Twilio (TWLO) 10-K 1 Mar 19 2018 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2018	Feb. 01, 2019	Jun. 29, 2018
Entity Registrant Name	TWILIO INC
Entity Central Index Key	1,447,669
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 4.4
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	FY
Common Class A
Entity Common Stock, Shares Outstanding		104,277,870
Common Class B
Entity Common Stock, Shares Outstanding		19,303,259

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 487,215	$ 115,286
Short-term marketable securities	261,128	175,587
Accounts receivable, net	97,712	43,113
Prepaid expenses and other current assets	26,893	19,279
Total current assets	872,948	353,265
Restricted cash	18,119	5,502
Property and equipment, net	63,534	50,541
Intangible assets, net	27,558	20,064
Goodwill	38,165	17,851
Other long-term assets	8,386	2,559
Total assets	1,028,710	449,782
Current liabilities:
Accounts payable	18,495	11,116
Accrued expenses and other current liabilities	99,758	53,614
Deferred revenue and customer deposits	19,557	13,797
Total current liabilities	137,810	78,527
Convertible senior notes, net	434,496
Other long-term liabilities	18,169	11,409
Total liabilities	590,475	89,936
Commitments and contingencies (Note 11)
Stockholders' equity:
Common stock, $0.001 par value per share: Authorized shares 1,100,000,000 as of December 31, 2018 and 2017; Issued and outstanding shares 100,080,228 and 93,969,796 as of December 31, 2018 and 2017	100	94
Additional paid-in capital	808,527	608,165
Accumulated other comprehensive income	1,282	2,025
Accumulated deficit	(371,674)	(250,438)
Total stockholders' equity	438,235	359,846
Total liabilities and stockholders' equity	$ 1,028,710	$ 449,782

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized (in shares)	100,000,000	100,000,000
Preferred stock, issued (in shares)	0	0
Common Stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	1,100,000,000	1,100,000,000
Common stock, issued (in shares)	100,080,228	93,969,796
Common stock, outstanding (in shares)	100,080,228	93,969,796

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Consolidated Statements of Operations
Revenue	$ 650,067	$ 399,020	$ 277,335
Cost of revenue	300,841	182,895	120,520
Gross profit	349,226	216,125	156,815
Operating expenses:
Research and development	171,358	120,739	77,926
Sales and marketing	175,555	100,669	65,267
General and administrative	110,427	59,619	51,077
Charitable contribution	7,121	1,172	3,860
Total operating expenses	464,461	282,199	198,130
Loss from operations	(115,235)	(66,074)	(41,315)
Other (expenses) income, net	(5,923)	3,071	317
Loss before provision for income taxes	(121,158)	(63,003)	(40,998)
Provision for income taxes	(791)	(705)	(326)
Net loss attributable to common stockholders	$ (121,949)	$ (63,708)	$ (41,324)
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share)	$ (1.26)	$ (0.70)	$ (0.78)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (in shares)	97,130,339	91,224,607	53,116,675

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Consolidated Statements of Comprehensive Loss
Net loss	$ (121,949)	$ (63,708)	$ (41,324)
Other comprehensive (loss) income:
Unrealized gain (loss) on marketable securities	258	(598)
Foreign currency translation	(1,001)	2,623
Total other comprehensive (loss) income	(743)	2,025
Comprehensive loss attributable to common stockholders	$ (122,692)	$ (61,683)	$ (41,324)

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	IPOCommon StockCommon Class A	IPOAdditional Paid-in Capital	IPO	Follow-on Public OfferingCommon StockCommon Class A	Follow-on Public OfferingAdditional Paid-in Capital	Follow-on Public Offering	Preferred StockConvertible preferred stock	Common StockCommon Class A	Common StockCommon Class B	Additional Paid-in Capital	Accumulated Other Comprehensive Income	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2015							$ 239,911		$ 17	$ 22,103		$ (145,406)	$ 116,625
Beginning balance (in shares) at Dec. 31, 2015							54,508,441		17,324,003
Increase (Decrease) in Stockholders' Equity
Net loss												(41,324)	(41,324)
Issuance of stock	$ 12	$ 160,414	$ 160,426	$ 2	$ 65,279	$ 65,281
Issuance of stock (in shares)	11,500,000			1,691,222
Costs related to public offerings										(5,730)			(5,730)
Conversion of convertible preferred stock to common stock in connection with initial public offering							$ (239,911)		$ 54	239,857
Conversion of convertible preferred stock to common stock in connection with initial public offering (in shares)							(54,508,441)		54,508,441
Exercise of vested stock options									$ 2	8,390			8,392
Exercise of vested stock options (in shares)									2,168,287
Vesting of early exercised stock options										636			636
Vesting of restricted stock units (in shares)								19,178	68,345
Value of equity awards withheld for tax liability										(1,037)			(1,037)
Value of equity awards withheld for tax liability (in shares)								(1,578)	(27,036)
Exercises of unvested stock options (in shares)									126,365
Conversion of shares of Class B common stock into shares of Class A common stock								$ 37	$ (37)
Conversion of shares of Class B common stock into shares of Class A common stock (in shares)								36,787,588	(36,787,588)
Repurchase of unvested stock options (in shares)									(1,625)
Stock-based compensation										26,178			26,178
Escrow shares returned to the issuer (in shares)									(127,054)
Ending balance at Dec. 31, 2016								$ 51	$ 36	516,090		(186,730)	329,447
Ending balance (in shares) at Dec. 31, 2016								49,996,410	37,252,138
Increase (Decrease) in Stockholders' Equity
Net loss												(63,708)	(63,708)
Exercise of vested stock options									$ 6	25,591			25,597
Exercise of vested stock options (in shares)									5,186,539
Vesting of early exercised stock options										378			378
Vesting of restricted stock units (in shares)								360,116	351,255
Value of equity awards withheld for tax liability										(678)			(678)
Value of equity awards withheld for tax liability (in shares)									(22,538)
Exercises of unvested stock options (in shares)									22,510
Conversion of shares of Class B common stock into shares of Class A common stock								$ 18	$ (18)
Conversion of shares of Class B common stock into shares of Class A common stock (in shares)								18,710,499	(18,710,499)
Shares issued under ESPP								$ 1		11,917			11,918
Shares issued under ESPP (in shares)								794,142
Donated common stock										1,172			1,172
Donated common stock (in shares)								45,383
Repurchase of unvested stock options										(100)			(100)
Repurchase of unvested stock options (in shares)									(16,159)
Unrealized gain (loss) on marketable securities											$ (598)		(598)
Foreign currency translation											2,623		2,623
Stock-based compensation										53,795			53,795
Ending balance at Dec. 31, 2017								$ 70	$ 24	608,165	2,025	(250,438)	359,846
Ending balance (in shares) at Dec. 31, 2017								69,906,550	24,063,246
Increase (Decrease) in Stockholders' Equity
Net loss												(121,949)	(121,949)
Adjustment to opening retained earnings due to adoption of ASC 606 | ASU 2014-09 - Revenue from Contracts with Customers												713	713
Exercise of vested stock options									$ 4	29,732			29,736
Exercise of vested stock options (in shares)									3,625,991
Vesting of early exercised stock options										36			36
Vesting of restricted stock units								$ 2					2
Vesting of restricted stock units (in shares)								1,970,565	172,211
Value of equity awards withheld for tax liability										(2,654)			(2,654)
Value of equity awards withheld for tax liability (in shares)								(25,932)	(22,044)
Exercises of unvested stock options (in shares)									2,041
Conversion of shares of Class B common stock into shares of Class A common stock								$ 8	$ (8)
Conversion of shares of Class B common stock into shares of Class A common stock (in shares)								8,530,980	(8,530,980)
Shares issued under ESPP										10,122			10,122
Shares issued under ESPP (in shares)								325,262
Issuance of debt conversion option										119,435			119,435
Debt conversion option issuance costs										(2,819)			(2,819)
Capped call option issuance costs										(58,465)			(58,465)
Donated common stock										5,996			5,996
Donated common stock (in shares)								62,338
Unrealized gain (loss) on marketable securities											258		258
Foreign currency translation											(1,001)		(1,001)
Stock-based compensation										98,979			98,979
Ending balance at Dec. 31, 2018								$ 80	$ 20	$ 808,527	$ 1,282	$ (371,674)	$ 438,235
Ending balance (in shares) at Dec. 31, 2018								80,769,763	19,310,465

Condensed Consolidated Statemen

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (121,949)	$ (63,708)	$ (41,324)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	26,095	18,764	8,315
Net amortization of investment premium or discount	(1,496)	262
Amortization of debt issuance costs	1,102
Accretion of debt discount on convertible senior notes	12,951
Amortization of deferred commissions	1,349
Stock-based compensation	93,273	49,619	24,225
Value of donated common stock	5,996	1,172
Provision for doubtful accounts	3,650	580	1,145
Write-off of internally developed software and intangible assets	1,874	561	711
(Gain) loss on lease termination and asset disposals	(45)	(295)	94
Changes in operating assets and liabilities:
Accounts receivable	(58,234)	(15,280)	(8,254)
Prepaid expenses and other current assets	(8,739)	2,214	(13,755)
Other long-term assets	(5,305)	(1,984)	(129)
Accounts payable	6,980	5,433	1,714
Accrued expenses and other current liabilities	45,120	(3,312)	24,182
Deferred revenue and customer deposits	5,958	3,560	4,076
Other long-term liabilities	(597)	(841)	9,097
Net cash provided by (used in) operating activities	7,983	(3,255)	10,097
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities	(279,687)	(293,186)
Maturities of marketable securities	195,497	115,877
Capitalized software development costs	(19,546)	(17,280)	(11,527)
Purchases of property and equipment	(4,668)	(9,248)	(14,174)
Purchases of intangible assets	(441)	(290)	(785)
Acquisitions, net of cash acquired	(30,574)	(22,621)	(8,500)
Net cash used in investing activities	(139,419)	(226,748)	(34,986)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Initial Public Offering, net of underwriting discounts			160,426
Proceeds from Follow-On Public Offering, net of underwriting discounts			65,281
Payments of costs related to public offerings		(430)	(4,606)
Proceeds from issuance of convertible senior notes	550,000
Payments of debt issuance costs	(12,941)
Purchase of capped call	(58,465)
Proceeds from exercises of stock options	29,757	25,727	9,102
Proceeds from shares issued in ESPP	10,122	11,918
Value of equity awards withheld for tax liabilities	(2,654)	(678)	(1,037)
Repurchases of common stock		(100)	(2)
Net cash provided by financing activities	515,819	36,437	229,164
Effect of exchange rate changes on cash and cash equivalents	163	74
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	384,546	(193,492)	204,275
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of year	120,788	314,280	110,005
CASH, CASH EQUIVALENTS AND RESTRICTED CASH -End of year	505,334	120,788	314,280
Cash paid for income taxes	564	605	225
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Purchases of property and equipment and intangible assets, accrued but not paid	1,418	235	4,201
Purchases of property, equipment through capital lease	2,478
Stock-based compensation capitalized in software development costs	5,706	4,176	1,953
Business combination measurement period adjustments	571	$ 149
Acquisition holdback	$ 2,290
Costs related to public offerings, accrued but not paid			$ 430

Organization and Description of

Organization and Description of Business	12 Months Ended
	Dec. 31, 2018
Organization and Description of Business
Organization and Description of Business	1. Organization and Description of Business Twilio Inc. (the “Company”) was incorporated in the state of Delaware on March 13, 2008. The Company is the leader in the Cloud Communications Platform category and enables developers to build, scale and operate real-time communications within their software applications via simple-to-use Application Programming Interfaces (“API”). The power, flexibility, and reliability offered by the Company’s software building blocks empower entities of virtually every shape and size to build world-class engagement into their customer experience. The Company’s headquarters are located in San Francisco, California, and the Company has subsidiaries in the United States, the United Kingdom, Estonia, Ireland, Colombia, Germany, Hong Kong, Singapore, Bermuda, Spain, Sweden, Australia, Czech Republic, Japan and the Netherlands.

Summary of Significant Accounti

Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies (a) The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). (b) The consolidated financial statements include the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. (c) The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, recoverability of long‑lived and intangible assets; capitalization and useful life of the Company’s capitalized internal‑use software development costs; fair value of acquired intangible assets and goodwill; accruals and contingencies. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. (d) Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash, cash equivalents, marketable securities, restricted cash and accounts receivable. The Company maintains cash, cash equivalents, restricted cash and marketable securities with financial institutions that management believes are financially sound and have minimal credit risk exposure although the balances will exceed insured limits. The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customers deteriorate substantially, operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company does not require collateral from its credit customers and maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. During the years ended December 31, 2018 and 2017, there was no customer organization that accounted for more than 10% of the Company’s total revenue. During the year ended December 31, 2016, one customer organization represented approximately 14% of the Company’s total revenue. As of December 31, 2018 and 2017, there was no customer organization that represented more than 10% of the Company’s gross accounts receivable. (e) Adoption of Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” Effective January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606, “ Revenue from Contracts with Customers” , which replaced the existing revenue recognition guidance, ASC 605, and outlines a single set of comprehensive principles for recognizing revenue under U.S. GAAP. Among other things, ASC 606 requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenue, which is referred to as a performance obligation. Revenue is recognized when control of the promised products or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those products or services. The Company adopted ASC 606 using the modified retrospective method with a cumulative catch-up adjustment to the opening retained earnings as of January 1, 2018. Results for reporting periods beginning after December 31, 2017 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical accounting policies prior to adoption. In adopting the standard, the Company elected to apply the new guidance only to those contracts which were not completed as of the date of the adoption. The impact of adopting the new standard on the Company’s consolidated financial statements was insignificant. The Company recorded a net cumulative catch-up adjustment to the beginning retained earnings as of January 1, 2018, of $0.7 million. The primary impact relates to the deferral of incremental commission costs of obtaining new contracts. Under ASC 605, the Company deferred only direct and incremental commission costs to obtain a contract and amortized those costs on a straight-line basis over the term of the related subscription contract. Under the new standard, the Company defers all incremental commission costs to obtain the contract and amortizes these costs on a straight-line basis over the expected term of benefit of the underlying asset, which was determined to be five years. The impact on the Company’s revenue recognition policies was insignificant. Prior to the adoption of ASC 606, the Company recognized the majority of its revenue according to the usage by its customers in the period in which that usage occurred. ASC 606 continues to support the recognition of revenue over time, and on a usage basis, for the majority of the Company’s contracts due to continuous transfer of control to the customer. There was not a significant tax impact to the Company’s consolidated statements of operations and consolidated balance sheet relating to the adoption of the new standard as there is a full valuation allowance due to the Company’s history of continued losses. Revenue Recognition Policy Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for credits and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer; · Identification of the performance obligations in the contract; · Determination of the transaction price; · Allocation of the transaction price to the performance obligations in the contract; and · Recognition of revenue when, or as, the Company satisfies a performance obligation. Nature of Products and Services The Company’s revenue is primarily derived from usage-based fees earned from customers accessing the Company’s enterprise cloud computing services. Platform access is considered a monthly series comprising of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. In the years ended December 31, 2018, 2017 and 2016, the revenue from usage-based fees represented 84%, 83% and 83% of total revenue, respectively. Subscription-based fees are derived from certain term-based contracts, such as with the sales of short codes and customer support. Term-based contracts revenue is recognized on a ratable basis over the contractual term of the arrangement beginning on the date that the service is made available to the customer. In the years ended December 31, 2018 and 2017, the revenue from term-based fees represented 16% and 17% of total revenue, respectively. The Company applied the optional exemption of not disclosing the transaction price allocated to the remaining performance obligations for its usage-based contracts and contracts with original duration of one year or less. The majority of the Company’s contracts have a duration of one year or less. No significant judgments are required in determining whether products and services are considered distinct performance obligations and should be accounted for separately versus together, or to determine the stand-alone selling price (“SSP”). The Company’s arrangements do not contain general rights of return. However, credits may be issued on a case-by-case basis. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in accounts receivable and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met. The reserve for sales credits is included in accounts receivable and is calculated based on historical trends and any specific risks identified in processing transactions. Changes in the reserve are recorded against revenue. Deferred Revenue and Customer Deposits Deferred revenue is recorded when cash payments are received in advance of future usage on non-cancellable contracts. Customer refundable prepayments are recorded as customer deposits. As of December 31, 2018, the Company recorded $10.3 million and $9.3 million as its deferred revenue and customer deposits, respectively. In the year ended December 31, 2018, the Company recognized $10.5 million of revenue, that was included in the deferred revenue and customer deposits balance as of January 1, 2018. Deferred Sales Commissions The Company records an asset for the incremental costs of obtaining a contract with a customer, for example, sales commissions that are earned upon execution of contracts. The Company uses the portfolio of data method to determine the estimated period of benefit of capitalized commissions which is determined to be five years. Amortization expense related to these capitalized costs related to initial contracts, upsells and renewals, is recognized on a straight line basis over the estimated period of benefit of the capitalized commissions. Total net capitalized costs as of December 31, 2018 were $9.4 million and are included in prepaid expenses and other current and long-term assets in the accompanying consolidated balance sheet. Amortization of these assets was $1.4 million in the year ended December 31, 2018, and is included in sales and marketing expense in the accompanying consolidated statement of operations. (f) Cost of revenue consists primarily of costs of communications services purchased from network service providers. Cost of revenue also includes fees to support the Company’s cloud infrastructure, personnel costs, such as salaries and stock-based compensation for the customer care and support services employees, and non-personnel costs, such as amortization of capitalized internal-use software development costs and amortization of acquired intangibles. (g) Research and development expenses consist primarily of personnel costs, cloud infrastructure fees for staging and development, outsourced engineering services, amortization of capitalized internal-use software development costs and an allocation of general overhead expenses. The Company capitalizes the portion of its software development costs that meets the criteria for capitalization. (h) Certain costs of platform and other software applications developed for internal use are capitalized. The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed and (ii) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality and expenses costs incurred for maintenance and minor upgrades and enhancements. Costs related to preliminary project activities and post-implementation operating activities are also expensed as incurred. Capitalized costs of platform and other software applications are included in property and equipment. These costs are amortized over the estimated useful life of the software on a straight-line basis over three years. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. The amortization of costs related to the platform applications is included in cost of revenue, while the amortization of costs related to other software applications developed for internal use is included in operating expenses. (i) Advertising costs are expensed as incurred and were $10.6 million, $4.9 million and $3.5 million in the years ended December 31, 2018, 2017 and 2016, respectively. Advertising costs are included in sales and marketing expenses in the accompanying consolidated statements of operations. (j) All stock-based compensation to employees, including the purchase rights issued under the Company’s 2016 Employee Stock Purchase Plan (the “ESPP”), is measured on the grant date based on the fair value of the awards on the date of grant. This cost is recognized as an expense following straight-line attribution method over the requisite service period. The Company uses the Black-Scholes option pricing model to measure the fair value of its stock options and the purchase rights issued under the ESPP. The fair value of the restricted stock units is determined using the fair value of the Company’s Class A common stock on the date of grant and recognized as an expense following straight-line attribution method over the requisite service period. Prior to adoption of ASU 2016-09, the stock-based compensation was recorded net of estimated forfeitures. In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting” , which aligns the measurement and classification for share-based payments to non-employees with the accounting guidance for share-based payments to employees. Among other requirements, the measurement of non-employee awards will now be fixed at the grant date, rather than remeasured at every reporting date. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, with early application permitted. The Company early-adopted this guidance in the quarter ended December 31, 2018 which did not have a material impact to its financial statements. In May 2017, the FASB issued ASU 2017-09, “Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting” , ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. ASU 2017-09 allows companies to make certain changes to awards, such as vesting conditions, without accounting for them as modifications. It does not change the accounting for modifications. ASU 2017-09 should be applied prospectively to awards modified on or after the adoption date. The Company adopted ASU 2017-09 in the first quarter of 2018. The adoption of this guidance did not have an impact on the Company’s financial position, results of operations or cash flows. In March 2016, FASB issued ASU No. 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share -Based Payment Accounting.” This new guidance was intended to simplify several areas of accounting for stock-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. The Company early adopted this guidance in the quarter ended December 31, 2016. The new guidance allows entities to account for forfeitures as they occur. The Company elected to account for forfeitures as they occur and adopted this provision on a modified retrospective basis. The $0.1 million of cumulative prior years’ impact as well as the impact on the first three quarters of 2016 of $75,000 was recognized as an increase to stock-based compensation during the quarter ended December 31, 2016, as the impact on prior periods was insignificant. Adoption of all other changes in the new guidance did not have a significant impact on the Company’s consolidated financial statements. Compensation expense for stock options granted to nonemployees is calculated using the Black-Scholes option pricing model and is recognized in expense over the service period. The Black-Scholes option pricing model requires the use of complex assumptions, which determine the fair value of stock-based awards. These assumptions include: · Fair value of the common stock . Prior to the Company’s IPO, the board of directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting at which awards are approved. The factors included, but were not limited to: (i) contemporaneous valuations of the Company’s common stock by an unrelated third party; (ii) the prices at which the Company sold shares of its convertible preferred stock to outside investors in arms-length transactions; (iii) the rights, preferences and privileges of the Company’s convertible preferred stock relative to those of its common stock; (iv) the Company’s results of operations, financial position and capital resources; (v) current business conditions and projections; (vi) the lack of marketability of the Company’s common stock; (vii) the hiring of key personnel and the experience of management; (viii) the introduction of new products; (ix) the risk inherent in the development and expansion of the Company’s products; (x) the Company’s stage of development and material risks related to its business; (xi) the fact that the option grants involve illiquid securities in a private company; and (xii) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, in light of prevailing market conditions; After the IPO, the Company uses the market closing price of its Class A common stock, as reported on the New York Stock Exchange, for the fair value. · Expected term . The expected term represents the period that the stock-based awards are expected to be outstanding. The Company uses the simplified calculation of expected term, as the Company does not have sufficient historical data to use any other method to estimate expected term; · Expected volatility . The expected volatility is derived from an average of the historical volatilities of the common stock of several entities with characteristics similar to those of the Company, such as the size and operational and economic similarities to the Company’s principal business operations; · Risk -free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term of the stock-based awards; and · Expected dividend . The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. If any of the assumptions used in the Black-Scholes model changes, stock-based compensation for future options may differ materially compared to that associated with previous grants. (k) The Company accounts for income taxes in accordance with authoritative guidance which requires the use of the asset and liability approach. Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carry-forwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to uncertain tax positions in the provision for income taxes in the consolidated statements of operations. (l) Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is generally the U.S. dollar. Accordingly, the subsidiaries remeasure monetary assets and liabilities at period-end exchange rates, while non-monetary items are remeasured at historical rates. Revenue and expense accounts are remeasured at the average exchange rate in effect during the year. Remeasurement adjustments are recognized in the consolidated statements of operations as other income or expense in the year of occurrence. Foreign currency transaction gains and losses were insignificant for all periods presented. For those entities where the functional currency is a foreign currency, adjustments resulting from translating the financial statements into U.S. dollars are recorded as a component of accumulated other comprehensive income (loss) in stockholders' equity. Monetary assets and liabilities denominated in a foreign currency are translated into US dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the weighted average exchange rates during the period. Equity transactions are translated using historical exchange rates. Foreign currency transaction gains and losses are included in other income (expense), net in the consolidated statements of operations. (m) Comprehensive Income (Loss) Comprehensive income (loss) refers to net income (loss) and other revenue, expenses, gains and losses that, under generally accepted accounting principles, are recorded as an element of stockholders' equity but are excluded from the calculation of net income (loss). For the year ended December 31, 2016, the Company's operations did not give rise to any material items includable in comprehensive income (loss), which were not already in net income (loss). Accordingly, for that period, the Company's comprehensive income (loss) is the same as its net income (loss). (n) Net Loss Per Share Attributable to Common Stockholders The Company calculates its basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. All series of convertible preferred stock are considered to be participating securities as the holders of the preferred stock are entitled to receive a non-cumulative dividend on a pro rata pari passu basis in the event that a dividend is declared or paid on common stock. Shares of common stock issued upon early exercise of stock options that are subject to repurchase are also considered to be participating securities, because holders of such shares have non-forfeitable dividend rights in the event a dividend is declared or paid on common stock. Under the two-class method, in periods when the Company has net income, net income attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income less current period convertible preferred stock non-cumulative dividends, between common stock and the convertible preferred stock. In computing diluted net income attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. The dilutive effect of these potential common shares is reflected in diluted earnings per share by application of the treasury stock method. For purposes of this calculation, convertible preferred stock, options to purchase common stock, unvested restricted stock units, common stock issued subject to future vesting, any shares of stock committed under the ESPP, any shares of stock held in escrow and any shares of stock reserved for future donations are considered common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive. Since the Company’s IPO in 2016, Class A and Class B common stock are the only outstanding equity of the Company. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to 10 votes per share. Shares of Class B common stock may be converted into Class A common stock at any time at the option of the stockholder on a one-for-one basis, and are automatically converted into Class A common stock upon sale or transfer, subject to certain limited exceptions. Shares of Class A common stock are not convertible. (o) The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist of funds deposited into money market funds and reverse repurchase agreements. All credit and debit card transactions that process as of the last day of each month and settle within the first few days of the subsequent month are also classified as cash and cash equivalents as of the end of the month in which they were processed. (p) Restricted Cash Restricted cash consists of cash deposited into a savings account with a financial institution as collateral for the Company’s obligations under its facility leases of premises located in San Francisco, California. The facility lease for the Company’s old office space expired in January 2017 and the facility leases for the Company’s current offices expire at various dates between October 2024 and June 2028. In November 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-18, “Statement of Cash Flows (Topic 230)—Restricted Cash” . This standard provides guidance on the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. Restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statements of cash flows. The amendments of this ASU should be applied using a retrospective transition method and are effective for reporting periods beginning after December 15, 2017. The Company adopted ASU 2016-18 in the first quarter of 2018 and applied the guidance retrospectively to the prior period’s consolidated statement of cash flows with the following impact (in thousands): Year Ended Year Ended December 31, 2017 December 31, 2016 As Originally As Originally Reported As Adjusted Reported As Adjusted Cash provided by (used in) operating activities $ (3,260) $ (3,255) $ 10,091 $ 10,097 Cash used in investing activities $ (223,630) $ (226,748) $ (42,425) (34,986) Cash, cash equivalents and restricted cash — beginning of period 305,665 314,280 108,835 110,005 Cash, cash equivalents and restricted cash — end of period $ 115,286 $ 120,788 $ 305,665 $ 314,280 Other than the revised statement of cash flows presentation of restricted cash, the adoption of ASU 2016-18 did not have an impact on the Company’s financial position and results of operations. The restricted cash balances as of December 31, 2018 and December 31, 2017 were $18.1 million and $5.5 million, respectively. (q) Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded net of the allowance for doubtful accounts and the reserve for sales credits. The allowance for doubtful accounts is estimated based on the Company’s assessment of its ability to collect on customer accounts receivable. The Company regularly reviews the allowance by considering certain factors such as historical experience, credit quality, age of accounts receivable balances and other known conditions that may affect a customer’s ability to pay. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet their financial obligations, a specific allowance is recorded against amounts due from the customer which reduces the net recognized receivable to the amount the Company reasonably believe will be collected. The Company writes-off accounts receivable against the allowance when a determination is made that the balance is uncollectible and collection of the receivable is no longer being actively pursued. The allowance for doubtful accounts was $4.9 million and $1.0 million as of December 31, 2018 and 2017, respectively. (r) Costs Related to the Public Offerings Costs related to the public offerings, which consist of direct incremental legal, printing and accounting fees, are deferred until the offering is completed. Upon completion of the offering, these costs are offset against the offering proceeds within the consolidated statements of stockholders’ equity. In the year ended December 31, 2016, the Company recorded in its consolidated statement of stockholders’ equity $5.7 million in total offering costs. (s) Property and Equipment Property and equipment, both owned and under capital lease, is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful life of the related asset. Maintenance and repairs are charged to expenses as incurred. The useful lives of property and equipment are as follows: Capitalized software development costs 3 years Office equipment 3 years Furniture and fixtures 5 years Software 3 years Assets under capital lease 5 years or remaining lease term Leasehold improvements 5 years or remaining lease term (t) Intangible Assets Intangible assets recorded by the Company are costs directly associated with securing legal registration of patents and trademarks, acquiring domain names and the fair value of identifiable intangible assets acquired in business combinations. Intangible assets with determinable economic lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful life of each asset on a straight-line basis. The Company determines the useful lives of identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company’s long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset and other economic factors, including competition and specific market conditions. Intangible assets without determinable economic lives are carried at cost, not amortized and reviewed for impairment at least annually. The useful lives of the intangible assets are as follows: Developed technology 3 - 4 years Customer relationships 2 - 8 years Supplier relationships 5 years Trade names 2 years Patents 20 years Trademarks Indefinite Domain names Indefinite (u) Goodwill Goodwill represents excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes

Fair Value Measurements

Fair Value Measurements	12 Months Ended
	Dec. 31, 2018
Fair Value Measurements
Fair Value Measurements	3. Fair Value Measurements The following tables provide the assets measured at fair value on a recurring basis as of December 31, 2018 and 2017 (in thousands): Gross Gross Amortized Unrealized Unrealized Cost or Gross Losses Losses More Fair Value Hierarchy as of Carrying Unrealized Less Than Than December 31, 2018 Aggregate Value Gains 12 Months 12 Months Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash and cash equivalents: Money market funds $ 420,234 $ — $ — $ — $ 420,234 $ — $ — $ 420,234 Reverse repurchase agreements 35,000 — — — — 35,000 — 35,000 Commercial paper 9,983 — — — — 9,983 — 9,983 Total included in cash and cash equivalents 465,217 — — — 420,234 44,983 — 465,217 Marketable securities: U.S. Treasury securities 59,785 — (7) (9) 59,769 — — 59,769 Corporate debt securities and commercial paper 201,683 23 (123) (224) — 201,359 — 201,359 Total marketable securities 261,468 23 (130) (233) 59,769 201,359 — 261,128 Total financial assets $ 726,685 $ 23 $ (130) $ (233) $ 480,003 $ 246,342 $ — $ 726,345 Gross Gross Amortized Unrealized Unrealized Cost or Gross Losses Losses More Fair Value Hierarchy as of Carrying Unrealized Less Than Than December 31, 2017 Aggregate Value Gains 12 Months 12 Months Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash and cash equivalents: Money market funds $ 95,432 $ — $ — $ — $ 95,432 $ — $ — $ 95,432 Total included in cash and cash equivalents 95,432 — — — 95,432 — — 95,432 Marketable securities: U.S. Treasury securities 59,962 — (216) — 59,746 — — 59,746 Corporate debt securities and commercial paper 116,223 — (382) — — 115,841 — 115,841 Total marketable securities 176,185 — (598) — 59,746 115,841 — 175,587 Total financial assets $ 271,617 $ — $ (598) $ — $ 155,178 $ 115,841 $ — $ 271,019 As of December 31, 2018, the fair value of the 0.25% convertible senior notes due 2023 (the “Notes”), as further described in Note 8 below, was approximately $743.4 million. As the Company views its marketable securities as available to support current operations, it has classified all available for sale securities as short-term. As of December 31, 2018, for fixed income securities that were in unrealized loss positions, the Company has determined that (i) it does not have the intent to sell any of these investments, and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. In addition, as of December 31, 2018, the Company anticipates that it will recover the entire amortized cost basis of such fixed income securities and has determined that no other-than-temporary impairments associated with credit losses were required to be recognized during the years ended December 31, 2018 and 2017. Interest earned on marketable securities was $3.0 million and $2.6 million in the years ended December 31, 2018 and 2017, respectively. The interest is recorded as other income (expense), net, in the accompanying consolidated statements of operations. The following table summarizes the contractual maturities of marketable securities as of December 31, 2018 and 2017 (in thousands): As of December 31, 2018 As of December 31, 2017 Amortized Aggregate Fair Amortized Aggregate Fair Cost Value Cost Value Financial Assets: Less than one year $ 261,468 $ 261,128 $ 108,584 $ 108,360 One to two years — — 67,601 67,227 Total $ 261,468 $ 261,128 $ 176,185 $ 175,587 The Company enters into reverse securities repurchase agreements, primarily for short-term investments with maturities of 90 days or less. As of December 31, 2018, the Company was party to reverse repurchase agreements totaling $35.0 million, which were reported in cash and equivalents in the accompanying consolidated balance sheet. Under these reverse securities repurchase agreements, the Company typically lends available cash at a specified rate of interest and holds U.S. government securities as collateral during the term of the agreement. Collateral value is in excess of the amounts loaned under these agreements.

Property and Equipment

Property and Equipment	12 Months Ended
	Dec. 31, 2018
Property and Equipment
Property and Equipment	4. Property and Equipment Property and equipment consisted of the following (in thousands): As of December 31, 2018 2017 Capitalized internal-use software development costs $ 72,647 $ 49,177 Leasehold improvements 15,293 14,246 Office equipment 13,563 9,652 Furniture and fixtures 2,440 1,976 Assets under capital lease (1) 2,478 — Software 1,849 1,675 Total property and equipment 108,270 76,726 Less: accumulated depreciation and amortization (44,736) (26,185) Total property and equipment, net $ 63,534 $ 50,541 (1) Assets under capital lease relate to a sub-lease agreement that commenced in the fourth quarter of 2018, as further described in Note 11(a), and consist primarily of furniture that will be acquired at a bargain purchase option at the end of the lease term. Depreciation and amortization expense was $18.9 million, $13.1 million and $7.4 million for the years ended December 31, 2018, 2017 and 2016, respectively. The Company capitalized $25.3 million, $21.5 million and $13.5 million in internal-use software development costs in the years ended December 31, 2018, 2017 and 2016, respectively, of which $5.7 million, $4.2 million and $2.0 million, respectively, was stock‑based compensation expense. Amortization of capitalized software development costs was $13.0 million, $8.4 million and $5.5 million in the years ended December 31, 2018, 2017 and 2016, respectively. The amortization expense was allocated as follows (in thousands): Year Ended December 31, 2018 2017 2016 Cost of revenue $ 6,898 $ 4,788 $ 3,304 Research and development 5,437 3,619 2,182 General and administrative 689 — — Total $ 13,024 $ 8,407 $ 5,486

Business Combinations

Business Combinations	12 Months Ended
	Dec. 31, 2018
Business Combinations
Business Combinations	5. Business Combinations Fiscal 2018 Acquisitions VAI Technologies, LLC In November 2018, the Company acquired certain assets from VAI Technologies, LLC, a Delaware corporation and a developer of a natural language processing platform. The purchase price consisted of $1.2 million in cash, of which $0.3 was withheld by the Company for a period from 18 months to 4 years and can be extended under certain circumstances. The acquisition was accounted for as a business combination and, accordingly, the total purchase price was allocated to the identifiable intangibles assets acquired based on their respective fair values on the acquisition date. The excess of the purchase price over the fair values of the identifiable assets acquired was recorded as goodwill. The estimated fair value of the intangible assets acquired was determined by the Company. The following table presents the final purchase price allocation recorded in the Company’s consolidated balance sheet (in thousands): Total Intangible assets (1) $ 517 Goodwill (2) 683 Total purchase price $ 1,200 (1) The intangible assets consist of developed technology with the estimated useful life of 4 years on the date of acquisition. (2) The goodwill in this transaction is primarily attributable to the future cash flows to be realized from the acquired technology and the future development initiatives of the acquired workforce. The Company intends to file elections that make the goodwill deductible for U.S. tax purposes. The Company incurred cost related to this acquisition of $0.1 million that were expensed as incurred and have been recorded in general and administrative expenses in the accompanying consolidated statement of operations. Ytica.com a.s. In September 2018, the Company acquired all outstanding shares of Ytica.com a.s. (“Ytica”), a developer and provider of a contact center reporting and analytics based in the Czech Republic, for a total purchase price of $21.8 million, paid in cash, of which $3.2 million was held in escrow with a term of 18 months. Additionally, the Company granted 47,574 restricted stock units of the Company’s Class A common stock to a former shareholder of Ytica that had a value of $3.6 million and is subject to vesting over a period of three years. The Company is recording stock-based compensation expense as the shares are vesting. The acquisition was accounted for as a business combination and the total purchase price was allocated to the net tangible and intangible assets and liabilities based on their fair values on the acquisition date and the excess was recorded as goodwill. The acquired entity’s results of operations have been included in the consolidated financial statements of the Company from the date of acquisition. The following table presents the preliminary purchase price allocation recorded in the Company’s consolidated balance sheet as of December 31, 2018 (in thousands): Total Net tangible assets $ (1,538) Intangible assets (1) 9,920 Goodwill (2) 13,375 Total purchase price $ 21,757 (1) Identifiable finite-lived intangible assets were comprised of the following (in thousands): Estimated life Total (in years) Developed technology $ 9,090 4 Customer relationships 830 2 Total intangible assets acquired $ 9,920 (2) The goodwill is primarily attributable to the future cash flows to be realized from the acquired technology platform as well as operational synergies. The Company intends to file elections that make the goodwill deductible for U.S. tax purposes. The Company acquired a net deferred tax liability of $1.7 million in this business combination that is included in long-term liabilities in the accompanying consolidated balance sheet. The estimated fair value of the intangible assets acquired was determined by the Company, and the Company considered or relied in part upon a valuation report of a third-party expert. The Company used an income approach to estimate the fair values of the identifiable intangible assets. The Company incurred costs related to this acquisition of $0.6 million that were expensed as incurred and recorded in general and administrative expenses in the accompanying consolidated statement of operation. Pro forma results of operations for this acquisition are not presented as the financial impact to the Company’s consolidated financial statements is immaterial. Core Network Dynamics GmbH In August 2018, the Company acquired all outstanding shares of Core Network Dynamics GmbH (“CND”), a developer and provider of a complete software mobile network infrastructure based in Germany, for a total purchase price of $11.1 million, paid in cash, of which $2.0 million was withheld by the Company for a term of 18 months and is recorded in other long-term liabilities in the accompanying consolidated balance sheet. Additionally, the Company granted 35,950 restricted stock units of the Company’s Class A common stock to a former shareholder of CND that had a value of $2.2 million and is subject to vesting over a period of three years. The Company is recording a stock-based compensation expense as the shares are vesting. The acquisition was accounted for as a business combination and the total purchase price was allocated to the net tangible and intangible assets and liabilities based on their fair values on the acquisition date and the excess was recorded as goodwill. The acquired entity’s results of operations have been included in the consolidated financial statements of the Company from the date of acquisition. The following table presents the preliminary purchase price allocation recorded in the Company’s consolidated balance sheet as of December 31, 2018 (in thousands): Total Net tangible assets $ (313) Intangible assets (1) 4,500 Goodwill (2) 6,869 Total purchase price $ 11,056 (1) Identifiable finite-lived intangible assets were comprised of the following (in thousands): Estimated life Total (in years) Developed technology $ 3,910 4 Customer relationships 590 0.5 Total intangible assets acquired $ 4,500 (2) The goodwill is primarily attributable to the future cash flows to be realized from the operating synergies between the acquired technology platform and the Company’s Programmable Wireless products. The Company intends to file elections that make the goodwill deductible for U.S. tax purposes. The Company acquired a net deferred tax liability of $1.2 million in this business combination that is included in long-term liabilities in the accompanying consolidated balance sheet. The estimated fair value of the intangible assets acquired was determined by the Company, and the Company considered or relied in part upon a valuation report of a third-party expert. The Company used a replacement cost approach to estimate the fair values of the identifiable intangible assets. The Company incurred costs related to this acquisition of $0.8 million that were expensed as incurred and have been recorded in general and administrative expenses in the accompanying consolidated statement of operation. Pro forma results of operations for this acquisition are not presented as the financial impact to the Company’s consolidated financial statements is immaterial. Fiscal 2017 Acquisitions Beepsend, AB In February 2017, the Company completed its acquisition of Beepsend AB, a messaging provider based in Sweden, specializing in messaging and SMS solutions, for a total purchase price of $23.0 million, paid in cash, of which $5.0 million was held in escrow with a term of 18 months and was fully released at the escrow expiration date. Additionally, the Company deposited $2.0 million into a separate escrow account that was subject to certain service conditions and was released to certain employees on the first and second anniversaries of the closing date as the conditions were met. This amount was recorded as prepaid compensation in the accompanying consolidated balance sheet and was amortized into expense as the services were rendered. The acquisition was accounted for as a business combination and, accordingly, the total purchase price was allocated to the preliminary net tangible and intangible assets and liabilities based on their preliminary fair values on the acquisition date. The prepaid compensation subject to service conditions was accounted for as a post-acquisition compensation expense and recorded as research and development expense in the accompanying consolidated statements of operations. The acquired entity’s results of operations were included in the consolidated financial statements of the Company from the date of acquisition. The following table presents the purchase price allocation, as adjusted, recorded in the Company’s consolidated balance sheet (in thousands): Total Net tangible liabilities $ (3,575) Intangible assets (1) 13,700 Goodwill (2) 12,837 Total purchase price $ 22,962 (1) Identifiable finite-lived intangible assets were comprised of the following: Estimated life Total (in years) Developed technology $ 5,000 4 Customer relationships 6,100 7 - 8 Supplier relationships 2,600 5 Total intangible assets acquired $ 13,700 (2) Goodwill represents the excess of purchase price over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed. The goodwill in this transaction is primarily attributable to the future cash flows to be realized from the acquired technology platform, existing customer and supplier relationships as well as operational synergies. Goodwill is deductible for tax purposes. The Company acquired a net deferred tax liability of $2.6 million in this business combination that is included in the long-term liabilities in the accompanying consolidated balance sheet. The estimated fair value of the intangible assets acquired was determined by the Company, and the Company considered or relied in part upon a valuation report of a third-party expert. The Company used income approaches to estimate the fair values of the identifiable intangible assets. Specifically, the developed technology asset class was valued using the-relief-from royalty method, while the customer relationships asset class was valued using a multi-period excess earnings method and the supplier relationships asset class was valued using an incremental cash flow method. The Company incurred costs related to this acquisition of $0.7 million, of which $0.3 million and $0.4 million were incurred during fiscal years 2017 and 2016, respectively. All acquisition related costs were expensed as incurred and have been recorded in general and administrative expenses in the accompanying consolidated statements of operations. Pro forma results of operations for this acquisition are not presented as the financial impact to the Company’s consolidated financial statements is immaterial. Kurento Open Source Project In November 2016, the Company acquired certain assets from Tikal Technologies S.L., a Spanish corporation, behind the Kurento Open Source Project. The acquired assets consisted of (a) proprietary WebRTC media processing technologies, (b) certain licenses, patents and trademarks and (c) certain employee relationships behind the WebRTC technology. The purchase price consisted of $8.5 million in cash, of which $1.5 million was placed into escrow to indemnify the Company against breaches of general representations, warranties, claims and tax compliance matters. The escrow is effective for 24 months and 10 days from the acquisition date and may be extended under certain circumstances. The acquisition was accounted for as a business combination and, accordingly, the total purchase price was allocated to the identifiable intangibles assets acquired based on their respective fair values on the acquisition date. The excess of the purchase price over the fair values of the identifiable assets acquired was recorded as goodwill. The Company considered or relied in part upon a valuation report of a third-party expert. The following table presents the final purchase price allocation recorded in the Company’s consolidated balance sheet (in thousands): Total Intangible assets (1) $ 8,100 Goodwill (2) 400 Total purchase price $ 8,500 (1) The intangible assets consist of developed technology with the estimated useful life of 3 years on the date of acquisition. (2) The goodwill in this transaction is primarily attributable to the future cash flows to be realized from the acquired technology and the future development initiatives of the acquired workforce. The goodwill is deductible for tax purposes. The Company incurred cost related to this acquisition of $0.1 million that were expensed as incurred and have been recorded in general and administrative expenses in the accompanying consolidated statement of operations.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	12 Months Ended
	Dec. 31, 2018
Goodwill and Intangible Assets
Goodwill and Intangible Assets	6. Goodwill and Intangible Assets Goodwill Goodwill balance as of December 31, 2018 and 2017 was as follows (in thousands): Total Balance as of December 31, 2016 $ 3,565 Goodwill recorded in connection with 2017 acquisition 12,688 Measurement period adjustment 149 Effect of exchange rate 1,449 Balance as of December 31, 2017 $ 17,851 Goodwill recorded in connection with 2018 acquisitions 20,356 Measurement period adjustment Effect of exchange rate (613) Balance as of December 31, 2018 $ 38,165 Intangible assets Intangible assets consisted of the following (in thousands): As of December 31, 2018 Accumulated Gross Amortization Net Amortizable intangible assets: Developed technology $ 28,209 $ (10,497) $ 17,712 Customer relationships 8,153 (2,411) 5,742 Supplier relationships 2,696 (973) 1,723 Trade name 60 (60) — Patent 2,264 (178) 2,086 Total amortizable intangible assets 41,382 (14,119) 27,263 Non-amortizable intangible assets: Domain names 32 — 32 Trademarks 263 — 263 Total $ 41,677 $ (14,119) $ 27,558 As of December 31, 2017 Accumulated Gross Amortization Net Amortizable intangible assets: Developed technology $ 14,941 $ (5,476) $ 9,465 Customer relationships 7,159 (1,006) 6,153 Supplier relationships 2,881 (500) 2,381 Trade name 60 (60) — Patent 1,878 (108) 1,770 Total amortizable intangible assets 26,919 (7,150) 19,769 Non-amortizable intangible assets: Domain names 32 — 32 Trademarks 263 — 263 Total $ 27,214 $ (7,150) $ 20,064 Amortization expense was $7.2 million, $5.7 million and $0.9 million for the years ended December 31, 2018, 2017 and 2016, respectively. Total estimated future amortization expense was as follows (in thousands): As of December 31, 2018 2019 $ 9,724 2020 6,337 2021 4,922 2022 3,198 2023 892 Thereafter 2,190 Total $ 27,263

Accrued Expenses and Other Liab

Accrued Expenses and Other Liabilities	12 Months Ended
	Dec. 31, 2018
Accrued Expenses and Other Liabilities
Accrued Expenses and Other Liabilities	7. Accrued Expenses and Other Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): As of December 31, 2018 2017 Accrued payroll and related $ 9,886 $ 4,898 Accrued bonus and commission 8,564 4,777 Accrued cost of revenue 29,901 10,876 Sales and other taxes payable 23,631 20,877 ESPP contributions 2,672 1,338 Deferred rent 1,418 1,048 Nonrefundable deposits 3,415 162 VAT liability 2,217 2,515 Accrued other expense 18,054 7,123 Total accrued expenses and other current liabilities $ 99,758 $ 53,614 Other long-term liabilities consisted of the following (in thousands): As of December 31, 2018 2017 Deferred rent $ 7,569 $ 8,480 Deferred tax liability 5,181 2,452 Acquisition holdback 2,290 — Capital lease obligation 2,170 — Accrued other expense 959 477 Total other long-term liabilities $ 18,169 $ 11,409

