Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 02, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-40406 | |
Entity Registrant Name | ZIPRECRUITER, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-2976158 | |
Entity Address, Address Line One | 604 Arizona Avenue | |
Entity Address, City or Town | Santa Monica | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90401 | |
City Area Code | 877 | |
Local Phone Number | 252-1062 | |
Title of 12(b) Security | Class A common stock, $0.00001 par value per share | |
Trading Symbol | ZIP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001617553 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 79,824,291 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 30,361,349 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 482,978 | $ 254,621 |
Marketable securities | 186,723 | 0 |
Accounts receivable, net of allowances of $3,136 and $3,325 at September 30, 2022 and December 31, 2021, respectively | 47,640 | 41,657 |
Prepaid expenses and other assets | 11,334 | 9,721 |
Deferred commissions, current portion | 4,740 | 4,640 |
Total current assets | 733,415 | 310,639 |
Property and equipment, net | 8,521 | 8,702 |
Operating lease right-of-use assets | 13,145 | 18,515 |
Internal-use software, net | 15,433 | 13,657 |
Deferred commissions, net of current portion | 4,522 | 4,011 |
Goodwill | 1,724 | 1,724 |
Deferred tax assets, net | 40,626 | 38,029 |
Other assets | 1,025 | 3,342 |
Total assets | 818,411 | 398,619 |
Current liabilities | ||
Accounts payable | 13,736 | 24,862 |
Accrued expenses | 75,761 | 86,213 |
Accrued interest | 5,938 | 0 |
Deferred revenue | 24,059 | 23,253 |
Operating lease liabilities, current portion | 5,677 | 6,109 |
Other current liabilities | 2,456 | 2,457 |
Total current liabilities | 127,627 | 142,894 |
Operating lease liabilities, net of current portion | 14,339 | 19,179 |
Long-term borrowings | 541,313 | 0 |
Other long-term liabilities | 1,870 | 1,578 |
Total liabilities | 685,149 | 163,651 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity | ||
Preferred Stock, $0.00001 par value; 50,000 shares authorized as of September 30, 2022 and December 31, 2021; no shares issued and outstanding as of September 30, 2022 and December 31, 2021 | 0 | 0 |
Class B treasury stock, 195 shares outstanding as of September 30, 2022 and December 31, 2021 | (644) | (644) |
Additional paid-in capital | 159,752 | 303,395 |
Accumulated deficit | (25,701) | (67,784) |
Accumulated other comprehensive loss | (146) | 0 |
Total stockholders' equity | 133,262 | 234,968 |
Total liabilities and stockholders' equity | 818,411 | 398,619 |
Common Class A | ||
Stockholders' equity | ||
Common stock | 1 | 1 |
Common Class B | ||
Stockholders' equity | ||
Common stock | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Accounts receivable, allowance for credit loss, current | $ 3,136 | $ 3,325 |
Stockholders' equity | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.00001 | |
Common stock, authorized (in shares) | 1,450,000,000 | |
Treasury stock (in shares) | 195,000 | 195,000 |
Common Class A | ||
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, issued (in shares) | 81,090,000 | 87,843,000 |
Common stock, outstanding (in shares) | 81,090,000 | 87,843,000 |
Common Class B | ||
Stockholders' equity | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, issued (in shares) | 30,557,000 | 30,571,000 |
Common stock, outstanding (in shares) | 30,362,000 | 30,376,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 226,968 | $ 212,672 | $ 694,171 | $ 521,004 |
Cost of revenue | 21,839 | 22,277 | 65,202 | 59,838 |
Gross profit | 205,129 | 190,395 | 628,969 | 461,166 |
Operating expenses | ||||
Sales and marketing | 112,574 | 112,178 | 386,795 | 289,825 |
Research and development | 33,008 | 27,155 | 93,577 | 82,079 |
General and administrative | 30,076 | 33,094 | 79,805 | 123,145 |
Total operating expenses | 175,658 | 172,427 | 560,177 | 495,049 |
Income (loss) from operations | 29,471 | 17,968 | 68,792 | (33,883) |
Other income (expense) | ||||
Interest expense | (7,361) | (221) | (21,157) | (696) |
Other income (expense), net | 321 | (154) | 332 | 51 |
Total other expense, net | (7,040) | (375) | (20,825) | (645) |
Income (loss) before income taxes | 22,431 | 17,593 | 47,967 | (34,528) |
Income tax expense (benefit) | 1,875 | (4,467) | 5,884 | (17,139) |
Net income (loss) | 20,556 | 22,060 | 42,083 | (17,389) |
Less: Accretion of redeemable convertible preferred stock | 0 | 0 | 0 | (1,480) |
Net income (loss) attributable to Class A and Class B common stockholders | $ 20,556 | $ 22,060 | $ 42,083 | $ (18,869) |
Net income (loss) per share attributable to Class A and Class B common stockholders: | ||||
Basic (in dollars per share) | $ 0.18 | $ 0.19 | $ 0.36 | $ (0.19) |
Diluted (in dollars per share) | $ 0.17 | $ 0.17 | $ 0.34 | $ (0.19) |
Weighted average shares used in computing net income (loss) per share attributable to Class A and Class B common stockholders: | ||||
Basic (in shares) | 113,059 | 115,372 | 116,184 | 97,159 |
Diluted (in shares) | 119,810 | 126,474 | 123,616 | 97,159 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 20,556 | $ 22,060 | $ 42,083 | $ (17,389) |
Other comprehensive loss, net of tax | ||||
Unrealized losses on available-for-sale debt securities | (146) | 0 | (146) | 0 |
Total other comprehensive loss | (146) | 0 | (146) | 0 |
Total comprehensive income (loss) | $ 20,410 | $ 22,060 | $ 41,937 | $ (17,389) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Conversion of redeemable convertible preferred stock to common stock | Conversion of convertible notes with related parties to common stock | Additional Paid-in Capital | Additional Paid-in Capital Conversion of redeemable convertible preferred stock to common stock | Additional Paid-in Capital Conversion of convertible notes with related parties to common stock | Accumulated Deficit | Accumulated Other Comprehensive Loss | Series A Preferred Stock | Series B Preferred Stock | Common Class A Common Stock | Common Class B Common Stock | Common Class B Common Stock Conversion of redeemable convertible preferred stock to common stock | Common Class B Common Stock Conversion of convertible notes with related parties to common stock | Common Class B Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2020 | 2,271,000 | 6,031,000 | |||||||||||||
Beginning balance at Dec. 31, 2020 | $ 87,118 | $ 49,738 | |||||||||||||
Redeemable Convertible Preferred Stock | |||||||||||||||
Accretion of redeemable convertible preferred stock | $ 961 | $ 36 | |||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 2,271,000 | 6,031,000 | |||||||||||||
Ending balance at Mar. 31, 2021 | $ 88,079 | $ 49,774 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 78,283,000 | |||||||||||||
Beginning balance at Dec. 31, 2020 | $ (50,296) | $ 21,732 | $ (71,384) | $ 0 | $ 0 | $ 0 | $ (644) | ||||||||
Beginning balance (in shares) at Dec. 31, 2020 | (195,000) | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Accretion of redeemable convertible preferred stock | (997) | (997) | |||||||||||||
Issuance of common stock upon exercise of options (in shares) | 1,965,000 | ||||||||||||||
Issuance of common stock upon exercise of options | 3,660 | 3,660 | |||||||||||||
Repurchase and retirement of common stock (in shares) | (50,000) | ||||||||||||||
Repurchase and retirement of common stock | (450) | (450) | |||||||||||||
Stock-based compensation | 1,290 | 1,290 | |||||||||||||
Net income (loss) | 13,398 | 13,398 | |||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 0 | 80,198,000 | |||||||||||||
Ending balance at Mar. 31, 2021 | (33,395) | 25,235 | (57,986) | 0 | $ 0 | $ 0 | $ (644) | ||||||||
Ending balance (in shares) at Mar. 31, 2021 | (195,000) | ||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 2,271,000 | 6,031,000 | |||||||||||||
Beginning balance at Dec. 31, 2020 | $ 87,118 | $ 49,738 | |||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | |||||||||||||
Ending balance at Sep. 30, 2021 | $ 0 | $ 0 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 78,283,000 | |||||||||||||
Beginning balance at Dec. 31, 2020 | (50,296) | 21,732 | (71,384) | 0 | $ 0 | $ 0 | $ (644) | ||||||||
Beginning balance (in shares) at Dec. 31, 2020 | (195,000) | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Conversion of Class B stock to Class A stock | (138,336) | ||||||||||||||
Net income (loss) | (17,389) | ||||||||||||||
Other comprehensive loss | 0 | ||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 84,864,000 | 31,771,000 | |||||||||||||
Ending balance at Sep. 30, 2021 | 196,029 | 285,445 | (88,773) | 0 | $ 1 | $ 0 | $ (644) | ||||||||
Ending balance (in shares) at Sep. 30, 2021 | (195,000) | ||||||||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 2,271,000 | 6,031,000 | |||||||||||||
Beginning balance at Mar. 31, 2021 | $ 88,079 | $ 49,774 | |||||||||||||
Redeemable Convertible Preferred Stock | |||||||||||||||
Accretion of redeemable convertible preferred stock | $ 466 | $ 17 | |||||||||||||
Conversion of redeemable convertible preferred stock to common stock (in shares) | (2,271,000) | (6,031,000) | |||||||||||||
Conversion of redeemable convertible preferred stock to common stock | $ (88,545) | $ (49,791) | |||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 0 | 0 | |||||||||||||
Ending balance at Jun. 30, 2021 | $ 0 | $ 0 | |||||||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 0 | 80,198,000 | |||||||||||||
Beginning balance at Mar. 31, 2021 | (33,395) | 25,235 | (57,986) | 0 | $ 0 | $ 0 | $ (644) | ||||||||
Beginning balance (in shares) at Mar. 31, 2021 | (195,000) | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Accretion of redeemable convertible preferred stock | (483) | (483) | |||||||||||||
Conversion of redeemable convertible preferred stock to common stock (in shares) | 24,202,000 | 3,085,000 | |||||||||||||
Conversion of redeemable convertible preferred stock to common stock | $ 138,336 | $ 25,653 | $ 138,335 | $ 25,653 | $ 1 | ||||||||||
Conversion of Class B stock to Class A stock | 0 | $ 1 | $ (1) | ||||||||||||
Issuance of common stock upon exercise of options (in shares) | 5,282,000 | ||||||||||||||
Issuance of common stock upon exercise of options | 8,720 | 8,720 | |||||||||||||
Conversion of Class B stock to Class A stock (in shares) | 82,714,000 | (82,714,000) | |||||||||||||
Repurchase and retirement of common stock (in shares) | (100,000) | ||||||||||||||
Repurchase and retirement of common stock | (2,300) | (2,300) | |||||||||||||
Issuance of common stock upon the vesting and settlement of restricted stock units (in shares) | 2,278,000 | ||||||||||||||
Stock-based compensation | 65,121 | 65,121 | |||||||||||||
Vesting of early exercised options | 97 | 97 | |||||||||||||
Net income (loss) | (52,847) | (52,847) | |||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 82,714,000 | 32,231,000 | |||||||||||||
Ending balance at Jun. 30, 2021 | 148,902 | 260,378 | (110,833) | 0 | $ 1 | $ 0 | $ (644) | ||||||||
Ending balance (in shares) at Jun. 30, 2021 | (195,000) | ||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | |||||||||||||
Ending balance at Sep. 30, 2021 | $ 0 | $ 0 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Conversion of Class B stock to Class A stock | 0 | 0 | $ 0 | $ 0 | |||||||||||
Issuance of common stock upon exercise of options (in shares) | 1,036,000 | ||||||||||||||
Issuance of common stock upon exercise of options | 2,461 | 2,461 | |||||||||||||
Conversion of Class B stock to Class A stock (in shares) | 2,038,000 | (2,038,000) | |||||||||||||
Issuance of common stock upon the vesting and settlement of restricted stock units (in shares) | 112,000 | 542,000 | |||||||||||||
Stock-based compensation | 22,507 | 22,507 | |||||||||||||
Vesting of early exercised options | 99 | 99 | |||||||||||||
Net income (loss) | 22,060 | 22,060 | |||||||||||||
Other comprehensive loss | 0 | ||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 84,864,000 | 31,771,000 | |||||||||||||
Ending balance at Sep. 30, 2021 | 196,029 | 285,445 | (88,773) | 0 | $ 1 | $ 0 | $ (644) | ||||||||
Ending balance (in shares) at Sep. 30, 2021 | (195,000) | ||||||||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 0 | |||||||||||||
Beginning balance at Dec. 31, 2021 | $ 0 | $ 0 | |||||||||||||
Ending balance (in shares) at Mar. 31, 2022 | 0 | 0 | |||||||||||||
Ending balance at Mar. 31, 2022 | $ 0 | $ 0 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 87,843,000 | 30,571,000 | |||||||||||||
Beginning balance at Dec. 31, 2021 | 234,968 | 303,395 | (67,784) | 0 | $ 1 | $ 0 | $ (644) | ||||||||
Beginning balance (in shares) at Dec. 31, 2021 | (195,000) | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Issuance of common stock upon exercise of options (in shares) | 1,180,000 | ||||||||||||||
Issuance of common stock upon exercise of options | 2,078 | 2,078 | |||||||||||||
Conversion of Class B stock to Class A stock (in shares) | 1,446,000 | (1,446,000) | |||||||||||||
Repurchase and retirement of common stock (in shares) | (2,420,000) | 0 | |||||||||||||
Repurchase and retirement of common stock | (62,349) | (62,349) | |||||||||||||
Issuance of common stock upon the vesting and settlement of restricted stock units (in shares) | 354,000 | 433,000 | |||||||||||||
