Zendesk (ZEN) 10-Q 3 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 31, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
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		95,338,742

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current Assets:
Cash and cash equivalents	$ 77,589	$ 216,226
Marketable securities	133,758	29,414
Accounts receivable, net of allowance for doubtful accounts of $1,213 and $763 as of September 30, 2016 and December 31, 2015, respectively	37,645	26,168
Prepaid expenses and other current assets	19,437	11,423
Total current assets	268,429	283,231
Marketable securities, noncurrent	71,139	22,336
Property and equipment, net	57,507	56,540
Goodwill and intangible assets, net	54,848	57,050
Other assets	4,504	3,529
Total assets	456,427	422,686
Current liabilities:
Accounts payable	5,491	9,332
Accrued liabilities	12,839	9,742
Accrued compensation and related benefits	17,929	14,115
Deferred revenue	110,174	84,210
Total current liabilities	146,433	117,399
Deferred revenue, noncurrent	1,538	1,405
Other liabilities	9,922	10,592
Total liabilities	157,893	129,396
Commitments and contingencies
Stockholders’ equity:
Preferred stock	0	0
Common stock	953	905
Additional paid-in capital	595,135	511,183
Accumulated other comprehensive loss	(1,730)	(2,225)
Accumulated deficit	(295,172)	(215,921)
Treasury stock at cost (0.5 million shares as of September 30, 2016 and December 31, 2015)	(652)	(652)
Total stockholders’ equity	298,534	293,290
Total liabilities and stockholders’ equity	$ 456,427	$ 422,686

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands, shares in Millions	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 1,213	$ 763
Treasury stock, shares (in shares)	0.5	0.5

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands		3 Months Ended			9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015		Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Revenue		$ 80,717	$ 55,661		$ 223,376	$ 146,122
Cost of revenue	[1]	23,866	17,039		68,318	47,491
Gross profit		56,851	38,622		155,058	98,631
Operating expenses:
Research and development	[1]	22,953	16,031		66,683	43,517
Sales and marketing	[1]	43,899	29,079		119,421	79,725
General and administrative	[1]	16,212	12,319		48,149	33,982
Total operating expenses		83,064	57,429	[1]	234,253	157,224	[1]
Operating loss		(26,213)	(18,807)		(79,195)	(58,593)
Other income (expense), net		681	145		745	(428)
Loss before provision for income taxes		(25,532)	(18,662)		(78,450)	(59,021)
Provision for income taxes		294	262		800	554
Net loss		$ (25,826)	$ (18,924)		$ (79,250)	$ (59,575)
Net loss per share, basic and diluted (usd per share)		$ (0.27)	$ (0.22)		$ (0.86)	$ (0.71)
Weighted-average shares used to compute net loss per basic and diluted share (in shares)		94,085	87,777		92,274	83,536
[1]	(1) Includes share-based compensation expense as follows: Three Months EndedSeptember 30, Nine Months EndedSeptember 30,2016 2015 2016 2015Cost of revenue$1,919 $1,131 $5,355 $3,136Research and development7,172 4,974 20,548 13,484Sales and marketing6,657 3,786 17,780 10,154General and administrative4,247 3,551 12,654 10,283

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Share-based compensation expense			$ 56,337	$ 37,057
Cost of revenue
Share-based compensation expense	$ 1,919	$ 1,131	5,355	3,136
Research and development
Share-based compensation expense	7,172	4,974	20,548	13,484
Sales and marketing
Share-based compensation expense	6,657	3,786	17,780	10,154
General and administrative
Share-based compensation expense	$ 4,247	$ 3,551	$ 12,654	$ 10,283

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net loss	$ (25,826)	$ (18,924)	$ (79,250)	$ (59,575)
Other comprehensive gain (loss), before tax:
Net change in unrealized gain (loss) on available-for-sale investments	(35)	39	80	70
Foreign currency translation gain (loss)	(227)	(781)	570	(1,019)
Net change in unrealized gain (loss) on derivative instruments	416	(101)	139	(101)
Other comprehensive gain (loss), before tax	154	(843)	789	(1,050)
Tax effect	(61)	0	(295)	0
Other comprehensive gain (loss), net of tax	93	(843)	494	(1,050)
Comprehensive loss	$ (25,733)	$ (19,767)	$ (78,756)	$ (60,625)

