Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 29, 2024 | |
Document and Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38098 | |
Entity Registrant Name | APPIAN CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 54-1956084 | |
Entity Address, Address Line One | 7950 Jones Branch Drive | |
Entity Address, City or Town | McLean | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22102 | |
City Area Code | (703) | |
Local Phone Number | 442-8844 | |
Title of 12(b) Security | Class A Common Stock | |
Trading Symbol | APPN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001441683 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 41,153,021 | |
Class B Common Stock | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 31,195,739 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 120,787 | $ 149,351 |
Short-term investments and marketable securities | 28,345 | 9,653 |
Accounts receivable, net of allowances of $2,652 and $2,606, respectively | 131,693 | 171,561 |
Deferred commissions, current | 34,899 | 34,261 |
Prepaid expenses and other current assets | 48,261 | 49,529 |
Total current assets | 363,985 | 414,355 |
Property and equipment, net of accumulated depreciation of $29,011 and $25,141, respectively | 40,841 | 42,682 |
Goodwill | 26,305 | 27,106 |
Intangible assets, net of accumulated amortization of $4,763 and $4,152, respectively | 3,040 | 3,889 |
Right-of-use assets for operating leases | 32,848 | 39,975 |
Deferred commissions, net of current portion | 56,231 | 59,764 |
Deferred tax assets | 4,368 | 3,453 |
Other assets | 26,963 | 36,279 |
Total assets | 554,581 | 627,503 |
Current liabilities | ||
Accounts payable | 5,739 | 6,174 |
Accrued expenses | 13,797 | 11,046 |
Accrued compensation and related benefits | 33,843 | 38,003 |
Deferred revenue | 218,233 | 235,992 |
Debt | 8,348 | 66,368 |
Operating lease liabilities | 12,323 | 11,698 |
Other current liabilities | 1,405 | 1,891 |
Total current liabilities | 293,688 | 371,172 |
Long-term debt | 245,625 | 140,221 |
Non-current operating lease liabilities | 55,796 | 59,067 |
Deferred revenue, non-current | 4,695 | 4,700 |
Deferred tax liabilities | 0 | 2 |
Other non-current liabilities | 435 | 0 |
Total liabilities | 600,239 | 575,162 |
Stockholders’ (deficit) equity | ||
Additional paid-in capital | 608,528 | 595,781 |
Accumulated other comprehensive loss | (11,812) | (23,555) |
Accumulated deficit | (596,407) | (519,892) |
Treasury stock at cost, 1,213,686 shares as of June 30, 2024 | (45,974) | 0 |
Total stockholders’ (deficit) equity | (45,658) | 52,341 |
Total liabilities and stockholders’ (deficit) equity | 554,581 | 627,503 |
Class A Common Stock | ||
Stockholders’ (deficit) equity | ||
Common stock | 4 | 4 |
Class B Common Stock | ||
Stockholders’ (deficit) equity | ||
Common stock | $ 3 | $ 3 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Allowance for doubtful accounts | $ 2,652 | $ 2,606 |
Accumulated depreciation | 29,011 | 25,141 |
Finite-lived intangible assets, accumulated amortization | $ 4,763 | $ 4,152 |
Treasury stock, shares (in shares) | 1,213,686 | |
Class A Common Stock | ||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 42,359,967 | 42,169,970 |
Class B Common Stock | ||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 31,196,796 | 31,196,796 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue | ||||
Total revenue | $ 146,450 | $ 127,715 | $ 296,285 | $ 262,950 |
Cost of revenue | ||||
Total cost of revenue | 39,413 | 36,845 | 77,410 | 72,938 |
Gross profit | 107,037 | 90,870 | 218,875 | 190,012 |
Operating expenses | ||||
Sales and marketing | 66,592 | 62,581 | 124,748 | 125,671 |
Research and development | 39,446 | 39,743 | 79,217 | 81,367 |
General and administrative | 40,193 | 29,208 | 73,639 | 58,902 |
Total operating expenses | 146,231 | 131,532 | 277,604 | 265,940 |
Operating loss | (39,194) | (40,662) | (58,729) | (75,928) |
Other non-operating expense | ||||
Other (income) expense, net | (1,545) | (3,886) | 6,662 | (6,576) |
Interest expense | 6,107 | 4,755 | 11,753 | 7,873 |
Total other non-operating expense | 4,562 | 869 | 18,415 | 1,297 |
Loss before income taxes | (43,756) | (41,531) | (77,144) | (77,225) |
Income tax (benefit) expense | (164) | 824 | (629) | 1,959 |
Net loss | $ (43,592) | $ (42,355) | $ (76,515) | $ (79,184) |
Net loss per share: | ||||
Basic (in usd per share) | $ (0.60) | $ (0.58) | $ (1.05) | $ (1.09) |
Diluted (in usd per share) | $ (0.60) | $ (0.58) | $ (1.05) | $ (1.09) |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 72,300 | 73,041 | 72,800 | 72,956 |
Diluted (in shares) | 72,300 | 73,041 | 72,800 | 72,956 |
Subscriptions | ||||
Revenue | ||||
Total revenue | $ 112,974 | $ 93,794 | $ 230,668 | $ 192,751 |
Cost of revenue | ||||
Total cost of revenue | 13,262 | 10,779 | 25,532 | 21,227 |
Professional services | ||||
Revenue | ||||
Total revenue | 33,476 | 33,921 | 65,617 | 70,199 |
Cost of revenue | ||||
Total cost of revenue | $ 26,151 | $ 26,066 | $ 51,878 | $ 51,711 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (43,592) | $ (42,355) | $ (76,515) | $ (79,184) |
Comprehensive loss, net of income taxes | ||||
Foreign currency translation adjustments | (1,097) | (3,127) | 11,746 | (3,873) |
Unrealized (losses) gains on available-for-sale securities | (7) | (45) | (3) | 1 |
Other comprehensive loss, net of income taxes | $ (44,696) | $ (45,527) | $ (64,772) | $ (83,056) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2022 | 72,817,887 | |||||
Beginning balance at Dec. 31, 2022 | $ 145,700 | $ 7 | $ 561,390 | $ (7,246) | $ (408,451) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (36,829) | (36,829) | ||||
Issuance of common stock to directors (in shares) | 6,713 | |||||
Vesting of restricted stock units (in shares) | 111,296 | |||||
Vesting of restricted stock units | (2,959) | (2,959) | ||||
Exercise of stock options (in shares) | 19,483 | |||||
Exercise of stock options | 131 | 131 | ||||
Stock-based compensation expense | 11,056 | 11,056 | ||||
Other comprehensive income (loss) | (700) | (700) | ||||
Ending balance (in shares) at Mar. 31, 2023 | 72,955,379 | |||||
Ending balance at Mar. 31, 2023 | 116,399 | $ 7 | 569,618 | (7,946) | (445,280) | |
Beginning balance (in shares) at Dec. 31, 2022 | 72,817,887 | |||||
Beginning balance at Dec. 31, 2022 | 145,700 | $ 7 | 561,390 | (7,246) | (408,451) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (79,184) | |||||
Ending balance (in shares) at Jun. 30, 2023 | 73,113,333 | |||||
Ending balance at Jun. 30, 2023 | 80,632 | $ 7 | 579,378 | (11,118) | (487,635) | |
Beginning balance (in shares) at Mar. 31, 2023 | 72,955,379 | |||||
Beginning balance at Mar. 31, 2023 | 116,399 | $ 7 | 569,618 | (7,946) | (445,280) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (42,355) | (42,355) | ||||
Issuance of common stock to directors (in shares) | 4,928 | |||||
Vesting of restricted stock units (in shares) | 99,836 | |||||
Vesting of restricted stock units | (1,816) | (1,816) | ||||
Exercise of stock options (in shares) | 53,190 | |||||
Exercise of stock options | 428 | 428 | ||||
Stock-based compensation expense | 11,148 | 11,148 | ||||
Other comprehensive income (loss) | (3,172) | (3,172) | ||||
Ending balance (in shares) at Jun. 30, 2023 | 73,113,333 | |||||
Ending balance at Jun. 30, 2023 | 80,632 | $ 7 | 579,378 | (11,118) | (487,635) | |
Beginning balance (in shares) at Dec. 31, 2023 | 73,366,766 | |||||
Beginning balance at Dec. 31, 2023 | 52,341 | $ 7 | 595,781 | (23,555) | (519,892) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (32,923) | (32,923) | ||||
Issuance of common stock to directors (in shares) | 4,974 | |||||
Vesting of restricted stock units (in shares) | 141,563 | |||||
Vesting of restricted stock units | (2,862) | (2,862) | ||||
Exercise of stock options (in shares) | 43,460 | |||||
Exercise of stock options | 345 | 345 | ||||
Repurchase of common stock (in shares) | (1,320,531) | |||||
Repurchase of common stock | (50,019) | (50,019) | ||||
Stock-based compensation expense | 10,606 | 10,606 | ||||
Other comprehensive income (loss) | 12,847 | 12,847 | ||||
Ending balance (in shares) at Mar. 31, 2024 | 72,236,232 | |||||
Ending balance at Mar. 31, 2024 | (9,665) | $ 7 | 603,870 | (10,708) | (552,815) | (50,019) |
Beginning balance (in shares) at Dec. 31, 2023 | 73,366,766 | |||||
Beginning balance at Dec. 31, 2023 | 52,341 | $ 7 | 595,781 | (23,555) | (519,892) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | $ (76,515) | |||||
Ending balance (in shares) at Jun. 30, 2024 | 72,300,000 | 72,343,077 | ||||
Ending balance at Jun. 30, 2024 | $ (45,658) | $ 7 | 608,528 | (11,812) | (596,407) | (45,974) |
Beginning balance (in shares) at Mar. 31, 2024 | 72,236,232 | |||||
Beginning balance at Mar. 31, 2024 | (9,665) | $ 7 | 603,870 | (10,708) | (552,815) | (50,019) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (43,592) | (43,592) | ||||
Issuance of common stock to directors (in shares) | 4,692 | |||||
Issuance of common stock to directors | 0 | (178) | 178 | |||
Vesting of restricted stock units (in shares) | 77,116 | |||||
Vesting of restricted stock units | (1,360) | (4,279) | 2,919 | |||
Exercise of stock options (in shares) | 25,037 | |||||
Exercise of stock options | 163 | (785) | 948 | |||
Stock-based compensation expense | 9,900 | 9,900 | ||||
Other comprehensive income (loss) | $ (1,104) | (1,104) | ||||
Ending balance (in shares) at Jun. 30, 2024 | 72,300,000 | 72,343,077 | ||||
Ending balance at Jun. 30, 2024 | $ (45,658) | $ 7 | $ 608,528 | $ (11,812) | $ (596,407) | $ (45,974) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities | ||
Net loss | $ (76,515) | $ (79,184) |
Adjustments to reconcile net loss to net cash provided by (used by) operating activities | ||
Stock-based compensation | 20,506 | 22,204 |
Depreciation expense and amortization of intangible assets | 4,941 | 4,705 |
Lease impairment charges | 5,462 | 0 |
Bad debt expense | 253 | 419 |
Amortization of debt issuance costs | 290 | 223 |
Benefit for deferred income taxes | (982) | (518) |
Foreign currency transaction losses, net | 12,787 | 0 |
Changes in assets and liabilities | ||
Accounts receivable | 37,114 | 28,663 |
Prepaid expenses and other assets | 10,524 | (4,924) |
Deferred commissions | 2,897 | 123 |
Accounts payable and accrued expenses | 2,882 | 719 |
Accrued compensation and related benefits | (3,808) | (6,240) |
Other current and non-current liabilities | 121 | 1,066 |
Deferred revenue | (14,267) | (6,574) |
Operating lease assets and liabilities | (954) | 2,116 |
Net cash provided by (used by) operating activities | 1,251 | (37,202) |
Cash flows from investing activities | ||
Proceeds from maturities of investments | 9,657 | 35,876 |
Payments for investments | (28,354) | (53,443) |
Purchases of property and equipment | (2,932) | (7,805) |
Net cash used by investing activities | (21,629) | (25,372) |
Cash flows from financing activities | ||
Proceeds from borrowings | 50,000 | 92,000 |
Payments for debt issuance costs | (463) | (411) |
Debt repayments | (2,500) | (1,687) |
Repurchase of common stock | (50,019) | 0 |
Payments for employee taxes related to the net share settlement of equity awards | (4,221) | (4,775) |
Proceeds from exercise of common stock options | 508 | 559 |
Net cash (used by) provided by financing activities | (6,695) | 85,686 |
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | (1,491) | 309 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (28,564) | 23,421 |
Cash, cash equivalents, and restricted cash at beginning of period | 149,351 | 150,381 |
Cash, cash equivalents, and restricted cash at end of period | 120,787 | 173,802 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 11,168 | 2,731 |
Cash paid for income taxes | 1,436 | 1,472 |
Supplemental disclosure of non-cash investing and financing activities | ||
Accrued capital expenditures | $ 182 | $ 392 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business Appian Corporation (together with its subsidiaries, “Appian,” the “Company,” “we,” or “our”) is a software company that automates business processes. The Appian AI Process Platform includes everything you need to design, automate, and optimize even the most complex processes, from start to finish. The world's most innovative organizations trust Appian to improve their workflows, unify data, and optimize operations—resulting in better growth and superior customer experiences. We are headquartered in McLean, Virginia and operate both in the United States and internationally, including Australia, Canada, France, Germany, India, Italy, Japan, Mexico, the Netherlands, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. |
