Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 11, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
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 Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 39,613,020 | ||
Entity Public Float | $ 4,536,600,064 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 111,489 | $ 87,680 |
Short-term investments | 480,761 | 416,663 |
Accounts receivable—net of allowance for doubtful accounts of $1,317 and $638 at December 31, 2018 and 2017, respectively | 77,100 | 60,676 |
Deferred commission expense | 23,664 | 13,343 |
Restricted cash | 5,175 | 4,757 |
Prepaid expenses and other current assets | 14,229 | 19,382 |
Total current assets | 712,418 | 602,501 |
Long-term investments | 11,450 | 31,394 |
Property and equipment, net | 52,468 | 43,294 |
Capitalized software development costs, net | 12,746 | 8,760 |
Deferred commission expense, net of current portion | 18,114 | |
Other assets | 6,888 | 4,964 |
Intangible assets, net | 4,919 | 6,312 |
Goodwill | 14,950 | 14,950 |
Total assets | 833,953 | 712,175 |
Current liabilities: | ||
Accounts payable | 7,810 | 4,657 |
Accrued compensation costs | 23,589 | 16,329 |
Accrued expenses and other current liabilities | 22,305 | 20,430 |
Deferred revenue | 183,305 | 136,880 |
Total current liabilities | 237,009 | 178,296 |
Deferred rent, net of current portion | 26,445 | 18,868 |
Deferred revenue, net of current portion | 2,179 | 2,277 |
Other long-term liabilities | 4,897 | 3,927 |
Convertible senior notes | 318,782 | 298,447 |
Total liabilities | 589,312 | 501,815 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value—authorized, 500,000 shares; issued and outstanding, 39,300 and 37,503 at December 31, 2018 and 2017, respectively | 40 | 38 |
Additional paid-in capital | 589,708 | 496,461 |
Accumulated other comprehensive loss | (723) | (57) |
Accumulated deficit | (344,384) | (286,082) |
Total stockholders’ equity | 244,641 | 210,360 |
Total liabilities and stockholders’ equity | $ 833,953 | $ 712,175 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, net of allowance for doubtful accounts | $ 1,317 | $ 638 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 39,300,000 | 37,503,000 |
Common stock, shares outstanding | 39,300,000 | 37,503,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | |||
Total revenue | $ 512,980 | $ 375,612 | $ 270,967 |
Cost of Revenue: | |||
Total cost of revenue | 100,357 | 75,729 | 61,865 |
Gross profit | 412,623 | 299,883 | 209,102 |
Operating expenses: | |||
Research and development | 117,603 | 70,373 | 45,997 |
Sales and marketing | 267,444 | 212,859 | 162,647 |
General and administrative | 75,834 | 56,787 | 45,120 |
Total operating expenses | 460,881 | 340,019 | 253,764 |
Loss from operations | (48,258) | (40,136) | (44,662) |
Other expense: | |||
Interest income | 9,176 | 3,837 | 854 |
Interest expense | (21,386) | (13,181) | (265) |
Other expense | (1,492) | (559) | (956) |
Total other expense | (13,702) | (9,903) | (367) |
Loss before income tax (expense) benefit | (61,960) | (50,039) | (45,029) |
Income tax (expense) benefit | (1,868) | 10,325 | (533) |
Net loss | $ (63,828) | $ (39,714) | $ (45,562) |
Net loss per common share, basic and diluted | $ (1.66) | $ (1.08) | $ (1.29) |
Weighted average common shares used in computing basic and diluted net loss per common share: | 38,529 | 36,827 | 35,197 |
Subscription [Member] | |||
Revenue: | |||
Total revenue | $ 487,450 | $ 356,727 | $ 254,775 |
Cost of Revenue: | |||
Total cost of revenue | 69,718 | 51,563 | 41,182 |
Professional Services and Other [Member] | |||
Revenue: | |||
Total revenue | 25,530 | 18,885 | 16,192 |
Cost of Revenue: | |||
Total cost of revenue | $ 30,639 | $ 24,166 | $ 20,683 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net loss | $ (63,828) | $ (39,714) | $ (45,562) |
Other comprehensive loss: | |||
Foreign currency translation adjustments | (776) | 968 | (172) |
Changes in unrealized gain (loss) on investments, net of income taxes of $0 in 2018, $0 in 2017, and $71 in 2016. | 110 | (161) | 113 |
Comprehensive loss | $ (64,494) | $ (38,907) | $ (45,621) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Changes in unrealized gain (loss) on investments, income taxes | $ 0 | $ 0 | $ 71 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] |
Beginning Balance, Amount at Dec. 31, 2015 | $ 121,708 | $ 34 | $ 322,833 | $ (805) | $ (200,354) |
Beginning 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 | ||||
Issuance of common stock under stock plans, net of shares withheld for employee taxes | 14,731 | $ 2 | 14,729 | ||
Issuance of common stock under stock plans, net of shares withheld for employee taxes, Shares | 1,797 | ||||
Stock-based compensation | 78,518 | 78,518 | |||
Cumulative adjustment from adoption of revenue recognition standard (Note 2) | 5,526 | 5,526 | |||
Unrealized gain (loss) on investments, net of income taxes | 110 | 110 | |||
Cumulative translation adjustment | (776) | (776) | |||
Net loss | (63,828) | (63,828) | |||
Ending Balance, Amount at Dec. 31, 2018 | $ 244,641 | $ 40 | $ 589,708 | $ (723) | $ (344,384) |
Ending Balance, Shares at Dec. 31, 2018 | 39,300 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Stockholders Equity [Abstract] | |||
Unrealized gain (loss) on investments, tax | $ 0 | $ 0 | $ 71 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Activities: | |||
Net loss | $ (63,828) | $ (39,714) | $ (45,562) |
Adjustments to reconcile net loss to net cash and cash equivalents provided by operating activities: | |||
Depreciation and amortization | 23,428 | 15,786 | 11,177 |
Stock-based compensation | 76,261 | 47,317 | 32,675 |
Deferred income tax expense (benefit) | 36 | (11,546) | (133) |
Amortization of debt discount and issuance costs | 20,335 | 12,366 | |
(Accretion) amortization of bond discount premium | (6,787) | (1,576) | 647 |
Non-cash rent expense | 2,336 | 5,039 | 3,968 |
Unrealized currency translation | 483 | (139) | 81 |
Changes in assets and liabilities, net of acquisition | |||
Accounts receivable | (17,726) | (20,180) | (14,099) |
Prepaid expenses and other assets | 3,880 | (5,588) | (6,126) |
Deferred commission expense | (23,900) | (4,004) | (453) |
Accounts payable | 3,298 | 1,100 | 983 |
Accrued expenses and other current liabilities | 11,920 | 8,195 | 4,004 |
Deferred rent | 5,799 | 3,559 | (107) |
Deferred revenue | 49,316 | 38,999 | 32,311 |
Net cash and cash equivalents provided by operating activities | 84,851 | 49,614 | 19,366 |
Investing Activities: | |||
Purchases of investments | (681,632) | (890,009) | (52,131) |
Maturities and sales of investments | 644,375 | 533,660 | 50,840 |
Purchases of property and equipment | (22,305) | (20,276) | (15,789) |
Capitalization of software development costs | (11,168) | (7,071) | (5,749) |
Acquisition of a business and purchase of technology | (9,415) | ||
Purchase of strategic investments | (500) | (3,500) | |
Net cash and cash equivalents used in investing activities | (71,230) | (396,611) | (22,829) |
Financing Activities: | |||
Employee taxes paid related to the net share settlement of stock-based awards | (8,033) | (4,419) | (2,368) |
Proceeds related to the issuance of common stock under stock plans | 21,555 | 13,086 | 11,584 |
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 | (744) | (1,054) | (743) |
Net cash and cash equivalents provided by financing activities | 12,778 | 376,806 | 8,473 |
Effect on exchange rate changes on cash and cash equivalents | (2,069) | 2,790 | (760) |
Net increase in cash, cash equivalents and restricted cash | 24,330 | 32,599 | 4,250 |
Cash, cash equivalents and restricted cash, beginning of year | 92,784 | 60,185 | 55,935 |
Cash, cash equivalents and restricted cash, end of year | 117,114 | 92,784 | 60,185 |
Supplemental cash flow disclosure: | |||
Cash paid for interest | 1,036 | 762 | 174 |
Cash paid for income taxes | 1,842 | 855 | 954 |
Non-cash investing and financing activities: | |||
Property and equipment acquired under capital lease | 1,039 | 995 | |
Capital expenditures incurred but not yet paid | 666 | 680 | 1,383 |
Asset retirement obligations | $ 216 | $ 575 | $ 561 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Convertible notes, issuance costs | $ 10,767 |
Warrant [Member] | |
Offering and issuance costs paid | $ 200 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization and Operations | 1. Organization and Operations HubSpot, Inc. (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 a CRM, search engine optimization, blogging, website content management, messaging, chatbots, social media, marketing automation, email, predictive lead scoring, sales productivity, ticketing and helpdesk tools, customer NPS surveys, analytics, and reporting |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
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”), the shares issuable under the Employee Stock Purchase Plan (“ESPP”), common stock warrants, and the Conversion Option of the 2022 Notes 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, 2018 2017 2016 (in thousands, except per share amounts) Net loss $ (63,828 ) $ (39,714 ) $ (45,562 ) Weighted-average common shares outstanding—basic 38,529 36,827 35,197 Dilutive effect of share equivalents resulting from stock options, RSUs, ESPP common stock warrants, and the Conversion Option of the 2022 Notes — — — Weighted-average common shares outstanding-diluted 38,529 36,827 35,197 Net loss per common share, basic and diluted $ (1.66 ) $ (1.08 ) $ (1.29 ) 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, shares issuable under the ESPP, common stock warrants, 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, 2018 2017 2016 (in thousands) Options to purchase common shares 1,824 2,085 2,709 RSUs 1,732 2,315 2,264 Conversion option of the 2022 Notes 967 — — Common stock warrants 244 — — ESPP — 10 11 The Company expects to settle the principal amount of the 2022 Notes (Note 7) 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 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. As of February 8, 2019, no holders have converted or indicated their intention to convert 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 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 measurement alternative. Under the measurement alternative, the non-marketable securities are carried at cost less any impairments, plus or minus adjustments resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. 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, 2018 $ 638 $ 5,514 $ (4,835 ) $ 1,317 Year ended December 31, 2017 $ 617 $ 3,353 $ (3,332 ) $ 638 Year ended December 31, 2016 $ 371 $ 2,517 $ (2,271 ) $ 617 (1) Deductions include actual accounts written-off, net of recoveries. Restricted Cash —The Company had restricted cash of $5.6 million at December 31, 2018 and $5.1 million at December 31, 2017 related to letters of credit for it leased facilities. The following table provides a reconciliation of the cash, cash equivalents and restricted cash within the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows for the year ended December 31, 2018 and 2017. December 31, 2018 December 31, 2017 (in thousands) Cash and cash equivalents $ 111,489 $ 87,680 Restricted cash 5,175 4,757 Restricted cash, included in other assets 450 347 Total cash, cash equivalents, and restricted cash $ 117,114 $ 92,784 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, 2018 and December 31, 2017 are as follows: Year Ended December 31, 2018 2017 (in thousands) Beginning balance $ 1,191 $ 591 Additions 459 580 Accretion 92 46 Settlements — (26 ) Updates to estimated cash flows (318 ) — Ending balance $ 1,424 $ 1,191 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 of acquired technology. 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 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. When assessing goodwill for impairment the Company first performs a qualitative assessment to determine whether it is necessary to perform the two-step quantitative analysis. If the Company determines it is unlikely that our reporting unit fair value was less than its carrying value then no two-step impairment test is performed. If the Company can not make a determination based on the qualitative assessment then the Company performs a two-step impairment test. Based on the qualitive assessment performed on November 30, 2018, the Company determined it was unlikely that our reporting unit fair value was less than its carrying value and no two-step impairment test was required. There were no indicators that the Company’s goodwill had become impaired since that date, and as such, there was no impairment of goodwill as of November 30, 2018 or December 31, 2018. For the years ended December 31, 2018, 2017 and 2016, 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 $8.4 million of advertising expense in 2018, $5.5 million in 2017, and $4.2 million in 2016. Revenue Recognition — The Company generates revenue from arrangements with multiple performance obligations, which typically include subscriptions to its online software products and professional services which include on-boarding and training services. The Company’s customers do not have the right to take possession of the online software products. The Company recognizes revenue from contracts with customers using a five-step model, which is described below: • Identify the customer contract; • Identify performance obligations that are distinct; • Determine the transaction price; • Allocate the transaction price to the distinct performance obligations; and • Recognize revenue as the performance obligations are satisfied. Identify the customer contract A customer contract is generally identified when the Company and a customer have executed an arrangement that calls for the Company to grant access to its online software products and provide professional services in exchange for consideration from the customer. Identify performance obligations that are distinct A performance obligation is a promise to provide a distinct