Cover
Cover shares in Millions | 6 Months Ended |
Jun. 30, 2019shares | |
Cover page. | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2019 |
Document Transition Report | false |
Entity File Number | 001-35580 |
Entity Registrant Name | SERVICENOW, INC. |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 20-2056195 |
Entity Address, Address Line One | 2225 Lawson Lane |
Entity Address, City or Town | Santa Clara |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 95054 |
City Area Code | 408 |
Local Phone Number | 501-8550 |
Title of 12(b) Security | Common stock, par value $0.001 per share |
Trading Symbol | NOW |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 187.5 |
Entity Central Index Key | 0001373715 |
Amendment Flag | false |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Current assets: | |||
Cash and cash equivalents | $ 583,581 | $ 566,204 | |
Short-term investments | 1,069,803 | 931,718 | |
Accounts receivable, net | 503,376 | 574,810 | |
Current portion of deferred commissions | 152,045 | 139,890 | |
Prepaid expenses and other current assets | 133,482 | 132,071 | |
Total current assets | 2,442,287 | 2,344,693 | |
Deferred commissions, less current portion | 287,432 | 282,490 | |
Long-term investments | 746,716 | 581,856 | |
Property and equipment, net | [1] | 364,007 | 347,216 |
Operating lease right-of-use assets | [1] | 397,950 | |
Intangible assets, net | 121,599 | 100,582 | |
Goodwill | 152,472 | 148,845 | |
Other assets | 90,240 | 73,458 | |
Total assets | 4,602,703 | 3,879,140 | |
Current liabilities: | |||
Accounts payable | 65,711 | 30,733 | |
Accrued expenses and other current liabilities | [1] | 360,916 | 330,246 |
Current portion of deferred revenue | 1,752,220 | 1,651,594 | |
Current portion of operating lease liabilities | [1] | 46,132 | |
Total current liabilities | 2,224,979 | 2,012,573 | |
Deferred revenue, less current portion | 37,159 | 38,597 | |
Operating lease liabilities, less current portion | [1] | 382,812 | |
Convertible senior notes, net | 678,145 | 661,707 | |
Other long-term liabilities | [1] | 18,662 | 55,064 |
Total liabilities | 3,341,757 | 2,767,941 | |
Stockholders’ equity: | |||
Common stock | 188 | 180 | |
Additional paid-in capital | 2,238,782 | 2,093,834 | |
Accumulated other comprehensive income (loss) | 13,542 | (4,035) | |
Accumulated deficit | [1] | (991,566) | (978,780) |
Total stockholders’ equity | 1,260,946 | 1,111,199 | |
Total liabilities and stockholders’ equity | $ 4,602,703 | $ 3,879,140 | |
[1] | We adopted Topic 842 using the modified retrospective method as of January 1, 2019 and elected the transition option that allows us not to restate the comparative periods in our condensed consolidated financial statements in the year of adoption. See Note 2 for further details. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |||||
Revenues: | ||||||||
Total revenues | $ 833,904 | $ 631,056 | $ 1,622,830 | $ 1,220,278 | ||||
Cost of revenues: | ||||||||
Total cost of revenues | [1] | 198,147 | 153,165 | 384,399 | 296,638 | |||
Gross profit | 635,757 | 477,891 | 1,238,431 | 923,640 | ||||
Operating expenses: | ||||||||
Sales and marketing | [1] | 393,895 | 310,869 | 755,304 | 594,570 | |||
Research and development | [1] | 183,420 | 127,916 | 355,942 | 245,184 | |||
General and administrative | [1] | 85,442 | 71,095 | 169,898 | 136,158 | |||
Total operating expenses | [1] | 662,757 | 509,880 | 1,281,144 | 975,912 | |||
Loss from operations | (27,000) | (31,989) | (42,713) | (52,272) | ||||
Interest expense | (8,269) | (15,498) | (16,437) | (32,562) | ||||
Interest income and other income (expense), net | 18,954 | 6,638 | 31,379 | 36,625 | ||||
Loss before income taxes | (16,315) | (40,849) | (27,771) | (48,209) | ||||
Provision for (benefit from) income taxes | (5,236) | 11,897 | (15,147) | (6,085) | ||||
Net loss | $ (11,079) | $ (52,746) | $ (12,624) | $ (42,124) | ||||
Net loss per share - basic and diluted (in dollars per share) | $ (0.06) | $ (0.30) | $ (0.07) | $ (0.24) | ||||
Weighted-average shares used to compute net loss per share - basic and diluted (in shares) | 186,677,622 | 177,343,176 | 184,418,903 | 176,418,984 | ||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustments | $ (410) | $ 6,992 | $ 9,225 | $ (1,443) | ||||
Unrealized gain (loss) on investments, net of tax | 3,629 | 1,983 | 8,352 | (1,085) | ||||
Other comprehensive income (loss), net of tax | 3,219 | 8,975 | 17,577 | (2,528) | ||||
Comprehensive income (loss) | (7,860) | (43,771) | 4,953 | (44,652) | ||||
Subscription | ||||||||
Revenues: | ||||||||
Total revenues | 780,989 | 585,282 | 1,520,975 | 1,128,607 | ||||
Cost of revenues: | ||||||||
Total cost of revenues | 135,479 | [1] | 101,699 | [1] | 262,068 | 197,097 | ||
Professional services and other | ||||||||
Revenues: | ||||||||
Total revenues | 52,915 | 45,774 | 101,855 | 91,671 | ||||
Cost of revenues: | ||||||||
Total cost of revenues | $ 62,668 | [1] | $ 51,466 | [1] | $ 122,331 | $ 99,541 | [1] | |
[1] | Includes stock-based compensation as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cost of revenues: Subscription $ 19,117 $ 12,538 $ 35,139 $ 23,829 Professional services and other 10,951 8,342 20,882 15,903 Sales and marketing 69,229 57,069 131,359 109,151 Research and development 50,041 33,780 93,623 62,378 General and administrative 22,422 23,831 48,207 45,640 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stock-based compensation | $ 329,210 | $ 256,901 | ||
Cost of revenues | Subscription | ||||
Stock-based compensation | $ 19,117 | $ 12,538 | 35,139 | 23,829 |
Cost of revenues | Professional services and other | ||||
Stock-based compensation | 10,951 | 8,342 | 20,882 | 15,903 |
Sales and marketing | ||||
Stock-based compensation | 69,229 | 57,069 | 131,359 | 109,151 |
Research and development | ||||
Stock-based compensation | 50,041 | 33,780 | 93,623 | 62,378 |
General and administrative | ||||
Stock-based compensation | $ 22,422 | $ 23,831 | $ 48,207 | $ 45,640 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Impact of the adoption of new accounting pronouncements | $ (746) | $ 6,488 | $ (7,234) | ||
Beginning balance (in shares) at Dec. 31, 2017 | 174,275,864 | ||||
Beginning balance at Dec. 31, 2017 | $ 778,744 | $ 174 | $ 1,731,367 | (958,564) | 5,767 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued under employee stock plans (in shares) | 3,670,082 | 3,670,082 | |||
Common stock issued under employee stock plans | $ 61,420 | $ 4 | 61,416 | ||
Taxes paid related to net share settlement of equity awards | (154,573) | (154,573) | |||
Stock-based compensation | 257,521 | 257,521 | |||
Settlement of 2018 Notes conversion feature | (473,154) | (473,154) | |||
Benefit from exercise of 2018 Note Hedges | 467,150 | 467,150 | |||
Other comprehensive income (loss), net | (2,528) | (2,528) | |||
Net loss | (42,124) | (42,124) | |||
Beginning balance (in shares) at Jun. 30, 2018 | 177,945,946 | ||||
Beginning balance at Jun. 30, 2018 | 891,710 | $ 178 | 1,889,727 | (994,200) | (3,995) |
Beginning balance (in shares) at Mar. 31, 2018 | 176,562,963 | ||||
Beginning balance at Mar. 31, 2018 | 865,163 | $ 177 | 1,819,410 | (941,454) | (12,970) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued under employee stock plans (in shares) | 1,382,983 | ||||
Common stock issued under employee stock plans | 8,759 | $ 1 | 8,758 | ||
Taxes paid related to net share settlement of equity awards | (68,956) | (68,956) | |||
Stock-based compensation | 135,812 | 135,812 | |||
Settlement of 2018 Notes conversion feature | (427,937) | (427,937) | |||
Benefit from exercise of 2018 Note Hedges | 422,640 | 422,640 | |||
Settlement of 2018 Warrants and 2018 Notes conversion feature | 0 | ||||
Other comprehensive income (loss), net | 8,975 | 8,975 | |||
Net loss | (52,746) | (52,746) | |||
Beginning balance (in shares) at Jun. 30, 2018 | 177,945,946 | ||||
Beginning balance at Jun. 30, 2018 | 891,710 | $ 178 | 1,889,727 | (994,200) | (3,995) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Impact of the adoption of new accounting pronouncements | (162) | (162) | |||
Beginning balance (in shares) at Dec. 31, 2018 | 180,175,355 | ||||
Beginning balance at Dec. 31, 2018 | $ 1,111,199 | $ 180 | 2,093,834 | (978,780) | (4,035) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued under employee stock plans (in shares) | 3,003,260 | 3,003,260 | |||
Common stock issued under employee stock plans | $ 63,309 | $ 3 | 63,306 | ||
Taxes paid related to net share settlement of equity awards | (247,620) | (247,620) | |||
Stock-based compensation | 329,267 | 329,267 | |||
Settlement of 2018 Warrants (in shares) | 4,283,194 | ||||
Settlement of 2018 Warrants and 2018 Notes conversion feature | $ 5 | (5) | |||
Other comprehensive income (loss), net | 17,577 | 17,577 | |||
Net loss | (12,624) | (12,624) | |||
Beginning balance (in shares) at Jun. 30, 2019 | 187,461,809 | ||||
Beginning balance at Jun. 30, 2019 | 1,260,946 | $ 188 | 2,238,782 | (991,566) | 13,542 |
Beginning balance (in shares) at Mar. 31, 2019 | 184,739,169 | ||||
Beginning balance at Mar. 31, 2019 | 1,194,951 | $ 185 | 2,164,930 | (980,487) | 10,323 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued under employee stock plans (in shares) | 1,120,439 | ||||
Common stock issued under employee stock plans | 10,207 | $ 1 | 10,206 | ||
Taxes paid related to net share settlement of equity awards | (108,150) | (108,150) | |||
Stock-based compensation | 171,798 | 171,798 | |||
Settlement of 2018 Warrants (in shares) | 1,602,201 | ||||
Settlement of 2018 Warrants and 2018 Notes conversion feature | 0 | $ 2 | (2) | ||
Other comprehensive income (loss), net | 3,219 | 3,219 | |||
Net loss | (11,079) | (11,079) | |||
Beginning balance (in shares) at Jun. 30, 2019 | 187,461,809 | ||||
Beginning balance at Jun. 30, 2019 | $ 1,260,946 | $ 188 | $ 2,238,782 | $ (991,566) | $ 13,542 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (12,624) | $ (42,124) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 115,777 | 68,618 |
Amortization of deferred commissions | 79,531 | 64,304 |
Amortization of debt discount and issuance costs | 16,437 | 32,562 |
Stock-based compensation | 329,210 | 256,901 |
Deferred income taxes | (3,073) | (30,926) |
Gain on marketable equity securities | 0 | (19,257) |
Repayments of convertible senior notes attributable to debt discount | 0 | (87,557) |
Other | (3,323) | (1,707) |
Changes in operating assets and liabilities, net of effect of business combinations: | ||
Accounts receivable | 71,354 | 65,940 |
Deferred commissions | (97,194) | (92,995) |
Prepaid expenses and other assets | (28,483) | 2,040 |
Accounts payable | 25,093 | (2,632) |
Deferred revenue | 100,190 | 131,089 |
Accrued expenses and other liabilities | 11,688 | 31,720 |
Net cash provided by operating activities | 604,583 | 375,976 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (97,020) | (88,362) |
Business combinations, net of cash and restricted cash acquired | 0 | (24,940) |
Purchases of other intangibles | (36,160) | (10,850) |
Purchases of investments | (800,641) | (379,913) |
Sales of investments | 8,169 | 39,975 |
Maturities of investments | 500,149 | 453,156 |
Realized gains on derivatives not designated as hedging instruments, net | 22,113 | 0 |
Net cash used in investing activities | (403,390) | (10,934) |
Cash flows from financing activities: | ||
Repayments of convertible senior notes attributable to principal | 0 | (271,185) |
Proceeds from employee stock plans | 63,300 | 61,419 |
Taxes paid related to net share settlement of equity awards | (247,619) | (154,531) |
Payments on financing obligations | 0 | (576) |
Net cash used in financing activities | (184,319) | (364,873) |
Foreign currency effect on cash, cash equivalents and restricted cash | 1,286 | (7,505) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 18,160 | (7,336) |
Cash, cash equivalents and restricted cash at beginning of period | 568,538 | 727,829 |
Cash, cash equivalents and restricted cash at end of period | 586,698 | 720,493 |
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 | 568,538 | 727,829 |
Non-cash investing and financing activities: | ||
Settlement of 2018 Notes conversion feature | 0 | 473,154 |
Benefit from exercise of 2018 Note Hedges | 0 | 467,150 |
Property and equipment included in accounts payable and accrued expenses | $ 31,940 | $ 25,027 |
Description of the Business
