Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 23, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2020 | |
Entity File Number | 001-36471 | |
Entity Registrant Name | MobileIron, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 490 East Middlefield Road | |
Entity Address, City or Town | Mountain View | |
Entity Address, State or Province | CA | |
Entity Tax Identification Number | 26-0866846 | |
Entity Address, Postal Zip Code | 94043 | |
City Area Code | 650 | |
Local Phone Number | 919-8100 | |
Title of 12(b) Security | Common Stock, par value $.0001 per share | |
Trading Symbol | MOBL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 118,584,315 | |
Entity Central Index Key | 0001470099 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 89,824,000 | $ 94,415,000 |
Accounts receivable, net of allowance for doubtful accounts of $511 and $412 at September 30, 2020 and December 31, 2019, respectively | 39,120,000 | 58,815,000 |
Deferred commissions - current | 8,019,000 | 9,825,000 |
Prepaid expenses and other current assets | 13,686,000 | 11,965,000 |
TOTAL CURRENT ASSETS | 150,649,000 | 175,020,000 |
Property and equipment-net | 3,346,000 | 4,804,000 |
Operating lease right-of-use assets | 10,346,000 | 13,683,000 |
Deferred commissions - noncurrent | 7,964,000 | 8,077,000 |
Intangible assets | 2,822,000 | 0 |
Goodwill | 8,407,000 | 5,475,000 |
Other assets | 4,110,000 | 5,371,000 |
TOTAL ASSETS | 187,644,000 | 212,430,000 |
Current liabilities: | ||
Accounts payable | 2,002,000 | 1,310,000 |
Accrued expenses | 26,836,000 | 24,792,000 |
Lease liabilities - current | 4,753,000 | 5,664,000 |
Unearned revenue - current | 82,017,000 | 85,153,000 |
Customer arrangements with termination rights | 11,268,000 | 16,130,000 |
TOTAL CURRENT LIABILITIES | 126,876,000 | 133,049,000 |
Long-term liabilities: | ||
Lease liabilities - noncurrent | 6,680,000 | 10,088,000 |
Unearned revenue - noncurrent | 25,874,000 | 33,058,000 |
Other long-term liabilities | 122,000 | 237,000 |
TOTAL LIABILITIES | 159,552,000 | 176,432,000 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value, 300,000,000 shares authorized, 121,730,409 shares issued and 118,560,029 shares outstanding and 115,685,153 shares issued and 112,725,391 shares outstanding at September 30, 2020 and December 31, 2019, respectively | 12,000 | 11,000 |
Additional paid-in capital | 534,259,000 | 504,041,000 |
Treasury stock | (15,825,000) | (15,141,000) |
Accumulated deficit | (490,354,000) | (452,913,000) |
TOTAL STOCKHOLDERS' EQUITY | 28,092,000 | 35,998,000 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 187,644,000 | $ 212,430,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 511,000 | $ 412,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 121,730,409 | 115,685,153 |
Common stock, shares outstanding | 118,560,029 | 112,725,391 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | ||||
Revenue | $ 49,999 | $ 52,201 | $ 158,622 | $ 151,148 |
Cost of revenue | ||||
Restructuring expense | 300 | |||
Total cost of revenue | 12,121 | 10,459 | 35,397 | 31,469 |
Gross profit | 37,878 | 41,742 | 123,225 | 119,679 |
Operating expenses: | ||||
Research and development | 20,259 | 19,072 | 60,115 | 60,889 |
Sales and marketing | 23,597 | 23,577 | 72,575 | 74,099 |
General and administrative | 9,949 | 6,932 | 26,069 | 22,477 |
Restructuring expense | 579 | 2,758 | ||
Total operating expenses | 53,805 | 49,581 | 159,338 | 160,223 |
Operating loss | (15,927) | (7,839) | (36,113) | (40,544) |
Other income (expense) - net | 263 | 35 | 183 | 987 |
Loss before income taxes | (15,664) | (7,804) | (35,930) | (39,557) |
Income tax expense | 608 | 399 | 1,511 | 1,335 |
Net loss | $ (16,272) | $ (8,203) | $ (37,441) | $ (40,892) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.14) | $ (0.07) | $ (0.32) | $ (0.37) |
Weighted-average shares used to compute net loss per share, basic and diluted (in shares) | 117,703 | 110,831 | 116,192 | 109,147 |
Cloud services | ||||
Revenue | ||||
Revenue | $ 20,890 | $ 17,591 | $ 59,073 | $ 49,163 |
Cost of revenue | ||||
Cost of revenue | 415 | 436 | 1,461 | 1,423 |
License | ||||
Revenue | ||||
Revenue | 6,465 | 12,216 | 32,553 | 35,814 |
Cost of revenue | ||||
Cost of revenue | 6,792 | 5,557 | 19,673 | 15,413 |
Software support and services | ||||
Revenue | ||||
Revenue | 22,644 | 22,394 | 66,996 | 66,171 |
Cost of revenue | ||||
Cost of revenue | $ 4,914 | $ 4,466 | $ 14,263 | $ 14,333 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Total |
BALANCE at Dec. 31, 2018 | $ 11 | $ 462,004 | $ (3,831) | $ (404,067) | $ 54,117 |
BALANCE (in shares) at Dec. 31, 2018 | 106,206,545 | ||||
Issuance of common stock for stock option exercises | 5,481 | 5,481 | |||
Issuance of common stock for stock option exercises (in shares) | 1,337,433 | ||||
Issuance of common stock pursuant to the Employee Stock Purchase Plan | 4,132 | 4,132 | |||
Issuance of common stock pursuant to the Employee Stock Purchase Plan (in shares) | 1,048,302 | ||||
Issuance of common stock pursuant to the Employee Stock-Settled Bonus Plans | 10,485 | 10,485 | |||
Issuance of common stock pursuant to the Employee Stock-Settled Bonus Plans (in shares) | 2,170,855 | ||||
Shares withheld for net settlement of equity awards | (5,492) | (5,492) | |||
Shares withheld for net settlement of equity awards (in shares) | (1,064,577) | ||||
Repurchase of common stock | (8,624) | (8,624) | |||
Repurchase of common stock (in shares) | (1,572,030) | ||||
Vesting of restricted stock units (in shares) | 3,904,145 | ||||
Stock-based compensation | 20,575 | 20,575 | |||
Net loss | (40,892) | (40,892) | |||
BALANCE at Sep. 30, 2019 | $ 11 | 497,185 | (12,455) | (444,959) | 39,782 |
BALANCE (in shares) at Sep. 30, 2019 | 112,030,673 | ||||
BALANCE at Jun. 30, 2019 | $ 11 | 484,593 | (10,422) | (436,756) | 37,426 |
BALANCE (in shares) at Jun. 30, 2019 | 109,770,021 | ||||
Issuance of common stock for stock option exercises | 3,761 | 3,761 | |||
Issuance of common stock for stock option exercises (in shares) | 780,029 | ||||
Issuance of common stock pursuant to the Employee Stock Purchase Plan | 2,085 | 2,085 | |||
Issuance of common stock pursuant to the Employee Stock Purchase Plan (in shares) | 530,190 | ||||
Shares withheld for net settlement of equity awards | (707) | (707) | |||
Shares withheld for net settlement of equity awards (in shares) | (102,535) | ||||
Repurchase of common stock | (2,033) | (2,033) | |||
Repurchase of common stock (in shares) | (290,844) | ||||
Vesting of restricted stock units (in shares) | 1,343,812 | ||||
Stock-based compensation | 7,453 | 7,453 | |||
Net loss | (8,203) | (8,203) | |||
BALANCE at Sep. 30, 2019 | $ 11 | 497,185 | (12,455) | (444,959) | 39,782 |
BALANCE (in shares) at Sep. 30, 2019 | 112,030,673 | ||||
BALANCE at Dec. 31, 2019 | $ 11 | 504,041 | (15,141) | (452,913) | 35,998 |
BALANCE (in shares) at Dec. 31, 2019 | 112,725,391 | ||||
Issuance of common stock for stock option exercises | 1,823 | $ 1,823 | |||
Issuance of common stock for stock option exercises (in shares) | 443,674 | 443,674 | |||
Issuance of common stock pursuant to the Employee Stock Purchase Plan | 4,282 | $ 4,282 | |||
Issuance of common stock pursuant to the Employee Stock Purchase Plan (in shares) | 1,120,684 | ||||
Issuance of common stock pursuant to the Employee Stock-Settled Bonus Plans | $ 1 | 7,633 | 7,634 | ||
Issuance of common stock pursuant to the Employee Stock-Settled Bonus Plans (in shares) | 1,730,682 | ||||
Shares withheld for net settlement of equity awards | (6,484) | $ (6,484) | |||
Shares withheld for net settlement of equity awards (in shares) | (1,305,947) | (1,305,947) | |||
Repurchase of common stock | (684) | $ (684) | |||
Repurchase of common stock (in shares) | (210,618) | (210,618) | |||
Vesting of restricted stock units (in shares) | 4,056,163 | ||||
Stock-based compensation | 22,964 | $ 22,964 | |||
Net loss | (37,441) | (37,441) | |||
BALANCE at Sep. 30, 2020 | $ 12 | 534,259 | (15,825) | (490,354) | 28,092 |
BALANCE (in shares) at Sep. 30, 2020 | 118,560,029 | ||||
BALANCE at Jun. 30, 2020 | $ 12 | 525,383 | (15,825) | (474,082) | 35,488 |
BALANCE (in shares) at Jun. 30, 2020 | 116,843,504 | ||||
Issuance of common stock for stock option exercises | 1,324 | 1,324 | |||
Issuance of common stock for stock option exercises (in shares) | 301,374 | ||||
Issuance of common stock pursuant to the Employee Stock Purchase Plan | 2,131 | 2,131 | |||
Issuance of common stock pursuant to the Employee Stock Purchase Plan (in shares) | 558,451 | ||||
Shares withheld for net settlement of equity awards | (2,942) | (2,942) | |||
Shares withheld for net settlement of equity awards (in shares) | (490,420) | ||||
Vesting of restricted stock units (in shares) | 1,347,120 | ||||
Stock-based compensation | 8,363 | 8,363 | |||
Net loss | (16,272) | (16,272) | |||
BALANCE at Sep. 30, 2020 | $ 12 | $ 534,259 | $ (15,825) | $ (490,354) | $ 28,092 |
BALANCE (in shares) at Sep. 30, 2020 | 118,560,029 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (37,441,000) | $ (40,892,000) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Stock-based compensation expense | 23,723,000 | 27,159,000 |
Depreciation | 2,275,000 | 2,587,000 |
Amortization of intangible assets | 302,000 | 0 |
Provision for doubtful accounts | 119,000 | |
Accretion of premium of investment securities | (21,000) | |
Impairment of right-of-use assets | 1,328,000 | |
Loss on disposal of fixed assets | 170,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 19,578,000 | 16,429,000 |
Deferred commissions | 1,919,000 | 220,000 |
Other current and noncurrent assets | 3,249,000 | (2,372,000) |
Accounts payable | 615,000 | 637,000 |
Unearned revenue | (10,595,000) | 964,000 |
Customer arrangements with termination rights | (4,862,000) | (3,121,000) |
Accrued expenses and other long-term liabilities | 5,702,000 | (5,504,000) |
Net cash provided by (used in) operating activities | 4,584,000 | (2,416,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (796,000) | (1,233,000) |
Purchase of incapptic, net of cash acquired | (5,668,000) | |
Proceeds from maturities of investment securities | 3,250,000 | |
Purchase of investment securities | (4,126,000) | |
Net cash used in investing activities | (6,464,000) | (2,109,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from Employee Stock Purchase Plan | 2,977,000 | 3,100,000 |
Taxes paid for net settlement of equity awards | (6,485,000) | (5,492,000) |
Proceeds from exercise of stock options | 1,829,000 | 5,481,000 |
Repurchase of common stock | (684,000) | (8,624,000) |
Net cash used in financing activities | (2,363,000) | (5,535,000) |
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (4,243,000) | (10,060,000) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-Beginning of period | 94,415,000 | 104,613,000 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH-End of period | 90,172,000 | 94,553,000 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid for income taxes | 1,353,000 | 1,280,000 |
Lease payments for amounts included in the measurement of lease liabilities | 4,865,000 | 5,540,000 |
SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING ACTIVITIES: | ||
Value of shares issued under Bonus Plans | 4,765,000 | 6,374,000 |
Value of shares issued under the Employee Stock Purchase Plan | 4,282,000 | 4,132,000 |
Unpaid property and equipment purchases | $ 21,000 | $ 155,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | Sep. 30, 2020USD ($) |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE BALANCE SHEETS | |
Cash and cash equivalents | $ 89,824 |
Restricted cash included within Other Assets | 348 |
Total cash, cash equivalents and restricted cash | $ 90,172 |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Description of Business and Significant Accounting Policies | |
