Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 27, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | MOBILEIRON, INC. | |
Entity Central Index Key | 1,470,099 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 96,056,561 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 79,605 | $ 54,043 |
Short-term investments | 2,600 | 36,184 |
Accounts receivable, net of allowance for doubtful accounts of $431 and $433 at September 30, 2017 and December 31, 2016, respectively | 47,732 | 43,755 |
Prepaid expenses and other current assets | 5,440 | 6,131 |
TOTAL CURRENT ASSETS | 135,377 | 140,113 |
Property and equipment-net | 8,781 | 5,503 |
Intangible assets-net | 200 | 645 |
Goodwill | 5,475 | 5,475 |
Other assets | 1,809 | 1,370 |
TOTAL ASSETS | 151,642 | 153,106 |
Current liabilities: | ||
Accounts payable | 2,609 | 701 |
Accrued expenses | 22,452 | 21,674 |
Deferred revenue-current | 75,950 | 68,153 |
TOTAL CURRENT LIABILITIES | 101,011 | 90,528 |
Long-term liabilities: | ||
Deferred revenue-noncurrent | 25,063 | 19,923 |
Other long-term liabilities | 1,928 | 1,838 |
TOTAL LIABILITIES | 128,002 | 112,289 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value, 300,000,000 shares authorized, 96,048,823 shares and 89,066,031 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 10 | 9 |
Additional paid-in capital | 414,457 | 383,193 |
Accumulated deficit | (390,827) | (342,385) |
TOTAL STOCKHOLDERS' EQUITY | 23,640 | 40,817 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 151,642 | $ 153,106 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable allowances | $ 431 | $ 433 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 96,048,823 | 89,066,031 |
Common stock, shares outstanding | 96,048,823 | 89,066,031 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue | ||||
Perpetual license | $ 8,986 | $ 11,311 | $ 28,572 | $ 31,462 |
Subscription | 17,277 | 15,570 | 51,432 | 44,996 |
Software support and services | 16,457 | 14,685 | 47,656 | 41,996 |
Total revenue | 42,720 | 41,566 | 127,660 | 118,454 |
Cost of revenue | ||||
Perpetual license | 606 | 652 | 1,458 | 2,140 |
Subscription | 2,266 | 2,202 | 6,341 | 6,184 |
Software support and services | 4,835 | 4,774 | 15,209 | 14,691 |
Restructuring charge | 311 | 181 | 311 | 181 |
Total cost of revenue | 8,018 | 7,809 | 23,319 | 23,196 |
Gross profit | 34,702 | 33,757 | 104,341 | 95,258 |
Operating expenses: | ||||
Research and development | 19,581 | 16,238 | 56,440 | 51,185 |
Sales and marketing | 24,317 | 24,001 | 73,293 | 76,914 |
General and administrative | 7,210 | 6,961 | 21,238 | 22,774 |
Litigation settlement charge | 1,143 | |||
Restructuring charge | 489 | 871 | 489 | 871 |
Total operating expenses | 51,597 | 48,071 | 152,603 | 151,744 |
Operating loss | (16,895) | (14,314) | (48,262) | (56,486) |
Other income (expense) - net | 188 | 19 | 701 | 184 |
Loss before income taxes | (16,707) | (14,295) | (47,561) | (56,302) |
Income tax expense | 358 | 298 | 881 | 672 |
Net loss | $ (17,065) | $ (14,593) | $ (48,442) | $ (56,974) |
Net loss per share, basic and diluted | $ (0.18) | $ (0.17) | $ (0.52) | $ (0.67) |
Weighted-average shares used to compute net loss per share, basic and diluted | 95,024 | 86,713 | 92,825 | 85,008 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
BALANCE at Dec. 31, 2016 | $ 9 | $ 383,193 | $ (342,385) | $ 40,817 |
BALANCE, Shares at Dec. 31, 2016 | 89,066,031 | |||
Issuance of common stock for stock option exercises | 3,084 | $ 3,084 | ||
Issuance of common stock for stock option exercise, Shares | 1,033,121 | 1,033,121 | ||
Vesting of early exercised stock options, Shares | 2,477 | |||
Issuance of common stock pursuant to the Employee Stock Purchase Plan | 4,562 | $ 4,562 | ||
Issuance of common stock pursuant to the Employee Stock Purchase Plan, Shares | 1,676,158 | |||
Issuance of common stock pursuant to the Employee Stock-Settled Bonus Plans | 8,272 | 8,272 | ||
Issuance of common stock pursuant to the Employee Stock-Settled Bonus Plans, Shares | 1,688,097 | |||
Shares withheld for net settlement of Employee Stock-Settled Bonus Plans | (3,149) | (3,149) | ||
Shares withheld for net settlement of Employee Stock-Settled Bonus Plans, Shares | (677,547) | |||
Vesting of restricted stock units | $ 1 | (1) | ||
Vesting of restricted stock units, Shares | 3,260,486 | |||
Stock-based compensation | 18,496 | 18,496 | ||
Net loss | (48,442) | (48,442) | ||
BALANCE at Sep. 30, 2017 | $ 10 | $ 414,457 | $ (390,827) | $ 23,640 |
BALANCE, Shares at Sep. 30, 2017 | 96,048,823 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (48,442) | $ (56,974) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 26,249 | 26,666 |
Depreciation | 2,430 | 2,540 |
Amortization of intangible assets | 445 | 462 |
Provision for doubtful accounts | 97 | 24 |
Amortization (accretion) of premium on investment securities | (36) | 44 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,075) | 970 |
Other current and noncurrent assets | (573) | (1,401) |
Accounts payable | 1,241 | (944) |
Accrued expenses and other long-term liabilities | 2,362 | 119 |
Deferred revenue | 12,937 | 8,297 |
Net cash used in operating activities | (7,365) | (20,197) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (5,046) | (2,349) |
Proceeds from maturities of investment securities | 35,415 | 70,717 |
Purchase of investment securities | (1,794) | (61,383) |
Net cash provided by investing activities | 28,575 | 6,985 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from Employee Stock Purchase Plan | 3,590 | 3,247 |
Proceeds from exercise of stock options | 3,911 | 814 |
Taxes paid for net settlement of stock-settled bonus | (3,149) | |
Net cash provided by financing activities | 4,352 | 4,061 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 25,562 | (9,151) |
CASH AND CASH EQUIVALENTS-Beginning of period | 54,043 | 47,234 |
CASH AND CASH EQUIVALENTS-End of period | 79,605 | 38,083 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for income taxes | 758 | 817 |
SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING ACTIVITIES: | ||
Value of shares issued under the 2015 Non-Executive Bonus Plan | 5,639 | |
Value of shares issued under the 2016 Bonus Plans | 5,123 | |
Value of shares issued under the Employee Stock Purchase Plan | 4,562 | $ 4,851 |
Unpaid property and equipment purchases | $ 667 |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Significant Accounting Policies | 1. Description of Business MobileIron, Inc., and its wholly owned subsidiaries collectively, the “Company”, “we”, “us” or “our”, provides a purpose-built mobile IT platform that enables enterprises to manage and secure mobile applications, content and devices while providing their employees with device choice, privacy and a native user experience. We were incorporated in Delaware in July 2007 and are headquartered in Mountain View, California, with additional sales and support presence in North America, Europe, the Middle East, Asia and Australia. Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, and include the accounts of our wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures in this Quarterly Report on Form 10-Q normally included in annual financial statements prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair presentation of our balance sheet as of September 30, 2017, our operating results for the three and nine months ended September 30, 2017 and 2016, and our cash flows for the nine months ended September 30, 2017 and 2016. Our operating results for the nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017. The condensed consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated financial statements as of that date, but does not include all the footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with our audited financial statements and related notes theretofore the year ended December 31, 2016, included in our Annual Report on Form 10-K filed with the SEC on February 14, 2017. Foreign Currency Translation Our reporting currency is the U.S. dollar. The functional currency of all our international operations is the U.S. dollar. All monetary asset and liability accounts are translated into U.S. dollars at the period-end rate, nonmonetary assets and liabilities are translated at historical exchange rates, and revenue and expenses are translated at the weighted-average exchange rates in effect during the period. Translation adjustments are recorded as foreign currency gains (losses) in the consolidated statements of operations. We recognized a foreign currency loss of $4,000 and $117,000 in the three months ended September 30, 2017 and 2016, respectively, and we recognized a foreign currency gain of $169,000 and a loss of $164,000 in the nine months ended September 30, 2017 and 2016, respectively, in other income (expense)—net in our condensed consolidated statements of operations. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates include, but are not limited to, revenue recognition, stock-based compensation, goodwill, and accounting for income taxes. Actual results could differ from those estimates. Concentrations of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk consist of cash, money market funds and fixed income investments. Although we deposit our cash with multiple financial institutions, our deposits, at times, exceed federally insured limits. We invest in fixed income securities that are of high-credit quality. Substantially all of our money market funds, or $12.1 million, are held in two funds that are rated “AAA.” We generally do not require collateral or other security in support of accounts receivable. Allowances are provided for individual accounts receivable when we become aware of a customer’s inability to meet its financial obligations, such as in the case of bankruptcy, deterioration of the customer’s operating results, or change in financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. We also consider broader factors in evaluating the sufficiency of our allowances for doubtful accounts, including the length of time receivables are past due, significant one-time events and historical experience. At September 30, 2017 and December 31, 2016 we had an allowance for doubtful accounts of $431,000 and $433,000, respectively. One reseller accounted for 13% of total revenue (1% as an end customer) and 14% of total revenue (1% as an end customer) for the three and nine months ended September 30, 2017, respectively, and for 17% of total revenue (1% as an end customer) for both the three and nine months ended September 30, 2016. The same reseller accounted for 17% and 15% of net accounts receivable as of September 30, 2017 and December 31, 2016, respectively. There were no other resellers or end-user customers that accounted for 10% or more as a percentage of our revenue or net accounts receivable for any period presented. Segments We have one reportable segment. Summary of Significant Accounting Policies Revenue Recognition We derive revenue principally from software-related arrangements consisting of perpetual software licenses, post-contract customer support for such licenses, or PCS or software support, including when and if available updates, and professional services such as consulting and training services. We also offer our software as term-based licenses and cloud-based arrangements. In addition, we install our software on servers that we ship to customers. We begin to recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the sales price is fixed or determinable, and (iv) collection of the related receivable is probable. If collection is not considered probable, revenue is recognized only upon collection. Signed agreements, including by electronic acceptance, are used as evidence of an arrangement. Delivery is considered to occur when we provide a customer with a link and credentials to download our software. Delivery of a hardware appliance (an “appliance”) is considered to occur when title and risk of loss has transferred to the customer, which typically occurs when appliances are delivered to a common carrier. Delivery of services occurs when performed. We established VSOE of fair value when we had a substantial majority of stand-alone sales transactions of software support and services pricing within a narrow pricing band. In our VSOE analysis, we generally include stand-alone sales transactions completed during a rolling 12 month period unless a shorter period is appropriate due to changes in our pricing structure. We typically enter into multiple-element arrangements with our customers in which a customer may purchase a combination of software on a perpetual or subscription license, PCS, and professional services. The professional services are not considered essential to the functionality of the software. All of these elements are considered separate units of accounting. Our standard agreements do not include rights for customers to cancel or terminate arrangements or to return software to obtain refunds. We use the residual method to recognize revenue when a perpetual license arrangement includes one or more elements to be delivered at a future date provided the following criteria are met: (i) VSOE of fair value does not exist for one or more of the delivered items but exists for all undelivered elements, (ii) all other applicable revenue recognition criteria are met and (iii) the fair value of all of the undelivered elements is less than the arrangement fee. VSOE of fair value is based on the normal pricing practices for those products and services when sold separately by us and contractual customer renewal rates for post-contract customer support services. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized as revenue in the period in which it was earned. If evidence of the fair value of one or more undelivered elements does not exist, then the revenue is deferred and recognized when delivery of those elements occurs, or when fair value can be established, or ratably over the PCS period if the only undelivered element is PCS—we refer to these deferred revenue elements as the “Deferred Portion.” Revenue from subscriptions to our on premise term licenses, arrangements where perpetual and subscriptions to our on premise term licenses are sold together, and subscriptions to our cloud service are recognized ratably over the contractual term for all periods presented and are included as a component of subscription revenue within our consolidated statements of operations. We refer to arrangements where perpetual and subscriptions to our on premise term licenses are sold together as “Bundled Arrangements.” Occasionally, we enter into multiple-element arrangements with our customers in which a customer may purchase a combination of software on a perpetual or term basis, PCS, professional services, and appliances. We generally provide the appliances and software upon the commencement of the arrangement and provide software-related elements throughout the support period. We account for appliance-bundled arrangements under the revised accounting standard related to multiple-element arrangements, Accounting Standard Update, or ASU, No. 2009-13, Multiple Element Arrangements , and determine the revenue to be recognized based on the standard’s fair value hierarchy and then determine the value of each element in the arrangement based on the relative selling price of the arrangement. Amounts related to appliances are generally recognized upon delivery with the remaining consideration allocated to software and software-related elements, which are recognized as described elsewhere in this policy. Revenue from PCS is recognized ratably over the support term and is included as a component of software support and service revenue within the consolidated statements of operations. Revenue related to professional services is recognized upon delivery and is included as a component of software support and services revenue within the consolidated statements of operations. Appliance revenue was less than 10% of total revenue for all periods presented and is included as a component of perpetual license revenue within the consolidated statements of operations. Sales made through resellers are typically fulfilled directly to end users, and we recognize revenue when we deliver licenses to end users and all other revenue recognition criteria are met. Some of our operators, system integrators and other resellers, however, request that we deliver licenses to them. In those instances we recognize revenue at the time that we deliver to the resellers and all other revenue recognition criteria are met; such resellers have no rights of return or exchange. Shipping charges and sales tax billed to partners are excluded from revenue. Sales commissions and other incremental costs to acquire contracts are also expensed as incurred and are recorded in sales and marketing expense. For all arrangements, any revenue that has been deferred and is expected to be recognized beyond one year is classified as long-term deferred revenue in the consolidated balance sheets. Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of September 30, 2017 and December 31, 2016 cash and cash equivalents consist of cash deposited with banks, money market funds and investments that mature within three months of their purchase. Held-To-Maturity Investments We determine the appropriate classification of our fixed income investments at the time of purchase and reevaluate their classifications each reporting period. Investments are classified as held-to-maturity since the Company has positive intent and the ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost. Comprehensive Loss Comprehensive loss includes all changes in equity (net assets) during a period from non-owner sources. For the three and nine months ended September 30, 2017 and 2016, there were no differences between net loss and comprehensive loss. Therefore, the consolidated statements of comprehensive loss have been omitted. Net Loss per Share of Common Stock Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, unvested restricted stock and stock options are considered to be potentially dilutive securities. Because we have reported a net loss for the three and nine months ended September 30, 2017 and 2016, the number of shares used to calculate diluted net loss per common share is the same as the number of shares used to calculate basic net loss per common share for those periods presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation. Software Development Costs Incurred in Connection with Software to be Sold or Marketed The costs to develop new software products and enhancements to existing software products are expensed as incurred until technological feasibility has been established. We consider technological feasibility to have occurred when all planning, designing, coding and testing have been completed according to design specifications. Once technological feasibility is established, any additional costs would be capitalized. We believe our current process for developing software is essentially completed concurrent with the establishment of technological feasibility, and accordingly, no costs have been capitalized. Internal Use Software We capitalize costs incurred during the application development stage related to our internally used software. Such costs are primarily incurred by third party vendors and consultants. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Amounts capitalized in all periods presented were not significant. All software development costs incurred in connection with our cloud offering, or SaaS, are also sold or marketed to partners or end customers, therefore we start capitalizing costs when technological feasibility is achieved. No costs were capitalized in any periods presented as we believe that our current process for developing software is essentially completed concurrent with the establishment of technological feasibility. Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the property and equipment, determined to be three years for computers and equipment and software, five years for furniture and fixtures, and the lesser of the remaining lease term or estimated useful life for leasehold improvements. Expenditures for repairs and software support are charged to expense as incurred. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is reflected as operating expenses in the condensed consolidated statements of operations. Goodwill and Intangible Assets We record the excess of the acquisition purchase price over the fair value of the tangible and identifiable intangible assets acquired as goodwill. We perform an impairment test of our goodwill in the third quarter of our fiscal year, or more frequently if indicators of potential impairment arise. We have a single reporting unit and consequently evaluate goodwill for impairment based on an evaluation of the fair value of the Company as a whole. We record purchased intangible assets at their respective estimated fair values at the date of acquisition. Purchased intangible assets are being amortized using the straight-line method over their remaining estimated useful lives, which range from three to five years. We evaluate the remaining useful lives of intangible assets on a periodic basis to determine whether events or circumstances warrant a revision to the remaining estimated amortization period. Long-Lived Assets with Finite Lives Long-lived assets are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. We evaluate the recoverability of each of our long-lived assets, including purchased intangible assets and property and equipment, by comparison of its carrying amount to the future bbbundiscounted cash flows we expect the asset to generate. If we consider the asset to be impaired, we measure the amount of any impairment as the difference between the carrying amount and the fair value of the impaired asset. Stock-Based Compensation We use the estimated grant-date fair value method of accounting in accordance with Accounting Standards Codification, or ASC, Topic 718 Compensation—Stock Compensation . Fair value is determined using the Black-Scholes Model using various inputs, including our estimates of expected volatility, term and future dividends. On January 1, 2017, we adopted ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification in the statement of cash flows. The adoption of that standard did not have a material impact on our consolidated balance sheet, results of operations, cash flows or statement of stockholders’ equity because we have a full valuation allowance on our deferred tax assets. We have elected to continue to estimate the total number of awards that are expected to vest by applying a forfeiture rate to our equity awards. We estimated the forfeiture rate for the three and nine months ended September 30, 2017 based on our historical experience for annual grant years where the majority of the vesting terms have been satisfied. We recognize compensation costs for awards with service and performance vesting conditions and for our Employee Stock Purchase Plan, or ESPP, on an accelerated method over the requisite service period of the award. For stock options or restricted stock grants with no performance condition, we recognize compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of four years. Research and Development Research and development, or R&D, costs are charged to expense as incurred. Advertising Advertising costs are expensed and included in sales and marketing expense when incurred. Advertising expense for the three and nine months ended September 30, 2017 and 2016 was not significant. Income Taxes We account for income taxes in accordance with ASC Topic 740, Income Taxes , under which deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We use a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. A tax position is recognized when it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation processes. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority. The standard also provides guidance on derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure and transition. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments, which introduces a model based on expected losses to estimate credit losses for most financial assets and certain other instruments. In addition, for available-for-sale debt securities with unrealized losses, the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. The standard is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted for annual reporting periods beginning after December 15, 2018. Entities will apply the standard’s provisions by recording a cumulative-effect adjustment to retained earnings. We are evaluating the impact of the adoption on our consolidated balance sheet, results of operations, cash flows and disclosures . In May 2014, the FASB, jointly with the International Accounting Standards Board, issued a comprehensive new standard on revenue recognition from contracts with customers. The standard’s core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying this new guidance to contracts within its scope, an entity will: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Additionally, this new guidance will require significantly expanded disclosures about revenue recognition. As clarified by the FASB on July 9, 2015, provisions of this new standard are effective for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2017. Early adoption is permitted for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2016. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this new guidance. We will adopt the new standard on January 1, 2018 and expect to use the full retrospective approach. We anticipate this standard will have a material impact on our consolidated financial statements. While we are continuing to assess all potential impacts of the standard, we believe the most significant impact relates to our accounting for subscriptions to our on-premise licenses, specifically, as under the new standard we expect to recognize revenue from those subscriptions predominantly at the time of billing rather than ratably over the license term. In addition, we expect accounting for commissions to be impacted significantly as we will capitalize and amortize most commissions under the new standard instead of expensing commissions as incurred. Due to the complexity of certain of our contracts, the revenue recognition treatment required under the new standard will be dependent on contract-specific terms. In February 2016, the FASB finalized ASU 2016-02, Leases. ASU 2016-02 requires lessees to recognize the assets and liabilities on the balance sheet for the rights and obligations created by most leases (leases with the term of 12 months or longer) and continue to recognize expenses on the income statements over the lease term. It will also require disclosure designed to give financial statement users information on the amount, timing, and uncertainly of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those fiscal years. As a result of this new standard, we expect to record a lease commitment liability and corresponding asset for most of our leases. We will adopt ASU 2016-02 effective January 1, 2019. |
Significant Balance Sheet Compo
Significant Balance Sheet Components | 9 Months Ended |
