Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | BL | |
Entity Registrant Name | BLACKLINE, INC. | |
Entity Central Index Key | 1,666,134 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 53,442,300 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 30,864 | $ 31,104 | |
Marketable securities | 83,168 | 81,476 | |
Accounts receivable, net | 57,019 | 61,918 | |
Prepaid expenses and other current assets | 15,625 | 13,956 | |
Total current assets | 186,676 | 188,454 | |
Capitalized software development costs, net | 7,557 | 6,824 | |
Property and equipment, net | 13,280 | 12,769 | |
Intangible assets, net | 37,485 | 40,808 | |
Goodwill | 185,138 | 185,138 | |
Other assets | 28,379 | 26,820 | |
Total assets | 458,515 | 460,813 | |
Current liabilities: | |||
Accounts payable | 6,566 | 7,254 | |
Accrued expenses and other current liabilities | 12,240 | 20,874 | |
Deferred revenue | 110,733 | 104,184 | |
Short-term portion of contingent consideration | 2,008 | 2,008 | |
Total current liabilities | 131,547 | 134,320 | |
Contingent consideration | 3,970 | 3,858 | |
Deferred tax liabilities, net | 1,501 | 1,743 | |
Deferred revenue, noncurrent | 477 | 468 | |
Other long-term liabilities | 3,459 | 3,119 | |
Total liabilities | 140,954 | 143,508 | |
Commitments and contingencies (Note 6) | |||
Stockholders' equity: | |||
Common stock | 535 | 530 | |
Additional paid-in capital | 427,104 | 419,628 | |
Accumulated other comprehensive loss | (133) | (63) | |
Accumulated deficit | (109,945) | (102,790) | |
Total stockholders' equity | 317,561 | 317,305 | |
Total liabilities and stockholders' equity | $ 458,515 | $ 460,813 | |
[1] | See Note 3 for a summary of adjustments. |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | |||
Revenues | ||||
Subscription and support | $ 48,625 | $ 36,558 | [1] | |
Professional services | 2,659 | 1,623 | [1] | |
Total revenues | 51,284 | 38,181 | [1] | |
Cost of revenues | ||||
Subscription and support | 9,381 | 7,755 | [1] | |
Professional services | 2,225 | 1,455 | [1] | |
Total cost of revenues | 11,606 | 9,210 | [1] | |
Gross profit | 39,678 | 28,971 | [1] | |
Operating expenses | ||||
Sales and marketing | 29,227 | 21,820 | [1] | |
Research and development | 6,929 | 5,948 | [1] | |
General and administrative | 11,082 | 8,253 | [1] | |
Total operating expenses | 47,238 | 36,021 | [1] | |
Loss from operations | (7,560) | (7,050) | [1] | |
Other income (expense) | ||||
Interest income | 389 | 224 | [1] | |
Interest expense | (4) | (4) | [1] | |
Change in fair value of the common stock warrant liability | [1] | (1,000) | ||
Other income (expense), net | 385 | (780) | [1] | |
Loss before income taxes | (7,175) | (7,830) | [1] | |
Benefit from income taxes | (20) | (145) | [1] | |
Net loss | $ (7,155) | $ (7,685) | [1] | |
Basic net loss per share | $ (0.13) | $ (0.15) | [1] | |
Shares used to calculate basic net loss per share | 53,151 | 51,282 | [1] | |
Diluted net loss per share | $ (0.13) | $ (0.15) | [1] | |
Shares used to calculate diluted net loss per share | 53,151 | 51,282 | [1] | |
[1] | See Note 3 for a summary of adjustments. |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | [1] | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net loss | $ (7,155) | $ (7,685) | |
Other comprehensive income (loss) | |||
Net change in unrealized gain on marketable securities, net of tax of $0 for the quarters ended March 31, 2018 and 2017 | (70) | 2 | |
Other comprehensive income (loss) | (70) | 2 | |
Comprehensive loss | $ (7,225) | $ (7,683) | |
[1] | See Note 3 for a summary of adjustments. |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (PARENTHETICAL) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net change in unrealized gain on marketable securities, tax | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) - 3 months ended Mar. 31, 2018 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | ||
Beginning Balance at Dec. 31, 2017 | $ 317,305 | [1] | $ 530 | $ 419,628 | $ (63) | $ (102,790) | [1] |
Beginning Balance, shares at Dec. 31, 2017 | 52,983 | ||||||
Stock option exercises | 3,453 | $ 5 | 3,448 | ||||
Stock option exercises, shares | 459 | ||||||
Repurchases of common stock | (16) | (16) | |||||
Stock-based compensation | 4,044 | 4,044 | |||||
Other comprehensive loss | (70) | (70) | |||||
Net loss | (7,155) | (7,155) | |||||
Ending Balance at Mar. 31, 2018 | $ 317,561 | $ 535 | $ 427,104 | $ (133) | $ (109,945) | ||
Ending Balance, shares at Mar. 31, 2018 | 53,442 | ||||||
[1] | See Note 3 for a summary of adjustments. |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | |||
Cash flows from operating activities | ||||
Net loss | $ (7,155) | $ (7,685) | [1] | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 5,394 | 4,791 | [1] | |
Change in fair value of common stock warrant liability | [1] | 1,000 | ||
Change in fair value of contingent consideration | 112 | 93 | [1] | |
Stock-based compensation | 3,974 | 1,849 | [1] | |
(Accretion) amortization of purchase discounts/premiums on marketable securities, net | (67) | 63 | [1] | |
Net foreign currency (gains) losses | (59) | |||
Deferred income taxes | (242) | (235) | [1] | |
Provision for doubtful accounts receivable | (51) | |||
Changes in operating assets and liabilities, net of effects of the acquisition: | ||||
Accounts receivable | 5,058 | (1,595) | [1] | |
Prepaid expenses and other current assets | (1,891) | (1,277) | [1] | |
Other assets | (1,285) | (1,434) | [1] | |
Accounts payable | (929) | (3,253) | [1] | |
Accrued expenses and other current liabilities | (7,935) | (2,469) | [1] | |
Deferred revenue | 6,558 | 8,422 | [1] | |
Other long-term liabilities | 340 | 25 | [1] | |
Net cash provided by (used in) operating activities | 1,822 | (1,705) | [1] | |
Cash flows from investing activities | ||||
Purchases of marketable securities | (30,175) | |||
Proceeds from maturities of marketable securities | 28,480 | 5,200 | [1] | |
Capitalized software development costs | (1,653) | (1,083) | [1] | |
Purchases of property and equipment | (1,634) | (488) | [1] | |
Net cash provided by (used in) investing activities | (4,982) | 3,629 | [1] | |
Cash flows from financing activities | ||||
Principal payments on capital lease obligations | (443) | (549) | [1] | |
Proceeds from exercises of stock options | 3,453 | 65 | [1] | |
Repurchases of common stock | (16) | |||
Payments of initial public offering costs | [1] | (110) | ||
Net cash provided by (used in) financing activities | 2,994 | (594) | [1] | |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (166) | 1,330 | [1] | |
Cash, cash equivalents, and restricted cash, beginning of period | 31,504 | 22,518 | [1] | |
Cash, cash equivalents, and restricted cash, end of period | 31,338 | 23,848 | [1] | |
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | ||||
Cash and cash equivalents | 30,864 | 23,448 | [1] | |
Restricted cash included within prepaid expenses and other current assets | 200 | |||
Restricted cash included within other assets | 274 | 400 | [1] | |
Cash, cash equivalents, and restricted cash, end of period | 31,338 | 23,848 | [1] | |
Non-cash financing and investing activities | ||||
Stock-based compensation capitalized for software development | 70 | 30 | ||
Capitalized software development costs included in accounts payable and accrued expenses and other current liabilities at end of period | 199 | 45 | ||
Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities at end of period | $ 383 | $ 445 | ||
[1] | See Note 3 for a summary of adjustments. |
Company Overview
Company Overview | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Company Overview | Note 1 – Company Overview BlackLine, Inc. and its subsidiaries (the “Company” or “BlackLine”) provide financial accounting close solutions delivered primarily as Software as a Service (“SaaS”). The Company’s solutions enable its customers to address various aspects of their financial close process including account reconciliations, variance analysis of account balances, journal entry capabilities, and certain types of data matching capabilities. The Company is headquartered in Los Angeles, California and has offices in Chicago, Atlanta, New York, Vancouver, London, Paris, Frankfurt, Sydney, Melbourne, Kuala Lumpur, Netherlands, Poland, Romania, Singapore, and South Africa. |
Basis of Presentation, Signific
