Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 03, 2020 | |
Document and Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38098 | |
Entity Registrant Name | APPIAN CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 54-1956084 | |
Entity Address, Address Line One | 7950 Jones Branch Drive | |
Entity Address, City or Town | McLean | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22102 | |
City Area Code | (703) | |
Local Phone Number | 442-8844 | |
Title of 12(b) Security | Class A Common Stock | |
Trading Symbol | APPN | |
Security Exchange Name | NASDAQ | |
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 | |
Entity Central Index Key | 0001441683 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 37,632,914 | |
Class B Common Stock | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 32,217,936 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 256,146 | $ 159,755 |
Accounts receivable, net of allowance of $800 and $600 as of June 30, 2020 and December 31, 2019, respectively | 71,853 | 70,408 |
Deferred commissions, current | 15,122 | 14,543 |
Prepaid expenses and other current assets | 26,289 | 32,955 |
Total current assets | 369,410 | 277,661 |
Property and equipment, net | 37,437 | 39,554 |
Goodwill | 4,443 | 0 |
Intangible assets, net of accumulated amortization of $196 as of June 30, 2020 | 1,790 | 0 |
Operating right-of-use assets | 23,156 | 24,205 |
Deferred commissions, net of current portion | 28,694 | 28,979 |
Deferred tax assets | 583 | 494 |
Other assets | 5,847 | 592 |
Total assets | 471,360 | 371,485 |
Current liabilities | ||
Accounts payable | 4,128 | 5,222 |
Accrued expenses | 7,307 | 7,488 |
Accrued compensation and related benefits | 13,183 | 10,691 |
Deferred revenue, current | 87,550 | 82,201 |
Operating lease liabilities, current | 5,427 | 3,836 |
Finance lease liabilities, current | 1,549 | 1,447 |
Other current liabilities | 592 | 1,395 |
Total current liabilities | 119,736 | 112,280 |
Operating lease liabilities, net of current portion | 44,142 | 44,416 |
Finance lease liabilities, net of current portion | 1,556 | 2,375 |
Deferred revenue, net of current portion | 4,595 | 7,139 |
Deferred tax liabilities | 437 | 38 |
Other non-current liabilities | 2,092 | 0 |
Total liabilities | 172,558 | 166,248 |
Stockholders’ equity | ||
Additional paid-in capital | 458,174 | 340,929 |
Accumulated other comprehensive loss | (482) | (285) |
Accumulated deficit | (158,897) | (135,413) |
Total stockholders’ equity | 298,802 | 205,237 |
Total liabilities and stockholders’ equity | 471,360 | 371,485 |
Class A Common Stock | ||
Stockholders’ equity | ||
Common stock | 4 | 3 |
Class B Common Stock | ||
Stockholders’ equity | ||
Common stock | $ 3 | $ 3 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Allowance for doubtful accounts | $ 800 | $ 600 |
Finite-lived intangible assets, accumulated amortization | $ 196 | |
Class A Common Stock | ||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares outstanding (in shares) | 37,558,379 | 34,525,386 |
Common stock, shares issued (in shares) | 37,558,379 | 34,525,386 |
Class B Common Stock | ||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares outstanding (in shares) | 32,281,936 | 32,942,636 |
Common stock, shares issued (in shares) | 32,281,936 | 32,942,636 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue | ||||
Total revenue | $ 66,775 | $ 65,275 | $ 145,639 | $ 125,579 |
Cost of revenue | ||||
Total cost of revenue | 21,156 | 23,051 | 45,275 | 47,117 |
Gross profit | 45,619 | 42,224 | 100,364 | 78,462 |
Operating expenses | ||||
Sales and marketing | 29,086 | 29,992 | 63,258 | 58,583 |
Research and development | 17,178 | 12,765 | 33,216 | 26,721 |
General and administrative | 11,450 | 9,261 | 24,591 | 18,277 |
Total operating expenses | 57,714 | 52,018 | 121,065 | 103,581 |
Operating loss | (12,095) | (9,794) | (20,701) | (25,119) |
Other (income) expense | ||||
Other (income) expense, net | (682) | (79) | 2,432 | (381) |
Interest expense | 128 | 69 | 271 | 140 |
Total other (income) expense | (554) | (10) | 2,703 | (241) |
Loss before income taxes | (11,541) | (9,784) | (23,404) | (24,878) |
Income tax expense | 274 | 267 | 80 | 389 |
Net loss | $ (11,815) | $ (10,051) | $ (23,484) | $ (25,267) |
Net loss per share: | ||||
Basic and diluted (in dollar per share) | $ (0.17) | $ (0.16) | $ (0.35) | $ (0.39) |
Weighted average common shares outstanding: | ||||
Basic and diluted (in shares) | 68,369,823 | 64,753,044 | 67,949,270 | 64,531,089 |
Subscriptions | ||||
Revenue | ||||
Total revenue | $ 41,418 | $ 36,860 | $ 91,854 | $ 71,417 |
Cost of revenue | ||||
Total cost of revenue | 4,701 | 4,036 | 10,084 | 7,621 |
Professional services | ||||
Revenue | ||||
Total revenue | 25,357 | 28,415 | 53,785 | 54,162 |
Cost of revenue | ||||
Total cost of revenue | $ 16,455 | $ 19,015 | $ 35,191 | $ 39,496 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (11,815) | $ (10,051) | $ (23,484) | $ (25,267) |
Comprehensive loss, net of income taxes: | ||||
Foreign currency translation adjustment | (214) | (490) | (197) | (194) |
Total other comprehensive loss, net of income taxes | $ (12,029) | $ (10,541) | $ (23,681) | $ (25,461) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Revision of Prior Period, Accounting Standards Update, Adjustment | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Accumulated DeficitRevision of Prior Period, Accounting Standards Update, Adjustment |
Beginning balance (in shares) at Dec. 31, 2018 | 63,916,437 | ||||||
Beginning balance at Dec. 31, 2018 | $ 73,192 | $ 60,941 | $ 6 | $ 218,284 | $ 542 | $ (145,640) | $ 60,941 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (15,216) | (15,216) | |||||
Issuance of common stock to directors (in shares) | 3,461 | ||||||
Vesting of restricted stock units (in shares) | 278,680 | ||||||
Exercise of stock options (in shares) | 482,444 | ||||||
Exercise of stock options | 1,073 | 1,073 | |||||
Stock-based compensation expense | 7,225 | 7,225 | |||||
Other comprehensive loss (loss) | 296 | 296 | |||||
Ending balance (in shares) at Mar. 31, 2019 | 64,681,022 | ||||||
Ending balance at Mar. 31, 2019 | 127,511 | $ 6 | 226,582 | 838 | (99,915) | ||
Beginning balance (in shares) at Dec. 31, 2018 | 63,916,437 | ||||||
Beginning balance at Dec. 31, 2018 | 73,192 | 60,941 | $ 6 | 218,284 | 542 | (145,640) | 60,941 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (25,267) | ||||||
Ending balance (in shares) at Jun. 30, 2019 | 64,837,568 | ||||||
Ending balance at Jun. 30, 2019 | 120,573 | $ 6 | 230,185 | 348 | (109,966) | ||
Beginning balance (in shares) at Dec. 31, 2018 | 63,916,437 | ||||||
Beginning balance at Dec. 31, 2018 | 73,192 | $ 60,941 | $ 6 | 218,284 | 542 | (145,640) | $ 60,941 |
Ending balance (in shares) at Dec. 31, 2019 | 67,468,022 | ||||||
Ending balance at Dec. 31, 2019 | $ 205,237 | $ 6 | 340,929 | (285) | (135,413) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201409Member | ||||||
Beginning balance (in shares) at Mar. 31, 2019 | 64,681,022 | ||||||
Beginning balance at Mar. 31, 2019 | $ 127,511 | $ 6 | 226,582 | 838 | (99,915) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (10,051) | (10,051) | |||||
Issuance of common stock to directors (in shares) | 2,684 | ||||||
Vesting of restricted stock units (in shares) | 6,010 | ||||||
Exercise of stock options (in shares) | 147,852 | ||||||
Exercise of stock options | 914 | 914 | |||||
Stock-based compensation expense | 2,689 | 2,689 | |||||
Other comprehensive loss (loss) | (490) | (490) | |||||
Ending balance (in shares) at Jun. 30, 2019 | 64,837,568 | ||||||
Ending balance at Jun. 30, 2019 | 120,573 | $ 6 | 230,185 | 348 | (109,966) | ||
Beginning balance (in shares) at Dec. 31, 2019 | 67,468,022 | ||||||
Beginning balance at Dec. 31, 2019 | 205,237 | $ 6 | 340,929 | (285) | (135,413) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (11,669) | (11,669) | |||||
Issuance of common stock to directors (in shares) | 1,946 | ||||||
Vesting of restricted stock units (in shares) | 46,031 | ||||||
Exercise of stock options (in shares) | 129,082 | ||||||
Exercise of stock options | 670 | 670 | |||||
Stock-based compensation expense | 3,476 | 3,476 | |||||
Other comprehensive loss (loss) | 17 | 17 | |||||
Ending balance (in shares) at Mar. 31, 2020 | 67,645,081 | ||||||
Ending balance at Mar. 31, 2020 | 197,731 | $ 6 | 345,075 | (268) | (147,082) | ||
Beginning balance (in shares) at Dec. 31, 2019 | 67,468,022 | ||||||
Beginning balance at Dec. 31, 2019 | 205,237 | $ 6 | 340,929 | (285) | (135,413) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | $ (23,484) | ||||||
Exercise of stock options (in shares) | 376,967 | ||||||
Ending balance (in shares) at Jun. 30, 2020 | 69,840,315 | ||||||
Ending balance at Jun. 30, 2020 | $ 298,802 | $ 7 | 458,174 | (482) | (158,897) | ||
Beginning balance (in shares) at Mar. 31, 2020 | 67,645,081 | ||||||
Beginning balance at Mar. 31, 2020 | 197,731 | $ 6 | 345,075 | (268) | (147,082) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (11,815) | (11,815) | |||||
Issuance of common stock from public offering, net of issuance costs (in shares) | 1,931,206 | ||||||
Issuance of common stock from public offering, net of issuance costs | 107,915 | $ 1 | 107,914 | ||||
Issuance of common stock to directors (in shares) | 2,296 | ||||||
Vesting of restricted stock units (in shares) | 13,567 | ||||||
Exercise of stock options (in shares) | 248,165 | ||||||
Exercise of stock options | 1,571 | 1,571 | |||||
Stock-based compensation expense | 3,614 | 3,614 | |||||
Other comprehensive loss (loss) | (214) | (214) | |||||
Ending balance (in shares) at Jun. 30, 2020 | 69,840,315 | ||||||
Ending balance at Jun. 30, 2020 | $ 298,802 | $ 7 | $ 458,174 | $ (482) | $ (158,897) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (23,484) | $ (25,267) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 2,980 | 1,933 |
Bad debt expense | 200 | 97 |
Loss on disposal of property and equipment | 22 | 145 |
Deferred income taxes | (168) | (47) |
Stock-based compensation | 7,090 | 9,914 |
Changes in assets and liabilities: | ||
Accounts receivable | (2,084) | 9,337 |
Prepaid expenses and other assets | 1,922 | 13,453 |
Deferred commissions | (295) | (4,790) |
Accounts payable and accrued expenses | (1,674) | 5,458 |
Accrued compensation and related benefits | 2,575 | (3,181) |
Other liabilities | 1,271 | (269) |
Deferred revenue | 2,310 | 640 |
Operating lease liabilities | 2,378 | 0 |
Deferred rent, non-current | 0 | 4,584 |
Net cash (used in) provided by operating activities | (6,957) | 12,007 |
Cash flows from investing activities: | ||
Payments for acquisitions, net of cash acquired | (6,138) | 0 |
Purchases of property and equipment | (686) | (27,689) |
Net cash used in investing activities | (6,824) | (27,689) |
Cash flows from financing activities: | ||
Principal payments on finance leases | (716) | 0 |
Proceeds from public offering, net of underwriting discounts | 108,260 | 0 |
Payments of costs related to public offerings | (18) | 0 |
Proceeds from exercise of common stock options | 2,242 | 1,987 |
Net cash provided by financing activities | 109,768 | 1,987 |
Effect of foreign exchange rate changes on cash and cash equivalents | 404 | (134) |
Net increase (decrease) in cash and cash equivalents | 96,391 | (13,829) |
Cash and cash equivalents, beginning of period | 159,755 | 94,930 |
Cash and cash equivalents, end of period | 256,146 | 81,101 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 88 | 170 |
Cash paid for income taxes | 139 | 116 |
Supplemental disclosure of non-cash financing information: | ||
