Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ZEN | |
Entity Registrant Name | Zendesk, Inc. | |
Entity Central Index Key | 1,463,172 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 91,743,091 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 217,791 | $ 216,226 |
Marketable securities | 36,531 | 29,414 |
Accounts receivable, net of allowance for doubtful accounts of $900 and $763 as of March 31, 2016 and December 31, 2015, respectively | 24,094 | 26,168 |
Prepaid expenses and other current assets | 11,984 | 11,423 |
Total current assets | 290,400 | 283,231 |
Marketable securities, noncurrent | 18,387 | 22,336 |
Property and equipment, net | 55,543 | 56,540 |
Goodwill and intangible assets, net | 56,746 | 57,050 |
Other assets | 4,606 | 3,529 |
Total assets | 425,682 | 422,686 |
Current liabilities: | ||
Accounts payable | 6,497 | 9,332 |
Accrued liabilities | 11,626 | 9,742 |
Accrued compensation and related benefits | 15,193 | 14,115 |
Deferred revenue | 90,551 | 84,210 |
Total current liabilities | 123,867 | 117,399 |
Deferred revenue, noncurrent | 1,434 | 1,405 |
Other liabilities | 10,530 | 10,592 |
Total liabilities | $ 135,831 | $ 129,396 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity: | ||
Preferred stock | ||
Common stock | $ 917 | $ 905 |
Additional paid-in capital | 531,431 | 511,183 |
Accumulated other comprehensive income (loss) | 1,247 | (2,225) |
Accumulated deficit | (243,092) | (215,921) |
Treasury stock at cost (0.5 million shares as of March 31, 2016 and December 31, 2015) | (652) | (652) |
Total stockholders’ equity | 289,851 | 293,290 |
Total liabilities and stockholders’ equity | $ 425,682 | $ 422,686 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands, shares in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 900 | $ 763 |
Treasury stock, shares | 0.5 | 0.5 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Income Statement [Abstract] | |||
Revenue | $ 68,459 | $ 42,234 | |
Cost of revenue | [1] | 21,516 | 14,290 |
Gross profit | 46,943 | 27,944 | |
Operating expenses: | |||
Research and development | [1] | 21,597 | 13,259 |
Sales and marketing | [1] | 36,172 | 23,403 |
General and administrative | [1] | 15,861 | 10,127 |
Total operating expenses | [1] | 73,630 | 46,789 |
Operating loss | (26,687) | (18,845) | |
Other expense, net | (70) | (230) | |
Loss before provision for income taxes | (26,757) | (19,075) | |
Provision for income taxes | 414 | 93 | |
Net loss | $ (27,171) | $ (19,168) | |
Net loss per share, basic and diluted | $ (0.30) | $ (0.25) | |
Weighted-average shares used to compute net loss per share, basic and diluted | 90,519 | 76,338 | |
[1] | Includes share-based compensation expense as follows: |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based compensation expense | $ 17,695 | $ 10,229 |
Cost of Revenue | ||
Share-based compensation expense | 1,633 | 891 |
Research and Development | ||
Share-based compensation expense | 6,627 | 4,064 |
Sales and Marketing | ||
Share-based compensation expense | 5,439 | 2,432 |
General and Administrative | ||
Share-based compensation expense | $ 3,996 | $ 2,842 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (27,171) | $ (19,168) |
Other comprehensive loss, net of tax: | ||
Net change in unrealized gain on available-for-sale investments | 129 | 40 |
Foreign currency translation gain (loss) | 733 | (440) |
Net change in unrealized gain on derivative instruments | 2,610 | |
Comprehensive loss | $ (23,699) | $ (19,568) |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (27,171) | $ (19,168) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 6,526 | 4,223 |
Share-based compensation | 17,695 | 10,229 |
Other | 403 | 172 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,898 | (635) |
Prepaid expenses and other current assets | 862 | (793) |
Other assets and liabilities | (383) | (638) |
Accounts payable | (1,851) | (1,012) |
Accrued liabilities | 2,307 | 1,323 |
Accrued compensation and related benefits | (2,066) | (2,837) |
Deferred revenue | 6,369 | 3,941 |
Net cash provided by (used in) operating activities | 4,589 | (5,195) |
Cash flows from investing activities | ||
Purchases of property and equipment | (3,249) | (3,356) |
Internal-use software development costs | (1,351) | (1,317) |
Purchases of marketable securities | (20,795) | (14,801) |
Proceeds from maturities of marketable securities | 10,051 | 7,520 |
Proceeds from sale of marketable securities | 7,604 | 6,141 |
Cash paid for the acquisition of Zopim, net of cash acquired | (548) | |
Net cash used in investing activities | (7,740) | (6,361) |
Cash flows from financing activities | ||
Proceeds from follow-on public offering, net of issuance costs | 190,794 | |
Proceeds from exercise of employee stock options | 1,915 | 2,938 |
Taxes paid related to net share settlement of equity awards | (189) | (82) |
Proceeds from employee stock purchase plan | 3,144 | 2,468 |
Principal payments on debt | (753) | |
Principal payments on capital lease obligations | (10) | |
Net cash provided by financing activities | 4,870 | 195,355 |
Effect of exchange rate changes on cash and cash equivalents | (154) | 158 |
Net increase in cash and cash equivalents | 1,565 | 183,957 |
Cash and cash equivalents at the beginning of period | 216,226 | 80,265 |
Cash and cash equivalents at the end of period | 217,791 | 264,222 |
Supplemental cash flow data: | ||
Cash paid for interest and income taxes | 168 | 122 |
Non-cash investing and financing activities: | ||
Balance of property and equipment in accounts payable and accrued expenses | 2,345 | 497 |
Share-based compensation capitalized in internal-use software development costs | 563 | 545 |
Vesting of early exercised stock options | $ 232 | 311 |
Property and equipment acquired through tenant improvement allowances | 174 | |
Follow-on offering related costs not yet paid for | $ 605 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Overview and Basis of Presentation | Note 1. Overview and Basis of Presentation Company and Background Zendesk was founded in Denmark in 2007 and reincorporated in Delaware in April 2009. Our mission is to help organizations and their customers build better relationships. We are a software development company that provides a SaaS customer service platform that enables our customers to provide tailored support through multiple channels, establish effective self-service support resources, proactively serve customers through customer engagement capabilities, integrate with other applications, and consolidate and analyze data from customer interactions. We also provide SaaS live chat software that can be utilized independently to facilitate proactive communications between organizations and their customers or integrated easily into our platform. In October 2015, we completed the acquisition of We Are Cloud SAS, or WAC, the maker of BIME Analytics software. With the acquisition, we added technology that we anticipate will allow our customers to understand the ever-increasing diversity of data about their end customers. Over time, we expect this analytics software to become a core technology within our customer service platform, enabling us to further integrate data analytics capabilities across our products. We also expect to continue to sell our analytics software on a standalone basis. 