Document and Entity Information
Document and Entity Information shares in Millions | 6 Months Ended |
Jun. 30, 2018shares | |
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 | Jun. 30, 2018 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q2 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 177.9 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 704,846 | $ 726,495 | |
Short-term investments | 1,044,812 | 1,052,803 | |
Accounts receivable, net | 367,598 | 437,051 | |
Current portion of deferred commissions | 119,068 | 109,643 | |
Prepaid expenses and other current assets | 115,305 | 95,959 | |
Total current assets | 2,351,629 | 2,421,951 | |
Deferred commissions, less current portion | 239,523 | 224,252 | |
Long-term investments | 304,629 | 391,442 | |
Property and equipment, net | 286,953 | 245,124 | |
Intangible assets, net | 87,726 | 86,916 | |
Goodwill | 143,007 | 128,728 | |
Other assets | 59,417 | 51,832 | |
Total assets | 3,472,884 | 3,550,245 | |
Current liabilities: | |||
Accounts payable | 30,656 | 32,109 | |
Accrued expenses and other current liabilities | 273,994 | 253,257 | |
Current portion of deferred revenue | 1,320,928 | 1,210,695 | |
Current portion of convertible senior notes, net | 211,463 | 543,418 | |
Total current liabilities | 1,837,041 | 2,039,479 | |
Deferred revenue, less current portion | 44,389 | 36,120 | |
Convertible senior notes, net | 645,668 | 630,018 | |
Other long-term liabilities | 54,076 | 65,884 | |
Total liabilities | 2,581,174 | 2,771,501 | |
Stockholders’ equity: | |||
Common stock | 178 | 174 | |
Additional paid-in capital | 1,889,727 | 1,731,367 | |
Accumulated other comprehensive (loss) income | (3,995) | 5,767 | |
Accumulated deficit | (994,200) | (958,564) | |
Total stockholders’ equity | 891,710 | 778,744 | |
Total liabilities and stockholders’ equity | $ 3,472,884 | $ 3,550,245 | |
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | [1] | Jun. 30, 2018 | Jun. 30, 2017 | |||
Revenues: | |||||||
Subscription | $ 585,282 | $ 402,672 | $ 1,128,607 | $ 790,256 | [1] | ||
Professional services and other | 45,774 | 45,586 | 91,671 | 86,773 | [1] | ||
Total revenues | 631,056 | 448,258 | 1,220,278 | 877,029 | [1] | ||
Cost of revenues: | |||||||
Subscription | [2] | 101,699 | 75,793 | 197,097 | 146,168 | [1] | |
Professional services and other | [2] | 51,466 | 46,335 | 99,541 | 92,044 | [1] | |
Total cost of revenues | [2] | 153,165 | 122,128 | 296,638 | 238,212 | [1] | |
Gross profit | 477,891 | 326,130 | 923,640 | 638,817 | [1] | ||
Operating expenses: | |||||||
Sales and marketing | [2] | 310,869 | 222,393 | 594,570 | 426,132 | [1] | |
Research and development | [2] | 127,916 | 90,005 | 245,184 | 174,494 | [1] | |
General and administrative | [2] | 71,095 | 51,526 | 136,158 | 97,777 | [1] | |
Total operating expenses | [2] | 509,880 | 363,924 | 975,912 | 698,403 | [1] | |
Loss from operations | (31,989) | (37,794) | (52,272) | (59,586) | [1] | ||
Interest expense | (15,498) | (11,337) | (32,562) | (20,015) | [1] | ||
Interest income and other income (expense), net | 6,638 | (8,485) | 36,625 | (756) | [1] | ||
Loss before income taxes | (40,849) | (57,616) | (48,209) | (80,357) | [1] | ||
Provision for (benefit from) income taxes | 11,897 | (1,812) | (6,085) | (3,039) | [1] | ||
Net loss | $ (52,746) | $ (55,804) | $ (42,124) | $ (77,318) | [1],[3] | ||
Net loss per share - basic and diluted (in dollars per share) | $ (0.30) | $ (0.33) | $ (0.24) | $ (0.46) | |||
Weighted-average shares used to compute net loss per share - basic and diluted (in shares) | 177,343,176 | 170,419,083 | 176,418,984 | 169,585,356 | |||
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustments | $ 6,992 | $ 14,351 | $ (1,443) | $ 17,146 | [1] | ||
Unrealized gain (loss) on investments, net of tax | 1,983 | 524 | (1,085) | 8,107 | [1] | ||
Other comprehensive income (loss), net of tax | 8,975 | 14,875 | (2,528) | 25,253 | [1] | ||
Comprehensive loss | $ (43,771) | $ (40,929) | $ (44,652) | $ (52,065) | [1] | ||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details | ||||||
[2] | Includes stock-based compensation as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 *As Adjusted *As Adjusted Cost of revenues: Subscription $ 12,538 $ 8,942 $ 23,829 $ 16,880 Professional services and other 8,342 7,617 15,903 14,492 Sales and marketing 57,069 42,287 109,151 80,688 Research and development 33,780 22,731 62,378 44,532 General and administrative 23,831 16,489 45,640 31,343 | ||||||
[3] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | [2] | Jun. 30, 2018 | Jun. 30, 2017 | ||
Stock-based compensation | $ 256,901 | $ 187,935 | [1] | |||
Cost of revenues: subscription | ||||||
Stock-based compensation | $ 12,538 | $ 8,942 | 23,829 | 16,880 | [2] | |
Cost of revenues: professional services and other | ||||||
Stock-based compensation | 8,342 | 7,617 | 15,903 | 14,492 | [2] | |
Sales and marketing | ||||||
Stock-based compensation | 57,069 | 42,287 | 109,151 | 80,688 | [2] | |
Research and development | ||||||
Stock-based compensation | 33,780 | 22,731 | 62,378 | 44,532 | [2] | |
General and administrative | ||||||
Stock-based compensation | $ 23,831 | $ 16,489 | $ 45,640 | $ 31,343 | [2] | |
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. | |||||
[2] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | [2] | |||
Cash flows from operating activities: | |||||
Net loss | $ (42,124) | $ (77,318) | [1] | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||
Depreciation and amortization | 68,618 | 52,407 | |||
Amortization of deferred commissions | 64,304 | 43,086 | |||
Amortization of debt discount and issuance costs | 32,562 | 20,015 | |||
Stock-based compensation | 256,901 | 187,935 | |||
Deferred income tax | (30,926) | (4,751) | |||
Gain on marketable equity securities | (19,257) | 0 | |||
Repayments of convertible senior notes attributable to debt discount | (87,557) | 0 | |||
Other | (1,707) | (2,014) | |||
Changes in operating assets and liabilities, net of effect of business combinations: | |||||
Accounts receivable | 65,940 | 55,186 | |||
Deferred commissions | (92,995) | (69,947) | |||
Prepaid expenses and other assets | 2,040 | (3,606) | |||
Accounts payable | (2,632) | (7,860) | |||
Deferred revenue | 131,089 | 133,416 | |||
Accrued expenses and other liabilities | 31,720 | (10,216) | |||
Net cash provided by operating activities | 375,976 | 316,333 | |||
Cash flows from investing activities: | |||||
Purchases of property and equipment | (88,362) | (69,103) | |||
Business combinations, net of cash and restricted cash acquired | (24,940) | (21,537) | |||
Purchases of other intangibles | (10,850) | (6,170) | |||
Purchases of investments | (379,913) | (358,590) | |||
Sales of investments | 39,975 | 77,968 | |||
Maturities of investments | 453,156 | 221,949 | |||
Net cash used in investing activities | (10,934) | [3] | (155,483) | ||
Cash flows from financing activities: | |||||
Net proceeds from borrowings on convertible senior notes | 0 | 772,127 | |||
Repayments of convertible senior notes attributable to principal | (271,185) | 0 | |||
Proceeds from issuance of warrants | 0 | 54,071 | |||
Purchases of convertible note hedges | 0 | (128,017) | |||
Repurchases and retirement of common stock | 0 | (55,000) | |||
Proceeds from employee stock plans | 61,419 | 40,892 | |||
Taxes paid related to net share settlement of equity awards | (154,531) | (87,349) | |||
Payments on financing obligations | (576) | (2,560) | |||
Net cash (used in) provided by financing activities | (364,873) | 594,164 | |||
Foreign currency effect on cash, cash equivalents and restricted cash | [3] | (7,505) | 18,040 | ||
Net (decrease) increase in cash, cash equivalents and restricted cash | [3] | (7,336) | 773,054 | ||
Cash, cash equivalents and restricted cash at beginning of period | [3] | 727,829 | 401,932 | ||
Cash, cash equivalents and restricted cash at end of period | [3] | 720,493 | 1,174,986 | ||
Cash, cash equivalents and restricted cash at end of period: | |||||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | [3] | 727,829 | 401,932 | ||
Non-cash investing and financing activities: | |||||
Benefit from 2018 Note Hedges | 467,176 | 0 | |||
Property and equipment included in accounts payable and accrued expenses | 25,027 | 16,030 | |||
Financing obligation for purchases of other intangibles | $ 0 | $ 2,110 | |||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details | ||||
[2] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. | ||||
[3] | During the three months ended December 31, 2017, we adopted Accounting Standards Update 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” 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. Accordingly, we have recast our prior period condensed consolidated statement of cash flows to conform to the current presentation. The impact of the adoption for the six months ended June 30, 2017 is not material. |
Description of the Business
Description of the Business | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | Description of the Business |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation Effective January 1, 2018, we adopted the Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” as discussed further below in this Note 2. All amounts and disclosures set forth in this Form 10-Q have been updated to comply with the new standards, including previously reported amounts, which are labeled "as adjusted" in these condensed consolidated financial statements and related notes. Certain prior period amounts reported in our condensed consolidated financial statements and notes thereto have been reclassified to conform to the current period 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 (the SEC) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary under GAAP for fair statement of results for the interim periods presented have been included. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for other interim periods or future years. The condensed consolidated balance sheet as of December 31, 2017 is derived from audited financial statements as adjusted to reflect the impact of the full retrospective adoption of Topic 606; 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 our Annual Report on Form 10-K for the year ended December 31, 2017 , which was filed with the SEC on February 28, 2018. 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. 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 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 stand-alone selling price (SSP) for each distinct performance obligation included in customer contracts with multiple performance obligations, the period of benefit for deferred commissions, 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, and legal contingencies. Actual results could differ from those estimates. New Accounting Pronouncements Adopted in 2018 Stock-based Compensation In June 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting,” which is intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments. Currently, the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. This standard expands the scope of Topic 718 to include share-based payments issued to nonemployees for goods or services, aligning the accounting for share-based payments to nonemployees and employees. This standard is effective for our fiscal year beginning January 1, 2019 and early adoption is permitted. We early adopted this new standard effective January 1, 2018, and the adoption of this standard did not have a material impact on our condensed consolidated financial statements. As this standard was adopted on a prospective basis as of January 1, 2018, the adoption of this standard did not impact our previously reported financial statements for periods ended on or prior to December 31, 2017. The adoption of this standard did not impact our previously reported financial statements for the three months ended March 31, 2018 and 2017. Income Taxes In February 2018, the FASB issued ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which provides entities the option to reclassify tax effects stranded in accumulated other comprehensive income as a result of the 2017 Tax Cuts and Jobs Act (the Tax Act) to retained earnings. This standard is effective for our fiscal year beginning January 1, 2019 and early adoption is permitted. We early adopted this new standard effective January 1, 2018, with an immaterial amount of cumulative effect adjustment recorded to our accumulated deficit as of January 1, 2018. As this standard was adopted on a modified prospective basis as of January 1, 2018, the adoption of this standard did not impact our previously reported financial statements for periods ended on or prior to December 31, 2017. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allows us to record provisional amounts for the 2017 Tax Cuts and Jobs Act (the Tax Act) during a measurement period not to extend beyond one year of the enactment date, with further clarifications made recently with the issuance of ASU 2018-05. Through June 30, 2018, we did not have any significant adjustments to our provisional amounts. In light of the enactment of the Tax Act, we are assessing whether to change our indefinite reinvestment assertion, in which we consider earnings from our foreign operations to be indefinitely reinvested outside of the United States. Under guidance issued by the SEC, we are required to complete our assessment by the end of the measurement period described above. We will continue our analysis of these provisional amounts, which remain subject to change during the measurement period. We anticipate further guidance on accounting interpretations from the FASB and application of the law from the Department of Treasury. We expect to reach a final determination within the measurement period described above. 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. We adopted this new standard as of January 1, 2018 with an immaterial amount of cumulative effect adjustment recorded to our accumulated deficit as of January 1, 2018. As this standard was adopted on a modified prospective basis as of January 1, 2018, the adoption of this standard did not impact our previously reported financial statements for periods ended on or prior to December 31, 2017. Financial Instruments 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, with further clarifications made more recently. This new standard requires equity securities to be measured at fair value with changes in fair value recognized through net income, which results in greater variability in our net income. We adopted these new standards as of January 1, 2018 with a cumulative-effect adjustment, net of tax of $7.2 million recorded to our accumulated deficit as of January 1, 2018. This adjustment relates to the unrealized gain on our marketable equity securities as of December 31, 2017, which was previously included in accumulated other comprehensive income (loss) on our condensed consolidated balance sheet. As part of the adoption, we elected to apply the measurement alternative for our non-marketable equity investments that do not have readily determinable fair values, measuring them at cost, less any impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The adoption of these standards did not result in an adjustment for our non-marketable equity investments as our measurement alternative election requires adjustments to be recorded only on a prospective basis. As these standards were adopted on a modified prospective basis as of January 1, 2018, the adoption of these standards did not impact our previously reported financial statements for periods ended on or prior to December 31, 2017. Revenue from Contracts with Customers In May 2014, the FASB issued Topic 606, which supersedes the prior revenue recognition standard (Topic 605). Under Topic 606, 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 be entitled to 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. Topic 606 also includes Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. The Topic 606 standard 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 standard recognized at the date of initial application (modified retrospective method). We adopted the requirements of Topic 606 as of January 1, 2018, utilizing a full retrospective method. The most significant impact of the standard relates to the timing of revenue recognition related to our on-premises offerings, in which we grant customers the right to deploy our software on the customer’s own servers without significant penalty, the accounting for incremental costs to obtain a contract, and the classification of proceeds for Knowledge and other user forums as a reduction in sales and marketing expenses instead of as professional services and other revenues. The adoption of Topic 606 resulted in changes to our accounting policies for revenue recognition, unbilled receivables, deferred commissions, deferred revenue and customer deposits as detailed below. Under Topic 606, for our on-premises offerings, the requirement to have vendor specific objective evidence (VSOE) for undelivered elements was eliminated. As a result, for all periods presented, we have recognized as subscription revenues a portion of the sales price upon delivery of the software, compared to the prior practice under Topic 605 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 subscription revenues