Convertible Senior Notes and Ca

Convertible Senior Notes and Capped Call Transactions	12 Months Ended
	Dec. 31, 2018
Convertible Senior Notes and Capped Call Transactions
Convertible Senior Notes and Capped Call Transactions	8. Convertible Senior Notes and Capped Call Transactions In May 2018, the Company issued $550.0 million aggregate principal amount of 0.25% convertible senior notes due 2023 in a private placement, including $75.0 million aggregate principal amount of such Notes pursuant to the exercise in full of the over-allotment options of the initial purchasers (collectively, the “Notes”). The interest on the Notes is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2018. The Notes may bear special interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the indenture relating to the issuance of Notes (the “indenture”) or if the Notes are not freely tradeable as required by the indenture. The Notes will mature on June 1, 2023, unless earlier repurchased or redeemed by the Company or converted pursuant to their terms. The total net proceeds from the debt offering, after deducting initial purchaser discounts and debt issuance costs, paid or payable by us, were approximately $537.0 million. Each $1,000 principal amount of the Notes is initially convertible into 14.1040 shares of the Company’s Class A common stock par value $0.001, which is equivalent to an initial conversion price of approximately $70.90 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a make-whole fundamental change, as defined in the indenture, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Notes in connection with such make-whole fundamental change or during the relevant redemption period. Prior to the close of business on the business day immediately preceding March 1, 2023, the Notes may be convertible at the option of the holders only under the following circumstances: (1) during any calendar quarter commencing after September 30, 2018, and only during such calendar quarter, if the last reported sale price of the Class A common stock for at least 20 trading days (whether or not consecutive) in a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is more than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business days period after any five consecutive trading day period in which, for each trading day of that period, the trading price per $1,000 principal amount of Notes for such trading day was less than 98% of the product of the last reported sale price of the Class A common stock and the conversion rate on each such trading day; (3) upon the Company’s notice that it is redeeming any or all of the Notes; or (4) upon the occurrence of specified corporate events. On or after March 1, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Notes may, at their option, convert all or a portion of their Notes regardless of the foregoing conditions. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of Class A common stock, or a combination of cash and shares of Class A Common Stock, at the Company’s election. It is the Company’s current intent to settle the principal amount of the Notes with cash. During the year ended December 31, 2018, the conditions allowing holders of the Notes to convert were not met. The Company may redeem the Notes, in whole or in part, at its option, on or after June 1, 2021 but before the 35th scheduled trading day before the maturity date, at a cash redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, if the last reported sale price of the Class A Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including, the trading day immediately before the date the redemption notices were sent; and the trading day immediately before such notices were sent. No sinking fund is provided for the Notes. Upon the occurrence of a fundamental change (as defined in the indenture) prior to the maturity date, holders may require the Company to repurchase all or a portion of the Notes for cash at a price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Notes are senior unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment with the Company’s existing and future liabilities that are not so subordinated; effectively subordinated to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of current or future subsidiaries of the Company. The foregoing description is qualified in its entirety by reference to the text of the indenture and the form of 0.25% convertible senior notes due 2023, which were filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 and are incorporated herein by reference. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $119.4 million and was determined by deducting the fair value of the liability component from the par value of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount, or the debt discount, is amortized to interest expense at an annual effective interest rate of 5.7% over the contractual terms of the Notes. In accounting for the transaction costs related to the Notes, the Company allocated the total amount incurred to the liability and equity components of the Notes based on the proportion of the proceeds allocated to the debt and equity components. Issuance costs attributable to the liability component were approximately $10.2 million, were recorded as an additional debt discount and are amortized to interest expense using the effective interest method over the contractual terms of the Notes. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. The net carrying amount of the liability component of the Notes was as follows (in thousands): As of December 31, 2018 Principal $ 550,000 Unamortized discount (106,484) Unamortized issuance costs (9,020) Net carrying amount $ 434,496 The net carrying amount of the equity component of the Notes was as follows (in thousands): As of December 31, 2018 Proceeds allocated to the conversion options (debt discount) $ 119,435 Issuance costs (2,819) Net carrying amount $ 116,616 The following table sets forth the interest expense recognized related to the Notes (in thousands): Year Ended December 31, 2018 Contractual interest expense $ 852 Amortization of debt issuance costs 1,102 Amortization of debt discount 12,951 Total interest expense related to the Notes $ 14,905 In connection with the offering of the Notes, the Company entered into privately-negotiated capped call transactions with certain counterparties (the “capped calls”). The capped calls each have an initial strike price of approximately $70.90 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The capped calls have initial cap prices of $105.04 per share, subject to certain adjustments. The capped calls cover, subject to anti-dilution adjustments, approximately 7,757,200 shares of Class A Common Stock. The capped calls are generally intended to reduce or offset the potential dilution to the Class A Common Stock upon any conversion of the Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. The capped calls expire on the earlier of (i) the last day on which any convertible securities remain outstanding and (ii) June 1, 2023, subject to earlier exercise. The capped calls are subject to either adjustment or termination upon the occurrence of specified extraordinary events affecting the Company, including a merger event, a tender offer, and a nationalization, insolvency or delisting involving the Company. In addition, the capped calls are subject to certain specified additional disruption events that may give rise to a termination of the capped calls, including changes in law, insolvency filings, and hedging disruptions. The capped call transactions are recorded in stockholders’ equity and are not accounted for as derivatives. The net cost of $58.5 million incurred to purchase the capped call transactions was recorded as a reduction to additional paid-in capital in the accompanying consolidated balance sheet.

Supplemental Balance Sheet Info

Supplemental Balance Sheet Information	12 Months Ended
	Dec. 31, 2018
Supplemental Balance Sheet Information
Supplemental Balance Sheet Information	9. Supplemental Balance Sheet Information A roll-forward of the Company’s reserves for the years ended December 31, 2018, 2017 and 2016 is as follows (in thousands): (a) Allowance for doubtful accounts: Year Ended December 31, 2018 2017 2016 Balance, beginning of period $ 1,033 $ 1,076 $ 486 Additions 4,085 580 1,145 Write-offs (173) (623) (555) Balance, end of period $ 4,945 $ 1,033 $ 1,076 (b) Sales credit reserve: Year Ended December 31, 2018 2017 2016 Balance, beginning of period $ 1,761 $ 544 $ 714 Additions 5,560 2,531 1,348 Deductions against reserve (4,306) (1,314) (1,518) Balance, end of period $ 3,015 $ 1,761 $ 544

Revenue by Geographic Area

Revenue by Geographic Area	12 Months Ended
	Dec. 31, 2018
Revenue by Geographic Area
Revenue by Geographic Area	10. Revenue by Geographic Area Revenue by geographic area is based on the IP address at the time of registration. The following table sets forth revenue by geographic area (in thousands): Year Ended December 31, 2018 2017 2016 Revenue by geographic area: United States $ 484,809 $ 308,612 $ 233,922 International 165,258 90,408 43,413 Total $ 650,067 $ 399,020 $ 277,335 Percentage of revenue by geographic area: United States 75 % 77 % 84 % International 25 % 23 % 16 % Long-lived assets outside the United States were not significant.

Commitments and Contingencies

Commitments and Contingencies	12 Months Ended
	Dec. 31, 2018
Commitments and Contingencies
Commitments and Contingencies	11. Commitments and Contingencies (a) Lease Commitments The Company entered into various non‑cancelable operating lease agreements for its facilities that expire over the next ten years. Certain operating leases contain provisions under which monthly rent escalates over time. When lease agreements contain escalating rent clauses or free rent periods, the Company recognizes rent expense on a straight‑line basis over the term of the lease. In September 2018, the Company entered into a sub-lease agreement (“Sub-lease”) for a total of 259,416 rentable square feet of office space at 101 Spear Street in San Francisco, California. The Sub-lease covers several floors for which the terms commence on December 1, 2018 and April 1, 2020, and will be expiring at various dates between March 2025 and June 2028. The Company secured its lease obligation with a $14.7 million letter of credit, which it designated as restricted cash on its balance sheet as of December 31, 2018. The Company intends for this location to become its headquarters at some time in 2019. The total lease payments range from $0.8 million per month to $2.2 million per month. The Sub-lease contains a bargain purchase option for the Company to acquire the existing furniture in the leased space for $1 at the end of the lease term. This option was treated as a capital lease under ASC 840-- “Leases” and as of December 31, 2018, $2.5 million was recorded as assets under capital lease within the property, plant and equipment balance in the accompanying consolidated balance sheet. The corresponding capital lease obligation was recorded as current and long-term liabilities. In January 2016, the Company entered into a lease agreement ("Lease"), as subsequently amended, for approximately 90,000 square feet of new office space at 375 Beale Street in San Francisco, California, that houses its principal executive office. The term of the Lease is approximately 96 months following the commencement in October 2016, and the lease payments range from $0.4 million per month in the first 60 months to $0.5 million per month thereafter. The Lease included a tenant improvement allowance to cover construction of certain leasehold improvements for up to $8.3 million. All applicable amounts were collected from the landlord as of December 31, 2017. Based on the terms of the landlord incentive and involvement of the Company in the construction process, the leasehold improvements were determined to be property of the Company. The Company initially secured its lease obligation with a $7.4 million letter of credit, which was designated as restricted cash on its balance sheet as of December 31, 2016. This amount is periodically reduced as stipulated in the lease agreement. Rent expense was $10.3 million, $8.1 million and $7.3 million for the years ended December 31, 2018, 2017 and 2016, respectively. Future minimum lease payments under non-cancelable operating leases were as follows (in thousands): As of December 31, Year Ending December 31: 2018 2019 $ 24,128 2020 29,527 2021 30,898 2022 30,492 2023 30,122 Thereafter 81,316 Total minimum lease payments $ 226,483 Future minimum lease payments under the capital lease were as follows (in thousands): As of December 31, Year Ending December 31: 2018 2019 $ 306 2020 512 2021 573 2022 590 2023 608 Thereafter 1,939 Total minimum lease payments $ 4,528 Additionally, the Company has noncancellable contractual commitments with its cloud infrastructure provider, network service providers and other vendors that are non‑cancellable and expire within one to four years. Future minimum payments under these noncancellable purchase commitments were as follows (in thousands). Unrecognized tax benefits are not included in these amounts because any amounts expected to be settled in cash are not material: As of December 31, Year Ending December 31: 2018 2019 $ 37,623 2020 2,337 2021 1,023 2022 2,000 2023 5,000 Total payments $ 47,983 (b) Legal Matters On April 30, 2015 and March 28, 2016, Telesign Corporation (“Telesign”) filed lawsuits (which were subsequently consolidated) against the Company in the United States District Court, Central District of California (“Telesign I/II”). Telesign alleges in Telesign I/II that the Company is infringing four U.S. patents that it holds: U.S. Patent No. 7,945,034 (“034”), U.S. Patent No. 8,462,920 (“920”), U.S. Patent No. 8,687,038 (“038”) and U.S. Patent No. 9,300,792 (“792”). The consolidated Telesign I/II actions have been transferred to the United States District Court, Northern District. The patent infringement allegations in the lawsuit relate to the Company’s two-factor authentication use case, Authy, and an API tool to find information about a phone number. Telesign seeks, among other things, to enjoin us from allegedly infringing the patents, along with damages for lost profits. On March 8, 2017, in response to a petition by the Company, the U.S. Patent and Trademark Officer (“PTO”) issued an order instituting an inter partes review for the ‘792 patent. On March 6, 2018, the PTO found all claims challenged by the Company in the inter partes review unpatentable. On October 19, 2018, the district court granted the Company’s motion that all asserted claims of the asserted patents are invalid under 35 U.S.C. § 101 and entered judgment in the Company’s favor. On November 8, 2018, Telesign appealed the judgment to the United States Court of Appeals for the Federal Circuit where the case is now pending. Based on, among other things, final judgment being entered by the district court in the Company’s favor, the Company does not believe a loss is reasonably possible or estimable. On December 1, 2016, the Compamy filed a patent infringement lawsuit against Telesign in the United States District Court, Northern District of California (“Telesign III”), alleging indirect infringement of United States Patent No. 8,306,021 (“021”), United States Patent No. 8,837,465 (“465”), United States Patent No. 8,755,376 (“376”), United States Patent No. 8,736,051 (“051”), United States Patent No. 8,737,962 (“962”), United States Patent No. 9,270,833 (“833”), and United States Patent No. 9,226,217 (“217”). Telesign filed a motion to dismiss the complaint on January 25, 2017. In two orders, issued on March 31, 2017 and April 17, 2017, the court granted Telesign’s motion to dismiss with respect to the ‘962, ‘833, ‘051 and ‘217 patents, but denied Telesign’s motion to dismiss as to the ‘021, ‘465 and ‘376 patents. On August 23, 2017, Telesign petitioned the PTO for inter partes review of the ‘021, ‘465, and ‘376 patents. On March 9, 2018, the PTO denied Telesign’s petition for inter partes review of the ‘021 patent and granted Telesign’s petitions for inter partes review of the ‘465 and ‘376 patents. Telesign III is currently stayed pending resolution of the inter partes reviews of the ‘465 and ‘376 patents. The Company is seeking a judgment of infringement, a judgment of willful infringement, monetary and injunctive relief, enhanced damages, and an award of costs and expenses against Telesign. On February 18, 2016, a putative class action complaint was filed in the Alameda County Superior Court in California, entitled Angela Flowers v. Twilio Inc. The complaint alleges that the Company’s products permit the interception, recording and disclosure of communications at a customer’s request and are in violation of the California Invasion of Privacy Act. The complaint seeks injunctive relief as well as monetary damages. On January 2, 2018, the court issued an order granting in part and denying in part the plaintiff’s class certification motion. The court certified two classes of individuals who, during specified time periods, allegedly sent or received certain communications involving the accounts of three of the Company’s customers that were recorded. Following mediation, on January 7, 2019, the parties signed a long-form settlement agreement, providing for a payment of $10 million into a common fund and injunctive relief involving certain updates to Twilio’s Acceptable Use Policy and customer documentation. On January 15, 2019, the court entered an order granting preliminary approval of the settlement, and the parties signed an amended settlement agreement to conform to the court’s order. A final approval hearing is scheduled for June 11, 2019. Given insurance coverage, the Company currently estimates its potential liability in the Flowers matter to be $1.7 million and reserved this amount in its consolidated balance sheet as of December 31, 2018 , presented elsewhere in this Annual Report on Form 10-K. On September 1, 2015, Twilio was named as a defendant in a First Amended Complaint in a putative class action captioned Jeremy Bauman v. David Saxe, et al. pending in the United States District Court, District of Nevada relating to the alleged sending of unsolicited text messages to the plaintiffs and putative class members. The Company filed a motion to dismiss, which was granted, and on September 20, 2016 the plaintiff filed a Second Amended Complaint with additional allegations that the Company violated the Telephone Consumer Protection Act (“TCPA”), and the Nevada Deceptive Trade Practices Act (“NDTPA”), NRS 41.600(2)(e). On January 10, 2019, the court granted Plaintiffs’ motion for class certification under the TCPA and denied plaintiff’s request to certify a class under the NDTPA. On February 13, 2019, the court issued an order denying the Company’s motion to dismiss as to Plaintiffs’ TCPA claim and granting dismissal as to Plaintiffs’ NDTPA claim. The Company intends to vigorously defend itself against and believes it has meritorious defenses to this lawsuit. It is too early in these matters to reasonably predict the probability of the outcomes or to estimate the range of possible loss, if any. SendGrid Stockholder Litigation On December 5, 2018, purported stockholders of SendGrid filed putative class action complaints in the United States District Court for the District of Delaware, Rosenblatt v. SendGrid, Inc., et al., Case No. 1:18-cv-01931-UNA (the “Rosenblatt Complaint”), and in the United States District Court for the District of Colorado, Chen v. SendGrid, Inc., et al., Case No. 1:18-cv-03131-MEH (the “Chen Complaint”), against SendGrid, the individual members of the SendGrid board of directors (the “Individual Defendants”), Twilio and Topaz Merger Subsidiary, Inc. Thereafter, on December 19, 2018 and January 3, 2019, purported stockholders of SendGrid filed putative class action complaints against SendGrid and the Individual Defendants in the United States District Court for the District of Colorado, respectively, Bushansky v. SendGrid, Inc., et al., 1:18-cv-03260-SKC (the “Bushansky Complaint”), and Conner v. SendGrid, Inc., et al., 1:19-cv-00016-PAB-SKC (the “Conner Complaint”). As of February 11, 2019, all four complaints have been voluntarily dismissed. Among other things, the Rosenblatt Complaint alleges that SendGrid and the Individual Defendants misrepresented and/or omitted material information in a registration statement on Form S-4, rendering it false and misleading and in violation of the Exchange Act and related regulations. In addition, the Rosenblatt Complaint alleges that the Individual Defendants and Twilio acted as controlling persons within the meaning and in violation of Section 20(a) of the Exchange Act to influence and control the dissemination of the allegedly defective registration statement on Form S-4. The Rosenblatt Complaint seeks, among other things, rescission of the merger or rescissory damages, an order directing the SendGrid board of directors to file a registration statement on Form S-4 that does not contain any untrue statements of material fact and states all material facts, a declaration that the defendants violated Sections 14(a) and/or 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder and an award of plaintiff costs, including reasonable attorneys’ and experts’ fees. On February 11, 2019, the Rosenblatt Complaint was voluntarily dismissed. Among other things, the Chen Complaint alleges that the defendants misrepresented and/or omitted material information in a registration statement on Form S-4, rendering it false and misleading and in violation of the Exchange Act and related regulations. In addition, the Chen Complaint alleges that the Individual Defendants acted as controlling persons within the meaning and in violation of Section 20(a) of the Exchange Act to influence and control the dissemination of the allegedly defective Form S-4. The Chen Complaint also alleges that the Individual Defendants breached their fiduciary duties to SendGrid stockholders, and that the other defendants aided and abetted such breaches, by seeking to sell SendGrid through an allegedly unfair process and for an unfair price and on unfair terms, and by failing to disclose all material information. The Chen Complaint seeks, among other things, rescission of the merger or rescissory damages, an order directing the SendGrid board of directors to commence a new sale process, a declaration that the merger agreement was agreed to in breach of the Individual Defendants’ fiduciary duties and is therefore unlawful and unenforceable, an order directing the defendants to account to the putative class for damages allegedly sustained, and an award of plaintiff costs, including reasonable attorneys’ and experts’ fees. On February 4, 2019, the Chen Complaint was voluntarily dismissed. Among other things, the Bushansky and Conner Complaints allege that SendGrid and the Individual Defendants misrepresented and/or omitted material information in a Schedule 14A Definitive Proxy Statement, rendering it false and misleading and in violation of the Exchange Act and related regulations. In addition, the Bushansky and Conner Complaints allege that the Individual Defendants acted as controlling persons within the meaning and in violation of Section 20(a) of the Exchange Act to influence and control the dissemination of the allegedly defective Schedule 14A Definitive Proxy Statement. The Bushansky and Conner Complaints seek, among other things, rescission of the merger or rescissory damages, and an award of plaintiff costs, including reasonable attorneys’ and experts’ fees. On February 4, 2019, the Bushansky Complaint was voluntarily dismissed. On February 11, 2019, the Conner Complaint was voluntarily dismissed. In addition to the litigation matters discussed above, from time to time, the Company is a party to legal action and subject to claims that arise in the ordinary course of business. The claims are investigated as they arise and loss estimates are accrued, when probable and reasonably estimable. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that these legal proceedings will not have a material adverse effect on its financial position or results of operations. Legal fees and other costs related to litigation and other legal proceedings are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of operations. (c) Indemnification Agreements The Company has signed indemnification agreements with all of its board members and executive officers. The agreements indemnify the board members and executive officers from claims and expenses on actions brought against the individuals separately or jointly with the Company for certain indemnifiable events. Indemnifiable Events generally mean any event or occurrence related to the fact that the board member or the executive officer was or is acting in his or her capacity as a board member or an executive officer for the Company or was or is acting or representing the interests of the Company. In the ordinary course of business, the Company enters into contractual arrangements under which it agrees to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, intellectual property infringement claims made by third parties and other liabilities relating to or arising from the Company’s various products, or its acts or omissions. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract. Further, the Company’s obligations under these agreements may be limited in terms of time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments. The terms of such obligations may vary. As of December 31, 2018 and 2017, no amounts were accrued. (d) Other Taxes The Company conducts operations in many tax jurisdictions throughout the United States. In many of these jurisdictions, non-income-based taxes, such as sales and use and telecommunications taxes are assessed on the Company’s operations. Prior to March 2017, the Company had not billed nor collected these taxes from its customers and, in accordance with U.S. GAAP, recorded a provision for its tax exposure in these jurisdictions when it was both probable that a liability had been incurred and the amount of the exposure could be reasonably estimated. These estimates included several key assumptions including, but not limited to, the taxability of the Company’s services, the jurisdictions in which its management believes it has nexus, and the sourcing of revenues to those jurisdictions. Starting in March 2017, the Company began collecting these taxes from customers in certain jurisdictions, and since then, has expanded the number of jurisdictions where these taxes are being collected. Effective January 2018, the Company began to collect taxes in one additional jurisdiction and accordingly, from January 2018, the Company is not recording an additional provision for its exposure for new activities in that jurisdiction. The Company expects to continue to expand the number of jurisdictions where these taxes will be collected in the future. Simultaneously, the Company was and continues to be in discussions with certain states regarding its prior state sales and other taxes, if any, that the Company may owe. During 2017, the Company revised its estimates of its tax exposure based on settlements reached with various states indicating that certain revisions to the key assumptions including, but not limited to, the sourcing of revenue and the taxability of the Company’s services were appropriate in the current period. In the year ended December 31, 2017, the total impact of these changes on the net loss attributable to common stockholders was a reduction of $13.4 million. As of December 31, 2018 and 2017, the liability recorded for these taxes was $22.6 million and $20.9 million, respectively. In the event other jurisdictions challenge management’s assumptions and analysis, the actual exposure could differ materially from the current estimates.

Stockholders' Equity

Stockholders' Equity	12 Months Ended
	Dec. 31, 2018
Stockholders' Equity
Stockholders' Equity	12. Stockholders’ Equity (a) As of December 31, 2018 and 2017, the Company had authorized 100,000,000 shares of preferred stock, par value $0.001, of which no shares were issued and outstanding. (b) In June 2016, the Company completed an initial public offering (“IPO”) in which the Company sold 11,500,000 shares of its newly authorized Class A common stock, which included 1,500,000 shares sold pursuant to the exercise by the underwriters of an option to purchase additional shares, at the public offering price of $15.00 per share. The Company received net proceeds of $155.5 million, after deducting underwriting discounts and offering expenses paid by the Company, from the sale of its shares in the IPO. Immediately prior to the completion of the IPO, all shares of common stock then outstanding were reclassified as shares of Class B common stock and all shares of convertible preferred stock then outstanding were converted into 54,508,441 shares of common stock on a one-to-one basis, and then reclassified as shares of Class B common stock. In October 2016, the Company completed a follow-on public offering (“FPO”) in which the Company sold 1,691,222 shares of its Class A common stock, which included 1,050,000 shares sold pursuant to the exercise by the underwriters of an option to purchase additional shares, at a public offering price of $40.00 per share. In addition, another 6,358,778 shares of the Company’s Class A common stock were sold by the selling stockholders of the Company, which included 906,364 shares sold pursuant to the exercise of employee stock options by certain selling stockholders. The Company received aggregate proceeds of $64.4 million, after deducting underwriting discounts and offering expenses paid and payable by the Company. The Company did not receive any of the net proceeds from the sales of shares by the selling stockholders. As of December 31, 2018 and 2017, the Company had authorized 1,000,000,000 shares of Class A common stock and 100,000,000 shares of Class B common stock, each par value $0.001 per share. As of December 31, 2018, 80,769,763 shares of Class A common stock and 19,310,465 shares of Class B common stock were issued and outstanding. As of December 31, 2017, 69,906,550 shares of Class A common stock and 24,063,246 shares of Class B common stock were issued and outstanding. Holders of Class A and Class B common stock are entitled to one vote per share and 10 votes per share, respectively, and the shares of Class A common stock and Class B common stock are identical, except for voting and conversion rights. The outstanding Class B common stock as of the year ended December 31, 2017 included 180,000 shares related to the Authy acquisition which was released from escrow during 2018. The Company had reserved shares of common stock for issuance as follows: As of December 31, As of December 31, 2018 2017 Stock options issued and outstanding 7,978,369 10,710,427 Nonvested restricted stock units issued and outstanding 8,262,902 5,665,459 Class A common stock reserved for Twilio.org 572,676 635,014 Stock-based awards available for grant under 2016 Plan 9,313,354 10,200,189 Stock-based awards available for grant under 2016 ESPP 3,092,779 2,478,343 Class A common stock reserved for the convertible senior notes 10,472,165 — Total 39,692,245 29,689,432 (c) In September 2015, the Company’s board of directors approved the establishment of Twilio.org and committed 1% of the Company’s outstanding capital stock to fund Twilio.org’s activities. Through Twilio.org, which is a part of the Company and not a separate legal entity, the Company donates and discounts its products to nonprofits, who use the Company’s products to engage their audience, expand their reach and focus on making a meaningful change in the world. In the years ended December 31, 2018 and 2017, Twilio.org donated $7.1 million and $1.2 million to the qualified recipients consistent with its philanthropic mission. As of December 31, 2018, the Company had 572,676 shares reserved for Twilio.org activities.

