Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 24, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39748 | ||
Entity Registrant Name | PUBMATIC, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-5863224 | ||
Entity Address, Address Line One | 601 Marshall St. | ||
Entity Address, City or Town | Redwood City | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94063 | ||
City Area Code | 650 | ||
Local Phone Number | 331-3485 | ||
Title of 12(b) Security | Class A common stock, $0.0001 par value per share | ||
Trading Symbol | PUBM | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 704 | ||
Documents Incorporated by Reference | Portions of the registrant’s proxy statement for its 2023 annual meeting of stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2022. | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001422930 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Common Class A | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 43,576,097 | ||
Common Class B | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 9,251,882 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Auditor Information [Abstract] | |
Auditor Name | DELOITTE & TOUCHE LLP |
Auditor Firm ID | 34 |
Auditor Location | San Jose, California |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 92,382 | $ 82,505 |
Marketable securities | 82,013 | 77,121 |
Accounts receivable, net | 314,299 | 286,916 |
Prepaid expenses and other current assets | 14,784 | 14,207 |
Total Current Assets | 503,478 | 460,749 |
Property, equipment and software, net | 71,156 | 50,140 |
Operating lease right-of-use assets | 26,206 | 21,613 |
Acquisition-related intangible assets, net | 8,299 | 0 |
Goodwill | 29,577 | 6,250 |
Deferred tax assets | 1,047 | 515 |
Other assets, non-current | 2,412 | 10,948 |
TOTAL ASSETS | 642,175 | 550,215 |
Current Liabilities | ||
Accounts payable | 277,414 | 244,321 |
Accrued liabilities | 18,936 | 18,780 |
Operating lease liabilities, current | 5,676 | 3,864 |
Total Current Liabilities | 302,026 | 266,965 |
Operating lease liabilities, non-current | 20,915 | 17,842 |
Deferred tax liabilities | 573 | 6,067 |
Other liabilities, non-current | 6,473 | 2,161 |
TOTAL LIABILITIES | 329,987 | 293,035 |
Commitments and contingencies (Note 9) | ||
Stockholders' Equity | ||
Preferred stock, $0.0001 par value per share, 10,000,000 shares authorized as of December 31, 2022 and 2021; No shares issued and outstanding as of December 31, 2022 and 2021 | 0 | 0 |
Common stock, par value $0.0001 per share; 1,000,000,000 Class A shares authorized as of December 31, 2022 and 2021; 43,452,302 and 40,695,140 shares issued and outstanding as of December 31, 2022 and 2021, respectively; 1,000,000,000 Class B shares authorized as of December 31, 2022 and 2021; 12,393,322 shares issued and 9,252,885 shares outstanding as of December 31, 2022, and 11,159,609 shares issued and outstanding as of December 31, 2021 | 6 | 6 |
Treasury stock, at cost; 3,140,437 shares as of December 31, 2022 and 2021 | (11,486) | (11,486) |
Additional paid-in capital | 195,677 | 169,401 |
Accumulated other comprehensive loss | (9) | (36) |
Retained earnings | 128,000 | 99,295 |
Total Stockholders' Equity | 312,188 | 257,180 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 642,175 | $ 550,215 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Preferred stock par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Treasury stock shares | 3,140,437 | 3,140,437 |
Common Class A | ||
Common stock par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock shares issued | 43,452,302 | 40,695,140 |
Common stock shares outstanding | 43,452,302 | 40,695,140 |
Common Class B | ||
Common stock par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock shares issued | 12,393,322 | 11,159,609 |
Common stock shares outstanding | 9,252,885 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenue | $ 256,380 | $ 226,908 | $ 148,748 |
Cost of revenue | 81,512 | 58,313 | 41,186 |
Gross profit | 174,868 | 168,595 | 107,562 |
Operating expenses: | |||
Technology and development | 20,846 | 15,885 | 12,250 |
Sales and marketing | 68,562 | 58,160 | 43,297 |
General and administrative | 44,940 | 35,761 | 20,260 |
Total operating expenses | 134,348 | 109,806 | 75,807 |
Operating income | 40,520 | 58,789 | 31,755 |
Interest income | 2,214 | 300 | 537 |
Unrealized gain (loss) on equity investments | (5,948) | 0 | |
Unrealized gain (loss) on equity investments | 5,433 | ||
Other income (expense), net | 681 | 281 | (712) |
Total other income (expense), net | (3,053) | 6,014 | (175) |
Income before provision for income taxes | 37,467 | 64,803 | 31,580 |
Provision for income taxes | 8,762 | 8,199 | 4,967 |
Net income | $ 28,705 | $ 56,604 | $ 26,613 |
Net income per share attributable to common stockholders: | |||
Basic (in usd per share) | $ 0.55 | $ 1.13 | $ 0.51 |
Diluted (in usd per share) | $ 0.50 | $ 1 | $ 0.46 |
Weighted-average shares used to compute net income per share attributable to common stockholders: | |||
Basic (in shares) | 52,278,009 | 50,184,455 | 12,642,293 |
Diluted (in shares) | 56,908,197 | 56,628,574 | 17,125,882 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Other Comprehensive Income [Abstract] | |||
Net income | $ 28,705 | $ 56,604 | $ 26,613 |
Other comprehensive income (loss): | |||
Unrealized gain (loss) on marketable securities, net of tax | 27 | (37) | (5) |
Comprehensive income | $ 28,732 | $ 56,567 | $ 26,608 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Convertible Preferred Stock | Redeemable Common Stock |
Beginning balance (in shares) at Dec. 31, 2019 | 33,443,969 | 5,901,863 | ||||||
Beginning balance at Dec. 31, 2019 | $ 61,216 | $ 19,025 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Reclassification of common stock (in shares) | (5,901,863) | |||||||
Reclassification of common stock | $ (19,025) | |||||||
Conversion of convertible preferred stock to common stock upon initial offering (in shares) | (33,443,969) | |||||||
Conversion of convertible preferred stock to common stock upon initial offering | $ (61,216) | |||||||
Ending balance (in shares) at Dec. 31, 2020 | 0 | 0 | ||||||
Ending balance at Dec. 31, 2020 | $ 0 | $ 0 | ||||||
Beginning balance (in shares) at Dec. 31, 2019 | 5,746,216 | |||||||
Beginning balance at Dec. 31, 2019 | $ 13,295 | $ 1 | $ (11,431) | $ 8,641 | $ 6 | $ 16,078 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation | 3,603 | 3,603 | ||||||
Exercise of stock options (in shares) | 1,241,970 | |||||||
Exercise of stock options | 2,409 | 2,409 | ||||||
Repurchase of treasury stock, at cost (in shares) | (876) | |||||||
Repurchase of treasury stock, at cost | (3) | (3) | ||||||
Repayment of shareholders notes receivable | 4,268 | 4,268 | ||||||
Reclassification of common stock | 5,901,863 | |||||||
Reclassification of common stock (in shares) | 19,025 | $ 1 | 19,024 | |||||
Conversion of convertible preferred stock to common stock upon initial offering (in shares) | 33,443,969 | |||||||
Conversion of convertible preferred stock to common stock upon initial offering | 61,216 | $ 3 | 61,213 | |||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and other offering costs (in shares) | 2,655,000 | |||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and other offering costs | 45,006 | $ 1 | 45,005 | |||||
Other comprehensive income (loss) | (5) | (5) | ||||||
Net income | 26,613 | 26,613 | ||||||
Ending balance (in shares) at Dec. 31, 2020 | 48,988,142 | |||||||
Ending balance at Dec. 31, 2020 | 175,427 | $ 6 | (11,434) | 144,163 | 1 | 42,691 | ||
Ending balance (in shares) at Dec. 31, 2021 | 0 | 0 | ||||||
Ending balance at Dec. 31, 2021 | $ 0 | $ 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation | 15,011 | 15,011 | ||||||
Exercise of stock options (in shares) | 2,511,505 | |||||||
Exercise of stock options | 5,423 | 5,423 | ||||||
Repurchase of treasury stock, at cost (in shares) | (1,142) | |||||||
Repurchase of treasury stock, at cost | (52) | (52) | ||||||
Issuance of common stock related to employee stock purchase plan (in shares) | 276,406 | |||||||
Issuance of common stock related to employee stock purchase plan | 4,804 | 4,804 | ||||||
Issuance of common stock (in shares) | 79,838 | |||||||
Other comprehensive income (loss) | (37) | (37) | ||||||
Net income | 56,604 | 56,604 | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 51,854,749 | |||||||
Ending balance at Dec. 31, 2021 | 257,180 | $ 6 | (11,486) | 169,401 | (36) | 99,295 | ||
Ending balance (in shares) at Dec. 31, 2022 | 0 | 0 | ||||||
Ending balance at Dec. 31, 2022 | $ 0 | $ 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation | $ 22,121 | 22,121 | ||||||
Exercise of stock options (in shares) | 358,418 | 358,418 | ||||||
Exercise of stock options | $ 1,195 | 1,195 | ||||||
Issuance of common stock related to employee stock purchase plan (in shares) | 183,587 | |||||||
Issuance of common stock related to employee stock purchase plan | 2,960 | 2,960 | ||||||
Issuance of common stock (in shares) | 308,433 | |||||||
Other comprehensive income (loss) | 27 | 27 | ||||||
Net income | 28,705 | 28,705 | ||||||
Ending balance (in shares) at Dec. 31, 2022 | 52,705,187 | |||||||
Ending balance at Dec. 31, 2022 | $ 312,188 | $ 6 | $ (11,486) | $ 195,677 | $ (9) | $ 128,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Cash Flows [Abstract] | |||
Net income | $ 28,705 | $ 56,604 | $ 26,613 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 34,249 | 23,073 | 15,743 |
Unrealized (gain) loss and impairment of equity investment | 5,948 | (5,433) | 0 |
Stock-based compensation | 20,646 | 14,107 | 3,563 |
Provision for doubtful accounts | 0 | 0 | 319 |
Deferred income taxes | (7,166) | 4,753 | 2,933 |
Accretion of discount on marketable securities | (577) | (45) | (145) |
Non-cash lease expense | 5,831 | 2,042 | 0 |
Other | 90 | 45 | 189 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (24,408) | (67,405) | (102,175) |
Prepaid expenses and other current assets | (1,595) | (7,681) | (2,801) |
Accounts payable | 29,763 | 68,301 | 77,357 |
Accrued liabilities | (1,024) | 3,530 | 3,452 |
Operating lease liabilities | (5,539) | (2,283) | 0 |
Other liabilities, non-current | 2,289 | (927) | (718) |
Net cash provided by operating activities | 87,212 | 88,681 | 24,330 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of and deposits on property and equipment | (35,869) | (30,432) | (24,177) |
Capitalized software development costs | (13,024) | (8,929) | (7,226) |
Purchases of marketable securities | (137,793) | (90,562) | (36,704) |
Proceeds from sales of marketable securities | 0 | 0 | 2,295 |
Proceeds from maturities of marketable securities | 133,400 | 33,200 | 35,950 |
Purchase of equity securities | 0 | 0 | (15) |
Business combination, net of cash acquired | (28,085) | 0 | 0 |
Net cash used in investing activities | (81,371) | (96,723) | (29,877) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from initial public offering, net of underwriting discounts and commissions | 0 | (806) | 45,811 |
Proceeds from repayments of stockholders’ notes receivable | 0 | 0 | 4,268 |
Proceeds from issuance of common stock for employee stock purchase plan | 2,960 | 4,804 | 0 |
Proceeds from exercise of stock options | 1,195 | 5,423 | 2,409 |
Principal payments on finance lease obligations | (119) | (10) | 0 |
Payments to acquire treasury stock | 0 | (52) | (3) |
Net cash provided by financing activities | 4,036 | 9,359 | 52,485 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 9,877 | 1,317 | 46,938 |
CASH AND CASH EQUIVALENTS - Beginning of Year | 82,505 | 81,188 | 34,250 |
CASH AND CASH EQUIVALENTS - End of Year | 92,382 | 82,505 | 81,188 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Income taxes paid | 9,190 | 6,786 | 2,691 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: | |||
Stock-based compensation capitalized as internal use software costs | 1,475 | 903 | 40 |
Property and equipment included in accounts payable and accrued expenses | 749 | 49 | 111 |
Capitalized software costs included in accounts payable and accrued expenses | 1,796 | 1,794 | 1,336 |
Deferred offering costs included in accounts payable and accrued liabilities | 0 | 0 | 806 |
Business combination purchase consideration - indemnification claims holdback | $ 2,148 | $ 0 | $ 0 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of BusinessPubMatic, Inc. (together with its subsidiaries, the “Company” or “PubMatic”) was founded in 2006. The Company has offices in California, New York, Europe, Asia, and Australia. The Company provides a specialized cloud infrastructure platform that enables real-time programmatic advertising transactions. The purpose-built technology and infrastructure provides superior outcomes for both publishers and advertisers leveraging an efficient design, machine learning, and data processing capabilities, with customer alignment and global omnichannel reach. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Fiscal Year The Company’s fiscal year ends on December 31. References to fiscal year 2022, for example, refer to the fiscal year ended December 31, 2022. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of PubMatic, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts reported in our consolidated financial statements and notes thereto have been reclassified to conform to the current period presentation. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. Significant items subject to such estimates include: revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, internal use software development costs, stock-based compensation, acquisition-related intangible assets, and income taxes, including the valuation reserve on deferred tax assets. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates and assumptions. Due to the inherent uncertainty involved in making assumptions and estimates, events and changes in circumstances arising after December 31, 2022, including those resulting from the impacts of the COVID-19 pandemic and macroeconomic factors, may result in actual outcomes that differ from those contemplated by the Company’s assumptions and estimates. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, marketable securities, and accounts receivable. The Company maintains its cash and cash equivalents with financial institutions in amounts which exceed Federal Deposit Insurance Corporation limits. The Company’s investment policy limits investments to certain types of securities issued by the U.S. government and its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The primary objective of its investment activities is to preserve principal while maximizing income without significantly increasing risk. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. Marketable Securities The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification at each balance sheet date. The Company may sell these securities at any time for use in current operations even if they have not yet reached maturity. As a result, the Company classifies its marketable securities, including those with maturities beyond twelve months, as current assets in the consolidated balance sheets. These marketable securities are carried at fair value and unrealized gains and losses are recorded in other comprehensive income, which is reflected as a component of stockholders’ equity. These marketable securities are assessed as to whether those with unrealized loss positions are other than temporarily impaired. The Company considers impairments to be other than temporary if they are related to deterioration in credit risk or if it is likely the securities will be sold before the recovery of their cost basis. Realized gains and losses from the sale of marketable securities and declines in value deemed to be other than temporary are determined based on the specific identification method. Realized gains and losses, and any expected credit losses, are reported in other income (expense), net in the consolidated statements of operations and comprehensive income. Fair Value of Financial Instruments Financial instruments consist of cash equivalents, marketable securities, non-marketable equity investment, accounts receivable, accounts payable, and accrued liabilities. Cash equivalents and marketable securities are remeasured at fair value at the end of every period. Non-marketable equity investment is remeasured at fair value when there has been an observable price change from an orderly transaction for identical or similar investments of the same issuer. Accounts receivable, accounts payable and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment. Accounts Receivable and Allowance for Credit Losses Accounts receivable are recorded at the invoiced amount, are unsecured, and do not bear interest. The allowance for credit losses is based on the best estimate of the amount of probable credit losses in existing accounts receivable. The allowance for credit losses is determined based on historical collection experience and the review in each period of the status of the then outstanding accounts receivable, while taking into consideration current customer information, collection history, and other relevant data. The Company reviews the allowance for credit losses on a quarterly basis. Account balances are written off against the allowance when the Company believes it is probable the receivable will not be recovered. The following table presents the changes in the allowance for credit losses (in thousands): December 31, 2022 2021 2020 Allowance for credit losses, beginning balance $ 1,765 $ 1,989 $ 2,051 Provision — — 319 Write-offs — (224) (381) Allowance for credit losses, ending balance $ 1,765 $ 1,765 $ 1,989 Property and Equipment Property and equipment, including leasehold improvements, are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, generally three years. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the remaining lease term. Internal Use Software Development Costs The Company capitalizes certain internal use software development costs associated with creating and enhancing internal use software related to its platform and technology infrastructure. These costs include personnel and related employee benefits expenses for employees who are directly associated with and who devote time to software projects, and external direct costs of materials and services consumed in developing or obtaining the software. Software development costs that do not meet the criteria for capitalization are expensed as incurred and recorded in technology and development expenses in the consolidated statements of operations and comprehensive income. Software development activities generally consist of three stages, (i) the planning stage, (ii) the application and infrastructure development stage, and (iii) the post implementation stage. Costs incurred in the planning and post implementation stages of software development, including costs associated with the post configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed for internal use when both the preliminary project stage is completed and management has authorized further funding for the completion of the project. Costs incurred in the application and infrastructure development stages, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software and technologies are ready for their intended purpose. Internal use software development costs are amortized using a straight-line method over the estimated useful life of two Leases We determine if an arrangement is a lease at inception. The Company’s leases may include a non-lease component representing additional services transferred to the Company, such as common area maintenance for real estate. The Company accounts for each separate lease component and the non-lease components associated with that lease component as a single lease component. As such, minimum lease payments include fixed payments for non-lease components within a lease agreement but exclude variable lease payments not dependent on an index or rate, such as common area maintenance, operating expenses, utilities, or other costs that are subject to fluctuation from period to period. Non-lease components that are variable in nature are recorded as variable lease expense in the period incurred. The Company made an accounting policy election under Topic 842 not to recognize right-of-use (ROU) assets and lease liabilities for leases with a term of twelve months or less. For all other leases, the Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term at the commencement date of the lease. The ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date and are reduced by any lease incentives. The Company uses its incremental borrowing rate to determine the present value of lease payments, as the Company’s leases do not have a readily determinable implicit discount rate. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and amount in a similar economic environment. Judgement is applied in assessing factors such as Company-specific credit risk, lease term, nature and quality of the underlying collateral, currency, and economic environment in determining the incremental borrowing rate to apply to each lease. Operating lease assets and liabilities are included on our consolidated balance sheets. Finance lease assets are included in property, equipment and software, net. Finance lease liabilities are included in accrued liabilities or other liabilities, non-current. Impairment of Long-Lived Assets The Company continually monitors events and changes in circumstances that could indicate that carrying amounts of its long-lived assets, including property and equipment and intangible assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through their undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying value of these assets, the Company recognizes an impairment loss based on the excess of the carrying value over the fair value of the assets. Business Combinations The Company allocates the purchase consideration for acquired companies to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded to goodwill. These estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. Acquisition-related Intangible Assets and Goodwill Acquisition-related intangible assets with finite lives are amortized over their estimated useful lives on a straight-line basis. Goodwill amounts are not amortized. Acquisition-related intangible assets and goodwill are tested for impairment at least annually or more frequently if events or changes in circumstances indicate that the acquisition-related intangible assets or goodwill may be impaired. Events or changes in circumstances which could trigger an impairment review include a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company’s use of the acquired assets, or the strategy for the Company’s overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. The Company has not recorded any acquisition-related intangible assets or goodwill impairment to date. Impairment of Equity Investment Prior to December 2021, the Company measured its equity investment in a privately held company in which the Company did not own a controlling interest or exercise significant influence using the measurement alternative for equity securities without a readily determinable fair value. Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. During December 2021, an observable transaction occurred for the Company’s equity investment wherein the privately held company merged with a publicly held company whose shares of common stock were publicly quoted in the Over-the-Counter (“OTC”) market. Therefore, the equity investment had a readily determinable fair value as of December 31, 2021 and was subsequently measured at fair value in the Company’s consolidated balance sheets with unrealized gains and losses included in other income (expense), net in the Company’s consolidated statements of operations. However, during September 2022, the Company concluded there was no longer a readily determinable fair value for its equity investment because the shares were no longer publicly quoted pursuant to U.S. Securities and Exchange Commission (“SEC”) Rule 15c2-11. The Company evaluated the measurement guidance for equity securities without a readily determinable fair value and performed a qualitative assessment of various impairment indicators and concluded the equity investment was fully impaired as of September 30, 2022 and December 31, 2022. As a result, the Company recognized an impairment loss equal to the difference between the fair value of the investment and its carrying amount. An impairment charge of $5.9 million was recorded within other income (expense), net in the Company’s consolidated statements of operations for the year ended December 31, 2022. Revenue Recognition The Company recognizes revenue through the following steps: • Identification of a contract with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the performance obligations are satisfied. The Company refers to its publishers, app developers, and channel partners collectively as its publishers. The Company generates revenue through the monetization of publisher ad impressions on its platform. The Company’s platform allows publishers to sell, in real time, ad impressions to buyers and provides automated inventory management and monetization tools to publishers across various device types and digital ad formats. The Company charges publishers a fee, which is typically a percentage of the value of the ad impressions monetized through the Company’s platform. The Company maintains agreements with each publisher and buyer in the form of written service agreements, which set out the terms of the relationship, including payment terms (typically ninety days or less) and access to its platform. The Company invoices buyers for publisher digital advertising inventory purchased through its platform. The Company recognizes revenue when a bid is won and a buyer purchases inventory on its platform. The Company estimates and records reductions to revenue for rebates related to supply path optimization agreements based on expected volumes during the incentive term. The determination as to whether revenue should be reported gross of amounts billed to buyers (gross basis) or net of payments to publishers (net basis) requires significant judgment, and is based on the Company’s assessment of whether it is acting as the principal or an agent in the transaction. The Company has determined that it does not act as the principal in the purchase and sale of digital advertising inventory because it does not control the advertising inventory and it does not set the price which is the result of an auction within the marketplace. Based on these and other factors, the Company reports revenue on a net basis. The Company generally invoices buyers at the end of each month for the full purchase price of ad impressions monetized in that month. Accounts receivable are recorded at the amount of gross billings for the amounts the Company is responsible to collect, and accounts payable are recorded at the net amount payable to publishers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis. Cost of Revenue Cost of revenue consists primarily of data center co-location costs, depreciation expense related to hardware supporting the Company’s platform, amortization expense related to capitalized internal use software development costs, personnel costs, and allocated facilities costs. Personnel costs include salaries, bonuses, stock-based compensation, and employee benefit costs, and are primarily attributable to the Company’s network operations group which maintains the Company’s servers and the Company’s client operations group, which is responsible for integration of new publishers and buyers and providing customer support for existing customers. Technology and Development Costs Technology and development expenses consist primarily of personnel costs, including salaries, bonuses, stock-based compensation, and employee benefits costs, allocated facilities costs, and professional services. These expenses include costs incurred in the development, implementation and maintenance of internal use software, including platform and related infrastructure. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with internal use software development that meets the criteria for capitalization. The Company amortizes internal use software development costs that relate to its revenue producing activities on its platform to cost of revenue. Advertising Costs Advertising costs are expensed as incurred and are included in sales and marketing expenses. The Company’s advertising costs recorded during the years ended December 31, 2022, 2021 and 2020 were $0.3 million, $0.5 million and $0.5 million, respectively. Stock-Based Compensation Stock-based compensation expense related to stock awards, including stock options, restricted stock units (“RSUs”), and the employee stock purchase plan (the “ESPP”), is measured based on the fair value of the awards granted and recognized as an expense on a straight-line basis over the requisite service period. The fair value of each option and ESPP award is estimated on the grant date using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the expected term of the award, the expected volatility of the price of our common stock, risk-free interest rates, and the expected dividend yield of our common stock. The fair value of each RSU award is based on the fair value of the underlying common stock as of the grant date. The assumptions used to determine the fair value of the stock awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. The Company accounts for forfeitures as they occur instead of estimating the number of awards expected to be forfeited. For additional information regarding stock-based compensation and the assumptions used for determining the fair value of stock options and ESPP awards, refer to Note 10—Stockholders’ Equity and Equity Incentive Plans. Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. Accordingly, all monetary assets and liabilities of these subsidiaries are remeasured at the current exchange rate at each balance sheet date, nonmonetary assets and liabilities are measured at historical rates, and revenue and expenses are remeasured at average exchange rates during the period. Transaction gains and losses are included in other income (expense), net in the accompanying consolidated statements of operations. The Company’s net foreign currency gain (losses) recorded during the years ended December 31, 2022, 2021 and 2020 were $(0.7) million, $(0.1) million, and $0.6 million respectively. Income Taxes The Company utilizes the asset and liability method under which deferred tax assets and liabilities arise from the temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements, as well as from net operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided for under currently enacted tax law. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties related to income tax matters as income tax expense. Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis, for purposes of allocating resources and evaluating financial performance. The Company has one business activity and there are no segment managers accountable for operations, operating results beyond revenue or gross profit, or plans for levels or components below the consolidated unit level. Accordingly, the Company has one single reporting segment. Concentration of Revenue and Accounts Receivable The Company defines its revenue concentration based on revenue recognized from individual publishers. For the years ended December 31, 2022, 2021 and 2020, one publisher represented 13%, 17% and 20% respectively, of the Company’s revenue. As of December 31, 2022, three buyers accounted for 33%, 15%, and 11%, respectively, of accounts receivable. As of December 31, 2021, two buyers accounted for 29% and 19%, respectively, of accounts receivable. Net Income Per Share Attributable to Common Stockholders Basic and diluted net income per share attributable to Class A and Class B common stock is computed in conformity with the two-class method required for participating securities. The Company applies the two-class method to allocate earnings between common and other participating securities based on their participation rights. Prior to the conversion of preferred stock to common stock concurrent with the Company’s IPO in December 2020 and because the holders of the Company’s convertible preferred stock were entitled to participate in dividends, the Company allocated net income to common and preferred stock based on their respective rights to receive dividends, whether or not declared. Distributed and undistributed earnings allocated to participating securities are subtracted from net income in determining net income attributable to common stockholders. Basic net income per share is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of our Class A and Class B common stock outstanding. The diluted net income per share attributable to common stockholders is computed by giving effect to all dilutive securities. Diluted net income per share attributable to common stockholders is computed by dividing the resulting net income attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding. During the periods when there is a net loss attributable to common stockholders, potentially dilutive common stock equivalents have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive. Recent Accounting Pronouncements Not Yet Adopted In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured in accordance with Topic 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. Under current GAAP, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date. ASU 2021-08 is effective for the Company for interim and annual periods beginning after December 15, 2022 on a prospective basis, with early adoption permitted. The Company expects to adopt ASU 2021-08 in the first quarter of fiscal 2023. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and liabilities recorded at fair value on a recurring basis in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at 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 authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: • Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; • Level 2 – Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and • Level 3 – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company’s financial assets consist of Level 1 and 2 assets. The Company had no Level 3 assets or liabilities for the periods presented. The Company classifies its cash equivalents and marketable securities within Level 1 or Level 2 because they are valued using either quoted market prices or inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded. The Company’s fixed income available-for-sale securities consist of high quality, investment grade securities from diverse issuers. The valuation techniques used to measure the fair value of the Company’s marketable securities were derived from non-binding market consensus prices that are corroborated by observable market data and quoted market prices for similar instruments. The following tables set forth the fair value of the Company’s financial assets and liabilities measured on a recurring basis by level within the fair value hierarchy (in thousands): December 31, 2022 Level 1 Level 2 Level 3 Total Financial Assets Money market funds $ 48,884 $ — $ — $ 48,884 Certificates of deposit — 4,169 — 4,169 Cash equivalents 48,884 4,169 — 53,053 Commercial paper — 63,483 — 63,483 Agency debt securities — 5,778 — 5,778 U.S. Treasury and government debt securities — 12,752 — 12,752 Marketable securities — 82,013 — 82,013 Total Financial Assets $ 48,884 $ 86,182 $ — $ 135,066 December 31, 2021 Level 1 Level 2 Level 3 Total Financial Assets Money market funds $ 65,311 $ — $ — $ 65,311 Certificates of deposit — 5,942 — 5,942 Cash equivalents 65,311 5,942 — 71,253 Commercial paper — 50,954 — 50,954 U.S. Treasury and government debt securities — 26,167 — 26,167 Marketable securities — 77,121 — 77,121 Equity investment (1) 5,948 — — 5,948 Non-current assets 5,948 — — 5,948 Total Financial Assets $ 71,259 $ 83,063 $ — $ 154,322 There were no transfers between Level 1 and Level 2 fair value measurement categories during the years ended December 31, 2022 and 2021. _______________ (1) See Note 2 to the Company’s consolidated financial statements “Basis of Presentation and Summary of Significant Accounting Policies — Impairment of Equity Investment.” |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Balance Sheet Components Marketable Securities The following tables summarize the Company’s marketable securities by significant investment categories (in thousands): December 31, 2022 Amortized Cost Unrealized Gains Unrealized Loss Fair Value Commercial paper $ 63,483 $ — $ — $ 63,483 Agency debt securities 5,762 17 — 5,779 U.S. Treasury and government debt securities 12,777 2 (28) 12,751 Total $ 82,022 $ 19 $ (28) $ 82,013 December 31, 2021 Amortized Cost Unrealized Gains Unrealized Loss Fair Value Commercial paper $ 50,954 $ — $ — $ 50,954 U.S. Treasury and government debt securities 26,203 — (36) 26,167 Total $ 77,157 $ — $ (36) $ 77,121 The remaining contractual maturity of all marketable securities was within one year as of December 31, 2022 and 2021. Realized gains and losses were not material for the years ended December 31, 2022, 2021 and 2020. As of December 31, 2022 and 2021, there were no securities that were in an unrealized loss position for more than twelve months. Property, Equipment and Software, Net Property, equipment and software, net consisted of the following (in thousands): December 31, 2022 2021 Internal-use software $ 40,794 $ 30,581 Network hardware, computer equipment and software 129,212 92,561 Leasehold improvements 4,026 2,426 Furniture and fixtures 2,087 1,448 Property, equipment and software, gross 176,119 127,016 Less: accumulated depreciation and amortization (104,963) (76,876) Total property, equipment and software, net $ 71,156 $ 50,140 Depreciation and amortization expense related to property, equipment, and software (excluding amortization of internal use software) was $23.6 million, $15.7 million, and $9.