Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 07, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | HUBS | ||
Entity Registrant Name | HUBSPOT INC | ||
Entity Central Index Key | 1,404,655 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 37,858,197 | ||
Entity Public Float | $ 3,304,897,251 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 87,680 | $ 59,702 |
Short-term investments | 416,663 | 54,648 |
Accounts receivable—net of allowance for doubtful accounts of $638 and $617 at December 31, 2017 and 2016, respectively | 60,676 | 38,984 |
Deferred commission expense | 13,343 | 9,025 |
Restricted cash | 4,757 | 162 |
Prepaid hosting costs | 4,964 | 5,299 |
Prepaid expenses and other current assets | 14,418 | 8,433 |
Total current assets | 602,501 | 176,253 |
Long-term investments | 31,394 | 35,718 |
Property and equipment, net | 43,294 | 30,201 |
Capitalized software development costs, net | 8,760 | 6,523 |
Restricted cash | 347 | 321 |
Other assets | 4,617 | 950 |
Intangible assets, net | 6,312 | 16 |
Goodwill | 14,950 | 9,773 |
Total assets | 712,175 | 259,755 |
Current liabilities: | ||
Accounts payable | 4,657 | 4,350 |
Accrued compensation costs | 16,329 | 11,415 |
Other accrued expenses | 20,430 | 16,192 |
Deferred revenue | 136,880 | 95,426 |
Total current liabilities | 178,296 | 127,383 |
Deferred rent, net of current portion | 18,868 | 10,079 |
Deferred revenue, net of current portion | 2,277 | 1,171 |
Other long-term liabilities | 3,927 | 2,422 |
Convertible senior notes | 298,447 | |
Total liabilities | 501,815 | 141,055 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value—authorized, 500,000 shares; issued and outstanding, 37,503 and 35,784 at December 31, 2017 and 2016, respectively | 38 | 36 |
Additional paid-in capital | 496,461 | 365,444 |
Accumulated other comprehensive loss | (57) | (864) |
Accumulated deficit | (286,082) | (245,916) |
Total stockholders’ equity | 210,360 | 118,700 |
Total liabilities and stockholders’ equity | $ 712,175 | $ 259,755 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, net of allowance for doubtful accounts | $ 638 | $ 617 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 37,503,000 | 35,784,000 |
Common stock, shares outstanding | 37,503,000 | 35,784,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | |||
Subscription | $ 356,727 | $ 254,775 | $ 167,920 |
Professional services and other | 18,885 | 16,192 | 14,023 |
Total revenue | 375,612 | 270,967 | 181,943 |
Cost of Revenue: | |||
Subscription | 51,563 | 41,182 | 32,271 |
Professional services and other | 24,166 | 20,683 | 15,652 |
Total cost of revenue | 75,729 | 61,865 | 47,923 |
Gross profit | 299,883 | 209,102 | 134,020 |
Operating expenses: | |||
Research and development | 70,373 | 45,997 | 32,457 |
Sales and marketing | 212,859 | 162,647 | 112,629 |
General and administrative | 56,787 | 45,120 | 35,408 |
Total operating expenses | 340,019 | 253,764 | 180,494 |
Loss from operations | (40,136) | (44,662) | (46,474) |
Other (expense) income: | |||
Interest income | 3,837 | 854 | 390 |
Interest expense | (13,181) | (265) | (185) |
Other (expense) income | (559) | (956) | 628 |
Total other (expense) income | (9,903) | (367) | 833 |
Loss before income tax benefit (expense) | (50,039) | (45,029) | (45,641) |
Income tax benefit (expense) | 10,325 | (533) | (412) |
Net loss | $ (39,714) | $ (45,562) | $ (46,053) |
Net loss per common share, basic and diluted | $ (1.08) | $ (1.29) | $ (1.39) |
Weighted average common shares used in computing basic and diluted net loss per common share: | 36,827 | 35,197 | 33,222 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net loss | $ (39,714) | $ (45,562) | $ (46,053) |
Other comprehensive loss: | |||
Foreign currency translation adjustments | 968 | (172) | (272) |
Changes in unrealized (loss) gain on investments, net of income taxes of $0 in 2017, $71 in 2016, and $0 in 2015. | (161) | 113 | (388) |
Comprehensive loss | $ (38,907) | $ (45,621) | $ (46,713) |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Changes in unrealized (loss) gain on investments, income taxes | $ 0 | $ 71 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Secondary Public Offering [Member] | Common Stock [Member] | Common Stock [Member]Secondary Public Offering [Member] | Additional Paid-In Capital [Member] | Additional Paid-In Capital [Member]Secondary Public Offering [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] |
Beginning Balance, Amount at Dec. 31, 2014 | $ 110,699 | $ 32 | $ 265,113 | $ (145) | $ (154,301) | |||
Beginning Balance, Shares at Dec. 31, 2014 | 31,431 | |||||||
Issuance of common stock under stock plans, net of shares withheld for employee taxes | 2,253 | $ 1 | 2,252 | |||||
Issuance of common stock under stock plans, net of shares withheld for employee taxes, Shares | 1,910 | |||||||
Stock-based compensation | 21,800 | 21,800 | ||||||
Proceeds from secondary public offering, net of deferred offering costs | $ 33,669 | $ 1 | $ 33,668 | |||||
Proceeds from secondary public offering, net of deferred offering costs, Shares | 972 | |||||||
Unrealized gain (loss) on investments, net of income taxes | (388) | (388) | ||||||
Cumulative translation adjustment | (272) | (272) | ||||||
Net loss | (46,053) | (46,053) | ||||||
Ending Balance, Amount at Dec. 31, 2015 | 121,708 | $ 34 | 322,833 | (805) | (200,354) | |||
Ending Balance, Shares at Dec. 31, 2015 | 34,313 | |||||||
Issuance of common stock under stock plans, net of shares withheld for employee taxes | 8,747 | $ 2 | 8,745 | |||||
Issuance of common stock under stock plans, net of shares withheld for employee taxes, Shares | 1,471 | |||||||
Stock-based compensation | 33,866 | 33,866 | ||||||
Unrealized gain (loss) on investments, net of income taxes | 113 | 113 | ||||||
Cumulative translation adjustment | (172) | (172) | ||||||
Net loss | (45,562) | (45,562) | ||||||
Ending Balance, Amount at Dec. 31, 2016 | 118,700 | $ 36 | 365,444 | (864) | (245,916) | |||
Ending Balance, Shares at Dec. 31, 2016 | 35,784 | |||||||
Issuance of common stock under stock plans, net of shares withheld for employee taxes | 7,921 | $ 2 | 7,919 | |||||
Issuance of common stock under stock plans, net of shares withheld for employee taxes, Shares | 1,719 | |||||||
Stock-based compensation | 48,933 | 48,933 | ||||||
Unrealized gain (loss) on investments, net of income taxes | (161) | (161) | ||||||
Cumulative adjustment from adoption of stock compensation standard | 452 | (452) | ||||||
Cumulative translation adjustment | 968 | 968 | ||||||
Equity component of 2022 Notes (Note 7) | 73,713 | 73,713 | ||||||
Net loss | (39,714) | (39,714) | ||||||
Ending Balance, Amount at Dec. 31, 2017 | $ 210,360 | $ 38 | $ 496,461 | $ (57) | $ (286,082) | |||
Ending Balance, Shares at Dec. 31, 2017 | 37,503 |
Consolidated Statements of Sto8
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement Of Stockholders Equity [Abstract] | |||
Unrealized gain (loss) on investments, tax | $ 0 | $ 71 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Activities: | |||
Net loss | $ (39,714) | $ (45,562) | $ (46,053) |
Adjustments to reconcile net loss to net cash and cash equivalents provided by (used in) operating activities: | |||
Depreciation and amortization | 15,786 | 11,177 | 7,343 |
Stock-based compensation | 47,317 | 32,675 | 21,308 |
Deferred income tax benefit | (11,546) | (133) | (50) |
Amortization of debt discount and issuance costs | 12,366 | ||
(Accretion) amortization of bond discount premium | (1,576) | 647 | 671 |
Non-cash rent expense | 5,039 | 3,968 | 1,793 |
Unrealized currency translation | (139) | 81 | (329) |
Changes in assets and liabilities | |||
Accounts receivable | (20,180) | (14,099) | (11,249) |
Prepaid expenses and other assets | (5,588) | (6,126) | (3,373) |
Deferred commission expense | (4,004) | (453) | (2,119) |
Accounts payable | 1,100 | 983 | (508) |
Accrued expenses | 8,195 | 4,004 | 7,085 |
Deferred rent | 3,559 | (107) | 392 |
Deferred revenue | 38,999 | 32,311 | 24,666 |
Net cash and cash equivalents provided by (used in) operating activities | 49,614 | 19,366 | (423) |
Investing Activities: | |||
Purchases of investments | (890,009) | (52,131) | (113,615) |
Maturities and sales of investments | 533,660 | 50,840 | 23,018 |
Purchases of property and equipment | (20,276) | (15,789) | (8,427) |
Capitalization of software development costs | (7,071) | (5,749) | (4,314) |
Acquisition of a business and purchase of technology | (9,415) | (600) | |
Purchase of strategic investments | (3,500) | ||
Restricted cash | (4,586) | (128) | (166) |
Net cash and cash equivalents used in investing activities | (401,197) | (22,957) | (104,104) |
Financing Activities: | |||
Proceeds from common stock offerings, net of offering costs paid of $583 | 33,669 | ||
Employee taxes paid related to the net share settlement of stock-based awards | (4,419) | (2,368) | (8,607) |
Proceeds related to the issuance of common stock under stock plans | 13,086 | 11,584 | 12,083 |
Proceeds from issuance of convertible notes, net of issuance costs paid of $10,767 | 389,233 | ||
Purchase of note hedge related to convertible notes | (78,920) | ||
Proceeds from the issuance of warrants related to convertible notes, net of issuance costs paid of $200 | 58,880 | ||
Repayment of capital lease obligations | (1,054) | (743) | (206) |
Net cash and cash equivalents provided by financing activities | 376,806 | 8,473 | 36,939 |
Effect on exchange rate changes on cash and cash equivalents | 2,755 | (760) | (553) |
Net increase (decrease) in cash and cash equivalents | 27,978 | 4,122 | (68,141) |
Cash and cash equivalents, beginning of year | 59,702 | 55,580 | 123,721 |
Cash and cash equivalents, end of year | 87,680 | 59,702 | 55,580 |
Supplemental cash flow disclosure: | |||
Cash paid for interest | 762 | 174 | 185 |
Cash paid for income taxes | 855 | 954 | 215 |
Non-cash investing and financing activities: | |||
Property and equipment acquired under capital lease | 1,039 | 995 | 847 |
Capital expenditures incurred but not yet paid | 680 | 1,383 | $ 435 |
Asset retirement obligations | $ 575 | $ 561 |
Consolidated Statements of Ca10
Consolidated Statements of Cash Flows (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Convertible notes, issuance costs | $ 10,767 |
Common Stock [Member] | |
Offering and issuance costs paid | 583 |
Warrant [Member] | |
Offering and issuance costs paid | $ 200 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Operations | 1. Organization and Operations HubSpot, Inc. (the “Company”), was formed as a limited liability company in Delaware on April 4, 2005. The Company converted to a Delaware corporation on June 7, 2007. The Company provides a cloud-based inbound marketing and sales platform which features integrated applications to help businesses attract visitors to their websites, convert visitors into leads, close leads into customers and delight customers so they become promoters of those businesses. These integrated applications include social media, search engine optimization, blogging, website content management, marketing automation, email, sales productivity, CRM, analytics, and reporting. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation —The consolidated financial statements have been prepared in U.S. dollars, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. Use of Estimates —The preparation of consolidated financial statements in conformity with 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 financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Operating Segments —The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision makers (“CODMs”), which are the Company’s chief executive officer and chief operating officer, in deciding how to allocate resources and assess performance. The Company’s CODMs evaluate the Company’s financial information and resources and assess the performance of these resources on a consolidated basis. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. Loss Per Share — Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options to purchase common stock, restricted stock units (“RSUs”), Employee Stock Purchase Plan (“ESPP”), and the Conversion Option of the 2022 Notes (Note 7) are considered to be potential common stock equivalents. A reconciliation of the denominator used in the calculation of basic and diluted loss per share is as follows: Year Ended December 31, 2017 2016 2015 (in thousands, except per share amounts) Net loss $ (39,714 ) $ (45,562 ) $ (46,053 ) Weighted-average common shares outstanding—basic 36,827 35,197 33,222 Dilutive effect of share equivalents resulting from stock options, RSUs, ESPP and the Conversion Option of the 2022 Notes — — — Weighted-average common shares outstanding-diluted 36,827 35,197 33,222 Net loss per common share, basic and diluted $ (1.08 ) $ (1.29 ) $ (1.39 ) Additionally, since the Company incurred net losses for each of the periods presented, diluted net loss per share is the same as basic net loss per share. The Company’s outstanding stock options, RSUs, ESPP, and Conversion Option of the 2022 Notes were not included in the calculation of diluted net loss per share as the effect would be anti-dilutive. The following table contains all potentially dilutive common stock equivalents. Year Ended December 31, 2017 2016 2015 (in thousands) Options to purchase common shares 2,085 2,709 3,331 RSUs 2,315 2,264 1,703 ESPP 10 11 — The Company expects to settle the principal amount of the 2022 Notes in cash, and therefore, the Company uses the treasury stock method for calculating any potential dilutive effect of the Conversion Option on diluted net income per share, if applicable. The Conversion Option will have a dilutive impact on 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 the 2022 Notes of $94.77 per share. During the year ended December 31, 2017, the Company's weighted average common stock price was below the conversion price of the 2022 Notes. Cash and Cash Equivalents —The Company considers all highly liquid investments purchased with original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid investments with remaining maturities of three months or less at the date of purchase, consisting of money-market funds. Investments — Investments consist of corporate debt securities, U.S. government agency obligations, and U.S. Treasury securities. Securities having remaining maturities of more than three months at the date of purchase and less than one year from the date of the balance sheets are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheets. The Company classifies its debt investments with readily determinable market values as available-for-sale. These investments are classified as investments on the consolidated balance sheets and are carried at fair market value, with unrealized gains and losses considered to be temporary in nature reported as accumulated other comprehensive loss, a separate component of stockholders’ equity. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. Investments are considered to be impaired when a decline in fair value below cost basis is determined to be other-than-temporary. The Company periodically evaluates whether a decline in fair value below cost basis is other-than-temporary by considering available evidence regarding these investments including, among other factors: the duration of the period that, and extent to which, the fair value is less than cost basis; the financial health of, and business outlook for the issuer, including industry and sector performance and operational and financing cash flow factors; overall market conditions and trends and the Company’s intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Once a decline in fair value is determined to be other-than-temporary, a write-down is recorded and a new cost basis in the security is established. Strategic investments — Strategic investments consist of non-controlling equity investments in privately held companies. These investments without readily determinable fair values for which the Company does not have the ability to exercise significant influence are accounted for using the cost method of accounting. Under the cost method of accounting, the non-marketable securities are carried at cost and are adjusted only for other-than-temporary impairments, certain distributions and additional investments. Accounts Receivable and Allowance for Doubtful Accounts —Accounts receivable are carried at the original invoiced amount less an allowance for doubtful accounts based on the probability of future collection. When management becomes aware of circumstances that may decrease the likelihood of collection to a point where a receivable is no longer probable of being collected, it records an allowance against amounts due, which reduces the receivable to the amount that management reasonably believes will be collected. For all other customers, management determines the adequacy of the allowance based on historical loss patterns, the number of days that billings are past due and an evaluation of the potential risk of loss associated with specific accounts. To date, losses resulting from uncollected receivables have not exceeded management’s expectations. The following is a roll forward of the Company’s allowance for doubtful accounts (in thousands): Balance Beginning of Period Charged to Statement of Operations Deductions (1) Balance at End of Period Allowance for doubtful accounts Year ended December 31, 2017 $ 617 $ 3,353 $ (3,332 ) $ 638 Year ended December 31, 2016 $ 371 $ 2,517 $ (2,271 ) $ 617 Year ended December 31, 2015 $ 218 $ 1,367 $ (1,214 ) $ 371 (1) Deductions include actual accounts written-off, net of recoveries. Restricted Cash —The Company had restricted cash of $5.1 million at December 31, 2017 and $483 thousand at December 31, 2016 related to leased facilities. Property and Equipment —Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the related assets. Expenditures for maintenance and repairs are charged to expense as incurred, whereas major betterments are capitalized as additions to leasehold improvements. Depreciation is recorded over the following estimated useful lives: Estimated Useful Life Employee related computer equipment 2 – 3 years Computer equipment and purchased software 3 years Office equipment 5 years Furniture and fixtures 5 years Internal use software 5 years Leasehold improvements Lesser of lease Internal use software The Company capitalizes certain payroll and stock compensation costs incurred to develop functionality for certain of the Company’s internally built software platforms. The costs incurred during the preliminary stages of development are expensed as incurred. Once a piece of incremental functionality has reached the development stage certain internal costs are capitalized until the functionality is ready for its intended use. Internal use software is included within property and equipment on the balance sheet. The costs are generally amortized on a straight-line basis over an estimated useful life of approximately five years. Asset Retirement Obligations — The Company recognizes Assets Retirement Obligations (“AROs”) for any significant lease restoration obligation, if required by a lease agreement. The fair values of these AROs are recorded on a discounted basis, at the time the obligation is incurred, and accreted over time for the change in present value. Additionally, the Company capitalizes asset retirement costs by increasing the carrying amount of the related long-lived assets and depreciating these assets over their remaining useful life. The changes in these obligations during the year ending December 31, 2017 and December 31, 2016 are as follows: Year Ended December 31, 2017 2016 (in thousands) Beginning balance $ 591 $ — Additions 580 561 Accretion 46 30 Settlements (26 ) — Ending balance $ 1,191 $ 591 Impairment of Long-Lived Assets —Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable or that the useful lives of those assets are no longer appropriate. Management considers the following potential indicators of impairment of its long-lived assets (asset group): a substantial decrease in the Company’s stock price, a significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used, a significant adverse change in legal factors or in the business climate that could affect the value of the long-lived asset (asset group), an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group), and a current expectation that, more likely than not, a long lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. When such events occur, the Company compares the carrying amounts of the assets to their undiscounted expected future cash flows. If this comparison indicates that there may be an impairment, the amount of the impairment is calculated as the difference between the carrying value and fair value. For the years presented, the Company did not recognize an impairment charge. Intangible Assets — Intangible assets consist acquired technology and intellectual property. We record acquired intangible assets at fair value on the date of acquisition. and amortize such assets using the straight-line method over the expected useful life of the asset. The estimated useful life of acquired technology and intellectual property is two to three