good or service or a series of distinct goods or services. A good or service that is promised to a customer is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and a company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. The Company has determined that subscriptions for its online software products are distinct because, once a customer has access to the online software product that it purchased, the online software product is fully functional and does not require any additional development, modification, or customization. Professional services sold are distinct because the customer benefits from the on-boarding and training to make better use of the online software products it purchased. Determine the transaction price The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer, excluding sales taxes that are collected on behalf of government agencies. The Company estimates any variable consideration to which it will be entitled at contract inception, and reassesses at each reporting date, when determining the transaction price. The Company does not include variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will occur when any uncertainty associated with the variable consideration is resolved. Allocate the transaction price to the distinct performance obligations The transaction price is allocated to each performance obligation based on the relative standalone selling prices (“SSP”) of the goods or services being provided to the customer. The Company determines the SSP of its goods and services based upon the average sales prices for each type of online software product and professional services sold. In instances where there are not sufficient data points, or the selling prices for a particular online software product or professional service are disparate, the Company estimates the SSP using other observable inputs, such as similar products or services. Recognize revenue as the performance obligations are satisfied Revenues are recognized when or as control of the promised goods or services is transferred to customers. Revenue from online software products Disaggregation of Revenue The Company provides disaggregation of revenue based on geographic region (Note 8) and based on the subscription versus professional services and other classification on the consolidated statements of operations as it believes these best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors Deferred Revenue, Deferred Commission Expense, and Accrued Expenses and Other Current Liabilities 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. Deferred revenue during the year ended December 31, 2018 increased by $46.3 million resulting from $559.3 million of additional invoicing and was offset by revenue recognized of $513.0 million during the same period. $138.1million of revenue was recognized during the year ended December 31, 2018 that was included in deferred revenue at the beginning of the period. As of December 31, 2018, approximately $126.4 million of revenue is expected to be recognized from remaining performance obligations for contracts with original performance obligations that exceed one year. The Company expects to recognize revenue on approximately 94% of these remaining performance obligations over the next 24 months, with the balance recognized thereafter. Additional contract liabilities $1.6 million and $1.0 million were included in accrued expenses and other current liabilities on the consolidated balance sheet for the years ended December 31, 2018 and December 31, 2017. The incremental direct costs of obtaining a contract, which primarily consist of sales commissions paid for new subscription contracts, are deferred and amortized on a straight-line basis over a period of approximately one to three years. The one to three-year period has been determined by taking into consideration the type of product sold, the commitment term of the customer contract, the nature of the Company’s technology development life-cycle, and an estimated customer relationship period. Sales commissions for upgrade contracts are deferred and amortized on a straight-line basis over the remaining estimated customer relationship period of the related customer. Deferred commission expense that will be recorded as expense during the succeeding 12-month period is recorded as current deferred commission expense, and the remaining portion is recorded as long-term deferred commission expense. Deferred commission expense during the year ended December 31, 2018 increased by $22.9 million as a result of deferring incremental costs of obtaining a contract of $42.9 million and was offset by amortization of $20.0 million during the same period. Partner Commissions The Company pays its partners a commission based on the sales price for the subscription purchased. The classification of the commission paid on the Company’s consolidated statements of operations depends on who purchases the subscription. In instances where the end-customer purchases from the Company, the Company is the principal and it records the commission paid to the partner as sales and marketing expense. When the partner purchases directly from the Company (on behalf of an end-customer), the Company is the agent and it 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 obligation is to the partner. The Company does not believe that it receives a tangible benefit from the commission payment to the partner. 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. Treasury securities . The Company limits the amount of investments in any single issuer, except U.S. Treasuries. The Company believes that, as of December 31, 2018, 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, 2018 and 2017 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 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, 2018 December 31, (in thousands) Gross capitalized software development costs $ 46,169 $ 33,360 Accumulated amortization (33,423 ) (24,600 ) Capitalized software development costs, net $ 12,746 $ 8,760 The Company capitalized software development costs, exclusive of costs recorded within property and equipment, of $12.8 million in 2018, $8.2 million in 2017, and $6.4 million in 2016. Stock-based compensation costs included in capitalized software were $2.4 million in 2018, $1.6 million in 2017, and $1.2 million in 2016. Amortization of capitalized software development costs, exclusive of costs recorded within property and equipment, was $9.2 million in 2018, $6.3 million in 2017, and $5.1 million in 2016. 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. 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 awards is generally the date of the grant. 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. Recent Accounting Pronouncements Adopted in 2018: In November 2016, the Financial Accounting Standards Board (“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. The Company adopted the updated guidance as of January 1, 2018. As a result of adopting this guidance cash and cash equivalents used in investing activities increased by $521 thousand and net increase in cash, cash equivalents, and restricted cash also increased by $521 thousand for the year ended December 31, 2018. Cash and cash equivalents used in investing activities increased by $4.6 million and net increase in cash, cash equivalents, and restricted cash increased by $4.6 million for the year ended December 31, 2017 in the consolidated statements of cash flows. Cash and cash equivalents used in investing activities increased by $128 thousand and net increase in cash, cash equivalents, and restricted cash increased by $128 thousand for the year ended December 31, 2016 in the consolidated statements of cash flows. In January 2016, the FASB issued guidance that requires entities to measure equity instruments at fair value and recognize changes in fair value within the statement of operations. The Company adopted the updated guidance as of January 1, 2018. The guidance provides for electing a measurement alternative or defaulting to the fair value option for equity investments that do not have readily determinable fair values. The Company elected the measurement alternative for its equity investments in privately held companies, which are included in other assets in the accompanying consolidated balance sheets. These investments are measured at cost, less any impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer, which will be recorded within the statement of operations. The adoption of this guidance did not have a material impact 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 Company adopted the updated guidance as of January 1, 2018 using the modified retrospective transition method. Adoption of Updated Revenue Guidance On January 1, 2018, the Company adopted new revenue guidance using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after December 31, 2017 are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordan |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and December 31, 2017: December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents and investments: Money market funds $ 1,579 $ — $ — $ 1,579 Commercial paper — 8,242 — 8,242 Corporate bonds — 70,728 — 70,728 U.S. Treasury securities — 413,241 — 413,241 Restricted cash: Certificates of deposit — 5,625 — 5,625 Total $ 1,579 $ 497,836 $ — $ 499,415 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 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, 2018 and December 31, 2017, 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, 2018, the fair value of the 2022 Notes (Note 7) was $575.2 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. The Company elected the measurement alternative for these investments without readily determinable fair values and for which the Company does not have the ability to exercise significant influence. These investments are accounted for under the cost method of accounting. Under the cost method of accounting, the non-marketable equity securities are carried at cost less any impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer, which is recorded within the statement of operations. The Company holds $4.0 million of strategic investments without readily determinable fair values at December 31, 2018 and $3.5 million of strategic investments without readily determinable fair values at December 31, 2017. These investments are included in other assets on the consolidated balance sheets. There have been no adjustments to the carrying value of strategic investments resulting from impairments or observable price changes. The following tables summarize the composition of our short- and long-term investments at December 31, 2018 and 2017: December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value (in thousands) Commercial paper $ 8,256 $ — $ (14 ) $ 8,242 Corporate bonds 70,958 3 (233 ) 70,728 U.S. Treasury securities 413,323 56 (138 ) 413,241 Total $ 492,537 $ 59 $ (385 ) $ 492,211 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 For all of our securities for which the amortized cost basis was greater than the fair value at December 31, 2018 and 2017, 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, 2018 and 2017 are as follows: December 31, 2018 December 31, 2017 Amortized Cost Basis Aggregate Fair Value Amortized Cost Basis Aggregate Fair Value ( in thousands) Due within one year $ 481,071 $ 480,761 $ 416,932 $ 416,663 Due after 1 year and within 2 years 11,466 11,450 31,560 31,394 Total $ 492,537 $ 492,211 $ 448,492 $ 448,057 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment as of December 31, 2018 and December 31, 2017 consists of the following: December 31. 2018 2017 (in thousands) Computer equipment & purchased software $ 8,163 $ 4,571 Employee computer equipment 8,972 4,260 Furniture and fixtures 13,019 11,083 Office equipment 2,551 2,620 Leasehold improvements 42,894 33,446 Equipment under capital lease 3,450 3,450 Internal-use software 5,363 2,892 Construction in progress 2,498 3,198 Total property and equipment 86,910 65,520 Less accumulated depreciation (34,442 ) (22,226 ) Property and equipment, net $ 52,468 $ 43,294 Depreciation and amortization expense was $12.9 million in 2018, $9.4 million in 2017, and $5.9 million in 2016. Accumulated depreciation for equipment under capital lease was $3.1 million as of December 31, 2018 and $2.4 million as of December 31, 2017. The Company capitalized asset retirement costs of $1.3 million at December 31, 2018 and $1.1 million at December 31, 2017 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, 2018 | |
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 began amortizing the acquired technology in 2018 when the technology is placed in use. The acquired technology is being amortized over its useful life of two years as cost of subscription revenue in the consolidated statements of operations. The 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. Through December 31, 2018, $3.8 million of this consideration had been earned and recorded as operating expense in the consolidated statements of operations. The remaining $0.2 million will be recorded as it is earned over a period of approximately 2 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, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6. Intangible Assets Intangible assets as of December 31, 2018 and 2017 consist of the following: Weighted Average Remaining Useful Life December 31, 2018 2017 (in thousands) Acquired technology 20 Months $ 7,252 $ 7,252 Accumulated amortization (2,333 ) (940 ) Total $ 4,919 $ 6,312 The estimated useful life of acquired technology 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 $1.4 million in 2018, $103 thousand in 2017, and $84 thousand in 2016. Amortization expense of acquired technology is included in cost of subscription revenue in the consolidated statements of operations. Estimated future amortization expense for intangible assets as of December 31, 2018 is as follows: Years ended December 31, Amortization Expense (in thousands) 2019 3,112 2020 1,807 Total $ 4,919 |
