Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 31, 2020 | Jun. 30, 2019 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | TTD | ||
Entity Registrant Name | TRADE DESK, INC. | ||
Entity Central Index Key | 0001671933 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 8,779,399,707 | ||
Entity Interactive Data Current | Yes | ||
Entity Shell Company | false | ||
Entity File Number | 001-37879 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 27-1887399 | ||
Entity Address, Address Line One | 42 N. Chestnut Street | ||
Entity Address, City or Town | Ventura | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 93001 | ||
City Area Code | 805 | ||
Local Phone Number | 585-3434 | ||
Title of 12(b) Security | Class A Common Stock | ||
Security Exchange Name | NASDAQ | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Proxy Statement for the 2020 Annual Meeting of Stockholders are incorporated by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2019. | ||
Class A common stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 40,412,377 | ||
Class B common stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 5,161,323 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 130,876 | $ 207,232 |
Short-term investments | 124,112 | |
Accounts receivable, net | 1,166,376 | 834,764 |
Prepaid expenses and other current assets | 27,857 | 14,527 |
TOTAL CURRENT ASSETS | 1,449,221 | 1,056,523 |
Property and equipment, net | 64,012 | 33,046 |
Operating lease assets | 173,449 | |
Deferred income taxes | 18,950 | 8,460 |
Other assets, non-current | 23,129 | 19,843 |
TOTAL ASSETS | 1,728,761 | 1,117,872 |
Current liabilities: | ||
Accounts payable | 868,618 | 669,147 |
Accrued expenses and other current liabilities | 47,178 | 44,844 |
Operating lease liabilities | 14,577 | |
TOTAL CURRENT LIABILITIES | 930,373 | 713,991 |
Operating lease liabilities, non-current | 174,873 | |
Other liabilities, non-current | 10,998 | 9,314 |
TOTAL LIABILITIES | 1,116,244 | 723,305 |
Commitments and contingencies (Note 13) | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, par value $0.000001; 100,000 shares authorized, zero shares issued and outstanding as of December 31, 2019 and 2018 | ||
Common stock, par value $0.000001 Class A, 1,000,000 shares authorized; 40,305 and 36,822 shares issued and outstanding as of December 31, 2019 and 2018, respectively Class B, 95,000 shares authorized; 5,171 and 7,042 shares issued and outstanding as of December 31, 2019 and 2018, respectively | 0 | 0 |
Additional paid-in capital | 380,079 | 270,447 |
Retained earnings | 232,438 | 124,120 |
TOTAL STOCKHOLDERS’ EQUITY | 612,517 | 394,567 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,728,761 | $ 1,117,872 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Preferred stock, authorized shares | 100,000,000 | 100,000,000 |
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 |
Common stock, authorized shares | 1,095,000,000 | |
Class A common stock | ||
Common stock | ||
Common stock, authorized shares | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 40,305,000 | 36,822,000 |
Common stock, shares outstanding | 40,305,000 | 36,822,000 |
Class B common stock | ||
Common stock | ||
Common stock, authorized shares | 95,000,000 | 95,000,000 |
Common stock, shares issued | 5,171,000 | 7,042,000 |
Common stock, shares outstanding | 5,171,000 | 7,042,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Revenue | $ 661,058 | $ 477,294 | $ 308,217 |
Type of Revenue [Extensible List] | us-gaap:ServiceMember | us-gaap:ServiceMember | us-gaap:ServiceMember |
Operating expenses: | |||
Platform operations | $ 156,180 | $ 114,098 | $ 66,230 |
Type of Cost, Good or Service [Extensible List] | us-gaap:ServiceMember | us-gaap:ServiceMember | us-gaap:ServiceMember |
Sales and marketing | $ 132,882 | $ 87,071 | $ 61,379 |
Technology and development | 116,752 | 83,892 | 52,806 |
General and administrative | 143,048 | 84,910 | 58,446 |
Total operating expenses | 548,862 | 369,971 | 238,861 |
Income from operations | 112,196 | 107,323 | 69,356 |
Other expense (income): | |||
Interest expense (income), net | (4,719) | (333) | 1,698 |
Foreign currency exchange loss, net | 695 | 1,919 | 4,033 |
Total other expense (income), net | (4,024) | 1,586 | 5,731 |
Income before income taxes | 116,220 | 105,737 | 63,625 |
Provision for income taxes | 7,902 | 17,597 | 12,827 |
Net income | $ 108,318 | $ 88,140 | $ 50,798 |
Earnings per share: | |||
Basic | $ 2.43 | $ 2.08 | $ 1.26 |
Diluted | $ 2.27 | $ 1.92 | $ 1.15 |
Weighted average shares outstanding: | |||
Basic | 44,533 | 42,442 | 40,262 |
Diluted | 47,806 | 45,793 | 44,056 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | |
Balance at beginning of period at Dec. 31, 2016 | $ 164,380 | $ 179,198 | $ (14,818) | ||
Balance at beginning of period (in shares) at Dec. 31, 2016 | [1] | 39,131 | |||
Exercise of common stock options | 2,565 | 2,565 | |||
Exercise of common stock options (in shares) | [1] | 1,932 | |||
Stock-based compensation | 21,860 | 21,860 | |||
Issuance of common stock under employee stock purchase plan | 6,997 | 6,997 | |||
Issuance of common stock under employee stock purchase plan (in shares) | [1] | 433 | |||
Restricted stock, net of forfeitures and shares withheld for taxes | (1,017) | (1,017) | |||
Restricted stock, net of forfeitures and shares withheld for taxes (in shares) | [1] | 145 | |||
Net income | 50,798 | 50,798 | |||
Balance at end of period at Dec. 31, 2017 | 245,583 | 209,603 | 35,980 | ||
Balance at end of period (in shares) at Dec. 31, 2017 | [1] | 41,641 | |||
Exercise of common stock options | 10,021 | 10,021 | |||
Exercise of common stock options (in shares) | [1] | 1,446 | |||
Stock-based compensation | 43,695 | 43,695 | |||
Issuance of common stock under employee stock purchase plan | 13,805 | 13,805 | |||
Issuance of common stock under employee stock purchase plan (in shares) | [1] | 699 | |||
Restricted stock, net of forfeitures and shares withheld for taxes | (6,677) | (6,677) | |||
Restricted stock, net of forfeitures and shares withheld for taxes (in shares) | [1] | 78 | |||
Net income | 88,140 | 88,140 | |||
Balance at end of period at Dec. 31, 2018 | 394,567 | 270,447 | 124,120 | ||
Balance at end of period (in shares) at Dec. 31, 2018 | [1] | 43,864 | |||
Exercise of common stock options | 29,874 | 29,874 | |||
Exercise of common stock options (in shares) | [1] | 1,264 | |||
Stock-based compensation | 82,346 | 82,346 | |||
Issuance of common stock under employee stock purchase plan | 16,746 | 16,746 | |||
Issuance of common stock under employee stock purchase plan (in shares) | [1] | 287 | |||
Restricted stock, net of forfeitures and shares withheld for taxes | (19,334) | (19,334) | |||
Restricted stock, net of forfeitures and shares withheld for taxes (in shares) | [1] | 61 | |||
Net income | 108,318 | 108,318 | |||
Balance at end of period at Dec. 31, 2019 | $ 612,517 | $ 380,079 | $ 232,438 | ||
Balance at end of period (in shares) at Dec. 31, 2019 | [1] | 45,476 | |||
[1] | Refer to Note 9—Capitalization for discussion of the Company’s two classes of common stock. |
CONSOLIDATED STATEMENT OF STO_2
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Parenthetical) - Class | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Stockholders Equity [Abstract] | |||
Number of classes of common stock | 2 | 2 | 2 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING ACTIVITIES: | |||
Net income | $ 108,318 | $ 88,140 | $ 50,798 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 21,662 | 11,822 | 7,209 |
Stock-based compensation | 80,758 | 42,210 | 21,317 |
Deferred income taxes | (10,490) | (5,101) | (1,581) |
Bad debt expense | 2,702 | 2,115 | 4,289 |
Noncash lease expense | 21,894 | ||
Other | (1,939) | 2,905 | (1,303) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (331,369) | (239,901) | (224,636) |
Prepaid expenses and other assets | (19,597) | (10,551) | (5,033) |
Accounts payable | 191,763 | 177,675 | 171,793 |
Accrued expenses and other liabilities | 6,845 | 17,289 | 8,371 |
Operating lease liabilities | (10,342) | ||
Net cash provided by operating activities | 60,205 | 86,603 | 31,224 |
INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (35,693) | (19,795) | (10,110) |
Capitalized software development costs | (4,911) | (5,396) | (2,954) |
Business acquisition | (3,000) | ||
Purchases of investments | 212,776 | ||
Maturities of investments | 89,539 | ||
Net cash used in investing activities | (163,841) | (25,191) | (16,064) |
FINANCING ACTIVITIES: | |||
Repayment on line of credit | (27,000) | ||
Payment of debt financing costs | (6) | (279) | (154) |
Payment of financing obligations | (1,001) | ||
Proceeds from exercise of stock options | 29,874 | 10,021 | 2,565 |
Proceeds from employee stock purchase plan | 16,746 | 13,805 | 6,997 |
Taxes paid related to net settlement of restricted stock awards | (19,334) | (6,677) | (1,017) |
Net cash provided by (used in) financing activities | 27,280 | (10,130) | 7,390 |
(Decrease) increase in cash and cash equivalents | (76,356) | 51,282 | 22,550 |
Cash and cash equivalents—Beginning of year | 207,232 | 155,950 | 133,400 |
Cash and cash equivalents—End of year | 130,876 | 207,232 | 155,950 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Cash paid for income taxes | 19,727 | 17,287 | 19,163 |
Cash paid for interest | 412 | 817 | 1,320 |
Capitalized assets financed by accounts payable | 9,252 | 1,944 | 701 |
Tenant improvements paid by lessor | 1,811 | 640 | |
Stock-based compensation included in capitalized software development costs | 1,588 | 1,485 | 543 |
Asset retirement obligation | 3,543 | $ 907 | |
Debt financing costs included in debt, net | $ 1,153 | ||
Cash paid for amounts included in the measurement of lease liabilities included in operating cash flows | 16,923 | ||
Operating lease assets obtained in exchange for operating lease liabilities | $ 150,467 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
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 North America, Europe, Asia and Australia. The Company is a technology company that empowers buyers of advertising by providing a self-service cloud-based platform on which ad buyers can create, manage, and optimize more expressive data-driven digital advertising campaigns across ad formats, including display, video, audio, native and, social, on a multitude of devices, such as computers, mobile devices, and connected TV (CTV). |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2—Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the operations of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. The Company has no material components of other comprehensive income (loss), and accordingly, the Company’s comprehensive income is the same as its net income for all periods presented. Except for the accounting policy for leases that was updated as a result of adopting Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2016-02, Leases, as amended ("ASU 2016-02"), our significant accounting policies have been applied consistently to all years presented. Refer to “Operating Leases” below. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these estimates. On an on-going basis, management evaluates its estimates, primarily those related to: (1) revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, (2) allowances for doubtful accounts, (3) operating lease assets and liabilities, including our incremental borrowing rate and terms and provisions of each lease (4) the useful lives of property and equipment and capitalized software development costs, (5) income taxes, (6) assumptions used in the Black-Scholes option pricing model to determine the fair value of stock-based compensation, (7) the recognition and disclosure of contingent liabilities and (8) the assumptions used in valuing acquired assets and assumed liabilities in business combinations Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) The Company determines revenue recognition through the following steps: • Identification of a contract with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the performance obligations are satisfied. The Company maintains agreements with each client and supplier in the form of master service agreements, which set out the terms of the relationship and access to the Company’s platform. The Company’s performance obligation is to provide the use of its platform to clients to develop ad campaigns and select the advertising inventory, data and other add-on features. The Company charges clients a platform fee, based on a percentage of a client’s purchases through the platform, and the transaction price is determined based on the consideration to which it expects to be entitled in exchange for the completion of a transaction, that is, when a bid is won. The Company reports revenue net of amounts it pays suppliers for the cost of advertising inventory, third-party data and other add-on features (collectively, “Supplier Features”). The determination of whether the Company is the principal or agent, and hence whether to report revenue on a gross basis for the amount of the Supplier Features the clients purchase using the platform plus the Company’s platform fees or on a net basis for the amount of platform fees charged to the client, requires judgment. The Company determined that it is not primarily responsible for the purchase of Supplier Features, but rather, it is primarily responsible to provide a platform that enables clients to bid on advertising inventory, and use data and other add-on features in designing and executing their campaigns. The Company does not control the Supplier Features prior to the purchase by the client, and it does not have pricing latitude with respect to the cost of such features. The platform fee the Company charges clients is a percentage of their purchases through its platform, similar to a commission, and the platform fee is not contingent on the results of an advertising campaign. Based on these and other factors, the Company determined that it is not the principal in the purchase and sale of Supplier Features in all of its arrangements, and therefore, it reports revenue on a net basis for the platform fees charged to clients. The Company generally bills clients for the gross amount of Supplier Features they purchase through its platform and the platform fees, net of allowances (“Gross Billings”). Some of the Company’s clients have payment relationships directly with advertising inventory suppliers in which case the Company only bills these clients for third-party data, other add-on features and its platform fees. The Company invoices its clients on a monthly basis for the purchases occurring during the month. Invoice payment terms, negotiated on a client-by-client basis, are typically between 30 to 90 days. However, for certain agency clients with sequential liability terms, payments are not due to the Company until such agency client has received payment from its clients who are