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, 2015, filed on February 26, 2016. 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. The consolidated balance sheet as of December 31, 2015 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 the financial position, results of operations, our comprehensive loss 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, 2016. Follow-On Public Offering In March 2015, we completed a follow-on public offering, in which we issued 8.8 million shares of our common stock at a public offering price of $22.75 per share. We received net proceeds of $190.1 million after deducting underwriting discounts and commissions of $8.7 million and other offering expenses of $0.9 million. Use of Estimates The preparation of 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 fair value of share-based awards, acquired intangible assets and goodwill, unrecognized tax benefits, the useful lives of acquired intangible assets and property and equipment, and the capitalization and estimated useful life of our capitalized internal-use software. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from those estimates. Concentrations of Risk As of March 31, 2016, 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, 2016 or 2015. Recently Issued and Adopted Accounting Pronouncements In May 2014, the FASB issued new revenue guidance that provides principles for recognizing revenue to which an entity expects to be entitled for the transfer of promised goods or services to customers. In August 2015, the FASB deferred the effective date of adoption by one year. As currently issued and amended, the new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, though early adoption is permitted for annual reporting periods beginning after December 15, 2016. The amendment may be applied retrospectively to each prior period presented, or with the cumulative effect recognized as of the date of initial adoption. We have not yet selected a transition method and continue to evaluate the effect of the standard on our consolidated financial statements, including revenue and commissions. In September 2015, the FASB issued ASU 2015-16 “Simplifying the Accounting for Measurement-Period Adjustments,” which requires that an acquirer in a business combination recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The new standard is required to be applied prospectively. We adopted this guidance in the first quarter of 2016. The adoption of this standard did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 regarding ASC Topic 842 "Leases." This new standard requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets and eliminates certain real estate-specific provisions. The new guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09 regarding Topic 718 "Compensation - Stock Compensation." This amendment changes certain aspects of accounting for share-based compensation to employees, including the recognition of income tax effects of awards when the awards vest or are settled, requirements on net share settlement to cover tax withholding, and accounting for forfeitures. The new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements. |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combination | Note 2. Business Combination On October 13, 2015, we completed the acquisition of WAC, the maker of BIME Analytics software. We acquired 100 percent of the outstanding shares of WAC in exchange for purchase consideration of $46.4 million in cash, including working capital adjustments. As partial security for standard indemnification obligations, $7.0 million of the consideration will be held in escrow for a period of up to 18 months, with a portion to be released 12 months following the closing of the acquisition. We incurred transaction costs of $1.0 million in connection with the acquisition. The transaction costs were expensed as incurred and recognized within general and administrative expenses. The fair value of assets acquired and liabilities assumed was based on a preliminary valuation and purchase price, and our estimates and assumptions are subject to change within the measurement period. The primary areas that remain preliminary relate to the fair values of certain tangible assets and liabilities acquired and residual goodwill. The total purchase price was allocated to assets acquired and liabilities assumed as set forth below (in thousands). During the three months ended March 31, 2016, we made adjustments of $37,000 to the preliminary purchase price allocation related to certain tangible assets and liabilities acquired. Net tangible assets acquired $ 2,269 Net deferred tax liability recognized (1,979 ) Identifiable intangible assets: Developed technology 8,800 Customer relationships 500 Goodwill 36,767 Total purchase price $ 46,357 The developed technology and customer relationship intangible assets were each assigned useful lives of 4.5 years. In connection with the acquisition, we entered into retention arrangements with certain employees of WAC, pursuant to which we issued RSUs for approximately 0.5 million shares of our common stock, most of which vest in three annual installments from the date of acquisition. The expense related to the RSUs is accounted for as share-based compensation expense over the required service periods and was not included in the purchase consideration. The results of operations of WAC have been included in our consolidated financial statements from the date of the acquisition. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Financial Instruments Owned At Fair Value [Abstract] | |
Financial Instruments | Note 3. Financial Instruments Investments The following tables present information about our cash equivalents and marketable securities measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 based on the three-tier fair value hierarchy (in thousands): Fair Value Measurement at March 31, 2016 Level 1 Level 2 Total Description Corporate securities $ — $ 29,696 $ 29,696 Money market funds 18,556 — 18,556 Asset-backed securities — 10,025 10,025 U.S. treasury securities — 9,211 9,211 Commercial paper — 3,985 3,985 Agency securities — 2,001 2,001 Total $ 18,556 $ 54,918 $ 73,474 Included in cash and cash equivalents $ 18,556 Included in marketable securities $ 54,918 Fair Value Measurement at December 31, 2015 Level 1 Level 2 Total Description Corporate securities $ — $ 31,761 $ 31,761 Money market funds 21,338 — 21,338 Asset-backed securities — 7,998 7,998 Commercial paper — 5,992 5,992 U.S. treasury securities — 4,001 4,001 Agency securities — 1,998 1,998 Total $ 21,338 $ 51,750 $ 73,088 Included in cash and cash equivalents $ 21,338 Included in marketable securities $ 51,750 As of March 31, 2016 and December 31, 2015, 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, 2016. Gross unrealized gains or losses for cash equivalents and marketable securities as of March 31, 2016 and December 31, 2015 were not material. As of March 31, 2016 and December 31, 2015, there were no securities that were in an unrealized loss