Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document and Entity Information [Line Items] | ||
Entity Registrant Name | APPIAN CORP | |
Entity Central Index Key | 1,441,683 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Trading Symbol | APPN | |
Class A Common Stock | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 18,958,565 | |
Class B Common Stock | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 42,300,486 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 60,876 | $ 73,758 |
Accounts receivable, net of allowance of $400 | 52,518 | 55,315 |
Deferred commissions, current | 9,247 | 9,117 |
Prepaid expenses and other current assets | 7,094 | 7,032 |
Total current assets | 129,735 | 145,222 |
Property and equipment, net | 3,359 | 2,663 |
Deferred commissions, net of current portion | 11,931 | 12,376 |
Deferred tax assets | 240 | 281 |
Other assets | 533 | 510 |
Total assets | 145,798 | 161,052 |
Current liabilities | ||
Accounts payable | 2,713 | 5,226 |
Accrued expenses | 7,059 | 6,467 |
Accrued compensation and related benefits | 8,932 | 12,075 |
Deferred revenue, current | 68,753 | 70,165 |
Other current liabilities | 1,419 | 1,182 |
Total current liabilities | 88,876 | 95,115 |
Deferred tax liabilities | 12 | 87 |
Deferred revenue, net of current portion | 17,055 | 18,922 |
Other long-term liabilities | 1,227 | 1,404 |
Total liabilities | 107,170 | 115,528 |
Stockholders’ equity | ||
Additional paid-in capital | 144,490 | 141,268 |
Accumulated other comprehensive (loss) income | (126) | 439 |
Accumulated deficit | (105,742) | (96,189) |
Total stockholders’ equity | 38,628 | 45,524 |
Total liabilities and stockholders’ equity | 145,798 | 161,052 |
Class A Common Stock | ||
Stockholders’ equity | ||
Common stock | 2 | 1 |
Class B Common Stock | ||
Stockholders’ equity | ||
Common stock | $ 4 | $ 5 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Allowance for doubtful accounts | $ 400 | $ 400 |
Common stock, par value | $ 0.0001 | |
Class A Common Stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 18,891,315 | 13,030,081 |
Common stock, shares outstanding | 18,891,315 | 13,030,081 |
Class B Common Stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 42,318,846 | 47,569,796 |
Common stock, shares outstanding | 42,318,846 | 47,569,796 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Subscriptions, software and support | $ 26,952 | $ 21,444 |
Professional services | 24,744 | 16,885 |
Total revenue | 51,696 | 38,329 |
Cost of revenue: | ||
Subscriptions, software and support | 2,628 | 2,062 |
Professional services | 18,421 | 10,628 |
Total cost of revenue | 21,049 | 12,690 |
Gross profit | 30,647 | 25,639 |
Operating expenses: | ||
Sales and marketing | 22,964 | 17,003 |
Research and development | 9,870 | 7,300 |
General and administrative | 8,060 | 4,849 |
Total operating expenses | 40,894 | 29,152 |
Operating loss | (10,247) | (3,513) |
Other (income) expense: | ||
Other (income), net | (918) | (499) |
Interest expense | 13 | 256 |
Total other (income) | (905) | (243) |
Net loss before income taxes | (9,342) | (3,270) |
Income tax expense | 211 | 125 |
Net loss | (9,553) | (3,395) |
Accretion of dividends on convertible preferred stock | 0 | 214 |
Net loss attributable to common stockholders | $ (9,553) | $ (3,609) |
Net loss per share attributable to common stockholders: | ||
Basic and diluted (in dollar per share) | $ (0.16) | $ (0.10) |
Weighted average common shares outstanding: | ||
Basic and diluted (in shares) | 60,850,521 | 34,274,718 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (9,553) | $ (3,395) |
Comprehensive loss, net of income taxes: | ||
Foreign currency translation adjustment | (566) | (364) |
Total other comprehensive loss, net of income taxes | $ (10,119) | $ (3,759) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2017 | 60,599,877 | ||||
Beginning balance at Dec. 31, 2017 | $ 45,524 | $ 6 | $ 141,268 | $ 439 | $ (96,189) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ (9,553) | (9,553) | |||
Issuance of common stock to directors (in shares) | 2,935 | ||||
Exercise of stock options (in shares) | 607,349 | 607,349 | |||
Exercise of stock options | $ 982 | 982 | |||
Stock-based compensation expense | 2,240 | 2,240 | |||
Other comprehensive loss | (565) | (565) | |||
Ending balance (in shares) at Mar. 31, 2018 | 61,210,161 | ||||
Ending balance at Mar. 31, 2018 | $ 38,628 | $ 6 | $ 144,490 | $ (126) | $ (105,742) |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (9,553) | $ (3,395) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 268 | 219 |
Deferred income taxes | 76 | 0 |
Stock-based compensation | 2,240 | 0 |
Changes in assets and liabilities: | ||
Accounts receivable | 1,932 | 14,304 |
Prepaid expenses and other assets | (1,085) | (2,771) |
Deferred commissions | 315 | (741) |
Accounts payable and accrued expenses | (2,161) | (3,860) |
Accrued compensation and related benefits | (2,743) | (1,408) |
Other current liabilities | 909 | 100 |
Deferred revenue | (3,849) | 1,393 |
Other long-term liabilities | (182) | (136) |
Net cash (used in) provided by operating activities | (13,833) | 3,705 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,036) | (105) |
Net cash used in investing activities | (1,036) | (105) |
Cash flows from financing activities: | ||
Proceeds from exercise of common stock options | 983 | 0 |
Net cash provided by financing activities | 983 | 0 |
Effect of foreign exchange rate changes on cash and cash equivalents | 1,004 | 16 |
Net (decrease) increase in cash and cash equivalents | (12,882) | 3,616 |
Cash and cash equivalents, beginning of period | 73,758 | 31,143 |
Cash and cash equivalents, end of period | 60,876 | 34,759 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 8 | 248 |
Cash paid for income taxes | 57 | 54 |
Supplemental disclosure of non-cash financing activities: | ||
Accretion of dividends on convertible preferred stock | 0 | 214 |
