Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-36456 | |
Entity Registrant Name | ZENDESK, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-4411091 | |
Entity Address, Address Line One | 989 Market Street | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94103 | |
City Area Code | 415 | |
Local Phone Number | 418-7506 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | ZEN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Smaller Reporting Company | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 122,543,331 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001463172 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 496,039 | $ 476,103 |
Marketable securities | 602,591 | 539,780 |
Accounts receivable, net of allowance for credit losses of $6,923 and $6,190 as of March 31, 2022 and December 31, 2021, respectively | 224,146 | 273,898 |
Deferred costs | 76,818 | 72,042 |
Prepaid expenses and other current assets | 73,455 | 56,809 |
Total current assets | 1,473,049 | 1,418,632 |
Marketable securities, noncurrent | 491,682 | 559,652 |
Property and equipment, net | 99,556 | 97,815 |
Deferred costs, noncurrent | 74,895 | 72,553 |
Lease right-of-use assets | 67,671 | 69,936 |
Goodwill and intangible assets, net | 195,279 | 197,098 |
Other assets | 35,595 | 35,593 |
Total assets | 2,437,727 | 2,451,279 |
Current liabilities: | ||
Accounts payable | 31,185 | 49,213 |
Accrued liabilities | 51,521 | 50,075 |
Accrued compensation and related benefits | 133,368 | 138,127 |
Deferred revenue | 522,532 | 512,933 |
Lease liabilities | 20,503 | 21,253 |
Current portion of convertible senior notes, net | 148,508 | 139,738 |
Total current liabilities | 907,617 | 911,339 |
Convertible senior notes, net | 1,136,378 | 979,350 |
Deferred revenue, noncurrent | 3,988 | 4,277 |
Lease liabilities, noncurrent | 59,180 | 63,212 |
Other liabilities | 3,464 | 3,883 |
Total liabilities | 2,110,627 | 1,962,061 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Preferred stock | 0 | 0 |
Common stock | 1,223 | 1,215 |
Additional paid-in capital | 1,465,489 | 1,637,157 |
Accumulated other comprehensive loss | (13,537) | (8,911) |
Accumulated deficit | (1,126,075) | (1,140,243) |
Total stockholders’ equity | 327,100 | 489,218 |
Total liabilities and stockholders’ equity | $ 2,437,727 | $ 2,451,279 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 6,923 | $ 6,190 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Income Statement [Abstract] | |||
Revenue | $ 388,327 | $ 298,048 | |
Cost of revenue | [1] | 75,678 | 60,894 |
Gross profit | 312,649 | 237,154 | |
Operating expenses: | |||
Research and development | [1] | 108,077 | 73,783 |
Sales and marketing | [1] | 201,660 | 157,518 |
General and administrative | [1] | 63,538 | 43,133 |
Total operating expenses | [1] | 373,275 | 274,434 |
Operating loss | (60,626) | (37,280) | |
Other income (expense), net: | |||
Interest expense | (3,121) | (14,415) | |
Interest and other income (expense), net | 838 | 5,084 | |
Total other income (expense), net | (2,283) | (9,331) | |
Loss before provision for income taxes | (62,909) | (46,611) | |
Provision for income taxes | 4,037 | 2,354 | |
Net loss | $ (66,946) | $ (48,965) | |
Net loss per share, basic (in usd per share) | $ (0.55) | $ (0.42) | |
Net loss per share, diluted (in usd per share) | $ (0.55) | $ (0.42) | |
Weighted-average shares used to compute net loss per share, basic (in shares) | 121,962 | 117,912 | |
Weighted-average shares used to compute net loss per share, diluted (in shares) | 121,962 | 117,912 | |
[1] | Includes share-based compensation expense as follows: Three Months Ended 2022 2021 Cost of revenue $ 6,177 $ 4,486 Research and development 19,287 15,673 Sales and marketing 26,800 23,232 General and administrative 11,674 8,983 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based compensation | $ 63,938 | $ 52,374 |
Cost of revenue | ||
Share-based compensation | 6,177 | 4,486 |
Research and development | ||
Share-based compensation | 19,287 | 15,673 |
Sales and marketing | ||
Share-based compensation | 26,800 | 23,232 |
General and administrative | ||
Share-based compensation | $ 11,674 | $ 8,983 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (66,946) | $ (48,965) |
Other comprehensive loss: | ||
Net unrealized loss on available-for-sale investments | (11,905) | (1,975) |
Net unrealized gain (loss) on derivative instruments | 7,327 | (5,557) |
Other comprehensive loss | (4,578) | (7,532) |
Comprehensive loss | $ (71,524) | $ (56,497) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative effect, period of adoption, adjustment | Common Stock | Additional Paid-In Capital | Additional Paid-In CapitalCumulative effect, period of adoption, adjustment | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Accumulated DeficitCumulative effect, period of adoption, adjustment |
Balances at beginning of period (in shares) at Dec. 31, 2020 | 117,489 | |||||||
Balances at beginning of period at Dec. 31, 2020 | $ 431,831 | $ 1,174 | $ 1,344,337 | $ 3,203 | $ (916,883) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock upon exercise of stock options (in shares) | 208 | |||||||
Issuance of common stock upon exercise of stock options | 3,931 | $ 2 | 3,929 | |||||
Issuance of common stock for settlement of RSUs and PRSUs (in shares) | 661 | |||||||
Issuance of common stock for settlement of RSUs and PRSUs | (2,799) | $ 7 | (2,806) | |||||
Share-based compensation | 53,554 | 53,554 | ||||||
Other comprehensive loss | (7,532) | (7,532) | ||||||
Net loss | (48,965) | (48,965) | ||||||
Other | 223 | 223 | ||||||
Balances at end of period (in shares) at Mar. 31, 2021 | 118,358 | |||||||
Balances at end of period at Mar. 31, 2021 | 430,243 | $ 1,183 | 1,399,014 | (4,329) | (965,625) | |||
Balances at beginning of period (in shares) at Dec. 31, 2020 | 117,489 | |||||||
Balances at beginning of period at Dec. 31, 2020 | $ 431,831 | $ 1,174 | 1,344,337 | 3,203 | (916,883) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting standards update | Accounting Standards Update 2020-06 | |||||||
Balances at end of period (in shares) at Dec. 31, 2021 | 121,598 | |||||||
Balances at end of period at Dec. 31, 2021 | $ 489,218 | $ (164,576) | $ 1,215 | 1,637,157 | $ (245,690) | (8,911) | (1,140,243) | $ 81,114 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock upon exercise of stock options (in shares) | 335 | 335 | ||||||
Issuance of common stock upon exercise of stock options | $ 10,816 | $ 3 | 10,813 | |||||
Issuance of common stock for settlement of RSUs and PRSUs (in shares) | 436 | |||||||
Issuance of common stock for settlement of RSUs and PRSUs | (1,695) | $ 4 | (1,699) | |||||
Share-based compensation | 64,908 | 64,908 | ||||||
Other comprehensive loss | (4,578) | (4,578) | ||||||
Net loss | (66,946) | (66,946) | ||||||
Other | (48) | (48) | ||||||
Balances at end of period (in shares) at Mar. 31, 2022 | 122,369 | |||||||
Balances at end of period at Mar. 31, 2022 | $ 327,100 | $ 1,223 | $ 1,465,489 | $ (13,537) | $ (1,126,075) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (66,946) | $ (48,965) |
Adjustments to reconcile net loss to net cash provided by operating activities | ||
Depreciation and amortization | 10,317 | 9,515 |
Share-based compensation | 63,938 | 52,374 |
Amortization of deferred costs | 20,325 | 14,757 |
Amortization of debt discount and issuance costs | 1,221 | 12,525 |
Allowance for credit losses on accounts receivable | 2,309 | 3,168 |
Other, net | 2,815 | (965) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 47,992 | 16,370 |
Prepaid expenses and other current assets | (12,574) | (467) |
Deferred costs | (26,876) | (20,984) |
Lease right-of-use assets | 4,632 | 4,464 |
Other assets and liabilities | (488) | 316 |
Accounts payable | (17,805) | 5,797 |
Accrued liabilities | 3,679 | (2,078) |
Accrued compensation and related benefits | (22,585) | (20,113) |
Deferred revenue | 7,832 | 13,419 |
Lease liabilities | (6,574) | (5,538) |
Net cash provided by operating activities | 11,212 | 33,595 |
Cash flows from investing activities | ||
Purchases of property and equipment | (7,438) | (3,061) |
Internal-use software development costs | (3,016) | (4,468) |
Purchases of marketable securities | (166,206) | (305,310) |
Proceeds from maturities of marketable securities | 118,329 | 198,564 |
Proceeds from sales of marketable securities | 39,763 | 36,599 |
Net cash used in investing activities | (18,568) | (77,676) |
Cash flows from financing activities | ||
Proceeds from exercises of employee stock options | 10,817 | 3,931 |
Proceeds from employee stock purchase plan | 17,826 | 15,184 |
Taxes paid related to net share settlement of share-based awards | (1,694) | (2,800) |
Net cash provided by financing activities | 26,949 | 16,315 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (14) | (8) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 19,579 | (27,774) |
Cash, cash equivalents and restricted cash at beginning of period | 477,350 | 407,859 |
Cash, cash equivalents and restricted cash at end of period | 496,929 | 380,085 |
Reconciliation of cash, cash equivalents and restricted cash to condensed consolidated balance sheets | ||
Cash and cash equivalents | 496,039 | 378,363 |
Restricted cash included in prepaid expenses and other current assets | 890 | 1,717 |
Restricted cash included in other assets | 0 | 5 |
Total cash, cash equivalents and restricted cash | 496,929 | 380,085 |
Supplemental cash flow data | ||
Cash paid for interest | 186 | 186 |
Cash paid for taxes | 2,719 | 2,416 |
Non-cash investing and financing activities | ||
Balance of property and equipment in accounts payable and accrued expenses | 3,994 | 1,078 |
Property and equipment acquired through tenant improvement allowances | 1,208 | 0 |
Internal-use software development costs | ||
Non-cash investing and financing activities | ||
Share-based compensation capitalized in internal-use software development costs and in deferred costs | 402 | 562 |
Deferred costs | ||
Non-cash investing and financing activities | ||
Share-based compensation capitalized in internal-use software development costs and in deferred costs | $ 567 | $ 616 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview and Basis of Presentation | Overview and Basis of Presentation Company and Background Zendesk was founded in Denmark in 2007 and reincorporated in Delaware in April 2009. We are a software development company that provides software as a service, or SaaS, solutions that are intended to help organizations and their customers build better experiences. Our customer experience solutions are built upon a modern architecture that enables us and our customers to rapidly innovate, adapt our technology in novel ways, and easily integrate with other products and applications. With our origins in customer service, we have evolved our offerings over time to product and platform solutions that work together to help organizations understand the broader customer journey, improve communications across all channels, and engage where and when it’s needed most. References to Zendesk, the “Company,” “our,” or “we” in these notes refer to Zendesk, Inc. and its subsidiaries on a consolidated basis. Basis of Presentation These unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K, for the year ended December 31, 2021, filed with the SEC on February 15, 2022. There have been no changes to our significant accounting policies described in the Annual Report on Form 10-K that have had a material impact on our condensed consolidated financial statements and related notes, except for the methodology to value market-based stock awards described in footnote 10 and the accounting for convertible debt instruments described below. The consolidated balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date. The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly our financial position, results of operations, comprehensive loss, stockholders’ equity, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2022. Use of Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, 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, as well as the reported amounts of revenue and expenses during the reported periods. Significant items subject to such estimates and assumptions include: • the estimate of variable consideration related to revenue recognition; • the estimate of credit losses for accounts receivable and marketable securities; • the fair value and useful lives of acquired intangible assets; • the capitalization and useful life of capitalized costs to obtain customer contracts; • the valuation of strategic investments; • the fair value and useful lives of property and equipment; • the capitalization and useful lives of internal-use software; • the lease term and incremental borrowing rate for lease liabilities; • the fair value of our convertible senior notes; • the fair value of asset retirement obligations; • the fair value and expense recognition for certain share-based awards; • the preparation of financial forecasts used in currency hedging; • the recognition and measurement of legal contingencies; and • the recognition of tax benefits and forecasts used to determine our effective tax rate. As of the date of issuance of the financial statements, we are not aware of any material specific events or circumstances that would require us to update our estimates, judgments, or to revise the carrying values of our assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements. Concentrations of