Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document And Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | RNG | |
Entity Registrant Name | RingCentral Inc | |
Entity Central Index Key | 1,384,905 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Class A common stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 66,807,773 | |
Class B common stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 11,904,332 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 554,963 | $ 181,192 |
Accounts receivable, net | 55,379 | 46,690 |
Deferred sales commission costs | 16,649 | 15,424 |
Prepaid expenses and other current assets | 24,118 | 21,512 |
Total current assets | 651,109 | 264,818 |
Property and equipment, net | 50,131 | 43,298 |
Deferred sales commission costs, noncurrent | 40,140 | 37,871 |
Goodwill | 9,393 | 9,393 |
Acquired intangibles, net | 22,377 | 1,462 |
Other assets | 2,328 | 2,972 |
Total assets | 775,478 | 359,814 |
Current liabilities | ||
Accounts payable | 4,256 | 7,322 |
Accrued liabilities | 64,562 | 54,977 |
Current portion of capital lease obligation | 1,252 | |
Deferred revenue | 68,037 | 62,917 |
Total current liabilities | 138,107 | 125,216 |
Convertible senior notes, net | 352,004 | |
Capital lease obligation | 3,261 | |
Other long-term liabilities | 6,240 | 6,252 |
Total liabilities | 499,612 | 131,468 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity | ||
Common stock | 8 | 8 |
Additional paid-in capital | 484,854 | 434,840 |
Accumulated other comprehensive income | 3,220 | 2,998 |
Accumulated deficit | (212,216) | (209,500) |
Total stockholders' equity | 275,866 | 228,346 |
Total liabilities and stockholders' equity | $ 775,478 | $ 359,814 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Software subscriptions | $ 136,960,000 | $ 104,130,000 |
Other | 13,383,000 | 8,104,000 |
Total revenues | 150,343,000 | 112,234,000 |
Cost of revenues | ||
Software subscriptions | 24,526,000 | 20,263,000 |
Other | 11,148,000 | 7,043,000 |
Total cost of revenues | 35,674,000 | 27,306,000 |
Gross profit | 114,669,000 | 84,928,000 |
Operating expenses | ||
Research and development | 22,651,000 | 17,087,000 |
Sales and marketing | 71,920,000 | 54,265,000 |
General and administrative | 21,449,000 | 15,805,000 |
Total operating expenses | 116,020,000 | 87,157,000 |
Loss from operations | (1,351,000) | (2,229,000) |
Other income (expense), net | ||
Interest expense | (1,411,000) | (79,000) |
Other income, net | 73,000 | 122,000 |
Other income (expense), net | (1,338,000) | 43,000 |
Loss before income taxes | (2,689,000) | (2,186,000) |
Provision for income taxes | 27,000 | 51,000 |
Net loss | $ (2,716,000) | $ (2,237,000) |
Net loss per common share | ||
Basic and diluted | $ (0.03) | $ (0.03) |
Weighted-average number of shares used in computing net loss per share | ||
Basic and diluted | 78,341 | 74,682 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (2,716) | $ (2,237) |
Other comprehensive loss | ||
Foreign currency translation adjustments | 222 | 31 |
Comprehensive loss | $ (2,494) | $ (2,206) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (2,716) | $ (2,237) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 5,542 | 3,785 |
Share-based compensation | 13,267 | 8,935 |
Amortization of deferred sales commission costs | 3,984 | 2,597 |
Amortization of debt discount and issuance costs | 1,370 | |
Foreign currency remeasurement (gain) loss | 267 | (44) |
Provision for bad debt | 554 | 289 |
Deferred income taxes | (6) | (2) |
Other | 206 | 98 |
Changes in assets and liabilities: | ||
Accounts receivable | (9,243) | (1,594) |
Deferred sales commission costs | (7,478) | (7,226) |
Prepaid expenses and other current assets | (2,270) | (2,038) |
Other assets | 337 | 45 |
Accounts payable | (2,816) | (2,224) |
Accrued liabilities | 6,079 | 4,159 |
Deferred revenue | 5,120 | 3,989 |
Other liabilities | (12) | 178 |
Net cash provided by operating activities | 12,185 | 8,710 |
Cash flows from investing activities | ||
Purchases of property and equipment | (4,587) | (5,155) |
Capitalized internal-use software | (2,759) | (1,640) |
Cash paid for acquisition of intangible assets | (18,470) | |
Net cash used in investing activities | (25,816) | (6,795) |
Cash flows from financing activities | ||
Proceeds from issuance of convertible senior notes, net of issuance costs | 449,457 | |
Payments for capped call transactions and costs | (49,910) | |
Repurchase of common stock | (15,000) | |
Proceeds from issuance of stock in connection with stock plans | 3,688 | 2,679 |
Taxes paid related to net share settlement of equity awards | (1,014) | (221) |
Repayment of debt | (14,840) | |
Repayment of capital lease obligations | (181) | |
Net cash provided by (used in) financing activities | 387,221 | (12,563) |
Effect of exchange rate changes | 181 | (17) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 373,771 | (10,665) |
Cash, cash equivalents and restricted cash | ||
Beginning of period | 181,192 | 160,355 |
End of period | 554,963 | 149,690 |
Supplemental disclosure of cash flow data | ||
Cash paid for interest | 116 | |
Cash paid for income taxes, net of refunds | 44 | 83 |
Non-cash investing and financing activities | ||
Equipment acquired under capital lease | 4,513 | |
Contingent consideration not paid relating to asset acquisition | 3,848 | |
Equipment and capitalized internal-use software purchased and unpaid at period end | $ 1,108 | 757 |
Glip, Inc. | ||
Non-cash investing and financing activities | ||
Issuance of common stock for business combination | $ 200 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Note 1. 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 for business communications and collaboration. The Company was incorporated in California in 1999 and was reincorporated in Delaware on September 26, 2013. Basis of Presentation and Consolidation The unaudited condensed consolidated financial statements and accompanying notes of the Company reflect all adjustments (all of which are normal, recurring in nature and those discussed in these notes) that are, in the opinion of management, necessary for a fair presentation of the interim periods presented. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2018. Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (“SEC”). Effective January 1, 2018, the Company adopted the requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) the Financial Accounting Standards Board (“FASB”), Other Assets and Deferred Costs - Contracts with Customers The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, Use of Estimates The preparation of condensed 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 condensed 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, deferred sales commission costs, goodwill, 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. Changes in Significant Accounting Policies Except for the accounting policies for revenue recognition and deferred commissions that were updated as a result of adopting Topic 606, there have been no changes to our significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2017, that have had a material impact on the Company’s condensed consolidated financial statements and related notes. Revenue Recognition The Company derives its revenues primarily from software 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 the 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: Software subscriptions revenue Software subscriptions revenue is generated from the sale of subscriptions to the Company’s software applications and related services, which 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 generally 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 termination period ends, 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 is generated from product revenues from sales of phones and professional implementation services. Product revenue is recognized when the products have been delivered to the customer. The amount of revenue recognized for products is adjusted for expected returns, which are estimated based on historical data. The Company offers professional services that 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 our professional services contracts are on a fixed price basis and revenue is recognized over time as services are performed. Deferred sales commission costs The Company capitalizes sales commission expenses and associated payroll taxes paid to internal sales personnel, value added resellers and channel partners that are incremental to obtaining customer contracts. These 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 renewals of its customer contracts, the duration of its relationships with its customers, its technology and other factors. Amortization expense is included in sales and marketing expenses in the accompanying condensed consolidated statement of operations. Disaggregation of revenue The following table provides information about disaggregated revenue by primary geographical markets: Three Months Ended March 31, 2018 2017 Primary geographical markets North America 95.9 % 97.1 % Others 4.1 2.9 Total revenues 100.0 % 100.0 % The Company derived approximately 86.1% and 82.9% of subscription revenues from RingCentral Office product for the three months ended March 31, 2018 and 2017, respectively. Deferred revenue During the first quarter of 2018 the Company recognized revenue of $33.7 million that was included in the corresponding deferred revenue balance at the beginning of the period. Remaining performance obligations The typical subscription term ranges from one month to five years. Contract revenue as of March 31, 2018, that has not yet been recognized was $424 million. This excludes contracts with an original expected length of less than one year. The Company expects to recognize revenue of $269 million over the next 12 months and $155 million thereafter. 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 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 for stock options and RSUs granted to non-employees is revalued, or marked to market, as of each reporting date until the stock options and RSUs are vested. Compensation expense is recognized net of estimated forfeiture activity, which is based on historical forfeiture rates. Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment In February 2018, the FASB issues ASU 2018-03, Technical Corrections and Improvements to Financial Statements – Overall (Sub Topic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Liabilities |
