SendGrid (SEND) 10-Q 6 Nov 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 31, 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	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		47,357,102
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Revenue	$ 37,199	$ 28,316	$ 105,443	$ 80,159
Cost of revenue	8,978	7,612	26,271	21,357
Gross profit	28,221	20,704	79,172	58,802
Operating expenses:
Research and development	11,049	7,545	29,854	21,208
Selling and marketing	9,612	7,124	26,255	20,582
General and administrative	10,606	7,684	28,637	21,222
Loss on disposal of assets	22		84	2
Total operating expenses	31,289	22,353	84,830	63,014
Loss from operations	(3,068)	(1,649)	(5,658)	(4,212)
Other income (expense):
Interest income	759		1,875
Interest expense	(136)	(29)	(240)	(98)
Adjustment to redeemable preferred stock warrant liability		84		(434)
Other	22	1	17	17
Other income (expense)	645	56	1,652	(515)
Net loss before provision for income taxes	(2,423)	(1,593)	(4,006)	(4,727)
Net loss	$ (2,423)	$ (1,593)	$ (4,006)	$ (4,727)
Weighted average common shares outstanding	46,550	8,020	43,841	7,938
Net loss per share attributable to common stockholders	$ (0.05)	$ (0.20)	$ (0.09)	$ (0.60)
Comprehensive loss:
Net loss	$ (2,423)	$ (1,593)	$ (4,006)	$ (4,727)
Change in cumulative foreign currency translation adjustment	(1)	2	(4)	3
Comprehensive loss	$ (2,424)	$ (1,591)	$ (4,010)	$ (4,724)

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current Assets:
Cash and cash equivalents	$ 186,423	$ 175,496
Restricted cash	1,122
Accounts receivable - trade, net of allowance	6,756	5,765
Prepaid expenses and other current assets	6,128	9,087
Total current assets	200,429	190,348
Noncurrent Assets:
Property and equipment, net	35,858	29,192
Intangible assets, net	6,213	1,795
Other assets	964	300
Goodwill	1,648	1,648
Total noncurrent assets	44,683	32,935
Total assets	245,112	223,283
Current liabilities:
Accounts payable and accrued liabilities	13,612	13,837
Current portion of capital lease obligations	6,397	6,110
Current portion of note payable	2,005
Current portion of deferred rent	1,263	328
Other current liabilities	1,260	1,575
Total current liabilities	24,537	21,850
Long-Term Obligations, Net of Current Portion:
Capital lease obligations, net of current portion	10,165	11,095
Note payable, net of current portion	3,842
Deferred rent, net of current portion	9,231	10,054
Other long-term liabilities	487	510
Total long-term obligations, net of current portion:	23,725	21,659
Total liabilities	48,262	43,509
Commitment and contingencies (notes 5 - 14)
Stockholders’ equity:
Common stock, $0.001 par value, 250,000,000 shares authorized as of Sep. 30, 2018 and Dec. 31, 2017, 47,049,147 and 42,175,647 shares issued and outstanding as of Sep. 30, 2018 and Dec. 31, 2017, respectively	47	39
Preferred stock, $0.001 par value, 10,000,000 shares authorized as of Sep. 30, 2018 and Dec. 31, 2017. None issued or outstanding.
Additional paid-in capital	251,298	229,594
Accumulated deficit	(54,489)	(49,857)
Accumulated other comprehensive loss	(6)	(2)
Total stockholders’ equity	196,850	179,774
Total liabilities and stockholders’ equity	$ 245,112	$ 223,283

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 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	47,049,147	42,175,647
Common stock shares outstanding	47,049,147	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 STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net loss	$ (4,006)	$ (4,727)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	8,385	7,048
Stock-based compensation	8,082	2,677
Adjustment to redeemable preferred stock warrant liability		434
Non-cash interest expense	58	22
Loss on disposal of assets and restructuring of assets	340	352
Reimbursement of tenant improvements	2,464	718
Changes in operating assets and liabilities:
Accounts receivable	(1,017)	(458)
Prepaid expenses and other assets	1,244	(1,439)
Accounts payable and accrued liabilities	2,166	4,264
Other liabilities	(1,728)	1,240
Net cash flows from operating activities	15,988	10,131
Cash flows from investing activities:
Purchase of property and equipment	(11,474)	(4,806)
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	(11,447)	(6,996)
Cash flows from financing activities:
Proceeds from stock option exercises	8,337	396
Proceeds from follow-on public offering, net of $0.7 million underwriting discount	13,716
Payments for stock issuance costs	(1,346)	(1,523)
Payments for tax withholding on equity awards	(7,703)
Principal payments on capital lease obligations	(4,946)	(5,092)
Principal payments on note payable	(547)
Net cash flows from financing activities	7,511	(6,219)
Effect of foreign currency exchange rates on cash	(3)	3
Net increase (decrease) in cash, cash equivalents, and restricted cash	12,049	(3,081)
Cash, cash equivalents, and restricted cash at beginning of period	175,496	40,478
Cash, cash equivalents, and restricted cash at end of period	187,545	37,397
Supplemental disclosure of cash flow information:
Assets acquired under capitalized leases	4,470	11,124
Intangible asset and related prepaid professional services financed via note payable	6,363
Property and equipment purchases included in accounts payable	845	83
Issuance of common stock for business combination		432
Cash paid for interest	$ 234	$ 42