years. The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. If the estimate of an intangible asset’s remaining useful life is changed, we amortize the remaining carrying value of the intangible asset prospectively over the revised remaining useful life. Goodwill —Goodwill represents the excess of cost over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The Company has no other intangible assets with indefinite useful lives. Goodwill is not subject to amortization, but is monitored annually for impairment or more frequently if there are indicators of impairment. Management considers the following potential indicators of impairment: significant underperformance relative to historical or projected future operating results, significant changes in the Company’s use of acquired assets or the strategy of the Company’s overall business, significant negative industry or economic trends and a significant decline in the Company’s stock price for a sustained period. The Company performs its annual impairment test on November 30. Currently, the Company’s goodwill is evaluated at the entity level as it is determined there is only one reporting unit. The Company performs a two-step impairment test. In the first step, the fair value of each reporting unit is compared to its carrying amount. If the fair value exceeds the carrying value of the net assets assigned, goodwill is not considered impaired and the second step is not required. If the carrying value exceeds the fair value, then the second step of the impairment test is performed in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of the goodwill exceeds the fair value, then an impairment charge is recorded. On November 30, 2017, the fair value of the Company’s single reporting unit exceeded its carrying amount. Because the fair value of the Company’s single reporting unit was in excess of its carrying value and there were no indicators that the Company’s goodwill had become impaired since that date, there was no impairment as of November 30, 2017 or December 31, 2017. For the years ended December 31, 2017, 2016 and 2015, the Company did not recognize an impairment charge. Advertising Expense —The Company expenses advertising as incurred, which is included in sales and marketing expense in the accompanying consolidated statements of operations. The Company incurred $5.5 million of advertising expense in 2017, $4.2 million in 2016, and $4.9 million in 2015. Revenue Recognition —The Company primarily generates revenue from multiple-element arrangements, which typically include subscriptions to its online software solution and professional services which includes on-boarding and training services. The Company’s customers do not have the right to take possession of the online software solution. The Company recognizes revenue when all of the following have occurred: • persuasive evidence of an arrangement with the customer exists; • service has been or is being provided; • the fees are fixed or determinable; and • collectability of the fees is reasonably assured. The Company’s arrangements do not contain general rights of return. In order to treat elements in a multiple-element arrangement as separate units of accounting, the delivered elements must have standalone value and delivery of the undelivered element is probable and within control of the Company. The Company has determined that subscriptions for its online software solution have standalone value because, once a customer launches its initial site, the online software solution is fully functional and does not require any additional development, modification, or customization. Professional services consists primarily of on-boarding and web-based and in-person training, are not required to use the online software solution, and are determined to have stand-alone value from the related subscription services because they are sold separately by the Company and third parties. When multiple-element arrangements are separated into different units of accounting, the arrangement consideration is allocated to the identified separate units based on a relative selling price hierarchy. The estimated fair value of each element is determined based upon the following hierarchy: (1) vendor specific objective evidence (“VSOE”) of fair value, (2) third party evidence of selling price (“TPE”), or (3) the Company’s best estimate of selling price (“BESP”). There is not an available measure of TPE of selling price and, as such, arrangement consideration is allocated amongst multiple deliverable arrangements using VSOE, if VSOE can be established, and BESP if VSOE cannot be established. The Company establishes VSOE and BESP for each deliverable primarily considering the median or average of actual sales prices (stand-alone sales prices for VSOE) of each type of subscription and other professional services sold. The Company considers each type of subscription and service as well as pricing and geographic information when establishing VSOE and BESP. Arrangement consideration is allocated such that the revenue recognized does not exceed the fee subject to refund. Revenue from subscriptions is recognized ratably over the subscription period beginning on the date the Company’s subscription is made available to customers. Substantially all subscription contracts are one year or less. The Company recognizes revenue from on-boarding and training services as the services are provided. The Company pays its marketing and sales agency partners (“Partners”) a commission of the subscription sales price for sales to customers. The classification of the commission paid on the Company’s consolidated statements of operations depends on who is purchasing its subscription. In instances where the customer is purchasing the subscription, the Company is the primary obligor and records the commission paid to the Partners as sales and marketing expense. When the Partner purchases the subscription directly from the Company, the Company nets the consideration paid to the Partner against the associated revenue it recognizes, as in these instances the Company’s customer is the Partner and the Company’s remaining obligations are to the Partner. The Company does not believe that it receives a tangible benefit from the payment back to the Partner. Sales taxes collected from customers and remitted to government authorities are excluded from revenue. Amounts that have been invoiced are recorded in accounts receivable and deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Deferred revenue represents amounts billed for which revenue has not yet been recognized. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current deferred revenue and the remaining portion is recorded as long-term deferred revenue. Concentrations of Credit Risk and Significant Customers —Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, investments and accounts receivable. A significant portion of the Company’s cash and cash equivalents is held at four financial institutions that management believes to be of high credit quality. Although the Company deposits it cash and cash equivalents with multiple financial institutions, its deposits exceed federally insured limits. The Company’s investments consist of highly rated corporate debt securities and U.S. government agency obligations, and U.S. Treasury securities . The Company limits the amount of investments in any single issuer. The Company believes that, as of December 31, 2017, its concentration of credit risk related to investments was not significant. The Company has no significant off-balance sheet risk such as foreign exchange contracts, option contracts, or other hedging arrangements. The Company generally does not require collateral from its customers and generally requires payment 30 days from the invoice date. The Company maintains an allowance for doubtful accounts based on its assessment of the collectability of accounts receivable. Credit risk arising from accounts receivable is mitigated as a result of transacting with a large number of geographically dispersed customers spread across various industries. At December 31, 2017 and 2016 there were no customers that represented more than 10% of the net accounts receivable balance. There were no customers that individually exceeded 10% of the Company’s revenue in any of the periods presented. Foreign Currency —The functional currency of the Company’s foreign subsidiaries is the local currency. Assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rates in effect at the balance sheet dates; with the resulting translation adjustments directly recorded to a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at the weighted-average exchange rates during the period. Foreign currency transaction gains and losses are recorded in other income (expense). Research and Development —Research and development expenses include payroll, employee benefits and other expenses associated with product development. Capitalized Software Development Costs —Certain payroll and stock compensation costs incurred to develop functionality for the Company’s software and internally built software platforms, as well as certain upgrades and enhancements that are expected to result in increased functionality are capitalized. The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, certain internal costs are capitalized until the software is substantially complete and ready for its intended use. Capitalized software development costs are amortized on a straight-line basis over their estimated useful life of two to five years. Management evaluates the useful lives of these assets on a quarterly basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Capitalized software development costs, exclusive of those costs recorded within property and equipment, consisted of the following: December 31, 2017 December 31, (in thousands) Gross capitalized software development costs $ 33,360 $ 25,152 Accumulated amortization (24,600 ) (18,629 ) Capitalized software development costs, net $ 8,760 $ 6,523 The Company capitalized software development costs, exclusive of costs recorded within property and equipment, of $8.2 million in 2017, $6.4 million in 2016, and $4.5 million in 2015. Stock-based compensation costs included in capitalized software were $1.6 million in 2017, $1.2 million in 2016, and $492 thousand in 2015. Amortization of capitalized software development costs, exclusive of costs recorded within property and equipment, was $6.3 million in 2017, $5.1 million in 2016, and $4.6 million in 2015. Amortization expense is included in cost of revenue in the consolidated statements of operations. Income Taxes —Deferred tax assets and liabilities are recognized for the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities using tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accounting for uncertainty in income taxes recognized in the financial statements is in accordance with accounting authoritative guidance, which prescribes a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihood of being realized upon ultimate settlement. Undistributed foreign earnings of approximately $6.9 million have been taxed in 2017 due to a one-time transition tax on previously undistributed foreign earnings. For any future foreign earnings, the Company will generally be free of additional U.S. federal tax consequences due to a dividends received deduction implemented as part of the move to a territorial tax system for foreign subsidiary earnings. Stock-Based Compensation —The Company accounts for all stock options and awards granted to employees and nonemployees using a fair value method. Stock-based compensation is recognized as an expense and is measured at the fair value of the award. The measurement date for employee awards is generally the date of the grant. The measurement date for nonemployee awards is generally the date the awards vest. Stock-based compensation costs are recognized as expense over the requisite service period, which is generally the vesting period for awards, on a straight-line basis for awards with only a service condition, and using the graded-method for awards with both a performance and service that were granted prior to our IPO, and on a straight-line basis for the awards that were granted following our IPO, which only have service conditions. Recent Accounting Pronouncements — Recent accounting standards not included below are not expected to have a material impact on our consolidated financial position and results of operations. The Company adopted updated guidance related to certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in capital pools. As a result of the adoption, we recorded an increase to deferred tax assets with a corresponding increase to the valuation allowance of $30.4 million to recognize net operating loss carryforwards attributable to excess tax benefits on stock compensation that had not been previously recognized as additional paid-in capital. In addition, the Company changed its policy election to account for forfeitures as they occur rather than on an estimated basis. The change in the policy election related to forfeitures resulted in the Company reclassifying $452 thousand from additional paid-in capital to accumulative deficit for the net cumulative-effect adjustment in stock compensation expense related to prior periods. In January 2017, the Financial Accounting Standards Board (“FASB”) In January 2017, the FASB issued guidance simplifying the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test. Under current guidance, Step 2 of the goodwill impairment test requires entities to calculate the implied fair value of goodwill in the same manner as the amount of goodwill recognized in a business combination by assigning the fair value of a reporting unit to all of the assets and liabilities of the reporting unit. The carrying value in excess of the implied fair value is recognized as goodwill impairment. Under the new standard, goodwill impairment is recognized based on Step 1 of the current guidance, which calculates the carrying value in excess of the reporting unit’s fair value. The new standard is effective beginning in January 2020, with early adoption permitted. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements. In November 2016, the FASB issued guidance related to the presentation of restricted cash within the statement of cash flows. The guidance requires entities to show the changes in cash, cash equivalents, and restricted cash in the statement of cash flows. Entities will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows. As of December 31, 2017, we had $5.1 million in restricted cash. The new standard is effective beginning in the first quarter of 2018, with early adoption permitted. The impact of including restricted cash with cash and cash equivalents when reconciling the beginning-of-year and end-of-year total amounts presented on the consolidated statement of cash flows would increase net cash flows for the year ended December 31, 2017 by approximately $4.6 million. In February 2016, the FASB issued guidance that requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The guidance is effective in 2019 with early adoption permitted. The Company is currently evaluating the impact of this guidance on the consolidated financial statements. In June 2016, the FASB issued guidance that introduces a new methodology for accounting for credit losses on financial instruments, including available-for-sale debt securities. The guidance establishes a new "expected loss model" that requires entities to estimate current expected credit losses on financial instruments by using all practical and relevant information. Any expected credit losses are to be reflected as allowances rather than reductions in the amortized cost of available-for-sale debt securities. This guidance will be effective for the Company on January 1, 2020. The Company is currently evaluating the impact of this guidance on the consolidated financial statements. In May 2014, the FASB issued updated guidance and disclosure requirements for recognizing revenue. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also provides guidance on the recognition of costs related to obtaining customer contracts. The new standard is effective for the Company for its annual reporting periods beginning January 1, 2018. The Company will adopt the standard on January 1, 2018, using the modified retrospective method, which will result in a cumulative effect adjustment as of the date of adoption. The Company established a team that has assessed the impact of the standard including the timing of revenue recognition and the accounting for deferred commission costs and related balances. The Company has determined that there will be a change to the period over which sales commissions will be amortized to incorporate an estimated customer life and the amortization period over which internally developed new features and increased functionality for our software platform is recorded, in addition to the initial contract period. This will result in a longer amortization period for deferred sales commissions, which will reduce the expense in any one period compared to today. There will also be a change to the scope of capitalized sales commissions based on the definition of incremental costs of obtaining a contract. This will result in a higher capitalized commissions balance upon adoption. In addition, there will be a change in relation to the timing of revenue recognition for certain sales contracts, where free or discounted services are bundled with our subscription offering due primarily to the removal of the current limitation on contingent revenue. This will accelerate revenue recognition on these contracts when these services are provided up front as compared to today. The change in the period over which sales commissions will be amortized will have a material impact to the consolidated financial statements and disclosures. The change in the timing of revenue recognition for certain sales contracts, where free or discounted services are bundled with our subscription offering, will not have a material impact to the con |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 3. Fair Value of Financial Instruments The Company measures certain financial assets at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets and liabilities at December 31, 2017 and December 31, 2016: December 31, 2017 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents and investments: Money market funds $ 12,845 $ — $ — $ 12,845 Commercial paper — 5,867 — 5,867 Corporate bonds — 81,668 — 81,668 U.S. government agency obligations — 3,987 — 3,987 U.S. Treasury securities — 356,535 — 356,535 Restricted cash: Certificates of deposit — 5,105 — 5,105 Total $ 12,845 $ 453,162 $ — $ 466,007 December 31, 2016 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents and investments: Money market funds $ 32,260 $ — $ — $ 32,260 Commercial paper — 12,439 — 12,439 Corporate bonds — 66,947 — 66,947 U.S. government agency obligations — 10,980 — 10,980 Total $ 32,260 $ 90,366 $ — $ 122,626 The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents. The fair value of the Company’s investments in certain money market funds is their face value and such instruments are classified as Level 1 and are included in cash and cash equivalents on the consolidated balance sheets. At December 31, 2017 and December 31, 2016, our Level 2 securities were priced by pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available for these securities, use other observable inputs like market transactions involving identical or comparable securities. As of December 31, 2017, the fair value of the 2022 Notes (Note 7) was $460.0 million. The fair value was determined based on the quoted price of the 2022 Notes in an inactive market on the last trading day of the reporting period and has been classified as Level 2 within the fair value hierarchy. For certain other financial instruments, including accounts receivable, accounts payable, capital leases and other current liabilities, the carrying amounts approximate their fair value due to the relatively short maturity of these balances. Restricted cash is comprised of certificates of deposit related to landlord guarantees for our leased facilities. These restricted cash balances have been excluded from our cash and cash equivalents balance on our consolidated balance sheets. Strategic investments consist of non-controlling equity investments in privately held companies. These investments without readily determinable fair values for which the Company does not have the ability to exercise significant influence are accounted for using the cost method of accounting. Under the cost method of accounting, the non-marketable securities are carried at cost and are adjusted only for other-than-temporary impairments, certain distributions and additional investments. These investments are valued using significant unobservable inputs or data in an inactive market and the valuation requires the Company's judgment due to the absence of market prices and inherent lack of liquidity. The estimated fair value is based on quantitative and qualitative factors including, but not limited to, subsequent financing activities by the investee and projected discounted cash flows. Fair value is not estimated for non-marketable equity securities if there are no identified events or changes in circumstances that may have an effect on the fair value of the investment. The carrying value of the strategic investments was $3.5 million at December 31, 2017 and $0 at December 31, 2016. Strategic investments are included with other assets on the consolidated balance sheets. The following tables summarize the composition of our short- and long-term investments at December 31, 2017 and 2016: December 31, 2017 Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value (in thousands) Commercial paper $ 5,874 $ — $ (7 ) $ 5,867 Corporate bonds 81,947 — (279 ) 81,668 U.S. government agency obligations 4,000 — (13 ) 3,987 U.S. Treasury securities 356,671 8 (144 ) 356,535 Total $ 448,492 $ 8 $ (443 ) $ 448,057 December 31, 2016 Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value (in thousands) Commercial paper $ 12,446 $ — $ (7 ) $ 12,439 Corporate bonds 67,126 — (179 ) 66,947 U.S. government agency obligations 10,998 — (18 ) 10,980 Total $ 90,570 $ — $ (204 ) $ 90,366 For all of our securities for which the amortized cost basis was greater than the fair value at December 31, 2017 and 2016, the Company has concluded that there is no plan to sell the security nor is it more likely than not that the Company would be required to sell the security before its anticipated recovery. In making the determination as to whether the unrealized loss is other-than-temporary, the Company considered the length of time and extent the investment has been in an unrealized loss position, the financial condition and near-term prospects of the issuers, the issuers’ credit rating and the time to maturity. Contractual Maturities The contractual maturities of short-term and long-term investments held at December 31, 2017 and 2016 are as follows: December 31, 2017 December 31, 2016 Amortized Cost Basis Aggregate Fair Value Amortized Cost Basis Aggregate Fair Value (in thousands) Due within one year $ 416,932 $ 416,663 $ 54,694 $ 54,648 Due after 1 year through 2 years 31,560 31,394 35,876 35,718 Total $ 448,492 $ 448,057 $ 90,570 $ 90,366 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment as of December 31, 2017 and December 31, 2016 consists of the following: December 31. 