Description of the Business | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | Description of the Business ServiceNow, the company that makes work, work better for people, is a leading provider of enterprise cloud computing services that define, structure, manage and automate digital workflows for global enterprises. We deliver digital workflows that help our customers create great experiences and unlock productivity. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission (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 due to the permitted exclusion of certain disclosures for interim reporting. 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, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for other interim periods or future years. The condensed consolidated balance sheet as of December 31, 2018 is derived from audited financial statements; 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, 2018 , which was filed with the SEC on February 27, 2019. Prior Period Reclassification Certain reclassifications of prior period amounts pertaining to the reclassification of revenues from IT Operations Management (ITOM) products to digital workflow products have been made in Note 18 to conform to the current period presentation. These reclassifications did not result in a restatement of prior period financial statements. 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, evaluating the terms and conditions included within our customer contracts as well as determining 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, purchase price allocation for business combinations, stock-based compensation expenses, the useful life and recoverability of our property and equipment, goodwill and identifiable intangible assets, whether an arrangement is or contains a lease, the discount rate used for operating leases, fair value of convertible notes, income taxes, and legal contingencies. Actual results could differ from those estimates. Segments We define the term “chief operating decision maker” to be our Chief Executive Officer. Our chief operating decision maker allocates resources and assesses financial performance based upon discrete financial information at the consolidated level. Accordingly, we have determined that we operate as a single operating and reportable segment. Concentration of Credit Risk and Significant Customers Financial instruments potentially exposing us to credit risk consist primarily of cash, cash equivalents, derivative contracts, investments and accounts receivable. We hold cash at financial institutions that management believes are high credit, quality financial institutions and invest in securities with a minimum rating of BBB by Standard & Poor’s, Baa2 by Moody’s, or BBB by Fitch to minimize our credit risks. Our 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 are also exposed to credit risk under the convertible note hedge transactions that may result from counterparties’ non-performance. Credit risk arising from accounts receivable is mitigated due to our large number of customers and their dispersion across various industries and geographies. As of June 30, 2019 , we had one customer that represented approximately 10% of our accounts receivable balance. As of December 31, 2018 , there were no customers that represented more than 10% of our accounts receivable balance. There were no customers that individually exceeded 10% of our total revenues in any of the periods presented. For purposes of assessing concentration of credit risk and significant customers, a group of customers under common control or customers that are affiliates of each other are regarded as a single customer. Updated Significant Accounting Policies Leases In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 prior practice. We adopted Topic 842 using the modified retrospective method as of January 1, 2019 and elected the transition option that allows us not to restate the comparative periods in our financial statements in the year of adoption. We also elected the package of transition expedients available for expired or existing contracts, which allowed us to carryforward our historical assessment of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. We determine if an arrangement is or contains a lease at inception by evaluating various factors, including whether a vendor’s right to substitute an identified asset is substantive. Lease classification is determined at the lease commencement date, on which the leased assets are made available for our use. Operating leases are included in “Operating lease right-of-use assets”, “Current portion of operating lease liabilities”, and “Operating lease liabilities, less current portion” in our condensed consolidated balance sheets. We did not have any material financing leases in any of the periods presented. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The difference between the total right-of-use assets and total lease liabilities recorded as of January 1, 2019 is primarily due to the derecognition of deferred rent liabilities that were included in “Accrued expenses and other current liabilities” and “Other long-term liabilities”, respectively, in our condensed consolidated balance sheet as of December 31, 2018. Lease payments consist primarily of the fixed payments under the arrangement, less any lease incentives such as rent holidays. We use an estimate of our incremental borrowing rate (IBR) based on the information available at the lease commencement date in determining the present value of lease payments, unless the implicit rate is readily determinable. In determining the appropriate IBR, we consider information including, but not limited to, our credit rating, the lease term, and the currency in which the arrangement is denominated. For leases which commenced prior to our adoption of Topic 842, we used the IBR on January 1, 2019. Our lease terms may include the sole option for us to either renew or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. For our office facility leases, we elected to account for lease and non-lease components as a single lease component. For other arrangements, lease and non-lease components are generally accounted for separately. Additionally, we do not record leases on the balance sheet that, at the lease commencement date, have a lease term of 12 months or less. Derivative financial instruments and hedging activities We use derivative financial instruments to manage foreign currency risks. These derivative contracts consist of 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 income (loss), and are intended to offset the foreign currency gains or losses associated with the underlying monetary assets and liabilities. Realized gains (losses) from settlement of the derivative assets and liabilities not designated as hedging instruments are classified as investing activities in the condensed consolidated statement of cash flows. Accounting Pronouncement Adopted in 2019 Leases As described in the “Leases” section above, we adopted Topic 842 using the modified retrospective method as of January 1, 2019 with an immaterial amount of cumulative effect adjustment recorded to our accumulated deficit as of January 1, 2019. As this standard was adopted on a modified prospective basis as of January 1, 2019, the adoption of this standard did not impact our previously reported financial statements for periods ended on or prior to December 31, 2018. Upon adoption, we recorded operating lease right-of-use assets of approximately $334.7 million and corresponding operating lease liabilities of $362.7 million on our condensed consolidated balance sheets. Accounting Pronouncements Adopted in 2018 For details on our adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” and other accounting standards adopted in 2018, refer to Note 2, Summary of Significant Accounting Policies, of the notes to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 , which was filed with the SEC on February 27, 2019. New Accounting Pronouncements Pending Adoption Cloud computing arrangements implementation costs In August 2018, the FASB issued ASU 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new standard requires capitalized costs to be amortized on a straight-line basis generally over the term of the arrangement, and the financial statement presentation for these capitalized costs would be the same as that of the fees related to the hosting arrangements. This new standard is effective for our interim and annual periods beginning January 1, 2020 and earlier adoption is permitted. This standard could be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We will adopt this standard on a prospective basis as of January 1, 2020 and are evaluating the impact of our pending adoption of this standard on our condensed consolidated financial statements. Credit losses 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, with further clarifications made more recently. For trade receivables, loans, and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available-for-sale debt securities are required to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. 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. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2019 | |
Debt Securities, Available-for-sale [Abstract] | |
Investments | Investments Marketable Debt Securities The following is a summary of our available-for-sale investment securities recorded within short-term and long-term investments and those securities classified within cash and cash equivalents on the condensed consolidated balance sheets (in thousands): June 30, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Commercial paper $ 129,395 $ 179 $ — $ 129,574 Corporate notes and bonds 1,535,635 6,820 (290 ) 1,542,165 Certificates of deposit 66,642 77 — 66,719 U.S. government and agency securities 77,931 171 (41 ) 78,061 Total available-for-sale securities $ 1,809,603 $ 7,247 $ (331 ) $ 1,816,519 December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Commercial paper $ 108,061 $ — $ — $ 108,061 Corporate notes and bonds 1,233,589 343 (4,218 ) 1,229,714 Certificates of deposit 73,584 1 — 73,585 U.S. government and agency securities 102,549 23 (358 ) 102,214 Total available-for-sale securities $ 1,517,783 $ 367 $ (4,576 ) $ 1,513,574 As of June 30, 2019 , the contractual maturities of our investment securities, excluding securities classified within cash and cash equivalents on the condensed consolidated balance sheet, did not exceed 36 months . The fair values of available-for-sale investment securities, by remaining contractual maturity, are as follows (in thousands): June 30, 2019 Due within 1 year $ 1,069,803 Due in 1 year through 5 years 746,716 Total $ 1,816,519 The following table shows the fair values and the gross unrealized losses of these 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 within cash and cash equivalents on the condensed consolidated balance sheets (in thousands): June 30, 2019 Less than 12 Months 12 Months or Greater Total Fair Value Gross Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate notes and bonds $ 190,304 $ (171 ) $ 139,264 $ (119 ) $ 329,568 $ (290 ) U.S. government and agency securities — — 29,959 (41 ) 29,959 (41 ) Total $ 190,304 $ (171 ) $ 169,223 $ (160 ) $ 359,527 $ (331 ) December 31, 2018 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate notes and bonds $ 714,605 $ (2,603 ) $ 294,956 $ (1,615 ) $ 1,009,561 $ (4,218 ) Certificates of deposit 1,000 — — — 1,000 — U.S. government and agency securities 11,756 (5 ) 61,457 (353 ) 73,213 (358 ) Total $ 727,361 $ (2,608 ) $ 356,413 $ (1,968 ) $ 1,083,774 $ (4,576 ) As of June 30, 2019 , we had a total of 143 available-for-sale securities, excluding those securities classified within cash and cash equivalents on the condensed 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 During the six months ended June 30, 2018 , we recognized $19.3 million of unrealized gains through net income that related to the changes in the fair value of these securities during the six months ended June 30, 2018 . As of each of June 30, 2019 and December 31, 2018 , we had no marketable equity securities on our condensed consolidated balance sheet. Strategic Investments As of June 30, 2019 and December 31, 2018 , the total amount of equity investments in privately-held companies included in other assets on our condensed consolidated balance sheets was $21.4 million and $14.6 million , respectively. These non-marketable equity investments are recorded at fair value only if an impairment or observable price adjustment is recognized in the current period. We classify these assets as Level 3 within the fair value hierarchy only if an impairment or observable price adjustment is recognized on these non-marketable equity securities during the period as they are based on observable transaction price at the transaction date and other unobservable inputs such as volatility. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [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 as of June 30, 2019 (in thousands): Level 1 Level 2 Total Cash equivalents: Money market funds $ 301,614 $ — $ 301,614 Commercial paper — 37,405 37,405 Corporate notes and bonds — 1,430 1,430 Certificates of deposit — 3,700 3,700 U.S. government and agency securities — 9,986 9,986 Marketable securities: Commercial paper — 129,574 129,574 Corporate notes and bonds — 1,542,165 1,542,165 Certificates of deposit — 66,719 66,719 U.S. government and agency securities — 78,061 78,061 Total $ 301,614 $ 1,869,040 $ 2,170,654 The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis as of December 31, 2018 (in thousands): Level 1 Level 2 Total Cash equivalents: Money market funds $ 229,047 $ — $ 229,047 Commercial paper — 16,961 16,961 Certificates of deposit — 2,465 2,465 Marketable securities: Commercial paper — 108,061 108,061 Corporate notes and bonds — 1,229,714 1,229,714 Certificates of deposit — 73,585 73,585 U.S. government and agency securities — 102,214 102,214 Total $ 229,047 $ 1,533,000 $ 1,762,047 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. Our equity investments in privately-held companies are not included in the table above and are discussed in Note 3 . See Note 8 for the fair value measurement of our derivative contracts and Note 11 for the fair value measurement of our convertible senior notes, which are also not included in the table above. |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2019 | |
