Sprout Social (SPT) 10-Q 7 May 20 2020 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Mar. 31, 2020	May 04, 2020
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	001-39156
Entity Registrant Name	SPROUT SOCIAL, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-2404165
Entity Address, Address Line One	131 South Dearborn St.
Entity Address, Address Line Two	Suite 700
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60603
City Area Code	(866)
Local Phone Number	878-3231
Title of 12(b) Security	Class A Common Stock, $0.0001 par value per share
Trading Symbol	SPT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001517375
Amendment Flag	false
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		40,411,824
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		9,945,952

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 137,376	$ 135,310
Accounts receivable, net of allowances of $1,456 and $706 at March 31, 2020 and December 31, 2019, respectively	12,311	11,099
Deferred commissions	6,116	5,574
Prepaid expenses and other assets	5,337	5,050
Total current assets	161,140	157,033
Property and equipment, net	13,116	13,529
Deferred commissions, net of current portion	5,836	5,505
Operating lease, right-of-use assets	10,884	5,618
Goodwill	2,299	2,299
Intangible assets, net	5,126	5,482
Other assets, net	125	125
Total assets	198,526	189,591
Current liabilities
Accounts payable	2,534	2,049
Deferred revenue	33,794	29,566
Operating lease liabilities	2,139	2,331
Accrued wages and payroll related benefits	3,335	4,053
Accrued expenses and other	5,201	5,057
Total current liabilities	47,003	43,056
Deferred revenue, net of current portion	281	209
Operating lease liabilities, net of current portion	23,272	18,196
Total liabilities	70,556	61,461
Commitments and contingencies (Note 6)
Stockholders’ (deficit)/equity
Additional paid-in capital	277,485	263,943
Treasury stock, at cost	(23,652)	(20,430)
Accumulated deficit	(125,868)	(115,388)
Total stockholders’ equity	127,970	128,130
Total liabilities and stockholders’ equity	198,526	189,591
Class A common stock
Stockholders’ (deficit)/equity
Common stock	4	4
Class B common stock
Stockholders’ (deficit)/equity
Common stock	$ 1	$ 1

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Allowance for doubtful accounts	$ 1,456	$ 706
Class A common stock
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	43,146,159	41,714,870
Common stock, shares outstanding	40,404,012	39,041,065
Class B common stock
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	10,045,764	9,803,933
Common stock, shares outstanding	9,945,952	9,803,933

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue
Total revenue	$ 30,535	$ 23,379
Cost of revenue
Total cost of revenue	8,208	5,845
Gross profit	22,327	17,534
Operating expenses
Research and development	7,281	6,352
Sales and marketing	13,894	10,452
General and administrative	12,096	6,084
Total operating expenses	33,271	22,888
Loss from operations	(10,944)	(5,354)
Interest expense	(95)	(52)
Interest income	460	105
Other income	102	149
Loss before income taxes	(10,477)	(5,152)
Income tax expense	3	11
Net loss	(10,480)	(5,163)
Comprehensive loss	$ (10,480)	$ (5,163)
Net loss per share attributable to common shareholders, basic and diluted (in dollars per share)	$ (0.21)	$ (0.31)
Weighted-average shares outstanding used to compute net loss per share, basic and diluted (in shares)	50,143,971	16,684,041
Subscription
Revenue
Total revenue	$ 30,329	$ 23,332
Cost of revenue
Total cost of revenue	8,086	5,815
Professional services and other
Revenue
Total revenue	206	47
Cost of revenue
Total cost of revenue	$ 122	$ 30