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Millions	9 Months Ended
	Sep. 30, 2018USD ($)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Underwriters' discount	$ 0.7

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS STOCKHOLDERS’ EQUITY - 9 months ended Sep. 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	$ 4	8,333			$ 8,337
Exercise of common stock options (in shares)	3,946,941				3,946,941
Vesting of restricted stock units (in shares)	326,559
Tax withholding associated with vesting of restricted stock units		(7,703)			$ (7,703)
Stock-based compensation		8,082			8,082
Net loss			(4,006)		(4,006)
Foreign currency translation adjustment				(4)	(4)
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		(1,346)			(1,346)
Adoption of ASU 2016-09 (Note 2) | ASU 2016-09		626	(626)
Balance at Sep. 30, 2018	$ 47	$ 251,298	$ (54,489)	$ (6)	$ 196,850
Balance (in shares) at Sep. 30, 2018	47,049,147

Organization and Description of

Organization and Description of Business	9 Months Ended
	Sep. 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. On October 15, 2018, we entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Twilio Inc. Refer to Note 14 for additional details.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 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 our 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 September 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 nine months ended September 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 August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The standard aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract (such as a hosting arrangement) with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use-software. Capitalized implementation costs will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. ASU 2018-02 is effective for us beginning January 1, 2020. Early adoption is permitted, but we do not expect to do so. We have not yet determined the effect of the standard on our consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The standard 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). The standard 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 is permitted, but we do not expect to do so. The standard requires a modified retrospective approach. However, the FASB recently approved ASU 2018-11, Leases (Topic 842), Targeted Improvements, which permits an optional effective date transition method. We anticipate electing this effective date transition method, which 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. The standard permits three practical expedients, which must be elected as a package. We expect to elect these practical expedients, which allow us to not reassess the following factors for all leases that commenced before January 1, 2019: · whether expired or existing contracts contain leases under the new definition of a lease; · lease classification for expired or existing leases; and · whether previously capitalized initial direct costs would qualify for capitalization under Topic 842. 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 will not do so. The standard permits the use of either a full or a modified retrospective transition method. We will adopt the standard using the modified retrospective method, which contains the following provisions: · For contracts not completed as of December 31, 2018, we will recognize the cumulative effect of initially applying the new revenue standard as an adjustment to our accumulated deficit; · Results for the December 31, 2018 and future reporting periods will be presented under Topic 606; and · Comparative prior period amounts will not be adjusted and continue to be reported in accordance with historic accounting guidance under Topic 605. We continue to evaluate the impact of the new standard 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	9 Months Ended
	Sep. 30, 2018
Restricted Cash.
Restricted Cash	(3) Restricted Cash Restricted cash as of September 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	9 Months Ended
	Sep. 30, 2018
Property and Equipment
Property and Equipment	(4) Property and Equipment Property and equipment consist of the following: Estimated Useful As of September 30, As of December 31, Life (in months) 2018 2017 (In thousands) Data center equipment 36 - 48 $ 32,617 $ 28,474 Leasehold improvements 71 - 131 * 14,919 8,067 Office furniture and equipment 36 - 60 5,960 4,560 Computer equipment and peripherals 36 2,979 3,276 56,475 44,377 Less accumulated depreciation (20,617) (15,185) Property and equipment, net $ 35,858 $ 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 September 30, As of December 31, 2018 2017 (In thousands) Equipment held under capital lease agreements $ 26,743 $ 24,866 Less accumulated depreciation (10,302) (7,860) Carrying value $ 16,441 $ 17,006 The following table summarizes depreciation expense, including depreciation of assets held under capital lease arrangements: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) Depreciation expense $ 2,741 $ 2,422 $ 7,743 $ 6,923

Accounts Payable and Accrued Li

Accounts Payable and Accrued Liabilities	9 Months Ended
	Sep. 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 September 30, As of December 31, 2018 2017 (In thousands) Bonus and commission $ 5,543 $ 4,031 Accounts payable 2,767 3,553 Employee benefits 1,037 557 Marketing expense 948 203 Sales tax 815 2,057 Vacation 16 1,832 Other accrued liabilities 2,486 1,604 Accounts payable and accrued liabilities $ 13,612 $ 13,837

Note Payable

Note Payable	9 Months Ended
	Sep. 30, 2018
Note Payable
Note payable	(6) Note Payable In August 2018, we entered into an arrangement with a financing company whereby we obtained $5.1 million in software and $1.3 million in related professional services in exchange for a $6.4 million note payable. On our condensed consolidated balance sheet, the software is included in “Intangible assets, net.” The related professional services are included in “Prepaid expenses and other current assets” and “Other assets” and will be amortized over six to 36 months. The note payable bears interest at 6.6% per annum compounded monthly and matures in August 2021. Principal and interest payments are paid quarterly (Note 13).

