Document and Entity Information
Document and Entity Information shares in Millions | 3 Months Ended |
Mar. 31, 2017shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | SERVICENOW, INC. |
Trading Symbol | NOW |
Entity Central Index Key | 1,373,715 |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2017 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q1 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 169.7 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 439,915 | $ 401,238 |
Short-term investments | 535,399 | 498,124 |
Accounts receivable, net | 278,107 | 322,757 |
Current portion of deferred commissions | 78,786 | 76,780 |
Prepaid expenses and other current assets | 64,048 | 43,636 |
Total current assets | 1,396,255 | 1,342,535 |
Deferred commissions, less current portion | 61,648 | 61,990 |
Long-term investments | 326,261 | 262,658 |
Property and equipment, net | 189,659 | 181,620 |
Intangible assets, net | 67,755 | 65,854 |
Goodwill | 96,914 | 82,534 |
Other assets | 31,771 | 36,576 |
Total assets | 2,170,263 | 2,033,767 |
Current liabilities: | ||
Accounts payable | 33,658 | 38,080 |
Accrued expenses and other current liabilities | 144,594 | 171,636 |
Current portion of deferred revenue | 961,553 | 861,782 |
Total current liabilities | 1,139,805 | 1,071,498 |
Deferred revenue, less current portion | 50,440 | 33,319 |
Convertible senior notes, net | 516,490 | 507,812 |
Other long-term liabilities | 36,189 | 34,177 |
Total liabilities | 1,742,924 | 1,646,806 |
Stockholders’ equity: | ||
Common stock | 170 | 167 |
Additional paid-in capital | 1,476,899 | 1,405,317 |
Accumulated other comprehensive loss | (11,678) | (21,133) |
Accumulated deficit | (1,038,052) | (997,390) |
Total stockholders’ equity | 427,339 | 386,961 |
Total liabilities and stockholders’ equity | $ 2,170,263 | $ 2,033,767 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Revenues: | |||
Subscription | $ 376,135 | $ 267,422 | |
Professional services and other | 40,648 | 38,457 | |
Total revenues | 416,783 | 305,879 | |
Cost of revenues: | |||
Subscription | [1] | 70,375 | 52,781 |
Professional services and other | [1] | 46,072 | 41,479 |
Total cost of revenues | [1] | 116,447 | 94,260 |
Gross profit | 300,336 | 211,619 | |
Operating expenses: | |||
Sales and marketing | [1] | 212,086 | 158,610 |
Research and development | [1] | 84,489 | 65,924 |
General and administrative | [1] | 46,251 | 41,237 |
Legal settlements | [1] | 0 | 270,000 |
Total operating expenses | [1] | 342,826 | 535,771 |
Loss from operations | (42,490) | (324,152) | |
Interest expense | (8,678) | (8,109) | |
Interest income and other income (expense), net | 7,716 | 702 | |
Loss before income taxes | (43,452) | (331,559) | |
Provision for (benefit from) income taxes | (2,790) | 1,773 | |
Net loss | $ (40,662) | $ (333,332) | |
Net loss per share, basic and diluted (in USD per share) | $ (0.24) | $ (2.06) | |
Weighted-average shares used to compute net loss per share - basic and diluted | 168,742,366 | 162,067,108 | |
Other comprehensive income: | |||
Foreign currency translation adjustments | $ 1,872 | $ 680 | |
Unrealized gain on investments, net of tax | 7,583 | 1,633 | |
Other comprehensive income, net of tax | 9,455 | 2,313 | |
Comprehensive loss | $ (31,207) | $ (331,019) | |
[1] | Includes stock-based compensation as follows: Three Months Ended March 31, 2017 2016 Cost of revenues: Subscription $ 7,938 $ 6,607 Professional services and other 6,949 6,759 Sales and marketing 38,401 30,998 Research and development 21,801 20,533 General and administrative 14,854 10,411 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cost of revenues - subscription | ||
Stock-based compensation | $ 7,938 | $ 6,607 |
Cost of revenues - professional services and other | ||
Stock-based compensation | 6,949 | 6,759 |
Sales and Marketing | ||
Stock-based compensation | 38,401 | 30,998 |
Research And Development | ||
Stock-based compensation | 21,801 | 20,533 |
General and Administrative Expense | ||
Stock-based compensation | $ 14,854 | $ 10,411 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (40,662) | $ (333,332) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 25,226 | 17,452 |
Amortization of premiums on investments | 945 | 1,490 |
Amortization of deferred commissions | 26,180 | 18,033 |
Amortization of debt discount and issuance costs | 8,678 | 8,109 |
Stock-based compensation | 89,943 | 75,308 |
Deferred income tax | (3,291) | 0 |
Other | (2,218) | (330) |
Changes in operating assets and liabilities, net of effect of business combinations: | ||
Accounts receivable | 47,021 | 15,811 |
Deferred commissions | (27,195) | (23,971) |
Prepaid expenses and other assets | (22,772) | (19,808) |
Accounts payable | 675 | 3,387 |
Deferred revenue | 112,447 | 70,803 |
Accrued expenses and other liabilities | (27,553) | 245,735 |
Net cash provided by operating activities | 187,424 | 78,687 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (33,186) | (29,077) |
Business combinations, net of cash acquired | (15,035) | (500) |
Purchases of other intangibles | 0 | (5,750) |
Purchases of investments | (222,596) | (180,365) |
Purchases of strategic investment | (1,000) | 0 |
Sales of investments | 21,789 | 92,885 |
Maturities of investments | 122,263 | 91,858 |
Restricted cash | (689) | (457) |
Net cash used in investing activities | (128,454) | (31,406) |
Cash flows from financing activities: | ||
Proceeds from employee stock plans | 34,807 | 19,873 |
Taxes paid related to net share settlement of equity awards | (53,023) | (28,453) |
Payments on financing obligation | (1,415) | (110) |
Net cash used in financing activities | (19,631) | (8,690) |
Foreign currency effect on cash and cash equivalents | (662) | 2,554 |
Net increase in cash and cash equivalents | 38,677 | 41,145 |
Cash and cash equivalents at beginning of period | 401,238 | 412,305 |
Cash and cash equivalents at end of period | 439,915 | 453,450 |
Non-cash investing and financing activities: | ||
Property and equipment included in accounts payable and accrued expenses | $ 8,857 | $ 8,393 |
Description of the Business
Description of the Business | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | iceNow is a leading provider of enterprise cloud computing solutions that define, structure, manage and automate services for global enterprises. Our mission is to help our customers improve service levels and reduce costs while scaling and automating their businesses. We typically deliver our software via the Internet as a service, through an easy-to-use, consumer product-like interface, which means it can be easily configured and rapidly deployed. In a minority of cases, we deploy our service on-premise at a customer data center to support a customer's unique regulatory or security requirements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for fair statement of results for the interim periods presented have been included. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the year ended December 31, 2017 or for other interim periods or for future years. The condensed consolidated balance sheet as of December 31, 2016 is derived from audited financial statements as of that date; however, it does not include all of the information and footnotes required by GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 , which was filed with the SEC on February 28, 2017. Principles of Consolidation The condensed consolidated financial statements have been prepared in conformity with GAAP, and include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. Prior Period Reclassification Certain reclassifications of prior period amounts have been made in Note 16 to conform to the current period presentation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as reported amounts of revenues and expenses during the reporting period. Such management estimates and assumptions include, but are not limited to, the best estimate of selling price of the deliverables included in multiple elements revenue arrangements, the fair value of assets acquired and liabilities assumed for business combinations, stock-based compensation expenses, the assessment of the useful life and recoverability of our property and equipment, goodwill and identifiable intangible assets, future taxable income and legal contingencies. Actual results could differ from those estimates. New Accounting Pronouncements Pending Adoption In March 2017, the FASB issued ASU 2017-08, "Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities," which shortens the amortization period for certain callable debt securities held at a premium to require such premiums to be amortized to the earliest call date unless applicable guidance related to certain pools of securities is applied to consider estimated prepayments. This new standard is effective for our interim and annual periods beginning January 1, 2019, and early adoption is permitted. We do not anticipate that this standard will have a material impact on our condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment," which eliminates Step 2 from the goodwill impairment test. This standard requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. In addition, this new standard eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment. This new standard is effective for our interim and annual periods beginning January 1, 2020, and early adoption is permitted. We do not anticipate that this standard will have a material impact on our condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. This new standard is effective for our interim and annual periods beginning January 1, 2018, and early adoption is permitted. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)," which requires that amounts generally described as restricted cash or restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This new standard is effective for our interim and annual periods beginning January 1, 2018, and early adoption is permitted. We do not anticipate that this standard will have a material impact on our condensed consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory," which includes a revision of the accounting for the income tax consequences of intra-entity transfers of assets other than inventory to reduce the complexity in accounting standards. This new standard is effective for our interim and annual periods beginning January 1, 2018, and early adoption is permitted. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," which provides guidance on eight specific cash flow issues. Among these issues, this standard requires, at the settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowings, the portion of the cash payment attributable to the accreted interest related to the debt discount to be classified as cash flows for operating activities, and the portion of the cash payments attributable to the principal to be classified as cash outflows for financing activities. This new standard is effective for our interim and annual periods beginning January 1, 2018, and early adoption is permitted. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. This new standard is effective for our interim and annual periods beginning January 1, 2020. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires lessees to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets, and to recognize on the income statement the expenses in a manner similar to current practice. This new standard is effective for our interim and annual periods beginning January 1, 2019, and early adoption is permitted. While we are currently evaluating the impact of this standard on our condensed consolidated financial statements, we anticipate that this standard will have a material impact on our condensed consolidated balance sheets given that we had operating lease commitments of approximately $353 million as of March 31, 2017 . However, we do not anticipate that this standard will have a material impact on our condensed consolidated statements of comprehensive loss since the expense recognition under this new standard will be similar to current practice. In January 2016, the FASB issued ASU 2016-01, "Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This new standard is effective for our interim and annual periods beginning January 1, 2018. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." Under this new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, this standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has recently issued several amendments to the standard, including clarification on accounting for licenses of intellectual property and identifying performance obligations. This new standard is effective for our interim and annual periods beginning January 1, 2018, and early adoption beginning January 1, 2017 is permitted. We will adopt this new standard beginning January 1, 2018. The Topic 606 guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We currently anticipate adopting the standard using the full retrospective method to restate each prior reporting period presented. Given the scope of work required to implement the recognition and disclosure requirements under the Topic 606 standard, we began our assessment process in 2014 and have since made significant progress, including the identification of necessary changes to our policies, processes, systems and controls. We do not expect the new standard to have a material impact on the timing of revenue recognition related to our cloud-based subscription offerings. However, we expect the new standard to have a material impact on the timing of revenue and expense recognition for our contracts related to on-premises offerings, in which we grant customers the right to deploy our subscription service on the customer’s own servers, without significant penalty. Under this new standard, the requirement to have vendor specific objective evidence (VSOE) for undelivered elements is eliminated. As such, we may be required to recognize as revenue a portion of the sales price upon delivery of the software, compared to the current practice of recognizing the entire sales price ratably over an estimated subscription period due to the lack of VSOE. To the extent the amounts recognized as revenue have not been billed, the accrued revenue will be recorded as unbilled receivables on our condensed consolidated balance sheets. We currently believe that our total revenues reported for the year ended December 31, 2016 would have increased by approximately $22 to $27 million on a pro forma basis if the new standard had been applied for the entire 2016 fiscal year starting on January 1, 2016. In addition, we expect the new standard to change the way we account for commissions paid on both our on-premises offerings and our cloud-based subscription offerings. Our current practice is to defer only direct and incremental commission costs to obtain a contract and amortize those costs over the contract term for both our on-premises offerings and our cloud-based subscription offerings. Under the new standard, we will defer all incremental commission costs to obtain customer contracts for both our on-premises offerings and our cloud-based subscription offerings. Commissions allocated to the software element of our on-premise offerings will be expensed immediately under the new standard, while commissions allocated to the support element of our on-premise offerings as well as commissions paid on our cloud-based subscription offerings will be amortized over an expected period of benefit, which we have determined to be approximately five years . As a result, we currently expect the deferred commissions asset to increase and the related amortization expense in each reporting period to decrease under the new standard. The aggregate impact resulting from changes in the way we account for commission expense for both our cloud-based subscription offerings and our on-premise offerings is expected to reduce our sales and marketing expenses by approximately $22 to $27 million for the year ended December 31, 2016. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2017 | |
Available-for-sale Securities [Abstract] | |
Investments | Investments Marketable Securities The following is a summary of our available-for-sale investment securities, excluding those securities classified within cash and cash equivalents on the condensed consolidated balance sheets (in thousands): March 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Commercial paper $ 66,672 $ — $ — $ 66,672 Corporate notes and bonds 679,589 143 (1,197 ) 678,535 Certificates of deposit 44,251 — — 44,251 U.S. government agency securities 50,638 1 (107 ) 50,532 Marketable equity securities 10,000 11,670 — 21,670 Total available-for-sale securities $ 851,150 $ 11,814 $ (1,304 ) $ 861,660 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Commercial paper $ 56,839 $ — $ — $ 56,839 Corporate notes and bonds 628,054 91 (1,590 ) 626,555 Certificates of deposit 35,355 — — 35,355 U.S. government agency securities 42,088 7 (62 ) 42,033 Total available-for-sale securities $ 762,336 $ 98 $ (1,652 ) $ 760,782 As of March 31, 2017 , the contractual maturities of our available-for-sale investment securities, excluding marketable equity securities, did not exceed 24 months . The fair values of these securities, by remaining contractual maturity, are as follows (in thousands): March 31, 2017 Due in 1 year or less $ 513,729 Due in 1 year through 2 years 326,261 Total $ 839,990 The following table shows the fair values and the gross unrealized losses of our available-for-sale investment securities, classified by the length of time that the securities have been in a continuous unrealized loss position, and aggregated by investment types (in thousands): March 31, 2017 Less than 12 Months 12 Months or Greater Total Fair Value Gross Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate notes and bonds $ 537,276 $ (1,171 ) $ 26,908 $ (26 ) $ 564,184 $ (1,197 ) U.S. government agency securities 48,536 (107 ) — — 48,536 (107 ) Total $ 585,812 $ (1,278 ) $ 26,908 $ (26 ) $ 612,720 $ (1,304 ) December 31, 2016 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate notes and bonds $ 492,503 $ (1,530 ) $ 47,940 $ (60 ) $ 540,443 $ (1,590 ) U.S. government agency securities 30,033 (62 ) — — 30,033 (62 ) Total $ 522,536 $ (1,592 ) $ 47,940 $ (60 ) $ 570,476 $ (1,652 ) There were no impairments considered "other-than-temporary" as it is more likely than not we will hold the securities until maturity or a recovery of the cost basis. Strategic Investments We account for our investments in non-marketable debt and equity securities of certain privately-held companies under the cost method, as we have less than a 20% ownership interest and we do not have the ability to exercise significant influence over the operations of these companies. We utilize Level 3 inputs as part of our impairment analysis, including pre- and post-money valuations of recent financing events and the impact of those on its fully diluted ownership percentages, as well as other available information such as the issuer's financial results and earnings trends to identify indicators of other-than-temporary impairment. We have not recorded any impairment charges for any of our investments in privately-held companies and the carrying value of these investments included in Other assets on the condensed consolidated balance sheets was $2.0 million and $11.0 million as of March 31, 2017 and December 31, 2016 , respectively. During the three months ended March 31, 2017 , we reclassified $10.0 million of non-marketable equity securities (at cost) to Short-term investments on our condensed consolidated balance sheets due to an initial public offering by the investee, and recorded an unrealized gain of $11.7 million |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at March 31, 2017 (in thousands): Level 1 Level 2 Total Cash equivalents: Money market funds $ 96,840 $ — $ 96,840 Certificates of deposit — 1,500 1,500 Short-term investments: Commercial paper — 66,672 66,672 Corporate notes and bonds — 381,042 381,042 Certificates of deposit — 37,655 37,655 U.S. government agency securities — 28,360 28,360 Marketable equity securities 21,670 — 21,670 Long-term investments: Corporate notes and bonds — 297,493 297,493 Certificates of deposit — 6,596 6,596 U.S. government agency securities — 22,172 22,172 Total $ 118,510 $ 841,490 $ 960,000 The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at December 31, 2016 (in thousands): Level 1 Level 2 Total Cash equivalents: Money market funds $ 165,627 $ — $ 165,627 Short-term investments: Commercial paper — 56,839 56,839 Corporate notes and bonds — 388,429 388,429 Certificates of deposit — 35,355 35,355 U.S. government agency securities — 17,501 17,501 Long-term investments: Corporate notes and bonds — 238,125 238,125 U.S. government agency securities — 24,533 24,533 Total $ 165,627 $ 760,782 $ 926,409 We determine the fair value of our security holdings based on pricing from our service provider and market prices from industry-standard independent data providers. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs), such as yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations 2017 Business Combination DxContinuum On January 20, 2017, we completed the acquisition of a privately-held company, DxContinuum, Inc. (DxContinuum), by acquiring all issued and outstanding common shares of DxContinuum for approximately $15.0 million in an all-cash transaction to enhance the predictive capabilities of our solutions. The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date: Purchase Price Allocation (in thousands) Useful Life (in years) Net tangible assets acquired $ 37 Intangible assets: Developed technology 6,400 5 Goodwill 11,159 Net deferred tax liabilities (1) (2,561 ) Total purchase price $ 15,035 (1) Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. We believe the goodwill represents the synergies expected from expanded market opportunities when integrating DxContinuum technologies with our offerings. The goodwill balance is not deductible for income tax purposes. The results of operations of DxContinuum have been included in our condensed consolidated financial statements from the date of purchase. The business combination did not have a material impact on our condensed consolidated financial statements, and therefore historical and pro forma disclosures have not been presented. 