SendGrid (SEND) 10-Q 31 Jul 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 23, 2018
Document and Entity Information
Entity Registrant Name	SendGrid, Inc.
Entity Central Index Key	1,477,425
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		46,387,368
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Revenue	$ 35,675	$ 27,012	$ 68,244	$ 51,843
Cost of revenue	8,805	7,274	17,293	13,745
Gross profit	26,870	19,738	50,951	38,098
Operating expenses:
Research and development	9,871	7,139	18,805	13,663
Selling and marketing	8,707	6,870	16,643	13,458
General and administrative	9,165	6,494	18,031	13,538
Loss on disposal of assets		2	62	2
Total operating expenses	27,743	20,505	53,541	40,661
Loss from operations	(873)	(767)	(2,590)	(2,563)
Other income (expense):
Interest income	626		1,116
Interest expense	(56)	(32)	(104)	(69)
Adjustment to redeemable preferred stock warrant liability		(544)		(518)
Other	(7)	10	(5)	16
Other income (expense)	563	(566)	1,007	(571)
Net loss before provision for income taxes	(310)	(1,333)	(1,583)	(3,134)
Net loss	$ (310)	$ (1,333)	$ (1,583)	$ (3,134)
Weighted average common shares outstanding	44,581	7,943	43,099	7,896
Net loss per share attributable to common stockholders	$ (0.01)	$ (0.17)	$ (0.04)	$ (0.40)
Comprehensive loss:
Net loss	$ (310)	$ (1,333)	$ (1,583)	$ (3,134)
Change in cumulative foreign currency translation adjustment	(6)	1	(3)	1
Comprehensive loss	$ (316)	$ (1,332)	$ (1,586)	$ (3,133)

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current Assets:
Cash and cash equivalents	$ 182,317	$ 175,496
Restricted cash	1,120
Accounts receivable - trade, net of allowance	6,103	5,765
Prepaid expenses and other current assets	5,599	9,087
Total current assets	195,139	190,348
Noncurrent Assets:
Property and equipment, net	34,249	29,192
Intangible assets, net	1,554	1,795
Other assets	322	300
Goodwill	1,648	1,648
Total noncurrent assets	37,773	32,935
Total assets	232,912	223,283
Current liabilities:
Accounts payable and accrued liabilities	9,405	13,837
Current portion of capital lease obligations	6,208	6,110
Current portion of deferred rent	1,138	328
Other current liabilities	1,273	1,575
Total current liabilities	18,024	21,850
Long-Term Obligations, Net of Current Portion:
Capital lease obligations, net of current portion	10,492	11,095
Deferred rent, net of current portion	9,561	10,054
Other long-term liabilities	532	510
Total long-term obligations, net of current portion:	20,585	21,659
Total liabilities	38,609	43,509
Commitment and contingencies (notes 5 - 12)
Stockholders’ equity:
Common stock, $0.001 par value, 250,000,000 shares authorized as of Jun. 30, 2018 and Dec. 31, 2017, 46,365,202 and 42,175,647 shares issued and outstanding as of Jun. 30, 2018 and Dec. 31, 2017, respectively	46	39
Preferred stock, $0.001 par value, 10,000,000 shares authorized as of Jun. 30, 2018 and Dec. 31, 2017. None issued or outstanding.
Additional paid-in capital	246,328	229,594
Accumulated deficit	(52,066)	(49,857)
Accumulated other comprehensive loss	(5)	(2)
Total stockholders’ equity	194,303	179,774
Total liabilities and stockholders’ equity	$ 232,912	$ 223,283

CONDENSED CONSOLIDATED BALANCE4

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
CONDENSED CONSOLIDATED BALANCE SHEETS
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	250,000,000	250,000,000
Common stock shares issued	46,365,202	42,175,647
Common stock shares outstanding	46,365,202	42,175,647
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	10,000,000	10,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net loss	$ (1,583)	$ (3,134)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	5,243	4,562
Stock-based compensation	4,640	1,381
Adjustment to redeemable preferred stock warrant liability		518
Non-cash interest expense and other	21	10
Loss on disposal of assets and restructuring of assets	221	352
Reimbursement of tenant improvements	2,434	654
Changes in operating assets and liabilities:
Accounts receivable	(332)	(803)
Prepaid expenses and other assets	891	(494)
Accounts payable and accrued liabilities	(1,673)	2,050
Other liabilities	(1,129)	26
Net cash flows from operating activities	8,733	5,122
Cash flows from investing activities:
Purchase of property and equipment	(9,288)	(3,014)
Cash paid for business combination		(2,726)
Cash acquired in business combination		527
Proceeds from sale of assets	27	9
Net cash flows from investing activities	(9,261)	(5,204)
Cash flows from financing activities:
Proceeds from stock option exercises	6,410	264
Proceeds from follow-on public offering, net of $0.7 million underwriting discount	13,716
Payments for stock issuance costs	(1,167)	(40)
Payments for tax withholding on equity awards	(7,146)
Principal payments on capital lease obligations	(3,341)	(2,997)
Net cash flows from financing activities	8,472	(2,773)
Effect of foreign currency exchange rates on cash	(3)	2
Net increase (decrease) in cash, cash equivalents, and restricted cash	7,941	(2,853)
Cash, cash equivalents, and restricted cash at beginning of period	175,496	40,478
Cash, cash equivalents, and restricted cash at end of period	183,437	37,625
Supplemental disclosure of cash flow information:
Assets acquired under capitalized leases	2,913	8,352
Property and equipment purchases included in accounts payable	217	41
Issuance of common stock for business combination		432
Cash paid for interest	$ 93	$ 69

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Millions	6 Months Ended
	Jun. 30, 2018USD ($)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Underwriters' discount	$ 0.7

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS STOCKHOLDERS’ EQUITY (DEFICIT) - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Total
Balance at Dec. 31, 2017	$ 39	$ 229,594	$ (49,857)	$ (2)	$ 179,774
Balance (in shares) at Dec. 31, 2017	42,175,647
Exercise of common stock options	$ 3	6,407			$ 6,410
Exercise of common stock options (in shares)	3,286,005				3,286,005
Vesting of restricted stock units (in shares)	303,550
Tax withholding associated with vesting of restricted stock units		(7,310)			$ (7,310)
Stock-based compensation		4,640			4,640
Net loss			(1,583)		(1,583)
Foreign currency translation adjustment				(3)	(3)
Follow-on offering of common stock	$ 4	13,712			13,716
Follow-on offering of common stock (in shares)	600,000
Issuance costs associated with IPO and follow-on offering		(1,341)			(1,341)
Adoption of ASU 2016-09 (Note 2) | ASU 2016-09		626	(626)
Balance at Jun. 30, 2018	$ 46	$ 246,328	$ (52,066)	$ (5)	$ 194,303
Balance (in shares) at Jun. 30, 2018	46,365,202

