Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 26, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | Marketo, Inc. | ||
Entity Central Index Key | 1,490,660 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 467.5 | ||
Entity Common Stock, Shares Outstanding | 44,384,855 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 107,218 | $ 112,644 |
Accounts receivable, net of allowances of $557 and $393 for 2015 and 2014 respectively | 50,678 | 37,867 |
Prepaid expenses and other current assets | 9,073 | 5,756 |
Total current assets | 166,969 | 156,267 |
Property and equipment, net | 21,323 | 16,832 |
Goodwill | 29,201 | 29,201 |
Intangible assets, net | 5,455 | 7,076 |
Other assets | 2,130 | 1,035 |
Total assets | 225,078 | 210,411 |
Current liabilities: | ||
Accounts payable | 4,265 | 3,901 |
Accrued expenses and other current liabilities | 25,706 | 20,691 |
Deferred revenue | 91,735 | 62,945 |
Current portion of credit facility | 2,174 | 2,719 |
Total current liabilities | 123,880 | 90,256 |
Credit facility, net of current portion | 478 | 2,653 |
Deferred revenue, long-term | 230 | |
Other liabilities | 2,722 | 3,526 |
Total liabilities | $ 127,310 | $ 96,435 |
Commitments and contingencies (Note 8) | ||
Redeemable non-controlling interests | $ 4,643 | $ 800 |
Stockholder's equity: | ||
Common stock, par value $0.0001 per share - 1,000,000 shares authorized as of December 31, 2015 and 2014; 43,606 and 41,481 shares issued and outstanding as of December 31, 2015 and 2014, respectively | 4 | 4 |
Additional paid-in capital | 344,727 | 297,420 |
Accumulated other comprehensive loss | (274) | (350) |
Accumulated deficit | (251,332) | (183,898) |
Total stockholders' equity | 93,125 | 113,176 |
Total liabilities, redeemable non-controlling interests and stockholders' equity | $ 225,078 | $ 210,411 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets | ||
Accounts receivable, allowances (in dollars) | $ 557 | $ 393 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Common Stock, Shares, Issued | 43,606 | 41,481 |
Common Stock, Shares, Outstanding | 43,606 | 41,481 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue: | |||
Subscription and support | $ 183,658 | $ 131,060 | $ 85,095 |
Professional services and other | 26,211 | 18,894 | 10,823 |
Total revenue | 209,869 | 149,954 | 95,918 |
Cost of revenue: | |||
Subscription and support | 40,632 | 28,742 | 24,681 |
Professional services and other | 31,484 | 22,059 | 13,298 |
Total cost of revenue | 72,116 | 50,801 | 37,979 |
Gross profit: | |||
Subscription and support | 143,026 | 102,318 | 60,414 |
Professional services and other | (5,273) | (3,165) | (2,475) |
Total gross profit | 137,753 | 99,153 | 57,939 |
Operating expenses: | |||
Research and development | 39,077 | 30,337 | 23,321 |
Sales and marketing | 129,072 | 98,843 | 62,769 |
General and administrative | 38,056 | 25,583 | 18,655 |
Total operating expenses | 206,205 | 154,763 | 104,745 |
Loss from operations | (68,452) | (55,610) | (46,806) |
Other income (expense), net | 81 | 178 | (526) |
Loss before provision (benefit) for income taxes | (68,371) | (55,432) | (47,332) |
Provision (benefit) for income taxes | 708 | (477) | 28 |
Net loss | (69,079) | (54,955) | (47,360) |
Net loss and adjustment attributable to redeemable non-controlling interests (Note 3) | (2,418) | 618 | |
Net loss attributable to Marketo | $ (71,497) | $ (54,337) | $ (47,360) |
Net loss per share of common stock, basic and diluted (in dollars per share) | $ (1.68) | $ (1.35) | $ (1.92) |
Shares used in computing net loss per share of common stock, basic and diluted (in shares) | 42,504 | 40,385 | 24,709 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Comprehensive Loss | |||
Net loss | $ (69,079) | $ (54,955) | $ (47,360) |
Other comprehensive gain (loss): | |||
Foreign currency gain (loss) | 56 | (715) | 53 |
Total comprehensive loss | (69,023) | (55,670) | (47,307) |
Net loss attributable to redeemable non-controlling interests (excluding adjustment to redeemable non-controlling interests) | 1,645 | 618 | |
Other comprehensive loss attributable to redeemable non-controlling interests | 20 | 167 | |
Comprehensive loss attributable to Marketo | $ (67,358) | $ (54,885) | $ (47,307) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balance at Dec. 31, 2012 | $ 119,121 | $ 6,499 | $ 145 | $ (82,201) | $ 43,564 | |
Balance (in shares) at Dec. 31, 2012 | 25,876 | 3,195 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of common stock in connection with initial public offering, net of underwriting discounts | $ 1 | 80,505 | 80,506 | |||
Issuance of common stock in connection with initial public offering, net of underwriting discounts (in shares) | 6,659 | |||||
Issuance of common stock in connection with private placement | 6,500 | 6,500 | ||||
Issuance of common stock in connection with private placement (in shares) | 500 | |||||
Issuance of common stock in connection with follow-on offering, net of underwriting discounts | 22,519 | 22,519 | ||||
Issuance of common stock in connection with follow-on offering, net of underwriting discounts (in shares) | 662 | |||||
Issuance of common stock in connection with acquisition | 14,069 | 14,069 | ||||
Issuance of common stock in connection with acquisition (in shares) | 428 | |||||
Cost incurred with registration of common stock issued in connection with acquisition of Insightera | (226) | (226) | ||||
Costs incurred with initial public offering and follow-on offering | (4,079) | (4,079) | ||||
Conversion of preferred stock to common stock | $ (119,121) | $ 3 | 119,118 | |||
Conversion of preferred stock to common stock (in shares) | (25,876) | 25,876 | ||||
Issuance of common stock upon exercise and early exercise of stock options | 4,278 | 4,278 | ||||
Issuance of common stock upon exercise and early exercise of stock options (in shares) | 1,778 | |||||
Vesting of restricted stock units (in shares) | 169 | |||||
Withholding taxes for the net share settlement of an equity award | (124) | (124) | ||||
Withholding taxes for the net share settlement of an equity award (in shares) | (5) | |||||
Repurchase of common stock (in shares) | (12) | |||||
Vesting of early exercised options | 655 | 655 | ||||
Stock-based compensation expense | 8,087 | 8,087 | ||||
Net loss | (47,360) | (47,360) | ||||
Foreign currency translation adjustments | 53 | 53 | ||||
Balance at Dec. 31, 2013 | $ 4 | 257,801 | 198 | (129,561) | 128,442 | |
Balance (in shares) at Dec. 31, 2013 | 39,250 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Costs incurred with follow-on offering | 62 | 62 | ||||
Issuance of common stock in connection with acquisition | 4,756 | 4,756 | ||||
Issuance of common stock in connection with acquisition (in shares) | 141 | |||||
Issuance of common stock upon exercise and early exercise of stock options | 5,508 | 5,508 | ||||
Issuance of common stock upon exercise and early exercise of stock options (in shares) | 1,534 | |||||
Issuance of common stock under employee stock purchase plan | 6,143 | 6,143 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 422 | |||||
Investment by redeemable non-controlling interests | 369 | 369 | ||||
Vesting of restricted stock units (in shares) | 234 | |||||
Withholding taxes for the net share settlement of an equity award | (2,641) | (2,641) | ||||
Withholding taxes for the net share settlement of an equity award (in shares) | (87) | |||||
Repurchase of common stock (in shares) | (13) | |||||
Vesting of early exercised options | 279 | 279 | ||||
Stock-based compensation expense | 25,143 | 25,143 | ||||
Net loss | (54,337) | (54,337) | ||||
Foreign currency translation adjustments | (548) | (548) | ||||
Balance at Dec. 31, 2014 | $ 4 | 297,420 | (350) | (183,898) | 113,176 | |
Balance (in shares) at Dec. 31, 2014 | 41,481 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of common stock upon exercise and early exercise of stock options | 5,999 | 5,999 | ||||
Issuance of common stock upon exercise and early exercise of stock options (in shares) | 1,292 | |||||
Issuance of common stock under employee stock purchase plan | 5,629 | 5,629 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 235 | |||||
Investment by redeemable non-controlling interests | 233 | 233 | ||||
Vesting of restricted stock units (in shares) | 633 | |||||
Withholding taxes for the net share settlement of an equity award | (740) | (740) | ||||
Withholding taxes for the net share settlement of an equity award (in shares) | (27) | |||||
Repurchase of common stock (in shares) | (8) | |||||
Vesting of early exercised options | 140 | 140 | ||||
Stock-based compensation expense | 40,109 | 40,109 | ||||
Net loss | (4,063) | (67,434) | (71,497) | |||
Foreign currency translation adjustments | 76 | 76 | ||||
Balance at Dec. 31, 2015 | $ 4 | $ 344,727 | $ (274) | $ (251,332) | $ 93,125 | |
Balance (in shares) at Dec. 31, 2015 | 43,606 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net loss attributable to Marketo | $ (71,497) | $ (54,337) | $ (47,360) |
Net loss and adjustment attributable to redeemable non-controlling interests (Note 3) | (2,418) | 618 | |
Net loss | (69,079) | (54,955) | (47,360) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 13,937 | 9,475 | 4,621 |
Stock-based compensation expense | 39,182 | 25,120 | 8,075 |
Deferred income taxes | 568 | (672) | (65) |
Provision for doubtful accounts | 738 | 417 | 452 |
Loss on disposal of assets | 7 | 1 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (13,952) | (11,779) | (13,154) |
Prepaid expenses and other current assets | (4,489) | (1,388) | (698) |
Other assets | (834) | (709) | (46) |
Accounts payable | 1,628 | (342) | 2,050 |
Accrued expenses and other current liabilities | 5,213 | (1,599) | 13,177 |
Deferred revenue | 29,686 | 22,371 | 20,438 |
Deferred rent | (355) | 37 | 141 |
Net cash provided by (used in) operating activities | 2,250 | (14,023) | (12,369) |
Cash flows from investing activities: | |||
Increase in restricted cash | (215) | ||
Purchase of property and equipment | (15,849) | (8,378) | (11,401) |
Cash provided by (used in) acquisition, net of cash acquired | 326 | (6,216) | |
Capitalized software development | (1,017) | (645) | (459) |
Net cash used in investing activities | (17,081) | (8,697) | (18,076) |
Cash flows from financing activities: | |||
Proceeds from initial public offering, net of underwriting discount | 80,506 | ||
Proceeds from private placement | 6,500 | ||
Proceeds from follow-on offering, net of underwriting discount | 22,519 | ||
Proceeds from issuance of common stock upon exercise of stock options | 5,999 | 5,540 | 4,985 |
Proceeds from employee stock purchase plan | 5,629 | 6,143 | |
Repurchase of unvested common stock from terminated employees | (38) | (49) | (22) |
Withholding taxes remitted for the net share settlement of an equity awards | (740) | (2,638) | (124) |
Proceeds from issuance of debt | 4,500 | ||
Repayment of debt | (2,719) | (2,187) | (582) |
Investment from non-controlling interest | 1,678 | 1,953 | |
Payment incurred for common stock registration related to acquisition | (319) | (35) | |
Payment of initial public offering costs and follow-on offering costs | (104) | (3,820) | |
Net cash provided by financing activities | 9,809 | 8,339 | 114,427 |
Effect of foreign exchange rate changes on cash and cash equivalents | (404) | (1,274) | 70 |
Net increase (decrease) in cash and cash equivalents | (5,426) | (15,655) | 84,052 |
Cash and cash equivalents - beginning of period | 112,644 | 128,299 | 44,247 |
Cash and cash equivalents - end of period | 107,218 | 112,644 | 128,299 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 168 | 272 | 211 |
Cash paid for income taxes | 394 | 80 | 33 |
Supplemental disclosure of noncash investing and financing activities: | |||
Conversion of convertible preferred stock into common stock upon initial public offering | 119,121 | ||
Convertible preferred stock and common stock issued in connection with acquisitions, including options assumed | 4,756 | 14,069 | |
Vesting of early exercised options | 140 | 279 | 655 |
Unpaid and accrued fixed assets | 115 | 1,330 | 376 |
Property and equipment acquired through tenant improvement allowance | $ 211 | $ 973 | $ 1,262 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies and Estimates | 12 Months Ended |
Dec. 31, 2015 | |
The Company and Summary of Significant Accounting Policies and Estimates | |
The Company and Summary of Significant Accounting Policies and Estimates | 1. The Company and Summary of Significant Accounting Policies and Estimates Business Marketo, Inc. (Marketo or the Company) was incorporated in the state of California on January 20, 2006. The Company was reincorporated in the state of Delaware on December 17, 2009. The Company operates from its headquarters in San Mateo, California and has operating subsidiaries in Ireland, Australia, Israel, Japan and United Kingdom. Marketo is a provider of a cloud-based Engagement Marketing software platform that is purpose-built to enable organizations to engage in modern engagement marketing. The Company's platform is designed to enable the effective management, optimization and analytical measurement of marketing activities, enabling organizations to acquire new customers more efficiently, build stronger relationships with existing customers, improve sales effectiveness and drive faster revenue growth. On this platform, the Company delivers an easy to use, integrated suite of advanced applications. The Company generally offers its services on an annual subscription basis with quarterly or annual payment terms. Initial Public Offering and Follow-On Offering On May 17, 2013, the Company closed its initial public offering (IPO) where it sold 6,968,435 shares of common stock to the public, including the underwriters' overallotment option of 908,926 shares of common stock and 309,509 shares of common stock sold by selling stockholders, at a price of $13.00 per share. In addition, the Company sold 500,000 shares of common stock to funds affiliated with Battery Ventures in a concurrent private placement, at a price of $13.00 per share. The Company received aggregate proceeds of approximately $87.0 million from the IPO and concurrent private placement, net of underwriters' discounts and commissions, but before deduction of offering expenses of approximately $3.4 million. Upon the closing of the IPO, all shares of the Company's outstanding convertible preferred stock automatically converted into 25,876,142 shares of common stock. On September 13, 2013, the Company closed its follow-on public offering of 6,000,000 shares of its common stock, which included 662,498 shares of common stock sold by the Company and 5,337,502 shares of common stock sold by selling stockholders. The public offering price of the shares sold in the follow-on offering was $35.50 per share. The Company received aggregate proceeds of approximately $22.5 million from the follow-on offering, net of underwriters' discounts and commissions applicable to the sale of shares by the Company, but before deduction of offering costs of approximately $0.7 million payable by the Company. The Company did not receive any proceeds from the sale of shares by the selling stockholders. Basis of Presentation The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S. (U.S. GAAP) and include the consolidated accounts of the Company and its wholly-owned and majority-owned subsidiaries. All intercompany transactions and balances have been eliminated. Certain immaterial amounts in the prior period consolidated statement of cash flows within the cash provided by (used in) operating activities have been reclassified to conform to the current period presentation. Redeemable Non-controlling Interests The Company's Japanese subsidiary (Marketo KK) is not wholly owned. The agreements with the minority investors of Marketo KK contain redemption features whereby the interests held by the minority investors are redeemable either (i) at the option of the minority investors or (ii) at the option of the Company beginning on the seventh anniversary of the initial capital contribution. If the interests of the minority investors were to be redeemed under these agreements, the Company would be required to redeem the interest based on a prescribed formula derived from the relative revenue of Marketo KK and the Company. The balance of the redeemable non-controlling interests is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest's share of earnings or losses and other comprehensive income or loss, or its estimated redemption value. The resulting changes in the estimated redemption amount (increases or decreases) are recorded with corresponding adjustments against retained earnings or, in the absence of retained earnings, additional paid-in-capital. These interests are presented on the balance sheet outside of equity under the caption "Redeemable non-controlling interests." Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Such management estimates and assumptions include the estimated selling price for the various elements in the Company's customer contracts, the allowance for doubtful accounts, stock-based compensation expense, useful lives of intangible assets, redemption value of redeemable non-controlling interests and the valuation of deferred tax assets and acquired intangible assets. Actual results could differ materially from those estimates, and such differences could be material to the financial statements and affect the results of operations reported in future periods. Foreign Currency The functional currency of the Company's foreign subsidiaries is their respective local currency. Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rates in effect at the balance sheet dates, with the resulting translation adjustments directly recorded to a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at average exchange rates during the year. Foreign currency remeasurement and transaction gains and losses are recorded in other income (expense), net. The Company recognized net foreign exchange currency gains of approximately $0.2 million and $0.4 million for the years ended December 31, 2015 and 2014, respectively and net foreign exchange currency losses of $0.3 million for the year ended December 31, 2013. Segments The Company's chief operating decision maker is its Chief Executive Officer, who reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region. Accordingly, the Company has determined that it has a single operating segment. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturity of three months or less to be cash equivalents. Cash and cash equivalents primarily consist of cash on deposit with banks and investments in money market funds. Allowance for Doubtful Accounts Accounts receivable are carried at the original invoiced amount less an allowance made for doubtful accounts. The Company maintains an allowance for doubtful accounts based on the probability of future collection. When management becomes aware of circumstances that may decrease the likelihood of collection, it records a specific allowance against amounts due, which reduces the net receivable to the amount that management reasonably believes will be collected. For all other customers, management determines the adequacy of the allowance based on historical loss patterns, the number of days that billings are past due and an evaluation of the potential risk of loss associated with specific accounts. The Company reviews its allowance for doubtful accounts monthly and writes off receivable balances that are deemed to be uncollectible. Increases in the allowance are recorded in general and administrative expense in the period incurred. The Company does not have any off balance sheet credit exposure related to its customers. Below is a summary of the changes in allowance for doubtful accounts for the periods presented: Balance at Beginning of Period Provision, net of Recoveries Write-offs Balance at End of Period (in thousands) Year ended December 31, 2013 $ $ $ ) $ Year ended December 31, 2014 ) Year ended December 31, 2015 ) Property and Equipment, Net Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the asset, which is generally two to three years. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the lease term or the estimated useful life of the asset or improvement. Depreciation and amortization begins when the asset is ready for its intended use. Assets held within construction in progress ("CIP") are not depreciated. CIP is related to the construction or development of property and equipment that have not yet been placed in service for their intended use. Cost of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in the statement of operations. Capitalized Software Development Costs Costs incurred to develop the Company's cloud-based platform and applications consist of (a) certain external direct costs of materials and services incurred in developing or obtaining internal-use computer software and (b) payroll and payroll-related costs for employees who are directly associated with, and who devote time to, a given project. These costs generally consist of internal labor during configuration, coding and testing activities. Research and development costs incurred during the preliminary project stage or costs incurred for data conversion activities, training, maintenance and general and administrative or overhead costs are expensed as incurred. Capitalization begins when the preliminary project stage is complete, management with the relevant authority authorizes and commits to the funding of the software project, it is probable the project will be completed, and the software will be used to perform the functions intended and certain functional and quality standards have been met. Additionally, the Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Capitalized software development costs are amortized on a straight-line basis over the estimated useful life, which is generally eighteen months to two years. Amortization expense for the years ended December 31, 2015, 2014 and 2013 was $1.2 million, $0.3 million and $0.2 million, respectively. Business Combinations When the Company acquires businesses, it allocates the purchase price to tangible assets and liabilities, and identifiable intangible assets acquired. Any residual purchase price is recorded as goodwill. The allocation of the purchase price requires management to make significant estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets. These estimates are based on historical experience and information obtained from the management of the acquired companies. These estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost savings expected to be derived from acquiring an asset. These estimates are inherently uncertain and unpredictable. In addition, unanticipated events and circumstances may occur which may affect the accuracy or validity of such estimates. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Goodwill and Other Intangible Assets The Company records goodwill when the consideration paid in a purchase acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment. The Company performs testing for impairment of goodwill on an annual basis, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has elected to bypass the qualitative assessments and proceed directly to the two-step test for impairment of goodwill. The first step of the test for goodwill impairment compares the fair value of the applicable reporting unit with its carrying value. If the fair value of a reporting unit is less than the reporting unit's carrying value, the Company will then perform the second step of the test for impairment of goodwill. During the second step of the test for impairment of goodwill, the Company compares the implied fair value of the reporting unit's goodwill with the carrying value of that goodwill. If the carrying value of the goodwill exceeds the calculated implied fair value, the excess amount will be recognized as an impairment loss. The Company has determined that there is a single reporting unit for the purpose of goodwill impairment tests. The Company did not recognize any impairment charges on its goodwill during any of the periods presented. Other intangible assets with definite lives, consisting of capitalized software development costs, developed technology, domain names, customer relationships and non-compete agreements, are stated at cost less accumulated amortization and are amortized on a straight-line basis over their estimated remaining economic lives, ranging from one to seven years. Amortization expense related to capitalized software development costs and developed technology is included in cost of revenues. Amortization expense related to customer relationships and non-compete agreements is included in sales and marketing expense. Amortization expense related to domain names is included in general and administrative expense. The Company also routinely reviews the remaining estimated useful lives of its finite-lived intangible assets. If the estimated useful life for an asset is reduced, the remaining unamortized balance would be amortized over the revised estimated useful life Long-Lived Assets The Company continually monitors events and changes in circumstances that could indicate that carrying amounts of its long-lived assets, including property and equipment and identifiable intangible assets, may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through their undiscounted expected future cash flow. If the future undiscounted cash flow is less than the carrying amount of these assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. The Company did not recognize impairment charges on its long-lived assets during any of the periods presented. Concentration of Credit Risk and Significant Customers The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. Although the Company deposits its cash with multiple financial institutions, its deposits exceed federally insured limits. The Company generally does not require collateral from its customers and generally requires payment 30 days from the invoice date. The Company's accounts receivable are derived from revenue earned from customers located primarily in North America and Europe. The Company periodically evaluates the collectability of its accounts receivable and provides an allowance for potential credit losses as necessary, based on the age of the receivable and collection experience. No single customer accounted for more than 10% of accounts receivable as of December 31, 2015 and 2014. No single customer accounted for 10% or more of total revenue for each of the years ended December 31, 2015, 2014 and 2013. Revenue Recognition The Company derives its revenue from two sources: (1) Subscription and support revenue. Subscription and support revenue consists of subscription fees from customers accessing the Company's cloud-based solutions platform and applications, as well as related customer support services; and (2) Professional services and other revenue. Professional services and other revenue consists of fees associated with providing expert services that educate and assist the Company's customers on the best use of the Company's solutions as well as assist in the implementation of the Company's solution. Revenue recognition commences when all of the following conditions are met: · Persuasive evidence of an arrangement exists; · Delivery or performance has occurred; · Fees are fixed or determinable; and · Collectability is reasonably assured In the majority of instances, revenue from new customers is generated under sales agreements with multiple elements, comprised of subscription and support fees from customers accessing the Company's cloud-based platform and applications and professional consultation services. The Company evaluates each element in a multiple-element arrangement to determine whether it represents a separate unit of accounting. An element constitutes a separate unit of accounting when the delivered item has standalone value and delivery of the undelivered element is probable and within the Company's control. Subscription and support have standalone value because they are routinely sold separately by the Company. Most of the professional services have standalone value because the Company has sold professional services separately, and there are several third party vendors that routinely provide similar professional services to the Company's customers on a standalone basis. The Company allocates total arrangement fees to each element in a multiple-element arrangement based on the relative selling price hierarchy of each element. The amount of arrangement fee allocated to each element is limited by contingent revenue, if any. The relative selling price hierarchy consists of the following: Selling price for a deliverable is based on its 1) vendor-specific objective evidence ("VSOE"), if available, 2) third-party evidence ("TPE"), if VSOE is not available, or 3) estimated selling price ("ESP"), if neither VSOE nor TPE is available. Because the Company has been unable to establish VSOE or TPE for the elements of its arrangements, the Company establishes the ESP for each element primarily by considering the median of actual sales prices of each type of subscription and support sold and the weighted average of actual sales prices of professional services sold. For subscription and support arrangements, management considered other factors such as database sizes, pricing practices and market considerations. Subscription and support revenue is recognized commencing upon delivery of the Company's cloud-based services, which is the date a new subscription is provisioned and made available to a new customer, or new or expanded capabilities are provisioned and added to an existing subscription, provided that all of the other revenue recognition criteria are first met, referred to as the "Commencement Date". Subscription and support revenue is recognized from the Commencement Date ratably thereafter over the remaining contractual term, which is generally three to 36 months. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Professional services and other have standalone value from the related subscription services. The majority of the Company's professional services contracts are offered on a time and material basis. When these services are not combined with subscription and support revenue in a multiple-element arrangement, services revenue is recognized as the services are rendered. Certain standard and non-standard professional service arrangements include customer acceptance provisions. Services provided under arrangements that include customer acceptance provisions are typically provided on a time and material basis, and the revenue is deferred and recognized upon customer acceptance of the service deliverable. The Company's professional services also consist of short-term enablement and implementation services, which are offered at a flat fee. The enablement services teams assist customers with standard adoption procedures for the Company's platform. Because such enablement services typically are completed within a short period (usually one to ten days), the Company recognizes revenue from this service upon completion. The implementation services consist of short-term "use it or lose it" services to assist customers with standard implementation and to implement the customer's first marketing campaign which are offered at a flat fee. Such flat fees are recognized ratably over the 120 day period. The Company's time and material and fixed price professional service contracts are generally delivered within one year from the date of the arrangement. Sales and other taxes collected from customers to be remitted to government authorities are primarily reported on a net basis, where taxes collected are excluded from revenue. Cost of Revenue Cost of subscriptions, support, professional services and other revenue are expensed as incurred. Cost of subscription and support revenue primarily consists of expenses related to hosting the Company's service and providing support to the Company's customers. These expenses are comprised of data center operations costs and personnel and related costs directly associated with the Company's cloud infrastructure, customer support and customer success organizations, including salaries, benefits, bonuses and stock-based compensation, as well as allocated overhead. Overhead associated with facilities and depreciation, excluding depreciation related to the Company's data center infrastructure, is allocated to cost of revenue and operating expenses based on headcount. Cost of professional services and other revenue consists primarily of personnel and related costs directly associated with the Company's professional services and training organizations, including salaries, benefits, bonuses and stock-based compensation, the costs of sub-contracted third-party vendors, as well as allocated overhead. Deferred Revenue Deferred revenue consists of billings or payments received in advance of revenue recognition and are recognized as the revenue recognition criteria are met. The Company generally invoices its customers annually or in quarterly installments payable in advance. Accordingly, the deferred revenue balance does not represent the total contract value of annual or multi-year, non-cancelable arrangements. The current portion of deferred revenue represents the amount that is expected to be recognized as revenue within one year from the balance sheet date. Commissions Sales and marketing commissions are recognized as an expense generally at the time the customer order is signed. Substantially all of the effort by the sales and marketing organization is expended through the time of closing the sale with limited or no involvement thereafter. Commissions paid are subject to clawback by the Company in the event the customer fails to make payment on the agreement. Warranties and Indemnification The Company's cloud-based solutions platform and applications are typically warranted to perform in a manner consistent with general industry standards that are reasonably applicable and materially in accordance with the Company's on-line help documentation under normal use and circumstances. The Company includes service level commitments to its customers warranting certain levels of uptime reliability and performance and permitting those customers to receive credits in the event that the Company fails to meet those levels. To date, the Company has not incurred any material costs as a result of such commitments and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements. The Company's arrangements include provisions indemnifying customers against liabilities if the Company's products infringe a third-party's intellectual property rights. The Company also enters into arrangements that include provisions indemnifying customers for other liabilities from time to time. The Company has not incurred any costs as a result of such indemnification and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements. The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of those persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person's service as a director or officer, including any action by the Company, arising out of that person's services as the Company's director or officer or that person's services provided to any other company or enterprise at the Company's request. The Company maintains director and officer insurance coverage that may enable the Company to recover a portion of any future indemnification amounts paid. Advertising Costs Advertising costs are expensed as incurred. For the years ended December 31, 2015, 2014 and 2013 advertising expenses were $2.5 million, $1.9 million and $1.5 million, respectively. Stock-Based Compensation The Company uses the fair value method for recording stock-based compensation. Stock-based compensation cost for stock options and stock purchase rights provided under the Employee Stock Purchase Plan (ESPP) is estimated at the grant date based on each option's fair-value as calculated by the Black-Scholes option-pricing model. The Company recognizes compensation cost for stock option grants and ESPP on a straight-line basis over the requisite service period for the entire award. Stock-based compensation cost for restricted stock units (RSUs) is measured based on the fair value of the underlying shares on the date of grant. All RSUs are subject to a time-based vesting condition and some are also subject to a performance-based vesting condition, both of which must be satisfied before the RSUs are vested and settled for shares of common stock. The time-based vesting condition is generally 4 years. The Company recognizes the compensation cost for RSUs which contain performance conditions based upon the probability of that performance condition being met, over the respective time-based vesting period. RSUs that do not satisfy the time-based vesting condition as of termination of employment are automatically forfeited. All RSUs will expire 7 years from the grant date if not previously settled for shares of common stock. Stock-based compensation expense related to market-performance based RSUs (MSUs) granted to certain of our executives is measured based upon the fair market value as of the date of the award using the Monte Carlo valuation methodology. The stock-based compensation expense for each MSU award is recognized using the graded vesting method. Stock-based compensation expense associated with participants who fulfil their requisite service period is not reversed even if the performance conditions are not met. However, stock-based compensation expense is reversed for participants who forfeit their MSU awards prior to fulfilling their requisite service period. Stock-based compensation expenses are only recognized for awards that are expected to vest. The Company estimates its forfeiture based on historical forfeitures of its stock-based awards and adjusts the rate to reflect changes in facts and circumstances, if any. Income Taxes The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. Compliance with income tax regulations requires the Company to make decisions relating to the transfer pricing of revenue and expenses between each of its legal entities that are located in several countries. The Company's determinations include many decisions based on management's knowledge of the underlying assets of the business, the legal ownership of these assets, and the ultimate transactions conducted with customers and other third parties. The calculation of the Company's tax liabilities involves dealing with uncertainties in the application of complex tax regulations in multiple tax jurisdictions. The Company may be periodically reviewed by domestic and foreign tax authorities regarding the amount of taxes due. These reviews may include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, the Company records estimated reserves when it is more likely than not that an uncertain tax position will not be sustained upon examination by a taxing authority. Such estimates are subject to change. See Note 11, "Income Taxes". Net Loss per Share Attributable to Common Stockholders Basic and diluted net loss per share of common stock is presented in conformity with the two-class method required for participating securities for 2015, 2014 and 2013. The Company considers the shares issued upon the early exercise of stock options subject to repurchase to be participating securities, because holders of such shares have dividend rights in the event a dividend is paid on common stock. Prior to its conversation to common stock, holders of Series A, B, C, D, E, F and G convertible preferred stock were each entitled to receive noncumulative dividends out of any funds legally available, when, as and if declared by the board of directors, payable prior and in preference to any dividends on any shares of the Company's common stock. The dividend rates for Series A, B, C, D, E, F and G convertible preferred stock were $0.08, $0.12, $0.20, $0.379, $0.5326, $1.056 and $1.168 per share, respectively. In the event a dividend is paid to common stockholders, the holders of the Series A, B, C, D, E, F and G convertible preferred stock were entitled to a proportionate share of any such dividends as if they were holders of common stock (on an as-if converted basis). Under the two-class method, net income (loss) attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income less current period convertible preferred stock non-cumulative dividends, between common stock and preferred stock. In computing diluted net income (loss) attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. Basic net income (loss) per share of common stock is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Unvested common shares resulting from the early exercises of stock options are excluded from the calculation of the weighted average common shares until they vest as they are subject to repurchase until they are vested. Those shares are added to the calculation of the weighted average common shares outstanding as they vest. Diluted net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding, including potential dilutive common sh |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2015 | |
Acquisition | |
Business Combinations | 2. Business Combinations Fiscal 2014 On December 22, 2014 the Company completed an acquisition. Consideration totaled approximately $5.0 million and consisted of 141,074 shares of common stock of the Company valued at the closing market price of $33.71 and $0.2 million of cash. The Company has included the financial results of this company in its consolidated financial statements from the closing date of the acquisition. The Company has accounted for this transaction as a business combination. Based on the purchase price allocation, the Company recorded $1.6 million of acquired intangible assets with a useful life of three years, $3.2 million in goodwill, $0.5 million in net tangible assets including cash and $0.3 million of deferred tax liabilities. Additionally, the Company granted 146,762 time-based RSUs and 42,932 performance-based RSUs, which were valued at approximately $6.4 million on the grant date. See Note 9, "Stockholder's Equity and Stock Based Compensation" for more details regarding the performance-based RSUs. Fiscal 2013 Insightera On December 19, 2013, the Company completed its acquisition of Insightera Ltd. (Insightera), a company organized under the laws of the State of Israel. Insightera, a SaaS company, provides a platform that allows its customers to track and compile data about users visiting their internet websites with the purpose of displaying the website information which is personalized in response to the data. As a result of the acquisition, the Company acquired all of the issued and outstanding shares of Insightera, and Insightera became a wholly owned subsidiary of the Company. Consideration consisted of $9.8 million of cash and 427,761 shares of common stock of the Company valued at the closing market price of $32.89. Of the issuable shares, 137,252 shares of the Company's common stock are held in escrow and are expected to be released from escrow no later than 18 months from the closing of the acquisition. Additionally, these employees were also granted 139,464 RSUs valued at approximately $6.1 million in January 2014. The acquisition was accounted for using the acquisition method of accounting under which assets and liabilities of Insightera were recorded at their respective fair values including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets. During fiscal 2013, the Company incurred $0.7 million in transaction costs related to the acquisition, which primarily consisted of legal, accounting and valuation-related expenses. These expenses were recorded in general and administrative expense in the accompanying Consolidated Statements of Operations and Comprehensive Loss. Additionally, the Company incurred approximately $0.2 million in costs associated with registering the common stock issued in connection with the acquisition. These costs have been recorded as a reduction in additional paid in capital. The total purchase price was allocated to the tangible and identified intangible assets acquired and liabilities assumed as of the closing date of the acquisition based upon their respective fair values. The purchase price allocation is as follows: Purchase Price Allocation (in thousands) Tangible assets: Cash and cash equivalents $ Accounts receivable Other current assets Property and equipment Other assets ​ ​ ​ ​ ​ Total tangible assets ​ ​ ​ ​ ​ Liabilities assumed: Accounts payable and accrued liabilities ) Deferred revenues ) Other long-term liabilities ) ​ ​ ​ ​ ​ Total liabilities assumed ) ​ ​ ​ ​ ​ Deferred tax liability ) Intangible assets Goodwill ​ ​ ​ ​ ​ Total purchase price $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Each component of identifiable intangible assets acquired in connection with the above acquisition is as follows: Estimated Useful Life Amount (in years) (in thousands) Developed technology $ Domain names Customer relationships ​ ​ ​ ​ ​ ​ ​ ​ Total intangible assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pro forma results of operations have not been presented because the effect of this acquisition was not material to the consolidated financial statements. |