Description of Business and Significant Accounting Policies | 1. Description of Business and Significant Accounting Policies Description of Business MobileIron, Inc. and its wholly owned subsidiaries, collectively, the “Company”, “we”, “us” or “our”, provides a purpose-built mobile IT platform that enables enterprises to manage and secure mobile applications, content and devices while providing their employees with device choice, privacy and a native user experience. We were incorporated in Delaware in July 2007 and are headquartered in Mountain View, California, with additional sales and support presence in North America, Europe, the Middle East, Asia and Australia and employees in India primarily focused on research and development. Pending Acquisition by Ivanti, Inc. On September 26, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ivanti, Inc., a Delaware corporation (“Parent”), and Oahu Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”). The Merger Agreement provides that, subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger and becoming a wholly owned subsidiary of Parent. Under the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of our common stock that is outstanding immediately prior to the Effective Time (other than shares of common stock (1) held by the Company as treasury stock, (2) owned by Parent or Merger Sub, (3) owned by any direct or indirect wholly owned subsidiary of Parent or Merger Sub or (4) held by stockholders who have properly and validly exercised their statutory rights of appraisal under Section 262 of the Delaware General Corporation Law (the “DGCL”)) will be canceled and converted into the right to receive cash in the amount equal to $7.05, without interest (the “Per Share Merger Consideration”). At the Effective Time, each outstanding vested restricted stock unit (“RSU”), performance stock unit (“PSU”) and option granted by the Company shall be cancelled and converted into the right to receive cash equal to (A) the aggregate number of shares of the Company’s common stock subject to such RSU, PSU or option, as applicable, multiplied by (B) the Per Share Merger Consideration (less the exercise price in the case of vested options) (the “Award Consideration”). Each outstanding RSU, PSU or option that is not vested but that is subject to acceleration shall be cancelled and converted into the right to receive an amount in cash equal to the Award Consideration pursuant to the terms of the Merger Agreement, a portion of which will be paid after the Effective Time in accordance with the applicable award agreement. Each outstanding RSU, PSU or option that is not vested and that does not automatically accelerate at closing of the Merger will be cancelled without consideration. Pursuant to the Merger Agreement, the Company has acted to provide, among other things, that (1) each individual participating in an offering period under the Company’s 2014 Employee Stock Purchase Plan (the “ESPP”) in progress on the date of the Merger Agreement will not be permitted to (A) increase his or her payroll contribution rate pursuant to the ESPP or (B) make separate non-payroll contributions to the ESPP on or following the date of the Merger Agreement, except as may be required by applicable law; (2) no individual who is not participating in the ESPP will be allowed to commence participation in the ESPP; and (3) any offering period that would otherwise be outstanding at the Effective Time will terminate no later than five days prior to the date on which the Effective Time occurs. The Company will make any pro rata adjustments as may be necessary to reflect the shortened offering period and will cause the exercise of each outstanding purchase right pursuant to the ESPP no later than one The Company, and Parent and Merger Sub, have made certain representations, warranties and covenants in the Merger Agreement, including, among others, covenants by the Company to conduct its business in the ordinary course during the period between execution of the Merger Agreement and closing of the Merger. Pursuant to the terms of the Merger Agreement, the Company is subject to restrictions on its ability to solicit alternative acquisition proposals and to provide information to, and engage in discussion with, third parties regarding such proposals, except under limited circumstances. In the event the Merger Agreement is terminated by the Company to enter into a Superior Proposal, as defined in the Merger Agreement, the Company will be required to pay Parent a termination fee of $30.45 million. Subject to certain exceptions, each of the parties has agreed to use its reasonable best efforts to take or cause to be taken actions necessary to consummate the Merger, including with respect to obtaining required government approvals. The Merger Agreement also contains certain termination rights for both the Company and Parent. Pursuant to the terms of the Merger Agreement, if the Company terminates the Merger Agreement two , Parent will pay the Company $65.25 million. The Merger Agreement requires the Company to convene a special meeting of stockholders for purposes of obtaining approval of the adoption of the Merger Agreement. Commencing on October 26, 2020, the Company noticed and mailed a definitive proxy statement for a special meeting of the Company’s stockholders to be held on November 24, 2020. The Merger is subject to the satisfaction or waiver of certain closing conditions including, among other things, (1) the affirmative vote of the holders of a majority of the voting power of the outstanding shares of the Company’s common stock entitled to vote on the adoption of the Merger Agreement, (2) the expiration or termination of the waiting period under Antitrust Laws (as defined in the Merger Agreement), Parent furnished the Company with copies of equity and debt financing commitments obtained by Parent, the proceeds of which will provide for funds to consummate the transactions contemplated by the Merger Agreement. The consummation of the Merger is not subject to a financing condition. COVID-19 Pandemic In the first quarter of 2020, the United States and other countries began shelter-in-place mandates and began to close many businesses as a result of the COVID-19 virus. The World Health Organization characterized COVID-19 as a pandemic and the President of the United States declared the COVID-19 outbreak a national emergency. Since then, the COVID-19 pandemic has rapidly spread across the globe and has already resulted in significant volatility, uncertainty and economic disruption. The future impact of the pandemic and any resulting economic impact are largely unknown and rapidly evolving. It is difficult at this time to predict the amount of the financial impact that COVID-19 will have on the Company’s business, financial position and operating results in future periods due to numerous uncertainties. The Company is closely monitoring the impact of the pandemic on all aspects of its business. Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019 have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial statements and pursuant to the rules and regulations of the SEC, and include the accounts of our wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures in this Quarterly Report on Form 10-Q normally included in annual financial statements prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair presentation of our balance sheet as of September 30, 2020, our operating results for the three and nine months ended September 30, 2020 and 2019, and our cash flows for the nine months ended September 30, 2020 and 2019. Our operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. The condensed consolidated balance sheet as of December 31, 2019 has been derived from the audited consolidated financial statements as of that date, but does not include all the footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with our audited financial statements and related notes for the year ended December 31, 2019, included in our Annual Report on Form 10-K for the year ended December 31, 2019 previously filed with the SEC. Foreign Currency Translation Our reporting currency is the U.S. dollar. The functional currency of all our international operations is the U.S. dollar. All monetary asset and liability accounts are translated into U.S. dollars at the period-end rate, nonmonetary assets and liabilities are translated at historical exchange rates, and revenue and expenses are translated at the weighted-average exchange rates in effect during the period. Translation adjustments are recorded as foreign currency gains (losses) in the condensed consolidated statements of operations. We recognized a foreign currency gain of $236,000 and a loss of $420,000 in the three months ended September 30, 2020 and 2019, respectively, and we recognized a foreign currency loss of $189,000 and $612,000 in the nine months ended September 30, 2020 and 2019, respectively, in other income (expense)—net in our condensed consolidated statements of operations. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates include, but are not limited to, revenue recognition, deferred commissions and commissions expense, stock-based compensation, intangible assets, goodwill, and accounting for income taxes. Actual results could differ from those estimates. Concentrations of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk consist of cash, money market funds and fixed income investments. Although we deposit our cash with multiple financial institutions, our deposits, at times, exceed federally insured limits. We invest in fixed income securities that are of high-credit quality. Substantially all of our money market funds, or $51.8 million, are held in two funds that are rated “AAA.” We generally do not require collateral or other security in support of accounts receivable. Allowances are provided for individual accounts receivable when we become aware of a customer’s inability to meet its financial obligations, such as in the case of bankruptcy, deterioration of the customer’s operating results, or change in financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. We also consider broader factors in evaluating the sufficiency of our allowances for doubtful accounts, including the length of time receivables are past due, significant one-time events, overall or industry-specific economic conditions, and historical experience. We had an allowance for doubtful accounts of $511,000 and $412,000 at September 30, 2020 and December 31, 2019, respectively. One reseller accounted for 10% of total revenue for both the three and nine months ended September 30, 2019. No resellers or end-user customers accounted for 10% or more of our total revenue in the three and nine months ended September 30, 2020 and no other reseller or end-user customer accounted for 10% or more of our total revenue in the three and nine months ended September 30, 2019. Two resellers accounted for 18% and 12%, respectively, of net accounts receivable at September 30, 2020. No reseller or end-user customer accounted for 10% or more of net accounts receivable as of December 31, 2019. Segments We have one reportable segment, software and services to manage and secure mobile devices, applications and content. Summary of Significant Accounting Policies Revenue Recognition Revenue Presentation Cloud services include sales of cloud-based solutions that allow customers to use hosted software over a contract period without taking possession of our software and are typically provided on a subscription or usage basis. License revenue includes sales of perpetual software licenses, software licenses sold as part of on-premise term subscriptions, and appliances. Software support and services revenue includes sales of software support sold as part of on-premise term subscriptions, software support for perpetual licenses, and professional services. Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Nature of Products and Services Cloud services, which allow customers to use hosted software over a contract period without taking possession of our software, are provided on a subscription or usage basis. Revenue related to cloud services provided on a subscription basis is recognized ratably over the contract period and revenue related to cloud services based on usage is generally recognized as the usage occurs. Licenses for on-premise software provide the customer with a right to use the software as it exists when made available to the customer. Customers may purchase on-premise software licenses as perpetual licenses or as part of subscriptions. On-premise licenses are considered distinct performance obligations and revenue from the licenses is recognized upfront when the software is made available to the customer. In the case of our on-premise subscriptions, the license portion of revenue is recognized up-front, and the software support and services portion is recognized ratably. Software support and services convey rights to the upgrades released over the contract period and provide support and tools to help customers deploy and use our products more efficiently. Revenue allocated to software support and services is generally recognized ratably over the contract period as customers simultaneously consume and receive benefits, given that the software support and services comprises a distinct performance obligation that is satisfied over time. On-premise subscriptions and software support and services occasionally contain termination rights. We recognize revenue from those arrangements, including the distinct licenses contained therein, as the termination rights for the performance obligation expire. See also Unearned Revenue and Customer Arrangements with Termination Rights Professional services include consulting, deployment and training services. Our professional services represent distinct performance obligations as our customers benefit from the services separately or together with other readily available resources. Professional services revenue is recognized as services are delivered. Appliance revenue was less than 1% of total revenue for all periods presented and is included as a component of license revenue within the consolidated statements of operations. Refer to Note 15 – Segment and Disaggregated Revenue Information for further information. Significant Judgments Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is required to determine whether a software license is considered distinct and accounted for separately, or not distinct and accounted for together with the software support and services and recognized over time. Judgment is required to determine the standalone selling price (“SSP”) for each distinct performance obligation. We use a range of amounts to estimate the SSP for items that are not sold separately, including on-premises licenses sold with software support and services. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include other observable inputs. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customer classes and circumstances. In these instances, we may use information such as the size and type of customer in determining the SSP. Contract Balances Timing of revenue recognition may differ from the timing of invoicing customers. We record a receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue will be recognized after invoicing. For multi-year agreements, we either invoice our customer in full at the inception of the contract or annually at the beginning of each annual period. We record an unbilled receivable related to revenue recognized for multi-year on-premise licenses invoiced annually when we have an unconditional right to invoice and receive payment in the future for those licenses or when we have the right to invoice future monthly periods under committed monthly recurring charge (“MRC”) agreements. The majority of our MRC agreements are for a month to month term (“non-committed”) or usage-based. Payment terms and conditions vary by contract type, although terms generally include a requirement to pay within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. This includes invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period or multi-year on-premise licenses that are invoiced annually with a portion of the revenue recognized upfront. As of September 30, 2020 and December 31, 2019, the balance of accounts receivable, net of the allowance for doubtful accounts, included $2.3 million and $2.0 million, respectively, of unbilled receivables from upfront recognition of revenue for certain multi-period on-premises software subscriptions that include both distinct software licenses and software support and services. As of September 30, 2020 and December 31, 2019, unbilled receivables included in other long-term assets on our condensed consolidated balance sheets were $726,000 and $795,000, respectively. Unearned Revenue and Customer Arrangements with Termination Rights We generally invoice our customers upfront for subscriptions and software support and services associated with perpetual licenses. Unearned revenue from those upfront billings is comprised of unearned revenue from cloud-based subscriptions, software support and services for on-premise subscriptions, software support and services associated with perpetual licenses and professional services to be performed in the future. Because some of our arrangements with customers contain termination rights, the arrangements do not meet the definition of a contract under Accounting Standard Codification, or ASC, Topic 606, Revenue Recognition from Contracts with Customers, or ASC 606, and are not recorded as unearned revenue and instead are recorded as “customer arrangements with termination rights” on our condensed consolidated balance sheets. Refer to Note 14 – Unearned Revenue for further information on unearned revenue, changes in unearned revenue during the period, and customer arrangements with termination rights. Deferred Commissions We recognize an asset for the incremental costs of obtaining a contract with a customer. We have determined that certain sales incentive programs meet the requirements to be capitalized and we include those costs in current and non-current deferred commissions on our consolidated balance sheets. Deferred commissions are amortized over the period commensurate with revenue recognition. Changes in deferred commissions were as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Balance, beginning of the period $ 16,736 $ 17,727 $ 17,902 $ 17,331 Deferral of commissions earned 3,519 4,271 11,967 12,862 Recognition of commission expense (4,272) (4,867) (13,846) (12,844) Impairment of deferred commissions — (21) (40) (239) Balance, end of the period $ 15,983 $ 17,110 $ 15,983 $ 17,110 Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of September 30, 2020 and December 31, 2019, cash and cash equivalents consist of cash deposited with banks and money market funds. Comprehensive Loss Comprehensive loss includes all changes in equity (net assets) during a period from non-owner sources. For the three and nine months ended September 30, 2020 and 2019, there were no differences between net loss and comprehensive loss. Therefore, the consolidated statements of comprehensive loss have been omitted. Net Loss per Share of Common Stock Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period after repurchases but without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, unvested restricted stock and stock options are considered to be potentially dilutive securities. Because we have reported a net loss for the three and nine months ended September 30, 2020 and 2019, the number of shares used to calculate diluted net loss per common share is the same as the number of shares used to calculate basic net loss per common share for those periods presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation. Software Development Costs Incurred in Connection with Software to be Sold or Marketed The costs to develop new software products and enhancements to existing software products are expensed as incurred until technological feasibility has been established. We consider technological feasibility to have occurred when all planning, designing, coding and testing have been completed according to design specifications. Once technological feasibility is established, any additional costs would be capitalized. We believe our current process for developing software is essentially completed concurrent with the establishment of technological feasibility, and accordingly, no costs have been capitalized. Internal Use Software We capitalize costs incurred during the application development stage related to our internally used software. Such costs are primarily incurred by third-party vendors and consultants. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Amounts capitalized in all periods presented were not significant. All software development costs incurred in connection with our cloud offering, or SaaS, are also sold or marketed to partners or end customers, therefore we start capitalizing costs when technological feasibility is achieved. No costs were capitalized in any periods presented as we believe that our current process for developing software is essentially completed concurrent with the establishment of technological feasibility. Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the property and equipment, determined to be three years for computers and equipment and software, five years for furniture and fixtures, and the lesser of the remaining lease term or estimated useful life for leasehold improvements. Expenditures for repairs and software support are charged to expense as incurred. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is reflected as operating expenses in the consolidated statements of operations. Leases We determine if an arrangement is a lease conveying the right to control identified property, plant, or equipment and whether the lease is operating or financing at the lease’s inception. We have determined that all of our leases are operating leases. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments under the lease arrangements. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments. The operating lease ROU asset also includes any advance lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. We have adopted the practical expedient as permitted by the new leasing standard to not recognize lease assets and lease liabilities for leases with a term of 12 months or less. Our leases generally separate lease components from nonlease components. However, where lease and nonlease components are combined in our lease arrangements, we have adopted the practical expedient to not separate the lease from the nonlease components. Refer to Note 13 - Leases for further information about our leases. Goodwill and Intangible Assets We record the excess of the acquisition purchase price over the fair value of the tangible and identifiable intangible assets acquired as goodwill. We perform an impairment test of our goodwill in the third quarter of our fiscal year, or more frequently if indicators of potential impairment arise. We have a single reporting unit and consequently evaluate goodwill for impairment based on an evaluation of the fair value of the Company as a whole. We record purchased intangible assets at their respective estimated fair values at the date of acquisition. Purchased intangible assets are being amortized using the straight-line method over their estimated useful lives, which range from three Long-Lived Assets with Finite Lives Long-lived assets are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. We evaluate the recoverability of each of our long-lived assets, including property and equipment and purchased intangible assets, by comparison of its carrying amount to the future discounted cash flows we expect the asset to generate. If we consider the asset to be impaired, we measure the amount of any impairment as the difference between the carrying amount and the fair value of the impaired asset. Stock-Based Compensation We use the estimated grant-date fair value method of accounting in accordance with ASC Topic 718 Compensation—Stock Compensation We recognize compensation costs for awards with service and performance vesting conditions and for our ESPP on an accelerated method over the requisite service period of the award. For stock options or restricted stock unit grants with no performance condition, we recognize compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of four years. Research and Development Because we estimate that our software is essentially completed concurrent with the establishment of technological feasibility, we have charged all research and development to expense as incurred. Advertising Advertising costs are expensed and included in sales and marketing expense when incurred. Advertising expense for the three and nine months ended September 30, 2020 and 2019 was not significant. Income Taxes We account for income taxes in accordance with ASC Topic 740, Income Taxes We use a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. A tax position is recognized when it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation processes. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority. The standard also provides guidance on derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure and transition. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating loss (“NOL”) carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. We are currently evaluating the impact of the CARES Act, but at present do not expect that the NOL carryback provision of the CARES Act would result in a cash benefit to us. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. Recently Adopted Accounting Guidance In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments,” which introduces a model based on expected losses to estimate credit losses for most financial assets and certain other instruments. In addition, for available-for-sale debt securities with unrealized losses, the losses are recognized as allowances rather than reductions in the amortized cost of the securities. The standard was effective for annual reporting periods beginning after December 15, 2019. Entities apply the standard’s provisions by recording a cumulative-effect adjustment to retained earnings. We adopted ASU 2016-13 effective January 1, 2020. The adoption of this ASU did not have a material impact on our consolidated balance sheet, results of operations, cash flows and disclosures for the three and nine months ended September 30, 2020. In August 2018, the |
