Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 19, 2020 | Jun. 28, 2019 | |
Document And Entity Information [Line Items] | |||
Title of 12(b) Security | Class A Common Stock | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | RNG | ||
Entity Central Index Key | 0001384905 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-36089 | ||
Entity Registrant Name | RingCentral, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 94-3322844 | ||
Entity Address, Address Line One | 20 Davis Drive | ||
Entity Address, City or Town | Belmont | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94002 | ||
City Area Code | 650 | ||
Local Phone Number | 472-4100 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 8.4 | ||
Security Exchange Name | NYSE | ||
Class A common stock | |||
Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 76,065,062 | ||
Class B common stock | |||
Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 11,039,473 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 343,606 | $ 566,329 |
Accounts receivable, net | 129,990 | 94,375 |
Deferred and prepaid sales commission costs | 36,589 | 23,038 |
Prepaid expenses and other current assets | 25,354 | 23,772 |
Total current assets | 535,539 | 707,514 |
Property and equipment, net | 89,230 | 70,205 |
Operating lease right-of-use-assets | 39,269 | |
Long-term investments | 132,188 | 0 |
Deferred and prepaid sales commission costs, non-current | 462,344 | 55,735 |
Goodwill | 55,278 | 31,238 |
Acquired intangibles, net | 127,338 | 19,480 |
Other assets | 9,561 | 10,154 |
Total assets | 1,450,747 | 894,326 |
Current liabilities | ||
Accounts payable | 34,612 | 10,145 |
Accrued liabilities | 138,729 | 100,687 |
Deferred revenue | 107,372 | 88,527 |
Total current liabilities | 280,713 | 199,359 |
Convertible senior notes, net | 386,889 | 366,552 |
Operating lease liabilities | 28,516 | |
Other long-term liabilities | 8,929 | 10,806 |
Total liabilities | 705,047 | 576,717 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity | ||
Additional paid-in capital | 1,033,053 | 551,078 |
Accumulated other comprehensive income | 1,948 | 2,226 |
Accumulated deficit | (289,310) | (235,703) |
Total stockholders' equity | 745,700 | 317,609 |
Total liabilities and stockholders' equity | 1,450,747 | 894,326 |
Class A common stock | ||
Stockholders' equity | ||
Common stock | 8 | 7 |
Class B common stock | ||
Stockholders' equity | ||
Common stock | $ 1 | $ 1 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Class A common stock | ||
Common stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 75,901,000 | 69,445,000 |
Common stock, shares outstanding (in shares) | 75,901,000 | 69,445,000 |
Class B common stock | ||
Common stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 11,039,000 | 11,601,000 |
Common stock, shares outstanding (in shares) | 11,039,000 | 11,601,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||
Revenues | $ 902,858 | $ 673,624 | $ 503,617 |
Cost of revenues | |||
Total cost of revenues | 231,043 | 157,129 | 121,271 |
Gross profit | 671,815 | 516,495 | 382,346 |
Operating expenses | |||
Research and development | 136,363 | 101,042 | 75,148 |
Sales and marketing | 439,100 | 329,116 | 240,223 |
General and administrative | 142,027 | 102,773 | 72,313 |
Total operating expenses | 717,490 | 532,931 | 387,684 |
Loss from operations | (45,675) | (16,436) | (5,338) |
Other income (expense), net | |||
Interest expense | (20,512) | (16,102) | (99) |
Other income, net | 9,247 | 6,475 | 1,491 |
Other income (expense), net | (11,265) | (9,627) | 1,392 |
Loss before income taxes | (56,940) | (26,063) | (3,946) |
Provision for (benefit from) income taxes | (3,333) | 140 | 258 |
Net loss | $ (53,607) | $ (26,203) | $ (4,204) |
Net loss per common share | |||
Basic and diluted (in dollars per share) | $ (0.64) | $ (0.33) | $ (0.06) |
Weighted-average number of shares used in computing net loss per share | |||
Basic and diluted (in shares) | 83,130 | 79,500 | 76,281 |
Subscriptions | |||
Revenues | |||
Revenues | $ 817,811 | $ 612,888 | $ 465,254 |
Cost of revenues | |||
Total cost of revenues | 160,320 | 109,454 | 89,193 |
Other | |||
Revenues | |||
Revenues | 85,047 | 60,736 | 38,363 |
Cost of revenues | |||
Total cost of revenues | $ 70,723 | $ 47,675 | $ 32,078 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (53,607) | $ (26,203) | $ (4,204) |
Other comprehensive income (loss) | |||
Foreign currency translation adjustments, net | (278) | (772) | 261 |
Comprehensive loss | $ (53,885) | $ (26,975) | $ (3,943) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Common StockGlip Inc | Additional Paid-in Capital | Additional Paid-in CapitalGlip Inc | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning Balance (in shares) at Dec. 31, 2016 | 74,383 | ||||||
Beginning Balance at Dec. 31, 2016 | $ 164,248 | $ 7 | $ 366,800 | $ 2,737 | $ (205,296) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings (in shares) | 3,594 | ||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings | $ 1 | ||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings | 21,804 | 21,803 | |||||
Issuance of common stock for achievement of Glip related matters (in shares) | 77 | ||||||
Issuance of common stock for achievement of Glip related matters | 3,560 | $ 3,560 | |||||
Share-based compensation | 42,677 | 42,677 | |||||
Changes in comprehensive loss | 261 | 261 | |||||
Net loss | (4,204) | (4,204) | |||||
Ending Balance (in shares) at Dec. 31, 2017 | 78,054 | ||||||
Ending Balance at Dec. 31, 2017 | 228,346 | $ 8 | 434,840 | 2,998 | (209,500) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings (in shares) | 3,231 | ||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings | 13,449 | 13,449 | |||||
Shares repurchased (in shares) | (239) | ||||||
Shares repurchased | (15,000) | (15,000) | |||||
Share-based compensation | 68,876 | 68,876 | |||||
Equity component of convertible senior notes, net of issuance cost | 98,823 | 98,823 | |||||
Purchase of capped calls | (49,910) | (49,910) | |||||
Changes in comprehensive loss | (772) | (772) | |||||
Net loss | (26,203) | (26,203) | |||||
Ending Balance (in shares) at Dec. 31, 2018 | 81,046 | ||||||
Ending Balance at Dec. 31, 2018 | 317,609 | $ 8 | 551,078 | 2,226 | (235,703) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings (in shares) | 3,723 | ||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings | $ 1 | ||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings | 15,161 | 15,160 | |||||
Issuance of common stock in connection with investments (in shares) | 2,171 | ||||||
Issuance of common stock in connection with investments | 361,000 | 361,000 | |||||
Share-based compensation | 105,815 | 105,815 | |||||
Changes in comprehensive loss | (278) | (278) | |||||
Net loss | (53,607) | (53,607) | |||||
Ending Balance (in shares) at Dec. 31, 2019 | 86,940 | ||||||
Ending Balance at Dec. 31, 2019 | $ 745,700 | $ 9 | $ 1,033,053 | $ 1,948 | $ (289,310) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Cash Flows [Abstract] | |||
Net loss | $ (53,607) | $ (26,203) | $ (4,204) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 37,870 | 23,273 | 16,214 |
Share-based compensation | 101,354 | 68,088 | 42,060 |
Amortization of deferred sales commission cost | 30,134 | 19,754 | 12,623 |
Amortization of debt discount and issuance cost | 20,337 | 15,918 | 0 |
Reduction of operating lease right-of-use assets | 13,256 | ||
Loss (gain) and other related costs on investments | 3,369 | 0 | 0 |
Foreign currency remeasurement (gain) loss | (105) | 951 | (666) |
Provision for bad debt | 2,949 | 3,091 | 1,674 |
Deferred income taxes | (737) | (303) | (47) |
Tax benefit from release of valuation allowance | (3,210) | 0 | 0 |
Other | 240 | 614 | 181 |
Changes in assets and liabilities: | |||
Accounts receivable | (37,163) | (47,877) | (17,903) |
Deferred and prepaid sales commission costs | (102,303) | (45,232) | (32,469) |
Prepaid expenses and other current assets | (1,575) | (342) | (6,199) |
Other assets | 764 | 279 | 1,533 |
Accounts payable | 21,753 | 2,783 | 176 |
Accrued liabilities | 27,095 | 33,695 | 9,918 |
Deferred revenue | 18,845 | 24,780 | 18,298 |
Operating lease liabilities | (13,830) | ||
Other liabilities | (590) | (1,139) | (24) |
Net cash provided by operating activities | 64,846 | 72,130 | 41,165 |
Cash flows from investing activities | |||
Purchases of property and equipment | (27,767) | (27,123) | (19,497) |
Capitalized internal-use software | (16,526) | (11,421) | (7,420) |
Cash paid for business combination, net of cash acquired | (27,870) | (26,434) | 0 |
Purchases of long-term investments | (135,557) | 0 | 0 |
Cash paid for acquisition of intangible assets | (89,060) | (18,470) | 0 |
Restricted investments | 0 | 0 | 530 |
Net cash used in investing activities | (296,780) | (83,448) | (26,387) |
Cash flows from financing activities | |||
Proceeds from issuance of convertible senior notes, net of issuance costs | 0 | 449,457 | 0 |
Payments for capped call transactions and costs | 0 | (49,910) | 0 |
Repurchase of common stock | 0 | (15,000) | 0 |
Proceeds from issuance of stock in connection with stock plans | 29,827 | 20,621 | 25,495 |
Taxes paid related to net share settlement of equity awards | (14,666) | (7,172) | (3,691) |
Payment of contingent consideration for business combination | (5,176) | 0 | 0 |
Repayment of financing obligations | (943) | (741) | (181) |
Repayment of debt | 0 | 0 | (14,840) |
Net cash provided by financing activities | 9,042 | 397,255 | 6,783 |
Effect of exchange rate changes | 169 | (800) | (724) |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (222,723) | 385,137 | 20,837 |
Cash, cash equivalents, and restricted cash | |||
Beginning of period | 566,329 | 181,192 | 160,355 |
End of period | 343,606 | 566,329 | 181,192 |
Supplemental disclosure of cash flow data: | |||
Cash paid for interest | 189 | 40 | 116 |
Cash paid for income taxes, net of refunds | 996 | 433 | 216 |
Non-cash investing and financing activities | |||
Cash held for future indemnity claims and other potential future payments | 7,148 | 971 | 0 |
Equipment and capitalized internal-use software purchased and unpaid at period end | 5,215 | 4,785 | 1,699 |
Common stock issued for acquisition of intangible assets | 16,450 | 0 | 0 |
Common stock issued for prepaid and deferred sales commission cost | 345,000 | 0 | 0 |
Reclassification from intangible assets to prepaid services | 0 | 8,223 | 0 |
Equipment acquired under financing obligations | 0 | 4,513 | 0 |
Earnout related matters, including issuance of common stock for milestone achievements | $ 0 | $ 5,375 | $ 3,560 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business RingCentral, Inc. (the “Company”) is a provider of software-as-a-service (“SaaS”) solutions that enables businesses to communicate, collaborate and connect. The Company was incorporated in California in 1999 and was reincorporated in Delaware on September 26, 2013. Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the consolidated accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The significant estimates made by management affect revenues, the allowance for doubtful accounts, valuation of long-term investments, deferred sales commission costs, goodwill, useful lives of intangible assets, share-based compensation, capitalization of internally developed software, return reserves, provision for income taxes, uncertain tax positions, loss contingencies, sales tax liabilities, and accrued liabilities. Management periodically evaluates these estimates and will make adjustments prospectively based upon the results of such periodic evaluations. Actual results could differ from these estimates. Foreign Currency The functional currency of the Company’s foreign subsidiaries is generally the local currency. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as part of a separate component of stockholders’ equity and reported in the statements of comprehensive loss. Foreign currency transaction gains and losses are included in net loss for the period. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are stated at fair value. Allowance for Doubtful Accounts For the years ended December 31, 2019 and 2018 , a significant portion of revenues were realized from credit card transactions while the remaining revenues generated accounts receivable. The portion of revenues billed to customers through invoices with payment terms has increased year over year. The Company determines provisions based on historical loss patterns, the number of days that billings are past due, and an evaluation of the potential risk of loss associated with delinquent accounts. Below is a summary of the changes in allowance for doubtful accounts for the years ended December 31, 2019 , 2018 and 2017 (in thousands): Balance at beginning of year Provision, net of recoveries Write-offs Balance at end of year Year ended December 31, 2019 Allowance for doubtful accounts $ 2,506 $ 2,949 $ 3,097 $ 2,358 Year ended December 31, 2018 Allowance for doubtful accounts $ 712 $ 3,091 $ 1,297 $ 2,506 Year ended December 31, 2017 Allowance for doubtful accounts $ 434 $ 1,674 $ 1,396 $ 712 Long-Term Investments Long-term investments consist of convertible and redeemable preferred securities in which the Company does not have a controlling interest or significant influence. These investments are recorded at fair value using both observable and unobservable inputs and the valuation requires judgment. These investments are reported at fair value in long-term investments in the Consolidated Balance Sheets. All gains and losses on these investments, realized and unrealized, are recognized in other income (expense), net in the Consolidated Statement of Operations. Internal-Use Software Development Costs The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage, provided that management with the relevant authority authorizes and commits to the funding of the project, it is probable the project will be completed, and the software will be used to perform the function intended. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Capitalized internal-use software development costs are included in property and equipment and are amortized on a straight-line basis over their estimated useful lives. For the years ended December 31, 2019 and 2018 , the Company capitalized $18.5 million and $11.7 million , net of impairment, of internal-use software development costs, respectively. The carrying value of internal-use software development costs was $35.6 million and $22.2 million at December 31, 2019 and 2018 , respectively. Property and Equipment, net Property and equipment, net is stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Computer hardware and software 3 to 5 years Internal-use software development costs 3 to 5 years Furniture and fixtures 1 to 5 years Leasehold improvements Shorter of the estimated lease term or useful life The Company evaluates the recoverability of property and equipment and intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets or asset groups may not be recoverable. Recoverability of these assets or asset groups is measured by comparing the carrying amounts of such assets or asset groups to the future undiscounted cash flows that such assets or asset groups are expected to generate. If this evaluation indicates that the carrying amount of the assets or asset groups is not recoverable, the carrying amount of such assets or asset groups is reduced to its estimated fair value. Maintenance and repairs are charged to expense as incurred. Leases Effective January 1, 2019, the Company adopted the requirements of Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) ("Topic 842"), issued by the Financial Accounting Standards Board (“FASB”), as discussed in Note 2. The Company determines if a contract is a lease or contains a lease at the inception of the contract and reassesses that conclusion if the contract is modified. All leases are assessed for classification as an operating lease or a finance lease. Operating lease right-of-use (“ROU”) assets are presented separately on the Company's Consolidated Balance Sheet. Operating lease liabilities are separated into a current portion, included within accrued liabilities on the Company's Consolidated Balance Sheet, and a non-current portion included within operating lease liabilities on the Company's Consolidated Balance Sheet. The Company does not have significant finance lease ROU assets or liabilities. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. The Company does not obtain and control its right to use the identified asset until the lease commencement date. The Company’s lease liabilities are recognized at the applicable lease commencement date based on the present value of the lease payments required to be paid over the lease term. Because the rate implicit in the lease is not readily determinable, the Company generally uses an incremental borrowing rate to discount the lease payments to present value. The estimated incremental borrowing rate is derived from information available at the lease commencement date. The Company factors in publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. The Company's ROU assets are also recognized at the applicable lease commencement date. The ROU asset equals the carrying amount of the related lease liability, adjusted for any lease payments made prior to lease commencement and lease incentives provided by the lessor. Variable lease payments are expensed as incurred and do not factor into the measurement of the applicable ROU asset or lease liability. The term of the Company's leases equal the non-cancellable period of the lease, including any rent-free periods provided by the lessor, and also include options to renew or extend the lease (including by not terminating the lease) that the Company is reasonably certain to exercise. The Company establishes the term of each lease at lease commencement and reassesses that term in subsequent periods when one of the triggering events outlined in Topic 842 occurs. Operating lease cost for lease payments is recognized on a straight-line basis over the lease term. The Company's lease contracts often include lease and non-lease components. For facility leases, the Company has elected the practical expedient offered by the standard to not separate lease from non-lease components and accounts for them as a single lease component. For the Company's other contracts that include leases, the Company accounts for the lease and non-lease components separately. The Company has elected, for all classes of underlying assets, not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less. Lease cost for short-term leases is recognized on a straight-line basis over the lease term. Additionally, for certain facility leases, the Company applies a portfolio approach, whereby it effectively accounts for the operating lease ROU assets and liabilities for multiple leases as a single unit of account because the accounting effect of doing so is not material. Goodwill and Intangible Assets Goodwill is tested for impairment at the reporting unit level at a minimum on an annual basis or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The Company conducted its annual impairment test of goodwill in the fourth quarter of 2019 and 2018 and determined that no adjustment to the carrying value of goodwill was required. Intangible assets consist of purchased customer relationships and developed technology. Intangible assets are amortized over the period of estimated benefit using the straight-line method and estimated useful lives ranging from two to five years . No residual value is estimated for intangible assets. Concentrations Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Although the Company deposits its cash with multiple financial institutions, its deposits, at times, may exceed federally insured limits. The Company’s accounts receivable are primarily derived from sales by resellers and to larger direct customers. The Company maintains an allowance for doubtful accounts for estimated potential credit losses. At December 31, 2019 and 2018 , and for the years then ended, none of the Company’s customers accounted for more than 10% of total accounts receivable, total revenues, or subscription revenues. For the year ended December 31, 2017 , one of the Company’s resellers accounted for 11% of the Company’s total revenues, and 12% of the Company’s subscription revenues. During the years ended December 31, 2019 , 2018 and 2017 , the Company contracted a significant portion of its software development efforts from third-party vendors located in Russia and Ukraine. A cessation of services provided by these vendors could result in a disruption to the Company’s research and development efforts. Revenue Recognition The Company derives its revenues primarily from subscriptions, sale of products, and professional services. Revenues are recognized when control of these services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps: • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when, or as, the Company satisfies a performance obligation. The Company recognizes revenues as follows: Subscriptions revenue Subscriptions revenue is generated