Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36089 | |
Entity Registrant Name | RingCentral, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-3322844 | |
Entity Address, Address Line One | 20 Davis Drive | |
Entity Address, City or Town | Belmont | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94002 | |
City Area Code | 650 | |
Local Phone Number | 472-4100 | |
Title of each class | Class A Common Stock | |
Trading Symbol(s) | RNG | |
Name of each exchange on which registered | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001384905 | |
Current Fiscal Year End Date | --12-31 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock Outstanding (in shares) | 83,822,528 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock Outstanding (in shares) | 9,924,538 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 432,352 | $ 269,984 |
Accounts receivable, net | 347,912 | 311,318 |
Deferred and prepaid sales commission costs | 176,197 | 158,865 |
Prepaid expenses and other current assets | 95,858 | 55,849 |
Total current assets | 1,052,319 | 796,016 |
Property and equipment, net | 183,593 | 185,400 |
Operating lease right-of-use assets | 32,477 | 35,433 |
Deferred and prepaid sales commission costs, non-current | 394,020 | 438,579 |
Goodwill | 66,482 | 54,335 |
Acquired intangibles, net | 431,920 | 528,051 |
Other assets | 21,683 | 35,848 |
Total assets | 2,182,494 | 2,073,662 |
Current liabilities | ||
Accounts payable | 43,311 | 62,721 |
Accrued liabilities | 310,752 | 380,113 |
Current portion of long-term debt, net | 20,000 | 0 |
Deferred revenue | 231,247 | 209,725 |
Total current liabilities | 605,310 | 652,559 |
Long-term debt, net | 1,781,252 | 1,638,411 |
Operating lease liabilities | 18,577 | 20,182 |
Other long-term liabilities | 62,362 | 45,848 |
Total liabilities | 2,467,501 | 2,357,000 |
Commitments and contingencies (Note 9) | ||
Series A convertible preferred stock | 199,449 | 199,449 |
Stockholders' deficit | ||
Common stock | 9 | 10 |
Additional paid-in capital | 1,170,672 | 1,059,880 |
Accumulated other comprehensive loss | (3,244) | (8,781) |
Accumulated deficit | (1,651,893) | (1,533,896) |
Total stockholders' deficit | (484,456) | (482,787) |
Total liabilities, temporary equity and stockholders’ deficit | $ 2,182,494 | $ 2,073,662 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | ||||
Total revenues | $ 558,164 | $ 509,032 | $ 1,631,158 | $ 1,463,584 |
Cost of revenues | ||||
Total cost of revenues | 168,974 | 167,474 | 494,067 | 481,138 |
Gross profit | 389,190 | 341,558 | 1,137,091 | 982,446 |
Operating expenses | ||||
Research and development | 85,444 | 86,700 | 250,965 | 273,492 |
Sales and marketing | 270,767 | 261,914 | 795,422 | 781,767 |
General and administrative | 87,154 | 72,261 | 244,472 | 217,810 |
Asset write-down charge | 0 | 103,242 | 0 | 103,242 |
Total operating expenses | 443,365 | 524,117 | 1,290,859 | 1,376,311 |
Loss from operations | (54,175) | (182,559) | (153,768) | (393,865) |
Other income (expense), net | ||||
Interest expense | (12,162) | (1,178) | (19,492) | (3,613) |
Other income (expense) | 20,441 | (100,006) | 61,521 | (194,725) |
Other income (expense), net | 8,279 | (101,184) | 42,029 | (198,338) |
Loss before income taxes | (45,896) | (283,743) | (111,739) | (592,203) |
(Benefit from) provision for income taxes | (3,780) | 873 | 6,258 | 2,900 |
Net loss | $ (42,116) | $ (284,616) | $ (117,997) | $ (595,103) |
Net loss per common share | ||||
Basic (in dollars per share) | $ (0.45) | $ (2.98) | $ (1.24) | $ (6.26) |
Diluted (in dollars per share) | $ (0.45) | $ (2.98) | $ (1.24) | $ (6.26) |
Weighted-average number of shares used in computing net loss per share | ||||
Basic (in shares) | 94,593 | 95,575 | 95,213 | 95,097 |
Diluted (in shares) | 94,593 | 95,575 | 95,213 | 95,097 |
Subscriptions | ||||
Revenues | ||||
Total revenues | $ 531,030 | $ 483,229 | $ 1,552,956 | $ 1,386,140 |
Cost of revenues | ||||
Total cost of revenues | 141,172 | 134,372 | 413,664 | 395,083 |
Other | ||||
Revenues | ||||
Total revenues | 27,134 | 25,803 | 78,202 | 77,444 |
Cost of revenues | ||||
Total cost of revenues | $ 27,802 | $ 33,102 | $ 80,403 | $ 86,055 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (42,116) | $ (284,616) | $ (117,997) | $ (595,103) |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustments | (3,588) | (8,362) | (3,398) | (18,606) |
Unrealized gain on derivative instruments | 5,541 | 0 | 8,935 | 0 |
Total other comprehensive income (loss) | 1,953 | (8,362) | 5,537 | (18,606) |
Comprehensive loss | $ (40,163) | $ (292,978) | $ (112,460) | $ (613,709) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative effect of accounting change | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital Cumulative effect of accounting change | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Accumulated Deficit Cumulative effect of accounting change |
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2021 | 94,309 | |||||||
Stockholders' equity, beginning balance at Dec. 31, 2021 | $ 338,967 | $ (235,454) | $ 9 | $ 1,086,870 | $ (329,280) | $ 644 | $ (748,556) | $ 93,826 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings (in shares) | 588 | |||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings | (120) | (120) | ||||||
Share-based compensation | 98,424 | 98,424 | ||||||
Other comprehensive (loss) income | (2,062) | (2,062) | ||||||
Net loss | (150,972) | (150,972) | ||||||
Stockholders' equity, ending balance (in shares) at Mar. 31, 2022 | 94,897 | |||||||
Stockholders' equity, ending balance at Mar. 31, 2022 | 48,783 | $ 9 | 855,894 | (1,418) | (805,702) | |||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2021 | 94,309 | |||||||
Stockholders' equity, beginning balance at Dec. 31, 2021 | 338,967 | $ (235,454) | $ 9 | 1,086,870 | $ (329,280) | 644 | (748,556) | $ 93,826 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (595,103) | |||||||
Stockholders' equity, ending balance (in shares) at Sep. 30, 2022 | 95,866 | |||||||
Stockholders' equity, ending balance at Sep. 30, 2022 | (244,876) | $ 10 | 1,022,909 | (17,962) | (1,249,833) | |||
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2022 | 94,897 | |||||||
Stockholders' equity, beginning balance at Mar. 31, 2022 | 48,783 | $ 9 | 855,894 | (1,418) | (805,702) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings (in shares) | 842 | |||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings | 7,827 | 7,827 | ||||||
Repurchases of common stock (in shares) | (421) | |||||||
Repurchases of common stock | (25,004) | (25,004) | ||||||
Share-based compensation | 98,402 | 98,402 | ||||||
Other comprehensive (loss) income | (8,182) | (8,182) | ||||||
Net loss | (159,515) | (159,515) | ||||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2022 | 95,318 | |||||||
Stockholders' equity, ending balance at Jun. 30, 2022 | (37,689) | $ 9 | 937,119 | (9,600) | (965,217) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings (in shares) | 967 | |||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings | 11,166 | $ 1 | 11,165 | |||||
Repurchases of common stock (in shares) | (419) | |||||||
Repurchases of common stock | (20,000) | (20,000) | ||||||
Share-based compensation | 94,625 | 94,625 | ||||||
Other comprehensive (loss) income | (8,362) | (8,362) | ||||||
Net loss | (284,616) | (284,616) | ||||||
Stockholders' equity, ending balance (in shares) at Sep. 30, 2022 | 95,866 | |||||||
Stockholders' equity, ending balance at Sep. 30, 2022 | (244,876) | $ 10 | 1,022,909 | (17,962) | (1,249,833) | |||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2022 | 95,385 | |||||||
Stockholders' equity, beginning balance at Dec. 31, 2022 | (482,787) | $ 10 | 1,059,880 | (8,781) | (1,533,896) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings (in shares) | 1,108 | |||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings | (1,641) | (1,641) | ||||||
Issuance of common stock in connection with commercial arrangements (in shares) | 1,265 | |||||||
Issuance of common stock in connection with strategic partnership arrangement | 42,585 | 42,585 | ||||||
Repurchases of common stock (in shares) | (2,160) | |||||||
Repurchases of common stock | (74,776) | (74,776) | ||||||
Share-based compensation | 97,303 | 97,303 | ||||||
Other comprehensive (loss) income | 1,760 | 1,760 | ||||||
Net loss | (54,399) | (54,399) | ||||||
Stockholders' equity, ending balance (in shares) at Mar. 31, 2023 | 95,598 | |||||||
Stockholders' equity, ending balance at Mar. 31, 2023 | (471,955) | $ 10 | 1,123,351 | (7,021) | (1,588,295) | |||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2022 | 95,385 | |||||||
Stockholders' equity, beginning balance at Dec. 31, 2022 | (482,787) | $ 10 | 1,059,880 | (8,781) | (1,533,896) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (117,997) | |||||||
Stockholders' equity, ending balance (in shares) at Sep. 30, 2023 | 93,746 | |||||||
Stockholders' equity, ending balance at Sep. 30, 2023 | (484,456) | $ 9 | 1,170,672 | (3,244) | (1,651,893) | |||
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2023 | 95,598 | |||||||
Stockholders' equity, beginning balance at Mar. 31, 2023 | (471,955) | $ 10 | 1,123,351 | (7,021) | (1,588,295) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings (in shares) | 1,978 | |||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings | 8,542 | 8,542 | ||||||
Issuance of common stock in connection with commercial arrangements (in shares) | 428 | |||||||
Issuance of common stock in connection with strategic partnership arrangement | 12,429 | 12,429 | ||||||
Repurchases of common stock (in shares) | (3,320) | |||||||
Repurchases of common stock | (100,506) | $ (1) | (100,505) | |||||
Share-based compensation | 99,307 | 99,307 | ||||||
Other comprehensive (loss) income | 1,824 | 1,824 | ||||||
Net loss | (21,482) | (21,482) | ||||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2023 | 94,684 | |||||||
Stockholders' equity, ending balance at Jun. 30, 2023 | (471,841) | $ 9 | 1,143,124 | (5,197) | (1,609,777) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings (in shares) | 1,551 | |||||||
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings | (3,071) | $ 0 | (3,071) | |||||
Repurchases of common stock (in shares) | (2,489) | |||||||
Repurchases of common stock | (75,292) | (75,292) | ||||||
Share-based compensation | 105,911 | 105,911 | ||||||
Other comprehensive (loss) income | 1,953 | 1,953 | ||||||
Net loss | (42,116) | (42,116) | ||||||
Stockholders' equity, ending balance (in shares) at Sep. 30, 2023 | 93,746 | |||||||
Stockholders' equity, ending balance at Sep. 30, 2023 | $ (484,456) | $ 9 | $ 1,170,672 | $ (3,244) | $ (1,651,893) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (117,997) | $ (595,103) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 174,723 | 184,166 |
Share-based compensation | 314,533 | 293,777 |
Unrealized loss on investments | 1,646 | 176,218 |
Asset write-down charge | 0 | 124,904 |
Amortization of deferred and prepaid sales commission costs | 100,618 | 81,536 |
Amortization of debt discount and issuance costs | 3,465 | 3,350 |
Non-cash interest expense | 4,156 | 0 |
Gain on early extinguishment of debt | (42,891) | 0 |
Reduction of operating lease right-of-use assets | 15,272 | 14,887 |
Provision for bad debt | 5,200 | 7,103 |
Other | 723 | 3,688 |
Changes in assets and liabilities: | ||
Accounts receivable | (39,641) | (40,247) |
Deferred and prepaid sales commission costs | (103,773) | (185,049) |
Prepaid expenses and other assets | (7,251) | (689) |
Accounts payable | (31,664) | 19,384 |
Accrued and other liabilities | 9,383 | 47,001 |
Deferred revenue | 15,309 | 32,970 |
Operating lease liabilities | (15,993) | (15,963) |
Net cash provided by operating activities | 285,818 | 151,933 |
Cash flows from investing activities | ||
Purchases of property and equipment | (17,515) | (23,828) |
Capitalized internal-use software | (38,241) | (39,638) |
Cash paid for business combination, net of cash acquired | (14,709) | 0 |
Proceeds from sale of marketable equity investments | 0 | 3,223 |
Purchases of intangible assets and long-term investments | 0 | (3,990) |
Net cash used in investing activities | (70,465) | (64,233) |
Cash flows from financing activities | ||
Proceeds from issuance of stock in connection with stock plans | 10,954 | 10,892 |
Payments for taxes related to net share settlement of equity awards | (7,124) | (5,180) |
Payments for repurchase of common stock | (249,568) | (45,004) |
Proceeds from issuance of long-term debt, net of issuance costs | 786,311 | 0 |
Payments for the repurchase of convertible senior notes | (580,960) | 0 |
Repayments of principal on term loan | (5,000) | 0 |
Repayments for financing obligations | (4,738) | (3,950) |
Payments for contingent consideration | (1,673) | (1,538) |
Net cash used in financing activities | (51,798) | (44,780) |
Effect of exchange rate changes | (1,187) | (4,699) |
Net increase in cash, cash equivalents, and restricted cash | 162,368 | 38,221 |
Cash, cash equivalents, and restricted cash | ||
Beginning of period | 269,984 | 267,162 |
End of period | 432,352 | 305,383 |
Supplemental disclosure of cash flow data: | ||
Cash paid for interest, net of interest rate swap | 10,166 | 272 |
Cash paid for income taxes, net of refunds | 9,291 | 2,895 |
Non-cash investing and financing activities | ||
Common stock issued in connection with strategic partnership arrangement | 55,014 | 0 |
Equipment and capitalized internal-use software purchased and unpaid at period end | 4,172 | 9,355 |
Contingent consideration | 7,461 | 0 |