advertisers. The Company’s accounts receivable are recorded at the amount of Gross Billings for the amounts it is responsible to collect, and accounts payable are recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis. Refer to Note 12 for geographic information related to Gross Billings. Operating Expenses The Company classifies its operating expenses into four categories: Platform Operations. Platform operations expense consists of expenses related to hosting the Company’s platform, which includes “internet traffic” associated with the viewing of available impressions or queries per second (“QPS”) and providing support to clients. Platform operations expense includes hosting costs, personnel costs, and amortization of acquired technology and capitalized software costs for the development of the Company’s platform, including allocated overhead. Personnel costs included in platform operations include salaries, bonuses, stock-based compensation, and employee benefit costs, and are primarily attributable to personnel who provide the Company’s clients with support using the Company’s platform and the personnel who support the Company’s platform. The Company capitalizes certain costs associated with the development of the Company’s platform and amortizes these costs over their estimated useful lives in platform operations expense. The Company allocates overhead such as information technology infrastructure, rent and occupancy charges based on headcount. Sales and Marketing. Sales and marketing expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and commission costs, for the Company’s sales and marketing personnel. Sales and marketing expense also includes costs for market development programs, advertising, promotional and other marketing activities, and allocated overhead. The Company allocates overhead such as information technology infrastructure, rent and occupancy charges based on headcount. Commissions costs are expensed as incurred. Technology and Development. The Company’s technology and development expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs, third-party consultant costs associated with the ongoing development and maintenance of the Company’s platform and integrations with our advertising and data inventory suppliers, amortization of capitalized third-party software used in the development of the Company’s platform and allocated overhead. The Company allocates overhead such as information technology infrastructure, rent and occupancy charges based on headcount. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with software development that qualifies for capitalization, which are then recorded as capitalized software development costs included in other assets, non-current on the Company’s consolidated balance sheet. The Company amortizes capitalized software development costs relating to the Company’s platform to platform operations expense. General and Administrative. The Company’s general and administrative expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, and employee benefits costs associated with the Company’s executive, finance, legal, human resources, compliance, and other administrative personnel, as well as accounting and legal professional services fees, bad debt expense and allocated overhead. The Company allocates overhead such as information technology infrastructure, rent and occupancy charges based on headcount. Stock-Based Compensation Compensation expense related to stock options, restricted stock awards and units, which are referred to collectively as restricted stock, and awards granted under the Company’s employee stock purchase plan (“ESPP”), is measured and recognized in the consolidated financial statements based on the fair value of the awards granted. The fair value of each option award is estimated on the grant date using the Black-Scholes option-pricing model. The fair value of restricted stock is calculated using the closing market price of the Company’s common stock on the date of grant, and for performance-based restricted stock, we also assess the probability of targets being achieved in determining the amount of expense to recognize. Stock-based compensation expense related to stock options and restricted stock is recognized on a straight-line basis over the requisite service periods of the awards, which is generally four years. For performance-based restricted stock, expense is recognized on a graded-vesting attribution basis over the requisite service period of the award and is adjusted in subsequent reporting periods if the assessed probability or estimated level of achievement of the performance goals changes. Stock-based compensation expense for ESPP awards is recognized on a graded-vesting attribution basis over the requisite service period of each award. Determining the fair value of stock options and ESPP awards requires judgment. The Company’s use of the Black-Scholes option pricing model requires the input of subjective assumptions. The assumptions used in the Company’s option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. These assumptions and estimates are as follows: Risk-Free Interest Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities approximating the expected term of the awards. Expected Term. Given insufficient historical data relating to stock option exercises, to determine the expected term, the Company applies the simplified approach, in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award. For ESPP awards, the expected term is the time period from the grant date to the respective purchase dates included within each offering period. Volatility. Because the Company has a short trading history for its common stock, the Company determines the price volatility based on a blend of the historical volatilities of a publicly traded peer group, implied volatilities from its traded options, and its historical volatility, based on daily price observations over a period equivalent to the expected term of the award. Dividend Yield. The dividend yield assumption is based on the Company’s history and current expectations of dividend payouts. The Company has never declared or paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future, so the Company used an expected dividend yield of zero. The Company will continue to use judgment in evaluating the assumptions related to the Company’s stock-based compensation. Income Taxes Deferred income tax assets and liabilities are determined based upon the net tax effects of the differences between the Company’s consolidated financial statements carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. A valuation allowance is used to reduce some or all of the deferred tax assets if, based upon the weight of available evidence, it is more likely than not that those deferred tax assets will not be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties accrued related to its uncertain tax positions in its income tax provision in the accompanying consolidated statements of operations. In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income ("GILTI") provisions of the Tax Cuts and Jobs Act (the "Act"). The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or to treat any taxes on GILTI inclusions as period cost are both acceptable methods subject to an accounting policy election. The Company elected to treat any GILTI inclusions as a period cost. Net Income Per Share Attributable to Common Stockholders Basic net income per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding. Diluted net income per share attributable to common stockholders adjusts the basic net income per share attributable to common stockholders and the weighted-average number of shares of common stock outstanding for the potentially dilutive impact of stock options, restricted stock and ESPP using the treasury-stock method. Cash, Cash Equivalents and Marketable Securities The Company considers all short-term highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents, consisting of money market funds and time deposits, are carried at fair value. Refer to Note 6—Cash, Cash Equivalents and Short-Term Investments for additional information regarding the fair value of cash equivalents and marketable securities. The Company classifies its marketable securities as available-for-sale investments in its current assets because they represent investments of cash available for current operations. Available-for-sale investments are carried at fair value with any unrealized gains and losses, net of taxes, included in accumulated other comprehensive income (loss) in stockholders' equity. Unrealized losses are charged against other expense when a decline in fair value is determined to be other-than-temporary. The Company determines realized gains or losses on sale of marketable securities on a specific identification method, and records such gains or losses as other expense (income). Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, are unsecured and do not bear interest. The Company performs ongoing credit evaluations of its clients and certain advertisers when the Company’s agreements with its clients contain sequential liability terms that provide that the client payments are not due to the Company until the client has received payment from its clients who are advertisers. The allowance for doubtful accounts is based on the best estimate of the amount of probable credit losses in existing accounts receivable. The allowance for doubtful accounts is determined based on historical collection experience and the review in each period of the status of the then-outstanding accounts receivable, while taking into consideration current client information, subsequent collection history and other relevant data. The Company reviews the allowance for doubtful accounts on a quarterly basis. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. The following table presents changes in the allowance for doubtful accounts (in thousands): Year Ended December 31, 2019 2018 2017 Beginning balance $ 2,973 $ 2,257 $ 2,574 Add: bad debt expense 2,702 2,115 4,289 Less: write-offs, net of recoveries (1,755 ) (1,399 ) (4,606 ) Ending balance $ 3,920 $ 2,973 $ 2,257 Property and Equipment, Net Property and equipment are recorded at historical cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method based upon the following estimated useful lives: Years Computer equipment 2 – 3 Purchased software 3 – 5 Furniture, fixtures and office equipment 5 Leasehold improvements * * Leasehold improvements are amortized on a straight-line basis over the term of the lease, or the useful life of the assets, whichever is shorter. Repair and maintenance costs are charged to expense as incurred, while renewals and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s operating results. Capitalized Software Development Costs The Company capitalizes certain costs associated with creating and enhancing internally developed software related to the Company’s technology infrastructure. These costs include personnel and related employee benefits expenses for employees who are directly associated with and who devote time to software development projects, and external direct costs of materials and services consumed in developing or obtaining the software. Software development costs that do not qualify for capitalization, as further discussed below, are expensed as incurred and recorded in technology and development expenses in the consolidated statements of operations. Software development activities typically consist of three stages: (1) the planning phase; (2) the application and infrastructure development stage; and (3) the post implementation stage. Costs incurred in the planning and post implementation phases, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed when the preliminary project stage is completed, management implicitly or explicitly authorizes and commits to funding the project and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development phases, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software is ready for its intended purpose. Software development costs are amortized using a straight-line method over the estimated useful life of two years, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived. The Company does not transfer ownership of its internally developed software, or lease its software, to third parties. Cloud computing arrangements (“CCAs”), such as software as a service and other hosting arrangements, are evaluated for capitalized implementation costs in a similar manner as capitalized software development costs. If a CCA includes a software license, the software license element of the arrangement is accounted for in a manner consistent with the acquisition of other software licenses. If a CCA does not include a software license, the service element of the arrangement is accounted for as a service contract. The Company capitalized certain implementation costs its CCAs that are service contracts, which are included in . The Company amortizes capitalized implementation costs in a CCA over the life of the service contract. Business Combinations The results of a business acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business generally being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations. The Company performs valuations of assets acquired and liabilities assumed and allocates the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed may require management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, and selection of comparable companies. The Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities assumed in a business combination. In October 2017, the Company paid $3.0 million in cash for certain assets of a data company accounted for as a business combination. These assets primarily consisted of acquired technology and goodwill which are included in other assets, non-current. Operating Leases On January 1, 2019, the Company adopted ASU No. 2016-02, codified as Accounting Standards Codification (“ASC”) 842, using the modified retrospective adoption approach. The Company elected the transition option provided by ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, to not restate comparative periods, but rather to initially adopt the requirements of ASC 842 on January 1, 2019. The most significant impact of the adoption of ASC 842 resulted in the recognition of operating lease right-of-use assets (“operating lease assets’) of approximately $41 million, net of deferred rent and direct costs, and operating lease liabilities of approximately $47 million on its consolidated balance sheet. The impact on the Company’s consolidated statements of income and cash flows was not material. ASC 842, provides various optional transition practical expedients. Upon transition to ASC 842, the Company elected the use of the package of practical expedients to not reassess: whether a contract is or contains a lease, lease classification and indirect costs. The Company did not elect the hindsight practical expedient in transition. The Company has elected to not separate lease and non-lease components. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right. The Company determines if an arrangement is, or contains, a lease at inception. Operating leases are included in operating lease assets, operating lease liabilities and operating lease liabilities, non-current on our consolidated balance sheets Operating lease assets and liabilities Refer to Note 8—Leases for additional information. 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 approximates fair value based on borrowing rates currently available to the Company for financing with similar terms and were determined to be Level 2. Certain long-lived assets including 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 material impairments have been recorded on those assets. Concentration of Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, marketable securities and accounts receivable. The Company maintains its cash and cash equivalents with financial institutions and its cash levels exceed the Federal Deposit Insurance Corporation (FDIC) federally insured limits. Marketable securities and short-term investments consist of investments in U.S. government securities, U.S. government agency securities, and high credit quality corporate debt securities. For 2019, two clients accounted for 13% and 10%, respectively, of Gross Billings. For 2018, two clients accounted for 20% and 10%, respectively, of Gross Billings. For 2017, three clients accounted for 22%, 11% and 10%, respectively, of Gross Billings. As of December 31, 2019, three clients accounted for 18%, 16% and 16%, respectively, of consolidated accounts receivable. As of December 31, 2018, two clients accounted for 24% and 14%, respectively, of consolidated accounts receivable. As of December 31, 2019 and 2018, no suppliers accounted for more than 10% of consolidated accounts payable. Foreign Currency Transactions and Translation The Company has entities operating in various countries. Each of these entities’ functional currency is the U.S. Dollar. Transactions in foreign currencies are translated into U.S. Dollars at the rates of exchange in effect at the date of the transaction. Net transaction losses were approximately $0.7 million, $1.9 million, and $4.0 million for the years ended December 31, 2019, 2018 and 2017, respectively, and are included in foreign currency exchange loss, net in the accompanying consolidated statements of operations. The Company enters into forward contracts to hedge foreign currency exposures related primarily to the Company’s foreign currency denominated accounts receivable. The Company does not designate the foreign exchange forward contracts as hedges for accounting purposes and changes in the fair value of the foreign exchange forward contracts are recorded in foreign currency exchange loss, net in the accompanying consolidated statements of operations. As of December 31, 2019 and 2018, the Company had open forward contracts with aggregate notional amounts of $92.9 million and $78.8 million, respectively. The fair value of the open forward contracts was not material. The Company’s forward contracts generally have terms of 30-60 days. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments - Credit Losses, in April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . These ASUs provide supplemental guidance and clarification to ASU 2016-13 and must be adopted concurrently with the adoption of ASU 2016-13, cumulatively referred to as “Topic 326.” Topic 326 is In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement-Disclosure Framework (Topic 820). In December 2019, the FASB issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for us in the first quarter of 2021 on a prospective basis, and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on our consolidated financial statements. |
Net Income Per Share Attributab
Net Income Per Share Attributable to Common Stockholders | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Share Attributable to Common Stockholders | Note 3—Net Income Per Share Attributable to Common Stockholders The Company has two classes of common stock, Class A and Class B. Basic and diluted earnings per share (“EPS”) 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 computation of basic and diluted EPS is as follows (in thousands, except per share amounts): Year Ended December 31, 2019 2018 2017 Numerator: Net income $ 108,318 $ 88,140 $ 50,798 Denominator: Weighted-average shares outstanding—basic 44,533 42,442 40,262 Effect of dilutive securities: Options to purchase common stock 2,794 2,845 3,415 ESPP shares 131 251 268 Restricted stock 348 255 111 Weighted-average shares outstanding—diluted 47,806 45,793 44,056 Basic EPS $ 2.43 $ 2.08 $ 1.26 Diluted EPS $ 2.27 $ 1.92 $ 1.15 Anti-dilutive equity awards under stock-based award plans excluded from the determination of diluted EPS 691 472 1,246 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | Note 4—Property and Equipment, Net Major classes of property and equipment were as follows (in thousands): As of December 31, 2019 2018 Computer equipment $ 13,594 $ 11,806 Purchased software 9,898 9,777 Furniture and fixtures 11,304 8,175 Construction in progress (1) 20,034 252 Leasehold improvements 36,523 18,693 91,353 48,703 Less: Accumulated depreciation (27,341 ) (15,657 ) $ 64,012 $ 33,046 (1) I Depreciation expense for 2019, 2018 and 2017 was $14.9 million, $8.1 million and $5.3 million, respectively. To date, there have been no impairment charges to property and equipment. |
Capitalized Software Developmen
Capitalized Software Development Costs | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Capitalized Software Development Costs | Note 5—Capitalized Software Development Costs Capitalized software development costs, included in other assets, non-current, were as follows (in thousands): As of December 31, 2019 2018 Capitalized software development costs, gross $ 15,203 $ 11,487 Less: Accumulated amortization (6,121 ) (3,386 ) Capitalized software development costs, net $ 9,082 $ 8,101 The Company capitalized $6.5 million, $6.9 million and $3.5 million of software development costs in 2019, 2018 and 2017, respectively. Amortization expense was $5.5 million, $3.2 million and $1.9 million for 2019, 2018 and 2017, respectively. Based on the Company’s capitalized software development costs ready for intended use as of December 31, 2019, estimated amortization expense of $5.1 million and $1.7 million is expected to be recognized in 2020 and 2021, respectively. Amortization has not started on $2.3 million of capitalized software development costs that are not yet ready for intended use as of December 31, 2019. |
Cash, Cash Equivalents and Shor
Cash, Cash Equivalents and Short-Term Investments | 12 Months Ended |
Dec. 31, 2019 | |
Cash Cash Equivalents And Short Term Investments [Abstract] | |
Cash, Cash Equivalents and Short-Term Investments | Note 6—Cash, Cash Equivalents and Short-Term Investments Cash, cash equivalents and short-term investments in marketable securities were as follows (in thousands): As of December 31, 2019 Cash and Cash Short-Term Equivalents Investments Total Cash $ 32,123 — $ 32,123 Level 1: Money market funds 45,588 — 45,588 Time deposits 35,000 35,000 Level 2: — Commercial paper 15,666 24,975 40,641 Corporate debt securities — 78,998 78,998 U.S. government and agency securities 2,499 20,139 22,638 Total $ 130,876 $ 124,112 $ 254,988 As of December 31, 2018 Cash and Cash Equivalents Cash $ 35,087 Level 1: Money market funds 14,145 Time deposits 158,000 Total $ 207,232 The Company’s gross unrealized gains or losses from its short-term investments, recorded at fair value, for the periods presented within this Annual Report were immaterial. The contractual maturities of the Company’s short-term investments are as follows (in thousands): December 31, 2019 Due in one year $ 108,257 Due in one to two years 15,855 Total $ 124,112 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Note 7—Debt Revolving Credit Facility On October 26, 2018, the Company and a syndicate of banks, led by Citibank, N.A., as agent, entered into a second amended and restated loan and security agreement (the “Second A&R Credit Agreement”). Loans under the Second A&R Credit Facility bear interest through maturity at a variable rate based upon, at the Company’s option, 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 0.50%, (2) Citibank, N.A.’s prime rate, and (3) one month LIBOR rate plus 2.00%. The applicable margin is between 0.25% to 1.25% for Base Rate Borrowings and between 1.25% and 2.25% for LIBOR Rate Borrowings based on the Company maintaining certain leverage ratios. The fee for undrawn amounts under the Second A&R Credit Facility ranges, based on the applicable leverage, from 0.225% to 0.400%. The Company will also be required to pay customary letter of credit fees, as necessary. As of December 31, 2019, the Company did not have an outstanding debt balance under the Second A&R Credit Facility, and availability was $143.3 million. The Second A&R Credit Facility matures and all outstanding amounts become due and payable on May 9, 2022. The Second A&R Credit Agreement 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 Second A&R Credit Agreement also requires the Company to maintain compliance with (a) a maximum ratio of consolidated funded debt to consolidated EBITDA of 3.50 to 1.00 and (b) a minimum ratio of consolidated EBITDA to interest expense of at least 3.00 to 1.00. As of December 31, 2019, the Company was in compliance with all covenants. The Company entered into the Second A&R Credit Agreement primarily to lower its borrowing costs and to change from an asset-based structure to a cash-flow based structure. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 8—Leases The Company has operating leases for its offices. Its leases have remaining lease terms of up to 11 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year with proper notification. Certain leases contain provisions for property-related costs that are variable in nature for which the Company is responsible, including common area maintenance and other property operating services. These costs are calculated based on a variety of factors including property values, tax and utility rates, property services fees, and other factors. The Company records rent expense for operating leases, some of which have escalating rent payments, on a straight-line basis over the lease term. The components of lease expense for the years ended December 31, 2019 were as follows (in thousands): Amount Operating lease cost $ 28,181 Short-term lease cost 1,582 Variable lease cost 2,469 Sublease income (1,266 ) Total lease cost $ 30,966 Rent expense for non-cancelable operating leases was $10.9 million and $8.2 million for the years ended December 31, 2018 and 2017, respectively. Supplemental information related to leases as of December 31, 2019 was as follows: Weighted average remaining lease term 8.7 years Weighted average discount rate 4.5% Maturities of lease commitments as of December 31, 2019 were as follows (in thousands): Year Amount 2020 $ 14,770 2021 45,522 2022 42,056 2023 38,310 2024 32,310 Thereafter 152,361 Total undiscounted lease commitments 325,329 Less: commitments for leases not yet commenced (89,381 ) Less: interest (46,498 ) Present value of lease liabilities 189,450 Less: operating lease liabilities, current (14,577 ) Operating lease liabilities, non-current $ 174,873 As of December 31, 2018, the Company’s non-cancelable minimum lease commitments were as follows (in thousands): Year Amount (1) 2019 $ 13,419 2020 18,746 2021 29,054 2022 23,786 2023 20,902 Thereafter 119,109 Total $ 225,016 (1) Includes non-cancelable minimum lease payments of $183.5 million for leases executed in 2018 that the Company planned to occupy in 2019. |
Capitalization
Capitalization | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Capitalization | Note 9—Capitalization As of December 31, 2019, the Company is authorized to issue 1,095,000,000 shares of common stock, 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. 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. No shares of preferred stock are outstanding as of December 31, 2019 and 2018. 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. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note 10—Stock-Based Compensation Stock-Based Compensation Expense Stock-based compensation expense recorded in the consolidated statements of operations was as follows (in thousands): Year Ended December 31, 2019 2018 2017 Platform operations $ 5,350 $ 4,463 $ 2,674 Sales and marketing 20,769 11,306 6,261 Technology and development 26,553 13,855 6,661 General and administrative 28,086 12,586 5,721 Total $ 80,758 $ 42,210 $ 21,317 Stock-Based Award Plans The Company is authorized to issue stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based and cash-based awards under its 2016 Incentive Award Plan. As of December 31, 2019, 4.5 million shares remained available for grant under the Company’s 2016 Incentive Award Plan. The number of shares authorized for grant is subject to increase each year on January 1, equal to the lesser of (a) 4% of the common stock outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the board of directors. On January 1, 2020, the number of shares authorized for grant under the Company’s 2016 Incentive Award Plan was increased by 1.8 million shares in accordance with plan provisions. Stock options granted under the Company’s stock incentive plans generally vest over four years, subject to the holder’s continued service through the vesting date, and expire no later than 10 years from the date of grant. Restricted stock awards generally vest over four years, subject to the holder’s continued service through the vesting date. Stock Options The following summarizes stock option activity: Shares Under Option (in thousands) Weighted- Average Exercise Price Weighted- Average Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2018 4,630 $ 37.03 Granted 869 182.23 Exercised (1,264 ) 23.59 Cancelled (171 ) 73.23 Outstanding as of December 31, 2019 4,064 $ 70.74 7.5 $ 769,018 Exercisable as of December 31, 2019 1,902 $ 34.55 6.5 $ 428,501 The fair value of options on the date of grant was estimated based on the Black-Scholes option pricing model. The weighted average assumptions used to value options granted to employees for the periods presented were as follows: Year Ended December 31, 2019 2018 2017 Expected term (years) 6.0 6.0 6.0 Expected volatility 53.2 % 48.2 % 52.6 % Risk-free interest rate 2.26 % 2.85 % 2.03 % Estimated dividend yield — % — % — % The weighted average grant date fair value per share of stock options granted for the years ended December 31, 2019, 2018 and 2017 and were $94.91, $35.08 and $22.48, respectively. The total intrinsic value of options exercised during the years ended December 31, 2019, 2018 and 2017 