is allocated to each distinct performance obligation on a relative standalone selling price basis. Revenue is recognized when performance obligations are satisfied. Contract payment terms are typically net 30 days. Collectability is assessed based on a number of factors including collection history and creditworthiness of the customer, and the Company may mitigate exposure to credit risk by requiring payments in advance. If collectability of substantially all consideration to which the Company is entitled under the contract is determined to be not probable, revenue is not recorded until collectability becomes probable at a later date. Revenue is recorded based on the transaction price excluding amounts collected on behalf of third parties, such as sales taxes, which are collected on behalf of, and remitted to, governmental authorities. Subscription and Returns Revenue Subscription and returns revenue primarily consists of contractually agreed upon fees paid for using the Company’s cloud-based solutions, which include tax determination and compliance management services, and fees paid for preparing and filing transaction tax returns on behalf of customers. Under the Company’s subscription agreements, customers select a price plan that includes an allotted maximum number of transactions over the subscription term. Unused transactions are not carried over to the customer’s next subscription term, and customers are not entitled to refunds of fees paid or relief from fees due in the event they do not use the allotted number of transactions. If customers exceed the maximum transaction level within their price plan, the Company will generally upgrade the customer to a higher transaction price plan or, in some cases, charge overage fees on a per transaction basis. The Company’s subscription arrangements do not provide the customer with the right to take possession of the software supporting the cloud-based application services. The Company’s standard subscription contracts are non-cancelable except where contract terms provide rights to cancel in the first 60 days of the contract term. Cancellations under the Company’s standard subscription contracts are not material, and do not have a significant impact on revenue recognized. Tax returns processing services include collection of tax data and amounts, preparation of compliance forms, and submission to taxing authorities. Returns processing services are primarily charged on a subscription basis for an allotted number of returns to process within a given time period. Revenue is recognized ratably over the contractual term of the arrangement, beginning on the date that the service is made available to the customer. The Company invoices its subscription customers for the initial term at contract signing and at each subscription renewal. Initial terms generally range from 12 to 18 months, and renewal periods are typically one year. Amounts that are contractually billable and have been invoiced, or which have been collected as cash, are initially recorded as deferred revenue or contract liabilities. While most of the Company’s customers are invoiced once at the beginning of the term, a portion of customers are invoiced semi-annually, quarterly, or monthly. Included in the total subscription fee for cloud-based solutions are non-refundable upfront fees that are typically charged to new customers. These fees are associated with work performed to set up a customer with the Company’s services, and do not represent a distinct good or service. Instead, the fees are included within the transaction price and allocated to the remaining performance obligations in the contract. The Company recognizes revenue for these fees in accordance with the revenue recognition for those performance obligations. Also included in subscription and returns revenue is interest income on funds held for customers. The Company uses trust accounts at FDIC-insured institutions to provide tax remittance services to customers and collect funds from customers in advance of remittance to tax authorities. After collection and prior to remittance, the Company earns interest on these funds. Professional Services Revenue The Company bills for professional service arrangements on a fixed fee, milestone, or time and materials basis. Professional services revenue includes fees from providing tax analysis, configurations, data migrations, integration, training, and other support services. The transaction price allocated to professional services performance obligations is recognized as revenue as services are performed or upon completion of work. Judgments and Estimates The Company’s contracts with customers often include obligations to provide multiple services to a customer. Determining whether services are considered distinct performance obligations that should be accounted for separately from one another requires judgment. Subscription services and professional services are both distinct performance obligations that are accounted for separately. Judgment is required to determine the standalone selling price (“SSP”) for each distinct performance obligation. The Company allocates revenue to each performance obligation based on the relative SSP. The Company determines SSP for performance obligations based on overall pricing objectives, which take into consideration observable prices, market conditions and entity-specific factors. This includes a review of historical data related to the services being sold and customer demographics. The Company uses a range of amounts to estimate SSP for performance obligations. There is typically more than one SSP for individual services due to the stratification of those services by information, such as size and type of customer. The revenue recognition accounting policy for ASC 605 is included in the Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 28, 2019. The revenue recognition accounting policy for ASC 605 is applied to the disclosures in Note 6, which include amounts presented for 2019. There were no changes to the ASC 605 policy during the first nine months of 2019. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company has determined that certain costs related to employee sales incentive programs (sales commissions) and partner commission programs represent incremental costs of obtaining a contract and therefore should be capitalized. Capitalized costs are included in deferred commissions on the consolidated balance sheets. These deferred commissions are amortized over an estimated period of benefit, generally six years. The Company determines the period of benefit by taking into consideration past experience with customers, the expected life of acquired technology that generates revenue, industry peers, and other available information. The period of benefit is generally longer than the term of the initial contract because of anticipated renewals. The Company elected to apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense if the amortization period of the asset would have been one year or less. Recently Adopted Accounting Standards As an emerging growth company, or “EGC”, the Jumpstart Our Business Startups Act, or the JOBS Act, allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use the adoption dates applicable to private companies. As a result, the Company’s consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. The Company will no longer qualify as an EGC on December 31, 2019, and at that time will begin to adopt accounting pronouncements at dates applicable to public companies. ASU No. 2014-09 In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09 which, along with subsequent ASUs, amends the existing accounting standards for revenue recognition, and is codified as ASC 606. This guidance is based on principles that govern the recognition of revenue at the amount an entity expects to be entitled to receive as services are provided to customers. The Company adopted the new revenue recognition standard as of January 1, 2019 on a modified retrospective basis and applied the new revenue recognition standard only to contracts that were not completed contracts prior to January 1, 2019. The cumulative effect of the changes made to the consolidated January 1, 2019 balance sheet resulting from the adoption of ASC 606 was as follows (in thousands): Balance at December 31, 2018 Adjustments due to ASC 606 Balance at January 1, 2019 Assets Trade accounts receivable $ 40,287 $ (805 ) $ 39,482 Deferred commissions, current — 4,464 4,464 Deferred commissions, noncurrent — 14,803 14,803 Liabilities and shareholders' equity Accrued expenses 42,101 2,090 44,191 Deferred revenue, current 125,260 (3,157 ) 122,103 Deferred revenue, noncurrent 9,393 (8,093 ) 1,300 Accumulated deficit (487,602 ) 27,622 (459,980 ) The adoption changed the revenue recognition for non-refundable upfront fees included with new or upgraded subscriptions. Prior to the adoption of the new revenue recognition standard, the Company recognized revenue for these fees over the expected term of the customer relationship. Under the new guidance, the transaction price is allocated to distinct performance obligations. Because upfront fees do not represent a distinct performance obligation, any such fees will be recognized over the period in which distinct performance obligations in the contract are satisfied, which is typically the subscription term. The new revenue recognition standard also changed the determination of the contract term associated with subscriptions that were upgraded during the subscription term. Prior to the adoption of the new revenue recognition standard, additional fees associated with an upgraded subscription for services already delivered were recognized upon upgrade. Under the new guidance, the fees related to the upgraded subscriptions are recognized prospectively over the contract term. The adoption also changed the revenue recognition for contracts that include non-standard, extended customer cancellation provisions. Under the new guidance, a contract only exists for the period of time in which a contract cannot be cancelled, which generally corresponds to the termination notice period. Prior to the adoption of the new revenue recognition standard, non-standard, extended cancellation provisions were not a factor in determining the term of a contract. To the extent cash is received for a contract that includes a non-standard, extended cancellation provision, deferred revenue is recognized only for the amount for which the Company has an enforceable right. A separate contract liability is established for the remaining amount. The new revenue recognition standard requires the Company to estimate variable consideration at contract inception as an increase or decrease to the transaction price. The total transaction price, inclusive of variable consideration, is allocated to performance obligations, or distinct service periods within a performance obligation, on a relative SSP basis and recognized as performance obligations are satisfied. Prior to the adoption of the new revenue recognition standard, overage fees, concessions, and cancellations allowed in the first 60 days of a standard subscription contract were recognized as they occurred. The new revenue recognition standard requires capitalization of certain incremental costs of obtaining a contract, such as certain employee sales commissions and partner commissions, which impacts the period in which the expense is recorded. Prior to the adoption of the new revenue recognition standard, those commission costs were expensed as incurred. Under the new revenue recognition standard, the Company is required to capitalize incremental costs of obtaining a contract and amortize them over the expected period of benefit, which is generally six years. This results in a deferral of sales commission and partner commission expense each period. For further discussion regarding the impacts of adopting the new revenue recognition standard, see Note 6. ASU No. 2016-15 In August 2016, the FASB issued ASU No. 2016-15, related to classification of certain cash receipts and payments. ASU No. 2016-15 is intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU No. 2016-15 is required for annual reporting periods beginning after December 15, 2018 for business entities that are not public, with early adoption permitted. The Company adopted the guidance on January 1, 2019. The adoption had no impact on the consolidated financial statements. ASU No. 2018-07 In June 2018, the FASB issued ASU No. 2018-07, related to stock compensation for nonemployee share-based awards. ASU No. 2018-07 expands the scope of Topic 718 – Compensation – Stock Compensation to include share-based payments issued to nonemployees, with certain exceptions, in order to align the accounting for employees and nonemployees. The guidance in ASU No. 2018-07 is required for annual reporting periods beginning after December 15, 2019 for business entities that are not public, with early adoption permitted. The Company early adopted the guidance on January 1, 2019. The adoption had an immaterial impact on the consolidated financial statements. New Accounting Standards Not Yet Adopted ASU No. 2016-02 In February 2016, the FASB issued ASU No. 2016-02, which was subsequently amended in July 2018 by ASU No. 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Targeted Improvements - Leases (Topic 842)” The Company will adopt ASC 842 using the alternative transition method provided in ASU 2018-11, which does not require adjusting comparative period financial information. The Company expects to elect the package of practical expedients permitted under the transition guidance which allows the carry forward of the historical lease identification, lease classification and initial direct costs of existing leases. In addition, the Company expects to elect the practical expedient to not separate lease and nonlease components. Further, the Company made an accounting policy election to adopt the short-term lease exception, which allows the Company to not record leases with an initial term of 12 months or less on the balance sheet. The Company currently expects that most operating lease commitments will be subject to the new standard and will be recognized as operating lease liabilities and right-of-use assets upon adoption. The Company expects the impact of adoption of ASC 842 will result in a material increase in noncurrent assets and noncurrent liabilities in the consolidated balance sheets. As an EGC, the Company has elected to use adoption dates applicable to private companies. ASU No. 2016-13 In June 2016, the FASB issued ASU No. 2016-13, related to credit losses, which amends the current accounting guidance and requires the measurements of all expected losses based on historical experience, current conditions and reasonable and supportable forecasts. The new guidance replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The guidance in ASU No. 2016-13 is required for annual periods, including interim periods within those annual periods, beginning after December 15, 2019 for public business entities ASU No. 2018-15 In August 2018, the FASB issued ASU No. 2018-15, related to implementation costs incurred in a cloud computing arrangement that is a service contract. The guidance in ASU No. 2018-15 is required for annual reporting periods , including interim periods within those annual periods, The Company will adopt this guidance on January 1, 2020. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis The following financial assets and liabilities are measured at fair value on a recurring basis. The fair values recognized in the accompanying consolidated balance sheets and the level within the fair value hierarchy in which the fair value measurements fall is as follows (in thousands): Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Fair Identical Assets Inputs Inputs September 30, 2019 Value (Level 1) (Level 2) (Level 3) Money market funds $ 440,053 $ 440,053 $ — $ — Earnout related to acquisitions 15,461 — — 15,461 Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Fair Identical Assets Inputs Inputs December 31, 2018 Value (Level 1) (Level 2) (Level 3) Money market funds $ 138,483 $ 138,483 $ — $ — Earnout related to acquisitions — — — — Earnout Liability In connection with an acquisition accounted for as a business combination under ASC 805, earnout liabilities are recorded at estimated fair value on a recurring basis. Acquisitions accounted for as business combinations that occurred during the first nine months of 2019 and included in earnout liabilities are discussed in Note 5. The Company estimates the fair value of earnout liabilities for business combinations using the probability-weighted discounted cash flow and Monte Carlo simulations. As of September 30, 2019, the earnout liability associated with the 2019 acquisition of Portway International, Inc. (“Portway”) was valued utilizing a discount rate of 9.51%. As of September 30, 2019, the earnout liability associated with the 2019 acquisition of Compli, Inc. (“Compli”) was valued utilizing a discount rate of 3.1%, and the earnout liability associated with the 2019 acquisition of Indix Corporation (“Indix”) was valued utilizing a discount rate of 3.1%. The Portway discount rate was calculated using the build-up method with a risk-free rate commensurate with the term of the earnout. The Compli and Indix acquisitions were valued using a risk-free rate based on linear interpolated U.S. Treasury rates commensurate with the term of the earnout. Earnout liabilities are classified as Level 3 liabilities because the Company uses unobservable inputs to value them, reflecting its assessment of the assumptions market participants would use to value these liabilities. Changes in the fair value of earnout liabilities associated with business combinations are recorded as other (income) expense, net in the consolidated statements of operations. A reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying consolidated balance sheets using significant unobservable (Level 3) inputs, is as follows (in thousands): Three Months Ended September 30, 2019 2018 Earnout liability: Balance beginning of period $ 6,428 $ — Fair value recorded at acquisition 9,399 — Payments of earnout liability (500 ) — Total unrealized (gains) losses included in other (income) expense, net 134 — Balance end of period $ 15,461 $ — Nine Months Ended September 30, 2019 2018 Earnout liability: Balance beginning of period $ — $ 380 Fair value recorded at acquisition 15,351 — Payments of earnout liability (500 ) — Total unrealized (gains) losses included in other (income) expense, net 610 (380 ) Balance end of period $ 15,461 $ — Assets and liabilities measured at fair value on a non-recurring basis The Company’s non-financial assets and liabilities, which include goodwill, intangible assets, and long-lived assets, are not required to be measured at fair value on a recurring basis. There were no fair value measurements of these assets during the first nine months of 2019, except as discussed in Note 5. |
Balance Sheet Detail
Balance Sheet Detail | 9 Months Ended |
Sep. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Detail | 4 . Balance Sheet Detail Property and equipment, net consisted of the following (in thousands): Useful September 30, December 31, Life (Years) 2019 2018 Computer equipment and software 3 to 5 $ 15,581 $ 12,904 Internally developed software 6 5,205 3,620 Furniture and fixtures 5 6,770 5,850 Office equipment 3 to 5 858 586 Leasehold improvements 1 to 10 28,074 26,788 56,488 49,748 Accumulated depreciation (21,951 ) (16,375 ) Property and equipment—net $ 34,537 $ 33,373 Depreciation expense was $2.2 million and $6.4 million for the three and nine months ended September 30, 2019, respectively, and $1.8 million and $5.0 million for the three and nine months ended September 30, 2018, respectively. Prepaid expenses and other current assets consisted of the following (in thousands): September 30, December 31, 2019 2018 Prepaid expenses $ 11,194 $ 9,578 Accrued investment income 687 260 Deferred financing costs — 643 Deposits 298 325 Other 1,677 501 Total $ 13,856 $ 11,307 Accrued expenses consisted of the following (in thousands): September 30, December 31, 2019 2018 Accrued payroll and related taxes $ 4,184 $ 3,800 Accrued federal, state, and local taxes 2,484 1,827 Accrued bonus 13,707 10,766 Self-insurance reserves 1,361 — Employee stock purchase plan contributions 1,908 6,473 Accrued sales commissions 3,599 6,889 Accrued partner commissions 6,540 5,535 Contract liabilities 4,843 — Accrued purchase price related to acquisitions 2,984 — Other 8,254 6,811 Total $ 49,864 $ 42,101 Contract liabilities represent amounts that are collected in advance of the satisfaction of performance obligations under the new revenue recognition standard. See Recently Adopted Accounting Standards Contract Liabilities |
Acquisitions of Businesses