have not been billed, the revenues are primarily recorded as “unbilled receivables.” In addition, refundable amounts associated with customer contracts are recorded as “customer deposits.” In addition, under Topic 606, for all periods presented, we have deferred all incremental commission costs to obtain customer contracts, including indirect costs that are not tied to a specific contract, for both our on-premises offerings and our cloud-based subscription offerings. On initial contracts and contracts for increased purchases with existing customers (expansion contracts), these costs are primarily amortized over a period of benefit that we have determined to be five years. On renewal contracts, these costs are amortized over the renewal term. Additionally, for our on-premises offerings, consistent with the recognition of subscription revenue for on-premises offerings as described above, a portion of the commission cost is expensed upfront when the on-premises offering is made available. Our prior practice under Topic 605 was to defer only direct and incremental commission costs to obtain a contract and amortize those costs over the contract term, which is generally 12 to 36 months, for both our on-premises offerings and our cloud-based subscription offerings. The direct effect on income taxes resulting from the full retrospective adoption of the above-mentioned changes to revenues and commission expenses resulted in a cumulative income tax expense of $23.3 million recorded in the prior periods through December 31, 2017 . The indirect tax benefit of Topic 606 on income taxes associated with intercompany adjustments of $23.1 million , or $0.13 per basic and diluted share for the six months ended June 30, 2018 , was recorded in the first quarter of adoption during the three months ended March 31, 2018. The table below provides specified line items from our condensed consolidated balance sheet (i) as previously reported and (ii) as adjusted to reflect the impact of the full retrospective adoption of Topic 606 (in thousands): Year Ended December 31, 2017 As Previously Reported As Adjusted Assets Accounts receivable, net $ 434,895 $ 437,051 Current portion of deferred commissions 118,690 109,643 Prepaid expenses and other current assets 77,681 95,959 Deferred commissions, less current portion 85,530 224,252 Other assets 49,600 51,832 Liabilities Accrued expenses and other current liabilities 244,605 253,257 Current portion of deferred revenue 1,280,499 1,210,695 Deferred revenue, less current portion 39,884 36,120 Other long-term liabilities 43,239 65,884 Stockholder’s equity Accumulated other comprehensive (loss) income (889 ) 5,767 Accumulated deficit (1,146,520 ) (958,564 ) The table below provides specified line items from our condensed consolidated statement of comprehensive loss (i) as previously reported and (ii) as adjusted to reflect the impact of the full retrospective adoption of Topic 606 (in thousands, except per share data): Three months ended June 30, 2017 Six months ended June 30, 2017 As Previously Reported As Adjusted As Previously Reported As Adjusted Revenues: Subscription $ 411,007 $ 402,672 $ 787,142 $ 790,256 Professional services and other 60,696 45,586 101,344 86,773 Total revenues 471,703 448,258 888,486 877,029 Cost of revenues: Professional services and other 45,892 46,335 91,964 92,044 Total cost of revenues 121,685 122,128 238,132 238,212 Gross profit 350,018 326,130 650,354 638,817 Operating expenses: Sales and marketing 247,224 222,393 459,310 426,132 Total operating expenses 388,755 363,924 731,581 698,403 Loss from operations (38,737 ) (37,794 ) (81,227 ) (59,586 ) Interest income and other income (expense), net (7,830 ) (8,485 ) (114 ) (756 ) Loss before income taxes (57,904 ) (57,616 ) (101,356 ) (80,357 ) Provision for income taxes (1,431 ) (1,812 ) (4,221 ) (3,039 ) Net loss $ (56,473 ) $ (55,804 ) $ (97,135 ) $ (77,318 ) Net loss per share - basic and diluted $ (0.33 ) $ (0.33 ) $ (0.57 ) $ (0.46 ) Weighted-average shares used to compute net loss per share - basic and diluted 170,419,083 170,419,083 169,585,356 169,585,356 The table below provides specified line items from our condensed consolidated statement of cash flows (i) as previously reported and (ii) as adjusted to reflect the impact of the full retrospective adoption of Topic 606 (in thousands): Six months ended June 30, 2017 As Previously Reported As Adjusted Cash flows from operating activities: Net loss $ (97,135 ) $ (77,318 ) Adjustments to reconcile net loss to net cash provided by operating activities: Amortization of deferred commissions 50,587 43,086 Changes in operating assets and liabilities, net of effect of business combinations: Accounts receivable 51,039 55,186 Deferred commissions (61,287 ) (69,947 ) Prepaid expenses and other assets (11,945 ) (3,606 ) Deferred revenue 145,662 133,416 Accrued expenses and other liabilities (6,578 ) (10,216 ) Net cash provided by operating activities 316,149 316,333 Foreign currency effect on cash, cash equivalents and restricted cash 18,224 18,040 Updated Significant Accounting Policies Revenue Recognition We report our revenues in two categories: (i) subscriptions and (ii) professional services and other. Revenues are recognized when control of these services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We determine revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, we satisfy a performance obligation Subscription revenues Subscription revenues are primarily comprised of subscription fees that give customers access to the ordered subscription service, related support and updates, if any, to the subscribed service during the subscription term. We recognize subscription revenues ratably over the contract term beginning on the commencement date of each contract, which is the date we make our services available to our customers. Our contracts with customers typically include a fixed amount of consideration, and are generally non-cancelable and without any refund-type provisions. We typically invoice our customers annually in advance for our subscription services upon execution of the initial contract or subsequent renewal, and our invoices are typically due within 30 days from the invoice date. Subscription revenues also include revenues from our on-premises offerings in which we grant customers the right to deploy our subscription service on the customers’ own servers without significant penalty. For these contracts, we account for the software element and the related support and updates separately as they are distinct performance obligations. Refer to the discussion below related to contracts with multiple performance obligations for further details. The transaction price is allocated to separate performance obligations on a relative SSP basis. Transaction price allocated to the software element is recognized upon delivery, which is when transfer of control of the software to the customer is complete. The transaction price allocated to the related support and updates are recognized ratably over the contract term. Professional services and other revenues Our professional services arrangements are primarily on a time-and-materials basis, and revenues on these arrangements are recognized as the services are delivered. We typically invoice our customers monthly in arrears for these professional services based on actual hours and expenses incurred, and our invoices are typically due within 30 days from the invoice date. Professional services revenues associated with fixed fee arrangements are recognized on a proportional performance basis. In instances where certain milestones are required to be met before revenues are recognized, we defer professional services revenues and the associated costs until milestone criteria have been met. Other revenues consist of fees from customer training delivered on-site or through publicly available classes. Contracts with multiple performance obligations We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. For these contracts, the transaction price is allocated to the separate performance obligations on a relative SSP basis. We determine SSP by considering the historical selling price of these performance obligations in similar transactions as well as other factors, including, but not limited to, competitive pricing of similar products, other software vendor pricing, industry publications and current pricing practices. Unbilled Receivables Unbilled receivables, which is a contract asset, represent subscription revenues that are recognized upon delivery of the software prior to being invoiced. Unbilled receivables are primarily presented under prepaid expenses and other current assets on our condensed consolidated balance sheets. Deferred Commissions Deferred commissions are the incremental selling costs that are associated with acquiring customer contracts and consist of sales commissions paid to our sales force and referral fees paid to independent third-parties. On initial and expansion contracts, commissions and referral fees are primarily deferred and amortized over a period of benefit that we have determined to be five years. On renewal contracts, commissions are deferred and amortized over the renewal term. Additionally, for our on-premises offerings, consistent with the recognition of subscription revenue for on-premises offerings, a portion of the commission cost is expensed upfront when the on-premises offering is made available. We determine the period of benefit by taking into consideration our customer contracts, our technology life cycle and other factors. We include amortization of deferred commissions in sales and marketing expense in our condensed consolidated statements of comprehensive income (loss). There was no impairment loss in relation to the costs capitalized for all periods presented. Deferred revenue Deferred revenue, which is a contract liability, consists primarily of payments received in advance of revenue recognition from our contracts with customers and is recognized as the revenue recognition criteria are met. Once our services are available to customers, we record amounts due in accounts receivable and in deferred revenue. To the extent we bill customers in advance of the billing period commencement date, the accounts receivable and corresponding deferred revenue amounts are netted to zero on our condensed consolidated balance sheets, unless such amounts have been paid as of the balance sheet date. Customer deposits Customer deposits primarily relate to payments received from customers which could be refundable pursuant to the terms of the contract and are presented under “accrued expenses and other current liabilities” on our condensed consolidated balance sheets. Strategic investments Our strategic investments consist of debt and non-marketable equity investments in privately-held companies in which we do not have a controlling interest or significant influence. Debt investments in privately-held companies are classified as available-for-sale and are recorded at their estimated fair value with changes in fair value recorded through accumulated other comprehensive income (loss). We have elected to apply the measurement alternative for equity investments that do not have readily determinable fair values, measuring them at cost, less any impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. An impairment loss is recorded when event or circumstance indicates a decline in value has occurred. We include these strategic investments in “Other assets” on the consolidated balance sheets. New Accounting Pronouncements Pending Adoption In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (GILTI) provisions of the Tax Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of subsidiary foreign corporations. We are currently evaluating the impact of the Tax Act and this guidance on our condensed consolidated financial statements and have not yet elected an accounting policy to either recognize deferred taxes for basis differences expected to reverse as GILTI or to record GILTI as period costs if and when incurred. 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 the adoption 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, including related amendments subsequently issued by the FASB, is effective for our interim and annual periods beginning January 1, 2019, and early adoption is permitted. We are in the process of implementing changes to our existing systems and processes in conjunction with a review of existing vendor agreements and do not plan to early adopt this new standard. We currently anticipate that the adoption of this standard will have a material impact on our condensed consolidated balance sheets given that we had operating lease commitments in excess of $700 million as of June 30, 2018 |
Investments
Investments | 6 Months Ended |
Jun. 30, 2018 | |
Available-for-sale Securities [Abstract] | |
Investments | Investments Marketable Securities The following is a summary of our available-for-sale investment securities, excluding marketable equity securities and those securities classified within cash and cash equivalents on the condensed consolidated balance sheets (in thousands): June 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Commercial paper $ 253,519 $ — $ (1 ) $ 253,518 Corporate notes and bonds 954,783 42 (4,146 ) 950,679 Certificates of deposit 32,742 2 — 32,744 U.S. government agency securities 113,166 — (666 ) 112,500 Total available-for-sale securities $ 1,354,210 $ 44 $ (4,813 ) $ 1,349,441 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Commercial paper $ 258,348 $ 1 $ (5 ) $ 258,344 Corporate notes and bonds 1,006,302 26 (3,084 ) 1,003,244 Certificates of deposit 33,084 — — 33,084 U.S. government agency securities 129,494 — (638 ) 128,856 Total available-for-sale securities $ 1,427,228 $ 27 $ (3,727 ) $ 1,423,528 As of June 30, 2018 , the contractual maturities of our available-for-sale investment securities, excluding securities classified within cash and cash equivalents on the condensed consolidated balance sheets, did not exceed 36 months . The fair values of these securities, by remaining contractual maturity, are as follows (in thousands): June 30, 2018 Due within 1 year $ 1,044,812 Due in 1 year through 5 years 304,629 Total $ 1,349,441 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, excluding those securities classified as cash and cash equivalents on the condensed consolidated balance sheets (in thousands): June 30, 2018 Less than 12 Months 12 Months or Greater Total Fair Value Gross Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 14,931 $ (1 ) $ — $ — $ 14,931 $ (1 ) Corporate notes and bonds 850,411 (3,990 ) 74,722 (156 ) 925,133 (4,146 ) U.S. government agency securities 79,733 (537 ) 32,767 (129 ) 112,500 (666 ) Total $ 945,075 $ (4,528 ) $ 107,489 $ (285 ) $ 1,052,564 $ (4,813 ) December 31, 2017 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 14,809 $ (5 ) $ — $ — $ 14,809 $ (5 ) Corporate notes and bonds 819,113 (2,703 ) 141,874 (381 ) 960,987 (3,084 ) U.S. government agency securities 106,301 (593 ) 22,555 (45 ) 128,856 (638 ) Total $ 940,223 $ (3,301 ) $ 164,429 $ (426 ) $ 1,104,652 $ (3,727 ) As of June 30, 2018 , we had a total of 366 available-for-sale securities, excluding those securities classified within cash and cash equivalents on the consolidated balance sheet in an unrealized loss position. 