Marketo (MKTO) 10-Q 7 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 03, 2015
Document and Entity Information
Entity Registrant Name	Marketo, Inc.
Entity Central Index Key	1,490,660
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		42,705,841
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 110,445	$ 112,644
Accounts receivable, net of allowances	45,744	37,867
Prepaid expenses and other current assets	7,801	5,756
Total current assets	163,990	156,267
Property and equipment, net	20,661	16,832
Goodwill	29,201	29,201
Intangible assets, net	6,933	7,076
Other assets	2,101	1,035
Total assets	222,886	210,411
Current liabilities:
Accounts payable	5,453	3,901
Accrued expenses and other current liabilities	23,680	20,691
Deferred revenue	80,620	62,945
Current portion of credit facility	2,643	2,719
Total current liabilities	112,396	90,256
Credit facility, net of current portion	1,382	2,653
Other liabilities	3,962	3,526
Total liabilities	$ 117,740	$ 96,435
Commitments and contingencies (Note 8)
Redeemable non-controlling interests (Note 2 and Note 6)	$ 2,246	$ 800
Stockholders' equity:
Common stock	4	4
Additional paid-in capital	322,372	297,420
Accumulated other comprehensive loss	(382)	(350)
Accumulated deficit	(219,094)	(183,898)
Total stockholders' equity	102,900	113,176
Total liabilities, redeemable non-controlling interests and stockholders' equity	$ 222,886	$ 210,411

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenue:
Subscription and support	$ 43,757	$ 31,236	$ 83,857	$ 59,847
Professional services and other	6,923	4,794	12,823	8,475
Total revenue	50,680	36,030	96,680	68,322
Cost of revenue:
Subscription and support	9,770	6,876	18,844	13,111
Professional services and other	8,177	5,540	15,514	10,381
Total cost of revenue	17,947	12,416	34,358	23,492
Gross profit:
Subscription and support	33,987	24,360	65,013	46,736
Professional services and other	(1,254)	(746)	(2,691)	(1,906)
Total gross profit	32,733	23,614	62,322	44,830
Operating expenses:
Research and development	9,168	7,198	18,863	14,329
Sales and marketing	32,055	23,786	62,087	44,154
General and administrative	8,960	5,731	17,742	11,923
Total operating expenses	50,183	36,715	98,692	70,406
Loss from operations	(17,450)	(13,101)	(36,370)	(25,576)
Other income (expense), net	97	(186)	617	(245)
Loss before provision (benefit) for income taxes	(17,353)	(13,287)	(35,753)	(25,821)
Provision (benefit) for income taxes	100	(16)	312	(30)
Net loss	(17,453)	(13,271)	(36,065)	(25,791)
Net loss and adjustment attributable to redeemable non-controlling interests (See Note 2)	(497)	159	(43)	170
Net loss attributable to Marketo	$ (17,950)	$ (13,112)	$ (36,108)	$ (25,621)
Net loss per share of common stock, basic and diluted (in dollars per share)	$ (0.43)	$ (0.33)	$ (0.86)	$ (0.64)
Shares used in computing net loss per share of common stock, basic and diluted (in shares)	42,163	40,271	41,889	39,898

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Condensed Consolidated Statements of Comprehensive Loss
Net loss	$ (17,453)	$ (13,271)	$ (36,065)	$ (25,791)
Other comprehensive income (loss):
Foreign currency translation adjustments	(164)	115	(74)	65
Total comprehensive loss	(17,617)	(13,156)	(36,139)	(25,726)
Net loss attributable to redeemable non-controlling interest (excluding adjustment to redeemable non-controlling interest)	415	159	869	170
Other comprehensive (income) loss attributable to redeemable non-controlling interests	45	(20)	42	(18)
Comprehensive loss attributable to Marketo	$ (17,157)	$ (13,017)	$ (35,228)	$ (25,574)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net loss attributable to Marketo	$ (36,108)	$ (25,621)
Net loss and adjustment attributable to redeemable non-controlling interests	43	(170)
Net loss	(36,065)	(25,791)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	6,285	4,344
Stock-based compensation expense	19,007	10,918
Deferred income taxes	247	(143)
Reduction of allowance for doubtful accounts	236	92
Changes in operating assets and liabilities:
Accounts receivable, net	(8,478)	(2,805)
Prepaid expenses and other current assets	(2,019)	(2,151)
Other assets	(861)	(579)
Accounts payable	2,188	478
Accrued expenses and other current liabilities	2,532	(5,823)
Deferred revenue	18,283	11,837
Other liabilities	77	(21)
Net cash provided by (used in) operating activities	1,432	(9,644)
Cash flows from investing activities:
Increase in Restricted Cash	(215)
Purchase of property and equipment	(8,324)	(4,263)
Capitalized software development	(772)	(404)
Net cash used in investing activities	(9,311)	(4,667)
Cash flows from financing activities:
Proceeds from issuance of common stock upon exercise of stock options	3,018	3,327
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	(32)	(46)
Withholding taxes remitted for the net share settlement of an equity awards	(74)	(1,692)
Repayment of debt	(1,346)	(868)
Payment of deferred follow-on offering costs		(104)
Payment incurred for common stock registration related to acquisition		(319)
Net cash provided by financing activities	6,129	5,635
Effect of foreign exchange rate changes on cash and cash equivalents	(449)	91
Net decrease in cash and cash equivalents	(2,199)	(8,585)
Cash and cash equivalents - beginning of period	112,644	128,299
Cash and cash equivalents - end of period	110,445	119,714
Supplemental disclosures of cash flow information:
Cash paid for interest	97	147
Cash paid for income taxes	116	44
Supplemental disclosure of noncash investing and financing activities:
Vesting of early exercise options	82	190
Unpaid and accrued fixed assets	1,252	$ 1,063
Property and equipment acquired through tenant improvement allowance	$ 211

