Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 04, 2016 | |
Entity Registrant Name | Trade Desk, Inc. | |
Entity Central Index Key | 1,671,933 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 5,366,767 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 33,206,209 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 123,968 | $ 4,047 |
Accounts receivable, net | 274,008 | 191,943 |
Prepaid expenses and other current assets | 5,536 | 3,812 |
TOTAL CURRENTS ASSETS | 403,512 | 199,802 |
Property and equipment, net | 10,545 | 6,625 |
Deferred taxes, net | 1,171 | 1,171 |
Other assets, non-current | 4,492 | 2,633 |
TOTAL ASSETS | 419,720 | 210,231 |
Current liabilities: | ||
Accounts payable | 206,194 | 108,461 |
Accrued expenses and other current liabilities | 14,007 | 9,937 |
Financing obligation, current portion | 721 | 502 |
TOTAL CURRENT LIABILITIES | 220,922 | 118,900 |
Debt, net | 50,847 | 44,888 |
Warrant liabilities | 6,927 | |
Other liabilities, non-current | 1,732 | 140 |
Financing obligation, non-current | 485 | 1,030 |
TOTAL LIABILITIES | 273,986 | 171,885 |
Commitments and contingencies (Note 10) | ||
Convertible preferred stock, par value $0.000001; zero shares authorized, issued and outstanding as of September 30, 2016; 68,521 shares authorized, 66,330 shares issued and outstanding as of December 31, 2015; liquidation preference of $27,997 as of December 31, 2015 | 24,204 | |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $0.000001; 100,000 shares authorized, zero shares issued and outstanding as of September 30, 2016; zero shares authorized, issued and outstanding as of December 31, 2015 | ||
Common stock, par value $0.000001; 1,000,000 and zero Class A shares authorized, 5,367 and zero shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively; 95,000 and 130,000 Class B shares authorized, 33,149 and 10,884 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | ||
Additional paid-in capital | 170,832 | 1,039 |
Retained earnings (accumulated deficit) | (25,098) | 13,103 |
TOTAL STOCKHOLDERS' EQUITY | 145,734 | 14,142 |
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | $ 419,720 | $ 210,231 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Convertible preferred stock | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Convertible preferred stock, authorized shares | 0 | 68,521,000 |
Convertible preferred stock, shares issued | 0 | 66,330,000 |
Convertible preferred stock, shares outstanding | 0 | 66,330,000 |
Convertible preferred stock, liquidation preference | $ 27,997 | |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Preferred stock, authorized shares | 100,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Class A common stock | ||
Common stock | ||
Common stock, authorized shares | 1,000,000,000 | 0 |
Common stock, shares issued | 5,367,000 | 0 |
Common stock, shares outstanding | 5,367,000 | 0 |
Class B common stock | ||
Common stock | ||
Common stock, authorized shares | 95,000,000 | 130,000,000 |
Common stock, shares issued | 33,149,000 | 10,884,000 |
Common stock, shares outstanding | 33,149,000 | 10,884,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | $ 52,956 | $ 28,768 | $ 130,516 | $ 71,178 |
Operating expenses: | ||||
Platform operations | 10,422 | 5,968 | 26,617 | 15,610 |
Sales and marketing | 11,600 | 6,838 | 31,282 | 18,530 |
Technology and development | 7,292 | 3,411 | 17,694 | 8,507 |
General and administrative | 8,591 | 3,359 | 21,442 | 8,536 |
Total operating expenses | 37,905 | 19,576 | 97,035 | 51,183 |
Income from operations | 15,051 | 9,192 | 33,481 | 19,995 |
Interest expense | 1,347 | 295 | 2,664 | 716 |
Change in fair value of preferred stock warrant liabilities | 4,653 | 673 | 9,458 | 1,162 |
Foreign currency exchange loss, net | 87 | 408 | 489 | 934 |
Total other expense, net | 6,087 | 1,376 | 12,611 | 2,812 |
Income before income taxes | 8,964 | 7,816 | 20,870 | 17,183 |
Provision for income taxes | 5,320 | 3,211 | 10,668 | 6,904 |
Net income | 3,644 | 4,605 | 10,202 | 10,279 |
Net income (loss) attributable to common stockholders | $ 972 | $ 1,453 | $ (37,007) | $ 6,922 |
Earnings (loss) per share: | ||||
Basic (in dollars per share) | $ 0.08 | $ 0.14 | $ (3.23) | $ 0.68 |
Diluted (in dollars per share) | $ 0.06 | $ 0.10 | $ (3.23) | $ 0.26 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 12,629 | 10,228 | 11,461 | 10,193 |
Diluted (in shares) | 17,064 | 14,231 | 11,461 | 16,586 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - 9 months ended Sep. 30, 2016 - USD ($) shares in Thousands, $ in Thousands | Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Total | ||
Balance at beginning of period (in shares) at Dec. 31, 2015 | 66,330 | 10,884 | [1] | ||||
Increase (Decrease) in Shares | |||||||
Exercise of common stock options (in shares) | [1] | 626 | |||||
Issuance of stock (in shares) | 11,501 | 4,667 | [1] | ||||
Net exercise of warrant (in shares) | 789 | 449 | [1] | ||||
Repurchase of convertible preferred stock (in shares) | (12,384) | ||||||
Repurchase and retirement of common stock (in shares) | [1] | (189) | |||||
Conversion of convertible preferred stock to Class B common stock in connection with initial public offering (in shares) | (66,236) | 22,079 | [1] | ||||
Balance at end of period (in shares) at Sep. 30, 2016 | [1] | 38,516 | |||||
Balance at beginning of period at Dec. 31, 2015 | $ 24,204 | $ 24,204 | |||||
Increase (Decrease) in Convertible Preferred Stock | |||||||
Issuance of series C convertible preferred stock, net of issuance costs | 59,871 | ||||||
Reclassification of preferred stock warrant liability upon net exercise of warrant | 3,789 | ||||||
Repurchase of convertible preferred stock | (4,623) | ||||||
Conversion of convertible preferred stock to Class B common stock in connection with initial public offering | $ (83,241) | ||||||
Balance at beginning of period at Dec. 31, 2015 | $ 1,039 | $ 13,103 | 14,142 | ||||
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||
Exercise of common stock options | 433 | 433 | |||||
Stock-based compensation | 1,057 | 1,057 | |||||
Repurchase of convertible preferred stock | (1,168) | (46,041) | (47,209) | ||||
Repurchase and retirement of common stock | (2,362) | (2,362) | |||||
Issuance of Class A common stock upon initial public offering, net of underwriters' commissions and offering costs of $10,366 | 73,634 | 73,634 | |||||
Conversion of convertible preferred stock to Class B common stock in connection with initial public offering | 83,241 | 83,241 | |||||
Conversion of warrant for convertible preferred stock to a warrant for Class B common stock in connection with initial public offering | 12,596 | 12,596 | |||||
Net income | 10,202 | 10,202 | |||||
Balance at end of period at Sep. 30, 2016 | $ 170,832 | $ (25,098) | $ 145,734 | ||||
[1] | See Note7-Capitalization for discussion of the establishment of the Company's two classes of common stock and the reclassification of its common stock into Class B common stock prior to the Company's initial public offering in September 2016. |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)class | |
Number of classes of common stock | class | 2 |
Common Stock | |
Underwriters' commissions and offering costs | $ | $ 10,366 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
OPERATING ACTIVITIES: | ||
Net income | $ 10,202 | $ 10,279 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 2,612 | 1,123 |
Stock-based compensation | 1,048 | 251 |
Change in fair value of preferred stock warrant liabilities | 9,458 | 1,162 |
Other | 810 | 532 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (82,322) | (49,016) |
Prepaid expenses and other assets | (2,425) | (2,908) |
Accounts payable | 94,352 | 10,749 |
Accrued expenses and other liabilities | 5,252 | 2,303 |
Net cash provided by (used in) operating activities | 38,987 | (25,525) |
INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (3,516) | (1,463) |
Capitalized software development costs | (1,796) | (1,236) |
Redemption of short-term investment | 551 | |
Net cash used in investing activities | (5,312) | (2,148) |
FINANCING ACTIVITIES: | ||
Proceeds from line of credit | 75,847 | 20,000 |
Repayment on line of credit | (40,000) | |
Repayment of term debt | (30,000) | |
Payment of debt financing costs | (976) | |
Payment of financing obligations | (326) | (53) |
Proceeds from issuance of Series C convertible preferred stock | 60,000 | |
Repurchase of preferred stock and common stock | (54,000) | |
Proceeds from exercise of stock options | 433 | 71 |
Payment of stock repurchase costs | (155) | |
Proceeds from the issuance of Class A common stock in initial public offering, net of underwriting commissions | 78,120 | |
Payment of offering costs - initial public offering | (2,568) | |
Payment of Series C convertible preferred stock offering costs | (129) | |
Net cash provided by financing activities | 86,246 | 20,018 |
Increase (decrease) in cash | 119,921 | (7,655) |
Cash - Beginning of period | 4,047 | 17,315 |
Cash - End of period | 123,968 | 9,660 |
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 10,354 | 8,342 |
Cash paid for interest | 1,379 | 559 |
Capitalized assets financed by accounts payable | 1,803 | 118 |
Asset retirement obligation | 354 | |
Stock-based compensation included in capitalized development costs | 9 | $ 10 |
Conversion of convertible preferred stock to Class B common stock | 83,241 | |
Conversion of warrant for convertible preferred stock to a warrant for Class B common stock and net exercise of warrant to purchase Class B common stock | 12,596 | |
Deferred initial public offering costs included in accounts payable | 1,758 | |
Net exercise of warrants to purchase Series Seed convertible preferred stock | $ 3,789 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2016 | |
Nature of Operations | |
