Avalara (AVLR) 10-Q 4 Aug 20 2020 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Jul. 30, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Trading Symbol	AVLR
Entity Registrant Name	AVALARA, INC.
Entity Central Index Key	0001348036
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		79,572,496
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	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 474,411	$ 466,950
Trade accounts receivable—net of allowance for doubtful accounts of $3,859 and $1,179, respectively	59,783	51,644
Deferred commissions	10,293	9,279
Prepaid expenses and other current assets	17,612	14,127
Total current assets before customer fund assets	562,099	542,000
Funds held from customers	21,523	24,383
Receivable from customers—net of allowance of $791 and $270, respectively	779	420
Total current assets	584,401	566,803
Noncurrent assets:
Deferred commissions	33,063	29,137
Operating lease right-of-use assets—net	51,924	49,321
Property and equipment—net	33,820	34,997
Intangible assets—net	19,319	22,932
Goodwill	101,198	101,224
Other noncurrent assets	4,496	2,853
Total assets	828,221	807,267
Current liabilities:
Trade payables	14,345	11,693
Accrued expenses	51,754	62,104
Deferred revenue	166,207	160,271
Accrued earnout liabilities	142	4,120
Operating lease liabilities	10,194	8,756
Total current liabilities before customer fund obligations	242,642	246,944
Customer fund obligations	22,835	24,783
Total current liabilities	265,477	271,727
Noncurrent liabilities:
Deferred revenue	1,512	970
Accrued earnout liabilities	0	9,835
Operating lease liabilities	57,119	58,301
Deferred tax liability	472	337
Other noncurrent liabilities	3,439	2,375
Total liabilities	328,019	343,545
Commitments and contingencies	0	0
Shareholders' equity:
Preferred stock, $0.0001 par value – no shares issued and outstanding at June 30, 2020 and December 31, 2019, and 20,000 shares authorized as of June 30, 2020 and December 31, 2019	0	0
Common stock, $0.0001 par value – 79,515 and 77,448 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively, and 600,000 shares authorized as of June 30, 2020 and December 31, 2019	8	8
Additional paid-in capital	1,037,470	976,627
Accumulated other comprehensive loss	(1,659)	(2,719)
Accumulated deficit	(535,617)	(510,194)
Total shareholders’ equity	500,202	463,722
Total liabilities and shareholders' equity	$ 828,221	$ 807,267

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Statement Of Financial Position [Abstract]
Trade accounts receivable, allowance for doubtful accounts	$ 3,859	$ 1,179
Receivable from customers, allowance	$ 791	$ 270
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	79,515,000	77,448,000
Common stock, shares, outstanding	79,515,000	77,448,000
Common stock, shares authorized	600,000,000	600,000,000

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenue:
Revenues	$ 116,487	$ 91,299	$ 227,930	$ 176,269
Cost of revenue:
Cost of revenues	33,330	27,335	67,584	52,642
Gross profit	83,157	63,964	160,346	123,627
Operating expenses:
Research and development	26,844	18,996	52,691	34,952
Sales and marketing	46,040	41,742	95,674	81,061
General and administrative	20,322	18,019	41,710	33,253
Total operating expenses	93,206	78,757	190,075	149,266
Operating loss	(10,049)	(14,793)	(29,729)	(25,639)
Other (income) expense:
Interest income	(168)	(1,282)	(1,610)	(2,049)
Interest expense	0	173	0	284
Other (income) expense, net	122	381	(3,250)	429
Total other (income) expense, net	(46)	(728)	(4,860)	(1,336)
Loss before income taxes	(10,003)	(14,065)	(24,869)	(24,303)
Provision for income taxes	137	172	554	288
Net loss	$ (10,140)	$ (14,237)	$ (25,423)	$ (24,591)
Net loss per share attributable to common shareholders, basic and diluted	$ (0.13)	$ (0.20)	$ (0.32)	$ (0.35)
Weighted average shares of common stock outstanding, basic and diluted	78,924	71,568	78,414	69,983
Subscription and Returns
Revenue:
Revenues	$ 108,519	$ 85,008	$ 214,065	$ 163,239
Cost of revenue:
Cost of revenues	28,779	22,938	58,296	43,916
Professional Services
Revenue:
Revenues	7,968	6,291	13,865	13,030
Cost of revenue:
Cost of revenues	$ 4,551	$ 4,397	$ 9,288	$ 8,726

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (10,140)	$ (14,237)	$ (25,423)	$ (24,591)
Other comprehensive income (loss) — Foreign currency translation	435	276	1,060	(186)
Total comprehensive loss	$ (9,705)	$ (13,961)	$ (24,363)	$ (24,777)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net loss	$ (25,423)	$ (24,591)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	21,978	15,984
Depreciation and amortization	7,999	7,668
Deferred tax expense	135	78
Non-cash operating lease costs	3,960	2,167
Non-cash change in earnout liabilities	(2,325)	476
Non-cash bad debt expense	1,373	450
Other	445	195
Changes in operating assets and liabilities:
Trade accounts receivable	(8,991)	(3,728)
Prepaid expenses and other current assets	(3,486)	(596)
Deferred commissions	(4,940)	(9,377)
Other noncurrent assets	(1,643)	(782)
Trade payables	2,891	2,468
Accrued expenses	(9,750)	(3,401)
Deferred revenue	6,477	15,127
Operating lease liabilities	(4,795)	(2,559)
Net cash used in operating activities	(16,095)	(421)
Cash flows from investing activities:
Purchase of property and equipment	(3,556)	(4,950)
Cash paid for acquisitions of businesses	0	(17,310)
Cash paid for acquired intangible assets	0	(131)
Net decrease (increase) in customer fund assets	1,981	(11,878)
Net cash used in investing activities	(1,575)	(34,269)
Cash flows from financing activities:
Proceeds from common stock offering, net of underwriting discounts	0	274,705
Payments of deferred financing costs	0	(398)
Proceeds from exercise of stock options	25,423	40,417
Proceeds from purchases of stock under employee stock purchase plan	5,716	7,664
Taxes paid related to net share settlement of stock-based awards	0	(93)
Payments related to business combination earnouts	(3,760)	0
Payments related to asset acquisition earnouts	(65)	0
Net (decrease) increase in customer fund obligations	(1,981)	11,797
Net cash provided by financing activities	25,333	334,092
Foreign currency effect on cash and cash equivalents	(202)	(140)
Net change in cash and cash equivalents	7,461	299,262
Cash and cash equivalents—Beginning of period	466,950	142,322
Cash and cash equivalents—End of period	474,411	441,584
Supplemental cash flow disclosures:
Cash paid for interest expense	0	122
Cash paid for operating lease liabilities	6,771	4,383
Cash paid for income taxes	499	134
Non-cash investing and financing activities:
Stock issued related to business combinations	7,500	0
Accrued purchase price related to acquisitions	0	2,984
Accrued value of earnout related to acquisitions of businesses	0	5,952
Accrued purchase of intangible assets	110	55
Property and equipment additions in accounts payable and accrued expenses	836	652
Deferred financing costs in accounts payable and accrued expenses	0	156
Fair value of common stock issued to purchase intangible assets	87	50
Operating lease right-of-use assets in exchange for lease obligations	$ 6,562	$ 2,839

Nature of Operations

Nature of Operations	6 Months Ended
	Jun. 30, 2020
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 tax requirements for transactions 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”), fuel excise tax, beverage alcohol, cross-border taxes (including tariffs and duties), 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 Brazil, Canada, Europe, and India that provide business development, software development, and support services.

