Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-36350 | |
Entity Registrant Name | Q2 Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-2706637 | |
Entity Address, Address Line One | 10355 Pecan Park Boulevard | |
Entity Address, City or Town | Austin, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78729 | |
City Area Code | 833 | |
Local Phone Number | 444-3469 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | QTWO | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Smaller Reporting Company | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock Shares Outstanding | 60,099,512 | |
Entity Central Index Key | 0001410384 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 274,522 | $ 229,655 |
Restricted cash | 4,257 | 3,977 |
Investments | 63,939 | 94,353 |
Accounts receivable, net | 54,292 | 42,899 |
Contract assets, current portion, net | 8,579 | 9,193 |
Prepaid expenses and other current assets | 15,542 | 11,625 |
Deferred solution and other costs, current portion | 28,355 | 27,521 |
Deferred implementation costs, current portion | 9,012 | 8,741 |
Total current assets | 458,498 | 427,964 |
Property and equipment, net | 37,871 | 41,178 |
Right of use assets | 34,957 | 35,453 |
Deferred solution and other costs, net of current portion | 31,861 | 26,090 |
Deferred implementation costs, net of current portion | 22,172 | 21,480 |
Intangible assets, net | 115,249 | 121,572 |
Goodwill | 512,869 | 512,869 |
Contract assets, net of current portion and allowance | 11,702 | 12,210 |
Other long-term assets | 3,208 | 2,609 |
Total assets | 1,228,387 | 1,201,425 |
Current liabilities: | ||
Accounts payable | 12,599 | 19,353 |
Accrued liabilities | 23,226 | 16,471 |
Accrued compensation | 13,810 | 26,580 |
Deferred revenues, current portion | 132,387 | 118,723 |
Lease liabilities, current portion | 10,630 | 10,436 |
Total current liabilities | 192,652 | 191,563 |
Convertible notes, net of current portion | 490,960 | 490,464 |
Deferred revenues, net of current portion | 26,851 | 17,350 |
Lease liabilities, net of current portion | 44,429 | 45,588 |
Other long-term liabilities | 8,524 | 7,981 |
Total liabilities | 763,416 | 752,946 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Preferred stock: $0.0001 par value; 5,000 shares authorized, no shares issued or outstanding as of March 31, 2024 and December 31, 2023 | 0 | 0 |
Common stock: $0.0001 par value; $150,000 shares authorized, $60,099 issued and outstanding as of March 31, 2024 and $59,031 shares issued and outstanding as of December 31, 2023 | 6 | 6 |
Additional paid-in capital | 1,105,808 | 1,075,278 |
Accumulated other comprehensive loss | (1,306) | (1,111) |
Accumulated deficit | (639,537) | (625,694) |
Total stockholders' equity | 464,971 | 448,479 |
Total liabilities and stockholders' equity | $ 1,228,387 | $ 1,201,425 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 60,099,000 | 59,031,000 |
Common stock, shares outstanding (in shares) | 60,099,000 | 59,031,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenues | $ 165,508 | $ 153,008 |
Cost of revenues | 83,256 | 79,711 |
Gross profit | 82,252 | 73,297 |
Operating expenses: | ||
Sales and marketing | 25,445 | 28,144 |
Research and development | 34,862 | 34,425 |
General and administrative | 30,176 | 24,692 |
Transaction-related costs | 0 | 12 |
Amortization of acquired intangibles | 4,828 | 5,262 |
Lease and other restructuring charges | 1,126 | 1,961 |
Total operating expenses | 96,437 | 94,496 |
Loss from operations | (14,185) | (21,199) |
Other income (expense): | ||
Interest and other income | 3,189 | 2,276 |
Interest and other expense | (1,292) | (1,444) |
Gain on extinguishment of debt | 0 | 19,869 |
Total other income (expense), net | 1,897 | 20,701 |
Loss before income taxes | (12,288) | (498) |
Provision for income taxes | (1,555) | (18) |
Net loss | (13,843) | (516) |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on available-for-sale investments | 126 | 1,036 |
Foreign currency translation adjustment | (321) | (17) |
Comprehensive income (loss) | $ (14,038) | $ 503 |
Net loss per common share, basic (usd per share) | $ (0.23) | $ (0.01) |
Net loss per common share, diluted (usd per share) | $ (0.23) | $ (0.01) |
Weighted average common shares outstanding, basic and diluted | ||
Weighted-average common shares outstanding, basic (in shares) | 59,446 | 57,885 |
Weighted-average common shares outstanding, diluted (in shares) | 59,446 | 57,885 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common stock and additional paid-in capital: | Accumulated deficit: | Accumulated other comprehensive income (loss): | Common stock |
Beginning balances at Dec. 31, 2022 | $ 419,024 | $ 982,306 | $ (560,310) | $ (2,972) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation expense | 19,345 | ||||
Exercise of stock options | 90 | ||||
Settlement of capped calls | 139 | ||||
Net loss | (516) | (516) | |||
Other comprehensive income (loss) | 1,019 | ||||
Ending balances at Mar. 31, 2023 | 439,101 | 1,001,880 | (560,826) | (1,953) | |
Common stock, beginning balance (in shares) at Dec. 31, 2022 | 57,735 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options (in shares) | 4 | ||||
Shares issued for the vesting of restricted stock awards (in shares) | 459 | ||||
Common stock, ending balance (in shares) at Mar. 31, 2023 | 58,198 | ||||
Beginning balances at Dec. 31, 2023 | 448,479 | 1,075,284 | (625,694) | (1,111) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation expense | 22,126 | ||||
Exercise of stock options | 8,404 | ||||
Settlement of capped calls | 0 | ||||
Net loss | (13,843) | (13,843) | |||
Other comprehensive income (loss) | (195) | ||||
Ending balances at Mar. 31, 2024 | $ 464,971 | $ 1,105,814 | $ (639,537) | $ (1,306) | |
Common stock, beginning balance (in shares) at Dec. 31, 2023 | 59,031 | 59,031 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options (in shares) | 234 | ||||
Shares issued for the vesting of restricted stock awards (in shares) | 834 | ||||
Common stock, ending balance (in shares) at Mar. 31, 2024 | 60,099 | 60,099 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Cash flows from operating activities: | |||
Net loss | $ (13,843) | $ (516) | |
Adjustments to reconcile net loss to net cash from operating activities: | |||
Amortization of deferred implementation, solution and other costs | 6,411 | 6,069 | |
Depreciation and amortization | 17,523 | 17,543 | |
Amortization of debt issuance costs | 496 | 618 | |
Amortization of premiums and discounts on investments | (371) | (1,097) | |
Stock-based compensation expense | 20,801 | 18,086 | |
Deferred income taxes | (269) | (526) | |
Gain on extinguishment of debt | 0 | (19,312) | |
Lease impairments | 542 | 1,301 | |
Other non-cash items | (137) | 275 | |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (11,303) | 6,919 | |
Prepaid expenses and other current assets | (3,940) | (4,638) | |
Deferred solution and other costs | (9,747) | (12,190) | |
Deferred implementation costs | (3,750) | (3,537) | |
Contract assets, net | 1,121 | 622 | |
Other long-term assets | 752 | 1,443 | |
Accounts payable | (6,431) | 2,218 | |
Accrued liabilities | (6,861) | (13,123) | |
Deferred revenues | 23,168 | 6,215 | |
Deferred rent and other long-term liabilities | (726) | (2,476) | |
Net cash provided by operating activities | 13,436 | 3,894 | |
Cash flows from investing activities: | |||
Purchases of investments | (75) | (42,831) | |
Maturities of investments | 30,986 | 127,904 | |
Purchases of property and equipment | (1,405) | (1,032) | |
Capitalized software development costs | (6,010) | (6,049) | |
Net cash provided by investing activities | 23,496 | 77,992 | |
Cash flows from financing activities: | |||
Payment for maturity of 2023 convertible notes | 0 | (10,908) | |
Payment for repurchases of convertible notes | 0 | (149,640) | |
Proceeds from capped calls related to convertible notes | 0 | 139 | |
Proceeds from the exercise of stock options and ESPP | 8,404 | 90 | |
Net cash provided by (used in) financing activities | 8,404 | (160,319) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (189) | 60 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 45,147 | (78,373) | |
Cash, cash equivalents and restricted cash, beginning of period | 233,632 | 201,902 | $ 201,902 |
Cash, cash equivalents and restricted cash, end of period | 278,779 | 123,529 | $ 233,632 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Property and equipment acquired and included in accounts payable and accrued liabilities | 128 | 1,886 | |
Stock-based compensation for capitalized software development | 803 | 769 | |
Capitalized software development costs included in accounts payable and accrued liabilities | $ 0 | $ 468 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Q2 Holdings, Inc. and its wholly-owned subsidiaries, collectively the Company, is a leading provider of digital banking and lending solutions to financial institutions, financial technology companies, or FinTechs, and alternative finance companies, or Alt-FIs, wishing to incorporate banking into their customer engagement and servicing strategies. The Company's solutions transform the ways in which its customers engage with account holders and end users, or End Users, enabling them to deliver robust suites of digital banking, digital lending and relationship pricing, and banking-as-a-service, or BaaS, services that make it possible for account holders and End Users to transact and engage anytime, anywhere and on any device. The Company delivers its solutions to the substantial majority of its customers using a software-as-a-service, or SaaS, model under which its customers pay subscription fees for the use of the Company's solutions. The Company was incorporated in Delaware in March 2005 and is a holding company that owns 100% of the outstanding capital stock of Q2 Software, Inc. The Company's headquarters are located in Austin, Texas. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation These interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, and Securities and Exchange Commission, or SEC, requirements for interim financial statements. The interim unaudited condensed consolidated financial statements include the accounts of Q2 Holdings, Inc. and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In the Company's opinion, the interim unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation. Certain information and disclosures normally included in the notes to the annual consolidated financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the accompanying notes for the fiscal year ended December 31, 2023, which are included in the Company's Annual Report on Form 10-K, filed with the SEC on February 21, 2024. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other period. Use of Estimates The preparation of the interim unaudited condensed 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 interim unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses. Significant items subject to such estimates include: revenue recognition; estimate of credit losses; fair value of certain stock awards issued; the carrying value of goodwill; the fair value of acquired intangibles; the useful lives of property and equipment and long-lived intangible assets; the impairment assessment of long-lived assets; and income taxes. In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from those estimates. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, restricted cash, investments, accounts receivable and contract assets. The Company's cash and cash equivalents, restricted cash and investments are placed with high credit quality financial institutions and issuers, and at times may exceed federally insured limits. The Company has not experienced any loss relating to cash and cash equivalents or restricted cash in these accounts. The Company provides credit, in the normal course of business, to a majority of its customers. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. No individual customer accounted for 10% or more of revenues for each of the three months ended March 31, 2024 and 2023. No customer accounted for 10% or more of accounts receivable, net as of March 31, 2024 and December 31, 2023. Summary of Significant Accounting Policies There were no material changes to our significant accounting policies during the three months ended March 31, 2024 compared to the significant accounting policies described in our Form 10-K. Basic and Diluted Net Loss per Common Share The following table sets forth the computations of net loss per share for the periods listed: Three Months Ended March 31, 2024 2023 Numerator: Net loss $ (13,843) $ (516) Denominator: Weighted-average common shares outstanding, basic and diluted 59,446 57,885 Net loss per common share, basic and diluted $ (0.23) $ (0.01) Due to net losses for the three months ended March 31, 2024 and 2023, basic and diluted loss per share were the same, as the effect of all potentially dilutive securities would have been anti-dilutive. The dilutive impact of the convertible senior notes was calculated using the if-converted method. The following table sets forth the anti-dilutive common share equivalents for the periods listed: As of March 31, 2024 2023 Stock options, restricted stock units, market stock units and performance stock units 5,341 5,374 Shares issuable pursuant to the ESPP 70 127 Shares related to convertible notes 4,794 5,798 10,205 11,299 Recent Accounting Pronouncements In November 2023, the Financial Accounting Standard Board, or FASB, issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. The ASU is effective for fiscal years beginning after December 15, 2023 on a retrospective basis, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvement to Income Tax Disclosures" which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The ASU is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 3. Revenue Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services over the term of the agreement, generally when the Company's solutions are implemented and made available to the customers. The promised consideration may include fixed amounts, variable amounts or both. Revenues are recognized net of sales credits and allowances. Disaggregation of Revenue Revenue-generating activities are directly related to the sale, implementation and support of the Company's solutions within a single operating segment. The Company derives the majority of its revenues from subscription fees for the use of its solutions hosted in either the Company's data centers or with cloud-based service providers, transactional revenue from bill-pay solutions, revenues for professional services and implementation services related to the Company's solutions and certain third-party related pass-through fees. The following table disaggregates the Company's revenue by major source: Three Months Ended March 31, 2024 2023 Subscription $ 130,357 $ 115,189 Transactional 17,051 16,261 Services and Other 18,100 21,558 Total Revenues $ 165,508 $ 153,008 Deferred Revenues The net increase in the deferred revenue balance for the three months ended March 31, 2024 was primarily driven by the amounts due from customers in advance of satisfying the Company's performance obligations of $189.8 million for current year invoices, partially offset by the recognition of $111.4 million of revenue recognized from current year invoices, $54.1 million of revenue that was included in the deferred revenue balance as of December 31, 2023 and $1.1 million from the netting of contract assets and liabilities on a contract-by-contract basis. Amounts recognized from deferred revenues represent primarily revenue from the sale of subscription and implementation services. Remaining Performance Obligations On March 31, 2024, the Company had $1.92 billion of remaining performance obligations, which represents contracted revenue minimums that have not yet been recognized, including amounts that will be invoiced and recognized as revenue in future periods. The Company expects to recognize approximately 52% of its remaining performance obligations as revenue in the next 24 months, an additional 31% in the next 25 to 48 months, and the balance thereafter. Allowance for Credit Losses The Company is exposed to credit losses primarily through sales of products and services. The Company assesses the collectability of outstanding contract assets on an ongoing basis and maintains a reserve which is included in the allowance for credit losses for contract assets deemed uncollectible. The Company analyzes the contract assets portfolio for significant risks by considering historical collection experience and forecasting future collectability to determine the amount of revenues that will ultimately be collected from its customers. Customer type (whether a customer is a financial institution or other digital solution provider) has been identified as the primary specific risk affecting the Company's contract assets, and the estimate for losses is analyzed quarterly and adjusted as necessary. Future collectability may be impacted by current and anticipated macroeconomic conditions that could impact the Company's customers. Additionally, specific allowance amounts may be established to record the appropriate provision for customers that have a higher probability of default. The Company has provisioned zero for expected losses for both the three months ended March 31, 2024 and 2023, of which zero has been written off and charged against the allowance at both March 31, 2024 and 2023. The allowance for credit losses related to contract assets was $0.03 million at both March 31, 2024 and December 31, 2023. The Company assesses the collectability of outstanding accounts receivable on an ongoing basis and maintains an allowance for credit losses for accounts receivable deemed uncollectible. The Company analyzes the accounts receivable portfolio for significant risks and considers prior periods and forecasts future collectability to determine the amount of revenues that will ultimately be collected from its customers. This estimate is analyzed quarterly and adjusted as necessary. Identified risks pertaining to the Company's accounts receivable include the delinquency level and customer type. Future collectability may be impacted by current and anticipated macroeconomic conditions that could impact the Company's customers. Due to the short-term nature of such receivables, the estimate of the amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers. Historically, the Company's collection experience has not varied significantly, and bad debt expenses have been insignificant. The Company has provisioned zero for expected losses for both the three months ended March 31, 2024 and 2023, of which zero has been written off and charged against the allowance at both March 31, 2024 and 2023. The allowance for credit losses related to accounts receivable was $0.5 million at both March 31, 2024 and December 31, 2023. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The carrying values of the Company's financial assets not measured at fair value on a recurring basis, principally accounts receivable, restricted cash and accounts payable, approximated their fair values due to the short period of time to maturity or repayment. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The current accounting guidance for fair value measurements defines a three-level valuation hierarchy for disclosures as follows: • Level I—Unadjusted quoted prices in active markets for identical assets or liabilities; • Level II—Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and • Level III—Unobservable inputs that are supported by little or no market activity, which requires the Company to develop its own assumptions. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table details the fair value hierarchy of the Company's financial assets measured at fair value on a recurring basis as of March 31, 2024: Fair Value Measurements Using: Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Assets Cash Equivalents: Money market funds $ 119,391 $ 119,391 $ — $ — Investments: Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Corporate bonds and commercial paper $ 24,286 $ — $ 24,286 $ — Certificates of deposit 8,642 — 8,642 — U.S. government securities 30,812 — 30,812 — $ 63,740 $ — $ 63,740 $ — The following table details the fair value hierarchy of the Company's financial assets measured at fair value on a recurring basis as of December 31, 2023: Fair Value Measurements Using: Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Assets Cash Equivalents: Money market funds $ 86,611 $ 86,611 $ — $ — Investments: Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Corporate bonds and commercial paper $ 31,852 $ — $ 31,852 $ — Certificates of deposit 9,321 — 9,321 — U.S. government securities 53,055 — 53,055 — $ 94,228 $ — $ 94,228 $ — The Company determines the fair value of the vast majority of its debt investment holdings based on pricing from its pricing vendors. The valuation techniques used to measure the fair value of financial instruments having Level II inputs were derived from non-binding consensus prices that are corroborated by observable market data or quoted market prices for similar instruments. Such market prices may be quoted prices in active markets for identical assets (Level I inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level II inputs). |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 3 Months Ended |
