Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017 | |
Document And Entity Information [Abstract] | |
Document Type | S1 |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2017 |
Trading Symbol | APPN |
Entity Registrant Name | APPIAN CORP |
Entity Central Index Key | 1,441,683 |
Entity Filer Category | Non-accelerated Filer |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | |||
Cash and cash equivalents | $ 72,289 | $ 31,143 | $ 31,393 |
Accounts receivable, net of allowance of $400 | 41,399 | 46,814 | 34,228 |
Deferred commissions, current | 7,719 | 7,146 | 5,316 |
Prepaid expenses and other current assets | 6,318 | 3,281 | 2,030 |
Total current assets | 127,725 | 88,384 | 72,967 |
Property and equipment, net | 2,737 | 3,101 | 2,892 |
Deferred commissions, net of current portion | 11,343 | 10,860 | 7,354 |
Deferred tax assets | 107 | 12 | 22 |
Other assets | 414 | 381 | 165 |
Total assets | 142,326 | 102,738 | 83,400 |
Current liabilities | |||
Accounts payable | 2,712 | 5,057 | 2,633 |
Accrued expenses | 5,977 | 2,860 | 4,350 |
Accrued compensation and related benefits | 9,742 | 9,554 | 5,737 |
Deferred revenue, current | 57,181 | 52,000 | 40,220 |
Current portion of long-term debt | 0 | 6,111 | 0 |
Other current liabilities | 574 | 437 | 564 |
Total current liabilities | 76,186 | 76,019 | 53,504 |
Long-term debt, net of current portion | 0 | 13,889 | 10,000 |
Deferred tax liabilities | 35 | 32 | 916 |
Deferred revenue, net of current portion | 14,577 | 18,108 | 12,890 |
Preferred stock warrant liability | 0 | 850 | 650 |
Other long-term liabilities | 1,624 | 1,917 | 1,415 |
Total liabilities | 92,422 | 110,815 | 79,375 |
Stockholders' equity (deficit) | |||
Common stock | 0 | 3 | 3 |
Additional paid-in capital | 138,767 | 0 | 0 |
Accumulated other comprehensive income | 451 | 1,330 | 971 |
Accumulated deficit | (89,320) | (64,825) | (51,507) |
Total stockholders' equity (deficit) | 49,904 | (63,492) | (50,533) |
Total liabilities, convertible preferred stock and stockholders' equity (deficit) | 142,326 | 102,738 | 83,400 |
Series A Convertible Preferred Stock | |||
Convertible preferred stock | |||
Preferred stock | 0 | 17,915 | 17,058 |
Series B Convertible Preferred Stock | |||
Convertible preferred stock | |||
Preferred stock | 0 | 37,500 | $ 37,500 |
Class A Common Stock | |||
Stockholders' equity (deficit) | |||
Common stock | 1 | 0 | |
Class B Common Stock | |||
Stockholders' equity (deficit) | |||
Common stock | $ 5 | $ 0 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Allowance for doubtful accounts | $ 400 | $ 400 | $ 400 |
Preferred stock, shares authorized | 18,247,518 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 0 | 61,462,320 | 61,462,320 |
Common stock, shares issued | 0 | 34,274,718 | 34,274,718 |
Common stock, shares outstanding | 0 | 34,274,718 | 34,274,718 |
Series A Convertible Preferred Stock | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 0 | 12,127,468 | 12,127,468 |
Preferred stock, shares issued | 0 | 12,043,108 | 12,043,108 |
Preferred stock, shares outstanding | 0 | 12,043,108 | 12,043,108 |
Liquidation preference | $ 17,915 | ||
Series B Convertible Preferred Stock | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 0 | 6,120,050 | 6,120,050 |
Preferred stock, shares issued | 0 | 6,120,050 | 6,120,050 |
Preferred stock, shares outstanding | 0 | 6,120,050 | 6,120,050 |
Liquidation preference | $ 37,500 | ||
Class A Common Stock | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized | 500,000,000 | 0 | |
Common stock, shares issued | 7,203,271 | 0 | |
Common stock, shares outstanding | 7,203,271 | 0 | |
Class B Common Stock | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized | 100,000,000 | 0 | |
Common stock, shares issued | 53,073,459 | 0 | |
Common stock, shares outstanding | 53,073,459 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | |||||||
Subscriptions, software and support | $ 22,660 | $ 17,668 | $ 66,116 | $ 50,607 | $ 69,972 | $ 53,207 | $ 37,076 |
Professional services | 21,988 | 13,077 | 60,059 | 48,569 | 62,951 | 57,997 | 51,920 |
Total revenue | 44,648 | 30,745 | 126,175 | 99,176 | 132,923 | 111,204 | 88,996 |
Cost of revenue: | |||||||
Subscriptions, software and support | 2,341 | 1,890 | 6,891 | 5,508 | 7,437 | 6,079 | 4,273 |
Professional services | 14,272 | 9,315 | 39,049 | 34,016 | 42,686 | 42,402 | 32,524 |
Total cost of revenue | 16,613 | 11,205 | 45,940 | 39,524 | 50,123 | 48,481 | 36,797 |
Gross profit | 28,035 | 19,540 | 80,235 | 59,652 | 82,800 | 62,723 | 52,199 |
Operating expenses: | |||||||
Sales and marketing | 19,725 | 14,480 | 59,503 | 39,477 | 54,137 | 38,300 | 29,088 |
Research and development | 8,596 | 6,702 | 25,867 | 16,925 | 22,994 | 16,750 | 13,488 |
General and administrative | 6,237 | 4,531 | 19,721 | 12,779 | 17,039 | 12,515 | 23,373 |
Total operating expenses | 34,558 | 25,713 | 105,091 | 69,181 | 94,170 | 67,565 | 65,949 |
Operating loss | (6,523) | (6,173) | (24,856) | (9,529) | (11,370) | (4,842) | (13,750) |
Other (income) expense: | |||||||
Other (income) expense, net | (425) | (67) | (1,658) | 129 | 1,792 | 1,579 | 2,086 |
Interest (income) expense | (2) | 243 | 451 | 726 | 982 | 188 | 19 |
Total other (income) expense | (427) | 176 | (1,207) | 855 | 2,774 | 1,767 | 2,105 |
Net loss before income taxes | (6,096) | (6,349) | (23,649) | (10,384) | (14,144) | (6,609) | (15,855) |
Income tax expense (benefit) | 188 | (1,610) | 489 | (2,106) | (1,683) | 378 | 1,204 |
Net loss | (6,284) | (4,739) | (24,138) | (8,278) | (12,461) | (6,987) | (17,059) |
Accretion of dividends on convertible preferred stock | 0 | 214 | 357 | 642 | 857 | 861 | 856 |
Net loss attributable to common stockholders | $ (6,284) | $ (4,953) | $ (24,495) | $ (8,920) | $ (13,318) | $ (7,848) | $ (17,915) |
Net loss per share attributable to common stockholders: | |||||||
Basic and diluted (in dollar per share) | $ (0.10) | $ (0.14) | $ (0.53) | $ (0.26) | $ (0.39) | $ (0.23) | $ (0.50) |
Weighted average common shares outstanding: | |||||||
Basic and diluted (in shares) | 60,204,596 | 34,274,718 | 45,855,044 | 34,274,718 | 34,274,718 | 34,274,718 | 35,717,803 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||||||
Net loss | $ (6,284) | $ (4,739) | $ (24,138) | $ (8,278) | $ (12,461) | $ (6,987) | $ (17,059) |
Comprehensive loss, net of income taxes: | |||||||
Foreign currency translation adjustment | 517 | (177) | (879) | (537) | 359 | 159 | 812 |
Total other comprehensive loss, net of income taxes | $ (5,767) | $ (4,916) | $ (25,017) | $ (8,815) | $ (12,102) | $ (6,828) | $ (16,247) |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Restricted Stock Units | Restricted Stock UnitsCommon Stock |
Beginning Balance (in shares) at Dec. 31, 2013 | 40,000,000 | ||||||
Beginning Balance at Dec. 31, 2013 | $ (4,608) | $ 4 | $ (4,612) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (17,059) | (17,059) | |||||
Repurchase and retirement of common stock (in shares) | (5,725,282) | ||||||
Repurchase and retirement of common stock | (21,013) | $ (1) | (21,012) | ||||
Accretion of dividends on convertible preferred stock | (856) | (856) | |||||
Accretion of issuance costs on convertible preferred stock | (120) | (120) | |||||
Other comprehensive income (loss) | 812 | $ 812 | |||||
Ending Balance, (in shares) at Dec. 31, 2014 | 34,274,718 | ||||||
Ending Balance at Dec. 31, 2014 | (42,844) | $ 3 | 812 | (43,659) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (6,987) | (6,987) | |||||
Accretion of dividends on convertible preferred stock | (861) | (861) | |||||
Accretion of issuance costs on convertible preferred stock | 0 | ||||||
Other comprehensive income (loss) | 159 | 159 | |||||
Ending Balance, (in shares) at Dec. 31, 2015 | 34,274,718 | ||||||
Ending Balance at Dec. 31, 2015 | (50,533) | $ 3 | 971 | (51,507) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | $ (12,461) | (12,461) | |||||
Repurchase and retirement of common stock (in shares) | 460,266 | ||||||
Accretion of dividends on convertible preferred stock | $ (857) | (857) | |||||
Accretion of issuance costs on convertible preferred stock | $ 0 | ||||||
Exercise of stock options (in shares) | 0 | ||||||
Other comprehensive income (loss) | $ 359 | 359 | |||||
Ending Balance, (in shares) at Dec. 31, 2016 | 34,274,718 | ||||||
Ending Balance at Dec. 31, 2016 | (63,492) | $ 3 | 1,330 | (64,825) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (24,138) | (24,138) | |||||
Accretion of dividends on convertible preferred stock | (357) | (357) | |||||
Conversion of convertible preferred stock to common stock (in shares) | 18,163,158 | ||||||
Conversion of convertible preferred stock to common stock | 48,207 | $ 2 | $ 48,205 | ||||
Conversion of convertible preferred stock warrant to common stock warrant | 1,191 | 1,191 | |||||
Issuance of common stock from initial public offering, net of issuance costs (in shares) | 7,187,500 | ||||||
Issuance of common stock from initial public offering, net of issuance costs | $ 77,789 | $ 1 | 77,788 | ||||
Exercise of common stock warrant (in shares) | 79,363 | ||||||
Issuance of common stock to directors (in shares) | 10,841 | ||||||
Vesting of restricted stock units (in shares) | 4,930 | 4,930 | |||||
Exercise of stock options (in shares) | 556,220 | 556,220 | |||||
Exercise of stock options | $ 664 | 664 | |||||
Stock-based compensation expense | 10,919 | 10,919 | |||||
Other comprehensive income (loss) | (879) | (879) | |||||
Ending Balance, (in shares) at Sep. 30, 2017 | 60,276,730 | ||||||
Ending Balance at Sep. 30, 2017 | $ 49,904 | $ 6 | $ 138,767 | $ 451 | $ (89,320) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||||
Net loss | $ (24,138) | $ (8,278) | $ (12,461) | $ (6,987) | $ (17,059) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Depreciation and amortization | 673 | 567 | 764 | 763 | 610 |
Bad debt expense | 0 | 4 | 7 | (22) | 30 |
Deferred income taxes | (91) | (883) | (1,122) | (291) | 399 |
Stock-based compensation | 10,919 | 0 | |||
Fair value adjustment for warrant liability | 341 | 200 | 200 | 299 | 351 |
Loss on extinguishment of debt | 384 | 0 | |||
Changes in assets and liabilities: | |||||
Accounts receivable | 4,329 | 6,208 | (11,154) | (6,639) | (1,450) |
Prepaid expenses and other assets | (3,184) | (2,360) | (1,665) | (988) | 130 |
Deferred commissions | (1,056) | (1,389) | (5,335) | (3,965) | (4,486) |
Accounts payable and accrued expenses | 1,202 | (2,931) | 1,287 | 1,058 | 1,932 |
Accrued compensation and related benefits | (339) | 1,617 | 3,717 | (968) | 1,929 |
Other current liabilities | (75) | (1,377) | 19 | (251) | 1,395 |
Deferred revenue | 1,043 | 374 | 17,410 | 15,490 | 16,744 |
Other long-term liabilities | (143) | 433 | 577 | 356 | 1,009 |
Net cash used in operating activities | (10,135) | (7,815) | (7,756) | (2,145) | 1,534 |
Cash flows from investing activities: | |||||
Purchases of property and equipment | (295) | (935) | (984) | (524) | (2,633) |
Net cash used in investing activities | (295) | (935) | (984) | (524) | (2,633) |
Cash flows from financing activities: | |||||
Proceeds from initial public offering, net of underwriting discounts | 80,213 | 0 | |||
Proceeds from issuance of long-term debt | 20,000 | 10,000 | 0 | ||
Payment of deferred initial public offering costs | (2,424) | 0 | |||
Payment of dividend to Series A preferred stockholders | (7,565) | 0 | |||
Proceeds from exercise of common stock options | 664 | 0 | |||
Proceeds from issuance of long-term debt, net of debt issuance costs | 19,616 | 20,000 | |||
Repayment of long-term debt | (40,000) | (10,000) | (10,000) | 0 | 0 |
Proceeds from issuance of Series B convertible preferred stock, net of offering costs | 0 | 0 | 37,380 | ||
Repurchase of common stock | 0 | 0 | (21,013) | ||
Net cash provided by financing activities | 50,504 | 10,000 | 10,000 | 10,000 | 16,367 |
Effect of foreign exchange rate changes on cash and cash equivalents | 1,072 | (907) | (1,510) | (930) | (912) |
Net increase in cash and cash equivalents | 41,146 | 343 | (250) | 6,401 | 14,356 |
Cash and cash equivalents, beginning of period | 31,143 | 31,393 | 31,393 | 24,992 | 10,636 |
Cash and cash equivalents, end of period | 72,289 | 31,736 | 31,143 | 31,393 | 24,992 |
Supplemental disclosure of cash flow information: | |||||
Cash paid for interest | 0 | 643 | 895 | 193 | 0 |
Cash paid for income taxes | 484 | 580 | 610 | 1,055 | 70 |
Supplemental disclosure of non-cash financing activities: | |||||
Accretion of dividends on convertible preferred stock | 357 | 642 | 857 | 861 | 856 |
Accretion of issuance costs on convertible preferred stock | $ 0 | $ 0 | $ 120 | ||
Conversion of Convertible Preferred Stock to Common Stock | |||||
Supplemental disclosure of non-cash financing activities: | |||||
Conversion of convertible stock | 48,207 | 0 | |||
Conversion of Convertible Preferred Stock Warrant to Common Stock Warrant | |||||
Supplemental disclosure of non-cash financing activities: | |||||
Conversion of convertible stock | $ 1,191 | $ 0 |
Organization and Description of
Organization and Description of Business | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Organization and Description of Business | 1. Organization and Description of Business Appian Corporation (together with its subsidiaries, “Appian,” the “Company,” “we” or “our”) provides a leading low-code software | 1. Organization and Description of Business Appian Corporation (together with its subsidiaries, “Appian,” the “Company,” “we” or “our”) provides a leading low-code |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification” or “ASC”) for interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity (deficit) and cash flows. The results of operations for the current period are not necessarily indicative of the results for the full year or the results for any future periods. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in our final prospectus for our initial public offering (“IPO”) dated as of May 24, 2017 and filed with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended. Use of Estimates The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. Significant estimates embedded in the condensed consolidated financial statements include revenue recognition, income taxes and the related valuation allowance, stock-based compensation and fair value measurements for our common stock and preferred stock warrant. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Appian and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Initial Public Offering In May 2017, we completed an IPO in which we sold 7,187,500 shares of our newly-authorized Class A common stock at an initial price to the public of $12.00 per share. We received net proceeds of $77.8 million, after deducting underwriting discounts and commissions and offering expenses paid and payable by us, from sales of our shares in the IPO. Immediately prior to the completion of the IPO, (1) all shares of common stock then outstanding were converted into Class B common stock on a one-for-one one-for-one Deferred offering costs of $2.4 million, consisting of legal, accounting and other fees and costs related to our IPO, were recorded to additional paid-in Revenue Recognition We generate revenue primarily through sales of subscriptions to our platform, as well as professional services. We recognize revenue when all of the following conditions are met: (1) there is persuasive evidence of an arrangement; (2) the service or product has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of related fees is reasonably assured. If collection is not reasonably assured, we defer revenue recognition until collectability becomes reasonably assured. Our arrangements do not contain general rights of return. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. Subscriptions, Software and Support Revenue Subscriptions, software and support revenue is primarily related to (1) software as a service (“SaaS”) subscriptions bundled with maintenance and support and hosting services and (2) term license subscriptions bundled with maintenance and support. To a lesser extent, we also generate revenue from the sale of perpetual software licenses and associated maintenance and support. Historically, we licensed our software primarily under perpetual licenses, but over time we transitioned from perpetual licenses to subscriptions. As a result, revenue from our perpetual software licenses was less than 1.0% of our total revenue for the three and nine months ended September 30, 2016 and September 30, 2017. We generally charge subscription fees on a per-user basis. SaaS Subscriptions Our SaaS subscription revenue is derived from customers accessing our cloud offering pursuant to contracts that are generally one to five years in length. We perform all required maintenance and support for our cloud offering and we do not separately charge customers for hosting costs. In these arrangements, our customers do not have the right to take the software on-premises and, Term License Subscriptions Our term license subscription revenue is derived from customers with on-premises installations Perpetual Licenses Our perpetual license revenue is derived from customers with perpetual licenses to our platform and associated maintenance and support contracts. We recognize revenue from perpetual licenses on the date of delivery to our customer. We sell maintenance and support to perpetual license customers separately from the perpetual licenses pursuant to agreements that generally renew annually. Maintenance and support revenue is deferred and recognized ratably over the term of the support period. Professional Services Our professional services revenue is comprised of fees for consulting services, including application development and deployment assistance and training related to our platform. Our professional services are not essential to the functionality of our platform because the platform is ready for the customer’s use immediately upon delivery and is not modified or customized in any manner. Consulting services are billed under both time-and-material and fixed-fee arrangements. standalone time-and-material contracts, standalone fixed-fee contracts, We defer recognition of revenue from work performed on pending contract modifications until the period in which the modifications are accepted and funding is approved by the customer. Costs of work performed on pending contract modifications are expensed as incurred. Multiple Element Arrangements Our multiple element arrangements are from SaaS subscriptions, term license subscriptions, and perpetual licenses that are generally sold in combination with maintenance and support service and frequently with professional services. SaaS Subscriptions For multiple element arrangements involving SaaS subscriptions that include professional services in addition to the subscription to our platform, we evaluate each element to determine whether it represents a separate unit of accounting. Because there are third-party vendors who routinely sell and provide the same professional services to our customers, our professional services are deemed to have standalone value apart from the SaaS subscription. Additionally, we offer both SaaS subscriptions and professional services on a standalone basis. Professional services revenue is therefore accounted for separately from subscription fees and recognized as the professional services are performed. We allocate revenue to the elements based on the selling price hierarchy using vendor-specific objective evidence (“VSOE”) of selling price, third-party evidence (“TPE”) of selling price, or if neither exists, best estimated selling price (“BESP”). In cases where we do not have VSOE or TPE of the elements of our arrangements, we use BESP to allocate revenue. We determine BESP for a service by considering multiple factors including, but not limited to, evaluating the weighted average of actual sales prices and other factors such as gross margin objectives, pricing practices and growth strategy. Pricing practices taken into consideration include historic contractually stated prices, volume discounts where applicable and our price lists. While we believe we can make reliable estimates regarding these matters, these estimates are inherently subjective. Once the revenue is allocated to these elements, revenue is recognized as such services are provided. Term License Subscriptions For multiple element arrangements involving term license subscriptions, maintenance and support and professional services, we do not have VSOE of fair value for the maintenance and support. Our term license subscriptions are generally not sold on a standalone basis, and therefore, we have not established VSOE of fair value for the subscriptions. Consequently, for our bundled arrangements that include certain professional services, there are two undelivered elements for which VSOE of fair value has not been established and, therefore, we utilize the combined services approach and defer all revenue until the software has been delivered and the provision of all services has commenced. We then recognize the entire fee from the arrangement ratably over the remaining period of the arrangement, assuming all other software revenue recognition criteria have been met. Perpetual Licenses For multiple element arrangements involving our perpetual software licenses, we allocate revenue to the software license arrangement by determining if VSOE of fair value exists for the undelivered elements, which are usually maintenance and support and professional services. In situations where VSOE of fair value exists for the undelivered elements, we apply the residual method whereby the fees allocated to license revenue are recognized upon delivery, the fees allocated to maintenance and support revenue are recognized over the service period and the fees allocated to professional services and training are recognized as performed. In instances where we lack VSOE of fair value for the undelivered elements, revenue is either deferred until the final element is delivered or recognized ratably over the service period when the only undelivered elements are either professional services or maintenance and support. We have VSOE for maintenance and support elements and professional services elements performed on a time and materials basis. VSOE of fair value is based upon the price charged when the same element is sold separately. In determining VSOE of fair value, we require that a substantial majority of the selling prices fall within a reasonably narrow pricing range. We reassess VSOE annually or more frequently if required. Deferred Revenue Deferred revenue primarily consists of amounts billed or billable in advance of revenue recognition from our subscriptions, software, and support and professional services described above. Deferred revenue is recognized as the revenue recognition criteria are met. Cost of Revenue Cost of Subscriptions, Software and Support Revenue Cost of subscriptions, software and support revenue consists primarily of fees paid to our third-party managed hosting providers and other third-party service providers, personnel costs, including payroll and benefits for our technology operations and customer support teams, and allocated facility costs and overhead. Cost of Professional Services Revenue Cost of professional services revenue includes all direct and indirect costs to deliver our professional services and training, including employee compensation for our global professional services and training personnel, travel costs, third-party contractor costs and allocated facility costs and overhead. Concentration of Credit Risk Our financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. Cash deposits may be in excess of insured limits. We believe that the financial institutions that hold our cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances. With regard to our customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. We believe that no additional credit risk beyond amounts provided for collection loss are inherent in accounts receivable. Revenue generated from government agencies represented 19.4% and 28.5% of our revenue for the three and nine months ended September 30, 2016, respectively, of which the top three federal government agencies generated 13.1% and 19.5% of our revenue for the three and nine months ended September 30, 2016, respectively. Additionally, 23.1% and 18.6% of our revenue during the three and nine months ended September 30, 2016, respectively, was generated from foreign customers. Revenue generated from government agencies represented 14.2% and 15.4% of our revenue for the three and nine months ended September 30, 2017, respectively, of which the top three federal government agencies generated 7.7% and 9.1% of our revenue for the three and nine months ended September 30, 2017, respectively. Additionally, 28.6% and 25.6% of our revenue during the three and nine months ended September 30, 2017, respectively, was generated from foreign customers. Federal government agencies accounted for 17.2% and 9.1% of accounts receivable at December 31, 2016 and September 30, 2017, respectively. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts. We regularly review the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness and current economic trends. If the financial condition of our customers were to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be required and would increase bad debt expense. To date, our allowance and related bad debt write-offs have been nominal. There was no change in the allowance for doubtful accounts from December 31, 2016 to September 30, 2017. Deferred Commissions Deferred commissions are the incremental costs that are directly associated with subscription agreements with customers and consist of sales commissions paid to our direct sales force. Commissions are considered direct and incremental and as such are deferred and amortized over the terms of the related customer contracts consistent with the related revenue. Amortization of deferred commissions is included in sales and marketing expense in the accompanying condensed consolidated statements of operations. Commission expense was $1.8 million and $5.4 million for the three and nine months ended September 30, 2016, respectively. Commission expense was $3.2 million and $8.5 million for the three and nine months ended September 30, 2017, respectively. Fair Value of Financial Instruments The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of December 31, 2016 and September 30, 2017 because of the relatively short duration of these instruments. The carrying value of our long-term debt as of December 31, 2016 approximated fair value given interest rates for similar debt instruments available to the Company. We use a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, • Level 1. • Level 2. • Level 3. Assets and Liabilities Measured at Fair Value on a Recurring Basis We evaluate our financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. After the reclassification of the convertible preferred stock warrant in May 2017, we did not have any assets or liabilities subject to fair value measurements as of September 30, 2017. See Note 8 for further discussion of the warrant reclassification. The following table summarizes the conclusions reached as of December 31, 2016 (in thousands): December 31, Level 1 Level 2 Level 3 Liabilities: Series A convertible preferred stock warrant(1) $ 850 $ — $ — $ 850 $ 850 $ — $ — $ 850 (1) In order to determine the fair value of the convertible preferred stock warrant, we used the Black-Scholes option pricing model (“OPM”). Significant inputs for the OPM included an estimate of the fair value of the Series A convertible preferred stock, the remaining contractual life of the warrant, an estimate of the timing of a liquidity event, a risk-free rate of interest and an estimate of our stock volatility using the volatilities of guideline peer companies. Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs There were no changes in our Level 3 instruments measured at fair value on a recurring basis during the three months ended September 30, 2016 and 2017. The following table presents the changes in our Level 3 instruments measured at fair value on a recurring basis during the nine months ended September 30, 2016 and 2017 (in thousands): Nine Months Ended September 30, 2016 2017 Balance as of January 1 $ 650 $ 850 Change in fair value of warrant liability 200 341 Reclassification of warrant liability to equity — (1,191 ) Balance as of September 30 $ 850 $ — Stock-Based Compensation We account for stock-based compensation expense related to stock-based awards based on the estimated fair value of the award on the grant date. We calculate the fair value of stock options using the Black-Scholes OPM. For service-based awards, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. For performance-based awards, stock-based compensation expense is recognized using the accelerated attribution method, based on the probability of satisfying the performance condition. For awards that contain market conditions, compensation expense is measured using a Monte Carlo simulation model and recognized using the accelerated attribution method over the derived service period based on the expected market performance as of the grant date. For restricted stock units, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. As discussed in “—Recent Accounting Pronouncements,” we have elected to early adopt Accounting Standards Update (“ASU”) No. 2016-9, which, Emerging Growth Company Status We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, we will not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. Recent Accounting Pronouncements Adopted In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which Subtopic 205-40 issued. ASU 2014-15 was In April 2015, the FASB issued ASU No. 2015-3, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-3”), which ASU 2015-3, the with line-of-credit arrangements ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit 2015-15”). ASU 2015-3 2015-15 In April 2015, the FASB issued ASU No. 2015-5, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (“ASU 2015-5”), which ASU 2015-5 was In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740) (“ASU 2015-17”), which ASU 2015-17 ASU 2015-17 did In March 2016, the FASB issued ASU No. 2016-9, Improvements to Employee Share-Based Payment Accounting (Topic 718) (“ASU 2016-9”), which ASU 2016-9 ASU 2016-9 did Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-9, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-9”), which ASU 2014-9 provides ASU 2014-9 also ASU No. 2016-8, Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net) (“ASU 2016-8”), which ASU 2014-9. In ASU No. 2016-10, Identifying Performance Obligations and Licensing (“ASU 2016-10”), which ASU 2014-9. In 2016-12, Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), which We currently plan to adopt the new standard using the full retrospective approach; however, the decision regarding the adoption method has not been finalized. Our final determination will depend on a number of factors such as the significance of the impact of the new standard on our financial results, system readiness, including that of software procured from third-party providers, and our ability to accumulate and analyze the information necessary to assess the impact on prior period financial statements, as necessary. We are in the initial stages of our evaluation of the impact of the new standard on our accounting policies, processes, and system requirements. We have assigned internal resources in addition to the engagement of third-party service providers to assist in the evaluation. Furthermore, we have made and will continue to make investments in systems to enable timely and accurate reporting under the new standard. While we continue to assess all potential impacts under the new standard there is the potential for significant impacts to the timing of recognition of revenue, particularly term license subscriptions and professional services revenue. We also expect an impact to our accounting for contract acquisition costs, both with respect to the amounts that will be capitalized as well as the period of amortization. Under current industry-specific software revenue recognition guidance, we have historically concluded that we did not have VSOE of fair value of the undelivered services related to term license subscriptions, and accordingly, have recognized term license subscriptions and related services ratably over the subscription term. Professional services included in an arrangement with subscription revenue has also been recognized ratably over the subscription term. The new standard, which does not retain the concept of VSOE, requires an evaluation of whether term license subscriptions and related services, including professional services, are distinct performance obligations and therefore should be separately recognized at a point in time or over time. Depending on the outcome of our evaluation, the timing of when revenue is recognized could change significantly for term license subscriptions and professional services under the new standard. In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) (“ASU 2016-2”), which ASU 2016-2 also ASU 2016-2 will In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which ASU 2016-15 will ASU 2016-15 is | 2. Significant Accounting Policies Basis of Presentation The consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in these financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. Significant estimates embedded in the consolidated financial statements include revenue recognition, income taxes and the related valuation allowance, stock-based compensation and fair value measurements for our common stock and outstanding warrant. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Appian and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Revenue Recognition We generate revenue primarily through sales of subscriptions to our platform, as well as professional services. We recognize revenue when all of the following conditions are met: (1) there is persuasive evidence of an arrangement; (2) the service or product has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of related fees is reasonably assured. If collection is not reasonably assured, we defer revenue recognition until collectability becomes reasonably assured. Our arrangements do not contain general rights of return. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. Subscriptions, Software and Support Revenue Subscriptions, software and support revenue is primarily related to (1) software as a service (“SaaS”) subscriptions bundled with maintenance and support and hosting services and (2) term license subscriptions bundled with maintenance and support. To a lesser extent, we also generate revenue from the sale of perpetual software licenses and associated maintenance and support. Historically, we licensed our software primarily under perpetual licenses, but over time we transitioned from perpetual licenses to subscriptions. As a result, revenue from our perpetual software licenses was 5.0%, 1.9%, and 0.9% of our total revenue for 2014, 2015 and 2016, respectively. We generally charge subscription fees on a per-user SaaS Subscriptions Our SaaS subscription revenue is derived from customers accessing our cloud offering pursuant to contracts that are generally one to five years in length. We perform all required maintenance and support for our cloud offering and we do not separately charge customers for hosting costs. In these arrangements, our customers do not have the right to take the software on-premises and, as a result, such arrangements are not accounted for within the scope of the software revenue guidance. Revenue from SaaS subscriptions is recognized ratably over the term of the subscription, beginning with the date our service is made available to our customer. Term License Subscriptions Our term license subscription revenue is derived from customers with on-premises Perpetual Licenses Our perpetual license revenue is derived from customers with perpetual licenses to our platform and associated maintenance and support contracts. We recognize revenue from perpetual licenses on the date of delivery to our customer. We sell maintenance and support to perpetual license customers separately from the perpetual licenses pursuant to agreements that generally renew annually. Maintenance and support revenue is deferred and recognized ratably over the term of the support period. Professional Services Our professional services revenue is comprised of fees for consulting services, including application development and deployment assistance and training related to our platform. Our professional services are not essential to the functionality of our platform because the platform is ready for the customer’s use immediately upon delivery and is not modified or customized in any manner. Consulting services are billed under both time-and-material fixed-fee time-and-material fixed-fee We defer recognition of revenue from work performed on pending contract modifications until the period in which the modifications are accepted and funding is approved by the customer. Costs of work performed on pending contract modifications are expensed as incurred. Multiple Element Arrangements Our multiple element arrangements are from SaaS subscriptions, term license subscriptions, and perpetual licenses that are generally sold in combination with maintenance and support service and frequently with professional services. SaaS Subscriptions For multiple element arrangements involving SaaS subscriptions that include professional services in addition to the subscription to our platform, we evaluate each element to determine whether it represents a separate unit of accounting. Because there are third-party vendors who routinely sell and provide the same professional services to our customers, our professional services are deemed to have standalone value apart from the SaaS subscription. Additionally, we offer both SaaS subscriptions and professional services on a standalone basis. Professional services revenue is therefore accounted for separately from subscription fees and recognized as the professional services are performed. We allocate revenue to the elements based on the selling price hierarchy using vendor-specific objective evidence, or VSOE, of selling price, third-party evidence, or TPE, of selling price, or if neither exists, best estimated selling price, or BESP. In cases where we do not have VSOE or TPE of the elements of our arrangements, we use BESP to allocate revenue. We determine BESP for a service by considering multiple factors including, but not limited to, evaluating the weighted average of actual sales prices and other factors such as gross margin objectives, pricing practices and growth strategy. Pricing practices taken into consideration include historic contractually stated prices, volume discounts where applicable and our price lists. While we believe we can make reliable estimates regarding these matters, these estimates are inherently subjective. Once the revenue is allocated to these elements, revenue is recognized as such services are provided. Term License Subscriptions For multiple element arrangements involving term license subscriptions, maintenance and support and professional services, we do not have VSOE of fair value for the maintenance and support. Our term license subscriptions are generally not sold on a standalone basis, and therefore, we have not established VSOE of fair value for the subscriptions. Consequently, for our bundled arrangements that include certain professional services, there are two undelivered elements for which VSOE of fair value has not been established and, therefore, we utilize the combined services approach and defer all revenue until the software has been delivered and the provision of all services has commenced. We then recognize the entire fee from the arrangement ratably over the remaining period of the arrangement, assuming all other software revenue recognition criteria have been met. Perpetual Licenses For multiple element arrangements involving our perpetual software licenses, we allocate revenue to the software license arrangement by determining if VSOE of fair value exists for the undelivered elements, which are usually maintenance and support and professional services. In situations where VSOE of fair value exists for the undelivered elements, we apply the residual method whereby the fees allocated to license revenue are recognized upon delivery, the fees allocated to maintenance and support revenue are recognized over the service period and the fees allocated to professional services and training are recognized as performed. In instances where we lack VSOE of fair value for the undelivered elements, revenue is either deferred until the final element is delivered or recognized ratably over the service period when the only undelivered elements are either professional services or maintenance and support. We have VSOE for maintenance and support elements and professional services elements performed on a time and materials basis. VSOE of fair value is based upon the price charged when the same element is sold separately. In determining VSOE of fair value, we require that a substantial majority of the selling prices fall within a reasonably narrow pricing range. We reassess VSOE annually or more frequently if required. Deferred Revenue Deferred revenue primarily consists of amounts billed in advance of revenue recognition from our subscriptions, software, and support and professional services described above. Deferred revenue is recognized as the revenue recognition criteria are met. Cost of Revenue Cost of Subscriptions, Software and Support Revenue Cost of subscriptions, software and support revenue consists primarily of fees paid to our third-party managed hosting providers and other third-party service providers, personnel costs, including payroll and benefits for our technology operations and customer support teams, and allocated facility costs and overhead. Cost of Professional Services Revenue Cost of professional services revenue includes all direct and indirect costs to deliver our professional services and training, including employee compensation for our global professional services and training personnel, travel costs, third-party contractor costs and allocated facility costs and overhead. Concentration of Credit Risk Our financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and trade account receivables. Cash deposits may be in excess of insured limits. We believe that the financial institutions that hold our cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances. With regard to our customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. We believe that no additional credit risk beyond amounts provided for collection loss are inherent in accounts receivable. Revenue generated from government agencies represented 34.4%, 32.7% and 26.2% of our revenue for the years ended December 31, 2014, 2015 and 2016, respectively, of which the top three federal government agencies generated 22.9%, 20.8% and 17.7% of our revenue for the years ended December 31, 2014, 2015 and 2016, respectively. Additionally, 25.5%, 19.9% and 19.5% of our revenue earned during the years ended December 31, 2014, 2015 and 2016, respectively, was generated from foreign customers. No individual customer represented more than 10% of accounts receivable at December 31, 2015. One customer accounted for 17.2% of accounts receivable at December 31, 2016. Cash and Cash Equivalents We consider all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase, as well as overnight repurchase investments, to be cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts. We regularly review the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness and current economic trends. If the financial condition of our customers were to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be required and would increase bad debt expense. To date, our allowance and related bad debt write-offs have been nominal. There was no change in the allowance for doubtful accounts from December 31, 2015 to December 31, 2016. Deferred Commissions Deferred commissions are the incremental costs that are directly associated with subscription agreements with customers and consist of sales commissions paid to our direct sales force. Commissions are considered direct and incremental and as such are deferred and amortized over the terms of the related customer contracts consistent with the related revenue. Amortization of deferred commissions is included in sales and marketing expense in the accompanying consolidated statements of operations. Commission expense was $3.8 million, $4.6 million, and $6.5 million for the years ended December 31, 2014, 2015 and 2016, respectively. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Significant additions or improvements extending the useful life of an asset are capitalized, while repairs and maintenance costs which do not significantly improve the related assets or extend their useful lives are charged to expense as incurred. Asset Category Useful Life (in years) Computer software 3 Computer hardware 3 Equipment 5 Office furniture and fixtures 10 Leasehold improvements Shorter of useful life of assets or lease term Impairment of Long-Lived Assets Long-lived assets and certain intangible assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable through undiscounted cash flows from the use of the assets. If such assets are considered to be impaired, the assets are written down to their estimated fair value. No indicators of impairment were identified for the years ended December 31, 2014, 2015 and 2016. Fair Value of Financial Instruments The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of December 31, 2015 and 2016 because of the relatively short duration of these instruments. The carrying value of our long-term debt approximates fair value given interest rates for similar debt instruments available to the Company. We use a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring • Level 1. • Level 2. • Level 3. Assets and Liabilities Measured at Fair Value on a Recurring Basis We evaluate our financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. The following table summarizes the conclusions reached as of December 31 (in thousands): 2015 Level 1 Level 2 Level 3 Liabilities: Series A convertible preferred stock warrant(1) $ 650 — — $ 650 $ 650 $ — $ — $ 650 2016 Level 1 Level 2 Level 3 Liabilities: Series A convertible preferred stock warrant(1) $ 850 — — $ 850 $ 850 $ — $ — $ 850 (1) In order to determine the fair value of the convertible preferred stock warrant, we used an option pricing model (“OPM”). Significant inputs for the OPM included an estimate of the fair value of the Series A convertible preferred stock, the remaining contractual life of the warrant, an estimate of the timing of a liquidity event, a risk-free rate of interest and an estimate of our stock volatility using the volatilities of guideline peer companies. Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs The following table presents the changes in our Level 3 instruments measured at fair value on a recurring basis during the years ended December 31 (in thousands): Series A Convertible 2014 2015 2016 Balance as of January 1 $ — $ 351 $ 650 Change in fair value of warrant liability 351 299 200 Balance as of December 31 $ 351 $ 650 $ 850 The fair value of the warrant as of December 31, 2013 was de minimis and therefore not recorded as of January 1, 2014. Stock-Based Compensation We account for stock-based compensation expense related to stock-based awards based on the estimated fair value of the award on the grant date. We calculate the fair value of stock options using the Black-Scholes OPM. For service-based awards, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. For performance-based awards, stock-based compensation expense is recognized using the accelerated attribution method, based on the probability of satisfying the performance condition. For awards that contain market conditions, compensation expense is measured using a Monte Carlo simulation model and recognized using the accelerated attribution method over the derived service period based on the expected market performance as of the grant date. All of our currently outstanding awards require the satisfaction of both a service condition and a liquidity event condition. The liquidity condition is satisfied upon the occurrence of a qualifying event, defined as a change of control transaction or the effective date of our IPO. No compensation expense will be recognized until the performance condition is achieved, at which time the cumulative compensation expense using the accelerated attribution method from the service start date will be recognized. As discussed in “—Recent Accounting Pronouncements,” we have elected to early adopt Accounting Standards Update No. 2016-09, Basic and Diluted Loss per Common Share We use the two-class non-forfeitable two-class Under the two-class Diluted net income per common share is computed under the two-class “if-converted” (two-class “if-converted”) Due to net losses for the years ended December 31, 2014, 2015 and 2016, basic and diluted loss per share were the same, as the effect of potentially dilutive securities would have been anti-dilutive. Income Taxes We use the asset and liability method of accounting for income taxes in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be reversed. We recognize the effect on deferred tax assets and liabilities of a change in tax rates as income and expense in the period that includes the enactment date. A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. We recognize the tax benefit of an uncertain tax position only if it is more likely than not the position is sustainable upon examination by the taxing authority. We measure the tax benefit recognized as the largest amount of benefit which is more likely than not to be realized upon settlement with the taxing authority. We recognize penalties and interest related to unrecognized tax benefits as income tax expense. We calculate the current and deferred income tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years and record adjustments based on filed income tax returns when identified. The amount of income taxes paid is subject to examination by U.S. federal, state and foreign tax authorities. The estimate of the potential outcome of any uncertain tax issue is subject to our assessment of relevant risks, facts and circumstances existing at that time. To the extent the assessment of such tax position changes, we record the change in estimate in the period in which we make that determination. Due to changing economic and political environments in the United States and abroad, we may be impacted by possible tax reform or similar changes in tax law. Specifically, certain proposed changes in the United States may impact the U.S. taxation of our foreign earnings and adversely impact our effective tax rate. However, it is not possible to estimate the impact of such changes at this time and we continue to monitor these changes. Segment Reporting Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating financial performance. Our CODM is our chief executive officer, who reviews financial information presented on a companywide basis for purposes of allocating resources and evaluating financial performance. As such, our operations constitute a single operating segment and one reportable segment. Foreign Currency Our operations located outside of the United States where the local currency is the functional currency are translated into U.S. dollars using the current rate method. Results of operations are translated at the average rate of exchange for the period. Assets and liabilities are translated at the closing rates on the balance sheet date. Gains and losses on translation of these accounts are accumulated and reported as a separate component of stockholders’ deficit and other comprehensive income (loss). Gains and losses on foreign currency transactions are recognized in the accompanying consolidated statements of operations as a component of other expense, net. Transaction gains and losses from transactions denominated in foreign currencies resulted in net transaction losses of $1.7 million, $1.3 million and $1.5 million for the years ended December 31, 2014, 2015 and 2016, respectively. Research and Development Research and development expenses include payroll, employee benefits, and other headcount-related costs associated with product development. Our product utilizes a common codebase, whether accessed by customers via the cloud or via an on-premises external-use Advertising We expense advertising costs as they are incurred. Advertising expenses totaled $0.5 million for each of the years ended December 31, 2014 and 2015 and $1.4 million for the year ended December 31, 2016. Recent Accounting Pronouncements We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, we will not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. Adopted In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity ’ s Ability to Continue as a Going Concern 2014-15”), 205-40 2014-15 In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs 2015-03”), 2015-03, line-of-credit No. 2015-15. In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement 2015-05”), 2015-05 In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740) 2015-17”), 2015-17 2015-17 In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) 2016-09”), 2016-09 2016-09 Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) 2014-09”), 2014-09 2014-09 No. 2016-08, Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net) 2016-08”), 2014-09. No. 2016-10, Identifying Performance Obligations and Licensing 2016-10”), 2014-09. No. 2016-12, Narrow-Scope Improvements and Practical Expedients 2016-12”), We currently plan to adopt the new standard using the full retrospective approach; however, the decision regarding the adoption method has not been finalized. Our final determination will depend on a number of factors such as the significance of the impact of the new standard on our financial results, system readiness, including that of software procured from third-party providers, and our ability to accumulate and analyze the information necessary to assess the impact on prior period financial statements, as necessary. We are in the initial stages of our evaluation of the impact of the new standard on our accounting policies, processes, and system requirements. We have assigned internal resources in addition to the engagement of third-party service providers to assist in the evaluation. Furthermore, we have made and will continue to make investments in systems to enable timely and accurate reporting under the new standard. While we continue to assess all potential impacts under the new standard there is the potential for significant impacts to the timing of recognition of revenue, particularly term license subscriptions and professional services revenue. We also expect an impact to our accounting for contract acquisition costs, both with respect to the amounts that will be capitalized as well as the period of amortization. Under current industry-specific software revenue recognition guidance, we have historically concluded that we did not have VSOE of fair value of the undelivered services related to term license subscriptions, and accordingly, have recognized term license subscriptions and related services ratably over the subscription term. Professional services included in an arrangement with subscription revenue has also been recognized ratably over the subscription term. The new standard, which does not retain the concept of VSOE, requires an evaluation of whether term license subscriptions and related services, including professional services, are distinct performance obligations and therefore should be separately recognized at a point in time or over time. Depending on the outcome of our evaluation, the timing of when revenue is recognized could change significantly for term license subscriptions and professional services under the new standard. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) 2016-02”), 2016-02 2016-02 In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments 2016-15”), 2016-15 2016-15 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. Property and Equipment Property and equipment consisted of the following as of December 31 (in thousands): 2015 2016 Computer software $ 1,562 $ 1,701 Computer hardware 1,201 1,408 Leasehold improvements 3,555 4,098 Office furniture and fixtures 386 464 Equipment 96 116 6,800 7,787 Less: accumulated depreciation (3,908 ) (4,686 ) Property and equipment, net $ 2,892 $ 3,101 Depreciation and amortization expense totaled $0.6 million for the year ended December 31, 2014 and $0.8 million for each of the years ended December 31, 2015 and 2016. |
Debt
Debt | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | ||
Debt | 4. Debt 2015 Line of Credit At December 31, 2015, we had a $10.0 million revolving line of credit with a lender, expiring in June 2016, which was subsequently amended in June 2016 to extend the maturity date through June 2017. This line of credit was terminated in April 2017. 2015 Term Loan In March 2015, we entered into a collateralized $10.0 million term loan facility with a lender, maturing in March 2019, and borrowed the full amount under the term loan facility in June 2015. In January 2016, we paid off the outstanding balance of the term loan and simultaneously entered into a collateralized $20.0 million term loan facility, maturing in January 2020. We borrowed the full amount under the term loan facility in January 2016, which we repaid in full in April 2017. 2017 Financing Facility In April 2017, we entered into a new financing facility consisting of a $5.0 million senior revolving credit facility, a $20.0 million senior term loan, and a $10.0 million subordinated term loan. In connection with the execution of this financing facility, the prior line of credit was terminated, and we borrowed the full $20.0 million available under the senior term loan and repaid the outstanding balance under our prior term loan. Additionally, in connection with the execution of our new financing facility, the lender waived the prepayment fee associated with our prior line of credit. In June 2017, we used proceeds from our IPO to pay all remaining outstanding principal and interest under the senior term loan and subsequently terminated the senior term loan and subordinated term loan. In connection with the repayment of the senior term loan, we recognized a loss on extinguishment of debt of $0.4 million related to unamortized debt issuance costs, which is included within other (income) expense, net in the accompanying condensed consolidated statements of operations. As of September 30, 2017, we had no outstanding borrowings. This financing facility was terminated in November 2017 in connection with our entry into a new $20.0 million revolving line of credit. See Note 11 for additional information regarding our new revolving line of credit. | 4. Debt Line of Credit At December 31, 2015, we had a $10.0 million revolving line of credit with a lender, expiring in June 2016, which was subsequently amended in June 2016 to extend the maturity date through June 2017. The amount of borrowing available under the credit facility at any time may not exceed 80% of eligible accounts receivable at such time and any amounts borrowed are collateralized by substantially all of our assets. Amounts drawn on the revolving line of credit bear interest at a floating rate of prime plus 0.75%. The agreement contains certain affirmative covenants related to the timely delivery of financial information to the bank and maintaining a liquidity ratio of at least 1.25 to 1, as well as certain customary negative covenants. We were in compliance with all covenants as of December 31, 2016, and would be able to draw up to a maximum of $3.5 million on the revolving line of credit while maintaining compliance with the liquidity ratio. As of December 31, 2015 and 2016, there were no advances against the line of credit. Term Loan In March 2015, we entered into a collateralized $10.0 million term loan facility with a lender, maturing in March 2019, and borrowed the full amount under the term loan facility in June 2015. In January 2016, we paid off the outstanding balance of the term loan and simultaneously entered into a collateralized $20.0 million term loan facility, maturing in January 2020. We borrowed the full amount under the term loan facility in January 2016. Amounts drawn on the term loan bear interest at a floating rate of prime plus 1.25%, or 5.00% as of December 31, 2016. We are required to repay the term loan over 48 months. The first 12 months will be interest-only payments followed by 36 months of monthly amortization payments. We may pay off the entire term loan at any time by paying all outstanding principal, accrued interest, and a prepayment fee of 1% of the amount advanced through month 12, 0.5% during months 13 through 24 and no prepayment fee thereafter. The term loan includes a financial covenant related to our short-term liquidity. We were in compliance with this covenant as of December 31, 2016. |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | 5. Income Taxes The provision for income taxes is based upon the estimated annual effective tax rates for the year applied to the current period income (loss) before tax plus the tax effect of any significant unusual items, discrete events or changes in tax law. Our operating subsidiaries are exposed to statutory effective tax rates ranging from zero to approximately 40%. Fluctuations in the distribution of pre-tax income We assess uncertain tax positions in accordance with ASC 740-10, Accounting for Uncertainties in Tax We file income tax returns in the United States federal jurisdiction and in many state and foreign jurisdictions. The tax years 2013 through 2016 remain open to examination by the major taxing jurisdictions to which we are subject. No material examinations are currently open. | 5. Income Taxes For the years ended December 31, 2014, 2015 and 2016, our net (loss) income before income taxes was comprised of the following (in thousands): 2014 2015 2016 Domestic $ (11,026 ) $ 1,079 $ (4,524 ) Foreign (4,829 ) (7,688 ) (9,620 ) Total $ (15,855 ) $ (6,609 ) $ (14,144 ) For the years ended December 31, 2014, 2015, and 2016, our income tax expense (benefit) was comprised of the following (in thousands): 2014 2015 2016 Current: Federal $ 430 $ 390 $ (627 ) State 128 62 (200 ) Foreign 247 217 266 Total current expense (benefit) 805 669 (561 ) Deferred: Federal 325 (334 ) (922 ) State 51 43 (230 ) Foreign 23 — 30 Total deferred expense (benefit) 399 (291 ) (1,122 ) Total income tax expense (benefit) $ 1,204 $ 378 $ (1,683 ) For the years ended December 31, 2014, 2015, and 2016, the provision for income taxes differs from the amount computed by applying the federal statutory income tax rates to our loss before the provision for income taxes, as follows: 2014 2015 2016 U.S. federal statutory tax rate 34.0 % 34.0 % 34.0 % State tax expense (0.8 ) (0.9 ) 1.4 Expense on purchase of common stock (30.2 ) — — Foreign rate differential (7.9 ) (29.4 ) (17.8 ) Nondeductible expenses (1.5 ) (4.1 ) (2.3 ) Tax credits 3.2 10.0 6.5 Unrecognized tax benefits (0.5 ) (1.8 ) (0.2 ) Other (0.5 ) (1.9 ) (0.2 ) Change in valuation allowance (3.4 ) (11.5 ) (9.6 ) Total (7.6 )% (5.6 )% 11.8 % Deferred tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amount of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. As of December 31, 2015 and 2016, significant components of our deferred tax assets and liabilities are as follows (in thousands): 2015 2016 Deferred tax assets: Accrued vacation $ 482 $ 529 Bad debt 157 159 Deferred revenue 3,173 2,176 Deferred rent 603 834 Tax credits 1,381 2,401 Net operating losses 1,289 2,939 Other 209 929 Gross deferred tax assets 7,294 9,967 Less: Valuation allowance (1,283 ) (2,642 ) Total deferred tax assets 6,011 7,325 Deferred tax liabilities: Depreciation (491 ) (349 ) Unbilled receivables (1,835 ) (491 ) Prepaid expenses (4,579 ) (6,505 ) Total deferred tax liabilities (6,905 ) (7,345 ) Net deferred tax liability $ (894 ) $ (20 ) As of December 31, 2015 and 2016, we had $0 and $1.8 million of gross net operating loss (“NOL”) carryforwards for U.S. federal tax purposes, respectively. Federal NOL carryforwards will expire, if unused, in 2036. As of December 31, 2015 and 2016, we had U.S. gross state NOL carryforwards of $0.1 million and $1.7 million, respectively. We had tax effected state NOL carryforwards of $0.1 million as of December 31, 2016. Tax effected state NOL carryforwards as of December 31, 2015 were nominal. U.S. state NOL carryforwards will substantially expire, if unused, in 2036. Section 382 of the Internal Revenue Code limits the utilization of the NOLs when ownership changes occur, as defined by that section. A number of states have similar state laws that limit utilization of the state NOLs when ownership changes occur. We have performed an analysis of our Section 382 ownership changes and have determined that all federal and U.S state NOLs are available for use as of December 31, 2016. As of December 31, 2015 and 2016, we had $1.8 million and $2.8 million, respectively, of federal tax credit carryforwards which will expire, if unused, in 2036. As of December 31, 2015 and 2016, we had $13.3 million and $23.7 million, respectively, of gross NOL carryforwards for Swiss tax purposes. The NOL carryforwards will expire, if unused, between 2021 and 2023. The net change during the year in the total valuation allowance was $1.4 million, driven by the valuation allowance recorded against the U.S. deferred tax assets and the change in the Switzerland deferred tax assets. Based on our cumulative operating results as of December 31, 2016, three-year cumulative loss, and assessment of our expected future results of operations, we determined that it was not more-likely-than not that we would be able to realize the U.S. deferred tax assets. We recorded a valuation allowance in the fourth quarter of 2016 on the U.S. deferred tax assets. We have evaluated all evidence, both positive and negative, in assessing the likelihood of realizability and the negative evidence outweighed the positive evidence. We continue to maintain a full valuation allowance on the deferred tax assets of our subsidiary in Switzerland as we determined that it was not more likely than not that we would be able to realize a benefit from the NOL at that subsidiary. Based on our cumulative operating results as of December 31, 2016, and assessment of our expected future results of operations, we determined that it was not more-likely-than not that we would be able to realize the deferred tax assets prior to expiration. We are subject to income taxes in the United States, Australia, Canada, France, Germany, Italy, Netherlands, Switzerland, and United Kingdom. Any undistributed earnings of our foreign subsidiaries are considered to be indefinitely reinvested; accordingly, no U.S. income taxes have been provided thereon. Upon repatriation of those earnings, if any, we would be subject to U.S. income taxes, net of any applicable foreign tax credits, and foreign withholding taxes. We did not have any undistributed earnings at our foreign subsidiaries as of December 31, 2015 and 2016. As of December 31, 2015 and 2016, we had unrecognized tax benefits of $0.4 million, of which the entire portion would affect our effective tax rate if recognized. The following table summarizes the activity related to our unrecognized tax benefit from January 1, 2014 to December 31, 2016 (in thousands): Balance as of January 1, 2014 $ 218 Additions for tax positions in current years 68 Additions for tax positions in prior years — Reductions due to lapse in statutes of limitations — Settlements — Balance as of December 31, 2014 286 Additions for tax positions in current years 98 Additions for tax positions in prior years — Reductions due to lapse in statutes of limitations — Settlements — Balance as of December 31, 2015 384 Additions for tax positions in current years 171 Additions for tax positions in prior years — Reductions due to lapse in statutes of limitations (136 ) Settlements — Balance as of December 31, 2016 $ 419 We recognize interest and penalties related to uncertain tax positions in income tax expense. During the years ended December 31, 2014, 2015, and 2016, we recognized potential interest and penalties of $15,000, $19,000, and $2,000, respectively, and the cumulative balance of interest and penalties as of December 31, 2015 and 2016 was $39,000 and $35,000, respectively. We anticipate that total unrecognized tax benefits will decrease by approximately $0.1 million over the next 12 months due to the expiration of certain statutes of limitations. We file income tax returns in the United States federal jurisdiction and in many state and foreign jurisdictions. The tax years 2011 through 2015 remain open to examination by the major taxing jurisdictions to which we are subject to. We are currently under examination by the Internal Revenue Service for tax year 2014. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock-Based Compensation | 6. Stock-Based Compensation In May 2017, our board of directors adopted, and our stockholders approved, the 2017 Equity Incentive Plan (the “2017 Plan”), which became effective as of the date of the final prospectus for our IPO. The 2017 Plan provides for the grant of incentive stock options to employees, and for the grant of nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance-based stock awards and other forms of equity compensation to employees, including officers, and to non-employee The 2007 Plan provided for the grant of stock options to employees, directors, and officers. Options under the 2007 Plan are exercisable into shares of Class B common stock and generally expire ten years from the date of grant. Under the 2007 Plan, the exercise price of each award was established by the board of directors, but could not be less than the fair market value of a share of our common stock on the grant date. Options generally vest upon the satisfaction of both a service condition and a performance condition. The service condition is satisfied at various rates as determined by us, typically on an annual basis over five years. The performance condition required the occurrence of a qualifying event, defined as a change of control transaction or upon the completion of an IPO. The performance condition was satisfied upon the effectiveness of our IPO in May 2017, on which date we recognized $6.2 million of cumulative stock-based compensation expense using the accelerated attribution method from the service start date. We estimate the fair value of stock options using the Black-Scholes OPM, which requires the use of subjective assumptions, including the expected term of the option, the current price of the underlying stock, the expected stock price volatility, expected dividend yield and the risk-free interest rate for the expected term of the option. The expected term represents the period of time the stock options are expected to be outstanding. Due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of the stock options, we use the simplified method to estimate the expected term for our stock options. Under the simplified method, the expected term of an option is presumed to be the mid-point The following table summarizes the assumptions used to estimate the fair value of stock options granted during the three and nine months ended September 30, 2016 and 2017: Three Months Ended September 30, Nine Months Ended September 30, 2016 2017 2016 2017 Risk-free interest rate 1.3% 1.9% - 2.1% 1.3% - 1.5% 1.9% - 2.2% Expected term (in years) 6.5 6.5 6.5 6.5 Expected volatility 41.6% 38.6% 41.2% - 42.0% 38.6% - 40.6% Expected dividend yield — % — % — % — % Stock Options The following table summarizes the stock option activity for the nine months ended September 30, 2017: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2017 6,784,448 $ 4.65 6.5 $ 44,259 Granted 1,252,200 11.89 Exercised (556,220 ) 1.19 8,386 Canceled (96,500 ) 6.30 Outstanding at September 30, 2017 7,383,928 6.16 6.7 164,688 Exercisable at September 30, 2017 2,992,648 1.85 3.8 79,636 The weighted average grant-date fair value of options granted during the nine months ended September 30, 2016 and 2017 was $4.38 and $5.04 per share, respectively. The total fair value of stock options that vested during the nine months ended September 30, 2017 was $5.3 million. No stock options vested during the nine months ended September 30, 2016 because a qualifying event had not yet occurred. As of September 30, 2017, the total compensation cost related to unvested stock options not yet recognized was $12.6 million, which will be recognized over a weighted average period of 3.0 years. On April 25, 2017, our board of directors modified certain outstanding stock options nearing their expiration date to remove the performance condition. Stock options to purchase an aggregate of 216,160 shares of common stock were modified, and we recognized stock-based compensation expense of $2.4 million related to this modification. Restricted Stock Units The following table summarizes the restricted stock unit activity for the nine months ended September 30, 2017: Number of Weighted Non-vested — $ — Granted 47,855 20.38 Vested (4,930 ) 20.24 Canceled — — Non-vested 42,925 20.40 As of September 30, 2017, total unrecognized compensation cost related to unvested restricted stock units was approximately $0.8 million and the weighted average remaining vesting period was 2.7 years. The following table summarizes the components of our stock-based compensation expense for the three and nine months ended September 30, 2017 (in thousands): Nine Months Ended Three Months Ended Stock-based compensation expense related to stock option modifications $ 2,394 $ — Cumulative stock-based compensation expense related to stock options recorded upon effectiveness of our IPO 6,236 — Post-IPO 2,025 1,440 Stock-based compensation expense related to the issuance of common stock to directors 130 — Stock-based compensation expense related to restricted stock units 134 134 Total stock-based compensation expense $ 10,919 $ 1,574 Stock-based compensation expense for restricted stock units, stock options and issuances of common stock is included in the following line items in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2017 (in thousands): Nine Months Ended Three Months Ended Cost of revenue Subscriptions, software and support $ 484 $ 80 Professional services 1,126 142 Operating expenses Sales and marketing 2,782 359 Research and development 2,458 256 General and administrative 4,069 737 Total stock-based compensation expense $ 10,919 $ 1,574 For the three and nine months ended September 30, 2016, no stock-based compensation expense was recognized for our stock option awards because a qualifying event had not yet occurred. | 6. Stock-Based Compensation Under the Appian Corporation 2007 Stock Option Plan (the “Plan”), we have reserved shares of common stock for the issuance of stock options to employees, directors, and officers. In July 2016, the Plan was revised to increase the maximum number of shares issuable under the Plan from 4,757,610 to 8,413,770. Of this amount, 1,629,322 shares were available to be issued under the Plan as of December 31, 2016. These shares consist of authorized but unissued or reacquired shares. Options under the Plan may be granted for periods of up to ten years. Under the Plan, the exercise price of each award is established by the board of directors, but may not be less than the fair market value of a share of our common stock on the grant date. Options generally vest upon the satisfaction of both a service condition and a performance condition. The service condition is satisfied at various rates as determined by us, typically on an annual basis over five years. The performance condition is satisfied upon the occurrence of a qualifying event, defined as a change of control transaction or upon the completion of an IPO. We estimate the fair value of stock options using the Black-Scholes OPM, which requires the use of subjective assumptions, including the expected term of the option, the current price of the underlying stock, the expected stock price volatility, expected dividend yield and the risk-free interest rate for the expected term of the option. The expected term represents the period of time the stock options are expected to be outstanding. Due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of the stock options, we use the simplified method to estimate the expected term for stock options granted to employees and directors. Under the simplified method, the expected term of an option is presumed to be the mid-point The following table summarizes the assumptions used to estimate the fair value of stock options granted during the years ended December 31: 2014 2015 2016 Risk-free interest rate 1.8% - 2.1% 1.7% - 1.9% 1.3% - 1.5% Expected term (in years) 6.5 6.5 6.5 Expected volatility 44.7% - 46.0% 39.7% - 44.4% 40.9% - 42.0% Expected dividend yield 0% 0% 0% The following table summarizes the stock option activity for the year ended December 31, 2016: Number of Weighted Weighted Aggregate (in thousands) Outstanding at January 1, 2016 4,589,988 $ 2.22 6.0 $ 24,239 Granted 2,375,080 9.30 Cancelled (180,620 ) 4.22 Outstanding at December 31, 2016 6,784,448 4.65 6.5 44,259 Exercisable at December 31, 2016 — $ — — $ — The weighted average grant-date fair value of options granted was $1.81, $2.61, and $4.35 per share during the years ended December 31, 2014, 2015, and 2016, respectively. All of our currently outstanding awards require the satisfaction of both a service condition and a liquidity event condition. The liquidity condition is satisfied upon the occurrence of a qualifying event, defined as a change of control transaction or the effective date of our IPO. No compensation expense will be recognized until the performance condition is achieved, at which time the cumulative compensation expense using the accelerated attribution method from the service start date will be recognized. As of December 31, 2016, performance-based stock option awards with a total grant-date fair value of $14.9 million were outstanding with no compensation expense recognized. For the years ended December 31, 2014, 2015 and 2016, no stock-based compensation expense was recognized for our stock option awards because a qualifying event had not occurred. |
Convertible Preferred Stock and
Convertible Preferred Stock and Stockholders' Deficit | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Equity [Abstract] | ||
Convertible Preferred Stock and Stockholders' Deficit | 7. Convertible Preferred Stock and Stockholders’ Equity (Deficit) Convertible Preferred Stock Immediately prior to the completion of the IPO, all shares of convertible preferred stock then outstanding were automatically converted into 18,163,158 shares of common stock on a one-for-one Summary of Activity The following tables present a summary of activity for our convertible preferred stock issued and outstanding for the nine months ended September 30, 2017 (dollar amounts in thousands): Series A Convertible Preferred Stock Series B Convertible Preferred Stock Amount Shares Amount Shares Balance as of January 1, 2017 $ 17,915 12,043,108 $ 37,500 6,120,050 Accretion of dividends on convertible preferred stock 357 — — — Payment of accrued dividend to Series A convertible preferred stockholders (7,565 ) — — — Conversion of convertible preferred stock to common stock (10,707 ) (12,043,108 ) (37,500 ) (6,120,050 ) Balance as of September 30, 2017 $ — — $ — — Common Stock Immediately prior to the completion of the IPO, all shares of common stock then outstanding were converted into Class B common stock on a one-for-one 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. The holders of Class A common stock are entitled to one vote per share, and the holders of Class B common stock are entitled to ten votes per share, on all matters that are subject to stockholder vote. The holders of Class B common stock also have approval rights for certain corporate actions. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted into one share of Class A common stock upon transfer thereof, subject to certain exceptions. In addition, upon the date on which the outstanding shares of Class B common stock represent less than 10% of the aggregate voting power of our capital stock, all outstanding shares of Class B common stock shall convert automatically into Class A common stock. | 7. Convertible Preferred Stock and Stockholders’ Deficit We are authorized to issue two classes of capital stock, common stock and preferred stock. We are authorized to issue 79,709,838 total shares, consisting of 61,462,320 shares of common stock and 18,247,518 shares of Series A and Series B convertible preferred stock. Common Stock Repurchase In February 2014, we purchased, and subsequently retired, 5,725,282 shares of common stock held by common stockholders at a price of $6.1274 per share. The fair value of our common stock in February 2014 was determined to be $3.67 per share. The amount representing the fair value of the repurchased shares, $21.0 million, is included in the accompanying consolidated statement of changes in stockholders’ deficit. The difference between the amount paid and the fair value of the common stock, $14.1 million, was recognized as compensation expense. Additionally, the board of directors authorized an exercisable event that allowed for the exercise of certain stock options via a cashless exercise. We repurchased, and subsequently retired, 460,266 shares of common stock underlying these stock options from the option holders, resulting in compensation expense of $2.4 million. The compensation expense related to this transaction is included in the accompanying statement of operations for the year ended December 31, 2014 as follows (in thousands): Cost of revenue: Subscriptions, software and support $ 119 Professional services 737 Operating expenses: Sales and marketing 1,802 Research and development 515 General and administrative 13,315 $ 16,488 Stock Split In May 2015, our common stock and convertible preferred stock was split on a two-for-one per-share Common Stock At December 31, 2016, we had reserved shares of common stock for future issuance as follows: For conversion of Series A and Series B convertible preferred stock 18,163,158 Outstanding stock options 6,784,448 Outstanding preferred stock warrant 84,360 Possible future issuance under equity incentive plan 1,629,322 Total shares of common stock reserved for future issuance 26,661,288 Liquidation Rights In the event of any liquidation or dissolution of the Company, the holders of common stock are entitled to the remaining assets of the Company legally available for distribution after the payment of the full liquidation preference for all series of outstanding convertible preferred stock. Dividend and Voting Rights The holders of common stock are entitled to receive dividends if and when declared by the Company, but not until holders of convertible preferred stock have been paid a dividend on each outstanding share equal to at least 8% of the original issue price. Holders of common stock have the right to one vote per share. Convertible Preferred Stock The following table summarizes the issuances of convertible preferred stock: Name Original Issue Share Number of Shares Conversion Price per Share Series A convertible preferred stock $ 0.88903 12,043,108 $ 0.88903 Series B convertible preferred stock $ 6.1274 6,120,050 $ 6.1274 Any costs incurred in connection with the issuance of the Series A convertible preferred stock and Series B convertible preferred stock (the “Preferred Stock”) have been recorded as a reduction of the carrying amount of the Preferred Stock. Since the Preferred Stock has deemed liquidation provisions which require the shares to be redeemed upon a change in control or other deemed liquidation event, these shares are classified outside of permanent equity and carried at redemption value, which includes cumulative dividends in the case of the Series A convertible preferred stock. Dividend Rights The holders of our Preferred Stock shall be entitled to receive dividends in preference to any dividend on our common stock at the rate of 8% of the original purchase price per annum for each such series. Such dividends with respect to the Series A convertible preferred stock shall be cumulative and shall accrue from day to day until paid, whether or not the dividends are authorized or declared, whether or not funds are legally available for payment and whether or not the corporation has earnings. Such dividends with respect to the Series B convertible preferred stock shall be non-cumulative as-if Liquidation Rights Upon any liquidation (as defined in our certificate of incorporation), before any payment to holders of common stock, the holders of Preferred Stock are entitled to receive an amount per share, on a pari passu basis, equal to the greater of (1) the original purchase price per share for each such series (as adjusted for stock splits, stock dividends, recapitalizations, etc.), plus any accrued but unpaid dividends on such shares, or (2) the amount per share of Preferred Stock the holders would be entitled to receive if all shares of Preferred Stock were converted into shares of common stock. We have the option to pay the portion of the liquidation preference attributable to accrued and unpaid dividends in cash or common stock. Voting Rights Each share of Preferred Stock has voting rights equal to an equivalent number of shares of common stock into which it is convertible and votes together as one class with the common stockholders. Conversion Rights The holders of the Preferred Stock have the right to convert their shares to common stock at any time. In addition, each share of outstanding Preferred Stock shall automatically be converted into common stock immediately upon the closing of a firm commitment underwritten public offering of common stock by the Company, at a price per share of at least 1.5 times the original issue price of the Series B convertible preferred stock, or $9.18, pursuant to an effective registration statement under the Securities Act of 1933, as amended, and resulting in at least $50,000,000 in gross proceeds to the Company, or upon the vote of the requisite holders of Preferred Stock. The number of shares of common stock to which a preferred stockholder shall be entitled to upon conversion shall be the number obtained by dividing the original issue price by the applicable conversion price. No fractional shares will be issued upon conversion of Preferred Stock. Summary of Activity The following table presents a summary of activity for our Preferred Stock issued and outstanding for the years ended December 31, 2014, 2015 and 2016 (dollar amounts in thousands): Series A Convertible Series B Convertible Amount Shares Amount Shares Balance as of January 1, 2014 $ 15,341 12,043,108 $ — — Issuance of Series B convertible preferred stock, net of offering costs of $120 — — 37,380 6,120,050 Accretion of dividends on convertible preferred stock 856 — — — Accretion of issuance costs on convertible preferred stock — — 120 — Balance as of December 31, 2014 16,197 12,043,108 37,500 6,120,050 Accretion of dividends on convertible preferred stock 861 — — — Balance as of December 31, 2015 17,058 12,043,108 37,500 6,120,050 Accretion of dividends on convertible preferred stock 857 — — — Balance as of December 31, 2016 $ 17,915 12,043,108 $ 37,500 6,120,050 |
Warrants
Warrants | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | ||
Warrants | 8. Warrants We previously issued a warrant to purchase 84,360 shares of Series A convertible preferred stock in conjunction with a credit facility with a lender at an exercise price of $0.88905 per share. Immediately prior to the completion of the IPO, this warrant was converted into a warrant to purchase 84,360 shares of Class B common stock. The fair value at the time of the conversion was $1.2 million and was recorded as additional paid-in | 8. Warrants In November 2008, we issued a warrant to purchase 84,360 shares of our Series A convertible preferred stock in connection with a credit facility with a lender. The warrant has a 10-year |
Basic and Diluted Loss per Comm
Basic and Diluted Loss per Common Share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Basic and Diluted Loss per Common Share | 9. Basic and Diluted Loss per Common Share We use the two-class method have non-forfeitable rights The two-class method Under the two-class method, Diluted net income (loss) per common share is computed under the two-class method the “if-converted” method approaches (two-class or “if-converted”) as The following securities have been excluded from the calculation of weighted average common shares outstanding because the effect is anti-dilutive or performance or market conditions had not been met at the end of the period: Three Months Ended September 30, Nine Months Ended September 30, 2016 2017 2016 2017 Convertible preferred stock: Series A convertible preferred stock 12,043,108 — 12,043,108 — Series B convertible preferred stock 6,120,050 — 6,120,050 — Warrant to purchase Series A convertible preferred stock 84,360 — 84,360 — Stock options 6,699,048 7,383,928 6,699,048 7,383,928 Restricted stock units — 42,925 — 42,925 | 9. Net Loss Per Share Diluted loss per share is the same as basic loss per share for all periods presented because the effects of potentially dilutive items were anti-dilutive given our net loss. The following securities have been excluded from the calculation of weighted average common shares outstanding because the effect is anti-dilutive for the years ended December 31: 2014 2015 2016 Convertible preferred stock: Series A convertible preferred stock 12,043,108 12,043,108 12,043,108 Series B convertible preferred stock 6,120,050 6,120,050 6,120,050 Warrant to purchase Series A convertible preferred stock 84,360 84,360 84,360 Stock options 3,886,408 4,589,988 6,784,448 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Operating Leases We lease office space and equipment in our headquarters location in Reston, Virginia, as well as in the United Kingdom, France, Germany, Canada, and Australia, under non-cancellable A summary of our future minimum gross and net lease commitments by year as of December 31, 2016 is as follows (in thousands): Office Equipment 2017 $ 6,868 $ 277 2018 6,538 131 2019 6,720 6 2020 4,780 — 2021 2,466 — Thereafter 1,304 — 28,676 414 Less: minimum payments to be received from subleases (527 ) — Total $ 28,149 $ 414 We record rent expense using the total minimum rent commitment, amortized on the straight-line method over the term of the lease. The difference between monthly rental payments and recorded rent expense is charged to deferred rent. As of December 31, 2015 and 2016, deferred rent totaled $1.5 million and $2.4 million, respectively, and is included within other current liabilities and other long-term liabilities on the accompanying consolidated balance sheets. In September 2014, we entered into an agreement to sublease a certain rented facility to a subtenant. The sublease agreement commenced on November 1, 2014 and will expire when the original lease agreement expires in October 2017. We received $0.1 million for the year ended December 31, 2014 and $0.6 million for each of the years ended December 31, 2015 and 2016 in rental income from the subtenant. Total rent and lease expense was $3.8 million, $4.6 million and $6.6 million for the years ended December 31, 2014, 2015 and 2016, respectively. Other Commitments We also have entered into a non-cancellable Letters of Credit As of December 31, 2015 and 2016, we had outstanding letters of credit totaling $0.8 million and $1.3 million, respectively, in connection with securing our leased office space. All letters of credit are secured by our borrowing arrangement as described in Note 4. Legal From time to time, we are subject to legal, regulatory and other proceedings and claims that arise in the ordinary course of business. There are no issues or resolution of any matters that are expected to have a material adverse impact on our consolidated financial statements. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Segment Reporting [Abstract] | ||
Segment and Geographic Information | 10. Segment and Geographic Information The following table summarizes revenue by geography for the three and nine months ended September 30, 2016 and 2017 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2017 2016 2017 Domestic $ 23,650 $ 31,878 $ 80,715 $ 93,860 International 7,095 12,770 18,461 32,315 Total $ 30,745 $ 44,648 $ 99,176 $ 126,175 With respect to geographic information, revenue is attributed to respective geographies based on the contracting address of the customer. There were no individual foreign countries from which more than 10% of our total revenue was attributable for the three and nine months ended September 30, 2016 and 2017. Substantially all of our long-lived assets were held in the United States as of December 31, 2016 and September 30, 2017. | 11. Segment and Geographic Information The following table summarizes revenue by geography for the years ended December 31 (in thousands): 2014 2015 2016 Revenue: Domestic $ 66,285 $ 89,043 $ 107,069 International 22,711 22,161 25,854 Total $ 88,996 $ 111,204 $ 132,923 With respect to geographic information, revenues are attributed to respective geographies based on the contracting address of the customer. Revenues from external customers attributed to the United Kingdom were 10.8% of total revenue for the year ended December 31, 2014. There were no individual foreign countries from which more than 10% of our total revenues were attributable for the years ended December 31, 2015 and 2016. Substantially all of our long-lived assets were held in the United States as of December 31, 2015 and 2016. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2016 | |