Deferred offering costs included in accounts payable and accrued expenses | $ 0 | $ 1,251 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | Organization and Description of Business Appian Corporation (together with its subsidiaries, “Appian,” the “Company,” “we” or “our”) provides a leading low-code software development platform that enables organizations to rapidly develop powerful and unique applications. The applications created on our platform help companies drive digital transformation and competitive differentiation. We were incorporated in the state of Delaware in August 1999. We are headquartered in Reston, Virginia and operate in Canada, Switzerland, the United Kingdom, France, Germany, the Netherlands, Italy, Australia, Spain, Singapore and Sweden. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 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 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 Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2018. 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. 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 0.1% and 1.2% of our total revenue for the three months ended March 31, 2018 and 2017 , respectively. We generally charge subscription fees on a per-user basis. We bill customers and collect payment for subscriptions to our platform in advance on a monthly, quarterly or annual basis. In certain instances, we have had customers pay their entire contract up front. 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 installations of our platform pursuant to contracts that are generally one to five years in length. Customers with term license subscriptions have the right to use our software and receive maintenance and support. Since we do not sell maintenance and support separately from the subscription, revenue for the term license subscription and maintenance and support is recognized ratably over the term of the subscription, upon delivery of the platform to the customer when sold on a standalone basis. 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. For standalone time-and-material contracts, we recognize revenue at contractually agreed upon billing rates applied to hours performed. For standalone fixed-fee contracts, we also recognize revenue as the work is performed using the proportional performance method of accounting. Training revenue is recognized when the associated training services are delivered. Training is also sold in the form of a subscription arrangement where a customer agrees to pay an annual fixed fee for a fixed number of users to have access to all of our training offerings during the year. Revenue from training subscription agreements is recognized ratably over the subscription period. 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 12.3% and 16.5% of our revenue for the three months ended March 31, 2018 and 2017 , respectively, of which the top three federal government agencies generated 6.4% and 10.8% of our revenue for the three months ended March 31, 2018 and 2017 , respectively. Additionally, 33.3% and 22.7% of our revenue during the three months ended March 31, 2018 and 2017 , respectively, was generated from foreign customers. One customer accounted for 6.2% and 7.0% of accounts receivable at March 31, 2018 and December 31, 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, 2017 to March 31, 2018 . 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 $2.7 million and $2.6 million for the three months ended March 31, 2018 and 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 March 31, 2018 and December 31, 2017 because of the relatively short duration of these instruments. 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, in periods subsequent to their initial measurement. The hierarchy requires us to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3. Unobservable inputs for which there is little or no market data, which require us to develop our own assumptions. 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 March 31, 2018 and 2017 . 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 Options Pricing Model. 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. We account for forfeitures as they occur, rather than estimating expected forfeitures. 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 On December 22, 2017, the Tax Cuts and Jobs Act (the "TCJA") was enacted, substantially changing the U.S. Federal tax system. Notable provisions of the TCJA include the reduction of the corporate tax rate from 35% to 21% beginning in 2018, the imposition of a one-time transition tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries, and the implementation of a territorial tax system. While the changes from the TCJA are generally effective beginning in 2018, U.S. GAAP accounting for income taxes requires the effect of a change in tax laws or rates to be recognized in income from continuing operations for the period that includes the enactment date. Due to the complexities involved in accounting for the enactment of the TCJA, the SEC Staff Accounting Bulletin No. 118 (“SAB 118”) allowed us to record provisional amounts in earnings for the year ended December 31, 2017. Where reasonable estimates can be made, the provisional accounting should be based on such estimates. When no reasonable estimate can be made, the provisional accounting may be based on the tax law in effect before the TCJA. We are required to complete our tax accounting for the TCJA in the period when we have obtained, prepared, and analyzed the information to complete the income tax accounting. We have not completed our accounting for the tax effects of enactment of the TCJA; however, we have made reasonable estimates of the effects of the TCJA on our consolidated financial statements which are included as a component of income tax expense. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 ("ASU 2018-05"), which allowed SEC registrants to record provisional amounts in earnings for the year ended December 31, 2017 due to the complexities involved in accounting for the enactment of the TCJA. In accordance with SAB No. 118, we recognized the estimated income tax effects of the TCJA in the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 23, 2018. See Note 5 for further information regarding the provisional amounts recorded as of December 31, 2017. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"), which clarifies when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. ASU 2017-09 requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. ASU 2017-09 became effective on a prospective basis beginning on January 1, 2018. The adoption of ASU 2017-09 did not have an impact on our consolidated financial statements for the three months ended March 31, 2018 . Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which provides new guidance for revenue recognition. ASU 2014-09 provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. Entities have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard. In March 2016, the FASB issued ASU No. 2016-08, Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net) (“ASU 2016-08”), which clarifies implementation guidance on principal versus agent considerations in ASU 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing (“ASU 2016-10”), which clarifies the identification of performance obligations and the licensing implementation guidance in ASU 2014-09. In addition, in May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), which clarifies the guidance on assessing collectibility, presentation of sales taxes, noncash consideration and completed contracts and contract modifications at transition. For public entities, the new standard is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017. For all other entities, the new standard is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods beginning after December 15, 2019. We intend to avail ourselves of the JOBS Act extended transition period that permits us to defer adoption until January 1, 2019. The Topic 606 guidance allows two methods of adoption: retrospectively to each prior reporting period (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We currently plan to adopt the new standard using the full retrospective method to restate each prior reporting period presented. We do not expect the new standard to have a material impact on the timing of revenue recognition related to our cloud-based subscriptions and standalone professional services. However, we expect the new standard to have a significant impact on the timing of revenue recognition related to our term license subscriptions. 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. Under this new standard, the requirement to have VSOE for undelivered services is eliminated. Therefore, we may be required to recognize a portion of revenue from the term license subscriptions upon delivery of the software. In addition, we expect the new standard to impact our accounting for contract acquisition costs, both with respect to the amounts that will be capitalized as well as the period of amortization. Currently, we defer the direct and incremental commission costs to obtain a contract with a customer and amortize those costs over the term of the related customer contract consistent with the related revenue. Under the new standard, we will continue to defer the direct and incremental commission costs to obtain a contract with a customer but will amortize those costs over the customer's estimated economic life. As a result, we expect the deferred commissions asset to increase and the related amortization expense in each reporting period to decrease under the new standard. We are still in the process of quantifying the effects of the adoption of Topic 606 as well as continuing to evaluate the impact of the adoption of the standard on our consolidated financial statements, including our footnotes. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires that lessees recognize assets and liabilities for leases with lease terms greater than 12 months in the statement of financial position. ASU 2016-2 also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The update is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. We are currently evaluating the impact the adoption of ASU 2016-02 will have on our consolidated financial statements. 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 aims to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 will require adoption on a retrospective basis unless it is impracticable to apply, in which case we would be required to apply the amendments prospectively as of the earliest date practicable. ASU 2016-15 is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption of this standard on our consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02"), which provides entities the option to reclassify to retained earnings tax effects related to items in accumulated other comprehensive income ("OCI") that the FASB refers to as having been stranded in accumulated OCI as a result of tax reform. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We do not expect ASU 2018-02 to have a material impact on our consolidated financial statements. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consist of the following as of March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 December 31, 2017 Accrued contract labor costs $ 3,459 $ 3,424 Accrued hosting costs 1,081 466 Accrued audit and tax professional fees 285 248 Accrued reimbursable employee expenses 273 286 Accrued marketing and tradeshow expenses 197 128 Other accrued expenses 1,764 1,915 Total $ 7,059 $ 6,467 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt 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 initial public offering ("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. This financing facility was terminated in November 2017 in connection with our entry into a new $20.0 million revolving line of credit. 2017 Line of Credit 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 the 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 (1) 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. We were in compliance with all covenants as of March 31, 2018 . As of March 31, 2018 , we had no outstanding borrowings under the revolving line of credit. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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 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 33% . Fluctuations in the distribution of pre-tax income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the condensed consolidated financial statements. For the three months ended March 31, 2018 and 2017 , the actual effective tax rates were (2.3)% and (3.8)% , respectively. We assess uncertain tax positions in accordance with ASC 740-10, Accounting for Uncertainties in Tax . As of March 31, 2018 , our net unrecognized tax benefits totaled $0.7 million , of which the entire portion would favorably impact our effective tax rate in the period if recognized. We anticipate that the amount of reasonably possible unrecognized tax benefits that could decrease over the next 12 months due to the expiration of certain statutes of limitations and settlement of tax audits is not material to our consolidated financial statements. We file income tax returns in the United States federal jurisdiction and in many states and foreign jurisdictions. The tax years 2014 through 2017 remain open to examination by the major taxing jurisdictions to which we are subject. We are not currently under examination by the Internal Revenue Service for any open tax years. On December 22, 2017, U.S. federal tax reform was enacted with the signing of the TCJA. Notable provisions of the TCJA include the following: • Establishment of a flat corporate income tax rate of 21% on U.S. earnings; • Imposition of a one-time tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries, or the Transition Tax; • The imposition of a new minimum tax on certain non-U.S. earnings, irrespective of the territorial system of taxation, and generally allows for the repatriation of future earnings of foreign subsidiaries without incurring additional U.S. taxes by transitioning to a territorial system