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ (Deficit)/Equity (Unaudited) - USD ($) $ in Thousands	Total	Voting Common Stock	Additional Paid-in Capital	Series A, A-1, B, B-1, C and D Convertible Preferred Stock (in equity)	Treasury Stock	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2018		16,679,109		22,014,263	1,973,851
Beginning balance at Dec. 31, 2018	$ 25,733	$ 1	$ 1,844	$ 102,976	$ (10,507)	$ (68,581)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		7,395
Exercise of stock options	6		6
Net loss	(5,163)					(5,163)
Ending balance (in shares) at Mar. 31, 2019		16,686,504		22,014,263	1,973,851
Ending balance at Mar. 31, 2019	20,576	$ 1	1,850	$ 102,976	$ (10,507)	(73,744)
Beginning balance (in shares) at Dec. 31, 2019		48,844,998			2,673,805
Beginning balance at Dec. 31, 2019	128,130	$ 5	263,943		$ (20,430)	(115,388)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		343,682
Exercise of stock options	142		142
Stock-based compensation expense	3,522		3,522
Net issuance of common stock from equity award settlement (in shares)		504,721
Issuance of common stock from equity award settlement	0
Taxes paid related to net share settlement of equity awards (in shares)					159,809
Taxes paid related to net share settlement of equity awards	(3,082)				$ (3,082)
Issuance of common stock in connection with underwriters' purchase of over-allotment shares, related to initial public offering, net of underwriters' discounts, commissions and offering costs (in shares)		629,603
Issuance of common stock in connection with underwriters' purchase of over-allotment shares, related to initial public offering, net of underwriters' discounts, commissions and offering costs	9,738		9,738
Exercise of warrants (in shares)		26,960			8,345
Exercise of warrants	0		140		$ (140)
Net loss	(10,480)					(10,480)
Ending balance (in shares) at Mar. 31, 2020		50,349,964			2,841,959
Ending balance at Mar. 31, 2020	$ 127,970	$ 5	$ 277,485		$ (23,652)	$ (125,868)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities
Net loss	$ (10,480)	$ (5,163)
Adjustments to reconcile net loss to net cash (used in) operating activities
Depreciation of property and equipment	725	669
Amortization of line of credit issuance costs	65	47
Amortization of acquired intangible assets	357	385
Amortization of deferred commissions	1,627	1,020
Amortization of right-of-use operating lease asset	309	317
Stock-based compensation expense	3,522	0
Provision for accounts receivable allowances	910	222
Changes in operating assets and liabilities
Accounts receivable	(2,122)	(768)
Prepaid expenses and other current assets	(313)	(102)
Deferred commissions	(2,500)	(1,228)
Accounts payable and accrued expenses	(305)	(1,518)
Deferred revenue	4,299	2,565
Lease liabilities	(597)	(319)
Net cash (used in) operating activities	(4,503)	(3,873)
Cash flows from investing activities
Purchases of property and equipment	(313)	(156)
Net cash (used in) investing activities	(313)	(156)
Cash flows from financing activities
Proceeds from underwriters' purchase of over-allotment shares, related to the Company's initial public offering, net of underwriters’ discounts and commissions	9,954	0
Payments for line of credit issuance costs	(132)	(47)
Proceeds from exercise of stock options	142	6
Employee taxes paid related to the net share settlement of stock-based awards	(3,082)	0
Payments of deferred offering costs	0	(202)
Net cash provided by (used in) financing activities	6,882	(243)
Net increase (decrease) in cash and cash equivalents	2,066	(4,272)
Cash and cash equivalents
Beginning of period	135,310	26,190
End of period	137,376	21,918
Supplemental noncash disclosures
Operating lease liability arising from operating ROU asset obtained	5,481	0
Noncash exercise of stock warrants	140
Deferred offering costs, accrued but not yet paid	$ 216	$ 37