Basis of Presentation, Significant Accounting Policies and Recently-Issued Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation, Significant Accounting Policies and Recently-Issued Accounting Pronouncements | Note 2 – Basis of Presentation, Significant Accounting Policies and Recently-Issued Accounting Pronouncements The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the Securities and Exchange Commission (“SEC”) on March 8, 2018. The condensed consolidated financial statements are unaudited and have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the condensed consolidated financial statements. The condensed consolidated balance sheet at December 31, 2017 was derived from audited financial statements, but does not include all disclosures required by GAAP. The operating results for the quarter ended March 31, 2018 are not necessarily indicative of the results expected for the full year ending December 31, 2018. 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 the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Reclassifications Certain prior-period amounts have been reclassified to conform to the current-period presentation. These reclassifications had no impact on the previously-reported consolidated results of operations or stockholders' equity. Significant accounting policies The Company’s significant accounting policies are detailed in "Note 2: Summary of Significant Accounting Policies" of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. On January 1, 2018, the Company adopted Accounting Standards Codification No. 606, Revenue from Contracts with Customers, Revenue recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of subscription and support and professional services, which are generally capable of being distinct and accounted for as separate performance obligations. The Company’s agreements do not contain any refund provisions other than in the event of the Company’s non-performance or breach. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation Subscription and support revenue – Customers pay subscription and support fees for access to the Company’s SaaS platform generally for a one-year period. In more limited cases, customers may pay for up to three years in advance. Fees are based on a number of factors, including the solutions subscribed for by the customer and the number of users having access to the solutions. Subscription services, which allow customers to use hosted software over the contract period without taking possession of the software, are considered distinct performance obligations and are recognized ratably as the Company transfers control evenly over the contract period. Subscription and support revenue also includes software and related maintenance and support fees on legacy BlackLine solutions and Runbook Company B.V. (“Runbook”) software. Software licenses for legacy BlackLine solutions and Runbook software provide the customer with a right to use the software as it exists when made available to the customer. Customers may have purchased perpetual licenses or term based licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Software licenses are bundled with software maintenance and support, and the transaction price of the contract is allocated between the software licenses and the software maintenance and support. Maintenance and support convey rights to new software and upgrades released over the contract period and provide support, tools, and training to help customers deploy and use products more efficiently. Software licenses are considered distinct performance obligations and revenue is recognized at a point in time when control of the license has transferred and the license period commences. Maintenance and support are distinct performance obligations that are satisfied over time, and revenue is recognized ratably over the contract period as customers simultaneously consume and receive benefits. Professional services revenue – Professional services consist of implementation and consulting services to assist the Company’s customers as they deploy its solutions. These services are considered distinct performance obligations. Professional services do not result in significant customization of the subscription service. The Company applies the practical expedient to recognize professional services revenue when it has the right to invoice based on time and materials incurred. Significant judgments – The Company’s contracts with customers often include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is also required to determine the stand alone selling price (“SSP”) for each distinct performance obligation. The Company typically has more than one standalone selling price for its SaaS solutions and professional services. Additionally, management has determined that there are no third-party offerings reasonably comparable to the Company’s solutions. Therefore, the Company determines the standalone selling prices of subscriptions to the SaaS solutions and professional services based on numerous factors including the Company’s overall pricing objectives, geography, customer size and number of users, and discounting practices . The Company uses historical maintenance renewal fees to estimate SSP for maintenance and support fees bundled with software licenses. The Company uses the residual method to estimate SSP of software licenses, because license pricing is highly variable and not sold separately from maintenance and support. Contract balances – Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records an unbilled receivable when revenue is recognized prior to invoicing, and deferred revenue when revenue is recognized subsequent to invoicing. The Company generally invoices customers annually at the beginning of each annual contract period. The Company records a receivable related to revenue recognized for multi-year agreements as it has an unconditional right to invoice and receive payment in the future related to those services. Deferred revenue is comprised mainly of billings related to the Company’s SaaS solutions in advance of revenue being recognized. Deferred revenue also includes payments for: professional services to be performed in the future; legacy BlackLine maintenance and support; Runbook maintenance, support, license, and implementation; and other offerings for which the Company has been paid in advance and earns the revenue when the Company transfers control of the product or service. Changes in deferred revenue for the quarters ended March 31, 2018 and 2017 were primarily due to additional billings in the quarters, partially offset by revenue recognized of $43.7 million and $32.3 million, respectively, that was previously included in the deferred revenue balance at December 31, 2017 and 2016, respectively. The transaction price is generally determined by the stated fixed fees in the contract, excluding any related sales taxes. Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (“contracted not recognized”), which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted not recognized revenue was $233.3 million at March 31, 2018, of which the Company expects to recognize approximately 63% over the next 12 months and the remainder thereafter. Fees are generally due and payable upon receipt of invoice or within 30 days. None of the Company’s contracts includes a significant financing component. Assets recognized from the costs to obtain a contract with a customer – The Company recognizes an asset for the incremental and recoverable costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be one year or longer. The Company has determined that certain sales incentive programs to the Company’s employees ("deferred customer contract acquisition costs") and its partners ("partner referral fees") meet the requirements to be capitalized. Deferred customer acquisition costs related to new revenue contracts and upsells are deferred and then amortized straight line over the expected period of benefit that the Company has determined to be five years, based upon both the product turnover rate and estimated customer life. Partner referral fees are deferred and then amortized on a straight-line basis over the related contractual period, as the fees for renewals are commensurate with fees incurred for the initial contract. Deferred customer acquisition costs and partner referral fees are included within other assets and prepaid expenses and other current assets, respectively, on the condensed consolidated balance sheets. Amortization expense related to the asset recognized from the costs to obtain a contract with a customer is included in sales and marketing expenses in the condensed consolidated statements of operations and was $5.3 million and $3.3 million for the quarters ended March 31, 2018 and 2017, respectively. Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued new guidance which significantly changes the accounting for leases. The new guidance requires a lessee recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. For income statement purposes, the new guidance retained a dual model, requiring leases to be classified as either operating or financing. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern similar to existing capital lease guidance. For statement of cash flow purposes, the new guidance also retained the existing dual method, where cash payments for operating leases are reflected in cash flows from operating activities and principal and interest payments for finance leases are reflected in cash flows from financing activities and cash flows from operating activities, respectively. The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The new guidance requires the recognition and measurement of leases at the beginning of the earliest period presented using a modified retrospective approach. The use of the modified retrospective approach allows an entity to use a number of practical expedients in the application of this new guidance. Although the Company is evaluating the impact of adopting this guidance on its consolidated financial statements, the Company expects that most of its operating lease commitments will be recognized as operating lease liabilities and right-of-use assets upon adoption of the new guidance. In June 2016, the FASB issued guidance which requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. This guidance amends the accounting for credit losses for available-for-sale securities and purchased financial assets with credit deterioration. This guidance is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for any interim or annual period after December 15, 2018. The Company has not determined the impact of this guidance on its consolidated financial statements. In March 2017, the FASB issued guidance which shortens the amortization period for certain purchased callable debt securities held at a