Organization and Description of

Organization and Description of Business	6 Months Ended
	Jun. 30, 2018
Organization and Description of Business
Organization and Description of Business	(1) Organization and Description of Business SendGrid, Inc. and our wholly owned subsidiaries, SendGrid UK Limited and JCKM, Inc. (“Bizzy”) (collectively, “we,” “us,” “our,” “SendGrid,” or “the Company”), operate a leading digital communication platform that enables businesses to engage with their customers via email reliably, effectively, and at scale. SendGrid’s cloud-based platform allows for frictionless adoption and immediate value creation for businesses, providing their developers and marketers with the tools to seamlessly and effectively reach their customers using email. We maintain business operations in the United States and United Kingdom, with sales to customers in the United States and internationally. In November 2017, we completed our initial public offering (“IPO”). We sold 9.4 million shares of our common stock at the public offering price of $16.00 per share. We received net proceeds of $136.3 million after deducting underwriting discounts, commissions, and offering expenses. Our common stock began trading on the New York Stock Exchange on November 15, 2017.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	(2) Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and account balances have been eliminated in consolidation. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. Emerging Growth Company Status Currently, we are an emerging growth company (“EGC”) as defined by the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. We elected to take advantage of the extended transition period. As of June 30, 2018, the market value of or common stock held by non-affiliates exceeded $700 million. Therefore, effective December 31, 2018, we will cease to be classified as an EGC. As a result, as of December 31, 2018, we will be required to adopt all applicable accounting standards that were effective for any period during 2018. Use of Estimates The preparation of consolidated financial statements, in conformity with GAAP, requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, the reported amounts of revenue and expenses during the reporting period, and certain information disclosed in the notes to the consolidated financial statements. Actual results could materially differ from these estimates. Significant estimates and assumptions that affect our consolidated financial condition and results of operations include:  revenue recognition  deferred taxes and related valuation allowances  allowance for doubtful accounts and sales returns  sales and use tax  income tax uncertainties  stock-based compensation  other contingencies  determination of the fair value of assets acquired and liabilities assumed in business combinations We review estimates and assumptions periodically, and the effects of revisions are reflected prospectively in the period they occur. Sales Taxes We account for sales tax collected from customers and remitted to governmental authorities on a net basis and, therefore, we do not include such tax in revenue or cost of revenue in our consolidated statements of operations and comprehensive loss. Other Aside from the treatment of restricted cash on the statements of cash flows (see discussion of ASU 2016-18 below) and our accounting policy election regarding forfeitures on stock awards (see discussion of ASU 2016-09 below), there have been no material changes to our significant accounting policies as described in our December 31, 2017 consolidated financial statements. Recently Adopted Accounting Standards In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies when transactions should be accounted for as acquisitions (or disposals) of assets or business. We adopted ASU 2017-01 effective January 1, 2018. The adoption did not have a significant impact on our consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU 2016-18, Statements of Cash Flow (Topic 230): Restricted Cash, which requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amount shown on the statement of cash flows. We adopted ASU 2016-18 effective April 1, 2018. Our condensed consolidated balance sheet as of June 30, 2018 includes $1.1 million of restricted cash related to SendGrid.org (Note 3). The condensed consolidated statement of cash flows includes this restricted cash within the end-of-period total amount shown as “cash, cash equivalents, and restricted cash.” When the SendGrid.org restricted cash is actually disbursed, we will classify it as a use of cash from operating activities. We restated the prior period to conform to current year presentation. For the six months ended June 30, 2017, this resulted in a $0.1 million decrease in cash used in investing activities. In August 2016, the FASB issued ASU 2016-15, Statements of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which clarifies classification for certain cash receipts and cash payments on the consolidated statement of cash flows. The standard requires retrospective application for each period presented. We adopted ASU 2016-15 effective April 1, 2018. The adoption did not have a significant impact on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements for Employee Share-Based Payment Accounting, which simplifies certain aspects of accounting for share-based payment transactions, including the following: · accounting for income tax consequences; · minimum statutory tax withholdings requirements; · forfeitures; · excess tax benefits in the statement of cash flows; and · classification of employee taxes paid when an employer withholds shares for tax-withholding purposes in the statement of cash flows. We adopted ASU 2016-09 effective January 1, 2018. We made an accounting policy election to account for forfeitures in stock-based compensation cost as they occur and recorded a cumulative-effect adjustment of $0.6 million to accumulated deficit. The adoption of the remaining provisions of ASU 2016-09 did not have a significant impact on our consolidated financial statements and related disclosures. New Accounting Pronouncements Not Yet Adopted In February 2018, the FASB issued ASU 2018-02, which allows a reclassification from accumulated other comprehensive income to accumulated deficit for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (“the 2017 Act”). ASU 2018-02 is effective for us beginning January 1, 2019. Early adoption is permitted, but we do not expect to do so. Companies that elect to reclassify the stranded effects associated with the change in U.S. federal corporate income tax rate must do so for all items within Accumulated Other Comprehensive Income (“AOCI”). This standard allows adoption under one of two transition methods: (1) retrospective to each period (or periods) in which the income tax effects of the 2017 Act related to items remaining in AOCI are recognized, or (2) at the beginning of the period of adoption. We expect to adopt at the beginning of the period of adoption and do not anticipate the adoption of this standard will have a significant impact on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize, on the balance sheet, a liability to make lease payments and a corresponding right-of-use asset representing a right to use the underlying asset for the lease term. ASU 2016-02 is effective for us beginning January 1, 2019. Early adoption permitted, but we do not expect to do so. The standard requires a modified retrospective approach. The FASB recently approved Proposed ASU 2018-200, Leases (Topic 842), Targeted Improvements. We anticipate electing the optional transition method in ASU 2018-200, which still requires a modified retrospective transition and contains the following provisions: · transition provisions of the new standard are applied at its adoption date; · recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption; and · continue to apply the legacy guidance in Topic 840, Leases, including its disclosure requirements, in the comparative periods presented in the year the new leases standard is adopted. We are currently in the process of accumulating and evaluating all contractual lease arrangements in order to determine the impact on our consolidated financial statements and related disclosures. While we expect the adoption of this standard to result in an increase to our reported assets and liabilities, we have not yet determined the full impact. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and modified the standard thereafter. The standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new accounting standard also impacts the recognition of incremental costs to obtain a sales contract, such as sales commissions. Under the new standard, these incremental costs will be capitalized at inception and expensed over an estimate of the customer’s life. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. Most public companies adopted ASU 2014-09 effective January 1, 2018. Due to the cessation of our EGC status, the new standard is effective for us beginning December 31, 2018. Early adoption is permitted, but we do not expect to do so. The standard permits the use of either the retrospective or cumulative effect transition method. We continue to evaluate the impact of the new standard and available adoption methods on our consolidated financial statements. We are in the process of evaluating customer arrangements and commissions and identifying differences in accounting between new and existing standards. We do not anticipate the new standard will have a material impact on the timing or amount of revenue recognition. However, we expect some impact on our consolidated statements of operations as a result of the deferred expense on sales commissions.

Restricted Cash

Restricted Cash	6 Months Ended
	Jun. 30, 2018
Restricted Cash.
Restricted Cash	(3) Restricted Cash Restricted cash as of June 30, 2018 represents amounts designated for SendGrid.org. SendGrid.org is a division of SendGrid and not a separate legal entity. Its mission is to support nonprofit organizations.