Nature of Operations and Summar

Nature of Operations and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations and Summary of Significant Accounting Policies	Nature of Operations and Summary of Significant Accounting Policies Nature of Operations Sprout Social, Inc. (“Sprout Social” or the “Company”), a Delaware corporation, began operating on April 21, 2010 to design, develop and operate a web-based comprehensive social media management tool enabling companies to manage and measure their online presence. Customers access their accounts online via a web-based interface or a mobile application. Some customers also purchase the Company’s professional services, which primarily consist of consulting and training services. The Company’s fiscal year end is December 31. The Company’s customers are primarily located throughout the United States, and a portion of customers are located in foreign countries. The Company is headquartered in Chicago, Illinois. Over-allotment Offering On January 15, 2020, the Company completed an equity offering in which it issued and sold 629,603 shares of Class A common stock for total net proceeds of $10.0 million after deducting underwriting discounts and commissions, as a result of the over-allotment option exercise by the underwriters of the Company’s initial public offering. Principles of Consolidation and Basis of Presentation The unaudited condensed consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The Company has prepared the unaudited condensed consolidated financial statements on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2019 , and these unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the results of the interim periods presented but are not necessarily indicative of the results of operations to be anticipated for the full year or any future period. The consolidated balance sheet as of December 31, 2019 included herein was derived from the audited consolidated financial statements as of that date but does not include all disclosures including certain disclosures required by GAAP on an annual basis. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The 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 for the year ended December 31, 2019 , filed with the SEC on February 28, 2020. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances, including but not limited to the potential impacts arising from the COVID-19 pandemic. As the extent and duration of the impact of the COVID-19 pandemic remains uncertain, the Company’s estimates and judgments may evolve as conditions change. The Company is not aware of any events or circumstances that would require an update to its estimates and judgments or a revision of the carrying value of its assets or liabilities as of May 7, 2020, the date of issuance of this Quarterly Report on Form 10-Q. Actual results could differ from those estimates. The Company’s most significant estimates and judgments are those related to the estimated period of benefit for incremental costs of obtaining a contract with a customer, the incremental borrowing rate for operating leases, calculation of allowance for doubtful accounts, useful lives of long-lived assets, stock-based compensation, income taxes, commitments and contingencies and litigation, among others. Summary of Significant Accounting Policies The Company’s significant accounting policies are discussed in Note 1, “Nature of Operations and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements as of and for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 , filed with the SEC on February 28, 2020 . There have been no significant changes to these policies during the three months ended March 31, 2020 . Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, including subsequent amendments, Measurement of Credit Losses on Financial Instruments (Topic 326) (“ASU 2016-13”), which modifies the accounting methodology for most financial instruments by establishing a new “expected loss model” that requires entities to estimate current expected credit losses on financial instruments, including trade accounts receivable, by using all practical and relevant information. This guidance is effective for interim and annual periods beginning after December 15, 2019. The Company adopted the ASU as of January 1, 2020, and the adoption did not have a material impact on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other-Internal-Use Software

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2020
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Revenue Recognition Disaggregation of Revenue The Company provides disaggregation of revenue based on geographic region in Note 7 and based on the subscription versus professional services and other classification on the condensed consolidated statements of operations and comprehensive loss, as it believes these best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Deferred Revenue Deferred revenue is recorded upon establishment of unconditional right to payment under non-cancelable contracts and is recognized as the revenue recognition criteria are met. The Company generally invoices customers in advance in monthly, quarterly, semi-annual and annual installments. The deferred revenue balance is influenced by several factors, including the compounding effects of renewals, invoice duration, timing and size. The amount of revenue recognized during the three months ended March 31, 2020 and 2019 that was included in deferred revenue at the beginning of each period was $14.4 million and $10.6 million , respectively. As of December 31, 2019 , including amounts already invoiced and amounts contracted but not yet invoiced, $42.1 million of revenue was expected to be recognized from remaining performance obligations, of which 91% is expected to be recognized in the next 12 months , with the remainder expected to be recognized the following year. As of March 31, 2020 , including amounts already invoiced and amounts contracted but not yet invoiced, $47.5 million of revenue is expected to be recognized from remaining performance obligations, of which 88% is expected to be recognized in the next 12 months