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. Marketable Equity Securities As of December 31, 2017 , we had marketable equity securities of $20.7 million . During the six months ended June 30, 2018 , we sold these securities for total proceeds of $40.0 million , and we recognized net gains of $0.8 million and $19.3 million for the three and six months ended June 30, 2018 , respectively. These gains resulted from our adoption of ASU 2016-01 as we began to record changes in stock price fluctuations of our marketable equity securities through net income, even prior to the sale of these securities. Upon our sale of these securities during the three months ended June 30, 2018 , the previously unrealized gain became realized. During the six months ended June 30, 2017 , prior to the adoption of ASU 2016-01, we recognized $12.2 million of unrealized gains on our marketable equity securities offset by $4.5 million of tax effect through accumulated other comprehensive loss on our condensed consolidated balance sheet. Refer to Note 2 for further details on ASU 2016-01. Strategic Investments As of June 30, 2018 and December 31, 2017 , the total amount of equity investments in privately-held companies included in other assets on our condensed consolidated balance sheets was $4.8 million . We have not recorded any adjustments resulting from observable price changes or impairment charges for any of our equity investments in privately-held companies. The fair value of our debt investments in privately-held companies included within our strategic investments is $1.0 million as of June 30, 2018 and December 31, 2017 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 (in thousands): Level 1 Level 2 Total Cash equivalents: Money market funds $ 176,304 $ — $ 176,304 Commercial paper — 173,604 173,604 Corporate notes and bonds — 6,598 6,598 Short-term investments: Commercial paper — 253,518 253,518 Corporate notes and bonds — 678,619 678,619 Certificates of deposit — 29,844 29,844 U.S. government agency securities — 82,831 82,831 Long-term investments: Corporate notes and bonds — 272,060 272,060 Certificates of deposit — 2,900 2,900 U.S. government agency securities — 29,669 29,669 Total $ 176,304 $ 1,529,643 $ 1,705,947 The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at December 31, 2017 (in thousands): Level 1 Level 2 Total Cash equivalents: Money market funds $ 282,507 $ — $ 282,507 Commercial paper — 100,456 100,456 Corporate notes and bonds — 50,437 50,437 Short-term investments: Commercial paper — 258,344 258,344 Corporate notes and bonds — 688,316 688,316 Certificates of deposit — 17,950 17,950 U.S. government agency securities — 67,476 67,476 Marketable equity securities 20,717 — 20,717 Long-term investments: Corporate notes and bonds — 314,928 314,928 Certificates of deposit — 15,134 15,134 U.S. government agency securities — 61,380 61,380 Total $ 303,224 $ 1,574,421 $ 1,877,645 We determine the fair value of our security holdings based on pricing from our service providers 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 | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations During the six months ended June 30, 2018 , we completed acquisitions of two privately-held companies, Parlo, Inc. and VendorHawk, Inc., for an aggregate of approximately $25.1 million in cash. In allocating the aggregate purchase price based on the estimated fair values, we recorded a total of $18.1 million of goodwill, $9.0 million of developed technology intangible assets (to be amortized over estimated useful lives of five years) and $2.2 million of deferred tax liabilities. During the six months ended June 30, 2017 , we completed acquisitions of two privately-held companies, Qlue, Inc. and DxContinuum, Inc., for an aggregate of approximately $21.6 million in cash. In allocating the aggregate purchase price based on the estimated fair values, we recorded a total of $16.2 million of goodwill, $9.0 million of developed technology intangible assets (to be amortized over estimated useful lives of five years) and $3.6 million of deferred tax liabilities. The excess of purchase consideration over the fair value of net tangible and identifiable assets acquired was recorded as goodwill. We believe the goodwill balance associated with these business combinations represents the synergies expected from expanded market opportunities when integrating the acquired developed technologies with our offerings. Goodwill arising from these business combinations is not deductible for income tax purposes. The results of operations of these business combinations have been included in our condensed consolidated financial statements from their respective dates of purchase. These business combinations did not have a material impact on our condensed consolidated financial statements, and therefore historical and pro forma disclosures have not been presented. Aggregate acquisition-related costs of $0.7 million and $1.4 million for the six months ended June 30, 2018 and 2017 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
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, 2017 $ 128,728 Goodwill acquired 18,063 Foreign currency translation adjustments (3,784 ) Balance as of June 30, 2018 $ 143,007 Intangible assets consist of the following (in thousands): June 30, December 31, 2018 2017 Developed technology $ 110,473 $ 102,349 Patents 35,130 31,030 Other 650 1,575 Total intangible assets 146,253 134,954 Less: accumulated amortization (58,527 ) (48,038 ) Net carrying amount $ 87,726 $ 86,916 Apart from the business combinations described in Note 5, we acquired $4.1 million and $6.2 million of intangible assets in patents during the six months ended June 30, 2018 and 2017 , respectively. The weighted-average useful life for the patents acquired was approximately 10 years. Amortization expense for intangible assets for the three months ended June 30, 2018 and 2017 was approximately $6.1 million and $4.8 million , respectively, and for the six months ended June 30, 2018 and 2017 was approximately $11.8 million and $9.5 million , respectively. The following table presents the estimated future amortization expense related to intangible assets held at June 30, 2018 (in thousands): Years Ending December 31, 2018 $ 12,791 2019 24,686 2020 14,952 2021 12,558 2022 9,101 Thereafter 13,638 Total future amortization expense $ 87,726 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net, consists of the following (in thousands): June 30, December 31, 2018 2017 Computer equipment $ 391,524 $ 326,378 Computer software 53,894 46,413 Leasehold and other improvements 63,561 56,232 Furniture and fixtures 39,814 38,789 Building 6,744 7,084 Construction in progress 15,673 5,341 571,210 480,237 Less: accumulated depreciation (284,257 ) (235,113 ) Total property and equipment, net $ 286,953 $ 245,124 Construction in progress consists primarily of building, leasehold and other improvements and in-process software development costs. Depreciation and amortization expense for the three months ended June 30, 2018 and 2017 was $29.2 million and $22.2 million , respectively, and for the six months ended June 30, 2018 and 2017 was approximately $56.8 million and $42.6 million |
Derivative Contracts
Derivative Contracts | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Contracts | Derivative Contracts We conduct business on a global basis in multiple foreign currencies, subjecting us to foreign currency risk. In order to manage certain exposures to currency fluctuations, we initiated a limited hedging program beginning in the three months ended March 31, 2018 by entering into foreign currency derivative contracts with maturities of 12 months or less to hedge a portion of our net outstanding monetary assets and liabilities. These derivative contracts include spot and forward contracts entered into with various counterparties, and are not designated as hedging instruments under applicable accounting guidance. As such, all changes in the fair value of these derivative contracts are recorded in Interest income and other income (expense), net on the condensed consolidated statements of comprehensive loss. These derivative contracts are intended to offset the foreign currency gains or losses associated with the underlying monetary assets and liabilities, and changes in the related derivative assets and liabilities balances are classified as operating activities. These derivative contracts expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. We mitigate this credit risk by transacting with major financial institutions with high credit ratings and entering into master netting arrangements, which permit net settlement of transactions with the same counterparty. While the contract or notional amount is often used to express the volume of foreign currency derivative contracts, the amounts potentially subject to credit risk are generally limited to the amounts, if any, by which the counterparties’ obligations under the agreements exceed the obligations of the Company to the counterparties. We are not required to pledge, and are not entitled to receive, cash collateral related to these derivative instruments. We do not enter into derivative contracts for trading or speculative purposes. As of June 30, 2018 , we had derivative contracts with total notional values of $851.0 million , which are not designated as hedge instruments. Our foreign currency contracts are classified within Level 2 because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates. The fair values of these outstanding derivative contracts as of June 30, 2018 were as follows (in thousands): Condensed Consolidated Balance Sheet Location June 30, 2018 Derivative Assets: Foreign currency derivative contracts Prepaid expenses and other current assets $ 14,676 Derivative Liabilities Foreign currency derivative contracts Accrued expenses and other current liabilities $ 844 |
Deferred Revenue and Performanc
Deferred Revenue and Performance Obligations | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue and Performance Obligations | Deferred Revenue and Performance Obligations Revenues recognized during the six months ended June 30, 2018 from amounts included in deferred revenue as of December 31, 2017 are $825.0 million . Revenues recognized during the six months ended June 30, 2018 from performance obligations satisfied or partially satisfied in previous periods were not material. Transaction Price Allocated to the Remaining Performance Obligations Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenues in future periods. We applied the practical expedient in accordance with Topic 606 to exclude the amounts related to professional services contracts that are on a time-and-material basis, which typically have a remaining duration of one year or less. In addition, we elected to apply the practical expedient to not disclose the transaction price allocated to remaining performance obligations for all periods presented before January 1, 2018, the date of our initial adoption of Topic 606. As of June 30, 2018 , the total remaining non-cancelable performance obligations under our contracts with customers was approximately $4.0 billion , and we expect to recognize revenues on approximately 50% of these remaining performance obligations over the following 12 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2018 | |
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): June 30, 2018 December 31, 2017 *As Adjusted Taxes payable $ 30,927 $ 25,617 Bonuses and commissions 70,104 84,972 Accrued compensation 51,827 45,428 Other employee related liabilities 47,762 44,284 Other 73,374 52,956 Total accrued expenses and other current liabilities $ 273,994 $ 253,257 |
Convertible Senior Notes
Convertible Senior Notes | 6 Months Ended |
Jun. 30, 2018 | |
Convertible Notes Payable [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes In May and June 2017, we issued an aggregate of $782.5 million of 0% convertible senior notes (the 2022 Notes), which are due June 1, 2022 unless earlier converted or repurchased in accordance with their terms. In November 2013 , we issued $575.0 million of 0% convertible senior notes (the 2018 Notes, and together with the 2022 Notes, the Notes), which are due November 1, 2018 unless earlier converted or repurchased in accordance with their terms. The Notes do not bear interest, and 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 of the Notes, 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 upon settlement. We currently intend to settle the principal amount of the Notes with cash. Convertible Date Initial Conversion Price per Share Initial Conversion Rate per $1,000 Par Value Initial Number of Shares 2022 Notes February 1, 2022 $ 134.75 7.42 shares 5,806,936 2018 Notes July 1, 2018 $ 73.88 13.54 shares 7,783,023 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 February 1, 2022 and July 1, 2018 , for the 2022 Notes and 2018 Notes, respectively (each, a Convertible Date), only under the following circumstances: • during any calendar quarter (and only during such calendar quarter) if the last reported sale price of our 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 applicable conversion price on each applicable trading day (in each case, the Conversion Condition); or • 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 applicable conversion rate on each such trading day; or • upon the occurrence of specified corporate events. On or after the applicable Convertible Date, 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, and such conversions will settle upon the applicable maturity date. Upon settlement, 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, pursuant to 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 respective Notes plus any accrued and unpaid special interest, if any. 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 respective 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 respective terms 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): June 30, 2018 December 31, 2017 Liability component: Principal: 2022 Notes $ 782,500 $ 782,500 2018 Notes 216,252 574,994 Less: debt issuance cost and debt discount, net of amortization 2022 Notes (136,832 ) (152,482 ) 2018 Notes (4,789 ) (31,576 ) Net carrying amount $ 857,131 $ 1,173,436 2022 Notes 2018 Notes Equity component recorded at issuance: Note $ 162,039 $ 155,319 Issuance cost (2,148 ) (3,257 ) Net amount recorded in equity $ 159,891 $ 152,062 The Conversion Condition for the 2022 Notes was met for the quarter ended June 30, 2018 , and therefore, our 2022 Notes became convertible at the holders’ option beginning on July 1, 2018 through September 30, 2018. Through the filing date, we have not received any conversion requests for our 2022 Notes. The Conversion Condition for the 2018 Notes was met for the quarters ended June 30, 2017, September 30, 2017, December 31, 2017 and March 31, 2018, respectively. Therefore, the 2018 Notes became convertible at the holders’ option beginning on July 1, 2017 and continued to be convertible at the holders’ option through June 30, 2018 . Any conversion requests received subsequent to June 30, 2018 , will be settled on the maturity date, which is November 1, 2018. During the six months ended June 30, 2018 , we paid cash to settle $358.7 million principal amount of the 2018 Notes and recorded a loss on early note conversions of $3.9 million . The loss on early note conversions for the three months ended June 30, 2018 was $3.1 million . As a result of the settlements, we also recorded a $6.0 million net reduction to additional paid-in capital, reflecting $473.2 million fair value adjustments to the conversion option, settled offset by a $467.2 million benefit from the 2018 Note Hedges (as defined below). For statement of cash flow presentation, we bifurcated the $358.7 million paid during the six months ended June 30, 2018 into two components: the portion of the repayment attributable to debt discount is classified as cash outflows from operating activities, and the portion of the repayment attributable to the principal is classified as cash outflows from financing activities. Based on additional conversion requests we have received through June 30, 2018 , we expect to settle in cash an aggregate of $54.4 million in principal amount of the 2018 Notes during the third quarter of 2018. For conversions received on or after the July 1, 2018 Convertible Date for the 2018 Notes, the remaining principal amount of the 2018 Notes of $161.8 million will be settled on the maturity date, which is November 1, 2018. We consider the fair value of the Notes at June 30, 2018 to be a Level 2 measurement. The estimated fair values of the Notes at June 30, 2018 and December 31, 2017 based on the closing trading price per $100 of the Notes were as follows (in thousands): June 30, 2018 December 31, 2017 2022 Notes $ 1,056,375 $ 897,778 2018 Notes $ 502,470 $ 1,015,554 As of June 30, 2018 , the remaining life of the 2022 Notes and 2018 Notes are 47 months and 4 months, respectively. The following table sets forth total interest expense recognized related to the Notes (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Amortization of debt issuance cost 2022 Notes $ 380 $ 122 $ 756 $ 122 2018 Notes 409 473 907 940 Amortization of debt discount 2022 Notes 7,493 2,388 14,894 2,388 2018 Notes 7,216 8,354 16,005 16,565 Total $ 15,498 $ 11,337 $ 32,562 $ 20,015 Effective interest rate of the liability component 2022 Notes 4.75% 2018 Notes 6.50% Note Hedges To minimize the impact of potential economic dilution upon conversion of the Notes, we entered into convertible note hedge transactions (the 2022 Note Hedge and 2018 Note Hedge, respectively, and collectively, the Note Hedges) with certain investment banks, with respect to our common stock concurrently with the issuance of the 2022 Notes and 2018 Notes. Purchase Shares (in thousands) 2022 Note Hedge $ 128,017 5,806,936 2018 Note Hedge $ 135,815 7,783,023 The Note Hedges cover shares of our common stock at a strike price per share that corresponds to the initial conversion price of the respective Notes, subject to adjustment, and are exercisable upon conversion of the Notes. If exercised, we may elect to receive cash, shares of our common stock, or a combination of cash and shares. We have accounted for the aggregate amount of purchase price for the Note Hedges as a reduction to additional paid-in capital. The Note Hedges will expire upon the maturity of the Notes. The Note Hedges are 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 Hedges are separate transactions and are not part of the terms of the Notes. Holders of the Notes will not have any rights with respect to the Note Hedges. The Note Hedges do not impact earnings per share, as they were entered into to offset any dilution from the Notes. During the six months ended June 30, 2018 , the Note Hedge counterparties paid $467.2 million in cash to holders of the 2018 Notes from the exercise of a portion of the 2018 Note Hedges. As of June 30, 2018 , 2,927,122 shares remain subject to the 2018 Note Hedge due to early conversions that have occurred through June 30, 2018 . Warrants Proceeds Shares Strike Price First Expiration Date (in thousands) 2022 Warrants $ 54,071 5,806,936 $ 203.40 September 1, 2022 2018 Warrants $ 84,525 7,783,023 $ 107.46 February 1, 2019 Separately, we entered into warrant transactions