Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 08, 2019 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-39039 | |
Entity Registrant Name | Cloudflare, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-0805829 | |
Entity Address, Address Line One | 101 Townsend Street | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94107 | |
City Area Code | 888 | |
Local Phone Number | 993-5273 | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value | |
Trading Symbol | NET | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Entity Central Index Key | 0001477333 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Current Fiscal Year End Date | --12-31 | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 86,870,214 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 213,320,072 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 501,706 | $ 25,055 |
Marketable securities | 143,399 | 135,602 |
Accounts receivable, net | 32,205 | 25,155 |
Contract assets | 1,470 | 1,552 |
Prepaid expenses and other current assets | 16,898 | 9,373 |
Total current assets | 695,678 | 196,737 |
Long-term investments | 16,169 | 0 |
Property and equipment, net | 92,485 | 73,210 |
Goodwill | 4,083 | 4,083 |
Acquired intangible assets, net | 62 | 156 |
Deferred contract acquisition costs, noncurrent | 21,141 | 15,940 |
Restricted cash | 6,660 | 6,371 |
Other noncurrent assets | 3,569 | 1,883 |
Total assets | 839,847 | 298,380 |
Current liabilities: | ||
Accounts payable | 9,517 | 14,285 |
Accrued expenses and other current liabilities | 23,121 | 15,699 |
Note payable, current portion | 37 | 255 |
Liability for early exercise of unvested stock options | 14,629 | 14,323 |
Deferred revenue | 29,835 | 16,817 |
Total current liabilities | 77,139 | 61,379 |
Build-to-suit lease financing obligation | 10,501 | 10,443 |
Deferred revenue, noncurrent | 816 | 220 |
Redeemable convertible preferred stock warrant liability | 0 | 1,618 |
Other noncurrent liabilities | 10,993 | 6,704 |
Total liabilities | 99,449 | 80,364 |
Commitments and contingencies (Note 7) | ||
Redeemable Convertible Preferred Stock | ||
Redeemable convertible preferred stock; $0.001 par value; 168,108 and 168,108 shares authorized as of September 30, 2019 and December 31, 2018, respectively; zero and 165,658 shares issued and outstanding with aggregate liquidation preference of zero and $332,041 as of September 30, 2019 and December 31, 2018, respectively | 0 | 331,521 |
Stockholders’ Equity (Deficit) | ||
Additional paid-in capital | 1,013,582 | 82,345 |
Accumulated deficit | (273,551) | (195,878) |
Accumulated other comprehensive income (loss) | 73 | (57) |
Total stockholders’ equity (deficit) | 740,398 | (113,505) |
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | 839,847 | 298,380 |
Class A common stock | ||
Stockholders’ Equity (Deficit) | ||
Common stock | 87 | 0 |
Class B common stock | ||
Stockholders’ Equity (Deficit) | ||
Common stock | $ 207 | $ 85 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Redeemable Convertible Preferred Stock | ||
Redeemable convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Redeemable convertible preferred stock, shares authorized (in shares) | 0 | 168,108,000 |
Redeemable convertible preferred stock, shares issued (in shares) | 0 | 165,658,000 |
Redeemable convertible preferred stock, shares outstanding (in shares) | 0 | 165,658,000 |
Aggregate liquidation preference | $ 0 | $ 332,041,000 |
Class A common stock | ||
Stockholders’ Equity (Deficit) | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 2,250,000,000 | 550,000,000 |
Common stock, shares issued (in shares) | 86,838,606 | 0 |
Common stock, shares outstanding (in shares) | 86,838,606 | 0 |
Class B common stock | ||
Stockholders’ Equity (Deficit) | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 315,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 213,308,441 | 91,542,243 |
Common stock, shares outstanding (in shares) | 213,308,441 | 91,542,243 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 73,941 | $ 50,070 | $ 203,092 | $ 137,175 |
Cost of revenue | 16,033 | 11,209 | 45,225 | 30,581 |
Gross profit | 57,908 | 38,861 | 157,867 | 106,594 |
Operating expenses: | ||||
Sales and marketing | 45,538 | 24,462 | 112,191 | 66,206 |
Research and development | 27,863 | 14,827 | 64,380 | 39,113 |
General and administrative | 25,593 | 36,040 | 59,300 | 69,081 |
Total operating expenses | 98,994 | 75,329 | 235,871 | 174,400 |
Loss from operations | (41,086) | (36,468) | (78,004) | (67,806) |
Non-operating income (expense): | ||||
Interest income | 1,079 | 387 | 2,822 | 847 |
Interest expense | (407) | (251) | (970) | (726) |
Other expense, net | (651) | (1,240) | (1,030) | (1,903) |
Total non-operating income (expense), net | 21 | (1,104) | 822 | (1,782) |
Loss before income taxes | (41,065) | (37,572) | (77,182) | (69,588) |
Provision for (benefit from) income taxes | (212) | 417 | 491 | 889 |
Net loss | $ (40,853) | $ (37,989) | $ (77,673) | $ (70,477) |
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) | $ (0.35) | $ (0.47) | $ (0.81) | $ (0.88) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (in shares) | 118,056 | 81,579 | 96,393 | 79,755 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (40,853) | $ (37,989) | $ (77,673) | $ (70,477) |
Other comprehensive income (loss): | ||||
Change in unrealized gain (loss) on investments, net of tax | 7 | (2) | 130 | 40 |
Other comprehensive income (loss) | 7 | (2) | 130 | 40 |
Comprehensive loss | $ (40,846) | $ (37,991) | $ (77,543) | $ (70,437) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income (loss) | Redeemable convertible preferred stock | Class A common stock | Class A common stockCommon Stock | Class B common stock | Class B common stockCommon Stock |
Beginning balance (in shares) at Dec. 31, 2017 | 152,022,000 | |||||||||
Beginning balance at Dec. 31, 2017 | $ 181,546 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Issuance of Series D redeemable convertible preferred stock, net of issuance costs of $25 (in shares) | 13,636,000 | |||||||||
Issuance of Series D redeemable convertible preferred stock, net of issuance costs of $25 | $ 149,975 | |||||||||
Ending balance (in shares) at Sep. 30, 2018 | 165,658,000 | |||||||||
Ending balance at Sep. 30, 2018 | $ 331,521 | |||||||||
Beginning balance (in shares) at Dec. 31, 2017 | 79,116,000 | |||||||||
Beginning balance at Dec. 31, 2017 | $ (59,834) | $ 79 | $ 48,907 | $ (108,714) | $ (106) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock upon exercise of stock options (in shares) | 5,425,000 | |||||||||
Issuance of common stock upon exercise of stock options | 4,317 | $ 5 | 4,312 | |||||||
Repurchases of unvested common stock (in shares) | (26,000) | |||||||||
Issuance of common stock related to early exercised stock options (in shares) | 6,906,000 | |||||||||
Vesting of shares issued upon early exercise of stock options | 813 | 813 | ||||||||
Vesting of restricted stock (in shares) | 75,000 | |||||||||
Vesting of restricted stock | 3 | 3 | ||||||||
Stock-based compensation | 26,467 | 26,467 | ||||||||
Net loss | (70,477) | $ (70,477) | (70,477) | |||||||
Other comprehensive income (loss) | 40 | 40 | ||||||||
Ending balance (in shares) at Sep. 30, 2018 | 91,496,000 | |||||||||
Ending balance at Sep. 30, 2018 | (98,671) | $ 84 | 80,502 | (179,191) | (66) | |||||
Beginning balance (in shares) at Jun. 30, 2018 | 152,022,000 | |||||||||
Beginning balance at Jun. 30, 2018 | $ 181,546 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Issuance of Series D redeemable convertible preferred stock, net of issuance costs of $25 (in shares) | 13,636,000 | |||||||||
Issuance of Series D redeemable convertible preferred stock, net of issuance costs of $25 | $ 149,975 | |||||||||
Ending balance (in shares) at Sep. 30, 2018 | 165,658,000 | |||||||||
Ending balance at Sep. 30, 2018 | $ 331,521 | |||||||||
Beginning balance (in shares) at Jun. 30, 2018 | 80,879,000 | |||||||||
Beginning balance at Jun. 30, 2018 | (89,371) | $ 79 | 51,816 | (141,202) | (64) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock upon exercise of stock options (in shares) | 4,870,000 | |||||||||
Issuance of common stock upon exercise of stock options | 3,721 | $ 5 | 3,716 | |||||||
Repurchases of unvested common stock (in shares) | (2,000) | |||||||||
Issuance of common stock related to early exercised stock options (in shares) | 5,674,000 | |||||||||
Vesting of shares issued upon early exercise of stock options | 447 | 447 | ||||||||
Vesting of restricted stock (in shares) | 75,000 | |||||||||
Vesting of restricted stock | 3 | 3 | ||||||||
Stock-based compensation | 24,520 | 24,520 | ||||||||
Net loss | (37,989) | $ (37,989) | (37,989) | |||||||
Other comprehensive income (loss) | (2) | (2) | ||||||||
Ending balance (in shares) at Sep. 30, 2018 | 91,496,000 | |||||||||
Ending balance at Sep. 30, 2018 | $ (98,671) | $ 84 | 80,502 | (179,191) | (66) | |||||
Beginning balance (in shares) at Dec. 31, 2018 | 165,658,000 | 165,658,000 | ||||||||
Beginning balance at Dec. 31, 2018 | $ 331,521 | $ 331,521 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | (165,658,000) | |||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering | $ (331,521) | |||||||||
Ending balance (in shares) at Sep. 30, 2019 | 0 | 0 | ||||||||
Ending balance at Sep. 30, 2019 | $ 0 | $ 0 | ||||||||
Beginning balance (in shares) at Dec. 31, 2018 | 0 | 0 | 91,542,243 | 91,542,000 | ||||||
Beginning balance at Dec. 31, 2018 | (113,505) | 82,345 | (195,878) | (57) | $ 0 | $ 85 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs (in shares) | 40,250,000 | |||||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs | 565,041 | 565,001 | $ 40 | |||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | 31,381,000 | 134,277,000 | ||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering | 331,521 | 331,355 | $ 31 | $ 135 | ||||||
Conversion of redeemable convertible preferred stock warrants into common stock warrants and issuance of common stock upon net exercise of common stock warrants (in shares) | 174,347 | 174,000 | ||||||||
Conversion of redeemable convertible preferred stock warrants into common stock warrants and issuance of common stock upon net exercise of common stock warrants | 3,135 | 3,135 | ||||||||
Issuance of common stock in connection with acquisition (in shares) | 7,000 | |||||||||
Issuance of common stock in connection with acquisition | $ 18 | 18 | ||||||||
Issuance of common stock upon exercise of stock options (in shares) | 2,589,000 | 9,000 | 1,689,000 | |||||||
Issuance of common stock upon exercise of stock options | $ 2,902 | 2,899 | $ 1 | $ 2 | ||||||
Repurchases of unvested common stock (in shares) | (73,000) | |||||||||
Issuance of common stock related to early exercised stock options (in shares) | 891,000 | |||||||||
Vesting of shares issued upon early exercise of stock options | 2,389 | 2,389 | ||||||||
Conversion of Class B to Class A common stock (in shares) | 15,199,000 | (15,199,000) | ||||||||
Conversion of Class B to Class A common stock | 0 | $ 15 | $ (15) | |||||||
Stock-based compensation | 26,440 | 26,440 | ||||||||
Net loss | (77,673) | (77,673) | $ (3,588) | $ (74,085) | ||||||
Other comprehensive income (loss) | 130 | 130 | ||||||||
Ending balance (in shares) at Sep. 30, 2019 | 86,838,606 | 86,839,000 | 213,308,441 | 213,308,000 | ||||||
Ending balance at Sep. 30, 2019 | $ 740,398 | 1,013,582 | (273,551) | 73 | $ 87 | $ 207 | ||||
Beginning balance (in shares) at Jun. 30, 2019 | 165,658,000 | |||||||||
Beginning balance at Jun. 30, 2019 | $ 331,521 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | (165,658,000) | |||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering | $ (331,521) | |||||||||
Ending balance (in shares) at Sep. 30, 2019 | 0 | 0 | ||||||||
Ending balance at Sep. 30, 2019 | $ 0 | $ 0 | ||||||||
Beginning balance (in shares) at Jun. 30, 2019 | 0 | 92,686,000 | ||||||||
Beginning balance at Jun. 30, 2019 | (145,435) | 87,111 | (232,698) | 66 | $ 0 | $ 86 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs (in shares) | 40,250,000 | |||||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs | 565,041 | 565,001 | $ 40 | |||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | 31,381,000 | 134,277,000 | ||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering | 331,521 | 331,355 | $ 31 | $ 135 | ||||||
Conversion of redeemable convertible preferred stock warrants into common stock warrants and issuance of common stock upon net exercise of common stock warrants (in shares) | 174,347 | 174,000 | ||||||||
Conversion of redeemable convertible preferred stock warrants into common stock warrants and issuance of common stock upon net exercise of common stock warrants | 3,135 | 3,135 | ||||||||
Issuance of common stock upon exercise of stock options (in shares) | 9,000 | 1,108,000 | ||||||||
Issuance of common stock upon exercise of stock options | 1,835 | 1,833 | $ 1 | $ 1 | ||||||
Repurchases of unvested common stock (in shares) | (33,000) | |||||||||
Issuance of common stock related to early exercised stock options (in shares) | 295,000 | |||||||||
Vesting of shares issued upon early exercise of stock options | 951 | 951 | ||||||||
Conversion of Class B to Class A common stock (in shares) | 15,199,000 | (15,199,000) | ||||||||
Conversion of Class B to Class A common stock | 0 | $ 15 | $ (15) | |||||||
Stock-based compensation | 24,196 | 24,196 | ||||||||
Net loss | (40,853) | (40,853) | $ (4,573) | $ (36,280) | ||||||
Other comprehensive income (loss) | 7 | 7 | ||||||||
Ending balance (in shares) at Sep. 30, 2019 | 86,838,606 | 86,839,000 | 213,308,441 | 213,308,000 | ||||||
Ending balance at Sep. 30, 2019 | $ 740,398 | $ 1,013,582 | $ (273,551) | $ 73 | $ 87 | $ 207 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Issuance costs | $ 0 | |
Redeemable convertible preferred stock | ||
Issuance costs | $ 25 | $ 25 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows From Operating Activities | ||
Net loss | $ (77,673,000) | $ (70,477,000) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization expense | 20,923,000 | 13,397,000 |
Amortization of deferred contract acquisition costs | 7,722,000 | 4,990,000 |
Stock-based compensation expense | 25,012,000 | 26,285,000 |
Net accretion of discounts and amortization of premiums on available-for-sale securities | (1,137,000) | (78,000) |
Deferred income taxes | 0 | 7,000 |
Provision for bad debt | 861,000 | 909,000 |
Change in fair value of redeemable convertible preferred stock warrant liability | 1,517,000 | 1,187,000 |
Other | 27,000 | 62,000 |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable, net | (7,911,000) | (15,269,000) |
Contract assets | 82,000 | 2,344,000 |
Deferred contract acquisition costs | (12,923,000) | (8,639,000) |
Prepaid expenses and other current assets | (7,525,000) | (3,293,000) |
Other noncurrent assets | (1,686,000) | (228,000) |
Accounts payable | (994,000) | 5,037,000 |
Accrued expenses and other current liabilities | 5,652,000 | 5,065,000 |
Deferred revenue | 13,614,000 | 5,263,000 |
Liability for early exercise of unvested stock options | 0 | 19,000 |
Other noncurrent liabilities | 4,096,000 | 2,408,000 |
Net cash used in operating activities | (30,343,000) | (31,011,000) |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | (30,981,000) | (12,507,000) |
Capitalized internal-use software | (11,332,000) | (5,645,000) |
Purchases of available-for-sale securities | (157,075,000) | (87,115,000) |
Sales of available-for-sale securities | 1,978,000 | 0 |
Maturities of available-for-sale securities | 132,398,000 | 42,955,000 |
Other investing activities | 30,000 | 42,000 |
Net cash used in investing activities | (64,982,000) | (62,270,000) |
Cash Flows From Financing Activities | ||
Proceeds from issuance of preferred stock, net of issuance costs | 0 | 149,975,000 |
Proceeds from initial public offering, net of underwriting discounts and commissions | 570,544,000 | 0 |
Proceeds from the exercise of stock options | 2,899,000 | 4,317,000 |
Proceeds from the early exercise of stock options | 2,871,000 | 14,525,000 |
Repurchases of unvested common stock | (155,000) | (48,000) |
Payments on note payable | (218,000) | (266,000) |
Proceeds from build-to-suit lease financing obligation drawdown | 58,000 | 107,000 |
Payments of deferred offering costs | (3,734,000) | 0 |
Net cash provided by financing activities | 572,265,000 | 168,610,000 |
Net increase in cash, cash equivalents, and restricted cash | 476,940,000 | 75,329,000 |
Cash, cash equivalents, and restricted cash, beginning of period | 31,426,000 | 26,881,000 |
Cash, cash equivalents, and restricted cash, end of period | 508,366,000 | 102,210,000 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 573,000 | 572,000 |
Cash paid for taxes | 2,027,000 | 2,149,000 |
Supplemental Disclosure of Non-cash Investing and Financing Activities: | ||
Stock-based compensation capitalized for software development | 1,428,000 | 183,000 |
Accounts payable and accrued expenses related to property and equipment additions | 1,291,000 | 2,275,000 |
Vesting of early exercised stock options | 2,389,000 | 813,000 |
Deferred offering costs, accrued but not paid | 1,770,000 | 0 |
Conversion of redeemable convertible preferred stock to common stock | 331,521,000 | 0 |
