Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 15, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Entity Registrant Name | DATTO HOLDING CORP. | |
Entity Central Index Key | 0001724570 | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | No | |
Entity Address, City or Town | Norwalk | |
Entity Address, State or Province | CT | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | MSP | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 160,959,637 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash | $ 98,614 | $ 27,597 |
Restricted cash | 1,436 | 1,469 |
Accounts receivable, net | 16,668 | 20,841 |
Inventory, net | 17,266 | 12,415 |
Prepaid expenses | 8,831 | 10,265 |
Other current assets | 9,453 | 10,120 |
Total current assets | 152,268 | 82,707 |
Property and equipment, net | 86,618 | 80,746 |
Goodwill | 1,123,000 | 1,118,856 |
Intangible assets, net | 289,954 | 306,685 |
Other assets | 63,407 | 53,298 |
Total assets | 1,715,247 | 1,642,292 |
Current liabilities | ||
Accounts payable | 8,517 | 16,049 |
Accrued expenses and other current liabilities | 35,407 | 33,909 |
Long-term debt, current portion | 5,500 | 5,500 |
Deferred revenue | 25,412 | 24,254 |
Total current liabilities | 74,836 | 79,712 |
Long-term debt | 575,739 | 546,499 |
Deferred revenue, noncurrent | 2,937 | 3,798 |
Deferred income taxes | 17,660 | 10,120 |
Other long-term liabilities | 13,158 | 9,860 |
Total liabilities | 684,330 | 649,989 |
Commitments and contingencies (Note 7) | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value; 150,000,000 shares authorized at September 30, 2020 (unaudited) and December 31, 2019; 135,915,527 and 135,655,428 shares issued and outstanding at September 30, 2020 (unaudited) and December 31, 2019, respectively (inclusive of treasury stock) | 136 | 136 |
Additional paid-in capital | 1,092,090 | 1,083,082 |
Treasury stock, at cost; 362,126 shares at September 30, 2020 (unaudited) and December 31, 2019 | (3,621) | (3,621) |
Accumulated deficit | (58,058) | (87,724) |
Accumulated other comprehensive income | 370 | 430 |
Total stockholders' equity | 1,030,917 | 992,303 |
Total liabilities and stockholders' equity | $ 1,715,247 | $ 1,642,292 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Common stock par or stated value per share | $ 0.001 | $ 0.001 |
Common stock shares authorised | 150,000,000 | 150,000,000 |
Common stock shares issued | 135,915,527 | 135,655,428 |
Common stock shares outstanding | 135,915,527 | 135,655,428 |
Treasury stock shares | 362,126 | 362,126 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues: | ||||
Revenue | $ 130,667 | $ 117,693 | $ 379,793 | $ 332,626 |
Cost of Revenue: | ||||
Depreciation and amortization | 5,526 | 4,150 | 15,746 | 11,256 |
Total cost of revenue | 35,862 | 40,439 | 107,395 | 112,193 |
Gross profit | 94,805 | 77,254 | 272,398 | 220,433 |
Operating expenses: | ||||
Sales and marketing | 24,709 | 25,084 | 83,828 | 79,172 |
Research and development | 15,257 | 14,640 | 48,000 | 43,924 |
General and administrative | 17,433 | 17,680 | 59,389 | 50,555 |
Depreciation and amortization | 6,820 | 6,782 | 20,600 | 20,506 |
Total operating expenses | 64,219 | 64,186 | 211,817 | 194,157 |
Income from operations | 30,586 | 13,068 | 60,581 | 26,276 |
Other expense: | ||||
Interest Expense | 7,065 | 9,932 | 23,590 | 34,131 |
Loss on extinguishment of debt | 19,231 | |||
Other (income) expense, net | (987) | 7 | (1,402) | 2 |
Total other expense | 6,078 | 9,939 | 22,188 | 53,364 |
Income (loss) before income taxes | 24,508 | 3,129 | 38,393 | (27,088) |
(Provision for) benefit from income taxes | (4,962) | (404) | (8,727) | 4,130 |
Net income (loss) | $ 19,546 | $ 2,725 | $ 29,666 | $ (22,958) |
Net income (loss) per share attributable to common stockholders: | ||||
Basic | $ 0.14 | $ 0.02 | $ 0.22 | $ (0.17) |
Diluted | $ 0.14 | $ 0.02 | $ 0.22 | $ (0.17) |
Weighted-average shares used in computing net income (loss) per share: | ||||
Basic | 135,553,097 | 135,195,800 | 135,496,696 | 135,195,800 |
Diluted | 138,590,770 | 135,615,949 | 137,006,921 | 135,195,800 |
Subscription [Member] | ||||
Revenues: | ||||
Revenue | $ 122,753 | $ 105,170 | $ 356,348 | $ 301,107 |
Cost of Revenue: | ||||
Cost of revenue | 18,915 | 20,815 | 60,786 | 60,472 |
Device [Member] | ||||
Revenues: | ||||
Revenue | 6,964 | 11,948 | 21,098 | 29,582 |
Cost of Revenue: | ||||
Cost of revenue | 10,089 | 14,036 | 26,464 | 36,591 |
Professional services and other [Member] | ||||
Revenues: | ||||
Revenue | 950 | 575 | 2,347 | 1,937 |
Cost of Revenue: | ||||
Cost of revenue | $ 1,332 | $ 1,438 | $ 4,399 | $ 3,874 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 19,546 | $ 2,725 | $ 29,666 | $ (22,958) |
Other comprehensive income (loss): | ||||
Currency translation adjustment | 719 | (461) | (60) | (650) |
Total comprehensive income (loss) | $ 20,265 | $ 2,264 | $ 29,606 | $ (23,608) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance at Dec. 31, 2018 | $ 1,011,810 | $ 136 | $ (3,621) | $ 1,071,914 | $ (56,536) | $ (83) |
Balance (Shares) at Dec. 31, 2018 | 135,557,926 | |||||
Stock-based compensation | 4,874 | 4,874 | ||||
Other comprehensive income (loss) | 437 | 437 | ||||
Net income (loss) | (3,449) | (3,449) | ||||
Balance at Mar. 31, 2019 | 1,013,672 | $ 136 | (3,621) | 1,076,788 | (59,985) | 354 |
Balance (Shares) at Mar. 31, 2019 | 135,557,926 | |||||
Balance at Dec. 31, 2018 | 1,011,810 | $ 136 | (3,621) | 1,071,914 | (56,536) | (83) |
Balance (Shares) at Dec. 31, 2018 | 135,557,926 | |||||
Net income (loss) | (22,958) | |||||
Balance at Sep. 30, 2019 | 996,584 | $ 136 | (3,621) | 1,080,296 | (79,494) | (733) |
Balance (Shares) at Sep. 30, 2019 | 135,557,926 | |||||
Balance at Mar. 31, 2019 | 1,013,672 | $ 136 | (3,621) | 1,076,788 | (59,985) | 354 |
Balance (Shares) at Mar. 31, 2019 | 135,557,926 | |||||
Repurchase of common stock | (1,072) | (1,072) | ||||
Stock-based compensation | 2,814 | 2,814 | ||||
Other comprehensive income (loss) | (626) | (626) | ||||
Net income (loss) | (22,234) | (22,234) | ||||
Balance at Jun. 30, 2019 | 992,554 | $ 136 | (3,621) | 1,078,530 | (82,219) | (272) |
Balance (Shares) at Jun. 30, 2019 | 135,557,926 | |||||
Stock-based compensation | 1,766 | 1,766 | ||||
Other comprehensive income (loss) | (461) | (461) | ||||
Net income (loss) | 2,725 | 2,725 | ||||
Balance at Sep. 30, 2019 | 996,584 | $ 136 | (3,621) | 1,080,296 | (79,494) | (733) |
Balance (Shares) at Sep. 30, 2019 | 135,557,926 | |||||
Balance at Dec. 31, 2019 | 992,303 | $ 136 | (3,621) | 1,083,082 | (87,724) | 430 |
Balance (Shares) at Dec. 31, 2019 | 135,655,428 | |||||
Stock-based compensation | 1,914 | 1,914 | ||||
Exercise of common stock options | 2,500 | 2,500 | ||||
Exercise of common stock options (Shares) | 255,438 | |||||
Other comprehensive income (loss) | (700) | (700) | ||||
Net income (loss) | 1,353 | 1,353 | ||||
Balance at Mar. 31, 2020 | 997,370 | $ 136 | (3,621) | 1,087,496 | (86,371) | (270) |
Balance (Shares) at Mar. 31, 2020 | 135,910,866 | |||||
Balance at Dec. 31, 2019 | 992,303 | $ 136 | (3,621) | 1,083,082 | (87,724) | 430 |
Balance (Shares) at Dec. 31, 2019 | 135,655,428 | |||||
Net income (loss) | 29,666 | |||||
Balance at Sep. 30, 2020 | 1,030,917 | $ 136 | (3,621) | 1,092,090 | (58,058) | 370 |
Balance (Shares) at Sep. 30, 2020 | 135,915,527 | |||||
Balance at Mar. 31, 2020 | 997,370 | $ 136 | (3,621) | 1,087,496 | (86,371) | (270) |
Balance (Shares) at Mar. 31, 2020 | 135,910,866 | |||||
Stock-based compensation | 1,858 | 1,858 | ||||
Other comprehensive income (loss) | (79) | (79) | ||||
Net income (loss) | 8,767 | 8,767 | ||||
Balance at Jun. 30, 2020 | 1,007,916 | $ 136 | (3,621) | 1,089,354 | (77,604) | (349) |
Balance (Shares) at Jun. 30, 2020 | 135,910,866 | |||||
Net share settlement of stock-based payment awards | (53) | (53) | ||||
Net share settlement of stock-based payment awards (shares) | 4,661 | |||||
Stock-based compensation | 2,789 | 2,789 | ||||
Other comprehensive income (loss) | 719 | 719 | ||||
Net income (loss) | 19,546 | 19,546 | ||||
Balance at Sep. 30, 2020 | $ 1,030,917 | $ 136 | $ (3,621) | $ 1,092,090 | $ (58,058) | $ 370 |
Balance (Shares) at Sep. 30, 2020 | 135,915,527 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
OPERATING ACTIVITIES | ||
Net income (loss) | $ 29,666 | $ (22,958) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization of internally developed software | 19,615 | 14,739 |
Amortization of acquired intangible assets | 16,731 | 17,023 |
Loss on extinguishment of debt | 19,231 | |
Amortization of debt issuance costs | 1,265 | 1,452 |
Reserve for inventory obsolescence | 1,508 | 183 |
Stock-based compensation | 6,561 | 9,454 |
Provision for bad debt | 4,793 | 3,422 |
Deferred income taxes | 7,556 | (6,035) |
Unrealized gain (loss) on foreign exchange | (647) | 235 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (766) | (12,202) |