Nature of Operations | Note 1—Nature of Operations The Trade Desk, Inc. (the “Company”) was formed in November 2009 as a Delaware corporation. The Company is headquartered in Ventura, California and has offices in various cities in the United States, Europe, Asia and Australia. The Company is a technology company that empowers advertising agencies and other buyers by providing a self-service platform that enables clients to purchase and manage data-driven digital advertising campaigns across various advertising formats. Initial Public Offering In September 2016, the Company completed an initial public offering (“IPO”). See Note 7—Capitalization. Risks The Company is subject to certain business risks, including dependence on key employees, competition, market acceptance of the Company’s platform, ability to source demand from buyers of advertising inventory and dependence on growth to achieve its business plan. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2—Basis of Presentation and Summary of Significant Accounting Policies 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 Company’s consolidated financial statements and the related notes for the years ended December 31, 2014 and 2015 contained in the Company’s final prospectus related to its IPO (the “Prospectus”), which was filed with the Securities and Exchange Commission (“SEC”) on September 21, 2016 pursuant to Rule 424(b) under the Securities Act of 1933, as amended. The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the Company’s audited annual consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements. The operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results expected for the full year ending December 31, 2016. There have been no significant changes in the Company’s accounting policies from those disclosed in the Prospectus. Commencing September 2016, the Company provided its employees with an opportunity to purchase Class A shares pursuant to its 2016 Employee Stock Purchase Plan (the “ESPP”) (see Note 8). Reverse Stock Split On September 2, 2016, the Company effected a 1-for-3 reverse stock split of its outstanding common stock and a proportional adjustment to the then existing conversion ratios for each series of convertible preferred stock. Accordingly, all share and per share amounts for all periods presented in these condensed consolidated financial statements and notes thereto, have been adjusted retrospectively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these estimates under different assumptions or circumstances. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Fair value measurements are based on a fair value hierarchy, based on three levels of inputs, of which the first two are considered observable and the last unobservable, which are the following: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted market prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3—Unobservable inputs. Observable inputs are based on market data obtained from independent sources. The carrying amounts of accounts receivable, accounts payable, accrued expenses and other current liabilities approximate fair value due to the short-term nature of these instruments. The carrying value of the line of credit and term loans approximates fair value based on borrowing rates currently available to the Company for financing with similar terms and were determined to be Level 2. The Company’s convertible preferred stock warrants were measured using unobservable inputs that required a high level of judgment to determine fair value, and were thus classified as Level 3. Immediately prior to the closing of the Company’s IPO, all of the Company’s then-outstanding convertible preferred stock warrants were remeasured and automatically converted and reclassified into Class B common stock warrants and all remaining warrants were net exercised. Certain long-lived assets, including property and equipment and capitalized software development costs, are also subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review. To date, no impairments have been recorded on those assets. Recent Accounting Pronouncements Under the Jumpstart Our Business Startups Act (“JOBS Act”), the Company meets the definition of an emerging growth company. The Company has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which amends the existing accounting standards for revenue recognition. Under ASU 2014-09, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date of ASU 2014-09 by one year. During 2016, the FASB has continued to issue additional amendments to the new revenue guidance. The new revenue guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. Early adoption is permitted for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016. The guidance permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method nor determined the effect of this guidance on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement , which provides guidance to help companies evaluate the accounting for fees paid by a customer in a cloud computing arrangement. Under ASU 2015-05, if a cloud computing arrangement includes a software license, the customer should account for the license consistent with its accounting for other software licenses. If the arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 was effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. An entity can elect to adopt this guidance either prospectively for all arrangements entered into or materially modified after the effective date, or retrospectively. Early adoption was permitted. The Company’s adoption of this guidance during the three months ended March 31, 2016 did not have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases , which requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, lessor, and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. Leases will be classified as either finance or operating, with the classification affecting the pattern of expense recognition in the income statement. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those reporting periods, and requires a modified retrospective adoption, with early adoption permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718) : Improvements to Employee Share-Based Payment Accounting , which includes multiple provisions intended to simplify various aspects of the accounting for share-based payments, including forfeitures, accounting for income taxes, classification of excess tax benefits on the statement of cash flows, statutory tax withholding requirements and other stock based compensation classification matters. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period with the impact of the adoption recorded as a cumulative-effect adjustment as of the beginning of the year in which the guidance is adopted. Changes in the classification of excess tax benefits on the statement of cash flows as a result of the adoption of this guidance may be recorded on a retrospective or prospective basis. The Company elected to early adopt this guidance during the three months ended June 30, 2016 and changed its accounting policy to record forfeitures of stock-based awards when they occur. The Company’s adoption of this guidance did not have a material impact on its consolidated financial statements. The Company had no excess tax benefits as of December 31, 2015 and elected to record any future excess tax benefits in the statement of cash flows as an operating activity on a prospective basis. The cumulative-effect adjustment as a result of the adoption of this guidance for the change in accounting policy for forfeitures was approximately $5,000 and was recorded in the statement of operations during the three months ended June 30, 2016, rather than an adjustment to the retained earnings as the amount was not material. The change in accounting policy to record forfeitures when they occur and the requirement to record excess tax benefits when they occur in the statement of operations will result in increased volatility in earnings in the future. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments , which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes such interim period. The adoption of ASU 2016-15 should be applied using a retrospective transition method to each period presented, unless impracticable to do so. The Company does not expect the adoption of ASU 2016-15 will have a material impact on its consolidated statement of cash flows. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share | |
Earnings Per Share | Note 3—Earnings Per Share In September 2016, and in preparation of the Company’s IPO and the establishment of two classes of common stock, each share of the then outstanding common stock was reclassified to Class B common stock. The Company sold Class A common stock in its IPO. As of September 30, 2016, the Company has two classes of common stock, Class A and Class B. Basic and diluted earnings (loss) per share attributable to common stockholders for Class A and Class B common stock were the same because they were entitled to the same liquidation and dividend rights. The reconciliations of the numerators and denominators of the basic and diluted earnings (loss) per share computations are as follows (in thousands, except per share amounts): Three Months Nine Months Ended September 30, Ended September 30, 2016 2015 2016 2015 Earnings (loss) per share—basic: Numerator: Net income $ $ $ $ Less: Income attributable to convertible preferred stock ) ) — ) Add: Preferred stock modification — — — Less: Premium on repurchase of convertible preferred stock — — ) — Net income (loss) attributable to common stockholders $ $ $ ) $ Denominator: Weighted-average common shares outstanding Earnings (loss) per share—basic $ $ $ ) $ Earnings (loss) per share—diluted: Numerator: Net income (loss) attributable to common stockholders—basic $ $ $ ) $ Add: Income attributable to dilutive convertible preferred stock — — — Less: Preferred stock modification — — — ) Net income (loss) attributable to common stockholders—diluted $ $ $ ) $ Denominator: Weighted-average shares outstanding Dilutive convertible preferred stock — — — ESPP shares — — — Options to purchase common stock — Weighted-average shares outstanding—diluted Earnings (loss) per share—diluted $ $ $ ) $ The following table presents the anti-dilutive shares excluded from the calculation of diluted earnings (loss) per share (in thousands): Three Months Nine Months Ended September 30, Ended September 30, 2016 2015 2016 2015 Anti-dilutive options to purchase common stock Common shares issuable upon conversion of convertible preferred stock — — Anti-dilutive