premium. Under this new guidance, an entity would shorten the amortization period of the premium to the earliest call date. This guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company has not determined the impact of this guidance on its consolidated financial statements. In July 2017, the FASB issued guidance which changes the classification analysis of certain equity-linked financial instruments or embedded features, for example warrants and convertible debt, with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument or embedded conversion option no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. This new guidance also amends existing earnings per share guidance to recognize the effect of the down round feature when it is triggered. This guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. If the guidance is adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. This new guidance may be adopted on a modified retrospective approach by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period in which the guidance is effective or on a full retrospective basis. The Company’s warrants to purchase common stock, which were exercised in May 2017, were liability classified and recorded at fair value each period as a result of down round features. The Company is assessing the impact of this guidance on its consolidated financial statements and its adoption method. In February 2018, the FASB issued an Accounting Standard Update (“ASU”) that provides companies with an option to reclassify stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act (the "Tax Act") from accumulated other comprehensive income to retained earnings. The guidance will be effective for the Company beginning in the first quarter of 2019 with early adoption permitted, and would be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the tax rate as a result of the Tax Act is recognized. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. Recently adopted accounting pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued guidance related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the new revenue guidance effective January 1, 2018 using the full retrospective method to restate each prior reporting period presented. The Company implemented internal controls and key system functionality to enable the preparation of financial information and adoption. The most significant impact of the standard relates to the Company’s accounting for the incremental costs of obtaining a contract, such as sales commissions. Under the new revenue standard, commissions are recognized over an estimated period of benefit of five years rather than over the non-cancelable contract term. The standard also impacted the Company’s accounting for on-premise solutions which includes software license, maintenance and support fees on Runbook solutions. Under the new guidance, the Company recognizes software license revenue at the time of delivery rather than over the maintenance term. Revenue recognition related to subscription, support, and professional services fees for access to the Company’s SaaS platform is substantially unchanged. Adoption of the standard using the full retrospective method required the Company to restate certain previously reported results; see Note 3 – “Revenues” for additional information regarding the impacts to previously reported results. In November 2016, the FASB issued guidance which requires that restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning and ending total amounts shown on the statement of cash flows. The Company adopted this guidance effective January 1, 2018, and all prior periods have been restated, as required by the new standard. In February 2017, the FASB issued guidance which simplifies the subsequent measurement of goodwill by no longer requiring an entity to determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under this new guidance, an entity would perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity would consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. Under the new guidance, an entity continues to have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this standard effective January 1, 2018, and the adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In May 2017, the FASB issued guidance to clarify which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Under this guidance an entity should account for the effects of a modification unless all the following are met: 1) The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification; 2) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and 3) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The Company adopted this standard effective January 1, 2018, and will apply this guidance to modifications of stock-based compensation arrangements, if any, after this date. T he adoption of this standard did not have a material impact on the Company’s consolidated financial statements. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenues | Note 3 – Revenues The Company adopted the new revenue standard effective January 1, 2018 using the full retrospective method to restate each prior reporting period presented. Impacts to previously reported results The following table presents the effect of the adoption of ASC 606 on the Company’s condensed consolidated balance sheet (unaudited): December 31, 2017 As Reported Adjustments As Adjusted (in thousands) Accounts receivable, net $ 61,589 $ 329 $ 61,918 Prepaid expenses and other current assets $ 19,785 $ (5,829 ) $ 13,956 Total current assets $ 193,954 $ (5,500 ) $ 188,454 Other assets $ 1,391 $ 25,429 $ 26,820 Total assets $ 440,884 $ 19,929 $ 460,813 Deferred revenue $ 106,903 $ (2,719 ) $ 104,184 Total current liabilities $ 137,039 $ (2,719 ) $ 134,320 Deferred tax liabilities, net $ 1,328 $ 415 $ 1,743 Deferred revenue, noncurrent $ 912 $ (444 ) $ 468 Total liabilities $ 146,256 $ (2,748 ) $ 143,508 Accumulated deficit $ (125,467 ) $ 22,677 $ (102,790 ) Total stockholders' equity $ 294,628 $ 22,677 $ 317,305 Total liabilities and stockholders' equity $ 440,884 $ 19,929 $ 460,813 The following table presents the effect of the adoption of ASC 606 on the Company’s condensed consolidated statement of operations (unaudited): Quarter Ended March 31, 2017 As Reported Adjustments As Adjusted (in thousands, except per share data) Revenues Subscription and support $ 37,051 $ (493 ) $ 36,558 Professional services 1,583 40 1,623 Total revenues $ 38,634 $ (453 ) $ 38,181 Cost of revenues Subscription and support $ 7,777 $ (22 ) $ 7,755 Total cost of revenues $ 9,232 $ (22 ) $ 9,210 Gross profit $ 29,402 $ (431 ) $ 28,971 Operating expenses Sales and marketing $ 23,496 $ (1,676 ) $ 21,820 Loss from operations $ (8,295 ) $ 1,245 $ (7,050 ) Loss before income taxes $ (9,075 ) $ 1,245 $ (7,830 ) Benefit from income taxes $ (65 ) $ (80 ) $ (145 ) Net loss $ (9,010 ) $ 1,325 $ (7,685 ) Basic net loss per share $ (0.18 ) $ 0.03 $ (0.15 ) Diluted net loss per share $ (0.18 ) $ 0.03 $ (0.15 ) The following table presents the effect of the adoption of ASC 606 on the Company’s condensed consolidated statement of cash flows (unaudited): Quarter Ended March 31, 2017 As Reported Adjustments As Adjusted (in thousands) Net loss $ (9,010 ) $ 1,325 $ (7,685 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Deferred income taxes $ (162 ) $ (73 ) $ (235 ) Prepaid expenses and other current assets $ (1,029 ) $ (248 ) $ (1,277 ) Other assets $ (22 ) $ (1,412 ) $ (1,434 ) Deferred revenue $ 8,014 $ 408 $ 8,422 There was no effect to net cash provided by (used in) operating, investing, or financing activities. Disaggregation of Revenues The Company disaggregates its revenue from contracts with customers by geographic location and market, as it believes it best depicts how the nature, amount, timing, and uncertainty of its revenues and cash flows are affected by economic factors. The following table sets forth the Company’s revenues by geographic region (in thousands): Quarter Ended March 31, 2018 2017 *As Adjusted United States $ 41,012 $ 31,215 International 10,272 6,966 $ 51,284 $ 38,181 The following table sets forth the Company’s revenues by market (in thousands): Quarter Ended March 31, 2018 2017 *As Adjusted Enterprise $ 42,511 $ 32,038 Mid-market 8,773 6,143 $ 51,284 $ 38,181 |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Note 4 – Balance Sheet Components Investments in Marketable Securities Investments in marketable securities presented within current assets on the consolidated balance sheet consisted of the following: March 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Marketable securities U.S. treasury securities $ 21,770 $ — $ (36 ) $ 21,734 Corporate bonds 33,113 — (97 ) 33,016 Commercial paper 28,418 — — 28,418 $ 83,301 $ — $ (133 ) $ 83,168 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Marketable securities U.S. treasury securities $ 21,454 $ — $ (19 ) $ 21,435 Corporate bonds 32,437 — (43 ) 32,394 Commercial paper 25,048 — — 25,048 Asset-backed securities 2,600 — (1 ) 2,599 $ 81,539 $ — $ (63 ) $ 81,476 During the quarters ended March 31, 2018 and 2017, there were no sales of marketable securities and, accordingly, there were no realized gains or losses recognized in the Company’s unaudited condensed consolidated statements of operations. Net gains and losses related to maturities of marketable securities that were reclassified from accumulated other comprehensive loss to earnings in the unaudited condensed consolidated statements of operations were not material for the quarters ended March 31, 2018 and 2017. The Company’s