DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION | 12 Months Ended |
Dec. 31, 2022 shares | |
Entity Central Index Key | 0001847584 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2022 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Current Fiscal Year End Date | --12-31 |
Amendment Flag | false |
Auditor Firm ID | 1281 |
Auditor Location | Tel-Aviv, Israel |
Auditor Name | KOST FORER GABBAY & KASIERER |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-40490 |
Entity Incorporation, State or Country Code | L3 |
Entity Address, Address Line One | 1 Walter Moses St. |
Entity Address, City or Town | Tel Aviv |
Entity Address, Country | IL |
Entity Address, Postal Zip Code | 6789903 |
Title of 12(b) Security | Ordinary shares, no par value |
Trading Symbol | WKME |
Security Exchange Name | NASDAQ |
Entity Common Stock, Shares Outstanding | 86,780,082 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
ICFR Auditor Attestation Flag | false |
Entity Registrant Name | WalkMe Ltd. |
Business Contact [Member] | |
Entity Address, Address Line One | General Counsel |
Entity Address, Address Line Two | 71 Stevenson Street, Floor 20 |
Entity Address, City or Town | San Francisco |
Entity Address, Country | CA |
Entity Address, Postal Zip Code | 94105 |
City Area Code | 855 |
Local Phone Number | 492-5563 |
Contact Personnel Name | Paul Bradley Shinn |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 94,105 | $ 276,889 |
Short-term deposits | 125,231 | 65,478 |
Short-term marketable securities | 42,187 | 0 |
Trade receivables, net of allowances of $2,557 and $2,588 | 45,024 | 37,754 |
Prepaid expenses and other assets | 32,207 | 28,064 |
Short-term restricted deposits | 323 | 295 |
Total current assets | 339,077 | 408,480 |
NON-CURRENT ASSETS: | ||
Other assets | 40,524 | 36,412 |
Long-term marketable securities | 43,334 | 0 |
Long-term restricted deposits | 170 | 544 |
Property and equipment, net | 13,268 | 10,885 |
Operating lease right-of-use assets | 7,003 | 0 |
Intangible assets, net | 349 | 1,815 |
Goodwill | 1,481 | 1,481 |
Total non-current assets | 106,129 | 51,137 |
TOTAL ASSETS | 445,206 | 459,617 |
CURRENT LIABILITIES: | ||
Trade payables | 5,957 | 6,592 |
Employees and payroll accruals | 30,720 | 34,648 |
Accrued expenses and other liabilities | 17,685 | 14,662 |
Operating lease liabilities | 5,009 | 0 |
Deferred revenues | 108,097 | 86,024 |
Total current liabilities | 167,468 | 141,926 |
NON-CURRENT LIABILITIES: | ||
Deferred revenues | 1,613 | 1,288 |
Deferred tax liabilities, net | 7,330 | 4,795 |
Other liabilities | 2,708 | 2,097 |
Operating lease liabilities Long-term | 3,833 | 0 |
Total non-current liabilities | 15,484 | 8,180 |
TOTAL LIABILITIES | 182,952 | 150,106 |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
REDEEMABLE NON-CONTROLLING INTEREST | 8,080 | 23,901 |
SHAREHOLDERS’ EQUITY: | ||
Ordinary shares of no par value - Authorized: 900,000,000 shares at December 31, 2022 and 2021; Issued and outstanding: 86,780,082 and 83,754,006 shares at December 31, 2022 and 2021, respectively | 0 | 0 |
Additional paid-in capital | 688,636 | 610,193 |
Accumulated other comprehensive income (loss) | (1,817) | 455 |
Accumulated deficit | (432,645) | (325,038) |
Total shareholders’ equity | 254,174 | 285,610 |
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY | $ 445,206 | $ 459,617 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICALS) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Trade receivables, net of allowances | $ 2,557 | $ 2,588 |
Common stock, no par value | $ 0 | $ 0 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 86,780,082 | 83,754,006 |
Common stock, shares outstanding | 86,780,082 | 83,754,006 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | |||
Total revenues | $ 245,006 | $ 193,303 | $ 148,306 |
Cost of revenues | |||
Total cost of revenues | 53,884 | 46,657 | 39,158 |
Gross profit | 191,122 | 146,646 | 109,148 |
Research and development | 59,468 | 48,160 | 31,560 |
Sales and marketing | 176,307 | 127,719 | 87,208 |
General and administrative | 65,188 | 48,557 | 33,541 |
Total operating expenses | 300,963 | 224,436 | 152,309 |
Operating loss | (109,841) | (77,790) | (43,161) |
Financial income (expense), net | 5,322 | (9) | (156) |
Loss before income taxes | (104,519) | (77,799) | (43,317) |
Income taxes | (3,831) | (2,494) | (1,708) |
Net loss | (108,350) | (80,293) | (45,025) |
Net loss attributable to non-controlling interest | (743) | (1,169) | (1,311) |
Adjustment attributable to non-controlling interest | (14,979) | 16,689 | 5,487 |
Deemed dividend to ordinary shareholders | 0 | 0 | 4,569 |
Net loss attributable to WalkMe Ltd. | $ (92,628) | $ (95,813) | $ (53,770) |
Net loss per share attributable to WalkMe Ltd. basic | $ (1.09) | $ (1.85) | $ (4.07) |
Net loss per share attributable to WalkMe Ltd. diluted | $ (1.09) | $ (1.85) | $ (4.07) |
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic | 85,116,424 | 51,763,032 | 13,217,183 |
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, diluted | 85,116,424 | 51,763,032 | 13,217,183 |
Subscription | |||
Revenues | |||
Total revenues | $ 220,972 | $ 175,328 | $ 130,303 |
Cost of revenues | |||
Total cost of revenues | 25,990 | 24,025 | 19,141 |
Professional services | |||
Revenues | |||
Total revenues | 24,034 | 17,975 | 18,003 |
Cost of revenues | |||
Total cost of revenues | $ 27,894 | $ 22,632 | $ 20,017 |
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 | $ (108,350) | $ (80,293) | $ (45,025) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (202) | (546) | 205 |
Change in net unrealized gains on marketable securities | 11 | 0 | 0 |
Unrealized gain (loss) on cash flow hedge | (2,180) | 602 | 0 |
Other comprehensive income (loss) | (2,371) | 56 | 205 |
Comprehensive loss | (110,721) | (80,237) | (44,820) |
Less comprehensive loss attributable to redeemable non-controlling interest: | |||
Net loss attributable to redeemable non-controlling interest | (743) | (1,169) | (1,311) |
Foreign currency translation adjustments attributable to redeemable non-controlling interest | (99) | (266) | 100 |
Comprehensive loss attributable to redeemable non-controlling interest | (842) | (1,435) | (1,211) |
Comprehensive loss attributable to WalkMe Ltd. | $ (109,879) | $ (78,802) | $ (43,609) |
CONSOLIDATED STATEMENTS OF CONV
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Convertible Preferred Shares | Ordinary shares | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit | Total |
Beginning balance , convertible preferred share at Dec. 31, 2019 | $ 261,995 | |||||
Beginning balance , convertible preferred share (shares) at Dec. 31, 2019 | 56,969,441 | |||||
Balance at Dec. 31, 2019 | $ 0 | $ 7,636 | $ 26 | $ (197,631) | $ (189,969) | |
Balance (shares) at Dec. 31, 2019 | 12,481,053 | |||||
Issuance of Series F convertible preferred shares, net | $ 38,495 | |||||
Issuance of Series F convertible preferred shares, net (shares) | 1,755,139 | |||||
Exercise of share options | $ 0 | 789 | 0 | 0 | 789 | |
Exercise of share options (shares) | 1,291,947 | |||||
Share-based compensation | $ 0 | 14,017 | 0 | 0 | 14,017 | |
Deemed dividend to ordinary shareholders | 0 | 4,569 | 0 | (4,569) | 0 | |
Other comprehensive income | 0 | 0 | 105 | 0 | 105 | |
Net loss attributable to WalkMe Ltd. including adjustment to redeemable non-controlling interest | 0 | (5,487) | 0 | (43,714) | (49,201) | |
Ending balance, convertible preferred share at Dec. 31, 2020 | $ 300,490 | |||||
Ending balance, convertible preferred share (shares) at Dec. 31, 2020 | 58,724,580 | |||||
Balance at Dec. 31, 2020 | $ 0 | 21,524 | 131 | (245,914) | (224,259) | |
Balance (shares) at Dec. 31, 2020 | 13,773,000 | |||||
Issuance of Series F convertible preferred shares, net | $ 10,000 | |||||
Issuance of Series F convertible preferred shares, net (shares) | 455,942 | |||||
Issuance of ordinary shares in connection with asset acquisition | 776 | 776 | ||||
Issuance of ordinary shares in connection with asset acquisition (shares) | 33,150 | |||||
Conversion of convertible preferred shares to ordinary shares upon initial public offering | $ (310,490) | |||||
Conversion of convertible preferred shares to ordinary shares upon initial public offering (shares) | (59,180,522) | |||||
Conversion of convertible preferred shares to ordinary shares upon initial public offering | $ 0 | 310,490 | 0 | 0 | 310,490 | |
Conversion of convertible preferred shares to ordinary shares upon initial public offering (shares) | 59,180,522 | |||||
Issuance of ordinary shares upon initial public offering, net of underwriting discounts and commissions and other issuance costs | $ 0 | 263,911 | 0 | 0 | 263,911 | |
Issuance of ordinary shares upon initial public offering, net of underwriting discounts and commissions and other issuance costs (shares) | 9,250,000 | |||||
Exercise of share options and vested RSUs | $ 0 | 2,849 | 0 | 0 | 2,849 | |
Exercise of share options and vested RSUs (shares) | 1,517,334 | |||||
Share-based compensation | $ 0 | 27,332 | 0 | 0 | 27,332 | |
Other comprehensive income | 0 | 324 | 0 | 324 | ||
Net loss attributable to WalkMe Ltd. including adjustment to redeemable non-controlling interest | 0 | (16,689) | 0 | (79,124) | (95,813) | |
Ending balance, convertible preferred share at Dec. 31, 2021 | $ 0 | |||||
Ending balance, convertible preferred share (shares) at Dec. 31, 2021 | 0 | |||||
Balance at Dec. 31, 2021 | $ 0 | 610,193 | 455 | (325,038) | 285,610 | |
Balance (shares) at Dec. 31, 2021 | 83,754,006 | |||||
Exercise of share options and vested RSUs | $ 0 | 5,036 | 0 | 0 | 5,036 | |
Exercise of share options and vested RSUs (shares) | 2,358,586 | |||||
Issuance of ordinary shares under Employee Share Purchase Plan | $ 0 | 7,656 | 0 | 0 | 7,656 | |
Issuance of ordinary shares under Employee Share Purchase Plan (Shares) | 667,490 | |||||
Share-based compensation | 50,772 | 50,772 | ||||
Other comprehensive income | (2,272) | |||||
Net loss attributable to WalkMe Ltd. including adjustment to redeemable non-controlling interest | $ 0 | 14,979 | (107,607) | (92,628) | ||
Ending balance, convertible preferred share at Dec. 31, 2022 | $ 0 | |||||
Ending balance, convertible preferred share (shares) at Dec. 31, 2022 | 0 | |||||
Balance at Dec. 31, 2022 | $ 0 | $ 688,636 | $ (1,817) | $ (432,645) | $ 254,174 | |
Balance (shares) at Dec. 31, 2022 | 86,780,082 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net loss | $ (108,350) | $ (80,293) | $ (45,025) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Share-based compensation | 50,104 | 27,332 | 14,017 |
Depreciation, amortization and impairments | 7,878 | 4,773 | 4,710 |
Operating lease right-of-use assets and liabilities, net | (551) | 0 | 0 |
Finance income | (1,758) | (59) | (189) |
Amortization of premium and accretion of discount on marketable securities, net | (370) | 0 | 0 |
Decrease (increase) in trade receivables, net | (7,417) | (6,976) | 1,657 |
Increase in prepaid expenses and other assets | (8,882) | (29,763) | (6,981) |
Increase (decrease) in trade payables | (354) | 906 | 4,450 |
Increase (decrease) in employees and payroll accruals | (5,782) | 15,010 | 5,003 |
Increase in accrued expenses and other liabilities | 3,215 | 4,574 | 7,941 |
Increase in deferred revenues | 22,924 | 28,577 | 5,220 |
Deferred taxes, net | 2,535 | 1,694 | 544 |
Net cash used in operating activities | (46,808) | (34,225) | (8,653) |
Cash flows from investing activities: | |||
Purchase of intangible assets | 0 | (1,338) | 0 |
Capitalization of software development costs | (4,260) | (3,912) | (1,530) |
Purchase of property and equipment | (2,867) | (2,642) | (822) |
Investment in short-term deposits | (170,500) | (66,260) | (44,000) |
Proceeds from short-term deposits | 112,257 | 45,003 | 0 |
Investment in restricted deposits | 0 | (1,298) | 0 |
Proceeds from restricted deposits | 295 | 2,924 | 623 |
Investment in marketable securities | (84,881) | 0 | 0 |
Net cash used in investing activities | (149,956) | (27,523) | (45,729) |
Cash flows from financing activities: | |||
Proceeds from initial public offering, net of underwriting discounts and commissions and other issuance costs | 0 | 263,922 | 0 |
Proceeds from exercise of options | 5,074 | 2,867 | 789 |
Proceeds from employees share purchase plan | 9,717 | 0 | 0 |
Investment from redeemable non-controlling interest | 0 | 0 | 2,330 |
Issuance of preferred shares, net of issuance costs | 0 | 10,000 | 38,495 |
Net cash provided by financing activities | 14,791 | 276,789 | 41,614 |
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash | (850) | (685) | 248 |
Increase (decrease) in cash, cash equivalents and restricted cash | (182,823) | 214,356 | (12,520) |
Cash, cash equivalents and restricted cash - beginning of year | 277,251 | 62,895 | 75,415 |
Cash, cash equivalents and restricted cash - end of year | 94,428 | 277,251 | 62,895 |
Supplemental disclosures of cash flow information: | |||
Cash paid for income taxes, net of refunds | (572) | 365 | 0 |
Supplemental disclosures of noncash investing and financing activities: | |||
Lease liabilities arising from obtaining right-of-use-assets | 14,240 | 0 | 0 |
Purchase of property and equipment, accrued but not paid | 268 | 180 | 191 |
Issuance of ordinary shares in connection with asset acquisition | 0 | 776 | 0 |
Conversion of convertible preferred shares | 0 | 310,490 | 0 |
Reconciliation of cash, cash equivalents and restricted cash within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows above: | |||
Cash and cash equivalents | 94,105 | 276,889 | 62,328 |
Restricted cash – included in short-term and long-term restricted deposits. | 323 | 362 | 567 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 94,428 | $ 277,251 | $ 62,895 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2022 | |
General [Abstract] | |
GENERAL | NOTE 1: GENERAL WalkMe Ltd. (together with its subsidiaries, The "Company") was incorporated under the laws of Israel and commenced its operations on October 26, 2011. The Company provides a cloud-based Digital Adoption Platform that enables organizations to better realize the value of their software investments. The Digital Adoption Platform drives the success of digital transformation initiatives by empowering the Company’s customers with critical business insights to increase software adoption and improve user experiences for their employees and customers. WalkMe Ltd. has subsidiaries in the US, Australia, United Kingdom, Singapore, Canada, Germany, and Japan. On June 16, 2021, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 9,250,000 shares of its ordinary shares at an offering price of $31.00 per share. The Company received net proceeds of $263,911 after deducting underwriting discounts and commissions of $18,639, and other issuance costs of $4,200. Immediately prior to the closing of the IPO, all convertible preferred shares then outstanding automatically converted into 59,180,522 ordinary shares. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") as set forth in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). a. Principles of consolidation: The consolidated financial statements include accounts of the Company’s wholly-owned subsidiaries as well as the Japanese subsidiary in which the Company controls a majority stake. All intercompany accounts and transactions are eliminated. b. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include, but are not limited to income taxes, share-based compensation, deferred contract acquisition costs, capitalized software development costs, as well as in estimates used in applying the revenue recognition policy. The Company's management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. c. Foreign currency: Most of the Company’s revenues and costs are denominated in U.S. dollar. The Company’s management believes that the dollar is the primary currency of the economic environment in which the Company operate, thus, the functional and reporting currency of the Company is the U.S. dollar, with the exception of its Japanese subsidiary, for which the Japanese Yen is the functional currency. Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with Accounting Standard Codification ("ASC") No. 830 "Foreign Currency Matters." All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the consolidated statements of operations as financial income or expenses, as appropriate. The financial statements of the Japanese subsidiary are translated to U.S. dollars using the balance sheet date exchange rates for assets and liabilities, historical rates of exchange for equity, and average exchange rates in the period for revenues and expenses. The effects of foreign currency translation adjustments are included in shareholders’ equity as a component of accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets. d. Cash and cash equivalents: Cash equivalents are short-term, highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired. As of December 31, 2022 and 2021, the Company’s cash and cash equivalents consisted of $46,105 and $59,770 of cash held in the Company’s checking accounts and $48,000 and $217,119 bank deposits with original maturities of three months or less, respectively. e. Short-term bank deposits: Short-term bank deposits are deposits with maturities of more than three months and less than one year. As of December 31, 2022 and 2021, the Company’s bank deposits are denominated in U.S. dollars and bears yearly interest at weighted average rates of 4.84% and 0.74%. Short-term bank deposits are presented at their cost, including accrued interest. f. Restricted deposits: These deposits are used as security for rental of premises and classified according to the lease agreements’ term. g. Investments in marketable securities : The Company accounts for investments in marketable securities in accordance with ASC No. 320, “Investments - Debt Securities”. Management determines the appropriate classification of its investments at the time of purchase and reevaluates such determinations at each balance sheet date. The Company classifies all of its marketable securities as available-for-sale (“AFS”) as the Company may sell these securities at any time for use in its current operations or for other purposes, even prior to maturity. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, reported in accumulated other comprehensive income (loss) in shareholders' equity. Realized gains and losses on sale of investments are included in financial income, net and are derived using the specific identification method for determining the cost of securities sold. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together with interest on securities is included in financial income, net. For unrealized losses in marketable securities that the Company does not intend to sell before maturity, the Company further evaluates whether declines in fair value below amortized cost are due to credit or non-credit related factors. As of December 31, 2022 there was no other-than-temporary-impairment charge for any unrealized losses. h. Fair value of financial instruments: The Company applies ASC No. 820, "Fair Value Measurements and Disclosures" ("ASC No. 820"), with respect to fair value measurements of all financial assets and liabilities. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1 Inputs: Level 2 Inputs: . Level 3 Inputs: A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Cash equivalents, short term deposits, short term restricted deposit, trade receivable, trade payable, employee and payroll accruals and accrued expenses are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. i. Concentration of credit Risk: Financial instruments that potentially subject the Company to credit risk primarily consist of cash and cash equivalents, short term deposits, restricted deposits, marketable securities and trade receivables. 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 and short-term deposits with financial institutions with high-quality credit ratings and has not experienced any losses in such accounts. Marketable securities are invested in securities denominated in dollar. The Company's marketable securities consist of investments in U.S. Treasuries and U.S. Government Agencies. For trade receivable, the Company is exposed to credit risk in the event of non-payment by customers to the extent of the amounts recorded on the accompanying consolidated balance sheets. As of December 31, 2022 and 2021 and for the years ended on these dates, there were no customers represented balance greater than 10% and no customers represented greater amount than 10% of total revenue. j. Derivative Financial Instruments The Company enters into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks for the exposure to changes in the exchange rate of the New Israeli Shekel (“NIS”) against the U.S. dollar that are associated with forecasted future cash flows and certain current existing assets and liabilities for up to twelve months. The Company’s primary objective in entering into these contracts is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. The Company’s derivative instruments expose the Company to credit risk to the extent that the counterparties may be unable to meet the terms of the contract. The Company seeks to mitigate such risk by limiting its counterparties to major financial institutions. In addition, the potential risk of loss resulting from this type of credit risk is monitored on an ongoing basis. The Company does not use derivative instruments for trading or speculative purposes. The Company accounts for its derivative instruments based on ASC No. 815, “Derivatives and Hedging” (“ASC No. 815”). ASC No. 815 requires the Company to recognize all derivatives on the balance sheets at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. Derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, are recorded as either prepaid expenses and other assets or accrued expenses and other liabilities in the consolidated balance sheets. The Company records changes in the fair value of these derivatives in accumulated other comprehensive income (loss) in the consolidated balance sheets, until the forecasted transaction occurs. Upon occurrence, the Company reclassifies the related gain or loss on the derivative to the same financial statement line item in the consolidated statements of operations to which the derivative relates. As of December 31, 2022 and 2021, the gross notional amount of the Company’s outstanding foreign currency contracts designated as hedging instruments was $50,298 and $32,797 respectively. k. Trade receivables: Trade receivables includes billed and unbilled receivables. Trade receivables are recorded at invoiced amounts and do not bear interest. The Company generally does not require collateral and provides for expected losses. The expectation of collectability is based on a review of credit profiles of customers, contractual terms and conditions, current economic trends, and historical payment experience. The Company regularly reviews the adequacy of its allowances by considering the age of each outstanding invoice and the collection history of each customer and future collection expectations to determine the appropriate amount of allowances. Trade receivables deemed uncollectible are charged against the allowance for doubtful accounts when identified. U nbilled trade receivables represent an unconditional right to consideration for the Company’s performance under the customer contract occurs before invoicing to the customer. As of December 31, 2022 and 2021, unbilled trade receivables of $ and $ , respectively, was included in trade receivables on the Company’s consolidated balance sheets. l. Property and equipment: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Software, computers and peripheral equipment 33 Office furniture and equipment 10-33 Capitalized development costs 33 Leasehold improvement By the shorter of remaining lease term or estimated useful life of the asset m. Long-lived assets: The long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, "Property, Plant and Equipment" ("ASC No. 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the year ended December 31, 2022, the Company recorded an impairment of $2,246 related to certain right-of use and intangible assets. No impairment losses were identified for the year ended December 31, 2021 . n. Leases: On January 1, 2022, the Company adopted ASU No. 2016-02, Leases (ASC 842). The Company determines if an arrangement is a lease and the classification of that lease at inception based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefits from the use of the asset throughout the period, and (3) whether the Company has a right to direct the use of the asset. The Company elected to not recognize a lease liability and a right-of-use (“ROU”) asset for leases with a term of twelve months or less. The Company also elected the practical expedient to not separate lease and non-lease components for its leases. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make minimum lease payments arising from the lease. ROU assets are initially measured at amounts, which represents the present value of the lease payments over the lease, plus any initial direct costs incurred. The lease liability is initially measured at lease commencement date based on the present value of lease payments over the lease term. The implicit rate within the operating leases is generally not determinable, therefore the Company uses the Incremental Borrowing Rate (“IBR”) based on the information available at commencement date in determining the present value of lease payments. The Company’s IBR is estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset is located. Certain leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option. Payments under the Company’s lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease right-of-use assets and liabilities. Variable lease payments are primarily comprised of payments affected by CPI and utility charges. Lease expenses are recognized on a straight-line basis over the lease term. o. Business combinations: The Company accounts for business combinations in accordance with ASC 805, "Business Combinations" (“ASC 805”). ASC 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. Any excess of the fair value of net assets acquired over purchase price is allocated to goodwill and any subsequent changes in estimated contingencies are to be recorded in earnings. Acquisition related costs are expensed to the statement of operations in the period incurred. The Company accounts for a transaction as an asset acquisition when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, or otherwise does not meet the definition of a business. Asset acquisition-related direct costs are capitalized as part of the asset or assets acquired. p. Goodwill and intangible assets: Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill is not amortized, but rather the carrying amounts of these assets are assessed for impairment at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Goodwill impairment, if any, is determined by comparing the reporting unit fair value to its carrying value. An impairment loss is recognized in an amount equal to the excess of the reporting unit’s carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit. There was no goodwill impairment for the years ended December 31, 2022, 2021 and 2020. Intangible assets are amortized on a straight-line basis over the estimated useful life of the respective asset. Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. q. Severance pay: The Israeli Severance Pay Law, 1963 ("Severance Pay Law"), specifies that 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. All of the Company's liability for severance pay is covered by the provisions of Section 14 of the Israeli Severance Pay Law ("Section 14"). Under Section 14 employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, continued 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. As a result, the Company does not recognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in the Company's consolidated balance sheets. Severance expense for the years ended December 31, 2022, 2021 and 2020 amounted to $3,967, $3,490 and $2,495 respectively. r. U.S. defined contribution plan: The U.S. subsidiary has a 401(k) defined contribution plan covering certain employees in the U.S. Effective January 1, 2022. The Company matches 100% of employee contributions to the plan up to a limit of 5% of their eligible compensation. For the year ended December 31, 2022 the U.S. subsidiary recorded expenses for matching contributions of $2,211. s. Contingencies: The Company accounts for its contingent liabilities in accordance with ASC 450, Contingencies ("ASC 450"). A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. t. Revenue recognition: The Company recognizes revenue in accordance with ASC Topic 606, Revenue from contracts with customers (“ASC 606”) and determines revenue recognition through the following steps: 1. Identification of the contract, or contracts, with a customer; 2. Identification of the performance obligations in the contract; 3. Determination of the transaction price; 4. Allocation of the transaction price to the performance obligations in the contract; and 5. Recognition of revenue when, or as, the performance obligations are satisfied. The Company revenues are comprised from Software-as-a-Service (“SaaS”) subscriptions and professional services. The Company solution, which allow the customer to access its hosted platform over the contract period without taking possession of the platform, provided on a subscription basis, and recognized ratably over the contract period. Professional services revenues are recognized as services are performed. The Company recognizes revenue when its customer obtains control of promised services in an amount that reflects the consideration that the company expects to receive in exchange for those services. Subscription services and professional services arrangements are generally non-cancelable and do not allow refunds to customers. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer, excluding taxes assessed by a governmental authority, that are collected by the Company from a customer. For arrangements with multiple performance obligations, which represent promises within an arrangement that are capable of being distinct, the Company allocates revenue to all distinct performance obligations based on their relative stand-alone selling price (“SSP”). The Company uses judgment in determining the SSP. If the SSP is not observable through standalone transactions, the Company estimates the SSP considering available information such as market segment, number of users, geographic factors, and internally approved pricing guidelines related to the performance obligation. The Company typically establish SSP for its products and services, which is reassessed on a periodic basis or when facts and circumstances change. The Company applied the practical expedient in Topic 606 and did not evaluate contracts of one year or less for the existence of a significant financing component. u. Cost to obtain a contract: As part of ASC 340-40, Other assets and deferred costs, the Company capitalizes sales commissions and associated payroll taxes paid to sales personnel that are incremental to the acquisition of customer contracts. The guidance resulted in the capitalization of additional contract acquisition costs, which are subsequently amortized over the period of benefit which is four years by taking into consideration the length of terms in its customer contracts including expected renewals and churn, life of the technology and other factors. Sales commissions for the renewal of a contract are not considered commensurate with the sales commissions paid for the acquisition of the initial contract given a substantive difference in commission rates in proportion to their respective contract values. We have applied the practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Company periodically reviews these deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the years ended December 31, 2022, 2021 and 2020. The following table represents a rollforward of deferred contract acquisition costs: Year ended December 31, 2022 2021 2020 Beginning balance $ 56,374 $ 29,729 $ 20,769 Additions to deferred contract acquisition costs 33,711 41,396 17,160 Amortization of deferred contract acquisition costs (23,688 ) (14,751 ) (8,200 ) Ending balance $ 66,397 $ 56,374 $ 29,729 Deferred contract acquisition costs (to be recognized in next 12 months) $ 26,287 $ 20,405 $ 10,712 Deferred contract acquisition costs, non-current $ 40,110 $ 35,969 $ 19,017 v. Deferred revenues and remaining performance obligations: Deferred revenue primarily consists of billings or payments received in advance of revenue recognition and is recognized as the revenue recognition criteria are met. The Company recognized revenue of $82,080 and $53,570 for the years ended December 31, 2022 and 2021, respectively, that were included in the corresponding contract liability balance at the beginning of the period. Deferred revenue that is anticipated to be recognized during the succeeding 12-months period is recorded as current deferred revenue and the remaining portion is recorded as non-current deferred revenue. For disaggregation of revenue please refer to Note 12. As of December 31, 2022, the total remaining non-cancellable performance obligations under the Company’s contracts with customers was $374,023. Of this amount, the Company expects to recognize revenue of $215,514, or 58%, over the next 12 months, with the remainder to be recognized thereafter. w. Software development costs: The Company capitalizes qualifying internal use software development costs related to its cloud platform. The costs consist of personnel costs (including related benefits and share-based compensation) that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (1) the preliminary project stage is completed, and (2) 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 costs are included in property and equipment, net. These costs are amortized over the estimated useful life of the software, which is three years, on a straight-line basis, which represents the manner in which the expected benefit will be derived. The amortization of costs related to the platform applications is included in cost of revenue in the consolidated statements of operations. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. For the years ended December 31, 2022, 2021 and 2020 the Company capitalized a total amount of $4,955, $3,912 and $1,530 respectively. x. Research and development: Research and development costs include personnel-related costs associated with the Company’s engineering, data science, product and design teams as well as consulting and professional fees, for third-party development resources, third-party licenses for software development tools and allocated overhead costs. Research and development are generally expensed as incurred except for certain internal-use software development costs, which may be capitalized as noted above. y. Advertising expenses: Advertising cost are expensed as incurred. Advertising expense amounted to $15,168, $18,658 and $13,148 for the years ended December 31, 2022, 2021 and 2020, respectively. z. Basic and diluted net loss per share: Basic and diluted net loss per share is computed based on the weighted-average number of shares of ordinary shares outstanding during each year. Diluted loss per share is computed based on the weighted average number of ordinary shares outstanding during the period, plus dilutive potential shares considered outstanding during the period, in accordance with ASC 260-10. Basic and diluted net loss per share of ordinary shares was the same for each period presented as the inclusion of all potential ordinary shares outstanding was anti-dilutive. aa. Share-based compensation: The Company accounts for share-based compensation in accordance with ASC 718, "Compensation – Stock Compensation" ("ASC 718"), including share options and restricted share units (RSUs) granted to employees, directors, and non-employees, and share purchase rights granted under the Employee Share Purchase Plan (“ESPP”) to employees, based on the estimated fair value of the awards on the date of grant. The fair value of each share option granted is estimated using the Black-Scholes option-pricing model and for ESPP awards, the Company uses a Monte Carlo option-pricing model. The determination of the grant-date fair value using an option-pricing model is affected by the fair value of the Company’s ordinary share as well as a number of inputs, of which the most significant are the exercise price, volatility and the expected option term. The fair value of each RSU is based on the fair value of the Company’s ordinary shares on the date of grant. Share-based compensation is generally recognized on a straight-line basis over the requisite service period and based on the accelerated method for performance-based awards. Some of the awards granted are subject to certain performance criteria: accordingly compensation expense is recognized for such awards when it becomes probable that the related performance condition will be satisfied. Forfeitures are accounted for in the period in which they occur. bb. Income taxes: The Company accounts for income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"). This standard prescribes the use of the liability method, whereby deferred tax asset and liability accounts balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value, and if it is more likely than not that some portion of the entire deferred tax asset will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740-10, "Income Taxes". Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements, under which a Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. cc. Recently adopted accounting pronouncements: As an “emerging growth company”, the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election. In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842). The standard requires the recognition of ROU assets and lease liabilities for all leases. The standard requires a modified retrospective transition approach to recognize and measure leases at the initial application. In June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which defers the effective date of ASU 2016-02 for non-public entities to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted the standard as of January 1, 2022, using a modified retrospective transition approach. The Company adopted the ”package of practical expedients”, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. As a result, the consolidated balance sheets as of December 31, 2021 were not restated, continue to be reported under ASC 840, which did not require recognition of operating lease assets and liabilities on the balance sheets, and are not comparative. The adoption of the standard resulted in the recognition of ROU assets and lease liabilities of $13,117 and $14,240, respectively, on January 1, 2022, which included reclassifying deferred rent and rent prepayments as components of the ROU assets. The standard did not have a material impact on the Company's consolidated statements of operations or cash flows. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing a variety of exceptions within the framework of ASC 740. These exceptions include the exception to the incremental approach for intraperiod tax allocation in the event of a loss from continuing operations and income or a gain from other items (such as other comprehensive income), and the exception to using general methodology for the interim period tax accounting for year-to-date losses that exceed anticipated losses. The standard did not have a material impact on the Company's consolidated statements of operations, financial positions or cash flows. dd. Accounting pronouncements not yet adopted: In June |
REDEEMABLE NON-CONTROLLING INTE
REDEEMABLE NON-CONTROLLING INTEREST | 12 Months Ended |
Dec. 31, 2022 | |
Redeemable Noncontrolling Interest, Equity, Redemption Value [Abstract] | |
REDEEMABLE NON-CONTROLLING INTEREST | NOTE 3: REDEEMABLE NON-CONTROLLING INTEREST In January 2019, the Company entered into an agreement with Japan Cloud Computing, L.P. and M30 LLC (collectively, the “Investors”), which was amended on July 26, 2022, to engage in the investment, organization, management, and operation of the Japanese subsidiary that is focused on the distribution of the Company’s products in Japan. As of December 31, 2022, the Company contributed an aggregate amount of approximately $4,750 in cash in exchange for 51% of the outstanding common stock of the Japanese subsidiary. As of December 31, 2022 and 2021, the Company controls a majority stake in the Japanese subsidiary and as a result, the Company consolidated the Japanese subsidiary and all intercompany accounts have been eliminated. The agreement with the minority investors of the Japanese subsidiary contains redemption features whereby the interest held by the minority investors are redeemable either (i) at the option of the minority investors or (ii) at the option of the Company, both beginning on the eighth anniversary of the initial capital contribution. Should the call or put option be exercised, the redemption value would be determined based on a prescribed formula derived from certain financial performance indicators of the Japanese subsidiary and the Company and may be settled, at the Company’s discretion, with Company shares or cash. The balance of the redeemable non-controlling interest is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest’s share of earnings or losses and other comprehensive income or loss, or its estimated redemption value. The resulting changes in the estimated redemption amount (increases or decreases) are recorded with corresponding adjustments against retained earnings or, in the absence of retained earnings, additional paid-in-capital. Since the share redemption feature does not include a share cap these interests are presented on the consolidated balance sheets outside of permanent equity under the caption “Redeemable non-controlling interest”. The following table summarizes the activity in the redeemable non-controlling interests for the period indicated below: Year ended December 31, 2022 2021 2020 Balance, beginning of period $ 23,901 $ 8,647 $ 2,041 Investment by redeemable non-controlling interest - - 2,330 Net loss attributable to redeemable non-controlling interest (743 ) (1,169 ) (1,311 ) Adjustment to redeemable non-controlling interest (14,979 ) 16,689 5,487 Foreign currency translation (99 ) (266 ) 100 Balance, end of period $ 8,080 $ 23,901 $ 8,647 |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | NOTE 4: MARKETABLE SECURITIES The following table summarize the amortized cost, unrealized gains and losses, and fair value of available-for-sale marketable securities as of December 31, 2022. As of December 31, 2021 the Company did not hold any marketable securities. As of December 31, 2022 Amortized cost Gross unrealized losses Gross unrealized gains Fair Value U.S. Treasuries $ 68,084 $ (64 ) $ 86 $ 68,106 U.S. Government Agencies 17,426 (30 ) 19 17,415 Total $ 85,510 $ (94 ) $ 105 $ 85,521 The following table summarizes the amortized cost and fair value of available-for-sale marketable securities as of December 31, 2022 by contractual years-to maturity: As of December 31, 2022 Amortized cost Fair Value Due within one year $ 42,214 $ 42,187 Due between one and three years 43,296 43,334 Total $ 85,510 $ 85,521 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 5: PROPERTY AND EQUIPMENT, NET December 31, 2022 2021 Cost: Software, computers and peripheral equipment $ 8,378 $ 6,388 Office furniture and equipment 887 883 Capitalized development costs 18,750 13,795 Leasehold improvements 3,999 3,971 32,014 25,037 Accumulated depreciation 18,746 14,152 Depreciated cost $ 13,268 $ 10,885 Depreciation expenses were $5,165, $4,478 and $4,666 for the years ended December 31, 2022, 2021 and 2020 respectively. During 2022 and 2021, the Company recorded a reduction of $576 and $753 respectively, to the cost and accumulated depreciation of fully depreciated equipment and leasehold improvements no longer in use, following an assessment made by the Company. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 6: INTANGIBLE ASSETS, NET Acquisition of developed technologies: On April 15, 2021, the Company acquired the technology of Snow-White Labs Ltd. (“Zest”) for a total consideration of $808 consisted from the issuance of 33,150 Company’s ordinary shares with fair value of $776 and the remaining amount was allocated to direct acquisition costs. On October 4, 2021, the Company acquired the technology of Simpo Ltd. (“Simpo”) for a total consideration of $1,306 in cash. Both acquisitions were accounted as an asset acquisition in accordance with ASC 805 as substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset. The purchase price was allocated to the developed technology acquired with an estimated useful life of three years. December 31, 2022 2021 Acquired technology $ 3,004 $ 3,004 Accumulated amortization and Impairment 2,655 1,189 Depreciated cost $ 349 $ 1,815 As of December 31, 2022, the weighted-average remaining useful life of the technology was 1.3 years. The Company recorded $487, $299 and $44 of amortization expense during the years ended December 31, 2022, 2021 and 2020, respectively. During the year ended December 31, 2022 the Company recorded an impairment in the amount of $979 As of December 31, 2022, future amortization expense related to acquired technology was as follows: Year ended December 31, Future expenses 2023 $ 269 2024 80 $ 349 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 7: COMMITMENTS AND CONTINGENT LIABILITIES a. Legal contingencies: From time to time, the Company becomes involved in legal proceedings or is subject to claims arising in its ordinary course of business. Such matters are generally subject to many uncertainties and outcomes are not predictable with assurance. The Company accrues for contingencies when the loss is probable and it can reasonably estimate the amount of any such loss. On October 21, 2022, a former employee filed a putative class action in the Superior Court for the City and County of San Francisco, based on claims that she was misclassified as an exempt employee and that the Company failed to properly reimburse for business expenses, failed to pay the proper rate of pay for paid sick leave, and other claims related to the payment of commissions and derivative of the misclassification claim. On December 16, 2022, the plaintiff filed a First Amended Complaint, adding a cause of action for civil penalties under California’s Private Attorneys General Act (California Labor Code Section 2698, et. Seq.) seeking to recover civil penalties on behalf of herself, other Company employees, and the State of California, for alleged violations of California’s Labor Code violations. The suit seeks monetary and non-monetary damages, including punitive damages, as well as disgorgement of profits, penalties, interest, and attorneys’ fees on behalf of plaintiff and others similarly situated. The Company filed its Answer on January 19, 2023. Although this proceeding is at preliminary stages, the Company believes this lawsuit is without merit and intends to vigorously contest these claims. While the outcome of any complex legal proceeding is inherently unpredictable and subject to significant uncertainties, based upon information presently known to management, the Company believes that the potential liability, if any, will not have a material adverse effect on the Company’s financial condition, cash flows, or results of operations. b. Non-cancellable material commitments: The Company enters into non-cancellable purchase commitments with various parties for mainly hosting services, as well as software products and services in the normal course of business. As of December 31, 2022, the Company’s outstanding non-cancellable material purchase commitments are $21,624. c. Pledges and bank guarantees: As of December 31, 2022, The Company and its subsidiaries holds pledged bank deposits of $493 and obtained bank guarantees of $1,564, in connection with office lease agreements. d. Revolving Credit Facility: In August 2021, the Company entered into a loan and security agreement with Silicon Valley Bank (SVB) which provides for the Revolving Credit Facility. The Company may borrow, repay and re-borrow funds under the Revolving Credit Facility up to the amount of $50,000 for a period of three years. Interest on borrowings under the revolving credit facility accrues as the greater of the Prime Rate or 3.25%. Pursuant to the terms of the Revolving Credit Facility, the Company are also required to pay an yearly fixed fee of $20 for the availability of this facility. Upon utilization of this credit facility certain covenants may apply according to the Revolving Credit Facility agreement. The Revolving Credit Facility is secured by a fixed and floating first priority blanket lien on all assets of the company as well as a negative pledge on the Company’s intellectual property. As of December 31, 2022 this facility remained unutilized. Refer to Note 14 “Subsequent Event”. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 8: LEASES The Company adopted the new accounting standard ASC 842 “Leases” and all related amendments effective as of January 1, 2022. The Company entered into non-cancelable operating lease agreements with various expiration dates through fiscal 2026. Certain lease agreements include options to renew or terminate the lease. The Company does not assume renewals in its determination of the lease term unless the renewals are considered as reasonably assured at lease commencement. The operating lease cost for the year ended December 31, 2022 was $7,049. The amount includes an impairment of $1,267 related to certain right-of-use assets. Supplemental cash flow information related to operating leases was as follows: Year ended December 31, 2022 Cash paid for amounts included in the measurement of lease operating liabilities $ 5,399 Supplemental balance sheet information related to operating leases is as follows: As of December 31, 2022 Operating lease ROU assets $ 7,003 Operating lease liabilities $ 5,009 Operating lease liabilities, long-term $ 3,833 Weighted average remaining lease term (in years) 1.8 Weighted average discount rate 1 % Maturities of operating lease liabilities as of December 31, 2022 are as follows: As of December 31, 2023 $ 5,069 2024 3,391 2025 433 2026 28 Total undiscounted lease payments 8,921 Less: imputed interest (79 ) $ 8,842 In February 2023, an amendment to the Tel-Aviv office agreement was signed, which extends the lease period for additional thirty-six (36) months and an option to extend the term of the lease for an additional periods of up to forty-eight (48) months. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 9: FAIR VALUE MEASUREMENTS The following tables present the fair value of money market funds and marketable securities for the year ended December 31, 2022: December 31, 2022 December 31, 2021 Level 1 Level 2 Level 1 Level 2 Financial Assets: Money market funds $ 290 $ - $ - $ - Foreign currency derivative contracts - - - 602 Marketable securities: U.S. Treasuries - 68,106 - - U.S. Government Agencies - 17,415 - - Total assets measured at fair value $ 290 $ 85,521 $ - $ 602 Financial Liabilities Foreign currency derivative contracts - (1,577 ) - - Total liabilities measured at fair value $ - $ (1,577 ) $ - $ - |
CONVERTIBLE PREFERRED SHARES, S
CONVERTIBLE PREFERRED SHARES, SHAREHOLDERS' EQUITY AND EQUITY INCENTIVE PLAN | 12 Months Ended |
Dec. 31, 2022 | |
Convertible Preferred Shares, Shareholders' Deficit And Equity Incentive Plan [Abstract] | |
CONVERTIBLE PREFERRED SHARES, SHAREHOLDERS' DEFICIT AND EQUITY INCENTIVE PLAN | NOTE 10: CONVERTIBLE PREFERRED SHARES, SHAREHOLDERS’ EQUITY AND EQUITY INCENTIVE PLAN a. Composition of share capital December 31, 2022 December 31, 2021 Authorized Issued and outstanding Authorized Issued and outstanding Number of shares no par value Ordinary shares 900,000,000 86,780,082 900,000,000 83,754,006 b. Ordinary shares: Ordinary shares shall confer on their shareholders all rights in the Company, including the right to vote on any matter at any general meeting, with each ordinary share having voting power of one vote for one ordinary share, the right to receive notice of any General Meeting, the right to receive dividends and to participate in any distribution of surplus assets and funds in the Company. On March 4, 2021, the Company's shareholders approved the change of share capital from NIS 0.01 par value to no par-value. All references to ordinary and convertible preferred shares amounts and per share amounts have been retroactively restated to reflect the change in par value as if it had taken place as of the beginning of the earliest period presented. In connection with the IPO, the Company’s amended and restated articles of association became effective, which authorized the issuance of 900,000,000 ordinary shares, no par value each. c. Convertible preferred shares: In November 2019, the Company entered into a share purchase agreement with certain investors for a total consideration of $45,000. In addition to the initial consideration, the share purchase agreement granted the Company the right to execute additional funding requests up to a total amount of $45,000 for a period of 24 months. As of December 31, 2020 the Company executed additional funding in the aggregate amount of $35,000 out of the available $45,000. On March 25, 2021 the Company executed an additional funding request in the total amount of $10,000, for which 455,942 preferred F shares of no par value each were issued. Upon completion of the IPO, all convertible preferred shares outstanding, totaling 59,180,522 shares, were automatically converted into an equivalent number of ordinary shares on a one-to-one basis and their carrying value of $310,490 was reclassified into shareholders’ equity. d. Share option plan: The Company’s equity incentive plans provide for granting share options, RSUs and restricted share awards to employees, consultants, officers and directors. Each option granted under the Plan expires no later than 10 years from the date of grant. Options and RSUs vest usually over four years of commencement of employment or services. Any option or RSU which are forfeited or not exercised before expiration, become available for future grants. As of December 31, 2022 and 2021, an aggregate of 7,240,782 and 7,857,017 ordinary shares of the Company, respectively are still available for future grants. Share options A summary of the Company's share option activity (except options to non-employee consultants) under the Plan is as follows: Number of options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate Intrinsic value Balance as of December 31, 2021 14,160,792 $ 8.38 7.67 $ 159,366 Granted 1,201,247 $ 13.35 Forfeited (1,425,431 ) $ 12.87 Exercised (1,524,411 ) $ 3.31 $ 12,217 Balance as of December 31, 2022 12,412,197 $ 8.96 6.93 49,209 Exercisable options at end of year 7,446,960 $ 6.30 5.95 $ 43,957 As of December 31, 2022, there was approximately $50,475 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Company's share option plan. That cost is expected to be recognized over a weighted-average period of 3.08 years. The weighted-average grant date fair value of options granted during the years ended December 31, 2022, 2021 and 2020 was $7.32, $13.31 and $5.62, respectively. As of December 31, 2022 and 2021, there were no outstanding options granted to non-employees. Under the provisions of ASC 718, the fair value of each option was estimated on the date of grant using the Black & Scholes option valuation model, using the assumptions noted in the following table: Year ended December 31, 2022 2021 2020 Expected volatility 60% 60% 60% Expected dividend yield - - - Expected term (in years) 5.5-6.98 5-6.55 6.08 Risk free interest 1.98%-3.88% 0.49%-1.06% 0.28%-1.45% Risk-free interest rates are based on the yield from U.S. Treasury zero-coupon bonds with a term equivalent to the expected term of the options. The expected volatility of the price of such shares is based on an analysis of reported data for a peer group of comparable publicly traded companies which were selected based upon industry similarities. The expected term of options granted represents the period of time that options granted are expected to be outstanding, and is determined based on the simplified method in accordance with ASC No. 718-10-S99-1 (SAB No. 110), as adequate historical experience is not available to provide a reasonable estimate. The dividend yield is based on the Company's historical and future expectation of dividends payouts. Historically, the Company has not paid cash dividends and has no foreseeable plans to pay cash dividends in the future. Restricted Share Units Number of RSUs Weighted- Average Grant Date Fair Value Per Share Balance as of December 31, 2021 2,366,373 $ 26.22 Granted 6,466,740 $ 14.24 Forfeited (1,439,112 ) $ 19.88 Exercised (834,175 ) $ 22.84 Balance as of December 31, 2022 6,559,826 $ 16.23 As of December 31, 2022, there was approximately $93,374 of unrecognized share-based compensation expense related to unvested RSUs, which is being recognized over a weighted-average period of 3.06 years based on vesting under the award service conditions. e. Employee Share Purchase Plan In June 2021, the Company adopted the 2021 ESPP. Generally, all of the Company’s employees are eligible to participate if they are employed by the Company. The Company’s ESPP permits participants to purchase the Company’s ordinary shares through contributions in the form of payroll deductions or otherwise to the extent permitted by the Company, of up to 15% of their eligible compensation (as defined in the ESPP). Amounts contributed and accumulated by the participant will be used to purchase the Company’s ordinary shares at the end of each offering period. The purchase price of the shares will be 85% of the lower of the fair market value of the Company’s ordinary shares on the first trading day of the offering period or on the exercise date. As of December 31, 2022 and 2021, a total of 2,161,770 and 1,824,988 ordinary shares of the Company, respectively are reserved for issuance under the ESPP. The Company estimated the fair value of ESPP purchase rights using a Monte-Carlo option pricing model with the following assumptions: Year ended December 31, Year ended 2022 2021 Expected volatility 77%-91.9 41 Expected dividend yield - - Expected term (in years) 0.5 0.57 Risk free interest 0.46%-2.85 0.06 As of December 31, 2022, there was $527 of unrecognized share-based compensation expense related to the ESPP that is expected to be recognized over an average vesting period of 0.2 years. f. Share-based compensation expense by award type was as follows: Year ended December 31 2022 2021 2020 Share options $ 20,167 $ 21,359 $ 14,017 RSUs 27,001 4,842 - ESPP 2,936 1,131 - $ 50,104 $ 27,332 $ 14,017 The share-based compensation expense by line item in the accompanying consolidated statements of operations is summarized as follows: Year ended December 31 2022 2021 2020 Cost of revenues $ 3,896 $ 1,804 $ 201 Research and development 7,285 3,863 1,596 Sales and marketing 19,126 8,205 1,105 General and administrative 19,797 13,460 11,115 $ 50,104 $ 27,332 $ 14,017 g. Third-party share transactions: During the year ended December 31, 2020 the Company facilitated several secondary transactions, in which certain current employees and shareholders, sold a portion of their Ordinary Shares to other shareholders. The Company recorded share-based compensation expenses for the amount realized by the employees in excess of the estimated fair value of their respective shares. In addition, the Company recorded a deemed dividend for the amount paid to other shareholders, in excess of the estimated fair value of their respective shares. The total amount resulted in $8,536 of incremental share-based compensation expense and $4,569 of deemed dividend for the year ended December 31, 2020. |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
TAXES ON INCOME | NOTE 11: TAXES ON INCOME a. Ordinary taxable income in Israel is subject to a corporate tax rate of 23%. The Company applies various benefits allotted to it under the revised Investment Law as per Amendment 73, which includes a number of changes to the Investment Law regimes through regulations that have come into effect from January 1, 2017. Applicable benefits under the new regime include: Introduction of a benefit regime for “Preferred Technology Enterprises” (“PTE”), granting a 12% tax rate in central Israel on income deriving from Benefited Intangible Assets, subject to a number of conditions being fulfilled, including a minimal amount or ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual income derived from exports to large markets. PTE is defined as an enterprise which meets the aforementioned conditions and for which total consolidated revenues of its parent company and all subsidiaries are less than NIS 10 billion. • A 12% capital gains tax rate on the sale of a preferred intangible asset to a foreign affiliated enterprise, provided that the asset was initially purchased from a foreign resident at an amount of NIS 200 million or more. • A withholding tax rate of 20% for dividends paid from PTE income (with an exemption from such withholding tax applying to dividends paid to an Israeli company) may be reduced to 4% on dividends paid to a foreign resident company, subject to certain conditions regarding percentage of foreign ownership of the distributing entity. The Company currently believes it is eligible for The Company’s subsidiaries are separately taxed under the local tax laws of the jurisdiction of incorporation of each entity. b. Loss before income taxes is comprised as follows: Year ended December 31 2022 2021 2020 Israel $ 102,013 $ 68,924 $ 38,941 Foreign 2,506 8,875 4,376 $ 104,519 $ 77,799 $ 43,317 c. Income taxes are comprised as follows: Year ended December 31 2022 2021 2020 Current: Israel $ (93) $ 103 $ 153 Foreign 1,389 697 1,011 Total current taxes 1,296 800 1,164 Deferred: Israel - - - Foreign 2,535 1,694 544 Total deferred taxes 2,535 1,694 544 Total income taxes $ 3,831 $ 2,494 $ 1,708 d. A reconciliation of the Company's theoretical income tax benefit to actual income tax expense is as follows: Year ended December 31 2022 2021 2020 Loss before income taxes $ 104,519 $ 77,799 $ 43,317 Statutory tax rate 23 % 23 % 23 % Theoretical income tax benefit $ (24,039 ) $ (17,894 ) $ (9,963 ) Preferred technology enterprise 11,221 7,582 4,284 Foreign rate differential (300 ) (597 ) 213 Unrecognized tax benefits 1,348 3,159 1,272 Changes in valuation allowance 11,421 7,498 3,827 Share-based compensation 3,745 2,519 1,327 Non-deductible expenses 513 234 790 Other (78 ) (7 ) (42 ) Actual tax expense $ 3,831 $ 2,494 $ 1,708 e. The following table presents the significant components of the Company's deferred taxes: December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 43,437 $ 36,373 Research and development expenses 5,398 4,304 Accruals and reserves 2,088 2,541 Issuance costs 914 1,827 Share-based compensation 4,318 1,576 Operating lease liability 2,115 - Other deferred assets 805 636 Gross deferred tax assets 59,075 47,257 Valuation allowance (51,164 ) (40,019 ) Total deferred tax assets 7,911 7,238 Deferred tax liabilities: Deferred contract costs (13,313 ) (11,687 ) Operating lease ROU asset (1,667 ) - Other deferred tax liabilities (261 ) (346 ) Gross deferred tax liabilities (15,241 ) (12,033 ) Net deferred taxes $ (7,330 ) $ (4,795 ) A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized. The Company has established a valuation allowance to offset certain deferred tax assets at December 31, 2022 and 2021 due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets. f. Net operating losses carry forward: As of December 31, 2022, the Company had approximately $320,934 in net operating loss carryforwards in Israel that can be carried forward indefinitely. As of December 31, 2022, the U.S. subsidiary had $14,478 of federal and $60,833 of state net operating loss carryforwards available to offset future taxable income. If not utilized, the state net operating loss carryforwards will expire in varying amounts between the years ended 2032 and 2042. Federal operating loss carryforwards can be carried forward indefinitely. g. Tax assessments The Company has net operating losses from prior tax periods which may be subjected to examination in future periods. As of December 31, 2022, the Company’s tax years until December 31, 2017 are subject to statute of limitation in Israel. As of that date, the U.S. subsidiary’s tax years until December 31, 2018 are subject to statute of limitation in the U.S. h. Unrecognized tax benefits Consistent with the provisions of ASC 740, Income Taxes, the Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The following table shows the changes in the gross amount of unrecognized tax benefits as of December 31, 2022, 2021 and 2020: Unrecognized Tax Benefits Balance - December 31, 2019 437 Increases related to prior years’ tax positions 209 Increases related to current years’ tax positions 1,063 Balance - December 31, 2020 1,709 Increases related to prior years’ tax positions 175 Increases related to current years’ tax positions 2,984 Balance - December 31, 2021 4,868 Decrease related to prior years’ tax positions (287 ) Increases related to current years’ tax positions 1,635 Balance - December 31, 2022 $ 6,216 As of December 31, 2022, the total amount of gross unrecognized tax benefits that would favorably impact the Company’s effective tax rate, if recognized, was $2,708. The remaining amount of $3,508 would be offset by the reversal of related deferred tax assets which are subject to a full valuation allowance. The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2022, the Company has accumulated $251 in both interest and penalties related to uncertain tax positions. Although the Company believes that it has adequately provided for any reasonably foreseeable outcomes related to tax audits and settlement, there is no assurance that the final tax outcome of its tax audits will not be different from that which is reflected in the Company’s income tax provisions. |