Operating Leases

Operating Leases	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Operating Leases	Operating Leases The Company entered into operating lease agreements for offices in Chicago, Illinois, San Francisco, California, and Seattle, Washington. The operating leases require escalating monthly rental payments ranging from $17,000 to $280,000 . Under the terms of the lease agreements, the Company is also responsible for its proportionate share of taxes and operating costs, which are treated as variable lease costs. The Chicago and Seattle leases expire in January 2028 and July 2020, respectively. The San Francisco lease expired in June 2019. The Company’s operating leases typically contain options to extend or terminate the term of the lease. The Company currently does not include any options to extend leases in its lease terms as it is not reasonably certain to exercise them. As such, it has recorded lease obligations only through the initial optional termination dates above. On January 21, 2020, the Company entered into a new lease agreement for an office in Seattle, Washington with an expected total future commitment of $7.9 million , expected lease commencement date in August 2020 and is expected to expire in November 2030. For accounting purposes under ASC 842, the lease commenced on January 23, 2020, resulting in the recording of a $5.5 million right-of-use operating lease asset and operating lease liability. The following table provides a summary of operating lease assets and liabilities as of March 31, 2020 (in thousands): Assets Operating lease right-of-use assets $ 10,884 Liabilities Operating lease liabilities 2,139 Operating lease liabilities, non-current 23,272 Total operating lease liabilities $ 25,411 Operating lease expense for the three months ended March 31, 2020 and March 31, 2019 was $0.7 million and $0.6 million , respectively. Variable lease costs for the three months ended March 31, 2020 and March 31, 2019 was $0.8 million each. Cash payments related to operating leases for the three months ended March 31, 2020 and March 31, 2019 were $1.6 million and $1.3 million , respectively. T he Company recognized $0.1 million of sublease rental income in other income on the consolidated statement of operations f or each of the three months ended March 31, 2020 and March 31, 2019 . A s of March 31, 2020 , the weighted-average remaining lease term is 8.4 years and the weighted-average discount rate is 5.7% . R emaining maturities of operating lease liabilities as of March 31, 2020 are as follows (in thousands): Years ending December 31, 2020 $ 484 2021 3,840 2022 3,930 2023 4,021 2024 4,117 Thereafter 16,353 Total future minimum lease payments $ 32,745 Less: imputed interest (7,334 ) Total operating lease liabilities $ 25,411

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The provision for income taxes for interim periods is generally determined using an estimate of the Company’s annual effective tax rate, excluding jurisdictions for which no tax benefit can be recognized due to valuation allowances. The Company’s effective tax rate generally differs from the U.S. federal statutory rate primarily due to a valuation allowance related to the Company’s federal and state deferred tax assets. The Company accounts for Global Intangible Low–Taxed Income (“GILTI”) as a current-period expense when incurred. Therefore, the Company has not recorded deferred taxes for basis differences expected to reverse in the future periods. There has historically been no federal or state provision for income taxes because the Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets. For the three months ended March 31, 2020 , the Company recognized an immaterial provision related to foreign income taxes. The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 by the United States. We are continuing to analyze the CARES Act, but it did not have a material impact on our provision for income taxes for the quarter ended March 31, 2020

Incentive Stock Plan

Incentive Stock Plan	3 Months Ended
	Mar. 31, 2020
Share-based Payment Arrangement [Abstract]
Incentive Stock Plan	Incentive Stock Plan Stock-based compensation expense is included in the unaudited condensed consolidated statements of operations and comprehensive loss as follows: Three Months Ended March 31, 2020 2019 (in thousands) Cost of revenue $ 295 $ — Research and development 484 — Sales and marketing 469 — General and administrative 2,274 — Total stock-based compensation $ 3,522 $ —

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Contractual Obligations The Company has non-cancellable minimum guaranteed purchase commitments for data and services. Contractual commitments as of March 31, 2020 are as follows (in thousands): Years ending December 31, 2020 $ 10,179 2021 20,486 2022 27,495 2023 15,222 2024 — Thereafter — Total contract commitments $ 73,382 Legal Matters From time to time in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings. There were no material such matters as of and for the period ended March 31, 2020 . Indemnification In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with third parties, including vendors, customers, investors and the Company’s directors and officers. Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. There were no material obligations under such indemnification agreements as of and for the period ended March 31, 2020 .