Significant Balance Sheet Compo
Significant Balance Sheet Components | 9 Months Ended |
Sep. 30, 2020 | |
Significant Balance Sheet Components | |
Significant Balance Sheet Components | 2. Significant Balance Sheet Components Accounts Receivable, Net September 30, 2020 December 31, 2019 Accounts receivable - billed $ 37,331 $ 57,184 Accounts receivable - unbilled 2,300 2,043 Allowance for doubtful accounts (511) (412) Accounts receivable, net $ 39,120 $ 58,815 Property and Equipment September 30, 2020 December 31, 2019 Computers and appliances $ 13,670 $ 13,300 Purchased software 4,252 4,235 Furniture and fixtures 1,745 1,745 Leasehold improvements 3,834 3,403 Total property and equipment 23,501 22,683 Accumulated depreciation and amortization (20,155) (17,879) Total property and equipment—net $ 3,346 $ 4,804 Prepaid Expenses and Other Current Assets and Other Assets Prepaid expenses and other current assets at September 30, 2020 and December 31, 2019 included $7.1 million and $6.3 million of prepaid royalties, respectively. Other assets at September 30, 2020 and December 31, 2019 included $1.5 million and $3.0 million of prepaid royalties, respectively. The prepaid royalties were primarily associated with MobileIron Threat Defense. At September 30, 2020, $348,000 of restricted cash was included in Other Assets. The cash was restricted as part of a bank guarantee drawn in favor of India taxing authorities for an ongoing corporate income tax audit. Accrued Expenses September 30, 2020 December 31, 2019 Accrued commissions $ 3,450 $ 4,810 Accrued bonus 9,249 6,875 Employee Stock Purchase Plan liability 882 2,187 Other accrued payroll-related expenses 3,748 2,839 Accrued royalties 2,758 2,386 Other accrued liabilities 6,749 5,695 Total accrued expenses $ 26,836 $ 24,792 |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurement | |
Fair Value Measurement | 3. Fair Value Measurement With the exception of held-to-maturity fixed income investments, we report financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis in accordance with ASC 820, Fair Value Measurements. ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. ASC 820 also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. ASC 820 establishes and prioritizes three levels of inputs that may be used to measure fair value: — Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. — Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments. — Level 3—Inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. Our financial assets that are carried at fair value include cash and money market funds. We had no financial liabilities, or nonfinancial assets and liabilities that were required to be measured at fair value on a recurring basis, or that were measured at fair value as of September 30, 2020 or December 31, 2019. Our financial instruments measured at fair value as of September 30, 2020 and December 31, 2019 were as follows: As of September 30, 2020 (in thousands) Level 1 Level 2 Level 3 Total Money market funds $ 51,821 $ — $ — $ 51,821 Total $ 51,821 $ — $ — $ 51,821 As of December 31, 2019 (in thousands) Level 1 Level 2 Level 3 Total Money market funds $ 82,411 $ — $ — $ 82,411 Total $ 82,411 $ — $ — $ 82,411 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Acquisitions | |
Acquisitions | 4. Acquisitions On April 24, 2020, we acquired all of the issued and outstanding capital stock of incapptic Connect GmbH (“incapptic”), a privately held company based in Germany that provides automated mobile application distribution software, for $5.9 million in cash. Our unified endpoint management platform integrates with the incapptic software to help customers develop, deploy and secure in-house business applications. Of the $5.9 million paid, $1.1 million was paid to an escrow account and will be distributed to former incapptic shareholders within 24 months , less any amounts used to satisfy any claims for indemnification that we may make for certain breaches of representations, warranties and covenants. Transaction costs associated with the acquisition were $347,000 in the nine months ended September 30, 2020 and are included in general and administrative expenses. No further transaction costs associated with the acquisition were incurred in the three months ended September 30, 2020. We accounted for the incapptic acquisition as a business combination. We allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. We engaged an independent third-party valuation firm to assist us in the determination of the value of the purchased intangible assets. The methodologies used to value the intangible assets were relief from royalty for tradename, multi-period excess earnings for contractual customer relationships and the cost approach for developed technology. The excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill, which will not be amortized and is not deductible for tax purposes. The goodwill generated from the business combination was primarily related to the value placed on expected synergies and the value of the acquired workforce. Although we believe the purchase price allocation is substantially complete, the finalization of certain liabilities, or tax-related issues, among other things, could result in a future adjustment to the purchase price allocation. The preliminary purchase price allocation is as follows (in thousands): Intangible assets: Tradename $ 163 Contractual customer relationship 1,415 Developed technology 1,546 Goodwill 2,932 Cash 279 Unearned revenue (275) Other assets and liabilities, net (113) Net assets acquired $ 5,947 The tradename, contractual customer relationship and developed technology intangible assets are being amortized on a straight-line basis over estimated useful lives of 3, 5, and 4 years, respectively. Incapptic has been included in our condensed consolidated results of operations since the date of acquisition. Pro forma results of operations for the acquisition have not been presented because the acquisition was not material to our condensed consolidated statement of operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets The following table reflects intangible assets subject to amortization as of September 30, 2020: September 30, 2020 Gross Carrying Accumulated Net Book Amount Amortization Impairment Value Tradename $ 163 $ (23) — $ 140 Contractual customer relationship 1,415 (118) — 1,297 Developed technology 1,546 (161) — 1,385 Total $ 3,124 $ (302) $ — $ 2,822 The net book value of intangible assets subject to amortization was zero at December 31, 2019. We recorded amortization of intangible assets of $178,000 and $302,000 in the three and nine months ended September 30, 2020. There was no amortization of intangible assets for the three and nine months ended September 30, 2019. The weighted average remaining life of our intangible assets on September 30, 2020 was 4.1 years. As of September 30, 2020, estimated remaining intangible asset amortization expense is as follows (in thousands): Year 2020 $ 181 2021 724 2022 724 2023 687 2024 412 Thereafter 94 Total $ 2,822 At September 30, 2020 and December 31, 2019, the carrying value of goodwill was as follows (in thousands): Balance, December 31, 2019 $ 5,475 Additions 2,932 Balance, September 30, 2020 $ 8,407 We perform an impairment test of our goodwill in the third quarter of our fiscal year, or more frequently if indicators of potential impairment arise. We determined that goodwill was not impaired based on the impairment test completed in the third quarter of 2020. |
Restructuring Expense
Restructuring Expense | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring Expense | |
Restructuring Expense | 6. Restructuring Expense We implemented business restructurings in the three months ended March 31, 2020 and the three and nine months ended September 30, 2019 to reduce our cost structure through workforce reductions. The three and nine months ended September 30, 2019 also included charges for the exit of an office building. The following table summarizes the activity in accrued restructuring expense, included in accrued expenses, for the three and nine months ended September 30, 2020 (in thousands): Severance and Other Restructuring Costs Three Months Ended Nine Months Ended September 30, 2020 Accrued restructuring, beginning of the period $ 419 $ 282 Provision for restructuring expense — 579 Cash payments (121) (563) Accrued restructuring, end of the period $ 298 $ 298 We expect to pay the remaining accrued restructuring balance by June 30, 2021. |
Line of Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2020 | |
Line of Credit | |
Line of Credit | 7. Line of Credit We have a $20.0 million revolving line of credit with a financial institution that can be used to borrow for working capital and general business requirements and issue letters of credit. Amounts borrowed accrue interest at a floating per annum rate equal to the greater of (a) the prime rate or 3.25% plus 0.25% or (b) LIBOR plus 3 percent. A default interest rate shall apply during an event of default at a rate per annum equal to 5% above the otherwise applicable interest rate. The line of credit is collateralized by substantially all of our assets, except intellectual property, and requires us to comply with working capital covenants, including limitations on indebtedness and restrictions on dividend distributions, among others, but does allow for the repurchase of a limited amount of our common stock. We are required to maintain an adjusted quick ratio (defined as the ratio of eligible cash and cash equivalents plus accounts receivable to current liabilities minus deferred revenue and customer arrangements with termination rights) of at least 1.25. In May 2015, we issued a letter of credit for $1.5 million as a security deposit for a new lease for office space in a building in Mountain View, California, and in November 2017 we issued a bank guarantee to a customer of approximately $3.0 million that can be drawn if we become insolvent or bankrupt. The issuances of the letter of credit and bank guarantee reduced the borrowing capacity under our line of credit to approximately $15.5 million. In June 2020, we amended our revolving line of credit and extended its maturity date to June 2023. There were no other outstanding amounts under the line of credit at September 30, 2020 or December 31, 2019 and we were in compliance with all financial and non-financial covenants. |
Preferred Stock
Preferred Stock | 9 Months Ended |
Sep. 30, 2020 | |
Preferred Stock | |
Preferred Stock | 8. Preferred Stock We were authorized to issue up to 10,000,000 shares of convertible preferred stock as of September 30, 2020 and December 31, 2019. No shares of convertible preferred stock were issued and outstanding as of September 30, 2020 or December 31, 2019. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2020 | |
Common Stock | |