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. 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. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
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, 2018 $ 148,845 Foreign currency translation adjustments 3,627 Balance as of June 30, 2019 $ 152,472 Intangible assets consist of the following (in thousands): June 30, December 31, 2019 2018 Developed technology $ 140,800 $ 114,395 Patents 66,530 57,180 Other 276 650 Intangible assets, gross 207,606 172,225 Less: accumulated amortization (86,007 ) (71,643 ) Intangible assets, net $ 121,599 $ 100,582 During the six months ended June 30, 2019 , we acquired $36.2 million of intangible assets, comprising primarily $26.5 million of developed technology and $9.4 million in patents. The weighted-average useful lives for the developed technology and patents acquired during the six months ended June 30, 2019 was approximately 5.0 and 6.1 years, respectively. During the six months ended June 30, 2018 , apart from the business combinations described in Note 5 , we also acquired $4.1 million of intangible assets in patents. The weighted-average useful life for the patents acquired during the six months ended June 30, 2018 was approximately 10.0 years. Amortization expense for intangible assets for the three months ended June 30, 2019 and 2018 was approximately $8.0 million and $6.1 million , respectively, and for the six months ended June 30, 2019 and 2018 was approximately $15.1 million and $11.8 million , respectively. The following table presents the estimated future amortization expense related to intangible assets held at June 30, 2019 (in thousands): Years Ending December 31, Remainder of 2019 $ 18,056 2020 26,518 2021 24,346 2022 20,449 2023 14,607 Thereafter 17,623 Total future amortization expense $ 121,599 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 2018 Computer equipment $ 557,991 $ 493,536 Computer software 64,587 58,303 Leasehold and other improvements 87,892 74,721 Furniture and fixtures 46,873 42,551 Building (1) — 6,551 Construction in progress (1) 12,510 10,167 Property and equipment, gross 769,853 685,829 Less: Accumulated depreciation (405,846 ) (338,613 ) Property and equipment, net $ 364,007 $ 347,216 (1) We adopted Topic 842 using the modified retrospective method as of January 1, 2019 and derecognized $10.6 million in building and construction in progress assets that we were previously deemed to own under the prior lease accounting standards. These assets are recognized under our operating lease right-of-use assets under Topic 842 as of June 30, 2019 . Construction in progress consists primarily of leasehold and other improvements and in-process software development costs. Depreciation expense for the three months ended June 30, 2019 and 2018 was $40.1 million and $29.2 million , respectively, and for the six months ended June 30, 2019 and 2018 was approximately $77.3 million and $56.8 million |
Derivative Contracts
Derivative Contracts | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Contracts | Derivative Contracts As of June 30, 2019 and December 31, 2018 , we had foreign currency forward contracts with total notional values of $551.2 million and $872.8 million , respectively, 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 were as follows (in thousands): Condensed Consolidated Balance Sheet Location June 30, 2019 December 31, 2018 Derivative Assets: Foreign currency derivative contracts Prepaid expenses and other current assets $ 1,747 $ 22,831 Derivative Liabilities: Foreign currency derivative contracts Accrued expenses and other current liabilities $ 2,211 $ 2,441 |
Deferred Revenue and Performanc
Deferred Revenue and Performance Obligations | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 from amounts included in deferred revenue as of December 31, 2018 were $1.0 billion . Revenues recognized during the six months ended June 30, 2018 , from amounts included in deferred revenue as of December 31, 2017 were $825.0 million . Remaining Performance Obligations Transaction price allocated to remaining performance obligations (RPO) 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. RPO excludes contracts that are billed in arrears, such as certain time and materials contracts, as we apply the “right to invoice” practical expedient under relevant accounting guidance. As of June 30, 2019 , the total non-cancelable RPO under our contracts with customers was approximately $5.4 billion and we expect to recognize revenues on approximately 50% of these RPO over the following 12 months , with the balance to be recognized thereafter. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 December 31, 2018 Accrued payroll 185,511 158,006 Taxes payable 24,587 35,122 Other employee related liabilities 59,842 60,889 Other 90,976 76,229 Total accrued expenses and other current liabilities $ 360,916 $ 330,246 |
Convertible Senior Notes
Convertible Senior Notes | 6 Months Ended |
Jun. 30, 2019 | |
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 (Maturity Date) unless earlier converted or repurchased in accordance with their terms. The 2022 Notes do not bear interest, and we cannot redeem the 2022 Notes prior to maturity. 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 were earlier converted prior to, or settled on November 1, 2018, in accordance with their terms. The 2022 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 2022 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 settled the principal amount of our 2018 Notes with cash and currently intend to settle the principal amount of the 2022 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 Conversion of the 2022 Notes prior to the Convertible Date . At any time prior to the close of business on the business day immediately preceding February 1, 2022 (Convertible Date), holders of the 2022 Notes may convert their Notes at their option, only if one of the following conditions are met: • 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 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 conversion rate on each such trading day; or • upon the occurrence of specified corporate events. Conversion of the 2022 Notes on or after the Convertible Date. On or after the 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 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, at our election. The conversion price of the 2022 Notes will be subject to adjustment in some events. Holders of the 2022 Notes who convert their 2022 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 2022 Notes may require us to purchase with cash all or a portion of the 2022 Notes upon the occurrence of a fundamental change, at a purchase price equal to 100% of the principal amount of the 2022 Notes plus any accrued and unpaid special interest, if any. In accounting for the issuance of the 2022 Notes and the related transaction costs, we separated the 2022 Notes into liability and equity components. The 2022 Notes consisted of the following (in thousands): June 30, 2019 December 31, 2018 Liability component: Principal: 2022 Notes $ 782,500 $ 782,500 Less: debt issuance cost and debt discount, net of amortization 2022 Notes (104,355 ) (120,793 ) Net carrying amount $ 678,145 $ 661,707 2022 Notes Equity component recorded at issuance: Note $ 162,039 Issuance cost (2,148 ) Net amount recorded in equity $ 159,891 The Conversion Condition for the 2022 Notes was met for the quarters ended June 30, 2018, September 30, 2018, March 31, 2019, and June 30, 2019. Therefore, our 2022 Notes became convertible at the holders’ option beginning on July 1, 2018 and continue to be convertible through September 30, 2019, with the exception of the quarter ended March 31, 2019 because the Conversion Condition for the 2022 Notes was not met for the quarter ended December 31, 2018. We have not received any conversion requests for our 2022 Notes. We consider the fair value of the 2022 Notes at June 30, 2019 to be a Level 2 measurement. The estimated fair value of the 2022 Notes at June 30, 2019 and December 31, 2018 based on the closing trading price per $100 of the Notes was as follows (in thousands): June 30, 2019 December 31, 2018 2022 Notes $ 1,611,801 $ 1,105,281 As of June 30, 2019 , the remaining life of the 2022 Notes is 35 months, and the 2018 Notes were no longer outstanding. 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, 2019 2018 2019 2018 Amortization of debt issuance cost 2022 Notes $ 398 $ 380 $ 792 $ 756 2018 Notes — 409 — 907 Amortization of debt discount 2022 Notes 7,871 7,493 15,645 14,894 2018 Notes — 7,216 — 16,005 Total $ 8,269 $ 15,498 $ 16,437 $ 32,562 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. The 2018 Note Hedge offset the dilution and cash payments in excess of the principal amount of the converted 2018 Notes and expired upon the maturity date of the 2018 Notes, which was November 1, 2018. Purchase Initial Shares Shares as of June 30, 2019 (in thousands) 2022 Note Hedge $ 128,017 5,806,936 5,806,936 2018 Note Hedge $ 135,815 7,783,023 — The 2022 Note Hedge covers shares of our common stock at a strike price per share that corresponds to the initial conversion price of the 2022 Notes, subject to adjustment, and are exercisable upon conversion of the 2022 Notes. If exercised, we may elect to receive cash, shares of our common stock, or a combination of cash and shares. The 2022 Note Hedge will expire upon the maturity of the 2022 Notes. The 2022 Note Hedge is intended to reduce the potential economic dilution upon conversion of the 2022 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 2022 Notes. The 2022 Note Hedge is a separate transaction and is not part of the terms of the 2022 Notes. Holders of the 2022 Notes will not have any rights with respect to the 2022 Note Hedge. The 2022 Note Hedge does not impact earnings per share, as it was entered into to offset any dilution from the 2022 Notes. Warrants Proceeds Initial Shares Strike Price First Expiration Date Shares as of June 30, 2019 (in thousands) 2022 Warrants $ 54,071 5,806,936 $ 203.40 September 1, 2022 5,806,936 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 2018 Warrants were automatically exercised and the 2022 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. As the 2022 Warrants will be net share settled, the total number of shares of our common stock we will issue depends on the daily volume-weighted average stock prices over a 60 trading day period beginning on the first expiration date of the 2022 Warrants, which will be September 1, 2022. We issued approximately 1.6 million and 4.3 million shares of our common stock upon the automatic exercise of the 2018 Warrants during the three and six months ended June 30, 2019 , respectively. As of June 30, 2019 , the 2018 Warrants were no longer outstanding. We expect to issue additional shares of our common stock in the second half of 2022 upon the automatic exercise of the 2022 Warrants. The 2022 Warrants could have a dilutive effect to the extent that the daily volume-weighted average stock prices over a 60 trading day period beginning on September 1, 2022 exceeds the strike price of the 2022 Warrants. Based on the volume-weighted average stock price on June 30, 2019 , the total number of shares of our common stock to be issued upon the automatic exercise of the 2022 Warrants would be approximately 1.5 million . The actual number of shares of our common stock issuable upon the automatic exercise of the 2022 Warrants, if any, is unknown at this time. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss), net of tax, consist of the following (in thousands): June 30, 2019 December 31, 2018 Foreign currency translation adjustment $ 9,569 $ 344 Net unrealized gain (loss) on investments, net of tax 3,973 (4,379 ) Accumulated other comprehensive income (loss) $ 13,542 $ (4,035 ) Reclassification adjustments out of accumulated other comprehensive income (loss) into net loss were immaterial for all periods presented. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock We are authorized to issue 600,000,000 shares of common stock as of June 30, 2019 . Holders of our common stock are not entitled to receive dividends unless declared by our board of directors. As of June 30, 2019 , we had 187,461,809 shares of common stock outstanding and had reserved shares of common stock for future issuance as follows: June 30, 2019 Stock plans: Options outstanding 1,369,724 RSUs (1) 10,916,959 Shares of common stock available for future grants: 2012 Equity Incentive Plan (2) 29,039,407 2012 Employee Stock Purchase Plan (2) 10,396,547 Total shares of common stock reserved for future issuance 51,722,637 (1) Represents the number of shares issuable upon settlement of outstanding restricted stock units (RSUs) and performance RSUs, assuming 100% of the target number of shares for performance 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, 2019 and 2018 , we issued a total of 3,003,260 shares and 3,670,082 shares, respectively, from stock option exercises, vesting of RSUs, net of employee payroll taxes, and purchases from the employee stock purchase plan (ESPP). In addition, as described in Note 11 , we issued approximately 4.3 million shares of our common stock upon the automatic exercise of the 2018 Warrants during the six months ended June 30, 2019 |