Segment and Geographic Data

Segment and Geographic Data	3 Months Ended
	Mar. 31, 2020
Segment Reporting [Abstract]
Segment and Geographic Data	Segment and Geographic Data The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information for purposes of making operating decisions, assessing financial performance and allocating resources. The Company’s CODM evaluates financial information on a consolidated basis. As the Company operates as one operating segment, all required segment financial information is found in the condensed consolidated financial statements. Long-lived assets by geographical region are based on the location of the legal entity that owns the assets. As of March 31, 2020 and December 31, 2019 , there were no significant long-lived assets held by entities outside of the United States. Revenue by geographical region is determined by location of the Company’s customers. Revenue from customers outside of the United States was approximately 29% for each of the three months ended March 31, 2020 and 2019 , respectively. Revenue by geographical region is as follows (in thousands): Three Months Ended March 31, 2020 2019 Americas $ 23,800 $ 18,239 EMEA 5,011 3,733 Asia Pacific 1,724 1,407 Total $ 30,535 $ 23,379

Net Loss per Share

Net Loss per Share	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
Net Loss per Share	Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of outstanding shares of common stock each period. Diluted net loss per share is calculated by giving effect to all potential dilutive common stock equivalents, which includes stock options, restricted stock units, restricted stock awards, preferred stock and warrants. Because the Company incurred net losses each period, the basic and diluted calculations are the same. Basic and diluted net loss per share are the same for each class of common stock, as both Class A and Class B stockholders are entitled to the same liquidation and dividend rights. The following table presents the calculation for basic and diluted net loss per share (in thousands, except share and per share data): Three Months Ended March 31, 2020 2019 Net loss attributable to common shareholders $ (10,480 ) $ (5,163 ) Weighted average common shares outstanding 50,143,971 16,684,041 Net loss per share, basic and diluted $ (0.21 ) $ (0.31 ) The following outstanding shares of common stock equivalents were excluded from the calculation of diluted net loss per share for each period, as the impact of including them would have been anti-dilutive. The Company’s RSUs included a triggering liquidation performance condition prior to vesting. As such, these are treated as contingently issuable shares and were excluded from potential dilutive impact until the triggering liquidation performance condition was satisfied upon completion of the IPO on December 17, 2019. March 31, 2020 2019 Stock options outstanding 833,241 1,293,725 RSUs 2,152,165 — Convertible preferred stock — 22,014,263 Warrants — 35,305 Total potentially dilutive shares 2,985,406 23,343,293

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2020
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events The Company has evaluated subsequent events after the balance sheet date through May 7, 2020, the date the financial statements were issued. Management has determined that no events or transactions have occurred subsequent to the balance sheet date that require disclosure in the financial statements.

Nature of Operations and Summ_2

Nature of Operations and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	The unaudited condensed consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The Company has prepared the unaudited condensed consolidated financial statements on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2019 , and these unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the results of the interim periods presented but are not necessarily indicative of the results of operations to be anticipated for the full year or any future period. The consolidated balance sheet as of December 31, 2019
Principles of Consolidation	All significant intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates	The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances, including but not limited to the potential impacts arising from the COVID-19 pandemic. As the extent and duration of the impact of the COVID-19 pandemic remains uncertain, the Company’s estimates and judgments may evolve as conditions change. The Company is not aware of any events or circumstances that would require an update to its estimates and judgments or a revision of the carrying value of its assets or liabilities as of May 7, 2020, the date of issuance of this Quarterly Report on Form 10-Q. Actual results could differ from those estimates. The Company’s most significant estimates and judgments are those related to the estimated period of benefit for incremental costs of obtaining a contract with a customer, the incremental borrowing rate for operating leases, calculation of allowance for doubtful accounts, useful lives of long-lived assets, stock-based compensation, income taxes, commitments and contingencies and litigation, among others.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, including subsequent amendments, Measurement of Credit Losses on Financial Instruments (Topic 326) (“ASU 2016-13”), which modifies the accounting methodology for most financial instruments by establishing a new “expected loss model” that requires entities to estimate current expected credit losses on financial instruments, including trade accounts receivable, by using all practical and relevant information. This guidance is effective for interim and annual periods beginning after December 15, 2019. The Company adopted the ASU as of January 1, 2020, and the adoption did not have a material impact on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other-Internal-Use Software
Deferred Revenue	Deferred Revenue Deferred revenue is recorded upon establishment of unconditional right to payment under non-cancelable contracts and is recognized as the revenue recognition criteria are met. The Company generally invoices customers in advance in monthly, quarterly, semi-annual and