Conversion of redeemable convertible preferred stock warrant liability reclassified to additional paid-in capital | $ 3,135,000 | $ 0 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Organization and Description of Business Cloudflare, Inc. (the Company, Cloudflare, we, us, or our) has built a global cloud platform that delivers a broad range of network services to businesses of all sizes and geographies, making them more secure, enhancing the performance of their business-critical applications, and eliminating the cost and complexity of managing individual network hardware. Cloudflare provides businesses with a scalable, easy-to-use, unified control plane to deliver security, performance, and reliability across their on-premise, hybrid, cloud, and SaaS applications. The Company was incorporated in Delaware in July 2009. The Company is headquartered in San Francisco, California. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying interim condensed consolidated financial statements and accompanying notes have been prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP) and applicable regulations of the Security and Exchange Commission (SEC) regarding interim financial reporting, and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year ends on December 31. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable required disclosures and regulations of the SEC. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto, included in the Company’s final prospectus for its initial public offering (IPO) filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (File No. 333-233296) on September 13, 2019 (Prospectus). Initial Public Offering In September 2019, the Company completed an IPO in which it issued and sold 40,250,000 shares of Class A common stock, which included 5,250,000 shares sold pursuant to the exercise by the underwriters of an option to purchase additional shares, at the public offering price of $15.00 per share. The Company received net proceeds of $570.5 million from sales of its shares in the IPO, after deducting underwriting discounts and commissions, but before deducting offering costs of $5.5 million. The net proceeds included proceeds of $74.4 million, net of underwriters' discounts and commissions, from the exercise of the underwriters' option to purchase an additional 5,250,000 shares of the Company's Class A common stock. Upon completion of the IPO, 31,381,152 shares of redeemable convertible preferred stock were automatically converted into an equal number of shares of Class A common stock, 134,276,690 shares of redeemable convertible preferred stock were automatically converted into an equal number of shares of Class B common stock, outstanding warrants to purchase shares of redeemable convertible preferred stock were automatically converted into outstanding warrants to purchase shares of Class B common stock, and 15,198,587 shares of Class B common stock held by former employees were automatically converted into an equal number of shares of Class A common stock. Deferred Offering Costs Deferred offering costs are capitalized and consist of fees and expenses incurred in connection with the sale of the Company's Class A common stock in the IPO, including the legal, accounting, printing and other IPO-related costs. As of December 31, 2018, the Company had not incurred such costs. During 2019, the Company capitalized $5.5 million of offering costs. In September 2019, upon completion of the IPO, the Company reclassified $5.5 million of offering costs into stockholders' equity (deficit) as a reduction of the net proceeds received from the IPO. During the nine months ended September 30, 2019, the Company paid $3.7 million of the deferred offering costs. Unaudited Interim Condensed Consolidated Financial Information The accompanying interim condensed consolidated balance sheet as of September 30, 2019, the condensed consolidated statements of operations and of comprehensive loss for the three and nine months ended September 30, 2019 and 2018, the condensed consolidated statements of cash flows for the nine months ended September 30, 2019 and 2018, the condensed consolidated statements of redeemable convertible preferred stock and stockholders’ equity (deficit) for the three and nine months ended September 30, 2019 and 2018, and the related footnote disclosures are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim condensed consolidated financial statements include all adjustments necessary to state fairly the Company’s financial position as of September 30, 2019, its results of operations for the three and nine months ended September 30, 2019 and 2018, and its cash flows for the nine months ended September 30, 2019 and 2018. The results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results expected for the full year ending December 31, 2019 or any future period. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Prospectus. 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 amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes to the condensed consolidated financial statements. Such estimates include, but are not limited to, deferred contract acquisitions costs, the period of benefit generated from the Company’s deferred contract acquisition costs, the capitalization and estimated useful life of internal-use software, useful lives of property and equipment, the valuation and recognition of stock-based compensation expense, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Management bases these estimates and assumptions on historical experience and on various other assumptions that are believed to be reasonable. Actual results could differ materially from these estimates. Significant Accounting Policies The Company's significant accounting policies are discussed in the "Notes to Consolidated Financial Statements, Note 2. Basis of Presentation and Summary of Significant Accounting Policies" in the Prospectus. There have been no significant changes to these policies that have had a material impact on the Company's condensed consolidated financial statements and related notes, except as noted below. Stock-based Compensation The Company measures and recognizes stock-based compensation expense based on the grant date fair value of the awards. The grant date fair value of stock options is estimated using the Black-Scholes option pricing model. The grant date fair value of restricted stock units (RSUs) is estimated based on the fair value of the Company's underlying common stock. The grant date fair value and the stock-based compensation expense related to purchase rights issued under the 2019 Employee Stock Purchase Plan (ESPP) is estimated using the Black-Scholes option pricing model and is based on the estimated number of awards as of the beginning of the offering period, respectively. The Black-Scholes option pricing model requires the use of highly subjective assumptions, including the award’s expected term, the fair value of the underlying common stock, the expected volatility of the price of the common stock, risk-free interest rates, and the expected dividend yield of the common stock. The assumptions used to determine the fair value of the stock-based awards are management’s best estimates and involve inherent uncertainties and the application of judgment. Stock-based compensation expense for awards with service-based vesting only is recognized on a straight-line basis over the requisite service period of the awards, which is generally four years. The Company accounts for forfeitures as they occur. Prior to the IPO, the fair value of the Company's common stock for financial reporting purposes was determined considering numerous objective and subjective factors and required judgment to determine the fair value of common stock as of each grant date. Subsequent to the IPO, the Company determines the fair value using the market closing price of its Class A common stock on the date of grant. The Company has granted qualified event options (QE Options) and qualified event restricted stock units (QE RSUs) to employees and contractors which vest on the satisfaction of both a service-based condition and a performance condition. For QE Options, the performance condition was deemed satisfied upon the Company's Class A common stock being listed on a public exchange. For QE Options, the service-based condition is satisfied by rendering service from the date of grant through the qualifying event, as well as a four four Net Loss per Share Attributable to Common Stockholders Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for multiple classes of common stock and participating securities. The Company considers its previously outstanding redeemable convertible preferred stock to be participating securities. The Company also considers any shares issued on the early exercise of stock options subject to repurchase to be participating securities because holders of such shares have nonforfeitable dividend rights in the event a dividend is paid on common stock. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. The holders of the redeemable convertible preferred stock, as well as the holders of early exercised shares subject to repurchase, do not have a contractual obligation to share in the losses of the Company. As such, the Company’s net losses for the three and nine months ended September 30, 2019 and 2018 were not allocated to these participating securities. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, other than voting rights. Accordingly, the Class A common stock and Class B common stock shared proportionately in the Company’s net losses. Prior to the nine months ending September 30, 2019, there were no shares of Class A common stock issued and outstanding. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, less shares subject to repurchase. Vested RSUs that have not been settled have been included in the appropriate common share class used to calculate basic net loss per share. Diluted net loss per share attributable to common stockholders adjusts basic net loss per share for the effect of dilutive securities, including awards under the Company's equity incentive plans. As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. Upon completion of the IPO, all shares of redeemable convertible preferred stock then outstanding were automatically converted into an equivalent number of shares of common stock on a one-to-one basis and their carrying amount reclassified into stockholders' equity (deficit). As of September 30, 2019, there were no shares of redeemable convertible preferred stock issued and outstanding. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In July 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. This ASU reduces the complexity associated with an issuer’s accounting for certain financial instruments with characteristics of liabilities and equity. Specifically, the FASB determined that a down round feature would no longer cause a freestanding equity-linked financial instrument (or an embedded conversion option) to be accounted for as a derivative liability at fair value with changes in fair value recognized in current earnings. For public business entities, it is effective for fiscal years beginning after December 15, 2018, and interim periods therein. For all other entities, it is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company adopted this guidance effective September 30, 2019 using the prospective approach. The adoption of ASU 2017-11 did not have a material impact on the condensed consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which provides financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. For all entities, it is effective for fiscal years beginning after December 15, 2018, and interim periods therein. Early adoption is permitted. The amendments in this ASU should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company adopted this ASU effective January 1, 2019, noting no material impact on the Company’s condensed consolidated financial statements. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), and since that date, has issued several ASUs to further clarify certain aspects of ASU 2016-02 and provide entities with practical expedients that may be elected upon adoption. ASU 2016-02 introduces the recognition of right-of-use assets and lease liabilities by lessees for all leases on the condensed consolidated balance sheets. For the consolidated statements of operations, the ASU retains the distinction between finance leases and operating leases, with the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the previous lease guidance. During the transition period for this ASU, lessees and lessors are required to recognize and measure leases at either the beginning of the earliest period presented using a modified retrospective approach, or at the adoption date recognizing the cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The effective date and transition requirements of ASU 2016-02, for public business entities, is interim and annual periods beginning on or after December 15, 2018, with early adoption permitted. For all other entities, ASU 2016-02 is effective for annual periods beginning on or after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020. Early adoption is permitted. The Company intends to adopt the ASU beginning January 1, 2020, and has elected to apply the alternate transition method by recording a cumulative-effect adjustment to the opening balance of retained earnings (accumulated deficit) in the period of adoption. The Company is currently evaluating the effect that this ASU will have on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (ASC 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement . This guidance provides that implementation costs be evaluated for capitalization using the same criteria as that used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement. For public business entities, it is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, it is effective for fiscal years beginning after December 15, 2020, and interim periods beginning after December 15, 2021. Early adoption of the amendments in this update is permitted, including adoption in any interim period, for all entities. The Company is currently evaluating the potential impact of this ASU on its consolidated financial statements. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue Recognition The Company elected to early adopt Accounting Standards Codification (ASC) Topic 606, Revenue From Contracts With Customers (ASC 606), effective as of January 1, 2017, retrospectively. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these services. To achieve this standard, the Company applies the following five steps: 1. Identify the contract with a customer The Company considers the terms and conditions of the contracts and its customary business practices in identifying its contracts under ASC 606. The Company determines it has a contract with a customer when the contract is approved, the Company can identify each party’s rights regarding the services to be transferred, the Company can identify the payment terms, the Company has determined that collectibility is probable, and the contract has commercial substance. The Company applies judgment in determining that collectibility is probable, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information relevant to the customer. 2. Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available to the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. The Company’s performance obligation primarily consists of subscription and support services, as they are provided over the same service period. 3. Determine the transaction price The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Usage-based variable consideration is recognized in the period it is incurred. None of the Company’s contracts contain a significant financing component. 4. Allocate the transaction price to performance obligations in the contract The subscription and support services in the Company’s contracts are considered a single performance obligation, and thus the entire transaction price is allocated to the single performance obligation. 5. Recognize revenue when or as the Company satisfies a performance obligation Revenue is recognized at the time the related performance obligation is satisfied by transferring the service to a customer. Revenue is recognized when control of the services is transferred to the Company’s customers, in an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for those services. The Company generates sales directly through its sales team and through its channel partners. Revenue from sales to channel partners are recorded once all revenue recognition criteria above are met. Channel partners generally receive an order from an end-customer prior to placing an order with the Company. Payment from channel partners is not contingent on the partner’s collection from end-customers. The Company has determined that it is acting as an agent in these arrangements and records this revenue on a net basis. Subscription and Support Revenue The Company generates revenue primarily from sales to its customers of subscriptions to access its platform, together with related support services. Arrangements with customers generally do not provide the customer with the right to take possession of the Company’s software operating its global cloud platform at any time. Instead, customers are granted continuous access to the Company’s global cloud platform over the contractual period. Access to the Company’s platform and products is considered a monthly series comprising one performance obligation. A time-elapsed output method is used to measure progress because the Company transfers control evenly over the contractual period. Accordingly, the fixed consideration related to subscription and support revenue is generally recognized on a straight-line basis over the contract term beginning on the date that the Company’s service is made available to the customer. Usage-based consideration is primarily related to fees charged for the Company’s customer’s use of excess bandwidth when accessing the Company’s platform in a given period and is recognized as revenue in the period in which the usage occurs. The typical subscription and support term for the Company’s contracted customers, which consist of customers that enter into contracts for the Company's Enterprise subscription plan (and which the Company previously referred to as enterprise customers), is one year and subscription and support term lengths range from one Variable Consideration If the Company’s services do not meet certain service level commitments, its customers are entitled to receive service credits, and in certain cases, refunds, each representing a form of variable consideration. Revenue from sales is recorded at the net sales price, which is the transaction price, and includes estimates of these forms of variable consideration to the extent that a significant reversal of cumulative revenue will not occur in a future period. The Company has historically not experienced any incidents that had a material impact on its consolidated financial statements. Accordingly, any estimated refunds related to these agreements in the condensed consolidated financial statements are not material during the periods presented. Usage-based consideration is primarily related to fees charged for the Company’s customer’s use of excess bandwidth when accessing the Company’s platform in a given period and is recognized as revenue in the period in which the usage occurs. Disaggregation of Revenue Subscription and support revenue is recognized over time and accounted for substantially all of the Company’s revenue for the three and nine months ended September 30, 2019 and 2018. The following table summarizes the revenue by region based on the billing address of customers who have contracted to use the Company’s global cloud platform: Three Months Ended September 30 Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) Amount Percentage Amount Percentage Amount Percentage Amount Percentage United States $ 37,605 51 % $ 23,914 48 % $ 101,571 50 % $ 64,874 47 % Europe, Middle East, and Africa 17,652 24 % 12,648 25 % 48,275 24 % 35,375 26 % Asia Pacific 13,993 19 % 10,223 20 % 39,782 20 % 27,989 20 % Other 4,691 6 % 3,285 7 % 13,464 6 % 8,937 7 % Total $ 73,941 100 % $ 50,070 100 % $ 203,092 100 % $ 137,175 100 % The following table summarizes the revenue from contracts by type of customer: Three Months Ended September 30 Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) Amount Percentage Amount Percentage Amount Percentage Amount Percentage Channel partners $ 6,554 9 % $ 3,367 7 % $ 18,413 9 % $ 9,085 7 % Direct customers 67,387 91 % 46,703 93 % 184,679 91 % 128,090 93 % Total $ 73,941 100 % $ 50,070 100 % $ 203,092 100 % $ 137,175 100 % Contract Balances Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period. For the nine months ended September 30, 2019 and 2018, the Company recognized revenue of $16.3 million and $11.3 million, respectively, that was included in the corresponding contract liability balance at the beginning of the periods presented. The Company receives payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. Standard payment terms are due upon receipt. Contract assets include amounts related to the Company’s contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced. Costs to Obtain and Fulfill a Contract The Company capitalizes sales commission and associated payroll taxes paid to internal sales personnel that are incremental to the acquisition of channel partner and direct customer contracts. These costs are recorded as deferred contract acquisition costs on the condensed consolidated balance sheets. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are in fact incremental and would not have occurred absent the customer contract. Sales commissions for renewal of a contract are not considered commensurate with the commissions paid for the acquisition of the initial contract. Commissions paid upon the initial acquisition of a contract are amortized over an estimated period of benefit of three years while commissions paid for renewal contracts are amortized over the contractual term of the renewals. Amortization of deferred contract acquisition costs is recognized on a straight-line basis commensurate with the pattern of revenue recognition and included in sales and marketing expense in the condensed consolidated statements of operations. The Company determines the period of benefit for commissions paid for the acquisition of the initial contract by taking into consideration the expected subscription term and expected renewals of its customer contracts, the duration of its relationships with its customers, customer retention data, its technology development lifecycle, and other factors. The Company periodically reviews the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred costs. The Company did not recognize any impairment losses of deferred contract acquisition costs during the periods presented. The following table summarizes the activity of the deferred contract acquisition costs: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) Beginning balance $ 19,482 $ 13,033 $ 15,940 $ 10,765 Capitalization of contract acquisition costs 4,477 3,233 12,923 8,639 Amortization of deferred contract acquisition costs (2,818) (1,852) (7,722) (4,990) Ending balance $ 21,141 $ 14,414 $ 21,141 $ 14,414 Remaining Performance Obligations As of September 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $188.7 million. As of September 30, 2019, the Company expected to recognize 84% of its remaining performance obligations as revenue over the next 12 months and 16% of its remaining performance obligations as revenue over the next three years. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received from sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities measured at fair value are classified into the following categories: • Level I: Observable inputs are unadjusted quoted prices in active markets for identical assets or liabilities; • Level II: Observable 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; and • Level III: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation. The Company's cash equivalents are comprised of highly liquid money market funds and commercial paper. The Company classifies money market funds within Level I of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company classifies its investments, which are comprised of U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate bonds, within Level II of the fair value hierarchy because the fair value of these securities is priced by using inputs based on non-binding market consensus prices that are primarily corroborated by observable market data or quoted market prices for similar instruments. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each period. There were no transfers between levels during the periods presented. The following table summarizes the Company’s cash and available-for-sale securities’ amortized cost, unrealized gains (losses), and fair value by significant investment category reported as cash and cash equivalents, restricted cash, marketable securities, or long-term investments as of September 30, 2019 and December 31, 2018. (in thousands) Reported as: September 30, 2019 Amortized Unrealized Unrealized Fair Value Cash & Marketable Long-term Long- Cash $ 2,202 $ — $ — $ 2,202 $ 2,202 $ — $ — $ — Level I: Money market funds 506,164 — — 506,164 499,504 — — 6,660 Level II: Corporate bonds 15,030 23 — 15,053 — 8,988 6,066 — U.S. treasury securities 115,550 80 — 115,630 — 105,526 10,103 — U.S. government agency securities 1,100 — — 1,100 — 1,100 — — Commercial paper 27,785 — — 27,785 — 27,785 — — Subtotal 159,465 103 — 159,568 — 143,399 16,169 — Total assets measured at fair value on a recurring basis $ 667,831 $ 103 $ — $ 667,934 $ 501,706 $ 143,399 $ 16,169 $ 6,660 (in thousands) Reported as: December 31, 2018 Amortized Unrealized Unrealized Fair Cash & Marketable Long-term Long-term Cash $ 4,151 $ — $ — $ 4,151 $ 4,151 $ — $ — $ — Level I: Money market funds 23,278 — — 23,278 16,907 — — 6,371 Level II: Corporate bonds 17,291 1 (16) 17,276 — 17,276 — — U.S. treasury securities 102,360 8 (20) 102,348 — 102,348 — — U.S. government agency securities 1,099 — — 1,099 — 1,099 — — Commercial paper 18,876 — — 18,876 3,997 14,879 — — Subtotal 139,626 9 (36) 139,599 3,997 135,602 — — Total assets measured at fair value on a recurring basis $ 167,055 $ 9 $ (36) $ 167,028 $ 25,055 $ 135,602 $ — $ 6,371 The aggregate fair value of the Company’s money market funds approximated amortized cost and, as such, there were no unrealized gains or losses on money market funds as of September 30, 2019 and December 31, 2018. Realized gains and losses, net of tax, were not material for any of the periods presented. The amortized cost of available-for-sale investments with maturities less than one year was $143.4 million and $135.6 million as of September 30, 2019 and December 31, 2018, respectively. The amortized cost of available-for-sale investments with maturities greater than one year was $16.2 million and zero as of September 30, 2019 and December 31, 2018, respectively. As of September 30, 2019, net unrealized gains on investments were $0.07 million net of tax and were included in accumulated other comprehensive income on the condensed consolidated balance sheet. As of December 31, 2018, net unrealized losses on investments were $0.06 million net of tax and were included in accumulated other comprehensive loss on the condensed consolidated balance sheet. The unrealized gains and losses on available-for-sale investments are related to U.S. treasury securities, U.S. government agency securities, and corporate bonds. The Company determined these unrealized losses to be temporary. Factors considered in determining whether a loss is temporary include the length of time and extent to which the investment’s fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, the extent of the loss related to the credit of the issuer, the expected cash flows from the security, the Company’s intent to sell the security, and whether or not the Company will be required to sell the security before the recovery of its amortized cost. The Company classifies financial instruments in Level III of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation models for Level III financial instruments typically also rely on a number of inputs that are readily observable, either directly or indirectly. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The gains and losses presented below include changes in the fair value related to both observable and unobservable inputs. Prior to the IPO, the Company's only Level III financial instruments were its redeemable convertible preferred stock warrants. Upon the completion of the IPO, the warrant to purchase shares of Series B redeemable convertible preferred stock was converted into a warrant to purchase shares of Class B common stock. As a result, the warrant liability was remeasured and reclassified to additional paid-in capital within stockholders' equity (deficit). The following tables summarize the Company’s redeemable convertible preferred stock warrant liability measured and recorded at fair value as of September 30, 2019 and December 31, 2018: September 30, 2019 Fair Value Reported as (in thousands) Fair value using Level III inputs Redeemable convertible preferred stock warrant liability $ 3,135 $ 3,135 Reclassification to stockholders' equity (deficit) (3,135) (3,135) Balance as of September 30, 2019 $ — $ — December 31, 2018 Fair Value Reported as (in thousands) Fair value using Level III inputs Redeemable convertible preferred stock warrant liability $ 1,618 $ 1,618 Balance as of December 31, 2018 $ 1,618 $ 1,618 Redeemable (in thousands) Balance as of December 31, 2018 $ 1,618 Addition — Change in fair value 1,517 Conversion of redeemable convertible preferred stock warrants into Class B common stock warrants (3,135) Balance as of September 30, 2019 $ — Refer to Note 8 to these condensed consolidated financial statements for further information on the redeemable convertible preferred stock warrants, including the assumptions used to determine their fair value and further information on the exercise of such warrants in the three and nine months ended September 30, 2019. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Balance Sheet Components Accounts Receivable and Allowance As of September 30, 2019 and December 31, 2018, the Company’s allowance for doubtful accounts was $0.6 million and $0.2 million, respectively. Bad debt expense for the three months ended September 30, 2019 and 2018 was $0.4 million and zero, respectively, and for both the nine months ended September 30, 2019 and 2018 was $0.9 million. As of September 30, 2019 and December 31, 2018, the write-off of uncollectible accounts receivable was $0.4 million and $0.9 million, respectively. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Prepaid expenses $ 12,305 $ 5,581 Deposits 2,403 2,635 Other 2,190 1,157 Total prepaid expenses and other current assets $ 16,898 $ 9,373 Property and Equipment, Net Property and equipment, net consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Property and equipment: Servers—network infrastructure $ 75,362 $ 57,089 Buildings 13,035 13,035 Construction in progress 7,690 14,848 Capitalized internal-use software 27,966 16,344 Office and computer equipment 12,033 6,552 Office furniture 5,668 3,573 Software 990 847 Leasehold improvements 8,395 772 Asset retirement obligation 231 49 Gross property and equipment 151,370 113,109 Less accumulated depreciation and amortization (58,885) (39,899) Total property and equipment, net $ 92,485 $ 73,210 Depreciation and amortization expense on property and equipment for the three months ended September 30, 2019 and 2018 was $7.7 million and $5.0 million, respectively, and for the nine months ended September 30, 2019 and 2018 was $20.8 million and $13.0 million, respectively. This includes amortization expense for capitalized internal-use software which totaled $1.8 million and $1.0 million for the three months ended September 30, 2019 and 2018, respectively, and $4.6 million and $2.1 million for the nine months ended September 30, 2019 and 2018, respectively. Acquired Intangible Assets, Net Acquired intangible assets, net consisted of the following: September 30, 2019 Gross Carrying Accumulated Net Book (in thousands) Developed technology $ 250 $ 188 $ 62 Total acquired intangible assets, net $ 250 $ 188 $ 62 December 31, 2018 Gross Carrying Accumulated Net Book (in thousands) Developed technology $ 250 $ 94 $ 156 Total acquired intangible assets, net $ 250 $ 94 $ 156 The Company recorded, at the time of the acquisition, acquired in-process research and development for projects in progress that had not yet reached technological feasibility. The Company began amortizing the in-process research and development as developed technology in 2018 using the straight-line method over its estimated useful life. Amortization of acquired intangible assets for the three months ended September 30, 2019 and 2018 was $0.03 million and $0.2 million, respectively, and for the nine months ended September 30, 2019 and 2018 was $0.09 million and $0.4 million, respectively. As of September 30, 2019, the estimated future amortization expense of acquired intangible assets was as follows: Estimated (in thousands) Year ending December 31, 2019 (remaining three months) $ 31 2020 31 Total $ 62 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Accrued compensation and benefits $ 12,170 $ 7,075 Accrued expenses 4,428 4,072 Customer refunds and credits 2,772 2,336 Accrued co-location and bandwidth 1,658 1,119 Income taxes payable — 225 Other 2,093 872 Total accrued expenses and other current liabilities $ 23,121 $ 15,699 Other Noncurrent Liabilities Other noncurrent liabilities consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Indirect tax reserves $ 6,476 $ 4,137 Deferred rent 2,367 1,659 Other 2,150 908 Total other noncurrent liabilities $ 10,993 $ 6,704 |
Note Payable
Note Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Note Payable | Note PayableIn July 2015 and November 2015, the Company entered into three separate Installment Purchase Agreements (the IPA Agreements) totaling $1.7 million for computer equipment and maintenance with one of its suppliers. The IPA Agreements are collateralized by the equipment purchased from the supplier and bear interest ranging from 2.9% to 5.0%. As of September 30, 2019 and December 31, 2018, the Company had $0.04 million and $0.3 million respectively, outstanding under this facility. Aggregate annual future payments due on the Company’s outstanding IPA Agreements balance as of September 30, 2019 were as follows: Amount (in thousands) 2019 (remaining three months) $ 37 Total payments 37 Less amount representing interest — Total note payable 37 Less current portion (37) Note payable, net of current portion $ — |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company has entered into various non-cancelable operating lease agreements for certain of its offices and co-location facilities with lease periods expiring between the years ending December 31, 2019 and 2027. Certain of these arrangements have free or escalating rent payment provisions. The Company recognizes rent expense on a straight-line basis over the lease period. The difference between the rent paid and the straight-line rent is recorded as deferred rent, which is included in accrued expenses and other current liabilities and other noncurrent liabilities on the condensed consolidated balance sheets. Rent expense was $3.1 million and $1.7 million for the three months ended September 30, 2019 and 2018, respectively, and $8.5 million and $5.0 million for the nine months ended September 30, 2019 and 2018, respectively. Refer to the table below for the aggregate future minimum lease payments under non-cancelable operating leases as of September 30, 2019. As of September 30, 2019, the Company had $6.7 million in restricted cash related to irrevocable standby letters of credit established according to the requirements under lease agreements. Bandwidth & Co-location Commitments The Company enters into long-term non-cancelable agreements with providers in various countries to purchase capacity, such as bandwidth and co-location space, for the Company’s global cloud platform. Bandwidth and co-location costs for paying customers are recorded as cost of revenue in the condensed consolidated statements of operations and as sales and marketing expense in the condensed consolidated statements of operations for free customers. Such costs totaled $9.7 million and $6.8 million for the three months ended September 30, 2019 and 2018, respectively, and $26.8 million and $19.5 million for the nine months ended September 30, 2019 and 2018, respectively. Refer to the table below for long-term bandwidth and co-location commitments under non-cancelable contracts with various networks and Internet service providers as of September 30, 2019. Purchase Commitments Open purchase commitments are for the purchase of services under non-cancelable contracts. They are not recorded as liabilities on the condensed consolidated balance sheet as of September 30, 2019 as the Company has not yet received the related services. Refer to the table below for purchase commitments under non-cancelable contracts with various vendors as of September 30, 2019. Payments Due by Period as of September 30, 2019 Total 2019 (remaining three months) 2020 2021 2022 2023 Thereafter (in thousands) Non-cancelable: Open purchase agreements (1) $ 12,669 $ 315 $ 1,887 $ 1,938 $ 1,489 $ 1,373 $ 5,667 Bandwidth and co-location commitments (2) 36,072 6,189 17,802 8,035 2,441 1,237 368 Operating lease obligations (3) 54,508 2,928 12,359 11,136 8,620 5,334 14,131 Other commitments (4) 37 37 — — — — — Total $ 103,286 $ 9,469 $ 32,048 $ 21,109 $ 12,550 $ 7,944 $ 20,166 (1) Open purchase commitments are for the purchase of services under non-cancelable contracts. They were not recorded as liabilities on the condensed consolidated balance sheet as of September 30, 2019 as the Company had not yet received the related services. (2) Long-term commitments for bandwidth usage and co-location with various networks and Internet service providers. The costs for services not yet received were not recorded as liabilities on the condensed consolidated balance sheet as of September 30, 2019. (3) Office space and equipment under non-cancelable operating leases. Total payments listed represent total minimum future lease payments. (4) Consists of note payable under the IPA agreements and amount includes accrued interest at the contractual rate. Build-to-Suit Lease Financing Obligation The Company entered into a lease whereby the Company is deemed the accounting owner under build-to-suit lease accounting. The fair value of the leased property and corresponding financing obligation are included in property