Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | SAIL | |
Entity Registrant Name | SailPoint Technologies Holdings, Inc. | |
Entity Central Index Key | 0001627857 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 89,211,098 | |
Entity File Number | 001-38297 | |
Entity Tax Identification Number | 47-1628077 | |
Entity Address, Address Line One | 11120 Four Points Drive | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78726 | |
City Area Code | 512 | |
Local Phone Number | 346-2000 | |
Entity Incorporation, State or Country Code | DE | |
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Security Exchange Name | NYSE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 464,332 | $ 70,964 |
Restricted cash | 6,317 | 6,272 |
Accounts receivable | 73,671 | 101,469 |
Prepayments and other current assets | 25,932 | 21,850 |
Income tax receivable | 2,465 | |
Total current assets | 572,717 | 200,555 |
Property and equipment, net | 21,616 | 19,268 |
Right-of-use assets | 30,321 | |
Other non-current assets | 23,389 | 20,374 |
Goodwill | 219,377 | 219,377 |
Intangible assets, net | 67,867 | 74,860 |
Total assets | 935,287 | 534,434 |
Current liabilities | ||
Accounts payable | 2,632 | 4,636 |
Accrued expenses and other liabilities | 28,937 | 21,731 |
Income taxes payable | 2,143 | |
Deferred revenue | 103,317 | 95,919 |
Total current liabilities | 134,886 | 124,429 |
Deferred tax liability - non-current | 16,073 | 4,142 |
Convertible senior notes, net | 304,777 | |
Long-term operating lease liabilities | 37,889 | 9,788 |
Deferred revenue - non-current | 20,521 | 18,382 |
Total liabilities | 514,146 | 156,741 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity | ||
Common stock, $0.0001 par value, authorized 300,000 shares, issued and outstanding 89,196 shares at September 30, 2019 and 87,512 shares at December 31, 2018 | 9 | 9 |
Preferred stock, $0.0001 par value, authorized 10,000 shares, no shares issued and outstanding at September 30, 2019 and December 31, 2018 | ||
Additional paid in capital | 434,840 | 377,473 |
(Accumulated deficit) retained earnings | (13,708) | 211 |
Total stockholders' equity | 421,141 | 377,693 |
Total liabilities and stockholders’ equity | $ 935,287 | $ 534,434 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 89,196,000 | 87,512,000 |
Common stock, shares outstanding | 89,196,000 | 87,512,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | ||||
Total revenue | $ 75,879 | $ 65,735 | $ 199,516 | $ 168,332 |
Cost of revenue | ||||
Total cost of revenue | 16,930 | 14,014 | 47,508 | 40,160 |
Gross profit | 58,949 | 51,721 | 152,008 | 128,172 |
Operating expenses | ||||
Research and development | 14,148 | 11,474 | 40,318 | 31,351 |
General and administrative | 10,192 | 8,763 | 27,819 | 24,163 |
Sales and marketing | 33,274 | 26,701 | 99,298 | 72,934 |
Total operating expenses | 57,614 | 46,938 | 167,435 | 128,448 |
Income (loss) from operations | 1,335 | 4,783 | (15,427) | (276) |
Other expense, net: | ||||
Interest income (expense), net | 10 | (202) | 282 | (4,180) |
Other, net | (295) | (388) | (1,018) | (1,104) |
Total other expense, net | (285) | (590) | (736) | (5,284) |
Income (loss) before income taxes | 1,050 | 4,193 | (16,163) | (5,560) |
Income tax (expense) benefit | 2,618 | (2,385) | 2,244 | 4,087 |
Net income (loss) | 3,668 | 1,808 | (13,919) | (1,473) |
Net income (loss) available to common stockholders | $ 3,668 | $ 1,793 | $ (13,919) | $ (1,473) |
Net income (loss) per share | ||||
Basic | $ 0.04 | $ 0.02 | $ (0.16) | $ (0.02) |
Diluted | $ 0.04 | $ 0.02 | $ (0.16) | $ (0.02) |
Weighted average shares outstanding | ||||
Basic | 89,143 | 86,825 | 88,739 | 86,268 |
Diluted | 90,808 | 90,355 | 88,739 | 86,268 |
Licenses | ||||
Revenue | ||||
Total revenue | $ 26,825 | $ 28,023 | $ 64,827 | $ 64,451 |
Cost of revenue | ||||
Total cost of revenue | 1,083 | 1,145 | 3,157 | 3,543 |
Subscription | ||||
Revenue | ||||
Total revenue | 37,383 | 27,916 | 102,929 | 74,531 |
Cost of revenue | ||||
Total cost of revenue | 6,862 | 5,252 | 18,990 | 14,829 |
Service and other | ||||
Revenue | ||||
Total revenue | 11,671 | 9,796 | 31,760 | 29,350 |
Cost of revenue | ||||
Total cost of revenue | $ 8,985 | $ 7,617 | $ 25,361 | $ 21,788 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) |
Stockholders' Equity Balance at Dec. 31, 2017 | $ 328,397 | $ 8 | $ 353,609 | $ (25,220) |
Stockholders' Equity Balance, shares at Dec. 31, 2017 | 84,948 | |||
Exercise of stock options | 1,257 | 1,257 | ||
Exercise of stock options, shares | 517 | |||
Restricted stock units vested, net of tax settlement, shares | 54 | |||
Stock-based compensation expense | 14,138 | 14,138 | ||
Incentive units vested | 76 | $ 1 | 75 | |
Incentive units vested, shares | 1,486 | |||
Net Income (loss) | (1,473) | (1,473) | ||
Stockholders' Equity Balance at Sep. 30, 2018 | 364,156 | $ 9 | 369,079 | (4,932) |
Stockholders' Equity Balance, shares at Sep. 30, 2018 | 87,005 | |||
Stockholders' Equity Balance at Jun. 30, 2018 | 357,086 | $ 9 | 363,817 | (6,740) |
Stockholders' Equity Balance, shares at Jun. 30, 2018 | 86,596 | |||
Exercise of stock options | 364 | 364 | ||
Exercise of stock options, shares | 152 | |||
Restricted stock units vested, net of tax settlement, shares | 3 | |||
Stock-based compensation expense | 4,883 | 4,883 | ||
Incentive units vested | 15 | 15 | ||
Incentive units vested, shares | 254 | |||
Net Income (loss) | 1,808 | 1,808 | ||
Stockholders' Equity Balance at Sep. 30, 2018 | 364,156 | $ 9 | 369,079 | (4,932) |
Stockholders' Equity Balance, shares at Sep. 30, 2018 | 87,005 | |||
Cumulative effect adjustment from the adoption of ASC 606 | Accounting Standards Update 2014-09 | 21,761 | 21,761 | ||
Stockholders' Equity Balance at Dec. 31, 2018 | 377,693 | $ 9 | 377,473 | 211 |
Stockholders' Equity Balance, shares at Dec. 31, 2018 | 87,512 | |||
Exercise of stock options | 2,560 | 2,560 | ||
Exercise of stock options, shares | 618 | |||
Restricted stock units vested, net of tax settlement, shares | 140 | |||
Stock-based compensation expense | 14,098 | 14,098 | ||
Incentive units vested | 37 | 37 | ||
Incentive units vested, shares | 724 | |||
Common stock issued under employee stock plan | 2,926 | 2,926 | ||
Common stock issued under employee stock plan, net, shares | 202 | |||
Equity component of convertible senior notes, net of issuance costs | 86,764 | 86,764 | ||
Purchase of capped calls | (37,080) | (37,080) | ||
Deferred tax liability related to issuance of convertible senior notes and capped calls | (11,938) | (11,938) | ||
Net Income (loss) | (13,919) | (13,919) | ||
Stockholders' Equity Balance at Sep. 30, 2019 | 421,141 | $ 9 | 434,840 | (13,708) |
Stockholders' Equity Balance, shares at Sep. 30, 2019 | 89,196 | |||
Stockholders' Equity Balance at Jun. 30, 2019 | 374,474 | $ 9 | 391,841 | (17,376) |
Stockholders' Equity Balance, shares at Jun. 30, 2019 | 89,050 | |||
Exercise of stock options | 764 | 764 | ||
Exercise of stock options, shares | 130 | |||
Restricted stock units vested, net of tax settlement, shares | 16 | |||
Stock-based compensation expense | 4,489 | 4,489 | ||
Equity component of convertible senior notes, net of issuance costs | 86,764 | 86,764 | ||
Purchase of capped calls | (37,080) | (37,080) | ||
Deferred tax liability related to issuance of convertible senior notes and capped calls | (11,938) | (11,938) | ||
Net Income (loss) | 3,668 | 3,668 | ||
Stockholders' Equity Balance at Sep. 30, 2019 | $ 421,141 | $ 9 | $ 434,840 | $ (13,708) |
Stockholders' Equity Balance, shares at Sep. 30, 2019 | 89,196 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net Income (loss) | $ (13,919) | $ (1,473) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization expense | 10,562 | 7,977 |
Amortization of debt discount and issuance costs | 376 | 220 |
Amortization of contract acquisition costs | 7,346 | 5,556 |
Loss on modification and partial extinguishment of debt | 1,536 | |
Loss (gain) on disposal of fixed assets | 17 | (36) |
Bad debt expense | 183 | 299 |
Stock-based compensation expense | 14,098 | 14,138 |
Operating leases, net | 301 | |
Deferred taxes | (7) | |
Net changes in operating assets and liabilities | ||
Accounts receivable | 27,615 | 1,487 |
Prepayments and other current assets | (11,430) | (8,140) |
Other non-current assets | (2,279) | (1,567) |
Accounts payable | (2,004) | 805 |
Accrued expenses and other liabilities | 3,866 | (5,155) |
Income taxes | (4,608) | (5,087) |
Deferred revenue | 9,537 | 19,798 |
Net cash provided by operating activities | 39,654 | 30,358 |
Investing activities | ||
Purchase of property and equipment | (5,096) | (4,030) |
Proceeds from sale of property and equipment | 21 | 25 |
Net cash used in investing activities | (5,075) | (4,005) |
Financing activities | ||
Payment of debt issuance costs | (9,572) | |
Proceeds from issuance of convertible senior notes | 400,000 | |
Purchases of capped calls | (37,080) | |
Repayment of debt | (60,000) | |
Prepayment penalty and fees | (300) | |
Repurchase of equity shares | (1) | |
Proceeds from employee stock purchase plan contributions | 2,926 | |
Exercise of stock options | 2,560 | 1,257 |
Net cash provided by (used in) financing activities | 358,834 | (59,044) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 393,413 | (32,691) |
Cash, cash equivalents and restricted cash, beginning of period | 77,236 | 116,127 |
Cash, cash equivalents and restricted cash, end of period | $ 470,649 | $ 83,436 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business SailPoint Technologies Holdings, Inc. (“we,” “our,” “the Company” or “SailPoint”) was incorporated in the state of Delaware on August 8, 2014, in preparation for the purchase of SailPoint Technologies, Inc. The purchase occurred on September 8, 2014 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with Article 10 of Regulation S-X, “Interim Financial Statements” and the rules and regulations for Form 10-Q of the Securities and Exchange Commission (the “SEC”). Pursuant to those rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the balance sheets, statements of operations, statements of stockholders’ equity and the statements of cash flows for the interim periods but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2019 or any future period. Our unaudited condensed consolidated financial statements have been prepared in a manner consistent with the accounting principles described in our Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on March 18, 2019 (the “Annual Report”). These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management periodically evaluates such estimates and assumptions for continued reasonableness. In particular, we make estimates with respect to the fair value allocation of multiple performance obligation in revenue recognition, the collectability of accounts receivable, valuation of long-lived assets, fair value of the liability and equity components of the Notes (as defined below), stock-based compensation expense and income taxes. Appropriate adjustments, if any, to the estimates used are made prospectively based upon periodic evaluation. Actual results could differ from those estimates. Cash, Cash Equivalents and Restricted Cash We consider all highly liquid investments with an original maturity of three months or less from date of purchase to be cash equivalents. The Company is required to maintain a small amount of restricted cash to guarantee rent payments in a foreign subsidiary as well as $6.0 million of cash collateral for an unconditional standby letter of credit related to the Company’s corporate headquarters lease. As of September 30, 2019 December 31, 2018 (In thousands) Cash and cash equivalents per balance sheet $ 464,332 $ 70,964 Restricted cash per balance sheet 6,317 6,272 Cash, cash equivalents and restricted cash per cash flow $ 470,649 $ 77,236 Segment Information and Concentration of Credit and Other Risks Segment Information The Company operates as one operating segment. The Company’s chief operating decision makers review financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision makers in deciding how to allocate resources and in assessing performance. The Company manages its business on the basis of one reportable segment, and derives revenues from licensing of software, subscription and renewals, sale of professional services, maintenance and technical support. The following table sets forth the Company’s consolidated revenue by geography: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (In thousands) United States $ 56,071 $ 45,693 $ 142,030 $ 112,008 EMEA (1) 12,499 11,754 38,768 36,305 Rest of the World (1) 7,309 8,288 18,718 20,019 Total revenue $ 75,879 $ 65,735 $ 199,516 $ 168,332 (1) No single country represented more than 10% Concentration of Credit Risk and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. As of September 30, 2019, no single entity represented more than 10% of the balance in accounts receivable. As of December 31, 2018, 11%, of the Company’s accounts receivable was from one customer. Management considers concentration of credit risk to be minimal with respect to accounts receivable due to the positive historical collection experience of the Company despite the geographic concentrations related to the Company’s customers. No single customer represented more than 10% of revenue for the three and nine months