Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document And Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | CarGurus, Inc. | |
Trading Symbol | CARG | |
Entity Central Index Key | 1,494,259 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Class A Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 87,234,652 | |
Class B Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 20,702,084 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 62,003 | $ 87,709 |
Investments | 80,000 | 50,000 |
Accounts receivable, net of allowance for doubtful accounts of $690 and $494, respectively | 12,197 | 12,577 |
Prepaid expenses, prepaid income taxes and other current assets | 7,303 | 6,918 |
Total current assets | 161,503 | 157,204 |
Property and equipment, net | 16,175 | 16,563 |
Restricted cash | 1,870 | 1,843 |
Deferred tax assets | 2,835 | 825 |
Other long–term assets | 155 | 159 |
Total assets | 182,538 | 176,594 |
Current liabilities | ||
Accounts payable | 23,266 | 23,908 |
Accrued expenses, accrued income taxes and other current liabilities | 9,672 | 13,588 |
Deferred revenue | 7,096 | 4,305 |
Deferred rent | 1,185 | 1,165 |
Total current liabilities | 41,219 | 42,966 |
Deferred rent, net of current portion | 5,434 | 5,648 |
Other non–current liabilities | 1,090 | 955 |
Total liabilities | 47,743 | 49,569 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity: | ||
Additional paid-in capital | 189,237 | 185,190 |
Accumulated deficit | (54,848) | (58,499) |
Accumulated other comprehensive income | 300 | 228 |
Total stockholders’ equity | 134,795 | 127,025 |
Total liabilities and stockholders’ equity | 182,538 | 176,594 |
Class A Common Stock | ||
Stockholders’ equity: | ||
Common stock | 85 | 78 |
Class B Common Stock | ||
Stockholders’ equity: | ||
Common stock | $ 21 | $ 28 |
Unaudited Condensed Consolidat3
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Allowance for doubtful accounts | $ 690 | $ 494 |
Class A Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 85,426,038 | 77,884,754 |
Common stock, shares outstanding | 85,426,038 | 77,884,754 |
Class B Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 20,702,084 | 28,226,104 |
Common stock, shares outstanding | 20,702,084 | 28,226,104 |
Unaudited Condensed Consolidat4
Unaudited Condensed Consolidated Income Statements - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Income Statement [Abstract] | |||
Revenue | $ 98,701 | $ 67,035 | |
Cost of revenue | [1] | 5,569 | 3,325 |
Gross profit | 93,132 | 63,710 | |
Operating expenses: | |||
Sales and marketing | 71,508 | 49,071 | |
Product, technology, and development | 9,098 | 3,648 | |
General and administrative | 7,871 | 4,059 | |
Depreciation and amortization | 733 | 548 | |
Total operating expenses | 89,210 | 57,326 | |
Income from operations | 3,922 | 6,384 | |
Other income, net | 282 | 164 | |
Income before income taxes | 4,204 | 6,548 | |
Provision for income taxes | 553 | 2,341 | |
Net income | 3,651 | 4,207 | |
Reconciliation of net income to net income attributable to common stockholders: | |||
Net income | 3,651 | 4,207 | |
Net income attributable to participating securities | (2,482) | ||
Net income attributable to common stockholders — basic | 3,651 | 1,725 | |
Net income attributable to participating securities | (2,385) | ||
Net income attributable to common stockholders — diluted | $ 3,651 | $ 1,822 | |
Net income per share attributable to common stockholders: (Note 8) | |||
Basic | $ 0.03 | $ 0.04 | |
Diluted | $ 0.03 | $ 0.04 | |
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders: | |||
Basic | 106,942,799 | 42,081,960 | |
Diluted | 113,341,308 | 46,267,552 | |
[1] | Includes depreciation and amortization expense for the three months ended March 31, 2018 and 2017 of $504 and $122, respectively. |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Income Statements (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Depreciation and amortization expense | $ 504 | $ 122 |
Unaudited Condensed Consolidat6
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 3,651 | $ 4,207 |
Other comprehensive income: | ||
Foreign currency translation adjustment | 72 | 20 |
Comprehensive income | $ 3,723 | $ 4,227 |
Unaudited Condensed Consolidat7
Unaudited Condensed Consolidated Statements of Stockholders' Equity - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands | Total | Class A Common Stock | Class B Common Stock | Common StockClass A Common Stock | Common StockClass B Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
Beginning balance at Dec. 31, 2017 | $ 127,025 | $ 78 | $ 28 | $ 185,190 | $ 228 | $ (58,499) | ||
Beginning balance, Shares at Dec. 31, 2017 | 77,884,754 | 28,226,104 | 77,884,754 | 28,226,104 | ||||
Net income | 3,651 | 3,651 | ||||||
Stock option exercises | 80 | 80 | ||||||
Stock option exercises, shares | 6,574 | 10,690 | ||||||
Stock–based compensation expense | 3,967 | 3,967 | ||||||
Conversion of common stock, value issued | $ 7 | |||||||
Conversion of common stock, shares issued | 7,534,710 | |||||||
Conversion of common stock, shares converted | (7,534,710) | |||||||
Conversion of common stock, value | $ (7) | |||||||
Foreign currency translation adjustment | 72 | 72 | ||||||
Ending balance at Mar. 31, 2018 | $ 134,795 | $ 85 | $ 21 | $ 189,237 | $ 300 | $ (54,848) | ||
Ending balance, Shares at Mar. 31, 2018 | 85,426,038 | 20,702,084 | 85,426,038 | 20,702,084 |
Unaudited Condensed Consolidat8
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities | ||
Net income | $ 3,651 | $ 4,207 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,237 | 670 |
Unrealized currency loss on foreign denominated transactions | 53 | |
Deferred taxes | (2,010) | (25) |
Provision for doubtful accounts | 377 | 159 |
Stock-based compensation expense | 3,818 | 76 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 7 | (1,027) |
Prepaid expenses, prepaid income taxes, and other assets | (507) | 1,597 |
Accounts payable | 649 | 44 |
Accrued expenses, accrued income taxes, and other current liabilities | (3,651) | (1,286) |
Deferred revenue | 2,811 | 1,034 |
Deferred rent | (215) | (270) |
Other non-current liabilities | 154 | 66 |
Net cash provided by operating activities | 6,374 | 5,245 |
Investing Activities | ||
Purchases of property and equipment | (434) | (159) |
Capitalization of website development costs | (581) | (562) |
Investments in certificates of deposit | (60,000) | (30,000) |
Maturities of certificates of deposit | 30,000 | 26,774 |
Net cash used in investing activities | (31,015) | (3,947) |
Financing Activities | ||
Proceeds from exercise of stock options | 80 | 109 |
Payment of initial public offering costs | (1,142) | |
Net cash (used in) provided by financing activities | (1,062) | 109 |
Impact of foreign currency on cash, cash equivalents, and restricted cash | 24 | 26 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (25,679) | 1,433 |
Cash, cash equivalents, and restricted cash at beginning of period | 89,552 | 31,520 |