and equipment, net and build-to-suit lease financing obligation, respectively, on the condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018. As of September 30, 2019, the Company’s future minimum lease payments required under this non-cancelable obligation were as follows: Build-to-Suit Lease (in thousands) Year ending December 31, 2019 (remaining three months) $ 659 2020 2,673 2021 2,753 2022 2,355 2023 — Total minimum lease payments $ 8,440 The Company recognizes an increase in the fair value of the asset as additional building costs are incurred during the construction period and a corresponding increase in the build-to-suit lease financing obligation for any construction costs to be reimbursed by the landlord. As of September 30, 2019 and December 31, 2018, $10.5 million and $10.4 million, respectively, of build-to-suit lease financing obligation was included on the condensed consolidated balance sheets. Legal Matters From time to time the Company is a party to various legal proceedings that arise in the ordinary course of business. In addition, third parties may from time to time assert claims against the Company in the form of letters and other communications. Management currently believes that there is no pending or threatened legal proceeding to which the Company is a party that is likely to have a material adverse effect on the Company’s condensed consolidated financial statements. However, the results of legal proceedings are inherently unpredictable and if an unfavorable ruling were to occur in any of the legal proceedings there exists the possibility of a material adverse effect on the Company’s financial position, results of operations, and cash flows. The Company accrues for legal proceedings that it considers probable and for which the loss can be reasonably estimated. The Company discloses potential losses when they are reasonably possible. Legal costs incurred and expected to be incurred related to litigation matters are expensed as incurred. The Company’s platform and associated products are subject to various restrictions under U.S. export control and sanctions laws and regulations, including the U.S. Department of Commerce’s Export Administration Regulations (EAR) and various economic and trade sanctions regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Controls (OFAC). The U.S. export control laws and U.S. economic sanctions laws include restrictions or prohibitions on the sale or supply of certain products and services to U.S. embargoed or sanctioned countries, governments, persons and entities and also require authorization for the export of certain encryption items. In addition, various countries regulate the import of certain encryption technology, including through import permitting and licensing requirements and have enacted or could enact laws that could limit the Company’s ability to distribute its platform. Although the Company takes precautions to prevent its platform and associated products from being accessed or used in violation of such laws, the Company may have inadvertently allowed its platform and associated products to be accessed or used by some customers in apparent violation of U.S. economic sanctions laws, including by users in embargoed or sanctioned countries, and the Company may have exported or allowed the download of certain software prior to making required filings with the U.S. Department of Commerce’s Bureau of Industry and Security. As a result, the Company has submitted to OFAC and to the Bureau of Industry and Security a voluntary self-disclosure concerning potential violations, and the Company has submitted a voluntary self-disclosure to the Census Bureau regarding potential violations of the Foreign Trade Regulations related to some incorrect electronic export information statements to the U.S. government for certain hardware exports, which were authorized. If the Company is found to be in violation of U.S. economic sanctions or export control laws, it could result in substantial fines and penalties for the Company and for the individuals working for the Company. The Company may also be adversely affected through other penalties, reputational harm, loss of access to certain markets or otherwise. No loss has been recognized in the condensed consolidated financial statements for this loss contingency as it is not probable a loss has been incurred and the range of a possible loss is not yet estimable. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 9 Months Ended |
Sep. 30, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Convertible Preferred Stock | Redeemable Convertible Preferred Stock Redeemable Convertible Preferred Stock Upon completion of the IPO, all shares of Series A, Series B, and Series C redeemable convertible preferred stock then outstanding, totaling 134,276,690 shares, were automatically converted into an equivalent number of shares of Class B common stock on a one-to-one basis and all shares of Series D redeemable convertible preferred stock outstanding, totaling 31,381,152 shares, were automatically converted into an equivalent number of shares of Class A common stock on a one-to-one basis. The carrying value of $331.5 million was reclassified into stockholders' equity (deficit). As of September 30, 2019, there were no shares of redeemable convertible preferred stock issued and outstanding. In connection with the IPO, the Company's amended and restated certificate of incorporation became effective, which authorized the issuance of 225,000,000 shares of preferred stock with a par value of $0.001 per share with rights and preferences, including voting rights, designated from time to time by the Company's board of directors. Redeemable Convertible Preferred Stock Warrants In connection with the terms of a loan and security agreement entered into by the Company in April 2011, the Company issued a warrant to purchase 59,140 shares of Series B redeemable convertible preferred stock upon execution of the agreement, an additional warrant to purchase 94,510 shares of Series B redeemable convertible preferred stock in connection with the Company’s drawdown of $1.6 million under the facility during October 2011, and a warrant to purchase 23,760 shares of Series B redeemable convertible preferred stock in connection with the final drawdown of $0.4 million in January 2012. The warrants had an exercise price of $0.34 per share. The warrants were considered a liability and carried at fair value with any changes in fair value recognized in other income (expense), net in the condensed consolidated statements of operations. Upon completion of the IPO, the warrants to purchase Series B redeemable convertible preferred stock were automatically converted to warrants to purchase an equal number of shares of Class B common stock. As a result, the warrant liability was remeasured and reclassified to additional paid-in capital within stockholders' equity (deficit). During the three months ended September 30, 2019 and 2018, the Company recorded a loss of $1.2 million and $1.0 million, respectively, and during the nine months ended September 30, 2019 and 2018 the Company recorded a loss of $1.5 million and $1.2 million, respectively, related to the change in fair value of the redeemable convertible preferred stock warrants. The fair value of the redeemable convertible preferred stock warrants was determined using the following assumptions: September 17, 2019 December 31, 2018 Remaining contractual life (in years) 1.6 2.3 Expected volatility 38.8 % 39.2 % Risk-free interest rate 1.8 % 2.5 % Expected dividend rate — — In the three and nine months ended September 30, 2019, the warrants were exercised and such shares were settled via the net settlement method, resulting in the issuance of 174,347 shares of the Company's Class B common stock. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Common Stock | Common Stock The Company’s amended and restated certificate of incorporation authorizes the issuance of Class A common stock and Class B common stock. The holder of each share of Class A common stock is entitled to one vote per share, while the holder of each share of Class B common stock is entitled to 10 votes per share. As of September 30, 2019 and December 31, 2018, the Company was authorized to issue 2,250,000,000 and 550,000,000 shares of Class A common stock, respectively, and 315,000,000 and 300,000,000 shares of Class B common stock, respectively, each with a par value of $0.001 per share. There were 86,838,606 and zero shares of Class A common stock issued and outstanding as of September 30, 2019 and December 31, 2018, respectively. The number of shares of Class B common stock issued and outstanding was 213,308,441 and 91,542,243, as of September 30, 2019 and December 31, 2018, respectively. Holders of the Company’s Class A common stock and Class B common stock are entitled to dividends when, as and if declared by the Company’s board of directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. Any dividends paid to the holders of the Class A common stock and Class B common stock will be paid on a pro rata basis. As of September 30, 2019 and December 31, 2018, the Company had not declared any dividends. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting, protective provisions and conversion. Class A common stock and Class B common stock are referred to, collectively, as common stock throughout the notes to these condensed consolidated financial statements, unless otherwise indicated. Common Stock Reserved for Future Issuance Shares of common stock reserved for future issuance, on an as-if converted basis, are as follows: September 30, 2019 December 31, 2018 (in thousands) Conversion of redeemable convertible preferred stock — 165,658 Stock options issued and outstanding 21,878 25,087 Remaining shares available for issuance under the 2010 Plan — 13,356 Remaining shares available for issuance under the 2019 Plan 29,387 — Redeemable convertible preferred stock warrants outstanding — 177 Outstanding and unsettled RSUs 6,185 — Shares available for issuance under the ESPP 5,870 — Total shares of common stock reserved 63,320 204,278 |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Equity Incentive Plans In 2010, the Company's board of directors adopted and stockholders approved the 2010 Equity Incentive Plan (2010 Plan). The 2010 Plan is a broad-based retention program and is intended to attract and retain talented employees, directors and non-employee consultants. The 2010 Plan provides for the granting of stock options, restricted stock, RSUs, and stock appreciation rights to employees, directors, and consultants. Incentive stock options may be granted only to employees. All other awards under the 2010 Plan, including non-qualified stock options, may be granted to employees, directors, and consultants. Except for qualifying assumptions and substitutions of options, the exercise price of an incentive stock option and non-qualified stock option shall not be less than 100% of the fair market value of such shares on the date of grant. The number of shares of common stock authorized for issuance under the 2010 Plan was 75,008,088 as of December 31, 2018. Prior to the Company's IPO, stock-based awards forfeited, canceled, or repurchased generally were returned to the pool of shares of common stock available for issuance under the 2010 Plan. The number of shares of common stock available for issuance under the 2010 Plan was zero and 13,355,967 as of September 30, 2019 and December 31, 2018, respectively. In connection with the IPO, the 2010 Plan was terminated effective immediately prior to the effectiveness of the 2019 Equity Incentive Plan (2019 Plan) and the Company ceased granting any additional awards under the 2010 Plan. All outstanding awards under the 2010 Plan at the time of the termination of the 2010 Plan remain subject to the terms of the 2010 Plan, and any shares underlying stock options that expire or terminate or are forfeited or repurchased by the Company under the 2010 Plan will be automatically transferred to the 2019 Plan. In 2019, the Company's board of directors adopted and stockholders approved the 2019 Plan, which became effective one business day prior to the effective date of the Company's registration statement on Form S-1 for the IPO. The 2019 Plan provides for the granting of stock options, restricted stock, RSUs, stock appreciation rights, performance shares, performance stock units, and performance awards for the Company's Class A common stock to the Company's employees, directors, and consultants. Except as otherwise indicated below, the maximum number of shares of Class A common stock that may be issued under the 2019 Plan will not exceed 66,661,953 shares of the Company's Class A common stock, which is the sum of (1) 29,335,000 new shares, plus (2) an additional number of shares of Class A common stock not to exceed 37,326,953, consisting of the total number of shares of Class A or Class B common stock subject to outstanding awards granted under the 2010 Plan that, on or after the 2019 Plan became effective, are canceled, expire, or otherwise terminate prior to exercise or settlement; are repurchased by the Company because of the failure to vest; or are forfeited, tendered to, or withheld by the Company (or not issued) to satisfy a tax withholding obligation or the payment of an exercise price, if any, as such shares become available from time to time. Stock-based awards under the 2019 Plan that expire or are forfeited, canceled, or repurchased generally are returned to the pool of shares of Class A common stock available for issuance under the 2019 Plan. In addition, the number of shares of the Company's Class A common stock reserved for issuance under the 2019 Plan will automatically increase on January 1 of each calendar year, starting on January 1, 2021 through January 1, 2029, in an amount equal to the least of (i) 29,335,000 shares, (ii) 5% of the total number of shares of Class A and Class B common stock outstanding on December 31 of the fiscal year before the date of each automatic increase, or (iii) a lesser number of shares determined by the compensation committee of the Company's board of directors prior to the applicable January 1. As of September 30, 2019, no shares of Class A common stock were granted under the 2019 Plan and the number of shares of Class A common stock available for issuance under the 2019 Plan was 29,386,922. Stock Options Under the 2010 Plan and 2019 Plan, at exercise, stock option awards entitle the holder to receive one share of Class B or Class A common stock, in the case of the 2010 Plan, or one share of Class A common stock, in the case of the 2019 Plan. Stock options granted under the 2010 Plan generally vest over a four The following table summarizes the stock options activity under the 2010 Plan: Stock Options Outstanding (in thousands, except year and per share data) Shares Subject Weighted- Weighted- Aggregate Balances as of December 31, 2018 25,087 $ 2.18 8.4 $ 159,945 Options granted 394 $ 9.60 Options exercised (2,589) $ 2.24 $ 21,188 Repurchase of unvested shares — Options canceled/forfeited/expired (1,014) $ 2.46 Balances as of September 30, 2019 21,878 $ 2.30 7.8 $ 355,967 Vested and expected to vest as of September 30, 2019 21,878 $ 2.30 7.8 $ 355,967 Exercisable as of September 30, 2019 21,865 $ 2.30 7.8 $ 355,755 The weighted-average assumptions used to determine the fair value of stock options granted during the periods presented were as follows: Nine months ended September 30, 2019 2018 Expected term (in years) 6.2 6.5 Expected volatility 40.3 % 43.5 % Risk-free interest rate 2.3 % 2.9 % Dividend yield — — The weighted-average grant date fair value of options granted during the nine months ended September 30, 2019 and 2018 was $4.10 and $1.31 per share, respectively. The aggregate intrinsic value is the difference between the exercise price of the option and the estimated fair value of the underlying common stock. Options exercisable include 17,118,432 and 20,697,847 options that were unvested as of September 30, 2019 and December 31, 2018, respectively. The total grant date fair value for vested options in the nine months ended September 30, 2019 and 2018 was $3.5 million and $2.7 million, respectively. As of September 30, 2019 and December 31, 2018, there was $18.4 million and $15.5 million, respectively, of unrecognized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of 2.8 years and 3.8 years, respectively. Early Exercises of Stock Options The 2010 Plan allows for the early exercise of stock options for certain individuals as determined by the Company’s board of directors. Shares of common stock issued upon early exercises of unvested options are not deemed, for accounting purposes, to be issued until those shares vest according to their respective vesting schedules and accordingly, the consideration received for early exercises is initially recorded as a liability and reclassified to common stock and additional paid-in capital as the underlying awards vest. Stock options that are early exercised are subject to a repurchase option that allows the Company to repurchase any unvested shares within six months of an individual’s termination for any reason, including death and disability (or in the case of shares issued upon exercise of an option after termination, within six months of the date of exercise), at the price equal to the lower of the amount paid by the purchaser and the fair market value at the time of repurchase, except that after the IPO the repurchase price will be the amount paid by the purchaser. As of September 30, 2019 and December 31, 2018, the Company had $14.6 million and $14.3 million, respectively, recorded in liability for early exercise of unvested stock options, and the related number of unvested shares subject to repurchase was 6,563,716 and 6,737,971, respectively. Restricted Stock Units RSUs granted under the 2010 Plan generally vest upon the satisfaction of both a service-based vesting condition and a performance vesting condition, as defined below, occurring before these RSUs expire. RSUs granted under the 2019 Plan generally vest upon the satisfaction of a service-based vesting condition. The service-based vesting condition for employees under both the 2010 Plan and the 2019 Plan is typically satisfied over a four one three four RSU activity for the nine months ended September 30, 2019 was as follows: RSUs Weighted-Average (in thousands, except per share data) Unvested and outstanding as of December 31, 2018 — Granted 6,465 $ 9.74 Vested (317) $ 8.62 Forfeited (280) $ 8.70 Unvested as of September 30, 2019 5,868 $ 9.85 Vested and not yet released 317 $ 8.62 Outstanding as of September 30, 2019 6,185 $ 9.79 The total grant date fair value for vested RSUs for the nine months ended