Revolving Line of Credit

Revolving Line of Credit	9 Months Ended
	Sep. 30, 2018
Revolving Line of Credit.
Revolving Line of Credit	(7) 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 2019. We had $40.0 million available to draw as of September 30, 2018 and December 31, 2017. We were in compliance with all financial covenants as of September 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 bear interest on the outstanding daily balance at the bank’s prime rate. 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	9 Months Ended
	Sep. 30, 2018
Equity Financing
Equity Financing	(8) 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	9 Months Ended
	Sep. 30, 2018
Stock Awards
Stock Awards	(9) Stock Awards In 2009, we created the 2009 Equity Incentive Plan (the”2009 Plan”), 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 2009 Plan terminated upon the effectiveness of the 2012 Plan, and 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 September 30, As of December 31, Stock Awards Available for Grant 2018 2017 (In thousands) 2017 Plan 5,667 3,504 The 2009 Plan allowed granting of stock options. 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 (3,946,941) $ 2.11 Forfeited (785,874) $ 7.25 Outstanding September 30, 2018 7,734,646 $ 6.62 Vested and exercisable September 30, 2018 3,669,373 $ 2.75 The following table summarizes information about stock options outstanding and exercisable: As of September 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 - $1.50 522,649 4.7 $ 1.12 522,649 $1.83 - $2.12 1,200,873 6.0 $ 1.84 1,189,680 $2.18 963,442 6.7 $ 2.18 756,636 $2.46 - $2.79 924,166 7.1 $ 2.55 529,172 $4.24 981,834 7.9 $ 4.24 371,705 $4.52 - $7.58 643,879 8.4 $ 5.79 151,774 $12.00 1,485,734 8.8 $ 12.00 34,831 $12.72 - $22.87 855,814 9.0 $ 16.23 112,926 $24.97 - $30.35 156,255 9.3 $ 27.87 - 7,734,646 7.5 $ 6.62 3,669,373 6.5 $ 2.75 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 825,227 $ 27.91 Vested (326,559) $ 1.26 Withheld for taxes (291,475) $ 1.26 Forfeited (47,349) $ 27.55 Outstanding at September 30, 2018 816,698 $ 27.05 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. During the three months ended September 30, 2018, there were no options granted. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Fair value of common stock - $11.95 - $11.95 $22.87 - $30.35 $4.47 - $11.95 Risk-free interest rate - 1.9% - 2.0% 2.4% - 2.7% 1.8% - 2.1% Expected life - 6.4 years 5.9 years 6.2 years Expected dividend yield - - - - Expected volatility - 46.5% - 52.6% 50.1% - 50.6% 46.5% - 54.0% Weighted average grant date fair value of the options granted - $6.26 $13.38 $5.06 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, RSUs, and our employee stock purchase plan: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) Cost of revenue $ 371 $ 186 $ 897 $ 337 Research and development 1,308 387 3,016 749 Selling and marketing 532 281 1,165 596 General and administrative 1,231 442 3,004 995 Stock-based compensation $ 3,442 $ 1,296 $ 8,082 $ 2,677 The following table summarizes our unrecognized compensation cost: As of September 30, 2018 Unrecognized compensation cost (in thousands) $ 36,936 Weighted average remaining vesting period (in years) 2.4

Net Loss Per Share Attributed t

Net Loss Per Share Attributed to Common Stockholders	9 Months Ended
	Sep. 30, 2018
Net Loss Per Share Attributed to Common Stockholders
Net Loss Per Share Attributed to Common Stockholders	(10) 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: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands, except per share amounts) Net loss $ (2,423) $ (1,593) $ (4,006) $ (4,727) Weighted average common shares outstanding 46,550 8,020 43,841 7,938 Net loss attributable to common stockholders $ (0.05) $ (0.20) $ (0.09) $ (0.60) 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 September 30, As of September 30, 2018 2017 (In thousands) Stock options 7,735 11,592 Restricted stock units 817 617 Convertible preferred stock - 24,535 Redeemable preferred stock warrants - 54 8,552 36,798