marketable securities have a contractual maturity of less than two years. The amortized cost and fair values of marketable securities, by remaining contractual maturity, were as follows: March 31, 2018 Amortized Cost Fair Value (in thousands) Maturing within 1 year $ 62,962 $ 62,892 Maturing between 1 year and 2 years 20,339 20,276 $ 83,301 $ 83,168 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): March 31, December 31, 2018 2017 Partner referral fees $ 7,873 $ 7,945 Restricted cash 200 400 Other prepaid expenses and other current assets 7,552 5,611 $ 15,625 $ 13,956 Other Assets Other assets consisted of the following (in thousands): March 31, December 31, 2018 2017 Deferred customer contract acquisition costs $ 26,378 $ 25,338 Restricted cash 274 — Other assets 1,727 1,482 $ 28,379 $ 26,820 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities were comprised of the following (in thousands): March 31, December 31, 2018 2017 Accrued salaries and employee benefits $ 7,494 $ 11,945 Partner referral fees — 2,991 Accrued income and other taxes payable 1,468 1,798 Accrued professional services costs 575 407 Short-term portion of capital lease — 443 Short-term tenant improvement allowance 475 475 Other accrued expenses and current liabilities 2,228 2,815 $ 12,240 $ 20,874 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 5 – Fair Value Measurements The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis by level, within the fair value hierarchy. Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): March 31, 2018 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 22,664 $ — $ — $ 22,664 Marketable securities U.S. treasury securities 21,734 — — 21,734 Corporate bonds — 33,016 — 33,016 Commercial paper — 28,418 — 28,418 Total assets $ 44,398 $ 61,434 $ — $ 105,832 Liabilities Contingent consideration $ — $ — $ 5,978 $ 5,978 Total liabilities $ — $ — $ 5,978 $ 5,978 December 31, 2017 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 21,247 $ — $ — $ 21,247 Marketable securities U.S. treasury securities 21,435 — — 21,435 Corporate bonds — 32,394 — 32,394 Commercial paper — 25,048 — 25,048 Asset-backed securities — 2,599 — 2,599 Total assets $ 42,682 $ 60,041 $ — $ 102,723 Liabilities Contingent consideration $ — $ — $ 5,866 $ 5,866 Total liabilities $ — $ — $ 5,866 $ 5,866 The following table summarizes the changes in the common stock warrant liability (in thousands): Quarter Ended March 31, 2017 Beginning fair value $ 11,380 Change in fair value 1,000 Ending fair value $ 12,380 In May 2017, warrants to purchase 499,999 shares of common stock were net exercised resulting in the issuance of 428,033 shares of common stock and, accordingly, there will be no further changes in the fair value. The following table summarizes the changes in the contingent consideration liability (in thousands): Quarter Ended March 31, 2018 2017 Beginning fair value $ 5,866 $ 5,238 Change in fair value 112 93 Ending fair value $ 5,978 $ 5,331 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 6 – Commitments and Contingencies Operating leases —The Company has various non-cancelable operating leases for its corporate and international offices. These leases expire at various times through 2024. Certain lease agreements contain renewal options, rent abatement, and escalation clauses. The Company recognizes rent expense on a straight-line basis over the lease term, commencing when the Company takes possession of the property. Certain of the Company’s office leases entitle the Company to receive a tenant allowance from the landlord. The Company records tenant allowances as a deferred rent credit, which the Company amortizes on a straight-line basis, as a reduction of rent expense, over the term of the underlying lease. Contingent consideration —On September 3, 2013, BlackLine Systems, Inc. was acquired by BlackLine, Inc. (the “2013 Acquisition”). In conjunction with the 2013 Acquisition, option holders of BlackLine Systems, Inc. were allowed to cancel their stock option rights and receive a cash payment equal to the amount of calculated gain (less applicable expense and other items) had they exercised their stock options and then sold their common shares as part of the 2013 Acquisition. As a condition of the 2013 Acquisition, the Company is required to pay additional cash consideration to certain equity holders if the Company realizes a tax benefit from the use of net operating losses generated from the stock option exercises concurrent with the 2013 Acquisition. The maximum contingent cash consideration to be distributed is $8.0 million. The fair value of the contingent consideration was $6.0 million and $5.9 million at March 31, 2018 and December 31, 2017, respectively. Litigation —From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. The Company is not currently a party to any legal proceedings, nor is it aware of any pending or threatened litigation, that would have a material adverse effect on the Company’s business, operating results, cash flows, or financial condition should such litigation be resolved unfavorably. Indemnification —In the ordinary course of business, the Company may provide indemnification of varying scope and terms to customers, vendors, investors, directors, and officers with respect to certain matters, including, but not limited to, losses arising out of its breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. The Company has never paid a material claim, nor has it been sued in connection with these indemnification arrangements. At March 31, 2018 and December 31, 2017, the Company has not accrued a liability for these indemnification arrangements because the likelihood of incurring a payment obligation, if any, in connection with these indemnification arrangements is not probable or reasonably estimable. |
Equity Awards
Equity Awards | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Awards | Note 7 – Equity Awards Stock-based compensation expense Stock-based compensation expense recorded in the Company’s unaudited condensed consolidated statements of operations was as follows (in thousands): Quarter Ended March 31, 2018 2017 Cost of revenues $ 838 $ 250 Sales and marketing 1,437 660 Research and development 429 83 General and administrative 1,270 856 $ 3,974 $ 1,849 Stock-based compensation capitalized as an asset was $0.1 million and $30,000 in the quarters ended March 31, 2018 and 2017, respectively. Restricted stock units The following table summarizes activity for restricted stock units (in thousands): Nonvested at December 31, 2017 2 Granted 963 Forfeited/canceled (5 ) Nonvested at March 31, 2018 960 Stock options The following table summarizes activity for awards that contain service-only vesting conditions : Outstanding at December 31, 2017 5,019 Granted 551 Exercised (462 ) Forfeited/canceled (91 ) Outstanding at March 31, 2018 5,017 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 – Income Taxes In determining quarterly provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date loss, adjusted for discrete items arising in that quarter. The Company’s annual estimated effective tax rate differs from the U.S. federal statutory rate of 21% primarily as a result of state taxes, foreign taxes, and changes in the Company’s valuation allowance for domestic income taxes. For the quarters ended March 31, 2018 and 2017, the Company recorded $20,000 and $0.1 million in income tax benefit, respectively. The income tax benefits in both periods were a result of the deferred tax liabilities recorded for the acquired intangibles of the Runbook Acquisition exceeding deferred tax assets related to net operating loss. |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Note 9 – Net Loss per Share The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): Quarter Ended March 31, 2018 2017 Numerator: Net loss $ (7,155 ) $ (7,685 ) Denominator: Weighted average shares 53,151 51,282 Add: Dilutive effect of securities — — Shares used to calculate diluted net loss per share 53,151 51,282 Basic net loss per share $ (0.13 ) $ (0.15 ) Diluted net loss per share $ (0.13 ) $ (0.15 ) The following potentially dilutive shares were excluded from the calculation of diluted net loss per share attributable to common stockholders because they were anti-dilutive (in thousands): March 31, 2018 2017 Stock options with service-only vesting conditions 5,017 5,870 Stock options with performance conditions 683 683 Common stock warrants — 500 Restricted stock units 960 — Total shares excluded from net loss per share 6,660 7,053 |
Basis of Presentation, Signif17
Basis of Presentation, Significant Accounting Policies and Recently-Issued Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
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 the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. |
Reclassifications | Reclassifications Certain prior-period amounts have been reclassified to conform to the current-period presentation. These reclassifications had no impact on the previously-reported consolidated results of operations or stockholders' equity. |