September 30, 2019 and 2018 was $2.7 million and zero, respectively. The total stock-based compensation expense for RSUs for the three months ended September 30, 2019 and 2018 was $15.4 million and zero, respectively, and for the nine months ended September 30, 2019 and 2018, was $15.4 million and zero, respectively. As of September 30, 2019 and December 31, 2018, the total unrecognized stock-based compensation expense related to RSUs was $45.1 million and zero, respectively, that is expected to be recognized over a weighted-average period of 2.0 years and zero 2019 Employee Stock Purchase Plan In September 2019, the Company's board of directors adopted and stockholders approved the 2019 Employee Stock Purchase Plan (ESPP), which became effective one business day prior to the effective date of the Company's registration statement on Form S-1 filed with the SEC in connection with the IPO. A total of 5,870,000 shares of Class A common stock were initially reserved for sale under the ESPP. The number of shares of Class A common stock reserved for issuance includes an annual increase on the first day of each fiscal year, beginning on January 1, 2021, by the least of (1) 5,870,000 shares of Class A common stock, (2) 1% of the total number of shares of Class A and Class B common stock outstanding on December 31 of the fiscal year before the date of each automatic increase; or (3) such lesser amount as the compensation committee of the Company's board of directors may determine prior to the applicable January 1. Generally, all regular employees, including executive officers, employed by the Company or by any of its designated subsidiaries, except for those holding 5% or more of the total combined voting power or value of all classes of common stock, may participate in the ESPP and may contribute, normally through payroll deductions, up to 10% of their eligible compensation for the purchase of Class A common stock under the ESPP. Unless otherwise determined by the compensation committee of the board of directors, Class A common stock will be purchased for the accounts of employees participating in the ESPP at a price per share that is the lesser of (1) 85% of the fair market value of a share of the Company's Class A common stock on the first date of an offering period, or (2) 85% of the fair market value of a share of the Company's Class A common stock on the date of purchase. The initial offering period began on September 13, 2019 and will end on May 15, 2020, with the purchase date of May 15, 2020. The ESPP generally provides for six six As of September 30, 2019, no shares of Class A common stock have been purchased under the ESPP. As of September 30, 2019 and December 31, 2018, the total unrecognized stock-based compensation expense related to the ESPP was $1.5 million and zero, respectively. The weighted-average assumptions used to determine the fair value of the ESPP during the periods presented were as follows: Nine months ended September 30, 2019 2018 Expected term (in years) 0.7 N/A Risk-free interest rate 1.8 % N/A Expected volatility 35.6 % N/A Dividend yield — N/A Stock-based Compensation Expense The following table sets forth the total stock-based compensation expense included in the Company’s condensed consolidated statements of operations: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) Cost of revenue $ 397 $ 37 $ 463 $ 87 Sales and marketing 4,880 290 5,434 678 Research and development 7,801 461 8,624 1,078 General and administrative 9,833 23,648 10,491 24,442 Total stock-based compensation expense $ 22,911 $ 24,436 $ 25,012 $ 26,285 |
Net Loss per Share Attributable
Net Loss per Share Attributable to Common Stockholders | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Class A Class B Common Class A Class B Common (in thousands, except per share data) Net loss attributable to common stockholders $ (4,573) $ (36,280) $ (37,989) $ (3,588) $ (74,085) $ (70,477) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 13,215 104,841 81,579 4,453 91,940 79,755 Net loss per share attributable to common stockholders, basic and diluted $ (0.35) $ (0.35) $ (0.47) $ (0.81) $ (0.81) $ (0.88) Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been antidilutive. The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows: September 30, 2019 2018 (in thousands) Redeemable convertible preferred stock — 165,658 Redeemable convertible preferred stock warrants — 177 Shares subject to repurchase 6,564 7,057 Unexercised stock options 21,878 25,337 Unvested restricted stock and RSUs 5,868 — Shares issuable pursuant to the ESPP 412 — Total 34,722 198,229 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The computation of the provision for income taxes for interim periods is determined by applying the estimated annual effective tax rate to year-to-date earnings from recurring operations and adjusting for discrete tax items recorded in the period. The Company's ability to estimate the geographic mix of earnings is impacted by the relatively high-growth nature of the business, fluctuations of business operations by country, and implementation of tax planning strategies. The Company recorded an income tax benefit of $0.2 million and an income tax provision of $0.4 million for the three months ended September 30, 2019 and 2018, respectively, and an income tax provision of $0.5 million and $0.9 million for the nine months ended September 30, 2019 and 2018, respectively. The differences in the effective tax rate for the periods presented and the U.S. federal statutory rate was primarily due to foreign taxes in profitable jurisdictions and the recording of a full valuation allowance on the Company's U.S. deferred tax assets. In determining the need for a valuation allowance, the Company weighs both positive and negative evidence in the various jurisdictions in which it operates to determine whether it is more likely than not that its deferred tax assets are recoverable. In assessing the ultimate realizability of its net deferred tax assets, the Company considers all available evidence, including cumulative losses since inception and expected future losses and as such, management does not believe it is more likely than not that the deferred tax assets will be realized. Accordingly, a full valuation allowance has been established in the U.S. and no deferred tax assets and related tax benefit have been recognized in the condensed consolidated financial statements. There is however, no valuation allowance on the foreign jurisdictions, as the foreign entities have cumulative income, and expected future income. |
Guarantees and Indemnifications
Guarantees and Indemnifications | 9 Months Ended |
Sep. 30, 2019 | |
Guarantees and Product Warranties [Abstract] | |
Guarantees and Indemnifications | Guarantees and Indemnifications If the Company's services do not meet certain service level commitments, its contracted customers and certain of its pay-as-you-go customers are entitled to receive service credits, and in certain cases, refunds, each representing a form of variable consideration. To date, the Company has not incurred any material costs as a result of such commitments. The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third-party’s intellectual property rights. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the condensed consolidated financial statements. The Company has also agreed to indemnify its directors, executive officers, and certain other employees for costs associated with any fees, expenses, judgments, fines, and settlement amounts incurred by them in any action or proceeding to which any of them are, or are threatened to be, made a party by reason of their service as a director or officer. The Company maintains director and officer insurance coverage that would generally enable it to recover a portion of any future amounts paid. The Company also may be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsIn September 2018, certain third-party investment funds purchased 8,909,092 shares of common stock from certain of the Company’s founders for a total purchase price of $98.0 million. Since the purchasing investment funds are entities affiliated with holders of economic interests in the Company and the funds acquired shares from the founders at a price in excess of the fair value of such shares, the amount paid in excess of the fair value of the shares at the time of the purchase was recorded as stock-based compensation expense. The Company recorded $23.3 million of stock-based compensation expense to general and administrative expense in the condensed consolidated statement of operations during the three and nine months ended September 30, 2018 related to the purchases. There were no such transactions in the three and nine months ended September 30, 2019. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information The Company’s chief operating decision maker (CODM) is its CEO, COO, and CFO. Collectively, the CODM reviews financial information presented on a condensed consolidated basis for purposes of allocating resources and evaluating financial performance. The Company has no segment managers who are held accountable by the CODM for operations, operating results, and planning for levels or components below the condensed consolidated unit level. Accordingly, the Company has determined it has a single operating segment. Refer to Note 3 to these condensed consolidated financial statements for revenue by geography. The Company’s property and equipment, net, by geographic area were as follows: September 30, 2019 December 31, 2018 (in thousands) United States $ 56,597 $ 46,012 Rest of the world 35,888 27,198 Total property and equipment, net $ 92,485 $ 73,210 No single country other than the United States accounted for more than 10% of total property and equipment, net as of September 30, 2019 and December 31, 2018. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying interim condensed consolidated financial statements and accompanying notes have been prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP) and applicable regulations of the Security and Exchange Commission (SEC) regarding interim financial reporting, and include the accounts of the Company and its wholly-owned subsidiaries. |
Principles of Consolidation | All intercompany balances and transactions have been eliminated in consolidation. |
Fiscal Period | The Company’s fiscal year ends on December 31. |
Deferred Offering Costs | Deferred offering costs are capitalized and consist of fees and expenses incurred in connection with the sale of the Company's Class A common stock in the IPO, including the legal, accounting, printing and other IPO-related costs. |
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 amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes to the condensed consolidated financial statements. Such estimates include, but are not limited to, deferred contract acquisitions costs, the period of benefit generated from the Company’s deferred contract acquisition costs, the capitalization and estimated useful life of internal-use software, useful lives of property and equipment, the valuation and recognition of stock-based compensation expense, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Management bases these estimates and assumptions on historical experience and on various other assumptions that are believed to be reasonable. Actual results could differ materially from these estimates. |
Stock-based Compensation | The Company measures and recognizes stock-based compensation expense based on the grant date fair value of the awards. The grant date fair value of stock options is estimated using the Black-Scholes option pricing model. The grant date fair value of restricted stock units (RSUs) is estimated based on the fair value of the Company's underlying common stock. The grant date fair value and the stock-based compensation expense related to purchase rights issued under the 2019 Employee Stock Purchase Plan (ESPP) is estimated using the Black-Scholes option pricing model and is based on the estimated number of awards as of the beginning of the offering period, respectively. The Black-Scholes option pricing model requires the use of highly subjective assumptions, including the award’s expected term, the fair value of the underlying common stock, the expected volatility of the price of the common stock, risk-free interest rates, and the expected dividend yield of the common stock. The assumptions used to determine the fair value of the stock-based awards are management’s best estimates and involve inherent uncertainties and the application of judgment. Stock-based compensation expense for awards with service-based vesting only is recognized on a straight-line basis over the requisite service period of the awards, which is generally four years. The Company accounts for forfeitures as they occur. Prior to the IPO, the fair value of the Company's common stock for financial reporting purposes was determined considering numerous objective and subjective factors and required judgment to determine the fair value of common stock as of each grant date. Subsequent to the IPO, the Company determines the fair value using the market closing price of its Class A common stock on the date of grant. four four |
Net Loss per Share Attributable to Common Stockholders | Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for multiple classes of common stock and participating securities. The Company considers its previously outstanding redeemable convertible preferred stock to be participating securities. The Company also considers any shares issued on the early exercise of stock options subject to repurchase to be participating securities because holders of such shares have nonforfeitable dividend rights in the event a dividend is paid on common stock. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. The holders of the redeemable convertible preferred stock, as well as the holders of early exercised shares subject to repurchase, do not have a contractual obligation to share in the losses of the Company. As such, the Company’s net losses for the three and nine months ended September 30, 2019 and 2018 were not allocated to these participating securities. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, other than voting rights. Accordingly, the Class A common stock and Class B common stock shared proportionately in the Company’s net losses. Prior to the nine months ending September 30, 2019, there were no shares of Class A common stock issued and outstanding. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, less shares subject to repurchase. Vested RSUs that have not been settled have been included in the appropriate common share class used to calculate basic net loss per share. Diluted net loss per share attributable to common stockholders adjusts basic net loss per share for the effect of dilutive securities, including awards under the Company's equity incentive plans. As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In July 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. This ASU reduces the complexity associated with an issuer’s accounting for certain financial instruments with characteristics of liabilities and equity. Specifically, the FASB determined that a down round feature would no longer cause a freestanding equity-linked financial instrument (or an embedded conversion option) to be accounted for as a derivative liability at fair value with changes in fair value recognized in current earnings. For public business entities, it is effective for fiscal years beginning after December 15, 2018, and interim periods therein. For all other entities, it is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company adopted this guidance effective September 30, 2019 using the prospective approach. The adoption of ASU 2017-11 did not have a material impact on the condensed consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which provides financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. For all entities, it is effective for fiscal years beginning after December 15, 2018, and interim periods therein. Early adoption is permitted. The amendments in this ASU should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company adopted this ASU effective January 1, 2019, noting no material impact on the Company’s condensed consolidated financial statements. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), and since that date, has issued several ASUs to further clarify certain aspects of ASU 2016-02 and provide entities with practical expedients that may be elected upon adoption. ASU 2016-02 introduces the recognition of right-of-use assets and lease liabilities by lessees for all leases on the condensed consolidated balance sheets. For the consolidated statements of operations, the ASU retains the distinction between finance leases and operating leases, with the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the previous lease guidance. During the transition period for this ASU, lessees and lessors are required to recognize and measure leases at either the beginning of the earliest period presented using a modified retrospective approach, or at the adoption date recognizing the cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The effective date and transition requirements of ASU 2016-02, for public business entities, is interim and annual periods beginning on or after December 15, 2018, with early adoption permitted. For all other entities, ASU 2016-02 is effective for annual periods beginning on or after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020. Early adoption is permitted. The Company intends to adopt the ASU beginning January 1, 2020, and has elected to apply the alternate transition method by recording a cumulative-effect adjustment to the opening balance of retained earnings (accumulated deficit) in the period of adoption. The Company is currently evaluating the effect that this ASU will have on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (ASC 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement . This guidance provides that implementation costs be evaluated for capitalization using the same criteria as that used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement. For public business entities, it is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, it is effective for fiscal years beginning after December 15, 2020, and interim periods beginning after December 15, 2021. Early adoption of the amendments in this update is permitted, including adoption in any interim period, for all entities. The Company is currently evaluating the potential impact of this ASU on its consolidated financial statements. |
