Datto Holding (MSP) 10-Q 12 May 21 2021 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2021	Apr. 30, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	001-39637
Entity Registrant Name	DATTO HOLDING CORP.
Entity Central Index Key	0001724570
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-3345706
Entity Address, Address Line One	101 Merritt 7
Entity Address, City or Town	Norwalk
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06851
City Area Code	888
Local Phone Number	995-1431
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	MSP
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		161,275,723

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 147,819	$ 168,877
Restricted cash	1,375	1,536
Accounts receivable, net	12,920	13,946
Inventory	19,332	13,811
Prepaid expenses and other current assets	32,089	28,316
Total current assets	213,535	226,486
Property and equipment, net	95,408	91,876
Operating lease assets	33,881	0
Goodwill	1,143,796	1,120,954
Intangible assets, net	308,711	287,395
Other assets	70,582	66,560
Total assets	1,865,913	1,793,271
Current liabilities
Accounts payable	10,425	7,574
Accrued expenses and other current liabilities	48,845	39,461
Deferred revenue	21,838	23,763
Total current liabilities	81,108	70,798
Deferred revenue, noncurrent	3,423	3,322
Deferred income taxes	27,895	18,947
Operating lease liabilities, noncurrent	35,303	0
Other long-term liabilities	3,814	11,736
Total liabilities	151,543	104,803
Commitments and contingencies (Note 8)
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; 50,000,000 authorized at March 31, 2021 and December 31, 2020; no shares issued or outstanding at March 31, 2021 and December 31, 2020	0	0
Common stock, $0.001 par value; 500,000,000 shares authorized at March 31, 2021 and December 31, 2020; 161,439,155 and 161,420,016 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively (inclusive of treasury stock)	161	161
Additional paid-in capital	1,767,015	1,755,387
Treasury stock, at cost; 362,126 shares at March 31, 2021 and December 31, 2020	(3,621)	(3,621)
Accumulated deficit	(49,940)	(65,226)
Accumulated other comprehensive income	755	1,767
Total stockholders’ equity	1,714,370	1,688,468
Total liabilities and stockholders’ equity	$ 1,865,913	$ 1,793,271

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, par value (in usd per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	161,439,155	161,420,016
Common stock, shares outstanding (in shares)	161,439,155	161,420,016
Treasury stock (in shares)	362,126	362,126

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue:
Revenue	$ 144,909	$ 124,663
Cost of revenue:
Depreciation and amortization	6,625	4,994
Total cost of revenue	38,555	37,415
Gross profit	106,354	87,248
Operating expenses:
Sales and marketing	31,926	31,957
Research and development	22,474	16,733
General and administrative	24,621	21,784
Depreciation and amortization	6,570	6,917
Total operating expenses	85,591	77,391
Income from operations	20,763	9,857
Other expense:
Interest expense	102	9,006
Other (income) expense, net	(19)	1,329
Total other expense	83	10,335
Income (loss) before income taxes	20,680	(478)
(Provision for) benefit from income taxes	(5,394)	1,831
Net income	$ 15,286	$ 1,353
Net income per share attributable to common stockholders:
Basic (in usd per share)	$ 0.09	$ 0.01
Diluted (in usd per share)	$ 0.09	$ 0.01
Weighted-average shares used in computing net income per share:
Basic (in shares)	161,066,404	135,386,420
Diluted (in shares)	164,734,402	136,268,713
Subscription
Revenue:
Revenue	$ 135,590	$ 115,995
Cost of revenue:
Cost of revenue	20,930	21,766
Device
Revenue:
Revenue	8,385	8,081
Cost of revenue:
Cost of revenue	9,498	9,117
Professional services and other
Revenue:
Revenue	934	587
Cost of revenue:
Cost of revenue	$ 1,502	$ 1,538

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 15,286	$ 1,353
Other comprehensive income (loss):
Currency translation adjustment	(1,012)	(700)
Total comprehensive income	$ 14,274	$ 653

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 31, 2019		135,655,428
Beginning balance at Dec. 31, 2019	$ 992,303	$ 136	$ (3,621)	$ 1,083,082	$ (87,724)	$ 430
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	1,914			1,914
Exercise of common stock options (in shares)		255,438
Exercise of common stock options	2,500			2,500
Other comprehensive loss	(700)					(700)
Net income	1,353				1,353
Ending balance (in shares) at Mar. 31, 2020		135,910,866
Ending balance at Mar. 31, 2020	997,370	$ 136	(3,621)	1,087,496	(86,371)	(270)
Beginning balance (in shares) at Dec. 31, 2020		161,420,016
Beginning balance at Dec. 31, 2020	1,688,468	$ 161	(3,621)	1,755,387	(65,226)	1,767
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	11,511			11,511
Exercise of common stock options and vesting of restricted stock units (in shares)		19,139
Exercise of common stock options and vesting of restricted stock units	$ 117			117
Exercise of common stock options (in shares)	19,476
Other comprehensive loss	$ (1,012)					(1,012)
Net income	15,286				15,286
Ending balance (in shares) at Mar. 31, 2021		161,439,155
Ending balance at Mar. 31, 2021	$ 1,714,370	$ 161	$ (3,621)	$ 1,767,015	$ (49,940)	$ 755

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
OPERATING ACTIVITIES
Net income	$ 15,286	$ 1,353
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	7,461	6,334
Amortization of acquired intangible assets	5,734	5,577
Amortization of debt issuance costs	84	421
Reserve for inventory obsolescence	36	0
Non-cash operating lease expense	1,870	0
Stock-based compensation	11,511	1,914
Provision for bad debt	1,211	799
Deferred income taxes	4,717	(2,895)
Unrealized foreign exchange	(626)	1,938
Changes in operating assets and liabilities:
Accounts receivable	(160)	(3,129)
Inventory	(5,559)	(7,010)
Prepaid expenses and other current assets	(3,820)	(4,256)
Other assets	(4,083)	(584)
Accounts payable, accrued expenses and other	3,535	(2,563)
Deferred revenue	(2,030)	824
Net cash provided by (used in) operating activities	35,167	(1,277)
INVESTING ACTIVITIES
Purchase of property and equipment	(10,681)	(13,920)
Acquisition of business, net of cash acquired	(45,486)	0
Net cash used in investing activities	(56,167)	(13,920)
FINANCING ACTIVITIES
Proceeds from debt	0	32,100
Repayments of debt and capital leases	(28)	(1,578)
Capitalized transaction costs	(414)	(724)
Proceeds from stock option exercises	177	2,500
Net cash (used in) provided by financing activities	(265)	32,298
Effect of exchange rate changes on cash and cash equivalents	46	(1,022)
Net increase (decrease) in cash and cash equivalents	(21,219)	16,079
Cash and cash equivalents and restricted cash, beginning of year	170,413	29,066
Cash and cash equivalents and restricted cash, end of period	149,194	45,145
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents	147,819	43,836
Restricted cash	1,375	1,309
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for income taxes	226	31
Cash paid for interest	0	8,523
NON-CASH INVESTING AND FINANCING ACTIVITIES
Purchase of property and equipment included in accounts payable	271	487
Unpaid initial public offering costs in total current liabilities	$ 270	$ 2,034