Impact of Recent Accounting Pro
Impact of Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Impact of Recent Accounting Pronouncements | Note 2. Impact of Recent Accounting Pronouncements On January 1, 2018, the Company adopted Topic 606 utilizing the full retrospective method of transition. The Company adjusted its condensed consolidated financial statements from amounts previously reported due to the adoption of Topic 606. Select condensed consolidated balance sheet line items, which reflect the adoption of the new ASU are as follows (in thousands): December 31, 2017 As Reported Adoption of Topic 606 As Adjusted Assets Accounts receivable, net $ 45,339 $ 1,351 $ 46,690 Deferred sales commission costs — 15,424 15,424 Deferred sales commission costs, noncurrent — 37,871 37,871 Liabilities Deferred revenue 64,415 (1,498 ) 62,917 Stockholders' equity $ 172,202 $ 56,144 $ 228,346 The following table reflects the effect of adoption of Topic 606 on the Company’s condensed consolidated statement of operations for the three months ended March 31, 2017 (in thousands): Three Months Ended March 31, 2017 As Reported Adoption of Topic 606 As Adjusted Revenues Software subscriptions $ 103,687 $ 443 $ 104,130 Other 8,104 — 8,104 Total revenues 111,791 443 112,234 Gross profit 84,485 443 84,928 Operating expenses Sales and marketing 58,894 (4,629 ) 54,265 Operating loss (7,301 ) 5,072 (2,229 ) Net loss $ (7,309 ) $ 5,072 $ (2,237 ) Basic and diluted Net loss per Common Share $ (0.10 ) $ 0.07 $ (0.03 ) Weighted-average number of shares used in computing net loss per share Basic and diluted 74,682 — 74,682 The following table reflects the effect of adoption of Topic 606 on the Company’s condensed consolidated statement of cash flows for the three months ended March 31, 2017 (in thousands): Three Months Ended March 31, 2017 As Reported Adoption of Topic 606 As Adjusted Cash flows from operating activities Net loss $ (7,309 ) $ 5,072 $ (2,237 ) Adjustments to reconcile net loss to net cash provided by operating activities: Amortization of deferred sales commission costs — 2,597 2,597 Changes in operating assets and liabilities: Accounts receivable (1,371 ) (223 ) (1,594 ) Deferred sales commission costs — (7,226 ) (7,226 ) Deferred revenue 4,209 (220 ) 3,989 Net cash provided by operating activities 8,710 — 8,710 |
Other Revenue and Cost of Reven
Other Revenue and Cost of Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Other Revenue and Cost of Revenue | Note 3. Other Revenue and Cost of Revenue Other revenues are primarily comprised of product revenue from the sale of pre-configured phones, phone rentals, and professional services. For the three months ended March 31, 2018 and 2017, the majority of other revenues consisted of product revenues from sales of phones. Product revenues were $8.0 million and $6.1 million for the three months ended March 31, 2018 and 2017, respectively. Product cost of revenues were $7.2 million and $5.9 million for the three months ended March 31, 2018 and 2017, respectively. |
Financial Statement Components
Financial Statement Components | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Financial Statement Components | Note 4. Financial Statement Components Cash and cash equivalents consisted of the following (in thousands): March 31, December 31, 2018 2017 Cash $ 44,133 $ 70,893 Money market funds 510,830 110,299 Total cash and cash equivalents $ 554,963 $ 181,192 The Company has an immaterial restricted cash balance as of March 31, 2018 and December 31, 2017, included in the cash balance above. Accounts receivable, net consisted of the following (in thousands): March 31, December 31, 2018 2017 As Adjusted Accounts receivable $ 48,227 $ 42,243 Unbilled accounts receivable 8,189 5,159 Allowance for doubtful accounts (1,037 ) (712 ) Accounts receivable, net $ 55,379 $ 46,690 Prepaid expenses and other current assets consisted of the following (in thousands): March 31, December 31, 2018 2017 Prepaid expenses $ 17,076 $ 13,690 Inventory 229 198 Other current assets 6,813 7,624 Total prepaid expenses and other current assets $ 24,118 $ 21,512 Property and equipment, net consisted of the following (in thousands): March 31, December 31, 2018 2017 Computer hardware and software $ 80,626 $ 74,555 Internal-use software development costs 20,867 18,217 Furniture and fixtures 6,314 6,293 Leasehold improvements 5,249 4,311 Total property and equipment 113,056 103,376 Less: accumulated depreciation and amortization (62,925 ) (60,078 ) Property and equipment, net $ 50,131 $ 43,298 Depreciation and amortization expense was $4.5 million and $3.5 million for the three months ended March 31, 2018 and 2017, respectively. Accrued liabilities consisted of the following (in thousands): March 31, December 31, 2018 2017 Accrued compensation and benefits $ 16,401 $ 18,578 Accrued sales, use and telecom related taxes 13,366 11,828 Accrued marketing 9,943 7,020 Other accrued expenses 24,852 17,551 Total accrued liabilities $ 64,562 $ 54,977 The carrying values of intangible assets are as follows (in thousands): March 31, 2018 December 31, 2017 Estimated Lives Cost Accumulated Amortization Acquired Intangibles, Net Cost Accumulated Amortization Acquired Intangibles, Net Customer relationships 2 to 5 years $ 22,822 $ 1,756 $ 21,066 $ 840 $ 840 $ - Developed technology 5 years 3,010 1,699 1,311 3,010 1,548 1,462 Total acquired intangible assets $ 25,832 $ 3,455 $ 22,377 $ 3,850 $ 2,388 $ 1,462 During the three months ended March 31, 2018, the Company acquired $22.0 million of customer relationships. See Note 6. Amortization expense from acquired intangible assets for the three months ended March 31, 2018 and 2017 was $1.1 million and $0.3 million, respectively. Amortization of developed technology is included in cost of revenues and amortization of customer relationships is included in sales and marketing expenses in the condensed consolidated statements of operations. At March 31, 2018, the weighted average amortization period for customer relationships and developed technology was approximately 4.8 years and 2.2 years, respectively. Estimated amortization expense for acquired intangible assets for the following five fiscal years and thereafter is as follows (in thousands): 2018 (remaining) $ 3,749 2019 4,998 2020 4,654 2021 4,396 2022 onwards 4,580 Total estimated amortization expense $ 22,377 Deferred Sales Commission Costs Deferred sales commission costs, which relate to sales commission costs capitalized for incremental cost of obtaining customer contracts, were $56.8 million and $53.3 million as of March 31, 2018 and December 31, 2017, respectively. Amortization expense for the deferred sales commission costs for the three months ended March 31, 2018 and 2017 were $4.0 million and $2.6 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 | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 5. Fair Value of Financial Instruments Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company measures and reports certain cash equivalents, including money market funds and certificates of deposit, 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: Valuations based on observable inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Valuations based on observable inputs other than Level 1 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: Valuations based on 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): Balance at March 31, 2018 (Level 1) (Level 2) (Level 3) Cash equivalents: Money market funds $ 510,830 $ 510,830 $ — $ — Balance at December 31, 2017 (Level 1) (Level 2) (Level 3) Cash equivalents: Money market funds $ 110,299 $ 110,299 $ — $ — The As of March 31, 2018, the fair value of the 0% convertible senior notes due 2023 (the “Notes”) (described in Note 7 below) was approximately $463.8 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. |
Customer Base Acquisition
Customer Base Acquisition | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Customer Base Acquisition | Note 6. Customer Base Acquisition On January 16, 2018, the Company acquired from AT&T, Inc. (“AT&T”) the existing customer base of the RingCentral Office Hand solution, for which AT&T acted as a reseller, for a total purchase consideration of up to $26.0 million. The purchase price consisted of a $20.0 million cash payment upon closing of the transaction and up to $6.0 million in earn-out payments based on achievement of certain milestones. The transition of the customer base is expected to be completed over a period of one year from the close of the transaction. The Company has entered into a Transition Services Agreement (“TSA”) for a period of one year for the transition of these customers. The total purchase consideration was estimated to be $24.1 million upon the close of the transaction, consisting of $20.2 million cash payments, including transaction costs, and $3.8 million earn-out consideration. The transaction is accounted for as an asset acquisition. The value of the total consideration was allocated between the customer relationship intangible asset and the TSA services based on their relative fair value. As of March 31, 2018, the amount allocated to the customer relationship intangible asset was approximately $22.0 million and will be amortized over the expected useful life of five years. The value allocated to the TSA was $2.1 million and will be amortized over a period of one year which is the period in which customers will be transitioned. The following table summarizes the fair value of assets acquired as of the date of acquisition (in thousands): Fair Value Estimated Useful Life Customer relationships $ 21,982 5 years Transition Services Agreement 2,082 1 year Net assets acquired $ 24,064 |
Convertible Senior Notes
Convertible Senior Notes | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Note 7. Convertible Senior Notes In March 2018, the Company issued $400.0 million aggregate principal amount of 0% convertible senior notes due 2023 in a private placement and an additional $60.0 million aggregate principal amount of such notes pursuant to the exercise in full of the over-allotment options of the initial purchasers. The Notes do not bear regular interest, and the principal amount of the Notes does not accrete. The Notes may bear special interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the indenture relating to the issuance of 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. Prior to the close of business on the business day immediately preceding December 15, 2022, the Notes will be convertible only under the following circumstances: (1) during any calendar quarter commencing after June 30, 2018, and only during such calendar quarter, if the last reported sale price of the Class A Common Stock for at least 20 trading days (whether or not consecutive) in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is more than 130% of the conversion price on each applicable trading day; (2) during the five business days period after any five consecutive trading days period in which, for each trading day of that period, the trading price per $1,000 principal amount of Notes for such trading day was less than 98% of the product of the last reported sale price of the Class A Common Stock and the conversion rate on each such trading day; (3) upon the Company’s notice that it is redeeming any or all of the Notes, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. 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 the foregoing 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 three months ended March 31, 2018, the conditions allowing holders of the Notes to convert were not met. 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 if the last reported sale price of the Class A Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending within not more than three trading days preceding the date on which the Company provides written notice of redemption. 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. The Notes are senior unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment with the Company’s existing and future liabilities that are not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of current or future subsidiaries of the Company. The foregoing description is qualified in its entirety by reference to the text of the Indenture and the Form of 0% Convertible Senior Notes due 2023, which are attached as Exhibits 4.1 and 4.2, respectively, to this Quarterly Report on Form 10-Q and are incorporated herein by reference. 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. In accounting for the transaction costs related to the Notes, the Company allocated the total amount incurred to the liability and equity components of the Notes based on the proportion of the proceeds allocated to the debt and equity components. Issuance costs attributable to the liability component were $8.2 million were recorded as additional debt discount and will be amortized to interest expense using the effective interest method over the contractual terms of the Notes. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. The net carrying amount of the liability component of the Notes was as follows (in thousands): March 31, 2018 Principal $ 460,000 Unamortized discount (99,859 ) Unamortized issuance cost (8,137 ) Net carrying amount $ 352,004 The net carrying amount of the equity component of the Notes was as follows (in thousands): March 31, 2018 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): March 31, 2018 Contractual interest expense $ - Amortization of debt discount 1,282 Amortization of debt issuance costs 88 Total interest expense related to the Notes $ 1,370 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 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 consolidated balance sheet. Concurrently with the issuance of the Notes, the Company’s board of directors approved the repurchase of an aggregate of 239,425, or $15.0 million of, shares of the Company’s outstanding Class A Common Stock in privately negotiated transactions at a price of $62.65 per share, which was equal to the closing price per share of the Company’s Class A Common Stock on March 1, 2018, the date of the pricing of the offering of the Notes. The share repurchase was recorded as a reduction of additional paid-in capital on the consolidated balance sheet. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies Leases The Company leases facilities for office space under non-cancelable operating leases for its U.S. and international locations and has entered into capital lease arrangements to obtain property and equipment for its operations. Sales Tax Liability The Company regularly increases its sales and marketing activities in various states within the U.S., which may create nexus in those states to collect sales taxes on sales to customers. Although the Company is diligent in collecting and remitting such taxes, there is uncertainty as to what constitutes sufficient in-state presence for a state to levy taxes, fees, and surcharges for sales made over the Internet. As of March 31, 2018 and December 31, 2017, the Company recorded a long-term sales tax liability of $2.3 million and $2.6 million, respectively, which is included in other long-term liabilities, based on its best estimate of the probable liability for the loss contingency incurred as of those dates. The Company’s estimate of a probable outcome under the loss contingency is based on analysis of its sales and marketing activities, revenues subject to sales tax, and applicable regulations in each state in each period. No significant adjustments to the long-term sales tax liability have been recognized in the accompanying condensed consolidated financial statements for changes to the assumptions underlying the estimate. However, changes in management’s assumptions may occur in the future as the Company obtains new information which can result in adjustments to the recorded liability. Increases and decreases to the long-term sales tax liability are recorded as general and administrative expense. The Company recorded a current sales tax liability for non-contingent amounts expected to be remitted in the next twelve months of $9.8 million and $9.0 million as of March 31, 2018 and December 31, 2017, respectively, which is included in accrued liabilities in the condensed consolidated balance sheet. Legal Matters From time to time, the Company 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. Legal fees are expensed in the period in which they are incurred. TCPA Matters On April 21, 2016, Supply Pro Sorbents, LLC (“SPS”) filed a putative class action against the Company in the United States District Court for the Northern District of California, alleging common law conversion and violations of the federal Telephone Consumer Protection Act (“TCPA”) arising from fax cover sheets used by the Company’s customers when sending facsimile transmissions over the Company’s system (“SPS Lawsuit”). SPS seeks statutory damages, costs, attorneys’ fees and an injunction in connection with its TCPA claim, and unspecified damages and punitive damages in connection with its conversion claim. On July 6, 2016, the Company filed a Petition for Expedited Declaratory Ruling before the Federal Communications Commission (“FCC”), requesting that the FCC issue a ruling clarifying certain portions of its regulations promulgated under TCPA at issue in the SPS Lawsuit (“Petition”). The Petition remains pending. On July 8, 2016, the Company filed a motion to dismiss the SPS Lawsuit in its entirety, along with a collateral motion to dismiss or stay the SPS Lawsuit pending a ruling by the FCC on the Company’s Petition. On October 7, 2016, the Court granted the Company’s motion to dismiss and gave SPS 20 days to amend its complaint. The Court concurrently dismissed the Company’s motion to dismiss or stay as moot. Plaintiff filed its amended complaint on October 27, 2016, alleging essentially the same theories and claims. On November 21, 2016, the Company filed a motion to dismiss the amended complaint, along with a renewed motion to dismiss or stay the case pending resolution of the FCC Petition. On July 17, 2017, the Court granted the Company’s motion to dismiss with prejudice and concurrently dismissed the Company’s motion to dismiss or stay as moot. SPS filed a notice of appeal to the Ninth Circuit Court of Appeals on July 28, 2017. SPS’s opening brief on appeal was filed on December 20, 2017, and the Company’s opposition brief was filed on February 20, 2018. SPS filed its reply brief on April 12, 2018. Oral argument in the appeal has not yet been scheduled. It is too early to predict the outcome of the SPS Lawsuit. 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 condensed consolidated financial statements, it is not possible to provide an estimated amount of any such loss or range of loss that may occur. 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 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 alleges that the Company is vicariously liable for the actions of its 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. The motion is currently pending before the court. It is too early to predict the outcome of this lawsuit. 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 condensed consolidated financial statements, it is not possible to provide an estimated amount of any such loss or range of loss that may 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 condensed 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. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | Note 9. Share-Based Compensation A summary of share-based compensation expense recognized in the Company’s condensed consolidated statements of operations is as follows (in thousands): Three Months Ended March 31, 2018 2017 Cost of revenues $ 1,010 $ 757 Research and development 3,094 1,859 Sales and marketing 5,041 3,525 General and administrative 4,122 2,794 Total share-based compensation expense $ 13,267 $ 8,935 A summary of share-based compensation expense by award type is as follows (in thousands): Three Months Ended March 31, 2018 2017 Options $ 1,128 $ 2,190 Employee stock purchase plan rights 735 461 Restricted stock units 11,404 6,284 Total share-based compensation expense $ 13,267 $ 8,935 Equity Incentive Plans As of March 31, 2018, a total of 14,271,990 shares remained available for grant under the 2013 Equity Incentive Plan (“2013 Plan”). A summary of option activity under all of the Company’s equity incentive plans at March 31, 2018 and changes during the period then ended is presented in the following table: Weighted- Number of Weighted- Average Aggregate Options Average Contractual Intrinsic Outstanding Exercise Price Term Value (in thousands) Per Share (in Years) (in thousands) Outstanding at December 31, 2017 5,286 $ 10.30 4.2 $ 201,480 Granted — — Exercised (387 ) 9.52 Canceled/Forfeited (6 ) 24.21 Outstanding at March 31, 2018 4,893 $ 10.35 3.9 $ 260,183 Vested and expected to vest as of March 31, 2018 4,841 $ 10.28 3.9 $ 257,637 Exercisable as of March 31, 2018 4,366 $ 9.62 3.9 $ 235,212 The weighted average grant date fair value of options granted and the total intrinsic value of options exercised were as follows (in thousands, except weighted average grant date fair value): Three Months Ended March 31, 2018 2017 Weighted average grant date fair value per share $ — $ 8.87 Total intrinsic value of options exercised $ 19,962 $ 5,448 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. No options were granted for the three months ended March 31, 2018. The weighted-average assumptions used in the option pricing model in the periods presented were as follows: Three Months Ended March 31, 2018 2017 Expected term for employees (in years) — 4.4 Expected term for non-employees (in years) 3.5 5.2 Risk-free interest rate 2.4 % 1.8 % Expected volatility 41.6 % 44.0 % Expected dividend yield 0 % 0 % As of March 31, 2018, there was approximately $3.0 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 period of approximately 1.2 years. Employee Stock Purchase Plan The 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 11th and November 11th 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 Class A 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. As of March 31, 2018, there was a total of $0.3 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 period of approximately 0.1 years. At March 31, 2018, a total of 3,500,243 shares were available for issuance under the ESPP. Restricted Stock Units The 2013 Plan provides for the issuance of restricted stock units (“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 March 31, 2018 and changes during the period then ended is presented in the following table: Number of Weighted- RSUs Average Aggregate Outstanding Grant Date Fair Intrinsic Value (in thousands) Value Per Share (in thousands) Outstanding at December 31, 2017 4,281 $ 25.51 $ 207,197 Granted 141 62.95 Released (429 ) 21.27 Canceled/Forfeited (113 ) 25.83 Outstanding at March 31, 2018 3,880 $ 27.32 $ 246,356 As of March 31, 2018, there was a total of $76.7 million of unrecognized share-based compensation expense, net of estimated forfeitures, related to restricted stock units, which will be recognized on a straight-line basis over the remaining weighted-average vesting period of approximately 2.6 years. Bonus Plan In December 2017, the Board adopted the Selective 2018 Key Employee Equity Bonus Plan (“KEEB Plan”), which became effective on January 1, 2018. The KEEB Plan allows the recipients to earn fully vested shares of the Company’s common stock upon the achievement of quarterly service and performance conditions. Although no RSUs were issued under the KEEB Plan as of March 31, 2018 as the service period has not yet been completed, the Company recognized an estimated $1.5 million of expense on a straight-line basis during the three months ended March 31, 2018, based on a total requisite service period of approximately 0.4 years. The unrecognized share-based compensation expense was approximately $0.8 million, which will be recognized over the remaining service period of 0.1 year. The shares issued under this plan will be issued from the Company’s 2013 Plan shares available for issuance. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 10. Segment Reporting 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. Concentrations Revenue by geographic location is based on the billing address of the customer. More than 90% Generally, over 69% of the Company’s total billings are collected through credit card payments. The Company’s accounts receivable balance of $55.4 million as of March 31, 2018 primarily consists of receivables due from larger customers and carriers who are billed on invoices at customary payment terms. As the Company moves up-market and acquires larger customers, the Company expects the accounts receivable balance to increase. At March 31, 2018 and December 31, 2017, one of the Company’s carriers accounted for 20% and 17% of the Company’s total accounts receivable, respectively. Long-lived assets by geographic location is based on the location of the legal entity that owns the asset. At March 31, 2018 and December 31, 2017, more than 90% and 85% of the Company’s consolidated long-lived assets, respectively, were located in the U.S. with no single country outside of the U. S. representing more than 10% of the Company’s consolidated long-lived assets. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11. Income Taxes The provision for income taxes for the three The realization of tax benefits of net deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available objective evidence, the Company does not believe it is more likely than not that the net deferred tax assets will be realizable. Accordingly, the Company has provided a full valuation allowance against the entire domestic and the majority of the foreign net deferred tax assets as of March 31, 2018 and December 31, 2017. The Company intends to maintain the full valuation allowance on the U.S. net deferred tax assets until sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance. During the three months ended March 31, 2018, there have been no significant changes to the total amount of unrecognized tax benefits. |
Basic and Diluted Net Loss Per
Basic and Diluted Net Loss Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss Per Share | Note 12. 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, and ESPP, to the extent dilutive. For the three months ended March 31, 2018 and 2017, 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 of common stock (in thousands, except per share data): Three Months Ended March 31, 2018 2017 As Adjusted Numerator Net loss $ (2,716 ) $ (2,237 ) Denominator Weighted-average common shares for basic and diluted net loss per share 78,341 74,682 Basic and diluted net loss per share $ (0.03 ) $ (0.03 ) 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): Three Months Ended March 31, 2018 2017 Shares of common stock issuable under equity incentive awards outstanding 9,328 11,581 Potential common shares excluded from diluted net loss per share 9,328 11,581 Since the Company expects to settle the principal amount of its outstanding convertible senior notes in cash and any excess in shares of the Company’s 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 common stock for a given period exceeds the conversion price of $81.45 per share for the Notes. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 13. 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 March 31, 2018 and December 31, 2017 were $2.3 million and $1.1 million, respectively. Total expenses incurred from Google Inc. were $5.1 million and $4.0 million in the three months ended March 31, 2018 and 2017, respectively. |
Description of Business and S19
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The unaudited condensed consolidated financial statements and accompanying notes of the Company reflect all adjustments (all of which are normal, recurring in nature and those discussed in these notes) that are, in the opinion of management, necessary for a fair presentation of the interim periods presented. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2018. Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (“SEC”). Effective January 1, 2018, the Company adopted the requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) the Financial Accounting Standards Board (“FASB”), Other Assets and Deferred Costs - Contracts with Customers The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, |
Use of Estimates | Use of Estimates The preparation of condensed 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 condensed 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, deferred sales commission costs, goodwill, 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. |
Changes in Significant Accounting Policies | Changes in Significant Accounting Policies Except for the accounting policies for revenue recognition and deferred commissions that were updated as a result of adopting Topic 606, there have been no changes to our significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2017, that have had a material impact on the Company’s condensed consolidated financial statements and related notes. |
Revenue Recognition | Revenue Recognition The Company derives its revenues primarily from software 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 the 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: Software subscriptions revenue Software subscriptions revenue is generated from the sale of subscriptions to the Company’s software applications and related services, which 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 generally 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 termination period ends, 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 is generated from product revenues from sales of phones and professional implementation services. Product revenue is recognized when the products have been delivered to the customer. The amount of revenue recognized for products is adjusted for expected returns, which are estimated based on historical data. The Company offers professional services that 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 our professional services contracts are on a fixed price basis and revenue is recognized over time as services are performed. Deferred sales commission costs The Company capitalizes sales commission expenses and associated payroll taxes paid to internal sales personnel, value added resellers and channel partners that are incremental to obtaining customer contracts. These 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 renewals of its customer contracts, the duration of its relationships with its customers, its technology and other factors. Amortization expense is included in sales and marketing expenses in the accompanying condensed consolidated statement of operations. Disaggregation of revenue The following table provides information about disaggregated revenue by primary geographical markets: Three Months Ended March 31, 2018 2017 Primary geographical markets North America 95.9 % 97.1 % Others 4.1 2.9 Total revenues 100.0 % 100.0 % The Company derived approximately 86.1% and 82.9% of subscription revenues from RingCentral Office product for the three months ended March 31, 2018 and 2017, respectively. Deferred revenue During the first quarter of 2018 the Company recognized revenue of $33.7 million that was included in the corresponding deferred revenue balance at the beginning of the period. Remaining performance obligations The typical subscription term ranges from one month to five years. Contract revenue as of March 31, 2018, that has not yet been recognized was $424 million. This excludes contracts with an original expected length of less than one year. The Company expects to recognize revenue of $269 million over the next 12 months and $155 million thereafter. |
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 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 for stock options and RSUs granted to non-employees is revalued, or marked to market, as of each reporting date until the stock options and RSUs are vested. Compensation expense is recognized net of estimated forfeiture activity, which is based on historical forfeiture rates. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment In February 2018, the FASB issues ASU 2018-03, Technical Corrections and Improvements to Financial Statements – Overall (Sub Topic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Liabilities |
Description of Business and S20
Description of Business and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Disaggregated of Revenue by Primary Geographical Market, Major Product Lines and Timing of Revenue Recognition | The following table provides information about disaggregated revenue by primary geographical markets: Three Months Ended March 31, 2018 2017 Primary geographical markets North America 95.9 % 97.1 % Others 4.1 2.9 Total revenues 100.0 % 100.0 % |
Impact of Recent Accounting P21
Impact of Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Adoption of Topic 606 | |
Effect of Adoption of Topic 606 on Condensed Consolidated Balance Sheet Line Items, Condensed Consolidated Statement of Operations and Condensed Consolidated Statement of Cash Flows | Select condensed consolidated balance sheet line items, which reflect the adoption of the new ASU are as follows (in thousands): December 31, 2017 As Reported Adoption of Topic 606 As Adjusted Assets Accounts receivable, net $ 45,339 $ 1,351 $ 46,690 Deferred sales commission costs — 15,424 15,424 Deferred sales commission costs, noncurrent — 37,871 37,871 Liabilities Deferred revenue 64,415 (1,498 ) 62,917 Stockholders' equity $ 172,202 $ 56,144 $ 228,346 The following table reflects the effect of adoption of Topic 606 on the Company’s condensed consolidated statement of operations for the three months ended March 31, 2017 (in thousands): Three Months Ended March 31, 2017 As Reported Adoption of Topic 606 As Adjusted Revenues Software subscriptions $ 103,687 $ 443 $ 104,130 Other 8,104 — 8,104 Total revenues 111,791 443 112,234 Gross profit 84,485 443 84,928 Operating expenses Sales and marketing 58,894 (4,629 ) 54,265 Operating loss (7,301 ) 5,072 (2,229 ) Net loss $ (7,309 ) $ 5,072 $ (2,237 ) Basic and diluted Net loss per Common Share $ (0.10 ) $ 0.07 $ (0.03 ) Weighted-average number of shares used in computing net loss per share Basic and diluted 74,682 — 74,682 The following table reflects the effect of adoption of Topic 606 on the Company’s condensed consolidated statement of cash flows for the three months ended March 31, 2017 (in thousands): Three Months Ended March 31, 2017 As Reported Adoption of Topic 606 As Adjusted Cash flows from operating activities Net loss $ (7,309 ) $ 5,072 $ (2,237 ) Adjustments to reconcile net loss to net cash provided by operating activities: Amortization of deferred sales commission costs — 2,597 2,597 Changes in operating assets and liabilities: Accounts receivable (1,371 ) (223 ) (1,594 ) Deferred sales commission costs — (7,226 ) (7,226 ) Deferred revenue 4,209 (220 ) 3,989 Net cash provided by operating activities 8,710 — 8,710 |
Financial Statement Components
Financial Statement Components (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Statement Of Financial Position [Abstract] | |
Components of Cash and Cash Equivalents | Cash and cash equivalents consisted of the following (in thousands): March 31, December 31, 2018 2017 Cash $ 44,133 $ 70,893 Money market funds 510,830 110,299 Total cash and cash equivalents $ 554,963 $ 181,192 |
Components of Accounts Receivable, Net | Accounts receivable, net consisted of the following (in thousands): March 31, December 31, 2018 2017 As Adjusted Accounts receivable $ 48,227 $ 42,243 Unbilled accounts receivable 8,189 5,159 Allowance for doubtful accounts (1,037 ) (712 ) Accounts receivable, net $ 55,379 $ 46,690 |
Components of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): March 31, December 31, 2018 2017 Prepaid expenses $ 17,076 $ 13,690 Inventory 229 198 Other current assets 6,813 7,624 Total prepaid expenses and other current assets $ 24,118 $ 21,512 |
Components of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): March 31, December 31, 2018 2017 Computer hardware and software $ 80,626 $ 74,555 Internal-use software development costs 20,867 18,217 Furniture and fixtures 6,314 6,293 Leasehold improvements 5,249 4,311 Total property and equipment 113,056 103,376 Less: accumulated depreciation and amortization (62,925 ) (60,078 ) Property and equipment, net $ 50,131 $ 43,298 |
Components of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): March 31, December 31, 2018 2017 Accrued compensation and benefits $ 16,401 $ 18,578 Accrued sales, use and telecom related taxes 13,366 11,828 Accrued marketing 9,943 7,020 Other accrued expenses 24,852 17,551 Total accrued liabilities $ 64,562 $ 54,977 |
Summary of Carrying Values of Intangible Assets | The carrying values of intangible assets are as follows (in thousands): March 31, 2018 December 31, 2017 Estimated Lives Cost Accumulated Amortization Acquired Intangibles, Net Cost Accumulated Amortization Acquired Intangibles, Net Customer relationships 2 to 5 years $ 22,822 $ 1,756 $ 21,066 $ 840 $ 840 $ - Developed technology 5 years 3,010 1,699 1,311 3,010 1,548 1,462 Total acquired intangible assets $ 25,832 $ 3,455 $ 22,377 $ 3,850 $ 2,388 $ 1,462 |
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): 2018 (remaining) $ 3,749 2019 4,998 2020 4,654 2021 4,396 2022 onwards 4,580 Total estimated amortization expense $ 22,377 |
Fair Value of Financial Instr23
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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): Balance at March 31, 2018 (Level 1) (Level 2) (Level 3) Cash equivalents: Money market funds $ 510,830 $ 510,830 $ — $ — Balance at December 31, 2017 (Level 1) (Level 2) (Level 3) Cash equivalents: Money market funds $ 110,299 $ 110,299 $ — $ — |
Customer Base Acquisition (Tabl
Customer Base Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of Fair Value of Assets Acquired | The following table summarizes the fair value of assets acquired as of the date of acquisition (in thousands): Fair Value Estimated Useful Life Customer relationships $ 21,982 5 years Transition Services Agreement 2,082 1 year Net assets acquired $ 24,064 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Net Carrying Amount of Liability Component and Equity Component of Notes | The net carrying amount of the liability component of the Notes was as follows (in thousands): March 31, 2018 Principal $ 460,000 Unamortized discount (99,859 ) Unamortized issuance cost (8,137 ) Net carrying amount $ 352,004 The net carrying amount of the equity component of the Notes was as follows (in thousands): March 31, 2018 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): March 31, 2018 Contractual interest expense $ - Amortization of debt discount 1,282 Amortization of debt issuance costs 88 Total interest expense related to the Notes $ 1,370 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Share-Based Compensation Expense Recognized to Statements of Operations | A summary of share-based compensation expense recognized in the Company’s condensed consolidated statements of operations is as follows (in thousands): Three Months Ended March 31, 2018 2017 Cost of revenues $ 1,010 $ 757 Research and development 3,094 1,859 Sales and marketing 5,041 3,525 General and administrative 4,122 2,794 Total share-based compensation expense $ 13,267 $ 8,935 |
Summary of Share-Based Compensation Expense by Award Type | A summary of share-based compensation expense by award type is as follows (in thousands): Three Months Ended March 31, 2018 2017 Options $ 1,128 $ 2,190 Employee stock purchase plan rights 735 461 Restricted stock units 11,404 6,284 Total share-based compensation expense $ 13,267 $ 8,935 |
Summary of Stock Option Activity Plans | A summary of option activity under all of the Company’s equity incentive plans at March 31, 2018 and changes during the period then ended is presented in the following table: Weighted- Number of Weighted- Average Aggregate Options Average Contractual Intrinsic Outstanding Exercise Price Term Value (in thousands) Per Share (in Years) (in thousands) Outstanding at December 31, 2017 5,286 $ 10.30 4.2 $ 201,480 Granted — — Exercised (387 ) 9.52 Canceled/Forfeited (6 ) 24.21 Outstanding at March 31, 2018 4,893 $ 10.35 3.9 $ 260,183 Vested and expected to vest as of March 31, 2018 4,841 $ 10.28 3.9 $ 257,637 Exercisable as of March 31, 2018 4,366 $ 9.62 3.9 $ 235,212 |
Weighted Average Grant Date Fair Value of Options Granted and Total Intrinsic Value of Options Exercised | The weighted average grant date fair value of options granted and the total intrinsic value of options exercised were as follows (in thousands, except weighted average grant date fair value): Three Months Ended March 31, 2018 2017 Weighted average grant date fair value per share $ — $ 8.87 Total intrinsic value of options exercised $ 19,962 $ 5,448 |
Weighted Average Assumptions Used to Fair Value of Stock Options Granted | The weighted-average assumptions used in the option pricing model in the periods presented were as follows: Three Months Ended March 31, 2018 2017 Expected term for employees (in years) — 4.4 Expected term for non-employees (in years) 3.5 5.2 Risk-free interest rate 2.4 % 1.8 % Expected volatility 41.6 % 44.0 % Expected dividend yield 0 % 0 % |
Summary of RSUs Activity | The 2013 Plan provides for the issuance of restricted stock units (“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 March 31, 2018 and changes during the period then ended is presented in the following table: Number of Weighted- RSUs Average Aggregate Outstanding Grant Date Fair Intrinsic Value (in thousands) Value Per Share (in thousands) Outstanding at December 31, 2017 4,281 $ 25.51 $ 207,197 Granted 141 62.95 Released (429 ) 21.27 Canceled/Forfeited (113 ) 25.83 Outstanding at March 31, 2018 3,880 $ 27.32 $ 246,356 |
Basic and Diluted Net Loss Pe27
Basic and Diluted Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 of common stock (in thousands, except per share data): Three Months Ended March 31, 2018 2017 As Adjusted Numerator Net loss $ (2,716 ) $ (2,237 ) Denominator Weighted-average common shares for basic and diluted net loss per share 78,341 74,682 Basic and diluted net loss per share $ (0.03 ) $ (0.03 ) |
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): Three Months Ended March 31, 2018 2017 Shares of common stock issuable under equity incentive awards outstanding 9,328 11,581 Potential common shares excluded from diluted net loss per share 9,328 11,581 |
Description of Business and S28
Description of Business and Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||
Deferred revenue | $ 33.7 | |
RingCentral Office Product | ||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||
Percentage of subscriptions | 86.10% | 82.90% |
Accounting Standards Update 2014-09 | ||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||
Deffered contract costs, expected amortization period of benefit | 5 years | |
Remaining performance obligation contract revenue not yet recognized | $ 424 | |
Remaining performance obligation revenue recognize in next twelve months | 269 | |
Remaining performance obligation revenue recognize in greater than next twelve months | $ 155 | |
Minimum | ||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||
Contractual arrangement subscriptions period | 1 month | |
Subscription contracts services termination period | 30 days | |
Minimum | Accounting Standards Update 2014-09 | ||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||
Remaining performance obligation, subscription term | 1 month | |
Maximum | ||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||
Contractual arrangement subscriptions period | 5 years | |
Subscription contracts services termination period | 60 days | |
Maximum | Accounting Standards Update 2014-09 | ||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||
Remaining performance obligation, subscription term | 5 years |
Description of Business and S29
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) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | ||
Total revenues | 100.00% | 100.00% |
North America | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenues | 95.90% | 97.10% |
Others | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenues | 4.10% | 2.90% |
Impact of Recent Accounting P30
Impact of Recent Accounting Pronouncements - Effect of Adoption of ASU on Condensed Consolidated Balance Sheet Line Items (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Accounts receivable, net | $ 55,379 | $ 46,690 |
Deferred sales commission costs | 16,649 | 15,424 |
Deferred sales commission costs, noncurrent | 40,140 | 37,871 |
Liabilities | ||
Deferred revenue | 68,037 | 62,917 |
Stockholders' equity | $ 275,866 | 228,346 |
Adoption of Topic 606 | As Reported | ||
Assets | ||
Accounts receivable, net | 45,339 | |
Liabilities | ||
Deferred revenue | 64,415 | |
Stockholders' equity | 172,202 | |
Adoption of Topic 606 | Adoption of Topic 606 | ||
Assets | ||
Accounts receivable, net | 1,351 | |
Deferred sales commission costs | 15,424 | |
Deferred sales commission costs, noncurrent | 37,871 | |
Liabilities | ||
Deferred revenue | (1,498) | |
Stockholders' equity | $ 56,144 |
Impact of Recent Accounting P31
Impact of Recent Accounting Pronouncements - Effect of Adoption of Topic 606 on Condensed Consolidated Statement of Operations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Software subscriptions | $ 136,960 | $ 104,130 |
Other | 13,383 | 8,104 |
Total revenues | 150,343 | 112,234 |
Gross profit | 114,669 | 84,928 |
Operating expenses | ||
Sales and marketing | 71,920 | 54,265 |
Operating loss | (1,351) | (2,229) |
Net loss | $ (2,716) | $ (2,237) |
Basic and diluted | $ (0.03) | $ (0.03) |
Weighted-average number of shares used in computing net loss per share | ||
Basic and diluted | 78,341 | 74,682 |
Adoption of Topic 606 | As Reported | ||
Revenues | ||
Software subscriptions | $ 103,687 | |
Other | 8,104 | |
Total revenues | 111,791 | |
Gross profit | 84,485 | |
Operating expenses | ||
Sales and marketing | 58,894 | |
Operating loss | (7,301) | |
Net loss | $ (7,309) | |
Basic and diluted | $ (0.10) | |
Weighted-average number of shares used in computing net loss per share | ||
Basic and diluted | 74,682 | |
Adoption of Topic 606 | Adoption of Topic 606 | ||
Revenues | ||
Software subscriptions | $ 443 | |
Total revenues | 443 | |
Gross profit | 443 | |
Operating expenses | ||
Sales and marketing | (4,629) | |
Operating loss | 5,072 | |
Net loss | $ 5,072 | |
Basic and diluted | $ 0.07 |
Impact of Recent Accounting P32
Impact of Recent Accounting Pronouncements - Effect of Adoption of Topic 606 on Condensed Consolidated Statement of Cash Flows (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (2,716) | $ (2,237) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Amortization of deferred sales commission costs | 3,984 | 2,597 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (9,243) | (1,594) |
Deferred sales commission costs | (7,226) | |
Deferred revenue | 5,120 | 3,989 |
Net cash provided by operating activities | $ 12,185 | 8,710 |
Adoption of Topic 606 | As Reported | ||
Cash flows from operating activities | ||
Net loss | (7,309) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,371) | |
Deferred revenue | 4,209 | |
Net cash provided by operating activities | 8,710 | |
Adoption of Topic 606 | Adoption of Topic 606 | ||
Cash flows from operating activities | ||
Net loss | 5,072 | |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Amortization of deferred sales commission costs | 2,597 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (223) | |
Deferred sales commission costs | (7,226) | |
Deferred revenue | $ (220) |
Other Revenue and Cost of Rev33
Other Revenue and Cost of Revenue - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Product revenues | $ 8 | $ 6.1 |
Product cost of revenues | $ 7.2 | $ 5.9 |
Financial Statement Component34
Financial Statement Components - Components of Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Cash And Cash Equivalents [Abstract] | ||
Cash | $ 44,133 | $ 70,893 |
Money market funds | 510,830 | 110,299 |
Total cash and cash equivalents | $ 554,963 | $ 181,192 |
Financial Statement Component35
Financial Statement Components - Components of Accounts Receivable, Net (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Accounts receivable | $ 48,227 | $ 42,243 |
Unbilled accounts receivable | 8,189 | 5,159 |
Allowance for doubtful accounts | (1,037) | (712) |
Accounts receivable, net | $ 55,379 | $ 46,690 |
Financial Statement Component36
