Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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 | 111 Congress Ave. | |
Entity Address, Address Line Two | Suite 900 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78701 | |
City Area Code | 833 | |
Local Phone Number | 653-4726 | |
Title of 12(b) Security | Common stock, par value $0.005 | |
Trading Symbol | LAW | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 59,976,004 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Central Index Key | 0001625641 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 148,679 | $ 159,551 |
Accounts receivable, net | 24,501 | 26,993 |
Prepaid expenses and other current assets | 5,388 | 5,795 |
Total current assets | 178,568 | 192,339 |
Property and equipment, net | 9,518 | 9,663 |
Operating lease right-of-use assets | 7,878 | 8,143 |
Primary law intangible asset, net | 14,000 | 14,000 |
Other intangible assets, net | 610 | 681 |
Goodwill | 5,898 | 5,898 |
Other assets | 804 | 823 |
Total assets | 217,276 | 231,547 |
Current liabilities: | ||
Accounts payable | 1,995 | 5,234 |
Accrued expenses | 6,341 | 5,502 |
Accrued salary and benefits | 3,134 | 6,230 |
Deferred revenue | 3,501 | 4,285 |
Operating leases | 1,983 | 1,826 |
Finance leases | 41 | 41 |
Total current liabilities | 16,995 | 23,118 |
Operating leases, non-current | 6,702 | 7,136 |
Finance leases, non-current | 148 | 158 |
Other liabilities | 278 | 800 |
Total liabilities | 24,123 | 31,212 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity | ||
Preferred stock $0.005 par value, 100,000 shares authorized and no shares issued and outstanding as of March 31, 2024 and December 31, 2023 | 0 | 0 |
Common stock $0.005 par value, 1,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 61,101 and 61,010 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 306 | 306 |
Additional paid-in capital | 444,040 | 440,408 |
Accumulated deficit | (251,193) | (240,379) |
Total stockholders’ equity | 193,153 | 200,335 |
Total liabilities and stockholders’ equity | $ 217,276 | $ 231,547 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.005 | $ 0.005 |
Preferred stock, 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) | 61,101,000 | 61,010,000 |
Common stock, outstanding (in shares) | 61,101,000 | 61,010,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenue | $ 35,571 | $ 33,129 |
Cost of revenue | 8,852 | 8,277 |
Gross profit | 26,719 | 24,852 |
Operating expenses: | ||
Research and development | 12,079 | 15,772 |
Sales and marketing | 15,808 | 19,060 |
General and administrative | 11,164 | 12,300 |
Total operating expenses | 39,051 | 47,132 |
Loss from operations | (12,332) | (22,280) |
Other income (expense) | ||
Interest and other income | 1,986 | 1,947 |
Interest and other expense | 8 | |
Interest and other expense | (150) | |
Loss from operations before income taxes | (10,496) | (20,325) |
Income tax provision | (86) | (40) |
Net loss attributable to common stockholders | (10,582) | (20,365) |
Net loss attributable to common stockholders | $ (10,582) | $ (20,365) |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.17) | $ (0.34) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.17) | $ (0.34) |
Weighted-average shares used in computing net loss per share attributable to common shareholders, basic (in shares) | 61,188 | 59,410 |
Weighted-average shares used in computing net loss per share attributable to common shareholders, diluted (in shares) | 61,188 | 59,410 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders’ Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated deficit |
Stockholders' equity at beginning of period (in shares) at Dec. 31, 2022 | 59,190 | |||
Stockholder's equity at beginning of period at Dec. 31, 2022 | $ 223,636 | $ 296 | $ 421,569 | $ (198,229) |
Stockholders' Equity | ||||
Exercise of stock options (in shares) | 220 | |||
Exercise of stock options | 260 | $ 1 | 259 | |
Repurchase of common stock related to net share settlement (in shares) | (2) | |||
Repurchase of common stock related to net share settlement | (15) | (15) | ||
Vesting of restricted stock units (in shares) | 112 | |||
Vesting of restricted stock units | 0 | $ 1 | (1) | |
Cancellation of restricted stock awards (in shares) | (13) | |||
Issuance of Common Stock under ESPP (in shares) | 132 | |||
Issuance of common stock under Employee Stock Purchase Plan | 932 | $ 1 | 931 | |
Stock compensation expense | 7,350 | 7,350 | ||
Net loss | (20,365) | (20,365) | ||
Stockholders' equity at end of period (in shares) at Mar. 31, 2023 | 59,639 | |||
Stockholder's equity at end of period at Mar. 31, 2023 | $ 211,798 | $ 299 | 430,093 | (218,594) |
Stockholders' equity at beginning of period (in shares) at Dec. 31, 2023 | 61,010 | 61,010 | ||
Stockholder's equity at beginning of period at Dec. 31, 2023 | $ 200,335 | $ 306 | 440,408 | $ (240,379) |
Stockholders' Equity | ||||
Exercise of stock options (in shares) | 8 | 8 | ||
Exercise of stock options | $ 10 | 10 | ||
Repurchase of common stock related to net share settlement (in shares) | (5) | |||
Repurchase of common stock related to net share settlement | (39) | (39) | ||
Vesting of restricted stock units (in shares) | 380 | |||
Vesting of restricted stock units | 0 | $ 2 | (2) | |
Issuance of Common Stock under ESPP (in shares) | 51 | |||
Issuance of common stock under Employee Stock Purchase Plan | 360 | 360 | ||
Stock compensation expense | 5,787 | 5,787 | ||
Common stock repurchases under share repurchase program (in shares) | (343) | |||
Common stock repurchases under share repurchase program | (2,718) | $ (2) | (2,484) | $ (232) |
Net loss | $ (10,582) | (10,582) | ||
Stockholders' equity at end of period (in shares) at Mar. 31, 2024 | 61,101 | 61,101 | ||
Stockholder's equity at end of period at Mar. 31, 2024 | $ 193,153 | $ 306 | $ 444,040 | $ (251,193) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flow from operating activities: | ||
Net loss | $ (10,582) | $ (20,365) |
Adjustments to reconcile net loss to cash used in operations: | ||
Depreciation and amortization | 1,075 | 952 |
Stock-based compensation | 5,673 | 7,224 |
Charge to allowance for credit losses | 564 | 831 |
Non-cash operating lease costs | 265 | 218 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,927 | (1,963) |
Prepaid expenses and other current assets | 409 | 676 |
Other long-term assets | 17 | (124) |
Accounts payable | (2,838) | (1,765) |
Accrued expenses and other | (2,738) | (248) |
Deferred revenue | (784) | 69 |
Operating lease liabilities | (278) | (242) |
Other liabilities | (40) | (15) |
Net cash used in operating activities | (7,330) | (14,752) |
Cash flow from investing activities: | ||
Purchases of property, equipment and capitalized software development costs | (688) | (844) |
Cash paid for acquisitions | 0 | (1,180) |
Net cash used in investing activities | (688) | (2,024) |
Cash flow from financing activities: | ||
Proceeds from exercise of stock options | 10 | 260 |
Net proceeds from issuance of common stock under Employee Stock Purchase Plan | 360 | 932 |
Repurchase of common stock related to net share settlement | (39) | (15) |
Repurchase of common stock related to share repurchase program | (2,718) | 0 |
Cash Paid for acquisitions | (457) | 0 |
Principal payments on finance lease obligations | (10) | (10) |
Net cash provided by (used in) financing activities | (2,854) | 1,167 |
Net decrease in cash and cash equivalents: | (10,872) | (15,609) |
Cash and cash equivalents at beginning of period | 159,551 | 203,244 |
Cash and cash equivalents at end of period | 148,679 | 187,635 |
Supplemental disclosure: | ||
Cash paid for taxes | 198 | 125 |
Non-cash investing and financing activities: | ||
Property and equipment included in accounts payable and accrued liabilities | 56 | 204 |
Contingent consideration related to acquisition | $ 481 | $ 753 |
Organization and Nature of Oper
Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations CS Disco, Inc. (the “Company” or “DISCO”) has built cloud-native, AI-powered product offerings that enterprises, law firms, legal services providers, and governments use for legal hold, legal request, 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’s headquarters are located in Austin, Texas. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