position for more than 12 months. The following table classifies our marketable securities by contractual maturity as of March 31, 2016 and December 31, 2015 (in thousands): March 31, 2016 December 31, 2015 Due in one year or less $ 36,531 $ 29,414 Due after one year 18,387 22,336 Total $ 54,918 $ 51,750 For certain other financial instruments, including accounts receivable, accounts payable and other current liabilities, the carrying amounts approximate their fair value due to the relatively short maturity of these balances. Derivative Instruments and Hedging Our foreign currency exposures typically arise from foreign operations and sales in foreign currencies for subscriptions to our customer service platform. In September 2015, we implemented a hedging program to mitigate the impact 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 hedges as cash flow hedges. Our foreign currency forward contracts generally have maturities of 15 months or less but can extend up to 24 months. As of March 31, 2016, the balance of other accumulated comprehensive income included an unrealized gain of $1.9 million related to the effective portion of changes in the fair value of foreign currency forward contracts designated as cash flow hedges. We expect to reclassify $1.1 million from accumulated other comprehensive income into earnings over the next 12 months associated with our cash flow hedges. The following tables present information about derivative instruments on our consolidated balance sheets as of March 31, 2016 and December 31, 2015 (in thousands): March 31, 2016 Asset Derivatives Liability Derivatives Derivative Instrument Balance Sheet Location Fair Value (Level 2) Balance Sheet Location Fair Value (Level 2) Foreign currency forward contracts Other current assets 1,867 Accrued liabilities 740 Foreign currency forward contracts Other assets 719 Other liabilities 6 Total $ 2,586 $ 746 December 31, 2015 Asset Derivatives Liability Derivatives Derivative Instrument Balance Sheet Location Fair Value (Level 2) Balance Sheet Location Fair Value (Level 2) Foreign currency forward contracts Other current assets 408 Accrued liabilities 1,081 Total $ 408 $ 1,081 Our foreign currency forward contracts had a total notional value of $99.9 million and $60.8 million as of March 31, 2016 and December 31, 2015, respectively. The following table presents information about our derivative instruments on the statement of operations for the three months ended March 31, 2016 (in thousands): Three Months Ended March 31, 2016 Hedging Instrument Location of Gain (Loss) Reclassified into Earnings Gain Recognized in AOCI Loss Reclassified from AOCI into Earnings Foreign currency forward contracts Revenue, cost of revenue, operating expenses 2,348 (262 ) Total $ 2,348 $ (262 ) There were no gains or losses on derivative instruments for the three months ended March 31, 2015. All derivatives have been designated as hedging instruments. Amounts recognized in earnings related to excluded time value and hedge ineffectiveness were not material for the three months ended March 31, 2016. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | Note 4. Property and Equipment Property and equipment, net consists of the following (in thousands): March 31, 2016 December 31, 2015 Capitalized internal-use software $ 24,254 $ 22,418 Hosting equipment 29,107 26,920 Leasehold improvements 20,492 19,577 Computer equipment and software 8,587 7,682 Furniture and fixtures 5,925 5,739 Construction in progress 2,438 4,157 Total 90,803 86,493 Less: accumulated depreciation and amortization (35,260 ) (29,953 ) Property and equipment, net $ 55,543 $ 56,540 Depreciation expense was $3.7 million and $2.3 million for the three months ended March 31, 2016 and 2015, respectively. Amortization expense of capitalized internal-use software totaled $1.7 million and $1.5 million for the three months ended March 31, 2016 and 2015, respectively. The carrying value of capitalized internal-use software at March 31, 2016 and December 31, 2015 was $14.3 million and $14.1 million, respectively, including $1.3 million and $1.5 million in construction in progress, respectively. |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets | Note 5. Goodwill and Acquired Intangible Assets The changes in the carrying amount of goodwill for the three months ended March 31, 2016 are as follows (in thousands): Balance as of December 31, 2015 $ 45,346 Goodwill adjustments 37 Foreign currency translation adjustments 459 Balance as of March 31, 2016 $ 45,842 Acquired intangible assets subject to amortization as of March 31, 2016 and December 31, 2015 consist of the following (in thousands). As of March 31, 2016 Cost Accumulated Amortization Foreign Currency Translation Adjustments Net Remaining Useful Life (In years) Developed technology $ 14,000 $ (3,991 ) $ (147 ) $ 9,859 3.5 Customer relationships 1,800 (715 ) (43 ) 1,045 2.8 $ 15,800 $ (4,706 ) $ (190 ) $ 10,904 As of December 31, 2015 Cost Accumulated Amortization Foreign Currency Translation Adjustments Net Remaining Useful Life (In years) Developed technology $ 14,000 $ (3,133 ) $ (279 ) $ 10,587 3.7 Customer relationships 1,800 (606 ) (78 ) 1,117 3.1 $ 15,800 $ (3,739 ) $ (357 ) $ 11,704 Amortization expense of purchased intangible assets for the three months ended March 31, 2016 and 2015 was $0.9 million and $0.4 million, respectively. Estimated future amortization expense as of March 31, 2016 is as follows (in thousands): Remainder of 2016 $ 2,830 2017 3,364 2018 2,132 2019 2,066 2020 512 $ 10,904 |
Credit Facility
Credit Facility | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Credit Facility | Note 6. Credit Facility Until its termination in June 2015, we had a credit facility with Silicon Valley Bank consisting of a $20.0 million revolving line of credit and a $10.0 million equipment line of credit. The revolving line of credit bore interest at the prime rate plus 2.0% per annum prior to our IPO in May 2014 and was reduced to the prime rate upon the consummation of our IPO. Borrowings on the equipment line of credit bore interest of 2.5% per annum. In June 2014, we repaid all outstanding principal and accrued interest under the revolving line of credit. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7. Commitments and Contingencies Leases We lease office space under noncancelable operating leases with various expiration dates. Certain of the office space lease agreements contain rent holidays or rent escalation provisions. Rent holiday and rent escalation provisions are considered in determining the straight-line expense to be recorded over the lease term. The lease term begins on the date of initial possession of the leased property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. Rent expense was $2.2 million and $1.6 million for the three months ended March 31, 2016 and 2015, respectively. We leased computer equipment from various parties under capital lease agreements that expired in March 2015. Litigation and Loss Contingencies We accrue estimates for resolution of legal and other contingencies when losses are probable and estimable. From time to time, we may become a party to litigation and subject to claims incident to the ordinary course of business, including intellectual property claims, labor and employment claims, and threatened claims, breach of contract claims, tax, and other matters. We currently have no material pending litigation. We are not currently aware of any litigation matters or loss contingencies that would be expected to have a material adverse effect on our business, consolidated financial position, 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 customer service platform, live chat software, analytics software, 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 the accompanying condensed 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 and permitting 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 the accompanying 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, 2016 | |