Revenue Recognition | Revenue recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of subscription and support and professional services, which are generally capable of being distinct and accounted for as separate performance obligations. The Company’s agreements do not contain any refund provisions other than in the event of the Company’s non-performance or breach. The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation Subscription and support revenue – Customers pay subscription and support fees for access to the Company’s SaaS platform generally for a one-year period. In more limited cases, customers may pay for up to three years in advance. Fees are based on a number of factors, including the solutions subscribed for by the customer and the number of users having access to the solutions. Subscription services, which allow customers to use hosted software over the contract period without taking possession of the software, are considered distinct performance obligations and are recognized ratably as the Company transfers control evenly over the contract period. Subscription and support revenue also includes software and related maintenance and support fees on legacy BlackLine solutions and Runbook Company B.V. (“Runbook”) software. Software licenses for legacy BlackLine solutions and Runbook software provide the customer with a right to use the software as it exists when made available to the customer. Customers may have purchased perpetual licenses or term based licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Software licenses are bundled with software maintenance and support, and the transaction price of the contract is allocated between the software licenses and the software maintenance and support. Maintenance and support convey rights to new software and upgrades released over the contract period and provide support, tools, and training to help customers deploy and use products more efficiently. Software licenses are considered distinct performance obligations and revenue is recognized at a point in time when control of the license has transferred and the license period commences. Maintenance and support are distinct performance obligations that are satisfied over time, and revenue is recognized ratably over the contract period as customers simultaneously consume and receive benefits. Professional services revenue – Professional services consist of implementation and consulting services to assist the Company’s customers as they deploy its solutions. These services are considered distinct performance obligations. Professional services do not result in significant customization of the subscription service. The Company applies the practical expedient to recognize professional services revenue when it has the right to invoice based on time and materials incurred. Significant judgments – The Company’s contracts with customers often include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is also required to determine the stand alone selling price (“SSP”) for each distinct performance obligation. The Company typically has more than one standalone selling price for its SaaS solutions and professional services. Additionally, management has determined that there are no third-party offerings reasonably comparable to the Company’s solutions. Therefore, the Company determines the standalone selling prices of subscriptions to the SaaS solutions and professional services based on numerous factors including the Company’s overall pricing objectives, geography, customer size and number of users, and discounting practices . The Company uses historical maintenance renewal fees to estimate SSP for maintenance and support fees bundled with software licenses. The Company uses the residual method to estimate SSP of software licenses, because license pricing is highly variable and not sold separately from maintenance and support. Contract balances – Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records an unbilled receivable when revenue is recognized prior to invoicing, and deferred revenue when revenue is recognized subsequent to invoicing. The Company generally invoices customers annually at the beginning of each annual contract period. The Company records a receivable related to revenue recognized for multi-year agreements as it has an unconditional right to invoice and receive payment in the future related to those services. Deferred revenue is comprised mainly of billings related to the Company’s SaaS solutions in advance of revenue being recognized. Deferred revenue also includes payments for: professional services to be performed in the future; legacy BlackLine maintenance and support; Runbook maintenance, support, license, and implementation; and other offerings for which the Company has been paid in advance and earns the revenue when the Company transfers control of the product or service. Changes in deferred revenue for the quarters ended March 31, 2018 and 2017 were primarily due to additional billings in the quarters, partially offset by revenue recognized of $43.7 million and $32.3 million, respectively, that was previously included in the deferred revenue balance at December 31, 2017 and 2016, respectively. The transaction price is generally determined by the stated fixed fees in the contract, excluding any related sales taxes. Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (“contracted not recognized”), which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted not recognized revenue was $233.3 million at March 31, 2018, of which the Company expects to recognize approximately 63% over the next 12 months and the remainder thereafter. Fees are generally due and payable upon receipt of invoice or within 30 days. None of the Company’s contracts includes a significant financing component. Assets recognized from the costs to obtain a contract with a customer – The Company recognizes an asset for the incremental and recoverable costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be one year or longer. The Company has determined that certain sales incentive programs to the Company’s employees ("deferred customer contract acquisition costs") and its partners ("partner referral fees") meet the requirements to be capitalized. Deferred customer acquisition costs related to new revenue contracts and upsells are deferred and then amortized straight line over the expected period of benefit that the Company has determined to be five years, based upon both the product turnover rate and estimated customer life. Partner referral fees are deferred and then amortized on a straight-line basis over the related contractual period, as the fees for renewals are commensurate with fees incurred for the initial contract. Deferred customer acquisition costs and partner referral fees are included within other assets and prepaid expenses and other current assets, respectively, on the condensed consolidated balance sheets. Amortization expense related to the asset recognized from the costs to obtain a contract with a customer is included in sales and marketing expenses in the condensed consolidated statements of operations and was $5.3 million and $3.3 million for the quarters ended March 31, 2018 and 2017, respectively. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued new guidance which significantly changes the accounting for leases. The new guidance requires a lessee recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. For income statement purposes, the new guidance retained a dual model, requiring leases to be classified as either operating or financing. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern similar to existing capital lease guidance. For statement of cash flow purposes, the new guidance also retained the existing dual method, where cash payments for operating leases are reflected in cash flows from operating activities and principal and interest payments for finance leases are reflected in cash flows from financing activities and cash flows from operating activities, respectively. The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The new guidance requires the recognition and measurement of leases at the beginning of the earliest period presented using a modified retrospective approach. The use of the modified retrospective approach allows an entity to use a number of practical expedients in the application of this new guidance. Although the Company is evaluating the impact of adopting this guidance on its consolidated financial statements, the Company expects that most of its operating lease commitments will be recognized as operating lease liabilities and right-of-use assets upon adoption of the new guidance. In June 2016, the FASB issued guidance which requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. This guidance amends the accounting for credit losses for available-for-sale securities and purchased financial assets with credit deterioration. This guidance is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for any interim or annual period after December 15, 2018. The Company has not determined the impact of this guidance on its consolidated financial statements. In March 2017, the FASB issued guidance which shortens the amortization period for certain purchased callable debt securities held at a premium. Under this new guidance, an entity would shorten the amortization period of the premium to the earliest call date. This guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company has not determined the impact of this guidance on its consolidated financial statements. In July 2017, the FASB issued guidance which changes the classification analysis of certain equity-linked financial instruments or embedded features, for example warrants and convertible debt, with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument or embedded conversion option no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. This new guidance also amends existing earnings per share guidance to recognize the effect of the down round feature when it is triggered. This guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. If the guidance is adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. This new guidance may be adopted on a modified retrospective approach by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period in which the guidance is effective or on a full retrospective basis. The Company’s warrants to purchase common stock, which were exercised in May 2017, were liability classified and recorded at fair value each period as a result of down round features. The Company is assessing the impact of this guidance on its consolidated financial statements and its adoption method. In February 2018, the FASB issued an Accounting Standard Update (“ASU”) that provides companies with an option to reclassify stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act (the "Tax Act") from accumulated other comprehensive income to retained earnings. The guidance will be effective for the Company beginning in the first quarter of 2019 with early adoption permitted, and would be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the tax rate as a result of the Tax Act is recognized. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. |