ended September 30, 2019 and 2018. The Company does not experience concentration of credit risk in foreign countries as no single foreign country represents more than 10% of the Company’s consolidated revenues or net assets. Significant Accounting Policies The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes in the Annual Report, most notably Note 2 “Summary of Significant Accounting Policies”. In 2019, the Company adopted Accounting Standards Update 2016-02, “ Leases Note 5 “Commitments and Contingencies” below. Services and Other Revenues As previously disclosed in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which was filed with the SEC on August 6, 2019 (the “Second Quarter Quarterly Report”), while there are no changes to the accounting policy the Company provides the following additional clarification regarding the revenue for fixed price services and prepaids that are recognized over time using input methods to estimate progress to completion. For services that are contracted for at a fixed price, progress is generally measured based on hours incurred as a percentage of the total estimated hours required for complete satisfaction of the related performance obligations. For services that are contracted on a time and materials or prepaid basis, progress is generally based on actual hours expended. These input methods (e.g. hours incurred or expended) are considered a faithful depiction of our efforts to satisfy services contracts as they represent the performance obligation consumed by the customer and performed by the entity and therefore reflect the transfer of services to a customer under such contracts. Deferred Contract Acquisition Costs As previously disclosed in the Second Quarter Quarterly Report, while there are no changes to the accounting policy the Company provides the following additional clarification regarding the incremental costs of obtaining a contract, such as deferred sales commission costs, in particular upon contract renewals. The Company typically pays sales commissions for both initial and follow-on sales of perpetual licenses, inclusive of initial maintenance, term licenses and subscription offerings. Initial commissions are allocated to each performance obligation within the contract. The portion allocated to the perpetual license element is expensed at the time the license is delivered. Commissions allocated to the remaining elements are capitalized and amortized over an expected period of benefit. The Company has determined the expected period of benefit to be approximately five years. In addition, the Company pays sales commissions for renewals of term licenses and subscription offerings at a lower rate, which is therefore not commensurate with commissions paid on an initial sale. These renewal commissions are amortized over each renewal’s contractual term. The Company does not pay sales commissions on renewals of maintenance agreements related to perpetual licenses. Recently Issued Accounting Standards Not Yet Adopted In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments—Credit Losses (Topic 326). Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02 and subsequent updates thereafter in ASU 2017-13, ASU 2018-10 and ASU 2018-11, Leases On January 1, 2019, we adopted ASC 842 using the modified retrospective transition method The adoption of the new standard represents a change in accounting principle with the intent to increase transparency and comparability among organizations by requiring the recognition of ROU assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We ha ve made an accounting policy election not to recognize ROU assets and lease liabilities that arise from short-term leases for any class of underlying asset. The standard did not have a material impact on our condensed consolidated statements of operations or statements of cash flows. However, upon adoption of ASC 842 the opening impact on our condensed consolidated balance sheets was not material, but it resulted in recording ROU assets and an increase in total lease liabilities of $3.5 million In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (ASC 718): Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07) |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 3. Revenue Recognition ASC 606 Adoption and Impact to Previously Reported Results During the year ended December 31, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers (ASC 606) Disaggregation of Revenue The Company’s revenue by geographic region based on the customer’s location is presented in Note 2 “Summary of Significant Accounting Policies” above. The following table presents the Company’s revenue by timing of revenue recognition to understand the risks of timing of transfer of control: Three Months Ended September 30, 2019 Three Months Ended September 30, 2018 Services Services License Subscription and other License Subscription and other (in thousands) Timing of revenue recognition Revenue recognized at a point in time $ 26,825 $ — $ — $ 28,023 $ — $ — Revenue recognized over time — 37,383 11,671 — 27,916 9,796 Total revenue $ 26,825 $ 37,383 $ 11,671 $ 28,023 $ 27,916 $ 9,796 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Services Services License Subscription and other License Subscription and other (in thousands) Timing of revenue recognition Revenue recognized at a point in time $ 64,827 $ — $ — $ 64,451 $ — $ — Revenue recognized over time — 102,929 31,760 — 74,531 29,350 Total revenue $ 64,827 $ 102,929 $ 31,760 $ 64,451 $ 74,531 $ 29,350 Contract Balances A summary of the activity impacting our contract balances during the nine months ended September 30, 2019 is presented below (in thousands): Contract acquisition costs Balances at December 31, 2018 $ 28,043 Additional deferred contract acquisition costs 9,700 Amortization of deferred contract acquisition costs (7,346 ) Balances at September 30, 2019 $ 30,397 Deferred revenue (current) Deferred revenue (non-current) Balances at December 31, 2018 $ 95,919 $ 18,382 Increase, net 7,398 2,139 Balances at September 30, 2019 $ 103,317 $ 20,521 Deferred revenue, which is a contract liability, consists primarily of payments received in advance of revenue recognition under the Company’s contracts with customers and is recognized as the revenue recognition criteria are met. During the three and nine months ended September 30, 2019, revenue recognized that was previously deferred was approximately $47.2 million and $94.4 million, respectively, compared to revenue recognized that was previously deferred of approximately $29.8 million and $62.6 million during the three months ended September 30, 2018 and the period from January 1, 2018, the date of ASC 606 adoption, to September 30, 2018, respectively. The difference between the opening and closing balances of the Company’s contract assets and deferred revenue primarily results from the timing difference between the Company’s performance and the customer billings. Contract assets primarily relate to unbilled amounts, which are netted with deferred revenue at contract level, and typically result from sales contracts when revenue recognized exceeds the amount billed to the customer, and the right to payment is subject to more than the passage of time. Contract assets are transferred to accounts receivable when the rights become unconditional and the customer is billed. Contract assets are included in prepayments and other current assets and other non-current assets in the condensed consolidated balance sheets. Remaining Performance Obligations Our contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date. These remaining performance obligations represent contract revenue that has not yet been recognized and is included in deferred revenue, the balance of which includes both invoices that have been issued to customers but have not been recognized as revenue and amounts that will be invoiced and recognized as revenue in future periods. As of September 30, 2019, amounts allocated to these additional performance obligations are $181.5 million, of which we expect to recognize $122.8 million as revenue over the next 12 months with the remaining balance recognized thereafter. Assets Recognized from the Costs to Obtain our Contracts with Customers As of September 30, 2019, and December 31, 2018, $9.7 million and $8.4 million, respectively, of our deferred contract acquisition costs are included in prepayments and other current assets as they are expected to be amortized within the next 12 months. The remaining amount of our deferred contract acquisition costs are included in other non-current assets. The balance of deferred contract acquisition costs, which primarily consists of cumulative capitalized costs to obtain contracts was $30.4 million and $28.0 million at September 30, 2019 and December 31, 2018, respectively. For the three and nine months ended September 30, 2019, amortization of deferred contract acquisition costs of $2.6 million and $7.3 million was recorded for the respective periods. For the three and nine months ended September 30, 2018, amortization of deferred contract acquisition costs of $2.2 million and $5.6 million was recorded for the respective periods. There were no material impairments of assets related to deferred contract acquisition costs during the periods ended September 30, 2019 and 2018. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 4. Intangible Assets Total cost and amortization of intangible assets are comprised of the following: As of Weighted Average Useful Life September 30, 2019 December 31, 2018 Intangible assets (In years) (In thousands) Customer lists 15 $ 42,500 $ 42,500 Developed technology 9.6 42,000 42,000 Trade names and trademarks 17 24,500 24,500 Order backlog 1.5 — 1,100 Other intangible assets 4.9 3,310 3,310 Total intangible assets 112,310 113,410 Less: Accumulated amortization (44,443 ) (38,550 ) Total intangible assets, net $ 67,867 $ 74,860 Amortization expense included in the condensed consolidated statements of operations for the periods ended September 30, 2019 and 2018 is as follows: Three Months Ended Nine Months Ended Amortization expense (in thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Cost of revenue - licenses $ 1,008 $ 1,008 $ 3,024 $ 3,024 Cost of revenue - subscription 96 96 288 288 Research and development 159 34 477 102 Sales and marketing 1,068 1,068 3,204 3,204 Total amortization of acquired intangibles $ 2,331 $ 2,206 $ 6,993 $ 6,618 Periodically, the Company evaluates intangible assets for possible impairment. There were no impairments of intangible assets during the periods ended September 30, 2019 and 2018. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Operating Leases Right-of-use (“ROU”) assets and lease liabilities are recognized at the present value of future lease payments over the lease term. As of September 30, 2019, our leases have remaining lease terms of less than one year to ten years. Certain leases include early termination and/or extension options; however, exercises of these options are at the Company’s sole discretion. As of September 30, 2019, the Company determined it is not reasonably certain it will exercise the options to extend its leases or terminate them early. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants and as of September 30, 2019, the Company is not subleasing to any third parties. The rates implicit in the Company’s leases are not readily determinable. Therefore, in order to value the Company’s lease liabilities, the Company uses an incremental borrowing rate which reflects the fixed rate at which the Company could borrow a similar amount in the same currency, for the same term, and with similar collateral as in the lease at the commencement date. The result of adoption of ASC 842 was an increase in ROU assets and total lease liabilities of $3.5 million on the Company’s condensed consolidated balance sheet. ASC 842 did not have a material impact on our condensed consolidated statements of operations and statements of cash flows. As of September 30, 2019, the Company measures its lease liabilities at the net present value of the remaining lease payments discounted at the weighted average discount rate of 4.12%. The Company's incremental borrowing rate is estimated to approximate the interest rate on similar terms and payments and in economic environments where the leased asset is located. The weighted average remaining term of the Company’s operating leases is 9.0 years. As of September 30, 2019, the total lease liabilities are $41.3 million, $3.4 million of which is included in accrued expenses and other current liabilities and $37.9 million is included as long-term operating lease liabilities on the condensed consolidated balance sheet. As of September 30, 2019, the ROU asset balance is $30.3 million. Operating lease costs during the periods presented were as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 (in thousands) Lease cost Operating lease cost $ 790 $ 3,577 Short-term lease cost 884 1,746 Total lease cost $ 1,674 $ 5,323 Facilities costs (including rent and utilities) are considered shared costs and are allocated to departments based on headcount. As such, allocated shared costs are reflected in each cost of revenue and operating expense category. Total rent expense recognized prior to our adoption of ASC 842 was approximately $1.0 million and $2.9 million for the three and nine months ended September 30, 2018, respectively. Other supplemental cash flow information related to operating leases is as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 (in millions) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1.2 $ 3.4 Right-of-use assets obtained in exchange for lease liabilities Operating leases $ — $ 30.4 At September 30, 2019, we have no financing leases and we have non-cancelable operating lease commitments, excluding variable consideration. The undiscounted annual future minimum lease payments are summarized by year in the table below: Year Ending December 31, (in thousands) 2019 (except the nine months ended September 30) $ 1,191 2020 4,975 2021 5,511 2022 5,478 2023 4,978 Thereafter 27,030 Total minimum lease payments 49,163 Less: interest (7,868 ) Total present value of operating lease liabilities $ 41,295 Less: operating lease liabilities - current $ (3,406 ) Long-term operating lease liabilities $ 37,889 |