Sep. 30, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Significant Balance Sheet Components | 2. Significant Balance Sheet Components Property and Equipment —Property and equipment at September 30, 2017 and December 31, 2016 consisted of the following (in thousands): September 30, 2017 December 31, 2016 Computers and appliances $ 13,035 $ 9,754 Purchased software 3,583 2,297 Furniture and fixtures 1,503 1,477 Leasehold improvements 3,109 2,985 Total property and equipment 21,230 16,513 Accumulated depreciation and amortization (12,449) (11,010) Total property and equipment—net $ 8,781 $ 5,503 Accrued Expenses —Accrued expenses at September 30, 2017 and December 31, 2016 consisted of the following (in thousands): September 30, 2017 December 31, 2016 Accrued commissions $ 5,327 $ 5,908 Accrued stock-settled bonus 6,088 6,608 Accrued vacation 787 611 Employee Stock Purchase Plan liability 838 1,811 Other accrued payroll-related expenses 2,706 3,085 Other accrued liabilities 6,706 3,651 Total accrued expenses $ 22,452 $ 21,674 In conjunction with our chief executive officer’s termination in October 2017, we will make severance and bonus payments totaling $963,000, of which $367,000 of the bonus earned through our third quarter was included in other accrued payroll-related expenses as of September 30, 2017 while $596,000 will be charged to expense in the three months ending December 31, 2017, the quarter in which the termination took place. Deferred Revenue —Current and non-current deferred revenue at September 30, 2017 and December 31, 2016 consisted of the following (in thousands): September 30, 2017 December 31, 2016 Perpetual license $ 43 $ 404 Subscription 46,356 35,495 Software support 51,874 50,117 Professional services 2,740 2,060 Total current and noncurrent deferred revenue $ 101,013 $ 88,076 |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 3. With the exception of our held-to-maturity fixed income investments, we report financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis in accordance with ASC 820, Fair Value Measurements. ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. ASC 820 also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. ASC 820 establishes and prioritizes three levels of inputs that may be used to measure fair value: — Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. — Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments. — Level 3—Inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. Our financial assets that are carried at fair value include cash and money market funds. We had no financial liabilities, or nonfinancial assets and liabilities that were required to be measured at fair value on a recurring basis, or that were measured at fair value as of September 30, 2017 or December 31, 2016. Our financial instruments measured at fair value as of September 30, 2017 and December 31, 2016 were as follows: As of September 30, 2017 (in thousands) Level 1 Level 2 Level 3 Total Money market funds $ 12,065 $ — $ — $ 12,065 Corporate debt securities — 5,525 — 5,525 Commercial paper — 52,252 — 52,252 Government debt securities — 900 — 900 Total $ 12,065 $ 58,677 $ — $ 70,742 As of December 31, 2016 (in thousands) Level 1 Level 2 Level 3 Total Money market funds $ 15,003 $ — $ — $ 15,003 Corporate debt securities — 10,738 — 10,738 Commercial paper — 47,479 — 47,479 Total $ 15,003 $ 58,217 $ — $ 73,220 |
Investments
Investments | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | 4. Investments Our portfolio of fixed income securities consists of commercial paper, corporate debt securities and obligations of foreign government related entities. All our investments in fixed income securities are classified as held-to-maturity. These investments are carried at amortized cost. Our investments in fixed income securities as of September 30, 2017 and December 31, 2016 were as follows: As of September 30, 2017 Amortized Fair (in thousands) Cost Gains Losses Value Corporate debt securities $ 5,525 $ — $ — $ 5,525 Commercial paper 52,256 — (4) 52,252 Government debt securities 900 — — 900 Total $ 58,681 $ — $ (4) $ 58,677 As of December 31, 2016 Amortized Fair (in thousands) Cost Gains Losses Value Corporate debt securities $ 10,740 $ — $ (2) $ 10,738 Commercial paper 47,473 8 (2) 47,479 Total $ 58,213 $ 8 $ (4) $ 58,217 The following table summarizes the balance sheet classification of our investments: As of September 30, As of December 31, (in thousands) 2017 2016 Cash equivalents $ 56,081 $ 22,029 Short-term investments 2,600 36,184 Total investments $ 58,681 $ 58,213 The gross amortized cost and estimated fair value of our held-to-maturity investments by contractual maturity are shown below. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. As of September 30, 2017 As of December 31, 2016 Gross Gross Amortized Fair Amortized Fair (in thousands) Cost Value Cost Value Due in one year or less $ 58,681 $ 58,677 $ 58,213 $ 58,217 Due after one year through five years — — — — Total $ 58,681 $ 58,677 $ 58,213 $ 58,217 We monitor our investment portfolio for impairment on a periodic basis. In order to determine whether a decline in fair value is other-than-temporary, we evaluate, among other factors: the duration and extent to which the fair value has been less than the carrying value; our financial condition and business outlook, including key operational and cash flow metrics, current market conditions and future trends in our industry; our relative competitive position within the industry; and our intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value. A decline in the fair value of the security below amortized cost that is deemed other-than-temporary is charged to earnings, resulting in the establishment of a new cost basis for the affected securities. In the three and nine months ended September 30, 2017, we had an insignificant amount of unrealized gains or losses, and we did not recognize any other-than-temporary impairments . |
Goodwill and Intangibles
Goodwill and Intangibles | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | 5. Goodwill and Intangibles The following table reflects intangible assets subject to amortization as of September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 Gross Carrying Accumulated Net Book Amount Amortization Impairment Value Technology $ 3,080 $ (2,880) — $ 200 Total $ 3,080 $ (2,880) $ — $ 200 December 31, 2016 Gross Carrying Accumulated Net Book Amount Amortization Impairment Value Technology $ 3,080 $ (2,435) — $ 645 Total $ 3,080 $ (2,435) $ — $ 645 Amortization of the technology intangible assets was recorded in cost of revenue. The weighted average remaining life of our intangible assets on September 30, 2017 was 0.5 year. Estimated remaining intangible assets amortization expense for the next five fiscal years and thereafter is as follows (in thousands): Year 2017 $ 100 2018 100 2019 — 2020 — 2021 — Total $ 200 At September 30, 2017 and December 31, 2016, the carrying value of goodwill was $5.5 million. |
Restructuring Charge
Restructuring Charge | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charge | 6. Restructuring Charge In addition to our restructuring plans initiated in August 2015 and 2016, we initiated a reduction in our workforce in the three months ended September 30, 2017, to further align our cost structure with expected revenue growth and recorded all amounts associated with the restructuring plan as an expense. Restructuring costs, recorded in operating expenses and cost of sales, totaled $800,000 for the three and nine months ended September 30, 2017. The following table summarizes the restructuring activities in the nine months ended September 30, 2017 (in thousands): Severance and Related Costs Balance, December 31, 2016 $ 15 Provision for restructuring charges 800 Cash payments (661) Balance, September 30, 2017 $ 154 The remaining restructuring balance of $154,000 at September 30, 2017, recorded in accrued expenses, is for severance expense that we expect to pay by December 31, 2017. |
Line of Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Line of Credit | 7. Line of Credit We have a $20.0 million revolving line of credit with a financial institution that can be used to (a) borrow for working capital and general business requirements, (b) issue letters of credit, and (c) enter into foreign exchange contracts. Amounts borrowed accrue interest at a floating per annum rate equal to the prime rate. A default interest rate shall apply during an event of default at a rate per annum equal to 5% above the otherwise applicable interest rate. The line of credit is collateralized by substantially all of our assets, except intellectual property, and requires us to comply with working capital, net worth and other covenants, including limitations on indebtedness and restrictions on dividend distributions, among others, and the borrowing capacity is limited to eligible accounts receivable. We are required to maintain an adjusted quick ratio (defined as the ratio of current assets to current liabilities minus deferred revenue) of at least 1.25. In May 2015, we issued a letter of credit for $1.5 million as a security deposit for a new Mountain View lease thereby reducing the borrowing capacity under our line of credit to $18.5 million. In June 2017, we amended our revolving line of credit and extended its maturity date to June 2018. There were no other outstanding amounts under the line of credit at September 30, 2017 or December 31, 2016 and we were in compliance with all financial covenants. |
Preferred Stock
Preferred Stock | 9 Months Ended |
Sep. 30, 2017 | |
Temporary Equity Disclosure [Abstract] | |
Preferred Stock | 8. Preferred Stock We were authorized to issue up to 10,000,000 shares of convertible preferred stock as of September 30, 2017 and December 31, 2016. No shares of convertible preferred stock were issued and outstanding as of September 30, 2017 or December 31, 2016. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
Common Stock | 9. Common Stock We were authorized to issue 300,000,000 shares of common stock with a par value of $0.0001 per share as of September 30, 2017 and December 31, 2016. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends out of funds legally available therefore, when and if declared by the board of directors, subject to the approval and priority rights of holders of all classes of preferred stock outstanding. As of September 30, 2017 and December 31, 2016, we reserved shares of common stock for issuance as follows: September 30, December 31, 2017 2016 Options outstanding 7,896,734 9,835,992 Unvested restricted stock units outstanding 13,241,111 10,474,975 Unvested early exercised stock options — 2,471 Shares available for grant under the 2014 Equity Incentive Plan and 2015 Inducement Plan 2,521,805 4,199,415 Shares available for purchase under the Employee Stock Purchase Plan 990,501 575,974 Total 24,650,151 25,088,827 |
Share Based Awards
Share Based Awards | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Share based Payments [Abstract] | |
Share Based Awards | 10. Share Based Awards 2008 Stock Plan Our 2008 Stock Plan, or 2008 Plan, which expired on June 12, 2014, provided for the grant of incentive and nonstatutory stock options to employees, nonemployee directors and consultants of the Company. Options granted under the 2008 Plan generally become exercisable within three to four years following the date of grant and expire 10 years from the date of grant. When options are subject to our repurchase right, we may buy back any unvested shares at their original exercise price in the event of an employee’s termination prior to full vesting. Our 2008 Plan was terminated following the date our 2014 Equity Incentive Plan, or our 2014 Plan, became effective. Any outstanding stock awards under our 2008 Plan will continue to be governed by the terms of our 2008 Plan and applicable award agreements. 2014 Equity Incentive Plan Our 2014 Plan provides for the grant of incentive stock options, or ISOs, within the meaning of Section 422 of the Internal Revenue Code, or the Code, to our employees and our parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, or NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensation to our employees, directors and consultants. Additionally, our 2014 Plan provides for the grant of performance cash awards to our employees, directors and consultants. The initial number of shares of our common stock available to be issued under our 2014 Plan was 8,142,857, which number of shares will be increased by any shares subject to stock options or other stock awards granted under the 2008 Stock Plan that would have otherwise returned to our 2008 Stock Plan (such as upon the expiration or termination of a stock award prior to vesting), not to exceed 16,312,202. The number of shares of our common stock reserved for issuance under our 2014 Plan automatically increase on January 1 of each year, beginning on January 1, 2015 and continuing through and including January 1, 2024, by 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors. On January 1, 2017, we increased the number of shares of common stock reserved for issuance under our 2014 Plan by 4,453,425 shares, which was 5% of the total number of shares of our common stock outstanding at December 31, 2016. Amended and Restated 2015 Inducement Plan On December 20, 2015, our board of directors adopted our 2015 Inducement Plan, or the Inducement Plan, to reserve 1,600,000 shares of our common stock to be used exclusively for grants of awards to individuals that were not previously employees or directors of the Company. The terms and conditions of the Inducement Plan are substantially similar to our stockholder-approved 2014 Plan. On January 5, 2016, our board of directors approved the amendment and restatement of the Inducement Plan to increase the share reserve under the Inducement Plan to 1,970,000 shares of our common stock. As of September 30, 2017, there were 1,654,167 options and restricted stock units outstanding under the Inducement Plan. 2014 Employee