Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 03, 2024 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38285 | |
Entity Registrant Name | BANDWIDTH INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 56-2242657 | |
Entity Address, Address Line One | 2230 Bandmate Way | |
Entity Address, City or Town | Raleigh | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 27607 | |
City Area Code | (800) | |
Local Phone Number | 808-5150 | |
Title of 12(b) Security | Class A Common Stock, par value $0.001 per share | |
Trading Symbol | BAND | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001514416 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Class A voting common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 25,049,689 | |
Class B voting common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,958,028 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 105,390 | $ 131,987 |
Marketable securities | 41,839 | 21,488 |
Accounts receivable, net of allowance for doubtful accounts | 89,452 | 78,155 |
Deferred costs | 3,740 | 4,155 |
Prepaid expenses and other current assets | 16,606 | 16,990 |
Total current assets | 257,027 | 252,775 |
Property, plant and equipment, net | 173,824 | 177,864 |
Operating right-of-use asset, net | 156,353 | 157,507 |
Intangible assets, net | 160,511 | 166,914 |
Deferred costs, non-current | 4,333 | 4,586 |
Other long-term assets | 4,911 | 5,530 |
Goodwill | 328,572 | 335,872 |
Total assets | 1,085,531 | 1,101,048 |
Current liabilities: | ||
Accounts payable | 23,407 | 34,208 |
Accrued expenses and other current liabilities | 68,113 | 69,014 |
Current portion of deferred revenue | 7,816 | 8,059 |
Advanced billings | 4,275 | 6,027 |
Operating lease liability, current | 5,089 | 5,463 |
Total current liabilities | 108,700 | 122,771 |
Other liabilities | 371 | 386 |
Operating lease liability, net of current portion | 219,728 | 220,548 |
Deferred revenue, net of current portion | 8,384 | 8,406 |
Deferred tax liability | 31,138 | 33,021 |
Convertible senior notes | 419,011 | 418,526 |
Total liabilities | 787,332 | 803,658 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Preferred stock: $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 410,420 | 391,048 |
Accumulated deficit | (74,123) | (64,890) |
Accumulated other comprehensive loss | (38,125) | (28,794) |
Total stockholders’ equity | 298,199 | 297,390 |
Total liabilities and stockholders’ equity | 1,085,531 | 1,101,048 |
Class A voting common stock | ||
Stockholders’ equity: | ||
Class A and Class B common stock | 25 | 24 |
Class B voting common stock | ||
Stockholders’ equity: | ||
Class A and Class B common stock | $ 2 | $ 2 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A voting common stock | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 25,020,677 | 24,206,140 |
Common stock, shares outstanding (in shares) | 25,020,677 | 24,206,140 |
Class B voting common stock | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 1,958,028 | 1,958,028 |
Common stock, shares outstanding (in shares) | 1,958,028 | 1,958,028 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenue | $ 171,033 | $ 137,844 |
Cost of revenue | 105,549 | 82,191 |
Gross profit | 65,484 | 55,653 |
Operating expenses | ||
Research and development | 28,912 | 25,661 |
Sales and marketing | 29,139 | 25,029 |
General and administrative | 17,849 | 16,719 |
Total operating expenses | 75,900 | 67,409 |
Operating loss | (10,416) | (11,756) |
Other income, net | ||
Net gain on extinguishment of debt | 0 | 12,767 |
Other income (expense), net | 983 | (528) |
Total other income, net | 983 | 12,239 |
(Loss) income before income taxes | (9,433) | 483 |
Income tax benefit | 200 | 3,128 |
Net (loss) income | $ (9,233) | $ 3,611 |
Net (loss) income per share: | ||
Net (loss) income per share, basic (in usd per share) | $ (0.35) | $ 0.14 |
Net (loss) income per share, diluted (in usd per share) | $ (0.35) | $ (0.28) |
Numerator used to compute net (loss) income per share: | ||
Net (loss) income attributable to common stockholders, basic | $ (9,233) | $ 3,611 |
Net (loss) income attributable to common stockholders, diluted | $ (9,233) | $ (8,087) |
Weighted average number of common shares outstanding: | ||
Weighted average number of common shares outstanding, basic (in shares) | 26,493,802 | 25,448,452 |
Weighted average number of common shares outstanding, diluted (in shares) | 26,493,802 | 29,273,258 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (9,233) | $ 3,611 |
Other comprehensive (loss) income | ||
Unrealized gain on marketable securities, net of income taxes | 9 | 72 |
Foreign currency translation, net of income taxes | (9,340) | 7,647 |
Total other comprehensive (loss) income | (9,331) | 7,719 |
Total comprehensive (loss) income | $ (18,564) | $ 11,330 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders’ Equity - USD ($) $ in Thousands | Total | Class A voting common stock | Class B voting common stock | Common stock Class A voting common stock | Common stock Class B voting common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit |
Beginning balance (in shares) at Dec. 31, 2022 | 23,379,000 | 1,965,170 | ||||||
Beginning balance at Dec. 31, 2022 | $ 272,177 | $ 23 | $ 2 | $ 364,913 | $ (44,214) | $ (48,547) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Exercises of vested stock options (in shares) | 22,975 | |||||||
Exercises of vested stock options | 155 | 155 | ||||||
Vesting of restricted stock units (in shares) | 171,950 | |||||||
Vesting of restricted stock units | 1 | $ 1 | ||||||
Equity awards withheld for tax liability (in shares) | (43,325) | |||||||
Equity awards withheld for tax liability | (903) | (903) | ||||||
Unrealized loss on marketable securities | 72 | 72 | ||||||
Foreign currency translation | 7,647 | 7,647 | ||||||
Stock-based compensation | 6,649 | 6,649 | ||||||
Net income (loss) | 3,611 | 3,611 | ||||||
Ending balance (in shares) at Mar. 31, 2023 | 23,530,600 | 1,965,170 | ||||||
Ending balance at Mar. 31, 2023 | 289,409 | $ 24 | $ 2 | 370,814 | (36,495) | (44,936) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Exercises of vested stock options (in shares) | 38,374 | |||||||
Exercises of vested stock options | 259 | 259 | ||||||
Vesting of restricted stock units (in shares) | 58,084 | |||||||
Equity awards withheld for tax liability (in shares) | (2,289) | |||||||
Equity awards withheld for tax liability | (30) | (30) | ||||||
Unrealized loss on marketable securities | 54 | 54 | ||||||
Foreign currency translation | 234 | 234 | ||||||
Stock-based compensation | 5,866 | 5,866 | ||||||
Net income (loss) | (3,890) | (3,890) | ||||||
Ending balance (in shares) at Jun. 30, 2023 | 23,624,769 | 1,965,170 | ||||||
Ending balance at Jun. 30, 2023 | 291,902 | $ 24 | $ 2 | 376,909 | (36,207) | (48,826) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Vesting of restricted stock units (in shares) | 51,132 | |||||||
Equity awards withheld for tax liability (in shares) | (242) | |||||||
Equity awards withheld for tax liability | (3) | (3) | ||||||
Conversion of Class B voting common stock to Class A voting common stock (in shares) | 7,142 | (7,142) | ||||||
Unrealized loss on marketable securities | (129) | (129) | ||||||
Foreign currency translation | (12,760) | (12,760) | ||||||
Stock-based compensation | 6,107 | 6,107 | ||||||
Net income (loss) | (5,130) | (5,130) | ||||||
Ending balance (in shares) at Sep. 30, 2023 | 23,682,801 | 1,958,028 | ||||||
Ending balance at Sep. 30, 2023 | 279,987 | $ 24 | $ 2 | 383,013 | (49,096) | (53,956) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Vesting of restricted stock units (in shares) | 523,796 | |||||||
Equity awards withheld for tax liability (in shares) | (457) | |||||||
Equity awards withheld for tax liability | (5) | (5) | ||||||
Unrealized loss on marketable securities | (245) | (245) | ||||||
Foreign currency translation | 20,577 | 20,577 | ||||||
Unrealized (loss) gain on employee benefit plan, net | (30) | (30) | ||||||
Stock-based compensation | 8,040 | 8,040 | ||||||
Net income (loss) | (10,934) | (10,934) | ||||||
Ending balance (in shares) at Dec. 31, 2023 | 24,206,140 | 1,958,028 | 24,206,140 | 1,958,028 | ||||
Ending balance at Dec. 31, 2023 | $ 297,390 | $ 24 | $ 2 | 391,048 | (28,794) | (64,890) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Exercises of vested stock options (in shares) | 10,849 | 10,849 | ||||||
Exercises of vested stock options | $ 103 | 103 | ||||||
Vesting of restricted stock units (in shares) | 920,435 | |||||||
Vesting of restricted stock units | 1 | $ 1 | ||||||
Equity awards withheld for tax liability (in shares) | (116,747) | |||||||
Equity awards withheld for tax liability | (2,267) | (2,267) | ||||||
Unrealized loss on marketable securities | 9 | 9 | ||||||
Foreign currency translation | (9,340) | (9,340) | ||||||
Stock-based compensation | 21,536 | 21,536 | ||||||
Net income (loss) | (9,233) | (9,233) | ||||||
Ending balance (in shares) at Mar. 31, 2024 | 25,020,677 | 1,958,028 | 25,020,677 | 1,958,028 | ||||
Ending balance at Mar. 31, 2024 | $ 298,199 | $ 25 | $ 2 | $ 410,420 | $ (38,125) | $ (74,123) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | |
Cash flows from operating activities | ||||
Net (loss) income | $ (9,233) | $ (10,934) | $ (3,890) | $ 3,611 |
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities | ||||
Depreciation and amortization | 12,414 | 8,894 | ||
Non-cash reduction to the right-of-use asset | 1,141 | 1,601 | ||
Amortization of debt discount and issuance costs | 525 | 1,011 | ||
Stock-based compensation | 12,339 | 7,378 | ||
Deferred taxes and other | (1,373) | (4,683) | ||
Net gain on extinguishment of debt | 0 | (12,767) | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable, net of allowances | (11,464) | 11,335 | ||
Prepaid expenses and other assets | 1,230 | (1,509) | ||
Accounts payable | (8,640) | (10,707) | ||
Accrued expenses and other liabilities | 6,707 | (8,619) | ||
Operating right-of-use liability | (1,181) | (1,899) | ||
Net cash provided by (used in) operating activities | 2,465 | (6,354) | ||
Cash flows from investing activities | ||||
Purchase of property, plant and equipment | (3,316) | (2,889) | ||
Capitalized software development costs | (3,556) | (1,657) | ||
Purchase of marketable securities | (21,764) | (10,849) | ||
Proceeds from sales and maturities of marketable securities | 1,422 | 43,938 | ||
Proceeds from sale of business | 208 | 418 | ||
Net cash (used in) provided by investing activities | (27,006) | 28,961 | ||
Cash flows from financing activities | ||||
Payments on finance leases | (17) | (55) | ||
Net cash paid for debt extinguishment | 0 | (51,146) | ||
Proceeds from exercises of stock options | 103 | 155 | ||
Value of equity awards withheld for tax liabilities | (1,893) | (1,016) | ||
Net cash used in financing activities | (1,807) | (52,062) | ||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (394) | 308 | ||
Net decrease in cash, cash equivalents, and restricted cash | (26,742) | (29,147) | ||
Cash, cash equivalents, and restricted cash, beginning of period | 132,307 | $ 85,475 | 114,622 | |
Cash, cash equivalents, and restricted cash, end of period | 105,565 | 132,307 | 85,475 | |
Reconciliation of cash, cash equivalents, and restricted cash, end of period | ||||
Cash and cash equivalents | 105,390 | 131,987 | 85,298 | |
Restricted cash included in prepaid expenses and other current assets | 175 | 177 | ||
Total cash, cash equivalents, and restricted cash, end of period | 105,565 | $ 132,307 | 85,475 | |
Supplemental disclosure of cash flow information | ||||
Cash received from interest | (1,113) | (334) | ||
Cash paid (refunded) for taxes, net | 440 | (553) | ||
Supplemental disclosure of noncash investing and financing activities | ||||