Stock-Based Compensation

Stock-Based Compensation	12 Months Ended
	Dec. 31, 2018
Stock-Based Compensation
Stock-Based Compensation	13. Stock‑Based Compensation 2008 Stock Option Plan The Company maintained a stock plan, the 2008 Stock Option Plan, as amended and restated (the “2008 Plan”), which allowed the Company to grant incentive (“ISO”), non-statutory (“NSO”) stock options and restricted stock units (“RSU”) to its employees, directors and consultants to participate in the Company’s future performance through stock-based awards at the discretion of the board of directors. Under the 2008 Plan, options to purchase the Company’s common stock could not be granted at a price less than fair value in the case of ISOs and NSOs. Fair value was determined by the board of directors, in good faith, with input from valuation consultants. On June 22, 2016, the plan was terminated in connection with the Company’s IPO. Accordingly, no shares are available for future issuance under the 2008 Plan. The 2008 Plan continues to govern outstanding equity awards granted thereunder. The Company’s right of first refusal for outstanding equity awards granted under the 2008 Plan terminated upon completion of the IPO. Options granted include provisions for early exercisability. 2016 Stock Option Plan The Company’s 2016 Stock Option and Incentive Plan (the “2016 Plan”) became effective on June 21, 2016. The 2016 Plan provides for the grant of ISOs, NSOs, restricted stock, RSUs, stock appreciation rights, unrestricted stock awards, performance share awards, dividend equivalent rights and cash-based awards to employees, directors and consultants of the Company. A total of 11,500,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2016 Plan. These available shares automatically increase each January 1, beginning on January 1, 2017, by 5% of the number of shares of the Company’s Class A and Class B common stock outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s compensation committee. On January 1, 2018 and 2017, the shares available for grant under the 2016 Plan were automatically increased by 4,698,490 shares and 4,362,427 shares, respectively. Under the 2016 Plan, the stock options are granted at a price per share not less than 100% of the fair market value per share of the underlying common stock on the date of grant. Under both plans, stock options generally expire 10 years from the date of grant and vest over periods determined by the board of directors. The vesting period for new-hire options and restricted stock units is generally a four-year term from the date of grant, at a rate of 25% after one year, then monthly or quarterly, respectively, on a straight-line basis thereafter. In July 2017, the Company began granting restricted stock units to existing employees that vest in equal quarterly installments over a four year service period. 2016 Employee Stock Purchase Plan The Company’s Employee Stock Purchase Plan (“2016 ESPP”) became effective on June 21, 2016. A total of 2,400,000 shares of the Company’s Class A common stock were initially reserved for issuance under the 2016 ESPP. These available shares will automatically increase each January 1, beginning on January 1, 2017, by the lesser of 1,800,000 shares of the common stock, 1% of the number of shares of the Company’s Class A and Class B common stock outstanding on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s compensation committee. On January 1, 2018 and 2017, the shares available for grant under the 2016 Plan were automatically increased by 939,698 and 872,485 shares, respectively. The 2016 ESPP allows eligible employees to purchase shares of the Company’s Class A common stock at a discount of up to 15% through payroll deductions of their eligible compensation, subject to any plan limitations. Except for the initial offering period, the 2016 ESPP provides for separate six-month offering periods beginning in May and November of each fiscal year, starting in May 2017. On each purchase date, eligible employees will purchase the Company’s stock at a price per share equal to 85% of the lesser of (i) the fair market value of the Company’s Class A common stock on the offering date or (ii) the fair market value of the Company’s Class A common stock on the purchase date. In the years ended December 31, 2018 and 2017, 325,262 shares and 794,142 shares of Class A common stock were purchased under the 2016 ESPP and 113,312 shares are expected to be purchased in the second quarter of 2019. As of December 31, 2018, total unrecognized compensation cost related to the 2016 ESPP was $2.2 million, which will be amortized over a weighted-average period of 0.4 years. Stock options activity under the 2008 Plan and 2016 Plan was as follows: Stock Options Weighted- Weighted- average average remaining Aggregate Number of exercise contractual intrinsic options price term value outstanding (per share) (in years) (in thousands) Outstanding options as of December 31, 2017 10,155,427 $ 10.31 7.12 $ 145,763 Granted 1,330,118 39.77 Exercised (3,628,032) 8.20 Forfeited and cancelled (434,144) 19.70 Outstanding options as of December 31, 2018 7,423,369 $ 16.07 6.80 $ 543,640 Options vested and exercisable as of December 31, 2018 4,529,504 $ 9.38 5.96 $ 362,017 Aggregate intrinsic value represents the difference between the Company’s estimated fair value of its common stock and the exercise price of outstanding “in-the-money” options. Prior to the IPO, the fair value of the Company's common stock was estimated by the Company's board of directors. After the IPO, the fair value of the Company's common stock is the Company's Class A common stock price as reported on the New York Stock Exchange. The aggregate intrinsic value of stock options exercised was $178.5 million, $132.0 million and $54.4 million during the years ended December 31, 2018, 2017 and 2016, respectively. The total estimated grant date fair value of options vested was $21.8 million, $15.8 million and $15.3 million during the years ended December 31, 2018, 2017 and 2016, respectively. The weighted‑average grant‑date fair value of options granted was $18.40, $13.33 and $5.52 during the years ended December 31, 2018, 2017 and 2016, respectively. On February 28, 2017, the Company granted a total of 555,000 shares of performance-based stock options in three distinct awards to an employee with grant date fair values of $13.48, $10.26 and $8.41 per share for a total grant value of $5.9 million. The first half of each award vests upon satisfaction of a performance condition and the remainder vests thereafter in equal monthly installments over a 24-month period. The achievement window expires after 4.3 years from the date of grant and the stock options expire seven years after the date of grant. The stock options are amortized over a derived service period, as adjusted, of 3.1 years, 3.9 years and 4.6 years, respectively. The stock options value and the derived service period were estimated using the Monte-Carlo simulation model. The following table summarizes the details of the performance options: Weighted‑ Weighted‑ average average remaining Number of exercise contractual Aggregate options price term intrinsic value outstanding (per share) (in years) (in thousands) Outstanding options as of December 31, 2017 555,000 $ 31.72 6.0 $ — Granted — — Exercised — — Forfeited and cancelled — — Outstanding options as of December 31, 2018 555,000 $ 31.72 6.0 $ — Options vested and exercisable as of December 31, 2018 185,000 $ 31.72 5.16 $ 10,652 As of December 31, 2018, total unrecognized compensation cost related to nonvested stock options was $35.4 million, which will be amortized on a ratable basis over a weighted‑average period of 2.02 years. Restricted Stock Units Weighted‑ average Aggregate Number of grant date intrinsic options fair value value outstanding (per share) (in thousands) Nonvested RSUs as of December 31, 2017 5,665,459 $ 29.29 $ 133,648 Granted 5,556,817 49.70 Vested (2,142,776) 29.50 Forfeited and cancelled (816,598) 31.96 Nonvested RSUs as of December 31, 2018 8,262,902 $ 42.70 $ 729,373 Prior to the completion of the Company’s IPO, the Company granted RSUs (“Pre-IPO RSUs”) under its 2008 Plan to its employees that vested upon the satisfaction of both a time-based service condition and a liquidity condition. The time-based service condition for the majority of these awards will be satisfied over a period of four years. The liquidity condition was satisfied upon occurrence of the Company’s IPO in June 2016. RSUs granted on or after the completion of the Company’s IPO (“Post-IPO RSUs”) are granted under the 2016 Plan and are subject to a time-based vesting condition only. The compensation expense related to these grants is based on the grant date fair value of the RSUs and is recognized on a straight-line basis over the applicable service period. The Post-IPO RSUs are generally earned over a service period of four years. As of December 31, 2018, total unrecognized compensation cost related to nonvested RSUs was $325.3 million, which will be amortized over a weighted-average period of 3.03 years. Valuation Assumptions The fair value of employee stock options was estimated on the date of grant using the following assumptions in the Black‑Scholes option pricing model: Year Ended December 31, 2018 2017 2016 Employee Stock Options Fair value of common stock $33.01-$76.63 $23.60 - $31.96 $10.09 - $15.00 Expected term (in years) 1-6.08 6.08 6.08 Expected volatility 38.6%-44.2% 44.3% - 47.6% 51.4% - 53.0% Risk-free interest rate 2.9%-3.0% 1.9% - 2.3% 1.3% - 1.5% Dividend rate 0% 0% 0% Employee Stock Purchase Plan Expected term (in years) 0.5 0.5 0.90 Expected volatility 39.8%-47.5% 33.2% - 33.9% 52% Risk-free interest rate 2.1%-2.5% 1.1% - 1.4% 0.6% Dividend rate 0% 0% 0% The following assumptions were used in the Monte Carlo simulation model to estimate the fair value and the derived service period of the performance options: Asset volatility 40 % Equity volatility 45 % Discount rate 14 % Stock price at grant date $ 31.72 Stock‑Based Compensation Expense The Company recorded the total stock‑based compensation expense as follows (in thousands): Year Ended December 31, 2018 2017 2016 Cost of revenue $ 1,126 $ 650 $ 291 Research and development 42,277 22,808 12,946 Sales and marketing 23,616 9,822 4,972 General and administrative 26,254 16,339 6,016 Total $ 93,273 $ 49,619 $ 24,225

Net Loss Per Share Attributable

Net Loss Per Share Attributable to Common Stockholders	12 Months Ended
	Dec. 31, 2018
Net Loss Per Share Attributable to Common Stockholders
Net Loss Per Share Attributable to Common Stockholders	14. Net Loss Per Share Attributable to Common Stockholders The following table sets forth the calculation of basic and diluted net loss per share attributable to common stockholders during the periods presented (in thousands, except per share data): Year Ended December 31, 2018 2017 2016 Net loss attributable to common stockholders $ (121,949) $ (63,708) $ (41,324) Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted 97,130,339 91,224,607 53,116,675 Net loss per share attributable to common stockholders, basic and diluted $ (1.26) $ (0.70) $ (0.78) The following outstanding shares of common stock equivalents were excluded from the calculation of the diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive: Year Ended December 31, 2018 2017 2016 Stock options issued and outstanding 7,978,369 10,710,427 14,649,276 Nonvested restricted stock units issued and outstanding 8,262,902 5,665,459 2,034,217 Class A common stock reserved for Twilio.org 572,676 635,014 680,397 Class A common stock committed under 2016 ESPP 113,312 235,372 597,038 Conversion spread* 233 — — Unvested shares subject to repurchase 1,250 5,214 49,580 Total 16,829,742 17,251,486 18,010,508 * Since the Company expects to settle the principal amount of its outstanding convertible senior notes in cash and any excess in shares of the Company’s Class A common stock, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share of Class A common stock when the average market price of the Company’s Class A common stock for a given period exceeds the conversion price of $70.90 per share for the Notes. The conversion spread is calculated using the average market price of Class A common stock during the period, consistent with the treasury stock method.

Income Taxes

Income Taxes	12 Months Ended
	Dec. 31, 2018
Income Taxes
Income Taxes	15. Income Taxes The following table presents domestic and foreign components of loss before income taxes for the periods presented (in thousands): Year Ended December 31, 2018 2017 2016 United States $ (96,448) $ (46,737) $ (14,002) International (24,710) (16,266) (26,996) Loss before provision for income taxes $ (121,158) $ (63,003) $ (40,998) Provision for income taxes consists of the following (in thousands): Year Ended December 31, 2018 2017 2016 Current: Federal $ — $ 99 $ — State 139 78 83 Foreign 881 823 214 Total 1,020 1,000 297 Deferred: Federal 29 28 2 State 19 10 — Foreign (277) (333) 27 Total (229) (295) 29 Provision for income taxes $ 791 $ 705 $ 326 The following table presents a reconciliation of the statutory federal tax rate and the Company’s effective tax rate for the years ended December 31, 2018, 2017 and 2016: Year Ended December 31, 2018 2017 2016 Tax benefit at federal statutory rate 21 % 34 % 34 % State tax, net of federal benefit 15 10 11 Stock-based compensation 31 47 23 Credits 8 8 2 Foreign rate differential (4) (8) (23) Reserve for uncertain tax positions — — (12) Change in valuation allowance (68) (46) (34) Change in federal statutory rate — (45) — Other (3) (1) (2) Effective tax rate 0 % (1) % (1) % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company’s deferred tax assets and liabilities (in thousands): As of December 31, 2018 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 116,190 $ 56,138 $ 31,090 Accrued and prepaid expenses 11,594 9,140 16,698 Stock-based compensation 11,147 7,131 5,368 Research and development credits 32,206 16,212 7,807 Charitable contributions 3,100 1,233 1,458 Capped call 13,175 — — Debt issuance cost 638 — — Other 194 472 — Gross deferred tax assets 188,244 90,326 62,421 Valuation allowance (147,354) (78,900) (49,601) Net deferred tax assets 40,890 11,426 12,820 Deferred tax liabilities: Capitalized software (10,686) (7,664) (7,086) Prepaid expenses (838) (1,015) (452) Acquired intangibles (2,997) (2,101) (152) Property and equipment (1,990) (2,380) (4,931) Convertible debt (27,164) — — Deferred commissions (2,396) (718) (201) Net deferred tax asset (liability) $ (5,181) $ (2,452) $ (2) As of December 31, 2018, the Company had approximately $452.7 million in federal net operating loss carryforwards and $26.7 million in federal tax credits. If not utilized, the federal net operating loss and tax credit carryforwards will expire at various dates beginning in 2029. As of December 31, 2018, the Company had approximately $347.1 million in state net operating loss carryforwards and $19.9 million in state tax credits. If not utilized, the state net operating loss carryforwards will expire at various dates beginning in 2026 The California state tax credits can be carried forward indefinitely. As of December 31, 2018, the Company had foreign net operating loss carryovers of $8.1 million. The foreign net operating loss carryovers can be carried forward indefinitely. A limitation may apply to the use of the net operating loss and credit carryforwards, under provisions of the Internal Revenue Code of 1986, as amended, and similar state tax provisions that are applicable if the Company experiences an “ownership change.” An ownership change may occur, for example, as a result of issuance of new equity. Should these limitations apply, the carryforwards would be subject to an annual limitation, resulting in a potential reduction in the gross deferred tax assets before considering the valuation allowance. The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered such factors as its history of operating losses, the nature of the Company’s deferred tax assets, and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. At present, the Company does not believe that it is more likely than not that the net deferred tax assets will be realized, accordingly, a full valuation allowance has been established. The valuation allowance increased by approximately $68.5 million and $29.3 million during the years ended December 31, 2018 and 2017, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2018 2017 2016 Unrecognized tax benefit, beginning of year $ 9,445 $ 12,275 $ 1,679 Gross increases for tax positions of prior years 1,233 493 1,996 Gross decrease for tax positions of prior years (4) (6,331) — Gross increases for tax positions of current years 4,961 3,008 8,600 Unrecognized tax benefit, end of year $ 15,635 $ 9,445 $ 12,275 As of December 31, 2018, the Company had approximately $15.6 million of unrecognized tax benefits. If the $15.6 million is recognized, $0.9 million would affect the effective tax rate. The remaining amount would be offset by the reversal of related deferred tax assets which are subject to a full valuation allowance. The Company recognizes interest and penalties, if any, related to uncertain tax positions in its income tax provision. As of December 31, 2018, the Company has accumulated $0.1 million in both interest and penalties related to uncertain tax positions. The Company does not anticipate any significant changes within 12 months of December 31, 2018, in its uncertain tax positions that would be material to the consolidated financial statements taken as a whole because nearly all of the unrecognized tax benefit has been offset by a deferred tax asset, which has been reduced by a valuation allowance. The Company files U.S. federal income tax returns as well as income tax returns in many U.S. states and foreign jurisdictions. As of December 31, 2018, the tax years 2008 through the current period remain open to examination by the major jurisdictions in which the Company is subject to tax. Fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years, which have been carried forward and may be audited in subsequent years when utilized. The Company is not currently subject to U.S. federal, state and local, or non-U.S. income tax examinations by any tax authorities. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (Tax Act). The Tax Act reduces the U.S. statutory corporate tax rate to 21%, effective January 1, 2018. Consequently, we recorded a decrease to the Company’s federal deferred tax assets of $28.0 million, which was fully offset by a reduction in the Company’s valuation allowance for the year ended December 31, 2017. The other provisions of the Tax Act, including the one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings, did not have a material impact on the Company’s financial statements as of December 31, 2018. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed companies to record provisional amounts .during a measurement period not to extend beyond one year of the enactment date. The Company’s accounting for the Tax Act is complete and we did not have any signification adjustments to provisional amounts recorded as of December 31, 2017. The Tax Act creates a new requirement that certain income (i.e., GILTI) earned by controlled foreign corporations (CFCs) must be included currently in the gross income of the CFCs’ U.S. shareholder. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into the measurement of its deferred taxes (the “deferred method”). The Company selected the period cost method.