Segment and Geographic Informat

Segment and Geographic Information	9 Months Ended
	Sep. 30, 2018
Segment and Geographic Information
Segment and Geographic Information	(11) Segment and Geographic Information Our Chief Executive Officer and Chief Financial Officer / Chief Operating Officer are our 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: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) United States $ 22,440 $ 17,537 $ 64,287 $ 50,096 International 14,759 10,779 41,156 30,063 Total revenue $ 37,199 $ 28,316 $ 105,443 $ 80,159

Income Tax

Income Tax	9 Months Ended
	Sep. 30, 2018
Income Tax
Income Tax	(12) 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 September 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	9 Months Ended
	Sep. 30, 2018
Commitments and Contingencies
Commitments and Contingencies	(13) 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 September 30, 2018 2018 2019 2020 2021 2022 Thereafter Total (In thousands) Operating lease obligations $ 1,177 $ 4,808 $ 4,936 $ 5,065 $ 5,197 $ 16,595 $ 37,778 Capital lease obligations 1,698 6,262 5,516 2,686 400 - 16,562 Interest on capital lease obligations 65 206 121 55 6 - 453 Note payable 489 2,039 2,176 1,143 - - 5,847 Interest on note payable 93 291 153 22 - 559 Purchase obligations 1,846 6,858 5,808 9,017 4,625 - 28,154 Total $ 5,368 $ 20,464 $ 18,710 $ 17,988 $ 10,228 $ 16,595 $ 89,353 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.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2018
Subsequent Events
Subsequent Events	(14) Subsequent Events On October 15, 2018, we entered into the Merger Agreement with Twilio Inc., a Delaware corporation (“Twilio”), and Topaz Merger Subsidiary, Inc., a Delaware corporation, and direct wholly owned subsidiary of Twilio (“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub will be merged with and into SendGrid and SendGrid will continue as the surviving corporation and as a direct wholly owned subsidiary of Twilio (the “Merger”). In connection with the Merger, all of our issued and outstanding shares of common stock will be converted into the right to receive (a) 0.485 of a share of Twilio’s Class A Common Stock, par value $0.001 per share plus (b) any cash payable in lieu of fractional shares of Twilio’s Class A Common Stock otherwise issuable as merger consideration. The Merger is intended to qualify as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). Consummation of the Merger is subject to certain closing conditions, including: · the absence of certain legal impediments; · the expiration or termination of the required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; · the effectiveness of a registration statement on Form S-4 to be filed with the Securities and Exchange Commission; · adoption of the Merger Agreement by the holders of a majority of our outstanding common stock at our stockholders’ meeting; · approval of the issuance of shares of Twilio Class A Common Stock in the Merger by the holders of a majority of the votes of Twilio’s Class A Common Stock and Class B Common Stock voting together as a single class, present in person or by proxy, and entitled to vote thereon, at the Twilio stockholders meeting; and · receipt of opinions from legal counsel regarding the intended tax treatment of the Merger as a tax-free reorganization under the provisions of Section 368(a) of the Code. The parties to the Merger Agreement have made certain representations, warranties, and covenants in the Merger Agreement, including covenants regarding the conduct of their respective businesses and the use of reasonable best efforts to cause the conditions to the Merger to be satisfied. The Merger Agreement contains certain termination rights for both SendGrid and Twilio and further provides that, in connection with our termination of the Merger Agreement under certain circumstances, including our termination to accept and enter into a definitive agreement with respect to a superior proposal, we must pay Twilio a termination fee of $69.0 million. In connection with the termination of the Merger Agreement by Twilio under certain circumstances, including termination by Twilio to accept and enter into a definitive agreement with respect to a superior proposal, Twilio must pay us a termination fee of $120.0 million. Further, in connection with the termination of the Merger Agreement for Twilio’s failure to obtain stockholder approval, Twilio will owe us a termination fee of $120.0 million if the shares of Twilio Class B Common Stock subject to certain proxies fail to be voted in favor of the issuance of Class A Common Stock pursuant to the Merger Agreement. In connection with execution of the Merger Agreement, we incurred a financial advisory fee of $4.0 million.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 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	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 our 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 September 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 nine months ended September 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 August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The standard aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract (such as a hosting arrangement) with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use-software. Capitalized implementation costs will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. ASU 2018-02 is effective for us beginning January 1, 2020. Early adoption is permitted, but we do not expect to do so. We have not yet determined the effect of the standard on our consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The standard 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). The standard 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 is permitted, but we do not expect to do so. The standard requires a modified retrospective approach. However, the FASB recently approved ASU 2018-11, Leases (Topic 842), Targeted Improvements, which permits an optional effective date transition method. We anticipate electing this effective date transition method, which 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. The standard permits three practical expedients, which must be elected as a package. We expect to elect these practical expedients, which allow us to not reassess the following factors for all leases that commenced before January 1, 2019: · whether expired or existing contracts contain leases under the new definition of a lease; · lease classification for expired or existing leases; and · whether previously capitalized initial direct costs would qualify for capitalization under Topic 842. 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 will not do so. The standard permits the use of either a full or a modified retrospective transition method. We will adopt the standard using the modified retrospective method, which contains the following provisions: · For contracts not completed as of December 31, 2018, we will recognize the cumulative effect of initially applying the new revenue standard as an adjustment to our accumulated deficit; · Results for the December 31, 2018 and future reporting periods will be presented under Topic 606; and · Comparative prior period amounts will not be adjusted and continue to be reported in accordance with historic accounting guidance under Topic 605. We continue to evaluate the impact of the new standard 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)	9 Months Ended
	Sep. 30, 2018
Property and Equipment
Schedule of property and equipment	Estimated Useful As of September 30, As of December 31, Life (in months) 2018 2017 (In thousands) Data center equipment 36 - 48 $ 32,617 $ 28,474 Leasehold improvements 71 - 131 * 14,919 8,067 Office furniture and equipment 36 - 60 5,960 4,560 Computer equipment and peripherals 36 2,979 3,276 56,475 44,377 Less accumulated depreciation (20,617) (15,185) Property and equipment, net $ 35,858 $ 29,192 *
Schedule of capital lease arrangements	As of September 30, As of December 31, 2018 2017 (In thousands) Equipment held under capital lease agreements $ 26,743 $ 24,866 Less accumulated depreciation (10,302) (7,860) Carrying value $ 16,441 $ 17,006
Schedule of depreciation expense	Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) Depreciation expense $ 2,741 $ 2,422 $ 7,743 $ 6,923