Equipment acquired under financing obligations | $ 2,997 | $ 0 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Note 1. Description of Business and Summary of Significant Accounting Policies Description of Business RingCentral, Inc. (the “Company”) is a provider of software-as-a-service (“SaaS”) solutions that enables businesses to communicate, collaborate and connect. The Company was incorporated in California in 1999 and was reincorporated in Delaware on September 26, 2013. Basis of Presentation and Consolidation The Company’s unaudited condensed consolidated financial statements and accompanying notes reflect all adjustments (all of which are normal, recurring in nature and those discussed in these notes) that are, in the opinion of management, necessary for a fair presentation of the interim periods presented. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2023. Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 23, 2023. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The significant estimates made by management affect revenues, the allowance for doubtful accounts, deferred and prepaid sales commission costs, goodwill, useful lives of intangible assets, share-based compensation, capitalization of internally developed software, return reserves, derivative instruments, provision for income taxes, uncertain tax positions, loss contingencies, sales tax liabilities and accrued liabilities. Management periodically evaluates these estimates and will make adjustments prospectively based upon the results of such periodic evaluations. Actual results may differ from these estimates. Segment Information The Company has determined that the chief executive officer is the chief operating decision maker. The Company’s chief executive officer reviews financial information presented on a consolidated basis for purposes of assessing performance and making decisions on how to allocate resources. Accordingly, the Company has determined that it operates in a single reportable segment. Concentrations As of September 30, 2023 and December 31, 2022, none of the Company’s customers accounted for more than 10% of the Company’s total accounts receivable. Long-lived assets by geographic location are based on the location of the legal entity that owns the asset. As of September 30, 2023 and December 31, 2022, approximately 94% of the Company’s consolidated long-lived assets were located in the U.S. No other single country outside of the U.S. represented more than 10% of the Company’s consolidated long-lived assets. Significant Accounting Policies The Company’s significant accounting policies are described in Company’s Annual Report on Form 10-K for the year ended December 31, 2022. There have been no significant changes to these policies that have had a material impact on the condensed consolidated financial statements and related notes for the three and nine months ended September 30, 2023, other than the derivative instruments and hedging policy described below. Derivative Instruments and Hedging The Company measures its derivative financial instruments at fair value and recognizes them as assets and liabilities in the Condensed Consolidated Balance Sheets. The Company records changes in the fair value of derivative financial instruments designated as cash flow hedges in other comprehensive income (loss). When a hedged transaction affects earnings, the Company subsequently reclassifies the net derivative gain or loss within earnings into the same line as the hedged item on the Condensed Consolidated Statements of Operations to offset the changes in the hedged transaction. The cash flow effects related to derivative financial instruments designated as cash flow hedges are included within operating activities on the Condensed Consolidated Statements of Cash Flows. Recent Accounting Pronouncements Not Yet Adopted There are no material recent accounting pronouncements not yet adopted during the three and nine months ended September 30, 2023 that are significant or potentially significant to the Company. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 2. Revenue The Company derives its revenues primarily from subscriptions, sale of products, and professional services. Revenues are recognized when control is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Disaggregation of revenue The following table provides information about disaggregated revenue by primary geographical markets: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Primary geographical markets North America 90 % 90 % 90 % 90 % Others 10 10 10 10 Total revenues 100 % 100 % 100 % 100 % The Company derived over 90% of subscriptions revenues from RingCentral MVP and RingCentral customer engagement solutions products for each of the three and nine months ended September 30, 2023 and 2022. For the three and nine months ended September 30, 2023 and 2022, RingCentral customer engagement solutions represented over 10% of total revenues. Deferred revenue During the three and nine months ended September 30, 2023, the Company recognized revenue of $26.5 million and $195.7 million, respectively, that was included in the corresponding deferred revenue balance at the beginning of the year. Remaining performance obligations The typical subscription contract term ranges from one month to five years. Contract revenue as of September 30, 2023 that has not yet been recognized was approximately $2.3 billion. This excludes contracts with an original expected length of less than one year. Of these remaining performance obligations, the Company expects to recognize revenue of 53% of this balance over the next 12 months and 47% thereafter. Other revenues Other revenues are primarily comprised of product revenue from the sale of pre-configured phones and professional services. Product revenues from the sale of pre-configured phones were $11.9 million and $12.6 million for the three months ended September 30, 2023 and 2022, respectively, and $33.7 million and $35.2 million for the nine months ended September 30, 2023 and 2022, respectively. |
Financial Statement Components
Financial Statement Components | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Statement Components | Note 3. Financial Statement Components Cash and cash equivalents consisted of the following (in thousands): September 30, 2023 December 31, 2022 Cash $ 121,888 $ 88,153 Money market funds 310,464 181,831 Total cash and cash equivalents $ 432,352 $ 269,984 As of September 30, 2023 and December 31, 2022, $1.1 million and $5.5 million in the cash balance above, respectively, represents restricted cash, which is held in the form of a bank deposit for issuance of a foreign bank guarantee. Accounts receivable, net consisted of the following (in thousands): September 30, 2023 December 31, 2022 Accounts receivable $ 264,968 $ 242,650 Unbilled accounts receivable 95,111 78,249 Allowance for doubtful accounts (12,167) (9,581) Accounts receivable, net $ 347,912 $ 311,318 Prepaid expenses and other current assets consisted of the following (in thousands): September 30, 2023 December 31, 2022 Prepaid expenses $ 34,521 $ 23,306 Inventory 1,165 1,209 Other current assets 60,172 31,334 Total prepaid expenses and other current assets $ 95,858 $ 55,849 Property and equipment, net consisted of the following (in thousands): September 30, 2023 December 31, 2022 Computer hardware and software $ 234,723 $ 221,727 Internal-use software development costs 239,670 199,642 Furniture and fixtures 8,818 8,937 Leasehold improvements 14,133 13,889 Total property and equipment, gross 497,344 444,195 Less: accumulated depreciation and amortization (313,751) (258,795) Property and equipment, net $ 183,593 $ 185,400 Total depreciation and amortization expense related to property and equipment was $21.0 million and $18.3 million for the three months ended September 30, 2023 and 2022, respectively, and $61.8 million and $52.8 million for the nine months ended September 30, 2023 and 2022, respectively. The carrying value of goodwill is as follows (in thousands): Balance at December 31, 2022 $ 54,335 Acquisitions (Note 7) 12,428 Foreign currency translation adjustments (281) Balance at September 30, 2023 $ 66,482 The carrying values of intangible assets are as follows (in thousands): September 30, 2023 December 31, 2022 Weighted-Average Remaining Useful Life Cost Accumulated Acquired Cost Accumulated Acquired Customer relationships 2.7 years $ 26,138 $ 20,813 $ 5,325 $ 20,855 $ 19,090 $ 1,765 Developed technology 3.0 years 825,952 399,357 426,595 814,614 288,328 526,286 Total acquired intangible assets $ 852,090 $ 420,170 $ 431,920 $ 835,469 $ 307,418 $ 528,051 Amortization expense from acquired intangible assets for the three months ended September 30, 2023 and 2022 was $38.2 million and $43.7 million, respectively, and $112.9 million and $131.4 million for the nine months ended September 30, 2023 and 2022, respectively. Amortization of developed technology is included in cost of revenues and amortization of customer relationships is included in sales and marketing expenses in the Condensed Consolidated Statements of Operations. Estimated amortization expense for acquired intangible assets for the following fiscal years is as follows (in thousands): 2023 (remaining) $ 38,152 2024 139,391 2025 138,522 2026 115,448 2027 onwards 407 Total estimated amortization expense $ 431,920 Accrued liabilities consisted of the following (in thousands): September 30, 2023 December 31, 2022 Accrued compensation and benefits $ 47,622 $ 53,419 Accrued sales, use, and telecom related taxes 38,898 37,836 Accrued marketing and sales commissions 59,066 127,940 Operating lease liabilities, short-term 15,451 17,513 Other accrued expenses 149,715 143,405 Total accrued liabilities $ 310,752 $ 380,113 Deferred and Prepaid Sales Commission Costs Amortization expense for the deferred and prepaid sales commission costs was $35.5 million and $31.5 million for the three months ended September 30, 2023 and 2022, respectively, and $100.6 million and $81.5 million for the nine months ended September 30, 2023 and 2022, respectively. There was no impairment loss in relation to the deferred commissions costs capitalized for the periods presented. During the three and nine months ended September 30, 2023, the Company recorded a gain of $7.0 million and $11.5 million, respectively, in other income (expense) in earnings, pursuant to an amended agreement with a strategic partner. During the three months ended September 30, 2022, as a result of the uncertainty regarding Avaya’s financial condition, the Company recorded a non-cash asset write-down charge of $124.9 million, out of which $21.7 million of this balance was accrued interest and was recorded in other income (expense) in the Condensed Consolidated Statements of Operations. Supplier Financing Obligations The Company has established financing arrangements with certain third-party financial institutions and participating suppliers to be repaid over different terms ranging up to five years. As of September 30, 2023, the Company’s outstanding financing obligations related to such arrangements were $4.8 million, of which $2.8 million and $2.0 million were included in accrued liabilities and other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheets. Some of these financing arrangements are collateralized against property and equipment. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 4. Fair Value of Financial Instruments The Company measures and reports certain cash equivalents, including money market funds and certificates of deposit, derivative interest rate swap agreements, and long-term investments at fair value in accordance with the provisions of the authoritative accounting guidance that addresses fair value measurements. This guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: Level 1: Observable inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Other inputs, such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3: Unobservable inputs that are supported by little or no market activity and that are based on management’s assumptions, including fair value measurements determined by using pricing models, discounted cash flow methodologies or similar techniques. The financial instruments carried at fair value were determined using the following inputs (in thousands): Fair Value at Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 310,464 $ 310,464 $ — $ — Other assets: Interest rate swap derivatives $ 8,935 $ — $ 8,935 $ — Fair Value at Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 181,831 $ 181,831 $ — $ — Other assets: Long-term investments $ 1,646 $ — $ — $ 1,646 The Company’s other financial instruments, including accounts receivable, accounts payable, and other current liabilities, are carried at cost, which approximates fair value due to the relatively short maturity of those instruments. Fair Value of Long-Term Debt As of September 30, 2023, the fair value of the 0% convertible senior notes due 2026 (the “2026 Convertible Notes”) was approximately $512.5 million, and the fair value of the 0% convertible senior notes due 2025 (the “2025 Convertible Notes”) was approximately $382.7 million. The fair value for these convertible notes was determined based on the quoted price for such notes in an inactive market on the last trading day of the reporting period and is considered as Level 2 in the fair value hierarchy. As of September 30, 2023, the carrying amount of the Term Loan was $395.0 million. As there are no embedded features or other variable features, the fair value of the Term Loan approximated its carrying value. As of September 30, 2023, the fair value of the 8.5% senior notes due 2030 (the “2030 Senior Notes”) was approximately $386.4 million. The fair value for the 2030 Senior Notes was determined based on the quoted price for such notes in an inactive market on the last trading day of the reporting period and is considered as Level 2 in the fair value hierarchy. Fair Value of Derivative Instruments The Company’s interest rate swap derivative, which is considered as Level 2 in the fair value hierarchy, is valued using a discounted cash flow model that utilizes observable inputs including forward interest rate data at the measurement date. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 5. Long-Term Debt The following table sets forth the net carrying amount of the Company’s long-term debt (in thousands): Debt Instrument Maturity Date September 30, 2023 December 31, 2022 2025 Convertible Notes (1) March 1, 2025 $ 413,957 $ 1,000,000 2026 Convertible Notes (2) March 15, 2026 609,065 650,000 Term Loan under Credit Agreement February 14, 2028 395,000 — Revolving Credit Facility under Credit Agreement (3) February 14, 2028 — — 2030 Senior Notes August 15, 2030 400,000 — Total principal amount 1,818,022 1,650,000 Less: unamortized debt discount and issuance costs (16,770) (11,589) Less: current portion of long-term debt (4) (20,000) — Net carrying amount of long-term debt $ 1,781,252 $ 1,638,411 (1) The Company repurchased $586.0 million principal amount of the 2025 Convertible Notes during the nine months ended September 30, 2023 using $400.0 million of proceeds from the Term Loan, $118.4 million of proceeds from the 2030 Senior Notes, and $27.3 million of other available cash, resulting in a $37.5 million gain on early debt extinguishment, net of related unamortized debt issuance costs. (2) The Company repurchased $40.9 million principal amount of the 2026 Convertible Notes during the nine months ended September 30, 2023 using $35.2 million of proceeds from the 2030 Senior Notes, resulting in a $5.4 million gain on early debt extinguishment, net of related unamortized debt issuance costs. (3) Of the $225.0 million available for borrowing, the Company has not drawn down any amount under the Revolving Credit Facility. (4) The current portion of long-term debt is related to the Term Loan, which requires quarterly principal payments equal to 1.25% of the original Future minimum principal payments for long-term debt as of September 30, 2023 are presented in the table below (in thousands): 2025 Convertible Notes 2026 Convertible Notes Term Loan 2030 Senior Notes Total 2023 (remaining) $ — $ — $ 5,000 $ — $ 5,000 2024 — — 20,000 — 20,000 2025 413,957 — 20,000 — 433,957 2026 — 609,065 20,000 — 629,065 2027 onwards — — 330,000 400,000 730,000 Total principal amount $ 413,957 $ 609,065 $ 395,000 $ 400,000 $ 1,818,022 2030 Senior Notes On August 16, 2023, the Company issued $400.0 million aggregate principal amount of the 2030 Senior Notes in a private offering. The total net proceeds from the debt offering, after deducting $5.5 million initial purchase discounts and $2.6 million debt issuance costs, were approximately $391.9 million. The 2030 Senior Notes are senior unsecured obligations of the Company and bear interest at a rate of 8.5% per annum payable semi-annually in arrears on February 15th and August 15th of each year. The 2030 Senior Notes will mature on August 15, 2030, unless redeemed or repurchased earlier, and are subject to the terms and conditions set forth in the indenture governing the 2030 Senior Notes (the “Senior Notes Indenture”). The Company used a portion of the net proceeds from the offering of its 2030 Senior Notes to repurchase $125.3 million principal amount of the 2025 Convertible Notes and $40.9 million principal amount of the 2026 Convertible Notes. The Company intends to use the remaining net proceeds to repurchase and/or repay an additional portion of its outstanding Convertible Notes and the remainder of the net proceeds, if any, for general corporate purposes. The 2030 Senior Notes are or will be, as applicable, fully and unconditionally guaranteed on a senior unsecured basis by each of the Company’s existing and future domestic subsidiaries that guarantee indebtedness of the Company under the Credit Agreement. The Senior Notes Indenture also requires compliance with certain covenants, including the ability to create certain liens on assets to secure debt, the ability to grant subsidiary guarantees of certain debt without also