Property and Equipment

Property and Equipment	6 Months Ended
	Jun. 30, 2018
Property and Equipment
Property and Equipment	(4) Property and Equipment Property and equipment consist of the following: Estimated Useful As of June 30, As of December 31, Life (in months) 2018 2017 (In thousands) Data center equipment 36 - 48 $ 31,566 $ 28,474 Leasehold improvements 76 - 131 * 12,837 8,067 Office furniture and equipment 36 - 60 5,840 4,560 Computer equipment and peripherals 36 3,295 3,276 53,538 44,377 Less accumulated depreciation (19,289) (15,185) Property and equipment, net $ 34,249 $ 29,192 * We hold certain equipment under capital lease arrangements. This equipment is classified as data center or office equipment. We depreciate this equipment using the straight-line method over the shorter of the useful life or the term of the lease agreement. The following table summarizes our capital lease arrangements: As of June 30, As of December 31, 2018 2017 (In thousands) Equipment held under capital lease agreements $ 25,428 $ 24,866 Less accumulated depreciation (8,835) (7,860) Carrying value $ 16,593 $ 17,006 The following table summarizes depreciation expense, including depreciation of assets held under capital lease arrangements: For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 (In thousands) Depreciation expense $ 2,605 $ 2,410 $ 5,002 $ 4,501

Accounts Payable and Accrued Li

Accounts Payable and Accrued Liabilities	6 Months Ended
	Jun. 30, 2018
Accounts Payable and Accrued Liabilities
Accounts Payable and Accrued Liabilities	(5) Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consists of the following: As of June 30, As of December 31, 2018 2017 (In thousands) Bonus and commission $ 3,831 $ 4,031 Accounts payable 1,913 3,553 Sales tax 984 2,057 Marketing expense 707 203 Employee benefits 650 557 Vacation 19 1,832 Professional fees and other 1,301 1,604 Accounts payable and accrued liabilities $ 9,405 $ 13,837

Revolving Line of Credit

Revolving Line of Credit	6 Months Ended
	Jun. 30, 2018
Revolving Line of Credit.
Revolving Line of Credit	(6) Revolving Line of Credit We have a loan and security agreement (“LSA”) with a bank that provides a revolving line of credit with $40.0 million maximum borrowing availability. The LSA matures in August 2018. We had $40.0 million available to draw as of June 30, 2018 and December 31, 2017. We were in compliance with all financial covenants as of June 30, 2018 and December 31, 2017. For all periods presented, no amounts were outstanding, and we had no borrowing activity. Amounts available to draw under the LSA are calculated from a trailing three-month revenue base, which can differ from the maximum loan amount. Advances are subject to the following interest rates: · prime rate then in effect plus 0.50%, with a floor of 4.00% while our cash balance is greater than $8.0 million. · prime rate then in effect plus 1.25%, with a floor of 4.75% while our cash balance is not greater than $8.0 million Principal is due at maturity. Borrowings are secured by substantially all of our assets. The LSA contains certain restrictions, affirmative and negative covenants, and limitations, including, among other things: · restriction on our ability to pledge our intellectual property; · requirement to maintain at least 40% of our aggregate cash and cash equivalents in depository, operating, and investment accounts with the bank; · requirement to maintain certain business performance levels; · limitations on disposal of assets; · limitations on certain fundamental business changes; · limitations on incurrences of debt; · limitations on incurrences of liens; · limitations on payments of dividends; · limitations on repurchases of stock; and · limitations on engaging in affiliate transactions. Each case is subject to certain exceptions. The LSA also contains certain events of default including, among other things, that during the existence of an event of default, interest on the obligations could be increased.

Equity Financing

Equity Financing	6 Months Ended
	Jun. 30, 2018
Equity Financing
Equity Financing	(7) Equity Financing On April 10, 2018 we closed a follow-on public offering of 7,514,369 shares of SendGrid common stock priced at $24.00, before underwriting discounts and commissions. Of the total shares sold, existing stockholders and option holders sold 6,914,369 shares, and the Company sold 600,000 shares. We received net proceeds of $12.4 million after deducting $0.7 million of underwriting discounts and commissions and $1.3 million of offering expenses .

Stock Awards

Stock Awards	6 Months Ended
	Jun. 30, 2018
Stock Awards
Stock Awards	(8) Stock Awards In 2012, we created the 2012 Equity Incentive Plan (the “2012 Plan”), and in 2017, we created the 2017 Equity Incentive Plan (the “2017 Plan”). The 2012 Plan terminated upon the effectiveness of the 2017 Plan. However, any outstanding stock awards will continue to be governed by their existing terms. The following table summarizes remaining shares available for grant: As of June 30, As of December 31, Stock Awards Available for Grant 2018 2017 (In thousands) 2017 Plan 5,581 3,504 The 2012 Plan allowed and the 2017 Plan allows granting of stock options and restricted stock units. Options have an exercise price not less than 100% of the fair value of common stock on the date of grant and expire no more than ten years from the grant date. Stock options and restricted stock units generally vest over two to four years. The following table summarizes our stock option activity: Weighted Average Stock Exercise Options Price Outstanding January 1, 2018 12,217,721 $ 4.79 Granted 249,740 $ 26.28 Exercised (3,286,005) $ 1.95 Forfeited (598,009) $ 7.29 Outstanding June 30, 2018 8,583,447 $ 6.33 Vested and exercisable June 30, 2018 3,762,222 $ 2.30 The following table summarizes information about stock options outstanding and exercisable: As of June 30, 2018 Options Outstanding Options Exercisable Weighted Weighted Average Weighted Average Weighted Number of Remaining Average Number of Remaining Average Options Contractual Life Exercise Options Contractual Life Exercise Exercise Price Outstanding (In Years) Price Exercisable (In Years) Price $0.18 - $1.50 769,286 4.8 $ 1.07 769,286 $1.83 - $2.12 1,280,363 6.3 $ 1.85 1,162,142 $2.18 1,007,841 6.9 $ 2.18 714,385 $2.46 - $2.79 1,055,838 7.4 $ 2.55 567,820 $4.24 1,073,986 8.2 $ 4.24 373,011 $4.52 - $7.58 838,853 8.8 $ 5.82 165,620 $12.00 1,521,581 9.1 $ 12.00 9,958 $12.72 - $22.87 873,404 9.3 $ 16.06 - $24.97 - $30.35 162,295 9.7 $ 27.96 - 8,583,447 7.7 $ 6.33 3,762,222 6.6 $ 2.30 The 2012 Plan allowed and the 2017 Plan also allows for the issuance of restricted stock units. The following table summarizes our restricted stock unit activity: Weighted Restricted Average Stock Grant Date Units Fair Value Outstanding at January 1, 2018 656,854 $ 2.54 Granted 676,906 $ 27.17 Vested (303,550) $ 1.08 Withheld for taxes (278,899) $ 1.08 Forfeited (13,138) $ 27.00 Outstanding at June 30, 2018 738,173 $ 25.12 For all periods presented, we computed the fair value of options granted using the Black-Scholes option pricing model. The model requires estimates and assumptions, including: Estimate or Assumption Criteria The fair value of our common stock Subsequent to our IPO in November 2017, we obtain the fair value of our common stock from the public market. Prior to our IPO, there was no public trading market for our common stock or preferred stock. As a result, our board of directors considered an independent third-party valuation of our common stock and whether any new material information after the date of such valuation had materially affected the fair value of our common stock. Risk-free interest rates The risk-free interest rate is based on the U.S. Treasury yield for treasury securities with maturities that align closely with the timing of the average remaining expected life of the option. Volatility We estimate a volatility factor utilizing an average of the stock volatility of peer companies blended with the volatility of our own common stock. Expected dividend yield Because we have never declared or paid a dividend and do not expect to do so in the foreseeable future, we assume a dividend yield of zero. Expected option life Given our limited history, we applied the simplified method (the average of the period from vesting to expiration) to determine the expected option life. The use of different estimates and assumptions could cause significant adjustments to the valuation. The following table summarizes the estimates and assumptions used and the resulting weighted average grant date fair value of the options granted: For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Fair value of common stock $27.00 $5.48 - $7.58 $22.87 - $30.35 $4.52 - $7.58 Risk-free interest rate 2.7% 1.8% - 2.0% 2.4% - 2.7% 1.8% - 2.1% Expected life 5.6 years 6.0 years 5.9 years 6.0 years Expected dividend yield - - - - Expected volatility 50.1% 50.5% - 52.9% 50.1% - 50.6% 50.5% - 54.0% Weighted average grant date fair value of the options granted $13.47 $3.70 $13.38 $3.31 We recognize stock-based compensation cost on a straight‑line basis over the requisite service period for the entire award and account for forfeitures as they occur. We allocate stock-based compensation to the same expense categories as the base compensation for such employees. We recognized the following stock-based compensation expense for options and RSUs: For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 (In thousands) Cost of revenue $ 324 $ 97 $ 526 $ 151 Research and development 1,114 215 1,708 362 Selling and marketing 409 180 633 315 General and administrative 965 301 1,773 553 Stock-based compensation $ 2,812 $ 793 $ 4,640 $ 1,381 The following table summarizes our unrecognized compensation cost: As of June 30, 2018 Unrecognized compensation cost (in thousands) $ 36,463 Weighted average remaining vesting period 2.9 years