Stock Purchase Plan The purpose of our 2014 Employee Stock Purchase Plan, or ESPP, is to secure the services of new employees, to retain the services of existing employees and to provide incentives for such individuals to exert maximum efforts toward our success and that of our affiliates. Our ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code. Our ESPP permits eligible employees to purchase our common stock through payroll deductions, which may not exceed 15% of the employee’s base compensation. Stock may be purchased under the plan at a price equal to 85% of the fair market value of our common stock on either the first day of the offering or the last day of the applicable purchase period, whichever is lower. As of September 30, 2017 and December 31, 2016, approximately 990,501 and 575,974 shares of common stock were available for future issuance under our ESPP, respectively. The number of shares of our common stock reserved for issuance under our ESPP increase automatically each year, beginning on January 1, 2015 and continuing through and including January 1, 2024, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year; (ii) 2,142,857 shares of common stock; or (iii) such lesser number as determined by our board of directors. Shares subject to purchase rights granted under our ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under our ESPP. On January 1, 2017, we increased the number of shares available for issuance under the ESPP by 890,685 shares, which was 1% of the total number of shares of our common stock outstanding as of December 31, 2016. On June 14, 2017, our stockholders approved the amendment and restatement of the ESPP to provide for a one-time increase of 1.2 million shares of common stock available for issuance under the ESPP. Restricted Stock Units In 2014 we began granting restricted stock units under our 2014 Plan. For stock-based compensation expense, we measure the value of the restricted stock units based on the fair value of our common stock on the date of grant. Our restricted stock unit grants are subject to service conditions and we expense the fair value of those shares on a straight-line basis over their vesting periods. Our restricted stock unit activity for the nine months ended September 30, 2017 was as follows: Restricted Stock Units Weighted- Average Number of Grant Date Shares Fair Value Unvested, December 31, 2016 10,474,975 $ 4.45 Granted 9,669,478 5.20 Vested (4,948,583) 4.67 Forfeitures (1,954,759) 5.12 Unvested, September 30, 2017 13,241,111 $ 4.82 Bonus Plans In 2015, our board of directors approved the 2015 Executive Bonus Plan and 2015 Non-Executive Bonus Plan, which provided for the issuance of shares of unrestricted common stock to employees based on meeting certain Company metrics. We issued 1,653,371 shares of unrestricted common stock in the first quarter of 2016 based on amounts earned under the 2015 Non-Executive Bonus Plan. No shares were issued under the 2015 Executive Bonus Plan. We issued 1,010,550 shares of unrestricted common stock in the first quarter of 2017, after withholding 677,547 shares to cover employee payroll taxes, based on amounts earned under the Executive Bonus Plan and 2016 Non-Executive Bonus Plan, or 2016 Bonus Plans, in the first quarter of 2017. In April 2017, the Compensation Committee of our board of directors approved the 2017 Executive Bonus Plan and 2017 Non-executive Bonus Plan, or collectively, the 2017 Bonus Plans. The 2017 Bonus Plans are funded based on the achievement of certain 2017 Company metrics. Other than with respect to our CEO, amounts earned under the 2017 Bonus Plans, if any, will be issued in shares of unrestricted common stock in the first quarter of 2018. Shares issued under the aforementioned Bonus Plans will be issued from our 2014 Plan and reduce the 2014 Plan shares available for issuance. We record stock-based compensation expense related to the bonus plans over the service period of eligible employees based on forecasted performance relative to the Company metrics. To the extent that updated estimates of bonus expense differ from original estimates, the cumulative effect on current and prior periods of those changes is recorded in the period those estimates are revised. In the three months ended March 31, 2017, we recorded $1.7 million of stock-based compensation expense under the 2016 Bonus Plans. In the three and nine months ended September 30, 2017, we recorded $2.0 million and $6.1 million, respectively, of stock-based compensation expense under the 2017 Bonus Plans. In the three months ended March 31, 2016, we recorded $924,000 of stock-based compensation expense under the 2015 Non-Executive Bonus Plan. In the three and nine months ended September 30, 2016, we recorded $1.4 million and $5.1 million, respectively, of stock-based compensation expense related to the 2016 Bonus Plans. Stock Options Stock option activity under the 2008 Plan, 2014 Plan and 2015 Inducement Plan for the nine months ended September 30, 2017 was as follows: Options Outstanding Weighted- Number of Average Aggregate Shares Weighted- Remaining Intrinsic Available Number of Average Contractual Value for Issuance Shares Exercise Price Term (Years) (In thousands) Balance—December 31, 2016 4,199,415 9,835,992 $ 4.39 6.23 $ 5,734 Authorized 4,453,425 — Stock options granted (100,000) 100,000 4.90 Issuance of shares under 2016 Bonus Plans (1,688,077) — Shares withheld from net settlement of restricted stock units 677,547 Restricted stock units granted (7,981,401) — Exercised — (1,033,121) 2.99 Stock options canceled 1,006,137 (1,006,137) 6.31 Restricted stock units canceled 1,954,759 — Balance—September 30, 2017 2,521,805 7,896,734 $ 4.34 4.84 $ 4,387 Vested and exercisable—September 30, 2017 6,593,808 $ 4.26 $ 4,147 Vested and expected to vest(1)—September 30, 2017 7,752,157 $ 4.34 $ 4,354 (1) Options expected to vest reflect an estimated forfeiture rate. Our stock-based compensation expense was recorded in the following cost and expense categories (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Cost of revenue $ 932 $ 747 $ 2,859 $ 2,192 Research and development 3,914 2,709 11,046 9,122 Sales and marketing 2,258 2,307 6,612 8,418 General and administrative 1,974 2,109 5,732 6,934 Total $ 9,078 $ 7,872 $ 26,249 $ 26,666 We used the Black-Scholes Model to estimate the fair value of our stock options granted to employees with the following assumptions: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Expected dividend yield n/a — — — Risk-free interest rate n/a 1.5% 2.1% 1.4 -1.5% Expected volatility n/a 42% 41% 42% Expected life (in years) n/a 6.1 6.1 6.1 We used the Black-Scholes model to estimate the fair value of our Employee Stock Purchase Plan awards with the following assumptions: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Expected dividend yield — — — — Risk-free interest rate 1.3% 0.6% 0.9 - 1.3% 0.6% Expected volatility 54% 34-38% 34% -54% 34 - 41% Expected life (in years) 1.3 1.3 1.3 1.3 As required by Topic 718 Compensation—Stock Compensation , we estimate expected forfeitures and recognize compensation costs only for those equity awards expected to vest. As of September 30, 2017, unrecognized stock-based compensation expense and its remaining weighted-average recognition period was as follows: Unrecognized Remaining Stock-based Weighted-Average Compensation Recognition Expense Period (in millions) (in years) Stock options $ 2.1 1.8 Restricted stock units 52.7 2.9 ESPP 1.7 0.6 Total $ 56.5 |
Employee Benefit Plan
Employee Benefit Plan | 9 Months Ended |
Sep. 30, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plan | 11. Employee Benefit Plan We maintain a defined contribution 401(k) plan. The plan covers all full-time U.S. employees over the age of 21. Each employee can contribute up to $18,000 annually (with a $6,000 catch up contribution limit for employees aged 50 or older). We have the option to provide matching contributions, but have not done so to date. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Operating Leases We lease our office facilities under noncancelable agreements expiring between 2017 and 2023. Rent expense for the three months ended September 30, 2017 and 2016 was $1.9 million and $1.7 million respectively. Rent expense for the nine months ended September 30, 2017 and 2016 was $5.3 million and $5.1 million respectively. The aggregate future minimum lease payments under our agreements as of September 30, 2017 are as follows (in thousands): Year 2017 (remaining) $ 1,769 2018 7,195 2019 7,102 2020 5,553 2021 4,071 Thereafter 4,402 Total $ 30,092 Litigation On August 5, 2015, August 21, 2015 and August 24, 2015, purported stockholder class action lawsuits were filed in the Superior Court of California, Santa Clara County against the Company, certain of its officers, directors, underwriters and investors, captioned Schneider v. MobileIron, Inc., et al., Kerley v. MobileIron, Inc., et al. and Steinberg v. MobileIron, Inc., et al, which were subsequently consolidated under the case caption In re MobileIron Shareholder Litigation. The actions are purportedly brought on behalf of a putative class of all persons who purchased the Company’s securities issued pursuant or traceable to the Company’s registration statement and the June 12, 2014 initial public offering. The lawsuits assert claims for violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. The complaint seeks among other things, compensatory damages and attorney’s fees and costs on behalf of the putative class. On April 12, 2016, Plaintiffs filed a corrected consolidated complaint, which no longer names the underwriters or investors as defendants. On August 8, 2016 the Company filed a demurrer to the corrected consolidated complaint. The court overruled the demurrer on October 4, 2016. On March 8, 2017, the Company reached an agreement in principle to settle the above-described actions and the court granted preliminary approval of that settlement on June 9, 2017. The court approved the settlement on August 21, 2017 and entered final judgment in the case on October 11, 2017 releasing all parties . The settlement called for a payment of $7.5 million to the plaintiffs in resolution of all claims against the Company, its officers, directors and the other defendants. The Company contributed $1.1 million to the settlement in the three months ending September 30, 2017. This amount represented the remainder of the Company’s retention amount under its Director & Officer liability insurance policy. The balance was paid by the Company’s Director & Officer liability insurance. While the Company and the other defendants continue to deny each of the plaintiffs’ claims and deny any liability, the Company agreed to the settlement solely to resolve the disputes, to avoid the costs and risks of further litigation and to avoid further distractions to management. We continually evaluate uncertainties associated with litigation and record a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and (ii) the loss or range of loss can be reasonably estimated. If we determine that a loss is possible and a range of the loss can be reasonably estimated, we disclose the range of the possible loss in the Notes to the Consolidated Financial Statements. We evaluate, on a quarterly basis, developments in our legal matters that could affect the amount of liability that has been previously accrued, if any, and the matters and related ranges of possible losses disclosed, and make adjustments and changes to our disclosures as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters. Until the final resolution of such matters, there may be an exposure to loss, and such amounts could be material. An estimate of a reasonably possible loss (or a range of loss) cannot be made in our lawsuits at this time. Indemnification Under the indemnification provisions of our standard sales related contracts, we agree to defend and/or settle claims brought by third parties against our customers alleging that the customer’s use of our software infringes the third party’s intellectual property right, such as a patent right. These indemnification obligations are typically not subject to limitation; however if it is commercially impractical for us to either procure the right for the customer to continue to use our software or modify our software so that it’s not infringing, we typically can terminate the customer agreement and refund the customer a portion of the license fees paid, prorated over the three year period from initial delivery. We also on occasion indemnify our customers for other types of third party claims. In addition, we indemnify our officers, directors, and certain key employees while they are serving in such capacities in good faith. Through September 30, 2017, we have not received any material written claim for indemnification. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | 13. Segment Information We conduct business globally. Our chief operating decision maker (Chief Executive Officer) reviews financial information presented on a consolidated basis accompanied by information about revenue by geographic region for purposes of allocating resources and evaluating financial performance. We have one business activity, and there are no segment managers who are held accountable for operations, operating results and plans for levels, components or types of products or services below the consolidated unit level. Accordingly, we are considered to be in a single reportable segment and operating unit structure. Revenue by geographic region based on the billing address was as follows: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2017 2016 2017 2016 Revenue United States $ 18,396 $ 20,292 $ 58,251 $ 57,587 International 24,324 21,274 69,409 60,867 Total $ 42,720 $ 41,566 $ 127,660 $ 118,454 We recognized revenue of $5.0 million, or 12% of total revenue, and $5.4 million, or 13% of total revenue, from customers with a billing address in Germany for the three months ended September 30, 2017 and 2016, respectively. We recognized revenue of $16.3 million, or 13% of total revenue, and $15.1 million, or 13% of total revenue, from customers with a billing address in Germany for the nine months ended September 30, 2017 and 2016, respectively. No other country, except for the United States and Germany, exceeded 10% of total revenue in the three or nine months ended September 30, 2017 or 2016. Approximately $2.3 million and $1.3 million, or 26% and 24%, as of September 30, 2017 and December 31, 2016, respectively, of our net Property and Equipment was attributable to our operations located in India. Substantially all other long-lived assets were attributable to operations in the United States. |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2017 | |