Revenue | The Company elected to early adopt Accounting Standards Codification (ASC) Topic 606, Revenue From Contracts With Customers (ASC 606), effective as of January 1, 2017, retrospectively. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these services. To achieve this standard, the Company applies the following five steps: 1. Identify the contract with a customer The Company considers the terms and conditions of the contracts and its customary business practices in identifying its contracts under ASC 606. The Company determines it has a contract with a customer when the contract is approved, the Company can identify each party’s rights regarding the services to be transferred, the Company can identify the payment terms, the Company has determined that collectibility is probable, and the contract has commercial substance. The Company applies judgment in determining that collectibility is probable, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information relevant to the customer. 2. Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available to the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. The Company’s performance obligation primarily consists of subscription and support services, as they are provided over the same service period. 3. Determine the transaction price The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Usage-based variable consideration is recognized in the period it is incurred. None of the Company’s contracts contain a significant financing component. 4. Allocate the transaction price to performance obligations in the contract The subscription and support services in the Company’s contracts are considered a single performance obligation, and thus the entire transaction price is allocated to the single performance obligation. 5. Recognize revenue when or as the Company satisfies a performance obligation Revenue is recognized at the time the related performance obligation is satisfied by transferring the service to a customer. Revenue is recognized when control of the services is transferred to the Company’s customers, in an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for those services. The Company generates sales directly through its sales team and through its channel partners. Revenue from sales to channel partners are recorded once all revenue recognition criteria above are met. Channel partners generally receive an order from an end-customer prior to placing an order with the Company. Payment from channel partners is not contingent on the partner’s collection from end-customers. The Company has determined that it is acting as an agent in these arrangements and records this revenue on a net basis. Subscription and Support Revenue The Company generates revenue primarily from sales to its customers of subscriptions to access its platform, together with related support services. Arrangements with customers generally do not provide the customer with the right to take possession of the Company’s software operating its global cloud platform at any time. Instead, customers are granted continuous access to the Company’s global cloud platform over the contractual period. Access to the Company’s platform and products is considered a monthly series comprising one performance obligation. A time-elapsed output method is used to measure progress because the Company transfers control evenly over the contractual period. Accordingly, the fixed consideration related to subscription and support revenue is generally recognized on a straight-line basis over the contract term beginning on the date that the Company’s service is made available to the customer. Usage-based consideration is primarily related to fees charged for the Company’s customer’s use of excess bandwidth when accessing the Company’s platform in a given period and is recognized as revenue in the period in which the usage occurs. The typical subscription and support term for the Company’s contracted customers, which consist of customers that enter into contracts for the Company's Enterprise subscription plan (and which the Company previously referred to as enterprise customers), is one year and subscription and support term lengths range from one Variable Consideration If the Company’s services do not meet certain service level commitments, its customers are entitled to receive service credits, and in certain cases, refunds, each representing a form of variable consideration. Revenue from sales is recorded at the net sales price, which is the transaction price, and includes estimates of these forms of variable consideration to the extent that a significant reversal of cumulative revenue will not occur in a future period. The Company has historically not experienced any incidents that had a material impact on its consolidated financial statements. Accordingly, any estimated refunds related to these agreements in the condensed consolidated financial statements are not material during the periods presented. Usage-based consideration is primarily related to fees charged for the Company’s customer’s use of excess bandwidth when accessing the Company’s platform in a given period and is recognized as revenue in the period in which the usage occurs. |
Revenue | Contract Balances Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period. For the nine months ended September 30, 2019 and 2018, the Company recognized revenue of $16.3 million and $11.3 million, respectively, that was included in the corresponding contract liability balance at the beginning of the periods presented. The Company receives payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. Standard payment terms are due upon receipt. Contract assets include amounts related to the Company’s contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced. Costs to Obtain and Fulfill a Contract The Company capitalizes sales commission and associated payroll taxes paid to internal sales personnel that are incremental to the acquisition of channel partner and direct customer contracts. These costs are recorded as deferred contract acquisition costs on the condensed consolidated balance sheets. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are in fact incremental and would not have occurred absent the customer contract. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table summarizes the revenue by region based on the billing address of customers who have contracted to use the Company’s global cloud platform: Three Months Ended September 30 Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) Amount Percentage Amount Percentage Amount Percentage Amount Percentage United States $ 37,605 51 % $ 23,914 48 % $ 101,571 50 % $ 64,874 47 % Europe, Middle East, and Africa 17,652 24 % 12,648 25 % 48,275 24 % 35,375 26 % Asia Pacific 13,993 19 % 10,223 20 % 39,782 20 % 27,989 20 % Other 4,691 6 % 3,285 7 % 13,464 6 % 8,937 7 % Total $ 73,941 100 % $ 50,070 100 % $ 203,092 100 % $ 137,175 100 % The following table summarizes the revenue from contracts by type of customer: Three Months Ended September 30 Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) Amount Percentage Amount Percentage Amount Percentage Amount Percentage Channel partners $ 6,554 9 % $ 3,367 7 % $ 18,413 9 % $ 9,085 7 % Direct customers 67,387 91 % 46,703 93 % 184,679 91 % 128,090 93 % Total $ 73,941 100 % $ 50,070 100 % $ 203,092 100 % $ 137,175 100 % |
Summary of Deferred Contract Acquisition Costs | The following table summarizes the activity of the deferred contract acquisition costs: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) Beginning balance $ 19,482 $ 13,033 $ 15,940 $ 10,765 Capitalization of contract acquisition costs 4,477 3,233 12,923 8,639 Amortization of deferred contract acquisition costs (2,818) (1,852) (7,722) (4,990) Ending balance $ 21,141 $ 14,414 $ 21,141 $ 14,414 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value by Significant Investment Category | The following table summarizes the Company’s cash and available-for-sale securities’ amortized cost, unrealized gains (losses), and fair value by significant investment category reported as cash and cash equivalents, restricted cash, marketable securities, or long-term investments as of September 30, 2019 and December 31, 2018. (in thousands) Reported as: September 30, 2019 Amortized Unrealized Unrealized Fair Value Cash & Marketable Long-term Long- Cash $ 2,202 $ — $ — $ 2,202 $ 2,202 $ — $ — $ — Level I: Money market funds 506,164 — — 506,164 499,504 — — 6,660 Level II: Corporate bonds 15,030 23 — 15,053 — 8,988 6,066 — U.S. treasury securities 115,550 80 — 115,630 — 105,526 10,103 — U.S. government agency securities 1,100 — — 1,100 — 1,100 — — Commercial paper 27,785 — — 27,785 — 27,785 — — Subtotal 159,465 103 — 159,568 — 143,399 16,169 — Total assets measured at fair value on a recurring basis $ 667,831 $ 103 $ — $ 667,934 $ 501,706 $ 143,399 $ 16,169 $ 6,660 (in thousands) Reported as: December 31, 2018 Amortized Unrealized Unrealized Fair Cash & Marketable Long-term Long-term Cash $ 4,151 $ — $ — $ 4,151 $ 4,151 $ — $ — $ — Level I: Money market funds 23,278 — — 23,278 16,907 — — 6,371 Level II: Corporate bonds 17,291 1 (16) 17,276 — 17,276 — — U.S. treasury securities 102,360 8 (20) 102,348 — 102,348 — — U.S. government agency securities 1,099 — — 1,099 — 1,099 — — Commercial paper 18,876 — — 18,876 3,997 14,879 — — Subtotal 139,626 9 (36) 139,599 3,997 135,602 — — Total assets measured at fair value on a recurring basis $ 167,055 $ 9 $ (36) $ 167,028 $ 25,055 $ 135,602 $ — $ 6,371 |
Schedule of Redeemable Convertible Preferred Stock Warrant Liability Measured and Recorded at Fair Value | The following tables summarize the Company’s redeemable convertible preferred stock warrant liability measured and recorded at fair value as of September 30, 2019 and December 31, 2018: September 30, 2019 Fair Value Reported as (in thousands) Fair value using Level III inputs Redeemable convertible preferred stock warrant liability $ 3,135 $ 3,135 Reclassification to stockholders' equity (deficit) (3,135) (3,135) Balance as of September 30, 2019 $ — $ — December 31, 2018 Fair Value Reported as (in thousands) Fair value using Level III inputs Redeemable convertible preferred stock warrant liability $ 1,618 $ 1,618 Balance as of December 31, 2018 $ 1,618 $ 1,618 Redeemable (in thousands) Balance as of December 31, 2018 $ 1,618 Addition — Change in fair value 1,517 Conversion of redeemable convertible preferred stock warrants into Class B common stock warrants (3,135) Balance as of September 30, 2019 $ — |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Prepaid expenses $ 12,305 $ 5,581 Deposits 2,403 2,635 Other 2,190 1,157 Total prepaid expenses and other current assets $ 16,898 $ 9,373 |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Property and equipment: Servers—network infrastructure $ 75,362 $ 57,089 Buildings 13,035 13,035 Construction in progress 7,690 14,848 Capitalized internal-use software 27,966 16,344 Office and computer equipment 12,033 6,552 Office furniture 5,668 3,573 Software 990 847 Leasehold improvements 8,395 772 Asset retirement obligation 231 49 Gross property and equipment 151,370 113,109 Less accumulated depreciation and amortization (58,885) (39,899) Total property and equipment, net $ 92,485 $ 73,210 |
Schedule of Acquired Intangible Assets, Net | Acquired intangible assets, net consisted of the following: September 30, 2019 Gross Carrying Accumulated Net Book (in thousands) Developed technology $ 250 $ 188 $ 62 Total acquired intangible assets, net $ 250 $ 188 $ 62 December 31, 2018 Gross Carrying Accumulated Net Book (in thousands) Developed technology $ 250 $ 94 $ 156 Total acquired intangible assets, net $ 250 $ 94 $ 156 |
Schedule of Estimated Future Amortization Expense of Acquired Intangible Assets | As of September 30, 2019, the estimated future amortization expense of acquired intangible assets was as follows: Estimated (in thousands) Year ending December 31, 2019 (remaining three months) $ 31 2020 31 Total $ 62 |
Schedule of Accrued Expenses | Accrued expenses and other current liabilities consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Accrued compensation and benefits $ 12,170 $ 7,075 Accrued expenses 4,428 4,072 Customer refunds and credits 2,772 2,336 Accrued co-location and bandwidth 1,658 1,119 Income taxes payable — 225 Other 2,093 872 Total accrued expenses and other current liabilities $ 23,121 $ 15,699 |
Schedule of Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Accrued compensation and benefits $ 12,170 $ 7,075 Accrued expenses 4,428 4,072 Customer refunds and credits 2,772 2,336 Accrued co-location and bandwidth 1,658 1,119 Income taxes payable — 225 Other 2,093 872 Total accrued expenses and other current liabilities $ 23,121 $ 15,699 |
Schedule of Other Noncurrent Liabilities | Other noncurrent liabilities consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Indirect tax reserves $ 6,476 $ 4,137 Deferred rent 2,367 1,659 Other 2,150 908 Total other noncurrent liabilities $ 10,993 $ 6,704 |
Note Payable (Tables)
Note Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Aggregate Annual Future Payments Due on IPA Agreements | Aggregate annual future payments due on the Company’s outstanding IPA Agreements balance as of September 30, 2019 were as follows: Amount (in thousands) 2019 (remaining three months) $ 37 Total payments 37 Less amount representing interest — Total note payable 37 Less current portion (37) Note payable, net of current portion $ — |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Purchase Commitments | Refer to the table below for purchase commitments under non-cancelable contracts with various vendors as of September 30, 2019. Payments Due by Period as of September 30, 2019 Total 2019 (remaining three months) 2020 2021 2022 2023 Thereafter (in thousands) Non-cancelable: Open purchase agreements (1) $ 12,669 $ 315 $ 1,887 $ 1,938 $ 1,489 $ 1,373 $ 5,667 Bandwidth and co-location commitments (2) 36,072 6,189 17,802 8,035 2,441 1,237 368 Operating lease obligations (3) 54,508 2,928 12,359 11,136 8,620 5,334 14,131 Other commitments (4) 37 37 — — — — — Total $ 103,286 $ 9,469 $ 32,048 $ 21,109 $ 12,550 $ 7,944 $ 20,166 (1) Open purchase commitments are for the purchase of services under non-cancelable contracts. They were not recorded as liabilities on the condensed consolidated balance sheet as of September 30, 2019 as the Company had not yet received the related services. (2) Long-term commitments for bandwidth usage and co-location with various networks and Internet service providers. The costs for services not yet received were not recorded as liabilities on the condensed consolidated balance sheet as of September 30, 2019. (3) Office space and equipment under non-cancelable operating leases. Total payments listed represent total minimum future lease payments. (4) Consists of note payable under the IPA agreements and amount includes accrued interest at the contractual rate. |
Schedule of Future Minimum Payments Required Under Build-to-Suit Leases | As of September 30, 2019, the Company’s future minimum lease payments required under this non-cancelable obligation were as follows: Build-to-Suit Lease (in thousands) Year ending December 31, 2019 (remaining three months) $ 659 2020 2,673 2021 2,753 2022 2,355 2023 — Total minimum lease payments $ 8,440 |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Fair Value Assumptions | The fair value of the redeemable convertible preferred stock warrants was determined using the following assumptions: September 17, 2019 December 31, 2018 Remaining contractual life (in years) 1.6 2.3 Expected volatility 38.8 % 39.2 % Risk-free interest rate 1.8 % 2.5 % Expected dividend rate — — In the three and nine months ended September 30, 2019, the warrants were exercised and such shares were settled via the net settlement method, resulting in the issuance of 174,347 shares of the Company's Class B common stock. |
Common Stock (Tables)
Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Common Stock Reserved for Future Issuance | Shares of common stock reserved for future issuance, on an as-if converted basis, are as follows: September 30, 2019 December 31, 2018 (in thousands) Conversion of redeemable convertible preferred stock — 165,658 Stock options issued and outstanding 21,878 25,087 Remaining shares available for issuance under the 2010 Plan — 13,356 Remaining shares available for issuance under the 2019 Plan 29,387 — Redeemable convertible preferred stock warrants outstanding — 177 Outstanding and unsettled RSUs 6,185 — Shares available for issuance under the ESPP 5,870 — Total shares of common stock reserved 63,320 204,278 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Awards | The following table summarizes the stock options activity under the 2010 Plan: Stock Options Outstanding (in thousands, except year and per share data) Shares Subject Weighted- Weighted- Aggregate Balances as of December 31, 2018 25,087 $ 2.18 8.4 $ 159,945 Options granted 394 $ 9.60 Options exercised (2,589) $ 2.24 $ 21,188 Repurchase of unvested shares — Options canceled/forfeited/expired (1,014) $ 2.46 Balances as of September 30, 2019 21,878 $ 2.30 7.8 $ 355,967 Vested and expected to vest as of September 30, 2019 21,878 $ 2.30 7.8 $ 355,967 Exercisable as of September 30, 2019 21,865 $ 2.30 7.8 $ 355,755 |
Schedule of Assumptions Used to Determine the Fair Value of Stock Options Granted | The weighted-average assumptions used to determine the fair value of stock options granted during the periods presented were as follows: Nine months ended September 30, 2019 2018 Expected term (in years) 6.2 6.5 Expected volatility 40.3 % 43.5 % Risk-free interest rate 2.3 % 2.9 % Dividend yield — — |
Schedule of Restricted Stock Units Activity | RSU activity for the nine months ended September 30, 2019 was as follows: RSUs Weighted-Average (in thousands, except per share data) Unvested and outstanding as of December 31, 2018 — Granted 6,465 $ 9.74 Vested (317) $ 8.62 Forfeited (280) $ 8.70 Unvested as of September 30, 2019 5,868 $ 9.85 Vested and not yet released 317 $ 8.62 Outstanding as of September 30, 2019 6,185 $ 9.79 |
Schedule of Fair Value Assumptions for Employee Stock Purchase Plan | The weighted-average assumptions used to determine the fair value of the ESPP during the periods presented were as follows: Nine months ended September 30, 2019 2018 Expected term (in years) 0.7 N/A Risk-free interest rate 1.8 % N/A Expected volatility 35.6 % N/A Dividend yield — N/A |
Schedule of Stock-based Compensation Expense | The following table sets forth the total stock-based compensation expense included in the Company’s condensed consolidated statements of operations: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) Cost of revenue $ 397 $ 37 $ 463 $ 87 Sales and marketing 4,880 290 5,434 678 Research and development 7,801 461 8,624 1,078 General and administrative 9,833 23,648 10,491 24,442 Total stock-based compensation expense $ 22,911 $ 24,436 $ 25,012 $ 26,285 |
Net Loss per Share Attributab_2
Net Loss per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss per Share Attributable to Common Stockholders | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Class A Class B Common Class A Class B Common (in thousands, except per share data) Net loss attributable to common stockholders $ (4,573) $ (36,280) $ (37,989) $ (3,588) $ (74,085) $ (70,477) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 13,215 104,841 81,579 4,453 91,940 79,755 Net loss per share attributable to common stockholders, basic and diluted $ (0.35) $ (0.35) $ (0.47) $ (0.81) $ (0.81) $ (0.88) |
Schedule of Potential Shares of Common Stock Excluded from Computation of Basic and Diluted Net Loss per Share Attributable to Common Stockholders | The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows: September 30, 2019 2018 (in thousands) Redeemable convertible preferred stock — 165,658 Redeemable convertible preferred stock warrants — 177 Shares subject to repurchase 6,564 7,057 Unexercised stock options 21,878 25,337 Unvested restricted stock and RSUs 5,868 — Shares issuable pursuant to the ESPP 412 — Total 34,722 198,229 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Property and Equipment, Net by Geographic Area | The Company’s property and equipment, net, by geographic area were as follows: September 30, 2019 December 31, 2018 (in thousands) United States $ 56,597 $ 46,012 Rest of the world 35,888 27,198 Total property and equipment, net $ 92,485 $ 73,210 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Class of Stock [Line Items] | ||||||
Offering costs | $ 3,734,000 | $ 0 | ||||
Deferred offering costs | $ 5,500,000 | $ 5,500,000 | 5,500,000 | $ 0 | ||
Offering costs reclassified as a reduction of proceeds received from IPO | 5,500,000 | |||||
Stock-based compensation expense | $ 21,000,000 | $ 22,911,000 | $ 24,436,000 | $ 25,012,000 | 26,285,000 | |
Redeemable convertible preferred stock, shares issued (in shares) | 0 | 0 | 0 | 165,658,000 | ||
Redeemable convertible preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | 165,658,000 | ||
Options | ||||||
Class of Stock [Line Items] | ||||||
Vesting period | 4 years | |||||
Restricted Stock Units (RSUs) | ||||||
Class of Stock [Line Items] | ||||||
Vesting period | 4 years | |||||
Stock-based compensation expense | $ 15,400,000 | 0 | $ 15,400,000 | 0 | ||
Class A common stock | ||||||
Class of Stock [Line Items] | ||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | 31,381,152 | |||||
Class B common stock | ||||||
Class of Stock [Line Items] | ||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | 134,276,690 | |||||
Stock-based compensation expense | $ 23,300,000 | $ 23,300,000 | ||||
Series D, Redeemable Convertible Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | (31,381,152) | |||||
Series A, Series B, And Series C, Redeemable Convertible Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | (134,276,690) | |||||
Initial Public Offering | ||||||
Class of Stock [Line Items] | ||||||
Stock-based compensation expense | $ 21,000,000 | |||||
Initial Public Offering | Class A common stock | ||||||
Class of Stock [Line Items] | ||||||
Shares issued in initial public offering (in shares) | 40,250,000 | |||||
Aggregate proceeds received from initial public offering, net of underwriters' discounts and commissions | $ 570,500,000 | |||||
Offering costs | $ 5,500,000 | |||||
Underwriters' Option | Class A common stock | ||||||
Class of Stock [Line Items] | ||||||
Shares issued in initial public offering (in shares) | 5,250,000 | |||||
Price per share in initial public offering (in dollars per share) | $ 15 | $ 15 | $ 15 | |||
Aggregate proceeds received from initial public offering, net of underwriters' discounts and commissions | $ 74,400,000 | |||||
Former Employees | Class A common stock | ||||||
Class of Stock [Line Items] | ||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | 15,198,587 | |||||
Former Employees | Class B common stock | ||||||
Class of Stock [Line Items] | ||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | (15,198,587) |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Subscription and support term length | 1 year | |
Revenue recognized | $ 16.3 | $ 11.3 |
Amortization period | 3 years | |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Subscription and support term length | 1 year | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Subscription and support term length | 3 years |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 73,941 | $ 50,070 | $ 203,092 | $ 137,175 |
Sales Channel Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Geographic Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Channel partners | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 6,554 | $ 3,367 | $ 18,413 | $ 9,085 |
Channel partners | Sales Channel Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 9.00% | 7.00% | 9.00% | 7.00% |
Direct customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 67,387 | $ 46,703 | $ 184,679 | $ 128,090 |
Direct customers | Sales Channel Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 91.00% | 93.00% | 91.00% | 93.00% |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 37,605 | $ 23,914 | $ 101,571 | $ 64,874 |
United States | Geographic Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 51.00% | 48.00% | 50.00% | 47.00% |
Europe, Middle East, and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 17,652 | $ 12,648 | $ 48,275 | $ 35,375 |
Europe, Middle East, and Africa | Geographic Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 24.00% | 25.00% | 24.00% | 26.00% |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 13,993 | $ 10,223 | $ 39,782 | $ 27,989 |
Asia Pacific | Geographic Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 19.00% | 20.00% | 20.00% | 20.00% |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 4,691 | $ 3,285 | $ 13,464 | $ 8,937 |
Other | Geographic Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 6.00% | 7.00% | 6.00% | 7.00% |
Revenue - Deferred Contract Acq
Revenue - Deferred Contract Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Capitalized Contract Cost [Roll Forward] | ||||
Beginning balance | $ 19,482 | $ 13,033 | $ 15,940 | $ 10,765 |
Capitalization of contract acquisition costs | 4,477 | 3,233 | 12,923 | 8,639 |
Amortization of deferred contract acquisition costs | (2,818) | (1,852) | (7,722) | (4,990) |
Ending balance | $ 21,141 | $ 14,414 | $ 21,141 | $ 14,414 |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligations (Details) $ in Millions | Sep. 30, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation, amount | $ 188.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percent | 84.00% |
Remaining performance obligation, expected timing of satisfaction | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percent | 16.00% |
Remaining performance obligation, expected timing of satisfaction | 3 years |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Cash and Available-for-sale Debt Securities' Amortized Cost, Unrealized Gains (Losses) and Fair Value by Significant Investment Category (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | $ 501,706,000 | $ 25,055,000 |
Amortized Cost | 667,831,000 | 167,055,000 |
Unrealized Gain | 103,000 | 9,000 |
Unrealized (Loss) | 0 | (36,000) |
Fair Value | 667,934,000 | 167,028,000 |
Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 2,202,000 | 4,151,000 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 2,202,000 | 4,151,000 |
Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Level I | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 506,164,000 | 23,278,000 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 506,164,000 | 23,278,000 |
Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 159,465,000 | 139,626,000 |
Unrealized Gain | 103,000 | 9,000 |
Unrealized (Loss) | 0 | (36,000) |
Fair Value | 159,568,000 | 139,599,000 |
Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 15,030,000 | 17,291,000 |
Unrealized Gain | 23,000 | 1,000 |
Unrealized (Loss) | 0 | (16,000) |
Fair Value | 15,053,000 | 17,276,000 |
Level II | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 115,550,000 | 102,360,000 |
Unrealized Gain | 80,000 | 8,000 |
Unrealized (Loss) | 0 | (20,000) |
Fair Value | 115,630,000 | 102,348,000 |
Level II | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 1,100,000 | 1,099,000 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 1,100,000 | 1,099,000 |
Level II | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 27,785,000 | 18,876,000 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 27,785,000 | 18,876,000 |
Cash & Cash Equivalents | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 501,706,000 | 25,055,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 2,202,000 | 4,151,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Level I | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 499,504,000 | 16,907,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 3,997,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Cash & Cash Equivalents | Fair Value, Recurring | Level II | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Cash & Cash Equivalents | Fair Value, Recurring | Level II | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Cash & Cash Equivalents | Fair Value, Recurring | Level II | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 3,997,000 |
Marketable Securities | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 143,399,000 | 135,602,000 |
Marketable Securities | Fair Value, Recurring | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Marketable Securities | Fair Value, Recurring | Level I | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Marketable Securities | Fair Value, Recurring | Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 143,399,000 | 135,602,000 |
Marketable Securities | Fair Value, Recurring | Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 8,988,000 | 17,276,000 |
Marketable Securities | Fair Value, Recurring | Level II | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 105,526,000 | 102,348,000 |
Marketable Securities | Fair Value, Recurring | Level II | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 1,100,000 | 1,099,000 |
Marketable Securities | Fair Value, Recurring | Level II | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 27,785,000 | 14,879,000 |
Long-term Investments | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 16,169,000 | 0 |
Long-term Investments | Fair Value, Recurring | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Long-term Investments | Fair Value, Recurring | Level I | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Long-term Investments | Fair Value, Recurring | Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 16,169,000 | 0 |
Long-term Investments | Fair Value, Recurring | Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 6,066,000 | 0 |
Long-term Investments | Fair Value, Recurring | Level II | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 10,103,000 | 0 |
Long-term Investments | Fair Value, Recurring | Level II | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Long-term Investments | Fair Value, Recurring | Level II | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Long-term Restricted Cash | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 6,660,000 | 6,371,000 |
Long-term Restricted Cash | Fair Value, Recurring | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Long-term Restricted Cash | Fair Value, Recurring | Level I | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 6,660,000 | 6,371,000 |
Long-term Restricted Cash | Fair Value, Recurring | Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Long-term Restricted Cash | Fair Value, Recurring | Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Long-term Restricted Cash | Fair Value, Recurring | Level II | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Long-term Restricted Cash | Fair Value, Recurring | Level II | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Long-term Restricted Cash | Fair Value, Recurring | Level II | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized cost of available-for-sale investments with maturities less than one year | $ 143,400,000 | $ 135,600,000 |
Amortized cost of available-for-sale investments with maturities greater than one year | 16,200,000 | 0 |
Net unrealized gains (losses) on investments, net of tax | 70,000 | (60,000) |
Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Unrealized gain | 0 | 0 |
Unrealized loss | $ 0 | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Redeemable Convertible Preferred Stock Warrant Liability Measured and Recorded at Fair Value (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Redeemable Convertible Preferred Stock Warrant Liability | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance as of December 31, 2018 | $ 1,618 | |
Addition | 0 | |
Change in fair value | 1,517 | |
Conversion of redeemable convertible preferred stock warrants into Class B common stock warrants | (3,135) | |
Balance as of September 30, 2019 | 0 | |
Level III | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Redeemable convertible preferred stock warrant liability, before reclassification | 3,135 | |
Reclassification to stockholders' equity (deficit) | (3,135) | |
Redeemable convertible preferred stock warrant liability | 0 | $ 1,618 |
Long-Term Liability [Member] | Level III | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Redeemable convertible preferred stock warrant liability, before reclassification | 3,135 | |
Reclassification to stockholders' equity (deficit) | (3,135) | |
Redeemable convertible preferred stock warrant liability | $ 0 | $ 1,618 |
Balance Sheet Components - Acco
Balance Sheet Components - Accounts Receivable and Allowance (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Allowance for doubtful accounts | $ 600,000 | $ 600,000 | $ 200,000 | ||
Bad debt expense | $ 400,000 | $ 0 | 861,000 | $ 909,000 | |
Write-off of uncollectible accounts receivable | $ 400,000 | $ 900,000 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 12,305 | $ 5,581 |
Deposits | 2,403 | 2,635 |
Other | 2,190 | 1,157 |
Total prepaid expenses and other current assets | $ 16,898 | $ 9,373 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | $ 151,370 | $ 151,370 | $ 113,109 | ||
Less accumulated depreciation and amortization | (58,885) | (58,885) | (39,899) | ||
Total property and equipment, net | 92,485 | 92,485 | 73,210 | ||
Depreciation and amortization expense | 7,700 | $ 5,000 | 20,800 | $ 13,000 | |
Servers—network infrastructure | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 75,362 | 75,362 | 57,089 | ||
Buildings | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 13,035 | 13,035 | 13,035 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 7,690 | 7,690 | 14,848 | ||
Capitalized internal-use software | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 27,966 | 27,966 | 16,344 | ||
Depreciation and amortization expense | 1,800 | $ 1,000 | 4,600 | $ 2,100 | |
Office and computer equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 12,033 | 12,033 | 6,552 | ||
Office furniture | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 5,668 | 5,668 | 3,573 | ||
Software | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 990 | 990 | 847 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 8,395 | 8,395 | 772 | ||
Asset retirement obligation | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | $ 231 | $ 231 | $ 49 |
Balance Sheet Components - Acqu
Balance Sheet Components - Acquired Intangible Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 250 | $ 250 |
Accumulated Amortization | 188 | 94 |
Net Book Value | 62 | 156 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 250 | 250 |
Accumulated Amortization | 188 | 94 |
Net Book Value | $ 62 | $ 156 |
Balance Sheet Components - Amor
Balance Sheet Components - Amortization Expense and Estimated Future Amortization Expense of Acquired Intangible Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Amortization of acquired intangible assets | $ 30 | $ 200 | $ 90 | $ 400 | |
2019 (remaining three months) | 31 | 31 | |||
2020 | 31 | 31 | |||
Net Book Value | $ 62 | $ 62 | $ 156 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued compensation and benefits | $ 12,170 | $ 7,075 |
Accrued expenses | 4,428 | 4,072 |
Customer refunds and credits | 2,772 | 2,336 |
Accrued co-location and bandwidth | 1,658 | 1,119 |
Income taxes payable | 0 | 225 |
Other | 2,093 | 872 |
Total accrued expenses and other current liabilities | $ 23,121 | $ 15,699 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Indirect tax reserves | $ 6,476 | $ 4,137 |
Deferred rent | 2,367 | 1,659 |
Other | 2,150 | 908 |
Total other noncurrent liabilities | $ 10,993 | $ 6,704 |
Note Payable - Narrative (Detai
Note Payable - Narrative (Details) - Notes Payable - IPA Agreements | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Nov. 30, 2015USD ($)supplierinstallment_purchase_agreement |
Line of Credit Facility [Line Items] | |||
Number of IPA agreements | installment_purchase_agreement | 3 | ||
Face amount | $ 1,700,000 | ||
Number of suppliers | supplier | 1 | ||
Amount outstanding | $ 37,000 | $ 300,000 | |
Minimum | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 2.90% | ||
Maximum | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 5.00% |
Note Payable - Schedule of Aggr
Note Payable - Schedule of Aggregate Annual Future Payments Due on IPA Agreements (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | ||
Less current portion | $ (37) | $ (255) |
IPA Agreements | Notes Payable | ||
Line of Credit Facility [Line Items] | ||
2019 (remaining three months) | 37 | |
Total payments | 37 | |
Less amount representing interest | 0 | |
Total note payable | 37 | $ 300 |
Less current portion | (37) | |
Note payable, net of current portion | $ 0 |
Commitment and Contingencies -
Commitment and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Rent expense | $ 3,100 | $ 1,700 | $ 8,500 | $ 5,000 | |
Restricted cash related to irrevocable standby letters of credit | 6,700 | 6,700 | |||
Cost and expenses related to bandwidth and other co-location commitments | 9,700 | $ 6,800 | 26,800 | $ 19,500 | |
Build-to-suit lease financing obligation | $ 10,501 | $ 10,501 | $ 10,443 |
Commitment and Contingencies _2
Commitment and Contingencies - Schedule of Purchase Commitments (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Other Purchase Agreements | |
Total payments due, purchase agreements | $ 12,669 |
2019 (remaining three months) | 315 |
2020 | 1,887 |
2021 | 1,938 |
2022 | 1,489 |
2023 | 1,373 |
Thereafter | 5,667 |
Bandwidth and Co-Location Commitments | |
Total payments due, bandwidth and co-location commitments | 36,072 |
2019 (remaining three months) | 6,189 |
2020 | 17,802 |
2021 | 8,035 |
2022 | 2,441 |
2023 | 1,237 |
Thereafter | 368 |
Operating Lease Obligations | |
Total payments due, operating leases | 54,508 |
2019 (remaining three months) | 2,928 |
2020 | 12,359 |
2021 | 11,136 |
2022 | 8,620 |
2023 | 5,334 |
Thereafter | 14,131 |
Other Commitments | |
Total payments due, other commitments | 37 |
2019 (remaining three months) | 37 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total Purchase Commitments | |
Total payments due, purchase commitments | 103,286 |
2019 (remaining three months) | 9,469 |
2020 | 32,048 |
2021 | 21,109 |
2022 | 12,550 |
2023 | 7,944 |
Thereafter | $ 20,166 |
Commitment and Contingencies _3
Commitment and Contingencies - Build-to-Suit Lease Financing Obligation (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Build-to-Suit Lease | |
2019 (remaining three months) | $ 659 |
2020 | 2,673 |
2021 | 2,753 |
2022 | 2,355 |
2023 | 0 |
Total minimum lease payments | $ 8,440 |
Redeemable Convertible Prefer_3
Redeemable Convertible Preferred Stock - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2019 | Jan. 31, 2012 | Oct. 31, 2011 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Apr. 30, 2011 | |
Class of Stock [Line Items] | ||||||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering | $ 331,500 | $ 331,521 | $ 331,521 | |||||||||
Redeemable convertible preferred stock, shares issued (in shares) | 0 | 0 | 0 | 165,658,000 | ||||||||
Redeemable convertible preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | 165,658,000 | ||||||||
Preferred stock, shares authorized (in shares) | 225,000,000 | 225,000,000 | 225,000,000 | |||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Change in fair value of redeemable convertible preferred stock warrant liability | $ 1,200 | $ 1,000 | $ 1,517 | $ 1,187 | ||||||||
Warrant To Purchase Series B Redeemable Preferred Stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Number of shares subject to purchase from warrant (in shares) | 23,760 | 94,510 | 59,140 | |||||||||
Proceeds from drawdown | $ 400 | $ 1,600 | ||||||||||
Exercise price of warrants (in dollars per share) | $ 0.34 | |||||||||||
Class B common stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | 134,276,690 | |||||||||||
Number of shares issued from exercise of warrants (in shares) | 174,347 | 174,347 | ||||||||||
Redeemable convertible preferred stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | (165,658,000) | (165,658,000) | ||||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering | $ (331,500) | $ (331,521) | $ (331,521) | |||||||||
Redeemable convertible preferred stock, shares issued (in shares) | 0 | 0 | 0 | |||||||||
Redeemable convertible preferred stock, shares outstanding (in shares) | 0 | 0 | 165,658,000 | 0 | 165,658,000 | 165,658,000 | 165,658,000 | 152,022,000 | 152,022,000 | |||
Series A, Series B, And Series C, Redeemable Convertible Preferred Stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | (134,276,690) | |||||||||||
Series D, Redeemable Convertible Preferred Stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | (31,381,152) | |||||||||||
Class A common stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering (in shares) | 31,381,152 |
Redeemable Convertible Prefer_4
Redeemable Convertible Preferred Stock - Schedule of Fair Value Assumptions of Redeemable Convertible Preferred Stock Warrants (Details) | Sep. 17, 2019 | Dec. 31, 2018 |
Remaining contractual life (in years) | ||
Class of Stock [Line Items] | ||
Redeemable convertible preferred stock warrant, measurement input, term | 1 year 7 months 6 days | 2 years 3 months 18 days |
Expected volatility | ||
Class of Stock [Line Items] | ||
Redeemable convertible preferred stock warrant, measurement input | 0.388 | 0.392 |
Risk-free interest rate | ||
Class of Stock [Line Items] | ||
Redeemable convertible preferred stock warrant, measurement input | 0.018 | 0.025 |
Expected dividend rate | ||
Class of Stock [Line Items] | ||
Redeemable convertible preferred stock warrant, measurement input | 0 | 0 |
Common Stock - Narrative (Detai
Common Stock - Narrative (Details) | Sep. 30, 2019vote$ / sharesshares | Dec. 31, 2018$ / sharesshares |
Class A common stock | ||
Class of Stock [Line Items] | ||
Common stock, number of votes per share | vote | 1 | |
Common stock, shares authorized (in shares) | 2,250,000,000 | 550,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 86,838,606 | 0 |
Common stock, shares outstanding (in shares) | 86,838,606 | 0 |
Class B common stock | ||
Class of Stock [Line Items] | ||
Common stock, number of votes per share | vote | 10 | |
Common stock, shares authorized (in shares) | 315,000,000 | 300,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 213,308,441 | 91,542,243 |
Common stock, shares outstanding (in shares) | 213,308,441 | 91,542,243 |
Common Stock - Schedule of Comm
Common Stock - Schedule of Common Stock Reserved for Future Issuance (Details) - shares | Sep. 30, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 63,320,000 | 204,278,000 |
2010 Plan | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 0 | 13,356,000 |
2019 Plan | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 29,387,000 | 0 |
Options | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 21,878,000 | 25,087,000 |
Restricted Stock Units (RSUs) | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 6,185,000 | 0 |
ESPP | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 5,870,000 | 0 |
Redeemable convertible preferred stock warrants outstanding | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 0 | 177,000 |
Redeemable convertible preferred stock | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 0 | 165,658,000 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) | Sep. 13, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total grant date fair value for vested options | $ 3,500,000 | $ 2,700,000 | ||||||
Stock-based compensation expense | $ 21,000,000 | $ 22,911,000 | $ 24,436,000 | $ 25,012,000 | 26,285,000 | |||
Shares of common stock reserved (in shares) | 63,320,000 | 63,320,000 | 63,320,000 | 63,320,000 | 204,278,000 | |||
Common Stock | 2010 Equity Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized for issuance (in shares) | 75,008,088 | |||||||
Number of shares available for issuance (in shares) | 0 | 0 | 0 | 0 | 13,355,967 | |||
Class A common stock | 2019 Equity Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized for issuance (in shares) | 66,661,953 | 66,661,953 | 66,661,953 | 66,661,953 | ||||
Number of shares available for issuance (in shares) | 29,386,922 | 29,386,922 | 29,386,922 | 29,386,922 | ||||
Number of new shares authorized for issuance (in shares) | 29,335,000 | 29,335,000 | 29,335,000 | 29,335,000 | ||||
Number of additional shares authorized for issuance (in shares) | 37,326,953 | 37,326,953 | 37,326,953 | 37,326,953 | ||||
Number of shares granted (in shares) | 0 | |||||||
Class A and Class B Common Stock | 2019 Equity Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Potential increase in number of shares authorized, as a percentage of total common stock outstanding | 5.00% | |||||||
Class B common stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | 23,300,000 | $ 23,300,000 | ||||||
Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 4 years | |||||||
Weighted-average grant date fair value for options granted (in dollars per share) | $ 4.10 | $ 1.31 | ||||||
Unvested options exercisable (in shares) | 17,118,432 | 17,118,432 | 17,118,432 | 17,118,432 | 20,697,847 | |||
Options unrecognized stock-based compensation expense | $ 18,400,000 | $ 18,400,000 | $ 18,400,000 | $ 18,400,000 | $ 15,500,000 | |||
Weighted-average remaining vesting period | 2 years 9 months 18 days | 3 years 9 months 18 days | ||||||
Liability for early exercise of stock options | $ 14,600,000 | $ 14,600,000 | $ 14,600,000 | $ 14,600,000 | $ 14,300,000 | |||
Number of unvested shares expected to be repurchased (in shares) | 6,563,716 | 6,737,971 | ||||||
Shares of common stock reserved (in shares) | 21,878,000 | 21,878,000 | 21,878,000 | 21,878,000 | 25,087,000 | |||
Options | 2010 Equity Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 4 years | |||||||
Expiration period | 10 years | |||||||
Options | Common Stock | 2010 Equity Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercise price of common stock, percentage of fair market value | 100.00% | |||||||
Restricted Stock Units (RSUs) | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares granted (in shares) | 6,465,000 | |||||||
Vesting period | 4 years | |||||||
Weighted-average remaining vesting period | 2 years | 0 years | ||||||
Vesting percentage | 25.00% | |||||||
Total grant date fair value for vested shares | $ 2,700,000 | $ 0 | ||||||
Stock-based compensation expense | $ 15,400,000 | $ 0 | 15,400,000 | $ 0 | ||||
Unrecognized stock-based compensation expense | $ 45,100,000 | $ 45,100,000 | $ 45,100,000 | $ 45,100,000 | $ 0 | |||
Shares of common stock reserved (in shares) | 6,185,000 | 6,185,000 | 6,185,000 | 6,185,000 | 0 | |||
Restricted Stock Units (RSUs) | Tranche One | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 1 year | |||||||
Restricted Stock Units (RSUs) | Tranche Two | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 3 years | |||||||
ESPP | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares of common stock reserved (in shares) | 5,870,000 | 5,870,000 | 5,870,000 | 5,870,000 | 0 | |||
ESPP | 2019 Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unrecognized stock-based compensation expense | $ 1,500,000 | $ 1,500,000 | $ 1,500,000 | $ 1,500,000 | $ 0 | |||
Maximum ownership percentage threshold for participation | 5.00% | |||||||
Maximum contribution percentage per employee | 10.00% | |||||||
ESPP | Class A common stock | 2019 Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares of common stock reserved (in shares) | 5,870,000 | |||||||
Number of additional shares allowable under the plan (in shares) | 5,870,000 | |||||||
Purchase price of common stock, percentage of fair value | 85.00% | |||||||
Offering period | 6 months | |||||||
Purchase period | 6 months | |||||||
Maximum number of shares available for repurchase for each employee (in shares) | 1,500 | |||||||
Maximum value of shares available for repurchase for each employee | $ 25,000 | |||||||
Number of shares repurchased (in shares) | 0 | |||||||
ESPP | Class A and Class B Common Stock | 2019 Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Potential increase in number of share authorized, as a percentage of total common stock outstanding | 1.00% | |||||||
Initial Public Offering | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 21,000,000 |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Stock-based Awards (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Shares Subject to Options Outstanding | ||
Stock options outstanding, beginning balance (in shares) | 25,087 | |
Stock options granted (in shares) | 394 | |
Stock options exercised (in shares) | (2,589) | |
Repurchases of unvested shares (in shares) | 0 | |
Stock options cancelled, forfeited, expired (in shares) | (1,014) | |
Stock options outstanding, ending balance (in shares) | 21,878 | 25,087 |
Stock options vested and expected to vest (in shares) | 21,878 | |
Stock options exercisable (in shares) | 21,865 | |
Weighted- Average Exercise Price per Option | ||
Stock options outstanding, weighted-average exercise price, beginning balance (in dollars per share) | $ / shares | $ 2.18 | |
Stock options granted, weighted-average exercise price (in dollars per share) | $ / shares | 9.60 | |
Stock options exercised, weighted-average exercise price (in dollars per share) | $ / shares | 2.24 | |
Stock options cancelled, forfeited, expired, weighted-averaged exercise price (in dollars per share) | $ / shares | 2.46 | |
Stock options outstanding, weighted-average exercise price, ending balance (in dollars per share) | $ / shares | 2.30 | $ 2.18 |
Stock options vested and expected to vest, weighted-average exercise price (in dollars per share) | $ / shares | 2.30 | |
Stock options exercisable, weighted-average exercise price (in dollars per share) | $ / shares | $ 2.30 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Stock options outstanding, weighted-average remaining contractual term | 7 years 9 months 18 days | 8 years 4 months 24 days |
Stock options vested and expected to vest, weighted-average remaining contractual term | 7 years 9 months 18 days | |
Stock options exercisable, weighted-average remaining contractual term | 7 years 9 months 18 days | |
Share-Based Payment Award, Options, Aggregate Intrinsic Value [Abstract] | ||
Stock options outstanding, aggregate intrinsic value | $ | $ 355,967 | $ 159,945 |
Stock options exercised, aggregate intrinsic value | $ | 21,188 | |
Stock options vested and expected to vest, aggregate intrinsic value | $ | 355,967 | |
Stock options exercisable, aggregate intrinsic value | $ | $ 355,755 |
Stock-based Compensation - Sc_2
Stock-based Compensation - Schedule of Assumptions Used to Determine the Fair Value of Stock Options Granted (Details) - Options | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 2 months 12 days | 6 years 6 months |
Expected volatility | 40.30% | 43.50% |
Risk-free interest rate | 2.30% | 2.90% |
Dividend yield | 0.00% | 0.00% |
Stock-based Compensation - Sc_3
Stock-based Compensation - Schedule of Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) shares in Thousands | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
RSUs | |
Unvested and outstanding, beginning balance (in shares) | 0 |
Granted (in shares) | 6,465 |
Vested (in shares) | (317) |
Forfeited (in shares) | (280) |
Unvested, ending balance (in shares) | 5,868 |
Vested and not yet released (in shares) | 317 |
Outstanding at end of period (in shares) | 6,185 |
Weighted-Average Grant Date Fair Value | |
Granted (in dollars per share) | $ / shares | $ 9.74 |
Vested (in dollars per share) | $ / shares | 8.62 |
Forfeited (in dollars per share) | $ / shares | 8.70 |
Unvested, weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | 9.85 |
Vested and not yet released, weighted-average grant date fair value (in dollars per share) | $ / shares | 8.62 |
Outstanding at end of period, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 9.79 |
Stock-based Compensation - Sc_4
Stock-based Compensation - Schedule of Fair Value Assumptions for Employee Stock Purchase Plan (Details) - ESPP | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 8 months 12 days |
Risk-free interest rate | 1.80% |
Expected volatility | 35.60% |
Dividend yield | 0.00% |
Stock-based Compensation - Sc_5
Stock-based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Total stock-based compensation expense | $ 21,000 | $ 22,911 | $ 24,436 | $ 25,012 | $ 26,285 |
Cost of revenue | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Total stock-based compensation expense | 397 | 37 | 463 | 87 | |
Sales and marketing | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Total stock-based compensation expense | 4,880 | 290 | 5,434 | 678 | |
Research and development | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Total stock-based compensation expense | 7,801 | 461 | 8,624 | 1,078 | |
General and administrative | |||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||
Total stock-based compensation expense | $ 9,833 | $ 23,648 | $ 10,491 | $ 24,442 |
Net Loss per Share Attributab_3
Net Loss per Share Attributable to Common Stockholders - Schedule of Computation of Basic and Diluted Earnings per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net loss attributable to common stockholders | $ (40,853) | $ (37,989) | $ (77,673) | $ (70,477) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (in shares) | 118,056 | 81,579 | 96,393 | 79,755 |
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) | $ (0.35) | $ (0.47) | $ (0.81) | $ (0.88) |
Common Stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net loss attributable to common stockholders | $ (37,989) | $ (70,477) | ||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (in shares) | 81,579 | 79,755 | ||
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) | $ (0.47) | $ (0.88) | ||
Class A common stock | Common Stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net loss attributable to common stockholders | $ (4,573) | $ (3,588) | ||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (in shares) | 13,215 | 4,453 | ||
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) | $ (0.35) | $ (0.81) | ||
Class B common stock | Common Stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net loss attributable to common stockholders | $ (36,280) | $ (74,085) | ||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (in shares) | 104,841 | 91,940 | ||
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) | $ (0.35) | $ (0.81) |
Net Loss per Share Attributab_4
Net Loss per Share Attributable to Common Stockholders - Schedule of Potential Shares of Common Stock Excluded from Computation of Basic and Diluted Net Loss per Share Attributable to Common Stockholders (Details) - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 34,722 | 198,229 |
Redeemable convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 0 | 165,658 |
Redeemable convertible preferred stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 0 | 177 |
Shares subject to repurchase | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 6,564 | 7,057 |
Unexercised stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 21,878 | 25,337 |
Unvested restricted stock and RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 5,868 | 0 |
Shares issuable pursuant to the ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 412 | 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Provision for (benefit from) income taxes | $ (212) | $ 417 | $ 491 | $ 889 |
Related Party Transactions (Det
Related Party Transactions (Details) - Affiliated Entity - Purchase of Common Stock from Founders - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Related Party Transaction [Line Items] | |||||
Number of shares purchased (in shares) | 8,909,092 | ||||
Purchase price | $ 98,000,000 | ||||
Stock-based compensation expense recorded | $ 0 | $ 23,300,000 | $ 0 | $ 23,300,000 |
Segment and Geographic Inform_3
Segment and Geographic Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Property and Equipment, Net by Geographic Area (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 92,485 | $ 73,210 |
United States | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 56,597 | 46,012 |
Rest of the world | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 35,888 | $ 27,198 |