0.25% Convertible Senior Notes,
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant | 12 Months Ended |
Dec. 31, 2018 | |
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. At December 31, 2018 and 2017 the Company has reserved approximately 4.2 million shares of common stock for issuance upon conversion of the 2022 Notes. 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. Because the last reported sale price of the Company’s common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the calendar quarter ended December 31, 2018 was equal to or greater than 130% of the applicable conversion price on each applicable trading day, the 2022 Notes are convertible at the option of the holders thereof during the calendar quarter ending March 31, 2019. As of February 8, 2019, no holders have converted or indicated their intention to convert the 2022 Notes. 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, 2018 As of December 31, 2017 (in thousands) Principal $ 400,000 $ 400,000 Unamortized debt discount (75,575 ) (94,498 ) Unamortized issuance costs (5,643 ) (7,055 ) Net carrying amount $ 318,782 $ 298,447 The net carrying amount of the equity component of the 2022 Notes is as follows: As of December 31, 2018 As of December 31, 2017 (in thousands) Debt discount for conversion option $ 106,006 106,006 Issuance costs (2,854 ) (2,854 ) Net carrying amount $ 103,152 $ 103,152 Interest expense related to the 2022 Notes is as follows: Year Ended December 31, 2018 2017 2016 (in thousands) Contractual interest expense $ 1,000 $ 639 $ — Amortization of debt discount 18,923 11,507 — Amortization of issuance costs 1,412 859 — Total interest expense $ 21,335 $ 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 number of shares of our common stock underlying the warrants is 4.2 million, t he same number of shares originally underlying the 2022 Notes and the Convertible Note Hedge transactions. The Company has reserved 4.2 million shares of common stock for the underlying warrants. 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 |
Segment Information and Geograp
Segment Information and Geographic Data | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information and Geographic Data | 8. Segment Information and 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, 2018 2017 2016 (In thousands) Americas $ 361,136 $ 283,696 $ 219,422 Europe 117,670 70,895 41,616 Asia Pacific 34,174 21,021 9,929 Total $ 512,980 $ 375,612 $ 270,967 Percentage of revenues generated outside of the Americas 30 % 24 % 19 % Revenue derived from customers outside the United States (international) was approximately 37% of total revenue in 2018, 33% of total revenue in 2017 and 28% of total revenue in 2016. Total long-lived assets by geographical region: As of December 31, 2018 As of December 31, 2017 (In thousands) Americas $ 35,186 $ 29,764 Europe 13,913 11,257 Asia Pacific 3,369 2,273 Total long lived assets $ 52,468 $ 43,294 Percentage of long lived assets held outside of the Americas 33 % 31 % |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
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 May 2031. 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 $84.2 million. Improvement reimbursements from landlords of $12.8 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 $23.1 million in 2018, $18.9million in 2017, and $13.8 million in 2016. Deferred rent was $27.0 million as of December 31, 2018 and $19.0 million as of December 31, 2017. Future minimum payments under all operating and capital lease agreements as of December 31, 2018, are as follows: Operating Capital (in thousands) 2019 $ 27,755 $ 298 2020 33,769 33 2021 35,414 — 2022 35,314 — 2023 35,686 — Thereafter 184,341 — Total $ 352,279 331 Less: Portion representing interest (20 ) Capital lease obligation $ 311 In February 2019, the Company entered into a new 3 year property lease in Sydney, Australia. In conjunction with the new lease existing leases were amended. The new lease commences in April 2019 and the Company will pay an aggregate of approximately $1.7 million in incremental rent over the 3 year term. 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, 2018, are as follows: Product related obligations INBOUND event obligations (in thousands) 2019 26,462 653 2020 19,000 316 2021 10,000 316 2022 — 653 2023 — 653 Total $ 55,462 $ 2,591 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, 2018 | |
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, 2018 and 2017: Cumulative Translation Adjustment Unrealized Gain (L oss) on Investments Total (in thousands) Beginning balance at January 1, 2017 $ (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 ) Other comprehensive income (loss) before reclassifications (776 ) 110 (666 ) Amounts reclassified from accumulated other comprehensive loss — — — Ending balance at December 31, 2018 $ (397 ) $ (326 ) $ (723 ) |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017, the Company has authorized 500 million shares of common stock. The number of shares of common stock reserved for the vesting of RSUs and exercise of common stock options are as follows (in thousands): December 31, 2018 December 31, 2017 RSUs 1,983 2,085 Common stock options 1,840 2,315 3,823 4,400 For shares reserved for issuance for the Conversion Option of the 2022 Notes and common stock warrants see Note 7. 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, 2018, 1.3 million options to purchase common stock and no 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 in the fourth quarter of 2014. 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, 2018, 563 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, 2018 2017 2016 ( in thousands) Options $ 5,108 $ 4,948 $ 5,202 ESPP 2,833 1,233 1,093 RSUs 68,320 41,136 26,380 Total stock-based compensation $ 76,261 $ 47,317 $ 32,675 2018 2017 2016 (in thousands) Cost of revenue, subscription $ 1,476 $ 658 $ 512 Cost of revenue, service 2,924 2,327 1,640 Research and development 23,328 12,816 8,828 Sales and marketing 31,099 19,016 13,352 General and administrative 17,434 12,500 8,343 Total stock-based compensation $ 76,261 $ 47,317 $ 32,675 Excluded from stock-based compensation expense is $2.4 million of capitalized software development costs in 2018, $1.6 million in 2017, and $1.2 million in 2016. 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, 2018 2017 2016 Risk-free interest rate (%) 2.62-2.85 1.74-2.09 1.38 - 1.41 Expected term (years) 5.06-6.42 5.18-6.21 5.08 - 6.21 Volatility (%) 41.34-43.55 39.4-43.7 38.0 - 41.0 Expected dividends — — — The weighted-average grant-date fair value of options granted was $51.48 per share in 2018, $24.56 per share in 2017, and $16.97 per share in 2016. 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 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, 2018 is as follows: Options (in thousands) Weighted- Average Exercise Price Weighted- Average Remaining Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding—January 1, 2018 2,315 $ 16.69 5.3 $ 165,974 Granted 146 113.95 Exercised (608 ) 17.87 Forfeited/expired (13 ) 32.01 Outstanding—December 31, 2018 1,840 23.89 4.6 $ 187,342 Options vested or expected to vest—December 31, 2018 1,840 $ 23.89 4.6 $ 187,342 Options exercisable—December 31, 2018 1,576 $ 14.38 3.9 $ 175,466 Total unrecognized compensation cost related to the nonvested options was $7.6 million at December 31, 2018. That cost is expected to be recognized over a weighted-average period of 2.7 years as of December 31, 2018. 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 $150.1 million at December 31, 2018. That cost is expected to be recognized over a weighted-average period of 2.7 years as of December 31, 2018. As of December 31, 2018, there are 2.0 million RSUs expected to vest with an aggregate intrinsic value of $248.9 million. The total fair value of RSUs vested was approximately $65.0 million in the year ended December 31, 2018, $ 48.6 million in the year ended December 31, 2017, and $24.0 million in the year ended December 31, 2016. The following table summarizes the activity related to RSUs for the year ended December 31, 2018: RSUs Outstanding Shares (in thousands) Weighted- Average Grant Date Fair Value Per Share Unvested and outstanding at January 1, 2018 2,085 $ 54.12 Granted 1,162 110.43 Vested (1,110 ) 58.60 Canceled (154 ) 66.00 Unvested and outstanding at December 31, 2018 1,983 $ 83.67 Employee Stock Purchase Plan — On September 25, 2014, the Company’s board of directors adopted and the Company’s stockholders approved (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 1,785,021 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 for the ESPP commence on June 1 and November 1 of each year. The following table summarizes the activity related to ESPP (in thousands, except the weighted average purchase price): Shares Issued (in thousands) Weighted- Average Purchase Price Total Cash Proceeds (in thousands) 2018 148 80.21 11,863 2017 94 38.83 3,635 2016 70 38.98 2,721 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes (Loss) income before provision for income taxes was as follows: Year Ended December 31, 2018 2017 2016 (in thousands) United States $ (69,769 ) $ (54,894 ) $ (47,112 ) Foreign 7,809 4,855 2,083 Total $ (61,960 ) $ (50,039 ) $ (45,029 ) The (provision) benefit for income taxes consists of the following: Year Ended December 31, 2018 2017 2016 (in thousands) Current income tax provision Federal $ (184 ) $ — $ — State (140 ) (144 ) (95 ) Foreign (1,508 ) (1,077 ) (579 ) Total current income tax provision (1,832 ) (1,221 ) (674 ) Deferred income tax benefit Federal 21 10,435 61 State — 977 — Foreign (57 ) 134 80 Total deferred income tax benefit (36 ) 11,546 141 Total income tax benefit (provision) $ (1,868 ) $ 10,325 $ (533 ) The following reconciles the differences between income taxes computed at the federal statutory rate of 21% for 2018 and 35% for 2017 and 2016 and the provision for income taxes: Year Ended December 31, 2018 2017 2016 (in thousands) Expected income tax benefit at the federal statutory rate $ 12,955 $ 17,166 $ 15,761 State taxes net of federal benefit 5,155 5,150 916 Stock-based compensation 17,575 10,939 (2,001 ) Difference in foreign tax rates 435 988 415 U.S. tax credits 1,763 1,717 1,609 Convertible debt and acquisition — 11,573 — Federal rate change — (49,123 ) — Transition tax — (1,063 ) — GILTI inclusion (1,177 ) — — Meals & entertainment (1,411 ) (745 ) (612 ) Change in valuation allowance (37,059 ) 13,988 (16,413 ) Other (104 ) (265 ) (208 ) Income tax benefit (provision) $ (1,868 ) $ 10,325 $ (533 ) 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 from 35% to 21% effective January 1, 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.. The Company recorded provisional estimates for the impact of the 2017 Act during period ended December 31, 2017. The accounting for the 2017 Act is now complete and no significant adjustments were made to the provisional estimates. 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, 2018 2017 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 118,897 $ 87,521 Research and investment credits 11,154 9,402 Accruals and reserves 7,734 6,627 Depreciation 1,119 911 Stock-based compensation 5,404 4,146 Interest expense 2,466 — Total deferred tax assets 146,774 108,607 Deferred tax liabilities: Intangible assets (1,002 ) (1,273 ) Convertible debt (4,675 ) (5,664 ) Capitalized costs (8,002 ) (4,648 ) Total deferred tax liabilities (13,679 ) (11,585 ) Valuation allowance (132,759 ) (96,630 ) Net deferred tax assets $ 336 $ 392 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 $36.1 million in 2018, $5.5 million in 2017 and $16.5 million in 2016, 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. Prior to the 2017 Act, the Company had asserted that the earnings of its foreign subsidiaries were indefinitely reinvested in the operations of those subsidiaries. At December 31, 2018, the Company has completed its accounting for the impact of the 2017 Act and has determined that it will no longer assert indefinite reinvestment of its foreign earnings. Through December 31, 2017, these earnings have been subject to U.S. federal income tax via the one-time transition tax on previously undistributed foreign earnings. The foreign earnings for the year-ended December 31, 2018 have been subject to U.S. federal income tax via the newly enacted Global Intangible Low-Taxed Income (“GILTI”) provision. The Company has determined that any incremental tax incurred upon ultimate distribution of these earnings to the U.S. would not be material. The Company had federal and state net operating loss carryforwards of $479.5 million and $301.4 million, respectively at December 31, 2018. As a result of the 2017 Act all federal net operating losses, created after January 1, 2018, have an indefinite carryforward period. All federal net operating losses, created before January 1, 2018, are subject to 20 year carryforward period and will expire at various dates through 2037. State net operating losses will expire at various dates through 2038. The Company had a federal interest expense carryforward of $10.0 million at December 31, 2018 which has an indefinite carryforward period. The Company had federal research and development credit carryforwards of $6.8 million at December 31, 2018 that expire at various dates through 2038. The Company also has state research and investment credit carryforwards of $3.5 million and $932 thousand, respectively that expire at various dates through 2033. 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, 2017, 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 2018. 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, 2018 2017 2016 (in thousands) Unrecognized benefit—beginning of the year $ 2,725 $ 1,742 $ 673 Gross increases—current period positions 1,200 983 1,069 Gross decrease—prior period positions — — — Unrecognized benefit—end of period $ 3,925 $ 2,725 $ 1,742 All of the gross unrecognized tax benefits represent a reduction to the research and development tax credit carryforward. 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, 2018. 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, Colombia, Canada, Sweden and various state jurisdictions. All of the Company’s tax years remain open to examination in the United States, as carryforward attributes generated in past years may still be adjusted upon examination by the Internal Revenue Service or state tax authorities if they have or will be used in future periods. The Company remains open to examination in Ireland for tax years 2014 through present. The Company also remains open to examination for varying periods in the other foreign jurisdictions. 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, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plan | 13. 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 employer contributions were $4.0 million in 2018, $2.9 million in 2017, and $2.1 million in 2016. |