The Company and Summary of Sign

The Company and Summary of Significant Accounting Policies and Estimates	6 Months Ended
	Jun. 30, 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 material 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. Certain immaterial amounts in the prior period condensed consolidated statement of cash flows within the cash provided by (used in) operating activities have been reclassified to conform to the current period presentation. 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 April 2015, the FASB issued Accounting Standards Update (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 reporting periods beginning after December 15, 2015. The adoption of ASU 2015-05 is not expected to have a material impact on the Company’s consolidated financial position or results of operations. 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. The new standard is expected to become effective for the Company on January 1, 2018. Additionally, early application is permitted, but no earlier than the original effective date of January 1, 2017. 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	6 Months Ended
	Jun. 30, 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 June 30, 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 June 30, 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, at June 30, 2015 the Company adjusted the redeemable non-controlling interest to its expected redemption value, resulting in a $0.9 million reduction to additional paid-in-capital. The following table reconciles net loss attributable to redeemable non-controlling interest for periods indicated below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net loss attributable to redeemable non-controlling interest (before adjustment to redeemable non-controlling interest) $ $ $ $ Adjustment to redeemable non-controlling interest ) — ) — Net loss and adjustment attributable to redeemable non-controlling interest $ ) $ $ ) $

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
	Jun. 30, 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 June 30, 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: June 30, 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	6 Months Ended
	Jun. 30, 2015
Balance Sheet Components
Balance Sheet Components	4. Balance Sheet Components Cash and Cash Equivalents Cash and cash equivalents consist of the following: June 30, December 31, 2015 2014 (in thousands) Cash $ $ Cash equivalents: Money market funds Certificates of deposit Cash and cash equivalents $ $ Accounts Receivable Accounts receivable consist of the following: June 30, December 31, 2015 2014 (in thousands) Accounts receivable $ $ Allowance for doubtful accounts ) ) Accounts receivable, net $ $ Property and Equipment, Net Property and equipment, net consists of the following: June 30, 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 $ $ Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities are as follows: June 30, 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	6 Months Ended
	Jun. 30, 2015
Goodwill and Intangible Assets
Goodwill and Intangible Assets	5. Goodwill and Intangible Assets Goodwill and intangible assets consisted of the following as of June 30, 2015 and December 31, 2014: June 30, 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 $ $ Amortization expense for the periods indicated below was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Amortization expense $ $ $ $ Based on the carrying amount of intangible assets as of June 30, 2015, the estimated future amortization is as follows (in thousands): Six Months Ending December 31, Years Ending December 31, 2015 2016 2017 2018 2019 Total Developed Technology $ $ $ $ — $ — $ Domain Names Customer Relationships — — — Non-Compete Agreements — — Capitalized Software Development Costs — — Total $ $ $ $ $ $

Stockholders Equity and Redeema

Stockholders Equity and Redeemable Noncontrolling Interests	6 Months Ended
	Jun. 30, 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 Stockholders’ Equity Redeemable Non-controlling Interests Balance as of December 31, 2014 $ $ Issuance of common stock upon exercise and early exercise of stock options — Issuance of common stock under employee stock purchase plan — Investment by redeemable non-controlling interests Adjustment to redemption value ) Withholding taxes for the net share settlement of equity awards ) — Vesting of early exercised options — Stock-based compensation expense — Net loss ) ) Foreign currency translation adjustments ) ) Balance as of June 30, 2015 $ $ For the six months ended June 30, 2015, the Company incurred $19.0 million of stock-based compensation expense and capitalized stock-based compensation expense of $0.7 million associated with the Company’s internal-use software projects.

Credit Facility

Credit Facility	6 Months Ended
	Jun. 30, 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 paid 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 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 June 30, 2015, the Company was in compliance with these covenants. As of June 30, 2015 and December 31, 2014, the outstanding loan balance was $4.0 million and $5.4 million, respectively. There were no material changes in the Company’s commitments under the outstanding loan balance, which was disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2014.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 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 June 30, 2015, future minimum operating lease payments are as follows (in thousands): 2015 (6 months) $ 2016 2017 2018 2019 Thereafter — Total $ 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.