Net Loss Per Share [Abstract] | |
Net Loss per Share | 14. Net Loss per Share The following table sets forth the computation of basic and diluted net loss per share for the three and nine months ended September 30, 2017 and 2016 (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Numerator: Net loss $ (17,065) $ (14,593) $ (48,442) $ (56,974) Denominator: Weighted–average shares outstanding 95,024 86,714 92,826 85,017 Less: weighted average shares subject to repurchase — (1) (1) (9) Weighted–average shares used to compute basic and diluted net loss per share 95,024 86,713 92,825 85,008 Basic and diluted net loss per share $ (0.18) $ (0.17) $ (0.52) $ (0.67) Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period. Because we have reported a net loss for the three and nine months ended September 30, 2017 and 2016, the number of shares used to calculate diluted net loss per common share is the same as the number of shares used to calculate basic net loss per common share for those periods presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in common stock equivalent shares): September 30, September 30, 2017 2016 Stock options outstanding, net of unvested exercised stock options 7,896,734 10,736,433 Unvested restricted stock units 13,241,111 11,210,178 ESPP shares 262,007 271,174 Stock-settled bonus shares 987,177 1,105,943 Total potentially dilutive securities 22,387,029 23,323,728 For September 30, 2016, we have corrected the previously reported amount to include 1.4 million additional shares related to our ESPP and stock-settled bonus plans that were excluded from the computation of the weighted-average diluted shares because such securities have an antidilutive impact due to losses reported. We do not consider this correction to be material, and there was no impact to our consolidated interim financial statements. |
Description of Business and S21
Description of Business and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business | Description of Business MobileIron, Inc., and its wholly owned subsidiaries collectively, the “Company”, “we”, “us” or “our”, provides a purpose-built mobile IT platform that enables enterprises to manage and secure mobile applications, content and devices while providing their employees with device choice, privacy and a native user experience. We were incorporated in Delaware in July 2007 and are headquartered in Mountain View, California, with additional sales and support presence in North America, Europe, the Middle East, Asia and Australia. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, and include the accounts of our wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures in this Quarterly Report on Form 10-Q normally included in annual financial statements prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair presentation of our balance sheet as of September 30, 2017, our operating results for the three and nine months ended September 30, 2017 and 2016, and our cash flows for the nine months ended September 30, 2017 and 2016. Our operating results for the nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017. The condensed consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated financial statements as of that date, but does not include all the footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with our audited financial statements and related notes theretofore the year ended December 31, 2016, included in our Annual Report on Form 10-K filed with the SEC on February 14, 2017. |
Foreign Currency Translation | Foreign Currency Translation Our reporting currency is the U.S. dollar. The functional currency of all our international operations is the U.S. dollar. All monetary asset and liability accounts are translated into U.S. dollars at the period-end rate, nonmonetary assets and liabilities are translated at historical exchange rates, and revenue and expenses are translated at the weighted-average exchange rates in effect during the period. Translation adjustments are recorded as foreign currency gains (losses) in the consolidated statements of operations. We recognized a foreign currency loss of $4,000 and $117,000 in the three months ended September 30, 2017 and 2016, respectively, and we recognized a foreign currency gain of $169,000 and a loss of $164,000 in the nine months ended September 30, 2017 and 2016, respectively, in other income (expense)—net in our condensed consolidated statements of operations. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates include, but are not limited to, revenue recognition, stock-based compensation, goodwill, and accounting for income taxes. Actual results could differ from those estimates. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk consist of cash, money market funds and fixed income investments. Although we deposit our cash with multiple financial institutions, our deposits, at times, exceed federally insured limits. We invest in fixed income securities that are of high-credit quality. Substantially all of our money market funds, or $12.1 million, are held in two funds that are rated “AAA.” We generally do not require collateral or other security in support of accounts receivable. Allowances are provided for individual accounts receivable when we become aware of a customer’s inability to meet its financial obligations, such as in the case of bankruptcy, deterioration of the customer’s operating results, or change in financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. We also consider broader factors in evaluating the sufficiency of our allowances for doubtful accounts, including the length of time receivables are past due, significant one-time events and historical experience. At September 30, 2017 and December 31, 2016 we had an allowance for doubtful accounts of $431,000 and $433,000, respectively. One reseller accounted for 13% of total revenue (1% as an end customer) and 14% of total revenue (1% as an end customer) for the three and nine months ended September 30, 2017, respectively, and for 17% of total revenue (1% as an end customer) for both the three and nine months ended September 30, 2016. The same reseller accounted for 17% and 15% of net accounts receivable as of September 30, 2017 and December 31, 2016, respectively. There were no other resellers or end-user customers that accounted for 10% or more as a percentage of our revenue or net accounts receivable for any period presented. |
Segments | Segments We have one reportable segment. |
Revenue Recognition | Revenue Recognition We derive revenue principally from software-related arrangements consisting of perpetual software licenses, post-contract customer support for such licenses, or PCS or software support, including when and if available updates, and professional services such as consulting and training services. We also offer our software as term-based licenses and cloud-based arrangements. In addition, we install our software on servers that we ship to customers. We begin to recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the sales price is fixed or determinable, and (iv) collection of the related receivable is probable. If collection is not considered probable, revenue is recognized only upon collection. Signed agreements, including by electronic acceptance, are used as evidence of an arrangement. Delivery is considered to occur when we provide a customer with a link and credentials to download our software. Delivery of a hardware appliance (an “appliance”) is considered to occur when title and risk of loss has transferred to the customer, which typically occurs when appliances are delivered to a common carrier. Delivery of services occurs when performed. We established VSOE of fair value when we had a substantial majority of stand-alone sales transactions of software support and services pricing within a narrow pricing band. In our VSOE analysis, we generally include stand-alone sales transactions completed during a rolling 12 month period unless a shorter period is appropriate due to changes in our pricing structure. We typically enter into multiple-element arrangements with our customers in which a customer may purchase a combination of software on a perpetual or subscription license, PCS, and professional services. The professional services are not considered essential to the functionality of the software. All of these elements are considered separate units of accounting. Our standard agreements do not include rights for customers to cancel or terminate arrangements or to return software to obtain refunds. We use the residual method to recognize revenue when a perpetual license arrangement includes one or more elements to be delivered at a future date provided the following criteria are met: (i) VSOE of fair value does not exist for one or more of the delivered items but exists for all undelivered elements, (ii) all other applicable revenue recognition criteria are met and (iii) the fair value of all of the undelivered elements is less than the arrangement fee. VSOE of fair value is based on the normal pricing practices for those products and services when sold separately by us and contractual customer renewal rates for post-contract customer support services. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized as revenue in the period in which it was earned. If evidence of the fair value of one or more undelivered elements does not exist, then the revenue is deferred and recognized when delivery of those elements occurs, or when fair value can be established, or ratably over the PCS period if the only undelivered element is PCS—we refer to these deferred revenue elements as the “Deferred Portion.” Revenue from subscriptions to our on premise term licenses, arrangements where perpetual and subscriptions to our on premise term licenses are sold together, and subscriptions to our cloud service are recognized ratably over the contractual term for all periods presented and are included as a component of subscription revenue within our consolidated statements of operations. We refer to arrangements where perpetual and subscriptions to our on premise term licenses are sold together as “Bundled Arrangements.” Occasionally, we enter into multiple-element arrangements with our customers in which a customer may purchase a combination of software on a perpetual or term basis, PCS, professional services, and appliances. We generally provide the appliances and software upon the commencement of the arrangement and provide software-related elements throughout the support period. We account for appliance-bundled arrangements under the revised accounting standard related to multiple-element arrangements, Accounting Standard Update, or ASU, No. 2009-13, Multiple Element Arrangements , and determine the revenue to be recognized based on the standard’s fair value hierarchy and then determine the value of each element in the arrangement based on the relative selling price of the arrangement. Amounts related to appliances are generally recognized upon delivery with the remaining consideration allocated to software and software-related elements, which are recognized as described elsewhere in this policy. Revenue from PCS is recognized ratably over the support term and is included as a component of software support and service revenue within the consolidated statements of operations. Revenue related to professional services is recognized upon delivery and is included as a component of software support and services revenue within the consolidated statements of operations. Appliance revenue was less than 10% of total revenue for all periods presented and is included as a component of perpetual license revenue within the consolidated statements of operations. Sales made through resellers are typically fulfilled directly to end users, and we recognize revenue when we deliver licenses to end users and all other revenue recognition criteria are met. Some of our operators, system integrators and other resellers, however, request that we deliver licenses to them. In those instances we recognize revenue at the time that we deliver to the resellers and all other revenue recognition criteria are met; such resellers have no rights of return or exchange. Shipping charges and sales tax billed to partners are excluded from revenue. Sales commissions and other incremental costs to acquire contracts are also expensed as incurred and are recorded in sales and marketing expense. For all arrangements, any revenue that has been deferred and is expected to be recognized beyond one year is classified as long-term deferred revenue in the consolidated balance sheets. |
Cash Equivalents | Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of September 30, 2017 and December 31, 2016 cash and cash equivalents consist of cash deposited with banks, money market funds and investments that mature within three months of their purchase. |