with certain investment banks, whereby we sold warrants to acquire, subject to adjustment, the number of shares of our common stock shown in the table above (the 2022 Warrants and 2018 Warrants, respectively, and collectively, the Warrants). If the average market value per share of our common stock for the reporting period, as measured under the Warrants, exceeds the strike price of the respective Warrants, such Warrants would have a dilutive effect on our earnings per share to the extent we report net income. According to the terms of each of the Warrants, the Warrants will be automatically exercised over a 60 trading day period beginning on the first expiration date of the respective Warrants as set forth above. The Warrants are separate transactions and are not remeasured through earnings each reporting period. The Warrants are not part of the Notes or Note Hedges, and have been accounted for as part of additional paid-in capital. Based on the stock price as of June 30, 2018 , we expect to issue additional shares in the first half of 2019 upon the exercise of the 2018 Warrants. As the warrants will be net share settled, the number of shares we will issue depends on the stock price over a 60 trading day period beginning on the first expiration date of the 2018 Warrants, which is February 1, 2019 . Based on the stock price as of June 30, 2018 , the number of shares to be issued upon exercise of the 2018 Warrants would be approximately 2.9 million |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income The components of accumulated other comprehensive (loss) income, net of tax, consist of the following (in thousands): June 30, 2018 December 31, 2017 *As Adjusted Foreign currency translation adjustment $ 803 $ 2,246 Net unrealized (loss) gain on investments, net of tax (1) (4,798 ) 3,521 Accumulated other comprehensive (loss) income $ (3,995 ) $ 5,767 (1) The net unrealized loss on investments as of June 30, 2018 includes a cumulative-effect adjustment, net of tax of $7.2 million resulting from our adoption of ASU 2016-01. See Note 2 for further details. *As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock Under our restated certificate of incorporation, we were authorized to issue 600,000,000 shares of common stock as of June 30, 2018 . Holders of our common stock are not entitled to receive dividends unless declared by our board of directors. As of June 30, 2018 , we had 177,945,946 shares of common stock outstanding and had reserved shares of common stock for future issuance as follows: June 30, 2018 Stock plans: Options outstanding 2,169,490 RSUs (1) 12,113,962 Shares of common stock available for future grants: 2012 Equity Incentive Plan (2) 31,722,900 2012 Employee Stock Purchase Plan (2) 10,948,982 Total shares of common stock reserved for future issuance 56,955,334 (1) Represents the number of shares issuable upon settlement of outstanding RSUs and performance-based RSUs, assuming 100% of the target number of shares are issuable for the 2018 performance-based RSUs, as discussed under the section entitled “RSUs” in Note 14. (2) Refer to Note 14 for a description of these plans. During the six months ended June 30, 2018 and 2017 , we issued a total of 3,670,082 shares and 3,822,126 |
Equity Awards
Equity Awards | 6 Months Ended |
Jun. 30, 2018 | |
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 (the 2005 Plan) and our 2012 Equity Incentive Plan (the 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 (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 equity 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 our board of directors. On January 1, 2018 , 8,713,793 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 (the 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 our 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 our board of directors. On January 1, 2018 , 1,742,758 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 six months ended June 30, 2018 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, 2017 3,369,732 $ 38.43 Exercised (621,330 ) 27.83 $ 77,936 Canceled (61,168 ) 68.12 Outstanding at March 31, 2018 2,687,234 40.21 Exercised (486,160 ) 18.02 $ 73,805 Canceled (31,584 ) 74.84 Outstanding at June 30, 2018 2,169,490 44.67 5.62 $ 277,264 Vested and expected to vest as of June 30, 2018 2,156,223 $ 44.49 5.61 $ 275,954 Vested and exercisable as of June 30, 2018 1,547,973 $ 29.47 4.50 $ 221,355 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 total fair value of stock options vested during the six months ended June 30, 2018 was $8.0 million . As of June 30, 2018 , total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options was approximately $16.2 million . The weighted-average remaining vesting period of unvested stock options at June 30, 2018 was 2.78 years . RSUs A summary of RSU activity for the six months ended June 30, 2018 is as follows: Number of Shares Weighted Average Grant Date Fair Value (Per Share) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 11,403,341 $ 81.50 Granted 4,078,322 151.13 Vested (1,854,662 ) 73.94 $ 281,822 Forfeited (348,849 ) 87.01 Outstanding at March 31, 2018 13,278,152 103.80 Granted 377,766 173.35 Vested (1,288,135 ) 71.70 $ 226,722 Forfeited (253,821 ) 99.79 Outstanding at June 30, 2018 12,113,962 109.43 $ 2,089,295 RSUs granted to employees under the 2012 Plan generally vest over a four -year period. As of June 30, 2018 , total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs was approximately $976.5 million and the weighted-average remaining vesting period was 3.03 years . Included in the RSU activity table above are RSUs with both service and performance-based vesting criteria that were granted to certain employees. The number of shares eligible to vest for the performance-based RSUs (PRSUs) will depend upon achievement of a corporate performance metric, with level of achievement determined by the Leadership Development and Compensation Committee of our Board of Directors in January of the year following the grant. The ultimate number of shares eligible to vest for PRSUs range from 0% to 180% of the target number of shares depending on achievement relative to the performance metric over the applicable period. The eligible shares subject to PRSUs granted during the six months ended June 30, 2018 will vest 33% in February 2019 and continue to vest quarterly for the remaining two subsequent years, contingent on each holder’s continuous status as a service provider on the applicable vesting dates. The PRSUs shown in the table above reflect the number of shares that would be eligible to vest at 100% of target performance, in the case of PRSUs for which achievement has not yet been determined, and reflect adjustments for over- or under- achievement, in the case of PRSUs for which achievement has already been determined. We recognized $37.3 million and $18.0 million of stock-based compensation expense, net of actual and estimated forfeitures, associated with PRSUs on a graded vesting basis during the six months ended June 30, 2018 and 2017 |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net income (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (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 stock options, RSUs, ESPP obligations, the Notes and the 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 stock options, RSUs, ESPP obligations, Notes and Warrants are excluded from the computation of diluted net income (loss) per share in periods in which the effect would be antidilutive. The following tables present the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 *As Adjusted *As Adjusted Numerator: Net loss $ (52,746 ) $ (55,804 ) $ (42,124 ) $ (77,318 ) Denominator: Weighted-average shares outstanding - basic and diluted 177,343,176 170,419,083 176,418,984 169,585,356 Net loss per share - basic and diluted $ (0.30 ) $ (0.33 ) $ (0.24 ) $ (0.46 ) *As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. 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: June 30, 2018 2017 Common stock options 2,169,490 4,992,394 Restricted stock units 12,113,962 13,270,087 ESPP obligations 243,685 286,176 2018 convertible senior notes 2,927,122 7,783,023 Warrants related to the issuance of 2018 convertible senior notes 7,783,023 7,783,023 2022 convertible senior notes 5,806,933 5,806,936 Warrants related to the issuance of 2022 convertible senior notes 5,806,933 5,806,936 Total potentially dilutive securities 36,851,148 45,728,575 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
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 (29)% and 13% for the three and six months ended June 30, 2018 , which was lower than the U.S. federal statutory tax rate of 21% . For the three months ended June 30, 2018 , the lower tax rate was primarily attributable to our loss from operations. For the six months ended June 30, 2018 , the lower tax rate was primarily attributable to the one-time indirect effect of Topic 606 on income taxes associated with intercompany adjustments offset by our loss from operations. Our effective tax rate was 3% and 4% for the three and six months ended June 30, 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 and excess tax benefits of stock-based compensation. We are subject to taxation in the United States and foreign jurisdictions. As of June 30, 2018 , our tax years 2004 to 2017 remain subject to examination in most jurisdictions. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 are presented in the table below (in thousands): Operating Leases Purchase Obligations (1) Other Total Years Ending December 31, Remainder of 2018 $ 22,608 $ 21,407 $ 419 $ 44,434 2019 48,833 38,702 837 88,372 2020 47,756 28,927 871 77,554 2021 46,351 12,360 888 59,599 2022 49,784 5,877 888 56,549 Thereafter 572,052 4,461 370 576,883 Total $ 787,384 $ 111,734 $ 4,273 $ 903,391 (1) Consists of future minimum payments under non-cancelable purchase commitments primarily related to data center and IT operations and sales and marketing activities. Not included in the table above are certain purchase commitments related to our future annual Knowledge user conferences and other customer or sales conferences. If we were to cancel these contractual commitments as of June 30, 2018 , we would have been obligated to pay cancellation penalties of approximately $16.4 million in aggregate. In addition to the amounts above, the repayment of our 2022 Notes with an aggregate principal amount of $782.5 million is due on June 1, 2022, and the repayment of our remaining 2018 Notes with an aggregate principal amount of $216.3 million is due on November 1, 2018. Refer to Note 11 for further information regarding our Notes. In addition to the obligations in the table above, approximately $13.7 million of unrecognized tax benefits have been recorded as liabilities as of June 30, 2018 . It is uncertain as to if or when such amounts may be settled. 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. |
Information about Geographic Ar
Information about Geographic Areas and Products | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, Six Months Ended June 30, 2018 2017 2018 2017 *As Adjusted *As Adjusted North America (1) $ 413,259 $ 306,159 $ 800,732 $ 600,014 EMEA (2) 160,644 108,361 313,070 210,046 Asia Pacific and other 57,153 33,738 106,476 66,969 Total revenues $ 631,056 $ 448,258 $ 1,220,278 $ 877,029 *As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. Property and equipment, net by geographic area were as follows (in thousands): June 30, 2018 December 31, 2017 North America (3) $ 185,522 $ 164,040 EMEA (2) 68,105 50,028 Asia Pacific and other 33,326 31,056 Total property and equipment, net $ 286,953 $ 245,124 (1) Revenues attributed to the United States were approximately 94% of North America revenues for each of the three and six months ended June 30, 2018 and the six months ended June 30, 2017, and 95% of North America revenues for the three months ended June 30, 2017. (2) Europe, the Middle East and Africa (3) Property and equipment, net attributed to the United States were approximately 86% and 89% of property and equipment, net attributable to North America as of June 30, 2018 and December 31, 2017 , respectively. Subscription revenues consist of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 *As Adjusted *As Adjusted Service management products $ 494,714 $ 356,370 $ 957,276 $ 700,162 ITOM products 90,568 46,302 171,331 90,094 Total subscription revenues $ 585,282 $ 402,672 $ 1,128,607 $ 790,256 *As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Effective January 1, 2018, we adopted the Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” as discussed further below in this Note 2. All amounts and disclosures set forth in this Form 10-Q have been updated to comply with the new standards, including previously reported amounts, which are labeled "as adjusted" in these condensed consolidated financial statements and related notes. Certain prior period amounts reported in our condensed consolidated financial statements and notes thereto have been reclassified to conform to the current period 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 (the SEC) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary under GAAP for fair statement of results for the interim periods presented have been included. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for other interim periods or future years. The condensed consolidated balance sheet as of December 31, 2017 is derived from audited financial statements as adjusted to reflect the impact of the full retrospective adoption of Topic 606; 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 our Annual Report on Form 10-K for the year ended December 31, 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. |
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 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 stand-alone selling price (SSP) for each distinct performance obligation included in customer contracts with multiple performance obligations, the period of benefit for deferred commissions, 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, and legal contingencies. Actual results could differ from those estimates. |
New Accounting Pronouncements Adopted in 2018 and New Accounting Pronouncements Pending Adoption | New Accounting Pronouncements Adopted in 2018 Stock-based Compensation In June 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting,” which is intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments. Currently, the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. This standard expands the scope of Topic 718 to include share-based payments issued to nonemployees for goods or services, aligning the accounting for share-based payments to nonemployees and employees. This standard is effective for our fiscal year beginning January 1, 2019 and early adoption is permitted. We early adopted this new standard effective January 1, 2018, and the adoption of this standard did not have a material impact on our condensed consolidated financial statements. As this standard was adopted on a prospective basis as of January 1, 2018, the adoption of this standard did not impact our previously reported financial statements for periods ended on or prior to December 31, 2017. The adoption of this standard did not impact our previously reported financial statements for the three months ended March 31, 2018 and 2017. Income Taxes In February 2018, the FASB issued ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which provides entities the option to reclassify tax effects stranded in accumulated other comprehensive income as a result of the 2017 Tax Cuts and Jobs Act (the Tax Act) to retained earnings. This standard is effective for our fiscal year beginning January 1, 2019 and early adoption is permitted. We early adopted this new standard effective January 1, 2018, with an immaterial amount of cumulative effect adjustment recorded to our accumulated deficit as of January 1, 2018. As this standard was adopted on a modified prospective basis as of January 1, 2018, the adoption of this standard did not impact our previously reported financial statements for periods ended on or prior to December 31, 2017. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allows us to record provisional amounts for the 2017 Tax Cuts and Jobs Act (the Tax Act) during a measurement period not to extend beyond one year of the enactment date, with further clarifications made recently with the issuance of ASU 2018-05. Through June 30, 2018, we did not have any significant adjustments to our provisional amounts. In light of the enactment of the Tax Act, we are assessing whether to change our indefinite reinvestment assertion, in which we consider earnings from our foreign operations to be indefinitely reinvested outside of the United States. Under guidance issued by the SEC, we are required to complete our assessment by the end of the measurement period described above. We will continue our analysis of these provisional amounts, which remain subject to change during the measurement period. We anticipate further guidance on accounting interpretations from the FASB and application of the law from the Department of Treasury. We expect to reach a final determination within the measurement period described above. 