providing guarantees of the 2030 Senior Notes by such subsidiary and certain change of control transactions, events of default, and other customary provisions. As of September 30, 2023, the Company was in compliance with all covenants under the Senior Notes Indenture. The Company may redeem the 2030 Senior Notes, in whole or in part, at any time prior to August 15, 2026 at a price equal to 100% of the principal amount thereof plus a “make-whole” premium and accrued and unpaid interest, if any. The Company may redeem the 2030 Senior Notes, in whole or in part, on or after August 15, 2026, at the redemption prices set forth in the Senior Notes Indenture, plus, in each case, accrued and unpaid interest thereon, if any. In addition, at any time prior to August 15, 2026, the Company may, on any one or more occasions, redeem up to 40% of the aggregate principal amount of the 2030 Senior Notes outstanding under the Senior Notes Indenture with the net cash proceeds of one or more equity offerings at a redemption price equal to 108.5% of the principal amount of the 2030 Senior Notes to be redeemed, plus accrued and unpaid interest thereon, if any, so long as 50% of the original aggregate amount of the 2030 Senior Notes remains outstanding immediately after such redemption. If the Company experiences a change of control triggering event (as defined in the Senior Notes Indenture), holders of the 2030 Senior Notes may require the Company to repurchase the 2030 Senior Notes at a repurchase price equal to 101% of the principal amount of the 2030 Senior Notes to be repurchased, plus accrued and unpaid interest, if any. Debt issuance costs were capitalized in the Condensed Consolidated Balance Sheets and amortized as interest expense using the effective interest rate method over the term of the 2030 Senior Notes. The effective interest rate on the 2030 Senior Notes, which is calculated as the contractual interest rate adjusted for the debt discount and issuance costs was 8.9%. Credit Agreement On February 14, 2023, the Company entered into a Credit Agreement with certain lenders. The Credit Agreement originally provided for a $200.0 million revolving loan facility (the “Revolving Credit Facility”), with a $25.0 million sub-limit for the issuance of letters of credit, and a $400.0 million delayed draw term loan facility (the “Term Loan”). On August 15, 2023, the Company entered into the first amendment to the Credit Agreement to increase the Revolving Credit Facility by $25.0 million to an aggregate amount of $225.0 million. The proceeds of the loans under the Revolving Credit Facility may be used for working capital and general corporate purposes. The Revolving Credit Facility commitments terminate, and all outstanding revolving loans thereunder are due and payable, on February 14, 2028. The obligations under the Credit Agreement are guaranteed by certain material domestic subsidiaries of the Company, and secured by substantially all of the personal property of the Company and such subsidiary guarantors. As of September 30, 2023, the Company was in compliance with all covenants under the Credit Agreement. In the second quarter of 2023, the Company fully drew down the Term Loan of $400.0 million and the proceeds were used to repurchase a portion of the Company’s 2025 Notes, in accordance with the terms of the Credit Agreement. As of September 30, 2023, the Company’s outstanding balance on the Term Loan was $395.0 million, which is due and payable on February 14, 2028. If on any date that is within 91 days prior to the final scheduled maturity date of any series of the Notes, such series of Notes is in an aggregate principal amount outstanding that exceeds an amount equal to 50% of last twelve months EBITDA, calculated as set forth in the Credit Agreement, the maturity date of both the Revolving Credit Facility and Term Loan shall automatically be modified to be such date. Borrowings under the Credit Agreement will bear interest, at the Company’s option, at either: (a) the fluctuating rate per annum equal to the greatest of (i) the prime rate then in effect, (ii) the federal funds rate then in effect, plus 0.5% per annum, and (iii) an adjusted term SOFR rate determined on the basis of a one-month interest period, plus 1.0%, in each case, plus a margin of between 1.0% and 2.0%; and (b) an adjusted term SOFR rate (based on one, three or six month interest periods), plus a margin of between 2.0% and 3.0%. The applicable margin in each case is determined based on the Company’s total net leverage ratio. Interest is payable quarterly in arrears with respect to borrowings bearing interest at the alternate base rate or on the last day of an interest period, but at least every three months, with respect to borrowings bearing interest at the term SOFR rate. As of September 30, 2023, the Company incurred $5.6 million of debt issuance costs in connection with the Credit Agreement, of which $4.9 million was capitalized in the Condensed Consolidated Balance Sheets and amortized primarily using the effective interest rate over the term of the Credit Agreement, while the remaining amount was expensed in the period incurred. The effective interest rate method on the Term Loan, which is calculated as the contractual interest rate adjusted for the debt discount and issuance costs, was 8.3% as of September 30, 2023. Convertible Notes In March 2020, the Company issued $1.0 billion aggregate principal amount of the 2025 Convertible Notes in a private placement to qualified institutional buyers. The 2025 Convertible Notes will mature on March 1, 2025, unless earlier repurchased or redeemed by the Company or converted pursuant to their terms. The total net proceeds from the debt offering, after deducting the initial purchase discounts and debt issuance costs, were approximately $986.5 million. In September 2020, the Company issued $650.0 million aggregate principal amount of the 2026 Convertible Notes in a private placement to qualified institutional buyers. The 2026 Convertible Notes will mature on March 15, 2026, unless earlier repurchased or redeemed by the Company or converted pursuant to their terms. The total net proceeds from the debt offering, after deducting the initial purchase discounts and debt issuance costs, were approximately $640.2 million. The Convertible Notes are senior, unsecured obligations of the Company that do not bear regular interest, and the principal amount of the Convertible Notes does not accrete. The Convertible Notes may bear special interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the respective indentures governing each of the Convertible Notes (collectively, the “Convertible Notes Indentures”) or if the Convertible Notes are not freely tradeable as required by each respective Convertible Notes Indenture. Partial Repurchase of 2025 and 2026 Convertible Notes In May 2023, the Company used the entire proceeds from the drawdown of the $400.0 million Term Loan and $27.3 million of other available cash to repurchase $460.7 million principal amount of the 2025 Convertible Notes, resulting in a gain on early debt extinguishment of $31.1 million, net of related unamortized debt issuance costs. In August 2023, the Company used a portion of the net proceeds from the offering of the 2030 Senior Notes to repurchase $125.3 million and $40.9 million aggregate principal of the 2025 Convertible Notes and 2026 Convertible Notes, respectively, by paying an aggregate amount of $153.7 million in cash, resulting in a gain on early debt extinguishment of $11.8 million, net of related unamortized debt issuance costs. Immediately after the partial repurchase in August 2023, the carrying value of the 2025 and 2026 Notes, net of unamortized debt issuance costs, was $412.2 million and $604.7 million, respectively. Other Terms of the Convertible Notes 2025 Convertible Notes 2026 Convertible Notes $1,000 principal amount initially convertible into number of the Company’s Class A Common Stock, par value $0.0001 2.7745 shares 2.3583 shares Equivalent initial approximate conversion price per share $ 360.43 $ 424.03 The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a make-whole fundamental change or a redemption period, each as defined in the respective Convertible Notes Indenture, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Convertible Notes in connection with such make-whole fundamental change or during the relevant redemption period. The Convertible Notes will be convertible at certain times and upon the occurrence of certain events in the future. Further, on or after December 1, 2024 for the 2025 Convertible Notes, and December 15, 2025 for the 2026 Convertible Notes, until the close of business on the scheduled trading day immediately preceding the relevant maturity date, holders of the Convertible Notes may convert all or a portion of their Convertible Notes regardless of these conditions. Pursuant to the terms of the respective Convertible Notes Indenture, effective January 1, 2022, the Company made an irrevocable election to settle the principal portion of the Convertible Notes only in cash, with the conversion premium to be settled in cash or shares. During the three and nine months ended September 30, 2023, the conditions allowing holders of the 2025 Convertible Notes and 2026 Convertible Notes to convert were not met. The Convertible Notes of either series may be convertible thereafter if one or more of the conversion conditions specified in the applicable Convertible Notes Indenture is satisfied during future measurement periods. The Company may redeem the Convertible Notes at its option, on or after March 5, 2022 for the 2025 Convertible Notes, and March 20, 2023 for the 2026 Convertible Notes, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid special interest to, but excluding the redemption date, subject to certain conditions. No sinking fund is provided for the Convertible Notes. Upon the occurrence of a fundamental change (as defined in each respective Convertible Notes Indenture) prior to the maturity date, holders may require the Company to repurchase all or a portion of the 2025 Convertible Notes or 2026 Convertible Notes for cash at a price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus any accrued and unpaid special interest to, but excluding, the fundamental change repurchase date. As of September 30, 2023, the Company was in compliance with all covenants under each of the Convertible Notes Indentures. Capped Calls In connection with the offering of the Convertible Notes, the Company entered into privately-negotiated capped call transactions relating to each series of Convertible Notes with certain counterparties (collectively the “Capped Calls”). The initial strike price of the Convertible Notes corresponds to the initial conversion price of each of the Convertible Notes. The Capped Calls are generally intended to reduce or offset the potential dilution to the Class A Common Stock upon any conversion of the Convertible Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. The Capped Calls are subject to either adjustment or termination upon the occurrence of specified extraordinary events affecting the Company, including a merger event, a tender offer, and a nationalization, insolvency or delisting involving the Company. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including changes in law, insolvency filings; and hedging disruptions. The Capped Call transactions are recorded in stockholders’ equity and are not accounted for as derivatives. The following table below sets forth key terms and costs incurred for the Capped Calls related to each of the Convertible Notes: 2025 Convertible Notes 2026 Convertible Notes Initial approximate strike price per share, subject to certain adjustments $ 360.43 $ 424.03 Initial cap price per share, subject to certain adjustments $ 480.56 $ 556.10 Net cost incurred (in millions) $ 60.9 $ 41.8 Class A Common Stock covered, subject to anti-dilution adjustments (in millions) 2.8 1.5 Settlement commencement date 1/31/2024 2/13/2025 Settlement expiration date 2/28/2024 3/13/2025 All of the capped call transactions were outstanding as of September 30, 2023. The following table sets forth the interest expense recognized related to long-term debt (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Contractual interest expense $ 10,869 $ — $ 14,155 $ — Amortization of debt discount and issuance costs 1,067 1,118 3,465 3,350 Total interest expense related to long-term debt $ 11,936 $ 1,118 $ 17,620 $ 3,350 |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Note 6. Derivative Instruments In May 2023, the Company entered into a five-year floating-to-fixed interest rate swap agreement with the objective of reducing exposure to the fluctuating interest rates associated with the Company’s variable rate borrowing program by paying quarterly a fixed interest rate of 3.79%, plus a margin of 2% to 3%. The interest rate swap agreement was effective on June 30, 2023, and terminates on February 14, 2028, consistent with the duration of the maturity of the Term Loan. As of September 30, 2023, the interest rate swap agreement had a notional amount of $395.0 million. The Company’s interest rate swap agreement is designated as a cash flow hedge under ASC 815, Derivatives and Hedging (“ASC 815”), involving the assumption of variable amounts by a swap counterparty in exchange for the Company making fixed-rate payments to the counterparty over the life of the agreement, without the exchange of the underlying notional amount. These hedges are highly effective in offsetting changes in the Company’s future expected cash flows due to the fluctuation of the Company’s variable rate debt. The Company monitors the effectiveness of its hedges on a quarterly basis. The Company does not hold its interest rate swap agreement for trading or speculative purposes. The Company will recognize its interest rate derivative designated as a cash flow hedge on a gross basis as an asset and a liability at fair value in the Condensed Consolidated Balance Sheets. The unrealized gains and losses on the interest rate swap agreement are included in other comprehensive income (loss) and will be subsequently recognized in earnings within or against interest expense when the hedged interest payments are accrued. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Note 7. Business Combinations On July 31, 2023, the Company completed its acquisition of certain assets of Hopin, Inc. (“Hopin”), a virtual events platform that aims to connect people around the world through immersive and interactive online experiences. The total purchase price consideration of $22.2 million consisted of $14.7 million in cash, and the acquisition date fair-value of contingent consideration of $7.5 million, out of total maximum contingent consideration of $35.0 million based on the achievement of specified performance targets by the Hopin business over multiple years, paid quarterly in cash. The acquired technology will be incorporated into the Company's global communication platform, providing customers with enhanced virtual events and webinar experiences. The transaction was accounted for as a business combination. The preliminary allocation of the purchase price based on their estimated fair values included $12.7 million for acquired technology, less $3.3 million for net acquired liabilities, with the remaining $12.8 million allocated to goodwill. The amortizable intangible assets have a weighted-average useful life of three years. The goodwill recognized is attributable primarily to the contributions of the acquired technology to the overall corporate strategy and assembled workforce. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Note 8. Leases The Company primarily leases facilities for office and data center space under non-cancelable operating leases for its U.S. and international locations. As of September 30, 2023, non-cancellable leases are set to expire on various dates between 2023 and 2029. The balances of the Company’s finance and operating leases were recorded on the Condensed Consolidated Balance Sheets as follows (in thousands): September 30, 2023 December 31, 2022 Operating leases Operating lease right-of-use assets $ 32,477 $ 35,433 Accrued liabilities $ 15,451 $ 17,513 Other long-term liabilities 18,577 20,182 Total operating lease liabilities $ 34,028 $ 37,695 Nine Months Ended September 30, 2023 2022 Supplemental Cash Flow Information (in thousands) Operating cash flows resulting from operating leases: Cash paid for amounts included in the measurement of lease liabilities $ 17,522 $ 17,541 New ROU assets obtained in exchange of lease liabilities: Operating leases $ 12,467 $ 5,653 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9. Commitments and Contingencies Legal Matters The Company is subject to certain legal proceedings described below, and from time to time may be involved in a variety of claims, lawsuits, investigations, and proceedings relating to contractual disputes, intellectual property rights, employment matters, regulatory compliance matters, and other litigation matters relating to various claims that arise in the normal course of business. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing specific litigation and regulatory matters using reasonably available information. The Company develops its views on estimated losses in consultation with inside and outside counsel, which involves a subjective analysis of potential results and outcomes, assuming various combinations of appropriate litigation and settlement strategies. Actual claims could settle or be adjudicated against the Company in the future for materially different amounts than the Company has accrued due to the inherently unpredictable nature of litigation. Legal fees are expensed in the period in which they are incurred. Patent Infringement Matter On April 25, 2017, Uniloc USA, Inc. and Uniloc Luxembourg, S.A. (together, “Uniloc”) filed in the U.S. District Court for the Eastern District of Texas two actions against the Company alleging infringement of U.S. Patent Nos. 7,804,948; 7,853,000; and 8,571,194 by RingCentral’s Glip unified communications application. The plaintiffs seek a declaration that the Company has infringed the patents, damages according to proof, injunctive relief, as well as their costs, attorney’s fees, expenses and interest. On October 9, 2017, the Company filed a motion to dismiss or transfer requesting that the case be transferred to the United States District Court for the Northern District of California. In response to the motion, plaintiffs filed a first amended complaint on October 24, 2017. The Company filed a renewed motion to dismiss or transfer on November 15, 2017. Although briefing on that motion has been completed, the motion has not yet been decided. On February 5, 2018, Uniloc moved to stay the litigation pending the resolution of certain third-party inter partes review proceedings (“IPRs”) before the United States Patent and Trademark Office. On February 9, 2018, the court stayed the litigation pending resolution of the IPRs without prejudice to or waiver of the Company’s motion to dismiss or transfer. This litigation is still in its early stages. Based on the information known by the Company as of the date of this filing and the rules and regulations applicable to the preparation of the Company’s condensed consolidated financial statements, we estimate the amount of any such loss or range of loss that may occur would be immaterial. The Company intends to vigorously defend against this lawsuit. CIPA Matter On June 16, 2020, Plaintiff Meena Reuben (“Reuben”) filed a complaint against the Company for a putative class action lawsuit in California Superior Court for San Mateo County. The complaint alleges claims on behalf of a class of individuals for whom, while they were in California, the Company allegedly intercepted and recorded communications between individuals and the Company’s customers without the individual’s consent, in violation of the California Invasion of Privacy Act (“CIPA”) Sections 631 and 632.7. Reuben seeks statutory damages of $5,000 for each alleged violation of Sections 631 and 632.7, injunctive relief, and attorneys’ fees and costs, and other unspecified amount of damages. The parties participated in mediation on August 24, 2021. On September 16, 2021, Reuben filed an amended complaint. The Company filed a demurrer to the amended complaint on October 18, 2021, and a motion for judgment on the pleadings on January 23, 2023. The Court overruled the Company’s demurrer and motion for judgment on the pleadings, and the parties are now engaged in discovery. This litigation is still in its early stages. Based on the information known by the Company as of the date of this filing and the rules and regulations applicable to the preparation of the Company’s condensed consolidated financial statements, it is not possible to provide an estimated amount of any such loss or range of loss that may occur. The Company intends to vigorously defend against this lawsuit. Other Matter On June 14, 2019, the Company filed suit in the Superior Court of California, County of Alameda, against Bright Pattern, Inc. and two of its officers, alleging that the defendants negotiated a potential acquisition of Bright Pattern by RingCentral fraudulently and in bad faith. The Company seeks its costs incurred in negotiating under the Letter of Intent (“LOI”) that the parties entered into and damages for lost opportunity as a result of forgoing another acquisition opportunity, and attorneys’ fees and costs. On August 26, 2019, Bright Pattern filed a cross-complaint against the Company and two of its executive officers alleging breach of the LOI as well as tort claims arising from the Company’s allegedly inducing Bright Pattern to enter into the LOI and subsequent extensions while allegedly misstating the timeframe for the proposed transaction. As damages, Bright Pattern seeks audit fees it allegedly incurred, a $5.0 million break-up fee, its alleged “cash burn” during the negotiations, and unspecified lost opportunity damages. The Company filed a demurrer to Bright Pattern’s amended cross-complaint, as well as a related motion to strike. On May 7, 2020, the court denied both the motion to strike and demurrer. On July 19, 2022, the parties filed a joint motion to stay the proceedings, which the court granted on July 20, 2022. On October 19, 2023, Bright Pattern moved to lift the stay. Based on the information known by the Company as of the date of this filing and the rules and regulations applicable to the preparation of the Company’s condensed consolidated financial statements, it is not possible to provide an estimated amount of any loss or range of loss that may occur. The Company intends to vigorously prosecute and defend this lawsuit. Purchase Obligations During the second quarter of 2023, the Company entered into a commercial arrangement with a total incremental commitment of $19.8 million through January 2025. The entire incremental commitment balance was outstanding as of September 30, 2023. During the first quarter of 2023, the Company entered into a commercial arrangement with a total commitment of $124.0 million through January 2029, out of which $113.7 million remained outstanding as of September 30, 2023. |
Stockholders_ Deficit and Conve
Stockholders’ Deficit and Convertible Preferred Stock | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Deficit and Convertible Preferred Stock | Note 10. Stockholders’ Deficit and Convertible Preferred Stock Share Repurchase Programs On February 13, 2023, the Company’s board of directors authorized a share repurchase program under which it may repurchase up to $175.0 million of the Company’s outstanding shares of Class A Common Stock, subject to certain limitations. Subsequently, on May 16, 2023, the board of directors authorized an additional share repurchase program under which the Company may repurchase up to an additional $125.0 million of our outstanding Class A Common Stock, also subject to certain limitations, for a total repurchase authorization of up to $300.0 million under these programs. Under these programs, share repurchases may be made at the Company’s discretion from time to time in open market transactions, privately negotiated transactions, or other means, subject to a minimum cash balance. The programs do not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares of its Class A Common Stock. The timing and number of any shares repurchased under the programs will depend on a variety of factors, including stock price, trading volume, and general business and market conditions. The authorization under these programs is effective until December 31, 2023. The following table summarizes the share repurchase activity of our Class A Common Stock for the three and nine and months ended September 30, 2023 (in thousands): Three Months Ended Nine Months Ended Shares Amount Shares Amount Repurchases under share repurchase programs 2,489 $ 74,948 7,969 $ 249,409 Amounts for excise tax withholdings and broker’s commissions — 344 1,164 Total repurchases of common stock 2,489 $ 75,292 7,969 $ 250,573 The Inflation Reduction Act of 2022 imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. During the nine months ended September 30, 2023, the Company reflected the applicable excise tax withholdings and broker’s commissions in additional paid in capital as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in accrued liabilities in the Condensed Consolidated Balance Sheets. As of September 30, 2023, approximately $50.6 million remained authorized and available under the Company’s share repurchase programs for future share repurchases. Series A Convertible Preferred Stock On November 8, 2021, the Company entered into the Investment Agreement, pursuant to which the Company sold to Searchlight Investor, in a private placement exempt from registration under the Securities Act of 1933, as amended, 200,000 shares of newly-issued Series A Convertible Preferred Stock, par value $0.0001 per share, for an aggregate purchase price of $200 million. The Series A Convertible Preferred Stock issued to Searchlight Investor pursuant to the Investment Agreement is convertible into shares of the Company’s Class A Common Stock, par value $0.0001 per share, at a conversion price of $269.22 per share, subject to adjustment as provided in the certificate of designations specifying the terms of such shares. The transactions contemplated by the Investment Agreement closed on November 9, 2021. The Series A Convertible Preferred Stock ranks senior to the shares of the Company’s Class A Common Stock and Class B Common Stock with respect to rights on the distribution of assets on any voluntary or involuntary liquidation or winding up of the affairs of the Company. The Series A Convertible Preferred Stock is a zero coupon, perpetual preferred stock, with a liquidation preference of $1,000 per share and other customary terms, including with respect to mandatory conversion and change of control premium under certain circumstances. The shares of Series A Convertible Preferred Stock shall not be redeemable or otherwise mature, other than for a liquidation or a specified change in control event as provided in the certificate of designations specifying the terms of such shares. Holders of Series A Convertible Preferred Stock will be entitled to vote with the holders of the Class A Common Stock and Class B Common Stock on an as-converted basis. Holders of the Series A Convertible Preferred Stock will be entitled to a separate class vote with respect to, among other things, certain amendments to the Company’s organizational documents that have an adverse impact on the rights, preferences, privileges or voting power of the Series A Convertible Preferred Stock, authorizations or issuances of Company capital stock, or other securities convertible into capital stock, that is senior to, or equal in priority with, the Series A Convertible Preferred Stock, and increases or decreases in the number of authorized shares of Series A Convertible Preferred Stock. As the liquidation or specified change in control event is not solely within the Company’s control, the Series A Convertible Preferred Stock is therefore classified as temporary equity and recorded outside of stockholders’ equity in the Condensed Consolidated Balance Sheets. As of September 30, 2023, and December 31, 2022, there were 200,000 shares of the Company’s Series A Convertible Preferred Stock issued and outstanding, and the carrying value, net of issuance costs, was $199.4 million. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Note 11. Share-Based Compensation A summary of share-based compensation expense recognized in the Condensed Consolidated Statements of Operations is as follows (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Cost of revenues $ 9,530 $ 8,464 $ 27,134 $ 26,161 Research and development 24,265 21,830 70,358 68,310 Sales and marketing 37,694 37,548 114,455 116,389 General and administrative 40,193 27,816 102,586 82,917 Total share-based compensation expense $ 111,682 $ 95,658 $ 314,533 $ 293,777 A summary of share-based compensation expense by award type is as follows (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Employee stock purchase plan rights (“ESPP”) $ 1,063 $ 1,058 $ 5,744 $ 5,486 Performance stock units (“PSUs”) 10,875 1,313 15,211 1,825 Restricted stock units (“RSUs”) 99,744 93,287 293,578 286,466 Total share-based compensation expense $ 111,682 $ 95,658 $ 314,533 $ 293,777 Equity Incentive Plans As of September 30, 2023, a total of 13,005,630 shares remained available for grant under the RingCentral, Inc. Amended and Restated 2013 Equity Incentive Plan (“2013 Plan”). A summary of option activity under all of the Company’s equity incentive plans as of September 30, 2023, and changes during the period then ended is presented in the following table: Number of Weighted- Weighted- Aggregate Outstanding as of December 31, 2022 22 $ 12.53 0.5 $ 509 Exercised (19) 11.40 Canceled/Forfeited — — Outstanding as of September 30, 2023 3 $ 19.43 0.2 $ 32 Vested and expected to vest as of September 30, 2023 3 $ 19.43 0.2 $ 32 Exercisable as of September 30, 2023 3 $ 19.43 0.2 $ 32 There were no options granted during the three and nine months ended September 30, 2023 and 2022. The total intrinsic value of options exercised during the three months ended September 30, 2023 and 2022, and nine months ended September 30, 2023, was immaterial. The total intrinsic value of options exercised during the nine months ended September 30, 2022 was $13.3 million. There is no remaining unamortized share-based compensation expense. Employee Stock Purchase Plan The Company’s ESPP allows eligible employees to purchase shares of the Company’s Class A Common Stock at a discounted price through payroll deductions. As of September 30, 2023, there was a total of $0.8 million of unrecognized share-based compensation expense, net of estimated forfeitures, related to the ESPP, which will be recognized on a straight-line basis over the remaining weighted-average vesting period of approximately 0.1 years. As of September 30, 2023, a total of 6,547,384 shares were available for issuance under the ESPP. Restricted and Performance Stock Units A summary of activity of restricted and performance-based stock units as of September 30, 2023, and changes during the period then ended is presented in the following table: Number of Weighted- Aggregate Outstanding as of December 31, 2022 5,100 $ 119.55 $ 180,577 Granted 12,702 32.40 Released (4,384) 62.99 Canceled/Forfeited (1,444) 76.28 Outstanding as of September 30, 2023 11,974 $ 53.03 $ 356,030 Restricted Stock Units The 2013 Plan provides for the issuance of RSUs to employees, directors, and consultants. RSUs issued under the 2013 Plan generally vest over four years. As of September 30, 2023, there was a total of $411.2 million of unrecognized share-based compensation expense, net of estimated forfeitures, related to RSUs, which will be recognized on a straight-line basis over the remaining weighted-average vesting period of approximately 2.8 years. Performance Stock Units The 2013 Plan provides for the issuance of PSUs. The PSUs granted under the 2013 Plan are contingent upon the achievement of predetermined market, performance, and service conditions. PSU expense is recognized using the accelerated attribution method over the requisite service period. For performance-based metrics, the compensation expense is based on a probability of achievement of the performance conditions. For market-based conditions, if the market conditions are not met but the service conditions are met, the PSUs will not vest; however, any stock-based compensation expense recognized will not be reversed. As of September 30, 2023, there was a total of $31.2 million unrecognized share-based compensation expense, net of estimated forfeitures, related to these PSUs, which will be recognized over the remaining service period of approximately 2.4 years. Employee Equity Compensation Plans The Company’s board of directors adopted employee equity bonus and executive equity compensation plans (“Plans”), which allow the recipients to earn fully vested shares of the Company’s Class A Common Stock upon the achievement of quarterly service and/or performance conditions and in lieu of a portion of base salary. During the three and nine months ended September 30, 2023, the Company issued 577,224 and 1,731,223 RSUs, respectively, under these Plans. The shares under these Plans will be issued from the reserve of shares available for issuance under the 2013 Plan. The total requisite service period of each quarterly equity bonus award is approximately 0.4 years. The unrecognized share-based compensation expense was approximately $5.0 million, which will be recognized over the remaining service period of 0.1 years. The shares issued under the bonus plan will be issued from the reserve of shares available for issuance under the 2013 Plan. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12. Income Taxes The (benefit from) provision for income taxes was $(3.8) million and $0.9 million for the three months ended September 30, 2023 and 2022, respectively, and $6.3 million and $2.9 million for the nine months ended September 30, 2023 and 2022, respectively. The provision for income taxes for the three and nine months ended September 30, 2023 and 2022 consisted primarily of foreign income taxes and state income taxes. For the three and nine months ended September 30, 2023 and 2022, the provision for income taxes differed from the U.S. federal statutory rate primarily due to foreign and state taxes currently payable. Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the deduction of research and development expenditures for tax purposes in the period the expenses were incurred and instead requires all U.S. and foreign research and development expenditures to be amortized over five and fifteen tax years, respectively. Due to this required capitalization of research and development expenditures, the Company has recorded current income tax expense of $0.9 million for the quarter ended September 30, 2023. The current income tax provision is primarily for state taxes we anticipate paying as a result of statutory limitations on our ability to offset expected taxable income with net operating loss carry forwards in certain states. The realization of tax benefits of net deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available objective evidence, the Company does not believe it is more likely than not that certain net deferred tax assets will be realizable. Accordingly, the Company continues to provide a full valuation allowance against the entire domestic and the majority of the foreign net deferred tax assets as of September 30, 2023 and December 31, 2022. The Company intends to maintain the full valuation allowance on the U.S. and certain foreign net deferred tax assets until sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance. During the three and nine months ended September 30, 2023, there were no material changes to the total amount of unrecognized tax benefits. |
Basic and Diluted Net Loss Per
Basic and Diluted Net Loss Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss Per Share | Note 13. Basic and Diluted Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, stock options, restricted stock units, ESPP, convertible senior notes, and convertible preferred stock, to the extent dilutive. For the three and nine months ended September 30, 2023 and 2022, all such common stock equivalents have been excluded from diluted net loss per share as the effect to net loss per share would be anti-dilutive. The following table sets forth the computation of the Company’s basic and diluted net loss per share of common stock (in thousands, except per share data): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Numerator Net loss $ (42,116) $ (284,616) $ (117,997) $ (595,103) Denominator Weighted-average common shares outstanding for basic and diluted net loss per share 94,593 95,575 95,213 95,097 Basic and diluted net loss per share $ (0.45) $ (2.98) $ (1.24) $ (6.26) The following table summarizes the potentially dilutive common shares that were excluded from diluted weighted-average common shares outstanding because including them would have had an anti-dilutive effect (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Shares of common stock issuable under equity incentive plans outstanding 12,598 4,064 9,320 3,703 Shares of common stock related to convertible preferred stock 743 743 743 743 Potential common shares excluded from diluted net loss per share 13,341 4,807 10,063 4,446 Pursuant to the terms of the respective Convertible Notes Indentures, effective January 1, 2022, the Company made an irrevocable election to settle the principal portion of the Convertible Notes only in cash, with the conversion premium to be settled in cash or shares. The denominator for diluted net income per share does not include any effect from the capped call transactions the Company entered into concurrently with the issuance of the Convertible Notes as this effect would be anti-dilutive. In the event of conversion of the Notes, if shares are delivered to the Company under the capped call, they will offset the dilutive effect of the shares that the Company would issue under the Convertible Notes. |
Restructuring Activities
Restructuring Activities | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | Note 14. Restructuring Activities In the fourth quarter of 2022, the Company’s board of directors approved a reduction in force plan (the “Q4’22 Plan”) as part of broader efforts to align the Company’s cost base with its strategic priorities in the current environment. The restructuring costs associated with the Q4’22 Plan primarily consisted of severance payments, employee benefits and related costs. The following table summarizes the Company’s restructuring costs that were recorded as an operating expense in the accompanying Condensed Consolidated Statement of Operations during the three and nine months ended September 30, 2023 (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Cost of revenues $ 6 $ 96 $ 695 $ 252 Research and development 1,794 2,383 4,281 2,722 Sales and marketing 1,124 2,096 5,093 3,033 General and administrative 1,520 740 2,856 1,823 Total restructuring costs $ 4,444 $ 5,315 $ 12,925 $ 7,830 The following table summarizes the Company’s restructuring liability that is included in accrued liabilities in the accompanying Condensed Consolidated Balance Sheets (in thousands): Balance as of December 31, 2022 $ 5,485 Restructuring costs 12,925 Cash payments (16,783) Balance as of September 30, 2023 $ 1,627 As part of broader efforts to optimize our cost structure, the Board of Directors approved a reduction-in-force plan in the fourth quarter of 2023. The Company estimates the aggregate incremental restructuring costs to be approximately $10.0 million to $15.0 million, primarily consisting of severance payments, employee benefits and related costs. The Company expects to incur these charges in the fourth quarter of 2023 and the first quarter of 2024. The Company expects the reduction-in-force to be substantially complete by the first quarter of 2024, subject to local law and consultation requirements, which may extend the process beyond the first quarter of 2024 in certain countries. The Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur as a result of or in connection with the implementation of the plan. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15. Subsequent Events Increase to Share Repurchase Programs On November 1, 2023, the Company’s board of directors authorized an incremental $100.0 million under its share repurchase programs which, combined with the remaining $50.6 million available under previous authorizations as of September 30, 2023, results in approximately $150.6 million available to repurchase outstanding shares of the Company’s Class A Common Stock. Share repurchases may be made at the Company’s discretion from time to time in open market transactions, privately negotiated transactions, or other means, subject to a minimum cash balance and certain other limitations. The Company’s share repurchase programs do not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares of its Class A Common Stock. The timing and number of any shares repurchased will depend on a variety of factors, including stock price, trading volume, and general business and market conditions. The additional $100.0 million authorization under this program expires on December 31, 2024. Second Amendment to Credit Agreement On November 2, 2023, the Company entered into the Second Amendment to Credit Agreement with certain lenders to increase the Term Loan by $75.0 million in accordance with the incremental loan provisions of the Credit Agreement, to an aggregate principal amount of $475.0 million. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net loss | $ (42,116) | $ (21,482) | $ (54,399) | $ (284,616) | $ (159,515) | $ (150,972) | $ (117,997) | $ (595,103) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 shares | Sep. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Sonalee Parekh [Member] | ||
Trading Arrangements, by Individual | ||
Arrangement Duration | 450 days | |
Sonalee Parekh February 2024 Plan [Member] | Sonalee Parekh [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On September 1, 2023, Sonalee Parekh, our Chief Financial Officer, terminated a Rule 10b5-1 trading arrangement providing for the sale from time to time of an aggregate of up to 77,599 shares of our Class A common stock. The trading arrangement was intended to satisfy the affirmative defense in Rule 10b5-1(c). The duration of the trading arrangement was until February 26, 2024, or earlier if all transactions under the trading arrangement were completed. | |
Name | Sonalee Parekh | |
Title | Chief Financial Officer | |
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | September 1, 2023 | |
Aggregate Available | 77,599 | 77,599 |
Sonalee Parekh November 2024 Plan [Member] | Sonalee Parekh [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On September 1, 2023, Sonalee Parekh, our Chief Financial Officer, also adopted a Rule 10b5-1 trading arrangement providing for the sale from time to time of up to 183,036 shares of Class A common stock. The number of shares that may be sold under the trading arrangement will be reduced by the number of shares (not yet determinable) withheld to satisfy tax obligations upon the vesting of certain outstanding equity awards. In addition, the number of shares that may be sold under the trading arrangement could be increased by the number of shares of the company’s Class A common stock, if any (not yet determinable) are awarded to Ms. Parekh under the company’s employee equity bonus and executive equity compensation plans, which allow the recipients to earn fully vested shares of the Company’s Class A Common Stock upon the achievement of quarterly service and/or performance conditions and in lieu of a portion of base salary. The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c). The duration of the trading arrangement is until November 24, 2024 or earlier if all transactions under the trading arrangement are completed. | |
Name | Sonalee Parekh | |
Title | Chief Financial Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | September 1, 2023 | |
Aggregate Available | 183,036 | 183,036 |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The Company’s unaudited condensed consolidated financial statements and accompanying notes reflect all adjustments (all of which are normal, recurring in nature and those discussed in these notes) that are, in the opinion of management, necessary for a fair presentation of the interim periods presented. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2023. Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (“SEC”). |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The significant estimates made by management affect revenues, the allowance for doubtful accounts, deferred and prepaid sales commission costs, goodwill, useful lives of intangible assets, share-based compensation, capitalization of internally developed software, return reserves, derivative instruments, provision for income taxes, uncertain tax positions, loss contingencies, sales tax liabilities and accrued liabilities. Management periodically evaluates these estimates and will make adjustments prospectively based upon the results of such periodic evaluations. Actual results may differ from these estimates. |
Segment Information | Segment Information The Company has determined that the chief executive officer is the chief operating decision maker. The Company’s chief executive officer reviews financial information presented on a consolidated basis for purposes of assessing performance and making decisions on how to allocate resources. Accordingly, the Company has determined that it operates in a single reportable segment. |
Concentrations | Concentrations As of September 30, 2023 and December 31, 2022, none of the Company’s customers accounted for more than 10% of the Company’s total accounts receivable. Long-lived assets by geographic location are based on the location of the legal entity that owns the asset. As of September 30, 2023 and December 31, 2022, approximately 94% of the Company’s consolidated long-lived assets were located in the U.S. No other single country outside of the U.S. represented more than 10% of the Company’s consolidated long-lived assets. |