Held-To-Maturity Investments | Held-To-Maturity Investments We determine the appropriate classification of our fixed income investments at the time of purchase and reevaluate their classifications each reporting period. Investments are classified as held-to-maturity since the Company has positive intent and the ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes all changes in equity (net assets) during a period from non-owner sources. For the three and nine months ended September 30, 2017 and 2016, there were no differences between net loss and comprehensive loss. Therefore, the consolidated statements of comprehensive loss have been omitted. |
Net Loss per Share of Common Stock | Net Loss per Share of Common Stock Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, unvested restricted stock and stock options are considered to be potentially dilutive securities. Because we have reported a net loss for the three and nine months ended September 30, 2017 and 2016, the number of shares used to calculate diluted net loss per common share is the same as the number of shares used to calculate basic net loss per common share for those periods presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation. |
Software Development Costs Incurred in Connection with Software to be Sold or Marketed | Software Development Costs Incurred in Connection with Software to be Sold or Marketed The costs to develop new software products and enhancements to existing software products are expensed as incurred until technological feasibility has been established. We consider technological feasibility to have occurred when all planning, designing, coding and testing have been completed according to design specifications. Once technological feasibility is established, any additional costs would be capitalized. We believe our current process for developing software is essentially completed concurrent with the establishment of technological feasibility, and accordingly, no costs have been capitalized. |
Internal Use Software | Internal Use Software We capitalize costs incurred during the application development stage related to our internally used software. Such costs are primarily incurred by third party vendors and consultants. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Amounts capitalized in all periods presented were not significant. All software development costs incurred in connection with our cloud offering, or SaaS, are also sold or marketed to partners or end customers, therefore we start capitalizing costs when technological feasibility is achieved. No costs were capitalized in any periods presented as we believe that our current process for developing software is essentially completed concurrent with the establishment of technological feasibility. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the property and equipment, determined to be three years for computers and equipment and software, five years for furniture and fixtures, and the lesser of the remaining lease term or estimated useful life for leasehold improvements. Expenditures for repairs and software support are charged to expense as incurred. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is reflected as operating expenses in the condensed consolidated statements of operations. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets We record the excess of the acquisition purchase price over the fair value of the tangible and identifiable intangible assets acquired as goodwill. We perform an impairment test of our goodwill in the third quarter of our fiscal year, or more frequently if indicators of potential impairment arise. We have a single reporting unit and consequently evaluate goodwill for impairment based on an evaluation of the fair value of the Company as a whole. We record purchased intangible assets at their respective estimated fair values at the date of acquisition. Purchased intangible assets are being amortized using the straight-line method over their remaining estimated useful lives, which range from three to five years. We evaluate the remaining useful lives of intangible assets on a periodic basis to determine whether events or circumstances warrant a revision to the remaining estimated amortization period. |
Long-Lived Assets with Finite Lives | Long-Lived Assets with Finite Lives Long-lived assets are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. We evaluate the recoverability of each of our long-lived assets, including purchased intangible assets and property and equipment, by comparison of its carrying amount to the future bbbundiscounted cash flows we expect the asset to generate. If we consider the asset to be impaired, we measure the amount of any impairment as the difference between the carrying amount and the fair value of the impaired asset. |
Stock-Based Compensation | Stock-Based Compensation We use the estimated grant-date fair value method of accounting in accordance with Accounting Standards Codification, or ASC, Topic 718 Compensation—Stock Compensation . Fair value is determined using the Black-Scholes Model using various inputs, including our estimates of expected volatility, term and future dividends. On January 1, 2017, we adopted ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification in the statement of cash flows. The adoption of that standard did not have a material impact on our consolidated balance sheet, results of operations, cash flows or statement of stockholders’ equity because we have a full valuation allowance on our deferred tax assets. We have elected to continue to estimate the total number of awards that are expected to vest by applying a forfeiture rate to our equity awards. We estimated the forfeiture rate for the three and nine months ended September 30, 2017 based on our historical experience for annual grant years where the majority of the vesting terms have been satisfied. We recognize compensation costs for awards with service and performance vesting conditions and for our Employee Stock Purchase Plan, or ESPP, on an accelerated method over the requisite service period of the award. For stock options or restricted stock grants with no performance condition, we recognize compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of four years. |
Research and Development | Research and Development Research and development, or R&D, costs are charged to expense as incurred. |
Advertising | Advertising Advertising costs are expensed and included in sales and marketing expense when incurred. Advertising expense for the three and nine months ended September 30, 2017 and 2016 was not significant. |
Income Taxes | Income Taxes We account for income taxes in accordance with ASC Topic 740, Income Taxes , under which deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We use a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. A tax position is recognized when it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation processes. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority. The standard also provides guidance on derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure and transition. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments, which introduces a model based on expected losses to estimate credit losses for most financial assets and certain other instruments. In addition, for available-for-sale debt securities with unrealized losses, the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. The standard is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted for annual reporting periods beginning after December 15, 2018. Entities will apply the standard’s provisions by recording a cumulative-effect adjustment to retained earnings. We are evaluating the impact of the adoption on our consolidated balance sheet, results of operations, cash flows and disclosures . In May 2014, the FASB, jointly with the International Accounting Standards Board, issued a comprehensive new standard on revenue recognition from contracts with customers. The standard’s core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying this new guidance to contracts within its scope, an entity will: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Additionally, this new guidance will require significantly expanded disclosures about revenue recognition. As clarified by the FASB on July 9, 2015, provisions of this new standard are effective for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2017. Early adoption is permitted for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2016. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this new guidance. We will adopt the new standard on January 1, 2018 and expect to use the full retrospective approach. We anticipate this standard will have a material impact on our consolidated financial statements. While we are continuing to assess all potential impacts of the standard, we believe the most significant impact relates to our accounting for subscriptions to our on-premise licenses, specifically, as under the new standard we expect to recognize revenue from those subscriptions predominantly at the time of billing rather than ratably over the license term. In addition, we expect accounting for commissions to be impacted significantly as we will capitalize and amortize most commissions under the new standard instead of expensing commissions as incurred. Due to the complexity of certain of our contracts, the revenue recognition treatment required under the new standard will be dependent on contract-specific terms. In February 2016, the FASB finalized ASU 2016-02, Leases. ASU 2016-02 requires lessees to recognize the assets and liabilities on the balance sheet for the rights and obligations created by most leases (leases with the term of 12 months or longer) and continue to recognize expenses on the income statements over the lease term. It will also require disclosure designed to give financial statement users information on the amount, timing, and uncertainly of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those fiscal years. As a result of this new standard, we expect to record a lease commitment liability and corresponding asset for most of our leases. We will adopt ASU 2016-02 effective January 1, 2019. |
Significant Balance Sheet Com22
Significant Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Property and Equipment (in thousands) | September 30, 2017 December 31, 2016 Computers and appliances $ 13,035 $ 9,754 Purchased software 3,583 2,297 Furniture and fixtures 1,503 1,477 Leasehold improvements 3,109 2,985 Total property and equipment 21,230 16,513 Accumulated depreciation and amortization (12,449) (11,010) Total property and equipment—net $ 8,781 $ 5,503 |
Schedule of Accrued Expenses (in thousands) | September 30, 2017 December 31, 2016 Accrued commissions $ 5,327 $ 5,908 Accrued stock-settled bonus 6,088 6,608 Accrued vacation 787 611 Employee Stock Purchase Plan liability 838 1,811 Other accrued payroll-related expenses 2,706 3,085 Other accrued liabilities 6,706 3,651 Total accrued expenses $ 22,452 $ 21,674 |
Schedule of Current and Non-Current Deferred Revenue (in thousands) | September 30, 2017 December 31, 2016 Perpetual license $ 43 $ 404 Subscription 46,356 35,495 Software support 51,874 50,117 Professional services 2,740 2,060 Total current and noncurrent deferred revenue $ 101,013 $ 88,076 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Measured at Fair Value (in thousands) | As of September 30, 2017 (in thousands) Level 1 Level 2 Level 3 Total Money market funds $ 12,065 $ — $ — $ 12,065 Corporate debt securities — 5,525 — 5,525 Commercial paper — 52,252 — 52,252 Government debt securities — 900 — 900 Total $ 12,065 $ 58,677 $ — $ 70,742 As of December 31, 2016 (in thousands) Level 1 Level 2 Level 3 Total Money market funds $ 15,003 $ — $ — $ 15,003 Corporate debt securities — 10,738 — 10,738 Commercial paper — 47,479 — 47,479 Total $ 15,003 $ 58,217 $ — $ 73,220 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investments in Fixed Income Securities | As of September 30, 2017 Amortized Fair (in thousands) Cost Gains Losses Value Corporate debt securities $ 5,525 $ — $ — $ 5,525 Commercial paper 52,256 — (4) 52,252 Government debt securities 900 — — 900 Total $ 58,681 $ — $ (4) $ 58,677 As of December 31, 2016 Amortized Fair (in thousands) Cost Gains Losses Value Corporate debt securities $ 10,740 $ — $ (2) $ 10,738 Commercial paper 47,473 8 (2) 47,479 Total $ 58,213 $ 8 $ (4) $ 58,217 |
Summary of the Balance Sheet Classification of Investments | As of September 30, As of December 31, (in thousands) 2017 2016 Cash equivalents $ 56,081 $ 22,029 Short-term investments 2,600 36,184 Total investments $ 58,681 $ 58,213 |
Schedule of Held-to-Maturity Investments by Contractual Maturity | As of September 30, 2017 As of December 31, 2016 Gross Gross Amortized Fair Amortized Fair (in thousands) Cost Value Cost Value Due in one year or less $ 58,681 $ 58,677 $ 58,213 $ 58,217 Due after one year through five years — — — — Total $ 58,681 $ 58,677 $ 58,213 $ 58,217 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets Subject to Amortization (in thousands) | September 30, 2017 Gross Carrying Accumulated Net Book Amount Amortization Impairment Value Technology $ 3,080 $ (2,880) — $ 200 Total $ 3,080 $ (2,880) $ — $ 200 December 31, 2016 Gross Carrying Accumulated Net Book Amount Amortization Impairment Value Technology $ 3,080 $ (2,435) — $ 645 Total $ 3,080 $ (2,435) $ — $ 645 |
Estimated Intangible Assets Amortization Expense (in thousands) | Estimated remaining intangible assets amortization expense for the next five fiscal years and thereafter is as follows (in thousands): Year 2017 $ 100 2018 100 2019 — 2020 — 2021 — Total $ 200 |