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. We adopted this new standard as of January 1, 2018 with an immaterial amount of cumulative effect adjustment recorded to our accumulated deficit as of January 1, 2018. As this standard was adopted on a modified prospective basis as of January 1, 2018, the adoption of this standard did not impact our previously reported financial statements for periods ended on or prior to December 31, 2017. Financial Instruments 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, with further clarifications made more recently. This new standard requires equity securities to be measured at fair value with changes in fair value recognized through net income, which results in greater variability in our net income. We adopted these new standards as of January 1, 2018 with a cumulative-effect adjustment, net of tax of $7.2 million recorded to our accumulated deficit as of January 1, 2018. This adjustment relates to the unrealized gain on our marketable equity securities as of December 31, 2017, which was previously included in accumulated other comprehensive income (loss) on our condensed consolidated balance sheet. As part of the adoption, we elected to apply the measurement alternative for our non-marketable equity investments that do not have readily determinable fair values, measuring them at cost, less any impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The adoption of these standards did not result in an adjustment for our non-marketable equity investments as our measurement alternative election requires adjustments to be recorded only on a prospective basis. As these standards were adopted on a modified prospective basis as of January 1, 2018, the adoption of these standards did not impact our previously reported financial statements for periods ended on or prior to December 31, 2017. Revenue from Contracts with Customers In May 2014, the FASB issued Topic 606, which supersedes the prior revenue recognition standard (Topic 605). Under Topic 606, 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 be entitled to 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. Topic 606 also includes Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. The Topic 606 standard 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 standard recognized at the date of initial application (modified retrospective method). We adopted the requirements of Topic 606 as of January 1, 2018, utilizing a full retrospective method. The most significant impact of the standard relates to the timing of revenue recognition related to our on-premises offerings, in which we grant customers the right to deploy our software on the customer’s own servers without significant penalty, the accounting for incremental costs to obtain a contract, and the classification of proceeds for Knowledge and other user forums as a reduction in sales and marketing expenses instead of as professional services and other revenues. The adoption of Topic 606 resulted in changes to our accounting policies for revenue recognition, unbilled receivables, deferred commissions, deferred revenue and customer deposits as detailed below. Under Topic 606, for our on-premises offerings, the requirement to have vendor specific objective evidence (VSOE) for undelivered elements was eliminated. As a result, for all periods presented, we have recognized as subscription revenues a portion of the sales price upon delivery of the software, compared to the prior practice under Topic 605 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 subscription revenues have not been billed, the revenues are primarily recorded as “unbilled receivables.” In addition, refundable amounts associated with customer contracts are recorded as “customer deposits.” In addition, under Topic 606, for all periods presented, we have deferred all incremental commission costs to obtain customer contracts, including indirect costs that are not tied to a specific contract, for both our on-premises offerings and our cloud-based subscription offerings. On initial contracts and contracts for increased purchases with existing customers (expansion contracts), these costs are primarily amortized over a period of benefit that we have determined to be five years. On renewal contracts, these costs are amortized over the renewal term. Additionally, for our on-premises offerings, consistent with the recognition of subscription revenue for on-premises offerings as described above, a portion of the commission cost is expensed upfront when the on-premises offering is made available. Our prior practice under Topic 605 was to defer only direct and incremental commission costs to obtain a contract and amortize those costs over the contract term, which is generally 12 to 36 months, for both our on-premises offerings and our cloud-based subscription offerings. The direct effect on income taxes resulting from the full retrospective adoption of the above-mentioned changes to revenues and commission expenses resulted in a cumulative income tax expense of $23.3 million recorded in the prior periods through December 31, 2017 . The indirect tax benefit of Topic 606 on income taxes associated with intercompany adjustments of $23.1 million , or $0.13 per basic and diluted share for the six months ended June 30, 2018 , was recorded in the first quarter of adoption during the three months ended In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (GILTI) provisions of the Tax Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of subsidiary foreign corporations. We are currently evaluating the impact of the Tax Act and this guidance on our condensed consolidated financial statements and have not yet elected an accounting policy to either recognize deferred taxes for basis differences expected to reverse as GILTI or to record GILTI as period costs if and when incurred. 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 the adoption 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, including related amendments subsequently issued by the FASB, is effective for our interim and annual periods beginning January 1, 2019, and early adoption is permitted. We are in the process of implementing changes to our existing systems and processes in conjunction with a review of existing vendor agreements and do not plan to early adopt this new standard. We currently anticipate that the adoption of this standard will have a material impact on our condensed consolidated balance sheets given that we had operating lease commitments in excess of $700 million as of June 30, 2018 |
Revenue Recognition | Revenue Recognition We report our revenues in two categories: (i) subscriptions and (ii) professional services and other. Revenues are recognized when control of these services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We determine revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, we satisfy a performance obligation Subscription revenues Subscription revenues are primarily comprised of subscription fees that give customers access to the ordered subscription service, related support and updates, if any, to the subscribed service during the subscription term. We recognize subscription revenues ratably over the contract term beginning on the commencement date of each contract, which is the date we make our services available to our customers. Our contracts with customers typically include a fixed amount of consideration, and are generally non-cancelable and without any refund-type provisions. We typically invoice our customers annually in advance for our subscription services upon execution of the initial contract or subsequent renewal, and our invoices are typically due within 30 days from the invoice date. Subscription revenues also include revenues from our on-premises offerings in which we grant customers the right to deploy our subscription service on the customers’ own servers without significant penalty. For these contracts, we account for the software element and the related support and updates separately as they are distinct performance obligations. Refer to the discussion below related to contracts with multiple performance obligations for further details. The transaction price is allocated to separate performance obligations on a relative SSP basis. Transaction price allocated to the software element is recognized upon delivery, which is when transfer of control of the software to the customer is complete. The transaction price allocated to the related support and updates are recognized ratably over the contract term. Professional services and other revenues Our professional services arrangements are primarily on a time-and-materials basis, and revenues on these arrangements are recognized as the services are delivered. We typically invoice our customers monthly in arrears for these professional services based on actual hours and expenses incurred, and our invoices are typically due within 30 days from the invoice date. Professional services revenues associated with fixed fee arrangements are recognized on a proportional performance basis. In instances where certain milestones are required to be met before revenues are recognized, we defer professional services revenues and the associated costs until milestone criteria have been met. Other revenues consist of fees from customer training delivered on-site or through publicly available classes. Contracts with multiple performance obligations We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. For these contracts, the transaction price is allocated to the separate performance obligations on a relative SSP basis. We determine SSP by considering the historical selling price of these performance obligations in similar transactions as well as other factors, including, but not limited to, competitive pricing of similar products, other software vendor pricing, industry publications and current pricing practices. Unbilled Receivables Unbilled receivables, which is a contract asset, represent subscription revenues that are recognized upon delivery of the software prior to being invoiced. Unbilled receivables are primarily presented under prepaid expenses and other current assets on our condensed consolidated balance sheets. Deferred Commissions Deferred commissions are the incremental selling costs that are associated with acquiring customer contracts and consist of sales commissions paid to our sales force and referral fees paid to independent third-parties. On initial and expansion contracts, commissions and referral fees are primarily deferred and amortized over a period of benefit that we have determined to be five years. On renewal contracts, commissions are deferred and amortized over the renewal term. Additionally, for our on-premises offerings, consistent with the recognition of subscription revenue for on-premises offerings, a portion of the commission cost is expensed upfront when the on-premises offering is made available. We determine the period of benefit by taking into consideration our customer contracts, our technology life cycle and other factors. We include amortization of deferred commissions in sales and marketing expense in our condensed consolidated statements of comprehensive income (loss). There was no impairment loss in relation to the costs capitalized for all periods presented. Deferred revenue Deferred revenue, which is a contract liability, consists primarily of payments received in advance of revenue recognition from our contracts with customers and is recognized as the revenue recognition criteria are met. Once our services are available to customers, we record amounts due in accounts receivable and in deferred revenue. To the extent we bill customers in advance of the billing period commencement date, the accounts receivable and corresponding deferred revenue amounts are netted to zero on our condensed consolidated balance sheets, unless such amounts have been paid as of the balance sheet date. Customer deposits Customer deposits primarily relate to payments received from customers which could be refundable pursuant to the terms of the contract and are presented under “accrued expenses and other current liabilities” on our condensed consolidated balance sheets. |
Strategic Investments | Our strategic investments consist of debt and non-marketable equity investments in privately-held companies in which we do not have a controlling interest or significant influence. Debt investments in privately-held companies are classified as available-for-sale and are recorded at their estimated fair value with changes in fair value recorded through accumulated other comprehensive income (loss). We have elected to apply the measurement alternative for equity investments that do not have readily determinable fair values, measuring them at cost, less any impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. An impairment loss is recorded when event or circumstance indicates a decline in value has occurred. We include these strategic investments in “Other assets” on the consolidated balance sheets.These investments are recorded at fair value using significant unobservable inputs or data in an inactive market and the valuation requires our judgment due to the absence of quoted prices in active markets and inherent lack of liquidity and are categorized accordingly as Level 3 in the fair value hierarchy. |
Fair Value Measurements | We determine the fair value of our security holdings based on pricing from our service providers 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. |
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. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The table below provides specified line items from our condensed consolidated statement of comprehensive loss (i) as previously reported and (ii) as adjusted to reflect the impact of the full retrospective adoption of Topic 606 (in thousands, except per share data): Three months ended June 30, 2017 Six months ended June 30, 2017 As Previously Reported As Adjusted As Previously Reported As Adjusted Revenues: Subscription $ 411,007 $ 402,672 $ 787,142 $ 790,256 Professional services and other 60,696 45,586 101,344 86,773 Total revenues 471,703 448,258 888,486 877,029 Cost of revenues: Professional services and other 45,892 46,335 91,964 92,044 Total cost of revenues 121,685 122,128 238,132 238,212 Gross profit 350,018 326,130 650,354 638,817 Operating expenses: Sales and marketing 247,224 222,393 459,310 426,132 Total operating expenses 388,755 363,924 731,581 698,403 Loss from operations (38,737 ) (37,794 ) (81,227 ) (59,586 ) Interest income and other income (expense), net (7,830 ) (8,485 ) (114 ) (756 ) Loss before income taxes (57,904 ) (57,616 ) (101,356 ) (80,357 ) Provision for income taxes (1,431 ) (1,812 ) (4,221 ) (3,039 ) Net loss $ (56,473 ) $ (55,804 ) $ (97,135 ) $ (77,318 ) Net loss per share - basic and diluted $ (0.33 ) $ (0.33 ) $ (0.57 ) $ (0.46 ) Weighted-average shares used to compute net loss per share - basic and diluted 170,419,083 170,419,083 169,585,356 169,585,356 Six months ended June 30, 2017 As Previously Reported As Adjusted Cash flows from operating activities: Net loss $ (97,135 ) $ (77,318 ) Adjustments to reconcile net loss to net cash provided by operating activities: Amortization of deferred commissions 50,587 43,086 Changes in operating assets and liabilities, net of effect of business combinations: Accounts receivable 51,039 55,186 Deferred commissions (61,287 ) (69,947 ) Prepaid expenses and other assets (11,945 ) (3,606 ) Deferred revenue 145,662 133,416 Accrued expenses and other liabilities (6,578 ) (10,216 ) Net cash provided by operating activities 316,149 316,333 Foreign currency effect on cash, cash equivalents and restricted cash 18,224 18,040 Year Ended December 31, 2017 As Previously Reported As Adjusted Assets Accounts receivable, net $ 434,895 $ 437,051 Current portion of deferred commissions 118,690 109,643 Prepaid expenses and other current assets 77,681 95,959 Deferred commissions, less current portion 85,530 224,252 Other assets 49,600 51,832 Liabilities Accrued expenses and other current liabilities 244,605 253,257 Current portion of deferred revenue 1,280,499 1,210,695 Deferred revenue, less current portion 39,884 36,120 Other long-term liabilities 43,239 65,884 Stockholder’s equity Accumulated other comprehensive (loss) income (889 ) 5,767 Accumulated deficit (1,146,520 ) (958,564 ) |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Available-for-sale Securities [Abstract] | |
Summary of Investments | The following is a summary of our available-for-sale investment securities, excluding marketable equity securities and those securities classified within cash and cash equivalents on the condensed consolidated balance sheets (in thousands): June 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Commercial paper $ 253,519 $ — $ (1 ) $ 253,518 Corporate notes and bonds 954,783 42 (4,146 ) 950,679 Certificates of deposit 32,742 2 — 32,744 U.S. government agency securities 113,166 — (666 ) 112,500 Total available-for-sale securities $ 1,354,210 $ 44 $ (4,813 ) $ 1,349,441 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Commercial paper $ 258,348 $ 1 $ (5 ) $ 258,344 Corporate notes and bonds 1,006,302 26 (3,084 ) 1,003,244 Certificates of deposit 33,084 — — 33,084 U.S. government agency securities 129,494 — (638 ) 128,856 Total available-for-sale securities $ 1,427,228 $ 27 $ (3,727 ) $ 1,423,528 |