ESPP shares — — — Common shares issuable upon conversion of preferred stock warrants — — Total shares excluded from earnings (loss) per share—diluted |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | Note 4—Fair Value Measurements The financial instruments that are measured at fair value on a recurring basis were (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Other As of Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs 2015 (Level 1) (Level 2) (Level 3) Convertible preferred stock warrant liabilities $ $ — $ — $ The changes in the fair value of preferred stock warrants are summarized below (in thousands): Three Months Nine Months Ended September 30, Ended September 30, 2016 2015 2016 2015 Beginning balance $ $ $ $ Change in value of preferred stock warrants recorded in other expense, net Reclassification to convertible preferred stock upon net exercise of Series Seed warrant — — ) — Conversion of preferred stock warrants to common stock warrants upon the closing of the Company’s IPO on September 26, 2016 ) — ) — Ending balance $ — $ $ — $ In connection with the Company’s IPO during September 2016, the outstanding warrants exercisable for 1,382,505 shares of convertible preferred stock were automatically converted into warrants exercisable for 460,834 shares of Class B common stock and net exercised resulting in the issuance of 448,545 shares of Class B common stock based on the IPO price of $18.00 per share and taking into account the 1-for-3 reverse stock split. The aggregate fair value of these warrants upon the closing of the IPO was $12.6 million, which was reclassified from liabilities to additional paid-in capital. The Company determined the fair value of the preferred stock warrants utilizing the Black-Scholes model with the following assumptions: As of September 26, 2016 As of September 30, 2015 Series Seed Series A3 Series Seed Series A3 Contractual term (years) Expected volatility % % % % Risk-free interest rate % % % % Estimated dividend yield — % — % — % — % |
Accounts Payable
Accounts Payable | 9 Months Ended |
Sep. 30, 2016 | |
Accounts Payable | |
Accounts Payable | Note 5—Accounts Payable Accounts payable included the following (in thousands): As of As of September 30, December 31, 2016 2015 Accounts payable–media and data $ $ Accounts payable–other Total $ $ |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt | |
Debt | Note 6—Debt Revolving Credit Facility On March 30, 2016, the Company entered into a credit agreement (the “Revolving Credit Agreement”) with a syndicate of banks, led by Citibank, N.A. The Revolving Credit Agreement provides for a senior secured asset-based revolving credit facility (the “Credit Facility”), which the Company may draw upon as needed. Available funding commitments to the Company under the Credit Facility, subject to certain conditions, total up to $125.0 million. Under certain circumstances the available revolver borrowings may be increased by an additional $50.0 million. The Revolving Credit Agreement is collateralized by a pledge of certain of the Company’s accounts receivable, deposit accounts, intellectual property, investment property, and equipment, and availability under the Credit Agreement is based on the value of accounts receivable, as reduced by certain reserves. Borrowed funds bear interest, dependent on the Company’s time and method of borrowing, at an annual rate of either a Base Rate or a LIBOR rate, plus an applicable margin (“Base Rate Borrowings” and “LIBOR Rate Borrowings”). The Base Rate is defined as a fluctuating interest rate equal to the greatest of (1) the Federal Funds rate plus 0.5%, (2) the Prime Rate, and (3) one month LIBOR rate plus 2.0%. The applicable margin is defined as a rate between 0.5% to 1.0% for Base Rate advances and between 1.5% and 2.0% for LIBOR advances, depending on the amount of monthly average excess availability on the facility. The fee for undrawn amounts ranges from 0.25% to 0.30%. Interest is payable either (a) monthly for Base Rate Borrowings or (b) the last day of the Interest Period applicable for LIBOR Rate Borrowings. At September 30, 2016, all borrowings were designated LIBOR Rate Borrowings that bore interest at a weighted average rate of 2.27%. The Credit Facility matures and all outstanding amounts become due and payable in March 2018. The Credit Facility contains customary conditions to borrowings, events of default and covenants, including covenants that restrict our ability to sell assets, make changes to the nature of our business, engage in mergers or acquisitions, incur, assume or permit to exist additional indebtedness and guarantees, create or permit to exist liens, pay dividends, issue equity instruments, make distributions or redeem or repurchase capital stock or make other investments, engage in transactions with affiliates and make payments in respect of subordinated debt. The Credit Facility also requires the Company to maintain compliance with a consolidated fixed charge coverage ratio covenant of at least 1.15 to 1.00. As of September 30, 2016, the Company was in compliance with all covenants. On March 30, 2016, the Company borrowed $50.8 million under the Revolving Credit Agreement to repay all then outstanding borrowings under, and terminate, the Company’s prior debt facility, as well as pay fees and expenses associated with the Revolving Credit Agreement. Through September 2016, the Company borrowed an additional $20.0 million under the Revolving Credit Agreement and this amount was repaid. As of September 30, 2016, $50.8 million was outstanding under the Revolving Credit Agreement. In connection with a prior debt facility, the Company was required to pay a fee of $0.8 million upon the occurrence of a liquidity event, including the Company’s IPO. This liquidation fee was paid at the completion of the Company’s IPO and recorded as a component of interest expense in the condensed consolidated statements of operations for the three and nine months ended September 30, 2016. |
Capitalization
Capitalization | 9 Months Ended |
Sep. 30, 2016 | |
Capitalization | |
Capitalization | Note 7—Capitalization In February 2016, the Company increased the authorized shares of common stock from 130,000,000 shares to 142,000,000 shares and the authorized shares of convertible preferred stock from 68,520,540 shares to 80,021,127 shares, of which 11,500,587 shares were designated as Series C preferred stock (“Series C preferred stock”). In September 2016, and in preparation of the Company’s IPO and the establishment of two classes of common stock, each share of the then outstanding common stock was reclassified to Class B common stock. The Class A and Class B have the same rights and preferences including rights to dividends, except the Class B is entitled to ten votes per share and the Class A is entitled to one vote per share. Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, except for certain transfers described in the Company’s restated certificate of incorporation, including, without limitation, certain transfers for tax and estate planning purposes. In addition, upon the earlier of (1) the date on which the outstanding shares of Class B common stock represent less than 10% of the aggregate number of the then outstanding shares of Class A common stock and Class B common stock and (2) the affirmative vote or written consent of the holders of at least 66 2 / 3 % of the outstanding shares of Class B common stock, all outstanding shares of Class B common stock will convert automatically into Class A common stock, and no additional shares of Class B common stock will be issued. Prior to the reclassification of existing common stock to Class B common stock, the existing common stock was entitled to one vote per share. Immediately prior to the completion of the IPO on September 26, 2016, the Company amended its certificate of incorporation to amend the number of authorized shares of common stock to 1,095,000,000 shares, par value $0.000001 per share, and 100,000,000 shares of preferred stock, par value, $0.000001 per share. The authorized common stock consists of 1,000,000,000 shares of Class A common stock and 95,000,000 shares of Class B common stock. No shares of the newly authorized preferred stock are outstanding at September 30, 2016. The Company’s board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. Initial Public Offering On September 26, 2016, the Company closed its IPO whereby 4,666,667 shares of Class A common stock were issued and sold by the Company and 700,000 shares of Class A common stock were sold by selling stockholders, pursuant to the underwriters’ exercise of their over-allotment option, at the IPO price of $18.00 per share. The Company received net proceeds from the offering of approximately $78.1 million after deducting underwriting discounts and commissions of $5.9 million, but before deducting offering costs of $4.5 million. The Company did not receive any proceeds from the sales of shares by the selling stockholders. In connection with the Company’s IPO: (i) all shares of the Company’s outstanding Series Seed, A-1, A-2, A-3, B and C convertible preferred stock automatically converted into an aggregate 22,078,637 shares of Class B common stock on a one for one-third basis, including the 700,000 shares sold by selling shareholders which were converted from shares of Class B common stock to shares of Class A common stock prior to sale; and (ii) warrants exercisable for 1,382,505 shares of convertible preferred stock were automatically converted into warrants exercisable for 460,834 shares of Class B common stock and net exercised resulting in the issuance of 448,545 shares of Class B common stock based on the IPO price of $18.00 per share and taking into account the 1-for-3 reverse stock split. In addition, upon completion of the IPO, costs associated with the IPO of $4.5 million were reclassified from other assets, non-current to additional paid-in capital. Convertible Preferred Stock In February 2016, the Company issued 11,500,587 shares of Series C convertible preferred stock for $60.0 million and used $54.0 million of the proceeds to repurchase 3,897,928 and 8,485,350 shares of Series Seed preferred stock (including shares issued