Stockholder's Equity and Stock

Stockholder's Equity and Stock Based Compensation	6 Months Ended
	Jun. 30, 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 June 30, 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 June 30, 2015, the Company had approximately 42.6 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 six months ended June 30, 2015 is as follows: Number of Stock Options Outstanding Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands) (Years) (in thousands) Balance as of December 31, 2014 $ $ Granted Exercised ) Repurchased — — Cancelled/forfeited ) Balance as of June 30, 2015 Exercisable as of June 30, 2015 Vested and expected to vest as of June 30, 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 $28.06 as of June 30, 2015 for options that were in-the-money as of that date. Option awards generally vest over a four year period, with 25% vesting 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 exercised and unvested shares 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 June 30, 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): Six Months Ended June 30, 2015 2014 Weighted average grant date fair value of options granted $ $ Total intrinsic value of options exercised $ $ The total estimated grant date fair value of options vested during the six months ended June 30, 2015 was approximately $8.7 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 June 30, Six Months Ended June 30, 2015 2014 2015 2014 Expected term (in years) 6 6 6 6 Risk-free interest rate 1.70% 1.90% - 1.97% 1.70% 1.84% - 1.97% Expected volatility 44.80% 49% - 55% 44.80% 49% - 56% Expected dividend rate 0% 0% 0% 0% Restricted Stock Units A summary of the Company’s Restricted Stock Units (RSUs) activity and related information for the six months ended June 30, 2015 is as follows: Number of RSUs Weighted Average Grant Date Fair Value Aggregate Intrinsic Value (in thousands) (in thousands) Balance as of December 31, 2014 $ $ RSUs Granted RSUs Vested ) RSUs Cancelled/Forfeited ) Balance as of June 30, 2015 $ $ RSUs are generally subject to a time-based vesting condition that ranges from 3 to 4 years. The aggregate intrinsic value of RSUs outstanding at June 30, 2015 was determined using the Company’s closing stock price of $28.06 per share as of June 30, 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): Six Months Ended June 30, 2015 2014 Weighted average grant date fair value of RSUs granted $ $ Total intrinsic value of vested RSUs $ $ 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 six months ended June 30, 2015 is as follows: Number of Shares Underlying MSUs Weighted Average Grant Date Fair Value Weighted Average Remaining Vesting Period Aggregate Intrinsic Value (in thousands) (in years) (in thousands) Balance as of December 31, 2014 — $ — — $ — MSUs Granted MSUs Vested — — MSUs Cancelled/Forfeited ) Balance as of June 30, 2015 $ $ The aggregate intrinsic value of MSUs outstanding was determined using the Company’s closing stock price of $28.06 as of June 30, 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 six months of fiscal 2015 was estimated using the following weighted-average assumptions: Six Months Ended June 30, 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 six months ended June 30, 2015 and 2014 were as follows: Six Months Ended June 30, 2015 2014 Expected term (in months) 6 6 - 9 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 six months of fiscal 2015, the Company issued approximately 0.1 million shares of common stock under the Company’s Employee Stock Purchase Plan (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 June 30, Six Months Ended June 30, 2015 2014 2015 2014 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 six months ended June 30, 2015, the Company incurred expenses of $4.3 million for options, $12.6 million for RSUs, $2.0 million for MSUs and $0.8 million for ESPP shares. Additionally, the Company capitalized stock-based compensation expense of $0.7 million associated with the Company’s internal-use software projects. Amounts for the six months ended June 30, 2015 include stock compensation expense of $1.0 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 June 30, 2015, total unrecognized compensation cost related to unvested awards not yet recognized under all equity compensation plans, adjusted for estimated forfeitures, was as follows: June 30, 2015 Unrecognized Expense 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	6 Months Ended
	Jun. 30, 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 ESPP shares, 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 June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in thousands, except per share amount) 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 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 June 30, 2015 2014 (in thousands) Stock options to purchase common stock Employee stock purchase plan Common stock held in escrow Common stock subject to repurchase Restricted stock units and market stock units

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2015
Income Taxes
Income Taxes	11. Income Taxes The provision for income taxes for the three and six months ended June 30, 2015 was approximately $0.1 million and $0.3 million, respectively. The provision for income taxes for the three and six months ended June 30, 2015 consisted primarily of foreign and state income taxes. The benefit for income taxes for the three and six months ended June 30, 2014 was approximately $16,000 and $30,000, respectively , consisting 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 and six months ended June 30, 2015 and 2014, the provision for income taxes differed from the statutory amount primarily due to the Company realizing no benefit for current year losses and maintaining a full valuation allowance against the U.S. and certain foreign net deferred tax assets, while recognizing state and foreign taxes currently payable. 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 and certain foreign jurisdictions 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 June 30, 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 and six months ended June 30, 2015, there have been no material changes to the total amount of unrecognized tax benefits.

Segment Information and Informa

Segment Information and Information about Geographic Areas	6 Months Ended
	Jun. 30, 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 (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 June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in thousands) (in thousands) United States $ $ $ $ EMEA Other Total $ $ $ $ No single customer accounted for more than 10% of the Company’s total revenue during the three and six months ended June 30, 2015 and 2014, respectively. One customer accounted for 12% of accounts receivable as of June 30, 2015. No single customer accounted for more than 10% of accounts receivable as of 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: June 30, December 31, 2015 2014 (in thousands) United States $ $ EMEA Other Total $ $

The Company and Summary of Si18

The Company and Summary of Significant Accounting Policies and Estimates (Policies)	6 Months Ended
	Jun. 30, 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 material 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. Certain immaterial amounts in the prior period condensed consolidated statement of cash flows within the cash provided by (used in) operating activities have been reclassified to conform to the current period presentation.
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 April 2015, the FASB issued Accounting Standards Update (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 reporting periods beginning after December 15, 2015. The adoption of ASU 2015-05 is not expected to have a material impact on the Company’s consolidated financial position or results of operations. 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. The new standard is expected to become effective for the Company on January 1, 2018. Additionally, early application is permitted, but no earlier than the original effective date of January 1, 2017. 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 (Tables)