2017 2016 (in thousands) Computer equipment & purchased software $ 4,571 $ 3,237 Employee computer equipment 4,260 1,534 Furniture and fixtures 11,083 8,174 Office equipment 2,620 2,326 Leasehold improvements 33,446 23,693 Equipment under capital lease 3,450 2,412 Internal-use software 2,892 1,301 Construction in progress 3,198 322 Total property and equipment 65,520 42,999 Less accumulated depreciation (22,226 ) (12,798 ) Property and equipment, net $ 43,294 $ 30,201 Depreciation and amortization expense was $9.4 million in 2017, $5.9 million in 2016, and $2.7 million in 2015. Accumulated depreciation for equipment under capital lease was $2.4 million as of December 31, 2017 and $1.2 million as of December 31, 2016. The Company capitalized asset retirement costs of $1.1 million at December 31, 2017 and $561 thousand at December 31, 2016 within leasehold improvements on the consolidated balance sheets, and recorded the related liability to other long-term liabilities. These costs represent future lease restoration obligations as required by Company’s leases. |
Business Acquisition and Purcha
Business Acquisition and Purchase of Technology | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Acquisition and Purchase of Technology | 5. Business Acquisition and Purchase of Technology On September 20, 2017, the Company acquired 100% of the equity interests of Motion AI, Inc., a Delaware technology corporation that allows users to scale one-to-one communications. The acquisition strengthens the Company’s position in the one-to-one communication space. Under the terms of the purchase agreement, the Company paid $9.0 million. The excess of the purchase consideration over the fair value of net tangible and identifiable intangible assets and liabilities acquired was recorded as goodwill and is primarily attributable to expanded market opportunities. The goodwill recognized is not deductible for U.S. income tax purposes. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed as part of the business combination were determined based on the replacement costs and present value of expected after-tax cash flows attributable to the business which were derived from management’s estimates and assumptions. The sole intangible asset acquired in the business combination was developed technology and the estimate of fair value of the developed technology was determined using a replacement cost approach and the useful life of the technology was estimated to be two years. The Company will begin amortizing the acquired technology when the technology is placed in use, which is expected to be 2018. The acquired technology will be amortized over its useful life of two year. The amortization expense will be recorded to cost of subscription revenue in the consolidated statements of operations. The preliminary allocation of the purchase price to the estimated fair value of acquired assets and assumed liabilities is $32 thousand of tangible assets, $6.0 million of acquired technology, and $5.2 million of goodwill. As part of the purchase price allocation, the Company recorded a deferred tax benefit of $2.2 million from a partial release of its deferred tax asset valuation allowance. The net deferred tax liability from this acquisition provided a source of additional income to support the realizability of the Company’s pre-existing deferred tax assets and as a result, the Company released a portion of its valuation allowance. Lastly, there was approximately $4.0 million of potential consideration that was not included in the purchase price allocation as it is not associated with pre-combination services. If earned, this will be recorded in the consolidated statement of operations over a period of approximately three years. The Company has included the operating results of the business combination in its consolidated financial statements since the date of the acquisition. The acquisition did not have a material effect on the revenue or earnings in the consolidated income statement for the reporting periods presented. The pro forma results of the Company as if the acquisition had taken place on the first day of 2016 were not materially different from the amounts reflected in the accompanying consolidated financial statements. During the third quarter of 2017 the Company also acquired technology for $400 thousand. The estimated useful life of the acquired technology is two years. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6. Intangible Assets Intangible assets as of December 31, 2017 and 2016 consist of the following: Weighted Average Remaining Useful Life December 31, 2017 2016 (in thousands) Acquired technology 19 Months $ 7,252 $ 852 Acquired intellectual property — 80 80 Accumulated amortization (1,020 ) (916 ) Total $ 6,312 $ 16 The estimated useful life of acquired technology and intellectual property is two to three years. The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Amortization expense related to intangible assets was $103 thousand in 2017, $84 thousand in 2016, and $96 thousand in 2015. Amortization expense of acquired technology is included in cost of subscription revenue in the consolidated statements of operations. Amortization expense of acquired intellectual property is included in sales and marketing expense in the consolidated statements of operations. Estimated future amortization expense for intangible assets, currently being amortized, as of December 31, 2017 is as follows: Years ended December 31, Amortization Expense (in thousands) 2018 200 2019 112 Total $ 312 The estimated amortization does not include the amortization of the $6.0 million of acquired technology from the acquisition of Motion AI, Inc. as the intangible asset has not been placed into service as of December 31, 2017. The Company expects that the acquired technology will be placed into service during 2018 and will be amortized through 2020. |
0.25% Convertible Senior Notes,
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant | 7. 0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant In May 2017, the Company issued $350 million aggregate principal amount of 0.25% convertible senior notes due June 1, 2022 (the “Maturity Date”) in a private offering and an additional $50 million aggregate principal amount of such notes pursuant to the exercise in full of the over-allotment options of the initial purchasers (the “2022 Notes”). The interest rates are fixed at 0.25% per annum and are payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2017. The total net proceeds from the debt offering, after deducting initial purchase discounts and debt issuance costs, were approximately $389.2 million. Each $1,000 principal amount of the 2022 Notes will initially be convertible into 10.5519 shares of the Company’s common stock (the “Conversion Option”), which is equivalent to an initial conversion price of approximately $94.77 per share, subject to adjustment upon the occurrence of specified events. The 2022 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding February 1, 2022, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2017, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “Measurement Period”) in which the trading price per $1,000 principal amount of notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On or after February 1, 2022 until the close of business on the second scheduled trading day immediately preceding the Maturity Date, holders may convert their 2022 Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. If the Company undergoes a fundamental change prior to the maturity date, holders of the notes may require the Company to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if specific corporate events occur prior to the applicable maturity date, the Company will increase the conversion rate for a holder who elects to convert their notes in connection with such a corporate event in certain circumstances. During the year ended December 31, 2017, the conditions allowing holders of the 2022 Notes to convert have not been met. The 2022 Notes are therefore not convertible during the year ended December 31, 2017 and are classified as long-term debt. In accounting for the issuance of the convertible senior notes, the Company separated the 2022 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 $106 million and was determined by deducting the fair value of the liability component from the par value of the 2022 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 (the "Debt Discount") is amortized to interest expense over the term of the 2022 Notes expense at an effective interest rate of 6.95% over the contractual term of the 2022 Notes. In accounting for the debt issuance costs of $10.8 million related to the 2022 Notes, the Company allocated the total amount incurred to the liability and equity components of the 2022 Notes based on their relative values. Issuance costs attributable to the liability component were $7.9 million and will be amortized to interest expense using the effective interest method over the contractual terms of the 2022 Notes. Issuance costs attributable to the equity component were $2.9 million and are netted with the equity component in stockholders’ equity. The net carrying amount of the liability component of the 2022 Notes is as follows: As of December 31, 2017 As of December 31, 2016 (in thousands) Principal $ 400,000 $ — Unamortized debt discount (94,498 ) — Unamortized issuance costs (7,055 ) — Net carrying amount $ 298,447 $ — The net carrying amount of the equity component of the 2022 Notes is as follows: As of December 31, 2017 As of December 31, 2016 (in thousands) Debt discount for conversion option $ 106,006 — Issuance costs (2,854 ) — Net carrying amount $ 103,152 $ — Interest expense related to the 2022 Notes is as follows: Year Ended December 31, 2017 2016 2015 (in thousands) Contractual interest expense $ 639 $ — $ — Amortization of debt discount 859 — — Amortization of issuance costs 11,507 — — Total interest expense $ 13,005 $ — $ — In connection with the offering of the 2022 Notes, the Company entered into convertible note hedge transactions (the “Convertible Note Hedges”) with certain counterparties in which the Company has the option to purchase (subject to adjustment for certain specified events) a total of approximately 4.2 million shares of the Company’s common stock at a price of approximately $94.77 per share. The Convertible Note Hedges will be settled in cash or shares, or any combination thereof, in accordance with the settlement method of the 2022 Notes in excess of the par amount, and are expected to settle upon conversion of the 2022 Notes. The total cost of the Convertible Note Hedges was $78.9 million. In addition, the Company sold warrants to certain bank counterparties whereby the holders of the warrants have the option to purchase initially (subject to adjustment for certain specified events) a total of approximately 4.2 million shares of the Company’s common stock at a price of $115.8 per share. The amount by which the settlement price exceeds the strike price may be settled in shares or cash at the Company’s election. The warrants are expected to settle three business days from each trading day commencing on September 1, 2022 and ending on the 79th trading day thereafter. The Company received $58.9 million in cash proceeds, net of issuance costs of $200 thousand, from the sale of these warrants. Taken together, the purchase of the Convertible Note Hedges and the sale of warrants are intended to offset any actual dilution from the conversion of these notes and to effectively increase the overall conversion price from $94.77 to $115.83 per share. As these transactions meet certain accounting criteria, the Convertible Note Hedges and warrants are recorded in stockholders’ equity and are not accounted for as derivatives. The net cost of $20 million incurred in connection with the Convertible Note Hedges and warrant transactions was recorded as a reduction to additional paid-in capital on the consolidated balance sheet. The difference between the Debt Discount and the total cost of the Convertible Note Hedges, and the difference between the calculation of the book and tax allocation of debt issuance costs between the liability and equity components of the 2022 Notes, resulted in a difference between the carrying amount and tax basis of the 2022 Notes. This taxable temporary difference resulted in the Company recognizing a $9.4 million deferred tax liability which was recorded as an adjustment to additional paid-in capital on the consolidated balance sheet. The creation of the deferred tax liability is recognized as a component of equity and represents a source of future taxable income which supports realization of a portion of the income tax benefit associated with the 2017 loss from operations. Therefore, the Company recorded a corresponding income tax benefit in its consolidated statement of operations in 2017. The net equity impact, included in additional paid-in capital, of the above components of the 2022 Notes is as follows: (in thousands) Conversion Option $ 106,006 Purchase of Convertible Note Hedges (78,920 ) Sales of warrants 59,080 Issuance costs (3,054 ) Deferred tax liability (9,399 ) Total $ 73,713 |
Geographic Data
Geographic Data | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Geographic Data | 8. Geographic Data As more fully described in the Company’s Summary of Significant Accounting Policies, the Company operates in one operating segment. Revenue and long-lived assets by geographic region, based on physical location of the operations recording the sale or the assets are as follows: Revenues by geographical region: Year Ended December 31, 2017 2016 2015 (In thousands) Americas $ 283,696 $ 219,422 $ 154,625 Europe 70,895 41,616 23,487 Asia Pacific 21,021 9,929 3,831 Total $ 375,612 $ 270,967 $ 181,943 Percentage of revenues generated outside of the Americas 24 % 19 % 15 % In 2017, revenue derived from customers outside the United States (international) was approximately 33% of total revenue. In 2016, revenue derived from customers outside the United States (international) was approximately 28% of total revenue. Total long-lived assets by geographical region: As of December 31, 2017 As of December 31, 2016 (In thousands) Americas $ 29,764 $ 23,205 Europe 11,257 4,716 Asia Pacific 2,273 2,280 Total long lived assets $ 43,294 $ 30,201 Percentage of long lived assets held outside of the Americas 31 % 23 % |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies The Company leases its office facilities under non-cancelable operating leases that expire at various dates through October 2027. Rent expense for non-cancellable operating leases with free rental periods or scheduled rent increases is recognized on a straight-line basis over the terms of the leases. Certain leases contain optional termination dates. The table below only includes payments up to the optional termination date. If the Company were to extended leases beyond the optional termination date the future commitments would increase by approximately $31.6 million. Improvement reimbursements from landlords of $7.3 million are being amortized on a straight-line basis into rent expense over the terms of the leases. The difference between required lease payments and rent expense has been recorded as deferred rent. Rent expense was $18.9 million in 2017, $13.8 million in 2016, and $7.4 million in 2015. Deferred rent was $19.0 million as of December 31, 2017 and $10.2 million as of December 31, 2016. Future minimum payments under all operating and capital lease agreements as of December 31, 2017, are as follows: Operating Capital (in thousands) 2018 $ 19,345 $ 771 2019 19,752 290 2020 19,997 30 2021 21,433 — 2022 21,729 — Thereafter 99,644 — Total $ 201,900 1,091 Less: Portion representing interest (34 ) Capital lease obligation $ 1,057 In January 2018, the Company entered into a new 18 year property lease in Dublin, Ireland, with an option to break the lease after 10 years, for approximately 13,000 square feet of space. The lease commenced in January 2018 and the Company will pay an aggregate of approximately $8.5 million in rent over the initial 10 year lease period. The Company has entered into certain non-cancelable arrangements (“Vendor Commitments”), which require the future purchase of goods or services. Future minimum payments under all Vendor Commitments as of December 31, 2017, are as follows: Product related obligations INBOUND event obligations (in thousands) 2018 15,852 475 2019 10,826 316 2020 1,500 316 2021 — 653 2022 — 653 Thereafter — 653 Total $ 28,178 $ 3,066 Legal Contingencies From time to time the Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on its business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | 10. Changes in Accumulated Other Comprehensive Loss The following table summarizes the changes in accumulated other comprehensive loss, which is reported as a component of stockholders’ equity, for the years ended December 31, 2017 and 2016: Cumulative Translation Adjustment Unrealized L on Investments Total (in thousands) Beginning balance at January 1, 2016 $ (417 ) $ (388 ) $ (805 ) Other comprehensive (loss) income before reclassifications (172 ) 113 (59 ) Amounts reclassified from accumulated other comprehensive loss — — — Ending balance at December 31, 2016 $ (589 ) $ (275 ) $ (864 ) Other comprehensive income (loss) before reclassifications 968 (161 ) 807 Amounts reclassified from accumulated other comprehensive loss — — — Ending balance at December 31, 2017 $ 379 $ (436 ) $ (57 ) |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders Equity And Stock Based Compensation [Abstract] | |