Stock-based compensation | 21,112 | 21,112 | |||||||||||||
Shares withheld related to net share settlement (in shares) | (133,000) | (181,000) | |||||||||||||
Shares withheld related to net share settlement | (5,902) | (5,902) | |||||||||||||
Stock issued under employee stock purchase plan (in shares) | 290,000 | ||||||||||||||
Shares issued under employee stock purchase plan | 5,293 | 5,293 | |||||||||||||
Net income (loss) | 8,417 | 8,417 | |||||||||||||
Ending balance (in shares) at Mar. 31, 2022 | 87,380,000 | 30,557,000 | |||||||||||||
Ending balance at Mar. 31, 2022 | 203,617 | 263,627 | (59,367) | 0 | $ 1 | $ 0 | $ (644) | ||||||||
Ending balance (in shares) at Mar. 31, 2022 | (195,000) | ||||||||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 0 | |||||||||||||
Beginning balance at Dec. 31, 2021 | $ 0 | $ 0 | |||||||||||||
Ending balance (in shares) at Sep. 30, 2022 | 0 | 0 | |||||||||||||
Ending balance at Sep. 30, 2022 | $ 0 | $ 0 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 87,843,000 | 30,571,000 | |||||||||||||
Beginning balance at Dec. 31, 2021 | 234,968 | 303,395 | (67,784) | 0 | $ 1 | $ 0 | $ (644) | ||||||||
Beginning balance (in shares) at Dec. 31, 2021 | (195,000) | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Conversion of Class B stock to Class A stock | 0 | ||||||||||||||
Net income (loss) | 42,083 | ||||||||||||||
Other comprehensive loss | (146) | ||||||||||||||
Ending balance (in shares) at Sep. 30, 2022 | 81,090,000 | 30,557,000 | |||||||||||||
Ending balance at Sep. 30, 2022 | 133,262 | 159,752 | (25,701) | (146) | $ 1 | $ 0 | $ (644) | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | (195,000) | ||||||||||||||
Beginning balance (in shares) at Mar. 31, 2022 | 0 | 0 | |||||||||||||
Beginning balance at Mar. 31, 2022 | $ 0 | $ 0 | |||||||||||||
Ending balance (in shares) at Jun. 30, 2022 | 0 | 0 | |||||||||||||
Ending balance at Jun. 30, 2022 | $ 0 | $ 0 | |||||||||||||
Beginning balance (in shares) at Mar. 31, 2022 | 87,380,000 | 30,557,000 | |||||||||||||
Beginning balance at Mar. 31, 2022 | 203,617 | 263,627 | (59,367) | 0 | $ 1 | $ 0 | $ (644) | ||||||||
Beginning balance (in shares) at Mar. 31, 2022 | (195,000) | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Issuance of common stock upon exercise of options (in shares) | 5,000 | 460,000 | |||||||||||||
Issuance of common stock upon exercise of options | 1,099 | 1,099 | |||||||||||||
Conversion of Class B stock to Class A stock (in shares) | 663,000 | (663,000) | |||||||||||||
Repurchase and retirement of common stock (in shares) | (4,807,000) | 0 | |||||||||||||
Repurchase and retirement of common stock | (82,878) | (82,878) | |||||||||||||
Issuance of common stock upon the vesting and settlement of restricted stock units (in shares) | 275,000 | 348,000 | |||||||||||||
Stock-based compensation | 18,200 | 18,200 | |||||||||||||
Vesting of early exercised options | 97 | 97 | |||||||||||||
Shares withheld related to net share settlement (in shares) | (94,000) | (145,000) | |||||||||||||
Shares withheld related to net share settlement | (3,665) | (3,665) | |||||||||||||
Net income (loss) | 13,110 | 13,110 | |||||||||||||
Ending balance (in shares) at Jun. 30, 2022 | 83,422,000 | 30,557,000 | |||||||||||||
Ending balance at Jun. 30, 2022 | 149,580 | 196,480 | (46,257) | 0 | $ 1 | $ 0 | $ (644) | ||||||||
Ending balance (in shares) at Jun. 30, 2022 | (195,000) | ||||||||||||||
Ending balance (in shares) at Sep. 30, 2022 | 0 | 0 | |||||||||||||
Ending balance at Sep. 30, 2022 | $ 0 | $ 0 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Issuance of common stock upon exercise of options (in shares) | 421,000 | ||||||||||||||
Issuance of common stock upon exercise of options | 646 | 646 | |||||||||||||
Conversion of Class B stock to Class A stock (in shares) | 619,000 | (619,000) | |||||||||||||
Repurchase and retirement of common stock (in shares) | (3,363,000) | 0 | |||||||||||||
Repurchase and retirement of common stock | (54,886) | (54,886) | |||||||||||||
Issuance of common stock upon the vesting and settlement of restricted stock units (in shares) | 380,000 | 341,000 | |||||||||||||
Stock-based compensation | 19,844 | 19,844 | |||||||||||||
Shares withheld related to net share settlement (in shares) | (127,000) | (143,000) | |||||||||||||
Shares withheld related to net share settlement | (5,168) | (5,168) | |||||||||||||
Stock issued under employee stock purchase plan (in shares) | 159,000 | ||||||||||||||
Shares issued under employee stock purchase plan | 2,836 | 2,836 | |||||||||||||
Net income (loss) | 20,556 | 20,556 | |||||||||||||
Other comprehensive loss | (146) | (146) | |||||||||||||
Ending balance (in shares) at Sep. 30, 2022 | 81,090,000 | 30,557,000 | |||||||||||||
Ending balance at Sep. 30, 2022 | $ 133,262 | $ 159,752 | $ (25,701) | $ (146) | $ 1 | $ 0 | $ (644) | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | (195,000) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net income (loss) | $ 42,083 | $ (17,389) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Stock-based compensation expense | 57,478 | 87,625 |
Depreciation and amortization | 7,989 | 6,999 |
Provision for bad debts | 2,203 | 1,296 |
Deferred income taxes | (2,547) | (18,272) |
Non-cash lease expense | 3,467 | 4,113 |
Other | 2,682 | 129 |
Change in operating assets and liabilities: | ||
Accounts receivable | (8,186) | (23,762) |
Prepaid expenses and other current assets | (1,740) | (6,122) |
Deferred commissions, net | (611) | (676) |
Other assets | 2,090 | 43 |
Accounts payable | (11,008) | 18,672 |
Accrued expenses and other liabilities | (11,163) | 28,066 |
Accrued interest | 5,938 | 0 |
Deferred revenue | 805 | 10,312 |
Operating lease liabilities | (5,132) | (1,259) |
Net cash provided by operating activities | 84,348 | 89,775 |
Cash flows from investing activities | ||
Purchases of property and equipment | (2,224) | (5,684) |
Capitalized internal-use software costs | (6,336) | (5,479) |
Purchases of marketable securities | (186,719) | 0 |
Net cash used in investing activities | (195,279) | (11,163) |
Cash flows from financing activities | ||
Payment of issuance costs and fees | (9,378) | (1,270) |
Proceeds from issuance of senior unsecured notes | 550,000 | 0 |
Payments of tax withholdings on net settlement of equity awards | (14,735) | 0 |
Repurchase of common stock | (198,678) | (2,750) |
Proceeds from exercise of stock options | 3,950 | 15,750 |
Proceeds from issuance of stock under employee stock purchase plan | 8,129 | 0 |
Net cash provided by financing activities | 339,288 | 11,730 |
Net increase in cash and cash equivalents | 228,357 | 90,342 |
Beginning of period | 254,621 | 114,539 |
End of period | 482,978 | 204,881 |
Supplemental disclosure of non-cash activities | ||
Capitalized assets included in accounts payable and accrued expenses | 1,053 | 1,347 |
Stock-based compensation capitalized for software | 1,678 | 1,293 |
Repurchase of common stock accrued but not yet settled | 1,435 | 0 |
Accretion of redeemable convertible preferred stock | 0 | 1,480 |
Conversion of redeemable convertible preferred stock | 0 | 138,336 |
Conversion of convertible notes and accrued interest with related parties | $ 0 | $ 25,653 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business ZipRecruiter, Inc. was incorporated in the state of Delaware on June 29, 2010. Hereinafter, ZipRecruiter, Inc. and its wholly owned subsidiaries ZipRecruiter Israel Ltd., ZipRecruiter UK Ltd., and ZipRecruiter Canada Ltd. are collectively referred to as “ZipRecruiter” or the “Company.” The Company is a two-sided marketplace that enables employers and job seekers to connect with one another online to fill job opportunities. |
Basis of Presentation, Principl
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies | Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, certain information and disclosures normally included in consolidated financial statements presented in accordance with U.S. GAAP have been condensed or omitted. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 Form 10-K”). The condensed consolidated balance sheet as of December 31, 2021 has been derived from the Company’s audited consolidated financial statements. Certain reclassifications have been made to prior year presentation to conform to current year presentation. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the condensed consolidated financial statements. There have been no changes in the Company’s accounting policies from those disclosed in the Company’s audited consolidated financial statements and the related notes included in the 2021 Form 10-K, except for the recently adopted accounting pronouncement and the accounting policies related to the senior unsecured notes and share repurchases, which are further discussed in Note 6 and Note 10, respectively, as well as the accounting policies related to investments, which are discussed in Note 8 and later in this Note. The operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results expected for the full year ending December 31, 2022 or any future period. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates include revenue recognition, estimates relating to the measurement of operating lease right-of-use (“ROU”) assets and operating lease liabilities, determination of the fair value of stock-based awards, valuation of common stock in periods prior to becoming a public company, collectability of accounts receivable, determination of the fair value of investments, impairment of investments and long-lived assets including goodwill, carrying value and useful lives of property and equipment and internal-use software, the amortization period for deferred commission costs, and income taxes. By their nature, estimates are subject to an inherent degree of uncertainty and actual results could differ from those estimates. The impact of the Coronavirus pandemic (“COVID-19”) continues to evolve. As a result, many of the Company’s estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. As of the date these condensed consolidated financial statements are issued, the Company is not aware of any specific event or circumstance that would require an update to the Company’s estimates or judgments, or change to the carrying value of the Company’s assets or liabilities. However, these estimates and judgments may change as new events occur and additional information is obtained, which may result in changes being recognized in the consolidated financial statements in future periods. Actual results could differ from those estimates and any such differences may have a material impact on the financial statements. Investments The Company maintains an investment portfolio of primarily highly rated debt securities and money market mutual funds to manage its excess cash reserves. The Company’s primary objectives in investing its excess cash reserves are to preserve capital, provide sufficient liquidity to satisfy both operational cash flow requirements and potential strategic investment opportunities, and to obtain a reasonable or market rate of return on investments. The Company’s investments are all highly liquid and available for use in current operations, including those with maturity dates beyond one year, and therefore the Company classifies these securities within current assets in its condensed consolidated balance sheets. The Company considers its highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Investments not considered cash equivalents are classified as marketable securities in the Company’s condensed consolidated balance sheets. The Company classifies and accounts for its money market mutual funds which have readily determinable fair values as equity securities, and it carries such securities at fair value with unrealized gains and losses reported in other income (expense), net in its condensed consolidated statement of operations. The Company classifies and accounts for its debt securities as available-for-sale, and it carries such securities at fair value with unrealized gains and losses reported net of tax as a separate component of stockholders’ equity in accumulated other comprehensive income. During both the three and nine months ended September 30, 2022, in connection with its available-for-sale debt securities, the Company recorded pre-tax unrealized losses in other comprehensive loss of $0.2 million with an associated tax benefit of $0.1 million. The Company held no investments in available-for-sale debt securities during the three and nine months ended September 30, 2021. The Company determines any realized gains and losses on the sale of its available-for-sale debt securities using a specific identification method, and it records such gains and losses through other income (expense), net in its condensed consolidated statement of operations. During the three and nine months ended September 30, 2022, the Company did not sell any of its available-for-sale debt securities and did not reclassify any amounts out of accumulated other comprehensive income into other income (expense), net in the condensed consolidated statement of operations. If an available-for-sale debt security’s fair value declines below its amortized cost basis, the Company determines whether an other-than-temporary impairment has occurred. The Company evaluates whether it intends to sell the security, or whether it more likely than not will be required to sell the security before the recovery of its amortized cost basis. If either condition is met, the Company records an other-than-temporary impairment loss on the security through other income (expense), net in its condensed consolidated statement of operations. If neither condition is met, the Company evaluates whether the decline is the result of credit-related factors, in which case the Company records the credit-related portion of the other-than-temporary impairment loss through other income (expense), net in the condensed consolidated statement of operations, and it records the non-credit-related portion of the other-than-temporary impairment loss, net of tax, through other comprehensive income in the condensed consolidated statement of comprehensive income (loss). Segments and Geographic Information The Company operates as a single operating segment. The Company’s Chief Operating Decision Maker, the CEO, regularly reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources. During the three and nine months ended September 30, 2022 and 2021, revenue from countries outside of the United States was not material. In addition, property and equipment and operating lease ROU assets outside of the United States were not material as of September 30, 2022 and December 31, 2021. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, and accounts receivable. The Company maintains its cash accounts with large financial institutions and at times, the cash accounts may exceed Federal Deposit Insurance Corporation limits. The Company has not experienced any losses in such accounts. The Company invests only in highly rated debt and equity securities. The Company believes the financial institutions that hold its investments are financially sound, and accordingly, are subject to minimal credit risk. One customer accounted for 13% and 16% of the Company's outstanding accounts receivable as of September 30, 2022 and December 31, 2021, respectively. The Company closely monitors the financial condition of the foregoing customer, which has been in good credit standing. No other customer individually accounted for 10% or more of the Company's outstanding accounts receivable as of September 30, 2022 and December 31, 2021, respectively. As such, the Company does not consider the concentration of its accounts receivable to be a material risk. For the three and nine months ended September 30, 2022 and 2021, there were no customers that individually represented 10% or more of revenue. The Company uses third parties to collect its credit card receivables and believes risk related to its credit card processors is minimal. Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted As an emerging growth company (“EGC”), the Company is allowed by the Jumpstart Our Business Startups Act to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use the adoption dates applicable to private companies. The adoption dates discussed below reflect this election. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. The Company will become a large accelerated filer and will no longer qualify as an EGC at the conclusion of the fiscal year ending December 31, 2022. The adoption dates discussed below reflect the updated transition periods for complying with accounting pronouncements not yet adopted. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing model for measuring the allowance for credit losses for financial assets measured at amortized cost (including accounts receivable) to a model that is based on the expected losses rather than incurred losses. Under the new credit loss model, lifetime expected credit losses on such financial assets are measured and recognized at each reporting date based on historical, current, and forecasted information. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, and in April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. These ASUs provide supplemental guidance and clarification to ASU 2016-13 and must be adopted concurrently with the adoption of ASU 2016-13, cumulatively referred to as “Topic 326.” Topic 326 is effective for the Company as of December 31, 2022, and the adoption, including the impact and required disclosures, will be included in its Annual Report on Form 10-K for the year ending December 31, 2022. The Company is currently evaluating the effects of the adoption of this update on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which enhances and simplifies various aspects of income tax accounting guidance. ASU 2019-12 is effective for the Company as of December 31, 2022, and the adoption, including the impact and required disclosures, will be included in its Annual Report on Form 10-K for the year ending December 31, 2022. The Company is currently evaluating the effects of the adoption of this update on its consolidated financial statements. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and which removes certain conditions that should be considered in the derivative scope exception evaluation under Subtopic 815-40. The Company early adopted ASU 2020-06 on January 1, 2022 and applied the changes using the modified retrospective approach. The adoption did not have a material impact on the Company’s condensed consolidated financial statements. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per ShareBasic and diluted net income (loss) per share are computed using the two-class method as required when there are participating securities and multiple classes of common stock. Basic net income (loss) per share is computed using the weighted-average number of shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period. Prior to May 14, 2021, when the Company’s Series A preferred stock and Series B preferred stock converted into shares of Class B common stock, the Company’s redeemable convertible preferred stock were participating securities as the holders of the redeemable convertible preferred stock were entitled to participate in dividends with common stock. In periods of net income, net income after deducting the accretion of redeemable convertible preferred stock was attributed to common stockholders and participating securities based on their participation rights. Net losses after deducting the accretion of redeemable convertible preferred stock are not allocated to the participating securities as the participating securities do not have a contractual obligation to share in any losses. In April 2021, the Company filed its amended and restated certificate of incorporation, which resulted in the creation of Class A common stock and Class B common stock. As the liquidation and dividend rights are identical for Class A and Class B common stock (see Note 9), the undistributed earnings under the two-class method are allocated on a proportional basis and the resulting net income (loss) per share attributable to common stockholders is, therefore, the same for both Class A and Class B common stock on an individual or combined basis. The following table presents the Company’s basic net income (loss) per share (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Net income (loss) per share, basic: Net income (loss) $ 20,556 $ 22,060 $ 42,083 $ (17,389) Less: Accretion of redeemable convertible preferred stock — — — (1,480) Net income (loss) attributable to Class A and Class B common stockholders $ 20,556 $ 22,060 $ 42,083 $ (18,869) Weighted average shares of Class A and Class B common stock outstanding 113,059 115,372 116,184 97,159 Net income (loss) per share attributable to Class A and Class B common stockholders, basic $ 0.18 $ 0.19 $ 0.36 $ (0.19) The Company computes diluted net income (loss) per share under the two-class method where income is reallocated between common stock, potential common stock and participating securities. Potential common stock includes stock options and restricted stock units (“RSUs”) computed using the treasury stock method and the conversion of the convertible notes and accrued interest using the if converted method. The following table presents the Company’s diluted net income (loss) per share (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Net income (loss) per share, diluted: Numerator: Net income (loss) attributable to Class A and Class B common stockholders $ 20,556 $ 22,060 $ 42,083 $ (18,869) Denominator: Weighted average shares of Class A and Class B common stock outstanding, basic 113,059 115,372 116,184 97,159 Effect of dilutive securities: Options to purchase common stock 6,640 10,482 7,255 — Restricted stock units 111 582 177 — Unvested early exercise common stock — 38 — — Weighted average shares of Class A and Class B common stock outstanding, diluted 119,810 126,474 123,616 97,159 Net income (loss) per share attributable to Class A and Class B common stockholders, diluted $ 0.17 $ 0.17 $ 0.34 $ (0.19) The following table presents the weighted average number of potentially dilutive common stock equivalents excluded from the computation of diluted net income (loss) per share because their inclusion would have been anti-dilutive (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Options to purchase common stock 102 — 77 15,249 Restricted stock units 6,197 21 5,777 5,620 Redeemable convertible preferred stock, if converted basis — — — 11,791 Convertible notes with related parties, if converted basis — — — 1,639 Unvested early exercise common stock — — — 35 Employee stock purchase plan 245 88 213 30 Total shares excluded from diluted net income (loss) per share 6,544 109 6,067 34,364 |
Revenue Information
Revenue Information | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Information | Revenue Information The Company disaggregates revenue into two streams: subscription revenue and performance-based revenue. The following table presents the Company’s revenue streams (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Subscription $ 175,129 $ 172,525 $ 537,290 $ 424,321 Performance-based 51,839 40,147 156,881 96,683 Total revenue $ 226,968 $ 212,672 $ 694,171 $ 521,004 The Company recognized $24.1 million and $20.9 million of revenue during the three months ended September 30, 2022 and 2021, respectively, that was included in the deferred revenue balances as of June 30, 2022 and 2021, respectively. The Company recognized $23.1 million and $12.4 million of revenue during the nine months ended September 30, 2022 and 2021, respectively, that was included in the deferred revenue balances as of December 31, 2021 and 2020, respectively. As of September 30, 2022 and December 31, 2021, the Company had no contract assets. Performance Obligations No revenue was recognized during the three and nine months ended September 30, 2022 and 2021 from performance obligations satisfied in previous periods. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consist of the following (in thousands): September 30, December 31, 2022 2021 Accrued marketing $ 21,704 $ 22,493 Accrued compensation and benefits 24,731 26,621 Accrued partner expenses 7,815 8,457 Accrued commissions 6,740 5,790 Accrued refunds and customer liabilities 3,410 3,646 Accrued non-income taxes 2,692 11,250 Other accrued expenses 8,669 7,956 Total accrued expenses $ 75,761 $ 86,213 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Facility In April 2021, the Company terminated its Second Amended and Restated Loan and Security Agreement dated September 2, 2020 and entered into a new $250.0 million credit facility agreement with a syndicate of banks. The credit facility has a maturity date of April 30, 2026 and bears interest at a rate based upon the Company’s Net Leverage Ratio. The Company’s Net Leverage Ratio is defined as total debt less total cash and permitted investments outstanding at period end, with a maximum total cash and permitted investments adjustment of $550.0 million, divided by the trailing 12 months of earnings, adjusted for items such as non-cash expenses and other nonrecurring transactions. The Company is also obligated to pay other customary fees including a commitment fee on a quarterly basis based on amounts committed but unused under the credit facility at a rate between 0.25% to 0.35%, depending on the Company’s Net Leverage Ratio. The credit facility is collateralized by security interests in substantially all of the Company’s assets and includes customary events of default such as non-payment of principal, non-payment of interest or fees, inaccuracy of representations and warranties, violation of certain covenants, cross default to certain other indebtedness, bankruptcy and insolvency events, material judgments against the Company, and a change of control. The occurrence of an event of default could result in the acceleration of the obligations under the credit facility. The credit facility agreement contains customary representations, warranties, affirmative covenants, such as financial statement reporting requirements, negative covenants, and financial covenants, such as maintenance of certain net leverage ratio requirements. The negative covenants include restrictions that, among other things, restrict the Company’s ability to incur liens and indebtedness, make certain investments, declare dividends, dispose of, transfer or sell assets, make stock repurchases and consummate certain other matters, all subject to certain exceptions. On November 19, 2021, the Company entered into an amendment to the credit agreement with a syndicate of banks and the lenders named therein (the “Credit Agreement”), to amend certain other provisions under the Credit Agreement relating to how letters of credit denominated in currencies other than U.S. Dollars are valued under the Credit Agreement. On January 10, 2022, the Company entered into a Second Amendment to the Credit Agreement (the “Second Amendment”) with a syndicate of banks and the lenders named therein. The Second Amendment increased the maximum amount of liquidity (including cash and permitted investments) that may be netted against the Company’s total indebtedness from $100.0 million to $550.0 million for purposes of calculating the Company’s total Net Leverage Ratio under the Credit Agreement. On April 26, 2022, the Company entered into a Third Amendment to the Credit Agreement with the administrative agent to clarify the amounts to be held with the administrative agent. The Company had no amounts outstanding under the Credit Agreement and was in compliance with the financial covenants as of September 30, 2022. The amount available under the credit facility as of September 30, 2022 was $244.5 million, which is the credit limit less letters of credit outstanding of $5.5 million. Issuance of Senior Unsecured Notes On January 12, 2022, the Company issued an aggregate principal amount of $550.0 million senior unsecured notes due 2030 (the “Notes”) in a private placement. The Notes and the guarantees are senior unsecured obligations of ZipRecruiter, Inc. The Notes were issued pursuant to an indenture dated as of January 12, 2022 (the “Indenture”) between the Company and the trustee. Pursuant to the Indenture, the Notes will mature on January 15, 2030 and bear interest at a rate of 5% per year. Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year. Unpaid amounts are included within accrued interest in the Company’s condensed consolidated balance sheets. The Indenture contains certain customary negative covenants, including but not limited to, limitations on the incurrence of debt, liens, consolidations or mergers, and asset sales. The Indenture also contains customary events of default. At its sole discretion, the Company has the option to redeem all or a part of the Notes as follows: (i) At any time prior to January 15, 2025, the Company may redeem all or part of the Notes, at its option, at a redemption price equal to 100% of the principal amount plus a make-whole premium as defined in the Indenture, and any accrued and unpaid interest, if any; and (ii) At any time on or after January 15, 2025, the Company may redeem all or any portion of the Notes, at the redemption prices equal to the percentage of principal amount set forth below, plus accrued and unpaid interest, if any, if redeemed during the 12-month period beginning on January 15 of the year indicated below: Year Percentage 2025 102.50 % 2026 101.25 % 2027 and thereafter 100.00 % Prior to January 15, 2025, the Company has the option to redeem up to 40% of the aggregate principal amount of the Notes from net cash proceeds from certain equity offerings at a redemption price equal to 105% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest. Upon the occurrence of a change of control triggering event (as defined in the Indenture), the Company must offer to repurchase the Notes at a repurchase price equal to 101% of the aggregate principal amount of the Notes to be repurchased, and any accrued and unpaid interest. The Company includes its Notes, net of debt issuance costs, within long-term borrowings in its condensed consolidated balance sheets. The Company accounts for the debt issuance costs incurred related to the Notes using the effective interest method, under which the debt issuance costs are amortized as interest expense until the applicable maturity date. As of September 30, 2022, the Company had a carrying amount of approximately $8.7 million of debt issuance costs related to the Notes. |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. If the Company determines that it is probable that a loss has been incurred and the amount is reasonably estimable, the Company will record a liability. However, if the Company determines that a contingent loss is reasonably possible and the loss or range of loss can be estimated, the Company will disclose the possible loss in the condensed consolidated financial statements. Legal costs relating to loss contingencies are expensed as incurred. In April 2019, the Company was named as a defendant in a putative class action lawsuit filed by a former employee in the Los Angeles Superior Court alleging that the Company violated the Fair Credit Reporting Act as well as owed certain compensation to employees. In January 2020, the former employee filed a related representative action in the Los Angeles Superior Court under the Private Attorney General Act alleging similar claims regarding compensation owed to employees. In January 2021, the Company filed a motion for summary judgment or, in the alternative, summary adjudication, which was granted in part and denied in part. As of September 30, 2021, the parties agreed to settle the lawsuit for an immaterial amount and accordingly, the Company recorded a liability within accrued expenses. The settlement must be approved by the Court before it can be finalized. As of September 30, 2022, the Company anticipates that the settlement agreement will be approved by early 2023. Indemnification In the ordinary course of business, the Company may provide indemnification of varying scopes and terms to customers, investors, directors and officers with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from certain claims made by third parties. These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. The Company has never paid a material claim, nor has the Company been sued in connection with these indemnification arrangements. As of September 30, 2022, the Company has not accrued a liability for these indemnification arrangements because the likelihood of incurring a payment obligation, if any, in connection with these indemnification arrangements is neither probable nor reasonably estimable. Non-income Taxes The Company collects and remits sales and use, value added and other taxes (“non-income taxes”) relating to the sale of the Company’s services in various jurisdictions. The Company accrues non-income taxes that may result from examinations by, or any anticipated negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, then the reasonably possible loss is disclosed. Due to the inherent complexity and uncertainty of these matters and judicial process in certain jurisdictions, the final outcome may be materially different from the Company’s expectations. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Financial Instruments Fair Value Measurements The Company measures certain of its financial instruments at fair value on a recurring basis. Financial instruments measured at fair value on a recurring basis primarily include the Company’s cash equivalents and marketable securities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounting standards describe a fair value hierarchy based on the following three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: - Level 1 — Quoted prices in active markets for identical assets, liabilities, or funds. - Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be 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 assets or liabilities. The following table presents our financial assets measured at fair value on a recurring basis, as well as the amortized cost basis and gross unrealized gains and losses of those assets as of September 30, 2022 (in thousands): Fair Value Measurement Balance Sheet Classification Fair Value Level Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities Cash Level 1 $ 269,408 $ — $ — $ 269,408 $ 269,408 $ — Money market mutual funds Level 1 201,639 — — 201,639 201,639 — U.S. treasury securities Level 1 120,434 22 (40) 120,416 — 120,416 Commercial paper Level 2 12,255 — — 12,255 6,415 5,840 Certificates of deposit Level 2 4,322 — — 4,322 — 4,322 Corporate notes and obligations Level 2 58,706 6 (186) 58,526 5,516 53,010 Asset-backed securities Level 2 3,134 2 (1) 3,135 — 3,135 Total cash, cash equivalents, and marketable securities $ 669,898 $ 30 $ (227) $ 669,701 $ 482,978 $ 186,723 The Company did not have any financial assets measured at fair value on a recurring basis as of December 31, 2021. The fair values of the Company’s Level 2 commercial paper and certificates of deposit are determined using quoted prices in markets that are not active or using model-driven valuations employing significant inputs derived from observable market data. The fair values of the Company’s Level 2 corporate notes and obligations and asset-backed securities are determined using an evaluated price based on a compilation of reported market information, such as benchmark yield curves, credit spreads and estimated default rates. The carrying amounts of the Company’s remaining financial instruments not discussed in the above table, including accounts receivable, accounts payable, and accrued expenses, approximate fair value because of their short-term maturities, except for the Company’s senior unsecured notes which are valued based on quoted prices for the notes in an inactive market. The value of the Notes represents a Level 2 input in the fair value hierarchy. The aggregate fair value of the Notes as of September 30, 2022 was estimated to be approximately $442.8 million. Certain assets, including goodwill and operating leases, are also subject to measurement at fair value on a non-recurring basis using Level 3 or Level 2 inputs, but only when they are deemed to be impaired. As of September 30, 2022 and December 31, 2021, no material impairments were identified on those assets required to be measured at fair value on a non-recurring basis. Equity Securities The Company’s investments in equity securities consist primarily of money market mutual funds. During the three and nine months ended September 30, 2022, the Company recorded no material unrealized gains and losses in connection with its money market mutual funds held as of September 30, 2022. The Company had no investments in money market mutual funds during the three and nine months ended September 30, 2021. Available-for-sale Debt Securities The following table summarizes the fair value of the Company’s available-for-sale debt securities by contractual maturity as of September 30, 2022 (in thousands): Due within 1 year $ 182,997 Due after 1 year through 5 years 15,657 Total available-for-sale debt securities $ 198,654 Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations. The following table summarizes the available-for-sale debt securities which have been in a continuous unrealized loss position for less than 12 months as of September 30, 2022 (in thousands): Fair Value Gross Unrealized Losses Asset-backed securities $ 535 $ (1) Corporate notes and obligations 50,876 (186) U.S. treasury securities 44,738 (40) Total available-for-sale debt securities $ 96,149 $ (227) The Company had no available-for-sale debt securities in a continuous unrealized loss position for more than 12 months as of September 30, 2022. The Company did not recognize any credit losses for its available-for-sale debt securities during the three and nine months ended September 30, 2022. |
Common Stock and Redeemable Con
Common Stock and Redeemable Convertible Preferred Stock | 9 Months Ended |
Sep. 30, 2022 | |
Equity and Temporary Equity [Abstract] | |
Common Stock and Redeemable Convertible Preferred Stock | Common Stock and Redeemable Convertible Preferred Stock Common Stock The Company is authorized to issue a total of 1.45 billion shares consisting of 700 million shares of Class A common stock, 700 million shares of Class B common stock, and 50 million shares of preferred stock, all with a par value per share of $0.00001. The Class A common stock is entitled to one vote per share and the Class B common stock is entitled to twenty votes per share. The Class A and Class B common stock have the same dividend and liquidation rights. The Class B common stock converts to Class A common stock at any time at the option of the holder. Additionally, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, except for certain transfers described in the amended and restated certificate of incorporation. Redeemable Convertible Preferred Stock In April 2021, the Company amended and restated its certificate of incorporation such that the redeemable convertible preferred stock would automatically convert into shares of common stock upon the effectiveness of the Company’s registration statement related to the direct listing of its Class A common stock on the New York Stock Exchange (the “Direct Listing”). |
Share Repurchase Program