Common Stock | 9. Common Stock We were authorized to issue 300,000,000 shares of common stock with a par value of $0.0001 per share as of September 30, 2020 and December 31, 2019. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends out of funds legally available therefore, when and if declared by the board of directors, subject to the approval and priority rights of holders of all classes of preferred stock outstanding. As of September 30, 2020 and December 31, 2019, our shares of common stock reserved for issuance were as follows: September 30, December 31, 2020 2019 Options outstanding 2,293,276 2,898,977 Unvested restricted stock units outstanding 12,730,746 12,639,066 Unvested performance stock units outstanding 835,000 — Shares available for grant under the 2014 Equity Incentive Plan and 2015 Inducement Plan 1,692,599 1,301,881 Shares available for purchase under the Employee Stock Purchase Plan 385,094 378,525 Total 17,936,715 17,218,449 Repurchase Program In October 2018, our Board of Directors approved a common stock repurchase program (“Repurchase Program”) whereby the Company is authorized to purchase up to a maximum of $25 million of its common stock, subject to compliance with applicable law and the limitations in the Company’s credit facilities on stock repurchases. The authorization allows repurchases from time to time in the open market or in privately negotiated transactions. The amount and timing of repurchases made under the Repurchase Program will depend on a variety of factors, including available liquidity, cash flow and market conditions. Shares can be purchased through the Repurchase Program through October 2020, unless extended or shortened by our Board of Directors. The Repurchase Program does not obligate us to acquire any particular amount of common stock and the program may be modified or suspended at any time at our discretion. The repurchases would be funded from available working capital and are subject to compliance with the terms and limitations of the Company’s credit facilities. In the three months ended September 30, 2020, we did not repurchase any shares of common stock under the Repurchase Program. In the nine months ended September 30, 2020, we repurchased 210,618 shares of common stock at an average price of $3.25 per share for a total cost of $684,000 under the Repurchase Program. This excludes shares repurchased to settle employee tax withholding related to the vesting of our stock-settled bonus and RSUs. The maximum remaining dollar value of shares that may be purchased under the Repurchase Program was $9.2 million at September 30, 2020 . |
Share Based Awards
Share Based Awards | 9 Months Ended |
Sep. 30, 2020 | |
Share Based Awards | |
Share Based Awards | 10. Share Based Awards 2008 Stock Plan Our 2008 Stock Plan, or 2008 Plan, which expired on June 12, 2014, provided for the grant of incentive and nonstatutory stock options to employees, nonemployee directors and consultants of the Company. Options granted under the 2008 Plan generally become exercisable within three Our 2008 Plan was terminated following the date our 2014 Equity Incentive Plan, or our 2014 Plan, became effective. Any outstanding stock awards under our 2008 Plan will continue to be governed by the terms of our 2008 Plan and applicable award agreements. 2014 Equity Incentive Plan Our 2014 Plan provides for the grant of incentive stock options, or ISOs, within the meaning of Section 422 of the Internal Revenue Code, or the Code, to our employees and our parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, or NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensation to our employees, directors and consultants. Additionally, our 2014 Plan provides for the grant of performance cash awards to our employees, directors and consultants. The initial number of shares of our common stock available to be issued under our 2014 Plan was 8,142,857, which number of shares will be increased by any shares subject to stock options or other stock awards granted under the 2008 Stock Plan that would have otherwise returned to our 2008 Stock Plan (such as upon the expiration or termination of a stock award prior to vesting), not to exceed 16,312,202. The number of shares of our common stock reserved for issuance under our 2014 Plan automatically increase on January 1 of each year, beginning on January 1, 2015 and continuing through and including January 1, 2024, by 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors. On January 1, 2020, we increased the number of shares of common stock reserved for issuance under our 2014 Plan by 5,636,269 shares, which was 5% of the total number of shares of common stock outstanding at December 31, 2019. Amended and Restated 2015 Inducement Plan On December 20, 2015, our board of directors adopted our 2015 Inducement Plan, or the Inducement Plan, to reserve 1,600,000 shares of our common stock to be used exclusively for grants of awards to individuals that were not previously employees or directors of the Company. The terms and conditions of the Inducement Plan are substantially similar to our stockholder-approved 2014 Plan. On January 5, 2016, our board of directors approved the amendment and restatement of the Inducement Plan to increase the share reserve under the Inducement Plan to 1,970,000 shares of our common stock. As of September 30, 2020, there were 312,500 stock options and restricted stock units outstanding under the Inducement Plan. 2014 Employee Stock Purchase Plan The purpose of our 2014 Employee Stock Purchase Plan, or ESPP, is to secure the services of new employees, to retain the services of existing employees and to provide incentives for such individuals to exert maximum efforts toward our success and that of our customers, other partners, and shareholders. Our ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code. Our ESPP permits eligible employees to purchase our common stock through payroll deductions, which may not exceed 15% of the employee’s base compensation. Stock may be purchased under the plan at a price equal to 85% of the fair market value of our common stock on either the first day of the offering or the last day of the applicable purchase period, whichever is lower. As of September 30, 2020 and December 31, 2019, approximately 385,094 and 378,525 shares of common stock were available for future issuance under our ESPP, respectively. The number of shares of our common stock reserved for issuance under our ESPP increase automatically each year, beginning on January 1, 2015 and continuing through and including January 1, 2024, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year; (ii) 2,142,857 shares of common stock; or (iii) such lesser number as determined by our board of directors. Shares subject to purchase rights granted under our ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under our ESPP. On January 1, 2020, we increased the number of shares available for issuance under the ESPP by 1,127,253 shares, which was 1% of the total number of shares of our common stock outstanding as of December 31, 2019. Restricted Stock Units and Performance Stock Units We grant RSUs and, beginning in our first quarter of 2020, PSUs under our 2014 Plan. For stock-based compensation expense, we measure the value of the RSUs and PSUs based on the fair value of our common stock on the date of grant. Our RSU grants are subject to service conditions and we expense the fair value of those shares on a straight-line basis over their vesting periods. Our PSU grants are subject to performance and service conditions and we expense the fair value of those shares on an accelerated-graded basis over the employee’s requisite service period. The PSU expense may be adjusted each quarter based on our forecast of the Company’s performance relative to the annual recurring revenue metrics that determine the number of PSUs that will vest. To the extent that updated estimates of PSU expense differ from original estimates, the cumulative effect on current and prior periods of those changes is recorded in the period in which those estimates are revised. Our RSU activity for the nine months ended September 30, 2020 was as follows: Restricted Stock Units Weighted- Average Number of Grant Date Shares Fair Value Unvested, December 31, 2019 12,639,066 $ 5.20 Granted 7,543,265 4.54 Vested (5,786,845) 4.84 Forfeitures (1,664,740) 4.94 Unvested, September 30, 2020 12,730,746 $ 5.01 Our PSU activity for the nine months ended September 30, 2020 was as follows: Performance Stock Units Weighted- Average Number of Grant Date Shares Fair Value Unvested, December 31, 2019 — $ n/a Granted 1,005,000 3.27 Vested — n/a Forfeitures (170,000) 3.27 Unvested, September 30, 2020 835,000 $ 3.27 Bonus Plans The 2018 Non-Executive and Executive Bonus Plans provided for the issuance of shares of unrestricted common stock to employees based on the achievement of certain 2018 Company metrics. We issued 1,338,220 shares of unrestricted common stock in the first quarter of 2019, after withholding 832,635 shares to cover employee payroll taxes which we paid in cash totaling $4.1 million. In March 2019, the Compensation Committee of our board of directors approved the 2019 Non-Executive Bonus Plan and the 2019 Executive Bonus Plan, or collectively, the 2019 Bonus Plans. The 2019 Bonus Plans provided for the issuance of shares of unrestricted common stock to employees based on the achievement of certain 2019 Company metrics. We issued 1,061,165 shares of unrestricted common stock in the first quarter of 2020, after withholding 669,517 shares to cover employee payroll taxes which we paid in cash totaling $2.9 million. In April 2020, the Compensation Committee of our board of directors approved the 2020 Non-Executive Bonus Plan and the 2020 Executive Bonus Plan, or collectively, the 2020 Bonus Plans. The 2020 Bonus Plans provide for the issuance of shares of unrestricted common stock to employees based on the achievement of certain 2020 Company metrics as determined by the Compensation Committee. Shares issued under the aforementioned Bonus Plans are issued from our 2014 Plan and reduce the 2014 Plan shares available for issuance. We record stock-based compensation expense related to the Bonus Plans over the service period of eligible employees based on forecasted performance relative to the Company target metrics. To the extent that updated estimates of bonus expense differ from original estimates, the cumulative effect on current and prior periods of those changes is recorded in the period those estimates are revised. In the three and six months ended June 30, 2020, we recorded $5.7 million of stock-based compensation expense under the 2020 Bonus Plans. In September 2020, following the completion of negotiations among the parties regarding the material terms of the Merger Agreement (including the price of $7.05 per share), the Compensation Committee of our board of directors split the 2020 Bonus Plans into Nine-Month Plans, covering January 1, 2020 to September 30, 2020, and Three-Month Plans, covering October 1, 2020 to December 31, 2020. In the case of the Three-Month Plans and the Nine-Month Plans, the level of achievement will be determined by the Company based on the application of the metrics and terms previously adopted by the Company, but with a minimum payout of 100% of target under each plan. In addition to our splitting of the 2020 Bonus Plans and requiring a minimum 100% of target payout, the Merger Agreement imposes certain pre-closing restrictions on our activities, one of which precludes settlement of our 2020 Bonus Plans in unrestricted common stock. Because we are currently required to settle the 2020 Bonus Plans in cash, we recorded a cumulative adjustment in the three months ended September 30, 2020 to reclassify the $5.7 million previously recorded as stock-based compensation expense to bonus expense compensation expense under the 2019 Bonus Plans. In the three and nine months ended September 30, 2019, we recorded $559,000 and $5.5 million, respectively, of stock-based compensation expense under the 2019 Bonus Plans. In the nine months ended September 30, 2019, we recorded $1.1 million of stock-based compensation expense under the 2018 Bonus Plans. Stock Options Stock option activity under the 2008 Plan, 2014 Plan and 2015 Inducement Plan for the nine months ended September 30, 2020 was as follows: Options Outstanding Weighted- Number of Average Aggregate Shares Weighted- Remaining Intrinsic Available Number of Average Contractual Value for Issuance Shares Exercise Price Term (Years) (In thousands) Balance—December 31, 2019 1,301,881 2,898,977 $ 5.17 4.89 $ 1,556 Authorized 5,636,269 — Stock options granted — — Issuance of shares under Bonus Plans (1,730,682) — Shares withheld from net settlement of restricted stock units 1,305,947 Restricted stock units granted (5,812,583) — Performance stock units granted(1) (1,005,000) — Exercised — (443,674) 4.12 Stock options canceled 162,027 (162,027) 5.46 Restricted and Performance stock units forfeited 1,834,740 — Balance—September 30, 2020 1,692,599 2,293,276 $ 5.36 4.07 $ 4,358 Vested and exercisable—September 30, 2020 2,068,275 $ 5.45 3.76 $ 3,800 Vested and expected to vest(2)—September 30, 2020 2,261,882 $ 5.37 3.94 $ 4,281 (1) Performance stock units granted are reflected in the table as a decrease in the number of shares available for issuance at target achievement for tracking and reporting purposes but do not technically reduce shares available for issuance until earned. (2) Options expected to vest reflect an estimated forfeiture rate. Our stock-based compensation expense was recorded in the following cost and expense categories (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Cost of revenue $ (57) $ 1,052 $ 2,739 $ 3,859 Research and development 367 3,279 8,710 11,015 Sales and marketing 1,208 2,029 6,670 6,367 General and administrative 1,126 1,652 5,604 5,918 Total $ 2,644 $ 8,012 $ 23,723 $ 27,159 We used the Black-Scholes Model to estimate the fair value of our stock options granted to employees with the following assumptions: Nine Months Ended September 30, 2020 2019 Expected dividend yield n/a — Risk-free interest rate n/a 2.5% Expected volatility n/a 50% Expected life (in years) n/a 6.1 No stock options were granted in the three and nine months ended September 30, 2020 or the three months ended September 30, 2019. We used the Black-Scholes Model to estimate the fair value of our Employee Stock Purchase Plan awards with the following assumptions: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Expected dividend yield — — — — Risk-free interest rate 0.1% 1.7% 0.8% 2.1% Expected volatility 57% 40% 51% 41% Expected life (in years) 1.3 1.3 1.3 1.3 As required by Topic 718 Compensation—Stock Compensation As of September 30, 2020, unrecognized stock-based compensation expense and its remaining weighted-average recognition period was as follows: Unrecognized Remaining Stock-based Weighted-Average Compensation Recognition Expense Period (in millions) (in years) Stock options $ 0.3 2.0 Restricted stock units 47.8 2.7 Performance stock units 2.4 1.6 ESPP 2.1 1.5 Total $ 52.6 |