Equity Awards
Equity Awards | 6 Months Ended |
Jun. 30, 2019 | |
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. Prior to January 2019, the share reserve also automatically increased on January 1 of each year, 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. Our board of directors elected not to increase the number of shares of common stock reserved for issuance under the 2012 Plan pursuant to the provision described in the preceding sentence for the year ending December 31, 2019 . In January 2019, our Board of Directors amended the 2012 Plan to remove the automatic increase provision. Therefore, for the remaining term of the 2012 Plan, the share reserve will not be increased without stockholder approval. 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. Our board of directors elected not to increase the number of shares of common stock reserved for issuance under the 2012 ESPP pursuant to the provision described in the preceding sentence for the year ending December 31, 2019 . Stock Options Stock options are exercisable at a price equal to the market value of the underlying shares of common stock on the date of the grant as determined by our board of directors or, for those stock options issued subsequent to our initial public offering, the closing price of our common stock as reported on the New York Stock Exchange on the date of grant. Stock options granted under our 2005 Plan and the 2012 Plan to new employees generally vest 25% one year from the date the requisite service period begins and continue to vest monthly for each month of continued employment over the remaining three years . Options granted generally are exercisable for a period of up to ten years contingent on each holder’s continuous status as a service provider. A summary of stock option activity for the six months ended June 30, 2019 was as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 1,810,580 $ 46.55 Exercised (231,558 ) 21.69 $ 46,348 Outstanding at March 31, 2019 1,579,022 50.19 Exercised (209,298 ) 48.77 $ 45,982 Outstanding at June 30, 2019 1,369,724 $ 50.41 5.12 $ 307,033 Vested and expected to vest as of June 30, 2019 1,364,347 $ 50.31 5.11 $ 305,963 Vested and exercisable as of June 30, 2019 994,314 $ 37.74 4.20 $ 235,487 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, 2019 was $4.0 million . As of June 30, 2019 , total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options was approximately $8.0 million . The weighted-average remaining vesting period of unvested stock options at June 30, 2019 was 1.89 years . RSUs A summary of RSU activity for the six months ended June 30, 2019 was as follows: Number of Shares Weighted Average Grant Date Fair Value (Per Share) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 10,201,660 $ 121.84 Granted 4,257,565 233.78 Vested (1,939,925 ) 117.30 $ 445,764 Forfeited (357,319 ) 121.26 Outstanding at March 31, 2019 12,161,981 160.28 Granted 315,421 257.88 Vested (1,310,296 ) 126.88 $ 354,773 Forfeited (250,147 ) 148.46 Outstanding at June 30, 2019 10,916,959 $ 167.41 $ 2,997,469 RSUs outstanding as of June 30, 2019 were comprised of 10,104,524 RSUs with only a service condition and 812,435 RSUs with both a service condition and a performance condition. RSUs granted with only service vesting criteria under the 2012 Plan to employees generally vest over a four -year period. Performance-based RSUs (PRSUs) with both service and performance-based vesting criteria are considered as eligible to vest when approved by the 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, 2019 will vest 33% in February 2020 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 number of PRSUs granted shown in the table above reflects the shares that could be eligible to vest at 100% of target for PRSUs and includes adjustments for over or under achievement for PRSUs granted in the prior year. We recognized $40.4 million and $37.3 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, 2019 and 2018 , respectively. As of June 30, 2019 , total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs was approximately $1.4 billion and the weighted-average remaining vesting period was 3.07 years . |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2019 | |
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. Stock awards with performance conditions are included in dilutive shares to the extent the performance condition is met. 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, 2019 2018 2019 2018 Numerator: Net loss $ (11,079 ) $ (52,746 ) $ (12,624 ) $ (42,124 ) Denominator: Weighted-average shares outstanding - basic and diluted 186,677,622 177,343,176 184,418,903 176,418,984 Net loss per share - basic and diluted $ (0.06 ) $ (0.30 ) $ (0.07 ) $ (0.24 ) 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, 2019 2018 Common stock options 1,369,724 2,169,490 RSUs 10,916,959 12,113,962 ESPP obligations 211,771 243,685 2018 Notes — 2,927,122 2018 Warrants — 7,783,023 2022 Notes 5,806,936 5,806,933 2022 Warrants 5,806,936 5,806,933 Total potentially dilutive securities 24,112,326 36,851,148 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
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 income tax benefit was $5.2 million and $15.1 million for the three and six months ended June 30, 2019 , respectively. The income tax benefit was attributable to the mix of earnings and losses in countries with differing statutory tax rates and valuation allowances in certain countries. Our income tax provision (benefit) was $11.9 million and ($6.1) million for the three and six months ended June 30, 2018 , respectively. For the three months ended June 30, 2018 , the income tax provision was attributable to forecasted foreign cash taxes and our loss from domestic operations. For the six months ended June 30, 2018 , the income tax benefit 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. We maintain a full valuation allowance against our U.S. and certain foreign deferred tax assets as of June 30, 2019 . We regularly assess the need for a valuation allowance against our deferred tax assets. In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. Due to cumulative losses over recent years and based on all available evidence, we have determined that it is more likely than not that our U.S. and certain foreign deferred tax assets will not be realized as of June 30, 2019 . Due to our international expansion and improvements in the operating results of our Irish subsidiary over the past three years, we believe a reasonable possibility exists that within the next 12 months sufficient positive evidence may become available to reach a conclusion that the valuation allowance against the net deferred tax assets of our Irish subsidiary will no longer be needed. The deferred tax assets of our Irish subsidiary were created primarily as a result of the difference between the tax basis in our Irish subsidiary and the cost reported in our consolidated financial statements resulting from the transfer of intangible assets to our Irish subsidiary as part of our foreign restructuring in 2018. Assuming a consistent performance over the next few quarters, a release of the Irish valuation allowance would result in the recognition of certain deferred tax assets and may result in an income tax benefit in excess of $500 million for the period in which such release is recorded. We are subject to taxation in the United States and foreign jurisdictions. As of June 30, 2019 , our tax years 2004 to 2018 remain subject to examination in most jurisdictions. There are differing interpretations of tax laws and regulations, and as a result, disputes may arise with tax authorities involving issues of the timing and amount of deductions and allocations of income among various tax jurisdictions. We periodically evaluate our exposures associated with our tax filing positions. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from these examinations, and we do not anticipate a significant impact to our gross unrecognized tax benefits within the next 12 months related to these years. Although the timing of the resolution, settlement, and closure of any audit is highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits could significantly change in the next 12 months. However, given the number of years that remain subject to examination, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases For some of our offices and data centers, we have entered into non-cancelable operating lease agreements with various expiration dates through 2035 . Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into our determination of lease payments. Total operating lease costs were $16.0 million and $30.7 million , excluding short-term lease costs, variable lease costs and sublease income each of which were immaterial, for the three and six months ended June 30, 2019 , respectively. Total lease expenses recognized prior to our adoption of Topic 842 was $11.5 million and $22.8 million for the three and six months ended June 30, 2018 , respectively. For the six months ended June 30, 2019 , cash paid for amounts included in the measurement of operating lease liabilities was $20.4 million and operating lease liabilities arising from obtaining operating right-of-use assets totaled $84.1 million . As of June 30, 2019 , the weighted-average remaining lease term is 10.2 years , and the weighted-average discount rate is 3.8% . Maturities of operating lease liabilities as of June 30, 2019 are presented in the table below (in thousands): Years Ending December 31, Remainder of 2019 $ 31,114 2020 62,286 2021 61,054 2022 57,882 2023 53,620 Thereafter 263,086 Total operating lease payments 529,042 Less: imputed interest (100,098 ) Present value of operating lease liabilities $ 428,944 In addition to the amounts above, as of June 30, 2019 , we have operating leases, primarily for offices, that have not yet commenced with undiscounted cash flows of $408.7 million . These operating leases will commence between 2019 and 2022 with lease terms of 3 to 15 years . Future minimum commitments under our non-cancelable operating leases as of December 31, 2018 are presented in the table below (in thousands): Years Ending December 31, 2019 $ 55,435 2020 60,996 2021 63,348 2022 67,707 2023 72,491 Thereafter 578,874 Total $ 898,851 Other Contractual Commitments Other contractual commitments consist of data center and IT operations and sales and marketing activities. There were no material contractual obligations that were entered into during the six months ended June 30, 2019 that were outside the ordinary course of business. 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. Refer to Note 11 for further information regarding our Notes. In addition to the obligations in the table above, approximately $4.8 million of unrecognized tax benefits have been recorded as liabilities as of June 30, 2019 . Letters of Credit As of June 30, 2019 , we had letters of credit in the aggregate amount of $22.1 million , primarily in connection with our customer contracts and operating leases. 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. |
Information about Geographic Ar
Information about Geographic Areas and Products | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 2018 2019 2018 North America (1) $ 544,794 $ 413,259 $ 1,070,345 $ 800,732 EMEA (2) 212,606 160,644 406,438 313,070 Asia Pacific and other 76,504 57,153 146,047 106,476 Total revenues $ 833,904 $ 631,056 $ 1,622,830 $ 1,220,278 Property and equipment, net by geographic area were as follows (in thousands): June 30, 2019 December 31, 2018 North America (3) $ 223,556 $ 227,471 EMEA (2) 87,884 82,526 Asia Pacific and other 52,567 37,219 Property and equipment, net $ 364,007 $ 347,216 (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, 2019 and 2018 , respectively. (2) Europe, the Middle East and Africa (3) Property and equipment, net attributed to the United States were approximately 76% of property and equipment, net attributable to North America as of each of June 30, 2019 and December 31, 2018 , respectively. Subscription revenues consist of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Digital workflow products (1) $ 675,054 $ 509,602 $ 1,313,711 $ 985,670 ITOM products (1) 105,935 75,680 207,264 142,937 Total subscription revenues $ 780,989 $ 585,282 $ 1,520,975 $ 1,128,607 (1) As we have expanded the scope of IntegrationHub (formerly included within our ITOM offering) beyond ITOM to align more closely with our broader platform offering, revenues associated with IntegrationHub have been reclassified from ITOM products to platform, which is part of our digital workflow products. Revenues reclassified from ITOM product revenues to digital workflow products revenues were $14.9 million and $28.4 million for the three and six months ended June 30, 2018 , respectively. Our digital workflow products include our platform, IT service management, IT business management, customer service management, HR service delivery, security operations, IT asset management, field service management, and governance, risk and compliance, and are generally priced on a per user basis. Our ITOM products are generally priced on a per node (physical or virtual server) basis. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission (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 due to the permitted exclusion of certain disclosures for interim reporting. 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, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for other interim periods or future years. The condensed consolidated balance sheet as of December 31, 2018 is derived from audited financial statements; 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, 2018 , which was filed with the SEC on February 27, 2019. |