Business

Business	3 Months Ended
	Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business	Business Description of Business Datto Holding Corp. ("Datto Holding") through its operating subsidiaries, provides cloud-based software and technology solutions purpose-built for delivery through the managed service provider ("MSP") channel to small and medium-sized businesses (“SMB”). Unless the context otherwise indicates or requires, references to "Datto", “we,” “us,” “our” and “the Company” shall refer to Datto Holding and its wholly-owned subsidiaries as a combined entity. The Company’s platform enables its MSP partners to serve the SMB information technology market and includes mission critical cloud-based software and technologies that MSPs sell to SMBs, business management software to help MSPs scale their own businesses, and marketing tools, content, training and industry-leading events that cultivate an empowered and highly engaged MSP partner community. The Company typically has no contractual relationship with the SMBs and considers its MSP partners to be the customers. By selling through this MSP channel, the Company is able to cost-effectively scale the reach of the Company’s solutions and support the global requirements of SMBs without a direct-to-SMB sales and support model. Datto Holding owns 100% of Merritt Holdco, Inc. (“Merritt Holdco”), which owns 100% of Datto, Inc., the Company’s primary operating company. Datto Holding has no operations or significant assets or liabilities other than its investment in Merritt Holdco. Accordingly, Datto Holding is dependent upon distributions from Merritt Holdco to fund any activity, including the payment of dividends. All obligations under Datto’s 2020 Credit Agreement, as defined in Note 9. Debt, are guaranteed by Merritt Holdco. 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. The Company utilized the IPO proceeds to repay the outstanding principal balances under the 2019 Credit Agreement of $590.2 million, to pay $5.3 million of IPO offering costs, and to pay $1.2 million in debt issuance costs under the 2020 Credit Agreement. Upon entering the 2020 Credit Agreement in October 2020, the 2019 Credit Agreement was terminated. As of March 31, 2021, funds controlled by Vista Equity Partners ("Vista") owned approximately 70.6% of the Company’s outstanding common stock, excluding treasury shares. As a result, the Company is a “controlled company” under New York Stock Exchange ("NYSE") corporate governance rules. Sales to and purchases from Vista and their portfolio companies for the three months ended March 31, 2021and balances due to and from Vista as of March 31, 2021 were immaterial. Emerging Growth Company Status The Company is an emerging growth company ("EGC"), as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGCs 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 the Company (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company’s condensed 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.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2021
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Unaudited Interim Financial Information The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and the requirements of the Securities and Exchange Commission ("SEC") for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2021 or for any other interim period or for any other future year. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC on March 11, 2021 (the “Annual Report”). There are many uncertainties regarding the ongoing coronavirus 2019 (“COVID-19”) pandemic, and the Company is closely monitoring the impact of the pandemic on all aspects of its business, including how it has impacted and may continue to impact the Company’s operations and the operations of its MSP partners and their SMB customers for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns. The governments of many of the countries in which the Company operates have begun easing the earlier measures to control the spread of COVID-19. However, it is not possible at this time to estimate the impact that COVID-19 will continue to have on worldwide economic activity, the Company’s business, and the additional measures that may be taken by governments, businesses and other organizations in response to COVID-19. The Company will continue to assess the evolving impact of the COVID-19 pandemic and will make adjustments to its operations as necessary. Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the accounts of Datto Holding and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain prior years’ amounts have been reclassified to conform to the current year presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the 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, contract balances, contract acquisition costs, allowance for doubtful accounts, reserves for inventory obsolescence, useful lives and recoverability of long-lived assets, income taxes, stock-based compensation and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, including the uncertainty surrounding rapidly changing market and economic conditions from the COVID-19 pandemic. Actual results could materially differ from these estimates. With the exception of the items noted below there have been no material changes to the Company’s significant accounting policies. Foreign Currency Translation The Company’s reporting currency is the U.S. Dollar. The functional currency of the Company's foreign subsidiaries is generally the local currency. Assets and liabilities are translated into U.S. Dollars at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenue, expenses, gains and losses are translated using average exchange rates for the period. Resulting foreign currency translation adjustments are recorded directly within accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other (income) expense, net in the accompanying condensed consolidated statements of operations. The Company recognized immaterial transaction gains for the three months ended March 31, 2021 and transaction losses of $1.8 million for the three months ended March 31, 2020. Cash and Cash Equivalents and Restricted Cash Cash is stated at fair value. As of March 31, 2021 and December 31, 2020, the U.S. dollar value of cash and restricted cash denominated in foreign currencies was $44.3 million and $28.1 million, respectively, and these balances were comprised principally of Euro, Canadian Dollars, British Pounds and Australian Dollars. Cash equivalents consist of short-term, highly liquid investments with an original maturity of three months or earlier. The Company did not hold any cash equivalents as of March 31, 2021 or December 31, 2020. Restricted cash primarily includes amounts held by banks as security related to lease arrangements for office space. 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. 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 partners, as well as the consideration of expected trends based upon characteristics of the accounts receivables and general economic conditions. The Company also considers other specific operational factors which may impact the Company's ability to collect past due amounts, including the impact of COVID-19. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The following table summarizes the activity of the allowance for doubtful accounts (in thousands):. Amount Balance as of December 31, 2020 $ 5,485 Provision for bad debt 1,211 Net reductions and other (542) Balance as of March 31, 2021 $ 6,154 Unbilled accounts receivable are included in the accounts receivable balances and represent revenue earned, but the amount is not contractually billable as of the balance sheet date. The unbilled accounts receivable balance is principally invoiced within the following month. As of March 31, 2021 and December 31, 2020, unbilled accounts receivable was $2.8 million and $3.0 million, respectively. Leases The Company determines if an arrangement is or contains a lease at inception by assessing whether the arrangement contains an identified asset and whether the Company has the right to control the identified asset. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. The Company elected to combine lease and non-lease components for its office and equipment leases. ROU assets are based on the measurement of the lease liability and also include any lease prepayments and any initial direct costs incurred, offset by tenant incentives received by the Company. For leases with an initial term of 12 months or less the Company does not recognize a ROU asset and corresponding lease liability. Rent expense for the Company’s operating leases is recognized on a straight-line basis over the lease term. Generally, the Company’s leases do not provide an implicit interest rate, and therefore the Company uses its incremental borrowing rate based on the estimated rate of interest for a collateralized borrowing over a similar term of the lease payments at the commencement date. The Company considers options to extend or terminate the lease when it is reasonably certain the Company will exercise the option. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842), ("ASC 842"). ASC 842 amends a number of aspects of lease accounting under ASC Topic 840 — Leases (“ASC 840”), including requiring lessees to recognize almost all leases with a term greater than one year as an ROU asset and corresponding lease liability, measured at the present value of the lease payments. ASC 842 provides a number of optional practical expedients in transition. On January 1, 2021, the Company adopted ASC 842 using the modified retrospective approach, and elected the practical expedients to i.) not reassess its prior conclusions about lease identification under the new standard, ii.) not reassess lease classification, and iii.) not reassess initial direct costs. The Company did not elect the practical expedient allowing the use-of-hindsight which would require the Company to reassess the lease term of its leases based on all facts and circumstances through the effective date Upon adoption of ASC 842 the Company recognized operating lease assets of $35.8 million and operating lease liabilities of $46.3 million. Prior period amounts were not restated and are reported in accordance with ASC 840. For a description of the Company’s leases, see Note 6. Leases. Accounting Pronouncements Issued but Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This standard changes the impairment model for most financial assets, including trade receivables and financial instruments and will require the Company to use a forward-looking expected loss method, which may result in earlier recognition of allowances for losses and require expected credit losses to be reflected as allowances rather than reductions in the amortized cost basis of financial assets. For public entities, the standard is currently effective. However, as an EGC, the Company has elected to defer the adoption, so the standard is effective for fiscal years beginning after December 15, 2022, or earlier if the Company (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. The Company is evaluating the impact this guidance will have on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating consolidated income taxes to separate financial statements of entities not subject to income tax. The standard is effective for the Company for fiscal years beginning after December 15, 2021, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact this guidance will have on the Company’s consolidated financial statements.