upon exercise of warrant described below) and Series A preferred stock (comprising shares of Series A-1, A-2 and A-3), respectively, each at 80% of the Series C offering price per share of $5.22, and 188,786 shares of common stock at a price per share of $12.51. Warrants to purchase 808,135 shares of Seed preferred stock were net exercised, resulting in the issuance of 788,755 shares of Series Seed preferred stock of which 614,052 shares were then repurchased. The repurchase price of the convertible preferred stock, including legal costs, of $51.8 million exceeded the carrying value of $4.6 million at the date of repurchase. The repurchase price in excess of the then carrying value of the preferred stock of $47.2 million was recorded as a reduction to additional paid-in capital of $1.2 million and a reduction to retained earnings of $46.0 million. For the computation of earnings per share for the nine months ended September 30, 2016, the repurchase price in excess of the then carrying value of the preferred stock of $47.2 million was recorded as an increase to net loss attributable to common stockholders. Rights and Preferences of Convertible Preferred Stock Prior to the Company’s IPO, the rights and preferences of convertible preferred stock were as follows: Voting Rights: Each holder of convertible preferred stock was entitled to the number of votes equal to the number of shares of common stock into which such shares of preferred stock could be converted. The holders of convertible preferred stock and the holders of common stock would vote together as a single class on all matters. Dividends Rights: The holders of Series C preferred stock had a preferential dividend right whereby they were entitled to receive a dividend prior to any other class of stock. After payment of any dividend to the holders of Series C preferred stock, the holders of Series B preferred stock had a preferential dividend right whereby they were entitled to receive a dividend prior to any other class of stock. After payment of any dividend to the holders of Series C preferred stock and the holders of Series B preferred stock, the other holders of convertible preferred stock on a pari passu basis were entitled to receive dividends declared by the Board of Directors out of any assets of the Company legally available prior to the payment of dividends to the holders of common Stock. The dividend rate was $0.008 for holders of Series Seed preferred, $0.010087 for holders of Series A-1 preferred stock, $0.011758 for Series A-2 preferred stock, $0.014698 for Series A-3 preferred stock, $0.194 for Series B preferred stock and $0.417 for Series C preferred stock, per share per annum, when and if declared. If a common stock dividend was declared, such that the convertible preferred holders’ share, on an as-converted basis, would exceed the amount declared under the specified preferred stock dividend rate, the convertible preferred holders were entitled to receive the greater amount, as if the convertible preferred stock was converted to common stock. Liquidation Preferences: In the event of any liquidation event, either voluntary or involuntary, the holders of Series B preferred stock and the holders of Series C preferred stock were entitled to receive, prior to the other holders of convertible preferred stock or common stock, on a pro rata and pari passau basis, an amount per share equal to the greater of their respective original issue price, plus any dividends declared but unpaid thereon or an amount as would have been payable had their shares of preferred stock immediately converted to common stock. After payment of the amounts to the Series B preferred stockholders and the Series C preferred stockholders, the other holders of convertible preferred stock were entitled to receive a liquidation preference of the greater of (1) the original issue price, plus any dividend declared but unpaid thereon and (2) such amount per share as would have been payable had all shares of the preferred stock been converted into common stock immediately prior to liquidation, dissolution or winding up. Thereafter, any remaining assets available for distribution were to be distributed among the holders of shares of common stock pro rata based on the number of shares held by each holder. The liquidation preference provisions of the convertible preferred stock were considered contingent redemption provisions because there were certain elements that were not solely within the control of the Company, such as a change in control of the Company. Accordingly, prior to the conversion to common stock, the Company presented the convertible preferred stock within the mezzanine portion of the accompanying consolidated balance sheets. Conversion Features: Each share of convertible preferred stock was convertible at any time, at the option of the holder thereof, into such number of fully paid non-assessable shares of common stock as was determined by dividing the original issue price by the conversion price applicable to such share, in effect on the date of the conversion. The original issue price per share was $0.10 for Series Seed preferred stock, $0.126084 for Series A-1 preferred stock, $0.146976 for Series A-2 preferred stock, $0.183720 for Series A-3 preferred stock, $2.431 for Series B preferred stock and $5.217125 for Series C preferred stock. Prior to the IPO, the conversion price per share, as adjusted for the reverse stock split described in Note 2, was $0.30 for Series Seed preferred stock, $0.378252 for Series A-1 preferred stock, $0.440928 for Series A-2 preferred stock, $0.55116 for Series A-3 preferred stock, $7.293 for Series B preferred stock and $15.651375 for Series C preferred stock. Each share of convertible preferred stock would automatically convert into shares of common stock at its then effective conversion rate immediately upon the earlier of (1) a Qualified IPO, and (2) the date specified by a vote of the holders of at least a majority of all then-outstanding shares of convertible preferred stock, voting together as a single class on an as-converted to common stock basis provided that each series of convertible preferred stock would not be converted as a result of such vote without the consent of the holders of a majority of the shares of such series of convertible preferred stock then outstanding. Upon the conversion of the convertible preferred stock to common stock in connection with the Company’s IPO, the carrying value of the convertible preferred stock was reclassified to additional paid-in capital. Preferred Stock Warrants In 2011, the Company issued warrants to purchase 1.2 million shares of the Series Seed preferred stock, with an exercise price of $0.10 per share. The warrants expire upon the earlier of August 2021 or upon certain corporate events, as defined. In 2013, the Company issued warrants to purchase 990,640 shares of the Company’s Series A-3 preferred stock, with an exercise price of $0.18372 per share. The warrants expire upon the earliest of (1) March 2023 (2) three years from the closing of the Company’s initial public offering and (3) upon a change in control, as defined. In February 2016, warrants to purchase 808,135 shares of Series Seed preferred stock were net exercised resulting in the issuance of 788,755 shares of Series Seed preferred stock of which 614,052 shares were then repurchased in connection with the preferred stock repurchase discussed above. In connection with the Company’s IPO during September 2016, the remaining outstanding warrants exercisable for 1,382,505 shares of convertible preferred stock were automatically converted into warrants exercisable for 460,834 shares of Class B common stock and net exercised resulting in the issuance of 448,545 shares of Class B common stock based on the IPO price of $18.00 per share and taking into account the 1-for-3 reverse stock split. See Note 4-Fair Value Measurements for discussion of the convertible preferred stock warrant valuation. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 8—Stock-Based Compensation Stock-Based Compensation Expense Total stock-based compensation expense, by operating expense category, in the condensed consolidated statements of operations was as follows (in thousands): Three Months Nine Months Ended September 30, Ended September 30, 2016 2015 2016 2015 Platform operations $ $ $ $ Sales and marketing Technology and development General and administrative Total $ $ $ $ Stock Options A summary of stock option activity for the nine months ended September 30, 2016, is as follows: Shares Weighted- Weighted-Average Under Option Average Contractual (in thousands) Exercise Price Life Outstanding at December 31, 2015 $ 7.4 years Granted Exercised ) Cancelled ) Outstanding at September 30, 2016 7.0 years The fair value of options on the date of grant is estimated based on the Black-Scholes option pricing model. The weighted average assumptions used to value options granted to employees during the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Nine Months Ended September 30, Ended September 30, 2016 2015 2016 2015 Expected term (years) Expected volatility % % % % Risk-free interest rate % % % % Estimated dividend yield — % — % — % — % The weighted average grant date fair value per share of stock options granted for the three months ended September 30, 2016 and 2015 were $9.83 and $1.41, respectively. The weighted average grant date fair value per share of stock options granted for the nine months ended September 30, 2016 and 2015 were $9.27 and $0.89, respectively. Stock-based compensation expense related to stock options totaled $0.4 million and $0.1 million for the three months ended September 30, 2016 and 2015, respectively. Stock-based compensation expense related to stock options totaled $0.8 million and $0.3 million for the nine months ended September 30, 2016 and 2015, respectively. At September 30, 2016, the Company had unrecognized employee stock-based compensation relating to stock options of approximately $7.5 million, which is expected to be recognized over a weighted-average period of 3.6 years. Employee Stock Purchase Plan In September 2016, the Company established an ESPP with 800,000 shares of Class A common stock