were $222.0 million, $119.0 million and $84.8 million, respectively. Stock-based compensation expense related to stock options was $37.2 million, $17.7 million and $7.9 million for the years ended December 31, 2019, 2018 and 2017, respectively. At December 31, 2019, the Company had unrecognized employee stock-based compensation relating to stock options of approximately $107.5 million, which is expected to be recognized over a weighted-average period of 2.4 years. Restricted Stock The following summarizes restricted stock activity: Shares (in thousands) Weighted- Average Grant Date Fair Value Per Share Unvested as of December 31, 2018 518 $ 65.14 Granted 188 201.21 Vested (202 ) 67.47 Forfeited (47 ) 60.89 Unvested as of December 31, 2019 457 $ 120.65 Stock-based compensation expense related to restricted stock was $17.9 million, $7.4 million and $2.7 million for the years ended December 31, 2019, 2018 and 2017, respectively. At December 31, 2019, the Company had unrecognized employee stock-based compensation relating to restricted stock of approximately $47.9 million, which is expected to be recognized over a weighted-average period of 2.5 years. On November 30, 2018, the Company entered into a transition agreement with its Chief Operating Officer (the “Transition Agreement”), which transition period is expected to end by June 30, 2019. Among other terms of the Transition Agreement, the Company granted a performance-based restricted stock award for 24,000 shares of the Company’s common stock subject to time-and performance-based vesting (the “PSUs”). The PSUs are included in the restricted stock activity for the year ended December 31, 2019 and 2018. Employee Stock Purchase Plan In September 2016, the Company established an ESPP with 800,000 shares of Class A common stock available for issuance. As of December 31, 2019, 0.3 million shares remained available for grant under this plan. The number of shares authorized for grant is subject to increase each year on January 1, equal to the lesser of (a) 800,000 shares, (b) 1% of the common stock outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year, and (c) such smaller number of shares as determined by the Company’s board of directors. On January 1, 2020, the number of shares available for issuance under the Company’s Employee Stock Purchase Plan was increased by 0.5 million shares in accordance with plan provisions. Under the ESPP, all eligible employees are permitted to 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. ESPP purchases generally occur on May 15th and November 15th each year. At each purchase date, employees are able to purchase shares at 85% of the lower of (1) the closing market price per share of Class A common stock on the employee’s enrollment into the applicable offering period and (2) 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: Year ended December 31, 2019 2018 2017 Expected term (years) 0.7 0.8 0.9 Expected volatility 53.2 % 46.2 % 45.9 % Risk-free interest rate 2.08 % 2.32 % 1.22 % Estimated dividend yield — % — % — % The ESPP has a six-month |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11—Income Taxes The following are the domestic and foreign components of the Company’s income before income taxes (in thousands): Year Ended December 31, 2019 2018 2017 Domestic $ 162,252 $ 115,706 $ 66,148 Foreign (46,032 ) (9,969 ) (2,523 ) Income before income taxes $ 116,220 $ 105,737 $ 63,625 The following are the components of the provision for income taxes (in thousands): Year Ended December 31, 2019 2018 2017 Current: Federal $ 9,180 $ 11,683 $ 9,944 State and local 7,800 9,295 3,906 Foreign 1,412 1,720 558 Total current provision 18,392 22,698 14,408 Deferred: Federal (6,316 ) (918 ) (172 ) State and local (5,339 ) (2,615 ) (1,382 ) Foreign 1,165 (1,568 ) (27 ) Total deferred provision (10,490 ) (5,101 ) (1,581 ) Total provision for income taxes $ 7,902 $ 17,597 $ 12,827 A reconciliation of the statutory tax rate to the effective tax rate for the periods presented is as follows: Year Ended December 31, 2019 2018 2017 U.S. federal statutory income tax rate 21.0 % 21.0 % 35.0 % State and local income taxes, net of federal benefit 1.7 5.0 2.6 Foreign income at other than U.S. rates (1) 10.5 2.1 2.2 Stock-based compensation (20.5 ) (7.6 ) (19.0 ) Meals and entertainment 0.7 0.5 0.4 Nondeductible compensation (1.3 ) — — Research and development credit (5.0 ) (3.9 ) (2.8 ) Federal deferred tax asset revaluation — — 0.9 Other permanent items (0.3 ) (0.4 ) 0.9 Effective income tax rate 6.8 % 16.7 % 20.2 % (1) For the Set forth below are the tax effects of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities (in thousands): As of December 31, 2019 2018 Deferred tax assets (liabilities): Reserves and allowances $ 3,275 $ 2,465 Accrued expenses 5,452 4,193 Net operating losses 19,225 854 Research and development tax credit 2,739 1,367 Stock-based compensation 10,641 4,726 Deferred rent (40 ) 1,425 Prepaid expenses (685 ) (559 ) Property and equipment (2,606 ) (4,228 ) Intangibles (1) 179,096 87 Capitalized software development costs (2,056 ) (1,874 ) Operating lease assets (37,394 ) — Operating lease liabilities 40,366 — Other 151 4 Valuation allowance (199,214 ) — Total deferred tax assets, net $ 18,950 $ 8,460 (1) As of December 31, 2019, includes intangibles associated with our international restructuring, net of amortization, offset by a reserve for uncertain tax position. See discussion below. In April 2019, the Company completed a series of transactions resulting in changes to its international legal structure, including a transfer of certain intellectual property rights among wholly owned subsidiaries, primarily to align its structure to its evolving operations. The Company recorded a $262.4 million deferred tax asset associated with this restructuring offset by a reserve for uncertain tax position of $51.0 million. Based on available objective evidence, management believes it is not more-likely-than-not that these additional foreign deferred tax assets will be realizable as of December 31, 2019 and, therefore, are offset by a full valuation allowance to the extent not offset by reserves from uncertain tax positions. Management applied significant judgment in estimating the fair value of intangible assets, which involved the use of significant assumptions, including revenue growth rates, margins and discount rates. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. During 2019, management recorded a valuation allowance of $199.2 million against its U.K. net deferred tax assets, based on the previous history of cumulative losses and the conclusion that future taxable profit may not be available for the utilization of the deferred tax assets for U.K. income tax purposes. As of December 31, 2019, the Company had net operating loss carryforwards in the U.K. of approximately $129.1 million, which can be carried carryforward indefinitely. As of December 31, 2019, the Company had state and U.K. research and development tax credits of approximately $4.7 million and $0.3 million, respectively, which can be carried forward indefinitely. As of December 31, 2019, unremitted earnings of the subsidiaries outside of the U.S. were approximately $1.2 million, on which no state taxes have been paid. The Company’s intention is to indefinitely reinvest these earnings outside the U.S. Upon distribution of those earnings in the form of a dividend or otherwise, the Company would be subject to both state income taxes and withholding taxes payable to various foreign countries. The amounts of such tax liabilities that might be payable upon repatriation of foreign earnings are not material. As of December 31, 2019, the Company had gross unrecognized tax benefits of approximately $53.2 million, $47.1 million of which is a reduction to deferred tax assets and the remaining $6.1 million The following table presents changes in gross unrecognized tax benefits (in thousands): Year Ended December 31, 2019 2018 2017 Beginning balance $ 4,330 $ 3,101 $ 1,007 Increases related to prior year tax positions — — 123 Decreases related to prior year tax positions (20 ) (270 ) — Increases related to current year tax positions (1) 49,100 1,499 1,971 Settlements (197 ) — — Ending balance $ 53,213 $ 4,330 $ 3,101 (1) For the Interest and penalties related to the Company’s unrecognized tax benefits accrued as of December 31, 2019 were not material. The Company files U.S. federal, state, and foreign tax returns. The Company is currently under examination by the California Franchise Tax Board for the years ended December 31, 2016 and 2017. The Company expects to reduce its unrecognized tax benefits by $0.4 million during the next twelve months. The 2016 through 2018 U.S. federal tax returns and 2010 through 2018 state tax returns remain open to examination. The majority of the Company’s foreign subsidiaries remain subject to examination by local taxing authorities for 2014 and subsequent years. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2019 | |
Segments Geographical Areas [Abstract] | |
Segment and Geographic Information | Note 12—Segment and Geographic Information The Company reports revenue net of amounts it pays suppliers for the cost of advertising inventory, third-party data and other add-on features (collectively, “Supplier Features”). The Company generally bills clients for the gross amount of Supplier Features they purchase through its platform and the platform fees, net of allowances (“Gross Billings”). The Company’s accounts receivable are recorded at the amount of Gross Billings for the amounts it is responsible to collect, and accounts payable are recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis. Gross Billings, based on the billing address of the clients or client affiliates, were as follows (in thousands): Year Ended December 31, 2019 2018 2017 US $ 2,639,497 $ 1,937,074 $ 1,270,116 International 456,190 347,939 221,626 Total $ 3,095,687 $ 2,285,013 $ 1,491,742 Property and equipment, net and operating lease assets presented by principal geographic area, were as follows (in thousands): December 31, 2019 December 31, 2018 (1) US $ 157,245 $ 25,887 International 80,216 7,159 Total $ 237,461 $ 33,046 (1) As a result of the Company’s adoption of ASC 842 on January 1, 2019, the December 31, 2018 balance excludes operating lease assets. Refer to Note 2 — |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13—Commitments and Contingencies As of December 31 Refer to Note 8 — Leases for additional information regarding lease commitments. As of December 31, 2019, the Company has non-cancelable commitments to its hosting services providers, marketing contracts and commitments to providers of software as a service. Year Amount 2020 $ 55,112 2021 32,298 2022 31,539 2023 30,000 2024 38,000 $ 186,949 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 as of December 31, 2019 and 2018. 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 on an at-will basis, subject to certain severance obligations in the event of certain involuntary terminations. 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 Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the operations of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. The Company has no material components of other comprehensive income (loss), and accordingly, the Company’s comprehensive income is the same as its net income for all periods presented. Except for the accounting policy for leases that was updated as a result of adopting Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2016-02, Leases, as amended ("ASU 2016-02"), our significant accounting policies have been applied consistently to all years presented. Refer to “Operating Leases” below. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these estimates. On an on-going basis, management evaluates its estimates, primarily those related to: (1) revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, (2) allowances for doubtful accounts, (3) operating lease assets and liabilities, including our incremental borrowing rate and terms and provisions of each lease (4) the useful lives of property and equipment and capitalized software development costs, (5) income taxes, (6) assumptions used in the Black-Scholes option pricing model to determine the fair value of stock-based compensation, (7) the recognition and disclosure of contingent liabilities and (8) the assumptions used in valuing acquired assets and assumed liabilities in business combinations |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) The Company determines revenue recognition through the following steps: • Identification of a contract with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the performance obligations are satisfied. The Company maintains agreements with each client and supplier in the form of master service agreements, which set out the terms of the relationship and access to the Company’s platform. The Company’s performance obligation is to provide the use of its platform to clients to develop ad campaigns and select the advertising inventory, data and other add-on features. The Company charges clients a platform fee, based on a percentage of a client’s purchases through the platform, and the transaction price is determined based on the consideration to which it expects to be entitled in exchange for the completion of a transaction, that is, when a bid is won. The Company reports revenue net of amounts it pays suppliers for the cost of advertising inventory, third-party data and other add-on features (collectively, “Supplier Features”). The determination of whether the Company is the principal or agent, and hence whether to report revenue on a gross basis for the amount of the Supplier Features the clients purchase using the platform plus the Company’s platform fees or on a net basis for the amount of platform fees charged to the client, requires judgment. The Company determined that it is not primarily responsible for the purchase of Supplier Features, but rather, it is primarily responsible to provide a platform that enables clients to bid on advertising inventory, and use data and other add-on features in designing and executing their campaigns. The Company does not control the Supplier Features prior to the purchase by the client, and it does not have pricing latitude with respect to the cost of such features. The platform fee the Company charges clients is a percentage of their purchases through its platform, similar to a commission, and the platform fee is not contingent on the results of an advertising campaign. Based on these and other factors, the Company determined that it is not the principal in the purchase and sale of Supplier Features in all of its arrangements, and therefore, it reports revenue on a net basis for the platform fees charged to clients. The Company generally bills clients for the gross amount of Supplier Features they purchase through its platform and the platform fees, net of allowances (“Gross Billings”). Some of the Company’s clients have payment relationships directly with advertising inventory suppliers in which case the Company only bills these clients for third-party data, other add-on features and its platform fees. The Company invoices its clients on a monthly basis for the purchases occurring during the month. Invoice payment terms, negotiated on a client-by-client basis, are typically between 30 to 90 days. However, for certain agency clients with sequential liability terms, payments are not due to the Company until such agency client has received payment from its clients who are advertisers. The Company’s accounts receivable are recorded at the amount of Gross Billings for the amounts it is responsible to collect, and accounts payable are recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis. Refer to Note 12 for geographic information related to Gross Billings. |