Acquisitions of Businesses | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions of Businesses | 5 . Acquisitions of Businesses January 2019 Acquisition of Compli On January 22, 2019, the Company completed the acquisition of substantially all the assets of Compli under an Asset Purchase Agreement (the “Compli Purchase”). Compli is a provider of compliance services, technology, and software to producers, distributors, and importers of beverage alcohol in the United States. The Company accounted for the Compli Purchase as a business combination. As a result of the acquisition, the Company expanded its ability to provide transaction tax solutions and content for the beverage alcohol industry. The transaction costs associated with the acquisition were not material. The total consideration transferred related to this transaction was $17.1 million, consisting of $11.8 million paid in cash at closing, an additional $1.6 million of cash to be paid out after twelve months, and an earnout provision fair valued upon acquisition at $3.8 million. The earnout provision is for a one-time payment and has a maximum payout of $4.0 million based on revenue recognized by the Company from the acquired operating assets for the twelve-month period ending January 31, 2020. The earnout was originally recognized at fair value at the date of the business combination and is recorded as an accrued earnout liability in current liabilities on the consolidated balance sheet as of September 30, 2019. The earnout liability is adjusted to fair value quarterly (see Note 3). Estimated fair values of the assets acquired and the liabilities assumed in the Compli Purchase as of the acquisition date are provided in the following table (in thousands): Assets acquired: Current assets $ 505 Developed technology, customer relationships, and other intangibles 4,288 Goodwill 12,807 Total assets acquired 17,600 Liabilities assumed: Current liabilities 482 Total liabilities assumed 482 Net assets acquired $ 17,118 The estimated fair values are preliminary in nature and subject to adjustments, which are not expected to be material. The Company is currently in the process of finalizing the valuations related to the acquired intangible assets. The valuations will be finalized when certain information arranged to be obtained has been received and the Company’s review of that information has been completed. The Company utilizes different valuation approaches and methodologies to determine the fair value of acquired intangible assets. A summary of the valuation methodologies, significant assumptions, and estimated useful lives of acquired intangible assets in the Compli Purchase are provided in the below table (in thousands): Intangible Assigned Value Valuation Methodology Discount Rate Estimated Useful Life Customer relationships $ 3,250 Multi-period excess earnings-income approach 13 % 6 years Trademarks and trade names 32 Relief from royalty- income approach 13 % 2 years Developed technology and customer database 910 Relief from royalty- income approach 13 % 6 years Noncompetition agreements 96 With-and-without valuation- income approach 13 % 3 years The excess of the purchase price over the net identified tangible and intangible assets of $12.8 million has been recorded as goodwill, which includes synergies expected from the combined service offerings and the value of the assembled workforce. The goodwill is expected to be deductible for tax purposes. For the period from the date of the Compli acquisition through September 30, 2019, revenue was $2.8 million and pre-tax loss was $0.4 million from the Compli business. February 2019 Acquisition of Indix On February 6, 2019, the Company completed the acquisition of substantially all the assets of Indix under an Asset Purchase Agreement (the “Indix Purchase”). Indix is an artificial intelligence company providing comprehensive product descriptions for more than one billion products sold and shipped worldwide. The Company accounted for the Indix Purchase as a business combination. As a result of the acquisition, the Company intends to use the Indix artificial intelligence to maintain and expand its tax content database. The transaction costs associated with the acquisition were not material. The total consideration transferred related to this transaction was $9.1 million, consisting of $5.5 million paid in cash at closing, an additional $1.4 million cash to be paid after eighteen months, and an earnout provision valued upon acquisition at $2.2 million. The earnout provision has a maximum payout of $3.0 million based on the successful transition and achievement of development milestones established in the purchase agreement. The earnout provides for interim payments based on milestones to be evaluated as follows: $0.5 million within three months of closing, $0.65 million within seven months of closing, $0.65 million within eight months of closing, and $1.2 million within 12 months of closing. The earnout was originally recognized at fair value at the date of the business combination and is recorded as an accrued earnout liability in current liabilities on the consolidated balance sheet. The earnout liability is adjusted to fair value quarterly (see Note 3). The first earnout milestone was achieved in the second quarter of 2019, and was paid in July 2019. The Company continues to evaluate achievement of the second and third milestones. Estimated fair values of the assets acquired and the liabilities assumed in the Indix Purchase as of the acquisition date are provided in the following table (in thousands): Assets acquired: Current assets $ 94 Developed technology 4,472 Goodwill 4,953 Total assets acquired 9,519 Liabilities assumed: Current liabilities 392 Total liabilities assumed 392 Net assets acquired $ 9,127 The Company utilizes different valuation approaches and methodologies to determine the fair value of acquired intangible assets. A summary of the valuation methodologies, significant assumptions, and estimated useful lives of acquired intangible assets in the Indix Purchase are provided in the below table (in thousands): Intangible Assigned Value Valuation Methodology Discount Rate Estimated Useful Life Developed technology $ 4,472 Relief from royalty- income approach 24.5% 6 years The excess of the purchase price over the net identified tangible and intangible assets of $5.0 million has been recorded as goodwill, which includes cost savings expected from the use of the acquired technology and the value of the assembled workforce. The goodwill is expected to be deductible for tax purposes. The Indix acquisition provided enhanced artificial intelligence technology and tax content, but did not result in additional revenues for the Company. For the period from the date of the Indix acquisition through September 30, 2019, t expenses and July 2019 Acquisition of Portway On July 31, 2019, the Company completed the acquisition of substantially all the assets of Portway under an Asset Purchase Agreement (the “Portway Purchase”). Portway is a provider of Harmonized System classifications and outsourced customs brokerage services. The Company accounted for the Portway Purchase as a business combination. As a result of the acquisition, the Company expanded its cross-border solutions. Acquisition-related costs of $0.2 million for the nine months ended September 30, 2019 were primarily for legal fees. The total consideration transferrable related to this transaction was $24.3 million, consisting of $13.0 million paid in cash at closing, an additional $2.0 million of cash to be paid after eighteen months with an acquisition date fair value of $1.9 million, and an earnout provision fair valued upon acquisition at $9.4 million. The earnout is payable in the Company’s common stock no later than February 2021. The maximum number of shares of common stock that could be earned and transferred to the seller is 119,090 shares, which was based on a maximum payout value of $10.0 million and a per share value of $83.97 under the terms of the Portway Purchase. The earnout is based on the achievement of specific revenue and operating metrics through January 2021, and the shares (which were issued at closing and are held in escrow) will be forfeited and cancelled if the metrics are not achieved. The earnout was originally recognized at fair value at the date of the business combination and is recorded in noncurrent accrued earnout liabilities on the consolidated balance sheet as of September 30, 2019. The earnout liability is adjusted to fair value quarterly (see Note 3). Estimated fair values of the assets acquired and the liabilities assumed in the Portway Purchase as of the acquisition date are provided in the following table (in thousands): Assets acquired: Property and equipment $ 76 Customer relationships and other intangibles 1,865 Goodwill 22,376 Total assets acquired 24,317 Liabilities assumed: Total liabilities assumed — Net assets acquired $ 24,317 The estimated fair values are preliminary in nature and subject to adjustments, which are not expected to be material. The Company utilizes different valuation approaches and methodologies to determine the fair value of acquired intangible assets. A summary of the valuation methodologies, significant assumptions, and estimated useful lives of acquired intangible assets in the Portway Purchase are provided in the below table (in thousands): Intangible Assigned Value Valuation Methodology Discount Rate Estimated Useful Life Customer relationships $ 1,759 Multi-period excess earnings-income approach 12 % 6 years Noncompetition agreements 106 With-and-without valuation- income approach 12 % 4 years The excess of the purchase price over the net identified tangible and intangible assets of $22.4 million has been recorded as goodwill, which includes synergies expected from the expanded cross-border product functionality and customs brokerage services and the value of the assembled workforce. The goodwill is expected to be deductible for tax purposes. For the period from the date of the Portway acquisition through September 30, 2019, revenue was $0.4 million and pre-tax loss was $0.1 million from the Portway business. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 6 . Revenue The Company adopted the new revenue recognition accounting standard ASC 606 effective January 1, 2019 on a modified retrospective basis and applied the new standard only to contracts that were not completed contracts prior to January 1, 2019. See Note 2 for a description of the Company’s ASC 606 revenue recognition accounting policy. Financial results for reporting periods during 2019 are presented in compliance with the new revenue recognition standard. Historical financial results for reporting periods prior to 2019 have not been retroactively restated and are presented in conformity with amounts previously disclosed under ASC 605. This note includes additional information regarding the impacts from the adoption of the new revenue recognition standard on the financial results for the three and nine months ended September 30, 2019. This includes the presentation of financial results during 2019 under ASC 605 for comparison to the prior year. The revenue recognition accounting policy for ASC 605 is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 28, 2019. There were no changes to the Company’s ASC 605 policy during the first nine months of 2019. Consolidated Balance Sheets – Reconciliation of the Impacts from the Adoption of the New Revenue Recognition Standard The following schedule summarizes the impacts from the adoption of the new revenue recognition standard on the consolidated balance sheet as of September 30, 2019 (in thousands): September 30, December 31, 2019 2018 As Reported (ASC 606) Impacts from Adoption Without Adoption (ASC 605) As Reported (ASC 605) (unaudited) (unaudited) (unaudited) Assets Current assets: Cash and cash equivalents $ 446,563 $ — $ 446,563 $ 142,322 Trade accounts receivable—net of allowance for doubtful accounts 49,124 1,044 50,168 40,287 Deferred commissions 8,402 (8,402 ) — — Prepaid expenses and other current assets 13,856 — 13,856 11,307 Total current assets before customer fund assets 517,945 (7,358 ) 510,587 193,916 Funds held from customers 16,665 — 16,665 13,113 Receivable from customers—net of allowance for doubtful accounts 690 — 690 270 Total current assets 535,300 (7,358 ) 527,942 207,299 Noncurrent assets: Property and equipment—net 34,537 — 34,537 33,373 Goodwill 100,926 — 100,926 61,300 Intangible assets—net 24,543 — 24,543 19,371 Deferred commissions 27,206 (27,206 ) — — Other noncurrent assets 2,420 — 2,420 1,589 Total assets $ 724,932 $ (34,564 ) $ 690,368 $ 322,932 Liabilities and shareholders' equity Current liabilities: Trade payables $ 10,962 $ — $ 10,962 $ 4,847 Accrued expenses 49,864 (4,843 ) 45,021 42,101 Accrued earnout liabilities 6,102 — 6,102 116 Deferred revenue 147,713 5,349 153,062 125,260 Total current liabilities before customer fund obligations 214,641 506 215,147 172,324 Customer fund obligations 17,306 — 17,306 13,349 Total current liabilities 231,947 506 232,453 185,673 Noncurrent liabilities: Deferred revenue 753 8,353 9,106 9,393 Deferred tax liability 698 — 698 560 Deferred rent 15,905 — 15,905 17,317 Accrued earnout liabilities 9,399 — 9,399 — Other noncurrent liabilities 2,361 — 2,361 436 Total liabilities 261,063 8,859 269,922 213,379 Commitments and contingencies Shareholders' equity: Preferred stock — — — — Common stock 8 — 8 7 Additional paid-in capital 961,733 — 961,733 599,493 Accumulated other comprehensive loss (3,122 ) — (3,122 ) (2,345 ) Accumulated deficit (494,750 ) (43,423 ) (538,173 ) (487,602 ) Total shareholders’ equity 463,869 (43,423 ) 420,446 109,553 Total liabilities and shareholders' equity $ 724,932 $ (34,564 ) $ 690,368 $ 322,932 Consolidated Statements of Operations (Unaudited) – Reconciliation of the Impacts from the Adoption of the New Revenue Recognition Standard The following schedules summarize the impacts from the adoption of the new revenue recognition standard on the consolidated statement of operations for the three and nine months ended September 30, 2019 (in thousands, except per share amounts): For the Three Months Ended September 30, 2019 2018 As Reported (ASC 606) Impacts from Adoption Without Adoption (ASC 605) As Reported (ASC 605) Revenue: Subscription and returns $ 91,986 $ 71 $ 92,057 $ 64,611 Professional services 6,539 (49 ) 6,490 5,308 Total revenue 98,525 22 98,547 69,919 Cost of revenue: Subscription and returns 25,621 — 25,621 17,330 Professional services 4,157 — 4,157 2,906 Total cost of revenue 29,778 — 29,778 20,236 Gross profit 68,747 22 68,769 49,683 Operating expenses: Research and development 21,871 — 21,871 13,285 Sales and marketing 40,313 4,789 45,102 41,276 General and administrative 20,511 — 20,511 10,235 Goodwill impairment — — — 9,174 Total operating expenses 82,695 4,789 87,484 73,970 Operating loss (13,948 ) (4,767 ) (18,715 ) (24,287 ) Other (income) expense: Interest income (2,202 ) — (2,202 ) (676 ) Interest expense 2 — 2 534 Other (income) expense, net 265 — 265 49 Total other (income) expense, net (1,935 ) — (1,935 ) (93 ) Loss before income taxes (12,013 ) (4,767 ) (16,780 ) (24,194 ) Provision for (benefit from) income taxes 341 — 341 (91 ) Net loss $ (12,354 ) $ (4,767 ) $ (17,121 ) $ (24,103 ) Net loss per share attributable to common shareholders, basic and diluted $ (0.16 ) $ (0.06 ) $ (0.22 ) $ (0.36 ) Weighted average shares of common stock outstanding, basic and diluted 76,156 76,156 66,590 For the Nine Months Ended September 30, 2019 2018 As Reported (ASC 606) Impacts from Adoption Without Adoption (ASC 605) As Reported (ASC 605) Revenue: Subscription and returns $ 255,225 $ 689 $ 255,914 $ 182,326 Professional services 19,569 (149 ) 19,420 12,849 Total revenue 274,794 540 275,334 195,175 Cost of revenue: Subscription and returns 69,537 — 69,537 47,984 Professional services 12,883 — 12,883 8,393 Total cost of revenue 82,420 — 82,420 56,377 Gross profit 192,374 540 192,914 138,798 Operating expenses: Research and development 56,823 — 56,823 38,332 Sales and marketing 119,199 16,340 135,539 119,187 General and administrative 53,764 — 53,764 28,787 Goodwill impairment — — — 9,174 Total operating expenses 229,786 16,340 246,126 195,480 Operating loss (37,412 ) (15,800 ) (53,212 ) (56,682 ) Other (income) expense: Interest income (4,251 ) — (4,251 ) (811 ) Interest expense 286 — 286 2,495 Other (income) expense, net 694 — 694 (423 ) Total other (income) expense, net (3,271 ) — (3,271 ) 1,261 Loss before income taxes (34,141 ) (15,800 ) (49,941 ) (57,943 ) Provision for (benefit from) income taxes 629 — 629 (825 ) Net loss $ (34,770 ) $ (15,800 ) $ (50,570 ) $ (57,118 ) Net loss per share attributable to common shareholders, basic and diluted $ (0.48 ) $ (0.22 ) $ (0.70 ) $ (1.95 ) Weighted average shares of common stock outstanding, basic and diluted 72,064 72,064 29,269 Consolidated Statements of Comprehensive Loss (Unaudited) – Reconciliation of the Impacts from the Adoption of the New Revenue Recognition Standard The following schedules summarize the impacts from the adoption of the new revenue recognition standard on the consolidated statement of comprehensive loss for the three and nine months ended September 30, 2019 (in thousands): For the Three Months Ended September 30, 2019 2018 As Reported (ASC 606) Impacts from Adoption Without Adoption (ASC 605) As Reported (ASC 605) Net loss $ (12,354 ) $ (4,767 ) $ (17,121 ) $ (24,103 ) Other comprehensive loss—Foreign currency translation (591 ) — (591 ) (242 ) Total comprehensive loss $ (12,945 ) $ (4,767 ) $ (17,712 ) $ (24,345 ) For the Nine Months Ended September 30, 2019 2018 As Reported (ASC 606) Impacts from Adoption Without Adoption (ASC 605) As Reported (ASC 605) Net loss $ (34,770 ) $ (15,800 ) $ (50,570 ) $ (57,118 ) Other comprehensive loss—Foreign currency translation (777 ) — (777 ) (2,687 ) Total comprehensive loss $ (35,547 ) $ (15,800 ) $ (51,347 ) $ (59,805 ) Consolidated Statements of Cash Flows (Unaudited) – Reconciliation of the Impacts from the Adoption of the New Revenue Recognition Standard The following schedule summarizes the impacts from the adoption of the new revenue recognition standard on the consolidated statement of cash flows for the nine months ended September 30, 2019 (in thousands): For the Nine Months Ended September 30, 2019 2018 As Reported (ASC 606) Impacts from Adoption Without Adoption (ASC 605) As Reported (ASC 605) Cash flows from operating activities: Net loss $ (34,770 ) $ (15,800 ) $ (50,570 ) $ (57,118 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 11,684 — 11,684 9,390 Goodwill impairment — — 9,174 Stock-based compensation 25,906 — 25,906 11,411 Deferred tax expense (benefit) 138 — 138 (1,110 ) Amortization of deferred rent (778 ) — (778 ) 231 Non-cash change in earnout liability 610 — 610 (430 ) Non-cash bad debt expense (recovery) 602 — 602 (382 ) Other 227 — 227 526 Changes in operating assets and liabilities: Trade accounts receivable (9,648 ) (238 ) (9,886 ) (7,852 ) Prepaid expenses and other current assets (3,274 ) — (3,274 ) (2,688 ) Deferred commissions (16,340 ) 16,340 — — Other noncurrent assets (831 ) — (831 ) (549 ) Trade payables 4,818 — 4,818 (3,353 ) Accrued expenses 2,305 (2,753 ) (448 ) 6,095 Deferred rent (lease incentives) — — — 579 Deferred revenue 24,782 2,451 27,233 25,978 Net cash provided by (used in) operating activities 5,431 — 5,431 (10,098 ) Cash flows from investing activities: Net (increase) decrease in customer fund assets (3,986 ) — (3,986 ) 2,053 Cash paid for acquired intangible assets (139 ) — (139 ) (5,002 ) Cash paid for acquisitions of businesses (30,310 ) — (30,310 ) — Purchase of property and equipment (7,196 ) — (7,196 ) (12,914 ) Net cash used in investing activities (41,631 ) — (41,631 ) (15,863 ) Cash flows from financing activities: Proceeds from common stock offering, net of underwriting discounts 274,705 274,705 192,510 Payments of deferred financing costs (555 ) — (555 ) (2,084 ) Payments on credit facility — — — (63,000 ) Proceeds from credit facility — — — 23,000 Repayment of note payable — — — (234 ) Net increase (decrease) in customer fund obligations 3,986 — 3,986 (2,053 ) Proceeds from exercise of stock options and common stock warrants 51,583 — 51,583 5,787 Proceeds from purchases of stock under employee stock purchase plan 12,293 — 12,293 — Taxes paid related to net share settlement of stock-based awards (1,183 ) — (1,183 ) (2,326 ) Repurchase of shares — — — (1,806 ) Payment related to business combination earnouts (375 ) — (375 ) — Net cash provided by financing activities 340,454 — 340,454 149,794 Foreign currency effect on cash and cash equivalents (13 ) — (13 ) 185 Net change in cash and cash equivalents 304,241 — 304,241 124,018 Cash and cash equivalents—Beginning of period 142,322 — 142,322 14,075 Cash and cash equivalents—End of period $ 446,563 — $ 446,563 $ 138,093 Disaggregation of Revenue The following table disaggregates revenue generated within the United States (U.S.) from revenue generated from customers outside of the U.S. Revenue for transaction tax compliance in the U.S. is further disaggregated based on the solutions or services purchased by customers. Total revenues consisted of the following (in thousands): For the Three Months Ended September 30, 2019 2018 Revenue (U.S.): Subscription and returns Tax determination $ 52,722 $ 37,931 Tax returns and compliance management 33,456 22,613 Interest income on funds held for customers 907 392 Total subscription and returns 87,085 60,936 Professional services 6,019 4,595 Total revenue (U.S.) 93,104 65,531 Total revenue (non-U.S.) 5,421 4,388 Total revenue $ 98,525 $ 69,919 For the Nine Months Ended September 30, 2019 2018 Revenue (U.S.): Subscription and returns Tax determination $ 146,660 $ 105,330 Tax returns and compliance management 90,829 66,747 Interest income on funds held for customers 2,448 562 Total subscription and returns 239,937 172,639 Professional services 17,416 10,743 Total revenue (U.S.) 257,353 183,382 Total revenue (non-U.S.) 17,441 11,793 Total revenue $ 274,794 $ 195,175 Disclosures Related to Contracts with Customers Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to contracts with customers. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations. To the extent a contract exists, as defined by ASC 606, these liabilities are classified as current and non-current deferred revenue. To the extent that a contract does not exist, these liabilities are classified as contract liabilities. Contract liabilities are transferred to deferred revenue at the point in time when the criteria that establish the existence of a contract are met. Contract Liabilities A summary of the activity impacting the contract liabilities during the nine months ended September 30, 2019 is presented below (in thousands): Contract Liabilities Balance at December 31, 2018 $ — Adoption of ASC 606 2,090 Contract liabilities transferred to deferred revenue (3,897 ) Addition to contract liabilities 6,650 Balance at September 30, 2019 $ 4,843 As of September 30, 2019, contract liabilities are expected to be transferred to deferred revenue within the next 12 months and therefore are included in accrued expenses on the consolidated balance sheets. Deferred Revenue A summary of the activity impacting deferred revenue balances during the nine months ended September 30, 2019 is presented below (in thousands): Deferred Revenue Balance at December 31, 2018 $ 134,653 Adoption of ASC 606 (11,250 ) Revenue recognized (274,794 ) Additional amounts deferred 299,857 Balance at September 30, 2019 $ 148,466 Assets Recognized from the Costs to Obtain Contracts with Customers Assets are recognized for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year. These deferred commissions are amortized over an expected period of benefit of generally six years. A summary of the activity impacting the deferred commissions during the nine months ended September 30, 2019 is presented below (in thousands): Deferred Commissions Balance at December 31, 2018 $ — Adoption of ASC 606 19,267 Additional commissions deferred 21,480 Amortization of deferred commissions (5,139 ) Balance at September 30, 2019 $ 35,608 As of September 30, 2019, $8.4 million of deferred commissions are expected to be amortized within the next 12 months and therefore are included in current assets on the consolidated balance sheets. The remaining amount of deferred commissions are included in noncurrent assets. There were no impairments of assets related to deferred commissions during the nine months ended September 30, 2019. There were no assets recognized related to the costs to fulfill contracts during the nine months ended September 30, 2019 as these costs were not material. Remaining Performance Obligations Contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date. These amounts include additional performance obligations that are not yet recorded in the consolidated balance sheets. As of September 30, 2019, amounts allocated to these additional contractual obligations are $33.4 million, of which $33.1 million is expected to be recognized as revenue over the next 12 months with the remaining amount thereafter. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7 . Intangible Assets Finite-lived intangible assets Finite-lived intangible assets consisted of the following (in thousands): September 30, 2019 Average Useful Life (Years) Gross Accumulated Amortization Net Customer relationships 3 to 10 $ 20,360 $ (10,802 ) $ 9,558 Developed technology 3 to 8 36,222 (21,440 ) 14,782 Noncompete agreements 3 to 5 777 (595 ) 182 Tradename and trademarks 1 to 4 452 (431 ) 21 $ 57,811 $ (33,268 ) $ 24,543 December 31, 2018 Average Useful Life (Years) Gross Accumulated Amortization Net Customer relationships 3 to 10 $ 15,412 $ (9,202 ) $ 6,210 Developed technology 3 to 8 30,935 (17,806 ) 13,129 Noncompete agreements 3 to 5 574 (542 ) 32 Tradename and trademarks 1 to 4 420 (420 ) — $ 47,341 $ (27,970 ) $ 19,371 Finite-lived intangible assets are generally amortized on a straight-line basis over the remaining estimated useful life as management believes this reflects the expected benefit to be received from these assets. Finite-lived intangible assets amortization expense was $1.8 million and $5.3 million for the three and nine months ended September 30, 2019, respectively, and $1.6 million and $4.4 million for the three and nine months ended September 30, 2018, respectively. Acquisitions of finite-lived intangible assets In May 2018, the Company acquired developed technology to facilitate cross-border transactions (e.g., tariffs and duties), from Tradestream Technologies Inc. and Wise 24 Inc. (the “Sellers”) for cash and common stock. In addition to cash paid at closing and shortly thereafter, the asset purchase agreement required the Company to issue shares of common stock as follows: 37,708 shares on November 29, 2018, 37,708 shares on May 29, 2019, and 37,706 shares on November 29, 2019. Total consideration for the purchase also includes an earnout computed on future revenue and billings recognized by the Company over the six years following the acquisition, up to a maximum of $30.0 million. The earnout is payable in cash and common stock at the end of each six-month measurement period ending on June 30 or December 31 through 2023. The cash portion of the earnout is computed based on eligible billings in the measurement period. The number of shares of common stock to be issued for the earnout is computed based on the eligible revenue recognized in the measurement period divided by the average closing price of the Company’s common stock during the last ten days of the measurement period. As earnout payments become due, those costs will be capitalized as part of the developed technology asset and amortized over the remaining useful life. During the first nine months of 2019, the Company paid $0.1 million and issued 2,310 shares of common stock to the Sellers for the earnout measurement periods ended December 31, 2018 and June 30, 2019, and accrued $0.1 million for cash and common stock payable to the Sellers for the earnout measurement period that will end December 31, 2019. Goodwill Changes in the carrying amount of goodwill during the nine months ended September 30, 2019 are summarized as follows (in thousands): Balance—December 31, 2018 $ 61,300 Acquisition of Compli 12,807 Acquisition of Indix 4,953 Acquisition of Portway 22,376 Cumulative translation adjustments (510 ) Balance—September 30, 2019 $ 100,926 Goodwill is tested for impairment annually on October 31 at the reporting unit level or whenever circumstances occur indicating goodwill might be impaired. The impairment test involves comparing the fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the fair value exceeds carrying value, the Company will conclude that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value. The Company has three reporting units for goodwill impairment testing consisting of its U.S., European, and Brazilian operations. As of September 30, 2019, the Brazilian reporting unit had no associated goodwill. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8 . Commitments and Contingencies Leases Rent expense was $3.3 million and $9.4 million for the three and nine months ended September 30, 2019, respectively, and $2.5 million and $7.4 million for the three and nine months ended September 30, 2018, respectively. Sublease income was $0.4 million and $1.1 million for the three and nine months ended September 30, 2019, respectively, with no sublease income for the three and nine months ended September 30, 2018. Contingencies Loss contingencies may arise in connection with the ordinary conduct of the Company’s business activities. The Company considers loss contingencies on a quarterly basis and based on known facts assesses whether potential losses are considered reasonably possible, probable, and estimable. The Company establishes an accrual for loss contingencies when the loss is both probable and reasonably estimable. If the estimated loss is a range of potential outcomes and there is no better estimate within the range, management accrues the amount at the low end of the range. These accruals represent management’s estimate of probable losses and, in such cases, there may be an exposure to loss in excess of the amounts accrued. Significant judgment is required to determine both likelihood of there being a probable loss and the estimated amount of a loss. If a loss contingency is not both probable and reasonably estimable, the Company does not establish an accrual, but will evaluate other disclosure requirements and continue to monitor the matter for developments that would make the loss contingency both probable and reasonably estimable. The ultimate outcome of any litigation relating to a loss contingency is uncertain and, regardless of outcome, litigation can have an adverse impact on the Company because of defense costs, negative publicity, diversion of management resources, and other factors. In its standard subscription agreements, the Company has agreed to indemnification provisions with respect to certain matters. Further, from time to time, the Company has also assumed indemnification obligations through its acquisition activity. These indemnification provisions can create a liability to the Company if its services do not appropriately calculate taxes due to tax jurisdictions, or if the Company is delinquent in the filing of returns on behalf of its customers. Although the Company’s agreements have disclaimers of warranties that limit its liability (beyond the amounts the Company agrees to pay pursuant to its indemnification obligations and guarantees, as applicable), a court could determine that such disclaimers and limitations are unenforceable as a matter of law and hold the Company liable for certain errors. Further, in some instances the Company has negotiated agreements with specific customers or assumed agreements in connection with the Company’s acquisitions that do not limit this liability or disclaim these warranties. Except as discussed below, it is not possible to reasonably estimate the potential loss under these indemnification arrangements. While the Company has never paid a material claim related to these indemnification provisions, the Company believes that, as of September 30, 2019, there is a reasonable possibility that a loss may be incurred pursuant to certain of these arrangements and estimates a range of loss of up to $2.0 million. The Company has not recorded an accrual related to these arrangements as of September 30, 2019 because it has not determined that a loss is probable. On October 22, 2018, PTP OneClick, LLC (“PTP”) filed a lawsuit against Avalara, Inc. in the United States District Court for the Eastern District of Wisconsin. The lawsuit alleges that making, using, offering to sell, and selling AvaTax, Avalara Returns, and TrustFile (the “Avalara Products”) infringe U.S. Patent No. 9,760,915 held by PTP and also alleges unspecified trade secret misappropriation, unfair competition, and breach of contract. PTP seeks judgments of willful patent infringement, willful trade secret misappropriation, unfair competition, and breach of contract. PTP requests preliminary and permanent injunctions to enjoin the Company from making, using, offering to sell, and selling the Avalara Products along with treble damages and attorneys’ fees. Based upon the Company’s review of the complaint and the specified patent, the Company believes that the Company has meritorious defenses to PTP’s claims. On November 7, 2018, the Company moved to dismiss the lawsuit and to have the patent held invalid, and also moved to transfer the matter to the United States District Court located in Seattle, Washington. On April 30, 2019, the United States District Court for the Eastern District of Wisconsin granted the Company’s motion to transfer, reserving resolution of the motion to dismiss for the United States District Court for the Western District of Washington. On October 7, 2019, the United States District Court for the Western District of Washington invalidated the patent and dismissed the patent and unfair competition claims with prejudice but did not dismiss the trade secret misappropriation or breach of contract claims. The court has set the trial date for October 26, 2020. The Company intends to continue to vigorously defend against PTP’s allegations. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 9 . Debt Loan and Security Agreement The Company had a loan and security agreement with Silicon Valley Bank and Ally Bank that consisted of a $50.0 million revolving credit facility (the “Credit Facility”). On June 25, 2019, the Company terminated the Credit Facility. Prior to termination of the Credit Facility, the Company was required to pay a quarterly fee of 0.50% per annum on the undrawn portion available under the revolving credit facility plus the sum of outstanding letters of credit. Under the Credit Facility, the interest rate on the revolving credit facility was based on the greater of either 4.25% or the current prime rate, plus 1.75%. |
Convertible Preferred Stock and
Convertible Preferred Stock and Shareholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders Equity Note [Abstract] | |
Convertible Preferred Stock and Shareholders' Equity | 10 . Convertible Preferred Stock and Shareholders’ Equity Authorized Capital – Common Stock and Preferred Stock On June 15, 2018, the Company completed an initial public offering (“IPO”) listing its common stock on the New York Stock Exchange. The Company is authorized to issue two classes of stock designated as common stock and preferred stock. In June 2018, immediately following the IPO, the Amended and Restated Articles of Incorporation became effective, which increased authorized capital stock to 620,000,000 shares, consisting of 600,000,000 shares of common stock, $0.0001 par value per share, and 20,000,000 shares of undesignated preferred stock, $0.0001 par value per share. Public Offering of Common Stock In June 2019, the Company completed a public offering, in which the Company sold 4,133,984 shares of its common stock, including the full exercise of the underwriters’ option to purchase 539,215 additional shares of common stock, at a price of $69.40 per share. The Company received net proceeds of $274.7 million, after deducting underwriting discounts and commissions and before deducting offering expenses paid by the Company of $1.2 million. As of September 30, 2019, 76,888,616 shares The changes to the Company’s shareholders’ equity during the nine months September 30, 2019 is as follows (in thousands, except share data): Accumulated Additional Other Total Common Stock Paid-In Comprehensive Accumulated Shareholders’ Shares Amount Capital Income (Loss) Deficit Equity Balance at January 1, 2019 66,768,563 $ 7 $ 599,493 $ (2,345 ) $ (487,602 ) $ 109,553 Impact of adoption of new accounting pronouncements (see Note 2) 27,622 27,622 Exercise of stock options 2,763,291 27,311 27,311 Shares tendered for cashless redemption of stock options (2,805 ) (93 ) (93 ) Stock-based compensation cost 6,571 6,571 Shares issued under employee stock purchase plan 372,764 7,664 7,664 Shares issued to purchase intangible assets 1,634 50 50 Loss on translation adjustment (462 ) (462 ) Net loss (9,243 ) (9,243 ) Balance at March 31, 2019 69,903,447 $ 7 $ 640,996 $ (2,807 ) $ (469,223 ) $ 168,973 Proceeds from common stock offering, net of underwriting discounts 4,133,984 1 274,704 274,705 Public offering costs (1,198 ) (1,198 ) Exercise of stock options 1,368,510 13,106 13,106 Vesting of restricted stock units 902 — Stock-based compensation cost 9,439 9,439 Shares issued to purchase intangible assets 37,708 — Gain on translation adjustment 276 276 Net loss (13,173 ) (13,173 ) Balance at June 30, 2019 75,444,551 8 937,047 (2,531 ) (482,396 ) 452,128 Exercise of stock options 1,286,357 11,166 11,166 Shares tendered for cashless redemption of stock-based awards (13,712 ) (1,090 ) (1,090 ) Vesting of restricted stock units 36,611 — Stock-based compensation cost 9,933 9,933 Shares issued under employee stock purchase plan 134,133 4,629 4,629 Shares issued to purchase intangible assets 676 48 48 Loss on translation adjustment (591 ) (591 ) Net loss (12,354 ) (12,354 ) Balance at September 30, 2019 76,888,616 8 961,733 (3,122 ) (494,750 ) 463,869 The changes to the Company’s convertible preferred stock and shareholders’ equity (deficit) for the nine months ended September 30, 2018 is as follows (in thousands, except share data): Accumulated Convertible Additional Other Total Preferred Stock Common Stock Paid-In Comprehensive Accumulated Shareholders’ Shares Amount Shares Amount Capital Income (Loss) Deficit Deficit Balance at January 1, 2018 101,786,205 $ 370,921 5,992,293 $ 1 $ 18,121 $ 338 $ (412,052 ) $ (393,592 ) Exercise of stock options 785,991 6,025 6,025 Shares tendered for cashless redemption of stock options (465,710 ) (7,715 ) (7,715 ) Stock-based compensation cost 3,517 3,517 Repurchase of shares (10,000 ) (67 ) (48,152 ) (752 ) (752 ) Gain on translation adjustment 603 603 Net loss (15,249 ) (15,249 ) Balance at March 31, 2018 101,776,205 $ 370,854 6,264,422 $ 1 $ 19,196 $ 941 $ (427,301 ) $ (407,163 ) Proceeds from common stock offering, net of underwriters' discounts 8,625,000 1 192,509 192,510 Initial public offering costs (3,425 ) (3,425 ) Conversion of preferred stock to common stock (101,776,205 ) (370,854 ) 50,888,014 5 370,849 370,854 Shares tendered for cashless redemption of stock options (138,813 ) (3,483 ) (3,483 ) Exercise of stock options 305,722 2,752 2,752 Exercise of warrants 570,000 5,783 5,783 Stock-based compensation cost 3,571 3,571 Repurchase of shares (56,695 ) (986 ) (986 ) Loss on translation adjustment (3,048 ) (3,048 ) Shares issued to purchase intangible assets 2,555 2,555 Net loss (17,766 ) (17,766 ) Balance at June 30, 2018 — $ — 66,457,650 $ 7 $ 589,321 $ (2,107 ) $ (445,067 ) $ 142,154 Exercise of stock options 40,003 439 439 Shares tendered for cashless redemption of stock options (7,497 ) (343 ) (343 ) Stock-based compensation cost 4,344 4,344 Loss on translation adjustment (242 ) (242 ) Net loss (24,103 ) (24,103 ) Balance at September 30, 2018 — $ — 66,490,156 $ 7 $ 593,761 $ (2,349 ) $ (469,170 ) $ 122,249 During the nine months ended September 30, 2018, the Company repurchased shares from employees and non-employee investors at fair value for $1.7 million. All outstanding shares of convertible preferred stock were converted to common stock in connection with the Company’s IPO in June 2018. Common Stock Warrants Common stock warrants were previously granted to the Company’s Board of Directors for services provided. No common stock warrants were issued during the nine months ended September 30, 2019. During the nine months ended September 30, 2018, the Company issued 80,000 common stock warrants with a weighted average exercise price of $16.60 per share. The warrants granted to the Company’s Board of Directors in the first quarter of 2018 had a grant date fair value of $0.5 million, which was recorded as general and administrative expense. During 2018 and prior to the completion of the IPO, 363,000 |
Equity Incentive Plans
Equity Incentive Plans | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Incentive Plans | 1 1 . Equity Incentive Plans The Company has stock-based compensation plans that provide for the award of equity incentives, including stock options, stock awards, RSUs, and purchase rights. As of September 30, 2019, the Company had stock options outstanding under the 2018 Equity Incentive Plan (the “2018 Plan”) and the 2006 Equity Incentive Plan (the “2006 Plan”), had RSUs outstanding under the 2018 Plan, and had purchase rights issued under the 2018 Employee Stock Purchase Plan (“ESPP”). In April 2018, the 2018 Plan became effective in connection with the Company’s IPO. The 2018 Plan allows the Company to grant equity incentives to employees, directors, advisors, and consultants providing services to the Company. The total number of shares of common stock reserved for issuance under the 2018 Plan is equal to (1) 5,315,780 st Prior to the 2018 Plan, the Company awarded stock options under the 2006 Plan. The 2006 Plan was terminated in connection with the Company’s IPO. Outstanding awards under the 2006 Plan continue to be subject to the terms and conditions of the 2006 Plan. As of September 30, 2019, there were 5,293,255 shares subject to outstanding stock options under the 2006 Plan. During the quarter ended September 30, 2019, the Company amended its Outside Director Compensation Policy to modify the vesting provisions for non-employee director awards in the event of certain terminations of service. The modification resulted in an acceleration of share-based compensation expense for non-employee director awards in the third quarter of 2019. Stock-Based Compensation The Company recognized total stock-based compensation cost related to equity incentive awards as follows (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Stock-based compensation cost: Common stock warrants $ — $ — $ — $ 512 Stock options 4,436 3,387 12,549 9,963 Restricted stock units 4,705 2 10,954 2 Employee stock purchase plan 792 955 2,440 955 Total stock-based compensation cost $ 9,933 $ 4,344 $ 25,943 $ 11,432 A small portion of stock-based compensation cost above is capitalized in accordance with the accounting guidance for internal-use software. The Company uses the straight-line attribution method for recognizing stock-based compensation expense. Stock Options The following table summarizes stock option activity for the Company’s stock-based compensation plans for the nine months ended September 30, 2019: Weighted Weighted Average Aggregate Average Remaining Intrinsic Exercise Contractual Value Shares Price Life (Years) (in thousands) Options outstanding as of December 31, 2018 11,094,070 $ 12.17 6.81 $ 210,523 Options granted 944,966 43.95 Options exercised (5,418,158 ) 9.52 Options cancelled or expired (211,101 ) 16.35 Options outstanding as of September 30, 2019 6,409,777 18.96 7.33 309,772 Options exercisable as of September 30, 2019 3,055,619 $ 12.52 6.19 $ 167,363 A summary of options outstanding and vested as of September 30, 2019 is as follows: Options Outstanding Options Vested and Exercisable Exercise Number Weighted Average Number Vested Weighted Average Prices Outstanding Life (in Years) and Exercisable Life (in Years) $1.50 to $1.90 73,538 1.5 73,538 1.5 2.86 to 6.40 244,573 3.2 244,573 3.2 8.04 to 11.72 556,154 4.4 556,154 4.4 12.20 to 15.06 2,529,948 6.9 1,611,280 6.7 16.06 to 24.00 1,889,042 8.4 516,733 8.3 31.99 to 42.21 890,107 9.2 39,056 8.9 55.10 to 72.67 226,415 9.3 14,285 8.6 6,409,777 3,055,619 The total intrinsic value of options exercised during the nine months ended September 30, 2019 and 2018 was $287.7 million and $11.2 million, respectively. The weighted average grant date fair value of options granted during the nine months ended September 30, 2019 and 2018 was $18.93 and $9.02 As of September 30, 2019, $33.0 million of total unrecognized compensation cost related to stock options was expected to be recognized over a weighted average period of approximately 2.6 years. All stock-based payments to participants, including employees and non-employee directors, are measured based on the grant date fair value of the awards and recognized in the consolidated statements of operations over the period during which the participant is required to perform services in exchange for the award. The vesting period is generally four years for employees and one year for non-employee directors. For the options granted during the periods presented, the fair value of options was estimated using the Black-Scholes option-pricing model with the following assumptions: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Fair market value of common stock — $38.59 - 42.21 $39.76 - 72.67 $16.86 - 42.21 Volatility — 40% 40% 40% Expected term — 6 years 5-6 years 6 years Expected dividend yield — n/a n/a n/a Risk-free interest rate — 2.92% - 3.06% 1.77% - 2.65% 2.55% - 3.06% The Board of Directors intends all options granted to be exercisable at a price per share not less than the per share fair market value of the Company’s common stock underlying those options on the date of grant. Following the closing of the IPO, the fair market value per share of the Company’s common stock for purposes of determining stock-based compensation is the closing price of the Company’s common stock as reported on the applicable grant date. Prior to the IPO, the fair value of the common stock underlying stock options and common stock warrants was estimated by the Board of Directors, with input from management and third-party valuation firms. The enterprise value utilized in determining the fair value of common stock for financial reporting purposes was estimated using the market approach and the income approach. Under the market approach, the Company used the guideline public company method, which estimates the fair value of the business enterprise based on market prices of stock of guideline public companies and the option pricing method. Indications of value were estimated by utilizing revenue multiples to measure enterprise value. The guideline merged and acquired company method was not utilized in the valuation, as the Company regarded the method as less reliable as management believed it did not directly reflect the Company’s future prospects. The income approach estimated the enterprise value based on the present value of the Company’s future estimated cash flows and the residual value beyond the forecast period. The residual value was based on an exit (or terminal) multiple observed in the comparable company method analysis. The future cash flows and residual value were discounted to their present value to reflect the risks inherent in the Company achieving these estimated cash flows. The discount rate was based on venture capital rates of return for companies nearing an initial public offering. The discount rate was applied using the mid-year convention. The mid-year convention assumes that cash flows are generated evenly throughout the year, as opposed to in a lump sum at the end of the year. The Company lacks sufficient historical data on the volatility of its stock price. Selected volatility is representative of expected future volatility and was based on the historical and implied volatility of comparable publicly traded companies over a similar expected term. The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. Given the Company’s relative inexperience of significant exercise activity, the expected term assumptions were determined based on application of the simplified method of expected term calculation by averaging the contractual life of option grants and the vesting period of such grants. This application, when coupled with the contractual life of ten years and average vesting term of four years for employees and one year for non-employee directors, creates an expected term of six years and five years, respectively. The Company has not paid and does not expect to pay dividends. The risk-free interest rate was based on the rate for a U.S. Treasury zero-coupon issue with a term that closely approximates the expected term of the option grant at the date nearest the option grant date. Restricted Stock Units The following table summarizes RSU activity for the Company’s stock-based compensation plans for the nine months ended September 30, 2019: Weighted Average Grant Date Fair Restricted Stock Units Value Per Share RSUs outstanding as of December 31, 2018 74,424 $ 32.69 RSUs granted 1,412,806 49.62 RSUs vested (37,513 ) 72.30 RSUs cancelled (65,523 ) 43.05 RSUs outstanding as of September 30, 2019 1,384,194 $ 48.41 Stock-based compensation cost for RSUs is recognized on a straight-line basis in the consolidated statements of operations over the period during which the participant is required to perform services in exchange for the award, based on the fair value of the Company’s underlying common stock on the date of grant. The vesting period of each RSU grant is generally four years for employees and one year for non-employee directors. As of September 30, 2019, $58.9 million of total unrecognized compensation cost related to RSUs was expected to be recognized over a weighted average period of approximately 3.4 years. Employee Stock Purchase Plan The ESPP became effective on June 15, 2018, the first trading day of the Company’s common stock. The ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended. Purchases are accomplished through participation in discrete offering periods. The first offering period began on June 15, 2018 and ended on January 31, 2019. Subsequent offering periods begin on August 1 and February 1 (or such other date determined by our Board of Directors or our Compensation and Leadership Development Committee). Eligible employees can select a rate of payroll deduction for purchases under the ESPP of between 1% and 15% of their eligible compensation. The purchase price for shares of common stock purchased under the ESPP is 85% of the lesser of the fair market value of the Company’s common stock on (i) the first day of the applicable offering period or (ii) the last day of the purchase period in the applicable offering period. The Company initially reserved 996,709 shares of common stock for sale under the ESPP. The aggregate number of shares reserved for sale under the ESPP increases automatically on each January 1, beginning January 1, 2019, by the number of shares equal to the least of (i) 1,000,000 shares of common stock, (ii) 1% of the aggregate number of shares of common stock outstanding on December 31 st During the three and nine months ended September 30, 2019, 134,133 and 506,897 shares of common stock were purchased under the ESPP, respectively. As of September 30, 2019, there was approximately $1.1 million For the periods presented, the fair value of ESPP purchase rights was estimated using the Black-Scholes option-pricing model with the following assumptions: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Fair market value of common