from fees that provide customers access to one or more of the Company’s software applications and related services. These arrangements have contractual terms typically ranging from one month to five years and include recurring fixed plan subscription fees and variable usage-based fees for usage in excess of plan limits. Arrangements with customers do not provide the customer with the right to take possession of the Company’s software at any time. Instead, customers are granted continuous access to the services over the contractual period. The Company transfers control evenly over the contractual period by providing stand-ready service. Accordingly, the fixed consideration related to subscription is recognized over time on a straight-line basis over the contract term beginning on the date the Company’s service is made available to the customer. The Company may offer its customer services for no consideration during the initial months. Such discounts are recognized ratably over the term of the contract. Fees for additional minutes of usage in excess of plan limits are deemed to be variable consideration that meet the allocation exception for variable consideration as they are specific to the month that the usage occurs. The Company’s subscription contracts typically allow the customers to terminate their services within the first 30 or 60 days and receive a refund for any amounts paid. After the end of the termination period, the contract is non-cancellable and the customer is obligated to pay for the remaining term of the contract. Accordingly, the Company considers the non-cancellable term of the contract to begin after the expiration of the termination period. The Company has service-level agreements with customers warranting defined levels of uptime reliability and performance and these customers can get credits or refunds if the Company fails to meet those levels. If the services do not meet certain criteria, fees are subject to adjustment or refund representing a form of variable consideration. The Company records reductions to revenue for estimated sales returns and customer credits at the time the related revenue is recognized. Sales returns and customer credits are estimated based on the Company’s historical experience, current trends and the Company’s expectations regarding future experience. The Company monitors the accuracy of its sales reserve estimates by reviewing actual returns and credits and adjusts them for its future expectations to determine the adequacy of its current and future reserve needs. If actual future returns and credits differ from past experience, additional reserves may be required. Other revenue Other revenue includes revenue generated from sale of pre-configured phones, professional implementation services, and phone rentals. Phone revenue is recognized upon transfer of control to the customer which is generally upon shipment from the Company’s or its designated agents' warehouse. The amount of revenue recognized for products is adjusted for expected returns, which are estimated based on historical data. The Company offers professional services to support implementation and deployment of its subscription services. Professional services do not result in significant customization of the product and are generally short-term in duration. The majority of the Company’s professional services contracts are on a fixed price basis and revenue is recognized when services are delivered. Principal vs. Agent A portion of the Company’s subscriptions and product revenues are generated through sales by resellers and carrier partners. When the Company controls the performance of contractual obligations to the customer, it records these revenues at the gross amount paid by the customer with amounts retained by the resellers recognized as sales and marketing expense. The Company assesses control of goods or services when it is primarily responsible for fulfilling the promise to provide the good or service, has inventory risk and has discretion in establishing the price. When a reseller assumes the majority of these factors in assessing control, the Company records the associated revenue at the net amount received from the reseller. Deferred and prepaid sales commission costs The Company capitalizes sales commission expenses and associated payroll taxes paid to internal sales personnel and resellers, who sell the Company’s solutions. The resellers are selling agents for the Company and earn sales commissions which are directly tied to the value of the contracts that the Company enters with the end-user customers. These sales commissions are incremental costs the Company incurs to obtain contracts with its end-user customers. The Company pays sales commissions on initial contracts and contracts for increased purchases with existing customers (expansion contracts). The Company does not pay sales commissions for contract renewals. These sales commission costs are deferred and then amortized over the expected period of benefit, which is estimated to be five years . The Company has determined the period of benefit taking into consideration the expected subscription term and expected renewal periods of its customer contracts, the duration of its relationships with its customers considering historical and expected customer retention, technology and other factors. Amortization expense is included in sales and marketing expenses in the accompanying Consolidated Statement of Operations. Cost of Revenues Cost of subscriptions revenue primarily consists of costs of network capacity purchased from third-party telecommunications providers, network operations, costs to build out and maintain data centers, including co-location fees for the right to place the Company’s servers in data centers owned by third-parties, depreciation of the servers and equipment, along with related utilities and maintenance costs, personnel costs associated with customer care and support of the functionality of the Company’s platform and data center operations, including share-based compensation expenses, and allocated costs of facilities and information technology. Cost of subscriptions revenue is expensed as incurred. Cost of other revenue is comprised primarily of the cost associated with purchased phones, shipping costs, costs of professional services, and allocated costs of facilities and information technology related to the procurement, management and shipment of phones. Cost of other revenue is expensed in the period product is delivered to the customer. Share-Based Compensation Share-based compensation expense resulting from options, restricted stock units (“RSUs”), performance-based awards, and employee stock purchase plan (“ESPP”) rights granted is measured as the grant date fair value of the award and is generally recognized using the straight-line attribution method over the requisite service period of the award, which is generally the vesting period. The Company estimates the fair value of stock options, ESPP rights, and performance-based awards using the Black-Scholes-Merton option-pricing model. The Company estimates the fair value of RSUs as the closing market value of its Class A Common Stock on the grant date. For awards with performance-based and service-based conditions, compensation cost is recognized over the requisite service period if it is probable that the performance condition will be satisfied. The expense for performance-based awards is evaluated each quarter based on the achievement of the performance conditions. The effect of a change in the estimated number of performance-based awards expected to be earned is recognized in the period those estimates are revised. Compensation expense is recognized net of estimated forfeiture activity, which is based on historical forfeiture rates. Research and Development Research and development expenses consist primarily of third-party contractor costs, personnel costs, technology license expenses, and depreciation associated with research and development equipment. Research and development costs are expensed as incurred. Advertising Costs Advertising costs, which include various forms of e-commerce such as search engine marketing, search engine optimization and online display advertising, as well as more traditional forms of media advertising such as radio and billboards, are expensed as incurred and were $59.9 million , $58.3 million , and $42.4 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Convertible Debt The Company bifurcates the debt and equity (the contingently convertible feature) components of its convertible debt instruments in a manner that reflects its nonconvertible debt borrowing rate at the time of issuance. The equity components of the convertible debt instruments are recorded within stockholders’ equity with an allocated issuance discount. The debt issuance discount is amortized to interest expense in the Consolidated Statement of Operations using the effective interest method over the expected term of the convertible debt. Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company records a valuation allowance to reduce its deferred tax assets to the amount of future tax benefit that is more likely than not to be realized. As of December 31, 2019 , except for deferred tax assets associated with its subsidiary in China, the Company recorded a full valuation allowance against all other net deferred tax assets due to its history of operating losses. The Company classifies interest and penalties on unrecognized tax benefits as income tax expense. Segment Information The Company has determined the chief executive officer is the chief operating decision maker. The Company’s chief executive officer reviews financial information presented on a consolidated basis for purposes of assessing performance and making decisions on how to allocate resources. Accordingly, the Company has determined that it operates in a single reportable segment. Indemnification Certain of the Company’s agreements with resellers and customers include provisions for indemnification against liabilities if its subscriptions infringe upon a third-party’s intellectual property rights. At least quarterly, the Company assesses the status of any significant matters and its potential financial statement exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount or the range of loss can be estimated, the Company accrues a liability for the estimated loss. The Company has not incurred any material costs as a result of such indemnification provisions. The Company has not accrued any material liabilities related to such obligations as of December 31, 2019 and 2018 . Recent Accounting Pronouncements Not Yet Adopted In June 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurements, which expands the disclosure requirements for Level 3 fair value measurements and expands disclosures for entities that calculate net assets value. This new standard is effective for the Company's interim and annual reporting periods beginning January 1, 2020, and early adoption permitted. The adoption of this amendment is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which modifies the measurement of expected credit losses on certain financial instruments. This new standard is effective for the Company's interim and annual reporting periods beginning January 1, 2020, and earlier adoption is permitted. The adoption of this amendment is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. In December 2019, the FASB issued ASU No. 2019-12, Accounting Standards Update (Topic 740): Simplifying the Accounting for Income Taxes. The ASU removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group. The ASU is effective for calendar year-end public entities on January 1, 2021. Entities may early adopt the ASU in any interim period for which financial statements have not yet been issued (or made available for issuance). The Company has not yet adopted the new guidance and is currently analyzing the tax impact, but does not anticipate any material impacts upon adoption. |
Impact of Recently Adopted Acco
Impact of Recently Adopted Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Impact of Recently Adopted Accounting Pronouncements | Impact of Recently Adopted Accounting Pronouncements On January 1, 2019, the Company adopted Topic 842 , which requires recognition of ROU assets and lease liabilities for most leases on the Company’s Consolidated Balance Sheet. The Company adopted Topic 842 using a modified retrospective transition approach as of the effective date as permitted by the amendments in ASU 2018-11. As a result, the Company was not required to adjust its comparative periods' financial information for effects of the standard or make the new required lease disclosures for the periods before the date of adoption (i.e., January 1, 2019). The Company elected the package of practical expedients which allowed the Company not to reassess (1) whether existing or expired contracts, as of the adoption date, contain leases, (2) the lease classification for existing leases, and (3) whether existing initial direct costs meet the new definition. The Company also elected the practical expedient to not separate lease and non-lease components for its facility leases, and to not recognize ROU assets and liabilities for short-term leases. The standard had an impact on the Company’s Consolidated Balance Sheet but did not have a significant impact on its Consolidated Statement of Operations or Cash Flows. The impact on the Company's Consolidated Balance Sheet was the recognition of ROU assets and lease liabilities for operating leases. The adoption of this new standard at January 1, 2019, resulted in the following changes: • assets increased by $33.5 million , representing the recognition of ROU assets; and • liabilities increased by $33.5 million , primarily representing the recognition of lease liabilities. |
Revenues and Cost of Revenue
Revenues and Cost of Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues and Cost of Revenue | Revenues and Cost of Revenue Disaggregation of revenue The following table provides information about disaggregated revenue by primary geographical markets: Year ended December 31, 2019 2018 2017 Primary geographical markets North America 93 % 95 % 96 % Others 7 % 5 % 4 % Total revenues 100 % 100 % 100 % The Company derived over 90% , and approximately 88% and 84% of subscription revenues from RingCentral Office product for the years ended December 31, 2019 , 2018 and 2017 , respectively. Deferred revenue During the year ended December 31, 2019 , the Company recognized revenue of $88.3 million that was included in the corresponding deferred revenue balance at the beginning of the year. Remaining performance obligations The typical subscription term ranges from one month to five years . Contract revenue as of December 31, 2019 that has not yet been recognized was approximately $0.9 billion . This excludes contracts with an original expected length of less than one year. Of these remaining performance obligations, the Company expects to recognize revenue of 55% of this balance over the next 12 months and 45% thereafter. Other revenues and cost of revenues Other revenues are primarily comprised of product revenue from the sale of pre-configured phones, professional services, and phone rentals. Product revenues were $42.9 million , $34.4 million , and $26.0 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Cost of product revenues were $40.0 million , $30.9 million , and $25.0 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. |
Financial Statement Components
Financial Statement Components | 12 Months Ended |
Dec. 31, 2019 | |
Statement of Financial Position [Abstract] | |
Financial Statement Components | Financial Statement Components Cash and cash equivalents consisted of the following (in thousands): December 31, December 31, Cash $ 46,295 $ 80,457 Money market funds 297,311 485,872 Total cash and cash equivalents $ 343,606 $ 566,329 The Company has no restricted cash balance as of December 31, 2019 . The Company had an immaterial restricted cash balance, included in the cash balances above, as of December 31, 2018 . Accounts receivable, net consisted of the following (in thousands): December 31, December 31, Accounts receivable $ 114,745 $ 82,740 Unbilled accounts receivable 17,603 14,141 Allowance for doubtful accounts (2,358 ) (2,506 ) Accounts receivable, net $ 129,990 $ 94,375 Prepaid expenses and other current assets consisted of the following (in thousands): December 31, December 31, Prepaid expenses $ 16,249 $ 14,805 Inventory 401 199 Other current assets 8,704 8,768 Total prepaid expenses and other current assets $ 25,354 $ 23,772 Property and equipment, net consisted of the following (in thousands): December 31, December 31, Computer hardware and software $ 120,841 $ 103,766 Internal-use software development costs 48,419 29,886 Furniture and fixtures 7,690 5,896 Leasehold improvements 11,327 6,863 Property and equipment, gross 188,277 146,411 Less: accumulated depreciation and amortization (99,047 ) (76,206 ) Property and equipment, net $ 89,230 $ 70,205 Total depreciation and amortization expense related to property and equipment was $27.2 million , $18.9 million , and $15.4 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. The carrying value of goodwill is as follows (in thousands): December 31, Balance at December 31, 2018 $ 31,238 Connect First acquisition 24,465 Foreign currency translation adjustments (425 ) Balance at December 31, 2019 $ 55,278 The carrying values of intangible assets are as follows (in thousands): December 31, 2019 December 31, 2018 Estimated Lives Cost Accumulated Amortization Acquired Intangibles, Net Cost Accumulated Amortization Acquired Intangibles, Net Customer relationships 2 to 5 years $ 21,245 $ 8,178 $ 13,067 $ 20,121 $ 4,460 $ 15,661 Developed technology 3 to 5 years 123,547 9,276 114,271 6,098 2,279 3,819 Total acquired intangible assets $ 144,792 $ 17,454 $ 127,338 $ 26,219 $ 6,739 $ 19,480 Amortization expense from acquired intangible assets for the years ended December 31, 2019 , 2018 and 2017 was $10.7 million , $4.4 million and $0.8 million , respectively. Amortization of developed technology is included in cost of revenues expenses and amortization of customer relationships is included in sales and marketing expenses in the consolidated statements of operations. As of December 31, 2019 , the weighted-average amortization period for developed technology is approximately 3.9 years and for customer relationships is approximately 2.8 years . Estimated amortization expense for acquired intangible assets for the following five fiscal years and thereafter is as follows (in thousands): 2020 $ 34,274 2021 34,016 2022 28,416 2023 16,477 2024 and thereafter 14,155 Total estimated amortization expense $ 127,338 Accrued liabilities consisted of the following (in thousands): December 31, December 31, Accrued compensation and benefits $ 30,541 $ 20,932 Accrued sales, use, and telecom related taxes 25,757 19,609 Accrued marketing 17,505 12,291 Operating lease liabilities, short-term 14,249 — Other accrued expenses 50,677 47,855 Total accrued liabilities $ 138,729 $ 100,687 Deferred and Prepaid Sales Commission Costs Amortization expense for the deferred and prepaid sales commission costs for the years ended December 31, 2019 , 2018 and 2017 were $30.1 million , $19.8 million and $12.6 million , respectively. There was no impairment loss in relation to the costs capitalized for the periods presented. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures and reports certain cash equivalents, including money market funds and certificates of deposit, in addition to its long-term investments at fair value in accordance with the provisions of the authoritative accounting guidance that addresses fair value measurements. This guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: Level 1: Observable inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Other inputs, such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3: Unobservable inputs that are supported by little or no market activity and that are based on management’s assumptions, including fair value measurements determined by using pricing models, discounted cash flow methodologies or similar techniques. The financial assets carried at fair value were determined using the following inputs (in thousands): Fair Value at December 31, 2019 Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 297,311 $ 297,311 $ — $ — Noncurrent assets: Long-term investments 132,188 — — 132,188 Fair Value at December 31, 2018 Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 485,872 $ 485,872 $ — $ — Noncurrent assets: Long-term investments — — — — The Company’s other financial instruments, including accounts receivable, accounts payable, and other current liabilities, are carried at cost, which approximates fair-value due to the relatively short maturity of those instruments. Convertible Senior Notes As of December 31, 2019 , the fair value of the 0% convertible senior notes due 2023 (the “Notes”) was approximately $929.2 million . The fair value was determined based on the quoted price for the Notes in an inactive market on the last trading day of the reporting period and is considered as Level 2 in the fair value hierarchy. Long-Term Investments As of December 31, 2019 , the fair value of the Company's long-term investments in convertible and redeemable preferred stock was $132.2 million . The Company classifies its long-term investments as Level 3 in the fair value hierarchy based on the nature of the fair value inputs and judgment involved in the valuation process. These investments are reported at fair value in long-term investments in the Consolidated Balance Sheets. During fiscal year 2019 , the Company's total unrealized gains (losses) recorded in other income (expense), net, was $6.6 million . |
