Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 4-May-15 | |
Document and Entity Information | ||
Entity Registrant Name | Marketo, Inc. | |
Entity Central Index Key | 1490660 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 42,239,686 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $103,768 | $112,644 |
Accounts receivable, net of allowances | 40,189 | 37,867 |
Prepaid expenses and other current assets | 10,039 | 5,756 |
Total current assets | 153,996 | 156,267 |
Property and equipment, net | 17,672 | 16,832 |
Goodwill | 29,201 | 29,201 |
Intangible assets, net | 7,373 | 7,076 |
Other assets | 1,887 | 1,035 |
Total assets | 210,129 | 210,411 |
Current liabilities: | ||
Accounts payable | 3,800 | 3,901 |
Accrued expenses and other current liabilities | 20,117 | 20,691 |
Deferred revenue | 66,884 | 62,945 |
Current portion of credit facility | 2,746 | 2,719 |
Total current liabilities | 93,547 | 90,256 |
Credit facility, net of current portion | 1,955 | 2,653 |
Other liabilities | 3,809 | 3,526 |
Total liabilities | 99,311 | 96,435 |
Commitments and contingencies (Note 8) | ||
Redeemable non-controlling interests (Note 6) | 1,794 | 800 |
Stockholders' equity: | ||
Common stock | 4 | 4 |
Additional paid-in capital | 311,340 | 297,420 |
Accumulated other comprehensive loss | -264 | -350 |
Accumulated deficit | -202,056 | -183,898 |
Total stockholders' equity | 109,024 | 113,176 |
Total liabilities, redeemable non-controlling interests and stockholders' equity | $210,129 | $210,411 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
Share data in Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue: | ||
Subscription and support | $40,100,000 | $28,611,000 |
Professional services and other | 5,900,000 | 3,681,000 |
Total revenue | 46,000,000 | 32,292,000 |
Cost of revenue: | ||
Subscription and support | 9,074,000 | 6,235,000 |
Professional services and other | 7,337,000 | 4,841,000 |
Total cost of revenue | 16,411,000 | 11,076,000 |
Gross profit: | ||
Subscription and support | 31,026,000 | 22,376,000 |
Professional services and other | -1,437,000 | -1,160,000 |
Total gross profit | 29,589,000 | 21,216,000 |
Operating expenses: | ||
Research and development | 9,695,000 | 7,131,000 |
Sales and marketing | 30,032,000 | 20,368,000 |
General and administrative | 8,782,000 | 6,192,000 |
Total operating expenses | 48,509,000 | 33,691,000 |
Loss from operations | -18,920,000 | -12,475,000 |
Other income (expense), net | 520,000 | -59,000 |
Loss before provision (benefit) for income taxes | -18,400,000 | -12,534,000 |
Provision (benefit) for income taxes | 212,000 | -14,000 |
Net loss | -18,612,000 | -12,520,000 |
Net loss attributable to redeemable non-controlling interests | 454,000 | 11,000 |
Net loss attributable to Marketo | ($18,158,000) | ($12,509,000) |
Net loss per share of common stock, basic and diluted (in dollars per share) | ($0.44) | ($0.32) |
Shares used in computing net loss per share of common stock, basic and diluted (in shares) | 41,613 | 39,379 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Condensed Consolidated Statements of Comprehensive Loss | ||
Net loss | ($18,612) | ($12,520) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 89 | -50 |
Total comprehensive loss | -18,523 | -12,570 |
Net loss attributable to redeemable non-controlling interests | 454 | 11 |
Other comprehensive (income) loss attributable to redeemable non-controlling interests | -3 | 2 |
Comprehensive loss attributable to Marketo | ($18,072) | ($12,557) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net loss attributable to Marketo | ($18,158) | ($12,509) |
Net loss attributable to redeemable noncontrolling interests | -454 | -11 |
Net loss | -18,612 | -12,520 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,879 | 2,131 |
Stock-based compensation expense | 9,281 | 5,007 |
Deferred income taxes | 187 | -74 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | -2,779 | 1,709 |
Prepaid expenses and other current assets | -4,170 | -3,724 |
Other assets | -644 | -393 |
Accounts payable | 1,028 | 44 |
Accrued expenses and other current liabilities | -515 | -9,628 |
Deferred revenue | 4,694 | 4,251 |
Other liabilities | 116 | -14 |
Net cash used in operating activities | -8,535 | -13,211 |
Cash flows from investing activities: | ||
Increase in Restricted Cash | -215 | |
Purchase of property and equipment | -4,092 | -2,579 |
Capitalized software development | -521 | -179 |
Net cash used in investing activities | -4,828 | -2,758 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock upon exercise of stock options | 965 | 2,518 |
Proceeds from the issuance of common stock issued under the employee stock purchase plan | 2,885 | 3,384 |
Investment from redeemable non-controlling interests | 1,678 | 1,953 |
Repurchase of unvested common stock from terminated employees | -23 | |
Withholding taxes remitted for the net share settlement of an equity awards | -3 | -15 |
Repayment of debt | -670 | -293 |
Payment of deferred initial public offering and follow-on offering costs | -104 | |
Payment incurred for common stock registration related to acquisition | -155 | |
Net cash provided by financing activities | 4,855 | 7,265 |
Effect of foreign exchange rate changes on cash and cash equivalents | -368 | -23 |
Net increase (decrease) in cash and cash equivalents | -8,876 | -8,727 |
Cash and cash equivalents - beginning of period | 112,644 | 112,644 |
Cash and cash equivalents -end of period | 103,768 | 119,572 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 52 | 75 |
Cash paid for income taxes | 29 | 29 |
Supplemental disclosure of noncash investing and financing activities: | ||
Vesting of early exercise options | 42 | 115 |
Property and equipment acquired through tenant improvement allowance | $65 |
The_Company_and_Summary_of_Sig
The Company and Summary of Significant Accounting Policies and Estimates | 3 Months Ended |
Mar. 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 the United Kingdom. | |
Marketo is a provider of the leading 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. | |
Basis of Presentation | |
The unaudited condensed consolidated financial statements and accompanying notes of the Company reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for a fair presentation of the interim periods presented. The unaudited condensed consolidated financial statements include the accounts of Marketo and its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |
The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the entire year ending December 31, 2015. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (SEC). These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related notes presented in the Company’s Annual Report on Form 10-K filed with the SEC on March 12, 2015. There have been no changes in the Company’s significant accounting policies from those that were disclosed in the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2014. | |
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 our 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. | |
Recent Accounting Pronouncements | |
In April 2015, the Financial Accounting Standard Board (FASB) issued new accounting guidance, Simplifying the Presentation of Debt Issuance Costs. The guidance 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 debt issuance costs guidance 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 the debt guidance is not expected to have a material impact on the Company’s condensed consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update (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. Unless amended or delayed by the FASB, the new standard would be effective for the Company on January 1, 2017. Early application would be permitted. 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 ongoing financial reporting. | |
Joint_Venture
Joint Venture | 3 Months Ended |
Mar. 31, 2015 | |
Joint Venture | |
Joint Venture | |
2. 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 March 31, 2015, the Company and the Investors owned approximately 60.1% and 39.9% of the outstanding common stock in Marketo KK, respectively. See Note 6 for the activity in the redeemable non-controlling interests balance. | |
