Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-37496 | |
Entity Registrant Name | RAPID7, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 35-2423994 | |
Entity Address, Address Line One | 120 Causeway Street | |
Entity Address, City or Town | Boston, | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02114 | |
City Area Code | 617 | |
Local Phone Number | 247-1717 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | RPD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 61,446,973 | |
Entity Central Index Key | 0001560327 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 182,727 | $ 207,287 |
Short-term investments | 139,434 | 84,162 |
Accounts receivable, net of allowance for credit losses of $789 and $2,299 at September 30, 2023 and December 31, 2022, respectively | 137,690 | 152,045 |
Deferred contract acquisition and fulfillment costs, current portion | 40,909 | 34,906 |
Prepaid expenses and other current assets | 35,087 | 31,907 |
Total current assets | 535,847 | 510,307 |
Long-term investments | 50,603 | 9,756 |
Property and equipment, net | 42,449 | 57,891 |
Operating lease right-of-use assets | 53,275 | 79,342 |
Deferred contract acquisition and fulfillment costs, non-current portion | 71,654 | 68,169 |
Goodwill | 536,305 | 515,631 |
Intangible assets, net | 99,993 | 101,269 |
Other assets | 9,174 | 16,626 |
Total assets | 1,399,300 | 1,358,991 |
Current liabilities: | ||
Accounts payable | 8,951 | 10,255 |
Accrued expenses | 63,388 | 80,306 |
Operating lease liabilities, current portion | 12,472 | 12,444 |
Deferred revenue, current portion | 421,898 | 426,599 |
Other current liabilities | 888 | 1,663 |
Total current liabilities | 507,597 | 531,267 |
Convertible senior notes, non-current portion, net | 928,892 | 815,948 |
Operating lease liabilities, non-current portion | 81,065 | 85,946 |
Deferred revenue, non-current portion | 29,344 | 31,040 |
Other long-term liabilities | 14,047 | 14,864 |
Total liabilities | 1,560,945 | 1,479,065 |
Stockholders’ deficit: | ||
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at September 30, 2023 and December 31, 2022; 0 shares issued at September 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.01 par value per share; 100,000,000 shares authorized at September 30, 2023 and December 31, 2022; 61,991,937 and 60,206,277 shares issued at September 30, 2023 and December 31, 2022, respectively; 61,422,358 and 59,719,469 shares outstanding at September 30. 2023 and December 31, 2022, respectively | 614 | 597 |
Treasury stock, at cost, 569,579 and 486,808 shares at September 30, 2023 and December 31, 2022, respectively | (4,765) | (4,764) |
Additional paid-in-capital | 873,381 | 746,249 |
Accumulated other comprehensive loss | (822) | (1,411) |
Accumulated deficit | (1,030,053) | (860,745) |
Total stockholders’ deficit | (161,645) | (120,074) |
Total liabilities and stockholders’ deficit | $ 1,399,300 | $ 1,358,991 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Net of allowance for doubtful accounts | $ 789 | $ 2,299 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 61,991,937 | 60,206,277 |
Common stock, shares outstanding (in shares) | 61,422,358 | 59,719,469 |
Treasury stock, shares (in shares) | 569,579 | 486,808 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 198,843 | $ 175,765 | $ 572,439 | $ 500,604 |
Cost of revenue: | ||||
Total cost of revenue | 57,830 | 53,850 | 171,993 | 159,414 |
Total gross profit | 141,013 | 121,915 | 400,446 | 341,190 |
Operating expenses: | ||||
Research and development | 39,940 | 48,622 | 137,048 | 147,341 |
Sales and marketing | 75,699 | 75,968 | 239,322 | 229,148 |
General and administrative | 17,866 | 20,561 | 64,961 | 62,967 |
Impairment of long-lived assets | 3,553 | 0 | 30,784 | 0 |
Restructuring | 19,996 | 0 | 19,996 | 0 |
Total operating expenses | 157,054 | 145,151 | 492,111 | 439,456 |
Loss from operations | (16,041) | (23,236) | (91,665) | (98,266) |
Other income (expense), net: | ||||
Interest income | 2,545 | 498 | 6,000 | 853 |
Interest expense | (56,515) | (2,749) | (62,005) | (8,200) |
Other income (expense), net | (4,518) | (2,205) | (18,093) | (5,211) |
Loss before income taxes | (74,529) | (27,692) | (165,763) | (110,824) |
Provision for income taxes | 2,082 | 1,035 | 3,545 | 2,508 |
Net loss | $ (76,611) | $ (28,727) | $ (169,308) | $ (113,332) |
Net loss per share, basic (in dollars per share) | $ (1.25) | $ (0.49) | $ (2.80) | $ (1.95) |
Net loss per share, diluted (in dollars per share) | $ (1.25) | $ (0.49) | $ (2.80) | $ (1.95) |
Weighted-average common shares outstanding, basic (in Shares) | 61,065,157 | 58,730,651 | 60,506,082 | 58,229,872 |
Weighted-average common shares outstanding, diluted (in Shares) | 61,065,157 | 58,730,651 | 60,506,082 | 58,229,872 |
Products | ||||
Revenue: | ||||
Total revenue | $ 189,876 | $ 166,496 | $ 545,349 | $ 474,643 |
Cost of revenue: | ||||
Total cost of revenue | 51,261 | 45,957 | 150,597 | 135,296 |
Professional services | ||||
Revenue: | ||||
Total revenue | 8,967 | 9,269 | 27,090 | 25,961 |
Cost of revenue: | ||||
Total cost of revenue | $ 6,569 | $ 7,893 | $ 21,396 | $ 24,118 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (76,611) | $ (28,727) | $ (169,308) | $ (113,332) |
Other comprehensive income (loss): | ||||
Change in fair value of cash flow hedges | (1,120) | (3,355) | (481) | (7,280) |
Adjustments for net (gains) losses realized on cash flow hedges and included in net loss | (49) | 1,361 | 531 | 2,438 |
Total change in unrealized (losses) gains on cash flow hedges | (1,169) | (1,994) | 50 | (4,842) |
Change in unrealized gains (losses) on investments | 97 | (166) | 539 | (1,044) |
Total other comprehensive (loss) income | (1,072) | (2,160) | 589 | (5,886) |
Comprehensive loss | $ (77,683) | $ (30,887) | $ (168,719) | $ (119,218) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) - USD ($) $ in Thousands | Total | Common stock | Treasury stock | Additional paid-in-capital | Accumulated other comprehensive loss | Accumulated deficit |
Common stock, beginning balance (in shares) at Dec. 31, 2021 | 57,695,000 | |||||
Beginning balance at Dec. 31, 2021 | $ (125,995) | $ 577 | $ (4,764) | $ 615,032 | $ (812) | $ (736,028) |
Treasury stock, beginning balance (in shares) at Dec. 31, 2021 | 487,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 96,111 | 96,111 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 218,000 | |||||
Issuance of common stock under employee stock purchase plan | 11,943 | $ 2 | 11,941 | |||
Vesting of restricted stock units (in shares) | 1,147,000 | |||||
Vesting of restricted stock units | 0 | $ 11 | (11) | |||
Shares withheld for employee taxes (in shares) | (82,000) | |||||
Shares withheld for employee taxes | (6,743) | (6,743) | ||||
Issuance of common stock upon exercise of stock options (in shares) | 193,000 | |||||
Issuance of common stock upon exercise of stock options | 1,621 | $ 2 | 1,619 | |||
Issuance of common stock in connection with conversion of convertible senior notes | (3) | (3) | ||||
Issuance of common stock related to acquisition (in shares) | 33,000 | |||||
Other comprehensive gain (loss) | (5,886) | (5,886) | ||||
Net loss | (113,332) | (113,332) | ||||
Common stock, ending balance (in shares) at Sep. 30, 2022 | 59,204,000 | |||||
Treasury stock, ending balance (in shares) at Sep. 30, 2022 | 487,000 | |||||
Ending balance at Sep. 30, 2022 | (142,284) | $ 592 | $ (4,764) | 717,946 | (6,698) | (849,360) |
Common stock, beginning balance (in shares) at Jun. 30, 2022 | 58,636,000 | |||||
Beginning balance at Jun. 30, 2022 | (148,155) | $ 586 | $ (4,764) | 681,194 | (4,538) | (820,633) |
Treasury stock, beginning balance (in shares) at Jun. 30, 2022 | 487,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 31,746 | 31,746 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 137,000 | |||||
Issuance of common stock under employee stock purchase plan | 6,233 | $ 1 | 6,232 | |||
Vesting of restricted stock units (in shares) | 381,000 | |||||
Vesting of restricted stock units | 0 | $ 4 | (4) | |||
Shares withheld for employee taxes (in shares) | (23,000) | |||||
Shares withheld for employee taxes | (1,637) | (1,637) | ||||
Issuance of common stock upon exercise of stock options (in shares) | 73,000 | |||||
Issuance of common stock upon exercise of stock options | 416 | $ 1 | 415 | |||
Other comprehensive gain (loss) | (2,160) | (2,160) | ||||
Net loss | (28,727) | (28,727) | ||||
Common stock, ending balance (in shares) at Sep. 30, 2022 | 59,204,000 | |||||
Treasury stock, ending balance (in shares) at Sep. 30, 2022 | 487,000 | |||||
Ending balance at Sep. 30, 2022 | $ (142,284) | $ 592 | $ (4,764) | 717,946 | (6,698) | (849,360) |
Common stock, beginning balance (in shares) at Dec. 31, 2022 | 59,719,469 | 59,720,000 | ||||
Beginning balance at Dec. 31, 2022 | $ (120,074) | $ 597 | $ (4,764) | 746,249 | (1,411) | (860,745) |
Treasury stock, beginning balance (in shares) at Dec. 31, 2022 | 486,808 | 487,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | $ 84,513 | 84,513 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 330,000 | |||||
Issuance of common stock under employee stock purchase plan | 11,323 | $ 4 | 11,319 | |||
Vesting of restricted stock units (in shares) | 1,139,000 | |||||
Vesting of restricted stock units | 0 | $ 10 | (10) | |||
Shares withheld for employee taxes (in shares) | (82,000) | |||||
Shares withheld for employee taxes | (4,012) | (4,012) | ||||
Issuance of common stock upon exercise of stock options (in shares) | 208,000 | |||||
Issuance of common stock upon exercise of stock options | 2,984 | $ 2 | 2,982 | |||
Purchase of capped calls related to convertible senior notes | (36,570) | (36,570) | ||||
Repurchase and inducement of convertible senior notes | 35,881 | 35,881 | ||||
Issuance of common stock related to acquisition (in shares) | 107,000 | |||||
Issuance of common stock in relation to an acquisition | 0 | $ 1 | (1) | |||
Repurchase of common stock issued in relation to acquisition (in shares) | 83,000 | |||||
Repurchase of common stock in relation to acquisition | 0 | $ (1) | 1 | |||
Reclassification of 2023 capped calls from equity to derivative asset | 33,029 | 33,029 | ||||
Other comprehensive gain (loss) | 589 | 589 | ||||
Net loss | $ (169,308) | (169,308) | ||||
Common stock, ending balance (in shares) at Sep. 30, 2023 | 61,422,358 | 61,422,000 | ||||
Treasury stock, ending balance (in shares) at Sep. 30, 2023 | 569,579 | 570,000 | ||||
Ending balance at Sep. 30, 2023 | $ (161,645) | $ 614 | $ (4,765) | 873,381 | (822) | (1,030,053) |
Common stock, beginning balance (in shares) at Jun. 30, 2023 | 60,940,000 | |||||
Beginning balance at Jun. 30, 2023 | (111,022) | $ 609 | $ (4,765) | 846,326 | 250 | (953,442) |
Treasury stock, beginning balance (in shares) at Jun. 30, 2023 | 570,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 23,719 | 23,719 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 152,000 | |||||
Issuance of common stock under employee stock purchase plan | 5,149 | $ 2 | 5,147 | |||
Vesting of restricted stock units (in shares) | 338,000 | |||||
Vesting of restricted stock units | 0 | $ 3 | (3) | |||
Shares withheld for employee taxes (in shares) | (29,000) | |||||
Shares withheld for employee taxes | (1,421) | (1,421) | ||||
Issuance of common stock upon exercise of stock options (in shares) | 21,000 | |||||
Issuance of common stock upon exercise of stock options | 302 | 302 | ||||
Purchase of capped calls related to convertible senior notes | (36,570) | (36,570) | ||||
Repurchase and inducement of convertible senior notes | 35,881 | 35,881 | ||||
Other comprehensive gain (loss) | (1,072) | (1,072) | ||||
Net loss | $ (76,611) | (76,611) | ||||
Common stock, ending balance (in shares) at Sep. 30, 2023 | 61,422,358 | 61,422,000 | ||||
Treasury stock, ending balance (in shares) at Sep. 30, 2023 | 569,579 | 570,000 | ||||
Ending balance at Sep. 30, 2023 | $ (161,645) | $ 614 | $ (4,765) | $ 873,381 | $ (822) | $ (1,030,053) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (169,308) | $ (113,332) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 34,528 | 30,587 |
Amortization of debt issuance costs | 3,061 | 3,036 |
Stock-based compensation expense | 84,836 | 92,304 |
Impairment of long-lived assets | 30,784 | 0 |
Change in fair value of derivative assets | 15,511 | 0 |
Induced conversion expense | 53,889 | 0 |
Other | 5,626 | 3,828 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 12,428 | 21,425 |
Deferred contract acquisition and fulfillment costs | (9,488) | (7,999) |
Prepaid expenses and other assets | 5,433 | (5,303) |
Accounts payable | (1,255) | 8,504 |
Accrued expenses | (17,968) | (12,241) |
Deferred revenue | (6,367) | 18,297 |
Other liabilities | (898) | (1,144) |
Net cash provided by operating activities | 40,812 | 37,962 |
Cash flows from investing activities: | ||
Business acquisition, net of cash acquired | (34,841) | 0 |
Purchases of property and equipment | (3,999) | (13,087) |
Capitalization of internal-use software costs | (13,033) | (12,648) |
Purchases of investments | (194,013) | (94,486) |
Sales/maturities of investments | 100,700 | 86,379 |
Other investments | 0 | (1,000) |
Net cash used in investing activities | (145,186) | (34,842) |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible senior notes, net of issuance costs paid of $7,200 | 292,800 | 0 |
Purchase of capped calls related to convertible senior notes | (36,570) | 0 |
Payments of debt issuance costs | 0 | (71) |
Payments for repurchase of convertible senior notes | (199,998) | (12) |
Payments related to business acquisitions | (2,250) | (300) |
Proceeds from capped call settlement | 17,518 | 0 |
Taxes paid related to net share settlement of equity awards | (4,012) | (6,743) |
Proceeds from employee stock purchase plan | 11,323 | 11,943 |
Proceeds from stock option exercises | 2,984 | 1,621 |
Net cash provided by financing activities | 81,795 | 6,438 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2,010) | (5,707) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (24,589) | 3,851 |
Cash, cash equivalents and restricted cash, beginning of period | 207,804 | 165,017 |
Cash, cash equivalents and restricted cash, end of period | 183,215 | 168,868 |