Equity [Abstract] | |
Common Stock and Stockholders' Equity | Note 8. Common Stock and Stockholders’ Equity Common Stock As of March 31, 2016 and December 31, 2015, there were 400 million shares authorized for issuance with a par value of $0.01 per share. There were 92.0 million and 90.9 million shares of common stock issued and 91.5 million and 90.3 million shares outstanding as of March 31, 2016 and December 31, 2015, respectively. Included within the number of shares issued and outstanding were 0.2 million and 0.3 million shares of common stock subject to repurchase, as of March 31, 2016 and December 31, 2015, respectively. Preferred Stock As of March 31, 2016 and December 31, 2015, 10.0 million shares of preferred stock were 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 our 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 eighteen-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 an offering period or the fair market value of our common stock at the end of the purchase period. No shares of common stock were purchased under the ESPP during the three months ended March 31, 2016. Pursuant to the terms of the ESPP, the number of shares reserved under the ESPP increased by 0.9 million shares on January 1, 2016. As of March 31, 2016, 3.8 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 IPO 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 4.5 million shares on January 1, 2016. As of March 31, 2016, we had 7.5 million shares of common stock available for future grants under the 2014 Plan. The following table summarizes our stock option and RSU award activities for the three months ended March 31, 2016 (in thousands, except per share information): Options Outstanding RSUs Outstanding Weighted Average Weighted Shares Weighted Remaining Aggregate Average Available Number of Average Contractual Intrinsic Outstanding Grant Date for Grant Shares Exercise Term Value RSUs Fair Value (In years) Outstanding — January 1, 2016 4,323 10,778 $ 11.94 7.96 $ 156,262 6,417 $ 19.54 Increase in authorized shares 4,516 Stock options granted (110 ) 110 18.48 RSUs granted (1,426 ) 1,426 14.77 Stock options exercised (386 ) 4.96 RSUs vested (785 ) 16.70 Stock options forfeited or canceled 72 (72 ) 24.32 RSUs forfeited or cancelled 91 (91 ) 20.67 Outstanding — March 31, 2016 7,466 10,430 $ 12.18 7.78 $ 91,213 6,967 $ 18.87 Aggregate intrinsic value for options outstanding represents the difference between the closing stock price of our common stock and the exercise price of outstanding, in-the-money options. Our closing stock price as reported on the New York Stock Exchange as of March 31, 2016 was $20.93. As of March 31, 2016, we had a total of $167.8 million in future share-based compensation expense related to all equity awards, net of estimated forfeitures, to be recognized over a weighted average period of 2.9 years. Early Exercise of Stock Options and Purchase of Unvested Stock Awards Certain of our stock options permit early exercise. Common stock purchased pursuant to an early exercise of stock options or unvested stock awards is not deemed to be outstanding for financial reporting purposes until those shares vest. Therefore, cash received in exchange for unvested shares is recorded as a liability and is transferred into common stock and additional paid-in capital as the shares vest. Upon termination of service, we may, at our discretion, repurchase unvested shares acquired through early exercise of stock options or purchase of unvested stock awards at a price equal to the price per share paid upon the exercise of such options or the purchase of such unvested stock awards. As of March 31, 2016 and December 31, 2015, there were 0.2 million and 0.3 million shares, respectively, outstanding as a result of the early exercise of stock options and purchase of unvested stock awards by our employees and directors that were classified as accrued liabilities for an aggregated amount of $0.8 million and $1.0 million, respectively. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Note 9. 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 outstanding share-based awards, 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 March 31, 2016 2015 Net loss $ (27,171 ) $ (19,168 ) Basic shares: Weighted-average shares used to compute basic net loss per share 90,519 76,338 Diluted shares: Weighted-average shares used to compute diluted net loss per share 90,519 76,338 Net loss per share: Basic and diluted $ (0.30 ) $ (0.25 ) The anti-dilutive securities excluded from the shares used to calculate the diluted net loss per share are as follows (in thousands): As of March 31, 2016 2015 Shares subject to outstanding common stock options and employee stock purchase plan 10,500 12,637 Restricted stock units 6,967 4,319 17,467 16,956 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10. Income Taxes The effective tax rates for the three months ended March 31, 2016 and 2015 were less than 2%. The effective tax rates differ 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. There were no material changes to the unrecognized tax benefits during the three months ended March 31, 2016 and 2015. In April 2009, Zendesk’s entity in Denmark (“Zendesk Denmark”) transferred certain assets to Zendesk’s U.S. entity. In April 2015, the Danish Tax Authority (“SKAT”) issued a letter of intent in contemplation of adjusting the value of the reported asset transfer. We submitted a written rebuttal to SKAT’s proposal in August 2015. In March 2016, we received an assessment from SKAT indicating that SKAT believes the value of the transferred assets to be $5.4 million. SKAT’s assessment would give rise to a potential payment of $1.9 million, including income tax and interest. We disagree with SKAT’s findings and intend to contest this assessment with the Danish National Tax Tribunal and we believe that the ultimate outcome of this matter will not have a material impact on our financial condition, liquidity or cash flows. |
Geographic Information