Employee Benefit Plan
Employee Benefit Plan | 9 Months Ended |
Sep. 30, 2020 | |
Employee Benefit Plan | |
Employee Benefit Plan | 11. Employee Benefit Plan We maintain a defined contribution 401(k) plan. The plan covers all full-time U.S. employees over the age of 21. Each employee can contribute up to $19,500 annually (with a $6,500 catch up contribution limit for employees aged 50 or older). Beginning January 2020, we provide matching contributions at 100% of every dollar an employee contributes, up to 3% of eligible compensation with a $2,000 annual maximum match. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies Litigation We continually evaluate uncertainties associated with litigation and record a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and (ii) the loss or range of loss can be reasonably estimated. If we determine that a loss is possible and a range of the loss can be reasonably estimated, we disclose the range of the possible loss in the Notes to the Consolidated Financial Statements. We evaluate, on a quarterly basis, developments in our legal matters that could affect the amount of liability that has been previously accrued, if any, and the matters and related ranges of possible losses disclosed, and make adjustments and changes to our disclosures as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters. Until the final resolution of such matters, there may be an exposure to loss, and such amounts could be material. For legal proceedings for which there is a reasonable possibility of loss (meaning those losses for which the likelihood is more than remote but less than probable), we have determined we do not have material exposure on an aggregate basis at this time. Patent Claim We received a letter in August 2019 from BlackBerry Corp. asserting that our products and software infringe BlackBerry’s patents, and that we should license its portfolio. We retained counsel and evaluated BlackBerry’s letter, as well as potential counterclaims against BlackBerry. BlackBerry sent a second letter in March 2020 asserting that our products and software infringe additional BlackBerry patents, although BlackBerry did not specify its infringement theories or make a demand for damages in the March 2020 letter. The parties have attempted to negotiate, and we accrued an immaterial amount related to the matter in 2019. However, through the date of the filing of this Quarterly Report on Form 10-Q, these discussions have not been resolved. To protect our rights, we filed a lawsuit against BlackBerry in the United States District Court for the Northern District of California on April 27, 2020. The case is MobileIron, Inc. v. BlackBerry Corp. and BlackBerry Ltd. The lawsuit asserts that BlackBerry’s products infringe MobileIron patents, that MobileIron’s products and software do not infringe BlackBerry’s patents, and that BlackBerry has engaged in certain unlawful activities related to its licensing program for its patent portfolio. We intend to vigorously assert our claims and defend against any claims or lawsuits that BlackBerry may assert against us. The amount of damages that could be awarded in the lawsuit is unknown at this time. Indemnification Under the indemnification provisions of our standard sales related contracts, we agree to defend and/or settle claims brought by third parties against our customers and channel partners alleging that our software or the customer’s use thereof infringes the third-party’s intellectual property right, such as a patent right. These indemnification obligations are typically not subject to limitation; however if we believe such a claim is reasonably likely to occur and if it is commercially impractical for us to either procure the right for the customer to continue to use our software or modify our software so that it’s not infringing, we can terminate the customer agreement and refund the customer a portion of the license fees paid (prorated over the three year period from initial delivery for software licensed on a perpetual basis). We also on occasion indemnify our customers for other types of third-party claims. In addition, we indemnify our officers, directors, and certain key employees while they are serving in such capacities in good faith. Through September 30, 2020, we have not received any material written claim for indemnification. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Leases | 13. Leases We have operating leases for office facilities and data centers. Our leases have remaining lease terms of less than one year to approximately seven years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. On our balance sheet, we have current and noncurrent lease commitment liabilities of approximately $4.8 million and $6.7, million, respectively, and corresponding right-of-use assets of approximately $10.3 million at September 30, 2020 for our operating leases. The operating lease cost for both the three months ended September 30, 2020 and 2019 was $1.3 million. The operating lease cost for the nine months ended September 30, 2020 and 2019 was $3.7 million and $4.7 million, respectively. The future maturities of lease liabilities as of September 30, 2020 are as follows (in thousands): Year 2020 (remaining) $ 1,400 2021 4,968 2022 3,526 2023 1,518 2024 355 Thereafter 579 Total lease payments 12,346 Less: imputed interest (913) Total lease liability $ 11,433 All of our leases are classified as operating leases. In the nine months ended September 30, 2020, the weighted average discount rate used to determine the lease liabilities was 5.3% and the weighted average remaining lease term was 35 months. |
Unearned Revenue
Unearned Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Unearned Revenue | |
Unearned Revenue | 14. Unearned Revenue Changes in unearned revenue were as follows for the three and nine months ended September 30, 2020 and 2019: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2020 2019 2020 2019 Balance, beginning of period $ 113,213 $ 106,399 $ 118,211 $ 105,837 Billings, excluding billings for customer arrangements with termination rights 40,123 46,246 133,961 135,904 Additions to unearned revenue upon expiration of termination rights 4,634 5,056 13,878 15,118 Recognition of revenue, net of change in unbilled accounts receivable* (50,079) (50,900) (158,434) (150,058) Acquired unearned revenue — — 275 — Balance, end of period $ 107,891 $ 106,801 $ 107,891 $ 106,801 * Reconciliation to Revenue Reported per Condensed Consolidated Statement of Operations: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2020 2019 2020 2019 Revenue billed as of the end of period $ 50,079 $ 50,900 $ 158,434 $ 150,058 Increase (decrease) in total unbilled accounts receivable (80) 1,301 188 1,090 Revenue Reported in Condensed Consolidated Statement of Operations $ 49,999 $ 52,201 $ 158,622 $ 151,148 Revenue allocated to remaining performance obligations includes unearned revenue plus contractually committed amounts that will be invoiced and recognized as revenue in future periods, but excludes amounts invoiced and not recognized as revenue under customer arrangements that contain termination rights. Remaining performance obligations were $118.9 million as of September 30, 2020, of which we expect to recognize approximately 76% as revenue over the next 12 months and the remainder thereafter. As of September 30, 2020 and December 31, 2019, the balance of customer arrangements that contain termination rights was $11.3 million and $16.1 million, respectively. |
Segment and Disaggregated Reven
Segment and Disaggregated Revenue Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment and Disaggregated Revenue Information | |
Segment and Disaggregated Revenue Information | 15. Segment and Disaggregated Revenue Information We conduct business globally. Our chief operating decision maker (Chief Executive Officer) reviews financial information presented on a consolidated basis accompanied by information about revenue by geographic region for purposes of allocating resources and evaluating financial performance. We have one business activity, software and services to manage and secure mobile devices, applications and content, and there are no segment managers who are held accountable for operations, operating results and plans for levels, components or types of products or services below the consolidated unit level. Accordingly, we are considered to be in a single reportable segment and operating unit structure. Approximately $1.4 million and $2.0 million as of September 30, 2020 and December 31, 2019, or 41% and 42%, respectively, of our net Property and Equipment was attributable to our operations located in India. Substantially all other long-lived assets were attributable to operations in the United States. Revenue by geographic region based on the billing address was as follows: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2020 2019 2020 2019 Revenue United States $ 22,448 $ 23,376 $ 67,746 $ 64,849 International 27,551 28,825 90,876 86,299 Total $ 49,999 $ 52,201 $ 158,622 $ 151,148 We recognized revenue of $6.5 million, or 13% of total revenue, and $7.3 million, or 14% of total revenue, from customers with a billing address in Germany for the three months ended September 30, 2020 and 2019, respectively. We recognized revenue of $23.6 million, or 15% of total revenue, and $23.4 million, or 15% of total revenue, from customers with a billing address in Germany for the nine months ended September 30, 2020 and 2019, respectively. No other country, except for the United States and Germany, exceeded 10% of total revenue in the three or nine months ended September 30, 2020 or 2019. Revenue from recurring and non-recurring contractual arrangements was as follows: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2020 2019 2020 2019 Cloud subscriptions - ratable $ 20,890 $ 17,591 $ 59,073 $ 49,163 On-premise subscriptions - point-in-time 5,139 5,964 14,240 17,394 On-premise subscriptions - ratable 5,267 4,902 15,232 13,872 Software support on perpetual licenses - ratable 16,132 16,363 48,305 48,669 Recurring revenue 47,428 44,820 136,850 129,098 Perpetual license - point-in-time 1,326 6,252 18,314 18,420 Professional services - point-in-time 1,245 1,129 3,458 3,630 Non-recurring revenue 2,571 7,381 21,772 22,050 Total revenue $ 49,999 $ 52,201 $ 158,622 $ 151,148 Recurring revenue in the table above is defined as revenue that requires a contract renewal for the service or license to continue beyond the initial or current contract term and additional revenue will be recognized if that renewal occurs. Non-recurring revenue is defined as sales of perpetual license or professional services that are one-time in nature and do not need to be renewed. |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2020 | |