Derivative Instruments and Hedging | Derivative Instruments and Hedging The Company measures its derivative financial instruments at fair value and recognizes them as assets and liabilities in the Condensed Consolidated Balance Sheets. The Company records changes in the fair value of derivative financial instruments designated as cash flow hedges in other comprehensive income (loss). When a hedged transaction affects earnings, the Company subsequently reclassifies the net derivative gain or loss within earnings into the same line as the hedged item on the Condensed Consolidated Statements of Operations to offset the changes in the hedged transaction. The cash flow effects related to derivative financial instruments designated as cash flow hedges are included within operating activities on the Condensed Consolidated Statements of Cash Flows. The Company’s interest rate swap agreement is designated as a cash flow hedge under ASC 815, Derivatives and Hedging (“ASC 815”), involving the assumption of variable amounts by a swap counterparty in exchange for the Company making fixed-rate payments to the counterparty over the life of the agreement, without the exchange of the underlying notional amount. These hedges are highly effective in offsetting changes in the Company’s future expected cash flows due to the fluctuation of the Company’s variable rate debt. The Company monitors the effectiveness of its hedges on a quarterly basis. The Company does not hold its interest rate swap agreement for trading or speculative purposes. The Company will recognize its interest rate derivative designated as a cash flow hedge on a gross basis as an asset and a liability at fair value in the Condensed Consolidated Balance Sheets. The unrealized gains and losses on the interest rate swap agreement are included in other comprehensive income (loss) and will be subsequently recognized in earnings within or against interest expense when the hedged interest payments are accrued. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted There are no material recent accounting pronouncements not yet adopted during the three and nine months ended September 30, 2023 that are significant or potentially significant to the Company. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table provides information about disaggregated revenue by primary geographical markets: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Primary geographical markets North America 90 % 90 % 90 % 90 % Others 10 10 10 10 Total revenues 100 % 100 % 100 % 100 % |
Financial Statement Components
Financial Statement Components (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Components of Cash and Cash Equivalents | Cash and cash equivalents consisted of the following (in thousands): September 30, 2023 December 31, 2022 Cash $ 121,888 $ 88,153 Money market funds 310,464 181,831 Total cash and cash equivalents $ 432,352 $ 269,984 |
Schedule of Components of Accounts Receivable, Net | Accounts receivable, net consisted of the following (in thousands): September 30, 2023 December 31, 2022 Accounts receivable $ 264,968 $ 242,650 Unbilled accounts receivable 95,111 78,249 Allowance for doubtful accounts (12,167) (9,581) Accounts receivable, net $ 347,912 $ 311,318 |
Schedule of Components of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): September 30, 2023 December 31, 2022 Prepaid expenses $ 34,521 $ 23,306 Inventory 1,165 1,209 Other current assets 60,172 31,334 Total prepaid expenses and other current assets $ 95,858 $ 55,849 |
Schedule of Components of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): September 30, 2023 December 31, 2022 Computer hardware and software $ 234,723 $ 221,727 Internal-use software development costs 239,670 199,642 Furniture and fixtures 8,818 8,937 Leasehold improvements 14,133 13,889 Total property and equipment, gross 497,344 444,195 Less: accumulated depreciation and amortization (313,751) (258,795) Property and equipment, net $ 183,593 $ 185,400 |
Schedule of Goodwill | The carrying value of goodwill is as follows (in thousands): Balance at December 31, 2022 $ 54,335 Acquisitions (Note 7) 12,428 Foreign currency translation adjustments (281) Balance at September 30, 2023 $ 66,482 |
Schedule of Carrying Values of Intangible Assets | The carrying values of intangible assets are as follows (in thousands): September 30, 2023 December 31, 2022 Weighted-Average Remaining Useful Life Cost Accumulated Acquired Cost Accumulated Acquired Customer relationships 2.7 years $ 26,138 $ 20,813 $ 5,325 $ 20,855 $ 19,090 $ 1,765 Developed technology 3.0 years 825,952 399,357 426,595 814,614 288,328 526,286 Total acquired intangible assets $ 852,090 $ 420,170 $ 431,920 $ 835,469 $ 307,418 $ 528,051 |
Schedule of Estimated Amortization Expense for Acquired Intangible Assets | Estimated amortization expense for acquired intangible assets for the following fiscal years is as follows (in thousands): 2023 (remaining) $ 38,152 2024 139,391 2025 138,522 2026 115,448 2027 onwards 407 Total estimated amortization expense $ 431,920 |
Schedule of Components of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): September 30, 2023 December 31, 2022 Accrued compensation and benefits $ 47,622 $ 53,419 Accrued sales, use, and telecom related taxes 38,898 37,836 Accrued marketing and sales commissions 59,066 127,940 Operating lease liabilities, short-term 15,451 17,513 Other accrued expenses 149,715 143,405 Total accrued liabilities $ 310,752 $ 380,113 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Carried at Fair Value | The financial instruments carried at fair value were determined using the following inputs (in thousands): Fair Value at Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 310,464 $ 310,464 $ — $ — Other assets: Interest rate swap derivatives $ 8,935 $ — $ 8,935 $ — Fair Value at Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 181,831 $ 181,831 $ — $ — Other assets: Long-term investments $ 1,646 $ — $ — $ 1,646 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Net Carrying Amount of the Outstanding Long-Term Debt | The following table sets forth the net carrying amount of the Company’s long-term debt (in thousands): Debt Instrument Maturity Date September 30, 2023 December 31, 2022 2025 Convertible Notes (1) March 1, 2025 $ 413,957 $ 1,000,000 2026 Convertible Notes (2) March 15, 2026 609,065 650,000 Term Loan under Credit Agreement February 14, 2028 395,000 — Revolving Credit Facility under Credit Agreement (3) February 14, 2028 — — 2030 Senior Notes August 15, 2030 400,000 — Total principal amount 1,818,022 1,650,000 Less: unamortized debt discount and issuance costs (16,770) (11,589) Less: current portion of long-term debt (4) (20,000) — Net carrying amount of long-term debt $ 1,781,252 $ 1,638,411 (1) The Company repurchased $586.0 million principal amount of the 2025 Convertible Notes during the nine months ended September 30, 2023 using $400.0 million of proceeds from the Term Loan, $118.4 million of proceeds from the 2030 Senior Notes, and $27.3 million of other available cash, resulting in a $37.5 million gain on early debt extinguishment, net of related unamortized debt issuance costs. (2) The Company repurchased $40.9 million principal amount of the 2026 Convertible Notes during the nine months ended September 30, 2023 using $35.2 million of proceeds from the 2030 Senior Notes, resulting in a $5.4 million gain on early debt extinguishment, net of related unamortized debt issuance costs. (3) Of the $225.0 million available for borrowing, the Company has not drawn down any amount under the Revolving Credit Facility. (4) The current portion of long-term debt is related to the Term Loan, which requires quarterly principal payments equal to 1.25% of the original |
Schedule of Future Minimum Principal Payments of the Term Facility | Future minimum principal payments for long-term debt as of September 30, 2023 are presented in the table below (in thousands): 2025 Convertible Notes 2026 Convertible Notes Term Loan 2030 Senior Notes Total 2023 (remaining) $ — $ — $ 5,000 $ — $ 5,000 2024 — — 20,000 — 20,000 2025 413,957 — 20,000 — 433,957 2026 — 609,065 20,000 — 629,065 2027 onwards — — 330,000 400,000 730,000 Total principal amount $ 413,957 $ 609,065 $ 395,000 $ 400,000 $ 1,818,022 |
Schedule of Debt Terms | 2025 Convertible Notes 2026 Convertible Notes $1,000 principal amount initially convertible into number of the Company’s Class A Common Stock, par value $0.0001 2.7745 shares 2.3583 shares Equivalent initial approximate conversion price per share $ 360.43 $ 424.03 |
Schedule of Key Terms and Costs Incurred | The following table below sets forth key terms and costs incurred for the Capped Calls related to each of the Convertible Notes: 2025 Convertible Notes 2026 Convertible Notes Initial approximate strike price per share, subject to certain adjustments $ 360.43 $ 424.03 Initial cap price per share, subject to certain adjustments $ 480.56 $ 556.10 Net cost incurred (in millions) $ 60.9 $ 41.8 Class A Common Stock covered, subject to anti-dilution adjustments (in millions) 2.8 1.5 Settlement commencement date 1/31/2024 2/13/2025 Settlement expiration date 2/28/2024 3/13/2025 |
Schedule of Interest Expense on Long-Term Debt | The following table sets forth the interest expense recognized related to long-term debt (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Contractual interest expense $ 10,869 $ — $ 14,155 $ — Amortization of debt discount and issuance costs 1,067 1,118 3,465 3,350 Total interest expense related to long-term debt $ 11,936 $ 1,118 $ 17,620 $ 3,350 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Components of Leases | The balances of the Company’s finance and operating leases were recorded on the Condensed Consolidated Balance Sheets as follows (in thousands): September 30, 2023 December 31, 2022 Operating leases Operating lease right-of-use assets $ 32,477 $ 35,433 Accrued liabilities $ 15,451 $ 17,513 Other long-term liabilities 18,577 20,182 Total operating lease liabilities $ 34,028 $ 37,695 |
Schedule of Lease Cost | Nine Months Ended September 30, 2023 2022 Supplemental Cash Flow Information (in thousands) Operating cash flows resulting from operating leases: Cash paid for amounts included in the measurement of lease liabilities $ 17,522 $ 17,541 New ROU assets obtained in exchange of lease liabilities: Operating leases $ 12,467 $ 5,653 |
Stockholders_ Deficit and Con_2
Stockholders’ Deficit and Convertible Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Stock Repurchased Activity | The following table summarizes the share repurchase activity of our Class A Common Stock for the three and nine and months ended September 30, 2023 (in thousands): Three Months Ended Nine Months Ended Shares Amount Shares Amount Repurchases under share repurchase programs 2,489 $ 74,948 7,969 $ 249,409 Amounts for excise tax withholdings and broker’s commissions — 344 1,164 Total repurchases of common stock 2,489 $ 75,292 7,969 $ 250,573 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Share-Based Compensation Expense Recognized to Statements of Operations | A summary of share-based compensation expense recognized in the Condensed Consolidated Statements of Operations is as follows (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Cost of revenues $ 9,530 $ 8,464 $ 27,134 $ 26,161 Research and development 24,265 21,830 70,358 68,310 Sales and marketing 37,694 37,548 114,455 116,389 General and administrative 40,193 27,816 102,586 82,917 Total share-based compensation expense $ 111,682 $ 95,658 $ 314,533 $ 293,777 |
Summary of Share-Based Compensation Expense by Award Type | A summary of share-based compensation expense by award type is as follows (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Employee stock purchase plan rights (“ESPP”) $ 1,063 $ 1,058 $ 5,744 $ 5,486 Performance stock units (“PSUs”) 10,875 1,313 15,211 1,825 Restricted stock units (“RSUs”) 99,744 93,287 293,578 286,466 Total share-based compensation expense $ 111,682 $ 95,658 $ 314,533 $ 293,777 |
Summary of Stock Option Activity Plans | A summary of option activity under all of the Company’s equity incentive plans as of September 30, 2023, and changes during the period then ended is presented in the following table: Number of Weighted- Weighted- Aggregate Outstanding as of December 31, 2022 22 $ 12.53 0.5 $ 509 Exercised (19) 11.40 Canceled/Forfeited — — Outstanding as of September 30, 2023 3 $ 19.43 0.2 $ 32 Vested and expected to vest as of September 30, 2023 3 $ 19.43 0.2 $ 32 Exercisable as of September 30, 2023 3 $ 19.43 0.2 $ 32 |
Summary of RSUs Activity | A summary of activity of restricted and performance-based stock units as of September 30, 2023, and changes during the period then ended is presented in the following table: Number of Weighted- Aggregate Outstanding as of December 31, 2022 5,100 $ 119.55 $ 180,577 Granted 12,702 32.40 Released (4,384) 62.99 Canceled/Forfeited (1,444) 76.28 Outstanding as of September 30, 2023 11,974 $ 53.03 $ 356,030 |
Basic and Diluted Net Loss Pe_2
Basic and Diluted Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Company's Basic and Diluted Net Income (Loss) Per Share of Common Stock | The following table sets forth the computation of the Company’s basic and diluted net loss per share of common stock (in thousands, except per share data): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Numerator Net loss $ (42,116) $ (284,616) $ (117,997) $ (595,103) Denominator Weighted-average common shares outstanding for basic and diluted net loss per share 94,593 95,575 95,213 95,097 Basic and diluted net loss per share $ (0.45) $ (2.98) $ (1.24) $ (6.26) |
Schedule of Potential Shares of Common Stock Excluded from Diluted Weighted-Average Common Shares Outstanding | The following table summarizes the potentially dilutive common shares that were excluded from diluted weighted-average common shares outstanding because including them would have had an anti-dilutive effect (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Shares of common stock issuable under equity incentive plans outstanding 12,598 4,064 9,320 3,703 Shares of common stock related to convertible preferred stock 743 743 743 743 Potential common shares excluded from diluted net loss per share 13,341 4,807 10,063 4,446 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Costs and Liability | The following table summarizes the Company’s restructuring costs that were recorded as an operating expense in the accompanying Condensed Consolidated Statement of Operations during the three and nine months ended September 30, 2023 (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Cost of revenues $ 6 $ 96 $ 695 $ 252 Research and development 1,794 2,383 4,281 2,722 Sales and marketing 1,124 2,096 5,093 3,033 General and administrative 1,520 740 2,856 1,823 Total restructuring costs $ 4,444 $ 5,315 $ 12,925 $ 7,830 The following table summarizes the Company’s restructuring liability that is included in accrued liabilities in the accompanying Condensed Consolidated Balance Sheets (in thousands): Balance as of December 31, 2022 $ 5,485 Restructuring costs 12,925 Cash payments (16,783) Balance as of September 30, 2023 $ 1,627 |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Details) - segment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Concentration Risk [Line Items] | ||
Number of reporting segments | 1 | |
U.S. | Long-lived Assets | Geographic Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk (in percent) | 94% | 94% |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | $ 26,500 | $ 195,700 | ||
Revenue, remaining performance obligation, amount | 2,300,000 | 2,300,000 | ||
Product revenues | $ 558,164 | $ 509,032 | $ 1,631,158 | $ 1,463,584 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, remaining performance obligation, percentage (in percent) | 53% | 53% | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | 12 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, remaining performance obligation, percentage (in percent) | 47% | 47% | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | ||||
Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk (in percent) | 100% | 100% | 100% | 100% |
Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk (in percent) | 90% | 90% | 90% | 90% |
Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | Others | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk (in percent) | 10% | 10% | 10% | 10% |
RingCentral MVP and RingCentral Customer Engagement Solutions | Revenue from Contract with Customer Benchmark | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk (in percent) | 90% | 90% | 90% | 90% |