Operating Expenses | Operating Expenses The Company classifies its operating expenses into four categories: Platform Operations. Platform operations expense consists of expenses related to hosting the Company’s platform, which includes “internet traffic” associated with the viewing of available impressions or queries per second (“QPS”) and providing support to clients. Platform operations expense includes hosting costs, personnel costs, and amortization of acquired technology and capitalized software costs for the development of the Company’s platform, including allocated overhead. Personnel costs included in platform operations include salaries, bonuses, stock-based compensation, and employee benefit costs, and are primarily attributable to personnel who provide the Company’s clients with support using the Company’s platform and the personnel who support the Company’s platform. The Company capitalizes certain costs associated with the development of the Company’s platform and amortizes these costs over their estimated useful lives in platform operations expense. The Company allocates overhead such as information technology infrastructure, rent and occupancy charges based on headcount. Sales and Marketing. Sales and marketing expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and commission costs, for the Company’s sales and marketing personnel. Sales and marketing expense also includes costs for market development programs, advertising, promotional and other marketing activities, and allocated overhead. The Company allocates overhead such as information technology infrastructure, rent and occupancy charges based on headcount. Commissions costs are expensed as incurred. Technology and Development. The Company’s technology and development expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs, third-party consultant costs associated with the ongoing development and maintenance of the Company’s platform and integrations with our advertising and data inventory suppliers, amortization of capitalized third-party software used in the development of the Company’s platform and allocated overhead. The Company allocates overhead such as information technology infrastructure, rent and occupancy charges based on headcount. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with software development that qualifies for capitalization, which are then recorded as capitalized software development costs included in other assets, non-current on the Company’s consolidated balance sheet. The Company amortizes capitalized software development costs relating to the Company’s platform to platform operations expense. General and Administrative. The Company’s general and administrative expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, and employee benefits costs associated with the Company’s executive, finance, legal, human resources, compliance, and other administrative personnel, as well as accounting and legal professional services fees, bad debt expense and allocated overhead. The Company allocates overhead such as information technology infrastructure, rent and occupancy charges based on headcount. |
Stock-Based Compensation | Stock-Based Compensation Compensation expense related to stock options, restricted stock awards and units, which are referred to collectively as restricted stock, and awards granted under the Company’s employee stock purchase plan (“ESPP”), is measured and recognized in the consolidated financial statements based on the fair value of the awards granted. The fair value of each option award is estimated on the grant date using the Black-Scholes option-pricing model. The fair value of restricted stock is calculated using the closing market price of the Company’s common stock on the date of grant, and for performance-based restricted stock, we also assess the probability of targets being achieved in determining the amount of expense to recognize. Stock-based compensation expense related to stock options and restricted stock is recognized on a straight-line basis over the requisite service periods of the awards, which is generally four years. For performance-based restricted stock, expense is recognized on a graded-vesting attribution basis over the requisite service period of the award and is adjusted in subsequent reporting periods if the assessed probability or estimated level of achievement of the performance goals changes. Stock-based compensation expense for ESPP awards is recognized on a graded-vesting attribution basis over the requisite service period of each award. Determining the fair value of stock options and ESPP awards requires judgment. The Company’s use of the Black-Scholes option pricing model requires the input of subjective assumptions. The assumptions used in the Company’s option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. These assumptions and estimates are as follows: Risk-Free Interest Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities approximating the expected term of the awards. Expected Term. Given insufficient historical data relating to stock option exercises, to determine the expected term, the Company applies the simplified approach, in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award. For ESPP awards, the expected term is the time period from the grant date to the respective purchase dates included within each offering period. Volatility. Because the Company has a short trading history for its common stock, the Company determines the price volatility based on a blend of the historical volatilities of a publicly traded peer group, implied volatilities from its traded options, and its historical volatility, based on daily price observations over a period equivalent to the expected term of the award. Dividend Yield. The dividend yield assumption is based on the Company’s history and current expectations of dividend payouts. The Company has never declared or paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future, so the Company used an expected dividend yield of zero. The Company will continue to use judgment in evaluating the assumptions related to the Company’s stock-based compensation. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined based upon the net tax effects of the differences between the Company’s consolidated financial statements carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. A valuation allowance is used to reduce some or all of the deferred tax assets if, based upon the weight of available evidence, it is more likely than not that those deferred tax assets will not be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties accrued related to its uncertain tax positions in its income tax provision in the accompanying consolidated statements of operations. In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income ("GILTI") provisions of the Tax Cuts and Jobs Act (the "Act"). The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or to treat any taxes on GILTI inclusions as period cost are both acceptable methods subject to an accounting policy election. The Company elected to treat any GILTI inclusions as a period cost. |
Net Income Per Share Attributable to Common Stockholders | Net Income Per Share Attributable to Common Stockholders Basic net income per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding. Diluted net income per share attributable to common stockholders adjusts the basic net income per share attributable to common stockholders and the weighted-average number of shares of common stock outstanding for the potentially dilutive impact of stock options, restricted stock and ESPP using the treasury-stock method. |
Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities The Company considers all short-term highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents, consisting of money market funds and time deposits, are carried at fair value. Refer to Note 6—Cash, Cash Equivalents and Short-Term Investments for additional information regarding the fair value of cash equivalents and marketable securities. The Company classifies its marketable securities as available-for-sale investments in its current assets because they represent investments of cash available for current operations. Available-for-sale investments are carried at fair value with any unrealized gains and losses, net of taxes, included in accumulated other comprehensive income (loss) in stockholders' equity. Unrealized losses are charged against other expense when a decline in fair value is determined to be other-than-temporary. The Company determines realized gains or losses on sale of marketable securities on a specific identification method, and records such gains or losses as other expense (income). |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, are unsecured and do not bear interest. The Company performs ongoing credit evaluations of its clients and certain advertisers when the Company’s agreements with its clients contain sequential liability terms that provide that the client payments are not due to the Company until the client has received payment from its clients who are advertisers. The allowance for doubtful accounts is based on the best estimate of the amount of probable credit losses in existing accounts receivable. The allowance for doubtful accounts is determined based on historical collection experience and the review in each period of the status of the then-outstanding accounts receivable, while taking into consideration current client information, subsequent collection history and other relevant data. The Company reviews the allowance for doubtful accounts on a quarterly basis. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. The following table presents changes in the allowance for doubtful accounts (in thousands): Year Ended December 31, 2019 2018 2017 Beginning balance $ 2,973 $ 2,257 $ 2,574 Add: bad debt expense 2,702 2,115 4,289 Less: write-offs, net of recoveries (1,755 ) (1,399 ) (4,606 ) Ending balance $ 3,920 $ 2,973 $ 2,257 |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are recorded at historical cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method based upon the following estimated useful lives: Years Computer equipment 2 – 3 Purchased software 3 – 5 Furniture, fixtures and office equipment 5 Leasehold improvements * * Leasehold improvements are amortized on a straight-line basis over the term of the lease, or the useful life of the assets, whichever is shorter. Repair and maintenance costs are charged to expense as incurred, while renewals and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s operating results. |
Capitalized Software Development Costs | Capitalized Software Development Costs The Company capitalizes certain costs associated with creating and enhancing internally developed software related to the Company’s technology infrastructure. These costs include personnel and related employee benefits expenses for employees who are directly associated with and who devote time to software development projects, and external direct costs of materials and services consumed in developing or obtaining the software. Software development costs that do not qualify for capitalization, as further discussed below, are expensed as incurred and recorded in technology and development expenses in the consolidated statements of operations. Software development activities typically consist of three stages: (1) the planning phase; (2) the application and infrastructure development stage; and (3) the post implementation stage. Costs incurred in the planning and post implementation phases, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed when the preliminary project stage is completed, management implicitly or explicitly authorizes and commits to funding the project and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development phases, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software is ready for its intended purpose. Software development costs are amortized using a straight-line method over the estimated useful life of two years, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived. The Company does not transfer ownership of its internally developed software, or lease its software, to third parties. Cloud computing arrangements (“CCAs”), such as software as a service and other hosting arrangements, are evaluated for capitalized implementation costs in a similar manner as capitalized software development costs. If a CCA includes a software license, the software license element of the arrangement is accounted for in a manner consistent with the acquisition of other software licenses. If a CCA does not include a software license, the service element of the arrangement is accounted for as a service contract. The Company capitalized certain implementation costs its CCAs that are service contracts, which are included in . The Company amortizes capitalized implementation costs in a CCA over the life of the service contract. |
Business Combinations | Business Combinations The results of a business acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business generally being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations. The Company performs valuations of assets acquired and liabilities assumed and allocates the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed may require management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, and selection of comparable companies. The Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities assumed in a business combination. In October 2017, the Company paid $3.0 million in cash for certain assets of a data company accounted for as a business combination. These assets primarily consisted of acquired technology and goodwill which are included in other assets, non-current. |