Line of Credit and Long-Term De
Line of Credit and Long-Term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Line of Credit and Long-Term Debt | 6. Line of Credit and Long-Term Debt On March 11, 2019, SailPoint Technologies, Inc., as borrower, and certain of our other wholly owned subsidiaries entered into a credit agreement (as amended, restated, amended and restated, supplemented or otherwise modified from time to time through the date hereof, the “Credit Agreement”). The Credit Agreement is guaranteed by SailPoint Technologies Intermediate Holdings, LLC, a wholly owned subsidiary, and the Borrower’s material domestic subsidiaries (the “Guarantors” and, together with the Borrower, the “Loan Parties”) and is supported by a security interest in substantially all of the Loan Parties’ personal property and assets. In September 2019, the Company amended the Credit Agreement in connection with the issuance and sale of the Notes (as defined below). Such amendment included a decrease in the commitments for revolving credit loans from $150.0 million to $75.0 million with a $15.0 million letter of credit sublimit, which amount can be increased or decreased under certain circumstances and is subject to certain financial covenants. In addition, the Credit Agreement provides for the ability to incur uncommitted term loan facilities if, among other things, the Total Net Leverage Ratio (as defined in the Credit Agreement), calculated giving pro forma effect to the requested term loan facility, is no greater than 6.00 to 1.00 (amended from 3.50 to 1.00). Borrowings pursuant to the Credit Agreement may be used for working capital and other general corporate purposes, including acquisitions permitted under the Credit Agreement. The Credit Agreement contains certain customary representations and warranties and affirmative and negative covenants, including certain restrictions on the ability to create liens on properties or assets; merge, consolidate, or dissolve; make certain loans or investments, except under certain circumstances; sell or dispose of assets; enter into sale and leaseback transactions; pay dividends and other restricted payments; or enter into transactions with affiliates. The agreement has established priority for the lenders party over all assets of the Company. Borrowings under the Credit Agreement are scheduled to mature in March 2024. Any borrowing under the Credit Agreement may be repaid, in whole or in part, at any time and from time to time without premium or penalty other than customary breakage costs, and any amounts repaid may be reborrowed. No mandatory prepayments will be required other than when borrowings and letter of credit usage exceed the aggregate commitments of all lenders. Payment of the borrowings may be accelerated upon the occurrence of certain customary events of default specified in the Credit Agreement, which includes failure to make payments relating to the borrowings under the Credit Agreement when due, the material inaccuracy of representations or warranties, failures to perform certain affirmative covenants, failures to refrain from actions or omissions prohibited by negative covenants, cross-defaults, bankruptcy and insolvency-related events, certain judgments, certain ERISA-related events and a Change in Control (as defined in the Credit Agreement). The interest rates applicable to revolving credit loans under the Credit Agreement are, at the borrower’s option, either (i) a base rate, which is equal to the greatest of (a) the Prime Rate (as defined in the Credit Agreement), (b) the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 1/2 of 1%, and (c) the one-month Adjusted LIBO Rate (as defined in the Credit Agreement) plus 1%, in each case, plus an interest margin ranging from 0.25% to 0.75% based on the Senior Secured Net Leverage Ratio, or (ii) the Adjusted LIBO Rate plus an interest margin ranging from 1.25% to 1.75% based on the Senior Secured Net Leverage Ratio. The Adjusted LIBO Rate cannot be less than zero. The borrower will pay an unused commitment fee during the term of the Credit Agreement ranging from 0.20% to 0.30% per annum based on the Senior Secured Net Leverage Ratio. The Company had no outstanding revolving credit loan balance under the Credit Agreement as of September 30, 2019 and December 31, 2018. The Company was in compliance with all applicable covenants as of September 30, 2019. The Company incurred total debt issuance costs of approximately $0.8 million in connection with the Credit Agreement, which is included in other non-current assets on the accompanying condensed consolidated balance sheet. These costs are being amortized to interest expense over the life of the Credit Agreement on a straight-line basis. Amortization of debt issuance costs during the nine months ended September 30, 2019 and 2018 was approximately $0.1 million and $0.2 million and was recorded in interest expense in the accompanying condensed consolidated statements of operations. Under the terms of the previous credit facility, the Company voluntarily prepaid on its term loan during the nine months ended September 30, 2018. The debt paydown was subject to a prepayment premium of approximately $0.3 million and a loss on the modification and partial extinguishment of debt of $1.5 million, both of which were recorded as interest expense in the consolidated statements of operations for the nine months ended September 30, 2018. |
Convertible Senior Notes and Ca
Convertible Senior Notes and Capped Call Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Convertible Senior Notes and Capped Call Transactions | |
Debt Instrument [Line Items] | |
Convertible Senior Notes and Capped Call Transactions | 7. Convertible Senior Notes and Capped Call Transactions In September 2019, the Company issued and sold $400.0 million aggregate principal amount of 0.125% Convertible Senior Notes due 2024 (the “Notes”) in a private offering (the “Offering”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), including the exercise in full by the initial purchasers of their option to purchase up to an additional $50.0 million aggregate principal amount of the Notes on the same terms and conditions. The net proceeds from the Offering were approximately $391.2 million, after deducting discounts and commissions and other fees and expenses payable by the Company in connection with the Offering. The Company used approximately $37.1 million of the net proceeds from the Offering to pay the cost of the Capped Call Transactions (as defined below). The Notes were issued pursuant to an indenture (the “Indenture”), by and between the Company and U.S. Bank National Association, as trustee. The Notes are senior unsecured obligations of the Company and will mature on September 15, 2024, unless earlier redeemed, repurchased or converted. The Notes will bear interest at a fixed rate of 0.125% per year payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2020. The Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding March 15, 2024, only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on December 31, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per $1,000 principal amount of the Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of common stock and the conversion rate for the Notes on each such trading day; • if the Company calls any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; and • upon the occurrence of specified corporate events as set forth in the Indenture. On or after March 15, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. Upon conversion, the Company may satisfy its conversion obligation by paying and/or delivering, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the Indenture. It is the Company’s current intent to settle the principal amount of the Notes with cash. The Notes are convertible at an initial conversion rate of approximately 35.1849 shares of common stock per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $28.42 per share of common stock, subject to adjustment upon the occurrence of specified events. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture. In addition, following certain corporate events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event or notice of redemption, as the case may be. For example, upon the occurrence of a make-whole fundamental change, as defined in the purchase agreement, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Notes in connection with such make-whole fundamental change or during the relevant redemption period. The Company may not redeem the Notes prior to September 20, 2022. The Company may redeem for cash all or any portion of the Notes, at its option, on or after September 20, 2022, if the last reported sale price of common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes, which means that the Company is not required to redeem or retire the Notes periodically. If the Company undergoes a fundamental change (as defined in the Indenture), holders may require the Company to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Indenture includes customary covenants and sets forth certain events of default after which the Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company after which the Notes become automatically due and payable. The Company was in compliance with all applicable covenants as of September 30, 2019. As of September 30, 2019, the conditions allowing holders of the Notes to convert have not been met, and therefore, the Notes were classified as long-term debt on our condensed consolidated balance sheet. In accounting for the issuance of the Notes, we separated the Notes into liability and equity components. The carrying amounts of the liability components of the Notes were calculated by measuring the fair value of similar debt instruments that do not have an associated convertible feature. The carrying amounts of the equity components, representing the conversion option, were determined by deducting the fair value of the liability components from the par value of the Notes. This difference represents the debt discount that is amortized to interest expense over the terms of the Notes using the effective interest rate method. The carrying amount of the equity components representing the conversion options was approximately $88.8 million for the Notes and is recorded in additional paid in capital and are not remeasured as long as they continue to meet the conditions for equity classification. The Company allocates transaction costs related to the issuance of the Notes to the liability and equity components using the same proportions as the initial carrying value of the Notes. Transaction costs attributable to the liability component were approximately $6.8 million and are being amortized to interest expense at an effective interest method rate of 5.25% over the term of the Notes. Transaction costs attributable to the equity component were approximately $2.0 million and are netted with the equity component of the Notes in additional paid in capital. For tax purposes, the capped call hedge is treated as integrated with the Offering, resulting in tax deductible original issuance discount (“OID”). Thus, a deferred tax asset of $8.9 million has been established that will accrete through additional paid in capital over the life of the Notes. The OID for GAAP purposes resulted in a deferred tax liability of $21.3 million for tax purposes and will accrete through additional paid in capital over the life of the Notes. The transaction costs are deductible for tax purposes over the life of the Notes; thus, a deferred tax asset of $0.5 million has been established for these costs, which is net of the amount allocated to equity for GAAP. As of September 30, 2019, the Notes have a remaining life of approximately 60 months. The net carrying amount of the liability and equity components of the Notes as of September 30, 2019 was as follows: As of September 30, 2019 (in thousands) Liability component Principal $ 400,000 Unamortized discount (88,480 ) Unamortized issuance costs (6,743 ) Net carrying amount $ 304,777 Equity component, net of issuance costs $ 86,764 The interest expense recognized related to the Notes for the periods presented was as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 (in thousands) Contractual interest expense $ 8 $ 8 Amortization of debt discount 261 261 Amortization of debt issuance costs 22 22 Total $ 291 $ 291 As of September 30, 2019, the total estimated fair value of the Notes was approximately $380.9 million. The fair value was determined based on the closing trading price per $100 of the Notes as of the last day of trading for the period. The fair value of the Notes is primarily affected by the trading price of our common stock and market interest rates. The fair value of the Notes is considered a Level 2 within the fair value hierarchy and was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, quoted price of the Notes in an over-the-counter market. Capped Call Transactions In September 2019, in connection with the pricing of the Notes and in connection with the initial purchasers’ exercise in full of their option to purchase additional Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with the initial purchasers or their respective affiliates and another financial institution. The Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, approximately 14.1 million shares of common stock. The Capped Call Transactions are generally expected to reduce potential dilution to common stock upon any conversion of the Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap. The Capped Call Transactions have an initial strike price of approximately $28.42 per share, which corresponds to the initial conversion price of the Notes and is subject to certain adjustments. The cap price of the Capped Call Transactions is initially $41.34 per share, which is subject to certain adjustments. For accounting purposes, the Capped Calls Transactions are separate transactions and not part of the terms of the Notes. As the Capped Call Transactions are considered indexed to our own stock and are considered equity classified, they are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of approximately $37.1 million incurred in connection with the Capped Call Transactions was recorded as a reduction to additional paid in capital. |