available for issuance. In addition, on the first day of each calendar year beginning on January 1, 2017 and ending on (and including) January 1, 2026, the number of shares available for issuance under the ESPP will be increased by a number of shares equal to the least of (1) 800,000 shares, (2) 1% of the shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year, and (3) such smaller number of shares as determined by our board of directors. Under the ESPP, all eligible employees were auto-enrolled upon the IPO and each eligible employee may authorize payroll deductions of up to 100% of their compensation to purchase shares of Class A common stock, subject to applicable ESPP and statutory limits. The ESPP provides for offering periods generally up to two years, with purchases occurring and new offering periods commencing generally every six months. The first ESPP purchase occurs on December 29, 2016, and subsequent purchases will generally occur on May 15 th and November 15 th each year. At each purchase date, employees are able to purchase shares at 85% of the lower of (i) the closing market price per share of Class A common stock on the employee’s enrollment into the applicable offering period or (ii) the closing market price per share of Class A common stock on the purchase date. The ESPP has an automatic reset feature, whereby the offering period resets if the fair value of the Company’s common stock on a purchase date is less than that on the original offering date. The fair value of ESPP shares was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions: As of September 30, 2016 Expected term (years) 1.3 Expected volatility 51.8% Risk-free interest rate 0.61% Estimated dividend yield —% The first offering period allows for cash contributions in addition to payroll deductions, and as a result, stock-based compensation expense for this offering period is marked-to-market at each reporting date. Stock-based compensation expense for ESPP is recognized on a graded-vesting attribution basis over the requisite service period of each award. The ESPP also has a six month holding period (twelve months for the first offering period) with respect to common stock purchases. Due to the holding period, the Company applies a discount to reflect the non-transferability of the shares. Stock-based compensation expense related to ESPP totaled $0.2 million for the three and nine months ended September 30, 2016. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes | |
Income Taxes | Note 9—Income Taxes In determining the interim income tax provision, the Company uses the annual estimated effective tax rate applied to the actual year-to-date income. The Company’s annual estimated effective tax rate differs from the U.S. federal statutory income rate of 35% primarily as a result of state taxes, foreign taxes, changes in the fair value of preferred stock warrant liabilities, and nondeductible stock-based compensation. There were no material changes to the Company’s unrecognized tax benefits in the nine months ended September 30, 2016, and the Company does not expect to have any significant changes to unrecognized tax benefits through the end of the fiscal year. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 10—Commitments and Contingencies At September 30, 2016, the Company has various non-cancelable operating leases primarily for its corporate and international offices. These leases expire at various times through 2022. Total rent expense was $1.5 million and $0.6 million for the three months ended September 30, 2016 and 2015, respectively, and $3.1 million and $1.6 million for the nine months ended September 30, 2016 and 2015, respectively. The Company’s non-cancelable minimum lease commitments were as follows (in thousands): Year Amount 2016 (for remaining three months) $ 2017 2018 2019 2020 Thereafter $ At September 30, 2016, the Company has non-cancelable commitments to its hosting services providers, marketing contracts and commitments to providers of software as a service. These commitments expire at various times through 2019. At September 30, 2016, the Company’s purchase obligations were as follows (in thousands): Year Amount 2016 (for remaining three months) $ 2017 2018 2019 $ Guarantees and Indemnification In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to clients, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon the Company to provide indemnification under such agreements, and thus there are no claims that the Company is aware of that could have a material effect on the Company’s balance sheet, statement of operations or statement of cash flows. Accordingly, no amounts for any obligation have been recorded at September 30, 2016. Litigation From time to time, the Company is subject to various legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. Although the outcome of the various legal proceedings and claims cannot be predicted with certainty, management does not believe that any of these proceedings or other claims will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. Employment Contracts The Company has entered into agreements with severance terms with certain employees and officers, all of whom are employed at-will. The Company may be required to accelerate the vesting of certain stock options in the event of changes in control, as defined and involuntary terminations. |
Basis of Presentation and Sum18
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Reverse Stock Split | Reverse Stock Split On September 2, 2016, the Company effected a 1-for-3 reverse stock split of its outstanding common stock and a proportional adjustment to the then existing conversion ratios for each series of convertible preferred stock. Accordingly, all share and per share amounts for all periods presented in these condensed consolidated financial statements and notes thereto, have been adjusted retrospectively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these estimates under different assumptions or circumstances. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Fair value measurements are based on a fair value hierarchy, based on three levels of inputs, of which the first two are considered observable and the last unobservable, which are the following: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted market prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3—Unobservable inputs. Observable inputs are based on market data obtained from independent sources. The carrying amounts of accounts receivable, accounts payable, accrued expenses and other current liabilities approximate fair value due to the short-term nature of these instruments. The carrying value of the line of credit and term loans approximates fair value based on borrowing rates currently available to the Company for financing with similar terms and were determined to be Level 2. The Company’s convertible preferred stock warrants were measured using unobservable inputs that required a high level of judgment to determine fair value, and were thus classified as Level 3. Immediately prior to the closing of the Company’s IPO, all of the Company’s then-outstanding convertible preferred stock warrants were remeasured and automatically converted and reclassified into Class B common stock warrants and all remaining warrants were net exercised. Certain long-lived assets, including property and equipment and capitalized software development costs, are also subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review. To date, no impairments have been recorded on those assets. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Under the Jumpstart Our Business Startups Act (“JOBS Act”), the Company meets the definition of an emerging growth company. The Company has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which amends the existing accounting standards for revenue recognition. Under ASU 2014-09, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date of ASU 2014-09 by one year. During 2016, the FASB has continued to issue additional amendments to the new revenue guidance. The new revenue guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. Early adoption is permitted for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016. The guidance permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method nor determined the effect of this guidance on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement , which provides guidance to help companies evaluate the accounting for fees paid by a customer in a cloud computing arrangement. Under ASU 2015-05, if a cloud computing arrangement includes a software license, the customer should account for the license consistent with its accounting for other software licenses. If the arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 was effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. An entity can elect to adopt this guidance either prospectively for all arrangements entered into or materially modified after the effective date, or retrospectively. Early adoption was permitted. The Company’s adoption of this guidance during the three months ended March 31, 2016 did not have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases , which requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, lessor, and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. Leases will be classified as either finance or operating, with the classification affecting the pattern of expense recognition in the income statement. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those reporting periods, and requires a modified retrospective adoption, with early adoption permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718) : Improvements to Employee Share-Based Payment Accounting , which includes multiple provisions intended to simplify various aspects of the accounting for share-based payments, including forfeitures, accounting for income taxes, classification of excess tax benefits on the statement of cash flows, statutory tax withholding requirements and other stock based compensation classification matters. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period with the impact of the adoption recorded as a cumulative-effect adjustment as of the beginning of the year in which the guidance is adopted. Changes in the classification of excess tax benefits on the statement of cash flows as a result of the adoption of this guidance may be recorded on a retrospective or prospective basis. The Company elected to early adopt this guidance during the three months ended June 30, 2016 and changed its accounting policy to record forfeitures of stock-based awards when they occur. The Company’s adoption of this guidance did not have a material impact on its consolidated financial statements. The Company had no excess tax benefits as of December 31, 2015 and elected to record any future excess tax benefits in the statement of cash flows as an operating activity on a prospective basis. The cumulative-effect adjustment as a result of the adoption of this guidance for the change in accounting policy for forfeitures was approximately $5,000 and was recorded in the statement of operations during the three months ended June 30, 2016, rather than an adjustment to the retained earnings as the amount was not material. The change in accounting policy to record forfeitures when they occur and the requirement to record excess tax benefits when they occur in the statement of operations will result in increased volatility in earnings in the future. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments , which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If adopted in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes such interim period. The adoption of ASU 2016-15 should be applied using a retrospective transition method to each period presented, unless impracticable to do so. The Company does not expect the adoption of ASU 2016-15 will have a material impact on its consolidated statement of cash flows. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share | |
Reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations | The reconciliations of the numerators and denominators of the basic and diluted earnings (loss) per share computations are as follows (in thousands, except per share amounts): Three Months Nine Months Ended September 30, Ended September 30, 2016 2015 2016 2015 Earnings (loss) per share—basic: Numerator: Net income $ $ $ $ Less: Income attributable to convertible preferred stock ) ) — ) Add: Preferred stock modification — — — Less: Premium on repurchase of convertible preferred stock — — ) — Net income (loss) attributable to common stockholders $ $ $ ) $ Denominator: Weighted-average common shares outstanding Earnings (loss) per share—basic $ $ $ ) $ Earnings (loss) per share—diluted: Numerator: Net income (loss) attributable to common stockholders—basic $ $ $ ) $ Add: Income attributable to dilutive convertible preferred stock — — — Less: Preferred stock modification — — — ) Net income (loss) attributable to common stockholders—diluted $ $ $ ) $ Denominator: Weighted-average shares outstanding Dilutive convertible preferred stock — — — ESPP shares — — — Options to purchase common stock — Weighted-average shares outstanding—diluted Earnings (loss) per share—diluted $ $ $ ) $ |
Schedule of anti-dilutive shares excluded from the calculation of diluted earnings (loss) per share | The following table presents the anti-dilutive shares excluded from the calculation of diluted earnings (loss) per share (in thousands): Three Months Nine Months Ended September 30, Ended September 30, 2016 2015 2016 2015 Anti-dilutive options to purchase common stock Common shares issuable upon conversion of convertible preferred stock — — Anti-dilutive ESPP shares — — — Common shares issuable upon conversion of preferred stock warrants — — Total shares excluded from earnings (loss) per share—diluted |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Schedule of financial instruments measured at fair value on a recurring basis | The financial instruments that are measured at fair value on a recurring basis were (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Other As of Active Markets for Observable Unobservable December 31, Identical Assets Inputs Inputs 2015 (Level 1) (Level 2) (Level 3) Convertible preferred stock warrant liabilities $ $ — $ — $ |
Summary of changes in the fair value of preferred stock warrants | The changes in the fair value of preferred stock warrants are summarized below (in thousands): Three Months Nine Months Ended September 30, Ended September 30, 2016 2015 2016 2015 Beginning balance $ $ $ $ Change in value of preferred stock warrants recorded in other expense, net Reclassification to convertible preferred stock upon net exercise of Series Seed warrant — — ) — Conversion of preferred stock warrants to common stock warrants upon the closing of the Company’s IPO on September 26, 2016 ) — ) — Ending balance $ — $ $ — $ |
Schedule of assumptions utilized to determine the fair value of preferred stock warrants | The Company determined the fair value of the preferred stock warrants utilizing the Black-Scholes model with the following assumptions: As of September 26, 2016 As of September 30, 2015 Series Seed Series A3 Series Seed Series A3 Contractual term (years) Expected volatility % % % % Risk-free interest rate % % % % Estimated dividend yield — % — % — % — % |
Accounts Payable (Tables)
Accounts Payable (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounts Payable | |
Schedule of accounts payable | Accounts payable included the following (in thousands): As of As of September 30, December 31, 2016 2015 Accounts payable–media and data $ $ Accounts payable–other Total $ $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stock-Based Compensation | |
Schedule of stock-based compensation expense by operating expense category | Total stock-based compensation expense, by operating expense category, in the condensed consolidated statements of operations was as follows (in thousands): Three Months Nine Months Ended September 30, Ended September 30, 2016 2015 2016 2015 Platform operations $ $ $ $ Sales and marketing Technology and development General and administrative Total $ $ $ $ |
Summary of stock option activity | Shares Weighted- Weighted-Average Under Option Average Contractual (in thousands) Exercise Price Life Outstanding at December 31, 2015 $ 7.4 years Granted Exercised ) Cancelled ) Outstanding at September 30, 2016 7.0 years |
Schedule of weighted-average assumptions used to value options granted to employees | Three Months Nine Months Ended September 30, Ended September 30, 2016 2015 2016 2015 Expected term (years) Expected volatility % % % % Risk-free interest rate % % % % Estimated dividend yield — % — % — % — % |
Schedule of weighted-average assumptions used to estimate the fair value of ESPP shares | As of September 30, 2016 Expected term (years) 1.3 Expected volatility 51.8% Risk-free interest rate 0.61% Estimated dividend yield —% |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies | |
Schedule of minimum lease commitments under non-cancelable operating leases | The Company’s non-cancelable minimum lease commitments were as follows (in thousands): Year Amount 2016 (for remaining three months) $ 2017 2018 2019 2020 Thereafter $ |
Schedule of purchase obligations | At September 30, 2016, the Company’s purchase obligations were as follows (in thousands): Year Amount 2016 (for remaining three months) $ 2017 2018 2019 $ |
Basis of Presentation and Sum24
Basis of Presentation and Summary of Significant Accounting Policies - Reverse Stock Split (Details) | Sep. 02, 2016 |
Basis of Presentation and Summary of Significant Accounting Policies | |
Reverse stock split ratio | 0.3333 |
Basis of Presentation and Sum25
Basis of Presentation and Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Basis of Presentation and Summary of Significant Accounting Policies | ||
Impairments of long-lived assets | $ 0 | $ 0 |
Basis of Presentation and Sum26
Basis of Presentation and Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncement, Early Adoption | ||
Excess tax benefits | $ 0 | |
Accounting Standards Update 2016-09 | New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncement, Early Adoption | ||
Cumulative-effect adjustment recorded in the statement of operations | $ 5,000 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2016USD ($) | Sep. 30, 2016USD ($)class$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2016USD ($)class$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | |
Earnings Per Share | |||||
Number of classes of common stock | class | 2 | 2 | |||
Numerator: | |||||
Net income | $ 3,644 | $ 4,605 | $ 10,202 | $ 10,279 | |
Less: Income attributable to convertible preferred stock | (2,672) | (3,152) | (7,150) | ||
Add: Preferred stock modification | 3,793 | ||||
Less: Premium on repurchase of convertible preferred stock | $ (47,200) | (47,209) | |||
Net income (loss) attributable to common stockholders | $ 972 | $ 1,453 | $ (37,007) | $ 6,922 | |
Denominator: | |||||
Weighted-average common shares outstanding | shares | 12,629 | 10,228 | 11,461 | 10,193 | |
Earnings (loss) per share - basic | $ / shares | $ 0.08 | $ 0.14 | $ (3.23) | $ 0.68 | |
Numerator: | |||||
Net income (loss) attributable to common stockholders - basic | $ 972 | $ 1,453 | $ (37,007) | $ 6,922 | |
Add: Income attributable to dilutive convertible preferred stock | 1,218 | ||||
Less: Preferred stock modification | (3,793) | ||||
Net income (loss) attributable to common stockholders - diluted | $ 972 | $ 1,453 | $ (37,007) | $ 4,347 | |
Denominator: | |||||
Weighted-average common shares outstanding | shares | 12,629 | 10,228 | 11,461 | 10,193 | |
Dilutive convertible preferred stock | shares | 2,790 | ||||
ESPP shares | shares | 5 | ||||
Options to purchase common stock | shares | 4,430 | 4,003 | 3,603 | ||
Weighted-average shares outstanding - diluted | shares | 17,064 | 14,231 | 11,461 | 16,586 | |
Diluted (in dollars per share) | $ / shares | $ 0.06 | $ 0.10 | $ (3.23) | $ 0.26 |
Earnings Per Share - Anti-Dilut
Earnings Per Share - Anti-Dilutive Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Anti-dilutive shares excluded from calculation of diluted earnings (loss) per share: | ||||
Total shares excluded from earnings (loss) per share - diluted | 432 | 23,416 | 5,209 | 20,626 |
Stock Options | ||||