Net Loss per Share | |
Net Loss per Share | 16. Net Loss per Share The following table sets forth the computation of basic and diluted net loss per share for the three and nine months ended September 30, 2020 and 2019 (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Numerator: Net loss $ (16,272) $ (8,203) $ (37,441) $ (40,892) Denominator: Weighted–average shares used to compute basic and diluted net loss per share 117,703 110,831 116,192 109,147 Basic and diluted net loss per share $ (0.14) $ (0.07) $ (0.32) $ (0.37) Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period. Because we have reported a net loss for the three and nine months ended September 30, 2020 and 2019, the number of shares used to calculate diluted net loss per common share is the same as the number of shares used to calculate basic net loss per common share for those periods presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in common stock equivalent shares): September 30, September 30, 2020 2019 Stock options outstanding, net of unvested exercised stock options 2,293,276 2,929,095 Unvested restricted stock units 12,730,746 13,806,088 Unvested performance stock units 835,000 — ESPP shares 226,673 194,622 Stock-settled bonus shares — 499,612 Total potentially dilutive securities 16,085,695 17,429,417 |
Description of Business and S_2
Description of Business and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Description of Business and Significant Accounting Policies | |
Description of Business | Description of Business MobileIron, Inc. and its wholly owned subsidiaries, collectively, the “Company”, “we”, “us” or “our”, provides a purpose-built mobile IT platform that enables enterprises to manage and secure mobile applications, content and devices while providing their employees with device choice, privacy and a native user experience. We were incorporated in Delaware in July 2007 and are headquartered in Mountain View, California, with additional sales and support presence in North America, Europe, the Middle East, Asia and Australia and employees in India primarily focused on research and development. Pending Acquisition by Ivanti, Inc. On September 26, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ivanti, Inc., a Delaware corporation (“Parent”), and Oahu Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”). The Merger Agreement provides that, subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger and becoming a wholly owned subsidiary of Parent. Under the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of our common stock that is outstanding immediately prior to the Effective Time (other than shares of common stock (1) held by the Company as treasury stock, (2) owned by Parent or Merger Sub, (3) owned by any direct or indirect wholly owned subsidiary of Parent or Merger Sub or (4) held by stockholders who have properly and validly exercised their statutory rights of appraisal under Section 262 of the Delaware General Corporation Law (the “DGCL”)) will be canceled and converted into the right to receive cash in the amount equal to $7.05, without interest (the “Per Share Merger Consideration”). At the Effective Time, each outstanding vested restricted stock unit (“RSU”), performance stock unit (“PSU”) and option granted by the Company shall be cancelled and converted into the right to receive cash equal to (A) the aggregate number of shares of the Company’s common stock subject to such RSU, PSU or option, as applicable, multiplied by (B) the Per Share Merger Consideration (less the exercise price in the case of vested options) (the “Award Consideration”). Each outstanding RSU, PSU or option that is not vested but that is subject to acceleration shall be cancelled and converted into the right to receive an amount in cash equal to the Award Consideration pursuant to the terms of the Merger Agreement, a portion of which will be paid after the Effective Time in accordance with the applicable award agreement. Each outstanding RSU, PSU or option that is not vested and that does not automatically accelerate at closing of the Merger will be cancelled without consideration. Pursuant to the Merger Agreement, the Company has acted to provide, among other things, that (1) each individual participating in an offering period under the Company’s 2014 Employee Stock Purchase Plan (the “ESPP”) in progress on the date of the Merger Agreement will not be permitted to (A) increase his or her payroll contribution rate pursuant to the ESPP or (B) make separate non-payroll contributions to the ESPP on or following the date of the Merger Agreement, except as may be required by applicable law; (2) no individual who is not participating in the ESPP will be allowed to commence participation in the ESPP; and (3) any offering period that would otherwise be outstanding at the Effective Time will terminate no later than five days prior to the date on which the Effective Time occurs. The Company will make any pro rata adjustments as may be necessary to reflect the shortened offering period and will cause the exercise of each outstanding purchase right pursuant to the ESPP no later than one The Company, and Parent and Merger Sub, have made certain representations, warranties and covenants in the Merger Agreement, including, among others, covenants by the Company to conduct its business in the ordinary course during the period between execution of the Merger Agreement and closing of the Merger. Pursuant to the terms of the Merger Agreement, the Company is subject to restrictions on its ability to solicit alternative acquisition proposals and to provide information to, and engage in discussion with, third parties regarding such proposals, except under limited circumstances. In the event the Merger Agreement is terminated by the Company to enter into a Superior Proposal, as defined in the Merger Agreement, the Company will be required to pay Parent a termination fee of $30.45 million. Subject to certain exceptions, each of the parties has agreed to use its reasonable best efforts to take or cause to be taken actions necessary to consummate the Merger, including with respect to obtaining required government approvals. The Merger Agreement also contains certain termination rights for both the Company and Parent. Pursuant to the terms of the Merger Agreement, if the Company terminates the Merger Agreement two , Parent will pay the Company $65.25 million. The Merger Agreement requires the Company to convene a special meeting of stockholders for purposes of obtaining approval of the adoption of the Merger Agreement. Commencing on October 26, 2020, the Company noticed and mailed a definitive proxy statement for a special meeting of the Company’s stockholders to be held on November 24, 2020. The Merger is subject to the satisfaction or waiver of certain closing conditions including, among other things, (1) the affirmative vote of the holders of a majority of the voting power of the outstanding shares of the Company’s common stock entitled to vote on the adoption of the Merger Agreement, (2) the expiration or termination of the waiting period under Antitrust Laws (as defined in the Merger Agreement), Parent furnished the Company with copies of equity and debt financing commitments obtained by Parent, the proceeds of which will provide for funds to consummate the transactions contemplated by the Merger Agreement. The consummation of the Merger is not subject to a financing condition. COVID-19 Pandemic In the first quarter of 2020, the United States and other countries began shelter-in-place mandates and began to close many businesses as a result of the COVID-19 virus. The World Health Organization characterized COVID-19 as a pandemic and the President of the United States declared the COVID-19 outbreak a national emergency. Since then, the COVID-19 pandemic has rapidly spread across the globe and has already resulted in significant volatility, uncertainty and economic disruption. The future impact of the pandemic and any resulting economic impact are largely unknown and rapidly evolving. It is difficult at this time to predict the amount of the financial impact that COVID-19 will have on the Company’s business, financial position and operating results in future periods due to numerous uncertainties. The Company is closely monitoring the impact of the pandemic on all aspects of its business. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019 have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial statements and pursuant to the rules and regulations of the SEC, and include the accounts of our wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures in this Quarterly Report on Form 10-Q normally included in annual financial statements prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair presentation of our balance sheet as of September 30, 2020, our operating results for the three and nine months ended September 30, 2020 and 2019, and our cash flows for the nine months ended September 30, 2020 and 2019. Our operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. The condensed consolidated balance sheet as of December 31, 2019 has been derived from the audited consolidated financial statements as of that date, but does not include all the footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with our audited financial statements and related notes for the year ended December 31, 2019, included in our Annual Report on Form 10-K for the year ended December 31, 2019 previously filed with the SEC. |
Foreign Currency Translation | Foreign Currency Translation Our reporting currency is the U.S. dollar. The functional currency of all our international operations is the U.S. dollar. All monetary asset and liability accounts are translated into U.S. dollars at the period-end rate, nonmonetary assets and liabilities are translated at historical exchange rates, and revenue and expenses are translated at the weighted-average exchange rates in effect during the period. Translation adjustments are recorded as foreign currency gains (losses) in the condensed consolidated statements of operations. We recognized a foreign currency gain of $236,000 and a loss of $420,000 in the three months ended September 30, 2020 and 2019, respectively, and we recognized a foreign currency loss of $189,000 and $612,000 in the nine months ended September 30, 2020 and 2019, respectively, in other income (expense)—net in our condensed consolidated statements of operations. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates include, but are not limited to, revenue recognition, deferred commissions and commissions expense, stock-based compensation, intangible assets, goodwill, and accounting for income taxes. Actual results could differ from those estimates. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk consist of cash, money market funds and fixed income investments. Although we deposit our cash with multiple financial institutions, our deposits, at times, exceed federally insured limits. We invest in fixed income securities that are of high-credit quality. Substantially all of our money market funds, or $51.8 million, are held in two funds that are rated “AAA.” We generally do not require collateral or other security in support of accounts receivable. Allowances are provided for individual accounts receivable when we become aware of a customer’s inability to meet its financial obligations, such as in the case of bankruptcy, deterioration of the customer’s operating results, or change in financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. We also consider broader factors in evaluating the sufficiency of our allowances for doubtful accounts, including the length of time receivables are past due, significant one-time events, overall or industry-specific economic conditions, and historical experience. We had an allowance for doubtful accounts of $511,000 and $412,000 at September 30, 2020 and December 31, 2019, respectively. One reseller accounted for 10% of total revenue for both the three and nine months ended September 30, 2019. No resellers or end-user customers accounted for 10% or more of our total revenue in the three and nine months ended September 30, 2020 and no other reseller or end-user customer accounted for 10% or more of our total revenue in the three and nine months ended September 30, 2019. Two resellers accounted for 18% and 12%, respectively, of net accounts receivable at September 30, 2020. No reseller or end-user customer accounted for 10% or more of net accounts receivable as of December 31, 2019. |