Stock Option Plans and Stock-Ba
Stock Option Plans and Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Option Plans and Stock-Based Compensation | 8. Stock Option Plans and Stock-Based Compensation 2015 Stock Option Plans In 2015, the Company adopted (i) the Amended and Restated 2015 Stock Option and Grant Plan and (ii) the 2015 Stock Incentive Plan (together the “2015 Stock Option Plans”) under which it may grant incentive stock options (“ISOs”), nonqualified stock options (“NSOs”) for the right to purchase shares of common stock and grant restricted stock units. The 2015 Stock Option Plans reserve 5.0 million shares of common stock for issuance as ISOs, 0.5 million shares of restricted stock and 0.25 million shares for issuance under the 2015 Stock Incentive Plan. Under the 2015 Stock Option Plans, ISOs may not be granted at less than fair market value on the date of the grant and generally vest over a four-year period based on continued service. Options generally expire ten years after the grant date. At September 30, 2019, approximately 592,000 shares were available for issuance under the Amended and Restated 2015 Stock Option and Grant Plan and includes approximately 90,000 shares which were available for issuance under the 2015 Stock Incentive Plan. The Company currently uses authorized and unissued shares to satisfy share award exercises. 2017 Long Term Incentive Plan In November 2017, the Company’s Board of Directors adopted the 2017 Long Term Incentive Plan (the “2017 Plan”) under which it may grant stock options, nonqualified stock options to purchase shares of common stock and restricted stock units (“RSUs”). As of September 30, 2019, the Company had reserved approximately 13.3 million shares of common stock available for issuance under the 2017 Plan to employees, directors, officers and consultants of the Company and its subsidiaries. The number of shares of common stock available for issuance under the 2017 Plan will be increased on each January 1 hereafter by approximately 4.4 million shares of common stock. Options and RSUs granted to employees under the 2017 Plan generally vest over four years. Common stock subject to an award that expires or is canceled, forfeited, exchanged or otherwise terminated without delivery of shares, and shares withheld or surrendered to pay the exercise price of, or to satisfy the withholding obligations with respect to an award, will become available for future grants under the 2017 Plan. At September 30, 2019, approximately 8.9 million shares were available for issuance under the 2017 Plan. The Company currently uses authorized and unissued shares to satisfy share award exercises. The fair value for the Company’s stock options granted and Employee Stock Purchase Plan (the "ESPP") purchase rights, as discussed further below, during the nine months ended September 30, 2019 and 2018 was estimated at grant date using a Black Scholes option-pricing model using the following weighted average assumptions: Stock Options ESPP September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Expected dividend rate 0% 0% 0% 0% Expected volatility 38.8% - 39.8% 40.0% - 41.1% 39.8% - 46.0% 40.0% Risk-free interest rate 1.39% - 2.59% 2.63% - 2.91% 2.29 - 2.44% 2.0% Expected term (in years) 6.25 6.25 0.42 - 0.50 0.50 The following table summarizes stock option activity for the nine months ended September 30, 2019: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (per share) (years) (in thousands) Balances at December 31, 2018 2,817 $ 6.64 8.0 $ 47,589 Granted 993 $ 27.05 Exercised (618 ) $ 4.13 Forfeited (200 ) $ 14.57 Balances at September 30, 2019 2,992 $ 13.40 8.0 $ 23,981 Options vested and expected to vest at September 30, 2019 2,992 $ 13.40 8.0 $ 23,981 Options vested and exercisable at September 30, 2019 1,149 $ 5.74 6.9 $ 14,986 The Company expects all outstanding stock options to fully vest. During the three and nine months ended September 30, 2019, approximately $0.2 million of vested stock options were forfeited related to the resignation of our former Chief Revenue Officer. The weighted average grant date fair value per share for the nine months ended September 30, 2019 and 2018 was $11.48 and $9.92, respectively. Stock-based compensation expense relating to stock options was approximately $1.2 million and $3.9 million for the three and nine months ended September 30, 2019, respectively, compared to approximately $0.7 million and $3.2 million for the three and nine months ended September 30, 2018, respectively. The total fair value of shares vested during the three and nine months ended September 30, 2019 was approximately $0.8 million and $3.7 million, respectively, compared to approximately $0.2 million and $0.7 million for the three and nine months ended September 30, 2018, respectively. The total unrecognized compensation expense related to non-vested stock options granted is approximately $13.6 million and is expected to be recognized over a weighted average period of approximately 2.6 years as of September 30, 2019. During the three and nine months ended September 30, 2019, approximately $0.9 million of unrecognized compensation expense related to non-vested stock options was forfeited due to the resignation of our former Chief Revenue Officer. Incentive Unit Plan In 2014 and 2015, the Company granted shares of the Company’s common stock (the “incentive units”) to certain members of management pursuant to restricted stock agreements (the “RSAs”). The incentive units were granted with an exercise price equal to the fair market value on the date of grant, are subject to vesting, and if exercised in advance of vesting were subject to the Company’s right to repurchase until vested. During the first quarter of 2019, all of the remaining 0.7 million incentive units were vested with a weighted average grant date fair value of $0.05 per share. The Company did not grant any additional incentive units during the nine months ended September 30, 2019 and 2018. As of March 31, 2019, all incentive units were vested. Therefore, subsequent to the first quarter of 2019, we incurred no additional stock-based compensation expense. Stock-based compensation expense was approximately $0.4 million for the nine months ended September 30, 2019. Stock-based compensation expense was approximately $2.2 million and $6.4 million for the three and nine months ended September 30, 2018, respectively. Restricted Stock Units Restricted stock units (“RSUs”) are generally subject to forfeiture if employment terminates prior to the vesting date. We expense the cost of the RSUs, which is determined to be the fair market value of the shares of common stock underlying the RSUs on the date of grant, ratably over the period during which the vesting restrictions lapse. The following table summarizes the RSU activity for employees and non-employees for the nine months ended September 30, 2019: Number of Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (per share) (years) (in thousands) Balances at December 31, 2018 1,148 $ 15.40 1.8 26,967 Granted 1,197 $ 28.19 Vested (140 ) $ 20.00 Forfeited (183 ) $ 20.32 Balances at September 30, 2019 2,022 $ 22.21 1.7 37,783 Units expected to vest at September 30, 2019 2,022 $ 22.21 1.7 37,783 The Company expects all outstanding RSUs to fully vest. During the three and nine months ended September 30, 2019, The total unrecognized compensation related to RSUs for employee and non-employees was Employee Stock Purchase Plan In November 2017, the Company’s Board of Directors adopted the Employee Stock Purchase Plan (the "ESPP"). The ESPP became effective November of 2017, after the date our registration statement was declared effective by the SEC. The ESPP permits eligible employees to purchase shares by authorizing payroll deductions from 1% to 15% of employee’s eligible compensation during the offering period, which is generally six months, with an annual cap of $25,000 in fair market value, determined at the grant date. Unless an employee has previously withdrawn from the offering, his or her accumulated payroll deductions will be used to purchase shares after the closing of the offering period at a price equal to 85% of the closing price of the shares at the opening or closing of the offering period, whichever is lower. During the three months ended September 30, 2019, there was no ESPP activity as the current offering period is June 4, 2019 through December 2, 2019. During the nine months ended September 30, 2019, the Company issued and distributed approximately 0.2 million shares of common stock pursuant to the ESPP offering spanning January 2, 2019 to June 3, 2019. The Company initially reserved 1.8 million shares of common stock for issuance under the ESPP. The number of shares available for issuance under the ESPP will increase each January 1 beginning in 2019 by 0.9 million shares of common stock. The ESPP will continue in effect until October 30, 2020; unless terminated prior thereto by the Company’s Board of Directors or compensation committee, each of which has the right to terminate the ESPP at any time. At September 30, 2019, approximately 2.5 million shares were available for issuance under the ESPP Plan. Stock-based compensation expense relating to the ESPP was approximately $0.4 million and $1.7 million for the three and nine months ended September 30, 2019, respectively, compared to approximately $0.5 million for the three and nine months ended September 30, 2018, respectively. Stock-based compensation expense associated with ESPP purchase rights are recognized on a straight-line basis over the offering period. A Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (In thousands) Stock options $ 1,232 $ 723 $ 3,868 $ 3,210 Incentive units — 2,160 351 6,429 RSUs 2,819 1,457 8,176 3,956 ESPP 438 543 1,703 543 Total stock-based compensation expense $ 4,489 $ 4,883 $ 14,098 $ 14,138 A summary of the Company’s stock-based compensation expense as recognized on the condensed consolidated statements of operations is as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (In thousands) Cost of revenue - subscription $ 286 $ 284 $ 830 $ 658 Cost of revenue - services and other 337 394 1,066 1,116 Research and development 820 852 2,653 2,145 General and administrative 1,710 1,953 4,725 5,988 Sales and marketing 1,336 1,400 4,824 4,231 Total stock-based compensation expense $ 4,489 $ 4,883 $ 14,098 $ 14,138 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes Impacts of the U.S. 2017 Tax Cuts and Jobs Act The U.S. 2017 Tax Cuts and Jobs Act (the “Act”), which was signed into law on December 22, 2017 and effective January 1, 2018, reduced the U.S. federal corporate tax rate from 35% to 21%. Upon adoption, there was no net impact to the Company’s provision for income taxes or net deferred taxes due to the Company’s valuation allowance. The decrease in future tax assets via the reduced rate was offset by the decrease in our valuation allowance. The Act subjects a U.S. shareholder to tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. Under GAAP, the Company is permitted to make an accounting policy election to either treat taxes due on future inclusions in U.S. taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or to factor such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company elected the "period cost method" as its accounting policy with respect to the new GILTI tax rules. For the periods ended September 30, 2019 and 2018, the Company determined it was in an aggregated net loss position with respect to its controlled foreign corporations. Thus, there is no GILTI tax liability as of September 30, 2019 and 2018. The provision for income taxes for 2019 and 2018 is generated from activity related to stock options and certain foreign jurisdictions by our consolidated subsidiaries. The effective tax rate for the three and nine months ended September 30, 2019 is (249.3)% and 13.9%, respectively, compared to 56.9% and 73.5% for the three and nine months ended September 30, 2018, respectively. The primary drivers for the differences in the rates from the prior-year periods to the current-year periods are related to differences in forecasted pre-tax book income, the impact of stock compensation and an increase in foreign tax liabilities. Provision for income taxes consists of U.S. and state income taxes and income taxes in certain foreign jurisdictions in which the Company conducts business. With the previous adoption of ASC 606 in 2018, the Company is in a deferred tax liability position and no longer requires a valuation allowance. The Company still maintains a full valuation allowance for our Israel tax position due to the lack of taxable earnings for the foreseeable future. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. During the three and nine months ended September 30, 2019 and 2018, the Company did not record any material interest or penalties. The Company files tax returns in the U.S. federal jurisdiction, in several state jurisdictions, and in several foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for years before 2015 and is no longer subject to state, local and foreign income tax examinations by tax authorities for years before 2014. The Company is currently under audit for income tax in a single foreign jurisdiction. The audit is ongoing and is not expected to materially impact the consolidated financial statements. The Company has an Uncertain Tax Position reserve related to this foreign jurisdiction filing that should sufficiently cover any related assessment. |
Net Income (Loss) Per Share Att
Net Income (Loss) Per Share Attributable to Common Stockholders | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share Attributable to Common Stockholders | 10. Net Income (Loss) Per Share Attributable to Common Stockholders Basic and diluted net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated using our weighted average outstanding common shares including the dilutive effect of stock awards. In periods when the Company recognizes a net loss, the Company excludes the impact of outstanding stock awards from the diluted loss per share calculation as their inclusion would have an anti-dilutive effect. The following table sets forth the calculation of basic and diluted net income (loss) per share during the periods presented: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (In thousands, except per share data) Numerator Net income (loss) $ 3,668 $ 1,808 $ (13,919 ) $ (1,473 ) Earnings allocated to unvested incentive units — (15 ) — — Net income (loss) attributable to common stockholders $ 3,668 $ 1,793 $ (13,919 ) $ (1,473 ) Denominator Weighted average shares outstanding Basic 89,143 86,825 88,739 86,268 Diluted 90,808 90,355 88,739 86,268 Net income (loss) attributable to common stockholders per share Basic $ 0.04 $ 0.02 $ (0.16 ) $ (0.02 ) Diluted $ 0.04 $ 0.02 $ (0.16 ) $ (0.02 ) The following weighted average outstanding shares of common stock equivalents were excluded from the computation of the diluted net income (loss) per share attributable to common stockholders for the periods presented because their effect would have been anti-dilutive. Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (in thousands) Stock options to purchase common stock 907 33 3,062 3,264 Non-vested incentive units — — — 1,139 RSUs issued and outstanding 969 4 1,855 1,224 ESPP — — 67 57 Total 1,876 37 4,984 5,684 As we expect to settle the principal amount of the Notes in cash and any excess in shares of the Company’s common stock, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread of approximately 14.1 million shares will have a dilutive impact on diluted net income per share of common stock when the average market price of our common stock for a given period exceeds the conversion price of $28.42 per share. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events On October 15, 2019, SailPoint Technologies, Inc., a Delaware corporation and wholly owned subsidiary of the Company, completed its acquisition of (i) Orkus, Inc., a Delaware corporation (“Orkus”) and (ii) Overwatch.ID, Inc., a Delaware corporation (“Overwatch.ID”) (collectively, the “Acquisitions”). The consummation of each Acquisition was not conditioned on the consummation of the other Acquisition. Orkus Orkus is engaged in the development and license of software products to assist customers in monitoring and controlling access and authorization across hybrid cloud assets. Pursuant to the terms of that certain Agreement and Plan of Merger (the “Orkus Merger Agreement”), Whaler Merger Sub merged with and into Orkus with Orkus continuing as the surviving corporation. The aggregate consideration paid for Orkus was approximately $16.5 million, subject to certain adjustments with respect to Orkus’ debt, cash and net working capital balances at the closing and the deduction of a portion of the consideration as partial security for the indemnification obligations of the equity holders of Orkus under the Orkus Merger Agreement. Overwatch.ID Overwatch.ID is engaged in the development and license of software products focused on access controls security for cloud applications, cloud computing, hybrid IT environments, and on-premises infrastructure. Pursuant to the terms of that certain Agreement and Plan of Merger (the “Overwatch Merger Agreement”), Osprey Merger Sub merged with and into Overwatch.ID with Overwatch.ID continuing as the surviving corporation. The aggregate consideration paid for Overwatch.ID was approximately $21.0 million, subject to certain adjustments with respect to Overwatch.ID’s debt, cash and net working capital balances at the closing and the deduction of a portion of the consideration as partial security for the indemnification obligations of the equity holders of Overwatch.ID under the Overwatch Merger Agreement. The transactions were funded with cash on hand. The Company is in the process of completing our initial accounting for these Acquisitions. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with Article 10 of Regulation S-X, “Interim Financial Statements” and the rules and regulations for Form 10-Q of the Securities and Exchange Commission (the “SEC”). Pursuant to those rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the balance sheets, statements of operations, statements of stockholders’ equity and the statements of cash flows for the interim periods but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2019 or any future period. Our unaudited condensed consolidated financial statements have been prepared in a manner consistent with the accounting principles described in our Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on March 18, 2019 (the “Annual Report”). These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management periodically evaluates such estimates and assumptions for continued reasonableness. In particular, we make estimates with respect to the fair value allocation of multiple performance obligation in revenue recognition, the collectability of accounts receivable, valuation of long-lived assets, fair value of the liability and equity components of the Notes (as defined below), stock-based compensation expense and income taxes. Appropriate adjustments, if any, to the estimates used are made prospectively based upon periodic evaluation. Actual results could differ from those estimates. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash We consider all highly liquid investments with an original maturity of three months or less from date of purchase to be cash equivalents. The Company is required to maintain a small amount of restricted cash to guarantee rent payments in a foreign subsidiary as well as $6.0 million of cash collateral for an unconditional standby letter of credit related to the Company’s corporate headquarters lease. As of September 30, 2019 December 31, 2018 (In thousands) Cash and cash equivalents per balance sheet $ 464,332 $ 70,964 Restricted cash per balance sheet 6,317 6,272 Cash, cash equivalents and restricted cash per cash flow $ 470,649 $ 77,236 |
Segment Information and Concentration of Credit and Other Risks | Segment Information and Concentration of Credit and Other Risks Segment Information The Company operates as one operating segment. The Company’s chief operating decision makers review financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision makers in deciding how to allocate resources and in assessing performance. The Company manages its business on the basis of one reportable segment, and derives revenues from licensing of software, subscription and renewals, sale of professional services, maintenance and technical support. The following table sets forth the Company’s consolidated revenue by geography: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (In thousands) United States $ 56,071 $ 45,693 $ 142,030 $ 112,008 EMEA (1) 12,499 11,754 38,768 36,305 Rest of the World (1) 7,309 8,288 18,718 20,019 Total revenue $ 75,879 $ 65,735 $ 199,516 $ 168,332 (1) No single country represented more than 10% |
Concentration of Credit Risk and Other Risks | Concentration of Credit Risk and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. As of September 30, 2019, no single entity represented more than 10% of the balance in accounts receivable. As of December 31, 2018, 11%, of the Company’s accounts receivable was from one customer. Management considers concentration of credit risk to be minimal with respect to accounts receivable due to the positive historical collection experience of the Company despite the geographic concentrations related to the Company’s customers. No single customer represented more than 10% of revenue for the three and nine months ended September 30, 2019 and 2018. The Company does not experience concentration of credit risk in foreign countries as no single foreign country represents more than 10% of the Company’s consolidated revenues or net assets. |
Significant Accounting Policies | Significant Accounting Policies The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes in the Annual Report, most notably Note 2 “Summary of Significant Accounting Policies”. In 2019, the Company adopted Accounting Standards Update 2016-02, “ Leases Note 5 “Commitments and Contingencies” below. |
Services and Other Revenues | Services and Other Revenues As previously disclosed in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which was filed with the SEC on August 6, 2019 (the “Second Quarter Quarterly Report”), while there are no changes to the accounting policy the Company provides the following additional clarification regarding the revenue for fixed price services and prepaids that are recognized over time using input methods to estimate progress to completion. For services that are contracted for at a fixed price, progress is generally measured based on hours incurred as a percentage of the total estimated hours required for complete satisfaction of the related performance obligations. For services that are contracted on a time and materials or prepaid basis, progress is generally based on actual hours expended. These input methods (e.g. hours incurred or expended) are considered a faithful depiction of our efforts to satisfy services contracts as they represent the performance obligation consumed by the customer and performed by the entity and therefore reflect the transfer of services to a customer under such contracts. |
Deferred Contract Acquisition Costs | Deferred Contract Acquisition Costs As previously disclosed in the Second Quarter Quarterly Report, while there are no changes to the accounting policy the Company provides the following additional clarification regarding the incremental costs of obtaining a contract, such as deferred sales commission costs, in particular upon contract renewals. The Company typically pays sales commissions for both initial and follow-on sales of perpetual licenses, inclusive of initial maintenance, term licenses and subscription offerings. Initial commissions are allocated to each performance obligation within the contract. The portion allocated to the perpetual license element is expensed at the time the license is delivered. Commissions allocated to the remaining elements are capitalized and amortized over an expected period of benefit. The Company has determined the expected period of benefit to be approximately five years. In addition, the Company pays sales commissions for renewals of term licenses and subscription offerings at a lower rate, which is therefore not commensurate with commissions paid on an initial sale. These renewal commissions are amortized over each renewal’s contractual term. The Company does not pay sales commissions on renewals of maintenance agreements related to perpetual licenses. |