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 revenues 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 condensed consolidated balance sheet as of March 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. 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. The estimated redemption value of the call/put option embedded in the redeemable non-controlling interests was approximately $1.1 million at March 31, 2015. | |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||||||
3. 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. | |||||||||||||||||||
As of March 31, 2015 and December 31, 2014, financial assets measured at fair value on a recurring basis were comprised of money market funds and certificates of deposit included within cash and cash equivalents. | ||||||||||||||||||||
The fair value of these financial assets was determined using the following inputs for the periods presented: | ||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Money market funds | $ | 94,037 | $ | — | $ | — | $ | 104,021 | $ | — | $ | — | ||||||||
Certificates of deposit | — | 25 | — | — | 25 | — | ||||||||||||||
Total | $ | 94,037 | $ | 25 | $ | — | $ | 104,021 | $ | 25 | $ | — | ||||||||
Balance_Sheet_Components
Balance Sheet Components | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Balance Sheet Components | ||||||||
Balance Sheet Components | ||||||||
4. Balance Sheet Components | ||||||||
Cash and Cash Equivalents | ||||||||
Cash and cash equivalents consist of the following: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Cash | $ | 9,706 | $ | 8,598 | ||||
Cash equivalents: | ||||||||
Money market funds | 94,037 | 104,021 | ||||||
Certificates of deposit | 25 | 25 | ||||||
94,062 | 104,046 | |||||||
Cash and cash equivalents | $ | 103,768 | $ | 112,644 | ||||
Accounts Receivable | ||||||||
Accounts receivable consist of the following: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Accounts receivable | $ | 40,670 | $ | 38,260 | ||||
Allowance for doubtful accounts | (481 | ) | (393 | ) | ||||
Accounts receivable, net | $ | 40,189 | $ | 37,867 | ||||
Property and Equipment, Net | ||||||||
Property and equipment, net consists of the following: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Computer equipment | $ | 20,201 | $ | 18,384 | ||||
Software | 2,526 | 2,417 | ||||||
Office furniture | 2,313 | 2,071 | ||||||
Leasehold improvements | 5,326 | 5,123 | ||||||
Construction in progress | 2,329 | 1,745 | ||||||
Total property and equipment | 32,695 | 29,740 | ||||||
Less accumulated depreciation | (15,023 | ) | (12,908 | ) | ||||
Property and equipment, net | $ | 17,672 | $ | 16,832 | ||||
Accrued Expenses and Other Current Liabilities | ||||||||
Accrued expenses and other current liabilities are as follows: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Accrued bonuses, commissions and wages | $ | 8,403 | $ | 10,553 | ||||
Accrued ESPP | 1,045 | 2,324 | ||||||
Accrued vacation | 3,537 | 2,972 | ||||||
Accrued marketing expenses | 1,179 | 1,313 | ||||||
Accrued other | 5,953 | 3,529 | ||||||
Total | $ | 20,117 | $ | 20,691 | ||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||||||||
5. Goodwill and Intangible Assets | ||||||||||||||||||||
Goodwill and intangible assets consisted of the following as of March 31, 2015 and December 31, 2014: | ||||||||||||||||||||
March 31, | Weighted | December 31, | Weighted | |||||||||||||||||
2015 | Average | 2014 | Average | |||||||||||||||||
Remaining | Remaining | |||||||||||||||||||
Useful Life | Useful Life | |||||||||||||||||||
(in thousands) | (in years) | (in thousands) | (in years) | |||||||||||||||||
Developed technology | $ | 6,050 | 2.7 | $ | 6,050 | 2.9 | ||||||||||||||
Domain names | 950 | 3.4 | 950 | 3.6 | ||||||||||||||||
Customer relationships | 1,600 | 1.4 | 1,600 | 1.6 | ||||||||||||||||
Non-compete agreements | 580 | 2.7 | 580 | 3 | ||||||||||||||||
Capitalized software development costs | 3,075 | 1.6 | 2,042 | 1.2 | ||||||||||||||||
12,255 | 11,222 | |||||||||||||||||||
Less accumulated amortization | (4,882 | ) | (4,146 | ) | ||||||||||||||||
Intangible assets, net | 7,373 | 7,076 | ||||||||||||||||||
Goodwill | 29,201 | 29,201 | ||||||||||||||||||
Goodwill and intangible assets, net | $ | 36,574 | $ | 36,277 | ||||||||||||||||
Amortization expense for the periods indicated below was as follows (in thousands): | ||||||||||||||||||||
Three Months | ||||||||||||||||||||
Ended March 31, | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||
Amortization expense | $ | 736 | $ | 517 | ||||||||||||||||
Based on the carrying amount of intangible assets as of March 31, 2015, the estimated future amortization is as follows (in thousands): | ||||||||||||||||||||
Nine Months | Years Ending December 31, | |||||||||||||||||||
Ending | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Total | |||||||||||||||
Developed Technology | $ | 1,131 | $ | 1,508 | $ | 1,406 | $ | — | $ | — | $ | 4,045 | ||||||||
Domain Names | 137 | 180 | 100 | 100 | 29 | 546 | ||||||||||||||
Customer Relationships | 410 | 315 | — | — | — | 725 | ||||||||||||||
Non-Compete Agreements | 113 | 150 | 144 | — | — | 407 | ||||||||||||||
Capitalized Software Development Costs | 879 | 649 | 122 | — | — | 1,650 | ||||||||||||||
Total | $ | 2,670 | $ | 2,802 | $ | 1,772 | $ | 100 | $ | 29 | $ | 7,373 | ||||||||
Stockholders_Equity_and_Redeem
Stockholders Equity and Redeemable Noncontrolling Interests | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Stockholders' Equity and Redeemable Non-controlling Interests | ||||||||
Stockholders' Equity and Redeemable Non-controlling Interests | ||||||||
6. Stockholders’ Equity and Redeemable Non-controlling Interests | ||||||||
The following table summarizes the activity in stockholders’ equity and redeemable non-controlling interests for the period indicated below (in thousands): | ||||||||
Total | Redeemable | |||||||
Stockholders’ | Non-controlling | |||||||
Equity | Interests | |||||||
Balance as of December 31, 2014 | $ | 113,176 | $ | 800 | ||||
Issuance of common stock upon exercise and early exercise of stock options | 965 | — | ||||||
Issuance of common stock under employee stock purchase plan | 2,885 | — | ||||||
Investment by redeemable non-controlling interests | 233 | 1,445 | ||||||
Vesting of early exercised options | 42 | — | ||||||
Stock-based compensation expense | 9,795 | — | ||||||
Net loss | (18,158 | ) | (454 | ) | ||||
Foreign currency translation adjustments | 86 | 3 | ||||||
Balance as of March 31, 2015 | $ | 109,024 | $ | 1,794 | ||||
The Company capitalized stock-based compensation expense of $0.5 million associated with the Company’s internal-use software projects. | ||||||||
Credit_Facility
Credit Facility | 3 Months Ended |
Mar. 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 $4.5 million. The interest rate associated with both lines of credit is the greater of 4% or three-quarters 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 will 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 contains customary events of default and provides 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 March 31, 2015, the Company was in compliance with these covenants. As of March 31, 2015 and December 31, 2014, the outstanding loan balance was $4.7 million and $5.4 million, respectively. | |
There were no material changes in the Company’s commitments under the outstanding loan balance, as disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2014. | |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Commitments and Contingencies. | |||||
Commitments and Contingencies | |||||
8. Commitments and Contingencies | |||||
Except as set forth below, there were no material changes in the Company’s commitments under contractual obligations, as disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2014. | |||||
In February 2015, the Company entered into a definitive lease agreement whereby the Company will lease approximately 6,448 square feet of office space in Sydney, Australia. The Company’s future minimum lease payments under this agreement are approximately $1.0 million, payable over the thirty-six month term of the lease. | |||||