2016 Business Combinations BrightPoint Security On June 3, 2016, we completed the acquisition of a privately-held company, BrightPoint Security, Inc. (BrightPoint), by acquiring all issued and outstanding common shares of BrightPoint for approximately $19.6 million in an all-cash transaction to expand our Security Operations solutions. The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date: Purchase Price Allocation (in thousands) Useful Life (in years) Intangible assets: Developed technology $ 8,100 6 Customer contracts and related relationships 500 1.5 Goodwill 15,258 Net tangible liabilities acquired (1,339 ) Net deferred tax liabilities (1) (2,890 ) Total purchase price $ 19,629 (1) Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets. ITapp On April 8, 2016, we completed the acquisition of a privately-held company, ITapp Inc. (ITapp), by acquiring all issued and outstanding common shares of ITapp for approximately $14.5 million in an all-cash transaction to expand our IT Operations Management solutions. The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date: Purchase Price Allocation (in thousands) Useful Life (in years) Net tangible assets acquired $ 140 Intangible assets: Developed technology 4,700 5 Customer contracts and related relationships 200 1.5 Goodwill 11,437 Net deferred tax liabilities (2,015 ) Total purchase price $ 14,462 (1) Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets. For both business combinations, the excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. We believe the goodwill represents the synergies expected from expanded market opportunities when integrating the acquired technologies with our offerings. The goodwill balance for both business combinations is not deductible for income tax purposes. Aggregate acquisition-related costs of $1.0 million are included in general and administrative expenses in our condensed consolidated statements of comprehensive loss. The results of operations of both BrightPoint and ITapp have been included in our condensed consolidated financial statements from their respective dates of purchase. The following unaudited pro forma consolidated financial information combines the results of operations from us, BrightPoint and ITapp for the three months ended March 31, 2016 , as if the acquisitions of BrightPoint and ITapp had occurred on January 1, 2016 (in thousands, except share and per share data): Three Months Ended March 31, 2016 (unaudited) Revenue $ 306,268 Net loss $ (335,625 ) Weighted-average shares used to compute net loss per share - basic and diluted 162,067,108 Net loss per share - basic and diluted $ (2.07 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill balances are presented below (in thousands): Carrying Amount Balance as of December 31, 2016 $ 82,534 Goodwill acquired 11,159 Foreign currency translation adjustments 3,221 Balance as of March 31, 2017 $ 96,914 Intangible assets consist of the following (in thousands): March 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 85,899 $ (34,981 ) $ 50,918 Patents 17,610 (1,369 ) 16,241 Other 1,775 (1,179 ) 596 Total intangible assets 105,284 (37,529 ) 67,755 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 79,206 $ (30,858 ) $ 48,348 Patents 17,610 (867 ) 16,743 Other 1,775 (1,012 ) 763 Total intangible assets $ 98,591 $ (32,737 ) $ 65,854 Amortization expense for intangible assets for the three months ended March 31, 2017 and 2016 was approximately $4.7 million and $2.9 million , respectively. The following table presents the estimated future amortization expense related to intangible assets held at March 31, 2017 (in thousands): Years Ending December 31, 2017 $ 13,503 2018 17,091 2019 17,011 2020 7,363 2021 5,458 Thereafter 7,329 Total future amortization expense $ 67,755 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net consists of the following (in thousands): March 31, December 31, 2017 2016 Computer equipment $ 240,617 $ 222,648 Leasehold improvements 37,357 37,095 Computer software 34,879 32,132 Furniture and fixtures 33,556 31,574 Building 6,788 6,379 Construction in progress 3,431 2,535 356,628 332,363 Less: Accumulated depreciation (166,969 ) (150,743 ) Total property and equipment, net $ 189,659 $ 181,620 Construction in progress consists primarily of leasehold improvements and in-process software development costs. Depreciation expense for the three months ended March 31, 2017 and 2016 was $20.4 million and $14.6 million |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Summary Of Accrued Expenses And Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): March 31, December 31, 2017 2016 Taxes payable $ 19,360 $ 19,472 Bonuses and commissions 43,803 67,259 Accrued compensation 37,490 30,816 Other employee related liabilities 20,081 28,812 Other 23,860 25,277 Total accrued expenses and other current liabilities $ 144,594 $ 171,636 |
Convertible Senior Notes
Convertible Senior Notes | 3 Months Ended |
Mar. 31, 2017 | |
Convertible Notes Payable [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes In November 2013 , we issued 0% convertible senior notes due November 1, 2018 with an aggregate principal amount of $575 million , or the Notes. The Notes do not bear interest. The Notes mature on November 1, 2018 unless converted or repurchased in accordance with their terms prior to such date. We cannot redeem the Notes prior to maturity. The Notes are unsecured obligations and do not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by us or any of our subsidiaries. Upon conversion, we may choose to pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock. We intend to settle the principal amount of the Notes with cash. The Notes are convertible into up to 7.8 million shares of our common stock at an initial conversion rate of approximately 13.54 shares of common stock per $1,000 principal amount, which is equal to an initial conversion price of approximately $73.88 per share of common stock, subject to adjustment. Holders of the Notes may convert their Notes at their option at any time prior to the close of business on the business day immediately preceding July 1, 2018 , only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on March 31, 2014 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any five-consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of the Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; or • upon the occurrence of specified corporate events. On or after July 1, 2018 , a holder may convert all or any portion of its notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the foregoing conditions. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. The conversion price will be subject to adjustment in some events. Holders of the Notes who convert their notes in connection with certain corporate events that constitute a “make-whole fundamental change” are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a corporate event that constitutes a “fundamental change,” holders of the Notes may require us to purchase with cash all or a portion of the Notes upon the occurrence of a fundamental change, at a purchase price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest. In accounting for the issuance of the Notes, we separated the Notes into liability and equity components. The carrying cost of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Notes. The difference between the principal amount of the Notes and the proceeds allocated to the liability component, or the debt discount, is amortized to interest expense using the effective interest method over the term of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the transaction costs related to the issuance of the Notes, we allocated the total amount incurred to the liability and equity components based on their relative fair values. Transaction costs attributable to the liability component are being amortized to interest expense over the term of the Notes, and transaction costs attributable to the equity component were netted with the equity component of the Notes in stockholders’ equity. The Notes consisted of the following (in thousands): March 31, 2017 December 31, 2016 Liability: Principal $ 575,000 $ 575,000 Less: debt issuance cost and debt discount, net of amortization (58,510 ) (67,188 ) Net carrying amount $ 516,490 $ 507,812 We consider the fair value of the Notes at March 31, 2017 and December 31, 2016 to be a Level 2 measurement. The estimated fair values of the Notes were $743.8 million and $681.4 million at March 31, 2017 and December 31, 2016 , respectively (based on the closing trading price per $100 of the Notes on March 31, 2017 and December 31, 2016 , respectively). The Notes were not convertible as of March 31, 2017 and December 31, 2016 . As of March 31, 2017 , the remaining life of the Notes is 19 months. The following table sets forth total interest expense recognized related to the Notes (in thousands): Three Months Ended March 31, 2017 2016 Amortization of debt issuance cost $ 465 $ 435 Amortization of debt discount 8,213 7,674 Total $ 8,678 $ 8,109 Effective interest rate of the liability component 6.5% Note Hedge To minimize the impact of potential economic dilution upon conversion of the Notes, we entered into convertible note hedge transactions, or the Note Hedge, with respect to our common stock concurrent with the issuance of the Notes. The Note Hedge covers approximately 7.8 million shares of our common stock at a strike price per share that corresponds to the initial conversion price of the Notes, subject to adjustment, and is exercisable upon conversion of the Notes. We paid an aggregate amount of $135.8 million for the Note Hedge. The Note Hedge will expire upon maturity of the Notes. The Note Hedge is intended to reduce the potential economic dilution upon conversion of the Notes in the event that the fair value per share of our common stock at the time of exercise is greater than the conversion price of the Notes. The Note Hedge is a separate transaction and is not part of the terms of the Notes. The Note Hedge does not impact earnings per share, as it was entered into to offset any dilution from the Notes. Warrants Separately, we entered into warrant transactions, or the Warrants, whereby we sold warrants to acquire up to 7.8 million shares of our common stock, at a strike price of $107.46 per share, subject to adjustment. We received aggregate proceeds of $84.5 million |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, net of tax, consist of the following (in thousands): March 31, December 31, 2017 2016 Foreign currency translation adjustment $ (17,405 ) $ (19,277 ) Net unrealized gain (loss) on investments, net of tax 5,727 (1,856 ) Accumulated other comprehensive loss $ (11,678 ) $ (21,133 ) |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock We were authorized to issue 600,000,000 shares of common stock as of March 31, 2017 . Holders of our common stock are not entitled to receive dividends unless declared by our board of directors. As of March 31, 2017 , we had 169,721,359 shares of common stock outstanding and had reserved shares of common stock for future issuance as follows: March 31, 2017 Stock plans: Options outstanding 5,649,375 RSUs 14,129,353 Shares of common stock available for future grants: 2012 Equity Incentive Plan (1) 25,617,438 2012 Employee Stock Purchase Plan (1) 9,868,010 Total reserved shares of common stock for future issuance 55,264,176 (1) Refer to Note 12 for a description of these plans. During the three months ended March 31, 2017 and 2016 , we issued a total of 2,290,586 shares and 2,062,399 |
Equity Awards