Purchase of property, plant and equipment, accrued but not paid | 1,069 | 1,348 | ||
Purchase of property and equipment through lease incentive | $ 0 | $ 2,155 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business Bandwidth Inc. (together with its subsidiaries, “Bandwidth” or the “Company”) was founded in July 2000 and incorporated in Delaware on March 29, 2001. The Company’s headquarters are located in Raleigh, North Carolina. The Company is a global cloud-based, software-powered communications platform-as-a-service (“CPaaS”) provider that enables enterprises to create, scale and operate voice or messaging communications services across any mobile application or connected device. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 28, 2024. The condensed consolidated balance sheet as of December 31, 2023, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by GAAP on an annual reporting basis. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive (loss) income and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2024 or any future period. Principles of Consolidation The condensed consolidated financial statements include the accounts of Bandwidth Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the amounts reported in these financial statements and accompanying notes. These estimates in the condensed consolidated financial statements include, but are not limited to, allowance for doubtful accounts, reserve for expected credit losses, reserve for sales credits, recoverability of long lived and intangible assets, fair value of acquired intangible assets and goodwill, discount rates used in the valuation of right-of-use assets and lease liabilities, the fair value of the liability of the Company’s Convertible Notes (as defined herein), estimated period of benefit, valuation allowances on deferred tax assets, certain accrued expenses and contingencies, economic and demographic actuarial assumptions related to pension and other postretirement benefit costs and liabilities. Although the Company believes that the estimates it uses are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. Marketable Securities The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. The Company may sell these securities at any time for use in current operations even if they have not yet reached maturity. As a result, the Company classifies investments with maturities greater than 90 days as marketable securities in the accompanying condensed consolidated balance sheets. The Company evaluates its investments to assess whether the amortized cost basis is in excess of estimated fair value and determines what amount of that difference, if any, is caused by expected credit losses. Allowances for credit losses are recognized as a charge in other income, net on the condensed consolidated statements of operations, and any remaining unrealized losses are included in accumulated other comprehensive loss on the condensed consolidated balance sheets. Due to the nature and investment grade of the Company’s marketable securities, there were no credit losses recorded for the three months ended March 31, 2024. There have been no impairment charges for any unrealized losses during the period. Accounts Receivable and Current Expected Credit Losses Accounts receivable are stated at realizable value, net of allowances, which includes an allowance for doubtful accounts and a reserve for expected credit losses. The allowance for doubtful accounts is based on management’s assessment of the collectability of its customer accounts. The Company regularly reviews the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, current economic trends, and reasonable and supportable forecasts about the future. Relevant risk characteristics include customer size and historical loss patterns. Management has evaluated the expected credit losses related to trade accounts receivable and determined that an allowance of approximately $2.5 million and $1.1 million for uncollectible accounts and customer balances that are disputed was required as of March 31, 2024 and December 31, 2023, respectively. Refer to Note 4, “Financial Statement Components” to these condensed consolidated financial statements, for a rollforward of the components of the allowances for the three months ended March 31, 2024 and 2023. The Company includes unbilled receivables in its accounts receivable balance. Generally, these receivables represent earned revenue from services provided to customers, which will be billed in the next billing cycle. All amounts are considered collectible and billable. As of March 31, 2024 and December 31, 2023, unbilled receivables were $47.9 million and $43.6 million, respectively. Concentration of Credit Risk Financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and trade accounts receivable. The Company maintains its cash, cash equivalents and marketable securities with high credit-quality financial institutions. Certain balances held by such financial institutions exceed insured limits. With regard to customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. The Company believes that no additional credit risk beyond amounts provided for by the allowance for doubtful accounts are inherent in accounts receivable. As of March 31, 2024 and December 31, 2023, no individual customer represented more than 10% of the Company’s accounts receivable, net of allowance for doubtful accounts. For the three months ended March 31, 2024 and 2023, no individual customer represented more than 10% of the Company’s revenue. Recent Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance on its financial statements, but does not intend to early adopt. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). The amendments also require entities on an annual basis to disclose disaggregated amounts of income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance on its financial statements, but does not intend to early adopt. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires use of observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3. Unobservable inputs for which there is little or no market data, which requires the Company to develop its own assumptions. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of March 31, 2024 and December 31, 2023 because of the relatively short duration of these instruments. Marketable securities consist of time deposits and commercial paper not otherwise classified as cash equivalents. All marketable securities are considered to be available-for-sale and are recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in accumulated other comprehensive loss. The Company evaluated its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following tables summarize the Company’s financial assets measured at fair value as of March 31, 2024 and December 31, 2023: Amortized cost or carrying value Unrealized gains Unrealized losses Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total (In thousands) Financial assets: Cash and cash equivalents: Money market account $ 89,184 $ — $ — $ 89,184 $ — $ — $ 89,184 Commercial paper 5,910 — — 5,910 — — 5,910 Total included in cash and cash equivalents 95,094 — — 95,094 — — 95,094 Marketable securities: Time deposits 30,000 — — 30,000 — — 30,000 Commercial paper 11,764 75 — 11,839 — — 11,839 Total marketable securities 41,764 75 — 41,839 — — 41,839 Total financial assets $ 136,858 $ 75 $ — $ 136,933 $ — $ — $ 136,933 Amortized cost or carrying value Unrealized gains Unrealized losses Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total (In thousands) Financial assets: Cash and cash equivalents: Money market account $ 120,724 $ — $ — $ 120,724 $ — $ — $ 120,724 Total included in cash and cash equivalents 120,724 — — 120,724 — — 120,724 Marketable securities: Time deposits 20,000 — — 20,000 — — 20,000 Commercial paper 1,422 66 — 1,488 — — 1,488 Total marketable securities 21,422 66 — 21,488 — — 21,488 Total financial assets $ 142,146 $ 66 $ — $ 142,212 $ — $ — $ 142,212 The Company classifies its marketable securities as current assets as they are available for current operating needs. The following table summarizes the contractual maturities of marketable securities as of March 31, 2024: Amortized cost Aggregate fair value (In thousands) Financial assets: Less than one year $ 41,764 $ 41,839 Total $ 41,764 $ 41,839 As of March 31, 2024, the marketable securities were in an unrealized gain position. The Company has determined that (i) it does not have the intent to sell any of these investments and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. As of March 31, 2024, the Company anticipates that it will recover the entire amortized cost basis of its marketable securities before maturity. During the three months ended March 31, 2024 and 2023, there were $1.4 million and $26.2 million, respectively, in maturities of marketable securities. There were no proceeds from sales of marketable securities for the three months ended March 31, 2024 and $17.7 million in proceeds from sales of marketable securities for the three months ended March 31, 2023. The Company determines realized gains and losses on sale of marketable securities using the specific identification method and records such gains and losses in other income, net on the condensed consolidated statements of operations. Interest earned on marketable securities was $0.4 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively. The interest is recorded in other income, net, on the accompanying condensed consolidated statements of operations. Accrued interest receivable is recorded in prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets. As of March 31, 2024, the fair value of the 2026 Convertible Notes and 2028 Convertible Notes, as further described in Note 8, “Debt,” to these condensed consolidated financial statements, was approximately $147.4 million and $176.5 million, respectively. As of December 31, 2023, the fair value of the 2026 Convertible Notes and the 2028 Convertible Notes was approximately $145.5 million and $157.6 million, respectively. The fair value was determined based on the closing price for the Convertible Notes on the last trading day of the reporting period and is considered as Level 2 in the fair value hierarchy. |
Financial Statement Components
Financial Statement Components | 3 Months Ended |
Mar. 31, 2024 | |
Financial Statement Components [Abstract] | |