Net Loss Per Share Attributed t

Net Loss Per Share Attributed to Common Stockholders	6 Months Ended
	Jun. 30, 2018
Net Loss Per Share Attributed to Common Stockholders
Net Loss Per Share Attributed to Common Stockholders	(9) Net Loss Per Share Attributed to Common Stockholders We calculate our basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method, which is required for companies with participating securities. We exclude all potentially dilutive securities, which include the following “common stock equivalents”: · Options to purchase common stock · Restricted stock units · Redeemable convertible preferred stock (existed prior to our IPO and considered a participating security) · Redeemable convertible preferred stock warrant (existed prior to our IPO) The two-class method requires the following: Periods when we have net loss We calculate both basic and diluted net loss per common share by dividing net loss by the weighted average number of common shares outstanding during the period. Common stock equivalents are not considered because their effect is antidilutive. Periods when we have net income Basic net income per share We calculate basic net income per share by dividing the net income attributable to the common stockholder by the weighted average number of common shares outstanding during the period. Diluted net income per share We calculate diluted net income per share by dividing net income attributable to the common stockholder by the weighted average number of common shares and common stock equivalents outstanding during the period. The potential dilution from stock awards is accounted for using the treasury stock method. The following table summarizes our net loss per share: For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 (In thousands, except per share amounts) Net loss $ (310) $ (1,333) $ (1,583) $ (3,134) Weighted average common shares outstanding 44,581 7,943 43,099 7,896 Net loss attributable to common stockholders $ (0.01) $ (0.17) $ (0.04) $ (0.40) The following common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because their effect would have been anti-dilutive. As of June 30, As of June 30, 2018 2017 (In thousands) Stock options 8,583 10,057 Restricted stock units 738 617 Convertible preferred stock - 24,535 Redeemable preferred stock warrants - 54 9,321 35,263

Segment and Geographic Informat

Segment and Geographic Information	6 Months Ended
	Jun. 30, 2018
Segment and Geographic Information
Segment and Geographic Information	(10) Segment and Geographic Information Our Chief Executive Officer and Chief Financial Officer / Chief Operating Officer are the chief operating decision makers. They regularly review financial information presented on a consolidated basis for the purposes of allocating resources and evaluating performance. Accordingly, we determined that we currently operate in one reportable business segment. Substantially all of our assets are located in the United States. We consider all revenue derived from customers with a U.S. billing address as U.S. revenue. All other revenue is considered international revenue. The following table summarizes revenue by geographic area: For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 (In thousands) United States $ 21,705 $ 16,811 $ 41,847 $ 32,559 International 13,970 10,201 26,397 19,284 Total revenue $ 35,675 $ 27,012 $ 68,244 $ 51,843

Income Tax

Income Tax	6 Months Ended
	Jun. 30, 2018
Income Tax
Income Tax	(11) Income Tax Accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of our net deferred tax assets. We primarily considered such factors as our history of operating losses, the nature of our deferred tax assets, and the timing, likelihood, and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. At present, we do not believe that it is more likely than not that the net deferred tax assets will be realized. Accordingly, we established a full valuation allowance. Currently, we do not have any uncertain tax positions. We do not anticipate any significant changes within twelve months of June 30, 2018 in uncertain tax positions that would be material to the consolidated financial statements taken as a whole. We file U.S. federal income tax returns as well as income tax returns in many U.S. states and the United Kingdom. The 2009 through 2017 tax years remain open to examination by the major jurisdictions in which we are subject to tax.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies
Commitments and Contingencies	(12) Commitments and Contingencies Commitments The following table summarizes commitments on contracts that meet the following criteria: · enforceable; · legally binding; and · specify all significant terms, including fixed or minimum services to be used, fixed, minimum, or variable price provisions, and the approximate timing of the actions under the contracts. The table excludes obligations under agreements that we can cancel without a significant penalty. Payments due by Period As of June 30, 2018 2018 2019 2020 2021 2022 Thereafter Total (In thousands) Operating lease obligations $ 2,176 $ 4,808 $ 4,936 $ 5,065 $ 5,197 $ 16,595 $ 38,777 Capital lease obligations 3,247 5,896 5,129 2,278 150 - 16,700 Interest on capital lease obligations 100 138 74 29 2 - 343 Purchase obligations 3,639 6,778 5,808 9,017 4,625 - 29,867 Total $ 9,162 $ 17,620 $ 15,947 $ 16,389 $ 9,974 $ 16,595 $ 85,687 Sales and Use Tax We conduct operations in many tax jurisdictions throughout the United States. In many of these jurisdictions, non-income-based taxes, such as sales and use taxes are assessed on our operations. Prior to May 1, 2018, we did not bill or collect these taxes. We record a provision for such tax exposure when it is both probable that a liability has been incurred and the amount of the exposure can be reasonably estimated. The liability is recorded in “accounts payable and accrued liabilities” and “other long-term liabilities” on the condensed consolidated balance sheets. These estimates include several key assumptions including, but not limited to, the taxability of our services, the jurisdictions in which we believe we have nexus, and the sourcing of revenues to those jurisdictions. In the event these jurisdictions challenge our assumptions and analysis, the actual exposure could differ materially from the current estimates. We are closely monitoring the impact of the United States Supreme Court decision in South Dakota v. Wayfair on June 21, 2018 that overturned the requirement from its 1992 ruling in Quill Corp. v. North Dakota, which held that sellers must have a physical presence in a state before they can be required to collect sales tax. The case will likely result in a significant increase in the cost of our sales tax compliance responsibilities. Indemnification Our arrangements with customers generally include an indemnification provision that we will indemnify and defend a customer in actions that claim our services infringe upon a valid patent, copyright, or trademark. Historically, we have not incurred any costs related to indemnification claims and do not expect to incur such costs. Accordingly, we do not maintain a reserve for such exposure. Other From time to time, we are subject to various legal proceedings and claims that arise in the ordinary course of business, including, among other things, regulatory matters and disputes with customers and vendors. In our opinion, the amount of ultimate liability with respect to any of these actions is unlikely to materially affect our financial condition, results of operations or liquidity.