Prior Period Reclassifications | Prior Period Reclassification Certain reclassifications of prior period amounts pertaining to the reclassification of revenues from IT Operations Management (ITOM) products to digital workflow products have been made in Note 18 to conform to the current period presentation. These reclassifications did not result in a restatement of prior period financial statements. |
Principles of Consolidation | 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 | 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, evaluating the terms and conditions included within our customer contracts as well as determining 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, purchase price allocation for business combinations, stock-based compensation expenses, the useful life and recoverability of our property and equipment, goodwill and identifiable intangible assets, whether an arrangement is or contains a lease, the discount rate used for operating leases, fair value of convertible notes, income taxes, and legal contingencies. Actual results could differ from those estimates. |
Segments | Segments We define the term “chief operating decision maker” to be our Chief Executive Officer. Our chief operating decision maker allocates resources and assesses financial performance based upon discrete financial information at the consolidated level. Accordingly, we have determined that we operate as a single operating and reportable segment. |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers Financial instruments potentially exposing us to credit risk consist primarily of cash, cash equivalents, derivative contracts, investments and accounts receivable. We hold cash at financial institutions that management believes are high credit, quality financial institutions and invest in securities with a minimum rating of BBB by Standard & Poor’s, Baa2 by Moody’s, or BBB by Fitch to minimize our credit risks. Our 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 are also exposed to credit risk under the convertible note hedge transactions that may result from counterparties’ non-performance. Credit risk arising from accounts receivable is mitigated due to our large number of customers and their dispersion across various industries and geographies. As of June 30, 2019 , we had one customer that represented approximately 10% of our accounts receivable balance. As of December 31, 2018 , there were no customers that represented more than 10% of our accounts receivable balance. There were no customers that individually exceeded 10% of our total revenues in any of the periods presented. For purposes of assessing concentration of credit risk and significant customers, a group of customers under common control or customers that are affiliates of each other are regarded as a single customer. |
Updated Significant Accounting Policies, Accounting Pronouncements Adopted in 2019, Accounting Pronouncements Adopted in 2018, and New Accounting Pronouncements Pending Adoption | Updated Significant Accounting Policies Leases In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 prior practice. We adopted Topic 842 using the modified retrospective method as of January 1, 2019 and elected the transition option that allows us not to restate the comparative periods in our financial statements in the year of adoption. We also elected the package of transition expedients available for expired or existing contracts, which allowed us to carryforward our historical assessment of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. We determine if an arrangement is or contains a lease at inception by evaluating various factors, including whether a vendor’s right to substitute an identified asset is substantive. Lease classification is determined at the lease commencement date, on which the leased assets are made available for our use. Operating leases are included in “Operating lease right-of-use assets”, “Current portion of operating lease liabilities”, and “Operating lease liabilities, less current portion” in our condensed consolidated balance sheets. We did not have any material financing leases in any of the periods presented. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The difference between the total right-of-use assets and total lease liabilities recorded as of January 1, 2019 is primarily due to the derecognition of deferred rent liabilities that were included in “Accrued expenses and other current liabilities” and “Other long-term liabilities”, respectively, in our condensed consolidated balance sheet as of December 31, 2018. Lease payments consist primarily of the fixed payments under the arrangement, less any lease incentives such as rent holidays. We use an estimate of our incremental borrowing rate (IBR) based on the information available at the lease commencement date in determining the present value of lease payments, unless the implicit rate is readily determinable. In determining the appropriate IBR, we consider information including, but not limited to, our credit rating, the lease term, and the currency in which the arrangement is denominated. For leases which commenced prior to our adoption of Topic 842, we used the IBR on January 1, 2019. Our lease terms may include the sole option for us to either renew or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. For our office facility leases, we elected to account for lease and non-lease components as a single lease component. For other arrangements, lease and non-lease components are generally accounted for separately. Additionally, we do not record leases on the balance sheet that, at the lease commencement date, have a lease term of 12 months or less. Derivative financial instruments and hedging activities We use derivative financial instruments to manage foreign currency risks. These derivative contracts consist of 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 income (loss), and are intended to offset the foreign currency gains or losses associated with the underlying monetary assets and liabilities. Realized gains (losses) from settlement of the derivative assets and liabilities not designated as hedging instruments are classified as investing activities in the condensed consolidated statement of cash flows. Accounting Pronouncement Adopted in 2019 Leases As described in the “Leases” section above, we adopted Topic 842 using the modified retrospective method as of January 1, 2019 with an immaterial amount of cumulative effect adjustment recorded to our accumulated deficit as of January 1, 2019. As this standard was adopted on a modified prospective basis as of January 1, 2019, the adoption of this standard did not impact our previously reported financial statements for periods ended on or prior to December 31, 2018. Upon adoption, we recorded operating lease right-of-use assets of approximately $334.7 million and corresponding operating lease liabilities of $362.7 million on our condensed consolidated balance sheets. Accounting Pronouncements Adopted in 2018 For details on our adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” and other accounting standards adopted in 2018, refer to Note 2, Summary of Significant Accounting Policies, of the notes to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 , which was filed with the SEC on February 27, 2019. New Accounting Pronouncements Pending Adoption Cloud computing arrangements implementation costs In August 2018, the FASB issued ASU 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new standard requires capitalized costs to be amortized on a straight-line basis generally over the term of the arrangement, and the financial statement presentation for these capitalized costs would be the same as that of the fees related to the hosting arrangements. This new standard is effective for our interim and annual periods beginning January 1, 2020 and earlier adoption is permitted. This standard could be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We will adopt this standard on a prospective basis as of January 1, 2020 and are evaluating the impact of our pending adoption of this standard on our condensed consolidated financial statements. Credit losses 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, with further clarifications made more recently. For trade receivables, loans, and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available-for-sale debt securities are required to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. 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. |
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. Our equity investments in privately-held companies are not included in the table above and are discussed in Note 3 |
Legal Proceedings | From time to time, we are party to litigation and other legal proceedings in the ordinary course of business. While the results of any litigation or other legal proceedings are uncertain, management does not believe the ultimate resolution of any pending legal matters is likely to have a material adverse effect on our financial position, results of operations or cash flows, except for those matters for which we have recorded a loss contingency. We accrue for loss contingencies when it is both probable that we will incur the loss and when we can reasonably estimate the amount of the loss or range of loss. Generally, our subscription agreements require us to defend our customers for third-party intellectual property infringement and other claims. Any adverse determination related to intellectual property claims or other litigation could prevent us from offering our services and adversely affect our financial condition and results of operations. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Securities, Available-for-sale [Abstract] | |
Schedule of Marketable Debt Securities | The following is a summary of our available-for-sale investment securities recorded within short-term and long-term investments and those securities classified within cash and cash equivalents on the condensed consolidated balance sheets (in thousands): June 30, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Commercial paper $ 129,395 $ 179 $ — $ 129,574 Corporate notes and bonds 1,535,635 6,820 (290 ) 1,542,165 Certificates of deposit 66,642 77 — 66,719 U.S. government and agency securities 77,931 171 (41 ) 78,061 Total available-for-sale securities $ 1,809,603 $ 7,247 $ (331 ) $ 1,816,519 December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Commercial paper $ 108,061 $ — $ — $ 108,061 Corporate notes and bonds 1,233,589 343 (4,218 ) 1,229,714 Certificates of deposit 73,584 1 — 73,585 U.S. government and agency securities 102,549 23 (358 ) 102,214 Total available-for-sale securities $ 1,517,783 $ 367 $ (4,576 ) $ 1,513,574 |
Investments Classified by Contractual Maturity Date | The fair values of available-for-sale investment securities, by remaining contractual maturity, are as follows (in thousands): June 30, 2019 Due within 1 year $ 1,069,803 Due in 1 year through 5 years 746,716 Total $ 1,816,519 |