RingCentral Customer Engagement Solutions | Revenue from Contract with Customer Benchmark | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk (in percent) | 10% | 10% | 10% | 10% |
Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Product revenues | $ 11,900 | $ 12,600 | $ 33,700 | $ 35,200 |
Minimum | ||||
Disaggregation of Revenue [Line Items] | ||||
Remaining performance obligations subscription term | 1 month | |||
Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
Remaining performance obligations subscription term | 5 years |
Financial Statement Component_2
Financial Statement Components - Components of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash | $ 121,888 | $ 88,153 | ||
Money market funds | 310,464 | 181,831 | ||
Total cash and cash equivalents | $ 432,352 | $ 269,984 | $ 305,383 | $ 267,162 |
Financial Statement Component_3
Financial Statement Components - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Restricted cash | $ 1,100,000 | $ 1,100,000 | $ 5,500,000 | ||
Depreciation and amortization | 21,000,000 | $ 18,300,000 | 61,800,000 | $ 52,800,000 | |
Amortization expense of intangible assets | 38,200,000 | 43,700,000 | 112,900,000 | 131,400,000 | |
Amortization of deferred and prepaid sales commission costs | 35,500,000 | 31,500,000 | 100,618,000 | 81,536,000 | |
Impairment loss in relation to costs capitalized | 0 | 0 | 0 | $ 0 | |
Non-cash gain | $ 7,000,000 | $ 11,500,000 | |||
Asset write-down charge | 124,900,000 | ||||
Accrued interest on the prepaid sales commission | $ 21,700,000 | ||||
Supplier finance program, payment timing, period | 5 years | 5 years | |||
Supplier finance program, obligation | $ 4,800,000 | $ 4,800,000 | |||
Supplier finance program, obligation, current | 2,800,000 | 2,800,000 | |||
Supplier finance program, obligation noncurrent | $ 2,000,000 | $ 2,000,000 |
Financial Statement Component_4
Financial Statement Components - Components of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable | $ 264,968 | $ 242,650 |
Unbilled accounts receivable | 95,111 | 78,249 |
Allowance for doubtful accounts | (12,167) | (9,581) |
Accounts receivable, net | $ 347,912 | $ 311,318 |
Financial Statement Component_5
Financial Statement Components - Components of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 34,521 | $ 23,306 |
Inventory | 1,165 | 1,209 |
Other current assets | 60,172 | 31,334 |
Total prepaid expenses and other current assets | $ 95,858 | $ 55,849 |
Financial Statement Component_6
Financial Statement Components - Components of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 497,344 | $ 444,195 |
Less: accumulated depreciation and amortization | (313,751) | (258,795) |
Property and equipment, net | 183,593 | 185,400 |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 234,723 | 221,727 |
Internal-use software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 239,670 | 199,642 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 8,818 | 8,937 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 14,133 | $ 13,889 |
Financial Statement Component_7
Financial Statement Components - Components of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 54,335 |
Acquisitions (Note 7) | 12,428 |
Foreign currency translation adjustments | (281) |
Goodwill, ending balance | $ 66,482 |
Financial Statement Component_8
Financial Statement Components - Summary of Carrying Values of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 852,090 | $ 835,469 |
Accumulated Amortization and Impairment | 420,170 | 307,418 |
Total estimated amortization expense | $ 431,920 | 528,051 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 2 years 8 months 12 days | |
Cost | $ 26,138 | 20,855 |
Accumulated Amortization and Impairment | 20,813 | 19,090 |
Total estimated amortization expense | $ 5,325 | 1,765 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 3 years | |
Cost | $ 825,952 | 814,614 |
Accumulated Amortization and Impairment | 399,357 | 288,328 |
Total estimated amortization expense | $ 426,595 | $ 526,286 |
Financial Statement Component_9
Financial Statement Components - Summary of Estimated Amortization Expense for Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
2023 (remaining) | $ 38,152 | |
2024 | 139,391 | |
2025 | 138,522 | |
2026 | 115,448 | |
2027 onwards | 407 | |
Total estimated amortization expense | $ 431,920 | $ 528,051 |
Financial Statement Componen_10
Financial Statement Components - Components of Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued compensation and benefits | $ 47,622 | $ 53,419 |
Accrued sales, use, and telecom related taxes | 38,898 | 37,836 |
Accrued marketing and sales commissions | 59,066 | 127,940 |
Operating lease liabilities, short-term | 15,451 | 17,513 |
Other accrued expenses | 149,715 | 143,405 |
Total accrued liabilities | $ 310,752 | $ 380,113 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial Instruments Carried at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Other assets: | ||
Interest rate swap derivatives | $ 8,935 | |
Long-term investments | $ 1,646 | |
Level 1 | ||
Other assets: | ||
Interest rate swap derivatives | 0 | |
Long-term investments | 0 | |
Level 2 | ||
Other assets: | ||
Interest rate swap derivatives | 8,935 | |
Long-term investments | 0 | |
Level 3 | ||
Other assets: | ||
Interest rate swap derivatives | 0 | |
Long-term investments | 1,646 | |
Money market funds | ||
Cash equivalents: | ||
Money market funds | 310,464 | 181,831 |
Money market funds | Level 1 | ||
Cash equivalents: | ||
Money market funds | 310,464 | 181,831 |
Money market funds | Level 2 | ||
Cash equivalents: | ||
Money market funds | 0 | 0 |
Money market funds | Level 3 | ||
Cash equivalents: | ||
Money market funds | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Aug. 16, 2023 |
2026 Convertible Notes | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, interest rate (in percent) | 0% | |
Fair value of convertible senior notes | $ 512.5 | |
2025 Convertible Notes | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, interest rate (in percent) | 0% | |
Fair value of convertible senior notes | $ 382.7 | |
2030 Senior Notes | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, interest rate (in percent) | 8.50% | |
2030 Senior Notes | Level 2 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument, interest rate (in percent) | 8.50% | |
Fair value of convertible senior notes | $ 386.4 | |
Credit Agreement | Level 2 | Line of Credit | Secured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying amount of debt | $ 395 |
Long-Term Debt - Summary of Net
Long-Term Debt - Summary of Net Carrying Amount of the Outstanding Long-Term Debt (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
May 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Aug. 30, 2023 | Aug. 15, 2023 | Feb. 14, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||||||||
Total principal amount | $ 1,818,022,000 | $ 1,650,000,000 | ||||||
Less: unamortized debt discount and issuance costs | (16,770,000) | (11,589,000) | ||||||
Less: current portion of term loan | (20,000,000) | 0 | ||||||
Long-term debt, net | 1,781,252,000 | 1,638,411,000 | ||||||
Gain on early debt extinguishment | 42,891,000 | $ 0 | ||||||
2025 Convertible Notes | Convertible Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Total principal amount | 413,957,000 | 1,000,000,000 | ||||||
Debt instrument, repurchase amount | $ 460,700,000 | 586,000,000 | $ 125,300,000 | |||||
Gain on early debt extinguishment | $ 31,100,000 | 37,500,000 | ||||||
2025 Convertible Notes | Convertible Debt | Proceeds From Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayment of debt | 400,000,000 | |||||||
2025 Convertible Notes | Convertible Debt | Proceeds From 2030 Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayment of debt | 118,400,000 | |||||||
2025 Convertible Notes | Convertible Debt | Other Available Cash On Hand | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayment of debt | 27,300,000 | |||||||
2026 Convertible Notes | Convertible Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Total principal amount | 609,065,000 | 650,000,000 | ||||||
Debt instrument, repurchase amount | 40,900,000 | $ 40,900,000 | ||||||
Gain on early debt extinguishment | 5,400,000 | |||||||
2026 Convertible Notes | Convertible Debt | Proceeds From 2030 Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayment of debt | 35,200,000 | |||||||
Term Loan | Secured Debt | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Total principal amount | 395,000,000 | 0 | ||||||
Repayment of debt | $ 400,000,000 | |||||||
Line of credit facility, maximum borrowing capacity | 400,000,000 | $ 400,000,000 | ||||||
Long-term line of credit | $ 395,000,000 | |||||||
Debt instrument, quarterly payment, principal interest rate (in percent) | 1.25% | |||||||
Term Loan | Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Total principal amount | $ 0 | 0 | ||||||
Line of credit facility, maximum borrowing capacity | 225,000,000 | $ 225,000,000 | $ 200,000,000 | |||||
Long-term line of credit | 0 | |||||||
2030 Senior Notes | Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Total principal amount | $ 400,000,000 | $ 0 |
Long-Term Debt - Summary of Fut
Long-Term Debt - Summary of Future Minimum Principal Payments of the Term Facility (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Aug. 30, 2023 |
Debt Instrument [Line Items] | ||
2023 (remaining) | $ 5,000 | |
2024 | 20,000 | |
2025 | 433,957 | |
2026 | 629,065 | |
2027 onwards | 730,000 | |
Total principal amount | 1,818,022 | |
2025 Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
2023 (remaining) | 0 | |
2024 | 0 | |
2025 | 413,957 | |
2026 | 0 | |
2027 onwards | 0 | |
Total principal amount | 413,957 | $ 412,200 |
2026 Convertible Notes | Convertible Debt | ||
Debt Instrument [Line Items] | ||
2023 (remaining) | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 609,065 | |
2027 onwards | 0 | |
Total principal amount | 609,065 | $ 604,700 |
Term Loan | Secured Debt | Line of Credit | ||
Debt Instrument [Line Items] | ||
2023 (remaining) | 5,000 | |
2024 | 20,000 | |
2025 | 20,000 | |
2026 | 20,000 | |
2027 onwards | 330,000 | |
Total principal amount | 395,000 | |
2030 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
2023 (remaining) | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
2027 onwards | 400,000 | |
Total principal amount | $ 400,000 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Aug. 16, 2023 | Aug. 15, 2023 | Aug. 31, 2023 | May 31, 2023 | Sep. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Aug. 30, 2023 | Feb. 14, 2023 | |
Debt Instrument [Line Items] | |||||||||||
Proceeds from issuance of long-term debt, net of issuance costs | $ 786,311,000 | $ 0 | |||||||||
Gain (loss) on early debt extinguishment | 42,891,000 | $ 0 | |||||||||
Long-term debt | $ 1,818,022,000 | ||||||||||
Convertible Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt redemption price (in percent) | 100% | ||||||||||
2030 Senior Notes | Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total principal amount | $ 400,000,000 | ||||||||||
Purchase discounts | 5,500,000 | ||||||||||
Debt issuance costs, net | 2,600,000 | ||||||||||
Proceeds from issuance of long-term debt, net of issuance costs | $ 391,900,000 | ||||||||||
Debt instrument, interest rate (in percent) | 8.50% | ||||||||||
Effective interest rate percentage (in percent) | 8.90% | ||||||||||
Long-term debt | $ 400,000,000 | ||||||||||
2030 Senior Notes | Senior Notes | Period One | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt redemption price (in percent) | 100% | ||||||||||
2030 Senior Notes | Senior Notes | Period Two | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt redemption price (in percent) | 108.50% | ||||||||||
Percentage of original principal aggregate (in percent) | 40% | ||||||||||
Percentage of principal remains outstanding | 50% | ||||||||||
2030 Senior Notes | Senior Notes | Period Three | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt redemption price (in percent) | 101% | ||||||||||
Credit Agreement | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Modified term threshold | 91 days | ||||||||||
Percentage of EBITDA | 50% | ||||||||||
Credit Agreement | Line of Credit | Fed Funds Effective Rate Overnight Index Swap Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate (in percent) | 0.50% | ||||||||||
Credit Agreement | Line of Credit | Fed Funds Effective Rate Overnight Index Swap Rate | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate (in percent) | 1% | ||||||||||
Credit Agreement | Line of Credit | Fed Funds Effective Rate Overnight Index Swap Rate | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate (in percent) | 2% | ||||||||||
Credit Agreement | Line of Credit | SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, interest rate (in percent) | 1% | ||||||||||
Credit Agreement | Line of Credit | SOFR | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate (in percent) | 2% | ||||||||||
Credit Agreement | Line of Credit | SOFR | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate (in percent) | 3% | ||||||||||
Credit Agreement | Revolving Credit Facility | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 225,000,000 | $ 225,000,000 | $ 200,000,000 | ||||||||
Revolving credit commitments | $ 25,000,000 | ||||||||||
Long-term line of credit | $ 0 | ||||||||||
Credit Agreement | Letter of Credit | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | 25,000,000 | ||||||||||
Credit Agreement | Secured Debt | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Effective interest rate percentage (in percent) | 8.30% | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 400,000,000 | $ 400,000,000 | |||||||||
Repayment of debt | $ 400,000,000 | ||||||||||
Long-term line of credit | 395,000,000 | ||||||||||
Debt issuance costs incurred | 5,600,000 | ||||||||||
Debt issuance costs capitalized | 4,900,000 | ||||||||||
Long-term debt | 395,000,000 | ||||||||||
Convertible Senior Notes Due 2025 And 2026 | Convertible Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayment of debt | $ 153,700,000 | ||||||||||
Gain (loss) on early debt extinguishment | $ 11,800,000 | ||||||||||
2025 Convertible Notes | Convertible Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total principal amount | $ 1,000,000,000 | ||||||||||
Proceeds from issuance of long-term debt, net of issuance costs | $ 986,500,000 | ||||||||||
Debt instrument, repurchase amount | $ 460,700,000 | 586,000,000 | $ 125,300,000 | ||||||||
Gain (loss) on early debt extinguishment | $ 31,100,000 | 37,500,000 | |||||||||
Long-term debt | 413,957,000 | 412,200,000 | |||||||||
2025 Convertible Notes | Convertible Debt | Proceeds From Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayment of debt | 400,000,000 | ||||||||||
2025 Convertible Notes | Convertible Debt | Other Available Cash On Hand | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayment of debt | 27,300,000 | ||||||||||
2026 Convertible Notes | Convertible Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total principal amount | $ 650,000,000 | ||||||||||
Proceeds from issuance of long-term debt, net of issuance costs | $ 640,200,000 | ||||||||||
Debt instrument, repurchase amount | 40,900,000 | 40,900,000 | |||||||||
Gain (loss) on early debt extinguishment | 5,400,000 | ||||||||||
Long-term debt | $ 609,065,000 | $ 604,700,000 |
Long-Term Debt - Summary of Con
Long-Term Debt - Summary of Conversion of the Notes (Details) - Class A Common Stock | 1 Months Ended | |||
Sep. 30, 2020 $ / shares | Mar. 31, 2020 $ / shares | Sep. 30, 2023 $ / shares | Nov. 08, 2021 $ / shares | |
Debt Instrument [Line Items] | ||||
Stock par value (in dollars per share) | $ 0.0001 | |||
2025 Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Stock par value (in dollars per share) | $ 0.0001 | |||
Equivalent initial approximate conversion price per share (in dollars per share) | $ 360.43 | |||
