Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 30, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-40624 | |
Entity Registrant Name | CS Disco, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-4254444 | |
Entity Address, Address Line One | 3700 N. Capital of Texas Hwy. | |
Entity Address, Address Line Two | Suite 150 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78746 | |
City Area Code | 833 | |
Local Phone Number | 653-4726 | |
Title of 12(b) Security | Common stock, par value $0.005 | |
Trading Symbol | LAW | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 58,550,540 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Central Index Key | 0001625641 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 238,576 | $ 255,477 |
Accounts receivable, net | 24,930 | 20,740 |
Other current assets | 3,662 | 4,634 |
Total current assets | 267,168 | 280,851 |
Property and equipment, net | 5,848 | 5,335 |
Operating lease right-of-use assets | 609 | 864 |
Intangible assets, net | 1,173 | 0 |
Goodwill | 5,898 | 0 |
Other assets | 384 | 351 |
Total assets | 281,080 | 287,401 |
Current liabilities: | ||
Accounts payable | 7,545 | 4,686 |
Accrued expenses | 3,816 | 2,844 |
Accrued salary and benefits | 4,503 | 7,955 |
Deferred revenue | 3,035 | 2,175 |
Operating leases | 627 | 890 |
Finance lease | 70 | 99 |
Total current liabilities | 19,596 | 18,649 |
Other liabilities | 653 | 75 |
Total liabilities | 20,249 | 18,724 |
Commitments and contingencies (Note 8) | ||
Stockholders’ equity | ||
Preferred stock $0.005 par value, 100,000 shares authorized and no shares issued and outstanding as of March 31, 2022 and December 31, 2021 | 0 | 0 |
Common stock $0.005 par value, 1,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 58,427 and 58,010 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 293 | 291 |
Additional paid-in capital | 399,851 | 395,850 |
Accumulated deficit | (139,313) | (127,464) |
Total stockholders’ equity | 260,831 | 268,677 |
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity | $ 281,080 | $ 287,401 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.005 | $ 0.005 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.005 | $ 0.005 |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (in shares) | 58,427,000 | 58,010,000 |
Common stock, outstanding (in shares) | 58,427,000 | 58,010,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 34,468 | $ 21,131 |
Cost of revenue | 8,969 | 5,788 |
Gross profit | 25,499 | 15,343 |
Operating expenses: | ||
Research and development | 12,318 | 6,262 |
Sales and marketing | 16,419 | 7,876 |
General and administrative | 8,519 | 4,053 |
Total operating expenses | 37,256 | 18,191 |
Loss from operations | (11,757) | (2,848) |
Other income (expense) | ||
Interest and other income | 30 | 13 |
Interest and other expense | (93) | (57) |
Loss from operations before income taxes | (11,820) | (2,892) |
Income tax provision | (29) | (36) |
Net loss | (11,849) | (2,928) |
Less accretion of redeemable convertible preferred stock | 0 | (26) |
Net loss attributable to common stockholders | $ (11,849) | $ (2,954) |
Net loss attributable to common shareholders, basic (in USD per share) | $ (0.20) | $ (0.22) |
Net loss attributable to common shareholders, diluted (in USD per share) | $ (0.20) | $ (0.22) |
Weighted-average shares used in computing net loss per share attributable to common shareholders, basic (in shares) | 57,972 | 13,388 |
Weighted-average shares used in computing net loss per share attributable to common shareholders, diluted (in shares) | 57,972 | 13,388 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated deficit |
Redeemable convertible preferred stock at beginning of period (in shares) at Dec. 31, 2020 | 35,793 | |||
Redeemable convertible preferred stock balance at beginning of period at Dec. 31, 2020 | $ 160,800 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Accretion of preferred stock to redemption value | $ 26 | |||
Redeemable convertible preferred stock at end of period (in shares) at Mar. 31, 2021 | 35,793 | |||
Redeemable convertible preferred stock balance at end of period at Mar. 31, 2021 | $ 160,826 | |||
Stockholders' equity at beginning of period (in shares) at Dec. 31, 2020 | 13,533 | |||
Stockholder's equity at beginning of period at Dec. 31, 2020 | (94,923) | $ 68 | $ 8,129 | $ (103,120) |
Stockholders' Equity | ||||
Accretion to redemption value | (26) | (26) | ||
Exercise of stock options (in shares) | 56 | |||
Exercise of stock options | 222 | 222 | ||
Repurchase of common stock related to net share settlement (in shares) | (4) | |||
Repurchase of common stock related to net share settlement | (50) | (50) | ||
Stock compensation expense | 490 | 490 | ||
Net loss | (2,928) | (2,928) | ||
Stockholders' equity at end of period (in shares) at Mar. 31, 2021 | 13,585 | |||
Stockholder's equity at end of period at Mar. 31, 2021 | (97,215) | $ 68 | 8,765 | (106,048) |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Accretion of preferred stock to redemption value | $ 0 | |||
Stockholders' equity at beginning of period (in shares) at Dec. 31, 2021 | 58,010 | 58,010 | ||
Stockholder's equity at beginning of period at Dec. 31, 2021 | $ 268,677 | $ 291 | 395,850 | (127,464) |
Stockholders' Equity | ||||
Exercise of stock options (in shares) | 409 | 409 | ||
Exercise of stock options | $ 971 | $ 2 | 969 | |
Repurchase of common stock related to net share settlement (in shares) | (6) | |||
Repurchase of common stock related to net share settlement | (233) | (233) | ||
Vesting of restricted stock units (in shares) | 14 | |||
Stock compensation expense | 3,265 | 3,265 | ||
Net loss | $ (11,849) | (11,849) | ||
Stockholders' equity at end of period (in shares) at Mar. 31, 2022 | 58,427 | 58,427 | ||
Stockholder's equity at end of period at Mar. 31, 2022 | $ 260,831 | $ 293 | $ 399,851 | $ (139,313) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flow from operating activities: | ||
Net loss | $ (11,849) | $ (2,928) |
Adjustments to reconcile net loss to cash used in operations: | ||
Depreciation and amortization | 455 | 424 |
Stock-based compensation | 3,206 | 488 |
Charge to allowance for credit losses | 180 | 130 |
Non-cash operating lease costs | 255 | 242 |
Non-cash interest | 0 | 21 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,370) | (2,171) |
Other current assets | 965 | (75) |
Other long-term assets | (39) | 0 |
Accounts payable | 2,773 | 679 |
Accrued expenses and other | (3,253) | (2,167) |
Deferred revenue | 556 | 1,110 |
Operating lease liabilities | (263) | (249) |
Net cash used in operating activities | (11,384) | (4,496) |
Cash flow from investing activities: | ||
Purchases of property, equipment and capitalized internal-use software development costs | (631) | (586) |
Cash paid for acquisitions | (5,310) | 0 |
Net cash used in investing activities | (5,941) | (586) |
Cash flow from financing activities: | ||
Proceeds from public offering, net of underwriting discounts and commissions and other offering costs | (284) | 0 |
Proceeds from exercise of stock options | 970 | 222 |
Repurchase of common stock related to net share settlement | (233) | (50) |
Principal payments on finance lease obligations | (29) | (27) |
Net cash provided by financing activities | 424 | 145 |
Net increase (decrease) in cash: | (16,901) | (4,937) |
Cash & cash equivalents at beginning of period | 255,477 | 58,569 |
Cash & cash equivalents at end of period | 238,576 | 53,632 |
Supplemental disclosure: | ||
Cash paid for interest | 0 | 12 |
Cash paid for taxes | 102 | 16 |
Non-cash investing and financing activities: | ||
Accretion of preferred stock to redemption value | 0 | 26 |
Property and equipment included in accounts payable and accrued liabilities | 244 | 0 |
Acquisition holdback | 800 | 0 |
Contingent consideration related to acquisition | $ 593 | $ 0 |
Organization and Nature of Oper
Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations Overview CS Disco, Inc. (the “Company” or “DISCO”), has built a cloud-native, AI-powered software platform that enterprises, law firms, legal services providers, and governments use for ediscovery, legal document review, and case management in a wide variety of legal matters, ranging from litigation to investigations to compliance to diligence. The Company incorporated as a Delaware corporation on December 2, 2013. The Company’s headquarters are located in Austin, Texas. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. The Company has elected to use the extended transition period under the JOBS Act until the earlier of the date it (1) is no longer an emerging growth company or (2) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles (“GAAP”) for interim financial information. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2021, and related disclosures, have been derived from the audited consolidated financial statements at that date but do not include all of the information required by GAAP for complete consolidated financial statements. The unaudited condensed consolidated financial statements include the accounts of the Company. All significant intercompany balances and transactions have been eliminated. There are no differences between the net loss and comprehensive loss. Unaudited Interim Condensed Consolidated Financial Statements The accompanying interim condensed consolidated balance sheet as of March 31, 2022, the interim condensed consolidated statements of operations and comprehensive loss, of cash flows, and of changes in redeemable convertible preferred stock and stockholders’ equity (deficit) for the three months ended March 31, 2022 and 2021, and the related notes to such interim condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements are presented in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2022 and its results of operations and cash flows for the three months ended March 31, 2022 and 2021. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year or any other future interim or annual period. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on February 25, 2022, as amended on April 29, 2022. Risks and Uncertainties The ongoing global COVID-19 pandemic has impacted many operational aspects of the Company’s business and may continue to do so in the future. Additionally, Russia’s military operations in Ukraine have not had a material impact on the Company’s operations, but could do so in the future. The Company assessed the impact these events had on its results of operations, including, but not limited to an assessment of its allowance for credit losses, the carrying value of other long-lived assets, and the impact to revenue recognition and cost of revenue. While these events have not had a material adverse impact on the Company’s financial operations to date, the future impacts are largely unknown. The Company will continue to actively monitor the impact that these events on the results of the Company’s business operations, and may make decisions required by federal, state or local authorities, or that are determined to be in the best interests of the Company’s employees, customers, partners, and suppliers. As a result, the Company’s estimates and judgments may change materially as new events occur or additional information becomes available to them. Use of Estimates The preparation of these condensed consolidated financial statements in conformity with GAAP requires the Company to make certain estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses during the reporting period. There is complexity and judgment required in the Company’s process in determining the nature and timing of the satisfaction of performance obligations which affect the amounts of revenue, unbilled receivables, and deferred revenue. Estimates are also used for, but not limited to, current expected credit losses, capitalization and useful life of the Company’s capitalized internal-use software development costs, useful lives of assets, fair value of acquired intangible aseets, carrying value of goodwill, fair value of contingent consideration, income taxes and deferred tax asset valuation and valuation of the Company’s stock-based awards. Numerous internal and external factors can affect estimates. Actual results could differ from those estimates and such differences could be material to the Company’s condensed consolidated financial position and results of operations. Net Loss Per Share Attributable to Common Stockholders Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company had six series of redeemable convertible preferred stock. Upon closing of the Company’s IPO, the outstanding redeemable convertible preferred stock was automatically converted into 35,793,483 shares of common stock. All series of the Company’s redeemable convertible preferred stock were considered to be participating securities because all holders were entitled to receive a non-cumulative dividend on a pari passu basis in the event that a dividend is paid on the common stock. The holders of the redeemable convertible preferred stock did not have a contractual obligation to share in the Company’s losses. As such, the Company’s net losses were not allocated to these participating securities. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options, restricted stock awards, restricted stock units, performance-based restricted stock units, stock warrants and redeemable convertible preferred stock. As the Company has reported losses for all periods presented, all potentially dilutive securities are anti-dilutive, and accordingly, basic net loss per share equaled diluted net loss per share. Cash and Cash Equivalents The Company considers all highly liquid investments acquired with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents, which include the Company’s money market account, are measured at fair value on a recurring basis. Accounts Receivable Accounts receivable are recorded and carried at the original invoiced amount less an allowance for credit losses. The Company determines its trade accounts receivable allowances in line with (Topic 326): Measurement of Credit Losses on Financial Instruments (“Topic 326”), based upon the assessment of various factors, such as: historical experience, credit quality of its customers, geographic related risks, economic conditions, and other factors that may affect a customer’s ability to pay. Increases and decreases in the allowance for credit losses are included as a component of general and administrative expense in the condensed consolidated statements of operations and comprehensive loss. The Company does not have any off-balance sheet credit exposure related to its customers. Due to the short-term nature of the Company’s receivables, the estimate of the amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers. The Company has provisioned $0.2 million for expected losses for the three months ended March 31, 2022 and $0.3 million has been written off and charged against the allowance for the three months ended March 31, 2022. Recoveries made by the Company were nominal for the three months ended March 31, 2022. The allowance for credit losses related to accounts receivable was $1.1 million and $1.2 million as of March 31, 2022 and December 31, 2021, respectively. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and trade accounts receivable. The Company maintains its cash and cash equivalent balances in highly rated financial institutions, which at times may exceed federally insured limits or be held in foreign jurisdictions. The Company has not experienced any loss relating to cash and cash equivalents in these accounts. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. Fair Value of Financial Instruments The Company groups its assets and liabilities measured at fair value in a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets, with valuations obtained from readily available pricing sources for market transactions involving identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable, 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; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. The level of the fair value hierarchy in which the fair value measurement falls is determined by the lowest level input that is significant to the fair value measurement. The Company’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses are considered to approximate their respective fair values due to the short-term nature of such financial instruments. Cash equivalents, primarily consisting of investments in money market funds, are measured at fair value on a recurring basis, and are categorized as Level 1 based on quoted prices in active markets. The carrying value approximates the fair value for these assets and liabilities at March 31, 2022 and December 31, 2021. The Company recognizes transfers between levels at the end of the reporting period as if the transfers occurred on the last day of the reporting period. There were no transfers during the three months ended March 31, 2022 and the year ended December 31, 2021. Property and Equipment, Net Property and equipment are recorded at cost, less accumulated depreciation. Maintenance, repairs and minor replacements are charged to expense as incurred. Significant renewals and betterments are capitalized. Depreciation on property and equipment, with the exception of leasehold improvements, is recorded using the straight-line method over the estimated useful lives of the assets. Depreciation on leasehold improvements is recorded using the shorter of the lease term or useful life. The estimated useful life of each asset category is as follows: Furniture and fixtures 5 years Leasehold improvements Shorter of lease term or 5 years Computer equipment 2 years The Company periodically reviews the estimated useful lives of property and equipment and any changes to the estimated useful lives are recorded prospectively from the date of the change. When property is retired or disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gains or losses are reflected in the condensed consolidated statements of operations and comprehensive loss in the period of disposal. Capitalized Internal-Use Software Development Costs Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements, with no plans to market such software at the time of development, are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post implementation operational stage are expensed as incurred. The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed and (ii) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Costs incurred for maintenance, minor upgrades and enhancements are expensed. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred. Capitalized costs are included in property and equipment on the condensed consolidated balance sheets. These costs are amortized over the estimated useful life of the software, generally four years, on a straight-line basis. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. The amortization of costs related to the platform applications is included in cost of revenue. Purchase Price Allocation, Intangible Assets, and Goodwill The purchase price allocation for business combinations and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values. The Company determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If this threshold is met, the single asset or group of assets, as applicable, is not a business. If it is not met, the Company determines whether the single asset or group of assets, as applicable, meets the definition of a business. In connection with the Company’s acquisitions discussed in Note 9, “Acquisitions, Intangible Assets, and Goodwill,” the Company recorded certain intangible assets, including developed technology and customer relationships. Amounts allocated to the acquired intangible assets are being amortized on a straight-line basis over the estimated useful lives. The Company periodically reviews the estimated useful lives and fair values of its identifiable intangible assets, taking into consideration any events or circumstances which might result in a diminished fair value or revised useful life. The excess purchase price over the fair value of assets acquired is recorded as goodwill. The Company tests goodwill for impairment annually during the fourth quarter, or whenever events or changes in circumstances indicate an impairment may have occurred. Goodwill impairment is recognized when the quantitative assessment results in the carrying value of the reporting unit exceeding its fair value, in which case an impairment charge is recorded to goodwill to the extent the carrying value exceeds the fair value, limited to the amount of goodwill. The Company did not recognize any impairment of goodwill for all periods presented. Debt Issuance Costs The Company records underwriting, legal, and other direct costs incurred related to the issuance of revolving line of credit within other current assets and amortizes these costs to interest expense over the term of the related debt on a straight-line basis, which approximates the effective interest rate method. Amortization of debt issuance costs was nominal for the three months ended March 31, 2021. Upon the extinguishment of the related debt in November 2021, all unamortized capitalized deferred financing costs were recorded to interest expense. There was no amortization expense related to debt issuance costs for the three months ended March 31, 2022. Leases The Company determines if an arrangement is or contains a lease at contract inception. The Company presents the operating leases in long-term assets and current and long-term liabilities. Finance lease assets are included in property and equipment, net, and finance lease liabilities are presented in current and long-term liabilities in the accompanying condensed consolidated balance sheets. Right of use assets represent the Company’s right to use an underlying asset over the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company includes any anticipated lease incentives in the determination of lease liability. The Company uses its estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company gives consideration to its recent debt issuances as well as publicly available data for instruments with similar characteristics when determining its incremental borrowing rates. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever an event or change in circumstances indicates that the carrying amount of an asset or group of assets may not be recoverable. The impairment review includes comparison of future cash flows expected to be generated by the asset or group of assets with the associated assets’ carrying value. If the carrying value of the asset or group of assets exceeds its expected future cash flows (undiscounted and without interest charges), an impairment loss is recognized to the extent that the carrying amount of the asset exceeds its fair value. The Company did not identify any impairment indicators and recorded no impairment charges in the three months ended March 31, 2022 or 2021. Segment Information The Company’s Chief Executive Officer is the chief operating decision maker, who reviews the Company’s financial information presented on a consolidated basis for purposes of allocating resources and evaluating the Company’s financial performance. Accordingly, the Company has determined that it operates in a single reporting segment. Revenue Recognition Refer to Note 3, “Revenue Recognition” for the Company’s revenue recognition policy. Advertising The Company expenses advertising costs as incurred. Advertising expenses were $0.6 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively. These costs are included in sales and marketing expenses in the accompanying condensed consolidated statements of operations and comprehensive loss. Cost of Revenue Cost of revenue consists primarily of third-party cloud infrastructure expenses incurred in connection with the Company’s customers’ use of its solutions. Cost of revenue also includes outsourced staffing costs, amortization of internal-use software and personnel costs from employees involved in the delivery of the Company’s solutions. Personnel costs include salaries, benefits, bonuses, stock-based compensation, and allocated overhead costs. Research and Development Research and development expenses consist primarily of personnel-related costs for the Company’s development team, including salaries, benefits, bonuses, stock-based compensation expenses and allocated overhead costs. Research and development expenses also include contractor or professional services fees, third-party cloud infrastructure expenses incurred in developing the Company’s solution and software services dedicated for use by the Company’s research and development organization. Sales and Marketing Sales and marketing expenses consist primarily of personnel-related costs directly associated with the Company’s sales and marketing staff, including salaries, benefits, bonuses, commissions, stock-based compensation and allocated overhead costs. Sales and marketing expenses also include advertising costs and other expenses associated with the Company’s marketing and business development programs. In addition, sales and marketing expenses are comprised of travel-related expenses, software services dedicated for use by the Company’s sales and marketing organizations and outside services contracted for sales and marketing purposes. General and Administrative General and administrative expenses consist of personnel-related costs associated with the Company’s finance, legal, human resources and administrative personnel, including salaries, benefits, bonuses, stock-based compensation and allocated overhead costs. General and administrative expenses also include external legal, accounting, professional services fees, software services dedicated for use by the Company’s general and administrative functions, insurance, allowance for credit losses and other corporate expenses. Stock-Based Compensation The Company measures and recognizes compensation expense for all stock-based awards (collectively referred to as stock-based compensation expense), including stock options, restricted stock awards, restricted stock units and performance-based restricted stock units granted to employees, directors and non-employees, based on the estimated fair value of the awards on the date of grant in accordance with ASC Topic 718 Compensation - Stock Compensation (“Topic 718”). The fair value of each stock option granted is estimated using the Black-Scholes option-pricing model. The Black-Scholes pricing model requires the Company to make assumptions and judgments about the inputs used in the calculation, including the expected term, the volatility of the Company’s common stock, risk-free interest rate, and expected dividend yield. The assumptions used to determine the fair value of the option awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. Stock-based compensation is recognized following the straight-line attribution method over the requisite service period for stock options, restricted stock awards and restricted stock units. Stock-based compensation is recognized under the accelerated attribution model over the requisite service period for performance-based restricted stock units. The fair value of restricted stock awards, restricted stock units and performance-based restricted stock units is determined using the fair value of the Company’s common stock on the date of grant. Forfeitures are accounted for in the period in which they occur. Sales Taxes The Company recognizes sales and other taxes collected from customers and subsequently remits to government authorities. The Company relieves the sales tax payable balances from the condensed consolidated balance sheets as cash is collected from the customer and the taxes are remitted to the appropriate tax authority. Contingent Consideration On February 22, 2022, the Company acquired legal workflow solutions from Congruity360, LLC (“Congruity”). As part of the acquisition, the Company entered into a referral agreement in which the Company could be obligated to pay Congruity an additional $2.0 million in the aggregate over the next 2.86 years. As of March 31, 2022, the estimated fair value of the contingent consideration utilizing a probability weighted scenario analysis model under the scenario based method was $0.6 million. The short-term and long-term portions of this amount are recorded in accrued expenses and other liabilities, respectively, on the condensed consolidated balance sheet. The fair value of the contingent consideration was determined using Level 3 inputs due to estimates for the number and size of referrals, the likelihood of shortfall and any credits that will offset the liability. These estimated inputs reflect management’s best estimate of future results, but these estimates are not observable inputs by a market participant and contain a high degree of uncertainty. The Company could experience significant fluctuations in the fair value of contingent consideration based on actual results. The fair value of this contingent consideration will continue to be revalued on a quarterly basis. Changes in the fair value of the contingent consideration will be recorded as operating expense in the condensed consolidated statements of operations and comprehensive loss. Income Taxes The Company accounts for income taxes in accordance with the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates that are expected to apply to taxable income in the periods in which the deferred tax asset or liability is expected to be realized or settled. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. All deferred tax assets and liabilities are classified as non-current within the accompanying condensed consolidated balance sheets. The Company recognizes the tax benefit from an uncertain tax position only if it meets the “more likely than not” threshold that the position will be sustained upon examination by the taxing authority, based on the technical merits of the position. The tax benefits recognized in the condensed consolidated financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company includes interest and penalties related to its uncertain tax positions, if any, as part of income tax expense within the accompanying condensed consolidated statements of operations and comprehensive loss. The Company’s policy is to recognize interest and penalties related to uncertain tax positions outside of income tax expense within general and administrative expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties as of March 31, 2022 and December 31, 2021. Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, “ Accounting for Contract Assets and Contract Liabilities from Contracts with Customers |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue is recognized, in an amount that reflects the consideration the Company expects to be entitled to over the term of the agreement, when control of the Company’s solutions are transferred to customers. The Company recognizes revenue through the following five-step framework in accordance with ASC Topic 606, Revenue from Contracts with Customers : (1) Identification of the contract, or contracts, with the customer; (2) Identification of performance obligations in the contract; (3) Determination of the transaction price; (4) Allocation of the transaction price to the performance obligations in the contract; (5) Recognition of revenue when, or as, the Company satisfies a performance obligation. A performance obligation is a promise in a contract to transfer a distinct solution to the customer. The Company identifies performance obligations in its contracts with customers, which primarily include usage-based and subscription solutions. Usage-based solutions include fees based on usage of the Company’s platform or professional services, incurred on a time and materials basis, while subscription solutions represent the purchase of a committed data volume on the Company’s platform over a period of time. The transaction price is determined based on the amount which the Company expects to be entitled to in exchange for providing the promised services to the customer. For contracts that include multiple performance obligations, the transaction price in the contract is allocated to each distinct performance obligation on a relative standalone selling price basis. Revenue is recognized over time as performance obligations are satisfied. Variable consideration is evaluated on a contract-by-contract basis, and a constraint is applied using the facts and circumstances of the contract when applicable. On a limited basis, the Company enters into contracts whereby the consideration payable is contingent upon the conclusion of the legal matter. The Company does not recognize the revenue related to these contracts until the legal matter is resolved. Such amounts recognized have been immaterial to date. The Company’s software contracts do not allow the customer to take possession of the software supporting the cloud-based solution. Customers are not entitled to any refunds. The Company generally invoices its customers monthly, quarterly or annually in advance and recognizes revenue ratably over the life of the contract. The Company’s arrangements do not contain general rights of return. However, credits may be issued on a case-by-case basis. Amounts that have been invoiced are recorded in accounts receivable and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met. Nature of Solutions The Company’s revenue-generating activities directly relate to the sale and support of its legal solution within a single operating segment. The Company disaggregates revenue from contracts with customers based on how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The Company has two primary types of contractual arrangements: usage-based and subscription solutions. Usage-based revenue is generated from solutions that are typically billed on a monthly basis and can be canceled with one month’s notice or are incurred on a time and materials basis. Subscription revenue is derived from contracts where customers are contractually committed to a fixed data volume over a period of time. Usage amounts above the fixed data volume are considered usage-based revenue. Subscription arrangements are billed in advance, typically on a monthly, quarterly or annual basis. In the three months ended March 31, 2022 and 2021, usage-based revenue represented 90% and 87% of total revenue, respectively. In