Mar. 31, 2024 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments The Company's cash, cash equivalents and investments as of March 31, 2024 and December 31, 2023 consisted primarily of cash, U.S. government securities, corporate bonds, commercial paper, certificates of deposit, money market funds and other equity investments. The Company considers all highly liquid investments acquired with an original maturity of ninety days or less at the date of purchase to be Investments. Cash equivalents are stated at cost or fair value based on the underlying security. Restricted cash consists of deposits held as collateral for the Company's secured letters of credit or bank guarantees issued in place of security deposits for the Company's corporate headquarters and various other leases, deposits held by the Company on behalf of its medical insurance carrier reserved for the use of claim payments, and deposits that are restricted to withdrawal or use as of the reporting date under the contractual terms of certain customer arrangements. The Company classifies its debt investments as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All debt investments are recorded at estimated fair value. Unrealized gains and losses on available-for-sale investments are included in accumulated other comprehensive income (loss), a component of stockholders' equity. If the Company does not expect to recover the entire amortized cost basis of the available-for-sale debt security, it considers the available-for-sale debt security to be impaired. For individual debt securities classified as available-for-sale and deemed impaired, the Company assesses whether such decline has resulted from a credit loss or other factors. Impairment relating to credit losses is recorded through a reserve, limited to the amount that the fair value is less than the amortized cost basis. Impairment is reported in other income (expense), net on the condensed consolidated statements of comprehensive income (loss). Realized gains and losses are determined based on the specific identification method and are reported in other income (expense), net on the condensed consolidated statements of comprehensive income (loss). Interest, amortization of premiums and accretion of discount on all debt investments classified as available-for-sale are also included as a component of other income (expense), net on the condensed consolidated statements of comprehensive income (loss). Based on the Company's assessment, no impairments for credit losses were recognized during either of the three months ended March 31, 2024 or 2023. The Company has invested in a private financial technology investment fund, classified as an equity investment. Equity investments without a readily determinable fair value, where the Company has no influence over the operating and financial policies of the investee, are recorded at cost, less impairment and adjusted for subsequent observable price changes obtained from orderly transactions for identical or similar investments issued by the same investee. An impairment charge to current earnings is recorded when the cost of the investment exceeds its fair value and this condition is determined to be other-than-temporary. During the year ended December 31, 2023, the Company determined there was a $0.1 million other-than-temporary impairment on its equity investment. This equity investment had a carrying amount of $0.2 million and $0.1 million as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024 and December 31, 2023, the Company's cash was $155.1 million and $143.0 million, respectively. A summary of the Company's cash equivalents and investments that are carried at fair value as of March 31, 2024 is as follows: Cash Equivalents: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Money market funds $ 119,391 $ — $ — $ 119,391 Investments: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate bonds and commercial paper $ 24,352 $ — $ (66) $ 24,286 Certificates of deposit 8,652 — (10) 8,642 U.S. government securities 30,905 — (93) 30,812 $ 63,909 $ — $ (169) $ 63,740 A summary of the Company's cash equivalents and investments that are carried at fair value as of December 31, 2023 is as follows: Cash Equivalents: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Money market funds $ 86,611 $ — $ — $ 86,611 Investments: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate bonds and commercial paper $ 31,979 $ 3 $ (130) $ 31,852 Certificates of deposit 9,337 — (16) 9,321 U.S. government securities 53,208 — (153) 53,055 $ 94,524 $ 3 $ (299) $ 94,228 Investments may be sold or may settle at any time, without significant penalty, for use in current operations or for other purposes, even if they have not yet reached maturity. As a result, the Company classifies its investments, including investments with maturities beyond twelve months, as current assets on the condensed consolidated balance sheets. The following table summarizes the estimated fair value of the Company's debt investments, designated as available-for-sale and classified by the contractual maturity date of the investments as of the dates shown: March 31, 2024 December 31, 2023 Due within one year or less $ 58,590 $ 87,133 Due after one year through two years 5,150 7,095 $ 63,740 $ 94,228 The Company has certain available-for-sale debt investments in a gross unrealized loss position. The Company regularly reviews its debt investments for impairment resulting from credit loss using both qualitative and quantitative criteria, as necessary, based on the composition of the portfolio at period end. The Company considers factors such as the length of time and extent to which the market value has been less than the cost, the financial position and near-term prospects of the issuer or whether the Company has the intent to or it is more likely than not it will be required to sell the investments before recovery of the investments' amortized-cost basis. If the Company determines that impairment exists in one of these investments, the respective investments would be written down to fair value. For debt securities, the portion of the write-down related to credit loss would be recognized in other income, net on the condensed consolidated statements of comprehensive income (loss) if the intent of the Company was to sell the investments before recovery. Any portion not related to credit loss would be included in accumulated other comprehensive loss in the condensed consolidated statements of comprehensive income (loss). Because the Company does not intend to sell any investments which have an unrealized loss position at this time, and it is not more likely than not that the Company will be required to sell the investment before recovery of its amortized cost basis, which may be maturity, the reserve for available-for-sale debt securities was zero as of March 31, 2024 and December 31, 2023. The following table presents the fair values and the gross unrealized losses of these available-for-sale debt investments as of March 31, 2024, aggregated by investment category and the length of time that individual securities have been in a continuous loss position: Less than 12 months 12 months or greater Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds and commercial paper $ 2,840 $ (10) $ 20,171 $ (56) Certificates of deposit 749 (1) 2,717 (9) U.S. government securities 3,563 — 27,249 (93) $ 7,152 $ (11) $ 50,137 $ (158) The following table presents the fair values and the gross unrealized losses of these available-for-sale debt investments as of December 31, 2023, aggregated by investment category and the length of time that individual securities have been in a continuous loss position: Less than 12 months 12 months or greater Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds and commercial paper $ 12,060 $ (39) $ 18,525 $ (91) Certificates of deposit 1,999 (5) 2,215 (11) U.S. government securities 18,140 (42) 32,421 (111) $ 32,199 $ (86) $ 53,161 $ (213) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The carrying amount of goodwill was $512.9 million at both March 31, 2024 and December 31, 2023. Goodwill represents the excess purchase price over the fair value of net assets acquired. The annual impairment test was performed as of October 31, 2023. No impairment of goodwill was identified during 2023, nor has any impairment of goodwill been identified during the three months ended March 31, 2024. Intangible assets at March 31, 2024 and December 31, 2023 were as follows: As of March 31, 2024 As of December 31, 2023 Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 55,540 $ (48,861) $ 6,679 $ 55,540 $ (46,065) $ 9,475 Non-compete agreements 12,020 (10,675) 1,345 12,020 (10,058) 1,962 Trademarks 19,870 (15,667) 4,203 19,870 (14,266) 5,604 Acquired technology 150,097 (96,280) 53,817 150,097 (90,776) 59,321 Capitalized software development costs 62,671 (13,466) 49,205 56,147 (10,937) 45,210 $ 300,198 $ (184,949) $ 115,249 $ 293,674 $ (172,102) $ 121,572 The Company recorded intangible assets from various prior business combinations as well as capitalized software development costs. Intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from three The estimated future amortization expense related to intangible assets as of March 31, 2024 was as follows: Amortization Year Ended December 31, 2024 (April 1 to December 31) $ 38,045 2025 33,677 2026 27,109 2027 11,173 2028 4,904 Thereafter 341 Total amortization $ 115,249 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Leases The Company leases office space under non-cancellable operating leases for its corporate headquarters in Austin, Texas in two adjacent buildings under separate lease agreements. Pursuant to the first of which the Company leases office space with an initial term that expires on April 30, 2028, with the option to extend the lease for an additional ten-year term. Pursuant to the second of which the Company leases office space with lease terms of approximately ten years, with options to extend the leases on the