Accounting Policies
Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Accounting Policies | 2. Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements and footnotes include the accounts of Appian and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial reporting. 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’ (deficit) equity, and cash flows. All intercompany accounts and transactions have been eliminated in consolidation. 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 unaudited 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, 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 15, 2024. Use of Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in these consolidated financial statements and accompanying notes. Although we believe the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. Significant estimates embedded in the consolidated financial statements include, but are not limited to, revenue recognition, income taxes and the related valuation allowance established against deferred tax assets, the amortization period of deferred commissions, the amortization period of the cost to obtain the judgment preservation insurance policy (as discussed in Note 12), lease impairments, and stock-based compensation. Revenue Recognition Refer to Note 3 for a detailed discussion on specific revenue recognition principles related to our major revenue streams. Concentration of Credit and Customer Risk Our financial instruments exposed to concentration of credit and customer risk consist primarily of cash, cash equivalents, accounts receivable, and our short-term investments. Deposits held with banks may exceed the amount of insurance provided on such deposits; however, we believe the financial institutions holding 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. Revenue generated from government agencies represented 22.6% and 22.1% of our revenue for the three and six months ended June 30, 2024, respectively. Additionally, 38.2% and 37.7% of our revenue during the three and six months ended June 30, 2024, respectively, was generated from international customers. Revenue generated from government agencies represented 20.1% and 20.3% of our revenue for the three and six months ended June 30, 2023, respectively. Additionally, 38.4% and 35.8% of our revenue during the three and six months ended June 30, 2023, respectively, was generated from international customers. No single end-customer accounted for more than 10% of our total revenue in the three and six months ended June 30, 2024, or 2023. As of June 30, 2024, we had one customer whose balance comprised 15% of total accounts receivable. Cash, Cash Equivalents, and Restricted Cash We consider all highly liquid investments with original maturities of three months or less, as well as overnight repurchase agreements, to be cash equivalents. Restricted cash consisted of cash designated to settle an escrow liability stemming from a holdback agreement related to our acquisition of Lana Labs GmbH. We paid the remaining amount owed on August 11, 2023. The following table presents a reconciliation of cash, cash equivalents, and restricted cash as presented in the consolidated statements of cash flows (in thousands): As of June 30, 2024 December 31, 2023 June 30, 2023 December 31, 2022 Cash and cash equivalents $ 120,787 $ 149,351 $ 171,530 $ 148,132 Restricted cash, current — — 2,272 2,249 Total cash, cash equivalents, and restricted cash $ 120,787 $ 149,351 $ 173,802 $ 150,381 Allowance for Doubtful Accounts Accounts receivable and unbilled revenue 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 and incorporates an estimation of expected lifetime credit losses on our receivables. 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. The allowance for doubtful accounts totaled $2.7 million and $2.6 million as of June 30, 2024 and December 31, 2023, respectively. Deferred Commissions We capitalize costs of obtaining a contract with a customer, which consist of sales commissions paid to our sales team and the associated incremental payroll taxes. These costs are recorded as deferred commissions in the consolidated balance sheets. Costs to obtain a contract for a new customer or upsell an existing customer are amortized over an estimated economic life of five years as sales commissions on initial sales are not commensurate with sales commissions on contract renewals. Commissions paid relating to contract renewals are deferred and amortized over the related renewal period. We determine the estimated economic life based on both qualitative and quantitative factors such as expected renewals, product life cycles, contractual terms, and customer attrition. We periodically review the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the estimated economic life. Costs to obtain a contract for professional services arrangements are expensed as incurred as the contractual period of our professional services arrangements are one year or less. Amortization associated with deferred commissions is recorded to sales and marketing expense in our consolidated statements of operations. Total commission expense was $11.5 million and $22.9 million for the three and six months ended June 30, 2024, respectively. Total commission expense was $11.3 million and $22.3 million for the three and six months ended June 30, 2023, respectively. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Significant additions or improvements extending the useful life of an asset are capitalized, while repairs and maintenance costs which do not significantly improve the related assets or extend their useful lives are charged to expense as incurred. The estimated useful lives of our property and equipment are generally 3 years for computer software, computer hardware, and internally developed software, 5 years for equipment, and 10 years for office furniture and fixtures. Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term. Severance Costs In June 2024, we approved a reduction of the Company’s workforce by approximately 150 full-time employees, intended to align sales and marketing teams with our go-to-market strategy and improve profitability. We incurred severance costs related to the involuntary reductions in our workforce. Costs related to benefits provided in accordance with mutually understood and ongoing agreements are recognized when an obligation has been incurred, it is probable the benefits will be paid, and the amount to be paid can be reasonably estimated. We incurred severance costs of $5.5 million during the three and six months ended June 30, 2024. The majority of the costs incurred are expected to be paid to the impacted employees by December 31, 2024. In 2023, severance costs related to prior actions totaled $2.1 million and $6.3 million for the three and six months ended June 30, 2023, respectively. Treasury Stock We account for treasury stock under the cost method. During the three and six months ended June 30, 2024, we have reissued treasury stock to satisfy employee stock option exercises and vesting of restricted stock units. Because we are in an accumulated deficit position, all reissuances of treasury stock have been recorded as a decrease to additional-paid-in-capital in our consolidated balance sheets. Recent Accounting Pronouncements Adopted We have not adopted any new accounting guidance in 2024 that has had a material impact on our consolidated financial statements or disclosures. Not Yet Adopted In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvement to Reportable Segment Disclosures, which enhances the disclosure requirements for operating segments in our annual and interim consolidated financial statements. The new guidance is effective for us beginning with our annual reporting for fiscal year 2024 and for interim period reporting beginning in fiscal year 2025 and will be applied on a retrospective basis. Early adoption is permitted. The new ASU requires public companies to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires public companies to disclose the title and position of the Chief Operating Decision Maker. The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. This guidance also applies to public entities that have only one segment. This ASU will only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition. In December 2023, the FASB issued ASU 2023-09, Income Tax (Topic 740): Improvement to Income Tax Disclosures, which requires public companies to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. The new guidance will be effective for our annual reporting for fiscal year 2025 on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. This ASU will only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition. In March 2024, the SEC issued its final climate disclosure rule, which requires the disclosure of material Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics in annual reports if they are reasonably likely to have a material impact on the Company’s business. For large accelerated filers, disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025. Subsequent to issuance, the rules became the subject of litigation, and the SEC has issued a stay to allow the legal process to proceed. We are currently evaluating the impact these rules will have on our financial statements and related disclosures and will monitor the litigation progress for possible impacts on the disclosure requirements under the rules. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 3. Revenue Revenue Recognition We generate subscriptions revenue primarily through the sale of cloud subscriptions bundled with maintenance and support and hosting services as well as term license subscriptions bundled with maintenance and support. We generate professional services revenue from fees for our consulting services, including application development and deployment assistance as well as training related to our platform. The following table summarizes revenue recorded during the three and six months ended June 30, 2024 and 2023 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Cloud subscriptions $ 88,428 $ 74,442 $ 175,031 $ 144,134 Term license subscriptions 17,227 12,999 40,998 36,150 Maintenance and support 7,319 6,353 14,639 12,467 Total subscriptions 112,974 93,794 230,668 192,751 Professional services 33,476 33,921 65,617 70,199 Total revenue $ 146,450 $ 127,715 $ 296,285 $ 262,950 Performance Obligations and Timing of Revenue Recognition We primarily sell products and services that fall into the categories discussed below. Each category contains one or more performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from the product or service on its own or together with readily available resources, including those purchased separately from us) and distinct within the context of the contract (i.e., separately identified from other promises in the contract) or (2) a series of distinct products or services that are substantially the same and have the same pattern of transfer to the customer. Our term license subscriptions are delivered at a point in time while our cloud subscriptions, maintenance and support, and professional services are delivered over time. Subscriptions Revenue Subscriptions revenue is primarily related to (1) cloud subscriptions bundled with maintenance and support and hosting services and (2) term license subscriptions bundled with maintenance and support. We generally charge subscription fees on a per-user basis or through non-user based single application licenses. We bill customers and collect payment for subscriptions to our platform in advance on an annual, quarterly, or monthly basis. In certain instances, our customers have paid their entire contract up front. Cloud Subscriptions We generate cloud-based subscriptions revenue primarily from the sales of subscriptions to access our cloud offering, together with related support services to our customers. We perform all required maintenance and support for our cloud offering. Revenue is recognized on a ratable basis over the contract term beginning on the date the service is made available to the customer. Our cloud-based subscription contracts generally have a term of one Term License Subscriptions Our term license subscriptions revenue is derived from customers with on-premises installations of our platform. The majority of our term license contracts are one year in length. Although term license subscriptions are sold with maintenance and support, the software is fully functional at the beginning of the subscription and is considered a distinct performance obligation. If a cloud-based subscription includes the right for the