Cash, cash equivalents, and restricted cash at end of period | 63,873 | 32,953 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 5 | 47 |
Cash paid for interest | 5 | 6 |
Supplemental disclosure of non-cash investing activities: | ||
Unpaid purchases of property and equipment | 188 | $ 1,176 |
Capitalized stockholders' compensation in website development costs | $ 149 |
Organization and Business Descr
Organization and Business Description | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization and Business Description | 1. Organization and Business Description CarGurus, Inc. (the “Company”), is a global, online automotive marketplace connecting buyers and sellers of new and used cars. Using proprietary technology, search algorithms, and innovative data analytics, the Company provides information and analysis that create a differentiated automotive search experience for consumers. The Company’s marketplace empowers users worldwide with unbiased third-party validation on pricing and dealer reputation, as well as other useful information that aids them in finding “Great Deals from Top-Rated Dealers.” The Company is headquartered in Cambridge, Massachusetts and was incorporated in the State of Delaware on June 26, 2015. The Company operates principally in the United States and has also launched marketplaces in Canada, the United Kingdom, Germany, and Italy. The Company has wholly owned subsidiaries in the United States, Canada, Ireland, and the United Kingdom. The Company is subject to a number of risks and uncertainties common to companies in its and similar industries and stages of development including, but not limited to, rapid technological changes, competition from substitute products and services from larger companies, management of international activities, protection of proprietary rights, patent litigation, and dependence on key individuals. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying interim condensed consolidated financial statements (the “Unaudited Condensed Consolidated Financial Statements”) are unaudited. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the on March 1, 2018 (the “2017 Annual Report”). The Unaudited Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The Unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2018 and December 31, 2017, results of operations for the three months ended March 31, 2018 and 2017, and cash flows for the three months ended March 31, 2018 and 2017. The accompanying Unaudited Condensed Consolidated Financial Statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the Unaudited Condensed Consolidated Financial Statements there have been no material changes in the Company's significant accounting policies from those that were disclosed in the 2017 Annual Report. Principles of Consolidation The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of CarGurus, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company prepares its Unaudited Condensed Consolidated Financial Statements and related disclosures in conformity with GAAP. Subsequent Event Considerations The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. The Company has evaluated all subsequent events and determined that there are no material recognized or unrecognized subsequent events requiring disclosure, other than those disclosed in this Quarterly Report on Form 10-Q. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates relied upon in preparing these Unaudited Condensed Consolidated Financial Statements Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. Emerging Growth Company Status The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. The Company may take advantage of these exemptions until the Company is no longer an emerging growth company. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, its financial statements may not be comparable to companies that comply with public company effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of the IPO or such earlier time that it is no longer an emerging growth company. The Company would cease to be an emerging growth company if it has more than $1.07 billion in annual revenue, has more than $700.0 million in market value of its stock held by non‑affiliates (and it has been a public company for at least 12 months, and has filed one Annual Report on Form 10‑K), or it issues more than $1.0 billion of non‑convertible debt securities over a three‑year period. Concentration of Credit Risk The Company has no significant off‑balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, investments, and trade accounts receivable. The Company maintains its cash, cash equivalents, and investments principally with accredited financial institutions of high credit standing. Although the Company deposits its cash and investments with multiple financial institutions, its deposits, at times, may exceed federally insured limits. Credit risk with respect to accounts receivable is dispersed due to the large number of customers. The Company routinely assesses the creditworthiness of its customers. The Company generally has not experienced any material losses related to receivables from individual customers, or groups of customers. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable. For the three months ended March 31, 2018 and the year ended December 31, 2017, no individual customer accounted for more than 10% of total revenue. As of March 31, 2018, two customers accounted for 23% and 10% of net accounts receivable, respectively. As of December 31, 2017, two customers accounted for 29% and 17% of net accounts receivable, respectively. No other individual customer accounted for more than 10% of net accounts receivable at March 31, 2018 or December 31, 2017. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company on or prior to the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers expects to adopt the standard using the modified retrospective method. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date The Company has developed an implementation plan to adopt this new guidance. As part of this plan, the Company is currently assessing the impact of the new guidance on its results of operations. Based on the Company’s procedures performed to date, nothing has come to its attention that would indicate that the adoption of ASU 2014-09 will have a material impact on its revenue recognition; however, further analysis is required and the Company will continue to evaluate the impact that this guidance will have on its financial statements and related disclosures throughout 2018. While the Company is still evaluating the impact that this guidance will have on its financial statements and related disclosures, the Company’s preliminary assessment is that there will be an impact relating to the accounting for costs to acquire a contract; however, the Company has yet to determine if the impact will be material. Under the standard, the Company will be required to capitalize certain costs, primarily commission expense to sales representatives, on its consolidated balance sheet and amortize such costs over the period of performance for the underlying customer contracts. The Company is still evaluating the impact of capitalizing costs to execute a contract. Other Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 , Leases (Topic 842) |