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 these 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 within cash and cash equivalents on the condensed consolidated balance sheets (in thousands): June 30, 2019 Less than 12 Months 12 Months or Greater Total Fair Value Gross Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate notes and bonds $ 190,304 $ (171 ) $ 139,264 $ (119 ) $ 329,568 $ (290 ) U.S. government and agency securities — — 29,959 (41 ) 29,959 (41 ) Total $ 190,304 $ (171 ) $ 169,223 $ (160 ) $ 359,527 $ (331 ) December 31, 2018 Less than 12 Months 12 Months or Greater Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate notes and bonds $ 714,605 $ (2,603 ) $ 294,956 $ (1,615 ) $ 1,009,561 $ (4,218 ) Certificates of deposit 1,000 — — — 1,000 — U.S. government and agency securities 11,756 (5 ) 61,457 (353 ) 73,213 (358 ) Total $ 727,361 $ (2,608 ) $ 356,413 $ (1,968 ) $ 1,083,774 $ (4,576 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [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 as of June 30, 2019 (in thousands): Level 1 Level 2 Total Cash equivalents: Money market funds $ 301,614 $ — $ 301,614 Commercial paper — 37,405 37,405 Corporate notes and bonds — 1,430 1,430 Certificates of deposit — 3,700 3,700 U.S. government and agency securities — 9,986 9,986 Marketable securities: Commercial paper — 129,574 129,574 Corporate notes and bonds — 1,542,165 1,542,165 Certificates of deposit — 66,719 66,719 U.S. government and agency securities — 78,061 78,061 Total $ 301,614 $ 1,869,040 $ 2,170,654 The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis as of December 31, 2018 (in thousands): Level 1 Level 2 Total Cash equivalents: Money market funds $ 229,047 $ — $ 229,047 Commercial paper — 16,961 16,961 Certificates of deposit — 2,465 2,465 Marketable securities: Commercial paper — 108,061 108,061 Corporate notes and bonds — 1,229,714 1,229,714 Certificates of deposit — 73,585 73,585 U.S. government and agency securities — 102,214 102,214 Total $ 229,047 $ 1,533,000 $ 1,762,047 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill balances are presented below (in thousands): Carrying Amount Balance as of December 31, 2018 $ 148,845 Foreign currency translation adjustments 3,627 Balance as of June 30, 2019 $ 152,472 |
Schedule of Intangible Assets | Intangible assets consist of the following (in thousands): June 30, December 31, 2019 2018 Developed technology $ 140,800 $ 114,395 Patents 66,530 57,180 Other 276 650 Intangible assets, gross 207,606 172,225 Less: accumulated amortization (86,007 ) (71,643 ) Intangible assets, net $ 121,599 $ 100,582 |
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, 2019 (in thousands): Years Ending December 31, Remainder of 2019 $ 18,056 2020 26,518 2021 24,346 2022 20,449 2023 14,607 Thereafter 17,623 Total future amortization expense $ 121,599 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 2018 Computer equipment $ 557,991 $ 493,536 Computer software 64,587 58,303 Leasehold and other improvements 87,892 74,721 Furniture and fixtures 46,873 42,551 Building (1) — 6,551 Construction in progress (1) 12,510 10,167 Property and equipment, gross 769,853 685,829 Less: Accumulated depreciation (405,846 ) (338,613 ) Property and equipment, net $ 364,007 $ 347,216 (1) We adopted Topic 842 using the modified retrospective method as of January 1, 2019 and derecognized $10.6 million in building and construction in progress assets that we were previously deemed to own under the prior lease accounting standards. These assets are recognized under our operating lease right-of-use assets under Topic 842 as of June 30, 2019 . |
Derivative Contracts (Tables)
Derivative Contracts (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Values of Outstanding Derivative Contracts | The fair values of these outstanding derivative contracts were as follows (in thousands): Condensed Consolidated Balance Sheet Location June 30, 2019 December 31, 2018 Derivative Assets: Foreign currency derivative contracts Prepaid expenses and other current assets $ 1,747 $ 22,831 Derivative Liabilities: Foreign currency derivative contracts Accrued expenses and other current liabilities $ 2,211 $ 2,441 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 December 31, 2018 Accrued payroll 185,511 158,006 Taxes payable 24,587 35,122 Other employee related liabilities 59,842 60,889 Other 90,976 76,229 Total accrued expenses and other current liabilities $ 360,916 $ 330,246 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Convertible Notes Payable [Abstract] | |
Summary of Convertible Senior Notes | The 2022 Notes consisted of the following (in thousands): June 30, 2019 December 31, 2018 Liability component: Principal: 2022 Notes $ 782,500 $ 782,500 Less: debt issuance cost and debt discount, net of amortization 2022 Notes (104,355 ) (120,793 ) Net carrying amount $ 678,145 $ 661,707 2022 Notes Equity component recorded at issuance: Note $ 162,039 Issuance cost (2,148 ) Net amount recorded in equity $ 159,891 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 value of the 2022 Notes at June 30, 2019 and December 31, 2018 based on the closing trading price per $100 of the Notes was as follows (in thousands): June 30, 2019 December 31, 2018 2022 Notes $ 1,611,801 $ 1,105,281 |
Schedule of Interest Expense Related to Convertible Senior Notes | As of June 30, 2019 , the remaining life of the 2022 Notes is 35 months, and the 2018 Notes were no longer outstanding. 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, 2019 2018 2019 2018 Amortization of debt issuance cost 2022 Notes $ 398 $ 380 $ 792 $ 756 2018 Notes — 409 — 907 Amortization of debt discount 2022 Notes 7,871 7,493 15,645 14,894 2018 Notes — 7,216 — 16,005 Total $ 8,269 $ 15,498 $ 16,437 $ 32,562 Effective interest rate of the liability component 2022 Notes 4.75% 2018 Notes 6.50% |
Schedule of Note Hedges | Purchase Initial Shares Shares as of June 30, 2019 (in thousands) 2022 Note Hedge $ 128,017 5,806,936 5,806,936 2018 Note Hedge $ 135,815 7,783,023 — |
Schedule of Warrants | Proceeds Initial Shares Strike Price First Expiration Date Shares as of June 30, 2019 (in thousands) 2022 Warrants $ 54,071 5,806,936 $ 203.40 September 1, 2022 5,806,936 2018 Warrants $ 84,525 7,783,023 $ 107.46 February 1, 2019 — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive (Loss) Income, Net of Tax | The components of accumulated other comprehensive income (loss), net of tax, consist of the following (in thousands): June 30, 2019 December 31, 2018 Foreign currency translation adjustment $ 9,569 $ 344 Net unrealized gain (loss) on investments, net of tax 3,973 (4,379 ) Accumulated other comprehensive income (loss) $ 13,542 $ (4,035 ) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of Common Stock Outstanding and Reserved Shares of Common Stock for Future Issuance | As of June 30, 2019 , we had 187,461,809 shares of common stock outstanding and had reserved shares of common stock for future issuance as follows: June 30, 2019 Stock plans: Options outstanding 1,369,724 RSUs (1) 10,916,959 Shares of common stock available for future grants: 2012 Equity Incentive Plan (2) 29,039,407 2012 Employee Stock Purchase Plan (2) 10,396,547 Total shares of common stock reserved for future issuance 51,722,637 (1) Represents the number of shares issuable upon settlement of outstanding restricted stock units (RSUs) and performance RSUs, assuming 100% of the target number of shares for performance 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, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | A summary of stock option activity for the six months ended June 30, 2019 was as follows: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 1,810,580 $ 46.55 Exercised (231,558 ) 21.69 $ 46,348 Outstanding at March 31, 2019 1,579,022 50.19 Exercised (209,298 ) 48.77 $ 45,982 Outstanding at June 30, 2019 1,369,724 $ 50.41 5.12 $ 307,033 Vested and expected to vest as of June 30, 2019 1,364,347 $ 50.31 5.11 $ 305,963 Vested and exercisable as of June 30, 2019 994,314 $ 37.74 4.20 $ 235,487 |
Schedule of Restricted Stock Unit Activity | A summary of RSU activity for the six months ended June 30, 2019 was as follows: Number of Shares Weighted Average Grant Date Fair Value (Per Share) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 10,201,660 $ 121.84 Granted 4,257,565 233.78 Vested (1,939,925 ) 117.30 $ 445,764 Forfeited (357,319 ) 121.26 Outstanding at March 31, 2019 12,161,981 160.28 Granted 315,421 257.88 Vested (1,310,296 ) 126.88 $ 354,773 Forfeited (250,147 ) 148.46 Outstanding at June 30, 2019 10,916,959 $ 167.41 $ 2,997,469 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 2018 2019 2018 Numerator: Net loss $ (11,079 ) $ (52,746 ) $ (12,624 ) $ (42,124 ) Denominator: Weighted-average shares outstanding - basic and diluted 186,677,622 177,343,176 184,418,903 176,418,984 Net loss per share - basic and diluted $ (0.06 ) $ (0.30 ) $ (0.07 ) $ (0.24 ) |
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, 2019 2018 Common stock options 1,369,724 2,169,490 RSUs 10,916,959 12,113,962 ESPP obligations 211,771 243,685 2018 Notes — 2,927,122 2018 Warrants — 7,783,023 2022 Notes 5,806,936 5,806,933 2022 Warrants 5,806,936 5,806,933 Total potentially dilutive securities 24,112,326 36,851,148 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments | Maturities of operating lease liabilities as of June 30, 2019 are presented in the table below (in thousands): Years Ending December 31, Remainder of 2019 $ 31,114 2020 62,286 2021 61,054 2022 57,882 2023 53,620 Thereafter 263,086 Total operating lease payments 529,042 Less: imputed interest (100,098 ) Present value of operating lease liabilities $ 428,944 |
Schedule of Future Minimum Commitments | Future minimum commitments under our non-cancelable operating leases as of December 31, 2018 are presented in the table below (in thousands): Years Ending December 31, 2019 $ 55,435 2020 60,996 2021 63,348 2022 67,707 2023 72,491 Thereafter 578,874 Total $ 898,851 |
Information about Geographic _2
Information about Geographic Areas and Products (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 2018 2019 2018 North America (1) $ 544,794 $ 413,259 $ 1,070,345 $ 800,732 EMEA (2) 212,606 160,644 406,438 313,070 Asia Pacific and other 76,504 57,153 146,047 106,476 Total revenues $ 833,904 $ 631,056 $ 1,622,830 $ 1,220,278 Property and equipment, net by geographic area were as follows (in thousands): June 30, 2019 December 31, 2018 North America (3) $ 223,556 $ 227,471 EMEA (2) 87,884 82,526 Asia Pacific and other 52,567 37,219 Property and equipment, net $ 364,007 $ 347,216 (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, 2019 and 2018 , respectively. (2) Europe, the Middle East and Africa (3) Property and equipment, net attributed to the United States were approximately 76% of property and equipment, net attributable to North America as of each of June 30, 2019 and December 31, 2018 , respectively. |
Schedule of Subscription Revenue | Subscription revenues consist of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Digital workflow products (1) $ 675,054 $ 509,602 $ 1,313,711 $ 985,670 ITOM products (1) 105,935 75,680 207,264 142,937 Total subscription revenues $ 780,989 $ 585,282 $ 1,520,975 $ 1,128,607 (1) As we have expanded the scope of IntegrationHub (formerly included within our ITOM offering) beyond ITOM to align more closely with our broader platform offering, revenues associated with IntegrationHub have been reclassified from ITOM products to platform, which is part of our digital workflow products. Revenues reclassified from ITOM product revenues to digital workflow products revenues were $14.9 million and $28.4 million for the three and six months ended June 30, 2018 , respectively. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Jan. 01, 2019 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | [1] | $ 397,950 | |
Operating lease liability | $ 428,944 | ||
Customer Concentration Risk | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 334,700 | ||
Operating lease liability | $ 362,700 | ||
[1] | We adopted Topic 842 using the modified retrospective method as of January 1, 2019 and elected the transition option that allows us not to restate the comparative periods in our condensed consolidated financial statements in the year of adoption. See Note 2 for further details. |
Investments - Summary of Invest
Investments - Summary of Investments (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,809,603 | $ 1,517,783 |
Gross Unrealized Gains | 7,247 | 367 |
Gross Unrealized Losses | (331) | (4,576) |
Estimated Fair Value | 1,816,519 | 1,513,574 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 129,395 | 108,061 |
Gross Unrealized Gains | 179 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 129,574 | 108,061 |
Corporate notes and bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,535,635 | 1,233,589 |
Gross Unrealized Gains | 6,820 | 343 |
Gross Unrealized Losses | (290) | (4,218) |
Estimated Fair Value | 1,542,165 | 1,229,714 |
Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 66,642 | 73,584 |
Gross Unrealized Gains | 77 | 1 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 66,719 | 73,585 |
U.S. government and agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 77,931 | 102,549 |
Gross Unrealized Gains | 171 | 23 |
Gross Unrealized Losses | (41) | (358) |
Estimated Fair Value | $ 78,061 | $ 102,214 |
Investments - Additional Inform
Investments - Additional Information (Detail) | 6 Months Ended | ||
Jun. 30, 2019USD ($)security | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Debt Securities, Available-for-sale [Abstract] | |||
Available-for-sale securities maturities term maximum | 36 months | ||
Number of available-for-sale securities in unrealized loss position | security | 143 | ||
Other than temporary impairment losses, investments, available-for-sale securities | $ 0 | ||
Unrealized gains relating to the changes in fair value | $ 19,300,000 | ||
Marketable equity securities | 0 | $ 0 | |
Equity investments in privately-held companies | $ 21,400,000 | $ 14,600,000 |
Investments - Maturities of ava
Investments - Maturities of available-for-sale investments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Abstract] | ||
Due within 1 year | $ 1,069,803 | |