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities
Net loss	$ (79,250)	$ (59,575)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	20,000	13,672
Share-based compensation	56,337	37,057
Other	1,219	525
Excess tax benefit from share-based award activity	(133)	(124)
Changes in operating assets and liabilities:
Accounts receivable	(11,782)	(13,082)
Prepaid expenses and other current assets	(7,401)	(4,161)
Other assets and liabilities	(1,829)	(1,622)
Accounts payable	(2,220)	(1,919)
Accrued liabilities	2,645	2,261
Accrued compensation and related benefits	812	(2,355)
Deferred revenue	25,596	24,372
Net cash provided by (used in) operating activities	3,994	(4,951)
Cash flows from investing activities
Purchases of property and equipment	(12,494)	(14,231)
Internal-use software development costs	(4,313)	(3,548)
Purchases of marketable securities	(216,640)	(56,991)
Proceeds from maturities of marketable securities	23,971	30,425
Proceeds from sale of marketable securities	39,244	29,650
Cash paid for the acquisition of Zopim, net of cash acquired	0	(1,099)
Net cash used in investing activities	(170,232)	(15,794)
Cash flows from financing activities
Proceeds from follow-on public offering, net of issuance costs	0	190,110
Proceeds from exercise of employee stock options	19,886	5,773
Taxes paid related to net share settlement of equity awards	(626)	(481)
Proceeds from employee stock purchase plan	8,704	7,243
Excess tax benefit from share-based award activity	133	124
Principal payments on debt	(323)	(6,952)
Principal payments on capital lease obligations	0	(10)
Net cash provided by financing activities	27,774	195,807
Effect of exchange rate changes on cash and cash equivalents	(173)	59
Net increase (decrease) in cash and cash equivalents	(138,637)	175,121
Cash and cash equivalents at the beginning of period	216,226	80,265
Cash and cash equivalents at the end of period	77,589	255,386
Supplemental cash flow data:
Cash paid for interest and income taxes	968	710
Non-cash investing and financing activities:
Balance of property and equipment in accounts payable and accrued expenses	2,466	4,250
Share-based compensation capitalized in internal-use software development costs	1,761	1,674
Vesting of early exercised stock options	509	815
Property and equipment acquired through tenant improvement allowances	$ 64	$ 174

Overview and Basis of Presentat

Overview and Basis of Presentation	9 Months Ended
	Sep. 30, 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 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, the capitalization and estimated useful life of capitalized internal-use software, and financial forecasts used in currency hedging. 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 September 30, 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 and nine months ended September 30, 2016 or 2015 . Recently Issued and Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or 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 February 2016, the FASB issued Accounting Standards Update, or ASU, 2016-2 regarding Accounting Standards Codification, or 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 effect of this standard on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-9 regarding ASC 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 do not expect the adoption of this standard to have a significant effect on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, regarding ASC Topic 230 "Statement of Cash Flows." This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted. We do not expect the adoption of this standard to have a significant effect on our consolidated financial statements.

Business Combination

Business Combination	9 Months Ended
	Sep. 30, 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 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. As of September 30, 2016, we finalized our purchase accounting for the acquisition. The total purchase price was allocated to the assets acquired and liabilities assumed as set forth below (in thousands). The excess of the purchase price over the net assets acquired was recorded as goodwill. Goodwill generated from the acquisition is primarily attributable to expected synergies, including cost savings from integrating the analytics technology with our customer service platform and the opportunity to sell the analytics software alongside our existing products. Goodwill is not expected to be deductible for income tax purposes. Goodwill will not be amortized but instead will be tested for impairment at least annually and more frequently if certain indicators of impairment are present. Net tangible assets acquired $ 2,140 Net deferred tax liability recognized (1,979 ) Identifiable intangible assets: Developed technology 8,800 Customer relationships 500 Goodwill 36,896 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	9 Months Ended
	Sep. 30, 2016
Fair Value Disclosures [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 September 30, 2016 and December 31, 2015 based on the three-tier fair value hierarchy (in thousands): Fair Value Measurement at Level 1 Level 2 Total Description Corporate bonds $ — $ 118,443 $ 118,443 Asset-backed securities — 28,458 28,458 U.S. treasury securities — 28,256 28,256 Commercial paper — 19,239 19,239 Agency securities — 10,501 10,501 Money market funds 4,841 — 4,841 Total $ 4,841 $ 204,897 $ 209,738 Included in cash and cash equivalents $ 4,841 Included in marketable securities $ 204,897 Fair Value Measurement at Level 1 Level 2 Total Description Corporate bonds $ — $ 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 September 30, 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 and nine months ended September 30, 2016 . Gross unrealized gains and losses for cash equivalents and marketable securities as of September 30, 2016 and December 31, 2015 were no t material. As of September 30, 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 September 30, 2016 and December 31, 2015 (in thousands): September 30, December 31, Due in one year or less $ 133,758 $ 29,414 Due after one year 71,139 22,336 Total $ 204,897 $ 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 contracts as cash flow hedges. Our foreign currency forward contracts generally have maturities of 15 months or less. As of September 30, 2016 , the balance of accumulated other comprehensive loss included an unrealized loss of $0.6 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 $0.4 million from accumulated other comprehensive loss 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 September 30, 2016 and December 31, 2015 (in thousands): September 30, 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 $ 1,215 Accrued liabilities $ 1,688 Foreign currency forward contracts Other assets 79 Other liabilities 330 Total $ 1,294 $ 2,018 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 $88.5 million and $60.8 million as of September 30, 2016 and December 31, 2015 , respectively. We have a master netting agreement with certain counterparties, which permits net settlement of multiple, separate derivative contracts with a single payment. We have elected to present our derivative instruments on a gross basis in our consolidated financial statements. We may also be required to exchange cash collateral with certain of our counterparties on a regular basis. We have not exchanged cash collateral with any counterparties as of September 30, 2016 and December 31, 2015 , respectively. The following table presents information about our derivative instruments on the statement of operations for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Hedging Instrument Location of Loss Reclassified into Earnings Gain Recognized in AOCI Loss Reclassified from AOCI into Earnings Loss Recognized in AOCI Loss Reclassified from AOCI into Earnings Foreign currency forward contracts Revenue, cost of revenue, operating expenses $ 207 $ (209 ) $ (218 ) $ (357 ) Total $ 207 $ (209 ) $ (218 ) $ (357 ) Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Hedging Instrument Location of Gain (Loss) Reclassified into Earnings Loss Recognized in AOCI Gain (Loss) Reclassified from AOCI into Earnings Loss Recognized in AOCI Gain(Loss) Reclassified from AOCI into Earnings Foreign currency forward contracts Revenue, cost of revenue, operating expenses $ (101 ) $ — $ (101 ) $ — Total $ (101 ) $ — $ (101 ) $ — All derivatives have been designated as hedging instruments. Amounts recognized in earnings related to excluded time value and hedge ineffectiveness for the three and nine months ended September 30, 2016 were not material .