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. The Company capitalized $14.5 million, $10.3 million, and $7.3 million in software development costs during the years ended December 31, 2022, 2021 and 2020, respectively. Fully-amortized software development costs of $4.3 million have been removed from internal-use software and accumulated depreciation and amortization for the year ended December 31, 2022. Amortization expense of internal use software was $10.0 million, $7.4 million, and $5.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. These costs are included within cost of revenue in the consolidated statements of operations. The Company did not recognize any impairment charges on its long-lived assets during the years ended December 31, 2022, 2021 and 2020 . Accounts Payable Accounts payable consisted of the following (in thousands): December 31, 2022 2021 Payable to publishers $ 266,506 $ 235,440 Trade payables 10,908 8,881 Total accounts payable $ 277,414 $ 244,321 Accrued Liabilities Accrued liabilities consisted of the following (in thousands): December 31, 2022 2021 Accrued compensation $ 14,587 $ 17,271 Accrued and other current liabilities 4,349 1,509 Total accrued liabilities $ 18,936 $ 18,780 |
Loan and Security Agreement and
Loan and Security Agreement and Senior Secured Credit Facilities Agreement | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Loan and Security Agreement and Senior Secured Credit Facilities Agreement | Loan and Security Agreement and Senior Secured Credit Facilities Agreement Loan and Security Agreement In June 2021, the Company amended and restated its loan and security agreement (the “Loan and Security Agreement”) with Silicon Valley Bank. The Loan and Security Agreement provided a senior secured revolving credit facility of up to $25.0 million or 80% of eligible accounts receivable less certain reserves, minus the aggregate principal amount of all outstanding advances. Interest accrued on advances under the revolving line of credit at a variable rate equal to the greater of prime rate or 3.25%. An unused revolver fee in the amount of 0.40% per annum of the average unused portion of the revolver line was charged and was payable quarterly in arrears in any quarter where the average closing outstanding balance was less than $5.0 million. The maturity date of the revolving line of credit was June 6, 2024. As described further below, on October 17, 2022, the Company entered into a Senior Secured Credit Facilities Credit Agreement. In connection with the entry into the Senior Secured Credit Facilities Credit Agreement, the Company’s existing Loan and Security Agreement, as amended, was terminated. There were no outstanding advances under the Loan and Security Agreement upon its termination. Senior Secured Credit Facilities Agreement On October 17, 2022, the Company entered into a Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”) with the several lenders parties thereto (the “Lenders”), and Silicon Valley Bank (“SVB”), as administrative agent, lead arranger, issuing lender, and swingline lender. The Credit Agreement provides a revolving credit facility in an aggregate principal amount of $110.0 million (“the Revolving Credit Facility”), including a $25.0 million letter of credit sub-facility and a $25.0 million swingline sub-facility. The Company’s obligations under the Revolving Credit Facility and the letter of credit sub-facility (described in Note 9) with SVB are secured by substantially all of its assets excluding its intellectual property. The Company may, subject to certain customary conditions, on one or more occasions increase commitments under the Revolving Credit Facility in an amount not to exceed $90.0 million in the aggregate (the “Incremental Facility”). Each Lender will have discretion to determine whether it will participate in any Incremental Facility. The Credit Agreement matures on October 17, 2027. Borrowings under the Revolving Credit Facility will accrue interest at rates equal, at the Company’s election, to (i) the applicable secured overnight financing rate (“SOFR”), plus the applicable margin for such loans, or (ii) the alternate base rate (“ABR”), which is defined as the highest of (a) the prime rate in effect from time to time, (b) the federal funds effective rate in effect from time to time plus 0.50%, and (c) the adjusted term SOFR for a one (1) month tenor in effect from time to time plus 1.0%, plus the applicable margin for such loans. The applicable margin for borrowings bearing interest on the SOFR ranges from 2.00% to 2.75%, and the applicable margin for borrowings bearing interest based on the ABR ranges from 1.00% to 1.75%. The Company will pay a quarterly commitment fee during the term of the Credit Agreement for the non-use of available funds ranging from 0.25% to 0.35%. In addition, the Credit Agreement provides a mechanism to determine a successor reference rate to the applicable reference rate if, among other things, the applicable reference rate becomes unavailable or is generally replaced as a benchmark interest rate. The Credit Agreement contains customary representations and warranties as well as customary affirmative and negative covenants. Negative covenants include, among others, limitations on incurrence of indebtedness, liens, disposition of property and investments by the Company and its subsidiaries. In addition, the Credit Agreement requires the Company to maintain certain interest coverage, leverage and senior leverage ratios. The Company was in compliance with these covenants as of December 31, 2022. The Credit Agreement contains customary events of default. Upon the occurrence and during the continuance of an event of default, the Lenders may declare the outstanding advances and all other obligations under the Credit Agreement immediately due and payable. The Company may use amounts borrowed under the Credit Agreement to refinance the Existing Credit Agreement, for general corporate purposes or working capital financing. The Company may borrow additional amounts under the Credit Agreement from time to time as opportunities and needs arise. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. Under Topic 842, a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company also considers whether its service arrangements include the right to control the use of an asset. The Company leases office facilities from unrelated parties under operating lease agreements that have initial terms ranging from 2 to 10 years. Included in an office lease the Company also leases furniture and fixtures under a finance lease with a seven year term with a purchase option at the end of the term. The allocation of lease payments was determined based on the relative standalone price of the separate office and furniture components. Some leases include one or more options to renew, generally at our sole discretion, with renewal terms that can extend the lease term up to 5 additional years. In addition, certain leases contain termination options, where the rights to terminate are held by either the Company, the lessor, or both parties. These options to extend or terminate a lease are not included in the lease terms as the Company is not reasonably certain that they will exercise that option. The Company’s leases generally do not contain any material restrictive covenants. Operating lease cost is recognized on a straight-line basis over the lease term. Finance lease cost is recognized as a combination of the amortization expense for the right-of-use assets and interest expense for the outstanding lease liabilities, and results in a front-loaded expense pattern over the lease term. Short-term and variable lease costs are not material to the Company’s consolidated financial statements. The components of lease cost were as follows (in thousands): Year Ended December 31, 2022 2021 Operating lease cost $ 6,876 $ 2,104 Finance lease cost - amortization of right-of-use assets 174 14 Finance lease cost - interest on lease liabilities 18 2 Total lease cost $ 7,068 $ 2,120 Supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2022 2021 Cash paid for amounts included in measurement of lease liabilities: Operating cash outflows - payments on operating leases $ 5,015 $ 2,283 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 10,424 $ 20,887 Finance leases $ — $ 869 Supplemental balance sheet information related to leases was as follows (in thousands): December 31, 2022 2021 Operating leases Operating lease right-of-use assets $ 26,206 $ 21,613 Operating lease liabilities, current $ 5,676 $ 3,864 Operating lease liabilities, non-current 20,915 17,842 Total operating lease liabilities $ 26,591 $ 21,706 Finance leases Furniture and fixtures $ 869 $ 869 Accumulated depreciation (188) (14) Furniture and fixtures, net $ 681 $ 855 Accrued liabilities $ 125 $ 119 Other liabilities, non-current 616 741 Total finance lease liabilities $ 741 $ 860 Other information related to leases was as follows: December 31, 2022 2021 Weighted-average remaining lease term: Operating leases 4.6 years 6.0 years Finance leases 5.3 years 6.3 years Weighted-average discount rate: Operating leases 3.22 % 2.20 % Finance leases 2.24 % 2.24 % As of December 31, 2022, the maturities of lease liabilities under operating and finance leases were as follows (in thousands): Operating Leases Finance Leases Total Year ending December 31, 2023 $ 6,440 $ 140 $ 6,580 2024 6,499 145 6,644 2025 5,129 149 5,278 2026 5,347 153 5,500 2027 4,256 158 4,414 Thereafter 980 41 1,021 Total minimum lease payments 28,651 786 29,437 Less: imputed interest (2,060) (45) (2,105) Total present value of lease liabilities $ 26,591 $ 741 $ 27,332 |
Leases | Leases The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. Under Topic 842, a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company also considers whether its service arrangements include the right to control the use of an asset. The Company leases office facilities from unrelated parties under operating lease agreements that have initial terms ranging from 2 to 10 years. Included in an office lease the Company also leases furniture and fixtures under a finance lease with a seven year term with a purchase option at the end of the term. The allocation of lease payments was determined based on the relative standalone price of the separate office and furniture components. Some leases include one or more options to renew, generally at our sole discretion, with renewal terms that can extend the lease term up to 5 additional years. In addition, certain leases contain termination options, where the rights to terminate are held by either the Company, the lessor, or both parties. These options to extend or terminate a lease are not included in the lease terms as the Company is not reasonably certain that they will exercise that option. The Company’s leases generally do not contain any material restrictive covenants. Operating lease cost is recognized on a straight-line basis over the lease term. Finance lease cost is recognized as a combination of the amortization expense for the right-of-use assets and interest expense for the outstanding lease liabilities, and results in a front-loaded expense pattern over the lease term. Short-term and variable lease costs are not material to the Company’s consolidated financial statements. The components of lease cost were as follows (in thousands): Year Ended December 31, 2022 2021 Operating lease cost $ 6,876 $ 2,104 Finance lease cost - amortization of right-of-use assets 174 14 Finance lease cost - interest on lease liabilities 18 2 Total lease cost $ 7,068 $ 2,120 Supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2022 2021 Cash paid for amounts included in measurement of lease liabilities: Operating cash outflows - payments on operating leases $ 5,015 $ 2,283 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 10,424 $ 20,887 Finance leases $ — $ 869 Supplemental balance sheet information related to leases was as follows (in thousands): December 31, 2022 2021 Operating leases Operating lease right-of-use assets $ 26,206 $ 21,613 Operating lease liabilities, current $ 5,676 $ 3,864 Operating lease liabilities, non-current 20,915 17,842 Total operating lease liabilities $ 26,591 $ 21,706 Finance leases Furniture and fixtures $ 869 $ 869 Accumulated depreciation (188) (14) Furniture and fixtures, net $ 681 $ 855 Accrued liabilities $ 125 $ 119 Other liabilities, non-current 616 741 Total finance lease liabilities $ 741 $ 860 Other information related to leases was as follows: December 31, 2022 2021 Weighted-average remaining lease term: Operating leases 4.6 years 6.0 years Finance leases 5.3 years 6.3 years Weighted-average discount rate: Operating leases 3.22 % 2.20 % Finance leases 2.24 % 2.24 % As of December 31, 2022, the maturities of lease liabilities under operating and finance leases were as follows (in thousands): Operating Leases Finance Leases Total Year ending December 31, 2023 $ 6,440 $ 140 $ 6,580 2024 6,499 145 6,644 2025 5,129 149 5,278 2026 5,347 153 5,500 2027 4,256 158 4,414 Thereafter 980 41 1,021 Total minimum lease payments 28,651 786 29,437 Less: imputed interest (2,060) (45) (2,105) Total present value of lease liabilities $ 26,591 $ 741 $ 27,332 |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | Business CombinationOn September 16, 2022, the Company acquired all outstanding stock of ConsultMates, Inc. (dba “Martin”), a media measurement and reporting platform, for $30.8 million. The acquisition is in response to growing demand from the Company’s buy-side customers for enhanced tools to take advantage of the Company’s global omnichannel inventory, including market-leading addressability solutions and innovative technology to enable supply path optimization. The assets acquired and liabilities assumed were recorded at fair value. The purchase price excludes $14.2 million of post-acquisition cash compensation arrangements for certain key acquired employees to be paid ratably over three years following the closing of the acquisition (subject to forfeiture upon termination). The purchase price was preliminarily attributed to $7.9 million of developed technology intangible assets (to be amortized over an estimated useful life of five years), $1.0 million of customer relationship intangible assets (to be amortized over an estimated useful life of two years), $23.3 million of goodwill, $1.1 million of deferred tax liabilities, and $0.3 million of net liabilities assumed. The fair value of the acquired developed technology intangible asset was estimated using the excess earnings method. This valuation methodology included an analysis of future class flows expected to be generated by the developed technology intangible asset. The fair values of assets acquired and liabilities assumed may change over the measurement period as additional information is received. The measurement period will end no later than one year from the acquisition date. The goodwill recognized was primarily attributable to the assembled workforce and the expected synergies from integrating Martin’s technology into the Company’s platform. Goodwill is not expected to be deductible for tax purposes. The financial results of Martin are included in the Company’s consolidated financial statements from the date of acquisition. Separate operating results and pro forma results of operations for Martin have not been presented as the effect of this acquisition was not material to the Company’s financial results. Acquisition-related costs were $0.9 million and are included in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2022. |
Goodwill and Acquisition-relate