second building from five Maturities of the Company's operating lease liabilities for lease terms in excess of one year at March 31, 2024 were as follows: Operating Leases Year Ended December 31, 2024 (April 1 to December 31) $ 10,368 2025 12,508 2026 10,023 2027 8,708 2028 5,562 Thereafter 18,202 Total lease payments $ 65,371 Less: imputed interest (10,312) Total operating lease liabilities $ 55,059 The operating lease liabilities include $14.0 million in optional lease renewals where the Company is reasonably certain of exercising those options. The Company has exited and made available for sublease certain leased office spaces, and updated assessments of previously exited leased office spaces. As a result, the Company evaluated the recoverability of its right of use and other lease related assets and determined that their carrying values were not fully recoverable. The Company calculated the impairment by comparing the carrying amount of the asset group to its estimated fair value using a discounted cash flow model. As of December 31, 2023, an impairment of $1.9 million was recorded to right of use assets, $0.2 million was recorded to property and equipment and an additional $0.3 million was recorded to accrued liabilities and other long-term liabilities for expected expenses and fees associated with exiting the leased office space. These charges were recorded within operating expenses on the condensed consolidated statements of comprehensive income (loss). During the three months ended March 31, 2024, no impairment charges related to right of use or other lease related assets were recorded. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company has non-cancelable contractual commitments related to the 2026 Notes and the 2025 Notes (each as defined below) as well as the related interest. The interest on the 2026 Notes is payable semi-annually on June 1 and December 1 of each year. The interest on the 2025 Notes is payable semi-annually on May 15 and November 15 of each year. The Company also has non-cancelable contractual commitments for certain third-party products, stadium sponsorship costs, co-location and hosting fees and other product costs. Several of these purchase commitments for third-party products contain both a contractual minimum obligation and a variable obligation based upon usage or other factors which can change on a monthly basis. The estimated amounts for usage and other factors are not included within the table below. Future minimum contractual commitments that have initial or remaining non-cancelable terms in excess of one year at March 31, 2024 were as follows: Contractual Commitments Year Ended December 31, 2024 (April 1 to December 31) $ 43,665 2025 244,601 2026 328,870 2027 4,819 2028 3,500 Thereafter — Total commitments $ 625,455 Legal Proceedings From time to time, the Company is involved in legal proceedings arising in the ordinary course of its business. The Company is not presently a party to any legal proceedings that, if determined adversely to the Company, would have a material adverse effect on the Company. Gain Contingencies From time to time the Company may realize a gain contingency, however, recognition will not occur until cash is received. Loss Contingencies In the ordinary course of business, the Company is subject to loss contingencies that cover a range of matters. An estimated loss from a loss contingency, such as a legal proceeding or claim, is accrued if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. |
Convertible Senior Notes
Convertible Senior Notes | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes The following table presents details of the Company's convertible senior notes outstanding as of March 31, 2024, which are further discussed below (principal in thousands): Date Issued Maturity Date (1) Principal Interest Rate per Annum Conversion Rate for Each $1,000 Principal (2) Initial Conversion Price per Share 2026 Notes June 1, 2019 June 1, 2026 $ 303,995 0.75 % $ 11.2851 $ 88.61 2025 Notes November 15, 2020 November 15, 2025 $ 191,000 0.125 % $ 7.1355 $ 140.14 ___________________________________________________________________________ (1) Unless earlier converted or repurchased in accordance with their terms prior to such date (2) Subject to adjustment upon the occurrence of certain specified events As further defined and described below, the 2026 Notes and the 2025 Notes are collectively referred to as the Notes. In June 2019, the Company issued $316.3 million principal amount of convertible senior notes due in June 2026, or the 2026 Notes. Interest is payable semi-annually on June 1 and December 1 of each year, commencing on December 1, 2019. In November 2020, the Company issued $350.0 million principal amount of convertible senior notes due in November 2025, or the 2025 Notes. Interest is payable semi-annually on May 15 and November 15 of each year, commencing on May 15, 2021. In March 2023, the Company repurchased $12.3 million in aggregate principal amount of the 2026 Notes for $10.7 million in cash and repurchased $159.0 million in aggregate principal amount of the 2025 Notes for $138.4 million in cash. The partial repurchase of the 2026 Notes and 2025 Notes resulted in a $19.9 million gain on early debt extinguishment, of which $1.8 million consisted of unamortized debt issuance costs. This gain was recorded within other income (expense) on the condensed consolidated statements of comprehensive income (loss). The Company may repurchase additional 2025 Notes and/or 2026 Notes from time to time through open market purchases, block trades, and/or privately negotiated transactions, in compliance with applicable securities laws and other legal requirements. The timing, volume, and nature of the repurchases will be determined by the Company based on the capital needs of the business, market conditions, applicable legal requirements, and other factors. The Notes are the Company's senior unsecured obligations and rank senior in right of payment to any of the Company's indebtedness that is expressly subordinated in right of payment to the Notes, rank equally in right of payment with any of the Company's indebtedness that is not so subordinated, are effectively junior in right of payment to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally junior to all indebtedness and other liabilities (including trade payables) of the Company's current and future subsidiaries. On or after June 5, 2023 or November 20, 2023 for the 2026 Notes and 2025 Notes, respectively, the Company may redeem for cash all or any portion of the Notes, at the Company's option, if the last reported sale price of the Company's common stock has been at least 130% of the conversion price in effect for at least 20 trading days (whether or not consecutive) during any 30-consecutive trading-day period. If the Company calls any or all of the Notes for redemption, holders may convert all or any portion of their Notes at any time prior to the close of business on the scheduled trading day prior to the redemption date, even if the Notes are not otherwise convertible at such time. After that time, the right to convert such Notes will expire, unless the Company defaults in the payment of the redemption price, in which case a holder of the Notes may convert all or any portion of its Notes until the redemption price has been paid or duly provided for. On or after March 1, 2026 or August 15, 2025 for the 2026 Notes and 2025 Notes, respectively, holders may convert all or any portion of their Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the succeeding conditions described herein. Upon conversion, the Company will pay or deliver cash, shares of its common stock or a combination of cash and shares of its common stock, at its election, as described in the indentures governing the Notes. Holders may convert their Notes at their option at any time prior to the close of business on the business day immediately preceding March 1, 2026 or August 15, 2025 for the 2026 Notes and 2025 Notes, respectively, only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on September 30, 2019 or March 30, 2021 (and only during such calendar quarter), for the 2026 Notes and 2025 Notes, respectively, if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, 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; • during the five • upon the occurrence of specified corporate events. If a fundamental change (as defined in the relevant indenture governing each of the Notes) occurs prior to the maturity date, holders of each of the Notes may require the Company to repurchase all or a portion of their notes for cash at a repurchase price equal to 100% of the principal amount of the Notes, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of March 31, 2024, the 2026 Notes and 2025 Notes were not convertible. The Notes consist of the following: As of March 31, 2024 As of December 31, 2023 2026 Notes 2025 Notes 2026 Notes 2025 Notes Principal $ 303,995 $ 191,000 $ 303,995 $ 191,000 Unamortized debt issuance costs (2,819) (1,216) (3,133) (1,398) Net carrying amount $ 301,176 $ 189,784 $ 300,862 $ 189,602 The following table sets forth total interest expense recognized related to the Notes: Three Months Ended March 31, 2024 2023 Contractual interest expense $ 629 $ 703 Amortization of debt issuance costs 496 618 Total $ 1,125 $ 1,321 Debt issuance costs are amortized on a straight-line basis, which approximates the effective interest method, to interest expense over the expected life of the Notes. As of March 31, 2024, the remaining period over which the debt issuance costs will be amortized for the 2026 Notes and 2025 Notes was 2.2 years and 1.6 years, respectively. As of March 31, 2024, the if-converted value of the Notes did not exceed the principal amount. The if-converted values were determined based on the closing price of the Company's stock on March 31, 2024. Capped Call Transactions In connection with the issuance of the Notes, the Company entered into two separate capped call transactions with one or more counterparties, or the Capped Calls. The Capped Calls associated with the 2026 Notes have an initial strike price of $88.6124 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2026 Notes. The Capped Calls associated with the 2025 Notes have an initial strike price of $140.1443 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2025 Notes. The Capped Calls associated with the 2026 Notes have an initial cap price of $139.00 per share. The Capped Calls associated with the 