In March 2015, the Company entered into a definitive lease agreement whereby the Company will lease approximately 4,147 square feet of office space in Tokyo, Japan. The Company’s future minimum lease payments under this agreement are approximately $1.4 million, payable over the forty-two month term of the lease. | |||||
As of March 31, 2015, future minimum operating lease payments are as follows (in thousands): | |||||
2015 (9 months) | $ | 4,390 | |||
2016 | 6,359 | ||||
2017 | 6,529 | ||||
2018 | 4,533 | ||||
2019 | 470 | ||||
Total | $ | 22,281 | |||
Additionally, in January 2015, the Company entered into a renewal agreement with a customer relationship management vendor. The Company’s contractual obligation under this agreement is approximately $4.0 million, payable over the thirty-six month term of the agreement. | |||||
In January 2015, the Company also entered into a renewal agreement with a data center vendor. The Company’s contractual obligation under this agreement is approximately $1.4 million, payable over the thirty-six month term of the agreement. | |||||
Stockholders_Equity_and_Stock_
Stockholder's Equity and Stock Based Compensation | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Stockholder's Equity and Stock Based Compensation | ||||||||||||
Stockholder's Equity and Stock Based Compensation | ||||||||||||
9. Stockholder’s Equity and Stock Based Compensation | ||||||||||||
Common Stock Authorized and Outstanding | ||||||||||||
As of March 31, 2015, the Company was authorized to issue 1,000,000,000 common shares with a par value of $0.0001 per share and 20,000,000 convertible preferred shares with a par value of $0.0001 per share. As of March 31, 2015, the Company had approximately 42.1 million shares of common stock issued and outstanding. | ||||||||||||
Summary of Stock Option Activity | ||||||||||||
A summary of the Company’s stock option activity under all stock option plans and related information for three months ended March 31, 2015 is as follows: | ||||||||||||
Number of | Weighted- | Weighted- | Aggregate | |||||||||
Stock | Average | Average | Intrinsic | |||||||||
Options | Exercise | Remaining | Value | |||||||||
Outstanding | Price | Contractual | ||||||||||
Life | ||||||||||||
(in thousands) | (Years) | (in thousands) | ||||||||||
Balance as of December 31, 2014 | 5,404 | $ | 11.55 | 7.56 | $ | 120,595 | ||||||
Granted | — | — | ||||||||||
Exercised | (278 | ) | 3.47 | |||||||||
Repurchased | — | — | ||||||||||
Cancelled/forfeited | (157 | ) | 12.79 | |||||||||
Balance as of March 31, 2015 | 4,969 | 11.96 | 7.18 | 80,350 | ||||||||
Exercisable as of March 31, 2015 | 4,163 | 7.27 | 7.01 | 79,948 | ||||||||
Vested and expected to vest as of March 31, 2015 | 4,682 | $ | 11.5 | 7.13 | $ | 77,198 | ||||||
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the Company’s closing price of $25.62 as of March 31, 2015 for options that were in-the-money as of that date. | ||||||||||||
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 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 March 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 were as follows (in thousands, except weighted average grant date fair value): | ||||||||||||
Three Months | ||||||||||||
Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Weighted average grant date fair value of options granted | N/A | $ | 21.78 | |||||||||
Total intrinsic value of options exercised | $ | 7,583 | $ | 28,623 | ||||||||
The total estimated grant date fair value of options vested during the three months ended March 31, 2015 was approximately $5.7 million. | ||||||||||||
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: | ||||||||||||
Three Months | ||||||||||||
Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Expected term (in years) | N/A | 6 | ||||||||||
Risk-free interest rate | N/A | 1.84% | ||||||||||
Expected volatility | N/A | 56% | ||||||||||
Expected dividend rate | N/A | 0% | ||||||||||
Restricted Stock Units | ||||||||||||
A summary of the Company’s Restricted Stock Units (RSUs) activity and related information for the three months ended March 31, 2015 are as follows: | ||||||||||||
Number of | Weighted Average | Aggregate | ||||||||||
RSUs | Grant Date | Intrinsic | ||||||||||
Fair Value | Value | |||||||||||
(in thousands) | (in thousands) | |||||||||||
Balance as of December 31, 2014 | 2,360 | $ | 33.3 | $ | 77,207 | |||||||
RSUs Granted | 1,082 | 34.5 | ||||||||||
RSUs Vested | (215 | ) | 41.36 | |||||||||
RSUs Cancelled/Forfeited | (108 | ) | 32.7 | |||||||||
Balance as of March 31, 2015 | 3,119 | $ | 33.18 | $ | 79,922 | |||||||
RSUs granted during the three months ended March 31, 2015 are subject to a time-based vesting condition that ranges from 3 to 4 years. | ||||||||||||
The aggregate intrinsic value of RSUs outstanding at March 31, 2015 was determined using the Company’s closing stock price of $25.62 per share as of March 31, 2015. | ||||||||||||
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 (in thousands, except weighted average grant date fair value): | ||||||||||||
Three Months | ||||||||||||
Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Weighted average grant date fair value of RSUs granted | $ | 34.50 | $ | 41.57 | ||||||||
Total intrinsic value of vested RSUs | $ | 6,029 | $ | 195 | ||||||||
Market Stock Units | ||||||||||||
In February 2015, the Compensation Committee of the Company’s Board of Directors granted market-performance based restricted stock units (MSUs) to its executive officers. MSU awards are 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 which will be eligible to vest in each tranche will be 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. | ||||||||||||
The following table summarizes the MSU activity as of March 31, 2015: | ||||||||||||
Number of Shares | Weighted Average | Weighted Average | Aggregate | |||||||||
Underlying MSUs | Grant Date | Remaining Vesting | Intrinsic | |||||||||
Fair Value | Period | Value | ||||||||||
(in thousands) | (in years) | (in thousands) | ||||||||||
Balance as of December 31, 2014 | — | $ | — | — | $ | — | ||||||
MSUs Granted | 240 | 37.53 | ||||||||||
MSUs Vested | — | — | ||||||||||
MSUs Cancelled/Forfeited | — | — | ||||||||||
Balance as of March 31, 2015 | 240 | $ | 37.53 | 1.88 | $ | 6,144 | ||||||
The aggregate intrinsic value of MSUs outstanding was determined using the Company’s closing stock price of $25.62 as of March 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 the first quarter of fiscal 2015 was estimated using the following weighted-average assumptions: | ||||||||||||
Three Months | ||||||||||||
Ended March 31, 2015 | ||||||||||||
Expected term (in years) | 3 | |||||||||||
Risk-free interest rate | 0.99% | |||||||||||
Expected volatility | 39% | |||||||||||
Expected dividend rate | 0% | |||||||||||
Employee Stock Purchase Plan | ||||||||||||
The assumptions used to value employee stock purchase rights under the Black-Scholes model during the three months ended March 31, 2015 and 2014 were as follows: | ||||||||||||
Three Months | ||||||||||||
Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Expected term (in months) | 6 | 9-Jun | ||||||||||
Risk-free interest rate | 0.05 - 0.07% | 0.08% - 0.11% | ||||||||||
Expected volatility | 39% - 43% | 41% - 42% | ||||||||||
Expected dividend rate | 0% | 0% | ||||||||||
During the first three months of fiscal 2015, the Company issued approximately 0.1 million shares of common stock under the ESPP with an average purchase price of $23.87 per share. | ||||||||||||
Stock Compensation Expense | ||||||||||||
The stock-based compensation expense included in operating results was allocated as follows (in thousands): | ||||||||||||
Three Months | ||||||||||||
Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Cost of subscription and support revenue | $ | 619 | $ | 384 | ||||||||
Cost of professional services and other revenue | 937 | 447 | ||||||||||
Research and development | 2,316 | 1,079 | ||||||||||
Sales and marketing | 2,802 | 1,779 | ||||||||||
General and administrative | 2,607 | 1,318 | ||||||||||
Total stock-based compensation expense | $ | 9,281 | $ | 5,007 | ||||||||