Financial Statement Components | 4. Financial Statement Components Accounts receivable, net of allowances consist of the following: As of March 31, As of December 31, 2024 2023 (In thousands) Trade accounts receivable $ 43,790 $ 35,612 Unbilled accounts receivable 47,949 43,631 Allowance for doubtful accounts and reserve for expected credit losses (2,508) (1,128) Other accounts receivable 221 40 Total accounts receivable, net $ 89,452 $ 78,155 Components of allowance for doubtful accounts and reserve for expected credit losses are as follows: Three months ended March 31, 2024 2023 (In thousands) Balance, beginning of period $ (1,128) $ (1,191) Charged to bad debt expense, net of reversals (1,457) (304) Deductions (1) 60 148 Impact of foreign currency translation 17 (35) Balance, end of period $ (2,508) $ (1,382) ________________________ (1) Write-off of uncollectible accounts after all collection efforts have been exhausted. Accrued expenses and other current liabilities consisted of the following: As of March 31, As of December 31, 2024 2023 (In thousands) Accrued expense $ 49,088 $ 40,731 Accrued compensation and benefits 9,427 19,142 Accrued sales, use, VAT and telecommunications related taxes 8,702 8,467 Other accrued expenses 896 674 Total accrued expenses and other current liabilities $ 68,113 $ 69,014 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | 5. Leases The Company primarily leases facilities for office space under non-cancelable operating leases for its U.S. and international locations. As of March 31, 2024, non-cancelable leases expire on various dates between 2024 and 2043, some of which include options to extend the leases for up to 20 years. The lease expense recorded in the condensed consolidated statements of operations is comprised of operating lease costs of $6.0 million and $1.7 million for the three months ended March 31, 2024 and 2023, respectively. Other supplemental information related to operating leases were as follows: Three months ended March 31, 2024 2023 Weighted average remaining lease term (in years) 19.12 2.00 Weighted average discount rate 8.76 % 4.60 % Maturities of operating lease liabilities were as follows: As of March 31, 2024 (In thousands) 2024 (remaining) $ 17,234 2025 22,275 2026 21,720 2027 22,121 2028 22,462 Thereafter 378,808 Total lease payments 484,620 Less: imputed interest (259,803) Total lease obligations 224,817 Less: current obligations (5,089) Long-term lease obligations $ 219,728 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 6. Property, Plant and Equipment Property, plant and equipment, net consisted of the following: As of March 31, As of December 31, 2024 2023 (In thousands) Furniture and fixtures $ 16,018 $ 16,036 Computer and office equipment 13,694 13,669 Telecommunications equipment 82,515 82,991 Leasehold improvements 75,596 75,437 Software 13,162 12,552 Internal-use software development 29,272 25,909 Automobile 463 507 Land 27,636 27,771 Land Improvements 1,065 930 Total cost 259,421 255,802 Less—accumulated depreciation (85,597) (77,938) Total property, plant and equipment, net $ 173,824 $ 177,864 The Company capitalized $3.6 million and $1.7 million of software development costs for the three months ended March 31, 2024 and 2023, respectively. Amortization expense related to capitalized software development costs were $1.0 million and $0.7 million for the three months ended March 31, 2024 and 2023, respectively. The Company recognized depreciation expense, which includes amortization of capitalized software development costs, as follows: Three months ended March 31, 2024 2023 (In thousands) Cost of revenue $ 4,778 $ 3,529 Research and development 1,598 512 Sales and marketing 1,136 309 General and administrative 541 270 Total depreciation expense $ 8,053 $ 4,620 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets Goodwill The change in the carrying amounts of goodwill was as follows: Total (In thousands) Balance as of December 31, 2023 $ 335,872 Foreign currency translation adjustments (7,300) Balance as of March 31, 2024 $ 328,572 Intangible Assets Intangible assets, net consisted of the following: As of March 31, As of December 31, 2024 2023 Gross Accumulated Net Carrying Gross Accumulated Net Carrying (In thousands) Customer relationships $ 146,348 $ (37,768) $ 108,580 $ 147,426 $ (35,599) $ 111,827 Developed technology 77,934 (26,627) 51,307 79,702 (25,239) 54,463 Other, definite lived 2,828 (2,828) — 2,828 (2,828) — Licenses, indefinite lived 624 — 624 624 — 624 Total intangible assets, net $ 227,734 $ (67,223) $ 160,511 $ 230,580 $ (63,666) $ 166,914 The Company recognized amortization expense as follows: Three months ended March 31, 2024 2023 (In thousands) Cost of revenue $ 1,959 $ 1,945 Sales and marketing 2,402 2,329 Total amortization expense $ 4,361 $ 4,274 The remaining weighted average amortization period for definite lived intangible assets is 9.9 years. Future estimated amortization expense for definite lived intangible assets is as follows: As of March 31, 2024 (In thousands) 2024 (remaining) $ 13,033 2025 17,377 2026 17,377 2027 17,377 2028 17,377 Thereafter 77,346 $ 159,887 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt Revolving Credit Facility On August 1, 2023, the Company entered into a credit agreement (the “Credit Agreement”) among the Company, as borrower, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent, swingline lender and letters of credit issuer. The Credit Agreement provides for a $50.0 million revolving credit facility (the “Credit Facility”), including a $15.0 million sublimit for the issuance of letters of credit and a swingline subfacility of up to $5.0 million. The Credit Facility has an accordion feature that allows for an increase in the total borrowing size up to $25.0 million, subject to certain conditions. The Credit Facility matures on the earlier of (a) August 1, 2028 or (b) the date that is 91 days prior to the scheduled maturity date or mandatory conversion date of any of the Company’s outstanding convertible notes. Interest on borrowings under the Credit Facility accrues at an annual rate tied to a base rate or the Secured Overnight Financing Rate (“SOFR”), at the Company’s election. Loans based on SOFR bear interest at a rate equal to term SOFR for the applicable interest period plus 10 basis points plus an applicable margin between 2.25% and 2.75%, and loans based on the base rate bear interest at a rate equal to the base rate plus an applicable margin between 1.25% and 1.75%, in each case of the foregoing, depending upon the Company’s consolidated EBITDA for the most recent period of four consecutive fiscal quarters for which financial statements have been delivered under the Credit Agreement. The Company is required to pay a quarterly commitment fee equal to between 0.05% and 0.0625% on the unused portion of the borrowing commitment, depending upon the Company’s consolidated EBITDA for the most recent period of four consecutive fiscal quarters for which financial statements have been delivered under the Credit Agreement. As of March 31, 2024 and December 31, 2023, unamortized debt issuance costs were $0.6 million, of which $0.1 million were included in prepaid expenses and other current assets and $0.5 million were included in other long-term assets. As of March 31, 2024, there were no borrowings under the Credit Facility and the Company was in compliance with all financial and non-financial covenants for all periods presented. Convertible Senior Notes and Capped Call Transactions 2026 Convertible Notes In February 2020, the Company issued $400.0 million aggregate principal amount of 0.25% Convertible Notes due 2026 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act (the “2026 Convertible Notes”). The interest on the 2026 Convertible Notes is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2020. The 2026 Convertible Notes will mature on March 1, 2026, unless earlier repurchased, redeemed by the Company, or converted pursuant to their terms. The total net proceeds from the 2026 Convertible Notes, after deducting initial purchaser discounts, costs related to the 2026 Capped Calls (as defined herein), and debt issuance costs, paid by the Company, were approximately $344.7 million. The excess of the principal amount of the liability component over its carrying amount, or the debt discount, was amortized to interest expense at an annual effective interest rate of 0.509% over the contractual terms of the 2026 Convertible Notes. Each $1,000 principal amount of the 2026 Convertible Notes is initially convertible into 10.9857 shares of the Company’s Class A common stock, par value $0.001 per share, which is equivalent to an initial conversion price of approximately $91.03 per share. During March 2023, the Company entered into separate, privately negotiated repurchase agreements with a limited number of holders of the 2026 Convertible Notes to repurchase approximately $65.0 million aggregate principal amount of the 2026 Convertible Notes for an aggregate cash price of approximately $51.3 million. These repurchases closed on March 6, 2023. The Company entered into similar agreements to repurchase approximately $160.0 million aggregate principal amount of the 2026 Convertible Notes for an aggregate cash price of approximately $117.2 million that closed in November 2022. Following these repurchases, approximately $175.0 million principal amount of the 2026 Convertible Notes remain outstanding. The Company had previously entered into capped call transactions with certain financial institutions in connection with the 2026 Convertible Notes. All of these transactions are expected to remain in effect notwithstanding the repurchases. 2028 Convertible Notes In March 2021, the Company issued $250.0 million aggregate principal amount of 0.50% Convertible Notes due 2028 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act (the “2028 Convertible Notes” and, together with the 2026 Convertible Notes, the “Convertible Notes”). The interest on the 2028 Convertible Notes is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2021. The 2028 Convertible Notes will mature on April 1, 2028, unless earlier repurchased, redeemed by the Company, or converted pursuant to their terms. The total net proceeds from the 2028 Convertible Notes, after deducting initial purchaser discounts, costs related to the 2028 Capped Calls (as defined herein), and debt issuance costs, paid by the Company, were approximately $217.0 million. The excess of the principal amount of the liability component over its carrying amount, or the debt discount, was amortized to interest expense at an annual effective interest rate of 0.442% over the contractual terms of the 2028 Convertible Notes. Each $1,000 principal amount of the 2028 Convertible Notes is initially convertible into 5.5781 shares of the Company’s Class A common stock, par value $0.001 per share, which is equivalent to an initial conversion price of approximately $179.27 per share. Other Terms of the Convertible Notes The Convertible Notes are effectively subordinated to the Company’s future senior secured indebtedness to the extent of the value of the collateral securing that indebtedness. The Convertible Notes are the senior, unsecured obligations of the Company and are equal in right of payment with the Company’s future senior unsecured indebtedness, if any, senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Convertible Notes and the Convertible Notes will be structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and preferred equity, if any, of the Company’s subsidiaries. The Convertible Notes may bear special interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the indenture governing the applicable Convertible Notes (each, a “Notes Indenture” and collectively, the “Notes Indentures”) or if the Convertible Notes are not freely tradeable as required by the applicable Notes Indenture. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (which includes the calling of any Convertible Notes for redemption), as defined in the applicable Notes Indenture, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Convertible Notes in connection with such make-whole fundamental change or during the relevant redemption period. The Company may redeem the Convertible Notes, in whole or in part, at its option at any time, and from time to time, on or after (i) March 6, 2023 for the 2026 Convertible Notes, or ii) after April 6, 2025 for the 2028 Convertible Notes, in each case, on or before the fortieth (40 th ) scheduled trading day immediately before the maturity date, at a cash redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding the redemption date, if the last reported sale price of the Class A common stock has exceeded 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading date immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading days ending on, and including, the trading date immediately before the date on which the Company provides the related redemption notice. No sinking fund is provided for the Convertible Notes. The Convertible Notes will be convertible at certain times and upon the occurrence of certain events in the future. Further, on or after September 1, 2025 for the 2026 Convertible Notes, and on or after October 1, 2027 for the 2028 Convertible Notes, in each case, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Convertible Notes may convert all or a portion of their Convertible Notes regardless of these conditions. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of Class A common stock, or a combination of cash and shares of Class A common stock, at the Company’s election. It is the Company’s current intent to settle the principal amount of the Convertible Notes with cash. During the three months ended March 31, 2024, the conditions allowing the holders of the 2026 Convertible Notes and the 2028 Convertible Notes to convert were not met. The Convertible Notes may be convertible thereafter if one or more of the conversion conditions specified in each respective Notes Indenture are satisfied during future measurement periods. The Company continues to classify the Convertible Notes as a long-term liability in its condensed consolidated balance sheets as of March 31, 2024, based on contractual settlement provisions. Upon the occurrence of a fundamental change (as defined in the applicable Notes Indenture) prior to the maturity date, holders may require the Company to repurchase all or a portion of the 2026 Convertible Notes or 2028 Convertible Notes for cash at a price equal to the principal amount of the Convertible Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The net carrying amount of the liability components of the Convertible Notes were as follows: As of March 31, As of December 31, 2024 2023 2026 Convertible Notes: (In thousands) Principal $ 175,000 $ 175,000 Unamortized debt issuance costs (1,674) (1,891) 2026 Convertible Notes net carrying amount 173,326 173,109 2028 Convertible Notes: Principal 250,000 250,000 Unamortized debt issuance costs (4,315) (4,583) 2028 Convertible Notes net carrying amount 245,685 245,417 Total net carrying amount $ 419,011 $ 418,526 The following table sets forth the interest expense recognized related to the Convertible Notes: Three months ended March 31, 2024 2023 2026 Convertible Notes: (In thousands) Contractual interest expense $ 109 $ 138 Amortization of debt issuance costs 217 296 Total interest expense related to the 2026 Convertible Notes 326 434 2028 Convertible Notes: Contractual interest expense 313 313 Amortization of debt issuance costs 268 266 Total interest expense related to the 2028 Convertible Notes 581 579 Total interest expense $ 907 $ 1,013 Capped Calls In connection with the offering of the 2026 Convertible Notes and the 2028 Convertible Notes, the Company entered into privately negotiated capped call transactions with certain counterparties (the “2026 Capped Calls” and the “2028 Capped Calls,” respectively and, collectively, the “Capped Calls”). The initial strike price of the Convertible Notes corresponds to the initial conversion price of the 2026 Convertible Notes and the 2028 Convertible Notes. The Capped Calls are generally intended to reduce or offset the potential dilution to the Class A common stock upon any conversion of the 2026 Convertible Notes and 2028 Convertible Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. The Capped Calls expire on the earlier of (i) the last day on which any convertible securities remain outstanding and (ii) March 1, 2026 for the 2026 Capped Calls and April 1, 2028 for the 2028 Capped Calls, subject to earlier exercise. The Capped Calls are subject to either adjustment or termination upon the occurrence of specified extraordinary events affecting the Company, including a merger event, a tender offer, and a nationalization, insolvency or delisting involving the Company. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including changes in law, insolvency filings, and hedging disruptions. The Capped Call transactions are recorded in stockholders’ equity and are not accounted for as derivatives. The net cost to purchase the Capped Calls was recorded as a reduction to additional paid-in capital in the accompanying condensed consolidated balance sheets. The following table sets forth key terms and costs incurred for the Capped Calls related to the Convertible Notes as of March 31, 2024: 2026 Convertible Notes 2028 Convertible Notes (In thousands, except share and per share amounts) Initial approximate strike price per share, subject to certain adjustments $ 91.03 $ 179.27 Initial cap price per share, subject to certain adjustments $ 137.40 $ 260.76 Net costs incurred $ 43,320 $ 25,500 Class A common stock covered, subject to anti-dilution adjustments 1,922,498 1,394,525 All of the Capped Calls were outstanding as of March 31, 2024. |
Geographic Information
Geographic Information | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Geographic Information | 9. Geographic Information The Company generates its revenue primarily in North America. Revenue by geographic area is detailed in the table below, which is apportioned based on the destination of the service: Three months ended March 31, 2024 2023 (In thousands) North America $ 149,462 $ 115,709 Rest of World 21,571 22,135 Total $ 171,033 $ 137,844 The Company’s long-lived assets were primarily held in North America as of March 31, 2024 and December 31, 2023. As of March 31, 2024 and December 31, 2023, long-lived assets held outside of North America were $3.6 million and $4.5 million, respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity The Company had reserved shares of Class A common stock for issuance under stock-based award agreements as follows: As of March 31, As of December 31, 2024 2023 Stock options issued and outstanding 86,631 97,480 Nonvested restricted stock units issued and outstanding 4,725,103 5,066,159 Stock-based awards available for grant under the 2017 Plan 3,078,291 2,330,616 Total 7,890,025 7,494,255 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 11. Stock-Based Compensation Stock Options The following summarizes the stock option activity for the three months ended March 31, 2024: Number of Weighted- Weighted- Aggregate Outstanding as of December 31, 2023 97,480 $ 12.75 2.97 $ 332 Granted — — Exercised (10,849) 9.49 Forfeited or expired — — Outstanding as of March 31, 2024 86,631 $ 13.16 2.84 $ 494 Options vested and exercisable at March 31, 2024 86,631 $ 13.16 2.84 $ 494 Options vested and expected to vest as of March 31, 2024 86,631 $ 13.16 2.84 $ 494 As of March 31, 2024, the Company had no unrecognized compensation cost related to non-vested stock options. All outstanding stock options were fully vested prior to December 31, 2022. Restricted Stock Units The following summarizes the restricted stock unit (“RSU”) activity for the three months ended March 31, 2024: Number of awards outstanding Weighted-average grant date fair value (Per share) Nonvested RSUs as of December 31, 2023 5,066,159 $ 18.41 Granted 633,512 20.69 Vested (920,435) 28.55 Forfeited (54,133) 17.70 Nonvested RSUs as of March 31, 2024 4,725,103 $ 16.74 As of March 31, 2024, total unrecognized compensation cost related to non-vested RSUs was $70.0 million, which will be amortized over a weighted-average period of 2.14 years. Stock-Based Compensation Expense The Company recognized total stock-based compensation expense as follows: Three months ended March 31, 2024 2023 (In thousands) Cost of revenue $ 396 $ 192 Research and development 5,316 3,141 Sales and marketing 2,166 1,237 General and administrative 4,461 2,808 Total $ 12,339 $ 7,378 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Operating Leases The Company leases office space under non-cancelable operating lease agreements that expire on various dates through July 2043. As of March 31, 2024, the Company has $490.1 million in future minimum rent payments for its current office space. See Note 5, “Leases,” to the condensed consolidated financial statements, for additional details on the Company ’ s operating lease commitments. Contractual Obligations As of March 31, 2024, the Company has $22.5 million in non-cancellable purchase obligations, consisting of primarily network equipment maintenance and software license contracts, of which $14.9 million will be fulfilled within one year. Legal Matters The Company is involved as a defendant in various litigation, including, but not limited to, lawsuits alleging that the Company failed to bill, collect and remit certain taxes and surcharges associated with the provision of 911 services pursuant to applicable laws in various jurisdictions. The Company intends to vigorously defend these lawsuits and believes that it has meritorious defenses to each. However, litigation is inherently uncertain, and any judgment or injunctive relief entered against the Company or any adverse settlement could adversely affect the Company’s business, results of operations and financial condition. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes At the end of each interim reporting period, the Company determines the income tax provision by using an estimate of the annual effective tax rate, adjusted for discrete items occurring in the quarter. The effective income tax rate reflects the effect of federal, international, and state income taxes and the permanent impacts of differences in book and tax accounting. The Company’s effective tax rate was 2.1% and (647.6)% for the three months ended March 31, 2024 and 2023, respectively. The increase in the effective tax rate is primarily due to near breakeven pre-tax income in the first quarter of 2023 of $0.5 million in relation to the tax benefit resulting from operating losses outside of the U.S. Judgment is required in determining whether deferred tax assets will be realized in full or in part. Management assesses the available positive and negative evidence on a jurisdictional basis to estimate if deferred tax assets will be recognized and when it is more likely than not that all or some deferred tax assets will not be realized, and a valuation allowance must be established. As of March 31, 2024, the Company continues to maintain a valuation allowance against its U.S. federal and state net deferred tax assets. The Company’s effective tax rate for the three months ended March 31, 2024 differed from the federal statutory tax rate of 21% in the U.S. primarily due to a valuation allowance recorded against U.S. federal and state net deferred tax assets. |
Basic and Diluted (Loss) Income