Capital lease obligations to acquire new office furniture and fixtures | $ 0 | $ 3,673 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business Appian Corporation (together with its subsidiaries, “Appian,” the “Company,” “we,” or “our”) provides a low-code automation platform that accelerates the creation of high-impact business applications, enabling our customers to automate the most important aspects of their business. Global organizations use our applications to improve customer experience, achieve operational excellence, and simplify global risk management and compliance. We were incorporated in the state of Delaware in August 1999. We are headquartered in McLean, Virginia and operate in Canada, Switzerland, the United Kingdom, France, Germany, the Netherlands, Italy, Australia, Spain, Singapore, and Sweden. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity, and cash flows. The results of operations for the current period are not necessarily indicative of the results for the full year or the results for any future periods. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (the “SEC”) on February 20, 2020. We adopted ASC 606, the new revenue recognition guidance, on January 1, 2019 using the modified retrospective method. Under this method of adoption, we recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit and applied the new standard only to contracts that were not completed prior January 1, 2019. Because we were an emerging growth company until December 31, 2019, the Jumpstart Our Business Startups Act allowed us to delay adoption of certain accounting standards such as ASC 606 and ASC 842 until such time they were made applicable to private companies. We elected to use this extended transition period, and accordingly, did not report revenues under ASC 606 or leases under ASC 842 in our Quarterly Reports on Form 10-Q during 2019. Refer to our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 20, 2020, for a complete reconciliation of our revenues under the old and new guidance. Prior period amounts in this Form 10-Q have been recast as if we had reported under ASC 606 for the applicable periods. Use of Estimates The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Although we believe the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. Significant estimates embedded in the condensed consolidated financial statements include revenue recognition, income taxes and the related valuation allowance, the valuation of goodwill and intangible assets, leases, costs to obtain a contract with a customer, and stock-based compensation. The outbreak of the novel coronavirus disease ("COVID-19") has resulted in the declaration of a global pandemic and introduced a level of disruption and uncertainty into the financial markets and global economy. While we continue to monitor the developments surrounding the pandemic, as of the date of issuance of these financial statements, we are not aware of any specific events or circumstances that would require us to update our estimates, assumptions, and judgments or revise the carrying value of our assets or liabilities. However, the ultimate impact of COVID-19 on our business is not estimable at this time and will be largely dependent upon a number of factors outside of our control including the extent and duration of the outbreak as well as any mitigating actions which may be undertaken by global governments and the general public. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Appian and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Public Offering In June 2020, we completed an underwritten public offering of 2,500,000 shares of our Class A common stock, of which 1,931,206 shares of Class A common stock were sold by us and 568,794 shares of Class A common stock were sold by existing stockholders. The underwriter purchased the shares from us and the selling stockholders at a price of $56.50 per share. Our net proceeds from the offering were $107.9 million, after deducting underwriting discounts and commissions and offering expenses. We did not receive any of the proceeds from the sale of shares by the selling stockholders. Revenue Recognition Refer to Note 3 for a detailed discussion on specific revenue recognition principles related to our major revenue streams. Cost of Revenue Subscriptions Cost of subscriptions revenue consists primarily of fees paid to our third-party managed hosting providers and other third-party service providers, personnel costs such as payroll and benefits for our technology operations and customer support teams, and allocated facility costs and overhead. Professional Services Cost of professional services revenue includes all direct and indirect costs to deliver our professional services and training, including employee compensation for our global professional services and training personnel, travel costs, third-party contractor costs, and allocated facility costs and overhead. Concentration of Credit and Customer Risk Our financial instruments exposed to concentration of credit and customer risk consist primarily of cash and cash equivalents and trade accounts receivable. Deposits held with banks may exceed the amount of insurance provided on such deposits. We believe the financial institutions holding our cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances. With regard to our customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. We believe no additional credit risk beyond amounts provided for collection loss are inherent in accounts receivable. When accounted for under ASC 606, revenue generated from government agencies represented 19.0% and 16.8% of our revenue for the three and six months ended June 30, 2020, respectively, of which the top three federal government agencies generated 7.6% and 6.7% of our revenue for the three and six months ended June 30, 2020, respectively. Additionally, 36.8% and 35.0% of our revenue during the three and six months ended June 30, 2020, respectively, was generated from foreign customers. Revenue generated from government agencies represented 16.8% and 17.3% of our revenue for three and six months ended June 30, 2019, respectively, of which the top three federal government agencies generated 6.4% and 7.3% of our revenue for the three and six months ended June 30, 2019, respectively. Additionally, 32.9% and 32.4% of our revenue during the three and six months ended June 30, 2019, respectively, was generated from foreign customers. Cash and Cash Equivalents We consider all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase, as well as overnight repurchase investments, to be cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts and incorporates an estimation of expected lifetime credit losses on our receivables. We regularly review the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, and current economic trends. If the financial condition of our customers were to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be required and would increase bad debt expense. To date, our allowance and related bad debt write-offs have been nominal. There was a $0.2 million increase in the allowance for doubtful accounts from December 31, 2019 to June 30, 2020. Assets Recognized from the Costs to Obtain a Contract with a Customer We capitalize the incremental costs of obtaining a contract with a customer, including sales commissions paid to our direct sales force that are incremental costs to obtaining customer contracts. These costs are recorded as deferred commissions in the condensed consolidated balance sheets. Costs to obtain a contract for a new customer or upsell are amortized over an estimated economic life of five years as sales commissions on initial sales are not commensurate with sales commissions on contract renewals. We determine the estimated economic life based on both qualitative and quantitative factors such as expected renewals, product life cycles, contractual terms, and customer attrition. We periodically review the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the estimated economic life. Commissions paid relating to contract renewals are deferred and amortized over the related renewal period. We also capitalize the incremental fringe benefits associated with commission expenses paid to our direct sales force. Costs to obtain a contract for professional services arrangements are expensed as incurred as the contractual period of our professional services arrangements are one year or less. Amortization associated with commission expense is recorded to sales and marketing costs in our condensed consolidated statements of operations. Commission expense was $5.8 million and $11.1 million for the three and six months ended June 30, 2020, respectively. Commission expense was $3.6 million and $6.6 million for the three and six months ended June 30, 2019, respectively. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Significant additions or improvements extending the useful life of an asset are capitalized, while repairs and maintenance costs which do not significantly improve the related assets or extend their useful lives are charged to expense as incurred. The following table outlines useful lives of our major asset categories: Asset Category Useful Life (in years) Computer software 3 Computer hardware 3 Equipment 5 Office furniture and fixtures 10 Leasehold improvements (a) (a) - Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term. Impairment of Long-Lived Assets Long-lived assets and certain intangible assets are reviewed for impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable through undiscounted cash flows from the use of the assets. If such assets are considered to be impaired, the assets are written down to their estimated fair value. No indicators of impairment were identified for the three and six months ended June 30, 2020 and June 30, 2019. Fair Value of Financial Instruments The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value as of June 30, 2020 and December 31, 2019 because of the relatively short duration of these instruments. Our line of credit is recorded at carrying value, which approximates fair value. We use a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires us to use observable inputs when available and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2. Inputs other than quoted prices in active markets that are observable either directly or indirectly; and • Level 3. Unobservable inputs for which there is little or no market data, which require us to develop our own assumptions. Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs There were no instruments measured at fair value on a recurring basis using significant unobservable inputs as of June 30, 2020 and December 31, 2019. Stock-Based Compensation We account for stock-based compensation expense related to stock-based awards based on the estimated fair value of the award on the grant date. We calculate the fair value of stock options containing only a service condition using the Black-Scholes option pricing model. The fair value of restricted stock units is based on the closing market price of our common stock on the Nasdaq Global Market on the date of grant. For service-based awards, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. For performance-based awards, stock-based compensation expense is recognized using the accelerated attribution method based on the probability of satisfying the performance condition. For awards that contain market conditions, compensation expense is measured using a Monte Carlo simulation and recognized using the accelerated attribution method over the derived service period based on the expected market performance as of the grant date. For restricted stock units, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. We account for forfeitures as they occur rather than estimating expected forfeitures. Leases Refer to Note 4 for a detailed discussion on our policies specific to leasing arrangements. Recent Accounting Pronouncements Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) ("ASU 2016-13"), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Adopting the standard did not have a material impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"), which eliminates, modifies, and adds disclosure requirements for fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Adopting the standard did not have a material impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract , which aligns the requirements for capitalizing implementation costs in cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Adopting the standard did not have a material impact on our condensed consolidated financial statements. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 3. Revenue Revenue Recognition We generate subscriptions revenue primarily through the sale of software as a service ("SaaS") subscriptions bundled with maintenance and support and hosting services as well as term license subscriptions bundled with maintenance and support. We generate professional services revenue from fees for our consulting services, including application development and deployment assistance as well as training related to our platform. The following table summarizes revenue from contracts with customers for the three and six months ended June 30, 2020 and June 30, 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 SaaS subscriptions $ 29,580 $ 22,796 $ 57,970 $ 44,074 Term license subscriptions 7,379 10,103 25,172 19,660 Maintenance and support 4,459 3,961 8,712 7,683 Professional services 25,357 28,415 53,785 54,162 Total revenue $ 66,775 $ 65,275 $ 145,639 $ 125,579 Performance Obligations and Timing of Revenue Recognition We primarily sell products and services that fall into the categories discussed below. Each category contains one or more performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from the product or service on its own or together with readily available resources, including those purchased separately from us) and distinct within the context of the contract (i.e., separately identified from other promises in the contract) or (2) a series of distinct products or services that are substantially the same and have the same pattern of transfer to the customer. Our term license subscriptions are delivered at a point in time while our SaaS subscriptions, maintenance and support, and professional services are delivered over time. Subscriptions Revenue Subscriptions revenue is primarily related to (1) SaaS subscriptions bundled with maintenance and support and hosting services and (2) term license subscriptions bundled with maintenance and support. We generally charge subscription fees on a per-user basis and, to a lesser degree, non-user based single application licenses. We bill customers and collect payment for subscriptions to our platform in advance on an annual, quarterly, or monthly basis. In certain instances, our customers have paid their entire contract up front. SaaS Subscriptions We generate cloud-based subscription revenue primarily from the sales of subscriptions to access our cloud offering, together with related support services to our customers. We perform all required maintenance and support for our cloud offering, and we do not separately charge customers for hosting costs. Revenue is recognized on a ratable basis over the contract term beginning on the date the service is made available to the customer. Our cloud-based subscription contracts generally have a term of one Term License Subscriptions Our term license subscription revenue is derived from customers with on-premise installations of our platform