Stockholders' Equity and Stock-Based Compensation | 11. Stockholders’ Equity and Stock-Based Compensation Common Stock Reserved —As of December 31, 2017 and 2016, the Company has authorized 500 million shares of common stock. The number of shares of common stock reserved for the vesting of RSUs, exercise of common stock options, and ESPP are as follows (in thousands): December 31, 2017 December 31, 2016 RSUs 2,085 2,264 Common stock options 2,315 2,709 ESPP 10 11 4,410 4,984 Equity Incentive Plan —The Company’s 2007 Equity Incentive Plan (the “2007 Plan”) was terminated in connection with the IPO, and accordingly, no shares are available for issuance under the 2007 Plan. The 2007 Plan will continue to govern outstanding awards granted thereunder, The 2007 Plan provided for the grant of qualified incentive stock options and nonqualified stock options or other awards such as RSUs to the Company’s employees, officers, directors and outside consultants. The term of each option is fixed by the Company’s compensation committee and may not exceed 10 years from the date of grant. As of December 31, 2017, 1.7 million options to purchase common stock and 49 thousand RSUs remained outstanding under the 2007 Plan. On September 25, 2014, the Company’s board of directors adopted and the Company’s stockholders approved the 2014 Stock Option and Incentive Plan (the “2014 Plan”). The 2014 Plan became effective upon the closing of the Company’s IPO. The Company initially reserved 1,973,551 shares of its common stock, or the Initial Limit, for the issuance of awards under the 2014 Plan. The 2014 Plan provides that the number of shares reserved and available for issuance under the plan automatically increases each January 1, beginning on January 1, 2015, by 5% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31 or such lesser number of shares as determined by the compensation committee. This number is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. The term of each option is fixed by the Company’s compensation committee and may not exceed 10 years from the date of grant. As of December 31, 2017, 582 thousand options to purchase common stock and 2.0 million RSUs remained outstanding under the 2014 Plan. Equity Compensation Expense —The Company’s equity compensation expense is comprised of awards of options to purchase common stock, RSUs, and stock issued under the Company’s ESPP. The following two tables show stock compensation expense by award type and where the stock compensation expense is recorded in the Company’s consolidated statements of operations: Year Ended December 31, 2017 2016 2015 (in thousands) Options $ 4,948 $ 5,202 $ 6,349 ESPP 1,233 1,093 1,035 RSUs 41,136 26,380 13,924 Total stock-based compensation $ 47,317 $ 32,675 $ 21,308 2017 2016 2015 (in thousands) Cost of revenue, subscription $ 658 $ 512 $ 341 Cost of revenue, service 2,327 1,640 1,216 Research and development 12,816 8,828 6,327 Sales and marketing 19,016 13,352 7,658 General and administrative 12,500 8,343 5,766 Total stock-based compensation $ 47,317 $ 32,675 $ 21,308 Excluded from stock-based compensation expense is $1.6 million of capitalized software development costs in 2017, $1.2 million in 2016, and $492 thousand in 2015. Stock Options —The fair value of employee options is estimated on the date of each grant using the Black-Scholes option-pricing model with the following assumptions: Year Ended December 31, 2017 2016 2015 Risk-free interest rate (%) 1.74-2.09 1.38 - 1.41 1.36 - 1.53 Expected term (years) 5.18-6.21 5.08 - 6.21 6.18 - 6.22 Volatility (%) 39.4-43.7 38.0 - 41.0 43.0 - 51.6 Expected dividends — — — The weighted-average grant-date fair value of options granted was $24.56 per share in 2017, $16.97 per share in 2016, and $16.53 per share in 2015. The interest rate was based on the U.S. Treasury bond rate at the date of grant with a maturity approximately equal to the expected term. The expected term of options granted to employees was calculated using the simplified method, which represents the average of the contractual term of the option and the weighted-average vesting period of the option. The expected term of options granted to nonemployees is equal to the remaining contractual term as of the measurement date. Expected volatility for the Company’s common stock was based on an average of the historical volatility of a peer group of similar public companies. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. Forfeitures of share-based awards prior to vesting results in a reversal of previously recorded stock-compensation expense associated with such forfeited awards Prior to the Company’s IPO, the fair value of the Company’s common stock was determined by the Board of Directors at each award grant date based upon a variety of factors, including the results obtained from independent third-party valuations, the Company’s financial position and historical financial performance, the status of technological developments within the Company’s products, the composition and ability of the engineering and management team, an evaluation of benchmark of the Company’s competition, the climate in the marketplace, the illiquid nature of the common stock, arm’s-length sales of the Company’s capital stock (including redeemable convertible preferred stock), the effect of the rights and preferences of the preferred stockholders and the prospects of a liquidity event, among others. After the Company’s IPO, the fair value of the Company’s common stock is the closing price of the stock on the date of grant. The stock option activity for the year ended December 31, 2017 is as follows: Options (in thousands) Weighted- Average Exercise Price Weighted- Average Remaining Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding—January 1, 2017 2,709 $ 13.99 6.1 $ 89,411 Granted 180 56.67 Exercised (543 ) 16.07 Forfeited/expired (31 ) 24.12 Outstanding—December 31, 2017 2,315 16.69 5.3 $ 165,974 Options vested or expected to vest—December 31, 2017 2,315 $ 16.69 5.3 $ 165,974 Options exercisable—December 31, 2017 1,945 $ 11.39 4.8 $ 149,803 Total unrecognized compensation cost related to the nonvested options was $5.4 million at December 31, 2017. That cost is expected to be recognized over a weighted-average period of 2.2 years as of December 31, 2017. Restricted Stock Units —RSUs vest upon achievement of a service condition and, prior to six months after the Company’s IPO, a performance condition. As soon as practicable following each vesting date, the Company will issue to the holder of the RSUs the number of shares of common stock equal to the aggregate number of RSUs that have vested. Notwithstanding the foregoing, the Company may, in its sole discretion, in lieu of issuing shares of common stock to the holder of the RSUs, pay the holder an amount in cash equal to the fair market value of such shares of common stock. The service condition is a time-based condition met over a period of four years, with 25% met after one year, and then in equal monthly or quarterly installments over the succeeding three years, or over a period of four years, with equal quarterly installments over those four years. The performance condition was met six months following the Company’s IPO. Upon completion of the Company’s IPO the Company began recording stock-based compensation expense based on the grant-date fair value of the RSUs using the accelerated attribution method for RSUs granted prior to its IPO and using the straight-line method for RSUs granted following its IPO. The total stock-based compensation expense expected to be recorded over the remaining life of outstanding RSUs is approximately $102.3 million at December 31, 2017. That cost is expected to be recognized over a weighted-average period of 2.7 years as of December 31, 2017. As of December 31, 2017, there are 2.1 million RSUs expected to vest with an aggregate intrinsic value of $184.1million. The total fair value of RSUs vested was approximately $48.6 million in the year ended December 31, 2017, $24.0 million in the year ended December 31, 2016, and $11.9 million in the year ended December 31, 2015. The following table summarizes the activity related to RSUs for the year ended December 31, 2017: RSUs Outstanding Shares (in thousands) Weighted- Average Grant Date Fair Value Per Share Unvested and outstanding at January 1, 2017 2,264 $ 42.04 Granted 1,189 64.59 Vested (1,151 ) 42.24 Canceled (217 ) 48.13 Unvested and outstanding at December 31, 2017 2,085 $ 54.12 |
Employee Stock Purchase Plan
Employee Stock Purchase Plan | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Employee Stock Purchase Plan | 12. Employee Stock Purchase Plan On September 25, 2014, the Company’s board of directors adopted and the Company’s stockholders approved the 2014 Employee Share Purchase Plan (the “ESPP”). The ESPP became effective upon the closing of the Company’s IPO. The ESPP authorizes the issuance of up to a total of 1,409,988 shares of common stock to participating employees, and allows eligible employees to purchase shares of common stock at a 15% discount from the fair market value of the stock as determined on specific dates at six-month intervals. The offering periods generally start on the first trading day on or after January 1st and July 1st of each year. In December 2017, the Company’s board of directors amended and restated the ESPP. In conjunction with the amendment of the ESPP, the Company amended the offering periods, which will now commence on June 1 and November 1 of each year starting with the offering period beginning with offering period in June 2018. The following table summarizes the activity related to ESPP: Shares Issued (in thousands) Weighted- Average Purchase Price Total Cash Proceeds (in thousands) 2017 94 38.83 3,635 2016 70 38.98 2,721 2015 29 28.46 814 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes (Loss) income before provision for income taxes was as follows: Year Ended December 31, 2017 2016 2015 (in thousands) United States $ (54,894 ) $ (47,112 ) $ (47,911 ) Foreign 4,855 2,083 2,270 Total $ (50,039 ) $ (45,029 ) $ (45,641 ) The benefit (provision) for income taxes consists of the following: Year Ended December 31, 2017 2016 2015 (in thousands) Current income tax provision Federal $ — $ — $ — State (144 ) (95 ) (61 ) Foreign (1,077 ) (579 ) (401 ) Total current income tax provision (1,221 ) (674 ) (462 ) Deferred income tax benefit Federal 10,435 61 (10 ) State 977 — — Foreign 134 80 60 Total deferred income tax benefit 11,546 141 50 Total income tax benefit (provision) $ 10,325 $ (533 ) $ (412 ) The following reconciles the differences between income taxes computed at the federal statutory rate of 35% and the provision for income taxes: Year Ended December 31, 2017 2016 2015 (in thousands) Expected income tax benefit at the federal statutory rate $ 17,166 $ 15,761 $ 15,974 State taxes net of federal benefit 5,150 916 2,257 Stock-based compensation 10,939 (2,001 ) (1,685 ) Difference in foreign tax rates 988 415 482 U.S. tax credits 1,717 1,609 2,738 Convertible debt and acquisition 11,573 — — Federal rate change (49,123 ) — — Transition tax (1,063 ) Change in valuation allowance 13,988 (16,413 ) (19,421 ) Other (1,010 ) (820 ) (757 ) Income tax benefit (provision) $ 10,325 $ (533 ) $ (412 ) On December 22, 2017, the United States of America signed tax legislation (the “2017 Act”) which enacts a wide range of changes to the U.S. corporate income tax system. The 2017 Act reduces the U.S. corporate tax rate to 21% effective in 2018, broadens the tax base and changes rules for expensing and capitalizing business expenditures, establishes a territorial tax system for foreign earnings as well as a minimum tax on certain foreign earnings, provides for a one-time transition tax on previously undistributed foreign earnings, and introduces new rules for the treatment of certain export sales. At December 31, 2017, the Company has not completed the accounting for the tax effects of enactment of the 2017 Act; however, in certain cases, as described below, the Company has made a reasonable estimate of the effects on existing deferred tax balances and the one-time transition tax. For the items for which the Company was not able to determine a reasonable estimate, no net income tax expense or benefit was recognized. The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21% for U.S. federal tax purposes. However, the Company is still analyzing certain aspects of the Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of deferred tax balances was $49.1 million, which was offset by a corresponding reduction in the valuation allowance. The one-time transition tax is based on the Company’s total post-1986 earnings and profits (E&P) for which the Company previously deferred from U.S. income taxes. The one-time transition tax results in an estimated inclusion of $6.9 million of foreign earnings in U.S. taxable income, which reduces U.S. federal and state net operating losses generated during 2017. The Company has not yet completed the calculation of the total post-1986 foreign E&P for these foreign subsidiaries, and therefore this estimate may change as additional clarifying and interpretative technical guidance is issued related to the calculation of our one-time transition tax. The changes included in the 2017 Act are broad and complex. The final transition impacts of the 2017 Act may differ from the above estimates, possibly materially, due to, among other things, changes in interpretations of the 2017 Act, any legislative action to address questions that arise because of the 2017 Act, actions taken by U.S. state governments and taxing authorities in response to the 2017 Act, any changes in accounting standards for income taxes or related interpretations in response to the 2017 Act, or any updates or changes to estimates that have been utilized to calculate the transition impacts, including impacts from changes to current year earnings estimates and foreign exchange rates of foreign subsidiaries. The Securities Exchange Commission has issued rules that allow for a measurement period of up to one year after the enactment date of the 2017 Act to finalize the recording of the related tax impacts. The Company currently anticipate finalizing and recording any resulting adjustments during 2018. Deferred Tax Assets and Liabilities —Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities were as follows: Year Ended December 31, 2017 2016 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 87,521 $ 73,750 Research and investment credits 9,402 6,674 Accruals and reserves 6,627 6,699 Depreciation 911 744 Intangible assets — 215 Stock-based compensation 4,146 8,115 Total deferred tax assets $ 108,607 $ 96,197 Deferred tax liabilities: Intangible assets (1,273 ) — Convertible debt (5,664 ) — Capitalized costs (4,648 ) (4,843 ) Total deferred tax liabilities (11,585 ) (4,843 ) Valuation allowance (96,630 ) (91,132 ) Net deferred tax assets $ 392 $ 222 The Company reviews all available evidence to evaluate its recovery of deferred tax assets, including its recent history of accumulated losses in all tax jurisdictions over the most recent three years as well as its ability to generate income in future periods. The Company has provided a valuation allowance against its U.S. net deferred tax assets as it is more likely than not that these assets will not be realized given the nature of the assets and the likelihood of future utilization. The valuation allowance increased by $5.5 million in 2017, $16.5 million in 2016 and $19.4 million in 2015, primarily due to the increase in the U.S. net operating loss deferred tax asset. The Company does not expect any significant changes in its valuation allowance positions within the next 12 months. At December 31, 2017, undistributed foreign earnings of approximately $6.9 million have been taxed due to the one-time transition tax on previously undistributed foreign earnings required by the 2017 Act. For any future foreign earnings, the Company will generally be free of additional U.S. federal tax consequences due to a dividends received deduction implemented as part of the move to a territorial tax system for foreign subsidiary earnings. No provision has been made for additional deferred taxes related to any remaining historical outside basis differences in our non-U.S. subsidiaries, which could include U.S. state taxes and foreign withholding taxes. The Company continues to assess the impact of the 2017 Act on its indefinite reinvestment in these outside basis differences generated on or before December 31, 2017 and intends to finalize this assessment within the one-year measurement period as allowed for by the Securities and Exchange Commission. The Company had federal and state net operating loss carryforwards of $352.5 million and $224.7 million, respectively at December 31, 2017, which expire at various dates through 2037 The Company had federal research and development credit carryforwards of $5.8 million at December 31, 2017 that expire at various dates through 2037. The Company also has state research and investment credit carryforwards of $2.5 million and $756 thousand, respectively that expire at various dates through 2032. Under Section 382 of the Internal Revenue Code of 1986, as amended, substantial changes in the Company's ownership may limit the amount of net operating loss carryforwards that could be utilized annually in the future to offset taxable income. Specifically, this limitation may arise in the event of a cumulative change in ownership of the Company of more than 50% within a three-year period. Any such annual limitation may significantly reduce the utilization of net operating loss carryforwards before they expire. The Company performed an analysis through December 31, 2016, and determined any potential ownership change under Section 382 during the year would not have a material impact on the future utilization of US net operating losses and tax credits. There was no material change to this conclusion in 2017. However, future transactions in the Company's common stock could trigger an ownership change for purposes of Section 382, which could limit the amount of net operating loss carryforwards and other attributes that could be utilized annually in the future to offset taxable income, if any. Any such limitation, whether as the result of sales of common stock by our existing stockholders or sales of common stock by the Company, could have a material adverse effect on results of operations in future years. Uncertain Tax Positions —The Company accounts for uncertainty in income taxes using a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination by the tax authority, including resolutions of any related appeals or litigation processes, based on technical merit. If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The following summarizes activity related to unrecognized tax benefits: Year Ended December 31, 2017 2016 2015 (in thousands) Unrecognized benefit—beginning of the year $ 1,742 $ 673 $ 1,713 Gross increases—current period positions 983 1,069 171 Gross decrease—prior period positions — — (1,211 ) Unrecognized benefit—end of period $ 2,725 $ 1,742 $ 673 All of the gross unrecognized tax benefits represent a reduction to the research and development tax credit carryforward. The gross decrease to prior period positions, for the period ending December 31, 2015 is a result of the Company completing IRS documentation of all credits generated since inception. All of the unrecognized tax benefits decrease deferred tax assets with a corresponding decrease to the valuation allowance. None of the unrecognized tax benefits would affect the Company’s effective tax rate if recognized in the future. The Company has elected to recognize interest and penalties related to uncertain tax positions as a component of income tax expense. No interest or penalties have been recorded through December 31, 2017. The Company does not expect any significant change in its unrecognized tax benefits within the next 12 months. The Company files tax returns in the United States, Ireland, Australia, Singapore, Japan, Germany and various state jurisdictions. All of the Company’s tax years remain open to examination by major taxing jurisdictions to which the Company is subject, as carryforward attributes generated in past years may still be adjusted upon examination by the Internal Revenue Service or state and foreign tax authorities if they have or will be used in future periods. The Company is routinely examined by various taxing authorities. The IRS completed a federal income tax audit for the tax year 2013 during 2016 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plan | 14. Employee Benefit Plan In July 2008, the Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pretax basis, subject to legal limitations. Total contributions were $2.9 million in 2017, $2.1 million in 2016, and $1.2 million in 2015. |
Quarterly Financial Results (un
Quarterly Financial Results (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Results (unaudited) | 15. Quarterly Financial Results (unaudited) Fourth Quarter Third Quarter Second Quarter First Quarter (in thousands, except per share amounts) Year ended December 31, 2017 Revenue $ 106,541 $ 97,726 $ 89,093 $ 82,252 Cost of revenue 21,056 19,010 18,591 17,072 Gross profit 85,485 78,716 70,502 65,180 Net loss (11,535 ) (10,583 ) (9,521 ) (8,075 ) Basic and diluted net loss per share $ (0.31 ) $ (0.29 ) $ (0.26 ) $ (0.22 ) Year ended December 31, 2016 Revenue $ 76,444 $ 70,589 $ 64,974 $ 58,960 Cost of revenue 16,887 15,812 15,195 13,971 Gross profit 59,557 54,777 49,779 44,989 Net loss (13,829 ) (10,515 ) (11,064 ) (10,154 ) Basic and diluted net loss per share $ (0.39 ) $ (0.30 ) $ (0.32 ) $ (0.29 ) |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation —The consolidated financial statements have been prepared in U.S. dollars, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates —The preparation of consolidated financial statements in conformity with 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 financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Operating Segments | Operating Segments — The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision makers (“CODMs”), which are the Company’s chief executive officer and chief operating officer, in deciding how to allocate resources and assess performance. The Company’s CODMs evaluate the Company’s financial information and resources and assess the performance of these resources on a consolidated basis. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. |