of taxation; • Imposition of minimum taxes on certain payments made by a U.S. company to a related foreign company, or the Base Erosion Anti-Abuse Tax; • Elimination of the alternative minimum tax and allowance of a refund for previous alternative minimum tax credits; • Allowance for immediate expensing of the cost of investments in certain depreciable assets acquired and placed in service after September 27, 2017; and • Reduction in tax deductions with respect to certain compensation paid to certain executive officers. While the changes from the TCJA are generally effective beginning in 2018, U.S. GAAP accounting for income taxes requires the effect of a change in tax laws or rates to be recognized in income from continuing operations for the period that includes the enactment date. Due to the complexities involved in accounting for the enactment of the TCJA, SAB 118 allowed us to record provisional amounts in earnings for the year ended December 31, 2017 . Where reasonable estimates can be made, the provisional accounting should be based on such estimates. When no reasonable estimate can be made, the provisional accounting may be based on the tax law in effect before the TCJA. We are required to complete our tax accounting for the TCJA in the period when we have obtained, prepared, and analyzed the information to complete the income tax accounting. During the three months ended March 31, 2018 , there were no changes made to the provisional amounts recognized in 2017 . We will continue to analyze the effects of the TCJA on our financial statements. Additional impacts from the enactment of the TCJA will be recorded as they are identified during the measurement period as provided for in SAB 118, which extends up to one year from the enactment date. The final impact of the TCJA may differ from the provisional amounts that have been recognized, possibly materially, due to, among other things, changes in our interpretation of the TCJA, legislative or administrative actions to clarify the intent of the statutory language provided that differ from our current interpretation, any changes in accounting standards for income taxes or related interpretations in response to the TCJA, or any updates or changes to estimates utilized to calculate the impacts, including changes to current year earnings estimates and applicable foreign exchange rates. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 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 directors and consultants. We initially reserved 6,421,442 shares of Class A common stock for issuance under the 2017 Plan, which included 421,442 shares that remained available for issuance under our 2007 Stock Option Plan (the “2007 Plan”) at the time that the 2017 Plan became effective. The number of shares reserved under the 2017 Plan increases for any shares subject to outstanding awards originally granted under the 2007 Plan that expire or are forfeited prior to exercise. As a result of the adoption of the 2017 Plan, no further grants may be made under the 2007 Plan. As of March 31, 2018 , there were 6,571,822 shares of Class A common stock reserved for issuance under the 2017 Plan, of which 5,688,820 were available to be issued. The 2007 Plan provided for the grant of stock options to employees, directors, and officers. Stock 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. Stock 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 Options Pricing Model, 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 between the vesting date and the end of the contractual term. Expected volatility is based on historical volatilities for publicly traded stock of comparable companies over the estimated expected term of the stock options. We assume no dividend yield because dividends are not expected to be paid in the near future, which is consistent with our history of not paying dividends. The following table summarizes the assumptions used to estimate the fair value of stock options granted during the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 2017 Risk-free interest rate * 2.2% Expected term (in years) * 6.5 Expected volatility * 40.6% Expected dividend yield * —% * Not applicable because no stock options were granted during the period. Stock Options The following table summarizes the stock option activity for the three months ended March 31, 2018 : Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2018 7,010,887 $ 6.36 6.6 $ 176,122 Granted — — Exercised (607,349 ) 1.62 16,321 Canceled (35,560 ) 9.95 Outstanding at March 31, 2018 6,367,978 6.79 6.7 117,104 Exercisable at March 31, 2018 2,287,058 2.43 4.1 52,025 The weighted average grant-date fair value of stock options granted during the three months ended March 31, 2017 was $4.88 per share. No stock options were granted during the three months ended March 31, 2018 . The total fair value of stock options that vested during the three months ended March 31, 2018 was $0.3 million . No stock options vested during the three months ended March 31, 2017 because a qualifying event had not yet occurred. As of March 31, 2018 , the total compensation cost related to unvested stock options not yet recognized was $9.6 million , which will be recognized over a weighted average period of 2.7 years. Restricted Stock Units The following table summarizes the restricted stock unit activity for the three months ended March 31, 2018 : Number of Shares Weighted Average Grant Date Fair Value Non-vested outstanding at January 1, 2018 731,975 $ 22.16 Granted 119,425 30.46 Vested — — Canceled (1,850 ) 24.51 Non-vested outstanding at March 31, 2018 849,550 23.32 As of March 31, 2018 , total unrecognized compensation cost related to unvested restricted stock units was approximately $18.3 million and the weighted average remaining vesting period was 2.6 years . The following table summarizes the components of our stock-based compensation expense for the three months ended March 31, 2018 (in thousands): Three Months Ended March 31, 2018 Stock-based compensation expense related to stock options $ 1,254 Stock-based compensation expense related to restricted stock units 894 Stock-based compensation expense related to the issuance of common stock to directors 92 Total stock-based compensation expense $ 2,240 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 months ended March 31, 2018 (in thousands): Three Months Ended March 31, 2018 Cost of revenue Subscriptions, software and support $ 110 Professional services 220 Operating expenses Sales and marketing 507 Research and development 391 General and administrative 1,012 Total stock-based compensation expense $ 2,240 For the three months ended March 31, 2017 , no stock-based compensation expense was recognized for our stock option awards because a qualifying event had not yet occurred. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity As of March 31, 2018 , we had authorized 500,000,000 shares of Class A common stock and 100,000,000 shares of Class B common stock, each par value $0.0001 per share, of which 18,891,315 shares of Class A common stock and 42,318,846 shares of Class B common stock were issued and outstanding. 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. |