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2016
Property, Plant and Equipment [Abstract]
Property and Equipment	Note 4. Property and Equipment Property and equipment, net consists of the following (in thousands): September 30, December 31, Hosting equipment $ 31,514 $ 26,920 Capitalized internal-use software 25,277 22,418 Leasehold improvements 23,167 19,577 Computer equipment and software 10,735 7,682 Furniture and fixtures 6,988 5,739 Construction in progress 5,937 4,157 Total 103,618 86,493 Less: accumulated depreciation and amortization (46,111 ) (29,953 ) Property and equipment, net $ 57,507 $ 56,540 Depreciation expense was $4.1 million and $2.8 million for the three months ended September 30, 2016 and 2015 , respectively, and $11.8 million and $7.7 million for the nine months ended September 30, 2016 and 2015 , respectively. Amortization expense of capitalized internal-use software totaled $1.8 million and $1.6 million for the three months ended September 30, 2016 and 2015 , respectively, and $5.2 million and $4.6 million for the nine months ended September 30, 2016 and 2015 , respectively. The carrying value of capitalized internal-use software at September 30, 2016 and December 31, 2015 was $15.0 million and $14.1 million , respectively, including $4.1 million and $1.5 million in construction in progress, respectively.

Goodwill and Acquired Intangibl

Goodwill and Acquired Intangible Assets	9 Months Ended
	Sep. 30, 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 nine months ended September 30, 2016 are as follows (in thousands): Balance as of December 31, 2015 $ 45,346 Goodwill adjustments 166 Foreign currency translation adjustments 359 Balance as of September 30, 2016 $ 45,871 Acquired intangible assets subject to amortization as of September 30, 2016 and December 31, 2015 consist of the following (in thousands): As of September 30, 2016 Cost Accumulated Amortization Foreign Currency Translation Adjustments Net Remaining Useful Life (In years) Developed technology $ 14,000 $ (5,717 ) $ (135 ) $ 8,148 3.1 Customer relationships 1,800 (934 ) (38 ) 828 2.4 $ 15,800 $ (6,651 ) $ (173 ) $ 8,976 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 September 30, 2016 and 2015 was $1.0 million and $0.4 million , respectively, and $2.9 million and $1.4 million for the nine months ended September 30, 2016 and 2015 , respectively. Estimated future amortization expense as of September 30, 2016 is as follows (in thousands): Remainder of 2016 $ 936 2017 3,330 2018 2,131 2019 2,067 2020 512 $ 8,976

Credit Facility

Credit Facility	9 Months Ended
	Sep. 30, 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 initial public offering, or 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. In June 2015, we repaid all outstanding principal and interest under the equipment line of credit and terminated the Silicon Valley Bank credit facility.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 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 $2.6 million and $2.0 million for the three months ended September 30, 2016 and 2015 , respectively, and $7.2 million and $5.4 million for the nine months ended September 30, 2016 and 2015 , respectively. In June 2016, we entered into an operating lease agreement for approximately 18,000 square feet of additional office space in San Francisco, CA. The lease began on July 11, 2016 and will expire on January 31, 2021. The total anticipated amount of rent to be paid over the initial term of the lease is approximately $4.6 million . In addition to monthly rent obligations, we are responsible for certain operating costs and taxes associated with the leased premises. 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 condensed consolidated financial statements as a result of these service-level agreements.