Equity Awards | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Awards | Equity Awards We currently have two equity incentive plans, our 2005 Stock Option Plan, or 2005 Plan, and our 2012 Equity Incentive Plan, or 2012 Plan. Our 2005 Plan was terminated in connection with our initial public offering in 2012 but continues to govern the terms of outstanding stock options that were granted prior to the termination of the 2005 Plan. We no longer grant equity awards pursuant to our 2005 Plan. Our 2012 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, RSUs, performance-based stock awards and other forms of equity compensation, or collectively, equity awards. In addition, the 2012 Plan provides for the grant of performance cash awards. Incentive stock options may be granted only to employees. All other awards may be granted to employees, including officers, as well as directors and consultants. The share reserve may increase to the extent outstanding stock options under the 2005 Plan expire or terminate unexercised. The share reserve also automatically increases on January 1 of each year until January 1, 2022, by up to 5% of the total number of shares of common stock outstanding on December 31 of the preceding year as determined by the board of directors. On January 1, 2017 , 8,371,539 shares of common stock were automatically added to the 2012 Plan pursuant to the provision described in the preceding sentence. Our 2012 Employee Stock Purchase Plan, or 2012 ESPP, authorizes the issuance of shares of common stock pursuant to purchase rights granted to our employees. The price at which common stock is purchased under the 2012 ESPP is equal to 85% of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. Offering periods are six months long and begin on February 1 and August 1 of each year. The number of shares of common stock reserved for issuance automatically increases on January 1 of each year until January 1, 2022, by up to 1% of the total number of shares of common stock outstanding on December 31 of the preceding year as determined by the board of directors. On January 1, 2017 , 1,674,308 shares of common stock were automatically added to the 2012 ESPP pursuant to the provision described in the preceding sentence. Stock Options A summary of the stock option activity for the three months ended March 31, 2017 is as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2016 5,818,435 $ 20.57 Granted 566,720 84.81 Exercised (697,446 ) 15.77 $ 51,560 Canceled (38,334 ) 71.68 Outstanding at March 31, 2017 5,649,375 $ 27.26 5.67 $ 340,134 Vested and expected to vest as of March 31, 2017 5,569,939 26.63 5.63 $ 338,864 Vested and exercisable as of March 31, 2017 4,375,490 $ 12.95 4.63 $ 326,059 Aggregate intrinsic value represents the difference between the estimated fair value of our common stock and the exercise price of outstanding, in-the-money options. The weighted-average grant date fair value per share of options granted was $37.55 for the three months ended March 31, 2017 . The total fair value of stock options vested during the three months ended March 31, 2017 was $2.5 million . Included in the number of options granted during the three months ended March 31, 2017 are 396,720 options with both service and market-based criteria, which were granted to our new President and Chief Executive Officer, who started his employment with us during the quarter. The fair values of the options granted and the corresponding derived service periods were calculated using a Monte Carlo simulation, which estimates the potential outcome of reaching the market condition based on simulated future stock prices. The stock-based compensation expense associated with these options are recorded on a graded vesting basis. As of March 31, 2017 , total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options was approximately $36.1 million . The weighted-average remaining vesting period of unvested stock options at March 31, 2017 was 3.73 years . RSUs A summary of RSU activity for the three months ended March 31, 2017 is as follows: Number of Shares Weighted Average Grant Date Fair Value (Per Share) Aggregate Intrinsic Value (in thousands) Non-vested at December 31, 2016 12,222,282 $ 63.66 Granted 4,216,410 88.05 Vested (1,801,659 ) 55.73 $ 164,367 Forfeited (507,680 ) 73.14 Non-vested at March 31, 2017 14,129,353 71.60 $ 1,235,895 RSUs granted to employees under the 2012 Plan generally vest over a four -year period. As of March 31, 2017 , total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs was approximately $772.6 million and the weighted-average remaining vesting period was 3 years |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share attributable to common stockholders is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, adjusted for the effects of dilutive shares of common stock, which are comprised of outstanding common stock options, RSUs, shares of common stock subject to repurchase, ESPP obligations, convertible senior notes and warrants. The dilutive potential shares of common stock are computed using the treasury stock method or the as-if converted method, as applicable. The effects of outstanding common stock options, RSUs, ESPP obligations, convertible senior notes and warrants are excluded from the computation of diluted net loss per share in periods in which the effect would be antidilutive. The following table presents the calculation of basic and diluted net loss per share (in thousands, except share and per share data): Three Months Ended March 31, 2017 2016 Numerator: Net loss $ (40,662 ) $ (333,332 ) Denominator: Weighted-average shares outstanding—basic and diluted 168,742,366 162,067,108 Net loss per share—basic and diluted: $ (0.24 ) $ (2.06 ) Potentially dilutive securities that are not included in the calculation of diluted net loss per share because doing so would be antidilutive are as follows: March 31, 2017 2016 Common stock options 5,649,375 7,718,715 Restricted stock units 14,129,353 14,161,913 ESPP obligations 290,102 292,689 Convertible senior notes 7,783,023 7,783,023 Warrants related to the issuance of convertible senior notes 7,783,023 7,783,023 Total potentially dilutive securities 35,634,876 37,739,363 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We compute our provision for income taxes by applying the estimated annual effective tax rate to year-to-date loss from recurring operations and adjust the provision for discrete tax items recorded in the period. Our effective tax rate was 6% for the three months ended March 31, 2017 , which was lower than the U.S. federal statutory tax rate of 34% . The lower tax rate was primarily attributable to our loss from operations, the foreign tax rate differential, a release of the valuation allowance in connection with an acquisition, excess tax benefits of stock-based compensation and the tax effects of unrealized gains in investment securities. Our effective tax rate was (1)% for the three months ended March 31, 2016 , which was lower than the U.S. federal statutory tax rate of 34% . The lower tax rate was primarily attributable to our loss from operations, the foreign tax rate differential, and non-deductible expenses arising from stock-based compensation. We are subject to taxation in the United States and foreign jurisdictions. As of March 31, 2017 , our tax years 2005 to 2016 remain subject to examination in most jurisdictions. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases and Other Contractual Commitments For some of our offices and data centers, we have entered into non-cancelable operating lease agreements with various expiration dates. Future minimum payments under our non-cancelable operating leases and other contractual commitments outstanding as of March 31, 2017 are presented in the table below (in thousands): Leases, net of Sublease Income Purchase Obligations (1) Other Total Years Ending December 31, Remainder of 2017 $ 27,659 $ 15,217 $ 413 $ 43,289 2018 40,873 18,735 550 60,158 2019 42,716 8,783 550 52,049 2020 42,419 4,022 550 46,991 2021 42,358 2,128 550 45,036 Thereafter 156,965 — 1,558 158,523 Total $ 352,990 $ 48,885 $ 4,171 $ 406,046 (1) Consists of future minimum payments under non-cancelable purchase commitments primarily related to data center and IT operations. Not included in the table above are certain purchase commitments related to our future Knowledge user conferences. If we were to cancel these contractual commitments as of March 31, 2017 , we would have been obligated to pay cancellation penalties of approximately $15.8 million in aggregate. In addition to the amounts above, the repayment of our 0% convertible senior notes with an aggregate principal amount of $575 million is due on November 1, 2018. Refer to Note 9 for further information regarding our convertible senior notes. Legal Proceedings From time to time, we are party to litigation and other legal proceedings in the ordinary course of business. While the results of any litigation or other legal proceedings are uncertain, management does not believe the ultimate resolution of any pending legal matters is likely to have a material adverse effect on our financial position, results of operations or cash flows, except for those matters for which we have recorded a loss contingency. We accrue for loss contingencies when it is both probable that we will incur the loss and when we can reasonably estimate the amount of the loss or range of loss. Generally, our subscription agreements require us to defend our customers for third-party intellectual property infringement and other claims. Any adverse determination related to intellectual property claims or other litigation could prevent us from offering our services and adversely affect our financial condition and results of operations. On February 6, 2014, Hewlett-Packard Company (Hewlett-Packard) filed a lawsuit against us in the U.S. District Court for the Northern District of California. The lawsuit alleged patent infringement and sought damages and an injunction. On or about November 1, 2015, Hewlett Packard Enterprise Company (HPE) separated from Hewlett-Packard as an independent company, and Hewlett-Packard assigned to HPE all right, title, and interest in the eight Hewlett-Packard patents in the lawsuit and HPE was substituted as plaintiff in the litigation. On March 4, 2016, we entered into a confidential settlement agreement resolving the lawsuit with HPE (HPE Settlement). As a result, on March 9, 2016, the lawsuit was dismissed. BMC Software, Inc. (BMC) filed lawsuits against us in the U.S. District Court for the Eastern District of Texas on September 23, 2014 and February 12, 2016, and in the Dusseldorf (Germany) Regional Court, Patent Division, on March 2, 2016. Each of the lawsuits alleged patent infringement and sought damages and an injunction. On April 8, 2016, we entered into a confidential settlement agreement resolving all the lawsuits with BMC (BMC Settlement). As a result, the second Texas lawsuit was dismissed on April 14, 2016, and each of the initial Texas lawsuit and the German lawsuit was dismissed on April 25, 2016. These settlements are considered multiple element arrangements for accounting purposes. We evaluated the accounting treatment of these settlements by identifying each element of the arrangements, which included amongst other elements, a release of past infringement claims and a covenant not to sue for a specified term of years. The primary benefit we received from the arrangements was the settlement and termination of all existing litigation, the avoidance of future litigation expenses and the avoidance of future management and customer disruptions. We determined that none of the elements of the settlement agreements have identifiable future benefits that would be capitalized as an asset. Accordingly, we recorded charges for aggregate legal settlements of $270.0 million in our condensed consolidated statement of comprehensive loss during the three months ended March 31, 2016 |
Information about Geographic Ar
Information about Geographic Areas and Products | 3 Months Ended |
Mar. 31, 2017 | |
Segments, Geographical Areas [Abstract] | |
Information about Geographic Areas and Products | Information about Geographic Areas and Products Revenues by geographic area, based on the location of our users, were as follows for the periods presented (in thousands): Three Months Ended March 31, 2017 2016 North America (1) $ 285,581 $ 210,517 EMEA (2) 98,866 74,281 Asia Pacific and other 32,336 21,081 Total revenues $ 416,783 $ 305,879 Property and equipment, net by geographic area were as follows (in thousands): March 31, December 31, 2017 2016 North America (3) $ 136,427 $ 132,671 EMEA (2) 39,445 37,449 Asia Pacific and other 13,787 11,500 Total property and equipment, net $ 189,659 $ 181,620 (1) Revenues attributed to the United States were approximately 94% and 95% of North America revenues for each of the three months ended March 31, 2017 and 2016 , respectively. (2) Europe, the Middle East and Africa (3) Property and equipment, net attributed to the United States were approximately 91% and 92% of property and equipment, net attributable to North America as of March 31, 2017 and December 31, 2016 , respectively. Subscription revenues consist of the following (in thousands): Three Months Ended March 31, 2017 2016 Service Management solutions $ 333,636 $ 244,606 IT Operations Management solutions 42,499 22,816 Total subscription revenues $ 376,135 $ 267,422 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for fair statement of results for the interim periods presented have been included. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the year ended December 31, 2017 or for other interim periods or for future years. The condensed consolidated balance sheet as of December 31, 2016 is derived from audited financial statements as of that date; however, it does not include all of the information and footnotes required by GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 |