Risk As of March 31, 2022 and December 31, 2021, no customers represented 10% or greater of our total accounts receivable balance. There were no customers that individually exceeded 10% of our revenue during the three months ended March 31, 2022 or 2021. Recently Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2020-06 ("ASU 2020-06"), regarding ASC Topic 470 “ Debt ” and ASC Topic 815 “ Derivatives and Hedging ,” which reduces the number of accounting models for convertible instruments, including amending the calculation of diluted earnings per share and the balance sheet presentation of those instruments, as well as the resulting recognition of interest expense, among other changes. We adopted this standard as of January 1, 2022 using the modified retrospective method. Adoption under the modified retrospective method impacted the 2023 Notes and 2025 Notes outstanding as of January 1, 2022, and resulted in the re-combination of the liability and equity components of each instrument into a single liability instrument measured at amortized cost. As a result, at transition the Company recorded a $246 million decrease to additional paid-in-capital, net of income tax effects, to remove the equity component separately recorded for the conversion features associated with the Notes, a $165 million increase to the total carrying value of the Notes, to reflect the full principal amount of the Notes outstanding net of issuance costs, and a $81 million cumulative effect decrease to the beginning balance of accumulated deficit, net of income tax effects. Interest expense recognized in future periods will be reduced as a result of accounting for each instrument as a single liability measured at amortized cost. In addition, the ASU also requires the use of the if-converted method in calculating diluted earnings per share for convertible instruments. Since the Company had a net loss for the three months ended March 31, 2022, the convertible senior notes were determined to be anti-dilutive and therefore had no impact to basic or diluted net loss per share for the period as a result of adopting ASU 2020-06. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Cleverly, Lda. In the third quarter of 2021, we completed the acquisition of Cleverly, Lda., or Cleverly, resulting in increases of $7 million and $1 million to goodwill and developed technology, respectively. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Financial Instruments Investments The following tables present information about our financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): Fair Value Measurement at Level 1 Level 2 Total Description U.S. Treasury securities $ — $ 485,959 $ 485,959 Corporate bonds — 420,271 420,271 Money market funds 223,448 — 223,448 Asset-backed securities — 93,704 93,704 Agency securities — 48,272 48,272 Commercial paper — 47,569 47,569 Certificates of deposit and time deposits — 9,396 9,396 Total $ 223,448 $ 1,105,171 $ 1,328,619 Included in cash and cash equivalents $ 234,346 Included in marketable securities $ 1,094,273 Fair Value Measurement at Level 1 Level 2 Total Description U.S. Treasury securities $ — $ 480,726 $ 480,726 Corporate bonds — 430,018 430,018 Money market funds 234,123 — 234,123 Asset-backed securities — 93,620 93,620 Agency securities — 50,057 50,057 Commercial paper — 48,950 48,950 Certificates of deposit and time deposits — 1,488 1,488 Total $ 234,123 $ 1,104,859 $ 1,338,982 Included in cash and cash equivalents $ 239,550 Included in marketable securities $ 1,099,432 As of March 31, 2022 and December 31, 2021, there were no securities within Level 3 of the fair value hierarchy. There were no transfers between fair value measurement levels during the three months ended March 31, 2022 or 2021. As of March 31, 2022, gross unrealized gains and gross unrealized losses for marketable securities wer e not material and $14 million, respectively. The aggregate amortized cost basis for cash equivalents and marketable securities was $1,342 million and excludes accrued interest of $3 million. The aggregate fair value of securities with unrealized losses was $947 million. As of December 31, 2021, gross unrealized gains and gross unrealized losses for marketable securities were $1 million and $3 million, respectively. The aggregate amortized cost basis for cash equivalents and marketable securities was $1,341 million and excludes accrued interest of $3 million. The aggregate fair value of securities with unrealized losses was $795 million. Unrealized losses for securities that have been in an unrealized loss position for more than 12 months as of March 31, 2022 and December 31, 2021 were not material. We have not recorded an allowance for credit losses, as we believe any such losses would be immaterial based on the high-grade credit rating for each of our marketable securities as of the end of each period. We intend to hold our marketable securities to maturity and it is unlikely that they would be sold before their cost bases are recovered. The following table classifies our marketable securities by contractual maturity (in thousands): March 31, December 31, Due in one year or less $ 602,591 $ 539,780 Due after one year and within five years 491,682 559,652 Total $ 1,094,273 $ 1,099,432 As of March 31, 2022 and December 31, 2021, the balance of strategic investments without readily determinable fair values was $16 million. There have been no adjustments to the carrying values of strategic investments resulting from impairments or observable price changes. For our other financial instruments, including accounts receivable, accounts payable, and other current liabilities, the carrying amounts approximate their fair values due to the relatively short maturity of these balances. Derivative Instruments and Hedging Our foreign currency exposures typically arise from expenditures associated with foreign operations and sales in foreign currencies of our products. To mitigate the effect of foreign currency fluctuations on our future cash flows and earnings, we enter into foreign currency forward contracts with certain financial institutions and designate those contracts as cash flow hedges. Our foreign currency forward contracts generally have maturities of 15 months or less. We include time value related to our cash flow hedges for effectiveness testing purposes and the entire change in the unrecognized value of our hedge contracts is recorded in accumulated other comprehensive income (loss), or AOCI. As of March 31, 2022, the balance of AOCI include d an unrecognized net gain of $5 million related to the changes in the fair value of foreign currency forward contracts designated as cash flow hedges. We expect to reclassify a net gain of $5 million into earnings over the next 12 months associated with our cash flow hedges. The following tables present information about our derivative instruments on our consolidated balance sheets (in thousands): March 31, 2022 Asset Derivatives Liability Derivatives Derivative Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Foreign currency forward contracts Other current assets $ 10,864 Accrued liabilities $ 7,867 Total $ 10,864 $ 7,867 December 31, 2021 Asset Derivatives Liability Derivatives Derivative Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Foreign currency forward contracts Other current assets $ 6,439 Accrued liabilities $ 9,422 Total $ 6,439 $ 9,422 Our foreign currency forward contracts had a total notional value of $505 million and $488 million as of March 31, 2022 and December 31, 2021, respectively. We have a master netting arrangement with each of our counterparties, which permit net settlement of multiple, separate derivative contracts with a single payment. We do not have collateral requirements with any of our counterparties. GAAP permits companies to present the fair value of derivative instruments on a net basis according to master netting arrangements. We have elected to present our derivative instruments on a gross basis in our consolidated financial statements. We do not enter into any derivative contracts for trading or speculative purposes. All derivatives have been designated as hedging instruments. The following table presents information about our foreign currency forward contracts on our consolidated statements of operations for the three months ended March 31, 2022 and 2021 (in thousands): Gain (Loss) Reclassified from AOCI into Earnings Three Months Ended March 31, Classification 2022 2021 Revenue $ 794 $ (708) Cost of revenue (505) 490 Research and development (674) 515 Sales and marketing (1,236) 1,029 General and administrative (393) 417 Total $ (2,014) $ 1,743 Th e gain r ecognized in AOCI related to foreign currency forward contracts was $5 million for the three months ended March 31, 2022. The loss recognized in AOCI related to foreign currency forward contracts was $4 million for the three months ended March 31, 2021. The cash flow effects related to foreign currency forward contracts are included within operating activities on our consolidated statements of cash flows. Convertible Senior Notes As of March 31, 2022, the fair values of our 0.25% convertible senior notes due 2023 and our 0.625% convertible senior notes due 2025 were $287 million and $1,397 million, respectively. We estimate the fair value of our convertible senior notes based on their last traded prices or market observable inputs, resulting in a Level 2 classification in the fair value hierarchy. Based on the closing price of our common stock of $120.29 on the last trading day of the quarter, the if-converted values of the 2023 and 2025 convertible senior notes exceeded their remaining principal amounts by $135 million and $122 million, respectively, as of March 31, 2022. |
Costs to Obtain Customer Contra
Costs to Obtain Customer Contracts | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Costs to Obtain Customer Contracts | Costs to Obtain Customer ContractsThe balance of deferred costs to obtain customer contracts was $152 million and $145 million as of March 31, 2022 and December 31, 2021, respectively. Amortization expense for deferred costs was $20 million and $15 million for the three months ended March 31, 2022 and 2021, respectively. There were no impairment losses related to deferred costs for the periods presented.Deferred Revenue and Performance Obligations The changes in the balances of deferred revenue are as follows (in thousands): Three Months Ended March 31, 2022 2021 Balance, beginning of period $ 517,210 $ 383,358 Billings 397,637 311,212 Subscription and services revenue (364,376) (282,839) Other revenue* (23,951) (15,209) Balance, end of period $ 526,520 $ 396,522 *Other revenue primarily includes implementation and training services, usage-based revenue, and amounts from contract assets. For the three months ended March 31, 2022 and 2021, the majority of revenue recognized was from the deferred revenue balances at the beginning of each period. When revenue is recognized in advance of invoicing we record contract assets, which are included in prepaid expenses and other current assets on our consolidated balance sheets. As of March 31, 2022 and December 31, 2021, the balance of contract assets was $5 million and $4 million, respectively. The aggregate balance of remaining performance obligations as of March 31, 2022 was $1,359 million. We expect to recognize $915 million of the balance as revenue in the next 12 months and the substantial majority of the remainder in the next 13-36 months. The aggregate balance of remaining performance obligations represents contracted revenue that has not yet been recognized, including contracted revenue from renewals, and does not include contract amounts which are cancellable by the customer and amounts associated with optional renewal periods. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net consists of the following (in thousands): March 31, December 31, Leasehold improvements $ 83,428 $ 79,661 Capitalized internal-use software 58,135 58,135 Computer equipment and licensed software and patents 42,690 41,512 Furniture and fixtures 15,265 14,627 Construction in progress 23,793 20,927 Total 223,311 214,862 Less: accumulated depreciation and amortization (123,755) (117,047) Property and equipment, net $ 99,556 $ 97,815 Depreciation expense was $6 million for each of the three months ended March 31, 2022 and 2021. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The following table presents information about leases on our consolidated balance sheets (in thousands): March 31, 2022 December 31, 2021 Assets Lease right-of-use assets $ 67,671 $ 69,936 Liabilities Lease liabilities 20,503 21,253 Lease liabilities, noncurrent 59,180 63,212 As of March 31, 2022, the weighted average remaining lease term was 5.6 years and the weighted average discount rate was 4.7%. The following table presents information about leases on our consolidated statements of operations (in thousands): Three Months Ended March 31, 2022 2021 Operating lease expense $ 5,581 $ 5,622 Short-term lease expense 120 128 Variable lease expense 1,432 1,218 Sublease income (361) (440) The following table presents supplemental cash flow information about our leases (in thousands): Three Months Ended March 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities $ 7,447 $ 6,953 Operating lease assets obtained in exchange for new lease liabilities 2,754 1,397 |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets Acquired intangible assets subject to amortization consist of the following (in thousands): As of March 31, 2022 Cost Accumulated Net Weighted Average Remaining Useful Life (In years) Developed technology $ 28,000 $ (14,911) $ 13,089 2.8 Customer relationships 14,300 (8,875) 5,425 3.1 $ 42,300 $ (23,786) $ 18,514 As of December 31, 2021 Cost Accumulated Net Weighted Average Remaining Useful Life (In years) Developed technology $ 28,000 $ (13,734) $ 14,266 3.0 Customer relationships 14,300 (8,233) 6,067 3.2 $ 42,300 $ (21,967) $ 20,333 Amortization expense of acquired intangible assets was $2 million for each of the three months ended March 31, 2022 and 2021. Estimated future amortization expense as of March 31, 2022 is as follows (in thousands): Remainder of 2022 $ 5,478 2023 6,579 2024 4,837 2025 972 2026 488 Thereafter 160 $ 18,514 |