2025 Notes have an initial cap price of $211.54 per share. The Capped Calls are expected to offset the potential dilution to the common stock upon any conversion of the Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the Notes in the event the market price per share of common stock is greater than the strike price of the Capped Call, with such offset subject to a cap. If, however, the market price per share of the common stock exceeds the cap price of the Capped Calls, there would be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that the then-market price per share of the common stock exceeds the cap price. As the Capped Calls are considered indexed to the Company's stock and are considered equity classified, they are recorded in stockholders' equity on the condensed consolidated balance sheet and are not accounted for as derivatives. The cost of $40.8 million incurred in connection with the Capped Calls associated with the 2026 Notes was recorded as a reduction to additional paid-in capital. The cost of $39.8 million incurred in connection with the Capped Calls associated with the 2025 Notes was recorded as a reduction to common stock. In March 2023, in connection with the partial repurchase of the Notes, the Company terminated the Capped Calls in a notional amount corresponding to the aggregate principal amount of the Notes that were repurchased. As a result of the termination of the related Capped Calls, the Company received cash payments of $0.1 million. The proceeds were recorded as an increase to additional paid-in capital on the condensed consolidated balance sheets. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In March 2014, the Company's board of directors approved the 2014 Equity Incentive Plan, or 2014 Plan. The 2014 Plan terminated on June 1, 2023, except with respect to the outstanding awards previously granted thereunder. As of June 1, 2023, there were 7,606 shares of common stock that were reserved for issuance pursuant to outstanding awards, assuming maximum performance, under the 2014 Plan. In May 2023, the Company's stockholders approved the 2023 Equity Incentive Plan, or 2023 Plan, with an effective date of June 1, 2023, under which stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and units and other cash-based or stock-based awards may be granted to employees, consultants and directors. At time of approval, up to 14,045 shares of common stock were reserved for issuance under the 2023 Plan, all of which consisted of shares previously reserved for issuance under the 2014 Plan and any shares that would otherwise be returned to the 2014 Plan as a result of the forfeiture, repurchase or termination of awards issued under that plan. The 2023 Plan is a successor to and continuation of the Company’s 2014 Plan. As of March 31, 2024, 5,796 shares remain authorized and available for future issuance under the 2023 Plan, assuming attainment of maximum performance for any market stock units or performance stock units. In March 2014, the Company adopted its Employee Stock Purchase Plan, or ESPP. The plan was implemented starting January 3, 2022, pursuant to which certain participating domestic employees are able to purchase shares of the Company's common stock at a 15% discount of the lower of the market price at the beginning or end of the offering period. Offering periods commence on each June 1 and December 1. The Board provided for a share reserve with respect to the ESPP of 800 shares. The ESPP contains a provision that automatically increases the shares available for issuance under the plan on January 1 of each year through 2024, by an amount equal to the lesser of (a) 500 shares, (b) 1% of the number of shares issued and outstanding on the immediately preceding December 31, or (c) such other amount as may be determined by the Company's board of directors. As of March 31, 2024, 1,374 shares remain authorized and available for future issuance under the ESPP. Stock-based compensation expense was recorded in the following cost and expense categories on the Company's condensed consolidated statements of comprehensive income (loss): Three Months Ended March 31, 2024 2023 Cost of revenues $ 3,165 $ 3,373 Sales and marketing 3,871 4,260 Research and development 3,843 3,776 General and administrative 9,922 6,677 Total stock-based compensation expense $ 20,801 $ 18,086 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In accordance with applicable accounting guidance, the income tax expense for the three months ended March 31, 2024 is based on the estimated annual effective tax rate for fiscal year 2024. The Company's provision for income taxes is based on estimated effective tax rates derived from an estimate of annual consolidated earnings before taxes, adjusted for nondeductible expenses, other permanent items, valuation allowances, and any applicable income tax credits. The Company's provision for income taxes reflected an effective tax rate of approximately (12.7)% and (3.6)% for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024 and 2023, the Company's effective tax rate was lower than the U.S. federal statutory rate primarily due to its valuation allowance offsetting the benefits of losses. The Company's income tax expenses and benefits consist primarily of state current income tax expense, deferred income tax expense relating to the tax amortization of previously acquired goodwill and current income tax expense from foreign operations. To date, the Company has provided a valuation allowance against most of its deferred tax assets as it believes the objective and verifiable evidence of its historical pretax net losses outweighs any positive evidence of its forecasted future results. The Company will continue to monitor the positive and negative evidence, and it will adjust the valuation allowance as sufficient objective positive evidence becomes available. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net loss | $ (13,843) | $ (516) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | In June 2023, the Company adopted a policy pursuant to which any participant in the Company’s equity incentive plans whose transactions are subject to Section 16 of the Security Exchange Act of 1934, as amended, is required to sell, upon the vesting or settlement of any such award, a portion of the shares subject to the award determined by the Company in its discretion to be sufficient to cover tax withholding obligations and to remit an amount equal to such tax withholding obligations to the Company. This mandatory sell-to-cover policy was adopted by the Company as a result of the inability of the Company's captive broker to effect the sell-to-cover transactions pursuant to Rule 10b5-1 Trading Plans. |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
David Mehok [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | David Mehok, Chief Financial Officer, entered into a Rule 10b5-1 Trading Plan on March 12, 2024. Mr. Mehok's plan provides for the potential sale of up to 14,601 shares of the Company's common stock between August 21, 2024 and August 30, 2024. |
Name | David Mehok |
Title | Chief Financial Officer |
Rule 10b5-1 Arrangement Adopted | true |
Non-Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | March 12, 2024 |
Arrangement Duration | 9 days |
Aggregate Available | 14,601 |
Jonathan Price [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Jonathan Price, Executive Vice President, Emerging Businesses, Corporate and Business Development, entered into a Rule 10b5-1 Trading Plan on March 12, 2024. Mr. Price's plan provides for the potential sale of up to 34,117 shares of the Company's common stock between June 14, 2024 and March 7, 2025, including the potential exercises of vested stock options and the associated sale of up to 11,641 shares of common stock. |
Name | Jonathan Price |
Title | Executive Vice President, Emerging Businesses, Corporate and Business Development |
Rule 10b5-1 Arrangement Adopted | true |
Non-Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | March 12, 2024 |
Arrangement Duration | 266 days |
Aggregate Available | 34,117 |
Kimberly Rutledge [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Kimberly Rutledge , Chief People Officer, e ntered into a Rule 10b5-1 Trading Plan on March 15, 2024. Ms. Rutledge's plan provides for the potential sale of up to 52,686 shares of the Company's common stock between June, 14, 2024 and March 31, 2025, less any shares sold pursuant to mandatory sell-to-cover transactions not covered by the plan related to withholding taxes due as a result of the vesting of any restricted stock units, market stock units or performance stock units covered by the plan . |
Name | Kimberly Rutledge |
Title | Chief People Officer |
Rule 10b5-1 Arrangement Adopted | true |
Non-Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | March 15, 2024 |
Arrangement Duration | 290 days |
Aggregate Available | 52,686 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | These interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, and Securities and Exchange Commission, or SEC, requirements for interim financial statements. The interim unaudited condensed consolidated financial statements include the accounts of Q2 Holdings, Inc. and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Principles of Consolidation | In the Company's opinion, the interim unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation. Certain information and disclosures normally included in the notes to the annual consolidated financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the accompanying notes for the fiscal year ended December 31, 2023, which are included in the Company's Annual Report on Form 10-K, filed with the SEC on February 21, 2024. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other period. |
Use of Estimates | The preparation of the interim unaudited condensed 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 interim unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses. Significant items subject to such estimates include: revenue recognition; estimate of credit losses; fair value of certain stock awards issued; the carrying value of goodwill; the fair value of acquired intangibles; the useful lives of property and equipment and long-lived intangible assets; the impairment assessment of long-lived assets; and income taxes. In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from those estimates. |