the three months ended March 31, 2022 and 2021, subscription revenue fees represented 10% and 13% of the total revenue, respectively. No significant judgments are required in determining whether services are considered distinct performance obligations and should be accounted for separately versus together, or to determine the stand-alone selling price (“SSP”). Deferred Revenue Deferred revenue primarily consists of amounts that have been billed to or received from customers in advance of performing the associated services. Of the $2.2 million and $1.6 million of deferred revenue balance as of December 31, 2021 and 2020 respectively, the Company recognized $1.3 million and $1.0 million as revenue during the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022 and December 31, 2021 the Company recorded $3.0 million and $2.2 million of current deferred revenue, respectively. The Company recorded $0.1 million of non-current deferred revenue as of March 31, 2022 and no non-current deferred revenue as of December 31, 2021. Contract Assets Contract assets represent revenue recognized for contracts that have not yet been invoiced to customers, but are billed in arrears and for which the Company has an unconditional right to payment. Total contract assets were $3.4 million and $3.2 million as of March 31, 2022 and December 31, 2021, respectively, and were included within accounts receivable on the condensed consolidated balance sheets. Remaining Performance Obligations Remaining performance obligations (“RPO”) represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods. RPO exclude performance obligations from certain time and materials contracts that are billed in arrears. RPO are not necessarily indicative of future revenue growth because they do not account for consumption in excess of contracted capacity. As of March 31, 2022, the Company expects to recognize approximately $22.1 million of revenue from remaining performance obligations. The Company expects to recognize revenue of approximately $11.9 million as of March 31, 2022 from remaining performance obligations over the next 12 months, with the remaining balance recognized thereafter. Incremental Contract Costs Incremental costs to obtain or fulfill a contract are recognized as an asset if the expected benefit is expected to be longer than one year. These assets are amortized over the expected period of benefit. For the three months ended March 31, 2022 and 2021, the Company identified no material incremental costs to obtain or fulfill a contract, primarily based on the nature and terms of the Company’s contracts, as well as the expected period of benefit. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consist of the following (in thousands): March 31, December 31, Computer equipment $ 3,494 $ 3,079 Capitalized internal-use software 5,658 5,168 Leasehold improvements 112 111 Furniture 649 649 Total property and equipment 9,913 9,007 Less: accumulated depreciation and amortization (4,065) (3,672) Property and equipment, net $ 5,848 $ 5,335 As discussed in Note 2, “Summary of Significant Accounting Policies - Capitalized Internal-Use Software Development Costs”, the Company capitalizes costs related to the development of computer software for internal use and is included in capitalized software development costs within property and equipment, net. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases As of March 31, 2022, the Company had one leased property used as office facilities with a remaining lease term of 0.6 years, and no leased properties classified as a “short-term” lease. In accordance with Topic 842, leases with a term of 12 months or less are not recorded on the Company’s condensed consolidated balance sheet. For each lease, the Company recognizes a right-of-use-asset and lease liability in accordance with Topic 842. The liability and asset are then amortized as payments are made. The Company has future minimum payments required under the operating lease for office facilities of $0.6 million for the remainder of the lease term. |
Operating Segment and Geographi
Operating Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Operating Segment and Geographic Information | Operating Segment and Geographic Information The Company’s Chief Executive Officer is the chief operating decision maker, who reviews the Company’s financial information presented on a consolidated basis for purposes of allocating resources and evaluating the Company’s financial performance. Accordingly, the Company has determined that it operates in a single reporting segment. The Company determines the location of revenue using the billing address of each customer. The following table sets forth revenue by geographic area (in thousands): Three Months Ended 2022 2021 United States $ 32,767 $ 20,275 All other countries 1,701 856 Total revenue $ 34,468 $ 21,131 Long-lived assets outside of the United States are not significant. |
Debt and Related Warrants
Debt and Related Warrants | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt and Related Warrants | Debt and Related Warrants In July 2015, the Company entered into a revolving debt facility (“Loan and Security Agreement”). The Loan and Security Agreement was subsequently amended and restated, the First Amended and Restated Loan and Security Agreement, in November 2018 to increase the available borrowings to $18.0 million and extend the maturity date to April 2021. In December 2020, the Company entered into the Second Amended and Restated Loan and Security Agreement, which provided a $40.0 million revolving credit facility with a maturity date of November 30, 2023. The Company’s obligations under the agreement contained certain customary covenants, including, but not limited to, those relating to additional indebtedness, liens, asset divestitures and affiliate transactions. The agreement also contained a liquidity covenant equal to the greater of (i) $5.0 million or (ii) total six-month adjusted EBITDA burn when the sum of the outstanding principal amounts are equal or in excess of $18.0 million. The revolving credit facility bore interest on outstanding borrowings as the sum of the Daily Adjusting LIBOR Rate for such day plus 2.50% plus an applicable margin of 0.25% per annum. Additionally, the revolving debt facility included an unused facility fee equal to 0.25% per annum of the difference between the total revolving credit facility and the average outstanding principal balance of the obligations under the revolving credit facility during each quarter. Substantially all the Company’s assets were pledged as collateral for these loans. The Company was required to meet certain nonfinancial covenants. In connection with its amended and restated loan and security agreements, at various times, the Company granted warrants to purchase 49,869 shares of the Company’s common stock at exercise prices ranging from $0.525 per share to $10.80 per share. The warrants are exercisable for 10 years. At the time of issuance, the Company determined the estimated fair value of the warrants. As the warrants represent a freestanding equity instrument, the Company recorded the fair value of the warrants in additional paid in capital. In October 2021, all outstanding warrants were exercised for a total of $0.1 million. In November 2021, the Company extinguished the Loan and Security Agreement. The Company did not incur any early termination fees in connection with the termination of the agreement. The Company has no outstanding debt as of March 31, 2022. The Company incurred nominal aggregate debt issuance costs in connection with its loan and security agreements. These costs were being amortized to non-cash interest expense over the terms of the related indebtedness using the straight-line method which approximates the effective interest method. In connection with the extinguishment of the Loan and Security Agreement in November 2021, the Company recognized the remaining debt issuance costs as interest expense. There was no amortization expense related to debt issuance costs for the three months ended March 31, 2022. |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases and Other Commitments The Company leases office facilities under a non-cancellable operating lease with a remaining term of 0.6 years as well as furniture under a non-cancellable finance lease. See Note 5, “Leases,” to these condensed consolidated financial statements for additional detail on the Company’s operating and finance lease commitments. During the three months ended March 31, 2022 there were no material changes outside the ordinary course of business to the Company’s contractual obligations and commitments. Litigation |
Acquisitions, Intangible Assets
Acquisitions, Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions, Intangible Assets and Goodwill | Acquisitions, Intangible Assets and Goodwill Congruity Acquisition On February 22, 2022, the Company entered into an Asset Purchase Agreement whereby the Company acquired legal workflow solutions from Congruity in exchange for approximately $6.1 million of cash, including a holdback of $0.8 million to be paid in fiscal year 2023, and up to $2.0 million of contingent consideration. As of March 31, 2022, the estimated fair value of the contingent consideration was $0.6 million. The legal workflow solutions will expand the Company’s offerings to provide a modern, digital solution for legal hold obligations and legal request compliance. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations . The purchase price allocation is preliminary. The Company continues to collect information with regard to its estimates and assumptions, including potential liabilities and contingencies. The Company will record adjustments to the fair value of the assets acquired, liabilities assumed and goodwill within the 12 month measurement period, if necessary. The resulting goodwill will be deductible for income tax purposes. Pro forma results of operations for this acquisition have not been presented because the acquisition was not material to the condensed consolidated results of operations and comprehensive loss. Transaction costs amounted to approximately $0.1 million and were expensed as incurred. The aggregate purchase consideration and estimated fair values of the assets acquired and liabilities assumed at the date of acquisition were as follows (in thousands): Fair Value Preliminary fair value of net assets acquired: Net tangible assets (liabilities) $ (395) Developed technology 900 Customer relationships 300 Goodwill 5,898 Total fair value of net assets acquired $ 6,703 Intangible Assets Intangible assets, net consisted of the following (in thousands): March 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortization Period Developed technology $ 900 $ (17) $ 883 5 years Customer relationships 300 (10) 290 3 years Total $ 1,200 $ (27) $ 1,173 Intangible amortization expense was nominal for the three months ended March 31, 2022. Amortization expense related to developed technology and customer relationships is included in cost of revenue and operating expenses, respectively, on the condensed consolidated statements of operations and comprehensive loss. As of March 31, 2022, future amortization expense by year is expected to be as follows (in thousands): Amount Remainder of 2022 $ 211 2023 280 2024 280 2025 195 2026 180 Thereafter 27 Total $ 1,173 Goodwill The changes in the carrying amount of goodwill were as follows (in thousands): Amount Balance as of December 31, 