customer to take possession of the license, the revenue is treated as a term license. Revenue from term license subscriptions is recognized when control of the software license has transferred to the customer, which is the later of delivery or commencement of the contract term. Maintenance and Support Maintenance and support subscriptions include both technical support and when-and-if-available software upgrades, which are treated as a single performance obligation as they are considered a series of distinct services that are substantially the same and have the same duration and measure of progress. Revenue from maintenance and support is recognized ratably over the contract period, which is the period over which the customer has continuous access to maintenance and support. Professional Services Revenue Our professional services revenue is comprised of fees for consulting services, including application development and deployment assistance as well as training services related to our platform. Our professional services are considered distinct performance obligations when sold standalone or with other products. Consulting Services We sell consulting services to assist customers in planning and executing the deployment of our software. Customers are not required to use consulting services to fully benefit from the software. Consulting services are regularly sold on a standalone basis and most often as either (1) under a fixed-fee arrangement or (2) on a time and materials basis. We also sell advisory services on a subscription basis to support customers or partners with their development and deployment. Consulting services contracts are considered separate performance obligations because they do not integrate with each other or with other products and services to deliver a combined output to the customer, do not modify or customize (or are not modified or customized by) each other or other products and services, and do not affect the customer's ability to use other consulting offerings or other products and services. Revenue under consulting contracts is recognized over time as services are delivered. Revenue from subscription-based consulting contracts is recognized ratably over the contract period. For time and materials-based consulting contracts, we have elected the practical expedient of recognizing revenue upon invoicing since the invoiced amount corresponds directly to the value of our service to date. Training Services We sell various training services to our customers. Training services are sold in the form of prepaid training credits that are redeemed based on a fixed rate per course. Training revenue is recognized when the associated training services are delivered. Significant Judgments and Estimates Determining the Transaction Price The transaction price is the total amount of consideration we expect to receive in exchange for the service offerings in a contract and may include both fixed and variable components. Variable consideration is included in the transaction price to the extent it is probable a significant reversal will not occur. The amount of variable consideration excluded from the transaction price for the three and six months ended June 30, 2024 and 2023 was immaterial. Our estimates of variable consideration are also subject to subsequent true-up adjustments and may result in changes to transaction prices; however, such true-up adjustments are not expected to be material. Allocating the Transaction Price Based on Standalone Selling Prices (“SSP”) We allocate the transaction price to each performance obligation in a contract based on its relative SSP. The SSP is the observable price at which we sell the product or service separately. In the absence of observable pricing, we estimate SSP using the residual approach. We establish SSP as follows: 1. Cloud subscriptions - Given the highly variable selling price of our cloud subscriptions, we establish the SSP of our cloud subscriptions using a residual approach after first determining the SSP of consulting and training services. We have concluded the residual approach to estimating the SSP of our cloud subscriptions is an appropriate allocation of the transaction price. 2. Term license subscriptions - Given the highly variable selling price of our term license subscriptions, we have established the SSP of term license subscriptions using a residual approach after first determining the SSP of maintenance and support. Maintenance and support is sold on a standalone basis in conjunction with renewals of our legacy perpetual software licenses and within a narrow range of the net license fee. Because an economic relationship exists between the license and maintenance and support, we have concluded the residual approach to estimating the SSP of term license subscriptions is an appropriate allocation of the transaction price. 3. Maintenance and support - We establish the SSP of maintenance and support as a percentage of the stated net subscription fee based on observable pricing of maintenance and support renewals from our legacy perpetual software licenses. 4. Consulting and training services - The SSP of consulting and training services is established based on the observable pricing of standalone sales within each geographic region where the services are sold. Contract Balances Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to our contracts with customers. Contract assets primarily relate to unbilled amounts for contracts with customers for which the amount of revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional. Contract liabilities consist of deferred revenue and include payments received in advance of the satisfaction of performance obligations. Deferred revenue is then recognized as the revenue recognition criteria are met. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as non-current. The following table sets forth our contract asset and contract liability balances (in thousands): As of June 30, 2024 December 31, 2023 June 30, 2023 December 31, 2022 Contract assets, current * $ 8,865 $ 12,052 $ 11,870 $ 12,540 Contract assets, non-current * 1,072 915 1,069 1,720 Total contract assets $ 9,937 $ 12,967 $ 12,939 $ 14,260 Deferred revenue, current $ 218,233 $ 235,992 $ 192,164 $ 194,768 Deferred revenue, non-current 4,695 4,700 3,734 5,556 Total contract liabilities $ 222,928 $ 240,692 $ 195,898 $ 200,324 * Current and non-current contract assets are reported as components of the ‘Prepaid expenses and other current assets’ and ‘Other assets’ line items, respectively, in our consolidated balance sheets. Revenue recognized from amounts included in contract liabilities at the beginning of the period totaled $166.6 million and $141.3 million for the six months ended June 30, 2024 and 2023, respectively. Transaction Price Allocated to the Remaining Performance Obligations As of June 30, 2024, we had an aggregate transaction price of $469.4 million allocated to unsatisfied performance obligations. We expect to recognize $300.3 million of this balance as revenue over the next 12 months with the remaining amount recognized thereafter. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Leases | 4. Leases As of June 30, 2024, our lease portfolio consists entirely of operating leases for corporate offices. Our operating leases have remaining lease terms with various expiration dates through 2031, and some leases include options to extend the term for up to an additional 10 years. Lease Costs Expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. We have lease agreements which require payments for lease and non-lease components (i.e., common area maintenance) that are accounted for as a single lease component. Variable lease payment amounts that cannot be determined at the commencement of the lease such as maintenance costs, utilities, and service charges, are not included in right-of-use (“ROU”) assets or lease liabilities but rather are expensed as incurred and recorded as variable lease expense. We often receive customary incentives from our landlords such as tenant improvement allowances (“TIAs”) and rent abatement periods, which effectively reduce total lease payments owed for the leases. The following table sets forth the components of lease expense for the three and six months ended June 30, 2024 and 2023 (in thousands, exclusive of sublease income): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Operating lease cost $ 2,410 $ 2,145 $ 4,821 $ 4,291 Short-term lease cost 433 423 765 788 Variable lease cost 1,335 959 2,648 1,985 Total $ 4,178 $ 3,527 $ 8,234 $ 7,064 Sublease income totaled $0.3 million and $0.6 million for the three and six months ended June 30, 2024, respectively. Sublease income totaled $0.3 million and $0.7 million for the three and six months ended June 30, 2023, respectively. Lease Impairment Charges In connection with the headcount reductions approved in June 2024, and our continued efforts to streamline operations and maximize efficiencies, we have initiated supplemental actions to reduce the footprint of our leased office spaces. Pursuant to these initiatives, we have amended and extended the terms of our existing sublease agreement and are seeking a sublease for an additional floor within our corporate headquarters facility. During the three months ended June 30, 2024, we recorded non-cash lease impairment charges of $5.5 million within general and administrative expenses in our consolidated statements of operations related to the two ROU assets. The non-cash lease impairment charges represent the amount that the carrying value of the two asset groups exceeded their estimated fair values. The asset groups represented two separate floors within our corporate headquarters facility. The fair values of the two asset groups were measured using discounted cash flow models based on market rents and sublease incomes projected over the remaining lease terms. Supplemental Lease Information Supplemental balance sheet information related to operating leases as of June 30, 2024 and December 31, 2023 is presented in the following table (in thousands, except for lease term and discount rate): As of June 30, 2024 December 31, 2023 Right-of-use assets for operating leases $ 32,848 $ 39,975 Operating lease liabilities, current $ 12,323 $ 11,698 Operating lease liabilities, net of current portion 55,796 59,067 Total operating lease liabilities $ 68,119 $ 70,765 Weighted average remaining lease term (in years) 6.9 7.4 Weighted average discount rate 9.4 % 9.4 % Supplemental cash flow and expense information related to operating leases for the three and six months ended June 30, 2024 and 2023 is shown below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Operating cash outflows for operating leases $ 3,130 $ 988 $ 5,773 $ 2,120 Amortization of operating lease right-of-use assets 815 591 1,598 1,243 Interest expense on operating lease liabilities 1,595 1,552 3,224 3,047 There were no TIA reimbursements for the three and six months ended June 30, 2024, while TIA reimbursements totaled $0.9 million and $1.5 million for the three and six months ended June 30, 2023, respectively. A summary of our future minimum lease commitments under non-cancellable leases as of June 30, 2024 is shown below (in thousands): Operating Leases 2024 (excluding the six months ended June 30, 2024) $ 6,376 2025 12,958 2026 13,307 2027 13,559 2028 12,460 Thereafter 34,840 Total lease payments 93,500 Less: imputed interest (25,381) Total $ 68,119 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets The following table details the changes in goodwill during the six months ended June 30, 2024 and fiscal year ended December 31, 2023 (in thousands): Carrying Amount Balance as of December 31, 2022 $ 26,349 Foreign currency translation adjustments 757 Balance as of December 31, 2023 27,106 Foreign currency translation adjustments (801) Balance as of June 30, 2024 $ 26,305 Intangible assets, net consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands): As of June 30, 2024 December 31, 2023 Developed technology $ 6,881 $ 7,091 Customer relationships 922 950 Intangible assets, gross 7,803 8,041 Less: accumulated amortization (4,763) (4,152) Intangible assets, net $ 3,040 $ 3,889 Intangible amortization expense was $0.4 million and $0.7 million for the three and six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, the weighted average remaining amortization periods for developed technology and customer relationships were approximately 2.0 years and 6.8 years, respectively. The following table shows the projected annual amortization expense related to amortizable intangible assets as of June 30, 2024 (in thousands): Projected Amortization 2024 (excluding the six months ended June 30, 2024) $ 734 2025 1,168 2026 752 2027 92 2028 92 Thereafter 202 Total projected amortization expense $ 3,040 |