Share Repurchase Program | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share Repurchase Program | Share Repurchase Program In February 2022, the Company’s board of directors authorized the Company to repurchase up to $100.0 million of outstanding shares of its common stock pursuant to a new share repurchase program (the “Program”). Additionally, in June 2022, the Company’s board of directors authorized an increase to the Program of $150.0 million, which resulted in a total of $250.0 million of outstanding shares of its common stock authorized to be repurchased under the Program. The Company may repurchase shares of common stock through open market or privately negotiated transactions, block purchases, or pursuant to one or more Rule 10b5-1 plans. The Program has no expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason by the board of directors. The Program does not obligate the Company to repurchase shares of common stock. There is no minimum or maximum number of shares to be repurchased under the Program. The timing and actual number of shares repurchased will depend on a variety of factors including price, market conditions, corporate and regulatory requirements, and other investment opportunities. During the nine months ended September 30, 2022, the Company repurchased 10.7 million shares of its Class A common stock for $200.1 million under the share repurchase program, including 5.1 million shares of its Class A common stock delivered under accelerated share repurchase agreements (the “ASRs”) totaling $100.0 million, 5.0 million shares of its Class A common stock delivered under a Rule 10b5-1 plan totaling $87.8 million, and 0.6 million shares of its Class A common stock totaling $12.3 million through open market purchases. Approximately $49.9 million remains available for future repurchases of the Company’s Class A common stock under the Company’s share repurchase program as of September 30, 2022. All shares repurchased under the share repurchase program were immediately retired. Repurchased shares reduced the Company’s outstanding shares and its weighted average number of common shares outstanding for purposes of calculating basic and diluted earnings per share. An immaterial number of the shares repurchased during the quarter ended September 30, 2022 were settled subsequent to the end of the quarter, and therefore continue to be legally outstanding as of September 30, 2022. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Total stock-based compensation expense is recorded in the Condensed Consolidated Statements of Operations as follows (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Cost of revenue $ 210 $ 158 $ 613 $ 911 Sales and marketing 2,890 2,999 7,947 15,415 Research and development 7,655 6,935 23,215 26,333 General and administrative 8,569 11,941 25,703 44,966 Total stock-based compensation $ 19,324 $ 22,033 $ 57,478 $ 87,625 Equity Incentive Plans Prior to adoption of the 2021 Equity Incentive Plan (the “2021 Plan”), the Company granted awards under the 2012 Equity Incentive Plan (the “2012 Plan”) or 2014 Equity Incentive Plan (the “2014 Plan”, and together with the 2012 Plan, the “Prior Plans”). All awards currently are granted from the 2021 Plan. However, the Prior Plans continue to govern the terms and conditions of the outstanding awards previously granted under the 2012 Plan and 2014 Plan. Under the amended and restated certificate of incorporation, all outstanding options to purchase common stock became options to purchase an equivalent number of shares of Class B common stock and all RSUs became RSUs for an equivalent number of shares of Class B common stock under the Prior Plans. In April 2021, the Company adopted the 2021 Plan, which became effective on May 14, 2021 in connection with the Direct Listing. The 2021 Plan permits the grant of incentive stock options to employees and the grant of non-qualified stock options, restricted stock, restricted stock awards, RSUs, stock appreciation rights, performance units, performance shares and stock bonus awards to the Company’s employees, directors, and consultants. Under the 2021 Plan, 10.7 million shares of Class A common stock were initially reserved for issuance. The number of shares initially reserved for issuance pursuant to awards under the 2021 Plan will be increased by (i) (a) any reserved shares not issued or subject to outstanding awards granted under the Prior Plans that cease to be subject to such awards by forfeiture or otherwise after the effective date, (b) shares issued under the Prior Plans before or after the effective date pursuant to the exercise of stock options that are, after the effective date, forfeited, (c) shares issued under the Prior Plans that are repurchased by the Company at the original purchase price or are otherwise forfeited, and (d) shares that are subject to stock options or other awards under the Prior Plans that are used to pay the exercise price of a stock option or withheld to satisfy the tax withholding obligations related to any award and (ii) an annual increase on January 1st of each year beginning in 2022 through 2031, by the lesser of (a) 5% of the number of shares of all classes of the Company’s common stock issued and outstanding on December 31 immediately prior to the date of increase or (b) such number of shares determined by the board of directors. Under the 2021 Plan, as of September 30, 2022, 18.4 million shares of Class A common stock were authorized, of which 11.8 million shares of Class A common stock were available for future issuance. 2021 Employee Stock Purchase Plan In August 2021, the Company launched the 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides for concurrent six-month offering and purchase periods beginning February 15 and August 15 of each year. On January 1 of each of year, 2022 through 2031, the aggregate number of shares of Class A common stock reserved for issuance under the ESPP shall be increased automatically by the number of shares equal to 1% of the total number of outstanding shares of Class A common stock and shares of preferred stock of the Company (on an as converted to common stock basis) on the immediately preceding December 31; provided that the board of directors or compensation committee may in its sole discretion reduce the amount of the increase in any particular year. As of September 30, 2022, 2.2 million shares of Class A common stock were authorized. The ESPP allows eligible employees the option to purchase shares of the Company's Class A common stock at a 15% discount through payroll deductions of their eligible compensation, subject to certain plan limitations. On each purchase date, eligible employees can purchase the Company’s Class A common stock at a price per share equal to 85% of the lesser of the fair market value of the Company’s Class A common stock on (i) the offering date or (ii) the purchase date. The purchase date is the last day of any concurrent offering and purchase period. During the nine months ended September 30, 2022, 0.4 million shares of Class A common stock were purchased under the ESPP for an aggregate amount of $8.1 million. For the ESPP, the Company recorded stock-based compensation expense of $0.6 million and $1.9 million during the three and nine months ended September 30, 2022, respectively, and $0.4 million during both the three and nine months ended September 30, 2021. As of September 30, 2022, there was $1.2 million of unrecognized stock-based compensation expense that is expected to be recognized over the remaining term of the offering period ending February 14, 2023. As of September 30, 2022, the Company recorded a liability of $1.7 million related to the accumulated payroll deductions, which are refundable to employees who withdraw from the ESPP. This amount is included within accrued expenses in the accompanying condensed consolidated balance sheets. Stock Options A summary of the Company’s stock option activity under the Prior Plans and the 2021 Plan (collectively, the “Plans”) for the nine months ended September 30, 2022 is as follows (in thousands, except weighted average information): Number of Options Outstanding Weighted Average Exercise Price Per Share Outstanding at December 31, 2021 9,841 $ 2.27 Granted — — Exercised (2,066) 1.87 Forfeited/Canceled (284) 5.05 Outstanding at September 30, 2022 7,491 $ 2.27 Exercisable at September 30, 2022 7,111 $ 2.25 As of September 30, 2022, total remaining stock-based compensation expense for unvested stock options is $3.9 million, which is expected to be recognized over a weighted average period of 1.1 years. Restricted Stock Units The Company has granted RSUs to certain employees and directors of the Company. RSUs granted prior to the Company’s Direct Listing vest upon the satisfaction of both a time-based service condition and a liquidity event requirement. The time-based service condition for these awards is generally satisfied over four years. On April 19, 2021, the Company’s board of directors waived the liquidity event performance condition for the RSUs then outstanding so those that had satisfied the service condition would vest upon the earlier of the first day of trading of the Company’s common stock on the New York Stock Exchange, or March 15, 2022. RSUs granted subsequent to the Company’s Direct Listing generally have a time-based service condition, and in some instances, both a time-based service condition and a performance condition. On April 19, 2021, the Company also granted the CEO Performance Award, which provides for a grant of 1.4 million RSUs. The CEO Performance Award vests upon achieving stock price targets as well as satisfying certain minimum service requirements. During the three and nine months ended September 30, 2022, the Company recorded stock-based compensation expense of $1.5 million and $4.4 million, respectively, related to the CEO Performance Award. During the three and nine months ended September 30, 2021, the Company recorded stock-based compensation expense of $1.5 million and $2.1 million, respectively, related to the CEO Performance Award. On September 21, 2021, the Company’s former Chief Operating Officer (“COO”) resigned and entered into a transition and separation agreement with the Company, where all RSUs awarded to the former COO prior to the resignation will continue to vest for a certain period of time (“Transition Period”). This agreement resulted in modifications to the RSUs and options on the date of the separation agreement. Approximately $3.8 million of stock-based compensation expense was recognized by the Company during both the three and nine months ended September 30, 2021 related to the modification of the awards, representing the incremental fair value of the awards on the date of the modification. For all RSUs, excluding the CEO Performance Award and modification of the COO awards, the Company recorded stock-based compensation expense of $17.1 million and $50.2 million during the three and nine months ended September 30, 2022, respectively, and stock-based compensation expense of $15.8 million and $79.2 million during the three and nine months ended September 30, 2021, respectively. The Company did not recognize any stock-based compensation expense during the three months ended March 31, 2021 for any RSUs granted because the Company concluded that during the three months ended March 31, 2021 and prior to the Direct Listing, the liquidity event performance condition described above for the RSUs was not probable of being satisfied. A summary of the Company’s RSU activity for the nine months ended September 30, 2022 is as follows (in thousands, except weighted average information): Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2021 7,532 $ 24.20 Granted 3,777 19.86 Vested (2,057) 16.66 Forfeited/Canceled (836) 21.11 Unvested at September 30, 2022 8,416 $ 20.60 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company computes its provision (benefit) for income taxes by applying the estimated annual effective tax rate to pretax income or loss and adjusts the provision for discrete tax items recorded in the period. The income tax benefits, effective tax rates, and statutory federal income tax rates for the three and nine months ended September 30, 2022 and September 30, 2021 were as follows (in thousands, except percentages): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Income tax expense (benefit) $ 1,875 $ (4,467) $ 5,884 $ (17,139) Effective tax rate 8.4 % (25.4) % 12.3 % 49.6 % Statutory federal income tax rate 21 % 21 % 21 % 21 % The effective tax rate for the three and nine months ended September 30, 2022 differed from the U.S. federal statutory tax rate of 21% primarily due to book and tax differences relating to the exercise of non-qualified stock options and settlement of RSUs, and from the net tax benefits from research and development tax credits, partially offset by non-deductible expenses including certain stock-based compensation expenses and limitations on the amount of deductible officer compensation. The effective tax rate for the three and nine months ended September 30, 2021 differed from the U.S. federal statutory tax rate of 21% primarily due to book and tax differences relating to the exercise of non-qualified stock options and from the net tax benefits from research and development tax credits, partially offset by non-deductible expenses including certain stock-based compensation expenses. The Company evaluates deferred tax assets each period for recoverability and determines whether a valuation allowance should be recorded for assets that do not meet the threshold of “more likely than not” to be realized in the future. As a result of increasing qualifying research expenditures in relation to the Company’s projected California taxable income, during the three months ended September 30, 2022, the Company concluded that its deferred tax asset for California research and development credit carryforwards are no longer more likely than not to be realized in the future. Accordingly, the Company has established a $12.0 million valuation allowance against these assets. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsIn November 2022, the Company’s board of directors authorized an increase to the Program of $200.0 million, which resulted in a total of $450.0 million of outstanding shares of the Company's common stock authorized to be repurchased under the Program. |