Quarterly Financial Results (un
Quarterly Financial Results (unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Results (unaudited) | 14. Quarterly Financial Results (unaudited) Fourth Quarter Third Quarter Second Quarter First Quarter (in thousands, except per share amounts) Year ended December 31, 2018 Revenue $ 144,022 $ 131,826 $ 122,576 $ 114,556 Cost of revenue 27,364 25,765 24,851 22,377 Gross profit 116,658 106,061 97,725 92,179 Net loss (11,492 ) (18,663 ) (18,225 ) (15,448 ) Basic and diluted net loss per share $ (0.29 ) $ (0.48 ) $ (0.48 ) $ (0.41 ) 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 ) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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”), the shares issuable under the Employee Stock Purchase Plan (“ESPP”), common stock warrants, and the Conversion Option of the 2022 Notes 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, 2018 2017 2016 (in thousands, except per share amounts) Net loss $ (63,828 ) $ (39,714 ) $ (45,562 ) Weighted-average common shares outstanding—basic 38,529 36,827 35,197 Dilutive effect of share equivalents resulting from stock options, RSUs, ESPP common stock warrants, and the Conversion Option of the 2022 Notes — — — Weighted-average common shares outstanding-diluted 38,529 36,827 35,197 Net loss per common share, basic and diluted $ (1.66 ) $ (1.08 ) $ (1.29 ) 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, shares issuable under the ESPP, common stock warrants, 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, 2018 2017 2016 (in thousands) Options to purchase common shares 1,824 2,085 2,709 RSUs 1,732 2,315 2,264 Conversion option of the 2022 Notes 967 — — Common stock warrants 244 — — ESPP — 10 11 The Company expects to settle the principal amount of the 2022 Notes (Note 7) 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 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. As of February 8, 2019, no holders have converted or indicated their intention to convert 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 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 measurement alternative. Under the measurement alternative, the non-marketable securities are carried at cost less any impairments, plus or minus adjustments resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. |
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, 2018 $ 638 $ 5,514 $ (4,835 ) $ 1,317 Year ended December 31, 2017 $ 617 $ 3,353 $ (3,332 ) $ 638 Year ended December 31, 2016 $ 371 $ 2,517 $ (2,271 ) $ 617 (1) Deductions include actual accounts written-off, net of recoveries. |
Restricted Cash | Restricted Cash —The Company had restricted cash of $5.6 million at December 31, 2018 and $5.1 million at December 31, 2017 related to letters of credit for it leased facilities. The following table provides a reconciliation of the cash, cash equivalents and restricted cash within the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows for the year ended December 31, 2018 and 2017. December 31, 2018 December 31, 2017 (in thousands) Cash and cash equivalents $ 111,489 $ 87,680 Restricted cash 5,175 4,757 Restricted cash, included in other assets 450 347 Total cash, cash equivalents, and restricted cash $ 117,114 $ 92,784 |
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, 2018 and December 31, 2017 are as follows: Year Ended December 31, 2018 2017 (in thousands) Beginning balance $ 1,191 $ 591 Additions 459 580 Accretion 92 46 Settlements — (26 ) Updates to estimated cash flows (318 ) — Ending balance $ 1,424 $ 1,191 |
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 — Intangible assets consist of acquired technology. 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 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. When assessing goodwill for impairment the Company first performs a qualitative assessment to determine whether it is necessary to perform the two-step quantitative analysis. If the Company determines it is unlikely that our reporting unit fair value was less than its carrying value then no two-step impairment test is performed. If the Company can not make a determination based on the qualitative assessment then the Company performs a two-step impairment test. Based on the qualitive assessment performed on November 30, 2018, the Company determined it was unlikely that our reporting unit fair value was less than its carrying value and no two-step impairment test was required. There were no indicators that the Company’s goodwill had become impaired since that date, and as such, there was no impairment of goodwill as of November 30, 2018 or December 31, 2018. For the years ended December 31, 2018, 2017 and 2016, 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 $8.4 million of advertising expense in 2018, $5.5 million in 2017, and $4.2 million in 2016. |
Revenue Recognition | Revenue Recognition — The Company generates revenue from arrangements with multiple performance obligations, which typically include subscriptions to its online software products and professional services which include on-boarding and training services. The Company’s customers do not have the right to take possession of the online software products. The Company recognizes revenue from contracts with customers using a five-step model, which is described below: • Identify the customer contract; • Identify performance obligations that are distinct; • Determine the transaction price; • Allocate the transaction price to the distinct performance obligations; and • Recognize revenue as the performance obligations are satisfied. Identify the customer contract A customer contract is generally identified when the Company and a customer have executed an arrangement that calls for the Company to grant access to its online software products and provide professional services in exchange for consideration from the customer. Identify performance obligations that are distinct A performance obligation is a promise to provide a distinct good or service or a series of distinct goods or services. A good or service that is promised to a customer is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and a company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. The Company has determined that subscriptions for its online software products are distinct because, once a customer has access to the online software product that it purchased, the online software product is fully functional and does not require any additional development, modification, or customization. Professional services sold are distinct because the customer benefits from the on-boarding and training to make better use of the online software products it purchased. Determine the transaction price The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer, excluding sales taxes that are collected on behalf of government agencies. The Company estimates any variable consideration to which it will be entitled at contract inception, and reassesses at each reporting date, when determining the transaction price. The Company does not include variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will occur when any uncertainty associated with the variable consideration is resolved. Allocate the transaction price to the distinct performance obligations The transaction price is allocated to each performance obligation based on the relative standalone selling prices (“SSP”) of the goods or services being provided to the customer. The Company determines the SSP of its goods and services based upon the average sales prices for each type of online software product and professional services sold. In instances where there are not sufficient data points, or the selling prices for a particular online software product or professional service are disparate, the Company estimates the SSP using other observable inputs, such as similar products or services. Recognize revenue as the performance obligations are satisfied Revenues are recognized when or as control of the promised goods or services is transferred to customers. Revenue from online software products Disaggregation of Revenue The Company provides disaggregation of revenue based on geographic region (Note 8) and based on the subscription versus professional services and other classification on the consolidated statements of operations as it believes these best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors Deferred Revenue, Deferred Commission Expense, and Accrued Expenses and Other Current Liabilities 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. Deferred revenue during the year ended December 31, 2018 increased by $46.3 million resulting from $559.3 million of additional invoicing and was offset by revenue recognized of $513.0 million during the same period. $138.1million of revenue was recognized during the year ended December 31, 2018 that was included in deferred revenue at the beginning of the period. As of December 31, 2018, approximately $126.4 million of revenue is expected to be recognized from remaining performance obligations for contracts with original performance obligations that exceed one year. The Company expects to recognize revenue on approximately 94% of these remaining performance obligations over the next 24 months, with the balance recognized thereafter. Additional contract liabilities $1.6 million and $1.0 million were included in accrued expenses and other current liabilities on the consolidated balance sheet for the years ended December 31, 2018 and December 31, 2017. The incremental direct costs of obtaining a contract, which primarily consist of sales commissions paid for new subscription contracts, are deferred and amortized on a straight-line basis over a period of approximately one to three years. The one to three-year period has been determined by taking into consideration the type of product sold, the commitment term of the customer contract, the nature of the Company’s technology development life-cycle, and an estimated customer relationship period. Sales commissions for upgrade contracts are deferred and amortized on a straight-line basis over the remaining estimated customer relationship period of the related customer. Deferred commission expense that will be recorded as expense during the succeeding 12-month period is recorded as current deferred commission expense, and the remaining portion is recorded as long-term deferred commission expense. Deferred commission expense during the year ended December 31, 2018 increased by $22.9 million as a result of deferring incremental costs of obtaining a contract of $42.9 million and was offset by amortization of $20.0 million during the same period. Partner Commissions The Company pays its partners a commission based on the sales price for the subscription purchased. The classification of the commission paid on the Company’s consolidated statements of operations depends on who purchases the subscription. In instances where the end-customer purchases from the Company, the Company is the principal and it records the commission paid to the partner as sales and marketing expense. When the partner purchases directly from the Company (on behalf of an end-customer), the Company is the agent and it 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 obligation is to the partner. The Company does not believe that it receives a tangible benefit from the commission payment to the partner. |
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. Treasury securities . The Company limits the amount of investments in any single issuer, except U.S. Treasuries. The Company believes that, as of December 31, 2018, 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, 2018 and 2017 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 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, 2018 December 31, (in thousands) Gross capitalized software development costs $ 46,169 $ 33,360 Accumulated amortization (33,423 ) (24,600 ) Capitalized software development costs, net $ 12,746 $ 8,760 The Company capitalized software development costs, exclusive of costs recorded within property and equipment, of $12.8 million in 2018, $8.2 million in 2017, and $6.4 million in 2016. Stock-based compensation costs included in capitalized software were $2.4 million in 2018, $1.6 million in 2017, and $1.2 million in 2016. Amortization of capitalized software development costs, exclusive of costs recorded within property and equipment, was $9.2 million in 2018, $6.3 million in 2017, and $5.1 million in 2016. 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. |