REPORTING SEGMENTS AND GEOGRAPH
REPORTING SEGMENTS AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
REPORTING SEGMENTS AND GEOGRAPHIC INFORMATION | NOTE 12: REPORTING SEGMENTS AND GEOGRAPHIC INFORMATION a. Operating segments The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, which is the Company’s chief executive officer, in deciding how to make operating decisions, allocate resources and assess performance. The Company’s chief operating decision maker allocates resources and assesses performance at the consolidated level. b. Geographical information The following table summarizes revenue by region based on the shipping address of customers: Year ended December 31, 2022 2021 2020 United States 172,733 135,291 105,321 Rest of world 71,510 56,914 42,138 Israel 763 1,098 847 $ 245,006 $ 193,303 $ 148,306 Other than the United States, no other individual country accounted for 10% or more of total revenue for the years ended December 31, 2022, 2021 and 2020. The following table summarizes long-lived assets, net by region: Year ended December 31, 2022 2021 Israel $ 11,537 $ 8,829 United States 6,800 1,778 Rest of world 1,934 278 Total long-lived assets, net $ 20,271 $ 10,885 |
NET LOSS PER SHARE ATTRIBUTABLE
NET LOSS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS | NOTE 13: NET LOSS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS The following table sets forth the computation of basic and diluted net loss per share attributable to ordinary shareholders for the periods presented: Year ended December 31, 2022 2021 2020 Numerator: Net loss $ (108,350 ) $ (80,293 ) $ (45,025 ) Net loss attributable to non-controlling interest (743 ) (1,169 ) (1,311 ) Adjustment attributable to non-controlling interest (14,979 ) 16,689 5,487 Deemed dividend to ordinary shareholders - - 4,569 Net loss attributable to WalkMe Ltd. $ (92,628 ) $ (95,813 ) $ (53,770 ) Denominator: Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted 85,116,424 51,763,032 13,217,183 Net loss per share attributable to ordinary shareholders, basic and diluted $ (1.09 ) $ (1.85 ) $ (4.07 ) The potential shares of ordinary shares that were excluded from the computation of diluted net loss per share attributable to ordinary shareholders for the periods presented because including them would have been anti-dilutive are as follows: Year ended December 31, 2022 2021 2020 Convertible preferred shares - 26,972,186 58,724,580 RSU’s 5,759,365 732,157 - Outstanding share options and share purchase rights under ESPP 13,676,853 14,143,816 10,428,813 Total 19,436,218 41,848,159 69,153,393 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 14: SUBSEQUENT EVENT On March 10, 2023, the Federal Deposit Insurance Corporation (the “FDIC”) took control of Silicon Valley Bank (“SVB”) and created the National Bank of Santa Clara to hold the deposits after SVB was unable to continue its operations. On March 12, 2023, a joint statement by the U.S. Department of the Treasury, Federal Reserve Bank and FDIC was released stating that depositors will have access to all of their money starting Monday, March 13, 2023 and no losses associated with the resolution of SVB will be borne by the taxpayer. As of March 14, 2023, the Company holds approximately $15,700 with SVB and had a $50,000 unutilized revolving credit facility. At this time the Company is evaluating future accessibility to the revolving credit facility. Refer to Note 7 “Commitments and Contingent Liabilities“. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Principles of consolidation: | a. Principles of consolidation: The consolidated financial statements include accounts of the Company’s wholly-owned subsidiaries as well as the Japanese subsidiary in which the Company controls a majority stake. All intercompany accounts and transactions are eliminated. |
Use of estimates: | b. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include, but are not limited to income taxes, share-based compensation, deferred contract acquisition costs, capitalized software development costs, as well as in estimates used in applying the revenue recognition policy. The Company's management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Foreign currency: | c. Foreign currency: Most of the Company’s revenues and costs are denominated in U.S. dollar. The Company’s management believes that the dollar is the primary currency of the economic environment in which the Company operate, thus, the functional and reporting currency of the Company is the U.S. dollar, with the exception of its Japanese subsidiary, for which the Japanese Yen is the functional currency. Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with Accounting Standard Codification ("ASC") No. 830 "Foreign Currency Matters." All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the consolidated statements of operations as financial income or expenses, as appropriate. The financial statements of the Japanese subsidiary are translated to U.S. dollars using the balance sheet date exchange rates for assets and liabilities, historical rates of exchange for equity, and average exchange rates in the period for revenues and expenses. The effects of foreign currency translation adjustments are included in shareholders’ equity as a component of accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets. |
Cash and cash equivalents: | d. Cash and cash equivalents: Cash equivalents are short-term, highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired. As of December 31, 2022 and 2021, the Company’s cash and cash equivalents consisted of $46,105 and $59,770 of cash held in the Company’s checking accounts and $48,000 and $217,119 bank deposits with original maturities of three months or less, respectively. |
Short-term bank deposits: | e. Short-term bank deposits: Short-term bank deposits are deposits with maturities of more than three months and less than one year. As of December 31, 2022 and 2021, the Company’s bank deposits are denominated in U.S. dollars and bears yearly interest at weighted average rates of 4.84% and 0.74%. Short-term bank deposits are presented at their cost, including accrued interest. |
Restricted deposits: | f. Restricted deposits: These deposits are used as security for rental of premises and classified according to the lease agreements’ term. |
Investments in marketable securities | g. Investments in marketable securities : The Company accounts for investments in marketable securities in accordance with ASC No. 320, “Investments - Debt Securities”. Management determines the appropriate classification of its investments at the time of purchase and reevaluates such determinations at each balance sheet date. The Company classifies all of its marketable securities as available-for-sale (“AFS”) as the Company may sell these securities at any time for use in its current operations or for other purposes, even prior to maturity. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, reported in accumulated other comprehensive income (loss) in shareholders' equity. Realized gains and losses on sale of investments are included in financial income, net and are derived using the specific identification method for determining the cost of securities sold. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together with interest on securities is included in financial income, net. For unrealized losses in marketable securities that the Company does not intend to sell before maturity, the Company further evaluates whether declines in fair value below amortized cost are due to credit or non-credit related factors. As of December 31, 2022 there was no other-than-temporary-impairment charge for any unrealized losses. |
Fair value of financial instruments: | h. Fair value of financial instruments: The Company applies ASC No. 820, "Fair Value Measurements and Disclosures" ("ASC No. 820"), with respect to fair value measurements of all financial assets and liabilities. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1 Inputs: Level 2 Inputs: . Level 3 Inputs: A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Cash equivalents, short term deposits, short term restricted deposit, trade receivable, trade payable, employee and payroll accruals and accrued expenses are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment date. |
Concentration of credit Risk: | i. Concentration of credit Risk: Financial instruments that potentially subject the Company to credit risk primarily consist of cash and cash equivalents, short term deposits, restricted deposits, marketable securities and trade receivables. 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 and short-term deposits with financial institutions with high-quality credit ratings and has not experienced any losses in such accounts. Marketable securities are invested in securities denominated in dollar. The Company's marketable securities consist of investments in U.S. Treasuries and U.S. Government Agencies. For trade receivable, the Company is exposed to credit risk in the event of non-payment by customers to the extent of the amounts recorded on the accompanying consolidated balance sheets. As of December 31, 2022 and 2021 and for the years ended on these dates, there were no customers represented balance greater than 10% and no customers represented greater amount than 10% of total revenue. |
Derivative Financial Instruments | j. Derivative Financial Instruments The Company enters into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks for the exposure to changes in the exchange rate of the New Israeli Shekel (“NIS”) against the U.S. dollar that are associated with forecasted future cash flows and certain current existing assets and liabilities for up to twelve months. The Company’s primary objective in entering into these contracts is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. The Company’s derivative instruments expose the Company to credit risk to the extent that the counterparties may be unable to meet the terms of the contract. The Company seeks to mitigate such risk by limiting its counterparties to major financial institutions. In addition, the potential risk of loss resulting from this type of credit risk is monitored on an ongoing basis. The Company does not use derivative instruments for trading or speculative purposes. The Company accounts for its derivative instruments based on ASC No. 815, “Derivatives and Hedging” (“ASC No. 815”). ASC No. 815 requires the Company to recognize all derivatives on the balance sheets at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. Derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, are recorded as either prepaid expenses and other assets or accrued expenses and other liabilities in the consolidated balance sheets. The Company records changes in the fair value of these derivatives in accumulated other comprehensive income (loss) in the consolidated balance sheets, until the forecasted transaction occurs. Upon occurrence, the Company reclassifies the related gain or loss on the derivative to the same financial statement line item in the consolidated statements of operations to which the derivative relates. As of December 31, 2022 and 2021, the gross notional amount of the Company’s outstanding foreign currency contracts designated as hedging instruments was $50,298 and $32,797 respectively. |
Trade receivables: | k. Trade receivables: Trade receivables includes billed and unbilled receivables. Trade receivables are recorded at invoiced amounts and do not bear interest. The Company generally does not require collateral and provides for expected losses. The expectation of collectability is based on a review of credit profiles of customers, contractual terms and conditions, current economic trends, and historical payment experience. The Company regularly reviews the adequacy of its allowances by considering the age of each outstanding invoice and the collection history of each customer and future collection expectations to determine the appropriate amount of allowances. Trade receivables deemed uncollectible are charged against the allowance for doubtful accounts when identified. U nbilled trade receivables represent an unconditional right to consideration for the Company’s performance under the customer contract occurs before invoicing to the customer. As of December 31, 2022 and 2021, unbilled trade receivables of $ and $ , respectively, was included in trade receivables on the Company’s consolidated balance sheets. |
Property and equipment: | l. Property and equipment: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Software, computers and peripheral equipment 33 Office furniture and equipment 10-33 Capitalized development costs 33 Leasehold improvement By the shorter of remaining lease term or estimated useful life of the asset |
Long-lived assets | m. Long-lived assets: The long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, "Property, Plant and Equipment" ("ASC No. 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the year ended December 31, 2022, the Company recorded an impairment of $2,246 related to certain right-of use and intangible assets. No impairment losses were identified for the year ended December 31, 2021 . |
Leases | n. Leases: On January 1, 2022, the Company adopted ASU No. 2016-02, Leases (ASC 842). The Company determines if an arrangement is a lease and the classification of that lease at inception based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefits from the use of the asset throughout the period, and (3) whether the Company has a right to direct the use of the asset. The Company elected to not recognize a lease liability and a right-of-use (“ROU”) asset for leases with a term of twelve months or less. The Company also elected the practical expedient to not separate lease and non-lease components for its leases. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make minimum lease payments arising from the lease. ROU assets are initially measured at amounts, which represents the present value of the lease payments over the lease, plus any initial direct costs incurred. The lease liability is initially measured at lease commencement date based on the present value of lease payments over the lease term. The implicit rate within the operating leases is generally not determinable, therefore the Company uses the Incremental Borrowing Rate (“IBR”) based on the information available at commencement date in determining the present value of lease payments. The Company’s IBR is estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset is located. Certain leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option. Payments under the Company’s lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease right-of-use assets and liabilities. Variable lease payments are primarily comprised of payments affected by CPI and utility charges. Lease expenses are recognized on a straight-line basis over the lease term. |