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2021
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Revenue Recognition Disaggregation of Revenue The following table disaggregates revenue by service (in thousands): Three Months Ended March 31, 2021 Device Professional Subscription Total Timing of revenue recognition: Recognized at a point in time $ 8,385 $ — $ — $ 8,385 Recognized over time — 934 135,590 136,524 Total $ 8,385 $ 934 $ 135,590 $ 144,909 Three Months Ended March 31, 2020 Device Professional Subscription Total Timing of revenue recognition: Recognized at a point in time $ 8,081 $ — $ — $ 8,081 Recognized over time — 587 115,995 116,582 Total $ 8,081 $ 587 $ 115,995 $ 124,663 The following table summarizes sales to customers by geography (in thousands): Three Months Ended March 31, 2021 2020 United States $ 102,042 $ 91,536 International 42,867 33,127 Total $ 144,909 $ 124,663 Revenue by location is determined by the billing address for the customer. Contract Balances Contract assets represent amounts for which the Company has recognized revenue, generally for device sales, pursuant to its revenue recognition policy, for contracts that have not yet been fully invoiced to customers where there is a remaining performance obligation. Contract assets relate to contractual arrangements with both a subscription and a device or professional service performance obligation. Amounts are recorded as a current asset or a non-current asset based on the amounts anticipated to be billed within one year of the balance sheet date. Current contract assets of $8.6 million and $7.7 million were included in prepaid expenses and other current assets as of March 31, 2021 and December 31, 2020, respectively. Non-current contract assets of $8.4 million and $7.9 million were included in other assets as of March 31, 2021 and December 31, 2020, respectively. Contract liabilities consist of customer payments in advance of revenue being recognized. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred revenue, current and the remaining portion is recorded as deferred revenue, noncurrent on the condensed consolidated balance sheets. Deferred revenue as of March 31, 2021 and December 31, 2020, was $25.3 million (of which $3.4 million was classified as non-current) and $27.1 million (of which $3.3 million was classified as non-current), respectively. Contract Acquisition Costs The Company capitalizes commission expenses paid to internal sales personnel for obtaining customer contracts, using a portfolio approach. Contract acquisition costs are included in other assets on the consolidated balance sheets. Contract acquisition costs as of March 31, 2021 and December 31, 2020 were $51.7 million and $48.2 million, respectively. Remaining Performance Obligations Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at March 31, 2021 were approximately $316.2 million, of which approximately 50% are anticipated to be satisfied in the next twelve months, with substantially all performance obligations satisfied within thirty-six months. The amount excludes month-to-month contracts.

Inventory

Inventory	3 Months Ended
	Mar. 31, 2021
Inventory Disclosure [Abstract]
Inventory	Inventory Inventory, net of the reserves for obsolescence, consisted of the following (in thousands): March 31, December 31, Components $ 13,705 $ 8,914 Work in progress 818 580 Finished goods 4,809 4,317 Total inventory $ 19,332 $ 13,811

Property and Equipment, Net

Property and Equipment, Net	3 Months Ended
	Mar. 31, 2021
Property, Plant and Equipment [Abstract]
Property and Equipment, Net	Property and Equipment, Net Property and equipment, net, consisted of the following (in thousands): Estimated March 31, December 31, Servers 3 - 5 $ 104,926 $ 96,048 Leasehold improvements (a) 30,398 32,455 Computer equipment 3 - 5 15,219 14,977 Internally developed software 3 9,156 7,811 Furniture and fixtures 5 6,105 6,305 Purchased software 3 1,004 999 Vehicles 5 136 103 Total property and equipment 166,944 158,698 Less: accumulated depreciation and amortization (71,536) (66,822) Total property and equipment, net $ 95,408 $ 91,876 (a) The shorter of the remaining lease term or useful life. The Company capitalized $1.3 million and $0.5 million of internally developed software costs during the three months ended March 31, 2021 and 2020, respectively. Depreciation expense included in cost of revenue and operating expenses was $5.3 million and $2.2 million, respectively, for the three months ended March 31, 2021, and $3.8 million and $2.5 million, respectively, for the three months ended March 31, 2020.

Leases

Leases	3 Months Ended
	Mar. 31, 2021
Leases [Abstract]
Leases	LeasesThe Company has operating leases, primarily for office space and co-located data centers. The Company’s leases have remaining lease terms which vary, up to approximately 9 years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the leases. These optional periods have not been considered in the determination of the ROU assets or lease liabilities associated with these leases as the Company did not consider it reasonably certain it would exercise the renewal options. For the three months ended March 31, 2021 and 2020, the Company recorded $2.4 million and $2.5 million, respectively, of operating lease costs in the condensed consolidated statements of operations. Variable lease costs, which are comprised primarily of the Company's proportionate share of operating expenses, property taxes, and insurance, were $0.6 million for the three months ended March 31, 2021. Variable lease costs are not included in the measurement of the Company's ROU assets and lease liabilities. Cash paid for amounts related to operating lease liabilities for the three months ended March 31, 2021 was $2.6 million. The following represents the Company's future minimum payments under non-cancelable operating leases as of March 31, 2021 for each of the next five years and thereafter (in thousands): Years Ending Remaining 2021 $ 7,649 2022 9,687 2023 9,928 2024 8,977 2025 5,392 Thereafter 6,726 Total future undiscounted lease payments $ 48,359 Less imputed interest (4,280) Total reported lease liability $ 44,079