Postemployment Benefits [Abstract] | |
Retirement Plans | 12. Retirement Plans We have a defined contribution 401(k) retirement and savings plan (the “401(k) Plan”) to provide retirement benefits for all eligible employees. All employees who have completed forty-five days of service and are at least twenty-one We are obligated to make plan contributions for the employees of certain of our wholly-owned foreign subsidiaries. For the years ending December 31, 2014, 2015 and 2016, we incurred $0.3 million, $0.5 million and $0.7 million, respectively, in contribution expense related to our foreign subsidiaries. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Subsequent Events [Abstract] | ||
Subsequent Events | 11. Subsequent Events In preparing our condensed consolidated financial statements, we evaluated subsequent events through November 13, 2017, which is the date that the condensed consolidated financial statements were available to be issued. In November 2017, we entered into a $20.0 million revolving line of credit with a lender. The facility matures in November 2022. We may elect whether amounts drawn on the revolving line of credit bear interest at a floating rate per annum equal to either the LIBOR or the prime rate plus an additional interest rate margin that is determined by the availability of borrowings under the revolving line of credit. The additional interest rate margin will range from 2.00% to 2.50% in the case of LIBOR advances and from 1.00% to 1.50% in the case of prime rate advances. The revolving line of credit contains an unused facility fee in an amount between 0.15% and 0.25% of the average unused portion of the revolving line of credit, which is payable quarterly. The agreement contains certain customary affirmative and negative covenants and requires us to maintain (i) an adjusted quick ratio of at least 1.35 to 1.0 and (ii) minimum adjusted EBITDA, in the amounts and for the periods set forth in the agreement. Any amounts borrowed under the credit facility are collateralized by substantially all of our assets. On October 25, 2017, our board of directors approved the grant of 689,200 restricted stock units under the 2017 Plan at a fair value of $22.27 per share to members of management and other employees. The value of these awards at the grant date was $15.3 million and will be amortized over the vesting periods. In addition, our board of directors also approved stock option grants under the 2017 Plan to purchase an aggregate of 4,000 shares of common stock at an exercise price of $22.27 per share. The restricted stock units and options vest over five years through October 25, 2022. | 13. Subsequent Events We have evaluated subsequent events through February 17, 2017, which is the date that the consolidated financial statements were available to be issued. On January 31, 2017, our board of directors approved stock option grants under the Plan to purchase an aggregate of 249,700 shares of common stock at an exercise price of $11.17 per share. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 3. Accrued Expenses Accrued expenses consist of the following: December 31, 2016 September 30, 2017 Accrued contract labor costs $ 743 $ 3,122 Accrued audit and tax expenses 358 364 Accrued reimbursable employee expenses 134 285 Accrued marketing and tradeshow expenses 111 251 Other accrued expenses 1,514 1,955 Total $ 2,860 $ 5,977 |
Significant Accounting Polici22
Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification” or “ASC”) for interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity (deficit) and cash flows. The results of operations for the current period are not necessarily indicative of the results for the full year or the results for any future periods. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in our final prospectus for our initial public offering (“IPO”) dated as of May 24, 2017 and filed with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended. | Basis of Presentation The consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Use of Estimates | Use of Estimates The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. Significant estimates embedded in the condensed consolidated financial statements include revenue recognition, income taxes and the related valuation allowance, stock-based compensation and fair value measurements for our common stock and preferred stock warrant. | Use of Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in these financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. Significant estimates embedded in the consolidated financial statements include revenue recognition, income taxes and the related valuation allowance, stock-based compensation and fair value measurements for our common stock and outstanding warrant. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Appian and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Appian and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Revenue Recognition | Revenue Recognition We generate revenue primarily through sales of subscriptions to our platform, as well as professional services. We recognize revenue when all of the following conditions are met: (1) there is persuasive evidence of an arrangement; (2) the service or product has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of related fees is reasonably assured. If collection is not reasonably assured, we defer revenue recognition until collectability becomes reasonably assured. Our arrangements do not contain general rights of return. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. Subscriptions, Software and Support Revenue Subscriptions, software and support revenue is primarily related to (1) software as a service (“SaaS”) subscriptions bundled with maintenance and support and hosting services and (2) term license subscriptions bundled with maintenance and support. To a lesser extent, we also generate revenue from the sale of perpetual software licenses and associated maintenance and support. Historically, we licensed our software primarily under perpetual licenses, but over time we transitioned from perpetual licenses to subscriptions. As a result, revenue from our perpetual software licenses was less than 1.0% of our total revenue for the three and nine months ended September 30, 2016 and September 30, 2017. We generally charge subscription fees on a per-user basis. SaaS Subscriptions Our SaaS subscription revenue is derived from customers accessing our cloud offering pursuant to contracts that are generally one to five years in length. We perform all required maintenance and support for our cloud offering and we do not separately charge customers for hosting costs. In these arrangements, our customers do not have the right to take the software on-premises and, Term License Subscriptions Our term license subscription revenue is derived from customers with on-premises installations Perpetual Licenses Our perpetual license revenue is derived from customers with perpetual licenses to our platform and associated maintenance and support contracts. We recognize revenue from perpetual licenses on the date of delivery to our customer. We sell maintenance and support to perpetual license customers separately from the perpetual licenses pursuant to agreements that generally renew annually. Maintenance and support revenue is deferred and recognized ratably over the term of the support period. Professional Services Our professional services revenue is comprised of fees for consulting services, including application development and deployment assistance and training related to our platform. Our professional services are not essential to the functionality of our platform because the platform is ready for the customer’s use immediately upon delivery and is not modified or customized in any manner. Consulting services are billed under both time-and-material and fixed-fee arrangements. standalone time-and-material contracts, standalone fixed-fee contracts, We defer recognition of revenue from work performed on pending contract modifications until the period in which the modifications are accepted and funding is approved by the customer. Costs of work performed on pending contract modifications are expensed as incurred. Multiple Element Arrangements Our multiple element arrangements are from SaaS subscriptions, term license subscriptions, and perpetual licenses that are generally sold in combination with maintenance and support service and frequently with professional services. SaaS Subscriptions For multiple element arrangements involving SaaS subscriptions that include professional services in addition to the subscription to our platform, we evaluate each element to determine whether it represents a separate unit of accounting. Because there are third-party vendors who routinely sell and provide the same professional services to our customers, our professional services are deemed to have standalone value apart from the SaaS subscription. Additionally, we offer both SaaS subscriptions and professional services on a standalone basis. Professional services revenue is therefore accounted for separately from subscription fees and recognized as the professional services are performed. We allocate revenue to the elements based on the selling price hierarchy using vendor-specific objective evidence (“VSOE”) of selling price, third-party evidence (“TPE”) of selling price, or if neither exists, best estimated selling price (“BESP”). In cases where we do not have VSOE or TPE of the elements of our arrangements, we use BESP to allocate revenue. We determine BESP for a service by considering multiple factors including, but not limited to, evaluating the weighted average of actual sales prices and other factors such as gross margin objectives, pricing practices and growth strategy. Pricing practices taken into consideration include historic contractually stated prices, volume discounts where applicable and our price lists. While we believe we can make reliable estimates regarding these matters, these estimates are inherently subjective. Once the revenue is allocated to these elements, revenue is recognized as such services are provided. Term License Subscriptions For multiple element arrangements involving term license subscriptions, maintenance and support and professional services, we do not have VSOE of fair value for the maintenance and support. Our term license subscriptions are generally not sold on a standalone basis, and therefore, we have not established VSOE of fair value for the subscriptions. Consequently, for our bundled arrangements that include certain professional services, there are two undelivered elements for which VSOE of fair value has not been established and, therefore, we utilize the combined services approach and defer all revenue until the software has been delivered and the provision of all services has commenced. We then recognize the entire fee from the arrangement ratably over the remaining period of the arrangement, assuming all other software revenue recognition criteria have been met. Perpetual Licenses For multiple element arrangements involving our perpetual software licenses, we allocate revenue to the software license arrangement by determining if VSOE of fair value exists for the undelivered elements, which are usually maintenance and support and professional services. In situations where VSOE of fair value exists for the undelivered elements, we apply the residual method whereby the fees allocated to license revenue are recognized upon delivery, the fees allocated to maintenance and support revenue are recognized over the service period and the fees allocated to professional services and training are recognized as performed. In instances where we lack VSOE of fair value for the undelivered elements, revenue is either deferred until the final element is delivered or recognized ratably over the service period when the only undelivered elements are either professional services or maintenance and support. We have VSOE for maintenance and support elements and professional services elements performed on a time and materials basis. VSOE of fair value is based upon the price charged when the same element is sold separately. In determining VSOE of fair value, we require that a substantial majority of the selling prices fall within a reasonably narrow pricing range. We reassess VSOE annually or more frequently if required. | Revenue Recognition We generate revenue primarily through sales of subscriptions to our platform, as well as professional services. We recognize revenue when all of the following conditions are met: (1) there is persuasive evidence of an arrangement; (2) the service or product has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of related fees is reasonably assured. If collection is not reasonably assured, we defer revenue recognition until collectability becomes reasonably assured. Our arrangements do not contain general rights of return. Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities. Subscriptions, Software and Support Revenue Subscriptions, software and support revenue is primarily related to (1) software as a service (“SaaS”) subscriptions bundled with maintenance and support and hosting services and (2) term license subscriptions bundled with maintenance and support. To a lesser extent, we also generate revenue from the sale of perpetual software licenses and associated maintenance and support. Historically, we licensed our software primarily under perpetual licenses, but over time we transitioned from perpetual licenses to subscriptions. As a result, revenue from our perpetual software licenses was 5.0%, 1.9%, and 0.9% of our total revenue for 2014, 2015 and 2016, respectively. We generally charge subscription fees on a per-user SaaS Subscriptions Our SaaS subscription revenue is derived from customers accessing our cloud offering pursuant to contracts that are generally one to five years in length. We perform all required maintenance and support for our cloud offering and we do not separately charge customers for hosting costs. In these arrangements, our customers do not have the right to take the software on-premises and, as a result, such arrangements are not accounted for within the scope of the software revenue guidance. Revenue from SaaS subscriptions is recognized ratably over the term of the subscription, beginning with the date our service is made available to our customer. Term License Subscriptions Our term license subscription revenue is derived from customers with on-premises Perpetual Licenses Our perpetual license revenue is derived from customers with perpetual licenses to our platform and associated maintenance and support contracts. We recognize revenue from perpetual licenses on the date of delivery to our customer. We sell maintenance and support to perpetual license customers separately from the perpetual licenses pursuant to agreements that generally renew annually. Maintenance and support revenue is deferred and recognized ratably over the term of the support period. Professional Services Our professional services revenue is comprised of fees for consulting services, including application development and deployment assistance and training related to our platform. Our professional services are not essential to the functionality of our platform because the platform is ready for the customer’s use immediately upon delivery and is not modified or customized in any manner. Consulting services are billed under both time-and-material fixed-fee time-and-material fixed-fee We defer recognition of revenue from work performed on pending contract modifications until the period in which the modifications are accepted and funding is approved by the customer. Costs of work performed on pending contract modifications are expensed as incurred. Multiple Element Arrangements Our multiple element arrangements are from SaaS subscriptions, term license subscriptions, and perpetual licenses that are generally sold in combination with maintenance and support service and frequently with professional services. SaaS Subscriptions For multiple element arrangements involving SaaS subscriptions that include professional services in addition to the subscription to our platform, we evaluate each element to determine whether it represents a separate unit of accounting. Because there are third-party vendors who routinely sell and provide the same professional services to our customers, our professional services are deemed to have standalone value apart from the SaaS subscription. Additionally, we offer both SaaS subscriptions and professional services on a standalone basis. Professional services revenue is therefore accounted for separately from subscription fees and recognized as the professional services are performed. We allocate revenue to the elements based on the selling price hierarchy using vendor-specific objective evidence, or VSOE, of selling price, third-party evidence, or TPE, of selling price, or if neither exists, best estimated selling price, or BESP. In cases where we do not have VSOE or TPE of the elements of our arrangements, we use BESP to allocate revenue. We determine BESP for a service by considering multiple factors including, but not limited to, evaluating the weighted average of actual sales prices and other factors such as gross margin objectives, pricing practices and growth strategy. Pricing practices taken into consideration include historic contractually stated prices, volume discounts where applicable and our price lists. While we believe we can make reliable estimates regarding these matters, these estimates are inherently subjective. Once the revenue is allocated to these elements, revenue is recognized as such services are provided. Term License Subscriptions For multiple element arrangements involving term license subscriptions, maintenance and support and professional services, we do not have VSOE of fair value for the maintenance and support. Our term license subscriptions are generally not sold on a standalone basis, and therefore, we have not established VSOE of fair value for the subscriptions. Consequently, for our bundled arrangements that include certain professional services, there are two undelivered elements for which VSOE of fair value has not been established and, therefore, we utilize the combined services approach and defer all revenue until the software has been delivered and the provision of all services has commenced. We then recognize the entire fee from the arrangement ratably over the remaining period of the arrangement, assuming all other software revenue recognition criteria have been met. Perpetual Licenses For multiple element arrangements involving our perpetual software licenses, we allocate revenue to the software license arrangement by determining if VSOE of fair value exists for the undelivered elements, which are usually maintenance and support and professional services. In situations where VSOE of fair value exists for the undelivered elements, we apply the residual method whereby the fees allocated to license revenue are recognized upon delivery, the fees allocated to maintenance and support revenue are recognized over the service period and the fees allocated to professional services and training are recognized as performed. In instances where we lack VSOE of fair value for the undelivered elements, revenue is either deferred until the final element is delivered or recognized ratably over the service period when the only undelivered elements are either professional services or maintenance and support. We have VSOE for maintenance and support elements and professional services elements performed on a time and materials basis. VSOE of fair value is based upon the price charged when the same element is sold separately. In determining VSOE of fair value, we require that a substantial majority of the selling prices fall within a reasonably narrow pricing range. We reassess VSOE annually or more frequently if required. |
Deferred Revenue | Deferred Revenue Deferred revenue primarily consists of amounts billed or billable in advance of revenue recognition from our subscriptions, software, and support and professional services described above. Deferred revenue is recognized as the revenue recognition criteria are met. | Deferred Revenue Deferred revenue primarily consists of amounts billed in advance of revenue recognition from our subscriptions, software, and support and professional services described above. Deferred revenue is recognized as the revenue recognition criteria are met. |
Cost of Revenue | Cost of Revenue Cost of Subscriptions, Software and Support Revenue Cost of subscriptions, software and support revenue consists primarily of fees paid to our third-party managed hosting providers and other third-party service providers, personnel costs, including payroll and benefits for our technology operations and customer support teams, and allocated facility costs and overhead. Cost of Professional Services Revenue Cost of professional services revenue includes all direct and indirect costs to deliver our professional services and training, including employee compensation for our global professional services and training personnel, travel costs, third-party contractor costs and allocated facility costs and overhead. | Cost of Revenue Cost of Subscriptions, Software and Support Revenue Cost of subscriptions, software and support revenue consists primarily of fees paid to our third-party managed hosting providers and other third-party service providers, personnel costs, including payroll and benefits for our technology operations and customer support teams, and allocated facility costs and overhead. Cost of Professional Services Revenue Cost of professional services revenue includes all direct and indirect costs to deliver our professional services and training, including employee compensation for our global professional services and training personnel, travel costs, third-party contractor costs and allocated facility costs and overhead. |