Subsequent Events

Subsequent Events	12 Months Ended
	Dec. 31, 2018
Subsequent Events
Subsequent Events	16. Subsequent Events On February 1, 2019, the Company acquired all outstanding shares of capital stock of SendGrid, the leading email API platform, by issuing 23.4 million shares of its Class A common stock for a total value of $2.6 billion. Pursuant to the Agreement and Plan of Merger and Reorganization, as amended, each outstanding share of SendGrid common stock was converted into 0.485 of a share of the Company’s Class A common stock. Pursuant to the acquisition method of accounting, the purchase price that was paid for SendGrid will be allocated to the underlying SendGrid tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill. The acquisition method of accounting is dependent upon certain valuations and other studies that have not yet been completed. During the year ended December 31, 2018, the Company incurred $3.6 million in expenses related to this transaction.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2018
Summary of Significant Accounting Policies
Basis of Presentation	(a) The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Principles of Consolidation	(b) The consolidated financial statements include the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated.
Use of Estimates	(c) The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, recoverability of long‑lived and intangible assets; capitalization and useful life of the Company’s capitalized internal‑use software development costs; fair value of acquired intangible assets and goodwill; accruals and contingencies. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation.
Concentration of Credit Risk	(d) Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash, cash equivalents, marketable securities, restricted cash and accounts receivable. The Company maintains cash, cash equivalents, restricted cash and marketable securities with financial institutions that management believes are financially sound and have minimal credit risk exposure although the balances will exceed insured limits. The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customers deteriorate substantially, operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company does not require collateral from its credit customers and maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. During the years ended December 31, 2018 and 2017, there was no customer organization that accounted for more than 10% of the Company’s total revenue. During the year ended December 31, 2016, one customer organization represented approximately 14% of the Company’s total revenue. As of December 31, 2018 and 2017, there was no customer organization that represented more than 10% of the Company’s gross accounts receivable.
Revenue Recognition	(e) Adoption of Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” Effective January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606, “ Revenue from Contracts with Customers” , which replaced the existing revenue recognition guidance, ASC 605, and outlines a single set of comprehensive principles for recognizing revenue under U.S. GAAP. Among other things, ASC 606 requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenue, which is referred to as a performance obligation. Revenue is recognized when control of the promised products or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those products or services. The Company adopted ASC 606 using the modified retrospective method with a cumulative catch-up adjustment to the opening retained earnings as of January 1, 2018. Results for reporting periods beginning after December 31, 2017 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical accounting policies prior to adoption. In adopting the standard, the Company elected to apply the new guidance only to those contracts which were not completed as of the date of the adoption. The impact of adopting the new standard on the Company’s consolidated financial statements was insignificant. The Company recorded a net cumulative catch-up adjustment to the beginning retained earnings as of January 1, 2018, of $0.7 million. The primary impact relates to the deferral of incremental commission costs of obtaining new contracts. Under ASC 605, the Company deferred only direct and incremental commission costs to obtain a contract and amortized those costs on a straight-line basis over the term of the related subscription contract. Under the new standard, the Company defers all incremental commission costs to obtain the contract and amortizes these costs on a straight-line basis over the expected term of benefit of the underlying asset, which was determined to be five years. The impact on the Company’s revenue recognition policies was insignificant. Prior to the adoption of ASC 606, the Company recognized the majority of its revenue according to the usage by its customers in the period in which that usage occurred. ASC 606 continues to support the recognition of revenue over time, and on a usage basis, for the majority of the Company’s contracts due to continuous transfer of control to the customer. There was not a significant tax impact to the Company’s consolidated statements of operations and consolidated balance sheet relating to the adoption of the new standard as there is a full valuation allowance due to the Company’s history of continued losses. Revenue Recognition Policy Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for credits and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer; · Identification of the performance obligations in the contract; · Determination of the transaction price; · Allocation of the transaction price to the performance obligations in the contract; and · Recognition of revenue when, or as, the Company satisfies a performance obligation. Nature of Products and Services The Company’s revenue is primarily derived from usage-based fees earned from customers accessing the Company’s enterprise cloud computing services. Platform access is considered a monthly series comprising of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. In the years ended December 31, 2018, 2017 and 2016, the revenue from usage-based fees represented 84%, 83% and 83% of total revenue, respectively. Subscription-based fees are derived from certain term-based contracts, such as with the sales of short codes and customer support. Term-based contracts revenue is recognized on a ratable basis over the contractual term of the arrangement beginning on the date that the service is made available to the customer. In the years ended December 31, 2018 and 2017, the revenue from term-based fees represented 16% and 17% of total revenue, respectively. The Company applied the optional exemption of not disclosing the transaction price allocated to the remaining performance obligations for its usage-based contracts and contracts with original duration of one year or less. The majority of the Company’s contracts have a duration of one year or less. No significant judgments are required in determining whether products and services are considered distinct performance obligations and should be accounted for separately versus together, or to determine the stand-alone selling price (“SSP”). The Company’s arrangements do not contain general rights of return. However, credits may be issued on a case-by-case basis. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in accounts receivable and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met. The reserve for sales credits is included in accounts receivable and is calculated based on historical trends and any specific risks identified in processing transactions. Changes in the reserve are recorded against revenue. Deferred Revenue and Customer Deposits Deferred revenue is recorded when cash payments are received in advance of future usage on non-cancellable contracts. Customer refundable prepayments are recorded as customer deposits. As of December 31, 2018, the Company recorded $10.3 million and $9.3 million as its deferred revenue and customer deposits, respectively. In the year ended December 31, 2018, the Company recognized $10.5 million of revenue, that was included in the deferred revenue and customer deposits balance as of January 1, 2018. Deferred Sales Commissions The Company records an asset for the incremental costs of obtaining a contract with a customer, for example, sales commissions that are earned upon execution of contracts. The Company uses the portfolio of data method to determine the estimated period of benefit of capitalized commissions which is determined to be five years. Amortization expense related to these capitalized costs related to initial contracts, upsells and renewals, is recognized on a straight line basis over the estimated period of benefit of the capitalized commissions. Total net capitalized costs as of December 31, 2018 were $9.4 million and are included in prepaid expenses and other current and long-term assets in the accompanying consolidated balance sheet. Amortization of these assets was $1.4 million in the year ended December 31, 2018, and is included in sales and marketing expense in the accompanying consolidated statement of operations.
Cost of Revenue	(f) Cost of Revenue Cost of revenue consists primarily of costs of communications services purchased from network service providers. Cost of revenue also includes fees to support the Company’s cloud infrastructure, personnel costs, such as salaries and stock-based compensation for the customer care and support services employees, and non-personnel costs, such as amortization of capitalized internal-use software development costs and amortization of acquired intangibles.
Research and Development Expenses	(g) Research and Development Expenses Research and development expenses consist primarily of personnel costs, cloud infrastructure fees for staging and development, outsourced engineering services, amortization of capitalized internal-use software development costs and an allocation of general overhead expenses. The Company capitalizes the portion of its software development costs that meets the criteria for capitalization.
Internal-Use Software Development Costs	(h) Internal-Use Software Development Costs Certain costs of platform and other software applications developed for internal use are capitalized. The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed and (ii) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality and expenses costs incurred for maintenance and minor upgrades and enhancements. Costs related to preliminary project activities and post-implementation operating activities are also expensed as incurred. Capitalized costs of platform and other software applications are included in property and equipment. These costs are amortized over the estimated useful life of the software on a straight-line basis over three years. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. The amortization of costs related to the platform applications is included in cost of revenue, while the amortization of costs related to other software applications developed for internal use is included in operating expenses.
Advertising Costs	(i) Advertising Costs Advertising costs are expensed as incurred and were $10.6 million, $4.9 million and $3.5 million in the years ended December 31, 2018, 2017 and 2016, respectively. Advertising costs are included in sales and marketing expenses in the accompanying consolidated statements of operations.
Stock-Based Compensation	(j) Stock-Based Compensation All stock-based compensation to employees, including the purchase rights issued under the Company’s 2016 Employee Stock Purchase Plan (the “ESPP”), is measured on the grant date based on the fair value of the awards on the date of grant. This cost is recognized as an expense following straight-line attribution method over the requisite service period. The Company uses the Black-Scholes option pricing model to measure the fair value of its stock options and the purchase rights issued under the ESPP. The fair value of the restricted stock units is determined using the fair value of the Company’s Class A common stock on the date of grant and recognized as an expense following straight-line attribution method over the requisite service period. Prior to adoption of ASU 2016-09, the stock-based compensation was recorded net of estimated forfeitures. In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting” , which aligns the measurement and classification for share-based payments to non-employees with the accounting guidance for share-based payments to employees. Among other requirements, the measurement of non-employee awards will now be fixed at the grant date, rather than remeasured at every reporting date. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, with early application permitted. The Company early-adopted this guidance in the quarter ended December 31, 2018 which did not have a material impact to its financial statements. In May 2017, the FASB issued ASU 2017-09, “Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting” , ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. ASU 2017-09 allows companies to make certain changes to awards, such as vesting conditions, without accounting for them as modifications. It does not change the accounting for modifications. ASU 2017-09 should be applied prospectively to awards modified on or after the adoption date. The Company adopted ASU 2017-09 in the first quarter of 2018. The adoption of this guidance did not have an impact on the Company’s financial position, results of operations or cash flows. In March 2016, FASB issued ASU No. 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share -Based Payment Accounting.” This new guidance was intended to simplify several areas of accounting for stock-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. The Company early adopted this guidance in the quarter ended December 31, 2016. The new guidance allows entities to account for forfeitures as they occur. The Company elected to account for forfeitures as they occur and adopted this provision on a modified retrospective basis. The $0.1 million of cumulative prior years’ impact as well as the impact on the first three quarters of 2016 of $75,000 was recognized as an increase to stock-based compensation during the quarter ended December 31, 2016, as the impact on prior periods was insignificant. Adoption of all other changes in the new guidance did not have a significant impact on the Company’s consolidated financial statements. Compensation expense for stock options granted to nonemployees is calculated using the Black-Scholes option pricing model and is recognized in expense over the service period. The Black-Scholes option pricing model requires the use of complex assumptions, which determine the fair value of stock-based awards. These assumptions include: · Fair value of the common stock . Prior to the Company’s IPO, the board of directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting at which awards are approved. The factors included, but were not limited to: (i) contemporaneous valuations of the Company’s common stock by an unrelated third party; (ii) the prices at which the Company sold shares of its convertible preferred stock to outside investors in arms-length transactions; (iii) the rights, preferences and privileges of the Company’s convertible preferred stock relative to those of its common stock; (iv) the Company’s results of operations, financial position and capital resources; (v) current business conditions and projections; (vi) the lack of marketability of the Company’s common stock; (vii) the hiring of key personnel and the experience of management; (viii) the introduction of new products; (ix) the risk inherent in the development and expansion of the Company’s products; (x) the Company’s stage of development and material risks related to its business; (xi) the fact that the option grants involve illiquid securities in a private company; and (xii) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, in light of prevailing market conditions; After the IPO, the Company uses the market closing price of its Class A common stock, as reported on the New York Stock Exchange, for the fair value. · Expected term . The expected term represents the period that the stock-based awards are expected to be outstanding. The Company uses the simplified calculation of expected term, as the Company does not have sufficient historical data to use any other method to estimate expected term; · Expected volatility . The expected volatility is derived from an average of the historical volatilities of the common stock of several entities with characteristics similar to those of the Company, such as the size and operational and economic similarities to the Company’s principal business operations; · Risk -free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term of the stock-based awards; and · Expected dividend . The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. If any of the assumptions used in the Black-Scholes model changes, stock-based compensation for future options may differ materially compared to that associated with previous grants.
Income Taxes	(k) Income Taxes The Company accounts for income taxes in accordance with authoritative guidance which requires the use of the asset and liability approach. Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carry-forwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized. The Company recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to uncertain tax positions in the provision for income taxes in the consolidated statements of operations.
Foreign Currency Translation	(l) Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is generally the U.S. dollar. Accordingly, the subsidiaries remeasure monetary assets and liabilities at period-end exchange rates, while non-monetary items are remeasured at historical rates. Revenue and expense accounts are remeasured at the average exchange rate in effect during the year. Remeasurement adjustments are recognized in the consolidated statements of operations as other income or expense in the year of occurrence. Foreign currency transaction gains and losses were insignificant for all periods presented. For those entities where the functional currency is a foreign currency, adjustments resulting from translating the financial statements into U.S. dollars are recorded as a component of accumulated other comprehensive income (loss) in stockholders' equity. Monetary assets and liabilities denominated in a foreign currency are translated into US dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the weighted average exchange rates during the period. Equity transactions are translated using historical exchange rates. Foreign currency transaction gains and losses are included in other income (expense), net in the consolidated statements of operations.
Comprehensive Income (Loss)	(m) Comprehensive Income (Loss) Comprehensive income (loss) refers to net income (loss) and other revenue, expenses, gains and losses that, under generally accepted accounting principles, are recorded as an element of stockholders' equity but are excluded from the calculation of net income (loss). For the year ended December 31, 2016, the Company's operations did not give rise to any material items includable in comprehensive income (loss), which were not already in net income (loss). Accordingly, for that period, the Company's comprehensive income (loss) is the same as its net income (loss).
Net Loss Per Share Attributable to Common Stockholders	(n) Net Loss Per Share Attributable to Common Stockholders The Company calculates its basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. All series of convertible preferred stock are considered to be participating securities as the holders of the preferred stock are entitled to receive a non-cumulative dividend on a pro rata pari passu basis in the event that a dividend is declared or paid on common stock. Shares of common stock issued upon early exercise of stock options that are subject to repurchase are also considered to be participating securities, because holders of such shares have non-forfeitable dividend rights in the event a dividend is declared or paid on common stock. Under the two-class method, in periods when the Company has net income, net income attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income less current period convertible preferred stock non-cumulative dividends, between common stock and the convertible preferred stock. In computing diluted net income attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. The dilutive effect of these potential common shares is reflected in diluted earnings per share by application of the treasury stock method. For purposes of this calculation, convertible preferred stock, options to purchase common stock, unvested restricted stock units, common stock issued subject to future vesting, any shares of stock committed under the ESPP, any shares of stock held in escrow and any shares of stock reserved for future donations are considered common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive. Since the Company’s IPO in 2016, Class A and Class B common stock are the only outstanding equity of the Company. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to 10 votes per share. Shares of Class B common stock may be converted into Class A common stock at any time at the option of the stockholder on a one-for-one basis, and are automatically converted into Class A common stock upon sale or transfer, subject to certain limited exceptions. Shares of Class A common stock are not convertible.
Cash and Cash Equivalents	(o) Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist of funds deposited into money market funds and reverse repurchase agreements. All credit and debit card transactions that process as of the last day of each month and settle within the first few days of the subsequent month are also classified as cash and cash equivalents as of the end of the month in which they were processed.
Restricted Cash	(p) Restricted Cash Restricted cash consists of cash deposited into a savings account with a financial institution as collateral for the Company’s obligations under its facility leases of premises located in San Francisco, California. The facility lease for the Company’s old office space expired in January 2017 and the facility leases for the Company’s current offices expire at various dates between October 2024 and June 2028. In November 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-18, “Statement of Cash Flows (Topic 230)—Restricted Cash” . This standard provides guidance on the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. Restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statements of cash flows. The amendments of this ASU should be applied using a retrospective transition method and are effective for reporting periods beginning after December 15, 2017. The Company adopted ASU 2016-18 in the first quarter of 2018 and applied the guidance retrospectively to the prior period’s consolidated statement of cash flows with the following impact (in thousands): Year Ended Year Ended December 31, 2017 December 31, 2016 As Originally As Originally Reported As Adjusted Reported As Adjusted Cash provided by (used in) operating activities $ (3,260) $ (3,255) $ 10,091 $ 10,097 Cash used in investing activities $ (223,630) $ (226,748) $ (42,425) (34,986) Cash, cash equivalents and restricted cash — beginning of period 305,665 314,280 108,835 110,005 Cash, cash equivalents and restricted cash — end of period $ 115,286 $ 120,788 $ 305,665 $ 314,280 Other than the revised statement of cash flows presentation of restricted cash, the adoption of ASU 2016-18 did not have an impact on the Company’s financial position and results of operations. The restricted cash balances as of December 31, 2018 and December 31, 2017 were $18.1 million and $5.5 million, respectively.
Accounts Receivable and Allowance for Doubtful Accounts	(q) Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded net of the allowance for doubtful accounts and the reserve for sales credits. The allowance for doubtful accounts is estimated based on the Company’s assessment of its ability to collect on customer accounts receivable. The Company regularly reviews the allowance by considering certain factors such as historical experience, credit quality, age of accounts receivable balances and other known conditions that may affect a customer’s ability to pay. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet their financial obligations, a specific allowance is recorded against amounts due from the customer which reduces the net recognized receivable to the amount the Company reasonably believe will be collected. The Company writes-off accounts receivable against the allowance when a determination is made that the balance is uncollectible and collection of the receivable is no longer being actively pursued. The allowance for doubtful accounts was $4.9 million and $1.0 million as of December 31, 2018 and 2017, respectively.
Costs Related to the Public Offerings	(r) Costs Related to the Public Offerings Costs related to the public offerings, which consist of direct incremental legal, printing and accounting fees, are deferred until the offering is completed. Upon completion of the offering, these costs are offset against the offering proceeds within the consolidated statements of stockholders’ equity. In the year ended December 31, 2016, the Company recorded in its consolidated statement of stockholders’ equity $5.7 million in total offering costs.
Property and Equipment	(s) Property and Equipment Property and equipment, both owned and under capital lease, is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful life of the related asset. Maintenance and repairs are charged to expenses as incurred. The useful lives of property and equipment are as follows: Capitalized software development costs 3 years Office equipment 3 years Furniture and fixtures 5 years Software 3 years Assets under capital lease 5 years or remaining lease term Leasehold improvements 5 years or remaining lease term
Intangible Assets	(t) Intangible Assets Intangible assets recorded by the Company are costs directly associated with securing legal registration of patents and trademarks, acquiring domain names and the fair value of identifiable intangible assets acquired in business combinations. Intangible assets with determinable economic lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful life of each asset on a straight-line basis. The Company determines the useful lives of identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company’s long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset and other economic factors, including competition and specific market conditions. Intangible assets without determinable economic lives are carried at cost, not amortized and reviewed for impairment at least annually. The useful lives of the intangible assets are as follows: Developed technology 3 - 4 years Customer relationships 2 - 8 years Supplier relationships 5 years Trade names 2 years Patents 20 years Trademarks Indefinite Domain names Indefinite
Goodwill	(u) Goodwill Goodwill represents excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has determined that it operates as one reporting unit and has selected November 30 as the date to perform its annual impairment test. In the valuation of goodwill, management must make assumptions regarding estimated future cash flows to be derived from the Company’s business. If these estimates or their related assumptions change in the future, the Company may be required to record impairment for these assets. Management may first evaluate qualitative factors to assess if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine if a two-step impairment test is necessary. Management may choose to proceed directly to the two-step evaluation, bypassing the initial qualitative assessment. The first step of the impairment test involves comparing the fair value of the reporting unit to its net book value, including goodwill. If the net book value exceeds its fair value, then the Company would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. The impairment loss would be calculated by comparing the implied fair value of the goodwill to its net book value. In calculating the implied fair value of goodwill, the fair value of the entity would be allocated to all of the other assets and liabilities based on their fair values. The excess of the fair value of the entity over the amount assigned to other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value. No goodwill impairment charges have been recorded for any period presented.
Impairment of Long-Lived Assets	(v) Impairment of Long-Lived Assets The Company evaluates long-lived assets, including property and equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. There was no impairment during the years ended December 31, 2018, 2017 and 2016. The Company wrote off $1.7 million, $0.6 million and $0.7 million of internally developed software in the years ended December 31, 2018, 2017 and 2016, respectively, due to abandonment.
Business Combinations	(w) Business Combinations The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed, these estimates are inherently uncertain and subject to refinement. The authoritative guidance allows a measurement period of up to one year from the date of acquisition to make adjustments to the preliminary allocation of the purchase price. As a result, during the measurement period the Company may record adjustments to the fair values of assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon conclusion of the measurement period or final determination of the values of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments will be recorded to the consolidated statement of operations.
Segment Information	(x) Segment Information The Company’s Chief Executive Officer is the chief operating decision maker, who reviews the Company’s financial information presented on a consolidated basis for purposes of allocating resources and evaluating the Company’s financial performance. Accordingly, the Company has determined that it operates in a single reporting segment.
Fair Value of Financial Instruments	(y) Fair Value of Financial Instruments The Company applies fair value accounting for all financial instruments on a recurring basis. The Company’s financial instruments, which include cash, cash equivalents, accounts receivable and accounts payable are recorded at their carrying amounts, which approximate their fair values due to their short-term nature. Restricted cash is long-term in nature and consists of cash in a savings account, hence its carrying amount approximates its fair value. Marketable securities consist of U.S. treasury securities, high credit quality corporate debt securities and reverse repurchase agreements. All marketable securities are considered to be available-for-sale and recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive income (loss). In valuing these items, the Company uses inputs and assumptions that market participants would use to determine their fair value, utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value of the convertible senior notes due 2023 (the “Notes”) is determined based on the closing price for the Notes on the last trading day of the reporting period and is considered as Level 2 in the fair value hierarchy. Impairments are considered to be other than temporary if they are related to deterioration in credit risk or if it is likely that the security will be sold before the recovery of its cost basis. Realized gains and losses and declines in value deemed to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: · Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. · Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. · Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Recent Accounting Pronouncements Not Yet Adopted	(z) Recent Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract” . This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement” . The amendments under ASU 2018-13 remove, add and modify certain disclosure requirements on fair value measurements in ASC 820. The amendments are effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact the new standard will have on its consolidated financial statements. In July 2018, the FASB issued ASU 2018-09, “Codification Improvements” , which does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB ASC areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt as part of the next fiscal year beginning after December 15, 2018. The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017‑04, “ Simplifying the Test for Goodwill Impairment ”, which removes the second step of the goodwill impairment test that requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is effective prospectively for interim and annual reporting periods beginning after December 15, 2019. The Company will adopt this guidance upon its effective date. The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, “Financial Instruments–Credit Losses: Measurement of Credit Losses on Financial Instruments” , which changes the impairment model for most financial assets. The new model uses a forward‑looking expected loss method, which will generally result in earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses”, which clarifies that receivables arising from operating leases are not within the scope of Topic 326, Financial Instruments – Credit Losses. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. These ASUs are effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted for annual and interim periods beginning after December 15, 2018. The Company is evaluating the impact of this guidance on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases” , which was further clarified by ASU 2018-10, “Codification Improvements to Topic 842, Leases” , and ASU 2018-11, “Leases - Targeted Improvements” , both issued in July 2018. ASU 2016-02 affects all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short-term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. ASU 2018-10 clarifies or corrects unintended application of guidance related to ASU 2016-02. The amendment affects narrow aspects of ASU 2016-02 related to the implicit rate in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. ASU 2018-11 adds a transition option for all entities and a practical expedient only for lessors. The transition option allows entities to not apply the new leases standard in the comparative periods they present in their financial statements in the year of adoption. Under the transition option, entities can opt to continue to apply the legacy guidance in ASC 840, “Leases” , including its disclosure requirements, in the comparative periods presented in the year they adopt the new leases standard. Entities that elect this transition option will still be required to adopt the new leases standard using the modified retrospective transition method required by the standard, but they will recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The practical expedient provides lessors with an option to not separate the non-lease components from the associated lease components when certain criteria are met and requires them to account for the combined component in accordance with the revenue recognition standard in ASC 606 if the associated non-lease components are the predominant components. The new standards are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. For leases existing at, or entered into after the beginning of the earliest comparative period presented in the financial statements, lessees and lessors must apply a modified retrospective transition approach. While the Company expects the adoption of these standards to result in a material increase to the reported assets and liabilities, the Company has not yet determined the full impact that the adoption of this standard will have on its consolidated financial statements.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	12 Months Ended
	Dec. 31, 2018
Summary of Significant Accounting Policies
Summary of useful lives of property and equipment	Capitalized software development costs 3 years Office equipment 3 years Furniture and fixtures 5 years Software 3 years Assets under capital lease 5 years or remaining lease term Leasehold improvements 5 years or remaining lease term
Useful lives of intangible assets	Developed technology 3 - 4 years Customer relationships 2 - 8 years Supplier relationships 5 years Trade names 2 years Patents 20 years Trademarks Indefinite Domain names Indefinite
ASU 2016-18 - Restricted Cash
Summary of Significant Accounting Policies
Schedule of impact from adoption of guidance	The Company adopted ASU 2016-18 in the first quarter of 2018 and applied the guidance retrospectively to the prior period’s consolidated statement of cash flows with the following impact (in thousands): Year Ended Year Ended December 31, 2017 December 31, 2016 As Originally As Originally Reported As Adjusted Reported As Adjusted Cash provided by (used in) operating activities $ (3,260) $ (3,255) $ 10,091 $ 10,097 Cash used in investing activities $ (223,630) $ (226,748) $ (42,425) (34,986) Cash, cash equivalents and restricted cash — beginning of period 305,665 314,280 108,835 110,005 Cash, cash equivalents and restricted cash — end of period $ 115,286 $ 120,788 $ 305,665 $ 314,280

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	12 Months Ended
	Dec. 31, 2018
Fair Value Measurements
Schedule of financial assets measured at fair value on a recurring basis	The following tables provide the assets measured at fair value on a recurring basis as of December 31, 2018 and 2017 (in thousands): Gross Gross Amortized Unrealized Unrealized Cost or Gross Losses Losses More Fair Value Hierarchy as of Carrying Unrealized Less Than Than December 31, 2018 Aggregate Value Gains 12 Months 12 Months Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash and cash equivalents: Money market funds $ 420,234 $ — $ — $ — $ 420,234 $ — $ — $ 420,234 Reverse repurchase agreements 35,000 — — — — 35,000 — 35,000 Commercial paper 9,983 — — — — 9,983 — 9,983 Total included in cash and cash equivalents 465,217 — — — 420,234 44,983 — 465,217 Marketable securities: U.S. Treasury securities 59,785 — (7) (9) 59,769 — — 59,769 Corporate debt securities and commercial paper 201,683 23 (123) (224) — 201,359 — 201,359 Total marketable securities 261,468 23 (130) (233) 59,769 201,359 — 261,128 Total financial assets $ 726,685 $ 23 $ (130) $ (233) $ 480,003 $ 246,342 $ — $ 726,345 Gross Gross Amortized Unrealized Unrealized Cost or Gross Losses Losses More Fair Value Hierarchy as of Carrying Unrealized Less Than Than December 31, 2017 Aggregate Value Gains 12 Months 12 Months Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash and cash equivalents: Money market funds $ 95,432 $ — $ — $ — $ 95,432 $ — $ — $ 95,432 Total included in cash and cash equivalents 95,432 — — — 95,432 — — 95,432 Marketable securities: U.S. Treasury securities 59,962 — (216) — 59,746 — — 59,746 Corporate debt securities and commercial paper 116,223 — (382) — — 115,841 — 115,841 Total marketable securities 176,185 — (598) — 59,746 115,841 — 175,587 Total financial assets $ 271,617 $ — $ (598) $ — $ 155,178 $ 115,841 $ — $ 271,019
Schedule of contractual maturities of marketable securities	As of December 31, 2018 As of December 31, 2017 Amortized Aggregate Fair Amortized Aggregate Fair Cost Value Cost Value Financial Assets: Less than one year $ 261,468 $ 261,128 $ 108,584 $ 108,360 One to two years — — 67,601 67,227 Total $ 261,468 $ 261,128 $ 176,185 $ 175,587

Property and Equipment (Tables)

Property and Equipment (Tables)	12 Months Ended
	Dec. 31, 2018
Property and Equipment
Schedule of property and equipment	Property and equipment consisted of the following (in thousands): As of December 31, 2018 2017 Capitalized internal-use software development costs $ 72,647 $ 49,177 Leasehold improvements 15,293 14,246 Office equipment 13,563 9,652 Furniture and fixtures 2,440 1,976 Assets under capital lease (1) 2,478 — Software 1,849 1,675 Total property and equipment 108,270 76,726 Less: accumulated depreciation and amortization (44,736) (26,185) Total property and equipment, net $ 63,534 $ 50,541 (1) Assets under capital lease relate to a sub-lease agreement that commenced in the fourth quarter of 2018, as further described in Note 11(a), and consist primarily of furniture that will be acquired at a bargain purchase option at the end of the lease term.
Schedule of amortization expense	The amortization expense was allocated as follows (in thousands): Year Ended December 31, 2018 2017 2016 Cost of revenue $ 6,898 $ 4,788 $ 3,304 Research and development 5,437 3,619 2,182 General and administrative 689 — — Total $ 13,024 $ 8,407 $ 5,486

Business Combinations (Tables)