Accounts Payable and Accrued _2

Accounts Payable and Accrued Liabilities (Tables)	9 Months Ended
	Sep. 30, 2018
Accounts Payable and Accrued Liabilities
Schedule of accounts payable and accrued liabilities	As of September 30, As of December 31, 2018 2017 (In thousands) Bonus and commission $ 5,543 $ 4,031 Accounts payable 2,767 3,553 Employee benefits 1,037 557 Marketing expense 948 203 Sales tax 815 2,057 Vacation 16 1,832 Other accrued liabilities 2,486 1,604 Accounts payable and accrued liabilities $ 13,612 $ 13,837

Stock Awards (Tables)

Stock Awards (Tables)	9 Months Ended
	Sep. 30, 2018
Stock Awards
Schedule of stock awards available for grant	As of September 30, As of December 31, Stock Awards Available for Grant 2018 2017 (In thousands) 2017 Plan 5,667 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 (3,946,941) $ 2.11 Forfeited (785,874) $ 7.25 Outstanding September 30, 2018 7,734,646 $ 6.62 Vested and exercisable September 30, 2018 3,669,373 $ 2.75
Schedule of information about stock options outstanding and exercisable	As of September 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 - $1.50 522,649 4.7 $ 1.12 522,649 $1.83 - $2.12 1,200,873 6.0 $ 1.84 1,189,680 $2.18 963,442 6.7 $ 2.18 756,636 $2.46 - $2.79 924,166 7.1 $ 2.55 529,172 $4.24 981,834 7.9 $ 4.24 371,705 $4.52 - $7.58 643,879 8.4 $ 5.79 151,774 $12.00 1,485,734 8.8 $ 12.00 34,831 $12.72 - $22.87 855,814 9.0 $ 16.23 112,926 $24.97 - $30.35 156,255 9.3 $ 27.87 - 7,734,646 7.5 $ 6.62 3,669,373 6.5 $ 2.75
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 825,227 $ 27.91 Vested (326,559) $ 1.26 Withheld for taxes (291,475) $ 1.26 Forfeited (47,349) $ 27.55 Outstanding at September 30, 2018 816,698 $ 27.05
Schedule of estimates and assumptions used and the resulting average grant date fair value of options granted	Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Fair value of common stock - $11.95 - $11.95 $22.87 - $30.35 $4.47 - $11.95 Risk-free interest rate - 1.9% - 2.0% 2.4% - 2.7% 1.8% - 2.1% Expected life - 6.4 years 5.9 years 6.2 years Expected dividend yield - - - - Expected volatility - 46.5% - 52.6% 50.1% - 50.6% 46.5% - 54.0% Weighted average grant date fair value of the options granted - $6.26 $13.38 $5.06
Schedule of stock-based compensation expense	Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) Cost of revenue $ 371 $ 186 $ 897 $ 337 Research and development 1,308 387 3,016 749 Selling and marketing 532 281 1,165 596 General and administrative 1,231 442 3,004 995 Stock-based compensation $ 3,442 $ 1,296 $ 8,082 $ 2,677
Schedule of unrecognized compensation cost (net of expected forfeitures)	As of September 30, 2018 Unrecognized compensation cost (in thousands) $ 36,936 Weighted average remaining vesting period (in years) 2.4