Summary of Significant Accoun20

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and account balances have been eliminated in consolidation. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Our results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. Emerging Growth Company Status Currently, we are an emerging growth company (“EGC”) as defined by the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. We elected to take advantage of the extended transition period. As of June 30, 2018, the market value of or common stock held by non-affiliates exceeded $700 million. Therefore, effective December 31, 2018, we will cease to be classified as an EGC. As a result, as of December 31, 2018, we will be required to adopt all applicable accounting standards that were effective for any period during 2018.
Emerging Growth Company Status	Emerging Growth Company Status Currently, we are an emerging growth company (“EGC”) as defined by the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. We elected to take advantage of the extended transition period. As of June 30, 2018, the market value of or common stock held by non-affiliates exceeded $700 million. Therefore, effective December 31, 2018, we will cease to be classified as an EGC. As a result, as of December 31, 2018, we will be required to adopt all applicable accounting standards that were effective for any period during 2018.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements, in conformity with GAAP, requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, the reported amounts of revenue and expenses during the reporting period, and certain information disclosed in the notes to the consolidated financial statements. Actual results could materially differ from these estimates. Significant estimates and assumptions that affect our consolidated financial condition and results of operations include:  revenue recognition  deferred taxes and related valuation allowances  allowance for doubtful accounts and sales returns  sales and use tax  income tax uncertainties  stock-based compensation  other contingencies  determination of the fair value of assets acquired and liabilities assumed in business combinations We review estimates and assumptions periodically, and the effects of revisions are reflected prospectively in the period they occur.
Sales Taxes	Sales Taxes We account for sales tax collected from customers and remitted to governmental authorities on a net basis and, therefore, we do not include such tax in revenue or cost of revenue in our consolidated statements of operations and comprehensive loss.
Other	Other Aside from the treatment of restricted cash on the statements of cash flows (see discussion of ASU 2016-18 below) and our accounting policy election regarding forfeitures on stock awards (see discussion of ASU 2016-09 below), there have been no material changes to our significant accounting policies as described in our December 31, 2017 consolidated financial statements.
Recently Adopted Accounting Standards	Recently Adopted Accounting Standards In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies when transactions should be accounted for as acquisitions (or disposals) of assets or business. We adopted ASU 2017-01 effective January 1, 2018. The adoption did not have a significant impact on our consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU 2016-18, Statements of Cash Flow (Topic 230): Restricted Cash, which requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amount shown on the statement of cash flows. We adopted ASU 2016-18 effective April 1, 2018. Our condensed consolidated balance sheet as of June 30, 2018 includes $1.1 million of restricted cash related to SendGrid.org (Note 3). The condensed consolidated statement of cash flows includes this restricted cash within the end-of-period total amount shown as “cash, cash equivalents, and restricted cash.” When the SendGrid.org restricted cash is actually disbursed, we will classify it as a use of cash from operating activities. We restated the prior period to conform to current year presentation. For the six months ended June 30, 2017, this resulted in a $0.1 million decrease in cash used in investing activities. In August 2016, the FASB issued ASU 2016-15, Statements of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which clarifies classification for certain cash receipts and cash payments on the consolidated statement of cash flows. The standard requires retrospective application for each period presented. We adopted ASU 2016-15 effective April 1, 2018. The adoption did not have a significant impact on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements for Employee Share-Based Payment Accounting, which simplifies certain aspects of accounting for share-based payment transactions, including the following: · accounting for income tax consequences; · minimum statutory tax withholdings requirements; · forfeitures; · excess tax benefits in the statement of cash flows; and · classification of employee taxes paid when an employer withholds shares for tax-withholding purposes in the statement of cash flows. We adopted ASU 2016-09 effective January 1, 2018. We made an accounting policy election to account for forfeitures in stock-based compensation cost as they occur and recorded a cumulative-effect adjustment of $0.6 million to accumulated deficit. The adoption of the remaining provisions of ASU 2016-09 did not have a significant impact on our consolidated financial statements and related disclosures.
New Accounting Pronouncements Not Yet Adopted	New Accounting Pronouncements Not Yet Adopted In February 2018, the FASB issued ASU 2018-02, which allows a reclassification from accumulated other comprehensive income to accumulated deficit for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (“the 2017 Act”). ASU 2018-02 is effective for us beginning January 1, 2019. Early adoption is permitted, but we do not expect to do so. Companies that elect to reclassify the stranded effects associated with the change in U.S. federal corporate income tax rate must do so for all items within Accumulated Other Comprehensive Income (“AOCI”). This standard allows adoption under one of two transition methods: (1) retrospective to each period (or periods) in which the income tax effects of the 2017 Act related to items remaining in AOCI are recognized, or (2) at the beginning of the period of adoption. We expect to adopt at the beginning of the period of adoption and do not anticipate the adoption of this standard will have a significant impact on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize, on the balance sheet, a liability to make lease payments and a corresponding right-of-use asset representing a right to use the underlying asset for the lease term. ASU 2016-02 is effective for us beginning January 1, 2019. Early adoption permitted, but we do not expect to do so. The standard requires a modified retrospective approach. The FASB recently approved Proposed ASU 2018-200, Leases (Topic 842), Targeted Improvements. We anticipate electing the optional transition method in ASU 2018-200, which still requires a modified retrospective transition and contains the following provisions: · transition provisions of the new standard are applied at its adoption date; · recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption; and · continue to apply the legacy guidance in Topic 840, Leases, including its disclosure requirements, in the comparative periods presented in the year the new leases standard is adopted. We are currently in the process of accumulating and evaluating all contractual lease arrangements in order to determine the impact on our consolidated financial statements and related disclosures. While we expect the adoption of this standard to result in an increase to our reported assets and liabilities, we have not yet determined the full impact. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and modified the standard thereafter. The standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new accounting standard also impacts the recognition of incremental costs to obtain a sales contract, such as sales commissions. Under the new standard, these incremental costs will be capitalized at inception and expensed over an estimate of the customer’s life. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. Most public companies adopted ASU 2014-09 effective January 1, 2018. Due to the cessation of our EGC status, the new standard is effective for us beginning December 31, 2018. Early adoption is permitted, but we do not expect to do so. The standard permits the use of either the retrospective or cumulative effect transition method. We continue to evaluate the impact of the new standard and available adoption methods on our consolidated financial statements. We are in the process of evaluating customer arrangements and commissions and identifying differences in accounting between new and existing standards. We do not anticipate the new standard will have a material impact on the timing or amount of revenue recognition. However, we expect some impact on our consolidated statements of operations as a result of the deferred expense on sales commissions.