Loss Per Share | Loss Per Share — Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options to purchase common stock, restricted stock units (“RSUs”), Employee Stock Purchase Plan (“ESPP”), and the Conversion Option of the 2022 Notes (Note 7) are considered to be potential common stock equivalents. A reconciliation of the denominator used in the calculation of basic and diluted loss per share is as follows: Year Ended December 31, 2017 2016 2015 (in thousands, except per share amounts) Net loss $ (39,714 ) $ (45,562 ) $ (46,053 ) Weighted-average common shares outstanding—basic 36,827 35,197 33,222 Dilutive effect of share equivalents resulting from stock options, RSUs, ESPP and the Conversion Option of the 2022 Notes — — — Weighted-average common shares outstanding-diluted 36,827 35,197 33,222 Net loss per common share, basic and diluted $ (1.08 ) $ (1.29 ) $ (1.39 ) Additionally, since the Company incurred net losses for each of the periods presented, diluted net loss per share is the same as basic net loss per share. The Company’s outstanding stock options, RSUs, ESPP, and Conversion Option of the 2022 Notes were not included in the calculation of diluted net loss per share as the effect would be anti-dilutive. The following table contains all potentially dilutive common stock equivalents. Year Ended December 31, 2017 2016 2015 (in thousands) Options to purchase common shares 2,085 2,709 3,331 RSUs 2,315 2,264 1,703 ESPP 10 11 — The Company expects to settle the principal amount of the 2022 Notes in cash, and therefore, the Company uses the treasury stock method for calculating any potential dilutive effect of the Conversion Option on diluted net income per share, if applicable. The Conversion Option will have a dilutive impact on 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 the 2022 Notes of $94.77 per share. During the year ended December 31, 2017, the Company's weighted average common stock price was below the conversion price of the 2022 Notes. |
Cash and Cash Equivalents | Cash and Cash Equivalents — The Company considers all highly liquid investments purchased with original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash held in bank deposit accounts and short-term, highly-liquid investments with remaining maturities of three months or less at the date of purchase, consisting of money-market funds. |
Investments | Investments — Investments consist of corporate debt securities, U.S. government agency obligations, and U.S. Treasury securities. Securities having remaining maturities of more than three months at the date of purchase and less than one year from the date of the balance sheets are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheets. The Company classifies its debt investments with readily determinable market values as available-for-sale. These investments are classified as investments on the consolidated balance sheets and are carried at fair market value, with unrealized gains and losses considered to be temporary in nature reported as accumulated other comprehensive loss, a separate component of stockholders’ equity. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. Investments are considered to be impaired when a decline in fair value below cost basis is determined to be other-than-temporary. The Company periodically evaluates whether a decline in fair value below cost basis is other-than-temporary by considering available evidence regarding these investments including, among other factors: the duration of the period that, and extent to which, the fair value is less than cost basis; the financial health of, and business outlook for the issuer, including industry and sector performance and operational and financing cash flow factors; overall market conditions and trends and the Company’s intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Once a decline in fair value is determined to be other-than-temporary, a write-down is recorded and a new cost basis in the security is established. |
Strategic Investments | Strategic investments — Strategic investments consist of non-controlling equity investments in privately held companies. These investments without readily determinable fair values for which the Company does not have the ability to exercise significant influence are accounted for using the cost method of accounting. Under the cost method of accounting, the non-marketable securities are carried at cost and are adjusted only for other-than-temporary impairments, certain distributions and additional investments. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts —Accounts receivable are carried at the original invoiced amount less an allowance for doubtful accounts based on the probability of future collection. When management becomes aware of circumstances that may decrease the likelihood of collection to a point where a receivable is no longer probable of being collected, it records an allowance against amounts due, which reduces the receivable to the amount that management reasonably believes will be collected. For all other customers, management determines the adequacy of the allowance based on historical loss patterns, the number of days that billings are past due and an evaluation of the potential risk of loss associated with specific accounts. To date, losses resulting from uncollected receivables have not exceeded management’s expectations. The following is a roll forward of the Company’s allowance for doubtful accounts (in thousands): Balance Beginning of Period Charged to Statement of Operations Deductions (1) Balance at End of Period Allowance for doubtful accounts Year ended December 31, 2017 $ 617 $ 3,353 $ (3,332 ) $ 638 Year ended December 31, 2016 $ 371 $ 2,517 $ (2,271 ) $ 617 Year ended December 31, 2015 $ 218 $ 1,367 $ (1,214 ) $ 371 (1) Deductions include actual accounts written-off, net of recoveries. |
Restricted Cash | Restricted Cash — The Company had restricted cash of $5.1 million at December 31, 2017 and $483 thousand at December 31, 2016 related to leased facilities. |
Property and Equipment | Property and Equipment —Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the related assets. Expenditures for maintenance and repairs are charged to expense as incurred, whereas major betterments are capitalized as additions to leasehold improvements. Depreciation is recorded over the following estimated useful lives: Estimated Useful Life Employee related computer equipment 2 – 3 years Computer equipment and purchased software 3 years Office equipment 5 years Furniture and fixtures 5 years Internal use software 5 years Leasehold improvements Lesser of lease |
Internal Use Software | Internal use software The Company capitalizes certain payroll and stock compensation costs incurred to develop functionality for certain of the Company’s internally built software platforms. The costs incurred during the preliminary stages of development are expensed as incurred. Once a piece of incremental functionality has reached the development stage certain internal costs are capitalized until the functionality is ready for its intended use. Internal use software is included within property and equipment on the balance sheet. The costs are generally amortized on a straight-line basis over an estimated useful life of approximately five years. |
Asset Retirement Obligations | Asset Retirement Obligations — The Company recognizes Assets Retirement Obligations (“AROs”) for any significant lease restoration obligation, if required by a lease agreement. The fair values of these AROs are recorded on a discounted basis, at the time the obligation is incurred, and accreted over time for the change in present value. Additionally, the Company capitalizes asset retirement costs by increasing the carrying amount of the related long-lived assets and depreciating these assets over their remaining useful life. The changes in these obligations during the year ending December 31, 2017 and December 31, 2016 are as follows: Year Ended December 31, 2017 2016 (in thousands) Beginning balance $ 591 $ — Additions 580 561 Accretion 46 30 Settlements (26 ) — Ending balance $ 1,191 $ 591 |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets — Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable or that the useful lives of those assets are no longer appropriate. Management considers the following potential indicators of impairment of its long-lived assets (asset group): a substantial decrease in the Company’s stock price, a significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used, a significant adverse change in legal factors or in the business climate that could affect the value of the long-lived asset (asset group), an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group), and a current expectation that, more likely than not, a long lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. When such events occur, the Company compares the carrying amounts of the assets to their undiscounted expected future cash flows. If this comparison indicates that there may be an impairment, the amount of the impairment is calculated as the difference between the carrying value and fair value. For the years presented, the Company did not recognize an impairment charge. Intangible Assets — Intangible assets consist acquired technology and intellectual property. We record acquired intangible assets at fair value on the date of acquisition. and amortize such assets using the straight-line method over the expected useful life of the asset. The estimated useful life of acquired technology and intellectual property is two to three years. The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. If the estimate of an intangible asset’s remaining useful life is changed, we amortize the remaining carrying value of the intangible asset prospectively over the revised remaining useful life. |
Intangible Assets | Intangible Assets — Intangible assets consist acquired technology and intellectual property. We record acquired intangible assets at fair value on the date of acquisition. and amortize such assets using the straight-line method over the expected useful life of the asset. The estimated useful life of acquired technology and intellectual property is two to three years. The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. If the estimate of an intangible asset’s remaining useful life is changed, we amortize the remaining carrying value of the intangible asset prospectively over the revised remaining useful life. |
Goodwill | Goodwill — Goodwill represents the excess of cost over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The Company has no other intangible assets with indefinite useful lives. Goodwill is not subject to amortization, but is monitored annually for impairment or more frequently if there are indicators of impairment. Management considers the following potential indicators of impairment: significant underperformance relative to historical or projected future operating results, significant changes in the Company’s use of acquired assets or the strategy of the Company’s overall business, significant negative industry or economic trends and a significant decline in the Company’s stock price for a sustained period. The Company performs its annual impairment test on November 30. Currently, the Company’s goodwill is evaluated at the entity level as it is determined there is only one reporting unit. The Company performs a two-step impairment test. In the first step, the fair value of each reporting unit is compared to its carrying amount. If the fair value exceeds the carrying value of the net assets assigned, goodwill is not considered impaired and the second step is not required. If the carrying value exceeds the fair value, then the second step of the impairment test is performed in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of the goodwill exceeds the fair value, then an impairment charge is recorded. On November 30, 2017, the fair value of the Company’s single reporting unit exceeded its carrying amount. Because the fair value of the Company’s single reporting unit was in excess of its carrying value and there were no indicators that the Company’s goodwill had become impaired since that date, there was no impairment as of November 30, 2017 or December 31, 2017. For the years ended December 31, 2017, 2016 and 2015, the Company did not recognize an impairment charge. |
Advertising Expense | Advertising Expense — The Company expenses advertising as incurred, which is included in sales and marketing expense in the accompanying consolidated statements of operations. The Company incurred $5.5 million of advertising expense in 2017, $4.2 million in 2016, and $4.9 million in 2015. |
Revenue Recognition | Revenue Recognition —The Company primarily generates revenue from multiple-element arrangements, which typically include subscriptions to its online software solution and professional services which includes on-boarding and training services. The Company’s customers do not have the right to take possession of the online software solution. The Company recognizes revenue when all of the following have occurred: • persuasive evidence of an arrangement with the customer exists; • service has been or is being provided; • the fees are fixed or determinable; and • collectability of the fees is reasonably assured. The Company’s arrangements do not contain general rights of return. In order to treat elements in a multiple-element arrangement as separate units of accounting, the delivered elements must have standalone value and delivery of the undelivered element is probable and within control of the Company. The Company has determined that subscriptions for its online software solution have standalone value because, once a customer launches its initial site, the online software solution is fully functional and does not require any additional development, modification, or customization. Professional services consists primarily of on-boarding and web-based and in-person training, are not required to use the online software solution, and are determined to have stand-alone value from the related subscription services because they are sold separately by the Company and third parties. When multiple-element arrangements are separated into different units of accounting, the arrangement consideration is allocated to the identified separate units based on a relative selling price hierarchy. The estimated fair value of each element is determined based upon the following hierarchy: (1) vendor specific objective evidence (“VSOE”) of fair value, (2) third party evidence of selling price (“TPE”), or (3) the Company’s best estimate of selling price (“BESP”). There is not an available measure of TPE of selling price and, as such, arrangement consideration is allocated amongst multiple deliverable arrangements using VSOE, if VSOE can be established, and BESP if VSOE cannot be established. The Company establishes VSOE and BESP for each deliverable primarily considering the median or average of actual sales prices (stand-alone sales prices for VSOE) of each type of subscription and other professional services sold. The Company considers each type of subscription and service as well as pricing and geographic information when establishing VSOE and BESP. Arrangement consideration is allocated such that the revenue recognized does not exceed the fee subject to refund. Revenue from subscriptions is recognized ratably over the subscription period beginning on the date the Company’s subscription is made available to customers. Substantially all subscription contracts are one year or less. The Company recognizes revenue from on-boarding and training services as the services are provided. The Company pays its marketing and sales agency partners (“Partners”) a commission of the subscription sales price for sales to customers. The classification of the commission paid on the Company’s consolidated statements of operations depends on who is purchasing its subscription. In instances where the customer is purchasing the subscription, the Company is the primary obligor and records the commission paid to the Partners as sales and marketing expense. When the Partner purchases the subscription directly from the Company, the Company nets the consideration paid to the Partner against the associated revenue it recognizes, as in these instances the Company’s customer is the Partner and the Company’s remaining obligations are to the Partner. The Company does not believe that it receives a tangible benefit from the payment back to the Partner. Sales taxes collected from customers and remitted to government authorities are excluded from revenue. Amounts that have been invoiced are recorded in accounts receivable and deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Deferred revenue represents amounts billed for which revenue has not yet been recognized. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current deferred revenue and the remaining portion is recorded as long-term deferred revenue. |
Concentrations of Credit Risk and Significant Customers | Concentrations of Credit Risk and Significant Customers —Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, investments and accounts receivable. A significant portion of the Company’s cash and cash equivalents is held at four financial institutions that management believes to be of high credit quality. Although the Company deposits it cash and cash equivalents with multiple financial institutions, its deposits exceed federally insured limits. The Company’s investments consist of highly rated corporate debt securities and U.S. government agency obligations, and U.S. Treasury securities . The Company limits the amount of investments in any single issuer. The Company believes that, as of December 31, 2017, its concentration of credit risk related to investments was not significant. The Company has no significant off-balance sheet risk such as foreign exchange contracts, option contracts, or other hedging arrangements. The Company generally does not require collateral from its customers and generally requires payment 30 days from the invoice date. The Company maintains an allowance for doubtful accounts based on its assessment of the collectability of accounts receivable. Credit risk arising from accounts receivable is mitigated as a result of transacting with a large number of geographically dispersed customers spread across various industries. At December 31, 2017 and 2016 there were no customers that represented more than 10% of the net accounts receivable balance. There were no customers that individually exceeded 10% of the Company’s revenue in any of the periods presented. |
Foreign Currency | Foreign Currency —The functional currency of the Company’s foreign subsidiaries is the local currency. Assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rates in effect at the balance sheet dates; with the resulting translation adjustments directly recorded to a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at the weighted-average exchange rates during the period. Foreign currency transaction gains and losses are recorded in other income (expense). |
Research and Development | Research and Development —Research and development expenses include payroll, employee benefits and other expenses associated with product development. |
Capitalized Software Development Costs | Capitalized Software Development Costs — Certain payroll and stock compensation costs incurred to develop functionality for the Company’s software and internally built software platforms, as well as certain upgrades and enhancements that are expected to result in increased functionality are capitalized. The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, certain internal costs are capitalized until the software is substantially complete and ready for its intended use. Capitalized software development costs are amortized on a straight-line basis over their estimated useful life of two to five years. Management evaluates the useful lives of these assets on a quarterly basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Capitalized software development costs, exclusive of those costs recorded within property and equipment, consisted of the following: December 31, 2017 December 31, (in thousands) Gross capitalized software development costs $ 33,360 $ 25,152 Accumulated amortization (24,600 ) (18,629 ) Capitalized software development costs, net $ 8,760 $ 6,523 The Company capitalized software development costs, exclusive of costs recorded within property and equipment, of $8.2 million in 2017, $6.4 million in 2016, and $4.5 million in 2015. Stock-based compensation costs included in capitalized software were $1.6 million in 2017, $1.2 million in 2016, and $492 thousand in 2015. Amortization of capitalized software development costs, exclusive of costs recorded within property and equipment, was $6.3 million in 2017, $5.1 million in 2016, and $4.6 million in 2015. Amortization expense is included in cost of revenue in the consolidated statements of operations. |