Investments Classified by Contractual Maturity Date | The fair values of these securities, by remaining contractual maturity, are as follows (in thousands): June 30, 2018 Due within 1 year $ 1,044,812 Due in 1 year through 5 years 304,629 Total $ 1,349,441 |
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, excluding those securities classified as cash and cash equivalents on the condensed consolidated balance sheets (in thousands): June 30, 2018 Less than 12 Months 12 Months or Greater Total Fair Value Gross Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 14,931 $ (1 ) $ — $ — $ 14,931 $ (1 ) Corporate notes and bonds 850,411 (3,990 ) 74,722 (156 ) 925,133 (4,146 ) U.S. government agency securities 79,733 (537 ) 32,767 (129 ) 112,500 (666 ) Total $ 945,075 $ (4,528 ) $ 107,489 $ (285 ) $ 1,052,564 $ (4,813 ) December 31, 2017 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Commercial paper $ 14,809 $ (5 ) $ — $ — $ 14,809 $ (5 ) Corporate notes and bonds 819,113 (2,703 ) 141,874 (381 ) 960,987 (3,084 ) U.S. government agency securities 106,301 (593 ) 22,555 (45 ) 128,856 (638 ) Total $ 940,223 $ (3,301 ) $ 164,429 $ (426 ) $ 1,104,652 $ (3,727 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |
Assets 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 June 30, 2018 (in thousands): Level 1 Level 2 Total Cash equivalents: Money market funds $ 176,304 $ — $ 176,304 Commercial paper — 173,604 173,604 Corporate notes and bonds — 6,598 6,598 Short-term investments: Commercial paper — 253,518 253,518 Corporate notes and bonds — 678,619 678,619 Certificates of deposit — 29,844 29,844 U.S. government agency securities — 82,831 82,831 Long-term investments: Corporate notes and bonds — 272,060 272,060 Certificates of deposit — 2,900 2,900 U.S. government agency securities — 29,669 29,669 Total $ 176,304 $ 1,529,643 $ 1,705,947 The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at December 31, 2017 (in thousands): Level 1 Level 2 Total Cash equivalents: Money market funds $ 282,507 $ — $ 282,507 Commercial paper — 100,456 100,456 Corporate notes and bonds — 50,437 50,437 Short-term investments: Commercial paper — 258,344 258,344 Corporate notes and bonds — 688,316 688,316 Certificates of deposit — 17,950 17,950 U.S. government agency securities — 67,476 67,476 Marketable equity securities 20,717 — 20,717 Long-term investments: Corporate notes and bonds — 314,928 314,928 Certificates of deposit — 15,134 15,134 U.S. government agency securities — 61,380 61,380 Total $ 303,224 $ 1,574,421 $ 1,877,645 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill balances are presented below (in thousands): Carrying Amount Balance as of December 31, 2017 $ 128,728 Goodwill acquired 18,063 Foreign currency translation adjustments (3,784 ) Balance as of June 30, 2018 $ 143,007 |
Schedule of Intangible Assets | Intangible assets consist of the following (in thousands): June 30, December 31, 2018 2017 Developed technology $ 110,473 $ 102,349 Patents 35,130 31,030 Other 650 1,575 Total intangible assets 146,253 134,954 Less: accumulated amortization (58,527 ) (48,038 ) Net carrying amount $ 87,726 $ 86,916 |
Schedule of Estimated Future Amortization Expense Related to Intangible Assets | The following table presents the estimated future amortization expense related to intangible assets held at June 30, 2018 (in thousands): Years Ending December 31, 2018 $ 12,791 2019 24,686 2020 14,952 2021 12,558 2022 9,101 Thereafter 13,638 Total future amortization expense $ 87,726 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net, consists of the following (in thousands): June 30, December 31, 2018 2017 Computer equipment $ 391,524 $ 326,378 Computer software 53,894 46,413 Leasehold and other improvements 63,561 56,232 Furniture and fixtures 39,814 38,789 Building 6,744 7,084 Construction in progress 15,673 5,341 571,210 480,237 Less: accumulated depreciation (284,257 ) (235,113 ) Total property and equipment, net $ 286,953 $ 245,124 |
Derivative Contracts (Tables)
Derivative Contracts (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Values of Outstanding Derivative Contracts | The fair values of these outstanding derivative contracts as of June 30, 2018 were as follows (in thousands): Condensed Consolidated Balance Sheet Location June 30, 2018 Derivative Assets: Foreign currency derivative contracts Prepaid expenses and other current assets $ 14,676 Derivative Liabilities Foreign currency derivative contracts Accrued expenses and other current liabilities $ 844 |
Accrued Expenses and Other Cu31
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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): June 30, 2018 December 31, 2017 *As Adjusted Taxes payable $ 30,927 $ 25,617 Bonuses and commissions 70,104 84,972 Accrued compensation 51,827 45,428 Other employee related liabilities 47,762 44,284 Other 73,374 52,956 Total accrued expenses and other current liabilities $ 273,994 $ 253,257 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Convertible Notes Payable [Abstract] | |
Summary of Convertible Senior Notes | The Notes consisted of the following (in thousands): June 30, 2018 December 31, 2017 Liability component: Principal: 2022 Notes $ 782,500 $ 782,500 2018 Notes 216,252 574,994 Less: debt issuance cost and debt discount, net of amortization 2022 Notes (136,832 ) (152,482 ) 2018 Notes (4,789 ) (31,576 ) Net carrying amount $ 857,131 $ 1,173,436 2022 Notes 2018 Notes Equity component recorded at issuance: Note $ 162,039 $ 155,319 Issuance cost (2,148 ) (3,257 ) Net amount recorded in equity $ 159,891 $ 152,062 Convertible Date Initial Conversion Price per Share Initial Conversion Rate per $1,000 Par Value Initial Number of Shares 2022 Notes February 1, 2022 $ 134.75 7.42 shares 5,806,936 2018 Notes July 1, 2018 $ 73.88 13.54 shares 7,783,023 |
Schedule of Estimated Fair Values of Convertible Senior Notes | The estimated fair values of the Notes at June 30, 2018 and December 31, 2017 based on the closing trading price per $100 of the Notes were as follows (in thousands): June 30, 2018 December 31, 2017 2022 Notes $ 1,056,375 $ 897,778 2018 Notes $ 502,470 $ 1,015,554 |
Schedule of Interest Expense Related to Convertible Senior Notes | The following table sets forth total interest expense recognized related to the Notes (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Amortization of debt issuance cost 2022 Notes $ 380 $ 122 $ 756 $ 122 2018 Notes 409 473 907 940 Amortization of debt discount 2022 Notes 7,493 2,388 14,894 2,388 2018 Notes 7,216 8,354 16,005 16,565 Total $ 15,498 $ 11,337 $ 32,562 $ 20,015 Effective interest rate of the liability component 2022 Notes 4.75% 2018 Notes 6.50% |
Schedule of Note Hedges | Purchase Shares (in thousands) 2022 Note Hedge $ 128,017 5,806,936 2018 Note Hedge $ 135,815 7,783,023 |
Schedule of Warrants | Proceeds Shares Strike Price First Expiration Date (in thousands) 2022 Warrants $ 54,071 5,806,936 $ 203.40 September 1, 2022 2018 Warrants $ 84,525 7,783,023 $ 107.46 February 1, 2019 |
Accumulated Other Comprehensi33
Accumulated Other Comprehensive (Loss) Income (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive (Loss) Income, Net of Tax | The components of accumulated other comprehensive (loss) income, net of tax, consist of the following (in thousands): June 30, 2018 December 31, 2017 *As Adjusted Foreign currency translation adjustment $ 803 $ 2,246 Net unrealized (loss) gain on investments, net of tax (1) (4,798 ) 3,521 Accumulated other comprehensive (loss) income $ (3,995 ) $ 5,767 (1) The net unrealized loss on investments as of June 30, 2018 includes a cumulative-effect adjustment, net of tax of $7.2 million resulting from our adoption of ASU 2016-01. See Note 2 for further details. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Common Stock Outstanding and Reserved Shares of Common Stock for Future Issuance | As of June 30, 2018 , we had 177,945,946 shares of common stock outstanding and had reserved shares of common stock for future issuance as follows: June 30, 2018 Stock plans: Options outstanding 2,169,490 RSUs (1) 12,113,962 Shares of common stock available for future grants: 2012 Equity Incentive Plan (2) 31,722,900 2012 Employee Stock Purchase Plan (2) 10,948,982 Total shares of common stock reserved for future issuance 56,955,334 (1) Represents the number of shares issuable upon settlement of outstanding RSUs and performance-based RSUs, assuming 100% of the target number of shares are issuable for the 2018 performance-based RSUs, as discussed under the section entitled “RSUs” in Note 14. (2) Refer to Note 14 for a description of these plans. |
Equity Awards (Tables)
Equity Awards (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | A summary of the stock option activity for the six months ended June 30, 2018 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, 2017 3,369,732 $ 38.43 Exercised (621,330 ) 27.83 $ 77,936 Canceled (61,168 ) 68.12 Outstanding at March 31, 2018 2,687,234 40.21 Exercised (486,160 ) 18.02 $ 73,805 Canceled (31,584 ) 74.84 Outstanding at June 30, 2018 2,169,490 44.67 5.62 $ 277,264 Vested and expected to vest as of June 30, 2018 2,156,223 $ 44.49 5.61 $ 275,954 Vested and exercisable as of June 30, 2018 1,547,973 $ 29.47 4.50 $ 221,355 |
Schedule of Restricted Stock Unit Activity | A summary of RSU activity for the six months ended June 30, 2018 is as follows: Number of Shares Weighted Average Grant Date Fair Value (Per Share) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 11,403,341 $ 81.50 Granted 4,078,322 151.13 Vested (1,854,662 ) 73.94 $ 281,822 Forfeited (348,849 ) 87.01 Outstanding at March 31, 2018 13,278,152 103.80 Granted 377,766 173.35 Vested (1,288,135 ) 71.70 $ 226,722 Forfeited (253,821 ) 99.79 Outstanding at June 30, 2018 12,113,962 109.43 $ 2,089,295 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The following tables present the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 *As Adjusted *As Adjusted Numerator: Net loss $ (52,746 ) $ (55,804 ) $ (42,124 ) $ (77,318 ) Denominator: Weighted-average shares outstanding - basic and diluted 177,343,176 170,419,083 176,418,984 169,585,356 Net loss per share - basic and diluted $ (0.30 ) $ (0.33 ) $ (0.24 ) $ (0.46 ) |
Schedule 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: June 30, 2018 2017 Common stock options 2,169,490 4,992,394 Restricted stock units 12,113,962 13,270,087 ESPP obligations 243,685 286,176 2018 convertible senior notes 2,927,122 7,783,023 Warrants related to the issuance of 2018 convertible senior notes 7,783,023 7,783,023 2022 convertible senior notes 5,806,933 5,806,936 Warrants related to the issuance of 2022 convertible senior notes 5,806,933 5,806,936 Total potentially dilutive securities 36,851,148 45,728,575 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments | Future minimum payments under our non-cancelable operating leases and other contractual commitments outstanding as of June 30, 2018 are presented in the table below (in thousands): Operating Leases Purchase Obligations (1) Other Total Years Ending December 31, Remainder of 2018 $ 22,608 $ 21,407 $ 419 $ 44,434 2019 48,833 38,702 837 88,372 2020 47,756 28,927 871 77,554 2021 46,351 12,360 888 59,599 2022 49,784 5,877 888 56,549 Thereafter 572,052 4,461 370 576,883 Total $ 787,384 $ 111,734 $ 4,273 $ 903,391 (1) Consists of future minimum payments under non-cancelable purchase commitments primarily related to data center and IT operations and sales and marketing activities. Not included in the table above are certain purchase commitments related to our future annual Knowledge user conferences and other customer or sales conferences. If we were to cancel these contractual commitments as of June 30, 2018 , we would have been obligated to pay cancellation penalties of approximately $16.4 million in aggregate. |
Information about Geographic 38
Information about Geographic Areas and Products (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segments, Geographical Areas [Abstract] | |
Schedule of Revenues and Property and Equipment, net by Geographic Area | Revenues by geographic area, based on the location of our users, were as follows for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 *As Adjusted *As Adjusted North America (1) $ 413,259 $ 306,159 $ 800,732 $ 600,014 EMEA (2) 160,644 108,361 313,070 210,046 Asia Pacific and other 57,153 33,738 106,476 66,969 Total revenues $ 631,056 $ 448,258 $ 1,220,278 $ 877,029 *As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. Property and equipment, net by geographic area were as follows (in thousands): June 30, 2018 December 31, 2017 North America (3) $ 185,522 $ 164,040 EMEA (2) 68,105 50,028 Asia Pacific and other 33,326 31,056 Total property and equipment, net $ 286,953 $ 245,124 (1) Revenues attributed to the United States were approximately 94% of North America revenues for each of the three and six months ended June 30, 2018 and the six months ended June 30, 2017, and 95% of North America revenues for the three months ended June 30, 2017. (2) Europe, the Middle East and Africa (3) Property and equipment, net attributed to the United States were approximately 86% and 89% of property and equipment, net attributable to North America as of June 30, 2018 and December 31, 2017 |
Schedule of Subscription Revenue | Subscription revenues consist of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 *As Adjusted *As Adjusted Service management products $ 494,714 $ 356,370 $ 957,276 $ 700,162 ITOM products 90,568 46,302 171,331 90,094 Total subscription revenues $ 585,282 $ 402,672 $ 1,128,607 $ 790,256 *As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | Jan. 01, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | [1] | Jun. 30, 2018 | Jun. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Capitalized contract cost, amortization period | 5 years | |||||||
Benefit from (provision for) income taxes | $ 11,897,000 | $ (1,812,000) | $ (6,085,000) | $ (3,039,000) | [1] | |||
Earnings per share, basic and diluted (in dollars per share) | $ (0.30) | $ (0.33) | $ (0.24) | $ (0.46) | ||||
Capitalized contract cost, impairment loss | $ 0 | |||||||
Operating lease commitments | $ 700,000,000 | $ 700,000,000 | ||||||
Accounting Standards Update 2014-09 | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Benefit from (provision for) income taxes | $ 23,100,000 | |||||||
Earnings per share, basic and diluted (in dollars per share) | $ 0.13 | |||||||
Commissions for on premise support and cloud-based subscription period of benefit, amortization period | 5 years | |||||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Benefit from (provision for) income taxes | $ 23,300,000 | |||||||
Minimum | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Contract term | 12 months | |||||||
Maximum | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Contract term | 36 months | |||||||
Retained Earnings | Accounting Standards Update 2016-01 | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Cumulative-effect adjustment | $ 7,200,000 | $ 7,200,000 | $ 7,200,000 | |||||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Impact on Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Assets | |||
Accounts receivable, net | $ 367,598 | $ 437,051 | [1] |
Current portion of deferred commissions | 119,068 | 109,643 | [1] |
Prepaid expenses and other current assets | 115,305 | 95,959 | [1] |
Deferred commissions, less current portion | 239,523 | 224,252 | [1] |
Other assets | 59,417 | 51,832 | [1] |
Liabilities | |||
Accrued expenses and other current liabilities | 273,994 | 253,257 | [1] |
Current portion of deferred revenue | 1,320,928 | 1,210,695 | [1] |
Deferred revenue, less current portion | 44,389 | 36,120 | [1] |
Other long-term liabilities | 54,076 | 65,884 | [1] |
Stockholders’ equity: | |||
Accumulated other comprehensive (loss) income | (3,995) | 5,767 | [1] |
Accumulated deficit | $ (994,200) | (958,564) | [1] |
Scenario, Previously Reported | |||
Assets | |||
Accounts receivable, net | 434,895 | ||
Current portion of deferred commissions | 118,690 | ||
Prepaid expenses and other current assets | 77,681 | ||
Deferred commissions, less current portion | 85,530 | ||
Other assets | 49,600 | ||
Liabilities | |||
Accrued expenses and other current liabilities | 244,605 | ||
Current portion of deferred revenue | 1,280,499 | ||
Deferred revenue, less current portion | 39,884 | ||
Other long-term liabilities | 43,239 | ||
Stockholders’ equity: | |||
Accumulated other comprehensive (loss) income | (889) | ||
Accumulated deficit | $ (1,146,520) | ||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Impact on Statements of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||||
Revenues: | |||||||
Subscription | $ 585,282 | $ 402,672 | [1] | $ 1,128,607 | $ 790,256 | [1] | |
Professional services and other | 45,774 | 45,586 | [1] | 91,671 | 86,773 | [1] | |
Total revenues | 631,056 | 448,258 | [1] | 1,220,278 | 877,029 | [1] | |
Cost of revenues: | |||||||
Professional services and other | [2] | 51,466 | 46,335 | [1] | 99,541 | 92,044 | [1] |
Total cost of revenues | [2] | 153,165 | 122,128 | [1] | 296,638 | 238,212 | [1] |
Gross profit | 477,891 | 326,130 | [1] | 923,640 | 638,817 | [1] | |
Operating expenses: | |||||||
Sales and marketing | [2] | 310,869 | 222,393 | [1] | 594,570 | 426,132 | [1] |
Total operating expenses | [2] | 509,880 | 363,924 | [1] | 975,912 | 698,403 | [1] |