Business combinations: | o. Business combinations: The Company accounts for business combinations in accordance with ASC 805, "Business Combinations" (“ASC 805”). ASC 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. Any excess of the fair value of net assets acquired over purchase price is allocated to goodwill and any subsequent changes in estimated contingencies are to be recorded in earnings. Acquisition related costs are expensed to the statement of operations in the period incurred. The Company accounts for a transaction as an asset acquisition when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, or otherwise does not meet the definition of a business. Asset acquisition-related direct costs are capitalized as part of the asset or assets acquired. |
Goodwill and intangible assets: | p. Goodwill and intangible assets: Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill is not amortized, but rather the carrying amounts of these assets are assessed for impairment at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Goodwill impairment, if any, is determined by comparing the reporting unit fair value to its carrying value. An impairment loss is recognized in an amount equal to the excess of the reporting unit’s carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit. There was no goodwill impairment for the years ended December 31, 2022, 2021 and 2020. Intangible assets are amortized on a straight-line basis over the estimated useful life of the respective asset. Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. |
Severance pay: | q. Severance pay: The Israeli Severance Pay Law, 1963 ("Severance Pay Law"), specifies that 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. All of the Company's liability for severance pay is covered by the provisions of Section 14 of the Israeli Severance Pay Law ("Section 14"). Under Section 14 employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, continued 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. As a result, the Company does not recognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in the Company's consolidated balance sheets. Severance expense for the years ended December 31, 2022, 2021 and 2020 amounted to $3,967, $3,490 and $2,495 respectively. |
U.S. defined contribution plan | r. U.S. defined contribution plan: The U.S. subsidiary has a 401(k) defined contribution plan covering certain employees in the U.S. Effective January 1, 2022. The Company matches 100% of employee contributions to the plan up to a limit of 5% of their eligible compensation. For the year ended December 31, 2022 the U.S. subsidiary recorded expenses for matching contributions of $2,211. |
Contingencies: | s. Contingencies: The Company accounts for its contingent liabilities in accordance with ASC 450, Contingencies ("ASC 450"). A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. |
Revenue recognition: | t. Revenue recognition: The Company recognizes revenue in accordance with ASC Topic 606, Revenue from contracts with customers (“ASC 606”) and determines revenue recognition through the following steps: 1. Identification of the contract, or contracts, with a customer; 2. Identification of the performance obligations in the contract; 3. Determination of the transaction price; 4. Allocation of the transaction price to the performance obligations in the contract; and 5. Recognition of revenue when, or as, the performance obligations are satisfied. The Company revenues are comprised from Software-as-a-Service (“SaaS”) subscriptions and professional services. The Company solution, which allow the customer to access its hosted platform over the contract period without taking possession of the platform, provided on a subscription basis, and recognized ratably over the contract period. Professional services revenues are recognized as services are performed. The Company recognizes revenue when its customer obtains control of promised services in an amount that reflects the consideration that the company expects to receive in exchange for those services. Subscription services and professional services arrangements are generally non-cancelable and do not allow refunds to customers. The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer, excluding taxes assessed by a governmental authority, that are collected by the Company from a customer. For arrangements with multiple performance obligations, which represent promises within an arrangement that are capable of being distinct, the Company allocates revenue to all distinct performance obligations based on their relative stand-alone selling price (“SSP”). The Company uses judgment in determining the SSP. If the SSP is not observable through standalone transactions, the Company estimates the SSP considering available information such as market segment, number of users, geographic factors, and internally approved pricing guidelines related to the performance obligation. The Company typically establish SSP for its products and services, which is reassessed on a periodic basis or when facts and circumstances change. The Company applied the practical expedient in Topic 606 and did not evaluate contracts of one year or less for the existence of a significant financing component. |
Cost to obtain a contract: | u. Cost to obtain a contract: As part of ASC 340-40, Other assets and deferred costs, the Company capitalizes sales commissions and associated payroll taxes paid to sales personnel that are incremental to the acquisition of customer contracts. The guidance resulted in the capitalization of additional contract acquisition costs, which are subsequently amortized over the period of benefit which is four years by taking into consideration the length of terms in its customer contracts including expected renewals and churn, life of the technology and other factors. Sales commissions for the renewal of a contract are not considered commensurate with the sales commissions paid for the acquisition of the initial contract given a substantive difference in commission rates in proportion to their respective contract values. We have applied the practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Company periodically reviews these deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the years ended December 31, 2022, 2021 and 2020. The following table represents a rollforward of deferred contract acquisition costs: Year ended December 31, 2022 2021 2020 Beginning balance $ 56,374 $ 29,729 $ 20,769 Additions to deferred contract acquisition costs 33,711 41,396 17,160 Amortization of deferred contract acquisition costs (23,688 ) (14,751 ) (8,200 ) Ending balance $ 66,397 $ 56,374 $ 29,729 Deferred contract acquisition costs (to be recognized in next 12 months) $ 26,287 $ 20,405 $ 10,712 Deferred contract acquisition costs, non-current $ 40,110 $ 35,969 $ 19,017 |
Deferred revenues and remaining performance obligations: | v. Deferred revenues and remaining performance obligations: Deferred revenue primarily consists of billings or payments received in advance of revenue recognition and is recognized as the revenue recognition criteria are met. The Company recognized revenue of $82,080 and $53,570 for the years ended December 31, 2022 and 2021, respectively, that were included in the corresponding contract liability balance at the beginning of the period. Deferred revenue that is anticipated to be recognized during the succeeding 12-months period is recorded as current deferred revenue and the remaining portion is recorded as non-current deferred revenue. For disaggregation of revenue please refer to Note 12. As of December 31, 2022, the total remaining non-cancellable performance obligations under the Company’s contracts with customers was $374,023. Of this amount, the Company expects to recognize revenue of $215,514, or 58%, over the next 12 months, with the remainder to be recognized thereafter. |
Software development costs: | w. Software development costs: The Company capitalizes qualifying internal use software development costs related to its cloud platform. The costs consist of personnel costs (including related benefits and share-based compensation) that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (1) the preliminary project stage is completed, and (2) 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 costs are included in property and equipment, net. These costs are amortized over the estimated useful life of the software, which is three years, on a straight-line basis, which represents the manner in which the expected benefit will be derived. The amortization of costs related to the platform applications is included in cost of revenue in the consolidated statements of operations. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. For the years ended December 31, 2022, 2021 and 2020 the Company capitalized a total amount of $4,955, $3,912 and $1,530 respectively. |
Research and development: | x. Research and development: Research and development costs include personnel-related costs associated with the Company’s engineering, data science, product and design teams as well as consulting and professional fees, for third-party development resources, third-party licenses for software development tools and allocated overhead costs. Research and development are generally expensed as incurred except for certain internal-use software development costs, which may be capitalized as noted above. |
Advertising expenses: | y. Advertising expenses: Advertising cost are expensed as incurred. Advertising expense amounted to $15,168, $18,658 and $13,148 for the years ended December 31, 2022, 2021 and 2020, respectively. |
Basic and diluted net loss per share: | z. Basic and diluted net loss per share: Basic and diluted net loss per share is computed based on the weighted-average number of shares of ordinary shares outstanding during each year. Diluted loss per share is computed based on the weighted average number of ordinary shares outstanding during the period, plus dilutive potential shares considered outstanding during the period, in accordance with ASC 260-10. Basic and diluted net loss per share of ordinary shares was the same for each period presented as the inclusion of all potential ordinary shares outstanding was anti-dilutive. |
Share-based compensation: | aa. Share-based compensation: The Company accounts for share-based compensation in accordance with ASC 718, "Compensation – Stock Compensation" ("ASC 718"), including share options and restricted share units (RSUs) granted to employees, directors, and non-employees, and share purchase rights granted under the Employee Share Purchase Plan (“ESPP”) to employees, based on the estimated fair value of the awards on the date of grant. The fair value of each share option granted is estimated using the Black-Scholes option-pricing model and for ESPP awards, the Company uses a Monte Carlo option-pricing model. The determination of the grant-date fair value using an option-pricing model is affected by the fair value of the Company’s ordinary share as well as a number of inputs, of which the most significant are the exercise price, volatility and the expected option term. The fair value of each RSU is based on the fair value of the Company’s ordinary shares on the date of grant. Share-based compensation is generally recognized on a straight-line basis over the requisite service period and based on the accelerated method for performance-based awards. Some of the awards granted are subject to certain performance criteria: accordingly compensation expense is recognized for such awards when it becomes probable that the related performance condition will be satisfied. Forfeitures are accounted for in the period in which they occur. |
Income taxes: | bb. Income taxes: The Company accounts for income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"). This standard prescribes the use of the liability method, whereby deferred tax asset and liability accounts balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value, and if it is more likely than not that some portion of the entire deferred tax asset will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740-10, "Income Taxes". Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements, under which a Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. |
Recently adopted accounting pronouncements: | cc. Recently adopted accounting pronouncements: As an “emerging growth company”, the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election. In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842). The standard requires the recognition of ROU assets and lease liabilities for all leases. The standard requires a modified retrospective transition approach to recognize and measure leases at the initial application. In June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which defers the effective date of ASU 2016-02 for non-public entities to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company adopted the standard as of January 1, 2022, using a modified retrospective transition approach. The Company adopted the ”package of practical expedients”, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. As a result, the consolidated balance sheets as of December 31, 2021 were not restated, continue to be reported under ASC 840, which did not require recognition of operating lease assets and liabilities on the balance sheets, and are not comparative. The adoption of the standard resulted in the recognition of ROU assets and lease liabilities of $13,117 and $14,240, respectively, on January 1, 2022, which included reclassifying deferred rent and rent prepayments as components of the ROU assets. The standard did not have a material impact on the Company's consolidated statements of operations or cash flows. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing a variety of exceptions within the framework of ASC 740. These exceptions include the exception to the incremental approach for intraperiod tax allocation in the event of a loss from continuing operations and income or a gain from other items (such as other comprehensive income), and the exception to using general methodology for the interim period tax accounting for year-to-date losses that exceed anticipated losses. The standard did not have a material impact on the Company's consolidated statements of operations, financial positions or cash flows. |
Accounting pronouncements not yet adopted: | dd. Accounting pronouncements not yet adopted: In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The guidance will be effective for the Company beginning January 1, 2023, and interim periods therein. The Company has evaluated the effect of ASU 2016-13 and expects no material impact on the Company’s consolidated financial statements and disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment depreciation rates | % Software, computers and peripheral equipment 33 Office furniture and equipment 10-33 Capitalized development costs 33 Leasehold improvement By the shorter of remaining lease term or estimated useful life of the asset |
Schedule of deferred contract acquisition costs | Year ended December 31, 2022 2021 2020 Beginning balance $ 56,374 $ 29,729 $ 20,769 Additions to deferred contract acquisition costs 33,711 41,396 17,160 Amortization of deferred contract acquisition costs (23,688 ) (14,751 ) (8,200 ) Ending balance $ 66,397 $ 56,374 $ 29,729 Deferred contract acquisition costs (to be recognized in next 12 months) $ 26,287 $ 20,405 $ 10,712 Deferred contract acquisition costs, non-current $ 40,110 $ 35,969 $ 19,017 |
REDEEMABLE NON-CONTROLLING IN_2
REDEEMABLE NON-CONTROLLING INTEREST (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Redeemable Noncontrolling Interest, Equity, Redemption Value [Abstract] | |