Concentration of Credit Risk | Concentration of Credit Risk Our financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. Cash deposits may be in excess of insured limits. We believe that the financial institutions that hold our cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances. With regard to our customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. We believe that no additional credit risk beyond amounts provided for collection loss are inherent in accounts receivable. Revenue generated from government agencies represented 19.4% and 28.5% of our revenue for the three and nine months ended September 30, 2016, respectively, of which the top three federal government agencies generated 13.1% and 19.5% of our revenue for the three and nine months ended September 30, 2016, respectively. Additionally, 23.1% and 18.6% of our revenue during the three and nine months ended September 30, 2016, respectively, was generated from foreign customers. Revenue generated from government agencies represented 14.2% and 15.4% of our revenue for the three and nine months ended September 30, 2017, respectively, of which the top three federal government agencies generated 7.7% and 9.1% of our revenue for the three and nine months ended September 30, 2017, respectively. Additionally, 28.6% and 25.6% of our revenue during the three and nine months ended September 30, 2017, respectively, was generated from foreign customers. Federal government agencies accounted for 17.2% and 9.1% of accounts receivable at December 31, 2016 and September 30, 2017, respectively. | Concentration of Credit Risk Our financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and trade account receivables. Cash deposits may be in excess of insured limits. We believe that the financial institutions that hold our cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances. With regard to our customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. We believe that no additional credit risk beyond amounts provided for collection loss are inherent in accounts receivable. Revenue generated from government agencies represented 34.4%, 32.7% and 26.2% of our revenue for the years ended December 31, 2014, 2015 and 2016, respectively, of which the top three federal government agencies generated 22.9%, 20.8% and 17.7% of our revenue for the years ended December 31, 2014, 2015 and 2016, respectively. Additionally, 25.5%, 19.9% and 19.5% of our revenue earned during the years ended December 31, 2014, 2015 and 2016, respectively, was generated from foreign customers. No individual customer represented more than 10% of accounts receivable at December 31, 2015. One customer accounted for 17.2% of accounts receivable at December 31, 2016. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase, as well as overnight repurchase investments, to be cash equivalents. | |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts. We regularly review the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness and current economic trends. If the financial condition of our customers were to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be required and would increase bad debt expense. To date, our allowance and related bad debt write-offs have been nominal. There was no change in the allowance for doubtful accounts from December 31, 2016 to September 30, 2017. | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts. We regularly review the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness and current economic trends. If the financial condition of our customers were to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be required and would increase bad debt expense. To date, our allowance and related bad debt write-offs have been nominal. There was no change in the allowance for doubtful accounts from December 31, 2015 to December 31, 2016. |
Deferred Commissions | Deferred Commissions Deferred commissions are the incremental costs that are directly associated with subscription agreements with customers and consist of sales commissions paid to our direct sales force. Commissions are considered direct and incremental and as such are deferred and amortized over the terms of the related customer contracts consistent with the related revenue. Amortization of deferred commissions is included in sales and marketing expense in the accompanying condensed consolidated statements of operations. Commission expense was $1.8 million and $5.4 million for the three and nine months ended September 30, 2016, respectively. Commission expense was $3.2 million and $8.5 million for the three and nine months ended September 30, 2017, respectively. | Deferred Commissions Deferred commissions are the incremental costs that are directly associated with subscription agreements with customers and consist of sales commissions paid to our direct sales force. Commissions are considered direct and incremental and as such are deferred and amortized over the terms of the related customer contracts consistent with the related revenue. Amortization of deferred commissions is included in sales and marketing expense in the accompanying consolidated statements of operations. Commission expense was $3.8 million, $4.6 million, and $6.5 million for the years ended December 31, 2014, 2015 and 2016, respectively. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Significant additions or improvements extending the useful life of an asset are capitalized, while repairs and maintenance costs which do not significantly improve the related assets or extend their useful lives are charged to expense as incurred. Asset Category Useful Life (in years) Computer software 3 Computer hardware 3 Equipment 5 Office furniture and fixtures 10 Leasehold improvements Shorter of useful life of assets or lease term | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets and certain intangible assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable through undiscounted cash flows from the use of the assets. If such assets are considered to be impaired, the assets are written down to their estimated fair value. No indicators of impairment were identified for the years ended December 31, 2014, 2015 and 2016. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of December 31, 2016 and September 30, 2017 because of the relatively short duration of these instruments. The carrying value of our long-term debt as of December 31, 2016 approximated fair value given interest rates for similar debt instruments available to the Company. We use a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, • Level 1. • Level 2. • Level 3. Assets and Liabilities Measured at Fair Value on a Recurring Basis We evaluate our financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. After the reclassification of the convertible preferred stock warrant in May 2017, we did not have any assets or liabilities subject to fair value measurements as of September 30, 2017. See Note 8 for further discussion of the warrant reclassification. The following table summarizes the conclusions reached as of December 31, 2016 (in thousands): December 31, Level 1 Level 2 Level 3 Liabilities: Series A convertible preferred stock warrant(1) $ 850 $ — $ — $ 850 $ 850 $ — $ — $ 850 (1) In order to determine the fair value of the convertible preferred stock warrant, we used the Black-Scholes option pricing model (“OPM”). Significant inputs for the OPM included an estimate of the fair value of the Series A convertible preferred stock, the remaining contractual life of the warrant, an estimate of the timing of a liquidity event, a risk-free rate of interest and an estimate of our stock volatility using the volatilities of guideline peer companies. Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs There were no changes in our Level 3 instruments measured at fair value on a recurring basis during the three months ended September 30, 2016 and 2017. The following table presents the changes in our Level 3 instruments measured at fair value on a recurring basis during the nine months ended September 30, 2016 and 2017 (in thousands): Nine Months Ended September 30, 2016 2017 Balance as of January 1 $ 650 $ 850 Change in fair value of warrant liability 200 341 Reclassification of warrant liability to equity — (1,191 ) Balance as of September 30 $ 850 $ — | Fair Value of Financial Instruments The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of December 31, 2015 and 2016 because of the relatively short duration of these instruments. The carrying value of our long-term debt approximates fair value given interest rates for similar debt instruments available to the Company. We use a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring • Level 1. • Level 2. • Level 3. Assets and Liabilities Measured at Fair Value on a Recurring Basis We evaluate our financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. The following table summarizes the conclusions reached as of December 31 (in thousands): 2015 Level 1 Level 2 Level 3 Liabilities: Series A convertible preferred stock warrant(1) $ 650 — — $ 650 $ 650 $ — $ — $ 650 2016 Level 1 Level 2 Level 3 Liabilities: Series A convertible preferred stock warrant(1) $ 850 — — $ 850 $ 850 $ — $ — $ 850 (1) In order to determine the fair value of the convertible preferred stock warrant, we used an option pricing model (“OPM”). Significant inputs for the OPM included an estimate of the fair value of the Series A convertible preferred stock, the remaining contractual life of the warrant, an estimate of the timing of a liquidity event, a risk-free rate of interest and an estimate of our stock volatility using the volatilities of guideline peer companies. Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs The following table presents the changes in our Level 3 instruments measured at fair value on a recurring basis during the years ended December 31 (in thousands): Series A Convertible 2014 2015 2016 Balance as of January 1 $ — $ 351 $ 650 Change in fair value of warrant liability 351 299 200 Balance as of December 31 $ 351 $ 650 $ 850 The fair value of the warrant as of December 31, 2013 was de minimis and therefore not recorded as of January 1, 2014. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation expense related to stock-based awards based on the estimated fair value of the award on the grant date. We calculate the fair value of stock options using the Black-Scholes OPM. For service-based awards, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. For performance-based awards, stock-based compensation expense is recognized using the accelerated attribution method, based on the probability of satisfying the performance condition. For awards that contain market conditions, compensation expense is measured using a Monte Carlo simulation model and recognized using the accelerated attribution method over the derived service period based on the expected market performance as of the grant date. For restricted stock units, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. As discussed in “—Recent Accounting Pronouncements,” we have elected to early adopt Accounting Standards Update (“ASU”) No. 2016-9, which, Emerging Growth Company Status We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, we will not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. | Stock-Based Compensation We account for stock-based compensation expense related to stock-based awards based on the estimated fair value of the award on the grant date. We calculate the fair value of stock options using the Black-Scholes OPM. For service-based awards, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. For performance-based awards, stock-based compensation expense is recognized using the accelerated attribution method, based on the probability of satisfying the performance condition. For awards that contain market conditions, compensation expense is measured using a Monte Carlo simulation model and recognized using the accelerated attribution method over the derived service period based on the expected market performance as of the grant date. All of our currently outstanding awards require the satisfaction of both a service condition and a liquidity event condition. The liquidity condition is satisfied upon the occurrence of a qualifying event, defined as a change of control transaction or the effective date of our IPO. No compensation expense will be recognized until the performance condition is achieved, at which time the cumulative compensation expense using the accelerated attribution method from the service start date will be recognized. As discussed in “—Recent Accounting Pronouncements,” we have elected to early adopt Accounting Standards Update No. 2016-09, |
Basic and Diluted Loss per Common Share | Basic and Diluted Loss per Common Share We use the two-class non-forfeitable two-class Under the two-class Diluted net income per common share is computed under the two-class “if-converted” (two-class “if-converted”) Due to net losses for the years ended December 31, 2014, 2015 and 2016, basic and diluted loss per share were the same, as the effect of potentially dilutive securities would have been anti-dilutive. | |
Income Taxes | Income Taxes We use the asset and liability method of accounting for income taxes in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be reversed. We recognize the effect on deferred tax assets and liabilities of a change in tax rates as income and expense in the period that includes the enactment date. A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. We recognize the tax benefit of an uncertain tax position only if it is more likely than not the position is sustainable upon examination by the taxing authority. We measure the tax benefit recognized as the largest amount of benefit which is more likely than not to be realized upon settlement with the taxing authority. We recognize penalties and interest related to unrecognized tax benefits as income tax expense. We calculate the current and deferred income tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years and record adjustments based on filed income tax returns when identified. The amount of income taxes paid is subject to examination by U.S. federal, state and foreign tax authorities. The estimate of the potential outcome of any uncertain tax issue is subject to our assessment of relevant risks, facts and circumstances existing at that time. To the extent the assessment of such tax position changes, we record the change in estimate in the period in which we make that determination. Due to changing economic and political environments in the United States and abroad, we may be impacted by possible tax reform or similar changes in tax law. Specifically, certain proposed changes in the United States may impact the U.S. taxation of our foreign earnings and adversely impact our effective tax rate. However, it is not possible to estimate the impact of such changes at this time and we continue to monitor these changes. | |
Segment Reporting | Segment Reporting Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating financial performance. Our CODM is our chief executive officer, who reviews financial information presented on a companywide basis for purposes of allocating resources and evaluating financial performance. As such, our operations constitute a single operating segment and one reportable segment. | |
Foreign Currency | Foreign Currency Our operations located outside of the United States where the local currency is the functional currency are translated into U.S. dollars using the current rate method. Results of operations are translated at the average rate of exchange for the period. Assets and liabilities are translated at the closing rates on the balance sheet date. Gains and losses on translation of these accounts are accumulated and reported as a separate component of stockholders’ deficit and other comprehensive income (loss). Gains and losses on foreign currency transactions are recognized in the accompanying consolidated statements of operations as a component of other expense, net. Transaction gains and losses from transactions denominated in foreign currencies resulted in net transaction losses of $1.7 million, $1.3 million and $1.5 million for the years ended December 31, 2014, 2015 and 2016, respectively. | |
Research and Development | Research and Development Research and development expenses include payroll, employee benefits, and other headcount-related costs associated with product development. Our product utilizes a common codebase, whether accessed by customers via the cloud or via an on-premises external-use | |
Advertising | Advertising We expense advertising costs as they are incurred. Advertising expenses totaled $0.5 million for each of the years ended December 31, 2014 and 2015 and $1.4 million for the year ended December 31, 2016. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which Subtopic 205-40 issued. ASU 2014-15 was In April 2015, the FASB issued ASU No. 2015-3, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-3”), which ASU 2015-3, the with line-of-credit arrangements ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit 2015-15”). ASU 2015-3 2015-15 In April 2015, the FASB issued ASU No. 2015-5, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (“ASU 2015-5”), which ASU 2015-5 was In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740) (“ASU 2015-17”), which ASU 2015-17 ASU 2015-17 did In March 2016, the FASB issued ASU No. 2016-9, Improvements to Employee Share-Based Payment Accounting (Topic 718) (“ASU 2016-9”), which ASU 2016-9 ASU 2016-9 did Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-9, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-9”), which ASU 2014-9 provides ASU 2014-9 also ASU No. 2016-8, Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net) (“ASU 2016-8”), which ASU 2014-9. In ASU No. 2016-10, Identifying Performance Obligations and Licensing (“ASU 2016-10”), which ASU 2014-9. In 2016-12, Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), which We currently plan to adopt the new standard using the full retrospective approach; however, the decision regarding the adoption method has not been finalized. Our final determination will depend on a number of factors such as the significance of the impact of the new standard on our financial results, system readiness, including that of software procured from third-party providers, and our ability to accumulate and analyze the information necessary to assess the impact on prior period financial statements, as necessary. We are in the initial stages of our evaluation of the impact of the new standard on our accounting policies, processes, and system requirements. We have assigned internal resources in addition to the engagement of third-party service providers to assist in the evaluation. Furthermore, we have made and will continue to make investments in systems to enable timely and accurate reporting under the new standard. While we continue to assess all potential impacts under the new standard there is the potential for significant impacts to the timing of recognition of revenue, particularly term license subscriptions and professional services revenue. We also expect an impact to our accounting for contract acquisition costs, both with respect to the amounts that will be capitalized as well as the period of amortization. Under current industry-specific software revenue recognition guidance, we have historically concluded that we did not have VSOE of fair value of the undelivered services related to term license subscriptions, and accordingly, have recognized term license subscriptions and related services ratably over the subscription term. Professional services included in an arrangement with subscription revenue has also been recognized ratably over the subscription term. The new standard, which does not retain the concept of VSOE, requires an evaluation of whether term license subscriptions and related services, including professional services, are distinct performance obligations and therefore should be separately recognized at a point in time or over time. Depending on the outcome of our evaluation, the timing of when revenue is recognized could change significantly for term license subscriptions and professional services under the new standard. In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) (“ASU 2016-2”), which ASU 2016-2 also ASU 2016-2 will In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which ASU 2016-15 will ASU 2016-15 is | Recent Accounting Pronouncements We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, we will not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. Adopted In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity ’ s Ability to Continue as a Going Concern 2014-15”), 205-40 2014-15 In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs 2015-03”), 2015-03, line-of-credit No. 2015-15. In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement 2015-05”), 2015-05 In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740) 2015-17”), 2015-17 2015-17 In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) 2016-09”), 2016-09 2016-09 Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) 2014-09”), 2014-09 2014-09 No. 2016-08, Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net) 2016-08”), 2014-09. No. 2016-10, Identifying Performance Obligations and Licensing 2016-10”), 2014-09. No. 2016-12, Narrow-Scope Improvements and Practical Expedients 2016-12”), We currently plan to adopt the new standard using the full retrospective approach; however, the decision regarding the adoption method has not been finalized. Our final determination will depend on a number of factors such as the significance of the impact of the new standard on our financial results, system readiness, including that of software procured from third-party providers, and our ability to accumulate and analyze the information necessary to assess the impact on prior period financial statements, as necessary. We are in the initial stages of our evaluation of the impact of the new standard on our accounting policies, processes, and system requirements. We have assigned internal resources in addition to the engagement of third-party service providers to assist in the evaluation. Furthermore, we have made and will continue to make investments in systems to enable timely and accurate reporting under the new standard. While we continue to assess all potential impacts under the new standard there is the potential for significant impacts to the timing of recognition of revenue, particularly term license subscriptions and professional services revenue. We also expect an impact to our accounting for contract acquisition costs, both with respect to the amounts that will be capitalized as well as the period of amortization. Under current industry-specific software revenue recognition guidance, we have historically concluded that we did not have VSOE of fair value of the undelivered services related to term license subscriptions, and accordingly, have recognized term license subscriptions and related services ratably over the subscription term. Professional services included in an arrangement with subscription revenue has also been recognized ratably over the subscription term. The new standard, which does not retain the concept of VSOE, requires an evaluation of whether term license subscriptions and related services, including professional services, are distinct performance obligations and therefore should be separately recognized at a point in time or over time. Depending on the outcome of our evaluation, the timing of when revenue is recognized could change significantly for term license subscriptions and professional services under the new standard. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) 2016-02”), 2016-02 2016-02 In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments 2016-15”), 2016-15 2016-15 |
Initial Public Offering | Initial Public Offering In May 2017, we completed an IPO in which we sold 7,187,500 shares of our newly-authorized Class A common stock at an initial price to the public of $12.00 per share. We received net proceeds of $77.8 million, after deducting underwriting discounts and commissions and offering expenses paid and payable by us, from sales of our shares in the IPO. Immediately prior to the completion of the IPO, (1) all shares of common stock then outstanding were converted into Class B common stock on a one-for-one one-for-one Deferred offering costs of $2.4 million, consisting of legal, accounting and other fees and costs related to our IPO, were recorded to additional paid-in |