Due in 1 year through 5 years | 746,716 | |
Total | $ 1,816,519 | $ 1,513,574 |
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, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Continuous unrealized loss position, less than 12 months, fair value | $ 190,304 | $ 727,361 |
Continuous unrealized loss position, less than 12 months, gross unrealized losses | (171) | (2,608) |
Continuous unrealized loss position, 12 months or greater, fair value | 169,223 | 356,413 |
Continuous unrealized loss position, 12 months or greater, gross unrealized loss | (160) | (1,968) |
Continuous unrealized loss position, fair value | 359,527 | 1,083,774 |
Continuous unrealized loss position, gross unrealized losses | (331) | (4,576) |
Corporate notes and bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous unrealized loss position, less than 12 months, fair value | 190,304 | 714,605 |
Continuous unrealized loss position, less than 12 months, gross unrealized losses | (171) | (2,603) |
Continuous unrealized loss position, 12 months or greater, fair value | 139,264 | 294,956 |
Continuous unrealized loss position, 12 months or greater, gross unrealized loss | (119) | (1,615) |
Continuous unrealized loss position, fair value | 329,568 | 1,009,561 |
Continuous unrealized loss position, gross unrealized losses | (290) | (4,218) |
Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous unrealized loss position, less than 12 months, fair value | 1,000 | |
Continuous unrealized loss position, less than 12 months, gross unrealized losses | 0 | |
Continuous unrealized loss position, 12 months or greater, fair value | 0 | |
Continuous unrealized loss position, 12 months or greater, gross unrealized loss | 0 | |
Continuous unrealized loss position, fair value | 1,000 | |
Continuous unrealized loss position, gross unrealized losses | 0 | |
U.S. government and agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Continuous unrealized loss position, less than 12 months, fair value | 0 | 11,756 |
Continuous unrealized loss position, less than 12 months, gross unrealized losses | 0 | (5) |
Continuous unrealized loss position, 12 months or greater, fair value | 29,959 | 61,457 |
Continuous unrealized loss position, 12 months or greater, gross unrealized loss | (41) | (353) |
Continuous unrealized loss position, fair value | 29,959 | 73,213 |
Continuous unrealized loss position, gross unrealized losses | $ (41) | $ (358) |
Fair Value Measurements (Detail
Fair Value Measurements (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 2,170,654 | $ 1,762,047 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 301,614 | 229,047 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 1,869,040 | 1,533,000 |
Cash equivalents | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 301,614 | 229,047 |
Cash equivalents | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 37,405 | 16,961 |
Cash equivalents | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 1,430 | |
Cash equivalents | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,700 | 2,465 |
Cash equivalents | U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 9,986 | |
Cash equivalents | Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 301,614 | 229,047 |
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 | |
Cash equivalents | Level 1 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Cash equivalents | Level 1 | U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Cash equivalents | Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Cash equivalents | Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 37,405 | 16,961 |
Cash equivalents | Level 2 | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 1,430 | |
Cash equivalents | Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,700 | 2,465 |
Cash equivalents | Level 2 | U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 9,986 | |
Investments | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 129,574 | 108,061 |
Investments | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 1,542,165 | 1,229,714 |
Investments | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 66,719 | 73,585 |
Investments | U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 78,061 | 102,214 |
Investments | Level 1 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Investments | Level 1 | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Investments | Level 1 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Investments | Level 1 | U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Investments | Level 2 | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 129,574 | 108,061 |
Investments | Level 2 | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 1,542,165 | 1,229,714 |
Investments | Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 66,719 | 73,585 |
Investments | Level 2 | U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 78,061 | $ 102,214 |
Business Combinations (Details)
Business Combinations (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019USD ($)company | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Business Acquisition [Line Items] | |||
Goodwill | $ 152,472 | $ 148,845 | |
All 2018 Business Combinations | |||
Business Acquisition [Line Items] | |||
Number of Businesses Acquired | company | 2 | ||
Payments to acquire businesses | $ 25,100 | ||
Goodwill | $ 18,100 | ||
Weighted average useful life | 5 years | ||
Net deferred tax liabilities | $ (2,200) | ||
Developed technology | |||
Business Acquisition [Line Items] | |||
Weighted average useful life | 5 years | ||
Developed technology | All 2018 Business Combinations | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 9,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | $ 148,845 |
Foreign currency translation adjustments | 3,627 |
Goodwill, end of period | $ 152,472 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 207,606 | $ 172,225 |
Less: accumulated amortization | (86,007) | (71,643) |
Intangible assets, net | 121,599 | 100,582 |
Remainder of 2019 | 18,056 | |
2020 | 26,518 | |
2021 | 24,346 | |
2022 | 20,449 | |
2023 | 14,607 | |
Thereafter | 17,623 | |
Total future amortization expense | 121,599 | |
Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 140,800 | 114,395 |
Patents | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 66,530 | 57,180 |
Other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 276 | $ 650 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets acquired | $ 36.2 | |||
Amortization expense | $ 8 | $ 6.1 | 15.1 | $ 11.8 |
Developed technology | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets acquired | $ 26.5 | |||
Weighted average useful life | 5 years | |||
Patents | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets acquired | $ 9.4 | $ 4.1 | ||
Weighted average useful life | 6 years 1 month 6 days | 10 years |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | ||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | $ 769,853 | $ 769,853 | $ 685,829 | ||||
Less: Accumulated depreciation | (405,846) | (405,846) | (338,613) | ||||
Property and equipment, net | [1] | 364,007 | 364,007 | 347,216 | |||
Depreciation | 40,100 | $ 29,200 | 77,300 | $ 56,800 | |||
Computer equipment | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 557,991 | 557,991 | 493,536 | ||||
Computer software | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 64,587 | 64,587 | 58,303 | ||||
Leasehold and other improvements | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 87,892 | 87,892 | 74,721 | ||||
Furniture and fixtures | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 46,873 | 46,873 | 42,551 | ||||
Building | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | 0 | 0 | 6,551 | ||||
Construction in progress | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | $ 12,510 | $ 12,510 | $ 10,167 | ||||
Accounting Standards Update 2016-02 | |||||||
Property, Plant and Equipment [Line Items] | |||||||
Property and equipment, gross | $ (10,600) | ||||||
[1] | We adopted Topic 842 using the modified retrospective method as of January 1, 2019 and elected the transition option that allows us not to restate the comparative periods in our condensed consolidated financial statements in the year of adoption. See Note 2 for further details. |
Derivative Contracts (Details)
Derivative Contracts (Details) - Foreign currency derivative contracts - Not Designated as Hedging Instruments - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative, notional amount | $ 551,200 | $ 872,800 |
Level 2 | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 1,747 | 22,831 |
Level 2 | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | $ 2,211 | $ 2,441 |
Deferred Revenue and Performa_2
Deferred Revenue and Performance Obligations - Revenues Recognized from Deferred Revenues (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue recognized | $ 1,000 | $ 825 |
Deferred Revenue and Performa_3
Deferred Revenue and Performance Obligations - Transaction Price Allocated to the Remaining Performance Obligations (Details) $ in Billions | Jun. 30, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining non-cancelable performance obligations | $ 5.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
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 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
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 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | |
Disclosure Summary Of Accrued Expenses And Other Current Liabilities [Abstract] | |||
Accrued payroll | $ 185,511 | $ 158,006 | |
Accrued payroll | 24,587 | 35,122 | |
Other employee related liabilities | 59,842 | 60,889 | |
Other | 90,976 | 76,229 | |
Total accrued expenses and other current liabilities | [1] | $ 360,916 | $ 330,246 |
[1] | We adopted Topic 842 using the modified retrospective method as of January 1, 2019 and elected the transition option that allows us not to restate the comparative periods in our condensed consolidated financial statements in the year of adoption. See Note 2 for further details. |
Convertible Senior Notes - Addi
Convertible Senior Notes - Additional Information (Details) shares in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($)shares | Jun. 30, 2019USD ($)daytrading_dayshares | Dec. 31, 2018USD ($) | Jun. 30, 2017USD ($) | Nov. 30, 2013USD ($) | |
Debt Instrument [Line Items] | |||||
Percentage of purchase price of notes which should be paid upon fundamental change (percent) | 100.00% | ||||
Estimated fair value of the note based on the closing trading price | $ | $ 100 | $ 100 | $ 100 | ||
Warrant exercise period | trading_day | 60 | ||||
2018 Warrants | |||||
Debt Instrument [Line Items] | |||||
Number of shares to be issued upon exercise of the Warrants (in shares) | shares | 1.6 | 4.3 | |||
2022 Warrants | |||||
Debt Instrument [Line Items] | |||||
Number of potential securities issued upon automatic exercise of the Warrants (in shares) | shares | 1.5 | 1.5 | |||
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 | 0.00% | ||||
Remaining discount amortization period | 35 months | ||||
2018 Notes | |||||
Debt Instrument [Line Items] | |||||
Face amount of debt | $ | $ 575,000,000 | ||||
Stated interest rate | 0.00% |
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 $1,000 Par Value | 0.01354 | ||
Initial Number of Shares (in shares) | shares | 7,783,023 |
Convertible Senior Notes - Sc_2
Convertible Senior Notes - Schedule of Notes Payable (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2017 |
Debt Instrument [Line Items] | |||
Net carrying amount | $ 678,145,000 | $ 661,707,000 | |
2022 Notes | |||
Debt Instrument [Line Items] | |||
Principal | 782,500,000 | 782,500,000 | $ 782,500,000 |
Less: debt issuance cost and debt discount, net of amortization | $ (104,355,000) | $ (120,793,000) |
Convertible Senior Notes - Sc_3
Convertible Senior Notes - Schedule of Equity Components (Details) - 2022 Notes $ in Thousands | Jun. 30, 2019USD ($) |
Debt Instrument [Line Items] | |
Note | $ 162,039 |
Issuance cost | (2,148) |
Net amount recorded in equity | $ 159,891 |
Convertible Senior Notes - Sc_4
Convertible Senior Notes - Schedule of Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Level 2 | 2022 Notes | ||
Debt Instrument [Line Items] | ||
Estimated fair values of notes | $ 1,611,801 | $ 1,105,281 |
Convertible Senior Notes - Sc_5
Convertible Senior Notes - Schedule of Interest Expense Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Debt Instrument [Line Items] | ||||
Total | $ 8,269 | $ 15,498 | $ 16,437 | $ 32,562 |
2022 Notes | ||||
Debt Instrument [Line Items] | ||||
Amortization of debt issuance cost | 398 | 380 | 792 | 756 |
Amortization of debt discount | $ 7,871 | 7,493 | $ 15,645 | 14,894 |
Effective interest rate of the liability component | 4.75% | 4.75% | ||
2018 Notes | ||||
Debt Instrument [Line Items] | ||||
Amortization of debt issuance cost | $ 0 | 409 | $ 0 | 907 |
Amortization of debt discount | $ 0 | $ 7,216 | $ 0 | $ 16,005 |
Effective interest rate of the liability component | 6.50% | 6.50% |
Convertible Senior Notes - Sc_6
Convertible Senior Notes - Schedule of Note Hedges (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Nov. 30, 2013 | Jun. 30, 2017 | Jun. 30, 2019 | |