Recently Adopted Accounting Pronouncements | Recently adopted accounting pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued guidance related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the new revenue guidance effective January 1, 2018 using the full retrospective method to restate each prior reporting period presented. The Company implemented internal controls and key system functionality to enable the preparation of financial information and adoption. The most significant impact of the standard relates to the Company’s accounting for the incremental costs of obtaining a contract, such as sales commissions. Under the new revenue standard, commissions are recognized over an estimated period of benefit of five years rather than over the non-cancelable contract term. The standard also impacted the Company’s accounting for on-premise solutions which includes software license, maintenance and support fees on Runbook solutions. Under the new guidance, the Company recognizes software license revenue at the time of delivery rather than over the maintenance term. Revenue recognition related to subscription, support, and professional services fees for access to the Company’s SaaS platform is substantially unchanged. Adoption of the standard using the full retrospective method required the Company to restate certain previously reported results; see Note 3 – “Revenues” for additional information regarding the impacts to previously reported results. In November 2016, the FASB issued guidance which requires that restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning and ending total amounts shown on the statement of cash flows. The Company adopted this guidance effective January 1, 2018, and all prior periods have been restated, as required by the new standard. In February 2017, the FASB issued guidance which simplifies the subsequent measurement of goodwill by no longer requiring an entity to determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under this new guidance, an entity would perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity would consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. Under the new guidance, an entity continues to have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this standard effective January 1, 2018, and the adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In May 2017, the FASB issued guidance to clarify which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Under this guidance an entity should account for the effects of a modification unless all the following are met: 1) The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification; 2) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and 3) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The Company adopted this standard effective January 1, 2018, and will apply this guidance to modifications of stock-based compensation arrangements, if any, after this date. T he adoption of this standard did not have a material impact on the Company’s consolidated financial statements. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Schedule of Disaggregation of Revenues by Geographic Region and Market | The following table sets forth the Company’s revenues by geographic region (in thousands): The following table sets forth the Company’s revenues by market (in thousands): |
Adoption of ASC 606 | |
Effect of Adoption of ASC 606 on Impacts to Previously Reported Results | Impacts to previously reported results The following table presents the effect of the adoption of ASC 606 on the Company’s condensed consolidated balance sheet (unaudited): December 31, 2017 As Reported Adjustments As Adjusted (in thousands) Accounts receivable, net $ 61,589 $ 329 $ 61,918 Prepaid expenses and other current assets $ 19,785 $ (5,829 ) $ 13,956 Total current assets $ 193,954 $ (5,500 ) $ 188,454 Other assets $ 1,391 $ 25,429 $ 26,820 Total assets $ 440,884 $ 19,929 $ 460,813 Deferred revenue $ 106,903 $ (2,719 ) $ 104,184 Total current liabilities $ 137,039 $ (2,719 ) $ 134,320 Deferred tax liabilities, net $ 1,328 $ 415 $ 1,743 Deferred revenue, noncurrent $ 912 $ (444 ) $ 468 Total liabilities $ 146,256 $ (2,748 ) $ 143,508 Accumulated deficit $ (125,467 ) $ 22,677 $ (102,790 ) Total stockholders' equity $ 294,628 $ 22,677 $ 317,305 Total liabilities and stockholders' equity $ 440,884 $ 19,929 $ 460,813 The following table presents the effect of the adoption of ASC 606 on the Company’s condensed consolidated statement of operations (unaudited): Quarter Ended March 31, 2017 As Reported Adjustments As Adjusted (in thousands, except per share data) Revenues Subscription and support $ 37,051 $ (493 ) $ 36,558 Professional services 1,583 40 1,623 Total revenues $ 38,634 $ (453 ) $ 38,181 Cost of revenues Subscription and support $ 7,777 $ (22 ) $ 7,755 Total cost of revenues $ 9,232 $ (22 ) $ 9,210 Gross profit $ 29,402 $ (431 ) $ 28,971 Operating expenses Sales and marketing $ 23,496 $ (1,676 ) $ 21,820 Loss from operations $ (8,295 ) $ 1,245 $ (7,050 ) Loss before income taxes $ (9,075 ) $ 1,245 $ (7,830 ) Benefit from income taxes $ (65 ) $ (80 ) $ (145 ) Net loss $ (9,010 ) $ 1,325 $ (7,685 ) Basic net loss per share $ (0.18 ) $ 0.03 $ (0.15 ) Diluted net loss per share $ (0.18 ) $ 0.03 $ (0.15 ) The following table presents the effect of the adoption of ASC 606 on the Company’s condensed consolidated statement of cash flows (unaudited): Quarter Ended March 31, 2017 As Reported Adjustments As Adjusted (in thousands) Net loss $ (9,010 ) $ 1,325 $ (7,685 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Deferred income taxes $ (162 ) $ (73 ) $ (235 ) Prepaid expenses and other current assets $ (1,029 ) $ (248 ) $ (1,277 ) Other assets $ (22 ) $ (1,412 ) $ (1,434 ) Deferred revenue $ 8,014 $ 408 $ 8,422 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Investments in Marketable Securities | Investments in marketable securities presented within current assets on the consolidated balance sheet consisted of the following: March 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Marketable securities U.S. treasury securities $ 21,770 $ — $ (36 ) $ 21,734 Corporate bonds 33,113 — (97 ) 33,016 Commercial paper 28,418 — — 28,418 $ 83,301 $ — $ (133 ) $ 83,168 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Marketable securities U.S. treasury securities $ 21,454 $ — $ (19 ) $ 21,435 Corporate bonds 32,437 — (43 ) 32,394 Commercial paper 25,048 — — 25,048 Asset-backed securities 2,600 — (1 ) 2,599 $ 81,539 $ — $ (63 ) $ 81,476 |
Summary of Amortized Cost and Fair Values of Marketable Securities, by Remaining Contractual Maturity | The amortized cost and fair values of marketable securities, by remaining contractual maturity, were as follows: March 31, 2018 Amortized Cost Fair Value (in thousands) Maturing within 1 year $ 62,962 $ 62,892 Maturing between 1 year and 2 years 20,339 20,276 $ 83,301 $ 83,168 |
Summary of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): March 31, December 31, 2018 2017 Partner referral fees $ 7,873 $ 7,945 Restricted cash 200 400 Other prepaid expenses and other current assets 7,552 5,611 $ 15,625 $ 13,956 |
Schedule of Other Assets | Other assets consisted of the following (in thousands): March 31, December 31, 2018 2017 Deferred customer contract acquisition costs $ 26,378 $ 25,338 Restricted cash 274 — Other assets 1,727 1,482 $ 28,379 $ 26,820 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities were comprised of the following (in thousands): March 31, December 31, 2018 2017 Accrued salaries and employee benefits $ 7,494 $ 11,945 Partner referral fees — 2,991 Accrued income and other taxes payable 1,468 1,798 Accrued professional services costs 575 407 Short-term portion of capital lease — 443 Short-term tenant improvement allowance 475 475 Other accrued expenses and current liabilities 2,228 2,815 $ 12,240 $ 20,874 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis by level, within the fair value hierarchy. Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands): March 31, 2018 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 22,664 $ — $ — $ 22,664 Marketable securities U.S. treasury securities 21,734 — — 21,734 Corporate bonds — 33,016 — 33,016 Commercial paper — 28,418 — 28,418 Total assets $ 44,398 $ 61,434 $ — $ 105,832 Liabilities Contingent consideration $ — $ — $ 5,978 $ 5,978 Total liabilities $ — $ — $ 5,978 $ 5,978 December 31, 2017 Level 1 Level 2 Level 3 Total Cash equivalents Money market funds $ 21,247 $ — $ — $ 21,247 Marketable securities U.S. treasury securities 21,435 — — 21,435 Corporate bonds — 32,394 — 32,394 Commercial paper — 25,048 — 25,048 Asset-backed securities — 2,599 — 2,599 Total assets $ 42,682 $ 60,041 $ — $ 102,723 Liabilities Contingent consideration $ — $ — $ 5,866 $ 5,866 Total liabilities $ — $ — $ 5,866 $ 5,866 |