Fair Value of Financial Instrum
Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments | 3. Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments ASC 820, Fair Value Measurements and Disclosures ASC 820 identifies fair value as the exchange price, or exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: Level 1 — Quoted unadjusted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all observable inputs and significant value drivers are observable in active markets. Level 3 — Model-derived valuations in which one or more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company. The valuation techniques that may be used to measure fair value are as follows: Market Approach — Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Income Approach — Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option pricing models, and excess earnings method. Cost Approach — Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). The following tables present, for each of the fair value levels, the Company’s assets that are measured at fair value on a recurring basis at March 31, 2018 and at December 31, 2017: At March 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) Significant Other Observable Inputs (Level 2 Inputs) Significant Unobservable Inputs (Level 3 Inputs) Total Assets: Money market funds $ 30,929 $ — $ — $ 30,929 Investments: Certificates of deposit — 80,000 — 80,000 Total $ 30,929 $ 80,000 $ — $ 110,929 At December 31, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) Significant Other Observable Inputs (Level 2 Inputs) Significant Unobservable Inputs (Level 3 Inputs) Total Assets: Money market funds $ 60,709 $ — $ — $ 60,709 Investments: Certificates of deposit — 50,000 — 50,000 Total $ 60,709 $ 50,000 $ — $ 110,709 Certificates of deposit at March 31, 2018 and December 31, 2017 had maturity dates of less than twelve months. The Company measures eligible assets and liabilities at fair value with changes in value recognized in earnings. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Company did not elect to remeasure any of its existing financial assets or liabilities, and did not elect the fair value option for any financial assets and liabilities transacted in the three months ended March 31, 2018 or the year ended December 31, 2017. The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Investments not classified as cash equivalents with maturities less than one year from the balance sheet date are classified as short-term investments, while investments with maturities in excess of one year from the balance sheet date are classified as long-term investments. Management determines the appropriate classification of investments at the time of purchase, and re-evaluates such determination at each balance sheet date. Cash and cash equivalents primarily consist of cash on deposit with banks, and amounts held in interest-bearing money market accounts. Cash equivalents are carried at cost, which approximates their fair market value. The following is a summary of cash, cash equivalents, and investments as of March 31, 2018 and December 31, 2017. At March 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents due in 90 days or less $ 62,003 $ — $ — $ 62,003 Investments: Certificates of deposit due in one year or less 80,000 80,000 Total cash, cash equivalents, and investments $ 142,003 $ — $ — $ 142,003 At December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents due in 90 days or less $ 87,709 $ — $ — $ 87,709 Investments: Certificates of deposit due in one year or less 50,000 50,000 Total cash, cash equivalents, and investments $ 137,709 $ — $ — $ 137,709 |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | 4. Property and Equipment, Net Property and equipment consists of the following: At March 31, 2018 At December 31, 2017 Computer equipment $ 2,960 $ 3,532 Capitalized software 174 174 Website development costs 5,625 4,895 Furniture and fixtures 4,412 4,421 Leasehold improvements 10,801 10,797 Construction in progress 75 46 24,047 23,865 Less accumulated depreciation (7,872 ) (7,302 ) Property and equipment, net $ 16,175 $ 16,563 D epreciation and amortization expense on property and equipment for the three months ended March 31, 2018 and 2017 was and $670, respectively. |
Accrued Expenses, Accrued Incom
Accrued Expenses, Accrued Income Taxes and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Accrued Liabilities Current [Abstract] | |
Accrued Expenses, Accrued Income Taxes and Other Current Liabilities | 5. Accrued expenses, accrued income taxes and other current liabilities Accrued expenses, accrued income taxes and other current liabilities consist of the following: At March 31, 2018 At December 31, 2017 Accrued bonuses $ 1,944 $ 7,807 Accrued commissions 2,379 1,581 Other accrued expenses, accrued income taxes and other current liabilities 5,349 4,200 $ 9,672 $ 13,588 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Operating Leases The Company’s lease obligations consist of various leases for office space in: Cambridge, Massachusetts; Detroit, Michigan; and Dublin, Ireland, with various lease terms through January 2024. The terms of the Company’s Massachusetts lease agreements provide for rental payments that increase on an annual basis. The Company recognizes rent expense on a straight-line basis over the lease period. The Company does not have any debt or material capital lease obligations as of March 31, 2018 and all of the Company’s property, equipment, and software have been purchased with cash with the exception of $188 of unpaid property and equipment costs as of March 31, 2018 At March 31, 2018 and December 31, 2017, restricted cash was $1,870 and $1,843, respectively, and primarily related to cash held at a financial institution in an interest‑bearing cash account as collateral for two letters of credit related to the contractual provisions for the Company’s building lease security deposits. As of March 31, 2018 and December 31, 2017, the restricted cash is classified as a long‑term asset. Legal Matters The Company, from time to time, is party to litigation arising in the ordinary course of business. Management does not believe that the outcome of these claims will have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company based on the status of proceedings at this time. Guarantees and Indemnification Obligations In the ordinary course of business, the Company enters into agreements with its customers that are consistent with industry practice with respect to licensing, infringement, indemnification, and other standard provisions. The Company does not, in the ordinary course, agree to indemnification obligations for the Company under its contracts with customers. Based on historical experience and information known at March 31, 2018 and December 31, 2017, the Company has not incurred any costs for guarantees or indemnities. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | 7. Stock-based Compensation For the three months ended March 31, 2018 and 2017, total stock-based compensation expense was $3,818 and $76, respectively. The following two tables show stock compensation expense by award type and where the stock compensation expense is recorded in the Company’s : Three Months Ended March 31, 2018 2017 Options $ 65 $ 76 RSUs 3,753 — Total stock-based compensation expense $ 3,818 $ 76 Three Months Ended March 31, 2018 2017 Cost of revenue $ 89 $ 5 Sales and marketing expense 1,010 38 Product, technology, and development expense 1,661 25 General and administrative expense 1,058 8 Total $ 3,818 $ 76 Excluded from stock-based compensation expense is $149 of capitalized website development costs in the three months ended March 31, 2018. Stock-based compensation expenses related to capitalized website development costs were immaterial in the three months ended March 31, 2017. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 8. Earnings Per Share Net income per share for the three months ended March 31, 2018 is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. The Company computes the weighted-average number of common shares outstanding during the reporting period using the total number of shares of Class A common stock and Class B common stock outstanding as of the last day of the previous year end reporting period plus the weighted-average of any additional shares issued and outstanding during the reporting period. The weighted-average number of common shares outstanding for the three months ended March 31, 2018 also includes restricted stock units (“RSUs”) that vested as of March 31, 2018 but did not settle and become outstanding until after the reporting period pursuant to settlement terms under the grant agreements governing such RSUs. The Company has included these RSUs in the weighted-average number of shares outstanding for the three months ended March 31, 2018 as all vesting conditions had been met and there were no longer circumstances in which those shares would not be issued. Net income per share for the three months ended March 31, 2017 is computed using the two-class method, which includes the weighted-average number of shares of common stock outstanding during the period and other securities that participate in dividends (a participating security). As of March 31, 2017, the Company had convertible preferred stock outstanding. The Company considers the convertible preferred stock to be participating securities because they include rights to participate in dividends with the common stock. On October 16, 2017, in connection with the closing of the IPO, all of the outstanding shares of convertible preferred stock automatically converted into 20,188,226 shares of Class A common stock and 40,376,452 shares of Class B common stock. As a result, there were no shares of preferred stock outstanding at the closing of the IPO and the Company has not issued any new shares of preferred stock since such closing. Under the two-class method, basic net income per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share attributable to common stockholders is computed using the more dilutive of (1) the two-class method or (2) the if-converted method. The Company allocated net income first to preferred stockholders based on dividend rights under the Company’s certificate of incorporation that was in effect prior to the closing of the IPO and then to preferred and common stockholders based on ownership interests. The Company has two classes of common stock authorized: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible into one share of Class A common stock at the option of the holder at any time or automatically upon certain events described in the Company’s , including on either the death or voluntary termination of the Company’s Chief Executive Officer. The Company allocates undistributed earnings attributable to common stock between the common stock classes on a one‑to‑one basis when computing net income per share. As a result, basic and diluted net income per share of Class A common stock and share of Class B common stock are equivalent. During the three months ended March 31 2018, holders of Class B common stock elected to convert 7,534,710 shares of Class B common stock to Class A common stock. Diluted net income per share gives effect to all potentially dilutive securities. Potential dilutive securities for the three months ended March 31, 2018 and 2017 consist of shares of common stock issuable upon the exercise of stock options and shares of common stock issuable upon the vesting of RSUs. Potential dilutive securities for the three months ended March 31, 2017 also included shares of common stock issuable upon the conversion of the outstanding preferred stock. The dilutive effect of these common stock equivalents is reflected in diluted earnings per share by application of the treasury stock method. For the three months ended March 31, 2018, dilutive net income per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the period plus the dilutive impact of stock options and shares of common stock issuable upon the vesting of RSUs. F or the three months ended March 31, 2017, the two‑class method was used in the computation of diluted net income per share, which was equally as dilutive as the if-converted method. The following table presents a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share: Three Months Ended March 31, 2018 2017 Numerator: Net income $ 3,651 $ 4,207 Net income attributable to participating securities — (2,482 ) Net income attributable to common stockholders — basic $ 3,651 $ 1,725 Net income $ 3,651 $ 4,207 Net income attributable to participating securities — (2,385 ) Net income attributable to common stockholders — diluted $ 3,651 $ 1,822 Denominator: Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — basic 106,942,799 42,081,960 Dilutive effect of share equivalents resulting from stock options 4,772,154 4,185,592 Dilutive effect of share equivalents resulting from unvested restricted stock units 1,626,355 — Weighted-average number of shares of common stock used in computing net income per share — diluted 113,341,308 46,267,552 Net income per share attributable to common stockholders: Basic $ 0.03 $ 0.04 Diluted $ 0.03 $ 0.04 There were no anti-dilutive securities for the three months ended March 31, 2018. The following potentially dilutive common stock equivalents have been excluded from the calculation of diluted weighted-average shares outstanding for the three months ended March 31, 2017, as