Income Taxes | Income Taxes —Deferred tax assets and liabilities are recognized for the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities using tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accounting for uncertainty in income taxes recognized in the financial statements is in accordance with accounting authoritative guidance, which prescribes a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihood of being realized upon ultimate settlement. Undistributed foreign earnings of approximately $6.9 million have been taxed in 2017 due to a one-time transition tax on previously undistributed foreign earnings. For any future foreign earnings, the Company will generally be free of additional U.S. federal tax consequences due to a dividends received deduction implemented as part of the move to a territorial tax system for foreign subsidiary earnings. |
Stock-Based Compensation | Stock-Based Compensation —The Company accounts for all stock options and awards granted to employees and nonemployees using a fair value method. Stock-based compensation is recognized as an expense and is measured at the fair value of the award. The measurement date for employee awards is generally the date of the grant. The measurement date for nonemployee awards is generally the date the awards vest. Stock-based compensation costs are recognized as expense over the requisite service period, which is generally the vesting period for awards, on a straight-line basis for awards with only a service condition, and using the graded-method for awards with both a performance and service that were granted prior to our IPO, and on a straight-line basis for the awards that were granted following our IPO, which only have service conditions. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements — Recent accounting standards not included below are not expected to have a material impact on our consolidated financial position and results of operations. The Company adopted updated guidance related to certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in capital pools. As a result of the adoption, we recorded an increase to deferred tax assets with a corresponding increase to the valuation allowance of $30.4 million to recognize net operating loss carryforwards attributable to excess tax benefits on stock compensation that had not been previously recognized as additional paid-in capital. In addition, the Company changed its policy election to account for forfeitures as they occur rather than on an estimated basis. The change in the policy election related to forfeitures resulted in the Company reclassifying $452 thousand from additional paid-in capital to accumulative deficit for the net cumulative-effect adjustment in stock compensation expense related to prior periods. In January 2017, the Financial Accounting Standards Board (“FASB”) In January 2017, the FASB issued guidance simplifying the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test. Under current guidance, Step 2 of the goodwill impairment test requires entities to calculate the implied fair value of goodwill in the same manner as the amount of goodwill recognized in a business combination by assigning the fair value of a reporting unit to all of the assets and liabilities of the reporting unit. The carrying value in excess of the implied fair value is recognized as goodwill impairment. Under the new standard, goodwill impairment is recognized based on Step 1 of the current guidance, which calculates the carrying value in excess of the reporting unit’s fair value. The new standard is effective beginning in January 2020, with early adoption permitted. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements. In November 2016, the FASB issued guidance related to the presentation of restricted cash within the statement of cash flows. The guidance requires entities to show the changes in cash, cash equivalents, and restricted cash in the statement of cash flows. Entities will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows. As of December 31, 2017, we had $5.1 million in restricted cash. The new standard is effective beginning in the first quarter of 2018, with early adoption permitted. The impact of including restricted cash with cash and cash equivalents when reconciling the beginning-of-year and end-of-year total amounts presented on the consolidated statement of cash flows would increase net cash flows for the year ended December 31, 2017 by approximately $4.6 million. In February 2016, the FASB issued guidance that requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The guidance is effective in 2019 with early adoption permitted. The Company is currently evaluating the impact of this guidance on the consolidated financial statements. In June 2016, the FASB issued guidance that introduces a new methodology for accounting for credit losses on financial instruments, including available-for-sale debt securities. The guidance establishes a new "expected loss model" that requires entities to estimate current expected credit losses on financial instruments by using all practical and relevant information. Any expected credit losses are to be reflected as allowances rather than reductions in the amortized cost of available-for-sale debt securities. This guidance will be effective for the Company on January 1, 2020. The Company is currently evaluating the impact of this guidance on the consolidated financial statements. In May 2014, the FASB issued updated guidance and disclosure requirements for recognizing revenue. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also provides guidance on the recognition of costs related to obtaining customer contracts. The new standard is effective for the Company for its annual reporting periods beginning January 1, 2018. The Company will adopt the standard on January 1, 2018, using the modified retrospective method, which will result in a cumulative effect adjustment as of the date of adoption. The Company established a team that has assessed the impact of the standard including the timing of revenue recognition and the accounting for deferred commission costs and related balances. The Company has determined that there will be a change to the period over which sales commissions will be amortized to incorporate an estimated customer life and the amortization period over which internally developed new features and increased functionality for our software platform is recorded, in addition to the initial contract period. This will result in a longer amortization period for deferred sales commissions, which will reduce the expense in any one period compared to today. There will also be a change to the scope of capitalized sales commissions based on the definition of incremental costs of obtaining a contract. This will result in a higher capitalized commissions balance upon adoption. In addition, there will be a change in relation to the timing of revenue recognition for certain sales contracts, where free or discounted services are bundled with our subscription offering due primarily to the removal of the current limitation on contingent revenue. This will accelerate revenue recognition on these contracts when these services are provided up front as compared to today. The change in the period over which sales commissions will be amortized will have a material impact to the consolidated financial statements and disclosures. The change in the timing of revenue recognition for certain sales contracts, where free or discounted services are bundled with our subscription offering, will not have a material impact to the consolidated financial statements and disclosures. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Reconciliation of Denominator Used in Calculation of Basic and Diluted Loss Per Share | A reconciliation of the denominator used in the calculation of basic and diluted loss per share is as follows: Year Ended December 31, 2017 2016 2015 (in thousands, except per share amounts) Net loss $ (39,714 ) $ (45,562 ) $ (46,053 ) Weighted-average common shares outstanding—basic 36,827 35,197 33,222 Dilutive effect of share equivalents resulting from stock options, RSUs, ESPP and the Conversion Option of the 2022 Notes — — — Weighted-average common shares outstanding-diluted 36,827 35,197 33,222 Net loss per common share, basic and diluted $ (1.08 ) $ (1.29 ) $ (1.39 ) |
Schedule of Share Totals with Potentially Dilutive Impact | . The following table contains all potentially dilutive common stock equivalents. Year Ended December 31, 2017 2016 2015 (in thousands) Options to purchase common shares 2,085 2,709 3,331 RSUs 2,315 2,264 1,703 ESPP 10 11 — |
Schedule of Roll Forward of Company's Allowance for Doubtful Accounts | The following is a roll forward of the Company’s allowance for doubtful accounts (in thousands): Balance Beginning of Period Charged to Statement of Operations Deductions (1) Balance at End of Period Allowance for doubtful accounts Year ended December 31, 2017 $ 617 $ 3,353 $ (3,332 ) $ 638 Year ended December 31, 2016 $ 371 $ 2,517 $ (2,271 ) $ 617 Year ended December 31, 2015 $ 218 $ 1,367 $ (1,214 ) $ 371 (1) Deductions include actual accounts written-off, net of recoveries. |
Schedule of Property Plant and Equipment Useful Life | Depreciation is recorded over the following estimated useful lives: Estimated Useful Life Employee related computer equipment 2 – 3 years Computer equipment and purchased software 3 years Office equipment 5 years Furniture and fixtures 5 years Internal use software 5 years Leasehold improvements Lesser of lease |
Schedule of Changes in Asset Retirement Obligations | The changes in these obligations during the year ending December 31, 2017 and December 31, 2016 are as follows: Year Ended December 31, 2017 2016 (in thousands) Beginning balance $ 591 $ — Additions 580 561 Accretion 46 30 Settlements (26 ) — Ending balance $ 1,191 $ 591 |
Summary of Capitalized Software Development Costs Exclusive of Costs Recorded within Property and Equipment | Capitalized software development costs, exclusive of those costs recorded within property and equipment, consisted of the following: December 31, 2017 December 31, (in thousands) Gross capitalized software development costs $ 33,360 $ 25,152 Accumulated amortization (24,600 ) (18,629 ) Capitalized software development costs, net $ 8,760 $ 6,523 |
Fair Value of Financial Instr28
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements of Financial Assets and Liabilities | The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets and liabilities at December 31, 2017 and December 31, 2016: December 31, 2017 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents and investments: Money market funds $ 12,845 $ — $ — $ 12,845 Commercial paper — 5,867 — 5,867 Corporate bonds — 81,668 — 81,668 U.S. government agency obligations — 3,987 — 3,987 U.S. Treasury securities — 356,535 — 356,535 Restricted cash: Certificates of deposit — 5,105 — 5,105 Total $ 12,845 $ 453,162 $ — $ 466,007 December 31, 2016 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents and investments: Money market funds $ 32,260 $ — $ — $ 32,260 Commercial paper — 12,439 — 12,439 Corporate bonds — 66,947 — 66,947 U.S. government agency obligations — 10,980 — 10,980 Total $ 32,260 $ 90,366 $ — $ 122,626 |
Summary of Composition of Short and Long Term Investments | The following tables summarize the composition of our short- and long-term investments at December 31, 2017 and 2016: December 31, 2017 Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value (in thousands) Commercial paper $ 5,874 $ — $ (7 ) $ 5,867 Corporate bonds 81,947 — (279 ) 81,668 U.S. government agency obligations 4,000 — (13 ) 3,987 U.S. Treasury securities 356,671 8 (144 ) 356,535 Total $ 448,492 $ 8 $ (443 ) $ 448,057 December 31, 2016 Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value (in thousands) Commercial paper $ 12,446 $ — $ (7 ) $ 12,439 Corporate bonds 67,126 — (179 ) 66,947 U.S. government agency obligations 10,998 — (18 ) 10,980 Total $ 90,570 $ — $ (204 ) $ 90,366 |
Summary of Contractual Maturities of Short and Long Term Investments | The contractual maturities of short-term and long-term investments held at December 31, 2017 and 2016 are as follows: December 31, 2017 December 31, 2016 Amortized Cost Basis Aggregate Fair Value Amortized Cost Basis Aggregate Fair Value (in thousands) Due within one year $ 416,932 $ 416,663 $ 54,694 $ 54,648 Due after 1 year through 2 years 31,560 31,394 35,876 35,718 Total $ 448,492 $ 448,057 $ 90,570 $ 90,366 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment as of December 31, 2017 and December 31, 2016 consists of the following: December 31. 2017 2016 (in thousands) Computer equipment & purchased software $ 4,571 $ 3,237 Employee computer equipment 4,260 1,534 Furniture and fixtures 11,083 8,174 Office equipment 2,620 2,326 Leasehold improvements 33,446 23,693 Equipment under capital lease 3,450 2,412 Internal-use software 2,892 1,301 Construction in progress 3,198 322 Total property and equipment 65,520 42,999 Less accumulated depreciation (22,226 ) (12,798 ) Property and equipment, net $ 43,294 $ 30,201 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets as of December 31, 2017 and 2016 consist of the following: Weighted Average Remaining Useful Life December 31, 2017 2016 (in thousands) Acquired technology 19 Months $ 7,252 $ 852 Acquired intellectual property — 80 80 Accumulated amortization (1,020 ) (916 ) Total $ 6,312 $ 16 |
Estimated Future Amortization Expense for Intangible Assets | Estimated future amortization expense for intangible assets, currently being amortized, as of December 31, 2017 is as follows: Years ended December 31, Amortization Expense (in thousands) 2018 200 2019 112 Total $ 312 |
0.25% Convertible Senior Note31
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Instrument [Line Items] | |
Schedule of Interest Expense | Interest expense related to the 2022 Notes is as follows: Year Ended December 31, 2017 2016 2015 (in thousands) Contractual interest expense $ 639 $ — $ — Amortization of debt discount 859 — — Amortization of issuance costs 11,507 — — Total interest expense $ 13,005 $ — $ — |
Schedule of Net Equity Impact, Included in Additional Paid-in Capital, of the Liability and Equity Components | The net equity impact, included in additional paid-in capital, of the above components of the 2022 Notes is as follows: (in thousands) Conversion Option $ 106,006 Purchase of Convertible Note Hedges (78,920 ) Sales of warrants 59,080 Issuance costs (3,054 ) Deferred tax liability (9,399 ) Total $ 73,713 |
0.25% Convertible Senior Notes Due 2022 as Liability Component [Member] | |
Debt Instrument [Line Items] | |
Schedule of Net Carrying Amount of Notes | The net carrying amount of the liability component of the 2022 Notes is as follows: As of December 31, 2017 As of December 31, 2016 (in thousands) Principal $ 400,000 $ — Unamortized debt discount (94,498 ) — Unamortized issuance costs (7,055 ) — Net carrying amount $ 298,447 $ — |
0.25% Convertible Senior Notes Due 2022 as Equity Component [Member] | |
Debt Instrument [Line Items] | |
Schedule of Net Carrying Amount of Notes | The net carrying amount of the equity component of the 2022 Notes is as follows: As of December 31, 2017 As of December 31, 2016 (in thousands) Debt discount for conversion option $ 106,006 — Issuance costs (2,854 ) — Net carrying amount $ 103,152 $ — |
Geographic Data (Tables)
Geographic Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Revenues by Geographical Region | Revenues by geographical region: Year Ended December 31, 2017 2016 2015 (In thousands) Americas $ 283,696 $ 219,422 $ 154,625 Europe 70,895 41,616 23,487 Asia Pacific 21,021 9,929 3,831 Total $ 375,612 $ 270,967 $ 181,943 Percentage of revenues generated outside of the Americas 24 % 19 % 15 % |
Long Lived Assets by Geographical Region | Total long-lived assets by geographical region: As of December 31, 2017 As of December 31, 2016 (In thousands) Americas $ 29,764 $ 23,205 Europe 11,257 4,716 Asia Pacific 2,273 2,280 Total long lived assets $ 43,294 $ 30,201 Percentage of long lived assets held outside of the Americas 31 % 23 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments | Future minimum payments under all operating and capital lease agreements as of December 31, 2017, are as follows: Operating Capital (in thousands) 2018 $ 19,345 $ 771 2019 19,752 290 2020 19,997 30 2021 21,433 — 2022 21,729 — Thereafter 99,644 — Total $ 201,900 1,091 Less: Portion representing interest (34 ) Capital lease obligation $ 1,057 |
Schedule of Future Minimum Payments Under Vendor Commitments | Future minimum payments under all Vendor Commitments as of December 31, 2017, are as follows: Product related obligations INBOUND event obligations (in thousands) 2018 15,852 475 2019 10,826 316 2020 1,500 316 2021 — 653 2022 — 653 Thereafter — 653 Total $ 28,178 $ 3,066 |
Changes in Accumulated Other 34
Changes in Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | The following table summarizes the changes in accumulated other comprehensive loss, which is reported as a component of stockholders’ equity, for the years ended December 31, 2017 and 2016: Cumulative Translation Adjustment Unrealized L on Investments Total (in thousands) Beginning balance at January 1, 2016 $ (417 ) $ (388 ) $ (805 ) Other comprehensive (loss) income before reclassifications (172 ) 113 (59 ) Amounts reclassified from accumulated other comprehensive loss — — — Ending balance at December 31, 2016 $ (589 ) $ (275 ) $ (864 ) Other comprehensive income (loss) before reclassifications 968 (161 ) 807 Amounts reclassified from accumulated other comprehensive loss — — — Ending balance at December 31, 2017 $ 379 $ (436 ) $ (57 ) |
Stockholders' Equity and Stoc35
Stockholders' Equity and Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders Equity And Stock Based Compensation [Abstract] | |
Summary of Number of Shares of Common Stock Reserved | The number of shares of common stock reserved for the vesting of RSUs, exercise of common stock options, and ESPP are as follows (in thousands): December 31, 2017 December 31, 2016 RSUs 2,085 2,264 Common stock options 2,315 2,709 ESPP 10 11 4,410 4,984 |
Schedule of Stock Compensation Expense by Award Type | The following two tables show stock compensation expense by award type and where the stock compensation expense is recorded in the Company’s consolidated statements of operations: Year Ended December 31, 2017 2016 2015 (in thousands) Options $ 4,948 $ 5,202 $ 6,349 ESPP 1,233 1,093 1,035 RSUs 41,136 26,380 13,924 Total stock-based compensation $ 47,317 $ 32,675 $ 21,308 |
Effect of Stock-Based Compensation on Income by Line Item | The following two tables show stock compensation expense by award type and where the stock compensation expense is recorded in the Company’s consolidated statements of operations: 2017 2016 2015 (in thousands) Cost of revenue, subscription $ 658 $ 512 $ 341 Cost of revenue, service 2,327 1,640 1,216 Research and development 12,816 8,828 6,327 Sales and marketing 19,016 13,352 7,658 General and administrative 12,500 8,343 5,766 Total stock-based compensation $ 47,317 $ 32,675 $ 21,308 |
Schedule of Assumptions Used for Estimation of Fair Value of Options Granted to Employees | Stock Options —The fair value of employee options is estimated on the date of each grant using the Black-Scholes option-pricing model with the following assumptions: Year Ended December 31, 2017 2016 2015 Risk-free interest rate (%) 1.74-2.09 1.38 - 1.41 1.36 - 1.53 Expected term (years) 5.18-6.21 5.08 - 6.21 6.18 - 6.22 Volatility (%) 39.4-43.7 38.0 - 41.0 43.0 - 51.6 Expected dividends — — — |
Summary of Stock Option Activity | The stock option activity for the year ended December 31, 2017 is as follows: Options (in thousands) Weighted- Average Exercise Price Weighted- Average Remaining Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding—January 1, 2017 2,709 $ 13.99 6.1 $ 89,411 Granted 180 56.67 Exercised (543 ) 16.07 Forfeited/expired (31 ) 24.12 Outstanding—December 31, 2017 2,315 16.69 5.3 $ 165,974 Options vested or expected to vest—December 31, 2017 2,315 $ 16.69 5.3 $ 165,974 Options exercisable—December 31, 2017 1,945 $ 11.39 4.8 $ 149,803 |
Summary of Activity Related to RSUs | The following table summarizes the activity related to RSUs for the year ended December 31, 2017: RSUs Outstanding Shares (in thousands) Weighted- Average Grant Date Fair Value Per Share Unvested and outstanding at January 1, 2017 2,264 $ 42.04 Granted 1,189 64.59 Vested (1,151 ) 42.24 Canceled (217 ) 48.13 Unvested and outstanding at December 31, 2017 2,085 $ 54.12 |
Employee Stock Purchase Plan (T
Employee Stock Purchase Plan (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Activity Related to Employee Stock Purchase Plan | The following table summarizes the activity related to ESPP: Shares Issued (in thousands) Weighted- Average Purchase Price Total Cash Proceeds (in thousands) 2017 94 38.83 3,635 2016 70 38.98 2,721 2015 29 28.46 814 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of (Loss) Income Before Provision for Income Taxes | (Loss) income before provision for income taxes was as follows: Year Ended December 31, 2017 2016 2015 (in thousands) United States $ (54,894 ) $ (47,112 ) $ (47,911 ) Foreign 4,855 2,083 2,270 Total $ (50,039 ) $ (45,029 ) $ (45,641 ) |