Supplemental cash flow information: | ||
Cash paid for interest on convertible senior notes | 4,087 | 4,087 |
Cash paid for income taxes, net of refunds | 1,165 | 1,503 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 182,727 | 168,353 |
Restricted cash included in prepaid expenses and other assets | 488 | 515 |
Total cash, cash equivalents and restricted cash | $ 183,215 | $ 168,868 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Convertible Debt | |
Payments of debt issuance costs | $ 7,200 |
Description of Business, Basis
Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies | Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies Description of Business Rapid7, Inc. and subsidiaries (“we,” “us” or “our”) are advancing security with visibility, analytics, and automation delivered through our Insight Platform. Our solutions simplify the complex, allowing security teams to work more effectively with IT and development to reduce vulnerabilities, monitor for malicious behavior, investigate and shut down attacks, and automate routine tasks. Basis of Presentation and Consolidation The accompanying unaudited consolidated financial statements have been prepared by us in accordance with accounting principles generally accepted in the United States of America (“GAAP”), as well as pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), regarding interim financial reporting. Accordingly, certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 24, 2023. The consolidated financial statements include our results of operations and those of our wholly-owned subsidiaries and reflect all adjustments (consisting solely of normal, recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. All intercompany transactions and balances have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The management estimates include, but are not limited to the determination of standalone selling prices in revenue transactions with multiple performance obligations, the estimated period of benefit for deferred contract acquisition costs, the useful lives and recoverability of long-lived assets, the valuation for credit losses, the valuation of stock-based compensation, the fair value of assets acquired and liabilities assumed in business combinations, the incremental borrowing rate for operating leases and the valuation for deferred tax assets. We base our estimates on historical experience and on various other assumptions that we believe are reasonable. Actual results could differ from those estimates. Significant Accounting Policies Our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies , to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no changes to the significant accounting policies, other than restructuring expense noted below, during the three and nine-month periods ended September 30, 2023. Restructuring Expense We record restructuring expense when management commits to and approves a restructuring plan, the restructuring plan identifies all significant actions, the period of time to complete the restructuring plan indicates that significant changes to the restructuring plan are not likely to occur, and employees who are impacted have been notified of the pending involuntary termination. A restructuring plan generally includes significant actions involving employee-related severance charges, employee-related benefits, and other charges associated with the restructuring (collectively, “restructuring expense”). Restructuring expense is recorded within restructuring in the condensed consolidated statement of operations. The restructuring liability accrued but not paid at the end of the reporting period is included within accrued expenses in the condensed consolidated balance sheet. Recent Accounting Pronouncements We have not identified any recently issued accounting pronouncements that would have a material impact to our consolidated financial statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers We generate revenue primarily from: (1) subscriptions from the sale of cloud-based subscriptions, managed services, term software licenses, content subscriptions and maintenance and support associated with our software licenses and (2) professional services from the sale of our deployment and training services related to our solutions, incident response services, penetration testing and security advisory services. The following table summarizes revenue from contracts with customers for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) Subscriptions $ 189,596 $ 165,687 $ 544,391 $ 470,925 Professional services 8,967 9,269 27,090 25,961 Other 280 809 958 3,718 Total revenue $ 198,843 $ 175,765 $ 572,439 $ 500,604 Subscriptions Subscriptions consists of revenue from our cloud-based subscription, managed services offerings, term software licenses, content subscriptions and maintenance and support associated with our software licenses. • We generate cloud-based subscription revenue primarily from sales of subscriptions to access our cloud platform, together with related support services to our customers. These arrangements do not provide the customer with the right to take possession of our software operating on our cloud platform at any time. Instead, customers are granted continuous access to our cloud platform over the contractual period. Revenue is recognized over time on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our cloud-based subscription contracts generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable. • Managed services offerings consist of fees generated when we operate our software and provide our capabilities on behalf of our customers. Revenue is recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our managed services offerings generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable. • For our term software licenses where the utility to the customer is dependent on the continued delivery of content subscriptions, we recognize the license revenue over the contractual term of the content subscription. For our term software licenses which are not dependent on the continued delivery of content subscriptions, the license is considered distinct from the maintenance and support, and we therefore recognize revenue attributable to the license at the time of delivery. • Content subscriptions and our maintenance and support services are sold with our perpetual and term software licenses. Revenue related to our content subscriptions associated with our software licenses is recognized ratably over the contractual period. Maintenance and support services are distinct from the perpetual and term software license and revenue attributable to maintenance and support services is recognized ratably over the contractual period. Professional Services All of our professional services are considered distinct performance obligations when sold stand alone or with other products. These contracts generally have terms of one year or less. For the majority of these contracts, revenue is recognized over time based upon the proportion of work performed to date. Contract Balances Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period consistent with the above methodology. For the three months ended September 30, 2023 and 2022, we recognized revenu e of $174.3 million and $153.8 million, respectively, and for the nine months ended September 30, 2023 and 2022, we recognized $366.5 million a nd $308.3 million, respectively, that was included in the corresponding contract liability balance at the beginning of the periods presented. Deferred revenue that will be realized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as non-current. We receive payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Unbilled receivables include amounts related to our contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced. If the right to consideration is based on satisfaction of another performance obligation in the contract other than the passage of time, we record a contract asset. As of September 30, 2023 and December 31, 2022, unbilled receivables of $2.4 million and $1.1 million, respectively, are included in prepaid expenses and other current assets in our consolidated balance sheet. As of September 30, 2023 and December 31, 2022, we had no contract assets recorded on our consolidated balance sheet. Transaction price allocated to the remaining performance obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2023. The estimated revenues do not include unexercised contract renewals. Next Twelve Months Thereafter (in thousands) Subscriptions $ 507,807 $ 234,563 Professional services 19,729 7,520 Other 1,255 428 Total $ 528,791 $ 242,511 The following table summarizes the activity of the deferred contract acquisition and fulfillment costs for the nine months ended September 30, 2023 and 2022: Nine Months Ended September 30, 2023 2022 (in thousands) Beginning balance $ 103,075 $ 87,165 Capitalization of contract acquisition and fulfillment costs 39,904 33,948 Amortization of deferred contract acquisition and fulfillment costs (30,416) (25,949) Ending balance $ 112,563 $ 95,164 |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations On March 14, 2023, we acquired Minerva Labs Ltd. (“Minerva”), a leading provider of anti-evasion and ransomware prevention technology, for a purchase price with an aggregate fair value of $34.6 million. The purchase consideration consisted of $35.0 million paid in cash at closing and a $0.4 million receivable for purchase price adjustments. Additionally, we issued an aggregate of 73,846 shares of our common stock to the founders of Minerva with a fair value of $3.6 million. The 73,846 shares of common stock will be accounted for as stock-based compensation expense over a 24-month period as continued service is required for the founders to receive their full amount of common stock. In the three and nine months ended September 30, 2023, we recognized stock-based compensation expense related to such shares in the amount of $0.4 million and $1.0 million, respectively. The following table summarizes the preliminary allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date (in thousands): Consideration Cash $ 34,977 Estimated purchase price receivable adjustment (365) Fair value of total consideration transferred $ 34,612 Recognized amount of identifiable assets acquired and liabilities assumed: Cash and cash equivalents $ 136 Other current assets 1,792 Other assets 43 Accounts payable and other current liabilities (438) Other long-term liabilities (395) Intangible asset 12,800 Total identifiable net assets assumed $ 13,938 Goodwill 20,674 Total purchase price allocation $ 34,612 These preliminary amounts are subject to subsequent adjustment as we obtain additional information to finalize certain components of working capital and deferred income taxes. We identified developed technology as the sole acquired intangible asset. The estimated fair value of the developed technology intangible asset was $12.8 million which was based on a valuation using the income approach. The estimated useful life of the developed technology is 8 years. The excess of the purchase price over the tangible assets acquired, the identifiable intangible asset acquired and assumed liabilities was recorded as goodwill. We believe that the amount of goodwill reflects the expected synergistic benefits of being able to leverage the integration of the technology acquired with our existing product offerings and being able to successfully market and sell these new features to our customer base. The goodwill was allocated to our one reporting unit. The acquired goodwill and intangible asset were not deductible for tax purposes. In the nine months ended September 30, 2023, we recorded $0.4 million of acquisition-related transaction costs related to the acquisition of Minerva to general and administrative expense. Our revenue and net loss attributable to the Minerva business for the three and nine months ended September 30, 2023 was not material. Pro forma results of operations have not been included, as the acquisition of Minerva was not material to our results of operations for any periods presented. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Our investments, which are all classified as available-for-sale, consisted of the following: As of September 30, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Description: U.S. government agencies $ 185,587 $ — $ (265) $ 185,322 Corporate bonds 1,501 — (10) 1,491 Agency bonds 3,250 — (26) 3,224 Total $ 190,338 $ — $ (301) $ 190,037 As of December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Description: U.S government agencies $ 66,234 $ 4 $ (545) $ 65,693 Corporate bonds 14,351 — (230) 14,121 Commercial paper 7,944 — — 7,944 Agency bonds 6,231 — (71) 6,160 Total $ 94,760 $ 4 $ (846) $ 93,918 As of September 30, 2023, our available-for-sale investments had maturities ranging from 1 to 18 months. As of December 31, 2022, our available-for-sale investments had maturities ranging from 2 to 19 months. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We measure certain financial assets and liabilities at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows: Level 1 : Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 : Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 : Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability. We consider an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and we consider an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. The following table presents our financial assets and liabilities measured and recorded at fair value on a recurring basis using the above input categories: As of September 30, 2023 Level 1 Level 2 Level 3 Total (in thousands) Description: Assets: U.S. Government agencies $ 185,322 $ — $ — $ 185,322 Money market funds 65,592 — — 65,592 Agency bonds — 3,224 — 3,224 Corporate bonds — 1,491 — 1,491 Total $ 250,914 $ 4,715 $ — $ 255,629 Liabilities: Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other liabilities) $ — $ 817 $ — $ 817 Total $ — $ 817 $ — $ 817 As of December 31, 2022 Level 1 Level 2 Level 3 Total (in thousands) Description: Assets: Money market funds $ 88,039 $ — $ — $ 88,039 U.S. Government agencies 65,693 — — 65,693 Corporate bonds — 14,121 — 14,121 Commercial paper — 7,944 — 7,944 Agency bonds — 6,160 — 6,160 Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets) — 988 — 988 Total assets $ 153,732 $ 29,213 $ — $ 182,945 Liabilities: Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other liabilities) $ — $ 1,559 $ — $ 1,559 Total liabilities $ — $ 1,559 $ — $ 1,559 As of September 30, 2023, the fair value of our 2.25%, 0.25% and 1.25% convertible senior notes due 2025, 2027 and 2029, as further described in Note 10, Debt |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and consist of the following: As of September 30, 2023 As of December 31, 2022 (in thousands) Computer equipment and software $ 26,103 $ 24,568 Furniture and fixtures 11,090 11,823 Leasehold improvements (1) 56,037 66,180 Total 93,230 102,571 Less accumulated depreciation (50,781) (44,680) Property and equipment, net $ 42,449 $ 57,891 (1) As of September 30, 2023, leasehold improvements with a net book value of $8.6 million were recorded as an impairment of long-lived assets related to certain idle office space at our corporate headquarters in Boston, Massachusetts and idle office space in Los Angeles, California, and Toronto, Canada. Refer to Note 11, Leases, for further details on the impairment of long-lived assets. Depreciation expense was $3.3 million and $3.5 million for the three months ended September 30, 2023 and 2022, respectively, and $10.9 million and $10.0 million for the nine months ended September 30, 2023 and 2022, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill was $536.3 million and $515.6 million as of September 30, 2023 and December 31, 2022, respectively. The following table displays the changes in the gross carrying amount of goodwill: Amount (in thousands) Balance at December 31, 2022 $ 515,631 Minerva acquisition 20,674 Balance at September 30, 2023 $ 536,305 The following table presents details of our intangible assets, which include acquired identifiable intangible assets and capitalized internal-use software costs: As of September 30, 2023 As of December 31, 2022 Weighted- Gross Carrying Accumulated Net Book Value Gross Carrying Accumulated Net Book Value (in thousands) Intangible assets subject to amortization: Developed technology 5.4 $ 135,355 $ (72,638) $ 62,717 $ 122,555 $ (58,645) $ 63,910 Customer relationships 4.5 12,000 (7,102) 4,898 12,000 (5,146) 6,854 Trade names 3.1 2,619 (2,334) 285 2,619 (1,874) 745 Total acquired intangible assets 149,974 (82,074) 67,900 137,174 (65,665) 71,509 Internal-use software 3.0 52,525 (20,432) 32,093 43,002 (13,242) 29,760 Total intangible assets $ 202,499 $ (102,506) $ 99,993 $ 180,176 $ (78,907) $ 101,269 Amortization expense was $8.3 million and $6.7 million for the three months ended September 30, 2023 and 2022, respectively and $23.6 million and $20.6 million for the nine months ended September 30, 2023 and 2022, respectively. Estimated future amortization expense of the acquired identifiable intangible assets and completed capitalized internal-use software costs as of September 30, 2023 was as follows (in thousands): 2023 (for the remaining three months) $ 7,777 2024 28,913 2025 24,940 2026 15,903 2027 6,806 2028 and thereafter 5,131 Total $ 89,470 |
Deferred Contract Acquisition a
Deferred Contract Acquisition and Fulfillment Costs | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Contract Acquisition and Fulfillment Costs | Revenue from Contracts with Customers We generate revenue primarily from: (1) subscriptions from the sale of cloud-based subscriptions, managed services, term software licenses, content subscriptions and maintenance and support associated with our software licenses and (2) professional services from the sale of our deployment and training services related to our solutions, incident response services, penetration testing and security advisory services. The following table summarizes revenue from contracts with customers for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) Subscriptions $ 189,596 $ 165,687 $ 544,391 $ 470,925 Professional services 8,967 9,269 27,090 25,961 Other 280 809 958 3,718 Total revenue $ 198,843 $ 175,765 $ 572,439 $ 500,604 Subscriptions Subscriptions consists of revenue from our cloud-based subscription, managed services offerings, term software licenses, content subscriptions and maintenance and support associated with our software licenses. • We generate cloud-based subscription revenue primarily from sales of subscriptions to access our cloud platform, together with related support services to our customers. These arrangements do not provide the customer with the right to take possession of our software operating on our cloud platform at any time. Instead, customers are granted continuous access to our cloud platform over the contractual period. Revenue is recognized over time on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our cloud-based subscription contracts generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable. • Managed services offerings consist of fees generated when we operate our software and provide our capabilities on behalf of our customers. Revenue is recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our managed services offerings generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable. • For our term software licenses where the utility to the customer is dependent on the continued delivery of content subscriptions, we recognize the license revenue over the contractual term of the content subscription. For our term software licenses which are not dependent on the continued delivery of content subscriptions, the license is considered distinct from the maintenance and support, and we therefore recognize revenue attributable to the license at the time of delivery. • Content subscriptions and our maintenance and support services are sold with our perpetual and term software licenses. Revenue related to our content subscriptions associated with our software licenses is recognized ratably over the contractual period. Maintenance and support services are distinct from the perpetual and term software license and revenue attributable to maintenance and support services is recognized ratably over the contractual period. Professional Services All of our professional services are considered distinct performance obligations when sold stand alone or with other products. These contracts generally have terms of one year or less. For the majority of these contracts, revenue is recognized over time based upon the proportion of work performed to date. Contract Balances Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period consistent with the above methodology. For the three months ended September 30, 2023 and 2022, we recognized revenu e of $174.3 million and $153.8 million, respectively, and for the nine months ended September 30, 2023 and 2022, we recognized $366.5 million a nd $308.3 million, respectively, that was included in the corresponding contract liability balance at the beginning of the periods presented. Deferred revenue that will be realized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as non-current. We receive payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Unbilled receivables include amounts related to our contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced. If the right to consideration is based on satisfaction of another performance obligation in the contract other than the passage of time, we record a contract asset. As of September 30, 2023 and December 31, 2022, unbilled receivables of $2.4 million and $1.1 million, respectively, are included in prepaid expenses and other current assets in our consolidated balance sheet. As of September 30, 2023 and December 31, 2022, we had no contract assets recorded on our consolidated balance sheet. Transaction price allocated to the remaining performance obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2023. The estimated revenues do not include unexercised contract renewals. Next Twelve Months Thereafter (in thousands) Subscriptions $ 507,807 $ 234,563 Professional services 19,729 7,520 Other 1,255 428 Total $ 528,791 $ 242,511 The following table summarizes the activity of the deferred contract acquisition and fulfillment costs for the nine months ended September 30, 2023 and 2022: Nine Months Ended September 30, 2023 2022 (in thousands) Beginning balance $ 103,075 $ 87,165 Capitalization of contract acquisition and fulfillment costs 39,904 33,948 Amortization of deferred contract acquisition and fulfillment costs (30,416) (25,949) Ending balance $ 112,563 $ 95,164 |
Derivative and Hedging Activiti
Derivative and Hedging Activities | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities To mitigate our exposure to foreign currency fluctuations resulting from certain expenses denominated in certain foreign currencies, we enter into forward contracts that are designated as cash flow hedging instruments. These forward contracts have contractual maturities of nineteen months or less, and as of September 30, 2023 and December 31, 2022, outstanding forward contracts had a total notional value of $50.3 million and $44.9 million, respectively. The notional value represents the gross amount of foreign currency that will be bought or sold upon maturity of the forward contract. During the three and nine months ended September 30, 2023, all cash flow hedges were considered effective. Refer to Note 5, Fair Value Measurements , for the fair values of our outstanding derivative instruments. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Convertible Senior Notes In May 2020, we issued $230.0 million aggregate principal amount of convertible senior notes due May 1, 2025 (the “2025 Notes”), in March 2021, we issued $600.0 million aggregate principal amount of convertible senior notes due March 15, 2027 (the “2027 Notes”) and in September 2023, we issued $300.0 million aggregate principal amount of convertible senior notes due March 15, 2029 (the “2029 Notes”) (collectively, the “Notes”). Further details of the Notes are as follows: Issuance Maturity Date Interest Rate First Interest Payment Date Effective Interest Rate Semi-Annual Interest Payment Dates Initial Conversion Rate per $1,000 Principal Initial Conversion Price Number of Shares (in millions) 2025 Notes May 1, 2025 2.25 % November 1, 2020 2.88 % May 1 and November 1 16.3875 $ 61.02 0.8 2027 Notes March 15, 2027 0.25 % September 15, 2021 0.67 % March 15 and September 15 9.6734 $ 103.38 5.8 2029 Notes March 15, 2029 1.25 % March 15, 2024 1.69 % March 15 and September 15 15.4213 $ 64.85 4.6 The 2025 Notes, the 2027 Notes and the 2029 Notes are senior unsecured obligations, do not contain any financial covenants and are governed by indentures between the Company, as issuer, and U.S. Trust Company, Bank National Association, as trustee (the “Indentures”). The total net proceeds from the 2025 Notes, the 2027 Notes and the 2029 Notes offerings, after deducting initial purchase discounts and estimated debt issuance costs, were $222.8 million, $585.0 million and $292.0 million, respectively. Terms of the Notes The holders of the Notes may convert their respective Notes at their option at any time prior to the close of business on the business day immediately preceding their respective convertible dates only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 for the 2025 Notes, March 20, 2024 for the 2027 Notes and September 21, 2026 for the 2029 Notes (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the respective Notes on each applicable trading day; • during the five business day period after any five consecutive trading day period for the 2025 Notes and any ten consecutive trading day period for the 2027 Notes and the 2029 Notes (the “measurement periods”) in which the trading price (as defined in the Indentures) per $1,000 principal amount of the applicable series of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate of the respective Notes on each such trading day; • if we call any or all of the respective Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the respective redemption date; or • upon the occurrence of specified corporate events (as set forth in the Indentures). As of September 30, 2023, the 2025 Notes, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder. The holders may convert the 2025 Notes, the 2027 Notes and the 2029 Notes at any time on or after November 1, 2024, December 15, 2026 and December 15, 2028, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the circumstances set forth above. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in the manner and subject to the terms and conditions provided in the Indentures. If we undergo a fundamental change (as set forth in the Indentures) at any time prior to the maturity date, holders of the Notes will have the right, at their option, to require us to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events that occur prior to the maturity date or following our issuance of a notice of redemption, in each case as described in the Indentures, we will increase the conversion rate for a holder of the Notes who elects to convert its Notes in connection with such a corporate event or during the related redemption period in certain circumstances. The 2025 Notes, the 2027 Notes and the 2029 Notes are redeemable after May 6, 2023, March 20, 2024 and September 21, 2026 (the “Redemption Dates”), respectively. On or after the respective Redemption Dates, we may redeem for cash all or any portion of the 2025 Notes, the 2027 Notes or the 2029 Notes, at our option, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including the trading day immediately preceding, the date on which we provide the redemption notice at a redemption price equal to 100% principal amount of the 2025 Notes, the 2027 Notes or the 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Partial Repurchase and Conversion of the 2025 Notes In September 2023, we used $201.0 million of the proceeds from the issuance of the 2029 Notes to repurchase and retire $184.0 million aggregate principal amount of the 2025 Notes and paid accrued and unpaid interest thereon. As a result of the induced conversion, we recorded $53.9 million in non-cash induced conversion expense which is included in interest expense in our consolidated statement of operations. The induced conversion expense represents the fair value of the consideration issued upon conversion in excess of the fair value of the securities issuable under the original terms of the 2025 Notes. Accounting for the Notes In accounting for the issuance of the Notes, the principal less debt issuance costs are recorded as debt on our consolidated balance sheet. The debt issuance costs are amortized to interest expense using the effective interest method over the contractual term of the Notes. The net carrying amount of the Notes as of September 30, 2023 and December 31, 2022 was as follows (in thousands): 2025 Notes 2027 Notes 2029 Notes Principal Unamortized debt issuance costs Total Principal Unamortized debt issuance costs Total Principal Unamortized debt issuance costs Total Balance at December 31, 2022 $ 229,992 $ (3,480) $ 226,512 $ 600,000 $ (10,564) $ 589,436 $ — $ — $ — Issuance — — — — — — 300,000 (7,984) $ 292,016 Partial repurchase (184,000) 2,010 (181,990) — — — — — Amortization of debt issuance costs — 990 990 — 1,855 1,855 — 73 73 Balance at September 30, 2023 $ 45,992 $ (480) $ 45,512 $ 600,000 $ (8,709) $ 591,291 $ 300,000 $ (7,911) $ 292,089 Interest expense related to the Notes was as follows (in thousands): Three Months Ended September 30, 2023 2022 2025 Notes 2027 Notes 2029 Notes Total 2025 Notes 2027 Notes Total Contractual interest expense $ 948 $ 375 $ 229 $ 1,552 $ 1,292 $ 377 $ 1,669 Amortization of debt issuance costs 289 631 73 993 371 626 997 Total interest expense $ 1,237 $ 1,006 $ 302 $ 2,545 $ 1,663 $ 1,003 $ 2,666 Nine Months Ended September 30, 2023 2022 2025 Notes 2027 Notes 2029 Notes Total 2025 Notes 2027 Notes Total Contractual interest expense $ 3,536 $ 1,125 $ 229 $ 4,890 $ 3,880 $ 1,127 $ 5,007 Amortization of debt issuance costs 990 1,855 73 2,918 1,052 1,840 2,892 Total interest expense $ 4,526 $ 2,980 $ 302 $ 7,808 $ 4,932 $ 2,967 $ 7,899 Capped Calls In connection with the offering of the 1.25% convertible senior notes due 2023 (the “2023 Notes”), the 2025 Notes, the 2027 Notes and the 2029 Notes, we entered into privately negotiated capped call transactions with certain counterparties (the “2023 Capped Calls, “2025 Capped Calls”, “2027 Capped Calls” and “2029 Capped Calls”) (collectively, the “Capped Calls”). The Capped Calls are expected to reduce potential dilution to our common stock upon conversion of a given series of notes and/or offset any cash payments that we are required to make in excess of the principal amount of converted notes of such series, as the case may be, with such reduction and/or offset subject to a cap. The Capped Calls are subject to adjustment upon the occurrence of certain specified extraordinary events affecting us, including merger events, tender offers and announcement events. 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 nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings and hedging disruptions. The following table sets forth other key terms and premiums paid for the Capped Calls related to each series of Notes: Capped Calls Entered into in Connection with the Issuance of the 2023 Notes Capped Calls Entered into in Connection with the Issuance of the 2025 Notes Capped Calls Entered into in Connection with the Issuance of the 2027 Notes Capped Calls Entered into in Connection with the Issuance of the 2029 Notes Initial strike price, subject to certain adjustments $ 41.59 $ 61.02 $ 103.38 $ 64.85 Cap price, subject to certain adjustments $ 63.98 $ 93.88 $ 159.04 $ 97.88 Total premium paid (in thousands) $ 26,910 $ 27,255 $ 76,020 $ 36,570 Expiration dates June 2, 2023 - August 1, 2023 March 4, 2025 - April 29, 2025 January 1, 2027 - March 11, 2027 February 13, 2029 - March 13, 2029 For accounting purposes, the 2023 Capped Calls, the 2025 Capped Calls, the 2027 Capped Calls and the 2029 Capped Calls are separate transactions, and not part of the terms of the 2023 Notes, the 2025 Notes, the 2027 Notes and the 2029 Notes. The 2023 Notes, 2025 Capped Calls, 2027 Capped Calls and 2029 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The 2025 Capped Calls were not redeemed with the partial repurchase of the 2025 Notes and remain outstanding. The 2023 Capped Calls were not redeemed with the repayment of the 2023 Notes in 2021. In accordance with the terms of the Capped Calls agreements, we elected to cash-settle the 2023 Capped Calls via written notice provided to the counterparties on May 31, 2023 (the “Notice Date”). The 2023 Capped Calls were settled over a 40-day trading period from June 2, 2023 to August 1, 2023, with a settlement date of August 3, 2023. Since cash settlement was elected, pursuant to ASC 815, the 2023 Capped Calls were deemed to meet the definition of a derivative instrument, requiring reclassification from stockholder's equity to a derivative asset at the fair value on the Notice Date, with subsequent changes in fair value to be recorded to earnings through the settlement date. The fair value on the Notice Date of $33.0 million was reclassified from stockholders' equity (additional paid-in capital) to derivative assets. The change in fair value of the derivative asset from the Notice Date to September 30, 2023 was $15.5 million and recorded to other income (expense) on our consolidated statement of operations. On August 3, 2023, we received $17.5 million in cash from the settlement of the 2023 Capped Calls. Credit Agreement In April 2020, we entered into a Credit and Security Agreement (the “Credit Agreement”), with KeyBank National Association that provides for a $30.0 million revolving credit facility, with a letter of credit sublimit of $15.0 million and an accordion feature under which we could increase the credit facility to up to $70.0 million. In May 2020, we utilized the accordion feature to increase the credit facility to $50.0 million. In December 2021, we entered into an amendment (the “Amendment”) in respect of our Credit and Security Agreement (as amended by the Amendment, the “Credit Agreement”), with KeyBank National Association, to, among other things, increase the credit facility from $50.0 million to $100.0 million and extend the maturity date to December 22, 2024. The Credit Agreement provides for a $100.0 million revolving credit facility, with a letter of credit sublimit of $15.0 million, and an accordion feature under which we can increase the credit facility to up to $150.0 million. We incurred fees of $0.4 million in connection with entering into the Credit Agreement. The fees are recorded in other current assets on the consolidated balance sheet and are amortized on a straight-line basis over the contractual term of the arrangement. The commitment fee of 0.2% per annum on the unused portion of the credit facility is expensed as incurred and included within interest expense on the consolidated statement of operations. The Credit Agreement contains certain financial covenants including a requirement that we maintain specified minimum recurring revenue and liquidity amounts. The borrowings under the Credit Agreement bear interest, at our option, at a rate equal to either (i) term SOFR plus a credit spread adjustment of 0.10% per annum plus a margin of 2.50% per annum or (ii) the alternate base rate (subject to a floor), plus an applicable margin equal to 0% per annum. As of September 30, 2023, we did not have any outstanding borrowings and we were in compliance with all covenants under the Credit Agreement. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases Our leases primarily relate to office facilities that have remaining terms of up to 8.5 years, some of which include one or more options to renew with renewal terms of up to 5 years and some of which include options to terminate the leases within 4 years. All of our leases are classified as operating leases. The components of lease expense were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) Operating lease cost $ 3,799 $ 4,997 $ 12,716 $ 15,240 Short-term lease costs 322 461 959 1,315 Variable lease costs 1,681 2,184 6,141 6,716 Total lease costs $ 5,802 $ 7,642 $ 19,816 $ 23,271 Supplemental balance sheet information related to the operating leases was as follows: As of September 30, 2023 As of December 31, 2022 Weighted average remaining lease term (in years) - operating leases 6.0 6.6 Weighted average discount rate - operating leases 6.3 % 6.2 % Supplemental cash flow information related to leases was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) Cash paid for amounts included in the measurement of lease liabilities $ 4,897 $ 3,057 $ 16,444 $ 11,093 ROU assets obtained in exchange for new lease obligations $ 620 $ 3,811 $ 4,457 $ 12,675 Maturities of operating lease liabilities as of September 30, 2023 were as follows (in thousands): 2023 (for the remaining three months) $ 3,469 2024 19,995 2025 18,851 2026 17,494 2027 16,699 2028 and thereafter 36,262 Total lease payments $ 112,770 Less: imputed interest (19,233) Total $ 93,537 |
Stock-Based Compensation Expens
Stock-Based Compensation Expense | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation Expense | Stock-Based Compensation Expense (a) General Stock-based compensation expense for restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), stock options and issuances of common stock pursuant to our employee stock purchase plan was classified in the accompanying consolidated statements of operations as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) Stock-based compensation expense: Cost of revenue $ 2,527 $ 2,745 $ 8,348 $ 7,610 Research and development 8,436 13,400 30,575 40,349 Sales and marketing 7,106 8,047 23,087 23,251 General and administrative 5,699 6,779 22,826 21,094 Total stock-based compensation expense $ 23,768 $ 30,971 $ 84,836 $ 92,304 We recognize compensation cost of all awards on a straight-line basis over the applicable vesting period, which is generally four years. Our Compensation Committee adopted and approved the performance goals, targets and payout formulas for our 2023 and 2022 bonus plans, including permitting our executive officers and certain other employees the opportunity to receive payment of their earned bonuses in the form of common stock (in lieu of cash). During the three months ended September 30, 2023 and 2022, we recognized stock-based compensation expense related to such bonuses in the amount of $50 thousand and $(0.8) million, respectively, and during the nine months ended based September 30, 2023 and 2022, we recognized stock-based compensation expense related to such bonuses in the amount of $1.1 million and $0.8 million, respectively, on the probable expected performance against the pre-established corporate financial objectives as of September 30, 2023 and 2022. For employees, including executive officers, who elect to receive their bonuses in the form of common stock (in lieu of cash), the payouts are expected to be made in the form of fully vested stock awards in the first quarter of the following year pursuant to our 2015 Equity Incentive Plan, as amended. The number of shares underlying such awards is determined by dividing the dollar value of the actual bonus award payment by the closing price per share of our common stock on the date of grant. (b) Restricted Stock Units and Performance-Based Restricted Stock Units RSUs and PSUs activity during the nine months ended September 30, 2023 was as follows: Shares Weighted-Average Unvested balance as of December 31, 2022 3,001,443 $ 83.88 Granted 2,232,289 41.54 Vested (1,139,340) 72.49 Forfeited (967,575) 67.85 Unvested balance as of September 30, 2023 3,126,817 $ 62.79 As of September 30, 2023, the unrecognized compensation expense related to our unvested RSUs and PSUs was $265.8 million. This unrecognized compensation expense will be recognized over an estimated weighted-average amortization period of 2.3 years. In February 2023, our Compensation Committee awarded 173,103 PSUs that require the achievement of an ARR target for the 2023 full-year to earn any payout and include a non-GAAP operating income margin modifier. In addition, the portion of the PSUs that are earned will be capped at a maximum of 200% of the target level payout and if certain ARR or non-GAAP operating income margin goals are not met, no PSUs will be earned. The PSUs have a performance period of one year and the earned PSUs will vest in three equal installments following each of the first, second and third anniversary of the vesting commencement date, subject to the participant’s continuous service as of each such date. Stock-based compensation expense related to these PSUs will be adjusted over the one-year performance period based on interim estimates of performance against the identified targets. (c) Stock Options Stock option activity during the nine months ended September 30, 2023 was as follows: Shares Weighted Weighted Aggregate Outstanding as of December 31, 2022 932,126 $ 12.70 3.2 $ 19,837 Granted — — Exercised (208,494) 14.31 $ 6,204 Forfeited/cancelled — — Outstanding as of September 30, 2023 723,632 $ 12.23 2.4 $ 24,276 Vested and exercisable as of September 30, 2023 723,632 $ 12.23 2.4 $ 24,276 (d) Employee Stock Purchase Plan Under the Rapid7, Inc. 2015 Employee Stock Purchase Plan (“ESPP”), employees may set aside up to 15% of their gross earnings, on an after-tax basis, to purchase our common stock at a discounted price, which is calculated at 85% of the lesser of: (i) the market value of our common stock at the beginning of each offering period and (ii) the market value of our common stock on the applicable purchase date. On March 15, 2023, we issued 177,886 shares of common stock to employees, with a purchase price of $34.71 per share, for aggregate proceeds of $6.2 million. On September 15, 2023, we issued 152,419 shares of common stock to employees, with a purchase price of $33.78 per share, for aggregate proceeds of $5.1 million. |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share The following table summarizes the computation of basic and diluted net loss