Joint Venture
Joint Venture | 12 Months Ended |
Dec. 31, 2015 | |
Joint Venture | |
Joint Venture | 3. Joint Venture In February 2014, the Company entered into an agreement with SunBridge Corporation and Dentsu eMarketing One K.K. (collectively, the Investors) to engage in the investment, organization, management and operation of a Japanese subsidiary (Marketo KK) of the Company that is focused on the sale of the Company's products and services in Japan. The Investors initially contributed approximately $2.0 million (200,000,000 Japanese Yen) in cash in exchange for 35.4% of the outstanding common stock of Marketo KK. Furthermore, under the agreement, the Company and the Investors agreed to subscribe to additional shares by contributing additional funding of approximately $2.0 million (237,480,955 Japanese Yen) and approximately $1.7 million (200,000,000 Japanese Yen), respectively, which occurred in March 2015. As of December 31, 2015, the Company and the Investors owned approximately 60.1% and 39.9% of the outstanding common stock in Marketo KK, respectively. Twenty percent of the common stock held by the Investors may be callable by the Company or puttable by the Investors beginning on the seventh anniversary of the initial capital contribution by the Investors. This percentage increases to forty percent and one hundred percent on the eighth and tenth anniversary, respectively. Should the call or put option be exercised, the redemption value would be determined based on a prescribed formula derived from the relative revenue of Marketo KK and the Company and may be settled, at the Company's discretion, with Company stock (with no limit on the shares that may be issued) or cash. Additionally, the common stock held by the Investors may be callable or puttable following a change of control of the Company. The redeemable non-controlling interests in Marketo KK are classified outside of permanent equity in the Company's consolidated balance sheet as of December 31, 2015, primarily due to the put right available to the redeemable non-controlling interest holders in the future which may be settled in cash or common stock of the Company. The balance of the redeemable non-controlling interests is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest's share of earnings, or its estimated redemption value. Accordingly, as of December 31, 2015 the Company adjusted the redeemable non-controlling interests to its expected redemption value, resulting in a $4.1 million reduction to additional paid-in-capital for the year ended December 31, 2015. The following table reconciles net loss and adjustment attributable to redeemable non-controlling interests for periods indicated below (in thousands): Redeemable Non-controlling Interests Balance as of December 31, 2013 $ — Investment by redeemable non-controlling interests Net loss attributable to redeemable non-controlling interests (before adjustment to redeemable non-controlling interests) ) Foreign currency translation adjustments ) ​ ​ ​ ​ ​ Balance as of December 31, 2014 Investment by redeemable non-controlling interests Net loss attributable to redeemable non-controlling interests (before adjustment to redeemable non-controlling interests) ) Foreign currency translation adjustments ) Adjustment to redeemable non-controlling interests ​ ​ ​ ​ ​ Balance as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 4. Fair Value of Financial Instruments The Company measures certain financial assets at fair value on a recurring basis based on a fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3—Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents. For certain other financial instruments, including accounts receivable, accounts payable, other current liabilities and credit facility, the carrying amounts approximate their fair value due to the relatively short maturity of these balances. As of December 31, 2015 and 2014, financial assets stated at fair value on a recurring basis were comprised of money market funds and certificates of deposit included within cash and equivalents. In general, and where applicable, the Company uses quoted prices in active markets for identical assets or liabilities to determine fair value. The Company applied this valuation technique to measure the fair value of the Company's Level 1 investments, such as money market funds. The fair value of the Company's investments in certain money market funds is their carrying value. If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, then the Company uses quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable either directly or indirectly. The Company classifies its certificates of deposit as having Level 2 inputs. The Company obtains the fair value of Level 2 financial instruments from its bank, which uses pricing data which may include quoted market prices for identical or comparable instruments, or inputs other than quoted prices that are observable either directly or indirectly. The bank then analyzes gathered pricing inputs and applies proprietary valuation techniques, such as weighted average pricing or pricing models such as discounted cash flow techniques to provide the Company with a fair valuation of each security. The fair value of these financial assets was determined using the following inputs for the periods presented: December 31, 2015 December 31, 2014 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Money market funds $ $ — $ — $ $ — $ — Certificates of deposit — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ — $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2015 | |
Balance Sheet Components | |
Balance Sheet Components | 5. Balance Sheet Components Cash and Cash Equivalents Cash and cash equivalents consist of the following: December 31, 2015 2014 (in thousands) Cash $ $ Cash equivalents Money market funds Certificates of deposit ​ ​ ​ ​ ​ ​ ​ ​ Total cash equivalents ​ ​ ​ ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property and Equipment, Net Property and equipment, net consists of the following: December 31, 2015 2014 (in thousands) Computer equipment $ $ Software Office furniture Leasehold improvements Construction in progress ​ ​ ​ ​ ​ ​ ​ ​ Total property and equipment Less accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction in progress includes costs primarily related to network equipment infrastructure to support the Company's data center. Depreciation expense was $10.4 million, $7.2 million and $3.9 million for 2015, 2014 and 2013, respectively. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities are as follows: December 31, 2015 2014 (in thousands) Accrued bonuses, commissions and wages $ $ Accrued ESPP Accrued vacation Accrued marketing expenses Accrued other ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets, Net | |
Goodwill and Intangible Assets, Net | 6. Goodwill and Intangible Assets, Net Goodwill and intangible assets, net consisted of the following for the periods presented below: December 31, 2015 Weighted Average Remaining Useful Life December 31, 2014 Weighted Average Remaining Useful Life (in thousands) (in years) (in thousands) (in years) Developed technology $ $ Domain names Customer relationships Non-compete agreements Capitalized software development costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets, net Goodwill ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill and intangible assets, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company capitalized approximately $1.9 million and $0.7 million of software development costs in 2015 and 2014 and, respectively. Amortization expense for the periods presented below was as follows: Year Ended December 31, 2015 2014 2013 (in thousands) Amortization expense $ $ $ Based on the carrying amount of intangible assets as of December 31, 2015, the estimated future amortization is as follows (in thousands): Year Ended December 31, 2016 2017 2018 2019 Total Developed Technology $ $ $ — $ — $ Domain Names Customer Relationships — — — Non-compete Agreements — — Capitalized Software Development Costs — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2015 | |
Credit Facility | |
Credit Facility | 7. Credit Facility In May 2012, the Company entered into a loan and security agreement with a bank related to an equipment facility providing the Company with an equipment line of up to $4.0 million. In June 2013, the Company entered into a first amendment to the loan and security agreement, which provided an additional line of credit for advances of up to an aggregate of $4.5 million. The interest rate associated with both lines of credit is the greater of 4% or three quarters of a percentage points above the prime rate, as determined on the applicable funding date. For each equipment advance, the Company will pay interest only for approximately nine months. Subsequently, the Company is obligated to make thirty-six equal monthly payments of principal and interest. The loan is secured by a security interest on substantially all of the Company's assets, including the equipment purchased with the advances, and excludes the Company's intellectual property. The loan and security agreement also contains customary events of default including, among other things, that during the existence of an event of default, interest on the obligations could be increased by 5%. In May 2014, the Company entered into a second amendment to the loan and security agreement to amend various covenants. Under the second amendment the Company is required to maintain compliance with certain financial covenants, which include maintaining a minimum cash balance with the bank and various reporting covenants. As of December 31, 2015, the Company was in compliance with these covenants. As of December 31, 2015, the outstanding loan balance was $2.7 million. Contractual future repayments in relation to the above credit facility are as follows for the years ending December 31: Principal Interest Total (in thousands) 2016 $ $ $ 2017 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 8. Commitments and Contingencies Leases The Company leases its office facilities in San Mateo, California; Portland, Oregon; Atlanta, Georgia; Dublin, Ireland; Sydney, Australia; Farnborough, United Kingdom; Tokyo, Japan and Tel Aviv, Israel under operating lease agreements expiring in 2019. Under terms of the leases, the Company is responsible for certain insurance, property taxes, and maintenance expenses. Rent expense for non-cancellable operating leases with scheduled rent increases is recognized on a straight line basis over the terms of the leases. The difference between required lease payments and rent expense has been recorded as deferred rent. Deferred rent as of December 31, 2015 and 2014 is as follows: December 31, 2015 2014 (in thousands) Current portion of deferred rent $ $ — Long-term portion of deferred rent ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rent expense under these operating leases was approximately $5.7 million, $4.2 million and $2.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, the Company had no capital leases. As of December 31, 2015, future minimum operating lease payments are as follows for the years ending December 31: Minimum Lease Payment (in thousands) 2016 $ 2017 2018 2019 ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contractual Obligations and Commitments Contractual agreements with third parties consist of co-location hosting services, software licenses, maintenance and support for the Company's operations. As of December 31, 2015, future payments for non-cancellable contractual agreements are $4.4 million, $3.1 million and $0.2 million in 2016, 2017 and 2018, respectively. |
Stockholder's Equity and Stock
Stockholder's Equity and Stock Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stockholder's Equity and Stock Based Compensation | |
Stockholder's Equity and Stock Based Compensation | 9. Stockholder's Equity and Stock Based Compensation Convertible Preferred Stock Upon the closing of the IPO on May 17, 2013, all outstanding convertible preferred stock was converted into 25,876,142 shares of common stock on a one-to-one basis. No remaining convertible preferred stock was outstanding as of December 31, 2015. Stock Option Plans 2006 Plan The Company's Board of Directors (Board) and the Company's stockholders adopted the 2006 Stock Plan (2006 Plan) in October 2006. The 2006 Plan was amended in May 2013. The 2006 Plan was terminated in connection with the IPO, and accordingly, no shares will be available for issuance under this plan. The 2006 Plan will continue to govern outstanding awards granted thereunder. The 2006 Plan provided for the grant of incentive stock options and nonqualified stock options. As of December 31, 2015, 2.8 million awards remained outstanding under the 2006 Plan. 2013 Equity Incentive Plan The Board adopted, and the Company's stockholders approved, a 2013 Equity Incentive Plan (2013 Plan). The 2013 Plan was effective May 16, 2013. The 2013 Plan provides for the grant of incentive stock options, to the Company's employees and any parent and subsidiary corporations' employees, and for the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to the Company's employees, directors and consultants and the Company's subsidiary corporations' employees and consultants. In addition, the shares reserved for issuance under the 2013 Plan also include (a) those shares reserved but unissued under the 2006 Stock Plan (2006 Plan), and (b) shares returned to the 2006 Plan as the result of expiration or termination of awards (provided that the maximum number of shares that may be added to the 2013 Plan pursuant to (a) and (b) is 9,119,341 shares). The number of shares available for issuance under the 2013 Plan will also include an annual increase on the first day of each fiscal year beginning in 2014, equal to the least of: · 3,250,000 shares; · 5% of the outstanding shares of common stock as of the last day of the Company's immediately preceding fiscal year; or · such other amount as the Company's Board of Directors may determine. If an award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an exchange program, or, with respect to restricted stock, restricted stock units, performance units or performance shares, is forfeited to or repurchased due to failure to vest, the unpurchased shares (or for awards other than stock options or stock appreciation rights, the forfeited or repurchased shares) will become available for future grant or sale under the 2013 Plan. With respect to stock appreciation rights, the net shares issued will cease to be available under the 2013 Plan and all remaining shares will remain available for future grant or sale under the 2013 Plan. Shares used to pay the exercise price of an award or satisfy the tax withholding obligations related to an award will become available for future grant or sale under the 2013 Plan. To the extent an award is paid out in cash rather than shares, such cash payment will not result in reducing the number of shares available for issuance under the 2013 Plan. Options under the 2013 Plan may be exercised for periods of up to ten years from the grant date. As of December 31, 2015, 3.9 million shares remained available for future grants under the 2013 Plan. Summary of Stock Option Activity A summary of the Company's stock option activity for all stock option plans for fiscal 2015 is as follows: Number of Stock Options Outstanding (in thousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Balance as of December 31, 2014 $ Granted Exercised ) Options Cancelled/Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable as of December 31, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vested and expected to vest as of December 31, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the Company's closing price of $28.71 as of December 31, 2015. Option awards generally vest over a four year period, with 25% vesting after one year from date of grant and monthly thereafter. Stock options granted under the Company's 2006 Plan provided employee option holders with an early exercise provision, where in the event of termination any unvested shares purchased are subject to repurchase by the Company at the original purchase price. This right of repurchase lapses as the option vests. Options exercisable as of December 31, 2015 include options that are exercisable prior to vesting. The weighted average grant date fair value of options granted and the total intrinsic value of options exercised during the periods presented were as follows: Year Ended December 31, 2015 2014 2013 Weighted average grant date fair value $ $ $ Total intrinsic value of options exercised (in thousands) $ $ $ The total estimated grant date fair value of options vested during the years ended December 31, 2015, 2014 and 2013 was $13.9 million, $5.2 million and $4.2 million, respectively. Additional information regarding options outstanding as of December 31, 2015 is as follows: Options Outstanding Options Exercisable Weighted Average Remaining Contractual Term (in years) Range of Exercise Prices Number of Shares Outstanding (in thousands) Weighted Average Exercise Price Shares Exercisable (in thousands) Weighted Average Exercise Price $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Determining Fair Value of Stock Options The fair value of each option grant is estimated on the date of grant using the Black-Scholes option valuation model. The following assumptions were used to estimate the fair value of options granted to employees: Year Ended December 31, 2015 2014 2013 Expected term (in years) 6 6 6 Risk-free interest rate 1.55% - 1.87% 1.80% - 1.97% 0.86% - 1.78% Expected volatility 43% - 45% 49% - 56% 57% - 58% Expected dividend rate 0% 0% 0% The assumptions are based on the following for each of the periods presented: Expected Term —The Company estimates the expected term consistent with the simplified method identified by the SEC. The Company elected to use the simplified method because of its limited history of stock option exercise activity and its stock options meet the criteria of the "plain-vanilla" options as defined by the SEC. The simplified method calculates the expected term as the average of the vesting and contractual terms of the award. Volatility —Since the Company has limited trading history by which to determine the volatility of its own common stock price, the expected volatility being used is derived from the historical stock volatilities of a representative industry peer group of comparable publicly listed companies over a period approximately equal to the expected term of the options. Risk Free Interest Rate —The risk free interest rate is based on U.S. Treasury zero coupon issues with remaining terms similar to the expected term on the options. Expected Dividend —The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and, therefore, used an expected dividend yield of zero in the valuation model. Forfeiture —The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting forfeitures and records stock-based compensation expense only for those awards that are expected to vest. All service based stock-based payment awards are amortized on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods. Restricted Stock Units A summary of the Company's RSU activity and related information for fiscal 2015 is as follows: Number of RSUs (in thousands) Weighted Average Grant Date Fair Value Balance as of December 31, 2014 $ RSUs Granted RSUs Vested ) RSUs Cancelled/Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RSUs are generally subject to a time-based vesting condition that ranges from three to four years, except for performance-based RSUs discussed in subsequent paragraphs. During 2013 and 2012 the Company granted performance-based RSUs to certain employees. These RSUs were subject to a time-based vesting condition and a performance-based vesting condition, both of which must be satisfied before the RSUs are vested and settled for shares of common stock. The time-based vesting condition generally ranges from 2 to 4 years. The performance-based vesting condition was satisfied upon the completion of the Company's IPO, which occurred during the second quarter of 2013. During 2014, in connection with an acquisition, the Company issued 42,932 performance-based RSUs to certain employees. These performance-based RSUs will vest based on the achievement against two product milestones. Of the total performance-based RSUs granted, 40% of the total RSUs granted was subject to the first milestone (which occurred in the second quarter of 2015) and 60% of the total RSUs granted was subject to the second milestone (which occurred in the fourth quarter of 2015). The RSUs had an estimated value of $1.4 million on the date of grant. During 2015, these RSUs were fully vested. The weighted average grant date fair value of RSUs granted and the total intrinsic value of RSUs that vested during the periods presented were as follows: Year Ended December 31, 2015 2014 2013 Weighted average grant date fair value $ $ $ Total intrinsic value of vested RSUs (in thousands) $ $ $ The aggregate grant date fair value of RSUs vested during fiscal 2015 was approximately $21.0 million. Market Stock Units In February 2015, the Compensation and Leadership Development Committee of the Company's Board of Directors granted market-performance based restricted stock units (MSUs) to its executive officers. The MSU awards were granted under the Company's 2013 Equity Incentive Plan. Each MSU award granted in the first quarter of fiscal 2015 contains three separate tranches. The actual number of MSUs eligible to vest in each tranche is based on the performance of the Company's stock price relative to the performance of the NASDAQ Composite Index over the vesting period of each tranche, which ranges from one to three years. MSU participants have the ability to receive up to 100% of the target number of shares in tranche 1 and 2 and up to 150% of the target number of shares in tranche 3. A summary of the Company's MSU activity and related information for the year ended December 31, 2015 is as follows: Number of Shares Underlying MSUs Weighted Average Grant Date Fair Value (in thousands) Balance as of December 31, 2014 — $ — MSUs