Basic and Diluted Loss per Comm
Basic and Diluted Loss per Common Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Loss per Common Share | Basic and Diluted Loss per Common Share 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 March 31, 2018 2017 Convertible preferred stock: Series A convertible preferred stock — 12,043,108 Series B convertible preferred stock — 6,120,050 Warrant to purchase Series A convertible preferred stock — 84,360 Stock options 6,367,978 7,007,328 Restricted stock units 849,550 — |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information The following table summarizes revenue by geography for the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 Domestic $ 34,481 $ 29,647 International 17,215 8,682 Total $ 51,696 $ 38,329 With respect to geographic information, revenue is attributed to respective geographies based on the contracting address of the customer. Revenues from external customers attributed to the United Kingdom were 10.6% of total revenue for the three months ended March 31, 2018 . There were no individual foreign countries from which more than 10% of our total revenue was attributable for the three months ended March 31, 2017 . Substantially all of our long-lived assets were held in the United States as of March 31, 2018 and December 31, 2017 . |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In preparing our condensed consolidated financial statements, we evaluated subsequent events through May 3, 2018, which is the date that the condensed consolidated financial statements were available to be issued. On April 17, 2018, we entered into a lease agreement for a new headquarters in Tysons, Virginia pursuant to which we have leased approximately 176,000 square feet. The initial term of the lease will commence no later than May 1, 2019 and expires 150 months later, unless earlier terminated, with an option to extend the lease term for two consecutive five -year periods. No annual rent is due for the first 15 months of the initial term of the lease, after which time the monthly base rent will be $450,835 , subject to a 3% annual increase. Within 12 months of the commencement of the initial term of the lease, an additional 28,805 square feet of adjacent office space will be added (the "Must-Take Space"). No annual rent is due for a prorated period of time following the addition of the Must-Take Space, after which time the monthly base rent for the Must-Take Space will be $73,693 , subject to a 3% annual increase. Including the Must-Take Space, the aggregate base rent payable is approximately $81.9 million over the term of the lease. We are also responsible for the payment of a portion of taxes and operating expenses. In connection with entering into the lease agreement, we amended our sublease with College Entrance Examination Board, which will terminate the sublease agreement. Pursuant to the termination amendment, the sublease will terminate in two stages, with the termination of a majority of the premises taking place on May 31, 2019, rather than July 31, 2021 as originally contemplated by the sublease. |
Significant Accounting Polici18
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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 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 Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2018. |
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. |
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. |
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 0.1% and 1.2% of our total revenue for the three months ended March 31, 2018 and 2017 , respectively. We generally charge subscription fees on a per-user basis. We bill customers and collect payment for subscriptions to our platform in advance on a monthly, quarterly or annual basis. In certain instances, we have had customers pay their entire contract up front. 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 installations of our platform pursuant to contracts that are generally one to five years in length. Customers with term license subscriptions have the right to use our software and receive maintenance and support. Since we do not sell maintenance and support separately from the subscription, revenue for the term license subscription and maintenance and support is recognized ratably over the term of the subscription, upon delivery of the platform to the customer when sold on a standalone basis. 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. For standalone time-and-material contracts, we recognize revenue at contractually agreed upon billing rates applied to hours performed. For standalone fixed-fee contracts, we also recognize revenue as the work is performed using the proportional performance method of accounting. Training revenue is recognized when the associated training services are delivered. Training is also sold in the form of a subscription arrangement where a customer agrees to pay an annual fixed fee for a fixed number of users to have access to all of our training offerings during the year. Revenue from training subscription agreements is recognized ratably over the subscription period. 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 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 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. |
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. |
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. |
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 March 31, 2018 and December 31, 2017 because of the relatively short duration of these instruments. 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, in periods subsequent to their initial measurement. The hierarchy requires us to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3. Unobservable inputs for which there is little or no market data, which require us to develop our own assumptions. |
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 Options Pricing Model. 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. We account for forfeitures as they occur, rather than estimating expected forfeitures. |