Property and Equipment, net
Property and Equipment, net | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | 6. Property and Equipment, net Property and equipment, net consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands): As of June 30, 2024 December 31, 2023 Leasehold improvements $ 54,298 $ 53,313 Office furniture and fixtures 4,460 3,825 Computer software and hardware 10,397 10,491 Internally developed software 504 — Equipment 193 194 Property and equipment, gross 69,852 67,823 Less: accumulated depreciation (29,011) (25,141) Property and equipment, net $ 40,841 $ 42,682 |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 7. Accrued Expenses Accrued expenses consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands): As of June 30, 2024 December 31, 2023 Hosting costs $ 3,585 $ 2,973 Legal costs 283 103 Marketing and tradeshow expenses 842 685 Third party license fees 677 678 Contract labor costs 966 600 Reimbursable employee expenses 1,071 880 Taxes payable 1,766 1,261 Audit and tax expenses 1,568 1,499 Capital expenditures 182 644 Other accrued expenses 2,857 1,723 Total $ 13,797 $ 11,046 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt Senior Secured Credit Facilities Credit Agreement We have a Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”) which provides for a five-year term loan facility in an aggregate principal amount of $200.0 million and, in addition, up to $100.0 million for a revolving credit facility, including a letter of credit sub-facility in the aggregate availability amount of $20.0 million and a swingline sub-facility in the aggregate availability amount of $10.0 million (as a sublimit of the revolving loan facility). The Credit Agreement matures on November 3, 2027. We have been using the proceeds to fund the growth of our business and support our working capital requirements. Under the agreement, we may elect whether amounts drawn bear interest on the outstanding principal amount at a rate per annum equal to either (a) the higher of the Prime rate or the Federal Funds Effective rate (“Base Rate”) plus 0.5% or (b) the forward-looking term rate based on the secured overnight financing rate (“Term SOFR”). An additional interest rate margin is added to the elected interest rates. During the first three years of the Credit Agreement, the additional interest rate margin ranges from 1.5% to 2.5% in the case of Base Rate advances or from 2.5% to 3.5% in the case of Term SOFR advances, depending on our debt to recurring revenue leverage ratio (as defined in the Credit Agreement). During the final two years of the Credit Agreement, the interest rate margin ranges from 0.5% to 2.5% in the case of Base Rate advances and from 1.5% to 3.5% in the case of Term SOFR advances, depending on our debt to consolidated adjusted EBITDA leverage ratio (as defined in the Credit Agreement). In addition, the Credit Agreement contains other customary representations, warranties, and covenants, including covenants by us limiting additional indebtedness, guarantees, liens, fundamental changes, mergers and consolidations, dispositions of assets, investments, paying dividends on capital stock or redeeming, repurchasing, or retiring capital stock, prepaying certain junior indebtedness and preferred stock, certain corporate changes, and transactions with affiliates. The Credit Agreement also provides for customary events of default, including but not limited to, non-payment, breaches, or defaults in the performance of covenants, insolvency, bankruptcy, and the occurrence of a material adverse effect on us. The following table summarizes outstanding debt balances (in thousands): As of June 30, 2024 December 31, 2023 Borrowings under revolving credit facility $ 62,000 $ 62,000 Secured term loan facility 193,312 145,813 Less: Debt issuance costs (1) (1,339) (1,224) Total debt, net of debt issuance costs $ 253,973 $ 206,589 Debt, current $ 8,348 $ 66,368 Long-term debt 245,625 140,221 Total debt $ 253,973 $ 206,589 (1) Deferred debt issuance costs associated with the term loan facility are recorded net of the debt obligation and amortized to interest expense over the term of the Credit Agreement. We were in compliance with all covenants contained in the Credit Agreement. As of June 30, 2024, we had $62.0 million outstanding under our $100.0 million revolving credit facility, and we had outstanding letters of credit totaling $14.5 million in connection with securing our leased office space. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. 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 or unusual items, discrete events, or changes in tax law. Our operating subsidiaries are exposed to statutory effective tax rates ranging from zero to approximately 35%. Fluctuations in the distribution of pre-tax income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the consolidated financial statements. For the three and six months ended June 30, 2024, the actual effective tax rates were 0.4% and 0.8%, respectively. For the three and six months ended June 30, 2023, the actual effective tax rates were (2.0)% and (2.5)%, respectively. As of June 30, 2024, our net unrecognized tax benefits totaled $6.5 million, which if recognized would result in no net effect on the effective tax rate due to a valuation allowance. 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 or settlements of tax audits is not material to our consolidated financial statements. We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. Due to our net operating loss carryforwards, the tax years 2016 through 2023 remain open to examination by the major taxing jurisdictions to which we are subject. There are no open examinations that would have a meaningful impact on our consolidated financial statements. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 10. Stock-Based Compensation Compensation expense related to stock-based awards is accounted for using the estimated fair value of the award on the grant date. We calculate the fair value of stock options containing only a service condition using the Black-Scholes option pricing model. The fair value of restricted stock units (“RSUs”) is based on the closing market price of our common stock on the Nasdaq Global Market on the date of grant. For service-based awards such as RSUs, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. In June 2022, our Board of Directors granted to our Chief Executive Officer (“CEO”) a stock option award that is eligible to vest based on the achievement of various stock price appreciation targets. This option grant (the “2022 CEO option grant”) is our only outstanding stock-based award that vests based on the achievement of market conditions. For awards with market-based conditions, compensation expense is measured using a Monte Carlo simulation, and expense is recognized using the accelerated attribution method over the derived service period based on the expected market performance as of the grant date. We account for forfeitures of our stock-based awards as they occur rather than estimating expected forfeitures. As of June 30, 2024, the total compensation cost related to unvested stock options not yet recognized, which relates exclusively to the 2022 CEO option grant, was $8.4 million and will be recognized over a weighted average period of 1.7 years. Total unrecognized compensation cost related to unvested RSUs was approximately $38.0 million, which will be recognized over a weighted average period of 1.4 years. The following table summarizes the components of our stock-based compensation expense for the three and six months ended June 30, 2024 and 2023 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Cost of revenue Subscriptions $ 217 $ 230 $ 430 $ 502 Professional services 1,461 1,472 3,039 3,063 Operating expenses Sales and marketing 1,997 2,772 4,524 5,217 Research and development 2,919 2,910 5,920 6,536 General and administrative 3,306 3,764 6,593 6,886 Total stock-based compensation expense $ 9,900 $ 11,148 $ 20,506 $ 22,204 |
Basic and Diluted Loss per Shar
Basic and Diluted Loss per Share | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Loss per Share | 11. Basic and Diluted Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the reporting period. Diluted loss per share is computed similar to basic, except the weighted average number of common shares outstanding is increased to include additional outstanding shares from the assumed exercise of stock options and vesting of RSUs, if dilutive. The dilutive effect, if any, of convertible shares is calculated using the treasury stock method. As we reported net losses for all periods presented, all outstanding shares would be considered antidilutive if they were to be assumed as vested or exercised. The following outstanding securities, prior to the use of the treasury stock method, have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been antidilutive to earnings per share: Three and Six Months Ended June 30, 2024 2023 Stock options 2,530,468 2,625,286 Non-vested restricted stock units 1,189,539 1,125,505 |
Commitments, Contingencies, and
Commitments, Contingencies, and Other Matters | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies, and Other Matters | 12. Commitments, Contingencies, and Other Matters Minimum Purchase Commitments We have a non-cancellable cloud hosting arrangement with Amazon Web Services (“AWS”) that contains provisions for minimum purchase commitments. Specifically, purchase commitments under the agreement total $131.0 million over five years. The agreement, which started July 2021 and is now in its third year as of June 30, 2024, contains minimum spending requirements of $28.0 million in each of the third, fourth, and fifth years. Spending under this agreement for the three and six months ended June 30, 2024 totaled $10.7 million and $21.0 million, respectively. Spending under this agreement for the three and six months ended June 30, 2023 totaled $9.1 million and $18.5 million, respectively. The timing of payments under the agreement may vary. Exclusive of the AWS contract, we have other non-cancellable agreements for subscription software products that contain provisions stipulating minimum purchase commitments. However, the annual purchase commitments under these contracts are, individually and in the aggregate, immaterial to our consolidated financial statements. Pegasystems Litigation On May 29, 2020, we filed a civil complaint against Pegasystems, Inc. (“Pegasystems”) and Youyong Zou, a Virginia resident, in the Circuit Court for Fairfax County, Virginia. Appian Corp v. Pegasystems Inc. & Youyong Zou, No. 2020-07216 (Fairfax Cty. Ct.). On May 10, 2022, we announced the jury awarded us $2.036 billion in damages for misappropriation of our trade secrets and $1 in damages for violating the Virginia Computer Crimes Act. Pegasystems filed several post-trial motions seeking relief in the form of reducing the damages award or setting aside the jury’s verdict and either granting a new trial or entering judgment in Pegasystems’ favor. All of these motions were denied, and final judgment was entered by the Court on September 15, 2022. The final judgment reaffirmed the $2.036 billion in damages and also ordered Pegasystems to pay Appian $23.6 million in attorney's fees associated with the case as well as statutory post-judgment interest on the judgment at an annual rate of 6%, or approximately $122.0 million per year. Defendant Youyong Zou has satisfied the judgment of $5,000 (plus interest) against him in lieu of appealing that judgment. On September 15, 2022, Pegasystems filed a notice of appeal to the Court of Appeals of Virginia. On July 30, 2024, the Court of Appeals of Virginia issued a decision reversing the judgment against Pegasystems and remanding for a new trial. The decision rejected Pegasystems’ argument that Appian had not presented evidence that trade secrets were misappropriated, but reversed the judgment on the basis of evidentiary and damages rulings made by the trial court. On the same day, Appian announced its intention to appeal that decision to the Supreme Court of Virginia and seek to reinstate the full judgment against Pegasystems. A petition to the Supreme Court is expected to be filed by August 29, 2024. After that, the timeline to hear the petition will be in the control of the Supreme Court. We cannot predict the outcome of any appeals or the exact time it will take to resolve them. Judgment Preservation Insurance On September 1, 2023, we entered into a Judgment Preservation Insurance (“JPI”) policy in connection with our $2.036 billion judgment against Pegasystems. The total cost of the policy was $57.3 million and is comprised of the premium, a one-time broker fee, and Virginia lines tax. The policy provides up to $500.0 million of coverage. The total cost of the policy was capitalized and is being amortized on a straight-line basis over the estimated length of the appeals process. As of June 30, 2024, we estimated the length of the appeals process (solely for amortization purposes) to be approximately three years. This estimate is updated each reporting period. Amortization expense associated with the JPI premium is recorded to general and administrative expenses in our consolidated statements of operations. JPI amortization expense was $4.5 million and $9.0 million for the three and six months ended June 30, 2024. As of June 30, 2024, $18.1 million of the unamortized balance is classified as ‘Prepaid expenses and other current assets’ while the remaining $24.2 million is classified as 'Other assets’ on our consolidated balance sheets. We are currently evaluating the impact, if any, that the decision from the Court of Appeals of Virginia will have on our estimated length of the appeals process. Other Legal Matters From time to time, we are subject to legal, regulatory, and other proceedings and claims that arise in the ordinary course of business. Other than as disclosed elsewhere in this Quarterly Report, we are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Share Repurchase Program |