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2018
Property and Equipment
Schedule of property and equipment	Estimated Useful As of June 30, As of December 31, Life (in months) 2018 2017 (In thousands) Data center equipment 36 - 48 $ 31,566 $ 28,474 Leasehold improvements 76 - 131 * 12,837 8,067 Office furniture and equipment 36 - 60 5,840 4,560 Computer equipment and peripherals 36 3,295 3,276 53,538 44,377 Less accumulated depreciation (19,289) (15,185) Property and equipment, net $ 34,249 $ 29,192 *
Schedule of capital lease arrangements	As of June 30, As of December 31, 2018 2017 (In thousands) Equipment held under capital lease agreements $ 25,428 $ 24,866 Less accumulated depreciation (8,835) (7,860) Carrying value $ 16,593 $ 17,006
Schedule of depreciation expense	For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 (In thousands) Depreciation expense $ 2,605 $ 2,410 $ 5,002 $ 4,501

Accounts Payable and Accrued 22

Accounts Payable and Accrued Liabilities (Tables)	6 Months Ended
	Jun. 30, 2018
Accounts Payable and Accrued Liabilities
Schedule of accounts payable and accrued liabilities	As of June 30, As of December 31, 2018 2017 (In thousands) Bonus and commission $ 3,831 $ 4,031 Accounts payable 1,913 3,553 Sales tax 984 2,057 Marketing expense 707 203 Employee benefits 650 557 Vacation 19 1,832 Professional fees and other 1,301 1,604 Accounts payable and accrued liabilities $ 9,405 $ 13,837

Stock Awards (Tables)

Stock Awards (Tables)	6 Months Ended
	Jun. 30, 2018
Stock Awards
Schedule of stock awards available for grant	As of June 30, As of December 31, Stock Awards Available for Grant 2018 2017 (In thousands) 2017 Plan 5,581 3,504
Schedule of stock option activity	Weighted Average Stock Exercise Options Price Outstanding January 1, 2018 12,217,721 $ 4.79 Granted 249,740 $ 26.28 Exercised (3,286,005) $ 1.95 Forfeited (598,009) $ 7.29 Outstanding June 30, 2018 8,583,447 $ 6.33 Vested and exercisable June 30, 2018 3,762,222 $ 2.30
Schedule of information about stock options outstanding and exercisable	As of June 30, 2018 Options Outstanding Options Exercisable Weighted Weighted Average Weighted Average Weighted Number of Remaining Average Number of Remaining Average Options Contractual Life Exercise Options Contractual Life Exercise Exercise Price Outstanding (In Years) Price Exercisable (In Years) Price $0.18 - $1.50 769,286 4.8 $ 1.07 769,286 $1.83 - $2.12 1,280,363 6.3 $ 1.85 1,162,142 $2.18 1,007,841 6.9 $ 2.18 714,385 $2.46 - $2.79 1,055,838 7.4 $ 2.55 567,820 $4.24 1,073,986 8.2 $ 4.24 373,011 $4.52 - $7.58 838,853 8.8 $ 5.82 165,620 $12.00 1,521,581 9.1 $ 12.00 9,958 $12.72 - $22.87 873,404 9.3 $ 16.06 - $24.97 - $30.35 162,295 9.7 $ 27.96 - 8,583,447 7.7 $ 6.33 3,762,222 6.6 $ 2.30
Schedule of restricted stock unit activity	Weighted Restricted Average Stock Grant Date Units Fair Value Outstanding at January 1, 2018 656,854 $ 2.54 Granted 676,906 $ 27.17 Vested (303,550) $ 1.08 Withheld for taxes (278,899) $ 1.08 Forfeited (13,138) $ 27.00 Outstanding at June 30, 2018 738,173 $ 25.12
Schedule of estimates and assumptions used and the resulting average grant date fair value of options granted	For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Fair value of common stock $27.00 $5.48 - $7.58 $22.87 - $30.35 $4.52 - $7.58 Risk-free interest rate 2.7% 1.8% - 2.0% 2.4% - 2.7% 1.8% - 2.1% Expected life 5.6 years 6.0 years 5.9 years 6.0 years Expected dividend yield - - - - Expected volatility 50.1% 50.5% - 52.9% 50.1% - 50.6% 50.5% - 54.0% Weighted average grant date fair value of the options granted $13.47 $3.70 $13.38 $3.31
Schedule of stock-based compensation expense	For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 (In thousands) Cost of revenue $ 324 $ 97 $ 526 $ 151 Research and development 1,114 215 1,708 362 Selling and marketing 409 180 633 315 General and administrative 965 301 1,773 553 Stock-based compensation $ 2,812 $ 793 $ 4,640 $ 1,381
Schedule of unrecognized compensation cost (net of expected forfeitures)	As of June 30, 2018 Unrecognized compensation cost (in thousands) $ 36,463 Weighted average remaining vesting period 2.9 years

Net Loss Per Share Attributed24

Net Loss Per Share Attributed to Common Stockholders (Tables)	6 Months Ended
	Jun. 30, 2018
Net Loss Per Share Attributed to Common Stockholders
Schedule of net loss per share	For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 (In thousands, except per share amounts) Net loss $ (310) $ (1,333) $ (1,583) $ (3,134) Weighted average common shares outstanding 44,581 7,943 43,099 7,896 Net loss attributable to common stockholders $ (0.01) $ (0.17) $ (0.04) $ (0.40)
Schedule of antidilutive securities excluded from computation of earnings per share	As of June 30, As of June 30, 2018 2017 (In thousands) Stock options 8,583 10,057 Restricted stock units 738 617 Convertible preferred stock - 24,535 Redeemable preferred stock warrants - 54 9,321 35,263

Segment and Geographic Inform25

Segment and Geographic Information (Tables)	6 Months Ended
	Jun. 30, 2018
Segment and Geographic Information
Schedule of revenue by geographic area	For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 (In thousands) United States $ 21,705 $ 16,811 $ 41,847 $ 32,559 International 13,970 10,201 26,397 19,284 Total revenue $ 35,675 $ 27,012 $ 68,244 $ 51,843

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies
Schedule of commitments on contracts	Payments due by Period As of June 30, 2018 2018 2019 2020 2021 2022 Thereafter Total (In thousands) Operating lease obligations $ 2,176 $ 4,808 $ 4,936 $ 5,065 $ 5,197 $ 16,595 $ 38,777 Capital lease obligations 3,247 5,896 5,129 2,278 150 - 16,700 Interest on capital lease obligations 100 138 74 29 2 - 343 Purchase obligations 3,639 6,778 5,808 9,017 4,625 - 29,867 Total $ 9,162 $ 17,620 $ 15,947 $ 16,389 $ 9,974 $ 16,595 $ 85,687

Organization and Description 27

Organization and Description of Business (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	6 Months Ended
	Nov. 30, 2017	Jun. 30, 2018
Organization And Description Of Business [Line Items]
Net proceeds from initial public offering after deducting underwriting discounts and offering expenses	$ 136.3
Common Stock
Organization And Description Of Business [Line Items]
Sale of common stock in connection with initial public offering	9,400,000	600,000
Public offering, shares issued price (per share)	$ 16

Summary of Significant Accoun28

Summary of Significant Accounting Policies - Policies (Details) - USD ($) $ in Thousands	Jan. 01, 2018	Jun. 30, 2018	Jun. 30, 2017
Accounting Policies [Line Items]
Restricted cash		$ 1,120
(Decrease) in cash used in investing activities		(9,261)	$ (5,204)
Minimum
Accounting Policies [Line Items]
Market value of common stock held by non-affiliates, EGC status ceased, threshold		700,000
ASU 2016-18
Accounting Policies [Line Items]
(Decrease) in cash used in investing activities		$ (100)
ASU 2016-09
Accounting Policies [Line Items]
Cumulative-effect adjustment to accumulated deficit	$ 600