Business Combinations (Tables)	12 Months Ended
	Dec. 31, 2018
VAI Technologies, LLC
Business Combinations
Schedule of purchase price allocation	The following table presents the final purchase price allocation recorded in the Company’s consolidated balance sheet (in thousands): Total Intangible assets (1) $ 517 Goodwill (2) 683 Total purchase price $ 1,200 (1) The intangible assets consist of developed technology with the estimated useful life of 4 years on the date of acquisition. (2) The goodwill in this transaction is primarily attributable to the future cash flows to be realized from the acquired technology and the future development initiatives of the acquired workforce. The Company intends to file elections that make the goodwill deductible for U.S. tax purposes.
Ytica.com a.s.
Business Combinations
Schedule of purchase price allocation	The following table presents the preliminary purchase price allocation recorded in the Company’s consolidated balance sheet as of December 31, 2018 (in thousands): Total Net tangible assets $ (1,538) Intangible assets (1) 9,920 Goodwill (2) 13,375 Total purchase price $ 21,757 (1) Identifiable finite-lived intangible assets were comprised of the following (in thousands): Estimated life Total (in years) Developed technology $ 9,090 4 Customer relationships 830 2 Total intangible assets acquired $ 9,920 (2) The goodwill is primarily attributable to the future cash flows to be realized from the acquired technology platform as well as operational synergies. The Company intends to file elections that make the goodwill deductible for U.S. tax purposes.
Schedule of identifiable finite-lived intangible assets	Identifiable finite-lived intangible assets were comprised of the following (in thousands): Estimated life Total (in years) Developed technology $ 9,090 4 Customer relationships 830 2 Total intangible assets acquired $ 9,920
Core Network Dynamics GmbH
Business Combinations
Schedule of purchase price allocation	The following table presents the preliminary purchase price allocation recorded in the Company’s consolidated balance sheet as of December 31, 2018 (in thousands): Total Net tangible assets $ (313) Intangible assets (1) 4,500 Goodwill (2) 6,869 Total purchase price $ 11,056 (1) Identifiable finite-lived intangible assets were comprised of the following (in thousands): Estimated life Total (in years) Developed technology $ 3,910 4 Customer relationships 590 0.5 Total intangible assets acquired $ 4,500 (2) The goodwill is primarily attributable to the future cash flows to be realized from the operating synergies between the acquired technology platform and the Company’s Programmable Wireless products. The Company intends to file elections that make the goodwill deductible for U.S. tax purposes.
Schedule of identifiable finite-lived intangible assets	Identifiable finite-lived intangible assets were comprised of the following (in thousands): Estimated life Total (in years) Developed technology $ 3,910 4 Customer relationships 590 0.5 Total intangible assets acquired $ 4,500
Beepsend AB, a messaging provider based in Sweden
Business Combinations
Schedule of purchase price allocation	The following table presents the purchase price allocation, as adjusted, recorded in the Company’s consolidated balance sheet (in thousands): Total Net tangible liabilities $ (3,575) Intangible assets (1) 13,700 Goodwill (2) 12,837 Total purchase price $ 22,962 (1) Identifiable finite-lived intangible assets were comprised of the following: Estimated life Total (in years) Developed technology $ 5,000 4 Customer relationships 6,100 7 - 8 Supplier relationships 2,600 5 Total intangible assets acquired $ 13,700
Schedule of identifiable finite-lived intangible assets	Identifiable finite-lived intangible assets were comprised of the following: Estimated life Total (in years) Developed technology $ 5,000 4 Customer relationships 6,100 7 - 8 Supplier relationships 2,600 5 Total intangible assets acquired $ 13,700
Kurento Open Source Project
Business Combinations
Schedule of purchase price allocation	The following table presents the final purchase price allocation recorded in the Company’s consolidated balance sheet (in thousands): Total Intangible assets (1) $ 8,100 Goodwill (2) 400 Total purchase price $ 8,500 (1) The intangible assets consist of developed technology with the estimated useful life of 3 years on the date of acquisition. (2) The goodwill in this transaction is primarily attributable to the future cash flows to be realized from the acquired technology and the future development initiatives of the acquired workforce. The goodwill is deductible for tax purposes.

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	12 Months Ended
	Dec. 31, 2018
Goodwill and Intangible Assets
Schedule of goodwill balance	Goodwill balance as of December 31, 2018 and 2017 was as follows (in thousands): Total Balance as of December 31, 2016 $ 3,565 Goodwill recorded in connection with 2017 acquisition 12,688 Measurement period adjustment 149 Effect of exchange rate 1,449 Balance as of December 31, 2017 $ 17,851 Goodwill recorded in connection with 2018 acquisitions 20,356 Measurement period adjustment Effect of exchange rate (613) Balance as of December 31, 2018 $ 38,165
Schedule of intangible assets	Intangible assets consisted of the following (in thousands): As of December 31, 2018 Accumulated Gross Amortization Net Amortizable intangible assets: Developed technology $ 28,209 $ (10,497) $ 17,712 Customer relationships 8,153 (2,411) 5,742 Supplier relationships 2,696 (973) 1,723 Trade name 60 (60) — Patent 2,264 (178) 2,086 Total amortizable intangible assets 41,382 (14,119) 27,263 Non-amortizable intangible assets: Domain names 32 — 32 Trademarks 263 — 263 Total $ 41,677 $ (14,119) $ 27,558 As of December 31, 2017 Accumulated Gross Amortization Net Amortizable intangible assets: Developed technology $ 14,941 $ (5,476) $ 9,465 Customer relationships 7,159 (1,006) 6,153 Supplier relationships 2,881 (500) 2,381 Trade name 60 (60) — Patent 1,878 (108) 1,770 Total amortizable intangible assets 26,919 (7,150) 19,769 Non-amortizable intangible assets: Domain names 32 — 32 Trademarks 263 — 263 Total $ 27,214 $ (7,150) $ 20,064
Schedule of total estimated future amortization expense	Total estimated future amortization expense was as follows (in thousands): As of December 31, 2018 2019 $ 9,724 2020 6,337 2021 4,922 2022 3,198 2023 892 Thereafter 2,190 Total $ 27,263

Accrued Expenses and Other Li_2

Accrued Expenses and Other Liabilities (Tables)	12 Months Ended
	Dec. 31, 2018
Accrued Expenses and Other Liabilities
Schedule of accrued expenses and other current liabilities	Accrued expenses and other current liabilities consisted of the following (in thousands): As of December 31, 2018 2017 Accrued payroll and related $ 9,886 $ 4,898 Accrued bonus and commission 8,564 4,777 Accrued cost of revenue 29,901 10,876 Sales and other taxes payable 23,631 20,877 ESPP contributions 2,672 1,338 Deferred rent 1,418 1,048 Nonrefundable deposits 3,415 162 VAT liability 2,217 2,515 Accrued other expense 18,054 7,123 Total accrued expenses and other current liabilities $ 99,758 $ 53,614
Schedule of other long-term liabilities	Other long-term liabilities consisted of the following (in thousands): As of December 31, 2018 2017 Deferred rent $ 7,569 $ 8,480 Deferred tax liability 5,181 2,452 Acquisition holdback 2,290 — Capital lease obligation 2,170 — Accrued other expense 959 477 Total other long-term liabilities $ 18,169 $ 11,409

Convertible Senior Notes and _2

Convertible Senior Notes and Capped Call Transactions (Tables)	12 Months Ended
	Dec. 31, 2018
Convertible Senior Notes and Capped Call Transactions
Schedule of net carrying amount of the liability and equity components of the Notes	The net carrying amount of the liability component of the Notes was as follows (in thousands): As of December 31, 2018 Principal $ 550,000 Unamortized discount (106,484) Unamortized issuance costs (9,020) Net carrying amount $ 434,496 The net carrying amount of the equity component of the Notes was as follows (in thousands): As of December 31, 2018 Proceeds allocated to the conversion options (debt discount) $ 119,435 Issuance costs (2,819) Net carrying amount $ 116,616
Schedule of interest expense recognized related to the Notes	The following table sets forth the interest expense recognized related to the Notes (in thousands): Year Ended December 31, 2018 Contractual interest expense $ 852 Amortization of debt issuance costs 1,102 Amortization of debt discount 12,951 Total interest expense related to the Notes $ 14,905

Supplemental Balance Sheet In_2

Supplemental Balance Sheet Information (Tables)	12 Months Ended
	Dec. 31, 2018
Supplemental Balance Sheet Information
Schedule of the allowance for doubtful accounts	A roll-forward of the Company’s reserves for the years ended December 31, 2018, 2017 and 2016 is as follows (in thousands): (a) Allowance for doubtful accounts: Year Ended December 31, 2018 2017 2016 Balance, beginning of period $ 1,033 $ 1,076 $ 486 Additions 4,085 580 1,145 Write-offs (173) (623) (555) Balance, end of period $ 4,945 $ 1,033 $ 1,076
Schedule of the sales credit reserve	A roll-forward of the Company’s reserves for the years ended December 31, 2018, 2017 and 2016 is as follows (in thousands): (b) Sales credit reserve: Year Ended December 31, 2018 2017 2016 Balance, beginning of period $ 1,761 $ 544 $ 714 Additions 5,560 2,531 1,348 Deductions against reserve (4,306) (1,314) (1,518) Balance, end of period $ 3,015 $ 1,761 $ 544

Revenue by Geographic Area (Tab

Revenue by Geographic Area (Tables)	12 Months Ended
	Dec. 31, 2018
Revenue by Geographic Area
Schedule of revenue by geographic area	The following table sets forth revenue by geographic area (in thousands): Year Ended December 31, 2018 2017 2016 Revenue by geographic area: United States $ 484,809 $ 308,612 $ 233,922 International 165,258 90,408 43,413 Total $ 650,067 $ 399,020 $ 277,335 Percentage of revenue by geographic area: United States 75 % 77 % 84 % International 25 % 23 % 16 %

Commitments and Contingencies (

Commitments and Contingencies (Tables)	12 Months Ended
	Dec. 31, 2018
Commitments and Contingencies
Schedule of future minimum lease payments under non-cancelable operating leases	Future minimum lease payments under non-cancelable operating leases were as follows (in thousands): As of December 31, Year Ending December 31: 2018 2019 $ 24,128 2020 29,527 2021 30,898 2022 30,492 2023 30,122 Thereafter 81,316 Total minimum lease payments $ 226,483
Schedule of future minimum payments under other existing non-cancelable purchase commitments	Future minimum lease payments under the capital lease were as follows (in thousands): As of December 31, Year Ending December 31: 2018 2019 $ 306 2020 512 2021 573 2022 590 2023 608 Thereafter 1,939 Total minimum lease payments $ 4,528
Schedule of future minimum lease payments under the capital lease	Future minimum lease payments under the capital lease were as follows (in thousands): As of December 31, Year Ending December 31: 2018 2019 $ 306 2020 512 2021 573 2022 590 2023 608 Thereafter 1,939 Total minimum lease payments $ 4,528

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	12 Months Ended
	Dec. 31, 2018
Stockholders' Equity
Schedule of reserved shares of common stock for issuance	As of December 31, As of December 31, 2018 2017 Stock options issued and outstanding 7,978,369 10,710,427 Nonvested restricted stock units issued and outstanding 8,262,902 5,665,459 Class A common stock reserved for Twilio.org 572,676 635,014 Stock-based awards available for grant under 2016 Plan 9,313,354 10,200,189 Stock-based awards available for grant under 2016 ESPP 3,092,779 2,478,343 Class A common stock reserved for the convertible senior notes 10,472,165 — Total 39,692,245 29,689,432

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	12 Months Ended
	Dec. 31, 2018
Stock-Based Compensation
Schedule of restricted stock unit activity	Weighted‑ average Aggregate Number of grant date intrinsic options fair value value outstanding (per share) (in thousands) Nonvested RSUs as of December 31, 2017 5,665,459 $ 29.29 $ 133,648 Granted 5,556,817 49.70 Vested (2,142,776) 29.50 Forfeited and cancelled (816,598) 31.96 Nonvested RSUs as of December 31, 2018 8,262,902 $ 42.70 $ 729,373
Schedule of valuation assumptions for ESPP	Year Ended December 31, 2018 2017 2016 Employee Stock Purchase Plan Expected term (in years) 0.5 0.5 0.90 Expected volatility 47.54% 33.2% - 33.9% 52% Risk-free interest rate 2.5% 1.1% - 1.4% 0.6% Dividend rate 0% 0% 0%
Schedule of stock based compensation expense	The Company recorded the total stock‑based compensation expense as follows (in thousands): Year Ended December 31, 2018 2017 2016 Cost of revenue $ 1,126 $ 650 $ 291 Research and development 42,277 22,808 12,946 Sales and marketing 23,616 9,822 4,972 General and administrative 26,254 16,339 6,016 Total $ 93,273 $ 49,619 $ 24,225
Employee and Nonemployee Stock Options
Stock-Based Compensation
Schedule of stock options activity	Weighted- Weighted- average average remaining Aggregate Number of exercise contractual intrinsic options price term value outstanding (per share) (in years) (in thousands) Outstanding options as of December 31, 2017 10,155,427 $ 10.31 7.12 $ 145,763 Granted 1,330,118 39.77 Exercised (3,628,032) 8.20 Forfeited and cancelled (434,144) 19.70 Outstanding options as of December 31, 2018 7,423,369 $ 16.07 6.80 $ 543,640 Options vested and exercisable as of December 31, 2018 4,529,504 $ 9.38 5.96 $ 362,017
Employee Stock Options
Stock-Based Compensation
Schedule of valuation assumptions	Year Ended December 31, 2018 2017 2016 Employee Stock Options Fair value of common stock $76.63 $23.60 - $31.96 $10.09 - $15.00 Expected term (in years) 6.08 6.08 6.08 Expected volatility 43.71% 44.3% - 47.6% 51.4% - 53.0% Risk-free interest rate 3.01% 1.9% - 2.3% 1.3% - 1.5% Dividend rate 0% 0% 0%
Performance-based stock options
Stock-Based Compensation
Schedule of stock options activity	Weighted‑ Weighted‑ average average remaining Number of exercise contractual Aggregate options price term intrinsic value outstanding (per share) (in years) (in thousands) Outstanding options as of December 31, 2017 555,000 $ 31.72 6.0 $ — Granted — — Exercised — — Forfeited and cancelled — — Outstanding options as of December 31, 2018 555,000 $ 31.72 6.0 $ — Options vested and exercisable as of December 31, 2018 185,000 $ 31.72 5.16 $ 10,652
Schedule of valuation assumptions	Asset volatility 40 % Equity volatility 45 % Discount rate 14 % Stock price at grant date $ 31.72

Net Loss Per Share Attributab_2

Net Loss Per Share Attributable to Common Stockholders (Tables)	12 Months Ended
	Dec. 31, 2018
Net Loss Per Share Attributable to Common Stockholders
Schedule of the calculation of basic and diluted net loss per share attributable to common stockholders	The following table sets forth the calculation of basic and diluted net loss per share attributable to common stockholders during the periods presented (in thousands, except per share data): Year Ended December 31, 2018 2017 2016 Net loss attributable to common stockholders $ (121,949) $ (63,708) $ (41,324) Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted 97,130,339 91,224,607 53,116,675 Net loss per share attributable to common stockholders, basic and diluted $ (1.26) $ (0.70) $ (0.78)
Schedule of common stock equivalents excluded from the computation of the diluted net loss per share attributable to common stockholders	Year Ended December 31, 2018 2017 2016 Stock options issued and outstanding 7,978,369 10,710,427 14,649,276 Nonvested restricted stock units issued and outstanding 8,262,902 5,665,459 2,034,217 Class A common stock reserved for Twilio.org 572,676 635,014 680,397 Class A common stock committed under 2016 ESPP 113,312 235,372 597,038 Conversion spread* 233 — — Unvested shares subject to repurchase 1,250 5,214 49,580 Total 16,829,742 17,251,486 18,010,508 * Since the Company expects to settle the principal amount of its outstanding convertible senior notes in cash and any excess in shares of the Company’s Class A common stock, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share of Class A common stock when the average market price of the Company’s Class A common stock for a given period exceeds the conversion price of $70.90 per share for the Notes. The conversion spread is calculated using the average market price of Class A common stock during the period, consistent with the treasury stock method.

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2018
Income Taxes
Domestic and Foreign Components of Loss before Income Taxes	The following table presents domestic and foreign components of loss before income taxes for the periods presented (in thousands): Year Ended December 31, 2018 2017 2016 United States $ (96,448) $ (46,737) $ (14,002) International (24,710) (16,266) (26,996) Loss before provision for income taxes $ (121,158) $ (63,003) $ (40,998)
Provision for Income Taxes	Provision for income taxes consists of the following (in thousands): Year Ended December 31, 2018 2017 2016 Current: Federal $ — $ 99 $ — State 139 78 83 Foreign 881 823 214 Total 1,020 1,000 297 Deferred: Federal 29 28 2 State 19 10 — Foreign (277) (333) 27 Total (229) (295) 29 Provision for income taxes $ 791 $ 705 $ 326
Reconciliation of the Statutory Federal Tax Rate and the Company's Effective Tax Rate	Year Ended December 31, 2018 2017 2016 Tax benefit at federal statutory rate 21 % 34 % 34 % State tax, net of federal benefit 15 10 11 Stock-based compensation 31 47 23 Credits 8 8 2 Foreign rate differential (4) (8) (23) Reserve for uncertain tax positions — — (12) Change in valuation allowance (68) (46) (34) Change in federal statutory rate — (45) — Other (3) (1) (2) Effective tax rate 0 % (1) % (1) %
Significant Components of Deferred Tax Assets and Liabilities	The following table presents the significant components of the Company’s deferred tax assets and liabilities (in thousands): As of December 31, 2018 2017 2016 Deferred tax assets: Net operating loss carryforwards $ 116,190 $ 56,138 $ 31,090 Accrued and prepaid expenses 11,594 9,140 16,698 Stock-based compensation 11,147 7,131 5,368 Research and development credits 32,206 16,212 7,807 Charitable contributions 3,100 1,233 1,458 Capped call 13,175 — — Debt issuance cost 638 — — Other 194 472 — Gross deferred tax assets 188,244 90,326 62,421 Valuation allowance (147,354) (78,900) (49,601) Net deferred tax assets 40,890 11,426 12,820 Deferred tax liabilities: Capitalized software (10,686) (7,664) (7,086) Prepaid expenses (838) (1,015) (452) Acquired intangibles (2,997) (2,101) (152) Property and equipment (1,990) (2,380) (4,931) Convertible debt (27,164) — — Deferred commissions (2,396) (718) (201) Net deferred tax asset (liability) $ (5,181) $ (2,452) $ (2)
Reconciliation Beginning and Ending Amount of Unrecognized Tax Benefits	A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2018 2017 2016 Unrecognized tax benefit, beginning of year $ 9,445 $ 12,275 $ 1,679 Gross increases for tax positions of prior years 1,233 493 1,996 Gross decrease for tax positions of prior years (4) (6,331) — Gross increases for tax positions of current years 4,961 3,008 8,600 Unrecognized tax benefit, end of year $ 15,635 $ 9,445 $ 12,275

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - customer	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue | Customer Concentration Risk
Concentration of Credit Risk
Number of customers	0	0	1
Concentration risk (as a percent)			14.00%
Accounts Receivable | Credit Concentration Risk
Concentration of Credit Risk
Number of customers	0	0

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Impact of Adopting ASC 606 (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Jan. 01, 2018	Dec. 31, 2017
Adoption of revenue recognition guidance
Retained earnings	$ (371,674)		$ (250,438)
Incremental commission costs of obtaining new contracts
Adoption of revenue recognition guidance
Amortization period for deferred incremental commission costs of obtaining new contracts	5 years
ASU 2014-09 - Revenue from Contracts with Customers | Impact of adopting ASC 606
Adoption of revenue recognition guidance
Retained earnings		$ 700

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue Recognition
Optional exemption to not disclose transaction price allocated to remaining performance obligations	true
Maximum duration for the majority of the Company's contracts	1 year
Deferred revenue	$ 10.3
Customer deposits	9.3
Revenue recognized out of deferred revenue and customer deposits	$ 10.5
Usage-based fees
Revenue Recognition
Percent of revenue	84.00%	83.00%	83.00%
Subscription-based fees
Revenue Recognition
Percent of revenue	16.00%	17.00%

Summary of Significant Accoun_7

Summary of Significant Accounting Policies - Deferred Sales Commissions (Details) $ in Millions	12 Months Ended
	Dec. 31, 2018USD ($)
Deferred Sales Commissions
Total net capitalized costs	$ 9.4
Amortization of capitalized costs of obtaining a contract	$ 1.4
Incremental commission costs of obtaining new contracts
Deferred Sales Commissions
Amortization period for deferred incremental commission costs of obtaining new contracts	5 years

Summary of Significant Accoun_8

Summary of Significant Accounting Policies - Internal-Use Software Development Costs (Details)	12 Months Ended
	Dec. 31, 2018
Capitalized internal-use software development costs
Internal-Use Software Development Costs
Estimated useful life (in years)	3 years

Summary of Significant Accoun_9

Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Summary of Significant Accounting Policies
Advertising expense	$ 10.6	$ 4.9	$ 3.5

Summary of Significant Accou_10

Summary of Significant Accounting Policies - Stock-Based Compensation (Details) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2018
Stock-Based Compensation
Expected dividend rate for Black-Scholes model (as a percent)		0.00%
Accounting Standards Update 2016-09 | Early Adoption Impact
Stock-Based Compensation
Increase in stock-based compensation expense for cumulative prior year impact	$ 100,000
Increase in stock-based compensation expense for 2016 quarterly impact	$ 75,000

Summary of Significant Accou_11

Summary of Significant Accounting Policies - Net Loss Per Share Attributable to Common Stockholders (Details)	12 Months Ended
	Dec. 31, 2018Vote
Common Class A
Net Loss Per Share Attributable to Common Stockholders
Votes per share	1
Common Class B
Net Loss Per Share Attributable to Common Stockholders
Votes per share	10
Ratio for option to convert to Class A	1

Summary of Significant Accou_12

Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Restricted Cash
Cash provided by (used in) operating activities	$ 7,983	$ (3,255)	$ 10,097
Cash used in investing activities	(139,419)	(226,748)	(34,986)
Cash, cash equivalents and restricted cash	505,334	120,788	314,280	$ 110,005
Restricted cash balances	$ 18,100	5,500
As Originally Reported
Restricted Cash
Cash provided by (used in) operating activities		(3,260)	10,091
Cash used in investing activities		(223,630)	(42,425)
Cash, cash equivalents and restricted cash		$ 115,286	$ 305,665	$ 108,835

Summary of Significant Accou_13

Summary of Significant Accounting Policies - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Summary of Significant Accounting Policies
Allowance for doubtful accounts	$ 4,945	$ 1,033	$ 1,076	$ 486

Summary of Significant Accou_14

Summary of Significant Accounting Policies - Costs Related to the Public Offerings (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016USD ($)
Summary of Significant Accounting Policies
Costs related to the public offerings	$ 5,730

Summary of Significant Accou_15

Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2018
Capitalized internal-use software development costs
Property and Equipment
Estimated useful life (in years)	3 years
Office equipment
Property and Equipment
Estimated useful life (in years)	3 years
Furniture and fixtures
Property and Equipment
Estimated useful life (in years)	5 years
Software
Property and Equipment
Estimated useful life (in years)	3 years
Assets under capital lease
Property and Equipment
Estimated useful life (in years)	5 years
Leasehold improvements
Property and Equipment
Estimated useful life (in years)	5 years

Summary of Significant Accou_16

Summary of Significant Accounting Policies - Intangible Assets (Details)	12 Months Ended
	Dec. 31, 2018
Developed technology | Minimum
Intangible Assets
Useful life (in years)	3 years
Developed technology | Maximum
Intangible Assets
Useful life (in years)	4 years
Customer relationships | Minimum
Intangible Assets
Useful life (in years)	2 years
Customer relationships | Maximum
Intangible Assets
Useful life (in years)	8 years
Supplier relationships
Intangible Assets
Useful life (in years)	5 years
Trade name
Intangible Assets
Useful life (in years)	2 years
Patent
Intangible Assets
Useful life (in years)	20 years