Anti-dilutive shares excluded from calculation of diluted earnings (loss) per share: | ||||
Total shares excluded from earnings (loss) per share - diluted | 432 | 576 | 5,207 | 576 |
Convertible Preferred Stock | ||||
Anti-dilutive shares excluded from calculation of diluted earnings (loss) per share: | ||||
Total shares excluded from earnings (loss) per share - diluted | 22,110 | 19,320 | ||
ESPP | ||||
Anti-dilutive shares excluded from calculation of diluted earnings (loss) per share: | ||||
Total shares excluded from earnings (loss) per share - diluted | 2 | |||
Convertible Preferred Stock Warrants | ||||
Anti-dilutive shares excluded from calculation of diluted earnings (loss) per share: | ||||
Total shares excluded from earnings (loss) per share - diluted | 730 | 730 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 26, 2016 | Dec. 31, 2015 |
Financial instruments measured at fair value on a recurring basis | ||
Warrant liabilities | $ 6,927 | |
Convertible Preferred Stock Warrants | ||
Financial instruments measured at fair value on a recurring basis | ||
Warrant liabilities | $ 12,600 | |
Recurring | Convertible Preferred Stock Warrants | ||
Financial instruments measured at fair value on a recurring basis | ||
Warrant liabilities | 6,927 | |
Recurring | Level 3 | Convertible Preferred Stock Warrants | ||
Financial instruments measured at fair value on a recurring basis | ||
Warrant liabilities | $ 6,927 |
Fair Value Measurements - Prefe
Fair Value Measurements - Preferred Stock Warrants (Details) $ / shares in Units, $ in Thousands | Sep. 26, 2016USD ($)$ / sharesshares | Sep. 02, 2016 | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) |
Changes in fair value of preferred stock warrants | |||||||
Reverse stock split ratio | 0.3333 | ||||||
Aggregate fair value of warrants | $ 6,927 | ||||||
IPO | |||||||
Changes in fair value of preferred stock warrants | |||||||
IPO price (in dollars per share) | $ / shares | $ 18 | ||||||
Class B common stock | |||||||
Changes in fair value of preferred stock warrants | |||||||
Stock issued in net exercise of warrants (in shares) | shares | 448,545 | ||||||
Convertible Preferred Stock Warrants | |||||||
Changes in fair value of preferred stock warrants | |||||||
Beginning balance | $ 7,943 | $ 1,455 | $ 6,927 | $ 966 | |||
Changes in value of preferred stock warrants recorded in other expense, net | 4,653 | 673 | 9,458 | 1,162 | |||
Reclassification to convertible preferred stock upon net exercise of Series Seed warrant | (3,789) | ||||||
Conversion of preferred stock warrants to common stock warrants upon the closing of the Company's IPO on September 26, 2016 | $ (12,596) | $ (12,596) | |||||
Ending balance | $ 2,128 | $ 2,128 | |||||
Outstanding warrants converted during the period (in shares) | shares | 1,382,505 | ||||||
Aggregate fair value of warrants | $ 12,600 | ||||||
Class B Common Stock Warrants | |||||||
Changes in fair value of preferred stock warrants | |||||||
Warrants issued in conversion (in shares) | shares | 460,834 | ||||||
Stock issued in net exercise of warrants (in shares) | shares | 448,545 |
Fair Value Measurements - Assum
Fair Value Measurements - Assumptions (Details) | Sep. 26, 2016 | Dec. 31, 2015 |
Series Seed preferred stock warrants | ||
Fair Value of preferred stock warrants | ||
Expected term (years) | 4 years 10 months 24 days | 5 years 10 months 24 days |
Expected volatility | 59.10% | 59.20% |
Risk-free interest rate | 1.12% | 1.56% |
Series A-3 preferred stock warrants | ||
Fair Value of preferred stock warrants | ||
Expected term (years) | 6 years 6 months | 7 years 6 months |
Expected volatility | 59.10% | 62.50% |
Risk-free interest rate | 1.34% | 1.80% |
Accounts Payable (Details)
Accounts Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Accounts Payable | ||
Accounts payable-media and data | $ 195,690 | $ 105,085 |
Accounts payable-other | 10,504 | 3,376 |
Total | $ 206,194 | $ 108,461 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Mar. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Long-term debt: | ||||||
Amount borrowed | $ 75,847 | $ 20,000 | ||||
Outstanding amount | $ 50,847 | $ 50,847 | 50,847 | $ 44,888 | ||
Revolving Credit Agreement | Revolving credit facility | ||||||
Long-term debt: | ||||||
Borrowing capacity | 125,000 | 125,000 | 125,000 | |||
Additional borrowing capacity under certain circumstances | 50,000 | 50,000 | $ 50,000 | |||
Minimum consolidated fixed charge coverage ratio | 1.15% | |||||
Amount borrowed | $ 50,800 | 20,000 | ||||
Outstanding amount | $ 50,800 | $ 50,800 | $ 50,800 | |||
Revolving Credit Agreement | Revolving credit facility | Minimum | ||||||
Long-term debt: | ||||||
Fee for undrawn amounts (as a percent) | 0.25% | |||||
Revolving Credit Agreement | Revolving credit facility | Maximum | ||||||
Long-term debt: | ||||||
Fee for undrawn amounts (as a percent) | 0.30% | |||||
Revolving Credit Agreement | Revolving credit facility | Base Rate | Minimum | ||||||
Long-term debt: | ||||||
Interest rate, margin added to reference rate (as a percent) | 0.50% | |||||
Revolving Credit Agreement | Revolving credit facility | Base Rate | Maximum | ||||||
Long-term debt: | ||||||
Interest rate, margin added to reference rate (as a percent) | 1.00% | |||||
Revolving Credit Agreement | Revolving credit facility | Federal Funds rate | ||||||
Long-term debt: | ||||||
Interest rate, margin added to reference rate (as a percent) | 0.50% | |||||
Revolving Credit Agreement | Revolving credit facility | One month LIBOR rate | ||||||
Long-term debt: | ||||||
Interest rate, margin added to reference rate (as a percent) | 2.00% | |||||
Revolving Credit Agreement | Revolving credit facility | LIBOR | ||||||
Long-term debt: | ||||||
Weighted average interest rate | 2.27% | 2.27% | 2.27% | |||
Revolving Credit Agreement | Revolving credit facility | LIBOR | Minimum | ||||||
Long-term debt: | ||||||
Interest rate, margin added to reference rate (as a percent) | 1.50% | |||||
Revolving Credit Agreement | Revolving credit facility | LIBOR | Maximum | ||||||
Long-term debt: | ||||||
Interest rate, margin added to reference rate (as a percent) | 2.00% | |||||
Prior Debt Facility | ||||||
Long-term debt: | ||||||
Liquidation fee upon completion of IPO | $ 800 | $ 800 |
Capitalization - Common and Pre
Capitalization - Common and Preferred Stock (Details) | 1 Months Ended | |||||
Sep. 30, 2016Voteclass$ / sharesshares | Sep. 26, 2016$ / sharesshares | Aug. 31, 2016Vote | Feb. 29, 2016shares | Jan. 31, 2016shares | Dec. 31, 2015$ / sharesshares | |
Common and Preferred Stock | ||||||
Number of classes of common stock | class | 2 | |||||
Number of votes per share of common stock | Vote | 1 | |||||
Convertible preferred stock, authorized shares | 0 | 68,521,000 | ||||
Common stock, authorized shares | 1,095,000,000 | 142,000,000 | 130,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.000001 | $ 0.000001 | $ 0.000001 | |||
Preferred stock, authorized shares | 100,000,000 | 100,000,000 | 0 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.000001 | $ 0.000001 | $ 0.000001 | |||
Preferred stock, shares outstanding | 0 | 0 | ||||
Convertible Preferred Stock | ||||||
Common and Preferred Stock | ||||||
Convertible preferred stock, authorized shares | 80,021,127 | 68,520,540 | ||||
Series C convertible preferred stock | ||||||
Common and Preferred Stock | ||||||
Convertible preferred stock, authorized shares | 11,500,587 | |||||
Class A common stock | ||||||
Common and Preferred Stock | ||||||
Number of votes per share of common stock | Vote | 1 | |||||
Common stock, authorized shares | 1,000,000,000 | 1,000,000,000 | 0 | |||
Class B common stock | ||||||
Common and Preferred Stock | ||||||
Number of votes per share of common stock | Vote | 10 | |||||
Ratio for conversion into Class A common stock | 1 | |||||
Threshold percentage of aggregate outstanding common shares to trigger conversion | 10.00% | |||||
Threshold percentage vote or written consent of holders to trigger conversion | 66.67% | |||||
Common stock, authorized shares | 95,000,000 | 95,000,000 | 130,000,000 |
Capitalization - Initial Public
Capitalization - Initial Public Offering (Details) $ / shares in Units, $ in Thousands | Sep. 26, 2016USD ($)$ / sharesshares | Sep. 02, 2016 | Sep. 30, 2016USD ($) |
Initial Public Offering | |||
Net proceeds from the offering | $ | $ 78,120 | ||
Reverse stock split ratio | 0.3333 | ||
Convertible Preferred Stock Warrants | |||
Initial Public Offering | |||
Outstanding warrants converted during the period (in shares) | 1,382,505 | ||
Class B Common Stock Warrants | |||
Initial Public Offering | |||
Warrants issued in conversion (in shares) | 460,834 | ||
Stock issued in net exercise of warrants (in shares) | 448,545 | ||
IPO | |||
Initial Public Offering | |||
IPO price (in dollars per share) | $ / shares | $ 18 | ||
Net proceeds from the offering | $ | $ 78,100 | ||
Underwriting commissions and discounts | $ | 5,900 | ||
Offering costs reclassified from other assets to additional paid-in capital | $ | $ 4,500 | ||
Class A common stock | IPO | |||
Initial Public Offering | |||
Number of shares issued and sold by the Company | 4,666,667 | ||
Number of shares sold by selling shareholders | 700,000 | ||
Class B common stock | |||
Initial Public Offering | |||
Number of shares issued for automatic conversion of convertible preferred stock | 22,078,637 | ||
Number of common stock shares issued for each share of convertible preferred stock | 0.3333 | ||
Stock issued in net exercise of warrants (in shares) | 448,545 |
Capitalization - Convertible Pr
Capitalization - Convertible Preferred Stock Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Feb. 29, 2016 | Sep. 30, 2016 | |||
Convertible Preferred Stock | ||||
Proceeds from issuance of shares | $ 60,000 | |||
Proceeds from stock issuance used to repurchase other shares | $ 54,000 | 54,000 | ||
Preferred stock repurchase price per share, as a percentage of the Series C offering price | 80.00% | |||
Repurchase price of convertible preferred stock in excess of carrying value | $ 47,200 | $ 47,209 | ||
Common Stock | ||||
Convertible Preferred Stock | ||||
Issuance of stock (in shares) | [1] | 4,667,000 | ||
Number of common stock shares repurchased | 188,786 | 189,000 | [1] | |