Basic and Diluted (Loss) Income per Common Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Basic and Diluted (Loss) Income per Common Share | 14. Basic and Diluted (Loss) Income per Common Share Basic net (loss) income per share is computed by dividing net (loss) income by the weighted-average number of shares of common stock outstanding during the period. The Company is in a net loss position for the three months ended March 31, 2024, and therefore diluted shares equals basic shares. The components of basic and diluted (loss) income per share are as follows: Three months ended March 31, 2024 2023 (In thousands, except share and per share amounts) Earnings per share Net (loss) income attributable to common stockholders $ (9,233) $ 3,611 Net (loss) income per share: Basic $ (0.35) $ 0.14 Diluted $ (0.35) $ (0.28) Numerator used to compute net (loss) income per share: Basic $ (9,233) $ 3,611 Net gain on extinguishment of debt, net of taxes — (12,707) Interest expense on convertible notes, net of taxes — 1,009 Diluted (1) $ (9,233) $ (8,087) Weighted average number of common shares outstanding: Basic 26,493,802 25,448,452 Convertible debt conversion — 3,824,806 Diluted 26,493,802 29,273,258 ________________________ (1) Net income is adjusted for the reversal of the net gain on extinguishment of debt and add back of interest expense as part of the calculation for diluted Non-GAAP earnings per share. The following common share equivalents were excluded from the weighted average shares used to calculate net (loss) income per common share because their effects would have been anti-dilutive: As of March 31, 2024 2023 Stock options issued and outstanding 86,631 136,479 Restricted stock units issued and outstanding 4,725,103 2,475,656 Convertible senior notes 3,317,023 3,824,806 Total 8,128,757 6,436,941 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events Credit Agreement Amendment On May 1, 2024, the Company entered into an amendment (the “Credit Agreement Amendment”) to the credit agreement (as amended, the “Credit Agreement”) among the Company, as borrower, certain subsidiaries of the Company, as guarantors, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent, swingline lender and letters of credit issuer, with BofA Securities, Inc. and Wells Fargo Securities, LLC as Joint Lead Arrangers and Joint Bookrunners. Effective as of May 1, 2024, the Credit Agreement was amended to: • increase the aggregate revolving credit commitments from $50.0 million to $100.0 million; • increase the swingline sublimit from $5.0 million to $10.0 million; • increase from $75.0 million to $82.5 million the minimum liquidity (which includes the amount of undrawn borrowing commitments available under the Credit Agreement) the Company is required to maintain, tested (a) as of the end of any fiscal quarter and (b) as of each incurrence of certain actions in reliance on negative covenant baskets that are subject to a minimum liquidity condition; and • extend the maturity date to the earlier of May 1, 2029 (previously August 1, 2028) or the date that is 91 days prior to the scheduled maturity date or mandatory conversion date of any of the Company’s outstanding convertible notes. Except as described above, the terms of any loans under the Credit Agreement are unmodified and remain in full force and effect. Repurchase of 2026 Convertible Notes On May 7, 2024, the Company announced that it has entered into separate, privately negotiated repurchase agreements with a limited number of holders of its 0.250% Convertible Senior Notes due 2026 (the “Repurchases”) to repurchase approximately $140.0 million aggregate principal amount of the Notes for approximately $127.5 million, excluding customary transaction fees. The repurchase price payable by Bandwidth will be paid in cash. The Company has previously entered into capped call transactions with certain financial institutions in connection with the Notes. All of these transactions are expected to remain in effect notwithstanding the Repurchases. The Repurchases are expected to close on May 9, 2024, subject to the satisfaction of customary closing conditions. Following such closings, approximately $35.0 million principal amount of the Notes will remain outstanding. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2024 | Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | |||||
Net (loss) income | $ (9,233) | $ (10,934) | $ (5,130) | $ (3,890) | $ 3,611 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 shares | |
Trading Arrangements, by Individual | |
Non-Rule 10b5-1 Arrangement Adopted | false |
Adoption Date | 12/7/2023 |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Kade Ross [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | The following table describes any contracts, instructions or written plans for the sale or purchase of our securities adopted by our directors or executive officers during the six months ended March 31, 2024, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). Name and Title Date of Adoption of Rule 10b5-1 Trading Plan Scheduled Expiration Date of Rule 10b5-1 Trading Plan Aggregate Number of Securities to be Purchased or Sold David A. Morken Chairman and Chief Executive Officer a. 3/14/2024 b. 3/14/2024 a. 3/31/2025 b. 3/1/2025 a. Covers the sale of up to 1,793 shares of Class A common stock, and up to 55,597 shares of Class B common stock, at a price of $75.00 per share. b. Covers the sale of up to 787,698 shares of Class B common stock held by Hazel-Rah III, LLC at prices ranging from $75.00 to $125.00 per share. Kade Ross Chief Information Officer 12/7/2023 10/28/2024 Covers the sale of up to 17,000 shares of Class A common stock. |
Name | Kade Ross |
Title | Chief Information Officer |
Rule 10b5-1 Arrangement Adopted | true |
Arrangement Duration | 326 days |
Aggregate Available | 17,000 |
David A. Morken [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | The following table describes any contracts, instructions or written plans for the sale or purchase of our securities adopted by our directors or executive officers during the six months ended March 31, 2024, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). Name and Title Date of Adoption of Rule 10b5-1 Trading Plan Scheduled Expiration Date of Rule 10b5-1 Trading Plan Aggregate Number of Securities to be Purchased or Sold David A. Morken Chairman and Chief Executive Officer a. 3/14/2024 b. 3/14/2024 a. 3/31/2025 b. 3/1/2025 a. Covers the sale of up to 1,793 shares of Class A common stock, and up to 55,597 shares of Class B common stock, at a price of $75.00 per share. b. Covers the sale of up to 787,698 shares of Class B common stock held by Hazel-Rah III, LLC at prices ranging from $75.00 to $125.00 per share. Kade Ross Chief Information Officer 12/7/2023 10/28/2024 Covers the sale of up to 17,000 shares of Class A common stock. |
Name | David A. Morken |
Title | Chairman and Chief Executive Officer |
Rule 10b5-1 Arrangement Adopted | true |
David A. Morken Plan A [Member] | David A. Morken [Member] | |
Trading Arrangements, by Individual | |
Adoption Date | a. 3/14/2024 |
Arrangement Duration | 382 days |
David A. Morken Plan B [Member] | David A. Morken [Member] | |
Trading Arrangements, by Individual | |
Adoption Date | b. 3/14/2024 |
Arrangement Duration | 352 days |
Aggregate Available | 787,698 |
David A. Morken Plan A, Class A [Member] | David A. Morken [Member] | |
Trading Arrangements, by Individual | |
Aggregate Available | 1,793 |
David A. Morken Plan A, Class B [Member] | David A. Morken [Member] | |
Trading Arrangements, by Individual | |
Aggregate Available | 55,597 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 28, 2024. The condensed consolidated balance sheet as of December 31, 2023, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by GAAP on an annual reporting basis. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive (loss) income and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2024 or any future period. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Bandwidth Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the amounts reported in these financial statements and accompanying notes. These estimates in the condensed consolidated financial statements include, but are not limited to, allowance for doubtful accounts, reserve for expected credit losses, reserve for sales credits, recoverability of long lived and intangible assets, fair value of acquired intangible assets and goodwill, discount rates used in the valuation of right-of-use assets and lease liabilities, the fair value of the liability of the Company’s Convertible Notes (as defined herein), estimated period of benefit, valuation allowances on deferred tax assets, certain accrued expenses and contingencies, economic and demographic actuarial assumptions related to pension and other postretirement benefit costs and liabilities. Although the Company believes that the estimates it uses are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. |
Marketable Securities | Marketable Securities |
Accounts Receivable | Accounts Receivable and Current Expected Credit Losses Accounts receivable are stated at realizable value, net of allowances, which includes an allowance for doubtful accounts and a reserve for expected credit losses. The allowance for doubtful accounts is based on management’s assessment of the collectability of its customer accounts. The Company regularly reviews the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, current economic trends, and reasonable and supportable forecasts about the future. Relevant risk characteristics include customer size and historical loss patterns. Management has evaluated the expected credit losses related to trade accounts receivable and determined that an allowance of approximately $2.5 million and $1.1 million for uncollectible accounts and customer balances that are disputed was required as of March 31, 2024 and December 31, 2023, respectively. Refer to Note 4, “Financial Statement Components” to these condensed consolidated financial statements, for a rollforward of the components of the allowances for the three months ended March 31, 2024 and 2023. |
Current Expected Credit Losses | Accounts Receivable and Current Expected Credit Losses Accounts receivable are stated at realizable value, net of allowances, which includes an allowance for doubtful accounts and a reserve for expected credit losses. The allowance for doubtful accounts is based on management’s assessment of the collectability of its customer accounts. The Company regularly reviews the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, current economic trends, and reasonable and supportable forecasts about the future. Relevant risk characteristics include customer size and historical loss patterns. Management has evaluated the expected credit losses related to trade accounts receivable and determined that an allowance of approximately $2.5 million and $1.1 million for uncollectible accounts and customer balances that are disputed was required as of March 31, 2024 and December 31, 2023, respectively. Refer to Note 4, “Financial Statement Components” to these condensed consolidated financial statements, for a rollforward of the components of the allowances for the three months ended March 31, 2024 and 2023. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and trade accounts receivable. The Company maintains its cash, cash equivalents and marketable securities with high credit-quality financial institutions. Certain balances held by such financial institutions exceed insured limits. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance on its financial statements, but does not intend to early adopt. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). The amendments also require entities on an annual basis to disclose disaggregated amounts of income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance on its financial statements, but does not intend to early adopt. |
Fair Value Measurements | The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires use of observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3. Unobservable inputs for which there is little or no market data, which requires the Company to develop its own assumptions. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of March 31, 2024 and December 31, 2023 because of the relatively short duration of these instruments. Marketable securities consist of time deposits and commercial paper not otherwise classified as cash equivalents. All marketable securities are considered to be available-for-sale and are recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in accumulated other comprehensive loss. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value on a Recurring Basis | The Company evaluated its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following tables summarize the Company’s financial assets measured at fair value as of March 31, 2024 and December 31, 2023: Amortized cost or carrying value Unrealized gains Unrealized losses Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total (In thousands) Financial assets: Cash and cash equivalents: Money market account $ 89,184 $ — $ — $ 89,184 $ — $ — $ 89,184 Commercial paper 5,910 — — 5,910 — — 5,910 Total included in cash and cash equivalents 95,094 — — 95,094 — — 95,094 Marketable securities: Time deposits 30,000 — — 30,000 — — 30,000 Commercial paper 11,764 75 — 11,839 — — 11,839 Total marketable securities 41,764 75 — 41,839 — — 41,839 Total financial assets $ 136,858 $ 75 $ — $ 136,933 $ — $ — $ 136,933 Amortized cost or carrying value Unrealized gains Unrealized losses Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total (In thousands) Financial assets: Cash and cash equivalents: Money market account $ 120,724 $ — $ — $ 120,724 $ — $ — $ 120,724 Total included in cash and cash equivalents 120,724 — — 120,724 — — 120,724 Marketable securities: Time deposits 20,000 — — 20,000 — — 20,000 Commercial paper 1,422 66 — 1,488 — — 1,488 Total marketable securities 21,422 66 — 21,488 — — 21,488 Total financial assets $ 142,146 $ 66 $ — $ 142,212 $ — $ — $ 142,212 |