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, which 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 irrevocably opted not to use the extended transition period for complying with any new or revised financial accounting standards, and as such, the Company is required to adopt new or revised standards at the same time as other public companies. An emerging growth company may also take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including reduced reporting requirements and other exemptions. 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, 2023, 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 unaudited interim condensed consolidated financial statements of the Company 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, its results of operations, statements of changes in stockholders’ equity and cash flows for the interim periods presented. The results of operations for the three months ended March 31, 2024 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, 2023 filed with the SEC on February 22, 2024. Risks and Uncertainties Fluctuations in general macroeconomic conditions, including conditions resulting from inflation, rising interest rates as well as the effects of global events, such as the Russia-Ukraine and the Israel-Hamas wars 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, including goodwill and intangible 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 have 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, suppliers and stockholders. 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 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 software development costs, useful lives of assets, fair value of acquired intangible assets, 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 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, and performance-based restricted stock units. 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 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 $0.8 million for expected losses for the three months ended March 31, 2024, and $0.6 million has been written off and charged against the allowance for the three months March 31, 2024. Recoveries made by the Company were $0.3 million for the three months March 31, 2024. The allowance for credit losses related to accounts receivable was $2.7 million and $2.8 million as of March 31, 2024 and December 31, 2023, respectively. Unbilled receivables were $2.9 million and $2.8 million as of March 31, 2024 and December 31, 2023, respectively, and were included within accounts receivable on the condensed consolidated balance sheets. 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, 2024 and December 31, 2023. 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 years ended March 31, 2024 and December 31, 2023. 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 Software Development Costs Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements or related to the development of product offerings 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 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, net 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 acquisition of legal workflow products from Congruity360, LLC (“Congruity”) discussed in Note 7, “Acquisitions and Goodwill,” and Note 8 “Intangible Assets,” 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. 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 in the condensed consolidated balance sheets. Finance lease assets are included in property and equipment, net, and finance lease liabilities are presented in current and long-term liabilities on the 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 liabilities. 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, 2024 or 2023. 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” for the Company’s Revenue Recognition policy. Advertising The Company expenses advertising costs as incurred. Advertising expenses were $1.2 million and $0.8 million for the three months ended March 31, 2024 and 2023, respectively. These costs are included in sales and marketing expenses in the 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 product offerings. Cost of revenue also includes outsourced staffing costs, amortization of capitalized software development and personnel costs from employees involved in the delivery of the Company’s product offerings. 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 product offerings 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. 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. 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. Sales Taxes The Company recognizes sales and other taxes collected from customers and subsequently remits the taxes 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 products from 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 a remaining period of 2.81 years. As of March 31, 2024, the Company has paid $1.2 million of contingent consideration. As of March 31, 2024, the estimated fair value of the contingent consideration utilizing a probability weighted scenario analysis model under the scenario-based method was $0.5 million with a remaining period of 0.71 years. The balance of this contingent consideration is recorded in accrued expenses o n 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 are recorded as general and administrative 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. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties as of March 31, 2024 and December 31, 2023. Accounting Pronouncements Recently Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) (“ASU No. 2023-07”), which intends to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the effect of this new guidance on the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) (“ASU No. 2023-09), which requires public entities to disclose on an annual basis (1) specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. The amendments in this ASU are effective for public business entities for annual periods beginning after December 15, 2024, and should be applied prospectively. Early adoption of the amendments is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the effect of this new guidance on the consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2024 | |
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 product offerings are transferred to customers. The Company recognizes revenue through the following five-step framework in accordance with ASC 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 contracts. Usage-based contracts include fees based on usage of the Company’s platform or professional services, incurred on a time and materials basis, while subscription contracts 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 platform. Customers are not entitled to any refunds. 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 Contractual Arrangements The Company’s revenue-generating activities directly relate to the sale and support of its legal product offerings 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. Usage-based revenue is generated from contracts 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. Subscription revenue is recognized ratably over the life of the contract. In the three months ended March 31, 2024 and 2023, usage-based revenue represented 89% and 88% of total revenue, respectively. In the three months ended March 31, 2024 and 2023, subscription revenue fees represented 11% and 12% of 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. 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 $4.3 million and $4.1 million of deferred revenue as of December 31, 2023 and 2022, respectively, the Company recognized $2.3 million and $2.1 million as revenue during the three months March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023 the Company recorded $3.5 million and $4.3 million of current deferred revenue, respectively. The Company has no non-current deferred revenue as of March 31, 2024 and December 31, 2023. 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, 2024, the Company expects to recognize approximately $21.2 million of revenue from RPO. The Company expects to recognize revenue of approximately $10.8 million as of March 31, 2024 from RPO 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, 2024 and 2023, 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. Revenue by Groups of Similar Offerings and Geographic Area The following table sets forth revenue by groups of similar offerings (in thousands): Three Months Ended March 31, 2024 2023 Software $ 29,909 $ 27,560 Services 5,662 5,569 Total revenue $ 35,571 $ 33,129 Software is comprised of revenues related to our DISCO Hold, DISCO Request, DISCO Ediscovery, and DISCO Case Builder products. Services is comprised of revenues related to our DISCO Review business and professional services. 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 March 31, 2024 2023 United States $ 32,353 $ 30,611 All other countries 3,218 2,518 Total revenue $ 35,571 $ 33,129 Long-lived assets outside of the United States are not significant. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2024 | |