2021 $ — 2022 acquisition 5,898 Total $ 5,898 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Equity Incentive Plans On December 17, 2013, the Company adopted the Long-Term Incentive Plan (“2013 Plan”). The 2013 Plan was terminated in July 2021 in connection with the adoption of the 2021 Equity Incentive Plan (“2021 Plan”), which became effective on July 20, 2021, and no further awards will be granted under the 2013 Plan. The 2021 Plan provides for the grant of incentive stock options (“ISOs”), within the meaning of Section 422 of the Code to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards (“RSAs”), performance-based restricted stock units (“PSUs”), restricted stock units (“RSUs”) and other forms of awards to the Company’s employees, directors and consultants, including employees and consultants of the Company’s affiliates. As of March 31, 2022, 6.8 million shares remained available for future issuance under the 2021 Plan. The Company recognized total stock-based compensation cost related to equity incentive awards of $3.2 million and $0.5 million for the three months ended March 31, 2022 and 2021, respectively. Stock Options Options under the 2021 Plan are granted at the estimated fair value of the shares on the date of grant. The maximum term of options granted under the plan is 10 years from the date of grant. Options normally vest according to a four-year vesting schedule, with 25% of the shares vesting on the one-year anniversary and equal monthly vesting installments thereafter. The following table summarizes the stock option activity under the 2013 Plan and 2021 Plan (in thousands except for per share amounts and years): Number of Weighted- Weighted- Aggregate Options outstanding as of December 31, 2021 2,560 $ 7.29 5.46 $ 72,875 Granted — — Exercised (409) 2.37 Forfeited and cancelled (266) 17.21 Options outstanding as of March 31, 2022 1,885 $ 6.95 6.11 $ 50,933 Options vested and exercisable at March 31, 2022 1,388 $ 5.08 5.39 $ 40,119 Aggregate intrinsic value represents the difference between the Company’s estimated fair value of its common stock and the exercise price of outstanding options. The aggregate intrinsic value of stock options exercised was $12.5 million and $0.6 million during the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, unrecognized stock-based compensation cost related to outstanding unvested stock options that are expected to vest was $2.7 million, which is expected to be recognized over a weighted-average period of 2.11 years. Restricted Stock Awards The fair value of RSAs is determined using the fair value of the Company’s common stock on the date of grant. No RSAs were granted for the three months ended March 31, 2022 and 2021, respectively. During the three months ended March 31, 2022 and 2021, 25,000 and 12,500 RSAs vested and were released from the Company’s right to repurchase, respectively, and no RSAs were cancelled. As of March 31, 2022, the Company had $3.4 million of unrecognized stock-based compensation related to RSAs with a weighted average remaining requisite service period of 3.15 years. Restricted Stock Units The fair value of RSUs is determined using the closing market price of the Company’s common stock on the date of grant. The RSUs vest over the requisite service period, generally four years, subject to the continuous service of the individual. In March 2022, the Company granted 0.6 million PSUs. The PSUs vest on the satisfaction of both service-based and performance-based conditions. The PSUs have a one-year performance period based on a revenue goal for fiscal year 2022 that determines the total vestable shares. After the performance period, one-third of the vestable shares will vest, and the remaining vestable shares will vest over a two-year service period. As of March 31, 2022, none of the PSUs have vested or were released. The following table summarizes the RSU activity under the 2021 Plan, including the PSUs (in thousands except for per share amounts): Number of Weighted-average fair value Aggregate Unvested and outstanding as of December 31, 2021 469 $ 47.12 $ 16,781 Granted 1,575 31.27 — Vested (14) 44.63 — Forfeited and cancelled (88) 40.66 — Unvested and outstanding as of March 31, 2022 1,942 $ 34.58 $ 63,767 At March 31, 2022, there was an estimated $55.7 million of total unrecognized stock-based compensation costs related to RSUs and PSUs. These costs will be recognized over a weighted-average period of 3.37 years. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company’s income tax expense was nominal for the three months ended March 31, 2022 and 2021, respectively. Income tax expense consists primarily of income taxes in the United Kingdom. Due to the Company’s history of losses in the United States, a full valuation allowance on substantially all of the Company’s deferred tax assets, including net operating loss carryforwards, deferred expenses, stock compensation and other book versus tax differences was maintained. The Company’s effective tax rate was (0.25)% and (1.24)% of the loss before income taxes for the three months ended March 31, 2022 and 2021, respectively. The Company’s effective tax rate is mainly affected by tax rates and relative income earned in the United Kingdom, state taxes, and changes in the valuation allowance. |
Defined Contribution Plan
Defined Contribution Plan | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | Defined Contribution PlanThe Company sponsors a defined contribution retirement plan qualifying under Section 401(k) of the Internal Revenue Code of 1986. This plan covers all employees within the United States who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company made $0.7 million in employer contributions to the plan during the three months ended March 31, 2022. The Company did not make any employer contributions to the plan during the three months ended March 31, 2021.The Company also engages in a required pension plan in the United Kingdom. As of March 31, 2022 and December 31, 2021, the liability under this plan was immaterial. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders The following tables present calculations for basic and diluted net loss per share (in thousands, except per share amounts): Three Months Ended 2022 2021 Net loss $ (11,849) $ (2,928) Less accretion of redeemable convertible preferred stock — (26) Loss applicable to common stockholders basic and diluted (11,849) (2,954) Weighted-average shares used in computing net loss per share attributable to common shareholders, basic and diluted 57,972 13,388 Net loss per share attributable to ordinary shareholders, basic and diluted $ (0.20) $ (0.22) The following outstanding shares of common stock equivalents as of the periods presented were excluded from the computation of diluted net loss per share for the periods presented because the impact of including them would have been anti-dilutive (in thousands): As of March 31, 2022 2021 Redeemable convertible preferred stock, as converted — 35,793 Stock options 1,898 3,180 Unvested restricted stock awards 238 100 Unvested restricted stock units 1,942 — Common stock warrants — 50 Total 4,078 39,123 |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party TransactionsIn October 2018, the Company loaned an officer of the Company $0.2 million, bearing interest at 2.83% per annum for the purpose of exercising stock options. The outstanding amount due under the note was repaid in June 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles (“GAAP”) for interim financial information. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2021, and related disclosures, have been derived from the audited consolidated financial statements at that date but do not include all of the information required by GAAP for complete consolidated financial statements. |
Consolidation | The unaudited condensed consolidated financial statements include the accounts of the Company. All significant intercompany balances and transactions have been eliminated. There are no differences between the net loss and comprehensive loss. |
Use of Estimates | Use of EstimatesThe preparation of these condensed consolidated financial statements in conformity with GAAP requires the Company to make certain estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses during the reporting period. There is complexity and judgment required in the Company’s process in determining the nature and timing of the satisfaction of performance obligations which affect the amounts of revenue, unbilled receivables, and deferred revenue. Estimates are also used for, but not limited to, current expected credit losses, capitalization and useful life of the Company’s capitalized internal-use software development costs, useful lives of assets, fair value of acquired intangible aseets, carrying value of goodwill, fair value of contingent consideration, income taxes and deferred tax asset valuation and valuation of the Company’s stock-based awards. Numerous internal and external factors can affect estimates. Actual results could differ from those estimates and such differences could be material to the Company’s condensed consolidated financial position and results of operations. |
Net Loss Per Share Attributable to Common Shareholders | Net Loss Per Share Attributable to Common Stockholders Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company had six series of redeemable convertible preferred stock. Upon closing of the Company’s IPO, the outstanding redeemable convertible preferred stock was automatically converted into 35,793,483 shares of common stock. All series of the Company’s redeemable convertible preferred stock were considered to be participating securities because all holders were entitled to receive a non-cumulative dividend on a pari passu basis in the event that a dividend is paid on the common stock. The holders of the redeemable convertible preferred stock did not have a contractual obligation to share in the Company’s losses. As such, the Company’s net losses were not allocated to these participating securities. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. |
Cash and Cash Equivalents | Cash and Cash EquivalentsThe Company considers all highly liquid investments acquired with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents, which include the Company’s money market account, are measured at fair value on a recurring basis. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded and carried at the original invoiced amount less an allowance for credit losses. The Company determines its trade accounts receivable allowances in line with (Topic 326): Measurement of Credit Losses on Financial Instruments (“Topic 326”), based upon the assessment of various factors, such as: historical experience, credit quality of its customers, geographic related risks, economic conditions, and other factors that may affect a customer’s ability to pay. Increases and decreases in the allowance for credit losses are included as a component of general and administrative expense in |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and trade accounts receivable. The Company maintains its cash and cash equivalent balances in highly rated financial institutions, which at times may exceed federally insured limits or be held in foreign jurisdictions. The Company has not experienced any loss relating to cash and cash equivalents in these accounts. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company groups its assets and liabilities measured at fair value in a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets, with valuations obtained from readily available pricing sources for market transactions involving identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable, 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; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. The level of the fair value hierarchy in which the fair value measurement falls is determined by the lowest level input that is significant to the fair value measurement. The Company’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses are considered to approximate their respective fair values due to the short-term nature of such financial instruments. Cash equivalents, primarily consisting of investments in money market funds, are measured at fair value on a recurring basis, and are categorized as Level 1 based on quoted prices in active markets. The carrying value approximates the fair value for these assets and liabilities at March 31, 2022 and December 31, 2021. |