their effect would have been anti-dilutive for the period presented: Three Months Ended March 31, 2017 Stock options outstanding 1,246,884 Restricted stock units outstanding 1,973,694 Convertible preferred stock — |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The Tax Cuts and Jobs Act (the “TCJA”) was enacted on December 22, 2017. Among other things, the TCJA reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and creates new taxes on certain foreign sourced earnings. The Company is still examining certain aspects of the TCJA and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The Company recorded a provisional amount of $187 of tax expense during the year ended December 31, 2017. The Company recorded an additional $205 of tax expense during the three months ended March 31, 2018 pertaining to a change in the estimated impact of the re-measurement of the Company’s U.S. net deferred tax assets. During the three months ended March 31, 2018, the Company recorded income tax expense of $553, representing an effective tax rate of 13.1%. The effective tax rate for the three months ended March 31, 2018 was lower than the statutory tax rate of 21% principally due to federal and state research and development tax credits and excess stock deductions from the taxable compensation of share-based awards, partially offset by state and local income taxes. During the three months ended March 31, 2017, the Company recorded income tax expense of $2,341, representing an effective tax rate of 35.7%. The effective tax rate for the three months ended March 31, 2017 was higher than the statutory tax rate of 35% principally due to state and local income taxes, partially offset by federal and state research and development tax credits. |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 10. Segment and Geographic Information The Company has two reportable segments, United States and International. Segment information is presented in the same manner as the Company’s chief operating decision maker (“CODM”), reviews the Company’s operating results in assessing performance and allocating resources. The CODM reviews revenue and operating income (loss) for each reportable segment as a proxy for the operating performance of the Company’s United States and International operations. The Company’s Chief Executive Officer is the CODM on behalf of both reportable segments. The United States segment derives revenues from marketplace subscriptions, advertising services, and other revenues from customers within the United States. The International segment derives revenues from marketplace subscriptions, advertising services, and other revenues from customers outside of the United States. A majority of the Company’s operational overhead expenses, including technology and personnel costs, and other general and administrative costs associated with running the Company’s business, are incurred in the United States and are not allocated to the International segment. Assets and costs discretely incurred by reportable segments, including depreciation and amortization, are included in the calculation of reportable segment income (loss) from operations. Segment operating income (loss) does not reflect the transfer pricing adjustments related to the Company’s foreign subsidiaries, which are recorded for statutory reporting purposes. Asset information is assessed and reviewed on a global basis. Information regarding the Company’s operations by segment and geographical area is presented as follows: Three Months Ended March 31, 2018 2017 Segment revenue: United States $ 95,167 $ 65,418 International 3,534 1,617 Total revenue $ 98,701 $ 67,035 Three Months Ended March 31, 2018 2017 Segment income (loss) from operations: United States $ 11,585 $ 12,128 International (7,663 ) (5,744 ) Total income from operations $ 3,922 $ 6,384 As of March 31, 2018 and December 31, 2017, property and equipment held outside the United States was not material. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events As of March 31, 2018, the Company had approximately 945 thousand vested RSUs outstanding. All RSUs granted by the Company prior to the IPO were granted pursuant to grant agreements that provided that the RSUs would not settle and be issued until 180 days after the completion of an IPO. As a result, on April 10, 2018, 180 days after the completion of the IPO, all previously vested RSUs converted into issued and outstanding shares of the Company’s Class A common stock |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim condensed consolidated financial statements (the “Unaudited Condensed Consolidated Financial Statements”) are unaudited. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the on March 1, 2018 (the “2017 Annual Report”). The Unaudited Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The Unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2018 and December 31, 2017, results of operations for the three months ended March 31, 2018 and 2017, and cash flows for the three months ended March 31, 2018 and 2017. The accompanying Unaudited Condensed Consolidated Financial Statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the Unaudited Condensed Consolidated Financial Statements there have been no material changes in the Company's significant accounting policies from those that were disclosed in the 2017 Annual Report. |
Principles of Consolidation | Principles of Consolidation The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of CarGurus, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company prepares its Unaudited Condensed Consolidated Financial Statements and related disclosures in conformity with GAAP. |
Subsequent Event Considerations | Subsequent Event Considerations The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. The Company has evaluated all subsequent events and determined that there are no material recognized or unrecognized subsequent events requiring disclosure, other than those disclosed in this Quarterly Report on Form 10-Q. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates relied upon in preparing these Unaudited Condensed Consolidated Financial Statements Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. |
Emerging Growth Company Status | Emerging Growth Company Status The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. The Company may take advantage of these exemptions until the Company is no longer an emerging growth company. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, its financial statements may not be comparable to companies that comply with public company effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of the IPO or such earlier time that it is no longer an emerging growth company. The Company would cease to be an emerging growth company if it has more than $1.07 billion in annual revenue, has more than $700.0 million in market value of its stock held by non‑affiliates (and it has been a public company for at least 12 months, and has filed one Annual Report on Form 10‑K), or it issues more than $1.0 billion of non‑convertible debt securities over a three‑year period. |