Operating Leases | Operating Leases On January 1, 2019, the Company adopted ASU No. 2016-02, codified as Accounting Standards Codification (“ASC”) 842, using the modified retrospective adoption approach. The Company elected the transition option provided by ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, to not restate comparative periods, but rather to initially adopt the requirements of ASC 842 on January 1, 2019. The most significant impact of the adoption of ASC 842 resulted in the recognition of operating lease right-of-use assets (“operating lease assets’) of approximately $41 million, net of deferred rent and direct costs, and operating lease liabilities of approximately $47 million on its consolidated balance sheet. The impact on the Company’s consolidated statements of income and cash flows was not material. ASC 842, provides various optional transition practical expedients. Upon transition to ASC 842, the Company elected the use of the package of practical expedients to not reassess: whether a contract is or contains a lease, lease classification and indirect costs. The Company did not elect the hindsight practical expedient in transition. The Company has elected to not separate lease and non-lease components. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right. The Company determines if an arrangement is, or contains, a lease at inception. Operating leases are included in operating lease assets, operating lease liabilities and operating lease liabilities, non-current on our consolidated balance sheets Operating lease assets and liabilities Refer to Note 8—Leases for additional information. |
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 approximates fair value based on borrowing rates currently available to the Company for financing with similar terms and were determined to be Level 2. Certain long-lived assets including 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 material impairments have been recorded on those assets. |
Concentration of Risk | Concentration of Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, marketable securities and accounts receivable. The Company maintains its cash and cash equivalents with financial institutions and its cash levels exceed the Federal Deposit Insurance Corporation (FDIC) federally insured limits. Marketable securities and short-term investments consist of investments in U.S. government securities, U.S. government agency securities, and high credit quality corporate debt securities. For 2019, two clients accounted for 13% and 10%, respectively, of Gross Billings. For 2018, two clients accounted for 20% and 10%, respectively, of Gross Billings. For 2017, three clients accounted for 22%, 11% and 10%, respectively, of Gross Billings. As of December 31, 2019, three clients accounted for 18%, 16% and 16%, respectively, of consolidated accounts receivable. As of December 31, 2018, two clients accounted for 24% and 14%, respectively, of consolidated accounts receivable. As of December 31, 2019 and 2018, no suppliers accounted for more than 10% of consolidated accounts payable. |
Foreign Currency Transactions and Translation | Foreign Currency Transactions and Translation The Company has entities operating in various countries. Each of these entities’ functional currency is the U.S. Dollar. Transactions in foreign currencies are translated into U.S. Dollars at the rates of exchange in effect at the date of the transaction. Net transaction losses were approximately $0.7 million, $1.9 million, and $4.0 million for the years ended December 31, 2019, 2018 and 2017, respectively, and are included in foreign currency exchange loss, net in the accompanying consolidated statements of operations. The Company enters into forward contracts to hedge foreign currency exposures related primarily to the Company’s foreign currency denominated accounts receivable. The Company does not designate the foreign exchange forward contracts as hedges for accounting purposes and changes in the fair value of the foreign exchange forward contracts are recorded in foreign currency exchange loss, net in the accompanying consolidated statements of operations. As of December 31, 2019 and 2018, the Company had open forward contracts with aggregate notional amounts of $92.9 million and $78.8 million, respectively. The fair value of the open forward contracts was not material. The Company’s forward contracts generally have terms of 30-60 days. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Codification Improvements to Topic 326, Financial Instruments - Credit Losses, in April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . These ASUs provide supplemental guidance and clarification to ASU 2016-13 and must be adopted concurrently with the adoption of ASU 2016-13, cumulatively referred to as “Topic 326.” Topic 326 is In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement-Disclosure Framework (Topic 820). In December 2019, the FASB issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for us in the first quarter of 2021 on a prospective basis, and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on our consolidated financial statements. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Changes in Allowance for Doubtful Accounts | The following table presents changes in the allowance for doubtful accounts (in thousands): Year Ended December 31, 2019 2018 2017 Beginning balance $ 2,973 $ 2,257 $ 2,574 Add: bad debt expense 2,702 2,115 4,289 Less: write-offs, net of recoveries (1,755 ) (1,399 ) (4,606 ) Ending balance $ 3,920 $ 2,973 $ 2,257 |
Schedule of Useful lives of PPE | Depreciation is computed using the straight-line method based upon the following estimated useful lives: Years Computer equipment 2 – 3 Purchased software 3 – 5 Furniture, fixtures and office equipment 5 Leasehold improvements * * Leasehold improvements are amortized on a straight-line basis over the term of the lease, or the useful life of the assets, whichever is shorter. |
Net Income Per Share Attribut_2
Net Income Per Share Attributable to Common Stockholders (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted EPS | The computation of basic and diluted EPS is as follows (in thousands, except per share amounts): Year Ended December 31, 2019 2018 2017 Numerator: Net income $ 108,318 $ 88,140 $ 50,798 Denominator: Weighted-average shares outstanding—basic 44,533 42,442 40,262 Effect of dilutive securities: Options to purchase common stock 2,794 2,845 3,415 ESPP shares 131 251 268 Restricted stock 348 255 111 Weighted-average shares outstanding—diluted 47,806 45,793 44,056 Basic EPS $ 2.43 $ 2.08 $ 1.26 Diluted EPS $ 2.27 $ 1.92 $ 1.15 Anti-dilutive equity awards under stock-based award plans excluded from the determination of diluted EPS 691 472 1,246 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Schedule of Major Classes of Property and Equipment | Major classes of property and equipment were as follows (in thousands): As of December 31, 2019 2018 Computer equipment $ 13,594 $ 11,806 Purchased software 9,898 9,777 Furniture and fixtures 11,304 8,175 Construction in progress (1) 20,034 252 Leasehold improvements 36,523 18,693 91,353 48,703 Less: Accumulated depreciation (27,341 ) (15,657 ) $ 64,012 $ 33,046 (1) I |
Capitalized Software Developm_2
Capitalized Software Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Capitalized Software Development Costs | Capitalized software development costs, included in other assets, non-current, were as follows (in thousands): As of December 31, 2019 2018 Capitalized software development costs, gross $ 15,203 $ 11,487 Less: Accumulated amortization (6,121 ) (3,386 ) Capitalized software development costs, net $ 9,082 $ 8,101 |
Cash, Cash Equivalents and Sh_2
Cash, Cash Equivalents and Short-Term Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Cash Cash Equivalents And Short Term Investments [Abstract] | |
Schedule of Cash, Cash Equivalents and Short-term Investments in Marketable Securities | Cash, cash equivalents and short-term investments in marketable securities were as follows (in thousands): As of December 31, 2019 Cash and Cash Short-Term Equivalents Investments Total Cash $ 32,123 — $ 32,123 Level 1: Money market funds 45,588 — 45,588 Time deposits 35,000 35,000 Level 2: — Commercial paper 15,666 24,975 40,641 Corporate debt securities — 78,998 78,998 U.S. government and agency securities 2,499 20,139 22,638 Total $ 130,876 $ 124,112 $ 254,988 As of December 31, 2018 Cash and Cash Equivalents Cash $ 35,087 Level 1: Money market funds 14,145 Time deposits 158,000 Total $ 207,232 |
Schedule of Contractual Maturities of Short-Term Investments | The contractual maturities of the Company’s short-term investments are as follows (in thousands): December 31, 2019 Due in one year $ 108,257 Due in one to two years 15,855 Total $ 124,112 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The components of lease expense for the years ended December 31, 2019 were as follows (in thousands): Amount Operating lease cost $ 28,181 Short-term lease cost 1,582 Variable lease cost 2,469 Sublease income (1,266 ) Total lease cost $ 30,966 |
Summary of Supplemental Information Related to Leases | Supplemental information related to leases as of December 31, 2019 was as follows: Weighted average remaining lease term 8.7 years Weighted average discount rate 4.5% |
Summary of Maturities of Lease and Non-cancellable Minimum Lease Commitments | Maturities of lease commitments as of December 31, 2019 were as follows (in thousands): Year Amount 2020 $ 14,770 2021 45,522 2022 42,056 2023 38,310 2024 32,310 Thereafter 152,361 Total undiscounted lease commitments 325,329 Less: commitments for leases not yet commenced (89,381 ) Less: interest (46,498 ) Present value of lease liabilities 189,450 Less: operating lease liabilities, current (14,577 ) Operating lease liabilities, non-current $ 174,873 As of December 31, 2018, the Company’s non-cancelable minimum lease commitments were as follows (in thousands): Year Amount (1) 2019 $ 13,419 2020 18,746 2021 29,054 2022 23,786 2023 20,902 Thereafter 119,109 Total $ 225,016 (1) Includes non-cancelable minimum lease payments of $183.5 million for leases executed in 2018 that the Company planned to occupy in 2019. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense by Operating Expense Category | Stock-Based Compensation Expense Stock-based compensation expense recorded in the consolidated statements of operations was as follows (in thousands): Year Ended December 31, 2019 2018 2017 Platform operations $ 5,350 $ 4,463 $ 2,674 Sales and marketing 20,769 11,306 6,261 Technology and development 26,553 13,855 6,661 General and administrative 28,086 12,586 5,721 Total $ 80,758 $ 42,210 $ 21,317 |
Summary of Stock Option Activity | The following summarizes stock option activity: Shares Under Option (in thousands) Weighted- Average Exercise Price Weighted- Average Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2018 4,630 $ 37.03 Granted 869 182.23 Exercised (1,264 ) 23.59 Cancelled (171 ) 73.23 Outstanding as of December 31, 2019 4,064 $ 70.74 7.5 $ 769,018 Exercisable as of December 31, 2019 1,902 $ 34.55 6.5 $ 428,501 |
Schedule of Weighted-Average Assumptions Used to Value Options Granted to Employees | The fair value of options on the date of grant was estimated based on the Black-Scholes option pricing model. The weighted average assumptions used to value options granted to employees for the periods presented were as follows: Year Ended December 31, 2019 2018 2017 Expected term (years) 6.0 6.0 6.0 Expected volatility 53.2 % 48.2 % 52.6 % Risk-free interest rate 2.26 % 2.85 % 2.03 % Estimated dividend yield — % — % — % |
Summary of Nonvested Restricted Stock Activity | The following summarizes restricted stock activity: Shares (in thousands) Weighted- Average Grant Date Fair Value Per Share Unvested as of December 31, 2018 518 $ 65.14 Granted 188 201.21 Vested (202 ) 67.47 Forfeited (47 ) 60.89 Unvested as of December 31, 2019 457 $ 120.65 |
Schedule of Weighted-Average Assumptions Used to Estimate the Fair Value of ESPP Shares | The fair value of ESPP shares was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions: Year ended December 31, 2019 2018 2017 Expected term (years) 0.7 0.8 0.9 Expected volatility 53.2 % 46.2 % 45.9 % Risk-free interest rate 2.08 % 2.32 % 1.22 % Estimated dividend yield — % — % — % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Domestic and Foreign Components of Income Before Income Taxes | The following are the domestic and foreign components of the Company’s income before income taxes (in thousands): Year Ended December 31, 2019 2018 2017 Domestic $ 162,252 $ 115,706 $ 66,148 Foreign (46,032 ) (9,969 ) (2,523 ) Income before income taxes $ 116,220 $ 105,737 $ 63,625 |
Components of Provision for Income Taxes | The following are the components of the provision for income taxes (in thousands): Year Ended December 31, 2019 2018 2017 Current: Federal $ 9,180 $ 11,683 $ 9,944 State and local 7,800 9,295 3,906 Foreign 1,412 1,720 558 Total current provision 18,392 22,698 14,408 Deferred: Federal (6,316 ) (918 ) (172 ) State and local (5,339 ) (2,615 ) (1,382 ) Foreign 1,165 (1,568 ) (27 ) Total deferred provision (10,490 ) (5,101 ) (1,581 ) Total provision for income taxes $ 7,902 $ 17,597 $ 12,827 |
Reconciliation of Statutory Tax Rate to Effective Tax Rate | A reconciliation of the statutory tax rate to the effective tax rate for the periods presented is as follows: Year Ended December 31, 2019 2018 2017 U.S. federal statutory income tax rate 21.0 % 21.0 % 35.0 % State and local income taxes, net of federal benefit 1.7 5.0 2.6 Foreign income at other than U.S. rates (1) 10.5 2.1 2.2 Stock-based compensation (20.5 ) (7.6 ) (19.0 ) Meals and entertainment 0.7 0.5 0.4 Nondeductible compensation (1.3 ) — — Research and development credit (5.0 ) (3.9 ) (2.8 ) Federal deferred tax asset revaluation — — 0.9 Other permanent items (0.3 ) (0.4 ) 0.9 Effective income tax rate 6.8 % 16.7 % 20.2 % (1) For the |
Tax Effects of Temporary Differences that Give Rise to a Significant Portion of Deferred Tax Assets and Deferred Tax Liabilities | Set forth below are the tax effects of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities (in thousands): As of December 31, 2019 2018 Deferred tax assets (liabilities): Reserves and allowances $ 3,275 $ 2,465 Accrued expenses 5,452 4,193 Net operating losses 19,225 854 Research and development tax credit 2,739 1,367 Stock-based compensation 10,641 4,726 Deferred rent (40 ) 1,425 Prepaid expenses (685 ) (559 ) Property and equipment (2,606 ) (4,228 ) Intangibles (1) 179,096 87 Capitalized software development costs (2,056 ) (1,874 ) Operating lease assets (37,394 ) — Operating lease liabilities 40,366 — Other 151 4 Valuation allowance (199,214 ) — Total deferred tax assets, net $ 18,950 $ 8,460 (1) As of December 31, 2019, includes intangibles associated with our international restructuring, net of amortization, offset by a reserve for uncertain tax position. See discussion below. |