Business Combinations, Strategi
Business Combinations, Strategic Partnerships, and Asset Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations, Strategic Partnerships, and Asset Acquisitions | Business Combinations, Strategic Partnerships, and Asset Acquisitions 2019 Business Combination Connect First Acquisition On January 14, 2019, the Company acquired the equity interests of Connect First, Inc. (“Connect First”), a cloud-based outbound/blended customer engagement platform for midsize and enterprise companies. The acquisition complements the Company’s current Customer Engagement portfolio to provide differentiated customer experiences. The total purchase price of approximately $36.4 million consisted of cash of $29.3 million and $7.1 million held to cover indemnity claims made by the Company after the closing date. In connection with the acquisition, the Company granted $4.0 million in restricted stock units, which vest over four years . The allocation of the purchase price of the assets acquired and liabilities assumed based on their estimated fair values was as follows (in thousands): Cash and cash equivalents $ 1,427 Other tangible assets acquired 2,266 Acquired intangible assets 13,300 Goodwill 24,465 Total assets acquired 41,458 Liabilities assumed (5,013 ) Total consideration $ 36,445 The amortizable intangible assets have a weighted average useful life of three years . The purchase price exceeded the estimated fair value of the tangible and identifiable intangible assets and liabilities acquired and, as a result of the allocation, the Company recorded goodwill of $24.5 million , which is no t deductible for tax purposes. The goodwill recognized is attributable primarily to contributions of the entity's technology to the overall corporate strategy, enhancements to the Company's contact center product offerings, and assembled workforce of the acquired business. 2019 Strategic Partnerships and Asset Purchases In October 2019, the Company entered into certain agreements for a strategic partnership with Avaya Holdings Corp. (“Avaya”) and its subsidiaries, including Avaya Inc. In connection with the strategic partnership, the Company purchased $125.0 million aggregate principal amount of 3% convertible and redeemable preferred stock, with a conversion price of $16.00 per share, representing an approximately 6% position in Avaya on an as-converted basis. The Company also paid Avaya $345.0 million in the Company's common stock, predominantly for future commissions, which was capitalized and will be amortized over the expected benefit period. The transaction closed on October 31, 2019. The investment in preferred securities in which the Company does not have a controlling interest or significant influence are measured at fair value with changes recorded through other income (expense) in the Consolidated Statement of Operations. The advance payment represents prepayment for cost to obtain contracts with customers. The Company also purchased intellectual property rights, which have been capitalized as an intangible asset and will be amortized over the useful life of three years . In the fourth quarter of 2019, the Company also entered into a commercial agreement with another unrelated strategic partner for a one-time upfront consideration towards acquisition of certain intellectual property rights and commercial arrangement. Under the commercial agreement the Company's strategic partner shall be engaged as its agent in marketing and sale of its product, which represents advance payment for cost to obtain contracts with customers. In addition to the above transactions, the Company also separately entered into arrangements with unrelated third parties to acquire intellectual property rights during the fourth quarter of 2019. In connection with the above transactions, the Company recorded in aggregate $105.5 million in acquired intangible assets relating to developed technology on the Consolidated Balance Sheet, which will be amortized over their respective useful life of three to five years . The Company also recorded $371.1 million as deferred and prepaid sales commission costs representing cost to obtain contracts with customers. The prepaid assets will be amortized over their useful life based on the pattern of benefit since they are considered to be incremental customer acquisition costs. 2018 Business Combination Dimelo Acquisition On October 22, 2018 , the Company acquired Dimelo SA (“Dimelo”), a cloud-based digital customer engagement platform. The acquisition expanded the Company’s platform and enabled its customers to manage all their digital customer interactions through a single platform. The total purchase price of approximately $36.1 million consisted of cash of $30.7 million and the acquisition date fair value of contingent consideration of $5.4 million . In connection with the acquisition, the Company has agreed to grant $3.3 million in restricted stock units that vest over four years . The contingent consideration was based on the achievement of specified performance targets through the end of the second quarter of 2019. The Company settled the contingent consideration in the fourth quarter of 2019 for approximately $7.0 million . The allocation of the purchase price of the assets acquired and liabilities assumed based on their estimated fair values was as follows (in thousands): Cash and cash equivalents $ 4,225 Other tangible assets acquired 3,289 Acquired intangible assets 12,208 Goodwill 21,995 Total assets acquired 41,717 Liabilities assumed (5,646 ) Total consideration $ 36,071 The amortizable intangible assets have a weighted average useful life of five years . The purchase price exceeded the estimated fair value of the tangible and identifiable intangible assets and liabilities acquired and, as a result of the allocation, the Company recorded goodwill of $22.0 million in connection with this transaction, which is not deductible for tax purposes. The goodwill recognized is attributable primarily to the contributions of the entity's technology to the overall corporate strategy and assembled workforce of the acquired business. 2018 Acquired Customer Base On January 16, 2018, the Company acquired from AT&T the existing customer base of the RingCentral Office Hand solution, which was previously sold by AT&T, for a total fair value of the purchase consideration of $24.0 million , of which $20.0 million was cash payment upon closing of the transaction. The transaction was accounted for as an asset acquisition. Subsequently on August 31, 2018, the Company and AT&T entered into a revised agreement through June 30, 2024, under which AT&T resumed reselling RingCentral solutions to its customers and will obtain control over the non-transitioned customer base. The value of the customer base that transitioned to the Company is reflected as a customer relationship asset of approximately $10.0 million , to be amortized over the expected useful life of five years . |
Convertible Senior Notes
Convertible Senior Notes | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes In March 2018, the Company issued $460.0 million aggregate principal amount of 0% convertible senior notes due 2023 in a private placement, including the exercise in full of the over-allotment options of the initial purchasers. The Notes are senior unsecured obligations of the Company and do not bear regular interest, and the principal amount of the Notes does not accrete. The Notes may bear special interest under specified circumstances as outlined in the indenture governing the Notes (the “Indenture”) or if the Notes are not freely tradeable as required by the Indenture. The Notes will mature on March 15, 2023, unless earlier repurchased or redeemed by the Company or converted pursuant to their terms. The total net proceeds from the debt offering, after deducting initial purchase discounts and debt issuance costs, were approximately $449.5 million . Each $1,000 principal amount of the Notes is initially convertible into 12.2782 shares of the Company’s Class A common stock par value $0.0001 (“Class A Common Stock”), which is equivalent to an initial conversion price of approximately $81.45 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a make-whole fundamental change or a redemption period, each as defined in the Indenture, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Notes in connection with such make-whole fundamental change or during the relevant redemption period. The Notes will be convertible at certain times and upon the occurrence of certain events in the future. Further, on or after December 15, 2022, until the close of business on the scheduled trading day immediately preceding the maturity date, holders of the Notes may convert all or a portion of their Notes regardless of these conditions. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of Class A Common Stock, or a combination of cash and shares of Class A Common Stock, at the Company’s election. It is the Company’s current intent to settle the principal amount of the Notes with cash. During the quarter ended December 31, 2019 , the stock price condition allowing holders of the Notes to convert was met. As a result, holders have the option to convert their Notes at any time during the fiscal quarter ending March 31, 2020. There were no conversions of the Notes during the year ended December 31, 2019 . The Notes may be convertible thereafter if one or more of the conversion conditions specified in the Indenture is satisfied during future measurement periods. The Company may redeem the Notes, at its option, on or after September 20, 2020, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid special interest to, but excluding the redemption date, subject to certain conditions. No sinking fund is provided for the Notes. Upon the occurrence of a fundamental change (as defined in the Indenture) prior to the maturity date, holders may require the Company to repurchase all or a portion of the Notes for cash at a price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid special interest to, but excluding, the fundamental change repurchase date. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $101.1 million and was determined by deducting the fair value of the liability component from the par value of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense at an effective interest rate over the contractual terms of the Notes. The net carrying amount of the liability component of the Notes was as follows (in thousands): December 31, 2019 Principal $ 460,000 Unamortized discount (67,350 ) Unamortized issuance cost (5,761 ) Net carrying amount $ 386,889 The net carrying amount of the equity component of the Notes was as follows (in thousands): December 31, 2019 Proceeds allocated to the conversion option (debt discount) $ 101,141 Issuance cost (2,318 ) Net carrying amount $ 98,823 The following table sets forth the interest expense recognized related to the Notes (in thousands): Year ended December 31, 2019 2018 2017 Amortization of debt discount $ 18,920 $ 14,872 $ — Amortization of debt issuance cost 1,417 1,046 — Total interest expense related to the Notes $ 20,337 $ 15,918 $ — In connection with the offering of the Notes, the Company entered into privately-negotiated capped call transactions with certain counterparties (the “Capped Calls”). The Capped Calls each have an initial strike price of approximately $81.45 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have initial cap prices of $119.035 per share, subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, approximately 5.6 million shares of Class A Common Stock. The Capped Calls are generally intended to reduce or offset the potential dilution to the Class A Common Stock upon any conversion of the Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. The Capped Calls settle in components commencing January 13, 2023 with the last component expiring on March 13, 2023 . The Capped Calls are subject to either adjustment or termination upon the occurrence of specified extraordinary events affecting the Company, including a merger event, a tender offer, and a nationalization, insolvency or delisting involving the Company. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including changes in law, insolvency filings, and hedging disruptions. The Capped Call transactions are recorded in stockholders’ equity and are not accounted for as derivatives. The net cost of $49.9 million incurred to purchase the Capped Call transactions was recorded as a reduction to additional paid-in capital on the Company's Consolidated Balance Sheets. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company primarily leases facilities for office and datacenter space under non-cancelable operating leases for its U.S. and international locations. As of December 31, 2019 , non-cancelable leases expire on various dates between 2020 and 2029. Generally, the non-cancelable leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more. The Company has the right to exercise or forego the lease renewal options. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of December 31, 2019 , the components of leases and lease costs are as follows (in thousands): December 31, 2019 Operating leases Operating lease right-of-use assets $ 39,269 Accrued liabilities $ 14,249 Operating lease liabilities 28,516 Total operating lease liabilities $ 42,765 Year ended December 31, 2019 2018 Lease Cost Operating lease cost (a) $ 17,584 $ — (a) Includes short-term leases and variable lease costs, which are immaterial. The Company recognized rent expense on operating lease facilities of $6.9 million and $5.5 million for the years ended December 31, 2018 and 2017 . Maturities of operating lease liabilities as of December 31, 2019 are presented in the table below (in thousands): Year Ending December 31, 2020 $ 16,164 2021 12,162 2022 7,650 2023 5,197 2024 1,354 2025 onwards 5,883 Total future minimum lease payments 48,410 Less: Imputed interest (5,645 ) Present value of lease liabilities $ 42,765 Other supplemental information as of December 31, 2019 is as follows (in thousand): December 31, 2019 Lease Term and Discount Rate Weighted-average remaining operating lease term (years) 4.2 Weighted-average operating lease discount rate 5 % Year ended December 31, 2019 Supplemental Cash Flow Information Operating cash flows resulting from operating leases: Cash paid for amounts included in the measurement of lease liabilities $ 15,709 New ROU assets obtained in exchange of lease liabilities: Operating leases $ 18,584 As of December 31, 2019 , the Company has additional operating leases of approximately $2.0 million that have not yet commenced and as such, have not yet been recognized on the Company’s Consolidated Balance Sheet. These operating leases are expected to commence in the first quarter of 2020 with lease terms up to three years . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters The Company is subject to certain legal proceedings described below, and from time to time may be involved in a variety of claims, lawsuits, investigations, and proceedings relating to contractual disputes, intellectual property rights, employment matters, regulatory compliance matters, and other litigation matters relating to various claims that arise in the normal course of business. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing specific litigation and regulatory matters using reasonably available information. The Company develops its views on estimated losses in consultation with inside and outside counsel, which involves a subjective analysis of potential results and outcomes, assuming various combinations of appropriate litigation and settlement strategies. Actual claims could settle or be adjudicated against the Company in the future for materially different amounts than the Company has accrued due to the inherently unpredictable nature of litigation. Legal fees are expensed in the period in which they are incurred. TCPA Matter On November 17, 2017, Joann Hurley (“Hurley”), filed a second amended complaint in an ongoing putative class action lawsuit pending in the United States District Court for the Southern District of West Virginia, adding the Company as a named defendant and alleging that the Company and other defendants violated the Telephone Consumer Protection Act (“TCPA”) and regulations promulgated thereunder by allegedly using an automated telephone dialing system to deliver prerecorded political messages to Hurley, an incumbent running for reelection, and others. Hurley alternatively alleged that the Company was vicariously liable for the actions of the other co-defendants. Hurley seeks statutory, compensatory, consequential, incidental and punitive damages, costs, and attorneys’ fees in connection with her claims. The Company was served with the second amended complaint on January 4, 2018. On March 23, 2018, the Company filed a motion to dismiss the complaint for lack of standing and failure to sufficiently state a claim on which relief may be granted. Hurley filed her opposition brief on April 6, 2018, and the Company filed its reply brief on April 13, 2018. On October 4, 2018, the district court issued its memorandum and opinion order granting in part and denying in part the Company’s motion to dismiss. The district court dismissed Hurley’s vicarious liability claim but allowed Hurley’s TCPA claim to proceed. The Company filed its answer and affirmative defenses to the second amended complaint on October 18, 2018. Plaintiff filed a motion to certify a class on July 9, 2019. The Company and another defendant filed oppositions to the motion, which have been fully briefed and is pending decision by the court. Discovery closed on October 25, 2019. The Company filed a motion for summary judgment on November 14, 2019. The plaintiff opposed the motion, which has been fully briefed and is pending decision by the court. The parties mediated the case before a private mediator on January 23, 2020, at which time a tentative settlement was achieved. The settlement will need to be approved by the court. Meanwhile, the court has issued an order holding the case in abeyance pending approval of the settlement. The Consolidated Financial Statements include an accrual for the estimated loss that is expected to occur. Patent Infringement Matter On April 25, 2017, Uniloc USA, Inc. and Uniloc Luxembourg, S.A. (together, “Uniloc”) filed in the U.S. District Court for the Eastern District of Texas two actions against the Company alleging infringement of U.S. Patent Nos. 7,804,948; 7,853,000; and 8,571,194 by RingCentral’s Glip unified communications application. The plaintiffs seek a declaration that the Company has infringed the patents, damages according to proof, injunctive relief, as well as their costs, attorney’s fees, expenses and interest. On October 9, 2017, the Company filed a motion to dismiss or transfer requesting that the case be transferred to the United States District Court for the Northern District of California. In response to the motion, plaintiffs filed a first amended complaint on October 24, 2017. The Company filed a renewed motion to dismiss or transfer on November 15, 2017. Although briefing on that motion has been completed, the motion has not yet been decided. On February 5, 2018, Uniloc moved to stay the litigation pending the resolution of certain third-party inter partes review proceedings (“IPRs”) before the United States Patent and Trademark Office. On February 9, 2018, the court stayed the litigation pending resolution of the IPRs without prejudice to or waiver of the Company’s motion to dismiss or transfer. This litigation is still in its earliest stages. Based on the information known by the Company as of the date of this filing and the rules and regulations applicable to the preparation of the Company’s Consolidated Financial Statements, it is not possible to provide an estimated amount of any such loss or range of loss that may occur. The Company intends to vigorously defend against this lawsuit. Other matter On June 14, 2019, the Company filed suit in the Superior Court of California, County of Alameda, against Bright Pattern, Inc. and two of its officers, alleging that the defendants negotiated a potential acquisition of Bright Pattern by RingCentral fraudulently and in bad faith. The Company seeks its costs incurred in negotiating under the Letter of Intent ("LOI") that the parties entered into and damages for lost opportunity as a result of forgoing another acquisition opportunity, and attorneys’ fees and costs. On August 26, 2019, Bright Pattern filed a cross-complaint against the Company and two of its executive officers alleging breach of the LOI as well as tort claims arising from the Company's allegedly inducing Bright Pattern to enter into the LOI and subsequent extensions while allegedly misstating the timeframe for the proposed transaction. As damages, Bright Pattern seeks audit fees it allegedly incurred, a $5 million break-up fee, its alleged “cash burn” during the negotiations, and unspecified lost opportunity damages. The Company filed a demurrer to Bright Pattern’s amended cross-complaint, as well as a related motion to strike. This litigation is still in early stages. Based on the information known by the Company as of the date of this filing and the rules and regulations applicable to the preparation of the Company’s Consolidated Financial Statements, it is not possible to provide an estimated amount of any loss or range of loss that may occur. The Company intends to vigorously prosecute and defend this lawsuit. Employee Agreements The Company has signed various employment agreements with executives and key employees pursuant to which if the Company terminates their employment without cause or if the employee terminates his or her employment for good reason following a change of control of the Company, the employees are entitled to receive certain benefits, including severance payments, accelerated vesting of stock options and RSUs and continued COBRA coverage. As of December 31, 2019 , no triggering events which would cause these provisions to become effective have occurred. Therefore, no liabilities have been recorded for these agreements in the consolidated financial statements. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity In connection with the Company’s initial public offering (“IPO”), the Company reincorporated in Delaware on September 26, 2013. The Delaware certificate of incorporation provides for two classes of common stock: Class A and Class B common stock, both with a par value of $0.0001 per share. In addition, the certificate of incorporation authorizes shares of undesignated preferred stock with a par value of $0.0001 per share. The terms of preferred stock are described below. Preferred Stock The board of directors may, without further action by the stockholders, fix the rights, preferences, privileges and restrictions of up to an aggregate of 100,000,000 shares of preferred stock in one or more series and authorizes their issuance. These rights, preferences, and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of the Class A and Class B common stock. As of December 31, 2019 and 2018 , there were 100,000,000 shares of preferred stock authorized and no shares issued or outstanding. Class A and Class B Common Stock The Company has authorized 1,000,000,000 and 250,000,000 shares of Class A common stock and Class B common stock for issuance. Holders of Class A common stock and Class B common stock have identical rights for matters submitted to a vote of the Company’s stockholders. Holders of Class A common stock are entitled to one vote per share of Class A common stock and holders of Class B common stock are entitled to 10 votes per share of Class B common stock. Holders of shares of Class A common stock and Class B common stock vote together as a single class on all matters (including the election of directors) except for specific circumstances that would adversely affect the powers, preferences, or rights of a particular class of common stock. Subject to preferences that may apply to any shares of preferred stock outstanding at the time, holders of Class A and Class B common stock share equally, identically and ratably, on a per share basis, with respect to any dividend or distribution of cash, property or shares of the Company’s capital stock. Holders of Class A and Class B common stock also share equally, identically, and ratably in all assets remaining after the payment of any liabilities and liquidation preferences and any accrued or declared but unpaid dividends, if any, with respect to any outstanding preferred stock at the time. Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of Class B common stock will convert automatically to Class A common stock upon: (i) the date specified by an affirmative vote or written consent of holders of at least 67% of the outstanding shares of Class B common stock, or (ii) the seven years anniversary of the closing date of the initial public offering ( October 2, 2020 ). Shares of Class A common stock reserved for future issuance were as follows (in thousands): December 31, 2019 Preferred stock 100,000 Class B common stock 11,039 2013 Employee stock purchase plan 3,919 2013 Equity incentive plan: Outstanding options and restricted stock unit awards 5,505 Available for future grants 15,529 135,992 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation A summary of share-based compensation expense recognized in the Company’s Consolidated Statements of Operations is as follows (in thousands): Year ended December 31, 2019 2018 2017 Cost of revenues $ 8,741 $ 4,982 $ 3,735 Research and development 23,132 14,975 9,550 Sales and marketing 38,325 27,324 16,015 General and administrative 31,156 20,807 12,760 Total share-based compensation expense $ 101,354 $ 68,088 $ 42,060 A summary of share-based compensation expense by award type is as follows (in thousands): Year ended December 31, 2019 2018 2017 Options $ 986 $ 3,433 $ 6,803 Employee stock purchase plan rights 4,176 3,094 2,177 Restricted stock units 96,192 61,561 33,080 Total share-based compensation expense $ 101,354 $ 68,088 $ 42,060 Equity Incentive Plans In September 2013, the Board adopted and the Company’s stockholders approved the 2013 Equity Incentive Plan (“2013 Plan”), which became effective on September 26, 2013. In connection with the adoption of the 2013 Plan, the Company terminated the 2010 Equity Incentive Plan (“2010 Plan”), under which stock options had been granted prior to September 26, 2013. The 2010 Plan was established in September 2010, when the 2003 Equity Incentive Plan (“2003 Plan”) was terminated. After the termination of the 2003 and 2010 Plans, no additional options were granted under these plans; however, options previously granted under these plans will continue to be governed by these plans and will be exercisable into shares of Class B common stock. In addition, options authorized to be granted under the 2003 and 2010 Plans, including forfeitures of previously granted awards, are authorized for grant under the 2013 Plan. A total of 6,200,000 shares of Class A common stock were originally reserved for issuance under the 2013 Plan. The 2013 Plan includes an annual increase on the first day of each fiscal year beginning in 2014, equal to the least of: (i) 6,200,000 shares of Class A common stock; (ii) 5% of the outstanding shares of all classes of common stock as of the last day of the Company’s immediately preceding fiscal year; or (iii) such other amount as the board of directors may determine. During the year ended December 31, 2019 , a total of 4,052,295 shares of Class A common stock were added to the 2013 Plan in connection with the annual automatic increase provision. As of December 31, 2019 , a total of 15,528,723 shares remain available for grant under the 2013 Plan. The plans permit the grant of stock options and other share-based awards, such as restricted stock units, to employees, officers, directors, and consultants by the board of directors. Option awards are generally granted with an exercise price equal to the fair market value of the Company’s Class A common stock at the date of grant. Option awards generally vest according to a graded vesting schedule based on four years of continuous service. On January 29, 2014, the board of directors approved an amendment to decrease the contractual term of all equity awards issued from the 2013 Plan from 10 years to 7 years for all awards granted after January 29, 2014. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the option agreement) and early exercise of options prior to vesting (subject to the Company’s repurchase right). A summary of option activity under all of the Company’s equity incentive plans at December 31, 2019 and changes during the period then ended is presented in the following table: Number of Options Outstanding (in thousands) Weighted- Average Exercise Price Per Share Weighted- Average Contractual Term (in Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2016 7,384 $ 10.59 5.3 $ 74,065 Granted 25 23.99 Exercised (1,722 ) 10.39 Canceled/Forfeited (401 ) 16.04 Outstanding at December 31, 2017 5,286 $ 10.30 4.2 $ 201,480 Granted — — Exercised (1,138 ) 8.17 Canceled/Forfeited (17 ) 18.79 Outstanding at December 31, 2018 4,131 $ 10.86 3.3 $ 295,921 Granted — — Exercised (1,742 ) 8.53 Canceled/Forfeited (132 ) 2.73 Outstanding at December 31, 2019 2,257 $ 13.13 2.5 $ 351,428 Vested and expected to vest as of December 31, 2019 2,259 $ 13.13 2.5 $ 351,362 Excercisable as of December 31, 2019 2,243 $ 13.10 2.5 $ 349,002 There were no options granted for the year ended December 31, 2019 and 2018 . The total intrinsic value of options exercised during year ended December 31, 2019 , 2018 and 2017 were $215.5 million , $74.6 million , and $41.2 million , respectively. Valuation Assumptions The Company estimated the fair values of each option awarded on the date of grant using the Black-Scholes-Merton option-pricing model, which requires inputs including the fair value of common stock, expected term, expected volatility, risk-free interest rate, and dividend yield. The weighted-average assumptions used in the option-pricing model and the resulting grant date fair value of stock options granted in 2017 were as follows: Year Ended December 31, 2017 Expected term for employees (in years) 4.4 Expected term for non-employees (in years) 4.6 Expected volatility 44 % Risk-free interest rate 1.78 % Expected dividend yield 0 % Grant date fair value of employee options $ 9.08 As of December 31, 2019 and 2018 , there was an immaterial amount and $1.0 million of unrecognized share-based compensation expense, net of estimated forfeitures, related to non-vested stock option grants, which will be recognized on a straight-line basis over the remaining weighted-average vesting periods of approximately 0.3 years and 0.8 years , respectively. Employee Stock Purchase Plan The Company's Employee Stock Purchase Plan (“ESPP”) allows eligible employees to purchase shares of the Company’s Class A common stock at a discounted price, through payroll deductions of up to the lesser of 15% of their eligible compensation or the IRS allowable limit per calendar year. A participant may purchase a maximum of 3,000 shares during an offering period. The offering periods are for a period of six months and generally start on the first trading day on or after May 13th and November 13th of each year. At the end of the offering period, the purchase price is set at the lower of: (i) 90% of the fair value of the Company’s common stock at the beginning of the six month offering period and (ii) 90% of the fair value of the Company’s Class A common stock at the end of the six month offering period. The ESPP provides for annual increases in the number of shares available for issuance under the ESPP on the first day of each fiscal year beginning in fiscal 2014, equal to the least of: (i) 1% of the outstanding shares of all classes of common stock on the last day of the immediately preceding year; (ii) 1,250,000 shares; or (iii) such other amount as may be determined by the board of directors. During the year ended December 31, 2019 , a total of 810,459 shares of Class A common stock were added to the ESPP Plan in connection with the annual increase provision. At December 31, 2019 , a total of 3,918,712 shares were available for issuance under the ESPP. The weighted-average assumptions used to value ESPP rights under the Black-Scholes-Merton option-pricing model and the resulting offering grant date fair value of ESPP rights granted in the periods presented were as follows: Year ended December 31, 2019 2018 2017 Expected term (in years) 0.5 0.5 0.5 Expected volatility 47 % 42 % 34 % Risk-free interest rate 2.01 % 2.31 % 1.20 % Expected dividend yield 0 % 0 % 0 % Offering grant date fair value of ESPP rights $ 33.66 $ 18.07 $ 9.52 As of December 31, 2019 and 2018 , there was approximately $2.3 million and $1.5 million of unrecognized share-based compensation expense, net of estimated forfeitures, related to ESPP, which will be recognized on a straight-line basis over the remaining weighted-average vesting periods of approximately 0.4 years , respectively. Restricted Stock Units The 2013 Plan provides for the issuance of RSUs to employees, directors, and consultants. RSUs issued under the 2013 Plan generally vest over four years . A summary of activity of RSUs under the 2013 Plan at December 31, 2019 and changes during the periods then ended is presented in the following table: Number of RSUs Outstanding (in thousands) Weighted- Average Grant Date Fair Value Per Share Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2016 3,554 $ 18.01 $ 73,261 Granted 3,005 30.20 Released (1,680 ) 19.54 Canceled/Forfeited (598 ) 20.91 Outstanding at December 31, 2017 4,281 $ 25.51 $ 207,197 Granted 1,746 67.64 Released (1,971 ) 30.50 Canceled/Forfeited (495 ) 34.99 Outstanding at December 31, 2018 3,561 $ 42.09 $ 293,523 Granted 2,069 122.35 Released (1,906 ) 50.99 Canceled/Forfeited (475 ) 60.38 Outstanding at December 31, 2019 3,249 $ 85.39 $ 548,145 As of December 31, 2019 and 2018 , there was a total of $198.3 million and $107.9 million of unrecognized share-based compensation expense, net of estimated forfeitures, related to RSUs, which will be recognized on a straight-line basis over the remaining weighted-average vesting periods of approximately 2.3 years and 2.4 years , respectively. Bonus Plan In December 2017, the Company's board of directors (the "Board") adopted the Selective 2018 Key Employee Equity Bonus Plan (the "2018 KEEB Plan”), which became effective on January 1, 2018, and in December 2018, the Board adopted the Selective 2019 Key Employee Equity Bonus Plan (the "2019 KEEB Plan" and together with the 2018 KEEB Plan the "KEEB Plans"), which became effective on January 1, 2019. Both of the KEEB Plans allow the recipients to earn fully vested shares of the Company’s Class A Common Stock upon the achievement of quarterly service and performance conditions. During the year ended December 31, 2019 and 2018 , 0.1 million and 0.1 million RSUs were issued under the KEEB Plans, respectively. The total requisite service period of each quarterly award is approximately 0.4 years . The unrecognized share-based compensation expense was approximately $1.0 million , which will be recognized over the remaining service period of 0.1 years. The shares issued under the KEEB Plans will be issued from the reserve of shares available for issuance under the 2013 Plan. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Net loss before provision for (benefit from) income taxes consisted of the following (in thousands): Year ended December 31, 2019 2018 2017 United States $ (64,822 ) $ (29,584 ) $ (5,883 ) International 7,882 3,521 1,937 Total net loss before provision for (benefit from) income taxes $ (56,940 ) $ (26,063 ) $ (3,946 ) The provision for (benefit from) income taxes consisted of the following (in thousands): Year ended December 31, 2019 2018 2017 Current Federal $ — $ — $ — State 150 61 49 Foreign 464 382 256 Total current $ 614 $ 443 $ 305 Deferred Federal $ (2,765 ) $ — $ — State (445 ) — — Foreign (737 ) (303 ) (47 ) Total deferred (3,947 ) (303 ) (47 ) Total income tax provision $ (3,333 ) $ 140 $ 258 The provision for (benefit from) income tax differed from the amounts computed by applying the U.S. federal income tax rate to pretax loss as a result of the following (in thousands): Year ended December 31, 2019 2018 2017 Federal tax benefit at statutory rate $ (11,957 ) $ (5,473 ) $ (1,341 ) State tax, net of federal tax benefit (233 ) 48 32 Research and development credits (5,312 ) (3,284 ) (707 ) Share-based compensation (58,780 ) (25,170 ) (18,154 ) Other permanent differences 3,149 1,325 814 Change in U.S. federal Tax Rate — — 33,254 Foreign tax rate differential (799 ) (288 ) (445 ) Net operating (gains) losses not recognized 73,364 32,982 (13,195 ) Release of valuation allowance associated with acquisitions (2,765 ) — — Total income tax provision $ (3,333 ) $ 140 $ 258 In general, it is the Company’s practice and intention to reinvest the earnings of its non-U.S. subsidiaries in those operations. Undistributed earnings of foreign subsidiaries are immaterial for all periods presented. Because the Company’s non-U.S. subsidiary earnings have previously been subject to the one-time transition tax on foreign earnings required by the 2017 Tax Act, any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of its foreign investments would generally be limited to foreign withholding taxes and/or U.S. state income taxes. The types of temporary differences that give rise to significant portions of the Company’s deferred tax assets and liabilities are as follows (in thousands): Year ended December 31, 2019 2018 Deferred tax assets Net operating loss and credit carry-forwards $ 196,930 $ 109,812 Research and development credits 24,452 16,380 Sales tax liability 157 258 Share-based compensation 5,937 5,435 Accrued liabilities 6,612 5,135 Gross deferred tax assets 234,088 137,020 Valuation allowance (180,090 ) (94,118 ) Total deferred tax assets 53,998 42,902 Deferred tax liabilities Convertible debt discount (16,701 ) (21,035 ) Deferred sales commissions (28,601 ) (18,253 ) Acquired intangibles (3,857 ) (2,670 ) Property and equipment (6,731 ) (3,573 ) Net deferred tax (liabilities) assets $ (1,892 ) $ (2,629 ) On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. In connection with the acquisition of Connect First on January 14, 2019, a net deferred tax liability of $3.2 million was established, the most significant component of which is related to the book/tax basis differences associated with the acquired technology and customer relationships. The net deferred tax liability from this acquisition created an additional source of income to realize deferred tax assets. As the Company continues to maintain a full valuation allowance against its deferred tax assets, this additional source of income resulted in the release of the Company’s previously recorded valuation allowance against deferred assets. Consistent with the applicable guidance the release of the valuation allowance of $3.2 million caused by the acquisition was recorded in the consolidated financial statements outside of acquisition accounting as a tax benefit to the Consolidated Statements of Operations. As of December 31, 2019 , the Company has federal net operating loss carryforwards of approximately $782.7 million , of which approximately $272.9 million expire between 2023 and 2037 and the remainder do not expire. As of December 31, 2019 , the Company had state net operating loss carryforwards of approximately $675.6 million which will begin to expire in 2021 . The Company also has research credit carryforwards for federal and California tax purposes of approximately $20.2 million and $15.7 million , respectively, available to reduce future income subject to income taxes. The federal research credit carryforwards will begin to expire in 2028 and the California research credits carry forward indefinitely. The Internal Revenue Code of 1986, as amended, imposes restrictions on the utilization of net operating losses in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use net operating losses may be limited as prescribed under Internal Revenue Code Section 382 (“IRC Section 382”). Events which may cause limitations in the amount of the net operating losses that the Company may use in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three -year period. Utilization of the federal and state net operating losses may be subject to substantial annual limitation due to the ownership change limitations provided by the IRC Section 382 and similar state provisions. The Company’s management believes that, based on a number of factors, it is more likely than not, that all or some portion of the deferred tax assets will not be realized; and accordingly, for the year ended December 31, 2019 , the Company has provided a valuation allowance against the Company’s U.S. net deferred tax assets. The net change in the valuation allowance for the years ended December 31, 2019 and 2018 was an increase of $86.0 million , $18.2 million , respectively. In accordance with ASC 740-10, Income Taxes , the Company has adopted the accounting policy that interest and penalties recognized are classified as part of its income taxes. The following shows the changes in the gross amount of unrecognized tax benefits as of December 31, 2019 (in thousands): 2019 2018 2017 Unrecognized tax benefits, beginning of the year $ 6,029 $ 3,004 $ 2,460 Increases related to prior year tax positions — 1,050 — Decreases related to prior year tax positions (48 ) — (3 ) Increases related to current year tax positions 2,984 1,975 547 Unrecognized tax benefits, end of year $ 8,965 $ 6,029 $ 3,004 The Company does not anticipate that its total unrecognized tax benefits will significantly change due to settlement of examination or the expiration of statute of limitations during the next 12 months. The Company files U.S. and foreign income tax returns with varying statutes of limitations. Due to the Company’s net carry-over of unused operating losses and tax credits, all years from 2003 forward remain subject to future examination by tax authorities. |