stock $82.12 $38.18 $40.60 to $82.12 $24.00 to $38.18 Volatility 40% 40% 40% 40% Expected term 0.5 years 0.5 years 0.5 years 0.5 years Expected dividend yield n/a n/a n/a n/a Risk-free interest rate 2.04% 2.96% 2.04% to 2.59% 2.90% to 2.96% |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 1 2 . Income Taxes The Company used an annual effective tax rate approach to calculate income taxes for the nine months ended September 30, 2019 and 2018. The annual effective tax rate differs from the U.S. Federal statutory rate due primarily to providing a valuation allowance on deferred tax assets. The effective income tax rate was an expense of 1.8% for the nine months ended September 30, 2019, |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Shareholders | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Shareholders | 1 3 . Net Loss Per Share Attributable to Common Shareholders The Company calculates basic and diluted net loss per share attributable to common shareholders in conformity with the two-class method required for companies with participating securities. Prior to the IPO, the Company considered all series of convertible preferred stock to be participating securities. Under the two-class method, the net loss attributable to common shareholders was not allocated to the convertible preferred stock as the holders of convertible preferred stock did not have a contractual obligation to share in losses. The diluted net loss per share attributable to common shareholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, all common stock equivalents have been excluded from the calculation of diluted net loss per share attributable to common shareholders as their effect is antidilutive. As a result, basic and diluted net loss per common share was the same for each period presented. The following table sets forth the computation of basic and diluted net loss per common share (in thousands, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net loss attributable to common shareholders $ (12,354 ) $ (24,103 ) $ (34,770 ) $ (57,118 ) Denominator: Weighted-average common shares outstanding-basic 76,156 66,590 72,064 29,269 Dilutive effect of share equivalents resulting from stock options, restricted stock units, common stock warrants, ESPP shares and convertible preferred shares (as converted) — — — — Weighted-average common shares outstanding-diluted 76,156 66,590 72,064 29,269 Net loss per common share, basic and diluted $ (0.16 ) $ (0.36 ) $ (0.48 ) $ (1.95 ) The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share attributable to common shareholders for the periods presented because the impact of including them would have been antidilutive (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Options to purchase common shares 7,149 11,350 8,603 11,263 Unvested restricted stock units 1,346 262 1,066 88 Employee stock purchase plan shares 7 63 2 21 Common stock warrants — — — 315 Convertible preferred shares (as converted) — — — 31,503 Total 8,502 11,675 9,671 43,190 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Interim Financial Information | Interim Financial Information The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2019. The accompanying interim consolidated balance sheet as of September 30, 2019, the consolidated interim statements of operations for the three and nine months ended September 30, 2019 and 2018, the consolidated statements of comprehensive loss for the three and nine months ended September 30, 2019 and 2018, and the consolidated statements of cash flows for the nine months ended September 30, 2019 and 2018, are unaudited. The unaudited interim consolidated financial statements have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the consolidated financial statements. The operating results for the nine months ended September 30, 2019 are not necessarily indicative of the results expected for the full year ending December 31, 2019. The Company adopted the new revenue recognition accounting standard, Accounting Standards Codification (“ASC”) 606, effective January 1, 2019 on a modified retrospective basis (see Recently Adopted Accounting Standards |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include those of the Company and its subsidiaries after elimination of all intercompany accounts and transactions. |
Segments | Segments The Company operates its business as one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. |
Use of Estimates | Use of Estimates The preparation of financial statements 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could materially differ from those estimates. |
Fair Value Measurements | Fair Value Measurements The Company applies the fair value measurement and disclosure provisions of the Accounting Standards Codification. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 : Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 : Inputs are quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 : Inputs are unobservable inputs based on the Company’s assumptions and valuation techniques used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. The Company’s assessment of the significance of an input to the fair value measurement requires judgment, which may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. The carrying amounts reported in the consolidated financial statements approximate the fair value for cash equivalents, trade accounts receivable, trade payables, and accrued expenses due to their short-term nature. |
Long-Lived Assets | Long-Lived Assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. An impairment is recognized in the event the carrying value of such assets is not recoverable. If the carrying value is not recoverable, the fair value is determined, and an impairment is recognized for the amount by which the carrying value exceeds the fair value. No impairment of long-lived assets occurred in the first nine months of 2019. |
Self-Insurance | Self-Insurance Beginning August 1, 2019, the Company established a self-insured healthcare plan for eligible U.S. employees. Under the plan, the Company pays healthcare claims and fees to the plan administrator. Total claim payments are limited by stop loss insurance policies. As there generally is a lag between the time a claim is incurred by a participant and the time the claim is submitted for payment, the Company has recorded a self-insurance reserve for estimated outstanding claims within accrued expenses in the consolidated balance sheets. |
Income Taxes | Income Taxes The Company’s deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and income tax basis of assets and liabilities and are measured using the enacted tax rates expected to apply in the years when the differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. The Company assesses its income tax positions and records income taxes based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. The Company determines whether its uncertain tax positions are more likely than not to be sustained upon examination based on the technical merits of the position. For tax positions not meeting the more likely than not threshold, the tax amount recognized in the consolidated financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation by calculating the fair value of each option, common stock warrant, restricted stock unit (“RSU”), or purchase right issued under the employee stock purchase plan at the date of grant. The fair value of stock options, common stock warrants, and purchase rights issued under the employee stock purchase plan is estimated by applying the Black-Scholes option-pricing model. This model uses the fair value of the Company’s underlying common stock at the measurement date, the expected or contractual term of the option, warrant or purchase right, the expected volatility of its common stock, risk-free interest rates, and expected dividend yield of its common stock. The fair value of an RSU is determined using the fair value of the Company’s underlying common stock on the date of grant. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to current period presentation. Interest income on funds held from customers of $0.4 million and $0.6 million for the three months and nine months ended September 30, 2018 were reclassified from interest income within total other (income) expense, net to subscription and returns revenue in the accompanying consolidated statements of operations. |
Revenue Recognition - ASC 606 | Revenue Recognition – ASC 606 The Company primarily generates revenue from fees paid for subscriptions to tax compliance solutions and fees paid for services performed in preparing and filing tax returns on behalf of its customers. Amounts that have been invoiced are recorded in trade accounts receivable and deferred revenue, contract liabilities, or revenue, depending upon whether the revenue recognition criteria have been met. Revenue is recognized once the customer is provisioned and services are provided in an amount that reflects the consideration expected to be entitled to in exchange for those services. The Company’s revenue recognition policy follows guidance from ASC 606, Revenue from Contracts with Customers The Company determines revenue recognition through the following five-step framework: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the Company satisfies a performance obligation. The Company identifies performance obligations in its contracts with customers, which primarily include subscription services and professional services. The transaction price is determined based on the amount to which the Company expects to be entitled to in exchange for providing the promised services to the customer. The transaction price in the contract is allocated to each distinct performance obligation on a relative standalone selling price basis. Revenue is recognized when performance obligations are satisfied. Contract payment terms are typically net 30 days. Collectability is assessed based on a number of factors including collection history and creditworthiness of the customer, and the Company may mitigate exposure to credit risk by requiring payments in advance. If collectability of substantially all consideration to which the Company is entitled under the contract is determined to be not probable, revenue is not recorded until collectability becomes probable at a later date. Revenue is recorded based on the transaction price excluding amounts collected on behalf of third parties, such as sales taxes, which are collected on behalf of, and remitted to, governmental authorities. Subscription and Returns Revenue Subscription and returns revenue primarily consists of contractually agreed upon fees paid for using the Company’s cloud-based solutions, which include tax determination and compliance management services, and fees paid for preparing and filing transaction tax returns on behalf of customers. Under the Company’s subscription agreements, customers select a price plan that includes an allotted maximum number of transactions over the subscription term. Unused transactions are not carried over to the customer’s next subscription term, and customers are not entitled to refunds of fees paid or relief from fees due in the event they do not use the allotted number of transactions. If customers exceed the maximum transaction level within their price plan, the Company will generally upgrade the customer to a higher transaction price plan or, in some cases, charge overage fees on a per transaction basis. The Company’s subscription arrangements do not provide the customer with the right to take possession of the software supporting the cloud-based application services. The Company’s standard subscription contracts are non-cancelable except where contract terms provide rights to cancel in the first 60 days of the contract term. Cancellations under the Company’s standard subscription contracts are not material, and do not have a significant impact on revenue recognized. Tax returns processing services include collection of tax data and amounts, preparation of compliance forms, and submission to taxing authorities. Returns processing services are primarily charged on a subscription basis for an allotted number of returns to process within a given time period. Revenue is recognized ratably over the contractual term of the arrangement, beginning on the date that the service is made available to the customer. The Company invoices its subscription customers for the initial term at contract signing and at each subscription renewal. Initial terms generally range from 12 to 18 months, and renewal periods are typically one year. Amounts that are contractually billable and have been invoiced, or which have been collected as cash, are initially recorded as deferred revenue or contract liabilities. While most of the Company’s customers are invoiced once at the beginning of the term, a portion of customers are invoiced semi-annually, quarterly, or monthly. Included in the total subscription fee for cloud-based solutions are non-refundable upfront fees that are typically charged to new customers. These fees are associated with work performed to set up a customer with the Company’s services, and do not represent a distinct good or service. Instead, the fees are included within the transaction price and allocated to the remaining performance obligations in the contract. The Company recognizes revenue for these fees in accordance with the revenue recognition for those performance obligations. Also included in subscription and returns revenue is interest income on funds held for customers. The Company uses trust accounts at FDIC-insured institutions to provide tax remittance services to customers and collect funds from customers in advance of remittance to tax authorities. After collection and prior to remittance, the Company earns interest on these funds. Professional Services Revenue The Company bills for professional service arrangements on a fixed fee, milestone, or time and materials basis. Professional services revenue includes fees from providing tax analysis, configurations, data migrations, integration, training, and other support services. The transaction price allocated to professional services performance obligations is recognized as revenue as services are performed or upon completion of work. Judgments and Estimates The Company’s contracts with customers often include obligations to provide multiple services to a customer. Determining whether services are considered distinct performance obligations that should be accounted for separately from one another requires judgment. Subscription services and professional services are both distinct performance obligations that are accounted for separately. Judgment is required to determine the standalone selling price (“SSP”) for each distinct performance obligation. The Company allocates revenue to each performance obligation based on the relative SSP. The Company determines SSP for performance obligations based on overall pricing objectives, which take into consideration observable prices, market conditions and entity-specific factors. This includes a review of historical data related to the services being sold and customer demographics. The Company uses a range of amounts to estimate SSP for performance obligations. There is typically more than one SSP for individual services due to the stratification of those services by information, such as size and type of customer. The revenue recognition accounting policy for ASC 605 is included in the Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 28, 2019. The revenue recognition accounting policy for ASC 605 is applied to the disclosures in Note 6, which include amounts presented for 2019. There were no changes to the ASC 605 policy during the first nine months of 2019. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company has determined that certain costs related to employee sales incentive programs (sales commissions) and partner commission programs represent incremental costs of obtaining a contract and therefore should be capitalized. Capitalized costs are included in deferred commissions on the consolidated balance sheets. These deferred commissions are amortized over an estimated period of benefit, generally six years. The Company determines the period of benefit by taking into consideration past experience with customers, the expected life of acquired technology that generates revenue, industry peers, and other available information. The period of benefit is generally longer than the term of the initial contract because of anticipated renewals. The Company elected to apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense if the amortization period of the asset would have been one year or less. |
Recently Adopted Accounting Standard | Recently Adopted Accounting Standards As an emerging growth company, or “EGC”, the Jumpstart Our Business Startups Act, or the JOBS Act, allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use the adoption dates applicable to private companies. As a result, the Company’s consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. The Company will no longer qualify as an EGC on December 31, 2019, and at that time will begin to adopt accounting pronouncements at dates applicable to public companies. ASU No. 2014-09 In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09 which, along with subsequent ASUs, amends the existing accounting standards for revenue recognition, and is codified as ASC 606. This guidance is based on principles that govern the recognition of revenue at the amount an entity expects to be entitled to receive as services are provided to customers. The Company adopted the new revenue recognition standard as of January 1, 2019 on a modified retrospective basis and applied the new revenue recognition standard only to contracts that were not completed contracts prior to January 1, 2019. The cumulative effect of the changes made to the consolidated January 1, 2019 balance sheet resulting from the adoption of ASC 606 was as follows (in thousands): Balance at December 31, 2018 Adjustments due to ASC 606 Balance at January 1, 2019 Assets Trade accounts receivable $ 40,287 $ (805 ) $ 39,482 Deferred commissions, current — 4,464 4,464 Deferred commissions, noncurrent — 14,803 14,803 Liabilities and shareholders' equity Accrued expenses 42,101 2,090 44,191 Deferred revenue, current 125,260 (3,157 ) 122,103 Deferred revenue, noncurrent 9,393 (8,093 ) 1,300 Accumulated deficit (487,602 ) 27,622 (459,980 ) The adoption changed the revenue recognition for non-refundable upfront fees included with new or upgraded subscriptions. Prior to the adoption of the new revenue recognition standard, the Company recognized revenue for these fees over the expected term of the customer relationship. Under the new guidance, the transaction price is allocated to distinct performance obligations. Because upfront fees do not represent a distinct performance obligation, any such fees will be recognized over the period in which distinct performance obligations in the contract are satisfied, which is typically the subscription term. The new revenue recognition standard also changed the determination of the contract term associated with subscriptions that were upgraded during the subscription term. Prior to the adoption of the new revenue recognition standard, additional fees associated with an upgraded subscription for services already delivered were recognized upon upgrade. Under the new guidance, the fees related to the upgraded subscriptions are recognized prospectively over the contract term. The adoption also changed the revenue recognition for contracts that include non-standard, extended customer cancellation provisions. Under the new guidance, a contract only exists for the period of time in which a contract cannot be cancelled, which generally corresponds to the termination notice period. Prior to the adoption of the new revenue recognition standard, non-standard, extended cancellation provisions were not a factor in determining the term of a contract. To the extent cash is received for a contract that includes a non-standard, extended cancellation provision, deferred revenue is recognized only for the amount for which the Company has an enforceable right. A separate contract liability is established for the remaining amount. The new revenue recognition standard requires the Company to estimate variable consideration at contract inception as an increase or decrease to the transaction price. The total transaction price, inclusive of variable consideration, is allocated to performance obligations, or distinct service periods within a performance obligation, on a relative SSP basis and recognized as performance obligations are satisfied. Prior to the adoption of the new revenue recognition standard, overage fees, concessions, and cancellations allowed in the first 60 days of a standard subscription contract were recognized as they occurred. The new revenue recognition standard requires capitalization of certain incremental costs of obtaining a contract, such as certain employee sales commissions and partner commissions, which impacts the period in which the expense is recorded. Prior to the adoption of the new revenue recognition standard, those commission costs were expensed as incurred. Under the new revenue recognition standard, the Company is required to capitalize incremental costs of obtaining a contract and amortize them over the expected period of benefit, which is generally six years. This results in a deferral of sales commission and partner commission expense each period. For further discussion regarding the impacts of adopting the new revenue recognition standard, see Note 6. ASU No. 2016-15 In August 2016, the FASB issued ASU No. 2016-15, related to classification of certain cash receipts and payments. ASU No. 2016-15 is intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU No. 2016-15 is required for annual reporting periods beginning after December 15, 2018 for business entities that are not public, with early adoption permitted. The Company adopted the guidance on January 1, 2019. The adoption had no impact on the consolidated financial statements. ASU No. 2018-07 In June 2018, the FASB issued ASU No. 2018-07, related to stock compensation for nonemployee share-based awards. ASU No. 2018-07 expands the scope of Topic 718 – Compensation – Stock Compensation to include share-based payments issued to nonemployees, with certain exceptions, in order to align the accounting for employees and nonemployees. The guidance in ASU No. 2018-07 is required for annual reporting periods beginning after December 15, 2019 for business entities that are not public, with early adoption permitted. The Company early adopted the guidance on January 1, 2019. The adoption had an immaterial impact on the consolidated financial statements. |