Basis of Presentation, Princi_2
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, certain information and disclosures normally included in consolidated financial statements presented in accordance with U.S. GAAP have been condensed or omitted. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 Form 10-K”). The condensed consolidated balance sheet as of December 31, 2021 has been derived from the Company’s audited consolidated financial statements. Certain reclassifications have been made to prior year presentation to conform to current year presentation. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the condensed consolidated financial statements. There have been no changes in the Company’s accounting policies from those disclosed in the Company’s audited consolidated financial statements and the related notes included in the 2021 Form 10-K, except for the recently adopted accounting pronouncement and the accounting policies related to the senior unsecured notes and share repurchases, which are further discussed in Note 6 and Note 10, respectively, as well as the accounting policies related to investments, which are discussed in Note 8 and later in this Note. |
Use of Estimates | The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates include revenue recognition, estimates relating to the measurement of operating lease right-of-use (“ROU”) assets and operating lease liabilities, determination of the fair value of stock-based awards, valuation of common stock in periods prior to becoming a public company, collectability of accounts receivable, determination of the fair value of investments, impairment of investments and long-lived assets including goodwill, carrying value and useful lives of property and equipment and internal-use software, the amortization period for deferred commission costs, and income taxes. By their nature, estimates are subject to an inherent degree of uncertainty and actual results could differ from those estimates. The impact of the Coronavirus pandemic (“COVID-19”) continues to evolve. As a result, many of the Company’s estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. As of the date these condensed consolidated financial statements are issued, the Company is not aware of any specific event or circumstance that would require an update to the Company’s estimates or judgments, or change to the carrying value of the Company’s assets or liabilities. However, these estimates and judgments may change as new events occur and additional information is obtained, which may result in changes being recognized in the consolidated financial statements in future periods. Actual results could differ from those estimates and any such differences may have a material impact on the financial statements. |
Investments | The Company maintains an investment portfolio of primarily highly rated debt securities and money market mutual funds to manage its excess cash reserves. The Company’s primary objectives in investing its excess cash reserves are to preserve capital, provide sufficient liquidity to satisfy both operational cash flow requirements and potential strategic investment opportunities, and to obtain a reasonable or market rate of return on investments. The Company’s investments are all highly liquid and available for use in current operations, including those with maturity dates beyond one year, and therefore the Company classifies these securities within current assets in its condensed consolidated balance sheets. The Company considers its highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Investments not considered cash equivalents are classified as marketable securities in the Company’s condensed consolidated balance sheets. The Company classifies and accounts for its money market mutual funds which have readily determinable fair values as equity securities, and it carries such securities at fair value with unrealized gains and losses reported in other income (expense), net in its condensed consolidated statement of operations. The Company classifies and accounts for its debt securities as available-for-sale, and it carries such securities at fair value with unrealized gains and losses reported net of tax as a separate component of stockholders’ equity in accumulated other comprehensive income. During both the three and nine months ended September 30, 2022, in connection with its available-for-sale debt securities, the Company recorded pre-tax unrealized losses in other comprehensive loss of $0.2 million with an associated tax benefit of $0.1 million. The Company held no investments in available-for-sale debt securities during the three and nine months ended September 30, 2021. The Company determines any realized gains and losses on the sale of its available-for-sale debt securities using a specific identification method, and it records such gains and losses through other income (expense), net in its condensed consolidated statement of operations. During the three and nine months ended September 30, 2022, the Company did not sell any of its available-for-sale debt securities and did not reclassify any amounts out of accumulated other comprehensive income into other income (expense), net in the condensed consolidated statement of operations. If an available-for-sale debt security’s fair value declines below its amortized cost basis, the Company determines whether an other-than-temporary impairment has occurred. The Company evaluates whether it intends to sell the security, or whether it more likely than not will be required to sell the security before the recovery of its amortized cost basis. If either condition is met, the Company records an other-than-temporary impairment loss on the security through other income (expense), net in its condensed consolidated statement of operations. If neither condition is met, the Company evaluates whether the decline is the result of credit-related factors, in which case the Company records the credit-related portion of the other-than-temporary impairment loss through other income (expense), net in the condensed consolidated statement of operations, and it records the non-credit-related portion of the other-than-temporary impairment loss, net of tax, through other comprehensive income in the condensed consolidated statement of comprehensive income (loss). |
Segments and Geographic Information | The Company operates as a single operating segment. The Company’s Chief Operating Decision Maker, the CEO, regularly reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources. |
Concentration of Credit Risk | Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, and accounts receivable. The Company maintains its cash accounts with large financial institutions and at times, the cash accounts may exceed Federal Deposit Insurance Corporation limits. The Company has not experienced any losses in such accounts. The Company invests only in highly rated debt and equity securities. The Company believes the financial institutions that hold its investments are financially sound, and accordingly, are subject to minimal credit risk. |
Recent Accounting Pronouncements | Accounting Pronouncements Not Yet Adopted As an emerging growth company (“EGC”), the Company is allowed by the Jumpstart Our Business Startups Act to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use the adoption dates applicable to private companies. The adoption dates discussed below reflect this election. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. The Company will become a large accelerated filer and will no longer qualify as an EGC at the conclusion of the fiscal year ending December 31, 2022. The adoption dates discussed below reflect the updated transition periods for complying with accounting pronouncements not yet adopted. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing model for measuring the allowance for credit losses for financial assets measured at amortized cost (including accounts receivable) to a model that is based on the expected losses rather than incurred losses. Under the new credit loss model, lifetime expected credit losses on such financial assets are measured and recognized at each reporting date based on historical, current, and forecasted information. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, and in April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. These ASUs provide supplemental guidance and clarification to ASU 2016-13 and must be adopted concurrently with the adoption of ASU 2016-13, cumulatively referred to as “Topic 326.” Topic 326 is effective for the Company as of December 31, 2022, and the adoption, including the impact and required disclosures, will be included in its Annual Report on Form 10-K for the year ending December 31, 2022. The Company is currently evaluating the effects of the adoption of this update on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which enhances and simplifies various aspects of income tax accounting guidance. ASU 2019-12 is effective for the Company as of December 31, 2022, and the adoption, including the impact and required disclosures, will be included in its Annual Report on Form 10-K for the year ending December 31, 2022. The Company is currently evaluating the effects of the adoption of this update on its consolidated financial statements. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and which removes certain conditions that should be considered in the derivative scope exception evaluation under Subtopic 815-40. The Company early adopted ASU 2020-06 on January 1, 2022 and applied the changes using the modified retrospective approach. The adoption did not have a material impact on the Company’s condensed consolidated financial statements. |
Net Income (Loss) Per Share | Basic and diluted net income (loss) per share are computed using the two-class method as required when there are participating securities and multiple classes of common stock. Basic net income (loss) per share is computed using the weighted-average number of shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period.Prior to May 14, 2021, when the Company’s Series A preferred stock and Series B preferred stock converted into shares of Class B common stock, the Company’s redeemable convertible preferred stock were participating securities as the holders of the redeemable convertible preferred stock were entitled to participate in dividends with common stock. In periods of net income, net income after deducting the accretion of redeemable convertible preferred stock was attributed to common stockholders and participating securities based on their participation rights. Net losses after deducting the accretion of redeemable convertible preferred stock are not allocated to the participating securities as the participating securities do not have a contractual obligation to share in any losses.In April 2021, the Company filed its amended and restated certificate of incorporation, which resulted in the creation of Class A common stock and Class B common stock. As the liquidation and dividend rights are identical for Class A and Class B common stock (see Note 9), the undistributed earnings under the two-class method are allocated on a proportional basis and the resulting net income (loss) per share attributable to common stockholders is, therefore, the same for both Class A and Class B common stock on an individual or combined basis. |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method | The following table presents the Company’s basic net income (loss) per share (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Net income (loss) per share, basic: Net income (loss) $ 20,556 $ 22,060 $ 42,083 $ (17,389) Less: Accretion of redeemable convertible preferred stock — — — (1,480) Net income (loss) attributable to Class A and Class B common stockholders $ 20,556 $ 22,060 $ 42,083 $ (18,869) Weighted average shares of Class A and Class B common stock outstanding 113,059 115,372 116,184 97,159 Net income (loss) per share attributable to Class A and Class B common stockholders, basic $ 0.18 $ 0.19 $ 0.36 $ (0.19) |