Significant Accounting Policies

Significant Accounting Policies	6 Months Ended
	Jun. 30, 2020
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, 2019, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”) filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2020. The accompanying interim consolidated balance sheet as of June 30, 2020, the consolidated interim statements of operations for the three and six months ended June 30, 2020 and 2019, the consolidated statements of comprehensive loss for the three and six months ended June 30, 2020 and 2019, and the consolidated statements of cash flows for the six months ended June 30, 2020 and 2019, 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 three and six months ended June 30, 2020, respectively, are not necessarily indicative of the results expected for the full year ending December 31, 2020. Prior Period Restatements and Adjustments In preparing the 2019 annual consolidated financial statements, the Company discovered an immaterial error in recording deferred sales commissions for the first three quarters of 2019 impacting its previously reported quarterly financial results. The correction to sales commission expense resulted in an increase in sales and marketing expenses and accumulated deficit of $1.1 million and $2.2 million for three and six months ended June 30, 2019, respectively. The correction resulted in an increase in net loss per share of $0.02 and $0.03 for the three and six months ended June 30, 2019, respectively. The restatement of these prior period corrected amounts is presented in the accompanying unaudited consolidated statements of operations for the three and six months ended June 30, 2019, the consolidated statements of comprehensive loss for the three and six months ended June 30, 2019, and the consolidated statement of cash flows for the six months ended June 30, 2019. Avalara adopted the new lease accounting standard as of January 1, 2019 in the 2019 Annual Report. Due to the timing of adoption, the Company’s 2019 interim financial statements did not reflect the new lease accounting standard. As a result, the presentation of cash flows from operating activities presented in the accompanying unaudited consolidated statement of cash flows for the six months ended June 30, 2019 include adjustments for the adoption of the new lease accounting standard. The adjustments do not impact previously reported net cash used in operating activities. 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. Significant estimates and judgments related to revenue are described below in the Revenue Recognition Accounting Policy. Significant estimates impacting expenses include: expected credit losses associated with the allowance for doubtful accounts; the measurement of fair values of stock-based compensation award grants; the expected earnout obligations in connection with acquisitions; the expected term of the customer relationship for capitalized contract cost amortization; the valuation of acquired intangible assets; and the valuation of the fair value of reporting units for analyzing goodwill. Actual results could materially differ from those estimates. Fair Value Measurements 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 six months ended June 30, 2020 or for the year ended December 31, 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 tax rates that will be in effect 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 tax benefits or expense based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current period and deferred tax liabilities and assets for the future tax consequence of events that have been recognized in an entity’s financial statements or tax returns. The Company will recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Judgement is required in assessing the future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact the consolidated financial statements. Stock-Based Compensation The Company accounts for stock-based compensation by calculating the fair value of each option, restricted stock unit (“RSU”), or purchase right issued under the Company’s 2018 Employee Stock Purchase Plan (“ESPP”) at the date of grant. The fair value of stock options and purchase rights issued under the ESPP 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 or purchase right, the expected volatility of its common stock, risk-free interest rate, 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. The Company accounts for forfeitures as they occur. Revenue Recognition 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 the Company expects to be entitled to in exchange for those services. Beginning January 1, 2019, 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 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 co llected and remitted to governmental authorities. Subscription and Returns Revenue Subscription and returns revenue primarily consist 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 invoices for professional service arrangements on a fixed fee, milestone, or time and materials basis. Professional services revenue includes fees from providing tax analysis, configurations, registrations, 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. 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. L eases Effective January 1, 2019, the Company’s lease accounting policy follows guidance from ASC 842, Leases Leases are classified at commencement as either operating or finance leases. As of June 30, 2020, all of the Company’s leases are classified as operating leases. Rent expense for operating leases is recognized on the straight-line method over the term of the agreement beginning on the lease commencement date. Operating lease costs are generally fixed payments. Lease-related costs, which are variable rather than fixed, are expensed in the period incurred. Variable lease costs consist primarily of common area maintenance and utilities costs for the Company’s office spaces that are due based on the actual costs incurred by the landlord. Lease payments that depend on an index or a rate are measured using the index or rate at the commencement date and are included in operating lease costs. Subsequent increases to lease payments due to a change in the index or rate are expensed as a variable lease cost. Recently Adopted Accounting Standards ASU No. 2016-13 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. The Company adopted this guidance on January 1, 2020. The adoption, which impacted the Company’s allowance for doubtful accounts, did not have a significant impact on the consolidated financial statements. 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. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use-software. The guidance in ASU No. 2018-15 is required for annual reporting periods , including interim periods within those annual periods, The Company adopted this guidance on January 1, 2020 with prospective application, as permitted by the ASU. June 30, 2020 New Accounting Standards Not Yet Adopted ASU No. 2019-12 In December 2019, the FASB issued ASU No. 2019-12, which simplifies the accounting for income taxes. The guidance in ASU No. 2019-12 is required for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2020, for public business entities, with early adoption permitted. The Company will adopt this guidance on January 1, 2021. The Company is currently evaluating the impact this guidance will have on the Company’s consolidated financial statements.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2020
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 June 30, 2020 Value (Level 1) (Level 2) (Level 3) Money market funds $ 466,093 $ 466,093 $ — $ — Earnout related to business combinations 33 — — 33 Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Fair Identical Assets Inputs Inputs December 31, 2019 Value (Level 1) (Level 2) (Level 3) Money market funds $ 458,248 $ 458,248 $ — $ — Earnout related to business combinations 13,808 — — 13,808 Earnout Liabilities Earnout liabilities recorded in connection with an acquisition accounted for as a business combination under ASC 805 are recorded at estimated fair value on a recurring basis. Business combinations are discussed in Note 5. Earnouts recorded in connection with asset acquisitions are recorded as earnout payments become known. As such, earnouts related to asset acquisitions are not included in these fair value disclosures. 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 are recorded in other (income) expense, net in the consolidated statements of operations. The Company generally estimates the fair value of earnout liabilities for business combinations using probability-weighted discounted cash flows and Monte Carlo simulations. The earnout liability associated with the 2019 acquisition of Portway International Inc. (“Portway”) is based on the achievement of specific revenue and operating metrics through January 2021. 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 Mo nths Ended June 30, 2020 2019 Earnout liabilities: Balance beginning of period $ 3,599 $ 5,952 Fair value recorded at acquisition — — Payments of earnout liabilities (3,750 ) — Total unrealized loss included in other (income) expense, net 184 476 Balance end of period $ 33 $ 6,428 For the Six Months Ended June 30, 2020 2019 Earnout liabilities: Balance beginning of period $ 13,808 $ — Fair value recorded at acquisition — 5,952 Payments of earnout liabilities (11,450 ) — Total unrealized net (gain) loss included in other (income) expense, net (2,325 ) 476 Balance end of period $ 33 $ 6,428 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 half of 2020.

Balance Sheet Detail

Balance Sheet Detail	6 Months Ended
	Jun. 30, 2020
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Detail	4 . Balance Sheet Detail Property and equipment, net consisted of the following (in thousands): Useful June 30, December 31, Life (Years) 2020 2019 Computer equipment and software 3 to 5 $ 14,565 $ 15,636 Internally developed software 6 7,452 5,948 Furniture and fixtures 5 6,930 6,589 Office equipment 3 to 5 862 1,058 Leasehold improvements 1 to 10 29,484 28,984 59,293 58,215 Accumulated depreciation (25,473 ) (23,218 ) Property and equipment—net $ 33,820 $ 34,997 Depreciation expense was $2.3 million and $4.5 million for the three and six months ended June 30, 2020, respectively Prepaid expenses and other current assets consisted of the following (in thousands): June 30, December 31, 2020 2019 Prepaid expenses $ 15,101 $ 11,064 Accrued investment income 24 565 Deposits 427 197 Other 2,060 2,301 Total $ 17,612 $ 14,127 Accrued expenses consisted of the following (in thousands): June 30, December 31, 2020 2019 Accrued payroll and related taxes $ 6,294 $ 3,985 Accrued federal, state, and local taxes 2,694 2,635 Accrued bonus 7,554 20,206 Self-insurance reserves 2,223 2,238 Employee stock purchase plan contributions 4,913 4,716 Accrued sales commissions 3,875 5,397 Accrued partner commissions 6,996 7,043 Contract liabilities 6,195 5,197 Accrued purchase price related to acquisitions 3,368 2,763 Other 7,642 7,924 Total $ 51,754 $ 62,104 Contract liabilities represent amounts that are collected in advance of the satisfaction of performance obligations. See Contract Liabilities

Acquisitions of Businesses

Acquisitions of Businesses	6 Months Ended
	Jun. 30, 2020
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 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 ended January 31, 2020. The earnout was originally recognized at fair value at the date of the business combination and $4.0 million was paid in the first quarter of 2020. 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 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. 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 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 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 second and fourth milestones were not achieved. A portion of the third milestone was achieved and $0.03 million is recorded within current accrued earnout liabilities on the consolidated balance sheet as of 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. 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. 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 is based, in part, on two operating metric targets with a maximum payout of $7.5 million. The remainder of the earnout is based on certain revenue targets with a maximum payout of $2.5 million. Pursuant to the Portway Purchase, the shares will be transferred to the seller when the criteria under each provision are satisfied. During the first half of 2020, 89,318 shares of common stock (with a $7.5 million value under the Portway Purchase) were transferred to the seller to settle both operating metric targets of the earnout. The earnout was originally recognized at fair value at the date of the business combination and is adjusted to fair value quarterly (see Note 3). The remaining earnout liability related to the revenue targets was determined to be zero as of June 30, 2020. 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 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.