per share of our common stock for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands, except share and per share data) Numerator: Net loss $ (76,611) $ (28,727) $ (169,308) $ (113,332) Denominator: Weighted-average common shares outstanding, basic and diluted 61,065,157 58,730,651 60,506,082 58,229,872 Net loss per share, basic and diluted $ (1.25) $ (0.49) $ (2.80) $ (1.95) We intend to settle any conversion of our 2025 Notes, 2027 Notes and 2029 Notes in cash, shares, or a combination thereof. The dilutive impact of the Notes for our calculation of diluted net income (loss) per share is considered using the if-converted method. For the three and nine months ended September 30, 2023 and 2022, the shares underlying the Notes were not considered in the calculation of diluted net loss per share as the effect would have been anti-dilutive. In connection with the issuance of the 2023 Notes, the 2025 Notes, the 2027 Notes and the 2029 Notes, we entered into 2023 Capped Calls, 2025 Capped Calls, 2027 Capped Calls and 2029 Capped Calls, which were not included for the purpose of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive. As further described in Note 10, Debt, the 2023 Capped Calls were not redeemed with the redemption of the 2023 Notes. The 2025 Capped Calls were not redeemed with the partial repurchase of the 2025 Notes and remain outstanding. As of September 30, 2023 and 2022, the 2025 Notes, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder. We had not received any conversion notices through the issuance date of our unaudited consolidated financial statements. For disclosure purposes, we have calculated the potentially dilutive effect of the conversion spread, which is included in the table below. The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been anti-dilutive: Three and Nine Months Ended September 30, 2023 2022 Options to purchase common stock 723,632 1,218,790 Unvested restricted stock units 3,126,817 3,279,901 Common stock issued in conjunction with acquisitions 115,041 240,041 Shares to be issued under ESPP 20,802 30,501 Convertible senior notes 11,183,611 9,572,955 Total 15,169,903 14,342,188 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Warranty We provide limited product warranties. Historically, any payments made under these provisions have been immaterial. (b) Litigation and Claims From time to time, we may be a party to litigation or subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. (c) Indemnification Obligations We agree to standard indemnification provisions in the ordinary course of business. Pursuant to these provisions, we agree to indemnify, hold harmless and reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally our customers, in connection with any United States patent, copyright or other intellectual property infringement claim by any third party arising from the use of our products or services in accordance with the agreement or arising from our gross negligence, willful misconduct or violation of the law (provided that there is not gross or willful misconduct on the part of the other party) with respect to our products or services. The term of these indemnification provisions is generally perpetual from the time of execution of the agreement. We carry insurance that covers certain third-party claims relating to our services and limits our exposure. We have never incurred costs to defend lawsuits or settle claims related to these indemnification provisions. As permitted under Delaware law, we have entered into indemnification agreements with our officers and directors, indemnifying them for certain events or occurrences while they serve as officers or directors of the company. |
Segment Information and Informa
Segment Information and Information about Geographic Areas | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information and Information about Geographic Areas | Segment Information and Information about Geographic Areas We operate in one segment. Our chief operating decision maker is our Chief Executive Officer, who makes operating decisions, assesses performance and allocates resources on a consolidated basis. Net revenues by geographic area presented based upon the location of the customer were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) United States $ 147,929 $ 131,628 $ 427,629 $ 376,752 Other 50,914 44,137 144,810 123,852 Total $ 198,843 $ 175,765 $ 572,439 $ 500,604 Property and equipment, net by geographic area was as follows: As of September 30, 2023 As of December 31, 2022 (in thousands) United States $ 29,709 $ 41,570 Other 12,740 16,321 Total $ 42,449 $ 57,891 |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring On August 7, 2023, our board of directors approved a restructuring plan that was designed to improve operational efficiencies, reduce operating costs and better align the Company’s workforce with current business needs, top strategic priorities and key growth opportunities (collectively, the “Restructuring Plan”). The Restructuring Plan included a reduction of the Company’s workforce by approximately 17%. During the three months ended September 30, 2023, we incurred $20.0 million of restructuring charges which were recorded within restructuring in the condensed consolidated statements of operations. In addition, we incurred $1.2 million of stock-based compensation expense related to acceleration of share-based awards. As of September 30, 2023, the restructuring liability accrued but not paid totaled $4.7 million, which is included within accrued expenses in the condensed consolidated balance sheets. We expect the remainder of the restructuring charges of approximately $3.5 million to be incurred in the fourth quarter of 2023 and the execution of the Restructuring Plan to be substantially complete by the end of the fourth quarter of 2023. Potential position eliminations in each country are subject to local law and consultation requirements, which may extend this process beyond the fourth quarter of 2023 in certain countries. The charges that we expect to incur are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual expenses may differ materially from the estimates disclosed above. We permanently closed certain idle office spaces in Plano, Texas, Los Angeles, California and Toronto, Canada, which resulted in an impairment loss in the three months ended September 30, 2023 of $3.6 million. Refer to Note 11, Leases, for further details on the impairment of long-lived assets. The following table presents the activity of the restructuring liability for the three months ended September 30, 2023: Restructuring Liability (in thousands) Balance at December 31, 2022 $ — Charges 19,996 Payments (15,318) Balance at September 30, 2023 $ 4,678 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net loss | $ (76,611) | $ (28,727) | $ (169,308) | $ (113,332) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 shares | Sep. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Andrew Burton [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | During the three months ended September 30, 2023, one of our executive officers, as set forth below, adopted or terminated a contract, instruction or written plan for the purchase or sale of Rapid7 securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). Name and Position Action Adoption or Transaction Date Type of Trading Arrangement Number of Shares of Common Stock to be Sold Expiration Date Andrew Burton, Chief Operating Officer Adoption August 15, 2023 Rule 10b5-1* 51,125** 5/1/2024*** * Contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. ** Represents the maximum number of shares that may be sold pursuant to the Rule 10b5-1 trading arrangement in amounts and prices determined in accordance with a formula set forth in the plan. The actual number of shares sold will be dependent on the satisfaction of certain conditions as set forth in the written plan. *** The Rule 10b5-1 trading arrangement will terminate on the earlier of the date all the shares under the plan are sold and the expiration date indicated, subject to early termination for specified events set forth in the plan. | |
Name | Andrew Burton | |
Title | Chief Operating Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | August 15, 2023 | |
Arrangement Duration | 260 days | |
Aggregate Available | 51,125 | 51,125 |
Description of Business, Basi_2
Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying unaudited consolidated financial statements have been prepared by us in accordance with accounting principles generally accepted in the United States of America (“GAAP”), as well as pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), regarding interim financial reporting. Accordingly, certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 24, 2023. The consolidated financial statements include our results of operations and those of our wholly-owned subsidiaries and reflect all adjustments (consisting solely of normal, recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. All intercompany transactions and balances have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. |
Restructuring Expense | Restructuring Expense We record restructuring expense when management commits to and approves a restructuring plan, the restructuring plan identifies all significant actions, the period of time to complete the restructuring plan indicates that significant changes to the restructuring plan are not likely to occur, and employees who are impacted have been notified of the pending involuntary termination. A restructuring plan generally includes significant actions involving employee-related severance charges, employee-related benefits, and other charges associated with the restructuring (collectively, “restructuring expense”). Restructuring expense is recorded within restructuring in the condensed consolidated statement of operations. The restructuring liability accrued but not paid at the end of the reporting period is included within accrued expenses in the condensed consolidated balance sheet. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements We have not identified any recently issued accounting pronouncements that would have a material impact to our consolidated financial statements. |
Revenue | Revenue from Contracts with Customers We generate revenue primarily from: (1) subscriptions from the sale of cloud-based subscriptions, managed services, term software licenses, content subscriptions and maintenance and support associated with our software licenses and (2) professional services from the sale of our deployment and training services related to our solutions, incident response services, penetration testing and security advisory services. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue from Contracts with Customers and Revenue by Region | The following table summarizes revenue from contracts with customers for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) Subscriptions $ 189,596 $ 165,687 $ 544,391 $ 470,925 Professional services 8,967 9,269 27,090 25,961 Other 280 809 958 3,718 Total revenue $ 198,843 $ 175,765 $ 572,439 $ 500,604 |
Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2023. The estimated revenues do not include unexercised contract renewals. Next Twelve Months Thereafter (in thousands) Subscriptions $ 507,807 $ 234,563 Professional services 19,729 7,520 Other 1,255 428 Total $ 528,791 $ 242,511 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of Allocation of Purchase Price to Estimated Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date (in thousands): Consideration Cash $ 34,977 Estimated purchase price receivable adjustment (365) Fair value of total consideration transferred $ 34,612 Recognized amount of identifiable assets acquired and liabilities assumed: Cash and cash equivalents $ 136 Other current assets 1,792 Other assets 43 Accounts payable and other current liabilities (438) Other long-term liabilities (395) Intangible asset 12,800 Total identifiable net assets assumed $ 13,938 Goodwill 20,674 Total purchase price allocation $ 34,612 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments Classified as Available-For-Sale | Our investments, which are all classified as available-for-sale, consisted of the following: As of September 30, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Description: U.S. government agencies $ 185,587 $ — $ (265) $ 185,322 Corporate bonds 1,501 — (10) 1,491 Agency bonds 3,250 — (26) 3,224 Total $ 190,338 $ — $ (301) $ 190,037 As of December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Description: U.S government agencies $ 66,234 $ 4 $ (545) $ 65,693 Corporate bonds 14,351 — (230) 14,121 Commercial paper 7,944 — — 7,944 Agency bonds 6,231 — (71) 6,160 Total $ 94,760 $ 4 $ (846) $ 93,918 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets Measured and Recorded at Fair Value on Recurring Basis | The following table presents our financial assets and liabilities measured and recorded at fair value on a recurring basis using the above input categories: As of September 30, 2023 Level 1 Level 2 Level 3 Total (in thousands) Description: Assets: U.S. Government agencies $ 185,322 $ — $ — $ 185,322 Money market funds 65,592 — — 65,592 Agency bonds — 3,224 — 3,224 Corporate bonds — 1,491 — 1,491 Total $ 250,914 $ 4,715 $ — $ 255,629 Liabilities: Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other liabilities) $ — $ 817 $ — $ 817 Total $ — $ 817 $ — $ 817 As of December 31, 2022 Level 1 Level 2 Level 3 Total (in thousands) Description: Assets: Money market funds $ 88,039 $ — $ — $ 88,039 U.S. Government agencies 65,693 — — 65,693 Corporate bonds — 14,121 — 14,121 Commercial paper — 7,944 — 7,944 Agency bonds — 6,160 — 6,160 Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets) — 988 — 988 Total assets $ 153,732 $ 29,213 $ — $ 182,945 Liabilities: Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other liabilities) $ — $ 1,559 $ — $ 1,559 Total liabilities $ — $ 1,559 $ — $ 1,559 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment are recorded at cost and consist of the following: As of September 30, 2023 As of December 31, 2022 (in thousands) Computer equipment and software $ 26,103 $ 24,568 Furniture and fixtures 11,090 11,823 Leasehold improvements (1) 56,037 66,180 Total 93,230 102,571 Less accumulated depreciation (50,781) (44,680) Property and equipment, net $ 42,449 $ 57,891 (1) As of September 30, 2023, leasehold improvements with a net book value of $8.6 million were recorded as an impairment of long-lived assets related to certain idle office space at our corporate headquarters in Boston, Massachusetts and idle office space in Los Angeles, California, and Toronto, Canada. Refer to Note 11, Leases, for further details on the impairment of long-lived assets. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill | The following table displays the changes in the gross carrying amount of goodwill: Amount (in thousands) Balance at December 31, 2022 $ 515,631 Minerva acquisition 20,674 Balance at September 30, 2023 $ 536,305 |