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 awards is generally the date of the grant. 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. Recent Accounting Pronouncements Adopted in 2018: In November 2016, the Financial Accounting Standards Board (“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. The Company adopted the updated guidance as of January 1, 2018. As a result of adopting this guidance cash and cash equivalents used in investing activities increased by $521 thousand and net increase in cash, cash equivalents, and restricted cash also increased by $521 thousand for the year ended December 31, 2018. Cash and cash equivalents used in investing activities increased by $4.6 million and net increase in cash, cash equivalents, and restricted cash increased by $4.6 million for the year ended December 31, 2017 in the consolidated statements of cash flows. Cash and cash equivalents used in investing activities increased by $128 thousand and net increase in cash, cash equivalents, and restricted cash increased by $128 thousand for the year ended December 31, 2016 in the consolidated statements of cash flows. In January 2016, the FASB issued guidance that requires entities to measure equity instruments at fair value and recognize changes in fair value within the statement of operations. The Company adopted the updated guidance as of January 1, 2018. The guidance provides for electing a measurement alternative or defaulting to the fair value option for equity investments that do not have readily determinable fair values. The Company elected the measurement alternative for its equity investments in privately held companies, which are included in other assets in the accompanying consolidated balance sheets. These investments are measured at cost, less any impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer, which will be recorded within the statement of operations. The adoption of this guidance did not have a material impact 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 Company adopted the updated guidance as of January 1, 2018 using the modified retrospective transition method. Adoption of Updated Revenue Guidance On January 1, 2018, the Company adopted new revenue guidance using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after December 31, 2017 are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with historic revenue guidance. The Company applied the new standard using practical expedients where: • the measurement of the transaction price excludes all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer; • the new revenue guidance has been applied to portfolios of contracts with similar characteristics; • the modified retrospective approach has been applied only to contracts that are not completed contracts at the date of initial adoption; and • the value of unsatisfied performance obligations for contracts with an original expected length of one year or less has not been disclosed. The impact of applying the new guidance in 2018 versus the prior guidance resulted in a change to the period over which sales commissions are 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 resulted in a longer amortization period for deferred commission expense, which reduces expense compared to the application of the prior guidance. There was also a change to the scope of sales commissions that are capitalized based on the definition of incremental costs of obtaining a contract. This increased the amount of commissions cost that was capitalized compared to the application of the prior guidance. In addition, there was a change in the timing of revenue recognition for certain sales contracts where free or discounted The Company recorded a net increase to opening retained earnings of $5.5 million as of January 1, 2018 due to the cumulative impact of adopting the new revenue guidance, with the impact primarily related to the recognition of costs associated with obtaining customer contracts. The Company had previously recorded a net increase of $5.8 million to opening retained earnings as of January 1, 2018 to reflect the adoption of the new revenue guidance. During the three months ended June 30, 2018, the Company recorded an immaterial $274 thousand adjustment to the initial opening retained earnings adjustment to account for the deferred tax impact of the adoption of the new revenue standard. The resulting impact to the consolidated statements of operations and comprehensive loss of applying the new guidance for the year ended December 31, 2018 versus the prior guidance was a decrease to subscription revenue of $613 thousand, an increase to professional services and other revenue of $372 thousand, a decrease to total revenues of $241 thousand, and a decrease to selling and marketing expense and total operating expenses of $16.7 million for the year ended December 31, 2018, and a decrease to income tax (expense) benefit of $168 thousand. The resulting impact to loss from operations and loss before income tax (expense) benefit was $16.5 million. The resulting impact to net loss and comprehensive loss was $16.7 million. The resulting impact on basic earnings per share was $0.43. The resulting impact to the consolidated balance sheet of applying the new guidance in 2018 versus the prior guidance was a increase to short-term deferred commissions and total current assets of $4.1 million, an increase to long-term deferred commissions of $18.1 million, a decrease to other assets of $98 thousand, an increase in total assets of $22.1 million, a decrease to short-term deferred revenue, and total current liabilities of $89 thousand, an increase to other liabilities of $8 thousand, a decrease to total liabilities of $81 thousand, a decrease to accumulated deficit and increase to total stockholders’ equity of $22.2 million, and an increase to total liabilities and stockholders’ equity of $22.1 million. There was no impact to total cash flow from operations of applying the new guidance in 2018 versus the prior guidance because the decrease in net loss of $16.7 million, increase in the change in deferred commission expense of $16.7 million, increase in the change in deferred revenue of $0.2 million, and decrease in deferred taxes of $0.2 million net to $0 within cash flows from operations. Recent Accounting Pronouncements to be Adopted in 2019: In June 2018, the FASB issued guidance to expand the guidance for stock-based compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company does not believe the adoption of this guidance will have a material impact on the consolidated financial statements. 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 will adopt the standard on January 1, 2019. The guidance is required to be adopted using a modified retrospective approach. Upon adoption, the Company expects to elect the transition relief package, permitted within the new standard, in which the Company will not reassess the classification of existing leases, whether any expired or existing contracts contain a lease, and if existing leases have any initial direct costs. The standard will have a material impact on the Company’s consolidated balance sheet but will not have a material impact on the Company’s consolidated statement of operations, consolidated statement of comprehensive loss, or consolidated statement of cash flows. The most significant impact will be the recognition of right-of-use assets and lease liabilities for operating leases as the Company expects the obligations under existing operating leases, as disclosed in Note 9 to the consolidated financial statements, will be reported in the consolidated balance sheet upon adoption. The Company is currently evaluating the potential changes from this guidance to future financial reporting and disclosures and designing and implementing related processes and controls. The Company is still assessing the incremental borrowing rates to be used in determining the quantitative impact of adoption on the Company’s financial position. Recent Accounting Pronouncements to be Adopted in 2020: 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. 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 (in thousands, except per share amounts) Net loss $ (63,828 ) $ (39,714 ) $ (45,562 ) Weighted-average common shares outstanding—basic 38,529 36,827 35,197 Dilutive effect of share equivalents resulting from stock options, RSUs, ESPP common stock warrants, and the Conversion Option of the 2022 Notes — — — Weighted-average common shares outstanding-diluted 38,529 36,827 35,197 Net loss per common share, basic and diluted $ (1.66 ) $ (1.08 ) $ (1.29 ) |
Schedule of Potentially Dilutive Common Stock Equivalents | The following table contains all potentially dilutive common stock equivalents. Year Ended December 31, 2018 2017 2016 (in thousands) Options to purchase common shares 1,824 2,085 2,709 RSUs 1,732 2,315 2,264 Conversion option of the 2022 Notes 967 — — Common stock warrants 244 — — 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, 2018 $ 638 $ 5,514 $ (4,835 ) $ 1,317 Year ended December 31, 2017 $ 617 $ 3,353 $ (3,332 ) $ 638 Year ended December 31, 2016 $ 371 $ 2,517 $ (2,271 ) $ 617 (1) Deductions include actual accounts written-off, net of recoveries. |
Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of the cash, cash equivalents and restricted cash within the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows for the year ended December 31, 2018 and 2017. December 31, 2018 December 31, 2017 (in thousands) Cash and cash equivalents $ 111,489 $ 87,680 Restricted cash 5,175 4,757 Restricted cash, included in other assets 450 347 Total cash, cash equivalents, and restricted cash $ 117,114 $ 92,784 |
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, 2018 and December 31, 2017 are as follows: Year Ended December 31, 2018 2017 (in thousands) Beginning balance $ 1,191 $ 591 Additions 459 580 Accretion 92 46 Settlements — (26 ) Updates to estimated cash flows (318 ) — Ending balance $ 1,424 $ 1,191 |
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, 2018 December 31, (in thousands) Gross capitalized software development costs $ 46,169 $ 33,360 Accumulated amortization (33,423 ) (24,600 ) Capitalized software development costs, net $ 12,746 $ 8,760 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and December 31, 2017: December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents and investments: Money market funds $ 1,579 $ — $ — $ 1,579 Commercial paper — 8,242 — 8,242 Corporate bonds — 70,728 — 70,728 U.S. Treasury securities — 413,241 — 413,241 Restricted cash: Certificates of deposit — 5,625 — 5,625 Total $ 1,579 $ 497,836 $ — $ 499,415 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 |
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, 2018 and 2017: December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value (in thousands) Commercial paper $ 8,256 $ — $ (14 ) $ 8,242 Corporate bonds 70,958 3 (233 ) 70,728 U.S. Treasury securities 413,323 56 (138 ) 413,241 Total $ 492,537 $ 59 $ (385 ) $ 492,211 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 |
Summary of Contractual Maturities of Short and Long Term Investments | The contractual maturities of short-term and long-term investments held at December 31, 2018 and 2017 are as follows: December 31, 2018 December 31, 2017 Amortized Cost Basis Aggregate Fair Value Amortized Cost Basis Aggregate Fair Value ( in thousands) Due within one year $ 481,071 $ 480,761 $ 416,932 $ 416,663 Due after 1 year and within 2 years 11,466 11,450 31,560 31,394 Total $ 492,537 $ 492,211 $ 448,492 $ 448,057 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment as of December 31, 2018 and December 31, 2017 consists of the following: December 31. 2018 2017 (in thousands) Computer equipment & purchased software $ 8,163 $ 4,571 Employee computer equipment 8,972 4,260 Furniture and fixtures 13,019 11,083 Office equipment 2,551 2,620 Leasehold improvements 42,894 33,446 Equipment under capital lease 3,450 3,450 Internal-use software 5,363 2,892 Construction in progress 2,498 3,198 Total property and equipment 86,910 65,520 Less accumulated depreciation (34,442 ) (22,226 ) Property and equipment, net $ 52,468 $ 43,294 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets as of December 31, 2018 and 2017 consist of the following: Weighted Average Remaining Useful Life December 31, 2018 2017 (in thousands) Acquired technology 20 Months $ 7,252 $ 7,252 Accumulated amortization (2,333 ) (940 ) Total $ 4,919 $ 6,312 |
Estimated Future Amortization Expense for Intangible Assets | Estimated future amortization expense for intangible assets as of December 31, 2018 is as follows: Years ended December 31, Amortization Expense (in thousands) 2019 3,112 2020 1,807 Total $ 4,919 |
0.25% Convertible Senior Note_2
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instrument [Line Items] | |
Schedule of Interest Expense | Interest expense related to the 2022 Notes is as follows: Year Ended December 31, 2018 2017 2016 (in thousands) Contractual interest expense $ 1,000 $ 639 $ — Amortization of debt discount 18,923 11,507 — Amortization of issuance costs 1,412 859 — Total interest expense $ 21,335 $ 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, 2018 As of December 31, 2017 (in thousands) Principal $ 400,000 $ 400,000 Unamortized debt discount (75,575 ) (94,498 ) Unamortized issuance costs (5,643 ) (7,055 ) Net carrying amount $ 318,782 $ 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, 2018 As of December 31, 2017 (in thousands) Debt discount for conversion option $ 106,006 106,006 Issuance costs (2,854 ) (2,854 ) Net carrying amount $ 103,152 $ 103,152 |
Segment Information and Geogr_2
Segment Information and Geographic Data (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Revenues by Geographical Region | Revenues by geographical region: Year Ended December 31, 2018 2017 2016 (In thousands) Americas $ 361,136 $ 283,696 $ 219,422 Europe 117,670 70,895 41,616 Asia Pacific 34,174 21,021 9,929 Total $ 512,980 $ 375,612 $ 270,967 Percentage of revenues generated outside of the Americas 30 % 24 % 19 % |
Long Lived Assets by Geographical Region | Total long-lived assets by geographical region: As of December 31, 2018 As of December 31, 2017 (In thousands) Americas $ 35,186 $ 29,764 Europe 13,913 11,257 Asia Pacific 3,369 2,273 Total long lived assets $ 52,468 $ 43,294 Percentage of long lived assets held outside of the Americas 33 % 31 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments | Future minimum payments under all operating and capital lease agreements as of December 31, 2018, are as follows: Operating Capital (in thousands) 2019 $ 27,755 $ 298 2020 33,769 33 2021 35,414 — 2022 35,314 — 2023 35,686 — Thereafter 184,341 — Total $ 352,279 331 Less: Portion representing interest (20 ) Capital lease obligation $ 311 |