Joint Venture (Tables)	6 Months Ended
	Jun. 30, 2015
Joint Venture
Schedule reconciling net loss attributable to redeemable non-controlling interests	The following table reconciles net loss attributable to redeemable non-controlling interest for periods indicated below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net loss attributable to redeemable non-controlling interest (before adjustment to redeemable non-controlling interest) $ $ $ $ Adjustment to redeemable non-controlling interest ) — ) — Net loss and adjustment attributable to redeemable non-controlling interest $ ) $ $ ) $

Fair Value of Financial Instr20

Fair Value of Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2015
Fair Value of Financial Instruments
Schedule of financial assets measured stated at fair value on a recurring basis	June 30, 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)	6 Months Ended
	Jun. 30, 2015
Balance Sheet Components
Schedule of cash and cash equivalents	June 30, December 31, 2015 2014 (in thousands) Cash $ $ Cash equivalents: Money market funds Certificates of deposit Cash and cash equivalents $ $
Schedule of accounts receivable	June 30, December 31, 2015 2014 (in thousands) Accounts receivable $ $ Allowance for doubtful accounts ) ) Accounts receivable, net $ $
Schedule of property and equipment, net	June 30, 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	June 30, 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)	6 Months Ended
	Jun. 30, 2015
Goodwill and Intangible Assets
Schedule of goodwill and intangible assets	June 30, 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	Amortization expense for the periods indicated below was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 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 June 30, 2015, the estimated future amortization is as follows (in thousands): Six Months Ending December 31, Years Ending December 31, 2015 2016 2017 2018 2019 Total Developed Technology $ $ $ $ — $ — $ Domain Names Customer Relationships — — — Non-Compete Agreements — — Capitalized Software Development Costs — — Total $ $ $ $ $ $

Stockholders Equity and Redee23

Stockholders Equity and Redeemable Noncontrolling Interests (Tables)	6 Months Ended
	Jun. 30, 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 Stockholders’ Equity Redeemable Non-controlling Interests Balance as of December 31, 2014 $ $ Issuance of common stock upon exercise and early exercise of stock options — Issuance of common stock under employee stock purchase plan — Investment by redeemable non-controlling interests Adjustment to redemption value ) Withholding taxes for the net share settlement of equity awards ) — Vesting of early exercised options — Stock-based compensation expense — Net loss ) ) Foreign currency translation adjustments ) ) Balance as of June 30, 2015 $ $

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2015
Commitments and Contingencies.
Schedule of future minimum operating lease payments	As of June 30, 2015, future minimum operating lease payments are as follows (in thousands): 2015 (6 months) $ 2016 2017 2018 2019 Thereafter — Total $

Stockholder's Equity and Stoc25

Stockholder's Equity and Stock Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2015
Stockholder's Equity and Stock Based Compensation
Summary of stock option activity	Number of Stock Options Outstanding Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands) (Years) (in thousands) Balance as of December 31, 2014 $ $ Granted Exercised ) Repurchased — — Cancelled/forfeited ) Balance as of June 30, 2015 Exercisable as of June 30, 2015 Vested and expected to vest as of June 30, 2015 $
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): Six Months Ended June 30, 2015 2014 Weighted average grant date fair value of options granted $ $ Total intrinsic value of options exercised $ $
Schedule of assumptions used for estimation of fair value of options granted to employees	Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Expected term (in years) 6 6 6 6 Risk-free interest rate 1.70% 1.90% - 1.97% 1.70% 1.84% - 1.97% Expected volatility 44.80% 49% - 55% 44.80% 49% - 56% Expected dividend rate 0% 0% 0% 0%
Summary of Restricted Stock Units RSUs activity	Number of RSUs Weighted Average Grant Date Fair Value Aggregate Intrinsic Value (in thousands) (in thousands) Balance as of December 31, 2014 $ $ RSUs Granted RSUs Vested ) RSUs Cancelled/Forfeited ) Balance as of June 30, 2015 $ $
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): Six Months Ended June 30, 2015 2014 Weighted average grant date fair value of RSUs granted $ $ Total intrinsic value of vested RSUs $ $
Schedule of market performance based compensation restricted stock units (MSU) award activity	Number of Shares Underlying MSUs Weighted Average Grant Date Fair Value Weighted Average Remaining Vesting Period Aggregate Intrinsic Value (in thousands) (in years) (in thousands) Balance as of December 31, 2014 — $ — — $ — MSUs Granted MSUs Vested — — MSUs Cancelled/Forfeited ) Balance as of June 30, 2015 $ $
Schedule of weighted average assumptions used to estimate fair value of market performance based compensation restricted stock units (MSU) awards	Six Months Ended June 30, 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	Six Months Ended June 30, 2015 2014 Expected term (in months) 6 6 - 9 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 June 30, Six Months Ended June 30, 2015 2014 2015 2014 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	June 30, 2015 Unrecognized Expense 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)	6 Months Ended
	Jun. 30, 2015
Net Loss per Share
Schedule of computation of basic and diluted net loss per share of common stock	Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in thousands, except per share amount) 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	As of June 30, 2015 2014 (in thousands) Stock options to purchase common stock Employee stock purchase plan Common stock held in escrow Common stock subject to repurchase Restricted stock units and market stock units