Convertible Senior Notes
Convertible Senior Notes | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes 2025 Convertible Senior Notes In June 2020, we issued $1,150 million aggregate principal amount of 0.625% convertible senior notes due June 15, 2025 in a private offerin g , the “2025 Notes.” The 2025 Notes are senior unsecured obligations and bear interest at a fixed rate of 0.625% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, commencing on D ecember 15, 2020. The total net pr oceeds from the offering, after deducting initial purchase discounts and estimated debt issuance costs, were approxim ately $1,129 million. Each $1,000 principal amount of the 2025 Notes will initially be convertible into 9.1944 shares of our common stock, which is equivalent to an initial conversion price of approximately $108.76 per share, subject to adjustment upon the occurrence of specified events. The 2025 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding March 15, 2025, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five On or after March 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2025 Notes, in minimum denominations of $1,000 or an integral multiple in excess thereof, at the option of the holders regardless of the foregoing circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. If certain specified fundamental changes occur (as set forth in the indenture) prior to the maturity date, holders of the 2025 Notes may require us to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if specific corporate events occur prior to the applicable maturity date or if we deliver a notice of redemption, we will increase the conversion rate for a holder who elects to convert their notes in connection with such a corporate event or converts its notes called (or deemed called) for redemption in connection with such notice of redemption in certain circumstances. During the three months ended March 31, 2022, the conditions allowing holders of the 2025 Notes to convert were not met. As the criteria for conversion were not met, the 2025 Notes are classified as a long-term liability as of March 31, 2022. We may not redeem the 2025 Notes prior to June 20, 2023. We may redeem for cash all or any portion of the 2025 Notes, at our option, on or after June 20, 2023 and on or prior to the 41st scheduled trading day immediately preceding the maturity date, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption, at a redemption price equal to 100% of the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2025 Notes. As described in Note 1, we adopted ASU 2020-06 effective January 1, 2022 on a modified retrospective basis, under which prior-period information was not retrospectively adjusted. Prior to the adoption of ASU 2020-06, in accounting for the transaction, the 2025 Notes were separated 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 fair value of the liability component was estimated by calculating the present value of expected cash flows using an interest rate that reflects our incremental borrowing rate, with an estimated adjustment for our credit standing on nonconvertible debt with similar maturity. The carrying amount of the equity component representing the conversion option was $220 million and was determined by deducting the fair value of the liability component from the par value of the 2025 Notes. The equity component was recorded in additional paid-in capital upon issuance. The excess of the principal amount of the liability component over its carrying amount was amortized to interest expense over the contractual term of the 2025 Notes at an effective interest rate of 5.00%. Additionally, in accounting for the debt issuance costs of $21 million related to the 2025 Notes, we allocated the total amount incurred to the liability and equity components of the 2025 Notes based on their relative values. Issuance costs attributable to the liability component were $17 million and were amortized to interest expense using the effective interest method over the contractual term of the 2025 Notes. Issuance costs attributable to the equity component were netted with the equity component in additional paid-in capital. Upon adoption of ASU 2020-06 on January 1, 2022, we recombined the liability and equity components of the 2025 Notes, assuming that the instrument was accounted for as a single liability from inception to the date of adoption. We similarly recombined the liability and equity components of the issuance costs. The issuance costs are amortized to interest expense using the effective interest method over the contractual term of the 2025 Notes at an effective interest rate of 1.00%. The net carrying amount of the liability component of the 2025 Notes is as follows (in thousands): March 31, December 31, Principal $ 1,150,000 $ 1,150,000 Unamortized debt discount — (157,983) Unamortized issuance costs (13,622) (12,667) Net carrying amount $ 1,136,378 $ 979,350 The net carrying amount of the equity component of the 2025 Notes is as follows (in thousands): March 31, December 31, Debt discount for conversion option $ — $ 220,061 Issuance costs — (4,035) Net carrying amount $ — $ 216,026 The interest expense related to the 2025 Notes is as follows (in thousands): Three Months Ended March 31, 2022 2021 Contractual interest expense $ 1,797 $ 1,797 Amortization of debt discount — 10,029 Amortization of issuance costs 1,043 697 Total interest expense $ 2,840 $ 12,523 Prior to the adoption of ASU 2020-06, the difference between the book and tax treatment of the debt discount and debt issuance costs of the 2025 Notes resulted in a difference between the carrying amount and tax basis of the 2025 Notes. This taxable temporary difference resulted in the recognition of a $51 million net deferred tax liability which was recorded as an adjustment to additional paid-in capital. The creation of the deferred tax liability represented a source of future taxable income which supported the realization of deferred tax assets. As we continued to maintain a full valuation allowance against these deferred tax assets, this additional source of income resulted in the release of a portion of the valuation allowance. Consistent with the adoption of ASU 2019-12 in the second quarter of 2020, the release of the valuation allowance of $51 million was recorded as an adjustment to additional paid-in capital. As of January 1, 2022, the unamortized balance of this net deferred tax liability was $36 million, which was derecognized upon adoption of ASU 2020-06. Both the reduction to the net deferred tax liability and the offsetting increase to our valuation allowance were recorded to additional paid-in capital. 2025 Capped Calls In connection with the pricing of the 2025 Notes, we entered into privately negotiated capped call transactions with certain counterparties, the “2025 Capped Calls.” The 2025 Capped Calls each have an initial strike price of approximately $108.76 per share, subject to certain adjustments, which correspond to the initial conversion price of the 2025 Notes. The 2025 Capped Calls have initial cap prices of $164.17 per share, subject to certain adjustments. The 2025 Capped Calls cover, subject to anti-dilution adjustments, approximately 10.6 million shares of our common stock. Conditions that cause adjustments to the initial strike price of the 2025 Capped Calls are similar to the conditions that result in corresponding adjustments for the 2025 Notes. The 2025 Capped Calls are generally intended to reduce or offset the potential dilution to our common stock upon any conversion of the 2025 Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. For accounting purposes, the 2025 Capped Calls are separate transactions, and not part of the terms of the 2025 Notes. As these transactions meet certain accounting criteria, the 2025 Capped Calls are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $130 million incurred in connection with the 2025 Capped Calls was recorded as a reduction to additional paid-in capital. 2023 Convertible Senior Notes In March 2018, we issued $575 million aggregate principal amount of 0.25% convertible senior notes due March 15, 2023 in a private offering, the “2023 Notes.” The 2023 Notes are unsecured obligations and bear interest at a fixed rate of 0.25% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, commencing on September 15, 2018. The total net proceeds from the offering, after deducting initial purchase discounts and estimated debt issuance costs, were approximately $561 million. In connection with the offering of the 2025 Notes, we used $618 million of the net proceeds from the offering of the 2025 Notes to repurchase $426 million aggregate principal amount of the 2023 Notes in cash through individual privately negotiated transactions, the “2023 Notes Partial Repurchase.” Pursuant to ASC Subtopic 470-20 under existing accounting rules prior to adoption of ASU 2020-06, total consideration for the repurchase was separated into liability and equity components. Of the $618 million consideration, $393 million and $225 million were allocated to the debt and equity components on our consolidated balance sheets, respectively, utilizing an effective interest rate to determine the fair value of the liability component. The fair value of the liability component was estimated by calculating the present value of expected cash flows using an interest rate that reflects our incremental borrowing rate, with an estimated adjustment for our credit standing on nonconvertible debt with similar maturity. As of the repurchase date, the carrying value of the 2023 Notes subject to the 2023 Notes Partial Repurchase, net of unamortized debt discount and issuance costs, was $367 million. The 2023 Notes Partial Repurchase resulted in a $26 million loss on early debt extinguishment. Additionally, $39 million of the total consideration was related to repayment of the debt discount and reflected as a cash outflow from operating activities. As of March 31, 2022, $149 million of principal remains outstanding on the 2023 Notes. Each $1,000 principal amount of the 2023 Notes will initially be convertible into 15.8554 shares of our common stock, the “Conversion Option,” which is equivalent to an initial conversion price of approximately $63.07 per share, subject to adjustment upon the occurrence of specified events. The 2023 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding December 15, 2022, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2018 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five In addition, if specific corporate events occur prior to the applicable maturity date, we will increase the conversion rate for a holder who elects to convert their notes in connection with such a corporate event in certain circumstances. During the three months ended March 31, 2022, the conditions allowing holders of the 2023 Notes to convert were met. The 2023 Notes are therefore convertible during the three months ending June 30, 2022, and are classified as a current liability as of March 31, 2022. To date, we have received one request for conversion for an immaterial amount of 2023 Notes. Prior to the adoption of ASU 2020-06 on January 1, 2022, in accounting for the issuance of the 2023 Notes, the 2023 Notes were separated 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 conversion feature. The carrying amount of the equity component representing the Conversion Option was $125 million and was determined by deducting the fair value of the liability component from the par value of the 2023 Notes. The equity component was recorded in additional paid-in capital. The excess of the principal amount of the liability component over its carrying amount was amortized to interest expense over the contractual term of the 2023 Notes at an effective interest rate of 5.26%. Additionally, in accounting for the debt issuance costs of $14 million related to the 2023 Not es, we allocated the total amount incurred to the liability and equity components of the 2023 Notes based on their relative values. Issuance costs attributable to the equity component were $3 million and were netted with the equity component in additional paid-in capital. Issuance costs attributable to the liability component were amortized to interest expense using the effective interest method over the contractual term of the 2023 Notes. Upon adoption of ASU 2020-06, we recombined the liability and equity components of the outstanding 2023 Notes, assuming the instrument was accounted for as a single liability from inception to the date of adoption. We similarly recombined the liability and equity components of the issuance costs. The issuance costs are amortized to interest expense using the effective interest method over