Schedule of Future Minimum Payments Under Vendor Commitments | Future minimum payments under all Vendor Commitments as of December 31, 2018, are as follows: Product related obligations INBOUND event obligations (in thousands) 2019 26,462 653 2020 19,000 316 2021 10,000 316 2022 — 653 2023 — 653 Total $ 55,462 $ 2,591 |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017: Cumulative Translation Adjustment Unrealized Gain (L oss) on Investments Total (in thousands) Beginning balance at January 1, 2017 $ (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 ) Other comprehensive income (loss) before reclassifications (776 ) 110 (666 ) Amounts reclassified from accumulated other comprehensive loss — — — Ending balance at December 31, 2018 $ (397 ) $ (326 ) $ (723 ) |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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 and exercise of common stock options are as follows (in thousands): December 31, 2018 December 31, 2017 RSUs 1,983 2,085 Common stock options 1,840 2,315 3,823 4,400 |
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, 2018 2017 2016 ( in thousands) Options $ 5,108 $ 4,948 $ 5,202 ESPP 2,833 1,233 1,093 RSUs 68,320 41,136 26,380 Total stock-based compensation $ 76,261 $ 47,317 $ 32,675 |
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: 2018 2017 2016 (in thousands) Cost of revenue, subscription $ 1,476 $ 658 $ 512 Cost of revenue, service 2,924 2,327 1,640 Research and development 23,328 12,816 8,828 Sales and marketing 31,099 19,016 13,352 General and administrative 17,434 12,500 8,343 Total stock-based compensation $ 76,261 $ 47,317 $ 32,675 |
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, 2018 2017 2016 Risk-free interest rate (%) 2.62-2.85 1.74-2.09 1.38 - 1.41 Expected term (years) 5.06-6.42 5.18-6.21 5.08 - 6.21 Volatility (%) 41.34-43.55 39.4-43.7 38.0 - 41.0 Expected dividends — — — |
Summary of Stock Option Activity | The stock option activity for the year ended December 31, 2018 is as follows: Options (in thousands) Weighted- Average Exercise Price Weighted- Average Remaining Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding—January 1, 2018 2,315 $ 16.69 5.3 $ 165,974 Granted 146 113.95 Exercised (608 ) 17.87 Forfeited/expired (13 ) 32.01 Outstanding—December 31, 2018 1,840 23.89 4.6 $ 187,342 Options vested or expected to vest—December 31, 2018 1,840 $ 23.89 4.6 $ 187,342 Options exercisable—December 31, 2018 1,576 $ 14.38 3.9 $ 175,466 |
Summary of Activity Related to RSUs | The following table summarizes the activity related to RSUs for the year ended December 31, 2018: RSUs Outstanding Shares (in thousands) Weighted- Average Grant Date Fair Value Per Share Unvested and outstanding at January 1, 2018 2,085 $ 54.12 Granted 1,162 110.43 Vested (1,110 ) 58.60 Canceled (154 ) 66.00 Unvested and outstanding at December 31, 2018 1,983 $ 83.67 |
Summary of Activity Related to Employee Stock Purchase Plan | The following table summarizes the activity related to ESPP (in thousands, except the weighted average purchase price): Shares Issued (in thousands) Weighted- Average Purchase Price Total Cash Proceeds (in thousands) 2018 148 80.21 11,863 2017 94 38.83 3,635 2016 70 38.98 2,721 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 (in thousands) United States $ (69,769 ) $ (54,894 ) $ (47,112 ) Foreign 7,809 4,855 2,083 Total $ (61,960 ) $ (50,039 ) $ (45,029 ) |
Components of Income Tax (Provision) Benefit | The (provision) benefit for income taxes consists of the following: Year Ended December 31, 2018 2017 2016 (in thousands) Current income tax provision Federal $ (184 ) $ — $ — State (140 ) (144 ) (95 ) Foreign (1,508 ) (1,077 ) (579 ) Total current income tax provision (1,832 ) (1,221 ) (674 ) Deferred income tax benefit Federal 21 10,435 61 State — 977 — Foreign (57 ) 134 80 Total deferred income tax benefit (36 ) 11,546 141 Total income tax benefit (provision) $ (1,868 ) $ 10,325 $ (533 ) |
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 21% for 2018 and 35% for 2017 and 2016 and the provision for income taxes: Year Ended December 31, 2018 2017 2016 (in thousands) Expected income tax benefit at the federal statutory rate $ 12,955 $ 17,166 $ 15,761 State taxes net of federal benefit 5,155 5,150 916 Stock-based compensation 17,575 10,939 (2,001 ) Difference in foreign tax rates 435 988 415 U.S. tax credits 1,763 1,717 1,609 Convertible debt and acquisition — 11,573 — Federal rate change — (49,123 ) — Transition tax — (1,063 ) — GILTI inclusion (1,177 ) — — Meals & entertainment (1,411 ) (745 ) (612 ) Change in valuation allowance (37,059 ) 13,988 (16,413 ) Other (104 ) (265 ) (208 ) Income tax benefit (provision) $ (1,868 ) $ 10,325 $ (533 ) |
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, 2018 2017 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 118,897 $ 87,521 Research and investment credits 11,154 9,402 Accruals and reserves 7,734 6,627 Depreciation 1,119 911 Stock-based compensation 5,404 4,146 Interest expense 2,466 — Total deferred tax assets 146,774 108,607 Deferred tax liabilities: Intangible assets (1,002 ) (1,273 ) Convertible debt (4,675 ) (5,664 ) Capitalized costs (8,002 ) (4,648 ) Total deferred tax liabilities (13,679 ) (11,585 ) Valuation allowance (132,759 ) (96,630 ) Net deferred tax assets $ 336 $ 392 |
Summary of Activity Related to Unrecognized Tax Benefits | The following summarizes activity related to unrecognized tax benefits: Year Ended December 31, 2018 2017 2016 (in thousands) Unrecognized benefit—beginning of the year $ 2,725 $ 1,742 $ 673 Gross increases—current period positions 1,200 983 1,069 Gross decrease—prior period positions — — — Unrecognized benefit—end of period $ 3,925 $ 2,725 $ 1,742 |
Quarterly Financial Results (_2
Quarterly Financial Results (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 Revenue $ 144,022 $ 131,826 $ 122,576 $ 114,556 Cost of revenue 27,364 25,765 24,851 22,377 Gross profit 116,658 106,061 97,725 92,179 Net loss (11,492 ) (18,663 ) (18,225 ) (15,448 ) Basic and diluted net loss per share $ (0.29 ) $ (0.48 ) $ (0.48 ) $ (0.41 ) 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 ) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | Nov. 30, 2018USD ($) | Dec. 31, 2018USD ($)$ / shares | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)SegmentdReporting_UnitCustomer$ / shares | Dec. 31, 2017USD ($)Customer | Dec. 31, 2016USD ($) | Jan. 01, 2018USD ($) | Dec. 31, 2015USD ($) |
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 letters of credit for leased facilities | $ 5,600,000 | $ 5,100,000 | $ 5,600,000 | $ 5,100,000 | ||||||||||
Impairment charges of long lived assets | 0 | |||||||||||||
Intangible assets with indefinite useful lives | 0 | $ 0 | ||||||||||||
Number of reporting unit | Reporting_Unit | 1 | |||||||||||||
Goodwill impairment | $ 0 | $ 0 | 0 | $ 0 | ||||||||||
Advertising expense | $ 8,400,000 | 5,500,000 | 4,200,000 | |||||||||||
Revenue subscription contract period | one year or less | |||||||||||||
Additions in deferred revenue | $ 46,300,000 | |||||||||||||
Additional Invoicing | 559,300,000 | |||||||||||||
Total revenues | 512,980,000 | 375,612,000 | 270,967,000 | |||||||||||
Deferred revenue, revenue recognized | 138,100,000 | |||||||||||||
Revenue remaining performance obligation, contracts exceeds one year | 126,400,000 | $ 126,400,000 | ||||||||||||
Revenue remaining performance obligation contract period | 1 year | |||||||||||||
Revenue remaining performance obligation percentage recognized | 94.00% | |||||||||||||
Short-term deferred revenue | 183,305,000 | 136,880,000 | $ 183,305,000 | 136,880,000 | ||||||||||
Increase in deferred commission expense | 22,900,000 | |||||||||||||
Incremental costs of deferred sales commission expense | 42,900,000 | |||||||||||||
Amortization of deferred commission expense | 20,000,000 | |||||||||||||
Off-balance sheet risk amount | 0 | $ 0 | ||||||||||||
Accounts receivable payment period | 30 days | |||||||||||||
Capitalized software development costs, exclusive of costs recorded within property and equipment | $ 12,800,000 | 8,200,000 | 6,400,000 | |||||||||||
Amortization of software development costs, exclusive of costs recorded within property and equipment | $ 9,200,000 | 6,300,000 | 5,100,000 | |||||||||||
Minimum percentage chances of tax benefit to be realized on examination | 50.00% | |||||||||||||
Net increase in cash and cash equivalents used in investing activities | $ (71,230,000) | (396,611,000) | (22,829,000) | |||||||||||
Unsatisfied performance obligations for contracts, disclosure description | The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. | |||||||||||||
Cumulative adjustment to retained earnings | (344,384,000) | (286,082,000) | $ (344,384,000) | (286,082,000) | ||||||||||
Sales and marketing | 267,444,000 | 212,859,000 | 162,647,000 | |||||||||||
Total operating expenses | 460,881,000 | 340,019,000 | 253,764,000 | |||||||||||
Income tax (expense) benefit | 1,868,000 | (10,325,000) | 533,000 | |||||||||||
Loss before income tax (expense) benefit | (61,960,000) | (50,039,000) | (45,029,000) | |||||||||||
Net loss | (11,492,000) | $ (18,663,000) | $ (18,225,000) | $ (15,448,000) | (11,535,000) | $ (10,583,000) | $ (9,521,000) | $ (8,075,000) | (63,828,000) | (39,714,000) | (45,562,000) | |||
Comprehensive loss | (64,494,000) | (38,907,000) | (45,621,000) | |||||||||||
Short-term deferred commissions | 23,664,000 | 13,343,000 | 23,664,000 | 13,343,000 | ||||||||||
Total current assets | 712,418,000 | 602,501,000 | 712,418,000 | 602,501,000 | ||||||||||
Long-term deferred commissions | 2,179,000 | 2,277,000 | 2,179,000 | 2,277,000 | ||||||||||
Total assets | 833,953,000 | 712,175,000 | 833,953,000 | 712,175,000 | ||||||||||
Total current liabilities | 237,009,000 | 178,296,000 | 237,009,000 | 178,296,000 | ||||||||||
Total liabilities | 589,312,000 | 501,815,000 | 589,312,000 | 501,815,000 | ||||||||||
Total stockholders' equity | 244,641,000 | 210,360,000 | 244,641,000 | 210,360,000 | 118,700,000 | $ 121,708,000 | ||||||||
Total liabilities and stockholders' equity | 833,953,000 | 712,175,000 | 833,953,000 | 712,175,000 | ||||||||||
Deferred commissions expense | (23,900,000) | (4,004,000) | (453,000) | |||||||||||
Increase in deferred revenue | 49,316,000 | 38,999,000 | 32,311,000 | |||||||||||
Impact on cash flows from operations | 84,851,000 | 49,614,000 | 19,366,000 | |||||||||||
Subscription [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Total revenues | 487,450,000 | 356,727,000 | 254,775,000 | |||||||||||
Professional Services and Other [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Total revenues | 25,530,000 | 18,885,000 | 16,192,000 | |||||||||||
Early Adoption Effect [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Net increase in cash and cash equivalents used in investing activities | 521,000 | 4,600,000 | 128,000 | |||||||||||
Net increase in cash, cash equivalents and restricted cash | 521,000 | $ 4,600,000 | 128,000 | |||||||||||
Accounting Standards Update 2014-09 [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Adjustments to retained earnings | $ 274,000 | |||||||||||||
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Total revenues | (241,000) | |||||||||||||
Short-term deferred revenue | (89,000) | (89,000) | ||||||||||||
Cumulative adjustment to retained earnings | 22,200,000 | 22,200,000 | $ 5,500,000 | |||||||||||
Sales and marketing | (16,700,000) | |||||||||||||
Total operating expenses | (16,700,000) | |||||||||||||
Income tax (expense) benefit | (168,000) | |||||||||||||
Loss before income tax (expense) benefit | (16,500,000) | |||||||||||||
Net loss | (16,700,000) | |||||||||||||
Comprehensive loss | $ (16,700,000) | |||||||||||||
Basic earnings (losses) per share | $ / shares | $ (0.43) | |||||||||||||
Short-term deferred commissions | 4,100,000 | $ 4,100,000 | ||||||||||||
Total current assets | 4,100,000 | 4,100,000 | ||||||||||||
Long-term deferred commissions | 18,100,000 | 18,100,000 | ||||||||||||
Other assets | (98,000) | (98,000) | ||||||||||||
Total assets | 22,100,000 | 22,100,000 | ||||||||||||
Total current liabilities | (89,000) | (89,000) | ||||||||||||
Other liabilities | 8,000 | 8,000 | ||||||||||||
Total liabilities | (81,000) | (81,000) | ||||||||||||
Total stockholders' equity | 22,200,000 | 22,200,000 | ||||||||||||
Total liabilities and stockholders' equity | 22,100,000 | 22,100,000 | ||||||||||||
Deferred commissions expense | 16,700,000 | |||||||||||||
Increase in deferred revenue | 200,000 | |||||||||||||
Decrease in deferred taxes | 200,000 | |||||||||||||
Impact on cash flows from operations | 0 | |||||||||||||
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Subscription [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Total revenues | (613,000) | |||||||||||||
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Professional Services and Other [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Total revenues | $ 372,000 | |||||||||||||
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Previously Reported | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Cumulative adjustment to retained earnings | $ 5,800,000 | |||||||||||||
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 | ||||||||||||
Accrued Expenses and Other Current Liabilities [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Short-term deferred revenue | $ 1,600,000 | $ 1,000,000 | $ 1,600,000 | $ 1,000,000 | ||||||||||
Acquired Technology [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Estimated useful life | 2 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 | $ 2,400,000 | $ 1,600,000 | $ 1,200,000 | |||||||||||
Maximum [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Amortization period of deferred commissions | 3 years | |||||||||||||