Operating Leases (Tables)

Operating Leases (Tables)	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Summary of operating lease assets and liabilities	The following table provides a summary of operating lease assets and liabilities as of March 31, 2020 (in thousands): Assets Operating lease right-of-use assets $ 10,884 Liabilities Operating lease liabilities 2,139 Operating lease liabilities, non-current 23,272 Total operating lease liabilities $ 25,411
Schedule of remaining maturities of operating lease liabilities	R emaining maturities of operating lease liabilities as of March 31, 2020 are as follows (in thousands): Years ending December 31, 2020 $ 484 2021 3,840 2022 3,930 2023 4,021 2024 4,117 Thereafter 16,353 Total future minimum lease payments $ 32,745 Less: imputed interest (7,334 ) Total operating lease liabilities $ 25,411

Incentive Stock Plan (Tables)

Incentive Stock Plan (Tables)	3 Months Ended
	Mar. 31, 2020
Share-based Payment Arrangement [Abstract]
Schedule of stock-based compensation expense	Stock-based compensation expense is included in the unaudited condensed consolidated statements of operations and comprehensive loss as follows: Three Months Ended March 31, 2020 2019 (in thousands) Cost of revenue $ 295 $ — Research and development 484 — Sales and marketing 469 — General and administrative 2,274 — Total stock-based compensation $ 3,522 $ —

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Schedule of contractual commitments	Contractual commitments as of March 31, 2020 are as follows (in thousands): Years ending December 31, 2020 $ 10,179 2021 20,486 2022 27,495 2023 15,222 2024 — Thereafter — Total contract commitments $ 73,382

Segment and Geographic Data (Ta

Segment and Geographic Data (Tables)	3 Months Ended
	Mar. 31, 2020
Segment Reporting [Abstract]
Schedule of revenue by geographical region	Revenue by geographical region is as follows (in thousands): Three Months Ended March 31, 2020 2019 Americas $ 23,800 $ 18,239 EMEA 5,011 3,733 Asia Pacific 1,724 1,407 Total $ 30,535 $ 23,379

Net Loss per Share (Tables)

Net Loss per Share (Tables)	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
Schedule of basic and diluted net loss per share	The following table presents the calculation for basic and diluted net loss per share (in thousands, except share and per share data): Three Months Ended March 31, 2020 2019 Net loss attributable to common shareholders $ (10,480 ) $ (5,163 ) Weighted average common shares outstanding 50,143,971 16,684,041 Net loss per share, basic and diluted $ (0.21 ) $ (0.31 )
Schedule of shares excluded from the calculation of diluted net loss per share	The following outstanding shares of common stock equivalents were excluded from the calculation of diluted net loss per share for each period, as the impact of including them would have been anti-dilutive. The Company’s RSUs included a triggering liquidation performance condition prior to vesting. As such, these are treated as contingently issuable shares and were excluded from potential dilutive impact until the triggering liquidation performance condition was satisfied upon completion of the IPO on December 17, 2019. March 31, 2020 2019 Stock options outstanding 833,241 1,293,725 RSUs 2,152,165 — Convertible preferred stock — 22,014,263 Warrants — 35,305 Total potentially dilutive shares 2,985,406 23,343,293

Nature of Operations and Summ_3

Nature of Operations and Summary of Significant Accounting Policies (Details) - Class A common stock - Over-Allotment Option $ in Millions	Jan. 15, 2020USD ($)shares
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Shares issued and sold in offering (in shares) | shares	629,603
Total proceeds from offering | $	$ 10

Revenue Recognition (Details)