New Accounting Standards Not Yet Adopted | New Accounting Standards Not Yet Adopted ASU No. 2016-02 In February 2016, the FASB issued ASU No. 2016-02, which was subsequently amended in July 2018 by ASU No. 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Targeted Improvements - Leases (Topic 842)” The Company will adopt ASC 842 using the alternative transition method provided in ASU 2018-11, which does not require adjusting comparative period financial information. The Company expects to elect the package of practical expedients permitted under the transition guidance which allows the carry forward of the historical lease identification, lease classification and initial direct costs of existing leases. In addition, the Company expects to elect the practical expedient to not separate lease and nonlease components. Further, the Company made an accounting policy election to adopt the short-term lease exception, which allows the Company to not record leases with an initial term of 12 months or less on the balance sheet. The Company currently expects that most operating lease commitments will be subject to the new standard and will be recognized as operating lease liabilities and right-of-use assets upon adoption. The Company expects the impact of adoption of ASC 842 will result in a material increase in noncurrent assets and noncurrent liabilities in the consolidated balance sheets. As an EGC, the Company has elected to use adoption dates applicable to private companies. ASU No. 2016-13 In June 2016, the FASB issued ASU No. 2016-13, related to credit losses, which amends the current accounting guidance and requires the measurements of all expected losses based on historical experience, current conditions and reasonable and supportable forecasts. The new guidance replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The guidance in ASU No. 2016-13 is required for annual periods, including interim periods within those annual periods, beginning after December 15, 2019 for public business entities ASU No. 2018-15 In August 2018, the FASB issued ASU No. 2018-15, related to implementation costs incurred in a cloud computing arrangement that is a service contract. The guidance in ASU No. 2018-15 is required for annual reporting periods , including interim periods within those annual periods, The Company will adopt this guidance on January 1, 2020. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of the Cumulative Effect of Adoption of ASC 606 within the Consolidated Balance Sheets | The cumulative effect of the changes made to the consolidated January 1, 2019 balance sheet resulting from the adoption of ASC 606 was as follows (in thousands): Balance at December 31, 2018 Adjustments due to ASC 606 Balance at January 1, 2019 Assets Trade accounts receivable $ 40,287 $ (805 ) $ 39,482 Deferred commissions, current — 4,464 4,464 Deferred commissions, noncurrent — 14,803 14,803 Liabilities and shareholders' equity Accrued expenses 42,101 2,090 44,191 Deferred revenue, current 125,260 (3,157 ) 122,103 Deferred revenue, noncurrent 9,393 (8,093 ) 1,300 Accumulated deficit (487,602 ) 27,622 (459,980 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following financial assets and liabilities are measured at fair value on a recurring basis. The fair values recognized in the accompanying consolidated balance sheets and the level within the fair value hierarchy in which the fair value measurements fall is as follows (in thousands): Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Fair Identical Assets Inputs Inputs September 30, 2019 Value (Level 1) (Level 2) (Level 3) Money market funds $ 440,053 $ 440,053 $ — $ — Earnout related to acquisitions 15,461 — — 15,461 Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Fair Identical Assets Inputs Inputs December 31, 2018 Value (Level 1) (Level 2) (Level 3) Money market funds $ 138,483 $ 138,483 $ — $ — Earnout related to acquisitions — — — — |
Summary of Reconciliation of Beginning and Ending Balances of Recurring Fair Value Measurements | A reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying consolidated balance sheets using significant unobservable (Level 3) inputs, is as follows (in thousands): Three Months Ended September 30, 2019 2018 Earnout liability: Balance beginning of period $ 6,428 $ — Fair value recorded at acquisition 9,399 — Payments of earnout liability (500 ) — Total unrealized (gains) losses included in other (income) expense, net 134 — Balance end of period $ 15,461 $ — Nine Months Ended September 30, 2019 2018 Earnout liability: Balance beginning of period $ — $ 380 Fair value recorded at acquisition 15,351 — Payments of earnout liability (500 ) — Total unrealized (gains) losses included in other (income) expense, net 610 (380 ) Balance end of period $ 15,461 $ — |
Balance Sheet Detail (Tables)
Balance Sheet Detail (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): Useful September 30, December 31, Life (Years) 2019 2018 Computer equipment and software 3 to 5 $ 15,581 $ 12,904 Internally developed software 6 5,205 3,620 Furniture and fixtures 5 6,770 5,850 Office equipment 3 to 5 858 586 Leasehold improvements 1 to 10 28,074 26,788 56,488 49,748 Accumulated depreciation (21,951 ) (16,375 ) Property and equipment—net $ 34,537 $ 33,373 |
Schedule of Prepaid Expense And Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): September 30, December 31, 2019 2018 Prepaid expenses $ 11,194 $ 9,578 Accrued investment income 687 260 Deferred financing costs — 643 Deposits 298 325 Other 1,677 501 Total $ 13,856 $ 11,307 |
Schedule of Accrued Expenses | Accrued expenses consisted of the following (in thousands): September 30, December 31, 2019 2018 Accrued payroll and related taxes $ 4,184 $ 3,800 Accrued federal, state, and local taxes 2,484 1,827 Accrued bonus 13,707 10,766 Self-insurance reserves 1,361 — Employee stock purchase plan contributions 1,908 6,473 Accrued sales commissions 3,599 6,889 Accrued partner commissions 6,540 5,535 Contract liabilities 4,843 — Accrued purchase price related to acquisitions 2,984 — Other 8,254 6,811 Total $ 49,864 $ 42,101 |
Acquisitions of Businesses (Tab
Acquisitions of Businesses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Compli, Inc. | |
Business Acquisition [Line Items] | |
Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed | Estimated fair values of the assets acquired and the liabilities assumed in the Compli Purchase as of the acquisition date are provided in the following table (in thousands): Assets acquired: Current assets $ 505 Developed technology, customer relationships, and other intangibles 4,288 Goodwill 12,807 Total assets acquired 17,600 Liabilities assumed: Current liabilities 482 Total liabilities assumed 482 Net assets acquired $ 17,118 |
Summary of Valuation Methodologies, Significant Assumptions and Estimated Useful Lives | The Company utilizes different valuation approaches and methodologies to determine the fair value of acquired intangible assets. A summary of the valuation methodologies, significant assumptions, and estimated useful lives of acquired intangible assets in the Compli Purchase are provided in the below table (in thousands): Intangible Assigned Value Valuation Methodology Discount Rate Estimated Useful Life Customer relationships $ 3,250 Multi-period excess earnings-income approach 13 % 6 years Trademarks and trade names 32 Relief from royalty- income approach 13 % 2 years Developed technology and customer database 910 Relief from royalty- income approach 13 % 6 years Noncompetition agreements 96 With-and-without valuation- income approach 13 % 3 years |
Indix Corporation | |
Business Acquisition [Line Items] | |
Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed | Estimated fair values of the assets acquired and the liabilities assumed in the Indix Purchase as of the acquisition date are provided in the following table (in thousands): Assets acquired: Current assets $ 94 Developed technology 4,472 Goodwill 4,953 Total assets acquired 9,519 Liabilities assumed: Current liabilities 392 Total liabilities assumed 392 Net assets acquired $ 9,127 |
Summary of Valuation Methodologies, Significant Assumptions and Estimated Useful Lives | The Company utilizes different valuation approaches and methodologies to determine the fair value of acquired intangible assets. A summary of the valuation methodologies, significant assumptions, and estimated useful lives of acquired intangible assets in the Indix Purchase are provided in the below table (in thousands): Intangible Assigned Value Valuation Methodology Discount Rate Estimated Useful Life Developed technology $ 4,472 Relief from royalty- income approach 24.5% 6 years |
Portway International, Inc | |
Business Acquisition [Line Items] | |
Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed | Estimated fair values of the assets acquired and the liabilities assumed in the Portway Purchase as of the acquisition date are provided in the following table (in thousands): Assets acquired: Property and equipment $ 76 Customer relationships and other intangibles 1,865 Goodwill 22,376 Total assets acquired 24,317 Liabilities assumed: Total liabilities assumed — Net assets acquired $ 24,317 |
Summary of Valuation Methodologies, Significant Assumptions and Estimated Useful Lives | The Company utilizes different valuation approaches and methodologies to determine the fair value of acquired intangible assets. A summary of the valuation methodologies, significant assumptions, and estimated useful lives of acquired intangible assets in the Portway Purchase are provided in the below table (in thousands): Intangible Assigned Value Valuation Methodology Discount Rate Estimated Useful Life Customer relationships $ 1,759 Multi-period excess earnings-income approach 12 % 6 years Noncompetition agreements 106 With-and-without valuation- income approach 12 % 4 years |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Impact From Adoption of New Revenue Recognition on Statements | Consolidated Balance Sheets – Reconciliation of the Impacts from the Adoption of the New Revenue Recognition Standard The following schedule summarizes the impacts from the adoption of the new revenue recognition standard on the consolidated balance sheet as of September 30, 2019 (in thousands): September 30, December 31, 2019 2018 As Reported (ASC 606) Impacts from Adoption Without Adoption (ASC 605) As Reported (ASC 605) (unaudited) (unaudited) (unaudited) Assets Current assets: Cash and cash equivalents $ 446,563 $ — $ 446,563 $ 142,322 Trade accounts receivable—net of allowance for doubtful accounts 49,124 1,044 50,168 40,287 Deferred commissions 8,402 (8,402 ) — — Prepaid expenses and other current assets 13,856 — 13,856 11,307 Total current assets before customer fund assets 517,945 (7,358 ) 510,587 193,916 Funds held from customers 16,665 — 16,665 13,113 Receivable from customers—net of allowance for doubtful accounts 690 — 690 270 Total current assets 535,300 (7,358 ) 527,942 207,299 Noncurrent assets: Property and equipment—net 34,537 — 34,537 33,373 Goodwill 100,926 — 100,926 61,300 Intangible assets—net 24,543 — 24,543 19,371 Deferred commissions 27,206 (27,206 ) — — Other noncurrent assets 2,420 — 2,420 1,589 Total assets $ 724,932 $ (34,564 ) $ 690,368 $ 322,932 Liabilities and shareholders' equity Current liabilities: Trade payables $ 10,962 $ — $ 10,962 $ 4,847 Accrued expenses 49,864 (4,843 ) 45,021 42,101 Accrued earnout liabilities 6,102 — 6,102 116 Deferred revenue 147,713 5,349 153,062 125,260 Total current liabilities before customer fund obligations 214,641 506 215,147 172,324 Customer fund obligations 17,306 — 17,306 13,349 Total current liabilities 231,947 506 232,453 185,673 Noncurrent liabilities: Deferred revenue 753 8,353 9,106 9,393 Deferred tax liability 698 — 698 560 Deferred rent 15,905 — 15,905 17,317 Accrued earnout liabilities 9,399 — 9,399 — Other noncurrent liabilities 2,361 — 2,361 436 Total liabilities 261,063 8,859 269,922 213,379 Commitments and contingencies Shareholders' equity: Preferred stock — — — — Common stock 8 — 8 7 Additional paid-in capital 961,733 — 961,733 599,493 Accumulated other comprehensive loss (3,122 ) — (3,122 ) (2,345 ) Accumulated deficit (494,750 ) (43,423 ) (538,173 ) (487,602 ) Total shareholders’ equity 463,869 (43,423 ) 420,446 109,553 Total liabilities and shareholders' equity $ 724,932 $ (34,564 ) $ 690,368 $ 322,932 Consolidated Statements of Operations (Unaudited) – Reconciliation of the Impacts from the Adoption of the New Revenue Recognition Standard The following schedules summarize the impacts from the adoption of the new revenue recognition standard on the consolidated statement of operations for the three and nine months ended September 30, 2019 (in thousands, except per share amounts): For the Three Months Ended September 30, 2019 2018 As Reported (ASC 606) Impacts from Adoption Without Adoption (ASC 605) As Reported (ASC 605) Revenue: Subscription and returns $ 91,986 $ 71 $ 92,057 $ 64,611 Professional services 6,539 (49 ) 6,490 5,308 Total revenue 98,525 22 98,547 69,919 Cost of revenue: Subscription and returns 25,621 — 25,621 17,330 Professional services 4,157 — 4,157 2,906 Total cost of revenue 29,778 — 29,778 20,236 Gross profit 68,747 22 68,769 49,683 Operating expenses: Research and development 21,871 — 21,871 13,285 Sales and marketing 40,313 4,789 45,102 41,276 General and administrative 20,511 — 20,511 10,235 Goodwill impairment — — — 9,174 Total operating expenses 82,695 4,789 87,484 73,970 Operating loss (13,948 ) (4,767 ) (18,715 ) (24,287 ) Other (income) expense: Interest income (2,202 ) — (2,202 ) (676 ) Interest expense 2 — 2 534 Other (income) expense, net 265 — 265 49 Total other (income) expense, net (1,935 ) — (1,935 ) (93 ) Loss before income taxes (12,013 ) (4,767 ) (16,780 ) (24,194 ) Provision for (benefit from) income taxes 341 — 341 (91 ) Net loss $ (12,354 ) $ (4,767 ) $ (17,121 ) $ (24,103 ) Net loss per share attributable to common shareholders, basic and diluted $ (0.16 ) $ (0.06 ) $ (0.22 ) $ (0.36 ) Weighted average shares of common stock outstanding, basic and diluted 76,156 76,156 66,590 For the Nine Months Ended September 30, 2019 2018 As Reported (ASC 606) Impacts from Adoption Without Adoption (ASC 605) As Reported (ASC 605) Revenue: Subscription and returns $ 255,225 $ 689 $ 255,914 $ 182,326 Professional services 19,569 (149 ) 19,420 12,849 Total revenue 274,794 540 275,334 195,175 Cost of revenue: Subscription and returns 69,537 — 69,537 47,984 Professional services 12,883 — 12,883 8,393 Total cost of revenue 82,420 — 82,420 56,377 Gross profit 192,374 540 192,914 138,798 Operating expenses: Research and development 56,823 — 56,823 38,332 Sales and marketing 119,199 16,340 135,539 119,187 General and administrative 53,764 — 53,764 28,787 Goodwill impairment — — — 9,174 Total operating expenses 229,786 16,340 246,126 195,480 Operating loss (37,412 ) (15,800 ) (53,212 ) (56,682 ) Other (income) expense: Interest income (4,251 ) — (4,251 ) (811 ) Interest expense 286 — 286 2,495 Other (income) expense, net 694 — 694 (423 ) Total other (income) expense, net (3,271 ) — (3,271 ) 1,261 Loss before income taxes (34,141 ) (15,800 ) (49,941 ) (57,943 ) Provision for (benefit from) income taxes 629 — 629 (825 ) Net loss $ (34,770 ) $ (15,800 ) $ (50,570 ) $ (57,118 ) Net loss per share attributable to common shareholders, basic and diluted $ (0.48 ) $ (0.22 ) $ (0.70 ) $ (1.95 ) Weighted average shares of common stock outstanding, basic and diluted 72,064 72,064 29,269 Consolidated Statements of Comprehensive Loss (Unaudited) – Reconciliation of the Impacts from the Adoption of the New Revenue Recognition Standard The following schedules summarize the impacts from the adoption of the new revenue recognition standard on the consolidated statement of comprehensive loss for the three and nine months ended September 30, 2019 (in thousands): For the Three Months Ended September 30, 2019 2018 As Reported (ASC 606) Impacts from Adoption Without Adoption (ASC 605) As Reported (ASC 605) Net loss $ (12,354 ) $ (4,767 ) $ (17,121 ) $ (24,103 ) Other comprehensive loss—Foreign currency translation (591 ) — (591 ) (242 ) Total comprehensive loss $ (12,945 ) $ (4,767 ) $ (17,712 ) $ (24,345 ) For the Nine Months Ended September 30, 2019 2018 As Reported (ASC 606) Impacts from Adoption Without Adoption (ASC 605) As Reported (ASC 605) Net loss $ (34,770 ) $ (15,800 ) $ (50,570 ) $ (57,118 ) Other comprehensive loss—Foreign currency translation (777 ) — (777 ) (2,687 ) Total comprehensive loss $ (35,547 ) $ (15,800 ) $ (51,347 ) $ (59,805 ) Consolidated Statements of Cash Flows (Unaudited) – Reconciliation of the Impacts from the Adoption of the New Revenue Recognition Standard The following schedule summarizes the impacts from the adoption of the new revenue recognition standard on the consolidated statement of cash flows for the nine months ended September 30, 2019 (in thousands): For the Nine Months Ended September 30, 2019 2018 As Reported (ASC 606) Impacts from Adoption Without Adoption (ASC 605) As Reported (ASC 605) Cash flows from operating activities: Net loss $ (34,770 ) $ (15,800 ) $ (50,570 ) $ (57,118 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 11,684 — 11,684 9,390 Goodwill impairment — — 9,174 Stock-based compensation 25,906 — 25,906 11,411 Deferred tax expense (benefit) 138 — 138 (1,110 ) Amortization of deferred rent (778 ) — (778 ) 231 Non-cash change in earnout liability 610 — 610 (430 ) Non-cash bad debt expense (recovery) 602 — 602 (382 ) Other 227 — 227 526 Changes in operating assets and liabilities: Trade accounts receivable (9,648 ) (238 ) (9,886 ) (7,852 ) Prepaid expenses and other current assets (3,274 ) — (3,274 ) (2,688 ) Deferred commissions (16,340 ) 16,340 — — Other noncurrent assets (831 ) — (831 ) (549 ) Trade payables 4,818 — 4,818 (3,353 ) Accrued expenses 2,305 (2,753 ) (448 ) 6,095 Deferred rent (lease incentives) — — — 579 Deferred revenue 24,782 2,451 27,233 25,978 Net cash provided by (used in) operating activities 5,431 — 5,431 (10,098 ) Cash flows from investing activities: Net (increase) decrease in customer fund assets (3,986 ) — (3,986 ) 2,053 Cash paid for acquired intangible assets (139 ) — (139 ) (5,002 ) Cash paid for acquisitions of businesses (30,310 ) — (30,310 ) — Purchase of property and equipment (7,196 ) — (7,196 ) (12,914 ) Net cash used in investing activities (41,631 ) — (41,631 ) (15,863 ) Cash flows from financing activities: Proceeds from common stock offering, net of underwriting discounts 274,705 274,705 192,510 Payments of deferred financing costs (555 ) — (555 ) (2,084 ) Payments on credit facility — — — (63,000 ) Proceeds from credit facility — — — 23,000 Repayment of note payable — — — (234 ) Net increase (decrease) in customer fund obligations 3,986 — 3,986 (2,053 ) Proceeds from exercise of stock options and common stock warrants 51,583 — 51,583 5,787 Proceeds from purchases of stock under employee stock purchase plan 12,293 — 12,293 — Taxes paid related to net share settlement of stock-based awards (1,183 ) — (1,183 ) (2,326 ) Repurchase of shares — — — (1,806 ) Payment related to business combination earnouts (375 ) — (375 ) — Net cash provided by financing activities 340,454 — 340,454 149,794 Foreign currency effect on cash and cash equivalents (13 ) — (13 ) 185 Net change in cash and cash equivalents 304,241 — 304,241 124,018 Cash and cash equivalents—Beginning of period 142,322 — 142,322 14,075 Cash and cash equivalents—End of period $ 446,563 — $ 446,563 $ 138,093 |
Summary of Total Revenues | The following table disaggregates revenue generated within the United States (U.S.) from revenue generated from customers outside of the U.S. Revenue for transaction tax compliance in the U.S. is further disaggregated based on the solutions or services purchased by customers. Total revenues consisted of the following (in thousands): For the Three Months Ended September 30, 2019 2018 Revenue (U.S.): Subscription and returns Tax determination $ 52,722 $ 37,931 Tax returns and compliance management 33,456 22,613 Interest income on funds held for customers 907 392 Total subscription and returns 87,085 60,936 Professional services 6,019 4,595 Total revenue (U.S.) 93,104 65,531 Total revenue (non-U.S.) 5,421 4,388 Total revenue $ 98,525 $ 69,919 For the Nine Months Ended September 30, 2019 2018 Revenue (U.S.): Subscription and returns Tax determination $ 146,660 $ 105,330 Tax returns and compliance management 90,829 66,747 Interest income on funds held for customers 2,448 562 Total subscription and returns 239,937 172,639 Professional services 17,416 10,743 Total revenue (U.S.) 257,353 183,382 Total revenue (non-U.S.) 17,441 11,793 Total revenue $ 274,794 $ 195,175 |
Summary of Activity Impacting Contract Liabilities | A summary of the activity impacting the contract liabilities during the nine months ended September 30, 2019 is presented below (in thousands): Contract Liabilities Balance at December 31, 2018 $ — Adoption of ASC 606 2,090 Contract liabilities transferred to deferred revenue (3,897 ) Addition to contract liabilities 6,650 Balance at September 30, 2019 $ 4,843 |
Summary of Activity Impacting Deferred Revenue | Deferred Revenue A summary of the activity impacting deferred revenue balances during the nine months ended September 30, 2019 is presented below (in thousands): Deferred Revenue Balance at December 31, 2018 $ 134,653 Adoption of ASC 606 (11,250 ) Revenue recognized (274,794 ) Additional amounts deferred 299,857 Balance at September 30, 2019 $ 148,466 |
Summary of Activity Impacting Deferred Commissions | A summary of the activity impacting the deferred commissions during the nine months ended September 30, 2019 is presented below (in thousands): Deferred Commissions Balance at December 31, 2018 $ — Adoption of ASC 606 19,267 Additional commissions deferred 21,480 Amortization of deferred commissions (5,139 ) Balance at September 30, 2019 $ 35,608 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-lived Intangible Assets | Finite-lived intangible assets consisted of the following (in thousands): September 30, 2019 Average Useful Life (Years) Gross Accumulated Amortization Net Customer relationships 3 to 10 $ 20,360 $ (10,802 ) $ 9,558 Developed technology 3 to 8 36,222 (21,440 ) 14,782 Noncompete agreements 3 to 5 777 (595 ) 182 Tradename and trademarks 1 to 4 452 (431 ) 21 $ 57,811 $ (33,268 ) $ 24,543 December 31, 2018 Average Useful Life (Years) Gross Accumulated Amortization Net Customer relationships 3 to 10 $ 15,412 $ (9,202 ) $ 6,210 Developed technology 3 to 8 30,935 (17,806 ) 13,129 Noncompete agreements 3 to 5 574 (542 ) 32 Tradename and trademarks 1 to 4 420 (420 ) — $ 47,341 $ (27,970 ) $ 19,371 |
Schedule of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill during the nine months ended September 30, 2019 are summarized as follows (in thousands): Balance—December 31, 2018 $ 61,300 Acquisition of Compli 12,807 Acquisition of Indix 4,953 Acquisition of Portway 22,376 Cumulative translation adjustments (510 ) Balance—September 30, 2019 $ 100,926 |
Convertible Preferred Stock a_2
Convertible Preferred Stock and Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders Equity Note [Abstract] | |
Summary of Changes of Convertible Preferred Stock and Shareholders' Equity (Deficit) | The changes to the Company’s shareholders’ equity during the nine months September 30, 2019 is as follows (in thousands, except share data): Accumulated Additional Other Total Common Stock Paid-In Comprehensive Accumulated Shareholders’ Shares Amount Capital Income (Loss) Deficit Equity Balance at January 1, 2019 66,768,563 $ 7 $ 599,493 $ (2,345 ) $ (487,602 ) $ 109,553 Impact of adoption of new accounting pronouncements (see Note 2) 27,622 27,622 Exercise of stock options 2,763,291 27,311 27,311 Shares tendered for cashless redemption of stock options (2,805 ) (93 ) (93 ) Stock-based compensation cost 6,571 6,571 Shares issued under employee stock purchase plan 372,764 7,664 7,664 Shares issued to purchase intangible assets 1,634 50 50 Loss on translation adjustment (462 ) (462 ) Net loss (9,243 ) (9,243 ) Balance at March 31, 2019 69,903,447 $ 7 $ 640,996 $ (2,807 ) $ (469,223 ) $ 168,973 Proceeds from common stock offering, net of underwriting discounts 4,133,984 1 274,704 274,705 Public offering costs (1,198 ) (1,198 ) Exercise of stock options 1,368,510 13,106 13,106 Vesting of restricted stock units 902 — Stock-based compensation cost 9,439 9,439 Shares issued to purchase intangible assets 37,708 — Gain on translation adjustment 276 276 Net loss (13,173 ) (13,173 ) Balance at June 30, 2019 75,444,551 8 937,047 (2,531 ) (482,396 ) 452,128 Exercise of stock options 1,286,357 11,166 11,166 Shares tendered for cashless redemption of stock-based awards (13,712 ) (1,090 ) (1,090 ) Vesting of restricted stock units 36,611 — Stock-based compensation cost 9,933 9,933 Shares issued under employee stock purchase plan 134,133 4,629 4,629 Shares issued to purchase intangible assets 676 48 48 Loss on translation adjustment (591 ) (591 ) Net loss (12,354 ) (12,354 ) Balance at September 30, 2019 76,888,616 8 961,733 (3,122 ) (494,750 ) 463,869 The changes to the Company’s convertible preferred stock and shareholders’ equity (deficit) for the nine months ended September 30, 2018 is as follows (in thousands, except share data): Accumulated Convertible Additional Other Total Preferred Stock Common Stock Paid-In Comprehensive Accumulated Shareholders’ Shares Amount Shares Amount Capital Income (Loss) Deficit Deficit Balance at January 1, 2018 101,786,205 $ 370,921 5,992,293 $ 1 $ 18,121 $ 338 $ (412,052 ) $ (393,592 ) Exercise of stock options 785,991 6,025 6,025 Shares tendered for cashless redemption of stock options (465,710 ) (7,715 ) (7,715 ) Stock-based compensation cost 3,517 3,517 Repurchase of shares (10,000 ) (67 ) (48,152 ) (752 ) (752 ) Gain on translation adjustment 603 603 Net loss (15,249 ) (15,249 ) Balance at March 31, 2018 101,776,205 $ 370,854 6,264,422 $ 1 $ 19,196 $ 941 $ (427,301 ) $ (407,163 ) Proceeds from common stock offering, net of underwriters' discounts 8,625,000 1 192,509 192,510 Initial public offering costs (3,425 ) (3,425 ) Conversion of preferred stock to common stock (101,776,205 ) (370,854 ) 50,888,014 5 370,849 370,854 Shares tendered for cashless redemption of stock options (138,813 ) (3,483 ) (3,483 ) Exercise of stock options 305,722 2,752 2,752 Exercise of warrants 570,000 5,783 5,783 Stock-based compensation cost 3,571 3,571 Repurchase of shares (56,695 ) (986 ) (986 ) Loss on translation adjustment (3,048 ) (3,048 ) Shares issued to purchase intangible assets 2,555 2,555 Net loss (17,766 ) (17,766 ) Balance at June 30, 2018 — $ — 66,457,650 $ 7 $ 589,321 $ (2,107 ) $ (445,067 ) $ 142,154 Exercise of stock options 40,003 439 439 Shares tendered for cashless redemption of stock options (7,497 ) (343 ) (343 ) Stock-based compensation cost 4,344 4,344 Loss on translation adjustment (242 ) (242 ) Net loss (24,103 ) (24,103 ) Balance at September 30, 2018 — $ — 66,490,156 $ 7 $ 593,761 $ (2,349 ) $ (469,170 ) $ 122,249 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Stock-Based Compensation Expense Related to Equity Incentive Rewards | The Company recognized total stock-based compensation cost related to equity incentive awards as follows (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Stock-based compensation cost: Common stock warrants $ — $ — $ — $ 512 Stock options 4,436 3,387 12,549 9,963 Restricted stock units 4,705 2 10,954 2 Employee stock purchase plan 792 955 2,440 955 Total stock-based compensation cost $ 9,933 $ 4,344 $ 25,943 $ 11,432 |