Restructuring Charge (Tables)
Restructuring Charge (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Activities | Severance and Related Costs Balance, December 31, 2016 $ 15 Provision for restructuring charges 800 Cash payments (661) Balance, September 30, 2017 $ 154 |
Common Stock (Tables)
Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
Schedule of Common Stock Reserved for Issuance | September 30, December 31, 2017 2016 Options outstanding 7,896,734 9,835,992 Unvested restricted stock units outstanding 13,241,111 10,474,975 Unvested early exercised stock options — 2,471 Shares available for grant under the 2014 Equity Incentive Plan and 2015 Inducement Plan 2,521,805 4,199,415 Shares available for purchase under the Employee Stock Purchase Plan 990,501 575,974 Total 24,650,151 25,088,827 |
Share Based Awards (Tables)
Share Based Awards (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure Of Compensation Related Costs Share based Payments [Abstract] | |
Schedule of Restricted Stock Unit Activity | Restricted Stock Units Weighted- Average Number of Grant Date Shares Fair Value Unvested, December 31, 2016 10,474,975 $ 4.45 Granted 9,669,478 5.20 Vested (4,948,583) 4.67 Forfeitures (1,954,759) 5.12 Unvested, September 30, 2017 13,241,111 $ 4.82 |
Schedule of Stock Option Activity | Options Outstanding Weighted- Number of Average Aggregate Shares Weighted- Remaining Intrinsic Available Number of Average Contractual Value for Issuance Shares Exercise Price Term (Years) (In thousands) Balance—December 31, 2016 4,199,415 9,835,992 $ 4.39 6.23 $ 5,734 Authorized 4,453,425 — Stock options granted (100,000) 100,000 4.90 Issuance of shares under 2016 Bonus Plans (1,688,077) — Shares withheld from net settlement of restricted stock units 677,547 Restricted stock units granted (7,981,401) — Exercised — (1,033,121) 2.99 Stock options canceled 1,006,137 (1,006,137) 6.31 Restricted stock units canceled 1,954,759 — Balance—September 30, 2017 2,521,805 7,896,734 $ 4.34 4.84 $ 4,387 Vested and exercisable—September 30, 2017 6,593,808 $ 4.26 $ 4,147 Vested and expected to vest(1)—September 30, 2017 7,752,157 $ 4.34 $ 4,354 (1) Options expected to vest reflect an estimated forfeiture rate. |
Schedule of Stock-based Compensation Expense Recognized (in thousands) | Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Cost of revenue $ 932 $ 747 $ 2,859 $ 2,192 Research and development 3,914 2,709 11,046 9,122 Sales and marketing 2,258 2,307 6,612 8,418 General and administrative 1,974 2,109 5,732 6,934 Total $ 9,078 $ 7,872 $ 26,249 $ 26,666 |
Schedule of Assumptions Used for Calculating the Fair Value of Employee Option Grants | Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Expected dividend yield n/a — — — Risk-free interest rate n/a 1.5% 2.1% 1.4 -1.5% Expected volatility n/a 42% 41% 42% Expected life (in years) n/a 6.1 6.1 6.1 |
Schedule of Assumptions Used for Calculating the Fair Value of Employee stock purchase plans | Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Expected dividend yield — — — — Risk-free interest rate 1.3% 0.6% 0.9 - 1.3% 0.6% Expected volatility 54% 34-38% 34% -54% 34 - 41% Expected life (in years) 1.3 1.3 1.3 1.3 |
Schedule of Unrecognized Stock-Based Compensation Expense and Its Remaining Weighted-Average Recognition Period | Unrecognized Remaining Stock-based Weighted-Average Compensation Recognition Expense Period (in millions) (in years) Stock options $ 2.1 1.8 Restricted stock units 52.7 2.9 ESPP 1.7 0.6 Total $ 56.5 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments (in thousands) | The aggregate future minimum lease payments under our agreements as of September 30, 2017 are as follows (in thousands): Year 2017 (remaining) $ 1,769 2018 7,195 2019 7,102 2020 5,553 2021 4,071 Thereafter 4,402 Total $ 30,092 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Region | Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2017 2016 2017 2016 Revenue United States $ 18,396 $ 20,292 $ 58,251 $ 57,587 International 24,324 21,274 69,409 60,867 Total $ 42,720 $ 41,566 $ 127,660 $ 118,454 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Net Loss Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss per Share (in thousands, except per share data) | The following table sets forth the computation of basic and diluted net loss per share for the three and nine months ended September 30, 2017 and 2016 (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Numerator: Net loss $ (17,065) $ (14,593) $ (48,442) $ (56,974) Denominator: Weighted–average shares outstanding 95,024 86,714 92,826 85,017 Less: weighted average shares subject to repurchase — (1) (1) (9) Weighted–average shares used to compute basic and diluted net loss per share 95,024 86,713 92,825 85,008 Basic and diluted net loss per share $ (0.18) $ (0.17) $ (0.52) $ (0.67) |
Schedule of Antidilutive Securities Excluded from Net Loss per Share Computation | September 30, September 30, 2017 2016 Stock options outstanding, net of unvested exercised stock options 7,896,734 10,736,433 Unvested restricted stock units 13,241,111 11,210,178 ESPP shares 262,007 271,174 Stock-settled bonus shares 987,177 1,105,943 Total potentially dilutive securities 22,387,029 23,323,728 |
Description of Business and S32
Description of Business and Significant Accounting Policies (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segmentitem | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Foreign currency gain (loss) | $ (4,000) | $ (117,000) | $ 169,000 | $ (164,000) | |
AAA-rated money market funds | $ 12,100,000 | $ 12,100,000 | |||
Number of Money Market Funds | item | 2 | 2 | |||
Accounts receivable allowances | $ 431,000 | $ 431,000 | $ 433,000 | ||
Bad debt expense | $ 97,000 | $ 24,000 | |||
Number of Reportable Segments | segment | 1 | ||||
Capitalized development costs of software to be sold or marketed | 0 | $ 0 | |||
Capitalized development costs of software for internal use | $ 0 | $ 0 | |||
Stock-based compensation vesting period | 4 years | ||||
Computers and appliances | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Property plant and equipment useful life | 3 years | ||||
Furniture and Fixtures | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Property plant and equipment useful life | 5 years | ||||
Minimum | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Estimated useful life, purchased intangible assets | 3 years | ||||
Maximum | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Estimated useful life, purchased intangible assets | 5 years | ||||
Sales Revenue, Net | Appliance Revenue | Maximum | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 10.00% | ||||
As Reseller | Sales Revenue, Net | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 13.00% | 17.00% | 14.00% | 17.00% | |
As Reseller | Net Accounts Receivable | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 17.00% | 15.00% | |||
As an end customer | Sales Revenue, Net | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 1.00% | 1.00% | 1.00% | 1.00% |
Significant Balance Sheet Com33
Significant Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 21,230 | $ 16,513 |
Accumulated depreciation and amortization | (12,449) | (11,010) |
Total property and equipment-net | 8,781 | 5,503 |
Computers and appliances | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 13,035 | 9,754 |
Purchased software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 3,583 | 2,297 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 1,503 | 1,477 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 3,109 | $ 2,985 |
Significant Balance Sheet Com34
Significant Balance Sheet Components - Accrued Expenses (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Oct. 31, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Accrued Expenses [Abstract] | ||||
Accrued commissions | $ 5,327,000 | $ 5,908,000 | ||
Accrued stock settled bonus | 6,088,000 | 6,608,000 | ||
Accrued vacation | 787,000 | 611,000 | ||
Employee stock purchase plan liability | 838,000 | 1,811,000 | ||
Other accrued payroll-related expenses | 2,706,000 | 3,085,000 | ||
Other accrued liabilities | 6,706,000 | 3,651,000 | ||
Total accrued expenses | 22,452,000 | $ 21,674,000 | ||
Severance and bonus in conjunction with chief executive officer’s termination | $ 963,000 | |||
Bonus earned, in conjunction with chief executive officer’s termination and included in other accrued payroll-related expenses | $ 367,000 | |||
Severance costs in conjunction with chief executive officer’s termination | $ 596,000 |
Significant Balance Sheet Com35
Significant Balance Sheet Components - Deferred Revenue (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Deferred Revenue | ||
Current and noncurrent deferred revenue | $ 101,013 | $ 88,076 |
Perpetual license | ||
Deferred Revenue | ||
Current and noncurrent deferred revenue | 43 | 404 |
Subscription | ||
Deferred Revenue | ||
Current and noncurrent deferred revenue | 46,356 | 35,495 |
Software support | ||
Deferred Revenue | ||
Current and noncurrent deferred revenue | 51,874 | 50,117 |
Professional services | ||
Deferred Revenue | ||
Current and noncurrent deferred revenue | $ 2,740 | $ 2,060 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial and nonfinancial liabilities measured at fair value | $ 0 | $ 0 |
Nonfinancial assets measured at fair value | 0 | 0 |
Assets fair value | 70,742 | 73,220 |
Level 1 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets fair value | 12,065 | 15,003 |
Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets fair value | 58,677 | 58,217 |
Money Market Funds | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets fair value | 12,065 | 15,003 |
Money Market Funds | Level 1 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets fair value | 12,065 | 15,003 |
Corporate debt securities | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets fair value | 5,525 | 10,738 |
Corporate debt securities | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets fair value | 5,525 | 10,738 |
Commercial paper | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets fair value | 52,252 | 47,479 |
Commercial paper | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets fair value | 52,252 | $ 47,479 |
Government debt securities | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets fair value | 900 | |
Government debt securities | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Assets fair value | $ 900 |
Investments - Investments in fi
Investments - Investments in fixed income securities(Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 58,681 | $ 58,213 |
Gains | 8 | |
Losses | (4) | (4) |
Fair Value | 58,677 | 58,217 |
Corporate debt securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 5,525 | 10,740 |
Losses | (2) | |
Fair Value | 5,525 | 10,738 |
Commercial paper | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 52,256 | 47,473 |
Gains | 8 | |
Losses | (4) | (2) |
Fair Value | 52,252 | $ 47,479 |
Government debt securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 900 | |
Fair Value | $ 900 |
Investments - Balance sheet cla
Investments - Balance sheet classification of investments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Investments, Debt and Equity Securities [Abstract] | ||
Cash equivalents | $ 56,081 | $ 22,029 |
Short-term investments | 2,600 | 36,184 |
Total | $ 58,681 | $ 58,213 |
Investments - Cost vs FV (Detai
Investments - Cost vs FV (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Gross Amortized Cost | ||
Due in one year or less | $ 58,681 | $ 58,213 |
Total | 58,681 | 58,213 |
Fair Value | ||
Due in one year or less | 58,677 | 58,217 |
Total | $ 58,677 | $ 58,217 |
Goodwill and Intangibles - Inta
Goodwill and Intangibles - Intangible assets subject to amortization (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,080 | $ 3,080 |
Accumulated Amortization | (2,880) | (2,435) |
Net Book Value | $ 200 | 645 |
Weighted Average Remaining Life, Intangible Assets | 6 months | |
Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,080 | 3,080 |
Accumulated Amortization | (2,880) | (2,435) |
Net Book Value | $ 200 | $ 645 |
Goodwill and Intangibles - Amor
Goodwill and Intangibles - Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2,017 | $ 100 | |
2,018 | 100 | |
Net Book Value | 200 | $ 645 |
Goodwill | $ 5,475 | $ 5,475 |
Restructuring Charge (Details)
Restructuring Charge (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring charge | $ 489,000 | $ 871,000 | $ 489,000 | $ 871,000 |
Beginning Balance | 15,000 | |||
Provision for restructuring charges | 800,000 | 800,000 | ||
Cash payments | (661,000) | |||
Ending Balance | $ 154,000 | $ 154,000 |
Line of Credit (Details)
Line of Credit (Details) $ in Millions | 1 Months Ended | 9 Months Ended | |
May 31, 2015USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Line Of Credit Facility [Line Items] | |||
Revolving line of credit, maximum borrowing capacity | $ 20 | ||
Quick ratio | 1.25 | ||
Revolving line of credit amount outstanding | $ 0 | $ 0 | |
Line of Credit Facility, Remaining Borrowing Capacity | $ 18.5 | ||
Prime Rate | |||
Line Of Credit Facility [Line Items] | |||
Revolving line of credit, basis spread over variable rate | 5.00% | ||
Letter of Credit [Member] | |||
Line Of Credit Facility [Line Items] | |||
Amount drawn from revolving line of credit | $ 1.5 |
Preferred Stock (Details)
Preferred Stock (Details) - shares | Sep. 30, 2017 | Dec. 31, 2016 |
Temporary Equity Disclosure [Abstract] | ||
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Convertible preferred stock, shares issued | 0 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Common Stock (Details)
Common Stock (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Stockholders Equity Note [Abstract] | ||