Principles of Consolidation | Principles of Consolidation |
Prior Period Reclassification | Prior Period Reclassification |
Use of Estimates | Use of Estimates |
New Accounting Pronouncements Pending Adoption | New Accounting Pronouncements Pending Adoption In March 2017, the FASB issued ASU 2017-08, "Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities," which shortens the amortization period for certain callable debt securities held at a premium to require such premiums to be amortized to the earliest call date unless applicable guidance related to certain pools of securities is applied to consider estimated prepayments. This new standard is effective for our interim and annual periods beginning January 1, 2019, and early adoption is permitted. We do not anticipate that this standard will have a material impact on our condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment," which eliminates Step 2 from the goodwill impairment test. This standard requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. In addition, this new standard eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment. This new standard is effective for our interim and annual periods beginning January 1, 2020, and early adoption is permitted. We do not anticipate that this standard will have a material impact on our condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. This new standard is effective for our interim and annual periods beginning January 1, 2018, and early adoption is permitted. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)," which requires that amounts generally described as restricted cash or restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This new standard is effective for our interim and annual periods beginning January 1, 2018, and early adoption is permitted. We do not anticipate that this standard will have a material impact on our condensed consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory," which includes a revision of the accounting for the income tax consequences of intra-entity transfers of assets other than inventory to reduce the complexity in accounting standards. This new standard is effective for our interim and annual periods beginning January 1, 2018, and early adoption is permitted. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," which provides guidance on eight specific cash flow issues. Among these issues, this standard requires, at the settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowings, the portion of the cash payment attributable to the accreted interest related to the debt discount to be classified as cash flows for operating activities, and the portion of the cash payments attributable to the principal to be classified as cash outflows for financing activities. This new standard is effective for our interim and annual periods beginning January 1, 2018, and early adoption is permitted. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. This new standard is effective for our interim and annual periods beginning January 1, 2020. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires lessees to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets, and to recognize on the income statement the expenses in a manner similar to current practice. This new standard is effective for our interim and annual periods beginning January 1, 2019, and early adoption is permitted. While we are currently evaluating the impact of this standard on our condensed consolidated financial statements, we anticipate that this standard will have a material impact on our condensed consolidated balance sheets given that we had operating lease commitments of approximately $353 million as of March 31, 2017 . However, we do not anticipate that this standard will have a material impact on our condensed consolidated statements of comprehensive loss since the expense recognition under this new standard will be similar to current practice. In January 2016, the FASB issued ASU 2016-01, "Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This new standard is effective for our interim and annual periods beginning January 1, 2018. We are currently evaluating the impact of this standard on our condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." Under this new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, this standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has recently issued several amendments to the standard, including clarification on accounting for licenses of intellectual property and identifying performance obligations. This new standard is effective for our interim and annual periods beginning January 1, 2018, and early adoption beginning January 1, 2017 is permitted. We will adopt this new standard beginning January 1, 2018. The Topic 606 guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We currently anticipate adopting the standard using the full retrospective method to restate each prior reporting period presented. Given the scope of work required to implement the recognition and disclosure requirements under the Topic 606 standard, we began our assessment process in 2014 and have since made significant progress, including the identification of necessary changes to our policies, processes, systems and controls. We do not expect the new standard to have a material impact on the timing of revenue recognition related to our cloud-based subscription offerings. However, we expect the new standard to have a material impact on the timing of revenue and expense recognition for our contracts related to on-premises offerings, in which we grant customers the right to deploy our subscription service on the customer’s own servers, without significant penalty. Under this new standard, the requirement to have vendor specific objective evidence (VSOE) for undelivered elements is eliminated. As such, we may be required to recognize as revenue a portion of the sales price upon delivery of the software, compared to the current practice of recognizing the entire sales price ratably over an estimated subscription period due to the lack of VSOE. To the extent the amounts recognized as revenue have not been billed, the accrued revenue will be recorded as unbilled receivables on our condensed consolidated balance sheets. We currently believe that our total revenues reported for the year ended December 31, 2016 would have increased by approximately $22 to $27 million on a pro forma basis if the new standard had been applied for the entire 2016 fiscal year starting on January 1, 2016. In addition, we expect the new standard to change the way we account for commissions paid on both our on-premises offerings and our cloud-based subscription offerings. Our current practice is to defer only direct and incremental commission costs to obtain a contract and amortize those costs over the contract term for both our on-premises offerings and our cloud-based subscription offerings. Under the new standard, we will defer all incremental commission costs to obtain customer contracts for both our on-premises offerings and our cloud-based subscription offerings. Commissions allocated to the software element of our on-premise offerings will be expensed immediately under the new standard, while commissions allocated to the support element of our on-premise offerings as well as commissions paid on our cloud-based subscription offerings will be amortized over an expected period of benefit, which we have determined to be approximately five years . As a result, we currently expect the deferred commissions asset to increase and the related amortization expense in each reporting period to decrease under the new standard. The aggregate impact resulting from changes in the way we account for commission expense for both our cloud-based subscription offerings and our on-premise offerings is expected to reduce our sales and marketing expenses by approximately $22 to $27 million for the year ended December 31, 2016. |
Strategic Investments | Strategic Investments |
Fair Value Measurements | We determine the fair value of our security holdings based on pricing from our service provider and market prices from industry-standard independent data providers. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs), such as yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. |
Net Loss Per Share | Net Loss Per Share |
Legal Proceedings | Legal Proceedings From time to time, we are party to litigation and other legal proceedings in the ordinary course of business. While the results of any litigation or other legal proceedings are uncertain, management does not believe the ultimate resolution of any pending legal matters is likely to have a material adverse effect on our financial position, results of operations or cash flows, except for those matters for which we have recorded a loss contingency. We accrue for loss contingencies when it is both probable that we will incur the loss and when we can reasonably estimate the amount of the loss or range of loss. Generally, our subscription agreements require us to defend our customers for third-party intellectual property infringement and other claims. Any adverse determination related to intellectual property claims or other litigation could prevent us from offering our services and adversely affect our financial condition and results of operations. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Available-for-sale Securities [Abstract] | |
Summary of Investments | The following is a summary of our available-for-sale investment securities, excluding those securities classified within cash and cash equivalents on the condensed consolidated balance sheets (in thousands): March 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Commercial paper $ 66,672 $ — $ — $ 66,672 Corporate notes and bonds 679,589 143 (1,197 ) 678,535 Certificates of deposit 44,251 — — 44,251 U.S. government agency securities 50,638 1 (107 ) 50,532 Marketable equity securities 10,000 11,670 — 21,670 Total available-for-sale securities $ 851,150 $ 11,814 $ (1,304 ) $ 861,660 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Commercial paper $ 56,839 $ — $ — $ 56,839 Corporate notes and bonds 628,054 91 (1,590 ) 626,555 Certificates of deposit 35,355 — — 35,355 U.S. government agency securities 42,088 7 (62 ) 42,033 Total available-for-sale securities $ 762,336 $ 98 $ (1,652 ) $ 760,782 |
Investments Classified by Contractual Maturity Date | The fair values of these securities, by remaining contractual maturity, are as follows (in thousands): March 31, 2017 Due in 1 year or less $ 513,729 Due in 1 year through 2 years 326,261 Total $ 839,990 |