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Property and Equipment
Property and equipment, gross	$ 53,538		$ 53,538		$ 44,377
Less accumulated depreciation	(19,289)		(19,289)		(15,185)
Property and equipment, net	34,249		34,249		29,192
Equipment held under capital lease agreements	25,428		25,428		24,866
Less accumulated depreciation	(8,835)		(8,835)		(7,860)
Carrying value	16,593		16,593		17,006
Depreciation expense	2,605	$ 2,410	5,002	$ 4,501
Data center equipment
Property and Equipment
Data center equipment	31,566		$ 31,566		28,474
Data center equipment | Minimum
Property and Equipment
Estimated Useful Life (in months)			36 months
Data center equipment | Maximum
Property and Equipment
Estimated Useful Life (in months)			48 months
Leasehold improvements
Property and Equipment
Leasehold improvements	12,837		$ 12,837		8,067
Leasehold improvements | Minimum
Property and Equipment
Estimated Useful Life (in months)			76 months
Leasehold improvements | Maximum
Property and Equipment
Estimated Useful Life (in months)			131 months
Office furniture and equipment
Property and Equipment
Office furniture and equipment	5,840		$ 5,840		4,560
Office furniture and equipment | Minimum
Property and Equipment
Estimated Useful Life (in months)			36 months
Office furniture and equipment | Maximum
Property and Equipment
Estimated Useful Life (in months)			60 months
Computer equipment and peripherals
Property and Equipment
Estimated Useful Life (in months)			36 months
Computer equipment and peripherals	$ 3,295		$ 3,295		$ 3,276

Accounts Payable and Accrued 30

Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Accounts Payable and Accrued Liabilities
Bonus and commission	$ 3,831	$ 4,031
Accounts payable	1,913	3,553
Sales tax	984	2,057
Marketing expense	707	203
Employee benefits	650	557
Vacation	19	1,832
Professional fees and other	1,301	1,604
Accounts Payable and accrued liabilities	$ 9,405	$ 13,837

Revolving Line of Credit (Detai

Revolving Line of Credit (Details) - Revolving line of credit - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Revolving Line of Credit
Maximum borrowing capacity	$ 40,000
Amount outstanding	0	$ 0
Borrowing activity	$ 0	$ 0
Trailing period	3 months
Restriction, aggregate cash and cash equivalents invested (as a percent)	40.00%
Cash balance greater than $8.0 million
Revolving Line of Credit
Floor interest rate (as a percent)	4.00%
Covenant, cash balance threshold	$ 8,000
Cash balance not greater than $8.0 million
Revolving Line of Credit
Floor interest rate (as a percent)	4.75%
Covenant, cash balance threshold	$ 8,000
Prime rate | Cash balance greater than $8.0 million
Revolving Line of Credit
Variable interest rate, basis spread (as a percent)	0.50%
Prime rate | Cash balance not greater than $8.0 million
Revolving Line of Credit
Variable interest rate, basis spread (as a percent)	1.25%

Equity Financing (Details)

Equity Financing (Details) - USD ($) $ / shares in Units, $ in Millions	Apr. 10, 2018	Jun. 30, 2018	Dec. 31, 2017
Equity Financing [Line Items]
Common stock shares issued		46,365,202	42,175,647
Underwriters' discount		$ 0.7
Public offering
Equity Financing [Line Items]
Common stock shares issued	7,514,369
Public offering, shares issued price (per share)	$ 24
Net proceeds after deducting underwriting discounts and offering expenses	$ 12.4
Offering expense	$ 1.3
Public offering | Sold by Shareholders and Option holders
Equity Financing [Line Items]
Common stock shares issued	6,914,369
Public offering | Sold by the Company
Equity Financing [Line Items]
Common stock shares issued	600,000

Stock Awards - Restricted stock

Stock Awards - Restricted stock unit activity - Stock awards (Details) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Minimum
Stock Awards
Option grants, exercise price as a percentage of fair value	100.00%
Vesting period	2 years
Maximum
Stock Awards
Expiration period	10 years
Vesting period	4 years
2017 Equity Incentive Plan
Stock Awards
Stock awards available for grant	5,581	3,504

Stock Awards - Restricted sto34

Stock Awards - Restricted stock unit activity - Stock option activity (Details)	6 Months Ended
	Jun. 30, 2018$ / sharesshares
Stock Options
Outstanding at the beginning (in shares) | shares	12,217,721
Granted (in shares) | shares	249,740
Exercised (in shares) | shares	(3,286,005)
Forfeited (in shares) | shares	(598,009)
Outstanding at the ending (in shares) | shares	8,583,447
Vested and exercisable (in shares) | shares	3,762,222
Weighted Average Exercise Price
Outstanding at the beginning (in dollars per share) | $ / shares	$ 4.79
Granted (in dollars per share) | $ / shares	26.28
Exercised (in dollars per share) | $ / shares	1.95
Forfeited (in dollars per share) | $ / shares	7.29
Outstanding at the ending (in dollars per share) | $ / shares	6.33
Vested and exercisable at the ending (in dollars per share) | $ / shares	$ 2.30

Stock Awards - Restricted sto35

Stock Awards - Restricted stock unit activity - Stock options outstanding and exercisable (Details)	6 Months Ended
	Jun. 30, 2018$ / sharesshares
Summary of stock options outstanding an exercisable
Options Outstanding, Number of Options Outstanding | shares	8,583,447
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	7 years 8 months 12 days
Options Outstanding, Weighted Average Exercise Price	$ 6.33
Options Exercisable, Number of Options Outstanding | shares	3,762,222
Options Exercisable, Weighted Average Remaining Contractual Term (In Years)	6 years 7 months 6 days
Options Exercisable, Weighted Average Exercise Price	$ 2.30
$0.18 - $1.50
Summary of stock options outstanding an exercisable
Exercise Price, lower limit (in dollars per share)	0.18
Exercise Price, upper limit (in dollars per share)	$ 1.50
Options Outstanding, Number of Options Outstanding | shares	769,286
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	4 years 9 months 18 days
Options Outstanding, Weighted Average Exercise Price	$ 1.07
Options Exercisable, Number of Options Outstanding | shares	769,286
$1.83 - $2.12
Summary of stock options outstanding an exercisable
Exercise Price, lower limit (in dollars per share)	$ 1.83
Exercise Price, upper limit (in dollars per share)	$ 2.12
Options Outstanding, Number of Options Outstanding | shares	1,280,363
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	6 years 3 months 18 days
Options Outstanding, Weighted Average Exercise Price	$ 1.85
Options Exercisable, Number of Options Outstanding | shares	1,162,142
$ 2.18
Summary of stock options outstanding an exercisable
Exercise Price (in dollars per share)	$ 2.18
Options Outstanding, Number of Options Outstanding | shares	1,007,841
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	6 years 10 months 24 days
Options Outstanding, Weighted Average Exercise Price	$ 2.18
Options Exercisable, Number of Options Outstanding | shares	714,385
$2.46 - $2.79
Summary of stock options outstanding an exercisable
Exercise Price, lower limit (in dollars per share)	$ 2.46
Exercise Price, upper limit (in dollars per share)	$ 2.79
Options Outstanding, Number of Options Outstanding | shares	1,055,838
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	7 years 4 months 24 days
Options Outstanding, Weighted Average Exercise Price	$ 2.55
Options Exercisable, Number of Options Outstanding | shares	567,820
$ 4.24
Summary of stock options outstanding an exercisable
Exercise Price (in dollars per share)	$ 4.24
Options Outstanding, Number of Options Outstanding | shares	1,073,986
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	8 years 2 months 12 days
Options Outstanding, Weighted Average Exercise Price	$ 4.24
Options Exercisable, Number of Options Outstanding | shares	373,011
$4.52 - $7.58
Summary of stock options outstanding an exercisable
Exercise Price, lower limit (in dollars per share)	$ 4.52
Exercise Price, upper limit (in dollars per share)	$ 7.58
Options Outstanding, Number of Options Outstanding | shares	838,853
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	8 years 9 months 18 days
Options Outstanding, Weighted Average Exercise Price	$ 5.82
Options Exercisable, Number of Options Outstanding | shares	165,620
$ 12
Summary of stock options outstanding an exercisable
Exercise Price (in dollars per share)	$ 12
Options Outstanding, Number of Options Outstanding | shares	1,521,581
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	9 years 1 month 6 days
Options Outstanding, Weighted Average Exercise Price	$ 12
Options Exercisable, Number of Options Outstanding | shares	9,958
$12.72 - $22.87
Summary of stock options outstanding an exercisable
Exercise Price, lower limit (in dollars per share)	$ 12.72
Exercise Price, upper limit (in dollars per share)	$ 22.87
Options Outstanding, Number of Options Outstanding | shares	873,404
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	9 years 3 months 18 days
Options Outstanding, Weighted Average Exercise Price	$ 16.06
$24.97 - $30.35
Summary of stock options outstanding an exercisable
Exercise Price, lower limit (in dollars per share)	24.97
Exercise Price, upper limit (in dollars per share)	$ 30.35
Options Outstanding, Number of Options Outstanding | shares	162,295
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	9 years 8 months 12 days
Options Outstanding, Weighted Average Exercise Price	$ 27.96