Significant Accounting Polici23
Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Schedule of Additions or Improvements Extending Useful Life | Significant additions or improvements extending the useful life of an asset are capitalized, while repairs and maintenance costs which do not significantly improve the related assets or extend their useful lives are charged to expense as incurred. Asset Category Useful Life (in years) Computer software 3 Computer hardware 3 Equipment 5 Office furniture and fixtures 10 Leasehold improvements Shorter of useful life of assets or lease term | |
Summary of Liabilities Fair Value Measurements | The following table summarizes the conclusions reached as of December 31 (in thousands): 2015 Level 1 Level 2 Level 3 Liabilities: Series A convertible preferred stock warrant(1) $ 650 — — $ 650 $ 650 $ — $ — $ 650 2016 Level 1 Level 2 Level 3 Liabilities: Series A convertible preferred stock warrant(1) $ 850 — — $ 850 $ 850 $ — $ — $ 850 (1) In order to determine the fair value of the convertible preferred stock warrant, we used an option pricing model (“OPM”). Significant inputs for the OPM included an estimate of the fair value of the Series A convertible preferred stock, the remaining contractual life of the warrant, an estimate of the timing of a liquidity event, a risk-free rate of interest and an estimate of our stock volatility using the volatilities of guideline peer companies. | |
FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock | The following table presents the changes in our Level 3 instruments measured at fair value on a recurring basis during the nine months ended September 30, 2016 and 2017 (in thousands): Nine Months Ended September 30, 2016 2017 Balance as of January 1 $ 650 $ 850 Change in fair value of warrant liability 200 341 Reclassification of warrant liability to equity — (1,191 ) Balance as of September 30 $ 850 $ — | The following table presents the changes in our Level 3 instruments measured at fair value on a recurring basis during the years ended December 31 (in thousands): Series A Convertible 2014 2015 2016 Balance as of January 1 $ — $ 351 $ 650 Change in fair value of warrant liability 351 299 200 Balance as of December 31 $ 351 $ 650 $ 850 |
Summary of Liabilities Fair Value Measurements | The following table summarizes the conclusions reached as of December 31, 2016 (in thousands): December 31, Level 1 Level 2 Level 3 Liabilities: Series A convertible preferred stock warrant(1) $ 850 $ — $ — $ 850 $ 850 $ — $ — $ 850 (1) In order to determine the fair value of the convertible preferred stock warrant, we used the Black-Scholes option pricing model (“OPM”). Significant inputs for the OPM included an estimate of the fair value of the Series A convertible preferred stock, the remaining contractual life of the warrant, an estimate of the timing of a liquidity event, a risk-free rate of interest and an estimate of our stock volatility using the volatilities of guideline peer companies. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consisted of the following as of December 31 (in thousands): 2015 2016 Computer software $ 1,562 $ 1,701 Computer hardware 1,201 1,408 Leasehold improvements 3,555 4,098 Office furniture and fixtures 386 464 Equipment 96 116 6,800 7,787 Less: accumulated depreciation (3,908 ) (4,686 ) Property and equipment, net $ 2,892 $ 3,101 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Components of net (loss) income before income taxes | For the years ended December 31, 2014, 2015 and 2016, our net (loss) income before income taxes was comprised of the following (in thousands): 2014 2015 2016 Domestic $ (11,026 ) $ 1,079 $ (4,524 ) Foreign (4,829 ) (7,688 ) (9,620 ) Total $ (15,855 ) $ (6,609 ) $ (14,144 ) |
Schedule of Income Tax Expense (Benefit) | For the years ended December 31, 2014, 2015, and 2016, our income tax expense (benefit) was comprised of the following (in thousands): 2014 2015 2016 Current: Federal $ 430 $ 390 $ (627 ) State 128 62 (200 ) Foreign 247 217 266 Total current expense (benefit) 805 669 (561 ) Deferred: Federal 325 (334 ) (922 ) State 51 43 (230 ) Foreign 23 — 30 Total deferred expense (benefit) 399 (291 ) (1,122 ) Total income tax expense (benefit) $ 1,204 $ 378 $ (1,683 ) |
Scedule of Provision for Income Taxes Differs from Computed Applying Federal Statutory Income Tax Rate | For the years ended December 31, 2014, 2015, and 2016, the provision for income taxes differs from the amount computed by applying the federal statutory income tax rates to our loss before the provision for income taxes, as follows: 2014 2015 2016 U.S. federal statutory tax rate 34.0 % 34.0 % 34.0 % State tax expense (0.8 ) (0.9 ) 1.4 Expense on purchase of common stock (30.2 ) — — Foreign rate differential (7.9 ) (29.4 ) (17.8 ) Nondeductible expenses (1.5 ) (4.1 ) (2.3 ) Tax credits 3.2 10.0 6.5 Unrecognized tax benefits (0.5 ) (1.8 ) (0.2 ) Other (0.5 ) (1.9 ) (0.2 ) Change in valuation allowance (3.4 ) (11.5 ) (9.6 ) Total (7.6 )% (5.6 )% 11.8 % |
Schedule of Significant Components of Deferred Tax Assets and Liabilities | As of December 31, 2015 and 2016, significant components of our deferred tax assets and liabilities are as follows (in thousands): 2015 2016 Deferred tax assets: Accrued vacation $ 482 $ 529 Bad debt 157 159 Deferred revenue 3,173 2,176 Deferred rent 603 834 Tax credits 1,381 2,401 Net operating losses 1,289 2,939 Other 209 929 Gross deferred tax assets 7,294 9,967 Less: Valuation allowance (1,283 ) (2,642 ) Total deferred tax assets 6,011 7,325 Deferred tax liabilities: Depreciation (491 ) (349 ) Unbilled receivables (1,835 ) (491 ) Prepaid expenses (4,579 ) (6,505 ) Total deferred tax liabilities (6,905 ) (7,345 ) Net deferred tax liability $ (894 ) $ (20 ) |
Schedule of Activity Related to Unrecognized Tax Benefit | recognized. The following table summarizes the activity related to our unrecognized tax benefit from January 1, 2014 to December 31, 2016 (in thousands): Balance as of January 1, 2014 $ 218 Additions for tax positions in current years 68 Additions for tax positions in prior years — Reductions due to lapse in statutes of limitations — Settlements — Balance as of December 31, 2014 286 Additions for tax positions in current years 98 Additions for tax positions in prior years — Reductions due to lapse in statutes of limitations — Settlements — Balance as of December 31, 2015 384 Additions for tax positions in current years 171 Additions for tax positions in prior years — Reductions due to lapse in statutes of limitations (136 ) Settlements — Balance as of December 31, 2016 $ 419 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Summary of Estimate the Fair Value of Stock Options Granted | The following table summarizes the assumptions used to estimate the fair value of stock options granted during the three and nine months ended September 30, 2016 and 2017: Three Months Ended September 30, Nine Months Ended September 30, 2016 2017 2016 2017 Risk-free interest rate 1.3% 1.9% - 2.1% 1.3% - 1.5% 1.9% - 2.2% Expected term (in years) 6.5 6.5 6.5 6.5 Expected volatility 41.6% 38.6% 41.2% - 42.0% 38.6% - 40.6% Expected dividend yield — % — % — % — % | The following table summarizes the assumptions used to estimate the fair value of stock options granted during the years ended December 31: 2014 2015 2016 Risk-free interest rate 1.8% - 2.1% 1.7% - 1.9% 1.3% - 1.5% Expected term (in years) 6.5 6.5 6.5 Expected volatility 44.7% - 46.0% 39.7% - 44.4% 40.9% - 42.0% Expected dividend yield 0% 0% 0% |
Summary of the Stock Option Activity | The following table summarizes the stock option activity for the nine months ended September 30, 2017: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2017 6,784,448 $ 4.65 6.5 $ 44,259 Granted 1,252,200 11.89 Exercised (556,220 ) 1.19 8,386 Canceled (96,500 ) 6.30 Outstanding at September 30, 2017 7,383,928 6.16 6.7 164,688 Exercisable at September 30, 2017 2,992,648 1.85 3.8 79,636 | The following table summarizes the stock option activity for the year ended December 31, 2016: Number of Weighted Weighted Aggregate (in thousands) Outstanding at January 1, 2016 4,589,988 $ 2.22 6.0 $ 24,239 Granted 2,375,080 9.30 Cancelled (180,620 ) 4.22 Outstanding at December 31, 2016 6,784,448 4.65 6.5 44,259 Exercisable at December 31, 2016 — $ — — $ — |
Schedule of Stock-based Compensation Expense Included in Condensed Consolidated Statements of Operations | Stock-based compensation expense for restricted stock units, stock options and issuances of common stock is included in the following line items in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2017 (in thousands): Nine Months Ended Three Months Ended Cost of revenue Subscriptions, software and support $ 484 $ 80 Professional services 1,126 142 Operating expenses Sales and marketing 2,782 359 Research and development 2,458 256 General and administrative 4,069 737 Total stock-based compensation expense $ 10,919 $ 1,574 | The compensation expense related to this transaction is included in the accompanying statement of operations for the year ended December 31, 2014 as follows (in thousands): Cost of revenue: Subscriptions, software and support $ 119 Professional services 737 Operating expenses: Sales and marketing 1,802 Research and development 515 General and administrative 13,315 $ 16,488 |
Schedule of Restricted Stock Unit Activity | The following table summarizes the restricted stock unit activity for the nine months ended September 30, 2017: Number of Weighted Non-vested — $ — Granted 47,855 20.38 Vested (4,930 ) 20.24 Canceled — — Non-vested 42,925 20.40 | |
Schedule of Components of Stock-based Compensation Expense | The following table summarizes the components of our stock-based compensation expense for the three and nine months ended September 30, 2017 (in thousands): Nine Months Ended Three Months Ended Stock-based compensation expense related to stock option modifications $ 2,394 $ — Cumulative stock-based compensation expense related to stock options recorded upon effectiveness of our IPO 6,236 — Post-IPO 2,025 1,440 Stock-based compensation expense related to the issuance of common stock to directors 130 — Stock-based compensation expense related to restricted stock units 134 134 Total stock-based compensation expense $ 10,919 $ 1,574 |
Convertible Preferred Stock a27
Convertible Preferred Stock and Stockholders' Deficit (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Equity [Abstract] | ||
Schedule of Reserved Shares of Common Stock for Future Issuance | At December 31, 2016, we had reserved shares of common stock for future issuance as follows: For conversion of Series A and Series B convertible preferred stock 18,163,158 Outstanding stock options 6,784,448 Outstanding preferred stock warrant 84,360 Possible future issuance under equity incentive plan 1,629,322 Total shares of common stock reserved for future issuance 26,661,288 | |
Summary of Activity for Convertible Preferred Stock Issued and Outstanding | The following tables present a summary of activity for our convertible preferred stock issued and outstanding for the nine months ended September 30, 2017 (dollar amounts in thousands): Series A Convertible Preferred Stock Series B Convertible Preferred Stock Amount Shares Amount Shares Balance as of January 1, 2017 $ 17,915 12,043,108 $ 37,500 6,120,050 Accretion of dividends on convertible preferred stock 357 — — — Payment of accrued dividend to Series A convertible preferred stockholders (7,565 ) — — — Conversion of convertible preferred stock to common stock (10,707 ) (12,043,108 ) (37,500 ) (6,120,050 ) Balance as of September 30, 2017 $ — — $ — — | The following table presents a summary of activity for our Preferred Stock issued and outstanding for the years ended December 31, 2014, 2015 and 2016 (dollar amounts in thousands): Series A Convertible Series B Convertible Amount Shares Amount Shares Balance as of January 1, 2014 $ 15,341 12,043,108 $ — — Issuance of Series B convertible preferred stock, net of offering costs of $120 — — 37,380 6,120,050 Accretion of dividends on convertible preferred stock 856 — — — Accretion of issuance costs on convertible preferred stock — — 120 — Balance as of December 31, 2014 16,197 12,043,108 37,500 6,120,050 Accretion of dividends on convertible preferred stock 861 — — — Balance as of December 31, 2015 17,058 12,043,108 37,500 6,120,050 Accretion of dividends on convertible preferred stock 857 — — — Balance as of December 31, 2016 $ 17,915 12,043,108 $ 37,500 6,120,050 The following table summarizes the issuances of convertible preferred stock: Name Original Issue Share Number of Shares Conversion Price per Share Series A convertible preferred stock $ 0.88903 12,043,108 $ 0.88903 Series B convertible preferred stock $ 6.1274 6,120,050 $ 6.1274 |
Basic and Diluted Loss per Co28
Basic and Diluted Loss per Common Share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Summary of Securities Excluded From Calculation of Weighted Average Common Shares Outstanding | The following securities have been excluded from the calculation of weighted average common shares outstanding because the effect is anti-dilutive or performance or market conditions had not been met at the end of the period: Three Months Ended September 30, Nine Months Ended September 30, 2016 2017 2016 2017 Convertible preferred stock: Series A convertible preferred stock 12,043,108 — 12,043,108 — Series B convertible preferred stock 6,120,050 — 6,120,050 — Warrant to purchase Series A convertible preferred stock 84,360 — 84,360 — Stock options 6,699,048 7,383,928 6,699,048 7,383,928 Restricted stock units — 42,925 — 42,925 | The following securities have been excluded from the calculation of weighted average common shares outstanding because the effect is anti-dilutive for the years ended December 31: 2014 2015 2016 Convertible preferred stock: Series A convertible preferred stock 12,043,108 12,043,108 12,043,108 Series B convertible preferred stock 6,120,050 6,120,050 6,120,050 Warrant to purchase Series A convertible preferred stock 84,360 84,360 84,360 Stock options 3,886,408 4,589,988 6,784,448 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary Future Minimum Gross and Net Lease commitments | A summary of our future minimum gross and net lease commitments by year as of December 31, 2016 is as follows (in thousands): Office Equipment 2017 $ 6,868 $ 277 2018 6,538 131 2019 6,720 6 2020 4,780 — 2021 2,466 — Thereafter 1,304 — 28,676 414 Less: minimum payments to be received from subleases (527 ) — Total $ 28,149 $ 414 |
Segment and Geographic Inform30
Segment and Geographic Information (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Segment Reporting [Abstract] | ||
Summary of Revenue By Geography | The following table summarizes revenue by geography for the three and nine months ended September 30, 2016 and 2017 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2017 2016 2017 Domestic $ 23,650 $ 31,878 $ 80,715 $ 93,860 International 7,095 12,770 18,461 32,315 Total $ 30,745 $ 44,648 $ 99,176 $ 126,175 | The following table summarizes revenue by geography for the years ended December 31 (in thousands): 2014 2015 2016 Revenue: Domestic $ 66,285 $ 89,043 $ 107,069 International 22,711 22,161 25,854 Total $ 88,996 $ 111,204 $ 132,923 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following: December 31, 2016 September 30, 2017 Accrued contract labor costs $ 743 $ 3,122 Accrued audit and tax expenses 358 364 Accrued reimbursable employee expenses 134 285 Accrued marketing and tradeshow expenses 111 251 Other accrued expenses 1,514 1,955 Total $ 2,860 $ 5,977 |
Significant Accounting Polici32
Significant Accounting Policies - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
May 31, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)Agency | Sep. 30, 2016USD ($)Agency | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($)Agency | Dec. 31, 2016USD ($)AgencyCustomerSegment | Dec. 31, 2015USD ($)AgencyCustomer | Dec. 31, 2014USD ($)Agency | |
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Percentage of license revenue | 1.00% | 1.00% | 1.00% | 1.00% | 0.90% | 1.90% | 5.00% | |
Change in allowance for doubtful accounts | $ 0 | $ 0 | $ 0 | |||||
Commission expense | $ 3,200,000 | $ 1,800,000 | 8,500,000 | $ 5,400,000 | $ 6,500,000 | 4,600,000 | $ 3,800,000 | |
Number of Reportable Segments | Segment | 1 | |||||||
Number of Operating Segments | Segment | 1 | |||||||
Transaction gains and losses | $ (1,500,000) | (1,300,000) | (1,700,000) | |||||
Advertising expenses | $ 1,400,000 | $ 500,000 | $ 500,000 | |||||
Net proceeds from initial public offering | 80,213,000 | $ 0 | ||||||
Deferred offering costs | $ 2,400,000 | $ 2,400,000 | ||||||
Customer Concentration Risk | Sales Revenue, Net | Foreign Customers | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 28.60% | 23.10% | 25.60% | 18.60% | 19.50% | 19.90% | 25.50% | |
Customer Concentration Risk | Sales Revenue, Net | Government Agencies | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 14.20% | 19.40% | 15.40% | 28.50% | 26.20% | 32.70% | 34.40% | |
Customer Concentration Risk | Sales Revenue, Net | Federal Government Agencies | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 7.70% | 13.10% | 9.10% | 19.50% | 17.70% | 20.80% | 22.90% | |
Number of federal government agencies | Agency | 3 | 3 | 3 | 3 | 3 | 3 | ||
Customer Concentration Risk | Accounts Receivable | Federal Government Agencies | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 9.10% | 17.20% | 17.20% | 10.00% | ||||
Number of customers | Customer | 1 | 0 | ||||||
Minimum | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
SaaS Subscriptions contracts term | 1 year | 1 year | ||||||
Term license subscription contracts term | 1 year | 1 year | ||||||
Maximum | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
SaaS Subscriptions contracts term | 5 years | 5 years | ||||||
Term license subscription contracts term | 5 years | 5 years | ||||||
Class A Common Stock | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Net proceeds from initial public offering | $ 77,800,000 | |||||||
Class B Common Stock | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Preferred stock conversion basis | 1 | |||||||
IPO | Class A Common Stock | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Issuance of common stock from initial public offering, net of issuance costs, Shares | shares | 7,187,500 | |||||||
Shares issued price per share | $ / shares | $ 12 |
Significant Accounting Polici33
Significant Accounting Policies - Property and Equipment Estimated Useful Lives (Detail) | 12 Months Ended |
Dec. 31, 2016 | |
Computer Software | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Computer Hardware | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Equipment | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Useful life | Shorter of useful life of assets or lease term |
Significant Accounting Polici34
Significant Accounting Policies - Summary of Liabilities Fair Value Measurements (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value measurements, Liabilities | $ 850 | $ 650 | ||||
Level 3 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value measurements, Liabilities | $ 0 | 850 | $ 850 | 650 | $ 351 | $ 0 |
Series A Convertible Preferred Stock Warrant | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value measurements, Liabilities | 850 | 650 | ||||
Series A Convertible Preferred Stock Warrant | Level 3 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value measurements, Liabilities | $ 850 | $ 650 |
Significant Accounting Polici35
Significant Accounting Policies - Summary of Changes in Level 3 Instruments Measured at Fair Value On Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning Balance | $ 850 | $ 650 | $ 650 | ||
Ending Balance | 850 | $ 650 | |||
Level 3 | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning Balance | 850 | 650 | 650 | 351 | $ 0 |
Change in fair value of warrant liability | 341 | 200 | 200 | 299 | 351 |
Reclassification of warrant liability to equity | (1,191) | 0 | |||
Ending Balance | $ 0 | $ 850 | $ 850 | $ 650 | $ 351 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 7,787 | $ 6,800 | |
Less: accumulated depreciation | (4,686) | (3,908) | |
Property and equipment, net | $ 2,737 | 3,101 | 2,892 |
Computer Software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 1,701 | 1,562 | |
Computer Hardware | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 1,408 | 1,201 | |
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 4,098 | 3,555 | |
Furniture and Fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 464 | 386 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 116 | $ 96 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||||
Depreciation and amortization expense | $ 673 | $ 567 | $ 764 | $ 763 | $ 610 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Dec. 31, 2015 | Jan. 31, 2016 | Mar. 31, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Apr. 30, 2017 |
Line of Credit Facility [Line Items] | |||||||
Loss on extinguishment of debt | $ 384,000 | $ 0 | |||||
Revolving Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Credit facility | $ 10,000,000 | $ 5,000,000 | |||||
Credit facility expiration date | Jun. 30, 2016 | ||||||
Maximum revolving line of credit | $ 3,500,000 | ||||||
Advances against line of credit | $ 0 | $ 0 | |||||
Term Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Credit facility | $ 20,000,000 | $ 10,000,000 | 20,000,000 | ||||
Credit facility expiration date | Jan. 31, 2020 | Mar. 31, 2019 | |||||
Interest rate | 5.00% | ||||||
Prepayment fee advanced through month 12 | 1.00% | ||||||
Prepayment fee during months 13 through 24 | 0.50% | ||||||
Prepayment fee thereafter | 0.00% | ||||||
Line of credit, outstanding borrowings | 0 | ||||||
Term Loan | Other (Income) Expense | |||||||
Line of Credit Facility [Line Items] | |||||||
Loss on extinguishment of debt | $ 400,000 | ||||||
Subordinated Term Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Credit facility | $ 10,000,000 | ||||||
Prime Rate | Revolving Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Interest rate | 0.75% | ||||||
Prime Rate | Term Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Interest rate | 1.25% |
Income Taxes - Components of ne
Income Taxes - Components of net (loss) income before income taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||||
Domestic | $ (4,524) | $ 1,079 | $ (11,026) | ||||
Foreign | (9,620) | (7,688) | (4,829) | ||||
Net loss before income taxes | $ (6,096) | $ (6,349) | $ (23,649) | $ (10,384) | $ (14,144) | $ (6,609) | $ (15,855) |
Income Taxes - Income Taxes Exp
Income Taxes - Income Taxes Expense (Benefit) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||||||
Federal | $ (627) | $ 390 | $ 430 | ||||
State | (200) | 62 | 128 | ||||
Foreign | 266 | 217 | 247 | ||||
Total current expense (benefit) | (561) | 669 | 805 | ||||
Deferred: | |||||||
Federal | (922) | (334) | 325 | ||||
State | (230) | 43 | 51 | ||||
Foreign | 30 | 23 | |||||
Total deferred expense (benefit) | (1,122) | (291) | 399 | ||||
Total income tax expense (benefit) | $ 188 | $ (1,610) | $ 489 | $ (2,106) | $ (1,683) | $ 378 | $ 1,204 |
Income Taxes - Provision of Inc
Income Taxes - Provision of Income Tax (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||||
U.S. federal statutory tax rate | 34.00% | 34.00% | 34.00% | ||||
State tax expense | 1.40% | (0.90%) | (0.80%) | ||||
Expense on purchase of common stock | (30.20%) | ||||||
Foreign rate differential | (17.80%) | (29.40%) | (7.90%) | ||||