Granted MSUs Cancelled/Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The fair value of each MSU award is determined by multiplying the fair value per share by the underlying number of shares. The fair value per share was determined on the grant date using the Monte Carlo valuation methodology and the assumptions described in the table below. The fair value per share for tranche 1, tranche 2, and tranche 3 is $9.10, $8.68 and $19.75, respectively. The Company amortizes the fair value of each MSU award using the graded-vesting method, adjusted for estimated forfeitures. Stock-based compensation expense associated with participants who fulfill their requisite service period is not reversed even if the performance conditions are not met. However, stock-based compensation expense is reversed for participants who forfeit their MSU awards prior to fulfilling their requisite service period. The fair value of the MSUs granted during fiscal 2015 was estimated using the following weighted-average assumptions: For the Year Ended December 31, 2015 Expected term (in years) Risk-free interest rate % Expected volatility % Expected dividend rate % Employee Stock Purchase Plan The Board adopted, and the Company's stockholders approved, a 2013 Employee Stock Purchase Plan (ESPP). The ESPP became effective on May 1, 2013. The ESPP provides for annual increases in the number of shares available for issuance under the ESPP on the first day of each fiscal year beginning in fiscal 2014, equal to the lesser of: · 1% of the outstanding shares of the Company's common stock on the first day of such fiscal year; · 650,000 shares; or · such other amount as may be determined by the Company's board of directors The ESPP allows eligible employees to purchase shares of the Company's common stock at a discount through payroll deductions of up to 15% of their eligible compensation, at not less than 85% of the fair market value, as defined in the ESPP, subject to any plan limitations. A participant may purchase a maximum of 1,250 shares during an offering period. The offering period generally starts on the first trading day on or after February 15th and August 15th of each year, except that the first offering period commenced on the first trading day following the effective date of the Company's registration statement. During 2015, the Company issued approximately 0.2 million shares of common stock under the ESPP with an average purchase price of $23.88 per share. At December 31, 2015, a total of 1.5 million shares of common stock have been reserved for issuance and there were 0.9 million shares available for issuance under the ESPP. Determining Fair Value of Employee Stock Plan Purchase Rights The assumptions used to value employee stock purchase rights under the Black-Scholes model for the periods presented were as follows: Year Ended December 31, 2015 2014 2013 Expected term (in months) 6 6 - 9 9 Risk-free interest rate 0.05% - 0.24% 0.05% - 0.11% 0.11% Expected volatility 31% - 43% 41% - 43% 42% Expected dividend rate 0% 0% 0% Stock Compensation Expense The stock-based compensation expense included in operating results was allocated as follows: Year Ended December 31, 2015 2014 2013 (in thousands) Cost of subscription and support revenue $ $ $ Cost of professional services and other revenue Research and development Sales and marketing General and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stock-based compensation expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2015, the Company incurred expenses of $8.4 million for options, $26.4 million for RSUs, $3.6 million for MSUs and $1.7 million for ESPP, of which $1.3 million, related to performance-based RSUs that are tied to product milestones issued in connection with an acquisition that occurred in December 2014. The Company capitalized $0.9 million associated with the Company's internal use software projects. As of December 31, 2015, total unrecognized compensation cost related to unvested awards not yet recognized under all equity compensation plans, adjusted for estimate forfeitures, was as follows: December 31, 2015 Unrecognized Expense Weighted Average Expected Recognition Period (in thousands) (in years) Stock options $ Restricted stock units and market stock units Employee stock purchase plan ​ ​ ​ ​ ​ ​ ​ ​ Total unrecognized stock-based compensation expense $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2015 | |
Net Loss per Share | |
Net Loss per Share | 10. Net Loss per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, less the weighted-average unvested common stock subject to repurchase or forfeiture as they are not deemed to be issued for accounting purposes. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including preferred stock, stock options, RSUs and employee stock purchase plan, to the extent they are dilutive. The following table sets forth the computation of the Company's basic and diluted net loss per share of common stock under the two-class method attributable to common stockholders for the periods presented: Year Ended December 31, 2015 2014 2013 (in thousands, except per share data) Numerator: Net loss attributable to Marketo $ ) $ ) $ ) Denominator: Weighted-average common shares outstanding Less: Weighted-average unvested common shares subject to repurchase or forfeiture and shares held in escrow ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average shares used in computing net loss per share of common stock, basic and diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share of common stock, basic and diluted $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company applied the two-class method to calculate its basic and diluted net loss per share of common stock, as its convertible preferred stock and common stock subject to repurchase are participating securities. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common shareholders. However, the two-class method does not impact the net loss per share of common stock as the Company was in a loss position for each of the periods presented and preferred shareholders and holders of common stock subject to repurchase do not have to participate in losses. Additionally, since the Company was in a loss position for each of the periods presented, diluted net loss per share is the same as basic net loss per share for each periods as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive securities that were excluded from the diluted per share calculation because they would have been antidilutive were as follows: Year Ended December 31, 2015 2014 2013 (in thousands) Stock options to purchase common stock Common stock held in escrow Common stock subject to repurchase Employee stock purchase plan Restricted stock units and market stock units ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | 11. Income Taxes Income Tax Provision: Pretax loss was as follows: Year Ended December 31, 2015 2014 2013 (in thousands) Loss before provision (benefit) for income taxes: Domestic $ ) $ ) $ ) Foreign ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The provision (benefit) for income taxes consists of the following: Year Ended December 31, 2015 2014 2013 (in thousands) Current tax provision: Federal $ $ $ — State Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current tax provision Federal — ) — State — ) — Foreign ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax benefit ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total provision (benefit) for income taxes $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes consist of the following: Year Ended December 31, 2015 2014 2013 Federal statutory rate % % % Stock-based compensation ) ) ) Valuation allowance ) ) ) Foreign rate differential ) ) ) Federal research and development credit Other ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective income tax rate )% % )% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax assets and liabilities: The components of deferred tax assets and liabilities are as follows: Year Ended December 31, 2015 2014 2013 (in thousands) Deferred tax assets: Accounts receivable principally due to allowance for doubtful accounts $ $ $ Compensated absences, principally due to accruals for financial reporting purposes Net operating loss carryforwards Federal tax credits State tax credits net of federal benefit Other deductible temporary differences Stock-based compensation Foreign Credit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets $ $ Deferred tax liabilities: Capitalized software development ) ) ) Acquired intangible assets ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liability ) ) ) Valuation allowance ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred taxes $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The net valuation allowance increased by $23.7 million and $17.8 million for the years ended December 31, 2015 and 2014, respectively. As of December 31, 2015, the Company's deferred tax assets consist primarily of the federal and state net operating loss and research and development credit. In assessing the realizability of deferred tax assets, management determined that it is more likely than not that none of the deferred tax assets will be realized. Therefore, the Company has provided a full valuation allowance against the U.S. federal and state deferred tax assets at December 31, 2015. The Company has not provided for withholding taxes on the undistributed earnings of its foreign subsidiaries because the Company intends to reinvest such earnings indefinitely. As of December 31, 2015, the amount of undistributed earnings considered indefinitely reinvested was not material. The Company had net operating loss carryforwards as follows: Year Ended December 31, 2015 2014 2013 (in thousands) Federal $ $ $ State Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The federal and state net operating losses include $91.1 million and $51.9 million of excess stock based compensation that will result in increases to additional paid in capital, when realized. Net operating loss carryforwards are available to offset future federal, California and foreign taxable income. Federal and California net operating loss carryforwards begin to expire in 2026 and 2016, respectively. Ireland net operating loss carryforwards do not expire. Japan net operating loss carryforwards begin to expire in 2022. The Company had research and development credit carryforwards as follows: Year Ended December 31, 2015 2014 2013 (in thousands) Federal $ $ $ California International ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal and California and the foreign research and development tax credit carryforwards are available to reduce future regular income taxes. Federal research and development credit carryforwards begin to expire in 2026. California research and development tax credit carryforwards do not expire. On December 18, 2015, The Consolidated Appropriations Act of 2014 was signed into law, which retroactively reinstated and made permanent the federal research tax credit provisions from January 1, 2015 through December 31, 2015. The benefit of the reinstated credit did not impact the income statement in the period of enactment, which was the fourth quarter of 2015, as the research and development credit carryforwards are offset by a full valuation allowance. Federal and California laws impose restrictions on the utilization of net operating loss carryforwards and R&D credit carryforwards in the event of a change in ownership of the Company, which constitutes an 'ownership change' as defined by Internal Revenue Code Sections 382 and 383. The Company experienced an ownership change in the past that does not materially impact the availability of its net operating losses and tax credits. The amounts indicated in the above tables reflect reduction of approximately $1.1 million of net operating losses and $8,000 of research and development credits as a result of previous ownership changes that the Company experienced. Nevertheless, should there be an ownership change in the future, the Company's ability to utilize existing carryforwards could be substantially restricted. The Company files tax returns in the US, certain states, Israel, Ireland, Australia and Japan. All of the tax years, from the date of inception, are open for examination. Uncertain Tax Positions The Company accounts for uncertainty in income taxes in accordance with ASC 740. Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination by the tax authority, including resolutions of any related appeals or litigation processes, based on technical merit. If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognized in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The following table summarizes the activity related to unrecognized tax benefits: Year Ended December 31, 2015 2014 2013 (in thousands) Unrecognized benefit—beginning of period $ $ $ — Gross increases (decreases)—prior period tax positions — Gross increases (decreases)—current period tax positions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized benefit—end of period $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ All of the unrecognized tax benefits as of December 31, 2015 are accounted for as a reduction in the Company's deferred tax assets. Due to the Company's valuation allowance, none of the $1.8 million of unrecognized tax benefits would affect the Company's effective tax rate, if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. There is no interest or penalties accrued related to unrecognized tax benefits for the 2015, 2014 and 2013 and no liability for accrued interest and penalties related to unrecognized tax benefits as of December 31, 2015. The Company does not expect any significant change in its unrecognized tax benefits during the next twelve months. |
Employee 401(k) Plan
Employee 401(k) Plan | 12 Months Ended |
Dec. 31, 2015 | |
Employee 401(k) Plan | |
Employee 401(k) Plan | 12. Employee 401(k) Plan The Company's employee savings and retirement plan is qualified under Section 401 of the Internal Revenue Code. The plan is available to all regular employees on the Company's U.S. payroll and provides employees with tax-deferred salary deductions and alternative investment options. Employees may contribute up to 90% of their salary up to the statutory prescribed annual limit. In the calendar year 2015, the Company match for employees' contributions to the plan was 25% of the first 6% deferred. The Company's matching contributions to the plan totaled $1.1 million in 2015. |
Segment Information and Informa
Segment Information and Information about Geographic Areas | 12 Months Ended |
Dec. 31, 2015 | |
Segment Information and Information about Geographic Areas | |
Segment Information and Information about Geographic Areas | 13. Segment Information and Information about Geographic Areas The accounting principles guiding disclosures about segments of an enterprise and related information establishes standards for the reporting by business enterprises of information about operating segments, products and services, geographic areas, and major customers. The method of determining which information is reported is based on the way that management organizes the operating segments within the Company for making operational decisions and assessments of financial performance. The Company's chief operating decision maker (the CODM) is considered to be the Company's chief executive officer (CEO). The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance. As such, the Company is determined to be operating in one business segment. All of the Company's principal operations and decision-making functions are located in the United States. Revenue Revenue by geography is based on the shipping address of the customer. The following table presents the Company's revenue by geographic region for the periods presented: Year Ended December 31, 2015 2014 2013 (in thousands) United States $ $ $ EMEA Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ No single customer accounted for more than 10% of the Company's total revenue in 2015, 2014 and 2013. No single customer accounted for more than 10% of accounts receivable as of December 31, 2015 and 2014. Long-lived Assets The following table sets forth the Company's long-lived assets by geographic areas as of the periods presented: Year Ended December 31, 2015 2014 (in thousands) United States $ $ EMEA Other ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events | |
Subsequent Events | 14. Subsequent Events Subsequent to December 31, 2015, the Company entered into an amendment to extend and expand its current lease facilities in San Mateo, CA, which extends its operating lease commitments through August 2022. In conjunction with the amendment to the San Mateo lease agreement, the Company is required to enter into a standby letter of credit of approximately $0.7 million with a bank as security for the amended lease agreement. These lease agreements have the following impact on lease commitments presented in Note 8 Commitments and Contingencies: Incremental Minimum Lease Payments (in thousands) 2016 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
SUPPLEMENTARY QUARTERLY FINANCI
SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2015 | |
SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED) | |
SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED) | SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED) First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands, except per share data) Fiscal Year 2015 Total revenue $ $ $ $ Total gross profit Net loss ) ) ) ) Net loss and adjustment attributable to redeemable non-controlling interests ) ) ) Net loss attributable to Marketo ) ) ) ) Net loss per share of common stock, basic and diluted $ ) $ ) $ ) $ ) Fiscal Year 2014 Total revenue $ $ $ $ Total gross profit Net loss ) ) ) ) Net loss attributable to redeemable non-controlling interests Net loss attributable to Marketo ) ) ) ) Net loss per share of common stock, basic and diluted $ ) $ ) $ ) $ ) Net loss per share of common stock for the four quarters of each year in the table above may not sum to the total for each year because of the different number of weighted-average shares outstanding in each respective period. |
The Company and Summary of Si23
The Company and Summary of Significant Accounting Policies and Estimates (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
The Company and Summary of Significant Accounting Policies and Estimates | |
Basis of Presentation | Basis of Presentation The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S. (U.S. GAAP) and include the consolidated accounts of the Company and its wholly-owned and majority-owned subsidiaries. All intercompany transactions and balances have been eliminated. Certain immaterial amounts in the prior period consolidated statement of cash flows within the cash provided by (used in) operating activities have been reclassified to conform to the current period presentation. |
Redeemable Non-controlling Interests | Redeemable Non-controlling Interests The Company's Japanese subsidiary (Marketo KK) is not wholly owned. The agreements with the minority investors of Marketo KK contain redemption features whereby the interests held by the minority investors are redeemable either (i) at the option of the minority investors or (ii) at the option of the Company beginning on the seventh anniversary of the initial capital contribution. If the interests of the minority investors were to be redeemed under these agreements, the Company would be required to redeem the interest based on a prescribed formula derived from the relative revenue of Marketo KK and the Company. The balance of the redeemable non-controlling interests is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest's share of earnings or losses and other comprehensive income or loss, or its estimated redemption value. The resulting changes in the estimated redemption amount (increases or decreases) are recorded with corresponding adjustments against retained earnings or, in the absence of retained earnings, additional paid-in-capital. These interests are presented on the balance sheet outside of equity under the caption "Redeemable non-controlling interests." |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Such management estimates and assumptions include the estimated selling price for the various elements in the Company's customer contracts, the allowance for doubtful accounts, stock-based compensation expense, useful lives of intangible assets, redemption value of redeemable non-controlling interests and the valuation of deferred tax assets and acquired intangible assets. Actual results could differ materially from those estimates, and such differences could be material to the financial statements and affect the results of operations reported in future periods. |
Foreign Currency | Foreign Currency The functional currency of the Company's foreign subsidiaries is their respective local currency. Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rates in effect at the balance sheet dates, with the resulting translation adjustments directly recorded to a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at average exchange rates during the year. Foreign currency remeasurement and transaction gains and losses are recorded in other income (expense), net. The Company recognized net foreign exchange currency gains of approximately $0.2 million and $0.4 million for the years ended December 31, 2015 and 2014, respectively and net foreign exchange currency losses of $0.3 million for the year ended December 31, 2013. |
Segments | Segments The Company's chief operating decision maker is its Chief Executive Officer, who reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region. Accordingly, the Company has determined that it has a single operating segment. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturity of three months or less to be cash equivalents. Cash and cash equivalents primarily consist of cash on deposit with banks and investments in money market funds. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Accounts receivable are carried at the original invoiced amount less an allowance made for doubtful accounts. The Company maintains an allowance for doubtful accounts based on the probability of future collection. When management becomes aware of circumstances that may decrease the likelihood of collection, it records a specific allowance against amounts due, which reduces the net receivable to the amount that management reasonably believes will be collected. For all other customers, management determines the adequacy of the allowance based on historical loss patterns, the number of days that billings are past due and an evaluation of the potential risk of loss associated with specific accounts. The Company reviews its allowance for doubtful accounts monthly and writes off receivable balances that are deemed to be uncollectible. Increases in the allowance are recorded in general and administrative expense in the period incurred. The Company does not have any off balance sheet credit exposure related to its customers. Below is a summary of the changes in allowance for doubtful accounts for the periods presented: Balance at Beginning of Period Provision, net of Recoveries Write-offs Balance at End of Period (in thousands) Year ended December 31, 2013 $ $ $ ) $ Year ended December 31, 2014 ) Year ended December 31, 2015 ) |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the asset, which is generally two to three years. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the lease term or the estimated useful life of the asset or improvement. Depreciation and amortization begins when the asset is ready for its intended use. Assets held within construction in progress ("CIP") are not depreciated. CIP is related to the construction or development of property and equipment that have not yet been placed in service for their intended use. Cost of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in the statement of operations. |
Capitalized Software Development Costs | Capitalized Software Development Costs Costs incurred to develop the Company's cloud-based platform and applications consist of (a) certain external direct costs of materials and services incurred in developing or obtaining internal-use computer software and (b) payroll and payroll-related costs for employees who are directly associated with, and who devote time to, a given project. These costs generally consist of internal labor during configuration, coding and testing activities. Research and development costs incurred during the preliminary project stage or costs incurred for data conversion activities, training, maintenance and general and administrative or overhead costs are expensed as incurred. Capitalization begins when the preliminary project stage is complete, management with the relevant authority authorizes and commits to the funding of the software project, it is probable the project will be completed, and the software will be used to perform the functions intended and certain functional and quality standards have been met. Additionally, the Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Capitalized software development costs are amortized on a straight-line basis over the estimated useful life, which is generally eighteen months to two years. Amortization expense for the years ended December 31, 2015, 2014 and 2013 was $1.2 million, $0.3 million and $0.2 million, respectively. |
Business Combinations | Business Combinations When the Company acquires businesses, it allocates the purchase price to tangible assets and liabilities, and identifiable intangible assets acquired. Any residual purchase price is recorded as goodwill. The allocation of the purchase price requires management to make significant estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets. These estimates are based on historical experience and information obtained from the management of the acquired companies. These estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost savings expected to be derived from acquiring an asset. These estimates are inherently uncertain and unpredictable. In addition, unanticipated events and circumstances may occur which may affect the accuracy or validity of such estimates. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The Company records goodwill when the consideration paid in a purchase acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment. The Company performs testing for impairment of goodwill on an annual basis, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has elected to bypass the qualitative assessments and proceed directly to the two-step test for impairment of goodwill. The first step of the test for goodwill impairment compares the fair value of the applicable reporting unit with its carrying value. If the fair value of a reporting unit is less than the reporting unit's carrying value, the Company will then perform the second step of the test for impairment of goodwill. During the second step of the test for impairment of goodwill, the Company compares the implied fair value of the reporting unit's goodwill with the carrying value of that goodwill. If the carrying value of the goodwill exceeds the calculated implied fair value, the excess amount will be recognized as an impairment loss. The Company has determined that there is a single reporting unit for the purpose of goodwill impairment tests. The Company did not recognize any impairment charges on its goodwill during any of the periods presented. Other intangible assets with definite lives, consisting of capitalized software development costs, developed technology, domain names, customer relationships and non-compete agreements, are stated at cost less accumulated amortization and are amortized on a straight-line basis over their estimated remaining economic lives, ranging from one to seven years. Amortization expense related to capitalized software development costs and developed technology is included in cost of revenues. Amortization expense related to customer relationships and non-compete agreements is included in sales and marketing expense. Amortization expense related to domain names is included in general and administrative expense. The Company also routinely reviews the remaining estimated useful lives of its finite-lived intangible assets. If the estimated useful life for an asset is reduced, the remaining unamortized balance would be amortized over the revised estimated useful life |
Long-Lived Assets | Long-Lived Assets The Company continually monitors events and changes in circumstances that could indicate that carrying amounts of its long-lived assets, including property and equipment and identifiable intangible assets, may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through their undiscounted expected future cash flow. If the future undiscounted cash flow is less than the carrying amount of these assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. The Company did not recognize impairment charges on its long-lived assets during any of the periods presented. |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. Although the Company deposits its cash with multiple financial institutions, its deposits exceed federally insured limits. The Company generally does not require collateral from its customers and generally requires payment 30 days from the invoice date. The Company's accounts receivable are derived from revenue earned from customers located primarily in North America and Europe. The Company periodically evaluates the collectability of its accounts receivable and provides an allowance for potential credit losses as necessary, based on the age of the receivable and collection experience. No single customer accounted for more than 10% of accounts receivable as of December 31, 2015 and 2014. No single customer accounted for 10% or more of total revenue for each of the years ended December 31, 2015, 2014 and 2013. |
Revenue Recognition | Revenue Recognition The Company derives its revenue from two sources: (1) Subscription and support revenue. Subscription and support revenue consists of subscription fees from customers accessing the Company's cloud-based solutions platform and applications, as well as related customer support services; and (2) Professional services and other revenue. Professional services and other revenue consists of fees associated with providing expert services that educate and assist the Company's customers on the best use of the Company's solutions as well as assist in the implementation of the Company's solution. Revenue recognition commences when all of the following conditions are met: ï‚· Persuasive evidence of an arrangement exists; ï‚· Delivery or performance has occurred; ï‚· Fees are fixed or determinable; and ï‚· Collectability is reasonably assured. In the majority of instances, revenue from new customers is generated under sales agreements with multiple elements, comprised of subscription and support fees from customers accessing the Company's cloud-based platform and applications and professional consultation services. The Company evaluates each element in a multiple-element arrangement to determine whether it represents a separate unit of accounting. An element constitutes a separate unit of accounting when the delivered item has standalone value and delivery of the undelivered element is probable and within the Company's control. Subscription and support have standalone value because they are routinely sold separately by the Company. Most of the professional services have standalone value because the Company has sold professional services separately, and there are several third party vendors that routinely provide similar professional services to the Company's customers on a standalone basis. The Company allocates total arrangement fees to each element in a multiple-element arrangement based on the relative selling price hierarchy of each element. The amount of arrangement fee allocated to each element is limited by contingent revenue, if any. The relative selling price hierarchy consists of the following: Selling price for a deliverable is based on its 1) vendor-specific objective evidence ("VSOE"), if available, 2) third-party evidence ("TPE"), if VSOE is not available, or 3) estimated selling price ("ESP"), if neither VSOE nor TPE is available. Because the Company has been unable to establish VSOE or TPE for the elements of its arrangements, the Company establishes the ESP for each element primarily by considering the median of actual sales prices of each type of subscription and support sold and the weighted average of actual sales prices of professional services sold. For subscription and support arrangements, management considered other factors such as database sizes, pricing practices and market considerations. Subscription and support revenue is recognized commencing upon delivery of the Company's cloud-based services, which is the date a new subscription is provisioned and made available to a new customer, or new or expanded capabilities are provisioned and added to an existing subscription, provided that all of the other revenue recognition criteria are first met, referred to as the "Commencement Date". Subscription and support revenue is recognized from the Commencement Date ratably thereafter over the remaining contractual term, which is generally three to 36 months. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Professional services and other have standalone value from the related subscription services. The majority of the Company's professional services contracts are offered on a time and material basis. When these services are not combined with subscription and support revenue in a multiple-element arrangement, services revenue is recognized as the services are rendered. Certain standard and non-standard professional service arrangements include customer acceptance provisions. Services provided under arrangements that include customer acceptance provisions are typically provided on a time and material basis, and the revenue is deferred and recognized upon customer acceptance of the service deliverable. The Company's professional services also consist of short-term enablement and implementation services, which are offered at a flat fee. The enablement services teams assist customers with standard adoption procedures for the Company's platform. Because such enablement services typically are completed within a short period (usually one to ten days), the Company recognizes revenue from this service upon completion. The implementation services consist of short-term "use it or lose it" services to assist customers with standard implementation and to implement the customer's first marketing campaign which are offered at a flat fee. Such flat fees are recognized ratably over the 120 day period. The Company's time and material and fixed price professional service contracts are generally delivered within one year from the date of the arrangement. Sales and other taxes collected from customers to be remitted to government authorities are primarily reported on a net basis, where taxes collected are excluded from revenue. |
Cost of Revenue | Cost of Revenue Cost of subscriptions, support, professional services and other revenue are expensed as incurred. Cost of subscription and support revenue primarily consists of expenses related to hosting the Company's service and providing support to the Company's customers. These expenses are comprised of data center operations costs and personnel and related costs directly associated with the Company's cloud infrastructure, customer support and customer success organizations, including salaries, benefits, bonuses and stock-based compensation, as well as allocated overhead. Overhead associated with facilities and depreciation, excluding depreciation related to the Company's data center infrastructure, is allocated to cost of revenue and operating expenses based on headcount. Cost of professional services and other revenue consists primarily of personnel and related costs directly associated with the Company's professional services and training organizations, including salaries, benefits, bonuses and stock-based compensation, the costs of sub-contracted third-party vendors, as well as allocated overhead. |
Deferred Revenue | Deferred Revenue Deferred revenue consists of billings or payments received in advance of revenue recognition and are recognized as the revenue recognition criteria are met. The Company generally invoices its customers annually or in quarterly installments payable in advance. Accordingly, the deferred revenue balance does not represent the total contract value of annual or multi-year, non-cancelable arrangements. The current portion of deferred revenue represents the amount that is expected to be recognized as revenue within one year from the balance sheet date. |
Commissions | Commissions Sales and marketing commissions are recognized as an expense generally at the time the customer order is signed. Substantially all of the effort by the sales and marketing organization is expended through the time of closing the sale with limited or no involvement thereafter. Commissions paid are subject to clawback by the Company in the event the customer fails to make payment on the agreement. |
Warranties and Indemnification | Warranties and Indemnification The Company's cloud-based solutions platform and applications are typically warranted to perform in a manner consistent with general industry standards that are reasonably applicable and materially in accordance with the Company's on-line help documentation under normal use and circumstances. The Company includes service level commitments to its customers warranting certain levels of uptime reliability and performance and permitting those customers to receive credits in the event that the Company fails to meet those levels. To date, the Company has not incurred any material costs as a result of such commitments and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements. The Company's arrangements include provisions indemnifying customers against liabilities if the Company's products infringe a third-party's intellectual property rights. The Company also enters into arrangements that include provisions indemnifying customers for other liabilities from time to time. The Company has not incurred any costs as a result of such indemnification and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements. The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of those persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person's service as a director or officer, including any action by the Company, arising out of that person's services as the Company's director or officer or that person's services provided to any other company or enterprise at the Company's request. The Company maintains director and officer insurance coverage that may enable the Company to recover a portion of any future indemnification amounts paid. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. For the years ended December 31, 2015, 2014 and 2013 advertising expenses were $2.5 million, $1.9 million and $1.5 million, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company uses the fair value method for recording stock-based compensation. Stock-based compensation cost for stock options and stock purchase rights provided under the Employee Stock Purchase Plan (ESPP) is estimated at the grant date based on each option's fair-value as calculated by the Black-Scholes option-pricing model. The Company recognizes compensation cost for stock option grants and ESPP on a straight-line basis over the requisite service period for the entire award. Stock-based compensation cost for restricted stock units (RSUs) is measured based on the fair value of the underlying shares on the date of grant. All RSUs are subject to a time-based vesting condition and some are also subject to a performance-based vesting condition, both of which must be satisfied before the RSUs are vested and settled for shares of common stock. The time-based vesting condition is generally 4 years. The Company recognizes the compensation cost for RSUs which contain performance conditions based upon the probability of that performance condition being met, over the respective time-based vesting period. RSUs that do not satisfy the time-based vesting condition as of termination of employment are automatically forfeited. All RSUs will expire 7 years from the grant date if not previously settled for shares of common stock. Stock-based compensation expense related to market-performance based RSUs (MSUs) granted to certain of our executives is measured based upon the fair market value as of the date of the award using the Monte Carlo valuation methodology. The stock-based compensation expense for each MSU award is recognized using the graded vesting method. Stock-based compensation expense associated with participants who fulfil their requisite service period is not reversed even if the performance conditions are not met. However, stock-based compensation expense is reversed for participants who forfeit their MSU awards prior to fulfilling their requisite service period. Stock-based compensation expenses are only recognized for awards that are expected to vest. The Company estimates its forfeiture based on historical forfeitures of its stock-based awards and adjusts the rate to reflect changes in facts and circumstances, if any. |
Income Taxes | Income Taxes The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. Compliance with income tax regulations requires the Company to make decisions relating to the transfer pricing of revenue and expenses between each of its legal entities that are located in several countries. The Company's determinations include many decisions based on management's knowledge of the underlying assets of the business, the legal ownership of these assets, and the ultimate transactions conducted with customers and other third parties. The calculation of the Company's tax liabilities involves dealing with uncertainties in the application of complex tax regulations in multiple tax jurisdictions. The Company may be periodically reviewed by domestic and foreign tax authorities regarding the amount of taxes due. These reviews may include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, the Company records estimated reserves when it is more likely than not that an uncertain tax position will not be sustained upon examination by a taxing authority. Such estimates are subject to change. See Note 11, "Income Taxes". |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders Basic and diluted net loss per share of common stock is presented in conformity with the two-class method required for participating securities for 2015, 2014 and 2013. The Company considers the shares issued upon the early exercise of stock options subject to repurchase to be participating securities, because holders of such shares have dividend rights in the event a dividend is paid on common stock. Prior to its conversation to common stock, holders of Series A, B, C, D, E, F and G convertible preferred stock were each entitled to receive noncumulative dividends out of any funds legally available, when, as and if declared by the board of directors, payable prior and in preference to any dividends on any shares of the Company's common stock. The dividend rates for Series A, B, C, D, E, F and G convertible preferred stock were $0.08, $0.12, $0.20, $0.379, $0.5326, $1.056 and $1.168 per share, respectively. In the event a dividend is paid to common stockholders, the holders of the Series A, B, C, D, E, F and G convertible preferred stock were entitled to a proportionate share of any such dividends as if they were holders of common stock (on an as-if converted basis). Under the two-class method, net income (loss) attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income less current period convertible preferred stock non-cumulative dividends, between common stock and preferred stock. In computing diluted net income (loss) attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. Basic net income (loss) per share of common stock is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Unvested common shares resulting from the early exercises of stock options are excluded from the calculation of the weighted average common shares until they vest as they are subject to repurchase until they are vested. Those shares are added to the calculation of the weighted average common shares outstanding as they vest. Diluted net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding, including potential dilutive common shares assuming the dilutive effect of potential common shares for the period determined using the treasury stock method. For purposes of this calculation, convertible preferred stock, options to purchase common stock and restricted stock units are considered to be potential dilutive common shares, but have been excluded from the calculation of diluted net loss per share of common stock as their effect is antidilutive for all periods presented. Holders of convertible preferred stock and holders of stock subject to repurchase did not have a contractual obligation to share in the losses of the Company. Given the Company is in a loss position for all periods presented, the Company has not allocated losses to early exercise shares subject to repurchase or series of convertible preferred stock. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases." ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. We have not evaluated the impact of the updated guidance on our consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, related to balance sheet classification of deferred taxes. The ASU requires that deferred tax assets and liabilities be classified as noncurrent in the statement of financial position, thereby simplifying the current guidance that requires an entity to separate deferred assets and liabilities into current and noncurrent amounts. The ASU will be effective for the Company beginning in the first quarter of fiscal year 2017 though early adoption is permitted. The Company has early-adopted the ASU as of December 31, 2015. The Company has adopted this accounting standard prospectively; accordingly, the prior period amounts in the Company's Consolidated Balance Sheet as of December 31, 2014 were not adjusted to conform to the new accounting standard. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. The pronouncement eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is consummated. The pronouncement is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. The Company has elected not to early adopt. The adoption of ASU 2015-16 is not expected to have a material impact on the Company's consolidated financial statements. In August 2015, subsequent to the issuance of ASU 2015-3, FASB issued ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs pursuant to Staff Announcement at June 18, 2015 EITF Meeting. The pronouncement included the SEC staff guidance section indicating that the SEC staff would not object to deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding balances on the arrangement. The pronouncement is effective upon adoption of ASU 2015-3. The adoption of ASU 2015-15 is not expected to have a material impact on the Company's consolidated financial statements. In April 2015, the FASB issued ASU 2015-3, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The pronouncement requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The pronouncement is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. The Company has elected not to early adopt. The adoption of ASU 2015-3 is not expected to have a material impact on the Company's consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40). The pronouncement was issued to provide guidance concerning accounting for fees in a cloud computing arrangement. The pronouncement is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The adoption of ASU 2015-05 is not expected to have a material impact on the Company's consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which 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. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU 2014-09 also specifies the accounting for some costs to obtain or fulfill a contract with a customer. In July 2015, the FASB approved a one year deferral of the effective date for the new revenue reporting standard for entities reporting under U.S. GAAP. In accordance with the deferral, this guidance will be effective for the Company, beginning January 1, 2018, and can be applied either retrospectively to each period presented or as a cumulative effect adjustment as of the date of adoption. Early adoption is permitted beginning January 1, 2017. The Company has elected not to early adopt. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its consolidated financial statements. |
The Company and Summary of Si24
The Company and Summary of Significant Accounting Policies and Estimates (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
The Company and Summary of Significant Accounting Policies and Estimates | |
Schedule of changes in allowance for doubtful accounts | Balance at Beginning of Period Provision, net of Recoveries Write-offs Balance at End of Period (in thousands) Year ended December 31, 2013 $ $ $ ) $ Year ended December 31, 2014 ) Year ended December 31, 2015 ) |
Business Combinations (Tables)
Business Combinations (Tables) - Insightera, Ltd. | 12 Months Ended |
Dec. 31, 2015 | |
Acquisition | |
Schedule of total purchase price allocated to the net assets acquired based upon fair values | Purchase Price Allocation (in thousands) Tangible assets: Cash and cash equivalents $ Accounts receivable Other current assets Property and equipment Other assets ​ ​ ​ ​ ​ Total tangible assets ​ ​ ​ ​ ​ Liabilities assumed: Accounts payable and accrued liabilities ) Deferred revenues ) Other long-term liabilities ) ​ ​ ​ ​ ​ Total liabilities assumed ) ​ ​ ​ ​ ​ Deferred tax liability ) Intangible assets Goodwill ​ ​ ​ ​ ​ Total purchase price $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of components of identifiable intangible assets acquired in connection with acquisition | Estimated Useful Life Amount (in years) (in thousands) Developed technology $ Domain names Customer relationships ​ ​ ​ ​ ​ ​ ​ ​ Total intangible assets $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Joint Venture (Tables)
Joint Venture (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Joint Venture | |
Schedule of the activities of the Company's redeemable non-controlling interests | The following table reconciles net loss and adjustment attributable to redeemable non-controlling interests for periods indicated below (in thousands): Redeemable Non-controlling Interests Balance as of December 31, 2013 $ — Investment by redeemable non-controlling interests Net loss attributable to redeemable non-controlling interests (before adjustment to redeemable non-controlling interests) ) Foreign currency translation adjustments ) ​ ​ ​ ​ ​ Balance as of December 31, 2014 Investment by redeemable non-controlling interests Net loss attributable to redeemable non-controlling interests (before adjustment to redeemable non-controlling interests) ) Foreign currency translation adjustments ) Adjustment to redeemable non-controlling interests ​ ​ ​ ​ ​ Balance as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Fair Value of Financial Instr27
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value of Financial Instruments | |
Schedule of financial assets measured stated at fair value on a recurring basis | December 31, 2015 December 31, 2014 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (in thousands) Money market funds $ $ — $ — $ $ — $ — Certificates of deposit — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ — $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Balance Sheet Components | |
Schedule of cash and cash equivalents | December 31, 2015 2014 (in thousands) Cash $ $ Cash equivalents Money market funds Certificates of deposit ​ ​ ​ ​ ​ ​ ​ ​ Total cash equivalents ​ ​ ​ ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of property and equipment, net | December 31, 2015 2014 (in thousands) Computer equipment $ $ Software Office furniture Leasehold improvements Construction in progress ​ ​ ​ ​ ​ ​ ​ ​ Total property and equipment Less accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of accrued expenses and other current liabilities | December 31, 2015 2014 (in thousands) Accrued bonuses, commissions and wages $ $ Accrued ESPP Accrued vacation Accrued marketing expenses Accrued other ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets, Net | |
Schedule of goodwill and intangible assets | December 31, 2015 Weighted Average Remaining Useful Life December 31, 2014 Weighted Average Remaining Useful Life (in thousands) (in years) (in thousands) (in years) Developed technology $ $ Domain names Customer relationships Non-compete agreements Capitalized software development costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets, net Goodwill ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill and intangible assets, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of amortization expense | Year Ended December 31, 2015 2014 2013 (in thousands) Amortization expense $ $ $ |
Schedule of estimated future amortization based on the carrying amount of intangible assets | Based on the carrying amount of intangible assets as of December 31, 2015, the estimated future amortization is as follows (in thousands): Year Ended December 31, 2016 2017 2018 2019 Total Developed Technology $ $ $ — $ — $ Domain Names Customer Relationships — — — Non-compete Agreements — — Capitalized Software Development Costs — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Credit Facility (Tables)
Credit Facility (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Credit Facility | |
Schedule of contractual future repayments in relation to the outstanding loan balance | Principal Interest Total (in thousands) 2016 $ $ $ 2017 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies. | |
Schedule of deferred rent balance | December 31, 2015 2014 (in thousands) Current portion of deferred rent $ $ — Long-term portion of deferred rent ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of future minimum operating lease payments | Minimum Lease Payment (in thousands) 2016 $ 2017 2018 2019 ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Stockholder's Equity and Stoc32
Stockholder's Equity and Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stockholder's Equity and Stock Based Compensation | |
Summary of stock option activity | Number of Stock Options Outstanding (in thousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Balance as of December 31, 2014 $ Granted Exercised ) Options Cancelled/Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable as of December 31, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vested and expected to vest as of December 31, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of weighted average grant date fair value of options granted and the total intrinsic value of options exercised | Year Ended December 31, 2015 2014 2013 Weighted average grant date fair value $ $ $ Total intrinsic value of options exercised (in thousands) $ $ $ |
Schedule of information regarding options outstanding | Options Outstanding Options Exercisable Weighted Average Remaining Contractual Term (in years) Range of Exercise Prices Number of Shares Outstanding (in thousands) Weighted Average Exercise Price Shares Exercisable (in thousands) Weighted Average Exercise Price $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of assumptions used for estimation of fair value of options granted to employees | Year Ended December 31, 2015 2014 2013 Expected term (in years) 6 6 6 Risk-free interest rate 1.55% - 1.87% 1.80% - 1.97% 0.86% - 1.78% Expected volatility 43% - 45% 49% - 56% 57% - 58% Expected dividend rate 0% 0% 0% |
Summary of Restricted Stock Units RSUs activity | Number of RSUs (in thousands) Weighted Average Grant Date Fair Value Balance as of December 31, 2014 $ RSUs Granted RSUs Vested ) RSUs Cancelled/Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of weighted average grant date fair value of RSU and the total intrinsic value of RSU vested | Year Ended December 31, 2015 2014 2013 Weighted average grant date fair value $ $ $ Total intrinsic value of vested RSUs (in thousands) $ $ $ |
Schedule of market performance based compensation restricted stock units (MSU) award activity | Number of Shares Underlying MSUs Weighted Average Grant Date Fair Value (in thousands) Balance as of December 31, 2014 — $ — MSUs Granted MSUs Cancelled/Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of weighted average assumptions used to estimate fair value of market performance based compensation restricted stock units (MSU) awards | For the Year Ended December 31, 2015 Expected term (in years) Risk-free interest rate % Expected volatility % Expected dividend rate % |
Schedule of assumptions used to value employee stock purchase rights under the Black-Scholes model | Year Ended December 31, 2015 2014 2013 Expected term (in months) 6 6 - 9 9 Risk-free interest rate 0.05% - 0.24% 0.05% - 0.11% 0.11% Expected volatility 31% - 43% 41% - 43% 42% Expected dividend rate 0% 0% 0% |
Schedule of stock-based compensation expense included in operating results | Year Ended December 31, 2015 2014 2013 (in thousands) Cost of subscription and support revenue $ $ $ Cost of professional services and other revenue Research and development Sales and marketing General and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stock-based compensation expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of total unrecognized compensation cost related to unvested awards not yet recognized under all equity compensation plans, adjusted for estimate forfeitures | December 31, 2015 Unrecognized Expense Weighted Average Expected Recognition Period (in thousands) (in years) Stock options $ Restricted stock units and market stock units Employee stock purchase plan ​ ​ ​ ​ ​ ​ ​ ​ Total unrecognized stock-based compensation expense $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Net Loss per Share | |
Schedule of computation of basic and diluted net loss per share of common stock | Year Ended December 31, 2015 2014 2013 (in thousands, except per share data) Numerator: Net loss attributable to Marketo $ ) $ ) $ ) Denominator: Weighted-average common shares outstanding Less: Weighted-average unvested common shares subject to repurchase or forfeiture and shares held in escrow ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average shares used in computing net loss per share of common stock, basic and diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share of common stock, basic and diluted $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of potentially dilutive securities excluded from the diluted per share calculation | Year Ended December 31, 2015 2014 2013 (in thousands) Stock options to purchase common stock Common stock held in escrow Common stock subject to repurchase Employee stock purchase plan Restricted stock units and market stock units ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Schedule of pretax loss | Year Ended December 31, 2015 2014 2013 (in thousands) Loss before provision (benefit) for income taxes: Domestic $ ) $ ) $ ) Foreign ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of provision for income taxes | Year Ended December 31, 2015 2014 2013 (in thousands) Current tax provision: Federal $ $ $ — State Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current tax provision Federal — ) — State — ) — Foreign ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax benefit ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total provision (benefit) for income taxes $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of difference between income taxes computed at the federal statutory rate and the provision for income taxes | Year Ended December 31, 2015 2014 2013 Federal statutory rate % % % Stock-based compensation ) ) ) Valuation allowance ) ) ) Foreign rate differential ) ) ) Federal research and development credit Other ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective income tax rate )% % )% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of components of deferred tax assets and liabilities | Year Ended December 31, 2015 2014 2013 (in thousands) Deferred tax assets: Accounts receivable principally due to allowance for doubtful accounts $ $ $ Compensated absences, principally due to accruals for financial reporting purposes Net operating loss carryforwards Federal tax credits State tax credits net of federal benefit Other deductible temporary differences Stock-based compensation Foreign Credit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets $ $ Deferred tax liabilities: Capitalized software development ) ) ) Acquired intangible assets ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liability ) ) ) Valuation allowance ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred taxes $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of net operating loss carryforwards | Year Ended December 31, 2015 2014 2013 (in thousands) Federal $ $ $ State Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of research and development credit carryforwards | Year Ended December 31, 2015 2014 2013 (in thousands) Federal $ $ $ California International ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of activity related to unrecognized tax benefits | Year Ended December 31, 2015 2014 2013 (in thousands) Unrecognized benefit—beginning of period $ $ $ — Gross increases (decreases)—prior period tax positions — Gross increases (decreases)—current period tax positions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized benefit—end of period $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Segment Information and Infor35
Segment Information and Information about Geographic Areas (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Information and Information about Geographic Areas | |
Schedule of revenue by geographic region | Year Ended December 31, 2015 2014 2013 (in thousands) United States $ $ $ EMEA Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of long-lived assets by geographic areas | Year Ended December 31, 2015 2014 (in thousands) United States $ $ EMEA Other ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events | |
Schedule of incremental minimum lease payments | Incremental Minimum Lease Payments (in thousands) 2016 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
The Company and Summary of Si37
The Company and Summary of Significant Accounting Policies and Estimates (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 13, 2013 | May. 17, 2013 | Dec. 31, 2014 |
Initial Public Offering and Follow-On Offering | |||
Aggregate proceeds from the IPO and concurrent private placement before deduction of offering expenses | $ 87,000 | ||
Offering expenses | $ 3,400 | $ 62 | |
Number of shares of common stock issued upon automatic conversion of convertible preferred stock | 25,876,142 | ||
Initial public offering | |||
Initial Public Offering and Follow-On Offering | |||
Shares of common stock sold | 6,968,435 | ||
Share Price | $ 13 | ||
Underwriters' overallotment option | |||
Initial Public Offering and Follow-On Offering | |||
Shares of common stock sold | 908,926 | ||
Share Price | $ 13 | ||
Selling Stockholders' | |||
Initial Public Offering and Follow-On Offering | |||
Shares of common stock sold | 5,337,502 | 309,509 | |
Share Price | $ 13 | ||
Private Placement | |||
Initial Public Offering and Follow-On Offering | |||
Shares of common stock sold | 500,000 | ||
Share Price | $ 13 | ||
Follow-on offering | |||
Initial Public Offering and Follow-On Offering | |||
Shares of common stock sold | 6,000,000 | ||
Share Price | $ 35.50 | ||
Proceeds from common stock sold | $ 22,500 | ||
Offering expenses | $ 700 | ||
Common stock sold by the Company | |||
Initial Public Offering and Follow-On Offering | |||
Shares of common stock sold | 662,498 |
The Company and Summary of Si38
The Company and Summary of Significant Accounting Policies and Estimates (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Foreign Currency Transaction | |||
Net foreign currency gains (losses) | $ 200 | $ 400 | $ (300) |
Changes in allowance for doubtful accounts | |||
Allowance for Doubtful Accounts Receivable, Beginning Balance | 393 | 329 | 336 |
Provision, net of Recoveries | 738 | 417 | 452 |
Write-offs | (574) | (353) | (459) |
Allowance for Doubtful Accounts Receivable, Ending Balance | $ 557 | $ 393 | $ 329 |
Minimum | |||
Property and Equipment | |||
Estimated useful lives of the asset | 2 years | ||
Maximum | |||
Property and Equipment | |||
Estimated useful lives of the asset | 3 years |
The Company and Summary of Si39
The Company and Summary of Significant Accounting Policies and Estimates (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Capitalized Software Development Costs, Goodwill and Other Intangible Assets | |||
Amortization expense | $ 3,559 | $ 2,256 | $ 717 |
Maximum | |||
Capitalized Software Development Costs, Goodwill and Other Intangible Assets | |||
Estimated useful life of intangible assets | 7 years | ||
Minimum | |||
Capitalized Software Development Costs, Goodwill and Other Intangible Assets | |||
Estimated useful life of intangible assets | 1 year | ||
Capitalized software development costs | |||
Capitalized Software Development Costs, Goodwill and Other Intangible Assets | |||
Estimated useful life of intangible assets | 1 year 2 months 12 days | 1 year 2 months 12 days | |
Amortization expense | $ 1,200 | $ 300 | $ 200 |
Capitalized software development costs | Maximum | |||
Capitalized Software Development Costs, Goodwill and Other Intangible Assets | |||
Estimated useful life of intangible assets | 2 years | ||
Capitalized software development costs | Minimum | |||
Capitalized Software Development Costs, Goodwill and Other Intangible Assets | |||
Estimated useful life of intangible assets | 18 months |
The Company and Summary of Si40
The Company and Summary of Significant Accounting Policies and Estimates (Details 4) | 12 Months Ended |
Dec. 31, 2015item | |
Concentration of Credit Risk and Significant Customers | |
Term of credit from the invoice date | 30 days |
Revenue Recognition | |
Number of sources of revenue | 2 |
Minimum | |
The Company and Summary of Significant Accounting Policies and Estimates | |
Estimated useful life of intangible assets | 1 year |
Maximum | |
The Company and Summary of Significant Accounting Policies and Estimates | |
Estimated useful life of intangible assets | 7 years |
Subscription and support services | Minimum | |
Revenue Recognition | |
Term over which revenue is recognized | 3 months |
Subscription and support services | Maximum | |
Revenue Recognition | |
Term over which revenue is recognized | 36 months |
Enablement services | Minimum | |
Revenue Recognition | |
Term of services | 1 day |
Enablement services | Maximum | |
Revenue Recognition | |
Term of services | 10 days |
Implementation services | |
Revenue Recognition | |
Term over which revenue is recognized | 120 days |
The Company and Summary of Si41
The Company and Summary of Significant Accounting Policies and Estimates (Details 5) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Advertising Costs | |||
Advertising expenses | $ 2.5 | $ 1.9 | $ 1.5 |
RSUs | |||
Stock-Based Compensation | |||
Period of time-based vesting | 4 years | 4 years | 4 years |
Expiration period from the date of grant | 7 years | ||
RSUs | Minimum | |||
Stock-Based Compensation | |||
Period of time-based vesting | 3 years | ||
RSUs | Maximum | |||
Stock-Based Compensation | |||
Period of time-based vesting | 4 years |
The Company and Summary of Si42
The Company and Summary of Significant Accounting Policies and Estimates (Details 6) - Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2015$ / shares | |
Series A convertible preferred stock | |
Net Loss per Share Attributable to Common Stockholders | |
Dividend rates per share (in dollars per share) | $ 0.08 |
Series B convertible preferred stock | |
Net Loss per Share Attributable to Common Stockholders | |
Dividend rates per share (in dollars per share) | 0.12 |
Series C convertible preferred stock | |
Net Loss per Share Attributable to Common Stockholders | |
Dividend rates per share (in dollars per share) | 0.20 |
Series D convertible preferred stock | |
Net Loss per Share Attributable to Common Stockholders | |
Dividend rates per share (in dollars per share) | 0.379 |
Series E convertible preferred stock | |
Net Loss per Share Attributable to Common Stockholders | |
Dividend rates per share (in dollars per share) | 0.5326 |
Series F convertible preferred stock | |
Net Loss per Share Attributable to Common Stockholders | |
Dividend rates per share (in dollars per share) | 1.056 |
Series G convertible preferred stock | |
Net Loss per Share Attributable to Common Stockholders | |
Dividend rates per share (in dollars per share) | $ 1.168 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 22, 2014 | Dec. 19, 2013 | Jan. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Liabilities assumed: | ||||||
Goodwill | $ 29,201 | $ 29,201 | ||||
Total purchase price allocation | ||||||
Goodwill | $ 29,201 | $ 29,201 | ||||
Minimum | ||||||
Additional disclosures | ||||||
Estimated useful life of intangible assets | 1 year | |||||
Maximum | ||||||
Additional disclosures | ||||||
Estimated useful life of intangible assets | 7 years | |||||
Developed technology | ||||||
Additional disclosures | ||||||
Estimated useful life of intangible assets | 1 year 10 months 24 days | 2 years 10 months 24 days | ||||
Domain names | ||||||
Additional disclosures | ||||||
Estimated useful life of intangible assets | 2 years 9 months 18 days | 3 years 7 months 6 days | ||||
Customer relationships | ||||||
Additional disclosures | ||||||
Estimated useful life of intangible assets | 9 months 18 days | 1 year 7 months 6 days | ||||
Non-compete agreements | ||||||
Additional disclosures | ||||||
Estimated useful life of intangible assets | 2 years | 3 years | ||||
Stock options to purchase common stock | ||||||
Acquisition | ||||||
Closing stock price (in dollars per share) | $ 28.71 | |||||
RSUs | ||||||
Additional disclosures | ||||||
Granted to employees (in shares) | 2,017,000 | |||||
Insightera, Ltd. | ||||||
Acquisition | ||||||
Cash consideration | $ 9,800 | |||||
Number of shares issued | 427,761 | |||||
Closing stock price (in dollars per share) | $ 32.89 | |||||
Number of shares withheld in escrow | 137,252 | |||||
Transaction costs | $ 700 | |||||
Additional costs of registration of common stock issued | $ 200 | |||||
Tangible assets: | ||||||
Cash and cash equivalents | $ 3,624 | |||||
Accounts receivable | 46 | |||||
Other current assets | 60 | |||||
Property and equipment | 71 | |||||
Other assets | 13 | |||||
Total tangible assets | 3,814 | |||||
Liabilities assumed: | ||||||
Accounts payable and accrued liabilities | (391) | |||||
Deferred revenues | (116) | |||||
Other long-term liabilities | (27) | |||||
Total liabilities assumed | (534) | |||||
Deferred tax liability | 374 | |||||
Intangible assets | 4,600 | |||||
Goodwill | 16,404 | |||||
Total purchase price | 23,910 | |||||
Total purchase price allocation | ||||||
Intangible assets | 4,600 | |||||
Goodwill | 16,404 | |||||
Insightera, Ltd. | Maximum | ||||||
Liabilities assumed: | ||||||
Escrow shares withheld, period | 18 months | |||||
Insightera, Ltd. | Developed technology | ||||||
Total purchase price allocation | ||||||
Intangible assets | $ 3,650 | |||||
Additional disclosures | ||||||
Estimated useful life of intangible assets | 4 years | |||||
Insightera, Ltd. | Domain names | ||||||
Total purchase price allocation | ||||||
Intangible assets | $ 250 | |||||
Additional disclosures | ||||||
Estimated useful life of intangible assets | 3 years | |||||
Insightera, Ltd. | Customer relationships | ||||||
Total purchase price allocation | ||||||
Intangible assets | $ 700 | |||||
Additional disclosures | ||||||
Estimated useful life of intangible assets | 3 years | |||||
Insightera, Ltd. | RSUs | ||||||
Additional disclosures | ||||||
Granted to employees (in shares) | 139,464 | |||||
Value of shares granted to employees | $ 6,100 | |||||
Immaterial Business Acquisition | ||||||
Acquisition | ||||||
Total Consideration | $ 5,000 | |||||
Cash consideration | $ 200 | |||||
Number of shares issued | 141,074 | |||||
Closing stock price (in dollars per share) | $ 33.71 | |||||
Liabilities assumed: | ||||||
Deferred tax liability | $ 300 | |||||
Goodwill | 3,200 | |||||
Total purchase price allocation | ||||||
Net tangible assets acquired | 500 | |||||
Intangible assets | 1,600 | |||||
Goodwill | $ 3,200 | |||||
Additional disclosures | ||||||
Estimated useful life of intangible assets | 3 years | |||||
Immaterial Business Acquisition | RSUs | ||||||
Liabilities assumed: | ||||||
Value of shares issued | $ 6,400 | |||||
Immaterial Business Acquisition | Time based RSU member | ||||||
Acquisition | ||||||
Number of shares issued | 146,762 | |||||
Immaterial Business Acquisition | Performance based RSU member | ||||||
Acquisition | ||||||
Number of shares issued | 42,932 |
Joint Venture (Details)
Joint Venture (Details) $ in Thousands | Feb. 19, 2014JPY (Â¥) | Feb. 19, 2014USD ($) | Mar. 31, 2015JPY (Â¥) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Joint Venture | ||||||
Amount contributed by investors to acquire equity interests | $ 1,678 | $ 1,953 | ||||
Percentage of the common stock callable or puttable beginning on the seventh anniversary | 20.00% | |||||
Percentage of the common stock callable or puttable beginning on the eighth anniversary | 40.00% | |||||
Percentage of the common stock callable or puttable beginning on the tenth anniversary | 100.00% | |||||
Redeemable non-controlling interests | ||||||
Balance | $ 800 | |||||
Increase due to investment by redeemable non-controlling interests | 1,445 | 1,585 | ||||
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest | (1,645) | (618) | ||||
Redeemable Noncontrolling Interest Foreign Currency Translation Adjustments | (20) | (167) | ||||
Adjustment to redeemable non-controlling interests | 4,063 | |||||
Balance | $ 4,643 | $ 800 | ||||
Marketo KK | Vesting milestones | ||||||
Joint Venture | ||||||
Equity interests held by company (as a percent) | 60.10% | 60.10% | ||||
Contributions to subscribe to additional shares | ¥ 237,480,955 | $ 2,000 | ||||
Investors | ||||||
Joint Venture | ||||||
Amount contributed by investors to acquire equity interests | ¥ 200,000,000 | $ 2,000 | ||||
Percentage of equity interest held by investors | 35.40% | 35.40% | ||||
Investors | Vesting milestones | ||||||
Joint Venture | ||||||
Contributions to subscribe to additional shares | ¥ 200,000,000 | $ 1,700 | ||||
Percentage of equity interest held by investors | 39.90% | 39.90% |
Fair Value of Financial Instr45
Fair Value of Financial Instruments (Details) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Level 1 | ||
Fair Value of Financial Instruments | ||
Total fair value of financial assets | $ 93,108 | $ 104,021 |
Level 1 | Money market funds | ||
Fair Value of Financial Instruments | ||
Total fair value of financial assets | 93,108 | 104,021 |
Level 2 | ||
Fair Value of Financial Instruments | ||
Total fair value of financial assets | 25 | 25 |
Level 2 | Certificates of deposit | ||
Fair Value of Financial Instruments | ||
Total fair value of financial assets | $ 25 | $ 25 |
Balance Sheet Components (Detai
Balance Sheet Components (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash and cash equivalents | ||||
Cash | $ 14,085 | $ 8,598 | ||
Cash equivalents: | ||||
Money market funds | 93,108 | 104,021 | ||
Certificates of deposit | 25 | 25 | ||
Total cash equivalents | 93,133 | 104,046 | ||
Cash and cash equivalents | 107,218 | 112,644 | $ 128,299 | $ 44,247 |
Property and equipment, net | ||||
Total property and equipment | 44,537 | 29,740 | ||
Less accumulated depreciation | (23,214) | (12,908) | ||
Property and equipment, net | 21,323 | 16,832 | ||
Depreciation expense | 10,400 | 7,200 | $ 3,900 | |
Computer equipment | ||||
Property and equipment, net | ||||
Total property and equipment | 28,159 | 18,384 | ||
Software | ||||
Property and equipment, net | ||||
Total property and equipment | 3,498 | 2,417 | ||
Office furniture | ||||
Property and equipment, net | ||||
Total property and equipment | 2,952 | 2,071 | ||
Leasehold improvements | ||||
Property and equipment, net | ||||
Total property and equipment | 7,120 | 5,123 | ||
Construction in progress | ||||
Property and equipment, net | ||||
Total property and equipment | $ 2,808 | $ 1,745 |
Balance Sheet Components (Det47
Balance Sheet Components (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued expenses and other current liabilities | ||
Accrued bonuses, commissions and wages | $ 12,343 | $ 10,553 |
Accrued ESPP | 2,387 | 2,324 |
Accrued vacation | 3,739 | 2,972 |
Accrued marketing expenses | 1,289 | 1,313 |
Accrued other | 5,948 | 3,529 |
Total | $ 25,706 | $ 20,691 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill and Intangible Assets, Net | |||
Intangible assets, gross | $ 13,160 | $ 11,222 | |
Less accumulated amortization | (7,705) | (4,146) | |
Net Carrying Amount | 5,455 | 7,076 | |
Goodwill | 29,201 | 29,201 | |
Goodwill and intangible assets, net | 34,656 | 36,277 | |
Amortization expense | 3,559 | 2,256 | $ 717 |
Estimated future amortization | |||
2,016 | 3,383 | ||
2,017 | 1,943 | ||
2,018 | 100 | ||
2,019 | 29 | ||
Net Carrying Amount | 5,455 | 7,076 | |
Developed technology | |||
Goodwill and Intangible Assets, Net | |||
Intangible assets, gross | 6,050 | $ 6,050 | |
Net Carrying Amount | $ 2,915 | ||
Weighted Average Remaining Useful Life | 1 year 10 months 24 days | 2 years 10 months 24 days | |
Estimated future amortization | |||
2,016 | $ 1,508 | ||
2,017 | 1,407 | ||
Net Carrying Amount | 2,915 | ||
Domain names | |||
Goodwill and Intangible Assets, Net | |||
Intangible assets, gross | 950 | $ 950 | |
Net Carrying Amount | $ 409 | ||
Weighted Average Remaining Useful Life | 2 years 9 months 18 days | 3 years 7 months 6 days | |
Estimated future amortization | |||
2,016 | $ 180 | ||
2,017 | 100 | ||
2,018 | 100 | ||
2,019 | 29 | ||
Net Carrying Amount | 409 | ||
Customer relationships | |||
Goodwill and Intangible Assets, Net | |||
Intangible assets, gross | 1,600 | $ 1,600 | |
Net Carrying Amount | $ 315 | ||
Weighted Average Remaining Useful Life | 9 months 18 days | 1 year 7 months 6 days | |
Estimated future amortization | |||
2,016 | $ 315 | ||
Net Carrying Amount | 315 | ||
Non-compete agreements | |||
Goodwill and Intangible Assets, Net | |||
Intangible assets, gross | 580 | $ 580 | |
Net Carrying Amount | $ 294 | ||
Weighted Average Remaining Useful Life | 2 years | 3 years | |
Estimated future amortization | |||
2,016 | $ 150 | ||
2,017 | 144 | ||
Net Carrying Amount | 294 | ||
Capitalized software development costs | |||
Goodwill and Intangible Assets, Net | |||
Intangible assets, gross | 3,980 | $ 2,042 | |
Net Carrying Amount | $ 1,522 | ||
Weighted Average Remaining Useful Life | 1 year 2 months 12 days | 1 year 2 months 12 days | |
Software development costs capitalized during period | $ 1,900 | $ 700 | |
Amortization expense | 1,200 | $ 300 | $ 200 |
Estimated future amortization | |||
2,016 | 1,230 | ||
2,017 | 292 | ||
Net Carrying Amount | $ 1,522 |
Credit Facility (Detail)
Credit Facility (Detail) $ in Thousands | 1 Months Ended | |||
Jun. 30, 2013USD ($) | May. 31, 2012item | Dec. 31, 2015USD ($) | May. 21, 2012USD ($) | |
Equipment facility | ||||
Principal | ||||
2,016 | $ 2,174 | |||
2,017 | 478 | |||
Long-term Debt, Total | 2,652 | |||
Interest | ||||
2,016 | 62 | |||
2,017 | 4 | |||
Total | 66 | |||
Total | ||||
2,016 | 2,236 | |||
2,017 | 482 | |||
Total | $ 2,718 | |||
Original Line of Credit | ||||
Credit facility | ||||
Maximum borrowing capacity | $ 4,000 | |||
Minimum interest rate (as a percent) | 4.00% | |||
Percentage points above prime rate considered for determining interest rate | 0.75% | |||
Interest payment period | 9 months | |||
Number of equal monthly principal and interest payments | item | 36 | |||
Percentage of increase in interest rate basis of existence of an event as per loan and security agreement | 5.00% | |||
New line of credit | ||||
Credit facility | ||||
Maximum borrowing capacity | $ 4,500 | |||
Minimum interest rate (as a percent) | 4.00% | |||
Percentage points above prime rate considered for determining interest rate | 0.75% |
Commitments and Contingencies50
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Leases | |||
Current portion of deferred rent | $ 406,000 | ||
Long-term portion of deferred rent | 2,201,000 | $ 2,562,000 | |
Total deferred rent | 2,607,000 | 2,562,000 | |
Rent expense under operating leases | 5,700,000 | $ 4,200,000 | $ 2,700,000 |
Capital leases | 0 | ||
Future minimum operating lease payments | |||
2,016 | 6,816,000 | ||
2,017 | 7,175,000 | ||
2,018 | 5,103,000 | ||
2,019 | 704,000 | ||
Total | 19,798,000 | ||
Future payments for non-cancellable contractual agreements | |||
2,016 | 4,400,000 | ||
2,017 | 3,100,000 | ||
2,018 | $ 200,000 |
Stockholder's Equity and Stoc51
Stockholder's Equity and Stock Based Compensation (Detail) | May. 17, 2013shares | Dec. 31, 2015shares |
Stockholder's Equity and Stock Based Compensation | ||
Convertible preferred stock converted into common stock | 25,876,142 | |
Conversion ratio of convertible preferred stock | 1 | |
Series A convertible preferred stock | Convertible Preferred Stock | ||
Convertible Preferred Stock | ||
Shares Outstanding | 0 | |
Series B convertible preferred stock | Convertible Preferred Stock | ||
Convertible Preferred Stock | ||
Shares Outstanding | 0 | |
Series C convertible preferred stock | Convertible Preferred Stock | ||
Convertible Preferred Stock | ||
Shares Outstanding | 0 | |
Series D convertible preferred stock | Convertible Preferred Stock | ||
Convertible Preferred Stock | ||
Shares Outstanding | 0 | |
Series E convertible preferred stock | Convertible Preferred Stock | ||
Convertible Preferred Stock | ||
Shares Outstanding | 0 | |
Series F convertible preferred stock | Convertible Preferred Stock | ||
Convertible Preferred Stock | ||
Shares Outstanding | 0 | |
Series G convertible preferred stock | Convertible Preferred Stock | ||
Convertible Preferred Stock | ||
Shares Outstanding | 0 |
Stockholder's Equity and Stoc52
Stockholder's Equity and Stock Based Compensation (Detail 2) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | |
Additional information | ||||
Total stock-based compensation expense | $ 39,182 | $ 25,120 | $ 8,075 | |
Employee Stock Purchase Plan [Member] | ||||
Additional information | ||||
Total stock-based compensation expense | $ 1,700 | |||
RSUs | ||||
Stockholder's Equity and Stock Based Compensation | ||||
Vesting period | 4 years | 4 years | 4 years | |
Additional information | ||||
Total stock-based compensation expense | $ 26,400 | |||
RSUs | Minimum | ||||
Stockholder's Equity and Stock Based Compensation | ||||
Vesting period | 3 years | |||
RSUs | Maximum | ||||
Stockholder's Equity and Stock Based Compensation | ||||
Vesting period | 4 years | |||
Stock options to purchase common stock | ||||
Stockholder's Equity and Stock Based Compensation | ||||
Awards outstanding | 5,404,000 | 5,404,000 | 3,777,000 | |
Number of Stock Options Outstanding | ||||
Balance at the beginning of the period (in shares) | 5,404,000 | |||
Granted (in shares) | 65,000 | |||
Exercised (in shares) | (1,292,000) | |||
Cancelled/Forfeited (in shares) | (400,000) | |||
Balance at the end of the period (in shares) | 3,777,000 | 5,404,000 | ||
Exercisable at the end of the period (in shares) | 3,234,000 | |||
Vested and expected to vest at the end of the period (in shares) | 3,655,000 | |||
Weighted-Average Exercise Price | ||||
Balance at the beginning of the period (in dollars per share) | $ 11.55 | |||
Granted (in dollars per share) | 29.12 | |||
Exercised (in dollars per share) | 4.64 | |||
Cancelled/Forfeited (in dollars per share) | 17.81 | |||
Balance at end of the period (in dollars per share) | $ 13.55 | $ 11.55 | ||
Exercisable at the end of the period (in dollars per share) | $ 9.77 | |||
Vested and expected to vest at the end of the period (in dollars per share) | $ 13.20 | |||
Weighted-Average Remaining Contractual Life | ||||
Outstanding at the end of the period | 6 years 7 months 10 days | |||
Exercisable at the end of the period | 6 years 4 months 2 days | |||
Vested and expected to vest at the end of the period | 6 years 6 months 26 days | |||
Aggregate Intrinsic Value | ||||
Outstanding at the end of the period | $ 65,915 | |||
Exercisable at the end of the period | $ 65,435 | |||
Vested and expected to vest at the end of the period | $ 64,761 | |||
Closing stock price (in dollars per share) | $ 28.71 | |||
Additional information | ||||
Weighted average grant date fair value (in dollars per share) | $ 12.44 | $ 20.72 | $ 5.08 | |
Total intrinsic value of options exercised | $ 31,938 | $ 47,273 | $ 38,241 | |
Total estimated grant date fair value of options vested | 13,900 | $ 5,200 | $ 4,200 | |
Total stock-based compensation expense | $ 8,400 | |||
Stock options to purchase common stock | 2006 Stock Plan | ||||
Stockholder's Equity and Stock Based Compensation | ||||
Number of shares available for issuance | 0 | |||
Awards outstanding | 2,800,000 | 2,800,000 | ||
Vesting period | 4 years | |||
Number of Stock Options Outstanding | ||||
Balance at the end of the period (in shares) | 2,800,000 | |||
Stock options to purchase common stock | 2013 Equity Incentive Plan | ||||
Stockholder's Equity and Stock Based Compensation | ||||
Number of shares available for issuance | 9,119,341 | |||
Vesting period | 4 years | |||
Numbers of shares available for future grants | 3,900,000 | |||
Additional information | ||||
Number of shares available for issuance | 3,900,000 | |||
Stock options to purchase common stock | 2013 Equity Incentive Plan | Minimum | ||||
Stockholder's Equity and Stock Based Compensation | ||||
Number of shares increased annually under the plan which is available for issuance | 3,250,000 | |||
Number of shares as a percentage of outstanding shares on last day of preceding fiscal year which are available for issuance | 5.00% | |||
Stock options to purchase common stock | 2013 Equity Incentive Plan | Maximum | ||||
Stockholder's Equity and Stock Based Compensation | ||||
Exercise period | 10 years | |||
Stock options to purchase common stock | Employee Stock Purchase Plan [Member] | ||||
Stockholder's Equity and Stock Based Compensation | ||||
Numbers of shares available for future grants | 900,000 | |||
Additional information | ||||
Number of shares of common stock issued under the ESPP | 200,000 | |||
Average purchase price of shares issued (in dollars per share) | $ 23.88 | |||
Total common stock reserved for issuance (in shares) | 1,500,000 | |||
Number of shares available for issuance | 900,000 | |||
Stock options to purchase common stock | Employee Stock Purchase Plan [Member] | Minimum | ||||
Stockholder's Equity and Stock Based Compensation | ||||
Number of shares increased annually under the plan which is available for issuance | 650,000 | |||
Additional information | ||||
Number of shares as a percentage of outstanding shares on first day of fiscal year which are available for issuance | 1.00% | |||
Percentage of fair market value to purchase shares of common stock | 85.00% | |||
Stock options to purchase common stock | Employee Stock Purchase Plan [Member] | Maximum | ||||
Additional information | ||||
Maximum percentage of eligible compensation of employees to purchase shares of common stock | 15.00% | |||
Maximum number of shares that can be purchased by participant during an offering period | 1,250 |
Stockholder's Equity and Stoc53
Stockholder's Equity and Stock Based Compensation (Details 3) - Stock options to purchase common stock shares in Thousands | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
$ 0.12 - $ 1.50 | |
Information regarding options outstanding | |
Exercise Price, low end of range (in dollars per share) | $ 0.12 |
Exercise Price, high end of range (in dollars per share) | $ 1.50 |
Shares Outstanding | |
Number of shares | shares | 460 |
Weighted Average Remaining Contractual Term | 4 years 1 month 10 days |
Weighted Average Exercise Price (in dollars per share) | $ 1.17 |
Shares Exercisable | |
Number of shares | shares | 460 |
Weighted Average Exercise Price (in dollars per share) | $ 1.17 |
$ 2.38 - $ 4.24 | |
Information regarding options outstanding | |
Exercise Price, low end of range (in dollars per share) | 2.38 |
Exercise Price, high end of range (in dollars per share) | $ 4.24 |
Shares Outstanding | |
Number of shares | shares | 390 |
Weighted Average Remaining Contractual Term | 5 years 4 months 10 days |
Weighted Average Exercise Price (in dollars per share) | $ 2.74 |
Shares Exercisable | |
Number of shares | shares | 390 |
Weighted Average Exercise Price (in dollars per share) | $ 2.74 |
$ 4.56 - $ 4.56 | |
Information regarding options outstanding | |
Exercise Price, low end of range (in dollars per share) | 4.56 |
Exercise Price, high end of range (in dollars per share) | $ 4.56 |
Shares Outstanding | |
Number of shares | shares | 626 |
Weighted Average Remaining Contractual Term | 6 years 3 months 15 days |
Weighted Average Exercise Price (in dollars per share) | $ 4.56 |
Shares Exercisable | |
Number of shares | shares | 611 |
Weighted Average Exercise Price (in dollars per share) | $ 4.56 |
$ 4.74 - $ 5.44 | |
Information regarding options outstanding | |
Exercise Price, low end of range (in dollars per share) | 4.74 |
Exercise Price, high end of range (in dollars per share) | $ 5.44 |
Shares Outstanding | |
Number of shares | shares | 142 |
Weighted Average Remaining Contractual Term | 6 years 5 months 27 days |
Weighted Average Exercise Price (in dollars per share) | $ 4.79 |
Shares Exercisable | |
Number of shares | shares | 142 |
Weighted Average Exercise Price (in dollars per share) | $ 4.79 |
$ 7.42 - $ 7.42 | |
Information regarding options outstanding | |
Exercise Price, low end of range (in dollars per share) | 7.42 |
Exercise Price, high end of range (in dollars per share) | $ 7.42 |
Shares Outstanding | |
Number of shares | shares | 1,011 |
Weighted Average Remaining Contractual Term | 6 years 11 months 19 days |
Weighted Average Exercise Price (in dollars per share) | $ 7.42 |
Shares Exercisable | |
Number of shares | shares | 1,011 |
Weighted Average Exercise Price (in dollars per share) | $ 7.42 |
$ 9.24 - $ 31.67 | |
Information regarding options outstanding | |
Exercise Price, low end of range (in dollars per share) | 9.24 |
Exercise Price, high end of range (in dollars per share) | $ 31.67 |
Shares Outstanding | |
Number of shares | shares | 463 |
Weighted Average Remaining Contractual Term | 8 years 3 months |
Weighted Average Exercise Price (in dollars per share) | $ 23.05 |
Shares Exercisable | |
Number of shares | shares | 273 |
Weighted Average Exercise Price (in dollars per share) | $ 18.32 |
$ 32.65 - $ 32.99 | |
Information regarding options outstanding | |
Exercise Price, low end of range (in dollars per share) | 32.65 |
Exercise Price, high end of range (in dollars per share) | $ 32.99 |
Shares Outstanding | |
Number of shares | shares | 45 |
Weighted Average Remaining Contractual Term | 3 years 9 months 15 days |
Weighted Average Exercise Price (in dollars per share) | $ 32.83 |
Shares Exercisable | |
Number of shares | shares | 35 |
Weighted Average Exercise Price (in dollars per share) | $ 32.88 |
$ 40.50 - $ 40.50 | |
Information regarding options outstanding | |
Exercise Price, low end of range (in dollars per share) | 40.50 |
Exercise Price, high end of range (in dollars per share) | $ 40.50 |
Shares Outstanding | |
Number of shares | shares | 255 |
Weighted Average Remaining Contractual Term | 8 years 26 days |
Weighted Average Exercise Price (in dollars per share) | $ 40.50 |
Shares Exercisable | |
Number of shares | shares | 122 |
Weighted Average Exercise Price (in dollars per share) | $ 40.50 |
$ 41.40 - $ 41.40 | |
Information regarding options outstanding | |
Exercise Price, low end of range (in dollars per share) | 41.40 |
Exercise Price, high end of range (in dollars per share) | $ 41.40 |
Shares Outstanding | |
Number of shares | shares | 158 |
Weighted Average Remaining Contractual Term | 8 years 29 days |
Weighted Average Exercise Price (in dollars per share) | $ 41.40 |
Shares Exercisable | |
Number of shares | shares | 76 |
Weighted Average Exercise Price (in dollars per share) | $ 41.40 |
$ 41.91 - $ 41.91 | |
Information regarding options outstanding | |
Exercise Price, low end of range (in dollars per share) | 41.91 |
Exercise Price, high end of range (in dollars per share) | $ 41.91 |
Shares Outstanding | |
Number of shares | shares | 227 |
Weighted Average Remaining Contractual Term | 7 years 8 months 23 days |
Weighted Average Exercise Price (in dollars per share) | $ 41.91 |
Shares Exercisable | |
Number of shares | shares | 114 |
Weighted Average Exercise Price (in dollars per share) | $ 41.91 |
$ 0.12 - $ 41.91 | |
Information regarding options outstanding | |
Exercise Price, low end of range (in dollars per share) | 0.12 |
Exercise Price, high end of range (in dollars per share) | $ 41.91 |
Shares Outstanding | |
Number of shares | shares | 3,777 |
Weighted Average Remaining Contractual Term | 6 years 7 months 10 days |
Weighted Average Exercise Price (in dollars per share) | $ 13.55 |
Shares Exercisable | |
Number of shares | shares | 3,234 |
Weighted Average Exercise Price (in dollars per share) | $ 9.77 |
Stockholder's Equity and Stoc54
Stockholder's Equity and Stock Based Compensation (Details 4) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Assumptions used to estimate fair value of ESPP | |||
Assumptions used for estimation of fair value | |||
Expected term | 9 months | ||
Risk-free interest rate (as a percent) | 0.11% | ||
Expected volatility (as a percent) | 42.00% | ||
Expected dividend rate (as a percent) | 0.00% | ||
Assumptions used to estimate fair value of ESPP | Minimum | |||
Assumptions used for estimation of fair value | |||
Expected term | 6 months | 6 months | |
Risk-free interest rate (as a percent) | 0.05% | 0.05% | |
Expected volatility (as a percent) | 31.00% | 41.00% | |
Expected dividend rate (as a percent) | 0.00% | 0.00% | |
Assumptions used to estimate fair value of ESPP | Maximum | |||
Assumptions used for estimation of fair value | |||
Expected term | 9 months | ||
Risk-free interest rate (as a percent) | 0.24% | 0.11% | |
Expected volatility (as a percent) | 43.00% | 43.00% | |
Expected dividend rate (as a percent) | 0.00% | 0.00% | |
RSUs | |||
Assumptions used for estimation of fair value | |||
Vesting period | 4 years | 4 years | 4 years |
Number of RSUs | |||
Balance at the beginning of the period (in shares) | 2,360,000 | ||
RSUs Granted (in shares) | 2,017,000 | ||
RSUs Vested (in shares) | (633,000) | ||
RSUs Cancelled/Forfeited (in shares) | (707,000) | ||
Balance at the end of the period (in shares) | 3,037,000 | 2,360,000 | |
Weighted Average Grant Date Fair Value | |||
Balance at the beginning of the period (in dollars per share) | $ 33.30 | ||
RSUs Granted (in dollars per share) | 31.99 | $ 34.27 | $ 28.69 |
RSUs Vested (in dollars per share) | 33.18 | ||
RSUs Cancelled/Forfeited (in dollars per share) | 31.65 | ||
Balance at the end of the period (in dollars per share) | $ 32.84 | 33.30 | |
Shares Available for Grant | |||
RSUs Granted (in shares) | 2,017,000 | ||
RSUs Cancelled/Forfeited (in shares) | (707,000) | ||
RSUs Granted (in dollars per share) | $ 31.99 | $ 34.27 | $ 28.69 |
Total intrinsic value of vested RSUs | $ 18,172 | $ 7,117 | $ 2,479 |
Aggregate grant date fair value of vested RSUs | $ 21,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 31.99 | $ 34.27 | $ 28.69 |
RSUs | Minimum | |||
Assumptions used for estimation of fair value | |||
Vesting period | 3 years | ||
RSUs | Maximum | |||
Assumptions used for estimation of fair value | |||
Vesting period | 4 years | ||
Stock options to purchase common stock | |||
Assumptions used for estimation of fair value | |||
Expected term | 6 years | 6 years | 6 years |
Expected dividend rate (as a percent) | 0.00% | 0.00% | 0.00% |
Options granted (in shares) | 65,000 | ||
Additional information | |||
Closing stock price (in dollars per share) | $ 28.71 | ||
Shares Available for Grant | |||
Options Cancelled/Forfeited (in shares) | 400,000 | ||
Stock options to purchase common stock | Minimum | |||
Assumptions used for estimation of fair value | |||
Risk-free interest rate (as a percent) | 1.55% | 1.80% | 0.86% |
Expected volatility (as a percent) | 43.00% | 49.00% | 57.00% |
Stock options to purchase common stock | Maximum | |||
Assumptions used for estimation of fair value | |||
Risk-free interest rate (as a percent) | 1.87% | 1.97% | 1.78% |
Expected volatility (as a percent) | 45.00% | 56.00% | 58.00% |
Performance-based RSUs | Minimum | |||
Assumptions used for estimation of fair value | |||
Vesting period | 2 years | ||
Performance-based RSUs | Maximum | |||
Assumptions used for estimation of fair value | |||
Vesting period | 4 years | ||
Vessel | Performance-based RSUs | |||
Number of RSUs | |||
RSUs Granted (in shares) | 42,932 | ||
Shares Available for Grant | |||
RSUs Granted (in shares) | 42,932 | ||
RSUs to be granted subject to first product milestone as a percent of total RSUs granted | 40.00% | ||
RSUs to be granted subject to second product milestone as a percent of total RSUs granted | 60.00% | ||
Estimated value of unvested RSU's on date of grant | $ 1,400 |
Stockholders' Equity and Stock
Stockholders' Equity and Stock Based Compensation (Details 5) - MSU's - 2013 Equity Incentive Plan shares in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015tranche | Dec. 31, 2015$ / sharesshares | |
Additional information | ||
Number of separate tranches | tranche | 3 | |
Executive Officers | ||
Dec 31, 2013 Assumptions used for estimation of fair value for ESPP | ||
Expected term | 3 years | |
Risk-free interest rate (as a percent) | 0.99% | |
Expected volatility (as a percent) | 39.00% | |
Expected dividend rate (as a percent) | 0.00% | |
Number of shares underlying MSU's | ||
Granted to employees (in shares) | shares | 240 | |
Cancelled/Forfeited (in shares) | shares | (47) | |
Balance at the end of the period (in shares) | shares | 193 | |
Weighted Average Grant Date Fair Value | ||
Granted (in dollars per share) | $ 37.53 | |
Cancelled/Forfeited (in dollars per share) | 37.53 | |
Balance at the end of the period (in dollars per share) | 37.53 | |
Executive Officers | Tranche one | ||
Additional information | ||
Percent of shares in tranche that can be received | 100.00% | |
Grant date fair value per share | 9.10 | |
Executive Officers | Tranche two | ||
Additional information | ||
Grant date fair value per share | 8.68 | |
Executive Officers | Tranche three | ||
Additional information | ||
Percent of shares in tranche that can be received | 150.00% | |
Grant date fair value per share | $ 19.75 | |
Executive Officers | Minimum | ||
Additional information | ||
Vesting period for each tranche (in years) | one | |
Executive Officers | Maximum | ||
Additional information | ||
Vesting period for each tranche (in years) | three | |
Executive Officers | Maximum | Tranche two | ||
Additional information | ||
Percent of shares in tranche that can be received | 100.00% |
Stockholder's Equity and Stoc56
Stockholder's Equity and Stock Based Compensation (Details 6) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock compensation expense, allocation of recognized costs | |||
Total stock-based compensation expense | $ 39,182 | $ 25,120 | $ 8,075 |
Total unrecognized compensation cost related to unvested awards not yet recognized | |||
Unrecognized Expense | $ 77,305 | ||
Expected Recognition Period | 2 years 7 months 2 days | ||
Employee Stock Purchase Plan [Member] | |||
Stock compensation expense, allocation of recognized costs | |||
Total stock-based compensation expense | $ 1,700 | ||
Total unrecognized compensation cost related to unvested awards not yet recognized | |||
Unrecognized Expense | $ 209 | ||
Expected Recognition Period | 1 month 17 days | ||
RSUs | |||
Stock compensation expense, allocation of recognized costs | |||
Total stock-based compensation expense | $ 26,400 | ||
Vesting period | 4 years | 4 years | 4 years |
Total unrecognized compensation cost related to unvested awards not yet recognized | |||
Unrecognized Expense | $ 66,546 | ||
Expected Recognition Period | 2 years 9 months 15 days | ||
RSUs | Minimum | |||
Stock compensation expense, allocation of recognized costs | |||
Vesting period | 3 years | ||
RSUs | Maximum | |||
Stock compensation expense, allocation of recognized costs | |||
Vesting period | 4 years | ||
Stock options to purchase common stock | |||
Stock compensation expense, allocation of recognized costs | |||
Total stock-based compensation expense | $ 8,400 | ||
Total unrecognized compensation cost related to unvested awards not yet recognized | |||
Unrecognized Expense | $ 10,550 | ||
Expected Recognition Period | 1 year 4 months 10 days | ||
Stock options to purchase common stock | 2006 Stock Plan | |||
Stock compensation expense, allocation of recognized costs | |||
Vesting period | 4 years | ||
Percentage of awards which will vest after one year | 25.00% | ||
Period of beginning of vesting of awards from grant date | 1 year | ||
MSU's | |||
Stock compensation expense, allocation of recognized costs | |||
Total stock-based compensation expense | $ 3,600 | ||
Cost of subscription and support revenue | |||
Stock compensation expense, allocation of recognized costs | |||
Total stock-based compensation expense | 2,691 | $ 1,626 | $ 496 |
Cost of professional services and other revenue | |||
Stock compensation expense, allocation of recognized costs | |||
Total stock-based compensation expense | 4,320 | 2,363 | 690 |
Research and development | |||
Stock compensation expense, allocation of recognized costs | |||
Total stock-based compensation expense | 7,637 | 5,353 | 2,084 |
Sales and marketing | |||
Stock compensation expense, allocation of recognized costs | |||
Total stock-based compensation expense | 12,655 | 8,860 | 2,293 |
General and administrative | |||
Stock compensation expense, allocation of recognized costs | |||
Total stock-based compensation expense | 11,879 | $ 6,918 | $ 2,512 |
Internal use software projects | |||
Stock compensation expense, allocation of recognized costs | |||
Capitalized stock-based compensation expense | 900 | ||
Vessel | RSUs | |||
Stock compensation expense, allocation of recognized costs | |||
Stock-based compensation from performance based restricted stock units | $ 1,300 |
Net Loss per Share (Detail)
Net Loss per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator: | |||||||||||
Net loss attributable to Marketo | $ (17,151) | $ (18,238) | $ (17,950) | $ (18,158) | $ (15,913) | $ (12,803) | $ (13,112) | $ (12,509) | $ (71,497) | $ (54,337) | $ (47,360) |
Denominator: | |||||||||||
Weighted-average common shares outstanding | 42,616 | 40,602 | 24,881 | ||||||||
Less: Weighted-average unvested common shares subject to repurchase or forfeiture and shares held in escrow | (112) | (217) | (172) | ||||||||
Weighted-average shares used in computing net loss per share of common stock, basic and diluted | 42,504 | 40,385 | 24,709 | ||||||||
Net loss per share of common stock, basic and diluted (in dollars per share) | $ (0.40) | $ (0.43) | $ (0.43) | $ (0.44) | $ (0.39) | $ (0.31) | $ (0.33) | $ (0.32) | $ (1.68) | $ (1.35) | $ (1.92) |
Potentially dilutive securities that were excluded from the diluted per share | |||||||||||
Potentially dilutive securities excluded from the diluted per share calculation | 7,168 | 8,098 | 7,493 | ||||||||
Stock options to purchase common stock | |||||||||||
Potentially dilutive securities that were excluded from the diluted per share | |||||||||||
Potentially dilutive securities excluded from the diluted per share calculation | 3,777 | 5,404 | 6,343 | ||||||||
Common stock held in escrow | |||||||||||
Potentially dilutive securities that were excluded from the diluted per share | |||||||||||
Potentially dilutive securities excluded from the diluted per share calculation | 22 | 159 | 137 | ||||||||
Common stock subject to repurchase | |||||||||||
Potentially dilutive securities that were excluded from the diluted per share | |||||||||||
Potentially dilutive securities excluded from the diluted per share calculation | 12 | 50 | 127 | ||||||||
Employee Stock Purchase Plan | |||||||||||
Potentially dilutive securities that were excluded from the diluted per share | |||||||||||
Potentially dilutive securities excluded from the diluted per share calculation | 127 | 125 | 304 | ||||||||
RSUs | |||||||||||
Potentially dilutive securities that were excluded from the diluted per share | |||||||||||
Potentially dilutive securities excluded from the diluted per share calculation | 3,230 | 2,360 | 582 |
Income Taxes (Detail)
Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Loss before provision for income taxes: | |||
Domestic | $ (57,513) | $ (46,908) | $ (37,481) |
Foreign | (10,858) | (8,524) | (9,851) |
Loss before provision (benefit) for income taxes | (68,371) | (55,432) | (47,332) |
Current tax provision: | |||
Federal | 1 | 1 | |
State | 24 | 15 | 10 |
Foreign | 353 | 164 | 83 |
Total current tax provision | 378 | 180 | 93 |
Deferred Income Tax Expense (Benefit) | |||
Federal | (286) | ||
State | (45) | ||
Foreign | 330 | (326) | (65) |
Total deferred tax expense (benefit) | 330 | (657) | (65) |
Total provision (benefit) for income taxes | $ 708 | $ (477) | $ 28 |
Items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes | |||
Federal statutory rate (as a percent) | 34.00% | 34.00% | 34.00% |
Stock-based compensation (as a percent) | (1.15%) | (0.74%) | (1.59%) |
Valuation allowance (as a percent) | (36.51%) | (34.38%) | (28.31%) |
Foreign rate differential (as a percent) | (3.11%) | (2.52%) | (5.00%) |
Federal research and development credit (as a percent) | 3.28% | 2.48% | 1.19% |
Other (as a percent) | 2.42% | 2.03% | (0.35%) |
Effective income tax rate (as a percent) | (1.06%) | 0.87% | (0.06%) |
Deferred tax assets: | |||
Accounts receivable principally due to allowance for doubtful accounts | $ 166 | $ 130 | $ 92 |
Compensated absences, principally due to accruals for financial reporting purposes | 2,880 | 1,867 | 2,993 |
Net operating loss carryforwards | 69,369 | 54,949 | 42,704 |
Federal tax credits | 3,657 | 2,437 | 1,766 |
State tax credits net of federal benefit | 2,010 | 1,521 | 1,166 |
Other deductible temporary differences | 2,234 | 1,311 | 964 |
Stock-based compensation | 12,106 | 7,289 | 1,508 |
Foreign Credit | 22 | 24 | 25 |
Total deferred tax assets | 92,444 | 69,528 | 51,218 |
Deferred tax liabilities: | |||
Capitalized software development | (566) | (278) | (149) |
Acquired intangible assets | (1,208) | (1,983) | (1,979) |
Total deferred tax liability | (1,774) | (2,261) | (2,128) |
Valuation allowance | (90,892) | (67,159) | (49,388) |
Net deferred taxes | (222) | 108 | (298) |
Deferred Tax Assets, Net of Valuation Allowance | (222) | 108 | $ (298) |
Increase in net valuation allowance | $ 23,700 | $ 17,800 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net operating loss carryforwards | |||
Net operating loss carryforwards | $ 476,031 | $ 375,540 | $ 251,076 |
Federal | |||
Net operating loss carryforwards | |||
Net operating loss carryforwards | 258,566 | 204,361 | 130,797 |
Excess stock based compensation that will result in increases to additional paid in capital, when realized | 91,100 | ||
State | |||
Net operating loss carryforwards | |||
Net operating loss carryforwards | 186,450 | 146,399 | 102,606 |
Excess stock based compensation that will result in increases to additional paid in capital, when realized | 51,900 | ||
Foreign | |||
Net operating loss carryforwards | |||
Net operating loss carryforwards | $ 31,015 | $ 24,780 | $ 17,673 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Credit carryforwards | |||
Credit carryforwards | $ 6,724,000 | $ 4,766,000 | $ 3,558,000 |
Reduction of net operating losses as a result of previous ownership changes | 1,100,000 | ||
Reduction of research and development credits as a result of previous ownership changes | 8,000 | ||
Uncertain Tax Positions | |||
Unrecognized benefit - beginning of period | 991,000 | 472,000 | |
Gross increases (decreases) - prior period tax positions | 75,000 | 34,000 | |
Gross increases (decreases) - current period tax positions | 765,000 | 485,000 | 472,000 |
Unrecognized benefit - end of period | 1,831,000 | 991,000 | 472,000 |
Unrecognized tax benefits would affect the Company's effective tax rate, if recognized | 0 | ||
Interest or penalties accrued related to unrecognized tax benefits | 0 | 0 | 0 |
Federal | Research and development. | |||
Credit carryforwards | |||
Credit carryforwards | 3,657,000 | 2,437,000 | 1,766,000 |
State | Research and development. | |||
Credit carryforwards | |||
Credit carryforwards | 3,045,000 | 2,305,000 | 1,767,000 |
Foreign | Research and development. | |||
Credit carryforwards | |||
Credit carryforwards | $ 22,000 | $ 24,000 | $ 25,000 |
Employee 401(k) Plan (Details)
Employee 401(k) Plan (Details) - US Plans Member $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
401 (k) plan, maximum annual contribution per employee (percent) | 90.00% |
401(k) plan, employer matching contribution, percent of match | 25.00% |
401(k) plan, employer matching contribution, percent of employees' gross pay | 6.00% |
401(k) plan, company's matching contributions | $ 1.1 |
Segment Information and Infor62
Segment Information and Information about Geographic Areas (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Information and Information about Geographic Areas | |||||||||||
Number of business segment | item | 1 | ||||||||||
Revenue and long-lived assets by geographic area | |||||||||||
Revenue | $ 58,267 | $ 54,922 | $ 50,680 | $ 46,000 | $ 42,345 | $ 39,287 | $ 36,030 | $ 32,292 | $ 209,869 | $ 149,954 | $ 95,918 |
Long-lived assets | 21,323 | 16,832 | 21,323 | 16,832 | |||||||
United States | |||||||||||
Revenue and long-lived assets by geographic area | |||||||||||
Revenue | 177,730 | 125,737 | 82,019 | ||||||||
Long-lived assets | 19,508 | 16,265 | 19,508 | 16,265 | |||||||
EMEA | |||||||||||
Revenue and long-lived assets by geographic area | |||||||||||
Revenue | 14,438 | 12,772 | 6,989 | ||||||||
Long-lived assets | 327 | 209 | 327 | 209 | |||||||
Other | |||||||||||
Revenue and long-lived assets by geographic area | |||||||||||
Revenue | 17,701 | 11,445 | $ 6,910 | ||||||||
Long-lived assets | $ 1,488 | $ 358 | $ 1,488 | $ 358 |
Subsequent Events (Deatils)
Subsequent Events (Deatils) - Subsequent Event $ in Thousands | Jan. 01, 2016USD ($) |
Incremental Minimum Lease Payments | |
2,016 | $ 195 |
2,017 | 1,418 |
2,018 | 3,985 |
2,019 | 8,154 |
2,020 | 8,400 |
Thereafter | 14,535 |
Total | 36,687 |
San Mateo lease amendment | Standby letter of credit | |
Subsequent events | |
Standby letter of credit for amended lease agreement | $ 700 |
SUPPLEMENTARY QUARTERLY FINAN64
SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
SUPPLEMENTARY QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||
Total revenue | $ 58,267 | $ 54,922 | $ 50,680 | $ 46,000 | $ 42,345 | $ 39,287 | $ 36,030 | $ 32,292 | $ 209,869 | $ 149,954 | $ 95,918 |
Total gross profit | 39,170 | 36,261 | 32,733 | 29,589 | 28,261 | 26,062 | 23,614 | 21,216 | 137,753 | 99,153 | 57,939 |
Net loss | (16,039) | (16,975) | (17,453) | (18,612) | (16,155) | (13,009) | (13,271) | (12,520) | (69,079) | (54,955) | (47,360) |
Net loss and adjustment attributable to redeemable non-controlling interests (Note 3) | (1,112) | (1,263) | (497) | 454 | 242 | 206 | 159 | 11 | (2,418) | 618 | |
Net loss attributable to Marketo | $ (17,151) | $ (18,238) | $ (17,950) | $ (18,158) | $ (15,913) | $ (12,803) | $ (13,112) | $ (12,509) | $ (71,497) | $ (54,337) | $ (47,360) |
Net loss per share of common stock, basic and diluted (in dollars per share) | $ (0.40) | $ (0.43) | $ (0.43) | $ (0.44) | $ (0.39) | $ (0.31) | $ (0.33) | $ (0.32) | $ (1.68) | $ (1.35) | $ (1.92) |