Geographic Information | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Geographic Information | Note 11. 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 areas, as determined based on the billing address of our customers (in thousands): Three Months Ended March 31, 2016 2015 United States $ 37,567 $ 22,852 EMEA 18,831 12,576 Other 12,061 6,806 Total $ 68,459 $ 42,234 Long-Lived Assets The following table presents our long-lived assets by geographic areas (in thousands): As of As of March 31, 2016 December 31, 2015 United States $ 26,560 $ 26,696 EMEA 9,767 10,351 APAC 4,949 5,332 Total $ 41,276 $ 42,379 The carrying values of capitalized internal-use software and intangible assets are excluded from the balance of long-lived assets presented in the table above. |
Overview and Basis of Present19
Overview and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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, 2015, filed on February 26, 2016. 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. The consolidated balance sheet as of December 31, 2015 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 the financial position, results of operations, our comprehensive loss 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, 2016. |
Follow-On Public Offering | Follow-On Public Offering In March 2015, we completed a follow-on public offering, in which we issued 8.8 million shares of our common stock at a public offering price of $22.75 per share. We received net proceeds of $190.1 million after deducting underwriting discounts and commissions of $8.7 million and other offering expenses of $0.9 million. |
Use of Estimates | Use of Estimates The preparation of 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 fair value of share-based awards, acquired intangible assets and goodwill, unrecognized tax benefits, the useful lives of acquired intangible assets and property and equipment, and the capitalization and estimated useful life of our capitalized internal-use software. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from those estimates. |
Concentrations of Risk | Concentrations of Risk As of March 31, 2016, 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, 2016 or 2015. |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued and Adopted Accounting Pronouncements In May 2014, the FASB issued new revenue guidance that provides principles for recognizing revenue to which an entity expects to be entitled for the transfer of promised goods or services to customers. In August 2015, the FASB deferred the effective date of adoption by one year. As currently issued and amended, the new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, though early adoption is permitted for annual reporting periods beginning after December 15, 2016. The amendment may be applied retrospectively to each prior period presented, or with the cumulative effect recognized as of the date of initial adoption. We have not yet selected a transition method and continue to evaluate the effect of the standard on our consolidated financial statements, including revenue and commissions. In September 2015, the FASB issued ASU 2015-16 “Simplifying the Accounting for Measurement-Period Adjustments,” which requires that an acquirer in a business combination recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The new standard is required to be applied prospectively. We adopted this guidance in the first quarter of 2016. The adoption of this standard did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 regarding ASC Topic 842 "Leases." This new standard requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets and eliminates certain real estate-specific provisions. The new guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09 regarding Topic 718 "Compensation - Stock Compensation." This amendment changes certain aspects of accounting for share-based compensation to employees, including the recognition of income tax effects of awards when the awards vest or are settled, requirements on net share settlement to cover tax withholding, and accounting for forfeitures. The new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements. |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
We Are Cloud, Inc | |
Schedule of Purchase Price Allocation for Acquisitions | The total purchase price was allocated to assets acquired and liabilities assumed as set forth below (in thousands). Net tangible assets acquired $ 2,269 Net deferred tax liability recognized (1,979 ) Identifiable intangible assets: Developed technology 8,800 Customer relationships 500 Goodwill 36,767 Total purchase price $ 46,357 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Financial Instruments Owned At Fair Value [Abstract] | |
Assets Measured at Fair Value on Recurring Basis | The following tables present information about our cash equivalents and marketable securities measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 based on the three-tier fair value hierarchy (in thousands): Fair Value Measurement at March 31, 2016 Level 1 Level 2 Total Description Corporate securities $ — $ 29,696 $ 29,696 Money market funds 18,556 — 18,556 Asset-backed securities — 10,025 10,025 U.S. treasury securities — 9,211 9,211 Commercial paper — 3,985 3,985 Agency securities — 2,001 2,001 Total $ 18,556 $ 54,918 $ 73,474 Included in cash and cash equivalents $ 18,556 Included in marketable securities $ 54,918 Fair Value Measurement at December 31, 2015 Level 1 Level 2 Total Description Corporate securities $ — $ 31,761 $ 31,761 Money market funds 21,338 — 21,338 Asset-backed securities — 7,998 7,998 Commercial paper — 5,992 5,992 U.S. treasury securities — 4,001 4,001 Agency securities — 1,998 1,998 Total $ 21,338 $ 51,750 $ 73,088 Included in cash and cash equivalents $ 21,338 Included in marketable securities $ 51,750 |
Schedule of Marketable Securities Classified by Contractual Maturity | The following table classifies our marketable securities by contractual maturity as of March 31, 2016 and December 31, 2015 (in thousands): March 31, 2016 December 31, 2015 Due in one year or less $ 36,531 $ 29,414 Due after one year 18,387 22,336 Total $ 54,918 $ 51,750 |
Schedule of Derivative Instruments on Consolidated Balance Sheets | The following tables present information about derivative instruments on our consolidated balance sheets as of March 31, 2016 and December 31, 2015 (in thousands): March 31, 2016 Asset Derivatives Liability Derivatives Derivative Instrument Balance Sheet Location Fair Value (Level 2) Balance Sheet Location Fair Value (Level 2) Foreign currency forward contracts Other current assets 1,867 Accrued liabilities 740 Foreign currency forward contracts Other assets 719 Other liabilities 6 Total $ 2,586 $ 746 December 31, 2015 Asset Derivatives Liability Derivatives Derivative Instrument Balance Sheet Location Fair Value (Level 2) Balance Sheet Location Fair Value (Level 2) Foreign currency forward contracts Other current assets 408 Accrued liabilities 1,081 Total $ 408 $ 1,081 |