Schedule of redeemable non-controlling interests | Year ended December 31, 2022 2021 2020 Balance, beginning of period $ 23,901 $ 8,647 $ 2,041 Investment by redeemable non-controlling interest - - 2,330 Net loss attributable to redeemable non-controlling interest (743 ) (1,169 ) (1,311 ) Adjustment to redeemable non-controlling interest (14,979 ) 16,689 5,487 Foreign currency translation (99 ) (266 ) 100 Balance, end of period $ 8,080 $ 23,901 $ 8,647 |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of amortized cost, unrealized gains and losses, and fair value of available-for-sale marketable securities | As of December 31, 2022 Amortized cost Gross unrealized losses Gross unrealized gains Fair Value U.S. Treasuries $ 68,084 $ (64 ) $ 86 $ 68,106 U.S. Government Agencies 17,426 (30 ) 19 17,415 Total $ 85,510 $ (94 ) $ 105 $ 85,521 |
Schedule of contractual years-to maturity of available-for-sale marketable securities | As of December 31, 2022 Amortized cost Fair Value Due within one year $ 42,214 $ 42,187 Due between one and three years 43,296 43,334 Total $ 85,510 $ 85,521 |
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 Cost: Software, computers and peripheral equipment $ 8,378 $ 6,388 Office furniture and equipment 887 883 Capitalized development costs 18,750 13,795 Leasehold improvements 3,999 3,971 32,014 25,037 Accumulated depreciation 18,746 14,152 Depreciated cost $ 13,268 $ 10,885 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of developed technology acquired with an estimated useful life | December 31, 2022 2021 Acquired technology $ 3,004 $ 3,004 Accumulated amortization and Impairment 2,655 1,189 Depreciated cost $ 349 $ 1,815 |
Schedule of future amortization expense | Year ended December 31, Future expenses 2023 $ 269 2024 80 $ 349 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of supplemental cash flow information related to operating leases | Year ended December 31, 2022 Cash paid for amounts included in the measurement of lease operating liabilities $ 5,399 |
Schedule of supplemental balance sheet information related to operating leases | As of December 31, 2022 Operating lease ROU assets $ 7,003 Operating lease liabilities $ 5,009 Operating lease liabilities, long-term $ 3,833 Weighted average remaining lease term (in years) 1.8 Weighted average discount rate 1 % |
Schedule of maturities of operating lease liabilities | As of December 31, 2023 $ 5,069 2024 3,391 2025 433 2026 28 Total undiscounted lease payments 8,921 Less: imputed interest (79 ) $ 8,842 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of money market funds and marketable securities | December 31, 2022 December 31, 2021 Level 1 Level 2 Level 1 Level 2 Financial Assets: Money market funds $ 290 $ - $ - $ - Foreign currency derivative contracts - - - 602 Marketable securities: U.S. Treasuries - 68,106 - - U.S. Government Agencies - 17,415 - - Total assets measured at fair value $ 290 $ 85,521 $ - $ 602 Financial Liabilities Foreign currency derivative contracts - (1,577 ) - - Total liabilities measured at fair value $ - $ (1,577 ) $ - $ - |
CONVERTIBLE PREFERRED SHARES,_2
CONVERTIBLE PREFERRED SHARES, SHAREHOLDERS' EQUITY AND EQUITY INCENTIVE PLAN (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of composition of share capital | December 31, 2022 December 31, 2021 Authorized Issued and outstanding Authorized Issued and outstanding Number of shares no par value Ordinary shares 900,000,000 86,780,082 900,000,000 83,754,006 |
Schedule of share option activity | Number of options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate Intrinsic value Balance as of December 31, 2021 14,160,792 $ 8.38 7.67 $ 159,366 Granted 1,201,247 $ 13.35 Forfeited (1,425,431 ) $ 12.87 Exercised (1,524,411 ) $ 3.31 $ 12,217 Balance as of December 31, 2022 12,412,197 $ 8.96 6.93 49,209 Exercisable options at end of year 7,446,960 $ 6.30 5.95 $ 43,957 |
Schedule of share-based payment arrangement, restricted stock | Number of RSUs Weighted- Average Grant Date Fair Value Per Share Balance as of December 31, 2021 2,366,373 $ 26.22 Granted 6,466,740 $ 14.24 Forfeited (1,439,112 ) $ 19.88 Exercised (834,175 ) $ 22.84 Balance as of December 31, 2022 6,559,826 $ 16.23 |
Schedule of share-based compensation expense by award type | Year ended December 31 2022 2021 2020 Share options $ 20,167 $ 21,359 $ 14,017 RSUs 27,001 4,842 - ESPP 2,936 1,131 - $ 50,104 $ 27,332 $ 14,017 |
Schedule of share-based compensation expense | Year ended December 31 2022 2021 2020 Cost of revenues $ 3,896 $ 1,804 $ 201 Research and development 7,285 3,863 1,596 Sales and marketing 19,126 8,205 1,105 General and administrative 19,797 13,460 11,115 $ 50,104 $ 27,332 $ 14,017 |
Share options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of black-Scholes assumptions used to value employee options | Year ended December 31, 2022 2021 2020 Expected volatility 60% 60% 60% Expected dividend yield - - - Expected term (in years) 5.5-6.98 5-6.55 6.08 Risk free interest 1.98%-3.88% 0.49%-1.06% 0.28%-1.45% |
Employee Share Purchase Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of black-Scholes assumptions used to value employee options | Year ended December 31, Year ended 2022 2021 Expected volatility 77%-91.9 41 Expected dividend yield - - Expected term (in years) 0.5 0.57 Risk free interest 0.46%-2.85 0.06 |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before taxes on income | Year ended December 31 2022 2021 2020 Israel $ 102,013 $ 68,924 $ 38,941 Foreign 2,506 8,875 4,376 $ 104,519 $ 77,799 $ 43,317 |
Schedule of provision for income taxes | Year ended December 31 2022 2021 2020 Current: Israel $ (93) $ 103 $ 153 Foreign 1,389 697 1,011 Total current taxes 1,296 800 1,164 Deferred: Israel - - - Foreign 2,535 1,694 544 Total deferred taxes 2,535 1,694 544 Total income taxes $ 3,831 $ 2,494 $ 1,708 |
Schedule of effective income tax rate reconciliation | Year ended December 31 2022 2021 2020 Loss before income taxes $ 104,519 $ 77,799 $ 43,317 Statutory tax rate 23 % 23 % 23 % Theoretical income tax benefit $ (24,039 ) $ (17,894 ) $ (9,963 ) Preferred technology enterprise 11,221 7,582 4,284 Foreign rate differential (300 ) (597 ) 213 Unrecognized tax benefits 1,348 3,159 1,272 Changes in valuation allowance 11,421 7,498 3,827 Share-based compensation 3,745 2,519 1,327 Non-deductible expenses 513 234 790 Other (78 ) (7 ) (42 ) Actual tax expense $ 3,831 $ 2,494 $ 1,708 |
Schedule of deferred tax assets and liabilities | December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 43,437 $ 36,373 Research and development expenses 5,398 4,304 Accruals and reserves 2,088 2,541 Issuance costs 914 1,827 Share-based compensation 4,318 1,576 Operating lease liability 2,115 - Other deferred assets 805 636 Gross deferred tax assets 59,075 47,257 Valuation allowance (51,164 ) (40,019 ) Total deferred tax assets 7,911 7,238 Deferred tax liabilities: Deferred contract costs (13,313 ) (11,687 ) Operating lease ROU asset (1,667 ) - Other deferred tax liabilities (261 ) (346 ) Gross deferred tax liabilities (15,241 ) (12,033 ) Net deferred taxes $ (7,330 ) $ (4,795 ) |
Schedule of changes in gross amount of unrecognized tax benefits | Unrecognized Tax Benefits Balance - December 31, 2019 437 Increases related to prior years’ tax positions 209 Increases related to current years’ tax positions 1,063 Balance - December 31, 2020 1,709 Increases related to prior years’ tax positions 175 Increases related to current years’ tax positions 2,984 Balance - December 31, 2021 4,868 Decrease related to prior years’ tax positions (287 ) Increases related to current years’ tax positions 1,635 Balance - December 31, 2022 $ 6,216 |
REPORTING SEGMENTS AND GEOGRA_2
REPORTING SEGMENTS AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of revenue by region | Year ended December 31, 2022 2021 2020 United States 172,733 135,291 105,321 Rest of world 71,510 56,914 42,138 Israel 763 1,098 847 $ 245,006 $ 193,303 $ 148,306 |
Schedule of property and equipment, net by region | Year ended December 31, 2022 2021 Israel $ 11,537 $ 8,829 United States 6,800 1,778 Rest of world 1,934 278 Total long-lived assets, net $ 20,271 $ 10,885 |
NET LOSS PER SHARE ATTRIBUTAB_2
NET LOSS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net loss per share | Year ended December 31, 2022 2021 2020 Numerator: Net loss $ (108,350 ) $ (80,293 ) $ (45,025 ) Net loss attributable to non-controlling interest (743 ) (1,169 ) (1,311 ) Adjustment attributable to non-controlling interest (14,979 ) 16,689 5,487 Deemed dividend to ordinary shareholders - - 4,569 Net loss attributable to WalkMe Ltd. $ (92,628 ) $ (95,813 ) $ (53,770 ) Denominator: Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted 85,116,424 51,763,032 13,217,183 Net loss per share attributable to ordinary shareholders, basic and diluted $ (1.09 ) $ (1.85 ) $ (4.07 ) |
Schedule of antidilutive ordinary shares excluded from computation of earnings per share | Year ended December 31, 2022 2021 2020 Convertible preferred shares - 26,972,186 58,724,580 RSU’s 5,759,365 732,157 - Outstanding share options and share purchase rights under ESPP 13,676,853 14,143,816 10,428,813 Total 19,436,218 41,848,159 69,153,393 |
GENERAL (Detail Textuals)
GENERAL (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 16, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Amount of initial public offering | $ 0 | $ 263,922 | $ 0 | |
Initial public offering (“IPO”) [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares issued under initial public offering | 9,250,000 | |||
Amount of initial public offering | $ 263,911 | |||
Offering price | $ 31 | |||
Deducting underwriting discounts and commissions | $ 18,639 | |||
Other issuance costs | $ 4,200 | |||
Number of convertible preferred shares converted to ordinary shares | 59,180,522 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Software, computers and peripheral equipment | |
Property, Plant and Equipment [Line Items] | |
Depreciation annual rates | 33 |
Office furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Depreciation annual rates | 33 |
Office furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Depreciation annual rates | 10 |
Capitalized development costs | |
Property, Plant and Equipment [Line Items] | |
Depreciation annual rates | 33 |
Leasehold improvement | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | By the shorter of remaining lease term or estimated useful life of the asset |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Beginning balance | $ 56,374 | $ 29,729 | $ 20,769 |
Additions to deferred contract acquisition costs | 33,711 | 41,396 | 17,160 |
Amortization of deferred contract acquisition costs | (23,688) | (14,751) | (8,200) |
Ending balance | 66,397 | 56,374 | 29,729 |
Deferred contract acquisition costs (to be recognized in next 12 months) | 26,287 | 20,405 | 10,712 |
Deferred contract acquisition costs, non-current | $ 40,110 | $ 35,969 | $ 19,017 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2022 | |
Accounting Policies [Abstract] | ||||
Cash held in checking accounts | $ 46,105 | $ 59,770 | ||
Bank deposits with maturities of three months or less | $ 48,000 | $ 217,119 | ||
Short-term bank deposits weighted average rates | 4.84% | 0.74% | ||
Concentration risk, customer | 10% | 10% | ||
Concentration risk, revenue | 10% | 10% | ||
Foreign currency contracts designated as hedging instruments | $ 50,298 | $ 32,797 | ||
Unbilled trade receivables | 4,084 | 5,477 | ||
Impairment of intangibles | $ 2,246 | |||
Percentage of monthly salary deposit to insurance funds | 8.33% | |||
Severance expense | $ 3,967 | 3,490 | $ 2,495 | |
Employee contributions, matching percentage | 100% | |||
Employee contributions maximum limit percentage | 5% | |||
Contribution expenses | $ 2,211 | |||
Recognize revenue, amount | 82,080 | 53,570 | ||
Non-cancellable performance obligations | 374,023 | |||
Expected recognize revenue | $ 215,514 | |||
Percentage of performance obligation recognized in next 12 months | 58% | |||
Costs of development of software programs | $ 4,955 | 3,912 | 1,530 | |
Advertising expenses | 15,168 | 18,658 | $ 13,148 | |
Operating lease right-of-use assets | $ 7,003 | $ 0 | $ 13,117 | |
Maturities of operating lease liabilities | $ 14,240 |
REDEEMABLE NON-CONTROLLING IN_3
REDEEMABLE NON-CONTROLLING INTEREST (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Redeemable Noncontrolling Interest, Equity, Redemption Value [Abstract] | |||
Balance | $ 23,901 | $ 8,647 | $ 2,041 |
Investment by redeemable non-controlling interest | 0 | 0 | 2,330 |
Net loss attributable to redeemable non-controlling interest | (743) | (1,169) | (1,311) |
Adjustment to redeemable non-controlling interest | (14,979) | 16,689 | 5,487 |
Foreign currency translation | (99) | (266) | 100 |
Balance | $ 8,080 | $ 23,901 | $ 8,647 |
REDEEMABLE NON-CONTROLLING IN_4
REDEEMABLE NON-CONTROLLING INTEREST (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Redeemable Noncontrolling Interest [Line Items] | ||
Cash | $ 46,105 | $ 59,770 |
Japan Cloud Computing, L.P. and M30 LLC [Member] | ||
Redeemable Noncontrolling Interest [Line Items] | ||
Payments to acquire redeemable noncontrolling interest | $ 4,750 | |
Ownership percentage held by parent company | 51% |
MARKETABLE SECURITIES (Details)
MARKETABLE SECURITIES (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Marketable Securities [Line Items] | |
Amortized cost | $ 85,510 |
Gross unrealized losses | (94) |
Gross unrealized gains | 105 |
Fair Value | 85,521 |
U.S. Treasuries | |
Marketable Securities [Line Items] | |
Amortized cost | 68,084 |
Gross unrealized losses | (64) |
Gross unrealized gains | 86 |
Fair Value | 68,106 |
U.S. Government Agencies | |
Marketable Securities [Line Items] | |
Amortized cost | 17,426 |
Gross unrealized losses | (30) |
Gross unrealized gains | 19 |
Fair Value | $ 17,415 |
MARKETABLE SECURITIES (Details
MARKETABLE SECURITIES (Details 1) $ in Thousands | Dec. 31, 2022 USD ($) |
Amortized cost | |
Due within one year | $ 42,214 |
Due between one and three years | 43,296 |
Total | 85,510 |
Fair Value | |
Due within one year | 42,187 |
Due between one and three years | 43,334 |
Total | $ 85,521 |
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 | $ 32,014 | $ 25,037 |
Accumulated depreciation | 18,746 | 14,152 |
Depreciated cost | 13,268 | 10,885 |
Software, computers and peripheral equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | 8,378 | 6,388 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | 887 | 883 |
Capitalized development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | 18,750 | 13,795 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | $ 3,999 | $ 3,971 |
PROPERTY AND EQUIPMENT, NET (_2
PROPERTY AND EQUIPMENT, NET (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 5,165 | $ 4,478 | $ 4,666 |
Reduction in cost and accumulated depreciation of fully depreciated equipment and leasehold improvements no longer in use | $ 576 | $ 753 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Acquired technology | $ 3,004 | $ 3,004 |
Accumulated amortization and Impairment | 2,655 | 1,189 |
Depreciated cost | $ 349 | $ 1,815 |
INTANGIBLE ASSETS, NET (Detai_2
INTANGIBLE ASSETS, NET (Details 1) $ in Thousands | Dec. 31, 2022 USD ($) |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
2023 | $ 269 |
2024 | 80 |
Total future amortization expense | $ 349 |
INTANGIBLE ASSETS, NET (Detail
INTANGIBLE ASSETS, NET (Detail Textuals) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Oct. 04, 2021 | Apr. 15, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 1 year 3 months 18 days | ||||
Amortization expense | $ 487 | $ 299 | $ 44 | ||
Impairment of intangibles | 2,246 | ||||
Snow White Labs Ltd [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Business Combination, Consideration Transferred | $ 808 | ||||
Ordinary shares and direct acquisition costs | 33,150 | ||||
Fair value of ordinary shares | $ 776 | ||||
Simpo Ltd [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Business Combination, Consideration Transferred | $ 1,306 | ||||
Impairment of intangibles | $ 979 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Detail Textuals) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Aug. 31, 2021 | Dec. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Non-cancelable purchase commitments | $ 21,624 | |
Office lease agreement | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Pledged bank deposits | 493 | |
Bank guarantees related to lease agreements | $ 1,564 | |
Loan and security agreement | Revolving Credit Facility | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Maximum amount of borrow, repay and re-borrow | $ 50,000 | |