Summary of Stock Option Activity | Stock Options The following table summarizes stock option activity for the Company’s stock-based compensation plans for the nine months ended September 30, 2019: Weighted Weighted Average Aggregate Average Remaining Intrinsic Exercise Contractual Value Shares Price Life (Years) (in thousands) Options outstanding as of December 31, 2018 11,094,070 $ 12.17 6.81 $ 210,523 Options granted 944,966 43.95 Options exercised (5,418,158 ) 9.52 Options cancelled or expired (211,101 ) 16.35 Options outstanding as of September 30, 2019 6,409,777 18.96 7.33 309,772 Options exercisable as of September 30, 2019 3,055,619 $ 12.52 6.19 $ 167,363 |
Summary of Options Outstanding and Vested by Range of Exercise Prices | A summary of options outstanding and vested as of September 30, 2019 is as follows: Options Outstanding Options Vested and Exercisable Exercise Number Weighted Average Number Vested Weighted Average Prices Outstanding Life (in Years) and Exercisable Life (in Years) $1.50 to $1.90 73,538 1.5 73,538 1.5 2.86 to 6.40 244,573 3.2 244,573 3.2 8.04 to 11.72 556,154 4.4 556,154 4.4 12.20 to 15.06 2,529,948 6.9 1,611,280 6.7 16.06 to 24.00 1,889,042 8.4 516,733 8.3 31.99 to 42.21 890,107 9.2 39,056 8.9 55.10 to 72.67 226,415 9.3 14,285 8.6 6,409,777 3,055,619 |
Summary of Fair Value Estimated Using Black-Scholes Option Pricing Model Assumptions | For the options granted during the periods presented, the fair value of options was estimated using the Black-Scholes option-pricing model with the following assumptions: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Fair market value of common stock — $38.59 - 42.21 $39.76 - 72.67 $16.86 - 42.21 Volatility — 40% 40% 40% Expected term — 6 years 5-6 years 6 years Expected dividend yield — n/a n/a n/a Risk-free interest rate — 2.92% - 3.06% 1.77% - 2.65% 2.55% - 3.06% |
Summary of RSU Activity | The following table summarizes RSU activity for the Company’s stock-based compensation plans for the nine months ended September 30, 2019: Weighted Average Grant Date Fair Restricted Stock Units Value Per Share RSUs outstanding as of December 31, 2018 74,424 $ 32.69 RSUs granted 1,412,806 49.62 RSUs vested (37,513 ) 72.30 RSUs cancelled (65,523 ) 43.05 RSUs outstanding as of September 30, 2019 1,384,194 $ 48.41 |
2018 Employee Stock Purchase Plan | |
Summary of Fair Value Estimated Using Black-Scholes Option Pricing Model Assumptions | For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Fair market value of common stock $82.12 $38.18 $40.60 to $82.12 $24.00 to $38.18 Volatility 40% 40% 40% 40% Expected term 0.5 years 0.5 years 0.5 years 0.5 years Expected dividend yield n/a n/a n/a n/a Risk-free interest rate 2.04% 2.96% 2.04% to 2.59% 2.90% to 2.96% |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Shareholders (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Common Share | The following table sets forth the computation of basic and diluted net loss per common share (in thousands, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net loss attributable to common shareholders $ (12,354 ) $ (24,103 ) $ (34,770 ) $ (57,118 ) Denominator: Weighted-average common shares outstanding-basic 76,156 66,590 72,064 29,269 Dilutive effect of share equivalents resulting from stock options, restricted stock units, common stock warrants, ESPP shares and convertible preferred shares (as converted) — — — — Weighted-average common shares outstanding-diluted 76,156 66,590 72,064 29,269 Net loss per common share, basic and diluted $ (0.16 ) $ (0.36 ) $ (0.48 ) $ (1.95 ) |
Schedule of Potential Shares Not Included in the Computation of Diluted Earnings Per Share | The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share attributable to common shareholders for the periods presented because the impact of including them would have been antidilutive (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 2019 2018 Options to purchase common shares 7,149 11,350 8,603 11,263 Unvested restricted stock units 1,346 262 1,066 88 Employee stock purchase plan shares 7 63 2 21 Common stock warrants — — — 315 Convertible preferred shares (as converted) — — — 31,503 Total 8,502 11,675 9,671 43,190 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Segment | Sep. 30, 2018USD ($) | |
Accounting Policies [Line Items] | |||
Number of operating segment | Segment | 1 | ||
Impairment of long-lived assets | $ 0 | ||
Tax position likely of being realized upon ultimate settlement | greater than 50% | ||
Percentage of likelihood of realization of tax position upon ultimate settlement, minimum | 50.00% | ||
Interest income earned on funds held for customers | $ 400,000 | $ 600,000 | |
Contract payment net terms | 30 days | ||
Revenue recognition, contractual renewal period | 1 year | ||
Deferred commission amortized period | 6 years | ||
Concessions and cancellations period allowed for standard subscription contract prior to adoption | 60 days | ||
Minimum | |||
Accounting Policies [Line Items] | |||
Revenue recognition initial contractual term | 12 months | ||
Maximum | |||
Accounting Policies [Line Items] | |||
Revenue recognition initial contractual term | 18 months | ||
Amortization period of asset | 1 year |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of the Cumulative Effect of Adoption of ASC 606 within the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
Trade accounts receivable | $ 49,124 | $ 39,482 | $ 40,287 |
Deferred commissions, current | 8,402 | 4,464 | 0 |
Deferred commissions, noncurrent | 27,206 | 14,803 | 0 |
Liabilities and shareholders' equity | |||
Accrued expenses | 49,864 | 44,191 | 42,101 |
Deferred revenue, current | 147,713 | 122,103 | 125,260 |
Deferred revenue, noncurrent | 753 | 1,300 | 9,393 |
Accumulated deficit | (494,750) | (459,980) | $ (487,602) |
ASC 606 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||
Assets | |||
Trade accounts receivable | 1,044 | (805) | |
Deferred commissions, current | (8,402) | 4,464 | |
Deferred commissions, noncurrent | (27,206) | 14,803 | |
Liabilities and shareholders' equity | |||
Accrued expenses | (4,843) | 2,090 | |
Deferred revenue, current | 5,349 | (3,157) | |
Deferred revenue, noncurrent | 8,353 | (8,093) | |
Accumulated deficit | $ (43,423) | $ 27,622 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | Sep. 30, 2019USD ($) |
Fair Value, Measurements, Non-Recurring | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value measurements on a non-recurring basis | $ 0 |
Discount Rate | Discounted Cash Flow and Monte Carlo Simulations | Portway International, Inc | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Discount rate utilized for valuation of earnout liability | 9.51% |
Discount Rate | Discounted Cash Flow and Monte Carlo Simulations | Compli, Inc. | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Discount rate utilized for valuation of earnout liability | 3.10% |
Discount Rate | Discounted Cash Flow and Monte Carlo Simulations | Indix Corporation | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Discount rate utilized for valuation of earnout liability | 3.10% |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring Basis - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Earnout Related to Acquisitions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value, Liabilities | $ 15,461 | $ 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Earnout Related to Acquisitions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value, Liabilities | 0 | |
Significant Other Observable Inputs (Level 2) | Earnout Related to Acquisitions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value, Liabilities | 0 | |
Significant Unobservable Inputs (Level 3) | Earnout Related to Acquisitions | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value, Liabilities | 15,461 | 0 |
Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value, Assets | 440,053 | 138,483 |
Money Market Funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair Value, Assets | $ 440,053 | $ 138,483 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Reconciliation of Beginning and Ending Balances of Recurring Fair Value Measurements (Details) - Recurring Basis - Significant Unobservable Inputs (Level 3) - Earnout Related to Acquisitions - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnout liability: | ||||
Balance beginning of period | $ 6,428 | $ 0 | $ 0 | $ 380 |
Fair value recorded at acquisition | 9,399 | 0 | 15,351 | 0 |
Payments of earnout liability | (500) | 0 | (500) | 0 |
Total unrealized (gains) losses included in other (income) expense, net | 134 | 0 | 610 | (380) |
Balance end of period | $ 15,461 | $ 0 | $ 15,461 | $ 0 |
Balance Sheet Detail - Property
Balance Sheet Detail - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 56,488 | $ 49,748 |
Accumulated depreciation | (21,951) | (16,375) |
Property and equipment—net | 34,537 | 33,373 |
Computer Equipment and Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 15,581 | 12,904 |
Computer Equipment and Software | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful Life | 3 years | |
Computer Equipment and Software | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful Life | 5 years | |
Internally Developed Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 5,205 | 3,620 |
Property and equipment, Useful Life | 6 years | |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 6,770 | 5,850 |
Property and equipment, Useful Life | 5 years | |
Office Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 858 | 586 |
Office Equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful Life | 3 years | |
Office Equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful Life | 5 years | |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 28,074 | $ 26,788 |
Leasehold Improvements | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful Life | 1 year | |
Leasehold Improvements | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful Life | 10 years |
Balance Sheet Detail - Addition
Balance Sheet Detail - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | ||||
Depreciation expense | $ 2.2 | $ 1.8 | $ 6.4 | $ 5 |
Balance Sheet Detail - Prepaid
Balance Sheet Detail - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid expenses | $ 11,194 | $ 9,578 |
Accrued investment income | 687 | 260 |
Deferred financing costs | 643 | |
Deposits | 298 | 325 |
Other | 1,677 | 501 |
Total | $ 13,856 | $ 11,307 |
Balance Sheet Detail - Accrued
Balance Sheet Detail - Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Accrued Liabilities Current [Abstract] | |||
Accrued payroll and related taxes | $ 4,184 | $ 3,800 | |
Accrued federal, state, and local taxes | 2,484 | 1,827 | |
Accrued bonus | 13,707 | 10,766 | |
Self-insurance reserves | 1,361 | 0 | |
Employee stock purchase plan contributions | 1,908 | 6,473 | |
Accrued sales commissions | 3,599 | 6,889 | |
Accrued partner commissions | 6,540 | 5,535 | |
Contract liabilities | 4,843 | 0 | |
Accrued purchase price related to acquisitions | 2,984 | 0 | |
Other | 8,254 | 6,811 | |
Total | $ 49,864 | $ 44,191 | $ 42,101 |
Acquisitions of Businesses - Ad
Acquisitions of Businesses - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 31, 2019 | Feb. 06, 2019 | Jan. 22, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 22, 2020 | Jan. 31, 2020 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||||||||||
Accrued value of earnout related to acquisition | $ 15,351 | $ 15,351 | $ 0 | $ 15,351 | $ 15,351 | $ 15,351 | $ 0 | ||||||
Goodwill | 100,926 | 100,926 | 100,926 | 100,926 | 100,926 | $ 61,300 | |||||||
Revenues | 98,525 | 69,919 | 274,794 | 195,175 | |||||||||
Loss before income taxes | $ (12,013) | $ (24,194) | (34,141) | $ (57,943) | |||||||||
Compli, Inc. | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Total consideration transferred | $ 17,100 | ||||||||||||
Consideration in cash | 11,800 | ||||||||||||
Accrued value of earnout related to acquisition | 3,800 | ||||||||||||
Goodwill | $ 12,807 | ||||||||||||
Revenues | 2,800 | ||||||||||||
Loss before income taxes | $ (400) | ||||||||||||
Compli, Inc. | Scenario Forecast | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Consideration in cash | $ 1,600 | ||||||||||||
Maximum Annual Payout Earned | $ 4,000 | ||||||||||||
Indix Corporation | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Total consideration transferred | $ 9,100 | ||||||||||||
Consideration in cash | 5,500 | ||||||||||||
Accrued value of earnout related to acquisition | 2,200 | ||||||||||||
Maximum Annual Payout Earned | 3,000 | ||||||||||||
Goodwill | 4,953 | ||||||||||||
Loss before income taxes | $ (3,300) | ||||||||||||
Additional cash to be paid, as consideration, after eighteen months | 1,400 | ||||||||||||
Acquisition-related costs | $ 200 | ||||||||||||
Indix Corporation | Within Three Months from Closing Date of Acquisition | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Maximum Annual Payout Earned | 500 | ||||||||||||
Indix Corporation | Within Seven Months from Closing Date of Acquisition | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Maximum Annual Payout Earned | 650 | ||||||||||||
Indix Corporation | Within 8 Months from Closing Date of Acquisition | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Maximum Annual Payout Earned | 650 | ||||||||||||
Indix Corporation | Within 12 Months from Closing Date of Acquisition | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Maximum Annual Payout Earned | $ 1,200 | ||||||||||||
Portway International, Inc | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Total consideration transferred | $ 24,300 | ||||||||||||
Consideration in cash | 13,000 | ||||||||||||
Accrued value of earnout related to acquisition | 9,400 | ||||||||||||
Maximum Annual Payout Earned | 10,000 | ||||||||||||
Goodwill | 22,376 | ||||||||||||
Revenues | 400 | ||||||||||||
Loss before income taxes | $ (100) | ||||||||||||
Additional cash to be paid, as consideration, after eighteen months | 2,000 | ||||||||||||
Acquisition date fair value of cash consideration | $ 1,900 | ||||||||||||
Share price of common shares that could be earned and transferred to seller | $ 83.97 | ||||||||||||
Portway International, Inc | Maximum | Common Stock | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Number of common shares that could be earned and transferred to seller | 119,090 |
Acquisitions of Businesses - Sc
Acquisitions of Businesses - Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jul. 31, 2019 | Feb. 06, 2019 | Jan. 22, 2019 | Dec. 31, 2018 |
Assets acquired: | |||||
Goodwill | $ 100,926 | $ 61,300 | |||
Compli, Inc. | |||||
Assets acquired: | |||||
Current assets | $ 505 | ||||
Developed technology, customer relationships, and other intangibles | 4,288 | ||||
Goodwill | 12,807 | ||||
Total assets acquired | 17,600 | ||||
Liabilities assumed: | |||||
Current liabilities | 482 | ||||
Total liabilities assumed | 482 | ||||
Net assets acquired | $ 17,118 | ||||
Indix Corporation | |||||
Assets acquired: | |||||
Current assets | $ 94 | ||||
Developed technology, customer relationships, and other intangibles | 4,472 | ||||
Goodwill | 4,953 | ||||
Total assets acquired | 9,519 | ||||
Liabilities assumed: | |||||
Current liabilities | 392 | ||||
Total liabilities assumed | 392 | ||||
Net assets acquired | $ 9,127 | ||||
Portway International, Inc | |||||
Assets acquired: | |||||
Property and equipment | $ 76 | ||||
Developed technology, customer relationships, and other intangibles | 1,865 | ||||
Goodwill | 22,376 | ||||
Total assets acquired | 24,317 | ||||
Liabilities assumed: | |||||
Net assets acquired | $ 24,317 |
Acquisitions of Businesses - Su
Acquisitions of Businesses - Summary Of The Valuation Methodologies Significant Assumptions, And Estimated Useful Lives Of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Feb. 06, 2019 | Jan. 22, 2019 |
Compli, Inc. | |||
Business Acquisition [Line Items] | |||
Intangible assets Assigned value | $ 4,288 | ||
Compli, Inc. | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets Assigned value | $ 3,250 | ||
Valuation Methodology | Multi-period excess earnings-income approach | ||
Discount Rate | 13.00% | ||
Intangible asset, useful life | 6 years | ||
Compli, Inc. | Tradename and Trademarks | |||
Business Acquisition [Line Items] | |||
Intangible assets Assigned value | $ 32 | ||
Valuation Methodology | Relief from royalty- income approach | ||
Discount Rate | 13.00% | ||
Intangible asset, useful life | 2 years | ||
Compli, Inc. | Developed Technology | |||
Business Acquisition [Line Items] | |||
Intangible assets Assigned value | $ 910 | ||
Valuation Methodology | Relief from royalty- income approach | ||
Discount Rate | 13.00% | ||
Intangible asset, useful life | 6 years | ||
Compli, Inc. | Noncompete Agreements | |||
Business Acquisition [Line Items] | |||
Intangible assets Assigned value | $ 96 | ||
Valuation Methodology | With-and-without valuation- income approach | ||
Discount Rate | 13.00% | ||
Intangible asset, useful life | 3 years | ||
Indix Corporation | |||
Business Acquisition [Line Items] | |||
Intangible assets Assigned value | $ 4,472 | ||
Indix Corporation | Developed Technology | |||
Business Acquisition [Line Items] | |||
Intangible assets Assigned value | $ 4,472 | ||
Valuation Methodology | Relief from royalty- income approach | ||
Discount Rate | 24.50% | ||
Intangible asset, useful life | 6 years | ||
Portway International, Inc | |||
Business Acquisition [Line Items] | |||
Intangible assets Assigned value | $ 1,865 | ||
Portway International, Inc | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets Assigned value | $ 1,759 | ||
Valuation Methodology | Multi-period excess earnings-income approach | ||
Discount Rate | 12.00% | ||
Intangible asset, useful life | 6 years | ||
Portway International, Inc | Noncompete Agreements | |||
Business Acquisition [Line Items] | |||
Intangible assets Assigned value | $ 106 | ||
Valuation Methodology | With-and-without valuation- income approach | ||
Discount Rate | 12.00% | ||
Intangible asset, useful life | 4 years |
Revenue - Consolidated Balance
Revenue - Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | |||||||||
Cash and cash equivalents | $ 446,563 | $ 142,322 | $ 138,093 | $ 14,075 | |||||
Trade accounts receivable—net of allowance for doubtful accounts | 49,124 | $ 39,482 | 40,287 | ||||||
Deferred commissions | 8,402 | 4,464 | 0 | ||||||
Prepaid expenses and other current assets | 13,856 | 11,307 | |||||||
Total current assets before customer fund assets | 517,945 | 193,916 | |||||||
Funds held from customers | 16,665 | 13,113 | |||||||
Receivable from customers—net of allowance for doubtful accounts | 690 | 270 | |||||||
Total current assets | 535,300 | 207,299 | |||||||
Noncurrent assets: | |||||||||
Property and equipment—net | 34,537 | 33,373 | |||||||
Goodwill | 100,926 | 61,300 | |||||||
Intangible assets—net | 24,543 | 19,371 | |||||||
Deferred commissions | 27,206 | 14,803 | 0 | ||||||
Other noncurrent assets | 2,420 | 1,589 | |||||||
Total assets | 724,932 | 322,932 | |||||||
Current liabilities: | |||||||||
Trade payables | 10,962 | 4,847 | |||||||
Accrued expenses | 49,864 | 44,191 | 42,101 | ||||||
Accrued earnout liabilities | 6,102 | 116 | |||||||
Deferred revenue | 147,713 | 122,103 | 125,260 | ||||||
Total current liabilities before customer fund obligations | 214,641 | 172,324 | |||||||
Customer fund obligations | 17,306 | 13,349 | |||||||
Total current liabilities | 231,947 | 185,673 | |||||||
Noncurrent liabilities: | |||||||||
Deferred revenue | 753 | 1,300 | 9,393 | ||||||
Deferred tax liability | 698 | 560 | |||||||
Deferred rent | 15,905 | 17,317 | |||||||
Accrued earnout liabilities | 9,399 | 0 | |||||||
Other noncurrent liabilities | 2,361 | 436 | |||||||
Total liabilities | 261,063 | 213,379 | |||||||
Commitments and contingencies | 0 | 0 | |||||||
Shareholders' equity: | |||||||||
Preferred stock | 0 | 0 | |||||||
Common stock | 8 | 7 | |||||||
Additional paid-in capital | 961,733 | 599,493 | |||||||
Accumulated other comprehensive loss | (3,122) | (2,345) | |||||||
Accumulated deficit | (494,750) | (459,980) | (487,602) | ||||||
Total shareholders’ equity | 463,869 | $ 452,128 | $ 168,973 | 109,553 | $ 122,249 | $ 142,154 | $ (407,163) | $ (393,592) | |
Total liabilities and shareholders' equity | 724,932 | 322,932 | |||||||
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | 0 | 0 | |||||||
Trade accounts receivable—net of allowance for doubtful accounts | 1,044 | (805) | |||||||
Deferred commissions | (8,402) | 4,464 | |||||||
Prepaid expenses and other current assets | 0 | ||||||||
Total current assets before customer fund assets | (7,358) | ||||||||
Funds held from customers | 0 | ||||||||
Receivable from customers—net of allowance for doubtful accounts | 0 | ||||||||
Total current assets | (7,358) | ||||||||
Noncurrent assets: | |||||||||
Property and equipment—net | 0 | ||||||||
Goodwill | 0 | ||||||||
Intangible assets—net | 0 | ||||||||
Deferred commissions | (27,206) | 14,803 | |||||||
Other noncurrent assets | 0 | ||||||||
Total assets | (34,564) | ||||||||
Current liabilities: | |||||||||
Trade payables | 0 | ||||||||
Accrued expenses | (4,843) | 2,090 | |||||||
Accrued earnout liabilities | 0 | ||||||||
Deferred revenue | 5,349 | (3,157) | |||||||
Total current liabilities before customer fund obligations | 506 | ||||||||
Customer fund obligations | 0 | ||||||||
Total current liabilities | 506 | ||||||||
Noncurrent liabilities: | |||||||||
Deferred revenue | 8,353 | (8,093) | |||||||
Deferred tax liability | 0 | ||||||||
Deferred rent | 0 | ||||||||
Accrued earnout liabilities | 0 | ||||||||
Other noncurrent liabilities | 0 | ||||||||
Total liabilities | 8,859 | ||||||||
Commitments and contingencies | 0 | ||||||||
Shareholders' equity: | |||||||||
Preferred stock | 0 | ||||||||
Common stock | 0 | ||||||||
Additional paid-in capital | 0 | ||||||||
Accumulated other comprehensive loss | 0 | ||||||||
Accumulated deficit | (43,423) | $ 27,622 | |||||||
Total shareholders’ equity | (43,423) | ||||||||
Total liabilities and shareholders' equity | (34,564) | ||||||||
ASU 2014-09 | Without Adoption (ASC 605) | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | 446,563 | $ 142,322 | |||||||
Trade accounts receivable—net of allowance for doubtful accounts | 50,168 | ||||||||
Deferred commissions | 0 | ||||||||
Prepaid expenses and other current assets | 13,856 | ||||||||
Total current assets before customer fund assets | 510,587 | ||||||||
Funds held from customers | 16,665 | ||||||||
Receivable from customers—net of allowance for doubtful accounts | 690 | ||||||||
Total current assets | 527,942 | ||||||||
Noncurrent assets: | |||||||||