the contractual term of the 2023 Notes at an effective interest rate of 0.73%. The net carrying amount of the liability component of the 2023 Notes is as follows (in thousands): March 31, December 31, Principal $ 149,194 $ 149,194 Unamortized debt discount — (8,641) Unamortized issuance costs (686) (815) Net carrying amount $ 148,508 $ 139,738 The net carrying amount of the equity component of the 2023 Notes is as follows (in thousands): March 31, December 31, Debt discount for conversion option $ — $ 32,427 Issuance costs — (765) Net carrying amount $ — $ 31,662 The interest expense related to the 2023 Notes is as follows (in thousands): Three Months Ended March 31, 2022 2021 Contractual interest expense $ 93 $ 93 Amortization of debt discount — 1,656 Amortization of issuance costs 178 143 Total interest expense $ 271 $ 1,892 2023 Capped Calls In connection with the pricing of the 2023 Notes, we entered into privately negotiated capped call transactions with certain counterparties, the “2023 Capped Calls.” The 2023 Capped Calls each have an initial strike price of approximately $63.07 per share, subject to certain adjustments, which correspond to the initial conversion price of the 2023 Notes. The 2023 Capped Calls have initial cap prices of $95.20 per share, subject to certain adjustments. The 2023 Capped Calls covered, subject to anti-dilution adjustments, approximately 9.1 million shares of our common stock. Conditions that cause adjustments to the initial strike price of the 2023 Capped Calls mirror conditions that result in corresponding adjustments for the 2023 Notes. The 2023 Capped Calls are generally intended to reduce or offset the potential dilution to our common stock upon any conversion of the 2023 Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. For accounting purposes, the 2023 Capped Calls are separate transactions, and not part of the terms of the 2023 Notes. As these transactions meet certain accounting criteria, the 2023 Capped Calls are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $64 million incurred in connection with the 2023 Capped Calls was recorded as a reduction to additional paid-in capital. In June 2020, and in connection with the 2023 Notes Partial Repurchase, we terminated the 2023 Capped Calls corresponding to approximately 6.7 million shares for cash proceeds of $83 million. The proceeds were recorded as an increase to additional paid-in capital in the consolidated balance sheets. As of March 31, 2022, there remains outstanding 2023 Capped Calls giving the Company the option to purchase approximately 2.4 million shares (subject to adjustment). The difference between the book and tax treatment of the debt discount, debt issuance costs, and the cost of the capped call on the 2023 Notes resulted in a difference between the carrying amount and tax basis of the 2023 Notes. This taxable temporary difference resulted in the recognition of a $14 million net deferred tax liability which was recorded as an adjustment to additional paid-in capital. The creation of the deferred tax liability represented a source of future taxable income which supported the realization of deferred tax assets. As we continued to maintain a full valuation allowance against these deferred tax assets, this additional source of income resulted in the release of a portion of the valuation allowance and was recorded as a net income tax benefit. As of January 1, 2022, the unamortized balance of this net deferred tax liability was $2 million, which was derecognized upon adoption of ASU 2020-06. The reduction of the net deferred tax liability was recorded to additional paid-in capital and the offsetting increase to our valuation allowance was recorded to accumulated deficit under the modified retrospective approach. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments Except as discussed below, there were no material changes in our commitments under contractual obligations as disclosed in our audited consolidated financial statements for the year ended December 31, 2021. In February 2022, we terminated and entered into a new agreement with a cloud services provider for which we have a total obligation of $400 million over a five-year period. Litigation and Loss Contingencies We accrue estimates for resolution of legal and other contingencies when losses are probable and estimable. These estimates are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel, and other information and events pertaining to a particular matter. On October 24, 2019 and November 7, 2019, purported stockholders of the Company filed two putative class action complaints in the United States District Court for the Northern District of California, entitled Charles Reidinger v. Zendesk, Inc., et al., 3:19-cv-06968-CRB and Ho v. Zendesk, Inc., et al., No. 3:19-cv-07361-WHA, respectively, against the Company and certain of the Company’s executive officers. The complaints are nearly identical and allege violations of Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934, as amended, purportedly on behalf of all persons who purchased Zendesk, Inc. common stock between February 6, 2019 and October 1, 2019, inclusive. The claims are based upon allegations that the defendants misrepresented and/or omitted material information in certain of our prior public filings. To this point, no discovery has occurred in these cases. The court appointed a lead plaintiff and consolidated the various lawsuits into a single action (Case No. 3:19-cv-06968-CRB), and the lead plaintiff filed its amended complaint on April 14, 2020 asserting the same alleged violations of securities laws as the initial complaints. On June 29, 2020, Zendesk and the executive officer defendants moved to dismiss the amended complaint. On November 9, 2020, the court granted Zendesk's motion to dismiss and granted plaintiff leave to amend its complaint. On January 8, 2021, plaintiff filed its second amended complaint and on January 22, 2021, Zendesk and the executive officer defendants moved to dismiss the second amended complaint. On March 2, 2021, the court granted Zendesk's motion to dismiss the second amended complaint. On March 23, 2021, judgment was entered in favor of Zendesk and the executive officer defendants. On April 20, 2021, plaintiff filed a notice of appeal with the U.S. Court of Appeals for the Ninth Circuit (the "Ninth Circuit"). On July 29, 2021, plaintiff filed its opening brief in the appeal, and on October 13, 2021, the Company and the executive officer defendants filed their answering brief. On March 2, 2022, the Ninth Circuit affirmed dismissal. On June 2, 2020, a purported stockholder of the Company filed a derivative complaint in the United States District Court for the Northern District of California, entitled Anderson v. Svane, et al., 3:20-cv-03671, against certain of the Company’s executive officers and directors. The derivative complaint alleged breaches of fiduciary duty against all defendants, and an insider trading claim and violations of Section 10(b) of the Securities Exchange Act of 1934 against the officer defendants, purportedly on behalf of the Company itself. The claims were based on nearly identical allegations as the two putative class action complaints described above, namely that the defendants misrepresented and/or omitted material information in certain of our prior public filings. On July 27, 2020, the court ordered the derivative action related to the class action, and the derivative action was stayed pending resolution of the class action. On May 6, 2021, the court approved a joint stipulation to extend the stay pending the outcome of the appeal of the class action. On April 18, 2022, following the Ninth Circuit's affirmation of the dismissal of the class action, plaintiff filed a stipulation to dismiss the derivative action. From time to time, we may be subject to other legal proceedings, claims, investigations, and government inquiries in the ordinary course of business. We have received, and may in the future continue to receive, claims from third parties asserting, among other things, infringement of their intellectual property rights, defamation, labor and employment rights, privacy, and contractual rights. In general, the resolution of a legal matter could prevent the Company from offering its service to others, could be material to the Company’s financial condition or cash flows, or both, or could otherwise adversely affect the Company’s operating results. The outcomes of legal proceedings and other contingencies are inherently unpredictable and subject to significant uncertainties. As a result, the Company is not able to reasonably estimate the amount or range of possible losses in excess of any amounts accrued, including losses that could arise as a result of application of non-monetary remedies, with respect to the contingencies it faces. In management’s opinion, resolution of all current matters is not expected to have a material adverse impact on business, consolidated balance sheets, results of operations, comprehensive loss, or cash flows. Indemnifications In the ordinary course of business, we enter into contractual arrangements under which we agree to provide indemnification of varying scope and terms to customers, 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 our products or our 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, our obligations under these agreements may be limited in terms of time and/or amount, and in some instances, we may have recourse against third parties for certain payments. In addition, we have indemnification agreements with our directors and executive officers that require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The terms of such obligations may vary. To date, we have not incurred any material costs, and we have not accrued any liabilities in our consolidated financial statements, as a result of these obligations. Certain of our product offerings include service-level agreements warranting defined levels of uptime reliability and performance, which permit those customers to receive credits for future services in the event that we fail to meet those levels. To date, we have not accrued for any significant liabilities in our consolidated financial statements as a result of these service-level agreements. |
Common Stock and Stockholders'
Common Stock and Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Common Stock and Stockholders' Equity | Common Stock and Stockholders’ Equity Common Stock As of March 31, 2022 and December 31, 2021, there were 400 million shares of common stock authorized for issuance with a par value of $0.01 per share, and 122.4 million and 121.6 million shares were issued and outstanding as of March 31, 2022 and December 31, 2021, respectively. Preferred Stock As of March 31, 2022 and December 31, 2021, there were 10 million shares of preferred stock authorized for issuance with a par value of $0.01 per share and no shares of preferred stock were issued or outstanding. Employee Equity Plans Employee Stock Purchase Plan Under the Employee Stock Purchase Plan, or ESPP, eligible employees are granted options to purchase shares of our common stock through payroll deductions. The ESPP provides for 18-month offering periods, which include three six-month purchase periods. At the end of each purchase period, employees are able to purchase shares at 85% of the lower of the fair market value of our common stock at the beginning of the offering period or the fair market value of our common stock at the end of the purchase period. During the three months ended March 31, 2022 and 2021, no shares of common stock were purchased under the ESPP. Pursuant to the terms of the ESPP, the number of shares reserved under the ESPP increased by 1.2 million shares on January 1, 2022. As of March 31, 2022, 6.6 million shares of common stock were available for issuance under the ESPP. Stock Option and Grant Plans Our board of directors adopted the 2009 Stock Option and Grant Plan, or the 2009 Plan, in July 2009. The 2009 Plan was terminated in connection with our initial public offering in May 2014, and accordingly, no shares are available for issuance under this plan. The 2009 Plan continues to govern outstanding awards granted thereunder. Our 2014 Stock Option and Incentive Plan, or the 2014 Plan, serves as the successor to our 2009 Plan. Pursuant to the terms of the 2014 Plan, the number of shares reserved for issuance under the 2014 Plan increased by 6.1 million shares on January 1, 2022. As of March 31, 2022, we had 21.6 million shares of common stock available for future grants under the 2014 Plan. A summary of restricted stock unit (“RSU”) activity for the three months ended March 31, 2022 is as follows (in thousands, except per share information): Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Unvested — January 1, 2022 4,402 $ 113.97 Granted 2,526 111.32 Vested (437) 95.72 Forfeited or canceled (283) 111.99 Unvested — March 31, 2022 6,208 $ 114.27 The total fair value of RSUs vested during the three months ended March 31, 2022 and 2021 was $47 million and $91 million, respectively. The fair value of RSUs vested represents market value on the vesting date. A summary of stock option activity for the three months ended March 31, 2022 is as follows (in thousands, except per share information): Stock Options Number of Weighted Weighted Aggregate (In years) Outstanding — January 1, 2022 3,457 $ 44.71 4.4 $ 222,460 Granted 492 116.56 Exercised (335) 32.28 Forfeited or canceled (32) 118.11 Outstanding — March 31, 2022 3,582 $ 55.08 5.3 $ 243,400 The aggregate intrinsic value for options outstanding represents the difference between the closing market price of our common stock on the last trading day of the reporting period and the exercise price of outstanding, in-the-money options. The total intrinsic value of stock options exercised during the three months ended March 31, 2022 and 2021 was $27 million and $26 million, respectively. The intrinsic value for options exercised represents the difference between the exercise price and the market value on the date of exercise. The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2022 and 2021 was $43.72 and $54.55, respectively. As of March 31, 2022, we had a total of $720 million in future expense related to our stock options, RSUs, and ESPP to be recognized over a weighted average period of 3.1 years. For the three months ended March 31, 2022, we recorded $1 million of share-based compensation expense related to accelerated vesting of share-based awards associated with an employee termination. Performance Restricted Stock Units During the three months ended March 31, 2022, the compensation committee of our board of directors granted performance-based restricted stock units, or PRSUs, representing a target of 0.1 million shares of common stock to certain senior executives. The PRSUs vest over a four one |