Goodwill and Acquisition-related Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquisition-related Intangible Assets, Net | Goodwill and Acquisition-related Intangible Assets, Net Goodwill Changes in the carrying amounts of goodwill are as follows (in thousands): Balance as of December 31, 2020 and 2021 $ 6,250 ConsultMates, Inc. (Note 7) 23,327 Balance as of December 31, 2022 $ 29,577 Acquisition-related Intangible Assets, Net Acquisition-related intangible assets, net consisted of the following (in thousands): December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life (in years) Developed technology $ 7,900 $ 456 $ 7,444 4.75 Customer relationships 1,000 145 855 1.75 Total acquisition-related intangible assets $ 8,900 $ 601 $ 8,299 4.44 Amortization expense related to acquisition-related intangibles was $0.6 million for the year ended December 31, 2022. As of December 31, 2022, estimated future amortization expense for acquisition-related intangible assets was as follows (in thousands): 2023 $ 2,080 2024 1,936 2025 1,580 2026 1,580 2027 1,123 Total estimated future amortization expense for acquisition-related intangible assets $ 8,299 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Obligations The Company’s purchase obligations primarily relate to minimum contractual payments due to data center providers. As of December 31, 2022, future minimum commitments for purchase obligations with a remaining term in excess of one year were as follows (in thousands): Years ending December 31, 2023 19,698 2024 15,798 2025 5,584 Total future minimum commitments, net $ 41,080 Letters of Credit As of December 31, 2022, the Company had two irrevocable letters of credit outstanding related to noncancelable facilities leases in the amounts of $0.5 million and $3.5 million, with annual automatic renewal and final expiration dates in April 2025 and July 2028, respectively. As of December 31, 2021, the Company had two irrevocable letters of credit outstanding related to noncancelable facilities leases in the amounts of $0.7 million and $3.5 million, with annual automatic renewal and final expiration dates in June 2022 and July 2028, respectively. Legal Matters From time to time, the Company is or may be involved in various claims and other legal matters arising in the normal course of business. The Company records an accrual for a liability relating to claims and other legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any such accruals are reviewed at least quarterly and adjusted for the impacts of negotiations, rulings, settlements, and other information or events pertaining to a particular matter, or on the advice of legal counsel. To date, the Company has not incurred a material loss, or a material loss in excess of a recorded accrual, with respect to any claims and other legal matters arising in the normal course of business. However, the outcomes of claims and other legal matters are inherently unpredictable and subject to significant uncertainties. If the Company subsequently concludes that there is a reasonable possibility that a loss exceeding amounts already recognized may be incurred, and the amount of such additional loss would be material, the Company will either disclose the estimated additional loss or state that such an estimate cannot be made. Indemnification In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves future claims that may be made against the Company, but have not yet been made. To date, the Company has not paid any material claims or been required to defend any actions related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. In addition, the Company has indemnification agreements with certain of its directors and executive officers that require it, among other things, to indemnify them against certain liabilities that may arise due to their status or service as directors or officers of the Company. The terms of such obligations may vary. |
Stockholders_ Equity and Equity
Stockholders’ Equity and Equity Incentive Plans | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders’ Notes Receivable, Redeemable Common Stock and Stock Option Plans | Stockholders’ Equity and Equity Incentive Plans Common Stock The Company’s board of directors has authorized 1,000,000,000 shares of Class A common stock, $0.0001 par value per share, and 1,000,000,000 shares of Class B common stock, $0.0001 par value per share. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Holders of Class A common stock are entitled to one vote and holders of Class B common stock are entitled to ten votes and is convertible into one share of Class A common stock. Each share of Class B is convertible anytime at the option of the holder into one share of Class A common stock. Once converted or transferred and converted into Class A common stock, the Class B common stock will not be reissued. Equity Incentive Plans The Company maintains the 2020 Equity Incentive Plan (“2020 Plan”), pursuant to which the Company may grant stock options, restricted stock awards, stock appreciation rights, restricted stock units (“RSUs”), deferred stock units (“DSUs”) performance awards, and stock bonus awards. As of December 31, 2022, the Company has reserved 7,280,745 shares of Class A common stock for the issuance of awards under the 2020 Plan. These available shares will increase automatically on January 1 for each of the first ten calendar years during the term of the 2020 Plan by the number of shares equal to the lesser of five percent (5%) of the aggregate number of outstanding shares of all classes of the Company’s common stock outstanding as of the immediately preceding December 31, or a number as may be determined by the Company’s board of directors or compensation committee. No new awards were issued under the Company’s prior 2006 Plan or 2017 Plan (“Prior Plans”) after the effective date of the 2020 Plan. To the extent outstanding awards under the 2006 Plan and the 2017 Plan are forfeited, expire unexercised, or would otherwise have been returned to the share reserve under the Prior Plans, the shares of Class B common stock subject to such awards instead will be available for future issuance as Class A common stock under the 2020 Plan. Stock Options Stock options granted under the Company’s stock incentive plans generally vest over four years, subject to the holder’s continued service through the vesting date and expire no later than ten years from the date of grant. The following table summarizes stock option activity and related information under the Company’s equity incentive plans: Options Outstanding Number of Shares Underlying Outstanding Options Weighted-Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding — December 31, 2021 6,542,351 $ 6.08 6.95 $ 184,727 Options granted 450,153 26.05 Options exercised (358,418) 3.33 Options canceled (148,070) 15.07 Options expired (9,777) 34.40 Outstanding — December 31, 2022 6,476,239 $ 7.38 6.10 $ 55,516 Vested and exercisable — December 31, 2022 5,089,579 $ 4.93 5.58 $ 48,635 The aggregate intrinsic value represents the difference between the exercise price of the options and the fair market value of our common stock on the date of exercise. The intrinsic value of options exercised was $6.4 million, $80.7 million and $15.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, unrecognized stock-based compensation of $14.1 million related to unvested stock options will be recognized on a straight-line basis over a weighted average period of 2.15 years. The fair value of stock options granted under the Company’s equity incentive plans was estimated using the following assumptions: Year Ended December 31, 2022 2021 2020 Fair market value of common stock $18.63-$31.79 $39.75-$54.07 $3.20-$17.00 Expected term (in years) 5.0-7.0 5.8-6.7 5.7-6.4 Risk-free interest rate 1.8%-3.4% 0.6%-1.0% 0.3%-1.5% Expected volatility 54%-57% 51%-54% 50%-55% Dividend rate —% —% —% Weighted-average grant date fair value of options granted $13.70 $20.30 $4.96 Each of these inputs is subjective and generally requires significant judgment to determine. These assumptions and estimates were determined as follows: Fair Value of Common Stock - Prior to the Company’s IPO in 2020, the fair value was determined by the board of directors, with input from management and valuation reports prepared by third-party valuation specialists. Subsequent to the Company’s IPO, the fair value of each share of underlying common stock was based on the closing price of the Company’s Class A common stock as reported on the date of the grant. Expected Term - The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. For option grants that are considered to be “plain vanilla,” the Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. For other option grants, the Company estimates expected term using historical data on employee exercises and post-vesting employment termination behavior taking into account the contractual life of the award. Risk-Free Interest Rate - The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term. Expected Volatility - Since the Company has a short trading history of its common stock, the expected volatility is derived from the average historical stock volatilities of several unrelated public companies within the Company’s industry that the Company considers to be comparable to its business over a period equivalent to the expected term of the stock option grants. Dividend Rate - The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to do so. Restricted Stock Units RSU awards generally vest over four years, subject to the holder’s continued service through the vesting date. The following table summarizes RSU activity and related information under the Company’s 2020 Plan: RSUs Number of Shares Weighted-Average Grant Date Fair Value per Share Aggregate Intrinsic Value (in thousands) Unvested — December 31, 2021 483,302 $ 35.23 $ 17,025 Granted 1,587,930 25.01 — Vested (308,433) 30.76 — Canceled/Forfeited (180,817) 29.51 — Unvested — December 31, 2022 1,581,982 $ 26.49 $ 20,264 As of December 31, 2022, unrecognized stock-based compensation of $37.8 million related to unvested RSUs will be recognized on a straight-line basis over a weighted average period of 2.96 years. 2020 Employee Stock Purchase Plan In November 2020, the Company’s board of directors adopted, and its stockholders approved, the 2020 Employee Stock Purchase Plan (“ESPP”), which became effective in connection with the Company’s IPO. A total of 500,000 shares of the Company’s Class A common stock were initially reserved for issuance under the ESPP. The aggregate number of shares reserved for issuance under the ESPP will increase automatically on January 1st of each of the first ten calendar years during the term of the ESPP by the number of shares equal to the lesser of (a) 1% of the total outstanding shares of all classes of the Company’s common stock as of the immediately preceding December 31 and (b) such number of shares of common stock as determined by the Company’s board of directors. The aggregate number of shares issued over the term of the ESPP may not exceed 7,500,000 shares of Class A common stock. As of December 31, 2022, the Company has reserved 529,888 shares of its common stock for issuance under the ESPP. Under the ESPP, Class A common stock will be purchased for the accounts of employees participating in the ESPP on each purchase date at a price per share equal to 85% of the lesser of: (a) the fair market value on the offering date or (b) the fair market value on the purchase date. The ESPP provides for, at maximum, 27 month offering periods and each offering period may consist of one or more six-month purchase periods, whereby the latest offering period commenced on June 1, 2022, and the offering periods thereafter consist of two six-month purchase periods ending May 31, 2023. As of December 31, 2022, $0.1 million has been withheld on behalf of employees for a future purchase under the ESPP due to the timing of payroll deductions and is included in accrued liabilities. For the twelve months ended December 31, 2022, 183,587 shares of our Class A common stock have been purchased under the ESPP. As of December 31, 2022, unrecognized stock-based compensation expense related to the ESPP was $0.4 million, which is expected to be recognized over a weighted-average period of 0.41 years. The fair value of purchase right granted the under the Company’s 2020 Employee Stock Purchase Plan was estimated using the following assumptions: Year Ended December 31, 2022 2021 Expected term (in years) 0.5-1.0 0.4-1.4 Risk-free interest rate 1.6%-2.2% 0.1% Expected volatility 83%-79% 60%-76% Dividend rate —% —% Expected Term - The expected term of the ESPP represents the period of time that purchase rights are expected to be outstanding. Risk-Free Interest Rate - The risk-free interest rate for the expected term of the awards was based on the U.S. Treasury yield curve in effect at the time of the grant. Expected Volatility - Since the Company has a short trading history of its common stock, the expected volatility was estimated by taking the average historic price volatility of several unrelated public companies within the Company’s industry that the Company considers to be comparable to its business over a period equivalent to the expected term of the awards. Dividend rate - The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. As a result, an expected dividend yield of zero percent was used. Stock-Based Compensation Total stock-based compensation expense recognized in the consolidated statements of operations was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenue $ 1,135 $ 825 $ 86 Technology and development 3,225 2,232 599 Sales and marketing 7,645 5,176 1,101 General and administrative 8,641 5,874 1,777 Total stock-based compensation expense 20,646 14,107 3,563 Tax benefit from stock-based compensation (3,537) (1,825) (493) Total stock-based compensation expense, net of tax effect $ 17,109 $ 12,282 $ 3,070 |
Net Income Per Share Attributab
Net Income Per Share Attributable to Common Stockholders | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share Attributable to Common Stockholders | Net Income Per Share Attributable to Common Stockholders The Company has two classes of common stock, Class A and Class B. The rights, including the liquidation and dividend rights, of the holders of Class A and Class B common stock are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and the resulting net loss per share attributed to common stockholders will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis. The following table sets forth the computation of the Company’s basic and diluted net income per share (in thousands, except share and per share data): Year Ended December 31, 2022 2021 2020 (in thousands, except share and per share data) Numerator: Net income $ 28,705 $ 56,604 $ 26,613 Less: Undistributed earnings allocated to participating securities — — (20,187) Net income attributable to common stockholders – basic $ 28,705 $ 56,604 $ 6,426 Denominator: Weighted average common shares outstanding – basic 52,278,009 50,184,455 12,642,293 Net income per share attributable to common stockholders – basic: $ 0.55 $ 1.13 $ 0.51 Numerator: Net income attributable to common stockholders - diluted $ 28,705 $ 56,604 $ 7,929 Denominator: Weighted average shares outstanding – basic 52,278,009 50,184,455 12,642,293 Options to purchase common stock 4,605,927 6,353,779 4,483,589 Restricted stock 12,647 29,662 — Employee stock purchase plan shares 11,614 60,678 — Weighted average shares outstanding – diluted 56,908,197 56,628,574 17,125,882 Net income per share attributable to common stockholders – diluted $ 0.50 $ 1.00 $ 0.46 The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net income per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive: Year Ended December 31, 2022 2021 2020 Options to purchase common stock 1,016,449 671,244 846,481 Unvested restricted stock units 1,164,817 — — ESPP 72,522 — — Total common stock equivalents excluded from net income per share attributable to common stockholders – diluted 2,253,788 671,244 846,481 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The domestic and foreign components of income before provision for income taxes were as follows (in thousands): December 31, 2022 2021 2020 Domestic $ 32,945 $ 61,822 $ 28,169 Foreign 4,522 2,981 3,411 Income before provision for income taxes $ 37,467 $ 64,803 $ 31,580 The provision for income taxes consisted of the following (in thousands): December 31, 2022 2021 2020 Current provisions for income taxes: Federal $ 11,379 $ 2,437 $ 360 State 2,060 714 240 Foreign 1,349 295 1,434 Total current tax expense 14,788 3,446 2,034 Deferred tax expense: Federal (5,491) 4,513 1,845 State (769) 251 1,170 Foreign 234 (11) (82) Total deferred tax expense (6,026) 4,753 2,933 Total provision for income taxes $ 8,762 $ 8,199 $ 4,967 The following table presents a reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate for the periods presented: December 31, 2022 2021 2020 Federal statutory income tax rate 21.00 % 21.00 % 21.00 % State after-tax rate 3.45 1.49 4.47 Stock options 2.67 (10.38) (6.79) Research credit (4.51) (1.37) (2.04) Transfer pricing reserve 0.76 (1.26) 1.32 Foreign rate differential (0.02) 0.73 0.61 Foreign derived intangible income (2.13) (0.48) (3.26) Section 162(m) limitation 2.59 2.49 — Other (0.38) 0.42 0.42 Effective tax rate 23.43 % 12.64 % 15.73 % Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): December 31, 2022 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 263 $ 56 $ 124 Accruals and allowances 1,067 1,104 614 Tax credits 1,954 1,396 1,631 Stock-based compensation 4,907 3,171 2,045 Unrealized gain on equity investment 124 — — Intangibles assets 907 1,010 1,106 Lease obligation 5,074 5,226 — Other 1,222 808 1,101 Total deferred tax assets 15,518 12,771 6,621 Valuation allowance (1,954) (1,396) (1,372) Total deferred tax assets, net of valuation allowance 13,564 11,375 5,249 Deferred tax liabilities: Property, equipment, and software (3,905) (8,316) (4,995) Goodwill (843) (749) (653) Prepaid expense (1,188) (1,365) (400) Right-of-use asset (5,158) (5,201) — Acquired intangibles (1,996) — — Unrealized loss on equity investment — (1,296) — Total deferred tax liabilities (13,090) (16,927) (6,048) Net deferred income tax asset (liabilities) $ 474 $ (5,552) $ (799) The Company had gross federal and state net operating loss carryforwards of approximately $1.1 million and $1.3 million, respectively, as of December 31, 2022. The federal net operating loss never expires and the state net operating losses will expire at various dates beginning in 2035 if not utilized and may be subject to annual limitations of usage, as promulgated by the Internal Revenue Service, due to ownership changes that may have occurred in the past. As of December 31, 2022, the Company had state research and development credit carryforwards of $4.1 million. The state credits can be carried forward indefinitely. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended (“Code”), the Company’s ability to utilize net operating loss carryforwards or other tax attributes, such as research tax credits, in any taxable year may be limited if the Company experiences an “ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of the Company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three year period. Similar rules may apply under state tax laws. Net operating loss carryforwards and other tax attributes generated are currently not subject to limitation by Section 382, but subsequent changes in the Company’s stock ownership as well as other changes that may be outside of the Company’s control, could result in additional ownership changes under Section 382 of the Code. Deferred Tax Valuation Allowance A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuation allowance is dependent upon the assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferred tax assets. Management has determined that there is sufficient positive evidence that a valuation allowance against deferred tax assets is not required as of December 31, 2022 and 2021, except for state research credit carryforwards, starting in 2020, for which realization is not deemed more likely than not given the Company expects to generate more credits in future than can be utilized against projected taxable income. The Company has not historically provided for U.S. deferred taxes on the cumulative earnings of non-U.S. affiliates that have been reinvested indefinitely. However, under the 2017 Tax Act the Company was deemed to have repatriated the cumulative earnings of its non-U.S. affiliates and the U.S. liability associated with those cumulative earnings has been reflected in the current federal tax provision. In addition, the Tax Act has enacted tax provisions that will subject all foreign earnings to U.S. taxation. The Company will continue to maintain its policy of indefinite reinvestment to the extent that the repatriation of foreign earnings are restricted by local laws, accounting rules, substantial incremental costs associated with repatriating the foreign earnings, or other business requirements. Uncertain Tax Positions The activity related to the unrecognized income tax benefits is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Gross unrecognized income tax benefits — beginning balance $ 2,364 $ 3,208 $ 2,369 Increases related to tax positions taken during the current year 1,788 649 951 Decreases related to tax positions taken during current year — — — Increases related to tax positions taken during the prior years 386 — — Decreases related to tax positions taken during the prior years (235) (1,493) (112) Gross unrecognized income tax benefits — ending balance $ 4,303 $ 2,364 $ 3,208 The Company recognizes interest and penalties, if any, related to uncertain tax positions in its income tax provision. As of December 31, 2022 and 2021, the Company had approximately $0.2 million and $0.1 million, respectively, of accrued interest related to uncertain tax positions. All of the $4.3 million of unrecognized income tax benefits would, if recognized, impact the effective tax rate in the period in which each of the benefits is recognized. The Company files U.S., state and foreign income tax returns with varying statutes of limitations. The federal, state, and foreign returns statute of limitations remains open for tax years from 2013 and thereafter. There are currently no income tax audits involving any U.S. states or foreign tax jurisdictions. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The following table presents total revenue by geographic area based on the publisher’s billing address (in thousands): Year Ended December 31, 2022 2021 2020 United States $ 156,067 $ 139,049 $ 96,886 EMEA 71,869 62,531 34,156 APAC 24,844 20,910 15,087 Rest of the world 3,600 4,418 2,619 Total $ 256,380 $ 226,908 $ 148,748 The following table presents property, equipment and software, net, by geographic area (in thousands): December 31, 2022 2021 United States $ 59,449 $ 42,059 Rest of the world 11,707 8,081 Total $ 71,156 $ 50,140 The following table presents operating lease right-of-use assets, by geographic area (in thousands): December 31, 2022 2021 United States $ 20,572 $ 20,956 Rest of the world $ 5,634 $ 657 Total $ 26,206 $ 21,613 |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
401(k) Plan | 401(k) PlanThe Company has a 401(k) Savings Plan (the “401(k) Plan”) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, participating employees may elect to contribute up to 100% of their eligible compensation, subject to certain limitations. The 401(k) Plan provides for a discretionary employer matching contribution. The Company made $1.2 million matching contribution to the 401(k) Plan for the year ended December 31, 2022 and zero matching contribution for the year ended December 31, 2021. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn February 27, 2023, our Board of Directors authorized a program for the repurchase of up to $75 million of our Class A common stock (“2023 Repurchase Program”). Pursuant to the 2023 Repurchase Program, we are authorized to repurchase shares in the open market and/or in privately negotiated transactions, in accordance with Rule 10b-18 and/or Rule 10b5-1 of the Exchange Act. The timing and total amount of the repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices and other considerations. The 2023 Repurchase Program is scheduled to terminate on December 31, 2024. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of PubMatic, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts reported in our consolidated financial statements and notes thereto have been reclassified to conform to the current period presentation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. Significant items subject to such estimates include: revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, internal use software development costs, stock-based compensation, acquisition-related intangible assets, and income taxes, including the valuation reserve on deferred tax assets. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates and assumptions. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, marketable securities, and accounts receivable. The Company maintains its cash and cash equivalents with financial institutions in amounts which exceed Federal Deposit Insurance Corporation limits. The Company’s investment policy limits investments to certain types of securities issued by the U.S. government and its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The primary objective of its investment activities is to preserve principal while maximizing income without significantly increasing risk. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. |
Marketable Securities | Marketable Securities The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification at each balance sheet date. The Company may sell these securities at any time for use in current operations even if they have not yet reached maturity. As a result, the Company classifies its marketable securities, including those with maturities beyond twelve months, as current assets in the consolidated balance sheets. These marketable securities are carried at fair value and unrealized gains and losses are recorded in other comprehensive income, which is reflected as a component of stockholders’ equity. These marketable securities are assessed as to whether those with unrealized loss positions are other than temporarily impaired. The Company considers impairments to be other than temporary if they are related to deterioration in credit risk or if it is likely the securities will be sold before the recovery of their cost basis. Realized gains and losses from the sale of marketable securities and declines in value deemed to be other than temporary are determined based on the specific identification method. Realized gains and losses, and any expected credit losses, are reported in other income (expense), net in the consolidated statements of operations and comprehensive income. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial instruments consist of cash equivalents, marketable securities, non-marketable equity investment, accounts receivable, accounts payable, and accrued liabilities. Cash equivalents and marketable securities are remeasured at fair value at the end of every period. Non-marketable equity investment is remeasured at fair value when there has been an observable price change from an orderly transaction for identical or similar investments of the same issuer. Accounts receivable, accounts payable and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit LossesAccounts receivable are recorded at the invoiced amount, are unsecured, and do not bear interest. The allowance for credit losses is based on the best estimate of the amount of probable credit losses in existing accounts receivable. The allowance for credit losses is determined based on historical collection experience and the review in each period of the status of the then outstanding accounts receivable, while taking into consideration current customer information, collection history, and other relevant data. The Company reviews the allowance for credit losses on a quarterly basis. Account balances are written off against the allowance when the Company believes it is probable the receivable will not be recovered. |
Property and Equipment | Property and Equipment Property and equipment, including leasehold improvements, are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, generally three years. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the remaining lease term. |
Internal Use Software Development Costs | Internal Use Software Development Costs The Company capitalizes certain internal use software development costs associated with creating and enhancing internal use software related to its platform and technology infrastructure. These costs include personnel and related employee benefits expenses for employees who are directly associated with and who devote time to software projects, and external direct costs of materials and services consumed in developing or obtaining the software. Software development costs that do not meet the criteria for capitalization are expensed as incurred and recorded in technology and development expenses in the consolidated statements of operations and comprehensive income. Software development activities generally consist of three stages, (i) the planning stage, (ii) the application and infrastructure development stage, and (iii) the post implementation stage. Costs incurred in the planning and post implementation stages of software development, including costs associated with the post configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. two |
Leases | Leases We determine if an arrangement is a lease at inception. The Company’s leases may include a non-lease component representing additional services transferred to the Company, such as common area maintenance for real estate. The Company accounts for each separate lease component and the non-lease components associated with that lease component as a single lease component. As such, minimum lease payments include fixed payments for non-lease components within a lease agreement but exclude variable lease payments not dependent on an index or rate, such as common area maintenance, operating expenses, utilities, or other costs that are subject to fluctuation from period to period. Non-lease components that are variable in nature are recorded as variable lease expense in the period incurred. The Company made an accounting policy election under Topic 842 not to recognize right-of-use (ROU) assets and lease liabilities for leases with a term of twelve months or less. For all other leases, the Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term at the commencement date of the lease. The ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date and are reduced by any lease incentives. The Company uses its incremental borrowing rate to determine the present value of lease payments, as the Company’s leases do not have a readily determinable implicit discount rate. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and amount in a similar economic environment. Judgement is applied in assessing factors such as Company-specific credit risk, lease term, nature and quality of the underlying collateral, currency, and economic environment in determining the incremental borrowing rate to apply to each lease. Operating lease assets and liabilities are included on our consolidated balance sheets. Finance lease assets are included in property, equipment and software, net. Finance lease liabilities are included in accrued liabilities or other liabilities, non-current. |
Impairment of Long-Lived Assets | Impairment of Long-Lived AssetsThe Company continually monitors events and changes in circumstances that could indicate that carrying amounts of its long-lived assets, including property and equipment and intangible assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through their undiscounted expected future cash flows. If the future undiscounted cash flows are less than the carrying value of these assets, the Company recognizes an impairment loss based on the excess of the carrying value over the fair value of the assets. |
Business Combinations | Business Combinations The Company allocates the purchase consideration for acquired companies to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded to goodwill. These estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. |
Acquisition-related Intangible Assets and Goodwill | Acquisition-related Intangible Assets and Goodwill Acquisition-related intangible assets with finite lives are amortized over their estimated useful lives on a straight-line basis. Goodwill amounts are not amortized. Acquisition-related intangible assets and goodwill are tested for impairment at least annually or more frequently if events or changes in circumstances indicate that the acquisition-related intangible assets or goodwill may be impaired. Events or changes in circumstances which could trigger an impairment review include a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company’s use of the acquired assets, or the strategy for the Company’s overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. The Company has not recorded any acquisition-related intangible assets or goodwill impairment to date. |
Impairment of Equity Investment | Impairment of Equity InvestmentPrior to December 2021, the Company measured its equity investment in a privately held company in which the Company did not own a controlling interest or exercise significant influence using the measurement alternative for equity securities without a readily determinable fair value. Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. During December 2021, an observable transaction occurred for the Company’s equity investment wherein the privately held company merged with a publicly held company whose shares of common stock were publicly quoted in the Over-the-Counter (“OTC”) market. Therefore, the equity investment had a readily determinable fair value as of December 31, 2021 and was subsequently measured at fair value in the Company’s consolidated balance sheets with unrealized gains and losses included in other income (expense), net in the Company’s consolidated statements of operations. However, during September 2022, the Company concluded there was no longer a readily determinable fair value for its equity investment because the shares were no longer publicly quoted pursuant to U.S. Securities and Exchange Commission (“SEC”) Rule 15c2-11. The Company evaluated the measurement guidance for equity securities without a readily determinable fair value and performed a qualitative assessment of various impairment indicators and concluded the equity investment was fully impaired as of September 30, 2022 and December 31, 2022. As a result, the Company recognized an impairment loss equal to the difference between the fair value of the investment and its carrying amount. An impairment charge of $5.9 million was recorded within other income (expense), net in the Company’s consolidated statements of operations for the year ended December 31, 2022 |