Common Stock Warrant Liability | |
Summary of Changes in Common Stock Warrant Liability and Contingent Consideration Liability | The following table summarizes the changes in the common stock warrant liability (in thousands): Quarter Ended March 31, 2017 Beginning fair value $ 11,380 Change in fair value 1,000 Ending fair value $ 12,380 |
Contingent Consideration | |
Summary of Changes in Common Stock Warrant Liability and Contingent Consideration Liability | The following table summarizes the changes in the contingent consideration liability (in thousands): Quarter Ended March 31, 2018 2017 Beginning fair value $ 5,866 $ 5,238 Change in fair value 112 93 Ending fair value $ 5,978 $ 5,331 |
Equity Awards (Tables)
Equity Awards (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock-Based Compensation Expense | Stock-based compensation expense recorded in the Company’s unaudited condensed consolidated statements of operations was as follows (in thousands): Quarter Ended March 31, 2018 2017 Cost of revenues $ 838 $ 250 Sales and marketing 1,437 660 Research and development 429 83 General and administrative 1,270 856 $ 3,974 $ 1,849 |
Summary of Restricted Stock Units Activity | The following table summarizes activity for restricted stock units (in thousands): Nonvested at December 31, 2017 2 Granted 963 Forfeited/canceled (5 ) Nonvested at March 31, 2018 960 |
Summary of Stock Options Activity | The following table summarizes activity for awards that contain service-only vesting conditions : Outstanding at December 31, 2017 5,019 Granted 551 Exercised (462 ) Forfeited/canceled (91 ) Outstanding at March 31, 2018 5,017 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Loss per Share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): Quarter Ended March 31, 2018 2017 Numerator: Net loss $ (7,155 ) $ (7,685 ) Denominator: Weighted average shares 53,151 51,282 Add: Dilutive effect of securities — — Shares used to calculate diluted net loss per share 53,151 51,282 Basic net loss per share $ (0.13 ) $ (0.15 ) Diluted net loss per share $ (0.13 ) $ (0.15 ) |
Schedule of Potentially Dilutive Shares Excluded From Calculation of Diluted Net Loss Per Share Attributable to Common Stockholders | The following potentially dilutive shares were excluded from the calculation of diluted net loss per share attributable to common stockholders because they were anti-dilutive (in thousands): March 31, 2018 2017 Stock options with service-only vesting conditions 5,017 5,870 Stock options with performance conditions 683 683 Common stock warrants — 500 Restricted stock units 960 — Total shares excluded from net loss per share 6,660 7,053 |
Basis of Presentation, Signif23
Basis of Presentation, Significant Accounting Policies and Recently-Issued Accounting Pronouncements - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Subscription fees payable, description | Customers pay subscription and support fees for access to the Company’s SaaS platform generally for a one-year period. In more limited cases, customers may pay for up to three years in advance. Fees are based on a number of factors, including the solutions subscribed for by the customer and the number of users having access to the solutions. | |
SaaS platform subscription fee, period | 1 year | |
SaaS platform subscription fee, maximum advance period | 3 years | |
Deferred revenue recognized | $ 43.7 | $ 32.3 |
Contracted not recognized revenue | $ 233.3 | |
Contracted not recognized revenue, expects to recognize revenue over next 12 months | 63.00% | |
Contract capitalized cost, amortized method | straight line | |
New Accounting Pronouncement Revenue from Contracts | ||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Estimated benfit period of contract costs | 5 years | |
Sales and Marketing Expenses | ||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Amortization expense | $ 5.3 | $ 3.3 |
Revenues - Effect of Adoption o
Revenues - Effect of Adoption of ASC 606 on Impacts to Previously Reported Results - Condensed Consolidated Balance Sheet (Unaudited) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Condensed Balance Sheet Statements Captions [Line Items] | |||
Accounts receivable, net | $ 57,019 | $ 61,918 | [1] |
Prepaid expenses and other current assets | 15,625 | 13,956 | [1] |
Total current assets | 186,676 | 188,454 | [1] |
Other assets | 28,379 | 26,820 | [1] |
Total assets | 458,515 | 460,813 | [1] |
Deferred revenue | 110,733 | 104,184 | [1] |
Total current liabilities | 131,547 | 134,320 | [1] |
Deferred tax liabilities, net | 1,501 | 1,743 | [1] |
Deferred revenue, noncurrent | 477 | 468 | [1] |
Total liabilities | 140,954 | 143,508 | [1] |
Accumulated deficit | (109,945) | (102,790) | [1] |
Total stockholders' equity | 317,561 | 317,305 | [1] |
Total liabilities and stockholders' equity | $ 458,515 | 460,813 | [1] |
Adoption of ASC 606 | As Reported | |||
Condensed Balance Sheet Statements Captions [Line Items] | |||
Accounts receivable, net | 61,589 | ||
Prepaid expenses and other current assets | 19,785 | ||
Total current assets | 193,954 | ||
Other assets | 1,391 | ||
Total assets | 440,884 | ||
Deferred revenue | 106,903 | ||
Total current liabilities | 137,039 | ||
Deferred tax liabilities, net | 1,328 | ||
Deferred revenue, noncurrent | 912 | ||
Total liabilities | 146,256 | ||
Accumulated deficit | (125,467) | ||
Total stockholders' equity | 294,628 | ||
Total liabilities and stockholders' equity | 440,884 | ||
Adoption of ASC 606 | Adjustments | |||
Condensed Balance Sheet Statements Captions [Line Items] | |||
Accounts receivable, net | 329 | ||
Prepaid expenses and other current assets | (5,829) | ||
Total current assets | (5,500) | ||
Other assets | 25,429 | ||
Total assets | 19,929 | ||
Deferred revenue | (2,719) | ||
Total current liabilities | (2,719) | ||
Deferred tax liabilities, net | 415 | ||
Deferred revenue, noncurrent | (444) | ||
Total liabilities | (2,748) | ||
Accumulated deficit | 22,677 | ||
Total stockholders' equity | 22,677 | ||
Total liabilities and stockholders' equity | $ 19,929 | ||
[1] | See Note 3 for a summary of adjustments. |
Revenues - Effect of Adoption25
Revenues - Effect of Adoption of ASC 606 on Impacts to Previously Reported Results - Condensed Consolidated Statement of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Revenues | |||
Subscription and support | $ 48,625 | $ 36,558 | [1] |
Professional services | 2,659 | 1,623 | [1] |
Total revenues | 51,284 | 38,181 | [1] |
Cost of revenues | |||
Subscription and support | 9,381 | 7,755 | [1] |
Total cost of revenues | 11,606 | 9,210 | [1] |
Gross profit | 39,678 | 28,971 | [1] |
Operating expenses | |||
Sales and marketing | 29,227 | 21,820 | [1] |
Loss from operations | (7,560) | (7,050) | [1] |
Loss before income taxes | (7,175) | (7,830) | [1] |
Benefit from income taxes | (20) | (145) | [1] |
Net loss | $ (7,155) | $ (7,685) | [1] |
Basic net loss per share | $ (0.13) | $ (0.15) | [1] |
Diluted net loss per share | $ (0.13) | $ (0.15) | [1] |
Adoption of ASC 606 | As Reported | |||
Revenues | |||
Subscription and support | $ 37,051 | ||
Professional services | 1,583 | ||
Total revenues | 38,634 | ||
Cost of revenues | |||
Subscription and support | 7,777 | ||
Total cost of revenues | 9,232 | ||
Gross profit | 29,402 | ||
Operating expenses | |||
Sales and marketing | 23,496 | ||
Loss from operations | (8,295) | ||
Loss before income taxes | (9,075) | ||
Benefit from income taxes | (65) | ||
Net loss | $ (9,010) | ||
Basic net loss per share | $ (0.18) | ||
Diluted net loss per share | $ (0.18) | ||
Adoption of ASC 606 | Adjustments | |||
Revenues | |||
Subscription and support | $ (493) | ||
Professional services | 40 | ||
Total revenues | (453) | ||
Cost of revenues | |||
Subscription and support | (22) | ||
Total cost of revenues | (22) | ||
Gross profit | (431) | ||
Operating expenses | |||
Sales and marketing | (1,676) | ||
Loss from operations | 1,245 | ||
Loss before income taxes | 1,245 | ||
Benefit from income taxes | (80) | ||
Net loss | $ 1,325 | ||
Basic net loss per share | $ 0.03 | ||
Diluted net loss per share | $ 0.03 | ||
[1] | See Note 3 for a summary of adjustments. |
Revenues - Effect of Adoption26
Revenues - Effect of Adoption of ASC 606 on Impacts to Previously Reported Results - Condensed Consolidated Statement of Cash Flows (Unaudited) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net loss | $ (7,155) | $ (7,685) | [1] |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Deferred income taxes | (242) | (235) | [1] |
Prepaid expenses and other current assets | (1,891) | (1,277) | [1] |
Other assets | (1,285) | (1,434) | [1] |
Deferred revenue | $ 6,558 | 8,422 | [1] |
Adoption of ASC 606 | As Reported | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net loss | (9,010) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Deferred income taxes | (162) | ||
Prepaid expenses and other current assets | (1,029) | ||
Other assets | (22) | ||
Deferred revenue | 8,014 | ||
Adoption of ASC 606 | Adjustments | |||
Condensed Cash Flow Statements Captions [Line Items] | |||
Net loss | 1,325 | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Deferred income taxes | (73) | ||
Prepaid expenses and other current assets | (248) | ||
Other assets | (1,412) | ||