Deferred Revenue and Performanc
Deferred Revenue and Performance Obligations | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue and Performance Obligations | Costs to Obtain Customer ContractsThe balance of deferred costs to obtain customer contracts was $152 million and $145 million as of March 31, 2022 and December 31, 2021, respectively. Amortization expense for deferred costs was $20 million and $15 million for the three months ended March 31, 2022 and 2021, respectively. There were no impairment losses related to deferred costs for the periods presented.Deferred Revenue and Performance Obligations The changes in the balances of deferred revenue are as follows (in thousands): Three Months Ended March 31, 2022 2021 Balance, beginning of period $ 517,210 $ 383,358 Billings 397,637 311,212 Subscription and services revenue (364,376) (282,839) Other revenue* (23,951) (15,209) Balance, end of period $ 526,520 $ 396,522 *Other revenue primarily includes implementation and training services, usage-based revenue, and amounts from contract assets. For the three months ended March 31, 2022 and 2021, the majority of revenue recognized was from the deferred revenue balances at the beginning of each period. When revenue is recognized in advance of invoicing we record contract assets, which are included in prepaid expenses and other current assets on our consolidated balance sheets. As of March 31, 2022 and December 31, 2021, the balance of contract assets was $5 million and $4 million, respectively. The aggregate balance of remaining performance obligations as of March 31, 2022 was $1,359 million. We expect to recognize $915 million of the balance as revenue in the next 12 months and the substantial majority of the remainder in the next 13-36 months. The aggregate balance of remaining performance obligations represents contracted revenue that has not yet been recognized, including contracted revenue from renewals, and does not include contract amounts which are cancellable by the customer and amounts associated with optional renewal periods. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including those related to outstanding share-based awards and our convertible senior notes, to the extent dilutive. Basic and diluted net loss per share were the same for each period presented as the inclusion of all potential common stock outstanding would have been anti-dilutive. The following table presents the calculation of basic and diluted net loss per share for the periods presented (in thousands, except per share data): Three Months Ended 2022 2021 Net loss $ (66,946) $ (48,965) Weighted-average shares used to compute basic and diluted net loss per share 121,962 117,912 Net loss per share, basic and diluted $ (0.55) $ (0.42) The anti-dilutive securities excluded from the shares used to calculate diluted net loss per share are as follows (in thousands): As of March 31, 2022 2021 Shares subject to outstanding common stock options and employee stock purchase plan 3,856 4,601 RSUs and PRSUs 6,338 5,370 Shares related to convertible senior notes 12,939 3,871 23,133 13,842 Prior to the adoption of ASU 2020-06, we used the treasury stock method for calculating any potential dilutive effect of the conversion spread of our convertible senior notes on diluted net income per share, if applicable. The conversion spread had a dilutive impact on diluted net income per share when the average market price of our common stock for a given reporting period exceeded the initial conversion prices of $63.07 and $108.76 per share for the 2023 Notes and 2025 Notes, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We reported income tax expense of $4 million and $2 million for the three months ended March 31, 2022 and 2021, respectively . The effective tax rate for each period differs from the statutory rate primarily as a result of not recognizing a deferred tax asset for U.S. losses due to having a full valuation allowance against U.S. deferred tax assets. |
Geographic Information
Geographic Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Geographic Information | Geographic Information Our chief operating decision maker reviews the financial information presented on a consolidated basis for purposes of allocating resources and evaluating our financial performance. Accordingly, we have determined that we operate in a single reporting segment. Revenue The following table presents our revenue by geographic area, as determined based on the billing address of our customers (in thousands): Three Months Ended 2022 2021 United States $ 197,138 $ 152,824 EMEA 112,123 86,417 APAC 39,888 31,130 Other 39,178 27,677 Total $ 388,327 $ 298,048 Long-Lived Assets The following table presents our long-lived assets by geographic area (in thousands): As of As of United States $ 54,841 $ 59,776 EMEA: Republic of Ireland 33,732 34,728 Other EMEA 10,996 8,261 Total EMEA 44,728 42,989 APAC: Singapore 11,425 13,145 Other APAC 7,447 5,948 Total APAC 18,872 19,093 Other 7,483 5,883 Total $ 125,924 $ 127,741 The table above includes property and equipment and lease right-of-use assets and excludes capitalized internal-use software and intangible assets. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsIn April 2022, our board of directors approved a plan to cease use or sublease certain leased premises across our real estate portfolio. As a result, we expect to record an impairment charge in the second quarter of 2022, which we estimate could range up to $26 million. The impairment considers the estimated residual value based on the present value of the estimated cash flows that could be generated from subleasing each property for the remaining lease term, if applicable. The timing and amount of subsequent impairments, if any, is dependent on sublease opportunities and our ability to terminate the leases. |
Overview and Basis of Present_2
Overview and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | These unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K, for the year ended December 31, 2021, filed with the SEC on February 15, 2022. There have been no changes to our significant accounting policies described in the Annual Report on Form 10-K that have had a material impact on our condensed consolidated financial statements and related notes, except for the methodology to value market-based stock awards described in footnote 10 and the accounting for convertible debt instruments described below. The consolidated balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date. The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly our financial position, results of operations, comprehensive loss, stockholders’ equity, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2022. |
Use of Estimates | The preparation of our consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, 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, as well as the reported amounts of revenue and expenses during the reported periods. Significant items subject to such estimates and assumptions include: • the estimate of variable consideration related to revenue recognition; • the estimate of credit losses for accounts receivable and marketable securities; • the fair value and useful lives of acquired intangible assets; • the capitalization and useful life of capitalized costs to obtain customer contracts; • the valuation of strategic investments; • the fair value and useful lives of property and equipment; • the capitalization and useful lives of internal-use software; • the lease term and incremental borrowing rate for lease liabilities; • the fair value of our convertible senior notes; • the fair value of asset retirement obligations; • the fair value and expense recognition for certain share-based awards; • the preparation of financial forecasts used in currency hedging; • the recognition and measurement of legal contingencies; and • the recognition of tax benefits and forecasts used to determine our effective tax rate. As of the date of issuance of the financial statements, we are not aware of any material specific events or circumstances that would require us to update our estimates, judgments, or to revise the carrying values of our assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements. |
Concentrations of Risk | As of March 31, 2022 and December 31, 2021, no customers represented 10% or greater of our total accounts receivable balance. There were no customers that individually exceeded 10% of our revenue during the three months ended March 31, 2022 or 2021. Recently Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2020-06 ("ASU 2020-06"), regarding ASC Topic 470 “ Debt ” and ASC Topic 815 “ Derivatives and Hedging ,” which reduces the number of accounting models for convertible instruments, including amending the calculation of diluted earnings per share and the balance sheet presentation of those instruments, as well as the resulting recognition of interest expense, among other changes. We adopted this standard as of January 1, 2022 using the modified retrospective method. Adoption under the modified retrospective method impacted the 2023 Notes and 2025 Notes outstanding as of January 1, 2022, and resulted in the re-combination of the liability and equity components of each instrument into a single liability instrument measured at amortized cost. As a result, at transition the Company recorded a $246 million decrease to additional paid-in-capital, net of income tax effects, to remove the equity component separately recorded for the conversion features associated with the Notes, a $165 million increase to the total carrying value of the Notes, to reflect the full principal amount of the Notes outstanding net of issuance costs, and a $81 million cumulative effect decrease to the beginning balance of accumulated deficit, net of income tax effects. Interest expense recognized in future periods will be reduced as a result of accounting for each instrument as a single liability measured at amortized cost. In addition, the ASU also requires the use of the if-converted method in calculating diluted earnings per share for convertible instruments. Since the Company had a net loss for the three months ended March 31, 2022, the convertible senior notes were determined to be anti-dilutive and therefore had no impact to basic or diluted net loss per share for the period as a result of adopting ASU 2020-06. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2020-06 ("ASU 2020-06"), regarding ASC Topic 470 “ Debt ” and ASC Topic 815 “ Derivatives and Hedging ,” which reduces the number of accounting models for convertible instruments, including amending the calculation of diluted earnings per share and the balance sheet presentation of those instruments, as well as the resulting recognition of interest expense, among other changes. We adopted this standard as of January 1, 2022 using the modified retrospective method. Adoption under the modified retrospective method impacted the 2023 Notes and 2025 Notes outstanding as of January 1, 2022, and resulted in the re-combination of the liability and equity components of each instrument into a single liability instrument measured at amortized cost. As a result, at transition the Company recorded a $246 million decrease to additional paid-in-capital, net of income tax effects, to remove the equity component separately recorded for the conversion features associated with the Notes, a $165 million increase to the total carrying value of the Notes, to reflect the full principal amount of the Notes outstanding net of issuance costs, and a $81 million cumulative effect decrease to the beginning balance of accumulated deficit, net of income tax effects. Interest expense recognized in future periods will be reduced as a result of accounting for each instrument as a single liability measured at amortized cost. In addition, the ASU also requires the use of the if-converted method in calculating diluted earnings per share for convertible instruments. Since the Company had a net loss for the three months ended March 31, 2022, the convertible senior notes were determined to be anti-dilutive and therefore had no impact to basic or diluted net loss per share for the period as a result of adopting ASU 2020-06. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value on Recurring Basis | The following tables present information about our financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): Fair Value Measurement at Level 1 Level 2 Total Description U.S. Treasury securities $ — $ 485,959 $ 485,959 Corporate bonds — 420,271 420,271 Money market funds 223,448 — 223,448 Asset-backed securities — 93,704 93,704 Agency securities — 48,272 48,272 Commercial paper — 47,569 47,569 Certificates of deposit and time deposits — 9,396 9,396 Total $ 223,448 $ 1,105,171 $ 1,328,619 Included in cash and cash equivalents $ 234,346 Included in marketable securities $ 1,094,273 Fair Value Measurement at Level 1 Level 2 Total Description U.S. Treasury securities $ — $ 480,726 $ 480,726 Corporate bonds — 430,018 430,018 Money market funds 234,123 — 234,123 Asset-backed securities — 93,620 93,620 Agency securities — 50,057 50,057 Commercial paper — 48,950 48,950 Certificates of deposit and time deposits — 1,488 1,488 Total $ 234,123 $ 1,104,859 $ 1,338,982 Included in cash and cash equivalents $ 239,550 Included in marketable securities $ 1,099,432 |