Revenue

Revenue	6 Months Ended
	Jun. 30, 2020
Revenue From Contract With Customer [Abstract]
Revenue	6 . Revenue See Note 2 for a description of the Company’s revenue recognition accounting policy. 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 2020 2019 Revenue (U.S.): Subscription and returns Tax determination $ 61,701 $ 48,707 Tax returns and compliance management 40,864 30,686 Interest income on funds held for customers 58 812 Total subscription and returns 102,623 80,205 Professional services 7,331 5,663 Total revenue (U.S.) 109,954 85,868 Total revenue (non-U.S.) 6,533 5,431 Total revenue $ 116,487 $ 91,299 For the Six Months Ended June 30, 2020 2019 Revenue (U.S.): Subscription and returns Tax determination $ 120,672 $ 93,938 Tax returns and compliance management 80,297 57,372 Interest income on funds held for customers 584 1,541 Total subscription and returns 201,553 152,851 Professional services 12,793 11,398 Total revenue (U.S.) 214,346 164,249 Total revenue (non-U.S.) 13,584 12,020 Total revenue $ 227,930 $ 176,269 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, as defined by ASC 606 (e.g. customer agreements with non-standard termination rights), 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 three and six months ended June 30, 2020 and 2019 Three Months Ended June 30, 2020 2019 Contract liabilities: Balance beginning of period $ 6,330 $ 4,208 Contract liabilities transferred to deferred revenue (2,716 ) (1,137 ) Addition to contract liabilities 2,581 1,437 Balance end of period $ 6,195 $ 4,508 Six Months Ended June 30, 2020 2019 Contract liabilities: Balance beginning of period $ 5,197 $ — Adoption of ASC 606 — 2,090 Contract liabilities transferred to deferred revenue (5,254 ) (2,394 ) Addition to contract liabilities 6,252 4,812 Balance end of period $ 6,195 $ 4,508 As of June 30, 2020, 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 three and six months ended June 30, 2020 and 2019 is presented below (in thousands): Three Months Ended June 30, 2020 2019 Deferred revenue: Balance beginning of period $ 165,369 $ 132,714 Revenue recognized (116,487 ) (91,299 ) Additional amounts deferred 118,837 97,396 Balance end of period $ 167,719 $ 138,811 Six Months Ended June 30, 2020 2019 Deferred revenue: Balance beginning of period $ 161,241 $ 134,653 Adoption of ASC 606 — (11,250 ) Revenue recognized (227,930 ) (176,269 ) Additional amounts deferred 234,408 191,677 Balance end of period $ 167,719 $ 138,811 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 three and six months ended June 30, 2020 and 2019 is presented below (in thousands): Three Months Ended June 30, 2020 2019 Deferred commissions: Balance beginning of period $ 40,666 $ 25,644 Additional commissions deferred 5,515 4,706 Amortization of deferred commissions (2,825 ) (1,706 ) Balance end of period $ 43,356 $ 28,644 Six Months Ended June 30, 2020 2019 Deferred commissions: Balance beginning of period $ 38,416 $ — Adoption of ASC 606 — 19,267 Additional commissions deferred 10,412 12,362 Amortization of deferred commissions (5,472 ) (2,985 ) Balance end of period $ 43,356 $ 28,644 As of June 30, 2020, $10.3 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 six months ended June 30, 2020 or 2019. There were no assets recognized related to the costs to fulfill contracts during the six months ended June 30, 2020 or 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 June 30, 2020, amounts allocated to these additional contractual obligations are $40.8 million, of which $40.4 million is expected to be recognized as revenue over the next 12 months with the remaining amount thereafter.

Intangible Assets

Intangible Assets	6 Months Ended
	Jun. 30, 2020
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): June 30, 2020 Average Useful Life (Years) Gross Accumulated Amortization Net Customer relationships 3 to 10 $ 20,241 $ (12,469 ) $ 7,772 Developed technology 3 to 8 36,068 (24,664 ) 11,404 Noncompete agreements 3 to 5 759 (626 ) 133 Tradename and trademarks 1 to 4 439 (429 ) 10 $ 57,507 $ (38,188 ) $ 19,319 December 31, 2019 Average Useful Life (Years) Gross Accumulated Amortization Net Customer relationships 3 to 10 $ 20,390 $ (11,403 ) $ 8,987 Developed technology 3 to 8 36,422 (22,659 ) 13,763 Noncompete agreements 3 to 5 777 (612 ) 165 Tradename and trademarks 1 to 4 452 (435 ) 17 $ 58,041 $ (35,109 ) $ 22,932 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 $1.6 million and $3.5 million for the three and six months ended June 30, 2020, respectively, and $1.8 million and $3.5 million for the three and six months ended June 30, 2019, respectively. Goodwill Changes in the carrying amount of goodwill for the six months ended June 30, 2020 Balance—December 31, 2019 $ 101,224 Cumulative translation adjustments (26 ) Balance—June 30, 2020 $ 101,198 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 June 30, 2020, the Brazilian reporting unit had no associated goodwill.

Leases

Leases	6 Months Ended
	Jun. 30, 2020
Leases [Abstract]
Leases	8. Leases Total lease cost, net of sublease income, was $3.9 million and $7.7 million for the three and six months ended June 30, 2020, respectively, and $2.9 million and $5.5 million for the three and six months ended June 30, 2019, respectively. Sublease income was $0.4 million and $0.8 million for the three and six months ended June 30, 2020, respectively, and $0.4 million and $0.7 million for the three and six months ended June 30, 2019, respectively. Leases that commenced in the first half of 2020 increased operating lease right-of-use assets by $6.6 million.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2020
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	9 . Commitments and Contingencies 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. 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. On March 5, 2020, we filed a motion for summary judgment. On May 27, 2020, the United States District Court for the Western District of Washington entered summary judgment in favor of Avalara, Inc. disposing of the remaining trade secret misappropriation and breach of contract claims. Plaintiff filed a notice of appeal but subsequently withdrew the notice. On July 7, 2020, the with prejudice 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 June 30, 2020, 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 June 30, 2020

Debt

Debt	6 Months Ended
	Jun. 30, 2020
Debt Disclosure [Abstract]
Debt	10 . 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%.

Shareholders' Equity

Shareholders' Equity	6 Months Ended
	Jun. 30, 2020
Stockholders Equity Note [Abstract]
Shareholders' Equity	1 1 . Shareholders’ Equity Authorized Capital—Common Stock and Preferred Stock Under the Amended and Restated Articles of Incorporation, which became effective in June 2018, the Company is authorized to issue two classes of stock designated as common stock and preferred stock. The Company’s total authorized capital stock is 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. In June 2019, the Company completed a follow-on 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 and payable by the Company of $1.2 million. The changes to the Company’s shareholders’ equity during the six months ended June 30, 2020 Accumulated Additional Other Total Common Stock Paid-In Comprehensive Accumulated Shareholders’ Shares Amount Capital Income (Loss) Deficit Equity Balance at January 1, 2020 77,447,620 $ 8 $ 976,627 $ (2,719 ) $ (510,194 ) $ 463,722 Exercise of stock options 532,848 7,928 7,928 Vesting of restricted stock units 186,475 Stock-based compensation cost 9,749 9,749 Shares issued under employee stock purchase plan 81,894 5,716 5,716 Shares issued related to business combination earnouts 44,659 3,750 3,750 Shares issued to purchase intangible assets 1,191 87 87 Gain on translation adjustment 625 625 Net loss (15,283 ) (15,283 ) Balance at March 31, 2020 78,294,687 $ 8 $ 1,003,857 $ (2,094 ) $ (525,477 ) $ 476,294 Exercise of stock options 1,117,805 17,495 17,495 Vesting of restricted stock units 57,832 — Stock-based compensation cost 12,368 12,368 Shares issued related to business combination earnouts 44,659 3,750 3,750 Gain on translation adjustment 435 435 Net loss (10,140 ) (10,140 ) Balance at June 30, 2020 79,514,983 $ 8 $ 1,037,470 $ (1,659 ) $ (535,617 ) $ 500,202 The changes to the Company’s shareholders’ equity f or the six months ended June 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 - ASC 606 (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-based awards (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 (10,354 ) (10,354 ) Balance at March 31, 2019 69,903,447 $ 7 $ 640,996 $ (2,807 ) $ (470,334 ) $ 167,862 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 (14,237 ) (14,237 ) Balance at June 30, 2019 75,444,551 $ 8 $ 937,047 $ (2,531 ) $ (484,571 ) $ 449,953

Equity Incentive Plans

Equity Incentive Plans	6 Months Ended
	Jun. 30, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Equity Incentive Plans	1 2 . 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 June 30, 2020, 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 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 or a subsidiary. 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 June 30, 2020, there were 3,119,524 shares subject to outstanding stock options under the 2006 Plan. 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 June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Stock-based compensation cost: Stock options $ 4,159 $ 4,196 $ 8,008 $ 8,113 Restricted stock units 7,487 4,551 12,420 6,249 Employee stock purchase plan 722 692 1,689 1,648 Total stock-based compensation cost $ 12,368 $ 9,439 $ 22,117 $ 16,010 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 six months ended June 30, 2020: Weighted Weighted Average Aggregate Average Remaining Intrinsic Exercise Contractual Value Shares Price Life (Years) (in thousands) Options outstanding as of January 1, 2020 5,884,742 $ 20.09 7.22 $ 312,838 Options granted 245,062 71.75 Options exercised (1,650,653 ) 15.40 Options cancelled or expired (99,417 ) 15.89 Options outstanding as of June 30, 2020 4,379,734 24.84 7.10 474,100 Options exercisable as of June 30, 2020 2,257,723 $ 16.51 6.13 $ 263,195 A summary of options outstanding and vested as of June 30, 2020 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 27,763 0.8 27,763 0.8 2.86 to 6.40 89,062 2.6 89,062 2.6 8.04 to 11.72 300,863 3.7 300,863 3.7 12.20 to 15.06 1,394,602 6.2 1,138,188 6.1 16.06 to 24.00 1,307,234 7.6 435,295 7.6 31.99 to 42.21 736,230 8.5 200,115 8.5 55.10 to 99.65 523,980 9.3 66,437 8.5 4,379,734 2,257,723 The total intrinsic value of options exercised during the six months ended June 30, 2020 and 2019 The weighted average grant date fair value of options granted during the six months ended June 30, 2020 and 2019 As of June 30, 2020, $28.8 million of total unrecognized compensation cost related to stock options was expected to be recognized over a weighted average period of approximately 2.5 years. All options given 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 June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Fair market value of common stock $66.26 - 99.65 $55.10 - 72.67 $66.26 - 99.65 $39.76 - 72.67 Volatility 43% 40% 43% 40% Expected term 5-6 years 5-6 years 5-6 years 5-6 years Expected dividend yield n/a n/a n/a n/a Risk-free interest rate 0.33% - 0.51% 1.77% - 2.49% 0.33% - 1.25% 1.77% - 2.65% 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. 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. Beginning in 2020, expected volatility for stock options is based on a combination of annualized daily historical volatility of the Company’s stock price and the historical and implied volatility of comparable publicly traded companies over a similar expected term. Prior to 2020, expected volatility was based only 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 four years six years 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 six months ended June 30, 2020: Weighted Average Grant Date Fair Restricted Stock Units Value Per Share RSUs outstanding as of January 1, 2020 1,508,281 $ 51.52 RSUs granted 1,064,457 72.85 RSUs vested (244,307 ) 48.28 RSUs cancelled (95,473 ) 51.79 RSUs outstanding as of June 30, 2020 2,232,958 $ 62.03 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 June 30, 2020 , $ 126.6 million of total unrecognized compensation cost related to RSUs was expected to be recognized over a weighted average period of approximately 3.3 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 ten-year There were no stock purchases under the ESPP during the three months ended June 30, 2020. During the six months ended June 30, 2020, 81,894 shares of common stock were purchased under the ESPP. As of 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 and Six Months Ended June 30, 2020 2019 Fair market value of common stock $85.14 $40.60 Volatility 32% 40% Expected term 0.5 years 0.5 years Expected dividend yield n/a n/a Risk-free interest rate 1.54% 2.59% Beginning in 2020, the expected volatility for ESPP purchase rights is based on daily historical volatility of the Company’s stock price. Prior to 2020, expected volatility was based only on the historical and implied volatility of comparable publicly traded companies over a similar expected term.