Acquisitions

Acquisitions	3 Months Ended
	Mar. 31, 2021
Business Combinations [Abstract]
Acquisitions	Acquisitions In March 2021, the Company acquired BitDam Ltd., an Israel-based cyber threat detection company (“BitDam”). The business combination was accounted for under the acquisition method of accounting. The consideration paid was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date. As of March 31, 2021, the Company has performed a preliminary valuation of the assets acquired and liabilities assumed, including the fair value of acquired intangible assets. The preliminary valuation is subject to adjustment as the Company finalizes the allocation during the measurement period.The preliminary allocation of the purchase consideration is as follows (in thousands): Acquisition of BitDam Assets acquired Other current and noncurrent assets $ 63 Property and equipment 49 Finite lived intangible assets 27,400 Goodwill 23,155 Total assets acquired $ 50,667 Other current and noncurrent liabilities 879 Deferred tax liabilities 4,302 Total liabilities assumed $ 5,181 Purchase consideration, net of cash acquired $ 45,486

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesLiabilities 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	3 Months Ended
	Mar. 31, 2021
Debt Disclosure [Abstract]
Debt	Debt On October 23, 2020, Datto, Inc., as borrower (the “Borrower”), and certain direct and indirect wholly-owned subsidiaries of Datto, entered into a new credit agreement with the lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent (the "2020 Credit Agreement"). The 2020 Credit Agreement is guaranteed by certain direct and indirect subsidiaries of Datto (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 $200.0 million in commitments for revolving credit loans, which may be increased or decreased under specific circumstances, with a $40.0 million letter of credit sublimit and a $100.0 million alternative currency sublimit. In addition, the 2020 Credit Agreement provides for the ability of the Borrower to request term loan facilities. Borrowings pursuant to the 2020 Credit Agreement may be used for working capital and other general corporate purposes, including for acquisitions permitted under the 2020 Credit Agreement, and are scheduled to mature on October 23, 2025. The 2020 Credit Agreement contains certain customary representations and warranties and affirmative and negative covenants. At March 31, 2021, the Company was in compliance with all applicable covenants. The interest rates applicable to the revolving borrowings under the 2020 Credit Agreement, are, at the Borrower’s option, either (i) a base rate, equal to the greater of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.5% or (c) the Adjusted LIBO Rate for a one month Interest Period (each term as defined in the 2020 Credit Agreement) plus 1%, or (ii) the Adjusted LIBO Rate equal to the LIBO Rate for the applicable Interest Period, plus in the case of each of clauses (i) and (ii), the Applicable Rate (as defined in the 2020 Credit Agreement). The Applicable Rate (i) for base rate loans ranges from 0.25% to 1.0% per annum and (ii) for LIBO Rate loans ranges from 1.25% to 2.0% per annum, in each case, based on the Company's Senior Secured Net Leverage Ratio (as defined in the 2020 Credit Agreement). The 2020 Credit Agreement provides for a commitment fee ranging from 0.20% to 0.35% per annum of the average daily undrawn portion of the revolving commitments based on the Company's Senior Secured Net Leverage Ratio (as defined in the 2020 Credit Agreement). As of March 31, 2021 and December 31, 2020, the 2020 Credit Agreement was undrawn, with the exception of $1.9 million of outstanding letters of credit. The Company recorded amortization of the debt issuance costs and original issue discount of $0.1 million and $0.4 million as interest expense during the three months ended March 31, 2021 and 2020, respectively.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2021
Share-based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation The Company has outstanding equity awards under various plans, as described below. Datto 2020 Omnibus Incentive Plan In conjunction with the IPO, on October 20, 2020, the Board adopted the Datto Holding Corp. Omnibus Incentive Plan (the “2020 Plan”) in order to align the interests of the participants with the interests of the Company's stockholders. The 2020 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards and performance awards to employees, consultants, and members of the Board. Authorized shares under the 2020 Plan automatically increase each January 1 by 5% of the outstanding number of shares of the Company's common stock on the immediately preceding December 31st, or such lesser number of shares as determined by the Board. See below for a reconciliation of shares of the Company’s common stock reserved for issuance under the 2020 Plan. Under the 2020 Plan, 919,775 RSUs and 10,000 stock options were outstanding as of March 31, 2021. 2017 Stock Option Plan In December 2017, the Company adopted the 2017 Stock Option Plan (the “2017 Plan”), as amended, which provides for grants of stock options to employees, directors, officers, and consultants. As of March 31, 2021, 9,089,564 stock options were outstanding under the 2017 Plan. No additional awards may be issued under the 2017 Plan. Other Equity Plans The Company also has outstanding options which were issued under the Autotask Superior Holdings 2013 Stock Option Plan (the “Autotask Plan”). As of March 31, 2021, 375,623 fully-vested stock options were outstanding under the Autotask Plan. No additional awards may be issued under the Autotask Plan. In addition, the Company has two other plans, which were adopted in relation to grants to independent members of the Board, prior to the adoption of the 2020 Plan. As of March 31, 2021, 23,438 RSUs were outstanding and no additional awards may be issued under these plans. Stock Options The following table summarizes stock option activity related to all plans during the three months ended March 31, 2021 (in thousands, except share and per share amounts): Number of Weighted Weighted Aggregate Options outstanding at December 31, 2020 9,555,082 $ 10.49 7.5 $ 157,800 Options granted 10,000 $ 25.23 Options exercised (19,476) $ 8.64 Options forfeited & expired (70,419) $ 11.33 Options outstanding at March 31, 2021 9,475,187 $ 10.50 7.7 $ 117,627 Options vested and exercisable at March 31, 2021 5,029,283 $ 9.87 7.3 $ 65,595 The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2021 and 2020 was $0.3 million and $1.2 million, respectively. The weighted average fair value of options granted to purchase common stock during the three months ended March 31, 2021 was $14.83. As of March 31, 2021, unrecognized compensation expense related to outstanding stock options was $41.8 million, which is expected to be recognized over the remaining weighted average term of 2.0 years. Restricted Stock Units The following table summarizes RSU activity under all plans during the three months ended March 31, 2021: Number of Weighted RSUs outstanding at December 31, 2020 696,338 $ 26.73 RSUs granted 253,050 $ 25.23 RSUs vested (2,675) $ 26.70 RSUs forfeited (3,500) $ 26.36 RSUs outstanding at March 31, 2021 943,213 $ 26.33 As of March 31, 2021, unrecognized compensation expense related to outstanding RSUs was $22.4 million, which is expected to be recognized over the remaining weighted average term of 3.6 years. Shares Available for Future Grants The following table summarizes the shares available for future grants under the 2020 Plan: Shares Balance at December 31, 2020 20,195,974 Annual authorization increase 8,071,001 Options and RSUs granted (263,050) Options and RSUs forfeited or expired 4,384 Balance at March 31, 2021 28,008,309 Stock-Based Compensation Expense Stock-based compensation expense for the three months ended March 31, 2021 and 2020 was as follows (in thousands): Three Months Ended March 31, 2021 2020 Cost of revenue—subscription $ 1,228 $ 20 Cost of revenue—device 62 — Cost of revenue—professional services and other 103 — Sales and marketing 2,295 644 Research and development 4,874 310 General and administrative 2,949 940 Total stock-based compensation expense $ 11,511 $ 1,914

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesThe Company incurred a provision for income tax of $5.4 million and a benefit from income tax of $1.8 million for the three months ended March 31, 2021 and 2020, respectively. The effective tax rate for the three months ended March 31, 2021 was 26.1%, which is higher than the U.S. statutory tax rate as a result of state taxes and the impact of taxes in foreign jurisdictions, partially offset by the impact of income tax credits and other matters.