Segment Information and Infor27

Segment Information and Information about Geographic Areas (Tables)	6 Months Ended
	Jun. 30, 2015
Segment Information and Information about Geographic Areas
Schedule of revenue by geographic region	Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 (in thousands) (in thousands) United States $ $ $ $ EMEA Other Total $ $ $ $
Schedule of long-lived assets by geographic areas	June 30, December 31, 2015 2014 (in thousands) United States $ $ EMEA Other Total $ $

Joint Venture (Details)

Joint Venture (Details)	1 Months Ended		3 Months Ended		6 Months Ended
	Feb. 28, 2014JPY (¥)	Feb. 28, 2014USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Jun. 30, 2015JPY (¥)	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)
Joint Venture
Amount contributed by investors to acquire equity interests						$ 1,678,000	$ 1,953,000
Redeemable non-controlling interests
Increase due to investment by redeemable non-controlling interests						1,445,000
Net loss attributable to redeemable non-controlling interest (excluding adjustment to redeemable non-controlling interest)			$ 415,000	$ 159,000		869,000	170,000
Adjustment to redeemable non-controlling interest			(912,000)			(912,000)
Net loss attributable to redeemable noncontrolling interests			$ (497,000)	$ 159,000		(43,000)	$ 170,000
Marketo KK
Redeemable non-controlling interests
Adjustment to redeemable non-controlling interest						$ 900,000
Marketo KK | Vesting milestones
Joint Venture
Equity interests held by company (as a percent)			60.10%		60.10%	60.10%
Contributions to subscribe to additional shares					¥ 237,480,955	$ 2,000,000
Investors
Joint Venture
Amount contributed by investors to acquire equity interests	¥ 200,000,000	$ 2,000,000
Percentage of equity interest held by investors	35.40%	35.40%
Percentage of the common stock callable or puttable beginning on the seventh anniversary					20.00%	20.00%
Percentage of the common stock callable or puttable beginning on the eighth anniversary					40.00%	40.00%
Percentage of the common stock callable or puttable beginning on the tenth anniversary					100.00%	100.00%
Investors | Vesting milestones
Joint Venture
Contributions to subscribe to additional shares					¥ 200,000,000	$ 1,700,000
Percentage of equity interest held by investors			39.90%		39.90%	39.90%

Fair Value of Financial Instr29

Fair Value of Financial Instruments (Details) - Recurring basis - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Level 1
Fair Value of Financial Instruments
Total fair value of financial assets	$ 93,055	$ 104,021
Level 1 | Money market funds
Fair Value of Financial Instruments
Total fair value of financial assets	93,055	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	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Dec. 31, 2013
Cash and cash equivalents
Cash	$ 17,365	$ 8,598
Cash equivalents:
Money market funds	93,055	104,021
Certificates of deposit	25	25
Total cash equivalents	93,080	104,046
Cash and cash equivalents	110,445	112,644	$ 119,714	$ 128,299
Accounts Receivable
Accounts receivable	46,083	38,260
Allowance for doubtful accounts	(339)	(393)
Accounts receivable, net	45,744	37,867
Property and equipment, net
Total property and equipment	38,193	29,740
Less accumulated depreciation	(17,532)	(12,908)
Property and equipment, net	20,661	16,832
Computer equipment
Property and equipment, net
Total property and equipment	23,633	18,384
Software
Property and equipment, net
Total property and equipment	2,900	2,417
Office furniture
Property and equipment, net
Total property and equipment	2,449	2,071
Leasehold improvements
Property and equipment, net
Total property and equipment	6,466	5,123
Construction in progress
Property and equipment, net
Total property and equipment	$ 2,745	$ 1,745

Balance Sheet Components (Det31

Balance Sheet Components (Details 2) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Accrued expenses and other current liabilities
Accrued bonuses, commissions and wages	$ 11,318	$ 10,553
Accrued ESPP	2,242	2,324
Accrued vacation	3,724	2,972
Accrued marketing expenses	1,072	1,313
Accrued other	5,324	3,529
Total	$ 23,680	$ 20,691