Schedule of Contractual Maturities of Marketable Securities | The Company classifies its marketable securities as current assets as they are available for current operating needs. The following table summarizes the contractual maturities of marketable securities as of March 31, 2024: Amortized cost Aggregate fair value (In thousands) Financial assets: Less than one year $ 41,764 $ 41,839 Total $ 41,764 $ 41,839 |
Financial Statement Components
Financial Statement Components (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Financial Statement Components [Abstract] | |
Schedule of Accounts Receivable, net of Allowances | Accounts receivable, net of allowances consist of the following: As of March 31, As of December 31, 2024 2023 (In thousands) Trade accounts receivable $ 43,790 $ 35,612 Unbilled accounts receivable 47,949 43,631 Allowance for doubtful accounts and reserve for expected credit losses (2,508) (1,128) Other accounts receivable 221 40 Total accounts receivable, net $ 89,452 $ 78,155 Components of allowance for doubtful accounts and reserve for expected credit losses are as follows: Three months ended March 31, 2024 2023 (In thousands) Balance, beginning of period $ (1,128) $ (1,191) Charged to bad debt expense, net of reversals (1,457) (304) Deductions (1) 60 148 Impact of foreign currency translation 17 (35) Balance, end of period $ (2,508) $ (1,382) ________________________ (1) Write-off of uncollectible accounts after all collection efforts have been exhausted. |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: As of March 31, As of December 31, 2024 2023 (In thousands) Accrued expense $ 49,088 $ 40,731 Accrued compensation and benefits 9,427 19,142 Accrued sales, use, VAT and telecommunications related taxes 8,702 8,467 Other accrued expenses 896 674 Total accrued expenses and other current liabilities $ 68,113 $ 69,014 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Components of Lease Expense and Supplemental Cash Flow and Other Information | Other supplemental information related to operating leases were as follows: Three months ended March 31, 2024 2023 Weighted average remaining lease term (in years) 19.12 2.00 Weighted average discount rate 8.76 % 4.60 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities were as follows: As of March 31, 2024 (In thousands) 2024 (remaining) $ 17,234 2025 22,275 2026 21,720 2027 22,121 2028 22,462 Thereafter 378,808 Total lease payments 484,620 Less: imputed interest (259,803) Total lease obligations 224,817 Less: current obligations (5,089) Long-term lease obligations $ 219,728 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, Net | Property, plant and equipment, net consisted of the following: As of March 31, As of December 31, 2024 2023 (In thousands) Furniture and fixtures $ 16,018 $ 16,036 Computer and office equipment 13,694 13,669 Telecommunications equipment 82,515 82,991 Leasehold improvements 75,596 75,437 Software 13,162 12,552 Internal-use software development 29,272 25,909 Automobile 463 507 Land 27,636 27,771 Land Improvements 1,065 930 Total cost 259,421 255,802 Less—accumulated depreciation (85,597) (77,938) Total property, plant and equipment, net $ 173,824 $ 177,864 |
Schedule of Depreciation Expense | The Company recognized depreciation expense, which includes amortization of capitalized software development costs, as follows: Three months ended March 31, 2024 2023 (In thousands) Cost of revenue $ 4,778 $ 3,529 Research and development 1,598 512 Sales and marketing 1,136 309 General and administrative 541 270 Total depreciation expense $ 8,053 $ 4,620 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in the carrying amounts of goodwill was as follows: Total (In thousands) Balance as of December 31, 2023 $ 335,872 Foreign currency translation adjustments (7,300) Balance as of March 31, 2024 $ 328,572 |
Schedule of Finite Lived Intangible Assets | Intangible assets, net consisted of the following: As of March 31, As of December 31, 2024 2023 Gross Accumulated Net Carrying Gross Accumulated Net Carrying (In thousands) Customer relationships $ 146,348 $ (37,768) $ 108,580 $ 147,426 $ (35,599) $ 111,827 Developed technology 77,934 (26,627) 51,307 79,702 (25,239) 54,463 Other, definite lived 2,828 (2,828) — 2,828 (2,828) — Licenses, indefinite lived 624 — 624 624 — 624 Total intangible assets, net $ 227,734 $ (67,223) $ 160,511 $ 230,580 $ (63,666) $ 166,914 |
Schedule of Infinite Lived Intangible Assets | Intangible assets, net consisted of the following: As of March 31, As of December 31, 2024 2023 Gross Accumulated Net Carrying Gross Accumulated Net Carrying (In thousands) Customer relationships $ 146,348 $ (37,768) $ 108,580 $ 147,426 $ (35,599) $ 111,827 Developed technology 77,934 (26,627) 51,307 79,702 (25,239) 54,463 Other, definite lived 2,828 (2,828) — 2,828 (2,828) — Licenses, indefinite lived 624 — 624 624 — 624 Total intangible assets, net $ 227,734 $ (67,223) $ 160,511 $ 230,580 $ (63,666) $ 166,914 |
Schedule of Amortization Expense | The Company recognized amortization expense as follows: Three months ended March 31, 2024 2023 (In thousands) Cost of revenue $ 1,959 $ 1,945 Sales and marketing 2,402 2,329 Total amortization expense $ 4,361 $ 4,274 |
Schedule of Future Estimated Amortization Expense | Future estimated amortization expense for definite lived intangible assets is as follows: As of March 31, 2024 (In thousands) 2024 (remaining) $ 13,033 2025 17,377 2026 17,377 2027 17,377 2028 17,377 Thereafter 77,346 $ 159,887 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Net Carrying Amount of Liability and Equity Component of Notes | The net carrying amount of the liability components of the Convertible Notes were as follows: As of March 31, As of December 31, 2024 2023 2026 Convertible Notes: (In thousands) Principal $ 175,000 $ 175,000 Unamortized debt issuance costs (1,674) (1,891) 2026 Convertible Notes net carrying amount 173,326 173,109 2028 Convertible Notes: Principal 250,000 250,000 Unamortized debt issuance costs (4,315) (4,583) 2028 Convertible Notes net carrying amount 245,685 245,417 Total net carrying amount $ 419,011 $ 418,526 |
Schedule of Interest Income and Interest Expense Disclosure | The following table sets forth the interest expense recognized related to the Convertible Notes: Three months ended March 31, 2024 2023 2026 Convertible Notes: (In thousands) Contractual interest expense $ 109 $ 138 Amortization of debt issuance costs 217 296 Total interest expense related to the 2026 Convertible Notes 326 434 2028 Convertible Notes: Contractual interest expense 313 313 Amortization of debt issuance costs 268 266 Total interest expense related to the 2028 Convertible Notes 581 579 Total interest expense $ 907 $ 1,013 |
Schedule of Capped Call Transactions | The following table sets forth key terms and costs incurred for the Capped Calls related to the Convertible Notes as of March 31, 2024: 2026 Convertible Notes 2028 Convertible Notes (In thousands, except share and per share amounts) Initial approximate strike price per share, subject to certain adjustments $ 91.03 $ 179.27 Initial cap price per share, subject to certain adjustments $ 137.40 $ 260.76 Net costs incurred $ 43,320 $ 25,500 Class A common stock covered, subject to anti-dilution adjustments 1,922,498 1,394,525 |
Geographic Information (Tables)
Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographical Area | The Company generates its revenue primarily in North America. Revenue by geographic area is detailed in the table below, which is apportioned based on the destination of the service: Three months ended March 31, 2024 2023 (In thousands) North America $ 149,462 $ 115,709 Rest of World 21,571 22,135 Total $ 171,033 $ 137,844 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of Reserved Shares of Common Stock for Issuance | The Company had reserved shares of Class A common stock for issuance under stock-based award agreements as follows: As of March 31, As of December 31, 2024 2023 Stock options issued and outstanding 86,631 97,480 Nonvested restricted stock units issued and outstanding 4,725,103 5,066,159 Stock-based awards available for grant under the 2017 Plan 3,078,291 2,330,616 Total 7,890,025 7,494,255 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following summarizes the stock option activity for the three months ended March 31, 2024: Number of Weighted- Weighted- Aggregate Outstanding as of December 31, 2023 97,480 $ 12.75 2.97 $ 332 Granted — — Exercised (10,849) 9.49 Forfeited or expired — — Outstanding as of March 31, 2024 86,631 $ 13.16 2.84 $ 494 Options vested and exercisable at March 31, 2024 86,631 $ 13.16 2.84 $ 494 Options vested and expected to vest as of March 31, 2024 86,631 $ 13.16 2.84 $ 494 |
Schedule of Restricted Stock Unit Activity | The following summarizes the restricted stock unit (“RSU”) activity for the three months ended March 31, 2024: Number of awards outstanding Weighted-average grant date fair value (Per share) Nonvested RSUs as of December 31, 2023 5,066,159 $ 18.41 Granted 633,512 20.69 Vested (920,435) 28.55 Forfeited (54,133) 17.70 Nonvested RSUs as of March 31, 2024 4,725,103 $ 16.74 |
Schedule of Stock-Based Compensation Expense | The Company recognized total stock-based compensation expense as follows: Three months ended March 31, 2024 2023 (In thousands) Cost of revenue $ 396 $ 192 Research and development 5,316 3,141 Sales and marketing 2,166 1,237 General and administrative 4,461 2,808 Total $ 12,339 $ 7,378 |
Basic and Diluted (Loss) Inco_2
Basic and Diluted (Loss) Income per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The components of basic and diluted (loss) income per share are as follows: Three months ended March 31, 2024 2023 (In thousands, except share and per share amounts) Earnings per share Net (loss) income attributable to common stockholders $ (9,233) $ 3,611 Net (loss) income per share: Basic $ (0.35) $ 0.14 Diluted $ (0.35) $ (0.28) Numerator used to compute net (loss) income per share: Basic $ (9,233) $ 3,611 Net gain on extinguishment of debt, net of taxes — (12,707) Interest expense on convertible notes, net of taxes — 1,009 Diluted (1) $ (9,233) $ (8,087) Weighted average number of common shares outstanding: Basic 26,493,802 25,448,452 Convertible debt conversion — 3,824,806 Diluted 26,493,802 29,273,258 ________________________ (1) Net income is adjusted for the reversal of the net gain on extinguishment of debt and add back of interest expense as part of the calculation for diluted Non-GAAP earnings per share. |
Schedule of Anti-dilutive Common Shares Excluded from Calculation of Net Loss | The following common share equivalents were excluded from the weighted average shares used to calculate net (loss) income per common share because their effects would have been anti-dilutive: As of March 31, 2024 2023 Stock options issued and outstanding 86,631 136,479 Restricted stock units issued and outstanding 4,725,103 2,475,656 Convertible senior notes 3,317,023 3,824,806 Total 8,128,757 6,436,941 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 2,508 | $ 1,128 |