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 $ 5,871 $ 5,698 Capitalized software development 11,756 11,047 Leasehold improvements 1,047 1,029 Furniture 1,203 1,203 Total property and equipment 19,877 18,977 Less: accumulated depreciation and amortization (10,359) (9,314) Property and equipment, net $ 9,518 $ 9,663 As discussed in Note 2, “Summary of Significant Accounting Policies - Capitalized Software Development Costs”, the Company capitalizes costs related to the development of computer software for internal use or related to the development of product offerings and is included in capitalized software development costs within property and equipment, net. Depreciation and amortization expense relating to the Company’s property and equipment was $1.0 million and $0.9 million for the three months ended March 31, 2024 and 2023 , respectively. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Leases The Company leases office spaces under non-cancellable operating leases for its corporate headquarters in Austin, Texas and its office space in New York, New York. The Company also leases furniture under a non-cancellable finance lease. Pursuant to the corporate headquarters lease in Austin, the initial term expires on July 31, 2028, and pursuant to the lease in New York, the term expires on May 31, 2024. In February 2024, the Company exercised its option to extend the New York lease until November 30, 2024. For each lease, the Company recognizes a right-of-use-asset and lease liability. The asset and liability are then amortized as payments are made. Future minimum payments required under operating and financing leases, by year and in aggregate, that have initial or remaining non-cancellable lease terms in excess of one year, are as follows (in thousands): As of Operating Finance Remainder of 2024 $ 1,848 $ 35 2025 2,098 47 2026 2,162 47 2027 2,229 47 2028 1,333 28 Thereafter — — Total lease payments $ 9,670 $ 204 As of March 31, 2024, the Company had no additional operating or finance leases with future commencement dates. |
Leases | Leases The Company leases office spaces under non-cancellable operating leases for its corporate headquarters in Austin, Texas and its office space in New York, New York. The Company also leases furniture under a non-cancellable finance lease. Pursuant to the corporate headquarters lease in Austin, the initial term expires on July 31, 2028, and pursuant to the lease in New York, the term expires on May 31, 2024. In February 2024, the Company exercised its option to extend the New York lease until November 30, 2024. For each lease, the Company recognizes a right-of-use-asset and lease liability. The asset and liability are then amortized as payments are made. Future minimum payments required under operating and financing leases, by year and in aggregate, that have initial or remaining non-cancellable lease terms in excess of one year, are as follows (in thousands): As of Operating Finance Remainder of 2024 $ 1,848 $ 35 2025 2,098 47 2026 2,162 47 2027 2,229 47 2028 1,333 28 Thereafter — — Total lease payments $ 9,670 $ 204 As of March 31, 2024, the Company had no additional operating or finance leases with future commencement dates. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases and Other Commitments The Company leases office facilities under non-cancellable operating leases as well as furniture under a non-cancellable finance lease. As of March 31, 2024, the remaining weighted average term was 4.22 years and 4.34 years for the operating leases and finance lease, respectively. See Note 5, “Leases,” to these condensed consolidated financial statements for additional detail on the Company’s operating and finance lease commitments arising from these agreements. There were no material changes outside the ordinary course of business to the Company’s contractual obligations and commitments. Litigation From time to time, the Company is involved in various legal proceedings arising from the normal course of business activities. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable and subject to significant uncertainties. At this time, the Company is not able to reasonably estimate the amount or range of possible losses in excess of any amounts accrued, including losses that could arise as a result of application of non-monetary remedies, with respect to the contingencies it faces, and the Company’s estimates may not prove to be accurate. On September 19, 2023, a purported stockholder class action lawsuit was filed against the Company and certain of its current and former officers in the United States District Court in the Southern District of New York, alleging violations under Sections 10(b) and 20(a) of the Exchange Act. The complaint alleges that the Company made materially false or misleading statements about the factors that were driving revenue growth between July 21, 2021 and August 11, 2022. The complaint seeks an unspecified amount of damages, interest, attorneys’ fees, expert fees, costs, and other relief as the court may deem just and proper. On December 12, 2023, the Court appointed a lead plaintiff and lead counsel. On January 8, 2024, the Court transferred the case to the United States District Court in the Western District of Texas. On November 3, 2023, a purported stockholder class action lawsuit was filed against the Company and certain of its current and former officers in New York Supreme Court, County of New York, alleging violations under Sections 11 and 12(a)(2) of the Securities Act of 1933. The complaint alleged that the Company made false or misleading statements about the factors that were driving revenue growth between July 21, 2021 and August 11, 2022. The complaint sought an unspecified amount of damages, interest, attorneys’ fees, expert fees, costs, rescission, equitable and injunctive relief, and other relief as the court may deem just and proper. On January 18, 2024, this purported stockholder class action lawsuit was dismissed without prejudice. |
Acquisitions and Goodwill
Acquisitions and Goodwill | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Goodwill | Acquisitions and Goodwill Congruity Acquisition On February 22, 2022, the Company entered into an asset purchase agreement whereby the Company acquired legal workflow products 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, 2024, the Company has paid $1.2 million of contingent consideration. As of March 31, 2024, the estimated fair value of the remaining contingent consideration was $0.5 million. The legal workflow products expanded 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 resulting goodwill will be deductible for income tax purposes. Transaction costs amounted to approximately $0.1 million and were expensed as incurred. The carrying amount of goodwill was $5.9 million at each of March 31, 2024 and December 31, 2023. No impairment of goodwill has been recorded to date. 