Segment and Geographic Informat
Segment and Geographic Information | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 13. Segment and Geographic Information The following table summarizes revenue by geography for the three and six months ended June 30, 2024 and 2023 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Domestic $ 90,534 $ 78,694 $ 184,647 $ 168,699 International 55,916 49,021 111,638 94,251 Total $ 146,450 $ 127,715 $ 296,285 $ 262,950 With respect to geographic information, revenue is attributed to respective geographies based on the contracting address of the customer. The value of our long-lived assets, which are comprised of property and equipment and intangible assets, held in the United States and internationally as of June 30, 2024 were $31.8 million and $12.1 million, respectively. As of December 31, 2023, our long-lived assets held in the United States and internationally were $34.0 million and $12.6 million, respectively. |
Investments and Fair Value Meas
Investments and Fair Value Measurements | 6 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments and Fair Value Measurements | 14. Investments and Fair Value Measurements Fair Value Measurements U.S. GAAP establishes 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 and which require us to develop our own estimates and assumptions reflecting those that a market participant would use. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. There were no instruments measured at fair value on a recurring basis using significant unobservable inputs as of June 30, 2024 and December 31, 2023. The valuation techniques that may be used to measure fair value are as follows: • Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities; • Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts; and • Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (i.e., replacement cost). The carrying amounts of our accounts receivable, accounts payable, and accrued expenses approximate fair value as of June 30, 2024 and December 31, 2023 because of the relatively short duration of these instruments. Additionally, the carrying value of our debt associated with the term loan facility approximates fair value because the interest rates are variable and reset on relatively short durations to the then market rates. Investments Our investment portfolio consists largely of debt investments classified as available-for-sale. Changes in the fair value of available-for-sale securities, excluding other-than-temporary impairments, have been recorded in ‘Accumulated other comprehensive income (loss)’ in our consolidated balance sheets. The components of our investments as of June 30, 2024 are as follows (in thousands): As of June 30, 2024 Fair Value Measurement Balance Sheet Classification Fair Value Level Cost Basis Unrealized Gains (Losses) Fair Value Cash and Cash Equivalents Short-term Investments and Marketable Securities Cash Level 1 $ 66,506 $ — $ 66,506 $ 66,506 $ — Money market fund Level 1 54,281 — 54,281 54,281 — U.S. Treasury bonds Level 1 14,660 (3) 14,657 — 14,657 Commercial paper Level 2 2,893 (3) 2,890 — 2,890 Corporate bonds Level 2 10,800 (2) 10,798 — 10,798 Total investments $ 149,140 $ (8) $ 149,132 $ 120,787 $ 28,345 At December 31, 2023, our investments consisted of the following (in thousands): As of December 31, 2023 Fair Value Measurement Balance Sheet Classification Fair Value Level Cost Basis Unrealized Gains (Losses) Fair Value Cash and Cash Equivalents Short-term Investments and Marketable Securities Cash Level 1 $ 93,029 $ — $ 93,029 $ 93,029 $ — Money market fund Level 1 56,322 — 56,322 56,322 — U.S. Treasury bonds Level 1 4,830 (2) 4,828 — 4,828 Agency bonds Level 2 4,828 (3) 4,825 — 4,825 Total investments $ 159,009 $ (5) $ 159,004 $ 149,351 $ 9,653 We did not hold any Level 3 assets at any point during the three and six months ended June 30, 2024. Additionally, there were no transfers between Levels 1 and 2 during the six months ended June 30, 2024. Interest income on our investments totaled $1.7 million and $3.6 million for the three and six months ended June 30, 2024, respectively. Interest income on our investments totaled $2.7 million and $4.7 million for the three and six months ended June 30, 2023, respectively. Interest income is recorded within other operating (income) expense on our consolidated statements of operations. The contractual maturities of our debt securities as of June 30, 2024 and December 31, 2023 were all one year or less. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay certain obligations. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements and footnotes include the accounts of Appian and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial reporting. 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’ (deficit) equity, and cash flows. All intercompany accounts and transactions have been eliminated in consolidation. 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 unaudited 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, 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 15, 2024. |
Use of Estimates | Use of Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in these consolidated financial statements and accompanying notes. Although we believe the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. Significant estimates embedded in the consolidated financial statements include, but are not limited to, revenue recognition, income taxes and the related valuation allowance established against deferred tax assets, the amortization period of deferred commissions, the amortization period of the cost to obtain the judgment preservation insurance policy (as discussed in Note 12), lease impairments, and stock-based compensation. |
Concentration of Credit and Customer Risk | Concentration of Credit and Customer Risk Our financial instruments exposed to concentration of credit and customer risk consist primarily of cash, cash equivalents, accounts receivable, and our short-term investments. Deposits held with banks may exceed the amount of insurance provided on such deposits; however, we believe the financial institutions holding our cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash We consider all highly liquid investments with original maturities of three months or less, as well as overnight repurchase agreements, to be cash equivalents. Restricted cash consisted of cash designated to settle an escrow liability stemming from a holdback agreement related to our acquisition of Lana Labs GmbH. We paid the remaining amount owed on August 11, 2023. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts |
Deferred Commissions | Deferred Commissions We capitalize costs of obtaining a contract with a customer, which consist of sales commissions paid to our sales team and the associated incremental payroll taxes. These costs are recorded as deferred commissions in the consolidated balance sheets. Costs to obtain a contract for a new customer or upsell an existing customer are amortized over an estimated economic life of five years as sales commissions on initial sales are not commensurate with sales commissions on contract renewals. Commissions paid relating to contract renewals are deferred and amortized over the related renewal period. We determine the estimated economic life based on both qualitative and quantitative factors such as expected renewals, product life cycles, contractual terms, and customer attrition. We periodically review the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the estimated economic life. Costs to obtain a contract for professional services arrangements are expensed as incurred as the contractual period of our professional services arrangements are one year or less. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Significant additions or improvements extending the useful life of an asset are capitalized, while repairs and maintenance costs which do not significantly improve the related assets or extend their useful lives are charged to expense as incurred. The estimated useful lives of our property and equipment are generally 3 years for computer software, computer hardware, and internally developed software, 5 years for equipment, and 10 years for office furniture and fixtures. Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term. |
Severance Costs | Severance Costs |
Treasury Stock | Treasury Stock We account for treasury stock under the cost method. During the three and six months ended June 30, 2024, we have reissued treasury stock to satisfy employee stock option exercises and vesting of restricted stock units. Because we are in an accumulated deficit position, all reissuances of treasury stock have been recorded as a decrease to additional-paid-in-capital in our consolidated balance sheets. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted We have not adopted any new accounting guidance in 2024 that has had a material impact on our consolidated financial statements or disclosures. Not Yet Adopted In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvement to Reportable Segment Disclosures, which enhances the disclosure requirements for operating segments in our annual and interim consolidated financial statements. The new guidance is effective for us beginning with our annual reporting for fiscal year 2024 and for interim period reporting beginning in fiscal year 2025 and will be applied on a retrospective basis. Early adoption is permitted. The new ASU requires public companies to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires public companies to disclose the title and position of the Chief Operating Decision Maker. The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. This guidance also applies to public entities that have only one segment. This ASU will only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition. In December 2023, the FASB issued ASU 2023-09, Income Tax (Topic 740): Improvement to Income Tax Disclosures, which requires public companies to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. The new guidance will be effective for our annual reporting for fiscal year 2025 on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. This ASU will only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition. In March 2024, the SEC issued its final climate disclosure rule, which requires the disclosure of material Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics in annual reports if they are reasonably likely to have a material impact on the Company’s business. For large accelerated filers, disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025. Subsequent to issuance, the rules became the subject of litigation, and the SEC has issued a stay to allow the legal process to proceed. We are currently evaluating the impact these rules will have on our financial statements and related disclosures and will monitor the litigation progress for possible impacts on the disclosure requirements under the rules. |