Concentration of Credit Risk | Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, restricted cash, investments, accounts receivable and contract assets. The Company's cash and cash equivalents, restricted cash and investments are placed with high credit quality financial institutions and issuers, and at times may exceed federally insured limits. The Company has not experienced any loss relating to cash and cash equivalents or restricted cash in these accounts. The Company provides credit, in the normal course of business, to a majority of its customers. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. |
Recent Accounting Pronouncements | In November 2023, the Financial Accounting Standard Board, or FASB, issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. The ASU is effective for fiscal years beginning after December 15, 2023 on a retrospective basis, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvement to Income Tax Disclosures" which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The ASU is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures. |
Fair Value Measurements | The carrying values of the Company's financial assets not measured at fair value on a recurring basis, principally accounts receivable, restricted cash and accounts payable, approximated their fair values due to the short period of time to maturity or repayment. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The current accounting guidance for fair value measurements defines a three-level valuation hierarchy for disclosures as follows: • Level I—Unadjusted quoted prices in active markets for identical assets or liabilities; • Level II—Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and • Level III—Unobservable inputs that are supported by little or no market activity, which requires the Company to develop its own assumptions. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company determines the fair value of the vast majority of its debt investment holdings based on pricing from its pricing vendors. The valuation techniques used to measure the fair value of financial instruments having Level II inputs were derived from non-binding consensus prices that are corroborated by observable market data or quoted market prices for similar instruments. Such market prices may be quoted prices in active markets for identical assets (Level I inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level II inputs). |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Net Loss Per Share, Basic and Diluted | The following table sets forth the computations of net loss per share for the periods listed: Three Months Ended March 31, 2024 2023 Numerator: Net loss $ (13,843) $ (516) Denominator: Weighted-average common shares outstanding, basic and diluted 59,446 57,885 Net loss per common share, basic and diluted $ (0.23) $ (0.01) |
Schedule of Antidilutive Securities Excluded from Computation of Loss Per Share | The following table sets forth the anti-dilutive common share equivalents for the periods listed: As of March 31, 2024 2023 Stock options, restricted stock units, market stock units and performance stock units 5,341 5,374 Shares issuable pursuant to the ESPP 70 127 Shares related to convertible notes 4,794 5,798 10,205 11,299 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Major Source | The following table disaggregates the Company's revenue by major source: Three Months Ended March 31, 2024 2023 Subscription $ 130,357 $ 115,189 Transactional 17,051 16,261 Services and Other 18,100 21,558 Total Revenues $ 165,508 $ 153,008 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assets Measured on Recurring Basis | The following table details the fair value hierarchy of the Company's financial assets measured at fair value on a recurring basis as of March 31, 2024: Fair Value Measurements Using: Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Assets Cash Equivalents: Money market funds $ 119,391 $ 119,391 $ — $ — Investments: Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Corporate bonds and commercial paper $ 24,286 $ — $ 24,286 $ — Certificates of deposit 8,642 — 8,642 — U.S. government securities 30,812 — 30,812 — $ 63,740 $ — $ 63,740 $ — The following table details the fair value hierarchy of the Company's financial assets measured at fair value on a recurring basis as of December 31, 2023: Fair Value Measurements Using: Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Assets Cash Equivalents: Money market funds $ 86,611 $ 86,611 $ — $ — Investments: Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Corporate bonds and commercial paper $ 31,852 $ — $ 31,852 $ — Certificates of deposit 9,321 — 9,321 — U.S. government securities 53,055 — 53,055 — $ 94,228 $ — $ 94,228 $ — |
Cash, Cash Equivalents and In_2
Cash, Cash Equivalents and Investments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash, Cash Equivalents and Investments | A summary of the Company's cash equivalents and investments that are carried at fair value as of March 31, 2024 is as follows: Cash Equivalents: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Money market funds $ 119,391 $ — $ — $ 119,391 Investments: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate bonds and commercial paper $ 24,352 $ — $ (66) $ 24,286 Certificates of deposit 8,652 — (10) 8,642 U.S. government securities 30,905 — (93) 30,812 $ 63,909 $ — $ (169) $ 63,740 A summary of the Company's cash equivalents and investments that are carried at fair value as of December 31, 2023 is as follows: Cash Equivalents: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Money market funds $ 86,611 $ — $ — $ 86,611 Investments: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate bonds and commercial paper $ 31,979 $ 3 $ (130) $ 31,852 Certificates of deposit 9,337 — (16) 9,321 U.S. government securities 53,208 — (153) 53,055 $ 94,524 $ 3 $ (299) $ 94,228 |
Schedule of Investments Classified by Contractual Maturity Date | The following table summarizes the estimated fair value of the Company's debt investments, designated as available-for-sale and classified by the contractual maturity date of the investments as of the dates shown: March 31, 2024 December 31, 2023 Due within one year or less $ 58,590 $ 87,133 Due after one year through two years 5,150 7,095 $ 63,740 $ 94,228 |
Schedule of Fair Values and Gross Unrealized Losses for Available-For-Sale Securities | The following table presents the fair values and the gross unrealized losses of these available-for-sale debt investments as of March 31, 2024, aggregated by investment category and the length of time that individual securities have been in a continuous loss position: Less than 12 months 12 months or greater Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds and commercial paper $ 2,840 $ (10) $ 20,171 $ (56) Certificates of deposit 749 (1) 2,717 (9) U.S. government securities 3,563 — 27,249 (93) $ 7,152 $ (11) $ 50,137 $ (158) The following table presents the fair values and the gross unrealized losses of these available-for-sale debt investments as of December 31, 2023, aggregated by investment category and the length of time that individual securities have been in a continuous loss position: Less than 12 months 12 months or greater Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds and commercial paper $ 12,060 $ (39) $ 18,525 $ (91) Certificates of deposit 1,999 (5) 2,215 (11) U.S. government securities 18,140 (42) 32,421 (111) $ 32,199 $ (86) $ 53,161 $ (213) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | at March 31, 2024 and December 31, 2023 were as follows: As of March 31, 2024 As of December 31, 2023 Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 55,540 $ (48,861) $ 6,679 $ 55,540 $ (46,065) $ 9,475 Non-compete agreements 12,020 (10,675) 1,345 12,020 (10,058) 1,962 Trademarks 19,870 (15,667) 4,203 19,870 (14,266) 5,604 Acquired technology 150,097 (96,280) 53,817 150,097 (90,776) 59,321 Capitalized software development costs 62,671 (13,466) 49,205 56,147 (10,937) 45,210 $ 300,198 $ (184,949) $ 115,249 $ 293,674 $ (172,102) $ 121,572 |
Schedule of Estimated Future Amortization Expense | The estimated future amortization expense related to intangible assets as of March 31, 2024 was as follows: Amortization Year Ended December 31, 2024 (April 1 to December 31) $ 38,045 2025 33,677 2026 27,109 2027 11,173 2028 4,904 Thereafter 341 Total amortization $ 115,249 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Schedule of Operating Lease Maturities | Maturities of the Company's operating lease liabilities for lease terms in excess of one year at March 31, 2024 were as follows: Operating Leases Year Ended December 31, 2024 (April 1 to December 31) $ 10,368 2025 12,508 2026 10,023 2027 8,708 2028 5,562 Thereafter 18,202 Total lease payments $ 65,371 Less: imputed interest (10,312) Total operating lease liabilities $ 55,059 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Contractual Commitments | Future minimum contractual commitments that have initial or remaining non-cancelable terms in excess of one year at March 31, 2024 were as follows: Contractual Commitments Year Ended December 31, 2024 (April 1 to December 31) $ 43,665 2025 244,601 2026 328,870 2027 4,819 2028 3,500 Thereafter — Total commitments $ 625,455 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes | Date Issued Maturity Date (1) Principal Interest Rate per Annum Conversion Rate for Each $1,000 Principal (2) Initial Conversion Price per Share 2026 Notes June 1, 2019 June 1, 2026 $ 303,995 0.75 % $ 11.2851 $ 88.61 2025 Notes November 15, 2020 November 15, 2025 $ 191,000 0.125 % $ 7.1355 $ 140.14 ___________________________________________________________________________ (1) Unless earlier converted or repurchased in accordance with their terms prior to such date (2) Subject to adjustment upon the occurrence of certain specified events The Notes consist of the following: As of March 31, 2024 As of December 31, 2023 2026 Notes 2025 Notes 2026 Notes 2025 Notes Principal $ 303,995 $ 191,000 $ 303,995 $ 191,000 Unamortized debt issuance costs (2,819) (1,216) (3,133) (1,398) Net carrying amount $ 301,176 $ 189,784 $ 300,862 $ 189,602 |
Schedule of Interest Expense | The following table sets forth total interest expense recognized related to the Notes: Three Months Ended March 31, 2024 2023 Contractual interest expense $ 629 $ 703 Amortization of debt issuance costs 496 618 Total $ 1,125 $ 1,321 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Expense Recorded in the Consolidated Statements of Comprehensive Income (Loss) | Stock-based compensation expense was recorded in the following cost and expense categories on the Company's condensed consolidated statements of comprehensive income (loss): Three Months Ended March 31, 2024 2023 Cost of revenues $ 3,165 $ 3,373 Sales and marketing 3,871 4,260 Research and development 3,843 3,776 General and administrative 9,922 6,677 Total stock-based compensation expense $ 20,801 $ 18,086 |