For the quarter ended March 31, 2015, the Company incurred expenses of $2.3 million for options, $6.5 million for RSUs, $0.6 million for MSUs and $0.4 million for ESPP. Additionally, the Company capitalized stock-based compensation expense of $0.5 million associated with the Company’s internal-use software projects. Amounts for the first quarter of 2015 include stock compensation expense of $0.7 million related to performance-based RSUs that are tied to product milestones issued in connection with an acquisition that occurred in December 2014. | ||||||||||||
As of March 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: | ||||||||||||
March 31, 2015 | ||||||||||||
Unrecognized | Average Expected | |||||||||||
Expense | Recognition Period | |||||||||||
(in thousands) | (in years) | |||||||||||
Stock options | $ | 16,493 | 1.94 | |||||||||
Restricted stock units and market stock units | 79,485 | 3.12 | ||||||||||
Employee stock purchase plan | 585 | 0.38 | ||||||||||
Total unrecognized stock-based compensation expense | $ | 96,563 | 2.90 | |||||||||
Net_Loss_per_Share
Net Loss per Share | 3 Months Ended | |||||||
Mar. 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: | ||||||||
Three Months | ||||||||
Ended March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands, except per share amount) | ||||||||
Numerator: | ||||||||
Net loss attributable to Marketo | $ | (18,158 | ) | $ | (12,509 | ) | ||
Denominator: | ||||||||
Weighted-average common shares outstanding | 41,815 | 39,628 | ||||||
Less: Weighted-average unvested common shares subject to repurchase or forfeiture and shares held in escrow | (202 | ) | (249 | ) | ||||
Weighted-average shares used in computing net loss per share of common stock, basic and diluted | 41,613 | 39,379 | ||||||
Net loss per share of common stock, basic and diluted | $ | (0.44 | ) | $ | (0.32 | ) | ||
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, common stock subject to repurchase and common stock held in escrow 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, holders of common stock subject to repurchase and common stock held in escrow 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 period, 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: | ||||||||
As of March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Stock options to purchase common stock | 4,969 | 6,166 | ||||||
Employee stock purchase plan | 120 | 124 | ||||||
Common stock held in escrow | 159 | 137 | ||||||
Common stock subject to repurchase | 39 | 104 | ||||||
Restricted stock units and market stock units | 3,359 | 1,471 | ||||||
8,646 | 8,002 | |||||||
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Taxes | |
Income Taxes | |
11. Income Taxes | |
The provision for income taxes for the three months ended March 31, 2015 was approximately $212,000. The provision for income taxes for the three months ended March 31, 2015 consisted primarily of foreign and state income taxes. The benefit for income taxes for the three months ended March 31, 2014 was approximately $14,000. The benefit for income taxes for the three months ended March 31, 2014 consisted primarily of foreign and state income taxes offset by a deferred tax benefit resulting primarily from the reduction in the foreign deferred tax liability as a result of the amortization of the acquired intangibles relating to the acquisition of Insightera, which occurred in December 2013. | |
For the three months ended March 31, 2015, the provision for income taxes differed from the statutory amount primarily due to unbenefited federal, state, and certain foreign losses with minor offsets for certain state and foreign taxes currently payable. For the three months ended March 31, 2014, the provision for income taxes differed from the statutory amount primarily due to state and foreign taxes currently payable. The Company realized no benefit for current year losses due to maintaining a full valuation allowance against the U.S. and most of its foreign net deferred tax assets. | |
The realization of tax benefits of deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available objective evidence, the Company does not believe it is more likely than not that the U.S. Federal and state net deferred tax assets will be realizable. Accordingly, the Company has provided a full valuation allowance against the domestic net deferred tax assets and certain foreign jurisdictions with net deferred tax assets as of March 31, 2015 and December 31, 2014. The Company intends to maintain the remaining valuation allowance until sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance. During the three months ended March 31, 2015, there have been no material changes to the total amount of unrecognized tax benefits. | |
Segment_Information_and_Inform
Segment Information and Information about Geographic Areas | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment Information and Information about Geographic Areas | ||||||||
Segment Information and Information about Geographic Areas | ||||||||
12. 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: | ||||||||
Three Months | ||||||||
Ended March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
United States | $ | 39,265 | $ | 27,350 | ||||
EMEA | 3,152 | 2,656 | ||||||
Other | 3,583 | 2,286 | ||||||
Total | $ | 46,000 | $ | 32,292 | ||||
No single customer accounted for more than 10% of the Company’s total revenue during the three months ended March 31, 2015 and 2014. No single customer accounted for more than 10% of accounts receivable as of March 31, 2015 and December 31, 2014. | ||||||||
Long-lived Assets | ||||||||
The following table sets forth the Company’s long-lived assets by geographic areas as of the periods presented: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
United States | $ | 17,074 | $ | 16,265 | ||||
EMEA | 232 | 209 | ||||||
Other | 366 | 358 | ||||||
Total | $ | 17,672 | $ | 16,832 | ||||
The_Company_and_Summary_of_Sig1
The Company and Summary of Significant Accounting Policies and Estimates (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
The Company and Summary of Significant Accounting Policies and Estimates | |
Basis of Presentation | |
Basis of Presentation | |
The unaudited condensed consolidated financial statements and accompanying notes of the Company reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for a fair presentation of the interim periods presented. The unaudited condensed consolidated financial statements include the accounts of Marketo and its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |
The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the entire year ending December 31, 2015. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (SEC). These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related notes presented in the Company’s Annual Report on Form 10-K filed with the SEC on March 12, 2015. There have been no changes in the Company’s significant accounting policies from those that were disclosed in the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2014. | |
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 our 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. | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | |
In April 2015, the Financial Accounting Standard Board (FASB) issued new accounting guidance, Simplifying the Presentation of Debt Issuance Costs. The guidance 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 debt issuance costs guidance 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 the debt guidance is not expected to have a material impact on the Company’s condensed consolidated financial statements. In May 2014, the FASB issued Accounting Standards Update (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. Unless amended or delayed by the FASB, the new standard would be effective for the Company on January 1, 2017. Early application would be permitted. 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 ongoing financial reporting. | |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||||||
Schedule of financial assets measured stated at fair value on a recurring basis | ||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Money market funds | $ | 94,037 | $ | — | $ | — | $ | 104,021 | $ | — | $ | — | ||||||||
Certificates of deposit | — | 25 | — | — | 25 | — | ||||||||||||||
Total | $ | 94,037 | $ | 25 | $ | — | $ | 104,021 | $ | 25 | $ | — | ||||||||
Balance_Sheet_Components_Table
Balance Sheet Components (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Balance Sheet Components | ||||||||
Schedule of cash and cash equivalents | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Cash | $ | 9,706 | $ | 8,598 | ||||
Cash equivalents: | ||||||||
Money market funds | 94,037 | 104,021 | ||||||
Certificates of deposit | 25 | 25 | ||||||
94,062 | 104,046 | |||||||
Cash and cash equivalents | $ | 103,768 | $ | 112,644 | ||||
Schedule of accounts receivable | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Accounts receivable | $ | 40,670 | $ | 38,260 | ||||
Allowance for doubtful accounts | (481 | ) | (393 | ) | ||||
Accounts receivable, net | $ | 40,189 | $ | 37,867 | ||||
Schedule of property and equipment, net | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Computer equipment | $ | 20,201 | $ | 18,384 | ||||
Software | 2,526 | 2,417 | ||||||
Office furniture | 2,313 | 2,071 | ||||||
Leasehold improvements | 5,326 | 5,123 | ||||||
Construction in progress | 2,329 | 1,745 | ||||||
Total property and equipment | 32,695 | 29,740 | ||||||
Less accumulated depreciation | (15,023 | ) | (12,908 | ) | ||||
Property and equipment, net | $ | 17,672 | $ | 16,832 | ||||
Schedule of accrued expenses and other current liabilities | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Accrued bonuses, commissions and wages | $ | 8,403 | $ | 10,553 | ||||
Accrued ESPP | 1,045 | 2,324 | ||||||
Accrued vacation | 3,537 | 2,972 | ||||||
Accrued marketing expenses | 1,179 | 1,313 | ||||||
Accrued other | 5,953 | 3,529 | ||||||
Total | $ | 20,117 | $ | 20,691 | ||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Goodwill and Intangible Assets | ||||||||||||||||||||
Schedule of goodwill and intangible assets | ||||||||||||||||||||
March 31, | Weighted | December 31, | Weighted | |||||||||||||||||
2015 | Average | 2014 | Average | |||||||||||||||||
Remaining | Remaining | |||||||||||||||||||
Useful Life | Useful Life | |||||||||||||||||||
(in thousands) | (in years) | (in thousands) | (in years) | |||||||||||||||||
Developed technology | $ | 6,050 | 2.7 | $ | 6,050 | 2.9 | ||||||||||||||
Domain names | 950 | 3.4 | 950 | 3.6 | ||||||||||||||||
Customer relationships | 1,600 | 1.4 | 1,600 | 1.6 | ||||||||||||||||
Non-compete agreements | 580 | 2.7 | 580 | 3 | ||||||||||||||||
Capitalized software development costs | 3,075 | 1.6 | 2,042 | 1.2 | ||||||||||||||||
12,255 | 11,222 | |||||||||||||||||||
Less accumulated amortization | (4,882 | ) | (4,146 | ) | ||||||||||||||||
Intangible assets, net | 7,373 | 7,076 | ||||||||||||||||||
Goodwill | 29,201 | 29,201 | ||||||||||||||||||
Goodwill and intangible assets, net | $ | 36,574 | $ | 36,277 | ||||||||||||||||
Schedule of amortization expense | ||||||||||||||||||||
Amortization expense for the periods indicated below was as follows (in thousands): | ||||||||||||||||||||
Three Months | ||||||||||||||||||||
Ended March 31, | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||
Amortization expense | $ | 736 | $ | 517 | ||||||||||||||||
Schedule of estimated future amortization based on the carrying amount of intangible assets | ||||||||||||||||||||
Based on the carrying amount of intangible assets as of March 31, 2015, the estimated future amortization is as follows (in thousands): | ||||||||||||||||||||
Nine Months | Years Ending December 31, | |||||||||||||||||||
Ending | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Total | |||||||||||||||
Developed Technology | $ | 1,131 | $ | 1,508 | $ | 1,406 | $ | — | $ | — | $ | 4,045 | ||||||||
Domain Names | 137 | 180 | 100 | 100 | 29 | 546 | ||||||||||||||
Customer Relationships | 410 | 315 | — | — | — | 725 | ||||||||||||||
Non-Compete Agreements | 113 | 150 | 144 | — | — | 407 | ||||||||||||||
Capitalized Software Development Costs | 879 | 649 | 122 | — | — | 1,650 | ||||||||||||||
Total | $ | 2,670 | $ | 2,802 | $ | 1,772 | $ | 100 | $ | 29 | $ | 7,373 | ||||||||
Stockholders_Equity_and_Redeem1
Stockholders Equity and Redeemable Noncontrolling Interests (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Stockholders' Equity and Redeemable Non-controlling Interests | ||||||||
Summary of activity in stockholders' equity and redeemable non-controlling interests | ||||||||
The following table summarizes the activity in stockholders’ equity and redeemable non-controlling interests for the period indicated below (in thousands): | ||||||||
Total | Redeemable | |||||||
Stockholders’ | Non-controlling | |||||||
Equity | Interests | |||||||
Balance as of December 31, 2014 | $ | 113,176 | $ | 800 | ||||
Issuance of common stock upon exercise and early exercise of stock options | 965 | — | ||||||
Issuance of common stock under employee stock purchase plan | 2,885 | — | ||||||
Investment by redeemable non-controlling interests | 233 | 1,445 | ||||||
Vesting of early exercised options | 42 | — | ||||||
Stock-based compensation expense | 9,795 | — | ||||||
Net loss | (18,158 | ) | (454 | ) | ||||
Foreign currency translation adjustments | 86 | 3 | ||||||
Balance as of March 31, 2015 | $ | 109,024 | $ | 1,794 | ||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Commitments and Contingencies. | |||||
Schedule of future minimum operating lease payments | |||||
As of March 31, 2015, future minimum operating lease payments are as follows (in thousands): | |||||
2015 (9 months) | $ | 4,390 | |||
2016 | 6,359 | ||||
2017 | 6,529 | ||||
2018 | 4,533 | ||||
2019 | 470 | ||||
Total | $ | 22,281 | |||
Stockholders_Equity_and_Stock_1
Stockholder's Equity and Stock Based Compensation (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Stockholder's Equity and Stock Based Compensation | ||||||||||||
Summary of stock option activity | ||||||||||||
Number of | Weighted- | Weighted- | Aggregate | |||||||||
Stock | Average | Average | Intrinsic | |||||||||
Options | Exercise | Remaining | Value | |||||||||
Outstanding | Price | Contractual | ||||||||||
Life | ||||||||||||
(in thousands) | (Years) | (in thousands) | ||||||||||
Balance as of December 31, 2014 | 5,404 | $ | 11.55 | 7.56 | $ | 120,595 | ||||||
Granted | — | — | ||||||||||
Exercised | (278 | ) | 3.47 | |||||||||
Repurchased | — | — | ||||||||||
Cancelled/forfeited | (157 | ) | 12.79 | |||||||||
Balance as of March 31, 2015 | 4,969 | 11.96 | 7.18 | 80,350 | ||||||||
Exercisable as of March 31, 2015 | 4,163 | 7.27 | 7.01 | 79,948 | ||||||||
Vested and expected to vest as of March 31, 2015 | 4,682 | $ | 11.5 | 7.13 | $ | 77,198 | ||||||
Schedule of weighted average grant date fair value of options granted and the total intrinsic value of options exercised | ||||||||||||
The weighted average grant date fair value of options granted and the total intrinsic value of options exercised were as follows (in thousands, except weighted average grant date fair value): | ||||||||||||
Three Months | ||||||||||||
Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Weighted average grant date fair value of options granted | N/A | $ | 21.78 | |||||||||
Total intrinsic value of options exercised | $ | 7,583 | $ | 28,623 | ||||||||
Schedule of assumptions used for estimation of fair value of options granted to employees | ||||||||||||
Three Months | ||||||||||||
Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Expected term (in years) | N/A | 6 | ||||||||||
Risk-free interest rate | N/A | 1.84% | ||||||||||
Expected volatility | N/A | 56% | ||||||||||
Expected dividend rate | N/A | 0% | ||||||||||
Summary of Restricted Stock Units RSUs activity | ||||||||||||
Number of | Weighted Average | Aggregate | ||||||||||
RSUs | Grant Date | Intrinsic | ||||||||||
Fair Value | Value | |||||||||||
(in thousands) | (in thousands) | |||||||||||
Balance as of December 31, 2014 | 2,360 | $ | 33.3 | $ | 77,207 | |||||||
RSUs Granted | 1,082 | 34.5 | ||||||||||
RSUs Vested | (215 | ) | 41.36 | |||||||||
RSUs Cancelled/Forfeited | (108 | ) | 32.7 | |||||||||
Balance as of March 31, 2015 | 3,119 | $ | 33.18 | $ | 79,922 | |||||||
Schedule of weighted average grant date fair value of RSU granted and the total fair value | ||||||||||||
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 (in thousands, except weighted average grant date fair value): | ||||||||||||
Three Months | ||||||||||||
Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Weighted average grant date fair value of RSUs granted | $ | 34.50 | $ | 41.57 | ||||||||
Total intrinsic value of vested RSUs | $ | 6,029 | $ | 195 | ||||||||
Schedule of market performance based compensation restricted stock units (MSU) award activity | ||||||||||||
Number of Shares | Weighted Average | Weighted Average | Aggregate | |||||||||
Underlying MSUs | Grant Date | Remaining Vesting | Intrinsic | |||||||||
Fair Value | Period | Value | ||||||||||
(in thousands) | (in years) | (in thousands) | ||||||||||
Balance as of December 31, 2014 | — | $ | — | — | $ | — | ||||||
MSUs Granted | 240 | 37.53 | ||||||||||
MSUs Vested | — | — | ||||||||||
MSUs Cancelled/Forfeited | — | — | ||||||||||
Balance as of March 31, 2015 | 240 | $ | 37.53 | 1.88 | $ | 6,144 | ||||||
Schedule of weighted average assumptions used to estimate fair value of market performance based compensation restricted stock units (MSU) awards | ||||||||||||
Three Months | ||||||||||||
Ended March 31, 2015 | ||||||||||||
Expected term (in years) | 3 | |||||||||||
Risk-free interest rate | 0.99% | |||||||||||
Expected volatility | 39% | |||||||||||
Expected dividend rate | 0% | |||||||||||
Schedule of assumptions used to value employee stock purchase rights under the Black-Scholes model | ||||||||||||
Three Months | ||||||||||||
Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Expected term (in months) | 6 | 9-Jun | ||||||||||
Risk-free interest rate | 0.05 - 0.07% | 0.08% - 0.11% | ||||||||||
Expected volatility | 39% - 43% | 41% - 42% | ||||||||||
Expected dividend rate | 0% | 0% | ||||||||||
Schedule of stock-based compensation expense included in operating results | ||||||||||||
The stock-based compensation expense included in operating results was allocated as follows (in thousands): | ||||||||||||
Three Months | ||||||||||||
Ended March 31, | ||||||||||||
2015 | 2014 | |||||||||||
Cost of subscription and support revenue | $ | 619 | $ | 384 | ||||||||
Cost of professional services and other revenue | 937 | 447 | ||||||||||
Research and development | 2,316 | 1,079 | ||||||||||
Sales and marketing | 2,802 | 1,779 | ||||||||||
General and administrative | 2,607 | 1,318 | ||||||||||
Total stock-based compensation expense | $ | 9,281 | $ | 5,007 | ||||||||
Schedule of total unrecognized compensation cost related to unvested awards not yet recognized under all equity compensation plans, adjusted for estimate forfeitures | ||||||||||||
March 31, 2015 | ||||||||||||
Unrecognized | Average Expected | |||||||||||
Expense | Recognition Period | |||||||||||
(in thousands) | (in years) | |||||||||||
Stock options | $ | 16,493 | 1.94 | |||||||||
Restricted stock units and market stock units | 79,485 | 3.12 | ||||||||||
Employee stock purchase plan | 585 | 0.38 | ||||||||||
Total unrecognized stock-based compensation expense | $ | 96,563 | 2.90 | |||||||||
Net_Loss_per_Share_Tables
Net Loss per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Net Loss per Share | ||||||||
Schedule of computation of basic and diluted net loss per share of common stock | ||||||||
Three Months | ||||||||
Ended March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands, except per share amount) | ||||||||
Numerator: | ||||||||
Net loss attributable to Marketo | $ | (18,158 | ) | $ | (12,509 | ) | ||
Denominator: | ||||||||
Weighted-average common shares outstanding | 41,815 | 39,628 | ||||||
Less: Weighted-average unvested common shares subject to repurchase or forfeiture and shares held in escrow | (202 | ) | (249 | ) | ||||
Weighted-average shares used in computing net loss per share of common stock, basic and diluted | 41,613 | 39,379 | ||||||
Net loss per share of common stock, basic and diluted | $ | (0.44 | ) | $ | (0.32 | ) | ||
Schedule of potentially dilutive securities excluded from the diluted per share calculation | ||||||||
As of March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Stock options to purchase common stock | 4,969 | 6,166 | ||||||
Employee stock purchase plan | 120 | 124 | ||||||
Common stock held in escrow | 159 | 137 | ||||||
Common stock subject to repurchase | 39 | 104 | ||||||
Restricted stock units and market stock units | 3,359 | 1,471 | ||||||
8,646 | 8,002 | |||||||
Segment_Information_and_Inform1
Segment Information and Information about Geographic Areas (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment Information and Information about Geographic Areas | ||||||||
Schedule of revenue by geographic region | ||||||||
Three Months | ||||||||
Ended March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
United States | $ | 39,265 | $ | 27,350 | ||||
EMEA | 3,152 | 2,656 | ||||||
Other | 3,583 | 2,286 | ||||||
Total | $ | 46,000 | $ | 32,292 | ||||
Schedule of long-lived assets by geographic areas | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
United States | $ | 17,074 | $ | 16,265 | ||||
EMEA | 232 | 209 | ||||||
Other | 366 | 358 | ||||||
Total | $ | 17,672 | $ | 16,832 | ||||
Joint_Venture_Details
Joint Venture (Details) | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Feb. 28, 2014 | Feb. 28, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | |
USD ($) | USD ($) | Marketo KK | Marketo KK | Marketo KK | Investors | Investors | Investors | Investors | Investors | |
USD ($) | Vesting milestones | Vesting milestones | USD ($) | JPY (¥) | Vesting milestones | Vesting milestones | ||||
USD ($) | JPY (¥) | USD ($) | JPY (¥) | |||||||
Joint Venture | ||||||||||
Amount contributed by investors to acquire equity interests | $1,678,000 | $1,953,000 | $2,000,000 | ¥ 200,000,000 | ||||||
Equity interests held by company (as a percent) | 60.10% | 60.10% | ||||||||
Contributions to subscribe to additional shares | 2,000,000 | 237,480,955 | 1,700,000 | 200,000,000 | ||||||
Percentage of equity interest held by investors | 35.40% | 35.40% | 39.90% | 39.90% | ||||||
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 | ||||||||||
Estimated redemption value of call/put option embedded in redeemable non-controlling interests | 1,100,000 | |||||||||
Increase due to investment by redeemable non-controlling interests | $1,445,000 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (Recurring basis, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Level 1 | ||
Fair Value of Financial Instruments | ||
Total fair value of financial assets | $94,037 | $104,021 |
Level 1 | Money market funds | ||
Fair Value of Financial Instruments | ||
Total fair value of financial assets | 94,037 | 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 $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||||
Cash and cash equivalents | |||||
Cash | $9,706 | $8,598 | |||
Cash equivalents: | |||||
Money market funds | 94,037 | 104,021 | |||
Certificates of deposit | 25 | 25 | |||
Total cash equivalents | 94,062 | 104,046 | |||
Cash and cash equivalents | 103,768 | 112,644 | 119,572 | 112,644 | 128,299 |
Accounts Receivable | |||||
Accounts receivable | 40,670 | 38,260 | |||
Allowance for doubtful accounts | -481 | -393 | |||
Accounts receivable, net | 40,189 | 37,867 | |||
Property and equipment, net | |||||
Total property and equipment | 32,695 | 29,740 | |||
Less accumulated depreciation | -15,023 | -12,908 | |||
Property and equipment, net | 17,672 | 16,832 | |||
Computer equipment | |||||
Property and equipment, net | |||||
Total property and equipment | 20,201 | 18,384 | |||
Software | |||||
Property and equipment, net | |||||
Total property and equipment | 2,526 | 2,417 | |||
Office furniture | |||||
Property and equipment, net | |||||
Total property and equipment | 2,313 | 2,071 | |||
Leasehold improvements | |||||
Property and equipment, net | |||||
Total property and equipment | 5,326 | 5,123 | |||
Construction in progress | |||||
Property and equipment, net | |||||
Total property and equipment | $2,329 | $1,745 |
Balance_Sheet_Components_Detai1
Balance Sheet Components (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Accrued expenses and other current liabilities | ||
Accrued bonuses, commissions and wages | $8,403 | $10,553 |
Accrued ESPP | 1,045 | 2,324 |
Accrued vacation | 3,537 | 2,972 |
Accrued marketing expenses | 1,179 | 1,313 |
Accrued other | 5,953 | 3,529 |
Total | $20,117 | $20,691 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Goodwill and Intangible Assets | |||
Intangible assets, gross | $12,255 | $11,222 | |
Less accumulated amortization | -4,882 | -4,146 | |
Net Carrying Amount | 7,373 | 7,076 | |
Goodwill | 29,201 | 29,201 | |
Goodwill and intangible assets, net | 36,574 | 36,277 | |
Amortization expense | 736 | 517 | |
Estimated future amortization | |||
Nine Months Ending December 31, 2015 | 2,670 | ||
2016 | 2,802 | ||
2017 | 1,772 | ||
2018 | 100 | ||
2019 | 29 | ||
Net Carrying Amount | 7,373 | 7,076 | |
Developed technology | |||
Goodwill and Intangible Assets | |||
Intangible assets, gross | 6,050 | 6,050 | |
Net Carrying Amount | 4,045 | ||
Weighted Average Remaining Useful Life | 2 years 8 months 12 days | 2 years 10 months 24 days | |
Estimated future amortization | |||
Nine Months Ending December 31, 2015 | 1,131 | ||
2016 | 1,508 | ||
2017 | 1,406 | ||
Net Carrying Amount | 4,045 | ||
Domain names | |||
Goodwill and Intangible Assets | |||
Intangible assets, gross | 950 | 950 | |
Net Carrying Amount | 546 | ||
Weighted Average Remaining Useful Life | 3 years 4 months 24 days | 3 years 7 months 6 days | |
Estimated future amortization | |||
Nine Months Ending December 31, 2015 | 137 | ||
2016 | 180 | ||
2017 | 100 | ||
2018 | 100 | ||
2019 | 29 | ||
Net Carrying Amount | 546 | ||
Customer relationships | |||
Goodwill and Intangible Assets | |||
Intangible assets, gross | 1,600 | 1,600 | |
Net Carrying Amount | 725 | ||
Weighted Average Remaining Useful Life | 1 year 4 months 24 days | 1 year 7 months 6 days | |
Estimated future amortization | |||
Nine Months Ending December 31, 2015 | 410 | ||
2016 | 315 | ||
Net Carrying Amount | 725 | ||
Non-compete agreements | |||
Goodwill and Intangible Assets | |||
Intangible assets, gross | 580 | 580 | |
Net Carrying Amount | 407 | ||
Weighted Average Remaining Useful Life | 2 years 8 months 12 days | 3 years | |
Estimated future amortization | |||
Nine Months Ending December 31, 2015 | 113 | ||
2016 | 150 | ||
2017 | 144 | ||
Net Carrying Amount | 407 | ||
Capitalized software development costs | |||
Goodwill and Intangible Assets | |||
Intangible assets, gross | 3,075 | 2,042 | |
Net Carrying Amount | 1,650 | ||
Weighted Average Remaining Useful Life | 1 year 7 months 6 days | 1 year 2 months 12 days | |
Estimated future amortization | |||
Nine Months Ending December 31, 2015 | 879 | ||
2016 | 649 | ||
2017 | 122 | ||
Net Carrying Amount | $1,650 |
Stockholders_Equity_and_Redeem2
Stockholders Equity and Redeemable Noncontrolling Interests (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Increase (Decrease) in Shareholders' Equity | ||
Balance | $113,176,000 | |
Issuance of common stock upon exercise and early exercise of stock options | 965,000 | |
Issuance of common stock under employee stock purchase plan | 2,885,000 | |
Investment by redeemable non-controlling interests | 233,000 | |
Vesting of early exercised options | 42,000 | 115,000 |
Stock-based compensation expense | 9,795,000 | |
Net loss | -18,158,000 | -12,509,000 |
Foreign currency translation adjustments | 86,000 | |
Balance | 109,024,000 | |
Redeemable Non-controlling Interests | ||
Balance | 800,000 | |
Investment by redeemable non-controlling interests | 1,445,000 | |
Net loss attributable to redeemable noncontrolling interests | -454,000 | -11,000 |
Foreign currency translation adjustments | 3,000 | |
Balance | 1,794,000 | |
Capitalized stock-based compensation associated with internal-use software projects | $500,000 |
Credit_Facility_Details
Credit Facility (Details) (USD $) | 1 Months Ended | |||
In Millions, unless otherwise specified | 31-May-12 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2013 |
item | ||||
Equipment facility | ||||
Credit facility | ||||
Outstanding loan | $4.70 | $5.40 | ||
Original Line of Credit | ||||
Credit facility | ||||
Maximum borrowing capacity | 4 | |||
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 | 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 | $4.50 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 1 Months Ended | ||
Feb. 28, 2015 | Mar. 31, 2015 | Jan. 31, 2015 | |
sqft | sqft | ||
Leases and contractual obligations | |||
Future minimum lease payments | $22,281,000 | ||
Future minimum lease payments | |||
2015 (remaining 9 months) | 4,390,000 | ||
2016 | 6,359,000 | ||
2017 | 6,529,000 | ||
2018 | 4,533,000 | ||
2019 | 470,000 | ||
Total | 22,281,000 | ||
Sydney, Australia lease agreement | |||
Leases and contractual obligations | |||
Area of office space (in square feet) | 6,448 | ||
Future minimum lease payments | 1,000,000 | ||
Term of operating lease | 36 months | ||
Future minimum lease payments | |||
Total | 1,000,000 | ||
Tokyo, Japan lease agreement | |||
Leases and contractual obligations | |||
Area of office space (in square feet) | 4,147 | ||
Future minimum lease payments | 1,400,000 | ||
Term of operating lease | 42 months | ||
Future minimum lease payments | |||
Total | 1,400,000 | ||
Customer relationship management vendor | |||
Leases and contractual obligations | |||
Contractual Obligation | 4,000,000 | ||
Term of contractual obligation (in months) | 36 months | ||
Data center vendor | |||
Leases and contractual obligations | |||
Contractual Obligation | $1,400,000 | ||
Term of contractual obligation (in months) | 36 months |
Stockholders_Equity_and_Stock_2
Stockholder's Equity and Stock Based Compensation (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Stockholder's Equity and Stock Based Compensation | |||
Common stock, shares authorized | 1,000,000,000 | ||
Common stock, par value (in dollars per share) | $0.00 | ||
Preferred stock, shares authorized | 20,000,000 | ||
Preferred stock, par value (in dollars per share) | $0.00 | ||
Common stock, shares issued | 42,100,000 | ||
Common stock, shares outstanding | 42,100,000 | ||
Stock options to purchase common stock | |||
Number of Stock Options Outstanding | |||
Balance at the beginning of the period (in shares) | 5,404,000 | ||
Exercised (in shares) | -278,000 | ||
Cancelled/Forfeited (in shares) | -157,000 | ||
Balance at the end of the period (in shares) | 4,969,000 | 5,404,000 | |
Exercisable at the end of the period (in shares) | 4,163,000 | ||
Vested and expected to vest at the end of the period (in shares) | 4,682,000 | ||
Weighted-Average Exercise Price | |||
Balance at the beginning of the period (in dollars per share) | $11.55 | ||
Exercised (in dollars per share) | $3.47 | ||
Cancelled/Forfeited (in dollars per share) | $12.79 | ||
Balance at end of the period (in dollars per share) | $11.96 | $11.55 | |
Exercisable at the end of the period (in dollars per share) | $7.27 | ||
Vested and expected to vest at the end of the period (in dollars per share) | $11.50 | ||
Weighted-Average Remaining Contractual Life | |||
Outstanding at the beginning of the period | 7 years 2 months 5 days | 7 years 6 months 22 days | |
Outstanding at the end of the period | 7 years 2 months 5 days | 7 years 6 months 22 days | |
Exercisable at the end of the period | 7 years 4 days | ||
Vested and expected to vest at the end of the period | 7 years 1 month 17 days | ||
Aggregate Intrinsic Value | |||
Outstanding at the beginning of the period | $120,595,000 | ||
Outstanding at the end of the period | 80,350,000 | 120,595,000 | |
Exercisable at the end of the period | 79,948,000 | ||
Vested and expected to vest at the end of the period | 77,198,000 | ||
Closing stock price (in dollars per share) | $25.62 | ||
Additional information | |||
Weighted average grant date fair value (in dollars per share) | $21.78 | ||
Total intrinsic value of options exercised | 7,583,000 | 28,623,000 | |
Total estimated grant date fair value of options vested | $5,700,000 | ||
Stock options to purchase common stock | 2006 Stock Plan | |||
Additional information | |||
Vesting period | 4 years | ||
Percentage of awards which will vest after one year | 25.00% |
Stockholders_Equity_and_Stock_3
Stockholder's Equity and Stock Based Compensation (Details 1) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Employee Stock Purchase Plan | ||
Additional information | ||
Average purchase price of shares issued (in dollars per share) | 23.87 | |
Issuance of common stock under employee stock purchase plan | 100,000 | |
Employee Stock Purchase Plan | Minimum | ||
Valuation assumptions | ||
Expected term | 6 months | |