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 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 | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Primary Law On August 17, 2023, the Company executed a five-year $14.0 million licensing agreement with Fastcase, Inc., whereby the Company received a perpetual license of Fastcase’s library of U.S. case law, statutes, regulations and court rules (collectively “primary law”). The Company anticipates integrating primary law into its product offerings to automate drafting of legal documents and research memos and assist lawyers in identifying potential legal claims and defenses from new and historical case law, statutes, regulations and court rulings. Fastcase will provide the Company with regular data updates during the initial term. After the initial term, the Company will have an option to renew the agreement for an additional five-year term, following which the Company will then have the option to renew the agreement for an unlimited number of successive one-year renewal periods. The agreement will continue to automatically renew until terminated by either party with 60 days’ notice. During all renewal periods, Fastcase will continue to provide regular data updates. In accordance with ASC 350, Intangible— Goodwill and Other, the data obtained is classified as an intangible asset. The Company will begin recognizing amortization of the intangible asset, over a useful life of 10 years, once the asset is available for its intended use. Other Intangible Assets Other intangible assets, net consisted of the following (in thousands): March 31, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortization Period Developed technology $ 900 $ (380) $ 520 5 years Customer relationships 300 (210) 90 3 years Total $ 1,200 $ (590) $ 610 Other intangible asset amortization expense was $0.1 million for the three months ended March 31, 2024 and 2023. 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, 2024, future amortization expense by year is expected to be as follows (in thousands): Amount 2024 $ 209 2025 195 2026 180 2027 26 Thereafter — Total $ 610 |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Mar. 31, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges The Company records liabilities for costs associated with exit or disposal activities in the period in which the liability is incurred. Employee severance costs are accrued when the restructuring actions are probable and estimable. Costs for one-time termination benefits in which the employee is required to render service until termination in order to receive the benefits, is recognized ratably over the future service period. The Company also records costs incurred with contract terminations associated with restructuring activities. On January 19, 2023, the Company committed to a plan to reduce its global workforce by approximately 9%. In conjunction with the restructuring, the Company recorded restructuring charges of $1.0 million during the three months ended March 31, 2023, consisting of cash expenditures primarily for employee severance and other termination benefits as well as contract termination charges. The Company recorded |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Equity Incentive Plans In December 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, 2024, 8.1 million shares remained available for future issuance under the 2021 Plan. The Company recognized total stock-based compensation expense related to equity incentive awards of $5.7 million and $7.2 million for the three months ended March 31, 2024 and 2023, respectively. Stock Options Prior to becoming a public company in 2021, the Company granted options to employees, directors and consultants. The Company ceased granting options after its initial public offering in July 2021. Options were granted with an exercise price equal to the 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 generally vest according to a four-year vesting schedule, with 25% of the shares vesting on the first anniversary of the vesting commencement date and the remainder of the shares vesting in equal monthly 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, 2023 524 $ 7.47 4.49 $ 1,383 Granted — — Exercised (8) 1.18 Forfeited and cancelled (40) 8.02 Options outstanding as of March 31, 2024 476 $ 7.53 4.27 $ 1,363 Options vested and exercisable as of March 31, 2024 450 $ 6.92 4.11 $ 1,363 Aggregate intrinsic value represents the difference between the Company’s fair value of its common stock and the exercise price of outstanding options. The aggregate intrinsic value of stock options exercised was nominal during the three months ended March 31, 2024 and $1.1 million during the three months ended and March 31, 2023. As of March 31, 2024, unrecognized stock-based compensation expense related to outstanding unvested stock options that are expected to vest was $0.2 million, which is expected to be recognized over a weighted-average period of 1.25 years. Restricted Stock Awards Prior to becoming a public company, the Company granted RSAs to certain senior employees and consultants. The Company ceased granting RSAs after its initial public offering in July 2021. 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 during the three months ended March 31, 2024 and 2023. During each of the three months ended March 31, 2024 and 2023, 12,500 RSAs vested and were released from the Company’s right to repurchase. During the three months ended March 31, 2024, no RSAs were cancelled. During the three months ended, March 31, 2023, 12,500 RSAs were cancelled. As of March 31, 2024, the Company had $1.4 million of unrecognized stock-based compensation related to RSAs with a weighted average remaining requisite service period was 1.75 years. Restricted Stock Units and Performance-Based Restricted Stock Units The fair value of RSUs and PSUs 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 one year, three years or four years, subject to the continuous service of the individual. In February 2024 and 2023, the Company granted PSUs for 0.4 million shares and 0.9 million shares of common stock, respectively. The PSUs vest on the satisfaction of both service-based and performance-based conditions. The PSUs have a one-year performance period based on revenue and Adjusted EBITDA targets as well as non-quantitative business-related performance criteria that will determine the total vestable shares. A fter the applicable performance period, one-third of the vestable shares will vest upon the Compensation Committee’s certification of the degree of achievement of the applicable goals, and the remaining vestable shares will vest over a two-year service period. During the three months ended March 31, 2024, it was determined that the Company partially met the performance goals for the PSUs granted in 2023, and accordingly, these PSUs will vest at approximately 60% attainment. As of March 31, 2024, 0.1 million of the PSUs granted in 2023 had vested or settled and 0.7 million of the PSUs granted in 2023 were cancelled. The following table summarizes the RSU and PSU activity under the 2021 Plan (in thousands, except for per share amounts): Number of Weighted-average fair value Aggregate Unvested and outstanding as of December 31, 2023 2,538 $ 14.56 $ 19,264 Granted 3,876 7.86 — Vested (380) 12.36 — Forfeited and cancelled (824) 10.08 — Unvested and outstanding as of March 31, 2024 5,210 $ 10.47 $ 42,361 At March 31, 2024, there was an estimated $48.4 million of total unrecognized stock-based compensation expense related to RSUs and PSUs. The weighted average remaining requisite service period was 2.45 years. CEO Performance Award On May 20, 2022, the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) approved a grant to Kiwi Camara, the Company’s Co-Founder and who was then serving as Chief Executive Officer, for a 10-year CEO performance award (the “CEO Performance Award”), the vesting of which was tied solely to achieving stock price milestones (“Milestone Prices”), subject to the approval of the Company’s stockholders at the 2022 Annual Meeting of Stockholders. The CEO Performance Award consisted of a 10-year option to purchase an aggregate of 4,366,966 shares of the Company’s common stock, representing approximately 7.5% of the total outstanding shares of the Company’s common stock as of the grant date, and vested in six tranches. Each of the six tranches vested only if the Milestone Prices are met. The Milestone Prices were met when the average VWAP for any 90-calendar day period during the performance period was equal to or greater than such Milestone Price. “VWAP” means the quotient of (i) the sum of the Daily Total Dollar Volume for the designated period of trading days