Property and Equipment, Net | Property and Equipment, NetProperty and equipment are recorded at cost, less accumulated depreciation. Maintenance, repairs and minor replacements are charged to expense as incurred. Significant renewals and betterments are capitalized. Depreciation on property and equipment, with the exception of leasehold improvements, is recorded using the straight-line method over the estimated useful lives of the assets. Depreciation on leasehold improvements is recorded using the shorter of the lease term or useful life.The Company periodically reviews the estimated useful lives of property and equipment and any changes to the estimated useful lives are recorded prospectively from the date of the change. When property is retired or disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gains or losses are reflected in the condensed consolidated statements of operations and comprehensive loss in the period of disposal. |
Capitalized Internal-Use Software Development Costs | Capitalized Internal-Use Software Development Costs Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements, with no plans to market such software at the time of development, are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post implementation operational stage are expensed as incurred. The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed and (ii) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Costs incurred for maintenance, minor upgrades and enhancements are expensed. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred. Capitalized costs are included in property and equipment on the condensed consolidated balance sheets. These costs are amortized over the estimated useful life of the software, generally four years, on a straight-line basis. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. The amortization of costs related to the platform applications is included in cost of revenue. |
Purchase Price Allocation, Intangible Assets, and Goodwill | Purchase Price Allocation, Intangible Assets, and Goodwill The purchase price allocation for business combinations and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values. The Company determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If this threshold is met, the single asset or group of assets, as applicable, is not a business. If it is not met, the Company determines whether the single asset or group of assets, as applicable, meets the definition of a business. In connection with the Company’s acquisitions discussed in Note 9, “Acquisitions, Intangible Assets, and Goodwill,” the Company recorded certain intangible assets, including developed technology and customer relationships. Amounts allocated to the acquired intangible assets are being amortized on a straight-line basis over the estimated useful lives. The Company periodically reviews the estimated useful lives and fair values of its identifiable intangible assets, taking into consideration any events or circumstances which might result in a diminished fair value or revised useful life. The excess purchase price over the fair value of assets acquired is recorded as goodwill. The Company tests goodwill for impairment annually during the fourth quarter, or whenever events or changes in circumstances indicate an impairment may have occurred. Goodwill impairment is recognized when the quantitative assessment results in the carrying value of the reporting unit exceeding its fair value, in which case an impairment charge is recorded to goodwill to the extent the carrying value exceeds the fair value, limited to the amount of goodwill. The Company did not recognize any impairment of goodwill for all periods presented. |
Debt Issuance Costs | Debt Issuance Costs The Company records underwriting, legal, and other direct costs incurred related to the issuance of revolving line of credit within other current assets and amortizes these costs to interest expense over the term of the related debt on a straight-line basis, which approximates the effective interest rate method. Amortization of debt issuance costs was nominal for the three months ended March 31, 2021. Upon the extinguishment of the related debt in November 2021, all unamortized capitalized deferred financing costs were recorded to interest expense. There was no amortization expense related to debt issuance costs for the three months ended March 31, 2022. |
Leases | Leases The Company determines if an arrangement is or contains a lease at contract inception. The Company presents the operating leases in long-term assets and current and long-term liabilities. Finance lease assets are included in property and equipment, net, and finance lease liabilities are presented in current and long-term liabilities in the accompanying condensed consolidated balance sheets. Right of use assets represent the Company’s right to use an underlying asset over the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company includes any anticipated lease incentives in the determination of lease liability. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever an event or change in circumstances indicates that the carrying amount of an asset or group of assets may not be recoverable. The impairment review includes comparison of future cash flows expected to be generated by the asset or group of assets with the associated assets’ carrying value. If the carrying value of the asset or group of assets exceeds its expected future cash flows (undiscounted and without interest charges), an impairment loss is recognized to the extent that the carrying amount of the asset exceeds its fair value. |
Segment Information | Segment Information The Company’s Chief Executive Officer is the chief operating decision maker, who reviews the Company’s financial information presented on a consolidated basis for purposes of allocating resources and evaluating the Company’s financial performance. Accordingly, the Company has determined that it operates in a single reporting segment. |
Advertising | AdvertisingThe Company expenses advertising costs as incurred. Advertising expenses were $0.6 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively. These costs are included in sales and marketing expenses in the accompanying condensed consolidated statements of operations and comprehensive loss. |
Cost of Revenue | Cost of Revenue Cost of revenue consists primarily of third-party cloud infrastructure expenses incurred in connection with the Company’s customers’ use of its solutions. Cost of revenue also includes outsourced staffing costs, amortization of internal-use software and personnel costs from employees involved in the delivery of the Company’s solutions. Personnel costs include salaries, benefits, bonuses, stock-based compensation, and allocated overhead costs. |
Research and Development | Research and DevelopmentResearch and development expenses consist primarily of personnel-related costs for the Company’s development team, including salaries, benefits, bonuses, stock-based compensation expenses and allocated overhead costs. Research and development expenses also include contractor or professional services fees, third-party cloud infrastructure expenses incurred in developing the Company’s solution and software services dedicated for use by the Company’s research and development organization. |
Sales And Marketing | Sales and MarketingSales and marketing expenses consist primarily of personnel-related costs directly associated with the Company’s sales and marketing staff, including salaries, benefits, bonuses, commissions, stock-based compensation and allocated overhead costs. Sales and marketing expenses also include advertising costs and other expenses associated with the Company’s marketing and business development programs. In addition, sales and marketing expenses are comprised of travel-related expenses, software services dedicated for use by the Company’s sales and marketing organizations and outside services contracted for sales and marketing purposes. |
General and Administrative | General and Administrative General and administrative expenses consist of personnel-related costs associated with the Company’s finance, legal, human resources and administrative personnel, including salaries, benefits, bonuses, stock-based compensation and allocated overhead costs. General and administrative expenses also include external legal, accounting, professional services fees, software services dedicated for use by the Company’s general and administrative functions, insurance, allowance for credit losses and other corporate expenses. |
Stock-based Compensation | Stock-Based Compensation The Company measures and recognizes compensation expense for all stock-based awards (collectively referred to as stock-based compensation expense), including stock options, restricted stock awards, restricted stock units and performance-based restricted stock units granted to employees, directors and non-employees, based on the estimated fair value of the awards on the date of grant in accordance with ASC Topic 718 Compensation - Stock Compensation (“Topic 718”). The fair value of each stock option granted is estimated using the Black-Scholes option-pricing model. The Black-Scholes pricing model requires the Company to make assumptions and judgments about the inputs used in the calculation, including the expected term, the volatility of the Company’s common stock, risk-free interest rate, and expected dividend yield. The assumptions used to determine the fair value of the option awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. Stock-based compensation is recognized following the straight-line attribution method over the requisite service period for stock options, restricted stock awards and restricted stock units. Stock-based compensation is recognized under the accelerated attribution model over the requisite service period for performance-based restricted stock units. The fair value of restricted stock awards, restricted stock units and performance-based restricted stock units is determined using the fair value of the Company’s common stock on the date of grant. Forfeitures are accounted for in the period in which they occur. |