Goodwill and Intangible Asset32

Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Goodwill and Intangible Assets
Intangible assets, gross	$ 12,707		$ 12,707		$ 11,222
Less accumulated amortization	(5,774)		(5,774)		(4,146)
Net Carrying Amount	6,933		6,933		7,076
Goodwill	29,201		29,201		29,201
Goodwill and intangible assets, net	36,134		36,134		36,277
Amortization expense	892	$ 503	1,628	$ 1,020
Estimated future amortization
Nine Months Ending December 31, 2015	1,909		1,909
2,016	3,081		3,081
2,017	1,814		1,814
2,018	100		100
2,019	29		29
Net Carrying Amount	6,933		6,933		7,076
Developed technology
Goodwill and Intangible Assets
Intangible assets, gross	6,050		6,050		$ 6,050
Net Carrying Amount	3,668		$ 3,668
Weighted Average Remaining Useful Life			2 years 4 months 24 days		2 years 10 months 24 days
Estimated future amortization
Nine Months Ending December 31, 2015	754		$ 754
2,016	1,508		1,508
2,017	1,406		1,406
Net Carrying Amount	3,668		3,668
Domain names
Goodwill and Intangible Assets
Intangible assets, gross	950		950		$ 950
Net Carrying Amount	501		$ 501
Weighted Average Remaining Useful Life			3 years 2 months 12 days		3 years 7 months 6 days
Estimated future amortization
Nine Months Ending December 31, 2015	92		$ 92
2,016	180		180
2,017	100		100
2,018	100		100
2,019	29		29
Net Carrying Amount	501		501
Customer relationships
Goodwill and Intangible Assets
Intangible assets, gross	1,600		1,600		$ 1,600
Net Carrying Amount	589		$ 589
Weighted Average Remaining Useful Life			1 year 2 months 12 days		1 year 7 months 6 days
Estimated future amortization
Nine Months Ending December 31, 2015	274		$ 274
2,016	315		315
Net Carrying Amount	589		589
Non-compete agreements
Goodwill and Intangible Assets
Intangible assets, gross	580		580		$ 580
Net Carrying Amount	369		$ 369
Weighted Average Remaining Useful Life			2 years 6 months		3 years
Estimated future amortization
Nine Months Ending December 31, 2015	75		$ 75
2,016	150		150
2,017	144		144
Net Carrying Amount	369		369
Capitalized software development costs
Goodwill and Intangible Assets
Intangible assets, gross	3,527		3,527		$ 2,042
Net Carrying Amount	1,806		$ 1,806
Weighted Average Remaining Useful Life			1 year 4 months 24 days		1 year 2 months 12 days
Estimated future amortization
Nine Months Ending December 31, 2015	714		$ 714
2,016	928		928
2,017	164		164
Net Carrying Amount	$ 1,806		$ 1,806

Stockholders Equity and Redee33

Stockholders Equity and Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2014
Increase (Decrease) in Shareholders' Equity
Balance		$ 113,176
Issuance of common stock upon exercise and early exercise of stock options		3,018
Issuance of common stock under employee stock purchase plan		2,885
Investment by redeemable non-controlling interests		233
Adjustment to redemption value	$ (912)	(912)
Withholding taxes for the net share settlement of an equity award		(77)
Vesting of early exercised options		82	$ 190
Stock-based compensation expense		19,723
Net loss before adjustment to redemption value		(35,196)
Foreign currency translation adjustments		(32)
Balance	102,900	102,900
Redeemable Non-controlling Interests
Balance		800
Investment by redeemable non-controlling interests		1,445
Adjustment to redemption value - Noncontrolling interests		912
Portion of loss attributable to non-controlling interest		(869)
Foreign currency translation adjustments		(42)
Balance	$ 2,246	2,246
Stock-based compensation expense		19,000
Capitalized stock-based compensation associated with internal-use software projects		$ 700

Credit Facility (Details)

Credit Facility (Details) $ in Millions	1 Months Ended
	May. 31, 2012USD ($)item	Jun. 30, 2015USD ($)	Dec. 31, 2014USD ($)	Jun. 30, 2013USD ($)
Equipment facility
Credit facility
Outstanding loan		$ 4	$ 5.4
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 | 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				$ 4.5

Commitments and Contingencies35

Commitments and Contingencies (Details) $ in Thousands	1 Months Ended
	Mar. 31, 2015USD ($)ft²	Feb. 28, 2015USD ($)ft²	Jan. 31, 2015USD ($)	Jun. 30, 2015USD ($)
Leases and contractual obligations
Future minimum lease payments				$ 21,251
Future minimum lease payments
2015 (remaining 9 months)				2,998
2,016				6,395
2,017				6,632
2,018				4,644
2,019				582
Total				$ 21,251
Sydney, Australia lease agreement
Leases and contractual obligations
Area of office space (in square feet) | ft²		6,448
Future minimum lease payments		$ 1,000
Term of operating lease		36 months
Future minimum lease payments
Total		$ 1,000
Tokyo, Japan lease agreement
Leases and contractual obligations
Area of office space (in square feet) | ft²	4,147
Future minimum lease payments	$ 1,400
Term of operating lease	42 months
Future minimum lease payments
Total	$ 1,400
Customer relationship management vendor
Leases and contractual obligations
Contractual Obligation			$ 4,000
Term of contractual obligation (in months)			36 months
Data center vendor
Leases and contractual obligations
Contractual Obligation			$ 1,400
Term of contractual obligation (in months)			36 months