Schedule of Changes in Gross Unrecognized Tax Benefits | The following table presents changes in gross unrecognized tax benefits (in thousands): Year Ended December 31, 2019 2018 2017 Beginning balance $ 4,330 $ 3,101 $ 1,007 Increases related to prior year tax positions — — 123 Decreases related to prior year tax positions (20 ) (270 ) — Increases related to current year tax positions (1) 49,100 1,499 1,971 Settlements (197 ) — — Ending balance $ 53,213 $ 4,330 $ 3,101 (1) For the |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segments Geographical Areas [Abstract] | |
Gross Billings, Based on Billing Address of Clients or Client Affiliates | Gross Billings, based on the billing address of the clients or client affiliates, were as follows (in thousands): Year Ended December 31, 2019 2018 2017 US $ 2,639,497 $ 1,937,074 $ 1,270,116 International 456,190 347,939 221,626 Total $ 3,095,687 $ 2,285,013 $ 1,491,742 |
Property and Equipment, Net and Operating Lease Assets, Presented by Principal Geographic Area | Property and equipment, net and operating lease assets presented by principal geographic area, were as follows (in thousands): December 31, 2019 December 31, 2018 (1) US $ 157,245 $ 25,887 International 80,216 7,159 Total $ 237,461 $ 33,046 (1) As a result of the Company’s adoption of ASC 842 on January 1, 2019, the December 31, 2018 balance excludes operating lease assets. Refer to Note 2 — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Purchase Obligations | Year Amount 2020 $ 55,112 2021 32,298 2022 31,539 2023 30,000 2024 38,000 $ 186,949 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Standards Update 2014-09 | |
Disaggregation Of Revenue [Line Items] | |
Revenue, performance obligation, description of payment terms | The Company invoices its clients on a monthly basis for the purchases occurring during the month. Invoice payment terms, negotiated on a client-by-client basis, are typically between 30 to 90 days. However, for certain agency clients with sequential liability terms, payments are not due to the Company until such agency client has received payment from its clients who are advertisers. |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Stock-Based Compensation (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Requisite service period | 4 years |
Dividend yield | 0.00% |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for doubtful accounts receivable [Rollforward] | |||
Beginning balance | $ 2,973 | $ 2,257 | $ 2,574 |
Add: bad debt expense | 2,702 | 2,115 | 4,289 |
Less: write-offs, net of recoveries | (1,755) | (1,399) | (4,606) |
Ending balance | $ 3,920 | $ 2,973 | $ 2,257 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Property and Equipment, Net (Detail) | 12 Months Ended | |
Dec. 31, 2019 | ||
Computer Equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 2 years | |
Computer Equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 3 years | |
Purchased Software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 3 years | |
Purchased Software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 5 years | |
Furniture, fixtures and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 5 years | |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | [1] | |
[1] | Leasehold improvements are amortized on a straight-line basis over the term of the lease, or the useful life of the assets, whichever is shorter. |
Basis of Presentation and Sum_8
Basis of Presentation and Summary of Significant Accounting Policies - Capitalized Software Development Costs (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Basis of Presentation and Summary of Significant Accounting Policies | |||
Software development cost, amortization period | 2 years | ||
Capitalized Software Development | |||
Basis of Presentation and Summary of Significant Accounting Policies | |||
Service contracts included in other assets , noncurrent | $ 9,082 | $ 8,101 | |
Amortization expenses | 5,500 | 3,200 | $ 1,900 |
ASU 2018-15 | Capitalized Software Development | |||
Basis of Presentation and Summary of Significant Accounting Policies | |||
Service contracts included in other assets , noncurrent | 2,900 | 900 | |
Amortization expenses | $ 600 | $ 100 |
Basis of Presentation and Sum_9
Basis of Presentation and Summary of Significant Accounting Policies - Business Combinations (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Oct. 31, 2017 | Dec. 31, 2017 | |
Basis of Presentation and Summary of Significant Accounting Policies | ||
Cash paid for certain assets acquisition | $ 3,000 | $ 3,000 |
Basis of Presentation and Su_10
Basis of Presentation and Summary of Significant Accounting Policies - Operating Leases (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Jan. 01, 2019 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Operating lease, right-of-use assets | $ 173,449 | |
Operating lease, liabilities | $ 189,450 | |
Maximum | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Short-term leases term excluded from calculation of operating lease assets and operating lease liabilities | 12 months | |
ASU 2016-02 | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Operating lease, right-of-use assets | $ 41,000 | |
Operating lease, liabilities | $ 47,000 |
Basis of Presentation and Su_11
Basis of Presentation and Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Detail) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Impairments of long-lived assets | $ 0 |
Basis of Presentation and Su_12
Basis of Presentation and Summary of Significant Accounting Policies - Concentration of Risk (Detail) | 12 Months Ended | ||
Dec. 31, 2019ClientSupplier | Dec. 31, 2018ClientSupplier | Dec. 31, 2017Client | |
Gross Billings | |||
Concentration Risk [Line Items] | |||
Number of client | 2 | 2 | 3 |
Gross Billings | Customer One | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 13.00% | 20.00% | 22.00% |
Gross Billings | Customer Two | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | 10.00% | 11.00% |
Gross Billings | Customer Three | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Consolidated Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Number of client | 3 | 2 | |
Consolidated Accounts Receivable | Customer One | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 18.00% | 24.00% | |
Consolidated Accounts Receivable | Customer Two | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 16.00% | 14.00% | |
Consolidated Accounts Receivable | Customer Three | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 16.00% | ||
Trade Accounts Payables | Supplier Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of supplier | Supplier | 0 | 0 | |
Trade Accounts Payables | Supplier Concentration Risk | Maximum | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | 10.00% |
Basis of Presentation and Su_13
Basis of Presentation and Summary of Significant Accounting Policies - Foreign Currency Transactions and Translation (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Foreign Currency Translation [Line Items] | |||
Foreign currency exchange loss, net | $ (695,000) | $ (1,919,000) | $ (4,033,000) |
Minimum | |||
Foreign Currency Translation [Line Items] | |||
Forward contracts terms | 30 days | ||
Maximum | |||
Foreign Currency Translation [Line Items] | |||
Forward contracts terms | 60 days | ||
Forward Contracts | |||
Foreign Currency Translation [Line Items] | |||
Notional amounts of pen forward contracts | $ 92,900,000 | $ 78,800,000 |
Net Income Per Share Attribut_3
Net Income Per Share Attributable to Common Stockholders - Computation of Basic and Diluted EPS (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)Class$ / sharesshares | Dec. 31, 2018USD ($)Class$ / sharesshares | Dec. 31, 2017USD ($)Class$ / sharesshares | |
Earnings Per Share | |||
Number of classes of common stock | Class | 2 | 2 | 2 |
Numerator: | |||
Net income | $ | $ 108,318 | $ 88,140 | $ 50,798 |
Denominator: | |||
Weighted-average shares outstanding—basic | 44,533 | 42,442 | 40,262 |
Effect of dilutive securities: | |||
Options to purchase common stock | 2,794 | 2,845 | 3,415 |
ESPP shares | 131 | 251 | 268 |
Restricted stock | 348 | 255 | 111 |
Weighted-average shares outstanding—diluted | 47,806 | 45,793 | 44,056 |
Basic EPS | $ / shares | $ 2.43 | $ 2.08 | $ 1.26 |
Diluted EPS | $ / shares | $ 2.27 | $ 1.92 | $ 1.15 |
Anti-dilutive equity awards under stock-based award plans excluded from the determination of diluted EPS | 691 | 472 | 1,246 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Major Classes of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | $ 91,353 | $ 48,703 | |
Less: Accumulated depreciation | (27,341) | (15,657) | |
Property and equipment, Net | 64,012 | 33,046 | |
Computer Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | 13,594 | 11,806 | |
Purchased Software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | 9,898 | 9,777 | |
Furniture and Fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | 11,304 | 8,175 | |
Construction in Progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | [1] | 20,034 | 252 |
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | $ 36,523 | $ 18,693 | |
[1] | I |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 14.9 | $ 8.1 | $ 5.3 |
Capitalized Software Developm_3
Capitalized Software Development Costs (Detail) - Capitalized Software Development - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Capitalized Computer Software Net [Line Items] | ||
Capitalized software development costs, gross | $ 15,203 | $ 11,487 |
Less: Accumulated amortization | (6,121) | (3,386) |
Capitalized software development costs, net | $ 9,082 | $ 8,101 |
Capitalized Software Developm_4
Capitalized Software Development Costs - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Capitalized Computer Software Net [Line Items] | |||
Software not yet placed into service, included in other assets, non-current | $ 23,129 | $ 19,843 | |
Capitalized Software Development | |||
Capitalized Computer Software Net [Line Items] | |||
Software development costs | 6,500 | 6,900 | $ 3,500 |
Amortization expenses | 5,500 | $ 3,200 | $ 1,900 |
Estimated amortization in 2019 | 5,100 | ||
Estimated amortization in 2020 | 1,700 | ||
Software not yet placed into service, included in other assets, non-current | $ 2,300 |
Cash, Cash Equivalents and Sh_3
Cash, Cash Equivalents and Short -Term Investments - Schedule of Cash, Cash Equivalents and Short-term Investments in Marketable Securities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule Of Available For Sale Securities [Line Items] | ||||
Cash and cash equivalents | $ 130,876 | $ 207,232 | $ 155,950 | $ 133,400 |
Short-Term Investments | 124,112 | |||
Available For Sale | ||||
Schedule Of Available For Sale Securities [Line Items] | ||||
Cash and cash equivalents | 130,876 | 207,232 | ||
Short-Term Investments | 124,112 | |||
Total | 254,988 | |||
Available For Sale | Cash | ||||
Schedule Of Available For Sale Securities [Line Items] | ||||
Cash and cash equivalents | 32,123 | 35,087 | ||
Total | 32,123 | |||
Available For Sale | Level 1 | Money Market Funds | ||||
Schedule Of Available For Sale Securities [Line Items] | ||||
Cash and cash equivalents | 45,588 | 14,145 | ||
Total | 45,588 | |||
Available For Sale | Level 1 | Time Deposits | ||||
Schedule Of Available For Sale Securities [Line Items] | ||||
Cash and cash equivalents | 35,000 | $ 158,000 | ||
Total | 35,000 | |||
Available For Sale | Level 2 | Commercial Paper | ||||
Schedule Of Available For Sale Securities [Line Items] | ||||
Cash and cash equivalents | 15,666 | |||
Short-Term Investments | 24,975 | |||
Total | 40,641 | |||
Available For Sale | Level 2 | Corporate Debt Securities | ||||
Schedule Of Available For Sale Securities [Line Items] | ||||
Short-Term Investments | 78,998 | |||
Total | 78,998 | |||
Available For Sale | Level 2 | U.S. Government and Agency Securities | ||||
Schedule Of Available For Sale Securities [Line Items] | ||||
Cash and cash equivalents | 2,499 | |||
Short-Term Investments | 20,139 | |||
Total | $ 22,638 |
Cash, Cash Equivalents and Sh_4
Cash, Cash Equivalents and Short - Schedule of Contractual Maturities of Short-Term Investments (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Available For Sale Securities Debt Maturities Fair Value [Abstract] | |
Due in one year | $ 108,257 |
Due in one to two years | 15,855 |
Total | $ 124,112 |
Debt - Additional Information (
Debt - Additional Information (Detail) - Second A&R Credit Facility - USD ($) | Oct. 26, 2018 | Dec. 31, 2019 |
Long-term debt: | ||
Credit facility, borrowing capacity | $ 150,000,000 | |
Credit Facility additional borrowing amount | $ 100,000,000 | |
Outstanding debt balance | $ 0 | |
Credit facility available amount | $ 143,300,000 | |
Credit facility, maturity | May 9, 2022 | |
Minimum | ||
Long-term debt: | ||
Credit Facility, fee for undrawn amounts | 0.225% | |
Consolidated fixed charge coverage ratio | 300.00% | |
Maximum | ||
Long-term debt: | ||
Credit Facility, fee for undrawn amounts | 0.40% | |
Consolidated fixed charge coverage ratio | 350.00% | |
Federal Funds Rate | ||
Long-term debt: | ||
Credit Facility, interest rate above base rate | 0.50% | |
LIBOR | ||
Long-term debt: | ||
Credit Facility, interest rate above base rate | 2.00% | |
LIBOR | Minimum | ||
Long-term debt: | ||
Credit Facility, interest rate above base rate | 1.25% | |
LIBOR | Maximum | ||
Long-term debt: | ||
Credit Facility, interest rate above base rate | 2.25% | |
Base Rate | Minimum | ||
Long-term debt: | ||
Credit Facility, interest rate above base rate | 0.25% | |
Base Rate | Maximum | ||
Long-term debt: | ||
Credit Facility, interest rate above base rate | 1.25% | |
Swingline Borrowings | ||
Long-term debt: | ||
Credit facility, borrowing capacity | $ 20,000,000 | |
Letter of Credit | ||
Long-term debt: | ||
Credit facility, borrowing capacity | $ 15,000,000 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | |||
Lease term description | leases have remaining lease terms of up to 11 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year with proper notification. | ||
Remaining lease term | 11 years | ||
Lessee, operating lease, existence of option to extend | true | ||
Options to extend the leases | up to 5 years | ||
Lessee, operating lease, existence of option to terminate | true | ||
Options to terminate the leases | within 1 year | ||
Rent expense for non-cancelable operating leases | $ 10.9 | $ 8.2 |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lease Cost [Abstract] | |
Operating lease cost | $ 28,181 |
Short-term lease cost | 1,582 |
Variable lease cost | 2,469 |
Sublease income | (1,266) |
Total lease cost | $ 30,966 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Information Related to Leases (Detail) | Dec. 31, 2019 |
Leases [Abstract] | |
Weighted average remaining lease term | 8 years 8 months 12 days |
Weighted average discount rate | 4.50% |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease and Non-cancellable Minimum Lease Commitments (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | [1] |
Operating Lease Liabilities Payments Due [Abstract] | |||
2020 | $ 14,770 | $ 13,419 | |
2021 | 45,522 | 18,746 | |
2022 | 42,056 | 29,054 | |
2023 | 38,310 | 23,786 | |