Contingent Consideration | Contingent Consideration On February 22, 2022, the Company acquired legal workflow solutions from Congruity360, LLC (“Congruity”). As part of the acquisition, the Company entered into a referral agreement in which the Company could be obligated to pay Congruity an additional $2.0 million in the aggregate over the next 2.86 years. As of March 31, 2022, the estimated fair value of the contingent consideration utilizing a probability weighted scenario analysis model under the scenario based method was $0.6 million. The short-term and long-term portions of this amount are recorded in accrued expenses and other liabilities, respectively, on the condensed consolidated balance sheet. The fair value of the contingent consideration was determined using Level 3 inputs due to estimates for the number and size of referrals, the likelihood of shortfall and any credits that will offset the liability. These estimated inputs reflect management’s best estimate of future results, but these estimates are not observable inputs by a market participant and contain a high degree of uncertainty. The Company could experience significant fluctuations in the fair value of contingent consideration based on actual results. The fair value of this contingent consideration will continue to be revalued on a quarterly basis. Changes in the fair value of the contingent consideration will be recorded as operating expense in the condensed consolidated statements of operations and comprehensive loss. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates that are expected to apply to taxable income in the periods in which the deferred tax asset or liability is expected to be realized or settled. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. All deferred tax assets and liabilities are classified as non-current within the accompanying condensed consolidated balance sheets. The Company recognizes the tax benefit from an uncertain tax position only if it meets the “more likely than not” threshold that the position will be sustained upon examination by the taxing authority, based on the technical merits of the position. The tax benefits recognized in the condensed consolidated financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company includes interest and penalties related to its uncertain tax positions, if any, as part of income tax expense within the accompanying condensed consolidated statements of operations and comprehensive loss. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, “ Accounting for Contract Assets and Contract Liabilities from Contracts with Customers |
Revenue Recognition | Revenue Recognition Revenue is recognized, in an amount that reflects the consideration the Company expects to be entitled to over the term of the agreement, when control of the Company’s solutions are transferred to customers. The Company recognizes revenue through the following five-step framework in accordance with ASC Topic 606, Revenue from Contracts with Customers : (1) Identification of the contract, or contracts, with the customer; (2) Identification of performance obligations in the contract; (3) Determination of the transaction price; (4) Allocation of the transaction price to the performance obligations in the contract; (5) Recognition of revenue when, or as, the Company satisfies a performance obligation. A performance obligation is a promise in a contract to transfer a distinct solution to the customer. The Company identifies performance obligations in its contracts with customers, which primarily include usage-based and subscription solutions. Usage-based solutions include fees based on usage of the Company’s platform or professional services, incurred on a time and materials basis, while subscription solutions represent the purchase of a committed data volume on the Company’s platform over a period of time. The transaction price is determined based on the amount which the Company expects to be entitled to in exchange for providing the promised services to the customer. For contracts that include multiple performance obligations, the transaction price in the contract is allocated to each distinct performance obligation on a relative standalone selling price basis. Revenue is recognized over time as performance obligations are satisfied. Variable consideration is evaluated on a contract-by-contract basis, and a constraint is applied using the facts and circumstances of the contract when applicable. On a limited basis, the Company enters into contracts whereby the consideration payable is contingent upon the conclusion of the legal matter. The Company does not recognize the revenue related to these contracts until the legal matter is resolved. Such amounts recognized have been immaterial to date. The Company’s software contracts do not allow the customer to take possession of the software supporting the cloud-based solution. Customers are not entitled to any refunds. The Company generally invoices its customers monthly, quarterly or annually in advance and recognizes revenue ratably over the life of the contract. The Company’s arrangements do not contain general rights of return. However, credits may be issued on a case-by-case basis. Amounts that have been invoiced are recorded in accounts receivable and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment Useful Life | The estimated useful life of each asset category is as follows: Furniture and fixtures 5 years Leasehold improvements Shorter of lease term or 5 years Computer equipment 2 years Property and equipment consist of the following (in thousands): March 31, December 31, Computer equipment $ 3,494 $ 3,079 Capitalized internal-use software 5,658 5,168 Leasehold improvements 112 111 Furniture 649 649 Total property and equipment 9,913 9,007 Less: accumulated depreciation and amortization (4,065) (3,672) Property and equipment, net $ 5,848 $ 5,335 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment Useful Life | The estimated useful life of each asset category is as follows: Furniture and fixtures 5 years Leasehold improvements Shorter of lease term or 5 years Computer equipment 2 years Property and equipment consist of the following (in thousands): March 31, December 31, Computer equipment $ 3,494 $ 3,079 Capitalized internal-use software 5,658 5,168 Leasehold improvements 112 111 Furniture 649 649 Total property and equipment 9,913 9,007 Less: accumulated depreciation and amortization (4,065) (3,672) Property and equipment, net $ 5,848 $ 5,335 |
Operating Segment and Geograp_2
Operating Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Disaggregation of Revenue | The Company determines the location of revenue using the billing address of each customer. The following table sets forth revenue by geographic area (in thousands): Three Months Ended 2022 2021 United States $ 32,767 $ 20,275 All other countries 1,701 856 Total revenue $ 34,468 $ 21,131 |
Acquisitions, Intangible Asse_2
Acquisitions, Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of assets acquired and liabilities assumed | The aggregate purchase consideration and estimated fair values of the assets acquired and liabilities assumed at the date of acquisition were as follows (in thousands): Fair Value Preliminary fair value of net assets acquired: Net tangible assets (liabilities) $ (395) Developed technology 900 Customer relationships 300 Goodwill 5,898 Total fair value of net assets acquired $ 6,703 |
Schedule of acquired intangible assets | Intangible assets, net consisted of the following (in thousands): March 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortization Period Developed technology $ 900 $ (17) $ 883 5 years Customer relationships 300 (10) 290 3 years Total $ 1,200 $ (27) $ 1,173 |
Schedule of future amortization expense | As of March 31, 2022, future amortization expense by year is expected to be as follows (in thousands): Amount Remainder of 2022 $ 211 2023 280 2024 280 2025 195 2026 180 Thereafter 27 Total $ 1,173 |
Schedule of goodwill | The changes in the carrying amount of goodwill were as follows (in thousands): Amount Balance as of December 31, 2021 $ — 2022 acquisition 5,898 Total $ 5,898 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes the stock option activity under the 2013 Plan and 2021 Plan (in thousands except for per share amounts and years): Number of Weighted- Weighted- Aggregate Options outstanding as of December 31, 2021 2,560 $ 7.29 5.46 $ 72,875 Granted — — Exercised (409) 2.37 Forfeited and cancelled (266) 17.21 Options outstanding as of March 31, 2022 1,885 $ 6.95 6.11 $ 50,933 Options vested and exercisable at March 31, 2022 1,388 $ 5.08 5.39 $ 40,119 |
Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity | The following table summarizes the RSU activity under the 2021 Plan, including the PSUs (in thousands except for per share amounts): Number of Weighted-average fair value Aggregate Unvested and outstanding as of December 31, 2021 469 $ 47.12 $ 16,781 Granted 1,575 31.27 — Vested (14) 44.63 — Forfeited and cancelled (88) 40.66 — Unvested and outstanding as of March 31, 2022 1,942 $ 34.58 $ 63,767 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share, Basic and Diluted | The following tables present calculations for basic and diluted net loss per share (in thousands, except per share amounts): Three Months Ended 2022 2021 Net loss $ (11,849) $ (2,928) Less accretion of redeemable convertible preferred stock — (26) Loss applicable to common stockholders basic and diluted (11,849) (2,954) Weighted-average shares used in computing net loss per share attributable to common shareholders, basic and diluted 57,972 13,388 Net loss per share attributable to ordinary shareholders, basic and diluted $ (0.20) $ (0.22) |
Schedule of Securities Excluded from Computation of Net Loss Per Share | The following outstanding shares of common stock equivalents as of the periods presented were excluded from the computation of diluted net loss per share for the periods presented because the impact of including them would have been anti-dilutive (in thousands): As of March 31, 2022 2021 Redeemable convertible preferred stock, as converted — 35,793 Stock options 1,898 3,180 Unvested restricted stock awards 238 100 Unvested restricted stock units 1,942 — Common stock warrants — 50 Total 4,078 39,123 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Feb. 22, 2022 | Jul. 21, 2021 | |
Income Tax Contingency [Line Items] | |||||
Convertible preferred stock, common stock issued upon conversion (in shares) | 35,793,483 | ||||
Advertising expense | $ 600,000 | $ 100,000 | |||
Unrecognized income tax penalties and interest expense | 0 | $ 0 | |||
Unrecognized income, tax penalties and interest accrued | 0 | $ 0 | |||
Amortization of debt issuance costs | 0 | ||||
Congruity360, LLC | |||||
Income Tax Contingency [Line Items] | |||||
Contingent consideration | $ 2,000,000 | ||||
Business combination, contingent consideration, term of payment | 2 years 10 months 9 days | ||||
Congruity360, LLC | Fair Value | |||||
Income Tax Contingency [Line Items] | |||||
Contingent consideration | $ 600,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Allowance for Credit Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Credit loss provision | $ 0.2 | |
Credit loss, write-off | 0.3 | |
Allowance for credit loss | $ 1.1 | $ 1.2 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property and Equipment Useful Life (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 2 years |
Capitalized internal-use software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 4 years |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Deferred revenue | $ 2,200,000 | $ 1,600,000 | ||
Deferred revenue recognized | $ 1,300,000 | $ 1,000,000 | ||
Current deferred revenue | 3,035,000 | 2,175,000 | ||
Noncurrent deferred revenue | 100,000 | 0 | ||