Recently Issued Accounting Standards Not Yet Adopted and Adopted | Recently Issued Accounting Standards Not Yet Adopted In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments—Credit Losses (Topic 326). Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02 and subsequent updates thereafter in ASU 2017-13, ASU 2018-10 and ASU 2018-11, Leases On January 1, 2019, we adopted ASC 842 using the modified retrospective transition method The adoption of the new standard represents a change in accounting principle with the intent to increase transparency and comparability among organizations by requiring the recognition of ROU assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We ha ve made an accounting policy election not to recognize ROU assets and lease liabilities that arise from short-term leases for any class of underlying asset. The standard did not have a material impact on our condensed consolidated statements of operations or statements of cash flows. However, upon adoption of ASC 842 the opening impact on our condensed consolidated balance sheets was not material, but it resulted in recording ROU assets and an increase in total lease liabilities of $3.5 million In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (ASC 718): Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Cash, Cash Equivalents and Restricted Cash | We consider all highly liquid investments with an original maturity of three months or less from date of purchase to be cash equivalents. The Company is required to maintain a small amount of restricted cash to guarantee rent payments in a foreign subsidiary as well as $6.0 million of cash collateral for an unconditional standby letter of credit related to the Company’s corporate headquarters lease. As of September 30, 2019 December 31, 2018 (In thousands) Cash and cash equivalents per balance sheet $ 464,332 $ 70,964 Restricted cash per balance sheet 6,317 6,272 Cash, cash equivalents and restricted cash per cash flow $ 470,649 $ 77,236 |
Summary of Consolidated Total Revenue by Geography | The following table sets forth the Company’s consolidated revenue by geography: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (In thousands) United States $ 56,071 $ 45,693 $ 142,030 $ 112,008 EMEA (1) 12,499 11,754 38,768 36,305 Rest of the World (1) 7,309 8,288 18,718 20,019 Total revenue $ 75,879 $ 65,735 $ 199,516 $ 168,332 (1) No single country represented more than 10% |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition [Abstract] | |
Schedule of Timing of Transfer of Control | The following table presents the Company’s revenue by timing of revenue recognition to understand the risks of timing of transfer of control: Three Months Ended September 30, 2019 Three Months Ended September 30, 2018 Services Services License Subscription and other License Subscription and other (in thousands) Timing of revenue recognition Revenue recognized at a point in time $ 26,825 $ — $ — $ 28,023 $ — $ — Revenue recognized over time — 37,383 11,671 — 27,916 9,796 Total revenue $ 26,825 $ 37,383 $ 11,671 $ 28,023 $ 27,916 $ 9,796 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Services Services License Subscription and other License Subscription and other (in thousands) Timing of revenue recognition Revenue recognized at a point in time $ 64,827 $ — $ — $ 64,451 $ — $ — Revenue recognized over time — 102,929 31,760 — 74,531 29,350 Total revenue $ 64,827 $ 102,929 $ 31,760 $ 64,451 $ 74,531 $ 29,350 |
Summary of Contract Balances | A summary of the activity impacting our contract balances during the nine months ended September 30, 2019 is presented below (in thousands): Contract acquisition costs Balances at December 31, 2018 $ 28,043 Additional deferred contract acquisition costs 9,700 Amortization of deferred contract acquisition costs (7,346 ) Balances at September 30, 2019 $ 30,397 Deferred revenue (current) Deferred revenue (non-current) Balances at December 31, 2018 $ 95,919 $ 18,382 Increase, net 7,398 2,139 Balances at September 30, 2019 $ 103,317 $ 20,521 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Cost and Amortization of Intangible Assets | Total cost and amortization of intangible assets are comprised of the following: As of Weighted Average Useful Life September 30, 2019 December 31, 2018 Intangible assets (In years) (In thousands) Customer lists 15 $ 42,500 $ 42,500 Developed technology 9.6 42,000 42,000 Trade names and trademarks 17 24,500 24,500 Order backlog 1.5 — 1,100 Other intangible assets 4.9 3,310 3,310 Total intangible assets 112,310 113,410 Less: Accumulated amortization (44,443 ) (38,550 ) Total intangible assets, net $ 67,867 $ 74,860 |
Summary of Amortization Expense Included in Condensed Consolidated Statements of Operations | Amortization expense included in the condensed consolidated statements of operations for the periods ended September 30, 2019 and 2018 is as follows: Three Months Ended Nine Months Ended Amortization expense (in thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Cost of revenue - licenses $ 1,008 $ 1,008 $ 3,024 $ 3,024 Cost of revenue - subscription 96 96 288 288 Research and development 159 34 477 102 Sales and marketing 1,068 1,068 3,204 3,204 Total amortization of acquired intangibles $ 2,331 $ 2,206 $ 6,993 $ 6,618 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Operating Lease Costs and Other Supplemental Cash Flow Information Related to Operating Leases | Operating lease costs during the periods presented were as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 (in thousands) Lease cost Operating lease cost $ 790 $ 3,577 Short-term lease cost 884 1,746 Total lease cost $ 1,674 $ 5,323 Other supplemental cash flow information related to operating leases is as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 (in millions) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1.2 $ 3.4 Right-of-use assets obtained in exchange for lease liabilities Operating leases $ — $ 30.4 |
Summary of Undiscounted Annual Future Minimum Lease Payments | At September 30, 2019, we have no financing leases and we have non-cancelable operating lease commitments, excluding variable consideration. The undiscounted annual future minimum lease payments are summarized by year in the table below: Year Ending December 31, (in thousands) 2019 (except the nine months ended September 30) $ 1,191 2020 4,975 2021 5,511 2022 5,478 2023 4,978 Thereafter 27,030 Total minimum lease payments 49,163 Less: interest (7,868 ) Total present value of operating lease liabilities $ 41,295 Less: operating lease liabilities - current $ (3,406 ) Long-term operating lease liabilities $ 37,889 |
Convertible Senior Notes and _2
Convertible Senior Notes and Capped Call Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Net Carrying Amount of Liability and Equity Components of Notes | The net carrying amount of the liability and equity components of the Notes as of September 30, 2019 was as follows: As of September 30, 2019 (in thousands) Liability component Principal $ 400,000 Unamortized discount (88,480 ) Unamortized issuance costs (6,743 ) Net carrying amount $ 304,777 Equity component, net of issuance costs $ 86,764 |
Summary of Interest Expense Recognized Related to Notes for Periods Presented | The interest expense recognized related to the Notes for the periods presented was as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 (in thousands) Contractual interest expense $ 8 $ 8 Amortization of debt discount 261 261 Amortization of debt issuance costs 22 22 Total $ 291 $ 291 |
Stock Option Plans and Stock-_2
Stock Option Plans and Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Fair Value of Stock Options Estimated by Using Weighted Average Assumptions | The fair value for the Company’s stock options granted and Employee Stock Purchase Plan (the "ESPP") purchase rights, as discussed further below, during the nine months ended September 30, 2019 and 2018 was estimated at grant date using a Black Scholes option-pricing model using the following weighted average assumptions: Stock Options ESPP September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Expected dividend rate 0% 0% 0% 0% Expected volatility 38.8% - 39.8% 40.0% - 41.1% 39.8% - 46.0% 40.0% Risk-free interest rate 1.39% - 2.59% 2.63% - 2.91% 2.29 - 2.44% 2.0% Expected term (in years) 6.25 6.25 0.42 - 0.50 0.50 |
Summary of Stock Option Activity | The following table summarizes stock option activity for the nine months ended September 30, 2019: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (per share) (years) (in thousands) Balances at December 31, 2018 2,817 $ 6.64 8.0 $ 47,589 Granted 993 $ 27.05 Exercised (618 ) $ 4.13 Forfeited (200 ) $ 14.57 Balances at September 30, 2019 2,992 $ 13.40 8.0 $ 23,981 Options vested and expected to vest at September 30, 2019 2,992 $ 13.40 8.0 $ 23,981 Options vested and exercisable at September 30, 2019 1,149 $ 5.74 6.9 $ 14,986 |
Summary of RSU Activity for Employees and Non-employees | The following table summarizes the RSU activity for employees and non-employees for the nine months ended September 30, 2019: Number of Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (per share) (years) (in thousands) Balances at December 31, 2018 1,148 $ 15.40 1.8 26,967 Granted 1,197 $ 28.19 Vested (140 ) $ 20.00 Forfeited (183 ) $ 20.32 Balances at September 30, 2019 2,022 $ 22.21 1.7 37,783 Units expected to vest at September 30, 2019 2,022 $ 22.21 1.7 37,783 |
Summary of Stock-Based Compensation Expense By Underlying Equity Instrument | A Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (In thousands) Stock options $ 1,232 $ 723 $ 3,868 $ 3,210 Incentive units — 2,160 351 6,429 RSUs 2,819 1,457 8,176 3,956 ESPP 438 543 1,703 543 Total stock-based compensation expense $ 4,489 $ 4,883 $ 14,098 $ 14,138 |
Summary of Stock-Based Compensation Expense | A summary of the Company’s stock-based compensation expense as recognized on the condensed consolidated statements of operations is as follows: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (In thousands) Cost of revenue - subscription $ 286 $ 284 $ 830 $ 658 Cost of revenue - services and other 337 394 1,066 1,116 Research and development 820 852 2,653 2,145 General and administrative 1,710 1,953 4,725 5,988 Sales and marketing 1,336 1,400 4,824 4,231 Total stock-based compensation expense $ 4,489 $ 4,883 $ 14,098 $ 14,138 |
Net Income (Loss) Per Share A_2
Net Income (Loss) Per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the calculation of basic and diluted net income (loss) per share during the periods presented: Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (In thousands, except per share data) Numerator Net income (loss) $ 3,668 $ 1,808 $ (13,919 ) $ (1,473 ) Earnings allocated to unvested incentive units — (15 ) — — Net income (loss) attributable to common stockholders $ 3,668 $ 1,793 $ (13,919 ) $ (1,473 ) Denominator Weighted average shares outstanding Basic 89,143 86,825 88,739 86,268 Diluted 90,808 90,355 88,739 86,268 Net income (loss) attributable to common stockholders per share Basic $ 0.04 $ 0.02 $ (0.16 ) $ (0.02 ) Diluted $ 0.04 $ 0.02 $ (0.16 ) $ (0.02 ) |
Weighted Average Outstanding Shares of Common Stock Equivalents Excluded from the Computation of the Diluted Net Income (Loss) per Share | The following weighted average outstanding shares of common stock equivalents were excluded from the computation of the diluted net income (loss) per share attributable to common stockholders for the periods presented because their effect would have been anti-dilutive. Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (in thousands) Stock options to purchase common stock 907 33 3,062 3,264 Non-vested incentive units — — — 1,139 RSUs issued and outstanding 969 4 1,855 1,224 ESPP — — 67 57 Total 1,876 37 4,984 5,684 |
Organization and Description _2
Organization and Description of Business - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Date of incorporation | Aug. 8, 2014 |
Entity Incorporation, State or Country Code | DE |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | Jan. 01, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018 | Sep. 30, 2019USD ($)Segment | Sep. 30, 2018 | Dec. 31, 2018 |
Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of operating segments | Segment | 1 | |||||
ASC 842 | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Recording of ROU assets and increase in total lease liabilities | $ 3.5 | |||||
Credit Concentration Risk | Accounts Receivable | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Concentration risk, percentage | 10.00% | 11.00% | ||||
Credit Concentration Risk | Revenue | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% | ||
Credit Concentration Risk | Net Assets | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% | ||
Standby Letter of Credit | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Cash collateral | $ 6 | $ 6 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents per balance sheet | $ 464,332 | $ 70,964 | ||
Restricted cash per balance sheet | 6,317 | 6,272 | ||
Cash, cash equivalents and restricted cash per cash flow | $ 470,649 | $ 77,236 | $ 83,436 | $ 116,127 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Consolidated Total Revenue by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Summary of Significant Accounting Policies [Line Items] | ||||
Total revenue | $ 75,879 | $ 65,735 | $ 199,516 | $ 168,332 |