Loss from operations | (31,989) | (37,794) | [1] | (52,272) | (59,586) | [1] | |
Interest income and other income (expense), net | 6,638 | (8,485) | [1] | 36,625 | (756) | [1] | |
Loss before income taxes | (40,849) | (57,616) | [1] | (48,209) | (80,357) | [1] | |
Benefit from (provision for) income taxes | 11,897 | (1,812) | [1] | (6,085) | (3,039) | [1] | |
Net loss | $ (52,746) | $ (55,804) | [1] | $ (42,124) | $ (77,318) | [1],[3] | |
Net loss per share - basic and diluted (in dollars per share) | $ (0.30) | $ (0.33) | [1] | $ (0.24) | $ (0.46) | ||
Weighted-average shares used to compute net loss per share - basic and diluted (in shares) | 177,343,176 | 170,419,083 | [1] | 176,418,984 | 169,585,356 | ||
Scenario, Previously Reported | |||||||
Revenues: | |||||||
Subscription | $ 411,007 | $ 787,142 | |||||
Professional services and other | 60,696 | 101,344 | |||||
Total revenues | 471,703 | 888,486 | |||||
Cost of revenues: | |||||||
Professional services and other | 45,892 | 91,964 | |||||
Total cost of revenues | 121,685 | 238,132 | |||||
Gross profit | 350,018 | 650,354 | |||||
Operating expenses: | |||||||
Sales and marketing | 247,224 | 459,310 | |||||
Total operating expenses | 388,755 | 731,581 | |||||
Loss from operations | (38,737) | (81,227) | |||||
Interest income and other income (expense), net | (7,830) | (114) | |||||
Loss before income taxes | (57,904) | (101,356) | |||||
Benefit from (provision for) income taxes | (1,431) | (4,221) | |||||
Net loss | $ (56,473) | $ (97,135) | |||||
Net loss per share - basic and diluted (in dollars per share) | $ (0.33) | $ (0.57) | |||||
Weighted-average shares used to compute net loss per share - basic and diluted (in shares) | 170,419,083 | 169,585,356 | |||||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details | ||||||
[2] | Includes stock-based compensation as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 *As Adjusted *As Adjusted Cost of revenues: Subscription $ 12,538 $ 8,942 $ 23,829 $ 16,880 Professional services and other 8,342 7,617 15,903 14,492 Sales and marketing 57,069 42,287 109,151 80,688 Research and development 33,780 22,731 62,378 44,532 General and administrative 23,831 16,489 45,640 31,343 | ||||||
[3] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Impact on Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||||
Cash flows from operating activities: | |||||||
Net loss | $ (52,746) | $ (55,804) | [1] | $ (42,124) | $ (77,318) | [1],[2] | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Amortization of deferred commissions | 64,304 | 43,086 | [2] | ||||
Changes in operating assets and liabilities, net of effect of business combinations: | |||||||
Accounts receivable | 65,940 | 55,186 | [2] | ||||
Deferred commissions | (92,995) | (69,947) | [2] | ||||
Prepaid expenses and other assets | 2,040 | (3,606) | [2] | ||||
Deferred revenue | 131,089 | 133,416 | [2] | ||||
Accrued expenses and other liabilities | 31,720 | (10,216) | [2] | ||||
Net cash provided by operating activities | 375,976 | 316,333 | [2] | ||||
Foreign currency effect on cash, cash equivalents and restricted cash | [3] | $ (7,505) | 18,040 | [2] | |||
Scenario, Previously Reported | |||||||
Cash flows from operating activities: | |||||||
Net loss | $ (56,473) | (97,135) | |||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Amortization of deferred commissions | 50,587 | ||||||
Changes in operating assets and liabilities, net of effect of business combinations: | |||||||
Accounts receivable | 51,039 | ||||||
Deferred commissions | (61,287) | ||||||
Prepaid expenses and other assets | (11,945) | ||||||
Deferred revenue | 145,662 | ||||||
Accrued expenses and other liabilities | (6,578) | ||||||
Net cash provided by operating activities | 316,149 | ||||||
Foreign currency effect on cash, cash equivalents and restricted cash | $ 18,224 | ||||||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details | ||||||
[2] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. | ||||||
[3] | During the three months ended December 31, 2017, we adopted Accounting Standards Update 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” 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. Accordingly, we have recast our prior period condensed consolidated statement of cash flows to conform to the current presentation. The impact of the adoption for the six months ended June 30, 2017 is not material. |
Investments - Summary of Invest
Investments - Summary of Investments (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 1,354,210 | $ 1,427,228 |
Gross Unrealized Gains | 44 | 27 |
Gross Unrealized Losses | (4,813) | (3,727) |
Estimated Fair Value | 1,349,441 | 1,423,528 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 253,519 | 258,348 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (1) | (5) |
Estimated Fair Value | 253,518 | 258,344 |
Corporate notes and bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 954,783 | 1,006,302 |
Gross Unrealized Gains | 42 | 26 |
Gross Unrealized Losses | (4,146) | (3,084) |
Estimated Fair Value | 950,679 | 1,003,244 |
Certificates of deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 32,742 | 33,084 |
Gross Unrealized Gains | 2 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 32,744 | 33,084 |
U.S. government agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 113,166 | 129,494 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (666) | (638) |
Estimated Fair Value | $ 112,500 | $ 128,856 |
Investments - Additional Inform
Investments - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($)security | Jun. 30, 2018USD ($)security | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale, maturities term maximum | 36 months | |||
Available-for-sale, number of securities in unrealized loss positions | security | 366 | 366 | ||
Other than temporary impairment losses | $ 0 | |||
Marketable equity securities, unrealized gains | $ 12,200,000 | |||
Tax effect through accumulated other comprehensive loss | $ 4,500,000 | |||
Other long-term investments | $ 4,800,000 | 4,800,000 | $ 4,800,000 | |
Level 3 | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Strategic investments | 1,000,000 | 1,000,000 | 1,000,000 | |
Marketable equity securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Marketable equity securities | $ 20,700,000 | |||
Marketable equity securities, total proceeds from sale | 40,000,000 | |||
Marketable equity securities, realized gains | $ 800,000 | $ 19,300,000 |
Investments - Maturities of ava
Investments - Maturities of available-for-sale investments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | [1] |
Available-for-sale Securities [Abstract] | |||
Due within 1 year | $ 1,044,812 | $ 1,052,803 | |
Due in 1 year through 5 years | 304,629 | $ 391,442 | |
Total | $ 1,349,441 | ||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
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 | Jun. 30, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, fair value, less than 12 months | $ 945,075 | $ 940,223 |
Available-for-sale securities, gross unrealized losses, less than 12 months | (4,528) | (3,301) |
Available-for-sale securities, fair value, 12 months or greater | 107,489 | 164,429 |
Available-for-sale securities, gross unrealized losses, 12 months or greater | (285) | (426) |
Fair value | 1,052,564 | 1,104,652 |
Gross unrealized losses | (4,813) | (3,727) |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, fair value, less than 12 months | 14,931 | 14,809 |
Available-for-sale securities, gross unrealized losses, less than 12 months | (1) | (5) |
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 | 14,931 | 14,809 |
Gross unrealized losses | (1) | (5) |
Corporate notes and bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, fair value, less than 12 months | 850,411 | 819,113 |
Available-for-sale securities, gross unrealized losses, less than 12 months | (3,990) | (2,703) |
Available-for-sale securities, fair value, 12 months or greater | 74,722 | 141,874 |
Available-for-sale securities, gross unrealized losses, 12 months or greater | (156) | (381) |
Fair value | 925,133 | 960,987 |
Gross unrealized losses | (4,146) | (3,084) |
U.S. government agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, fair value, less than 12 months | 79,733 | 106,301 |
Available-for-sale securities, gross unrealized losses, less than 12 months | (537) | (593) |
Available-for-sale securities, fair value, 12 months or greater | 32,767 | 22,555 |
Available-for-sale securities, gross unrealized losses, 12 months or greater | (129) | (45) |
Fair value | 112,500 | 128,856 |
Gross unrealized losses | $ (666) | $ (638) |
Fair Value Measurements (Detail
Fair Value Measurements (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 1,705,947 | $ 1,877,645 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 176,304 | 303,224 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 1,529,643 | 1,574,421 |
Cash equivalents | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 176,304 | 282,507 |
Cash equivalents | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 173,604 | 100,456 |
Cash equivalents | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 6,598 | 50,437 |
Cash equivalents | Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 176,304 | 282,507 |
Cash equivalents | Level 1 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Cash equivalents | Level 1 | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 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 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 173,604 | 100,456 |
Cash equivalents | Level 2 | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 6,598 | 50,437 |
Short-term investments | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 253,518 | 258,344 |
Short-term investments | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 678,619 | 688,316 |
Short-term investments | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 29,844 | 17,950 |
Short-term investments | U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 82,831 | 67,476 |
Short-term investments | Marketable equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 20,717 | |
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 | 20,717 | |
Short-term investments | Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 253,518 | 258,344 |
Short-term investments | Level 2 | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 678,619 | 688,316 |
Short-term investments | Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 29,844 | 17,950 |
Short-term investments | Level 2 | U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 82,831 | 67,476 |
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 | 272,060 | 314,928 |
Long-term investments | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2,900 | 15,134 |
Long-term investments | U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 29,669 | 61,380 |
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 | 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 | 272,060 | 314,928 |
Long-term investments | Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2,900 | 15,134 |
Long-term investments | Level 2 | U.S. government agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 29,669 | $ 61,380 |
Business Combinations (Details)
Business Combinations (Details) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2018USD ($)company | Jun. 30, 2017USD ($)company | Dec. 31, 2017USD ($) | [1] | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 143,007 | $ 128,728 | ||
2018 Business Combinations | ||||
Business Acquisition [Line Items] | ||||
Number of privately-held companies acquired | company | 2 | |||
Payments to acquire businesses | $ 25,100 | |||
Goodwill | 18,100 | |||
Net deferred tax liabilities | (2,200) | |||
2017 Business Combinations | ||||
Business Acquisition [Line Items] | ||||
Number of privately-held companies acquired | company | 2 | |||
Payments to acquire businesses | $ 21,600 | |||
Goodwill | 16,200 | |||
Net deferred tax liabilities | (3,600) | |||
Developed technology | 2018 Business Combinations | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 9,000 | |||
Weighted average useful life | 5 years | |||
Developed technology | 2017 Business Combinations | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 9,000 | |||
Weighted average useful life | 5 years | |||
General and Administrative Expense | ||||
Business Acquisition [Line Items] | ||||
Aggregate acquisition-related costs | $ 700 | $ 1,400 | ||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018USD ($) | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | $ 128,728 | [1] |
Goodwill acquired | 18,063 | |
Foreign currency translation adjustments | (3,784) | |
Goodwill, end of period | $ 143,007 | |
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total intangible assets | $ 146,253 | $ 134,954 | |
Less: accumulated amortization | (58,527) | (48,038) | |
Net Carrying Amount | 87,726 | 86,916 | [1] |
2,018 | 12,791 | ||
2,019 | 24,686 | ||
2,020 | 14,952 | ||
2,021 | 12,558 | ||
2,022 | 9,101 | ||
Thereafter | 13,638 | ||
Total future amortization expense | 87,726 | ||
Developed technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total intangible assets | 110,473 | 102,349 | |
Patents | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total intangible assets | 35,130 | 31,030 | |
Other | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total intangible assets | $ 650 | $ 1,575 | |
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 6.1 | $ 4.8 | $ 11.8 | $ 9.5 |
Patents | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net | $ 4.1 | $ 6.2 | ||
Weighted average useful life | 10 years | 10 years |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | $ 571,210 | $ 571,210 | $ 480,237 | |||
Less: accumulated depreciation | (284,257) | (284,257) | (235,113) | |||
Total property and equipment, net | 286,953 | 286,953 | 245,124 | [1] | ||
Depreciation | 29,200 | $ 22,200 | 56,800 | $ 42,600 | ||
Computer equipment | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 391,524 | 391,524 | 326,378 | |||
Computer software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 53,894 | 53,894 | 46,413 | |||
Leasehold and other improvements | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 63,561 | 63,561 | 56,232 | |||
Furniture and fixtures | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 39,814 | 39,814 | 38,789 | |||
Building | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 6,744 | 6,744 | 7,084 | |||
Construction in progress | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | $ 15,673 | $ 15,673 | $ 5,341 | |||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Derivative Contracts (Details)
Derivative Contracts (Details) - Foreign Currency Derivative Contracts - Not Designated as Hedges - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Jun. 30, 2018 | |
Derivatives, Fair Value [Line Items] | ||
Derivative, term of contract | 12 months | |
Derivative, notional amount | $ 851,000 | |
Level 2 | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 14,676 | |
Level 2 | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | $ 844 |
Deferred Revenue and Performa54
Deferred Revenue and Performance Obligations - Revenues Recognized from Deferred Revenues (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Recognition of deferred revenue | $ 825 |
Deferred Revenue and Performa55
Deferred Revenue and Performance Obligations - Transaction Price Allocated to the Remaining Performance Obligations (Details) $ in Billions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Remaining non-cancelable performance obligations | $ 4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied (percent) | 50.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Accrued Expenses and Other Cu56
Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Disclosure Summary Of Accrued Expenses And Other Current Liabilities [Abstract] | |||
Taxes payable | $ 30,927 | $ 25,617 | |
Bonuses and commissions | 70,104 | 84,972 | |
Accrued compensation | 51,827 | 45,428 | |
Other employee related liabilities | 47,762 | 44,284 | |
Other | 73,374 | 52,956 | |
Total accrued expenses and other current liabilities | $ 273,994 | $ 253,257 | [1] |
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Convertible Senior Notes - Addi
Convertible Senior Notes - Additional Information (Details) | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2018USD ($)shares | Jun. 30, 2018USD ($)daytrading_dayshares | Jun. 30, 2017USD ($) | Feb. 01, 2019shares | Nov. 01, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Nov. 30, 2013USD ($) | ||
Debt Instrument [Line Items] | |||||||||
Percentage of purchase price of notes which should be paid upon fundamental change (percent) | 100.00% | ||||||||
Benefit from exercise of Note Hedge | $ 467,176,000 | $ 0 | [1] | ||||||
Estimated fair value of the note based on the closing trading price | $ 100 | $ 100 | $ 100 | ||||||
Warrant exercise period | trading_day | 60 | ||||||||
2018 Note Hedge | |||||||||
Debt Instrument [Line Items] | |||||||||
Benefit from exercise of Note Hedge | $ 467,200,000 | ||||||||
Note hedged shares of common stock remaining | shares | 2,927,122 | 2,927,122 | |||||||
Stock Price Trigger Measurement | |||||||||
Debt Instrument [Line Items] | |||||||||
Trading days threshold | day | 20 | ||||||||
Consecutive trading days threshold, total | day | 30 | ||||||||