Common Stock and Stockholders'

Common Stock and Stockholders' Equity	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
Common Stock and Stockholders' Equity	Note 8. Common Stock and Stockholders’ Equity Common Stock As of each of September 30, 2016 and December 31, 2015 , there were 400 million shares authorized for issuance with a par value of $0.01 per share. There were 95.4 million and 90.9 million shares of common stock issued and 94.9 million and 90.3 million shares outstanding as of September 30, 2016 and December 31, 2015 , respectively. Included within the number of shares issued and outstanding were 0.1 million and 0.3 million shares of common stock subject to repurchase, as of September 30, 2016 and December 31, 2015 , respectively. Preferred Stock As of each of September 30, 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. For the three and nine months ended September 30, 2016 , 0.3 million 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 0.9 million shares on January 1, 2016. As of September 30, 2016 , 3.5 million shares of common stock were available for issuance under the ESPP. Stock Option and Incentive 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 September 30, 2016 , we had 5.8 million shares of common stock available for future grants under the 2014 Plan. On May 6, 2016, the compensation committee of our board of directors granted equity awards representing 1.2 million shares. These awards were granted outside of the 2014 Plan pursuant to an exemption provided for “employment inducement awards” within the meaning of Section 303A.08 of the New York Stock Exchange Listed Manual and accordingly do not require approval from our stockholders. The following table summarizes our stock option and RSU award activities for the nine months ended September 30, 2016 (in thousands, except per share information): Options Outstanding RSUs Outstanding Shares Available for Grant Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding RSUs Weighted Average Grant Date 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 5,716 Stock options granted (1,363 ) 1,363 23.82 RSUs granted (3,719 ) 3,719 20.41 Stock options exercised (2,275 ) 8.75 RSUs vested (2,080 ) 18.42 Unvested shares repurchased 38 Stock options forfeited or canceled 334 (334 ) 16.70 RSUs forfeited or cancelled 491 (491 ) 20.42 Outstanding — September 30, 2016 5,820 9,532 $ 14.23 7.69 $ 157,057 7,565 $ 20.22 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 September 30, 2016 was $30.71 . As of September 30, 2016 , we had a total of $188.9 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 2.8 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 September 30, 2016 and December 31, 2015 , there were 0.1 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 $0.5 million and $1.0 million , respectively.

Net Loss Per Share

Net Loss Per Share	9 Months Ended
	Sep. 30, 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 Nine Months Ended 2016 2015 2016 2015 Net loss $ (25,826 ) $ (18,924 ) $ (79,250 ) $ (59,575 ) Weighted-average shares used to compute basic and diluted net loss per share 94,085 87,777 92,274 83,536 Net loss per share, basic and diluted $ (0.27 ) $ (0.22 ) $ (0.86 ) $ (0.71 ) The anti-dilutive securities excluded from the shares used to calculate the diluted net loss per share are as follows (in thousands): As of September 30, 2016 2015 Shares subject to outstanding common stock options and employee stock purchase plan 9,753 12,067 Restricted stock units 7,565 5,217 17,318 17,284

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Note 10. Income Taxes The effective tax rates for the three and nine months ended September 30, 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. In April 2009, Zendesk’s entity in Denmark, or Zendesk Denmark, transferred certain assets to Zendesk’s U.S. entity. In April 2015, the Danish Tax Authority, or 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 that gave rise to a potential payment of $1.9 million , including income tax and interest. We further contested the assessment and reached a settlement with SKAT. In September 2016, we paid the amount due of $0.9 million , including income tax and interest, and released the associated reserve for the uncertain tax position.

Geographic Information

Geographic Information	9 Months Ended
	Sep. 30, 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 area, as determined based on the billing address of our customers (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 United States $ 43,587 $ 31,388 $ 121,222 $ 81,094 EMEA 22,601 15,397 62,208 41,434 Other 14,529 8,876 39,946 23,594 Total $ 80,717 $ 55,661 $ 223,376 $ 146,122 Long-Lived Assets The following table presents our long-lived assets by geographic area (in thousands): As of As of United States $ 24,637 $ 26,696 EMEA 10,420 10,351 APAC 7,460 5,332 Total $ 42,517 $ 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)	9 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [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 .
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, the capitalization and estimated useful life of capitalized internal-use software, and financial forecasts used in currency hedging. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from those estimates.
Recently Issued and Adopted Accounting Pronouncements	Recently Issued and Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or 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 February 2016, the FASB issued Accounting Standards Update, or ASU, 2016-2 regarding Accounting Standards Codification, or 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 effect of this standard on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-9 regarding ASC 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 do not expect the adoption of this standard to have a significant effect on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, regarding ASC Topic 230 "Statement of Cash Flows." This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted. We do not expect the adoption of this standard to have a significant effect on our consolidated financial statements.