Revenue Recognition | Revenue Recognition We generate subscriptions revenue primarily through the sale of cloud subscriptions bundled with maintenance and support and hosting services as well as term license subscriptions bundled with maintenance and support. We generate professional services revenue from fees for our consulting services, including application development and deployment assistance as well as training related to our platform. Performance Obligations and Timing of Revenue Recognition We primarily sell products and services that fall into the categories discussed below. Each category contains one or more performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from the product or service on its own or together with readily available resources, including those purchased separately from us) and distinct within the context of the contract (i.e., separately identified from other promises in the contract) or (2) a series of distinct products or services that are substantially the same and have the same pattern of transfer to the customer. Our term license subscriptions are delivered at a point in time while our cloud subscriptions, maintenance and support, and professional services are delivered over time. Subscriptions Revenue Subscriptions revenue is primarily related to (1) cloud subscriptions bundled with maintenance and support and hosting services and (2) term license subscriptions bundled with maintenance and support. We generally charge subscription fees on a per-user basis or through non-user based single application licenses. We bill customers and collect payment for subscriptions to our platform in advance on an annual, quarterly, or monthly basis. In certain instances, our customers have paid their entire contract up front. Cloud Subscriptions We generate cloud-based subscriptions revenue primarily from the sales of subscriptions to access our cloud offering, together with related support services to our customers. We perform all required maintenance and support for our cloud offering. Revenue is recognized on a ratable basis over the contract term beginning on the date the service is made available to the customer. Our cloud-based subscription contracts generally have a term of one Term License Subscriptions Our term license subscriptions revenue is derived from customers with on-premises installations of our platform. The majority of our term license contracts are one year in length. Although term license subscriptions are sold with maintenance and support, the software is fully functional at the beginning of the subscription and is considered a distinct performance obligation. If a cloud-based subscription includes the right for the customer to take possession of the license, the revenue is treated as a term license. Revenue from term license subscriptions is recognized when control of the software license has transferred to the customer, which is the later of delivery or commencement of the contract term. Maintenance and Support Maintenance and support subscriptions include both technical support and when-and-if-available software upgrades, which are treated as a single performance obligation as they are considered a series of distinct services that are substantially the same and have the same duration and measure of progress. Revenue from maintenance and support is recognized ratably over the contract period, which is the period over which the customer has continuous access to maintenance and support. Professional Services Revenue Our professional services revenue is comprised of fees for consulting services, including application development and deployment assistance as well as training services related to our platform. Our professional services are considered distinct performance obligations when sold standalone or with other products. Consulting Services We sell consulting services to assist customers in planning and executing the deployment of our software. Customers are not required to use consulting services to fully benefit from the software. Consulting services are regularly sold on a standalone basis and most often as either (1) under a fixed-fee arrangement or (2) on a time and materials basis. We also sell advisory services on a subscription basis to support customers or partners with their development and deployment. Consulting services contracts are considered separate performance obligations because they do not integrate with each other or with other products and services to deliver a combined output to the customer, do not modify or customize (or are not modified or customized by) each other or other products and services, and do not affect the customer's ability to use other consulting offerings or other products and services. Revenue under consulting contracts is recognized over time as services are delivered. Revenue from subscription-based consulting contracts is recognized ratably over the contract period. For time and materials-based consulting contracts, we have elected the practical expedient of recognizing revenue upon invoicing since the invoiced amount corresponds directly to the value of our service to date. Training Services We sell various training services to our customers. Training services are sold in the form of prepaid training credits that are redeemed based on a fixed rate per course. Training revenue is recognized when the associated training services are delivered. Significant Judgments and Estimates Determining the Transaction Price The transaction price is the total amount of consideration we expect to receive in exchange for the service offerings in a contract and may include both fixed and variable components. Variable consideration is included in the transaction price to the extent it is probable a significant reversal will not occur. The amount of variable consideration excluded from the transaction price for the three and six months ended June 30, 2024 and 2023 was immaterial. Our estimates of variable consideration are also subject to subsequent true-up adjustments and may result in changes to transaction prices; however, such true-up adjustments are not expected to be material. Allocating the Transaction Price Based on Standalone Selling Prices (“SSP”) We allocate the transaction price to each performance obligation in a contract based on its relative SSP. The SSP is the observable price at which we sell the product or service separately. In the absence of observable pricing, we estimate SSP using the residual approach. We establish SSP as follows: 1. Cloud subscriptions - Given the highly variable selling price of our cloud subscriptions, we establish the SSP of our cloud subscriptions using a residual approach after first determining the SSP of consulting and training services. We have concluded the residual approach to estimating the SSP of our cloud subscriptions is an appropriate allocation of the transaction price. 2. Term license subscriptions - Given the highly variable selling price of our term license subscriptions, we have established the SSP of term license subscriptions using a residual approach after first determining the SSP of maintenance and support. Maintenance and support is sold on a standalone basis in conjunction with renewals of our legacy perpetual software licenses and within a narrow range of the net license fee. Because an economic relationship exists between the license and maintenance and support, we have concluded the residual approach to estimating the SSP of term license subscriptions is an appropriate allocation of the transaction price. 3. Maintenance and support - We establish the SSP of maintenance and support as a percentage of the stated net subscription fee based on observable pricing of maintenance and support renewals from our legacy perpetual software licenses. 4. Consulting and training services - The SSP of consulting and training services is established based on the observable pricing of standalone sales within each geographic region where the services are sold. Contract Balances Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to our contracts with customers. Contract assets primarily relate to unbilled amounts for contracts with customers for which the amount of revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional. |
Lease Costs | Lease Costs |
Stock-Based Compensation Expense | Compensation expense related to stock-based awards is accounted for using the estimated fair value of the award on the grant date. We calculate the fair value of stock options containing only a service condition using the Black-Scholes option pricing model. The fair value of restricted stock units (“RSUs”) is based on the closing market price of our common stock on the Nasdaq Global Market on the date of grant. For service-based awards such as RSUs, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. In June 2022, our Board of Directors granted to our Chief Executive Officer (“CEO”) a stock option award that is eligible to vest based on the achievement of various stock price appreciation targets. This option grant (the “2022 CEO option grant”) is our only outstanding stock-based award that vests based on the achievement of market conditions. For awards with market-based conditions, compensation expense is measured using a Monte Carlo simulation, and expense is recognized using the accelerated attribution method over the derived service period based on the expected market performance as of the grant date. |
Fair Value Measurements | Fair Value Measurements U.S. GAAP establishes 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 and which require us to develop our own estimates and assumptions reflecting those that a market participant would use. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. There were no instruments measured at fair value on a recurring basis using significant unobservable inputs as of June 30, 2024 and December 31, 2023. The valuation techniques that may be used to measure fair value are as follows: • Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities; • Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts; and • Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (i.e., replacement cost). |
Investments | Investments |
Accounting Policies (Tables)
Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table presents a reconciliation of cash, cash equivalents, and restricted cash as presented in the consolidated statements of cash flows (in thousands): As of June 30, 2024 December 31, 2023 June 30, 2023 December 31, 2022 Cash and cash equivalents $ 120,787 $ 149,351 $ 171,530 $ 148,132 Restricted cash, current — — 2,272 2,249 Total cash, cash equivalents, and restricted cash $ 120,787 $ 149,351 $ 173,802 $ 150,381 |
Schedule of Restrictions on Cash and Cash Equivalents | The following table presents a reconciliation of cash, cash equivalents, and restricted cash as presented in the consolidated statements of cash flows (in thousands): As of June 30, 2024 December 31, 2023 June 30, 2023 December 31, 2022 Cash and cash equivalents $ 120,787 $ 149,351 $ 171,530 $ 148,132 Restricted cash, current — — 2,272 2,249 Total cash, cash equivalents, and restricted cash $ 120,787 $ 149,351 $ 173,802 $ 150,381 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Services | The following table summarizes revenue recorded during the three and six months ended June 30, 2024 and 2023 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Cloud subscriptions $ 88,428 $ 74,442 $ 175,031 $ 144,134 Term license subscriptions 17,227 12,999 40,998 36,150 Maintenance and support 7,319 6,353 14,639 12,467 Total subscriptions 112,974 93,794 230,668 192,751 Professional services 33,476 33,921 65,617 70,199 Total revenue $ 146,450 $ 127,715 $ 296,285 $ 262,950 |
Schedule of Contract Asset and Contract Liability | The following table sets forth our contract asset and contract liability balances (in thousands): As of June 30, 2024 December 31, 2023 June 30, 2023 December 31, 2022 Contract assets, current * $ 8,865 $ 12,052 $ 11,870 $ 12,540 Contract assets, non-current * 1,072 915 1,069 1,720 Total contract assets $ 9,937 $ 12,967 $ 12,939 $ 14,260 Deferred revenue, current $ 218,233 $ 235,992 $ 192,164 $ 194,768 Deferred revenue, non-current 4,695 4,700 3,734 5,556 Total contract liabilities $ 222,928 $ 240,692 $ 195,898 $ 200,324 * Current and non-current contract assets are reported as components of the ‘Prepaid expenses and other current assets’ and ‘Other assets’ line items, respectively, in our consolidated balance sheets. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The following table sets forth the components of lease expense for the three and six months ended June 30, 2024 and 2023 (in thousands, exclusive of sublease income): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Operating lease cost $ 2,410 $ 2,145 $ 4,821 $ 4,291 Short-term lease cost 433 423 765 788 Variable lease cost 1,335 959 2,648 1,985 Total $ 4,178 $ 3,527 $ 8,234 $ 7,064 |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to operating leases as of June 30, 2024 and December 31, 2023 is presented in the following table (in thousands, except for lease term and discount rate): As of June 30, 2024 December 31, 2023 Right-of-use assets for operating leases $ 32,848 $ 39,975 Operating lease liabilities, current $ 12,323 $ 11,698 Operating lease liabilities, net of current portion 55,796 59,067 Total operating lease liabilities $ 68,119 $ 70,765 Weighted average remaining lease term (in years) 6.9 7.4 Weighted average discount rate 9.4 % 9.4 % |