pursuant to contracts that were historically one Maintenance and Support Maintenance and support subscriptions include both technical support and when-and-if-available software upgrades, which are treated as a single performance obligation as they are considered a series of distinct services that are substantially the same and have the same duration and measure of progress. Revenue from maintenance and support is recognized ratably over the contract period, which is the period over which the customer has continuous access to maintenance and support. Professional Services Our professional services revenue is comprised of fees for consulting services, including application development and deployment assistance as well as training services related to our platform. Our professional services are considered distinct performance obligations when sold stand alone or with other products. Consulting Services We sell consulting services to assist customers in planning and executing the deployment of our software. Customers are not required to use consulting services to fully benefit from the software. Consulting services are regularly sold on a standalone basis and either (1) under a fixed-fee arrangement or (2) on a time and materials basis. Consulting contracts are each considered separate performance obligations because they do not integrate with each other or with other products and services to deliver a combined output to the customer, do not modify or customize (or are not modified or customized by) each other or other products and services, and do not affect the customer's ability to use the other consulting offerings or other products and services. Revenue under consulting contracts is recognized over time as services are delivered. For time and materials-based consulting contracts, we have elected the practical expedient of recognizing revenue upon invoicing since the invoiced amount corresponds directly to the value of our service to-date. Training Services We sell various training services to our customers. Training services are sold in the form of prepaid training credits that are redeemed based on a fixed rate per course. Training revenue is recognized when the associated training services are delivered. Significant Judgments and Estimates Determining the Transaction Price The transaction price includes both fixed and variable consideration. Variable consideration is included in the transaction price to the extent it is probable a significant reversal will not occur. The amount of variable consideration excluded from the transaction price for the six months ended June 30, 2020 was insignificant. Our estimates of variable consideration are also subject to subsequent true-up adjustments and may result in changes to transaction prices; however, such true-up adjustments are not expected to be material. Allocating the Transaction Price Based on Standalone Selling Prices ("SSP") We allocate the transaction price to each performance obligation in a contract based on its relative SSP. The SSP is the observable price at which we sell the product or service separately. In the absence of observable pricing, we estimate SSP using the residual approach. We establish SSP as follows: 1. SaaS subscriptions - Given the highly variable selling price of our SaaS subscriptions, we establish the SSP of our SaaS subscriptions using a residual approach after first determining the SSP of consulting and training services. We have concluded the residual approach to estimating SSP of our SaaS subscriptions is an appropriate allocation of the transaction price. 2. Term license subscriptions - Given the highly variable selling price of our term license subscriptions, we have established SSP of term license subscriptions using a residual approach after first determining the SSP of maintenance and support. Maintenance and support is sold on a standalone basis in conjunction with renewals of our legacy perpetual software licenses and within a narrow range of the net license fee. Because an economic relationship exists between the license and maintenance and support, we have concluded the residual approach to estimating SSP of term license subscriptions is an appropriate allocation of the transaction price. 3. Maintenance and support - We establish SSP of maintenance and support as a percentage of the stated net subscription fee based on observable pricing of maintenance and support renewals from our legacy perpetual software licenses. 4. Consulting services and training services - SSP of consulting services and training services is established based on the observable pricing of standalone sales within each geographic region where the services are sold. Contract Balances Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to our contracts with customers. Contract assets primarily relate to unbilled amounts for contracts with customers for which the amount of revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional. As of June 30, 2020 and December 31, 2019, contract assets of $20.8 million and $22.8 million, respectively, are included in the prepaid expenses and other current assets and other assets line items in our condensed consolidated balance sheets. Contract liabilities consists of deferred revenue and include payments received in advance of the satisfaction of performance obligations. Deferred revenue is then recognized as the revenue recognition criteria are met. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as non-current. For the six months ended June 30, 2020, we recognized $57.9 million of revenue that was included in the deferred revenue balance as of December 31, 2019. Transaction Price Allocated to the Remaining Performance Obligations As of June 30, 2020, we had an aggregate transaction price of $175.9 million allocated to unsatisfied performance obligations. We expect to recognize $160.7 million of this balance as revenue over the next 24 months with the remaining amount recognized thereafter. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | 4. Leases At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts and circumstances present and the classification of the lease. Operating leases with a term greater than one year are recognized on the balance sheet as right-of-use ("ROU") assets, lease liabilities, and, if applicable, long-term lease liabilities. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. We have elected not to recognize on the balance sheet leases with a term of one year or less. For contracts with lease and non-lease components, we have elected not to allocate the contract consideration and to account for the lease and non-lease components as a single lease component. Finance leases are included in property and equipment, net, finance lease liabilities, current, and finance lease liabilities, net of current portion line items in our condensed consolidated balance sheets. Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. The implicit rates within most of our leases are generally not determinable; therefore, we use the incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The determination of our incremental borrowing rate requires judgment and is estimated for each lease based on the rate we would have to pay for a collateralized loan with the same term and payments as the lease. We consider various factors, including our level of collateralization, estimated credit rating, and the currency in which the lease is denominated. The operating lease ROU also includes any lease prepayments, offset by lease incentives. Certain of our leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain we will exercise that option while an option to terminate is considered as well unless it is reasonably certain we will not exercise the option. For certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. Expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized as depreciation expense and interest expense. We have lease agreements which require payments for lease and non-lease components (i.e., common area maintenance) that are accounted for as a single lease component. Variable lease payment amounts that cannot be determined at the commencement of the lease, such as maintenance costs based on future obligations, are not included in ROU assets or lease liabilities but rather are expensed as incurred and recorded as variable lease expense. We have operating and finance leases for corporate offices, office furniture and fixtures, and computer hardware. Our leases have remaining lease terms of 1 year to 12 years, some of which include options to extend the leases for up to 5 years. In April 2018, we entered into a lease agreement with respect to 176,222 square feet of office space in McLean, Virginia for a new corporate headquarters. The initial term of the lease was 150 months. We took initial possession of the first phase of the new headquarters in October 2018 and began to recognize rent expense as of that date. In February 2019, we took possession of a further 28,805 square feet of adjacent office space. In January 2020, we entered into an amendment which adjusts the original terms of the headquarters lease. Under this amendment, we exercised an option to expand occupancy, adding 34,158 square feet of space. Occupancy of the added space is to commence upon the earlier of the completion of certain improvements or October 14, 2020. Pursuant to the guidance of ASC 842, the amendment is considered a modification to the original lease and is accounted for as a separate contract because it represents a new right-of-use asset and the lease costs charged on the new space are at prevailing market rates. As of June 30, 2020, we have not taken possession of the space nor met the criteria for the lease to be considered commenced. Accordingly, we have not reported a right-of-use asset or liability on our condensed consolidated balance sheets nor have recorded expense on our condensed consolidated statements of operations in relation to the additional space. The following table sets forth the components of lease expense for the three and six months ended June 30, 2020 (in thousands): Three Months Ended June 30, 2020 Six Months Ended June 30, 2020 Operating lease cost $ 1,408 $ 3,276 Finance lease costs: Amortization of right-of-use assets 372 745 Interest on lease liabilities 46 97 Short-term lease cost 195 380 Variable lease cost 34 217 Total $ 2,055 $ 4,715 Supplemental balance sheet information related to leases as of June 30, 2020 was as follows (in thousands, except for lease term and discount rate): As of June 30, 2020 Operating Leases Operating right-of-use assets $ 23,156 Operating lease liabilities, current $ 5,427 Operating lease liabilities, net of current portion 44,142 Total operating lease liabilities $ 49,569 Finance Leases Property and equipment, at cost $ 4,471 Accumulated depreciation (1,445) Property and equipment, net $ 3,026 Finance lease liabilities, current $ 1,549 Finance lease liabilities, net of current portion 1,556 Total finance lease liabilities $ 3,105 Weighted Average Remaining Lease Term (in years) Operating leases 11.0 Finance leases 2.0 Weighted Average Discount Rate Operating leases 9.9 % Finance leases 5.5 % For the three and six months ended June 30, 2020, amortization of operating right-of-use assets totaled $0.2 million and $0.9 million, respectively. For the three and six months ended June 30, 2020, interest expense on operating right-of-use liabilities totaled $1.0 million and $1.4 million, respectively. Supplemental cash flow information related to leases for the six months ended June 30, 2020 was as follows (in thousands): Six Months Ended June 30, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows for operating leases $ 1,044 Operating cash outflows for finance leases 97 Financing cash outflows for finance leases 716 A summary of our future minimum lease commitments under non-cancellable leases as of June 30, 2020 is as follows (in thousands): Operating Leases Finance Leases 2020 (excluding the six months ended June 30, 2020) $ 2,319 $ 810 2021 7,434 1,620 2022 8,060 859 2023 8,145 — 2024 8,526 — 2025 9,223 — Thereafter 57,379 — Total lease payments 101,086 3,289 Less: imputed interest (51,517) (184) Total $ 49,569 $ 3,105 |