Emerging Growth Company Status | 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 | Recent Accounting Pronouncements Adopted On December 22, 2017, the Tax Cuts and Jobs Act (the "TCJA") was enacted, substantially changing the U.S. Federal tax system. Notable provisions of the TCJA include the reduction of the corporate tax rate from 35% to 21% beginning in 2018, the imposition of a one-time transition tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries, and the implementation of a territorial tax system. While the changes from the TCJA are generally effective beginning in 2018, U.S. GAAP accounting for income taxes requires the effect of a change in tax laws or rates to be recognized in income from continuing operations for the period that includes the enactment date. Due to the complexities involved in accounting for the enactment of the TCJA, the SEC Staff Accounting Bulletin No. 118 (“SAB 118”) allowed us to record provisional amounts in earnings for the year ended December 31, 2017. Where reasonable estimates can be made, the provisional accounting should be based on such estimates. When no reasonable estimate can be made, the provisional accounting may be based on the tax law in effect before the TCJA. We are required to complete our tax accounting for the TCJA in the period when we have obtained, prepared, and analyzed the information to complete the income tax accounting. We have not completed our accounting for the tax effects of enactment of the TCJA; however, we have made reasonable estimates of the effects of the TCJA on our consolidated financial statements which are included as a component of income tax expense. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 ("ASU 2018-05"), which allowed SEC registrants to record provisional amounts in earnings for the year ended December 31, 2017 due to the complexities involved in accounting for the enactment of the TCJA. In accordance with SAB No. 118, we recognized the estimated income tax effects of the TCJA in the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 23, 2018. See Note 5 for further information regarding the provisional amounts recorded as of December 31, 2017. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"), which clarifies when a change to the terms or conditions of a share-based payment award must be accounted for as a modification. ASU 2017-09 requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. ASU 2017-09 became effective on a prospective basis beginning on January 1, 2018. The adoption of ASU 2017-09 did not have an impact on our consolidated financial statements for the three months ended March 31, 2018 . Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which provides new guidance for revenue recognition. ASU 2014-09 provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. Entities have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard. In March 2016, the FASB issued ASU No. 2016-08, Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net) (“ASU 2016-08”), which clarifies implementation guidance on principal versus agent considerations in ASU 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing (“ASU 2016-10”), which clarifies the identification of performance obligations and the licensing implementation guidance in ASU 2014-09. In addition, in May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), which clarifies the guidance on assessing collectibility, presentation of sales taxes, noncash consideration and completed contracts and contract modifications at transition. For public entities, the new standard is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017. For all other entities, the new standard is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods beginning after December 15, 2019. We intend to avail ourselves of the JOBS Act extended transition period that permits us to defer adoption until January 1, 2019. The Topic 606 guidance allows two methods of adoption: retrospectively to each prior reporting period (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We currently plan to adopt the new standard using the full retrospective method to restate each prior reporting period presented. We do not expect the new standard to have a material impact on the timing of revenue recognition related to our cloud-based subscriptions and standalone professional services. However, we expect the new standard to have a significant impact on the timing of revenue recognition related to our term license subscriptions. 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. Under this new standard, the requirement to have VSOE for undelivered services is eliminated. Therefore, we may be required to recognize a portion of revenue from the term license subscriptions upon delivery of the software. In addition, we expect the new standard to impact our accounting for contract acquisition costs, both with respect to the amounts that will be capitalized as well as the period of amortization. Currently, we defer the direct and incremental commission costs to obtain a contract with a customer and amortize those costs over the term of the related customer contract consistent with the related revenue. Under the new standard, we will continue to defer the direct and incremental commission costs to obtain a contract with a customer but will amortize those costs over the customer's estimated economic life. As a result, we expect the deferred commissions asset to increase and the related amortization expense in each reporting period to decrease under the new standard. We are still in the process of quantifying the effects of the adoption of Topic 606 as well as continuing to evaluate the impact of the adoption of the standard on our consolidated financial statements, including our footnotes. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires that lessees recognize assets and liabilities for leases with lease terms greater than 12 months in the statement of financial position. ASU 2016-2 also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The update is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. We are currently evaluating the impact the adoption of ASU 2016-02 will have on our consolidated financial statements. 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 aims to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 will require adoption on a retrospective basis unless it is impracticable to apply, in which case we would be required to apply the amendments prospectively as of the earliest date practicable. ASU 2016-15 is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption of this standard on our consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02"), which provides entities the option to reclassify to retained earnings tax effects related to items in accumulated other comprehensive income ("OCI") that the FASB refers to as having been stranded in accumulated OCI as a result of tax reform. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. We do not expect ASU 2018-02 to have a material impact on our consolidated financial statements. |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consist of the following as of March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 December 31, 2017 Accrued contract labor costs $ 3,459 $ 3,424 Accrued hosting costs 1,081 466 Accrued audit and tax professional fees 285 248 Accrued reimbursable employee expenses 273 286 Accrued marketing and tradeshow expenses 197 128 Other accrued expenses 1,764 1,915 Total $ 7,059 $ 6,467 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Assumptions Used to 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 months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 2017 Risk-free interest rate * 2.2% Expected term (in years) * 6.5 Expected volatility * 40.6% Expected dividend yield * —% * Not applicable because no stock options were granted during the period. |
Summary of the Stock Option Activity | The following table summarizes the stock option activity for the three months ended March 31, 2018 : Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2018 7,010,887 $ 6.36 6.6 $ 176,122 Granted — — Exercised (607,349 ) 1.62 16,321 Canceled (35,560 ) 9.95 Outstanding at March 31, 2018 6,367,978 6.79 6.7 117,104 Exercisable at March 31, 2018 2,287,058 2.43 4.1 52,025 |
Schedule of Restricted Stock Unit Activity | The following table summarizes the restricted stock unit activity for the three months ended March 31, 2018 : Number of Shares Weighted Average Grant Date Fair Value Non-vested outstanding at January 1, 2018 731,975 $ 22.16 Granted 119,425 30.46 Vested — — Canceled (1,850 ) 24.51 Non-vested outstanding at March 31, 2018 849,550 23.32 |
Schedule of Components of Stock-based Compensation Expense | The following table summarizes the components of our stock-based compensation expense for the three months ended March 31, 2018 (in thousands): Three Months Ended March 31, 2018 Stock-based compensation expense related to stock options $ 1,254 Stock-based compensation expense related to restricted stock units 894 Stock-based compensation expense related to the issuance of common stock to directors 92 Total stock-based compensation expense $ 2,240 |
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 months ended March 31, 2018 (in thousands): Three Months Ended March 31, 2018 Cost of revenue Subscriptions, software and support $ 110 Professional services 220 Operating expenses Sales and marketing 507 Research and development 391 General and administrative 1,012 Total stock-based compensation expense $ 2,240 |
Basic and Diluted Loss per Co21
Basic and Diluted Loss per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Summary of Securities Excluded From Calculation of Weighted Average Common Shares | 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 March 31, 2018 2017 Convertible preferred stock: Series A convertible preferred stock — 12,043,108 Series B convertible preferred stock — 6,120,050 Warrant to purchase Series A convertible preferred stock — 84,360 Stock options 6,367,978 7,007,328 Restricted stock units 849,550 — |
Segment and Geographic Inform22
Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Summary of Revenue By Geography | The following table summarizes revenue by geography for the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 Domestic $ 34,481 $ 29,647 International 17,215 8,682 Total $ 51,696 $ 38,329 |
Significant Accounting Polici23
Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)agency | Mar. 31, 2017USD ($)agency | Dec. 31, 2017USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Percentage of license revenue (less than) | 0.10% | 1.20% | |
Change in allowance for doubtful accounts | $ 0 | $ 0 | |
Commission expense | $ 2,700,000 | $ 2,600,000 | |
Customer Concentration Risk | Sales Revenue, Net | Foreign Customers | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 33.30% | 22.70% | |
Customer Concentration Risk | Sales Revenue, Net | Government Agencies | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 12.30% | 16.50% | |
Customer Concentration Risk | Sales Revenue, Net | Federal Government Agencies | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 6.40% | 10.80% | |
Number of federal government agencies | agency | 3 | 3 | |
Customer Concentration Risk | Accounts Receivable | Federal Government Agencies | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 6.20% | 7.00% | |
Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
SaaS Subscriptions contracts term | 1 year | ||
Term license subscription contracts term | 1 year | ||
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
SaaS Subscriptions contracts term | 5 years | ||
Term license subscription contracts term | 5 years |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued contract labor costs | $ 3,459 | $ 3,424 |
Accrued hosting costs | 1,081 | 466 |
Accrued audit and tax professional fees | 285 | 248 |
Accrued reimbursable employee expenses | 273 | 286 |
Accrued marketing and tradeshow expenses | 197 | 128 |
Other accrued expenses | 1,764 | 1,915 |
Total | $ 7,059 | $ 6,467 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | |
Nov. 30, 2017 | Mar. 31, 2018 | Apr. 30, 2017 | |
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Credit facility | $ 20,000,000 | $ 20,000,000 | $ 5,000,000 |
Term Loan | |||
Line of Credit Facility [Line Items] | |||
Credit facility | 20,000,000 | ||
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 | ||
Minimum | |||
Line of Credit Facility [Line Items] | |||
Unused credit facility fee | 0.15% | ||
Quick ratio | 135.00% | ||
Minimum | London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Interest rate margin | 2.00% | ||
Minimum | Prime Rate | |||
Line of Credit Facility [Line Items] | |||
Interest rate margin | 1.00% | ||
Maximum | |||
Line of Credit Facility [Line Items] | |||
Unused credit facility fee | 0.25% | ||
Maximum | London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Interest rate margin | 2.50% | ||
Maximum | Prime Rate | |||
Line of Credit Facility [Line Items] | |||
Interest rate margin | 1.50% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Taxes [Line Items] | ||
Effective tax rate | (2.30%) | (3.80%) |
Net unrecognized tax benefits which would impact effective tax rate if recognized | $ 0.7 | |
Earliest Tax Year | ||
Income Taxes [Line Items] | ||
Open tax year | 2,014 | |
Latest Tax Year | ||
Income Taxes [Line Items] | ||
Open tax year | 2,017 | |
Minimum | Subsidiaries | ||
Income Taxes [Line Items] | ||
Effective tax rate | 0.00% | |
Maximum | Subsidiaries | ||