Risk-free interest rate (as a percent) | 0.05% | 0.08% |
Expected volatility (as a percent) | 39.00% | 41.00% |
Employee Stock Purchase Plan | Maximum | ||
Valuation assumptions | ||
Expected term | 6 months | 9 months |
Risk-free interest rate (as a percent) | 0.07% | 0.11% |
Expected volatility (as a percent) | 43.00% | 42.00% |
Expected dividend rate (as a percent) | 0.00% | 0.00% |
Estimate of fair value of options member | ||
Valuation assumptions | ||
Expected term | 6 years | |
Risk-free interest rate (as a percent) | 1.84% | |
Expected volatility (as a percent) | 56.00% | |
Expected dividend rate (as a percent) | 0.00% | |
Stock options to purchase common stock | ||
Additional information | ||
Closing stock price (in dollars per share) | 25.62 | |
RSUs | ||
Number of RSUs | ||
Balance at the beginning of the period (in shares) | 2,360,000 | |
RSUs Granted (in shares) | 1,082,000 | |
RSUs Vested (in shares) | -215,000 | |
RSUs Cancelled/Forfeited (in shares) | -108,000 | |
Balance at the end of the period (in shares) | 3,119,000 | |
Average Grant Date Fair Value | ||
Balance at the beginning of the period (in dollars per share) | 33.3 | |
RSUs Granted (in dollars per share) | 34.5 | 41.57 |
RSUs Vested (in dollars per share) | 41.36 | |
RSUs Cancelled/Forfeited (in dollars per share) | 32.7 | |
Balance at the end of the period (in dollars per share) | 33.18 | |
Aggregate Intrinsic Value | ||
Balance at the beginning of the period (in dollars) | 77,207 | |
Balance at the end of the period (in dollars) | 79,922 | |
Additional information | ||
RSUs Granted (in dollars per share) | 34.5 | 41.57 |
Total intrinsic value of vested RSUs | 6,029 | 195 |
Closing stock price (in dollars per share) | 25.62 | |
RSUs | Minimum | ||
Aggregate Intrinsic Value | ||
Vesting period | 3 years | |
RSUs | Maximum | ||
Aggregate Intrinsic Value | ||
Vesting period | 4 years |
Stockholders_Equity_and_Stock_4
Stockholder's Equity and Stock Based Compensation (Details2) (MSU's, Executive Officers, USD $) | 3 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 |
item | |
Valuation assumptions | |
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) | 240 |
Balance at the end of the period (in shares) | 240 |
Average Grant Date Fair Value | |
Granted (in dollars per share) | $37.53 |
Balance at the end of the period (in dollars per share) | $37.53 |
Weighted average remaining vesting period (in years) | |
Balance at the beginning of the period (in years) | 1 year 10 months 17 days |
Balance at the end of the period (in years) | 1 year 10 months 17 days |
Aggregate Intrinsic Value | |
Balance at the end of the period (in dollars) | $6,144 |
Additional information | |
Number of separate tranches | 3 |
Vesting period | 1 year 10 months 17 days |
Closing stock price (in dollars per share) | $25.62 |
Tranche one | |
Additional information | |
Percent of shares in tranche that can be received | 100.00% |
Grant date fair value per share | $9.10 |
Tranche two | |
Additional information | |
Percent of shares in tranche that can be received | 100.00% |
Grant date fair value per share | $8.68 |
Tranche three | |
Additional information | |
Percent of shares in tranche that can be received | 150.00% |
Grant date fair value per share | $19.75 |
Minimum | |
Additional information | |
Vesting period for each tranche (in years) | 1 year |
Maximum | |
Additional information | |
Vesting period for each tranche (in years) | 3 years |
Stockholders_Equity_and_Stock_5
Stockholder's Equity and Stock Based Compensation (Details 3) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Stock Compensation Expense | ||
Total stock-based compensation expense | $9,281,000 | $5,007,000 |
Capitalized stock-based compensation expense | 500,000 | |
Total unrecognized compensation cost related to unvested awards not yet recognized | ||
Unrecognized Expense | 96,563,000 | |
Expected Recognition Period | 2 years 10 months 24 days | |
Employee Stock Purchase Plan | ||
Stock Compensation Expense | ||
Total stock-based compensation expense | 400,000 | |
Total unrecognized compensation cost related to unvested awards not yet recognized | ||
Unrecognized Expense | 585,000 | |
Expected Recognition Period | 4 months 17 days | |
Stock options to purchase common stock | ||
Stock Compensation Expense | ||
Total stock-based compensation expense | 2,300,000 | |
Total unrecognized compensation cost related to unvested awards not yet recognized | ||
Unrecognized Expense | 16,493,000 | |
Expected Recognition Period | 1 year 11 months 9 days | |
RSUs | ||
Stock Compensation Expense | ||
Total stock-based compensation expense | 6,500,000 | |
Total unrecognized compensation cost related to unvested awards not yet recognized | ||
Unrecognized Expense | 79,485,000 | |
Expected Recognition Period | 3 years 1 month 13 days | |
MSU's | ||
Stock Compensation Expense | ||
Total stock-based compensation expense | 600,000 | |
Cost of subscription and support revenue | ||
Stock Compensation Expense | ||
Total stock-based compensation expense | 619,000 | 384,000 |
Cost of professional services and other revenue | ||
Stock Compensation Expense | ||
Total stock-based compensation expense | 937,000 | 447,000 |
Research and development | ||
Stock Compensation Expense | ||
Total stock-based compensation expense | 2,316,000 | 1,079,000 |
Sales and marketing | ||
Stock Compensation Expense | ||
Total stock-based compensation expense | 2,802,000 | 1,779,000 |
General and administrative | ||
Stock Compensation Expense | ||
Total stock-based compensation expense | 2,607,000 | 1,318,000 |
Internal use software projects | ||
Stock Compensation Expense | ||
Capitalized stock-based compensation expense | 500,000 | |
Internal use software projects | RSUs | ||
Stock Compensation Expense | ||
Stock-based compensation from performance based restricted stock units | $700,000 |
Net_Loss_per_Share_Details
Net Loss per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Numerator: | ||
Net loss | ($18,612) | ($12,520) |
Less net loss attributable to redeemable non-controlling interests | -454 | -11 |
Net loss attributable to Marketo | ($18,158) | ($12,509) |
Denominator: | ||
Weighted-average common shares outstanding | 41,815 | 39,628 |
Less: Weighted-average unvested common shares subject to repurchase or forfeiture and shares held in escrow | -202 | -249 |
Weighted-average shares used in computing net loss per share of common stock, basic and diluted | 41,613 | 39,379 |
Net loss per share of common stock, basic and diluted (in dollars per share) | ($0.44) | ($0.32) |
Potentially dilutive securities that were excluded from the diluted per share | ||
Potentially dilutive securities excluded from the diluted per share calculation | 8,646 | 8,002 |
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 | 4,969 | 6,166 |
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 | 120 | 124 |
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 | 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 | 39 | 104 |
RSUs | ||
Potentially dilutive securities that were excluded from the diluted per share | ||
Potentially dilutive securities excluded from the diluted per share calculation | 3,359 | 1,471 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Provision for income taxes | ||
(Benefit) provision for income taxes | ($212,000) | $14,000 |
Income tax benefit for current year losses due to maintaining a full valuation allowance | 0 | 0 |
Components of deferred tax assets and liabilities | ||
Increase in net valuation allowance | $0 |
Segment_Information_and_Inform2
Segment Information and Information about Geographic Areas (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
item | ||
Segment Information and Information about Geographic Areas | ||
Number of business segment | 1 | |
Revenue and long-lived assets by geographic area | ||
Revenue | $46,000 | $32,292 |
Long-lived assets | 17,672 | 16,832 |
United States | ||
Revenue and long-lived assets by geographic area | ||
Revenue | 39,265 | 27,350 |
Long-lived assets | 17,074 | 16,265 |
EMEA | ||
Revenue and long-lived assets by geographic area | ||
Revenue | 3,152 | 2,656 |
Long-lived assets | 232 | 209 |
Other | ||
Revenue and long-lived assets by geographic area | ||
Revenue | 3,583 | 2,286 |
Long-lived assets | $366 | $358 |