Net Loss Per Share Attributed_2

Net Loss Per Share Attributed to Common Stockholders (Tables)	9 Months Ended
	Sep. 30, 2018
Net Loss Per Share Attributed to Common Stockholders
Schedule of net loss per share	Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands, except per share amounts) Net loss $ (2,423) $ (1,593) $ (4,006) $ (4,727) Weighted average common shares outstanding 46,550 8,020 43,841 7,938 Net loss attributable to common stockholders $ (0.05) $ (0.20) $ (0.09) $ (0.60)
Schedule of antidilutive securities excluded from computation of earnings per share	As of September 30, As of September 30, 2018 2017 (In thousands) Stock options 7,735 11,592 Restricted stock units 817 617 Convertible preferred stock - 24,535 Redeemable preferred stock warrants - 54 8,552 36,798

Segment and Geographic Inform_2

Segment and Geographic Information (Tables)	9 Months Ended
	Sep. 30, 2018
Segment and Geographic Information
Schedule of revenue by geographic area	Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) United States $ 22,440 $ 17,537 $ 64,287 $ 50,096 International 14,759 10,779 41,156 30,063 Total revenue $ 37,199 $ 28,316 $ 105,443 $ 80,159

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2018
Commitments and Contingencies
Schedule of commitments on contracts	Payments due by Period As of September 30, 2018 2018 2019 2020 2021 2022 Thereafter Total (In thousands) Operating lease obligations $ 1,177 $ 4,808 $ 4,936 $ 5,065 $ 5,197 $ 16,595 $ 37,778 Capital lease obligations 1,698 6,262 5,516 2,686 400 - 16,562 Interest on capital lease obligations 65 206 121 55 6 - 453 Note payable 489 2,039 2,176 1,143 - - 5,847 Interest on note payable 93 291 153 22 - 559 Purchase obligations 1,846 6,858 5,808 9,017 4,625 - 28,154 Total $ 5,368 $ 20,464 $ 18,710 $ 17,988 $ 10,228 $ 16,595 $ 89,353

Organization and Description _2

Organization and Description of Business (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	9 Months Ended
	Nov. 30, 2017	Sep. 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 Accoun_3

Summary of Significant Accounting Policies - Policies (Details) - USD ($) $ in Thousands	Jan. 01, 2018	Sep. 30, 2018	Sep. 30, 2017	Jun. 30, 2018
Accounting Policies [Line Items]
Restricted cash		$ 1,122
(Decrease) in cash used in investing activities		$ (11,447)	$ (6,996)
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		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Property and Equipment
Property and equipment, gross	$ 56,475		$ 56,475		$ 44,377
Less accumulated depreciation	(20,617)		(20,617)		(15,185)
Property and equipment, net	35,858		35,858		29,192
Equipment held under capital lease agreements	26,743		26,743		24,866
Less accumulated depreciation	(10,302)		(10,302)		(7,860)
Carrying value	16,441		16,441		17,006
Depreciation expense	2,741	$ 2,422	7,743	$ 6,923
Data center equipment
Property and Equipment
Data center equipment	32,617		$ 32,617		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	14,919		$ 14,919		8,067
Leasehold improvements | Minimum
Property and Equipment
Estimated Useful Life (in months)			71 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	5,960		$ 5,960		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	$ 2,979		$ 2,979		$ 3,276

Accounts Payable and Accrued _3

Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Accounts Payable and Accrued Liabilities
Bonus and commission	$ 5,543	$ 4,031
Accounts payable	2,767	3,553
Employee benefits	1,037	557
Marketing expense	948	203
Sales tax	815	2,057
Vacation	16	1,832
Other accrued liabilities	2,486	1,604
Accounts Payable and accrued liabilities	$ 13,612	$ 13,837

Note Payable (Details)

Note Payable (Details) - USD ($) $ in Thousands	1 Months Ended
	Aug. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Intangible assets, net		$ 6,213	$ 1,795
Note payable	$ 6,400
Interest	6.60%
Minimum
Debt Instrument [Line Items]
Amortization period (in months)	6 months
Maximum
Debt Instrument [Line Items]
Amortization period (in months)	36 months
Software
Debt Instrument [Line Items]
Intangible assets, net	$ 5,100
Software-related professional services
Debt Instrument [Line Items]
Prepaid expenses and other assets	$ 1,300

Revolving Line of Credit (Detai

Revolving Line of Credit (Details) - Revolving line of credit - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Revolving Line of Credit
Maximum borrowing capacity	$ 40
Amount outstanding	0	$ 0
Borrowing activity	$ 0	$ 0
Trailing period	3 months
Restriction, aggregate cash and cash equivalents invested (as a percent)	40.00%

Equity Financing (Details)

Equity Financing (Details) - USD ($) $ / shares in Units, $ in Millions	Apr. 10, 2018	Sep. 30, 2018	Dec. 31, 2017
Equity Financing [Line Items]
Common stock shares issued		47,049,147	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	9 Months Ended
	Sep. 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	5,667	3,504