Net Income per Share

Net Income per Share	3 Months Ended
	Mar. 31, 2021
Earnings Per Share [Abstract]
Net Income per Share	Net Income per Share 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 during the period. Diluted net income per share attributable to common stockholders is calculated by giving effect to all potential shares of common stock, including the Company's outstanding stock options and common stock related to unvested RSUs, to the extent such potential shares are dilutive. For the purpose of computing diluted earnings per share, options with a performance-based vesting condition are considered contingently issuable, and such contingent shares are included in the denominator for computing diluted net income per share only once the performance condition is met, and only to the extent such options are dilutive. As described in Note 10. Stock-Based Compensation, the IPO Contingent Options contained a performance-vesting condition, and were only considered in computing diluted net income per share after the IPO in October of 2020. The calculation of basic and diluted income per share is as follows (in thousands, except share and per share amounts): Three Months Ended March 31, 2021 2020 Numerator: Net income attributable to common stockholders $ 15,286 $ 1,353 Denominator: Weighted-average shares used in computing net income per share attributable to common stockholders Basic 161,066,404 135,386,420 Total dilutive effect of outstanding equity awards 3,667,998 882,293 Diluted 164,734,402 136,268,713 Net income per share attributable to common stockholders Basic $ 0.09 $ 0.01 Diluted $ 0.09 $ 0.01 For the three month periods ended March 31, 2021 and 2020 there were 634,330 and 1,869,333, respectively, of weighted-average outstanding shares of options excluded from the computation of diluted net income per share attributable to common stockholders for the period presented because including them would have been antidilutive.

Significant Accounting Polici_2

Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2021
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the accounts of Datto Holding and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Reclassified	Certain prior years’ amounts have been reclassified to conform to the current year presentation.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the 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, contract balances, contract acquisition costs, allowance for doubtful accounts, reserves for inventory obsolescence, useful lives and recoverability of long-lived assets, income taxes, stock-based compensation and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, including the uncertainty surrounding rapidly changing market and economic conditions from the COVID-19 pandemic. Actual results could materially differ from these estimates. With the exception of the items noted below there have been no material changes to the Company’s significant accounting policies.
Foreign Currency Translation	Foreign Currency Translation The Company’s reporting currency is the U.S. Dollar. The functional currency of the Company's foreign subsidiaries is generally the local currency. Assets and liabilities are translated into U.S. Dollars at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenue, expenses, gains and losses are translated using average exchange rates for the period. Resulting foreign currency translation adjustments are recorded directly within accumulated other comprehensive income (loss), a separate component of stockholders’ equity.
Cash and Cash Equivalents and Restricted Cash	Cash and Cash Equivalents and Restricted Cash Cash is stated at fair value. As of March 31, 2021 and December 31, 2020, the U.S. dollar value of cash and restricted cash denominated in foreign currencies was $44.3 million and $28.1 million, respectively, and these balances were comprised principally of Euro, Canadian Dollars, British Pounds and Australian Dollars. Cash equivalents consist of short-term, highly liquid investments with an original maturity of three months or earlier. The Company did not hold any cash equivalents as of March 31, 2021 or December 31, 2020. Restricted cash primarily includes amounts held by banks as security related to lease arrangements for office space.
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. 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 partners, as well as the consideration of expected trends based upon characteristics of the accounts receivables and general economic conditions. The Company also considers other specific operational factors which may impact the Company's ability to collect past due amounts, including the impact of COVID-19. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
Leases	Leases The Company determines if an arrangement is or contains a lease at inception by assessing whether the arrangement contains an identified asset and whether the Company has the right to control the identified asset. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. The Company elected to combine lease and non-lease components for its office and equipment leases. ROU assets are based on the measurement of the lease liability and also include any lease prepayments and any initial direct costs incurred, offset by tenant incentives received by the Company. For leases with an initial term of 12 months or less the Company does not recognize a ROU asset and corresponding lease liability. Rent expense for the Company’s operating leases is recognized on a straight-line basis over the lease term.
Recently Adopted Accounting Pronouncements and Accounting Pronouncements Issued but Not Yet Adopted	Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842), ("ASC 842"). ASC 842 amends a number of aspects of lease accounting under ASC Topic 840 — Leases (“ASC 840”), including requiring lessees to recognize almost all leases with a term greater than one year as an ROU asset and corresponding lease liability, measured at the present value of the lease payments. ASC 842 provides a number of optional practical expedients in transition. On January 1, 2021, the Company adopted ASC 842 using the modified retrospective approach, and elected the practical expedients to i.) not reassess its prior conclusions about lease identification under the new standard, ii.) not reassess lease classification, and iii.) not reassess initial direct costs. The Company did not elect the practical expedient allowing the use-of-hindsight which would require the Company to reassess the lease term of its leases based on all facts and circumstances through the effective date Upon adoption of ASC 842 the Company recognized operating lease assets of $35.8 million and operating lease liabilities of $46.3 million. Prior period amounts were not restated and are reported in accordance with ASC 840. For a description of the Company’s leases, see Note 6. Leases. Accounting Pronouncements Issued but Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This standard changes the impairment model for most financial assets, including trade receivables and financial instruments and will require the Company to use a forward-looking expected loss method, which may result in earlier recognition of allowances for losses and require expected credit losses to be reflected as allowances rather than reductions in the amortized cost basis of financial assets. For public entities, the standard is currently effective. However, as an EGC, the Company has elected to defer the adoption, so the standard is effective for fiscal years beginning after December 15, 2022, or earlier if the Company (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. The Company is evaluating the impact this guidance will have on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating consolidated income taxes to separate financial statements of entities not subject to income tax. The standard is effective for the Company for fiscal years beginning after December 15, 2021, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact this guidance will have on the Company’s consolidated financial statements.
Net Income per Share	Net Income per ShareBasic 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 during the period. Diluted net income per share attributable to common stockholders is calculated by giving effect to all potential shares of common stock, including the Company's outstanding stock options and common stock related to unvested RSUs, to the extent such potential shares are dilutive. For the purpose of computing diluted earnings per share, options with a performance-based vesting condition are considered contingently issuable, and such contingent shares are included in the denominator for computing diluted net income per share only once the performance condition is met, and only to the extent such options are dilutive.