United States | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Total revenue | 56,071 | 45,693 | 142,030 | 112,008 |
EMEA | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Total revenue | 12,499 | 11,754 | 38,768 | 36,305 |
Rest of the World | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Total revenue | $ 7,309 | $ 8,288 | $ 18,718 | $ 20,019 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Consolidated Total Revenue by Geography (Parenthetical) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Credit Concentration Risk | Revenue | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Timing of Transfer of Control (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 75,879 | $ 65,735 | $ 199,516 | $ 168,332 |
Licenses | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 26,825 | 28,023 | 64,827 | 64,451 |
Licenses | Revenue Recognized At a Point in Time | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 26,825 | 28,023 | 64,827 | 64,451 |
Subscription | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 37,383 | 27,916 | 102,929 | 74,531 |
Subscription | Revenue Recognized Over Time | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 37,383 | 27,916 | 102,929 | 74,531 |
Services and other | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 11,671 | 9,796 | 31,760 | 29,350 |
Services and other | Revenue Recognized Over Time | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 11,671 | $ 9,796 | $ 31,760 | $ 29,350 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Activity Impacting Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue From Contract With Customer [Abstract] | ||||
Contract Acquisition Costs, Balances | $ 28,043 | |||
Additional deferred contract acquisition costs | 9,700 | |||
Amortization of deferred contract acquisition costs | $ (2,600) | $ (2,200) | (7,346) | $ (5,600) |
Contract Acquisition Costs, Balances | $ 30,397 | $ 30,397 |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Contract Balances With Deferred Revenue Current and NonCurrent (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Deferred revenue current, Balances | $ 95,919 |
Increase, net | 7,398 |
Deferred revenue current, Balances | 103,317 |
Deferred revenue non-current, Balances | 18,382 |
Increase, net | 2,139 |
Deferred revenue non-current, Balances | $ 20,521 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Disaggregation Of Revenue [Line Items] | |||||
Revenue recognized that was previously deferred | $ 47,200,000 | $ 29,800,000 | $ 94,400,000 | $ 62,600,000 | |
Contract asset, reclassified to receivable | 2,500,000 | 4,800,000 | |||
Impairment losses recognized on contract assets | 0 | 0 | $ 0 | ||
Remaining performance obligation | 181,500,000 | 181,500,000 | |||
Deferred contract or customer acquisition cost | 30,397,000 | 30,397,000 | 28,043,000 | ||
Amortization of contract acquisition costs | 2,600,000 | $ 2,200,000 | 7,346,000 | $ 5,600,000 | |
Deferred Contract Costs Expected To Be Amortized Within Next 12 Months | |||||
Disaggregation Of Revenue [Line Items] | |||||
Deferred contract or customer acquisition costs | $ 9,700,000 | $ 9,700,000 | $ 8,400,000 |
Revenue Recognition - Additio_2
Revenue Recognition - Additional Information (Details1) $ in Millions | Sep. 30, 2019USD ($) |
Disaggregation Of Revenue [Line Items] | |
Revenue expected to recognize | $ 181.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-10-01 | |
Disaggregation Of Revenue [Line Items] | |
Revenue expected to recognize | $ 122.8 |
Remaining performance obligation, expected timing of Satisfaction, period | 12 months |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Cost and Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 112,310 | $ 113,410 |
Less: Accumulated amortization | (44,443) | (38,550) |
Total intangible assets, net | $ 67,867 | 74,860 |
Customer Lists | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life | 15 years | |
Intangible assets, gross | $ 42,500 | 42,500 |
Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life | 9 years 7 months 6 days | |
Intangible assets, gross | $ 42,000 | 42,000 |
Trade Names and Trademarks | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life | 17 years | |
Intangible assets, gross | $ 24,500 | 24,500 |
Order Backlog | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life | 1 year 6 months | |
Intangible assets, gross | 1,100 | |
Other Intangible Assets | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life | 4 years 10 months 24 days | |
Intangible assets, gross | $ 3,310 | $ 3,310 |
Intangible Assets - Summary of
Intangible Assets - Summary of Amortization Expense Included in Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Finite Lived Intangible Assets [Line Items] | ||||
Total amortization of acquired intangibles | $ 2,331 | $ 2,206 | $ 6,993 | $ 6,618 |
Cost of Revenue - Licenses | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Total amortization of acquired intangibles | 1,008 | 1,008 | 3,024 | 3,024 |
Cost of Revenue - Subscription | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Total amortization of acquired intangibles | 96 | 96 | 288 | 288 |
Research and Development | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Total amortization of acquired intangibles | 159 | 34 | 477 | 102 |
Sales and Marketing | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Total amortization of acquired intangibles | $ 1,068 | $ 1,068 | $ 3,204 | $ 3,204 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Impairment of intangible assets | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | Jan. 01, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Line Items] | |||||
Operating lease, residual value guarantee description | Our lease agreements do not contain any material residual value guarantees or material restrictive covenants and as of September 30, 2019, the Company is not subleasing to any third parties. | ||||
Weighted-average discount rate - operating leases | 4.12% | ||||
Operating lease, weighted average remaining lease term | 9 years | ||||
Operating lease liabilities | $ 41,295,000 | ||||
Operating lease liabilities, current | 3,406,000 | ||||
Long-term operating lease liabilities | 37,889,000 | $ 9,788,000 | |||
Right-of-use assets | 30,321,000 | ||||
Operating leases, rent expense | $ 1,000,000 | $ 2,900,000 | |||
Financing leases | $ 0 | ||||
ASC 842 | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Operating lease liabilities | $ 3,500,000 | ||||
Minimum | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Remaining lease terms | 1 year | ||||
Maximum | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Remaining lease terms | 10 years |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Operating Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Lease cost | ||
Operating lease cost | $ 790 | $ 3,577 |
Short-term lease cost | 884 | 1,746 |
Total lease cost | $ 1,674 | $ 5,323 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 1.2 | $ 3.4 |
Right-of-use assets obtained in exchange for lease liabilities | ||
Operating leases | $ 30.4 |
Commitments and Contingencies_4
Commitments and Contingencies - Summary of Undiscounted Annual Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
2019 (except the nine months ended September 30) | $ 1,191 | |
2020 | 4,975 | |
2021 | 5,511 | |
2022 | 5,478 | |
2023 | 4,978 | |
Thereafter | 27,030 | |
Total minimum lease payments | 49,163 | |
Less: interest | (7,868) | |
Total present value of operating lease liabilities | 41,295 | |
Less: operating lease liabilities - current | (3,406) | |
Long-term operating lease liabilities | $ 37,889 | $ 9,788 |
Line of Credit and Long-Term _2
Line of Credit and Long-Term Debt - Additional Information (Details) - USD ($) | Mar. 11, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Line Of Credit Facility [Line Items] | ||||
Credit agreement mature date | Mar. 31, 2024 | |||
Debt instrument, description of variable rate basis | one-month Adjusted LIBO Rate | |||
Amortization of debt issuance costs | $ 100,000 | $ 200,000 | ||
Prepayment premium amount | 300,000 | |||
Loss on modification and partial extinguishment of debt | $ 1,536,000 | |||
New Credit Agreement | ||||
Line Of Credit Facility [Line Items] | ||||
Total debt issuance costs | $ 800,000 | |||
Federal Funds Effective Rate | ||||
Line Of Credit Facility [Line Items] | ||||
Debt instrument, interest rate plus | 0.50% | |||
London Interbank Offered Rate (LIBOR) | ||||
Line Of Credit Facility [Line Items] | ||||
Debt instrument, interest rate plus | 1.00% | |||
Maximum | ||||
Line Of Credit Facility [Line Items] | ||||
Senior secured net leverage ratio | 3.50% | 6.00% | ||
Applicable interest margin rate based on senior secured net leverage ratio | 0.75% | |||
Payment of unused commitment fee under credit agreement based on senior secured net leverage ratio | 0.30% | |||
Maximum | London Interbank Offered Rate (LIBOR) | ||||
Line Of Credit Facility [Line Items] | ||||
Applicable interest margin rate based on senior secured net leverage ratio | 1.75% | |||
Minimum | ||||
Line Of Credit Facility [Line Items] | ||||
Applicable interest margin rate based on senior secured net leverage ratio | 0.25% | |||
Payment of unused commitment fee under credit agreement based on senior secured net leverage ratio | 0.20% | |||
Minimum | London Interbank Offered Rate (LIBOR) | ||||
Line Of Credit Facility [Line Items] | ||||
Applicable interest margin rate based on senior secured net leverage ratio | 1.25% | |||
Letter of Credit | ||||
Line Of Credit Facility [Line Items] | ||||
Initial commitments for credit loans under credit agreement | $ 150,000,000 | $ 75,000,000 | ||
Letter of credit sublimit | 15,000,000 | |||
Revolving Credit Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit outstanding balance | $ 0 | $ 0 |
Convertible Senior Notes and _3
Convertible Senior Notes and Capped Call Transactions - Additional Information (Details) $ / shares in Units, shares in Millions | 1 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2019USD ($)Day$ / sharesshares | |
Debt Instrument [Line Items] | ||
Proceeds from offering after deducting the Initial Purchaser's discounts and commissions and other fees and expenses | $ 400,000,000 | |
Payments for purchase of capped calls | $ 37,080,000 | |
Debt Instrument, conversion price per share | $ / shares | $ 28.42 | $ 28.42 |
Capped Call Transactions | ||
Debt Instrument [Line Items] | ||
Payments for purchase of capped calls | $ 37,100,000 | |
Debt Instrument, conversion price per share | $ / shares | $ 28.42 | $ 28.42 |
Estimated fair values of debt instrument | shares | 14.1 | 14.1 |
Cap price per share | $ / shares | $ 41.34 | |
Convertible Senior Notes due 2024 | ||
Debt Instrument [Line Items] | ||
Debt instrument principal amount | $ 400,000,000 | $ 400,000,000 |
Debt instrument interest rate | 0.125% | 0.125% |
Debt instrument initial purchasers option to purchase additional principal amount | $ 50,000,000 | $ 50,000,000 |
Proceeds from offering after deducting the Initial Purchaser's discounts and commissions and other fees and expenses | 391,200,000 | |
Payments for purchase of capped calls | 37,100,000 | |
Debt instrument maturity date | Sep. 15, 2024 | |
Number of trading days for convertible debt | Day | 20 | |
Number of consecutive trading days for convertible debt | Day | 30 | |
Percentage of stock price trigger for convertible debt | 130.00% | |
Number of business days for convertible debt | Day | 5 | |
Measurement period for convertible debt | Day | 5 | |
Percentage of stock price trigger in measurement period | 98.00% | |
Debt instrument, redemption price, percentage | 100.00% | |
Carrying amount of equity components in debt conversion | $ 88,800,000 | |
Debt instrument remaining life | 60 months | |
Estimated fair values of debt instrument | 380,900,000 | $ 380,900,000 |
Convertible Senior Notes due 2024 | Liability Component | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | $ 6,800,000 | $ 6,800,000 |
Effective interest rate percentage | 5.25% | 5.25% |
Convertible Senior Notes due 2024 | Equity Component | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | $ 2,000,000 | $ 2,000,000 |
Convertible Senior Notes due 2024 | Common Stock | ||
Debt Instrument [Line Items] | ||
Debt Conversion, converted instrument, shares issued | 35.1849 | |
Debt Instrument, conversion price per share | $ / shares | $ 28.42 | $ 28.42 |
Convertible Senior Notes due 2024 | Additional Paid-in Capital | Capped Call Hedge | ||
Debt Instrument [Line Items] | ||
Deferred tax assets from original issuance discount from capped call for tax purposes | $ 8,900,000 | $ 8,900,000 |
Deferred tax liabilities from original issuance discount from capped call for GAAP purposes | 21,300,000 | 21,300,000 |
Deferred tax assets on transaction costs | $ 500,000 | $ 500,000 |
Convertible Senior Notes and _4
Convertible Senior Notes and Capped Call Transactions - Summary of Net Carrying Amount of Liability and Equity Components of Notes (Details) | Sep. 30, 2019USD ($) |
Debt Instrument [Line Items] | |
Net carrying amount | $ 304,777,000 |
Convertible Senior Notes due 2024 | |
Debt Instrument [Line Items] | |
Debt instrument principal amount | 400,000,000 |
Unamortized discount | (88,480,000) |
Unamortized issuance costs | (6,743,000) |
Net carrying amount | 304,777,000 |
Equity component, net of issuance costs | $ 86,764,000 |