Organization and Description _2
Organization and Description of Business (Details) | Mar. 31, 2024 |
Q2 Software, Inc. | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Wholly owned subsidiary, ownership percentage (in percent) | 100% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Basic and Diluted Net Loss per Common Share and Anti-Dilutive Common Share Equivalents (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Net loss | $ (13,843) | $ (516) |
Denominator: | ||
Weighted-average common shares outstanding, basic (in shares) | 59,446 | 57,885 |
Weighted-average common shares outstanding, diluted (in shares) | 59,446 | 57,885 |
Net loss per common share, basic (usd per share) | $ (0.23) | $ (0.01) |
Net loss per common share, diluted (usd per share) | $ (0.23) | $ (0.01) |
Antidilutive securities excluded from computation of earnings per share (in shares) | 10,205 | 11,299 |
Stock options, restricted stock units, market stock units and performance stock units | ||
Denominator: | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,341 | 5,374 |
Shares issuable pursuant to the ESPP | ||
Denominator: | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 70 | 127 |
Shares related to convertible notes | ||
Denominator: | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 4,794 | 5,798 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue by Major Source (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 165,508 | $ 153,008 |
Subscription | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 130,357 | 115,189 |
Transactional | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 17,051 | 16,261 |
Services and Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 18,100 | $ 21,558 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Disaggregation of Revenue [Line Items] | |||
Amounts due in advance of satisfying the Company's performance obligations | $ 189,800,000 | ||
Decrease from revenue recognized from current year invoices | (111,400,000) | ||
Revenue recognized that was included in the deferred revenue balance in prior year | 54,100,000 | ||
Decrease from netting of contract assets and liabilities on contract by contract basis | 1,100,000 | ||
Revenue from remaining performance obligations | 1,920,000,000 | ||
Provision for expected credit losses, contract balances | 0 | $ 0 | |
Writeoffs, contract balances | 0 | 0 | |
Allowance for credit loss, contract balances | 30,000 | $ 30,000 | |
Provision for expected credit losses, accounts receivable | 0 | 0 | |
Writeoffs, accounts receivable | 0 | $ 0 | |
Allowance reserve | $ 500,000 | $ 500,000 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |||
Disaggregation of Revenue [Line Items] | |||
Remaining performance obligation, percentage | 52% | ||
Performance obligations expected to be satisfied, expected timing | 24 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01 | |||
Disaggregation of Revenue [Line Items] | |||
Remaining performance obligation, percentage | 31% | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01 | Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Performance obligations expected to be satisfied, expected timing | 25 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01 | Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Performance obligations expected to be satisfied, expected timing | 48 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-04-01 | Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Performance obligations expected to be satisfied, expected timing |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 63,740 | $ 94,228 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level I) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level II) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 63,740 | 94,228 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level III) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Corporate bonds and commercial paper | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 24,286 | 31,852 |
Corporate bonds and commercial paper | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level I) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Corporate bonds and commercial paper | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level II) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 24,286 | 31,852 |
Corporate bonds and commercial paper | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level III) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Certificates of deposit | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 8,642 | 9,321 |
Certificates of deposit | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level I) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Certificates of deposit | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level II) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 8,642 | 9,321 |
Certificates of deposit | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level III) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
U.S. government securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 30,812 | 53,055 |
U.S. government securities | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level I) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
U.S. government securities | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level II) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 30,812 | 53,055 |
U.S. government securities | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level III) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 119,391 | 86,611 |
Money market funds | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 119,391 | 86,611 |
Money market funds | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level I) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 119,391 | 86,611 |
Money market funds | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level II) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Money market funds | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level III) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 0 | $ 0 |
Cash, Cash Equivalents and In_3
Cash, Cash Equivalents and Investments - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Cash and Cash Equivalents [Line Items] | |||
Impairment for credit losses | $ 0 | $ 0 | |
Equity method investment other-than-temporary impairment | $ 100,000 | ||
Equity method investments | 200,000 | 100,000 | |
Available for sale debt securities allowance for credit loss | 0 | 0 | |
Cash | |||
Cash and Cash Equivalents [Line Items] | |||
Cash | $ 155,100,000 | $ 143,000,000 |
Cash, Cash Equivalents and In_4
Cash, Cash Equivalents and Investments - Schedule of Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Securities, Available-for-sale [Line Items] | ||
Investments, amortized cost | $ 63,909 | $ 94,524 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | (169) | (299) |
Investments, fair value | 63,740 | 94,228 |
Corporate bonds and commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Investments, amortized cost | 24,352 | 31,979 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | (66) | (130) |
Investments, fair value | 24,286 | 31,852 |
Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Investments, amortized cost | 8,652 | 9,337 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (10) | (16) |
Investments, fair value | 8,642 | 9,321 |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Investments, amortized cost | 30,905 | 53,208 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (93) | (153) |
Investments, fair value | 30,812 | 53,055 |
Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash equivalents, amortized cost | 119,391 | 86,611 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Cash equivalents, fair value | $ 119,391 | $ 86,611 |
Cash, Cash Equivalents and In_5
Cash, Cash Equivalents and Investments - Schedule of Contractual Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Cash and Cash Equivalents [Abstract] | ||
Due within one year or less | $ 58,590 | $ 87,133 |
Due after one year through two years | 5,150 | 7,095 |
Total | $ 63,740 | $ 94,228 |
Cash, Cash Equivalents and In_6
Cash, Cash Equivalents and Investments - Schedule of Fair Values and Gross Unrealized Losses for Available-For-Sale Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, less than 12 months, fair value | $ 7,152 | $ 32,199 |
Debt securities, available-for-sale, less than 12 months, gross unrealized losses | (11) | (86) |
Debt securities, available-for-sale, 12 months or greater, fair value | 50,137 | 53,161 |
Debt securities, available-for-sale, 12 months or greater, gross unrealized losses | (158) | (213) |
Corporate bonds and commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, less than 12 months, fair value | 2,840 | 12,060 |
Debt securities, available-for-sale, less than 12 months, gross unrealized losses | (10) | (39) |
Debt securities, available-for-sale, 12 months or greater, fair value | 20,171 | 18,525 |
Debt securities, available-for-sale, 12 months or greater, gross unrealized losses | (56) | (91) |
Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, less than 12 months, fair value | 749 | 1,999 |
Debt securities, available-for-sale, less than 12 months, gross unrealized losses | (1) | (5) |
Debt securities, available-for-sale, 12 months or greater, fair value | 2,717 | 2,215 |
Debt securities, available-for-sale, 12 months or greater, gross unrealized losses | (9) | (11) |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, less than 12 months, fair value | 3,563 | 18,140 |
Debt securities, available-for-sale, less than 12 months, gross unrealized losses | 0 | (42) |
Debt securities, available-for-sale, 12 months or greater, fair value | 27,249 | 32,421 |
Debt securities, available-for-sale, 12 months or greater, gross unrealized losses | $ (93) | $ (111) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 512,869,000 | $ 512,869,000 | |
Impairment of goodwill | 0 | $ 0 | |
Amortization of acquired intangibles | 4,828,000 | $ 5,262,000 | |
Cost of revenues | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of acquired intangibles | 8,300,000 | 7,300,000 | |