Schedule of Supplemental Cash Flow Information | Supplemental cash flow and expense information related to operating leases for the three and six months ended June 30, 2024 and 2023 is shown below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Operating cash outflows for operating leases $ 3,130 $ 988 $ 5,773 $ 2,120 Amortization of operating lease right-of-use assets 815 591 1,598 1,243 Interest expense on operating lease liabilities 1,595 1,552 3,224 3,047 |
Schedule of Maturities of Operating Lease Liabilities | A summary of our future minimum lease commitments under non-cancellable leases as of June 30, 2024 is shown below (in thousands): Operating Leases 2024 (excluding the six months ended June 30, 2024) $ 6,376 2025 12,958 2026 13,307 2027 13,559 2028 12,460 Thereafter 34,840 Total lease payments 93,500 Less: imputed interest (25,381) Total $ 68,119 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table details the changes in goodwill during the six months ended June 30, 2024 and fiscal year ended December 31, 2023 (in thousands): Carrying Amount Balance as of December 31, 2022 $ 26,349 Foreign currency translation adjustments 757 Balance as of December 31, 2023 27,106 Foreign currency translation adjustments (801) Balance as of June 30, 2024 $ 26,305 |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands): As of June 30, 2024 December 31, 2023 Developed technology $ 6,881 $ 7,091 Customer relationships 922 950 Intangible assets, gross 7,803 8,041 Less: accumulated amortization (4,763) (4,152) Intangible assets, net $ 3,040 $ 3,889 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table shows the projected annual amortization expense related to amortizable intangible assets as of June 30, 2024 (in thousands): Projected Amortization 2024 (excluding the six months ended June 30, 2024) $ 734 2025 1,168 2026 752 2027 92 2028 92 Thereafter 202 Total projected amortization expense $ 3,040 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, net | Property and equipment, net consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands): As of June 30, 2024 December 31, 2023 Leasehold improvements $ 54,298 $ 53,313 Office furniture and fixtures 4,460 3,825 Computer software and hardware 10,397 10,491 Internally developed software 504 — Equipment 193 194 Property and equipment, gross 69,852 67,823 Less: accumulated depreciation (29,011) (25,141) Property and equipment, net $ 40,841 $ 42,682 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands): As of June 30, 2024 December 31, 2023 Hosting costs $ 3,585 $ 2,973 Legal costs 283 103 Marketing and tradeshow expenses 842 685 Third party license fees 677 678 Contract labor costs 966 600 Reimbursable employee expenses 1,071 880 Taxes payable 1,766 1,261 Audit and tax expenses 1,568 1,499 Capital expenditures 182 644 Other accrued expenses 2,857 1,723 Total $ 13,797 $ 11,046 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Long-term Debt | The following table summarizes outstanding debt balances (in thousands): As of June 30, 2024 December 31, 2023 Borrowings under revolving credit facility $ 62,000 $ 62,000 Secured term loan facility 193,312 145,813 Less: Debt issuance costs (1) (1,339) (1,224) Total debt, net of debt issuance costs $ 253,973 $ 206,589 Debt, current $ 8,348 $ 66,368 Long-term debt 245,625 140,221 Total debt $ 253,973 $ 206,589 (1) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense Included in Condensed Consolidated Statements of Operations | The following table summarizes the components of our stock-based compensation expense for the three and six months ended June 30, 2024 and 2023 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Cost of revenue Subscriptions $ 217 $ 230 $ 430 $ 502 Professional services 1,461 1,472 3,039 3,063 Operating expenses Sales and marketing 1,997 2,772 4,524 5,217 Research and development 2,919 2,910 5,920 6,536 General and administrative 3,306 3,764 6,593 6,886 Total stock-based compensation expense $ 9,900 $ 11,148 $ 20,506 $ 22,204 |
Basic and Diluted Loss per Sh_2
Basic and Diluted Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Securities Excluded from Calculation of Weighted Average Common Shares | The following outstanding securities, prior to the use of the treasury stock method, have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been antidilutive to earnings per share: Three and Six Months Ended June 30, 2024 2023 Stock options 2,530,468 2,625,286 Non-vested restricted stock units 1,189,539 1,125,505 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geography | The following table summarizes revenue by geography for the three and six months ended June 30, 2024 and 2023 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Domestic $ 90,534 $ 78,694 $ 184,647 $ 168,699 International 55,916 49,021 111,638 94,251 Total $ 146,450 $ 127,715 $ 296,285 $ 262,950 |
Investments and Fair Value Me_2
Investments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Components of Investments | The components of our investments as of June 30, 2024 are as follows (in thousands): As of June 30, 2024 Fair Value Measurement Balance Sheet Classification Fair Value Level Cost Basis Unrealized Gains (Losses) Fair Value Cash and Cash Equivalents Short-term Investments and Marketable Securities Cash Level 1 $ 66,506 $ — $ 66,506 $ 66,506 $ — Money market fund Level 1 54,281 — 54,281 54,281 — U.S. Treasury bonds Level 1 14,660 (3) 14,657 — 14,657 Commercial paper Level 2 2,893 (3) 2,890 — 2,890 Corporate bonds Level 2 10,800 (2) 10,798 — 10,798 Total investments $ 149,140 $ (8) $ 149,132 $ 120,787 $ 28,345 At December 31, 2023, our investments consisted of the following (in thousands): As of December 31, 2023 Fair Value Measurement Balance Sheet Classification Fair Value Level Cost Basis Unrealized Gains (Losses) Fair Value Cash and Cash Equivalents Short-term Investments and Marketable Securities Cash Level 1 $ 93,029 $ — $ 93,029 $ 93,029 $ — Money market fund Level 1 56,322 — 56,322 56,322 — U.S. Treasury bonds Level 1 4,830 (2) 4,828 — 4,828 Agency bonds Level 2 4,828 (3) 4,825 — 4,825 Total investments $ 159,009 $ (5) $ 159,004 $ 149,351 $ 9,653 |
Accounting Policies - Additiona
Accounting Policies - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 USD ($) employee | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||||
Allowance for doubtful accounts | $ 2,652 | $ 2,652 | $ 2,652 | $ 2,606 | ||
Capitalized contract cost, amortization period (in years) | 5 years | 5 years | 5 years | |||
Commission expense | $ 11,500 | $ 11,300 | $ 22,900 | $ 22,300 | ||
Number of reduction in employees | employee | 150 | |||||
Severance costs | $ 5,500 | $ 2,100 | $ 5,500 | $ 6,300 | ||
Computer software and hardware | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, useful life | 3 years | 3 years | 3 years | |||
Internally developed software | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, useful life | 3 years | 3 years | 3 years | |||
Equipment | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, useful life | 5 years | 5 years | 5 years | |||
Office furniture and fixtures | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Property, plant and equipment, useful life | 10 years | 10 years | 10 years | |||
Sales Revenue, Net | Customer Concentration Risk | Government Agencies | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Concentration risk percentage | 22.60% | 20.10% | 22.10% | 20.30% | ||
Sales Revenue, Net | Customer Concentration Risk | International Customers | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Concentration risk percentage | 38.20% | 38.40% | 37.70% | 35.80% | ||
Accounts Receivable | Customer Concentration Risk | Customer One | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Concentration risk percentage | 15% |
Accounting Policies - Cash, Cas
Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 120,787 | $ 149,351 | $ 171,530 | $ 148,132 |
Restricted cash, current | 0 | 0 | 2,272 | 2,249 |
Total cash, cash equivalents, and restricted cash | $ 120,787 | $ 149,351 | $ 173,802 | $ 150,381 |
Revenue - Revenue by Services (
Revenue - Revenue by Services (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 146,450 | $ 127,715 | $ 296,285 | $ 262,950 |
Subscriptions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 112,974 | 93,794 | 230,668 | 192,751 |
Cloud subscriptions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 88,428 | 74,442 | 175,031 | 144,134 |
Term license subscriptions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 17,227 | 12,999 | 40,998 | 36,150 |
Maintenance and support | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 7,319 | 6,353 | 14,639 | 12,467 |
Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 33,476 | $ 33,921 | $ 65,617 | $ 70,199 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue recognized | $ 166.6 | $ 141.3 |
Performance obligations | 469.4 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Performance obligations | $ 300.3 | |
Revenue, remaining performance obligation, period (in months) | 12 months | |
Minimum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Cloud subscriptions contract term | 1 year | |
Maximum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Cloud subscriptions contract term | 3 years |
Revenue - Schedule of Contract
Revenue - Schedule of Contract Asset and Contract Liability (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||||
Contract assets, current | $ 8,865 | $ 12,052 | $ 11,870 | $ 12,540 |
Contract assets, non-current | 1,072 | 915 | 1,069 | 1,720 |
Total contract assets | 9,937 | 12,967 | 12,939 | 14,260 |
Deferred revenue, current | 218,233 | 235,992 | 192,164 | 194,768 |
Deferred revenue, non-current | 4,695 | 4,700 | 3,734 | 5,556 |
Total contract liabilities | $ 222,928 | $ 240,692 | $ 195,898 | $ 200,324 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 USD ($) rOUAsset floor | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | |
Leases [Abstract] | ||||
Renewal term | 10 years | 10 years | ||
Sublease income | $ 300 | $ 300 | $ 600 | $ 700 |
ROU asset impairment | $ 5,500 | 5,462 | 0 | |
Number of ROU assets | rOUAsset | 2 | |||
Number of floors represented by each asset group within headquarters | floor | 2 | |||
Reimbursements received for tenant improvements | $ 0 | $ 900 | $ 0 | $ 1,500 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Leases [Abstract] | ||||
Operating lease cost | $ 2,410 | $ 2,145 | $ 4,821 | $ 4,291 |
Short-term lease cost | 433 | 423 | 765 | 788 |
Variable lease cost | 1,335 | 959 | 2,648 | 1,985 |
Total | $ 4,178 | $ 3,527 | $ 8,234 | $ 7,064 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Right-of-use assets for operating leases | $ 32,848 | $ 39,975 |
Operating lease liabilities, current | 12,323 | 11,698 |
Operating lease liabilities, net of current portion | 55,796 | 59,067 |
Total operating lease liabilities | $ 68,119 | $ 70,765 |
Weighted average remaining lease term (in years) | 6 years 10 months 24 days | 7 years 4 months 24 days |
Weighted average discount rate | 9.40% | 9.40% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Leases [Abstract] | ||||
Operating cash outflows for operating leases | $ 3,130 | $ 988 | $ 5,773 | $ 2,120 |
Amortization of operating lease right-of-use assets | 815 | 591 | 1,598 | 1,243 |
Interest expense on operating lease liabilities | $ 1,595 | $ 1,552 | $ 3,224 | $ 3,047 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Operating Leases | ||
2024 (excluding the six months ended June 30, 2024) | $ 6,376 | |
2025 | 12,958 | |
2026 | 13,307 | |
2027 | 13,559 | |
2028 | 12,460 | |
Thereafter | 34,840 | |
Total lease payments | 93,500 | |
Less: imputed interest | (25,381) | |
Total | $ 68,119 | $ 70,765 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 27,106 | $ 26,349 |
Foreign currency translation adjustments | (801) | 757 |
Ending balance | $ 26,305 | $ 27,106 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 7,803 | $ 8,041 |