Schedule of Marketable Securities Classified by Contractual Maturity | The following table classifies our marketable securities by contractual maturity (in thousands): March 31, December 31, Due in one year or less $ 602,591 $ 539,780 Due after one year and within five years 491,682 559,652 Total $ 1,094,273 $ 1,099,432 |
Schedule of Derivative Instruments on Consolidated Balance Sheets | The following tables present information about our derivative instruments on our consolidated balance sheets (in thousands): March 31, 2022 Asset Derivatives Liability Derivatives Derivative Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Foreign currency forward contracts Other current assets $ 10,864 Accrued liabilities $ 7,867 Total $ 10,864 $ 7,867 December 31, 2021 Asset Derivatives Liability Derivatives Derivative Instrument Balance Sheet Location Fair Value Balance Sheet Location Fair Value Foreign currency forward contracts Other current assets $ 6,439 Accrued liabilities $ 9,422 Total $ 6,439 $ 9,422 |
Schedule of Derivative Instruments on Statement of Operations | The following table presents information about our foreign currency forward contracts on our consolidated statements of operations for the three months ended March 31, 2022 and 2021 (in thousands): Gain (Loss) Reclassified from AOCI into Earnings Three Months Ended March 31, Classification 2022 2021 Revenue $ 794 $ (708) Cost of revenue (505) 490 Research and development (674) 515 Sales and marketing (1,236) 1,029 General and administrative (393) 417 Total $ (2,014) $ 1,743 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consists of the following (in thousands): March 31, December 31, Leasehold improvements $ 83,428 $ 79,661 Capitalized internal-use software 58,135 58,135 Computer equipment and licensed software and patents 42,690 41,512 Furniture and fixtures 15,265 14,627 Construction in progress 23,793 20,927 Total 223,311 214,862 Less: accumulated depreciation and amortization (123,755) (117,047) Property and equipment, net $ 99,556 $ 97,815 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of Lease Impact on Balance Sheet | The following table presents information about leases on our consolidated balance sheets (in thousands): March 31, 2022 December 31, 2021 Assets Lease right-of-use assets $ 67,671 $ 69,936 Liabilities Lease liabilities 20,503 21,253 Lease liabilities, noncurrent 59,180 63,212 |
Schedule of Lease Cost and Supplemental Cash Flow Information | The following table presents information about leases on our consolidated statements of operations (in thousands): Three Months Ended March 31, 2022 2021 Operating lease expense $ 5,581 $ 5,622 Short-term lease expense 120 128 Variable lease expense 1,432 1,218 Sublease income (361) (440) The following table presents supplemental cash flow information about our leases (in thousands): Three Months Ended March 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities $ 7,447 $ 6,953 Operating lease assets obtained in exchange for new lease liabilities 2,754 1,397 |
Goodwill and Acquired Intangi_2
Goodwill and Acquired Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets Acquired | Acquired intangible assets subject to amortization consist of the following (in thousands): As of March 31, 2022 Cost Accumulated Net Weighted Average Remaining Useful Life (In years) Developed technology $ 28,000 $ (14,911) $ 13,089 2.8 Customer relationships 14,300 (8,875) 5,425 3.1 $ 42,300 $ (23,786) $ 18,514 As of December 31, 2021 Cost Accumulated Net Weighted Average Remaining Useful Life (In years) Developed technology $ 28,000 $ (13,734) $ 14,266 3.0 Customer relationships 14,300 (8,233) 6,067 3.2 $ 42,300 $ (21,967) $ 20,333 |
Summary of Estimated Future Amortization Expense | Estimated future amortization expense as of March 31, 2022 is as follows (in thousands): Remainder of 2022 $ 5,478 2023 6,579 2024 4,837 2025 972 2026 488 Thereafter 160 $ 18,514 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Net Carrying Amount of Liability and Equity Component of Convertible Notes | The net carrying amount of the liability component of the 2025 Notes is as follows (in thousands): March 31, December 31, Principal $ 1,150,000 $ 1,150,000 Unamortized debt discount — (157,983) Unamortized issuance costs (13,622) (12,667) Net carrying amount $ 1,136,378 $ 979,350 The net carrying amount of the equity component of the 2025 Notes is as follows (in thousands): March 31, December 31, Debt discount for conversion option $ — $ 220,061 Issuance costs — (4,035) Net carrying amount $ — $ 216,026 The net carrying amount of the liability component of the 2023 Notes is as follows (in thousands): March 31, December 31, Principal $ 149,194 $ 149,194 Unamortized debt discount — (8,641) Unamortized issuance costs (686) (815) Net carrying amount $ 148,508 $ 139,738 The net carrying amount of the equity component of the 2023 Notes is as follows (in thousands): March 31, December 31, Debt discount for conversion option $ — $ 32,427 Issuance costs — (765) Net carrying amount $ — $ 31,662 |
Schedule of Interest Expense | The interest expense related to the 2025 Notes is as follows (in thousands): Three Months Ended March 31, 2022 2021 Contractual interest expense $ 1,797 $ 1,797 Amortization of debt discount — 10,029 Amortization of issuance costs 1,043 697 Total interest expense $ 2,840 $ 12,523 The interest expense related to the 2023 Notes is as follows (in thousands): Three Months Ended March 31, 2022 2021 Contractual interest expense $ 93 $ 93 Amortization of debt discount — 1,656 Amortization of issuance costs 178 143 Total interest expense $ 271 $ 1,892 |
Common Stock and Stockholders_2
Common Stock and Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Summary of Stock Option and RSU Award Activity | A summary of restricted stock unit (“RSU”) activity for the three months ended March 31, 2022 is as follows (in thousands, except per share information): Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Unvested — January 1, 2022 4,402 $ 113.97 Granted 2,526 111.32 Vested (437) 95.72 Forfeited or canceled (283) 111.99 Unvested — March 31, 2022 6,208 $ 114.27 A summary of stock option activity for the three months ended March 31, 2022 is as follows (in thousands, except per share information): Stock Options Number of Weighted Weighted Aggregate (In years) Outstanding — January 1, 2022 3,457 $ 44.71 4.4 $ 222,460 Granted 492 116.56 Exercised (335) 32.28 Forfeited or canceled (32) 118.11 Outstanding — March 31, 2022 3,582 $ 55.08 5.3 $ 243,400 |
Deferred Revenue and Performa_2
Deferred Revenue and Performance Obligations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Changes in Balance of Deferred Revenue | The changes in the balances of deferred revenue are as follows (in thousands): Three Months Ended March 31, 2022 2021 Balance, beginning of period $ 517,210 $ 383,358 Billings 397,637 311,212 Subscription and services revenue (364,376) (282,839) Other revenue* (23,951) (15,209) Balance, end of period $ 526,520 $ 396,522 *Other revenue primarily includes implementation and training services, usage-based revenue, and amounts from contract assets. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss per Share | The following table presents the calculation of basic and diluted net loss per share for the periods presented (in thousands, except per share data): Three Months Ended 2022 2021 Net loss $ (66,946) $ (48,965) Weighted-average shares used to compute basic and diluted net loss per share 121,962 117,912 Net loss per share, basic and diluted $ (0.55) $ (0.42) |
Schedule of Anti-Dilutive Securities Excluded from the Diluted per Share Calculation | The anti-dilutive securities excluded from the shares used to calculate diluted net loss per share are as follows (in thousands): As of March 31, 2022 2021 Shares subject to outstanding common stock options and employee stock purchase plan 3,856 4,601 RSUs and PRSUs 6,338 5,370 Shares related to convertible senior notes 12,939 3,871 23,133 13,842 |
Geographic Information (Tables)
Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Areas | The following table presents our revenue by geographic area, as determined based on the billing address of our customers (in thousands): Three Months Ended 2022 2021 United States $ 197,138 $ 152,824 EMEA 112,123 86,417 APAC 39,888 31,130 Other 39,178 27,677 Total $ 388,327 $ 298,048 |
Schedule of Long-Lived Assets by Geographic Areas | The following table presents our long-lived assets by geographic area (in thousands): As of As of United States $ 54,841 $ 59,776 EMEA: Republic of Ireland 33,732 34,728 Other EMEA 10,996 8,261 Total EMEA 44,728 42,989 APAC: Singapore 11,425 13,145 Other APAC 7,447 5,948 Total APAC 18,872 19,093 Other 7,483 5,883 Total $ 125,924 $ 127,741 |
Overview and Basis of Present_3
Overview and Basis of Presentation (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Additional paid-in capital | $ (1,465,489) | $ (1,637,157) | |
Accumulated deficit | $ (1,126,075) | $ (1,140,243) | |
Accounting Standards Update 2020-06 | Cumulative effect, period of adoption, adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Additional paid-in capital | $ 246,000 | ||
Total carrying value of notes | 165,000 | ||
Accounting Standards Update 2020-06 | Cumulative effect, period of adoption, adjustment | Accumulated Deficit | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accumulated deficit | $ 81,000 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Business Acquisition [Line Items] | |||
Increase in goodwill | $ 177 | $ 177 | |
Cleverly Lda. | |||
Business Acquisition [Line Items] | |||
Increase in goodwill | $ 7 | ||
Cleverly Lda. | Developed technology | |||
Business Acquisition [Line Items] | |||
Increase in developed technology | $ 1 |
Financial Instruments - Financi
Financial Instruments - Financial Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Included in marketable securities | $ 1,094,273 | $ 1,099,432 |
Fair value measurements, recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 1,328,619 | 1,338,982 |
Included in cash and cash equivalents | 234,346 | 239,550 |
Included in marketable securities | 1,094,273 | 1,099,432 |
Fair value measurements, recurring | U.S. Treasury securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 485,959 | 480,726 |
Fair value measurements, recurring | Corporate bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 420,271 | 430,018 |
Fair value measurements, recurring | Money market funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 223,448 | 234,123 |
Fair value measurements, recurring | Asset-backed securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 93,704 | 93,620 |
Fair value measurements, recurring | Agency securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 48,272 | 50,057 |
Fair value measurements, recurring | Commercial paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 47,569 | 48,950 |
Fair value measurements, recurring | Certificates of deposit and time deposits | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 9,396 | 1,488 |
Fair value measurements, recurring | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 223,448 | 234,123 |
Fair value measurements, recurring | Level 1 | U.S. Treasury securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 0 | 0 |
Fair value measurements, recurring | Level 1 | Corporate bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 0 | 0 |
Fair value measurements, recurring | Level 1 | Money market funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 223,448 | 234,123 |
Fair value measurements, recurring | Level 1 | Asset-backed securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 0 | 0 |
Fair value measurements, recurring | Level 1 | Agency securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 0 | 0 |
Fair value measurements, recurring | Level 1 | Commercial paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 0 | 0 |
Fair value measurements, recurring | Level 1 | Certificates of deposit and time deposits | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 0 | 0 |
Fair value measurements, recurring | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 1,105,171 | 1,104,859 |
Fair value measurements, recurring | Level 2 | U.S. Treasury securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 485,959 | 480,726 |