Net Loss Per Share Attributable

Net Loss Per Share Attributable to Common Shareholders	6 Months Ended
	Jun. 30, 2020
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. 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 June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Numerator: Net loss attributable to common shareholders $ (10,140 ) $ (14,237 ) $ (25,423 ) $ (24,591 ) Denominator: Weighted-average common shares outstanding-basic 78,924 71,568 78,414 69,983 Dilutive effect of share equivalents resulting from stock options, restricted stock units, and ESPP shares — — — — Weighted-average common shares outstanding-diluted 78,924 71,568 78,414 69,983 Net loss per common share, basic and diluted $ (0.13 ) $ (0.20 ) $ (0.32 ) $ (0.35 ) 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 June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Options to purchase common shares 4,928 8,458 5,296 9,343 Unvested restricted stock units 2,204 1,213 1,879 924 Employee stock purchase plan shares 50 82 30 48 Total 7,182 9,753 7,205 10,315

Significant Accounting Polici_2

Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2020
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, 2019, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”) filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2020. The accompanying interim consolidated balance sheet as of June 30, 2020, the consolidated interim statements of operations for the three and six months ended June 30, 2020 and 2019, the consolidated statements of comprehensive loss for the three and six months ended June 30, 2020 and 2019, and the consolidated statements of cash flows for the six months ended June 30, 2020 and 2019, 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 three and six months ended June 30, 2020, respectively, are not necessarily indicative of the results expected for the full year ending December 31, 2020.
Prior Period Restatements and Adjustments	Prior Period Restatements and Adjustments In preparing the 2019 annual consolidated financial statements, the Company discovered an immaterial error in recording deferred sales commissions for the first three quarters of 2019 impacting its previously reported quarterly financial results. The correction to sales commission expense resulted in an increase in sales and marketing expenses and accumulated deficit of $1.1 million and $2.2 million for three and six months ended June 30, 2019, respectively. The correction resulted in an increase in net loss per share of $0.02 and $0.03 for the three and six months ended June 30, 2019, respectively. The restatement of these prior period corrected amounts is presented in the accompanying unaudited consolidated statements of operations for the three and six months ended June 30, 2019, the consolidated statements of comprehensive loss for the three and six months ended June 30, 2019, and the consolidated statement of cash flows for the six months ended June 30, 2019. Avalara adopted the new lease accounting standard as of January 1, 2019 in the 2019 Annual Report. Due to the timing of adoption, the Company’s 2019 interim financial statements did not reflect the new lease accounting standard. As a result, the presentation of cash flows from operating activities presented in the accompanying unaudited consolidated statement of cash flows for the six months ended June 30, 2019 include adjustments for the adoption of the new lease accounting standard. The adjustments do not impact previously reported net cash used in operating activities.
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. Significant estimates and judgments related to revenue are described below in the Revenue Recognition Accounting Policy. Significant estimates impacting expenses include: expected credit losses associated with the allowance for doubtful accounts; the measurement of fair values of stock-based compensation award grants; the expected earnout obligations in connection with acquisitions; the expected term of the customer relationship for capitalized contract cost amortization; the valuation of acquired intangible assets; and the valuation of the fair value of reporting units for analyzing goodwill. Actual results could materially differ from those estimates.
Fair Value Measurements	Fair Value Measurements 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 six months ended June 30, 2020 or for the year ended December 31, 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 tax rates that will be in effect 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 tax benefits or expense based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current period and deferred tax liabilities and assets for the future tax consequence of events that have been recognized in an entity’s financial statements or tax returns. The Company will recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Judgement is required in assessing the future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact the consolidated financial statements.
Stock-Based Compensation	Stock-Based Compensation The Company accounts for stock-based compensation by calculating the fair value of each option, restricted stock unit (“RSU”), or purchase right issued under the Company’s 2018 Employee Stock Purchase Plan (“ESPP”) at the date of grant. The fair value of stock options and purchase rights issued under the ESPP 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 or purchase right, the expected volatility of its common stock, risk-free interest rate, 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. The Company accounts for forfeitures as they occur.
Revenue Recognition	Revenue Recognition 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 the Company expects to be entitled to in exchange for those services. Beginning January 1, 2019, 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 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 co llected and remitted to governmental authorities. Subscription and Returns Revenue Subscription and returns revenue primarily consist 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 invoices for professional service arrangements on a fixed fee, milestone, or time and materials basis. Professional services revenue includes fees from providing tax analysis, configurations, registrations, 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. 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.
Leases	L eases Effective January 1, 2019, the Company’s lease accounting policy follows guidance from ASC 842, Leases Leases are classified at commencement as either operating or finance leases. As of June 30, 2020, all of the Company’s leases are classified as operating leases. Rent expense for operating leases is recognized on the straight-line method over the term of the agreement beginning on the lease commencement date. Operating lease costs are generally fixed payments. Lease-related costs, which are variable rather than fixed, are expensed in the period incurred. Variable lease costs consist primarily of common area maintenance and utilities costs for the Company’s office spaces that are due based on the actual costs incurred by the landlord. Lease payments that depend on an index or a rate are measured using the index or rate at the commencement date and are included in operating lease costs. Subsequent increases to lease payments due to a change in the index or rate are expensed as a variable lease cost.
Recently Adopted Accounting Standard	Recently Adopted Accounting Standards ASU No. 2016-13 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. The Company adopted this guidance on January 1, 2020. The adoption, which impacted the Company’s allowance for doubtful accounts, did not have a significant impact on the consolidated financial statements. 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. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use-software. The guidance in ASU No. 2018-15 is required for annual reporting periods , including interim periods within those annual periods, The Company adopted this guidance on January 1, 2020 with prospective application, as permitted by the ASU. June 30, 2020
New Accounting Standards Not Yet Adopted	New Accounting Standards Not Yet Adopted ASU No. 2019-12 In December 2019, the FASB issued ASU No. 2019-12, which simplifies the accounting for income taxes. The guidance in ASU No. 2019-12 is required for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2020, for public business entities, with early adoption permitted. The Company will adopt this guidance on January 1, 2021. The Company is currently evaluating the impact this guidance will have on the Company’s consolidated financial statements.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2020
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 June 30, 2020 Value (Level 1) (Level 2) (Level 3) Money market funds $ 466,093 $ 466,093 $ — $ — Earnout related to business combinations 33 — — 33 Fair Value Measurements Using Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Fair Identical Assets Inputs Inputs December 31, 2019 Value (Level 1) (Level 2) (Level 3) Money market funds $ 458,248 $ 458,248 $ — $ — Earnout related to business combinations 13,808 — — 13,808
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 Mo nths Ended June 30, 2020 2019 Earnout liabilities: Balance beginning of period $ 3,599 $ 5,952 Fair value recorded at acquisition — — Payments of earnout liabilities (3,750 ) — Total unrealized loss included in other (income) expense, net 184 476 Balance end of period $ 33 $ 6,428 For the Six Months Ended June 30, 2020 2019 Earnout liabilities: Balance beginning of period $ 13,808 $ — Fair value recorded at acquisition — 5,952 Payments of earnout liabilities (11,450 ) — Total unrealized net (gain) loss included in other (income) expense, net (2,325 ) 476 Balance end of period $ 33 $ 6,428

Balance Sheet Detail (Tables)