Unbilled accounts receivable | $ 47,949 | $ 43,631 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 105,390 | $ 131,987 | $ 85,298 |
Amortized cost or carrying value | 41,764 | 21,422 | |
Unrealized gains | 75 | 66 | |
Unrealized losses | 0 | 0 | |
Total marketable securities | 41,839 | ||
Total financial assets | 136,858 | 142,146 | |
Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 89,184 | 120,724 | |
Time deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Amortized cost or carrying value | 30,000 | 20,000 | |
Unrealized gains | 0 | 0 | |
Unrealized losses | 0 | 0 | |
Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 5,910 | ||
Amortized cost or carrying value | 11,764 | 1,422 | |
Unrealized gains | 75 | 66 | |
Unrealized losses | 0 | 0 | |
Total included in cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 95,094 | 120,724 | |
Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 41,839 | 21,488 | |
Total financial assets | 136,933 | 142,212 | |
Recurring | Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 89,184 | 120,724 | |
Recurring | Time deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 30,000 | 20,000 | |
Recurring | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 5,910 | ||
Total marketable securities | 11,839 | 1,488 | |
Recurring | Total included in cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 95,094 | 120,724 | |
Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 41,839 | 21,488 | |
Total financial assets | 136,933 | 142,212 | |
Recurring | Level 1 | Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 89,184 | 120,724 | |
Recurring | Level 1 | Time deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 30,000 | 20,000 | |
Recurring | Level 1 | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 5,910 | ||
Total marketable securities | 11,839 | 1,488 | |
Recurring | Level 1 | Total included in cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 95,094 | 120,724 | |
Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 0 | 0 | |
Total financial assets | 0 | 0 | |
Recurring | Level 2 | Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Recurring | Level 2 | Time deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 0 | 0 | |
Recurring | Level 2 | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | ||
Total marketable securities | 0 | 0 | |
Recurring | Level 2 | Total included in cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 0 | 0 | |
Total financial assets | 0 | 0 | |
Recurring | Level 3 | Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Recurring | Level 3 | Time deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 0 | 0 | |
Recurring | Level 3 | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | ||
Total marketable securities | 0 | 0 | |
Recurring | Level 3 | Total included in cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 0 | $ 0 |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities of Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Amortized cost | ||
Less than one year | $ 41,764 | |
Total | 41,764 | $ 21,422 |
Aggregate fair value | ||
Less than one year | 41,839 | |
Total | $ 41,839 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||
Maturities of marketable securities | $ 1,400 | $ 26,200 | |
Proceeds from sale of marketable securities | 0 | 17,700 | |
Interest earned on marketable securities (less than) | 400 | $ 300 | |
Convertible notes | 2026 Convertible Notes: | |||
Debt Instrument [Line Items] | |||
Fair value | 147,400 | $ 145,500 | |
Convertible notes | 2028 Convertible Notes: | |||
Debt Instrument [Line Items] | |||
Fair value | $ 176,500 | $ 157,600 |
Financial Statement Component_2
Financial Statement Components - Schedule of Accounts Receivable, net of Allowances (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Financial Statement Components [Abstract] | ||
Trade accounts receivable | $ 43,790 | $ 35,612 |
Unbilled accounts receivable | 47,949 | 43,631 |
Allowance for doubtful accounts and reserve for expected credit losses | (2,508) | (1,128) |
Other accounts receivable | 221 | 40 |
Total accounts receivable, net | $ 89,452 | $ 78,155 |
Financial Statement Component_3
Financial Statement Components - Allowance For Doubtful Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance, beginning of period | $ (1,128) | $ (1,191) |
Charged to bad debt expense, net of reversals | (1,457) | (304) |
Deductions | 60 | 148 |
Impact of foreign currency translation | 17 | (35) |
Balance, end of period | $ (2,508) | $ (1,382) |
Financial Statement Component_4
Financial Statement Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Financial Statement Components [Abstract] | ||
Accrued expense | $ 49,088 | $ 40,731 |
Accrued compensation and benefits | 9,427 | 19,142 |
Accrued sales, use, VAT and telecommunications related taxes | 8,702 | 8,467 |
Other accrued expenses | 896 | 674 |
Total accrued expenses and other current liabilities | $ 68,113 | $ 69,014 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Option to extend, term (up to) | 20 years | |
Operating lease cost | $ 6,000 | $ 1,700 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow and Other Information (Details) | Mar. 31, 2024 | Mar. 31, 2023 |
Leases [Abstract] | ||
Weighted average remaining lease term (in years) | 19 years 1 month 13 days | 2 years |
Weighted average discount rate | 8.76% | 4.60% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Operating Leases | ||
2024 (remaining) | $ 17,234 | |
2025 | 22,275 | |
2026 | 21,720 | |
2027 | 22,121 | |
2028 | 22,462 | |
Thereafter | 378,808 | |
Total lease payments | 484,620 | |
Less: imputed interest | (259,803) | |
Total lease obligations | 224,817 | |
Less: current obligations | (5,089) | $ (5,463) |
Long-term lease obligations | $ 219,728 | $ 220,548 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 259,421 | $ 255,802 |
Less—accumulated depreciation | (85,597) | (77,938) |
Total property, plant and equipment, net | 173,824 | 177,864 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 16,018 | 16,036 |
Computer and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 13,694 | 13,669 |
Telecommunications equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 82,515 | 82,991 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 75,596 | 75,437 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 13,162 | 12,552 |
Internal-use software development | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 29,272 | 25,909 |
Automobile | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 463 | 507 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 27,636 | 27,771 |
Land Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 1,065 | $ 930 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Capitalized software development costs, additions | $ 3.6 | $ 1.7 |
Amortization of capitalized software development costs | $ 1 | $ 0.7 |
Property, Plant and Equipment_3
Property, Plant and Equipment - Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | $ 8,053 | $ 4,620 |
Cost of revenue | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | 4,778 | 3,529 |
Research and development | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | 1,598 | 512 |
Sales and marketing | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | 1,136 | 309 |
General and administrative | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | $ 541 | $ 270 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Summary of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 335,872 |
Foreign currency translation adjustments | (7,300) |
Ending balance | $ 328,572 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | $ (67,223) | $ (63,666) |
Net Carrying Value | 159,887 | |
Gross Amount | 227,734 | 230,580 |
Net Carrying Value | 160,511 | 166,914 |
Licenses, indefinite lived | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Licenses, indefinite lived | 624 | 624 |
Customer relationships | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Amount | 146,348 | 147,426 |
Accumulated Amortization | (37,768) | (35,599) |
Net Carrying Value | 108,580 | 111,827 |
Developed technology | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Amount | 77,934 | 79,702 |
Accumulated Amortization | (26,627) | (25,239) |
Net Carrying Value | 51,307 | 54,463 |
Other, definite lived | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Amount | 2,828 | 2,828 |
Accumulated Amortization | (2,828) | (2,828) |
Net Carrying Value | $ 0 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill [Line Items] | ||
Total amortization expense | $ 4,361 | $ 4,274 |
Cost of revenue | ||
Goodwill [Line Items] | ||
Total amortization expense | 1,959 | 1,945 |
Sales and marketing | ||
Goodwill [Line Items] | ||
Total amortization expense | $ 2,402 | $ 2,329 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Weighted average useful life | 9 years 10 months 24 days |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Future Estimated Amortization Expense (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 (remaining) | $ 13,033 |
2025 | 17,377 |
2026 | 17,377 |
2027 | 17,377 |
2028 | 17,377 |
Thereafter | 77,346 |
Net Carrying Value | $ 159,887 |
Debt - Revolving Loan (Details)
Debt - Revolving Loan (Details) $ in Millions | Aug. 01, 2023 USD ($) quarter | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Debt Instrument [Line Items] | |||
Outstanding unamortized loan fees | $ 0.6 | $ 0.6 | |
Bank of America Credit Agreement | Line of Credit | Revolving Loan | |||
Debt Instrument [Line Items] | |||
Borrowing capacity | $ 50 | ||
Accordion feature, increase limit | $ 25 | ||
Days prior to maturity date | 91 days | ||
Covenant, consecutive quarters | quarter | 4 | ||
Line of credit | 0 | ||
Bank of America Credit Agreement | Line of Credit | Revolving Loan | Minimum | |||
Debt Instrument [Line Items] | |||
Unused portion of borrowing commitment | 0.05% | ||
Bank of America Credit Agreement | Line of Credit | Revolving Loan | Maximum | |||
Debt Instrument [Line Items] | |||
Unused portion of borrowing commitment | 0.0625% | ||
Bank of America Credit Agreement | Line of Credit | Revolving Loan | Secured Overnight Financing Rate (SOFR) | |||
Debt Instrument [Line Items] | |||
Additional basis spread on variable rate | 0.10% | ||
Bank of America Credit Agreement | Line of Credit | Revolving Loan | Secured Overnight Financing Rate (SOFR) | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.25% | ||
Bank of America Credit Agreement | Line of Credit | Revolving Loan | Secured Overnight Financing Rate (SOFR) | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.75% | ||
Bank of America Credit Agreement | Line of Credit | Revolving Loan | Base rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.25% | ||
Bank of America Credit Agreement | Line of Credit | Revolving Loan | Base rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.75% | ||
Bank of America Credit Agreement | Line of Credit | Credit commitments | |||
Debt Instrument [Line Items] | |||
Borrowing capacity | $ 15 | ||
Bank of America Credit Agreement | Line of Credit | Swing line | |||
Debt Instrument [Line Items] | |||
Borrowing capacity | $ 5 | ||
Prepaid expenses and other current assets | |||
Debt Instrument [Line Items] | |||
Outstanding unamortized loan fees | 0.1 | 0.1 | |
Other long-term assets | |||
Debt Instrument [Line Items] | |||
Outstanding unamortized loan fees | $ 0.5 | $ 0.5 |
Debt - 2026 Convertible Notes (
Debt - 2026 Convertible Notes (Details) | 1 Months Ended | 3 Months Ended | |||||
Mar. 31, 2023 USD ($) | Nov. 30, 2022 USD ($) | Feb. 28, 2020 USD ($) $ / shares | Mar. 31, 2024 USD ($) $ / shares | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) $ / shares | Mar. 31, 2021 $ / shares | |