Leases | 4. Leases At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts and circumstances present and the classification of the lease. Operating leases with a term greater than one year are recognized on the balance sheet as right-of-use ("ROU") assets, lease liabilities, and, if applicable, long-term lease liabilities. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. We have elected not to recognize on the balance sheet leases with a term of one year or less. For contracts with lease and non-lease components, we have elected not to allocate the contract consideration and to account for the lease and non-lease components as a single lease component. Finance leases are included in property and equipment, net, finance lease liabilities, current, and finance lease liabilities, net of current portion line items in our condensed consolidated balance sheets. Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. The implicit rates within most of our leases are generally not determinable; therefore, we use the incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The determination of our incremental borrowing rate requires judgment and is estimated for each lease based on the rate we would have to pay for a collateralized loan with the same term and payments as the lease. We consider various factors, including our level of collateralization, estimated credit rating, and the currency in which the lease is denominated. The operating lease ROU also includes any lease prepayments, offset by lease incentives. Certain of our leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain we will exercise that option while an option to terminate is considered as well unless it is reasonably certain we will not exercise the option. For certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. Expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized as depreciation expense and interest expense. We have lease agreements which require payments for lease and non-lease components (i.e., common area maintenance) that are accounted for as a single lease component. Variable lease payment amounts that cannot be determined at the commencement of the lease, such as maintenance costs based on future obligations, are not included in ROU assets or lease liabilities but rather are expensed as incurred and recorded as variable lease expense. We have operating and finance leases for corporate offices, office furniture and fixtures, and computer hardware. Our leases have remaining lease terms of 1 year to 12 years, some of which include options to extend the leases for up to 5 years. In April 2018, we entered into a lease agreement with respect to 176,222 square feet of office space in McLean, Virginia for a new corporate headquarters. The initial term of the lease was 150 months. We took initial possession of the first phase of the new headquarters in October 2018 and began to recognize rent expense as of that date. In February 2019, we took possession of a further 28,805 square feet of adjacent office space. In January 2020, we entered into an amendment which adjusts the original terms of the headquarters lease. Under this amendment, we exercised an option to expand occupancy, adding 34,158 square feet of space. Occupancy of the added space is to commence upon the earlier of the completion of certain improvements or October 14, 2020. Pursuant to the guidance of ASC 842, the amendment is considered a modification to the original lease and is accounted for as a separate contract because it represents a new right-of-use asset and the lease costs charged on the new space are at prevailing market rates. As of June 30, 2020, we have not taken possession of the space nor met the criteria for the lease to be considered commenced. Accordingly, we have not reported a right-of-use asset or liability on our condensed consolidated balance sheets nor have recorded expense on our condensed consolidated statements of operations in relation to the additional space. The following table sets forth the components of lease expense for the three and six months ended June 30, 2020 (in thousands): Three Months Ended June 30, 2020 Six Months Ended June 30, 2020 Operating lease cost $ 1,408 $ 3,276 Finance lease costs: Amortization of right-of-use assets 372 745 Interest on lease liabilities 46 97 Short-term lease cost 195 380 Variable lease cost 34 217 Total $ 2,055 $ 4,715 Supplemental balance sheet information related to leases as of June 30, 2020 was as follows (in thousands, except for lease term and discount rate): As of June 30, 2020 Operating Leases Operating right-of-use assets $ 23,156 Operating lease liabilities, current $ 5,427 Operating lease liabilities, net of current portion 44,142 Total operating lease liabilities $ 49,569 Finance Leases Property and equipment, at cost $ 4,471 Accumulated depreciation (1,445) Property and equipment, net $ 3,026 Finance lease liabilities, current $ 1,549 Finance lease liabilities, net of current portion 1,556 Total finance lease liabilities $ 3,105 Weighted Average Remaining Lease Term (in years) Operating leases 11.0 Finance leases 2.0 Weighted Average Discount Rate Operating leases 9.9 % Finance leases 5.5 % For the three and six months ended June 30, 2020, amortization of operating right-of-use assets totaled $0.2 million and $0.9 million, respectively. For the three and six months ended June 30, 2020, interest expense on operating right-of-use liabilities totaled $1.0 million and $1.4 million, respectively. Supplemental cash flow information related to leases for the six months ended June 30, 2020 was as follows (in thousands): Six Months Ended June 30, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows for operating leases $ 1,044 Operating cash outflows for finance leases 97 Financing cash outflows for finance leases 716 A summary of our future minimum lease commitments under non-cancellable leases as of June 30, 2020 is as follows (in thousands): Operating Leases Finance Leases 2020 (excluding the six months ended June 30, 2020) $ 2,319 $ 810 2021 7,434 1,620 2022 8,060 859 2023 8,145 — 2024 8,526 — 2025 9,223 — Thereafter 57,379 — Total lease payments 101,086 3,289 Less: imputed interest (51,517) (184) Total $ 49,569 $ 3,105 |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | 5. Acquisitions Novayre Solutions SL In January 2020, we acquired 100% of the outstanding common stock of Novayre Solutions SL, a developer of a robotic process automation platform, for approximately $6.9 million. The acquisition was made due to the attractive nature of the product offerings of Novayre and in furtherance of our objective to enhance our automation platform. The transaction was financed through available cash on hand. The allocation of the purchase price is preliminary pending the finalization of the fair value of the acquired net assets, liabilities assumed, deferred income taxes, and assumed income and non-income based tax liabilities. As of the acquisition date, the purchase price was assigned to the acquired assets and assumed liabilities as follows (in thousands): Cash acquired $ 731 Other current assets 213 Property and equipment 22 Developed technology 1,537 Customer relationships 406 Goodwill 4,348 Other noncurrent assets 10 Total assets acquired 7,267 Current liabilities 14 Noncurrent liabilities 344 Total liabilities assumed 358 Net assets acquired $ 6,909 There were no changes to our reportable segments as a result of the acquisition, and revenue and expenses from the date of the acquisition through June 30, 2020 were immaterial. Additionally, acquisition costs incurred in relation to the transaction were immaterial. Acquired property and equipment is depreciated on a straight-line basis over the assets' respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce, non-contractual relationships, and expected future synergies. We do not expect the purchase price allocated to goodwill and intangible assets to be deductible for tax purposes. |
Property and Equipment, net
Property and Equipment, net | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | 6. Property and Equipment, net Property and equipment, net consisted of the following as of June 30, 2020 and December 31, 2019 (in thousands): June 30, 2020 December 31, 2019 Leasehold improvements $ 36,116 $ 37,130 Office furniture and fixtures 4,861 4,963 Computer hardware 3,618 3,365 Computer software 1,352 1,350 Equipment 48 72 45,995 46,880 Less: accumulated depreciation (8,558) (7,326) Property and equipment, net $ 37,437 $ 39,554 Depreciation expense totaled $1.4 million and $2.8 million for the three and six months ended June 30, 2020, respectively. There were nominal disposals recorded during the three months ended June 30, 2020. During the six months ended June 30, 2020, we retired $1.3 million of leasehold improvements, $0.1 million of computer hardware, and $0.1 million o f office furniture and fixtur es and equipment. Nominal losses on disposal were recorded for the three and six months ended June 30, 2020. Depreciation expense totaled $1.1 million and $1.9 million for the three and six months ended June 30, 2019, respectively. During the three and six months ended June 30, 2019, we retired $3.2 million of leasehold improvements and $0.8 million of office furniture and fixtures. During the three and six months ended June 30, 2019, we recorded a loss on disposal of $0.1 million. At June 30, 2020, property and equipment included $4.5 million of assets acquired under finance lease arrangements. Accumulated depreciation related to these finance lease arrangements totaled $1.4 million at June 30, 2020. Amortization of assets acquired under finance leases is included in depreciation and amortization expense. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 7. Accrued Expenses Accrued expenses consisted of the following as of June 30, 2020 and December 31, 2019 (in thousands): June 30, 2020 December 31, 2019 Accrued hosting costs $ 2,277 $ 1,865 Accrued contract labor costs 1,621 1,921 Accrued marketing and tradeshow expenses 647 365 Accrued audit and tax expenses 472 315 Accrued legal costs 309 422 Accrued reimbursable employee expenses 226 1,353 Accrued third party license fees 189 288 Other accrued expenses 1,566 959 Total $ 7,307 $ 7,488 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt Line of Credit In November 2017, we entered into a $20.0 million revolving line of credit with a lender. The facility matures in November 2022. We may elect whether amounts drawn on the revolving line of credit bear interest at a floating rate per annum equal to either LIBOR or the prime rate plus an additional interest rate margin that is determined by the availability of the borrowings under the revolving line of credit. The additional interest rate margin will range from 2.00% to 2.50% in the case of LIBOR |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The provision for income taxes is based upon the estimated annual effective tax rates for the year applied to the current period income before tax plus the tax effect of any significant or unusual items, discrete events, or changes in tax law. Our operating subsidiaries are exposed to statutory effective tax rates ranging from zero to approximately 32%. Fluctuations in the distribution of pre-tax income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the condensed consolidated financial statements. For the three and six months ended June 30, 2020, the actual effective tax rates were (2.4)% and (0.3)%, respectively. For the three and six months ended June 30, 2019, the actual effective tax rates were (2.7)% and (1.6)%, respectively. We assess uncertain tax positions in accordance with ASC 740-10, Accounting for Uncertainties in Income Taxes . As of June 30, 2020, our net unrecognized tax benefits totaled $1.6 million, which if recognized would result in no net effect on the effective tax rate due to a valuation allowance. The amount of reasonably possible unrecognized tax benefits that could decrease over the next 12 months due to the expiration of certain statutes of limitations or settlements of tax audits is not material to our condensed consolidated financial statements. We file income tax returns in the United States federal jurisdiction and in many states and foreign jurisdictions. The tax years 2016 through 2019 remain open to examination by the major taxing jurisdictions to which we are subject. We are not currently under examination by the Internal Revenue Service for any open tax years. In response to the COVID-19 pandemic, the United States passed the Coronavirus Aid, Relief, and Economic Security ("CARES") Act in March 2020. The CARES Act includes various income and payroll tax measures. Pursuant to these measures, we have elected the option to defer the deposit and payment of our share of social security taxes that would otherwise be due between March 27, 2020 and December 31, 2020. Under the CARES Act, half of these deferred payments are due by the end of fiscal year 2021 while the other half are due by the end of fiscal year 2022. At this time, beyond the above deferral, the CARES Act is not expected to materially impact our financial statements, but we continue to evaluate potential impacts. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 10. Stock-Based Compensation Equity Incentive Plans In May 2017, our Board of Directors adopted, and our stockholders approved, the 2017 Equity Incentive Plan (the “2017 Plan”), which became effective as of the date of the final prospectus for our initial public offering. The 2017 Plan provides for the grant of incentive stock options to employees, and for the grant of nonstatutory stock options, restricted stock awards, restricted stock unit awards ("RSUs"), stock appreciation rights, performance-based stock awards, and other forms of equity compensation to employees, including officers, non-employee directors, and consultants. We initially reserved 6,421,442 shares of Class A common stock for issuance under the 2017 Plan, which included 421,442 shares that remained available for issuance under our 2007 Stock Option Plan (the “2007 Plan”) at the time the 2017 Plan became effective. The number of shares reserved under the 2017 Plan increases for any shares subject to outstanding awards originally granted under the 2007 Plan that expire or are forfeited prior to exercise. As a result of the adoption of the 2017 Plan, no further grants may be made under the 2007 Plan. As of June 30, 2020, there were 7,142,549 shares of Class A common stock reserved for issuance under the 2017 Plan, of which 4,545,733 were available to be issued. Stock Options We estimate the fair value of stock options containing only a service condition using the Black-Scholes option pricing model, which requires the use of subjective assumptions, including the expected term of the option, the current price of the underlying stock, the expected stock price volatility, expected dividend yield, and the risk-free interest rate for the expected term of the option. The expected term represents the period of time the stock options are expected to be outstanding. Due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of the stock options, we use the simplified method to estimate the expected term for our stock options. Under the simplified method, the expected term of an option is presumed to be the mid-point between the vesting date and the end of the contractual term. Expected volatility is based on historical volatilities for publicly traded stock of comparable companies over the estimated expected term of the stock options. We assume no dividend yield because dividends are not expected to be paid in the near future, which is consistent with our history of not paying dividends. In May 2019, our Board of Directors granted a stock option to purchase 700,000 shares of our Class A common stock to our Chief Executive Officer (the "2019 CEO Grant") under the 2017 Plan with an exercise price of $33.98 per share. The 2019 CEO Grant is eligible to vest based on the achievement of a stock price appreciation target of our Class A common stock. Specifically, the 2019 CEO Grant will vest when shares of our Class A common stock closes at or above $84.63 per share for a period equal to or greater than 90 calendar days or upon the occurrence of a change in control in which the value of our Class A common stock is equal to or greater than $84.63 per share within five years of the grant date. The fair value of the 2019 CEO Grant was determined using a Monte Carlo simulation. The fair value of the award at the grant date was $9.5 million and will be amortized over the derived service period of 2.6 years. The following table summarizes the assumptions used to estimate the fair value of stock options granted during the three and six months ended June 30, 2020 and June 30, 2019: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Risk-free interest rate * 2.1% * 2.1% Expected term (in years) * 2.6 * 2.6 Expected volatility * 55.0% * 55.0% Expected dividend yield * —% * —% * Not applicable because no stock options were granted during the period The following table summarizes the stock option activity for the six months ended June 30, 2020: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2020 4,458,611 $ 12.30 5.8 $ 115,501 Granted — — — — Exercised (376,967) 5.98 — 16,706 Expired (1,020) 12.00 — — Canceled (34,080) 11.19 — — Outstanding at June 30, 2020 4,046,544 $ 12.90 5.33 $ 155,170 Exercisable at June 30, 2020 2,733,704 $ 8.00 5.45 $ 118,244 There were no stock options granted during the six months ended June 30, 2020. The weighted average grant date fair value of stock options granted during the six months ended June 30, 2019 was $13.57 per share. The total fair value of stock options that vested during the six months ended June 30, 2020 and June 30, 2019 was $1.0 million and $1.5 million, respectively. As of June 30, 2020, the total compensation cost related to unvested stock options not yet recognized was $6.1 million, which will be recognized over a weighted average period of 1.5 years. Restricted Stock Units The following table summarizes RSU activity for the six months ended June 30, 2020: Number of Shares Weighted Average Grant Date Fair Value Non-vested and outstanding at January 1, 2020 1,022,835 $ 31.39 Granted 231,333 52.46 Vested (59,598) 32.82 Canceled (77,593) 32.24 Non-vested and outstanding at June 30, 2020 1,116,977 35.62 As of June 30, 2020, total unrecognized compensation cost related to unvested RSUs was approximately $33.6 million, which will be recognized over a weighted average period of 2.3 years. In November 2018, our co-founders were granted 255,930 RSUs under the 2017 Plan at a fair value of $30.06 per share. The awards were approved by the Board of Directors. The value of these awards at the grant date was $7.7 million and was amortized over the vesting periods . The RSUs vested during the three months ended March 31, 2019. The following table summarizes the components of our stock-based compensation expense by instrument type for the three and six months ended June 30, 2020 and June 30, 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 RSUs $ 2,475 $ 1,902 $ 4,774 $ 8,671 Stock options 1,047 695 2,131 1,059 Common stock awards to Board of Directors 92 92 185 184 Total stock-based compensation expense $ 3,614 $ 2,689 $ 7,090 $ 9,914 Stock-based compensation expense for RSUs, stock options, and issuances of common stock is included in the following line items in the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2020 and June 30, 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cost of revenue Subscriptions $ 229 $ 161 $ 442 $ 315 Professional services 317 244 529 2,218 Operating expenses Sales and marketing 657 814 1,410 3,195 Research and development 619 435 1,172 2,550 General and administrative 1,792 1,035 3,537 1,636 Total stock-based compensation expense $ 3,614 $ 2,689 $ 7,090 $ 9,914 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 11. Stockholders' Equity As of June 30, 2020, we had authorized 500,000,000 shares of Class A common stock and 100,000,000 shares of Class B common stock, each with a par value of $0.0001 per share, of which 37,558,379 shares of Class A common stock and 32,281,936 shares of Class B common stock were issued and outstanding. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. The holders of Class A common stock are entitled to one vote per share, and the holders of Class B common stock are entitled to ten votes per share on all matters subject to stockholder vote. The holders of Class B common stock also have approval rights for certain corporate actions. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted upon transfer thereof, subject to certain exceptions. In addition, upon the date on which the outstanding shares of Class B common stock represent less than 10% of the aggregate voting power of our capital stock, all outstanding shares of Class B common stock shall convert automatically into Class A common stock. |
Basic and Diluted Loss per Comm
Basic and Diluted Loss per Common Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Loss per Common Share | 12. Basic and Diluted Loss per Common Share The following potentially dilutive securities outstanding, prior to the use of the treasury stock method or the if-converted method, have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been anti-dilutive: Three and Six Months Ended June 30, 2020 2019 Stock options 4,046,544 5,046,632 Non-vested restricted stock units 1,116,127 996,049 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies Contractual Warranty and Indemnification Obligations We provide limited product warranties. Historically, any payments made under these provisions have been immaterial. We also agree to standard indemnification provisions in the ordinary course of business. Pursuant to these provisions, we agree to indemnify, hold harmless, and reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally our customers, in connection with certain intellectual property infringement claims by any third party arising from the use of our products or services in accordance with the agreement. The term of our contractual indemnity provisions often survives termination or expiration of the applicable agreement. We carry insurance that covers certain third-party claims relating to our services and limits our exposure. We have never incurred costs to defend lawsuits or settle claims related to these indemnification provisions. Letters of Credit At June 30, 2020 and December 31, 2019, we had outstanding letters of credit totaling $11.1 million and $10.5 million, respectively, in connection with securing our leased office space. All letters of credit are secured by our borrowing arrangement as described in Note 8. Legal |
Segment and Geographic Informat
Segment and Geographic Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 14. Segment and Geographic Information The following table summarizes revenue by geography for the three and six months ended June 30, 2020 and June 30, 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Domestic $ 42,191 $ 43,785 $ 94,646 $ 84,862 International 24,584 21,490 50,993 40,717 Total $ 66,775 $ 65,275 $ 145,639 $ 125,579 With respect to geographic information, revenue is attributed to respective geographies based on the contracting address of the customer. Revenues from external customers attributed to the United Kingdom were 12.4% of our total revenue for each of the three and six months ended June 30, 2020. Revenues from external customers attributed to the United Kingdom were 12.8% and 11.9% of our total revenue for the three and six months ended June 30, 2019, respectively. There were no other individual foreign countries from which more than 10% of our total revenue was attributable for each of the three and six months ended June 30, 2020 and June 30, 2019. Substantially all of our long-lived assets were held in the United States as of June 30, 2020 and December 31, 2019. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity, and cash flows. The results of operations for the current period are not necessarily indicative of the results for the full year or the results for any future periods. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (the “SEC”) on February 20, 2020. |
Use of Estimates | Use of Estimates The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Although we believe the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. Significant estimates embedded in the condensed consolidated financial statements include revenue recognition, income taxes and the related valuation allowance, the valuation of goodwill and intangible assets, leases, costs to obtain a contract with a customer, and stock-based compensation. The outbreak of the novel coronavirus disease ("COVID-19") has resulted in the declaration of a global pandemic and introduced a level of disruption and uncertainty into the financial markets and global economy. While we continue to monitor the developments surrounding the pandemic, as of the date of issuance of these financial statements, we are not aware of any specific events or circumstances that would require us to update our estimates, assumptions, and judgments or revise the carrying value of our assets or liabilities. However, the ultimate impact of COVID-19 on our business is not estimable at this time and will be largely dependent upon a number of factors outside of our control including the extent and duration of the outbreak as well as any mitigating actions which may be undertaken by global governments and the general public. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Appian and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Revenue Recognition | We adopted ASC 606, the new revenue recognition guidance, on January 1, 2019 using the modified retrospective method. Under this method of adoption, we recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit and applied the new standard only to contracts that were not completed prior January 1, 2019. Because we were an emerging growth company until December 31, 2019, the Jumpstart Our Business Startups Act allowed us to delay adoption of certain accounting standards such as ASC 606 and ASC 842 until such time they were made applicable to private companies. We elected to use this extended transition period, and accordingly, did not report revenues under ASC 606 or leases under ASC 842 in our Quarterly Reports on Form 10-Q during 2019. Refer to our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 20, 2020, for a complete reconciliation of our revenues under the old and new guidance. Prior period amounts in this Form 10-Q have been recast as if we had reported under ASC 606 for the applicable periods. Revenue Recognition Refer to Note 3 for a detailed discussion on specific revenue recognition principles related to our major revenue streams. Cost of Revenue Subscriptions Cost of subscriptions revenue consists primarily of fees paid to our third-party managed hosting providers and other third-party service providers, personnel costs such as payroll and benefits for our technology operations and customer support teams, and allocated facility costs and overhead. Professional Services Cost of professional services revenue includes all direct and indirect costs to deliver our professional services and training, including employee compensation for our global professional services and training personnel, travel costs, third-party contractor costs, and allocated facility costs and overhead. Revenue Recognition We generate subscriptions revenue primarily through the sale of software as a service ("SaaS") subscriptions bundled with maintenance and support and hosting services as well as term license subscriptions bundled with maintenance and support. We generate professional services revenue from fees for our consulting services, including application development and deployment assistance as well as training related to our platform. Performance Obligations and Timing of Revenue Recognition We primarily sell products and services that fall into the categories discussed below. Each category contains one or more performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from the product or service on its own or together with readily available resources, including those purchased separately from us) and distinct within the context of the contract (i.e., separately identified from other promises in the contract) or (2) a series of distinct products or services that are substantially the same and have the same pattern of transfer to the customer. Our