Schedule of Derivative Instruments on Statement of Operations | The following table presents information about our derivative instruments on the statement of operations for the three months ended March 31, 2016 (in thousands): Three Months Ended March 31, 2016 Hedging Instrument Location of Gain (Loss) Reclassified into Earnings Gain Recognized in AOCI Loss Reclassified from AOCI into Earnings Foreign currency forward contracts Revenue, cost of revenue, operating expenses 2,348 (262 ) Total $ 2,348 $ (262 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Components of Property and Equipment | Property and equipment, net consists of the following (in thousands): March 31, 2016 December 31, 2015 Capitalized internal-use software $ 24,254 $ 22,418 Hosting equipment 29,107 26,920 Leasehold improvements 20,492 19,577 Computer equipment and software 8,587 7,682 Furniture and fixtures 5,925 5,739 Construction in progress 2,438 4,157 Total 90,803 86,493 Less: accumulated depreciation and amortization (35,260 ) (29,953 ) Property and equipment, net $ 55,543 $ 56,540 |
Goodwill and Acquired Intangi23
Goodwill and Acquired Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the three months ended March 31, 2016 are as follows (in thousands): Balance as of December 31, 2015 $ 45,346 Goodwill adjustments 37 Foreign currency translation adjustments 459 Balance as of March 31, 2016 $ 45,842 |
Summary of Intangible Assets Acquired | Acquired intangible assets subject to amortization as of March 31, 2016 and December 31, 2015 consist of the following (in thousands). As of March 31, 2016 Cost Accumulated Amortization Foreign Currency Translation Adjustments Net Remaining Useful Life (In years) Developed technology $ 14,000 $ (3,991 ) $ (147 ) $ 9,859 3.5 Customer relationships 1,800 (715 ) (43 ) 1,045 2.8 $ 15,800 $ (4,706 ) $ (190 ) $ 10,904 As of December 31, 2015 Cost Accumulated Amortization Foreign Currency Translation Adjustments Net Remaining Useful Life (In years) Developed technology $ 14,000 $ (3,133 ) $ (279 ) $ 10,587 3.7 Customer relationships 1,800 (606 ) (78 ) 1,117 3.1 $ 15,800 $ (3,739 ) $ (357 ) $ 11,704 |
Summary of Estimated Future Amortization Expense | Estimated future amortization expense as of March 31, 2016 is as follows (in thousands): Remainder of 2016 $ 2,830 2017 3,364 2018 2,132 2019 2,066 2020 512 $ 10,904 |
Common Stock and Stockholders24
Common Stock and Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Summary of Stock Option and RSU Award Activity | The following table summarizes our stock option and RSU award activities for the three months ended March 31, 2016 (in thousands, except per share information): Options Outstanding RSUs Outstanding Weighted Average Weighted Shares Weighted Remaining Aggregate Average Available Number of Average Contractual Intrinsic Outstanding Grant Date for Grant Shares Exercise Term Value RSUs Fair Value (In years) Outstanding — January 1, 2016 4,323 10,778 $ 11.94 7.96 $ 156,262 6,417 $ 19.54 Increase in authorized shares 4,516 Stock options granted (110 ) 110 18.48 RSUs granted (1,426 ) 1,426 14.77 Stock options exercised (386 ) 4.96 RSUs vested (785 ) 16.70 Stock options forfeited or canceled 72 (72 ) 24.32 RSUs forfeited or cancelled 91 (91 ) 20.67 Outstanding — March 31, 2016 7,466 10,430 $ 12.18 7.78 $ 91,213 6,967 $ 18.87 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 2015 Net loss $ (27,171 ) $ (19,168 ) Basic shares: Weighted-average shares used to compute basic net loss per share 90,519 76,338 Diluted shares: Weighted-average shares used to compute diluted net loss per share 90,519 76,338 Net loss per share: Basic and diluted $ (0.30 ) $ (0.25 ) |
Schedule of Anti-Dilutive Securities Excluded from the Diluted per Share Calculation | The anti-dilutive securities excluded from the shares used to calculate the diluted net loss per share are as follows (in thousands): As of March 31, 2016 2015 Shares subject to outstanding common stock options and employee stock purchase plan 10,500 12,637 Restricted stock units 6,967 4,319 17,467 16,956 |
Geographic Information (Tables)
Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Areas | The following table presents our revenue by geographic areas, as determined based on the billing address of our customers (in thousands): Three Months Ended March 31, 2016 2015 United States $ 37,567 $ 22,852 EMEA 18,831 12,576 Other 12,061 6,806 Total $ 68,459 $ 42,234 |
Schedule of Long-Lived Assets by Geographic Areas | The following table presents our long-lived assets by geographic areas (in thousands): As of As of March 31, 2016 December 31, 2015 United States $ 26,560 $ 26,696 EMEA 9,767 10,351 APAC 4,949 5,332 Total $ 41,276 $ 42,379 |
Overview and Basis of Present27
Overview and Basis of Presentation - Additional Information (Details) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2015USD ($)$ / sharesshares | Mar. 31, 2016Customer$ / shares | Mar. 31, 2015USD ($)Customer$ / shares | |
Overview And Basis Of Presentation [Line Items] | |||
Year founded | 2,007 | ||
Reincorporated date | Apr. 30, 2009 | ||
Share price | $ / shares | $ 20.93 | ||
Proceeds from follow-on public offering, net of issuance costs | $ 190,794 | ||
Customer Concentration Risk | Accounts Receivable | |||
Overview And Basis Of Presentation [Line Items] | |||
Number of customers | Customer | 0 | ||
Customer Concentration Risk | Accounts Receivable | Maximum | |||
Overview And Basis Of Presentation [Line Items] | |||
Percentage of total revenue or receivables | 10.00% | ||
Customer Concentration Risk | Sales Revenue, Net | |||
Overview And Basis Of Presentation [Line Items] | |||
Number of customers | Customer | 0 | 0 | |
Customer Concentration Risk | Sales Revenue, Net | Maximum | |||
Overview And Basis Of Presentation [Line Items] | |||
Percentage of total revenue or receivables | 10.00% | 10.00% | |
Follow On Public Offering | |||
Overview And Basis Of Presentation [Line Items] | |||
Shares of common stock sold in initial public offering | shares | 8.8 | ||
Share price | $ / shares | $ 22.75 | $ 22.75 | |
Proceeds from follow-on public offering, net of issuance costs | $ 190,100 | ||
Underwriting discounts and commission on IPO | 8,700 | ||
Offering expenses | $ 900 | $ 900 |
Business Combination - Addition
Business Combination - Additional Information (Details) - USD ($) shares in Thousands | Oct. 13, 2015 | Mar. 31, 2016 |
Business Acquisition [Line Items] | ||
Adjustments related to tangible assets and liabilities acquired | $ 37,000 | |
RSUs issued pursuant to retention plan, in connection with the acquisition | 1,426 | |
We Are Cloud, Inc | ||
Business Acquisition [Line Items] | ||
Percent of outstanding shares acquired | 100.00% | |
Business acquisition, fair value of consideration transferred, cash | $ 46,400,000 | |
Cash portion of fair value consideration transferred | $ 7,000,000 | |
Number of months consideration held in escrow, to be released | 12 months | |
Business acquisition, transaction costs incurred | $ 1,000,000 | |
We Are Cloud, Inc | Restricted Stock Units | ||
Business Acquisition [Line Items] | ||
RSUs issued pursuant to retention plan, in connection with the acquisition | 500 | |
Vesting period | 3 years | |
We Are Cloud, Inc | Developed Technology | ||
Business Acquisition [Line Items] | ||
Acquired intangible assets, useful lives | 4 years 6 months | |
We Are Cloud, Inc | Customer Relationships | ||
Business Acquisition [Line Items] | ||
Acquired intangible assets, useful lives | 4 years 6 months | |
We Are Cloud, Inc | Maximum | ||
Business Acquisition [Line Items] | ||
Number of months consideration were held in escrow | 18 months |
Business Combination - Schedule