Stockholder's Equity and Stoc36

Stockholder's Equity and Stock Based Compensation (Details) - Range [Domain] - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 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)	$ 0.0001
Preferred stock, shares authorized	20,000,000
Preferred stock, par value (in dollars per share)	$ 0.0001
Common stock, shares issued	42,600,000
Common stock, shares outstanding	42,600,000
Stock options to purchase common stock
Number of Stock Options Outstanding
Balance at the beginning of the period (in shares)	5,404,000
Granted (in shares)	51,000
Exercised (in shares)	(665,000)
Cancelled/Forfeited (in shares)	(292,000)
Balance at the end of the period (in shares)	4,498,000		5,404,000
Exercisable at the end of the period (in shares)	3,794,000
Vested and expected to vest at the end of the period (in shares)	4,274,000
Weighted-Average Exercise Price
Balance at the beginning of the period (in dollars per share)	$ 11.55
Granted (in dollars per share)	29.28
Exercised (in dollars per share)	4.53
Cancelled/Forfeited (in dollars per share)	15.79
Balance at end of the period (in dollars per share)	12.51		$ 11.55
Exercisable at the end of the period (in dollars per share)	8.12
Vested and expected to vest at the end of the period (in dollars per share)	$ 12.08
Weighted-Average Remaining Contractual Life
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2	7 years 18 days		7 years 6 months 22 days
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2	7 years 18 days		7 years 6 months 22 days
Exercisable at the end of the period	6 years 8 months 27 days
Vested and expected to vest at the end of the period	6 years 11 months 27 days
Aggregate Intrinsic Value
Outstanding at the beginning of the period	$ 120,595
Outstanding at the end of the period	79,630		$ 120,595
Exercisable at the end of the period	79,156
Vested and expected to vest at the end of the period	$ 77,076
Closing stock price (in dollars per share)	$ 28.06
Additional information
Weighted average grant date fair value (in dollars per share)	$ 12.55	$ 20.79
Total intrinsic value of options exercised	$ 16,706	$ 33,190
Total estimated grant date fair value of options vested	$ 8,700
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%

Stockholder's Equity and Stoc37

Stockholder's Equity and Stock Based Compensation (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Additional information
Closing stock price (in dollars per share)	$ 28.06		$ 28.06
Minimum
Valuation assumptions
Expected term			6 months	6 months
Maximum
Valuation assumptions
Expected term				9 months
Employee Stock Purchase Plan
Additional information
Average purchase price of shares issued (in dollars per share)	$ 23.87		$ 23.87
Issuance of common stock under employee stock purchase plan			100
Employee Stock Purchase Plan | Minimum
Valuation assumptions
Risk-free interest rate (as a percent)			0.05%	0.08%
Expected volatility (as a percent)			39.00%	41.00%
Expected dividend rate (as a percent)			0.00%	0.00%
Employee Stock Purchase Plan | Maximum
Valuation assumptions
Risk-free interest rate (as a percent)			0.07%	0.11%
Expected volatility (as a percent)			43.00%	42.00%
Estimate of fair value of options member | Minimum
Valuation assumptions
Expected term	6 years	6 years	6 years	6 years
Risk-free interest rate (as a percent)	1.70%	1.90%	1.70%	1.84%
Expected volatility (as a percent)	44.80%	49.00%	44.80%	49.00%
Expected dividend rate (as a percent)	0.00%	0.00%	0.00%	0.00%
Estimate of fair value of options member | Maximum
Valuation assumptions
Risk-free interest rate (as a percent)	0.00%	1.97%	0.00%	1.97%
Expected volatility (as a percent)	0.00%	55.00%	0.00%	56.00%
Stock options to purchase common stock
Additional information
Closing stock price (in dollars per share)	$ 28.06		$ 28.06
RSUs
Number of RSUs
Balance at the beginning of the period (in shares)			2,360
RSUs Granted (in shares)			1,256
RSUs Vested (in shares)			(299)
RSUs Cancelled/Forfeited (in shares)			(367)
Balance at the end of the period (in shares)	2,950		2,950
Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per share)			$ 33.30
RSUs Granted (in dollars per share)			33.65	$ 38.29
RSUs Vested (in dollars per share)			36.94
RSUs Cancelled/Forfeited (in dollars per share)			32.39
Balance at the end of the period (in dollars per share)	$ 33.19		$ 33.19
Aggregate Intrinsic Value
Balance at the beginning of the period (in dollars)			$ 77,207
Balance at the end of the period (in dollars)	$ 82,763		$ 82,763
Additional information
RSUs Granted (in dollars per share)			$ 33.65	$ 38.29
Total intrinsic value of vested RSUs			$ 8,472	$ 4,237
Closing stock price (in dollars per share)	$ 28.06		$ 28.06
RSUs | Minimum
Aggregate Intrinsic Value
Vesting period			3 years
RSUs | Maximum
Aggregate Intrinsic Value
Vesting period			4 years

Stockholder's Equity and Stoc38

Stockholder's Equity and Stock Based Compensation (Details2) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2015USD ($)item$ / sharesshares	Jun. 30, 2014
Aggregate Intrinsic Value
Closing stock price (in dollars per share)	$ 28.06
Minimum
Valuation assumptions
Expected term	6 months	6 months
Maximum
Valuation assumptions
Expected term		9 months
MSU's | Executive Officers
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) | shares	240
Cancelled/Forfeited (in shares) | shares	(15)
Balance at the end of the period (in shares) | shares	225
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
Weighted average remaining vesting period (in years)
ShareBasedCompensationArrangementByShareBasedPaymentAwardAwardVestingPeriod1	1 year 7 months 17 days
ShareBasedCompensationArrangementByShareBasedPaymentAwardAwardVestingPeriod1	1 year 7 months 17 days
Aggregate Intrinsic Value
Balance at the end of the period (in dollars) | $	$ 6,308
Additional information
Number of separate tranches | item	3
Vesting period	1 year 7 months 17 days
Closing stock price (in dollars per share)	$ 28.06
MSU's | 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
MSU's | Executive Officers | Tranche two
Additional information
Percent of shares in tranche that can be received	100.00%
Grant date fair value per share	$ 8.68
MSU's | 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
MSU's | Executive Officers | Minimum
Additional information
Vesting period for each tranche (in years)	1 year
MSU's | Executive Officers | Maximum
Additional information
Vesting period for each tranche (in years)	3 years