Basic and Diluted Net Loss Per
Basic and Diluted Net Loss Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, less the weighted-average unvested common stock subject to repurchase or forfeiture as they are not deemed to be issued for accounting purposes. Diluted net loss per share is computed by giving effect to all potential shares of common stock, stock options, restricted stock units, ESPP, and convertible senior notes, to the extent dilutive. For the periods presented, all such common stock equivalents have been excluded from diluted net loss per share as the effect to net loss per share would be anti-dilutive. The following table sets forth the computation of the Company’s basic and diluted net loss per share during the years ended December 31, 2019 , 2018 and 2017 (in thousands, except per share data): Year Ended December 31, 2019 2018 2017 Numerator Net loss $ (53,607 ) $ (26,203 ) $ (4,204 ) Denominator Weighted-average common shares for basic and diluted net loss per share 83,130 79,500 76,281 Basic and diluted net loss per share $ (0.64 ) $ (0.33 ) $ (0.06 ) The following table summarizes the potentially dilutive common shares that were excluded from diluted weighted-average common shares outstanding because including them would have had an anti-dilutive effect (in thousands): Year Ended December 31, 2019 2018 2017 Shares of common stock issuable under equity incentive plans outstanding 6,832 8,943 10,806 Convertible senior notes 1,905 79 — Potential common shares excluded from diluted net loss per share 8,737 9,022 10,806 Since the Company expects to settle the principal amount of its outstanding convertible senior notes in cash and any excess in cash or shares of the Company’s Class A Common Stock, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share of common stock when the average market price of the Company’s Class A Common Stock for a given period exceeds the conversion price of $81.45 per share for the Notes. |
Geographic Concentrations
Geographic Concentrations | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Geographic Concentrations | Geographic Concentrations Revenues by geographic location are based on the billing address of the customer. More than 90% of the Company’s revenues are from the U.S. for fiscal years ended December 31, 2019 , 2018 , and 2017 . No other individual country exceeded 10% of total revenues for fiscal years ended December 31, 2019 , 2018 , and 2017 . Long-lived assets by geographic location is based on the location of the legal entity that owns the asset. As of December 31, 2019 and 2018 , approximately 89% and 67% of the Company’s consolidated long-lived assets, respectively, were located in the U.S. France represented 8% and 26% of the Company’s consolidated long-lived assets, including fair value adjustments relating to the acquisition of Dimelo. There was no other single country outside of the U.S. representing 10% or more of the Company’s consolidated long-lived assets as of December 31, 2019 and 2018 . |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
401(k) Plan | 401(k) Plan The Company has a qualified defined contribution plan under Section 401(k) of the Internal Revenue Code covering eligible employees. Substantially all of the U.S. employees are eligible to make contributions to the 401(k) plan. On July 1, 2017, the Company implemented a 401(k) employer match, based on the amount of the employees’ contributions subject to certain limitations. Employer contributions were $4.1 million , $2.9 million , and $1.1 million for the years ended December 31, 2019 , 2018 and 2017 . |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (unaudited) The following tables set forth selected unaudited quarterly consolidated statements of operations data for each of the eight quarters in the years ended December 31, 2019 and 2018 (in thousands except per share data): Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018 Consolidated Statements of Operations Data Revenues $ 252,865 $ 233,352 $ 215,152 $ 201,489 $ 188,624 $ 173,825 $ 160,832 $ 150,343 Gross profit 185,992 173,647 161,522 150,654 144,509 134,551 122,766 114,669 Operating loss (20,369 ) (10,663 ) (7,180 ) (7,463 ) (3,404 ) (7,027 ) (4,654 ) (1,351 ) Net loss (25,257 ) (12,749 ) (9,243 ) (6,358 ) (5,678 ) (9,518 ) (8,291 ) (2,716 ) Net loss per share, basic and diluted $ (0.30 ) $ (0.15 ) $ (0.11 ) $ (0.08 ) $ (0.07 ) $ (0.12 ) $ (0.10 ) $ (0.03 ) |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions In the ordinary course of business, the Company made purchases from Google Inc., at which one of the Company’s directors serves as President, Americas. Total payables to Google Inc. at December 31, 2019 and 2018 were $1.5 million and $1.2 million , respectively. Total expenses incurred from Google Inc. in 2019 , 2018 , and 2017 were $18.7 million , $18.8 million , and $15.4 million , respectively. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The significant estimates made by management affect revenues, the allowance for doubtful accounts, valuation of long-term investments, deferred sales commission costs, goodwill, useful lives of intangible assets, share-based compensation, capitalization of internally developed software, return reserves, provision for income taxes, uncertain tax positions, loss contingencies, sales tax liabilities, and accrued liabilities. Management periodically evaluates these estimates and will make adjustments prospectively based upon the results of such periodic evaluations. Actual results could differ from these estimates. |
Foreign Currency | Foreign Currency The functional currency of the Company’s foreign subsidiaries is generally the local currency. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as part of a separate component of stockholders’ equity and reported in the statements of comprehensive loss. Foreign currency transaction gains and losses are included in net loss for the period. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are stated at fair value. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts For the years ended December 31, 2019 and 2018 , a significant portion of revenues were realized from credit card transactions while the remaining revenues generated accounts receivable. The portion of revenues billed to customers through invoices with payment terms has increased year over year. The Company determines provisions based on historical loss patterns, the number of days that billings are past due, and an evaluation of the potential risk of loss associated with delinquent accounts. |
Long-Term Investments | Long-Term Investments Long-term investments consist of convertible and redeemable preferred securities in which the Company does not have a controlling interest or significant influence. These investments are recorded at fair value using both observable and unobservable inputs and the valuation requires judgment. These investments are reported at fair value in long-term investments in the Consolidated Balance Sheets. All gains and losses on these investments, realized and unrealized, are recognized in other income (expense), net in the Consolidated Statement of Operations. |
Internal-Use Software Development Costs | Internal-Use Software Development Costs The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage, provided that management with the relevant authority authorizes and commits to the funding of the project, it is probable the project will be completed, and the software will be used to perform the function intended. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Capitalized internal-use software development costs are included in property and equipment and are amortized on a straight-line basis over their estimated useful lives. |
Property and Equipment, Net | Property and Equipment, net Property and equipment, net is stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Computer hardware and software 3 to 5 years Internal-use software development costs 3 to 5 years Furniture and fixtures 1 to 5 years Leasehold improvements Shorter of the estimated lease term or useful life The Company evaluates the recoverability of property and equipment and intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets or asset groups may not be recoverable. Recoverability of these assets or asset groups is measured by comparing the carrying amounts of such assets or asset groups to the future undiscounted cash flows that such assets or asset groups are expected to generate. If this evaluation indicates that the carrying amount of the assets or asset groups is not recoverable, the carrying amount of such assets or asset groups is reduced to its estimated fair value. Maintenance and repairs are charged to expense as incurred. |
Leases | Leases Effective January 1, 2019, the Company adopted the requirements of Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) ("Topic 842"), issued by the Financial Accounting Standards Board (“FASB”), as discussed in Note 2. The Company determines if a contract is a lease or contains a lease at the inception of the contract and reassesses that conclusion if the contract is modified. All leases are assessed for classification as an operating lease or a finance lease. Operating lease right-of-use (“ROU”) assets are presented separately on the Company's Consolidated Balance Sheet. Operating lease liabilities are separated into a current portion, included within accrued liabilities on the Company's Consolidated Balance Sheet, and a non-current portion included within operating lease liabilities on the Company's Consolidated Balance Sheet. The Company does not have significant finance lease ROU assets or liabilities. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. The Company does not obtain and control its right to use the identified asset until the lease commencement date. The Company’s lease liabilities are recognized at the applicable lease commencement date based on the present value of the lease payments required to be paid over the lease term. Because the rate implicit in the lease is not readily determinable, the Company generally uses an incremental borrowing rate to discount the lease payments to present value. The estimated incremental borrowing rate is derived from information available at the lease commencement date. The Company factors in publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. The Company's ROU assets are also recognized at the applicable lease commencement date. The ROU asset equals the carrying amount of the related lease liability, adjusted for any lease payments made prior to lease commencement and lease incentives provided by the lessor. Variable lease payments are expensed as incurred and do not factor into the measurement of the applicable ROU asset or lease liability. The term of the Company's leases equal the non-cancellable period of the lease, including any rent-free periods provided by the lessor, and also include options to renew or extend the lease (including by not terminating the lease) that the Company is reasonably certain to exercise. The Company establishes the term of each lease at lease commencement and reassesses that term in subsequent periods when one of the triggering events outlined in Topic 842 occurs. Operating lease cost for lease payments is recognized on a straight-line basis over the lease term. The Company's lease contracts often include lease and non-lease components. For facility leases, the Company has elected the practical expedient offered by the standard to not separate lease from non-lease components and accounts for them as a single lease component. For the Company's other contracts that include leases, the Company accounts for the lease and non-lease components separately. The Company has elected, for all classes of underlying assets, not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less. Lease cost for short-term leases is recognized on a straight-line basis over the lease term. Additionally, for certain facility leases, the Company applies a portfolio approach, whereby it effectively accounts for the operating lease ROU assets and liabilities for multiple leases as a single unit of account because the accounting effect of doing so is not material. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is tested for impairment at the reporting unit level at a minimum on an annual basis or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The Company conducted its annual impairment test of goodwill in the fourth quarter of 2019 and 2018 and determined that no adjustment to the carrying value of goodwill was required. Intangible assets consist of purchased customer relationships and developed technology. Intangible assets are amortized over the period of estimated benefit using the straight-line method and estimated useful lives ranging from two to five years . No residual value is estimated for intangible assets. |
Concentrations | Concentrations Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Although the Company deposits its cash with multiple financial institutions, its deposits, at times, may exceed federally insured limits. The Company’s accounts receivable are primarily derived from sales by resellers and to larger direct customers. The Company maintains an allowance for doubtful accounts for estimated potential credit losses. At December 31, 2019 and 2018 , and for the years then ended, none of the Company’s customers accounted for more than 10% of total accounts receivable, total revenues, or subscription revenues. For the year ended December 31, 2017 , one of the Company’s resellers accounted for 11% of the Company’s total revenues, and 12% of the Company’s subscription revenues. During the years ended December 31, 2019 , 2018 and 2017 , the Company contracted a significant portion of its software development efforts from third-party vendors located in Russia and Ukraine. A cessation of services provided by these vendors could result in a disruption to the Company’s research and development efforts. |
Revenue Recognition | Revenue Recognition The Company derives its revenues primarily from subscriptions, sale of products, and professional services. Revenues are recognized when control of these services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company determines revenue recognition through the following steps: • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when, or as, the Company satisfies a performance obligation. The Company recognizes revenues as follows: Subscriptions revenue Subscriptions revenue is generated from fees that provide customers access to one or more of the Company’s software applications and related services. These arrangements have contractual terms typically ranging from one month to five years and include recurring fixed plan subscription fees and variable usage-based fees for usage in excess of plan limits. Arrangements with customers do not provide the customer with the right to take possession of the Company’s software at any time. Instead, customers are granted continuous access to the services over the contractual period. The Company transfers control evenly over the contractual period by providing stand-ready service. Accordingly, the fixed consideration related to subscription is recognized over time on a straight-line basis over the contract term beginning on the date the Company’s service is made available to the customer. The Company may offer its customer services for no consideration during the initial months. Such discounts are recognized ratably over the term of the contract. Fees for additional minutes of usage in excess of plan limits are deemed to be variable consideration that meet the allocation exception for variable consideration as they are specific to the month that the usage occurs. The Company’s subscription contracts typically allow the customers to terminate their services within the first 30 or 60 days and receive a refund for any amounts paid. After the end of the termination period, the contract is non-cancellable and the customer is obligated to pay for the remaining term of the contract. Accordingly, the Company considers the non-cancellable term of the contract to begin after the expiration of the termination period. The Company has service-level agreements with customers warranting defined levels of uptime reliability and performance and these customers can get credits or refunds if the Company fails to meet those levels. If the services do not meet certain criteria, fees are subject to adjustment or refund representing a form of variable consideration. The Company records reductions to revenue for estimated sales returns and customer credits at the time the related revenue is recognized. Sales returns and customer credits are estimated based on the Company’s historical experience, current trends and the Company’s expectations regarding future experience. The Company monitors the accuracy of its sales reserve estimates by reviewing actual returns and credits and adjusts them for its future expectations to determine the adequacy of its current and future reserve needs. If actual future returns and credits differ from past experience, additional reserves may be required. Other revenue Other revenue includes revenue generated from sale of pre-configured phones, professional implementation services, and phone rentals. Phone revenue is recognized upon transfer of control to the customer which is generally upon shipment from the Company’s or its designated agents' warehouse. The amount of revenue recognized for products is adjusted for expected returns, which are estimated based on historical data. The Company offers professional services to support implementation and deployment of its subscription services. Professional services do not result in significant customization of the product and are generally short-term in duration. The majority of the Company’s professional services contracts are on a fixed price basis and revenue is recognized when services are delivered. Principal vs. Agent A portion of the Company’s subscriptions and product revenues are generated through sales by resellers and carrier partners. When the Company controls the performance of contractual obligations to the customer, it records these revenues at the gross amount paid by the customer with amounts retained by the resellers recognized as sales and marketing expense. The Company assesses control of goods or services when it is primarily responsible for fulfilling the promise to provide the good or service, has inventory risk and has discretion in establishing the price. When a reseller assumes the majority of these factors in assessing control, the Company records the associated revenue at the net amount received from the reseller. Deferred and prepaid sales commission costs The Company capitalizes sales commission expenses and associated payroll taxes paid to internal sales personnel and resellers, who sell the Company’s solutions. The resellers are selling agents for the Company and earn sales commissions which are directly tied to the value of the contracts that the Company enters with the end-user customers. These sales commissions are incremental costs the Company incurs to obtain contracts with its end-user customers. The Company pays sales commissions on initial contracts and contracts for increased purchases with existing customers (expansion contracts). The Company does not pay sales commissions for contract renewals. These sales commission costs are deferred and then amortized over the expected period of benefit, which is estimated to be five years . The Company has determined the period of benefit taking into consideration the expected subscription term and expected renewal periods of its customer contracts, the duration of its relationships with its customers considering historical and expected customer retention, technology and other factors. Amortization expense is included in sales and marketing expenses in the accompanying Consolidated Statement of Operations. |
Cost of Revenues | Cost of Revenues Cost of subscriptions revenue primarily consists of costs of network capacity purchased from third-party telecommunications providers, network operations, costs to build out and maintain data centers, including co-location fees for the right to place the Company’s servers in data centers owned by third-parties, depreciation of the servers and equipment, along with related utilities and maintenance costs, personnel costs associated with customer care and support of the functionality of the Company’s platform and data center operations, including share-based compensation expenses, and allocated costs of facilities and information technology. Cost of subscriptions revenue is expensed as incurred. Cost of other revenue is comprised primarily of the cost associated with purchased phones, shipping costs, costs of professional services, and allocated costs of facilities and information technology related to the procurement, management and shipment of phones. Cost of other revenue is expensed in the period product is delivered to the customer. |