Summary of Identifiable Intangible Assets | The following table presents details of our intangible assets, which include acquired identifiable intangible assets and capitalized internal-use software costs: As of September 30, 2023 As of December 31, 2022 Weighted- Gross Carrying Accumulated Net Book Value Gross Carrying Accumulated Net Book Value (in thousands) Intangible assets subject to amortization: Developed technology 5.4 $ 135,355 $ (72,638) $ 62,717 $ 122,555 $ (58,645) $ 63,910 Customer relationships 4.5 12,000 (7,102) 4,898 12,000 (5,146) 6,854 Trade names 3.1 2,619 (2,334) 285 2,619 (1,874) 745 Total acquired intangible assets 149,974 (82,074) 67,900 137,174 (65,665) 71,509 Internal-use software 3.0 52,525 (20,432) 32,093 43,002 (13,242) 29,760 Total intangible assets $ 202,499 $ (102,506) $ 99,993 $ 180,176 $ (78,907) $ 101,269 |
Summary of Estimated Amortization Expense | Estimated future amortization expense of the acquired identifiable intangible assets and completed capitalized internal-use software costs as of September 30, 2023 was as follows (in thousands): 2023 (for the remaining three months) $ 7,777 2024 28,913 2025 24,940 2026 15,903 2027 6,806 2028 and thereafter 5,131 Total $ 89,470 |
Deferred Contract Acquisition_2
Deferred Contract Acquisition and Fulfillment Costs (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Activity of Deferred Contract Acquisition and Fulfillment Costs | The following table summarizes the activity of the deferred contract acquisition and fulfillment costs for the nine months ended September 30, 2023 and 2022: Nine Months Ended September 30, 2023 2022 (in thousands) Beginning balance $ 103,075 $ 87,165 Capitalization of contract acquisition and fulfillment costs 39,904 33,948 Amortization of deferred contract acquisition and fulfillment costs (30,416) (25,949) Ending balance $ 112,563 $ 95,164 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt Instruments | Further details of the Notes are as follows: Issuance Maturity Date Interest Rate First Interest Payment Date Effective Interest Rate Semi-Annual Interest Payment Dates Initial Conversion Rate per $1,000 Principal Initial Conversion Price Number of Shares (in millions) 2025 Notes May 1, 2025 2.25 % November 1, 2020 2.88 % May 1 and November 1 16.3875 $ 61.02 0.8 2027 Notes March 15, 2027 0.25 % September 15, 2021 0.67 % March 15 and September 15 9.6734 $ 103.38 5.8 2029 Notes March 15, 2029 1.25 % March 15, 2024 1.69 % March 15 and September 15 15.4213 $ 64.85 4.6 |
Summary of Liability and Equity Components of Convertible Debt | The net carrying amount of the Notes as of September 30, 2023 and December 31, 2022 was as follows (in thousands): 2025 Notes 2027 Notes 2029 Notes Principal Unamortized debt issuance costs Total Principal Unamortized debt issuance costs Total Principal Unamortized debt issuance costs Total Balance at December 31, 2022 $ 229,992 $ (3,480) $ 226,512 $ 600,000 $ (10,564) $ 589,436 $ — $ — $ — Issuance — — — — — — 300,000 (7,984) $ 292,016 Partial repurchase (184,000) 2,010 (181,990) — — — — — Amortization of debt issuance costs — 990 990 — 1,855 1,855 — 73 73 Balance at September 30, 2023 $ 45,992 $ (480) $ 45,512 $ 600,000 $ (8,709) $ 591,291 $ 300,000 $ (7,911) $ 292,089 Interest expense related to the Notes was as follows (in thousands): Three Months Ended September 30, 2023 2022 2025 Notes 2027 Notes 2029 Notes Total 2025 Notes 2027 Notes Total Contractual interest expense $ 948 $ 375 $ 229 $ 1,552 $ 1,292 $ 377 $ 1,669 Amortization of debt issuance costs 289 631 73 993 371 626 997 Total interest expense $ 1,237 $ 1,006 $ 302 $ 2,545 $ 1,663 $ 1,003 $ 2,666 Nine Months Ended September 30, 2023 2022 2025 Notes 2027 Notes 2029 Notes Total 2025 Notes 2027 Notes Total Contractual interest expense $ 3,536 $ 1,125 $ 229 $ 4,890 $ 3,880 $ 1,127 $ 5,007 Amortization of debt issuance costs 990 1,855 73 2,918 1,052 1,840 2,892 Total interest expense $ 4,526 $ 2,980 $ 302 $ 7,808 $ 4,932 $ 2,967 $ 7,899 |
Summary of Other Key Terms and Premiums Paid for the Capped Calls Related to Each Series of Notes | The following table sets forth other key terms and premiums paid for the Capped Calls related to each series of Notes: Capped Calls Entered into in Connection with the Issuance of the 2023 Notes Capped Calls Entered into in Connection with the Issuance of the 2025 Notes Capped Calls Entered into in Connection with the Issuance of the 2027 Notes Capped Calls Entered into in Connection with the Issuance of the 2029 Notes Initial strike price, subject to certain adjustments $ 41.59 $ 61.02 $ 103.38 $ 64.85 Cap price, subject to certain adjustments $ 63.98 $ 93.88 $ 159.04 $ 97.88 Total premium paid (in thousands) $ 26,910 $ 27,255 $ 76,020 $ 36,570 Expiration dates June 2, 2023 - August 1, 2023 March 4, 2025 - April 29, 2025 January 1, 2027 - March 11, 2027 February 13, 2029 - March 13, 2029 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Summary of Components of Lease Expense and Supplemental Cash Flow Information Related to Leases | The components of lease expense were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) Operating lease cost $ 3,799 $ 4,997 $ 12,716 $ 15,240 Short-term lease costs 322 461 959 1,315 Variable lease costs 1,681 2,184 6,141 6,716 Total lease costs $ 5,802 $ 7,642 $ 19,816 $ 23,271 Supplemental cash flow information related to leases was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) Cash paid for amounts included in the measurement of lease liabilities $ 4,897 $ 3,057 $ 16,444 $ 11,093 ROU assets obtained in exchange for new lease obligations $ 620 $ 3,811 $ 4,457 $ 12,675 |
Summary of Supplemental Balance Sheet Information Related to Operating Leases | Supplemental balance sheet information related to the operating leases was as follows: As of September 30, 2023 As of December 31, 2022 Weighted average remaining lease term (in years) - operating leases 6.0 6.6 Weighted average discount rate - operating leases 6.3 % 6.2 % |
Summary of Maturities of Operating Lease Liabilities and Future Minimum Payments under Non-cancellable Leases | Maturities of operating lease liabilities as of September 30, 2023 were as follows (in thousands): 2023 (for the remaining three months) $ 3,469 2024 19,995 2025 18,851 2026 17,494 2027 16,699 2028 and thereafter 36,262 Total lease payments $ 112,770 Less: imputed interest (19,233) Total $ 93,537 |
Stock-Based Compensation Expe_2
Stock-Based Compensation Expense (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock-Based Compensation Expense | Stock-based compensation expense for restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), stock options and issuances of common stock pursuant to our employee stock purchase plan was classified in the accompanying consolidated statements of operations as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) Stock-based compensation expense: Cost of revenue $ 2,527 $ 2,745 $ 8,348 $ 7,610 Research and development 8,436 13,400 30,575 40,349 Sales and marketing 7,106 8,047 23,087 23,251 General and administrative 5,699 6,779 22,826 21,094 Total stock-based compensation expense $ 23,768 $ 30,971 $ 84,836 $ 92,304 |
Summary of Restricted Stock and Restricted Stock Unit Activity | RSUs and PSUs activity during the nine months ended September 30, 2023 was as follows: Shares Weighted-Average Unvested balance as of December 31, 2022 3,001,443 $ 83.88 Granted 2,232,289 41.54 Vested (1,139,340) 72.49 Forfeited (967,575) 67.85 Unvested balance as of September 30, 2023 3,126,817 $ 62.79 |
Summary of Stock Option Activity | Stock option activity during the nine months ended September 30, 2023 was as follows: Shares Weighted Weighted Aggregate Outstanding as of December 31, 2022 932,126 $ 12.70 3.2 $ 19,837 Granted — — Exercised (208,494) 14.31 $ 6,204 Forfeited/cancelled — — Outstanding as of September 30, 2023 723,632 $ 12.23 2.4 $ 24,276 Vested and exercisable as of September 30, 2023 723,632 $ 12.23 2.4 $ 24,276 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Loss Per Share of Common Stock | The following table summarizes the computation of basic and diluted net loss per share of our common stock for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands, except share and per share data) Numerator: Net loss $ (76,611) $ (28,727) $ (169,308) $ (113,332) Denominator: Weighted-average common shares outstanding, basic and diluted 61,065,157 58,730,651 60,506,082 58,229,872 Net loss per share, basic and diluted $ (1.25) $ (0.49) $ (2.80) $ (1.95) |
Summary of Anti-Dilutive Securities Excluded from Computation Diluted Weighted Average Shares Outstanding | The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been anti-dilutive: Three and Nine Months Ended September 30, 2023 2022 Options to purchase common stock 723,632 1,218,790 Unvested restricted stock units 3,126,817 3,279,901 Common stock issued in conjunction with acquisitions 115,041 240,041 Shares to be issued under ESPP 20,802 30,501 Convertible senior notes 11,183,611 9,572,955 Total 15,169,903 14,342,188 |
Segment Information and Infor_2
Segment Information and Information about Geographic Areas (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Summary of Net Revenues of Customer by Geographic Area | Net revenues by geographic area presented based upon the location of the customer were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) United States $ 147,929 $ 131,628 $ 427,629 $ 376,752 Other 50,914 44,137 144,810 123,852 Total $ 198,843 $ 175,765 $ 572,439 $ 500,604 |
Summary of Property and Equipment, Net by Geographic Area | Property and equipment, net by geographic area was as follows: As of September 30, 2023 As of December 31, 2022 (in thousands) United States $ 29,709 $ 41,570 Other 12,740 16,321 Total $ 42,449 $ 57,891 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Liability | The following table presents the activity of the restructuring liability for the three months ended September 30, 2023: Restructuring Liability (in thousands) Balance at December 31, 2022 $ — Charges 19,996 Payments (15,318) Balance at September 30, 2023 $ 4,678 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Summary of Revenue from Contracts with Customers and Revenue by Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 198,843 | $ 175,765 | $ 572,439 | $ 500,604 |
Subscriptions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 189,596 | 165,687 | 544,391 | 470,925 |
Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 8,967 | 9,269 | 27,090 | 25,961 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 280 | $ 809 | $ 958 | $ 3,718 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||||
Revenue recognized | $ 174,300,000 | $ 153,800,000 | $ 366,500,000 | $ 308,300,000 | |
Unbilled receivables | 2,400,000 | 2,400,000 | $ 1,100,000 | ||
Contracts assets | $ 0 | $ 0 | $ 0 | ||
Professional services | |||||
Disaggregation of Revenue [Line Items] | |||||
Contractual period | 1 year |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 528,791 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | 242,511 |
Subscriptions | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 507,807 |
Expected timing of satisfaction, period | 12 months |
Subscriptions | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 234,563 |
Expected timing of satisfaction, period | |
Professional services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 19,729 |
Expected timing of satisfaction, period | 12 months |
Professional services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 7,520 |
Expected timing of satisfaction, period | |
Other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 1,255 |
Expected timing of satisfaction, period | 12 months |
Other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 428 |
Expected timing of satisfaction, period |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 14, 2023 USD ($) shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) reportingUnit | Sep. 30, 2022 USD ($) | |
Business Acquisition [Line Items] | |||||
Share-based payment arrangement, expense | $ 23,768 | $ 30,971 | $ 84,836 | $ 92,304 | |
Number of reporting units | reportingUnit | 1 | ||||
Minerva labs | |||||
Business Acquisition [Line Items] | |||||
Fair value of total consideration transferred | $ 34,612 | ||||
Purchase consideration | 34,977 | ||||
Estimated purchase price receivable adjustment | $ 365 | ||||
Common stock shares issued (in shares) | shares | 73,846 | ||||
Common stock, fair value of shares issued | $ 3,600 | ||||
Stock based payment arrangement, expense requisite service period | 24 months | ||||
Intangible asset | $ 12,800 | ||||
Acquisition related transaction costs | $ 400 | ||||
Minerva labs | Developed technology | |||||
Business Acquisition [Line Items] | |||||
Share-based payment arrangement, expense | $ 400 | $ 1,000 | |||
Useful life (in years) | 8 years |
Business Combinations - Summary
Business Combinations - Summary of Preliminary Allocation of Purchase Price to Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 14, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Recognized amount of identifiable assets acquired and liabilities assumed: | |||
Goodwill | $ 536,305 | $ 515,631 | |
Minerva labs | |||
Consideration | |||
Cash | $ 34,977 | ||
Estimated purchase price receivable adjustment | (365) | ||
Fair value of total consideration transferred | 34,612 | ||