2024 | 32,310 | 20,902 | |
Thereafter | 152,361 | 119,109 | |
Total undiscounted lease commitments | 325,329 | $ 225,016 | |
Less: commitments for leases not yet commenced | (89,381) | ||
Less: interest | (46,498) | ||
Present value of lease liabilities | 189,450 | ||
Less: operating lease liabilities, current | (14,577) | ||
Operating lease liabilities, non-current | $ 174,873 | ||
[1] | Includes non-cancelable minimum lease payments of $183.5 million for leases executed in 2018 that the Company planned to occupy in 2019. |
Leases - Summary of Maturitie_2
Leases - Summary of Maturities of Lease and Non-cancellable Minimum Lease Commitments (Parenthetical) (Detail) $ in Millions | Dec. 31, 2018USD ($) |
Operating Lease Liabilities Payments Due [Abstract] | |
Non-cancelable minimum lease payments for leases | $ 183.5 |
Capitalization - Common and Pre
Capitalization - Common and Preferred Stock (Detail) | Dec. 31, 2019Vote$ / sharesshares | Dec. 31, 2018$ / sharesshares |
Class of Stock [Line Items] | ||
Common stock, authorized shares | 1,095,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.000001 | $ 0.000001 |
Preferred stock, authorized shares | 100,000,000 | 100,000,000 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.000001 | $ 0.000001 |
Preferred stock, shares outstanding | 0 | 0 |
Class A common stock | ||
Class of Stock [Line Items] | ||
Common stock, authorized shares | 1,000,000,000 | 1,000,000,000 |
Number of votes per share of common stock | Vote | 1 | |
Class B common stock | ||
Class of Stock [Line Items] | ||
Common stock, authorized shares | 95,000,000 | 95,000,000 |
Number of votes per share of common stock | Vote | 10 | |
Ratio for conversion into Class A common stock | 1 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense by Operating Expense Category (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-based compensation expense, by operating expense category | |||
Stock-based compensation expense | $ 80,758 | $ 42,210 | $ 21,317 |
Platform operations | |||
Stock-based compensation expense, by operating expense category | |||
Stock-based compensation expense | 5,350 | 4,463 | 2,674 |
Sales and marketing | |||
Stock-based compensation expense, by operating expense category | |||
Stock-based compensation expense | 20,769 | 11,306 | 6,261 |
Technology and development | |||
Stock-based compensation expense, by operating expense category | |||
Stock-based compensation expense | 26,553 | 13,855 | 6,661 |
General and administrative | |||
Stock-based compensation expense, by operating expense category | |||
Stock-based compensation expense | $ 28,086 | $ 12,586 | $ 5,721 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Award Plans - Additional Information (Detail) - 2016 Incentive Award Plan - shares shares in Millions | Jan. 01, 2020 | Dec. 31, 2019 |
Stock-Based Compensation | ||
Shares remained available for grant | 4.5 | |
Maximum annual increase in shares available for issuance, percentage of outstanding shares | 4.00% | |
Stock incentive plans, vesting period | 4 years | |
Stock incentive plans, expiration period | 10 years | |
Restricted Stock | ||
Stock-Based Compensation | ||
Stock incentive plans, vesting period | 4 years | |
Subsequent Event | ||
Stock-Based Compensation | ||
Number of additional shares authorized for grant | 1.8 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options (Detail) - Stock Options $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Shares Under Option | |
Outstanding at the beginning of the period (in shares) | shares | 4,630 |
Granted (in shares) | shares | 869 |
Exercised (in shares) | shares | (1,264) |
Cancelled (in shares) | shares | (171) |
Outstanding at the end of the period (in shares) | shares | 4,064 |
Exercisable as of December 31, 2019 | shares | 1,902 |
Weighted-Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 37.03 |
Granted (in dollars per share) | $ / shares | 182.23 |
Exercised (in dollars per share) | $ / shares | 23.59 |
Cancelled (in dollars per share) | $ / shares | 73.23 |
Outstanding at the end of the period (in dollars per share) | $ / shares | 70.74 |
Exercisable as of December 31, 2019 | $ / shares | $ 34.55 |
Stock Options, additional disclosures | |
Weighted-Average Contractual Life, outstanding | 7 years 6 months |
Weighted-Average Contractual Life, exercisable | 6 years 6 months |
Aggregate Intrinsic Value, Outstanding | $ | $ 769,018 |
Aggregate Intrinsic Value, Exercisable | $ | $ 428,501 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Weighted-Average Assumptions Used to Value Options Granted to Employees (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted average assumptions used to value options granted to employees | |||
Estimated dividend yield | 0.00% | ||
Stock Options | |||
Weighted average assumptions used to value options granted to employees | |||
Expected term (years) | 6 years | 6 years | 6 years |
Volatility (as a percent) | 53.20% | 48.20% | 52.60% |
Risk-free interest rate (as a percent) | 2.26% | 2.85% | 2.03% |
Estimated dividend yield | 0.00% | 0.00% | 0.00% |
Stock-Based Compensation - St_3
Stock-Based Compensation - Stock Options - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Options, additional disclosures | |||
Stock-based compensation expense | $ 80,758 | $ 42,210 | $ 21,317 |
Stock Options | |||
Weighted average assumptions used to value options granted to employees | |||
Weighted average grant date fair value per share | $ 94.91 | $ 35.08 | $ 22.48 |
Total intrinsic value of options exercised | $ 222,000 | $ 119,000 | $ 84,800 |
Stock Options, additional disclosures | |||
Stock-based compensation expense | 37,200 | $ 17,700 | $ 7,900 |
Unrecognized employee stock-based compensation | $ 107,500 | ||
Unrecognized employee stock-based compensation, recognition period | 2 years 4 months 24 days |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Nonvested Restricted Stock Activity (Detail) shares in Thousands | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Unvested, Shares, beginning balance | shares | 518 |
Granted, Shares | shares | 188 |
Vested, Shares | shares | (202) |
Forfeited, Shares | shares | (47) |
Unvested, Shares, ending balance | shares | 457 |
Unvested, Weighted-Average Grant Date Fair Value Per Share, beginning balance | $ / shares | $ 65.14 |
Granted, Weighted-Average Grant Date Fair Value Per Share | $ / shares | 201.21 |
Vested, Weighted-Average Grant Date Fair Value Per Share | $ / shares | 67.47 |
Forfeited, Weighted-Average Grant Date Fair Value Per Share | $ / shares | 60.89 |
Unvested, Weighted-Average Grant Date Fair Value Per Share, ending balance | $ / shares | $ 120.65 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock - Additional Information (Detail) - USD ($) $ in Thousands | Nov. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Stock-Based Compensation | ||||
Stock-based compensation expense | $ 80,758 | $ 42,210 | $ 21,317 | |
Performance-based restricted stock award granted | 188,000 | |||
Restricted Stock | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | $ 17,900 | $ 7,400 | $ 2,700 | |
Unrecognized employee stock-based compensation | $ 47,900 | |||
Weighted-average recognition period employee stock based compensation | 2 years 6 months | |||
PSUs | ||||
Stock-Based Compensation | ||||
Performance-based restricted stock award granted | 24,000 |
Stock-Based Compensation - ESPP
Stock-Based Compensation - ESPP - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Stock-Based Compensation | ||||||
Stock-based compensation expense | $ 80,758 | $ 42,210 | $ 21,317 | |||
ESPP | ||||||
Stock-Based Compensation | ||||||
Shares remained available for grant | 300,000 | |||||
Maximum annual increase in shares available for grant (in shares) | 800,000 | |||||
Maximum employee payroll deduction (as a percent) | 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 | |||||
Stock-based compensation expense | $ 25,700 | $ 17,100 | $ 10,700 | |||
Unrecognized employee stock-based compensation | $ 10,500 | |||||
Unrecognized employee stock-based compensation, recognition period | 6 months | |||||
ESPP | Common Stock | ||||||
Stock-Based Compensation | ||||||
Maximum annual increase in shares available for issuance, percentage of outstanding shares | 1.00% | |||||
ESPP | Class A common stock | ||||||
Stock-Based Compensation | ||||||
Stock available for issuance (in shares) | 800,000 | |||||
ESPP | Subsequent Event | ||||||
Stock-Based Compensation | ||||||
Number of additional shares authorized for grant | 500,000 |
Stock-Based Compensation - ES_2
Stock-Based Compensation - ESPP (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted-average assumptions used to estimate the fair value of ESPP shares | |||
Estimated dividend yield | 0.00% | ||
ESPP | |||
Weighted-average assumptions used to estimate the fair value of ESPP shares | |||
Expected term (years) | 8 months 12 days | 9 months 18 days | 10 months 24 days |
Volatility (as a percent) | 53.20% | 46.20% | 45.90% |
Risk-free interest rate (as a percent) | 2.08% | 2.32% | 1.22% |
Estimated dividend yield | 0.00% | 0.00% | 0.00% |
Income Taxes - Domestic and For
Income Taxes - Domestic and Foreign Components of Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income before income taxes | $ 116,220 | $ 105,737 | $ 63,625 |
UNITED STATES | |||
Income before income taxes | 162,252 | 115,706 | 66,148 |
Foreign | |||
Income before income taxes | $ (46,032) | $ (9,969) | $ (2,523) |
Income Taxes - Components of Pr
Income Taxes - Components of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||
Federal | $ 9,180 | $ 11,683 | $ 9,944 |
State and local | 7,800 | 9,295 | 3,906 |
Foreign | 1,412 | 1,720 | 558 |
Total current provision | 18,392 | 22,698 | 14,408 |
Deferred: | |||
Federal | (6,316) | (918) | (172) |
State and local | (5,339) | (2,615) | (1,382) |
Foreign | 1,165 | (1,568) | (27) |
Total deferred provision | (10,490) | (5,101) | (1,581) |
Total provision for income taxes | $ 7,902 | $ 17,597 | $ 12,827 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Detail) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Income Tax Disclosure [Abstract] | ||||
U.S. federal statutory income tax rate | 21.00% | 21.00% | 35.00% | |
State and local income taxes, net of federal benefit | 1.70% | 5.00% | 2.60% | |
Foreign income at other than U.S. rates | [1] | 10.50% | 2.10% | 2.20% |
Stock-based compensation | (20.50%) | (7.60%) | (19.00%) | |
Meals and entertainment | 0.70% | 0.50% | 0.40% | |
Nondeductible compensation | (1.30%) | |||
Research and development credit | (5.00%) | (3.90%) | (2.80%) | |
Federal deferred tax asset revaluation | 0.90% | |||
Other permanent items | (0.30%) | (0.40%) | 0.90% | |
Effective income tax rate | 6.80% | 16.70% | 20.20% | |
[1] | For the |
Income Taxes - Tax Effects of T
Income Taxes - Tax Effects of Temporary Differences that Give Rise to Significant Portion of Deferred Tax Assets and Deferred Tax Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred tax assets (liabilities): | |||
Reserves and allowances | $ 3,275 | $ 2,465 | |
Accrued expenses | 5,452 | 4,193 | |
Net operating losses | 19,225 | 854 | |
Research and development tax credit | 2,739 | 1,367 | |
Stock-based compensation | 10,641 | 4,726 | |
Deferred rent | (40) | 1,425 | |
Prepaid expenses | (685) | (559) | |
Property and equipment | (2,606) | (4,228) | |
Intangibles | [1] | 179,096 | 87 |
Capitalized software development costs | (2,056) | (1,874) | |
Operating lease assets | (37,394) | ||
Operating lease liabilities | 40,366 | ||
Other | 151 | 4 | |
Valuation allowance | (199,214) | ||
Total deferred tax assets, net | $ 18,950 | $ 8,460 | |
[1] | As of December 31, 2019, includes intangibles associated with our international restructuring, net of amortization, offset by a reserve for uncertain tax position. See discussion below. |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred tax asset associated with restructuring | $ 262,400 | |||
Reserve for uncertain tax position | 51,000 | |||
Valuation allowance | 199,214 | |||
Research and development tax credits | 2,739 | $ 1,367 | ||
Cash paid for income taxes | 19,727 | 17,287 | $ 19,163 | |
Gross unrecognized tax benefits | 53,213 | 4,330 | $ 3,101 | $ 1,007 |
Unrecognized tax benefits, reduction to deferred tax assets | 47,100 | |||
Unrecognized tax benefits that would impact effective tax rate | 6,100 | |||
Expected reduction in unrecognized tax benefits | 400 | |||
Other Liabilities, Non current | ||||
Gross unrecognized tax benefits | 53,200 | $ 4,300 | ||
UNITED KINGDOM | ||||
Valuation allowance | 199,200 | |||
Operating loss carryforwards | 129,100 | |||
Research and development tax credits | 300 | |||
UNITED STATES | ||||
Research and development tax credits | 4,700 | |||
International | ||||
Unremitted earnings of subsidiaries, foreign | 1,200 | |||
Cash paid for income taxes | $ 0 |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Income Tax Disclosure [Abstract] | ||||
Beginning balance | $ 4,330 | $ 3,101 | $ 1,007 | |
Increases related to prior year tax positions | 123 | |||
Decreases related to prior year tax positions | (20) | (270) | ||
Increases related to current year tax positions | [1] | 49,100 | 1,499 | 1,971 |
Settlements | (197) | |||
Ending balance | $ 53,213 | $ 4,330 | $ 3,101 | |
[1] | For the |
Segment and Geographical Inform
Segment and Geographical Information - Gross Billings, Based on Billing Address of Clients or Client Affiliates (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Gross Billings | $ 3,095,687 | $ 2,285,013 | $ 1,491,742 |
UNITED STATES | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Gross Billings | 2,639,497 | 1,937,074 | 1,270,116 |
International | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Gross Billings | $ 456,190 | $ 347,939 | $ 221,626 |
Segment and Geographical Info_2
Segment and Geographical Information - Property and Equipment, Net and Operating Lease Assets, Presented by Principal Geographic Area (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | [1] |
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Property and equipment, net and operating lease assets | $ 237,461 | $ 33,046 | |
UNITED STATES | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Property and equipment, net and operating lease assets | 157,245 | 25,887 | |
International | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Property and equipment, net and operating lease assets | $ 80,216 | $ 7,159 | |
[1] | As a result of the Company’s adoption of ASC 842 on January 1, 2019, the December 31, 2018 balance excludes operating lease assets. Refer to Note 2 — |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Purchase Obligations (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Purchase obligations | |
2020 | $ 55,112 |
2021 | 32,298 |
2022 | 31,539 |
2023 | 30,000 |
2024 | 38,000 |
Total | $ 186,949 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Indemnifications | ||
Commitments and Contingencies | ||
Recorded obligation | $ 0 | $ 0 |