Significant Accounting Polici_3

Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2021
Accounting Policies [Abstract]
Summary of Allowance for Doubtful Accounts	The following table summarizes the activity of the allowance for doubtful accounts (in thousands):. Amount Balance as of December 31, 2020 $ 5,485 Provision for bad debt 1,211 Net reductions and other (542) Balance as of March 31, 2021 $ 6,154

Revenue Recognition (Tables)

Revenue Recognition (Tables)	3 Months Ended
	Mar. 31, 2021
Revenue from Contract with Customer [Abstract]
Summary of Disaggregation Revenue	The following table disaggregates revenue by service (in thousands): Three Months Ended March 31, 2021 Device Professional Subscription Total Timing of revenue recognition: Recognized at a point in time $ 8,385 $ — $ — $ 8,385 Recognized over time — 934 135,590 136,524 Total $ 8,385 $ 934 $ 135,590 $ 144,909 Three Months Ended March 31, 2020 Device Professional Subscription Total Timing of revenue recognition: Recognized at a point in time $ 8,081 $ — $ — $ 8,081 Recognized over time — 587 115,995 116,582 Total $ 8,081 $ 587 $ 115,995 $ 124,663
Summary of Disaggregation Revenue By Geography	The following table summarizes sales to customers by geography (in thousands): Three Months Ended March 31, 2021 2020 United States $ 102,042 $ 91,536 International 42,867 33,127 Total $ 144,909 $ 124,663

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Mar. 31, 2021
Inventory Disclosure [Abstract]
Summary of Composition of Inventories	Inventory, net of the reserves for obsolescence, consisted of the following (in thousands): March 31, December 31, Components $ 13,705 $ 8,914 Work in progress 818 580 Finished goods 4,809 4,317 Total inventory $ 19,332 $ 13,811

Property and Equipment, Net (Ta

Property and Equipment, Net (Tables)	3 Months Ended
	Mar. 31, 2021
Property, Plant and Equipment [Abstract]
Summary of Property and Equipment, Net	Property and equipment, net, consisted of the following (in thousands): Estimated March 31, December 31, Servers 3 - 5 $ 104,926 $ 96,048 Leasehold improvements (a) 30,398 32,455 Computer equipment 3 - 5 15,219 14,977 Internally developed software 3 9,156 7,811 Furniture and fixtures 5 6,105 6,305 Purchased software 3 1,004 999 Vehicles 5 136 103 Total property and equipment 166,944 158,698 Less: accumulated depreciation and amortization (71,536) (66,822) Total property and equipment, net $ 95,408 $ 91,876 (a) The shorter of the remaining lease term or useful life.

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2021
Leases [Abstract]
Schedule of Future Minimum Payments Under Non-Cancelable Operating Leases	The following represents the Company's future minimum payments under non-cancelable operating leases as of March 31, 2021 for each of the next five years and thereafter (in thousands): Years Ending Remaining 2021 $ 7,649 2022 9,687 2023 9,928 2024 8,977 2025 5,392 Thereafter 6,726 Total future undiscounted lease payments $ 48,359 Less imputed interest (4,280) Total reported lease liability $ 44,079

Acquisitions (Tables)

Acquisitions (Tables)	3 Months Ended
	Mar. 31, 2021
Business Combinations [Abstract]
Schedule of Business Acquisition	The preliminary valuation is subject to adjustment as the Company finalizes the allocation during the measurement period.The preliminary allocation of the purchase consideration is as follows (in thousands): Acquisition of BitDam Assets acquired Other current and noncurrent assets $ 63 Property and equipment 49 Finite lived intangible assets 27,400 Goodwill 23,155 Total assets acquired $ 50,667 Other current and noncurrent liabilities 879 Deferred tax liabilities 4,302 Total liabilities assumed $ 5,181 Purchase consideration, net of cash acquired $ 45,486

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2021
Share-based Payment Arrangement [Abstract]
Summary of Stock Option Activity	The following table summarizes stock option activity related to all plans during the three months ended March 31, 2021 (in thousands, except share and per share amounts): Number of Weighted Weighted Aggregate Options outstanding at December 31, 2020 9,555,082 $ 10.49 7.5 $ 157,800 Options granted 10,000 $ 25.23 Options exercised (19,476) $ 8.64 Options forfeited & expired (70,419) $ 11.33 Options outstanding at March 31, 2021 9,475,187 $ 10.50 7.7 $ 117,627 Options vested and exercisable at March 31, 2021 5,029,283 $ 9.87 7.3 $ 65,595
Schedule of RSU Activity	The following table summarizes RSU activity under all plans during the three months ended March 31, 2021: Number of Weighted RSUs outstanding at December 31, 2020 696,338 $ 26.73 RSUs granted 253,050 $ 25.23 RSUs vested (2,675) $ 26.70 RSUs forfeited (3,500) $ 26.36 RSUs outstanding at March 31, 2021 943,213 $ 26.33
Summary of the Options Available for Future Grants	The following table summarizes the shares available for future grants under the 2020 Plan: Shares Balance at December 31, 2020 20,195,974 Annual authorization increase 8,071,001 Options and RSUs granted (263,050) Options and RSUs forfeited or expired 4,384 Balance at March 31, 2021 28,008,309
Summary of Stock-based Compensation Expense	Stock-based compensation expense for the three months ended March 31, 2021 and 2020 was as follows (in thousands): Three Months Ended March 31, 2021 2020 Cost of revenue—subscription $ 1,228 $ 20 Cost of revenue—device 62 — Cost of revenue—professional services and other 103 — Sales and marketing 2,295 644 Research and development 4,874 310 General and administrative 2,949 940 Total stock-based compensation expense $ 11,511 $ 1,914

Net Income per Share (Tables)

Net Income per Share (Tables)	3 Months Ended
	Mar. 31, 2021
Earnings Per Share [Abstract]
Summary of Net Income (Loss) per Share	The calculation of basic and diluted income per share is as follows (in thousands, except share and per share amounts): Three Months Ended March 31, 2021 2020 Numerator: Net income attributable to common stockholders $ 15,286 $ 1,353 Denominator: Weighted-average shares used in computing net income per share attributable to common stockholders Basic 161,066,404 135,386,420 Total dilutive effect of outstanding equity awards 3,667,998 882,293 Diluted 164,734,402 136,268,713 Net income per share attributable to common stockholders Basic $ 0.09 $ 0.01 Diluted $ 0.09 $ 0.01