Business Combination - Schedule of Purchase Price Allocation for Acquisitions (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Oct. 13, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 45,842 | $ 45,346 | |
We Are Cloud, Inc | |||
Business Acquisition [Line Items] | |||
Net tangible assets acquired | $ 2,269 | ||
Net deferred tax liability recognized | (1,979) | ||
Goodwill | 36,767 | ||
Total purchase price | 46,357 | ||
We Are Cloud, Inc | Developed Technology | |||
Business Acquisition [Line Items] | |||
Intangible assets | 8,800 | ||
We Are Cloud, Inc | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 500 |
Financial Instruments - Financi
Financial Instruments - Financial Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | $ 73,474 | $ 73,088 |
Included in marketable securities | 54,918 | 51,750 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 18,556 | 21,338 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 54,918 | 51,750 |
Corporate securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 29,696 | 31,761 |
Corporate securities | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 29,696 | 31,761 |
Money market funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 18,556 | 21,338 |
Money market funds | Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 18,556 | 21,338 |
Asset-backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 10,025 | 7,998 |
Asset-backed Securities | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 10,025 | 7,998 |
U.S. treasury securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 9,211 | 4,001 |
U.S. treasury securities | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 9,211 | 4,001 |
Commercial paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 3,985 | 5,992 |
Commercial paper | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 3,985 | 5,992 |
Agency securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 2,001 | 1,998 |
Agency securities | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total fair value of financial assets | 2,001 | 1,998 |
Fair Value Measurements, Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Included in cash and cash equivalents | 18,556 | 21,338 |
Included in marketable securities | $ 54,918 | $ 51,750 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Transfer from fair value measurement level 1 to level 2 | $ 0 | ||
Transfer from fair value measurement level 2 to level 1 | 0 | ||
Gross unrealized gains or losses for cash equivalent and marketable securities | 0 | $ 0 | |
Securities that were in an unrealized loss position for more than 12 months. | $ 0 | 0 | |
Gains / losses on derivative instruments | $ 0 | ||
Maximum | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Foreign currency forward contracts maturity period | 15 months | ||
Foreign currency forward contracts extended maturity period | 24 months | ||
Foreign currency forward contracts | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Unrealized gain related to effective portion of changes in fair value of foreign currency forward contracts | $ 1,900,000 | ||
Reclassification from accumulated other comprehensive income into earnings over next 12 month | 1,100,000 | ||
Notional value | 99,900,000 | 60,800,000 | |
Level 3 | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Securities within Level 3 of the fair value hierarchy | $ 0 | $ 0 |
Financial Instruments - Marketa
Financial Instruments - Marketable Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Due in one year or less | $ 36,531 | $ 29,414 |
Due after one year | 18,387 | 22,336 |
Total | $ 54,918 | $ 51,750 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Derivative Instruments on Consolidated Balance Sheets (Details) - Level 2 - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Derivatives Fair Value [Line Items] | ||
Asset Derivatives, Fair Value | $ 2,586 | $ 408 |
Liability Derivatives, Fair Value | 746 | 1,081 |
Foreign currency forward contracts | Other current assets | ||
Derivatives Fair Value [Line Items] | ||
Asset Derivatives, Fair Value | 1,867 | 408 |
Foreign currency forward contracts | Other assets | ||
Derivatives Fair Value [Line Items] | ||
Asset Derivatives, Fair Value | 719 | |
Foreign currency forward contracts | Accrued liabilities | ||
Derivatives Fair Value [Line Items] | ||
Liability Derivatives, Fair Value | 740 | $ 1,081 |
Foreign currency forward contracts | Other liabilities | ||
Derivatives Fair Value [Line Items] | ||
Liability Derivatives, Fair Value | $ 6 |
Financial Instruments - Sched34
Financial Instruments - Schedule of Derivative Instruments on Statement of Operations (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Derivative Instruments Gain Loss [Line Items] | |
Gain Recognized in AOCI | $ 2,348 |
Loss Reclassified from AOCI into Earnings | (262) |
Revenue, cost of revenue, operating expenses | Foreign currency forward contracts | |
Derivative Instruments Gain Loss [Line Items] | |
Gain Recognized in AOCI | 2,348 |
Loss Reclassified from AOCI into Earnings | $ (262) |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 90,803 | $ 86,493 |
Less: accumulated depreciation and amortization | (35,260) | (29,953) |
Property and equipment, net | 55,543 | 56,540 |
Capitalized Internal-Use Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 24,254 | 22,418 |
Hosting Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 29,107 | 26,920 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 20,492 | 19,577 |
Computer Equipment and Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 8,587 | 7,682 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 5,925 | 5,739 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 2,438 | $ 4,157 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 3.7 | $ 2.3 | |
Amortization expense of capitalized internal-use software | 1.7 | $ 1.5 | |
Carrying value of capitalized internal-use software | 14.3 | $ 14.1 | |
Capitalized internal-use software included in construction in progress | $ 1.3 | $ 1.5 |
Goodwill and Acquired Intangi37
Goodwill and Acquired Intangible Assets - Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Beginning balance | $ 45,346 |
Goodwill adjustments | 37 |
Foreign currency translation adjustments | 459 |
Ending balance | $ 45,842 |
Goodwill and Acquired Intangi38
Goodwill and Acquired Intangible Assets - Acquired Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 15,800 | $ 15,800 |
Accumulated Amortization | (4,706) | (3,739) |
Foreign Currency Translation Adjustments | (190) | (357) |
Net | 10,904 | 11,704 |
Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 14,000 | 14,000 |
Accumulated Amortization | (3,991) | (3,133) |
Foreign Currency Translation Adjustments | (147) | (279) |
Net | $ 9,859 | $ 10,587 |
Remaining Useful Life | 3 years 6 months | 3 years 8 months 12 days |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 1,800 | $ 1,800 |
Accumulated Amortization | (715) | (606) |
Foreign Currency Translation Adjustments | (43) | (78) |
Net | $ 1,045 | $ 1,117 |
Remaining Useful Life | 2 years 9 months 18 days | 3 years 1 month 6 days |
Goodwill and Acquired Intangi39
Goodwill and Acquired Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 0.9 | $ 0.4 |
Goodwill and Acquired Intangi40