Recognized amount of identifiable assets acquired and liabilities assumed: | |||
Cash and cash equivalents | 136 | ||
Other current assets | 1,792 | ||
Other assets | 43 | ||
Accounts payable and other current liabilities | (438) | ||
Other long-term liabilities | (395) | ||
Intangible asset | 12,800 | ||
Total identifiable net assets assumed | 13,938 | ||
Goodwill | 20,674 | ||
Total purchase price allocation | $ 34,612 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | $ 190,338 | $ 94,760 |
Gross Unrealized Gains | 0 | 4 |
Gross Unrealized Losses | (301) | (846) |
Fair Value | $ 190,037 | $ 93,918 |
Minimum | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Remaining maturity | 1 month | 2 months |
Maximum | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Remaining maturity | 18 months | 19 months |
U.S. government agencies | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | $ 185,587 | $ 66,234 |
Gross Unrealized Gains | 0 | 4 |
Gross Unrealized Losses | (265) | (545) |
Fair Value | 185,322 | 65,693 |
Corporate bonds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 1,501 | 14,351 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (10) | (230) |
Fair Value | 1,491 | 14,121 |
Commercial paper | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 7,944 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 7,944 | |
Agency bonds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 3,250 | 6,231 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (26) | (71) |
Fair Value | $ 3,224 | $ 6,160 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets Measured and Recorded at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets: | ||
Available-for-sale securities | $ 190,037 | $ 93,918 |
The Notes, Due 2025 | Convertible Debt | ||
Liabilities: | ||
Debt instrument, interest rate | 2.25% | |
Convertible debt, fair value | $ 47,100 | |
The Notes, Due 2027 | Convertible Debt | ||
Liabilities: | ||
Debt instrument, interest rate | 0.25% | |
Convertible debt, fair value | $ 511,100 | |
The Notes, Due 2029 | Convertible Debt | ||
Liabilities: | ||
Debt instrument, interest rate | 1.25% | |
Convertible debt, fair value | $ 290,700 | |
Corporate bonds | ||
Assets: | ||
Available-for-sale securities | 1,491 | 14,121 |
Commercial paper | ||
Assets: | ||
Available-for-sale securities | 7,944 | |
Agency bonds | ||
Assets: | ||
Available-for-sale securities | 3,224 | 6,160 |
Fair Value, Recurring | ||
Assets: | ||
Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets) | 988 | |
Total | 255,629 | 182,945 |
Liabilities: | ||
Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other liabilities) | 817 | 1,559 |
Total | 817 | 1,559 |
Fair Value, Recurring | Corporate bonds | ||
Assets: | ||
Available-for-sale securities | 1,491 | 14,121 |
Fair Value, Recurring | Commercial paper | ||
Assets: | ||
Available-for-sale securities | 7,944 | |
Fair Value, Recurring | Agency bonds | ||
Assets: | ||
Available-for-sale securities | 3,224 | 6,160 |
Fair Value, Recurring | U.S. Government agencies | ||
Assets: | ||
Available-for-sale securities | 185,322 | 65,693 |
Fair Value, Recurring | Money market funds | ||
Assets: | ||
Money market funds | 65,592 | 88,039 |
Level 1 | Fair Value, Recurring | ||
Assets: | ||
Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets) | 0 | |
Total | 250,914 | 153,732 |
Liabilities: | ||
Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other liabilities) | 0 | 0 |
Total | 0 | 0 |
Level 1 | Fair Value, Recurring | Corporate bonds | ||
Assets: | ||
Available-for-sale securities | 0 | 0 |
Level 1 | Fair Value, Recurring | Commercial paper | ||
Assets: | ||
Available-for-sale securities | 0 | |
Level 1 | Fair Value, Recurring | Agency bonds | ||
Assets: | ||
Available-for-sale securities | 0 | 0 |
Level 1 | Fair Value, Recurring | U.S. Government agencies | ||
Assets: | ||
Available-for-sale securities | 185,322 | 65,693 |
Level 1 | Fair Value, Recurring | Money market funds | ||
Assets: | ||
Money market funds | 65,592 | 88,039 |
Level 2 | Fair Value, Recurring | ||
Assets: | ||
Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets) | 988 | |
Total | 4,715 | 29,213 |
Liabilities: | ||
Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other liabilities) | 817 | 1,559 |
Total | 817 | 1,559 |
Level 2 | Fair Value, Recurring | Corporate bonds | ||
Assets: | ||
Available-for-sale securities | 1,491 | 14,121 |
Level 2 | Fair Value, Recurring | Commercial paper | ||
Assets: | ||
Available-for-sale securities | 7,944 | |
Level 2 | Fair Value, Recurring | Agency bonds | ||
Assets: | ||
Available-for-sale securities | 3,224 | 6,160 |
Level 2 | Fair Value, Recurring | U.S. Government agencies | ||
Assets: | ||
Available-for-sale securities | 0 | 0 |
Level 2 | Fair Value, Recurring | Money market funds | ||
Assets: | ||
Money market funds | 0 | 0 |
Level 3 | Fair Value, Recurring | ||
Assets: | ||
Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets) | 0 | |
Total | 0 | 0 |
Liabilities: | ||
Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other liabilities) | 0 | 0 |
Total | 0 | 0 |
Level 3 | Fair Value, Recurring | Corporate bonds | ||
Assets: | ||
Available-for-sale securities | 0 | 0 |
Level 3 | Fair Value, Recurring | Commercial paper | ||
Assets: | ||
Available-for-sale securities | 0 | |
Level 3 | Fair Value, Recurring | Agency bonds | ||
Assets: | ||
Available-for-sale securities | 0 | 0 |
Level 3 | Fair Value, Recurring | U.S. Government agencies | ||
Assets: | ||
Available-for-sale securities | 0 | 0 |
Level 3 | Fair Value, Recurring | Money market funds | ||
Assets: | ||
Money market funds | $ 0 | $ 0 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 93,230 | $ 93,230 | $ 102,571 | ||
Less accumulated depreciation | (50,781) | (50,781) | (44,680) | ||
Property and equipment, net | 42,449 | 42,449 | 57,891 | ||
Impairment of long-lived assets | 3,553 | $ 0 | 30,784 | $ 0 | |
Computer equipment and software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 26,103 | 26,103 | 24,568 | ||
Furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 11,090 | 11,090 | 11,823 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 56,037 | 56,037 | $ 66,180 | ||
Impairment of long-lived assets | $ 1,600 | $ 8,600 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 3.3 | $ 3.5 | $ 10.9 | $ 10 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 536,305 | $ 536,305 | $ 515,631 | ||
Amortization expense | 8,300 | $ 6,700 | 23,600 | $ 20,600 | |
Capitalized computer software exclude of gross | $ 10,500 | 10,500 | |||
Impairment of capitalized internal-use software | $ 3,500 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Goodwill Activity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 515,631 |
Goodwill, ending balance | 536,305 |
Minerva acquisition | |
Goodwill [Roll Forward] | |
Goodwill, acquired during period | $ 20,674 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Summary of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total acquired intangible assets, gross carrying amount | $ 149,974 | $ 137,174 |
Total acquired intangible assets, accumulated amortization | (82,074) | (65,665) |
Total acquired intangible assets, net book value | 67,900 | 71,509 |
Accumulated Amortization | (102,506) | (78,907) |
Total intangible assets, gross carrying amount | 202,499 | 180,176 |
Intangible assets, net book value | $ 99,993 | 101,269 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Life (years) | 5 years 4 months 24 days | |
Total acquired intangible assets, gross carrying amount | $ 135,355 | 122,555 |
Total acquired intangible assets, accumulated amortization | (72,638) | (58,645) |
Total acquired intangible assets, net book value | $ 62,717 | 63,910 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Life (years) | 4 years 6 months | |
Total acquired intangible assets, gross carrying amount | $ 12,000 | 12,000 |
Total acquired intangible assets, accumulated amortization | (7,102) | (5,146) |
Total acquired intangible assets, net book value | $ 4,898 | 6,854 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Life (years) | 3 years 1 month 6 days | |
Total acquired intangible assets, gross carrying amount | $ 2,619 | 2,619 |
Total acquired intangible assets, accumulated amortization | (2,334) | (1,874) |
Total acquired intangible assets, net book value | $ 285 | 745 |
Internal-use software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Life (years) | 3 years | |
Gross Carrying Amount | $ 52,525 | 43,002 |
Accumulated Amortization | (20,432) | (13,242) |
Net Book Value | $ 32,093 | $ 29,760 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Summary of Estimated Amortization Expense (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 (for the remaining three months) | $ 7,777 |
2024 | 28,913 |
2025 | 24,940 |
2026 | 15,903 |
2027 | 6,806 |
2028 and thereafter | 5,131 |
Net Book Value | $ 89,470 |
Deferred Contract Acquisition_3
Deferred Contract Acquisition and Fulfillment Costs - Summary of Activity of Deferred Contract Acquisition and Fulfillment Costs (Details) - Contract Acquisition and Fulfillment Costs - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Capitalized Contract Costs [Roll Forward] | ||
Beginning balance | $ 103,075 | $ 87,165 |
Capitalization of contract acquisition and fulfillment costs | 39,904 | 33,948 |
Amortization of deferred contract acquisition and fulfillment costs | (30,416) | (25,949) |
Ending balance | $ 112,563 | $ 95,164 |
Derivatives and Hedging Activit
Derivatives and Hedging Activities - Balance Sheet Location (Details) - Designated as Hedging Instrument - Foreign Currency Forward Contracts Designated as Cash Flow Hedges - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Derivative [Line Items] | ||
Term of contract | 19 months | 19 months |
Notional amount | $ 50.3 | $ 44.9 |
Debt - Additional Information (
Debt - Additional Information (Details) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 9 Months Ended | ||||||||
Aug. 03, 2023 USD ($) | Sep. 30, 2023 USD ($) | Dec. 31, 2021 USD ($) | Mar. 31, 2021 USD ($) | May 31, 2020 USD ($) day | Aug. 01, 2023 day | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Apr. 30, 2020 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||
Proceeds from convertible debt | $ 292,800,000 | $ 0 | |||||||||||
Induced conversion expense | 53,889,000 | 0 | |||||||||||
Other income (expense), net | $ (4,518,000) | $ (2,205,000) | (18,093,000) | $ (5,211,000) | |||||||||
Convertible Debt | Debt Covenant One | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Threshold trading days | day | 20 | ||||||||||||
Threshold consecutive trading days | day | 30 | ||||||||||||
Threshold percentage of stock price trigger | 130% | ||||||||||||
Convertible Debt | Debt Covenant Two | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Threshold trading days | day | 5 | ||||||||||||
Threshold consecutive trading days | day | 10 | ||||||||||||
Threshold percentage of stock price trigger | 98% | ||||||||||||
Convertible Debt | Debt Covenant Three | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Threshold percentage of stock price trigger | 130% | ||||||||||||
Redemption price, percentage | 100% | ||||||||||||
2025 Notes | Convertible Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount | $ 230,000,000 | ||||||||||||
Proceeds from convertible debt | $ 222,800,000 | 0 | |||||||||||
Converted amount | $ 201,000,000 | ||||||||||||
Repurchased face amount | 184,000,000 | $ 184,000,000 | $ 184,000,000 | $ 184,000,000 | |||||||||
Induced conversion expense | $ 53,900,000 | ||||||||||||
Interest Rate | 2.25% | 2.25% | 2.25% | 2.25% | |||||||||
2027 Notes | Convertible Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount | $ 600,000,000 | ||||||||||||
Proceeds from convertible debt | $ 585,000,000 | $ 0 | |||||||||||
Interest Rate | 0.25% | 0.25% | 0.25% | 0.25% | |||||||||
2029 Notes | Convertible Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | |||||||||
Proceeds from convertible debt | $ 292,000,000 | $ 292,016,000 | |||||||||||
Interest Rate | 1.25% | 1.25% | 1.25% | 1.25% | |||||||||
2023 Notes | Call Option | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Threshold trading days | day | 40 | ||||||||||||
Cash fair value | $ 33,000,000 | $ 33,000,000 | $ 33,000,000 | $ 33,000,000 | |||||||||
Other income (expense), net | $ 15,500,000 | ||||||||||||
Proceeds from settlement of capped calls | $ 17,500,000 | ||||||||||||
2023 Notes | Convertible Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest Rate | 1.25% | 1.25% | 1.25% | 1.25% | |||||||||
2023 Notes | Convertible Debt | Debt Covenant Three | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Threshold trading days | day | 20 | ||||||||||||
Threshold consecutive trading days | day | 30 | ||||||||||||
Redemption price, percentage | 100% | ||||||||||||
Credit Agreement | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Credit sublimit | $ 15,000,000 | ||||||||||||
Credit Agreement | SOFR | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Sofr spread rate | 0.10% | ||||||||||||
Basis spread on variable rate | 2.50% | ||||||||||||
Credit Agreement | Base Rate | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Basis spread on variable rate | 0% | ||||||||||||
Credit Agreement | Revolving Credit Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Current borrowing capacity | $ 100,000,000 | $ 50,000,000 | $ 30,000,000 | ||||||||||
Credit sublimit | 15,000,000 | ||||||||||||
Maximum borrowing capacity | 100,000,000 | $ 50,000,000 | |||||||||||
Fee amount | $ 400,000 | ||||||||||||
Commitment fee percentage | 0.20% | ||||||||||||
Credit Agreement | Letter of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | $ 150,000,000 | $ 70,000,000 | |||||||||||
Long-term line of credit | $ 9,000,000 | $ 9,000,000 | $ 9,000,000 | $ 9,000,000 |
Debt - Summary of Long-term Deb
Debt - Summary of Long-term Debt Instruments (Details) - Convertible Debt shares in Millions | 9 Months Ended |
Sep. 30, 2023 shares $ / shares | |
2025 Notes | |
Debt Instrument [Line Items] | |
Interest Rate | 2.25% |
Effective Interest Rate | 2.88% |
Initial Conversion Rate per $1,000 Principal | 0.0163875 |