Maximum [Member] | Acquired Technology [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Estimated useful life | 3 years | |||||||||||||
Maximum [Member] | Capitalized Software Development Costs [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Property and equipment, estimated useful life | 5 years | |||||||||||||
Minimum [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Amortization period of deferred commissions | 1 year | |||||||||||||
Minimum [Member] | Acquired Technology [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Estimated useful life | 2 years | |||||||||||||
Minimum [Member] | Capitalized Software Development Costs [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Property and equipment, estimated useful life | 2 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 | $ 94.77 | ||||||||||||
Debt instrument, convertible, threshold trading days | d | 20 | |||||||||||||
Debt instrument, convertible, threshold consecutive trading days | d | 30 | |||||||||||||
Percentage of closing price to trigger debt conversion | 130.00% | |||||||||||||
0.25% Convertible Senior Notes Due 2022 as Liability Component [Member] | Maximum [Member] | ||||||||||||||
Schedule Of Accounting Policies [Line Items] | ||||||||||||||
Common stock conversion price | $ / shares | $ 115.83 | $ 115.83 |
Summary of Significant Accoun_5
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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share Basic And Diluted [Abstract] | |||||||||||
Net loss | $ (11,492) | $ (18,663) | $ (18,225) | $ (15,448) | $ (11,535) | $ (10,583) | $ (9,521) | $ (8,075) | $ (63,828) | $ (39,714) | $ (45,562) |
Weighted-average common shares outstanding - basic | 38,529 | 36,827 | 35,197 | ||||||||
Weighted-average common shares outstanding - diluted | 38,529 | 36,827 | 35,197 | ||||||||
Net loss per common share, basic and diluted | $ (0.29) | $ (0.48) | $ (0.48) | $ (0.41) | $ (0.31) | $ (0.29) | $ (0.26) | $ (0.22) | $ (1.66) | $ (1.08) | $ (1.29) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Potentially Dilutive Common Stock Equivalents (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
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 | 1,824 | 2,085 | 2,709 |
Conversion Option of the 2022 Notes [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 967 | ||
RSUs [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 1,732 | 2,315 | 2,264 |
Common Stock Warrants [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 244 | ||
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 Accoun_7
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Receivables [Abstract] | |||
Allowance for doubtful accounts, Beginning Balance | $ 638 | $ 617 | $ 371 |
Allowance for doubtful accounts, Charged to Statement of Operations | 5,514 | 3,353 | 2,517 |
Allowance for doubtful accounts, Deductions | (4,835) | (3,332) | (2,271) |
Allowance for doubtful accounts, Ending Balance | $ 1,317 | $ 638 | $ 617 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Cash And Cash Equivalents [Abstract] | ||
Cash and cash equivalents | $ 111,489 | $ 87,680 |
Restricted cash | 5,175 | 4,757 |
Restricted cash, included in other assets | 450 | $ 347 |
Restricted Cash, Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssets | |
Total cash, cash equivalents, and restricted cash | $ 117,114 | $ 92,784 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Schedule of Property Plant and Equipment Useful Life (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
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 Accou_10
Summary of Significant Accounting Policies - Schedule of Changes in Asset Retirement Obligations (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Beginning balance | $ 1,191 | $ 591 |
Additions | 459 | 580 |
Accretion | 92 | 46 |
Settlements | (26) | |
Updates to estimated cash flows | (318) | |
Ending balance | $ 1,424 | $ 1,191 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Additional Information1 (Detail) | Dec. 31, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-01-01 | |
Schedule Of Accounting Policies [Line Items] | |
Revenue remaining performance obligations recognition period | 24 months |
Summary of Significant Accou_12
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, 2018 | Dec. 31, 2017 |
Capitalized Computer Software Net [Abstract] | ||
Gross capitalized software development costs | $ 46,169 | $ 33,360 |
Accumulated amortization | (33,423) | (24,600) |
Capitalized software development costs, net | $ 12,746 | $ 8,760 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Fair Value of Financial Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of short and long term investments | $ 492,211 | $ 448,057 |
Fair value of financial assets | 499,415 | 466,007 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 1,579 | 12,845 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of financial assets | 497,836 | 453,162 |
Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of cash and cash equivalents | 1,579 | 12,845 |
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 | 1,579 | 12,845 |
Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of short and long term investments | 8,242 | 5,867 |
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 | 8,242 | 5,867 |
Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of short and long term investments | 70,728 | 81,668 |
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 | 70,728 | 81,668 |
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 | |
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 | |
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 | 413,241 | 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 | 413,241 | 356,535 |
Certificates of Deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of restricted cash | 5,625 | 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 | $ 5,625 | $ 5,105 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Other assets | $ 6,888 | $ 4,964 |
Strategic Investments [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Other assets | 4,000 | $ 3,500 |
2022 Notes [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Fair value of notes | $ 575,200 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Summary of Composition of Short and Long Term Investments (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 492,537 | $ 448,492 |
Unrealized Gains | 59 | 8 |
Unrealized Losses | (385) | (443) |
Aggregate Fair Value | 492,211 | 448,057 |
Commercial Paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 8,256 | 5,874 |
Unrealized Losses | (14) | (7) |
Aggregate Fair Value | 8,242 | 5,867 |
Corporate Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 70,958 | 81,947 |
Unrealized Gains | 3 | |
Unrealized Losses | (233) | (279) |
Aggregate Fair Value | 70,728 | 81,668 |
US Government Agency Obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 4,000 | |
Unrealized Losses | (13) | |
Aggregate Fair Value | 3,987 | |
US Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 413,323 | 356,671 |
Unrealized Gains | 56 | 8 |
Unrealized Losses | (138) | (144) |
Aggregate Fair Value | $ 413,241 | $ 356,535 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Summary of Contractual Maturities of Short and Long Term Investments (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Amortized Cost Basis, Due within one year | $ 481,071 | $ 416,932 |
Amortized Cost Basis, Due after 1 year and within 2 years | 11,466 | 31,560 |
Amortized Cost | 492,537 | 448,492 |
Aggregate Fair Value, Due within one year | 480,761 | 416,663 |
Aggregate Fair Value, Due after 1 year and within 2 years | 11,450 | 31,394 |
Aggregate Fair Value, Total | $ 492,211 | $ 448,057 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 86,910 | $ 65,520 |
Less accumulated depreciation | (34,442) | (22,226) |
Property and equipment, net | 52,468 | 43,294 |
Computer Equipment and Purchased Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 8,163 | 4,571 |
Employee Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 8,972 | 4,260 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 13,019 | 11,083 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,551 | 2,620 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 42,894 | 33,446 |
Equipment under Capital Lease [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,450 | 3,450 |
Internal-Use Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 5,363 | 2,892 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 2,498 | $ 3,198 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | $ 12.9 | $ 9.4 | $ 5.9 |
Accumulated depreciation | 3.1 | 2.4 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized asset retirement costs | $ 1.3 | $ 1.1 |
Business Acquisition and Purc_2
Business Acquisition and Purchase of Technology - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 20, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Cash consideration paid | $ 9,415 | |||
Goodwill | $ 14,950 | $ 14,950 | ||
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 | |||
Business combination potential consideration earned | $ 3,800 | |||
Business combination remaining potential consideration | $ 200 | |||
Remaining potential consideration recording period | 2 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 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Finite Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (2,333) | $ (940) |
Intangible assets, net | 4,919 | 6,312 |
Acquired Technology [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets | $ 7,252 | $ 7,252 |
Acquired intangible assets, Weighted average remaining useful life | 20 months |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 1,400 | $ 103 | $ 84 | |
Acquired Technology [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Estimated useful life | 2 years | |||
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 |
Intangible Assets - Estimated F
Intangible Assets - Estimated Future Amortization Expense for Intangible Assets (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2,019 | $ 3,112 |
2,020 | 1,807 |
Total | $ 4,919 |
0.25% Convertible Senior Note_3
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant - Additional Information (Detail) $ / shares in Units, shares in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
May 31, 2017USD ($)d$ / sharesshares | Dec. 31, 2018dshares | Dec. 31, 2018shares | Dec. 31, 2017USD ($)$ / sharesshares | |
Debt Instrument [Line Items] | ||||
Net proceeds from the debt offering | $ 389,233,000 | |||
Common stock for issuance upon conversion | shares | 3,823 | 3,823 | 4,400 | |
Sales of warrants | $ 58,880,000 | |||
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, convertible, threshold trading days | d | 20 | |||
Debt instrument, convertible, threshold consecutive trading days | d | 30 | |||
Common stock for issuance upon conversion | shares | 4,200 | |||
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 | 4,200 | 4,200 | 4,200 | |
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 | |||
Reserved common stock for underlying warrants | shares | 4,200 | 4,200 | ||
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 holders option to purchase number of shares of company’s common stock | shares | 4,200 | 4,200 | 4,200 | |
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% | 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 Note_4
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant - Schedule of Net Carrying Amount of Liability Component (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Net carrying amount | $ 318,782 | $ 298,447 |
0.25% Convertible Senior Notes Due 2022 as Liability Component [Member] | ||
Debt Instrument [Line Items] | ||
Principal | 400,000 | 400,000 |
Unamortized debt discount | (75,575) | (94,498) |
Unamortized issuance costs | (5,643) | (7,055) |
Net carrying amount | $ 318,782 | $ 298,447 |
0.25% Convertible Senior Note_5
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] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Debt discount for conversion option | $ 106,006 | $ 106,006 |
Issuance costs | (2,854) | (2,854) |
Net carrying amount | $ 103,152 | $ 103,152 |
0.25% Convertible Senior Note_6
0.25% Convertible Senior Notes, Convertible Note Hedge and Warrant - Schedule of Interest Expense (Detail) - 0.25% Convertible Senior Notes Due 2022 [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Contractual interest expense | $ 1,000 | $ 639 |
Amortization of debt discount | 18,923 | 11,507 |
Amortization of issuance costs | 1,412 | 859 |
Total interest expense | $ 21,335 | $ 13,005 |
0.25% Convertible Senior Note_7
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 |
Segment Information and Geogr_3
Segment Information and Geographic Data - Additional Information (Detail) - Segment | 12 Months Ended | ||
Dec. 31, 2018 | 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 | 37.00% | 33.00% | 28.00% |
Segment Information and Geogr_4
Segment Information and Geographic Data - Revenues by Geographical Region (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Total revenues | $ 512,980 | $ 375,612 | $ 270,967 |
Americas [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 361,136 | 283,696 | 219,422 |
Europe [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 117,670 | 70,895 | 41,616 |
Asia Pacific [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | $ 34,174 | $ 21,021 | $ 9,929 |
Revenue [Member] | Outside Of Americas [Member] | Geographic Concentration Risk [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage of revenues generated outside of the Americas | 30.00% | 24.00% | 19.00% |
Segment Information and Geogr_5
Segment Information and Geographic Data - Long Lived Assets by Geographical Region (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Total long lived assets | $ 52,468 | $ 43,294 |
Americas [Member] | ||
Segment Reporting Information [Line Items] | ||
Total long lived assets | 35,186 | 29,764 |
Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Total long lived assets | 13,913 | 11,257 |