Fair Values and Gross Unrealized Losses of Available-for-Sale Securities Aggregated by Investment Category | The following table shows the fair values and the gross unrealized losses of our available-for-sale investment securities, classified by the length of time that the securities have been in a continuous unrealized loss position, and aggregated by investment types (in thousands): March 31, 2017 Less than 12 Months 12 Months or Greater Total Fair Value Gross Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate notes and bonds $ 537,276 $ (1,171 ) $ 26,908 $ (26 ) $ 564,184 $ (1,197 ) U.S. government agency securities 48,536 (107 ) — — 48,536 (107 ) Total $ 585,812 $ (1,278 ) $ 26,908 $ (26 ) $ 612,720 $ (1,304 ) December 31, 2016 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate notes and bonds $ 492,503 $ (1,530 ) $ 47,940 $ (60 ) $ 540,443 $ (1,590 ) U.S. government agency securities 30,033 (62 ) — — 30,033 (62 ) Total $ 522,536 $ (1,592 ) $ 47,940 $ (60 ) $ 570,476 $ (1,652 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at March 31, 2017 (in thousands): Level 1 Level 2 Total Cash equivalents: Money market funds $ 96,840 $ — $ 96,840 Certificates of deposit — 1,500 1,500 Short-term investments: Commercial paper — 66,672 66,672 Corporate notes and bonds — 381,042 381,042 Certificates of deposit — 37,655 37,655 U.S. government agency securities — 28,360 28,360 Marketable equity securities 21,670 — 21,670 Long-term investments: Corporate notes and bonds — 297,493 297,493 Certificates of deposit — 6,596 6,596 U.S. government agency securities — 22,172 22,172 Total $ 118,510 $ 841,490 $ 960,000 The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at December 31, 2016 (in thousands): Level 1 Level 2 Total Cash equivalents: Money market funds $ 165,627 $ — $ 165,627 Short-term investments: Commercial paper — 56,839 56,839 Corporate notes and bonds — 388,429 388,429 Certificates of deposit — 35,355 35,355 U.S. government agency securities — 17,501 17,501 Long-term investments: Corporate notes and bonds — 238,125 238,125 U.S. government agency securities — 24,533 24,533 Total $ 165,627 $ 760,782 $ 926,409 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
DxContinuum, Inc. | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date: Purchase Price Allocation (in thousands) Useful Life (in years) Net tangible assets acquired $ 37 Intangible assets: Developed technology 6,400 5 Goodwill 11,159 Net deferred tax liabilities (1) (2,561 ) Total purchase price $ 15,035 (1) |
BrightPoint Security | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date: Purchase Price Allocation (in thousands) Useful Life (in years) Intangible assets: Developed technology $ 8,100 6 Customer contracts and related relationships 500 1.5 Goodwill 15,258 Net tangible liabilities acquired (1,339 ) Net deferred tax liabilities (1) (2,890 ) Total purchase price $ 19,629 (1) |
ITapp | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date: Purchase Price Allocation (in thousands) Useful Life (in years) Net tangible assets acquired $ 140 Intangible assets: Developed technology 4,700 5 Customer contracts and related relationships 200 1.5 Goodwill 11,437 Net deferred tax liabilities (2,015 ) Total purchase price $ 14,462 (1) |
BrightPoint Security and ITapp | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Information [Table Text Block] | The following unaudited pro forma consolidated financial information combines the results of operations from us, BrightPoint and ITapp for the three months ended March 31, 2016 , as if the acquisitions of BrightPoint and ITapp had occurred on January 1, 2016 (in thousands, except share and per share data): Three Months Ended March 31, 2016 (unaudited) Revenue $ 306,268 Net loss $ (335,625 ) Weighted-average shares used to compute net loss per share - basic and diluted 162,067,108 Net loss per share - basic and diluted $ (2.07 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The following table presents the estimated future amortization expense related to intangible assets held at March 31, 2017 (in thousands): Years Ending December 31, 2017 $ 13,503 2018 17,091 2019 17,011 2020 7,363 2021 5,458 Thereafter 7,329 Total future amortization expense $ 67,755 |
Schedule of Goodwill | Goodwill balances are presented below (in thousands): Carrying Amount Balance as of December 31, 2016 $ 82,534 Goodwill acquired 11,159 Foreign currency translation adjustments 3,221 Balance as of March 31, 2017 $ 96,914 |
Schedule of Intangible Assets | Intangible assets consist of the following (in thousands): March 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 85,899 $ (34,981 ) $ 50,918 Patents 17,610 (1,369 ) 16,241 Other 1,775 (1,179 ) 596 Total intangible assets 105,284 (37,529 ) 67,755 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 79,206 $ (30,858 ) $ 48,348 Patents 17,610 (867 ) 16,743 Other 1,775 (1,012 ) 763 Total intangible assets $ 98,591 $ (32,737 ) $ 65,854 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net consists of the following (in thousands): March 31, December 31, 2017 2016 Computer equipment $ 240,617 $ 222,648 Leasehold improvements 37,357 37,095 Computer software 34,879 32,132 Furniture and fixtures 33,556 31,574 Building 6,788 6,379 Construction in progress 3,431 2,535 356,628 332,363 Less: Accumulated depreciation (166,969 ) (150,743 ) Total property and equipment, net $ 189,659 $ 181,620 |
Accrued Expenses and Other Cu29
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Summary Of Accrued Expenses And Other Current Liabilities [Abstract] | |
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): March 31, December 31, 2017 2016 Taxes payable $ 19,360 $ 19,472 Bonuses and commissions 43,803 67,259 Accrued compensation 37,490 30,816 Other employee related liabilities 20,081 28,812 Other 23,860 25,277 Total accrued expenses and other current liabilities $ 144,594 $ 171,636 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Convertible Notes Payable [Abstract] | |
Schedule of Convertible Notes | The Notes consisted of the following (in thousands): March 31, 2017 December 31, 2016 Liability: Principal $ 575,000 $ 575,000 Less: debt issuance cost and debt discount, net of amortization (58,510 ) (67,188 ) Net carrying amount $ 516,490 $ 507,812 |
Interest Expense Recognized Related to the Notes | The following table sets forth total interest expense recognized related to the Notes (in thousands): Three Months Ended March 31, 2017 2016 Amortization of debt issuance cost $ 465 $ 435 Amortization of debt discount 8,213 7,674 Total $ 8,678 $ 8,109 Effective interest rate of the liability component 6.5% |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive loss, net of tax, consist of the following (in thousands): March 31, December 31, 2017 2016 Foreign currency translation adjustment $ (17,405 ) $ (19,277 ) Net unrealized gain (loss) on investments, net of tax 5,727 (1,856 ) Accumulated other comprehensive loss $ (11,678 ) $ (21,133 ) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Common Stock Outstanding and Reserved Shares of Common Stock for Future Issuance | As of March 31, 2017 , we had 169,721,359 shares of common stock outstanding and had reserved shares of common stock for future issuance as follows: March 31, 2017 Stock plans: Options outstanding 5,649,375 RSUs 14,129,353 Shares of common stock available for future grants: 2012 Equity Incentive Plan (1) 25,617,438 2012 Employee Stock Purchase Plan (1) 9,868,010 Total reserved shares of common stock for future issuance 55,264,176 (1) Refer to Note 12 for a description of these plans. |
Equity Awards (Tables)
Equity Awards (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | A summary of the stock option activity for the three months ended March 31, 2017 is as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2016 5,818,435 $ 20.57 Granted 566,720 84.81 Exercised (697,446 ) 15.77 $ 51,560 Canceled (38,334 ) 71.68 Outstanding at March 31, 2017 5,649,375 $ 27.26 5.67 $ 340,134 Vested and expected to vest as of March 31, 2017 5,569,939 26.63 5.63 $ 338,864 Vested and exercisable as of March 31, 2017 4,375,490 $ 12.95 4.63 $ 326,059 |
Schedule of Restricted Stock Unit Activity | A summary of RSU activity for the three months ended March 31, 2017 is as follows: Number of Shares Weighted Average Grant Date Fair Value (Per Share) Aggregate Intrinsic Value (in thousands) Non-vested at December 31, 2016 12,222,282 $ 63.66 Granted 4,216,410 88.05 Vested (1,801,659 ) 55.73 $ 164,367 Forfeited (507,680 ) 73.14 Non-vested at March 31, 2017 14,129,353 71.60 $ 1,235,895 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table presents the calculation of basic and diluted net loss per share (in thousands, except share and per share data): Three Months Ended March 31, 2017 2016 Numerator: Net loss $ (40,662 ) $ (333,332 ) Denominator: Weighted-average shares outstanding—basic and diluted 168,742,366 162,067,108 Net loss per share—basic and diluted: $ (0.24 ) $ (2.06 ) |
Summary of Potentially Dilutive Securities | Potentially dilutive securities that are not included in the calculation of diluted net loss per share because doing so would be antidilutive are as follows: March 31, 2017 2016 Common stock options 5,649,375 7,718,715 Restricted stock units 14,129,353 14,161,913 ESPP obligations 290,102 292,689 Convertible senior notes 7,783,023 7,783,023 Warrants related to the issuance of convertible senior notes 7,783,023 7,783,023 Total potentially dilutive securities 35,634,876 37,739,363 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity Schedule | Future minimum payments under our non-cancelable operating leases and other contractual commitments outstanding as of March 31, 2017 are presented in the table below (in thousands): Leases, net of Sublease Income Purchase Obligations (1) Other Total Years Ending December 31, Remainder of 2017 $ 27,659 $ 15,217 $ 413 $ 43,289 2018 40,873 18,735 550 60,158 2019 42,716 8,783 550 52,049 2020 42,419 4,022 550 46,991 2021 42,358 2,128 550 45,036 Thereafter 156,965 — 1,558 158,523 Total $ 352,990 $ 48,885 $ 4,171 $ 406,046 (1) Consists of future minimum payments under non-cancelable purchase commitments primarily related to data center and IT operations. Not included in the table above are certain purchase commitments related to our future Knowledge user conferences. If we were to cancel these contractual commitments as of March 31, 2017 , we would have been obligated to pay cancellation penalties of approximately $15.8 million in aggregate. |
Information about Geographic 36
Information about Geographic Areas and Products (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segments, Geographical Areas [Abstract] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | Revenues by geographic area, based on the location of our users, were as follows for the periods presented (in thousands): Three Months Ended March 31, 2017 2016 North America (1) $ 285,581 $ 210,517 EMEA (2) 98,866 74,281 Asia Pacific and other 32,336 21,081 Total revenues $ 416,783 $ 305,879 Property and equipment, net by geographic area were as follows (in thousands): March 31, December 31, 2017 2016 North America (3) $ 136,427 $ 132,671 EMEA (2) 39,445 37,449 Asia Pacific and other 13,787 11,500 Total property and equipment, net $ 189,659 $ 181,620 (1) Revenues attributed to the United States were approximately 94% and 95% of North America revenues for each of the three months ended March 31, 2017 and 2016 , respectively. (2) Europe, the Middle East and Africa (3) Property and equipment, net attributed to the United States were approximately 91% and 92% of property and equipment, net attributable to North America as of March 31, 2017 and December 31, 2016 |
Schedule Of Subscription Revenue By Product | Subscription revenues consist of the following (in thousands): Three Months Ended March 31, 2017 2016 Service Management solutions $ 333,636 $ 244,606 IT Operations Management solutions 42,499 22,816 Total subscription revenues $ 376,135 $ 267,422 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating leases, future minimum payments due | $ 353,000 | |||
Revenues | 416,783 | $ 305,879 | ||
Decrease to sales and marketing expense | [1] | $ (212,086) | $ (158,610) | |
Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Commissions for on premise support and cloud-based subscription, period of benefit | 5 years | |||
Minimum | Accounting Standards Update 2014-09 | Restatement Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 22,000 | |||
Decrease to sales and marketing expense | 22,000 | |||
Maximum | Accounting Standards Update 2014-09 | Restatement Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | 27,000 | |||
Decrease to sales and marketing expense | $ 27,000 | |||