Inventory | (6,337) | (2,035) |
Prepaid expenses and current other assets | 2,099 | (4,464) |
Other assets | (8,446) | (15,347) |
Accounts payable, accrued expenses and other | 109 | 4,479 |
Deferred revenue | 348 | (554) |
Net cash provided by operating activities | 74,055 | 6,623 |
INVESTING ACTIVITIES | ||
Purchase of property and equipment | (28,519) | (27,777) |
Acquisition of business, net of cash acquired | (4,371) | |
Net cash used in investing activities | (32,890) | (27,777) |
FINANCING ACTIVITIES | ||
Proceeds from debt | 32,100 | 562,250 |
Repayments of debt | (4,468) | (522,048) |
Debt issuance costs | (8,775) | |
Prepayment penalty on debt | (10,400) | |
Capitalized transaction costs | (980) | |
Proceeds from stock option exercise | 2,500 | |
Net share settlement and settlement of stock-based payment awards | (53) | (1,072) |
Net cash provided by financing activities | 29,099 | 19,955 |
Effect of exchange rate changes on cash | 720 | (396) |
Net increase (decrease) in cash | 70,984 | (1,595) |
Cash and restricted cash, beginning of year | 29,066 | 37,258 |
Cash and restricted cash, end of period | 100,050 | 35,663 |
Reconciliation of cash and restricted cash: | ||
Cash | 98,614 | 31,781 |
Restricted cash | 1,436 | 3,882 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for income taxes | 151 | 1,117 |
Cash paid for interest | 22,317 | 34,820 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Purchase of property and equipment included in accounts payable | 40 | $ 512 |
Deferred initial public offering costs in accounts payable and accrued liabilities | $ 2,620 |
Business
Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | 1. Business Description of Business Datto Holding Corp., through its operating subsidiaries, provides cloud-based software and technology solutions purpose-built for delivery through the managed service provider channel to small and medium-sized medium-sized Unless otherwise indicated or as the context otherwise requires, D a Initial Public Offering On October 23, 2020, the Company completed an initial public offering (“IPO”) of its common stock. As part of the IPO, the Company issued and sold 22,000,000 shares of its common stock at a public offering price of $27.00 per share. The Company received proceeds of approximately $558.0 million from the IPO, after deducting the underwriting discount. In addition, on November 3, 2020, the underwriters exercised their option in full to purchase 3,300,000 additional shares of common stock at a price of $27.00 per share, resulting in proceeds of approximately $83.6 million, after deducting the underwriting discount. See Note 14. Subsequent Events for further information. Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opt s The Company will remain an emerging growth company until the earliest of (i) the last day of the first fiscal year (a) following the fifth anniversary of the completion of the IPO, non-affiliates of at year non-convertible |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation Certain information and note disclosures included in complete financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial reporting. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the final prospectus for the Company’s IPO dated October 20, 2020 and filed with the SEC on October 22, 2020 pursuant to Rule 424(b)(4) under the Securities Act of 1933 (the “IPO Prospectus”). The condensed consolidated financial statements include the accounts of Datto Holding Corp. and its wholly-owned The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited financial statements as of that date, but does not include all disclosures required by U.S. GAAP. The accompanying interim condensed consolidated balance sheet as of September 30, 2020, the interim condensed consolidated statements of operations, comprehensive income (loss) The results for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results expected for the year ending December 31, 2020 or any other future period. Additionally, there are many uncertainties regarding the ongoing coronavirus (“COVID-19”) COVID-19. COVID-19 COVID-19 COVID-19 COVID-19 Segment Information Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one operating segment. As of September 30, 2020 and December 31, 2019 the Company did not have material long-lived assets located outside of the United States. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to revenue recognition (including upgrade and return rights), contract balances, contract acquisition costs, allowance for doubtful accounts, reserves for inventory obsolescence, useful lives and recoverability of property and equipment and intangible assets with definite lives, capitalized software development and implementation costs, recoverability of goodwill, income taxes, stock-based compensation and contingencies, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could materially differ from these estimates as a result of risks and uncertainties, including the uncertainty surrounding rapidly changing market and economic conditions from the impact of COVID-19. With the exception of the items noted below there have been no material changes to the Company’s significant accounting policies. Deferred Offering Costs Deferred offering costs, consisting of legal, accounting and other fees and costs incurred in connection with the sale of common stock in the Company’s IPO, were capitalized and recorded in other assets on the condensed consolidated balance sheets. As of September 30, 2020 and December 31, 2019, $3.6 million and $1.9 million, respectively, of deferred offering costs were capitalized. Upon completion of the IPO, these deferred offering costs will be reclassified to stockholders’ equity and recorded against the proceeds from the IPO. Accounts Receivable, Net Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are presented net of an estimated allowance for doubtful accounts based on a review of all outstanding amounts. The Company maintains an allowance for doubtful accounts based upon an analysis of past credit history and the current financial condition of the Company’s customers, as well as the consideration of expected trends based upon characteristics of the accounts and general economic conditions. The Company also considers other specific operational factors which may impact the ability to collect past due amounts. During fiscal year 2020, the Company also considered the impact of COVID-19. As of September 30, 2020, the allowance for doubtful accounts was $8.4 million. The f Amount Balance as of December 31, 2019 $ 7,094 Provision for bad debt 4,793 Net r (3,508 ) Balance as of September 30, 2020 $ 8,379 Unbilled accounts receivable is Recently Adopted Accounting Pronouncements In October 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-16, In June 2018, the FASB issued ASU 2018-07, A c In February 2016, t h ASU 2016-02, right-of-use ASU 2019-10 COVID-19 right-of-use In December 2019, the FASB issued ASU 2019-12, step-up The st andard the C y |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 3. Revenue Recognition Disaggregation of Revenue The following table disaggregates revenue by service (in thousands): Three Months Ended September 30, 2020 Device Professional Subscription Total Timing of revenue recognition: Transferred at a point in time $ 6,964 $ — $ — $ 6,964 Transferred over time — 950 122,753 123,703 Total $ 6,964 $ 950 $ 122,753 $ 130,667 Three Months Ended September 30, 2019 Device Professional Subscription Total Timing of revenue recognition: Transferred at a point in time $ 11,948 $ — $ — $ 11,948 Transferred over time — 575 105,170 105,745 Total $ 11,948 $ 575 $ 105,170 $ 117,693 Nine Months Ended September 30, 2020 Device Professional Subscription Total Timing of revenue recognition: Transferred at a point in time $ 21,098 $ — $ — $ 21,098 Transferred over time — 2,347 356,348 358,695 Total $ 21,098 $ 2,347 $ 356,348 $ 379,793 Nine Months Ended September 30, 2019 Device Professional Subscription Total Timing of revenue recognition: Transferred at a point in time $ 29,582 $ — $ — $ 29,582 Transferred over time — 1,937 301,107 303,044 Total $ 29,582 $ 1,937 $ 301,107 $ 332,626 The following table summarizes sales to customers by geography (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Unaudited) United States $ 94,632 $ 87,084 $ 277,654 $ 245,280 International 36,035 30,609 102,139 87,346 Total $ 130,667 $ 117,693 $ 379,793 $ 332,626 Revenue by location is determined by the billing address for the customer. Other than the United States, no other individual country accounted for 10% or more of total revenue for the three and nine months ended September 30, 2020 and 2019. Contract Balances Deferred revenue as of September 30, 2020 and December 31, 2019, was $28.3 million (of which $2.9 million was non-current) was non-current), Current contract assets of $6.7 million and $6.5 million were Non-current were Contract Acquisition Costs Contract acquisition costs as of September 30, 2020 and December 31, 2019 were $43.6 million and $35.9 million, respectively. The contract acquisition cost balance has increased over time as sales commissions have been incurred at a higher rate than the contract acquisition cost has been amortizing. Contract acquisition costs are included in other assets on the condensed consolidated balance sheets. Remaining Unsatisfied Performance Obligations Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at September 30, 2020 and December 31, 2019 are as follows (in thousands): September 30, 2020 Total Less than 1-3 Years 3-5 Years Remaining unsatisfied performance obligations $ 166,241 $ 85,162 $ 76,395 $ 4,684 December 31, 2019 Total Less than 1-3 Years 3-5 Years Remaining unsatisfied performance obligations $ 220,915 $ 107,562 $ 103,234 $ 10,119 Amounts above exclude month-to-month |
Inventory, Net
Inventory, Net | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory, Net | 4. Inventory , Net Inventory, net of the reserves for obsolescence, consisted of the following (in thousands): September 30, December 31, Components $ 8,321 $ 9,045 Work in progress 2,399 1,449 Finished goods 6,546 1,921 Total inventory , net $ 17,266 $ 12,415 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment, net, consisted of the following (in thousands): Estimated September 30, 2020 Servers 3-5 $ 87,366 $ 67,420 Leasehold improvements 10 years or less 31,456 29,567 Computer equipment 3-5 14,605 13,502 Internally developed software 3 7,080 5,479 Furniture and fixtures 5 6,005 5,955 Purchased software 3 998 900 Vehicles 5 101 100 Total property and equipment 147,611 122,923 Less: accumulated depreciation and amortization (60,993 ) (42,177 ) Total property and equipment, net $ 86,618 $ 80,746 Depreciation expense included in cost of revenue and operating expenses was $4.4 million and $2.1 million, respectively, for the three months ended September 30, 2020, and $3.0 million and $2.1 million, respectively, for the three months ended September 30, 2019. Depreciation expense included in cost of revenue and operating expenses was $12.2 million and $6.4 million, respectively, for the nine months ended September 30, 2020, and $7.7 million and $6.2 million, respectively, for the nine months ended September 30, 2019. The Company capitalized $0.4 million and $0.3 million of internally developed software costs during the three months ended September 30, 2020 and 2019, and $1.6 million and $1.4 million during the nine months ended September 30, 2020 and 2019, respectively. Amortization expense related to capitalized software included in operating expenses was $0.4 million and $0.3 million during the three months ended September 30, 2020 and 2019, and $1.0 million and $0.8 million during the nine months ended September 30, 2020 and 2019, respectively. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | 6. Acquisitions In July 2020, the Company acquired all of the outstanding equity of two affiliated Australian entities, Gluh Pty Ltd and Keystone Software Holdings Pty Ltd (together, “Gluh”), which offer a real-time quoting platform that enables MSPs to simplify the procurement of IT products and services for their clients. The purchase consideration was approximately $4.4 million, reflecting the purchase price of $4.0 million and certain closing adjustments. The financial results of Gluh are included in the Company’s condensed consolidated results from the date of acquisition. These amounts are insignificant for the three and nine months ended September 30, 2020. The acquisition was accounted for as a business combination. The Company is currently assessing the identification and measurement of the assets acquired and liabilities assumed based on their fair values as of the close of the acquisition, including the valuation of identifiable intangible assets. Preliminarily, the excess of the purchase price over the net assets acquired of $4.1 million has been recorded to goodwill. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company believes there is no litigation or other liabilities for loss contingencies pending, individually or in the aggregate, that could have a material adverse effect on the Company’s financial position, results of operations, or cash flows. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt On December 7, 2017, the Company entered into a debt agreement (the “2017 Credit Agreement”) comprised of a $520.0 million term loan facility and a $35.0 million revolving credit facility . (the “2019 Credit Agreement”) consisting of a $550.0 million term loan facility (the “Term Loan Facility”) and a $50.0 million revolving credit facility (the “Revolving Credit Facility”). Shortly after the completion of the Company’s IPO in October 2020, the Company repaid all outstanding balances under the Term Loan Facility and Revolving Credit Facility , and the 2019 Credit Agreement was terminated. The Company entered into a new revolving credit facility (the “2020 Revolving Credit Facility”) under a new debt agreement (the “2020 Credit Agreement”) which provides $200.0 million of borrowing capacity. See Note 14. Subsequent Events, for further information. As of September 30, 2020 and December 31, 2019, $543.1 million and $547.3 million, respectively, of principal was outstanding under the Term Loan Facility. The decrease in the balance reflects scheduled amortization payments. The interest rate on the Term Loan Facility was 4.40% and 6.05% at September 30, 2020 and December 31, 2019, respectively. The estimated fair value of the Company’s Term Loan Facility based upon quoted market prices as of September 30, 2020 was $541.7 million, and $550.0 million as of December 31, 2019. As of September 30, 2020 and December 31, 2019, $47.1 million and $15.0 million, respectively, was drawn on the Revolving Credit Facility and $1.9 and $2.8 million, respectively, of letters of credit were outstanding. The interest rate on the Revolving Credit Facility was 3.90% and 5.52% at September 30, 2020 and December 31, 2019, respectively. The 2019 Credit Agreement contained certain affirmative, negative and financial covenants. At September 30, 2020, the Company was in compliance with all applicable covenants. The Company recorded amortization of the debt issuance costs and original issue discount of $0.4 million as interest expense during both the three months ended September 30, 2020 and 2019, and $1.3 million and $1.5 million as interest expense during the nine months ended September 30, 2020 and 2019, respectively. The Company’s long-term debt consisted of the following (in thousands): September 30, 2020 December 31, 2019 Term loan facility $ 543,125 $ 547,250 Revolving credit facility 47,100 15,000 Less: current portion of long-term debt (5,500 ) (5,500 ) Less: debt issuance costs and original issue discount, net (8,986 ) (10,251 ) Total long-term debt $ 575,739 $ 546,499 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 9. Stock-Based Compensation 2017 Stock Option Plan In December 2017, the Company adopted the 2017 Stock Option Plan (the “Datto Plan”), as amended, which provides for grants of stock options to attract and retain talented employees, directors, officers, and consultants. The Company had 11,798,422 shares of common stock reserved for issuance under the Datto Plan for the periods presented. Under the terms of the Datto Plan, two categories of options were established: management options (the “Management Options”) and IPO options (the “IPO Options” and, together with Management Options, the “Options”). The Options have similar characteristics except for their vesting requirements which are summarized below: Option Category Vesting Requirements Management Options Time-based: 25% vest after one year and 6.25% vest per quarter for the subsequent twelve quarters Change-in-control: IPO Options Time based, but initial vesting contingent on an IPO: • • Change-in-control: The modification of the vesting terms of the IPO Options is accounted for as a new award, and the Company updated the fair value of each stock option grant using the Black Scholes option pricing model on the modification date in September 2020. See Note 14. Subsequent Events, for further information on the impact of the IPO on the valuation of these awards. In addition to the Datto Plan, the Company also has outstanding options which were issued under the Autotask Superior Holdings 2013 Stock Option Plan (the “Autotask Plan”), which was frozen at the time of the merger with Autotask in December 2017. All outstanding awards were fully vested as of the date of the Autotask merger, and the options settle in common stock of the Company. Stock-based compensation expense for all equity arrangements was reflects in the Company’s condensed consolidated statements of operations as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Cost of revenue—subscription $ 77 $ 20 $ 118 $ 77 Selling and marketing 524 619 1,803 2,259 Research and development 494 234 1,115 3,051 General and administrative 1,694 893 3,525 4,067 Total $ 2,789 $ 1,766 $ 6,561 $ 9,454 The table reflects stock-based compensation expense for the time-based Management Options, based upon the function of the option holder. In addition, the table reflects stock-based compensation expense of $1.3 million related to the settlement of certain awards for terminated employees during the nine months ended September 30, 2019. The table does not reflect stock-based compensation expense for the IPO Options, as these awards contain a performance vesting condition (i.e. closing of an initial public offering). For the periods presented, the performance condition was not deemed satisfied, as the closing of an initial public offering event is not deemed probable until consummated. The Company will begin to record stock-based compensation for the IPO Options using the accelerated attribution method, during the fourth quarter of 2020. See Note 14. Subsequent Events, for further information. The following table summarizes stock option activity related to the plans during the nine months ended September 30, 2020 (in thousands, except share and per share amounts): Number of Weighted Weighted Aggregate Options outstanding at December 31, 2019 9,623,400 $ 10.01 8.4 $ 43,227 Options granted 1,419,225 $ 12.80 Options exercised (322,755 ) $ 10.07 Options forfeited & expired (831,405 ) $ 10.56 Options outstanding at September 30, 2020 9,888,465 $ 10.36 7.9 $ 155,732 Options vested and exercisable at September 30, 2020 3,300,494 $ 8.94 6.8 $ 56,670 The aggregate intrinsic value of stock options exercised during the three and nine months ended September 30, 2020 was $0.1 million and $1.3 million, respectively. There were no stock options exercised during the nine months ended September 31, 2019. The weighted average fair value of each option granted to purchase common stock during the three months ended September 30, 2020 and 2019 was $15.77 The fair value of each stock option grant is estimated on the date of grant using the Black Scholes option pricing model with the following assumptions used for employee grants during the nine months ended September 30, 2020 and 2019: Nine Months Ended September 30, 2020 2019 Expected dividend yield 0% 0% Expected volatility 65.0% 50.0% Expected term (years) 6.21 6.13 - 6.19 Risk-free interest rate 0.4% 1.8% - 2.2% Fair value of common stock $22.17 - $22.64 $10.93 - $11.54 The valuation of awards granted during 2020, as well as the final valuation of the IPO Options which were modified during 2020, is based upon an interpolation of the Company’s stock price from the beginning of the year to the initial public offering price of $27.00 . The following table summarizes the options available for future grants under the Datto Plan: Shares Available Grant Balance at December 31, 2019 2,742,903 Options granted (1,419,225 ) Options forfeited, expired and repurchased 891,830 Balance at September 30, 2020 2,215,508 In conjunction with the initial public offering, in October 2020, the Board adopted the 2020 Omnibus Incentive Plan (the “2020 Plan ”), and no additional awards are allowed to be issued under the Plan. As of September 30, 2020, unrecognized compensation expense related to Management Options, which are time-based, was $28.1 million, which will be recognized over the remaining weighted-average vesting t e Subsequent Events, for information pertaining to the unrecognized compensation expense of the IPO Options, as well as further discussion of the 2020 Plan. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The Company incurred a provision for income tax of was pre-tax pre-tax non-recurring |
Net Income (Loss) per Share
Net Income (Loss) per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Share | 11. Net Income (Loss) per Share For the three and nine month periods ended September 30, 2020 there were 1,058,594 and 2,216,118 of weighted-average outstanding shares, respectively, of potentially dilutive options excluded from the computation of diluted net income (loss) per share attributable to common stockholders for the period presented because including them would have been antidilutive. For the three and nine month periods ended September 30, 2019 there were 6,049,093 and 6,300,201 of weighted-average outstanding shares, respectively, of potentially dilutive options excluded from the computation of diluted net income (loss) per share attributable to common stockholders for the period presented because including them would have been antidilutive. For the purpose of computing diluted earnings per share, options with a performance condition, such as the IPO Options, are considered contingently issuable, and are included in the denominator for computing dilutive net earnings per share for the entire period only once the performance condition is met, and only to the extent such options are dilutive. As of September 30, 2020, 2,876,233 IPO Options were outstanding. A reconciliation of net income (loss) available to common stockholders and the Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator: Net income (loss) attributable to common stockholders $ 19,546 $ 2,725 $ 29,666 $ (22,958 ) Denominator: Weighted-average shares used in computing net income (loss) per share attributable to common stockholders Basic 135,553,097 135,195,800 135,496,696 135,195,800 Diluted 138,590,770 135,615,949 137,006,921 135,195,800 Net income (loss) per share attributable to common stockholders Basic $ 0.14 $ 0.02 $ 0.22 $ (0.17 ) Diluted $ 0.14 $ 0.02 $ 0.22 $ (0.17 ) |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 12. Related Party Transactions Vista Equity Partners (“Vista”), the Company’s majority shareholder, is a U.S.-based investment firm. During the three and nine months ended September 30, 2020, the Company paid a total of $0.2 million and $0.4 million, respectively, for consulting services, executive recruitment, and other expenses related to services provided by Vista and Vista affiliates. During the three and nine months ended September 30, 2019, the Company paid a total of $0.2 million and $0.9 million, respectively, for consulting services, executive recruitment, and other expenses related to services provided by Vista and Vista affiliates. At September 30, 2020, the Company had immaterial accounts payable to Vista. At December 31, 2019, the Company had $0.1 million in accounts payable due to Vista. In the normal course of business, the Company sells technology solutions as recurring subscriptions to portfolio companies of Vista. Sales to Vista portfolio companies were immaterial during the three months and nine months ended September 30, 2020 and 2019. At September 30, 2020 and December 31, 2019, the Company had immaterial accounts receivable and deferred revenue from Vista portfolio companies on the condensed consolidated balance sheets. The Company purchased software licenses, software services, and related IT support services from Vista portfolio companies. Purchases from Vista portfolio companies amounted to $0.2 million and $0.3 million, during the three months ended September 30, 2020 and 2019, and $0.7 million, during both the nine months ended September 30, 2020 and 2019. At September 30, 2020 and December 31, 2019, the Company had immaterial accounts payable due to Vista portfolio companies. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 13. Restructuring In response to the COVID-19 the measures taken, |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events Initial Public Offering On October 23, 2020, the Company completed its IPO through which the Company issued and sold 22,000,000 shares of common stock at a price per share of $27.00. The Company received aggregate proceeds of approximately $558.0 million from the IPO, after deducting the underwriting discount of $36.0 million. Upon the completion of the IPO, authorized capital stock consists of 500,000,000 shares of common stock, par value $0.001 per share, and 50,000,000 shares of undesignated preferred stock, par value $0.001 per share. Immediately after the IPO, funds controlled by Vista owned approximately 72.2% of the Company’s outstanding common stock , excluding treasury shares . As a result, the Company is a “controlled company” under New York Stock Exchange corporate governance rules. On October 20, 2020, the Board adopted and the stockholders approved the 2020 Plan, pursuant to which the Company and its affiliates’ employees, consultants and directors will be eligible to receive incentive awards. The 2020 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards and performance awards, in each case intended to align the interests of participants with those of the Company’s stockholders. In connection with the 2020 Plan, 20,868,874 shares of the Company’s common stock were Shortly after closing the IPO, the Company utilized the IPO proceeds and available cash of $38.4 million to (i) repay the outstanding principal balances under the 2019 Credit Agreement (ii) pay (iii) pay 2020 and (iv) pay this quarter of 2020 write-off 2020 2020 In addition, on November 3, 2020, the underwriters exercised their option in full to purchase 3,300,000 additional shares of common stock at a price of $27.00 per share, resulting in proceeds to the Company of approximately $83.6 million, after deducting the underwriting discount of $5.4 million and funds controlled by Vista owned approximately 70.7% of the Company’s outstanding common stock, excluding treasury share s Impact of IPO on Options As discussed in Note 9. Stock-Based Compensation, the performance condition in relation to the IPO Options was not deemed satisfied as of September 30, 2020, as the closing of an initial public offering event is not deemed probable until consummated, and no stock-based compensation for the IPO Options is reflected in the periods presented. The Company will begin to record stock-based compensation for the IPO O Based upon the IPO Options outstanding as of September 30, 2020, the Company expects to record approximately $52.7 million of stock-based compensation expense, including $22.0 million during the fourth quarter of 2020 and $30.7 million thereafter, over a weighted average period of 1.2 years. In addition, after September 30, 2020, the Company awarded 391,119 of restricted stock units to certain directors, officers and employees, for which the Company expects to recognize approximately $10.6 million of stock-based compensation expense over the requisite service periods (typically four years). The valuation of awards granted during 2020, as well as the final valuation of the IPO Options which were modified during 2020, is based upon an interpolation of the Company’s stock price from the beginning of the year to the initial public offering price of $27.00. 2020 Credit Agreement On October 23, 2020, Datto, Inc., as borrower (the “Borrower”), and certain direct and indirect wholly-owned subsidiaries of Datto Holding Corp., entered into the 2020 Credit Agreement with the lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent. The 2020 Credit Agreement is guaranteed by certain direct and indirect subsidiaries of Datto Holding Corp. (the “Guarantors,” and, together with the Borrower, the “Loan Parties”) and is supported by a security interest in substantially all of the Loan Parties’ personal property and assets, subject to customary exceptions , as defined in the 2020 Credit Agreement. The 2020 Credit Agreement provides for an initial 2020 the 2020 2020 The 2020 Credit Agreement contains certain customary representations and warranties and affirmative and negative covenants, as defined in the 2020 Credit Agreement, which was attached as Exhibit 10.1 to the Company’s Current Report, Form 8-K The 2020 Credit Agreement is undrawn, with the exception of million of outstanding letters of credit. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Certain information and note disclosures included in complete financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial reporting. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the final prospectus for the Company’s IPO dated October 20, 2020 and filed with the SEC on October 22, 2020 pursuant to Rule 424(b)(4) under the Securities Act of 1933 (the “IPO Prospectus”). The condensed consolidated financial statements include the accounts of Datto Holding Corp. and its wholly-owned The condensed consolidated balance sheet as of December 31, 2019 included herein was derived from the audited financial statements as of that date, but does not include all disclosures required by U.S. GAAP. The accompanying interim condensed consolidated balance sheet as of September 30, 2020, the interim condensed consolidated statements of operations, comprehensive income (loss) The results for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results expected for the year ending December 31, 2020 or any other future period. Additionally, there are many uncertainties regarding the ongoing coronavirus (“COVID-19”) COVID-19. COVID-19 COVID-19 COVID-19 COVID-19 |
Segment Information | Segment Information Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one operating segment. As of September 30, 2020 and December 31, 2019 the Company did not have material long-lived assets located outside of the United States. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to revenue recognition (including upgrade and return rights), contract balances, contract acquisition costs, allowance for doubtful accounts, reserves for inventory obsolescence, useful lives and recoverability of property and equipment and intangible assets with definite lives, capitalized software development and implementation costs, recoverability of goodwill, income taxes, stock-based compensation and contingencies, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could materially differ from these estimates as a result of risks and uncertainties, including the uncertainty surrounding rapidly changing market and economic conditions from the impact of COVID-19. With the exception of the items noted below there have been no material changes to the Company’s significant accounting policies. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs, consisting of legal, accounting and other fees and costs incurred in connection with the sale of common stock in the Company’s IPO, were capitalized and recorded in other assets on the condensed consolidated balance sheets. As of September 30, 2020 and December 31, 2019, $3.6 million and $1.9 million, respectively, of deferred offering costs were capitalized. Upon completion of the IPO, these deferred offering costs will be reclassified to stockholders’ equity and recorded against the proceeds from the IPO. |
Accounts Receivable, Net | Accounts Receivable, Net Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable are presented net of an estimated allowance for doubtful accounts based on a review of all outstanding amounts. The Company maintains an allowance for doubtful accounts based upon an analysis of past credit history and the current financial condition of the Company’s customers, as well as the consideration of expected trends based upon characteristics of the accounts and general economic conditions. The Company also considers other specific operational factors which may impact the ability to collect past due amounts. During fiscal year 2020, the Company also considered the impact of COVID-19. As of September 30, 2020, the allowance for doubtful accounts was $8.4 million. The f Amount Balance as of December 31, 2019 $ 7,094 Provision for bad debt 4,793 Net r (3,508 ) Balance as of September 30, 2020 $ 8,379 Unbilled accounts receivable is |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In October 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-16, In June 2018, the FASB issued ASU 2018-07, A c In February 2016, t h ASU 2016-02, right-of-use ASU 2019-10 COVID-19 right-of-use In December 2019, the FASB issued ASU 2019-12, step-up The st andard the C y |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Allowance for Doubtful Accounts | The f Amount Balance as of December 31, 2019 $ 7,094 Provision for bad debt 4,793 Net r (3,508 ) Balance as of September 30, 2020 $ 8,379 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation Revenue | The following table disaggregates revenue by service (in thousands): Three Months Ended September 30, 2020 Device Professional Subscription Total Timing of revenue recognition: Transferred at a point in time $ 6,964 $ — $ — $ 6,964 Transferred over time — 950 122,753 123,703 Total $ 6,964 $ 950 $ 122,753 $ 130,667 Three Months Ended September 30, 2019 Device Professional Subscription Total Timing of revenue recognition: Transferred at a point in time $ 11,948 $ — $ — $ 11,948 Transferred over time — 575 105,170 105,745 Total $ 11,948 $ 575 $ 105,170 $ 117,693 Nine Months Ended September 30, 2020 Device Professional Subscription Total Timing of revenue recognition: Transferred at a point in time $ 21,098 $ — $ — $ 21,098 Transferred over time — 2,347 356,348 358,695 Total $ 21,098 $ 2,347 $ 356,348 $ 379,793 Nine Months Ended September 30, 2019 Device Professional Subscription Total Timing of revenue recognition: Transferred at a point in time $ 29,582 $ — $ — $ 29,582 Transferred over time — 1,937 301,107 303,044 Total $ 29,582 $ 1,937 $ 301,107 $ 332,626 |
Summary of Disaggregation Revenue By Geography | The following table summarizes sales to customers by geography (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (Unaudited) United States $ 94,632 $ 87,084 $ 277,654 $ 245,280 International 36,035 30,609 102,139 87,346 Total $ 130,667 $ 117,693 $ 379,793 $ 332,626 |
Summary of Revenues expected to be Recognized in the Future Related to Performance Obligations | Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at September 30, 2020 and December 31, 2019 are as follows (in thousands): September 30, 2020 Total Less than 1-3 Years 3-5 Years Remaining unsatisfied performance obligations $ 166,241 $ 85,162 $ 76,395 $ 4,684 December 31, 2019 Total Less than 1-3 Years 3-5 Years Remaining unsatisfied performance obligations $ 220,915 $ 107,562 $ 103,234 $ 10,119 |
Inventory, Net (Tables)
Inventory, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Summary of Composition of Inventories | Inventory, net of the reserves for obsolescence, consisted of the following (in thousands): September 30, December 31, Components $ 8,321 $ 9,045 Work in progress 2,399 1,449 Finished goods 6,546 1,921 Total inventory , net $ 17,266 $ 12,415 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net, consisted of the following (in thousands): Estimated September 30, 2020 Servers 3-5 $ 87,366 $ 67,420 Leasehold improvements 10 years or less 31,456 29,567 Computer equipment 3-5 14,605 13,502 Internally developed software 3 7,080 5,479 Furniture and fixtures 5 6,005 5,955 Purchased software 3 998 900 Vehicles 5 101 100 Total property and equipment 147,611 122,923 Less: accumulated depreciation and amortization (60,993 ) (42,177 ) Total property and equipment, net $ 86,618 $ 80,746 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Summary Of Long-term Debt | The Company’s long-term debt consisted of the following (in thousands): September 30, 2020 December 31, 2019 Term loan facility $ 543,125 $ 547,250 Revolving credit facility 47,100 15,000 Less: current portion of long-term debt (5,500 ) (5,500 ) Less: debt issuance costs and original issue discount, net (8,986 ) (10,251 ) Total long-term debt $ 575,739 $ 546,499 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based payment arrangement, expensed and capitalized, amount | Stock-based compensation expense for all equity arrangements was reflects in the Company’s condensed consolidated statements of operations as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Cost of revenue—subscription $ 77 $ 20 $ 118 $ 77 Selling and marketing 524 619 1,803 2,259 Research and development 494 234 1,115 3,051 General and administrative 1,694 893 3,525 4,067 Total $ 2,789 $ 1,766 $ 6,561 $ 9,454 |
Disclosure of share-based compensation arrangements by share-based payment award | The following table summarizes stock option activity related to the plans during the nine months ended September 30, 2020 (in thousands, except share and per share amounts): Number of Weighted Weighted Aggregate Options outstanding at December 31, 2019 9,623,400 $ 10.01 8.4 $ 43,227 Options granted 1,419,225 $ 12.80 Options exercised (322,755 ) $ 10.07 Options forfeited & expired (831,405 ) $ 10.56 Options outstanding at September 30, 2020 9,888,465 $ 10.36 7.9 $ 155,732 Options vested and exercisable at September 30, 2020 3,300,494 $ 8.94 6.8 $ 56,670 |
Summary of fair value of options granted | The fair value of each stock option grant is estimated on the date of grant using the Black Scholes option pricing model with the following assumptions used for employee grants during the nine months ended September 30, 2020 and 2019: Nine Months Ended September 30, 2020 2019 Expected dividend yield 0% 0% Expected volatility 65.0% 50.0% Expected term (years) 6.21 6.13 - 6.19 Risk-free interest rate 0.4% 1.8% - 2.2% Fair value of common stock $22.17 - $22.64 $10.93 - $11.54 |
Summary of the options available for future grants | The following table summarizes the options available for future grants under the Datto Plan: Shares Available Grant Balance at December 31, 2019 2,742,903 Options granted (1,419,225 ) Options forfeited, expired and repurchased 891,830 Balance at September 30, 2020 2,215,508 |
Net Income (Loss) per Share (Ta
Net Income (Loss) per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Net Income (Loss) per Share | A reconciliation of net income (loss) available to common stockholders and the Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator: Net income (loss) attributable to common stockholders $ 19,546 $ 2,725 $ 29,666 $ (22,958 ) Denominator: Weighted-average shares used in computing net income (loss) per share attributable to common stockholders Basic 135,553,097 135,195,800 135,496,696 135,195,800 Diluted 138,590,770 135,615,949 137,006,921 135,195,800 Net income (loss) per share attributable to common stockholders Basic $ 0.14 $ 0.02 $ 0.22 $ (0.17 ) Diluted $ 0.14 $ 0.02 $ 0.22 $ (0.17 ) |
Business - Additional informati
Business - Additional information (Detail) - USD ($) $ / shares in Units, $ in Millions | Nov. 03, 2020 | Oct. 23, 2020 | Sep. 30, 2020 |
Large Accelarated Filer [Member] | |||
Nature Of Business [Line Items] | |||
Emerging growth company status | The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company's consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards based on public company effective dates. The Company will remain an emerging growth company until the earliest of (i) the last day of the first fiscal year (a) following the fifth anniversary of the completion of the IPO, (b) in which the Company's total annual gross revenue is at least $1.07 billion or (c) when the Company is deemed to be a large accelerated filer, which means the market value of its common stock that is held by non-affiliates exceeds $700.0 million as of June 30th of that fiscal year and (ii) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. | ||
IPO [Member] | |||
Nature Of Business [Line Items] | |||
Stock issued during the period shares | 22,000,000 | ||
Shares issued price per share | $ 27 | ||
Sale of stock consideration received on the transaction | $ 558 | ||
Subsequent Event [Member] | |||
Nature Of Business [Line Items] | |||
Sale of stock consideration received on the transaction | $ 83.6 | ||
Subsequent Event [Member] | IPO [Member] | |||
Nature Of Business [Line Items] | |||
Stock issued during the period shares | 3,300,000 | 22,000,000 | |
Shares issued price per share | $ 27 | ||
Sale of stock consideration received on the transaction | $ 558 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Significant Accounting Policies [Line Items] | ||
Deferred offering costs | $ 3,600 | $ 1,900 |
Allowance for doubtful debts | 8,379 | 7,094 |
Unbilled accounts receivable current | $ 3,200 | $ 3,600 |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Balance as of December 31, 2019 | $ 7,094 | |
Provision for bad debt | 4,793 | $ 3,422 |
Net reductions and other | (3,508) | |
Balance as of September 30, 2020 | $ 8,379 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Disaggregation Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | $ 130,667 | $ 117,693 | $ 379,793 | $ 332,626 |
Transferred at a point in time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 6,964 | 11,948 | 21,098 | 29,582 |
Transferred over time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 123,703 | 105,745 | 358,695 | 303,044 |
Device [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 6,964 | 11,948 | 21,098 | 29,582 |
Device [Member] | Transferred at a point in time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 6,964 | 11,948 | 21,098 | 29,582 |
Profesional Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 950 | 575 | 2,347 | 1,937 |
Profesional Services [Member] | Transferred over time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 950 | 575 | 2,347 | 1,937 |
Subscription [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 122,753 | 105,170 | 356,348 | 301,107 |
Subscription [Member] | Transferred over time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | $ 122,753 | $ 105,170 | $ 356,348 | $ 301,107 |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Disaggregation Revenue By Geography (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | $ 130,667 | $ 117,693 | $ 379,793 | $ 332,626 |
United States [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 94,632 | 87,084 | 277,654 | 245,280 |
International [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | $ 36,035 | $ 30,609 | $ 102,139 | $ 87,346 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Disaggregation of Revenue [Line Items] | ||
Contract with customer liability | $ 28,300 | $ 28,100 |
Contract with customer asset current | 6,700 | 6,500 |
Contract with customer asset non current | 6,500 | 7,700 |
Contract with customer liability non current | 2,937 | 3,798 |
Contract Acquisition Costs | $ 43,600 | $ 35,900 |
Revenue Recognition - Summary_3
Revenue Recognition - Summary of Revenues expected to be Recognized in the Future Related to Performance Obligations (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining unsatisfied performance obligations | $ 166,241 | $ 220,915 |
Less Than 1 Year [Member] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining unsatisfied performance obligations | 85,162 | 107,562 |
1 to 3 Years [Member] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining unsatisfied performance obligations | 76,395 | 103,234 |
3-5 Years [Member] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining unsatisfied performance obligations | $ 4,684 | $ 10,119 |
Inventory, Net - Summary of Com
Inventory, Net - Summary of Composition of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Components | $ 8,321 | $ 9,045 |
Work in progress | 2,399 | 1,449 |
Finished goods | 6,546 | 1,921 |
Total inventory, net | $ 17,266 | $ 12,415 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 147,611 | $ 122,923 |
Less: accumulated depreciation and amortization | (60,993) | (42,177) |
Total property and equipment, net | 86,618 | 80,746 |
Servers | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 87,366 | $ 67,420 |
Servers | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful lives | 3 years | 3 years |
Servers | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful lives | 5 years | 5 years |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 31,456 | $ 29,567 |
Estimated Useful lives | 10 years | 10 years |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 14,605 | $ 13,502 |
Computer equipment | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful lives | 3 years | 3 years |
Computer equipment | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful lives | 5 years | 5 years |
Internally developed software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 7,080 | $ 5,479 |
Estimated Useful lives | 3 years | 3 years |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 6,005 | $ 5,955 |
Estimated Useful lives | 5 years | 5 years |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 998 | $ 900 |
Estimated Useful lives | 3 years | 3 years |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 101 | $ 100 |
Estimated Useful lives | 5 years | 5 years |
Property and Equipment, Net - A
Property and Equipment, Net - Additional information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Line Items] | ||||
Capitalisation of internally developed software costs | $ 0.4 | $ 0.3 | $ 1.6 | $ 1.4 |
Cost of Sales [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | 4.4 | 3 | 12.2 | 7.7 |
Operating Expense [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | 2.1 | 2.1 | 6.4 | 6.2 |
Amortisation expenses related to capitalisation of internally developed software costs | $ 0.4 | $ 0.3 | $ 1 | $ 0.8 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) $ in Thousands | Jul. 31, 2020USD ($)Entity | Sep. 30, 2020USD ($) |
Acquisitions [Line Items] | ||
Acquisitions purchase price | $ 4,371 | |
Gluh | ||
Acquisitions [Line Items] | ||
Number of business acquired | Entity | 2 | |
Acquisitions purchase price | 4,400 | |
Purchase price prior to certain closing adjustments | $ 4,000 | |
Goodwill, Transfers | $ 4,100 |
Debt - Additional information (
Debt - Additional information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Oct. 30, 2020 | Dec. 31, 2019 | Apr. 02, 2019 | Dec. 07, 2017 | |
Line of Credit Facility [Line Items] | ||||||||
Amortisation of debt issuance costs | $ 400 | $ 400 | $ 1,300 | $ 1,500 | ||||
Term Loan Facility [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Term loan outstanding amount | $ 543,125 | $ 543,125 | $ 547,250 | |||||
Term Loan Facility [Member] | 2017 Credit Agreement [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, face amount | $ 520,000 | |||||||
Term Loan Facility [Member] | 2019 Credit Agreement [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Revolving line of credit variable interest rate percentage | 4.40% | 4.40% | 6.05% | |||||
Term loan outstanding amount | $ 543,100 | $ 543,100 | $ 547,300 | |||||
Term loan facility based upon quoted market price | 541,700 | 541,700 | 550,000 | |||||
Debt instrument, face amount | $ 550,000 | |||||||
Revolving Credit Facility [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Term loan outstanding amount | 47,100 | 47,100 | 15,000 | |||||
Revolving Credit Facility [Member] | 2017 Credit Agreement [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit maximum borrowing capacity | $ 35,000 | |||||||
Revolving Credit Facility [Member] | 2019 Credit Agreement [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit maximum borrowing capacity | $ 50,000 | |||||||
Letters of credit issued under credit facility | $ 1,900 | $ 1,900 | $ 2,800 | |||||
Line of credit facility, interest rate at period end | 3.90% | 3.90% | 5.52% | |||||
Term loan outstanding amount | $ 47,100 | $ 47,100 | $ 15,000 | |||||
Revolving Credit Facility [Member] | 2020 Credit Agreement [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit maximum borrowing capacity | $ 200,000 |
Debt - Long-term debt (Detail)
Debt - Long-term debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | ||
Less: current portion of long-term debt | $ (5,500) | $ (5,500) |
Less: debt issuance costs and original issue discount, net | (8,986) | (10,251) |
Total long-term debt | 575,739 | 546,499 |
Term loan facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Long-term Debt, Gross | 543,125 | 547,250 |
Revolving credit facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Long-term Debt, Gross | $ 47,100 | $ 15,000 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share-Based Payment Arrangement, Expensed And Capitalized, Amount (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based Payment Arrangement, Expense | $ 2,789 | $ 1,766 | $ 6,561 | $ 9,454 |
Cost of revenue—subscription [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based Payment Arrangement, Expense | 77 | 20 | 118 | 77 |
Selling and marketing [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based Payment Arrangement, Expense | 524 | 619 | 1,803 | 2,259 |
Research and development [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based Payment Arrangement, Expense | 494 | 234 | 1,115 | 3,051 |
General and administrative [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based Payment Arrangement, Expense | $ 1,694 | $ 893 | $ 3,525 | $ 4,067 |
Stock-Based Compensation - Disc
Stock-Based Compensation - Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award (Detail) - Stock Option [Member] - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Number of Shares Options Beginning Balance | 9,623,400 | |
Number of Shares Options granted | 1,419,225 | |
Number of Shares Options exercised | (322,755) | |
Number of Shares Options forfeited and expired | (831,405) | |
Number of Shares Options Ending Balance | 9,888,465 | 9,623,400 |
Number of Shares Options vested and exercisable | 3,300,494 | |
Weighted Average Exercise Price Options Outstanding | $ 10.01 | |
Weighted Average Exercise Price Options granted | 12.80 | |
Weighted Average Exercise Price Options exercised | 10.07 | |
Weighted Average Exercise Price Options forfeited & expired | 10.56 | |
Weighted Average Exercise Price Options Outstanding | 10.36 | $ 10.01 |
Weighted Average Exercise Price Options vested and exercisable | $ 8.94 | |
Weighted Average Remaining Contractual Life (Years) Options outstanding | 7 years 10 months 24 days | 8 years 4 months 24 days |
Weighted Average Remaining Contractual Life (Years) Options outstanding | 7 years 10 months 24 days | 8 years 4 months 24 days |
Weighted Average Remaining Contractual Life (Years) Options vested and exercisable | 6 years 9 months 18 days | |
Aggregate Intrinsic Value Options outstanding | $ 43,227 | |
Aggregate Intrinsic Value Options outstanding | $ 155,732 | |
Aggregate Intrinsic Value Options vested and exercisable | $ 56,670 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Common stock reserved for issuance | 11,798,422 | 11,798,422 | ||
Aggregate intrinsic value of stock options exercised | $ 0.1 | $ 1.3 | $ 0 | |
Weighted average fair value of options granted | $ 15.77 | $ 5.70 | $ 15.42 | $ 5.49 |
Recognized over the remaining weighted-average vesting term | 2 years 10 months 24 days | |||
Initial public offering price | $ 27 | $ 27 | ||
Management [Member] | ||||
Vesting requirement | Time-based: 25% vest after one year and 6.25% vest per quarter for the subsequent twelve quarters | |||
IPO [Member] | ||||
Vesting requirement | Time based, but initial vesting contingent on an IPO: | |||
Description of change in control | Change-in-control: 100% vest | |||
IPO With Time Vesting, as Modified | IPO, with time vesting, as modified: 25% vest upon an IPO, but to the extent the IPO occurs after the second anniversary of the grant date, in addition to the 25% vesting upon an IPO, the award will vest an additional 6.25% for each quarter of service provided, commencing on the second anniversary date of the award, and 6.25% vest per quarter thereafter. Note the vesting terms of these awards were modified in September 2020 to provide for the additional vesting commencing on the second anniversary of the award. Previously, 25% would vest upon the closing of an IPO and 6.25% would vest per quarter for the subsequent twelve quarters. | |||
IPO, with Time Vesting | IPO, with time vesting: 25% vest upon the later of (a) the closing of an IPO and (b) one year after the employees start date (the “First Vesting Date”), with 6.25% vesting per quarter thereafter. However, to the extent the First Vesting Date occurs after the second anniversary of the grant date, in addition to the 25% vesting upon an IPO, the award will vest an additional 6.25% for each quarter, commencing on the second anniversary of the grant date. | |||
Management Options [Member] | ||||
Unrecognized compensation expense | $ 28.1 | $ 28.1 | ||
Description of change in control | Change-in-control: 100% vest | |||
Employee Stock Option [Member] | ||||
Settlement of certain awards for terminated employees | $ 1.3 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary Of Fair Value Of Options Granted (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Fair value of common stock | $ 15.77 | $ 5.70 | $ 15.42 | $ 5.49 |
Black Scholes Option [Member] | ||||
Expected dividend yield | 0.00% | 0.00% | ||
Expected volatility | 65.00% | 50.00% | ||
Expected term (years) | 6 years 2 months 15 days | |||
Risk-free interest rate | 0.40% | |||
Black Scholes Option [Member] | Maximum [Member] | ||||
Expected term (years) | 6 years 2 months 8 days | |||
Risk-free interest rate | 2.20% | |||
Fair value of common stock | $ 22.64 | $ 11.54 | ||
Black Scholes Option [Member] | Minimum [Member] | ||||
Expected term (years) | 6 years 1 month 17 days | |||
Risk-free interest rate | 1.80% | |||
Fair value of common stock | $ 22.17 | $ 10.93 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary Of The Options Available For Future Grants (Detail) - Datto Plan [Member] | 9 Months Ended |
Sep. 30, 2020shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Balance at December 31, 2019 | 2,742,903 |
Options granted | (1,419,225) |
Options forfeited, expired and repurchased | 891,830 |
Balance at September 30, 2020 | 2,215,508 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Effective tax rate | 20.20% | 12.90% | 22.70% | 15.20% |
Provision for income tax | $ 4,962 | $ 404 | $ 8,727 | $ (4,130) |
Net Income (Loss) per Share - S
Net Income (Loss) per Share - Summary of Net Income (Loss) per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||||||
Net income (loss) attributable to common stockholders | $ 19,546 | $ 8,767 | $ 1,353 | $ 2,725 | $ (22,234) | $ (3,449) | $ 29,666 | $ (22,958) |
Weighted-average shares used in computing net income (Loss) per share attributable to common stockholders | ||||||||
Basic | 135,553,097 | 135,195,800 | 135,496,696 | 135,195,800 | ||||
Diluted | 138,590,770 | 135,615,949 | 137,006,921 | 135,195,800 | ||||
Net income (Loss) per share attributable to common stockholders: | ||||||||
Basic | $ 0.14 | $ 0.02 | $ 0.22 | $ (0.17) | ||||
Diluted | $ 0.14 | $ 0.02 | $ 0.22 | $ (0.17) |
Net Income (Loss) per Share - A
Net Income (Loss) per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive securities excluded from computation of earnings per share | 1,058,594 | 6,049,093 | 2,216,118 | 6,300,201 |
IPO [Member] | ||||
Options outstanding | 2,876,233 | 2,876,233 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - Vista and Vista Affiliates [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 0.1 | ||||
Purchases from related party | $ 0.2 | $ 0.3 | $ 0.7 | $ 0.7 | |
Consulting Services Executive Recruitment and Other Expenses [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party transactions, amounts of transaction | $ 0.2 | $ 0.2 | $ 0.4 | $ 0.9 |
Restructuring - Additional info
Restructuring - Additional information (Detail) $ in Millions | 3 Months Ended |
Jun. 30, 2020USD ($) | |
Restructuring Charges | |
Restructuring charges | $ 3.8 |
Cost of Revenue [Member] | |
Restructuring Charges | |
Restructuring charges | 0.6 |
Operating Expense [Member] | |
Restructuring Charges | |
Restructuring charges | $ 3.2 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Nov. 03, 2020 | Oct. 23, 2020 | Oct. 01, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Oct. 20, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | ||||||||
Stock based compensation expenses | $ 6,561 | $ 9,454 | ||||||
Common stock authorised | 150,000,000 | 150,000,000 | ||||||
Common stock par value, per share | $ 0.001 | $ 0.001 | ||||||
Common stock reserved for issuance | 11,798,422 | |||||||
Cash | $ 98,614 | 31,781 | ||||||
Repayments of Long-term Debt | $ 4,468 | $ 522,048 | ||||||
Recognized over the remaining weighted-average vesting term | 2 years 10 months 24 days | |||||||
Payments of Stock Issuance Costs | $ 980 | |||||||
2019 Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Letters of credit issued under credit facility | $ 1,900 | $ 2,800 | ||||||
IPO [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock issued during the period shares | 22,000,000 | |||||||
Proceeds from sale of stock | $ 558,000 | |||||||
Shares issued price per share | $ 27 | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Proceeds from sale of stock | $ 83,600 | |||||||
Stock based compensation expenses | $ 22,000 | |||||||
Common stock authorised | 500,000,000 | |||||||
Common stock par value, per share | $ 0.001 | |||||||
Undesignated preferred stock authorised | 50,000,000 | |||||||
Undesignated preferred stock par value per share | $ 0.001 | |||||||
Cash | $ 38,400 | |||||||
Recognized over the remaining weighted-average vesting term | 1 year 2 months 12 days | |||||||
Subsequent Event [Member] | Maximum [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Unrecognized compensation expense | $ 52,700 | |||||||
Subsequent Event [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Shares issued price per share | $ 27 | |||||||
Unrecognized compensation expense | $ 10,600 | |||||||
Recognized over the remaining weighted-average vesting term | 4 years | |||||||
Other than options granted | 391,119 | |||||||
Subsequent Event [Member] | 2019 Credit Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Payments related to accrued interest | 1,600 | |||||||
Unamortized debt issuance costs | 9,000 | |||||||
Subsequent Event [Member] | 2019 Credit Agreement [Member] | Term Loan Facility [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Repayments of Long-term Debt | 590,200 | |||||||
Subsequent Event [Member] | 2020 Credit Agreement [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Payments related to debt issuance costs | 1,200 | |||||||
Unamortized debt issuance costs | 1,200 | |||||||
Payments of Stock Issuance Costs | 3,300 | |||||||
Subsequent Event [Member] | 2020 Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Letters of credit issued under credit facility | 1,900 | |||||||
Subsequent Event [Member] | 2020 Credit Agreement [Member] | Accordion Feature [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Revolving line of credit remaining borrowing capacity | 200,000 | |||||||
Revolving line of credit minimum amount for each requested incremental term loan facility | $ 5,000 | |||||||
Revolving credit facility maturity date | Oct. 23, 2025 | |||||||
Revolver alternative currency sublimit | $ 100,000 | |||||||
Subsequent Event [Member] | 2020 Credit Agreement [Member] | Accordion Feature [Member] | Letter of Credit [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Revolver letter of credit sublimit | 40,000 | |||||||
Subsequent Event [Member] | 2021 Plan [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Unrecognized compensation expense | $ 30,700 | |||||||
Subsequent Event [Member] | Datto 2020 Omnibus Incentive Plan [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock reserved for issuance | 20,868,874 | |||||||
Subsequent Event [Member] | Vista [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Entity ownership percentage by parent | 72.20% | |||||||
Subsequent Event [Member] | IPO [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock issued during the period shares | 3,300,000 | 22,000,000 | ||||||
Proceeds from sale of stock | $ 558,000 | |||||||
Shares issued price per share | $ 27 | |||||||
Share Price | $ 27 | |||||||
Subsequent Event [Member] | IPO [Member] | Underwriter Purchase Option [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Sale of stock, number of shares issued in transaction | 3,300,000 | |||||||
Proceeds from sale of stock | $ 83,600 | |||||||
Entity ownership percentage by parent | 70.70% | |||||||
Shares issued price per share | $ 27 | |||||||
Payments of Stock Issuance Costs | $ 5,400 | $ 36,000 |