Threshold percentage of stock price trigger (percent) | 130.00% | ||||||||
Notes Price Trigger Measurement | |||||||||
Debt Instrument [Line Items] | |||||||||
Trading days threshold | day | 5 | ||||||||
Consecutive trading days threshold, total | day | 5 | ||||||||
Threshold percentage of stock price trigger (percent) | 98.00% | ||||||||
Conversion of notes base conversion price | $ 1,000 | ||||||||
2022 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount of debt | $ 782,500,000 | $ 782,500,000 | $ 782,500,000 | 782,500,000 | |||||
Stated interest rate (percent) | 0.00% | ||||||||
Remaining discount amortization period | 47 months | ||||||||
2018 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount of debt | 216,252,000 | $ 216,252,000 | $ 574,994,000 | $ 575,000,000 | |||||
Stated interest rate (percent) | 0.00% | ||||||||
Settlement of principal | 358,700,000 | ||||||||
Loss on extinguishment of debt | $ 3,100,000 | 3,900,000 | |||||||
Conversion option settlement, reduction to additional paid-in capital | 6,000,000 | ||||||||
Conversion option settlement, fair value adjustments | $ 473,200,000 | ||||||||
Remaining discount amortization period | 4 months | ||||||||
2018 Notes | Scenario, Forecast | |||||||||
Debt Instrument [Line Items] | |||||||||
Request for conversion of Notes | $ 161,800,000 | $ 54,400,000 | |||||||
Shares to be issued upon exercise of 2018 Warrants | shares | 2,900,000 | ||||||||
2018 Warrants | |||||||||
Debt Instrument [Line Items] | |||||||||
Shares to be issued upon exercise of 2018 Warrants | shares | 7,783,023 | 7,783,023 | |||||||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Convertible Senior Notes - Sche
Convertible Senior Notes - Schedule of Conversion (Details) | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Nov. 30, 2013shares$ / shares | Jun. 30, 2017$ / shares | Jun. 30, 2017shares$ / shares | |
2022 Notes | |||
Debt Instrument [Line Items] | |||
Initial Conversion Price per Share (in dollars per share) | $ / shares | $ 134.75 | $ 134.75 | |
Initial Conversion Rate per $1,000 Par Value | 0.00742 | ||
Initial Number of Shares (in shares) | shares | 5,806,936 | ||
2018 Notes | |||
Debt Instrument [Line Items] | |||
Initial Conversion Price per Share (in dollars per share) | $ / shares | $ 73.88 | ||
Initial Conversion Rate per $1,000 Par Value | 0.01354 | ||
Initial Number of Shares (in shares) | shares | 7,783,023 |
Convertible Senior Notes - Sc59
Convertible Senior Notes - Schedule of Notes Payable (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Nov. 30, 2013 |
Debt Instrument [Line Items] | ||||
Net carrying amount | $ 857,131 | $ 1,173,436 | ||
2022 Notes | ||||
Debt Instrument [Line Items] | ||||
Principal | 782,500 | 782,500 | $ 782,500 | |
Less: debt issuance cost and debt discount, net of amortization | (136,832) | (152,482) | ||
2018 Notes | ||||
Debt Instrument [Line Items] | ||||
Principal | 216,252 | 574,994 | $ 575,000 | |
Less: debt issuance cost and debt discount, net of amortization | $ (4,789) | $ (31,576) |
Convertible Senior Notes - Equi
Convertible Senior Notes - Equity Components (Details) $ in Thousands | Jun. 30, 2018USD ($) |
2022 Notes | |
Debt Instrument [Line Items] | |
Note | $ 162,039 |
Issuance cost | (2,148) |
Net amount recorded in equity | 159,891 |
2018 Notes | |
Debt Instrument [Line Items] | |
Note | 155,319 |
Issuance cost | (3,257) |
Net amount recorded in equity | $ 152,062 |
Convertible Senior Notes - Sc61
Convertible Senior Notes - Schedule of Fair Value (Details) - Level 2 - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
2022 Notes | ||
Debt Instrument [Line Items] | ||
Estimated fair values of notes | $ 1,056,375 | $ 897,778 |
2018 Notes | ||
Debt Instrument [Line Items] | ||
Estimated fair values of notes | $ 502,470 | $ 1,015,554 |
Convertible Senior Notes - Sc62
Convertible Senior Notes - Schedule of Interest Expense Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Debt Instrument [Line Items] | |||||
Total | $ 15,498 | $ 11,337 | $ 32,562 | $ 20,015 | [1] |
2022 Notes | |||||
Debt Instrument [Line Items] | |||||
Amortization of debt issuance cost | 380 | 122 | 756 | 122 | |
Amortization of debt discount | $ 7,493 | $ 2,388 | $ 14,894 | $ 2,388 | |
Effective interest rate of the liability component | 4.75% | 4.75% | 4.75% | 4.75% | |
2018 Notes | |||||
Debt Instrument [Line Items] | |||||
Amortization of debt issuance cost | $ 409 | $ 473 | $ 907 | $ 940 | |
Amortization of debt discount | $ 7,216 | $ 8,354 | $ 16,005 | $ 16,565 | |
Effective interest rate of the liability component | 6.50% | 6.50% | 6.50% | 6.50% | |
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Convertible Senior Notes - Sc63
Convertible Senior Notes - Schedule of Note Hedges (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | [1] | |
Derivative [Line Items] | |||
Purchase | $ 0 | $ 128,017 | |
2022 Note Hedge | |||
Derivative [Line Items] | |||
Purchase | $ 128,017 | ||
Shares | 5,806,936 | ||
2018 Note Hedge | |||
Derivative [Line Items] | |||
Purchase | $ 135,815 | ||
Shares | 7,783,023 | ||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Convertible Senior Notes - Sc64
Convertible Senior Notes - Schedule of Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | [1] | |
Class of Warrant or Right [Line Items] | |||
Proceeds | $ 0 | $ 54,071 | |
2022 Warrants | |||
Class of Warrant or Right [Line Items] | |||
Proceeds | $ 54,071 | ||
Shares | 5,806,936 | ||
Strike Price (in dollars per share) | $ 203.40 | ||
2018 Warrants | |||
Class of Warrant or Right [Line Items] | |||
Proceeds | $ 84,525 | ||
Shares | 7,783,023 | ||
Strike Price (in dollars per share) | $ 107.46 | ||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Accumulated Other Comprehensi65
Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Foreign currency translation adjustment | $ 803 | $ 2,246 | ||
Net unrealized (loss) gain on investments, net of tax | (4,798) | 3,521 | ||
Accumulated other comprehensive (loss) income | (3,995) | $ 5,767 | [1] | |
Accounting Standards Update 2016-01 | Retained Earnings | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Cumulative-effect adjustment | $ 7,200 | $ 7,200 | ||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Equity [Abstract] | ||
Shares of common stock, authorized (in shares) | 600,000,000 | |
Shares of common stock, issued and sold (in shares) | 177,945,946 | |
Stock issued during period, shares, new issues (in shares) | 3,670,082 | 3,822,126 |
Stockholders' Equity - Outstand
Stockholders' Equity - Outstanding and Reserved Shares of Common Stock for Future Issuance (Detail) - shares | 6 Months Ended | ||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Common stock outstanding and reserved shares of common stock for future issuance | |||
Options outstanding (in shares) | 2,169,490 | 2,687,234 | 3,369,732 |
Total shares of common stock reserved for future issuance (in shares) | 56,955,334 | ||
2012 Equity Incentive Plan | |||
Common stock outstanding and reserved shares of common stock for future issuance | |||
Total shares of common stock reserved for future issuance (in shares) | 31,722,900 | ||
2012 Employee Stock Purchase Plan | |||
Common stock outstanding and reserved shares of common stock for future issuance | |||
Total shares of common stock reserved for future issuance (in shares) | 10,948,982 | ||
Options outstanding | |||
Common stock outstanding and reserved shares of common stock for future issuance | |||
Options outstanding (in shares) | 2,169,490 | ||
Performance Share | |||
Common stock outstanding and reserved shares of common stock for future issuance | |||
Number of shares eligible to vest (percent) | 100.00% | ||
Restricted stock units | |||
Common stock outstanding and reserved shares of common stock for future issuance | |||
RSUs (in shares) | 12,113,962 | 13,278,152 | 11,403,341 |
Equity Awards - Additional Info
Equity Awards - Additional Information (Detail) $ in Millions | Jan. 01, 2018shares | Jun. 30, 2018USD ($)incentive_plan | Jun. 30, 2017USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of equity incentive plans | incentive_plan | 2 | ||
Fair value of stock options vested | $ 8 | ||
Total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options | $ 16.2 | ||
Common stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Remaining weighted-average period | 2 years 9 months 10 days | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Remaining weighted-average period | 3 years 10 days | ||
Unrecognized compensation expense expected to be recognized | $ 976.5 | ||
Performance Share | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares eligible to vest (percent) | 100.00% | ||
Stock-based compensation expense, net of actual and estimated forfeitures | $ 37.3 | $ 18 | |
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 (in shares) | shares | 8,713,793 | ||
2012 Equity Incentive Plan | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
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 (in shares) | shares | 1,742,758 | ||
Common stock purchase price percentage | 85.00% | ||
Award offering period | 6 months | ||
Minimum | Performance Share | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares eligible to vest (percent) | 0.00% | ||
Maximum | Performance Share | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares eligible to vest (percent) | 180.00% | ||
Vesting, tranche one | Performance Share | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 33.00% | ||
Vesting, tranche two | Performance Share | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting term | 2 years |
Equity Awards - Summary of Stoc
Equity Awards - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | |
Number of Shares | |||
Outstanding, beginning balance (in shares) | 2,687,234 | 3,369,732 | 3,369,732 |
Exercised (in shares) | (486,160) | (621,330) | |
Canceled (in shares) | (31,584) | (61,168) | |
Outstanding, ending balance (in shares) | 2,169,490 | 2,687,234 | 2,169,490 |
Vested and expected to vest (in shares) | 2,156,223 | 2,156,223 | |
Vested and exercisable (in shares) | 1,547,973 | 1,547,973 | |
Weighted- Average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 40.21 | $ 38.43 | $ 38.43 |
Exercised (in dollars per share) | 18.02 | 27.83 | |
Canceled (in dollars per share) | 74.84 | 68.12 | |
Outstanding, ending balance (in dollars per share) | 44.67 | $ 40.21 | 44.67 |
Vested and expected to vest (in dollars per share) | 44.49 | 44.49 | |
Vested and exercisable (in dollars per share) | $ 29.47 | $ 29.47 | |
Weighted-average remaining contractual term, outstanding | 5 years 7 months 13 days | ||
Weighted-average remaining contractual term, vested and expected to vest | 5 years 7 months 9 days | ||
Weighted-average remaining contractual term, vested and exercisable | 4 years 6 months | ||
Aggregate intrinsic value, exercised | $ 73,805 | $ 77,936 | |
Aggregate intrinsic value, outstanding | 277,264 | $ 277,264 | |
Aggregate intrinsic value, vested and expected to vest | 275,954 | 275,954 | |
Aggregate intrinsic value, vested and exercisable | $ 221,355 | $ 221,355 |
Equity Awards - Restricted Stoc
Equity Awards - Restricted Stock Unit Table (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2018 | Mar. 31, 2018 | |
Number of Shares | ||
Outstanding, beginning balance (in shares) | 13,278,152 | 11,403,341 |
Granted (in shares) | 377,766 | 4,078,322 |
Vested (in shares) | (1,288,135) | (1,854,662) |
Forfeited (in shares) | (253,821) | (348,849) |
Outstanding, ending balance (in shares) | 12,113,962 | 13,278,152 |
Weighted Average Grant Date Fair Value (Per Share) | ||
Outstanding, beginning balance (in dollar per share) | $ 103.80 | $ 81.50 |
Granted (in dollar per share) | 173.35 | 151.13 |
Vested (in dollar per share) | 71.70 | 73.94 |
Forfeited (in dollar per share) | 99.79 | 87.01 |
Outstanding, ending balance (in dollar per share) | $ 109.43 | $ 103.80 |
Aggregate Intrinsic Value (in thousands) | ||
Aggregate intrinsic value, vested | $ 226,722 | $ 281,822 |
Aggregate intrinsic value, non-vested | $ 2,089,295 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | [1] | Jun. 30, 2018 | Jun. 30, 2017 | ||
Numerator: | ||||||
Net loss | $ (52,746) | $ (55,804) | $ (42,124) | $ (77,318) | [1],[2] | |
Denominator: | ||||||
Weighted-average shares outstanding - basic and diluted (in shares | 177,343,176 | 170,419,083 | 176,418,984 | 169,585,356 | ||
Net loss per share - basic and diluted (in dollars per share) | $ (0.30) | $ (0.33) | $ (0.24) | $ (0.46) | ||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details | |||||
[2] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Net Loss Per Share - Schedule72
Net Loss Per Share - Schedule of Potentially Dilutive Securities (Detail) - shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 36,851,148 | 45,728,575 |
Common stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 2,169,490 | 4,992,394 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 12,113,962 | 13,270,087 |
ESPP obligations | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 243,685 | 286,176 |
Convertible senior notes | 2018 convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 2,927,122 | 7,783,023 |
Convertible senior notes | 2022 convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 5,806,933 | 5,806,936 |
Warrants related to the issuance of convertible senior notes | 2018 convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 7,783,023 | 7,783,023 |
Warrants related to the issuance of convertible senior notes | 2022 convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 5,806,933 | 5,806,936 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | (29.00%) | 3.00% | 13.00% | 4.00% |
Commitments and Contingencies -
Commitments and Contingencies - Maturity of Obligations (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Operating Leases | |
Remainder of 2018 | $ 22,608 |
2,019 | 48,833 |
2,020 | 47,756 |
2,021 | 46,351 |
2,022 | 49,784 |
Thereafter | 572,052 |
Leases, net of sublease income, total | 787,384 |
Purchase Obligations | |
Remainder of 2018 | 21,407 |
2,019 | 38,702 |
2,020 | 28,927 |
2,021 | 12,360 |
2,022 | 5,877 |
Thereafter | 4,461 |
Purchase obligations, total | 111,734 |
Other | |
Remainder of 2018 | 419 |
2,019 | 837 |
2,020 | 871 |
2,021 | 888 |
2,022 | 888 |
Thereafter | 370 |
Other, total | 4,273 |
Total | |
Remainder of 2018 | 44,434 |
2,019 | 88,372 |
2,020 | 77,554 |
2,021 | 59,599 |
2,022 | 56,549 |
Thereafter | 576,883 |
Total | 903,391 |
Purchase obligations, cancellation policy | $ 16,400 |
Commitments and Contingencies75
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Nov. 30, 2013 |
Debt Instrument [Line Items] | ||||
Unrecognized tax benefits | $ 13,700 | |||
2022 Notes | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt | 782,500 | $ 782,500 | $ 782,500 | |
2018 Notes | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt | $ 216,252 | $ 574,994 | $ 575,000 |
Information about Geographic 76
Information about Geographic Areas and Products - Geographic Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Revenues by geography | ||||||
Revenues | $ 631,056 | $ 448,258 | $ 1,220,278 | $ 877,029 | ||
Percentage of U.S. revenues in North America | 94.00% | 95.00% | 94.00% | 94.00% | ||
Property and equipment by geography | ||||||
Property and equipment, net | $ 286,953 | $ 286,953 | $ 245,124 | [1] | ||
Percentage of U.S. net property and equipment in North America | 86.00% | 86.00% | 89.00% | |||
North America | ||||||
Revenues by geography | ||||||
Revenues | $ 413,259 | $ 306,159 | $ 800,732 | $ 600,014 | ||
Property and equipment by geography | ||||||
Property and equipment, net | 185,522 | 185,522 | $ 164,040 | |||
EMEA | ||||||
Revenues by geography | ||||||
Revenues | 160,644 | 108,361 | 313,070 | 210,046 | ||
Property and equipment by geography | ||||||
Property and equipment, net | 68,105 | 68,105 | 50,028 | |||
Asia Pacific and other | ||||||
Revenues by geography | ||||||
Revenues | 57,153 | $ 33,738 | 106,476 | $ 66,969 | ||
Property and equipment by geography | ||||||
Property and equipment, net | $ 33,326 | $ 33,326 | $ 31,056 | |||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |
Information about Geographic 77
Information about Geographic Areas and Products - Subscription Revenues (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |||
Segment Reporting Information [Line Items] | ||||||
Total subscription revenues | $ 585,282 | $ 402,672 | [1] | $ 1,128,607 | $ 790,256 | [1] |
Service management products | ||||||
Segment Reporting Information [Line Items] | ||||||
Total subscription revenues | 494,714 | 356,370 | 957,276 | 700,162 | ||
ITOM products | ||||||
Segment Reporting Information [Line Items] | ||||||
Total subscription revenues | $ 90,568 | $ 46,302 | $ 171,331 | $ 90,094 | ||
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details |
Uncategorized Items - now-20186
Label | Element | Value | |
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | $ 5,971,000 | |
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | 1,529,000 | [1] |
Restricted Cash and Cash Equivalents, Noncurrent | us-gaap_RestrictedCashAndCashEquivalentsNoncurrent | 0 | [1] |
Restricted Cash and Cash Equivalents, Noncurrent | us-gaap_RestrictedCashAndCashEquivalentsNoncurrent | $ 9,676,000 | |
[1] | As adjusted to reflect the impact of the full retrospective adoption of Topic 606. See Note 2 for further details. |