Debt Instrument [Line Items] | |||||||
Net gain on extinguishment of debt | $ 0 | $ 12,767,000 | |||||
Class A voting common stock | |||||||
Debt Instrument [Line Items] | |||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||
2026 Convertible Notes: | Convertible notes | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 175,000,000 | $ 400,000,000 | $ 175,000,000 | 175,000,000 | $ 175,000,000 | ||
Stated rate (as a percent) | 0.25% | ||||||
Total net proceeds | $ 344,700,000 | ||||||
Effective interest rate (as a percent) | 0.509% | ||||||
Conversion price (in usd per share) | $ / shares | $ 91.03 | ||||||
Repurchased face amount | 65,000,000 | $ 160,000,000 | $ 65,000,000 | ||||
Repayments of debt | $ 51,300,000 | $ 117,200,000 | |||||
2026 Convertible Notes: | Convertible notes | Class A voting common stock | |||||||
Debt Instrument [Line Items] | |||||||
Conversion ratio | 0.0109857 |
Debt - 2028 Convertible Notes (
Debt - 2028 Convertible Notes (Details) | 1 Months Ended | |||
Mar. 31, 2021 USD ($) $ / shares | Mar. 31, 2024 USD ($) $ / shares | Dec. 31, 2023 USD ($) $ / shares | Feb. 28, 2020 $ / shares | |
Class A voting common stock | ||||
Debt Instrument [Line Items] | ||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
2028 Convertible Notes: | Convertible notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ | $ 250,000,000 | $ 250,000,000 | $ 250,000,000 | |
Stated rate (as a percent) | 0.50% | |||
Total net proceeds | $ | $ 217,000,000 | |||
Effective interest rate (as a percent) | 0.442% | |||
Conversion price (in usd per share) | $ / shares | $ 179.27 | |||
2028 Convertible Notes: | Convertible notes | Class A voting common stock | ||||
Debt Instrument [Line Items] | ||||
Conversion ratio | 0.0055781 |
Debt - Other Terms of the Conve
Debt - Other Terms of the Convertible Notes (Details) - 2026 Convertible Notes | 3 Months Ended |
Mar. 31, 2024 day | |
Debt Instrument [Line Items] | |
Redemption period scheduled trading day before the maturity date | 40 days |
Cash redemption price (as a percent) | 100% |
Conversion option 1 | Convertible notes | Class A voting common stock | |
Debt Instrument [Line Items] | |
Stock price trigger (as a percent) | 130% |
Trading days | 20 |
Consecutive trading days | 30 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - Convertible notes - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2021 | Feb. 28, 2020 |
Debt Instrument [Line Items] | |||||
Total net carrying amount | $ 419,011,000 | $ 418,526,000 | |||
2026 Convertible Notes: | |||||
Debt Instrument [Line Items] | |||||
Principal | 175,000,000 | 175,000,000 | $ 175,000,000 | $ 400,000,000 | |
Unamortized debt issuance costs | (1,674,000) | (1,891,000) | |||
Total net carrying amount | 173,326,000 | 173,109,000 | |||
2028 Convertible Notes: | |||||
Debt Instrument [Line Items] | |||||
Principal | 250,000,000 | 250,000,000 | $ 250,000,000 | ||
Unamortized debt issuance costs | (4,315,000) | (4,583,000) | |||
Total net carrying amount | $ 245,685,000 | $ 245,417,000 |
Debt - Interest Income and Inte
Debt - Interest Income and Interest Expense Disclosure (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Debt Instrument [Line Items] | ||
Total interest expense | $ 907 | $ 1,013 |
2026 Convertible Notes: | ||
Debt Instrument [Line Items] | ||
Contractual interest expense | 109 | 138 |
Amortization of debt issuance costs | 217 | 296 |
Total interest expense | 326 | 434 |
2028 Convertible Notes: | ||
Debt Instrument [Line Items] | ||
Contractual interest expense | 313 | 313 |
Amortization of debt issuance costs | 268 | 266 |
Total interest expense | $ 581 | $ 579 |
Debt - Convertible Senior Notes
Debt - Convertible Senior Notes and Capped Call Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 16, 2021 | Feb. 28, 2020 |
Debt Instrument [Line Items] | ||
Net costs incurred | $ 25,500 | $ 43,320 |
Class A voting common stock | ||
Debt Instrument [Line Items] | ||
Class A common stock covered, subject to anti-dilution adjustments (in shares) | 1,394,525 | 1,922,498 |
Convertible notes | 2026 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Initial conversion strike price (in usd per share) | $ 91.03 | |
Initial cap price (in usd per share) | $ 137.40 | |
Convertible notes | 2028 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Initial conversion strike price (in usd per share) | $ 179.27 | |
Initial cap price (in usd per share) | $ 260.76 |
Geographic Information - Reconc
Geographic Information - Reconciliation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | $ 171,033 | $ 137,844 | |
Assets | 1,085,531 | $ 1,101,048 | |
North America | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 149,462 | 115,709 | |
Rest of World | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 21,571 | $ 22,135 | |
Assets | $ 3,600 | $ 4,500 |
Stockholders' Equity - Reserved
Stockholders' Equity - Reserved Shares of Common Stock for Issuance (Details) - shares | Mar. 31, 2024 | Dec. 31, 2023 |
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 7,890,025 | 7,494,255 |
Stock options issued and outstanding | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 86,631 | 97,480 |
Nonvested restricted stock units issued and outstanding | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 4,725,103 | 5,066,159 |
Stock-based awards available for grant under the 2017 Plan | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 3,078,291 | 2,330,616 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Number of options outstanding | ||
Beginning balance (in shares) | 97,480 | |
Granted (in shares) | 0 | |
Exercised (in shares) | (10,849) | |
Forfeited or expired (in shares) | 0 | |
Ending balance (in shares) | 86,631 | 97,480 |
Options vested and exercisable (in shares) | 86,631 | |
Options vested and expected to vest (in shares) | 86,631 | |
Weighted- average exercise price (Per share) | ||
Beginning balance (in usd per share) | $ 12.75 | |
Granted (in usd per share) | 0 | |
Exercised (in usd per share) | 9.49 | |
Forfeited or expired (in usd per share) | 0 | |
Ending balance (in usd per share) | 13.16 | $ 12.75 |
Weighted-average exercise price, Options vested and exercisable (in usd per share) | 13.16 | |
Weighted-average exercise price, Options vested and expected to vest (in usd per share) | $ 13.16 | |
Weighted- average remaining contract life (In years) | ||
Outstanding (in years) | 2 years 10 months 2 days | 2 years 11 months 19 days |
Options vested and exercisable at March 31, 2024 | 2 years 10 months 2 days | |
Options vested and expected to vest as of March 31, 2024 | 2 years 10 months 2 days | |
Aggregate intrinsic value (In thousands) | ||
Options outstanding | $ 494 | $ 332 |
Options vested and exercisable at March 31, 2024 | 494 | |
Options vested and expected to vest as of March 31, 2024 | $ 494 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2024 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted (in shares) | shares | 0 |
Unrecognized cost for stock based compensation | $ 0 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost related to non-vested RSUs | $ 70,000,000 |
Unrecognized cost for stock based compensation, period for recognition (in years) | 2 years 1 month 20 days |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Activity (Details) - RSUs | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of awards outstanding | |
Beginning balance (in shares) | shares | 5,066,159 |
Granted (in shares) | shares | 633,512 |
Vested (in shares) | shares | (920,435) |
Forfeited or cancelled (in shares) | shares | (54,133) |
Ending balance (in shares) | shares | 4,725,103 |
Weighted-average grant date fair value (Per share) | |
Beginning balance (in usd per share) | $ / shares | $ 18.41 |
Granted (in usd per share) | $ / shares | 20.69 |
Vested (in usd per share) | $ / shares | 28.55 |
Forfeited or cancelled (in usd per share) | $ / shares | 17.70 |
Ending balance (in usd per share) | $ / shares | $ 16.74 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 12,339 | $ 7,378 |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 396 | 192 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 5,316 | 3,141 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 2,166 | 1,237 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 4,461 | $ 2,808 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Lessee, Lease, Description [Line Items] | |
Lease payments of initial term | $ 484,620 |
Non-cancellable purchase obligation | 22,500 |
Non-cancellable purchase obligation, fulfilled within a year | 14,900 |
Office Space | |
Lessee, Lease, Description [Line Items] | |
Lease payments of initial term | $ 490,100 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (as a percent) | 2.10% | (647.60%) |
(Loss) income before income taxes | $ (9,433) | $ 483 |
Basic and Diluted (Loss) Inco_3
Basic and Diluted (Loss) Income per Common Share - Components of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Net (loss) income attributable to common stockholders, basic | $ (9,233) | $ 3,611 |
Net (loss) income per share: | ||
Basic (in usd per share) | $ (0.35) | $ 0.14 |
Diluted (in usd per share) | $ (0.35) | $ (0.28) |
Numerator used to compute net (loss) income per share: | ||
Net gain on extinguishment of debt, net of taxes | $ 0 | $ (12,707) |
Interest expense on convertible notes, net of taxes | 0 | 1,009 |
Diluted | $ (9,233) | $ (8,087) |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 26,493,802 | 25,448,452 |
Convertible debt conversion (in shares) | 0 | 3,824,806 |
Diluted (in shares) | 26,493,802 | 29,273,258 |
Basic and Diluted (Loss) Inco_4
Basic and Diluted (Loss) Income per Common Share - Schedule of Antidilutive Common Share Equivalents Excluded from Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 8,128,757 | 6,436,941 |
Stock options issued and outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 86,631 | 136,479 |
Nonvested restricted stock units issued and outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 4,725,103 | 2,475,656 |
Convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 3,317,023 | 3,824,806 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | ||||||||
May 07, 2024 | Mar. 31, 2023 | Nov. 30, 2022 | May 09, 2024 | May 01, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Aug. 01, 2023 | Feb. 28, 2020 | |
2026 Convertible Notes | Convertible notes | |||||||||
Subsequent Event [Line Items] | |||||||||
Stated rate (as a percent) | 0.25% | ||||||||
Repurchased face amount | $ 65,000,000 | $ 160,000,000 | |||||||
Repayments of debt | 51,300,000 | $ 117,200,000 | |||||||
Principal | $ 175,000,000 | $ 175,000,000 | $ 175,000,000 | $ 400,000,000 | |||||
Revolving Loan | Bank of America Credit Agreement | Line of Credit | |||||||||
Subsequent Event [Line Items] | |||||||||
Borrowing capacity | $ 50,000,000 | ||||||||
Days prior to maturity date | 91 days | ||||||||
Swing line | Bank of America Credit Agreement | Line of Credit | |||||||||
Subsequent Event [Line Items] | |||||||||
Borrowing capacity | $ 5,000,000 | ||||||||
Minimum liquidity | $ 75,000,000 | ||||||||
Subsequent Event | 2026 Convertible Notes | Convertible notes | |||||||||
Subsequent Event [Line Items] | |||||||||
Repurchased face amount | $ 140,000,000 | ||||||||
Repayments of debt | $ 127,500,000 | ||||||||
Principal | $ 35,000,000 | ||||||||
Subsequent Event | Revolving Loan | Bank of America Credit Agreement | Line of Credit | |||||||||
Subsequent Event [Line Items] | |||||||||
Borrowing capacity | $ 100,000,000 | ||||||||
Days prior to maturity date | 91 days | ||||||||
Subsequent Event | Swing line | Bank of America Credit Agreement | Line of Credit | |||||||||
Subsequent Event [Line Items] | |||||||||
Borrowing capacity | $ 10,000,000 | ||||||||
Minimum liquidity | $ 82,500,000 |