Concentration of Credit Risk | Concentration of Credit Risk The Company has no significant off‑balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, investments, and trade accounts receivable. The Company maintains its cash, cash equivalents, and investments principally with accredited financial institutions of high credit standing. Although the Company deposits its cash and investments with multiple financial institutions, its deposits, at times, may exceed federally insured limits. Credit risk with respect to accounts receivable is dispersed due to the large number of customers. The Company routinely assesses the creditworthiness of its customers. The Company generally has not experienced any material losses related to receivables from individual customers, or groups of customers. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable. For the three months ended March 31, 2018 and the year ended December 31, 2017, no individual customer accounted for more than 10% of total revenue. As of March 31, 2018, two customers accounted for 23% and 10% of net accounts receivable, respectively. As of December 31, 2017, two customers accounted for 29% and 17% of net accounts receivable, respectively. No other individual customer accounted for more than 10% of net accounts receivable at March 31, 2018 or December 31, 2017. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company on or prior to the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers expects to adopt the standard using the modified retrospective method. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date The Company has developed an implementation plan to adopt this new guidance. As part of this plan, the Company is currently assessing the impact of the new guidance on its results of operations. Based on the Company’s procedures performed to date, nothing has come to its attention that would indicate that the adoption of ASU 2014-09 will have a material impact on its revenue recognition; however, further analysis is required and the Company will continue to evaluate the impact that this guidance will have on its financial statements and related disclosures throughout 2018. While the Company is still evaluating the impact that this guidance will have on its financial statements and related disclosures, the Company’s preliminary assessment is that there will be an impact relating to the accounting for costs to acquire a contract; however, the Company has yet to determine if the impact will be material. Under the standard, the Company will be required to capitalize certain costs, primarily commission expense to sales representatives, on its consolidated balance sheet and amortize such costs over the period of performance for the underlying customer contracts. The Company is still evaluating the impact of capitalizing costs to execute a contract. Other Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 , Leases (Topic 842) |
Fair Value Measurement and Disclosures | ASC 820 identifies fair value as the exchange price, or exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: Level 1 — Quoted unadjusted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all observable inputs and significant value drivers are observable in active markets. Level 3 — Model-derived valuations in which one or more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company. The valuation techniques that may be used to measure fair value are as follows: Market Approach — Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Income Approach — Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option pricing models, and excess earnings method. Cost Approach — Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). |
Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments | The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Investments not classified as cash equivalents with maturities less than one year from the balance sheet date are classified as short-term investments, while investments with maturities in excess of one year from the balance sheet date are classified as long-term investments. Management determines the appropriate classification of investments at the time of purchase, and re-evaluates such determination at each balance sheet date. |
Fair Value of Financial Instr21
Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Levels, Assets Measured at Fair Value on Recurring Basis | The following tables present, for each of the fair value levels, the Company’s assets that are measured at fair value on a recurring basis at March 31, 2018 and at December 31, 2017: At March 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) Significant Other Observable Inputs (Level 2 Inputs) Significant Unobservable Inputs (Level 3 Inputs) Total Assets: Money market funds $ 30,929 $ — $ — $ 30,929 Investments: Certificates of deposit — 80,000 — 80,000 Total $ 30,929 $ 80,000 $ — $ 110,929 At December 31, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) Significant Other Observable Inputs (Level 2 Inputs) Significant Unobservable Inputs (Level 3 Inputs) Total Assets: Money market funds $ 60,709 $ — $ — $ 60,709 Investments: Certificates of deposit — 50,000 — 50,000 Total $ 60,709 $ 50,000 $ — $ 110,709 |
Schedule of Cash, Cash Equivalents, and Investments | The following is a summary of cash, cash equivalents, and investments as of March 31, 2018 and December 31, 2017. At March 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents due in 90 days or less $ 62,003 $ — $ — $ 62,003 Investments: Certificates of deposit due in one year or less 80,000 80,000 Total cash, cash equivalents, and investments $ 142,003 $ — $ — $ 142,003 At December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents due in 90 days or less $ 87,709 $ — $ — $ 87,709 Investments: Certificates of deposit due in one year or less 50,000 50,000 Total cash, cash equivalents, and investments $ 137,709 $ — $ — $ 137,709 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consists of the following: At March 31, 2018 At December 31, 2017 Computer equipment $ 2,960 $ 3,532 Capitalized software 174 174 Website development costs 5,625 4,895 Furniture and fixtures 4,412 4,421 Leasehold improvements 10,801 10,797 Construction in progress 75 46 24,047 23,865 Less accumulated depreciation (7,872 ) (7,302 ) Property and equipment, net $ 16,175 $ 16,563 |
Accrued Expenses, Accrued Inc23
Accrued Expenses, Accrued Income Taxes and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accrued Liabilities Current [Abstract] | |