Nondeductible expenses | (2.30%) | (4.10%) | (1.50%) | ||||
Tax credits | 6.50% | 10.00% | 3.20% | ||||
Unrecognized tax benefits | (0.20%) | (1.80%) | (0.50%) | ||||
Other | (0.20%) | (1.90%) | (0.50%) | ||||
Change in valuation allowance | (9.60%) | (11.50%) | (3.40%) | ||||
Total | (3.10%) | 25.40% | (2.10%) | 20.30% | 11.80% | (5.60%) | (7.60%) |
Income Taxes - Deferred tax Ass
Income Taxes - Deferred tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Accrued vacation | $ 529 | $ 482 |
Bad debt | 159 | 157 |
Deferred revenue | 2,176 | 3,173 |
Deferred rent | 834 | 603 |
Tax credits | 2,401 | 1,381 |
Net operating losses | 2,939 | 1,289 |
Other | 929 | 209 |
Gross deferred tax assets | 9,967 | 7,294 |
Less: Valuation allowance | (2,642) | (1,283) |
Total deferred tax assets | 7,325 | 6,011 |
Deferred tax liabilities: | ||
Depreciation | (349) | (491) |
Unbilled receivables | (491) | (1,835) |
Prepaid expenses | (6,505) | (4,579) |
Total deferred tax liabilities | (7,345) | (6,905) |
Net deferred tax liability | $ (20) | $ (894) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Line Items] | ||||||||
Tax effected state NOL carryforwards | $ 100 | |||||||
Net change during the year in total valuation allowance | 1,400 | |||||||
Unrecognized Tax Benefits | 419 | $ 384 | $ 286 | $ 218 | ||||
Potential interest and penalties recognized | 2 | 19 | $ 15 | |||||
Cumulative balance of interest and penalties | 35 | $ 39 | ||||||
Amount by which total unrecognized tax benefits is anticipated to decrease over the next 12 months | $ (100) | |||||||
Effective tax rate | (3.10%) | 25.40% | (2.10%) | 20.30% | 11.80% | (5.60%) | (7.60%) | |
Net unrecognized tax benefits which would impact effective tax rate if recognized | $ 500 | $ 500 | ||||||
Earliest Tax Year | ||||||||
Income Taxes [Line Items] | ||||||||
Open tax year | 2,013 | |||||||
Latest Tax Year | ||||||||
Income Taxes [Line Items] | ||||||||
Open tax year | 2,016 | |||||||
Minimum | Subsidiaries | ||||||||
Income Taxes [Line Items] | ||||||||
Effective tax rate | 0.00% | |||||||
Maximum | Subsidiaries | ||||||||
Income Taxes [Line Items] | ||||||||
Effective tax rate | 40.00% | |||||||
Federal | ||||||||
Income Taxes [Line Items] | ||||||||
Gross net operating loss carryforwards | $ 1,800 | $ 0 | ||||||
NOL carryforwards, Expiration | Federal NOL carryforwards will expire, if unused, in 2036. | |||||||
Federal tax credit carryforwards | $ 2,800 | 1,800 | ||||||
State | ||||||||
Income Taxes [Line Items] | ||||||||
Gross net operating loss carryforwards | $ 1,700 | 100 | ||||||
NOL carryforwards, Expiration | U.S. state NOL carryforwards will substantially expire, if unused, in 2036. | |||||||
Foreign Tax Authority [Member] | Swiss Federal Tax Administration (FTA) | ||||||||
Income Taxes [Line Items] | ||||||||
Gross net operating loss carryforwards | $ 23,700 | $ 13,300 | ||||||
NOL carryforwards, Expiration | The NOL carryforwards will expire, if unused, between 2021 and 2023. |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefit (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Beginning Balance | $ 384 | $ 286 | $ 218 |
Additions for tax positions in current years | 171 | 98 | 68 |
Additions for tax positions in prior years | 0 | 0 | 0 |
Reductions due to lapse in statutes of limitations | (136) | ||
Settlements | 0 | 0 | 0 |
Ending Balance | $ 419 | $ 384 | $ 286 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | Apr. 25, 2017 | May 31, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2017 | Jul. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares authorized for issuance | 249,700 | |||||||||
Number of shares available to be issued | 26,661,288 | |||||||||
Service period for option exercise | 5 years | 5 years | ||||||||
Granted | $ 5.04 | $ 4.38 | $ 4.35 | $ 2.61 | $ 1.81 | |||||
Stock-based compensation expense | $ 1,574,000 | $ 10,919,000 | $ 16,488,000 | |||||||
Vested | 5,300,000 | $ 0 | ||||||||
Compensation cost related to nonvested stock options not yet recognized | 12,600,000 | $ 12,600,000 | ||||||||
Unrecognized compensation cost related to nonvested stock option recognized over weighted average period, in years | 3 years | |||||||||
Aggregate purchase of stock options | 216,160 | |||||||||
Performance-based Stock Option | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Total grant-date fair value of performance-based stock option awards | $ 14,900,000 | |||||||||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | |||||||
Cumulative Stock-based Compensation Expense Related to Stock Options Recorded upon Effectiveness of Our IPO | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense | 0 | $ 6,236,000 | ||||||||
Cumulative Stock-based Compensation Expense Related to Stock Options Recorded upon Effectiveness of Our IPO | Performance Shares | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense | $ 6,200,000 | |||||||||
Stock Option Modifications | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense | $ 2,400,000 | $ 0 | $ 2,394,000 | |||||||
2017 Equity Incentive Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares available to be issued | 6,425,767 | 6,425,767 | ||||||||
2017 Equity Incentive Plan | Class A Common Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares available to be issued | 6,421,442 | 6,481,622 | 6,481,622 | |||||||
2007 Stock Option Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares authorized for issuance | 8,413,770 | 4,757,610 | ||||||||
Number of shares available to be issued | 421,442 | 1,629,322 | ||||||||
Period for which options can be granted | 10 years | 10 years | ||||||||
Number of shares available for grants | 0 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Estimate the Fair Value of Stock Options Granted (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||||
Risk-free interest rate | 1.30% | ||||||
Expected term (in years) | 6 years 6 months | 6 years 6 months | 6 years 6 months | 6 years 6 months | 6 years 6 months | 6 years 6 months | 6 years 6 months |
Expected volatility | 38.60% | 41.60% | |||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Minimum | |||||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||||
Risk-free interest rate | 1.90% | 1.90% | 1.30% | 1.30% | 1.70% | 1.80% | |
Expected volatility | 38.60% | 41.20% | 40.90% | 39.70% | 44.70% | ||
Maximum | |||||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||||
Risk-free interest rate | 2.10% | 2.20% | 1.50% | 1.50% | 1.90% | 2.10% | |
Expected volatility | 40.60% | 42.00% | 42.00% | 44.40% | 46.00% |
Stock-Based Compensation - Su47
Stock-Based Compensation - Summary of the Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Shares | |||
Number of Shares, Outstanding, Beginning balance | 6,784,448 | 4,589,988 | |
Granted | 1,252,200 | 2,375,080 | |
Exercised | (556,220) | 0 | |
Canceled | (96,500) | (180,620) | |
Number of Shares, Outstanding, Ending balance | 7,383,928 | 6,784,448 | 4,589,988 |
Number of Shares, Exercisable | 2,992,648 | ||
Weighted Average Exercise Price | |||
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 4.65 | $ 2.22 | |
Granted | 11.89 | 9.30 | |
Exercised | 1.19 | ||
Canceled | 6.30 | 4.22 | |
Weighted Average Exercise Price, Outstanding, Ending balance | 6.16 | $ 4.65 | $ 2.22 |
Weighted Average Exercise Price, Exercisable | $ 1.85 | ||
Weighted Average Remaining Contractual Term (Years) | |||
Weighted Average Remaining Contractual Term (Years), Outstanding | 6 years 8 months 12 days | 6 years 6 months | 6 years |
Weighted Average Remaining Contractual Term, Exercisable | 3 years 9 months 18 days | ||
Aggregate Intrinsic Value (in thousands) | |||
Aggregate Intrinsic Value, Exercised | $ 8,386 | ||
Aggregate Intrinsic Value, Outstanding | 164,688 | $ 44,259 | $ 24,239 |
Aggregate Intrinsic Value, Exercisable | $ 79,636 |
Convertible Preferred Stock a48
Convertible Preferred Stock and Stockholders' Equity (Deficit) - Additional Information (Detail) | May 24, 2017shares | May 31, 2015 | Feb. 28, 2014USD ($)$ / sharesshares | Sep. 30, 2017USD ($)Voteshares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2014USD ($) | Jan. 31, 2017$ / shares | Dec. 31, 2015USD ($)$ / sharesshares |
Temporary Equity [Line Items] | |||||||||
Capital stock shares authorized | 79,709,838 | ||||||||
Common stock shares authorized | 0 | 61,462,320 | 61,462,320 | ||||||
Convertible preferred stock authorized | 18,247,518 | ||||||||
Stock Repurchased and Retired During Period, Shares | 5,725,282 | 460,266 | |||||||
Accelerated Share Repurchases, Final Price Paid Per Share | $ / shares | $ 6.1274 | ||||||||
Share price | $ / shares | $ 3.67 | $ 11.17 | |||||||
Stock Repurchased and Retired During Period, value | $ | $ 21,013,000 | $ 21,013,000 | |||||||
Compensation expense | $ | $ 14,100,000 | $ 10,919,000 | $ 0 | ||||||
Compensation expense for stock options | $ | $ 2,400,000 | ||||||||
Stockholders' Equity Note, Stock Split | two-for-one basis | ||||||||
Stockholders' Equity Note, conversion ratio | 2 | ||||||||
Common stock holders voting right | one vote per share | ||||||||
Preferred stock conversion term | Each share of outstanding Preferred Stock shall automatically be converted into common stock immediately upon the closing of a firm commitment underwritten public offering of common stock by the Company, at a price per share of at least 1.5 times the original issue price of the Series B convertible preferred stock, or $9.18, pursuant to an effective registration statement under the Securities Act of 1933, as amended, and resulting in at least $50,000,000 in gross proceeds to the Company | ||||||||
Preferred stock conversion threshold | $ | $ 50,000,000 | ||||||||
Convertible preferred stock outstanding shares converted into common stock | 1 | ||||||||
Minimum | |||||||||
Temporary Equity [Line Items] | |||||||||
Preferred Stock, Dividend Rate, Percentage | 8.00% | ||||||||
Series A Convertible Preferred Stock | |||||||||
Temporary Equity [Line Items] | |||||||||
Convertible preferred stock authorized | 0 | 12,127,468 | 12,127,468 | ||||||
Cumulative Dividends | $ | $ 7,200,000 | $ 6,400,000 | |||||||
Preferred Stock, Dividends, Per Share, Cash Paid | $ / shares | $ 0.60 | $ 0.53 | |||||||
Class B Common Stock | |||||||||
Temporary Equity [Line Items] | |||||||||
Common stock shares authorized | 100,000,000 | 0 | |||||||
Conversion of convertible preferred stock to common stock (in shares) | 18,163,158 | ||||||||
Convertible preferred stock outstanding shares converted into common stock | 1 | ||||||||
Preferred stock conversion basis | 1 | ||||||||
Number of votes entitled to stockholders per share | Vote | 10 | ||||||||
Class A Common Stock | |||||||||
Temporary Equity [Line Items] | |||||||||
Common stock shares authorized | 500,000,000 | 0 | |||||||
Number of votes entitled to stockholders per share | Vote | 1 | ||||||||
Conversion of stock (in shares) | 1 | ||||||||
Maximum percentage of aggregate voting power of capital stock which triggers conversion of stock | 10.00% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-based Compensation Expense Included in Condensed Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 1,574 | $ 10,919 | $ 16,488 |
Subscriptions, software and support | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 80 | 484 | 119 |
Professional services | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 142 | 1,126 | 737 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 359 | 2,782 | 1,802 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 256 | 2,458 | 515 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 737 | $ 4,069 | $ 13,315 |
Convertible Preferred Stock a50
Convertible Preferred Stock and Stockholders' Deficit - Share of Common Stock for Future Issuance (Detail) | Dec. 31, 2016shares |
Class of Stock [Line Items] | |
Total shares of common stock reserved for future issuance | 26,661,288 |
Convertible Preferred Stock | |
Class of Stock [Line Items] | |
Total shares of common stock reserved for future issuance | 18,163,158 |
Preferred Stock Warrant | |
Class of Stock [Line Items] | |
Total shares of common stock reserved for future issuance | 84,360 |
Employee Stock Option | |
Class of Stock [Line Items] | |
Total shares of common stock reserved for future issuance | 6,784,448 |
Equity incentive plan. | |
Class of Stock [Line Items] | |
Total shares of common stock reserved for future issuance | 1,629,322 |
Convertible Preferred Stock a51
Convertible Preferred Stock and Stockholders' Deficit - Summary of Issuances of Convertible Preferred Stock (Detail) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Series A Convertible Preferred Stock | |||||
Temporary Equity [Line Items] | |||||
Original Issue Price per Share | $ 0.88903 | ||||
Number of Shares | 0 | 12,043,108 | 12,043,108 | 12,043,108 | 12,043,108 |
Conversion Price per Share | $ 0.88903 | ||||
Series B Convertible Preferred Stock | |||||
Temporary Equity [Line Items] | |||||
Original Issue Price per Share | $ 6.12740 | ||||
Number of Shares | 0 | 6,120,050 | 6,120,050 | 6,120,050 | |
Conversion Price per Share | $ 6.12740 |
Convertible Preferred Stock a52
Convertible Preferred Stock and Stockholders' Equity (Deficit) - Summary of Activity for Convertible Preferred Stock Issued and Outstanding (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Payment of accrued dividend to Series A convertible preferred stockholders | $ (7,565) | $ 0 | |||
Series A Convertible Preferred Stock | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Beginning balance | $ 17,915 | $ 17,058 | $ 17,058 | $ 16,197 | $ 15,341 |
Beginning balance, shares issued | 12,043,108 | 12,043,108 | 12,043,108 | 12,043,108 | 12,043,108 |
Accretion of dividends on convertible preferred stock | $ 357 | $ 857 | $ 861 | $ 856 | |
Payment of accrued dividend to Series A convertible preferred stockholders | (7,565) | ||||
Conversion of convertible preferred stock to common stock | $ (10,707) | ||||
Conversion of convertible preferred stock to common stock (in shares) | (12,043,108) | ||||
Ending balance | $ 0 | $ 17,915 | $ 17,058 | $ 16,197 | |
Ending balance, shares issued | 0 | 12,043,108 | 12,043,108 | 12,043,108 | |
Series B Convertible Preferred Stock | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Beginning balance | $ 37,500 | $ 37,500 | $ 37,500 | $ 37,500 | |
Beginning balance, shares issued | 6,120,050 | 6,120,050 | 6,120,050 | 6,120,050 | |
Issuance convertible preferred stock | $ 37,380 | ||||
Issuance of convertible preferred stock, shares | 6,120,050 | ||||
Accretion of dividends on convertible preferred stock | $ 0 | ||||
Accretion of issuance costs on convertible preferred stock | $ 120 | ||||
Payment of accrued dividend to Series A convertible preferred stockholders | 0 | ||||
Conversion of convertible preferred stock to common stock | $ (37,500) | ||||
Conversion of convertible preferred stock to common stock (in shares) | (6,120,050) | ||||
Ending balance | $ 0 | $ 37,500 | $ 37,500 | $ 37,500 | |
Ending balance, shares issued | 0 | 6,120,050 | 6,120,050 | 6,120,050 |
Warrants - Additional Informati
Warrants - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | ||||
Nov. 30, 2008 | Sep. 30, 2017 | May 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Class of Warrant or Right [Line Items] | |||||
Warrant term | 10 years | ||||
Warrant exercise price (in dollars per share) | $ 0.88905 | $ 0.88905 | |||
Warrant | |||||
Class of Warrant or Right [Line Items] | |||||
Fair value of warrant | $ 1.2 | $ 0.9 | $ 0.7 | ||
Series A Convertible Preferred Stock | |||||
Class of Warrant or Right [Line Items] | |||||
Warrant to purchase shares of preferred stock (in shares) | 84,360 | 84,360 | |||
Class B Common Stock | |||||
Class of Warrant or Right [Line Items] | |||||
Shares issued on cashless exercise of warrants (in shares) | 79,363 | ||||
Class B Common Stock | Prior to IPO | |||||
Class of Warrant or Right [Line Items] | |||||
Warrant to purchase shares of preferred stock (in shares) | 84,360 |
Basic and Diluted Income (Loss)
Basic and Diluted Income (Loss) per Common Share - Summary of Securities Excluded From Calculation of Weighted Average Common Shares Outstanding (Detail) - shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Series A Convertible Preferred Stock | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Convertible preferred stock (in shares) | 0 | 12,043,108 | 0 | 12,043,108 | 12,043,108 | 12,043,108 | 12,043,108 |
Series B Convertible Preferred Stock | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Convertible preferred stock (in shares) | 0 | 6,120,050 | 0 | 6,120,050 | 6,120,050 | 6,120,050 | 6,120,050 |
Warrant To Purchase Series A Convertible Preferred Stock | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Convertible preferred stock (in shares) | 0 | 84,360 | 0 | 84,360 | 84,360 | 84,360 | 84,360 |
Employee Stock Option | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Convertible preferred stock (in shares) | 7,383,928 | 6,699,048 | 7,383,928 | 6,699,048 | 6,784,448 | 4,589,988 | 3,886,408 |
Restricted Stock Units | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Convertible preferred stock (in shares) | 42,925 | 0 | 42,925 | 0 |
Commitments and Contingencies -
Commitments and Contingencies - Summary of Future Minimum Gross and Net Lease commitments (Detail) $ in Thousands | Dec. 31, 2016USD ($) |
Office Leases | |
Operating Leased Assets [Line Items] | |
2,017 | $ 6,868 |
2,018 | 6,538 |
2,019 | 6,720 |
2,020 | 4,780 |
2,021 | 2,466 |
Thereafter | 1,304 |
Operating Leases, Future Minimum Payments Due, Total | 28,676 |
Less: minimum payments to be received from subleases | (527) |
Total | 28,149 |
Equipment Leases | |
Operating Leased Assets [Line Items] | |
2,017 | 277 |
2,018 | 131 |
2,019 | 6 |
Operating Leases, Future Minimum Payments Due, Total | 414 |
Total | $ 414 |
Commitments and Contingencies56
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Deferred rent | $ 2.4 | $ 1.5 | |
Original lease agreement expires date | Oct. 31, 2017 | ||
Rental income received from subtenant | $ 0.6 | 0.6 | $ 0.1 |
Total rent and lease expense | 6.6 | 4.6 | $ 3.8 |
Annual royalty fees | 0.3 | ||
Outstanding letters of credit | $ 1.3 | $ 0.8 |
Segment and Geographic Inform57
Segment and Geographic Information - Summary of Revenues By Geography (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenue | $ 44,648 | $ 30,745 | $ 126,175 | $ 99,176 | $ 132,923 | $ 111,204 | $ 88,996 |
Domestic | |||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenue | 31,878 | 23,650 | 93,860 | 80,715 | 107,069 | 89,043 | 66,285 |
International | |||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Revenue | $ 12,770 | $ 7,095 | $ 32,315 | $ 18,461 | $ 25,854 | $ 22,161 | $ 22,711 |
Segment and Geographic Inform58
Segment and Geographic Information - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Sales Revenue, Net | Geographic Concentration Risk | |||||||
Segment Reporting Information [Line Items] | |||||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.80% |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employer matching contribution, annual vesting percentage | 25.00% | ||
Defined benefit vesting period | 4 years | ||
Contribution expense | $ 2.6 | $ 1.9 | $ 1.3 |
Foreign Subsidiaries | |||
Contribution expense | $ 0.7 | $ 0.5 | $ 0.3 |
Maximum | |||
Employer matching contribution, percent of employees' gross pay | 75.00% |
Subsequent Events (Detail)
Subsequent Events (Detail) - USD ($) | Nov. 02, 2017 | Oct. 25, 2017 | Dec. 31, 2015 | Sep. 30, 2017 | Dec. 31, 2016 | Jan. 31, 2017 | Feb. 28, 2014 |
Subsequent Event [Line Items] | |||||||
Number of Shares, authorized | 249,700 | ||||||
Exercise price per share | $ 11.17 | $ 3.67 | |||||
Granted | 1,252,200 | 2,375,080 | |||||
Granted | $ 11.89 | $ 9.30 | |||||
Revolving Credit Facility | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Credit facility | $ 20,000,000 | ||||||
Quick ratio | 135.00% | ||||||
Restricted Stock Units | |||||||
Subsequent Event [Line Items] | |||||||
Granted | $ 20.38 | ||||||
Minimum | Revolving Credit Facility | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Unused credit facility fee | 0.15% | ||||||
Maximum | Revolving Credit Facility | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Unused credit facility fee | 0.25% | ||||||
2017 Equity Incentive Plan | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Vesting period | 5 years | ||||||
2017 Equity Incentive Plan | Restricted Stock Units | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Restricted stock units, granted | 689,200 | ||||||
Granted | $ 22.27 | ||||||
Value of awards, at grant date | $ 15,300,000 | ||||||
2017 Equity Incentive Plan | Common Stock | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Granted | 4,000 | ||||||
Granted | $ 22.27 | ||||||
London Interbank Offered Rate (LIBOR) | Minimum | Revolving Credit Facility | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Interest rate margin | 2.00% | ||||||
London Interbank Offered Rate (LIBOR) | Maximum | Revolving Credit Facility | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Interest rate margin | 2.50% | ||||||
Prime Rate | Revolving Credit Facility | |||||||
Subsequent Event [Line Items] | |||||||
Interest rate margin | 0.75% | ||||||
Prime Rate | Minimum | Revolving Credit Facility | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Interest rate margin | 1.00% | ||||||
Prime Rate | Maximum | Revolving Credit Facility | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Interest rate margin | 1.50% |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | |||
Accrued contract labor costs | $ 3,122 | $ 743 | |
Accrued audit and tax expenses | 364 | 358 | |
Accrued reimbursable employee expenses | 285 | 134 | |
Accrued marketing and tradeshow expenses | 251 | 111 | |
Other accrued expenses | 1,955 | 1,514 | |
Total | $ 5,977 | $ 2,860 | $ 4,350 |
Stock-Based Compensation - Sc62
Stock-Based Compensation - Schedule of Restricted Stock Unit Activity (Detail) - Restricted Stock Units $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Number of Shares | |
Non-vested outstanding at December 31, 2016 | shares | 0 |
Granted | shares | 47,855 |
Vested | shares | (4,930) |
Canceled | shares | 0 |
Non-vested outstanding at September 30, 2017 | shares | 42,925 |
Weighted Average Grant Date Fair Value | |
Non-vested outstanding at December 31, 2016 | $ / shares | $ 0 |
Granted | $ / shares | 20.38 |
Vested | $ / shares | 20.24 |
Canceled | $ / shares | 0 |
Non-vested outstanding at September 30, 2017 | $ / shares | $ 20.40 |
Total unrecognized compensation cost related to unvested restricted stock units | $ | $ 0.8 |
Weighted average remaining vesting period | 2 years 8 months 12 days |
Stock-Based Compensation - Sc63
Stock-Based Compensation - Schedule of Stock-based Compensation Expense (Detail) - USD ($) $ in Thousands | Apr. 25, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 1,574 | $ 10,919 | $ 16,488 | |
Stock Option Modifications | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 2,400 | 0 | 2,394 | |
Cumulative Stock-based Compensation Expense Related to Stock Options Recorded upon Effectiveness of Our IPO | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 0 | 6,236 | ||
Post-IPO Stock-based Compensation Expense Related to Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 1,440 | 2,025 | ||
Stock-based Compensation Expense Related to the Issuance of Common Stock to Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 0 | 130 | ||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 134 | $ 134 |