Share-Based Compensation | Share-Based Compensation Share-based compensation expense resulting from options, restricted stock units (“RSUs”), performance-based awards, and employee stock purchase plan (“ESPP”) rights granted is measured as the grant date fair value of the award and is generally recognized using the straight-line attribution method over the requisite service period of the award, which is generally the vesting period. The Company estimates the fair value of stock options, ESPP rights, and performance-based awards using the Black-Scholes-Merton option-pricing model. The Company estimates the fair value of RSUs as the closing market value of its Class A Common Stock on the grant date. For awards with performance-based and service-based conditions, compensation cost is recognized over the requisite service period if it is probable that the performance condition will be satisfied. The expense for performance-based awards is evaluated each quarter based on the achievement of the performance conditions. The effect of a change in the estimated number of performance-based awards expected to be earned is recognized in the period those estimates are revised. Compensation expense is recognized net of estimated forfeiture activity, which is based on historical forfeiture rates. |
Research and Development | Research and Development Research and development expenses consist primarily of third-party contractor costs, personnel costs, technology license expenses, and depreciation associated with research and development equipment. Research and development costs are expensed as incurred. |
Advertising Costs | Advertising Costs |
Convertible Debt | Convertible Debt The Company bifurcates the debt and equity (the contingently convertible feature) components of its convertible debt instruments in a manner that reflects its nonconvertible debt borrowing rate at the time of issuance. The equity components of the convertible debt instruments are recorded within stockholders’ equity with an allocated issuance discount. The debt issuance discount is amortized to interest expense in the Consolidated Statement of Operations using the effective interest method over the expected term of the convertible debt. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company records a valuation allowance to reduce its deferred tax assets to the amount of future tax benefit that is more likely than not to be realized. As of December 31, 2019 , except for deferred tax assets associated with its subsidiary in China, the Company recorded a full valuation allowance against all other net deferred tax assets due to its history of operating losses. The Company classifies interest and penalties on unrecognized tax benefits as income tax expense. |
Segment Information | Segment Information The Company has determined the chief executive officer is the chief operating decision maker. The Company’s chief executive officer reviews financial information presented on a consolidated basis for purposes of assessing performance and making decisions on how to allocate resources. Accordingly, the Company has determined that it operates in a single reportable segment. |
Indemnification | Indemnification Certain of the Company’s agreements with resellers and customers include provisions for indemnification against liabilities if its subscriptions infringe upon a third-party’s intellectual property rights. At least quarterly, the Company assesses the status of any significant matters and its potential financial statement exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount or the range of loss can be estimated, the Company accrues a liability for the estimated loss. The Company has not incurred any material costs as a result of such indemnification provisions. The Company has not accrued any material liabilities related to such obligations as of December 31, 2019 and 2018 . |
Recent Accounting Pronouncements Not Yet Adopted and Impact of Recently Adopted Accounting Pronouncements | Recent Accounting Pronouncements Not Yet Adopted In June 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurements, which expands the disclosure requirements for Level 3 fair value measurements and expands disclosures for entities that calculate net assets value. This new standard is effective for the Company's interim and annual reporting periods beginning January 1, 2020, and early adoption permitted. The adoption of this amendment is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which modifies the measurement of expected credit losses on certain financial instruments. This new standard is effective for the Company's interim and annual reporting periods beginning January 1, 2020, and earlier adoption is permitted. The adoption of this amendment is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. In December 2019, the FASB issued ASU No. 2019-12, Accounting Standards Update (Topic 740): Simplifying the Accounting for Income Taxes. The ASU removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group. The ASU is effective for calendar year-end public entities on January 1, 2021. Entities may early adopt the ASU in any interim period for which financial statements have not yet been issued (or made available for issuance). The Company has not yet adopted the new guidance and is currently analyzing the tax impact, but does not anticipate any material impacts upon adoption. On January 1, 2019, the Company adopted Topic 842 , which requires recognition of ROU assets and lease liabilities for most leases on the Company’s Consolidated Balance Sheet. The Company adopted Topic 842 using a modified retrospective transition approach as of the effective date as permitted by the amendments in ASU 2018-11. As a result, the Company was not required to adjust its comparative periods' financial information for effects of the standard or make the new required lease disclosures for the periods before the date of adoption (i.e., January 1, 2019). The Company elected the package of practical expedients which allowed the Company not to reassess (1) whether existing or expired contracts, as of the adoption date, contain leases, (2) the lease classification for existing leases, and (3) whether existing initial direct costs meet the new definition. The Company also elected the practical expedient to not separate lease and non-lease components for its facility leases, and to not recognize ROU assets and liabilities for short-term leases. The standard had an impact on the Company’s Consolidated Balance Sheet but did not have a significant impact on its Consolidated Statement of Operations or Cash Flows. The impact on the Company's Consolidated Balance Sheet was the recognition of ROU assets and lease liabilities for operating leases. The adoption of this new standard at January 1, 2019, resulted in the following changes: • assets increased by $33.5 million , representing the recognition of ROU assets; and • liabilities increased by $33.5 million , primarily representing the recognition of lease liabilities. |
Fair Value Measurement Policy | The Company measures and reports certain cash equivalents, including money market funds and certificates of deposit, in addition to its long-term investments at fair value in accordance with the provisions of the authoritative accounting guidance that addresses fair value measurements. This guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: Level 1: Observable inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Other inputs, such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3: Unobservable inputs that are supported by little or no market activity and that are based on management’s assumptions, including fair value measurements determined by using pricing models, discounted cash flow methodologies or similar techniques. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Changes in Allowance for Doubtful Accounts | Below is a summary of the changes in allowance for doubtful accounts for the years ended December 31, 2019 , 2018 and 2017 (in thousands): Balance at beginning of year Provision, net of recoveries Write-offs Balance at end of year Year ended December 31, 2019 Allowance for doubtful accounts $ 2,506 $ 2,949 $ 3,097 $ 2,358 Year ended December 31, 2018 Allowance for doubtful accounts $ 712 $ 3,091 $ 1,297 $ 2,506 Year ended December 31, 2017 Allowance for doubtful accounts $ 434 $ 1,674 $ 1,396 $ 712 |
Estimated Useful Lives of Assets | Property and equipment, net is stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Computer hardware and software 3 to 5 years Internal-use software development costs 3 to 5 years Furniture and fixtures 1 to 5 years Leasehold improvements Shorter of the estimated lease term or useful life |
Revenues and Cost of Revenue Re
Revenues and Cost of Revenue Revenues and Cost of Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue by Geographical Markets | The following table provides information about disaggregated revenue by primary geographical markets: Year ended December 31, 2019 2018 2017 Primary geographical markets North America 93 % 95 % 96 % Others 7 % 5 % 4 % Total revenues 100 % 100 % 100 % |
Financial Statement Components
Financial Statement Components (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Statement of Financial Position [Abstract] | |
Components of Cash and Cash Equivalents | Cash and cash equivalents consisted of the following (in thousands): December 31, December 31, Cash $ 46,295 $ 80,457 Money market funds 297,311 485,872 Total cash and cash equivalents $ 343,606 $ 566,329 |
Components of Accounts Receivable, Net | Accounts receivable, net consisted of the following (in thousands): December 31, December 31, Accounts receivable $ 114,745 $ 82,740 Unbilled accounts receivable 17,603 14,141 Allowance for doubtful accounts (2,358 ) (2,506 ) Accounts receivable, net $ 129,990 $ 94,375 |
Components of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): December 31, December 31, Prepaid expenses $ 16,249 $ 14,805 Inventory 401 199 Other current assets 8,704 8,768 Total prepaid expenses and other current assets $ 25,354 $ 23,772 |
Components of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): December 31, December 31, Computer hardware and software $ 120,841 $ 103,766 Internal-use software development costs 48,419 29,886 Furniture and fixtures 7,690 5,896 Leasehold improvements 11,327 6,863 Property and equipment, gross 188,277 146,411 Less: accumulated depreciation and amortization (99,047 ) (76,206 ) Property and equipment, net $ 89,230 $ 70,205 |
Components of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): December 31, December 31, Accrued compensation and benefits $ 30,541 $ 20,932 Accrued sales, use, and telecom related taxes 25,757 19,609 Accrued marketing 17,505 12,291 Operating lease liabilities, short-term 14,249 — Other accrued expenses 50,677 47,855 Total accrued liabilities $ 138,729 $ 100,687 |
Summary of Carrying Value of Goodwill | The carrying value of goodwill is as follows (in thousands): December 31, Balance at December 31, 2018 $ 31,238 Connect First acquisition 24,465 Foreign currency translation adjustments (425 ) Balance at December 31, 2019 $ 55,278 |
Summary of Carrying Values of Intangible Assets | The carrying values of intangible assets are as follows (in thousands): December 31, 2019 December 31, 2018 Estimated Lives Cost Accumulated Amortization Acquired Intangibles, Net Cost Accumulated Amortization Acquired Intangibles, Net Customer relationships 2 to 5 years $ 21,245 $ 8,178 $ 13,067 $ 20,121 $ 4,460 $ 15,661 Developed technology 3 to 5 years 123,547 9,276 114,271 6,098 2,279 3,819 Total acquired intangible assets $ 144,792 $ 17,454 $ 127,338 $ 26,219 $ 6,739 $ 19,480 |
Summary of Estimated Amortization Expense for Acquired Intangible Assets | Estimated amortization expense for acquired intangible assets for the following five fiscal years and thereafter is as follows (in thousands): 2020 $ 34,274 2021 34,016 2022 28,416 2023 16,477 2024 and thereafter 14,155 Total estimated amortization expense $ 127,338 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Assets Carried at Fair Value | The financial assets carried at fair value were determined using the following inputs (in thousands): Fair Value at December 31, 2019 Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 297,311 $ 297,311 $ — $ — Noncurrent assets: Long-term investments 132,188 — — 132,188 Fair Value at December 31, 2018 Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 485,872 $ 485,872 $ — $ — Noncurrent assets: Long-term investments — — — — |
Business Combinations, Strate_2
Business Combinations, Strategic Partnerships, and Asset Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Allocation of Purchase Price of Assets Acquired and Liabilities Assumed | The allocation of the purchase price of the assets acquired and liabilities assumed based on their estimated fair values was as follows (in thousands): Cash and cash equivalents $ 1,427 Other tangible assets acquired 2,266 Acquired intangible assets 13,300 Goodwill 24,465 Total assets acquired 41,458 Liabilities assumed (5,013 ) Total consideration $ 36,445 The allocation of the purchase price of the assets acquired and liabilities assumed based on their estimated fair values was as follows (in thousands): Cash and cash equivalents $ 4,225 Other tangible assets acquired 3,289 Acquired intangible assets 12,208 Goodwill 21,995 Total assets acquired 41,717 Liabilities assumed (5,646 ) Total consideration $ 36,071 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Net Carrying Amount of Liability Component of Convertible Notes | The net carrying amount of the liability component of the Notes was as follows (in thousands): December 31, 2019 Principal $ 460,000 Unamortized discount (67,350 ) Unamortized issuance cost (5,761 ) Net carrying amount $ 386,889 |
Schedule of Equity Component of Convertible Debt | The net carrying amount of the equity component of the Notes was as follows (in thousands): December 31, 2019 Proceeds allocated to the conversion option (debt discount) $ 101,141 Issuance cost (2,318 ) Net carrying amount $ 98,823 |
Schedule of Interest Expense Recognized Related to Notes | The following table sets forth the interest expense recognized related to the Notes (in thousands): Year ended December 31, 2019 2018 2017 Amortization of debt discount $ 18,920 $ 14,872 $ — Amortization of debt issuance cost 1,417 1,046 — Total interest expense related to the Notes $ 20,337 $ 15,918 $ — |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Components of Leases | As of December 31, 2019 , the components of leases and lease costs are as follows (in thousands): December 31, 2019 Operating leases Operating lease right-of-use assets $ 39,269 Accrued liabilities $ 14,249 Operating lease liabilities 28,516 Total operating lease liabilities $ 42,765 |
Lease Cost | Other supplemental information as of December 31, 2019 is as follows (in thousand): December 31, 2019 Lease Term and Discount Rate Weighted-average remaining operating lease term (years) 4.2 Weighted-average operating lease discount rate 5 % Year ended December 31, 2019 Supplemental Cash Flow Information Operating cash flows resulting from operating leases: Cash paid for amounts included in the measurement of lease liabilities $ 15,709 New ROU assets obtained in exchange of lease liabilities: Operating leases $ 18,584 Year ended December 31, 2019 2018 Lease Cost Operating lease cost (a) $ 17,584 $ — (a) Includes short-term leases and variable lease costs, which are immaterial. |
Schedule of Future Operating Lease Maturities | Maturities of operating lease liabilities as of December 31, 2019 are presented in the table below (in thousands): Year Ending December 31, 2020 $ 16,164 2021 12,162 2022 7,650 2023 5,197 2024 1,354 2025 onwards 5,883 Total future minimum lease payments 48,410 Less: Imputed interest (5,645 ) Present value of lease liabilities $ 42,765 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of Common Stock Reserved for Future Issuance | Shares of Class A common stock reserved for future issuance were as follows (in thousands): December 31, 2019 Preferred stock 100,000 Class B common stock 11,039 2013 Employee stock purchase plan 3,919 2013 Equity incentive plan: Outstanding options and restricted stock unit awards 5,505 Available for future grants 15,529 135,992 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Share-Based Compensation Expense Recognized to Statements of Operations | A summary of share-based compensation expense recognized in the Company’s Consolidated Statements of Operations is as follows (in thousands): Year ended December 31, 2019 2018 2017 Cost of revenues $ 8,741 $ 4,982 $ 3,735 Research and development 23,132 14,975 9,550 Sales and marketing 38,325 27,324 16,015 General and administrative 31,156 20,807 12,760 Total share-based compensation expense $ 101,354 $ 68,088 $ 42,060 |
Summary of Share-Based Compensation Expense by Award Type | A summary of share-based compensation expense by award type is as follows (in thousands): Year ended December 31, 2019 2018 2017 Options $ 986 $ 3,433 $ 6,803 Employee stock purchase plan rights 4,176 3,094 2,177 Restricted stock units 96,192 61,561 33,080 Total share-based compensation expense $ 101,354 $ 68,088 $ 42,060 |
Summary of Stock Option Activity Plans | A summary of option activity under all of the Company’s equity incentive plans at December 31, 2019 and changes during the period then ended is presented in the following table: Number of Options Outstanding (in thousands) Weighted- Average Exercise Price Per Share Weighted- Average Contractual Term (in Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2016 7,384 $ 10.59 5.3 $ 74,065 Granted 25 23.99 Exercised (1,722 ) 10.39 Canceled/Forfeited (401 ) 16.04 Outstanding at December 31, 2017 5,286 $ 10.30 4.2 $ 201,480 Granted — — Exercised (1,138 ) 8.17 Canceled/Forfeited (17 ) 18.79 Outstanding at December 31, 2018 4,131 $ 10.86 3.3 $ 295,921 Granted — — Exercised (1,742 ) 8.53 Canceled/Forfeited (132 ) 2.73 Outstanding at December 31, 2019 2,257 $ 13.13 2.5 $ 351,428 Vested and expected to vest as of December 31, 2019 2,259 $ 13.13 2.5 $ 351,362 Excercisable as of December 31, 2019 2,243 $ 13.10 2.5 $ 349,002 |
Weighted Average Assumptions Used to Fair Value of Stock Options Granted | The weighted-average assumptions used in the option-pricing model and the resulting grant date fair value of stock options granted in 2017 were as follows: Year Ended December 31, 2017 Expected term for employees (in years) 4.4 Expected term for non-employees (in years) 4.6 Expected volatility 44 % Risk-free interest rate 1.78 % Expected dividend yield 0 % Grant date fair value of employee options $ 9.08 |
Summary of Assumptions Used to Value ESPP Rights Under the Black-Scholes Option-Pricing Model | The weighted-average assumptions used to value ESPP rights under the Black-Scholes-Merton option-pricing model and the resulting offering grant date fair value of ESPP rights granted in the periods presented were as follows: Year ended December 31, 2019 2018 2017 Expected term (in years) 0.5 0.5 0.5 Expected volatility 47 % 42 % 34 % Risk-free interest rate 2.01 % 2.31 % 1.20 % Expected dividend yield 0 % 0 % 0 % Offering grant date fair value of ESPP rights $ 33.66 $ 18.07 $ 9.52 |
Summary of RSUs Activity | The 2013 Plan provides for the issuance of RSUs to employees, directors, and consultants. RSUs issued under the 2013 Plan generally vest over four years . A summary of activity of RSUs under the 2013 Plan at December 31, 2019 and changes during the periods then ended is presented in the following table: Number of RSUs Outstanding (in thousands) Weighted- Average Grant Date Fair Value Per Share Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2016 3,554 $ 18.01 $ 73,261 Granted 3,005 30.20 Released (1,680 ) 19.54 Canceled/Forfeited (598 ) 20.91 Outstanding at December 31, 2017 4,281 $ 25.51 $ 207,197 Granted 1,746 67.64 Released (1,971 ) 30.50 Canceled/Forfeited (495 ) 34.99 Outstanding at December 31, 2018 3,561 $ 42.09 $ 293,523 Granted 2,069 122.35 Released (1,906 ) 50.99 Canceled/Forfeited (475 ) 60.38 Outstanding at December 31, 2019 3,249 $ 85.39 $ 548,145 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of Net Loss Before Provision for (Benefit from) Income Taxes | Net loss before provision for (benefit from) income taxes consisted of the following (in thousands): Year ended December 31, 2019 2018 2017 United States $ (64,822 ) $ (29,584 ) $ (5,883 ) International 7,882 3,521 1,937 Total net loss before provision for (benefit from) income taxes $ (56,940 ) $ (26,063 ) $ (3,946 ) |
Summary of Provision for (Benefit from) Income Taxes | The provision for (benefit from) income taxes consisted of the following (in thousands): Year ended December 31, 2019 2018 2017 Current Federal $ — $ — $ — State 150 61 49 Foreign 464 382 256 Total current $ 614 $ 443 $ 305 Deferred Federal $ (2,765 ) $ — $ — State (445 ) — — Foreign (737 ) (303 ) (47 ) Total deferred (3,947 ) (303 ) (47 ) Total income tax provision $ (3,333 ) $ 140 $ 258 |
Summary of Variation of Effective Provision for (Benefit from) Income Taxes from Statutory Federal Income Tax Rate | The provision for (benefit from) income tax differed from the amounts computed by applying the U.S. federal income tax rate to pretax loss as a result of the following (in thousands): Year ended December 31, 2019 2018 2017 Federal tax benefit at statutory rate $ (11,957 ) $ (5,473 ) $ (1,341 ) State tax, net of federal tax benefit (233 ) 48 32 Research and development credits (5,312 ) (3,284 ) (707 ) Share-based compensation (58,780 ) (25,170 ) (18,154 ) Other permanent differences 3,149 1,325 814 Change in U.S. federal Tax Rate — — 33,254 Foreign tax rate differential (799 ) (288 ) (445 ) Net operating (gains) losses not recognized 73,364 32,982 (13,195 ) Release of valuation allowance associated with acquisitions (2,765 ) — — Total income tax provision $ (3,333 ) $ 140 $ 258 |
Schedule of Deferred Income Tax Assets and Liabilities | The types of temporary differences that give rise to significant portions of the Company’s deferred tax assets and liabilities are as follows (in thousands): Year ended December 31, 2019 2018 Deferred tax assets Net operating loss and credit carry-forwards $ 196,930 $ 109,812 Research and development credits 24,452 16,380 Sales tax liability 157 258 Share-based compensation 5,937 5,435 Accrued liabilities 6,612 5,135 Gross deferred tax assets 234,088 137,020 Valuation allowance (180,090 ) (94,118 ) Total deferred tax assets 53,998 42,902 Deferred tax liabilities Convertible debt discount (16,701 ) (21,035 ) Deferred sales commissions (28,601 ) (18,253 ) Acquired intangibles (3,857 ) (2,670 ) Property and equipment (6,731 ) (3,573 ) Net deferred tax (liabilities) assets $ (1,892 ) $ (2,629 ) |
Summary of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | The following shows the changes in the gross amount of unrecognized tax benefits as of December 31, 2019 (in thousands): 2019 2018 2017 Unrecognized tax benefits, beginning of the year $ 6,029 $ 3,004 $ 2,460 Increases related to prior year tax positions — 1,050 — Decreases related to prior year tax positions (48 ) — (3 ) Increases related to current year tax positions 2,984 1,975 547 Unrecognized tax benefits, end of year $ 8,965 $ 6,029 $ 3,004 |
Basic and Diluted Net Loss Pe_2
Basic and Diluted Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Company's Basic and Diluted Net Loss Per Share of Common Stock | The following table sets forth the computation of the Company’s basic and diluted net loss per share during the years ended December 31, 2019 , 2018 and 2017 (in thousands, except per share data): Year Ended December 31, 2019 2018 2017 Numerator Net loss $ (53,607 ) $ (26,203 ) $ (4,204 ) Denominator Weighted-average common shares for basic and diluted net loss per share 83,130 79,500 76,281 Basic and diluted net loss per share $ (0.64 ) $ (0.33 ) $ (0.06 ) |
Potential Shares of Common Stock Excluded from Diluted Weighted-Average Common Shares Outstanding | The following table summarizes the potentially dilutive common shares that were excluded from diluted weighted-average common shares outstanding because including them would have had an anti-dilutive effect (in thousands): Year Ended December 31, 2019 2018 2017 Shares of common stock issuable under equity incentive plans outstanding 6,832 8,943 10,806 Convertible senior notes 1,905 79 — Potential common shares excluded from diluted net loss per share 8,737 9,022 10,806 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Unaudited Quarterly Consolidated Statements of Operations Data | The following tables set forth selected unaudited quarterly consolidated statements of operations data for each of the eight quarters in the years ended December 31, 2019 and 2018 (in thousands except per share data): Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018 Consolidated Statements of Operations Data Revenues $ 252,865 $ 233,352 $ 215,152 $ 201,489 $ 188,624 $ 173,825 $ 160,832 $ 150,343 Gross profit 185,992 173,647 161,522 150,654 144,509 134,551 122,766 114,669 Operating loss (20,369 ) (10,663 ) (7,180 ) (7,463 ) (3,404 ) (7,027 ) (4,654 ) (1,351 ) Net loss (25,257 ) (12,749 ) (9,243 ) (6,358 ) (5,678 ) (9,518 ) (8,291 ) (2,716 ) Net loss per share, basic and diluted $ (0.30 ) $ (0.15 ) $ (0.11 ) $ (0.08 ) $ (0.07 ) $ (0.12 ) $ (0.10 ) $ (0.03 ) |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies - Changes in Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of year | $ 2,506 | $ 712 | $ 434 |
Provision, net of recoveries | 2,949 | 3,091 | 1,674 |
Write-offs | 3,097 | 1,297 | 1,396 |
Balance at end of year | $ 2,358 | $ 2,506 | $ 712 |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)Customer | |
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Software development cost, net of impairment | $ 18.5 | $ 11.7 | |
Capitalized Computer Software, Net | 35.6 | 22.2 | |
Advertising expense | $ 59.9 | $ 58.3 | $ 42.4 |
Number of reportable segment | Segment | 1 | ||
Accounting Standards Update 2014-09 | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Deferred contract costs, expected amortization period of benefit | 5 years | ||
Minimum | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Estimated lives | 2 years | ||
Contractual arrangement subscriptions period | 1 month | ||
Subscription contracts services termination period | 30 days | ||
Maximum | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Estimated lives | 5 years | ||
Contractual arrangement subscriptions period | 5 years | ||
Subscription contracts services termination period | 60 days | ||
Accounts receivable | Customer concentration risk | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, number of major customers | Customer | 1 | ||
Revenues | Customer concentration risk | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 11.00% | ||
Software subscription revenues | Customer concentration risk | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 12.00% |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Policies - Estimated Useful Lives of Assets (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Computer hardware and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Computer hardware and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Internal-use software development costs | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Internal-use software development costs | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 1 year |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Description of Business and S_7
Description of Business and Summary of Significant Accounting Policies - Disaggregated of Revenue by Primary Geographical Market, Major Product Lines and Timing of Revenue Recognition (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Total revenues | 100.00% | 100.00% | 100.00% |
North America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 93.00% | 95.00% | 96.00% |
Others | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 7.00% | 5.00% | 4.00% |
Impact of Recently Adopted Ac_2
Impact of Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use-assets | $ 39,269 | |
Operating lease, lease liabilities | $ 42,765 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use-assets | $ 33,500 | |
Operating lease, lease liabilities | $ 33,500 |
Revenues and Cost of Revenue -
Revenues and Cost of Revenue - Summary of Revenue by Geographical Markets (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Percentage of revenue (as a percent) | 100.00% | 100.00% | 100.00% |
North America | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenue (as a percent) | 93.00% | 95.00% | 96.00% |
Others | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenue (as a percent) | 7.00% | 5.00% | 4.00% |
Revenues and Cost of Revenue _2
Revenues and Cost of Revenue - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Percentage of subscriptions (as a percentage) | 90.00% | 88.00% | 84.00% | ||||||||
Revenue recognized, previously included in deferred revenue | $ 88,300 | ||||||||||
Revenue, remaining performance obligation, amount | $ 900,000 | $ 900,000 | |||||||||
Percentage of revenue recognized on remaining performance obligation in next twelve months | 55.00% | 55.00% | |||||||||
Percentage of revenue recognized on remaining performance obligation, after next twelve months | 45.00% | 45.00% | |||||||||
Total revenue | $ 252,865 | $ 233,352 | $ 215,152 | $ 201,489 | $ 188,624 | $ 173,825 | $ 160,832 | $ 150,343 | $ 902,858 | $ 673,624 | $ 503,617 |
Total cost of revenue | 231,043 | 157,129 | 121,271 | ||||||||
Product | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 42,900 | 34,400 | 26,000 | ||||||||
Total cost of revenue | $ 40,000 | $ 30,900 | $ 25,000 | ||||||||
Minimum | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Subscription term | 1 month | ||||||||||
Maximum | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Subscription term | 5 years |
Financial Statement Component_2
Financial Statement Components - Components of Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Cash | $ 46,295 | $ 80,457 |
Money market funds | 297,311 | 485,872 |
Total cash and cash equivalents | $ 343,606 | $ 566,329 |
Financial Statement Component_3
Financial Statement Components - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Restricted cash | $ 0 | $ 0 | $ 0 |
Depreciation and amortization | 27,200,000 | 18,900,000 | 15,400,000 |
Amortization expense of intangible assets | 10,700,000 | 4,400,000 | 800,000 |
Amortization of deferred sales commission costs | 30,134,000 | 19,754,000 | 12,623,000 |
Impairment loss in relation to costs capitalized | $ 0 | $ 0 | $ 0 |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average amortization periods | 2 years 9 months 18 days | ||
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average amortization periods | 3 years 10 months 24 days |
Financial Statement Component_4
Financial Statement Components - Components of Accounts Receivable, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||||
Accounts receivable | $ 114,745 | $ 82,740 | ||
Unbilled accounts receivable | 17,603 | 14,141 | ||
Allowance for doubtful accounts | (2,358) | (2,506) | $ (712) | $ (434) |
Accounts receivable, net | $ 129,990 | $ 94,375 |
Financial Statement Component_5
Financial Statement Components - Components of Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Prepaid expenses | $ 16,249 | $ 14,805 |
Inventory | 401 | 199 |
Other current assets | 8,704 | 8,768 |
Total prepaid expenses and other current assets | $ 25,354 | $ 23,772 |
Financial Statement Component_6
Financial Statement Components - Components of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 188,277 | $ 146,411 |
Less: accumulated depreciation and amortization | (99,047) | (76,206) |
Property and equipment, net | 89,230 | 70,205 |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 120,841 | 103,766 |
Internal-use software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 48,419 | 29,886 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,690 | 5,896 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 11,327 | $ 6,863 |
Financial Statement Component_7
Financial Statement Components - Summary of Carrying Value of Goodwill (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, Beginning balance | $ 31,238 |
Foreign currency translation adjustments | (425) |
Goodwill, Ending balance | 55,278 |
Connect First | |
Goodwill [Roll Forward] | |
Connect First acquisition | $ 24,465 |
Financial Statement Component_8
Financial Statement Components - Summary of Carrying Values of Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 144,792 | $ 26,219 |
Accumulated Amortization | 17,454 | 6,739 |
Total estimated amortization expense | $ 127,338 | 19,480 |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated lives | 2 years | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated lives | 5 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated lives | 5 years | |
Cost | $ 21,245 | 20,121 |
Accumulated Amortization | 8,178 | 4,460 |
Total estimated amortization expense | $ 13,067 | 15,661 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated lives | 2 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated lives | 5 years | |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 123,547 | 6,098 |
Accumulated Amortization | 9,276 | 2,279 |
Total estimated amortization expense | $ 114,271 | $ 3,819 |
Developed technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated lives | 3 years | |
Developed technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated lives | 5 years |
Financial Statement Component_9
Financial Statement Components - Summary of Estimated Amortization Expense for Acquired Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
2020 | $ 34,274 | |
2021 | 34,016 | |
2022 | 28,416 | |
2023 | 16,477 | |
2024 and thereafter | 14,155 | |
Total estimated amortization expense | $ 127,338 | $ 19,480 |
Financial Statement Componen_10
Financial Statement Components - Components of Accrued Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accrued compensation and benefits | $ 30,541 | $ 20,932 |
Accrued sales, use, and telecom related taxes | 25,757 | 19,609 |
Accrued marketing | 17,505 | 12,291 |
Operating lease liabilities, short-term | 14,249 | 0 |
Other accrued expenses | 50,677 | 47,855 |
Total accrued liabilities | $ 138,729 | $ 100,687 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial Assets Carried at Fair Value (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Noncurrent assets: | ||
Long-term investments | $ 132,188 | $ 0 |
(Level 1) | ||
Noncurrent assets: | ||
Long-term investments | 0 | 0 |
Level 2 | ||
Noncurrent assets: | ||
Long-term investments | 0 | 0 |
Level 3 | ||
Noncurrent assets: | ||
Long-term investments | 132,188 | 0 |
Money Market Funds | ||
Cash equivalents: | ||
Money market funds | 297,311 | 485,872 |
Money Market Funds | (Level 1) | ||
Cash equivalents: | ||
Money market funds | 297,311 | 485,872 |
Money Market Funds | Level 2 | ||
Cash equivalents: | ||
Money market funds | 0 | 0 |
Money Market Funds | Level 3 | ||
Cash equivalents: | ||
Money market funds | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Unrealized gain (loss) on investments | $ 6,600 | ||
Long-term investments | 132,188 | $ 0 | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term investments | $ 0 | $ 0 | |
Convertible Senior Notes Due 2023 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument, interest rate | 0.00% | ||
Convertible Senior Notes Due 2023 | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument, interest rate | 0.00% | ||
Estimated fair value of convertible senior notes | $ 929,200 |
Business Combinations, Strate_3
Business Combinations, Strategic Partnerships, and Asset Acquisitions - Additional Information (Detail) | Jan. 14, 2019USD ($) | Oct. 22, 2018USD ($) | Jan. 16, 2018USD ($) | Oct. 31, 2019USD ($)$ / shares | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | |||||||
Goodwill recorded in connection with transaction | $ 55,278,000 | $ 55,278,000 | $ 31,238,000 | ||||
Long-term investments | 132,188,000 | 132,188,000 | $ 0 | ||||
Finite-lived intangible assets acquired | 105,500,000 | ||||||
Deferred and prepaid sales commission costs, non-current | 371,100,000 | $ 371,100,000 | |||||
Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Estimated lives | 5 years | ||||||
Weighted average amortization periods | 5 years | ||||||
Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Estimated lives | 2 years | ||||||
Weighted average amortization periods | 3 years | ||||||
Connect First, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Total purchase price | $ 36,400,000 | ||||||
Cash payments | 29,300,000 | ||||||
Contingent consideration | $ 7,100,000 | ||||||
Estimated lives | 3 years | ||||||
Goodwill recorded in connection with transaction | $ 24,465,000 | ||||||
Amount of goodwill expected to be tax deductible | 0 | ||||||
Acquired intangible assets | 13,300,000 | ||||||
Dimelo | |||||||
Business Acquisition [Line Items] | |||||||
Total purchase price | $ 36,100,000 | ||||||
Cash payments | 30,700,000 | ||||||
Contingent consideration | 5,400,000 | ||||||
Goodwill recorded in connection with transaction | 21,995,000 | ||||||
Acquired intangible assets | 12,208,000 | ||||||
Settlement | 7,000,000 | ||||||
Dimelo | Restricted Stock Units | |||||||
Business Acquisition [Line Items] | |||||||
Consideration, restricted stock unit | $ 3,300,000 | ||||||
Consideration, restricted stock unit, vesting period | 4 years | ||||||
Dimelo | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Estimated lives | 5 years | ||||||
Restricted Stock | Connect First, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Consideration, restricted stock unit | $ 4,000,000 | ||||||
Consideration, restricted stock unit, vesting period | 4 years | ||||||
Avaya | |||||||
Business Acquisition [Line Items] | |||||||
Long-term investments | $ 125,000,000 | ||||||
Convertible preferred stock, conversion price (in USD per share) | $ / shares | $ 16 | ||||||
Percentage of voting interests acquired upon conversion (as a percentage) | 6.00% | ||||||
Advance of future commissions to be received | $ 345,000,000 | ||||||
Avaya | Avaya | |||||||
Business Acquisition [Line Items] | |||||||
Convertible preferred stock, dividend percentage | 0.03 | ||||||
RingCentral Office@Hand solution | |||||||
Business Acquisition [Line Items] | |||||||
Total purchase price | $ 24,000,000 | ||||||
Cash payments | $ 20,000,000 | ||||||
Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Estimated lives | 5 years | ||||||
Acquired intangible assets | $ 10,000,000 | $ 10,000,000 | |||||
Weighted average amortization periods | 2 years 9 months 18 days | ||||||
Customer relationships | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Estimated lives | 5 years | ||||||
Customer relationships | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Estimated lives | 2 years |
Business Combinations, Strate_4
Business Combinations, Strategic Partnerships, and Asset Acquisitions - Schedule of Preliminary Allocation of Purchase Price of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 14, 2019 | Dec. 31, 2018 | Oct. 22, 2018 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 55,278 | $ 31,238 | ||
Connect First, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 1,427 | |||
Other tangible assets acquired | 2,266 | |||
Acquired intangible assets | 13,300 | |||
Goodwill | 24,465 | |||
Total assets acquired | 41,458 | |||
Liabilities assumed | (5,013) | |||
Total consideration | $ 36,445 | |||
Dimelo | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 4,225 | |||
Other tangible assets acquired | 3,289 | |||
Acquired intangible assets | 12,208 | |||
Goodwill | 21,995 | |||
Total assets acquired | 41,717 | |||
Liabilities assumed | (5,646) | |||
Total consideration | $ 36,071 |
Convertible Senior Notes - Addi
Convertible Senior Notes - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||||
Principal | $ 460,000,000 | |||
Proceeds from issuance debt, net of discounts and issuance costs | 0 | $ 449,457,000 | $ 0 | |
Carrying amount of equity component representing conversion option | 101,141,000 | |||
Net cost incurred in connection with transaction | $ 0 | $ 49,910,000 | $ 0 | |
Class A common stock | ||||
Debt Instrument [Line Items] | ||||
Stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Convertible Senior Notes Due 2023 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate | 0.00% | |||
Proceeds from issuance debt, net of discounts and issuance costs | $ 449,500,000 | |||
Conversion price per share (in dollars per share) | $ 81.45 | |||
Debt redemption price percentage | 100.00% | 100.00% | ||
Carrying amount of equity component representing conversion option | $ 101,100,000 | |||
Convertible Senior Notes Due 2023 | Capped call | ||||
Debt Instrument [Line Items] | ||||
Conversion price per share (in dollars per share) | $ 119.035 | |||
Initial strike price (in dollars per share) | $ 81.45 | |||
Net cost incurred in connection with transaction | $ 49,900,000 | |||
Convertible Senior Notes Due 2023 | Class A common stock | ||||
Debt Instrument [Line Items] | ||||
Debt conversion, converted instrument, shares issued (in shares) | 0.0122782 | |||
Stock par value (in dollars per share) | $ 0.0001 | |||
Conversion price per share (in dollars per share) | $ 81.45 | |||
Convertible Senior Notes Due 2023 | Class A common stock | Capped call | ||||
Debt Instrument [Line Items] | ||||
Option indexed to issuer's equity, shares (in shares) | 5,600,000 | |||
Convertible Senior Notes Due 2023 | Private Placement | ||||
Debt Instrument [Line Items] | ||||
Principal | $ 460,000,000 |
Convertible Senior Notes - Summ
Convertible Senior Notes - Summary of Net Carrying Amount of Liability Component of Notes (Detail) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Principal | $ 460,000,000 | |