Summary of Significant Accou_17

Summary of Significant Accounting Policies - Goodwill (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018USD ($)item	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Summary of Significant Accounting Policies
Number of reporting units | item	1
Goodwill impairment charges | $	$ 0	$ 0	$ 0

Summary of Significant Accou_18

Summary of Significant Accounting Policies - Impairment of Long Lived Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Summary of Significant Accounting Policies
Long-lived assets, including property and equipment and intangible assets, impairment loss	$ 0	$ 0	$ 0
Wrote off due to abandonment	$ 1,700	$ 600	$ 700

Summary of Significant Accou_19

Summary of Significant Accounting Policies - Segment Information (Details)	12 Months Ended
	Dec. 31, 2018segment
Summary of Significant Accounting Policies
Number of reportable segments	1

Fair Value Measurements - Asset

Fair Value Measurements - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Fair Value Measurements, Financial Assets
Marketable securities, Amortized Cost	$ 261,468	$ 176,185
Marketable securities, Aggregate Fair Value	261,128	175,587
Recurring
Fair Value Measurements, Financial Assets
Marketable securities, Amortized Cost	261,468	176,185
Marketable securities, Gross Unrealized Gains	23
Marketable securities, Gross Unrealized Losses Less Than 12 Months	(130)	(598)
Marketable securities, Gross Unrealized Losses More Than 12 Months	(233)
Marketable securities, Aggregate Fair Value	261,128	175,587
Total financial assets, Amortized Cost or Carrying Value	726,685	271,617
Total financial assets	726,345	271,019
Recurring | U.S. Treasury securities
Fair Value Measurements, Financial Assets
Marketable securities, Amortized Cost	59,785	59,962
Marketable securities, Gross Unrealized Losses Less Than 12 Months	(7)	(216)
Marketable securities, Gross Unrealized Losses More Than 12 Months	(9)
Marketable securities, Aggregate Fair Value	59,769	59,746
Recurring | Corporate debt securities and commercial paper
Fair Value Measurements, Financial Assets
Marketable securities, Amortized Cost	201,683	116,223
Marketable securities, Gross Unrealized Gains	23
Marketable securities, Gross Unrealized Losses Less Than 12 Months	(123)	(382)
Marketable securities, Gross Unrealized Losses More Than 12 Months	(224)
Marketable securities, Aggregate Fair Value	201,359	115,841
Recurring | Level 1
Fair Value Measurements, Financial Assets
Marketable securities, Aggregate Fair Value	59,769	59,746
Total financial assets	480,003	155,178
Recurring | Level 1 | U.S. Treasury securities
Fair Value Measurements, Financial Assets
Marketable securities, Aggregate Fair Value	59,769	59,746
Recurring | Level 2
Fair Value Measurements, Financial Assets
Marketable securities, Aggregate Fair Value	201,359	115,841
Total financial assets	246,342	115,841
Recurring | Level 2 | Corporate debt securities and commercial paper
Fair Value Measurements, Financial Assets
Marketable securities, Aggregate Fair Value	201,359	115,841
Recurring | Carrying Value
Fair Value Measurements, Financial Assets
Cash and cash equivalents	465,217	95,432
Recurring | Carrying Value | Money market funds
Fair Value Measurements, Financial Assets
Cash and cash equivalents	420,234	95,432
Recurring | Carrying Value | Reverse repurchase agreements
Fair Value Measurements, Financial Assets
Cash and cash equivalents	35,000
Recurring | Carrying Value | Commercial paper
Fair Value Measurements, Financial Assets
Cash and cash equivalents	9,983
Recurring | Aggregate Fair Value
Fair Value Measurements, Financial Assets
Cash and cash equivalents	465,217	95,432
Recurring | Aggregate Fair Value | Money market funds
Fair Value Measurements, Financial Assets
Cash and cash equivalents	420,234	95,432
Recurring | Aggregate Fair Value | Reverse repurchase agreements
Fair Value Measurements, Financial Assets
Cash and cash equivalents	35,000
Recurring | Aggregate Fair Value | Commercial paper
Fair Value Measurements, Financial Assets
Cash and cash equivalents	9,983
Recurring | Aggregate Fair Value | Level 1
Fair Value Measurements, Financial Assets
Cash and cash equivalents	420,234	95,432
Recurring | Aggregate Fair Value | Level 1 | Money market funds
Fair Value Measurements, Financial Assets
Cash and cash equivalents	420,234	$ 95,432
Recurring | Aggregate Fair Value | Level 2
Fair Value Measurements, Financial Assets
Cash and cash equivalents	44,983
Recurring | Aggregate Fair Value | Level 2 | Reverse repurchase agreements
Fair Value Measurements, Financial Assets
Cash and cash equivalents	35,000
Recurring | Aggregate Fair Value | Level 2 | Commercial paper
Fair Value Measurements, Financial Assets
Cash and cash equivalents	$ 9,983

Fair Value Measurements - Conve

Fair Value Measurements - Convertible Senior Notes (Details) - Convertible senior notes, 0.25%, due 2023 - USD ($) $ in Millions	Dec. 31, 2018	May 31, 2018
Fair Value Measurements, Liabilities
Interest rate (as a percent)	0.25%	0.25%
Fair value of the notes	$ 743.4

Fair Value Measurements - Marke

Fair Value Measurements - Marketable Securities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Marketable Securities
Other-than-temporary impairments associated with credit losses	$ 0	$ 0
Interest earned on marketable securities	$ 3,000	$ 2,600

Fair Value Measurements - Contr

Fair Value Measurements - Contractual Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Fair Value Measurements
Less than one year, Amortized Cost	$ 261,468	$ 108,584
One to two years, Amortized Cost		67,601
Total Amortized Cost	261,468	176,185
Less than one year, Aggregate Fair Value	261,128	108,360
One to two years, Aggregate Fair Value		67,227
Total Aggregate Fair Value	$ 261,128	$ 175,587

Fair Value Measurements - Rever

Fair Value Measurements - Reverse Repurchase Agreements (Details) $ in Millions	Dec. 31, 2018USD ($)
Reverse repurchase agreements
Amount of reverse repurchase agreements	$ 35

Property and Equipment - Proper

Property and Equipment - Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Property and Equipment
Total property and equipment	$ 108,270	$ 76,726
Less: accumulated depreciation and amortization	(44,736)	(26,185)
Total property and equipment, net	63,534	50,541
Capitalized internal-use software development costs
Property and Equipment
Total property and equipment	72,647	49,177
Leasehold improvements
Property and Equipment
Total property and equipment	15,293	14,246
Office equipment
Property and Equipment
Total property and equipment	13,563	9,652
Furniture and fixtures
Property and Equipment
Total property and equipment	2,440	1,976
Assets under capital lease
Property and Equipment
Total property and equipment	2,478
Software
Property and Equipment
Total property and equipment	$ 1,849	$ 1,675

Property and Equipment - Deprec

Property and Equipment - Depreciation and Amortization Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property and Equipment
Depreciation and amortization	$ 18.9	$ 13.1	$ 7.4

Property and Equipment - Capita

Property and Equipment - Capitalized Software Development Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property and Equipment
Capitalized software development costs	$ 25,300	$ 21,500	$ 13,500
Stock-based compensation capitalized in software development costs	5,706	4,176	1,953
Amortization of capitalized software development costs	13,024	8,407	5,486
Cost of revenue
Property and Equipment
Amortization of capitalized software development costs	6,898	4,788	3,304
Research and development
Property and Equipment
Amortization of capitalized software development costs	5,437	$ 3,619	$ 2,182
General and administrative
Property and Equipment
Capitalized software development costs	$ 689

Business Combinations - Conside

Business Combinations - Consideration (Details) - USD ($) $ in Millions	1 Months Ended
	Nov. 30, 2018	Sep. 30, 2018	Aug. 31, 2018	Feb. 28, 2017	Nov. 30, 2016
VAI Technologies, LLC
Acquisition
Total purchase price	$ 1.2
Purchase price paid in cash	1.2
Amount of purchase price placed into an escrow account	$ 0.3
VAI Technologies, LLC | Minimum
Acquisition
Escrow effective period	18 months
VAI Technologies, LLC | Maximum
Acquisition
Escrow effective period	4 years
Ytica.com a.s.
Acquisition
Total purchase price		$ 21.8
Purchase price paid in cash		21.8
Amount of purchase price placed into an escrow account		$ 3.2
Escrow effective period		18 months
Ytica.com a.s. | Restricted Stock | Common Class A
Acquisition
Grants (in shares)		47,574
Aggregate value		$ 3.6
Weighted average remaining contractual term (in years)		3 years
Core Network Dynamics GmbH
Acquisition
Total purchase price			$ 11.1
Purchase price paid in cash			11.1
Amount of purchase price placed into an escrow account			$ 2
Escrow effective period			18 months
Core Network Dynamics GmbH | Restricted Stock | Common Class A
Acquisition
Grants (in shares)			35,950
Aggregate value			$ 2.2
Weighted average remaining contractual term (in years)			3 years
Beepsend AB, a messaging provider based in Sweden
Acquisition
Total purchase price				$ 23
Purchase price paid in cash				23
Amount of purchase price placed into an escrow account				$ 5
Escrow effective period				18 months
Amount deposited into a separate escrow conditioned upon future service conditions				$ 2
Kurento Open Source Project
Acquisition
Total purchase price					$ 8.5
Purchase price paid in cash					8.5
Amount of purchase price placed into an escrow account					$ 1.5
Escrow effective period					24 months 10 days

Business Combinations - Purchas

Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Nov. 30, 2018	Sep. 30, 2018	Aug. 31, 2018	Dec. 31, 2017	Feb. 28, 2017	Dec. 31, 2016	Nov. 30, 2016
Acquisition
Goodwill	$ 38,165				$ 17,851		$ 3,565
VAI Technologies, LLC
Acquisition
Intangible assets		$ 517
Goodwill		683
Total purchase price		$ 1,200
Ytica.com a.s.
Acquisition
Net tangible assets			$ (1,538)
Intangible assets			9,920
Goodwill			13,375
Total purchase price			21,757
Net deferred tax liability			$ 1,700
Core Network Dynamics GmbH
Acquisition
Net tangible assets				$ (313)
Intangible assets				4,500
Goodwill				6,869
Total purchase price				11,056
Net deferred tax liability				$ 1,200
Beepsend AB, a messaging provider based in Sweden
Acquisition
Net tangible liabilities						$ (3,575)
Intangible assets						13,700
Goodwill						12,837
Total purchase price						22,962
Net deferred tax liability						$ 2,600
Kurento Open Source Project
Acquisition
Intangible assets								$ 8,100
Goodwill								400
Total purchase price								$ 8,500

Business Combinations - Identif

Business Combinations - Identifiable Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands	1 Months Ended					12 Months Ended
	Nov. 30, 2018	Sep. 30, 2018	Aug. 31, 2018	Feb. 28, 2017	Nov. 30, 2016	Dec. 31, 2018
Developed technology | Minimum
Acquisition
Estimated life (in years)						3 years
Developed technology | Maximum
Acquisition
Estimated life (in years)						4 years
Customer relationships | Minimum
Acquisition
Estimated life (in years)						2 years
Customer relationships | Maximum
Acquisition
Estimated life (in years)						8 years
Supplier relationships
Acquisition
Estimated life (in years)						5 years
VAI Technologies, LLC
Acquisition
Total intangible assets acquired	$ 517
VAI Technologies, LLC | Developed technology
Acquisition
Estimated life (in years)	4 years
Ytica.com a.s.
Acquisition
Total intangible assets acquired		$ 9,920
Ytica.com a.s. | Developed technology
Acquisition
Total intangible assets acquired		$ 9,090
Estimated life (in years)		4 years
Ytica.com a.s. | Customer relationships
Acquisition
Total intangible assets acquired		$ 830
Estimated life (in years)		2 years
Core Network Dynamics GmbH
Acquisition
Total intangible assets acquired			$ 4,500
Core Network Dynamics GmbH | Developed technology
Acquisition
Total intangible assets acquired			$ 3,910
Estimated life (in years)			4 years
Core Network Dynamics GmbH | Customer relationships
Acquisition
Total intangible assets acquired			$ 590
Estimated life (in years)			6 months
Beepsend AB, a messaging provider based in Sweden
Acquisition
Total intangible assets acquired				$ 13,700
Beepsend AB, a messaging provider based in Sweden | Developed technology
Acquisition
Total intangible assets acquired				$ 5,000
Estimated life (in years)				4 years
Beepsend AB, a messaging provider based in Sweden | Customer relationships
Acquisition
Total intangible assets acquired				$ 6,100
Beepsend AB, a messaging provider based in Sweden | Customer relationships | Minimum
Acquisition
Estimated life (in years)				7 years
Beepsend AB, a messaging provider based in Sweden | Customer relationships | Maximum
Acquisition
Estimated life (in years)				8 years
Beepsend AB, a messaging provider based in Sweden | Supplier relationships
Acquisition
Total intangible assets acquired				$ 2,600
Estimated life (in years)				5 years
Kurento Open Source Project
Acquisition
Total intangible assets acquired					$ 8,100
Kurento Open Source Project | Developed technology
Acquisition
Estimated life (in years)					3 years

Business Combinations - Acquisi

Business Combinations - Acquisition Costs (Details) - USD ($) $ in Millions	1 Months Ended				12 Months Ended		24 Months Ended
	Nov. 30, 2018	Sep. 30, 2018	Aug. 31, 2018	Nov. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017
VAI Technologies, LLC
Business Combinations
Acquisition related costs	$ 0.1
Ytica.com a.s.
Business Combinations
Acquisition related costs		$ 0.6
Core Network Dynamics GmbH
Business Combinations
Acquisition related costs			$ 0.8
Beepsend AB, a messaging provider based in Sweden
Business Combinations
Acquisition related costs					$ 0.3	$ 0.4	$ 0.7
Kurento Open Source Project
Business Combinations
Acquisition related costs				$ 0.1

Goodwill and Intangible Asset_2

Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Goodwill
Balance at the beginning of the period	$ 17,851	$ 3,565
Goodwill recorded in connection with acquisitions	20,356	12,688
Measurement period adjustment	571	149
Effect of exchange rate	(613)	1,449
Balance at the end of the period	$ 38,165	$ 17,851

Goodwill and Intangible Asset_3

Goodwill and Intangible Assets - Amortizable Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Intangible Assets
Gross	$ 41,382	$ 26,919
Accumulated Amortization	(14,119)	(7,150)
Net	27,263	19,769
Developed technology
Intangible Assets
Gross	28,209	14,941
Accumulated Amortization	(10,497)	(5,476)
Net	17,712	9,465
Customer relationships
Intangible Assets
Gross	8,153	7,159
Accumulated Amortization	(2,411)	(1,006)
Net	5,742	6,153
Supplier relationships
Intangible Assets
Gross	2,696	2,881
Accumulated Amortization	(973)	(500)
Net	1,723	2,381
Trade name
Intangible Assets
Gross	60	60
Accumulated Amortization	(60)	(60)
Patent
Intangible Assets
Gross	2,264	1,878
Accumulated Amortization	(178)	(108)
Net	$ 2,086	$ 1,770

Goodwill and Intangible Asset_4

Goodwill and Intangible Assets - Non-amortizable Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Domain names
Intangible Assets
Non-amortizable intangible assets	$ 32	$ 32
Trademarks
Intangible Assets
Non-amortizable intangible assets	$ 263	$ 263

Goodwill and Intangible Asset_5

Goodwill and Intangible Assets - Total Intangible Assets, Gross (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Intangible Assets
Amortizable intangible assets, gross	$ 41,382	$ 26,919
Total	41,677	27,214
Domain names
Intangible Assets
Non-amortizable intangible assets	32	32
Trademarks
Intangible Assets
Non-amortizable intangible assets	$ 263	$ 263

Goodwill and Intangible Asset_6

Goodwill and Intangible Assets - Total Intangible Assets, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Intangible Assets
Amortizable intangible assets, net	$ 27,263	$ 19,769
Total	27,558	20,064
Domain names
Intangible Assets
Non-amortizable intangible assets	32	32
Trademarks
Intangible Assets
Non-amortizable intangible assets	$ 263	$ 263

Goodwill and Intangible Asset_7

Goodwill and Intangible Assets - Total Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Goodwill and Intangible Assets
Gross	$ 41,677	$ 27,214
Accumulated Amortization	(14,119)	(7,150)
Net	$ 27,558	$ 20,064

Goodwill and Intangible Asset_8

Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Goodwill and Intangible Assets
Amortization expense	$ 7.2	$ 5.7	$ 0.9

Goodwill and Intangible Asset_9

Goodwill and Intangible Assets - Total Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Intangible Assets
2,019	$ 9,724
2,020	6,337
2,021	4,922
2,022	3,198
2,023	892
Thereafter	2,190
Net	$ 27,263	$ 19,769

Accrued Expenses and Other Li_3

Accrued Expenses and Other Liabilities - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Accrued Expenses and Other Liabilities
Accrued payroll and related	$ 9,886	$ 4,898
Accrued bonus and commission	8,564	4,777
Accrued cost of revenue	29,901	10,876
Sales and other taxes payable	23,631	20,877
ESPP contributions	2,672	1,338
Deferred rent	1,418	1,048
Nonrefundable deposits	3,415	162
VAT liability	2,217	2,515
Accrued other expense	18,054	7,123
Total accrued expenses and other current liabilities	$ 99,758	$ 53,614

Accrued Expenses and Other Li_4

Accrued Expenses and Other Liabilities - Other Long-term Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Accrued Expenses and Other Liabilities
Deferred rent	$ 7,569	$ 8,480
Deferred tax liability	5,181	2,452
Acquisition holdback	2,290
Capital lease obligation	2,170
Accrued other expenses	959	477
Total other long-term liabilities	$ 18,169	$ 11,409

Convertible Senior Notes and _3

Convertible Senior Notes and Capped Call Transactions - Issuance (Details) - USD ($) $ in Millions	1 Months Ended
	May 31, 2018	Dec. 31, 2018
Convertible senior notes, 0.25%, due 2023
Convertible Senior Notes
Interest rate (as a percent)	0.25%	0.25%
Net proceeds from the debt offering	$ 537
Convertible senior notes, 0.25%, due 2023 - initial private placement
Convertible Senior Notes
Aggregate principal amount	550
Convertible senior notes, 0.25%, due 2023 - over-allotment
Convertible Senior Notes
Aggregate principal amount	$ 75

Convertible Senior Notes and _4

Convertible Senior Notes and Capped Call Transactions - Terms (Details)	1 Months Ended	12 Months Ended
	May 31, 2018USD ($)$ / shares	Dec. 31, 2018USD ($)D$ / shares	Dec. 31, 2017$ / shares
Convertible Senior Notes
Common stock, par value (in dollars per share) | $ / shares		$ 0.001	$ 0.001
Common Class A
Convertible Senior Notes
Common stock, par value (in dollars per share) | $ / shares		0.001	$ 0.001
Convertible senior notes, 0.25%, due 2023
Convertible Senior Notes
Conversion price | $ / shares	$ 70.90	$ 70.90
Threshold trading days for determining conversion eligibility		20
Consecutive trading period for determining conversion eligibility		30
Minimum sale price of stock as a percentage of the conversion price, to trigger conversion eligibility		130.00%
Number of business days of conversion eligibility following period of threshold Notes trading price		5
Number of consecutive trading days of threshold Notes trading price for conversion eligibility to follow		5
Principal amount used in test of threshold Notes trading price for conversion eligibility | $		$ 1,000
Trading price as a percentage of the product of common stock sale price and conversion rate, below which conversion eligibility is triggered		98.00%
Cash redemption price, percentage of principal amount of the Notes		100.00%
Unamortized issuance costs | $	$ 10,200,000	$ 9,020,000
Convertible senior notes, 0.25%, due 2023 | Common Class A
Convertible Senior Notes
Conversion ratio	14.1040

Convertible Senior Notes and _5

Convertible Senior Notes and Capped Call Transactions - Net Carrying Amount (Details) - Convertible senior notes, 0.25%, due 2023 - USD ($) $ in Thousands	Dec. 31, 2018	May 31, 2018
Net carrying amount of the liability component of the Notes
Principal	$ 550,000
Unamortized discount	(106,484)
Unamortized issuance costs	(9,020)	$ (10,200)
Net carrying amount, liability component	434,496
Net carrying amount of the equity component of the Notes
Proceeds allocated to the conversion options (debt discount)	$ 119,435	$ 119,400
Effective interest rate (as a percent)	5.70%
Issuance costs	$ (2,819)
Net carrying amount, equity component	$ 116,616

Convertible Senior Notes and _6

Convertible Senior Notes and Capped Call Transactions - Interest Expense (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018USD ($)
Interest expense recognized related to the Notes
Amortization of debt issuance costs	$ 1,102
Amortization of debt discount	12,951
Convertible senior notes, 0.25%, due 2023
Interest expense recognized related to the Notes
Contractual interest expense	852
Amortization of debt issuance costs	1,102
Amortization of debt discount	12,951
Total interest expense related to the Notes	$ 14,905

Convertible Senior Notes and _7

Convertible Senior Notes and Capped Call Transactions - Capped Calls (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018USD ($)$ / sharesshares
Capped calls
Net cost to purchase the transactions | $	$ 58,465
Capped calls
Capped calls
Initial strike price (in dollars per share) | $ / shares	$ 70.90
Initial cap price (in dollars per share) | $ / shares	$ 105.04
Number of shares covered | shares	7,757,200
Net cost to purchase the transactions | $	$ 58,500

Supplemental Balance Sheet In_3

Supplemental Balance Sheet Information - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Allowance for doubtful accounts
Balance, beginning of period	$ 1,033	$ 1,076	$ 486
Additions	4,085	580	1,145
Write-offs	(173)	(623)	(555)
Balance, end of period	$ 4,945	$ 1,033	$ 1,076

Supplemental Balance Sheet In_4

Supplemental Balance Sheet Information - Sales Credit Reserve (Details) - Sales credit reserve - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Sales credit reserve
Balance, beginning of period	$ 1,761	$ 544	$ 714
Additions	5,560	2,531	1,348
Deductions against reserve	(4,306)	(1,314)	(1,518)
Balance, end of period	$ 3,015	$ 1,761	$ 544

Revenue by Geographic Area - Re

Revenue by Geographic Area - Revenue by Geographic Area (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue by geographic area
Revenue	$ 650,067	$ 399,020	$ 277,335
United States
Revenue by geographic area
Revenue	484,809	308,612	233,922
International
Revenue by geographic area
Revenue	$ 165,258	$ 90,408	$ 43,413

Revenue by Geographic Area - Pe

Revenue by Geographic Area - Percentage of Revenue by Geographic Area (Details) - Revenue - Geographic Concentration Risk	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
United States
Percentage of revenue by geographic area
Percentage of revenue (as a percent)	75.00%	77.00%	84.00%
International
Percentage of revenue by geographic area
Percentage of revenue (as a percent)	25.00%	23.00%	16.00%

Commitments and Contingencies -

Commitments and Contingencies - Lease Commitments (Details)	1 Months Ended	12 Months Ended	23 Months Ended
	Oct. 31, 2016USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Sep. 30, 2018USD ($)ft²	Jan. 31, 2016USD ($)ft²
Various Facilities Leases | Maximum
Lease Commitments
Non-cancelable operating lease agreements, facilities, remaining term (in years)		10 years
Office Space, 375 Beale Street, San Francisco, California
Lease Commitments
Area of office space (in square feet) | ft²					90,000
Lease agreements term	96 months
Monthly payment, first 60 months	$ 400,000
Monthly payment, after 60 months	$ 500,000
Tenant improvements allowance					$ 8,300,000
Tenant improvement allowance collected			$ 8,300,000
Office Space, 375 Beale Street, San Francisco, California | Letter of Credit
Lease Commitments
Letter of credit			$ 7,400,000
Office Space, 101 Spear Street, San Francisco, California
Lease Commitments
Area of office space (in square feet) | ft²				259,416
Bargain purchase option, price to acquire existing furniture at end of lease term		$ 1
Assets under capital lease		$ 2,500,000
Office Space, 101 Spear Street, San Francisco, California | Minimum
Lease Commitments
Monthly lease payments				$ 800,000
Office Space, 101 Spear Street, San Francisco, California | Maximum
Lease Commitments
Monthly lease payments				2,200,000
Office Space, 101 Spear Street, San Francisco, California | Letter of Credit
Lease Commitments
Letter of credit				$ 14,700,000