Balance Sheet Detail (Tables)	6 Months Ended
	Jun. 30, 2020
Balance Sheet Related Disclosures [Abstract]
Schedule of Property and Equipment, Net	Property and equipment, net consisted of the following (in thousands): Useful June 30, December 31, Life (Years) 2020 2019 Computer equipment and software 3 to 5 $ 14,565 $ 15,636 Internally developed software 6 7,452 5,948 Furniture and fixtures 5 6,930 6,589 Office equipment 3 to 5 862 1,058 Leasehold improvements 1 to 10 29,484 28,984 59,293 58,215 Accumulated depreciation (25,473 ) (23,218 ) Property and equipment—net $ 33,820 $ 34,997
Schedule of Prepaid Expense And Other Current Assets	Prepaid expenses and other current assets consisted of the following (in thousands): June 30, December 31, 2020 2019 Prepaid expenses $ 15,101 $ 11,064 Accrued investment income 24 565 Deposits 427 197 Other 2,060 2,301 Total $ 17,612 $ 14,127
Schedule of Accrued Expenses	Accrued expenses consisted of the following (in thousands): June 30, December 31, 2020 2019 Accrued payroll and related taxes $ 6,294 $ 3,985 Accrued federal, state, and local taxes 2,694 2,635 Accrued bonus 7,554 20,206 Self-insurance reserves 2,223 2,238 Employee stock purchase plan contributions 4,913 4,716 Accrued sales commissions 3,875 5,397 Accrued partner commissions 6,996 7,043 Contract liabilities 6,195 5,197 Accrued purchase price related to acquisitions 3,368 2,763 Other 7,642 7,924 Total $ 51,754 $ 62,104

Acquisitions of Businesses (Tab

Acquisitions of Businesses (Tables)	6 Months Ended
	Jun. 30, 2020
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)	6 Months Ended
	Jun. 30, 2020
Revenue From Contract With Customer [Abstract]
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 2020 2019 Revenue (U.S.): Subscription and returns Tax determination $ 61,701 $ 48,707 Tax returns and compliance management 40,864 30,686 Interest income on funds held for customers 58 812 Total subscription and returns 102,623 80,205 Professional services 7,331 5,663 Total revenue (U.S.) 109,954 85,868 Total revenue (non-U.S.) 6,533 5,431 Total revenue $ 116,487 $ 91,299 For the Six Months Ended June 30, 2020 2019 Revenue (U.S.): Subscription and returns Tax determination $ 120,672 $ 93,938 Tax returns and compliance management 80,297 57,372 Interest income on funds held for customers 584 1,541 Total subscription and returns 201,553 152,851 Professional services 12,793 11,398 Total revenue (U.S.) 214,346 164,249 Total revenue (non-U.S.) 13,584 12,020 Total revenue $ 227,930 $ 176,269
Summary of Activity Impacting Contract Liabilities	A summary of the activity impacting the contract liabilities during the three and six months ended June 30, 2020 and 2019 Three Months Ended June 30, 2020 2019 Contract liabilities: Balance beginning of period $ 6,330 $ 4,208 Contract liabilities transferred to deferred revenue (2,716 ) (1,137 ) Addition to contract liabilities 2,581 1,437 Balance end of period $ 6,195 $ 4,508 Six Months Ended June 30, 2020 2019 Contract liabilities: Balance beginning of period $ 5,197 $ — Adoption of ASC 606 — 2,090 Contract liabilities transferred to deferred revenue (5,254 ) (2,394 ) Addition to contract liabilities 6,252 4,812 Balance end of period $ 6,195 $ 4,508
Summary of Activity Impacting Deferred Revenue	A summary of the activity impacting deferred revenue balances during the three and six months ended June 30, 2020 and 2019 is presented below (in thousands): Three Months Ended June 30, 2020 2019 Deferred revenue: Balance beginning of period $ 165,369 $ 132,714 Revenue recognized (116,487 ) (91,299 ) Additional amounts deferred 118,837 97,396 Balance end of period $ 167,719 $ 138,811 Six Months Ended June 30, 2020 2019 Deferred revenue: Balance beginning of period $ 161,241 $ 134,653 Adoption of ASC 606 — (11,250 ) Revenue recognized (227,930 ) (176,269 ) Additional amounts deferred 234,408 191,677 Balance end of period $ 167,719 $ 138,811
Summary of Activity Impacting Deferred Commissions	A summary of the activity impacting the deferred commissions during the three and six months ended June 30, 2020 and 2019 is presented below (in thousands): Three Months Ended June 30, 2020 2019 Deferred commissions: Balance beginning of period $ 40,666 $ 25,644 Additional commissions deferred 5,515 4,706 Amortization of deferred commissions (2,825 ) (1,706 ) Balance end of period $ 43,356 $ 28,644 Six Months Ended June 30, 2020 2019 Deferred commissions: Balance beginning of period $ 38,416 $ — Adoption of ASC 606 — 19,267 Additional commissions deferred 10,412 12,362 Amortization of deferred commissions (5,472 ) (2,985 ) Balance end of period $ 43,356 $ 28,644

Intangible Assets (Tables)

Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
Schedule of Finite-lived Intangible Assets	Finite-lived intangible assets consisted of the following (in thousands): June 30, 2020 Average Useful Life (Years) Gross Accumulated Amortization Net Customer relationships 3 to 10 $ 20,241 $ (12,469 ) $ 7,772 Developed technology 3 to 8 36,068 (24,664 ) 11,404 Noncompete agreements 3 to 5 759 (626 ) 133 Tradename and trademarks 1 to 4 439 (429 ) 10 $ 57,507 $ (38,188 ) $ 19,319 December 31, 2019 Average Useful Life (Years) Gross Accumulated Amortization Net Customer relationships 3 to 10 $ 20,390 $ (11,403 ) $ 8,987 Developed technology 3 to 8 36,422 (22,659 ) 13,763 Noncompete agreements 3 to 5 777 (612 ) 165 Tradename and trademarks 1 to 4 452 (435 ) 17 $ 58,041 $ (35,109 ) $ 22,932
Schedule of Changes in Carrying Amount of Goodwill	Changes in the carrying amount of goodwill for the six months ended June 30, 2020 Balance—December 31, 2019 $ 101,224 Cumulative translation adjustments (26 ) Balance—June 30, 2020 $ 101,198

Shareholders' Equity (Tables)

Shareholders' Equity (Tables)	6 Months Ended
	Jun. 30, 2020
Stockholders Equity Note [Abstract]
Summary of Changes of Shareholders' Equity (Deficit)	The changes to the Company’s shareholders’ equity during the six months ended June 30, 2020 Accumulated Additional Other Total Common Stock Paid-In Comprehensive Accumulated Shareholders’ Shares Amount Capital Income (Loss) Deficit Equity Balance at January 1, 2020 77,447,620 $ 8 $ 976,627 $ (2,719 ) $ (510,194 ) $ 463,722 Exercise of stock options 532,848 7,928 7,928 Vesting of restricted stock units 186,475 Stock-based compensation cost 9,749 9,749 Shares issued under employee stock purchase plan 81,894 5,716 5,716 Shares issued related to business combination earnouts 44,659 3,750 3,750 Shares issued to purchase intangible assets 1,191 87 87 Gain on translation adjustment 625 625 Net loss (15,283 ) (15,283 ) Balance at March 31, 2020 78,294,687 $ 8 $ 1,003,857 $ (2,094 ) $ (525,477 ) $ 476,294 Exercise of stock options 1,117,805 17,495 17,495 Vesting of restricted stock units 57,832 — Stock-based compensation cost 12,368 12,368 Shares issued related to business combination earnouts 44,659 3,750 3,750 Gain on translation adjustment 435 435 Net loss (10,140 ) (10,140 ) Balance at June 30, 2020 79,514,983 $ 8 $ 1,037,470 $ (1,659 ) $ (535,617 ) $ 500,202 The changes to the Company’s shareholders’ equity f or the six months ended June 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 - ASC 606 (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-based awards (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 (10,354 ) (10,354 ) Balance at March 31, 2019 69,903,447 $ 7 $ 640,996 $ (2,807 ) $ (470,334 ) $ 167,862 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 (14,237 ) (14,237 ) Balance at June 30, 2019 75,444,551 $ 8 $ 937,047 $ (2,531 ) $ (484,571 ) $ 449,953

Equity Incentive Plans (Tables)