divided by (ii) the sum of the total trading volume of the Company’s common stock as reported on the primary U.S. exchange on which the Company’s common stock trades for the designated period of trading days, with trading days being the days on which the primary U.S. exchange on which the Company’s common stock trades is open for trading. “Daily Total Dollar Volume” means the product of (i) the closing sales price of the Company’s common stock on a given trading day multiplied by (ii) the corresponding day’s trading volume of the Company’s common stock, in each case as reported on the primary U.S. exchange on which the Company’s common stock trades. For the first tranche to vest, the Company must have achieved a Milestone Price of $150 per share, and the next five tranches would only vest if the Company achieved higher Milestone Prices that increase in $150 per share increments up to a final Milestone Price of $900 per share. The exercise price per share subject to the CEO Performance Award was $32.00, which was the greater of (i) the IPO Price ($32.00 per share) and (ii) the closing sales price of the Company’s common stock on the grant date. The grant date of May 25, 2022 was the date on which two full trading sessions elapsed after the filing of the preliminary proxy statement with the SEC. The CEO Performance Award was approved by the Company’s stockholders at the Annual Meeting held on July 12, 2022. Recognition of stock-based compensation expense of all the tranches commenced on the date of grant and was recognized ratably over the expected vesting period of each respective tranche. If the related Milestone Price was achieved earlier than its expected achievement period, then the stock-based compensation expense for that vesting tranche would have been accelerated and recorded in the period in which the associated Milestone Price is achieved. The Milestone Price requirement was considered a market condition under ASC 718. The Company estimated the grant date fair value of the CEO Performance Award using Monte Carlo simulations based on the key assumptions for estimating the fair value of the award at the date of grant including volatility of the Company’s common stock price, post-vesting exercise behavior and the derived service period. On September 10, 2023, Mr. Camara resigned from his position as Chief Executive Officer and member of the Board of Directors, effective immediately. As no Milestone Prices were achieved as of September 10, 2023, the termination resulted in the cancellation of the CEO Performance Award. The Company previously recorded $7.7 million in stock-based compensation as of June 30, 2023. In accordance with ASC 718, the Company reversed the $7.7 million in previously recognized stock-based compensation expense in September 2023, which is the period the termination and cancellation occurred. No stock-based compensation expense was recorded related to the CEO Performance award for the three months March 31, 2024. Total stock-based compensation expense recorded as operating expense for the CEO Performance Award was $1.7 million for the three months ended March 31, 2023. Employee Stock Purchase Plan In June 2022, the Compensation Committee approved the terms of the Company’s offerings under its 2021 Employee Stock Purchase Plan (“ESPP”). Under the terms of the offering, the Company’s employees can elect to have up to 15% of their annual compensation, up to a maximum of $25,000 per year, withheld to purchase shares of the Company’s common stock for a purchase price equal to 85% of the lesser of the closing fair market value per share of the Company’s common stock on (i) the commencement date of the six-month offering period, or (ii) the respective purchase date. The initial offering period commenced on August 1, 2022 and ended on January 31, 2023 with subsequent six-month offering periods commencing on February 1 st and August 1 st of each year. The Company recognized $0.1 million of stock-based compensation expense for the ESPP and purchased and distributed 0.1 million shares of the Company’s common stock during the three months ended March 31, 2024. The Company recognized $0.2 million of stock-based compensation expense for the ESPP and purchased and distributed 0.1 million shares of the Company’s common stock during the three months ended March 31, 2023. Share Purchase Program |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s income tax expense was nominal for the three months ended March 31, 2024 and 2023. 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 (0.82)% and (0.20)% of the loss before income taxes for the three months ended March 31, 2024 and 2023, 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, 2024 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | Defined Contribution Plan The 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 $0.5 million and $0.7 million in employer contributions to the plan during the three months ended March 31, 2024 and 2023, respectively. The Company also engages in a required pension plan in the United Kingdom. As of March 31, 2024 and December 31, 2023, 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, 2024 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders The following table presents calculations for basic and diluted net loss per share (in thousands, except per share amounts): Three Months Ended 2024 2023 Net loss applicable to common stockholders basic and diluted $ (10,582) $ (20,365) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 61,188 59,410 Net loss per share attributable to common stockholders, basic and diluted $ (0.17) $ (0.34) 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, 2024 2023 Stock options 476 1,011 Unvested restricted stock awards 88 138 Unvested restricted stock units, including performance-based restricted stock units 5,210 4,849 Total 5,774 5,998 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 9, 2024, the Board of Directors appointed Eric Friedrichsen as the Company's President, Chief Executive Officer and principal executive officer, effective April 29, 2024 (the "Start Date"). In connection with Mr. Friedrichsen's appointment, he was also appointed to serve as a member of the Board of Directors as a Class I director for a term expiring at the Company's 2025 Annual Meeting of Stockholders, with such appointment taking effect as of the Start Date. Scott Hill, the Company's existing Chief Executive Officer, will remain as an employee of the Company on an interim basis from the Start Date until May 11, 2024. Following the conclusion of his employment, Mr. Hill will serve as the Chair of the Board of Directors. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net loss | $ (10,582) | $ (20,365) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | During the three months ended March 31, 2024, the Company’s directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted written plans intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c) for the sale of the Company’s securities as set forth in the table below. Name Position Adoption Date Total Shares of Common Stock to be Sold (1) Expiration Date Melanie Antoon Executive Vice President, Chief Customer Officer March 15, 2024 77,417 March 11, 2025 (1) Includes (i) 53,530 shares of common stock held by Ms. Antoon, and (ii) up to 23,887 shares subject to PSUs and RSUs previously granted to Ms. Antoon that may vest and be released to Ms. Antoon on or prior to February 16, 2025. The actual number of shares underlying such PSUs and RSUs that will be released to Ms. Antoon and sold under the Rule 10b5-1 trading arrangement will be net of the number of shares withheld to satisfy tax withholding obligations arising from the vesting of such shares and is not determinable at this time. |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Melanie Antoon [Member] | |
Trading Arrangements, by Individual | |
Name | Melanie Antoon |
Title | Executive Vice President, Chief Customer Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | March 15, 2024 |
Arrangement Duration | 361 days |
Aggregate Available | 77,417 |
Melanie Antoon Trading Arrangement, Common Stock [Member] | Melanie Antoon [Member] | |
Trading Arrangements, by Individual | |
Aggregate Available | 53,530 |