Deferred revenue | $ 408 | ||
[1] | See Note 3 for a summary of adjustments. |
Revenues - Schedule of Disaggre
Revenues - Schedule of Disaggregation of Revenues by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | ||
Revenues | $ 51,284 | $ 38,181 |
United States | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 41,012 | 31,215 |
International | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | $ 10,272 | $ 6,966 |
Revenues - Schedule of Disagg28
Revenues - Schedule of Disaggregation of Revenues by Market (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | ||
Revenues | $ 51,284 | $ 38,181 |
Enterprise | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 42,511 | 32,038 |
Mid-market | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | $ 8,773 | $ 6,143 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Investments in Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Schedule Of Available For Sale Securities [Line Items] | |||
Amortized Cost | $ 83,301 | $ 81,539 | |
Gross Unrealized Losses | (133) | (63) | |
Fair Value | 83,168 | 81,476 | [1] |
U.S. treasury securities | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Amortized Cost | 21,770 | 21,454 | |
Gross Unrealized Losses | (36) | (19) | |
Fair Value | 21,734 | 21,435 | |
Corporate bonds | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Amortized Cost | 33,113 | 32,437 | |
Gross Unrealized Losses | (97) | (43) | |
Fair Value | 33,016 | 32,394 | |
Commercial paper | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Amortized Cost | 28,418 | 25,048 | |
Fair Value | $ 28,418 | 25,048 | |
Asset-backed securities | |||
Schedule Of Available For Sale Securities [Line Items] | |||
Amortized Cost | 2,600 | ||
Gross Unrealized Losses | (1) | ||
Fair Value | $ 2,599 | ||
[1] | See Note 3 for a summary of adjustments. |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($)Security | Mar. 31, 2017USD ($)Security | |
Schedule Of Available For Sale Securities [Line Items] | ||
Sales of marketable securities | Security | 0 | 0 |
Realized gain and losses recognized | $ | $ 0 | $ 0 |
Maximum | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Marketable securities contractual maturity period | 2 years |
Balance Sheet Components - Summ
Balance Sheet Components - Summary of Amortized Cost and Fair Values of Marketable Securities, by Remaining Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Maturing within 1 year | $ 62,962 | |
Maturing between 1 year and 2 years | 20,339 | |
Amortized Cost | 83,301 | $ 81,539 |
Maturing within 1 year | 62,892 | |
Maturing between 1 year and 2 years | 20,276 | |
Total , Fair Value | $ 83,168 |
Balance Sheet Components - Su32
Balance Sheet Components - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |||
Partner referral fees | $ 7,873 | $ 7,945 | |
Restricted cash | 200 | 400 | |
Other prepaid expenses and other current assets | 7,552 | 5,611 | |
Prepaid expenses and other current assets, Total | $ 15,625 | $ 13,956 | [1] |
[1] | See Note 3 for a summary of adjustments. |
Balance Sheet Components - Su33
Balance Sheet Components - Summary of Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | [1] | |
Balance Sheet Related Disclosures [Abstract] | |||||
Deferred customer contract acquisition costs | $ 26,378 | $ 25,338 | |||
Restricted cash | 274 | $ 400 | |||
Other assets | 1,727 | 1,482 | |||
Other Assets Noncurrent | $ 28,379 | $ 26,820 | [1] | ||
[1] | See Note 3 for a summary of adjustments. |
Balance Sheet Components - Sc34
Balance Sheet Components - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Payables And Accruals [Abstract] | |||
Accrued salaries and employee benefits | $ 7,494 | $ 11,945 | |
Partner referral fees | 2,991 | ||
Accrued income and other taxes payable | 1,468 | 1,798 | |
Accrued professional services costs | 575 | 407 | |
Short-term portion of capital lease | 443 | ||
Short-term tenant improvement allowance | 475 | 475 | |
Other accrued expenses and current liabilities | 2,228 | 2,815 | |
Accrued expenses and other current liabilities | $ 12,240 | $ 20,874 | [1] |
[1] | See Note 3 for a summary of adjustments. |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets | $ 105,832 | $ 102,723 |
Liabilities | ||
Contingent consideration | 5,978 | 5,866 |
Total liabilities | 5,978 | 5,866 |
Money market funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 22,664 | 21,247 |
U.S. treasury securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 21,734 | 21,435 |
Corporate bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 33,016 | 32,394 |
Commercial paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 28,418 | 25,048 |
Asset-backed securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 2,599 | |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets | 44,398 | 42,682 |
Level 1 | Money market funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 22,664 | 21,247 |
Level 1 | U.S. treasury securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 21,734 | 21,435 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets | 61,434 | 60,041 |
Level 2 | Corporate bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 33,016 | 32,394 |
Level 2 | Commercial paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 28,418 | 25,048 |
Level 2 | Asset-backed securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Marketable securities | 2,599 | |
Level 3 | ||
Liabilities | ||
Contingent consideration | 5,978 | 5,866 |
Total liabilities | $ 5,978 | $ 5,866 |
Fair Value Measurements - Sum36
Fair Value Measurements - Summary of Changes in Common Stock Warrant Liability (Details) - Common Stock Warrant Liability $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | |
Beginning fair value | $ 11,380 |
Change in fair value | 1,000 |
Ending fair value | $ 12,380 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - Common Stock | 1 Months Ended |
May 31, 2017shares | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Warrants to purchase of common stock | 499,999 |
Issuance of common stock | 428,033 |
Fair Value Measurements - Sum38
Fair Value Measurements - Summary of Changes in Contingent Consideration Liability (Details) - Contingent Consideration - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Beginning fair value | $ 5,866 | $ 5,238 |
Change in fair value | 112 | 93 |
Ending fair value | $ 5,978 | $ 5,331 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | Sep. 03, 2013 | Mar. 31, 2018 | Dec. 31, 2017 |
Business Acquisition Contingent Consideration [Line Items] | |||
Lease expiration year | 2,024 | ||
BlackLine Systems, Inc. | |||
Business Acquisition Contingent Consideration [Line Items] | |||
Maximum contingent cash consideration to be distributed | $ 8 | ||
BlackLine Systems, Inc. | Contingent Consideration | |||
Business Acquisition Contingent Consideration [Line Items] | |||
Fair value of contingent consideration | $ 6 | $ 5.9 |
Equity Awards - Summary of Stoc
Equity Awards - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 3,974 | $ 1,849 |
Cost of Revenues | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 838 | 250 |
Sales and Marketing | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 1,437 | 660 |
Research and Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 429 | 83 |
General and Administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 1,270 | $ 856 |
Equity Awards - Additional Info
Equity Awards - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Stock-based compensation capitalized as an asset | $ 100,000 | $ 30,000 |
Equity Awards - Summary of Rest
Equity Awards - Summary of Restricted Stock Units Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2018shares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Restricted stock units, Nonvested, Beginning balance | 2 |
Restricted stock units, Granted | 963 |
Restricted stock units, Forfeited/canceled | (5) |
Restricted stock units, Nonvested, Ending balance | 960 |
Equity Awards - Summary of St43
Equity Awards - Summary of Stock Options Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding, Beginning balance | 5,019 |
Granted | 551 |
Exercised | (462) |
Forfeited/canceled | (91) |
Outstanding, Ending balance | 5,017 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | [1] | |
Income Tax Disclosure [Abstract] | |||
U.S. Federal statutory rate | 21.00% | ||
Income tax expense (benefit) | $ (20) | $ (145) | |
[1] | See Note 3 for a summary of adjustments. |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Basic and Diluted Loss per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | [1] | |
Numerator: | |||
Net loss | $ (7,155) | $ (7,685) | |
Denominator: | |||
Weighted average shares | 53,151 | 51,282 | |
Shares used to calculate diluted net loss per share | 53,151 | 51,282 | |
Basic net loss per share | $ (0.13) | $ (0.15) | |
Diluted net loss per share | $ (0.13) | $ (0.15) | |
[1] | See Note 3 for a summary of adjustments. |
Net Loss per Share - Schedule46
Net Loss per Share - Schedule of Potentially Dilutive Shares Excluded From Calculation of Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from net loss per share | 6,660 | 7,053 |
Stock options with service-only vesting conditions | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from net loss per share | 5,017 | 5,870 |
Stock options with performance conditions | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from net loss per share | 683 | 683 |
Common stock warrants | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from net loss per share | 500 | |
Restricted stock units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from net loss per share | 960 |