Initial Conversion Price (in dollars per share) | $ / shares | $ 61.02 |
Number of shares (in shares) | shares | 0.8 |
2027 Notes | |
Debt Instrument [Line Items] | |
Interest Rate | 0.25% |
Effective Interest Rate | 0.67% |
Initial Conversion Rate per $1,000 Principal | 0.0096734 |
Initial Conversion Price (in dollars per share) | $ / shares | $ 103.38 |
Number of shares (in shares) | shares | 5.8 |
2029 Notes | |
Debt Instrument [Line Items] | |
Interest Rate | 1.25% |
Effective Interest Rate | 1.69% |
Initial Conversion Rate per $1,000 Principal | 0.0154213 |
Initial Conversion Price (in dollars per share) | $ / shares | $ 64.85 |
Number of shares (in shares) | shares | 4.6 |
Debt - Summary of Liability and
Debt - Summary of Liability and Equity Components of Convertible Debt (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Mar. 31, 2021 | May 31, 2020 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||||||||
Unamortized debt issuance costs | $ 0 | $ (71) | ||||||
Total | 292,800 | 0 | ||||||
Convertible Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Amortization of debt issuance costs | $ 993 | $ 997 | 2,918 | 2,892 | ||||
Convertible Debt | 2025 Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal | $ 45,992 | 45,992 | 45,992 | $ 229,992 | ||||
Unamortized debt issuance costs | (480) | (480) | (480) | (3,480) | ||||
Total | 45,512 | 45,512 | 45,512 | 226,512 | ||||
Principal | 0 | |||||||
Unamortized debt issuance costs | 0 | |||||||
Total | $ 222,800 | 0 | ||||||
Principal | (184,000) | |||||||
Unamortized debt issuance costs | 2,010 | |||||||
Total | (181,990) | |||||||
Amortization of debt issuance costs | 289 | 371 | 990 | 1,052 | ||||
Convertible Debt | 2027 Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal | 600,000 | 600,000 | 600,000 | 600,000 | ||||
Unamortized debt issuance costs | (8,709) | (8,709) | (8,709) | (10,564) | ||||
Total | 591,291 | 591,291 | 591,291 | 589,436 | ||||
Principal | 0 | |||||||
Unamortized debt issuance costs | 0 | |||||||
Total | $ 585,000 | 0 | ||||||
Amortization of debt issuance costs | 631 | $ 626 | 1,855 | $ 1,840 | ||||
Convertible Debt | 2029 Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal | 300,000 | 300,000 | 300,000 | 0 | ||||
Unamortized debt issuance costs | (7,911) | (7,911) | (7,911) | 0 | ||||
Total | 292,089 | 292,089 | 292,089 | $ 0 | ||||
Principal | 300,000 | |||||||
Unamortized debt issuance costs | (7,984) | |||||||
Total | $ 292,000 | 292,016 | ||||||
Amortization of debt issuance costs | $ 73 | $ 73 |
Debt - Summary of Interest expe
Debt - Summary of Interest expense (Details) - Convertible Debt - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 1,552 | $ 1,669 | $ 4,890 | $ 5,007 |
Amortization of debt issuance costs | 993 | 997 | 2,918 | 2,892 |
Total interest expense | 2,545 | 2,666 | 7,808 | 7,899 |
2025 Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 948 | 1,292 | 3,536 | 3,880 |
Amortization of debt issuance costs | 289 | 371 | 990 | 1,052 |
Total interest expense | 1,237 | 1,663 | 4,526 | 4,932 |
2027 Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 375 | 377 | 1,125 | 1,127 |
Amortization of debt issuance costs | 631 | 626 | 1,855 | 1,840 |
Total interest expense | 1,006 | $ 1,003 | 2,980 | $ 2,967 |
2029 Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 229 | 229 | ||
Amortization of debt issuance costs | 73 | 73 | ||
Total interest expense | $ 302 | $ 302 |
Debt - Summary of Other Key Ter
Debt - Summary of Other Key Terms and Premiums Paid for the Capped Calls (Details) - Call Option $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) $ / shares | |
Capped Calls Entered into in Connection with the Issuance of the 2023 Notes | |
Debt Instrument [Line Items] | |
Initial strike price, subject to certain adjustments (in dollars per share) | $ 41.59 |
Cap price, subject to certain adjustments (in dollars per share) | $ 63.98 |
Total premium paid | $ | $ 26,910 |
Capped Calls Entered into in Connection with the Issuance of the 2025 Notes | |
Debt Instrument [Line Items] | |
Initial strike price, subject to certain adjustments (in dollars per share) | $ 61.02 |
Cap price, subject to certain adjustments (in dollars per share) | $ 93.88 |
Total premium paid | $ | $ 27,255 |
Capped Calls Entered into in Connection with the Issuance of the 2027 Notes | |
Debt Instrument [Line Items] | |
Initial strike price, subject to certain adjustments (in dollars per share) | $ 103.38 |
Cap price, subject to certain adjustments (in dollars per share) | $ 159.04 |
Total premium paid | $ | $ 76,020 |
Capped Calls Entered into in Connection with the Issuance of the 2029 Notes | |
Debt Instrument [Line Items] | |
Initial strike price, subject to certain adjustments (in dollars per share) | $ 64.85 |
Cap price, subject to certain adjustments (in dollars per share) | $ 97.88 |
Total premium paid | $ | $ 36,570 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) leaseRenewalOption | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) leaseRenewalOption | Sep. 30, 2022 USD ($) | Dec. 31, 2022 | |
Lessee, Lease, Description [Line Items] | |||||
Lease term | 6 years | 6 years | 6 years 7 months 6 days | ||
Number of lease renewal options | leaseRenewalOption | 1 | 1 | |||
Renewal term | 5 years | 5 years | |||
Termination period | 4 years | ||||
Impairment of long-lived assets | $ 3,553 | $ 0 | $ 30,784 | $ 0 | |
Impairment losses | $ 2,000 | $ 22,200 | |||
Office Building | |||||
Lessee, Lease, Description [Line Items] | |||||
Lease term | 8 years 6 months | 8 years 6 months | |||
Leasehold Improvements | |||||
Lessee, Lease, Description [Line Items] | |||||
Impairment of long-lived assets | $ 1,600 | $ 8,600 |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease cost | $ 3,799 | $ 4,997 | $ 12,716 | $ 15,240 |
Short-term lease costs | 322 | 461 | 959 | 1,315 |
Variable lease costs | 1,681 | 2,184 | 6,141 | 6,716 |
Total lease costs | $ 5,802 | $ 7,642 | $ 19,816 | $ 23,271 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Balance Sheet Information Related to Operating Leases (Details) | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Weighted average remaining lease term (in years) - operating leases | 6 years | 6 years 7 months 6 days |
Weighted average discount rate - operating leases | 6.30% | 6.20% |
Leases - Summary of Supplemen_2
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||||
Cash paid for amounts included in the measurement of lease liabilities | $ 4,897 | $ 3,057 | $ 16,444 | $ 11,093 |
ROU assets obtained in exchange for new lease obligations | $ 620 | $ 3,811 | $ 4,457 | $ 12,675 |
Leases - Summary of Maturities
Leases - Summary of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
2023 (for the remaining three months) | $ 3,469 |
2024 | 19,995 |
2025 | 18,851 |
2026 | 17,494 |
2027 | 16,699 |
2028 | 36,262 |
Total lease payments | 112,770 |
Less: imputed interest | (19,233) |
Total | $ 93,537 |
Stock-Based Compensation Expe_3
Stock-Based Compensation Expense - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 23,768 | $ 30,971 | $ 84,836 | $ 92,304 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 2,527 | 2,745 | 8,348 | 7,610 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 8,436 | 13,400 | 30,575 | 40,349 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 7,106 | 8,047 | 23,087 | 23,251 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 5,699 | $ 6,779 | $ 22,826 | $ 21,094 |
Stock-Based Compensation Expe_4
Stock-Based Compensation Expense - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 15, 2023 USD ($) $ / shares shares | Mar. 15, 2023 USD ($) $ / shares shares | Feb. 28, 2023 installment shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Share-based payment arrangement, expense | $ 23,768 | $ 30,971 | $ 84,836 | $ 92,304 | |||
Number of vesting installments | installment | 3 | ||||||
Purchase price of common stock by employees | 85% | ||||||
Issuance of common stock under employee stock purchase plan | 5,149 | 6,233 | $ 11,323 | 11,943 | |||
RSUs and PSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation expense | 265,800 | $ 265,800 | |||||
Unrecognized compensation expense, recognition period | 2 years 3 months 18 days | ||||||
PSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 1 year | ||||||
Granted (in shares) | shares | 173,103 | ||||||
Maximum target payout in shares (percent) | 200% | ||||||
2020 Bonus Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based payment arrangement, expense | $ 50 | $ (800) | $ 1,100 | $ 800 | |||
Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock issued to employees (in shares) | shares | 152,419 | 177,886 | |||||
Share issued, price per share (in dollars per share) | $ / shares | $ 33.78 | $ 34.71 | |||||
Issuance of common stock under employee stock purchase plan | $ 5,100 | $ 6,200 | |||||
Employee Stock Purchase Plan | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Employee withholding percentage | 15% |
Stock-Based Compensation Expe_5
Stock-Based Compensation Expense - Summary of Restricted Stock and Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Shares | |
Unvested balance, beginning balance (in shares) | shares | 3,001,443 |
Granted (in shares) | shares | 2,232,289 |
Vested (in shares) | shares | (1,139,340) |
Forfeited (in shares) | shares | (967,575) |
Unvested balance, ending balance (in shares) | shares | 3,126,817 |
Weighted-Average Grant Date Fair Value | |
Unvested balance, beginning balance (in dollars per share) | $ / shares | $ 83.88 |
Granted (in dollars per share) | $ / shares | 41.54 |
Vested (in dollars per share) | $ / shares | 72.49 |
Forfeited (in dollars per share) | $ / shares | 67.85 |
Unvested balance, ending Balance (in dollars per share) | $ / shares | $ 62.79 |
Stock-Based Compensation Expe_6
Stock-Based Compensation Expense - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Shares | ||
Outstanding, beginning balance (in shares) | 932,126 | |
Granted (in shares) | 0 | |
Exercised (in shares) | (208,494) | |
Forfeited/canceled (in shares) | 0 | |
Outstanding, ending balance (in shares) | 723,632 | 932,126 |
Vested and exercisable (in shares) | 723,632 | |
Weighted Average Exercise Price | ||
Outstanding, beginning balance (in dollars per share) | $ 12.70 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 14.31 | |
Forfeited/canceled (in dollars per share) | 0 | |
Outstanding, ending balance (in dollars per share) | 12.23 | $ 12.70 |
Vested and exercisable (in dollars per share) | $ 12.23 | |
Weighted Average Remaining Contractual Life (in years) | ||
Outstanding | 2 years 4 months 24 days | 3 years 2 months 12 days |
Vested and exercisable | 2 years 4 months 24 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 24,276 | $ 19,837 |
Exercised | 6,204 | |
Vested and exercisable | $ 24,276 |
Net Loss per Share - Summary of
Net Loss per Share - Summary of Basic and Diluted Net Loss Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net loss | $ (76,611) | $ (28,727) | $ (169,308) | $ (113,332) |
Denominator: | ||||
Weighted-average common shares outstanding, basic (in Shares) | 61,065,157 | 58,730,651 | 60,506,082 | 58,229,872 |
Weighted-average common shares outstanding, diluted (in Shares) | 61,065,157 | 58,730,651 | 60,506,082 | 58,229,872 |
Net loss per share, basic (in dollars per share) | $ (1.25) | $ (0.49) | $ (2.80) | $ (1.95) |
Net loss per share, diluted (in dollars per share) | $ (1.25) | $ (0.49) | $ (2.80) | $ (1.95) |
Net Loss per Share - Summary _2
Net Loss per Share - Summary of Antidilutive Securities Excluded From Computation Diluted Weighted Average Shares Outstanding (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 15,169,903 | 14,342,188 | 15,169,903 | 14,342,188 |
Options to purchase common stock | ||||
Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 723,632 | 1,218,790 | 723,632 | 1,218,790 |
Unvested restricted stock units | ||||
Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 3,126,817 | 3,279,901 | 3,126,817 | 3,279,901 |
Common stock issued in conjunction with acquisitions | ||||
Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 115,041 | 240,041 | 115,041 | 240,041 |
Shares to be issued under ESPP | ||||
Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 20,802 | 30,501 | 20,802 | 30,501 |
Convertible senior notes | ||||
Schedule Of Calculation Of Numerator And Denominator In Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 11,183,611 | 9,572,955 | 11,183,611 | 9,572,955 |
Segment Information and Infor_3
Segment Information and Information about Geographic Areas - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Segment Information and Infor_4
Segment Information and Information about Geographic Areas - Summary of Net Revenues of Customer by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Entity Wide Portfolio Carrying Amount, Major Customer [Line Items] | ||||
Total | $ 198,843 | $ 175,765 | $ 572,439 | $ 500,604 |
United States | ||||
Entity Wide Portfolio Carrying Amount, Major Customer [Line Items] | ||||
Total | 147,929 | 131,628 | 427,629 | 376,752 |
Other | ||||
Entity Wide Portfolio Carrying Amount, Major Customer [Line Items] | ||||
Total | $ 50,914 | $ 44,137 | $ 144,810 | $ 123,852 |
Segment Information and Infor_5
Segment Information and Information about Geographic Areas - Summary of Property and Equipment, Net By Geographic Area (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total | $ 42,449 | $ 57,891 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total | 29,709 | 41,570 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total | $ 12,740 | $ 16,321 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Aug. 07, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |||
Workforce reduction percentage | 17% | ||
Restructuring, incurred cost | $ 20 | ||
Accelerated cost | 1.2 | ||
Restructuring reserve, accrual | $ 4.7 | ||
Restructuring and related cost, expected cost remaining | 3.5 | $ 3.5 | |
Impairment loss | $ 3.6 |
Restructuring - Restructuring L
Restructuring - Restructuring Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Restructuring Liability | ||||
Beginning balance | $ 0 | |||
Charges | $ 19,996 | $ 0 | 19,996 | $ 0 |
Payments | (15,318) | |||
Ending balance | $ 4,678 | $ 4,678 |