Less: accumulated amortization | (4,763) | (4,152) |
Intangible assets, net | 3,040 | 3,889 |
Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 6,881 | 7,091 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 922 | $ 950 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 0.4 | $ 0.4 | $ 0.7 | $ 0.7 |
Developed technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible asset, useful life | 2 years | 2 years | ||
Customer relationships | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible asset, useful life | 6 years 9 months 18 days | 6 years 9 months 18 days |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 (excluding the six months ended June 30, 2024) | $ 734 | |
2025 | 1,168 | |
2026 | 752 | |
2027 | 92 | |
2028 | 92 | |
Thereafter | 202 | |
Intangible assets, net | $ 3,040 | $ 3,889 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 69,852 | $ 67,823 |
Less: accumulated depreciation | (29,011) | (25,141) |
Property and equipment, net | 40,841 | 42,682 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 54,298 | 53,313 |
Office furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,460 | 3,825 |
Computer software and hardware | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,397 | 10,491 |
Internally developed software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 504 | 0 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 193 | $ 194 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 2.2 | $ 2 | $ 4.2 | $ 4 |
Disposal of property plant and equipment | $ 0.3 | $ 0 | $ 0.3 | $ 1.4 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Hosting costs | $ 3,585 | $ 2,973 |
Legal costs | 283 | 103 |
Marketing and tradeshow expenses | 842 | 685 |
Third party license fees | 677 | 678 |
Contract labor costs | 966 | 600 |
Reimbursable employee expenses | 1,071 | 880 |
Taxes payable | 1,766 | 1,261 |
Audit and tax expenses | 1,568 | 1,499 |
Capital expenditures | 182 | 644 |
Other accrued expenses | 2,857 | 1,723 |
Total | $ 13,797 | $ 11,046 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | |
Line of Credit Facility [Line Items] | ||
Outstanding letters of credit | $ 14,500,000 | |
Letter of Credit | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | 20,000,000 | |
Swingline Sub-facility | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 10,000,000 | |
Secured Debt | Term Loan Facility | ||
Line of Credit Facility [Line Items] | ||
Debt term | 5 years | |
Aggregate principal amount | $ 200,000,000 | |
Secured Debt | Term Loan Facility | Base Rate | ||
Line of Credit Facility [Line Items] | ||
Interest rate margin (as a percent) | 0.50% | |
Line of Credit | Base Rate | Minimum | ||
Line of Credit Facility [Line Items] | ||
Interest rate margin (as a percent) | 1.50% | |
Line of Credit | Base Rate | Minimum | EBITDA | ||
Line of Credit Facility [Line Items] | ||
Interest rate margin (as a percent) | 0.50% | |
Line of Credit | Base Rate | Maximum | ||
Line of Credit Facility [Line Items] | ||
Interest rate margin (as a percent) | 2.50% | |
Line of Credit | Base Rate | Maximum | EBITDA | ||
Line of Credit Facility [Line Items] | ||
Interest rate margin (as a percent) | 2.50% | |
Line of Credit | SOFR | Minimum | ||
Line of Credit Facility [Line Items] | ||
Interest rate margin (as a percent) | 2.50% | |
Line of Credit | SOFR | Minimum | EBITDA | ||
Line of Credit Facility [Line Items] | ||
Interest rate margin (as a percent) | 1.50% | |
Line of Credit | SOFR | Maximum | ||
Line of Credit Facility [Line Items] | ||
Interest rate margin (as a percent) | 3.50% | |
Line of Credit | SOFR | Maximum | EBITDA | ||
Line of Credit Facility [Line Items] | ||
Interest rate margin (as a percent) | 3.50% | |
Line of Credit | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | |
Long-term debt | $ 62,000,000 | $ 62,000,000 |
Debt - Outstanding Long-term De
Debt - Outstanding Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Line of Credit Facility [Line Items] | ||
Less: Debt issuance costs | $ (1,339) | $ (1,224) |
Total debt, net of debt issuance costs | 253,973 | 206,589 |
Debt, current | 8,348 | 66,368 |
Long-term debt | 245,625 | 140,221 |
Line of Credit | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Long-term debt | 62,000 | 62,000 |
Secured Debt | Secured Term Loan Facility | ||
Line of Credit Facility [Line Items] | ||
Long-term debt | $ 193,312 | $ 145,813 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Taxes [Line Items] | ||||
Effective tax rate (as a percent) | 0.40% | (2.00%) | 0.80% | (2.50%) |
Net unrecognized tax benefits which would impact effective tax rate if recognized | $ 6.5 | $ 6.5 | ||
Minimum | Subsidiaries | ||||
Income Taxes [Line Items] | ||||
Effective tax rate (as a percent) | 0% | |||
Maximum | Subsidiaries | ||||
Income Taxes [Line Items] | ||||
Effective tax rate (as a percent) | 35% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Non-vested restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation cost related to unvested restricted stock units | $ 38 |
Weighted average remaining vesting period | 1 year 4 months 24 days |
Chief Executive Officer | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Compensation cost related to nonvested stock options not yet recognized | $ 8.4 |
Chief Executive Officer | Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost related to nonvested stock option recognized over weighted average period (in years) | 1 year 8 months 12 days |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-based Compensation Expense Included in Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 9,900 | $ 11,148 | $ 20,506 | $ 22,204 |
Cost of revenue | Subscriptions | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 217 | 230 | 430 | 502 |
Cost of revenue | Professional services | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 1,461 | 1,472 | 3,039 | 3,063 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 1,997 | 2,772 | 4,524 | 5,217 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 2,919 | 2,910 | 5,920 | 6,536 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 3,306 | $ 3,764 | $ 6,593 | $ 6,886 |
Basic and Diluted Loss per Sh_3
Basic and Diluted Loss per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities outstanding (in shares) | 2,530,468 | 2,625,286 | 2,530,468 | 2,625,286 |
Non-vested restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities outstanding (in shares) | 1,189,539 | 1,125,505 | 1,189,539 | 1,125,505 |
Commitments, Contingencies, a_2
Commitments, Contingencies, and Other Matters (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Sep. 01, 2023 | Sep. 15, 2022 | May 10, 2022 | Mar. 31, 2024 | Jul. 31, 2021 | Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Feb. 29, 2024 | |
Loss Contingencies [Line Items] | |||||||||||
Purchase obligation | $ 131,000,000 | ||||||||||
Purchase commitment, period | 5 years | ||||||||||
Purchase obligation, year three | $ 28,000,000 | ||||||||||
Purchase obligation, year four | 28,000,000 | ||||||||||
Purchase obligation, year five | $ 28,000,000 | ||||||||||
Payments for purchase obligation | $ 10,700,000 | $ 9,100,000 | $ 21,000,000 | $ 18,500,000 | |||||||
Authorized to repurchase | $ 50,000,000 | ||||||||||
Number of shares repurchased (in shares) | 1,300,000 | ||||||||||
Average share price (in usd per share) | $ 37.86 | ||||||||||
Repurchase of common stock | $ 50,000,000 | $ 50,019,000 | |||||||||
Common stock, shares outstanding (in shares) | 72,300,000 | 72,300,000 | |||||||||
Treasury stock, shares (in shares) | 1,213,686 | 1,213,686 | |||||||||
Pegasystems Litigation | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
JPI cost | $ 57,300,000 | ||||||||||
JPI, threshold amount | $ 500,000,000 | ||||||||||
Appeal process, period | 3 years | 3 years | |||||||||
JPI expense | $ 4,500,000 | $ 9,000,000 | |||||||||
JPI current | 18,100,000 | 18,100,000 | |||||||||
JPI noncurrent | $ 24,200,000 | $ 24,200,000 | |||||||||
Pegasystems Litigation | Misappropriation of Trade Secrets | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Amount awarded in settlement | $ 2,036,000,000 | $ 2,036,000,000 | |||||||||
Pegasystems Litigation | Violation of Virginia Computer Crimes Act | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Amount awarded in settlement | $ 1 | ||||||||||
Pegasystems Litigation | Attorney's Fees Associated | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Amount awarded in settlement | 23,600,000 | ||||||||||
Pegasystems Litigation | Statutory Post Judgement Interest on Judgmental | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Amount awarded in settlement | $ 122,000,000 | ||||||||||
Interest on damages awarded (as a percentage) | 6% | ||||||||||
Youyong Zou Litigation | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Amount awarded in settlement | $ 5,000,000 |
Segment and Geographic Inform_3
Segment and Geographic Information - Schedule of Revenue by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 146,450 | $ 127,715 | $ 296,285 | $ 262,950 |
Domestic | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 90,534 | 78,694 | 184,647 | 168,699 |
International | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 55,916 | $ 49,021 | $ 111,638 | $ 94,251 |
Segment and Geographic Inform_4
Segment and Geographic Information - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 31.8 | $ 34 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 12.1 | $ 12.6 |
Investments and Fair Value Me_3
Investments and Fair Value Measurements - Components of Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||||
Cash and cash equivalents, Cost Basis | $ 120,787 | $ 149,351 | $ 171,530 | $ 148,132 |
Total Investments, Cost Basis | 149,140 | 159,009 | ||
Short-term investments and marketable securities, Unrealized Gains (Losses) | (8) | (5) | ||
Short-term investments and marketable securities, Fair Value | 28,345 | 9,653 | ||
Total investments, Fair Value | 149,132 | 159,004 | ||
U.S. Treasury bonds | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Short-term investments and marketable securities, Fair Value | 14,657 | 4,828 | ||
U.S. Treasury bonds | Level 1 | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Short-term investments and marketable securities, Cost Basis | 14,660 | 4,830 | ||
Short-term investments and marketable securities, Unrealized Gains (Losses) | (3) | (2) | ||
Short-term investments and marketable securities, Fair Value | 14,657 | 4,828 | ||
Commercial paper | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Short-term investments and marketable securities, Fair Value | 2,890 | |||
Commercial paper | Level 2 | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Short-term investments and marketable securities, Cost Basis | 2,893 | |||
Short-term investments and marketable securities, Unrealized Gains (Losses) | (3) | |||
Short-term investments and marketable securities, Fair Value | 2,890 | |||
Corporate bonds | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Short-term investments and marketable securities, Fair Value | 10,798 | |||
Corporate bonds | Level 2 | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Short-term investments and marketable securities, Cost Basis | 10,800 | |||
Short-term investments and marketable securities, Unrealized Gains (Losses) | (2) | |||
Short-term investments and marketable securities, Fair Value | 10,798 | |||
Agency bonds | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Short-term investments and marketable securities, Fair Value | 4,825 | |||
Agency bonds | Level 2 | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Short-term investments and marketable securities, Cost Basis | 4,828 | |||
Short-term investments and marketable securities, Unrealized Gains (Losses) | (3) | |||
Short-term investments and marketable securities, Fair Value | 4,825 | |||
Cash | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Cash and cash equivalents, Cost Basis | 66,506 | 93,029 | ||
Cash | Level 1 | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Cash and cash equivalents, Cost Basis | 66,506 | 93,029 | ||
Cash and cash equivalents, Fair Value | 66,506 | 93,029 | ||
Money market fund | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Cash and cash equivalents, Cost Basis | 54,281 | 56,322 | ||
Money market fund | Level 1 | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Cash and cash equivalents, Cost Basis | 54,281 | 56,322 | ||
Cash and cash equivalents, Fair Value | $ 54,281 | $ 56,322 |
Investments and Fair Value Me_4
Investments and Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Investment income, interest | $ 1.7 | $ 2.7 | $ 3.6 | $ 4.7 |