Business - Additional informati

Business - Additional information (Detail) - USD ($) $ / shares in Units, $ in Thousands	Nov. 03, 2020	Oct. 23, 2020	Mar. 31, 2021	Mar. 31, 2020
Nature Of Business [Line Items]
Payments of stock issuance costs			$ 414	$ 724
Merrit Holdco
Nature Of Business [Line Items]
Ownership percentage			100.00%
Datto, Inc. | Merrit Holdco
Nature Of Business [Line Items]
Ownership percentage			100.00%
2020 Credit Agreement
Nature Of Business [Line Items]
Payments related to debt issuance costs		$ 1,200
Term Loan Facility | 2019 Credit Agreement
Nature Of Business [Line Items]
Repayments of debt		$ 590,200
Vista
Nature Of Business [Line Items]
Entity ownership percentage by parent			70.60%
IPO
Nature Of Business [Line Items]
Stock issued during the period shares	3,300,000	22,000,000
Shares issued price per share	$ 27	$ 27
Proceeds from sale of stock	$ 83,600	$ 558,000
Payments of stock issuance costs		$ 5,300

Significant Accounting Polici_4

Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2021	Jan. 01, 2021	Dec. 31, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Unbilled accounts receivable current		$ 2,800		$ 3,000
Operating lease assets		33,881		0
Operating lease liabilities		44,079
Operating lease liabilities, current		8,800
Operating lease liabilities, noncurrent		35,303		0
Foreign Currency Transaction Gain (Loss), Unrealized	$ 1,800
International
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cash and restricted cash		$ 44,300		$ 28,100
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets			$ 35,800
Operating lease liabilities			$ 46,300

Significant Accounting Polici_5

Significant Accounting Policies - Summary of Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Accounting Policies [Abstract]
Balance as of December 31, 2020	$ 5,485
Provision for bad debt	1,211	$ 799
Net reductions and other	(542)
Balance as of March 31, 2021	$ 6,154

Revenue Recognition - Disaggreg

Revenue Recognition - Disaggregation Revenue by Service (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Revenue	$ 144,909	$ 124,663
Recognized at a point in time
Disaggregation of Revenue [Line Items]
Revenue	8,385	8,081
Recognized over time
Disaggregation of Revenue [Line Items]
Revenue	136,524	116,582
Device
Disaggregation of Revenue [Line Items]
Revenue	8,385	8,081
Device | Recognized at a point in time
Disaggregation of Revenue [Line Items]
Revenue	8,385	8,081
Device | Recognized over time
Disaggregation of Revenue [Line Items]
Revenue	0	0
Professional Services
Disaggregation of Revenue [Line Items]
Revenue	934	587
Professional Services | Recognized at a point in time
Disaggregation of Revenue [Line Items]
Revenue	0	0
Professional Services | Recognized over time
Disaggregation of Revenue [Line Items]
Revenue	934	587
Subscription
Disaggregation of Revenue [Line Items]
Revenue	135,590	115,995
Subscription | Recognized at a point in time
Disaggregation of Revenue [Line Items]
Revenue	0	0
Subscription | Recognized over time
Disaggregation of Revenue [Line Items]
Revenue	$ 135,590	$ 115,995

Revenue Recognition - Disaggr_2

Revenue Recognition - Disaggregation Revenue By Geography (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Revenue	$ 144,909	$ 124,663
United States
Disaggregation of Revenue [Line Items]
Revenue	102,042	91,536
International
Disaggregation of Revenue [Line Items]
Revenue	$ 42,867	$ 33,127

Revenue Recognition - Additiona

Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Contract with customer, asset, current	$ 8,600	$ 7,700
Contract with customer, asset, non current	8,400	7,900
Contract with customer, liability	25,300	27,100
Contract with customer, liability, noncurrent	3,423	3,322
Contract acquisition costs	$ 51,700	$ 48,200

Revenue Recognition - Remaining

Revenue Recognition - Remaining Performance Obligations (Detail) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 $ in Millions	Mar. 31, 2021USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining unsatisfied performance obligations	$ 316.2
Remaining unsatisfied performance obligation, period	12 months
Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining unsatisfied performance obligations, percentage	50.00%

Inventory - Summary of Composit

Inventory - Summary of Composition of Inventories (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Components	$ 13,705	$ 8,914
Work in progress	818	580
Finished goods	4,809	4,317
Total inventory	$ 19,332	$ 13,811

Property and Equipment, Net - S

Property and Equipment, Net - Summary of Property and Equipment, Net (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 166,944	$ 158,698
Less: accumulated depreciation and amortization	(71,536)	(66,822)
Total property and equipment, net	95,408	91,876
Servers
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 104,926	96,048
Servers | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (in Years)	3 years
Servers | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (in Years)	5 years
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 30,398	32,455
Computer equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 15,219	14,977
Computer equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (in Years)	3 years
Computer equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (in Years)	5 years
Internally developed software
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 9,156	7,811
Estimated Useful Life (in Years)	3 years
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 6,105	6,305
Estimated Useful Life (in Years)	5 years
Purchased software
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 1,004	999
Estimated Useful Life (in Years)	3 years
Vehicles
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 136	$ 103
Estimated Useful Life (in Years)	5 years

Property and Equipment, Net - A

Property and Equipment, Net - Additional information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Property, Plant and Equipment [Abstract]
Capitalization of internally developed software costs	$ 1.3	$ 0.5
Depreciation, cost of revenue	5.3	3.8
Depreciation, operating expense	$ 2.2	$ 2.5

Leases - Additional Information

Leases - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Leases [Abstract]
Remaining lease terms (years)	9 years
Operating lease costs	$ 2,400	$ 2,500
Variable lease costs	600
Operating cash flows from operating leases	$ 2,600
Weighted average remaining lease term (years)	5 years 3 months 18 days
Weighted average discount rate, percent	3.30%
Right-of-use assets	$ 33,881		$ 0
Operating lease liabilities, current	8,800
Operating lease liabilities, noncurrent	$ 35,303		$ 0

Leases - Future Minimum Payment

Leases - Future Minimum Payments Under Non-Cancelable Operating Leases (Details) $ in Thousands	Mar. 31, 2021USD ($)
Leases [Abstract]
Remaining 2021	$ 7,649
2022	9,687
2023	9,928
2024	8,977
2025	5,392
Thereafter	6,726
Total future undiscounted lease payments	48,359
Less imputed interest	(4,280)
Total reported lease liability	$ 44,079

Acquisitions - Business Acquisi

Acquisitions - Business Acquisitions (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Business Combination, Provisional Information [Abstract]
Goodwill	$ 1,143,796	$ 1,120,954
BitDam
Business Combination, Provisional Information [Abstract]
Other current and noncurrent assets	63
Property and equipment	49
Finite lived intangible assets	27,400
Goodwill	23,155
Total assets acquired	50,667
Other current and noncurrent liabilities	879
Deferred tax liabilities	4,302
Total liabilities assumed	5,181
Purchase consideration, net of cash acquired	$ 45,486