Stock Awards - Restricted sto_2

Stock Awards - Restricted stock unit activity - Stock option activity (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2018$ / sharesshares	Sep. 30, 2018$ / sharesshares
Stock Options
Outstanding at the beginning (in shares) | shares		12,217,721
Granted (in shares) | shares	0	249,740
Exercised (in shares) | shares		(3,946,941)
Forfeited (in shares) | shares		(785,874)
Outstanding at the ending (in shares) | shares	7,734,646	7,734,646
Vested and exercisable (in shares) | shares	3,669,373	3,669,373
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		2.11
Forfeited (in dollars per share) | $ / shares		7.25
Outstanding at the ending (in dollars per share) | $ / shares	$ 6.62	6.62
Vested and exercisable at the ending (in dollars per share) | $ / shares	$ 2.75	$ 2.75

Stock Awards - Restricted sto_3

Stock Awards - Restricted stock unit activity - Stock options outstanding and exercisable (Details)	9 Months Ended
	Sep. 30, 2018$ / sharesshares
Summary of stock options outstanding an exercisable
Options Outstanding, Number of Options Outstanding | shares	7,734,646
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	7 years 6 months
Options Outstanding, Weighted Average Exercise Price	$ 6.62
Options Exercisable, Number of Options Outstanding | shares	3,669,373
Options Exercisable, Weighted Average Remaining Contractual Term (In Years)	6 years 6 months
Options Exercisable, Weighted Average Exercise Price	$ 2.75
$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	522,649
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	4 years 8 months 12 days
Options Outstanding, Weighted Average Exercise Price	$ 1.12
Options Exercisable, Number of Options Outstanding | shares	522,649
$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	1,200,873
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	6 years
Options Outstanding, Weighted Average Exercise Price	$ 1.84
Options Exercisable, Number of Options Outstanding | shares	1,189,680
$ 2.18
Summary of stock options outstanding an exercisable
Exercise Price (in dollars per share)	$ 2.18
Options Outstanding, Number of Options Outstanding | shares	963,442
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	6 years 8 months 12 days
Options Outstanding, Weighted Average Exercise Price	$ 2.18
Options Exercisable, Number of Options Outstanding | shares	756,636
$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	924,166
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	7 years 1 month 6 days
Options Outstanding, Weighted Average Exercise Price	$ 2.55
Options Exercisable, Number of Options Outstanding | shares	529,172
$ 4.24
Summary of stock options outstanding an exercisable
Exercise Price (in dollars per share)	$ 4.24
Options Outstanding, Number of Options Outstanding | shares	981,834
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	7 years 10 months 24 days
Options Outstanding, Weighted Average Exercise Price	$ 4.24
Options Exercisable, Number of Options Outstanding | shares	371,705
$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	643,879
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	8 years 4 months 24 days
Options Outstanding, Weighted Average Exercise Price	$ 5.79
Options Exercisable, Number of Options Outstanding | shares	151,774
$ 12
Summary of stock options outstanding an exercisable
Exercise Price (in dollars per share)	$ 12
Options Outstanding, Number of Options Outstanding | shares	1,485,734
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	8 years 9 months 18 days
Options Outstanding, Weighted Average Exercise Price	$ 12
Options Exercisable, Number of Options Outstanding | shares	34,831
$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	855,814
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	9 years
Options Outstanding, Weighted Average Exercise Price	$ 16.23
Options Exercisable, Number of Options Outstanding | shares	112,926
$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	156,255
Options Outstanding, Weighted Average Remaining Contractual Term (In Years)	9 years 3 months 18 days
Options Outstanding, Weighted Average Exercise Price	$ 27.87

Stock Awards - Restricted sto_4

Stock Awards - Restricted stock unit activity (Details) - Restricted stock units	9 Months Ended
	Sep. 30, 2018$ / sharesshares
Restricted Stock Units
Outstanding (in shares) | shares	656,854
Granted (in shares) | shares	825,227
Vested (in shares) | shares	(326,559)
Withheld for taxes (in shares) | shares	(291,475)
Forfeited (in shares) | shares	(47,349)
Outstanding (in shares) | shares	816,698
Weighted Average Grant Date Fair Value
Outstanding (in dollars per share) | $ / shares	$ 2.54
Granted (in dollars per share) | $ / shares	27.91
Vested (in dollars per share) | $ / shares	1.26
Withheld for taxes (in dollars per share) | $ / shares	1.26
Forfeited (in dollars per share) | $ / shares	27.55
Outstanding (in dollars per share) | $ / shares	$ 27.05