Revenue Recognition (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Revenue from Contract with Customer [Abstract]
Revenue recognized previously deferred	$ 14.4	$ 10.6
Revenue expected to be recognized	$ 47.5		$ 42.1
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized, percentage			91.00%
Revenue, remaining performance obligation, period			12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized, percentage	88.00%
Revenue, remaining performance obligation, period	12 months

Operating Leases - Narrative (D

Operating Leases - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Jan. 23, 2020	Jan. 21, 2020	Dec. 31, 2019
Lessee, Lease, Description [Line Items]
Expected total future commitment				$ 7,900
Operating lease, right-of-use assets	$ 10,884				$ 5,618
Operating lease liability	25,411
Operating lease expense	700	$ 600
Variable lease costs	800	800
Payments related to operating leases	1,600	1,300
Sublease rental income	$ 100	$ 100
Weighted-average remaining lease term	8 years 4 months 24 days
Weighted-average discount rate	5.70%
Minimum
Lessee, Lease, Description [Line Items]
Monthly rental payments	$ 17
Maximum
Lessee, Lease, Description [Line Items]
Monthly rental payments	$ 280
Lease Commenced on January 23, 2020
Lessee, Lease, Description [Line Items]
Operating lease, right-of-use assets			$ 5,500
Operating lease liability			$ 5,500

Operating Leases - Summary of o

Operating Leases - Summary of operating lease assets and liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Operating lease, right-of-use assets	$ 10,884	$ 5,618
Operating lease liabilities	2,139	2,331
Operating lease liabilities, net of current portion	23,272	$ 18,196
Total operating lease liabilities	$ 25,411

Operating Leases - Remaining ma

Operating Leases - Remaining maturities of operating lease liabilities (Details) $ in Thousands	Mar. 31, 2020USD ($)
Leases [Abstract]
2020	$ 484
2021	3,840
2022	3,930
2023	4,021
2024	4,117
Thereafter	16,353
Total future minimum lease payments	32,745
Less: imputed interest	(7,334)
Total operating lease liabilities	$ 25,411

Incentive Stock Plan (Details)

Incentive Stock Plan (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 3,522	$ 0
Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	295	0
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	484	0
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	469	0
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 2,274	$ 0

Commitments and Contingencies_2

Commitments and Contingencies (Details) $ in Thousands	Mar. 31, 2020USD ($)
Commitments and Contingencies Disclosure [Abstract]
2020	$ 10,179
2021	20,486
2022	27,495
2023	15,222
2024	0
Thereafter	0
Total contract commitments	$ 73,382

Segment and Geographic Data (De

Segment and Geographic Data (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)segment	Mar. 31, 2019USD ($)
Disaggregation of Revenue [Line Items]
Number of operating segments | segment	1
Total revenue	$ 30,535	$ 23,379
Americas
Disaggregation of Revenue [Line Items]
Total revenue	23,800	18,239
EMEA
Disaggregation of Revenue [Line Items]
Total revenue	5,011	3,733
Asia Pacific
Disaggregation of Revenue [Line Items]
Total revenue	$ 1,724	$ 1,407
Geographic Concentration Risk | Revenue from Contract with Customer Benchmark | Outside of the United States
Disaggregation of Revenue [Line Items]
Concentration risk percentage	29.00%	29.00%

Net Loss per Share - Basic and

Net Loss per Share - Basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share [Abstract]
Net loss attributable to common shareholders	$ (10,480)	$ (5,163)
Weighted average common shares outstanding (in shares)	50,143,971	16,684,041
Net loss per share, basic and diluted (in dollars per share)	$ (0.21)	$ (0.31)

Net Loss per Share - Shares exc

Net Loss per Share - Shares excluded from the calculation of diluted net loss per share (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares (in shares)	2,985,406	23,343,293
Stock options outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares (in shares)	833,241	1,293,725
RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares (in shares)	2,152,165	0
Convertible preferred stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares (in shares)	0	22,014,263
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares (in shares)	0	35,305