Acquisitions - Additional Infor

Acquisitions - Additional Information (Details) $ in Millions	Mar. 31, 2021USD ($)
Business Combinations [Abstract]
Costs incurred	$ 0.8

Debt (Detail)

Debt (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Oct. 23, 2020
Line of Credit Facility [Line Items]
Amortization of debt issuance costs	$ 100,000	$ 400,000
2020 Credit Agreement | Minimum
Line of Credit Facility [Line Items]
Commitment fee, percent	0.20%
2020 Credit Agreement | Maximum
Line of Credit Facility [Line Items]
Commitment fee, percent	0.35%
2020 Credit Agreement | Federal Funds Effective Rate
Line of Credit Facility [Line Items]
Interest rate, percent	0.50%
2020 Credit Agreement | LIBOR
Line of Credit Facility [Line Items]
Interest rate, percent	1.00%
2020 Credit Agreement | LIBOR | Minimum
Line of Credit Facility [Line Items]
Interest rate, percent	1.25%
2020 Credit Agreement | LIBOR | Maximum
Line of Credit Facility [Line Items]
Interest rate, percent	2.00%
2020 Credit Agreement | Base Rate | Minimum
Line of Credit Facility [Line Items]
Interest rate, percent	0.25%
2020 Credit Agreement | Base Rate | Maximum
Line of Credit Facility [Line Items]
Interest rate, percent	1.00%
Revolving Credit Facility | 2020 Credit Agreement
Line of Credit Facility [Line Items]
Line of credit maximum borrowing capacity				$ 200,000,000
Letters of credit	$ 1,900,000		$ 1,900,000
Revolving Credit Facility | 2019 Credit Agreement
Line of Credit Facility [Line Items]
Line of credit maximum borrowing capacity				50,000,000
Letter of Credit | 2020 Credit Agreement
Line of Credit Facility [Line Items]
Line of credit maximum borrowing capacity				40,000,000
Alternative Currency | 2020 Credit Agreement
Line of Credit Facility [Line Items]
Line of credit maximum borrowing capacity				100,000,000
Term Loan Facility | 2019 Credit Agreement
Line of Credit Facility [Line Items]
Debt instrument, face amount				$ 550,000,000

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2021USD ($)stockOptionPlan$ / sharesshares	Mar. 31, 2020USD ($)	Dec. 31, 2020shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)	9,475,187		9,555,082
Aggregate intrinsic value of stock options exercised | $	$ 0.3	$ 1.2
Weighted average fair value of options granted (in usd per share) | $ / shares	$ 14.83
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $	$ 41.8
Recognized over the remaining weighted-average vesting term (years)	2 years
2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized, annual increase, percentage	5.00%
Restricted stock, units outstanding (in shares)	919,775
Options outstanding (in shares)	10,000
2017 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)	9,089,564
Autotask Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock, units outstanding (in shares)	375,623
Stock Option Plans Prior to 2020 Plan Adoption
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock, units outstanding (in shares)	23,438
Number of stock option plans | stockOptionPlan	2
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense | $	$ 22.4
Recognized over the remaining weighted-average vesting term (years)	3 years 7 months 6 days

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Number of Shares
Options outstanding at December 31, 2020 (in shares)	9,555,082
Options granted (in shares)	10,000
Options exercised (in shares)	(19,476)
Options forfeited & expired (in shares)	(70,419)
Options outstanding at March 31, 2021 (in shares)	9,475,187	9,555,082
Options vested and exercisable (in shares)	5,029,283
Weighted Average Exercise Price
Options outstanding at December 31, 2020 (in usd per share)	$ 10.49
Options granted (in usd per share)	25.23
Options exercised (in usd per share)	8.64
Options forfeited & expired (in usd per share)	11.33
Options outstanding at March 31, 2021 (in usd per share)	10.50	$ 10.49
Options vested and exercisable (in usd per share)	$ 9.87
Weighted Average Remaining Contractual Life (Years), Options outstanding	7 years 8 months 12 days	7 years 6 months
Weighted Average Remaining Contractual Life (Years), Options vested and exercisable	7 years 3 months 18 days
Aggregate Intrinsic Value, Options outstanding	$ 117,627	$ 157,800
Aggregate Intrinsic Value, Options vested and exercisable	$ 65,595

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock Units Activity (Detail) - Restricted Stock Units	3 Months Ended
	Mar. 31, 2021$ / sharesshares
Number of Shares
RSUs outstanding at December 31, 2020 (in shares) | shares	696,338
RSUs granted (in shares) | shares	253,050
RSUs vested (in shares) | shares	(2,675)
RSUs forfeited (in shares) | shares	(3,500)
RSUs outstanding at March 31, 2021 (in shares) | shares	943,213
Weighted Average Grant Date Fair Value
RSUs outstanding at December 31, 2020 (in usd per share) | $ / shares	$ 26.73
RSUs granted (in usd per share) | $ / shares	25.23
RSUs vested (in usd per share) | $ / shares	26.70
RSUs forfeited (in usd per share) | $ / shares	26.36
RSUs outstanding at March 31, 2021 (in usd per share) | $ / shares	$ 26.33

Stock-Based Compensation - Opti

Stock-Based Compensation - Options Available For Future Grants (Detail) - 2020 Plan	3 Months Ended
	Mar. 31, 2021shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Balance at December 31, 2020	20,195,974
Annual authorization increase (in shares)	8,071,001
Options and RSUs granted (in shares)	(263,050)
Options and RSUs forfeited, expired and repurchased (in shares)	4,384
Balance at March 31, 2021	28,008,309

Stock-Based Compensation - St_2

Stock-Based Compensation - Stock-based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 11,511	$ 1,914
Cost of revenue | Subscription
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	1,228	20
Cost of revenue | Device
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	62	0
Cost of revenue | Professional services and other
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	103	0
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	2,295	644
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	4,874	310
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 2,949	$ 940

Income Taxes (Detail)

Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Tax Disclosure [Abstract]
(Provision for) benefit from income taxes	$ (5,394)	$ 1,831
Effective tax rate	(26.10%)

Net Income per Share - Summary

Net Income per Share - Summary of Net Income (Loss) per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Numerator:
Net income attributable to common stockholders	$ 15,286	$ 1,353
Weighted-average shares used in computing net income per share attributable to common stockholders
Basic (in shares)	161,066,404	135,386,420
Total dilutive effect of outstanding equity awards (in shares)	3,667,998	882,293
Diluted (in shares)	164,734,402	136,268,713
Net income per share attributable to common stockholders
Basic (in usd per share)	$ 0.09	$ 0.01
Diluted (in usd per share)	$ 0.09	$ 0.01

Net Income per Share - Addition

Net Income per Share - Additional Information (Detail) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share	634,330	1,869,333