Melanie Antoon Trading Arrangement, Shares Subject to PSUs and RSUs [Member] | Melanie Antoon [Member] | |
Trading Arrangements, by Individual | |
Aggregate Available | 23,887 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Consolidation |
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 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 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 software development costs, useful lives of assets, fair value of acquired intangible assets, 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 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, and performance-based restricted stock units. 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 | 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 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 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. |
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, 2024 and December 31, 2023. |
Property and Equipment, Net | Property and Equipment, Net |
Capitalized Software Development Costs | Capitalized Software Development Costs Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements or related to the development of product offerings 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 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, net 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 acquisition of legal workflow products from Congruity360, LLC (“Congruity”) discussed in Note 7, “Acquisitions and Goodwill,” and Note 8 “Intangible Assets,” 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. |
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 in the condensed consolidated balance sheets. Finance lease assets are included in property and equipment, net, and finance lease liabilities are presented in current and long-term liabilities on the 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 liabilities. 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 | Impairment of Long-Lived Assets |
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 | Advertising The Company expenses advertising costs as incurred. Advertising expenses were $1.2 million and $0.8 million for the three months ended March 31, 2024 and 2023, respectively. These costs are included in sales and marketing expenses in the 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 product offerings. Cost of revenue also includes outsourced staffing costs, amortization of capitalized software development and personnel costs from employees involved in the delivery of the Company’s product offerings. Personnel costs include salaries, benefits, bonuses, stock-based compensation and allocated overhead costs. |
Research and Development | 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 product offerings and software services dedicated for use by the Company’s research and development organization. |
Sales and Marketing | 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 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. 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. 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. |
Sales Taxes | Sales Taxes The Company recognizes sales and other taxes collected from customers and subsequently remits the taxes 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 | Contingent Consideration On February 22, 2022, the Company acquired legal workflow products from 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 a remaining period of 2.81 years. As of March 31, 2024, the Company has paid $1.2 million of contingent consideration. As of March 31, 2024, the estimated fair value of the contingent consideration utilizing a probability weighted scenario analysis model under the scenario-based method was $0.5 million with a remaining period of 0.71 years. The balance of this contingent consideration is recorded in accrued expenses o n the condensed consolidated balance sheet. |
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. |
Accounting Pronouncements Recently Adopted | Accounting Pronouncements Recently Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) (“ASU No. 2023-07”), which intends to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the effect of this new guidance on the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) (“ASU No. 2023-09), which requires public entities to disclose on an annual basis (1) specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. The amendments in this ASU are effective for public business entities for annual periods beginning after December 15, 2024, and should be applied prospectively. Early adoption of the amendments is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the effect of this new guidance on the consolidated financial statements. |
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 product offerings are transferred to customers. The Company recognizes revenue through the following five-step framework in accordance with ASC 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 contracts. Usage-based contracts include fees based on usage of the Company’s platform or professional services, incurred on a time and materials basis, while subscription contracts 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 platform. Customers are not entitled to any refunds. 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, 2024 | |
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 $ 5,871 $ 5,698 Capitalized software development 11,756 11,047 Leasehold improvements 1,047 1,029 Furniture 1,203 1,203 Total property and equipment 19,877 18,977 Less: accumulated depreciation and amortization (10,359) (9,314) Property and equipment, net $ 9,518 $ 9,663 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table sets forth revenue by groups of similar offerings (in thousands): Three Months Ended March 31, 2024 2023 Software $ 29,909 $ 27,560 Services 5,662 5,569 Total revenue $ 35,571 $ 33,129 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 March 31, 2024 2023 United States $ 32,353 $ 30,611 All other countries 3,218 2,518 Total revenue $ 35,571 $ 33,129 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 $ 5,871 $ 5,698 Capitalized software development 11,756 11,047 Leasehold improvements 1,047 1,029 Furniture 1,203 1,203 Total property and equipment 19,877 18,977 Less: accumulated depreciation and amortization (10,359) (9,314) Property and equipment, net $ 9,518 $ 9,663 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Schedule of Future Minimum Payments, Operating Lease | Future minimum payments required under operating and financing leases, by year and in aggregate, that have initial or remaining non-cancellable lease terms in excess of one year, are as follows (in thousands): As of Operating Finance Remainder of 2024 $ 1,848 $ 35 2025 2,098 47 2026 2,162 47 2027 2,229 47 2028 1,333 28 Thereafter — — Total lease payments $ 9,670 $ 204 |
Schedule of Future Minimum Payments, Finance Lease | Future minimum payments required under operating and financing leases, by year and in aggregate, that have initial or remaining non-cancellable lease terms in excess of one year, are as follows (in thousands): As of Operating Finance Remainder of 2024 $ 1,848 $ 35 2025 2,098 47 2026 2,162 47 2027 2,229 47 2028 1,333 28 Thereafter — — Total lease payments $ 9,670 $ 204 |
Acquisitions and Goodwill (Tabl
Acquisitions and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 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 (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Acquired Other Intangible Assets | Other intangible assets, net consisted of the following (in thousands): March 31, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortization Period Developed technology $ 900 $ (380) $ 520 5 years Customer relationships 300 (210) 90 3 years Total $ 1,200 $ (590) $ 610 |
Schedule of Future Amortization Expense | As of March 31, 2024, future amortization expense by year is expected to be as follows (in thousands): Amount 2024 $ 209 2025 195 2026 180 2027 26 Thereafter — Total $ 610 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2023 524 $ 7.47 4.49 $ 1,383 Granted — — Exercised (8) 1.18 Forfeited and cancelled (40) 8.02 Options outstanding as of March 31, 2024 476 $ 7.53 4.27 $ 1,363 Options vested and exercisable as of March 31, 2024 450 $ 6.92 4.11 $ 1,363 |
Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity | The following table summarizes the RSU and PSU activity under the 2021 Plan (in thousands, except for per share amounts): Number of Weighted-average fair value Aggregate Unvested and outstanding as of December 31, 2023 2,538 $ 14.56 $ 19,264 Granted 3,876 7.86 — Vested (380) 12.36 — Forfeited and cancelled (824) 10.08 — Unvested and outstanding as of March 31, 2024 5,210 $ 10.47 $ 42,361 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share, Basic and Diluted | The following table presents calculations for basic and diluted net loss per share (in thousands, except per share amounts): Three Months Ended 2024 2023 Net loss applicable to common stockholders basic and diluted $ (10,582) $ (20,365) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 61,188 59,410 Net loss per share attributable to common stockholders, basic and diluted $ (0.17) $ (0.34) |
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, 2024 2023 Stock options 476 1,011 Unvested restricted stock awards 88 138 Unvested restricted stock units, including performance-based restricted stock units 5,210 4,849 Total 5,774 5,998 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | |||
Mar. 31, 2024 USD ($) segment | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Feb. 22, 2022 USD ($) | |
Income Tax Contingency [Line Items] | ||||
Credit loss provision | $ 800,000 | |||
Credit loss, write-off | 600,000 | |||
Credit loss, recovery | 300,000 | |||
Allowance for credit loss | 2,700,000 | $ 2,800,000 | ||
Unbilled receivables, current | $ 2,900,000 | $ 2,800,000 | ||
Number of reportable segments | segment | 1 | |||
Advertising expense | $ 1,200,000 | $ 800,000 | ||
Unrecognized tax benefits, penalties and interest recognized | 0 | 0 | ||
Unrecognized tax benefits, penalties and interest accrued | $ 0 | $ 0 | ||
Performance Shares | ||||
Income Tax Contingency [Line Items] | ||||
Percentage of awards vesting each year | 60% | |||
Tranche One | Performance Shares | ||||
Income Tax Contingency [Line Items] | ||||
Percentage of awards vesting each year | 33.33% | |||
Congruity360, LLC | ||||
Income Tax Contingency [Line Items] | ||||
Contingent consideration | $ 2,000,000 | |||
Contingent consideration, liability, term | 8 months 15 days | 2 years 9 months 21 days | ||
Business combination, contingent consideration paid | $ 1,200,000 | |||
Congruity360, LLC | Fair Value | ||||
Income Tax Contingency [Line Items] | ||||
Contingent consideration | $ 500,000 | |||
Capitalized software development | ||||
Income Tax Contingency [Line Items] | ||||
Property, plant and equipment, useful life | 4 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property and Equipment Useful Life (Details) | Mar. 31, 2024 |
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 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Deferred revenue | $ 4,300 | $ 4,100 | ||
Deferred revenue recognized | $ 2,300 | $ 2,100 | ||
Current deferred revenue | 3,501 | $ 4,285 | ||
Remaining performance obligation | 21,200 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Remaining performance obligation | $ 10,800 | |||
Remaining performance obligation, expected timing of satisfaction | 12 months | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Remaining performance obligation, expected timing of satisfaction | ||||
Revenue Benchmark | Product Concentration Risk | Usage Based Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 89% | 88% | ||
Revenue Benchmark | Product Concentration Risk | Subscription Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 11% | 12% |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue by Product (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 35,571 | $ 33,129 |
Software | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 29,909 | 27,560 |
Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 5,662 | $ 5,569 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Disaggregation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 35,571 | $ 33,129 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 32,353 | 30,611 |
All other countries | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 3,218 | $ 2,518 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 19,877 | $ 18,977 |
Less: accumulated depreciation and amortization | (10,359) | (9,314) |
Property and equipment, net | 9,518 | 9,663 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 5,871 | 5,698 |
Capitalized software development | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 11,756 | 11,047 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,047 | 1,029 |
Furniture | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 1,203 | $ 1,203 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 1 | $ 0.9 |
Leases - Future Payments, Opera
Leases - Future Payments, Operating and Financing Leases (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Operating Leases | |
Remainder of 2024 | $ 1,848 |
2025 | 2,098 |
2026 | 2,162 |
2027 | 2,229 |
2028 | 1,333 |
Thereafter | 0 |
Total lease payments | 9,670 |
Finance Leases | |
Remainder of 2024 | 35 |
2025 | 47 |
2026 | 47 |
2027 | 47 |
2028 | 28 |
Thereafter | 0 |
Total lease payments | $ 204 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Mar. 31, 2024 |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease, remaining lease term | 4 years 2 months 19 days |
Finance lease, weighted average remaining lease term | 4 years 4 months 2 days |
Acquisitions and Goodwill - Con
Acquisitions and Goodwill - Congruity Acquisition (Details) - USD ($) $ in Thousands | Feb. 22, 2022 | Mar. 31, 2024 | Dec. 31, 2023 |
Developed technology | |||
Goodwill | $ 5,898 | $ 5,898 | |
Congruity360, LLC | |||
Developed technology | |||
Payments to acquire business | $ 6,100 | ||
Holdback funds | 800 | ||
Contingent consideration | 2,000 | ||
Business combination, contingent consideration paid | 1,200 | ||
Business acquisition, transaction costs | 100 | ||
Goodwill | $ 5,898 | ||
Congruity360, LLC | Fair Value | |||
Developed technology | |||
Contingent consideration | $ 500 |
Acquisitions and Goodwill - Ass
Acquisitions and Goodwill - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Feb. 22, 2022 |
Developed technology | |||
Goodwill | $ 5,898 | $ 5,898 | |
Congruity360, LLC | |||
Developed technology | |||
Net tangible assets (liabilities) | $ (395) | ||
Goodwill | 5,898 | ||
Total fair value of net assets acquired | 6,703 | ||
Congruity360, LLC | Developed technology | |||
Developed technology | |||
Intangible assets | 900 | ||
Congruity360, LLC | Customer relationships | |||
Developed technology | |||
Intangible assets | $ 300 |
Intangible Assets- Narrative (D
Intangible Assets- Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Aug. 17, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Primary law intangible asset, net | $ 14,000 | $ 14,000 | ||
Other intangible asset, amortization expense | $ 100 | $ 100 | ||
Licensing Agreements | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization period | 10 years | |||
Fastcase, Inc | Licensing Agreements | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Licensing agreement term | 5 years | |||
Primary law intangible asset, net | $ 14,000 | |||
Renewal period | 5 years | |||
Agreement notice period | 60 days | |||
Fastcase, Inc | Licensing Agreement One | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Renewal period | 1 year |
Intangible Assets - Acquired In
Intangible Assets - Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Developed technology | ||
Net Carrying Amount | $ 610 | $ 681 |
Congruity360, LLC | ||
Developed technology | ||
Gross Carrying Amount | 1,200 | |
Accumulated Amortization | (590) | |
Net Carrying Amount | 610 | |
Congruity360, LLC | Developed technology | ||
Developed technology | ||
Gross Carrying Amount | 900 | |
Accumulated Amortization | (380) | |
Net Carrying Amount | $ 520 | |
Amortization Period | 5 years | |
Congruity360, LLC | Customer relationships | ||
Developed technology | ||
Gross Carrying Amount | $ 300 | |
Accumulated Amortization | (210) | |
Net Carrying Amount | $ 90 | |
Amortization Period | 3 years |
Intangible Assets - Future Amor
Intangible Assets - Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 209 |