Convertible Senior Notes and _5
Convertible Senior Notes and Capped Call Transactions - Summary of Interest Expense Recognized Related to Notes for Periods Presented (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Interest Expense Debt [Line Items] | |||
Amortization of debt issuance costs | $ 100 | $ 200 | |
Convertible Senior Notes due 2024 | |||
Interest Expense Debt [Line Items] | |||
Contractual interest expense | $ 8 | 8 | |
Amortization of debt discount | 261 | 261 | |
Amortization of debt issuance costs | 22 | 22 | |
Total | $ 291 | $ 291 |
Stock Option Plans and Stock-_3
Stock Option Plans and Stock-Based Compensation - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Nov. 30, 2017 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense, vested stock options forfeited | $ 200,000 | $ 200,000 | |||||
Weighted average grant date fair value per share | $ 11.48 | $ 9.92 | |||||
Stock-based compensation expense | 4,489,000 | $ 4,883,000 | $ 14,098,000 | $ 14,138,000 | |||
Total fair value of shares vested | 800,000 | 200,000 | 3,700,000 | 700,000 | |||
Total unrecognized compensation expense related to non-vested stock options granted | 13,600,000 | $ 13,600,000 | |||||
Unrecognized compensation expense, weighted-average period of recognition | 2 years 7 months 6 days | ||||||
Unrecognized compensation expense related to non-vested stock option due to resignation of former chief revenue officer | 900,000 | $ 900,000 | |||||
Employee Stock Purchase Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares of common stock reserve for issuance | 1,800,000 | ||||||
Stock-based compensation expense | $ 438,000 | 543,000 | $ 1,703,000 | 543,000 | |||
Minimum percentage of employee compensation for employee payroll deduction | 1.00% | ||||||
Maximum percentage of employee compensation for employee payroll deduction | 15.00% | ||||||
Employee Stock Purchase Plan offering period | 6 months | ||||||
Maximum stock value of shares purchased by employees in fair market value, determined at grant date | $ 25,000 | ||||||
Percentage of closing price of shares used to purchase shares | 85.00% | ||||||
Shares of common stock issued and distributed | 200,000 | 200,000 | |||||
Increase in common stock reserved | 900,000 | ||||||
Share-based compensation award, expiration date | Oct. 30, 2020 | ||||||
2015 Stock Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares of common stock reserve for issuance | 250,000 | ||||||
Shares available for issuance | 90,000 | 90,000 | |||||
2015 Stock Option and Grant Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares available for issuance | 592,000 | 592,000 | |||||
2017 Long Term Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares of common stock reserve for issuance | 13,300,000 | 13,300,000 | |||||
Vesting period | 4 years | ||||||
Shares available for issuance | 8,900,000 | 8,900,000 | |||||
Shares of common stock options granted | 4,400,000 | ||||||
Incentive Unit Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 0 | 2,160,000 | $ 351,000 | $ 6,429,000 | |||
Number of Shares, Vested | 700,000 | ||||||
Weighted average grant date fair value, Vested | $ 0.05 | ||||||
Number of Shares, Granted | 0 | 0 | |||||
Incentive Stock Options and Nonqualified Stock Options | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares of common stock reserve for issuance | 5,000,000 | ||||||
Expiration period | 10 years | ||||||
Incentive Stock Options and Nonqualified Stock Options | Maximum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Restricted Stock | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares of common stock reserve for issuance | 500,000 | ||||||
Stock-based compensation expense | 2,819,000 | 1,457,000 | $ 8,176,000 | $ 3,956,000 | |||
Restricted Stock Units | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of Shares, Vested | 140,000 | ||||||
Weighted average grant date fair value, Vested | $ 20 | ||||||
Number of Shares, Granted | 1,197,000 | ||||||
Restricted Stock Units | Chief Revenue Officer | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vested RSUs forfeited | 100,000 | ||||||
Unrecognized compensation expense related to non-vested RSUs forfeited | 1,000,000 | $ 1,000,000 | |||||
Restricted Stock Units | Employee and Non-employees | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Total unrecognized compensation expense related to non-vested stock options granted | 37,200,000 | $ 37,200,000 | |||||
Unrecognized compensation expense, weighted-average period of recognition | 2 years 10 months 24 days | ||||||
Stock Options | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 1,232,000 | $ 723,000 | $ 3,868,000 | $ 3,210,000 |
Stock Option Plans and Stock-_4
Stock Option Plans and Stock-Based Compensation - Summary of Fair Value of Stock Options Estimated by Using Weighted Average Assumptions (Details) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Stock Purchase Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected dividend rate | 0.00% | 0.00% |
Expected volatility | 40.00% | |
Expected volatility, Minimum | 39.80% | |
Expected volatility, Maximum | 46.00% | |
Risk-free interest rate, Minimum | 2.29% | |
Risk-free interest rate, Maximum | 2.44% | |
Expected term (in years) | 6 months | |
Risk-free interest rate | 2.00% | |
Minimum | Employee Stock Purchase Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 5 months 1 day | |
Maximum | Employee Stock Purchase Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 months | |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected dividend rate | 0.00% | 0.00% |
Expected volatility, Minimum | 38.80% | 40.00% |
Expected volatility, Maximum | 39.80% | 41.10% |
Risk-free interest rate, Minimum | 1.39% | 2.63% |
Risk-free interest rate, Maximum | 2.59% | 2.91% |
Expected term (in years) | 6 years 3 months | 6 years 3 months |
Stock Option Plans and Stock-_5
Stock Option Plans and Stock-Based Compensation - Summary of Stock Options Activity (Details) - Stock Options $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Options, Beginning balances | shares | 2,817 | |
Number of Options, Granted | shares | 993 | |
Number of Options, Exercised | shares | (618) | |
Number of Options, Forfeited | shares | (200) | |
Number of Options, Ending balances | shares | 2,992 | 2,817 |
Number of Options, Options vested and expected to vest | shares | 2,992 | |
Number of Options, Options vested and exercisable | shares | 1,149 | |
Weighted Average Exercise Price (per share), Beginning balances | $ / shares | $ 6.64 | |
Weighted Average Exercise Price (per share), Granted | $ / shares | 27.05 | |
Weighted Average Exercise Price (per share), Exercised | $ / shares | 4.13 | |
Weighted Average Exercise Price (per share), Forfeited | $ / shares | 14.57 | |
Weighted Average Exercise Price (per share), Ending balances | $ / shares | 13.40 | $ 6.64 |
Weighted Average Exercise Price (per share), Options vested and expected to vest | $ / shares | 13.40 | |
Weighted Average Exercise Price (Per share), Options vested and exercisable | $ / shares | $ 5.74 | |
Weighted Average Remaining Contractual Term (years) | 8 years | 8 years |
Weighted Average Remaining Contractual Term (years), Options vested and expected to vest | 8 years | |
Weighted Average Remaining Contractual Term (years), Options vested and exercisable | 6 years 10 months 24 days | |
Aggregate Intrinsic Value, Balances | $ | $ 23,981 | $ 47,589 |
Aggregate Intrinsic Value, Options vested and expected to vest | $ | 23,981 | |
Aggregate Intrinsic Value, Options vested and exercisable | $ | $ 14,986 |
Stock Option Plans and Stock-_6
Stock Option Plans and Stock-Based Compensation - Summary of RSU Activity for Employees and Non-employees (Detail) - Restricted Stock Units - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Number of Shares, Beginning Balance | 1,148 | |
Number of Shares, Granted | 1,197 | |
Number of Shares, Vested | (140) | |
Number of Shares, Forfeited | (183) | |
Non-vested number of shares, Ending Balance | 2,022 | 1,148 |
Units expected to vest at September 30, 2019 | 2,022 | |
Weighted-Average Remaining Contractual Term (In years) | ||
Weighted-Average Remaining Contractual Term, Balances | 1 year 8 months 12 days | 1 year 9 months 18 days |
Weighted-Average Remaining Contractual Term, Units expected to vest | 1 year 8 months 12 days | |
Aggregate intrinsic value | ||
Aggregate intrinsic value, Balances | $ 37,783 | $ 26,967 |
Aggregate intrinsic value, Units expected to vest | $ 37,783 | |
Weighted average grant date Fair Value | ||
Weighted average grant date fair value, Beginning balance | $ 15.40 | |
Weighted average grant date fair value, Granted | 28.19 | |
Weighted average grant date fair value, Vested | 20 | |
Weighted average grant date fair value, Forfeited | 20.32 | |
Weighted average grant date fair value, Ending balance | 22.21 | $ 15.40 |
Weighted average grant date fair value, Units expected to vest | $ 22.21 |
Stock Option Plans and Stock-_7
Stock Option Plans and Stock-Based Compensation - Summary of Stock-Based Compensation Expense By Underlying Equity Instrument (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 4,489,000 | $ 4,883,000 | $ 14,098,000 | $ 14,138,000 |
Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 438,000 | 543,000 | 1,703,000 | 543,000 |
Incentive Unit Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 0 | 2,160,000 | 351,000 | 6,429,000 |
Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,232,000 | 723,000 | 3,868,000 | 3,210,000 |
Restricted Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 2,819,000 | $ 1,457,000 | $ 8,176,000 | $ 3,956,000 |
Stock Option Plans and Stock-_8
Stock Option Plans and Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 4,489 | $ 4,883 | $ 14,098 | $ 14,138 |
Subscription | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 286 | 284 | 830 | 658 |
Services and other | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 337 | 394 | 1,066 | 1,116 |
Research and Development | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 820 | 852 | 2,653 | 2,145 |
General and Administrative | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,710 | 1,953 | 4,725 | 5,988 |
Sales and Marketing | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 1,336 | $ 1,400 | $ 4,824 | $ 4,231 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | |
Income Tax Examination [Line Items] | |||||
U.S. federal corporate tax rate | 21.00% | ||||
GILTI tax liability | $ 0 | $ 0 | |||
Effective income tax rate | (249.30%) | 56.90% | 13.90% | 73.50% | |
Maximum | |||||
Income Tax Examination [Line Items] | |||||
U.S. federal corporate tax rate | 35.00% |
Net Income (Loss) Per Share A_3
Net Income (Loss) Per Share Attributable to Common Stockholders - Schedule of Calculation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator | ||||
Net Income (loss) | $ 3,668 | $ 1,808 | $ (13,919) | $ (1,473) |
Earnings allocated to unvested incentive units | (15) | |||
Net income (loss) attributable to common stockholders | $ 3,668 | $ 1,793 | $ (13,919) | $ (1,473) |
Denominator | ||||
Basic | 89,143 | 86,825 | 88,739 | 86,268 |
Diluted | 90,808 | 90,355 | 88,739 | 86,268 |
Net income (loss) attributable to common stockholders per share | ||||
Basic | $ 0.04 | $ 0.02 | $ (0.16) | $ (0.02) |
Diluted | $ 0.04 | $ 0.02 | $ (0.16) | $ (0.02) |
Net Income (Loss) Per Share A_4
Net Income (Loss) Per Share Attributable to Common Stockholders - Weighted Average Outstanding Shares of Common Stock Equivalents Excluded from the Computation of the Diluted Net Income (Loss) per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Weighted average outstanding shares of common stock equivalents excluded from the computation of diluted net loss per share | 1,876 | 37 | 4,984 | 5,684 |
Stock Options to Purchase Common Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Weighted average outstanding shares of common stock equivalents excluded from the computation of diluted net loss per share | 907 | 33 | 3,062 | 3,264 |
Non-Vested Incentive Units | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Weighted average outstanding shares of common stock equivalents excluded from the computation of diluted net loss per share | 1,139 | |||
RSUs Issued and Outstanding | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Weighted average outstanding shares of common stock equivalents excluded from the computation of diluted net loss per share | 969 | 4 | 1,855 | 1,224 |
ESPP | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Weighted average outstanding shares of common stock equivalents excluded from the computation of diluted net loss per share | 67 | 57 |
Net Income (Loss) Per Share A_5
Net Income (Loss) Per Share Attributable to Common Stockholders - Additional Information (Details) shares in Millions | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Earnings Per Share [Abstract] | |
Conversion spread | shares | 14.1 |
Debt Instrument, conversion price per share | $ / shares | $ 28.42 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event $ in Millions | Oct. 15, 2019USD ($) |
Orkus and Overwatch.ID | |
Subsequent Event [Line Items] | |
Acquisition date | Oct. 15, 2019 |
Orkus | |
Subsequent Event [Line Items] | |
Aggregate consideration paid | $ 16.5 |
Overwatch.ID | |
Subsequent Event [Line Items] | |
Aggregate consideration paid | $ 21 |