term license subscriptions are delivered at a point in time while our SaaS subscriptions, maintenance and support, and professional services are delivered over time. Subscriptions Revenue Subscriptions revenue is primarily related to (1) SaaS subscriptions bundled with maintenance and support and hosting services and (2) term license subscriptions bundled with maintenance and support. We generally charge subscription fees on a per-user basis and, to a lesser degree, non-user based single application licenses. We bill customers and collect payment for subscriptions to our platform in advance on an annual, quarterly, or monthly basis. In certain instances, our customers have paid their entire contract up front. SaaS Subscriptions We generate cloud-based subscription revenue primarily from the sales of subscriptions to access our cloud offering, together with related support services to our customers. We perform all required maintenance and support for our cloud offering, and we do not separately charge customers for hosting costs. Revenue is recognized on a ratable basis over the contract term beginning on the date the service is made available to the customer. Our cloud-based subscription contracts generally have a term of one Term License Subscriptions Our term license subscription revenue is derived from customers with on-premise installations of our platform pursuant to contracts that were historically one Maintenance and Support Maintenance and support subscriptions include both technical support and when-and-if-available software upgrades, which are treated as a single performance obligation as they are considered a series of distinct services that are substantially the same and have the same duration and measure of progress. Revenue from maintenance and support is recognized ratably over the contract period, which is the period over which the customer has continuous access to maintenance and support. Professional Services Our professional services revenue is comprised of fees for consulting services, including application development and deployment assistance as well as training services related to our platform. Our professional services are considered distinct performance obligations when sold stand alone or with other products. Consulting Services We sell consulting services to assist customers in planning and executing the deployment of our software. Customers are not required to use consulting services to fully benefit from the software. Consulting services are regularly sold on a standalone basis and either (1) under a fixed-fee arrangement or (2) on a time and materials basis. Consulting contracts are each considered separate performance obligations because they do not integrate with each other or with other products and services to deliver a combined output to the customer, do not modify or customize (or are not modified or customized by) each other or other products and services, and do not affect the customer's ability to use the other consulting offerings or other products and services. Revenue under consulting contracts is recognized over time as services are delivered. For time and materials-based consulting contracts, we have elected the practical expedient of recognizing revenue upon invoicing since the invoiced amount corresponds directly to the value of our service to-date. Training Services We sell various training services to our customers. Training services are sold in the form of prepaid training credits that are redeemed based on a fixed rate per course. Training revenue is recognized when the associated training services are delivered. Significant Judgments and Estimates Determining the Transaction Price The transaction price includes both fixed and variable consideration. Variable consideration is included in the transaction price to the extent it is probable a significant reversal will not occur. The amount of variable consideration excluded from the transaction price for the six months ended June 30, 2020 was insignificant. Our estimates of variable consideration are also subject to subsequent true-up adjustments and may result in changes to transaction prices; however, such true-up adjustments are not expected to be material. Allocating the Transaction Price Based on Standalone Selling Prices ("SSP") We allocate the transaction price to each performance obligation in a contract based on its relative SSP. The SSP is the observable price at which we sell the product or service separately. In the absence of observable pricing, we estimate SSP using the residual approach. We establish SSP as follows: 1. SaaS subscriptions - Given the highly variable selling price of our SaaS subscriptions, we establish the SSP of our SaaS subscriptions using a residual approach after first determining the SSP of consulting and training services. We have concluded the residual approach to estimating SSP of our SaaS subscriptions is an appropriate allocation of the transaction price. 2. Term license subscriptions - Given the highly variable selling price of our term license subscriptions, we have established SSP of term license subscriptions using a residual approach after first determining the SSP of maintenance and support. Maintenance and support is sold on a standalone basis in conjunction with renewals of our legacy perpetual software licenses and within a narrow range of the net license fee. Because an economic relationship exists between the license and maintenance and support, we have concluded the residual approach to estimating SSP of term license subscriptions is an appropriate allocation of the transaction price. 3. Maintenance and support - We establish SSP of maintenance and support as a percentage of the stated net subscription fee based on observable pricing of maintenance and support renewals from our legacy perpetual software licenses. 4. Consulting services and training services - SSP of consulting services and training services is established based on the observable pricing of standalone sales within each geographic region where the services are sold. Contract Balances |
Concentration of Credit and Customer Risk | Concentration of Credit and Customer Risk Our financial instruments exposed to concentration of credit and customer risk consist primarily of cash and cash equivalents and trade accounts receivable. Deposits held with banks may exceed the amount of insurance provided on such deposits. We believe the financial institutions holding our cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances. |
Cash and Cash Equivalents | Cash and Cash EquivalentsWe consider all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase, as well as overnight repurchase investments, to be cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful AccountsAccounts receivable are stated at realizable value, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts and incorporates an estimation of expected lifetime credit losses on our receivables. We regularly review the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, and current economic trends. If the financial condition of our customers were to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be required and would increase bad debt expense. To date, our allowance and related bad debt write-offs have been nominal. |
Assets Recognized from the Costs to Obtain a Contract with a Customer | Assets Recognized from the Costs to Obtain a Contract with a Customer We capitalize the incremental costs of obtaining a contract with a customer, including sales commissions paid to our direct sales force that are incremental costs to obtaining customer contracts. These costs are recorded as deferred commissions in the condensed consolidated balance sheets. Costs to obtain a contract for a new customer or upsell are amortized over an estimated economic life of five years as sales commissions on initial sales are not commensurate with sales commissions on contract renewals. We determine the estimated economic life based on both qualitative and quantitative factors such as expected renewals, product life cycles, contractual terms, and customer attrition. We periodically review the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the estimated economic life. Commissions paid relating to contract renewals are deferred and amortized over the related renewal period. We also capitalize the incremental fringe benefits associated with commission expenses paid to our direct sales force. Costs to obtain a contract for professional services arrangements are expensed as incurred as the contractual period of our professional services arrangements are one year or less. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Significant additions or improvements extending the useful life of an asset are capitalized, while repairs and maintenance costs which do not significantly improve the related assets or extend their useful lives are charged to expense as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived AssetsLong-lived assets and certain intangible assets are reviewed for impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable through undiscounted cash flows from the use of the assets. If such assets are considered to be impaired, the assets are written down to their estimated fair value. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value as of June 30, 2020 and December 31, 2019 because of the relatively short duration of these instruments. Our line of credit is recorded at carrying value, which approximates fair value. We use a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires us to use observable inputs when available and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2. Inputs other than quoted prices in active markets that are observable either directly or indirectly; and • Level 3. Unobservable inputs for which there is little or no market data, which require us to develop our own assumptions. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation expense related to stock-based awards based on the estimated fair value of the award on the grant date. We calculate the fair value of stock options containing only a service condition using the Black-Scholes option pricing model. The fair value of restricted stock units is based on the closing market price of our common stock on the Nasdaq Global Market on the date of grant. For service-based awards, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. For performance-based awards, stock-based compensation expense is recognized using the accelerated attribution method based on the probability of satisfying the performance condition. For awards that contain market conditions, compensation expense is measured using a Monte Carlo simulation and recognized using the accelerated attribution method over the derived service period based on the expected market performance as of the grant date. For restricted stock units, stock-based compensation expense is recognized on a straight-line basis over the requisite service period. We account for forfeitures as they occur rather than estimating expected forfeitures. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) ("ASU 2016-13"), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Adopting the standard did not have a material impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"), which eliminates, modifies, and adds disclosure requirements for fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Adopting the standard did not have a material impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract , which aligns the requirements for capitalizing implementation costs in cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Adopting the standard did not have a material impact on our condensed consolidated financial statements. |