Revenue Recognition and Cost of Revenue | Revenue Recognition The Company recognizes revenue through the following steps: • Identification of a contract with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the performance obligations are satisfied. The Company refers to its publishers, app developers, and channel partners collectively as its publishers. The Company generates revenue through the monetization of publisher ad impressions on its platform. The Company’s platform allows publishers to sell, in real time, ad impressions to buyers and provides automated inventory management and monetization tools to publishers across various device types and digital ad formats. The Company charges publishers a fee, which is typically a percentage of the value of the ad impressions monetized through the Company’s platform. The Company maintains agreements with each publisher and buyer in the form of written service agreements, which set out the terms of the relationship, including payment terms (typically ninety days or less) and access to its platform. The Company invoices buyers for publisher digital advertising inventory purchased through its platform. The Company recognizes revenue when a bid is won and a buyer purchases inventory on its platform. The Company estimates and records reductions to revenue for rebates related to supply path optimization agreements based on expected volumes during the incentive term. The determination as to whether revenue should be reported gross of amounts billed to buyers (gross basis) or net of payments to publishers (net basis) requires significant judgment, and is based on the Company’s assessment of whether it is acting as the principal or an agent in the transaction. The Company has determined that it does not act as the principal in the purchase and sale of digital advertising inventory because it does not control the advertising inventory and it does not set the price which is the result of an auction within the marketplace. Based on these and other factors, the Company reports revenue on a net basis. The Company generally invoices buyers at the end of each month for the full purchase price of ad impressions monetized in that month. Accounts receivable are recorded at the amount of gross billings for the amounts the Company is responsible to collect, and accounts payable are recorded at the net amount payable to publishers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis. Cost of Revenue Cost of revenue consists primarily of data center co-location costs, depreciation expense related to hardware supporting the Company’s platform, amortization expense related to capitalized internal use software development costs, personnel costs, and allocated facilities costs. Personnel costs include salaries, bonuses, stock-based compensation, and employee benefit costs, and are primarily attributable to the Company’s network operations group which maintains the Company’s servers and the Company’s client operations group, which is responsible for integration of new publishers and buyers and providing customer support for existing customers. |
Technology and Development Costs | Technology and Development CostsTechnology and development expenses consist primarily of personnel costs, including salaries, bonuses, stock-based compensation, and employee benefits costs, allocated facilities costs, and professional services. These expenses include costs incurred in the development, implementation and maintenance of internal use software, including platform and related infrastructure. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with internal use software development that meets the criteria for capitalization. The Company amortizes internal use software development costs that relate to its revenue producing activities on its platform to cost of revenue. |
Advertising Costs | Advertising CostsAdvertising costs are expensed as incurred and are included in sales and marketing expenses. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense related to stock awards, including stock options, restricted stock units (“RSUs”), and the employee stock purchase plan (the “ESPP”), is measured based on the fair value of the awards granted and recognized as an expense on a straight-line basis over the requisite service period. The fair value of each option and ESPP award is estimated on the grant date using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the expected term of the award, the expected volatility of the price of our common stock, risk-free interest rates, and the expected dividend yield of our common stock. The fair value of each RSU award is based on the fair value of the underlying common stock as of the grant date. The assumptions used to determine the fair value of the stock awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. The Company accounts for forfeitures as they occur instead of estimating the number of awards expected to be forfeited. For additional information regarding stock-based compensation and the assumptions used for determining the fair value of stock options and ESPP awards, refer to Note 10—Stockholders’ Equity and Equity Incentive Plans. |
Foreign Currency Translation | Foreign Currency TranslationThe functional currency of the Company’s foreign subsidiaries is the U.S. dollar. Accordingly, all monetary assets and liabilities of these subsidiaries are remeasured at the current exchange rate at each balance sheet date, nonmonetary assets and liabilities are measured at historical rates, and revenue and expenses are remeasured at average exchange rates during the period. Transaction gains and losses are included in other income (expense), net in the accompanying consolidated statements of operations. |
Income Taxes | Income Taxes The Company utilizes the asset and liability method under which deferred tax assets and liabilities arise from the temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements, as well as from net operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided for under currently enacted tax law. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties related to income tax matters as income tax expense. |
Segment Information | Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis, for purposes of allocating resources and evaluating financial performance. The Company has one business activity and there are no segment managers accountable for operations, operating results beyond revenue or gross profit, or plans for levels or components below the consolidated unit level. Accordingly, the Company has one single reporting segment. |
Net Income Per Share Attributable to Common Stockholders | Net Income Per Share Attributable to Common Stockholders Basic and diluted net income per share attributable to Class A and Class B common stock is computed in conformity with the two-class method required for participating securities. The Company applies the two-class method to allocate earnings between common and other participating securities based on their participation rights. Prior to the conversion of preferred stock to common stock concurrent with the Company’s IPO in December 2020 and because the holders of the Company’s convertible preferred stock were entitled to participate in dividends, the Company allocated net income to common and preferred stock based on their respective rights to receive dividends, whether or not declared. Distributed and undistributed earnings allocated to participating securities are subtracted from net income in determining net income attributable to common stockholders. Basic net income per share is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of our Class A and Class B common stock outstanding. The diluted net income per share attributable to common stockholders is computed by giving effect to all dilutive securities. Diluted net income per share attributable to common stockholders is computed by dividing the resulting net income attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding. During the periods when there is a net loss attributable to common stockholders, potentially dilutive common stock equivalents have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured in accordance with Topic 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. Under current GAAP, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date. ASU 2021-08 is effective for the Company for interim and annual periods beginning after December 15, 2022 on a prospective basis, with early adoption permitted. The Company expects to adopt ASU 2021-08 in the first quarter of fiscal 2023. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Accounts Receivable, Allowance for Credit Loss | The following table presents the changes in the allowance for credit losses (in thousands): December 31, 2022 2021 2020 Allowance for credit losses, beginning balance $ 1,765 $ 1,989 $ 2,051 Provision — — 319 Write-offs — (224) (381) Allowance for credit losses, ending balance $ 1,765 $ 1,765 $ 1,989 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables set forth the fair value of the Company’s financial assets and liabilities measured on a recurring basis by level within the fair value hierarchy (in thousands): December 31, 2022 Level 1 Level 2 Level 3 Total Financial Assets Money market funds $ 48,884 $ — $ — $ 48,884 Certificates of deposit — 4,169 — 4,169 Cash equivalents 48,884 4,169 — 53,053 Commercial paper — 63,483 — 63,483 Agency debt securities — 5,778 — 5,778 U.S. Treasury and government debt securities — 12,752 — 12,752 Marketable securities — 82,013 — 82,013 Total Financial Assets $ 48,884 $ 86,182 $ — $ 135,066 December 31, 2021 Level 1 Level 2 Level 3 Total Financial Assets Money market funds $ 65,311 $ — $ — $ 65,311 Certificates of deposit — 5,942 — 5,942 Cash equivalents 65,311 5,942 — 71,253 Commercial paper — 50,954 — 50,954 U.S. Treasury and government debt securities — 26,167 — 26,167 Marketable securities — 77,121 — 77,121 Equity investment (1) 5,948 — — 5,948 Non-current assets 5,948 — — 5,948 Total Financial Assets $ 71,259 $ 83,063 $ — $ 154,322 There were no transfers between Level 1 and Level 2 fair value measurement categories during the years ended December 31, 2022 and 2021. _______________ (1) See Note 2 to the Company’s consolidated financial statements “Basis of Presentation and Summary of Significant Accounting Policies — Impairment of Equity Investment.” |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Debt Securities, Available-for-sale | The following tables summarize the Company’s marketable securities by significant investment categories (in thousands): December 31, 2022 Amortized Cost Unrealized Gains Unrealized Loss Fair Value Commercial paper $ 63,483 $ — $ — $ 63,483 Agency debt securities 5,762 17 — 5,779 U.S. Treasury and government debt securities 12,777 2 (28) 12,751 Total $ 82,022 $ 19 $ (28) $ 82,013 December 31, 2021 Amortized Cost Unrealized Gains Unrealized Loss Fair Value Commercial paper $ 50,954 $ — $ — $ 50,954 U.S. Treasury and government debt securities 26,203 — (36) 26,167 Total $ 77,157 $ — $ (36) $ 77,121 |
Property, Plant and Equipment | Property, equipment and software, net consisted of the following (in thousands): December 31, 2022 2021 Internal-use software $ 40,794 $ 30,581 Network hardware, computer equipment and software 129,212 92,561 Leasehold improvements 4,026 2,426 Furniture and fixtures 2,087 1,448 Property, equipment and software, gross 176,119 127,016 Less: accumulated depreciation and amortization (104,963) (76,876) Total property, equipment and software, net $ 71,156 $ 50,140 |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable consisted of the following (in thousands): December 31, 2022 2021 Payable to publishers $ 266,506 $ 235,440 Trade payables 10,908 8,881 Total accounts payable $ 277,414 $ 244,321 |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): December 31, 2022 2021 Accrued compensation $ 14,587 $ 17,271 Accrued and other current liabilities 4,349 1,509 Total accrued liabilities $ 18,936 $ 18,780 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease, Cost | The components of lease cost were as follows (in thousands): Year Ended December 31, 2022 2021 Operating lease cost $ 6,876 $ 2,104 Finance lease cost - amortization of right-of-use assets 174 14 Finance lease cost - interest on lease liabilities 18 2 Total lease cost $ 7,068 $ 2,120 Supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2022 2021 Cash paid for amounts included in measurement of lease liabilities: Operating cash outflows - payments on operating leases $ 5,015 $ 2,283 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 10,424 $ 20,887 Finance leases $ — $ 869 |
Assets and Liabilities, Lessee | Supplemental balance sheet information related to leases was as follows (in thousands): December 31, 2022 2021 Operating leases Operating lease right-of-use assets $ 26,206 $ 21,613 Operating lease liabilities, current $ 5,676 $ 3,864 Operating lease liabilities, non-current 20,915 17,842 Total operating lease liabilities $ 26,591 $ 21,706 Finance leases Furniture and fixtures $ 869 $ 869 Accumulated depreciation (188) (14) Furniture and fixtures, net $ 681 $ 855 Accrued liabilities $ 125 $ 119 Other liabilities, non-current 616 741 Total finance lease liabilities $ 741 $ 860 Other information related to leases was as follows: December 31, 2022 2021 Weighted-average remaining lease term: Operating leases 4.6 years 6.0 years Finance leases 5.3 years 6.3 years Weighted-average discount rate: Operating leases 3.22 % 2.20 % Finance leases 2.24 % 2.24 % |
Lessee, Operating Lease, Liability, Maturity | As of December 31, 2022, the maturities of lease liabilities under operating and finance leases were as follows (in thousands): Operating Leases Finance Leases Total Year ending December 31, 2023 $ 6,440 $ 140 $ 6,580 2024 6,499 145 6,644 2025 5,129 149 5,278 2026 5,347 153 5,500 2027 4,256 158 4,414 Thereafter 980 41 1,021 Total minimum lease payments 28,651 786 29,437 Less: imputed interest (2,060) (45) (2,105) Total present value of lease liabilities $ 26,591 $ 741 $ 27,332 |
Finance Lease, Liability, Fiscal Year Maturity | As of December 31, 2022, the maturities of lease liabilities under operating and finance leases were as follows (in thousands): Operating Leases Finance Leases Total Year ending December 31, 2023 $ 6,440 $ 140 $ 6,580 2024 6,499 145 6,644 2025 5,129 149 5,278 2026 5,347 153 5,500 2027 4,256 158 4,414 Thereafter 980 41 1,021 Total minimum lease payments 28,651 786 29,437 Less: imputed interest (2,060) (45) (2,105) Total present value of lease liabilities $ 26,591 $ 741 $ 27,332 |
Goodwill and Acquisition-rela_2
Goodwill and Acquisition-related Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amounts of goodwill are as follows (in thousands): Balance as of December 31, 2020 and 2021 $ 6,250 ConsultMates, Inc. (Note 7) 23,327 Balance as of December 31, 2022 $ 29,577 |
Schedule of Acquired Indefinite-Lived Intangible Assets by Major Class | Acquisition-related intangible assets, net consisted of the following (in thousands): December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life (in years) Developed technology $ 7,900 $ 456 $ 7,444 4.75 Customer relationships 1,000 145 855 1.75 Total acquisition-related intangible assets $ 8,900 $ 601 $ 8,299 4.44 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of December 31, 2022, estimated future amortization expense for acquisition-related intangible assets was as follows (in thousands): 2023 $ 2,080 2024 1,936 2025 1,580 2026 1,580 2027 1,123 Total estimated future amortization expense for acquisition-related intangible assets $ 8,299 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity | As of December 31, 2022, future minimum commitments for purchase obligations with a remaining term in excess of one year were as follows (in thousands): Years ending December 31, 2023 19,698 2024 15,798 2025 5,584 Total future minimum commitments, net $ 41,080 |
Stockholders_ Equity and Equi_2
Stockholders’ Equity and Equity Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table summarizes stock option activity and related information under the Company’s equity incentive plans: Options Outstanding Number of Shares Underlying Outstanding Options Weighted-Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding — December 31, 2021 6,542,351 $ 6.08 6.95 $ 184,727 Options granted 450,153 26.05 Options exercised (358,418) 3.33 Options canceled (148,070) 15.07 Options expired (9,777) 34.40 Outstanding — December 31, 2022 6,476,239 $ 7.38 6.10 $ 55,516 Vested and exercisable — December 31, 2022 5,089,579 $ 4.93 5.58 $ 48,635 The following table summarizes RSU activity and related information under the Company’s 2020 Plan: RSUs Number of Shares Weighted-Average Grant Date Fair Value per Share Aggregate Intrinsic Value (in thousands) Unvested — December 31, 2021 483,302 $ 35.23 $ 17,025 Granted 1,587,930 25.01 — Vested (308,433) 30.76 — Canceled/Forfeited (180,817) 29.51 — Unvested — December 31, 2022 1,581,982 $ 26.49 $ 20,264 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of stock options granted under the Company’s equity incentive plans was estimated using the following assumptions: Year Ended December 31, 2022 2021 2020 Fair market value of common stock $18.63-$31.79 $39.75-$54.07 $3.20-$17.00 Expected term (in years) 5.0-7.0 5.8-6.7 5.7-6.4 Risk-free interest rate 1.8%-3.4% 0.6%-1.0% 0.3%-1.5% Expected volatility 54%-57% 51%-54% 50%-55% Dividend rate —% —% —% Weighted-average grant date fair value of options granted $13.70 $20.30 $4.96 The fair value of purchase right granted the under the Company’s 2020 Employee Stock Purchase Plan was estimated using the following assumptions: Year Ended December 31, 2022 2021 Expected term (in years) 0.5-1.0 0.4-1.4 Risk-free interest rate 1.6%-2.2% 0.1% Expected volatility 83%-79% 60%-76% Dividend rate —% —% |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Year Ended December 31, 2022 2021 2020 Cost of revenue $ 1,135 $ 825 $ 86 Technology and development 3,225 2,232 599 Sales and marketing 7,645 5,176 1,101 General and administrative 8,641 5,874 1,777 Total stock-based compensation expense 20,646 14,107 3,563 Tax benefit from stock-based compensation (3,537) (1,825) (493) Total stock-based compensation expense, net of tax effect $ 17,109 $ 12,282 $ 3,070 |
Net Income Per Share Attribut_2
Net Income Per Share Attributable to Common Stockholders (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings per Share, Basic, by Common Class, Including Two Class Method | The following table sets forth the computation of the Company’s basic and diluted net income per share (in thousands, except share and per share data): Year Ended December 31, 2022 2021 2020 (in thousands, except share and per share data) Numerator: Net income $ 28,705 $ 56,604 $ 26,613 Less: Undistributed earnings allocated to participating securities — — (20,187) Net income attributable to common stockholders – basic $ 28,705 $ 56,604 $ 6,426 Denominator: Weighted average common shares outstanding – basic 52,278,009 50,184,455 12,642,293 Net income per share attributable to common stockholders – basic: $ 0.55 $ 1.13 $ 0.51 Numerator: Net income attributable to common stockholders - diluted $ 28,705 $ 56,604 $ 7,929 Denominator: Weighted average shares outstanding – basic 52,278,009 50,184,455 12,642,293 Options to purchase common stock 4,605,927 6,353,779 4,483,589 Restricted stock 12,647 29,662 — Employee stock purchase plan shares 11,614 60,678 — Weighted average shares outstanding – diluted 56,908,197 56,628,574 17,125,882 Net income per share attributable to common stockholders – diluted $ 0.50 $ 1.00 $ 0.46 |