Goodwill and Acquired Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Remainder of 2016 | $ 2,830 | |
2,017 | 3,364 | |
2,018 | 2,132 | |
2,019 | 2,066 | |
2,020 | 512 | |
Net | $ 10,904 | $ 11,704 |
Credit Facility - Additional In
Credit Facility - Additional Information (Details) - Silicon Valley Bank | 1 Months Ended |
Jun. 30, 2015USD ($) | |
Revolving Line of Credit | |
Line Of Credit Facility [Line Items] | |
Credit facility | $ 20,000,000 |
Percentage of interest rate above the prime rate | 2.00% |
Equipment Line of Credit | |
Line Of Credit Facility [Line Items] | |
Credit facility | $ 10,000,000 |
Credit facility interest rate | 2.50% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Other Commitments [Line Items] | ||
Rent expense | $ 2.2 | $ 1.6 |
Capital Lease Agreements | ||
Other Commitments [Line Items] | ||
Lease expiration date | Mar. 31, 2015 |
Common Stock and Stockholders43
Common Stock and Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 02, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Class Of Stock [Line Items] | |||
Common stock, shares authorized | 400,000,000 | 400,000,000 | |
Common stock, par value | $ 0.01 | $ 0.01 | |
Common stock, shares issued | 92,000,000 | 90,900,000 | |
Common stock, shares outstanding | 91,500,000 | 90,300,000 | |
Common stock shares outstanding, subject to repurchase | 200,000 | 300,000 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |
Preferred stock, par value | $ 0.01 | $ 0.01 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award Increase in Number of Shares Reserved and Available for Issuance | 4,516,000 | ||
Shares of common stock available for issuance | 7,466,000 | 4,323,000 | |
Share price | $ 20.93 | ||
Future period share-based compensation expense | $ 167.8 | ||
Future period share-based compensation expense, period to recognized | 2 years 10 months 24 days | ||
Shares outstanding as a result of early exercise of stock options and purchase of unvested stock awards | 200,000 | 300,000 | |
Accrued liability for shares outstanding as a result of early exercise of stock options and purchase of unvested stock awards | $ 0.8 | $ 1 | |
2009 Stock Option and Grant Plan | |||
Class Of Stock [Line Items] | |||
Shares of common stock available for issuance | 0 | ||
2014 Plan | Employee Stock Option | |||
Class Of Stock [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award Increase in Number of Shares Reserved and Available for Issuance | 4,500,000 | ||
Shares of common stock available for issuance | 7,500,000 | ||
Employee Stock Purchase Plan | |||
Class Of Stock [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award Increase in Number of Shares Reserved and Available for Issuance | 900,000 | ||
Percentage of purchase price of shares lower of the fair market value of common stock employees are able to purchase shares | 85.00% | ||
Common shares purchased | 0 | ||
Shares of common stock available for issuance | 3,800,000 |
Common Stock and Stockholders44
Common Stock and Stockholders' Equity - Summary of Stock Option and RSU Award Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Shares Available for Grant | ||
Balance at the beginning of the period | 4,323,000 | |
Increase in authorized shares | 4,516,000 | |
Stock options granted | (110,000) | |
RSUs granted | (1,426,000) | |
Stock options forfeited or canceled | 72,000 | |
RSUs forfeited or cancelled | 91,000 | |
Balance at the end of the period | 7,466,000 | 4,323,000 |
Number of Shares | ||
Balance at the beginning of the period | 10,778,000 | |
Stock options granted | 110,000 | |
Stock options exercised | (386,000) | |
Stock options forfeited or canceled | (72,000) | |
Balance at the end of the period | 10,430,000 | 10,778,000 |
Weighted-Average Exercise Price | ||
Balance at the beginning of the period | $ 11.94 | |
Stock options granted | 18.48 | |
Stock options exercised | 4.96 | |
Stock options forfeited or canceled | 24.32 | |
Balance at the end of the period | $ 12.18 | $ 11.94 |
Weighted Average Remaining Contractual Term | ||
Options Outstanding, Weighted-average remaining contractual term | 7 years 9 months 11 days | 7 years 11 months 16 days |
Aggregate Intrinsic Value | ||
Options Outstanding, Aggregate Intrinsic Value, Balance at beginning of period | $ 156,262 | |
Options Outstanding, Aggregate Intrinsic Value, Balance at end of period | $ 91,213 | $ 156,262 |
Outstanding RSUs | ||
Balance at the beginning of the period | 6,417,000 | |
RSUs granted | 1,426,000 | |
RSUs vested | (785,000) | |
RSUs forfeited or cancelled | (91,000) | |
Balance at the end of the period | 6,967,000 | 6,417,000 |
Weighted-Average Grant Date Fair Value | ||
Balance at the beginning of the period | $ 19.54 | |
RSUs granted | 14.77 | |
RSUs vested | 16.70 | |
RSUs forfeited or cancelled | 20.67 | |
Balance at the end of the period | $ 18.87 | $ 19.54 |
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, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (27,171) | $ (19,168) |
Basic shares: | ||
Weighted-average shares used to compute basic net loss per share | 90,519 | 76,338 |
Diluted shares: | ||
Weighted-average shares used to compute diluted net loss per share | 90,519 | 76,338 |
Net loss per share: | ||
Basic and diluted | $ (0.30) | $ (0.25) |
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, 2016 | Mar. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share amount | 17,467 | 16,956 |
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 | 10,500 | 12,637 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share amount | 6,967 | 4,319 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | |
Schedule Of Effective Tax Rates [Line Items] | |||
Changes in unrecognized tax benefits | $ 0 | $ 0 | |
Income tax examination, penalties and interest expense | $ 1,900,000 | ||
Danish Tax Authority ("SKAT") | |||
Schedule Of Effective Tax Rates [Line Items] | |||
Income tax examination, valuation of transferred assets | $ 5,400,000 | ||
Maximum | |||
Schedule Of Effective Tax Rates [Line Items] | |||
Effective income tax rate, percent | 2.00% | 2.00% |
Geographic Information - Additi
Geographic Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2016segment | |
Segment Reporting [Abstract] | |
Number of reportable segment | 1 |
Geographic Information - Schedu
Geographic Information - Schedule of Revenue by Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Revenue | $ 68,459 | $ 42,234 |
United States | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Revenue | 37,567 | 22,852 |
EMEA | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Revenue | 18,831 | 12,576 |
Other | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Revenue | $ 12,061 | $ 6,806 |
Geographic Information - Sche50
Geographic Information - Schedule of Long-Lived Assets by Geographic Areas (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Mar. 31, 2015 |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | $ 41,276 | $ 42,379 |
United States | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | 26,560 | 26,696 |
EMEA | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | 9,767 | 10,351 |
APAC | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | $ 4,949 | $ 5,332 |