[1] | Includes stock-based compensation as follows: Three Months Ended March 31, 2017 2016 Cost of revenues: Subscription $ 7,938 $ 6,607 Professional services and other 6,949 6,759 Sales and marketing 38,401 30,998 Research and development 21,801 20,533 General and administrative 14,854 10,411 |
Investments - Summary of Invest
Investments - Summary of Investments (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 851,150 | $ 762,336 |
Gross Unrealized Gains | 11,814 | 98 |
Gross Unrealized Losses | (1,304) | (1,652) |
Estimated Fair Value | 861,660 | 760,782 |
Due in 1 year or less | 513,729 | |
Due in 1 year through 2 years | 326,261 | |
Total | 839,990 | |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 66,672 | 56,839 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 66,672 | 56,839 |
Corporate notes and bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 679,589 | 628,054 |
Gross Unrealized Gains | 143 | 91 |
Gross Unrealized Losses | (1,197) | (1,590) |
Estimated Fair Value | 678,535 | 626,555 |
Certificates of deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 44,251 | 35,355 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 44,251 | 35,355 |
U.S. government agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 50,638 | 42,088 |
Gross Unrealized Gains | 1 | 7 |
Gross Unrealized Losses | (107) | (62) |
Estimated Fair Value | 50,532 | $ 42,033 |
Marketable equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 10,000 | |
Gross Unrealized Gains | 11,670 | |
Gross Unrealized Losses | 0 | |
Estimated Fair Value | $ 21,670 |
Investments - Fair Values and G
Investments - Fair Values and Gross Unrealized Losses of Available-for-Sale Securities Aggregated by Investment Category (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, fair value, less than 12 months | $ 585,812 | $ 522,536 |
Available-for-sale securities, gross unrealized losses, less than 12 months | (1,278) | (1,592) |
Available-for-sale securities, fair value, 12 months or greater | 26,908 | 47,940 |
Available-for-sale securities, gross unrealized losses, 12 months or greater | (26) | (60) |
Fair Value | 612,720 | 570,476 |
Gross Unrealized Losses | (1,304) | (1,652) |
Corporate notes and bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, fair value, less than 12 months | 537,276 | 492,503 |
Available-for-sale securities, gross unrealized losses, less than 12 months | (1,171) | (1,530) |
Available-for-sale securities, fair value, 12 months or greater | 26,908 | 47,940 |
Available-for-sale securities, gross unrealized losses, 12 months or greater | (26) | (60) |
Fair Value | 564,184 | 540,443 |
Gross Unrealized Losses | (1,197) | (1,590) |
U.S. government agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, fair value, less than 12 months | 48,536 | 30,033 |
Available-for-sale securities, gross unrealized losses, less than 12 months | (107) | (62) |
Available-for-sale securities, fair value, 12 months or greater | 0 | 0 |
Available-for-sale securities, gross unrealized losses, 12 months or greater | 0 | 0 |
Fair Value | 48,536 | 30,033 |
Gross Unrealized Losses | $ (107) | $ (62) |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Available for sale securities maturities term maximum | 24 months | |
Other than temporary impairment losses, investments, available-for-sale securities | $ 0 | |
Cost method investments | 2,000,000 | $ 11,000,000 |
Short-term Investments | 851,150,000 | 762,336,000 |
Gross Unrealized Gains | 11,814,000 | $ 98,000 |
Marketable equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Short-term Investments | 10,000,000 | |
Gross Unrealized Gains | 11,670,000 | |
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax | $ 11,700,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 960,000 | $ 926,409 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 118,510 | 165,627 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 841,490 | 760,782 |
Cash equivalents | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 96,840 | 165,627 |
Cash equivalents | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 1,500 | |
Cash equivalents | Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 96,840 | 165,627 |
Cash equivalents | Level 1 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Cash equivalents | Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Cash equivalents | Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 1,500 | |
Short-term investments | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 66,672 | 56,839 |
Short-term investments | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 381,042 | 388,429 |
Short-term investments | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 37,655 | 35,355 |
Short-term investments | U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 28,360 | 17,501 |
Short-term investments | Marketable equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 21,670 | |
Short-term investments | Level 1 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Short-term investments | Level 1 | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Short-term investments | Level 1 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Short-term investments | Level 1 | U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Short-term investments | Level 1 | Marketable equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 21,670 | |
Short-term investments | Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 66,672 | 56,839 |
Short-term investments | Level 2 | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 381,042 | 388,429 |
Short-term investments | Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 37,655 | 35,355 |
Short-term investments | Level 2 | U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 28,360 | 17,501 |
Short-term investments | Level 2 | Marketable equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Long-term investments | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 297,493 | 238,125 |
Long-term investments | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 6,596 | |
Long-term investments | U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 22,172 | 24,533 |
Long-term investments | Level 1 | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Long-term investments | Level 1 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Long-term investments | Level 1 | U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Long-term investments | Level 2 | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 297,493 | 238,125 |
Long-term investments | Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 6,596 | |
Long-term investments | Level 2 | U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 22,172 | $ 24,533 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 20, 2017 | Jun. 03, 2016 | Apr. 08, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 96,914 | $ 82,534 | ||||
Weighted-average shares used to compute net loss per share - basic and diluted | 168,742,366 | 162,067,108 | ||||
BrightPoint Security and ITapp | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, transaction costs | $ 1,000 | |||||
Revenue | $ 306,268 | |||||
Net loss | $ (335,625) | |||||
Weighted-average shares used to compute net loss per share - basic and diluted | 162,067,108 | |||||
Net loss per share - basic (in dollars per share) | $ (2.07) | |||||
Net loss per share - diluted (in dollars per share) | $ (2.07) | |||||
DxContinuum, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire businesses | $ 15,000 | |||||
Net tangible assets acquired | 37 | |||||
Goodwill | 11,159 | |||||
Net deferred tax liabilities | (2,561) | |||||
Total purchase price | 15,035 | |||||
ITapp | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire businesses | $ 14,500 | |||||
Net tangible assets acquired | 140 | |||||
Goodwill | 11,437 | |||||
Net deferred tax liabilities | (2,015) | |||||
Total purchase price | 14,462 | |||||
BrightPoint Security | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire businesses | $ 19,600 | |||||
Goodwill | 15,258 | |||||
Net tangible liabilities acquired | (1,339) | |||||
Net deferred tax liabilities | (2,890) | |||||
Total purchase price | 19,629 | |||||
Developed technology | DxContinuum, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 6,400 | |||||
Finite-lived intangible asset, useful life | 5 years | |||||
Developed technology | ITapp | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 4,700 | |||||
Finite-lived intangible asset, useful life | 5 years | |||||
Developed technology | BrightPoint Security | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 8,100 | |||||
Finite-lived intangible asset, useful life | 6 years | |||||
Customer contracts and related relationships | ITapp | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 200 | |||||
Finite-lived intangible asset, useful life | 1 year 6 months | |||||
Customer contracts and related relationships | BrightPoint Security | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 500 | |||||
Finite-lived intangible asset, useful life | 1 year 6 months |
Goodwill and Intangible Asset43
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | $ 82,534 |
Goodwill acquired | 11,159 |
Foreign currency translation adjustments | 3,221 |
Goodwill, end of period | $ 96,914 |
Goodwill and Intangible Asset44
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 105,284 | $ 98,591 | |
Accumulated Amortization | (37,529) | (32,737) | |
Net Carrying Amount | 67,755 | 65,854 | |
2,017 | 13,503 | ||
2,018 | 17,091 | ||
2,019 | 17,011 | ||
2,020 | 7,363 | ||
2,021 | 5,458 | ||
Thereafter | 7,329 | ||
Total future amortization expense | 67,755 | ||
Amortization expense | 4,700 | $ 2,900 | |
Developed technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 85,899 | 79,206 | |
Accumulated Amortization | (34,981) | (30,858) | |
Net Carrying Amount | 50,918 | 48,348 | |
Patents | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 17,610 | 17,610 | |
Accumulated Amortization | (1,369) | (867) | |
Net Carrying Amount | 16,241 | 16,743 | |
Other | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 1,775 | 1,775 | |
Accumulated Amortization | (1,179) | (1,012) | |
Net Carrying Amount | $ 596 | $ 763 |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 356,628 | $ 332,363 | |
Less: Accumulated depreciation | (166,969) | (150,743) | |
Total property and equipment, net | 189,659 | 181,620 | |
Depreciation | 20,400 | $ 14,600 | |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 240,617 | 222,648 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 37,357 | 37,095 | |
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 34,879 | 32,132 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 33,556 | 31,574 | |
Building | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 6,788 | 6,379 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 3,431 | $ 2,535 |
Accrued Expenses and Other Cu46
Accrued Expenses and Other Current Liabilities - (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Disclosure Summary Of Accrued Expenses And Other Current Liabilities [Abstract] | ||
Taxes payable | $ 19,360 | $ 19,472 |
Bonuses and commissions | 43,803 | 67,259 |
Accrued compensation | 37,490 | 30,816 |
Other employee related liabilities | 20,081 | 28,812 |
Other | 23,860 | 25,277 |
Total accrued expenses and other current liabilities | $ 144,594 | $ 171,636 |
Convertible Senior Notes - Addi
Convertible Senior Notes - Additional Information (Details) | 1 Months Ended | 3 Months Ended | ||
Nov. 30, 2013USD ($)shares$ / shares | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Debt Conversion [Line Items] | ||||
Debt Instrument, Convertible, Remaining Discount Amortization Period | 19 months | |||
Contractual interest rate - Notes | 0.00% | |||
Principal | $ 575,000,000 | $ 575,000,000 | $ 575,000,000 | |
Converted number of shares | shares | 7,800,000 | |||
Conversion rate | 13.54 | |||
Notes face amount | $ 1,000 | |||
Initial conversion price, per share, (in USD per share) | $ / shares | $ 73.88 | |||