Schedule of Earnings per Share, Diluted, by Common Class, Including Two Class Method | The following table sets forth the computation of the Company’s basic and diluted net income per share (in thousands, except share and per share data): Year Ended December 31, 2022 2021 2020 (in thousands, except share and per share data) Numerator: Net income $ 28,705 $ 56,604 $ 26,613 Less: Undistributed earnings allocated to participating securities — — (20,187) Net income attributable to common stockholders – basic $ 28,705 $ 56,604 $ 6,426 Denominator: Weighted average common shares outstanding – basic 52,278,009 50,184,455 12,642,293 Net income per share attributable to common stockholders – basic: $ 0.55 $ 1.13 $ 0.51 Numerator: Net income attributable to common stockholders - diluted $ 28,705 $ 56,604 $ 7,929 Denominator: Weighted average shares outstanding – basic 52,278,009 50,184,455 12,642,293 Options to purchase common stock 4,605,927 6,353,779 4,483,589 Restricted stock 12,647 29,662 — Employee stock purchase plan shares 11,614 60,678 — Weighted average shares outstanding – diluted 56,908,197 56,628,574 17,125,882 Net income per share attributable to common stockholders – diluted $ 0.50 $ 1.00 $ 0.46 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings per Share | The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net income per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive: Year Ended December 31, 2022 2021 2020 Options to purchase common stock 1,016,449 671,244 846,481 Unvested restricted stock units 1,164,817 — — ESPP 72,522 — — Total common stock equivalents excluded from net income per share attributable to common stockholders – diluted 2,253,788 671,244 846,481 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The domestic and foreign components of income before provision for income taxes were as follows (in thousands): December 31, 2022 2021 2020 Domestic $ 32,945 $ 61,822 $ 28,169 Foreign 4,522 2,981 3,411 Income before provision for income taxes $ 37,467 $ 64,803 $ 31,580 |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes consisted of the following (in thousands): December 31, 2022 2021 2020 Current provisions for income taxes: Federal $ 11,379 $ 2,437 $ 360 State 2,060 714 240 Foreign 1,349 295 1,434 Total current tax expense 14,788 3,446 2,034 Deferred tax expense: Federal (5,491) 4,513 1,845 State (769) 251 1,170 Foreign 234 (11) (82) Total deferred tax expense (6,026) 4,753 2,933 Total provision for income taxes $ 8,762 $ 8,199 $ 4,967 |
Schedule of Effective Income Tax Rate Reconciliation | The following table presents a reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate for the periods presented: December 31, 2022 2021 2020 Federal statutory income tax rate 21.00 % 21.00 % 21.00 % State after-tax rate 3.45 1.49 4.47 Stock options 2.67 (10.38) (6.79) Research credit (4.51) (1.37) (2.04) Transfer pricing reserve 0.76 (1.26) 1.32 Foreign rate differential (0.02) 0.73 0.61 Foreign derived intangible income (2.13) (0.48) (3.26) Section 162(m) limitation 2.59 2.49 — Other (0.38) 0.42 0.42 Effective tax rate 23.43 % 12.64 % 15.73 % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): December 31, 2022 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 263 $ 56 $ 124 Accruals and allowances 1,067 1,104 614 Tax credits 1,954 1,396 1,631 Stock-based compensation 4,907 3,171 2,045 Unrealized gain on equity investment 124 — — Intangibles assets 907 1,010 1,106 Lease obligation 5,074 5,226 — Other 1,222 808 1,101 Total deferred tax assets 15,518 12,771 6,621 Valuation allowance (1,954) (1,396) (1,372) Total deferred tax assets, net of valuation allowance 13,564 11,375 5,249 Deferred tax liabilities: Property, equipment, and software (3,905) (8,316) (4,995) Goodwill (843) (749) (653) Prepaid expense (1,188) (1,365) (400) Right-of-use asset (5,158) (5,201) — Acquired intangibles (1,996) — — Unrealized loss on equity investment — (1,296) — Total deferred tax liabilities (13,090) (16,927) (6,048) Net deferred income tax asset (liabilities) $ 474 $ (5,552) $ (799) |
Summary of Income Tax Contingencies | The activity related to the unrecognized income tax benefits is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Gross unrecognized income tax benefits — beginning balance $ 2,364 $ 3,208 $ 2,369 Increases related to tax positions taken during the current year 1,788 649 951 Decreases related to tax positions taken during current year — — — Increases related to tax positions taken during the prior years 386 — — Decreases related to tax positions taken during the prior years (235) (1,493) (112) Gross unrecognized income tax benefits — ending balance $ 4,303 $ 2,364 $ 3,208 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following table presents total revenue by geographic area based on the publisher’s billing address (in thousands): Year Ended December 31, 2022 2021 2020 United States $ 156,067 $ 139,049 $ 96,886 EMEA 71,869 62,531 34,156 APAC 24,844 20,910 15,087 Rest of the world 3,600 4,418 2,619 Total $ 256,380 $ 226,908 $ 148,748 The following table presents property, equipment and software, net, by geographic area (in thousands): December 31, 2022 2021 United States $ 59,449 $ 42,059 Rest of the world 11,707 8,081 Total $ 71,156 $ 50,140 The following table presents operating lease right-of-use assets, by geographic area (in thousands): December 31, 2022 2021 United States $ 20,572 $ 20,956 Rest of the world $ 5,634 $ 657 Total $ 26,206 $ 21,613 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit losses, beginning balance | $ 1,765 | $ 1,989 | $ 2,051 |
Provision | 0 | 0 | 319 |
Write-offs | 0 | (224) | (381) |
Allowance for credit losses, ending balance | $ 1,765 | $ 1,765 | $ 1,989 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Property, plant and equipment, estimated useful life | 3 years |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Internal Use Software Development Costs (Details) - Internal-use software | 12 Months Ended |
Dec. 31, 2022 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Weighted Average Remaining Useful Life (in years) | 2 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Weighted Average Remaining Useful Life (in years) | 5 years |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Impairment of Equity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Equity securities without readily determinable fair value, downward price adjustment, annual amount | $ 5,948 | $ 0 |
Basis of Presentation and Sum_8
Basis of Presentation and Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Advertising expense | $ 0.3 | $ 0.5 | $ 0.5 |
Basis of Presentation and Sum_9
Basis of Presentation and Summary of Significant Accounting Policies - Foreign Currency Translation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Foreign Currency Transaction (gain) loss, unrealized | $ (0.7) | $ (0.1) | $ 0.6 |
Basis of Presentation and Su_10
Basis of Presentation and Summary of Significant Accounting Policies - Segment Information (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Basis of Presentation and Su_11
Basis of Presentation and Summary of Significant Accounting Policies - Concentration Risk Percentage (Details) - Customer Concentration Risk - Accounts Receivable | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
One Publisher | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 13% | 17% | 20% |
Buyer One | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 33% | 29% | |
Buyer Two | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 15% | 19% | |
Buyer Three | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11% |
Basis of Presentation and Su_12
Basis of Presentation and Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Operating lease right-of-use assets | $ 26,206 | $ 21,613 |
Total operating lease liabilities | $ 26,591 | $ 21,706 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | $ 82,013 | $ 77,121 |
Equity investment | 5,948 | |
Non-current assets | 5,948 | |
Total Financial Assets | 135,066 | 154,322 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 0 | 0 |
Equity investment | 5,948 | |
Non-current assets | 5,948 | |
Total Financial Assets | 48,884 | 71,259 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 82,013 | 77,121 |
Equity investment | 0 | |
Non-current assets | 0 | |
Total Financial Assets | 86,182 | 83,063 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 0 | 0 |
Equity investment | 0 | |
Non-current assets | 0 | |
Total Financial Assets | 0 | 0 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 63,483 | 50,954 |
Commercial paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 0 | 0 |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 63,483 | 50,954 |
Commercial paper | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 0 | 0 |
Agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 5,778 | |
Agency debt securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 0 | |
Agency debt securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 5,778 | |
Agency debt securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 0 | |
U.S. Treasury and government debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 12,752 | 26,167 |
U.S. Treasury and government debt securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 0 | 0 |
U.S. Treasury and government debt securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 12,752 | 26,167 |
U.S. Treasury and government debt securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
U.S. Treasury and government debt securities | 0 | 0 |
Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 48,884 | 65,311 |
Money Market Funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 48,884 | 65,311 |
Money Market Funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Money Market Funds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Certificates of Deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 4,169 | 5,942 |
Certificates of Deposit | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Certificates of Deposit | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 4,169 | 5,942 |
Certificates of Deposit | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Cash Equivalents | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 53,053 | 71,253 |
Cash Equivalents | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 48,884 | 65,311 |
Cash Equivalents | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 4,169 | 5,942 |
Cash Equivalents | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 0 | $ 0 |
Balance Sheet Components - Summ
Balance Sheet Components - Summary of Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 82,022 | $ 77,157 |
Unrealized Gains | 19 | 0 |
Unrealized Loss | (28) | (36) |
Fair Value | 82,013 | 77,121 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 63,483 | 50,954 |
Unrealized Gains | 0 | 0 |
Unrealized Loss | 0 | 0 |
Fair Value | 63,483 | 50,954 |
Agency debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,762 | |
Unrealized Gains | 17 | |
Unrealized Loss | 0 | |
Fair Value | 5,779 | |
U.S. Treasury and government debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 12,777 | 26,203 |
Unrealized Gains | 2 | 0 |
Unrealized Loss | (28) | (36) |
Fair Value | $ 12,751 | $ 26,167 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Property, Equipment and Software, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | $ 176,119 | $ 127,016 |
Less: accumulated depreciation and amortization | (104,963) | (76,876) |
Total property, equipment and software, net | 71,156 | 50,140 |
Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | 40,794 | 30,581 |
Network hardware, computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | 129,212 | 92,561 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | 4,026 | 2,426 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | $ 2,087 | $ 1,448 |
Balance Sheet Components - Narr
Balance Sheet Components - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | $ 23,600,000 | $ 9,800,000 | $ 15,700,000 |
Capitalized computer software additions | 14,500,000 | 10,300,000 | 7,300,000 |
Capitalized computer software, fully-amortized costs removed | (4,300,000) | ||
Capitalized computer software, impairments | $ 0 | 0 | 0 |
Weighted Average Remaining Useful Life (in years) | 4 years 5 months 8 days | ||
Amortization of intangible assets | $ 600,000 | ||
Developed technology | |||
Property, Plant and Equipment [Line Items] | |||
Weighted Average Remaining Useful Life (in years) | 4 years 9 months | ||
Customer relationships | |||
Property, Plant and Equipment [Line Items] | |||
Weighted Average Remaining Useful Life (in years) | 1 year 9 months | ||
Internal-use software | |||
Property, Plant and Equipment [Line Items] | |||
Amortization | $ 10,000,000 | $ 7,400,000 | $ 5,900,000 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Accounts Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Payable to publishers | $ 266,506 | $ 235,440 |
Trade payables | 10,908 | 8,881 |
Total accounts payable | $ 277,414 | $ 244,321 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued compensation | $ 14,587 | $ 17,271 |
Accrued and other current liabilities | 4,349 | 1,509 |
Total accrued liabilities | $ 18,936 | $ 18,780 |
Loan and Security Agreement a_2
Loan and Security Agreement and Senior Secured Credit Facilities Agreement (Details) - Revolving Credit Facility - USD ($) $ in Millions | 1 Months Ended | |
Oct. 17, 2022 | Jun. 30, 2021 | |
Credit Agreement | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 110 | |
Line of credit facility, accordion feature, increase limit | $ 90 | |
Credit Agreement | Line of Credit | Minimum | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, commitment fee percentage | 0.25% | |
Credit Agreement | Line of Credit | Maximum | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, commitment fee percentage | 0.35% | |
Credit Agreement | Line of Credit | Fed Funds Effective Rate Overnight Index Swap Rate | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate | 0.50% | |
Credit Agreement | Line of Credit | Secured Overnight Financing Rate (SOFR) | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate | 1% | |
Credit Agreement | Line of Credit | Secured Overnight Financing Rate (SOFR) | Minimum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate | 2% | |
Credit Agreement | Line of Credit | Secured Overnight Financing Rate (SOFR) | Maximum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate | 2.75% | |
Credit Agreement | Line of Credit | Alternate Base Rate | Minimum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate | 1% | |
Credit Agreement | Line of Credit | Alternate Base Rate | Maximum | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate | 1.75% | |
Credit Agreement | Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 25 | |
Credit Agreement | Swingline Sub-Facility | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 25 | |
Silicon Valley Bank | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 25 | |
Line of credit facility, borrowing capacity, percentage of eligible accounts receivable, net, | 80% | |
Debt instrument, interest rate | 3.25% | |
Line of credit facility, unused capacity, commitment fee percentage | 0.40% | |
Line of credit facility, borrowing capacity, unused capacity fee, closing balance threshold | $ 5 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Dec. 31, 2022 |
Office Equipment | |
Lessee, Lease, Description [Line Items] | |
Lease term | 7 years |
Lease term, extension period | 5 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease term | 2 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 6,876 | $ 2,104 |
Finance lease cost - amortization of right-of-use assets | 174 | 14 |
Finance lease cost - interest on lease liabilities | 18 | 2 |
Total lease cost | $ 7,068 | $ 2,120 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in measurement of lease liabilities: | ||
Operating cash outflows - payments on operating leases | $ 5,015 | $ 2,283 |
Right-of-use assets obtained in exchange for new lease obligations: | ||
Operating leases | 10,424 | 20,887 |
Finance leases | $ 0 | $ 869 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating leases | ||
Operating lease right-of-use assets | $ 26,206 | $ 21,613 |
Operating lease liabilities, current | 5,676 | 3,864 |
Operating lease liabilities, non-current | 20,915 | 17,842 |
Total operating lease liabilities | 26,591 | 21,706 |
Finance leases | ||
Furniture and fixtures | 869 | 869 |
Accumulated depreciation | (188) | (14) |
Furniture and fixtures, net | $ 681 | $ 855 |
Finance lease, right-of-use asset, statement of financial position | Property, equipment and software, net | Property, equipment and software, net |
Accrued liabilities | $ 125 | $ 119 |
Other liabilities, non-current | 616 | 741 |
Total finance lease liabilities | $ 741 | $ 860 |
Finance lease, liability, statement of financial position | Liabilities | Liabilities |
Weighted-average remaining lease term: | ||
Operating leases | 4 years 7 months 6 days | 6 years |
Weighted-average discount rate: | ||
Operating leases | 3.22% | 2.20% |
Finance leases | 2.24% | 2.24% |
Finance leases | 5 years 3 months 18 days | 6 years 3 months 18 days |
Leases - Lease Maturity (Detail
Leases - Lease Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 6,440 | |
2024 | 6,499 | |
2025 | 5,129 | |
2026 | 5,347 | |
2027 | 4,256 | |
Thereafter | 980 | |
Total minimum lease payments | 28,651 | |
Less: imputed interest | (2,060) | |
Total operating lease liabilities | 26,591 | $ 21,706 |
Finance Leases | ||
2023 | 140 | |
2024 | 145 | |
2025 | 149 | |
2026 | 153 | |
2027 | 158 | |
Thereafter | 41 | |
Total minimum lease payments | 786 | |
Less: imputed interest | (45) | |
Total finance lease liabilities | 741 | $ 860 |
Total | ||
2023 | 6,580 | |
2024 | 6,644 | |
2025 | 5,278 | |
2026 | 5,500 | |
2027 | 4,414 | |
Thereafter | 1,021 | |
Total minimum lease payments | 29,437 | |
Less: imputed interest | (2,105) | |
Total present value of lease liabilities | $ 27,332 |
Business Combination (Details)