Contract assets | 3,400,000 | $ 3,200,000 | ||
Remaining performance obligation | 22,100,000 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Remaining performance obligation | $ 11,900,000 | |||
Remaining performance obligation, expected timing of satisfaction | 12 months | |||
Revenue Benchmark | Product Concentration Risk | Usage Based Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 90.00% | 87.00% | ||
Revenue Benchmark | Product Concentration Risk | Subscription Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 10.00% | 13.00% |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 9,913 | $ 9,007 |
Less: accumulated depreciation and amortization | (4,065) | (3,672) |
Property and equipment, net | 5,848 | 5,335 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,494 | 3,079 |
Capitalized internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 5,658 | 5,168 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 112 | 111 |
Furniture | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 649 | $ 649 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $ 0.4 | $ 0.4 |
Leases (Details)
Leases (Details) $ in Thousands | Mar. 31, 2022USD ($)lease |
Leases [Abstract] | |
Number of long term leases | 1 |
Remaining lease term | 7 months 6 days |
Number of short term leases | 0 |
Operating lease, liability to be paid | $ | $ 600 |
Operating Segment and Geograp_3
Operating Segment and Geographic Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | |
Disaggregation of Revenue [Line Items] | ||
Number of reportable segments | segment | 1 | |
Total revenue | $ 34,468 | $ 21,131 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 32,767 | 20,275 |
All other countries | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 1,701 | $ 856 |
Debt and Related Warrants (Deta
Debt and Related Warrants (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Oct. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Nov. 30, 2018 | |
Line of Credit Facility [Line Items] | ||||
Proceeds from warrants exercises | $ 100,000 | |||
Amortization of debt issuance costs | $ 0 | |||
Loan and Security Agreement | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 18,000,000 | |||
Outstanding debt | $ 0 | |||
Second Amended and Restated Loan and Security Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Warrants granted to purchase (in shares) | 49,869 | |||
Warrants outstanding, term | 10 years | |||
Second Amended and Restated Loan and Security Agreement | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Exercise price of warrants or rights (in dollars per share) | $ 0.525 | |||
Second Amended and Restated Loan and Security Agreement | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Exercise price of warrants or rights (in dollars per share) | $ 10.80 | |||
Second Amended and Restated Loan and Security Agreement | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 40,000,000 | |||
Debt instrument, covenant, liquidity amount | $ 5,000,000 | |||
Debt instrument, covenant, adjusted EBITDA burn, term | 6 months | |||
Debt instrument, covenant, adjusted EBITDA burn, amount outstanding | $ 18,000,000 | |||
Debt instrument, basis spread on variable rate | 0.25% | |||
Unused commitment fee percentage | 0.25% | |||
Second Amended and Restated Loan and Security Agreement | Revolving Credit Facility | LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 2.50% |
Commitment and Contingencies (D
Commitment and Contingencies (Details) | Mar. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | |
Remaining lease term | 7 months 6 days |
Acquisitions, Intangible Asse_3
Acquisitions, Intangible Assets and Goodwill - Congruity Acquisition (Details) - Congruity360, LLC - USD ($) $ in Millions | Feb. 22, 2022 | Mar. 31, 2022 |
Business Acquisition [Line Items] | ||
Cash paid for acquisitions | $ 6.1 | |
Holdback funds | 0.8 | |
Contingent consideration | 2 | |
Business acquisition, transaction costs | $ 0.1 | |
Fair Value | ||
Business Acquisition [Line Items] | ||
Contingent consideration | $ 0.6 |
Acquisitions, Intangible Asse_4
Acquisitions, Intangible Assets and Goodwill - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Feb. 22, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 5,898 | $ 0 | |
Congruity360, LLC | |||
Business Acquisition [Line Items] | |||
Net tangible assets (liabilities) | $ (395) | ||
Goodwill | 5,898 | ||
Total fair value of net assets acquired | 6,703 | ||
Congruity360, LLC | Developed technology | |||
Business Acquisition [Line Items] | |||
Intangible assets | 900 | ||
Congruity360, LLC | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 300 |
Acquisitions, Intangible Asse_5
Acquisitions, Intangible Assets and Goodwill - Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Net Carrying Amount | $ 1,173 | $ 0 |
Congruity360, LLC | ||
Business Acquisition [Line Items] | ||
Gross Carrying Amount | 1,200 | |
Accumulated Amortization | (27) | |
Net Carrying Amount | 1,173 | |
Congruity360, LLC | Developed technology | ||
Business Acquisition [Line Items] | ||
Gross Carrying Amount | 900 | |
Accumulated Amortization | (17) | |
Net Carrying Amount | $ 883 | |
Amortization Period | 5 years | |
Congruity360, LLC | Customer relationships | ||
Business Acquisition [Line Items] | ||
Gross Carrying Amount | $ 300 | |
Accumulated Amortization | (10) | |
Net Carrying Amount | $ 290 | |
Amortization Period | 3 years |
Acquisitions, Intangible Asse_6
Acquisitions, Intangible Assets and Goodwill - Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
Remainder of 2022 | $ 211 |
2023 | 280 |
2024 | 280 |
2025 | 195 |
2026 | 180 |
Thereafter | 27 |
Total | $ 1,173 |
Acquisitions, Intangible Asse_7
Acquisitions, Intangible Assets and Goodwill - Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 0 |
2022 acquisition | 5,898 |
Goodwill, ending balance | $ 5,898 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate intrinsic value of options exercised | $ 12.5 | $ 0.6 | |
Unrecognized compensation costs | $ 2.7 | $ 2.7 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future issuance (in shares) | 6,800,000 | 6,800,000 | |
Stock-based compensation costs | $ 3.2 | $ 0.5 | |
Term of options granted | 10 years | ||
Vesting period | 4 years | ||
Percentage of awards vesting each year | 25.00% | ||
Weighted-average expected recognition period | 2 years 1 month 9 days | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average expected recognition period | 3 years 1 month 24 days | ||
Awards granted, non-option equity instruments (in shares) | 0 | 0 | |
Awards vested and released from right to repurchase (in shares) | 25,000 | 12,500 | |
Awards cancelled (in shares) | 0 | 0 | |
Unrecognized stock-based compensation | $ 3.4 | $ 3.4 | |
Unvested restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of awards vesting each year | 33.33% | ||
Awards vested and released from right to repurchase (in shares) | 0 | ||
Performance period | 1 year | ||
Awards granted, equity instruments other than options (in shares) | 600,000 | ||
Award service period | 2 years | ||
RSUs and PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average expected recognition period | 3 years 4 months 13 days | ||
Awards vested and released from right to repurchase (in shares) | 14,000 | ||
Unrecognized stock-based compensation | $ 55.7 | $ 55.7 | |
Awards granted, equity instruments other than options (in shares) | 1,575,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Number of shares | ||
Options outstanding at beginning of period (in shares) | 2,560 | |
Options granted (in shares) | 0 | |
Options exercised (in shares) | (409) | |
Options forfeited and cancelled (in shares) | (266) | |
Options outstanding at end of period (in shares) | 1,885 | 2,560 |
Options vested and exercisable (in shares) | 1,388 | |
Weighted-average exercise price per share | ||
Weighted-average exercise price of options outstanding at beginning of period (in USD per share) | $ 7.29 | |
Weighted-average exercise price of options granted (in USD per share) | 0 | |
Weighted-average exercise price of options exercised (in USD per share) | 2.37 | |
Weighted-average exercise price of options forfeited and cancelled (in USD per share) | 17.21 | |
Weighted-average exercise price of options outstanding at end of period (in USD per share) | 6.95 | $ 7.29 |
Weighted-average exercise price of options vested and exercisable (in USD per share) | $ 5.08 | |
Weighted-average remaining contractual life of options outstanding (in years) | 6 years 1 month 9 days | 5 years 5 months 15 days |
Weighted-average remaining contractual life of options vested and exercisable (in years) | 5 years 4 months 20 days | |
Aggregate intrinsic value of options outstanding | $ 50,933 | $ 72,875 |
Aggregate intrinsic value of options vested and exercisable | $ 40,119 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Restricted Stock Unity Activity (Details) - RSUs and PSUs $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Number of Shares | |
Unvested and outstanding, beginning balance (in shares) | shares | 469 |
Granted (in shares) | shares | 1,575 |
Vested (in shares) | shares | (14) |
Forfeited and cancelled (in shares) | shares | (88) |
Unvested and outstanding, ending balance (in shares) | shares | 1,942 |
Weighted-average fair value | |
Unvested and outstanding, beginning balance (in dollars per share) | $ / shares | $ 47.12 |
Granted (in dollars per share) | $ / shares | 31.27 |
Vested (in dollars per share) | $ / shares | 44.63 |
Forfeited and cancelled (in dollars per share) | $ / shares | 40.66 |
Unvested and outstanding, ending balance (in dollars per share) | $ / shares | $ 34.58 |
Aggregate intrinsic value | |
Unvested and outstanding as of December 31, 2021 | $ | $ 16,781 |
Unvested and outstanding as of March 31, 2022 | $ | $ 63,767 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | (0.25%) | (1.24%) |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Employer contributions | $ 700,000 | $ 0 |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Computation Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (11,849) | $ (2,928) |
Less accretion of redeemable convertible preferred stock | 0 | (26) |
Loss applicable to common stockholders, basic | (11,849) | (2,954) |
Loss applicable to common stockholders, diluted | $ (11,849) | $ (2,954) |
Weighted-average shares used in computing net loss per share attributable to common shareholders, basic (in shares) | 57,972 | 13,388 |
Weighted-average shares used in computing net loss per share attributable to common shareholders, diluted (in shares) | 57,972 | 13,388 |
Net loss per share attributable to ordinary shareholders, basic (in USD per share) | $ (0.20) | $ (0.22) |
Net loss per share attributable to ordinary shareholders, diluted (in USD per share) | $ (0.20) | $ (0.22) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 4,078 | 39,123 |
Redeemable convertible preferred stock, as converted | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 35,793 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,898 | 3,180 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,942 | 0 |
Unvested restricted stock awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 238 | 100 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 50 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - Officer $ in Millions | 1 Months Ended |
Oct. 31, 2018USD ($) | |
Related Party Transaction [Line Items] | |
Loan to related party | $ 0.2 |
Interest rate on loan to related party | 2.83% |