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, voting rights | one | one |
Common Stock - Shares of common
Common Stock - Shares of common stock reserved for issuance (Details) - shares | Sep. 30, 2017 | Dec. 31, 2016 |
Options outstanding | 7,896,734 | 9,835,992 |
Unvested early exercised stock options | 2,471 | |
Shares available for issuance under the plan | 2,521,805 | 4,199,415 |
Shares available for purchase under Employee Stock Purchase Plan | 24,650,151 | 25,088,827 |
Total | 24,650,151 | 25,088,827 |
Unvested restricted stock units | ||
Unvested restricted stock outstanding | 13,241,111 | 10,474,975 |
2014 Employee Stock Purchase Plan | Employees Stock Purchase Plan | ||
Shares available for purchase under Employee Stock Purchase Plan | 990,501 | 575,974 |
Total | 990,501 | 575,974 |
Share Based Awards (Details)
Share Based Awards (Details) - shares | Jun. 14, 2017 | Jan. 01, 2017 | Jun. 13, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Jan. 05, 2016 | Dec. 20, 2015 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares of common stock available for issuance | 24,650,151 | 25,088,827 | |||||
Additional shares authorized | 4,453,425 | ||||||
Employees Stock Purchase Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Maximum percentage of employee base compensation that may be utilized to purchase common stock under the ESPP | 15.00% | ||||||
Percentage of purchase price of common stock at fair market value | 85.00% | ||||||
2008 Stock Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Expiry term of exercisable options | 10 years | ||||||
2014 Equity Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares of common stock, authorized for issuance | 8,142,857 | ||||||
Maximum annual percentage increase in shares issuable | 5.00% | ||||||
Additional shares authorized | 4,453,425 | ||||||
2015 Inducement Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares of common stock, authorized for issuance | 1,600,000 | ||||||
Shares of common stock available for issuance | 1,970,000 | ||||||
2015 Inducement Plan | Incentive Stock Options | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares outstanding under the 2015 Inducement Plan | 1,654,167 | ||||||
2015 Inducement Plan | Unvested restricted stock units | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares outstanding under the 2015 Inducement Plan | 1,654,167 | ||||||
2014 Employee Stock Purchase Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Maximum annual percentage increase in shares issuable | 1.00% | ||||||
Additional shares authorized as a percentage of capital stock outstanding | 1.00% | ||||||
Maximum increase in shares issuable | 2,142,857 | ||||||
2014 Employee Stock Purchase Plan | Employees Stock Purchase Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares of common stock available for issuance | 990,501 | 575,974 | |||||
Additional shares authorized | 1,200,000 | 890,685 | |||||
Minimum | 2008 Stock Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Options granted, exercisable term | 3 years | ||||||
Maximum | 2008 Stock Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Options granted, exercisable term | 4 years | ||||||
Maximum | 2014 Equity Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares of common stock available for issuance | 16,312,202 |
Share Based Awards - RSUs and B
Share Based Awards - RSUs and Bonus Plans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Stock-based compensation expense | $ 9,078,000 | $ 7,872,000 | $ 26,249,000 | $ 26,666,000 | ||
Unvested restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Unvested, Beginning Balance | 10,474,975 | 10,474,975 | ||||
Granted | 9,669,478 | |||||
Vested | (4,948,583) | |||||
Cancelled/Forfeited | (1,954,759) | |||||
Unvested, Ending Balance | 13,241,111 | 13,241,111 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Unvested, Beginning Balance | $ 4.45 | $ 4.45 | ||||
Granted (in dollars per share) | 5.20 | |||||
Vested (in dollars per share) | 4.67 | |||||
Cancelled/Forfeited (in dollars per share) | 5.12 | |||||
Unvested, Ending Balance | $ 4.82 | $ 4.82 | ||||
Common Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Share withholding | 677,547 | 677,547 | ||||
Non-Executive Bonus Plan 2015 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Common stock issued (in shares) | 1,653,371 | |||||
Stock-based compensation expense | $ 924,000 | |||||
Executive Bonus Plan 2015 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Common stock issued (in shares) | 0 | |||||
2016 Bonus Plans | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Granted | 1,688,077 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Common stock issued (in shares) | 1,010,550 | |||||
Stock-based compensation expense | $ 1,700,000 | $ 1,400,000 | $ 5,100,000 | |||
2017 Bonus Plans | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Stock-based compensation expense | $ 2,000,000 | $ 6,100,000 |
Share Based Awards - Options ac
Share Based Awards - Options activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Options Activity Rollforward | |||
Number of Shares Available for Issuance, Beginning Balance | 4,199,415 | 4,199,415 | |
Options Outstanding, Number, Beginning Balance | 9,835,992 | 9,835,992 | |
Number of Shares Available for Issuance, Authorized | 4,453,425 | ||
Number of Shares Available for Issuance, Granted | (100,000) | ||
Options Outstanding, Shares Granted | 100,000 | ||
Options exercised | (1,033,121) | ||
Number of Shares Available for Issuance, Cancelled | 1,006,137 | ||
Number of Shares Available for Issuance, Ending Balance | 2,521,805 | 4,199,415 | |
Options Outstanding, Number, Ending Balance | 7,896,734 | 9,835,992 | |
Vested and exercisable- end of the period | 6,593,808 | ||
Vested and expected to vest - end of the period | 7,752,157 | ||
Options Activity, Weighted Average Exercise Price Rollforward | |||
Options Outstanding, Weighted-Average Exercise Price, Beginning Balance | $ 4.39 | $ 4.39 | |
Options Outstanding, Weighted Average Exercise Price Granted | 4.90 | ||
Options Outstanding, Weighted Average Exercise Price Exercised | 2.99 | ||
Options Outstanding, Weighted Average Exercise Price Cancelled | 6.31 | ||
Options Outstanding, Weighted-Average Exercise Price, Ending Balance | 4.34 | $ 4.39 | |
Options Outstanding, Weighted-Average Exercise Price, Vested and exercisable | 4.26 | ||
Options Outstanding, Weighted-Average Exercise Price, Vested and expected to vest | $ 4.34 | ||
Options Outstanding, Weighted-Average Remaining Contractual Term (Years) | 4 years 10 months 2 days | 6 years 2 months 23 days | |
Options Outstanding, Aggregate Intrinsic Value | $ 4,387 | $ 5,734 | |
Options Outstanding, Vested and exercisable, Aggregate Intrinsic Value | 4,147 | ||
Options Outstanding, Vested and expected to vest, Aggregate Intrinsic Value | $ 4,354 | ||
RSUs, excluding Bonus Plans | |||
Options Activity Rollforward | |||
Number of Shares Available for Issuance, other than Options granted | (7,981,401) | ||
Unvested restricted stock units | |||
Options Activity Rollforward | |||
Number of Shares Available for Issuance, other than Options granted | (9,669,478) | ||
Number of Shares Available for Issuance, Restricted stock units cancelled | 1,954,759 | ||
Common Stock | |||
Options Activity Rollforward | |||
Share withheld from net settlement of restricted stock units | (677,547) | (677,547) | |
2016 Bonus Plans | |||
Options Activity Rollforward | |||
Number of Shares Available for Issuance, other than Options granted | (1,688,077) |
Share Based Awards - Compensati
Share Based Awards - Compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 9,078 | $ 7,872 | $ 26,249 | $ 26,666 |
Cost of Revenues | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 932 | 747 | 2,859 | 2,192 |
Research and Development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 3,914 | 2,709 | 11,046 | 9,122 |
Sales and Marketing | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 2,258 | 2,307 | 6,612 | 8,418 |
General and administrative expense. | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 1,974 | $ 2,109 | $ 5,732 | $ 6,934 |
Share Based Awards - Options as
Share Based Awards - Options assumptions (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Risk-free interest rate | 1.30% | 0.60% | 0.60% | |
Incentive Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Risk-free interest rate | 1.50% | 2.10% | ||
Expected volatility | 42.00% | 41.00% | 42.00% | |
Expected life (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days | |
Employees Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected volatility | 54.00% | |||
Expected life (in years) | 1 year 3 months 18 days | 1 year 3 months 18 days | 1 year 3 months 18 days | 1 year 3 months 18 days |
Minimum | Incentive Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Risk-free interest rate | 1.40% | |||
Minimum | Employees Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Risk-free interest rate | 0.90% | |||
Expected volatility | 34.00% | 34.00% | 34.00% | |
Maximum | Incentive Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Risk-free interest rate | 1.50% | |||
Maximum | Employees Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Risk-free interest rate | 1.30% | |||
Expected volatility | 38.00% | 54.00% | 41.00% |
Share Based Awards - Unrecogniz
Share Based Awards - Unrecognized expense (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Total unrecognized compensation cost | $ 56.5 |
Incentive Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Total unrecognized compensation cost | $ 2.1 |
Unrecognized compensation cost, weighted-average period of recognition | 1 year 9 months 18 days |
Unvested restricted stock units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Total unrecognized compensation cost | $ 52.7 |
Unrecognized compensation cost, weighted-average period of recognition | 2 years 10 months 24 days |
Employees Stock Purchase Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Total unrecognized compensation cost | $ 1.7 |
Unrecognized compensation cost, weighted-average period of recognition | 7 months 6 days |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Compensation And Retirement Disclosure [Abstract] | |
Age restriction of employees | 21 years |
Employee's contribution to plan 401(k) plan | $ 18,000 |
Catch up contribution limit for employees age 50 or older | $ 6,000 |
Minimum age of employees with catch up contribution limit | 50 years |
Employer contributions to date | $ 0 |
Commitments and Contingencies54
Commitments and Contingencies (Details) - Lease Agreements [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Leased Assets [Line Items] | ||||
Rent expense | $ 1,900 | $ 1,700 | $ 5,300 | $ 5,100 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
2017 (remaining) | 1,769 | 1,769 | ||
2,018 | 7,195 | 7,195 | ||
2,019 | 7,102 | 7,102 | ||
2,020 | 5,553 | 5,553 | ||
2,021 | 4,071 | 4,071 | ||
Thereafter | 4,402 | 4,402 | ||
Total | $ 30,092 | $ 30,092 | ||
Minimum | ||||
Operating Leased Assets [Line Items] | ||||
Lease agreement expiration year | 2,017 | |||
Maximum | ||||
Operating Leased Assets [Line Items] | ||||
Lease agreement expiration year | 2,023 |
Commitments and Contingencies -
Commitments and Contingencies - Litigation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2017 | Aug. 21, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | ||
Accrued payment for litigation settlements | $ 7.5 | |
Payments for litigation settlements | $ 1.1 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segmentperson | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Number of business activities | segment | 1 | ||||
Number of segment managers | person | 0 | ||||
Revenues | $ 42,720 | $ 41,566 | $ 127,660 | $ 118,454 | |
Property and equipment-net | 8,781 | 8,781 | $ 5,503 | ||
United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 18,396 | 20,292 | 58,251 | 57,587 | |
International | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 24,324 | 21,274 | 69,409 | 60,867 | |
Sales Revenue, Net | Germany | Geographic Concentration Risk [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | $ 5,000 | $ 5,400 | $ 16,300 | $ 15,100 | |
Concentration risk, percentage | 12.00% | 13.00% | 13.00% | 13.00% | |
Net Property and Equipment | India | Geographic Concentration Risk [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Concentration risk, percentage | 26.00% | 24.00% | |||
Property and equipment-net | $ 2,300 | $ 2,300 | $ 1,300 |
Net Loss per Share (Details)
Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Net loss | $ (17,065) | $ (14,593) | $ (48,442) | $ (56,974) |
Denominator: | ||||
Weighted-average shares outstanding | 95,024 | 86,714 | 92,826 | 85,017 |
Less: weighted average shares subject to repurchase | (1) | (1) | (9) | |
Weighted-average shares used to compute basic and diluted net loss per share | 95,024 | 86,713 | 92,825 | 85,008 |
Basic and diluted net loss per share | $ (0.18) | $ (0.17) | $ (0.52) | $ (0.67) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive (Details) - shares | Sep. 30, 2017 | Sep. 30, 2016 |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from net loss per share (shares) | 22,387,029 | 23,323,728 |
Stock options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from net loss per share (shares) | 7,896,734 | 10,736,433 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from net loss per share (shares) | 13,241,111 | 11,210,178 |
ESPP shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from net loss per share (shares) | 262,007 | 271,174 |
Stock Settled Bonus Shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from net loss per share (shares) | 987,177 | 1,105,943 |
ESPP and stock-settled bonus plans | Adjustment | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from net loss per share (shares) | 1,400,000 |