Leases | At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts and circumstances present and the classification of the lease. Operating leases with a term greater than one year are recognized on the balance sheet as right-of-use ("ROU") assets, lease liabilities, and, if applicable, long-term lease liabilities. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. We have elected not to recognize on the balance sheet leases with a term of one year or less. For contracts with lease and non-lease components, we have elected not to allocate the contract consideration and to account for the lease and non-lease components as a single lease component. Finance leases are included in property and equipment, net, finance lease liabilities, current, and finance lease liabilities, net of current portion line items in our condensed consolidated balance sheets. Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. The implicit rates within most of our leases are generally not determinable; therefore, we use the incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The determination of our incremental borrowing rate requires judgment and is estimated for each lease based on the rate we would have to pay for a collateralized loan with the same term and payments as the lease. We consider various factors, including our level of collateralization, estimated credit rating, and the currency in which the lease is denominated. The operating lease ROU also includes any lease prepayments, offset by lease incentives. Certain of our leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain we will exercise that option while an option to terminate is considered as well unless it is reasonably certain we will not exercise the option. For certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. Expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized as depreciation expense and interest expense. We have lease agreements which require payments for lease and non-lease components (i.e., common area maintenance) that are accounted for as a single lease component. Variable lease payment amounts that cannot be determined at the commencement of the lease, such as maintenance costs based on future obligations, are not included in ROU assets or lease liabilities but rather are expensed as incurred and recorded as variable lease expense. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Property and Equipment, Useful Life | The following table outlines useful lives of our major asset categories: Asset Category Useful Life (in years) Computer software 3 Computer hardware 3 Equipment 5 Office furniture and fixtures 10 Leasehold improvements (a) (a) - Leasehold improvements have an estimated useful life of the shorter of the useful life of the assets or the lease term. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue by Services | The following table summarizes revenue from contracts with customers for the three and six months ended June 30, 2020 and June 30, 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 SaaS subscriptions $ 29,580 $ 22,796 $ 57,970 $ 44,074 Term license subscriptions 7,379 10,103 25,172 19,660 Maintenance and support 4,459 3,961 8,712 7,683 Professional services 25,357 28,415 53,785 54,162 Total revenue $ 66,775 $ 65,275 $ 145,639 $ 125,579 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Components of Lease Expense | The following table sets forth the components of lease expense for the three and six months ended June 30, 2020 (in thousands): Three Months Ended June 30, 2020 Six Months Ended June 30, 2020 Operating lease cost $ 1,408 $ 3,276 Finance lease costs: Amortization of right-of-use assets 372 745 Interest on lease liabilities 46 97 Short-term lease cost 195 380 Variable lease cost 34 217 Total $ 2,055 $ 4,715 |
Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases as of June 30, 2020 was as follows (in thousands, except for lease term and discount rate): As of June 30, 2020 Operating Leases Operating right-of-use assets $ 23,156 Operating lease liabilities, current $ 5,427 Operating lease liabilities, net of current portion 44,142 Total operating lease liabilities $ 49,569 Finance Leases Property and equipment, at cost $ 4,471 Accumulated depreciation (1,445) Property and equipment, net $ 3,026 Finance lease liabilities, current $ 1,549 Finance lease liabilities, net of current portion 1,556 Total finance lease liabilities $ 3,105 Weighted Average Remaining Lease Term (in years) Operating leases 11.0 Finance leases 2.0 Weighted Average Discount Rate Operating leases 9.9 % Finance leases 5.5 % |
Supplemental Cash Flow Information | Supplemental cash flow information related to leases for the six months ended June 30, 2020 was as follows (in thousands): Six Months Ended June 30, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows for operating leases $ 1,044 Operating cash outflows for finance leases 97 Financing cash outflows for finance leases 716 |
Maturities of Operating Lease Liabilities | A summary of our future minimum lease commitments under non-cancellable leases as of June 30, 2020 is as follows (in thousands): Operating Leases Finance Leases 2020 (excluding the six months ended June 30, 2020) $ 2,319 $ 810 2021 7,434 1,620 2022 8,060 859 2023 8,145 — 2024 8,526 — 2025 9,223 — Thereafter 57,379 — Total lease payments 101,086 3,289 Less: imputed interest (51,517) (184) Total $ 49,569 $ 3,105 |
Maturities of Finance Lease Liabilities | A summary of our future minimum lease commitments under non-cancellable leases as of June 30, 2020 is as follows (in thousands): Operating Leases Finance Leases 2020 (excluding the six months ended June 30, 2020) $ 2,319 $ 810 2021 7,434 1,620 2022 8,060 859 2023 8,145 — 2024 8,526 — 2025 9,223 — Thereafter 57,379 — Total lease payments 101,086 3,289 Less: imputed interest (51,517) (184) Total $ 49,569 $ 3,105 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | As of the acquisition date, the purchase price was assigned to the acquired assets and assumed liabilities as follows (in thousands): Cash acquired $ 731 Other current assets 213 Property and equipment 22 Developed technology 1,537 Customer relationships 406 Goodwill 4,348 Other noncurrent assets 10 Total assets acquired 7,267 Current liabilities 14 Noncurrent liabilities 344 Total liabilities assumed 358 Net assets acquired $ 6,909 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consisted of the following as of June 30, 2020 and December 31, 2019 (in thousands): June 30, 2020 December 31, 2019 Leasehold improvements $ 36,116 $ 37,130 Office furniture and fixtures 4,861 4,963 Computer hardware 3,618 3,365 Computer software 1,352 1,350 Equipment 48 72 45,995 46,880 Less: accumulated depreciation (8,558) (7,326) Property and equipment, net $ 37,437 $ 39,554 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following as of June 30, 2020 and December 31, 2019 (in thousands): June 30, 2020 December 31, 2019 Accrued hosting costs $ 2,277 $ 1,865 Accrued contract labor costs 1,621 1,921 Accrued marketing and tradeshow expenses 647 365 Accrued audit and tax expenses 472 315 Accrued legal costs 309 422 Accrued reimbursable employee expenses 226 1,353 Accrued third party license fees 189 288 Other accrued expenses 1,566 959 Total $ 7,307 $ 7,488 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Assumptions Used to Estimate the Fair Value of Stock Options Granted | The following table summarizes the assumptions used to estimate the fair value of stock options granted during the three and six months ended June 30, 2020 and June 30, 2019: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Risk-free interest rate * 2.1% * 2.1% Expected term (in years) * 2.6 * 2.6 Expected volatility * 55.0% * 55.0% Expected dividend yield * —% * —% * Not applicable because no stock options were granted during the period |
Summary of the Stock Option Activity | The following table summarizes the stock option activity for the six months ended June 30, 2020: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2020 4,458,611 $ 12.30 5.8 $ 115,501 Granted — — — — Exercised (376,967) 5.98 — 16,706 Expired (1,020) 12.00 — — Canceled (34,080) 11.19 — — Outstanding at June 30, 2020 4,046,544 $ 12.90 5.33 $ 155,170 Exercisable at June 30, 2020 2,733,704 $ 8.00 5.45 $ 118,244 |
Schedule of Restricted Stock Unit Activity | The following table summarizes RSU activity for the six months ended June 30, 2020: Number of Shares Weighted Average Grant Date Fair Value Non-vested and outstanding at January 1, 2020 1,022,835 $ 31.39 Granted 231,333 52.46 Vested (59,598) 32.82 Canceled (77,593) 32.24 Non-vested and outstanding at June 30, 2020 1,116,977 35.62 |
Schedule of Components of Stock-based Compensation Expense | The following table summarizes the components of our stock-based compensation expense by instrument type for the three and six months ended June 30, 2020 and June 30, 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 RSUs $ 2,475 $ 1,902 $ 4,774 $ 8,671 Stock options 1,047 695 2,131 1,059 Common stock awards to Board of Directors 92 92 185 184 Total stock-based compensation expense $ 3,614 $ 2,689 $ 7,090 $ 9,914 |
Schedule of Stock-based Compensation Expense Included in Condensed Consolidated Statements of Operations | Stock-based compensation expense for RSUs, stock options, and issuances of common stock is included in the following line items in the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2020 and June 30, 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cost of revenue Subscriptions $ 229 $ 161 $ 442 $ 315 Professional services 317 244 529 2,218 Operating expenses Sales and marketing 657 814 1,410 3,195 Research and development 619 435 1,172 2,550 General and administrative 1,792 1,035 3,537 1,636 Total stock-based compensation expense $ 3,614 $ 2,689 $ 7,090 $ 9,914 |
Basic and Diluted Loss per Co_2
Basic and Diluted Loss per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Securities Excluded From Calculation of Weighted Average Common Shares | The following potentially dilutive securities outstanding, prior to the use of the treasury stock method or the if-converted method, have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been anti-dilutive: Three and Six Months Ended June 30, 2020 2019 Stock options 4,046,544 5,046,632 Non-vested restricted stock units 1,116,127 996,049 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Summary of Revenue By Geography | The following table summarizes revenue by geography for the three and six months ended June 30, 2020 and June 30, 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Domestic $ 42,191 $ 43,785 $ 94,646 $ 84,862 International 24,584 21,490 50,993 40,717 Total $ 66,775 $ 65,275 $ 145,639 $ 125,579 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2020USD ($)$ / shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)agency$ / shares | Jun. 30, 2019USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of government agencies | agency | 3 | ||||
Change in allowance for doubtful accounts | $ | $ 200 | ||||
Capitalized contract cost, amortization period | 5 years | 5 years | 5 years | ||
Commission expense | $ | $ 5,800 | $ 3,600 | $ 11,100 | $ 6,600 | |
Customer Concentration Risk | Sales Revenue, Net | Foreign Customers | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 36.80% | 32.90% | 35.00% | 32.40% | |
Customer Concentration Risk | Sales Revenue, Net | Government Agencies | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 19.00% | 16.80% | 16.80% | 17.30% | |
Customer Concentration Risk | Sales Revenue, Net | Federal Government Agencies | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 7.60% | 6.40% | 6.70% | 7.30% | |
Class A Common Stock | Underwritten Public Offering | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of shares issued in public offering (in shares) | shares | 2,500,000 | ||||
Number of shares issued by the company in public offering (in shares) | shares | 1,931,206 | ||||
Number of shares issued by sharesholders in public offering (in shares) | shares | 568,794 | ||||
Sale of stock, offering price (in usd per share) | $ / shares | $ 56.50 | $ 56.50 | $ 56.50 | ||
Net proceeds from public offering | $ | $ 107,900 |
Significant Accounting Polici_5
Significant Accounting Policies - Property and Equipment, Useful Life (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Computer software | |
Summary Of Significant Accounting Policies [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Computer hardware | |
Summary Of Significant Accounting Policies [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Equipment | |
Summary Of Significant Accounting Policies [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Office furniture and fixtures | |
Summary Of Significant Accounting Policies [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Revenue - Revenue by Services (
Revenue - Revenue by Services (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 66,775 | $ 65,275 | $ 145,639 | $ 125,579 |
SaaS subscriptions | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 29,580 | 22,796 | 57,970 | 44,074 |
Term license subscriptions | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 7,379 | 10,103 | 25,172 | 19,660 |
Maintenance and support | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 4,459 | 3,961 | 8,712 | 7,683 |
Professional services | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 25,357 | $ 28,415 | $ 53,785 | $ 54,162 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Contract assets balances | $ 20.8 | $ 22.8 |
Revenue recognized | 57.9 | |
Unsatisfied performance obligations | 175.9 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Unsatisfied performance obligations | $ 160.7 | |
Revenue, remaining performance obligation, period | 24 months | |
Minimum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
SaaS subscriptions contracts term | 1 year | |
Term license subscription contracts term | 1 year | |
Maximum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
SaaS subscriptions contracts term | 3 years | |
Term license subscription contracts term | 3 years |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Jan. 31, 2020ft² | Feb. 28, 2019ft² | Apr. 30, 2018ft² | |
Debt Instrument [Line Items] | |||||
Renewal term | 5 years | ||||
Number of square feet | ft² | 34,158 | 28,805 | 176,222 | ||
Lease term (in months) | 150 months | 150 months | |||
Amortization of operating right-of-use assets | $ 0.2 | $ 0.9 | |||
Interest expense on operating right-of-use liabilities | $ 1 | $ 1.4 | |||
Minimum | |||||
Debt Instrument [Line Items] | |||||
Leases, remaining lease term | 1 year | ||||
Maximum | |||||
Debt Instrument [Line Items] | |||||
Leases, remaining lease term | 12 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 1,408 | $ 3,276 |
Amortization of right-of-use assets | 372 | 745 |
Interest on lease liabilities | 46 | 97 |
Short-term lease cost | 195 | 380 |
Variable lease cost | 34 | 217 |
Total | $ 2,055 | $ 4,715 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Operating Leases | ||
Operating right-of-use assets | $ 23,156 | $ 24,205 |
Operating lease liabilities, current | 5,427 | 3,836 |
Operating lease liabilities, net of current portion | 44,142 | 44,416 |
Total operating lease liabilities | 49,569 | |
Finance Leases | ||
Property and equipment, at cost | 4,471 | |
Accumulated depreciation | (1,445) | |
Property and equipment, net | 3,026 | |
Finance lease liabilities, current | 1,549 | 1,447 |