Asia Pacific [Member] | ||
Segment Reporting Information [Line Items] | ||
Total long lived assets | $ 3,369 | $ 2,273 |
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 | 33.00% | 31.00% |
Commitments and Contingencies-
Commitments and Contingencies- Additional Information (Detail) - USD ($) $ in Thousands | Feb. 12, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Operating And Capital Leased Assets [Line Items] | ||||
Increase in future lease commitments | $ 84,200 | |||
Improvement reimbursements from landlords | 12,800 | |||
Rent expense | 23,100 | $ 18,900 | $ 13,800 | |
Deferred rent, net of current portion | 27,000 | $ 19,000 | ||
Rent payable | $ 352,279 | |||
Subsequent Event [Member] | Lease Commencement, April 2019 [Member] | ||||
Operating And Capital Leased Assets [Line Items] | ||||
Lease agreement period | 3 years | |||
Lease commencement date | 2019-04 | |||
Rent payable | $ 1,700 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Payments (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Capital Leases, 2019 | $ 298 |
Capital Leases, 2020 | 33 |
Capital Leases, Total | 331 |
Less: Portion representing interest | (20) |
Capital lease obligation | 311 |
Operating, 2019 | 27,755 |
Operating, 2020 | 33,769 |
Operating, 2021 | 35,414 |
Operating, 2022 | 35,314 |
Operating, 2023 | 35,686 |
Operating, Thereafter | 184,341 |
Operating, Total | $ 352,279 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Payments Under Vendor Commitments (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Product Related Obligations [Member] | |
Long Term Purchase Commitment [Line Items] | |
Vendor Commitments, 2019 | $ 26,462 |
Vendor Commitments, 2020 | 19,000 |
Vendor Commitments, 2021 | 10,000 |
Vendor Commitments, Total | 55,462 |
INBOUND Event Obligations [Member] | |
Long Term Purchase Commitment [Line Items] | |
Vendor Commitments, 2019 | 653 |
Vendor Commitments, 2020 | 316 |
Vendor Commitments, 2021 | 316 |
Vendor Commitments, 2022 | 653 |
Vendor Commitments, 2023 | 653 |
Vendor Commitments, Total | $ 2,591 |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance, Amount | $ 210,360 | $ 118,700 |
Other comprehensive income (loss) before reclassifications | (666) | 807 |
Ending Balance, Amount | 244,641 | 210,360 |
Cumulative Translation Adjustment [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance, Amount | 379 | (589) |
Other comprehensive income (loss) before reclassifications | (776) | 968 |
Ending Balance, Amount | (397) | 379 |
Unrealized Gain (Loss) on Investments [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance, Amount | (436) | (275) |
Other comprehensive income (loss) before reclassifications | 110 | (161) |
Ending Balance, Amount | (326) | (436) |
Accumulated Other Comprehensive Loss [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance, Amount | (57) | (864) |
Ending Balance, Amount | $ (723) | $ (57) |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Sep. 25, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 07, 2019 |
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 | 1,840,000 | 2,315,000 | |||
Unrecognized compensation costs | $ 7.6 | ||||
Unrecognized compensation costs, weighted average period | 2 years 8 months 12 days | ||||
Percentage of discount allowed to employee to purchase common stock | 15.00% | ||||
Number of shares authorizes for issuance | 3,823,000 | 4,400,000 | |||
ESPP [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Number of shares authorizes for issuance | 1,785,021,000 | ||||
Internal-Use Software [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Capitalized software development costs excluded from stock based compensation | $ 2.4 | $ 1.6 | $ 1.2 | ||
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 | $ 150.1 | ||||
Weighted average period of RSU | 2 years 8 months 12 days | ||||
Number of RSUs expected to vest | 2,000,000 | ||||
Aggregate intrinsic value of RSUs expected to vest | $ 248.9 | ||||
Total fair value of RSUs vested | $ 65 | $ 48.6 | $ 24 | ||
Number of shares authorizes for issuance | 1,983,000 | 2,085,000 | |||
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 | $ 51.48 | $ 24.56 | $ 16.97 | ||
Number of shares authorizes for issuance | 1,840,000 | 2,315,000 | |||
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 | 1,300,000 | ||||
2007 Equity Incentive Plan [Member] | RSUs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Number of Shares outstanding | 0 | ||||
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 | 563,000 | ||||
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 Stoc_4
Stockholders' Equity and Stock-Based Compensation - Summary of Number of Shares of Common Stock Reserved (Detail) - shares shares in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for the potential conversion | 3,823 | 4,400 |
RSUs [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for the potential conversion | 1,983 | 2,085 |
Common Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for the potential conversion | 1,840 | 2,315 |
Stockholders' Equity and Stoc_5
Stockholders' Equity and Stock-Based Compensation - Schedule of Stock Compensation Expense by Award Type (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | $ 76,261 | $ 47,317 | $ 32,675 |
ESPP [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 2,833 | 1,233 | 1,093 |
Common Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 5,108 | 4,948 | 5,202 |
RSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | $ 68,320 | $ 41,136 | $ 26,380 |
Stockholders' Equity and Stoc_6
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | $ 76,261 | $ 47,317 | $ 32,675 |
Cost of Revenue, Subscription [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 1,476 | 658 | 512 |
Cost of Revenue, Service [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 2,924 | 2,327 | 1,640 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 23,328 | 12,816 | 8,828 |
Sales and Marketing [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 31,099 | 19,016 | 13,352 |
General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | $ 17,434 | $ 12,500 | $ 8,343 |
Stockholders' Equity and Stoc_7
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate (%) | 2.62% | 1.74% | 1.38% |
Expected term (years) | 5 years 21 days | 5 years 2 months 4 days | 5 years 29 days |
Volatility (%) | 41.34% | 39.40% | 38.00% |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate (%) | 2.85% | 2.09% | 1.41% |
Expected term (years) | 6 years 5 months 1 day | 6 years 2 months 15 days | 6 years 2 months 15 days |
Volatility (%) | 43.55% | 43.70% | 41.00% |
Stockholders' Equity and Stoc_8
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, 2018 | Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Number of Shares, Beginning balance | 2,315 | |
Number of Shares, Granted | 146 | |
Number of Shares, Exercised | (608) | |
Number of Shares, Forfeited/Expired | (13) | |
Number of Shares, Ending balance | 1,840 | 2,315 |
Number of Shares, Vested and expected to vest | 1,840 | |
Number of Shares, Exercisable | 1,576 | |
Weighted Average Exercise Price, Beginning balance | $ 16.69 | |
Weighted Average Exercise Price, Granted | 113.95 | |
Weighted Average Exercise Price, Exercised | 17.87 | |
Weighted Average Exercise Price, Forfeited/ Expired | 32.01 | |
Weighted Average Exercise Price , Ending balance | 23.89 | $ 16.69 |
Weighted Average Exercise Price, Vested and expected to vest | 23.89 | |
Weighted Average Exercise Price, Exercisable | $ 14.38 | |
Weighted Average Remaining Life, Outstanding | 4 years 7 months 6 days | 5 years 3 months 18 days |
Weighted Average Remaining Life, Options vested or expected to vest | 4 years 7 months 6 days | |
Weighted Average Remaining Life, Options exercisable | 3 years 10 months 24 days | |
Aggregate Intrinsic Value, Outstanding | $ 187,342 | $ 165,974 |
Aggregate Intrinsic Value, Options vested or expected to vest | 187,342 | |
Aggregate Intrinsic Value, Options exercisable | $ 175,466 |
Stockholders' Equity and Stoc_9
Stockholders' Equity and Stock-Based Compensation - Summary of Activity Related to RSUs (Detail) - RSUs [Member] shares in Thousands | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted Shares, Beginning balance | shares | 2,085 |
Shares, Granted | shares | 1,162 |
Shares, Vested | shares | (1,110) |
Shares, Canceled | shares | (154) |
Restricted shares, Ending balance | shares | 1,983 |
Weighted average grant date fair value, Beginning balance | $ / shares | $ 54.12 |
Weighted- Average Grant Date Fair Value, Granted | $ / shares | 110.43 |
Weighted- Average Grant Date Fair Value, Vested | $ / shares | 58.60 |
Weighted- Average Grant Date Fair, Canceled | $ / shares | 66 |
Weighted average grant date fair value, Ending balance | $ / shares | $ 83.67 |
Stockholders' Equity and Sto_10
Stockholders' Equity and Stock-Based Compensation - 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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares Issued | 148 | 94 | 70 |
Weighted- Average Purchase Price | $ 80.21 | $ 38.83 | $ 38.98 |
Total Cash Proceeds | $ 11,863 | $ 3,635 | $ 2,721 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (69,769) | $ (54,894) | $ (47,112) |
Foreign | 7,809 | 4,855 | 2,083 |
Total | $ (61,960) | $ (50,039) | $ (45,029) |
Income Taxes - Components of In
Income Taxes - Components of Income Tax (Provision) Benefit (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current income tax provision | |||
Federal | $ (184) | ||
State | (140) | $ (144) | $ (95) |
Foreign | (1,508) | (1,077) | (579) |
Total current income tax provision | (1,832) | (1,221) | (674) |
Deferred income tax benefit | |||
Federal | 21 | 10,435 | 61 |
State | 977 | ||
Foreign | (57) | 134 | 80 |
Total deferred income tax benefit | (36) | 11,546 | 141 |
Total income tax benefit (provision) | $ (1,868) | $ 10,325 | $ (533) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation Of Income Taxes [Line Items] | |||
Federal statutory income tax rate | 21.00% | 35.00% | 35.00% |
Increase in valuation allowance | $ 36,100,000 | $ 5,500,000 | $ 16,500,000 |
Valuation allowance changes, description | The Company does not expect any significant changes in its valuation allowance positions within the next 12 months. | ||
Federal net operating loss carryforwards | $ 479,500,000 | ||
State net operating loss carryforwards | 301,400,000 | ||
Research and development credits | $ 11,154,000 | $ 9,402,000 | |
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] | |||
Net operating loss, carryforwards, period | 20 years | ||
Net operating loss carryforwards, expiration year | Dec. 31, 2037 | ||
Interest expense carryforward | $ 10,000,000 | ||
Research and development credits | $ 6,800,000 | ||
Research and development credit carryforwards, expiration year | Dec. 31, 2038 | ||
State [Member] | |||
Reconciliation Of Income Taxes [Line Items] | |||
Net operating loss carryforwards, expiration year | Dec. 31, 2038 | ||
Research and development credits | $ 3,500,000 | ||
Research and development credit carryforwards, expiration year | Dec. 31, 2033 | ||
Investments credits | $ 932,000 | ||
Ireland [Member] | Earliest Tax Year [Member] | |||
Reconciliation Of Income Taxes [Line Items] | |||
Open tax year | 2,014 | ||
Ireland [Member] | Latest Tax Year [Member] | |||
Reconciliation Of Income Taxes [Line Items] | |||
Open tax year | 2,018 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Expected income tax benefit at the federal statutory rate | $ 12,955 | $ 17,166 | $ 15,761 |
State taxes net of federal benefit | 5,155 | 5,150 | 916 |
Stock-based compensation | 17,575 | 10,939 | (2,001) |
Difference in foreign tax rates | 435 | 988 | 415 |
U.S. tax credits | 1,763 | 1,717 | 1,609 |
Convertible debt and acquisition | 11,573 | ||
Federal rate change | (49,123) | ||
Transition tax | (1,063) | ||
GILTI inclusion | (1,177) | ||
Meals & entertainment | (1,411) | (745) | (612) |
Change in valuation allowance | (37,059) | 13,988 | (16,413) |
Other | (104) | (265) | (208) |
Total income tax benefit (provision) | $ (1,868) | $ 10,325 | $ (533) |
Income Taxes - Components of th
Income Taxes - Components of the Company's Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 118,897 | $ 87,521 |
Research and investment credits | 11,154 | 9,402 |
Accruals and reserves | 7,734 | 6,627 |
Depreciation | 1,119 | 911 |
Stock-based compensation | 5,404 | 4,146 |
Interest expense | 2,466 | |
Total deferred tax assets | 146,774 | 108,607 |
Deferred tax liabilities: | ||
Intangible assets | (1,002) | (1,273) |
Convertible debt | (4,675) | (5,664) |
Capitalized costs | (8,002) | (4,648) |
Total deferred tax liabilities | (13,679) | (11,585) |
Valuation allowance | (132,759) | (96,630) |
Net deferred tax assets | $ 336 | $ 392 |
Income Taxes - Summary of Activ
Income Taxes - Summary of Activity Related to Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized benefit - beginning of the year | $ 2,725 | $ 1,742 | $ 673 |
Gross increases-current period positions | 1,200 | 983 | 1,069 |
Unrecognized benefit - end of period | $ 3,925 | $ 2,725 | $ 1,742 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Postemployment Benefits [Abstract] | |||
Employer contribution to defined contribution savings plan | $ 4 | $ 2.9 | $ 2.1 |
Quarterly Financial Results (_3
Quarterly Financial Results (Unaudited) - Schedule of Quarterly Financial Results (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 144,022 | $ 131,826 | $ 122,576 | $ 114,556 | $ 106,541 | $ 97,726 | $ 89,093 | $ 82,252 | |||
Cost of revenue | 27,364 | 25,765 | 24,851 | 22,377 | 21,056 | 19,010 | 18,591 | 17,072 | |||
Gross profit | 116,658 | 106,061 | 97,725 | 92,179 | 85,485 | 78,716 | 70,502 | 65,180 | $ 412,623 | $ 299,883 | $ 209,102 |
Net loss | $ (11,492) | $ (18,663) | $ (18,225) | $ (15,448) | $ (11,535) | $ (10,583) | $ (9,521) | $ (8,075) | $ (63,828) | $ (39,714) | $ (45,562) |
Basic and diluted net loss per share | $ (0.29) | $ (0.48) | $ (0.48) | $ (0.41) | $ (0.31) | $ (0.29) | $ (0.26) | $ (0.22) | $ (1.66) | $ (1.08) | $ (1.29) |