Schedule of Earnings Per Share, Diluted, by Common Class, Including Two Class Method | The following table presents the Company’s diluted net income (loss) per share (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Net income (loss) per share, diluted: Numerator: Net income (loss) attributable to Class A and Class B common stockholders $ 20,556 $ 22,060 $ 42,083 $ (18,869) Denominator: Weighted average shares of Class A and Class B common stock outstanding, basic 113,059 115,372 116,184 97,159 Effect of dilutive securities: Options to purchase common stock 6,640 10,482 7,255 — Restricted stock units 111 582 177 — Unvested early exercise common stock — 38 — — Weighted average shares of Class A and Class B common stock outstanding, diluted 119,810 126,474 123,616 97,159 Net income (loss) per share attributable to Class A and Class B common stockholders, diluted $ 0.17 $ 0.17 $ 0.34 $ (0.19) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the weighted average number of potentially dilutive common stock equivalents excluded from the computation of diluted net income (loss) per share because their inclusion would have been anti-dilutive (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Options to purchase common stock 102 — 77 15,249 Restricted stock units 6,197 21 5,777 5,620 Redeemable convertible preferred stock, if converted basis — — — 11,791 Convertible notes with related parties, if converted basis — — — 1,639 Unvested early exercise common stock — — — 35 Employee stock purchase plan 245 88 213 30 Total shares excluded from diluted net income (loss) per share 6,544 109 6,067 34,364 |
Revenue Information (Tables)
Revenue Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents the Company’s revenue streams (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Subscription $ 175,129 $ 172,525 $ 537,290 $ 424,321 Performance-based 51,839 40,147 156,881 96,683 Total revenue $ 226,968 $ 212,672 $ 694,171 $ 521,004 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consist of the following (in thousands): September 30, December 31, 2022 2021 Accrued marketing $ 21,704 $ 22,493 Accrued compensation and benefits 24,731 26,621 Accrued partner expenses 7,815 8,457 Accrued commissions 6,740 5,790 Accrued refunds and customer liabilities 3,410 3,646 Accrued non-income taxes 2,692 11,250 Other accrued expenses 8,669 7,956 Total accrued expenses $ 75,761 $ 86,213 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Instrument Redemption | At any time on or after January 15, 2025, the Company may redeem all or any portion of the Notes, at the redemption prices equal to the percentage of principal amount set forth below, plus accrued and unpaid interest, if any, if redeemed during the 12-month period beginning on January 15 of the year indicated below: Year Percentage 2025 102.50 % 2026 101.25 % 2027 and thereafter 100.00 % |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Financial Assets Measured at Fair Value on a Recurring Basis | The following table presents our financial assets measured at fair value on a recurring basis, as well as the amortized cost basis and gross unrealized gains and losses of those assets as of September 30, 2022 (in thousands): Fair Value Measurement Balance Sheet Classification Fair Value Level Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities Cash Level 1 $ 269,408 $ — $ — $ 269,408 $ 269,408 $ — Money market mutual funds Level 1 201,639 — — 201,639 201,639 — U.S. treasury securities Level 1 120,434 22 (40) 120,416 — 120,416 Commercial paper Level 2 12,255 — — 12,255 6,415 5,840 Certificates of deposit Level 2 4,322 — — 4,322 — 4,322 Corporate notes and obligations Level 2 58,706 6 (186) 58,526 5,516 53,010 Asset-backed securities Level 2 3,134 2 (1) 3,135 — 3,135 Total cash, cash equivalents, and marketable securities $ 669,898 $ 30 $ (227) $ 669,701 $ 482,978 $ 186,723 |
Investments Classified by Contractual Maturity Date | The following table summarizes the fair value of the Company’s available-for-sale debt securities by contractual maturity as of September 30, 2022 (in thousands): Due within 1 year $ 182,997 Due after 1 year through 5 years 15,657 Total available-for-sale debt securities $ 198,654 |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value [Table Text Block] | The following table summarizes the available-for-sale debt securities which have been in a continuous unrealized loss position for less than 12 months as of September 30, 2022 (in thousands): Fair Value Gross Unrealized Losses Asset-backed securities $ 535 $ (1) Corporate notes and obligations 50,876 (186) U.S. treasury securities 44,738 (40) Total available-for-sale debt securities $ 96,149 $ (227) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Arrangement, Expensed and Capitalized, Amount | Total stock-based compensation expense is recorded in the Condensed Consolidated Statements of Operations as follows (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Cost of revenue $ 210 $ 158 $ 613 $ 911 Sales and marketing 2,890 2,999 7,947 15,415 Research and development 7,655 6,935 23,215 26,333 General and administrative 8,569 11,941 25,703 44,966 Total stock-based compensation $ 19,324 $ 22,033 $ 57,478 $ 87,625 |
Schedule of Stock Options Roll Forward | A summary of the Company’s stock option activity under the Prior Plans and the 2021 Plan (collectively, the “Plans”) for the nine months ended September 30, 2022 is as follows (in thousands, except weighted average information): Number of Options Outstanding Weighted Average Exercise Price Per Share Outstanding at December 31, 2021 9,841 $ 2.27 Granted — — Exercised (2,066) 1.87 Forfeited/Canceled (284) 5.05 Outstanding at September 30, 2022 7,491 $ 2.27 Exercisable at September 30, 2022 7,111 $ 2.25 |
Schedule of Nonvested Restricted Stock Units Activity | A summary of the Company’s RSU activity for the nine months ended September 30, 2022 is as follows (in thousands, except weighted average information): Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2021 7,532 $ 24.20 Granted 3,777 19.86 Vested (2,057) 16.66 Forfeited/Canceled (836) 21.11 Unvested at September 30, 2022 8,416 $ 20.60 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The income tax benefits, effective tax rates, and statutory federal income tax rates for the three and nine months ended September 30, 2022 and September 30, 2021 were as follows (in thousands, except percentages): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Income tax expense (benefit) $ 1,875 $ (4,467) $ 5,884 $ (17,139) Effective tax rate 8.4 % (25.4) % 12.3 % 49.6 % Statutory federal income tax rate 21 % 21 % 21 % 21 % |
Basis of Presentation, Princi_3
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Concentration Risk [Line Items] | ||||
Gain (loss) recognized in other comprehensive income | $ (200) | $ (200) | ||
Associated tax benefit | 100 | 100 | ||
Available for sale debt securities | $ 198,654 | $ 198,654 | $ 0 | |
Accounts Receivable | Customer Concentration Risk | Customer One | ||||
Concentration Risk [Line Items] | ||||
Concentration risk (as a percent) | 13% | 16% |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Earnings Per Share - Basic (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net income (loss) per share, basic: | ||||||||
Net income (loss) | $ 20,556 | $ 13,110 | $ 8,417 | $ 22,060 | $ (52,847) | $ 13,398 | $ 42,083 | $ (17,389) |
Less: Accretion of redeemable convertible preferred stock | 0 | 0 | 0 | (1,480) | ||||
Net income (loss) attributable to Class A and Class B common stockholders | $ 20,556 | $ 22,060 | $ 42,083 | $ (18,869) | ||||
Weighted average shares of Class A and Class B common stock outstanding (in shares) | 113,059 | 115,372 | 116,184 | 97,159 | ||||
Net income (loss) per share attributable to Class A and Class B common stockholders, basic (in dollars per share) | $ 0.18 | $ 0.19 | $ 0.36 | $ (0.19) |
Net Income (Loss) Per Share -_2
Net Income (Loss) Per Share - Schedule of Earnings Per Share - Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net income (loss) attributable to Class A and Class B common stockholders | $ 20,556 | $ 22,060 | $ 42,083 | $ (18,869) |
Denominator: | ||||
Weighted average shares of Class A and Class B common stock outstanding (in shares) | 113,059 | 115,372 | 116,184 | 97,159 |
Effect of dilutive securities: | ||||
Weighted average shares of Class A and Class B common stock outstanding, diluted (in shares) | 119,810 | 126,474 | 123,616 | 97,159 |
Net income (loss) per share attributable to Class A and Class B common stockholders, diluted (in dollars per share) | $ 0.17 | $ 0.17 | $ 0.34 | $ (0.19) |
Options to purchase common stock | ||||
Effect of dilutive securities: | ||||
Share based payment arrangements (in shares) | 6,640 | 10,482 | 7,255 | 0 |
Restricted stock units | ||||
Effect of dilutive securities: | ||||
Share based payment arrangements (in shares) | 111 | 582 | 177 | 0 |
Unvested early exercise common stock | ||||
Effect of dilutive securities: | ||||
Share based payment arrangements (in shares) | 0 | 38 | 0 | 0 |
Net Income (Loss) Per Share -_3
Net Income (Loss) Per Share - Schedule of Antidilutive Options (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares excluded from diluted net income (loss) per share (in shares) | 6,544 | 109 | 6,067 | 34,364 |
Options to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares excluded from diluted net income (loss) per share (in shares) | 102 | 0 | 77 | 15,249 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares excluded from diluted net income (loss) per share (in shares) | 6,197 | 21 | 5,777 | 5,620 |
Redeemable convertible preferred stock, if converted basis | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares excluded from diluted net income (loss) per share (in shares) | 0 | 0 | 0 | 11,791 |
Convertible notes with related parties, if converted basis | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares excluded from diluted net income (loss) per share (in shares) | 0 | 0 | 0 | 1,639 |
Unvested early exercise common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares excluded from diluted net income (loss) per share (in shares) | 0 | 0 | 0 | 35 |
Employee stock purchase plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total shares excluded from diluted net income (loss) per share (in shares) | 245 | 88 | 213 | 30 |
Revenue Information - Narrative
Revenue Information - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) revenueStream | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) revenueStream | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Revenue from Contract with Customer [Abstract] | |||||
Number of revenue streams | revenueStream | 2 | 2 | |||
Revenue that was included in deferred revenue balances | $ 24,100,000 | $ 20,900,000 | $ 23,100,000 | $ 12,400,000 | |
Contract assets | 0 | 0 | $ 0 | ||
Revenue recognized from performance obligations satisfied in previous periods | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue Information - Schedule
Revenue Information - Schedule of Revenue Streams (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 226,968 | $ 212,672 | $ 694,171 | $ 521,004 |
Subscription | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 175,129 | 172,525 | 537,290 | 424,321 |
Performance-based | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 51,839 | $ 40,147 | $ 156,881 | $ 96,683 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued marketing | $ 21,704 | $ 22,493 |
Accrued compensation and benefits | 24,731 | 26,621 |
Accrued partner expenses | 7,815 | 8,457 |
Accrued commissions | 6,740 | 5,790 |
Accrued refunds and customer liabilities | 3,410 | 3,646 |
Accrued non-income taxes | 2,692 | 11,250 |
Other accrued expenses | 8,669 | 7,956 |
Total accrued expenses | $ 75,761 | $ 86,213 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jan. 12, 2022 | Apr. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Jan. 10, 2022 | |
Line of Credit Facility [Line Items] | |||||
Debt agreement, maximum amount of liquidity | $ 100,000,000 | $ 550,000,000 | |||
Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility | 250,000,000 | ||||
Maximum cash and permitted investments adjustment | $ 550,000,000 | ||||
Line of credit, amount available | $ 244,500,000 | $ 244,500,000 | |||
Line of Credit | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt outstanding | 0 | 0 | |||
Line of Credit | Letter of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt outstanding | 5,500,000 | 5,500,000 | |||
Line of Credit | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Commitment fee (as a percent) | 0.25% | ||||
Line of Credit | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Commitment fee (as a percent) | 0.35% | ||||
Senior Notes | |||||
Line of Credit Facility [Line Items] | |||||
Debt issuance costs | 8,700,000 | 8,700,000 | |||
Senior Notes | Senior Notes Due 2030 | |||||
Line of Credit Facility [Line Items] | |||||
Convertible notes issued | $ 550,000,000 | ||||
Debt instrument, stated rate (as a percent) | 5% | ||||
Redemption price (as a percent) | 100% | ||||
Redemption price as a percent of principal amount redeemed (as a percent) | 40% | ||||
Interest expense | $ 7,100,000 | $ 20,500,000 | |||
Effective interest rate (as a percent) | 5.40% | 5.40% | |||
Amortization of debt issuance costs | $ 200,000 | $ 700,000 | |||
Senior Notes | Senior Notes Due 2030 | Debt Instrument, Redemption, Period Four | |||||
Line of Credit Facility [Line Items] | |||||
Redemption price (as a percent) | 105% | ||||
Senior Notes | Senior Notes Due 2030 | Debt Instrument, Redemption, Period Five | |||||
Line of Credit Facility [Line Items] | |||||
Redemption price (as a percent) | 101% |
Debt - Schedule of Redemption P
Debt - Schedule of Redemption Percentages (Details) - Senior Notes Due 2030 - Senior Notes | Jan. 12, 2022 |
Line of Credit Facility [Line Items] | |
Redemption price (as a percent) | 100% |
2025 | |