Property and equipment—net | 34,537 | ||||||||
Goodwill | 100,926 | ||||||||
Intangible assets—net | 24,543 | ||||||||
Deferred commissions | 0 | ||||||||
Other noncurrent assets | 2,420 | ||||||||
Total assets | 690,368 | ||||||||
Current liabilities: | |||||||||
Trade payables | 10,962 | ||||||||
Accrued expenses | 45,021 | ||||||||
Accrued earnout liabilities | 6,102 | ||||||||
Deferred revenue | 153,062 | ||||||||
Total current liabilities before customer fund obligations | 215,147 | ||||||||
Customer fund obligations | 17,306 | ||||||||
Total current liabilities | 232,453 | ||||||||
Noncurrent liabilities: | |||||||||
Deferred revenue | 9,106 | ||||||||
Deferred tax liability | 698 | ||||||||
Deferred rent | 15,905 | ||||||||
Accrued earnout liabilities | 9,399 | ||||||||
Other noncurrent liabilities | 2,361 | ||||||||
Total liabilities | 269,922 | ||||||||
Commitments and contingencies | 0 | ||||||||
Shareholders' equity: | |||||||||
Preferred stock | 0 | ||||||||
Common stock | 8 | ||||||||
Additional paid-in capital | 961,733 | ||||||||
Accumulated other comprehensive loss | (3,122) | ||||||||
Accumulated deficit | (538,173) | ||||||||
Total shareholders’ equity | 420,446 | ||||||||
Total liabilities and shareholders' equity | $ 690,368 |
Revenue - Consolidated Statemen
Revenue - Consolidated Statements of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands | Oct. 31, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Revenue: | |||||||||
Revenues | $ 98,525,000 | $ 69,919,000 | $ 274,794,000 | $ 195,175,000 | |||||
Cost of revenue: | |||||||||
Cost of revenues | 29,778,000 | 20,236,000 | 82,420,000 | 56,377,000 | |||||
Gross profit | 68,747,000 | 49,683,000 | 192,374,000 | 138,798,000 | |||||
Operating expenses: | |||||||||
Research and development | 21,871,000 | 13,285,000 | 56,823,000 | 38,332,000 | |||||
Sales and marketing | 40,313,000 | 41,276,000 | 119,199,000 | 119,187,000 | |||||
General and administrative | 20,511,000 | 10,235,000 | 53,764,000 | 28,787,000 | |||||
Goodwill impairment | $ 0 | 0 | 9,174,000 | 0 | 9,174,000 | ||||
Total operating expenses | 82,695,000 | 73,970,000 | 229,786,000 | 195,480,000 | |||||
Operating loss | (13,948,000) | (24,287,000) | (37,412,000) | (56,682,000) | |||||
Other (income) expense: | |||||||||
Interest income | (2,202,000) | (676,000) | (4,251,000) | (811,000) | |||||
Interest expense | 2,000 | 534,000 | 286,000 | 2,495,000 | |||||
Other (income) expense, net | 265,000 | 49,000 | 694,000 | (423,000) | |||||
Total other (income) expense, net | (1,935,000) | (93,000) | (3,271,000) | 1,261,000 | |||||
Loss before income taxes | (12,013,000) | (24,194,000) | (34,141,000) | (57,943,000) | |||||
Provision for (benefit from) income taxes | 341,000 | (91,000) | 629,000 | (825,000) | |||||
Net loss | $ (12,354,000) | $ (13,173,000) | $ (9,243,000) | $ (24,103,000) | $ (17,766,000) | $ (15,249,000) | $ (34,770,000) | $ (57,118,000) | |
Net loss per share attributable to common shareholders, basic and diluted | $ (0.16) | $ (0.36) | $ (0.48) | $ (1.95) | |||||
Weighted average shares of common stock outstanding, basic and diluted | 76,156 | 66,590 | 72,064 | 29,269 | |||||
Subscription and Returns | |||||||||
Revenue: | |||||||||
Revenues | $ 91,986,000 | $ 64,611,000 | $ 255,225,000 | $ 182,326,000 | |||||
Cost of revenue: | |||||||||
Cost of revenues | 25,621,000 | 17,330,000 | 69,537,000 | 47,984,000 | |||||
Professional Services | |||||||||
Revenue: | |||||||||
Revenues | 6,539,000 | 5,308,000 | 19,569,000 | 12,849,000 | |||||
Cost of revenue: | |||||||||
Cost of revenues | 4,157,000 | $ 2,906,000 | 12,883,000 | $ 8,393,000 | |||||
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||
Revenue: | |||||||||
Revenues | 22,000 | 540,000 | |||||||
Cost of revenue: | |||||||||
Cost of revenues | 0 | 0 | |||||||
Gross profit | 22,000 | 540,000 | |||||||
Operating expenses: | |||||||||
Research and development | 0 | 0 | |||||||
Sales and marketing | 4,789,000 | 16,340,000 | |||||||
General and administrative | 0 | 0 | |||||||
Goodwill impairment | 0 | 0 | |||||||
Total operating expenses | 4,789,000 | 16,340,000 | |||||||
Operating loss | (4,767,000) | (15,800,000) | |||||||
Other (income) expense: | |||||||||
Interest income | 0 | 0 | |||||||
Interest expense | 0 | 0 | |||||||
Other (income) expense, net | 0 | 0 | |||||||
Total other (income) expense, net | 0 | 0 | |||||||
Loss before income taxes | (4,767,000) | (15,800,000) | |||||||
Provision for (benefit from) income taxes | 0 | 0 | |||||||
Net loss | $ (4,767,000) | $ (15,800,000) | |||||||
Net loss per share attributable to common shareholders, basic and diluted | $ (0.06) | $ (0.22) | |||||||
Weighted average shares of common stock outstanding, basic and diluted | 0 | 0 | |||||||
ASU 2014-09 | Without Adoption (ASC 605) | |||||||||
Revenue: | |||||||||
Revenues | $ 98,547,000 | $ 275,334,000 | |||||||
Cost of revenue: | |||||||||
Cost of revenues | 29,778,000 | 82,420,000 | |||||||
Gross profit | 68,769,000 | 192,914,000 | |||||||
Operating expenses: | |||||||||
Research and development | 21,871,000 | 56,823,000 | |||||||
Sales and marketing | 45,102,000 | 135,539,000 | |||||||
General and administrative | 20,511,000 | 53,764,000 | |||||||
Goodwill impairment | 0 | 0 | |||||||
Total operating expenses | 87,484,000 | 246,126,000 | |||||||
Operating loss | (18,715,000) | (53,212,000) | |||||||
Other (income) expense: | |||||||||
Interest income | (2,202,000) | (4,251,000) | |||||||
Interest expense | 2,000 | 286,000 | |||||||
Other (income) expense, net | 265,000 | 694,000 | |||||||
Total other (income) expense, net | (1,935,000) | (3,271,000) | |||||||
Loss before income taxes | (16,780,000) | (49,941,000) | |||||||
Provision for (benefit from) income taxes | 341,000 | 629,000 | |||||||
Net loss | $ (17,121,000) | $ (50,570,000) | |||||||
Net loss per share attributable to common shareholders, basic and diluted | $ (0.22) | $ (0.70) | |||||||
Weighted average shares of common stock outstanding, basic and diluted | 76,156 | 72,064 | |||||||
ASU 2014-09 | Subscription and Returns | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||
Revenue: | |||||||||
Revenues | $ 71,000 | $ 689,000 | |||||||
Cost of revenue: | |||||||||
Cost of revenues | 0 | 0 | |||||||
ASU 2014-09 | Subscription and Returns | Without Adoption (ASC 605) | |||||||||
Revenue: | |||||||||
Revenues | 92,057,000 | 255,914,000 | |||||||
Cost of revenue: | |||||||||
Cost of revenues | 25,621,000 | 69,537,000 | |||||||
ASU 2014-09 | Professional Services | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||
Revenue: | |||||||||
Revenues | (49,000) | (149,000) | |||||||
Cost of revenue: | |||||||||
Cost of revenues | 0 | 0 | |||||||
ASU 2014-09 | Professional Services | Without Adoption (ASC 605) | |||||||||
Revenue: | |||||||||
Revenues | 6,490,000 | 19,420,000 | |||||||
Cost of revenue: | |||||||||
Cost of revenues | $ 4,157,000 | $ 12,883,000 |
Revenue - Consolidated Statem_2
Revenue - Consolidated Statements of Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||
Net loss | $ (12,354) | $ (13,173) | $ (9,243) | $ (24,103) | $ (17,766) | $ (15,249) | $ (34,770) | $ (57,118) |
Other comprehensive income (loss)—Foreign currency translation | (591) | $ 276 | $ (462) | (242) | $ (3,048) | $ 603 | (777) | (2,687) |
Total comprehensive loss | (12,945) | $ (24,345) | (35,547) | $ (59,805) | ||||
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||
Net loss | (4,767) | (15,800) | ||||||
Other comprehensive income (loss)—Foreign currency translation | 0 | 0 | ||||||
Total comprehensive loss | (4,767) | (15,800) | ||||||
ASU 2014-09 | Without Adoption (ASC 605) | ||||||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||
Net loss | (17,121) | (50,570) | ||||||
Other comprehensive income (loss)—Foreign currency translation | (591) | (777) | ||||||
Total comprehensive loss | $ (17,712) | $ (51,347) |
Revenue - Consolidated Statem_3
Revenue - Consolidated Statements of Cash Flows (Details) - USD ($) | Oct. 31, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Cash flows from operating activities: | |||||||||
Net loss | $ (12,354,000) | $ (13,173,000) | $ (9,243,000) | $ (24,103,000) | $ (17,766,000) | $ (15,249,000) | $ (34,770,000) | $ (57,118,000) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||||
Depreciation and amortization | 11,684,000 | 9,390,000 | |||||||
Goodwill impairment | $ 0 | 0 | 9,174,000 | 0 | 9,174,000 | ||||
Stock-based compensation | 25,906,000 | 11,411,000 | |||||||
Deferred tax expense (benefit) | 138,000 | (1,110,000) | |||||||
Amortization of deferred rent | (778,000) | 231,000 | |||||||
Non-cash change in earnout liability | 610,000 | (430,000) | |||||||
Non-cash bad debt expense (recovery) | 602,000 | (382,000) | |||||||
Other | 227,000 | 526,000 | |||||||
Changes in operating assets and liabilities: | |||||||||
Trade accounts receivable | (9,648,000) | (7,852,000) | |||||||
Prepaid expenses and other current assets | (3,274,000) | (2,688,000) | |||||||
Deferred commissions | (16,340,000) | 0 | |||||||
Other noncurrent assets | (831,000) | (549,000) | |||||||
Trade payables | 4,818,000 | (3,353,000) | |||||||
Accrued expenses | 2,305,000 | 6,095,000 | |||||||
Deferred rent (lease incentives) | 0 | 579,000 | |||||||
Deferred revenue | 24,782,000 | 25,978,000 | |||||||
Net cash provided by (used in) operating activities | 5,431,000 | (10,098,000) | |||||||
Cash flows from investing activities: | |||||||||
Net (increase) decrease in customer fund assets | (3,986,000) | 2,053,000 | |||||||
Cash paid for acquired intangible assets | (139,000) | (5,002,000) | |||||||
Cash paid for acquisitions of businesses | (30,310,000) | 0 | |||||||
Purchase of property and equipment | (7,196,000) | (12,914,000) | |||||||
Net cash used in investing activities | (41,631,000) | (15,863,000) | |||||||
Cash flows from financing activities: | |||||||||
Proceeds from common stock offering, net of underwriting discounts | 274,705,000 | 192,510,000 | |||||||
Payments of deferred financing costs | (555,000) | (2,084,000) | |||||||
Payments on credit facility | 0 | (63,000,000) | |||||||
Proceeds from credit facility | 0 | 23,000,000 | |||||||
Repayment of note payable | 0 | (234,000) | |||||||
Net increase (decrease) in customer fund obligations | 3,986,000 | (2,053,000) | |||||||
Proceeds from exercise of stock options and common stock warrants | 51,583,000 | 5,787,000 | |||||||
Proceeds from purchases of stock under employee stock purchase plan | 12,293,000 | 0 | |||||||
Taxes paid related to net share settlement of stock-based awards | (1,183,000) | (2,326,000) | |||||||
Repurchase of shares | 0 | (1,806,000) | |||||||
Payment related to business combination earnouts | (375,000) | 0 | |||||||
Net cash provided by financing activities | 340,454,000 | 149,794,000 | |||||||
Foreign currency effect on cash and cash equivalents | (13,000) | 185,000 | |||||||
Net change in cash and cash equivalents | 304,241,000 | 124,018,000 | |||||||
Cash and cash equivalents—Beginning of period | 142,322,000 | $ 14,075,000 | 142,322,000 | 14,075,000 | |||||
Cash and cash equivalents—End of period | 446,563,000 | $ 138,093,000 | 446,563,000 | $ 138,093,000 | |||||
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||
Cash flows from operating activities: | |||||||||
Net loss | (4,767,000) | (15,800,000) | |||||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||||
Depreciation and amortization | 0 | ||||||||
Goodwill impairment | 0 | 0 | |||||||
Stock-based compensation | 0 | ||||||||
Deferred tax expense (benefit) | 0 | ||||||||
Amortization of deferred rent | 0 | ||||||||
Non-cash change in earnout liability | 0 | ||||||||
Non-cash bad debt expense (recovery) | 0 | ||||||||
Other | 0 | ||||||||
Changes in operating assets and liabilities: | |||||||||
Trade accounts receivable | (238,000) | ||||||||
Prepaid expenses and other current assets | 0 | ||||||||
Deferred commissions | 16,340,000 | ||||||||
Other noncurrent assets | 0 | ||||||||
Trade payables | 0 | ||||||||
Accrued expenses | (2,753,000) | ||||||||
Deferred rent (lease incentives) | 0 | ||||||||
Deferred revenue | 2,451,000 | ||||||||
Net cash provided by (used in) operating activities | 0 | ||||||||
Cash flows from investing activities: | |||||||||
Net (increase) decrease in customer fund assets | 0 | ||||||||
Cash paid for acquired intangible assets | 0 | ||||||||
Cash paid for acquisitions of businesses | 0 | ||||||||
Purchase of property and equipment | 0 | ||||||||
Net cash used in investing activities | 0 | ||||||||
Cash flows from financing activities: | |||||||||
Proceeds from common stock offering, net of underwriting discounts | 0 | ||||||||
Payments of deferred financing costs | 0 | ||||||||
Payments on credit facility | 0 | ||||||||
Proceeds from credit facility | 0 | ||||||||
Repayment of note payable | 0 | ||||||||
Net increase (decrease) in customer fund obligations | 0 | ||||||||
Proceeds from exercise of stock options and common stock warrants | 0 | ||||||||
Proceeds from purchases of stock under employee stock purchase plan | 0 | ||||||||
Taxes paid related to net share settlement of stock-based awards | 0 | ||||||||
Repurchase of shares | 0 | ||||||||
Payment related to business combination earnouts | 0 | ||||||||
Net cash provided by financing activities | 0 | ||||||||
Foreign currency effect on cash and cash equivalents | 0 | ||||||||
Net change in cash and cash equivalents | 0 | ||||||||
Cash and cash equivalents—Beginning of period | 0 | 0 | |||||||
Cash and cash equivalents—End of period | 0 | 0 | |||||||
ASU 2014-09 | Without Adoption (ASC 605) | |||||||||
Cash flows from operating activities: | |||||||||
Net loss | (17,121,000) | (50,570,000) | |||||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||||
Depreciation and amortization | 11,684,000 | ||||||||
Goodwill impairment | 0 | 0 | |||||||
Stock-based compensation | 25,906,000 | ||||||||
Deferred tax expense (benefit) | 138,000 | ||||||||
Amortization of deferred rent | (778,000) | ||||||||
Non-cash change in earnout liability | 610,000 | ||||||||
Non-cash bad debt expense (recovery) | 602,000 | ||||||||
Other | 227,000 | ||||||||
Changes in operating assets and liabilities: | |||||||||
Trade accounts receivable | (9,886,000) | ||||||||
Prepaid expenses and other current assets | (3,274,000) | ||||||||
Deferred commissions | 0 | ||||||||
Other noncurrent assets | (831,000) | ||||||||
Trade payables | 4,818,000 | ||||||||
Accrued expenses | (448,000) | ||||||||
Deferred rent (lease incentives) | 0 | ||||||||
Deferred revenue | 27,233,000 | ||||||||
Net cash provided by (used in) operating activities | 5,431,000 | ||||||||
Cash flows from investing activities: | |||||||||
Net (increase) decrease in customer fund assets | (3,986,000) | ||||||||
Cash paid for acquired intangible assets | (139,000) | ||||||||
Cash paid for acquisitions of businesses | (30,310,000) | ||||||||
Purchase of property and equipment | (7,196,000) | ||||||||
Net cash used in investing activities | (41,631,000) | ||||||||
Cash flows from financing activities: | |||||||||
Proceeds from common stock offering, net of underwriting discounts | 274,705,000 | ||||||||
Payments of deferred financing costs | (555,000) | ||||||||
Payments on credit facility | 0 | ||||||||
Proceeds from credit facility | 0 | ||||||||
Repayment of note payable | 0 | ||||||||
Net increase (decrease) in customer fund obligations | 3,986,000 | ||||||||
Proceeds from exercise of stock options and common stock warrants | 51,583,000 | ||||||||
Proceeds from purchases of stock under employee stock purchase plan | 12,293,000 | ||||||||
Taxes paid related to net share settlement of stock-based awards | (1,183,000) | ||||||||
Repurchase of shares | 0 | ||||||||
Payment related to business combination earnouts | (375,000) | ||||||||
Net cash provided by financing activities | 340,454,000 | ||||||||
Foreign currency effect on cash and cash equivalents | (13,000) | ||||||||
Net change in cash and cash equivalents | 304,241,000 | ||||||||
Cash and cash equivalents—Beginning of period | $ 142,322,000 | 142,322,000 | |||||||
Cash and cash equivalents—End of period | $ 446,563,000 | $ 446,563,000 |
Revenue - Summary of Total Reve
Revenue - Summary of Total Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Revenues | $ 98,525 | $ 69,919 | $ 274,794 | $ 195,175 |
U.S. | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 93,104 | 65,531 | 257,353 | 183,382 |
Non-U.S. | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 5,421 | 4,388 | 17,441 | 11,793 |
Subscription and Returns, Tax Determination | U.S. | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 52,722 | 37,931 | 146,660 | 105,330 |
Subscription and Returns, Tax Returns and Compliance Management | U.S. | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 33,456 | 22,613 | 90,829 | 66,747 |
Subscription and Returns,Interest Income on Funds Held for Customers | U.S. | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 907 | 392 | 2,448 | 562 |
Subscription and Returns | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 91,986 | 64,611 | 255,225 | 182,326 |
Subscription and Returns | U.S. | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 87,085 | 60,936 | 239,937 | 172,639 |
Professional Services | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 6,539 | 5,308 | 19,569 | 12,849 |
Professional Services | U.S. | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | $ 6,019 | $ 4,595 | $ 17,416 | $ 10,743 |
Revenue - Summary of Activity I
Revenue - Summary of Activity Impacting Contract Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Jan. 01, 2019 | |
Contract Liabilities [Rollforward] | ||
Balance at December 31, 2018 | $ 0 | |
Contract liabilities transferred to deferred revenue | (3,897) | |
Addition to contract liabilities | 6,650 | |
Balance at September 30, 2019 | $ 4,843 | |
ASU 2014-09 | ||
Contract Liabilities [Rollforward] | ||
Adoption of ASC 606 | $ 2,090 |
Revenue - Summary of Activity_2
Revenue - Summary of Activity Impacting Deferred Revenue (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Jan. 01, 2019 | |
ASU 2014-09 | ||
Deferred Revenue Rollforward | ||
Adoption of ASC 606 | $ 2,090 | |
Deferred Revenue | ||
Deferred Revenue Rollforward | ||
Balance at December 31, 2018 | $ 134,653 | |
Revenue recognized | (274,794) | |
Additional amounts deferred | 299,857 | |
Balance at September 30, 2019 | $ 148,466 | |
Deferred Revenue | ASU 2014-09 | ||
Deferred Revenue Rollforward | ||
Adoption of ASC 606 | $ (11,250) |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Deferred commissions amortization expected period | 6 years | ||
Deferred contract costs, expected to be amortized within next 12 Months | $ 8,402,000 | $ 4,464,000 | $ 0 |
Impairments of deferred contract costs | 0 | ||
Assets recognized related to costs to fulfill contracts | 0 | ||
Additional contractual obligations | 33,400,000 | ||
Prepaid Expenses and Other Current Assets | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Deferred contract costs, expected to be amortized within next 12 Months | $ 8,400,000 |
Revenue - Summary of Activity_3
Revenue - Summary of Activity Impacting Deferred Commissions (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Jan. 01, 2019 | |
ASU 2014-09 | ||
Capitalized Contract Cost [Line Items] | ||
Adoption of ASC 606 | $ 2,090 | |
Deferred Commissions | ||
Capitalized Contract Cost [Line Items] | ||
Balance at December 31, 2018 | $ 0 | |
Additional commissions deferred | 21,480 | |
Amortization of deferred commissions | (5,139) | |
Balance at September 30, 2019 | $ 35,608 | |
Deferred Commissions | ASU 2014-09 | ||
Capitalized Contract Cost [Line Items] | ||
Adoption of ASC 606 | $ 19,267 |
Revenue - Additional Informat_2
Revenue - Additional Information (Details 1) $ in Millions | Sep. 30, 2019USD ($) |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |
Additional contractual obligations | $ 33.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-10-01 | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |
Additional contractual obligations | $ 33.1 |
Revenue expected to be recognized with remaining amount | 12 months |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 57,811 | $ 47,341 |
Accumulated Amortization | (33,268) | (27,970) |
Net | 24,543 | 19,371 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 20,360 | 15,412 |
Accumulated Amortization | (10,802) | (9,202) |
Net | $ 9,558 | $ 6,210 |
Customer Relationships | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Average Useful Life (Years) | 3 years | 3 years |
Customer Relationships | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Average Useful Life (Years) | 10 years | 10 years |
Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 36,222 | $ 30,935 |
Accumulated Amortization | (21,440) | (17,806) |
Net | $ 14,782 | $ 13,129 |
Developed Technology | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Average Useful Life (Years) | 3 years | 3 years |
Developed Technology | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Average Useful Life (Years) | 8 years | 8 years |
Noncompete Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 777 | $ 574 |
Accumulated Amortization | (595) | (542) |
Net | $ 182 | $ 32 |
Noncompete Agreements | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Average Useful Life (Years) | 3 years | 3 years |
Noncompete Agreements | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Average Useful Life (Years) | 5 years | 5 years |
Tradename and Trademarks | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 452 | $ 420 |
Accumulated Amortization | (431) | (420) |
Net | $ 21 | $ 0 |
Tradename and Trademarks | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Average Useful Life (Years) | 1 year | 1 year |
Tradename and Trademarks | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Average Useful Life (Years) | 4 years | 4 years |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) shares in Thousands | Nov. 29, 2019shares | May 29, 2019shares | Nov. 29, 2018shares | Oct. 31, 2018USD ($) | May 31, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Unit | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)shares |
Finite Lived Intangible Assets [Line Items] | ||||||||||
Finite-lived intangible assets, amortization expense | $ 1,800,000 | $ 1,600,000 | $ 5,300,000 | $ 4,400,000 | ||||||
Cash payment to sellers | $ 139,000 | 5,002,000 | ||||||||
Number of goodwill impairment reporting units | Unit | 3 | |||||||||
Goodwill impairment charge | $ 0 | 0 | $ 9,174,000 | $ 0 | $ 9,174,000 | |||||
Goodwill | 100,926,000 | 100,926,000 | $ 61,300,000 | |||||||
Brazilian Reporting Unit | ||||||||||
Finite Lived Intangible Assets [Line Items] | ||||||||||
Goodwill | 0 | 0 | ||||||||
Tradestream Technologies Inc. and Wise 24 Inc | ||||||||||
Finite Lived Intangible Assets [Line Items] | ||||||||||
Future revenue recognized period | 6 years | |||||||||
Cash payment to sellers | 100,000 | |||||||||
Common stock Issue | shares | 37,708 | 37,708 | 2,310 | |||||||
Accrued earnout for cash and common stock payable | $ 100,000 | $ 100,000 | ||||||||
Tradestream Technologies Inc. and Wise 24 Inc | Scenario Forecast | ||||||||||
Finite Lived Intangible Assets [Line Items] | ||||||||||
Common stock Issue | shares | 37,706 | |||||||||
Tradestream Technologies Inc. and Wise 24 Inc | Maximum | ||||||||||
Finite Lived Intangible Assets [Line Items] | ||||||||||
Total consideration | $ 30,000,000 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill [Line Items] | |
Balance—December 31, 2018 | $ 61,300 |
Cumulative translation adjustments | (510) |
Balance—September 30, 2019 | 100,926 |
Compli, Inc. | |
Goodwill [Line Items] | |
Goodwill acquired during period | 12,807 |
Indix Corporation | |
Goodwill [Line Items] | |
Goodwill acquired during period | 4,953 |
Portway International, Inc | |
Goodwill [Line Items] | |
Goodwill acquired during period | $ 22,376 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Loss Contingencies [Line Items] | ||||
Rent expense | $ 3,300,000 | $ 2,500,000 | $ 9,400,000 | $ 7,400,000 |
Sublease income | 400,000 | $ 0 | $ 1,100,000 | $ 0 |
Loss contingency, inestimable loss | The Company has not recorded an accrual related to these arrangements as of September 30, 2019 because it has not determined that a loss is probable. | |||
Maximum | ||||
Loss Contingencies [Line Items] | ||||
Estimated range of loss | $ 2,000,000 | $ 2,000,000 |
Debt - Additional Information (