Business Combination (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 16, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||
Weighted Average Remaining Useful Life (in years) | 4 years 5 months 8 days | |
Goodwill, acquired during period | $ 23,327 | |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Weighted Average Remaining Useful Life (in years) | 1 year 9 months | |
Martin | ||
Business Acquisition [Line Items] | ||
Business combination, consideration transferred | $ 30,800 | |
Business combination, separately recognized transactions, expenses and losses recognized | $ 14,200 | |
Business combination, acquisition costs, payment term | 3 years | |
Goodwill, acquired during period | $ 23,300 | |
Business combination, recognized identifiable assets acquired and liabilities assumed, deferred tax liabilities | 1,100 | |
Business combination, recognized identifiable assets acquired and liabilities assumed, liabilities | 300 | |
Martin | General and administrative | ||
Business Acquisition [Line Items] | ||
Business combination, acquisition related costs | $ 900 | |
Martin | Developed Technology Rights | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 7,900 | |
Weighted Average Remaining Useful Life (in years) | 5 years | |
Martin | Customer relationships | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 1,000 | |
Weighted Average Remaining Useful Life (in years) | 2 years |
Goodwill and Acquisition-rela_3
Goodwill and Acquisition-related Intangible Assets, Net - Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 6,250 |
Goodwill, acquired during period | 23,327 |
Ending balance | $ 29,577 |
Goodwill and Acquisition-rela_4
Goodwill and Acquisition-related Intangible Assets, Net - Acquisition-Related Intangible Assets, Net (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 8,900 |
Accumulated Amortization | 601 |
Net Carrying Amount | $ 8,299 |
Weighted Average Remaining Useful Life (in years) | 4 years 5 months 8 days |
Developed technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 7,900 |
Accumulated Amortization | 456 |
Net Carrying Amount | $ 7,444 |
Weighted Average Remaining Useful Life (in years) | 4 years 9 months |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Gross Carrying Amount | $ 1,000 |
Accumulated Amortization | 145 |
Net Carrying Amount | $ 855 |
Weighted Average Remaining Useful Life (in years) | 1 year 9 months |
Goodwill and Acquisition-rela_5
Goodwill and Acquisition-related Intangible Assets, Net - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization of intangible assets | $ 0.6 |
Goodwill and Acquisition-rela_6
Goodwill and Acquisition-related Intangible Assets, Net - Estimated Future Amortization (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 2,080 |
2024 | 1,936 |
2025 | 1,580 |
2026 | 1,580 |
2027 | 1,123 |
Net Carrying Amount | $ 8,299 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Commitments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Contractual Obligation, Fiscal Year Maturity [Abstract] | |
2023 | $ 19,698 |
2024 | 15,798 |
2025 | 5,584 |
Total future minimum commitments, net | $ 41,080 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) $ in Millions | Dec. 31, 2022 USD ($) instrument | Dec. 31, 2021 USD ($) |
Long-term Purchase Commitment [Line Items] | ||
Number of debt instruments | instrument | 2 | |
Irrevocable Letters of Credit due April 2025 | ||
Long-term Purchase Commitment [Line Items] | ||
Letters of credit outstanding, amount | $ 0.5 | |
Irrevocable Letters of Credit due July 2022 | ||
Long-term Purchase Commitment [Line Items] | ||
Letters of credit outstanding, amount | $ 3.5 | |
Irrevocable Letters of Credit due June 2022 | ||
Long-term Purchase Commitment [Line Items] | ||
Letters of credit outstanding, amount | $ 0.7 | |
Irrevocable Letters of Credit due July 2028 | ||
Long-term Purchase Commitment [Line Items] | ||
Letters of credit outstanding, amount | $ 3.5 |
Stockholders_ Equity and Equi_3
Stockholders’ Equity and Equity Incentive Plans - Narrative (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) calendarYear $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) | Dec. 11, 2020 $ / shares shares | Nov. 30, 2020 shares | |
Class of Stock [Line Items] | |||||
Common shares reserved for issuance | 7,280,745 | ||||
Share-based compensation arrangement, automatic annual increase term | calendarYear | 10 | ||||
Discount from market price, purchase date | 5% | ||||
Share-based compensation arrangement by share-based payment award, options, exercises in period, intrinsic value | $ | $ 6.4 | $ 80.7 | $ 15.7 | ||
Dividend rate | 0% | 0% | 0% | ||
Amount withheld for employee stock purchase plan | $ | $ 0.1 | ||||
Share-based Payment Arrangement, Option | |||||
Class of Stock [Line Items] | |||||
Award vesting period | 4 years | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period | 10 years | ||||
Share-based payment arrangement, nonvested award, option, cost not yet recognized, amount | $ | $ 14.1 | ||||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 2 years 1 month 24 days | ||||
Dividend rate | 0% | ||||
Unvested restricted stock units | |||||
Class of Stock [Line Items] | |||||
Award vesting period | 4 years | ||||
Share-based payment arrangement, nonvested award, excluding option, cost not yet recognized, amount | $ | $ 37.8 | ||||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 2 years 11 months 15 days | ||||
ESPP | |||||
Class of Stock [Line Items] | |||||
Common shares reserved for issuance | 529,888 | ||||
Discount from market price, purchase date | 85% | ||||
Share-based payment arrangement, nonvested award, excluding option, cost not yet recognized, amount | $ | $ 0.4 | ||||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 4 months 28 days | ||||
Share-Based compensation arrangement by share-Based payment award, offering period | 27 months | ||||
Share-based compensation arrangement by share-based payment award, purchase period | 6 months | ||||
Common Class A | |||||
Class of Stock [Line Items] | |||||
Common stock shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ||
Common stock par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Class of warrant or right, number of securities called by each warrant or right (in shares) | 1 | ||||
Issuance of common stock related to employee stock purchase plan (in shares) | 183,587 | ||||
Common Class A | ESPP | |||||
Class of Stock [Line Items] | |||||
Common shares reserved for issuance | 500,000 | ||||
Number of shares authorized | 7,500,000 | ||||
Common Class B | |||||
Class of Stock [Line Items] | |||||
Common stock shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ||
Common stock par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Class of warrant or right, number of securities called by each warrant or right (in shares) | 10 |
Stockholders_ Equity and Equi_4
Stockholders’ Equity and Equity Incentive Plans - Summary of Stock Option Activity and Related Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Shares Underlying Outstanding Options | ||
Beginning balance (in shares) | 6,542,351 | |
Options granted (in shares) | 450,153 | |
Options exercised (in shares) | (358,418) | |
Options canceled (in shares) | (148,070) | |
Options expired (in shares) | (9,777) | |
Ending balance (in shares) | 6,476,239 | 6,542,351 |
Vested (in shares) | 5,089,579 | |
Weighted-Average Exercise Price | ||
Beginning balance (in usd per share) | $ 6.08 | |
Options granted (in usd per share) | 26.05 | |
Options exercised (in usd per share) | 3.33 | |
Options canceled (in usd per share) | 15.07 | |
Options expired (in usd per share) | 34.40 | |
Ending balance (in usd per share) | 7.38 | $ 6.08 |
Vested (in usd per share) | $ 4.93 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted average remaining contractual term (years) | 6 years 1 month 6 days | 6 years 11 months 12 days |
Weighted average remaining contractual term vested (in years) | 5 years 6 months 29 days | |
Aggregate intrinsic value, awards outstanding | $ 55,516 | $ 184,727 |
Aggregate intrinsic value, vested | $ 48,635 |
Stockholders_ Equity and Equi_5
Stockholders’ Equity and Equity Incentive Plans - Weighted-Average Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Dividend rate | 0% | 0% | 0% |
Weighted-average grant date fair value of options granted (in usd per share) | $ 13.70 | $ 20.30 | $ 4.96 |
ESPP | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Risk-free interest rate | 0.10% | ||
Dividend rate | 0% | 0% | |
Minimum | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Fair market value of common stock (in usd per share) | $ 18.63 | $ 39.75 | $ 3.20 |
Expected term (in years) | 5 years | 5 years 9 months 18 days | 5 years 8 months 12 days |
Risk-free interest rate | 1.80% | 0.60% | 0.30% |
Expected volatility | 54% | 51% | 50% |
Minimum | ESPP | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Expected term (in years) | 6 months | 4 months 24 days | |
Risk-free interest rate | 1.60% | ||
Expected volatility | 83% | 60% | |
Maximum | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Fair market value of common stock (in usd per share) | $ 31.79 | $ 54.07 | $ 17 |
Expected term (in years) | 7 years | 6 years 8 months 12 days | 6 years 4 months 24 days |
Risk-free interest rate | 3.40% | 1% | 1.50% |
Expected volatility | 57% | 54% | 55% |
Maximum | ESPP | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Expected term (in years) | 1 year | 1 year 4 months 24 days | |
Risk-free interest rate | 2.20% | ||
Expected volatility | 79% | 76% |
Stockholders_ Equity and Equi_6
Stockholders’ Equity and Equity Incentive Plans - Summary of Restricted Stock Units and Related Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Aggregate Intrinsic Value (in thousands) | ||
Aggregate intrinsic value, unvested | $ 20,264 | $ 17,025 |
Unvested restricted stock units | ||
Number of Shares Underlying Outstanding Options | ||
Unvested beginning balance (in shares) | 483,302 | |
Granted (in shares) | 1,587,930 | |
Vested (in shares) | (308,433) | |
Canceled/Forfeited (in shares) | (180,817) | |
Unvested ending balance (in shares) | 1,581,982 | |
Weighted-Average Exercise Price | ||
Unvested beginning balance (in usd per share) | $ 35.23 | |
Granted (in usd per share) | 25.01 | |
Vested (in usd per share) | 30.76 | |
Canceled/Forfeited (in usd per share) | 29.51 | |
Unvested ending balance (in usd per share) | $ 26.49 |
Stockholders_ Equity and Equi_7
Stockholders’ Equity and Equity Incentive Plans - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | $ 20,646 | $ 14,107 | $ 3,563 |
Tax benefit from stock-based compensation | (3,537) | (1,825) | (493) |
Total stock-based compensation expense, net of tax effect | 17,109 | 12,282 | 3,070 |
Cost of revenue | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | 1,135 | 825 | 86 |
Technology and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | 3,225 | 2,232 | 599 |
Sales and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | 7,645 | 5,176 | 1,101 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | $ 8,641 | $ 5,874 | $ 1,777 |
Net Income Per Share Attribut_3
Net Income Per Share Attributable to Common Stockholders - Basic and Diluted Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net income | $ 28,705 | $ 56,604 | $ 26,613 |
Less: Undistributed earnings allocated to participating securities | 0 | 0 | (20,187) |
Net income attributable to common stockholders – basic | $ 28,705 | $ 56,604 | $ 6,426 |
Denominator: | |||
Weighted average common shares outstanding – basic | 52,278,009 | 50,184,455 | 12,642,293 |
Net income per share attributable to common stockholders – basic: (in usd per share) | $ 0.55 | $ 1.13 | $ 0.51 |
Numerator: | |||
Net income attributable to common stockholders - diluted | $ 28,705 | $ 56,604 | $ 7,929 |
Denominator: | |||
Weighted average common shares outstanding – basic | 52,278,009 | 50,184,455 | 12,642,293 |
Options to purchase common stock (in shares) | 4,605,927 | 6,353,779 | 4,483,589 |
Restricted stock (in shares) | 12,647 | 29,662 | 0 |
Employee stock purchase plan shares | 11,614 | 60,678 | 0 |
Weighted average shares outstanding – diluted | 56,908,197 | 56,628,574 | 17,125,882 |
Net income per share attributable to common stockholders – diluted (in usd per share) | $ 0.50 | $ 1 | $ 0.46 |
Net Income Per Share Attribut_4
Net Income Per Share Attributable to Common Stockholders - Schedule of Antidilutive Securities Excluded from Computation of Earnings per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Total common stock equivalents excluded from net income per share attributable to common stockholders – diluted | 2,253,788 | 671,244 | 846,481 |
Options to purchase common stock | |||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Total common stock equivalents excluded from net income per share attributable to common stockholders – diluted | 1,016,449 | 671,244 | 846,481 |
Unvested restricted stock units | |||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Total common stock equivalents excluded from net income per share attributable to common stockholders – diluted | 1,164,817 | 0 | 0 |
ESPP | |||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Total common stock equivalents excluded from net income per share attributable to common stockholders – diluted | 72,522 | 0 | 0 |
Income Taxes - Income Before Pr
Income Taxes - Income Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 32,945 | $ 61,822 | $ 28,169 |
Foreign | 4,522 | 2,981 | 3,411 |
Income before provision for income taxes | $ 37,467 | $ 64,803 | $ 31,580 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current provisions for income taxes: | |||
Federal | $ 11,379 | $ 2,437 | $ 360 |
State | 2,060 | 714 | 240 |
Foreign | 1,349 | 295 | 1,434 |
Total current tax expense | 14,788 | 3,446 | 2,034 |
Deferred tax expense: | |||
Federal | (5,491) | 4,513 | 1,845 |
State | (769) | 251 | 1,170 |
Foreign | 234 | (11) | (82) |
Total deferred tax expense | (6,026) | 4,753 | 2,933 |
Provision for income taxes | $ 8,762 | $ 8,199 | $ 4,967 |
Income Taxes - Effective Income
Income Taxes - Effective Income After-Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21% | 21% | 21% |
State after-tax rate | 3.45% | 1.49% | 4.47% |
Stock options | 2.67% | (10.38%) | (6.79%) |
Research credit | (4.51%) | (1.37%) | (2.04%) |
Transfer pricing reserve | 0.76% | (1.26%) | 1.32% |
Foreign rate differential | (0.02%) | 0.73% | 0.61% |
Foreign derived intangible income | (2.13%) | (0.48%) | (3.26%) |
Section 162(m) limitation | 2.59% | 2.49% | 0% |
Other | (0.38%) | 0.42% | 0.42% |
Effective income tax rate reconciliation, percent | 23.43% | 12.64% | 15.73% |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | |||
Net operating loss carryforwards | $ 263 | $ 56 | $ 124 |
Accruals and allowances | 1,067 | 1,104 | 614 |
Tax credits | 1,954 | 1,396 | 1,631 |
Stock-based compensation | 4,907 | 3,171 | 2,045 |
Unrealized gain on equity investment | 124 | 0 | 0 |
Intangibles assets | 907 | 1,010 | 1,106 |
Lease obligation | 5,074 | 5,226 | 0 |
Other | 1,222 | 808 | 1,101 |
Total deferred tax assets, net of valuation allowance | 15,518 | 12,771 | 6,621 |
Valuation allowance | (1,954) | (1,396) | (1,372) |
Total deferred tax assets, net of valuation allowance | 13,564 | 11,375 | 5,249 |
Deferred tax liabilities: | |||
Property, equipment, and software | (3,905) | (8,316) | (4,995) |
Goodwill | (843) | (749) | (653) |
Prepaid expense | (1,188) | (1,365) | (400) |
Right-of-use asset | (5,158) | (5,201) | 0 |
Acquired intangibles | (1,996) | 0 | 0 |
Unrealized loss on equity investment | 0 | (1,296) | 0 |
Total deferred tax liabilities | (13,090) | (16,927) | (6,048) |
Net deferred income tax asset (liabilities) | $ (5,552) | $ (799) | |
Net deferred income tax asset (liabilities) | $ 474 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Tax Credit Carryforward [Line Items] | ||
Unrecognized tax benefits, interest on income taxes accrued | $ 0.2 | $ 0.1 |
Unrecognized tax benefits that would impact effective tax rate | 4.3 | |
Research Tax Credit Carryforward | ||
Tax Credit Carryforward [Line Items] | ||
Tax credit carryforward, amount | 4.1 | |
Domestic Tax Authority | ||
Tax Credit Carryforward [Line Items] | ||
Operating loss carryforwards | 1.1 | |
State and Local Jurisdiction | ||
Tax Credit Carryforward [Line Items] | ||
Operating loss carryforwards | $ 1.3 |
Income Taxes - Unrecognized Inc
Income Taxes - Unrecognized Income Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized income tax benefits — beginning balance | $ 2,364 | $ 3,208 | $ 2,369 |
Increases related to tax positions taken during the current year | 1,788 | 649 | 951 |
Decreases related to tax positions taken during current year | 0 | 0 | 0 |
Increases related to tax positions taken during the prior years | 386 | 0 | 0 |
Decreases related to tax positions taken during the prior years | (235) | (1,493) | (112) |
Gross unrecognized income tax benefits — ending balance | $ 4,303 | $ 2,364 | $ 3,208 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | $ 256,380 | $ 226,908 | $ 148,748 |
Long-lived assets | 71,156 | 50,140 | |
Operating lease right-of-use assets | 26,206 | 21,613 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 156,067 | 139,049 | 96,886 |
Long-lived assets | 59,449 | 42,059 | |
Operating lease right-of-use assets | 20,572 | 20,956 | |
EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 71,869 | 62,531 | 34,156 |
APAC | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 24,844 | 20,910 | 15,087 |
Rest of the world | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 3,600 | 4,418 | $ 2,619 |
Long-lived assets | 11,707 | 8,081 | |
Operating lease right-of-use assets | $ 5,634 | $ 657 |
401(k) Plan - Narrative (Detail
401(k) Plan - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan, maximum annual contributions per employee, percent | 100% | |
Defined contribution plan, employer discretionary contribution amount | $ 1,200,000 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Feb. 27, 2023 USD ($) |
Subsequent Event | 2023 Repurchase Program | |
Subsequent Event [Line Items] | |
Stock repurchase program, authorized amount | $ 75 |