Fair value measurements, recurring | Level 2 | Corporate bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 420,271 | 430,018 |
Fair value measurements, recurring | Level 2 | Money market funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 0 | 0 |
Fair value measurements, recurring | Level 2 | Asset-backed securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 93,704 | 93,620 |
Fair value measurements, recurring | Level 2 | Agency securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 48,272 | 50,057 |
Fair value measurements, recurring | Level 2 | Commercial paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 47,569 | 48,950 |
Fair value measurements, recurring | Level 2 | Certificates of deposit and time deposits | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | $ 9,396 | $ 1,488 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2018 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Gross unrealized losses | $ (14,000,000) | $ (3,000,000) | ||||
Amortized cost of cash equivalents and marketable securities | 1,342,000,000 | 1,341,000,000 | ||||
Accrued interest | 3,000,000 | 3,000,000 | ||||
Aggregate fair value of securities with unrealized losses | 947,000,000 | 795,000,000 | ||||
Gross unrealized gains | 1,000,000 | |||||
Allowance for credit losses | 0 | 0 | ||||
Balance of strategic investment | 16,000,000 | 16,000,000 | ||||
Adjustments to carrying value of strategic investments | 0 | 0 | ||||
Unrecognized gain related to effective portion of changes in fair value of foreign currency forward contracts | $ 327,100,000 | $ 430,243,000 | 489,218,000 | $ 431,831,000 | ||
Closing price of common stock (in usd per share) | $ 120.29 | |||||
Level 3 | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Fair value of financial assets | $ 0 | 0 | ||||
Convertible debt | Convertible senior notes due 2023 | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Interest rate | 0.25% | 0.25% | ||||
Aggregate principal amount | $ 135,000,000 | $ 575,000,000 | ||||
Convertible debt | Convertible senior notes due 2025 | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Interest rate | 0.625% | 0.625% | ||||
Aggregate principal amount | $ 122,000,000 | $ 1,150,000,000 | ||||
Convertible debt | Level 2 | Convertible senior notes due 2023 | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Fair value | 1,397,000,000 | |||||
Convertible debt | Level 2 | Convertible senior notes due 2025 | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Fair value | $ 287,000,000 | |||||
Foreign currency forward contracts | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Derivative, maximum maturity | 15 months | |||||
Reclassification of net gain into earnings over next 12 months | $ 5,000,000 | |||||
Notional value | 505,000,000 | $ 488,000,000 | ||||
Gain (loss) recognized in AOCI | 5,000,000 | $ (4,000,000) | ||||
Foreign currency forward contracts | AOCI, Derivative Qualifying as Hedge, Excluded Component, Parent | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Unrecognized gain related to effective portion of changes in fair value of foreign currency forward contracts | $ 5,000,000 |
Financial Instruments - Marketa
Financial Instruments - Marketable Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Due in one year or less | $ 602,591 | $ 539,780 |
Due after one year and within five years | 491,682 | 559,652 |
Total | $ 1,094,273 | $ 1,099,432 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Derivative Instruments on Consolidated Balance Sheets (Details) - Designated as hedging instrument - Level 2 - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Derivatives Fair Value [Line Items] | ||
Asset Derivatives | $ 10,864 | $ 6,439 |
Liability Derivatives | 7,867 | 9,422 |
Foreign currency forward contracts | Other current assets | ||
Derivatives Fair Value [Line Items] | ||
Asset Derivatives | 10,864 | 6,439 |
Foreign currency forward contracts | Accrued liabilities | ||
Derivatives Fair Value [Line Items] | ||
Liability Derivatives | $ 7,867 | $ 9,422 |
Financial Instruments - Sched_2
Financial Instruments - Schedule of Derivative Instruments on Statement of Operations (Details) - Foreign currency forward contracts - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Derivative Instruments Gain Loss [Line Items] | ||
Gain (Loss) Reclassified from AOCI into Earnings | $ (2,014) | $ 1,743 |
Revenue | ||
Derivative Instruments Gain Loss [Line Items] | ||
Gain (Loss) Reclassified from AOCI into Earnings | 794 | (708) |
Cost of revenue | ||
Derivative Instruments Gain Loss [Line Items] | ||
Gain (Loss) Reclassified from AOCI into Earnings | (505) | 490 |
Research and development | ||
Derivative Instruments Gain Loss [Line Items] | ||
Gain (Loss) Reclassified from AOCI into Earnings | (674) | 515 |
Sales and marketing | ||
Derivative Instruments Gain Loss [Line Items] | ||
Gain (Loss) Reclassified from AOCI into Earnings | (1,236) | 1,029 |
General and administrative | ||
Derivative Instruments Gain Loss [Line Items] | ||
Gain (Loss) Reclassified from AOCI into Earnings | $ (393) | $ 417 |
Costs to Obtain Customer Cont_2
Costs to Obtain Customer Contracts (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Deferred costs to obtain customer contracts | $ 152,000,000 | $ 145,000,000 | |
Amortization of deferred costs | 20,325,000 | $ 14,757,000 | |
Impairment related to deferred costs | $ 0 | $ 0 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 223,311 | $ 214,862 |
Less: accumulated depreciation and amortization | (123,755) | (117,047) |
Property and equipment, net | 99,556 | 97,815 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | 83,428 | 79,661 |
Capitalized internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Total | 58,135 | 58,135 |
Computer equipment and licensed software and patents | ||
Property, Plant and Equipment [Line Items] | ||
Total | 42,690 | 41,512 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total | 15,265 | 14,627 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 23,793 | $ 20,927 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 6 | $ 6 | |
Amortization expense of capitalized internal-use software | 2 | $ 2 | |
Carrying value of capitalized internal-use software | 41 | $ 40 | |
Capitalized internal-use software included in construction in progress | 18 | 15 | |
Implementation Costs | |||
Property, Plant and Equipment [Line Items] | |||
Implementation costs | $ 8 | $ 7 |
Leases - Schedule of Lease Impa
Leases - Schedule of Lease Impact on Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Lease right-of-use assets | $ 67,671 | $ 69,936 |
Liabilities | ||
Lease liabilities | 20,503 | 21,253 |
Lease liabilities, noncurrent | $ 59,180 | $ 63,212 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Mar. 31, 2022 |
Leases [Abstract] | |
Weighted average remaining lease term | 5 years 7 months 6 days |
Weighted average discount rate | 4.70% |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Operating lease expense | $ 5,581 | $ 5,622 |
Short-term lease expense | 120 | 128 |
Variable lease expense | 1,432 | 1,218 |
Sublease income | $ (361) | $ (440) |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 7,447 | $ 6,953 |
Operating lease assets obtained in exchange for new lease liabilities | $ 2,754 | $ 1,397 |
Goodwill and Acquired Intangi_3
Goodwill and Acquired Intangible Assets - Acquired Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 42,300 | $ 42,300 |
Accumulated Amortization | (23,786) | (21,967) |
Net | 18,514 | 20,333 |
Developed technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 28,000 | 28,000 |
Accumulated Amortization | (14,911) | (13,734) |
Net | $ 13,089 | $ 14,266 |
Weighted Average Remaining Useful Life | 2 years 9 months 18 days | 3 years |
Customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 14,300 | $ 14,300 |
Accumulated Amortization | (8,875) | (8,233) |
Net | $ 5,425 | $ 6,067 |
Weighted Average Remaining Useful Life | 3 years 1 month 6 days | 3 years 2 months 12 days |
Goodwill and Acquired Intangi_4
Goodwill and Acquired Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 2 | $ 2 | |
Goodwill | $ 177 | $ 177 |
Goodwill and Acquired Intangi_5
Goodwill and Acquired Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2022 | $ 5,478 | |
2023 | 6,579 | |
2024 | 4,837 | |
2025 | 972 | |
2026 | 488 | |
Thereafter | 160 | |
Net | $ 18,514 | $ 20,333 |
Convertible Senior Notes - Narr
Convertible Senior Notes - Narrative (Details) $ / shares in Units, shares in Millions | 1 Months Ended | ||||||
Jun. 30, 2020USD ($)day$ / sharesshares | Mar. 31, 2018USD ($)day$ / sharesshares | Mar. 31, 2022USD ($)shares | Jan. 01, 2022USD ($) | Dec. 31, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |||||||
Release of valuation allowance | $ 327,100,000 | $ 489,218,000 | $ 430,243,000 | $ 431,831,000 | |||
Deferred tax liabilities, net | 14,000,000 | ||||||
Additional Paid-In Capital | |||||||
Debt Instrument [Line Items] | |||||||
Release of valuation allowance | 1,465,489,000 | 1,637,157,000 | $ 1,399,014,000 | $ 1,344,337,000 | |||
Cumulative effect, period of adoption, adjustment | |||||||
Debt Instrument [Line Items] | |||||||
Release of valuation allowance | (164,576,000) | ||||||
Cumulative effect, period of adoption, adjustment | Additional Paid-In Capital | |||||||
Debt Instrument [Line Items] | |||||||
Release of valuation allowance | (245,690,000) | ||||||
Cumulative effect, period of adoption, adjustment | Additional Paid-In Capital | Accounting Standards Update 2019-12 | |||||||
Debt Instrument [Line Items] | |||||||
Release of valuation allowance | 51,000,000 | ||||||
Convertible senior notes due 2025 | Cumulative effect, period of adoption, adjustment | Additional Paid-In Capital | Accounting Standards Update 2020-06 | |||||||
Debt Instrument [Line Items] | |||||||
Release of valuation allowance | $ 36,000,000 | ||||||
Convertible senior notes due 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Debt discount for conversion option | $ 125,000,000 | ||||||
Effective interest rate | 5.26% | ||||||
Debt issuance costs, gross | $ 14,000,000 | ||||||
Convertible senior notes due 2023 | Cumulative effect, period of adoption, adjustment | Additional Paid-In Capital | Accounting Standards Update 2020-06 | |||||||
Debt Instrument [Line Items] | |||||||
Release of valuation allowance | $ 2,000,000 | ||||||
Convertible debt | Convertible senior notes due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 1,150,000,000 | $ 122,000,000 | |||||
Interest rate | 0.625% | 0.625% | |||||
Proceeds from issuance of convertible senior notes, net of issuance costs | $ 1,129,000,000 | ||||||
Initial conversion rate of common stock | 0.0091944 | ||||||
Conversion price (in usd per share) | $ / shares | $ 108.76 | ||||||
Limitation on sale of common stock, sale price threshold, number of trading days | day | 20 | ||||||
Limitation on sale of common stock, sale price threshold, trading period | day | 30 | ||||||
Threshold percentage of stock price trigger | 130.00% | ||||||
Number of consecutive business days | 5 days | ||||||
Percentage of closing sale price in excess of convertible notes | 98.00% | ||||||
Redemption price percentage | 100.00% | ||||||
Debt discount for conversion option | $ 220,000,000 | $ 0 | 220,061,000 | ||||
Effective interest rate | 5.00% | ||||||
Debt issuance costs, gross | 21,000,000 | ||||||
Issuance costs attributable to the liability component | 17,000,000 | $ 13,622,000 | 12,667,000 | ||||
Net deferred tax liability related to cap call | $ 51,000,000 | ||||||
Capped calls, initial cap price (in usd per share) | $ / shares | $ 164.17 | ||||||
Number of shares covered by cap call (in shares) | shares | 10.6 | ||||||
Cost incurred related to capped calls | $ 130,000,000 | ||||||
Net proceeds used from offering to repurchase principal | 618,000,000 | ||||||
Payments to repurchase convertible debt | 426,000,000 | ||||||
Proceeds from convertible debt allocated to debt component | 393,000,000 | ||||||
Proceeds from convertible debt allocated to equity component | 225,000,000 | ||||||
Net carrying amount of liability component | 1,136,378,000 | 979,350,000 | |||||
Repayment of debt discount | $ 39,000,000 | ||||||
Principal outstanding | 1,150,000,000 | 1,150,000,000 | |||||
Convertible debt | Convertible senior notes due 2025 | Cumulative effect, period of adoption, adjustment | Accounting Standards Update 2020-06 | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 1.00% | ||||||
Net deferred tax liability related to cap call | $ (36,000,000) | ||||||
Convertible debt | Convertible senior notes due 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 575,000,000 | $ 135,000,000 | |||||
Interest rate | 0.25% | 0.25% | |||||
Proceeds from issuance of convertible senior notes, net of issuance costs | $ 561,000,000 | ||||||
Initial conversion rate of common stock | 0.0158554 | ||||||
Conversion price (in usd per share) | $ / shares | $ 63.07 | ||||||
Limitation on sale of common stock, sale price threshold, number of trading days | day | 20 | ||||||
Limitation on sale of common stock, sale price threshold, trading period | day | 30 | ||||||
Threshold percentage of stock price trigger | 130.00% | ||||||
Number of consecutive business days | 5 days | ||||||
Percentage of closing sale price in excess of convertible notes | 98.00% | ||||||
Redemption price percentage | 100.00% | ||||||
Debt discount for conversion option | $ 0 | 32,427,000 | |||||