Line of Credit Facility [Line Items] | |
Redemption price (as a percent) | 102.50% |
2026 | |
Line of Credit Facility [Line Items] | |
Redemption price (as a percent) | 101.25% |
2027 and thereafter | |
Line of Credit Facility [Line Items] | |
Redemption price (as a percent) | 100% |
Commitment and Contingencies (D
Commitment and Contingencies (Details) | Sep. 30, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Accrued liability for indemnification arrangements | $ 0 |
Financial Instruments - Amortiz
Financial Instruments - Amortized Cost, Unrealized Gains and Losses, and Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Debt Securities, Available-for-Sale [Line Items] | |||
Available for sale debt securities | $ 198,654 | $ 0 | |
Balance Sheet Classification, Cash and Cash Equivalents | 482,978 | $ 254,621 | |
Marketable securities | 186,723 | $ 0 | |
Cash | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Balance Sheet Classification, Cash and Cash Equivalents | 269,408 | ||
Money market mutual funds | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Balance Sheet Classification, Cash and Cash Equivalents | 201,639 | $ 0 | |
Fair Value, Measurements, Recurring | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Gross Unrealized Gains | 30 | ||
Fair Value Measurement, Gross Unrealized Losses | (227) | ||
Total cash, cash equivalents, and marketable securities | 669,898 | ||
Total cash, cash equivalents, and marketable securities | 669,701 | ||
Level 1 | Fair Value, Measurements, Recurring | Cash | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Cash and cash equivalent | 269,408 | ||
Level 1 | Fair Value, Measurements, Recurring | Money market mutual funds | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Cash and cash equivalent | 201,639 | ||
U.S. treasury securities | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Marketable securities | 120,416 | ||
U.S. treasury securities | Level 1 | Fair Value, Measurements, Recurring | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Amortized Cost Basis | 120,434 | ||
Fair Value Measurement, Gross Unrealized Gains | 22 | ||
Fair Value Measurement, Gross Unrealized Losses | (40) | ||
Available for sale debt securities | 120,416 | ||
Commercial paper | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Balance Sheet Classification, Cash and Cash Equivalents | 6,415 | ||
Marketable securities | 5,840 | ||
Commercial paper | Level 2 | Fair Value, Measurements, Recurring | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Amortized Cost Basis | 12,255 | ||
Available for sale debt securities | 12,255 | ||
Certificates of deposit | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Marketable securities | 4,322 | ||
Certificates of deposit | Level 2 | Fair Value, Measurements, Recurring | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Amortized Cost Basis | 4,322 | ||
Available for sale debt securities | 4,322 | ||
Corporate notes and obligations | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Balance Sheet Classification, Cash and Cash Equivalents | 5,516 | ||
Marketable securities | 53,010 | ||
Corporate notes and obligations | Level 2 | Fair Value, Measurements, Recurring | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Amortized Cost Basis | 58,706 | ||
Fair Value Measurement, Gross Unrealized Gains | 6 | ||
Fair Value Measurement, Gross Unrealized Losses | (186) | ||
Available for sale debt securities | 58,526 | ||
Asset-backed securities | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Marketable securities | 3,135 | ||
Asset-backed securities | Level 2 | Fair Value, Measurements, Recurring | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Amortized Cost Basis | 3,134 | ||
Fair Value Measurement, Gross Unrealized Gains | 2 | ||
Fair Value Measurement, Gross Unrealized Losses | (1) | ||
Available for sale debt securities | $ 3,135 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Debt Securities, Available-for-Sale [Line Items] | ||||
Unrealized gains (losses) on equity securities | $ 0 | $ 0 | ||
Cash and cash equivalents | 482,978 | 482,978 | $ 254,621 | |
12 months or longer, gross unrealized losses | 0 | 0 | ||
Credit losses recorded for available-for-sale debt securities | 0 | 0 | ||
Money market mutual funds | ||||
Debt Securities, Available-for-Sale [Line Items] | ||||
Cash and cash equivalents | 201,639 | 201,639 | $ 0 | |
Level 2 | ||||
Debt Securities, Available-for-Sale [Line Items] | ||||
Fair value of debt | 442,800 | 442,800 | ||
Fair Value, Nonrecurring | ||||
Debt Securities, Available-for-Sale [Line Items] | ||||
Material impairments on assets | $ 0 | $ 0 | $ 0 |
Financial Instruments - Availab
Financial Instruments - Available-for-sale Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 |
Available-for-Sale Securities, Debt Maturities [Abstract] | ||
Due within 1 year | $ 182,997 | |
Due after 1 year through 5 years | 15,657 | |
Total available-for-sale debt securities | $ 198,654 | $ 0 |
Financial Instruments - Avail_2
Financial Instruments - Available-for-sale Debt Securities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Debt Securities, Available-for-Sale [Line Items] | |
Fair Value | $ 96,149 |
Gross Unrealized Losses | (227) |
Asset-backed securities | |
Debt Securities, Available-for-Sale [Line Items] | |
Fair Value | 535 |
Gross Unrealized Losses | (1) |
Corporate notes and obligations | |
Debt Securities, Available-for-Sale [Line Items] | |
Fair Value | 50,876 |
Gross Unrealized Losses | (186) |
U.S. treasury securities | |
Debt Securities, Available-for-Sale [Line Items] | |
Fair Value | 44,738 |
Gross Unrealized Losses | $ (40) |
Common Stock and Redeemable C_2
Common Stock and Redeemable Convertible Preferred Stock (Details) | May 14, 2021 shares | Sep. 30, 2022 vote $ / shares shares | Dec. 31, 2021 $ / shares shares |
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 1,450,000,000 | ||
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | |
Common Class A | |||
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 700,000,000 | 700,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | |
Number of votes entitled per share | vote | 1 | ||
Common Class B | |||
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 700,000,000 | 700,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | |
Number of votes entitled per share | vote | 20 | ||
Common Class B | Common Stock | |||
Class of Stock [Line Items] | |||
Conversion of redeemable convertible preferred stock to common stock (in shares) | 24,200,000 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) shares in Millions | 9 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Feb. 28, 2022 | |
Accelerated Share Repurchases [Line Items] | |||
Authorized amount for repurchase | $ 250,000,000 | $ 100,000,000 | |
Stock repurchase program, increased limit | $ 150,000,000 | ||
Common Class A | |||
Accelerated Share Repurchases [Line Items] | |||
Common shares repurchased (in shares) | 10.7 | ||
Common shares repurchased, amount | $ 200,100,000 | ||
Stock repurchase program, remaining authorized amount for future purchase | $ 49,900,000 | ||
Accelerated Share Repurchase Agreement | |||
Accelerated Share Repurchases [Line Items] | |||
Common shares repurchased (in shares) | 5.1 | ||
Common shares repurchased, amount | $ 100,000,000 | ||
Share Repurchased under Plan | |||
Accelerated Share Repurchases [Line Items] | |||
Common shares repurchased (in shares) | 5 | ||
Common shares repurchased, amount | $ 87,800,000 | ||
Open Market Purchases | |||
Accelerated Share Repurchases [Line Items] | |||
Common shares repurchased (in shares) | 0.6 | ||
Common shares repurchased, amount | $ 12,300,000 |
Stock-Based Compensation - Tota
Stock-Based Compensation - Total Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | $ 19,324 | $ 22,033 | $ 57,478 | $ 87,625 |
Cost of revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 210 | 158 | 613 | 911 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 2,890 | 2,999 | 7,947 | 15,415 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 7,655 | 6,935 | 23,215 | 26,333 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | $ 8,569 | $ 11,941 | $ 25,703 | $ 44,966 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Apr. 19, 2021 | Aug. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | May 14, 2021 | Apr. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total stock-based compensation | $ 19,324 | $ 22,033 | $ 57,478 | $ 87,625 | ||||
Total remaining stock-based compensation expense for unvested stock options | $ 3,900 | $ 3,900 | ||||||
Stock based compensation, weighted average period of recognition (in years) | 1 year 1 month 6 days | |||||||
Common Class A | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares reserved for issuance (in shares) | 2,200,000 | 2,200,000 | ||||||
Shares purchased under ESPP (in shares) | 400,000 | |||||||
Aggregate amount of shares purchased | $ 8,100 | |||||||
Equity Incentive Plan 2021 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares initially reserved for issuance (in shares) | 11,800,000 | 11,800,000 | 10,700,000 | |||||
Shares reserved for issuance as a percent of common stock issued and outstanding (as a percent) | 5% | |||||||
Number of shares authorized (in shares) | 18,400,000 | 18,400,000 | ||||||
ESPP | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total stock-based compensation | $ 600 | 400 | $ 1,900 | 400 | ||||
Unrecognized stock based compensation expense | 1,200 | 1,200 | ||||||
Accrued employee stock purchase plan contribution | 1,700 | 1,700 | ||||||
Employee stock purchase plan | ESPP | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
ESPP, concurrent offering and purchase period | 6 months | |||||||
Increase in common stock reserved for issuance (as a percent) | 1% | |||||||
ESPP discount percentage from market price, beginning of purchase period (as a percent) | 15% | |||||||
ESPP purchase price of common stock, percent of market price (as a percent) | 85% | |||||||
Restricted stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total stock-based compensation | 17,100 | 15,800 | 50,200 | 79,200 | ||||
Unrecognized stock based compensation expense | 151,700 | $ 151,700 | ||||||
Service period (in years) | 4 years | |||||||
Restricted stock units granted (in shares) | 3,777,000 | |||||||
Restricted stock units | Chief Executive Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total stock-based compensation | 1,500 | 1,500 | $ 4,400 | 2,100 | ||||
Unrecognized stock based compensation expense | 14,900 | $ 14,900 | ||||||
Stock based compensation, weighted average period of recognition (in years) | 2 years 8 months 12 days | |||||||
Restricted stock units granted (in shares) | 1,400,000 | |||||||
Restricted stock units | Chief Operating Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total stock-based compensation | $ 3,800 | $ 3,800 | ||||||
Performance-based RSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unrecognized stock based compensation expense | $ 2,500 | $ 2,500 | ||||||
Stock based compensation, weighted average period of recognition (in years) | 1 year 6 months |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) - Equity Incentive Plans, 2012, 2014, 2021 - $ / shares | 9 Months Ended |
Sep. 30, 2022 | |
Number of Options Outstanding | |
Beginning balance (in shares) | 9,841,000 |
Granted (in shares) | 0 |
Exercised (in shares) | (2,066,000) |
Forfeited/cancelled (in shares) | (284,000) |
Ending balance (in shares) | 7,491,000 |
Exercisable (in shares) | 7,111,000 |
Weighted Average Exercise Price Per Share | |
Beginning balance, outstanding (in dollars per share) | $ 2.27 |
Granted (in dollars per share) | 0 |
Exercised (in dollars per share) | 1.87 |
Forfeited/Cancelled (in dollars per share) | 5.05 |
Ending balance, outstanding (in dollars per share) | 2.27 |
Exercisable (in dollars per share) | $ 2.25 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of RSU Activity (Details) - Restricted stock units | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Number of Shares | |
Beginning balance (in shares) | shares | 7,532,000 |
Granted (in shares) | shares | 3,777,000 |
Vested (in shares) | shares | (2,057,000) |
Forfeited/Canceled (in shares) | shares | (836,000) |
Ending balance (in shares) | shares | 8,416,000 |
Weighted Average Grant Date Fair Value Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 24.20 |
Granted (in dollars per share) | $ / shares | 19.86 |
Vested (in dollars per share) | $ / shares | 16.66 |
Forfeited/Canceled (in dollars per share) | $ / shares | 21.11 |
Ending balance (in dollars per share) | $ / shares | $ 20.60 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 1,875 | $ (4,467) | $ 5,884 | $ (17,139) |
Effective tax rate | 8.40% | (25.40%) | 12.30% | 49.60% |
Statutory federal income tax rate | 21% | 21% | 21% | 21% |
Deferred tax asset, valuation allowance | $ 12,000 | $ 12,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Nov. 30, 2022 | Jun. 30, 2022 | Feb. 28, 2022 |
Subsequent Event [Line Items] | |||
Stock repurchase program, increased limit | $ 150,000,000 | ||
Authorized amount for repurchase | $ 250,000,000 | $ 100,000,000 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Stock repurchase program, increased limit | $ 200,000,000 | ||
Authorized amount for repurchase | $ 450,000,000 |