Equity Incentive Plans (Tables)	6 Months Ended
	Jun. 30, 2020
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 June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Stock-based compensation cost: Stock options $ 4,159 $ 4,196 $ 8,008 $ 8,113 Restricted stock units 7,487 4,551 12,420 6,249 Employee stock purchase plan 722 692 1,689 1,648 Total stock-based compensation cost $ 12,368 $ 9,439 $ 22,117 $ 16,010
Summary of Stock Option Activity	Stock Options The following table summarizes stock option activity for the Company’s stock-based compensation plans for the six months ended June 30, 2020: Weighted Weighted Average Aggregate Average Remaining Intrinsic Exercise Contractual Value Shares Price Life (Years) (in thousands) Options outstanding as of January 1, 2020 5,884,742 $ 20.09 7.22 $ 312,838 Options granted 245,062 71.75 Options exercised (1,650,653 ) 15.40 Options cancelled or expired (99,417 ) 15.89 Options outstanding as of June 30, 2020 4,379,734 24.84 7.10 474,100 Options exercisable as of June 30, 2020 2,257,723 $ 16.51 6.13 $ 263,195
Summary of Options Outstanding and Vested by Range of Exercise Prices	A summary of options outstanding and vested as of June 30, 2020 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 27,763 0.8 27,763 0.8 2.86 to 6.40 89,062 2.6 89,062 2.6 8.04 to 11.72 300,863 3.7 300,863 3.7 12.20 to 15.06 1,394,602 6.2 1,138,188 6.1 16.06 to 24.00 1,307,234 7.6 435,295 7.6 31.99 to 42.21 736,230 8.5 200,115 8.5 55.10 to 99.65 523,980 9.3 66,437 8.5 4,379,734 2,257,723
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 June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Fair market value of common stock $66.26 - 99.65 $55.10 - 72.67 $66.26 - 99.65 $39.76 - 72.67 Volatility 43% 40% 43% 40% Expected term 5-6 years 5-6 years 5-6 years 5-6 years Expected dividend yield n/a n/a n/a n/a Risk-free interest rate 0.33% - 0.51% 1.77% - 2.49% 0.33% - 1.25% 1.77% - 2.65%
Summary of RSU Activity	The following table summarizes RSU activity for the Company’s stock-based compensation plans for the six months ended June 30, 2020: Weighted Average Grant Date Fair Restricted Stock Units Value Per Share RSUs outstanding as of January 1, 2020 1,508,281 $ 51.52 RSUs granted 1,064,457 72.85 RSUs vested (244,307 ) 48.28 RSUs cancelled (95,473 ) 51.79 RSUs outstanding as of June 30, 2020 2,232,958 $ 62.03
2018 Employee Stock Purchase Plan
Summary of Fair Value Estimated Using Black-Scholes Option Pricing Model Assumptions	For the Three and Six Months Ended June 30, 2020 2019 Fair market value of common stock $85.14 $40.60 Volatility 32% 40% Expected term 0.5 years 0.5 years Expected dividend yield n/a n/a Risk-free interest rate 1.54% 2.59%

Net Loss Per Share Attributab_2

Net Loss Per Share Attributable to Common Shareholders (Tables)	6 Months Ended
	Jun. 30, 2020
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 June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Numerator: Net loss attributable to common shareholders $ (10,140 ) $ (14,237 ) $ (25,423 ) $ (24,591 ) Denominator: Weighted-average common shares outstanding-basic 78,924 71,568 78,414 69,983 Dilutive effect of share equivalents resulting from stock options, restricted stock units, and ESPP shares — — — — Weighted-average common shares outstanding-diluted 78,924 71,568 78,414 69,983 Net loss per common share, basic and diluted $ (0.13 ) $ (0.20 ) $ (0.32 ) $ (0.35 )
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 June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Options to purchase common shares 4,928 8,458 5,296 9,343 Unvested restricted stock units 2,204 1,213 1,879 924 Employee stock purchase plan shares 50 82 30 48 Total 7,182 9,753 7,205 10,315

Significant Accounting Polici_3

Significant Accounting Policies - Additional Information (Details)	3 Months Ended	6 Months Ended		12 Months Ended
	Jun. 30, 2019USD ($)$ / shares	Jun. 30, 2020USD ($)Segment	Jun. 30, 2019USD ($)$ / shares	Dec. 31, 2019USD ($)
Accounting Policies [Line Items]
Number of operating segment | Segment		1
Impairment of long-lived assets		$ 0		$ 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%
Contract payment net terms		30 days
Concessions and cancellations period allowed for standard subscription contract prior to adoption		60 days
Revenue recognition, contractual renewal period		1 year
Deferred commission amortized period		6 years
Other Noncurrent Assets | ASU 2018-15
Accounting Policies [Line Items]
Implementation cost capitalized		$ 1,500,000
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
Restatement Adjustment
Accounting Policies [Line Items]
Increase in sales and marketing expenses due to correction	$ 1,100,000		$ 2,200,000
Increase in net loss per share due to correction | $ / shares	$ 0.02		$ 0.03
Increase in accumulated deficit due to correction	$ 1,100,000		$ 2,200,000

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	Jun. 30, 2020	Dec. 31, 2019
Earnout Related to Business Combinations
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value, Liabilities	$ 33	$ 13,808
Significant Unobservable Inputs (Level 3) | Earnout Related to Business Combinations
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value, Liabilities	33	13,808
Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value, Assets	466,093	458,248
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	$ 466,093	$ 458,248

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		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnout liabilities:
Balance beginning of period	$ 3,599	$ 5,952	$ 13,808	$ 0
Fair value recorded at acquisition	0	0	0	5,952
Payments of earnout liabilities	(3,750)	0	(11,450)	0
Total unrealized net (gain) loss included in other (income) expense, net	184	476	(2,325)	476
Balance end of period	$ 33	$ 6,428	$ 33	$ 6,428

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details)	Jun. 30, 2020USD ($)
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

Balance Sheet Detail - Property

Balance Sheet Detail - Property and Equipment, Net (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 59,293	$ 58,215
Accumulated depreciation	(25,473)	(23,218)
Property and equipment—net	33,820	34,997
Computer Equipment and Software
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 14,565	15,636
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	$ 7,452	5,948
Property and equipment, Useful Life	6 years
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 6,930	6,589
Property and equipment, Useful Life	5 years
Office Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 862	1,058
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	$ 29,484	$ 28,984
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		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Balance Sheet Related Disclosures [Abstract]
Depreciation expense	$ 2.3	$ 2.2	$ 4.5	$ 4.2

Balance Sheet Detail - Prepaid

Balance Sheet Detail - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Prepaid Expense And Other Assets Current [Abstract]
Prepaid expenses	$ 15,101	$ 11,064
Accrued investment income	24	565
Deposits	427	197
Other	2,060	2,301
Total	$ 17,612	$ 14,127

Balance Sheet Detail - Accrued

Balance Sheet Detail - Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Accrued Liabilities Current [Abstract]
Accrued payroll and related taxes	$ 6,294		$ 3,985
Accrued federal, state, and local taxes	2,694		2,635
Accrued bonus	7,554		20,206
Self-insurance reserves	2,223		2,238
Employee stock purchase plan contributions	4,913		4,716
Accrued sales commissions	3,875		5,397
Accrued partner commissions	6,996		7,043
Contract liabilities	6,195	$ 6,330	5,197	$ 4,508	$ 4,208	$ 0
Accrued purchase price related to acquisitions	3,368		2,763
Other	7,642		7,924
Total	$ 51,754		$ 62,104

Acquisitions of Businesses - Ad

Acquisitions of Businesses - Additional Information (Details) $ / shares in Units, $ in Thousands	Jul. 31, 2019USD ($)OperatingMetric$ / sharesshares	Feb. 06, 2019USD ($)	Jan. 22, 2019USD ($)	Mar. 31, 2020USD ($)	Jun. 30, 2020USD ($)shares	Jan. 22, 2020USD ($)	Jan. 31, 2020USD ($)	Dec. 31, 2019USD ($)	Jun. 30, 2019USD ($)
Business Acquisition [Line Items]
Accrued value of earnout related to acquisition					$ 0				$ 5,952
Goodwill					101,198			$ 101,224
Earnout liability related to revenue					142			$ 4,120
Compli, Inc.
Business Acquisition [Line Items]
Total consideration transferred			$ 17,100
Consideration in cash			11,800			$ 1,600
Accrued value of earnout related to acquisition			3,800
Maximum payout earned							$ 4,000
Earnout recognized at fair value paid				$ 4,000
Goodwill			$ 12,807
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 payout earned		3,000
Goodwill		4,953
Additional cash to be paid, as consideration, after eighteen months		1,400
Indix Corporation | Within Three Months from Closing Date of Acquisition
Business Acquisition [Line Items]
Maximum payout earned		500
Indix Corporation | Within Seven Months from Closing Date of Acquisition
Business Acquisition [Line Items]
Maximum payout earned		650
Indix Corporation | Within 8 Months from Closing Date of Acquisition
Business Acquisition [Line Items]
Maximum payout earned		650
Indix Corporation | Within 12 Months from Closing Date of Acquisition
Business Acquisition [Line Items]
Maximum payout earned		$ 1,200
Indix Corporation | Current Accrued Earnout Liabilities
Business Acquisition [Line Items]
Portion of third milestone payment achieved					30
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 payout earned	10,000
Goodwill	22,376
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 | $ / shares	$ 83.97
Business combination number of operating metric targets used in earnout payment | OperatingMetric	2
Portway International, Inc | Operating Metrics Targets
Business Acquisition [Line Items]
Maximum payout earned	$ 7,500
Portway International, Inc | Revenue Targets
Business Acquisition [Line Items]
Maximum payout earned	$ 2,500
Earnout liability related to revenue					$ 0
Portway International, Inc | Operating Metrics Targets One
Business Acquisition [Line Items]
Common stock transferred, shares | shares					89,318
Common stock transferred, value					$ 7,500
Portway International, Inc | Maximum | Common Stock
Business Acquisition [Line Items]
Number of common shares that could be earned and transferred to seller | shares	119,090

Acquisitions of Businesses - Sc

Acquisitions of Businesses - Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019	Jul. 31, 2019	Feb. 06, 2019	Jan. 22, 2019
Assets acquired:
Goodwill	$ 101,198	$ 101,224
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 - Summary of Total Reve