Share price (in dollars per share) | $ 12.51 | |||
Stock issued in net exercise of warrants (in shares) | [1] | 449,000 | ||
Additional Paid-In Capital | ||||
Convertible Preferred Stock | ||||
Repurchase price of convertible preferred stock in excess of carrying value | $ 1,200 | $ 1,168 | ||
Retained Earnings (Accumulated Deficit) | ||||
Convertible Preferred Stock | ||||
Repurchase price of convertible preferred stock in excess of carrying value | $ 46,000 | $ 46,041 | ||
Series Seed preferred stock warrants | ||||
Convertible Preferred Stock | ||||
Warrants net exercised (in shares) | 808,135 | |||
Stock issued in net exercise of warrants (in shares) | 788,755 | |||
Repurchase of stock that was issued in net exercise of warrants (in shares) | 614,052 | |||
Convertible Preferred Stock | ||||
Convertible Preferred Stock | ||||
Issuance of stock (in shares) | 11,501,000 | |||
Number of preferred stock shares repurchased | 12,384,000 | |||
Stock issued in net exercise of warrants (in shares) | 789,000 | |||
Repurchase price including legal costs | $ 51,800 | |||
Carrying value of stock at the date of repurchase | $ 4,600 | $ 4,623 | ||
Series C convertible preferred stock | ||||
Convertible Preferred Stock | ||||
Issuance of stock (in shares) | 11,500,587 | |||
Proceeds from issuance of shares | $ 60,000 | |||
Share price (in dollars per share) | $ 5.22 | |||
Series Seed convertible preferred stock | ||||
Convertible Preferred Stock | ||||
Number of preferred stock shares repurchased | 3,897,928 | |||
Stock issued in net exercise of warrants (in shares) | 788,755 | |||
Repurchase of stock that was issued in net exercise of warrants (in shares) | 614,052 | |||
Series A convertible preferred stock | ||||
Convertible Preferred Stock | ||||
Number of preferred stock shares repurchased | 8,485,350 | |||
[1] | See Note7-Capitalization for discussion of the establishment of the Company's two classes of common stock and the reclassification of its common stock into Class B common stock prior to the Company's initial public offering in September 2016. |
Capitalization - Convertible 37
Capitalization - Convertible Preferred Stock Terms and Warrants (Details) | Sep. 26, 2016$ / sharesshares | Sep. 02, 2016 | Feb. 29, 2016shares | Sep. 25, 2016$ / shares | Dec. 31, 2013$ / sharesshares | Dec. 31, 2011$ / sharesshares |
Convertible Preferred Stock | ||||||
Reverse stock split ratio | 0.3333 | |||||
IPO | ||||||
Convertible Preferred Stock | ||||||
IPO price (in dollars per share) | $ 18 | |||||
Convertible Preferred Stock Warrants | ||||||
Convertible Preferred Stock | ||||||
Outstanding warrants converted during the period (in shares) | shares | 1,382,505 | |||||
Series Seed preferred stock warrants | ||||||
Convertible Preferred Stock | ||||||
Warrants issued (in shares) | shares | 1,200,000 | |||||
Warrants exercise price (in dollars per share) | $ 0.10 | |||||
Warrants net exercised (in shares) | shares | 808,135 | |||||
Stock issued in net exercise of warrants (in shares) | shares | 788,755 | |||||
Repurchase of stock that was issued in net exercise of warrants (in shares) | shares | 614,052 | |||||
Series A-3 preferred stock warrants | ||||||
Convertible Preferred Stock | ||||||
Warrants issued (in shares) | shares | 990,640 | |||||
Warrants exercise price (in dollars per share) | $ 0.18372 | |||||
Warrants expiration period after IPO | 3 years | |||||
Class B Common Stock Warrants | ||||||
Convertible Preferred Stock | ||||||
Stock issued in net exercise of warrants (in shares) | shares | 448,545 | |||||
Warrants issued in conversion (in shares) | shares | 460,834 | |||||
Series Seed convertible preferred stock | ||||||
Convertible Preferred Stock | ||||||
Dividend rate (in dollars per share) | $ 0.008 | |||||
Original issue price (in dollars per share) | 0.10 | |||||
Conversion price (in dollars per share) | 0.30 | |||||
Stock issued in net exercise of warrants (in shares) | shares | 788,755 | |||||
Repurchase of stock that was issued in net exercise of warrants (in shares) | shares | 614,052 | |||||
Series A-1 convertible preferred stock | ||||||
Convertible Preferred Stock | ||||||
Dividend rate (in dollars per share) | 0.010087 | |||||
Original issue price (in dollars per share) | 0.126084 | |||||
Conversion price (in dollars per share) | 0.378252 | |||||
Series A-2 convertible preferred stock | ||||||
Convertible Preferred Stock | ||||||
Dividend rate (in dollars per share) | 0.011758 | |||||
Original issue price (in dollars per share) | 0.146976 | |||||
Conversion price (in dollars per share) | 0.440928 | |||||
Series A-3 convertible preferred stock | ||||||
Convertible Preferred Stock | ||||||
Dividend rate (in dollars per share) | 0.014698 | |||||
Original issue price (in dollars per share) | 0.183720 | |||||
Conversion price (in dollars per share) | 0.55116 | |||||
Series B convertible preferred stock | ||||||
Convertible Preferred Stock | ||||||
Dividend rate (in dollars per share) | 0.194 | |||||
Original issue price (in dollars per share) | 2.431 | |||||
Conversion price (in dollars per share) | 7.293 | |||||
Series C convertible preferred stock | ||||||
Convertible Preferred Stock | ||||||
Dividend rate (in dollars per share) | 0.417 | |||||
Original issue price (in dollars per share) | 5.217125 | |||||
Conversion price (in dollars per share) | $ 15.651375 | |||||
Class B common stock | ||||||
Convertible Preferred Stock | ||||||
Stock issued in net exercise of warrants (in shares) | shares | 448,545 |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock-based compensation expense, by operating expense category | ||||
Stock-based compensation expense | $ 656 | $ 116 | $ 1,048 | $ 251 |
Platform operations | ||||
Stock-based compensation expense, by operating expense category | ||||
Stock-based compensation expense | 75 | 34 | 114 | 51 |
Sales and marketing | ||||
Stock-based compensation expense, by operating expense category | ||||
Stock-based compensation expense | 200 | 34 | 318 | 88 |
Technology and development | ||||
Stock-based compensation expense, by operating expense category | ||||
Stock-based compensation expense | 216 | 24 | 330 | 53 |
General and administrative | ||||
Stock-based compensation expense, by operating expense category | ||||
Stock-based compensation expense | $ 165 | $ 24 | $ 286 | $ 59 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Stock Options, additional disclosures | |||||
Stock-based compensation expense | $ 656 | $ 116 | $ 1,048 | $ 251 | |
Stock Options | |||||
Shares Under Option | |||||
Outstanding at the beginning of the period (in shares) | 5,177 | ||||
Granted (in shares) | 721 | ||||
Exercised (in shares) | (626) | ||||
Cancelled (in shares) | (65) | ||||
Outstanding at the end of the period (in shares) | 5,207 | 5,207 | 5,177 | ||
Weighted-Average Exercise Price | |||||
Outstanding at the beginning of the period (in dollars per share) | $ 0.74 | ||||
Granted (in dollars per share) | 16.86 | ||||
Exercised (in dollars per share) | 0.69 | ||||
Cancelled (in dollars per share) | 2.51 | ||||
Outstanding at the end of the period (in dollars per share) | $ 2.96 | $ 2.96 | $ 0.74 | ||
Weighted-Average Contractual Life | 7 years | 7 years 4 months 24 days | |||
Weighted average assumptions used to value options granted to employees | |||||
Expected term (years) | 6 years 1 month 6 days | 5 years 10 months 24 days | 6 years | 6 years | |
Volatility (as a percent) | 59.00% | 65.80% | 58.90% | 68.50% | |
Risk-free interest rate (as a percent) | 1.28% | 1.68% | 1.34% | 1.57% | |
Weighted average grant date fair value per share | $ 9.83 | $ 1.41 | $ 9.27 | $ 0.89 | |
Stock Options, additional disclosures | |||||
Stock-based compensation expense | $ 400 | $ 100 | $ 800 | $ 300 | |
Unrecognized employee stock-based compensation | $ 7,500 | $ 7,500 | |||
Unrecognized stock-based compensation, period for recognition | 3 years 7 months 6 days |
Stock-Based Compensation - ESPP
Stock-Based Compensation - ESPP (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Stock-Based Compensation | |||||
Stock-based compensation expense | $ 656 | $ 116 | $ 1,048 | $ 251 | |
ESPP | |||||
Stock-Based Compensation | |||||
Maximum annual increase in shares available for issuance (in shares) | 800,000 | 800,000 | 800,000 | ||
Maximum annual increase in shares available for issuance, percentage of outstanding shares | 1.00% | 1.00% | 1.00% | ||
Maximum employee payroll deduction (as a percent) | 100.00% | 100.00% | 100.00% | ||
Maximum offering period | 2 years | ||||
Period between purchases | 6 months | ||||
Price of ESPP shares as percentage of market price | 85.00% | ||||
Holding period for purchases after the first offering period | 6 months | ||||
Holding period for purchases during the first offering period | 12 months | ||||
Stock-based compensation expense | $ 200 | $ 200 | |||
Weighted-average assumptions used to estimate the fair value of ESPP shares | |||||
Expected term (years) | 1 year 3 months 18 days | ||||
Volatility (as a percent) | 51.18% | ||||
Risk-free interest rate (as a percent) | 0.61% | ||||
ESPP | Class A common stock | |||||
Stock-Based Compensation | |||||
Stock available for issuance (in shares) | 800,000 | 800,000 | 800,000 |
Income Taxes (Details)
Income Taxes (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes | |
Federal income tax at statutory rate (as a percent) | 35.00% |
Commitments and Contingencies -
Commitments and Contingencies - Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Commitments and Contingencies | ||||
Rent expense | $ 1,500 | $ 600 | $ 3,100 | $ 1,600 |
Non-cancelable minimum lease commitments | ||||
2016 (for remaining three months) | 628 | 628 | ||
2,017 | 6,206 | 6,206 | ||
2,018 | 7,683 | 7,683 | ||
2,019 | 7,089 | 7,089 | ||
2,020 | 6,750 | 6,750 | ||
Thereafter | 6,186 | 6,186 | ||
Total | 34,542 | 34,542 | ||
Purchase obligations | ||||
2016 (for remaining three months) | 1,096 | 1,096 | ||
2,017 | 1,735 | 1,735 | ||
2,018 | 1,216 | 1,216 | ||
2,019 | 358 | 358 | ||
Total | $ 4,405 | $ 4,405 |
Commitments and Contingencies43
Commitments and Contingencies - Indemnifications (Details) | Sep. 30, 2016USD ($) |
Indemnifications | |
Guarantees and Indemnifications | |
Recorded obligation | $ 0 |