Terms of conversion feature | July 1, 2018 | |||
Percentage of purchase price of Notes which should be paid upon fundamental change | 100.00% | |||
Convertible debt, fair value disclosures | $ 743,800,000 | 681,400,000 | ||
Fair value measurement, debt basis, closing trading price | 100 | $ 100 | ||
Noted hedged shares of common stock covered | shares | 7,800,000 | |||
Purchase of convertible note hedge | $ 135,800,000 | |||
Amortization of debt discount and issuance costs | $ 8,678,000 | $ 8,109,000 | ||
Issuance of warrants (in shares) | shares | 7,800,000 | |||
Exercise price of warrants issued (USD per share) | $ / shares | $ 107.46 | |||
Proceeds from issuance of warrants | $ 84,500,000 | |||
Calendar Quarter End | ||||
Debt Conversion [Line Items] | ||||
Number of days out of 30 that common stock price exceeded conversion price, days | 20 days | |||
Number of consecutive trading days in a period | 30 days | |||
Calendar Quarter End | Minimum | ||||
Debt Conversion [Line Items] | ||||
Threshold percentage of stock price trigger | 130.00% | |||
Measurement Period | ||||
Debt Conversion [Line Items] | ||||
Notes face amount | $ 1,000 | |||
Number of days out of 30 that common stock price exceeded conversion price, days | 5 days | |||
Number of consecutive trading days in a period | 5 days | |||
Measurement Period | Maximum | ||||
Debt Conversion [Line Items] | ||||
Threshold percentage of stock price trigger | 98.00% |
Convertible Senior Notes - Sche
Convertible Senior Notes - Schedule of Notes Payable (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2013 |
Convertible Notes Payable [Abstract] | |||
Principal | $ 575,000,000 | $ 575,000,000 | $ 575,000,000 |
Less: debt issuance cost and debt discount, net of amortization | (58,510,000) | (67,188,000) | |
Net carrying amount | $ 516,490,000 | $ 507,812,000 |
Convertible Senior Notes - Sc49
Convertible Senior Notes - Schedule of Interest Expense Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Convertible Notes Payable [Abstract] | ||
Amortization of debt issuance cost | $ 465 | $ 435 |
Amortization of debt discount | 8,213 | 7,674 |
Amortization of debt discount and issuance costs | $ 8,678 | $ 8,109 |
Effective interest rate of the liability component | 6.50% | 6.50% |
Accumulated Other Comprehensi50
Accumulated Other Comprehensive Loss - (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Foreign currency translation adjustment | $ (17,405) | $ (19,277) |
Net unrealized gain (loss) on investments, net of tax | 5,727 | (1,856) |
Accumulated other comprehensive loss | $ (11,678) | $ (21,133) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Equity [Abstract] | ||
Shares of common stock, authorized (shares) | 600,000,000 | |
Shares of common stock, issued and sold (shares) | 169,721,359 | |
Stock issued during period, shares, new issues | 2,290,586 | 2,062,399 |
Stockholders' Equity - Outstand
Stockholders' Equity - Outstanding and Reserved Shares of Common Stock for Future Issuance (Detail) - shares | Mar. 31, 2017 | Dec. 31, 2016 |
Common stock outstanding and reserved shares of common stock for future issuance | ||
Options outstanding (in shares) | 5,649,375 | 5,818,435 |
Total reserved shares of common stock for future issuance | 55,264,176 | |
2012 Equity Incentive Plan | ||
Common stock outstanding and reserved shares of common stock for future issuance | ||
Total reserved shares of common stock for future issuance | 25,617,438 | |
2012 Employee Stock Purchase Plan | ||
Common stock outstanding and reserved shares of common stock for future issuance | ||
Total reserved shares of common stock for future issuance | 9,868,010 | |
Options outstanding | ||
Common stock outstanding and reserved shares of common stock for future issuance | ||
Options outstanding (in shares) | 5,649,375 | |
RSUs | ||
Common stock outstanding and reserved shares of common stock for future issuance | ||
RSUs (in shares) | 14,129,353 | 12,222,282 |
Equity Awards - Additional Info
Equity Awards - Additional Information (Detail) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average grant date fair value of options granted (usd per share) | $ / shares | $ 37.55 |
Fair value of stock options vested | $ | $ 2.5 |
Number of shares, granted | 566,720 |
Total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options | $ | $ 36.1 |
Options outstanding | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Remaining weighted-average period | 3 years 8 months 23 days |
Options outstanding | New President and CEO | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares, granted | 396,720 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense expected to be recognized | $ | $ 772.6 |
Remaining weighted-average period | 3 years |
2012 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares of common stock outstanding, increase, percentage | 5.00% |
Number of additional shares authorized | 8,371,539 |
2012 Equity Incentive Plan | RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Compensation expense recognized, vesting term | 4 years |
2012 Employee Stock Purchase Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares of common stock outstanding, increase, percentage | 1.00% |
Number of additional shares authorized | 1,674,308 |
Common stock purchase price percentage | 85.00% |
Award offering period | 6 months |
Equity Awards - Summary of Stoc
Equity Awards - Summary of Stock Option Activity (Detail) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Number of Shares | |
Number of Shares, Outstanding, Beginning Balance | shares | 5,818,435 |
Number of Shares, Granted | shares | 566,720 |
Number of Shares, Exercised | shares | (697,446) |
Number of shares, Cancelled | shares | (38,334) |
Number of Shares, Outstanding, Ending Balance | shares | 5,649,375 |
Number of Shares, Vested and expected to vest | shares | 5,569,939 |
Number of Shares, Vested and exercisable | shares | 4,375,490 |
Weighted- Average Exercise Price | |
Weighted-Average Exercise Price, Outstanding, Beginning Balance, usd per share | $ / shares | $ 20.57 |
Weighted-Average Exercise Price, Granted, usd per share | $ / shares | 84.81 |
Weighted-Average Exercise Price, Exercised, usd per share | $ / shares | 15.77 |
Weighted-Average Exercise Price Cancelled, usd per share | $ / shares | 71.68 |
Weighted-Average Exercise Price, Outstanding, Ending Balance, usd per share | $ / shares | 27.26 |
Weighted-Average Exercise Price, Vested and expected to vest, usd per share | $ / shares | 26.63 |
Weighted-Average Exercise Price, Vested and exercisable, usd per share | $ / shares | $ 12.95 |
Weighted- Average Remaining Contractual Term, Outstanding | 5 years 8 months 1 day |
Weighted-Average Remaining Contractual Term, Vested and expected to vest | 5 years 7 months 17 days |
Weighted-Average Remaining Contractual Term, Vested and exercisable | 4 years 7 months 17 days |
Aggregate Intrinsic Value, Exercised | $ | $ 51,560 |
Aggregate Intrinsic Value, Outstanding | $ | 340,134 |
Aggregate Intrinsic Value, Vested and expected to vest | $ | 338,864 |
Aggregate Intrinsic Value, Vested and exercisable | $ | $ 326,059 |
Equity Awards Equity Awards - R
Equity Awards Equity Awards - Restricted Stock Unit Table (Details) - RSUs $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Number of Shares | |
Number of shares, Nonvested, beginning balance | shares | 12,222,282 |
Number of shares, granted | shares | 4,216,410 |
Number of shares, vested | shares | (1,801,659) |
Number of shares, forfeited | shares | (507,680) |
Number of shares, Nonvested, ending balance | shares | 14,129,353 |
Weighted Average Grant Date Fair Value (Per Share) | |
Weighted-average grant date fair value, outstanding, beginning balance, usd per share | $ / shares | $ 63.66 |
Weighted average grant date fair value, granted, usd per share | $ / shares | 88.05 |
Weighted-average grant date fair value, vested, usd per share | $ / shares | 55.73 |
Weighted-average grant date fair value, forfeited, usd per share | $ / shares | 73.14 |
Weighted-average grant date fair value, outstanding, ending balance, usd per share | $ / shares | $ 71.60 |
Aggregate intrinsic value, vested | $ | $ 164,367 |
Aggregate intrinsic value, non-vested | $ | $ 1,235,895 |
Net Loss Per Share - Calculatio
Net Loss Per Share - Calculation of Basic and Diluted Net Income (Loss) Per Share Attributable to Common Stockholders (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Net loss | $ (40,662) | $ (333,332) |
Denominator: | ||
Weighted-average shares used to compute net loss per share - basic and diluted | 168,742,366 | 162,067,108 |
Net loss per share attributable to common stockholders: | ||
Net loss per share, basic and diluted (in USD per share) | $ (0.24) | $ (2.06) |
Net Loss Per Share- Summary of
Net Loss Per Share- Summary of Potentially Dilutive Securities (Detail) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 35,634,876 | 37,739,363 |
Common stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 5,649,375 | 7,718,715 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 14,129,353 | 14,161,913 |
ESPP obligations | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 290,102 | 292,689 |
Convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 7,783,023 | 7,783,023 |
Warrants related to the issuance of convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 7,783,023 | 7,783,023 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 6.00% | (1.00%) |
Federal statutory rate | 34.00% | 34.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Stated interest rate | 0.00% | |||
Principal | $ 575,000,000 | $ 575,000,000 | $ 575,000,000 | |
Legal settlements | $ 270,000,000 |
Commitments and Contingencies60
Commitments and Contingencies - Maturity of Obligations (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Leases, net of Sublease Income | |
Remainder of 2017 | $ 27,659 |
2,018 | 40,873 |
2,019 | 42,716 |
2,020 | 42,419 |
2,021 | 42,358 |
Thereafter | 156,965 |
Operating leases, future minimum payments due, net of sublease income, due, total | 352,990 |
Purchase Obligations | |
Remainder of 2017 | 15,217 |
2,018 | 18,735 |
2,019 | 8,783 |
2,020 | 4,022 |
2,021 | 2,128 |
Thereafter | 0 |
Unrecorded unconditional purchase obligation, total | 48,885 |
Other | |
Remainder of 2017 | 413 |
2,018 | 550 |
2,019 | 550 |
2,020 | 550 |
2,021 | 550 |
Thereafter | 1,558 |
Other commitment, total | 4,171 |
Total | |
Remainder of 2017 | 43,289 |
2,018 | 60,158 |
2,019 | 52,049 |
2,020 | 46,991 |
2,021 | 45,036 |
Thereafter | 158,523 |
Contractual obligation, total | 406,046 |
Operating leases, cancellation penalty | $ 15,800 |
Information about Geographic 61
Information about Geographic Areas and Products - Geographic Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Revenues by geography | |||
Revenues | $ 416,783 | $ 305,879 | |
Percentage of U.S. Revenues in North America | 94.00% | 95.00% | |
Property and equipment, net | $ 189,659 | $ 181,620 | |
Percentage of U.S. net property and equipment in North America | 91.00% | 92.00% | |
North America | |||
Revenues by geography | |||
Revenues | $ 285,581 | $ 210,517 | |
Property and equipment, net | 136,427 | $ 132,671 | |
EMEA | |||
Revenues by geography | |||
Revenues | 98,866 | 74,281 | |
Property and equipment, net | 39,445 | 37,449 | |
Asia Pacific and other | |||
Revenues by geography | |||
Revenues | 32,336 | $ 21,081 | |
Property and equipment, net | $ 13,787 | $ 11,500 |
Information about Geographic 62
Information about Geographic Areas and Products - Subscription Revenues (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Total subscription revenues | $ 376,135 | $ 267,422 |
Service Management solutions | ||
Segment Reporting Information [Line Items] | ||
Total subscription revenues | 333,636 | 244,606 |
IT Operations Management solutions | ||
Segment Reporting Information [Line Items] | ||
Total subscription revenues | $ 42,499 | $ 22,816 |