Debt - Additional Information (Details) - Revolving Credit Facility - Loan and Security Agreement - Silicon Valley Bank and Ally Bank - USD ($) | Jun. 24, 2019 | Sep. 30, 2019 |
Line Of Credit Facility [Line Items] | ||
Credit facilities amount | $ 50,000,000 | |
Credit facilities, repayment date | Jun. 25, 2019 | |
Quarterly fee on undrawn portion available under credit facilities | 0.50% | |
Maximum | ||
Line Of Credit Facility [Line Items] | ||
Credit facilities, interest rate | 4.25% | |
Prime Rate | Maximum | ||
Line Of Credit Facility [Line Items] | ||
Credit facilities, variable rate | 1.75% |
Convertible Preferred Stock a_3
Convertible Preferred Stock and Shareholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands | Jun. 14, 2018USD ($)shares | Jun. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($)$ / shares | Jun. 30, 2018USD ($)shares | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($)Class$ / sharesshares | Sep. 30, 2018USD ($)$ / sharesshares | Dec. 31, 2018$ / sharesshares |
Class Of Stock [Line Items] | ||||||||||
Number of classes of stock | Class | 2 | |||||||||
Capital stock, authorized shares | 620,000,000 | 620,000,000 | ||||||||
Common stock, shares authorized | 600,000,000 | 600,000,000 | 600,000,000 | |||||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | |||||||
Preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Proceeds from common stock offering, net of underwriting discounts | $ | $ 274,705 | $ 192,510 | ||||||||
Common stock, shares, outstanding | 76,889,000 | 76,889,000 | 66,769,000 | |||||||
Fair value of shares repurchased | $ | $ 986 | $ 752 | ||||||||
Stock-based compensation cost | $ | $ 9,933 | $ 4,344 | $ 25,943 | 11,432 | ||||||
Employees and Non-Employee Investors | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Fair value of shares repurchased | $ | $ 1,700 | |||||||||
Public Offering | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Offering expenses paid | $ | $ 1,198 | |||||||||
Common Stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Public offering | 4,133,984 | 8,625,000 | ||||||||
Common stock, shares, outstanding | 76,888,616 | 76,888,616 | ||||||||
Number of warrants net exercised to common stock | 144,945 | 144,945 | ||||||||
Common Stock | Public Offering | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Public offering | 4,133,984 | |||||||||
Common stock price per share | $ / shares | $ 69.40 | $ 69.40 | ||||||||
Proceeds from common stock offering, net of underwriting discounts | $ | $ 274,700 | |||||||||
Offering expenses paid | $ | $ 1,200 | |||||||||
Common Stock | Underwriters | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Public offering | 539,215 | |||||||||
Common Stock Warrants | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Number of warrants exercised | 363,000 | |||||||||
Proceeds from exercise of warrants | $ | $ 3,700 | |||||||||
Number of warrants outstanding | 0 | 0 | ||||||||
Common Stock Warrants | Board of Directors | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Number of common stock warrants issued | 0 | 80,000 | ||||||||
Common stock warrants, weighted average exercise price, per share | $ / shares | $ 16.60 | $ 16.60 | ||||||||
Common Stock Warrants | Board of Directors | General and Administrative | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Stock-based compensation cost | $ | $ 500 |
Convertible Preferred Stock a_4
Convertible Preferred Stock and Shareholders' Equity - Summary of Changes of Convertible Preferred Stock and Shareholders' Equity (Deficit) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Class Of Stock [Line Items] | ||||||||||
Beginning balance | $ 452,128 | $ 168,973 | $ 109,553 | $ 142,154 | $ (407,163) | $ (393,592) | $ 109,553 | $ (393,592) | $ (393,592) | |
Impact of adoption of new accounting pronouncements (see Note 2) | 27,622 | |||||||||
Exercise of stock options | 11,166 | 13,106 | 27,311 | 439 | 2,752 | 6,025 | ||||
Exercise of stock options, Shares | 5,418,158 | |||||||||
Proceeds from common stock offering, net of underwriting discounts | 274,705 | 192,510 | ||||||||
Conversion of preferred stock to common stock | 370,854 | |||||||||
Shares tendered for cashless redemption of stock options | (1,090) | (93) | (343) | (3,483) | (7,715) | |||||
Exercise of warrants | 5,783 | |||||||||
Stock-based compensation cost | 9,933 | 9,439 | 6,571 | 4,344 | 3,571 | 3,517 | ||||
Shares issued under employee stock purchase plan | 4,629 | 7,664 | ||||||||
Shares issued to purchase intangible assets | 48 | 50 | 2,555 | $ 98 | 2,555 | |||||
Repurchase of shares | (986) | (752) | ||||||||
Gain (Loss) on translation adjustment | (591) | 276 | (462) | (242) | (3,048) | 603 | (777) | (2,687) | ||
Net loss | (12,354) | (13,173) | (9,243) | (24,103) | (17,766) | (15,249) | (34,770) | (57,118) | ||
Ending balance | $ 452,128 | 463,869 | 452,128 | 168,973 | 122,249 | 142,154 | $ (407,163) | 463,869 | $ 122,249 | $ 109,553 |
Initial Public Offering | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Public offering costs | $ (3,425) | |||||||||
Public offering | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Public offering costs | (1,198) | |||||||||
Convertible Preferred Stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Beginning balance, Shares | 101,776,205 | 101,786,205 | 101,786,205 | 101,786,205 | ||||||
Beginning balance | $ 370,854 | $ 370,921 | $ 370,921 | $ 370,921 | ||||||
Conversion of preferred stock to common stock | $ (370,854) | |||||||||
Conversion of preferred stock to common stock, Shares | (101,776,205) | |||||||||
Repurchase of shares, Shares | (10,000) | |||||||||
Repurchase of shares | $ (67) | |||||||||
Ending balance, Shares | 101,776,205 | |||||||||
Ending balance | $ 370,854 | |||||||||
Common Stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Beginning balance | $ 8 | $ 7 | $ 7 | $ 7 | $ 1 | $ 1 | $ 7 | $ 1 | $ 1 | |
Beginning balance, Shares | 75,444,551 | 69,903,447 | 66,768,563 | 66,457,650 | 6,264,422 | 5,992,293 | 66,768,563 | 5,992,293 | 5,992,293 | |
Exercise of stock options, Shares | 1,286,357 | 1,368,510 | 2,763,291 | 40,003 | 305,722 | 785,991 | ||||
Proceeds from common stock offering, net of underwriting discounts | $ 1 | $ 1 | ||||||||
Proceeds from common stock offering,net of underwriting discounts,shares | 4,133,984 | 8,625,000 | ||||||||
Conversion of preferred stock to common stock | $ 5 | |||||||||
Conversion of preferred stock to common stock, Shares | 50,888,014 | |||||||||
Shares tendered for cashless redemption of stock-based awards, Shares | (13,712) | (2,805) | (7,497) | (138,813) | (465,710) | |||||
Vested RSUs | 36,611 | 902 | ||||||||
Exercise of warrants, Shares | 570,000 | |||||||||
Shares issued under employee stock purchase plan, Shares | 134,133 | 372,764 | ||||||||
Shares issued to purchase intangible assets, Shares | 676 | 37,708 | 1,634 | |||||||
Repurchase of shares, Shares | (56,695) | (48,152) | ||||||||
Ending balance | $ 8 | $ 8 | $ 8 | $ 7 | $ 7 | $ 7 | $ 1 | $ 8 | $ 7 | $ 7 |
Ending balance, Shares | 75,444,551 | 76,888,616 | 75,444,551 | 69,903,447 | 66,490,156 | 66,457,650 | 6,264,422 | 76,888,616 | 66,490,156 | 66,768,563 |
Common Stock | Public offering | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Proceeds from common stock offering,net of underwriting discounts,shares | 4,133,984 | |||||||||
Public offering costs | $ (1,200) | |||||||||
Additional Paid-In Capital | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Beginning balance | $ 937,047 | $ 640,996 | $ 599,493 | $ 589,321 | $ 19,196 | $ 18,121 | $ 599,493 | $ 18,121 | $ 18,121 | |
Exercise of stock options | 11,166 | 13,106 | 27,311 | 439 | 2,752 | 6,025 | ||||
Proceeds from common stock offering, net of underwriting discounts | 274,704 | 192,509 | ||||||||
Conversion of preferred stock to common stock | 370,849 | |||||||||
Shares tendered for cashless redemption of stock options | (1,090) | (93) | (343) | (3,483) | (7,715) | |||||
Exercise of warrants | 5,783 | |||||||||
Stock-based compensation cost | 9,933 | 9,439 | 6,571 | 4,344 | 3,571 | 3,517 | ||||
Shares issued under employee stock purchase plan | 4,629 | 7,664 | ||||||||
Shares issued to purchase intangible assets | 48 | 50 | 2,555 | |||||||
Repurchase of shares | (986) | (752) | ||||||||
Ending balance | 937,047 | 961,733 | 937,047 | 640,996 | 593,761 | 589,321 | 19,196 | 961,733 | 593,761 | 599,493 |
Additional Paid-In Capital | Initial Public Offering | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Public offering costs | (3,425) | |||||||||
Additional Paid-In Capital | Public offering | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Public offering costs | (1,198) | |||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Beginning balance | (2,531) | (2,807) | (2,345) | (2,107) | 941 | 338 | (2,345) | 338 | 338 | |
Gain (Loss) on translation adjustment | (591) | 276 | (462) | (242) | (3,048) | 603 | ||||
Ending balance | (2,531) | (3,122) | (2,531) | (2,807) | (2,349) | (2,107) | 941 | (3,122) | (2,349) | (2,345) |
Accumulated Deficit | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Beginning balance | (482,396) | (469,223) | (487,602) | (445,067) | (427,301) | (412,052) | (487,602) | (412,052) | (412,052) | |
Impact of adoption of new accounting pronouncements (see Note 2) | 27,622 | |||||||||
Net loss | (12,354) | (13,173) | (9,243) | (24,103) | (17,766) | (15,249) | ||||
Ending balance | $ (482,396) | $ (494,750) | $ (482,396) | $ (469,223) | $ (469,170) | $ (445,067) | $ (427,301) | $ (494,750) | $ (469,170) | $ (487,602) |
Equity Incentive Plans - Additi
Equity Incentive Plans - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares subject to outstanding awards | 6,409,777 | 6,409,777 | 11,094,070 | ||
Total intrinsic value of options exercised | $ 287.7 | $ 11.2 | |||
Weighted average grant date fair value of options granted | $ 18.93 | $ 9.02 | |||
Number of shares, vested | 1,740,706 | ||||
Number of options unvested | 3,354,158 | 3,354,158 | |||
Contractual life | 10 years | ||||
Expected term | 6 years | 6 years | |||
Minimum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Expected term | 5 years | ||||
Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Expected term | 6 years | ||||
Employees | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options, average vesting term | 4 years | ||||
Expected term | 6 years | ||||
Non Employee Directors | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options, average vesting term | 1 year | ||||
Expected term | 5 years | ||||
Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Total unrecognized compensation expense related to stock options | $ 33 | $ 33 | |||
Unrecognized compensation expense expected to be recognized over weighted average period | 2 years 7 months 6 days | ||||
Stock Options | Employees | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options vesting period | 4 years | ||||
Stock Options | Non Employee Directors | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options vesting period | 1 year | ||||
Restricted Stock Units (RSUs) | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized compensation expense expected to be recognized over weighted average period | 3 years 4 months 24 days | ||||
Total unrecognized compensation expense expected to be recognized | $ 58.9 | $ 58.9 | |||
Restricted Stock Units (RSUs) | Employees | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options vesting period | 4 years | ||||
Restricted Stock Units (RSUs) | Non Employee Directors | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options vesting period | 1 year | ||||
2018 Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares of common stock reserved for issuance | 5,315,780 | 5,315,780 | |||
Automatically increase percentage of aggregate number of shares of common stock outstanding | 5.00% | ||||
Shares subject to outstanding awards | 2,500,716 | 2,500,716 | |||
Shares available for future issuance | 6,468,269 | 6,468,269 | |||
Number of shares of common stock reserved for issuance | 5,315,780 | 5,315,780 | |||
2006 Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Shares subject to outstanding awards | 5,293,255 | 5,293,255 | |||
2018 Employee Stock Purchase Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares of common stock reserved for issuance | 996,709 | 996,709 | |||
Total unrecognized compensation expense related to stock options | $ 1.1 | $ 1.1 | |||
Contractual life | 10 years | ||||
Expected term | 6 months | 6 months | 6 months | 6 months | |
Initial offering period | June 15, 2018 | ||||
Description of offering period for ESPP | The first offering period began on June 15, 2018 and ended on January 31, 2019. Subsequent offering periods begin on August 1 and February 1 (or such other date determined by our Board of Directors or our Compensation and Leadership Development Committee). | ||||
Description of purchase price for shares of common stock purchased under ESPP | The purchase price for shares of common stock purchased under the ESPP is 85% of the lesser of the fair market value of the Company’s common stock on (i) the first day of the applicable offering period or (ii) the last day of the purchase period in the applicable offering period. | ||||
Percentage of purchase price for shares of common stock under fair value market | 85.00% | ||||
Number of shares of common stock reserved for issuance | 996,709 | 996,709 | |||
Employee stock purchase plan number of shares initially authorized | 10,102,525 | ||||
2018 Employee Stock Purchase Plan | Minimum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Automatically increase percentage of aggregate number of shares of common stock outstanding | 1.00% | ||||
Percentage of payroll deduction on eligible compensation | 1.00% | ||||
Increase of common stock capital shares reserved for future issuance in each of calendar year | 1,000,000 | ||||
2018 Employee Stock Purchase Plan | Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of payroll deduction on eligible compensation | 15.00% | ||||
Employee Stock Purchase Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares of common stock reserved for issuance | 1,157,498 | 1,157,498 | |||
Number of shares of common stock reserved for issuance | 1,157,498 | 1,157,498 | |||
Common stock, shares purchased | 134,133 | 506,897 |
Equity Incentive Plans - Summar
Equity Incentive Plans - Summary of Stock-Based Compensation Expense Related to Equity Incentive Rewards (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation cost | $ 9,933 | $ 4,344 | $ 25,943 | $ 11,432 |
Common Stock Warrants | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation cost | 0 | 0 | 0 | 512 |
Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation cost | 4,436 | 3,387 | 12,549 | 9,963 |
Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation cost | 4,705 | 2 | 10,954 | 2 |
Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation cost | $ 792 | $ 955 | $ 2,440 | $ 955 |
Equity Incentive Plans - Summ_2
Equity Incentive Plans - Summary of Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Shares | ||
Options outstanding beginning balance | shares | 11,094,070 | |
Options granted | shares | 944,966 | |
Options exercised | shares | (5,418,158) | |
Options cancelled or expired | shares | (211,101) | |
Options outstanding ending balance | shares | 6,409,777 | 11,094,070 |
Options exercisable | shares | 3,055,619 | |
Weighted Average Exercise Price | ||
Options outstanding beginning balance | $ / shares | $ 12.17 | |
Options granted | $ / shares | 43.95 | |
Options exercised | $ / shares | 9.52 | |
Options cancelled or expired | $ / shares | 16.35 | |
Options outstanding ending balance | $ / shares | 18.96 | $ 12.17 |
Options exercisable | $ / shares | $ 12.52 | |
Weighted Average Remaining Contractual Life (Years) | ||
Options outstanding | 7 years 3 months 29 days | 6 years 9 months 21 days |
Options exercisable | 6 years 2 months 8 days | |
Aggregate Intrinsic Value | ||
Options outstanding | $ | $ 309,772 | $ 210,523 |
Options exercisable | $ | $ 167,363 |
Equity Incentive Plans - Summ_3
Equity Incentive Plans - Summary of Options Outstanding and Vested (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Option Outstanding, Number Outstanding | 6,409,777 |
Options Vested and Exercisable, Number Vested and Exercisable | 3,055,619 |
Options Vested and Exercisable, Weighted Average Life (in Years) | 6 years 2 months 8 days |
$1.50 to $1.90 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Exercise Prices, Low | $ / shares | $ 1.50 |
Exercise Prices, High | $ / shares | $ 1.90 |
Option Outstanding, Number Outstanding | 73,538 |
Options Outstanding, Weighted Average Life (in Years) | 1 year 6 months |
Options Vested and Exercisable, Number Vested and Exercisable | 73,538 |
Options Vested and Exercisable, Weighted Average Life (in Years) | 1 year 6 months |
2.86 to 6.40 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Exercise Prices, Low | $ / shares | $ 2.86 |
Exercise Prices, High | $ / shares | $ 6.40 |
Option Outstanding, Number Outstanding | 244,573 |
Options Outstanding, Weighted Average Life (in Years) | 3 years 2 months 12 days |
Options Vested and Exercisable, Number Vested and Exercisable | 244,573 |
Options Vested and Exercisable, Weighted Average Life (in Years) | 3 years 2 months 12 days |
8.04 to 11.72 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Exercise Prices, Low | $ / shares | $ 8.04 |
Exercise Prices, High | $ / shares | $ 11.72 |
Option Outstanding, Number Outstanding | 556,154 |
Options Outstanding, Weighted Average Life (in Years) | 4 years 4 months 24 days |
Options Vested and Exercisable, Number Vested and Exercisable | 556,154 |
Options Vested and Exercisable, Weighted Average Life (in Years) | 4 years 4 months 24 days |
12.20 to 15.06 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Exercise Prices, Low | $ / shares | $ 12.20 |
Exercise Prices, High | $ / shares | $ 15.06 |
Option Outstanding, Number Outstanding | 2,529,948 |
Options Outstanding, Weighted Average Life (in Years) | 6 years 10 months 24 days |
Options Vested and Exercisable, Number Vested and Exercisable | 1,611,280 |
Options Vested and Exercisable, Weighted Average Life (in Years) | 6 years 8 months 12 days |
16.06 to 24.00 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Exercise Prices, Low | $ / shares | $ 16.06 |
Exercise Prices, High | $ / shares | $ 24 |
Option Outstanding, Number Outstanding | 1,889,042 |
Options Outstanding, Weighted Average Life (in Years) | 8 years 4 months 24 days |
Options Vested and Exercisable, Number Vested and Exercisable | 516,733 |
Options Vested and Exercisable, Weighted Average Life (in Years) | 8 years 3 months 18 days |
31.99 to 42.21 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Exercise Prices, Low | $ / shares | $ 31.99 |
Exercise Prices, High | $ / shares | $ 42.21 |
Option Outstanding, Number Outstanding | 890,107 |
Options Outstanding, Weighted Average Life (in Years) | 9 years 2 months 12 days |
Options Vested and Exercisable, Number Vested and Exercisable | 39,056 |
Options Vested and Exercisable, Weighted Average Life (in Years) | 8 years 10 months 24 days |
55.10 to 72.67 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Exercise Prices, Low | $ / shares | $ 55.10 |
Exercise Prices, High | $ / shares | $ 72.67 |
Option Outstanding, Number Outstanding | 226,415 |
Options Outstanding, Weighted Average Life (in Years) | 9 years 3 months 18 days |
Options Vested and Exercisable, Number Vested and Exercisable | 14,285 |
Options Vested and Exercisable, Weighted Average Life (in Years) | 8 years 7 months 6 days |
Equity Incentive Plans - Summ_4
Equity Incentive Plans - Summary of Fair Value Estimated Using Black-Scholes Option Pricing Model Assumptions (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Volatility | 40.00% | 40.00% | 40.00% | |
Expected term | 6 years | 6 years | ||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate, minimum | 2.92% | 1.77% | 2.55% | |
Risk-free interest rate, maximum | 3.06% | 2.65% | 3.06% | |
Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Fair market value of common stock | $ 38.59 | $ 39.76 | $ 16.86 | |
Expected term | 5 years | |||
Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Fair market value of common stock | $ 42.21 | $ 72.67 | $ 42.21 | |
Expected term | 6 years |
Equity Incentive Plans - Summ_5
Equity Incentive Plans - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
RSUs outstanding as of December 31, 2018, Shares | shares | 74,424 |
RSUs granted, Shares | shares | 1,412,806 |
RSUs vested, Shares | shares | (37,513) |
RSUs cancelled, Shares | shares | (65,523) |
RSUs outstanding as of June 31, 2019, Shares | shares | 1,384,194 |
RSUs outstanding as of December 31, 2018, Weighted average grant date fair value per share | $ / shares | $ 32.69 |
RSUs granted, Weighted average grant date fair value per share | $ / shares | 49.62 |
RSUs vested, Weighted average grant date fair value per share | $ / shares | 72.30 |
RSUs cancelled, Weighted average grant date fair value per share | $ / shares | 43.05 |
RSUs outstanding as of June 30, 2019, Weighted average grant date fair value per share | $ / shares | $ 48.41 |
Equity Incentive Plans - Summ_6
Equity Incentive Plans - Summary of Fair Value of ESPP Purchase Rights Was Estimated Using Black-Scholes Option-pricing Model (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Volatility | 40.00% | 40.00% | 40.00% | |
Expected term | 6 years | 6 years | ||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate, minimum | 2.92% | 1.77% | 2.55% | |
Risk-free interest rate, maximum | 3.06% | 2.65% | 3.06% | |
Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Fair market value of common stock | $ 38.59 | $ 39.76 | $ 16.86 | |
Expected term | 5 years | |||
Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Fair market value of common stock | 42.21 | $ 72.67 | $ 42.21 | |
Expected term | 6 years | |||
2018 Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Fair market value of common stock | $ 82.12 | $ 38.18 | ||
Volatility | 40.00% | 40.00% | 40.00% | 40.00% |
Expected term | 6 months | 6 months | 6 months | 6 months |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 2.04% | 2.96% | ||
Risk-free interest rate, minimum | 2.04% | 2.90% | ||
Risk-free interest rate, maximum | 2.59% | 2.96% | ||
2018 Employee Stock Purchase Plan | Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Fair market value of common stock | $ 40.60 | $ 24 | ||
2018 Employee Stock Purchase Plan | Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Fair market value of common stock | $ 82.12 | $ 38.18 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Percentage of effective income tax rate expense (benefit) | 1.80% | (1.40%) |
Deferred income tax benefit associated with goodwill | $ (0.9) |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Shareholders - Schedule of Computation of Basic and Diluted Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net loss attributable to common shareholders | $ (12,354) | $ (13,173) | $ (9,243) | $ (24,103) | $ (17,766) | $ (15,249) | $ (34,770) | $ (57,118) |
Denominator: | ||||||||
Weighted-average common shares outstanding-basic | 76,156 | 66,590 | 72,064 | 29,269 | ||||
Dilutive effect of share equivalents resulting from stock options, restricted stock units, common stock warrants, ESPP shares and convertible preferred shares (as converted) | 0 | 0 | 0 | 0 | ||||
Weighted-average common shares outstanding-diluted | 76,156 | 66,590 | 72,064 | 29,269 | ||||
Net loss per common share, basic and diluted | $ (0.16) | $ (0.36) | $ (0.48) | $ (1.95) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Shareholders - Schedule of Potential Shares Not Included in the Computation of Diluted Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount | 8,502 | 11,675 | 9,671 | 43,190 |
Options To Purchase Common Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount | 7,149 | 11,350 | 8,603 | 11,263 |
Unvested Restricted Stock Units | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount | 1,346 | 262 | 1,066 | 88 |
Employee Stock Purchase Plan Shares | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount | 7 | 63 | 2 | 21 |
Common Stock | Common Stock Warrants | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount | 0 | 0 | 0 | 315 |
Convertible Preferred Shares | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount | 0 | 0 | 0 | 31,503 |