Unamortized discount | (67,350,000) | |
Unamortized issuance cost | (5,761,000) | |
Net carrying amount | $ 386,889,000 | $ 366,552,000 |
Convertible Senior Notes - Su_2
Convertible Senior Notes - Summary of Net Carrying Amount of Equity Component of Notes (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |
Proceeds allocated to the conversion option (debt discount) | $ 101,141 |
Issuance cost | (2,318) |
Net carrying amount | 98,823 |
Convertible Senior Notes Due 2023 | |
Debt Instrument [Line Items] | |
Proceeds allocated to the conversion option (debt discount) | $ 101,100 |
Convertible Senior Notes - Sche
Convertible Senior Notes - Schedule of Interest Expense Recognized Related to Notes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Total interest expense related to the Notes | $ 20,512 | $ 16,102 | $ 99 |
Convertible Senior Notes Due 2023 | |||
Debt Instrument [Line Items] | |||
Amortization of debt discount | 18,920 | 14,872 | 0 |
Amortization of debt issuance cost | 1,417 | 1,046 | 0 |
Total interest expense related to the Notes | $ 20,337 | $ 15,918 | $ 0 |
Leases - Components of Leases a
Leases - Components of Leases and Lease Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Operating leases | ||
Operating lease right-of-use assets | $ 39,269 | |
Accrued liabilities | 14,249 | $ 0 |
Operating lease liabilities | 28,516 | |
Total operating lease liabilities | $ 42,765 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease renewal term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease renewal term | 5 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | |||
Operating lease cost | $ 17,584 | $ 0 | |
Rent expense | $ 6,900 | $ 5,500 |
Leases - Schedule of Future Lea
Leases - Schedule of Future Lease Maturities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Maturity of Lease Liabilities | |
2020 | $ 16,164 |
2021 | 12,162 |
2022 | 7,650 |
2023 | 5,197 |
2024 | 1,354 |
2025 onwards | 5,883 |
Total future minimum lease payments | 48,410 |
Less: Imputed interest | (5,645) |
Present value of lease liabilities | $ 42,765 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Dec. 31, 2019 |
Leases [Abstract] | |
Weighted-average remaining operating lease term (years) | 4 years 2 months 12 days |
Weighted-average operating lease discount rate (percentage) | 5.00% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities | $ 15,709 |
New ROU assets obtained in exchange of lease liabilities: | $ 18,584 |
Leases - Leases not yet Commenc
Leases - Leases not yet Commenced (Details) $ in Millions | Dec. 31, 2019USD ($) |
Lessee, Lease, Description [Line Items] | |
Operating lease not yet commenced, amount | $ 2 |
Operating lease not yet commenced, lease terms (in years) | 3 years |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Aug. 26, 2019USD ($) | Jun. 14, 2019defendent |
RingCentral Suit Against Bright Pattern, Inc. And Officers | ||
Loss Contingencies [Line Items] | ||
Number of defendants | defendent | 2 | |
Bright Pattern, Inc. Cross Complaint Against RingCentral | ||
Loss Contingencies [Line Items] | ||
Break up fee | $ | $ 5 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2019vote$ / sharesshares | Dec. 31, 2018$ / sharesshares | |
Stockholders Equity Note Disclosure [Line Items] | ||
Year of anniversary | 7 years | |
Class A common stock | ||
Stockholders Equity Note Disclosure [Line Items] | ||
Common stock, par or stated value per share (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Number of votes per share | vote | 1 | |
Class B common stock | ||
Stockholders Equity Note Disclosure [Line Items] | ||
Common stock, par or stated value per share (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Number of votes per share | vote | 10 | |
Percentage of written consent of shareholders | 67.00% | |
Undesignated Preferred Stock | ||
Stockholders Equity Note Disclosure [Line Items] | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Common Stock Reserved for Future Issuance (Detail) | Dec. 31, 2019shares |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 135,992,000 |
2013 Equity incentive plan | |
Class of Stock [Line Items] | |
Outstanding options and restricted stock unit awards (in shares) | 5,505,000 |
Available for future grants (in shares) | 15,528,723 |
2013 Employee stock purchase plan | |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 3,919,000 |
Available for future grants (in shares) | 3,918,712 |
Class B common stock | |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 11,039,000 |
Preferred Stock | |
Class of Stock [Line Items] | |
Common stock reserved for future issuance (in shares) | 100,000,000 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Share-Based Compensation Expense Recognized to Statements of Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | $ 101,354 | $ 68,088 | $ 42,060 |
Cost of revenues | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | 8,741 | 4,982 | 3,735 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | 23,132 | 14,975 | 9,550 |
Sales and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | 38,325 | 27,324 | 16,015 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | $ 31,156 | $ 20,807 | $ 12,760 |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of Share-Based Compensation Expense by Award Type (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 101,354 | $ 68,088 | $ 42,060 |
Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 986 | 3,433 | 6,803 |
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 96,192 | 61,561 | 33,080 |
Employee stock purchase plan rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 4,176 | $ 3,094 | $ 2,177 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions | Jan. 29, 2014 | Sep. 30, 2013 | Jan. 29, 2014 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options granted (in shares) | 0 | 0 | 25,000 | |||
Total intrinsic value of options exercised | $ 215.5 | $ 74.6 | $ 41.2 | |||
2013 Employee stock purchase plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Available for future grants (in shares) | 3,918,712 | |||||
Unrecognized share-based compensation expense | $ 2.3 | 1.5 | ||||
Unrecognized share-based compensation expense, remaining weighted-average vesting periods | 4 months 24 days | |||||
Maximum employee subscription rate (percent) | 15.00% | |||||
Maximum number of share per employee (in shares) | 3,000 | |||||
Additional shares reserved for future issuance (in shares) | 810,459 | |||||
Employee Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized share-based compensation expense | $ 0 | $ 1 | ||||
Unrecognized share-based compensation expense, remaining weighted-average vesting periods | 3 months 18 days | 9 months 18 days | ||||
Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period contractual term | 4 years | |||||
Unrecognized share-based compensation expense, remaining weighted-average vesting periods | 2 years 3 months 18 days | 2 years 4 months 24 days | ||||
Unrecognized share-based compensation expense | $ 198.3 | $ 107.9 | ||||
2013 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of outstanding shares (percent) | 5.00% | |||||
Available for future grants (in shares) | 15,528,723 | |||||
Vesting period contractual term | 7 years | |||||
Key Employee Equity Bonus Plan | Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized share-based compensation expense, remaining weighted-average vesting periods | 1 month 6 days | |||||
Unrecognized share-based compensation expense | $ 1 | |||||
Number of shares issued (in shares) | 100,000 | 100,000 | ||||
Share based compensation requisite service period recognition | 4 months 24 days | |||||
Class A common stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, shares reserved for future issuance (in shares) | 75,901,000 | 69,445,000 | ||||
Class A common stock | 2013 Employee stock purchase plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, shares reserved for future issuance (in shares) | 1,250,000 | |||||
Percentage of outstanding shares (percent) | 1.00% | |||||
Class A common stock | 2013 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, shares reserved for future issuance (in shares) | 6,200,000 | |||||
Common stock, additional shares reserved (in shares) | 6,200,000 | 4,052,295 | ||||
Share-based Payment Arrangement, Tranche Two | Class A common stock | 2013 Employee stock purchase plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Purchase price of common stock (as a percentage of fair value) | 90.00% | |||||
Share-based Payment Arrangement, Tranche One | Class A common stock | 2013 Employee stock purchase plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Purchase price of common stock (as a percentage of fair value) | 90.00% | |||||
Post January Twenty Nine 2014 | Previously Reported | 2013 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period contractual term | 10 years |
Share-Based Compensation - Su_3
Share-Based Compensation - Summary of Stock Option Activity Plans (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Options Outstanding | ||||
Number of Options Outstanding, Beginning Balance (in shares) | 4,131,000 | 5,286,000 | 7,384,000 | |
Number of Options Outstanding, Granted (in shares) | 0 | 0 | 25,000 | |
Number of Options Outstanding, Exercised (in shares) | (1,742,000) | (1,138,000) | (1,722,000) | |
Number of Options Outstanding, Canceled/Forfeited (in shares) | (132,000) | (17,000) | (401,000) | |
Number of Options Outstanding, Ending Balance (in shares) | 2,257,000 | 4,131,000 | 5,286,000 | 7,384,000 |
Number of Options Outstanding, Vested and expected to vest (in shares) | 2,259,000 | |||
Number of Options Outstanding, Exercisable (in shares) | 2,243,000 | |||
Weighted-Average Exercise Price Per Share | ||||
Weighted-Average Exercise Price Per Share, Beginning Balance (in dollars per share) | $ 10.86 | $ 10.30 | $ 10.59 | |
Weighted-Average Exercise Price Per Share, Granted (in dollars per share) | 0 | 0 | 23.99 | |
Weighted-Average Exercise Price Per Share, Exercised (in dollars per share) | 8.53 | 8.17 | 10.39 | |
Weighted-Average Exercise Price Per Share, Canceled/Forfeited (in dollars per share) | 2.73 | 18.79 | 16.04 | |
Weighted-Average Exercise Price Per Share, Ending Balance (in dollars per share) | 13.13 | $ 10.86 | $ 10.30 | $ 10.59 |
Weighted-Average Exercise Price Per Share, Vested and expected to vest (in dollars per share) | 13.13 | |||
Weighted-Average Exercise Price Per Share, Exercisable (in dollars per share) | $ 13.10 | |||
Weighted-Average Contractual Term | ||||
Weighted-Average Contractual Term | 2 years 6 months | 3 years 3 months 18 days | 4 years 2 months 12 days | 5 years 3 months 18 days |
Weighted-Average Contractual Term, Vested and expected to vest | 2 years 6 months | |||
Weighted-Average Contractual Term, Exercisable | 2 years 6 months | |||
Aggregate Intrinsic Value | ||||
Aggregate Intrinsic Value, Outstanding | $ 351,428 | $ 295,921 | $ 201,480 | $ 74,065 |
Aggregate Intrinsic Value, Vested and expected to vest | 351,362 | |||
Aggregate Intrinsic Value, Exercisable | $ 349,002 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Total Intrinsic Values of Options Exercised (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement [Abstract] | |||
Total intrinsic value of options exercised | $ 215.5 | $ 74.6 | $ 41.2 |
Share-Based Compensation - Weig
Share-Based Compensation - Weighted Average Assumptions Used to Fair Value of Stock Options Granted (Detail) | 12 Months Ended |
Dec. 31, 2017$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 44.00% |
Risk-free interest rate | 1.78% |
Expected dividend yield | 0.00% |
Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 4 years 4 months 24 days |
Grant date fair value of employee options (in dollars per share) | $ 9.08 |
Non Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 4 years 7 months 6 days |
Share-Based Compensation - Su_4
Share-Based Compensation - Summary of Assumptions Used to Value ESPP Rights Under the Black-Scholes Option-Pricing Model (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 44.00% | ||
Risk-free interest rate | 1.78% | ||
Expected dividend yield | 0.00% | ||
2013 Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 15 days | 15 days | 15 days |
Expected volatility | 47.00% | 42.00% | 34.00% |
Risk-free interest rate | 2.01% | 2.31% | 1.20% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Offering grant date fair value of ESPP rights (in dollars per share) | $ 33.66 | $ 18.07 | $ 9.52 |
Share-Based Compensation - Su_5
Share-Based Compensation - Summary of RSUs Activity (Detail) - Restricted stock units - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of RSUs Outstanding (in thousands) | ||||
Number of RSUs Outstanding, Beginning Balance (in shares) | 3,561 | 4,281 | 3,554 | |
Number of RSUs Outstanding, Granted (in shares) | 2,069 | 1,746 | 3,005 | |
Number of RSUs Outstanding, Released (in shares) | (1,906) | (1,971) | (1,680) | |
Number of RSUs Outstanding, Canceled/Forfeited (in shares) | (475) | (495) | (598) | |
Number of RSUs Outstanding, Ending Balance (in shares) | 3,249 | 3,561 | 4,281 | |
Weighted- Average Grant Date Fair Value Per Share | ||||
Weighted-Average Grant Date Fair Value Per Share, Beginning Balance (in dollars per share) | $ 42.09 | $ 25.51 | $ 18.01 | |
Weighted-Average Grant Date Fair Value Per Share, Granted (in dollars per share) | 122.35 | 67.64 | 30.20 | |
Weighted-Average Grant Date Fair Value Per Share, Released (in dollars per share) | 50.99 | 30.50 | 19.54 | |
Weighted-Average Grant Date Fair Value Per Share, Canceled/Forfeited (in dollars per share) | 60.38 | 34.99 | 20.91 | |
Weighted-Average Grant Date Fair Value Per Share, Ending Balance (in dollars per share) | $ 85.39 | $ 42.09 | $ 25.51 | |
Aggregate Intrinsic Value (in thousands) | ||||
Aggregate Intrinsic Value, Outstanding | $ 548,145 | $ 293,523 | $ 207,197 | $ 73,261 |
Income Taxes - Summary of Net L
Income Taxes - Summary of Net Loss Before Provision for (Benefit from) Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (64,822) | $ (29,584) | $ (5,883) |
International | 7,882 | 3,521 | 1,937 |
Loss before income taxes | $ (56,940) | $ (26,063) | $ (3,946) |
Income Taxes - Summary of Provi
Income Taxes - Summary of Provision for (Benefit from) Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 150 | 61 | 49 |
Foreign | 464 | 382 | 256 |
Total current | 614 | 443 | 305 |
Deferred | |||
Federal | (2,765) | 0 | 0 |
State | (445) | 0 | 0 |
Foreign | (737) | (303) | (47) |
Total deferred | (3,947) | (303) | (47) |
Total income tax provision | $ (3,333) | $ 140 | $ 258 |
Income Taxes - Summary of Varia
Income Taxes - Summary of Variation of Effective Provision for (Benefit from) Income Taxes from Statutory Federal Income Tax Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal tax benefit at statutory rate | $ (11,957) | $ (5,473) | $ (1,341) |
State tax, net of federal tax benefit | (233) | 48 | 32 |
Research and development credits | (5,312) | (3,284) | (707) |
Share-based compensation | (58,780) | (25,170) | (18,154) |
Other permanent differences | 3,149 | 1,325 | 814 |
Change in U.S. federal Tax Rate | 0 | 0 | 33,254 |
Foreign tax rate differential | (799) | (288) | (445) |
Net operating (gains) losses not recognized | 73,364 | 32,982 | (13,195) |
Release of valuation allowance associated with acquisitions | (2,765) | 0 | 0 |
Total income tax provision | $ (3,333) | $ 140 | $ 258 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||
Net operating loss and credit carry-forwards | $ 196,930 | $ 109,812 |
Research and development credits | 24,452 | 16,380 |
Sales tax liability | 157 | 258 |
Share-based compensation | 5,937 | 5,435 |
Accrued liabilities | 6,612 | 5,135 |
Gross deferred tax assets | 234,088 | 137,020 |
Valuation allowance | (180,090) | (94,118) |
Total deferred tax assets | 53,998 | 42,902 |
Deferred tax liabilities | ||
Convertible debt discount | (16,701) | (21,035) |
Deferred sales commissions | (28,601) | (18,253) |
Acquired intangibles | (3,857) | (2,670) |
Property and equipment | (6,731) | (3,573) |
Net deferred tax (liabilities) assets | $ (1,892) | $ (2,629) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 14, 2019 | |
Income Taxes [Line Items] | ||||
Period for cumulative ownership change | 3 years | |||
Valuation allowances, deferred tax asset, increase | $ 3,210 | $ 0 | $ 0 | |
Federal | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards | 782,700 | |||
Operating loss carryforwards, subject to expiration | 272,900 | |||
California | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards | 675,600 | |||
Valuation allowances, deferred tax asset, increase | 86,000 | $ 18,200 | ||
Research credit carry-forward | Federal | ||||
Income Taxes [Line Items] | ||||
Research credit carryforwards for tax purposes | 20,200 | |||
Research credit carry-forward | California | ||||
Income Taxes [Line Items] | ||||
Research credit carryforwards for tax purposes | $ 15,700 | |||
Connect First, Inc. | ||||
Income Taxes [Line Items] | ||||
Net deferred tax liability | $ 3,200 |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning of the year | $ 6,029 | $ 3,004 | $ 2,460 |
Increases related to prior year tax positions | 0 | 1,050 | 0 |
Decreases related to prior year tax positions | (48) | 0 | (3) |
Increases related to current year tax positions | 2,984 | 1,975 | 547 |
Unrecognized tax benefits, end of year | $ 8,965 | $ 6,029 | $ 3,004 |
Basic and Diluted Net Loss Pe_3
Basic and Diluted Net Loss Per Share - Computation of Company's Basic and Diluted Net Loss Per Share of Common Stock (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator | |||||||||||
Net loss | $ (25,257) | $ (12,749) | $ (9,243) | $ (6,358) | $ (5,678) | $ (9,518) | $ (8,291) | $ (2,716) | $ (53,607) | $ (26,203) | $ (4,204) |
Denominator | |||||||||||
Weighted-average common shares for basic and diluted net loss per share (in shares) | 83,130 | 79,500 | 76,281 | ||||||||
Basic and diluted net loss per common share (in dollars per share) | $ (0.30) | $ (0.15) | $ (0.11) | $ (0.08) | $ (0.07) | $ (0.12) | $ (0.10) | $ (0.03) | $ (0.64) | $ (0.33) | $ (0.06) |
Basic and Diluted Net Loss Pe_4
Basic and Diluted Net Loss Per Share - Potential Shares of Common Stock Excluded from Diluted Weighted-Average Common Shares Outstanding (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares excluded from diluted net loss per share (in shares) | 8,737 | 9,022 | 10,806 |
Equity Incentive Plans | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares excluded from diluted net loss per share (in shares) | 6,832 | 8,943 | 10,806 |
Convertible Senior Notes Due 2023 | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares excluded from diluted net loss per share (in shares) | 1,905 | 79 | 0 |
Basic and Diluted Net Loss Pe_5
Basic and Diluted Net Loss Per Share Basic and Diluted Net Loss Per Share - Narrative (Details) | Dec. 31, 2019$ / shares |
Convertible Senior Notes Due 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Conversion price per share (in dollars per share) | $ 81.45 |
Geographic Concentrations - Add
Geographic Concentrations - Additional Information (Detail) - Geographic Concentration Risk - Country | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Non-US | Sales Revenue, Segment | |||
Concentration Risk [Line Items] | |||
Number of foreign countries representing more than ten percent | 0 | 0 | 0 |
Non-US | Long-lived Assets | |||
Concentration Risk [Line Items] | |||
Number of foreign countries representing more than ten percent | 0 | 0 | |
France | Long-lived Assets | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 8.00% | 26.00% | |
Minimum | U.S. | Sales Revenue, Segment | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 90.00% | 90.00% | 90.00% |
Minimum | U.S. | Long-lived Assets | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 89.00% | 67.00% |
401(k) Plan - Additional Inform
401(k) Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
401(k) Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contributions | $ 4.1 | $ 2.9 | $ 1.1 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) - Selected Unaudited Quarterly Consolidated Statements of Operations Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Operations Data | |||||||||||
Revenues | $ 252,865 | $ 233,352 | $ 215,152 | $ 201,489 | $ 188,624 | $ 173,825 | $ 160,832 | $ 150,343 | $ 902,858 | $ 673,624 | $ 503,617 |
Gross profit | 185,992 | 173,647 | 161,522 | 150,654 | 144,509 | 134,551 | 122,766 | 114,669 | 671,815 | 516,495 | 382,346 |
Operating loss | (20,369) | (10,663) | (7,180) | (7,463) | (3,404) | (7,027) | (4,654) | (1,351) | (45,675) | (16,436) | (5,338) |
Net loss | $ (25,257) | $ (12,749) | $ (9,243) | $ (6,358) | $ (5,678) | $ (9,518) | $ (8,291) | $ (2,716) | $ (53,607) | $ (26,203) | $ (4,204) |
Basic and diluted net loss per common share (in dollars per share) | $ (0.30) | $ (0.15) | $ (0.11) | $ (0.08) | $ (0.07) | $ (0.12) | $ (0.10) | $ (0.03) | $ (0.64) | $ (0.33) | $ (0.06) |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Detail) - Google Inc. - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Total payables to related party | $ 1.5 | $ 1.2 | |
Total expenses incurred from related party | $ 18.7 | $ 18.8 | $ 15.4 |