Debt conversion, converted instrument, shares issued | 0.0027745 | |||
2026 Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Stock par value (in dollars per share) | $ 0.0001 | |||
Equivalent initial approximate conversion price per share (in dollars per share) | $ 424.03 | |||
Debt conversion, converted instrument, shares issued | 0.0023583 |
Long-Term Debt - Summary of Cap
Long-Term Debt - Summary of Capped Calls (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | |
Sep. 30, 2020 | Mar. 31, 2020 | |
2025 Convertible Notes | Class A Common Stock | ||
Debt Instrument [Line Items] | ||
Initial cap price per share, subject to certain adjustment (in dollars per share) | $ 360.43 | |
2025 Convertible Notes | Capped call | ||
Debt Instrument [Line Items] | ||
Initial approximate strike price per share, subject to certain adjustments (in dollars per share) | 360.43 | |
Initial cap price per share, subject to certain adjustment (in dollars per share) | $ 480.56 | |
Net cost incurred (in millions) | $ 60.9 | |
2025 Convertible Notes | Capped call | Class A Common Stock | ||
Debt Instrument [Line Items] | ||
Class A common stock covered, subject to anti-dilution adjustments (in millions) (in shares) | 2.8 | |
2026 Convertible Notes | Class A Common Stock | ||
Debt Instrument [Line Items] | ||
Initial cap price per share, subject to certain adjustment (in dollars per share) | $ 424.03 | |
2026 Convertible Notes | Capped call | ||
Debt Instrument [Line Items] | ||
Initial approximate strike price per share, subject to certain adjustments (in dollars per share) | 424.03 | |
Initial cap price per share, subject to certain adjustment (in dollars per share) | $ 556.10 | |
Net cost incurred (in millions) | $ 41.8 | |
2026 Convertible Notes | Capped call | Class A Common Stock | ||
Debt Instrument [Line Items] | ||
Class A common stock covered, subject to anti-dilution adjustments (in millions) (in shares) | 1.5 |
Long-Term Debt - Summary of Int
Long-Term Debt - Summary of Interest Expense on Long-Term Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Disclosure [Abstract] | ||||
Contractual interest expense | $ 10,869 | $ 0 | $ 14,155 | $ 0 |
Amortization of debt discount and issuance costs | 1,067 | 1,118 | 3,465 | 3,350 |
Total interest expense related to long-term debt | $ 11,936 | $ 1,118 | $ 17,620 | $ 3,350 |
Derivative Instruments (Details
Derivative Instruments (Details) - Interest Rate Swap - USD ($) | 1 Months Ended | |
May 31, 2023 | Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative, term of contract | 5 years | |
Derivative, fixed interest rate (in percent) | 3.79% | |
Derivative, notional amount | $ 395,000,000 | |
Reclassified into earnings over next 12 months | $ 6,000,000 | |
Minimum | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative, basis spread on variable interest rate (in percent) | 2% | |
Maximum | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative, basis spread on variable interest rate (in percent) | 3% |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jul. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 66,482 | $ 54,335 | |
Developed technology | |||
Business Acquisition [Line Items] | |||
Weighted-average useful life (in years) | 3 years | ||
Hopin, Inc. | |||
Business Acquisition [Line Items] | |||
Business combination, consideration transferred | $ 22,200 | ||
Cash | 14,700 | ||
Contingent consideration | 7,500 | ||
Asset acquisition contingent consideration | 35,000 | ||
Net acquired liabilities | 3,300 | ||
Goodwill | 12,800 | ||
Hopin, Inc. | Developed technology | |||
Business Acquisition [Line Items] | |||
Estimated fair values acquired technology | $ 12,700 | ||
Weighted-average useful life (in years) | 3 years |
Leases - Components of Leases a
Leases - Components of Leases and Lease Costs (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Operating leases | ||
Operating lease right-of-use assets | $ 32,477 | $ 35,433 |
Accrued liabilities | 15,451 | 17,513 |
Operating lease liabilities | 18,577 | 20,182 |
Total operating lease liabilities | $ 34,028 | $ 37,695 |
Operating lease, liability, current, statement of financial position | Accrued liabilities | Accrued liabilities |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating cash flows resulting from operating leases: | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 17,522 | $ 17,541 |
New ROU assets obtained in exchange of lease liabilities: | ||
Operating leases | $ 12,467 | $ 5,653 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Aug. 26, 2019 USD ($) defendent | Jun. 14, 2019 defendent | Apr. 25, 2017 action | Sep. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Jun. 16, 2020 USD ($) |
Loss Contingencies [Line Items] | ||||||
Number of actions filed against the company | action | 2 | |||||
Damages sought per violation | $ 5,000 | |||||
Cross complaint, number of defendants | defendent | 2 | |||||
Purchase obligation | $ 19,800,000 | $ 124,000,000 | ||||
Purchase obligation outstanding | $ 113,700,000 | |||||
RingCentral Suit Against Bright Pattern, Inc. and Officers | ||||||
Loss Contingencies [Line Items] | ||||||
Number of defendants | defendent | 2 | |||||
Bright Pattern, Inc. Cross Complaint Against RingCentral | ||||||
Loss Contingencies [Line Items] | ||||||
Break up fee | $ 5,000,000 |
Stockholders_ Deficit and Con_3
Stockholders’ Deficit and Convertible Preferred Stock - Narrative (Details) - USD ($) | Feb. 13, 2023 | Nov. 08, 2021 | Sep. 30, 2023 | May 16, 2023 | Dec. 31, 2022 |
Equity, Class of Treasury Stock [Line Items] | |||||
Repurchase authorization | $ 175,000,000 | ||||
Repurchased and retired shares amount | $ 300,000,000 | ||||
Number of shares authorized to be repurchased (in shares) | 50,600,000 | ||||
Temporary equity, convertible senior notes | $ 199,449,000 | $ 199,449,000 | |||
Class A Common Stock | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock par value (in dollars per share) | $ 0.0001 | ||||
Series A Convertible Preferred Stock | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Shares authorized (in shares) | 200,000 | ||||
Pare value (in dollars per share) | $ 0.0001 | ||||
Aggregate purchase price | $ 200,000,000 | ||||
Conversion price (in dollars per share) | $ 269.22 | ||||
Liquidation preference per share (in dollars per share) | $ 1,000 | ||||
Shares issued (in shares) | 200,000 | 200,000 | |||
Shares outstanding (in shares) | 200,000 | 200,000 | |||
Temporary equity, convertible senior notes | $ 199,400,000 | $ 199,400,000 | |||
Board of Directors | Class A Common Stock | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Additional authorized amount | $ 125,000,000 |
Stockholders_ Deficit and Con_4
Stockholders’ Deficit and Convertible Preferred Stock - Schedule of Stock Repurchased Activity (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Total repurchases of common stock | $ 75,292 | $ 100,506 | $ 74,776 | $ 20,000 | $ 25,004 | |
Class A Common Stock | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Repurchases of common stock (in shares) | 2,489 | 7,969 | ||||
Repurchases under share repurchase programs | $ 74,948 | $ 249,409 | ||||
Amounts for excise tax withholdings and broker’s commissions | 344 | 1,164 | ||||
Total repurchases of common stock | $ 75,292 | $ 250,573 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Share-Based Compensation Expense Recognized to Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | $ 111,682 | $ 95,658 | $ 314,533 | $ 293,777 |
Cost of revenues | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 9,530 | 8,464 | 27,134 | 26,161 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 24,265 | 21,830 | 70,358 | 68,310 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 37,694 | 37,548 | 114,455 | 116,389 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | $ 40,193 | $ 27,816 | $ 102,586 | $ 82,917 |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of Share-Based Compensation Expense by Award Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 111,682 | $ 95,658 | $ 314,533 | $ 293,777 |
Employee stock purchase plan rights (“ESPP”) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 1,063 | 1,058 | 5,744 | 5,486 |
Performance stock units (“PSUs”) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 10,875 | 1,313 | 15,211 | 1,825 |
Restricted stock units (“RSUs”) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 99,744 | $ 93,287 | $ 293,578 | $ 286,466 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 0 | 0 | 0 | 0 |
Intrinsic value of options exercised | $ 0 | $ 0 | $ 0 | $ 13,300,000 |
Unamortized share-based compensation expense | $ 0 | $ 0 | ||
Employee stock purchase plan rights (“ESPP”) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Available for future grants (in shares) | 6,547,384 | 6,547,384 | ||
Unrecognized share-based compensation expense | $ 800,000 | $ 800,000 | ||
Unrecognized share-based compensation expense, remaining weighted-average vesting periods | 1 month 6 days | |||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized share-based compensation expense, remaining weighted-average vesting periods | 2 years 9 months 18 days | |||
Vesting period contractual term | 4 years | |||
Unrecognized share-based compensation expense | 411,200,000 | $ 411,200,000 | ||
Performance Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized share-based compensation expense, remaining weighted-average vesting periods | 2 years 4 months 24 days | |||
Unrecognized share-based compensation expense | 31,200,000 | $ 31,200,000 | ||
Employee Equity Compensation Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized share-based compensation expense, remaining weighted-average vesting periods | 1 month 6 days | |||
Unrecognized share-based compensation expense | $ 5,000,000 | $ 5,000,000 | ||
2013 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Available for future grants (in shares) | 13,005,630 | 13,005,630 | ||
2013 Equity Incentive Plan | Employee Equity Compensation Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized share-based compensation expense, remaining weighted-average vesting periods | 4 months 24 days | |||
Key Employee Equity Bonus Plan | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 577,224 | 1,731,223 |
Share-Based Compensation - Su_3
Share-Based Compensation - Summary of Stock Option Activity Plans (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Number of Options Outstanding | ||
Beginning balance (in shares) | 22 | |
Exercised (in shares) | (19) | |
Canceled/forfeited (in shares) | 0 | |
Ending balance (in shares) | 3 | 22 |
Vested and expected to vest (in shares) | 3 | |
Exercisable (in shares) | 3 | |
Weighted- Average Exercise Price Per Share | ||
Beginning balance (in dollars per share) | $ 12.53 | |
Exercised (in dollars per share) | 11.40 | |
Canceled/forfeited (in dollars per share) | 0 | |
Ending balance (in dollars per share) | 19.43 | $ 12.53 |
Vested and expected to vest (in dollars per share) | 19.43 | |
Exercisable (in dollars per share) | $ 19.43 | |
Weighted- Average Contractual Term (in Years) | ||
Outstanding | 2 months 12 days | 6 months |
Vested and expected to vest | 2 months 12 days | |
Exercisable | 2 months 12 days | |
Aggregate Intrinsic Value (in thousands) | ||
Outstanding | $ 32 | $ 509 |
Vested and expected to vest | 32 | |
Exercisable | $ 32 |
Share-Based Compensation - Su_4
Share-Based Compensation - Summary of RSUs Activity (Details) - Restricted stock units $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) | |
Number of RSUs/PSUs Outstanding (in thousands) | ||
Beginning balance (in shares) | shares | 5,100 | |
Granted (in shares) | shares | 12,702 | |
Released (in shares) | shares | (4,384) | |
Canceled/Forfeited (in shares) | shares | (1,444) | |
Ending balance (in shares) | shares | 11,974 | |
Weighted- Average Grant Date Fair Value Per Share | ||
Beginning balance (in dollars per share) | $ / shares | $ 119.55 | |
Granted (in dollars per share) | $ / shares | 32.40 | |
Released (in dollars per share) | $ / shares | 62.99 | |
Canceled/Forfeited (in dollars per share) | $ / shares | 76.28 | |
Ending balance (in dollars per share) | $ / shares | $ 53.03 | |
Aggregate Intrinsic Value (in thousands) | ||
Outstanding, balance | $ | $ 356,030 | $ 180,577 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
(Benefit from) provision for income taxes | $ (3,780) | $ 873 | $ 6,258 | $ 2,900 |
Current income tax expense | $ 900 |
Basic and Diluted Net Loss Pe_3
Basic and Diluted Net Loss Per Share - Computation of Company's Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator | ||||||||
Net loss | $ (42,116) | $ (21,482) | $ (54,399) | $ (284,616) | $ (159,515) | $ (150,972) | $ (117,997) | $ (595,103) |
Denominator | ||||||||
Weighted-average common shares outstanding for basic and diluted net loss per share (in shares) | 94,593 | 95,575 | 95,213 | 95,097 | ||||
Basic net loss per share (in dollars per share) | $ (0.45) | $ (2.98) | $ (1.24) | $ (6.26) | ||||
Diluted net loss per share (in dollars per share) | $ (0.45) | $ (2.98) | $ (1.24) | $ (6.26) |
Basic and Diluted Net Loss Pe_4
Basic and Diluted Net Loss Per Share - Potential Shares of Common Stock Excluded from Diluted Weighted-Average Common Shares Outstanding (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share (in shares) | 13,341 | 4,807 | 10,063 | 4,446 |
Shares of common stock issuable under equity incentive plans outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share (in shares) | 12,598 | 4,064 | 9,320 | 3,703 |
Shares of common stock related to convertible preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share (in shares) | 743 | 743 | 743 | 743 |
Restructuring Activities - Sche
Restructuring Activities - Schedule of Restructuring Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring costs | $ 4,444 | $ 5,315 | $ 12,925 | $ 7,830 |
Cost of revenues | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring costs | 6 | 96 | 695 | 252 |
Research and development | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring costs | 1,794 | 2,383 | 4,281 | 2,722 |
Sales and marketing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring costs | 1,124 | 2,096 | 5,093 | 3,033 |
General and administrative | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring costs | $ 1,520 | $ 740 | $ 2,856 | $ 1,823 |
Restructuring Activities - Sc_2
Restructuring Activities - Schedule of Restructuring Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | $ 5,485 | |||
Restructuring costs | $ 4,444 | $ 5,315 | 12,925 | $ 7,830 |
Cash payments | (16,783) | |||
Ending balance | $ 1,627 | $ 1,627 |
Restructuring Activities - Narr
Restructuring Activities - Narrative (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Minimum | |
Restructuring Cost and Reserve [Line Items] | |
Expected restructuring costs | $ 10 |
Maximum | |
Restructuring Cost and Reserve [Line Items] | |
Expected restructuring costs | $ 15 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Nov. 02, 2023 | Nov. 01, 2023 | Sep. 30, 2023 | Feb. 14, 2023 | Feb. 13, 2023 |
Subsequent Event [Line Items] | |||||
Remaining repurchase authorization amount | $ 50,600,000 | ||||
Repurchase authorization | $ 175,000,000 | ||||
Secured Debt | Credit Agreement | Line of Credit | |||||
Subsequent Event [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 400,000,000 | $ 400,000,000 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Additional authorized amount | $ 100,000,000 | ||||
Repurchase authorization | $ 150,600,000 | ||||
Subsequent Event | Secured Debt | Credit Agreement | Line of Credit | |||||
Subsequent Event [Line Items] | |||||
Revolving credit commitments | $ 75,000,000 | ||||
Line of credit facility, maximum borrowing capacity | $ 475,000,000 |
Uncategorized Items - rng-20230
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |