Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2022 shares | |
Entity Addresses [Line Items] | |
Entity Registrant Name | monday.com Ltd. |
Entity Central Index Key | 0001845338 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2022 |
Document Type | 20-F |
Document Registration Statement | false |
Entity File Number | 001-40461 |
Entity Address, Address Line One | 6 Yitzhak Sadeh Street |
Entity Address, Postal Zip Code | 6777506 |
Entity Address, Country | IL |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 47,737,868 |
Entity Shell Company | false |
Auditor Name | Brightman Almagor Zohar & Co. |
Auditor Location | Tel Aviv, Israel |
Auditor Firm ID | 1197 |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Incorporation, State or Country Code | IL |
Entity Address, City or Town | Tel Aviv |
Title of 12(b) Security | Ordinary shares |
Trading Symbol | MNDY |
Security Exchange Name | NASDAQ |
ICFR Auditor Attestation Flag | true |
Document Accounting Standard | U.S. GAAP |
Business Contact [Member] | |
Entity Addresses [Line Items] | |
Entity Address, Address Line One | 6 Yitzhak Sadeh Street |
Entity Address, Postal Zip Code | 6777506 |
Entity Address, Country | IL |
Entity Address, City or Town | Tel Aviv |
Contact Personnel Name | Shiran Nawi, Adv. |
City Area Code | 972 |
Local Phone Number | (55) 939-7720 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 885,894 | $ 886,812 |
Accounts receivable - net of allowance for doubtful accounts of $408 and $249, as of December 31, 2022, and 2021, respectively | 13,226 | 8,509 |
Prepaid expenses and other current assets | 24,725 | 18,172 |
Total current assets | 923,845 | 913,493 |
Property and equipment, net | 34,416 | 19,599 |
Operating lease right-of-use assets | 80,197 | 0 |
Other long-term assets | 585 | 100 |
Total assets | 1,039,043 | 933,192 |
CURRENT LIABILITIES: | ||
Accounts payable | 7,335 | 23,612 |
Accrued expenses and other current liabilities | 73,706 | 70,135 |
Deferred revenue | 198,099 | 134,438 |
Operating lease liabilities, current | 19,083 | 0 |
Total current liabilities | 298,223 | 228,185 |
Operating lease liabilities, non-current | 58,638 | 0 |
Deferred revenue, non-current | 2,442 | 1,612 |
Total liabilities | 359,303 | 229,797 |
COMMITMENTS AND CONTINGENCIES (NOTE 10) | ||
SHAREHOLDERS' EQUITY: | ||
Ordinary shares, no par value – Authorized: 99,999,999 as of December 31, 2022, and 2021; Issued and Outstanding: 47,737,868 and 44,924,039 as of December 31, 2022, and 2021 respectively | 0 | 0 |
Founders’ shares, no par value: Authorized: 1 share as of December 31, 2022, and 2021; Issued and Outstanding: 1 share as of December 31, 2022, and 2021 | 0 | 0 |
Accumulated other comprehensive income (loss) | (3,210) | 594 |
Additional paid-in capital | 1,265,477 | 1,148,461 |
Accumulated deficit | (582,527) | (445,660) |
Total shareholders’ equity | 679,740 | 703,395 |
Total liabilities, and shareholders’ equity | $ 1,039,043 | $ 933,192 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICALS) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts receivable - net of allowance for doubtful accounts | $ 408 | $ 249 |
Common Stock, No Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | 99,999,999 | 99,999,999 |
Common Stock, Shares, Issued | 47,737,868 | 44,924,039 |
Common Stock, Shares, Outstanding | 47,737,868 | 44,924,039 |
Founder Share, No Par Value | $ 0 | $ 0 |
Founder Shares, Authorized | 1 | 1 |
Founder Shares, Issued | 1 | 1 |
Founder Shares, Outstanding | 1 | 1 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenue | $ 519,029 | $ 308,150 | $ 161,123 |
Cost of revenue | 66,528 | 39,013 | 22,488 |
Gross profit | 452,501 | 269,137 | 138,635 |
OPERATING EXPENSES | |||
Research and development | 127,047 | 73,686 | 43,480 |
Sales and marketing | 392,068 | 268,083 | 191,353 |
General and administrative | 85,401 | 53,493 | 54,339 |
Total operating expenses | 604,516 | 395,262 | 289,172 |
Operating loss | (152,015) | (126,125) | (150,537) |
Financial income (expenses), net | 22,554 | (838) | 526 |
Loss before income taxes | (129,461) | (126,963) | (150,011) |
Taxes on income | (7,406) | (2,331) | (2,192) |
Net loss | $ (136,867) | $ (129,294) | $ (152,203) |
Net loss per share attributable to ordinary shareholders’, basic | $ (2.99) | $ (4.53) | $ (14.19) |
Net loss per share attributable to ordinary shareholders’, diluted | $ (2.99) | $ (4.53) | $ (14.19) |
Weighted-average ordinary shares used in calculating net loss per ordinary share, basic | 45,804,714 | 30,332,006 | 12,048,909 |
Weighted-average ordinary shares used in calculating net loss per ordinary share, diluted | 45,804,714 | 30,332,006 | 12,048,909 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Statement of Comprehensive Income [Abstract] | |||||
Net loss | $ (136,867) | $ (129,294) | $ (152,203) | ||
Other comprehensive income (loss): | |||||
Unrealized gains (losses) arising during the period | (11,386) | 953 | 0 | ||
Gains (losses) reclassified into earnings, net of tax | 7,582 | [1] | (359) | [1] | 0 |
Net current-period other comprehensive income (loss) | (3,804) | 594 | 0 | ||
Comprehensive loss | $ (140,671) | $ (128,700) | $ (152,203) | ||
[1]Classified in operating expenses in the Consolidated Statement of Operations. |
CONSOLIDATED STATEMENTS OF CONV
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Convertible Preferred Shares | Number of Ordinary Shares | Number of Founder Share | Additional Paid-in Capital | Accumulated Other Comprehensive Income (loss) | [1] | Accumulated Deficit | Total | |
Preferred Stock, Value, Beginning Balance at Dec. 31, 2019 | $ 233,496 | ||||||||
Preferred Stock, Shares, Beginning Balance at Dec. 31, 2019 | 26,440,239 | ||||||||
Balance at Dec. 31, 2019 | $ 33,542 | $ 0 | $ (164,163) | $ (130,621) | |||||
Balance, shares at Dec. 31, 2019 | 11,772,038 | 0 | |||||||
Exercise of options | $ 0 | 542 | 0 | 0 | 542 | ||||
Exercise of options (in shares) | 0 | 582,433 | 0 | ||||||
Share-based compensation | $ 0 | 64,725 | 0 | 0 | 64,725 | ||||
Net loss | 0 | 0 | 0 | (152,203) | (152,203) | ||||
Balance at Dec. 31, 2020 | 98,809 | 0 | (316,366) | (217,557) | |||||
Balance, shares at Dec. 31, 2020 | 12,354,471 | 0 | |||||||
Preferred Stock, Value, Ending Balance at Dec. 31, 2020 | $ 233,496 | ||||||||
Preferred Stock, Shares, Ending Balance at Dec. 31, 2020 | 26,440,239 | ||||||||
Exercise of options | $ 0 | 5,249 | 0 | 0 | 5,249 | ||||
Exercise of options (in shares) | 0 | 1,090,670 | 0 | ||||||
Issuance of ordinary shares upon the vesting and settlement of restricted stock units | $ 0 | ||||||||
Issuance of ordinary shares upon the vesting and settlement of restricted stock units | 0 | 0 | 0 | 0 | |||||
Issuance of ordinary shares upon the vesting and settlement of restricted stock units (in shares) | 0 | ||||||||
Issuance of ordinary shares upon the vesting and settlement of restricted stock units (in shares) | 917 | 0 | |||||||
Conversion of convertible preferred shares to ordinary shares in connection with Initial Public Offering (IPO) | $ (233,496) | ||||||||
Conversion of convertible preferred shares to ordinary shares in connection with Initial Public Offering (IPO) (in shares) | (26,440,239) | ||||||||
Conversion of convertible preferred shares to ordinary shares in connection with Initial Public Offering (IPO) | 233,496 | 0 | 0 | 233,496 | |||||
Conversion of convertible preferred shares to ordinary shares in connection with Initial Public Offering (IPO) (in shares) | 26,440,239 | 0 | |||||||
Issuance of Ordinary and Founders’ shares in connection with concurrent IPO and private placement, net of underwriting discounts and issuance costs | [2] | $ 0 | |||||||
Issuance of Ordinary and Founders’ shares in connection with concurrent IPO and private placement, net of underwriting discounts and issuance costs (in shares) | [2] | 0 | |||||||
Issuance of Ordinary and Founders’ shares in connection with concurrent IPO and private placement, net of underwriting discounts and issuance costs | [2] | 735,856 | 0 | 0 | 735,856 | ||||
Issuance of Ordinary and Founders’ shares in connection with concurrent IPO and private placement, net of underwriting discounts and issuance costs (in shares) | [2] | 5,037,742 | 1 | ||||||
Share-based compensation | $ 0 | 75,051 | 0 | 0 | 75,051 | ||||
Other comprehensive income | 0 | 0 | 594 | 0 | 594 | ||||
Net loss | 0 | 0 | 0 | (129,294) | (129,294) | ||||
Balance at Dec. 31, 2021 | 1,148,461 | 594 | (445,660) | 703,395 | |||||
Balance, shares at Dec. 31, 2021 | 44,924,039 | 1 | |||||||
Preferred Stock, Value, Ending Balance at Dec. 31, 2021 | $ 0 | ||||||||
Preferred Stock, Shares, Ending Balance at Dec. 31, 2021 | [2] | 0 | |||||||
Exercise of options | $ 0 | 6,133 | 0 | 0 | $ 6,133 | ||||
Exercise of options (in shares) | 0 | 2,693,614 | 0 | 2,693,614 | |||||
Issuance of ordinary shares upon the vesting and settlement of restricted stock units | $ 0 | ||||||||
Issuance of ordinary shares upon the vesting and settlement of restricted stock units | 0 | 0 | 0 | $ 0 | |||||
Issuance of ordinary shares upon the vesting and settlement of restricted stock units (in shares) | 0 | ||||||||
Issuance of ordinary shares upon the vesting and settlement of restricted stock units (in shares) | 81,976 | 0 | |||||||
Issuance of ordinary shares under employee share purchase plan | $ 0 | ||||||||
Issuance of ordinary shares under employee share purchase plan (in shares) | 0 | ||||||||
Issuance of ordinary shares under employee share purchase plan | 3,681 | 0 | 0 | 3,681 | |||||
Issuance of ordinary shares under employee share purchase plan (in shares) | 38,239 | 0 | |||||||
Share-based compensation | $ 0 | 107,202 | 0 | 0 | 107,202 | ||||
Other comprehensive income | 0 | 0 | (3,804) | 0 | (3,804) | ||||
Net loss | 0 | 0 | (136,867) | (136,867) | |||||
Balance at Dec. 31, 2022 | $ 1 | $ 1,265,477 | $ (3,210) | $ (582,527) | $ 679,740 | ||||
Balance, shares at Dec. 31, 2022 | 47,737,868 | ||||||||
Preferred Stock, Value, Ending Balance at Dec. 31, 2022 | $ 0 | ||||||||
Preferred Stock, Shares, Ending Balance at Dec. 31, 2022 | 0 | ||||||||
[1]As of December 31, 2022 and 2021 accumulated other comprehensive income (loss) is comprised of unrealized gain (loss) on derivatives of $(3,804) and $594, respectively.[2]Net of underwriting discounts and issuance costs of $44,995. |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY (DEFICIT) (Parentheticals) $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Net issuance costs | $ 44,995 |
Other comprehensive income/loss | $ 594 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (136,867) | $ (129,294) | $ (152,203) |
Adjustments to reconcile net loss to cash provided by (used in) operating activities: | |||
Depreciation and amortization | 8,567 | 2,746 | 1,888 |
Capital loss from sale of property and equipment | 0 | 76 | 0 |
Share-based compensation | 104,920 | 73,529 | 64,345 |
Change in accrued interest on revolving credit facility | 0 | (16) | (14) |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (4,717) | (4,598) | (472) |
Prepaid expenses and other assets | 6,490 | (13,335) | (1,828) |
Accounts payable | (16,072) | (2,040) | 6,773 |
Accrued expenses and other liabilities | 326 | 24,915 | 14,598 |
Deferred revenue | 64,491 | 64,372 | 29,738 |
Net cash provided by (used in) operating activities | 27,138 | 16,355 | (37,175) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (16,003) | (11,578) | (4,362) |
Capitalized software development costs | (2,998) | (2,180) | (1,119) |
Proceeds from sale of property and equipment | 0 | 129 | 0 |
Changes in short-term deposits | 0 | 10,000 | (6,000) |
Net cash used in investing activities | (19,001) | (3,629) | (11,481) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from exercise of share options and employee share purchase plan | 12,181 | 5,249 | 542 |
Proceeds from initial public offering and concurrent private placement, net of underwriting discounts and other issuance costs | 0 | 735,856 | 0 |
Receipt (payment) of tax advance relating to exercises of share options and RSUs, net | (21,152) | 22,258 | 0 |
Receipt (repayment) of revolving credit facility, net of payments | 0 | (21,000) | 8,000 |
Capital lease payments | (84) | (91) | (72) |
Net cash provided by (used in) financing activities | (9,055) | 742,272 | 8,470 |
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (918) | 754,998 | (40,186) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH – Beginning of year | 886,812 | 131,814 | 172,000 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH – End of year | 885,894 | 886,812 | 131,814 |
SUPPLEMENTAL DISCLOSURE: | |||
Cash paid for taxes | 5,909 | 3,298 | 2,487 |
Cash paid for interest | 62 | 421 | 685 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Non-cash purchases of property and equipment | 205 | 92 | 232 |
Unpaid deferred offering costs | 0 | 0 | 174 |
Share-based compensation included in capitalized software development costs | 1,934 | 1,522 | 380 |
Right-of-use asset recognized with corresponding lease liability | 97,289 | 0 | 0 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEET: | |||
Cash and cash equivalents | 885,894 | 886,812 | 129,814 |
Restricted cash – Included in other long-term assets | 0 | 0 | 2,000 |
Total cash, cash equivalents, and restricted cash | $ 885,894 | $ 886,812 | $ 131,814 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1: ORGANIZATION AND DESCRIPTION OF BUSINESS monday.com Ltd (“monday.com” and together with its subsidiaries collectively, “the monday.com has seven wholly owned subsidiaries: monday.com Inc. (the “U.S. Subsidiary”) incorporated in the United States in 2016, monday.com UK incorporated under the laws of England in 2020, monday.com PTY, incorporated in Australia in 2020, monday.com LTDA. incorporated in Brazil in 2021, monday.com K.K. incorporated in Japan in 2021, Monday.com Sp. z o.o., incorporated in Poland in 2022, and monday.com PTE, incorporated in Singapore in 2022. The subsidiaries primarily engage in providing business development, presale, and customer success services to the Company’s existing and potential customers. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America (“US A. Principles of Consolidation The accompanying consolidated financial statements include the accounts of monday. com and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. B. Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on assumptions that management considers to be reasonable. The Company assesses these estimates on a regular basis; however, actual results could differ from these estimates. C. Foreign Currency Translation and Transactions The Company’s management has determined that the United States dollar is the currency in the primary economic environment in which monday.com and its subsidiaries operates. Thus, the Company reports its consolidated results in United States dollars. Transactions and balances that are denominated D. Cash and Cash Equivalents The Company classifies all unrestricted highly liquid investments with maturities of three months or less at the date of purchase as cash equivalents. Cash equivalents consist of bank deposits and money market funds. E. Accounts Receivable Accounts receivable are recorded at the invoiced amount, are unsecured and do not bear interest. The Company maintains an allowance for estimated losses inherent in its accounts receivable including potential uncollectible amounts. The allowance is based on the Company’s periodic assessment of the collectability of the accounts based on a combination of factors including the payment terms of each account, its age, the collection history of each customer, and the customer’s financial condition. Doubtful accounts expense for the years ended December 31, 2022 and 2021 was $1,622 and $594, respectively. The Company wrote off bad debts in the amount of $1,463 and $609 during 2022 and 2021, respectively. F. Property and Equipment, Net Property and equipment, net is stated at cost, less accumulated depreciation and amortization. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets (see Note 2H). Expenditures for maintenance and repairs are expensed as incurred. Disposals are removed at cost less accumulated depreciation and any gain or loss from disposals is reflected in the consolidated statement of operations in the period of disposition. G. Internal Use Software Development Costs The Company capitalizes certain internal software development costs related to its cloud-based platform or to backoffice operating systems. The costs consist of personnel costs incurred during the application development stage. Capitalization begins when the preliminary project stage is completed, and it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. Costs related to preliminary project activities and post implementation operating activities are expensed as incurred. Capitalized software development costs are included in property and equipment H. Amortization and Impairment of Long-Lived Assets: Long-lived assets with definite lives consist of property and equipment. Long-lived assets are amortized over their estimated useful lives which are as follows: Years Computers, software, and electronic equipment 3-5 Office furniture and equipment 10-14 Capitalized internal software development costs 3 Leasehold improvements Shorter of the remaining term The Company reviews its long-lived assets for impairment whenever events or circumstances have occurred that indicate that the estimated useful lives of the long-lived assets may warrant revision or that the carrying value of these assets may be impaired. To compute whether assets have been impaired, the estimated undiscounted future cash flows of the assets or asset group are compared to the carrying value. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized based on the amount in which the carrying amount exceeds the fair value of the asset or asset group, based on discounted cash flows. There were no events or circumstances that required the Company’s long-lived assets to be tested for impairment during any of the periods presented. I. Leases The Company determines if an arrangement is a lease at inception by determining if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration and other facts and circumstances. The Company classifies leases at their inception as either capital or operating leases. A lease that transfers substantially all the risks and rewards incidental to ownership of the leased asset to the Company is classified as a capital lease. For capital leases, at the commencement of the lease term, the leased asset is measured at the lower of fair value or the present value of the minimum lease payments. The leased asset is depreciated over the shorter of its useful life and the lease term. See also note 2X. For operating leases, right-of-use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. The lease agreements may contain variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred on the consolidated statements of operations. The Company’s lease agreements generally do not contain any residual value guarantees, restrictions, or covenants. For operating leases that contain renewals, or other lease incentives, the Company recognizes the rent expense on a straight-line basis over the term of the lease. Additionally, incentives received are treated as a reduction of costs over the term of the agreement. Certain lease agreements include rental payments adjusted periodically for the consumer price index (“CPI”). The ROU assets and lease liabilities were calculated using the initial CPI and will not be subsequently adjusted. Payments for variable lease costs are expensed as incurred and are not included in the operating lease ROU assets and lease liabilities. The Company utilized the practical expedient in ASC 842 and elected not to record leases with an initial term of 12 months or less on the balance sheet. Therefore, for short-term leases with a term of 12 months or less, operating lease ROU assets and lease liabilities are not recognized, and the Company records such lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. Rent expenses for the years ended December 31, 2022, 2021 and 2020, were $16,396, $4,326 and $3,287, respectively. See also note 9. J. Employee Related Obligations According to the Israeli Severance Pay Law, 1963 (“Severance Pay Law”), employees are entitled to severance payment, following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one-month salary for each year of employment, or a portion thereof. The Company’s liability for severance pay is covered by the provisions of Section 14 of the Severance Pay Law (“Section 14”). Under Section 14 employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, contributed on their behalf to their insurance funds. Payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees. Therefore, the Company does not recognize a liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in the Company’s balance sheet. Severance expenses for the years ended December 31, 2022, 2021 and 2020, amounted to $7,289, $4,608 and $2,721, respectively. The Company’s U.S. Subsidiary has a 401(K) defined contribution plan covering certain employees in the U.S. All eligible employees may elect to contribute up to 100% of their annual compensation to the plan through salary deferrals, subject to Internal Revenue Service limits. The expenses recorded by the U.S. subsidiary for employer’s contributions were $1,551, $915 and $529 for the years ended December 31, 2022, 2021 and 2020, respectively. K. Contingent Liabilities The Company accounts for its contingent liabilities in accordance with ASC L. Revenue Recognition The Company generates revenue from the sale of subscriptions to customers to access its cloud-based Work OS platform. The terms of the Company’s subscription agreements are primarily monthly or annual, and a large portion of the arrangements are paid in full up-front at the outset of the arrangement. Customers may not take possession over the software and instead are granted continuous access to the platform over the contractual period and therefore the arrangements are accounted for as service contracts. The Company’s contracts generally include fixed number of users and fixed price per user. Revenue for these arrangements is recognized ratably over the contract term. The Company’s subscription contracts are generally non-cancelable except for contracts with first-time customers whereby the contract terms provide rights to cancel the contract in the first 30 days for pro-rated refund for unutilized days. Historically, refunds have not been material, and therefore no provision for refunds was recorded to date. In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these services. The Company determines revenue recognition through the following steps: 1. Identification of the contract, or contracts, with the customer The Company considers the terms and conditions of the contracts and the Company’s customary business practices in identifying its contracts under ASC 606. The Company determines it has a contract with a customer when the contract has been approved by both parties, it can identify each party’s rights regarding the services to be transferred and the payment terms for the services, it has determined the customer to have the ability and intent to pay, and the contract has commercial substance. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s payment history or, in the case of a new customer, credit and financial information pertaining to the customer. 2. Identification of the performance obligations in the contract Performance obligations committed in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available, and are distinct in the context of the contract, whereby the transfer of the services and the products is separately identifiable from other promises in the contract. The Company’s performance obligations generally consist of access to the cloud-based platform and related support services which is considered one performance obligation. The customers do not have the ability to take 3. Determination of the transaction price The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Payment terms are generally upfront at the time of the transaction, except for enterprise customers which are generally net 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the 4. Allocation of the transaction price to the performance obligations in the contract The Company’s contracts contain a single performance obligation. Therefore, the entire transaction price is allocated to the single performance obligation. 5. Recognition of the revenue when, or as, a performance obligation is satisfied Revenue is recognized ratably over the term of the subscription agreement generally beginning on the date that the platform is made available to a customer. The Company records contract liabilities when cash payments are received in advance of performance to deferred revenue or to customer advances in case of refund rights. The Company recognized $134,438 and $70,719 of revenue during the years ended December 31, 2022 and 2021, respectively, from deferred revenue balances as of January 1, 2022 and 2021, respectively. For costs that the Company would have capitalized and amortized over one year or less, the Company has elected to apply the practical expedient and expense these contract costs as incurred. Similarly, the Company does not disclose the value of unsatisfied performance obligations since the original expected duration of most of the contracts is one year or less. M. Cost of Revenue Cost of revenue primarily consists of costs related to providing subscription services to paying customers, including hosting costs, personnel-related expenses of customer support including share-based compensation, subcontractors costs, merchant and credit-cards processing fees, amortization of capitalized software development costs and allocated overhead costs. N. Research and Development Costs Research and development costs are expensed as incurred unless these costs qualify for capitalization as internal-use software development costs. Research and development expenses consist primarily of personnel-related expenses, including share-based compensation and allocated overhead costs. O. Sales and Marketing Sales and marketing expenses are primarily comprised of costs of the Company’s marketing personnel including share-based compensation, online marketing expenses and other advertising costs, partners’ commissions and allocated overhead costs. Sales and marketing expenses are expensed as incurred. Advertising costs amounted to $181,447, $143,472 and $129,101, in the years ended December 31, 2022, 2021 and 2020, respectively. P. General and Administrative General and administrative expenses primarily consist of costs of the Company’s executive, finance, legal and other administrative personnel including share-based compensation, professional service fees, and allocated overhead costs. Q. Accounting for Share-Based Compensation The Company accounts for share-based compensation under ASC Topic 718, Compensation - Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees, non-employee consultants and directors, including options, restricted share units (“RSUs”), and shares issued pursuant to the employee share purchase plans (“ESPP”) based on the fair value of the awards on the date of grant as follows: (i) share options – the fair value is based on the Black-Scholes option-pricing model, (ii) RSUs – the fair value is based on the closing trading price of the underlying shares at the date of grant and, (iii) ESPP – the fair value is based on the Monte-Carlo simulation model due to certain limitation on the number of shares per employee. The expense for share-based compensation cost is recognized over the requisite service period of each individual grant using the graded vesting attribution method for both service-based and performance-based awards. Forfeitures are accounted for as they occur. The Company granted its Co-CEOs performance-based awards. The number of performance awards earned and eligible to vest are generally determined after a one-year performance period, based on achievement of certain Company financial performance measures and the recipient’s continued service. The Company recognizes share-based compensation expense for the performance awards using the fair value at the date of grant over the requisite service when it is probable that the performance conditions will be achieved and adjusts the number of units expected to vest based on interim estimates of performance against the pre-set objectives. Valuation assumptions: I. Options: The Black-Scholes option-pricing model requires the Company to make several assumptions, including the value of the Company’s ordinary shares, expected volatility, expected term, risk-free interest rate and expected dividends. The Company evaluates the assumptions used to value option awards upon each grant of share options. Expected volatility was calculated based on the implied volatilities from market comparisons of certain publicly traded companies. The expected option term was calculated based on the simplified method, which uses the midpoint between the vesting date and the contractual term, as the Company does not have sufficient historical data to develop an estimate based on participant behavior. The risk-free interest rate was based on the U.S. treasury bonds yield with an equivalent term. The Company has not paid dividends and has no foreseeable plans to pay dividends. The assumptions used to determine the fair value of the share-based awards are management’s best estimates and involve inherent uncertainties and the application of judgment. Commencing June 10, 2021, the ordinary shares of the Company are publicly traded. Prior to the Initial Public Offering (“IPO”), the fair value of ordinary shares underlying the options has historically been determined by management with the assistance of a third-party valuation firm and approved by the Company’s board of directors. The following table summarizes the Black-Scholes assumptions used at the grant dates: Year ended December 31, 2022 2021 2020 Risk-free interest rate 1.89%-4.3% 0.68%-1.15% 0.3%-0.58% Expected dividend yield 0% 0% 0% Expected term (in years) 5-7 5-8 5-8 Expected volatility 49%-57% 49%-50% 47%-48% II. ESPP plan: Year ended December 31, 2022 Risk-free interest rate 0.46%-2.87% Expected dividend yield 0% Expected term (in years) 0.5 Expected volatility 97%-98% R. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740 The Company applies a more-likely-than-not recognition threshold to uncertain tax positions based on the technical merits of the income tax positions taken. The Company does not recognize a tax benefit unless it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded for these positions is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As of December 31, 2022 and 2021, no liability for unrecognized tax benefits was recorded due to immateriality. S. Net Loss Per Share Attributable to Ordinary Shareholders The Company’s basic net loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted-average number of shares of ordinary shares outstanding for the period, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury shares method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share since the effects of potentially dilutive shares of ordinary shares are anti-dilutive in all periods presented. The potentially dilutive options to purchase ordinary shares and RSUs that were excluded from the computation amounted to 4,617,018, 6,302,344 and 5,909,263, for the years ended December 31, 2022 and 2021 and 2020, respectively, because including them would have been anti-dilutive. The Company’s Convertible preferred shares were also excluded from the computation and amounted to 26,440,239 shares for the year ended December 31, 2020. Basic and diluted net loss per share was presented in conformity with the two-class method for participating securities prior to the Company’s IPO for the year ended December 31, 2020. The Founder’s share is not a participating security and therefore excluded from the net loss per share. The two-class method requires income available to ordinary shareholders for the period to be allocated between ordinary shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Prior to their conversion, the Company considered its convertible preferred shares to be participating securities as the holders of the convertible preferred shares would be entitled to dividends that would be distributed to the holders of ordinary shares, on a pro-rata basis assuming conversion of all convertible preferred shares into ordinary shares. These participating securities do not contractually require the holders of such shares to participate in the Company’s losses. As such, net loss for the years ended December 31, 2021 and 2020, was not allocated to the Company’s participating securities. T. Concentration of Credit Risks Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents (including money market funds and bank deposits up to three months) and accounts receivable. For cash and cash equivalents, the Company is exposed to credit risk in the event of default by the financial institutions to the extent of the amounts recorded on the accompanying consolidated balance sheets exceed federally insured limits. The Company places its cash and cash equivalents with financial institutions with high-quality credit ratings in the United States, Israel and Luxemburg and has not experienced any losses in such accounts. For accounts receivable, the Company is exposed to credit risk in the event of nonpayment by customers to the extent of the amounts recorded on the accompanying consolidated balance sheets. For each of the years ended December 31, 2022, and 2021, there were no individual customers that accounted for 10% or more of the Company’s revenues. The Company’s accounts recieveable are geographically diversified and derived primarily from sales in the United States, EMEA, and APAC. To manage its accounts receivable risk, the Company evaluates the credit worthiness of its customers and maintains allowances for potential credit losses. The Company has not historically experienced any material credit losses related to individual customers or groups of customers in any specific area or industry. U. Segment Information The Company has a single operating and reportable segment. The Company’s chief operating decision makers are its two Co-Chief Executive Officers (“Co-CEO”), who review financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. For information regarding the Company’s long-lived assets and revenue by geographic area, see Note 16. V. Fair Value measurements Fair value is defined as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amount of cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable, and accrued expenses, are stated at their carrying value, which approximates fair value due to the short maturities of these instruments. Assets measured at fair value on a recurring basis as of December 31, 2022, are comprised of money market funds and derivative instruments (see Note W. Derivative Financial Instruments Derivatives are recognized at fair value as either assets or liabilities in the consolidated balance sheets in accordance with ASC Topic 815, “Derivatives and Hedging.” The gain or loss of derivatives which are designated and qualify as hedging instruments in a cash flow hedge, is recorded under accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The Company’s primary objective for holding derivative instruments is to reduce its exposure to foreign currency rate changes. The Company reduces its exposure by entering into forward foreign exchange contracts and option contracts with respect to operating expenses that are forecasted to be incurred in currencies other than the U.S. dollar. A majority of the Company’s revenues and operating expenditures are transacted in U.S. dollars. However, certain operating expenditures are incurred in or exposed to other currencies, primarily the New Israeli Shekel (“NIS”). The Company has established forecasted transaction currency risk management programs to protect against fluctuations in fair value and the volatility of future cash flows caused by changes in exchange rates. The In addition, occasionally the Company enters into swaps, options and forward contracts to hedge a portion of its monetary items in the balance sheet, X. Recently Adopted Accounting Pronouncements: On January 1, 2022, the Company adopted Accounting Standards Update On January 1, 2022, the Company adopted ASU No. 2016-13, “Financial and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in more timely recognition of credit losses. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes” (ASU 2019-12). The ASU simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The Company prospectively adopted this ASU effective January 1, 2022. As of the date of the adoption there was no material impact on the Company’s consolidated financial statements. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 3: PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: December 31, 2022 2021 Prepaid expenses $ 13,610 $ 12,733 Government institutions 2,268 3,520 Derivative instruments - 656 Interest to receive 3,872 240 Short-term vendor deposits 3,924 282 Other current assets 1,051 741 Total prepaid expenses and other current assets $ 24,725 $ 18,172 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 4: PROPERTY AND EQUIPMENT, NET December 31, 2022 2021 Computer, software, and electronic equipment $ 12,569 $ 8,095 Office furniture and equipment 6,926 4,458 Leasehold improvements 13,289 6,700 Capitalized internal software development costs 10,597 5,666 Capital leases 254 254 Property and equipment, gross 43,635 25,173 Less accumulated depreciation and amortization $ (9,219 ) $ (5,574 ) Property and equipment, net $ 34,416 $ 19,599 Depreciation and amortization expense was $5,913, $2,746 and $1,888, for the years ended December 31, 2022, 2021 and 2020, respectively. During the years ended December 31, 2022, 2021 and 2020 no material capital losses were recorded. The Company capitalized costs related to the development of internal-use software of $4,931, $3,702 and $1,499, for the years ended December 31, 2022, 2021 and 2020, respectively. Amortization of capitalized software development costs was $1,492, $547 and $232 for the years ended December 31, 2022, 2021 and 2020, respectively. The net carrying value of capitalized internal-use software was $8,233, $4,793 and $1,638 as of December 31, 2022, 2021 and 2020, respectively. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities, Current [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 5: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES December 31, 2022 2021 Accrued employee compensation and benefits $ 44,639 $ 51,953 Accrued expenses 18,983 13,149 Capital lease – short-term - 84 Derivative instruments 3,208 - Advances from customers 2,805 2,134 Income and indirect taxes payable 4,071 2,815 Total $ 73,706 $ 70,135 |
DERIVATIVES AND HEDGING
DERIVATIVES AND HEDGING | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING | NOTE 6: DERIVATIVES AND HEDGING The Company uses derivative instruments primarily to manage exposures to foreign currency exchange rate and to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. The fair values of derivative instruments and the line items to which they were recorded are summarized as follows: Balance sheet line item December 31, 2022 2021 Derivatives designated as hedging instruments: Foreign exchange contracts Other current liabilities (3,208 ) — Prepaid expenses and other current assets — 705 $ (3,208 ) $ 705 Derivatives not designated as hedging instruments: Prepaid expenses and — (49 ) Foreign exchange contracts other current assets — (49 ) Total $ (3,208 ) $ 656 The effect of derivative instruments on cash flow hedging, as well as the effect of instruments not designated as hedge and the relationship between income and other comprehensive income for the years ended December 31, 2022 and December 31, 2021, are summarized below: Gain (Loss) Recognized in Other Comprehensive Income on Effective-Portion of Derivative, net Realized Gain (Loss) on Derivative Reclassified from Accumulated Other Comprehensive Income (*) Amount Excluded from Effectiveness Testing Recognized in Income (Loss)(**) Year ended December 31 Year ended December 31 Year ended December 31 2022 2021 2022 2021 2022 2021 Derivatives designated as hedging instruments: Foreign exchange contracts $ (11,386 ) $ 953 $ 7,582 $ (359 ) $ — $ — (11,386 ) 953 7,582 (359 ) — — Derivatives not designated as hedging instruments: Foreign exchange contracts — — — — (1,801 ) 49 — — — — (1,801 ) 49 Total $ (11,386 ) $ 953 $ 7,582 $ (359 ) $ (1,801 ) $ 49 (*) Classified in operating expenses in the Consolidated Statement of Operations. (**) Includes derivatives not designated as accounting hedge. Classified in financial income (expense), net, in the Consolidated Statement of Operations. The notional amounts of the outstanding derivatives are summarized as follows: As of December 31, 2022 2021 Derivatives designated as hedging instruments: Foreign exchange contracts: NIS $ 81,557 $ 36,013 $ 81,557 $ 36,013 Derivatives not designated as hedging instruments: Foreign exchange contracts: GBP — 4,054 Euro — 2,830 AUD — 581 — 7,465 Total $ 81,557 $ 43,478 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 7: FAIR VALUE MEASUREMENTS In accordance with ASC No. 820, the Company measures its money market funds, bank deposits, and foreign currency derivative contracts at fair value. Money market funds are classified within Level 1. This is because these assets are valued using quoted market prices. Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The Company’s financial assets (liabilities) measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following types of instruments as of the following dates: As of December 31, 2022 2021 Level 1 Level 2 Total Level 1 Level 2 Total Cash equivalents: Bank deposits $ 625,000 $ — $ 625,000 $ 604,000 $ — $ 604,000 Money market funds 80,888 — 80,888 — — — Foreign currency derivative contracts: Foreign exchange contracts — (3,208 ) (3,208 ) — 656 656 Total $ 705,888 $ (3,208 ) $ 702,680 $ 604,000 $ 656 $ 604,656 |
REVOLVING CREDIT FACILITY
REVOLVING CREDIT FACILITY | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
REVOLVING CREDIT FACILITY | NOTE 8: REVOLVING CREDIT FACILITY On December 30, 2020, the Company secured a revolving credit facility (“the facility”), with the following terms: The Company can borrow up to an aggregated principal amount of $80,000 against a certain Monthly Recurring Revenues (“MRR”) formula until December 2022. Amounts borrowed under the facility accrue interest at the rate equal to one month Libor + 2.6% for amounts of up to $8,000, which will increase to one-month LIBOR plus 2.85% per annum on September 1, 2022, and one-month Libor + 2.85 % per annum for amounts above $8,000, with accrued interest payable monthly. The Company shall pay a fee of 0.2% per annum on unutilized amounts eligible for drawdown, calculated daily and payable on a quarterly basis. In conjunction with the facility, the Company paid upfront issuance fees of $180 in January 2021, which will be amortized over the two-year term of the agreement. As of December 31, 2022, the Revolving Credit Facility has expired. The credit facility was secured by a floating charge on substantially all the assets of the Company, excluding its intellectual property, a first degree fixed charge over the Company’s goodwill, and contains customary conditions to borrowing, events of defaults and covenants, including covenants that restrict the Company’s ability to incur indebtedness, grant liens, make distributions to holders of the Company or its subsidiaries’ equity interests, make investments, or engage in transactions with its affiliates. Borrowings under the credit facility were available based on a certain ratio of the Company’s MRR (defined in the agreement as the monthly value of services, software licenses, rentals and subscription revenue on a consolidated basis excluding non-recurring sales of services or other transaction revenue not in the ordinary course of business, and churn) and subject to certain other financial covenants, including maintaining a minimum liquidity balance (defined as cash and cash equivalents plus short-term deposits) of $30,000 as of December 31, 2021, and certain minimal quarterly growth in MRR, all of which were met as of December 31, 2021. In July 2021 the Company repaid all the outstanding balance under the credit facility. The Company had total unutilized credit facilities available for borrowing of $80,000 as of December 31, 2022 and 2021. During the years ended December 31, 2022, 2021 and 2020, the Company recorded interest expenses in the amount of $62, $316 and $671, respectively, in connection with the credit facility. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 9: LEASES A. Operating leases The Company has entered into various non-cancelable operating leases for its offices expiring between fiscal 2022 and 2031. Certain lease agreements contain an option for the Company to extend the lease term or an option to terminate a lease early. The Company considers these options, which may be elected at the Company’s sole discretion, in determining the lease term on a lease-by-lease basis. Additionally, the Company entered into certain cancelable monthly lease agreements for short-term periods of up to one year. B. Capital Lease On November 13, 2019, the Company entered into a capital lease agreement with a supplier, according to which, the Company leased software equipment in the total amount of $254 for the period from December 7, 2019, throughout December 7, 2022 in monthly installments. The Company has the option to purchase the software equipment at the end of the lease period for a payment of 1% of the initial price. The lease liability was $0 and $84 as of December 31, 2022 and 2021, respectively. C. The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2022: Years Ending December 31, Amount 2023 $ 19,782 2024 17,843 2025 18,176 2026 12,697 2027 8,708 Thereafter 6,282 Total undiscounted cash flows $ 83,488 Less: Imputed interest $ (5,767 ) Present value of lease liabilities $ 77,721 As of December 31, 2022, the Company has an additional operating lease that has not yet commenced, which is excluded from the table above. The operating lease will commence in fiscal year 2023 with a total of $2,207 of undiscounted future payments with a lease term of three years. Supplemental balance sheet information related to leases is as follows: Year ended December 31, 2022 Weighted-average remaining lease term 4.5 years Weighted-average discount rate 3.6% |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10: COMMITMENTS AND CONTINGENCIES A. Guarantees: As of December 31, 2022 and 2021, the Company has provided a bank guarantee in the amount of $6,871 and $2,186, respectively, to secure its lease agreement. B. Indemnifications The Company enters into standard indemnification provisions in the ordinary course of business, including certain customers, business partners, the Company’s officers, and directors. Pursuant to these provisions, the Company has agreed to indemnify and defend the indemnified party claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party claims because of the Company’s activities or non-compliance with certain representations and warranties made by the Company. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, losses recorded in the Company’s consolidated statements of operations in connection with the indemnification provisions have not been material. There are no claims pending as of December 31, 2022 and 2021, related to indemnification agreements. The Company has entered into service-level agreements with some of its enterprise customers defining levels of uptime reliability and performance and permitting those customers to receive credits for prepaid amounts related to unused subscription services if the Company fails to meet the defined levels of uptime in a certain calendar month. To date, the Company has not experienced any significant failures to meet defined levels of uptime reliability and performance. In addition, since the calculation is monthly for each calendar month there is no uncertainty at the end of the reporting period. Therefore, the Company has not accrued any liabilities related to these agreements in the consolidated financial statements. C. Legal Contingencies: The Company is currently not involved in any material claims or legal proceedings. The Company reviews the status of each legal matter it is involved in, from time to time, in the ordinary course of business and assesses its potential financial exposure. D. Other Commitments: Other commitments include payments to third-party vendors for services related mainly to hosting-related services, software licenses and services. Future minimum payments under the Company’s other commitments, as of December 31, 2022, are as follows: Years Ending December 31, Amount 2023 $ 15,185 2024 7,211 2025 820 Total contractual obligations $ 23,216 |
FINANCIAL INCOME (EXPENSES), NE
FINANCIAL INCOME (EXPENSES), NET | 12 Months Ended |
Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | |
FINANCIAL INCOME (EXPENSES) , NET | NOTE 11: FINANCIAL INCOME (EXPENSES), NET Year ended December 31, 2022 2021 2020 Financial expenses Bank charges and other $ 730 $ 566 $ 340 Interest on credit facility and amortization of debt issuance fees 62 405 671 Exchange rate expense, net — 742 — Total financial expenses 792 1,713 1,011 Financial income Exchange rate income, net 4,687 — 492 Interest income on deposits 18,659 875 1,045 Total financial income 23,346 875 1,537 Financial income (expenses), net $ 22,554 $ (838 ) $ 526 |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 12: RELATED PARTIES There were no material related party transactions in each of the years ended December 31, 2022, 2021 and 2020 other than the secondary transactions (refer to Note 13E). |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 13: SHAREHOLDERS’ EQUITY A. Ordinary shares: The holders of ordinary shares are entitled to one vote per share, to dividends as decided by the Board, and in the event of the Company’s liquidation, to the surplus assets of the Company. The Company has the following ordinary shares reserved for future issuance: As of December 31, 2022 2021 Ordinary shares 47,737,868 44,924,039 Outstanding share options and RSUs 4,617,018 6,302,344 Shares available for future grants under the 2021 plan 6,243,273 5,087,335 Shares subject to the employee share purchase plan 721,469 194,625 Total 59,319,628 56,508,343 B. Initial Public Offering and concurrent Private Placement: On June 10, 2021, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 3,700,000 shares of its ordinary shares at an offering price of $155.00 per share, and additional 370,000 ordinary shares pursuant to the exercise in full of the underwriters’ option to purchase additional shares. The Company received net proceeds of $591,856 after deducting underwriting discounts and commissions of $34,697, and other issuance costs of $4,298. Immediately prior to the closing of the IPO, all convertible preferred shares then outstanding automatically converted into 26,440,239 ordinary shares. Additionally, immediately subsequent to the closing of the IPO, the Company entered into concurrent private placement with two investors to purchase 967,742 of its ordinary shares in consideration for gross proceeds of $150,000 at a price per ordinary share equal to the initial public offering price. Related underwriting discounts and commissions amounted to $6,000. Prior to the IPO, deferred offering costs, which consist primarily of accounting, legal and other fees related to the Company’s IPO, were capitalized within other assets, noncurrent in the Consolidated Balance Sheets. Upon the consummation of the IPO and concurrent Private Placement $44,995 of deferred offering costs were reclassified into shareholders’ equity as an offset against IPO proceeds. C. Founder’s share: U pon the consummation of the IPO, the Company issued one of its Co-Founders and Co-CEO (“the Co-CEO”) one founder share. The founder share will provide the Co-CEO with certain veto rights over the approval of certain transactions such as merger, consolidation, acquisition, issuance of equity securities or debt securities convertible into equity securities or other similar transactions, that would result in any person becoming the owner of 25% or more of the ordinary shares immediately following the consummation of such transaction, (ii) sale, assignment, conveyance, transfer, lease or other disposition, in one transaction or a series of related transactions, of all or substantially all of the Company’s assets to any person and (iii) change to the Company’s strategy, policies and/or business plan in connection with its Equal Impact Initiative. The founder share is not tradable and have no rights other than those described above, including no dividends rights or voting rights. The founder share will automatically convert to a deferred share with no rights, upon the earlier of (i) a transfer, pledge or other disposition of the founder share, (ii) the termination of the Co-CEO’s employment with the Company, (iii) the death of the Co-CEO, (iv) Upon the dilution of the shares and options held by him below a certain percentage. D. Cancelation of par value: On December 28, 2020, the Company’s shareholders approved the amendment and restatement of the Company’s Articles of Association to cancel the par value of the Company’s authorized and issued share capital, such that following such cancelation all shares have no par value. All share capital and additional paid in capital amounts have been adjusted retroactively within these consolidated financial statements to reflect the cancelation of the par value. E. Secondary transactions: During 2020, certain ordinary shareholders, including employees, and consultants (herein: “the Shareholders”) sold the Company’s Ordinary shares in secondary market transactions to new and existing investors of the Company. The Shareholders sold an aggregate amount of 639,739 ordinary shares for an aggregate consideration of $37,718 at a price of $58.96 per share. The incremental value between the sale price and the fair value of the Ordinary shares at the date of sale resulted in aggregate share-based compensation cost of $10,487, recorded in operating expenses. There were no secondary transactions in 2022 and 2021. F. Share based compensation: In 2021, the board of directors adopted the 2021 equity incentive plan for employees, officers, directors, and consultants (the “2021 Plan”). Following the IPO, the Company ceased granting awards under its old plans and all shares that remained available for issuance under these plans were transferred to the 2021 Plan. The 2021 Plan provides for the grant of options to purchase Ordinary Shares and RSUs. Each option granted under the 2021 Plan expires no later than ten years from the date of grant. The vesting period of the options and RSUs is generally four years. As of December 31, 2022, the number of Ordinary shares reserved and available for grant and issuance pursuant to the 2021 Plan (the “Share Reserve”) were 6,243,273. The Share Reserve will automatically increase on January 1st of each year during the term of the 2021 Plan, commencing on January 1st of the year following the year in which the 2021 Plan became effective, in an amount equal to 5% of the total number of shares of capital stock outstanding on December 31st of the preceding calendar year. Since January 1, 2022, the share reserve under the 2021 Plan has been automatically increased by an aggregate of 2,246,202 shares. Awards granted under the 2021 Plan generally vest over four years. Any award that is forfeited or canceled before expiration becomes available for future grants under the 2021 Plan. Share option activity for the year ended December 31, 2022 is as follows: Number of Options Weighted- Average Exercise Price Weighted Average Remaining Contractual life Aggregate Intrinsic Value Outstanding — January 1, 2022 6,204,605 $ 13.53 7.21 $ 1,831,568 Granted (*) 406,575 $ 192.91 Exercised (2,693,614 ) $ 2.28 Expired and forfeited (117,542 ) $ 48.88 Outstanding — December 31, 2022 3,800,024 $ 39.6 7.46 $ 347,627 Exercisable — December 31, 2022 (*) 2,126,460 $ 19.4 6.86 $ 223,393 The aggregate intrinsic value was calculated as the difference between the exercise price of the share options and the fair value of the underlying common shares as of December 31, 2022 and 2021. The intrinsic value of options exercised in the years ended 2022, 2021, and 2020 was approximately $346,600, $321,891 and $18,868, respectively. The weighted-average grant-date fair value of options granted during the years ended December 31, 2022, 2021 and 2020 was $69.3, $77.0 and $38.3, respectively. (*) Includes 91,344 performance options granted to the Company’s Co-CEOs. The following table summarizes the activity for the Company’s RSUs for the year ended December 31, 2022: Number of Units Weighted-Average Fair Value Balance at January 1, 2022 97,739 $ 278.46 Granted 865,528 $ 116.16 Vested (81,976 ) $ 182.21 Canceled (64,297 ) $ 149.96 Balance at December 31, 2022 816,994 $ 126.29 As of December 31, 2022 and 2021 there was $64,458, and $22,821 of total unrecognized compensation cost related to unvested restricted share units which is expected to be recognized over a weighted-average period of 1.85 and 1.98 years, respectively. As of December 31, 2020, there was no unrecognized compensation costs related to unvested restricted share units. Share-based compensation expense, including secondary transactions related expenses, for the years ended December 31, 2022, 2021 and 2020, is as follows: Year ended December 31, 2022 2021 2020 Cost of revenues $ 10,406 $ 7,681 $ 2,720 Research and development 32,957 21,779 12,142 Sales and marketing 33,457 23,135 10,068 General and administrative *) 28,100 20,934 39,415 Share-based compensation, net of amounts capitalized $ 104,920 $ 73,529 $ 64,345 Capitalized share-based compensation expense 2,282 1,522 380 Total share-based compensation $ 107,202 $ 75,051 $ 64,725 *) Share-based compensation expenses in 2020 includes costs related to the fair value of fully vested options granted to the Company’s Co-CEO in December 2020 in the amount of $30,424. As of December 31, 2022, 2021, and 2020, unamortized share-based compensation expense was $107,411, $101,027 and $31,018, respectively, which is expected to be recognized over weighted average periods of 1.79, 1.97 and 1.78 years, respectively. G. Employee Share Purchase Plan Immediately prior to the IPO, the Company adopted the 2021 Employee Share Purchase Plan (the “ESPP”). As of December 31, 2021, a total of 194,625 shares were reserved for issuance under the ESPP. In addition, on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, the number of shares available for issuance under the ESPP will be increased by the lesser of 1% of the shares outstanding on the final day of the immediately preceding calendar year, as determined on a fully diluted basis, and such smaller number of shares as determined by the Company’s board of directors. According to the ESPP, eligible employees may use up to 15% of their salaries to purchase ordinary shares. The price of an ordinary share purchased under the ESPP is equal to 85% of the lower of the fair market value of the ordinary share on the beginning of each offering period or on the purchase date. As of December 31, 2022, 38,239 ordinary shares had been purchased under the ESPP. The ESPP is compensatory and, as such, results in recognition of compensation cost. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 14: INCOME TAXES A. Loss before income taxes: The following are the domestic and foreign components of the Company’s loss before income taxes: Year ended December 31, 2022 2021 2020 Domestic (Israel) $ (142,527 ) $ (132,203 ) $ (152,335 ) Foreign 13,066 5,240 2,324 Total $ (129,461 ) $ (126,963 ) $ (150,011 ) B. Income taxes: The following are the domestic and foreign components of the Company’s income taxes: Year ended December 31, 2022 2021 2020 Domestic (Israel) $ 649 $ 180 $ 243 Foreign 6,757 2,151 1,949 Total $ 7,406 $ 2,331 $ 2,192 C. Tax rate reconciliation: The reconciliation of the tax benefit at the Israeli statutory tax rate to the Company’s income taxes is as follows: Year ended December 31, 2022 2021 2020 Tax Rate Tax Rate Tax Rate Theoretical tax benefit $ (29,776 ) 23 % $ (29,201 ) 23 % $ (34,503 ) 23 % Increase (decrease) in tax rate due to: Change in valuation allowance 8,489 (7 )% 14,968 (12 )% 14,622 (10 )% Share-based compensation 14,806 (11 )% 10,184 (8 )% 8,324 (5 )% Tax benefit relating to exercise of disqualified ISO (1,394 ) 1 % (3,069 ) 2 % — 0 % Initial public offering costs (1,800 ) 1 % (5,399 ) 4 % — 0 % Preferred technological enterprise 15,523 (12 )% 14,460 (11 )% 16,757 (11 )% Currency differences 768 1 % 18 0 % (2,998 ) 2 % Other 790 1 % 370 0 % (10 ) 0 % Effective tax $ 7,406 (2 )% $ 2,331 (2 )% $ 2,192 (1 )% D. Deferred taxes: The principal components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 are as follows: As of December 31, 2022 2021 Net operating loss carry forwards $ 39,942 $ 35,093 Research and development 9,663 5,538 Initial public offering costs 1,800 3,600 Other temporary differences 3,855 2,577 Carryforward tax credits 1,428 867 Gross deferred tax assets 56,688 47,675 Valuation allowance (55,561 ) (47,072 ) Total deferred tax assets 1,127 603 Deferred tax liabilities: Depreciation and amortization (1,127 ) (603 ) Deferred tax liabilities $ (1,127 ) $ (603 ) Net deferred taxes $ — $ — In assessing the ability to realize deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Based on the available evidence, management believes that it is more likely than not that its deferred tax assets will not be realized and accordingly, a full valuation allowance has been provided. As of December 31, 2022, the Company has net operating loss carryforwards in Israel of $332,850 which may be carried forward indefinitely. As of December 31, 2022, and 2021, the Company has not provided a deferred tax liability in respect of cumulative undistributed earnings relating to the Company’s foreign subsidiaries, as the Company intends to keep these earnings permanently invested. E. Tax assessments: As of December 31, 2022, the Company had open tax years for the periods between 2018 and 2022 in Israel and for the periods between 2019 and 2022 for the U.S. subsidiary. F. Basis of taxation: Ordinary taxable income in Israel is subject to a corporate tax rate of 23% in 2022 and 2021. However, the effective tax rate payable by a company may be considerably lower (as discussed below). Non-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence. Primarily, in 2022 and 2021, the Company’s U.S. subsidiary is subject to tax rate of approximately 21%. G. The New Technological Enterprise Incentives Regime (Amendment 73 to the Investment Law) In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law for the Encouragement of Capital Investments (“the 2017 Amendment”) was published and was pending the publication of regulations, in May 2017 regulations were promulgated by the Finance Ministry to implement the “Nexus Principles” based on OECD guidelines published as part of the Base Erosion and Profit Shifting (BEPS) project. Following the publication of the regulations the 2017 Amendment became fully effective. According to the 2017 Amendment, a Preferred Technological Enterprise, as defined in the 2017 Amendment, with total consolidated revenues of less than NIS 10 billion, will be subject to 12% tax rate on income derived from intellectual property (in development area A—a tax rate of 7.5%). In order to qualify as a Preferred technological enterprise certain criterion must be met, such as a minimum ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual revenues derived from exports. Any dividends distributed from income from the preferred technological enterprises will be subject to tax at a rate of 20%. The 2017 Amendment further provides that, in certain circumstances, a dividend distributed to a foreign corporate shareholder, would be subject to a 4% tax rate (if the percentage of foreign investors exceeds 90%). The Company assessed the criteria for qualifying as a “Preferred Technological Enterprise,” status and concluded that the Company is eligible to the above-mentioned benefits. The Company is entitled to Preferred Technological Enterprise benefits starting 2019. The Company did not utilize any benefits associated with the Preferred Technological Enterprise in 2022 and 2021. |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | NOTE 15: LOSS PER SHARE The following table presents the calculation of basic and diluted net loss per share: Year ended December 31, 2022 2021 2020 Numerator: Net loss $ 136,867 $ 129,294 $ 152,203 Undistributed earnings attributable to preferred shareholders — 8,203 18,713 Net loss attributable to ordinary shareholders, basic and diluted $ 136,867 $ 137,497 $ 170,916 Denominator: Weighted-average ordinary shares outstanding 45,804,714 30,332,006 12,048,909 Basic and diluted net loss per share $ (2.99 ) $ (4.53 ) $ (14.19 ) |
GEOGRAPHICAL INFORMATION
GEOGRAPHICAL INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
GEOGRAPHICAL INFORMATION | NOTE 16: GEOGRAPHICAL INFORMATION Revenues are attributed to geographic areas based on location of the end customers as follows: Year ended December 31, 2022 2021 2020 United States $ 255,495 $ 148,291 $ 77,933 EMEA 162,479 97,292 49,747 Rest of world 101,055 62,567 33,443 $ 519,029 $ 308,150 $ 161,123 Property and equipment, net by geographical areas were as follows: As of December 31, 2022 2021 Israel $ 30,260 $ 18,583 United States 3,171 748 Rest of the world 985 268 $ 34,416 $ 19,599 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | A. Principles of Consolidation The accompanying consolidated financial statements include the accounts of monday. com and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of estimates | B. Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on assumptions that management considers to be reasonable. The Company assesses these estimates on a regular basis; however, actual results could differ from these estimates. |
Foreign Currency Translation and Transactions | C. Foreign Currency Translation and Transactions The Company’s management has determined that the United States dollar is the currency in the primary economic environment in which monday.com and its subsidiaries operates. Thus, the Company reports its consolidated results in United States dollars. Transactions and balances that are denominated |
Cash and Cash Equivalents | D. Cash and Cash Equivalents The Company classifies all unrestricted highly liquid investments with maturities of three months or less at the date of purchase as cash equivalents. Cash equivalents consist of bank deposits and money market funds. |
Accounts Receivable | E. Accounts Receivable Accounts receivable are recorded at the invoiced amount, are unsecured and do not bear interest. The Company maintains an allowance for estimated losses inherent in its accounts receivable including potential uncollectible amounts. The allowance is based on the Company’s periodic assessment of the collectability of the accounts based on a combination of factors including the payment terms of each account, its age, the collection history of each customer, and the customer’s financial condition. Doubtful accounts expense for the years ended December 31, 2022 and 2021 was $1,622 and $594, respectively. The Company wrote off bad debts in the amount of $1,463 and $609 during 2022 and 2021, respectively. |
Property and Equipment, Net | F. Property and Equipment, Net Property and equipment, net is stated at cost, less accumulated depreciation and amortization. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets (see Note 2H). Expenditures for maintenance and repairs are expensed as incurred. Disposals are removed at cost less accumulated depreciation and any gain or loss from disposals is reflected in the consolidated statement of operations in the period of disposition. |
Internal Use Software Development Costs | G. Internal Use Software Development Costs The Company capitalizes certain internal software development costs related to its cloud-based platform or to backoffice operating systems. The costs consist of personnel costs incurred during the application development stage. Capitalization begins when the preliminary project stage is completed, and it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. Costs related to preliminary project activities and post implementation operating activities are expensed as incurred. Capitalized software development costs are included in property and equipment |
Amortization and Impairment of Long-Lived Assets | H. Amortization and Impairment of Long-Lived Assets: Long-lived assets with definite lives consist of property and equipment. Long-lived assets are amortized over their estimated useful lives which are as follows: Years Computers, software, and electronic equipment 3-5 Office furniture and equipment 10-14 Capitalized internal software development costs 3 Leasehold improvements Shorter of the remaining term The Company reviews its long-lived assets for impairment whenever events or circumstances have occurred that indicate that the estimated useful lives of the long-lived assets may warrant revision or that the carrying value of these assets may be impaired. To compute whether assets have been impaired, the estimated undiscounted future cash flows of the assets or asset group are compared to the carrying value. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized based on the amount in which the carrying amount exceeds the fair value of the asset or asset group, based on discounted cash flows. There were no events or circumstances that required the Company’s long-lived assets to be tested for impairment during any of the periods presented. |
Leases | I. Leases The Company determines if an arrangement is a lease at inception by determining if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration and other facts and circumstances. The Company classifies leases at their inception as either capital or operating leases. A lease that transfers substantially all the risks and rewards incidental to ownership of the leased asset to the Company is classified as a capital lease. For capital leases, at the commencement of the lease term, the leased asset is measured at the lower of fair value or the present value of the minimum lease payments. The leased asset is depreciated over the shorter of its useful life and the lease term. See also note 2X. For operating leases, right-of-use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. The lease agreements may contain variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred on the consolidated statements of operations. The Company’s lease agreements generally do not contain any residual value guarantees, restrictions, or covenants. For operating leases that contain renewals, or other lease incentives, the Company recognizes the rent expense on a straight-line basis over the term of the lease. Additionally, incentives received are treated as a reduction of costs over the term of the agreement. Certain lease agreements include rental payments adjusted periodically for the consumer price index (“CPI”). The ROU assets and lease liabilities were calculated using the initial CPI and will not be subsequently adjusted. Payments for variable lease costs are expensed as incurred and are not included in the operating lease ROU assets and lease liabilities. The Company utilized the practical expedient in ASC 842 and elected not to record leases with an initial term of 12 months or less on the balance sheet. Therefore, for short-term leases with a term of 12 months or less, operating lease ROU assets and lease liabilities are not recognized, and the Company records such lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. Rent expenses for the years ended December 31, 2022, 2021 and 2020, were $16,396, $4,326 and $3,287, respectively. See also note 9. |
Employee Related Obligations | J. Employee Related Obligations According to the Israeli Severance Pay Law, 1963 (“Severance Pay Law”), employees are entitled to severance payment, following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one-month salary for each year of employment, or a portion thereof. The Company’s liability for severance pay is covered by the provisions of Section 14 of the Severance Pay Law (“Section 14”). Under Section 14 employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, contributed on their behalf to their insurance funds. Payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees. Therefore, the Company does not recognize a liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in the Company’s balance sheet. Severance expenses for the years ended December 31, 2022, 2021 and 2020, amounted to $7,289, $4,608 and $2,721, respectively. The Company’s U.S. Subsidiary has a 401(K) defined contribution plan covering certain employees in the U.S. All eligible employees may elect to contribute up to 100% of their annual compensation to the plan through salary deferrals, subject to Internal Revenue Service limits. The expenses recorded by the U.S. subsidiary for employer’s contributions were $1,551, $915 and $529 for the years ended December 31, 2022, 2021 and 2020, respectively. |
Contingent Liabilities | K. Contingent Liabilities The Company accounts for its contingent liabilities in accordance with ASC |
Revenue Recognition | L. Revenue Recognition The Company generates revenue from the sale of subscriptions to customers to access its cloud-based Work OS platform. The terms of the Company’s subscription agreements are primarily monthly or annual, and a large portion of the arrangements are paid in full up-front at the outset of the arrangement. Customers may not take possession over the software and instead are granted continuous access to the platform over the contractual period and therefore the arrangements are accounted for as service contracts. The Company’s contracts generally include fixed number of users and fixed price per user. Revenue for these arrangements is recognized ratably over the contract term. The Company’s subscription contracts are generally non-cancelable except for contracts with first-time customers whereby the contract terms provide rights to cancel the contract in the first 30 days for pro-rated refund for unutilized days. Historically, refunds have not been material, and therefore no provision for refunds was recorded to date. In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these services. The Company determines revenue recognition through the following steps: 1. Identification of the contract, or contracts, with the customer The Company considers the terms and conditions of the contracts and the Company’s customary business practices in identifying its contracts under ASC 606. The Company determines it has a contract with a customer when the contract has been approved by both parties, it can identify each party’s rights regarding the services to be transferred and the payment terms for the services, it has determined the customer to have the ability and intent to pay, and the contract has commercial substance. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s payment history or, in the case of a new customer, credit and financial information pertaining to the customer. 2. Identification of the performance obligations in the contract Performance obligations committed in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available, and are distinct in the context of the contract, whereby the transfer of the services and the products is separately identifiable from other promises in the contract. The Company’s performance obligations generally consist of access to the cloud-based platform and related support services which is considered one performance obligation. The customers do not have the ability to take 3. Determination of the transaction price The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Payment terms are generally upfront at the time of the transaction, except for enterprise customers which are generally net 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the 4. Allocation of the transaction price to the performance obligations in the contract The Company’s contracts contain a single performance obligation. Therefore, the entire transaction price is allocated to the single performance obligation. 5. Recognition of the revenue when, or as, a performance obligation is satisfied Revenue is recognized ratably over the term of the subscription agreement generally beginning on the date that the platform is made available to a customer. The Company records contract liabilities when cash payments are received in advance of performance to deferred revenue or to customer advances in case of refund rights. The Company recognized $134,438 and $70,719 of revenue during the years ended December 31, 2022 and 2021, respectively, from deferred revenue balances as of January 1, 2022 and 2021, respectively. For costs that the Company would have capitalized and amortized over one year or less, the Company has elected to apply the practical expedient and expense these contract costs as incurred. Similarly, the Company does not disclose the value of unsatisfied performance obligations since the original expected duration of most of the contracts is one year or less. |
Cost of Revenue | M. Cost of Revenue Cost of revenue primarily consists of costs related to providing subscription services to paying customers, including hosting costs, personnel-related expenses of customer support including share-based compensation, subcontractors costs, merchant and credit-cards processing fees, amortization of capitalized software development costs and allocated overhead costs. |
Research and Development Costs | N. Research and Development Costs Research and development costs are expensed as incurred unless these costs qualify for capitalization as internal-use software development costs. Research and development expenses consist primarily of personnel-related expenses, including share-based compensation and allocated overhead costs. |
Sales and Marketing | O. Sales and Marketing Sales and marketing expenses are primarily comprised of costs of the Company’s marketing personnel including share-based compensation, online marketing expenses and other advertising costs, partners’ commissions and allocated overhead costs. Sales and marketing expenses are expensed as incurred. Advertising costs amounted to $181,447, $143,472 and $129,101, in the years ended December 31, 2022, 2021 and 2020, respectively. |
General and Administrative | P. General and Administrative General and administrative expenses primarily consist of costs of the Company’s executive, finance, legal and other administrative personnel including share-based compensation, professional service fees, and allocated overhead costs. |
Accounting for Share-Based Compensation | Q. Accounting for Share-Based Compensation The Company accounts for share-based compensation under ASC Topic 718, Compensation - Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees, non-employee consultants and directors, including options, restricted share units (“RSUs”), and shares issued pursuant to the employee share purchase plans (“ESPP”) based on the fair value of the awards on the date of grant as follows: (i) share options – the fair value is based on the Black-Scholes option-pricing model, (ii) RSUs – the fair value is based on the closing trading price of the underlying shares at the date of grant and, (iii) ESPP – the fair value is based on the Monte-Carlo simulation model due to certain limitation on the number of shares per employee. The expense for share-based compensation cost is recognized over the requisite service period of each individual grant using the graded vesting attribution method for both service-based and performance-based awards. Forfeitures are accounted for as they occur. The Company granted its Co-CEOs performance-based awards. The number of performance awards earned and eligible to vest are generally determined after a one-year performance period, based on achievement of certain Company financial performance measures and the recipient’s continued service. The Company recognizes share-based compensation expense for the performance awards using the fair value at the date of grant over the requisite service when it is probable that the performance conditions will be achieved and adjusts the number of units expected to vest based on interim estimates of performance against the pre-set objectives. Valuation assumptions: I. Options: The Black-Scholes option-pricing model requires the Company to make several assumptions, including the value of the Company’s ordinary shares, expected volatility, expected term, risk-free interest rate and expected dividends. The Company evaluates the assumptions used to value option awards upon each grant of share options. Expected volatility was calculated based on the implied volatilities from market comparisons of certain publicly traded companies. The expected option term was calculated based on the simplified method, which uses the midpoint between the vesting date and the contractual term, as the Company does not have sufficient historical data to develop an estimate based on participant behavior. The risk-free interest rate was based on the U.S. treasury bonds yield with an equivalent term. The Company has not paid dividends and has no foreseeable plans to pay dividends. The assumptions used to determine the fair value of the share-based awards are management’s best estimates and involve inherent uncertainties and the application of judgment. Commencing June 10, 2021, the ordinary shares of the Company are publicly traded. Prior to the Initial Public Offering (“IPO”), the fair value of ordinary shares underlying the options has historically been determined by management with the assistance of a third-party valuation firm and approved by the Company’s board of directors. The following table summarizes the Black-Scholes assumptions used at the grant dates: Year ended December 31, 2022 2021 2020 Risk-free interest rate 1.89%-4.3% 0.68%-1.15% 0.3%-0.58% Expected dividend yield 0% 0% 0% Expected term (in years) 5-7 5-8 5-8 Expected volatility 49%-57% 49%-50% 47%-48% II. ESPP plan: Year ended December 31, 2022 Risk-free interest rate 0.46%-2.87% Expected dividend yield 0% Expected term (in years) 0.5 Expected volatility 97%-98% |
Income Taxes | R. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740 The Company applies a more-likely-than-not recognition threshold to uncertain tax positions based on the technical merits of the income tax positions taken. The Company does not recognize a tax benefit unless it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded for these positions is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As of December 31, 2022 and 2021, no liability for unrecognized tax benefits was recorded due to immateriality. |
Net Loss Per Share Attributable to Ordinary Shareholders | S. Net Loss Per Share Attributable to Ordinary Shareholders The Company’s basic net loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted-average number of shares of ordinary shares outstanding for the period, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury shares method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share since the effects of potentially dilutive shares of ordinary shares are anti-dilutive in all periods presented. The potentially dilutive options to purchase ordinary shares and RSUs that were excluded from the computation amounted to 4,617,018, 6,302,344 and 5,909,263, for the years ended December 31, 2022 and 2021 and 2020, respectively, because including them would have been anti-dilutive. The Company’s Convertible preferred shares were also excluded from the computation and amounted to 26,440,239 shares for the year ended December 31, 2020. Basic and diluted net loss per share was presented in conformity with the two-class method for participating securities prior to the Company’s IPO for the year ended December 31, 2020. The Founder’s share is not a participating security and therefore excluded from the net loss per share. The two-class method requires income available to ordinary shareholders for the period to be allocated between ordinary shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Prior to their conversion, the Company considered its convertible preferred shares to be participating securities as the holders of the convertible preferred shares would be entitled to dividends that would be distributed to the holders of ordinary shares, on a pro-rata basis assuming conversion of all convertible preferred shares into ordinary shares. These participating securities do not contractually require the holders of such shares to participate in the Company’s losses. As such, net loss for the years ended December 31, 2021 and 2020, was not allocated to the Company’s participating securities. |
Concentration of Credit Risks | T. Concentration of Credit Risks Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents (including money market funds and bank deposits up to three months) and accounts receivable. For cash and cash equivalents, the Company is exposed to credit risk in the event of default by the financial institutions to the extent of the amounts recorded on the accompanying consolidated balance sheets exceed federally insured limits. The Company places its cash and cash equivalents with financial institutions with high-quality credit ratings in the United States, Israel and Luxemburg and has not experienced any losses in such accounts. For accounts receivable, the Company is exposed to credit risk in the event of nonpayment by customers to the extent of the amounts recorded on the accompanying consolidated balance sheets. For each of the years ended December 31, 2022, and 2021, there were no individual customers that accounted for 10% or more of the Company’s revenues. The Company’s accounts recieveable are geographically diversified and derived primarily from sales in the United States, EMEA, and APAC. To manage its accounts receivable risk, the Company evaluates the credit worthiness of its customers and maintains allowances for potential credit losses. The Company has not historically experienced any material credit losses related to individual customers or groups of customers in any specific area or industry. |
Segment Information | U. Segment Information The Company has a single operating and reportable segment. The Company’s chief operating decision makers are its two Co-Chief Executive Officers (“Co-CEO”), who review financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. For information regarding the Company’s long-lived assets and revenue by geographic area, see Note 16. |
Fair Value measurements | V. Fair Value measurements Fair value is defined as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amount of cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable, and accrued expenses, are stated at their carrying value, which approximates fair value due to the short maturities of these instruments. Assets measured at fair value on a recurring basis as of December 31, 2022, are comprised of money market funds and derivative instruments (see Note |
Derivative Financial Instruments | W. Derivative Financial Instruments Derivatives are recognized at fair value as either assets or liabilities in the consolidated balance sheets in accordance with ASC Topic 815, “Derivatives and Hedging.” The gain or loss of derivatives which are designated and qualify as hedging instruments in a cash flow hedge, is recorded under accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The Company’s primary objective for holding derivative instruments is to reduce its exposure to foreign currency rate changes. The Company reduces its exposure by entering into forward foreign exchange contracts and option contracts with respect to operating expenses that are forecasted to be incurred in currencies other than the U.S. dollar. A majority of the Company’s revenues and operating expenditures are transacted in U.S. dollars. However, certain operating expenditures are incurred in or exposed to other currencies, primarily the New Israeli Shekel (“NIS”). The Company has established forecasted transaction currency risk management programs to protect against fluctuations in fair value and the volatility of future cash flows caused by changes in exchange rates. The In addition, occasionally the Company enters into swaps, options and forward contracts to hedge a portion of its monetary items in the balance sheet, |
Recently Adopted Accounting Pronouncements | X. Recently Adopted Accounting Pronouncements: On January 1, 2022, the Company adopted Accounting Standards Update On January 1, 2022, the Company adopted ASU No. 2016-13, “Financial and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in more timely recognition of credit losses. The adoption of the guidance did not have a material impact on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes” (ASU 2019-12). The ASU simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The Company prospectively adopted this ASU effective January 1, 2022. As of the date of the adoption there was no material impact on the Company’s consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of useful lives of long-lived assets | Years Computers, software, and electronic equipment 3-5 Office furniture and equipment 10-14 Capitalized internal software development costs 3 Leasehold improvements Shorter of the remaining term |
Schedule of black-scholes stock option assumptions used at the grant dates | Year ended December 31, 2022 2021 2020 Risk-free interest rate 1.89%-4.3% 0.68%-1.15% 0.3%-0.58% Expected dividend yield 0% 0% 0% Expected term (in years) 5-7 5-8 5-8 Expected volatility 49%-57% 49%-50% 47%-48% |
Schedule of black-scholes ESPP assumptions used at the grant dates | II. ESPP plan: Year ended December 31, 2022 Risk-free interest rate 0.46%-2.87% Expected dividend yield 0% Expected term (in years) 0.5 Expected volatility 97%-98% |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of prepaid expenses and other current assets | December 31, 2022 2021 Prepaid expenses $ 13,610 $ 12,733 Government institutions 2,268 3,520 Derivative instruments - 656 Interest to receive 3,872 240 Short-term vendor deposits 3,924 282 Other current assets 1,051 741 Total prepaid expenses and other current assets $ 24,725 $ 18,172 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | December 31, 2022 2021 Computer, software, and electronic equipment $ 12,569 $ 8,095 Office furniture and equipment 6,926 4,458 Leasehold improvements 13,289 6,700 Capitalized internal software development costs 10,597 5,666 Capital leases 254 254 Property and equipment, gross 43,635 25,173 Less accumulated depreciation and amortization $ (9,219 ) $ (5,574 ) Property and equipment, net $ 34,416 $ 19,599 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of accrued expenses and other current liabilities | December 31, 2022 2021 Accrued employee compensation and benefits $ 44,639 $ 51,953 Accrued expenses 18,983 13,149 Capital lease – short-term - 84 Derivative instruments 3,208 - Advances from customers 2,805 2,134 Income and indirect taxes payable 4,071 2,815 Total $ 73,706 $ 70,135 |
DERIVATIVES AND HEDGING (Tables
DERIVATIVES AND HEDGING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of derivative instruments | Balance sheet line item December 31, 2022 2021 Derivatives designated as hedging instruments: Foreign exchange contracts Other current liabilities (3,208 ) — Prepaid expenses and other current assets — 705 $ (3,208 ) $ 705 Derivatives not designated as hedging instruments: Prepaid expenses and — (49 ) Foreign exchange contracts other current assets — (49 ) Total $ (3,208 ) $ 656 |
Schedule of income and other comprehensive income | Gain (Loss) Recognized in Other Comprehensive Income on Effective-Portion of Derivative, net Realized Gain (Loss) on Derivative Reclassified from Accumulated Other Comprehensive Income (*) Amount Excluded from Effectiveness Testing Recognized in Income (Loss)(**) Year ended December 31 Year ended December 31 Year ended December 31 2022 2021 2022 2021 2022 2021 Derivatives designated as hedging instruments: Foreign exchange contracts $ (11,386 ) $ 953 $ 7,582 $ (359 ) $ — $ — (11,386 ) 953 7,582 (359 ) — — Derivatives not designated as hedging instruments: Foreign exchange contracts — — — — (1,801 ) 49 — — — — (1,801 ) 49 Total $ (11,386 ) $ 953 $ 7,582 $ (359 ) $ (1,801 ) $ 49 (*) Classified in operating expenses in the Consolidated Statement of Operations. (**) Includes derivatives not designated as accounting hedge. Classified in financial income (expense), net, in the Consolidated Statement of Operations. |
Schedule of notional amounts of outstanding derivative | As of December 31, 2022 2021 Derivatives designated as hedging instruments: Foreign exchange contracts: NIS $ 81,557 $ 36,013 $ 81,557 $ 36,013 Derivatives not designated as hedging instruments: Foreign exchange contracts: GBP — 4,054 Euro — 2,830 AUD — 581 — 7,465 Total $ 81,557 $ 43,478 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of financial assets and liabilities | As of December 31, 2022 2021 Level 1 Level 2 Total Level 1 Level 2 Total Cash equivalents: Bank deposits $ 625,000 $ — $ 625,000 $ 604,000 $ — $ 604,000 Money market funds 80,888 — 80,888 — — — Foreign currency derivative contracts: Foreign exchange contracts — (3,208 ) (3,208 ) — 656 656 Total $ 705,888 $ (3,208 ) $ 702,680 $ 604,000 $ 656 $ 604,656 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of operating leases future minimum lease payments | Years Ending December 31, Amount 2023 $ 19,782 2024 17,843 2025 18,176 2026 12,697 2027 8,708 Thereafter 6,282 Total undiscounted cash flows $ 83,488 Less: Imputed interest $ (5,767 ) Present value of lease liabilities $ 77,721 |
Schedule of supplemental balance sheet information | Year ended December 31, 2022 Weighted-average remaining lease term 4.5 years Weighted-average discount rate 3.6% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum payments, other commitments, liability, fiscal year maturity | Years Ending December 31, Amount 2023 $ 15,185 2024 7,211 2025 820 Total contractual obligations $ 23,216 |
FINANCIAL INCOME (EXPENSES), _2
FINANCIAL INCOME (EXPENSES), NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of financial income (expenses) | Year ended December 31, 2022 2021 2020 Financial expenses Bank charges and other $ 730 $ 566 $ 340 Interest on credit facility and amortization of debt issuance fees 62 405 671 Exchange rate expense, net — 742 — Total financial expenses 792 1,713 1,011 Financial income Exchange rate income, net 4,687 — 492 Interest income on deposits 18,659 875 1,045 Total financial income 23,346 875 1,537 Financial income (expenses), net $ 22,554 $ (838 ) $ 526 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of ordinary shares reserved for future issuance | As of December 31, 2022 2021 Ordinary shares 47,737,868 44,924,039 Outstanding share options and RSUs 4,617,018 6,302,344 Shares available for future grants under the 2021 plan 6,243,273 5,087,335 Shares subject to the employee share purchase plan 721,469 194,625 Total 59,319,628 56,508,343 |
Schedule of share option activity | Number of Options Weighted- Average Exercise Price Weighted Average Remaining Contractual life Aggregate Intrinsic Value Outstanding — January 1, 2022 6,204,605 $ 13.53 7.21 $ 1,831,568 Granted (*) 406,575 $ 192.91 Exercised (2,693,614 ) $ 2.28 Expired and forfeited (117,542 ) $ 48.88 Outstanding — December 31, 2022 3,800,024 $ 39.6 7.46 $ 347,627 Exercisable — December 31, 2022 (*) 2,126,460 $ 19.4 6.86 $ 223,393 (*) Includes 91,344 performance options granted to the Company’s Co-CEOs. |
Schedule of unvested restricted stock units | Number of Units Weighted-Average Fair Value Balance at January 1, 2022 97,739 $ 278.46 Granted 865,528 $ 116.16 Vested (81,976 ) $ 182.21 Canceled (64,297 ) $ 149.96 Balance at December 31, 2022 816,994 $ 126.29 |
Schedule of share-based compensation expense | Year ended December 31, 2022 2021 2020 Cost of revenues $ 10,406 $ 7,681 $ 2,720 Research and development 32,957 21,779 12,142 Sales and marketing 33,457 23,135 10,068 General and administrative *) 28,100 20,934 39,415 Share-based compensation, net of amounts capitalized $ 104,920 $ 73,529 $ 64,345 Capitalized share-based compensation expense 2,282 1,522 380 Total share-based compensation $ 107,202 $ 75,051 $ 64,725 *) Share-based compensation expenses in 2020 includes costs related to the fair value of fully vested options granted to the Company’s Co-CEO in December 2020 in the amount of $30,424. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of domestic and foreign components of loss before income taxes | Year ended December 31, 2022 2021 2020 Domestic (Israel) $ (142,527 ) $ (132,203 ) $ (152,335 ) Foreign 13,066 5,240 2,324 Total $ (129,461 ) $ (126,963 ) $ (150,011 ) |
Schedule of domestic and foreign components of income taxes | Year ended December 31, 2022 2021 2020 Domestic (Israel) $ 649 $ 180 $ 243 Foreign 6,757 2,151 1,949 Total $ 7,406 $ 2,331 $ 2,192 |
Schedule of effective tax rate reconciliation | Year ended December 31, 2022 2021 2020 Tax Rate Tax Rate Tax Rate Theoretical tax benefit $ (29,776 ) 23 % $ (29,201 ) 23 % $ (34,503 ) 23 % Increase (decrease) in tax rate due to: Change in valuation allowance 8,489 (7 )% 14,968 (12 )% 14,622 (10 )% Share-based compensation 14,806 (11 )% 10,184 (8 )% 8,324 (5 )% Tax benefit relating to exercise of disqualified ISO (1,394 ) 1 % (3,069 ) 2 % — 0 % Initial public offering costs (1,800 ) 1 % (5,399 ) 4 % — 0 % Preferred technological enterprise 15,523 (12 )% 14,460 (11 )% 16,757 (11 )% Currency differences 768 1 % 18 0 % (2,998 ) 2 % Other 790 1 % 370 0 % (10 ) 0 % Effective tax $ 7,406 (2 )% $ 2,331 (2 )% $ 2,192 (1 )% |
Schedule of deferred tax assets and liabilities | As of December 31, 2022 2021 Net operating loss carry forwards $ 39,942 $ 35,093 Research and development 9,663 5,538 Initial public offering costs 1,800 3,600 Other temporary differences 3,855 2,577 Carryforward tax credits 1,428 867 Gross deferred tax assets 56,688 47,675 Valuation allowance (55,561 ) (47,072 ) Total deferred tax assets 1,127 603 Deferred tax liabilities: Depreciation and amortization (1,127 ) (603 ) Deferred tax liabilities $ (1,127 ) $ (603 ) Net deferred taxes $ — $ — |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of basic and diluted net loss per share | Year ended December 31, 2022 2021 2020 Numerator: Net loss $ 136,867 $ 129,294 $ 152,203 Undistributed earnings attributable to preferred shareholders — 8,203 18,713 Net loss attributable to ordinary shareholders, basic and diluted $ 136,867 $ 137,497 $ 170,916 Denominator: Weighted-average ordinary shares outstanding 45,804,714 30,332,006 12,048,909 Basic and diluted net loss per share $ (2.99 ) $ (4.53 ) $ (14.19 ) |
GEOGRAPHICAL INFORMATION (Table
GEOGRAPHICAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of revenues attributed to geographic areas based on location of end customers | Year ended December 31, 2022 2021 2020 United States $ 255,495 $ 148,291 $ 77,933 EMEA 162,479 97,292 49,747 Rest of world 101,055 62,567 33,443 $ 519,029 $ 308,150 $ 161,123 |
Schedule of property and equipment, net by geographical areas | As of December 31, 2022 2021 Israel $ 30,260 $ 18,583 United States 3,171 748 Rest of the world 985 268 $ 34,416 $ 19,599 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Doubtful accounts expense | $ 1,622 | $ 594 | ||
Bad debts written off | 1,463 | 609 | ||
Rent expenses | 16,396 | 4,326 | $ 3,287 | |
Severance Costs | 7,289 | 4,608 | 2,721 | |
Maximum annual contributions | 1,551 | 915 | 529 | |
Deferred revenue, revenue recognized | 134,438 | 70,719 | ||
Advertising Expense | 181,447 | 143,472 | $ 129,101 | |
Operating lease right-of-use assets | 80,197 | $ 0 | $ 58,084 | |
Present value of lease liabilities | $ 77,721 | |||
Outstanding share options and RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 4,617,018 | 6,302,344 | 5,909,263 | |
Convertible preferred share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 26,440,239 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Computers, software and electronic equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Computers, software and electronic equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Office furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Office furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 14 years |
Capitalized internal software development costs | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | Shorter of the remaining termof the underlying lease, orestimated useful life of the asset |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0% | 0% | 0% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.89% | 0.68% | 0.30% |
Expected term (in years) | 5 years | 5 years | 5 years |
Expected volatility | 49% | 49% | 47% |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 4.30% | 1.15% | 0.58% |
Expected term (in years) | 7 years | 8 years | 8 years |
Expected volatility | 57% | 50% | 48% |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0% | 0% | 0% |
Employee stock purchase plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0% | ||
Expected term (in years) | 6 months | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.89% | 0.68% | 0.30% |
Expected term (in years) | 5 years | 5 years | 5 years |
Expected volatility | 49% | 49% | 47% |
Minimum | Employee stock purchase plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.46% | ||
Expected volatility | 97% | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 4.30% | 1.15% | 0.58% |
Expected term (in years) | 7 years | 8 years | 8 years |
Expected volatility | 57% | 50% | 48% |
Maximum | Employee stock purchase plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.87% | ||
Expected volatility | 98% |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid expenses | $ 13,610 | $ 12,733 |
Government institutions | 2,268 | 3,520 |
Derivative instruments | 0 | 656 |
Interest to receive | 3,872 | 240 |
Short-term vendor deposits | 3,924 | 282 |
Other current assets | 1,051 | 741 |
Total prepaid expenses and other current assets | $ 24,725 | $ 18,172 |
PROPERTY AND EQUIPMENT, NET (Na
PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 5,913 | $ 2,746 | $ 1,888 |
Capitalized costs related to the development of internal-use software | 4,931 | 3,702 | 1,499 |
Amortization of capitalized software development costs | 1,492 | 547 | 232 |
Net carrying value of capitalized internal-use software | $ 8,233 | $ 4,793 | $ 1,638 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 43,635 | $ 25,173 |
Less accumulated depreciation and amortization | (9,219) | (5,574) |
Property and equipment, net | 34,416 | 19,599 |
Computer, software, and electronic equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 12,569 | 8,095 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6,926 | 4,458 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 13,289 | 6,700 |
Capitalized internal software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,597 | 5,666 |
Capital leases | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 254 | $ 254 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities, Current [Abstract] | ||
Accrued employee compensation and benefits | $ 44,639 | $ 51,953 |
Accrued expenses | 18,983 | 13,149 |
Capital lease – short-term | 0 | 84 |
Derivative instruments | 3,208 | 0 |
Advances from customers | 2,805 | 2,134 |
Income and indirect taxes payable | 4,071 | 2,815 |
Total | $ 73,706 | $ 70,135 |
DERIVATIVES AND HEDGING (Detail
DERIVATIVES AND HEDGING (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Derivative instruments | $ (3,208) | $ 656 |
Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Derivative instruments | (3,208) | 705 |
Not Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Derivative instruments | 0 | (49) |
Foreign exchange contracts | Other current liabilities | Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Derivative instruments | (3,208) | 0 |
Foreign exchange contracts | Prepaid expenses and other current assets | Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Derivative instruments | 0 | 705 |
Foreign exchange contracts | Prepaid expenses and other current assets | Not Designated as Hedging Instrument [Member] | ||
Derivative [Line Items] | ||
Derivative instruments | $ 0 | $ (49) |
DERIVATIVES AND HEDGING (Deta_2
DERIVATIVES AND HEDGING (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||||
Derivative [Line Items] | ||||||
Gain (Loss) Recognized in Other Comprehensive Income on Effective - Portion of Derivative, net | $ (11,386) | $ 953 | $ 0 | |||
Realized Gain on of Derivative Reclassified from Accumulated Other Comprehensive Income (loss) | 7,582 | [1] | (359) | [1] | $ 0 | |
Amount Excluded from Effectiveness Testing Recognized in Income | [2] | (1,801) | 49 | |||
Designated as hedging Instrument | ||||||
Derivative [Line Items] | ||||||
Gain (Loss) Recognized in Other Comprehensive Income on Effective - Portion of Derivative, net | (11,386) | 953 | ||||
Realized Gain on of Derivative Reclassified from Accumulated Other Comprehensive Income (loss) | [1] | 7,582 | (359) | |||
Amount Excluded from Effectiveness Testing Recognized in Income | [2] | 0 | 0 | |||
Not designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Gain (Loss) Recognized in Other Comprehensive Income on Effective - Portion of Derivative, net | 0 | 0 | ||||
Realized Gain on of Derivative Reclassified from Accumulated Other Comprehensive Income (loss) | [1] | 0 | 0 | |||
Amount Excluded from Effectiveness Testing Recognized in Income | [2] | (1,801) | 49 | |||
Foreign exchange contracts | Designated as hedging Instrument | ||||||
Derivative [Line Items] | ||||||
Gain (Loss) Recognized in Other Comprehensive Income on Effective - Portion of Derivative, net | (11,386) | 953 | ||||
Realized Gain on of Derivative Reclassified from Accumulated Other Comprehensive Income (loss) | [1] | 7,582 | (359) | |||
Amount Excluded from Effectiveness Testing Recognized in Income | [2] | 0 | 0 | |||
Foreign exchange contracts | Not designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Gain (Loss) Recognized in Other Comprehensive Income on Effective - Portion of Derivative, net | 0 | 0 | ||||
Realized Gain on of Derivative Reclassified from Accumulated Other Comprehensive Income (loss) | [1] | 0 | 0 | |||
Amount Excluded from Effectiveness Testing Recognized in Income | [2] | $ (1,801) | $ 49 | |||
[1]Classified in operating expenses in the Consolidated Statement of Operations.[2]Includes derivatives not designated as accounting hedge. Classified in financial income (expense), net, in the Consolidated Statement of Operations. |
DERIVATIVES AND HEDGING (Deta_3
DERIVATIVES AND HEDGING (Details 2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Notional amounts of outstanding derivatives | $ 81,557 | $ 43,478 |
Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivatives designated as hedging instruments | 81,557 | 36,013 |
Derivatives not designated as hedging instruments: | 0 | 7,465 |
Foreign exchange contracts | NIS | ||
Derivative [Line Items] | ||
Derivatives designated as hedging instruments | 81,557 | 36,013 |
Foreign exchange contracts | GBP | ||
Derivative [Line Items] | ||
Derivatives not designated as hedging instruments: | 0 | 4,054 |
Foreign exchange contracts | Euro | ||
Derivative [Line Items] | ||
Derivatives not designated as hedging instruments: | 0 | 2,830 |
Foreign exchange contracts | AUD | ||
Derivative [Line Items] | ||
Derivatives not designated as hedging instruments: | $ 0 | $ 581 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | $ 702,680 | $ 604,656 |
Bank Deposits [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 625,000 | 604,000 |
Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 80,888 | 0 |
Foreign exchange contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreign currency derivative contracts | (3,208) | 656 |
Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | 705,888 | 604,000 |
Level 1 [Member] | Bank Deposits [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 625,000 | 604,000 |
Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 80,888 | 0 |
Level 1 [Member] | Foreign exchange contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreign currency derivative contracts | 0 | 0 |
Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | (3,208) | 656 |
Level 2 [Member] | Bank Deposits [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 2 [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 2 [Member] | Foreign exchange contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreign currency derivative contracts | $ (3,208) | $ 656 |
REVOLVING CREDIT FACILITY (Narr
REVOLVING CREDIT FACILITY (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Line of Credit Facility [Line Items] | ||||
Minimum Liquidity Balance | $ 30,000 | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Aggregated principal amount | $ 80,000 | |||
Line of credit facility, interest rate description | Amounts borrowed under the facility accrue interest at the rate equal to one month Libor + 2.6% for amounts of up to $8,000, which will increase to one-month LIBOR plus 2.85% per annum on September 1, 2022, and one-month Libor + 2.85 % per annum for amounts above $8,000, with accrued interest payable monthly | |||
Fee paid per annum on unutilized amounts eligible for drawdown | 0.20% | |||
Paid upfront issuance fees | $ 180 | |||
Unutilized credit facilities available for borrowing | $ 80,000 | 80,000 | ||
Interest expenses | $ 62 | $ 316 | $ 671 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Nov. 13, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Monthly installments | $ 254 | ||
lease liability | $ 0 | $ 84 | |
Undiscounted future payments | $ 2,207 | ||
Term of lease | 3 years |
LEASES (Details)
LEASES (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 19,782 |
2024 | 17,843 |
2025 | 18,176 |
2026 | 12,697 |
2027 | 8,708 |
Thereafter | 6,282 |
Total undiscounted cash flows | 83,488 |
Less: Imputed interest | (5,767) |
Present value of lease liabilities | $ 77,721 |
LEASES (Details 1)
LEASES (Details 1) | Dec. 31, 2022 |
Leases [Abstract] | |
Weighted-average remaining lease term | 4 years 6 months |
Weighted-average discount rate | 3.60% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Bank guarantee to secure lease agreements | $ 6,871 | $ 2,186,000 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 15,185 |
2024 | 7,211 |
2025 | 820 |
Total contractual obligations | $ 23,216 |
FINANCIAL INCOME (EXPENSES), _3
FINANCIAL INCOME (EXPENSES), NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Financial expenses: | |||
Bank charges and other | $ 730 | $ 566 | $ 340 |
Interest on credit facility and amortization of debt issuance fees | 62 | 405 | 671 |
Exchange rate expense, net | 0 | 742 | 0 |
Total financial expenses | 792 | 1,713 | 1,011 |
Financial income: | |||
Exchange rate income, net | 4,687 | 0 | 492 |
Interest income on deposits | 18,659 | 875 | 1,045 |
Total financial income | 23,346 | 875 | 1,537 |
Nonoperating Income (Expense), Total | $ 22,554 | $ (838) | $ 526 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Jun. 10, 2021 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) Investors $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | |
Stockholders Equity Note [Line Items] | ||||
Share-based compensation cost | $ 104,920 | $ 73,529 | $ 64,345 | |
Options granted | shares | 406,575 | |||
Number of ordinary shares reserved and available for grant and issuance | shares | 6,243,273 | 5,087,335 | ||
Share-based compensation | $ 107,202 | $ 75,051 | $ 64,725 | |
Equity method investment, ownership percentage | 25% | |||
Shares reserved for issuance under ESPP | shares | 721,469 | 194,625 | ||
Ordinary shares repurchased under ESPP | shares | 38,239 | |||
Secondary market transaction | ||||
Stockholders Equity Note [Line Items] | ||||
Sale of ordinary shares | shares | 639,739 | |||
Consideration received on sale of ordinary shares | $ 37,718 | |||
Sale of stock, price per share | $ / shares | $ 58.96 | |||
Share-based compensation cost | $ 10,487 | |||
Initial public offering and concurrent private placement | ||||
Stockholders Equity Note [Line Items] | ||||
Net proceeds of deducting underwriting discounts and commissions | $ 591,856 | $ 6,000 | ||
Additional ordinary shares pursuant to underwriters option to purchase | shares | 370,000 | |||
Sale of stock, price per share | $ / shares | $ 155 | |||
Number of share issued | shares | 3,700,000 | |||
Net proceeds after deducting underwriting discounts and commissions. | $ 34,697 | |||
Other issuance costs | $ 4,298 | |||
Outstanding convertible preferred shares converted | shares | 26,440,239 | |||
Number of investors | Investors | 2 | |||
Number of ordinary shares purchased | shares | 967,742 | |||
Gross proceeds of consideration per transaction | $ 150,000 | |||
Deferred offering costs | $ 44,995 | |||
Co-CEO | ||||
Stockholders Equity Note [Line Items] | ||||
Options granted | shares | 91,344 | |||
Share-based compensation | $ 30,424 | |||
2017 share option plan | ||||
Stockholders Equity Note [Line Items] | ||||
Weighted-average grant-date fair value of options granted | $ / shares | $ 69.3 | $ 77 | $ 38.3 | |
Intrinsic value of options exercised | $ 346,600 | $ 321,891 | $ 18,868 | |
Unamortized share-based compensation expense | $ 107,411 | $ 101,027 | $ 31,018 | |
Weighted average period for cost expected to be recognized | 1 year 9 months 14 days | 1 year 11 months 19 days | 1 year 9 months 10 days | |
2021 plan | ||||
Stockholders Equity Note [Line Items] | ||||
Number of ordinary shares reserved and available for grant and issuance | shares | 6,243,273 | |||
Share reserve increased | shares | 2,246,202 | |||
Unrecognized compensation cost related to unvested restricted share units | $ 64,458 | $ 22,821 | ||
Weighted average period for cost expected to be recognized | 1 year 10 months 6 days | 1 year 11 months 23 days |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | ||
Shares available for future grants under the 2021 plan | 6,243,273 | 5,087,335 |
Shares subject to the employee share purchase plan | 721,469 | 194,625 |
Total | 59,319,628 | 56,508,343 |
Ordinary shares | ||
Class of Stock [Line Items] | ||
Ordinary shares reserved for future issuance | 47,737,868 | 44,924,039 |
Outstanding share options and RSUs | ||
Class of Stock [Line Items] | ||
Ordinary shares reserved for future issuance | 4,617,018 | 6,302,344 |
SHAREHOLDERS' EQUITY (Details 1
SHAREHOLDERS' EQUITY (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Options outstanding | ||
Beginning balance | 6,204,605 | |
Granted | 406,575 | |
Exercised | (2,693,614) | |
Expired and forfeited | (117,542) | |
Ending balance | 3,800,024 | 6,204,605 |
Exercisable | 2,126,460 | |
Weighted-Average Exercise Price | ||
Beginning balance | $ 13.53 | |
Granted | 192.91 | |
Exercised | 2.28 | |
Expired and forfeited | 48.88 | |
Ending balance | 39.6 | $ 13.53 |
Exercisable | $ 19.4 | |
Weighted Average Remaining Contractual life, Outstanding | 7 years 5 months 15 days | 7 years 2 months 15 days |
Weighted Average Remaining Contractual life, Exercisable | 6 years 10 months 9 days | |
Aggregate Intrinsic Value, outstanding | $ 347,627 | $ 1,831,568 |
Aggregate Intrinsic Value, exercisable | $ 223,393 |
SHAREHOLDERS' EQUITY (Details 2
SHAREHOLDERS' EQUITY (Details 2) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |
Granted | 406,575 |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |
Balance | 97,739 |
Granted | 865,528 |
Vested | (81,976) |
Canceled | (64,297) |
Balance | 816,994 |
Weighted-Average Fair Value | |
Balance | $ / shares | $ 278.46 |
Weighted-average fair value granted | $ / shares | 116.16 |
Weighted-average fair value vested | $ / shares | 182.21 |
Weighted-average fair value canceled | $ / shares | 149.96 |
Balance | $ / shares | $ 126.29 |
SHAREHOLDERS' EQUITY (Details 3
SHAREHOLDERS' EQUITY (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation, net of amounts capitalized | $ 104,920 | $ 73,529 | $ 64,345 | |
Capitalized share-based compensation expense | 2,282 | 1,522 | 380 | |
Total share-based compensation | 107,202 | 75,051 | 64,725 | |
Cost of revenues | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation, net of amounts capitalized | 10,406 | 7,681 | 2,720 | |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation, net of amounts capitalized | 32,957 | 21,779 | 12,142 | |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation, net of amounts capitalized | 33,457 | 23,135 | 10,068 | |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation, net of amounts capitalized | [1] | $ 28,100 | $ 20,934 | $ 39,415 |
[1]Share-based compensation expenses in 2020 includes costs related to the fair value of fully vested options granted to the Company’s Co-CEO in December 2020 in the amount of $30,424. |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Operating Loss Carryforwards | $ 332,850 | ||
Corporate tax rate | 23% | 23% | 23% |
Tax rate | 21% | ||
Tax rate of development area | 7.50% | ||
Tax rate on dividends distributed from income from preferred technological enterprises | 20% | ||
Tax rate on dividend distributed to foreign corporate shareholder | 4% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic (Israel) | $ (142,527) | $ (132,203) | $ (152,335) |
Foreign | 13,066 | 5,240 | 2,324 |
Loss before income taxes | $ (129,461) | $ (126,963) | $ (150,011) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic (Israel) | $ 649 | $ 180 | $ 243 |
Foreign | 6,757 | 2,151 | 1,949 |
Total | $ 7,406 | $ 2,331 | $ 2,192 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Tax | |||
Theoretical tax benefit | $ (29,776) | $ (29,201) | $ (34,503) |
Increase (decrease) in tax rate due to: | |||
Change in valuation allowance | 8,489 | 14,968 | 14,622 |
Share-based compensation | 14,806 | 10,184 | 8,324 |
Tax benefit relating to exercise of disqualified ISO | (1,394) | (3,069) | 0 |
Initial public offering costs | (1,800) | (5,399) | 0 |
Preferred technological enterprise | 15,523 | 14,460 | 16,757 |
Currency differences | 768 | 18 | (2,998) |
Other | 790 | 370 | (10) |
Effective tax | $ 7,406 | $ 2,331 | $ 2,192 |
Rate | |||
Theoretical tax benefit | 23% | 23% | 23% |
Change in valuation allowance | (7.00%) | (12.00%) | (10.00%) |
Share-based compensation | (11.00%) | (8.00%) | (5.00%) |
Tax benefit relating to exercise of disqualified ISO | 1% | 2% | 0% |
Initial public offering costs | 1% | 4% | 0% |
Preferred technological enterprise | (12.00%) | (11.00%) | (11.00%) |
Currency differences | 1% | 0% | 2% |
Other | 1% | 0% | 0% |
Effective tax | (2.00%) | (2.00%) | (1.00%) |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss carry forwards | $ 39,942 | $ 35,093 |
Research and development | 9,663 | 5,538 |
Initial public offering costs | 1,800 | 3,600 |
Other temporary differences | 3,855 | 2,577 |
Carryforward tax credits | 1,428 | 867 |
Gross deferred tax assets | 56,688 | 47,675 |
Valuation allowance | (55,561) | (47,072) |
Total deferred tax assets | 1,127 | 603 |
Deferred tax liabilities: | ||
Depreciation and amortization | (1,127) | (603) |
Deferred tax liabilities | (1,127) | (603) |
Net deferred taxes | $ 0 | $ 0 |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net loss | $ 136,867 | $ 129,294 | $ 152,203 |
Undistributed earnings attributable to preferred shareholders | 0 | 8,203 | 18,713 |
Net loss attributable to ordinary shareholders, basic and diluted | $ 136,867 | $ 137,497 | $ 170,916 |
Denominator: | |||
Weighted-average ordinary shares outstanding, basic | 45,804,714 | 30,332,006 | 12,048,909 |
Weighted Average Number of Shares Outstanding, Diluted | 45,804,714 | 30,332,006 | 12,048,909 |
Basic net loss per share | $ (2.99) | $ (4.53) | $ (14.19) |
Diluted net loss per share | $ (2.99) | $ (4.53) | $ (14.19) |
GEOGRAPHICAL INFORMATION (Detai
GEOGRAPHICAL INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue, Major Customer [Line Items] | |||
Revenues | $ 519,029 | $ 308,150 | $ 161,123 |
Segment revenue benchmark | Geographic concentration risk | |||
Revenue, Major Customer [Line Items] | |||
Revenues | 519,029 | 308,150 | 161,123 |
United States | Segment revenue benchmark | Geographic concentration risk | |||
Revenue, Major Customer [Line Items] | |||
Revenues | 255,495 | 148,291 | 77,933 |
EMEA | Segment revenue benchmark | Geographic concentration risk | |||
Revenue, Major Customer [Line Items] | |||
Revenues | 162,479 | 97,292 | 49,747 |
Rest of the world | Segment revenue benchmark | Geographic concentration risk | |||
Revenue, Major Customer [Line Items] | |||
Revenues | $ 101,055 | $ 62,567 | $ 33,443 |
GEOGRAPHICAL INFORMATION (Det_2
GEOGRAPHICAL INFORMATION (Details 1) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue, Major Customer [Line Items] | ||
Property and equipment, net | $ 34,416 | $ 19,599 |
Property and equipment | Geographic concentration risk | ||
Revenue, Major Customer [Line Items] | ||
Property and equipment, net | 34,416 | 19,599 |
Israel | Property and equipment | Geographic concentration risk | ||
Revenue, Major Customer [Line Items] | ||
Property and equipment, net | 30,260 | 18,583 |
United States | Property and equipment | Geographic concentration risk | ||
Revenue, Major Customer [Line Items] | ||
Property and equipment, net | 3,171 | 748 |
Rest of the world | Property and equipment | Geographic concentration risk | ||
Revenue, Major Customer [Line Items] | ||
Property and equipment, net | $ 985 | $ 268 |