Issuance costs attributable to the liability component | $ 686,000 | 815,000 | |||||
Capped calls, initial cap price (in usd per share) | $ / shares | $ 95.20 | ||||||
Number of shares covered by cap call (in shares) | shares | 9.1 | 2.4 | |||||
Cost incurred related to capped calls | $ 64,000,000 | ||||||
Net carrying amount of liability component | 367,000,000 | $ 148,508,000 | 139,738,000 | ||||
Loss on early extinguishment of debt | $ 26,000,000 | ||||||
Principal outstanding | 149,194,000 | $ 149,194,000 | |||||
Debt instrument, equity, unamortized discount issuance costs | $ 3,000,000 | ||||||
Number of shares terminated (in shares) | shares | 6.7 | ||||||
Proceeds from shares terminated | $ 83,000,000 | ||||||
Convertible debt | Convertible senior notes due 2023 | Cumulative effect, period of adoption, adjustment | Accounting Standards Update 2020-06 | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 0.73% | ||||||
Net deferred tax liability related to cap call | $ (2,000,000) |
Convertible Senior Notes - Sche
Convertible Senior Notes - Schedule of Net Carrying Amount of Liability and Equity Component of Convertible Notes (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2018 |
Convertible senior notes due 2023 | ||||
Net Carrying Amount of Equity Component of Convertible Notes [Abstract] | ||||
Debt discount for conversion option | $ 125,000 | |||
Convertible debt | Convertible senior notes due 2025 | ||||
Net Carrying Amount of Liability Component of Convertible Notes [Abstract] | ||||
Principal | 1,150,000 | $ 1,150,000 | ||
Unamortized debt discount | 0 | (157,983) | ||
Unamortized issuance costs | (13,622) | (12,667) | $ (17,000) | |
Net carrying amount | 1,136,378 | 979,350 | ||
Net Carrying Amount of Equity Component of Convertible Notes [Abstract] | ||||
Debt discount for conversion option | 0 | 220,061 | $ 220,000 | |
Issuance costs | 0 | (4,035) | ||
Net carrying amount | 0 | 216,026 | ||
Convertible debt | Convertible senior notes due 2023 | ||||
Net Carrying Amount of Liability Component of Convertible Notes [Abstract] | ||||
Principal | 149,194 | 149,194 | ||
Unamortized debt discount | 0 | (8,641) | ||
Unamortized issuance costs | (686) | (815) | ||
Net carrying amount | 148,508 | 139,738 | $ 367,000 | |
Net Carrying Amount of Equity Component of Convertible Notes [Abstract] | ||||
Debt discount for conversion option | 0 | 32,427 | ||
Issuance costs | 0 | (765) | ||
Net carrying amount | $ 0 | $ 31,662 |
Convertible Senior Notes - Sc_2
Convertible Senior Notes - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Instrument [Line Items] | ||
Total interest expense | $ 3,121 | $ 14,415 |
Convertible debt | Convertible senior notes due 2025 | ||
Debt Instrument [Line Items] | ||
Contractual interest expense | 1,797 | 1,797 |
Amortization of debt discount | 0 | 10,029 |
Amortization of issuance costs | 1,043 | 697 |
Total interest expense | 2,840 | 12,523 |
Convertible debt | Convertible senior notes due 2023 | ||
Debt Instrument [Line Items] | ||
Contractual interest expense | 93 | 93 |
Amortization of debt discount | 0 | 1,656 |
Amortization of issuance costs | 178 | 143 |
Total interest expense | $ 271 | $ 1,892 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 1 Months Ended | ||
Feb. 28, 2022USD ($) | Jun. 02, 2020complaint | Nov. 07, 2019complaint | |
Ho v. Zendesk And Reidinger v. Zendesk | |||
Other Commitments [Line Items] | |||
Putative class action complaints | 2 | ||
Anderson v. Svane | |||
Other Commitments [Line Items] | |||
Putative class action complaints | 2 | ||
Cloud Infrastructure | |||
Other Commitments [Line Items] | |||
Total obligation | $ | $ 400 | ||
Obligation period | 5 years |
Common Stock and Stockholders_3
Common Stock and Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Millions | Jan. 01, 2022shares | Mar. 31, 2022USD ($)offeringPeriod$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2021$ / sharesshares |
Class Of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 | ||
Common stock, par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | ||
Common stock, shares outstanding (in shares) | 122,400,000 | 121,600,000 | ||
Common stock, shares issued (in shares) | 122,400,000 | 121,600,000 | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | ||
Preferred stock, par value (usd per share) | $ / shares | $ 0.01 | $ 0.01 | ||
Preferred stock, shares issued (in shares) | 0 | 0 | ||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||
Intrinsic value of options exercised (in usd per share) | $ | $ 27 | $ 26 | ||
Weighted-average grant date fair value of stock options (in usd per share) | $ / shares | $ 43.72 | $ 54.55 | ||
Future period share-based compensation expense | $ | $ 720 | |||
Future period share-based compensation expense, period to recognized | 3 years 1 month 6 days | |||
2009 Stock Option and Grant Plan | ||||
Class Of Stock [Line Items] | ||||
Shares of common stock available for issuance (in shares) | 0 | |||
Employee stock | ||||
Class Of Stock [Line Items] | ||||
Percentage of purchase price of shares lower of the fair market value of common stock employees are able to purchase shares | 85.00% | |||
Number of shares repurchased under ESPP (in shares) | 0 | 0 | ||
Increase in authorized shares (in shares) | 1,200,000 | |||
Shares of common stock available for issuance (in shares) | 6,600,000 | |||
Employee stock option | ||||
Class Of Stock [Line Items] | ||||
Offering period | 18 months | |||
Number of offering periods | offeringPeriod | 3 | |||
Length of purchase period | 6 months | |||
Employee stock option | 2014 Plan | ||||
Class Of Stock [Line Items] | ||||
Increase in authorized shares (in shares) | 6,100,000 | |||
Shares of common stock available for issuance (in shares) | 21,600,000 | |||
Restricted stock units | ||||
Class Of Stock [Line Items] | ||||
Intrinsic value of shares vested | $ | $ 47 | $ 91 | ||
Shares granted (in shares) | 2,526,000 | |||
Employee stock | ||||
Class Of Stock [Line Items] | ||||
Share-based compensation expense, accelerated cost | $ | $ 1 | |||
Performance restricted stock units | ||||
Class Of Stock [Line Items] | ||||
Future period share-based compensation expense | $ | 15 | |||
Share-based compensation expense | $ | $ 1 | |||
Performance restricted stock units | Chief Executive Officer and Senior Executives | ||||
Class Of Stock [Line Items] | ||||
Shares granted (in shares) | 100,000 | |||
Award vesting period | 4 years | |||
Performance restricted stock units | Chief Executive Officer and Senior Executives | Share-based Payment Arrangement, Tranche Two | ||||
Class Of Stock [Line Items] | ||||
Award requisite service period | 1 year |
Common Stock and Stockholders_4
Common Stock and Stockholders' Equity - Summary of Stock Option and RSU Award Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2021 | |
Number of Shares | |||
Balance at the beginning of the period (in shares) | 3,457 | ||
Stock options granted (in shares) | 492 | ||
Stock options exercised (in shares) | (335) | ||
Stock options forfeited or canceled (in shares) | (32) | ||
Balance at the end of the period (in shares) | 3,582 | ||
Weighted Average Exercise Price | |||
Balance at the beginning of the period (in usd per share) | $ 44.71 | ||
Stock options granted (in usd per share) | 116.56 | ||
Stock options exercised (in usd per share) | 32.28 | ||
Stock options forfeited or canceled (in usd per share) | 118.11 | ||
Balance at the end of the period (in usd per share) | $ 55.08 | ||
Weighted Average Remaining Contractual Term | |||
Weighted average remaining contractual term | 5 years 3 months 18 days | 4 years 4 months 24 days | |
Aggregate Intrinsic Value | |||
Aggregate intrinsic value, options | $ 243,400 | $ 222,460 | |
Restricted stock units | |||
Outstanding RSUs | |||
Balance at the beginning of the period (in shares) | 4,402 | ||
RSUs granted (in shares) | 2,526 | ||
RSUs vested (in shares) | (437) | ||
RSUs forfeited or canceled (in shares) | (283) | ||
Balance at the end of the period (in shares) | 6,208 | ||
Weighted Average Grant Date Fair Value | |||
Balance at the beginning of the period (in usd per share) | $ 113.97 | ||
Weighted average grant date fair value, RSUs granted (in usd per share) | 111.32 | ||
Weighted average grant date fair value, RSUs vested (in usd per share) | 95.72 | ||
Weighted average grant date fair value, RSUs forfeited or canceled (in usd per share) | 111.99 | ||
Balance at the end of the period (in usd per share) | $ 114.27 |
Deferred Revenue and Performa_3
Deferred Revenue and Performance Obligations - Schedule of Changes in Balance of Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Change in Balances of Deferred Revenue [Roll Forward] | ||
Balance, beginning of period | $ 517,210 | $ 383,358 |
Billings | 397,637 | 311,212 |
Balance, end of period | 526,520 | 396,522 |
Subscription and Services | ||
Change in Balances of Deferred Revenue [Roll Forward] | ||
Revenue recognized | (364,376) | (282,839) |
Other Revenue | ||
Change in Balances of Deferred Revenue [Roll Forward] | ||
Revenue recognized | $ (23,951) | $ (15,209) |
Deferred Revenue and Performa_4
Deferred Revenue and Performance Obligations - Performance Obligations (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Performance obligations expected to be satisfied | $ 1,359 | |
Prepaid Expenses and Other Current Assets | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Commodity contract asset, current | 5 | $ 4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Performance obligations expected to be satisfied | $ 915 | |
Performance obligations expected to be satisfied, expected timing | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | Minimum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Performance obligations expected to be satisfied, expected timing | 13 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | Maximum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Performance obligations expected to be satisfied, expected timing | 36 months |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss per Share of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (66,946) | $ (48,965) |
Weighted-average shares used to compute net loss per share, basic (in shares) | 121,962 | 117,912 |
Weighted-average shares used to compute net loss per share, diluted (in shares) | 121,962 | 117,912 |
Net loss per share, basic (in usd per share) | $ (0.55) | $ (0.42) |
Net loss per share, diluted (in usd per share) | $ (0.55) | $ (0.42) |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Anti-Dilutive Securities Excluded from the Diluted per Share Calculation (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 23,133 | 13,842 |
Shares subject to outstanding common stock options and employee stock purchase plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 3,856 | 4,601 |
RSUs and PRSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 6,338 | 5,370 |
Shares related to convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 12,939 | 3,871 |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) - $ / shares shares in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Jun. 30, 2020 | Mar. 31, 2018 | |
Convertible senior notes due 2023 | |||
Debt Instrument [Line Items] | |||
Potential dilution based on initial conversion price (in shares) | 2.4 | ||
Convertible senior notes due 2025 | |||
Debt Instrument [Line Items] | |||
Potential dilution based on initial conversion price (in shares) | 10.6 | ||
Convertible debt | Convertible senior notes due 2023 | |||
Debt Instrument [Line Items] | |||
Conversion price (in usd per share) | $ 63.07 | ||
Convertible debt | Convertible senior notes due 2025 | |||
Debt Instrument [Line Items] | |||
Conversion price (in usd per share) | $ 108.76 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 4,037 | $ 2,354 |
Geographic Information - Narrat
Geographic Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2022segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Geographic Information - Schedu
Geographic Information - Schedule of Revenue by Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Revenue | $ 388,327 | $ 298,048 |
United States | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Revenue | 197,138 | 152,824 |
EMEA | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Revenue | 112,123 | 86,417 |
APAC | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Revenue | 39,888 | 31,130 |
Other | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Revenue | $ 39,178 | $ 27,677 |
Geographic Information - Sche_2
Geographic Information - Schedule of Long-Lived Assets by Geographic Areas (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | $ 125,924 | $ 127,741 |
United States | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | 54,841 | 59,776 |
EMEA | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | 44,728 | 42,989 |
Republic of Ireland | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | 33,732 | 34,728 |
Other EMEA | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | 10,996 | 8,261 |
APAC | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | 18,872 | 19,093 |
Singapore | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | 11,425 | 13,145 |
Other APAC | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | 7,447 | 5,948 |
Other | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | $ 7,483 | $ 5,883 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | 1 Months Ended |
Apr. 30, 2022USD ($) | |
Subsequent Event | |
Subsequent Event [Line Items] | |
Impairment of operating lease, right-of-use assets | $ 26 |