Commitments and Contingencies_2

Commitments and Contingencies - Rent Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Commitments and Contingencies
Rent expense	$ 10.3	$ 8.1	$ 7.3

Commitments and Contingencies_3

Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2018USD ($)
Future minimum lease payments
2,019	$ 24,128
2,020	29,527
2,021	30,898
2,022	30,492
2,023	30,122
Thereafter	81,316
Total minimum lease payments	226,483
Future minimum lease payments under the capital lease
2,019	306
2,020	512
2,021	573
2,022	590
2,023	608
Thereafter	1,939
Total minimum lease payments	$ 4,528

Commitments and Contingencies_4

Commitments and Contingencies - Other Commitments (Details) - Non-cancellable vendor agreements	12 Months Ended
	Dec. 31, 2018
Minimum
Non-cancellable commitment
Term of non-cancellable agreement	1 year
Maximum
Non-cancellable commitment
Term of non-cancellable agreement	4 years

Commitments and Contingencies_5

Commitments and Contingencies - Future Minimum Payments under Other Existing Noncancellable Purchase Commitments (Details) - Non-cancellable vendor agreements $ in Thousands	Dec. 31, 2018USD ($)
Future minimum payments under other existing noncancelable purchase commitments
2,019	$ 37,623
2,020	2,337
2,021	1,023
2,022	2,000
2,023	5,000
Total payments	$ 47,983

Commitments and Contingencies_6

Commitments and Contingencies - Legal Matters (Details) $ in Millions	Feb. 11, 2019complaint	Jan. 09, 2019USD ($)	Dec. 31, 2018USD ($)	Jan. 02, 2018item
Putative class action complaints, SendGrid
Legal Matters
Number of complaints voluntarily dismissed | complaint	4
Pending Litigation | Putative class action complaint, Angela Flowers v. Twilio Inc.
Legal Matters
Number of classes of individuals who allegedly sent or received certain communications | item				2
Number of customers' accounts involved in the complaint | item				3
Amount paid to common fund per settlement agreement | $		$ 10
Estimated probable loss | $			$ 1.7

Commitments and Contingencies_7

Commitments and Contingencies - Indemnification Agreements (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Indemnification Agreement
Indemnification Agreements
Amount accrued	$ 0	$ 0

Commitments and Contingencies_8

Commitments and Contingencies - Other taxes (Details) $ in Thousands	1 Months Ended	12 Months Ended
	Jan. 31, 2018item	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Other taxes
Number of additional jurisdictions in which the Company began collecting non-income-based taxes | item	1
Net loss attributable to common stockholders		$ (121,949)	$ (63,708)	$ (41,324)
Liability for uncertain tax positions		22,600	$ 20,900
Change in estimate for non-income-based tax exposure - revisions in key assumptions
Other taxes
Net loss attributable to common stockholders		$ 13,400

Stockholders' Equity - Preferre

Stockholders' Equity - Preferred Stock (Details) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Preferred Stock
Preferred stock, authorized (in shares)	100,000,000	100,000,000
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0

Stockholders' Equity - Initial

Stockholders' Equity - Initial Public Offering (Details) $ / shares in Units, $ in Millions	1 Months Ended
	Oct. 31, 2016USD ($)$ / sharesshares	Jun. 30, 2016USD ($)$ / sharesshares
Common Class B
Initial Public Offering
Shares issued upon automatic conversion (in shares)		54,508,441
Conversion ratio		1
IPO | Common Class A
Initial Public Offering
Shares sold (in shares)		11,500,000
Stock price at grant date (in dollars per share) | $ / shares		$ 15
Proceeds received, after deducting underwriting discounts and offering expenses | $		$ 155.5
Over-Allotment Option, IPO | Common Class A
Initial Public Offering
Shares sold (in shares)		1,500,000
Follow-on Public Offering | Common Class A
Initial Public Offering
Shares sold (in shares)	1,691,222
Stock price at grant date (in dollars per share) | $ / shares	$ 40
Proceeds received, after deducting underwriting discounts and offering expenses | $	$ 64.4
Over-Allotment Option, FPO | Common Class A
Initial Public Offering
Shares sold (in shares)	1,050,000
Stock Sold by Certain Selling Stockholders | Common Class A
Initial Public Offering
Shares sold (in shares)	6,358,778
Stock option exercises (in shares)	906,364

Stockholders' Equity - Common S

Stockholders' Equity - Common Stock And Shares Held in Escrow (Details)	Dec. 31, 2018Vote$ / sharesshares	Dec. 31, 2017$ / sharesshares
Common Stock
Common stock, authorized (in shares)	1,100,000,000	1,100,000,000
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001
Common stock, issued (in shares)	100,080,228	93,969,796
Common stock, outstanding (in shares)	100,080,228	93,969,796
Common Class A
Common Stock
Common stock, authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001
Common stock, issued (in shares)	80,769,763	69,906,550
Common stock, outstanding (in shares)	80,769,763	69,906,550
Votes per share | Vote	1
Common Class B
Common Stock
Common stock, authorized (in shares)	100,000,000	100,000,000
Common stock, par value (in dollars per share) | $ / shares	$ 0.001
Common stock, issued (in shares)	19,310,465	24,063,246
Common stock, outstanding (in shares)	19,310,465	24,063,246
Votes per share | Vote	10
Common Class B | Authy, Inc.
Shares held in escrow
Shares held in escrow (in shares)		180,000

Stockholders' Equity - Common_2

Stockholders' Equity - Common Stock Shares Reserved (Details) - shares	Dec. 31, 2018	Dec. 31, 2017
Stockholders' Equity
Common stock reserved for Twilio.org	572,676
Total	39,692,245	29,689,432
2016 Stock Option and Incentive Plan
Stockholders' Equity
Stock-based awards available for grant	9,313,354	10,200,189
Common Class A
Stockholders' Equity
Common stock reserved for Twilio.org	572,676	635,014
Common stock reserved for the convertible senior notes	10,472,165
Stock Options
Stockholders' Equity
Stock options issued and outstanding	7,978,369	10,710,427
Restricted Stock Units (RSUs)
Stockholders' Equity
Nonvested restricted stock units issued and outstanding	8,262,902	5,665,459
Employee Stock
Stockholders' Equity
Stock-based awards available for grant	3,092,779	2,478,343

Stockholders' Equity - Twilio.o

Stockholders' Equity - Twilio.org (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2015
Stockholders' Equity
Twilio.org, percentage of outstanding capital stock (as a percent)			1.00%
Common stock reserved for Twilio.org	572,676
Donation of proceeds into Donor Advised Fund	$ 7.1	$ 1.2

Stock-Based Compensation - 2008

Stock-Based Compensation - 2008 Stock Option Plan (Details)	Dec. 31, 2018shares
2008 Stock Option Plan
Stock Based Compensation
Shares available for future issuance (in shares)	0

Stock-Based Compensation - 2016

Stock-Based Compensation - 2016 Stock Option Plan (Details) - shares	Jan. 01, 2018	Jan. 01, 2017	Jul. 31, 2017	Dec. 31, 2018	Jun. 21, 2016
Employee and Nonemployee Stock Options
Stock Based Compensation
Expiration term				10 years
Employee and Nonemployee Stock Options | New Hires
Stock Based Compensation
Vesting period				4 years
Employee and Nonemployee Stock Options | First vesting | New Hires
Stock Based Compensation
Vesting period				1 year
Percentage of vesting rights				25.00%
Restricted Stock Units (RSUs)
Stock Based Compensation
Vesting period			4 years
Restricted Stock Units (RSUs) | First vesting | New Hires
Stock Based Compensation
Vesting period				1 year
Percentage of vesting rights				25.00%
2016 Stock Option and Incentive Plan
Stock Based Compensation
Maximum automatic annual increase as a percentage of outstanding common shares				5.00%
Automatic increase in shares available for grant (in shares)	4,698,490	4,362,427
2016 Stock Option and Incentive Plan | Common Class A
Stock Based Compensation
Shares reserved for issuance (in shares)					11,500,000
2016 Stock Option and Incentive Plan | Employee and Nonemployee Stock Options
Stock Based Compensation
Minimum grant price as a percentage of fair market value per share of the underlying common stock on the date of grant (as a percent)				100.00%

Stock-Based Compensation - 20_2

Stock-Based Compensation - 2016 Employee Stock Purchase Plan (Details) - Employee Stock - USD ($) $ in Millions	Jan. 01, 2018	Jan. 01, 2017	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2017	Jun. 21, 2016
Stock Based Compensation
Maximum automatic annual increase (in shares)				1,800,000
Maximum automatic annual increase as a percentage of outstanding common shares				1.00%
Automatic increase in shares available for grant (in shares)	939,698	872,485
Unrecognized compensation cost, other than options				$ 2.2
Weighted-average period (in years)				4 months 24 days
Common Class A
Stock Based Compensation
Shares reserved for issuance (in shares)						2,400,000
Discount from market price, offering date (as a percent)				15.00%
Discount from market price, purchase date (as a percent)				15.00%
Purchase price, percentage of fair market value (as a percent)				85.00%
Shares purchased (in shares)				325,262	794,142
Common Class A | Forecast
Stock Based Compensation
Shares purchased (in shares)			113,312

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Option Activity (Details) - Employee and Nonemployee Stock Options - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Number of options outstanding
Outstanding options as of the beginning of the period (in shares)	10,155,427
Granted (in shares)	1,330,118
Exercised (in shares)	(3,628,032)
Forfeited and cancelled (in shares)	(434,144)
Outstanding options as of the end of the period (in shares)	7,423,369	10,155,427
Weighted-average exercise price (per share)
Outstanding options as of the beginning of the period (in dollars per share)	$ 10.31
Granted (in dollars per share)	39.77
Exercised (in dollars per share)	8.20
Forfeited and cancelled (in dollars per share)	19.70
Outstanding options as of the end of the period (in dollars per share)	$ 16.07	$ 10.31
Weighted-average remaining contractual term and aggregate intrinsic value
Weighted-average remaining contractual term (in years)	6 years 9 months 18 days	7 years 1 month 13 days
Aggregate intrinsic value	$ 543,640	$ 145,763
Options vested and exercisable and options vested and expected to vest
Options vested and exercisable - number of options outstanding (in shares)	4,529,504
Options vested and exercisable - weighted-average exercise price (in dollars per share)	$ 9.38
Options vested and exercisable - weighted-average remaining contractual term (in years)	5 years 11 months 16 days
Options vested and exercisable - aggregate intrinsic value	$ 362,017

Stock-Based Compensation - St_2

Stock-Based Compensation - Stock Options - Additional Information (Details) - Employee and Nonemployee Stock Options - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Stock Based Compensation
Aggregate intrinsic value of stock options exercised	$ 178.5	$ 132	$ 54.4
Grant date fair value of options vested	$ 21.8	$ 15.8	$ 15.3
Weighted-average grant date fair value of options granted (in dollars per share)	$ 18.40	$ 13.33	$ 5.52

Stock-Based Compensation - Perf

Stock-Based Compensation - Performance-Based Stock Options (Details)	Feb. 28, 2017USD ($)item$ / sharesshares	Dec. 31, 2018USD ($)$ / sharesshares	Dec. 31, 2017$ / sharesshares
Performance-based stock options
Stock-Based Compensation
Number of distinct awards | item	3
Total grant value | $	$ 5,900,000
Vesting period upon satisfaction of performance condition	24 months
Performance condition achievement window	4 years 3 months 18 days
Expiration term	7 years
Number of options outstanding
Outstanding options as of the beginning of the period (in shares) | shares		555,000
Granted (in shares) | shares	555,000
Outstanding options as of the end of the period (in shares) | shares		555,000	555,000
Weighted-average exercise price (per share)
Outstanding options as of the beginning of the period (in dollars per share)		$ 31.72
Outstanding options as of the end of the period (in dollars per share)		$ 31.72	$ 31.72
Weighted-average remaining contractual term
Weighted-average remaining contractual term (in years)		6 years	6 years
Options vested and exercisable
Options vested and exercisable - number of options outstanding (in shares) | shares		185,000
Options vested and exercisable - weighted-average exercise price (in dollars per share)		$ 31.72
Options vested and exercisable - weighted-average remaining contractual term (in years)		5 years 1 month 28 days
Options vested and exercisable - aggregate intrinsic value | $		$ 10,652
Performance-based stock options, $13.48 grant date fair value
Stock-Based Compensation
Grant date fair value (in dollars per share)	$ 13.48
Derived service period as adjusted	3 years 1 month 6 days
Performance-based stock options, $10.26 grant date fair value
Stock-Based Compensation
Grant date fair value (in dollars per share)	$ 10.26
Derived service period as adjusted	3 years 10 months 24 days
Performance-based stock options, $8.41 grant date fair value
Stock-Based Compensation
Grant date fair value (in dollars per share)	$ 8.41
Derived service period as adjusted	4 years 7 months 6 days

Stock-Based Compensation - St_3

Stock-Based Compensation - Stock Options - Unrecognized Compensation Cost (Details) - Stock Options $ in Millions	12 Months Ended
	Dec. 31, 2018USD ($)
Stock Based Compensation
Unrecognized compensation cost, options	$ 35.4
Weighted-average period (in years)	2 years 7 days

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Number of units outstanding
Nonvested RSUs at the beginning of the period (in shares)	5,665,459
Granted (in shares)	5,556,817
Vested (in shares)	(2,142,776)
Forfeited and cancelled (in shares)	(816,598)
Nonvested RSUs at the end of the period (in shares)	8,262,902
Weighted-average grant date fair value (per share)
Nonvested RSUs at the beginning of the period (in dollars per share)	$ 29.29
Granted (in dollars per share)	49.70
Vested (in dollars per share)	29.50
Forfeited and cancelled (in dollars per share)	31.96
Nonvested RSUs at the end of the period (in dollars per share)	$ 42.70
Aggregate intrinsic value
Aggregate intrinsic value	$ 729,373	$ 133,648

Stock-Based Compensation - Re_2

Stock-Based Compensation - Restricted Stock Units - Additional Information (Details)	12 Months Ended
	Dec. 31, 2018
Restricted Stock Units (RSUs), Pre-IPO
Stock Based Compensation
Service condition period (in years)	4 years
Restricted Stock Units (RSUs), Post-IPO
Stock Based Compensation
Service condition period (in years)	4 years

Stock-Based Compensation - Re_3

Stock-Based Compensation - Restricted Stock Units - Unrecognized Compensation Cost (Details) - Restricted Stock Units (RSUs) $ in Millions	12 Months Ended
	Dec. 31, 2018USD ($)
Stock Based Compensation
Unrecognized compensation cost, other than options	$ 325.3
Weighted-average period (in years)	3 years 11 days

Stock-Based Compensation - Valu

Stock-Based Compensation - Valuation Assumptions (Details) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Valuation Assumptions
Dividend rate (as a percent)	0.00%
Employee Stock Options
Valuation Assumptions
Expected term (in years)		6 years 29 days	6 years 29 days
Expected volatility, low end of range (as a percent)	38.60%	44.30%	51.40%
Expected volatility, high end of range (as a percent)	44.20%	47.60%	53.00%
Risk-free interest rate, low end of range (as a percent)	2.90%	1.90%	1.30%
Risk-free interest rate, high end of range (as a percent)	3.00%	2.30%	1.50%
Dividend rate (as a percent)	0.00%	0.00%	0.00%
Employee Stock
Valuation Assumptions
Expected term (in years)	6 months	6 months	10 months 24 days
Expected volatility (as a percent)			52.00%
Expected volatility, low end of range (as a percent)	39.80%	33.20%
Expected volatility, high end of range (as a percent)	47.50%	33.90%
Risk-free interest rate (as a percent)			0.60%
Risk-free interest rate, low end of range (as a percent)	2.10%	1.10%
Risk-free interest rate, high end of range (as a percent)	2.50%	1.40%
Dividend rate (as a percent)	0.00%	0.00%	0.00%
Performance-based stock options
Valuation Assumptions
Asset volatility (as a percent)	40.00%
Equity volatility (as a percent)	45.00%
Discount rate (as a percent)	14.00%
Stock price at grant date (in dollars per share)	$ 31.72
Minimum | Employee Stock Options
Valuation Assumptions
Fair value of common stock (in dollars per share)	$ 33.01	$ 23.60	$ 10.09
Expected term (in years)	1 year
Maximum | Employee Stock Options
Valuation Assumptions
Fair value of common stock (in dollars per share)	$ 76.63	$ 31.96	$ 15
Expected term (in years)	6 years 29 days

Stock-Based Compensation - St_4

Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Stock-Based Compensation Expense
Stock-based compensation expense	$ 93,273	$ 49,619	$ 24,225
Cost of revenue
Stock-Based Compensation Expense
Stock-based compensation expense	1,126	650	291
Research and development
Stock-Based Compensation Expense
Stock-based compensation expense	42,277	22,808	12,946
Sales and marketing
Stock-Based Compensation Expense
Stock-based compensation expense	23,616	9,822	4,972
General and administrative
Stock-Based Compensation Expense
Stock-based compensation expense	$ 26,254	$ 16,339	$ 6,016

Net Loss Per Share Attributab_3

Net Loss Per Share Attributable to Common Stockholders - Basic and Diluted Net Loss per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Net Loss Per Share Attributable to Common Stockholders
Net loss attributable to common stockholders	$ (121,949)	$ (63,708)	$ (41,324)
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted (in shares)	97,130,339	91,224,607	53,116,675
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share)	$ (1.26)	$ (0.70)	$ (0.78)

Net Loss Per Share Attributab_4

Net Loss Per Share Attributable to Common Stockholders - Anti-Dilutive Securities (Details) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	May 31, 2018
Anti-dilutive securities
Total	16,829,742	17,251,486	18,010,508
Convertible senior notes, 0.25%, due 2023
Anti-dilutive securities
Conversion price of the notes	$ 70.90			$ 70.90
Stock Options
Anti-dilutive securities
Total	7,978,369	10,710,427	14,649,276
Restricted Stock Units (RSUs)
Anti-dilutive securities
Total	8,262,902	5,665,459	2,034,217
Class A common stock reserved for Twilio.org
Anti-dilutive securities
Total	572,676	635,014	680,397
Employee Stock
Anti-dilutive securities
Total	113,312	235,372	597,038
Conversion spread
Anti-dilutive securities
Total	233
Unvested shares subject to repurchase
Anti-dilutive securities
Total	1,250	5,214	49,580

Income Taxes - Domestic and For

Income Taxes - Domestic and Foreign Components of Loss Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Taxes
United States	$ (96,448)	$ (46,737)	$ (14,002)
International	(24,710)	(16,266)	(26,996)
Loss before provision for income taxes	$ (121,158)	$ (63,003)	$ (40,998)

Income Taxes - Provision for In

Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current:
Federal		$ 99
State	$ 139	78	$ 83
Foreign	881	823	214
Total	1,020	1,000	297
Deferred:
Federal	29	28	2
State	19	10
Foreign	(277)	(333)	27
Total	(229)	(295)	29
Provision for income taxes	$ 791	$ 705	$ 326

Income Taxes - Reconciliation o

Income Taxes - Reconciliation of the Statutory Federal Tax Rate and the Effective Tax Rate (Details)	Jan. 01, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Taxes
Tax benefit at federal statutory rate	21.00%	21.00%	34.00%	34.00%
State tax, net of federal benefit		15.00%	10.00%	11.00%
Stock-based compensation		31.00%	47.00%	23.00%
Credits		8.00%	8.00%	2.00%
Foreign rate differential		(4.00%)	(8.00%)	(23.00%)
Reserve for uncertain tax positions				(12.00%)
Change in valuation allowance		(68.00%)	(46.00%)	(34.00%)
Change in federal statutory rate			(45.00%)
Other		(3.00%)	(1.00%)	(2.00%)
Effective tax rate		0.00%	(1.00%)	(1.00%)

Income Taxes - Significant Comp

Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
Net operating loss carryforwards	$ 116,190	$ 56,138	$ 31,090
Accrued and prepaid expenses	11,594	9,140	16,698
Stock-based compensation	11,147	7,131	5,368
Research and development credits	32,206	16,212	7,807
Charitable contributions	3,100	1,233	1,458
Capped call	13,175
Debt issuance cost	638
Other	194	472
Gross deferred tax assets	188,244	90,326	62,421
Valuation allowance	(147,354)	(78,900)	(49,601)
Net deferred tax assets	40,890	11,426	12,820
Deferred tax liabilities:
Capitalized software	(10,686)	(7,664)	(7,086)
Prepaid expenses	(838)	(1,015)	(452)
Acquired intangibles	(2,997)	(2,101)	(152)
Property and equipment	(1,990)	(2,380)	(4,931)
Convertible debt	(27,164)
Deferred commissions	(2,396)	(718)	(201)
Net deferred tax asset (liability)	$ (5,181)	$ (2,452)	$ (2)

Income Taxes - Net Operating Lo

Income Taxes - Net Operating Loss Carryforwards (Details) $ in Millions	Dec. 31, 2018USD ($)
Federal
Income Taxes
Net operating loss carryforwards	$ 452.7
State
Income Taxes
Net operating loss carryforwards	347.1
Foreign
Income Taxes
Net operating loss carryforwards	$ 8.1

Income Taxes - Tax Credits (Det

Income Taxes - Tax Credits (Details) $ in Millions	Dec. 31, 2018USD ($)
Federal
Income Taxes
Tax credits	$ 26.7
State
Income Taxes
Tax credits	$ 19.9

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Income Taxes
Increase in valuation allowance	$ 68.5	$ 29.3

Income Taxes - Unrecognized Tax

Income Taxes - Unrecognized Tax Benefits - Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Taxes
Unrecognized tax benefit, beginning of year	$ 9,445	$ 12,275	$ 1,679
Gross increases for tax positions of prior years	1,233	493	1,996
Gross decrease for tax positions of prior years	(4)	(6,331)
Gross increases for tax positions of current years	4,961	3,008	8,600
Unrecognized tax benefit, end of year	$ 15,635	$ 9,445	$ 12,275

Income Taxes - Unrecognized T_2

Income Taxes - Unrecognized Tax Benefit - Additional Information (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Taxes
Unrecognized tax benefits	$ 15,635	$ 9,445	$ 12,275	$ 1,679
Unrecognized tax benefit that would impact the effective tax rate if recognized	900
Accumulated interest and penalties related to uncertain tax positions	$ 100

Income Taxes - Tax Cuts and Job

Income Taxes - Tax Cuts and Jobs Act (Details) - USD ($) $ in Millions	Jan. 01, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Tax Cuts and Jobs Act
U.S. corporate income tax rate (as a percent)	21.00%	21.00%	34.00%	34.00%
Decrease to federal deferred tax assets			$ 28
Decrease to deferred tax assets valuation allowance			$ 28

Subsequent Events (Details)

Subsequent Events (Details) - SendGrid shares in Millions, $ in Millions	Feb. 01, 2019USD ($)shares	Dec. 31, 2018USD ($)
Subsequent Events
Acquisition related costs		$ 3.6
Subsequent Events | Common Class A
Subsequent Events
Shares issued for acquisition (in shares) | shares	23.4
Value of shares issued for acquisition	$ 2,600
Ratio to convert acquiree shares into the Company's common stock	0.485