Revenue - Summary of Total Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation Of Revenue [Line Items]
Revenues	$ 116,487	$ 91,299	$ 227,930	$ 176,269
U.S.
Disaggregation Of Revenue [Line Items]
Revenues	109,954	85,868	214,346	164,249
Non-U.S.
Disaggregation Of Revenue [Line Items]
Revenues	6,533	5,431	13,584	12,020
Subscription and Returns, Tax Determination | U.S.
Disaggregation Of Revenue [Line Items]
Revenues	61,701	48,707	120,672	93,938
Subscription and Returns, Tax Returns and Compliance Management | U.S.
Disaggregation Of Revenue [Line Items]
Revenues	40,864	30,686	80,297	57,372
Subscription and Returns,Interest Income on Funds Held for Customers | U.S.
Disaggregation Of Revenue [Line Items]
Revenues	58	812	584	1,541
Subscription and Returns
Disaggregation Of Revenue [Line Items]
Revenues	108,519	85,008	214,065	163,239
Subscription and Returns | U.S.
Disaggregation Of Revenue [Line Items]
Revenues	102,623	80,205	201,553	152,851
Professional Services
Disaggregation Of Revenue [Line Items]
Revenues	7,968	6,291	13,865	13,030
Professional Services | U.S.
Disaggregation Of Revenue [Line Items]
Revenues	$ 7,331	$ 5,663	$ 12,793	$ 11,398

Revenue - Summary of Activity I

Revenue - Summary of Activity Impacting Contract Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Contract Liabilities [Rollforward]
Balance beginning of period	$ 6,330	$ 4,208	$ 5,197	$ 0
Contract liabilities transferred to deferred revenue	(2,716)	(1,137)	(5,254)	(2,394)
Addition to contract liabilities	2,581	1,437	6,252	4,812
Balance end of period	6,195	4,508	6,195	4,508
Balance beginning of period	6,330	4,208	5,197	0
ASC 606
Contract Liabilities [Rollforward]
Adoption of ASC 606	$ 0	$ 2,090	$ 0	$ 2,090

Revenue - Summary of Activity_2

Revenue - Summary of Activity Impacting Deferred Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
ASC 606
Deferred Revenue Rollforward
Adoption of ASC 606	$ 0	$ 2,090	$ 0	$ 2,090
Deferred Revenue
Deferred Revenue Rollforward
Balance beginning of period	165,369	132,714	161,241	134,653
Revenue recognized	(116,487)	(91,299)	(227,930)	(176,269)
Additional amounts deferred	118,837	97,396	234,408	191,677
Balance end of period	167,719	138,811	167,719	138,811
Deferred Revenue | ASC 606
Deferred Revenue Rollforward
Adoption of ASC 606	$ 0	$ (11,250)	$ 0	$ (11,250)

Revenue - Additional Informatio

Revenue - Additional Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
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	$ 10,293,000		$ 9,279,000
Impairments of deferred contract costs	0	$ 0
Assets recognized related to costs to fulfill contracts	0	$ 0
Additional contractual obligations	40,800,000
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	$ 10,300,000

Revenue - Summary of Activity_3

Revenue - Summary of Activity Impacting Deferred Commissions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
ASC 606
Capitalized Contract Cost [Line Items]
Adoption of ASC 606	$ 0	$ 2,090	$ 0	$ 2,090
Deferred Commissions
Capitalized Contract Cost [Line Items]
Balance beginning of period	40,666	25,644	38,416	0
Additional commissions deferred	5,515	4,706	10,412	12,362
Amortization of deferred commissions	(2,825)	(1,706)	(5,472)	(2,985)
Balance end of period	43,356	28,644	43,356	28,644
Deferred Commissions | ASC 606
Capitalized Contract Cost [Line Items]
Adoption of ASC 606	$ 0	$ 19,267	$ 0	$ 19,267

Revenue - Additional Informat_2

Revenue - Additional Information (Details 1) $ in Millions	Jun. 30, 2020USD ($)
Revenue Initial Application Period Cumulative Effect Transition [Line Items]
Additional contractual obligations	$ 40.8
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-07-01
Revenue Initial Application Period Cumulative Effect Transition [Line Items]
Additional contractual obligations	$ 40.4
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	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Finite Lived Intangible Assets [Line Items]
Gross	$ 57,507	$ 58,041
Accumulated Amortization	(38,188)	(35,109)
Net	19,319	22,932
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Gross	20,241	20,390
Accumulated Amortization	(12,469)	(11,403)
Net	$ 7,772	$ 8,987
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	$ 36,068	$ 36,422
Accumulated Amortization	(24,664)	(22,659)
Net	$ 11,404	$ 13,763
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	$ 759	$ 777
Accumulated Amortization	(626)	(612)
Net	$ 133	$ 165
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	$ 439	$ 452
Accumulated Amortization	(429)	(435)
Net	$ 10	$ 17
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)	Oct. 31, 2018USD ($)	Jun. 30, 2020USD ($)	Jun. 30, 2019USD ($)	Jun. 30, 2020USD ($)Unit	Jun. 30, 2019USD ($)	Dec. 31, 2019USD ($)
Finite Lived Intangible Assets [Line Items]
Finite-lived intangible assets, amortization expense		$ 1,600,000	$ 1,800,000	$ 3,500,000	$ 3,500,000
Number of goodwill impairment reporting units | Unit				3
Goodwill impairment charge	$ 0
Goodwill		101,198,000		$ 101,198,000		$ 101,224,000
Brazilian Reporting Unit
Finite Lived Intangible Assets [Line Items]
Goodwill		$ 0		$ 0

Intangible Assets - Schedule _2

Intangible Assets - Schedule of Changes in Carrying Amount of Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2020USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Balance—December 31, 2019	$ 101,224
Cumulative translation adjustments	(26)
Balance—June 30, 2020	$ 101,198

Leases - Additional Information

Leases - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Leases [Abstract]
Total lease cost, net of sublease income	$ 3,900	$ 2,900	$ 7,700	$ 5,500
Sublease income	$ 400	$ 400	800	700
Increase in operating lease right-of-use assets			$ 6,562	$ 2,839

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Details)	6 Months Ended
	Jun. 30, 2020USD ($)
Loss Contingencies [Line Items]
Loss contingency, inestimable loss	The Company has not recorded an accrual related to these arrangements as of June 30, 2020 because it has not determined that a loss is probable.
Maximum
Loss Contingencies [Line Items]
Estimated range of loss	$ 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	Jun. 30, 2020
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%

Shareholders' Equity - Addition

Shareholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2019USD ($)$ / sharesshares	Jun. 30, 2019USD ($)$ / sharesshares	Jun. 30, 2020USD ($)Class$ / sharesshares	Jun. 30, 2019USD ($)$ / shares	Dec. 31, 2019$ / sharesshares
Class Of Stock [Line Items]
Number of classes of stock | Class			2
Capital stock, authorized shares			620,000,000
Common stock, shares authorized			600,000,000		600,000,000
Common stock, par value | $ / shares			$ 0.0001		$ 0.0001
Preferred stock, shares authorized			20,000,000		20,000,000
Preferred stock, par value | $ / shares			$ 0.0001		$ 0.0001
Proceeds from common stock offering, net of underwriting discounts | $			$ 0	$ 274,705
Offering expenses paid and payable | $		$ 1,198
Common Stock
Class Of Stock [Line Items]
Follow-on public offering		4,133,984
Common Stock | Follow-on Public Offering
Class Of Stock [Line Items]
Follow-on public offering	4,133,984
Common stock price per share | $ / shares	$ 69.40	$ 69.40		$ 69.40
Proceeds from common stock offering, net of underwriting discounts | $	$ 274,700
Offering expenses paid and payable | $	$ 1,200
Common Stock | Underwriters
Class Of Stock [Line Items]
Follow-on public offering	539,215