Stock Awards - Restricted sto36

Stock Awards - Restricted stock unit activity (Details) - Restricted stock units	6 Months Ended
	Jun. 30, 2018$ / sharesshares
Restricted Stock Units
Outstanding (in shares) | shares	656,854
Granted (in shares) | shares	676,906
Vested (in shares) | shares	(303,550)
Withheld for taxes (in shares) | shares	(278,899)
Forfeited (in shares) | shares	(13,138)
Outstanding (in shares) | shares	738,173
Weighted Average Grant Date Fair Value
Outstanding (in dollars per share) | $ / shares	$ 2.54
Granted (in dollars per share) | $ / shares	27.17
Vested (in dollars per share) | $ / shares	1.08
Withheld for taxes (in dollars per share) | $ / shares	1.08
Forfeited (in dollars per share) | $ / shares	27
Outstanding (in dollars per share) | $ / shares	$ 25.12

Stock Awards - Estimates and as

Stock Awards - Estimates and assumptions (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Estimates and assumptions used
Fair value of common stock	$ 27		$ 27
Fair value of common stock, minimum		$ 5.48	22.87	$ 4.52
Fair value of common stock, maximum		$ 7.58	$ 30.35	$ 7.58
Risk-free interest rate	2.70%
Risk-free interest rate, minimum		1.80%	2.40%	1.80%
Risk-free interest rate, maximum		2.00%	2.70%	2.10%
Expected life	5 years 7 months 6 days	6 years	5 years 10 months 24 days	6 years
Expected volatility	50.10%
Expected volatility, minimum		50.50%	50.10%	50.50%
Expected volatility, maximum		52.90%	50.60%	54.00%
Weighted average grant date fair value of options granted	$ 13.47	$ 3.70	$ 13.38	$ 3.31

Stock Awards - Stock-based comp

Stock Awards - Stock-based compensation expense for options and RSUs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Stock Awards
Stock-based compensation	$ 2,812	$ 793	$ 4,640	$ 1,381
Cost of revenue
Stock Awards
Stock-based compensation	324	97	526	151
Research and development
Stock Awards
Stock-based compensation	1,114	215	1,708	362
Selling and marketing
Stock Awards
Stock-based compensation	409	180	633	315
General and administrative
Stock Awards
Stock-based compensation	$ 965	$ 301	$ 1,773	$ 553

Stock Awards - Unrecognized com

Stock Awards - Unrecognized compensation cost (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)
Stock Awards
Unrecognized compensation cost (in thousands)	$ 36,463
Weighted average remaining vesting period	2 years 10 months 24 days

Net Loss Per Share Attributed40

Net Loss Per Share Attributed to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net Loss Per Share Attributed to Common Stockholders
Net loss	$ (310)	$ (1,333)	$ (1,583)	$ (3,134)
Weighted average common shares outstanding	44,581	7,943	43,099	7,896
Net loss attributable to common stockholders	$ (0.01)	$ (0.17)	$ (0.04)	$ (0.40)

Net Loss Per Share Attributed41

Net Loss Per Share Attributed to Common Stockholders - Antidilutive effect (Details) - shares shares in Thousands	Jun. 30, 2018	Jun. 30, 2017
Antidilutive securities excluded from computation of net loss per share
Antidilutive securities excluded from computation of net loss per share, amount	9,321	35,263
Stock options
Antidilutive securities excluded from computation of net loss per share
Antidilutive securities excluded from computation of net loss per share, amount	8,583	10,057
Restricted stock units
Antidilutive securities excluded from computation of net loss per share
Antidilutive securities excluded from computation of net loss per share, amount	738	617
Convertible preferred stock
Antidilutive securities excluded from computation of net loss per share
Antidilutive securities excluded from computation of net loss per share, amount		24,535
Redeemable preferred stock warrants
Antidilutive securities excluded from computation of net loss per share
Antidilutive securities excluded from computation of net loss per share, amount		54

Segment and Geographic Inform42

Segment and Geographic Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)segment	Jun. 30, 2017USD ($)
Segment Reporting Information [Line Items]
Number of reportable business segments | segment			1
Revenue	$ 35,675	$ 27,012	$ 68,244	$ 51,843
United States.
Segment Reporting Information [Line Items]
Revenue	21,705	16,811	41,847	32,559
International.
Segment Reporting Information [Line Items]
Revenue	$ 13,970	$ 10,201	$ 26,397	$ 19,284

Income Taxes (Details)

Income Taxes (Details) $ in Millions	Jun. 30, 2018USD ($)
Income Tax
Liability for uncertain tax positions	$ 0

Commitments and Contingencies44

Commitments and Contingencies (Details) $ in Thousands	Jun. 30, 2018USD ($)
Operating lease obligations
2018 (Remainder of Year)	$ 2,176
2,019	4,808
2,020	4,936
2,021	5,065
2,022	5,197
Thereafter	16,595
Total	38,777
Capital lease obligations
2018 (Remainder of Year)	3,247
2,019	5,896
2,020	5,129
2,021	2,278
2,022	150
Total	16,700
Interest on capital lease obligations
2018 (Remainder of Year)	100
2,019	138
2,020	74
2,021	29
2,022	2
Total	343
Purchase obligations
2018 (Remainder of Year)	3,639
2,019	6,778
2,020	5,808
2,021	9,017
2,022	4,625
Total	29,867
Total
2018 (Remainder of Year)	9,162
2,019	17,620
2,020	15,947
2,021	16,389
2,022	9,974
Thereafter	16,595
Total	$ 85,687