Components of Income Tax Benefit (Provision) | The benefit (provision) for income taxes consists of the following: Year Ended December 31, 2017 2016 2015 (in thousands) Current income tax provision Federal $ — $ — $ — State (144 ) (95 ) (61 ) Foreign (1,077 ) (579 ) (401 ) Total current income tax provision (1,221 ) (674 ) (462 ) Deferred income tax benefit Federal 10,435 61 (10 ) State 977 — — Foreign 134 80 60 Total deferred income tax benefit 11,546 141 50 Total income tax benefit (provision) $ 10,325 $ (533 ) $ (412 ) |
Schedule of Differences Between Income Taxes Computed at the Federal Statutory Rate and the Provision for Income Taxes | The following reconciles the differences between income taxes computed at the federal statutory rate of 35% and the provision for income taxes: Year Ended December 31, 2017 2016 2015 (in thousands) Expected income tax benefit at the federal statutory rate $ 17,166 $ 15,761 $ 15,974 State taxes net of federal benefit 5,150 916 2,257 Stock-based compensation 10,939 (2,001 ) (1,685 ) Difference in foreign tax rates 988 415 482 U.S. tax credits 1,717 1,609 2,738 Convertible debt and acquisition 11,573 — — Federal rate change (49,123 ) — — Transition tax (1,063 ) Change in valuation allowance 13,988 (16,413 ) (19,421 ) Other (1,010 ) (820 ) (757 ) Income tax benefit (provision) $ 10,325 $ (533 ) $ (412 ) |
Components of the Company's Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities were as follows: Year Ended December 31, 2017 2016 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 87,521 $ 73,750 Research and investment credits 9,402 6,674 Accruals and reserves 6,627 6,699 Depreciation 911 744 Intangible assets — 215 Stock-based compensation 4,146 8,115 Total deferred tax assets $ 108,607 $ 96,197 Deferred tax liabilities: Intangible assets (1,273 ) — Convertible debt (5,664 ) — Capitalized costs (4,648 ) (4,843 ) Total deferred tax liabilities (11,585 ) (4,843 ) Valuation allowance (96,630 ) (91,132 ) Net deferred tax assets $ 392 $ 222 |
Summary of Activity Related to Unrecognized Tax Benefits | The following summarizes activity related to unrecognized tax benefits: Year Ended December 31, 2017 2016 2015 (in thousands) Unrecognized benefit—beginning of the year $ 1,742 $ 673 $ 1,713 Gross increases—current period positions 983 1,069 171 Gross decrease—prior period positions — — (1,211 ) Unrecognized benefit—end of period $ 2,725 $ 1,742 $ 673 |
Quarterly Financial Results (38
Quarterly Financial Results (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Results | Fourth Quarter Third Quarter Second Quarter First Quarter (in thousands, except per share amounts) Year ended December 31, 2017 Revenue $ 106,541 $ 97,726 $ 89,093 $ 82,252 Cost of revenue 21,056 19,010 18,591 17,072 Gross profit 85,485 78,716 70,502 65,180 Net loss (11,535 ) (10,583 ) (9,521 ) (8,075 ) Basic and diluted net loss per share $ (0.31 ) $ (0.29 ) $ (0.26 ) $ (0.22 ) Year ended December 31, 2016 Revenue $ 76,444 $ 70,589 $ 64,974 $ 58,960 Cost of revenue 16,887 15,812 15,195 13,971 Gross profit 59,557 54,777 49,779 44,989 Net loss (13,829 ) (10,515 ) (11,064 ) (10,154 ) Basic and diluted net loss per share $ (0.39 ) $ (0.30 ) $ (0.32 ) $ (0.29 ) |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Additional Information (Detail) | Nov. 30, 2017USD ($) | Sep. 30, 2017 | Dec. 31, 2017USD ($)SegmentReporting_UnitCustomer$ / shares | Dec. 31, 2016USD ($)Customer | Dec. 31, 2015USD ($) |
Schedule Of Accounting Policies [Line Items] | |||||
Number of operating segment | Segment | 1 | ||||
Cash and cash equivalents, maturity description | Three months or less at the date of purchase, consisting of money-market funds. | ||||
Restricted cash related to leased facilities | $ 5,100,000 | $ 483,000 | |||
Impairment charges of long lived assets | 0 | ||||
Intangible assets with indefinite useful lives | $ 0 | ||||
Number of reporting unit | Reporting_Unit | 1 | ||||
Goodwill impairment | $ 0 | $ 0 | 0 | $ 0 | |
Advertising expense | $ 5,500,000 | 4,200,000 | 4,900,000 | ||
Revenue subscription contract period | One year or less | ||||
Off-balance sheet risk amount | $ 0 | ||||
Accounts receivable payment period | 30 days | ||||
Capitalized software development costs, exclusive of costs recorded within property and equipment | $ 8,200,000 | 6,400,000 | 4,500,000 | ||
Amortization of software development costs, exclusive of costs recorded within property and equipment | $ 6,300,000 | 5,100,000 | 4,600,000 | ||
Minimum percentage chances of tax benefit to be realized on examination | 50.00% | ||||
Undistributed foreign earnings | $ 6,900,000 | ||||
Increase in valuation allowance | 30,400,000 | ||||
Reclassification from additional paid in capital to accumulative deficit due to change in policy | 452,000 | ||||
Restricted cash | 5,100,000 | ||||
Net increase in cash flows | 27,978,000 | $ 4,122,000 | (68,141,000) | ||
Pro Forma [Member] | |||||
Schedule Of Accounting Policies [Line Items] | |||||
Net increase in cash flows | $ 4,600,000 | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||||
Schedule Of Accounting Policies [Line Items] | |||||
Number of customers represented more than 10% | Customer | 0 | 0 | |||
Revenue [Member] | Customer Concentration Risk [Member] | |||||
Schedule Of Accounting Policies [Line Items] | |||||
Number of customers represented more than 10% | Customer | 0 | 0 | |||
Acquired Technology [Member] | |||||
Schedule Of Accounting Policies [Line Items] | |||||
Estimated useful life | 2 years | ||||
Minimum [Member] | Acquired Technology [Member] | |||||
Schedule Of Accounting Policies [Line Items] | |||||
Estimated useful life | 2 years | ||||
Minimum [Member] | Acquired Intellectual Property [Member] | |||||
Schedule Of Accounting Policies [Line Items] | |||||
Estimated useful life | 2 years | ||||
Maximum [Member] | Acquired Technology [Member] | |||||
Schedule Of Accounting Policies [Line Items] | |||||
Estimated useful life | 3 years | ||||
Maximum [Member] | Acquired Intellectual Property [Member] | |||||
Schedule Of Accounting Policies [Line Items] | |||||
Estimated useful life | 3 years | ||||
Internal Use Software [Member] | |||||
Schedule Of Accounting Policies [Line Items] | |||||
Property and equipment, estimated useful life | 5 years | ||||
Stock-based compensation in capitalized software development costs | $ 1,600,000 | $ 1,200,000 | $ 492,000 | ||
Software Development Costs [Member] | Minimum [Member] | |||||
Schedule Of Accounting Policies [Line Items] | |||||
Property and equipment, estimated useful life | 2 years | ||||
Software Development Costs [Member] | Maximum [Member] | |||||
Schedule Of Accounting Policies [Line Items] | |||||
Property and equipment, estimated useful life | 5 years | ||||
0.25% Convertible Senior Notes Due 2022 as Liability Component [Member] | |||||
Schedule Of Accounting Policies [Line Items] | |||||
Common stock conversion price | $ / shares | $ 94.77 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Summary of Reconciliation of Denominator Used in Calculation of Basic and Diluted Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share Basic And Diluted [Abstract] | |||||||||||
Net loss | $ (11,535) | $ (10,583) | $ (9,521) | $ (8,075) | $ (13,829) | $ (10,515) | $ (11,064) | $ (10,154) | $ (39,714) | $ (45,562) | $ (46,053) |
Weighted-average common shares outstanding - basic | 36,827 | 35,197 | 33,222 | ||||||||
Weighted-average common shares outstanding - diluted | 36,827 | 35,197 | 33,222 | ||||||||
Net loss per common share, basic and diluted | $ (0.31) | $ (0.29) | $ (0.26) | $ (0.22) | $ (0.39) | $ (0.30) | $ (0.32) | $ (0.29) | $ (1.08) | $ (1.29) | $ (1.39) |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Schedule of Potentially Dilutive Common Stock Equivalents (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Options to Purchase Common Shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 2,085 | 2,709 | 3,331 |
RSUs [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 2,315 | 2,264 | 1,703 |
ESPP [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 10 | 11 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Schedule of Roll Forward of Company's Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | |||
Allowance for doubtful accounts, Beginning Balance | $ 617 | $ 371 | $ 218 |
Allowance for doubtful accounts, Charged to Statement of Operations | 3,353 | 2,517 | 1,367 |
Allowance for doubtful accounts, Deductions | (3,332) | (2,271) | (1,214) |
Allowance for doubtful accounts, Ending Balance | $ 638 | $ 617 | $ 371 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Schedule of Property Plant and Equipment Useful Life (Detail) | 12 Months Ended |
Dec. 31, 2017 | |
Employee Related Computer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Estimated Useful Life | 2 years |
Employee Related Computer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Estimated Useful Life | 3 years |
Computer Equipment and Purchased Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Estimated Useful Life | 3 years |
Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Estimated Useful Life | 5 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Estimated Useful Life | 5 years |
Internal Use Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Estimated Useful Life | 5 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Estimated Useful Life, Description | Lesser of lease term or useful life |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Schedule of Changes in Asset Retirement Obligations (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Beginning balance | $ 591 | |
Additions | 580 | $ 561 |
Accretion | 46 | 30 |
Settlements | (26) | |
Ending balance | $ 1,191 | $ 591 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Summary of Capitalized Software Development Costs Exclusive of Costs Recorded within Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Capitalized Computer Software Net [Abstract] | ||
Gross capitalized software development costs | $ 33,360 | $ 25,152 |
Accumulated amortization | (24,600) | (18,629) |
Capitalized software development costs, net | $ 8,760 | $ 6,523 |
Fair Value of Financial Instr46
Fair Value of Financial Instruments - Schedule of Fair Value of Financial Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of short and long term investments | $ 448,057 | $ 90,366 |
Fair value of financial assets | 466,007 | 122,626 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 12,845 | 32,260 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 453,162 | 90,366 |
Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of cash and cash equivalents | 12,845 | 32,260 |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of cash and cash equivalents | 12,845 | 32,260 |
Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of short and long term investments | 5,867 | 12,439 |
Commercial Paper [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of short and long term investments | 5,867 | 12,439 |
Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of short and long term investments | 81,668 | 66,947 |
Corporate Bonds [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of short and long term investments | 81,668 | 66,947 |
US Government Agency Obligations [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of short and long term investments | 3,987 | 10,980 |
US Government Agency Obligations [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of short and long term investments | 3,987 | $ 10,980 |
US Treasury Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of short and long term investments | 356,535 | |
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of short and long term investments | 356,535 | |
Certificates of Deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of restricted cash | 5,105 | |
Certificates of Deposit [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of restricted cash | $ 5,105 |
Fair Value of Financial Instr47
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Other assets | $ 4,617,000 | $ 950,000 |
Strategic Investments [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Other assets | 3,500,000 | $ 0 |
2022 Notes [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Fair value of notes | $ 460,000,000 |
Fair Value of Financial Instr48
Fair Value of Financial Instruments - Summary of Composition of Short and Long Term Investments (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 448,492 | $ 90,570 |
Unrealized Gains | 8 | |
Unrealized Losses | (443) | (204) |
Aggregate Fair Value | 448,057 | 90,366 |
Commercial Paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 5,874 | 12,446 |
Unrealized Losses | (7) | (7) |
Aggregate Fair Value | 5,867 | 12,439 |
Corporate Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 81,947 | 67,126 |
Unrealized Losses | (279) | (179) |
Aggregate Fair Value | 81,668 | 66,947 |
US Government Agency Obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 4,000 | 10,998 |
Unrealized Losses | (13) | (18) |
Aggregate Fair Value | 3,987 | $ 10,980 |
US Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 356,671 | |
Unrealized Gains | 8 | |
Unrealized Losses | (144) | |
Aggregate Fair Value | $ 356,535 |
Fair Value of Financial Instr49
Fair Value of Financial Instruments - Summary of Contractual Maturities of Short and Long Term Investments (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Amortized Cost Basis, Due within one year | $ 416,932 | $ 54,694 |
Amortized Cost Basis, Due after 1 year through 2 years | 31,560 | 35,876 |
Amortized Cost | 448,492 | 90,570 |
Aggregate Fair Value, Due within one year | 416,663 | 54,648 |
Aggregate Fair Value, Due after 1 year through 2 years | 31,394 | 35,718 |
Aggregate Fair Value, Total | $ 448,057 | $ 90,366 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 65,520 | $ 42,999 |
Less accumulated depreciation | (22,226) | (12,798) |
Property and equipment, net | 43,294 | 30,201 |
Computer Equipment and Purchased Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 4,571 | 3,237 |
Employee Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 4,260 | 1,534 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 11,083 | 8,174 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,620 | 2,326 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 33,446 | 23,693 |
Equipment under Capital Lease [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,450 | 2,412 |
Internal Use Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,892 | 1,301 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,198 | $ 322 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | $ 9,400 | $ 5,900 | $ 2,700 |
Accumulated depreciation | 2,400 | 1,200 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized asset retirement costs | $ 1,100 | $ 561 |
Business Acquisition and Purc52
Business Acquisition and Purchase of Technology - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 20, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||
Cash consideration paid | $ 9,415 | $ 600 | |||
Goodwill | $ 14,950 | $ 9,773 | |||
Deferred tax benefit from release of deferred tax asset valuation allowance | $ 2,200 | ||||
Acquired Technology [Member] | |||||
Business Acquisition [Line Items] | |||||
Estimated useful life | 2 years | ||||
Intangible assets acquired | $ 400 | ||||
Motion AI, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquisition effective date | Sep. 20, 2017 | ||||
Business acquisition, description of acquired entity | On September 20, 2017, the Company acquired 100% of the equity interests of Motion AI, Inc., a Delaware technology corporation that allows users to scale one-to-one communications. The acquisition strengthens the Company’s position in the one-to-one communication space. Under the terms of the purchase agreement, the Company paid $9.0 million. The excess of the purchase consideration over the fair value of net tangible and identifiable intangible assets and liabilities acquired was recorded as goodwill and is primarily attributable to expanded market opportunities. | ||||
Percentage of equity interests acquired | 100.00% | ||||
Cash consideration paid | $ 9,000 | ||||
Business combination, assets acquired and liabilities assumed, tangible assets | 32 | ||||
Goodwill | 5,200 | ||||
Business combination, potential consideration not included in purchase price allocation | $ 4,000 | ||||
Potential consideration recording period, if earned | 3 years | ||||
Motion AI, Inc. [Member] | Developed Technology [Member] | |||||
Business Acquisition [Line Items] | |||||
Estimated useful life | 2 years | ||||
Motion AI, Inc. [Member] | Acquired Technology [Member] | |||||
Business Acquisition [Line Items] | |||||
Estimated useful life | 2 years | ||||
Intangible assets acquired | $ 6,000 | $ 6,000 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (1,020) | $ (916) |
Intangible assets, net | 6,312 | 16 |
Acquired Technology [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets | $ 7,252 | 852 |
Acquired intangible assets, Weighted average remaining useful life | 19 months | |
Acquired Intellectual Property [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets | $ 80 | $ 80 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 20, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Finite Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 103 | $ 84 | $ 96 | ||
Acquired Technology [Member] | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 2 years | ||||
Intangible assets acquired | $ 400 | ||||
Acquired Technology [Member] | Motion AI, Inc. [Member] | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 2 years | ||||
Intangible assets acquired | $ 6,000 | $ 6,000 | |||
Acquired Technology [Member] | Minimum [Member] | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 2 years | ||||
Acquired Technology [Member] | Maximum [Member] | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 3 years | ||||
Acquired Intellectual Property [Member] | Minimum [Member] | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 2 years | ||||
Acquired Intellectual Property [Member] | Maximum [Member] | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Estimated useful life | 3 years |
Intangible Assets - Estimated F
Intangible Assets - Estimated Future Amortization Expense for Intangible Assets (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,018 | $ 200 |
2,019 | 112 |
Total | $ 312 |
0.25% Convertible Senior Note56
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant - Additional Information (Detail) $ / shares in Units, shares in Millions | 1 Months Ended | 12 Months Ended |
May 31, 2017USD ($)d$ / shares | Dec. 31, 2017USD ($)$ / sharesshares | |
Debt Instrument [Line Items] | ||
Net proceeds from the debt offering | $ 389,233,000 | |
Sales of warrants | 58,880,000 | |
Common Stock [Member] | ||
Debt Instrument [Line Items] | ||
Warrants, issuance costs | $ 583,000 | |
0.25% Convertible Senior Notes Due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, stated percentage | 0.25% | |
Debt instrument, maturity date | Jun. 1, 2022 | |
Debt instrument, payment terms | The interest rates are fixed at 0.25% per annum and are payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2017. | |
Net proceeds from the debt offering | $ 389,200,000 | |
Principal amount of each convertible note | $ 1,000 | |
Debt instrument, conversion ratio | 10.5519 | |
Debt instrument, conversion price per share | $ / shares | $ 94.77 | |
Debt Instrument, Redemption Price, Percentage | 100.00% | |
Debt Instrument, Redemption, Description | Repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. | |
Carrying amount of equity component | $ 106,000,000 | |
Debt instrument, effective interest rate | 6.95% | |
Debt issuance costs | $ 10,800,000 | |
Number of common shares to be repurchased under convertible note hedge transactions with certain counterparties | shares | 4.2 | |
Hedging option strike price per common stock | $ / shares | $ 94.77 | |
Cost of convertible note hedge transactions | $ 78,900,000 | |
Warrants expected to settle, description | The warrants are expected to settle three business days from each trading day commencing on September 1, 2022 and ending on the 79th trading day thereafter. | |
Settlement period of warrants excess price over strike price | 3 days | |
Warrants expected to settle, commencement date | Sep. 1, 2022 | |
Sales of warrants | $ 58,900,000 | |
Warrants, issuance costs | 200,000 | |
Convertible notes hedge and warrant transactions cost net | 20,000,000 | |
Deferred tax liability adjustment to additional paid-in capital | $ 9,400,000 | |
0.25% Convertible Senior Notes Due 2022 [Member] | Common Stock [Member] | ||
Debt Instrument [Line Items] | ||
Warrants holder’s option to purchase number of shares of company’s common stock | shares | 4.2 | |
Warrants exercise price per share | $ / shares | $ 115.8 | |
0.25% Convertible Senior Notes Due 2022 [Member] | Liability Component [Member] | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | 7,900,000 | |
0.25% Convertible Senior Notes Due 2022 [Member] | Equity Component [Member] | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | $ 2,900,000 | |
0.25% Convertible Senior Notes Due 2022 [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, conversion price per share | $ / shares | 94.77 | |
Percentage of closing price to trigger debt conversion | 130.00% | |
0.25% Convertible Senior Notes Due 2022 [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, conversion price per share | $ / shares | $ 115.83 | |
Percentage of closing price to trigger debt conversion | 98.00% | |
0.25% Convertible Senior Notes Due 2022 [Member] | Scenario 1 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, convertible, threshold trading days | d | 20 | |
Debt instrument, convertible, threshold consecutive trading days | d | 30 | |
0.25% Convertible Senior Notes Due 2022 [Member] | Scenario Two [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, convertible, threshold trading days | d | 5 | |
Debt instrument, convertible, threshold consecutive trading days | d | 5 | |
0.25% Convertible Senior Notes Due 2022 [Member] | Private Offering [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount of long term debt | $ 350,000,000 | |
0.25% Convertible Senior Notes Due 2022 [Member] | Over-Allotment Options [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount of long term debt | $ 50,000,000 |
0.25% Convertible Senior Note57
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant - Schedule of Net Carrying Amount of Liability Component (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |
Net carrying amount | $ 298,447 |
0.25% Convertible Senior Notes Due 2022 as Liability Component [Member] | |
Debt Instrument [Line Items] | |
Principal | 400,000 |
Unamortized debt discount | (94,498) |
Unamortized issuance costs | (7,055) |
Net carrying amount | $ 298,447 |
0.25% Convertible Senior Note58
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant - Schedule of Net Carrying Amount of Equity Component (Detail) - 0.25% Convertible Senior Notes Due 2022 as Equity Component [Member] $ in Thousands | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |
Debt discount for conversion option | $ 106,006 |
Issuance costs | (2,854) |
Net carrying amount | $ 103,152 |
0.25% Convertible Senior Note59
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant - Schedule of Interest Expense (Detail) - 0.25% Convertible Senior Notes Due 2022 [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | |
Contractual interest expense | $ 639 |
Amortization of debt discount | 859 |
Amortization of issuance costs | 11,507 |
Total interest expense | $ 13,005 |
0.25% Convertible Senior Note60
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant - Schedule of Net Equity Impact, Included in Additional Paid-in Capital, of the Liability and Equity Components (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | |
Total | $ 73,713 |
0.25% Convertible Senior Notes Due 2022 as Net Equity Impact [Member] | |
Debt Instrument [Line Items] | |
Conversion Option | 106,006 |
Purchase of Convertible Note Hedges | (78,920) |
Sales of warrants | 59,080 |
Issuance costs | (3,054) |
Deferred tax liability | (9,399) |
Total | $ 73,713 |
Geographic Data - Additional In
Geographic Data - Additional Information (Detail) - Segment | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Number of operating segment | 1 | |
Revenue [Member] | Outside Of United States [Member] | Geographic Concentration Risk [Member] | ||
Segment Reporting Information [Line Items] | ||
Concentration risk, percentage | 33.00% | 28.00% |
Geographic Data - Revenues by G
Geographic Data - Revenues by Geographical Region (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Total Revenues | $ 106,541 | $ 97,726 | $ 89,093 | $ 82,252 | $ 76,444 | $ 70,589 | $ 64,974 | $ 58,960 | $ 375,612 | $ 270,967 | $ 181,943 |
Americas [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total Revenues | 283,696 | 219,422 | 154,625 | ||||||||
Europe [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total Revenues | 70,895 | 41,616 | 23,487 | ||||||||
Asia Pacific [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total Revenues | $ 21,021 | $ 9,929 | $ 3,831 | ||||||||
Revenue [Member] | Outside Of Americas [Member] | Geographic Concentration Risk [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Percentage of revenues generated outside of the Americas | 24.00% | 19.00% | 15.00% |
Geographic Data - Long Lived As
Geographic Data - Long Lived Assets by Geographical Region (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Total long lived assets | $ 43,294 | $ 30,201 |
Americas [Member] | ||
Segment Reporting Information [Line Items] | ||
Total long lived assets | 29,764 | 23,205 |
Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Total long lived assets | 11,257 | 4,716 |
Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Total long lived assets | $ 2,273 | $ 2,280 |
Outside Of Americas [Member] | Assets Total [Member] | Geographic Concentration Risk [Member] | ||
Segment Reporting Information [Line Items] | ||
Percentage of long lived assets held outside of the Americas | 31.00% | 23.00% |
Commitments and Contingencies-
Commitments and Contingencies- Additional Information (Detail) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2018USD ($)ft² | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Operating And Capital Leased Assets [Line Items] | ||||
Increase in future lease commitments | $ 31,600 | |||
Improvement reimbursements from landlords | 7,300 | |||
Rent expense | 18,900 | $ 13,800 | $ 7,400 | |
Deferred rent, net of current portion | 19,000 | $ 10,200 | ||
Rent payable | $ 201,900 | |||
Subsequent Event [Member] | Lease Commencement, January 2018 [Member] | ||||
Operating And Capital Leased Assets [Line Items] | ||||
Lease agreement period | 18 years | |||
Renewal term | 10 years | |||
Square feet of property leased | ft² | 13,000 | |||
Lease commencement date | 2018-01 | |||
Rent payable | $ 8,500 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Payments (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Capital Leases, 2018 | $ 771 |
Capital Leases, 2019 | 290 |
Capital Leases, 2020 | 30 |
Capital Leases, Total | 1,091 |
Less: Portion representing interest | (34) |
Capital lease obligation | 1,057 |
Operating, 2018 | 19,345 |
Operating, 2019 | 19,752 |
Operating, 2020 | 19,997 |
Operating, 2021 | 21,433 |
Operating, 2022 | 21,729 |
Operating, Thereafter | 99,644 |
Operating, Total | $ 201,900 |
Commitments and Contingencies66
Commitments and Contingencies - Schedule of Future Minimum Payments Under Vendor Commitments (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Product Related Obligations [Member] | |
Long Term Purchase Commitment [Line Items] | |
Vendor Commitments, 2018 | $ 15,852 |
Vendor Commitments, 2019 | 10,826 |
Vendor Commitments, 2020 | 1,500 |
Vendor Commitments, Total | 28,178 |
INBOUND Event Obligations [Member] | |
Long Term Purchase Commitment [Line Items] | |
Vendor Commitments, 2018 | 475 |
Vendor Commitments, 2019 | 316 |
Vendor Commitments, 2020 | 316 |
Vendor Commitments, 2021 | 653 |
Vendor Commitments, 2022 | 653 |
Vendor Commitments, Thereafter | 653 |
Vendor Commitments, Total | $ 3,066 |
Changes in Accumulated Other 67
Changes in Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance, Amount | $ 118,700 | $ 121,708 |
Other comprehensive (loss) income before reclassifications | 807 | (59) |
Ending Balance, Amount | 210,360 | 118,700 |
Cumulative Translation Adjustment [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance, Amount | (589) | (417) |
Other comprehensive (loss) income before reclassifications | 968 | (172) |
Ending Balance, Amount | 379 | (589) |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance, Amount | (275) | (388) |
Other comprehensive (loss) income before reclassifications | (161) | 113 |
Ending Balance, Amount | (436) | (275) |
Accumulated Other Comprehensive Loss [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance, Amount | (864) | (805) |
Ending Balance, Amount | $ (57) | $ (864) |
Stockholders' Equity and Stoc68
Stockholders' Equity and Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Sep. 25, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Common stock authorized | 500,000,000 | 500,000,000 | ||
Number of Shares outstanding | 2,315,000 | 2,709,000 | ||
Unrecognized compensation costs | $ 5,400 | |||
Unrecognized compensation costs, weighted average period | 2 years 2 months 12 days | |||
Software Development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Capitalized software development costs excluded from stock based compensation | $ 1,600 | $ 1,200 | $ 492 | |
RSUs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Percentage of service condition met | 25.00% | |||
Service agreement period description | The service condition is a time-based condition met over a period of four years, with 25% met after one year, and then in equal monthly or quarterly installments over the succeeding three years, or over a period of four years, with equal quarterly installments over those four years. | |||
The total stock-based compensation expense expected to be recorded | $ 102,300 | |||
Weighted average period of RSU | 2 years 8 months 12 days | |||
Number of RSUs expected to vest | 2,100,000 | |||
Aggregate intrinsic value of RSUs expected to vest | $ 184,100 | |||
Total fair value of RSUs vested | $ 48,600 | $ 24,000 | $ 11,900 | |
Common Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Weighted-average grant date fair value of options granted | $ 24.56 | $ 16.97 | $ 16.53 | |
Maximum [Member] | RSUs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Period of service condition met | 4 years | |||
Minimum [Member] | RSUs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Period of service condition met | 1 year | |||
2007 Equity Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Number of shares available for issuance | 0 | |||
2007 Equity Incentive Plan [Member] | Common Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Number of Shares outstanding | 1,700,000 | |||
2007 Equity Incentive Plan [Member] | RSUs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Number of Shares outstanding | 49,000 | |||
2007 Equity Incentive Plan [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Number of years fixed for each option | 10 years | |||
2014 Stock Option and Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Percentage of common stock outstanding | 5.00% | |||
2014 Stock Option and Incentive Plan [Member] | Common Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Number of shares available for issuance | 1,973,551 | |||
Number of Shares outstanding | 582,000 | |||
2014 Stock Option and Incentive Plan [Member] | RSUs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Number of Shares outstanding | 2,000,000 | |||
2014 Stock Option and Incentive Plan [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Number of years fixed for each option | 10 years |
Stockholders' Equity and Stoc69
Stockholders' Equity and Stock-Based Compensation - Summary of Number of Shares of Common Stock Reserved (Detail) - shares | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 25, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock reserved for the potential conversion | 4,410,000 | 4,984,000 | |
ESPP [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock reserved for the potential conversion | 10,000 | 11,000 | 1,409,988 |
RSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock reserved for the potential conversion | 2,085,000 | 2,264,000 | |
Common Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock reserved for the potential conversion | 2,315,000 | 2,709,000 |
Stockholders' Equity and Stoc70
Stockholders' Equity and Stock-Based Compensation - Schedule of Stock Compensation Expense by Award Type (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | $ 47,317 | $ 32,675 | $ 21,308 |
ESPP [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 1,233 | 1,093 | 1,035 |
Common Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 4,948 | 5,202 | 6,349 |
RSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | $ 41,136 | $ 26,380 | $ 13,924 |
Stockholders' Equity and Stoc71
Stockholders' Equity and Stock-Based Compensation - Effect of Stock-Based Compensation on Income by Line Item (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | $ 47,317 | $ 32,675 | $ 21,308 |
Cost of Revenue, Subscription [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 658 | 512 | 341 |
Cost of Revenue, Service [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 2,327 | 1,640 | 1,216 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 12,816 | 8,828 | 6,327 |
Sales and Marketing [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 19,016 | 13,352 | 7,658 |
General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | $ 12,500 | $ 8,343 | $ 5,766 |
Stockholders' Equity and Stoc72
Stockholders' Equity and Stock-Based Compensation - Schedule of Assumptions Used for Estimation of Fair Value of Options Granted to Employees (Detail) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate (%) | 1.74% | 1.38% | 1.36% |
Expected term (years) | 5 years 2 months 4 days | 5 years 29 days | 6 years 2 months 4 days |
Volatility (%) | 39.40% | 38.00% | 43.00% |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate (%) | 2.09% | 1.41% | 1.53% |
Expected term (years) | 6 years 2 months 15 days | 6 years 2 months 15 days | 6 years 2 months 19 days |
Volatility (%) | 43.70% | 41.00% | 51.60% |
Stockholders' Equity and Stoc73
Stockholders' Equity and Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Number of Shares, Beginning balance | 2,709 | |
Number of Shares, Granted | 180 | |
Number of Shares, Exercised | (543) | |
Number of Shares, Forfeited/Expired | (31) | |
Number of Shares, Ending balance | 2,315 | 2,709 |
Number of Shares, Vested and expected to vest | 2,315 | |
Number of Shares, Exercisable | 1,945 | |
Weighted Average Exercise Price, Beginning balance | $ 13.99 | |
Weighted Average Exercise Price, Granted | 56.67 | |
Weighted Average Exercise Price, Exercised | 16.07 | |
Weighted Average Exercise Price, Forfeited/ Expired | 24.12 | |
Weighted Average Exercise Price , Ending balance | 16.69 | $ 13.99 |
Weighted Average Exercise Price, Vested and expected to vest | 16.69 | |
Weighted Average Exercise Price, Exercisable | $ 11.39 | |
Weighted Average Remaining Life, Outstanding | 5 years 3 months 18 days | 6 years 1 month 6 days |
Weighted Average Remaining Life, Options vested or expected to vest | 5 years 3 months 18 days | |
Weighted Average Remaining Life, Options exercisable | 4 years 9 months 18 days | |
Aggregate Intrinsic Value, Outstanding | $ 165,974 | $ 89,411 |
Aggregate Intrinsic Value, Options vested or expected to vest | 165,974 | |
Aggregate Intrinsic Value, Options exercisable | $ 149,803 |
Stockholders' Equity and Stoc74
Stockholders' Equity and Stock-Based Compensation - Summary of Activity Related to RSUs (Detail) - RSUs [Member] shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted Shares, Beginning balance | shares | 2,264 |
Shares, Granted | shares | 1,189 |
Shares, Vested | shares | (1,151) |
Shares, Canceled | shares | (217) |
Restricted shares, Ending balance | shares | 2,085 |
Weighted average grant date fair value, Beginning balance | $ / shares | $ 42.04 |
Weighted- Average Grant Date Fair Value, Granted | $ / shares | 64.59 |
Weighted- Average Grant Date Fair Value, Vested | $ / shares | 42.24 |
Weighted- Average Grant Date Fair, Canceled | $ / shares | 48.13 |
Weighted average grant date fair value, Ending balance | $ / shares | $ 54.12 |
Employee Stock Purchase Plan -
Employee Stock Purchase Plan - Additional Information (Detail) - shares | Sep. 25, 2014 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorizes for issuance | 4,410,000 | 4,984,000 | |
Percentage of discount allowed to employee to purchase common stock | 15.00% | ||
ESPP [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorizes for issuance | 1,409,988 | 10,000 | 11,000 |
Employee Stock Purchase Plan 76
Employee Stock Purchase Plan - Summary of Activity Related to Employee Stock Purchase Plan (Detail) - ESPP [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares Issued | 94 | 70 | 29 |
Weighted-Average Purchase Price | $ 38.83 | $ 38.98 | $ 28.46 |
Total Cash Proceeds | $ 3,635 | $ 2,721 | $ 814 |
Income Taxes - Schedule of (Los
Income Taxes - Schedule of (Loss) Income Before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (54,894) | $ (47,112) | $ (47,911) |
Foreign | 4,855 | 2,083 | 2,270 |
Total | $ (50,039) | $ (45,029) | $ (45,641) |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Benefit (Provision) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current income tax provision | |||
State | $ (144) | $ (95) | $ (61) |
Foreign | (1,077) | (579) | (401) |
Total current income tax provision | (1,221) | (674) | (462) |
Deferred income tax benefit | |||
Federal | 10,435 | 61 | (10) |
State | 977 | ||
Foreign | 134 | 80 | 60 |
Total deferred income tax benefit | 11,546 | 141 | 50 |
Total income tax benefit (provision) | $ 10,325 | $ (533) | $ (412) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation Of Income Taxes [Line Items] | ||||
Federal statutory income tax rate | 35.00% | |||
Remeasurement of deferred tax balances due to change in U.S. corporate tax rate | $ 49,123,000 | |||
Increase in valuation allowance | $ 5,500,000 | $ 16,500,000 | $ 19,400,000 | |
Valuation allowance changes, description | The Company does not expect any significant changes in its valuation allowance positions within the next 12 months. | |||
Undistributed foreign earnings | $ 6,900,000 | |||
Federal net operating loss carryforwards | 352,500,000 | |||
State net operating loss carryforwards | $ 224,700,000 | |||
Federal and state net operating loss carryforwards, expiration year | Dec. 31, 2037 | |||
Research and development credits | $ 9,402,000 | $ 6,674,000 | ||
Minimum percentage chances of tax benefit to be realized on examination | 50.00% | |||
Unrecognized tax benefits affect the Company's effective tax rate | $ 0 | |||
Interest or penalties recorded | $ 0 | |||
Expected significant change in unrecognized tax benefits, description | The Company does not expect any significant change in its unrecognized tax benefits within the next 12 months | |||
Federal [Member] | ||||
Reconciliation Of Income Taxes [Line Items] | ||||
Research and development credits | $ 5,800,000 | |||
Research and development credit carryforwards, expiration year | Dec. 31, 2037 | |||
State [Member] | ||||
Reconciliation Of Income Taxes [Line Items] | ||||
Research and development credits | $ 2,500,000 | |||
Research and development credit carryforwards, expiration year | Dec. 31, 2032 | |||
Investments credits | $ 756,000 | |||
Scenario Forecast [Member] | ||||
Reconciliation Of Income Taxes [Line Items] | ||||
Federal statutory income tax rate | 21.00% |
Income Taxes - Schedule of Diff
Income Taxes - Schedule of Differences Between Income Taxes Computed at the Federal Statutory Rate and the Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Expected income tax benefit at the federal statutory rate | $ 17,166 | $ 15,761 | $ 15,974 |
State taxes net of federal benefit | 5,150 | 916 | 2,257 |
Stock-based compensation | 10,939 | (2,001) | (1,685) |
Difference in foreign tax rates | 988 | 415 | 482 |
U.S. tax credits | 1,717 | 1,609 | 2,738 |
Convertible debt and acquisition | 11,573 | ||
Federal rate change | (49,123) | ||
Transition tax | (1,063) | ||
Change in valuation allowance | 13,988 | (16,413) | (19,421) |
Other | (1,010) | (820) | (757) |
Total income tax benefit (provision) | $ 10,325 | $ (533) | $ (412) |
Income Taxes - Components of th
Income Taxes - Components of the Company's Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 87,521 | $ 73,750 |
Research and investment credits | 9,402 | 6,674 |
Accruals and reserves | 6,627 | 6,699 |
Depreciation | 911 | 744 |
Intangible assets | 215 | |
Stock-based compensation | 4,146 | 8,115 |
Total deferred tax assets | 108,607 | 96,197 |
Deferred tax liabilities: | ||
Intangible assets | (1,273) | |
Convertible debt | (5,664) | |
Capitalized costs | (4,648) | (4,843) |
Total deferred tax liabilities | (11,585) | (4,843) |
Valuation allowance | (96,630) | (91,132) |
Net deferred tax assets | $ 392 | $ 222 |
Income Taxes - Summary of Activ
Income Taxes - Summary of Activity Related to Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized benefit - beginning of the year | $ 1,742 | $ 673 | $ 1,713 |
Gross increases-current period positions | 983 | 1,069 | 171 |
Gross decrease—prior period positions | (1,211) | ||
Unrecognized benefit - end of period | $ 2,725 | $ 1,742 | $ 673 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Postemployment Benefits [Abstract] | |||
Contribution to Defined contribution savings plan | $ 2.9 | $ 2.1 | $ 1.2 |
Quarterly Financial Results (84
Quarterly Financial Results (Unaudited) - Schedule of Quarterly Financial Results (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 106,541 | $ 97,726 | $ 89,093 | $ 82,252 | $ 76,444 | $ 70,589 | $ 64,974 | $ 58,960 | $ 375,612 | $ 270,967 | $ 181,943 |
Cost of revenue | 21,056 | 19,010 | 18,591 | 17,072 | 16,887 | 15,812 | 15,195 | 13,971 | 75,729 | 61,865 | 47,923 |
Gross profit | 85,485 | 78,716 | 70,502 | 65,180 | 59,557 | 54,777 | 49,779 | 44,989 | 299,883 | 209,102 | 134,020 |
Net loss | $ (11,535) | $ (10,583) | $ (9,521) | $ (8,075) | $ (13,829) | $ (10,515) | $ (11,064) | $ (10,154) | $ (39,714) | $ (45,562) | $ (46,053) |
Basic and diluted net loss per share | $ (0.31) | $ (0.29) | $ (0.26) | $ (0.22) | $ (0.39) | $ (0.30) | $ (0.32) | $ (0.29) | $ (1.08) | $ (1.29) | $ (1.39) |