Financial Statement Components - Components of Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid expenses | $ 17,076 | $ 13,690 |
Inventory | 229 | 198 |
Other current assets | 6,813 | 7,624 |
Total prepaid expenses and other current assets | $ 24,118 | $ 21,512 |
Financial Statement Component37
Financial Statement Components - Components of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 113,056 | $ 103,376 |
Less: accumulated depreciation and amortization | (62,925) | (60,078) |
Property and equipment, net | 50,131 | 43,298 |
Computer hardware and software | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 80,626 | 74,555 |
Internal-use software development costs | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 20,867 | 18,217 |
Furniture and fixtures | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 6,314 | 6,293 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 5,249 | $ 4,311 |
Financial Statement Component38
Financial Statement Components - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Finite Lived Intangible Assets [Line Items] | |||
Depreciation and amortization | $ 4,500,000 | $ 3,500,000 | |
Amortization expense of Intangible Assets | 1,100,000 | 300,000 | |
Deferred sales commission costs | 56,800,000 | $ 53,300,000 | |
Amortization of deferred sales commission costs | 3,984,000 | 2,597,000 | |
Impairment loss in relation to costs capitalized | $ 0 | $ 0 | |
Customer Relationships | |||
Finite Lived Intangible Assets [Line Items] | |||
Weighted average amortization periods | 4 years 9 months 18 days | ||
Customer relationships, acquired during period | $ 21,982,000 | ||
Developed Techonolgy | |||
Finite Lived Intangible Assets [Line Items] | |||
Weighted average amortization periods | 2 years 2 months 12 days |
Financial Statement Component39
Financial Statement Components - Components of Accrued Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Payables And Accruals [Abstract] | ||
Accrued compensation and benefits | $ 16,401 | $ 18,578 |
Accrued sales, use and telecom related taxes | 13,366 | 11,828 |
Accrued marketing | 9,943 | 7,020 |
Other accrued expenses | 24,852 | 17,551 |
Total accrued liabilities | $ 64,562 | $ 54,977 |
Financial Statement Component40
Financial Statement Components - Summary of Carrying Values of Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 25,832 | $ 3,850 |
Accumulated Amortization | 3,455 | 2,388 |
Acquired Intangibles, Net | $ 22,377 | 1,462 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Lives | 5 years | |
Cost | $ 22,822 | 840 |
Accumulated Amortization | 1,756 | $ 840 |
Acquired Intangibles, Net | $ 21,066 | |
Customer Relationships | Minimum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Lives | 2 years | 2 years |
Customer Relationships | Maximum | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Lives | 5 years | 5 years |
Developed Techonolgy | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated Lives | 5 years | 5 years |
Cost | $ 3,010 | $ 3,010 |
Accumulated Amortization | 1,699 | 1,548 |
Acquired Intangibles, Net | $ 1,311 | $ 1,462 |
Financial Statement Component41
Financial Statement Components - Summary of Estimated Amortization Expense for Acquired Intangible Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | ||
2018 (remaining) | $ 3,749 | |
2,019 | 4,998 | |
2,020 | 4,654 | |
2,021 | 4,396 | |
2022 onwards | 4,580 | |
Acquired Intangibles, Net | $ 22,377 | $ 1,462 |
Fair Value of Financial Instr42
Fair Value of Financial Instruments - Financial Assets Carried at Fair Value (Detail) - Fair Value, Measurements, Recurring - Money market funds - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Money market funds | $ 510,830 | $ 110,299 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Money market funds | $ 510,830 | $ 110,299 |
Fair Value of Financial Instr43
Fair Value of Financial Instruments - Additional Information (Detail) - Convertible Senior Notes Due 2023 $ in Millions | Mar. 31, 2018USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Debt instrument, interest rate | 0.00% |
Level 2 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value of convertible senior notes | $ 463.8 |
Debt instrument, interest rate | 0.00% |
Customer Base Acquisition - Add
Customer Base Acquisition - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 16, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Customer Relationships | |||
Business Acquisition [Line Items] | |||
Total consideration allocated between intangible assets | $ 21,982 | ||
Estimated Lives | 5 years | ||
TSA | |||
Business Acquisition [Line Items] | |||
Total consideration allocated between intangible assets | $ 2,100 | ||
Estimated Lives | 1 year | ||
Maximum | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Estimated Lives | 5 years | 5 years | |
Minimum | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Estimated Lives | 2 years | 2 years | |
RingCentral Office@Hand solution | |||
Business Acquisition [Line Items] | |||
Total purchase consideration | $ 24,100 | ||
Cash payments | $ 20,000 | 20,200 | |
Earn-out payments | $ 3,800 | ||
Customer base transition expected completion period | 1 year | ||
Period of transition services agreement | 1 year | ||
RingCentral Office@Hand solution | Maximum | |||
Business Acquisition [Line Items] | |||
Total purchase consideration | $ 26,000 | ||
Earn-out payments | $ 6,000 |
Customer Base Acquisition - Sum
Customer Base Acquisition - Summary of Fair Value of Assets Acquired (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Business Acquisition [Line Items] | |
Net assets acquired, Fair Value | $ 24,064 |
Customer Relationships | |
Business Acquisition [Line Items] | |
Fair Value | $ 21,982 |
Estimated Useful Life | 5 years |
Transition Services Agreement | |
Business Acquisition [Line Items] | |
Fair Value | $ 2,082 |
Estimated Useful Life | 1 year |
Convertible Senior Notes - Addi
Convertible Senior Notes - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2018USD ($)d$ / sharesshares | Mar. 01, 2018$ / shares | |
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 460,000,000 | $ 460,000,000 | |
Proceeds from issuance debt, net of discounts and issuance costs | $ 449,457,000 | ||
Descripition of convertible notes at option of holders | Prior to the close of business on the business day immediately preceding December 15, 2022, the Notes will be convertible only under the following circumstances: (1) during any calendar quarter commencing after June 30, 2018, and only during such calendar quarter, if the last reported sale price of the Class A Common Stock for at least 20 trading days (whether or not consecutive) in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is more than 130% of the conversion price on each applicable trading day; (2) during the five business days period after any five consecutive trading days period in which, for each trading day of that period, the trading price per $1,000 principal amount of Notes for such trading day was less than 98% of the product of the last reported sale price of the Class A Common Stock and the conversion rate on each such trading day; (3) upon the Company’s notice that it is redeeming any or all of the Notes, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. | ||
Net cost incurred in connection with transaction | $ 49,910,000 | ||
Repurchase of common stock value | $ 15,000,000 | ||
Class A common stock | |||
Debt Instrument [Line Items] | |||
Repurchase of common stock shares | shares | 239,425 | 239,425 | |
Repurchase of common stock value | $ 15,000,000 | ||
Shares issued, price per share | $ / shares | $ 62.65 | ||
Convertible Senior Notes Due 2023 | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 0.00% | 0.00% | |
Proceeds from issuance debt, net of discounts and issuance costs | $ 449,500,000 | ||
Conversion price per share | $ / shares | $ 81.45 | $ 81.45 | |
Carrying amount of equity component representing conversion option | $ 101,141,000 | $ 101,141,000 | |
Debt issuance costs attributed to liability component | $ 8,200,000 | ||
Convertible Senior Notes Due 2023 | Capped call | |||
Debt Instrument [Line Items] | |||
Initial strike price | $ / shares | $ 81.45 | ||
Initial cap price | $ / shares | 119.035 | 119.035 | |
Settlement, expiry date | Mar. 13, 2023 | ||
Net cost incurred in connection with transaction | $ 49,900,000 | ||
Convertible Senior Notes Due 2023 | Scenario Three | |||
Debt Instrument [Line Items] | |||
Number of trading days | d | 20 | ||
Number of consecutive trading days | d | 30 | ||
Percentage of last reported sale price to conversion price on each applicable trading day | 130.00% | ||
Debt redemption price percentage | 100.00% | ||
Convertible Senior Notes Due 2023 | Class A common stock | |||
Debt Instrument [Line Items] | |||
Principal amount of note convertible in to shares | $ 1,000 | ||
Debt conversion, converted instrument, shares issued | shares | 12.2782 | ||
Stock par value | $ / shares | $ 0.0001 | $ 0.0001 | |
Conversion price per share | $ / shares | $ 81.45 | $ 81.45 | |
Convertible Senior Notes Due 2023 | Class A common stock | Capped call | |||
Debt Instrument [Line Items] | |||
Option Indexed to Issuer's Equity, Shares | shares | 5,600,000 | ||
Convertible Senior Notes Due 2023 | Class A common stock | Scenario One | |||
Debt Instrument [Line Items] | |||
Number of trading days | d | 20 | ||
Number of consecutive trading days | d | 30 | ||
Percentage of last reported sale price to conversion price on each applicable trading day | 130.00% | ||
Convertible Senior Notes Due 2023 | Class A common stock | Scenario Two | |||
Debt Instrument [Line Items] | |||
Number of consecutive trading days | d | 5 | ||
Percentage of last reported sale price to conversion price on each applicable trading day | 98.00% | ||
Notes measurement business period | 5 days | ||
Convertible Senior Notes Due 2023 | Private Placement | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 400,000,000 | $ 400,000,000 | |
Convertible Senior Notes Due 2023 | Over-Allotment | |||
Debt Instrument [Line Items] | |||
Additional principal amount | $ 60,000,000 | $ 60,000,000 |
Convertible Senior Notes - Summ
Convertible Senior Notes - Summary of Net Carrying Amount of Liability Component of Notes (Detail) $ in Thousands | Mar. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
Aggregate principal amount | $ 460,000 |
Unamortized discount | (99,859) |
Unamortized issuance cost | (8,137) |
Net carrying amount | $ 352,004 |
Convertible Senior Notes - Su48
Convertible Senior Notes - Summary of Net Carrying Amount of Equity Component of Notes (Detail) - Convertible Senior Notes Due 2023 $ in Thousands | Mar. 31, 2018USD ($) |
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 - Sche
Convertible Senior Notes - Schedule of Interest Expense Recognized Related to Notes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Debt Instrument [Line Items] | ||
Total interest expense related to the Notes | $ 1,411 | $ 79 |
Convertible Senior Notes Due 2023 | ||
Debt Instrument [Line Items] | ||
Amortization of debt discount | 1,282 | |
Amortization of debt issuance costs | 88 | |
Total interest expense related to the Notes | $ 1,370 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Commitments And Contingencies Disclosure [Abstract] | ||
Long-term sales tax liability | $ 2.3 | $ 2.6 |
Current sales tax liability for non-contingent amounts | $ 9.8 | $ 9 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Share-Based Compensation Expense Recognized to Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 13,267 | $ 8,935 |
Cost of Revenues | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 1,010 | 757 |
Research and Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 3,094 | 1,859 |
Sales and Marketing | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 5,041 | 3,525 |
General and Administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 4,122 | $ 2,794 |
Share-Based Compensation - Su52
Share-Based Compensation - Summary of Share-Based Compensation Expense by Award Type (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense | $ 13,267 | $ 8,935 |
Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense | 1,128 | 2,190 |
Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense | 11,404 | 6,284 |
Employee Stock Purchase Plan Rights | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expense | $ 735 | $ 461 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)shares | |
2013 Employee stock purchase plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Available for future grants | shares | 3,500,243 |
Unrecognized share-based compensation expense, remaining weighted-average vesting periods | 1 month 6 days |
Eligible compensation under the Employee Stock Purchase Plan | 15.00% |
Purchase of maximum shares by employees under Employee Stock Purchase Plan | shares | 3,000 |
Unrecognized share-based compensation expense | $ | $ 0.3 |
Class A common stock | 2013 Employee stock purchase plan | Beginning of the Six Month Offering Period | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Purchase price of Employee Stock Purchase Plan as a percentage of fair value | 90.00% |
Class A common stock | 2013 Employee stock purchase plan | End of the Six Month Offering Period | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Purchase price of Employee Stock Purchase Plan as a percentage of fair value | 90.00% |
Employee Stock Option | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized share-based compensation expense | $ | $ 3 |
Unrecognized share-based compensation expense, remaining weighted-average vesting periods | 1 year 2 months 12 days |
Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized share-based compensation expense, remaining weighted-average vesting periods | 2 years 7 months 6 days |
Vesting period contractual term | 4 years |
Unrecognized share-based compensation expense | $ | $ 76.7 |
2013 Equity Incentive Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Available for future grants | shares | 14,271,990 |
Number of options granted | shares | 0 |
Key Employee Equity Bonus Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Estimated share-based compensation expense recognized | $ | $ 1.5 |
Share based compensation requisite service period recognition | 4 months 24 days |
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 | $ | $ 0.8 |
Number of shares issued | shares | 0 |
Share-Based Compensation - Su54
Share-Based Compensation - Summary of Stock Option Activity Plans (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Number of Options Outstanding | ||
Number of Options Outstanding, Beginning Balance | 5,286 | |
Number of Options Outstanding, Exercised | (387) | |
Number of Options Outstanding, Canceled/Forfeited | (6) | |
Number of Options Outstanding, Ending Balance | 4,893 | 5,286 |
Number of Options Outstanding, Vested and expected to vest | 4,841 | |
Number of Options Outstanding, Exercisable | 4,366 | |
Weighted-Average Exercise Price Per Share | ||
Weighted-Average Exercise Price Per Share, Beginning Balance | $ 10.30 | |
Weighted-Average Exercise Price Per Share, Exercised | 9.52 | |
Weighted-Average Exercise Price Per Share, Canceled/Forfeited | 24.21 | |
Weighted-Average Exercise Price Per Share, Ending Balance | 10.35 | $ 10.30 |
Weighted-Average Exercise Price Per Share, Vested and expected to vest | 10.28 | |
Weighted-Average Exercise Price Per Share, Exercisable | $ 9.62 | |
Weighted-Average Contractual Term | ||
Weighted-Average Contractual Term | 3 years 10 months 24 days | 4 years 2 months 12 days |
Weighted-Average Contractual Term, Vested and expected to vest | 3 years 10 months 24 days | |
Weighted-Average Contractual Term, Exercisable | 3 years 10 months 24 days | |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value, Outstanding | $ 260,183 | $ 201,480 |
Aggregate Intrinsic Value, Vested and expected to vest | 257,637 | |
Aggregate Intrinsic Value, Exercisable | $ 235,212 |
Share-Based Compensation - Weig
Share-Based Compensation - Weighted Average Grant Date Fair Value of Options Granted and Total Intrinsic Value of Options Exercised (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Weighted average grant date fair value per share | $ 8.87 | |
Total intrinsic value of options exercised | $ 19,962 | $ 5,448 |
Share-Based Compensation - We56
Share-Based Compensation - Weighted Average Assumptions Used to Fair Value of Stock Options Granted (Detail) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate | 2.40% | 1.80% |
Expected volatility | 41.60% | 44.00% |
Expected dividend yield | 0.00% | 0.00% |
Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 4 years 4 months 24 days | |
Non Employee Stock Option | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 3 years 6 months | 5 years 2 months 12 days |
Share-Based Compensation - Su57
Share-Based Compensation - Summary of RSUs Activity (Detail) - Restricted Stock Units - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of RSUs Outstanding, Beginning Balance | 4,281 | |
Number of RSUs Outstanding, Granted | 141 | |
Number of RSUs Outstanding, Released | (429) | |
Number of RSUs Outstanding, Canceled/Forfeited | (113) | |
Number of RSUs Outstanding, Ending Balance | 3,880 | |
Weighted-Average Grant Date Fair Value Per Share, Beginning Balance | $ 25.51 | |
Weighted-Average Grant Date Fair Value Per Share, Granted | 62.95 | |
Weighted-Average Grant Date Fair Value Per Share, Released | 21.27 | |
Weighted-Average Grant Date Fair Value Per Share, Canceled/Forfeited | 25.83 | |
Weighted-Average Grant Date Fair Value Per Share, Ending Balance | $ 27.32 | |
Aggregate Intrinsic Value, Outstanding | $ 246,356 | $ 207,197 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)SegmentCountry | Mar. 31, 2017 | Dec. 31, 2017USD ($)Country | |
Concentration Risk [Line Items] | |||
Number of reporting segment | Segment | 1 | ||
Percentage of total billings collected through credit cards | 69.00% | ||
Accounts receivable | $ | $ 55,379 | $ 46,690 | |
Accounts Receivable | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk | 20.00% | 17.00% | |
Non-US [Member] | Long-lived Assets | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of foreign countries representing more than ten percent | Country | 0 | 0 | |
Minimum | U.S. | Sales Revenue, Segment | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk | 90.00% | 90.00% | |
Minimum | U.S. | Long-lived Assets | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk | 90.00% | 85.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Provision (benefit) for income taxes | $ 27,000 | $ 51,000 |
Unrecognized tax benefits | $ 0 |
Basic and Diluted Net Loss Pe60
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 | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator | ||
Net loss | $ (2,716) | $ (2,237) |
Denominator | ||
Weighted-average common shares for basic and diluted net loss per share | 78,341 | 74,682 |
Basic and diluted net loss per share | $ (0.03) | $ (0.03) |
Basic and Diluted Net Loss Pe61
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 | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potential common shares excluded from diluted net loss per share | 9,328 | 11,581 |
Equity Incentive Awards | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potential common shares excluded from diluted net loss per share | 9,328 | 11,581 |
Basic and Diluted Net Loss Pe62
Basic and Diluted Net Loss Per Share - Additional Information (Detail) | Mar. 31, 2018$ / shares |
Convertible Senior Notes Due 2023 | |
Earnings Per Share [Line Items] | |
Conversion price per share | $ 81.45 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - Google Inc. - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Total payables to related party | $ 2.3 | $ 1.1 | |
Total expenses incurred from related party | $ 5.1 | $ 4 |