Stockholder's Equity and Stoc39

Stockholder's Equity and Stock Based Compensation (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Stock Compensation Expense
Total stock-based compensation expense	$ 9,726	$ 5,911	$ 19,007	$ 10,918
Capitalized stock-based compensation expense			700
Total unrecognized compensation cost related to unvested awards not yet recognized
Unrecognized Expense	85,399		$ 85,399
Expected Recognition Period			2 years 8 months 23 days
Employee Stock Purchase Plan
Stock Compensation Expense
Total stock-based compensation expense			$ 800
Total unrecognized compensation cost related to unvested awards not yet recognized
Unrecognized Expense	202		$ 202
Expected Recognition Period			1 month 17 days
Stock options to purchase common stock
Stock Compensation Expense
Total stock-based compensation expense			$ 4,300
Total unrecognized compensation cost related to unvested awards not yet recognized
Unrecognized Expense	14,547		$ 14,547
Expected Recognition Period			1 year 9 months 7 days
RSUs
Stock Compensation Expense
Total stock-based compensation expense			$ 12,600
Total unrecognized compensation cost related to unvested awards not yet recognized
Unrecognized Expense	70,650		$ 70,650
Expected Recognition Period			2 years 11 months 5 days
MSU's
Stock Compensation Expense
Total stock-based compensation expense			$ 2,000
Cost of subscription and support revenue
Stock Compensation Expense
Total stock-based compensation expense	626	419	1,245	803
Cost of professional services and other revenue
Stock Compensation Expense
Total stock-based compensation expense	1,100	610	2,037	1,057
Research and development
Stock Compensation Expense
Total stock-based compensation expense	1,639	1,173	3,955	2,252
Sales and marketing
Stock Compensation Expense
Total stock-based compensation expense	3,404	2,095	6,206	3,874
General and administrative
Stock Compensation Expense
Total stock-based compensation expense	$ 2,957	$ 1,614	5,564	$ 2,932
Internal use software projects
Stock Compensation Expense
Capitalized stock-based compensation expense			700
Internal use software projects | RSUs
Stock Compensation Expense
Stock-based compensation from performance based restricted stock units			$ 1,000

Net Loss per Share (Details)

Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator:
Net loss attributable to Marketo	$ (17,950)	$ (13,112)	$ (36,108)	$ (25,621)
Denominator:
Weighted-average common shares outstanding	42,333	40,494	42,075	40,134
Less: Weighted-average unvested common shares subject to repurchase or forfeiture and shares held in escrow	(170)	(223)	(186)	(236)
Weighted-average shares used in computing net loss per share of common stock, basic and diluted	42,163	40,271	41,889	39,898
Net loss per share of common stock, basic and diluted (in dollars per share)	$ (0.43)	$ (0.33)	$ (0.86)	$ (0.64)
Potentially dilutive securities that were excluded from the diluted per share
Potentially dilutive securities excluded from the diluted per share calculation			7,828	7,823
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			4,498	5,974
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			110	123
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	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			23	76
RSUs
Potentially dilutive securities that were excluded from the diluted per share
Potentially dilutive securities excluded from the diluted per share calculation			3,175	1,513

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2014	Mar. 31, 2014	Jun. 30, 2015	Jun. 30, 2014
Provision for income taxes
Provision (benefit) for income taxes	$ 100		$ (16)		$ 312	$ (30)
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 Infor42

Segment Information and Information about Geographic Areas (Details) $ in Thousands	Jun. 30, 2015USD ($)customer	Dec. 31, 2014USD ($)customer	Jun. 30, 2015USD ($)customer	Jun. 30, 2014USD ($)customer	Jun. 30, 2015USD ($)customeritem	Jun. 30, 2014USD ($)customer
Revenue, customers and long-lived assets by geographic area
Revenue			$ 50,680	$ 36,030	$ 96,680	$ 68,322
Long-lived assets	$ 20,661	$ 16,832	$ 20,661		$ 20,661
Number of business segments | item					1
Number of Customers accounting for more than ten percent of total revenue member
Revenue, customers and long-lived assets by geographic area
Number of Customers | customer			0	0	0	0
Number of Customers accounting for more than twelve percent of accounts receivable member
Revenue, customers and long-lived assets by geographic area
Number of Customers | customer	1
Number of Customers accounting for more than ten percent of accounts receivable member
Revenue, customers and long-lived assets by geographic area
Number of Customers | customer		0
United States
Revenue, customers and long-lived assets by geographic area
Revenue			$ 43,144	$ 30,424	$ 82,409	$ 57,774
Long-lived assets	$ 18,885	$ 16,265	18,885		18,885
EMEA
Revenue, customers and long-lived assets by geographic area
Revenue			3,380	2,849	6,532	5,504
Long-lived assets	298	209	298		298
Other
Revenue, customers and long-lived assets by geographic area
Revenue			4,156	$ 2,757	7,739	$ 5,044
Long-lived assets	$ 1,478	$ 358	$ 1,478		$ 1,478