Operating expenses | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of acquired intangibles | $ 4,800,000 | $ 5,300,000 | |
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life (in years) | 3 years | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life (in years) | 7 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 300,198 | $ 293,674 |
Accumulated Amortization | (184,949) | (172,102) |
Net Carrying Amount | 115,249 | 121,572 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 55,540 | 55,540 |
Accumulated Amortization | (48,861) | (46,065) |
Net Carrying Amount | 6,679 | 9,475 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 12,020 | 12,020 |
Accumulated Amortization | (10,675) | (10,058) |
Net Carrying Amount | 1,345 | 1,962 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 19,870 | 19,870 |
Accumulated Amortization | (15,667) | (14,266) |
Net Carrying Amount | 4,203 | 5,604 |
Acquired technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 150,097 | 150,097 |
Accumulated Amortization | (96,280) | (90,776) |
Net Carrying Amount | 53,817 | 59,321 |
Capitalized software development costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 62,671 | 56,147 |
Accumulated Amortization | (13,466) | (10,937) |
Net Carrying Amount | $ 49,205 | $ 45,210 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 (April 1 to December 31) | $ 38,045 | |
2025 | 33,677 | |
2026 | 27,109 | |
2027 | 11,173 | |
2028 | 4,904 | |
Thereafter | 341 | |
Net Carrying Amount | $ 115,249 | $ 121,572 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 USD ($) building | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Other Commitments [Line Items] | |||
Number of buildings occupied | building | 2 | ||
Lease renewal reasonably certain, liability | $ 14,000,000 | ||
Lease impairments | $ 542,000 | $ 1,301,000 | |
Lease One | |||
Other Commitments [Line Items] | |||
Lease renewal term (in years) | 10 years | ||
Lease Two | |||
Other Commitments [Line Items] | |||
Lease term (in years) | 10 years | ||
Lease Two | Minimum | |||
Other Commitments [Line Items] | |||
Lease renewal term (in years) | 5 years | ||
Lease Two | Maximum | |||
Other Commitments [Line Items] | |||
Lease renewal term (in years) | 10 years | ||
Lease Exit and Sublease | |||
Other Commitments [Line Items] | |||
Lease impairments | $ 0 | ||
Lease Exit and Sublease | Right of Use Asset | |||
Other Commitments [Line Items] | |||
Lease impairments | $ 1,900,000 | ||
Lease Exit and Sublease | Property, Plant and Equipment | |||
Other Commitments [Line Items] | |||
Lease impairments | 200,000 | ||
Lease Exit and Sublease | Accrued Liabilities and Other Long-Term Liabilities | |||
Other Commitments [Line Items] | |||
Lease impairments | $ 300,000 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Payments Required Under Operating Leases (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Leases [Abstract] | |
2024 (April 1 to December 31) | $ 10,368 |
2025 | 12,508 |
2026 | 10,023 |
2027 | 8,708 |
2028 | 5,562 |
Thereafter | 18,202 |
Total lease payments | 65,371 |
Less: imputed interest | (10,312) |
Total operating lease liabilities | $ 55,059 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2024 (April 1 to December 31) | $ 43,665 |
2025 | 244,601 |
2026 | 328,870 |
2027 | 4,819 |
2028 | 3,500 |
Thereafter | 0 |
Total commitments | $ 625,455 |
Convertible Senior Notes - Sche
Convertible Senior Notes - Schedule of Convertible Senior Notes (Details) - Convertible Debt | Nov. 15, 2020 USD ($) $ / shares | Jun. 01, 2019 USD ($) $ / shares | Nov. 30, 2020 USD ($) | Jun. 30, 2019 USD ($) |
Convertible Senior Notes Due June 2026 | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ | $ 303,995,000 | $ 316,300,000 | ||
Interest rate | 0.75% | |||
Conversion rate of common stock | 0.0112851 | |||
Initial conversion price (usd per share) | $ / shares | $ 88.61 | |||
Convertible Notes Due 2025 | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ | $ 191,000,000 | $ 350,000,000 | ||
Interest rate | 0.125% | |||
Conversion rate of common stock | 0.0071355 | |||
Initial conversion price (usd per share) | $ / shares | $ 140.14 |
Convertible Senior Notes - Narr
Convertible Senior Notes - Narrative (Details) | 1 Months Ended | 3 Months Ended | ||||||||
Mar. 31, 2023 USD ($) | Nov. 30, 2020 USD ($) day | Jun. 30, 2019 USD ($) day | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2021 day | Sep. 30, 2019 day | Dec. 31, 2023 USD ($) | Nov. 15, 2020 USD ($) | Jun. 01, 2019 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Payment for repurchases of convertible notes | $ 0 | $ 149,640,000 | ||||||||
Gain on extinguishment of debt | $ 0 | 19,869,000 | ||||||||
Convertible Notes Due 2025 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Remaining amortization period for debt issuance costs | 1 year 7 months 6 days | |||||||||
Convertible Senior Notes Due June 2026 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Remaining amortization period for debt issuance costs | 2 years 2 months 12 days | |||||||||
Convertible Debt | Convertible Notes Due 2025 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 350,000,000 | $ 191,000,000 | ||||||||
Repurchased principal amount | $ 159,000,000 | 159,000,000 | ||||||||
Payment for repurchases of convertible notes | 138,400,000 | |||||||||
Unamortized debt issuance costs | $ 1,216,000 | $ 1,398,000 | ||||||||
Threshold percentage of stock price trigger | 130% | 130% | ||||||||
Limitation on sale of common stock, sale price threshold, number of trading days | day | 20 | 20 | ||||||||
Limitation on sale of common stock, sale price threshold, trading period | day | 30 | 30 | ||||||||
Number of consecutive business days | 5 days | |||||||||
Percentage of closing sale price in excess of convertible notes | 98% | |||||||||
Redemption price percentage | 100% | |||||||||
Convertible Debt | Convertible Senior Notes Due June 2026 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 316,300,000 | $ 303,995,000 | ||||||||
Repurchased principal amount | 12,300,000 | 12,300,000 | ||||||||
Payment for repurchases of convertible notes | 10,700,000 | |||||||||
Unamortized debt issuance costs | $ 2,819,000 | $ 3,133,000 | ||||||||
Threshold percentage of stock price trigger | 130% | 130% | ||||||||
Limitation on sale of common stock, sale price threshold, number of trading days | day | 20 | 20 | ||||||||
Limitation on sale of common stock, sale price threshold, trading period | day | 30 | 30 | ||||||||
Number of consecutive business days | 5 days | |||||||||
Percentage of closing sale price in excess of convertible notes | 98% | |||||||||
Redemption price percentage | 100% | |||||||||
Convertible Debt | Convertible Senior Notes Due 2025 And 2026 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Gain on extinguishment of debt | 19,900,000 | |||||||||
Unamortized debt issuance costs | $ 1,800,000 | $ 1,800,000 |
Convertible Senior Notes - Sc_2
Convertible Senior Notes - Schedule of Convertible 2023, 2026, 2025 Notes (Details) - Convertible Debt - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Convertible Senior Notes Due June 2026 | ||
Debt Instrument [Line Items] | ||
Principal | $ 303,995 | $ 303,995 |
Unamortized debt issuance costs | (2,819) | (3,133) |
Net carrying amount | 301,176 | 300,862 |
Convertible Notes Due 2025 | ||
Debt Instrument [Line Items] | ||
Principal | 191,000 | 191,000 |
Unamortized debt issuance costs | (1,216) | (1,398) |
Net carrying amount | $ 189,784 | $ 189,602 |
Convertible Senior Notes - Sc_3
Convertible Senior Notes - Schedule of Interest Expense Related to 2023, 2026, 2025 Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Debt Instrument [Line Items] | ||
Amortization of debt issuance costs | $ 496 | $ 618 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Contractual interest expense | 629 | 703 |
Amortization of debt issuance costs | 496 | 618 |
Total | $ 1,125 | $ 1,321 |
Convertible Senior Notes - Capp
Convertible Senior Notes - Capped Call Transactions (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 18 Months Ended | |
Mar. 31, 2023 USD ($) | Mar. 31, 2024 USD ($) $ / shares | Nov. 30, 2020 cappedCallTransaction | Jun. 30, 2019 $ / shares | |
Debt Instrument [Line Items] | ||||
Number of capped call transactions | cappedCallTransaction | 2 | |||
Convertible Senior Notes Due June 2026 | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Initial strike price (in usd per share) | $ 88.6124 | |||
Initial cap price (in usd per share) | $ 139 | |||
Cost incurred in connection with capped calls | $ | $ 40.8 | |||
Convertible Notes Due 2025 | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Initial strike price (in usd per share) | $ 140.1443 | |||
Initial cap price (in usd per share) | $ 211.54 | |||
Cost incurred in connection with capped calls | $ | $ 39.8 | |||
Convertible Senior Notes Due 2025 And 2026 | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Proceeds received from capped call transaction settlement | $ | $ 0.1 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - shares shares in Thousands | Jan. 03, 2022 | Mar. 31, 2024 | Jun. 01, 2023 | May 31, 2023 |
2014 Stock Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for future issuance under the plan (in shares) | 7,606 | |||
2023 Stock Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for future issuance under the plan (in shares) | 14,045 | |||
Shares available for future issuance under the plan (in shares) | 5,796 | |||
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for future issuance under the plan (in shares) | 1,374 | |||
Purchase of common stock at discount from market price | 15% | |||
Shares allocated for issuance (in shares) | 800 | |||
Automatic annual increase (in shares) | 500 | |||
Additional shares authorized under the plan, percentage increase (in percent) | 1% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Share-based Compensation Expense Recorded in the Consolidated Statements of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 20,801 | $ 18,086 |
Cost of revenues | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 3,165 | 3,373 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 3,871 | 4,260 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 3,843 | 3,776 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 9,922 | $ 6,677 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | (12.70%) | (3.60%) |
Unrecognized tax benefits | $ 700,000 | |
Unrecognized tax benefits, period increase (decrease) | $ 0 |