Expiration period | 3 years | |
Interest on borrowings | Prime Rate or 3.25% | |
Yearly fixed fee payment | $ 20 |
LEASES (Details)
LEASES (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease operating liabilities | $ 5,399 |
LEASES (Details 1)
LEASES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
Leases [Abstract] | |||
Operating lease ROU assets | $ 7,003 | $ 13,117 | $ 0 |
Operating lease liabilities | 5,009 | 0 | |
Operating lease liabilities, long-term | $ 3,833 | $ 0 | |
Weighted average remaining lease term (in years) | 1 year 9 months 18 days | ||
Weighted average discount rate | 1% |
LEASES (Details 2)
LEASES (Details 2) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 5,069 |
2024 | 3,391 |
2025 | 433 |
2026 | 28 |
Total undiscounted lease payments | 8,921 |
Less: imputed interest | (79) |
Maturities of operating lease liabilities | $ 8,842 |
LEASES (Detail Textuals)
LEASES (Detail Textuals) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 7,049 |
Impairment related to certain right- of use assets | $ 1,267 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | $ 290 | $ 0 |
Total liabilities measured at fair value | 0 | 0 |
Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 290 | 0 |
Level 1 | Foreign currency derivative contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Total liabilities measured at fair value | 0 | |
Level 1 | U.S. Treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Level 1 | U.S. Government Agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 85,521 | 602 |
Total liabilities measured at fair value | (1,577) | 0 |
Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Level 2 | Foreign currency derivative contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 602 |
Total liabilities measured at fair value | (1,577) | 0 |
Level 2 | U.S. Treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 68,106 | 0 |
Level 2 | U.S. Government Agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | $ 17,415 | $ 0 |
CONVERTIBLE PREFERRED SHARES,_3
CONVERTIBLE PREFERRED SHARES, SHAREHOLDERS' EQUITY AND EQUITY INCENTIVE PLAN (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 25, 2021 |
Class of Stock [Line Items] | |||
Common Stock, Shares Authorized | 900,000,000 | 900,000,000 | |
Common Stock, Shares, Issued | 86,780,082 | 83,754,006 | |
Common Stock, Shares, Outstanding | 86,780,082 | 83,754,006 | |
Convertible preferred shares outstanding | 59,180,522 | ||
Ordinary shares | |||
Class of Stock [Line Items] | |||
Common Stock, Shares Authorized | 900,000,000 | 900,000,000 | |
Common Stock, Shares, Issued | 86,780,082 | 83,754,006 | |
Common Stock, Shares, Outstanding | 86,780,082 | 83,754,006 |
CONVERTIBLE PREFERRED SHARES,_4
CONVERTIBLE PREFERRED SHARES, SHAREHOLDERS' EQUITY AND EQUITY INCENTIVE PLAN (Details 1) - Share option plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of options | ||
Beginning Balance | 14,160,792 | |
Granted | 1,201,247 | |
Forfeited | (1,425,431) | |
Exercised | (1,524,411) | |
Ending Balance | 12,412,197 | 14,160,792 |
Exercisable options | 7,446,960 | |
Weighted average exercise price | ||
Beginning Balance | $ 8.38 | |
Granted | 13.35 | |
Forfeited | 12.87 | |
Exercised | 3.31 | |
Ending Balance | 8.96 | $ 8.38 |
Exercisable options | $ 6.3 | |
Weighted average remaining contractual term (in years) | 6 years 11 months 4 days | 7 years 8 months 1 day |
Weighted average remaining contractual term (in years) - Exercisable options | 5 years 11 months 12 days | |
Aggregate Intrinsic value | ||
Balance | $ 49,209 | $ 159,366 |
Exercised | 12,217 | |
Aggregate Intrinsic value - Exercisable options | $ 43,957 |
CONVERTIBLE PREFERRED SHARES,_5
CONVERTIBLE PREFERRED SHARES, SHAREHOLDERS' EQUITY AND EQUITY INCENTIVE PLAN (Details 2) - Share option plan | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 60% | 60% | 60% |
Expected dividend yield | 0% | 0% | 0% |
Expected term (in years) | 6 years 29 days | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 5 years 6 months | 5 years | |
Risk free interest | 1.98% | 0.49% | 0.28% |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 11 months 23 days | 6 years 6 months 18 days | |
Risk free interest | 3.88% | 1.06% | 1.45% |
CONVERTIBLE PREFERRED SHARES,_6
CONVERTIBLE PREFERRED SHARES, SHAREHOLDERS' EQUITY AND EQUITY INCENTIVE PLAN (Details 3) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Granted | $ 7.32 | $ 13.31 | $ 5.62 |
RSUs | |||
Number of RSUs | |||
Opening balance | 2,366,373 | ||
Granted | 6,466,740 | ||
Forfeited | (1,439,112) | ||
Exercised | (834,175) | ||
Closing balance | 6,559,826 | 2,366,373 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Opening balance | $ 26.22 | ||
Granted | 14.24 | ||
Forfeited | 19.88 | ||
Exercised | 22.84 | ||
Closing balance | $ 16.23 | $ 26.22 |
CONVERTIBLE PREFERRED SHARES,_7
CONVERTIBLE PREFERRED SHARES, SHAREHOLDERS' EQUITY AND EQUITY INCENTIVE PLAN (Details 4) - Employee Share Purchase Plan | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 41% | |
Expected dividend yield | 0% | 0% |
Expected term (in years) | 6 months | 6 months 25 days |
Risk free interest | 0.06% | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 77% | |
Risk free interest | 0.46% | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 91.90% | |
Risk free interest | 2.85% |
CONVERTIBLE PREFERRED SHARES,_8
CONVERTIBLE PREFERRED SHARES, SHAREHOLDERS' EQUITY AND EQUITY INCENTIVE PLAN (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 50,104 | $ 27,332 | $ 14,017 |
Share options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 20,167 | 21,359 | 14,017 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 27,001 | 4,842 | 0 |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 2,936 | $ 1,131 | $ 0 |
CONVERTIBLE PREFERRED SHARES,_9
CONVERTIBLE PREFERRED SHARES, SHAREHOLDERS' EQUITY AND EQUITY INCENTIVE PLAN (Details 6) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 50,104 | $ 27,332 | $ 14,017 |
Share option plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 50,104 | 27,332 | 14,017 |
Cost of revenues | Share option plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 3,896 | 1,804 | 201 |
Research and development | Share option plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 7,285 | 3,863 | 1,596 |
Sales and marketing | Share option plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | 19,126 | 8,205 | 1,105 |
General and administrative | Share option plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 19,797 | $ 13,460 | $ 11,115 |
CONVERTIBLE PREFERRED SHARES_10
CONVERTIBLE PREFERRED SHARES, SHAREHOLDERS' EQUITY AND EQUITY INCENTIVE PLAN (Detail Textuals) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Mar. 25, 2021 USD ($) shares | Nov. 30, 2019 USD ($) | Mar. 31, 2022 | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares | Mar. 04, 2021 ₪ / shares | |
Convertible Preferred Shares Shareholders Deficit And Equity Incentive Plan [Line Items] | |||||||
Common stock, par value | ₪ / shares | ₪ 0.01 | ||||||
Common stock, shares authorized | shares | 900,000,000 | 900,000,000 | |||||
Amount of initial public offering | $ 0 | $ 263,922 | $ 0 | ||||
Amount of preferred stock liquidation preference | $ 310,490 | ||||||
Convertible preferred shares outstanding | shares | 59,180,522 | ||||||
Preferred Stock, Convertible, Terms | an equivalent number of ordinary shares on a one-to-one | ||||||
Number of ordinary shares available for grant | shares | 7,240,782 | 7,857,017 | |||||
Expiration period of options granted | 10 years | ||||||
Vesting period of options | 4 years | ||||||
Unrecognized compensation cost | $ 50,475 | ||||||
Period of weighted-average non-vested share-based compensation arrangements | 3 years 29 days | ||||||
Weighted-average grant date fair value of options granted | $ / shares | $ 7.32 | $ 13.31 | $ 5.62 | ||||
Incremental share-based compensation expense | $ 8,536 | ||||||
Deemed dividend to ordinary shareholders | $ 0 | $ 0 | 4,569 | ||||
Restricted Share Units | |||||||
Convertible Preferred Shares Shareholders Deficit And Equity Incentive Plan [Line Items] | |||||||
Stock compensation expenses related to employees | $ 93,374 | ||||||
Period of weighted-average non-vested share-based compensation arrangements | 3 years 21 days | ||||||
Weighted-average grant date fair value of options granted | $ / shares | $ 14.24 | ||||||
Employee Share Purchase Plan | |||||||
Convertible Preferred Shares Shareholders Deficit And Equity Incentive Plan [Line Items] | |||||||
Unrecognized compensation cost | $ 527 | ||||||
Period of weighted-average non-vested share-based compensation arrangements | 2 months 12 days | ||||||
Reserved for issuance of employee stock purchase plan | shares | 2,161,770 | 1,824,988 | |||||
Share purchase agreement | |||||||
Convertible Preferred Shares Shareholders Deficit And Equity Incentive Plan [Line Items] | |||||||
Total amount of consideration of convertible preferred stock | $ 45,000 | 45,000 | |||||
Total amount of funding requests | $ 35,000 | ||||||
Preferred shares F | Share purchase agreement | |||||||
Convertible Preferred Shares Shareholders Deficit And Equity Incentive Plan [Line Items] | |||||||
Convertible preferred shares issued | shares | 455,942 | ||||||
Consideration of convertible preferred stock | $ 10,000 |
TAXES ON INCOME (Details)
TAXES ON INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Israel | $ 102,013 | $ 68,924 | $ 38,941 |
Foreign | 2,506 | 8,875 | 4,376 |
Loss before income taxes | $ 104,519 | $ 77,799 | $ 43,317 |
TAXES ON INCOME (Details 1)
TAXES ON INCOME (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Line Items] | |||
Total current taxes | $ 1,296 | $ 800 | $ 1,164 |
Total deferred taxes | 2,535 | 1,694 | 544 |
Total income taxes | 3,831 | 2,494 | 1,708 |
Israel | |||
Income Tax Disclosure [Line Items] | |||
Total current taxes | (93) | 103 | 153 |
Total deferred taxes | 0 | 0 | 0 |
Foreign | |||
Income Tax Disclosure [Line Items] | |||
Total current taxes | 1,389 | 697 | 1,011 |
Total deferred taxes | $ 2,535 | $ 1,694 | $ 544 |
TAXES ON INCOME (Details 2)
TAXES ON INCOME (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Loss before income taxes | $ 104,519 | $ 77,799 | $ 43,317 |
Statutory tax rate | 23% | 23% | 23% |
Theoretical income tax benefit | $ (24,039) | $ (17,894) | $ (9,963) |
Preferred technology enterprise | 11,221 | 7,582 | 4,284 |
Foreign rate differential | (300) | (597) | 213 |
Unrecognized tax benefits | 1,348 | 3,159 | 1,272 |
Changes in valuation allowance | 11,421 | 7,498 | 3,827 |
Share-based compensation | 3,745 | 2,519 | 1,327 |
Non-deductible expenses | 513 | 234 | 790 |
Other | (78) | (7) | (42) |
Actual tax expense | $ 3,831 | $ 2,494 | $ 1,708 |
TAXES ON INCOME (Details 3)
TAXES ON INCOME (Details 3) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 43,437 | $ 36,373 |
Research and development expenses | 5,398 | 4,304 |
Accruals and reserves | 2,088 | 2,541 |
Issuance costs | 914 | 1,827 |
Share-based compensation | 4,318 | 1,576 |
Operating lease liability | 2,115 | 0 |
Other deferred assets | 805 | 636 |
Gross deferred tax assets | 59,075 | 47,257 |
Valuation allowance | (51,164) | (40,019) |
Total deferred tax assets | 7,911 | 7,238 |
Deferred tax liabilities: | ||
Deferred contract costs | (13,313) | (11,687) |
Operating lease ROU asset | (1,667) | 0 |
Other deferred tax liabilities | (261) | (346) |
Gross deferred tax liabilities | (15,241) | (12,033) |
Net deferred taxes | $ (7,330) | $ (4,795) |
TAXES ON INCOME (Details 4)
TAXES ON INCOME (Details 4) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 4,868 | $ 1,709 | $ 437 |
Increases related to prior years’ tax positions | 175 | 209 | |
Decrease related to prior years’ tax positions | (287) | ||
Increase related to current years’ tax positions | 1,635 | 2,984 | 1,063 |
Ending balance | $ 6,216 | $ 4,868 | $ 1,709 |
TAXES ON INCOME (Detail Textual
TAXES ON INCOME (Detail Textuals) $ in Thousands, ₪ in Millions | 12 Months Ended | ||||
Dec. 31, 2022 ILS (₪) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 USD ($) | |
Income Tax Disclosure [Line Items] | |||||
Israel corporate tax rate | 23% | 23% | 23% | 23% | |
Percentage of tax benefit recorded positions more likely to be realized | 50% | 50% | |||
Net operating loss carryforward in Israel | $ 320,934 | ||||
Amount of recognized tax benefits | $ 2,708 | ||||
Unrecognized tax benefits of interest and penalties | 251 | ||||
Amount offset by the reversal of related deferred tax assets | 3,508 | ||||
Domestic | |||||
Income Tax Disclosure [Line Items] | |||||
Operating Loss Carryforwards | 14,478 | ||||
Foreign | |||||
Income Tax Disclosure [Line Items] | |||||
Operating Loss Carryforwards | $ 60,833 | ||||
Preferred Technology Enterprises” (“PTE”) | Domestic | |||||
Income Tax Disclosure [Line Items] | |||||
Percentage of annual income derived from exports to large markets | 25% | 25% | |||
Threshold of consolidated revenue of PTE | ₪ | ₪ 10,000 | ||||
Capital gains tax rate on the sale of a preferred intangible asset | 12% | 12% | |||
Asset purchased from foreign resident | ₪ | ₪ 200 | ||||
Percentage of withholding tax rate of dividends paid | 20% | 20% | |||
Effective income tax rate | 12% | 12% |
REPORTING SEGMENTS AND GEOGRA_3
REPORTING SEGMENTS AND GEOGRAPHIC INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue, Major Customer [Line Items] | |||
Revenues | $ 245,006 | $ 193,303 | $ 148,306 |
United States | |||
Revenue, Major Customer [Line Items] | |||
Revenues | 172,733 | 135,291 | 105,321 |
Rest of world | |||
Revenue, Major Customer [Line Items] | |||
Revenues | 71,510 | 56,914 | 42,138 |
Israel | |||
Revenue, Major Customer [Line Items] | |||
Revenues | $ 763 | $ 1,098 | $ 847 |
REPORTING SEGMENTS AND GEOGRA_4
REPORTING SEGMENTS AND GEOGRAPHIC INFORMATION (Details 1) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets, net | $ 20,271 | $ 10,885 |
Israel | ||
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets, net | 11,537 | 8,829 |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets, net | 6,800 | 1,778 |
Rest of world | ||
Property, Plant and Equipment [Line Items] | ||
Total long-lived assets, net | $ 1,934 | $ 278 |
REPORTING SEGMENTS AND GEOGRA_5
REPORTING SEGMENTS AND GEOGRAPHIC INFORMATION (Detail Textuals) | 12 Months Ended |
Dec. 31, 2022 Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Term of concentration risk | Other than the United States, no other individual country accounted for 10% or more of total revenue |
NET LOSS PER SHARE ATTRIBUTAB_3
NET LOSS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net loss | $ (108,350) | $ (80,293) | $ (45,025) |
Net loss attributable to non-controlling interest | (743) | (1,169) | (1,311) |
Adjustment attributable to non-controlling interest | (14,979) | 16,689 | 5,487 |
Deemed dividend to ordinary shareholders | 0 | 0 | 4,569 |
Net loss attributable to WalkMe Ltd. | $ (92,628) | $ (95,813) | $ (53,770) |
Denominator: | |||
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic | 85,116,424 | 51,763,032 | 13,217,183 |
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, diluted | 85,116,424 | 51,763,032 | 13,217,183 |
Net loss per share attributable to ordinary shareholders, basic | $ (1.09) | $ (1.85) | $ (4.07) |
Net loss per share attributable to ordinary shareholders, diluted | $ (1.09) | $ (1.85) | $ (4.07) |
NET LOSS PER SHARE ATTRIBUTAB_4
NET LOSS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS (Details 1) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount | 19,436,218 | 41,848,159 | 69,153,393 |
Convertible preferred shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount | 0 | 26,972,186 | 58,724,580 |
RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount | 5,759,365 | 732,157 | 0 |
Outstanding share options and share purchase rights under ESPP | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount | 13,676,853 | 14,143,816 | 10,428,813 |
SUBSEQUENT EVENT (Narrative) (D
SUBSEQUENT EVENT (Narrative) (Details) - Subsequent event - Silicon Valley Bank $ in Thousands | Mar. 14, 2023 USD ($) |
Subsequent Event [Line Items] | |
Deposits held | $ 15,700 |
Revolving Credit Facility | |
Subsequent Event [Line Items] | |
Unutilized revolving credit facility | $ 50,000 |