Schedule of Accrued Expenses, Accrued Income Taxes and Other Current Liabilities | Accrued expenses, accrued income taxes and other current liabilities consist of the following: At March 31, 2018 At December 31, 2017 Accrued bonuses $ 1,944 $ 7,807 Accrued commissions 2,379 1,581 Other accrued expenses, accrued income taxes and other current liabilities 5,349 4,200 $ 9,672 $ 13,588 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock-based Compensation Expense by Award Type | Three Months Ended March 31, 2018 2017 Options $ 65 $ 76 RSUs 3,753 — Total stock-based compensation expense $ 3,818 $ 76 |
Summary of Allocation of Stock-based Compensation Expense | Three Months Ended March 31, 2018 2017 Cost of revenue $ 89 $ 5 Sales and marketing expense 1,010 38 Product, technology, and development expense 1,661 25 General and administrative expense 1,058 8 Total $ 3,818 $ 76 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net (Loss) Income Per Share | The following table presents a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share: Three Months Ended March 31, 2018 2017 Numerator: Net income $ 3,651 $ 4,207 Net income attributable to participating securities — (2,482 ) Net income attributable to common stockholders — basic $ 3,651 $ 1,725 Net income $ 3,651 $ 4,207 Net income attributable to participating securities — (2,385 ) Net income attributable to common stockholders — diluted $ 3,651 $ 1,822 Denominator: Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — basic 106,942,799 42,081,960 Dilutive effect of share equivalents resulting from stock options 4,772,154 4,185,592 Dilutive effect of share equivalents resulting from unvested restricted stock units 1,626,355 — Weighted-average number of shares of common stock used in computing net income per share — diluted 113,341,308 46,267,552 Net income per share attributable to common stockholders: Basic $ 0.03 $ 0.04 Diluted $ 0.03 $ 0.04 |
Schedule of Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Weighted-average Shares Outstanding | There were no anti-dilutive securities for the three months ended March 31, 2018. The following potentially dilutive common stock equivalents have been excluded from the calculation of diluted weighted-average shares outstanding for the three months ended March 31, 2017, as their effect would have been anti-dilutive for the period presented: Three Months Ended March 31, 2017 Stock options outstanding 1,246,884 Restricted stock units outstanding 1,973,694 Convertible preferred stock — |
Segment and Geographic Inform26
Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Summary of Operations by Segment and Geographical Area | Information regarding the Company’s operations by segment and geographical area is presented as follows: Three Months Ended March 31, 2018 2017 Segment revenue: United States $ 95,167 $ 65,418 International 3,534 1,617 Total revenue $ 98,701 $ 67,035 Three Months Ended March 31, 2018 2017 Segment income (loss) from operations: United States $ 11,585 $ 12,128 International (7,663 ) (5,744 ) Total income from operations $ 3,922 $ 6,384 |
Organization and Business Des27
Organization and Business Description - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
State of incorporation | Delaware |
Date of incorporation | Jun. 26, 2015 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Emerging growth company description | The Company would cease to be an emerging growth company if it has more than $1.07 billion in annual revenue, has more than $700.0 million in market value of its stock held by nonaffiliates (and it has been a public company for at least 12 months, and has filed one Annual Report on Form 10K), or it issues more than $1.0 billion of nonconvertible debt securities over a threeyear period | |
Debt security maturity period | 3 years | |
Description of significant off-balance sheet risk | The Company has no significant offbalance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. | |
Sales Revenue, Net | Concentration of Credit Risk | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration of credit risk, percentage | 10.00% | 10.00% |
Net Accounts Receivable | Concentration of Credit Risk | Customer One | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration of credit risk, percentage | 23.00% | 29.00% |
Net Accounts Receivable | Concentration of Credit Risk | Customer Two | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Concentration of credit risk, percentage | 10.00% | 17.00% |
Minimum | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Annual gross revenue | $ 1,070,000,000 | |
Market value of common stock held by non-affiliates | 700,000,000 | |
Non convertible debt securities | $ 1,000,000,000 |
Fair Value of Financial Instr29
Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments - Schedule of Fair Value Levels, Assets Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 110,929 | $ 110,709 |
Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 30,929 | 60,709 |
Significant Other Observable Inputs (Level 2 Inputs) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 80,000 | 50,000 |
Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents: | 30,929 | 60,709 |
Money Market Funds | Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents: | 30,929 | 60,709 |
Certificates of Deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments: | 80,000 | 50,000 |
Certificates of Deposit | Significant Other Observable Inputs (Level 2 Inputs) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments: | $ 80,000 | $ 50,000 |
Fair Value of Financial Instr30
Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments - Additional Information (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | ||
Maturity period of certificates of deposit | 12 months | 12 months |
Maturity of certificates of deposit, description | Certificates of deposit at March 31, 2018 and December 31, 2017 had maturity dates of less than twelve months. |
Fair Value of Financial Instr31
Fair Value of Financial Instruments Including Cash, Cash Equivalents and Investments - Schedule of Cash, Cash Equivalents, and Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Amortized Cost | ||
Cash And Cash Equivalents [Line Items] | ||
Cash and cash equivalents due in 90 days or less | $ 62,003 | $ 87,709 |
Certificates of deposit due in one year or less | 80,000 | 50,000 |
Total cash, cash equivalents, and investments | 142,003 | 137,709 |
Estimated Fair Value | ||
Cash And Cash Equivalents [Line Items] | ||
Cash and cash equivalents due in 90 days or less | 62,003 | 87,709 |
Certificates of deposit due in one year or less | 80,000 | 50,000 |
Total cash, cash equivalents, and investments | $ 142,003 | $ 137,709 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 24,047 | $ 23,865 |
Less accumulated depreciation | (7,872) | (7,302) |
Property and equipment, net | 16,175 | 16,563 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 2,960 | 3,532 |
Website and Software Development Costs | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 174 | 174 |