Stock Awards - Estimates and as

Stock Awards - Estimates and assumptions (Details) - $ / shares	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Estimates and assumptions used
Fair value of common stock, minimum	$ 11.95	$ 22.87	$ 4.47
Fair value of common stock, maximum	$ 11.95	$ 30.35	$ 11.95
Risk-free interest rate, minimum	1.90%	2.40%	1.80%
Risk-free interest rate, maximum	2.00%	2.70%	2.10%
Expected life	6 years 4 months 24 days	5 years 10 months 24 days	6 years 2 months 12 days
Expected dividend yield		0.00%
Expected volatility, minimum	46.50%	50.10%	46.50%
Expected volatility, maximum	52.60%	50.60%	54.00%
Weighted average grant date fair value of the options granted	$ 6.26	$ 13.38	$ 5.06

Stock Awards - Stock-based comp

Stock Awards - Stock-based compensation expense for options and RSUs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Stock Awards
Stock-based compensation	$ 3,442	$ 1,296	$ 8,082	$ 2,677
Cost of revenue
Stock Awards
Stock-based compensation	371	186	897	337
Research and development
Stock Awards
Stock-based compensation	1,308	387	3,016	749
Selling and marketing
Stock Awards
Stock-based compensation	532	281	1,165	596
General and administrative
Stock Awards
Stock-based compensation	$ 1,231	$ 442	$ 3,004	$ 995

Stock Awards - Unrecognized com

Stock Awards - Unrecognized compensation cost (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2018USD ($)
Stock Awards
Unrecognized compensation cost (in thousands)	$ 36,936
Weighted average remaining vesting period (in years)	2 years 4 months 24 days

Net Loss Per Share Attributed_3

Net Loss Per Share Attributed to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net Loss Per Share Attributed to Common Stockholders
Net loss	$ (2,423)	$ (1,593)	$ (4,006)	$ (4,727)
Weighted average common shares outstanding	46,550	8,020	43,841	7,938
Net loss attributable to common stockholders	$ (0.05)	$ (0.20)	$ (0.09)	$ (0.60)

Net Loss Per Share Attributed_4

Net Loss Per Share Attributed to Common Stockholders - Antidilutive effect (Details) - shares shares in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Antidilutive securities excluded from computation of net loss per share
Antidilutive securities excluded from computation of net loss per share, amount	8,552	36,798
Stock options
Antidilutive securities excluded from computation of net loss per share
Antidilutive securities excluded from computation of net loss per share, amount	7,735	11,592
Restricted stock units
Antidilutive securities excluded from computation of net loss per share
Antidilutive securities excluded from computation of net loss per share, amount	817	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 Inform_3

Segment and Geographic Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018USD ($)	Sep. 30, 2017USD ($)	Sep. 30, 2018USD ($)segment	Sep. 30, 2017USD ($)
Segment Reporting Information [Line Items]
Number of reportable business segments | segment			1
Revenue	$ 37,199	$ 28,316	$ 105,443	$ 80,159
United States.
Segment Reporting Information [Line Items]
Revenue	22,440	17,537	64,287	50,096
International.
Segment Reporting Information [Line Items]
Revenue	$ 14,759	$ 10,779	$ 41,156	$ 30,063

Income Tax (Details)

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

Commitments and Contingencies_2

Commitments and Contingencies (Details) $ in Thousands	Sep. 30, 2018USD ($)
Operating lease obligations
2018 (Remainder of Year)	$ 1,177
2,019	4,808
2,020	4,936
2,021	5,065
2,022	5,197
Thereafter	16,595
Total	37,778
Capital lease obligations
2018 (Remainder of Year)	1,698
2,019	6,262
2,020	5,516
2,021	2,686
2,022	400
Total	16,562
Interest on capital lease obligations
2018 (Remainder of Year)	65
2,019	206
2,020	121
2,021	55
2,022	6
Total	453
Note payable
2018 (Remainder of Year)	489
2,019	2,039
2,020	2,176
2,021	1,143
Total	5,847
Interest on note payable
2018 (Remainder of Year)	93
2,019	291
2,020	153
2,021	22
Total	559
Purchase obligations
2018 (Remainder of Year)	1,846
2,019	6,858
2,020	5,808
2,021	9,017
2,022	4,625
Total	28,154
Total
2018 (Remainder of Year)	5,368
2,019	20,464
2,020	18,710
2,021	17,988
2,022	10,228
Thereafter	16,595
Total	$ 89,353

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions	Oct. 15, 2018	Sep. 30, 2018	Dec. 31, 2017
Subsequent events
Common stock par value		$ 0.001	$ 0.001
Subsequent event | Merger Agreement with Twilio Inc. and Topaz Merger Subsidiary, Inc.
Subsequent events
Share price	$ 0.485
Common stock par value	$ 0.001
Termination fee payable under certain circumstances	$ 69
Termination fee receivable under certain circumstances	120
Termination fee receivable for failure to obtain stockholder approval	120
Financial advisory fee	$ 4