Business Combination (Tables)

Business Combination (Tables)	9 Months Ended
	Sep. 30, 2016
Business Combinations [Abstract]
Schedule of Purchase Price Allocation for Acquisitions	Net tangible assets acquired $ 2,140 Net deferred tax liability recognized (1,979 ) Identifiable intangible assets: Developed technology 8,800 Customer relationships 500 Goodwill 36,896 Total purchase price $ 46,357

Financial Instruments (Tables)

Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2016
Fair Value Disclosures [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 September 30, 2016 and December 31, 2015 based on the three-tier fair value hierarchy (in thousands): Fair Value Measurement at Level 1 Level 2 Total Description Corporate bonds $ — $ 118,443 $ 118,443 Asset-backed securities — 28,458 28,458 U.S. treasury securities — 28,256 28,256 Commercial paper — 19,239 19,239 Agency securities — 10,501 10,501 Money market funds 4,841 — 4,841 Total $ 4,841 $ 204,897 $ 209,738 Included in cash and cash equivalents $ 4,841 Included in marketable securities $ 204,897 Fair Value Measurement at Level 1 Level 2 Total Description Corporate bonds $ — $ 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 September 30, 2016 and December 31, 2015 (in thousands): September 30, December 31, Due in one year or less $ 133,758 $ 29,414 Due after one year 71,139 22,336 Total $ 204,897 $ 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 September 30, 2016 and December 31, 2015 (in thousands): September 30, 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 $ 1,215 Accrued liabilities $ 1,688 Foreign currency forward contracts Other assets 79 Other liabilities 330 Total $ 1,294 $ 2,018 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 and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Hedging Instrument Location of Loss Reclassified into Earnings Gain Recognized in AOCI Loss Reclassified from AOCI into Earnings Loss Recognized in AOCI Loss Reclassified from AOCI into Earnings Foreign currency forward contracts Revenue, cost of revenue, operating expenses $ 207 $ (209 ) $ (218 ) $ (357 ) Total $ 207 $ (209 ) $ (218 ) $ (357 ) Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Hedging Instrument Location of Gain (Loss) Reclassified into Earnings Loss Recognized in AOCI Gain (Loss) Reclassified from AOCI into Earnings Loss Recognized in AOCI Gain(Loss) Reclassified from AOCI into Earnings Foreign currency forward contracts Revenue, cost of revenue, operating expenses $ (101 ) $ — $ (101 ) $ — Total $ (101 ) $ — $ (101 ) $ —

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2016
Property, Plant and Equipment [Abstract]
Components of Property and Equipment	Property and equipment, net consists of the following (in thousands): September 30, December 31, Hosting equipment $ 31,514 $ 26,920 Capitalized internal-use software 25,277 22,418 Leasehold improvements 23,167 19,577 Computer equipment and software 10,735 7,682 Furniture and fixtures 6,988 5,739 Construction in progress 5,937 4,157 Total 103,618 86,493 Less: accumulated depreciation and amortization (46,111 ) (29,953 ) Property and equipment, net $ 57,507 $ 56,540

Goodwill and Acquired Intangi23

Goodwill and Acquired Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 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 nine months ended September 30, 2016 are as follows (in thousands): Balance as of December 31, 2015 $ 45,346 Goodwill adjustments 166 Foreign currency translation adjustments 359 Balance as of September 30, 2016 $ 45,871
Summary of Intangible Assets Acquired	Acquired intangible assets subject to amortization as of September 30, 2016 and December 31, 2015 consist of the following (in thousands): As of September 30, 2016 Cost Accumulated Amortization Foreign Currency Translation Adjustments Net Remaining Useful Life (In years) Developed technology $ 14,000 $ (5,717 ) $ (135 ) $ 8,148 3.1 Customer relationships 1,800 (934 ) (38 ) 828 2.4 $ 15,800 $ (6,651 ) $ (173 ) $ 8,976 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 September 30, 2016 is as follows (in thousands): Remainder of 2016 $ 936 2017 3,330 2018 2,131 2019 2,067 2020 512 $ 8,976

Common Stock and Stockholders24

Common Stock and Stockholders' Equity (Tables)	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
Summary of Stock Option and RSU Award Activity	The following table summarizes our stock option and RSU award activities for the nine months ended September 30, 2016 (in thousands, except per share information): Options Outstanding RSUs Outstanding Shares Available for Grant Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding RSUs Weighted Average Grant Date 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 5,716 Stock options granted (1,363 ) 1,363 23.82 RSUs granted (3,719 ) 3,719 20.41 Stock options exercised (2,275 ) 8.75 RSUs vested (2,080 ) 18.42 Unvested shares repurchased 38 Stock options forfeited or canceled 334 (334 ) 16.70 RSUs forfeited or cancelled 491 (491 ) 20.42 Outstanding — September 30, 2016 5,820 9,532 $ 14.23 7.69 $ 157,057 7,565 $ 20.22

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	9 Months Ended
	Sep. 30, 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 Nine Months Ended 2016 2015 2016 2015 Net loss $ (25,826 ) $ (18,924 ) $ (79,250 ) $ (59,575 ) Weighted-average shares used to compute basic and diluted net loss per share 94,085 87,777 92,274 83,536 Net loss per share, basic and diluted $ (0.27 ) $ (0.22 ) $ (0.86 ) $ (0.71 )
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 September 30, 2016 2015 Shares subject to outstanding common stock options and employee stock purchase plan 9,753 12,067 Restricted stock units 7,565 5,217 17,318 17,284

Geographic Information (Tables)

Geographic Information (Tables)	9 Months Ended
	Sep. 30, 2016
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 Nine Months Ended 2016 2015 2016 2015 United States $ 43,587 $ 31,388 $ 121,222 $ 81,094 EMEA 22,601 15,397 62,208 41,434 Other 14,529 8,876 39,946 23,594 Total $ 80,717 $ 55,661 $ 223,376 $ 146,122
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 $ 24,637 $ 26,696 EMEA 10,420 10,351 APAC 7,460 5,332 Total $ 42,517 $ 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		9 Months Ended
	Mar. 31, 2015USD ($)$ / sharesshares	Sep. 30, 2016Customer$ / shares	Sep. 30, 2015Customer	Sep. 30, 2016USD ($)customer$ / shares	Sep. 30, 2015USD ($)Customer
Subsidiary, Sale of Stock [Line Items]
Year founded				2,007
Reincorporated date				Apr. 30, 2009
Share price (usd per share) | $ / shares		$ 30.71		$ 30.71
Proceeds from follow-on public offering, net of issuance costs				$ 0	$ 190,110
Customer Concentration Risk | Accounts Receivable
Subsidiary, Sale of Stock [Line Items]
Number of customers | customer				0
Percentage of total revenue or receivables, floor				10.00%
Customer Concentration Risk | Sales Revenue, Net
Subsidiary, Sale of Stock [Line Items]
Number of customers		0	0	0	0
Percentage of total revenue or receivables, floor		10.00%	10.00%	10.00%	10.00%
Follow On Public Offering
Subsidiary, Sale of Stock [Line Items]
Shares of common stock sold in initial public offering | shares	8.8
Share price (usd per share) | $ / shares	$ 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

Business Combination - Addition

Business Combination - Additional Information (Details) - USD ($) shares in Thousands, $ in Millions	Oct. 13, 2015	Sep. 30, 2016
RSUs Outstanding
Business Acquisition [Line Items]
RSUs issued pursuant to retention plan, in connection with the acquisition (in shares)		3,719
We Are Cloud, Inc
Business Acquisition [Line Items]
Percent of outstanding shares acquired	100.00%
Business acquisition, fair value of consideration transferred, cash	$ 46.4
Cash portion of fair value consideration transferred	$ 7
Number of months consideration were held in escrow, up to	18 months
Number of months consideration held in escrow, to be released	12 months
Business acquisition, transaction costs incurred	$ 1
Business acquisition, Increase to goodwill		$ 0.2
We Are Cloud, Inc | RSUs Outstanding
Business Acquisition [Line Items]
RSUs issued pursuant to retention plan, in connection with the acquisition (in shares)	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

Business Combination - Schedule

Business Combination - Schedule of Purchase Price Allocation for Acquisitions (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Oct. 13, 2015
Business Acquisition [Line Items]
Goodwill	$ 45,871	$ 45,346
We Are Cloud, Inc
Business Acquisition [Line Items]
Net tangible assets acquired			$ 2,140
Net deferred tax liability recognized			(1,979)
Goodwill			36,896
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	Sep. 30, 2016	Dec. 31, 2015
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Included in marketable securities	$ 204,897	$ 51,750
Fair Value Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total fair value of financial assets	209,738	73,088
Included in cash and cash equivalents	4,841	21,338
Included in marketable securities	204,897	51,750
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	118,443	31,761
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	28,458	7,998
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	28,256	4,001
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	19,239	5,992
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	10,501	1,998
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	4,841	21,338
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	4,841	21,338
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 | 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 | 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 | 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 | 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 | Money market funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total fair value of financial assets	4,841	21,338
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	204,897	51,750
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	118,443	31,761
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	28,458	7,998
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	28,256	4,001
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	19,239	5,992
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	10,501	1,998
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

Financial Instruments - Additio

Financial Instruments - Additional Information (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	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
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
Foreign currency forward contracts
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative, maturity	15 months
Unrealized gain related to effective portion of changes in fair value of foreign currency forward contracts	$ 600,000
Reclassification from accumulated other comprehensive income into earnings over next 12 month	400,000
Notional value	88,500,000	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	Sep. 30, 2016	Dec. 31, 2015
Fair Value Disclosures [Abstract]
Due in one year or less	$ 133,758	$ 29,414
Due after one year	71,139	22,336
Total	$ 204,897	$ 51,750

Financial Instruments - Schedul

Financial Instruments - Schedule of Derivative Instruments on Consolidated Balance Sheets (Details) - Designated as Hedging Instrument - Level 2 - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Derivatives Fair Value [Line Items]
Asset Derivatives, Fair Value	$ 1,294	$ 408
Liability Derivatives, Fair Value	2,018	1,081
Foreign currency forward contracts | Other current assets
Derivatives Fair Value [Line Items]
Asset Derivatives, Fair Value	1,215	408
Foreign currency forward contracts | Other assets
Derivatives Fair Value [Line Items]
Asset Derivatives, Fair Value	79
Foreign currency forward contracts | Accrued liabilities
Derivatives Fair Value [Line Items]
Liability Derivatives, Fair Value	1,688	$ 1,081
Foreign currency forward contracts | Other liabilities
Derivatives Fair Value [Line Items]
Liability Derivatives, Fair Value	$ 330

Financial Instruments - Sched34

Financial Instruments - Schedule of Derivative Instruments on Statement of Operations (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Derivative Instruments Gain Loss [Line Items]
Gain Recognized in AOCI	$ 207	$ (101)	$ (218)	$ (101)
Loss Reclassified from AOCI into Earnings	(209)	0	(357)	0
Revenue, cost of revenue, operating expenses | Foreign currency forward contracts
Derivative Instruments Gain Loss [Line Items]
Gain Recognized in AOCI	207	(101)	(218)	(101)
Loss Reclassified from AOCI into Earnings	$ (209)	$ 0	$ (357)	$ 0

Property and Equipment - Compon

Property and Equipment - Components of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 103,618	$ 86,493
Less: accumulated depreciation and amortization	(46,111)	(29,953)
Property and equipment, net	57,507	56,540
Hosting equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	31,514	26,920
Capitalized internal-use software
Property Plant And Equipment [Line Items]
Property and equipment, gross	25,277	22,418
Leasehold improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	23,167	19,577
Computer equipment and software
Property Plant And Equipment [Line Items]
Property and equipment, gross	10,735	7,682
Furniture and fixtures
Property Plant And Equipment [Line Items]
Property and equipment, gross	6,988	5,739
Construction in progress
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 5,937	$ 4,157

Property and Equipment - Additi

Property and Equipment - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 4.1	$ 2.8	$ 11.8	$ 7.7
Amortization expense of capitalized internal-use software	1.8	$ 1.6	5.2	$ 4.6
Carrying value of capitalized internal-use software	15		15		$ 14.1
Capitalized internal-use software included in construction in progress	$ 4.1		$ 4.1		$ 1.5

Goodwill and Acquired Intangi37

Goodwill and Acquired Intangible Assets - Changes in Carrying Amount of Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Goodwill [Roll Forward]
Balance as of December 31, 2015	$ 45,346
Goodwill adjustments	166
Foreign currency translation adjustments	359
Balance as of September 30, 2016	$ 45,871

Goodwill and Acquired Intangi38

Goodwill and Acquired Intangible Assets - Acquired Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Finite Lived Intangible Assets [Line Items]
Cost	$ 15,800	$ 15,800
Accumulated Amortization	(6,651)	(3,739)
Foreign Currency Translation Adjustments	(173)	(357)
Net	8,976	11,704
Developed technology
Finite Lived Intangible Assets [Line Items]
Cost	14,000	14,000
Accumulated Amortization	(5,717)	(3,133)
Foreign Currency Translation Adjustments	(135)	(279)
Net	$ 8,148	$ 10,587
Remaining Useful Life	3 years 1 month 2 days	3 years 8 months 12 days
Customer relationships
Finite Lived Intangible Assets [Line Items]
Cost	$ 1,800	$ 1,800
Accumulated Amortization	(934)	(606)
Foreign Currency Translation Adjustments	(38)	(78)
Net	$ 828	$ 1,117
Remaining Useful Life	2 years 5 months 2 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		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 1	$ 0.4	$ 2.9	$ 1.4

Goodwill and Acquired Intangi40

Goodwill and Acquired Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2016	$ 936
2,017	3,330
2,018	2,131
2,019	2,067
2,020	512
Net	$ 8,976	$ 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) ft² in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016USD ($)ft²	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)ft²	Sep. 30, 2015USD ($)
Other Commitments [Line Items]
Rent expense	$ 2.6	$ 2	$ 7.2	$ 5.4
Square feet of additional office space | ft²	18		18
Total amount of rent to be paid	$ 4.6		$ 4.6
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	May 06, 2016	Jan. 02, 2016	Sep. 30, 2016	Sep. 30, 2016	Dec. 31, 2015
Class Of Stock [Line Items]
Common stock, shares authorized (in shares)			400,000,000	400,000,000	400,000,000
Common stock, par value (usd per share)			$ 0.01	$ 0.01	$ 0.01
Common stock, shares issued (in shares)			95,400,000	95,400,000	90,900,000
Common stock, shares outstanding (in shares)			94,900,000	94,900,000	90,300,000
Common stock shares outstanding, subject to repurchase (in shares)			100,000	100,000	300,000
Preferred stock, shares authorized (in shares)			10,000,000	10,000,000	10,000,000
Preferred stock, par value (usd per share)			$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares issued (in shares)			0	0	0
Preferred stock, shares outstanding (in shares)			0	0	0
Increase in authorized shares (in shares), shares				5,716,000
Shares of common stock available for issuance (in shares)			5,820,000	5,820,000	4,323,000
Stock options granted (in shares)	1,200,000			1,363,000
Share price (usd per share)			$ 30.71	$ 30.71
Future period share-based compensation expense			$ 188.9	$ 188.9
Future period share-based compensation expense, period to recognized				2 years 9 months 18 days
Shares outstanding as a result of early exercise of stock options and purchase of unvested stock awards (in shares)			100,000	100,000	300,000
Accrued liability for shares outstanding as a result of early exercise of stock options and purchase of unvested stock awards			$ 0.5	$ 0.5	$ 1
2009 Stock Option and Grant Plan
Class Of Stock [Line Items]
Shares of common stock available for issuance (in shares)			0	0
2014 Plan | Employee Stock Option
Class Of Stock [Line Items]
Increase in authorized shares (in shares), shares		4,500,000
Shares of common stock available for issuance (in shares)			5,800,000	5,800,000
Employee Stock Purchase Plan
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%
Common shares purchased (in shares)			300,000	300,000
Increase in authorized shares (in shares), shares		900,000
Shares of common stock available for issuance (in shares)			3,500,000	3,500,000

Common Stock and Stockholders44

Common Stock and Stockholders' Equity - Summary of Stock Option and RSU Award Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	May 06, 2016	Sep. 30, 2016	Dec. 31, 2015
Shares Available for Grant
Outstanding — January 1, 2016		4,323
Increase in authorized shares, shares		5,716
Stock options granted, shares		(1,363)
RSUs granted, shares		(3,719)
Unvested shares repurchased, shares		38
Stock options forfeited or canceled, shares		334
RSUs forfeited or canceled, shares		491
Outstanding — September 30, 2016		5,820	4,323
Number of Shares
Balance at the beginning of the period, shares		10,778
Stock options granted, shares	1,200	1,363
Stock options exercised, shares		(2,275)
Stock options forfeited or canceled, shares		(334)
Balance at the end of the period, shares		9,532	10,778
Weighted-Average Exercise Price
Balance at the beginning of the period (usd per share)		$ 11.94
Stock options granted (usd per share)		23.82
Stock options exercised (usd per share)		8.75
Stock options forfeited or canceled (usd per share)		16.70
Balance at the end of the period (usd per share)		$ 14.23	$ 11.94
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term		7 years 8 months 9 days	7 years 11 months 16 days
Aggregate Intrinsic Value
Aggregate intrinsic value, beginning		$ 156,262
Aggregate intrinsic value, ending		$ 157,057	$ 156,262
RSUs Outstanding
Outstanding RSUs
Balance at the beginning of the period, shares		6,417
RSUs granted, shares		3,719
RSUs vested, shares		(2,080)
RSUs forfeited or canceled, shares		(491)
Balance at the end of the period, shares		7,565	6,417
Weighted-Average Grant Date Fair Value
Balance at the beginning of the period (usd per share)		$ 19.54
Weighted average grant date fair value, RSUs granted (usd per share)		20.41
Weighted average grant date fair value, RSUs vested (usd per share)		18.42
Weighted average grant date fair value, RSUs forfeited or canceled (usd per share)		20.42
Balance at the end of the period (usd per share)		$ 20.22	$ 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		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Net loss	$ (25,826)	$ (18,924)	$ (79,250)	$ (59,575)
Weighted-average shares used to compute basic and diluted net loss per share	94,085	87,777	92,274	83,536
Net loss per share:
Basic and diluted (usd per share)	$ (0.27)	$ (0.22)	$ (0.86)	$ (0.71)

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	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share amount (in shares)	17,318	17,284
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)	9,753	12,067
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share amount (in shares)	7,565	5,217

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Tax Examination [Line Items]
Effective income tax rate, percent, less than		1.00%	1.00%	2.00%	1.00%
Danish Tax Authority ("SKAT")
Income Tax Examination [Line Items]
Income tax examination, penalties and interest expense	$ 1.9
Income tax examination, liability from settlement		$ 0.9		$ 0.9

Geographic Information - Additi

Geographic Information - Additional Information (Details)	9 Months Ended
	Sep. 30, 2016segments
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		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	$ 80,717	$ 55,661	$ 223,376	$ 146,122
United States
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	43,587	31,388	121,222	81,094
EMEA
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	22,601	15,397	62,208	41,434
Other
Revenues From External Customers And Long Lived Assets [Line Items]
Revenue	$ 14,529	$ 8,876	$ 39,946	$ 23,594

Geographic Information - Sche50

Geographic Information - Schedule of Long-Lived Assets by Geographic Areas (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	$ 42,517	$ 42,379
United States
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	24,637	26,696
EMEA
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	10,420	10,351
APAC
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	$ 7,460	$ 5,332