Income Taxes [Line Items] | ||
Effective tax rate | 33.00% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | |
May 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Service period for option exercise | 5 years | ||
Stock-based compensation expense | $ 2,240,000 | $ 0 | |
Granted | $ 0 | $ 4.88 | |
Vested | $ 300,000 | $ 0 | |
Compensation cost related to nonvested stock options not yet recognized | $ 9,600,000 | ||
Unrecognized compensation cost related to nonvested stock option recognized over weighted average period, in years | 2 years 8 months | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation cost related to unvested restricted stock units | $ 18,300,000 | ||
Weighted average remaining vesting period | 2 years 7 months 8 days | ||
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 | ||
2017 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available to be issued | 5,688,820 | ||
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 | 6,571,822 | |
2007 Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available to be issued | 421,442 | ||
Number of shares available for grants | 0 | ||
Period for which options can be granted | 10 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Estimate the Fair Value of Stock Options Granted (Detail) | 3 Months Ended |
Mar. 31, 2017 | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Risk-free interest rate | 2.20% |
Expected term (in years) | 6 years 6 months |
Expected volatility | 40.60% |
Expected dividend yield | 0.00% |
Stock-Based Compensation - Su29
Stock-Based Compensation - Summary of the Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | ||
January 1, 2018 | 7,010,887 | |
Granted | 0 | |
Exercised | (607,349) | |
Canceled | (35,560) | |
March 31, 2018 | 6,367,978 | 7,010,887 |
March 31, 2018 | 2,287,058 | |
Weighted Average Exercise Price | ||
January 1, 2018 | $ 6.36 | |
Granted | 0 | |
Exercised | 1.62 | |
Canceled | 9.95 | |
March 31, 2018 | 6.79 | $ 6.36 |
March 31, 2018 | $ 2.43 | |
Weighted Average Remaining Contractual Term (Years) | ||
January 1, 2018 | 6 years 8 months 12 days | 6 years 7 months |
March 31, 2018 | 6 years 8 months 12 days | 6 years 7 months |
March 31, 2018 | 4 years 1 month | |
Aggregate Intrinsic Value (in thousands) | ||
January 1, 2018 | $ 176,122 | |
Exercised | 16,321 | |
March 31, 2018 | 117,104 | $ 176,122 |
March 31, 2018 | $ 52,025 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Restricted Stock Unit Activity (Details) - Restricted Stock Units | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Shares | |
Non-vested outstanding at January 1, 2018 | shares | 731,975 |
Granted | shares | 119,425 |
Vested | shares | 0 |
Canceled | shares | (1,850) |
Non-vested outstanding at March 31, 2018 | shares | 849,550 |
Weighted Average Grant Date Fair Value | |
Non-vested outstanding at January 1, 2018 | $ / shares | $ 22.16 |
Granted | $ / shares | 30.46 |
Vested | $ / shares | 0 |
Canceled | $ / shares | 24.51 |
Non-vested outstanding at March 31, 2018 | $ / shares | $ 23.32 |
Stock-Based Compensation - Sc31
Stock-Based Compensation - Schedule of Stock-based Compensation Expense (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | $ 2,240,000 | $ 0 |
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 | 1,254,000 | |
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 | 92,000 | |
Stock-based Compensation Expense Related to Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | $ 894,000 |
Stock-Based Compensation - Sc32
Stock-Based Compensation - Schedule of Stock-based Compensation Expense Included in Condensed Consolidated Statements of Operations (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | $ 2,240,000 | $ 0 |
Subscriptions, software and support | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 110,000 | |
Professional services | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 220,000 | |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 507,000 | |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 391,000 | |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | $ 1,012,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 3 Months Ended | |
Mar. 31, 2018vote$ / sharesshares | Dec. 31, 2017$ / sharesshares | |
Class of Stock [Line Items] | ||
Common stock, par value | $ / shares | $ 0.0001 | |
Class B Common Stock | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 42,318,846 | 47,569,796 |
Common stock, shares outstanding | 42,318,846 | 47,569,796 |
Number of votes entitled to stockholders per share | vote | 10 | |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 18,891,315 | 13,030,081 |
Common stock, shares outstanding | 18,891,315 | 13,030,081 |
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% |
Basic and Diluted Loss per Co34
Basic and Diluted Loss per Common Share - Summary of Securities Excluded From Calculation of Weighted Average Common Shares Outstanding (Detail) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
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 |
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 |
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 |
Employee Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Convertible preferred stock (in shares) | 6,367,978 | 7,007,328 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Convertible preferred stock (in shares) | 849,550 | 0 |
Segment and Geographic Inform35
Segment and Geographic Information - Summary of Revenues By Geography (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 51,696 | $ 38,329 |
Domestic | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 34,481 | 29,647 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 17,215 | $ 8,682 |
Segment and Geographic Inform36
Segment and Geographic Information - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Sales Revenue, Net | Geographic Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Concentration risk, percentage | 10.60% | 10.00% |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event | Apr. 17, 2018USD ($)ft²extension_period |
Subsequent Event [Line Items] | |
Leased square feet | ft² | 176,000 |
Lease term | 150 months |
Number of extension periods | extension_period | 2 |
Term of extension period | 5 years |
Operating Lease, Period of No Rent Due | 15 years |
Total obligation for rent over term of the lease | $ 450,835 |
Potential annual rent increase (percentage) | 3.00% |
Initial lease term, period of no rent due | 12 months |
Additional square feet, Must-Take Space | ft² | 28,805 |
Aggregate base rent payable | $ 81,900,000 |
Must-Take Space | |
Subsequent Event [Line Items] | |
Total obligation for rent over term of the lease | $ 73,693 |
Potential annual rent increase (percentage) | 3.00% |