2022 Note Hedge | |||
Derivative [Line Items] | |||
Purchase | $ 128,017 | ||
Initial Shares (in shares) | 5,806,936 | ||
Shares as of March 31, 2019 (in shares) | 5,806,936 | ||
2018 Note Hedge | |||
Derivative [Line Items] | |||
Purchase | $ 135,815 | ||
Initial Shares (in shares) | 7,783,023 | ||
Shares as of March 31, 2019 (in shares) | 0 |
Convertible Senior Notes - Sc_7
Convertible Senior Notes - Schedule of Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2017 | Nov. 30, 2013 | |
2022 Warrants | |||
Class of Warrant or Right [Line Items] | |||
Proceeds | $ 54,071 | ||
Initial Shares (in shares) | 5,806,936 | ||
Strike Price (in dollars per share) | $ 203.40 | ||
Shares as of June 30, 2019 | 5,806,936 | ||
2018 Warrants | |||
Class of Warrant or Right [Line Items] | |||
Proceeds | $ 84,525 | ||
Initial Shares (in shares) | 7,783,023 | ||
Strike Price (in dollars per share) | $ 107.46 | ||
Shares as of June 30, 2019 | 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Equity [Abstract] | ||
Foreign currency translation adjustment | $ 9,569 | $ 344 |
Net unrealized gain (loss) on investments, net of tax | 3,973 | (4,379) |
Accumulated other comprehensive income (loss) | $ 13,542 | $ (4,035) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - shares | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Equity [Abstract] | |||
Shares of common stock, authorized (in shares) | 600,000,000 | 600,000,000 | |
Shares of common stock, issued and sold (in shares) | 187,461,809 | 187,461,809 | |
Stock issued during period, shares, new issues (in shares) | 3,003,260 | 3,670,082 | |
2018 Warrants | |||
Class of Stock [Line Items] | |||
Number of shares to be issued upon exercise of the Warrants (in shares) | 1,600,000 | 4,300,000 |
Stockholders' Equity - Outstand
Stockholders' Equity - Outstanding and Reserved Shares of Common Stock for Future Issuance (Detail) - shares | 6 Months Ended | ||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Common stock outstanding and reserved shares of common stock for future issuance | |||
Options outstanding (in shares) | 1,369,724 | 1,579,022 | 1,810,580 |
Total shares of common stock reserved for future issuance (in shares) | 51,722,637 | ||
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) | 29,039,407 | ||
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) | 10,396,547 | ||
Options outstanding | |||
Common stock outstanding and reserved shares of common stock for future issuance | |||
Options outstanding (in shares) | 1,369,724 | ||
RSUs | |||
Common stock outstanding and reserved shares of common stock for future issuance | |||
RSUs (in shares) | 10,916,959 | 12,161,981 | 10,201,660 |
Performance-based RSUs | |||
Common stock outstanding and reserved shares of common stock for future issuance | |||
Number of shares eligible to vest (percent) | 100.00% |
Equity Awards - Additional Info
Equity Awards - Additional Information (Detail) $ in Millions | 6 Months Ended | |||
Jun. 30, 2019USD ($)incentive_planshares | Jun. 30, 2018USD ($) | Mar. 31, 2019shares | Dec. 31, 2018shares | |
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 | $ 4 | |||
Total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options | $ 8 | |||
Options outstanding | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Remaining weighted-average period | 1 year 10 months 20 days | |||
Restricted stock units with service condition only | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares outstanding (in shares) | shares | 10,104,524 | |||
Restricted stock units with service and performance conditions | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares outstanding (in shares) | shares | 812,435 | |||
Performance-based RSUs | ||||
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 | $ 40.4 | $ 37.3 | ||
Performance-based RSUs | Vesting, tranche one | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 33.00% | |||
Performance-based RSUs | Vesting, tranche two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting term | 2 years | |||
Performance-based RSUs | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares eligible to vest (percent) | 0.00% | |||
Performance-based RSUs | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares eligible to vest (percent) | 180.00% | |||
Restricted stock units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Remaining weighted-average period | 3 years 25 days | |||
Number of shares outstanding (in shares) | shares | 10,916,959 | 12,161,981 | 10,201,660 | |
Unrecognized compensation expense expected to be recognized | $ 1,400 | |||
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% | |||
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% | |||
Common stock purchase price percentage | 85.00% | |||
Award offering period | 6 months | |||
2005 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options granted to new employees vest, percentage per annum | 25.00% | |||
Requisite service period to vest employment continuation period | 3 years | |||
Options granted, exercisable period | 10 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, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | |
Number of Shares | |||
Outstanding, beginning balance (in shares) | 1,579,022 | 1,810,580 | 1,810,580 |
Exercised (in shares) | (209,298) | (231,558) | |
Outstanding, ending balance (in shares) | 1,369,724 | 1,579,022 | 1,369,724 |
Vested and expected to vest (in shares) | 1,364,347 | 1,364,347 | |
Vested and exercisable (in shares) | 994,314 | 994,314 | |
Weighted- Average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 50.19 | $ 46.55 | $ 46.55 |
Exercised (in dollars per share) | 48.77 | 21.69 | |
Outstanding, ending balance (in dollars per share) | 50.41 | $ 50.19 | 50.41 |
Vested and expected to vest (in dollars per share) | 50.31 | 50.31 | |
Vested and exercisable (in dollars per share) | $ 37.74 | $ 37.74 | |
Weighted-average remaining contractual term, outstanding | 5 years 1 month 13 days | ||
Weighted-average remaining contractual term, vested and expected to vest | 5 years 1 month 9 days | ||
Weighted-average remaining contractual term, vested and exercisable | 4 years 2 months 12 days | ||
Aggregate intrinsic value, exercised | $ 45,982 | $ 46,348 | |
Aggregate intrinsic value, outstanding | 307,033 | $ 307,033 | |
Aggregate intrinsic value, vested and expected to vest | 305,963 | 305,963 | |
Aggregate intrinsic value, vested and exercisable | $ 235,487 | $ 235,487 |
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, 2019 | Mar. 31, 2019 | |
Number of Shares | ||
Outstanding, beginning balance (in shares) | 12,161,981 | 10,201,660 |
Granted (in shares) | 315,421 | 4,257,565 |
Vested (in shares) | (1,310,296) | (1,939,925) |
Forfeited (in shares) | (250,147) | (357,319) |
Outstanding, ending balance (in shares) | 10,916,959 | 12,161,981 |
Weighted Average Grant Date Fair Value (Per Share) | ||
Outstanding, beginning balance (in dollar per share) | $ 160.28 | $ 121.84 |
Granted (in dollar per share) | 257.88 | 233.78 |
Vested (in dollar per share) | 126.88 | 117.30 |
Forfeited (in dollar per share) | 148.46 | 121.26 |
Outstanding, ending balance (in dollar per share) | $ 167.41 | $ 160.28 |
Aggregate Intrinsic Value (in thousands) | ||
Aggregate intrinsic value, vested | $ 354,773 | $ 445,764 |
Aggregate intrinsic value, outstanding | $ 2,997,469 |
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, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||||
Net loss | $ (11,079) | $ (52,746) | $ (12,624) | $ (42,124) |
Denominator: | ||||
Weighted-average shares outstanding - basic and diluted (in shares) | 186,677,622 | 177,343,176 | 184,418,903 | 176,418,984 |
Net loss per share - basic and diluted (in dollars per share) | $ (0.06) | $ (0.30) | $ (0.07) | $ (0.24) |
Net Loss Per Share - Schedule_2
Net Loss Per Share - Schedule of Potentially Dilutive Securities (Detail) - shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 24,112,326 | 36,851,148 |
Common stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 1,369,724 | 2,169,490 |
RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 10,916,959 | 12,113,962 |
ESPP obligations | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 211,771 | 243,685 |
Convertible senior notes | 2018 Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 0 | 2,927,122 |
Convertible senior notes | 2022 Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities (in shares) | 5,806,936 | 5,806,933 |
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) | 0 | 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) | 5,806,936 | 5,806,933 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2019 | |
Income Taxes [Line Items] | |||||
Income tax (benefit) provision | $ (5,236) | $ 11,897 | $ (15,147) | $ (6,085) | |
Scenario, Forecast | |||||
Income Taxes [Line Items] | |||||
Income tax (benefit) provision | $ (500,000) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Jun. 30, 2017 | |
Debt Instrument [Line Items] | ||||||
Operating lease costs | $ 16,000,000 | $ 30,700,000 | ||||
Lease expenses recognized prior to adoption of Topic 842 | $ 11,500,000 | $ 22,800,000 | ||||
Cash paid for operating lease liability | 20,400,000 | |||||
Operating lease liability from obtaining operating right-of-use assets | $ 84,100,000 | |||||
Weighted-average lease remaining lease term | 10 years 2 months 12 days | 10 years 2 months 12 days | ||||
Weighted-average discount rate | 3.80% | 3.80% | ||||
Undiscounted cash flows | $ 408,700,000 | |||||
Unrecognized tax benefits | $ 4,800,000 | 4,800,000 | ||||
Letters of credit | 22,100,000 | 22,100,000 | ||||
2022 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Face amount of debt | $ 782,500,000 | $ 782,500,000 | $ 782,500,000 | $ 782,500,000 | ||
Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 3 years | 3 years | ||||
Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 15 years | 15 years |
Commitments and Contingencies_2
Commitments and Contingencies - Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remainder of 2019 | $ 31,114 | |
2020 | 62,286 | |
2021 | 61,054 | |
2022 | 57,882 | |
2023 | 53,620 | |
Thereafter | 263,086 | |
Total operating lease payments | 529,042 | |
Less: imputed interest | (100,098) | |
Present value of operating lease liabilities | $ 428,944 | |
2019 | $ 55,435 | |
2020 | 60,996 | |
2021 | 63,348 | |
2022 | 67,707 | |
2023 | 72,491 | |
Thereafter | 578,874 | |
Total | $ 898,851 |
Information about Geographic _3
Information about Geographic Areas and Products - Geographic Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | ||
Revenues by geography | ||||||
Total revenues | $ 833,904 | $ 631,056 | $ 1,622,830 | $ 1,220,278 | ||
Percentage of U.S. revenues in North America | 94.00% | 94.00% | 94.00% | 94.00% | ||
Property and equipment by geography | ||||||
Property and equipment, net | [1] | $ 364,007 | $ 364,007 | $ 347,216 | ||
Percentage of U.S. net property and equipment in North America | 76.00% | 76.00% | 76.00% | |||
North America | ||||||
Revenues by geography | ||||||
Total revenues | $ 544,794 | $ 413,259 | $ 1,070,345 | $ 800,732 | ||
Property and equipment by geography | ||||||
Property and equipment, net | 223,556 | 223,556 | $ 227,471 | |||
EMEA | ||||||
Revenues by geography | ||||||
Total revenues | 212,606 | 160,644 | 406,438 | 313,070 | ||
Property and equipment by geography | ||||||
Property and equipment, net | 87,884 | 87,884 | 82,526 | |||
Asia Pacific and other | ||||||
Revenues by geography | ||||||
Total revenues | 76,504 | $ 57,153 | 146,047 | $ 106,476 | ||
Property and equipment by geography | ||||||
Property and equipment, net | $ 52,567 | $ 52,567 | $ 37,219 | |||
[1] | We adopted Topic 842 using the modified retrospective method as of January 1, 2019 and elected the transition option that allows us not to restate the comparative periods in our condensed consolidated financial statements in the year of adoption. See Note 2 for further details. |
Information about Geographic _4
Information about Geographic Areas and Products - Subscription Revenues (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Subscription revenues | $ 833,904 | $ 631,056 | $ 1,622,830 | $ 1,220,278 |
Digital workflow products | ||||
Segment Reporting Information [Line Items] | ||||
Subscription revenues | 675,054 | 509,602 | 1,313,711 | 985,670 |
ITOM products | ||||
Segment Reporting Information [Line Items] | ||||
Subscription revenues | 105,935 | 75,680 | 207,264 | 142,937 |
Total subscription revenues | ||||
Segment Reporting Information [Line Items] | ||||
Subscription revenues | $ 780,989 | 585,282 | $ 1,520,975 | 1,128,607 |
Restatement Adjustment | Digital workflow products | ||||
Segment Reporting Information [Line Items] | ||||
Subscription revenues | 14,900 | 28,400 | ||
Restatement Adjustment | ITOM products | ||||
Segment Reporting Information [Line Items] | ||||
Subscription revenues | $ (14,900) | $ (28,400) |
Uncategorized Items - now-20190
Label | Element | Value |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | $ 3,117,000 |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | 5,971,000 |
Restricted Cash, Noncurrent | us-gaap_RestrictedCashNoncurrent | 0 |
Restricted Cash, Noncurrent | us-gaap_RestrictedCashNoncurrent | $ 9,676,000 |