Finance lease liabilities, net of current portion | 1,556 | $ 2,375 |
Total finance lease liabilities | $ 3,105 | |
Operating leases, weighted average remaining lease term | 11 years | |
Finance leases, weighted average remaining lease term | 2 years | |
Operating leases, weighted average remaining discount rate | 9.90% | |
Finance leases, weighted average remaining discount rate | 5.50% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating cash outflows for operating leases | $ 1,044 | |
Operating cash outflows for finance leases | 97 | |
Financing cash outflows for finance leases | $ 716 | $ 0 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Operating Leases | |
2020 (excluding the six months ended June 30, 2020) | $ 2,319 |
2021 | 7,434 |
2022 | 8,060 |
2023 | 8,145 |
2024 | 8,526 |
2025 | 9,223 |
Thereafter | 57,379 |
Total lease payments | 101,086 |
Less: imputed interest | (51,517) |
Total | 49,569 |
Finance Leases | |
2020 (excluding the six months ended June 30, 2020) | 810 |
2021 | 1,620 |
2022 | 859 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Total lease payments | 3,289 |
Less: imputed interest | (184) |
Total | $ 3,105 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - Robotic Process Automation Platform $ in Millions | 1 Months Ended |
Jan. 31, 2020USD ($) | |
Business Combination Segment Allocation [Line Items] | |
Percentage of interests acquired | 100.00% |
Acquisition price | $ 6.9 |
Acquisitions - Schedule of Busi
Acquisitions - Schedule of Business Acquisitions (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jan. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 4,443 | $ 0 | |
Robotic Process Automation Platform | |||
Business Acquisition [Line Items] | |||
Cash acquired | $ 731 | ||
Other current assets | 213 | ||
Property and equipment | 22 | ||
Goodwill | 4,348 | ||
Other noncurrent assets | 10 | ||
Total assets acquired | 7,267 | ||
Current liabilities | 14 | ||
Noncurrent liabilities | 344 | ||
Total liabilities assumed | 358 | ||
Net assets acquired | 6,909 | ||
Robotic Process Automation Platform | Developed technology | |||
Business Acquisition [Line Items] | |||
Finite-lived intangibles | 1,537 | ||
Robotic Process Automation Platform | Customer relationships | |||
Business Acquisition [Line Items] | |||
Finite-lived intangibles | $ 406 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 45,995 | $ 46,880 |
Less: accumulated depreciation | (8,558) | (7,326) |
Property and equipment, net | 37,437 | 39,554 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 36,116 | 37,130 |
Office furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,861 | 4,963 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,618 | 3,365 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,352 | 1,350 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 48 | $ 72 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization expense | $ 1,400 | $ 1,100 | $ 2,800 | $ 1,900 |
Loss on disposal | (100) | (22) | (145) | |
Property and equipment acquired under finance lease arrangements | 4,471 | 4,471 | ||
Accumulated depreciation of finance lease arrangements | $ 1,445 | 1,445 | ||
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Disposal of property plant and equipment | 3,200 | 1,300 | 3,200 | |
Computer hardware | ||||
Property, Plant and Equipment [Line Items] | ||||
Disposal of property plant and equipment | 100 | |||
Office furniture and fixtures | ||||
Property, Plant and Equipment [Line Items] | ||||
Disposal of property plant and equipment | $ 800 | 100 | $ 800 | |
Equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Disposal of property plant and equipment | $ 100 |
Accrued Expenses (Detail)
Accrued Expenses (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued hosting costs | $ 2,277 | $ 1,865 |
Accrued contract labor costs | 1,621 | 1,921 |
Accrued marketing and tradeshow expenses | 647 | 365 |
Accrued audit and tax expenses | 472 | 315 |
Accrued legal costs | 309 | 422 |
Accrued reimbursable employee expenses | 226 | 1,353 |
Accrued third party license fees | 189 | 288 |
Other accrued expenses | 1,566 | 959 |
Total | $ 7,307 | $ 7,488 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 1 Months Ended | ||
Nov. 30, 2017 | Jun. 30, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Line Items] | |||
Outstanding letters of credit | $ 11,100,000 | $ 10,500,000 | |
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Credit facility | $ 20,000,000 | ||
Term Loan | |||
Line of Credit Facility [Line Items] | |||
Line of credit, outstanding borrowings | $ 0 | ||
Minimum | |||
Line of Credit Facility [Line Items] | |||
Unused credit facility fee | 0.15% | ||
Quick ratio | 135.00% | ||
Minimum | London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Interest rate margin | 2.00% | ||
Minimum | Prime Rate | |||
Line of Credit Facility [Line Items] | |||
Interest rate margin | 1.00% | ||
Maximum | |||
Line of Credit Facility [Line Items] | |||
Unused credit facility fee | 0.25% | ||
Maximum | London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Interest rate margin | 2.50% | ||
Maximum | Prime Rate | |||
Line of Credit Facility [Line Items] | |||
Interest rate margin | 1.50% |
Income Taxes (Detail)
Income Taxes (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Taxes [Line Items] | ||||
Effective tax rate | (2.40%) | (2.70%) | (0.30%) | (1.60%) |
Net unrecognized tax benefits which would impact effective tax rate if recognized | $ 1.6 | $ 1.6 | ||
Minimum | Subsidiaries | ||||
Income Taxes [Line Items] | ||||
Effective tax rate | 0.00% | |||
Maximum | Subsidiaries | ||||
Income Taxes [Line Items] | ||||
Effective tax rate | 32.00% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
May 31, 2019 | Nov. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | May 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option granted (in shares) | 0 | |||||
Weighted average grant-date fair value (in usd per share) | $ 13.57 | |||||
Exercise price of stock options granted (in usd per share) | $ 0 | |||||
Service period (in years) | 5 years 3 months 29 days | 5 years 9 months 18 days | ||||
Vested in period, value | $ 1 | $ 1.5 | ||||
Compensation cost related to nonvested stock options not yet recognized | $ 6.1 | |||||
Unrecognized compensation cost related to nonvested stock option recognized over weighted average period, in years | 1 year 6 months | |||||
Non-vested restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total unrecognized compensation cost related to unvested restricted stock units | $ 33.6 | |||||
Weighted average remaining vesting period | 2 years 3 months 18 days | |||||
Grant of RSUs (in shares) | 231,333 | |||||
Fair value of shares granted (in usd per share) | $ 52.46 | |||||
2017 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available to be issued (in shares) | 4,545,733 | |||||
2017 Equity Incentive Plan | Non-vested restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Value of award at grant date | $ 7.7 | |||||
Grant of RSUs (in shares) | 255,930 | |||||
Fair value of shares granted (in usd per share) | $ 30.06 | |||||
2017 Equity Incentive Plan | Class A Common Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available to be issued (in shares) | 7,142,549 | 6,421,442 | ||||
2007 Stock Option Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available to be issued (in shares) | 421,442 | |||||
Number of shares available for grants (in shares) | 0 | |||||
Chief Executive Officer | 2017 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option granted (in shares) | 700,000 | |||||
Exercise price of stock options granted (in usd per share) | $ 33.98 | |||||
Share price (in usd per share) | $ 84.63 | |||||
Value of award at grant date | $ 9.5 | |||||
Service period (in years) | 2 years 7 months 6 days |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used to Estimate Fair Value of Stock Options (Detail) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Risk-free interest rate | 2.10% | 2.10% |
Expected term (in years) | 2 years 7 months 6 days | 2 years 7 months 6 days |
Expected volatility | 55.00% | 55.00% |
Expected dividend yield | 0.00% | 0.00% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of the Stock Option Activity (Detail) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | |
Number of Shares | ||
January 1, 2020 (in shares) | shares | 4,458,611 | |
Granted (in shares) | shares | 0 | |
Exercised (in shares) | shares | (376,967) | |
Expired (in shares) | shares | (1,020) | |
Canceled (in shares) | shares | (34,080) | |
Outstanding at March 31, 2020 (in shares) | shares | 4,046,544 | 4,458,611 |
Exercisable at March 31, 2020 (in shares) | shares | 2,733,704 | |
Weighted Average Exercise Price | ||
January 1, 2020 (in usd per share) | $ / shares | $ 12.30 | |
Granted (in usd per share) | $ / shares | 0 | |
Exercised (in usd per share) | $ / shares | 5.98 | |
Expired (in usd per share) | $ / shares | 12 | |
Canceled (in usd per share) | $ / shares | 11.19 | |
Outstanding at March 31, 2020 (in usd per share) | $ / shares | 12.90 | $ 12.30 |
Exercisable at March 31, 2020 (in usd per share) | $ / shares | $ 8 | |
Weighted Average Remaining Contractual Term (Years) | ||
January 1, 2019 | 5 years 3 months 29 days | 5 years 9 months 18 days |
Outstanding at June 30, 2020 | 5 years 3 months 29 days | 5 years 9 months 18 days |
Exercisable at June 30, 2020 | 5 years 5 months 12 days | |
Aggregate Intrinsic Value (in thousands) | ||
January 1, 2020 | $ | $ 115,501 | |
Exercised | $ | 16,706 | |
Outstanding at March 31, 2020 | $ | 155,170 | $ 115,501 |
Exercisable at March 31, 2020 | $ | $ 118,244 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Restricted Stock Unit Activity (Detail) - Non-vested restricted stock units | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Number of Shares | |
Non-vested outstanding at January 1, 2020 (in shares) | shares | 1,022,835 |
Granted (in shares) | shares | 231,333 |
Vested (in shares) | shares | (59,598) |
Canceled (in shares) | shares | (77,593) |
Non-vested outstanding at March 31, 2020 (in shares) | shares | 1,116,977 |
Weighted Average Grant Date Fair Value | |
Non-vested outstanding at January 1, 2020 (in usd per share) | $ / shares | $ 31.39 |
Fair value of shares granted (in usd per share) | $ / shares | 52.46 |
Vested (in usd per share) | $ / shares | 32.82 |
Canceled (in usd per share) | $ / shares | 32.24 |
Non-vested outstanding at March 31, 2020 (in usd per share) | $ / shares | $ 35.62 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Stock-based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 3,614 | $ 2,689 | $ 7,090 | $ 9,914 |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 2,475 | 1,902 | 4,774 | 8,671 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 1,047 | 695 | 2,131 | 1,059 |
Common stock awards to Board of Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 92 | $ 92 | $ 185 | $ 184 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Stock-based Compensation Expense Included in Condensed Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 3,614 | $ 2,689 | $ 7,090 | $ 9,914 |
Subscriptions | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 229 | 161 | 442 | 315 |
Professional services | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 317 | 244 | 529 | 2,218 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 657 | 814 | 1,410 | 3,195 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 619 | 435 | 1,172 | 2,550 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 1,792 | $ 1,035 | $ 3,537 | $ 1,636 |
Stockholders' Equity (Detail)
Stockholders' Equity (Detail) | 6 Months Ended | |
Jun. 30, 2020vote$ / sharesshares | Dec. 31, 2019$ / sharesshares | |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Common stock, shares issued (in shares) | 37,558,379 | 34,525,386 |
Common stock, shares outstanding (in shares) | 37,558,379 | 34,525,386 |
Number of votes entitled to stockholders per share | vote | 1 | |
Conversion of stock (in shares) | 1 | |
Maximum percentage of aggregate voting power of capital stock which triggers conversion of stock | 10.00% | |
Class B Common Stock | ||
Class of Stock [Line Items] | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Common stock, shares issued (in shares) | 32,281,936 | 32,942,636 |
Common stock, shares outstanding (in shares) | 32,281,936 | 32,942,636 |
Number of votes entitled to stockholders per share | vote | 10 |
Basic and Diluted Loss per Co_3
Basic and Diluted Loss per Common Share (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities outstanding (in shares) | 4,046,544 | 5,046,632 | 4,046,544 | 5,046,632 |
Non-vested restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities outstanding (in shares) | 1,116,127 | 996,049 | 1,116,127 | 996,049 |
Commitments and Contingencies -
Commitments and Contingencies -Narrative (Detail) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Outstanding letters of credit | $ 11.1 | $ 10.5 |
Segment and Geographic Inform_3
Segment and Geographic Information - Summary of Revenues By Geography (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 66,775 | $ 65,275 | $ 145,639 | $ 125,579 |
Domestic | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 42,191 | 43,785 | 94,646 | 84,862 |
International | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 24,584 | $ 21,490 | $ 50,993 | $ 40,717 |
Segment and Geographic Inform_4
Segment and Geographic Information - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Sales Revenue, Net | Geographic Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk, percentage | 12.40% | 12.80% | 12.40% | 11.90% |