Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 21, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
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, $0.001 par value | |
Trading Symbol | NET | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Entity Central Index Key | 0001477333 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 281,268,891 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 44,968,094 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 151,976 | $ 313,777 |
Available-for-sale securities | 1,573,264 | 1,508,066 |
Accounts receivable, net | 125,350 | 95,543 |
Contract assets | 6,329 | 6,079 |
Restricted cash short-term | 2,487 | 2,958 |
Prepaid expenses and other current assets | 35,404 | 29,433 |
Total current assets | 1,894,810 | 1,955,856 |
Property and equipment, net | 202,432 | 183,736 |
Goodwill | 28,481 | 23,530 |
Acquired intangible assets, net | 3,846 | 1,254 |
Operating lease right-of-use assets | 138,871 | 130,314 |
Deferred contract acquisition costs, noncurrent | 76,266 | 70,320 |
Restricted cash | 5,969 | 4,223 |
Other noncurrent assets | 3,274 | 2,838 |
Total assets | 2,353,949 | 2,372,071 |
Current liabilities: | ||
Accounts payable | 32,925 | 26,086 |
Accrued expenses and other current liabilities | 40,888 | 38,085 |
Accrued compensation | 39,978 | 65,905 |
Operating lease liabilities | 27,305 | 25,175 |
Liability for early exercise of unvested stock options | 3,870 | 4,651 |
Deferred revenue | 131,650 | 116,546 |
Current portion of convertible senior notes, net | 0 | 12,117 |
Total current liabilities | 276,616 | 288,565 |
Convertible senior notes, net | 1,432,705 | 1,146,877 |
Operating lease liabilities, noncurrent | 114,619 | 109,037 |
Deferred revenue, noncurrent | 5,577 | 4,680 |
Other noncurrent liabilities | 8,955 | 7,114 |
Total liabilities | 1,838,472 | 1,556,273 |
Commitments and contingencies (Note 8) | ||
Temporary equity, convertible senior notes | 0 | 4,439 |
Stockholders’ Equity: | ||
Additional paid-in capital | 1,215,790 | 1,494,512 |
Accumulated deficit | (687,891) | (680,829) |
Accumulated other comprehensive loss | (12,745) | (2,645) |
Total stockholders’ equity | 515,477 | 811,359 |
Total liabilities, temporary equity and stockholders’ equity | 2,353,949 | 2,372,071 |
Class A common stock | ||
Stockholders’ Equity: | ||
Common stock, value, issued | 280 | 277 |
Class B common stock | ||
Stockholders’ Equity: | ||
Common stock, value, issued | $ 43 | $ 44 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Class A common stock | ||
Stockholders’ Equity: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 2,250,000,000 | 2,250,000,000 |
Common stock, shares issued (in shares) | 280,412,116 | 277,707,635 |
Common stock, shares outstanding (in shares) | 280,412,116 | 277,707,635 |
Class B common stock | ||
Stockholders’ Equity: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 315,000,000 | 315,000,000 |
Common stock, shares issued (in shares) | 45,127,746 | 45,904,227 |
Common stock, shares outstanding (in shares) | 45,127,746 | 45,904,227 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 212,167 | $ 138,055 |
Cost of revenue | 47,051 | 32,084 |
Gross profit | 165,116 | 105,971 |
Operating expenses: | ||
Sales and marketing | 100,057 | 69,974 |
Research and development | 67,054 | 39,527 |
General and administrative | 38,029 | 27,724 |
Total operating expenses | 205,140 | 137,225 |
Loss from operations | (40,024) | (31,254) |
Non-operating income (expense): | ||
Interest income | 1,061 | 544 |
Interest expense | (1,557) | (10,234) |
Other income (expense), net | (487) | 148 |
Total non-operating income (expense), net | (983) | (9,542) |
Loss before income taxes | (41,007) | (40,796) |
Provision for (benefit from) income taxes | 374 | (833) |
Net loss | $ (41,381) | $ (39,963) |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.13) | $ (0.13) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.13) | $ (0.13) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 323,334 | 305,947 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 323,334 | 305,947 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (41,381) | $ (39,963) |
Other comprehensive loss: | ||
Change in unrealized loss on investments, net of tax | (10,100) | (129) |
Other comprehensive loss | (10,100) | (129) |
Comprehensive loss | $ (51,481) | $ (40,092) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Additional paid-in capital | Additional paid-in capitalCumulative Effect, Period of Adoption, Adjustment | Accumulated deficit | Accumulated deficitCumulative Effect, Period of Adoption, Adjustment | Accumulated other comprehensive loss | 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, 2020 | 249,401,000 | 59,239,000 | |||||||||
Beginning balance at Dec. 31, 2020 | $ 816,940 | $ 1,236,993 | $ (420,520) | $ 163 | $ 249 | $ 55 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of common stock upon exercise of stock options (in shares) | 321,000 | 926,000 | |||||||||
Issuance of common stock upon exercise of stock options | 7,965 | 7,963 | $ 1 | $ 1 | |||||||
Repurchases of unvested common stock (in shares) | (60,000) | ||||||||||
Issuance of common stock related to early exercised stock options (in shares) | 35,000 | ||||||||||
Vesting of shares issued upon early exercise of stock options | 1,031 | 1,030 | $ 1 | ||||||||
Issuance of common stock related to settlement of RSUs (in shares) | 332,000 | 337,000 | |||||||||
Issuance of common stock related to settlement of RSUs | (1) | (1) | |||||||||
Tax withholding on RSU settlement (in shares) | (6,000) | ||||||||||
Tax withholding on RSU settlement | (530) | (530) | |||||||||
Conversion of Class B to Class A common stock (in shares) | 5,964,000 | (5,964,000) | |||||||||
Conversion of Class B to Class A common stock | 0 | $ 6 | $ (6) | ||||||||
Stock-based compensation | 18,727 | 18,727 | |||||||||
Net loss | (39,963) | (39,963) | $ (32,889) | $ (7,074) | |||||||
Other comprehensive loss | (129) | (129) | |||||||||
Ending balance (in shares) at Mar. 31, 2021 | 255,958,000 | 54,567,000 | |||||||||
Ending balance at Mar. 31, 2021 | $ 804,040 | 1,264,182 | (460,483) | 34 | $ 256 | $ 51 | |||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 | ||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 249,401,000 | 59,239,000 | |||||||||
Beginning balance at Dec. 31, 2020 | $ 816,940 | 1,236,993 | (420,520) | 163 | $ 249 | $ 55 | |||||
Ending balance (in shares) at Dec. 31, 2021 | 277,707,635 | 277,708,000 | 45,904,227 | 45,904,000 | |||||||
Ending balance at Dec. 31, 2021 | 811,359 | $ (284,437) | 1,494,512 | $ (318,756) | (680,829) | $ 34,319 | (2,645) | $ 277 | $ 44 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of common stock in connection with acquisition (in shares) | 19,000 | ||||||||||
Issuance of common stock in connection with acquisition | $ 1,957 | 1,957 | |||||||||
Issuance of restricted stock in connection with acquisition (in shares) | 52,000 | ||||||||||
Issuance of common stock upon exercise of stock options (in shares) | 857,000 | 65,000 | 769,000 | ||||||||
Issuance of common stock upon exercise of stock options | $ 3,006 | 3,005 | $ 1 | ||||||||
Repurchases of unvested common stock (in shares) | (2,000) | ||||||||||
Issuance of common stock related to early exercised stock options (in shares) | 23,000 | ||||||||||
Vesting of shares issued upon early exercise of stock options | 841 | 841 | |||||||||
Issuance of common stock related to settlement of RSUs (in shares) | 410,000 | 299,000 | |||||||||
Issuance of common stock related to settlement of RSUs | 0 | (1) | $ 1 | ||||||||
Tax withholding on RSU settlement (in shares) | (6,000) | ||||||||||
Tax withholding on RSU settlement | (748) | (748) | |||||||||
Conversion of Class B to Class A common stock (in shares) | 1,861,000 | (1,861,000) | |||||||||
Conversion of Class B to Class A common stock | 0 | $ 2 | $ (2) | ||||||||
Settlement of common stock in connection with convertible senior notes (in shares) | 299,000 | ||||||||||
Settlement of common stock in connection with convertible senior notes | (201) | (201) | |||||||||
Stock-based compensation | 35,181 | 35,181 | |||||||||
Net loss | (41,381) | (41,381) | $ (35,791) | $ (5,590) | |||||||
Other comprehensive loss | (10,100) | (10,100) | |||||||||
Ending balance (in shares) at Mar. 31, 2022 | 280,412,116 | 280,412,000 | 45,127,746 | 45,128,000 | |||||||
Ending balance at Mar. 31, 2022 | $ 515,477 | $ 1,215,790 | $ (687,891) | $ (12,745) | $ 280 | $ 43 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash Flows From Operating Activities | ||
Net loss | $ (41,381) | $ (39,963) |
Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||
Depreciation and amortization expense | 20,014 | 15,218 |
Non-cash operating lease costs | 8,610 | 5,346 |
Amortization of deferred contract acquisition costs | 9,662 | 6,060 |
Stock-based compensation expense | 33,965 | 18,042 |
Amortization of debt discount and issuance costs | 1,170 | 8,971 |
Net accretion of discounts and amortization of premiums on available-for-sale securities | 2,195 | 1,879 |
Deferred income taxes | 6 | (1,513) |
Provision for bad debt | 968 | 1,470 |
Other | 113 | 79 |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable, net | (30,775) | (9,211) |
Contract assets | (250) | (122) |
Deferred contract acquisition costs | (15,608) | (10,866) |
Prepaid expenses and other current assets | (6,775) | 614 |
Other noncurrent assets | (85) | 1,361 |
Accounts payable | 1,862 | 6,181 |
Accrued expenses and other current liabilities | (25,427) | 10,119 |
Operating lease liabilities | (9,455) | (5,352) |
Deferred revenue | 16,001 | 14,646 |
Other noncurrent liabilities | (277) | 535 |
Net cash provided by (used in) operating activities | (35,467) | 23,494 |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | (24,481) | (22,268) |
Capitalized internal-use software | (4,453) | (3,445) |
Cash paid for acquisitions, net of cash acquired | (4,380) | 0 |
Purchases of available-for-sale securities | (264,541) | (188,377) |
Maturities of available-for-sale securities | 187,048 | 261,822 |
Other investing activities | 2 | 44 |
Net cash provided by (used in) investing activities | (110,805) | 47,776 |
Cash Flows From Financing Activities | ||
Repayments of convertible senior notes | (16,571) | 0 |
Proceeds from the exercise of stock options | 3,006 | 7,964 |
Proceeds from the early exercise of stock options | 62 | 95 |
Repurchases of unvested common stock | (3) | (150) |
Payment of tax withholding obligation on RSU settlement | (748) | (530) |
Net cash provided by (used in) financing activities | (14,254) | 7,379 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (160,526) | 78,649 |
Cash, cash equivalents, and restricted cash, beginning of period | 320,958 | 118,146 |
Cash, cash equivalents, and restricted cash, end of period | 160,432 | 196,795 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 48 | 30 |
Cash paid for income taxes, net of refunds | 874 | 656 |
Cash paid for operating lease liabilities | 8,291 | 5,174 |
Supplemental Disclosure of Non-cash Investing and Financing Activities: | ||
Stock-based compensation capitalized for software development | 1,109 | 660 |
Accounts payable and accrued expenses related to property and equipment additions | 16,922 | 2,827 |
Vesting of early exercised stock options | 841 | 1,031 |
Indemnity holdback consideration associated with business combinations | 1,275 | 0 |
Issuance of common stock related to an acquisition | 1,957 | 0 |
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ 15,966 | $ 3,230 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization and Description of Business Cloudflare, Inc. (the Company, Cloudflare, we, us, or our) is a global cloud services provider that delivers a broad range of services to businesses of all sizes and in all 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’s network serves as a scalable, easy-to-use, unified control plane to deliver security, performance, and reliability across on-premise, hybrid, cloud, and software-as-a-service (SaaS) applications. The Company was incorporated in Delaware in July 2009. The Company is headquartered in San Francisco, California. Basis of Presentation and Principles of Consolidation The accompanying interim condensed consolidated financial statements and accompanying notes have been prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP) and applicable regulations of the Securities and Exchange Commission (the 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2021 . Unaudited Interim Condensed Consolidated Financial Information The accompanying interim condensed consolidated balance sheet as of March 31, 2022, the condensed consolidated statements of operations and of comprehensive loss for the three months ended March 31, 2022 and 2021, the condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021, the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2022 and 2021, 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 March 31, 2022, its results of operations for the three months ended March 31, 2022 and 2021, and its cash flows for the three months ended March 31, 2022 and 2021. The results for the three months ended March 31, 2022 are not necessarily indicative of the results expected for the full year ending December 31, 2022 or any future period. The 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2021 . 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, allowance for doubtful accounts, 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, the assessment of recoverability of intangible assets and their estimated useful lives, useful lives of property and equipment, liability and equity allocation of convertible senior notes, the determination of the incremental borrowing rate used for operating lease liabilities, 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. Due to the COVID-19 pandemic, there is ongoing uncertainty and significant disruption in the global economy and financial markets. The |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Significant Accounting Policies The Company's significant accounting policies are discussed in the "Notes to Consolidated Financial Statements, Note 2. Summary of Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021. 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. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Debt—Debt with Conversion and Other Options (ASC 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (ASC 815-40) . The FASB issued this ASU to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. This ASU removes the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. Convertible instruments that continue to be subject to separation models are (1) those with conversion options that are required to be accounted for as bifurcated derivatives and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The ASU also requires the if-converted method to be applied for all convertible instruments when calculating earnings per share. For public business entities, these amendments are effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020. The Company adopted ASU 2020-06 effective January 1, 2022 using the modified retrospective method and therefore financial information for periods before January 1, 2022 were not impacted. Upon adoption of ASU 2020-06, the Company is no longer recording the conversion feature of its 0.75% Convertible Senior Notes due 2025 (the 2025 Notes) and its 0.00% Convertible Senior Notes due 2026 (the 2026 Notes and together with the 2025 Notes, the Notes) in equity. Instead, the Company combined the previously separated equity component with the liability component, which together is now classified as debt, thereby eliminating the subsequent amortization of the debt discount as interest expense. Similarly, the portion of issuance costs previously allocated to equity was reclassified to debt and amortized as interest expense. Adoption of ASU 2020-06 resulted in an increase in the carrying value of the Notes by approximately $288.9 million, of which $4.4 million is classified as a current portion of convertible senior notes, net, to reflect the full principal amount of the Notes outstanding, net of unamortized debt discount and issuance costs, a decrease in additional paid-in capital of approximately $318.8 million and temporary equity, convertible senior notes of approximately $4.4 million to remove the equity component separately recorded for the conversion option associated with the Notes and its allocated issuance costs, and a cumulative-effect adjustment of approximately $34.3 million to the beginning balance of accumulated deficit as of January 1, 2022. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC Topic 606, Revenue from Contracts with Customers . Historically, such assets and liabilities are recognized by the acquirer at fair value in accordance with Topic 805.The ASU is effective for interim and annual periods beginning after December 15, 2022, on a prospective basis, with early adoption permitted. The Company early adopted this standard effective January 1, 2022, and such adoption did not have a material impact on its condensed consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue Subscription and support revenue is recognized over time and accounted for substantially all of the Company’s revenue for the three months ended March 31, 2022 and 2021. The following table summarizes the revenue by region based on the billing address of customers who use the Company’s products: Three Months Ended March 31, 2022 2021 (in thousands) Amount Percentage Amount Percentage United States $ 111,350 53 % $ 71,222 52 % Europe, Middle East, and Africa 55,792 26 % 35,532 26 % Asia Pacific 29,925 14 % 22,879 16 % Other 15,100 7 % 8,422 6 % Total $ 212,167 100 % $ 138,055 100 % The following table summarizes the revenue by type of customer: Three Months Ended March 31, 2022 2021 (in thousands) Amount Percentage Amount Percentage Channel partners $ 24,356 11 % $ 15,362 11 % Direct customers 187,811 89 % 122,693 89 % Total $ 212,167 100 % $ 138,055 100 % 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 three months ended March 31, 2022 and 2021, the Company recognized revenue of $63.9 million and $33.9 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. The following table summarizes the activity of the deferred contract acquisition costs: Three Months Ended March 31, 2022 2021 (in thousands) Beginning balance $ 70,320 $ 44,176 Capitalization of contract acquisition costs 15,608 10,866 Amortization of deferred contract acquisition costs (9,662) (6,060) Ending balance $ 76,266 $ 48,982 The Company did not recognize any impairment losses of deferred contract acquisition costs during the periods presented. Remaining Performance Obligations As of March 31, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was $688.4 million. As of March 31, 2022, the Company expected to recognize 76% of its remaining performance obligations as revenue over the next 12 months with the remainder recognized thereafter. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
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 and restricted cash are comprised of highly liquid money market funds. 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 short-term, restricted cash, or available-for-sale securities as of March 31, 2022 and December 31, 2021. (in thousands) Reported as: March 31, 2022 Amortized Unrealized Unrealized Fair Value Cash & Available-for-sale securities Restricted Cash $ 102,372 $ — $ — $ 102,372 $ 99,885 $ — $ 2,487 Level I: Money market funds 36,767 — — 36,767 30,798 — 5,969 Level II: Corporate bonds 214,056 2 (1,661) 212,397 — 212,397 — U.S. treasury securities 1,041,647 — (11,009) 1,030,638 — 1,030,638 — Commercial paper 351,522 — — 351,522 21,293 330,229 — Subtotal 1,607,225 2 (12,670) 1,594,557 21,293 1,573,264 — Total assets measured at fair value on a recurring basis $ 1,746,364 $ 2 $ (12,670) $ 1,733,696 $ 151,976 $ 1,573,264 $ 8,456 (in thousands) Reported as: December 31, 2021 Amortized Unrealized Unrealized Fair Cash & Available-for-sale securities Restricted Cash $ 64,542 $ — $ — $ 64,542 $ 64,021 $ — $ 521 Level I: Money market funds 253,075 — — 253,075 246,415 — 6,660 Level II: Corporate bonds 202,774 16 (289) 202,501 3,341 199,160 — U.S. treasury securities 960,278 2 (2,298) 957,982 — 957,982 — Commercial paper 350,924 — — 350,924 — 350,924 — Subtotal 1,513,976 18 (2,587) 1,511,407 3,341 1,508,066 — Total assets measured at fair value on a recurring basis $ 1,831,593 $ 18 $ (2,587) $ 1,829,024 $ 313,777 $ 1,508,066 $ 7,181 As of March 31, 2022, the Company had $8.5 million in total restricted cash related to $6.7 million in irrevocable standby letters of credit established according to the requirements under lease agreements and $1.3 million of indemnity holdback consideration associated with business combinations. For further details on the indemnity holdback, refer to Note 13 to these condensed consolidated financial statements. 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 March 31, 2022 and December 31, 2021. 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 $1,311.8 million and $966.3 million as of March 31, 2022 and December 31, 2021, respectively. The amortized cost of available-for-sale investments with maturities greater than one year was $274.1 million and $544.4 million as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, net unrealized loss on investments were $12.7 million and were included in accumulated other comprehensive income on the condensed consolidated balance sheets. As of December 31, 2021, net unrealized gains on investments were $2.7 million net of tax and were included in accumulated other comprehensive income on the condensed consolidated balance sheets. The unrealized gains and losses on available-for-sale investments are related to U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate bonds. The Company determined any unrealized losses to be temporary. Factors considered in determining whether a loss is temporary include 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. As of March 31, 2022, the Company's investment portfolio consisted of investment grade securities with an average credit rating of AA. The Company carries the 2026 Notes issued in August 2021 at face value less the unamortized issuance costs on its condensed consolidated balance sheets and presents that fair value for disclosure purposes only. As of March 31, 2022 , the fair value of the 2026 Notes was $1,324.2 million. The fair value of the 2026 Notes, which are classified as Level II financial instruments, was determined based on the quoted bid prices of the 2026 Notes in an over-the-counter market on the last trading day of the reporting period. The Company carries the 2025 Notes issued in May 2020 at face value less the unamortized issuance costs on its condensed consolidated balance sheets and presents that fair value for disclosure purposes only. As of March 31, 2022 , the fair value of the 2025 Notes was $536.0 million. The fair value of the 2025 Notes, which are classified as Level II financial instruments, was determined based on the quoted bid prices of the 2025 Notes in an over-the-counter market on the last trading day of the reporting period. For further details on the Notes, refer to Note 7 to these condensed consolidated financial statements. 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 |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Balance Sheet Components Accounts Receivable, Net As of March 31, 2022 and December 31, 2021, the Company’s allowance for doubtful accounts was $3.2 million and $2.6 million, respectively. Provision for bad debt for the three months ended March 31, 2022 and 2021 was $1.0 million and $1.4 million, respectively. For the three months ended March 31, 2022 and 2021, write-off of uncollectible accounts receivable was $0.5 million and $1.0 million, respectively. Property and Equipment, Net Property and equipment, net consisted of the following: March 31, 2022 December 31, 2021 (in thousands) Property and equipment: Servers—network infrastructure $ 176,105 $ 151,462 Construction in progress 36,564 41,424 Capitalized internal-use software 68,892 63,331 Office and computer equipment 29,329 24,451 Office furniture 7,095 5,927 Software 5,052 4,032 Leasehold improvements 16,790 12,892 Asset retirement obligation 827 430 Gross property and equipment 340,654 303,949 Less accumulated depreciation and amortization (138,222) (120,213) Total property and equipment, net $ 202,432 $ 183,736 Depreciation and amortization expense on property and equipment for the three months ended March 31, 2022 and 2021 was $18.9 million and $14.0 million, respectively. This includes amortization expense for capitalized internal-use software which totaled $4.8 million and $4.2 million for the three months ended March 31, 2022 and 2021, respectively. Goodwill As of March 31, 2022 and December 31, 2021, the Company's goodwill was $28.5 million and $23.5 million, respectively . During the three months ended March 31, 2022, the Company recorded $5.0 million of goodwill in connection with the acquisition of Vectrix Security, Inc. (Vectrix). For further details on this acquisition, refer to Note 13 to these consolidated financial statements. No goodwill impairments were recorded during the three months ended March 31, 2022 and 2021. Acquired Intangible Assets, Net Acquired intangible assets, net consisted of the following: March 31, 2022 Gross Carrying Accumulated Net Book (in thousands) Developed technology $ 10,100 $ 6,254 $ 3,846 Total acquired intangible assets, net $ 10,100 $ 6,254 $ 3,846 December 31, 2021 Gross Carrying Accumulated Net Book (in thousands) Developed technology $ 7,000 $ 5,746 $ 1,254 Total acquired intangible assets, net $ 7,000 $ 5,746 $ 1,254 Amortization of acquired intangible assets for the three months ended March 31, 2022 and 2021 was $0.5 million and $0.7 million, respectively. As of March 31, 2022, the estimated future amortization expense of acquired intangible assets was as follows: Estimated (in thousands) Year ending December 31, 2022 (remaining nine months) $ 1,687 2023 2,103 2024 56 Total $ 3,846 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company's lease portfolio consists of real estate and co-location agreements in the U.S. and internationally. The real estate leases include leases for office space and have remaining lease terms of up to 6.8 years. Certain of these leases contain options that allow the Company to extend or terminate the lease agreement. The Company's co-location leases have remaining lease terms of up to 9.3 years. All of the Company's leases are classified as operating leases. The Company also subleased one of its leased office spaces. The lease term of the sublease ended during the three months ended June 30, 2021. Sublease income, which is recorded as a reduction of rent expense was zero and $0.7 million for the three months ended March 31, 2022 and March 31, 2021, respectively. The components of lease cost related to the Company's operating leases included in the condensed consolidated statements of operations were as follows: Three Months Ended March 31, 2022 2021 (in thousands) Operating lease cost $ 8,610 $ 5,497 Sublease income — (747) Total lease cost $ 8,610 $ 4,750 Variable lease cost and short-term lease cost for the three months ended March 31, 2022 and March 31, 2021 were not material. As of March 31, 2022, the Company had $42.0 million of total undiscounted future payments under operating leases that have not yet commenced, which were not included on the condensed consolidated balance sheets. These operating leases will commence between April 2022 and July 2026 and have an average lease term of 4.6 years. As of March 31, 2022, the weighted-average remaining term of the Company’s operating leases was 5.9 and the weighted-average discount rate used to measure the present value of the operating lease liabilities was 3.5%. Maturities of the operating lease liabilities as of March 31, 2022 are as follows: March 31, 2022 (in thousands) 2022 (remaining nine months) $ 23,052 2023 29,615 2024 27,519 2025 20,869 2026 18,383 Thereafter 39,327 Total lease payments $ 158,765 Less: Imputed interest $ (16,841) Total operating lease liabilities $ 141,924 |
Leases | Leases The Company's lease portfolio consists of real estate and co-location agreements in the U.S. and internationally. The real estate leases include leases for office space and have remaining lease terms of up to 6.8 years. Certain of these leases contain options that allow the Company to extend or terminate the lease agreement. The Company's co-location leases have remaining lease terms of up to 9.3 years. All of the Company's leases are classified as operating leases. The Company also subleased one of its leased office spaces. The lease term of the sublease ended during the three months ended June 30, 2021. Sublease income, which is recorded as a reduction of rent expense was zero and $0.7 million for the three months ended March 31, 2022 and March 31, 2021, respectively. The components of lease cost related to the Company's operating leases included in the condensed consolidated statements of operations were as follows: Three Months Ended March 31, 2022 2021 (in thousands) Operating lease cost $ 8,610 $ 5,497 Sublease income — (747) Total lease cost $ 8,610 $ 4,750 Variable lease cost and short-term lease cost for the three months ended March 31, 2022 and March 31, 2021 were not material. As of March 31, 2022, the Company had $42.0 million of total undiscounted future payments under operating leases that have not yet commenced, which were not included on the condensed consolidated balance sheets. These operating leases will commence between April 2022 and July 2026 and have an average lease term of 4.6 years. As of March 31, 2022, the weighted-average remaining term of the Company’s operating leases was 5.9 and the weighted-average discount rate used to measure the present value of the operating lease liabilities was 3.5%. Maturities of the operating lease liabilities as of March 31, 2022 are as follows: March 31, 2022 (in thousands) 2022 (remaining nine months) $ 23,052 2023 29,615 2024 27,519 2025 20,869 2026 18,383 Thereafter 39,327 Total lease payments $ 158,765 Less: Imputed interest $ (16,841) Total operating lease liabilities $ 141,924 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt 2026 Convertible Senior Notes In August 2021, the Company issued $1,293.8 million aggregate principal amount of the 2026 Notes in a private offering to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act, including the initial purchasers’ exercise in full of their option to purchase an additional $168.8 million aggregate principal amounts of the 2026 Notes. The total proceeds from the issuance of the 2026 Notes, net of initial purchaser discounts and commissions and debt issuance costs, were $1,274.0 million. The 2026 Notes are senior unsecured obligations of the Company and will mature on August 15, 2026, unless earlier redeemed, repurchased, or converted, and are governed by the terms of the indenture dated August 13, 2021 (the 2026 Indenture). The 2026 Notes are 0% convertible senior notes and therefore do not bear regular cash interest. The 2026 Notes are convertible at an initial conversion rate of 5.2263 shares of the Company's Class A common stock per $1,000 principal amount of the 2026 Notes, which is equivalent to an initial conversion price of approximately $191.34 per share, subject to adjustment upon the occurrence of specified events in accordance with the terms of the 2026 Indenture. The 2026 Notes may be converted at any time on or after May 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date. Holders of the 2026 Notes may convert all or any portion of their 2026 Notes at their option at any time prior to the close of business on the business day immediately preceding May 15, 2026 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2021 (and only during such calendar quarter), if the last reported sale price of the Company's Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's Class A common stock and the conversion rate on each such trading day; (3) if the Company calls such 2026 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. None of the circumstances described in the paragraphs above were met during the first quarter of 2022. In addition, if the 2026 Notes are converted prior to the maturity date following certain specified corporate events or because the Company issues a notice of redemption, the Company will increase the conversion rate for such 2026 Notes converted in connection with such a corporate event or during the related redemption period, as the case may be, in certain circumstances set forth in the 2026 Indenture. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company's Class A common stock, or a combination of cash and shares of the Company's Class A common stock, at the Company's election. It is the Company’s current intent to settle the principal amount of 2026 Notes in cash. The Company may not redeem the 2026 Notes prior to August 20, 2024. The Company may redeem for cash all or any portion of the 2026 Notes (subject to the partial redemption limitation (as defined below)), at its option, on or after August 20, 2024, if the last reported sale price of the Company’s Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus any accrued and unpaid special interest to, but excluding, the redemption date. If the Company elects to redeem fewer than all of the outstanding 2026 Notes, at least $100.0 million aggregate principal amount of 2026 Notes must be outstanding and not subject to redemption as of the relevant redemption date. No sinking fund is provided for the 2026 Notes. If the Company undergoes a fundamental change (as defined in the 2026 Indenture), holders of the 2026 Notes may require the Company to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid special interest to, but excluding, the fundamental change repurchase date. Based on the closing price of the Company's Class A common stock of $119.70 on March 31, 2022 , the if-converted value of the 2026 Notes does not exceed its principal amount. The remaining life of the 2026 Notes was approximately 53 months as of March 31, 2022 . 2026 Capped Call Transactions In connection with the offering of the 2026 Notes, the Company entered into privately-negotiated capped call option transactions (the 2026 Capped Calls) with certain financial institution counterparties. The 2026 Capped Calls each have an initial strike price of approximately $191.34 per share of the Company's Class A common stock, subject to certain adjustments, which corresponds to the initial conversion price of the 2026 Notes. The 2026 Capped Calls each have an initial cap price of approximately $250.94 per share, subject to certain adjustments. The 2026 Capped Calls initially cover, subject to anti-dilution adjustments, approximately 6.8 million shares of the Company's Class A common stock. The 2026 Capped Calls are intended to generally offset potential dilution to the Company's Class A common stock upon conversion of the 2026 Notes and/or offset the potential cash payments that the Company could be required to make in excess of the principal amount upon any conversion, subject to the cap price. The 2026 Capped Calls are subject to either adjustment or termination upon the occurrence of certain specified events affecting the Company, including a merger event, a tender offer, and a nationalization, insolvency, or delisting involving the Company. The 2026 Capped Calls expire in incremental components on each trading date between July 17, 2026 and August 13, 2026. As of March 31, 2022, the terms of the 2026 Capped Calls have not been adjusted. The 2026 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The premium paid for the purchase of the 2026 Capped Calls of $86.3 million was recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets. 2025 Convertible Senior Notes In May 2020, the Company issued $575.0 million aggregate principal amount of the 2025 Notes in a private offering to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act, including t he initial purchasers' exercise in full of their option to purchase an additional $75.0 million aggregate principal amount of the 2025 Notes. The total net proceeds from the issuance of the 2025 Notes, after deducting initial purchaser discounts and debt issuance costs, were $562.5 million . Immediately following the closings of the 2025 Notes Exchange (defined below) and other conversions that have since been completed, $158.4 million in aggregate principal amount of the 2025 Notes remained outstanding as of March 31, 2022. The 2025 Notes are senior unsecured obligations of the Company and will mature on May 15, 2025, unless earlier redeemed, repurchased, or converted, and are governed by the terms of the Indenture dated May 15, 2020 (the 2025 Indenture and, together with the 2026 Indenture, the Indentures). Interest on the 2025 Notes is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2020, at a rate of 0.75% per year. The 2025 Notes are convertible at an initial conversion rate of 26.7187 shares of the Company's Class A common stock per $1,000 principal amount of the 2025 Notes, which is equivalent to an initial conversion price of approximately $37.43 per share, subject to adjustment upon the occurrence of specified events in accordance with the terms of the 2025 Indenture. The 2025 Notes may be converted at any time on or after February 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date. Holders of the 2025 Notes may convert all or any portion of their 2025 Notes at their option at any time prior to the close of business on the business day immediately preceding February 15, 2025 only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company's Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 2025 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's Class A common stock and the conversion rate on each such trading day; (3) if the Company calls such 2025 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. The circumstances described in paragraph (1) above were met during the first quarter of 2022 and as a result, the 2025 Notes are convertible at the option of the holder from April 1, 2022 until June 30, 2022. In addition, if the 2025 Notes are converted prior to the maturity date following certain specified corporate events or because the Company issues a notice of redemption, the Company will increase the conversion rate for such 2025 Notes converted in connection with such a corporate event or during the related redemption period, as the case may be, in certain circumstances set forth in the 2025 Indenture. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company's Class A common stock, or a combination of cash and shares of the Company's Class A common stock, at the Company's election. It is the Company’s current intent to settle the principal amount of 2025 Notes in cash. The Company may not redeem the 2025 Notes prior to May 20, 2023. The Company may redeem for cash all or any portion of the 2025 Notes, at its option, on or after May 20, 2023, if the last reported sale price of the Company’s Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2025 Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2025 Notes. If the Company undergoes a fundamental change (as defined in the 2025 Indenture), holders of the 2025 Notes may require the Company to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. During the three months ended December 31, 2021, certain holders elected to convert approximately $16.6 million aggregate principal amount of the 2025 Notes. The Company elected to settle the conversions in a combination of cash equal to the principal amount of the 2025 Notes converted and the issuance of 298,909 shares of the Company's Class A common stock for the remainder associated with the conversion premium. The difference between the settlement consideration and the carrying value of the 2025 Notes converted was recorded to additional paid-in-capital on the Company's condensed consolidated balance sheets. 2025 Notes Exchange On August 13, 2021, the Company closed privately-negotiated exchange agreements with certain holders of the 2025 Notes to exchange approximately $400.0 million in aggregate principal amount of the 2025 Notes (the 2025 Notes Exchange) for an aggregate of $400.7 million in cash (including accrued interest) and approximately 7.6 million shares of the Company’s Class A common stock (the Exchange Shares) for aggregate consideration of $1,321.0 million. The Company used a portion of the net proceeds from the offering of the 2026 Notes to fund the 2025 Notes Exchange. As a result, the Company recorded a debt extinguishment loss of $72.2 million, representing the difference between the fair value of the liability component of $355.3 million and the carrying value of the 2025 Notes Exchange of $283.1 million at the closing date. The fair value of the liability component was calculated by using an effective interest rate of 4.08%, which was determined by measuring the fair value of similar debt instruments that did not have an associated convertible feature and adjusted to reflect the term of the remaining 2025 Notes. The aggregate consideration of $1,321.0 million was allocated between the fair value of the liability component of $355.3 million and the reacquisition of the equity component of $965.7 million, which was recorded as a reduction to additional paid-in capital and offset by the additional paid-in capital for the Exchange Shares issued. Based on the closing price of the Company's Class A common stock of $119.70 on March 31, 2022, the if-converted value of the 2025 Notes exceeded its principal amount by approximately $348.3 million. The remaining life of the 2025 Notes was approximately 38 months as of March 31, 2022. 2025 Capped Call Transactions In connection with the offering of the 2025 Notes, the Company entered into privately-negotiated capped call option transactions (the 2025 Capped C alls and, together with the 2026 Capped Calls, the capped call transactions) with certain financial institution counterparties . The 2025 Capped Calls each have an initial strike price of approximately $37.43 per share of the Company's Class A common stock, subject to certain adjustments, which corresponds to the initial conversion price of the 2025 Notes. The 2025 Capped Calls each have an initial cap price of $57.58 per share, subject to certain adjustments. The 2025 Capped Calls initially cover, subject to anti-dilution adjustments, approximately 15.4 million shares of the Company's Class A common stock. The 2025 Capped Calls are intended to generally offset potential dilution to the Company's Class A common stock upon conversion of the 2025 Notes and/or offset the potential cash payments that the Company could be required to make in excess of the principal amount upon any conversion, subject to the cap price. The 2025 Capped Calls are subject to either adjustment or termination upon the occurrence of certain specified events affecting the Company, including a merger event, a tender offer, and a nationalization, insolvency, or delisting involving the Company. The 2025 Capped Calls expire in incremental components on each trading date between March 18, 2025 and May 13, 2025. As of March 31, 2022, the terms of the 2025 Capped Calls have not been adjusted and no 2025 Capped Calls were exercised in connection with the 2025 Notes Exchange. As of March 31, 2022, no 2025 Capped Calls were exercised in connection with the 2025 Notes conversion requests. The 2025 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The premium paid for the purchase of the 2025 Capped Calls of $67.3 million was recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets. The net carrying amounts of the Notes were as follows: March 31, 2022 December 31, 2021 2026 Notes 2025 Notes 2026 Notes 2025 Notes (in thousands) Principal $ 1,293,750 $ 158,429 $ 1,293,750 $ 175,000 Unamortized debt discount (1) — — (248,179) (45,382) Unamortized debt issuance costs (17,316) (2,158) (14,541) (1,654) Carrying amount, net $ 1,276,434 $ 156,271 $ 1,031,030 $ 127,964 (1) The carrying value of the equity components of the 2025 Notes and 2026 Notes as of December 31, 2021 was eliminated upon the adoption of ASU 2020-06. Refer to Note 2 to these condensed consolidated financial statements. The following table sets forth total interest expense recognized related to the Notes: Three Months Ended March 31, 2022 2021 2026 Notes 2025 Notes 2026 Notes 2025 Notes (in thousands) Coupon interest expense $ — $ 310 $ — $ 1,078 Amortization of debt discount (1) — — — 8,568 Amortization of debt issuance costs 990 180 — 403 Total $ 990 $ 490 $ — $ 10,049 (1) As a result of the adoption of ASU 2020-06 on January 1, 2022, there is no debt discount associated with either the 2025 Notes or the 2026 Notes. Refer to Note 2 to these condensed consolidated financial statements. Prior to the adoption of ASU 2020-06 on January 1, 2022, the Company separated the Notes into liability and equity components. On issuance of the Notes, the carrying amounts of the equity components were recorded as debt discount and subsequently amortized to interest expense. Upon the adoption of ASU 2020-06, the Company accounts each of the Notes as a single liability measured at its amortized cost. For further details on the adoption of ASU 2020-06, refer to Note 2 to these condensed consolidated financial statements. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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 March 31, 2022 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 March 31, 2022. 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 network. 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 $25.8 million and $16.4 million for the three months ended March 31, 2022 and 2021, 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 March 31, 2022. For the lease components of co-location agreements, refer to Note 6 to these condensed consolidated financial statements. Payments Due by Period as of March 31, 2022 Total 2022 (remaining nine months) 2023 2024 2025 2026 Thereafter (in thousands) Non-cancelable: Open purchase agreements (1) $ 59,080 $ 24,417 $ 17,042 $ 7,678 $ 2,570 $ 2,274 $ 5,099 Bandwidth and other co-location related commitments (2) 115,708 30,413 31,070 21,287 13,785 9,405 9,748 Other commitments (3) 1,275 — 1,275 — — — — Total $ 176,063 $ 54,830 $ 49,387 $ 28,965 $ 16,355 $ 11,679 $ 14,847 (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 March 31, 2022 as the Company had not yet received the related services. (2) Long-term commitments for bandwidth usage and other co-location related commitments 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 March 31, 2022. (3) Indemnity holdback consideration associated with the Vectrix acquisition. For further details refer to Note 13 to these condensed consolidated financial statements. 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 also discloses material contingencies when it believes a loss is not probable but reasonably possible and can be reasonably estimated. Legal costs incurred and expected to be incurred related to litigation matters are expensed as incurred. The Company’s network 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 products through its network. Although the Company takes precautions to prevent its network and associated products from being accessed or used in violation of such laws, the Company may have inadvertently allowed its network 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. The voluntary self-disclosure to the Census Bureau was completed with no penalties in November 2019, and the voluntary self-disclosure to the Bureau of Industry and Security was completed with no penalties in June 2020. The voluntary self-disclosure to OFAC remains under review. 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 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. 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. |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 and December 31, 2021, the Company was authorized to issue 2,250,000,000 shares of Class A common stock and 315,000,000 shares of Class B common stock, each with a par value of $0.001 per share. There were 280,412,116 and 277,707,635 shares of Class A common stock issued and outstanding as of March 31, 2022 and December 31, 2021, respectively. The number of shares of Class B common stock issued and outstanding was 45,127,746 and 45,904,227, as of March 31, 2022 and December 31, 2021, 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 March 31, 2022 and December 31, 2021, 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 and conversion. Shares of the Company's Class B common stock are convertible into an equivalent number of shares of the Company's Class A common stock and generally convert into shares of the Company's Class A common stock upon cessation of employment or transfer, except for certain transfers described in the Company's amended and restated certificate of incorporation. 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: March 31, 2022 December 31, 2021 (in thousands) 2025 Notes 5,503 6,078 2026 Notes 10,311 10,311 Stock options issued and outstanding 12,743 13,603 Remaining shares available for issuance under the 2019 Plan 45,931 30,761 Outstanding and unsettled restricted stock units 7,437 7,417 Shares available for issuance under the Employee Stock Purchase Plan 11,293 8,056 Total shares of common stock reserved 93,218 76,226 |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
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, restricted stock units (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. 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. 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. 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. The stock options granted under the 2010 Plan and the 2019 Plan generally vest over a four-year period subject to remaining continuously employed and expire no more than 10 years from the date of grant. The following table summarizes the stock options activity under the 2010 Plan and 2019 Plan for the three months ended March 31, 2022: Stock Options Outstanding (in thousands, except year and per share data) Shares Subject to Options Outstanding Weighted- Average Exercise Price per Option Weighted- Average Remaining Contractual Terms (in years) Aggregate Intrinsic Value Balances as of December 31, 2021 13,603 $ 12.47 6.0 $ 1,726,440 Options granted — $ — Options exercised (857) $ 3.49 $ 87,101 Options canceled/forfeited/expired (3) $ 2.77 Balances as of March 31, 2022 12,743 $ 15.13 5.75 $ 1,437,112 Vested and expected to vest as of March 31, 2022 12,739 $ 4.91 5.75 $ 1,436,612 Exercisable as of March 31, 2022 11,793 $ 2.62 5.56 $ 1,380,741 The Company did not grant any stock options during the three months ended March 31, 2022 and March 31, 2021. 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 5,303,657 and 6,229,524 options that were unvested as of March 31, 2022 and December 31, 2021, respectively. The total grant date fair value for vested options in the three months ended March 31, 2022 and 2021 was $2.5 million and $5.8 million, respectively. As of March 31, 2022 and December 31, 2021, there was $17.5 million and $20.1 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 2.1 years and 2.3 years, respectively. In December 2021, the Compensation Committee of the Board of Directors of the Company (the Compensation Committee) granted to the Company’s Chief Executive Officer and President and Chief Operating Officer (each, a Co-Founder), a 10-year performance-based stock option that vests and becomes exercisable only if the Company achieves certain stock price milestones and the Co-Founder continues to remain in a primary leadership position with the Company (the Performance Awards). The Performance Awards will be submitted for approval of the Company’s stockholders other than the Co-Founders, other executive officers of the Company, certain other employees of the Company, and certain of their respective family members and affiliates (the Disinterested Stockholders) at the Company's 2022 annual meeting of its stockholders. If a majority of the voting power held by the Disinterested Stockholders do not approve the Performance Awards by December 22, 2022, the Performance Awards will be immediately and automatically forfeited. Each Performance Award was granted under the 2019 Plan and consists of a 10-year option to purchase an aggregate of 3,960,000 shares of the Company’s Class A common stock. The exercise price per share subject to the Performance Awards is $136.81, which was the closing sales price of the Company’s Class A common stock on December 22, 2021, the date of grant by the Compensation Committee. Solely for accounting purposes, the grant date of the Performance Awards will be the date of approval by the majority of the voting power held by the Disinterested Stockholders. As of March 31, 2022, the Performance Awards have not been approved by the Disinterested Stockholders, and accordingly, are not considered granted in accordance with ASC 718 solely for accounting purposes. 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 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), any unvested shares of such individual for a repurchase price equal to the amount previously paid by the individual for such unvested shares. As of March 31, 2022 and December 31, 2021, the Company had $3.9 million and $4.7 million, respectively, recorded in liability for early exercise of unvested stock options, and the related number of unvested shares subject to repurchase was 1,783,279 and 2,128,660, respectively. Restricted Stock and 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-year period, subject to remaining continuously employed. The performance vesting condition under the 2010 Plan was deemed satisfied upon the effective date of the Company's registration statement on Form S-1 filed with the SEC in connection with the IPO. In connection with the acquisition of Vectrix, the Company issued approximately 71,000 shares of Class A common stock to former Vectrix employees who have joined the Company and previous holders of Vectrix equity interests. Of these issued shares, approximately 52,000 shares are restricted stock that is subject to vesting on a ratable basis over the four years from the acquisition date, in each case subject to remaining continuously employed. None of these restricted shares vested during the three months ended March 31, 2022. The total stock-based compensation expense for shares of unvested restricted stock for the three months ended March 31, 2022 was not material. As of March 31, 2022, the total unrecognized stock-based compensation expense related to unvested restricted stock was $4.9 million. For further details on the Vectrix acquisition, refer to Note 13 to these condensed consolidated financial statements. In connection with the acquisition of Zaraz Inc. (Zaraz), the Company issued approximately 48,000 shares of Class A common stock to former Zaraz employees who have joined the Company and previous holders of Zaraz equity interests. Of these issued shares, approximately 39,000 are shares of restricted stock that is subject to vesting on a ratable basis over the three years from the acquisition date, in each case subject to remaining continuously employed. The total stock-based compensation expense for such shares of unvested restricted stock for the three months ended March 31, 2022 was not material. As of March 31, 2022, the total unrecognized stock-based compensation expense related to unvested restricted stock was $5.5 million. For further details on the Zaraz acquisition, refer to Note 13 to these consolidated financial statements. In connection with the acquisition of S2 Systems Corporation (S2), the Company issued approximately 948,000 shares of Class A common stock to former S2 shareholders, some of which have joined the Company as employees. Of these issued shares, approximately 841,000 shares are restricted stock that is subject to vesting, with 77.8% of this restricted stock vesting in two years from the acquisition date and the remainder of this restricted stock vesting in three years from the acquisition date, in each case subject to remaining continuously employed. The total grant date fair value for vested shares in the three months ended March 31, 2022 and March 31, 2021 was $11.2 million and zero, respectively. The total stock-based compensation expense for shares of unvested restricted stock for the three months ended March 31, 2022 and 2021 was $0.8 million and $1.4 million, respectively. As of March 31, 2022 and 2021, the total unrecognized stock-based compensation expense related to unvested restricted stock was $2.4 million and $7.4 million, respectively. For further details on the S2 acquisition, refer to Note 13 to these condensed consolidated financial statements. RSU and restricted stock activity for the three months ended March 31, 2022 was as follows: Restricted Stock and RSUs Weighted-Average (in thousands, except per share data) Unvested and outstanding as of December 31, 2021 7,456 $ 47.36 Granted - RSUs 863 $ 102.25 Granted - Restricted stock 52 $ 100.29 Vested - RSUs (709) $ 31.63 Vested - Restricted stock (655) $ 100.29 Forfeited (173) $ 48.17 Unvested as of March 31, 2022 6,834 $ 55.45 Vested and not yet released — $ — Outstanding as of March 31, 2022 6,834 $ 55.45 The total grant date fair value for vested RSUs for the three months ended March 31, 2022 and 2021 was $22.4 million and $9.9 million, respectively. The total stock-based compensation expense for RSUs for the three months ended March 31, 2022 and 2021 was $35.2 million and $13.6 million, respectively. As of March 31, 2022 and December 31, 2021, the total unrecognized stock-based compensation expense related to unvested RSUs was $342.3 million and $176.2 million, respectively, that is expected to be recognized over a weighted-average period of 3.3 years and 3.5 years, respectively. 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 ESPP generally provides for six-month offering periods beginning on the first day of trading on or after November 15 and May 15 of each year and terminating on the last trading day on or before May 15 and November 15, approximately six months later, with identical purchase periods. Current employees cannot sell the shares of Class A common stock purchased under the ESPP until the day after the one-year anniversary of the purchase date of such shares, except for the withholding or sale of shares by the Company to meet any applicable tax withholding obligations. No employee may purchase (i) during each purchase period more than 1,500 shares of Class A common stock and (ii) shares under the ESPP at a rate in excess of $25,000 worth of the Company's Class A common stock based on the fair market value per share of the Company's Class A common stock at the beginning of an offering for each calendar year such purchase right is outstanding. No shares of Class A common stock were purchased under the ESPP during the three months ended March 31, 2022 and March 31, 2021, respectively. As of March 31, 2022 and December 31, 2021, the total unrecognized stock-based compensation expense related to the ESPP was $0.8 million and $2.6 million, respectively, that is expected to be recognized over a weighted average period of 0.1 and 0.4 years, respectively. The weighted-average assumptions used to determine the fair value of the ESPP during the periods presented were as follows: Three Months ended March 31, 2022 2021 Expected term (in years) 0.5 0.5 Risk-free interest rate 0.1 % 0.1 % Expected volatility 44.0 % 59.7 % Dividend yield — % — % 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 March 31, 2022 2021 (in thousands) Cost of revenue $ 1,078 $ 414 Sales and marketing 8,919 5,645 Research and development 18,829 8,364 General and administrative 5,139 3,615 Total stock-based compensation expense $ 33,965 $ 18,038 |
Net Loss per Share Attributable
Net Loss per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 2021 Class A Class B Class A Class B (in thousands, except per share data) Net loss attributable to common stockholders $ (35,791) $ (5,590) $ (32,889) $ (7,074) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 279,658 43,676 251,793 54,154 Net loss per share attributable to common stockholders, basic and diluted $ (0.13) $ (0.13) $ (0.13) $ (0.13) 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: March 31, 2022 2021 (in thousands) 2025 Notes 4,233 15,363 2026 Notes 6,762 — Shares subject to repurchase 1,783 3,390 Unexercised stock options 12,743 16,833 Unvested restricted stock and RSUs 7,437 8,447 Shares issuable pursuant to the ESPP 61 132 Total 33,019 44,165 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The computation of the provision for (benefit from) 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 expense of $0.4 million and an income tax benefit of $0.8 million f or the three months ended March 31, 2022 and 2021, respectively. The income tax expense of $0.4 million for the three months ended March 31, 2022 was primarily related to withholding taxes in the U.S. and income tax expense from profitable foreign jurisdictions, offset by the partial release of the U.S. valuation allowance in connection with an acquisition. The benefit from income taxes of $0.8 million for the three months ended March 31, 2021 was primarily related to excess tax benefits from stock-based compensation deductions in the United Kingdom, offset by withholding taxes in the U.S. and income tax expense from profitable foreign jurisdictions. 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 realizable. As of March 31, 2022, the Company maintains a full valuation allowance in the U.S. and the U.K. and no deferred tax assets and related tax benefits have been recognized in the consolidated financial statements. There is no valuation allowance associated with any other foreign jurisdictions. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Vectrix On January 14, 2022, the Company acquired all of the outstanding shares of Vectrix, a company that has developed online security technology that gives users the ability to scan and monitor SaaS applications for security issues, for a total purchase consideration of $7.6 million. The total purchase consideration included (i) acquisition-date cash payments of $4.3 million, net of $0.8 million of cash acquired, (ii) $2.0 million in shares of the Company’s Class A common stock, and (iii) a cash holdback of $1.3 million, which the Company is retaining for up to 18 months and will be payable to the previous owners of Vectrix, subject to offset by the Company for any of the previous owners’ indemnification obligations in connection with the acquisition. Concurrent with the closing of the acquisition, the Company made a cash payment of $2.0 million to cancel and settle Vectrix’s other existing equity-related agreements, which was part of the acquisition-date cash payments included in the purchase consideration. In connection with the acquisition, the Company entered into compensation arrangements for stock-based and cash awards with a value totaling $8.0 million, of which $2.6 million was recognized as compensation expense on the acquisition date and $0.3 million was recorded as additional compensation expense during the three months ended March 31, 2022. The remaining compensation amount of $5.1 million is being recognized over a future weighted-average period of 3.8 years subject to the recipients’ continued service with the Company. The transaction-related costs for the acquisition were not material and are included in general and administrative expenses in the consolidated statements of operations for the three months ended March 31, 2022. The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands): Developed technology $ 3,100 Goodwill 4,951 Total assets acquired 8,051 Accounts Payable (20) Other noncurrent liabilities (419) Total purchase price $ 7,612 The acquired assets and assumed liabilities were recorded at their estimated fair values. The estimated useful life for the acquired developed technology is two years. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is expected to be deductible for tax purposes. Goodwill is primarily attributable to the assembled workforce as well as the anticipated synergies from the integration of Vectrix's technology with the Company's technology. This acquisition did not have a material impact on the Company’s condensed consolidated financial statements; therefore, historical and pro forma disclosures have not been presented. Zaraz Inc. On October 15, 2021, the Company acquired all of the outstanding shares of Zaraz Inc., a remote-first company that has developed a server-side rendering technology, for a total estimated purchase consideration of $7.2 million. The total purchase consideration included (i) acquisition-date cash payments of $5.6 million, net of $0.8 million of cash acquired and (ii) $1.6 million in shares of the Company’s Class A common stock. Concurrent with the closing of the acquisition, the Company made a cash payment of $1.1 million to cancel and settle Zaraz’s existing equity arrangements, which was part of the acquisition-date cash payments included in the purchase consideration. In connection with the acquisition, the Company entered into compensation arrangements for stock-based and cash awards with a value totaling $6.5 million, of which $0.5 million was recorded as total compensation expense during the year ended December 31, 2021. The Company recorded an additional $0.5 million of compensation expense during the three months ended March 31, 2022. The remaining compensation amount of $5.5 million is being recognized over a future weighted-average period of 2.5 years subject to the recipients’ continued service with the Company. The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands): Developed technology $ 1,400 Goodwill 6,365 Total assets acquired 7,765 Accrued compensation (228) Accrued expenses and other current liabilities (43) Other noncurrent liabilities (322) Total purchase price $ 7,172 The acquired assets and assumed liabilities were recorded at their estimated fair values. The estimated useful life for the acquired developed technology is two years. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is expected to be deductible for tax purposes. Goodwill is primarily attributable to the assembled workforce as well as the anticipated synergies from the integration of Zaraz's technology with the Company's technology. This acquisition did not have a material impact on the Company’s condensed consolidated financial statements; therefore, historical and pro forma disclosures have not been presented. S2 Systems In January 2020, the Company acquired all of the outstanding shares of S2, a company based in Kirkland, Washington that has developed browser isolation technology, for a total purchase consideration of $17.7 million. The Company is incorporating S2's technology into the Company's Cloudflare Gateway product. The total purchase consideration included (i) acquisition-date cash payments of $13.7 million, net of $0.1 million of cash acquired, (ii) $1.8 million in shares of the Company’s Class A common stock, and (iii) a cash holdback of $2.2 million, which the Company is retaining for up to 18 months and will be payable to the previous owners of S2, subject to offset by the Company for any of the previous owners’ indemnification obligations in connection with the acquisition. Such cash holdback was paid in full during the year ended December 31, 2021. Concurrent with the closing of the acquisition, the Company made a cash payment of $6.9 million to repay S2’s debt, which was part of the acquisition-date cash payments included in the purchase consideration. In connection with the acquisition, the Company entered into compensation arrangements for stock-based and cash awards with a value totaling $20.3 million, of which $1.4 million was recognized as total compensation expense during the three months ended March 31, 2021. The Company recorded an additional $0.8 million of compensation expense during the three months ended March 31, 2022. The remaining compensation amount of $2.4 million is being recognized over a future weighted-average period of 0.8 years subject to the recipients’ continued service with the Company. The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands): Prepaid expenses and other current assets $ 6 Developed technology 5,600 Goodwill 13,084 Total assets acquired 18,690 Accrued expenses and other current liabilities (208) Other noncurrent liabilities (782) Total purchase price $ 17,700 A note payable of $0.2 million, included in accrued expenses and other current liabilities in the table above, assumed on the acquisition date, was paid off during the fiscal year ended December 31, 2020. The acquired assets and assumed liabilities were recorded at their estimated fair values. The estimated useful life for the acquired developed technology is two years. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is expected to be deductible for tax purposes. Goodwill is primarily attributable to the assembled workforce as well as the anticipated synergies from the integration of S2's technology with the Company's technology. A purchase accounting adjustment of $0.8 million to revise purchase consideration and goodwill was made during the fiscal year ended December 31, 2020. This acquisition did not have a material impact on the Company’s condensed consolidated financial statements; therefore, historical and pro forma disclosures have not been presented. |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information The Company’s chief operating decision maker (CODM) is its CEO, President and COO, and CFO. Collectively, the CODM reviews financial information presented on a 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 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: March 31, 2022 December 31, 2021 (in thousands) United States $ 132,428 $ 120,357 Rest of the world 70,004 63,379 Total property and equipment, net $ 202,432 $ 183,736 No single country other than the United States accounted for more than 10% of total property and equipment, net as of March 31, 2022 and December 31, 2021. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn February 14, 2022, the Company signed an agreement to acquire Area 1 Security, Inc., which has developed cloud-native email security technology, for approximately $162.0 million, with 40% of such consideration payable in the Company's Class A common stock and the remainder in cash. The Company closed the acquisition on April 1, 2022. The purchase accounting for this acquisition is in progress.On February 14, 2022, the Company's Board of Directors and Compensation Committee granted to our executive officers (other than the Co-Founders) and certain other key employees 10-year performance-based stock options that vest and becomes exercisable only if the Company achieves certain stock price milestones and the employee continues to provide service to the Company through the applicable vesting dates. These stock option awards were granted under the 2019 Plan and consist of 10-year options to purchase an aggregate of 4,915,000 shares of the Company’s Class A common stock. The exercise price per share subject to these stock options is $105.56, which was the closing sales price of the Company’s Class A common stock on February 14, 2022. At the time of grant, the terms of these stock options provided that such awards shall automatically forfeit if the Company's Disinterested Stockholders failed to approve the Performance Awards. On April 20, 2022, the Company's Board of Directors and Compensation Committee removed this contingency, resulting in an accounting grant date under ASC 718. While the Company is currently finalizing its accounting assessment for these stock option awards, it currently anticipates that these awards will result in stock-based compensation expense of approximately $300.0 million recognized over a weighted average period of approximately 5.0 years. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying interim condensed consolidated financial statements and accompanying notes have been prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP) and applicable regulations of the Securities and Exchange Commission (the SEC) regarding interim financial reporting, and include the accounts of the Company and its wholly-owned subsidiaries. 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2021 . |
Principles of Consolidation | Principles of ConsolidationAll intercompany balances and transactions have been eliminated in consolidation. |
Fiscal Period | The Company’s fiscal year ends on December 31. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the 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, allowance for doubtful accounts, 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, the assessment of recoverability of intangible assets and their estimated useful lives, useful lives of property and equipment, liability and equity allocation of convertible senior notes, the determination of the incremental borrowing rate used for operating lease liabilities, 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. Due to the COVID-19 pandemic, there is ongoing uncertainty and significant disruption in the global economy and financial markets. The |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Debt—Debt with Conversion and Other Options (ASC 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (ASC 815-40) . The FASB issued this ASU to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. This ASU removes the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. Convertible instruments that continue to be subject to separation models are (1) those with conversion options that are required to be accounted for as bifurcated derivatives and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The ASU also requires the if-converted method to be applied for all convertible instruments when calculating earnings per share. For public business entities, these amendments are effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020. The Company adopted ASU 2020-06 effective January 1, 2022 using the modified retrospective method and therefore financial information for periods before January 1, 2022 were not impacted. Upon adoption of ASU 2020-06, the Company is no longer recording the conversion feature of its 0.75% Convertible Senior Notes due 2025 (the 2025 Notes) and its 0.00% Convertible Senior Notes due 2026 (the 2026 Notes and together with the 2025 Notes, the Notes) in equity. Instead, the Company combined the previously separated equity component with the liability component, which together is now classified as debt, thereby eliminating the subsequent amortization of the debt discount as interest expense. Similarly, the portion of issuance costs previously allocated to equity was reclassified to debt and amortized as interest expense. Adoption of ASU 2020-06 resulted in an increase in the carrying value of the Notes by approximately $288.9 million, of which $4.4 million is classified as a current portion of convertible senior notes, net, to reflect the full principal amount of the Notes outstanding, net of unamortized debt discount and issuance costs, a decrease in additional paid-in capital of approximately $318.8 million and temporary equity, convertible senior notes of approximately $4.4 million to remove the equity component separately recorded for the conversion option associated with the Notes and its allocated issuance costs, and a cumulative-effect adjustment of approximately $34.3 million to the beginning balance of accumulated deficit as of January 1, 2022. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC Topic 606, Revenue from Contracts with Customers . Historically, such assets and liabilities are recognized by the acquirer at fair value in accordance with Topic 805.The ASU is effective for interim and annual periods beginning after December 15, 2022, on a prospective basis, with early adoption permitted. The Company early adopted this standard effective January 1, 2022, and such adoption did not have a material impact on its condensed consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 use the Company’s products: Three Months Ended March 31, 2022 2021 (in thousands) Amount Percentage Amount Percentage United States $ 111,350 53 % $ 71,222 52 % Europe, Middle East, and Africa 55,792 26 % 35,532 26 % Asia Pacific 29,925 14 % 22,879 16 % Other 15,100 7 % 8,422 6 % Total $ 212,167 100 % $ 138,055 100 % The following table summarizes the revenue by type of customer: Three Months Ended March 31, 2022 2021 (in thousands) Amount Percentage Amount Percentage Channel partners $ 24,356 11 % $ 15,362 11 % Direct customers 187,811 89 % 122,693 89 % Total $ 212,167 100 % $ 138,055 100 % |
Schedule of Deferred Contract Acquisition Costs | The following table summarizes the activity of the deferred contract acquisition costs: Three Months Ended March 31, 2022 2021 (in thousands) Beginning balance $ 70,320 $ 44,176 Capitalization of contract acquisition costs 15,608 10,866 Amortization of deferred contract acquisition costs (9,662) (6,060) Ending balance $ 76,266 $ 48,982 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 short-term, restricted cash, or available-for-sale securities as of March 31, 2022 and December 31, 2021. (in thousands) Reported as: March 31, 2022 Amortized Unrealized Unrealized Fair Value Cash & Available-for-sale securities Restricted Cash $ 102,372 $ — $ — $ 102,372 $ 99,885 $ — $ 2,487 Level I: Money market funds 36,767 — — 36,767 30,798 — 5,969 Level II: Corporate bonds 214,056 2 (1,661) 212,397 — 212,397 — U.S. treasury securities 1,041,647 — (11,009) 1,030,638 — 1,030,638 — Commercial paper 351,522 — — 351,522 21,293 330,229 — Subtotal 1,607,225 2 (12,670) 1,594,557 21,293 1,573,264 — Total assets measured at fair value on a recurring basis $ 1,746,364 $ 2 $ (12,670) $ 1,733,696 $ 151,976 $ 1,573,264 $ 8,456 (in thousands) Reported as: December 31, 2021 Amortized Unrealized Unrealized Fair Cash & Available-for-sale securities Restricted Cash $ 64,542 $ — $ — $ 64,542 $ 64,021 $ — $ 521 Level I: Money market funds 253,075 — — 253,075 246,415 — 6,660 Level II: Corporate bonds 202,774 16 (289) 202,501 3,341 199,160 — U.S. treasury securities 960,278 2 (2,298) 957,982 — 957,982 — Commercial paper 350,924 — — 350,924 — 350,924 — Subtotal 1,513,976 18 (2,587) 1,511,407 3,341 1,508,066 — Total assets measured at fair value on a recurring basis $ 1,831,593 $ 18 $ (2,587) $ 1,829,024 $ 313,777 $ 1,508,066 $ 7,181 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following: March 31, 2022 December 31, 2021 (in thousands) Property and equipment: Servers—network infrastructure $ 176,105 $ 151,462 Construction in progress 36,564 41,424 Capitalized internal-use software 68,892 63,331 Office and computer equipment 29,329 24,451 Office furniture 7,095 5,927 Software 5,052 4,032 Leasehold improvements 16,790 12,892 Asset retirement obligation 827 430 Gross property and equipment 340,654 303,949 Less accumulated depreciation and amortization (138,222) (120,213) Total property and equipment, net $ 202,432 $ 183,736 |
Schedule of Acquired Intangible Assets, Net | Acquired intangible assets, net consisted of the following: March 31, 2022 Gross Carrying Accumulated Net Book (in thousands) Developed technology $ 10,100 $ 6,254 $ 3,846 Total acquired intangible assets, net $ 10,100 $ 6,254 $ 3,846 December 31, 2021 Gross Carrying Accumulated Net Book (in thousands) Developed technology $ 7,000 $ 5,746 $ 1,254 Total acquired intangible assets, net $ 7,000 $ 5,746 $ 1,254 |
Schedule of Estimated Future Amortization Expense of Acquired Intangible Assets | As of March 31, 2022, the estimated future amortization expense of acquired intangible assets was as follows: Estimated (in thousands) Year ending December 31, 2022 (remaining nine months) $ 1,687 2023 2,103 2024 56 Total $ 3,846 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of Lease Costs | The components of lease cost related to the Company's operating leases included in the condensed consolidated statements of operations were as follows: Three Months Ended March 31, 2022 2021 (in thousands) Operating lease cost $ 8,610 $ 5,497 Sublease income — (747) Total lease cost $ 8,610 $ 4,750 |
Schedule of Lease Liability Maturities | Maturities of the operating lease liabilities as of March 31, 2022 are as follows: March 31, 2022 (in thousands) 2022 (remaining nine months) $ 23,052 2023 29,615 2024 27,519 2025 20,869 2026 18,383 Thereafter 39,327 Total lease payments $ 158,765 Less: Imputed interest $ (16,841) Total operating lease liabilities $ 141,924 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Debt | The net carrying amounts of the Notes were as follows: March 31, 2022 December 31, 2021 2026 Notes 2025 Notes 2026 Notes 2025 Notes (in thousands) Principal $ 1,293,750 $ 158,429 $ 1,293,750 $ 175,000 Unamortized debt discount (1) — — (248,179) (45,382) Unamortized debt issuance costs (17,316) (2,158) (14,541) (1,654) Carrying amount, net $ 1,276,434 $ 156,271 $ 1,031,030 $ 127,964 (1) The carrying value of the equity components of the 2025 Notes and 2026 Notes as of December 31, 2021 was eliminated upon the adoption of ASU 2020-06. Refer to Note 2 to these condensed consolidated financial statements. |
Schedule of Interest Expense | The following table sets forth total interest expense recognized related to the Notes: Three Months Ended March 31, 2022 2021 2026 Notes 2025 Notes 2026 Notes 2025 Notes (in thousands) Coupon interest expense $ — $ 310 $ — $ 1,078 Amortization of debt discount (1) — — — 8,568 Amortization of debt issuance costs 990 180 — 403 Total $ 990 $ 490 $ — $ 10,049 (1) As a result of the adoption of ASU 2020-06 on January 1, 2022, there is no debt discount associated with either the 2025 Notes or the 2026 Notes. Refer to Note 2 to these condensed consolidated financial statements. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Purchase Commitments | 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 March 31, 2022. For the lease components of co-location agreements, refer to Note 6 to these condensed consolidated financial statements. Payments Due by Period as of March 31, 2022 Total 2022 (remaining nine months) 2023 2024 2025 2026 Thereafter (in thousands) Non-cancelable: Open purchase agreements (1) $ 59,080 $ 24,417 $ 17,042 $ 7,678 $ 2,570 $ 2,274 $ 5,099 Bandwidth and other co-location related commitments (2) 115,708 30,413 31,070 21,287 13,785 9,405 9,748 Other commitments (3) 1,275 — 1,275 — — — — Total $ 176,063 $ 54,830 $ 49,387 $ 28,965 $ 16,355 $ 11,679 $ 14,847 (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 March 31, 2022 as the Company had not yet received the related services. (2) Long-term commitments for bandwidth usage and other co-location related commitments 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 March 31, 2022. (3) Indemnity holdback consideration associated with the Vectrix acquisition. For further details refer to Note 13 to these condensed consolidated financial statements. |
Common Stock (Tables)
Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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: March 31, 2022 December 31, 2021 (in thousands) 2025 Notes 5,503 6,078 2026 Notes 10,311 10,311 Stock options issued and outstanding 12,743 13,603 Remaining shares available for issuance under the 2019 Plan 45,931 30,761 Outstanding and unsettled restricted stock units 7,437 7,417 Shares available for issuance under the Employee Stock Purchase Plan 11,293 8,056 Total shares of common stock reserved 93,218 76,226 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Awards | The following table summarizes the stock options activity under the 2010 Plan and 2019 Plan for the three months ended March 31, 2022: Stock Options Outstanding (in thousands, except year and per share data) Shares Subject to Options Outstanding Weighted- Average Exercise Price per Option Weighted- Average Remaining Contractual Terms (in years) Aggregate Intrinsic Value Balances as of December 31, 2021 13,603 $ 12.47 6.0 $ 1,726,440 Options granted — $ — Options exercised (857) $ 3.49 $ 87,101 Options canceled/forfeited/expired (3) $ 2.77 Balances as of March 31, 2022 12,743 $ 15.13 5.75 $ 1,437,112 Vested and expected to vest as of March 31, 2022 12,739 $ 4.91 5.75 $ 1,436,612 Exercisable as of March 31, 2022 11,793 $ 2.62 5.56 $ 1,380,741 |
Schedule of Restricted Stock Units Activity | RSU and restricted stock activity for the three months ended March 31, 2022 was as follows: Restricted Stock and RSUs Weighted-Average (in thousands, except per share data) Unvested and outstanding as of December 31, 2021 7,456 $ 47.36 Granted - RSUs 863 $ 102.25 Granted - Restricted stock 52 $ 100.29 Vested - RSUs (709) $ 31.63 Vested - Restricted stock (655) $ 100.29 Forfeited (173) $ 48.17 Unvested as of March 31, 2022 6,834 $ 55.45 Vested and not yet released — $ — Outstanding as of March 31, 2022 6,834 $ 55.45 |
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: Three Months ended March 31, 2022 2021 Expected term (in years) 0.5 0.5 Risk-free interest rate 0.1 % 0.1 % Expected volatility 44.0 % 59.7 % Dividend yield — % — % |
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 March 31, 2022 2021 (in thousands) Cost of revenue $ 1,078 $ 414 Sales and marketing 8,919 5,645 Research and development 18,829 8,364 General and administrative 5,139 3,615 Total stock-based compensation expense $ 33,965 $ 18,038 |
Net Loss per Share Attributab_2
Net Loss per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 2021 Class A Class B Class A Class B (in thousands, except per share data) Net loss attributable to common stockholders $ (35,791) $ (5,590) $ (32,889) $ (7,074) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 279,658 43,676 251,793 54,154 Net loss per share attributable to common stockholders, basic and diluted $ (0.13) $ (0.13) $ (0.13) $ (0.13) |
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: March 31, 2022 2021 (in thousands) 2025 Notes 4,233 15,363 2026 Notes 6,762 — Shares subject to repurchase 1,783 3,390 Unexercised stock options 12,743 16,833 Unvested restricted stock and RSUs 7,437 8,447 Shares issuable pursuant to the ESPP 61 132 Total 33,019 44,165 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands): Developed technology $ 3,100 Goodwill 4,951 Total assets acquired 8,051 Accounts Payable (20) Other noncurrent liabilities (419) Total purchase price $ 7,612 The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands): Developed technology $ 1,400 Goodwill 6,365 Total assets acquired 7,765 Accrued compensation (228) Accrued expenses and other current liabilities (43) Other noncurrent liabilities (322) Total purchase price $ 7,172 The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands): Prepaid expenses and other current assets $ 6 Developed technology 5,600 Goodwill 13,084 Total assets acquired 18,690 Accrued expenses and other current liabilities (208) Other noncurrent liabilities (782) Total purchase price $ 17,700 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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: March 31, 2022 December 31, 2021 (in thousands) United States $ 132,428 $ 120,357 Rest of the world 70,004 63,379 Total property and equipment, net $ 202,432 $ 183,736 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Aug. 31, 2021 | May 31, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Current portion of convertible senior notes, net | $ 0 | $ 12,117 | |||
Decrease in additional paid-in capital | (1,215,790) | (1,494,512) | |||
Accumulated deficit | $ (687,891) | $ (680,829) | |||
2025 Notes | Convertible Debt | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Interest rate | 0.75% | 0.75% | |||
2026 Notes | Convertible Debt | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Interest rate | 0.00% | 0.00% | |||
Cumulative Effect, Period of Adoption, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Accumulated deficit | $ 34,300 | ||||
Accounting Standards Update 2020-06 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Convertible debt | 288,900 | ||||
Accounting Standards Update 2020-06 | Cumulative Effect, Period of Adoption, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Current portion of convertible senior notes, net | 4,400 | ||||
Decrease in additional paid-in capital | $ 318,800 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 212,167 | $ 138,055 |
Geographic Concentration Risk | Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue | 100.00% | 100.00% |
Sales Channel Concentration Risk | Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue | 100.00% | 100.00% |
Channel partners | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 24,356 | $ 15,362 |
Channel partners | Sales Channel Concentration Risk | Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue | 11.00% | 11.00% |
Direct customers | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 187,811 | $ 122,693 |
Direct customers | Sales Channel Concentration Risk | Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue | 89.00% | 89.00% |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 111,350 | $ 71,222 |
United States | Geographic Concentration Risk | Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue | 53.00% | 52.00% |
Europe, Middle East, and Africa | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 55,792 | $ 35,532 |
Europe, Middle East, and Africa | Geographic Concentration Risk | Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue | 26.00% | 26.00% |
Asia Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 29,925 | $ 22,879 |
Asia Pacific | Geographic Concentration Risk | Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue | 14.00% | 16.00% |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 15,100 | $ 8,422 |
Other | Geographic Concentration Risk | Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of Revenue | 7.00% | 6.00% |
Revenue - Narratives (Details)
Revenue - Narratives (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized | $ 63,900,000 | $ 33,900,000 |
Impairment loss | $ 0 | $ 0 |
Revenue - Deferred Contract Acq
Revenue - Deferred Contract Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Capitalized Contract Cost [Roll Forward] | ||
Beginning balance | $ 70,320 | $ 44,176 |
Capitalization of contract acquisition costs | 15,608 | 10,866 |
Amortization of deferred contract acquisition costs | (9,662) | (6,060) |
Ending balance | $ 76,266 | $ 48,982 |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligations (Details) $ in Millions | Mar. 31, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 688.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percent | 76.00% |
Remaining performance obligation, expected timing of satisfaction | 12 months |
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 ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | $ 151,976,000 | $ 313,777,000 |
Amortized Cost | 1,746,364,000 | 1,831,593,000 |
Unrealized Gain | 2,000 | 18,000 |
Unrealized (Loss) | (12,670,000) | (2,587,000) |
Fair Value | 1,733,696,000 | 1,829,024,000 |
Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 102,372,000 | 64,542,000 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 102,372,000 | 64,542,000 |
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 | 36,767,000 | 253,075,000 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 36,767,000 | 253,075,000 |
Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 1,607,225,000 | 1,513,976,000 |
Unrealized Gain | 2,000 | 18,000 |
Unrealized (Loss) | (12,670,000) | (2,587,000) |
Fair Value | 1,594,557,000 | 1,511,407,000 |
Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 214,056,000 | 202,774,000 |
Unrealized Gain | 2,000 | 16,000 |
Unrealized (Loss) | (1,661,000) | (289,000) |
Fair Value | 212,397,000 | 202,501,000 |
Level II | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 1,041,647,000 | 960,278,000 |
Unrealized Gain | 0 | 2,000 |
Unrealized (Loss) | (11,009,000) | (2,298,000) |
Fair Value | 1,030,638,000 | 957,982,000 |
Level II | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 351,522,000 | 350,924,000 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 351,522,000 | 350,924,000 |
Cash & Cash Equivalents | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets measured at fair value on a recurring basis | 151,976,000 | 313,777,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 99,885,000 | 64,021,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Level I | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 30,798,000 | 246,415,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 21,293,000 | 3,341,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 3,341,000 |
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 | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 21,293,000 | 0 |
Available-for-sale securities | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 1,573,264,000 | 1,508,066,000 |
Available-for-sale securities | Fair Value, Recurring | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Available-for-sale securities | Fair Value, Recurring | Level I | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Available-for-sale securities | Fair Value, Recurring | Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 1,573,264,000 | 1,508,066,000 |
Available-for-sale securities | Fair Value, Recurring | Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 212,397,000 | 199,160,000 |
Available-for-sale securities | Fair Value, Recurring | Level II | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 1,030,638,000 | 957,982,000 |
Available-for-sale securities | Fair Value, Recurring | Level II | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 330,229,000 | 350,924,000 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets measured at fair value on a recurring basis | 8,456,000 | 7,181,000 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 2,487,000 | 521,000 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | Level I | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 5,969,000 | 6,660,000 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | Level II | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Restricted Cash (Current and Non-Current) | 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 - Narratives (Details) - USD ($) | Mar. 31, 2022 | Jan. 14, 2022 | Dec. 31, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Restricted cash | $ 8,500,000 | ||
Amortized cost of available-for-sale investments with maturities less than one year | 1,311,800,000 | $ 966,300,000 | |
Amortized cost of available-for-sale investments with maturities greater than one year | 274,100,000 | 544,400,000 | |
Net unrealized gains (loss) on investments, net of tax | (12,700,000) | 2,700,000 | |
Vectrix, Inc. | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Consideration held back | $ 1,300,000 | ||
Convertible Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument, fair value | 536,000,000 | ||
Convertible Debt | 2026 Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument, fair value | 1,324,200,000 | ||
Money market funds | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Unrealized gain | 0 | 0 | |
Unrealized loss | 0 | $ 0 | |
Standby Letters of Credit | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Restricted cash | $ 6,700,000 |
Balance Sheet Components - Acco
Balance Sheet Components - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Allowance for doubtful accounts | $ 3,200 | $ 2,600 | |
Provision for bad debt | 968 | $ 1,470 | |
Write-off of uncollectible accounts receivable | 500 | 1,000 | |
Provision for bad debt expense | $ 1,000 | $ 1,400 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | $ 340,654 | $ 303,949 | |
Less accumulated depreciation and amortization | (138,222) | (120,213) | |
Total property and equipment, net | 202,432 | 183,736 | |
Depreciation and amortization expense | 18,900 | $ 14,000 | |
Servers—network infrastructure | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 176,105 | 151,462 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 36,564 | 41,424 | |
Capitalized internal-use software | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 68,892 | 63,331 | |
Office and computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 29,329 | 24,451 | |
Office furniture | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 7,095 | 5,927 | |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 5,052 | 4,032 | |
Depreciation and amortization expense | 4,800 | $ 4,200 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 16,790 | 12,892 | |
Asset retirement obligation | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | $ 827 | $ 430 |
Balance Sheet Components - Good
Balance Sheet Components - Goodwill (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Jan. 14, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Goodwill | $ 28,481,000 | $ 23,530,000 | ||
Goodwill, impairment loss | 0 | $ 0 | ||
Vectrix, Inc. | ||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Goodwill | $ 4,951,000 | |||
Business Acquisition [Line Items] | ||||
Goodwill acquired during period | $ 5,000,000 |
Balance Sheet Components - Acqu
Balance Sheet Components - Acquired Intangible Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 10,100 | $ 7,000 | |
Accumulated Amortization | 6,254 | 5,746 | |
Net Book Value | 3,846 | 1,254 | |
Amortization of acquired intangible assets | 500 | $ 700 | |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 10,100 | 7,000 | |
Accumulated Amortization | 6,254 | 5,746 | |
Net Book Value | $ 3,846 | $ 1,254 |
Balance Sheet Components - Esti
Balance Sheet Components - Estimated Future Amortization Expense of Acquired Intangible Assets, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
2022 (remaining nine months) | $ 1,687 | |
2023 | 2,103 | |
2024 | 56 | |
Net Book Value | $ 3,846 | $ 1,254 |
Leases - Narratives (Details)
Leases - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Remaining lease term (up to) | 6 years 9 months 18 days | |
Sublease income | $ 0 | $ 747 |
Lease not yet commenced, undiscounted amount | $ 42,000 | |
Lease not yet commenced, term of contract | 4 years 7 months 6 days | |
Weighted average remaining lease term | 5 years 10 months 24 days | |
Operating lease, weighted average discount rate, percent | 3.50% | |
Co-location Asset Lease | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term (up to) | 9 years 3 months 18 days |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 8,610 | $ 5,497 |
Sublease income | 0 | (747) |
Total lease cost | $ 8,610 | $ 4,750 |
Leases - Lease Liability Maturi
Leases - Lease Liability Maturities (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Leases [Abstract] | |
2022 (remaining nine months) | $ 23,052 |
2023 | 29,615 |
2024 | 27,519 |
2025 | 20,869 |
2026 | 18,383 |
Thereafter | 39,327 |
Total lease payments | 158,765 |
Less: Imputed interest | (16,841) |
Total operating lease liabilities | $ 141,924 |
Debt - 2026 Convertible Senior
Debt - 2026 Convertible Senior Notes (Details) | 1 Months Ended | 3 Months Ended |
Aug. 31, 2021USD ($)day$ / shares | Mar. 31, 2022$ / shares | |
Debt Instrument [Line Items] | ||
Closing share price (in dollars per share) | $ / shares | $ 119.70 | |
2026 Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Debt principal amount | $ | $ 1,293,800,000 | |
Face amount, additional principal issuable | $ | 168,800,000 | |
Gross proceeds from issuance of convertible senior notes | $ | $ 1,274,000,000 | |
Interest rate | 0.00% | 0.00% |
Convertible debt, conversion ratio | 0.0052263 | |
Conversion price (in dollars per share) | $ / shares | $ 191.34 | |
Redemption price, percentage | 100.00% | |
Minimum redeemable face amount | $ | $ 100,000,000 | |
Closing share price (in dollars per share) | $ / shares | $ 119.70 | |
Remaining life, convertible debt | 53 months | |
2026 Notes | Convertible Debt | Last Reported Stock Price At Lease 130% Of The Debt Conversion Price | ||
Debt Instrument [Line Items] | ||
Conversion requirement, threshold trading days (at least) | day | 20 | |
Conversion requirement, threshold consecutive trading days | day | 30 | |
Conversion requirement, threshold percentage of stock price trigger (at least) | 130.00% | |
2026 Notes | Convertible Debt | Principal Amount Less Than 98% of the Product | ||
Debt Instrument [Line Items] | ||
Conversion requirement, threshold trading days (at least) | day | 5 | |
Conversion requirement, threshold consecutive trading days | day | 5 | |
Conversion requirement, threshold percentage of stock price trigger (at least) | 98.00% |
Debt - 2026 Capped Call Transac
Debt - 2026 Capped Call Transactions (Details) - 2026 Notes - Convertible Debt - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Aug. 30, 2021 | Aug. 31, 2021 |
Debt Instrument [Line Items] | ||
Purchases of capped calls related to convertible senior notes | $ 86.3 | |
Class A common stock | ||
Debt Instrument [Line Items] | ||
Shares covered by capped calls (in shares) | 6.8 | |
Capped Calls | Long | Class A common stock | ||
Debt Instrument [Line Items] | ||
Strike price (in dollars per share) | $ 191.34 | |
Capped call, initial cap price (in dollars per share) | $ 250.94 |
Debt - 2025 Convertible Senior
Debt - 2025 Convertible Senior Notes (Details) | Aug. 13, 2021USD ($)shares | May 31, 2020USD ($)day$ / shares | Mar. 31, 2022USD ($)$ / sharesshares | Dec. 31, 2021USD ($) |
Debt Instrument [Line Items] | ||||
Closing share price (in dollars per share) | $ / shares | $ 119.70 | |||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, fair value | $ 536,000,000 | |||
2025 Notes | ||||
Debt Instrument [Line Items] | ||||
Gross proceeds from issuance of convertible senior notes | $ 562,500,000 | |||
Conversion price (in dollars per share) | $ / shares | $ 37.43 | |||
2025 Notes | Last Reported Stock Price At Lease 130% Of The Debt Conversion Price | ||||
Debt Instrument [Line Items] | ||||
Conversion requirement, threshold trading days (at least) | day | 20 | |||
Conversion requirement, threshold consecutive trading days | day | 30 | |||
Conversion requirement, threshold percentage of stock price trigger (at least) | 130.00% | |||
2025 Notes | Principal Amount Less Than 98% of the Product | ||||
Debt Instrument [Line Items] | ||||
Conversion requirement, threshold trading days (at least) | day | 5 | |||
Conversion requirement, threshold consecutive trading days | day | 5 | |||
Conversion requirement, threshold percentage of stock price trigger (at least) | 98.00% | |||
2025 Notes | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Debt principal amount | $ 575,000,000 | |||
Face amount, additional principal issuable | $ 75,000,000 | |||
Principal | $ 158,429,000 | $ 175,000,000 | ||
Interest rate | 0.75% | 0.75% | ||
Convertible debt, conversion ratio | 0.0267187 | |||
Redemption price, percentage | 100.00% | |||
Issuance of common stock for exchange of convertible senior notes | $ 1,321,000,000 | |||
Repurchased face amount | 400,000,000 | |||
Repayments of convertible debt | 400,700,000 | |||
Loss on extinguishment of debt | 72,200,000 | |||
Debt instrument, fair value | 355,300,000 | |||
Carrying amount, net | $ 283,100,000 | $ 156,271,000 | 127,964,000 | |
Effective interest rate | 4.08% | |||
Equity component of convertible debt | $ 965,700,000 | |||
Converted value in excess of principal | $ 348,300,000 | |||
Remaining life, convertible debt | 38 months | |||
2025 Notes | Convertible Debt | Class A common stock | ||||
Debt Instrument [Line Items] | ||||
Number of shares issued upon debt conversion | shares | 7,600,000 | 298,909,000,000 | ||
2025 Notes | Convertible Debt | Certain Holders Conversion | ||||
Debt Instrument [Line Items] | ||||
Issuance of common stock for exchange of convertible senior notes | $ 16,600,000 |
Debt - 2025 Capped Call Transac
Debt - 2025 Capped Call Transactions (Details) - 2025 Notes - Convertible Debt - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Aug. 13, 2021 | May 31, 2020 |
Debt Instrument [Line Items] | ||
Purchases of capped calls related to convertible senior notes | $ 67.3 | |
Capped Calls | Long | Class A common stock | ||
Debt Instrument [Line Items] | ||
Strike price (in dollars per share) | $ 37.43 | |
Capped call, initial cap price (in dollars per share) | $ 57.58 | |
Shares covered by capped calls (in shares) | 15.4 |
Debt - Schedule of Net Carrying
Debt - Schedule of Net Carrying Amount of Notes (Details) - Convertible Debt - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Aug. 13, 2021 |
2026 Notes | |||
Debt Instrument [Line Items] | |||
Principal | $ 1,293,750 | $ 1,293,750 | |
Unamortized debt discount | 0 | (248,179) | |
Unamortized debt issuance costs | (17,316) | (14,541) | |
Carrying amount, net | 1,276,434 | 1,031,030 | |
2025 Notes | |||
Debt Instrument [Line Items] | |||
Principal | 158,429 | 175,000 | |
Unamortized debt discount | 0 | (45,382) | |
Unamortized debt issuance costs | (2,158) | (1,654) | |
Carrying amount, net | $ 156,271 | $ 127,964 | $ 283,100 |
Debt - Schedule of Interest Com
Debt - Schedule of Interest Components (Details) - Convertible Debt - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
2026 Notes | ||
Debt Instrument [Line Items] | ||
Coupon interest expense | $ 0 | $ 0 |
Amortization of debt discount | 0 | 0 |
Amortization of debt issuance costs | 990 | 0 |
Total | 990 | 0 |
2025 Notes | ||
Debt Instrument [Line Items] | ||
Coupon interest expense | 310 | 1,078 |
Amortization of debt discount | 0 | 8,568 |
Amortization of debt issuance costs | 180 | 403 |
Total | $ 490 | $ 10,049 |
Commitments and Contingencies -
Commitments and Contingencies - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Cost and expenses related to bandwidth and other co-location commitments | $ 25.8 | $ 16.4 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Purchase Commitments (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Open purchase agreements | |
Total | $ 59,080 |
2022 (remaining nine months) | 24,417 |
2023 | 17,042 |
2024 | 7,678 |
2025 | 2,570 |
2026 | 2,274 |
Thereafter | 5,099 |
Bandwidth and other co-location related commitments | |
Total | 115,708 |
2022 (remaining nine months) | 30,413 |
2023 | 31,070 |
2024 | 21,287 |
2025 | 13,785 |
2026 | 9,405 |
Thereafter | 9,748 |
Other commitments | |
Total | 1,275 |
2022 (remaining nine moths) | 0 |
2023 | 1,275 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
Thereafter | 0 |
Total | |
Total | 176,063 |
2022 (remaining nine months) | 54,830 |
2023 | 49,387 |
2024 | 28,965 |
2025 | 16,355 |
2026 | 11,679 |
Thereafter | $ 14,847 |
Common Stock - Narratives (Deta
Common Stock - Narratives (Details) | Mar. 31, 2022vote$ / sharesshares | Dec. 31, 2021$ / 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 | 2,250,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 280,412,116 | 277,707,635 |
Common stock, shares outstanding (in shares) | 280,412,116 | 277,707,635 |
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 | 315,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 45,127,746 | 45,904,227 |
Common stock, shares outstanding (in shares) | 45,127,746 | 45,904,227 |
Common Stock - Schedule of Comm
Common Stock - Schedule of Common Stock Reserved for Future Issuance (Details) - shares shares in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 93,218 | 76,226 |
2019 Plan | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 45,931 | 30,761 |
Stock Options | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 12,743 | 13,603 |
Outstanding and unsettled restricted stock units | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 7,437 | 7,417 |
Shares available for issuance under the Employee Stock Purchase Plan | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 11,293 | 8,056 |
Convertible Debt | 2025 Notes | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 5,503 | 6,078 |
Convertible Debt | 2026 Notes | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 10,311 | 10,311 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) | Feb. 14, 2022 | Jan. 14, 2022 | Oct. 15, 2021 | Dec. 31, 2021 | Jan. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock options granted (in shares) | 0 | 0 | |||||||
Total grant date fair value for vested options | $ 2,500,000 | $ 5,800,000 | |||||||
Stock options exercisable, weighted-average exercise price (in dollars per share) | $ 2.62 | ||||||||
Stock-based compensation expense | $ 33,965,000 | 18,038,000 | |||||||
S2 Systems Corporation | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Issuance of common stock in connection with acquisition (in shares) | 948,000 | ||||||||
2019 Equity Incentive Plan | Chief Executive Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Requisite service period of awards | 10 years | ||||||||
2019 Equity Incentive Plan | Chief Operating Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Requisite service period of awards | 10 years | ||||||||
2019 Equity Incentive Plan | President | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Requisite service period of awards | 10 years | ||||||||
2019 Equity Incentive Plan | Class A common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized for issuance (in shares) | 66,661,953 | ||||||||
Number of new shares authorized for issuance (in shares) | 29,335,000 | ||||||||
Number of additional shares authorized for issuance (in shares) | 37,326,953 | ||||||||
Stock options granted (in shares) | 4,915,000 | ||||||||
Number of shares available for issuance (in shares) | 3,960,000 | 3,960,000 | |||||||
Stock options exercisable, weighted-average exercise price (in dollars per share) | $ 136.81 | $ 136.81 | |||||||
2019 Equity Incentive Plan | Class A and Class B Common Stock | |||||||||
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% | ||||||||
Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 10 years | 4 years | |||||||
Expiration period | 10 years | ||||||||
Unvested options exercisable (in shares) | 6,229,524 | 5,303,657 | 6,229,524 | ||||||
Options unrecognized stock-based compensation expense | $ 20,100,000 | $ 17,500,000 | $ 20,100,000 | ||||||
Weighted-average remaining vesting period | 2 years 1 month 6 days | 2 years 3 months 18 days | |||||||
Liability for early exercise of stock options | $ 4,700,000 | $ 3,900,000 | $ 4,700,000 | ||||||
Number of unvested shares expected to be repurchased (in shares) | 1,783,279 | 2,128,660 | |||||||
Stock Options | Chief Executive Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Requisite service period of awards | 10 years | ||||||||
Stock Options | Chief Operating Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Requisite service period of awards | 10 years | ||||||||
Stock Options | President | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Requisite service period of awards | 10 years | ||||||||
Stock Options | 2010 Equity Incentive Plan | Common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price of common stock, percentage of fair market value | 100.00% | ||||||||
Stock Options | 2010 Equity Incentive Plan | Class A common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise stock option awards (in shares) | 1 | ||||||||
Stock Options | 2010 Equity Incentive Plan | Class B common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise stock option awards (in shares) | 1 | ||||||||
Stock Options | 2019 Equity Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 10 years | ||||||||
Stock Options | 2019 Equity Incentive Plan | Class A common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise stock option awards (in shares) | 1 | ||||||||
Restricted Stock | Vectrix, Inc. | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 4 years | ||||||||
Issuance of common stock in connection with acquisition (in shares) | 71,000 | ||||||||
Stock-based compensation expense | $ 0 | ||||||||
Unrecognized stock-based compensation expense | 4,900,000 | ||||||||
Restricted Stock | Vectrix, Inc. | Subject to vesting | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Issuance of common stock in connection with acquisition (in shares) | 52,000 | ||||||||
Restricted Stock | Vectrix, Inc. | Tranche One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 25.00% | ||||||||
Restricted Stock | Vectrix, Inc. | Tranche Two | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 25.00% | ||||||||
Restricted Stock | Vectrix, Inc. | Tranche Three | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 25.00% | ||||||||
Restricted Stock | Vectrix, Inc. | Tranche Four | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 25.00% | ||||||||
Restricted Stock | Zaraz | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 3 years | ||||||||
Issuance of common stock in connection with acquisition (in shares) | 48,000 | ||||||||
Unrecognized stock-based compensation expense | 5,500,000 | ||||||||
Restricted Stock | Zaraz | Subject to vesting | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Issuance of common stock in connection with acquisition (in shares) | 39,000 | ||||||||
Restricted Stock | Zaraz | Tranche One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 33.33% | ||||||||
Restricted Stock | Zaraz | Tranche Two | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 33.33% | ||||||||
Restricted Stock | Zaraz | Tranche Three | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 33.33% | ||||||||
Restricted Stock | S2 Systems Corporation | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock-based compensation expense | 800,000 | 1,400,000 | |||||||
Unrecognized stock-based compensation expense | 2,400,000 | 7,400,000 | |||||||
Restricted stock issued in connection with acquisition, aggregate grant date fair value | $ 11,200,000 | 0 | |||||||
Restricted Stock | S2 Systems Corporation | Subject to vesting | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Issuance of restricted stock in connection with acquisition (in shares) | 841,000 | ||||||||
Restricted Stock | S2 Systems Corporation | Tranche One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 2 years | ||||||||
Vesting percentage | 38.90% | ||||||||
Restricted Stock | S2 Systems Corporation | Tranche Two | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 3 years | ||||||||
Vesting percentage | 38.90% | ||||||||
Restricted Stock | S2 Systems Corporation | Tranche Three | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 7.40% | ||||||||
Restricted Stock | S2 Systems Corporation | Tranche Four | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 7.40% | ||||||||
Restricted Stock | S2 Systems Corporation | Tranche Five | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 7.40% | ||||||||
Restricted Stock | S2 Systems Corporation | Over 2 years | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percentage | 77.80% | ||||||||
Restricted Stock Units (RSUs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 4 years | ||||||||
Weighted-average remaining vesting period | 3 years 3 months 18 days | 3 years 6 months | |||||||
Stock-based compensation expense | $ 35,200,000 | 13,600,000 | |||||||
Unrecognized stock-based compensation expense | $ 176,200,000 | 342,300,000 | $ 176,200,000 | ||||||
Total grant date fair value for vested shares | $ 22,400,000 | $ 9,900,000 | |||||||
Shares issuable pursuant to the ESPP | 2019 Employee Stock Purchase Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted-average remaining vesting period | 1 month 6 days | 4 months 24 days | |||||||
Unrecognized stock-based compensation expense | $ 2,600,000 | $ 800,000 | $ 2,600,000 | ||||||
Maximum ownership percentage threshold for participation | 5.00% | ||||||||
Maximum contribution percentage per employee | 10.00% | ||||||||
Shares issuable pursuant to the ESPP | 2019 Employee Stock Purchase Plan | Class A common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
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 (more than, in shares) | 1,500 | ||||||||
Maximum value of shares available for repurchase for each employee | $ 25,000 | ||||||||
Shares issuable pursuant to the ESPP | 2019 Employee Stock Purchase Plan | Class A and Class B Common Stock | |||||||||
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% |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Stock-based Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Shares Subject to Options Outstanding | |||
Stock options outstanding, beginning balance (in shares) | 13,603,000 | ||
Stock options granted (in shares) | 0 | 0 | |
Stock options exercised (in shares) | (857,000) | ||
Stock options canceled, forfeited, expired (in shares) | (3,000) | ||
Stock options outstanding, ending balance (in shares) | 12,743,000 | 13,603,000 | |
Stock options vested and expected to vest (in shares) | 12,739,000 | ||
Stock options exercisable (in shares) | 11,793,000 | ||
Weighted- Average Exercise Price per Option | |||
Stock options outstanding, weighted-average exercise price, beginning balance (in dollars per share) | $ 12.47 | ||
Stock options granted, weighted-average exercise price (in dollars per share) | 0 | ||
Stock options exercised, weighted-average exercise price (in dollars per share) | 3.49 | ||
Stock options canceled, forfeited, expired, weighted-averaged exercise price (in dollars per share) | 2.77 | ||
Stock options outstanding, weighted-average exercise price, ending balance (in dollars per share) | 15.13 | $ 12.47 | |
Stock options vested and expected to vest, weighted-average exercise price (in dollars per share) | 4.91 | ||
Stock options exercisable, weighted-average exercise price (in dollars per share) | $ 2.62 | ||
Weighted- Average Remaining Contractual Terms (in years) | |||
Stock options outstanding, weighted-average remaining contractual term | 5 years 9 months | 6 years | |
Stock options vested and expected to vest, weighted-average remaining contractual term | 5 years 9 months | ||
Stock options exercisable, weighted-average remaining contractual term | 5 years 6 months 21 days | ||
Aggregate Intrinsic Value | |||
Stock options outstanding, aggregate intrinsic value | $ 1,437,112 | $ 1,726,440 | |
Stock options exercised, aggregate intrinsic value | 87,101 | ||
Stock options vested and expected to vest, aggregate intrinsic value | 1,436,612 | ||
Stock options exercisable, aggregate intrinsic value | $ 1,380,741 |
Stock-based Compensation - Sc_2
Stock-based Compensation - Schedule of Restricted Stock Units Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Restricted Stock and Restricted Stock Units | |
Restricted Stock and RSUs | |
Unvested and outstanding, beginning balance (in shares) | shares | 7,456 |
Forfeited (in shares) | shares | (173) |
Unvested, ending balance (in shares) | shares | 6,834 |
Vested and not yet released (in shares) | shares | 0 |
Outstanding at end of period (in shares) | shares | 6,834 |
Weighted-Average Grant Date Fair Value | |
Unvested, weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 47.36 |
Forfeited (in dollars per share) | $ / shares | 48.17 |
Unvested, weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | 55.45 |
Vested and not yet released, weighted-average grant date fair value (in dollars per share) | $ / shares | 0 |
Outstanding at end of period, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 55.45 |
Restricted Stock Units (RSUs) | |
Restricted Stock and RSUs | |
Granted (in shares) | shares | 863 |
Vested (in shares) | shares | (709) |
Weighted-Average Grant Date Fair Value | |
Granted (in dollars per share) | $ / shares | $ 102.25 |
Vested (in dollars per share) | $ / shares | $ 31.63 |
Restricted Stock | |
Restricted Stock and RSUs | |
Granted (in shares) | shares | 52 |
Vested (in shares) | shares | (655) |
Weighted-Average Grant Date Fair Value | |
Granted (in dollars per share) | $ / shares | $ 100.29 |
Vested (in dollars per share) | $ / shares | $ 100.29 |
Stock-based Compensation - Sc_3
Stock-based Compensation - Schedule of Fair Value Assumptions for Employee Stock Purchase Plan (Details) - Shares available for issuance under the Employee Stock Purchase Plan | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 months | 6 months |
Risk-free interest rate | 0.10% | 0.10% |
Expected volatility | 44.00% | 59.70% |
Dividend yield | 0.00% | 0.00% |
Stock-based Compensation - Sc_4
Stock-based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 33,965 | $ 18,038 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 1,078 | 414 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 8,919 | 5,645 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 18,829 | 8,364 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 5,139 | $ 3,615 |
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 | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net loss attributable to common stockholders | $ (41,381) | $ (39,963) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 323,334 | 305,947 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 323,334 | 305,947 |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.13) | $ (0.13) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.13) | $ (0.13) |
Class A | Common stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net loss attributable to common stockholders | $ (35,791) | $ (32,889) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 279,658 | 251,793 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 279,658 | 251,793 |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.13) | $ (0.13) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.13) | $ (0.13) |
Class B | Common stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net loss attributable to common stockholders | $ (5,590) | $ (7,074) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 43,676 | 54,154 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 43,676 | 54,154 |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.13) | $ (0.13) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.13) | $ (0.13) |
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 | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
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) | 33,019 | 44,165 |
2025 Notes | ||
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) | 4,233 | 15,363 |
2026 Notes | ||
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) | 6,762 | 0 |
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) | 1,783 | 3,390 |
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) | 12,743 | 16,833 |
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) | 7,437 | 8,447 |
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) | 61 | 132 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Provision for (benefit from) income taxes | $ 374 | $ (833) |
Business Combinations - Narrati
Business Combinations - Narratives (Details) - USD ($) $ in Thousands | Jan. 14, 2022 | Oct. 15, 2021 | Jan. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||||
Cash paid for acquisitions | $ 4,380 | $ 0 | |||||
Vectrix, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred | $ 7,600 | ||||||
Cash paid for acquisitions | 4,300 | ||||||
Cash acquired | 800 | ||||||
Value of shares issued | 2,000 | ||||||
Consideration held back | $ 1,300 | ||||||
Contingent consideration, liability, period | 18 months | ||||||
Payments to settle acquiree's outstanding debt | $ 2,000 | ||||||
Compensation arrangements value | 8,000 | ||||||
Compensation arrangement with individual, compensation expense | $ 2,600 | 300 | |||||
Compensation arrangement with individual, recorded liability | $ 5,100 | ||||||
Compensation arrangement, weighted-average remaining recognition period | 3 years 9 months 18 days | ||||||
Vectrix, Inc. | Developed technology | |||||||
Business Acquisition [Line Items] | |||||||
Estimated useful life of acquired developed technology | 2 years | ||||||
Zaraz | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred | $ 7,200 | ||||||
Cash paid for acquisitions | 5,600 | ||||||
Cash acquired | 800 | ||||||
Value of shares issued | 1,600 | ||||||
Payments to settle acquiree's outstanding debt | 1,100 | ||||||
Compensation arrangements value | $ 6,500 | ||||||
Compensation arrangement with individual, compensation expense | $ 500 | $ 500 | |||||
Compensation arrangement with individual, recorded liability | $ 5,500 | ||||||
Compensation arrangement, weighted-average remaining recognition period | 2 years 6 months | ||||||
Zaraz | Developed technology | |||||||
Business Acquisition [Line Items] | |||||||
Estimated useful life of acquired developed technology | 2 years | ||||||
S2 Systems Corporation | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred | $ 17,700 | ||||||
Cash acquired | 100 | ||||||
Value of shares issued | 1,800 | ||||||
Consideration held back | $ 2,200 | ||||||
Contingent consideration, liability, period | 18 months | ||||||
Payments to settle acquiree's outstanding debt | $ 6,900 | ||||||
Compensation arrangements value | 20,300 | ||||||
Compensation arrangement with individual, compensation expense | $ 800 | $ 1,400 | |||||
Compensation arrangement with individual, recorded liability | $ 2,400 | ||||||
Compensation arrangement, weighted-average remaining recognition period | 9 months 18 days | ||||||
Cash payments to acquire businesses | $ 13,700 | ||||||
Repayments of notes payable | $ 200 | ||||||
Purchase accounting adjustment | $ 800 | ||||||
S2 Systems Corporation | Developed technology | |||||||
Business Acquisition [Line Items] | |||||||
Estimated useful life of acquired developed technology | 2 years |
Business Combinations - Schedul
Business Combinations - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jan. 14, 2022 | Dec. 31, 2021 | Oct. 15, 2021 | Jan. 31, 2020 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 28,481 | $ 23,530 | |||
Vectrix, Inc. | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 4,951 | ||||
Total assets acquired | 8,051 | ||||
Accounts Payable | (20) | ||||
Other noncurrent liabilities | (419) | ||||
Total purchase price | 7,612 | ||||
Vectrix, Inc. | Developed technology | |||||
Business Acquisition [Line Items] | |||||
Developed technology | $ 3,100 | ||||
Zaraz | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 6,365 | ||||
Total assets acquired | 7,765 | ||||
Accrued compensation | (228) | ||||
Accrued expenses and other current liabilities | (43) | ||||
Other noncurrent liabilities | (322) | ||||
Total purchase price | 7,172 | ||||
Zaraz | Developed technology | |||||
Business Acquisition [Line Items] | |||||
Developed technology | $ 1,400 | ||||
S2 Systems Corporation | |||||
Business Acquisition [Line Items] | |||||
Prepaid expenses and other current assets | $ 6 | ||||
Goodwill | 13,084 | ||||
Total assets acquired | 18,690 | ||||
Accrued expenses and other current liabilities | (208) | ||||
Other noncurrent liabilities | (782) | ||||
Total purchase price | 17,700 | ||||
S2 Systems Corporation | Developed technology | |||||
Business Acquisition [Line Items] | |||||
Developed technology | $ 5,600 |
Segment and Geographic Inform_3
Segment and Geographic Information - Narratives (Details) | 3 Months Ended |
Mar. 31, 2022segment | |
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 | Mar. 31, 2022 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 202,432 | $ 183,736 |
United States | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 132,428 | 120,357 |
Rest of the world | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 70,004 | $ 63,379 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 20, 2022 | Apr. 01, 2022 | Feb. 14, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Subsequent Event [Line Items] | ||||||
Stock options granted (in shares) | 0 | 0 | ||||
Stock options granted, weighted-average exercise price (in dollars per share) | $ 0 | |||||
Stock Options | ||||||
Subsequent Event [Line Items] | ||||||
Vesting period | 10 years | 4 years | ||||
Weighted-average remaining vesting period | 2 years 1 month 6 days | 2 years 3 months 18 days | ||||
Options unrecognized stock-based compensation expense | $ 17.5 | $ 20.1 | ||||
Stock Options | 2019 Equity Incentive Plan | ||||||
Subsequent Event [Line Items] | ||||||
Vesting period | 10 years | |||||
Class A common stock | 2019 Equity Incentive Plan | ||||||
Subsequent Event [Line Items] | ||||||
Stock options granted (in shares) | 4,915,000 | |||||
Stock options granted, weighted-average exercise price (in dollars per share) | $ 105.56 | |||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Options unrecognized stock-based compensation expense | $ 300 | |||||
Subsequent Event | Stock Options | ||||||
Subsequent Event [Line Items] | ||||||
Weighted-average remaining vesting period | 5 years | |||||
Area 1 Security, Inc | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Consideration transferred or transferrable | $ 162 | |||||
Area 1 Security, Inc | Subsequent Event | Class A common stock | ||||||
Subsequent Event [Line Items] | ||||||
Consideration payable in common stock, percentage | 40.00% |