2025 | 195 |
2026 | 180 |
2027 | 26 |
Thereafter | 0 |
Total | $ 610 |
Restructuring Charges (Details)
Restructuring Charges (Details) - Employee Severance - USD ($) | 3 Months Ended | ||
Jan. 19, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Restructuring Cost and Reserve [Line Items] | |||
Percentage of workforce | 9% | ||
Restructuring charges | $ 0 | $ 1,000,000 |
Stockholders_ Equity - Narrativ
Stockholders’ Equity - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate intrinsic value of options exercised | $ 1,100,000 | |||
Unrecognized compensation costs | $ 200,000 | |||
Share Repurchase Programs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, authorized (in shares) | 20,000,000 | |||
Shares repurchased (in shares) | 300,000 | |||
Common stock, par value (in usd per share) | $ 7.89 | |||
Equity Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for future issuance (in shares) | 8,100,000 | |||
Stock-based compensation expense | $ 5,700,000 | $ 7,200,000 | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of options granted | 10 years | |||
Vesting period | 4 years | |||
Percentage of awards vesting each year | 25% | |||
Weighted-average expected recognition period | 1 year 3 months | |||
Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs | $ 1,400,000 | |||
Weighted-average expected recognition period | 1 year 9 months | |||
Grants in period (in shares) | 0 | 0 | ||
Awards vested and released from right to repurchase (in shares) | 12,500 | 12,500 | ||
Awards cancelled (in shares) | 0 | 12,500 | ||
Restricted Stock Units (RSUs) and Performance Shares (PSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average expected recognition period | 2 years 5 months 12 days | |||
Grants in period (in shares) | 3,876,000 | |||
Awards vested and released from right to repurchase (in shares) | 380,000 | |||
Unrecognized stock-based compensation | $ 48,400,000 | |||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Restricted Stock Units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Restricted Stock Units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 0 | $ 1,700,000 | ||
Percentage of awards vesting each year | 60% | |||
Grants in period (in shares) | 400,000 | 900,000 | ||
Awards vested and released from right to repurchase (in shares) | 100,000 | |||
Awards cancelled (in shares) | 700,000 | |||
Performance period | 1 year | |||
Requisite service period | 2 years |
Stockholders_ Equity - Schedule
Stockholders’ Equity - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Number of shares | ||
Options outstanding at beginning of period (in shares) | 524 | |
Options granted (in shares) | 0 | |
Options exercised (in shares) | (8) | |
Options forfeited and cancelled (in shares) | (40) | |
Options outstanding at end of period (in shares) | 476 | 524 |
Options vested and exercisable (in shares) | 450 | |
Weighted-average exercise price per share | ||
Weighted-average exercise price of options outstanding at beginning of period (in USD per share) | $ 7.47 | |
Weighted-average exercise price of options granted (in USD per share) | 0 | |
Weighted-average exercise price of options exercised (in USD per share) | 1.18 | |
Weighted-average exercise price of options forfeited and cancelled (in USD per share) | 8.02 | |
Weighted-average exercise price of options outstanding at end of period (in USD per share) | 7.53 | $ 7.47 |
Weighted-average exercise price of options vested and exercisable (in USD per share) | $ 6.92 | |
Weighted-average remaining contractual life of options outstanding (in years) | 4 years 3 months 7 days | 4 years 5 months 26 days |
Weighted-average remaining contractual life of options vested and exercisable (in years) | 4 years 1 month 9 days | |
Aggregate intrinsic value of options outstanding | $ 1,363 | $ 1,383 |
Aggregate intrinsic value of options vested and exercisable | $ 1,363 |
Stockholders_ Equity - Schedu_2
Stockholders’ Equity - Schedule of Restricted Stock Unity Activity (Details) - Restricted Stock Units (RSUs) and Performance Shares (PSUs) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Number of Shares | ||
Unvested and outstanding, beginning balance (in shares) | 2,538 | |
Granted (in shares) | 3,876 | |
Vested (in shares) | (380) | |
Forfeited and cancelled (in shares) | (824) | |
Unvested and outstanding, ending balance (in shares) | 5,210 | |
Weighted-average fair value | ||
Unvested and outstanding, beginning balance (in dollars per share) | $ 14.56 | |
Granted (in dollars per share) | 7.86 | |
Vested (in dollars per share) | 12.36 | |
Forfeited and cancelled (in dollars per share) | 10.08 | |
Unvested and outstanding, ending balance (in dollars per share) | $ 10.47 | |
Aggregate intrinsic value | ||
Unvested and outstanding as of December 31, 2023 | $ 42,361 | $ 19,264 |
Unvested and outstanding as of March 31, 2024 | $ 42,361 |
Stockholders_ Equity - CEO Perf
Stockholders’ Equity - CEO Performance Award (Details) | 1 Months Ended | 3 Months Ended | 13 Months Ended | |||
May 20, 2022 tranche $ / shares shares | Sep. 30, 2023 USD ($) | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jul. 21, 2021 $ / shares | |
Common stock | IPO | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Public offering price per share (in dollars per share) | $ 32 | |||||
CEO Performance Award | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ | $ 0 | $ 1,700,000 | ||||
CEO Performance Award | CEO Performance Award | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Option to purchase outstanding shares, period | 10 years | |||||
Term of options granted | 10 years | |||||
Option to purchase common shares (in shares) | shares | 4,366,966 | |||||
Option to purchase common shares, percent | 7.50% | |||||
Number of tranches | tranche | 6 | |||||
Milestone price VWAP threshold, period | 90 days | |||||
Share price (in dollars per share) | $ 32 | |||||
Stock-based compensation expense | $ | $ (7,700,000) | $ 7,700,000 | ||||
CEO Performance Award | CEO Performance Award | Tranche One | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting threshold, milestone price (in dollars per share) | 150 | |||||
CEO Performance Award | CEO Performance Award | Tranche Two Through Six | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting threshold, incremental increase in milestone price (in dollars per share) | 150 | |||||
CEO Performance Award | CEO Performance Award | Tranche Six | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting threshold, milestone price (in dollars per share) | $ 900 | |||||
Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ | $ 100,000 | $ 200,000 |
Stockholders_ Equity - Employee
Stockholders’ Equity - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - USD ($) shares in Millions | 1 Months Ended | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum contribution rate | 15% | ||
Maximum contribution amount | $ 25,000 | ||
Purchase price of common stock, percent | 85% | ||
ESPP purchase period | 6 months | ||
Stock-based compensation expense | $ 100,000 | $ 200,000 | |
Issuance of common stock under ESPP (in shares) | 0.1 | 0.1 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate reconciliation, percent | (0.82%) | (0.20%) |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Retirement Benefits [Abstract] | ||
Employer contributions | $ 0.5 | $ 0.7 |
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, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Net loss applicable to common stockholders basic | $ (10,582) | $ (20,365) |
Net loss applicable to common stockholders, diluted | $ (10,582) | $ (20,365) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 61,188 | 59,410 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 61,188 | 59,410 |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.17) | $ (0.34) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.17) | $ (0.34) |
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, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,774 | 5,998 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 476 | 1,011 |
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) | 88 | 138 |
Unvested restricted stock units, including performance-based 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) | 5,210 | 4,849 |