Shareholders' Equity - Summary

Shareholders' Equity - Summary of Changes of Shareholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Class Of Stock [Line Items]
Beginning balance	$ 476,294	$ 463,722	$ 167,862	$ 109,553	$ 463,722	$ 109,553
Impact of adoption of new accounting pronouncements - ASC 606 (see Note 2)				27,622
Proceeds from common stock offering, net of underwriting discounts			274,705
Public offering costs			(1,198)
Exercise of stock options	17,495	7,928	13,106	27,311
Exercise of stock options, Shares					1,650,653
Shares tendered for cashless redemption of stock-based awards				(93)
Stock-based compensation cost	12,368	9,749	9,439	6,571
Shares issued under employee stock purchase plan		5,716		7,664
Shares issued related to business combination earnouts	3,750	3,750
Shares issued to purchase intangible assets		87		50	$ 87	50
Gain (Loss) on translation adjustment	435	625	276	(462)	1,060	(186)
Net loss	(10,140)	(15,283)	(14,237)	(10,354)	(25,423)	(24,591)
Ending balance	500,202	476,294	449,953	167,862	500,202	449,953
Common Stock
Class Of Stock [Line Items]
Beginning balance	$ 8	$ 8	$ 7	$ 7	$ 8	$ 7
Beginning balance, Shares	78,294,687	77,447,620	69,903,447	66,768,563	77,447,620	66,768,563
Proceeds from common stock offering, net of underwriting discounts			$ 1
Proceeds from common stock offering, net of underwriting discounts, shares			4,133,984
Exercise of stock options, Shares	1,117,805	532,848	1,368,510	2,763,291
Vesting of restricted stock units	57,832	186,475	902
Shares tendered for cashless redemption of stock-based awards, Shares				(2,805)
Shares issued under employee stock purchase plan, Shares		81,894		372,764
Shares issued related to business combination earnouts, Shares	44,659	44,659
Shares issued to purchase intangible assets, Shares		1,191	37,708	1,634
Ending balance	$ 8	$ 8	$ 8	$ 7	$ 8	$ 8
Ending balance, Shares	79,514,983	78,294,687	75,444,551	69,903,447	79,514,983	75,444,551
Additional Paid-In Capital
Class Of Stock [Line Items]
Beginning balance	$ 1,003,857	$ 976,627	$ 640,996	$ 599,493	$ 976,627	$ 599,493
Proceeds from common stock offering, net of underwriting discounts			274,704
Public offering costs			(1,198)
Exercise of stock options	17,495	7,928	13,106	27,311
Shares tendered for cashless redemption of stock-based awards				(93)
Stock-based compensation cost	12,368	9,749	9,439	6,571
Shares issued under employee stock purchase plan		5,716		7,664
Shares issued related to business combination earnouts	3,750	3,750
Shares issued to purchase intangible assets		87		50
Ending balance	1,037,470	1,003,857	937,047	640,996	1,037,470	937,047
Accumulated Other Comprehensive Income (Loss)
Class Of Stock [Line Items]
Beginning balance	(2,094)	(2,719)	(2,807)	(2,345)	(2,719)	(2,345)
Gain (Loss) on translation adjustment	435	625	276	(462)
Ending balance	(1,659)	(2,094)	(2,531)	(2,807)	(1,659)	(2,531)
Accumulated Deficit
Class Of Stock [Line Items]
Beginning balance	(525,477)	(510,194)	(470,334)	(487,602)	(510,194)	(487,602)
Impact of adoption of new accounting pronouncements - ASC 606 (see Note 2)				27,622
Net loss	(10,140)	(15,283)	(14,237)	(10,354)
Ending balance	$ (535,617)	$ (525,477)	$ (484,571)	$ (470,334)	$ (535,617)	$ (484,571)

Equity Incentive Plans - Additi

Equity Incentive Plans - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares subject to outstanding awards	4,379,734		4,379,734		5,884,742
Total intrinsic value of options exercised			$ 131.2	$ 192.4
Weighted average grant date fair value of options granted			$ 30.06	$ 18.93
Number of shares, vested			963,748
Number of options unvested	2,122,011		2,122,011
Contractual life			10 years
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term	5 years	5 years	5 years	5 years
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term	6 years	6 years	6 years	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	$ 28.8		$ 28.8
Unrecognized compensation expense expected to be recognized over weighted average period			2 years 6 months
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 3 months 18 days
Total unrecognized compensation expense expected to be recognized	$ 126.6		$ 126.6
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	3,493,168		3,493,168
Shares available for future issuance	9,111,608		9,111,608
2006 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares subject to outstanding awards	3,119,524		3,119,524
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	$ 0.3		$ 0.3
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%
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	1,851,268		1,851,268
Common stock, shares purchased	0		81,894

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		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation cost	$ 12,368	$ 9,439	$ 22,117	$ 16,010
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation cost	4,159	4,196	8,008	8,113
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation cost	7,487	4,551	12,420	6,249
Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation cost	$ 722	$ 692	$ 1,689	$ 1,648

Equity Incentive Plans - Summ_2

Equity Incentive Plans - Summary of Stock Option Activity (Details) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020USD ($)$ / sharesshares	Dec. 31, 2019USD ($)$ / sharesshares
Shares
Options outstanding beginning balance | shares	5,884,742
Options granted | shares	245,062
Options exercised | shares	(1,650,653)
Options cancelled or expired | shares	(99,417)
Options outstanding ending balance | shares	4,379,734	5,884,742
Options exercisable | shares	2,257,723
Weighted Average Exercise Price
Options outstanding beginning balance | $ / shares	$ 20.09
Options granted | $ / shares	71.75
Options exercised | $ / shares	15.40
Options cancelled or expired | $ / shares	15.89
Options outstanding ending balance | $ / shares	24.84	$ 20.09
Options exercisable | $ / shares	$ 16.51
Weighted Average Remaining Contractual Life (Years)
Options outstanding	7 years 1 month 6 days	7 years 2 months 19 days
Options exercisable	6 years 1 month 17 days
Aggregate Intrinsic Value
Options outstanding | $	$ 474,100	$ 312,838
Options exercisable | $	$ 263,195

Equity Incentive Plans - Summ_3

Equity Incentive Plans - Summary of Options Outstanding and Vested (Details)	6 Months Ended
	Jun. 30, 2020$ / sharesshares
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Option Outstanding, Number Outstanding	4,379,734
Options Vested and Exercisable, Number Vested and Exercisable	2,257,723
Options Vested and Exercisable, Weighted Average Life (in Years)	6 years 1 month 17 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	27,763
Options Outstanding, Weighted Average Life (in Years)	9 months 18 days
Options Vested and Exercisable, Number Vested and Exercisable	27,763
Options Vested and Exercisable, Weighted Average Life (in Years)	9 months 18 days
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	89,062
Options Outstanding, Weighted Average Life (in Years)	2 years 7 months 6 days
Options Vested and Exercisable, Number Vested and Exercisable	89,062
Options Vested and Exercisable, Weighted Average Life (in Years)	2 years 7 months 6 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	300,863
Options Outstanding, Weighted Average Life (in Years)	3 years 8 months 12 days
Options Vested and Exercisable, Number Vested and Exercisable	300,863
Options Vested and Exercisable, Weighted Average Life (in Years)	3 years 8 months 12 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	1,394,602
Options Outstanding, Weighted Average Life (in Years)	6 years 2 months 12 days
Options Vested and Exercisable, Number Vested and Exercisable	1,138,188
Options Vested and Exercisable, Weighted Average Life (in Years)	6 years 1 month 6 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	1,307,234
Options Outstanding, Weighted Average Life (in Years)	7 years 7 months 6 days
Options Vested and Exercisable, Number Vested and Exercisable	435,295
Options Vested and Exercisable, Weighted Average Life (in Years)	7 years 7 months 6 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	736,230
Options Outstanding, Weighted Average Life (in Years)	8 years 6 months
Options Vested and Exercisable, Number Vested and Exercisable	200,115
Options Vested and Exercisable, Weighted Average Life (in Years)	8 years 6 months
55.10 to 99.65
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Exercise Prices, Low | $ / shares	$ 55.10
Exercise Prices, High | $ / shares	$ 99.65
Option Outstanding, Number Outstanding	523,980
Options Outstanding, Weighted Average Life (in Years)	9 years 3 months 18 days
Options Vested and Exercisable, Number Vested and Exercisable	66,437
Options Vested and Exercisable, Weighted Average Life (in Years)	8 years 6 months

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		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Volatility	43.00%	40.00%	43.00%	40.00%
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Risk-free interest rate, minimum	0.33%	1.77%	0.33%	1.77%
Risk-free interest rate, maximum	0.51%	2.49%	1.25%	2.65%
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Fair market value of common stock	$ 66.26	$ 55.10	$ 66.26	$ 39.76
Expected term	5 years	5 years	5 years	5 years
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Fair market value of common stock	$ 99.65	$ 72.67	$ 99.65	$ 72.67
Expected term	6 years	6 years	6 years	6 years

Equity Incentive Plans - Summ_5

Equity Incentive Plans - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs)	6 Months Ended
	Jun. 30, 2020$ / sharesshares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
RSUs outstanding as of January 1, 2020, Shares | shares	1,508,281
RSUs granted, Shares | shares	1,064,457
RSUs vested, Shares | shares	(244,307)
RSUs cancelled, Shares | shares	(95,473)
RSUs outstanding as of June 30, 2020, Shares | shares	2,232,958
RSUs outstanding as of January 1, 2020, Weighted average grant date fair value per share | $ / shares	$ 51.52
RSUs granted, Weighted average grant date fair value per share | $ / shares	72.85
RSUs vested, Weighted average grant date fair value per share | $ / shares	48.28
RSUs cancelled, Weighted average grant date fair value per share | $ / shares	51.79
RSUs outstanding as of June 30, 2020, Weighted average grant date fair value per share | $ / shares	$ 62.03

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		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Volatility	43.00%	40.00%	43.00%	40.00%
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
2018 Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Fair market value of common stock	$ 85.14	$ 40.60	$ 85.14	$ 40.60
Volatility	32.00%	40.00%	32.00%	40.00%
Expected term	6 months	6 months	6 months	6 months
Risk-free interest rate	1.54%	2.59%	1.54%	2.59%

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				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Numerator:
Net loss attributable to common shareholders	$ (10,140)	$ (15,283)	$ (14,237)	$ (10,354)	$ (25,423)	$ (24,591)
Denominator:
Weighted-average common shares outstanding-basic	78,924		71,568		78,414	69,983
Dilutive effect of share equivalents resulting from stock options, restricted stock units, and ESPP shares	0		0		0	0
Weighted-average common shares outstanding-diluted	78,924		71,568		78,414	69,983
Net loss per common share, basic and diluted	$ (0.13)		$ (0.20)		$ (0.32)	$ (0.35)

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		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share amount	7,182	9,753	7,205	10,315
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	4,928	8,458	5,296	9,343
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	2,204	1,213	1,879	924
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	50	82	30	48