Website Development Costs | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 5,625 | 4,895 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 4,412 | 4,421 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 10,801 | 10,797 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 75 | $ 46 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Property Plant And Equipment [Abstract] | ||
Depreciation and amortization | $ 1,237 | $ 670 |
Accrued Expenses, Accrued Inc34
Accrued Expenses, Accrued Income Taxes and Other Current Liabilities - Schedule of Accrued Expenses, Accrued Income Taxes and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities Current [Abstract] | ||
Accrued bonuses | $ 1,944 | $ 7,807 |
Accrued commissions | 2,379 | 1,581 |
Other accrued expenses, accrued income taxes and other current liabilities | 5,349 | 4,200 |
Accrued expenses, accrued income taxes and other current liabilities, Total | $ 9,672 | $ 13,588 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Unpaid purchases of property and equipment | $ 188,000 | $ 1,176,000 | |
Restricted cash | 1,870,000 | $ 1,843,000 | |
Cost for guarantees and indemnities | $ 0 | $ 0 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Total stock-based compensation expense | $ 3,818 | $ 76 |
Capitalized website development costs excluded from stock-based compensation expense | $ 149 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock-based Compensation Expense by Award Type (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 3,818 | $ 76 |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 65 | $ 76 |
RSUs | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 3,753 |
Stock-based Compensation - Su38
Stock-based Compensation - Summary of Allocation of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 3,818 | $ 76 |
Cost of Revenue | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 89 | 5 |
Sales and Marketing Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 1,010 | 38 |
Product, Technology, and Development Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 1,661 | 25 |
General and Administrative Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 1,058 | $ 8 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) | Oct. 16, 2017shares | Mar. 31, 2018Voteshares |
Earnings Per Share Basic [Line Items] | ||
Convertible preferred stock, terms of conversion | On October 16, 2017, in connection with the closing of the IPO, all of the outstanding shares of convertible preferred stock automatically converted into 20,188,226 shares of Class A common stock and 40,376,452 shares of Class B common stock. As a result, there were no shares of preferred stock outstanding at the closing of the IPO and the Company has not issued any new shares of preferred stock since such closing | |
Conversion of stock, description | Each share of Class B common stock is convertible into one share of Class A common stock at the option of the holder at any time or automatically upon certain events described in the Company’s amended and restated certificate of incorporation, including on either the death or voluntary termination of the Company’s Chief Executive Officer. | |
Undistributed earnings ratio used to calculate allocation to class of stock | 100.00% | |
Anti-dilutive securities | 0 | |
IPO | ||
Earnings Per Share Basic [Line Items] | ||
Preferred stock, shares outstanding | 0 | |
Class A Common Stock | ||
Earnings Per Share Basic [Line Items] | ||
Right to voting | one vote per share | |
Number of votes entitled to stockholders per share | Vote | 1 | |
Conversion of stock | 7,534,710 | |
Class A Common Stock | IPO | ||
Earnings Per Share Basic [Line Items] | ||
Conversion of preferred stock | 20,188,226 | |
Class B Common Stock | ||
Earnings Per Share Basic [Line Items] | ||
Conversion of preferred stock | 40,376,452 | |
Right to voting | ten votes per share | |
Number of votes entitled to stockholders per share | Vote | 10 | |
Class of share converted to another class | one share of Class A common stock | |
Conversion of stock | 1 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator: | ||
Net income | $ 3,651 | $ 4,207 |
Net income attributable to participating securities | (2,482) | |
Net income attributable to common stockholders — basic | 3,651 | 1,725 |
Net income attributable to participating securities | (2,385) | |
Net income attributable to common stockholders — diluted | $ 3,651 | $ 1,822 |
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders: | ||
Weighted-average number of shares of common stock used in computing net income per share attributable to common stockholders — basic | 106,942,799 | 42,081,960 |
Dilutive effect of share equivalents resulting from stock options | 4,772,154 | 4,185,592 |
Dilutive effect of share equivalents resulting from unvested restricted stock units | 1,626,355 | |
Weighted-average number of shares of common stock used in computing net income per share — diluted | 113,341,308 | 46,267,552 |
Net income per share attributable to common stockholders: | ||
Basic | $ 0.03 | $ 0.04 |
Diluted | $ 0.03 | $ 0.04 |
Earnings Per Share - Schedule41
Earnings Per Share - Schedule of Potentially Dilutive Common Stock Equivalents Excluded from Calculation of Diluted Weighted-average Shares Outstanding (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive common stock equivalents excluded from calculation of diluted weighted-average shares outstanding | 0 | |
Stock Options Outstanding | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive common stock equivalents excluded from calculation of diluted weighted-average shares outstanding | 1,246,884 | |
Restricted Stock Units Outstanding | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive common stock equivalents excluded from calculation of diluted weighted-average shares outstanding | 1,973,694 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21.00% | 35.00% | |
Provisional amount tax expense | $ 187 | ||
Additional tax expense recognized | $ 205 | ||
Provision for income taxes | $ 553 | $ 2,341 | |
Effective income tax rate | 13.10% | 35.70% |
Segment and Geographic Inform43
Segment and Geographic Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment and Geographic Inform44
Segment and Geographic Information - Summary of Operations by Segment and Geographical Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment revenue: | ||
Revenue | $ 98,701 | $ 67,035 |
Segment income (loss) from operations: | ||
Total income from operations | 3,922 | 6,384 |
United States | ||
Segment revenue: | ||
Revenue | 95,167 | 65,418 |
Segment income (loss) from operations: | ||
Total income from operations | 11,585 | 12,128 |
International | ||
Segment revenue: | ||
Revenue | 3,534 | 1,617 |
Segment income (loss) from operations: | ||
Total income from operations | $ (7,663) | $ (5,744) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - RSUs | 3 Months Ended |
Mar. 31, 2018shares | |
Subsequent Event [Line Items] | |
Vested RSUs outstanding | 945,000,000 |
RSUs granted prior to IPO, minimum waiting period after IPO for issuance and settlement | 180 days |