Segments | Segments We have one reportable segment, software and services to manage and secure mobile devices, applications and content. |
Revenue Recognition | Revenue Recognition Revenue Presentation Cloud services include sales of cloud-based solutions that allow customers to use hosted software over a contract period without taking possession of our software and are typically provided on a subscription or usage basis. License revenue includes sales of perpetual software licenses, software licenses sold as part of on-premise term subscriptions, and appliances. Software support and services revenue includes sales of software support sold as part of on-premise term subscriptions, software support for perpetual licenses, and professional services. Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Nature of Products and Services Cloud services, which allow customers to use hosted software over a contract period without taking possession of our software, are provided on a subscription or usage basis. Revenue related to cloud services provided on a subscription basis is recognized ratably over the contract period and revenue related to cloud services based on usage is generally recognized as the usage occurs. Licenses for on-premise software provide the customer with a right to use the software as it exists when made available to the customer. Customers may purchase on-premise software licenses as perpetual licenses or as part of subscriptions. On-premise licenses are considered distinct performance obligations and revenue from the licenses is recognized upfront when the software is made available to the customer. In the case of our on-premise subscriptions, the license portion of revenue is recognized up-front, and the software support and services portion is recognized ratably. Software support and services convey rights to the upgrades released over the contract period and provide support and tools to help customers deploy and use our products more efficiently. Revenue allocated to software support and services is generally recognized ratably over the contract period as customers simultaneously consume and receive benefits, given that the software support and services comprises a distinct performance obligation that is satisfied over time. On-premise subscriptions and software support and services occasionally contain termination rights. We recognize revenue from those arrangements, including the distinct licenses contained therein, as the termination rights for the performance obligation expire. See also Unearned Revenue and Customer Arrangements with Termination Rights Professional services include consulting, deployment and training services. Our professional services represent distinct performance obligations as our customers benefit from the services separately or together with other readily available resources. Professional services revenue is recognized as services are delivered. Appliance revenue was less than 1% of total revenue for all periods presented and is included as a component of license revenue within the consolidated statements of operations. Refer to Note 15 – Segment and Disaggregated Revenue Information for further information. Significant Judgments Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is required to determine whether a software license is considered distinct and accounted for separately, or not distinct and accounted for together with the software support and services and recognized over time. Judgment is required to determine the standalone selling price (“SSP”) for each distinct performance obligation. We use a range of amounts to estimate the SSP for items that are not sold separately, including on-premises licenses sold with software support and services. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include other observable inputs. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customer classes and circumstances. In these instances, we may use information such as the size and type of customer in determining the SSP. Contract Balances Timing of revenue recognition may differ from the timing of invoicing customers. We record a receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue will be recognized after invoicing. For multi-year agreements, we either invoice our customer in full at the inception of the contract or annually at the beginning of each annual period. We record an unbilled receivable related to revenue recognized for multi-year on-premise licenses invoiced annually when we have an unconditional right to invoice and receive payment in the future for those licenses or when we have the right to invoice future monthly periods under committed monthly recurring charge (“MRC”) agreements. The majority of our MRC agreements are for a month to month term (“non-committed”) or usage-based. Payment terms and conditions vary by contract type, although terms generally include a requirement to pay within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. This includes invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period or multi-year on-premise licenses that are invoiced annually with a portion of the revenue recognized upfront. As of September 30, 2020 and December 31, 2019, the balance of accounts receivable, net of the allowance for doubtful accounts, included $2.3 million and $2.0 million, respectively, of unbilled receivables from upfront recognition of revenue for certain multi-period on-premises software subscriptions that include both distinct software licenses and software support and services. As of September 30, 2020 and December 31, 2019, unbilled receivables included in other long-term assets on our condensed consolidated balance sheets were $726,000 and $795,000, respectively. Unearned Revenue and Customer Arrangements with Termination Rights We generally invoice our customers upfront for subscriptions and software support and services associated with perpetual licenses. Unearned revenue from those upfront billings is comprised of unearned revenue from cloud-based subscriptions, software support and services for on-premise subscriptions, software support and services associated with perpetual licenses and professional services to be performed in the future. Because some of our arrangements with customers contain termination rights, the arrangements do not meet the definition of a contract under Accounting Standard Codification, or ASC, Topic 606, Revenue Recognition from Contracts with Customers, or ASC 606, and are not recorded as unearned revenue and instead are recorded as “customer arrangements with termination rights” on our condensed consolidated balance sheets. Refer to Note 14 – Unearned Revenue for further information on unearned revenue, changes in unearned revenue during the period, and customer arrangements with termination rights. Deferred Commissions We recognize an asset for the incremental costs of obtaining a contract with a customer. We have determined that certain sales incentive programs meet the requirements to be capitalized and we include those costs in current and non-current deferred commissions on our consolidated balance sheets. Deferred commissions are amortized over the period commensurate with revenue recognition. Changes in deferred commissions were as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Balance, beginning of the period $ 16,736 $ 17,727 $ 17,902 $ 17,331 Deferral of commissions earned 3,519 4,271 11,967 12,862 Recognition of commission expense (4,272) (4,867) (13,846) (12,844) Impairment of deferred commissions — (21) (40) (239) Balance, end of the period $ 15,983 $ 17,110 $ 15,983 $ 17,110 |
Cash Equivalents | Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of September 30, 2020 and December 31, 2019, cash and cash equivalents consist of cash deposited with banks and money market funds. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes all changes in equity (net assets) during a period from non-owner sources. For the three and nine months ended September 30, 2020 and 2019, there were no differences between net loss and comprehensive loss. Therefore, the consolidated statements of comprehensive loss have been omitted. |
Net Loss per Share of Common Stock | Net Loss per Share of Common Stock Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period after repurchases but without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, unvested restricted stock and stock options are considered to be potentially dilutive securities. Because we have reported a net loss for the three and nine months ended September 30, 2020 and 2019, the number of shares used to calculate diluted net loss per common share is the same as the number of shares used to calculate basic net loss per common share for those periods presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation. |
Software Development Costs Incurred in Connection with Software to be Sold or Marketed | Software Development Costs Incurred in Connection with Software to be Sold or Marketed The costs to develop new software products and enhancements to existing software products are expensed as incurred until technological feasibility has been established. We consider technological feasibility to have occurred when all planning, designing, coding and testing have been completed according to design specifications. Once technological feasibility is established, any additional costs would be capitalized. We believe our current process for developing software is essentially completed concurrent with the establishment of technological feasibility, and accordingly, no costs have been capitalized. |
Internal Use Software | Internal Use Software We capitalize costs incurred during the application development stage related to our internally used software. Such costs are primarily incurred by third-party vendors and consultants. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Amounts capitalized in all periods presented were not significant. All software development costs incurred in connection with our cloud offering, or SaaS, are also sold or marketed to partners or end customers, therefore we start capitalizing costs when technological feasibility is achieved. No costs were capitalized in any periods presented as we believe that our current process for developing software is essentially completed concurrent with the establishment of technological feasibility. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful life of the property and equipment, determined to be three years for computers and equipment and software, five years for furniture and fixtures, and the lesser of the remaining lease term or estimated useful life for leasehold improvements. Expenditures for repairs and software support are charged to expense as incurred. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is reflected as operating expenses in the consolidated statements of operations. |
Leases | Leases We determine if an arrangement is a lease conveying the right to control identified property, plant, or equipment and whether the lease is operating or financing at the lease’s inception. We have determined that all of our leases are operating leases. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments under the lease arrangements. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments. The operating lease ROU asset also includes any advance lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. We have adopted the practical expedient as permitted by the new leasing standard to not recognize lease assets and lease liabilities for leases with a term of 12 months or less. Our leases generally separate lease components from nonlease components. However, where lease and nonlease components are combined in our lease arrangements, we have adopted the practical expedient to not separate the lease from the nonlease components. Refer to Note 13 - Leases for further information about our leases. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets We record the excess of the acquisition purchase price over the fair value of the tangible and identifiable intangible assets acquired as goodwill. We perform an impairment test of our goodwill in the third quarter of our fiscal year, or more frequently if indicators of potential impairment arise. We have a single reporting unit and consequently evaluate goodwill for impairment based on an evaluation of the fair value of the Company as a whole. We record purchased intangible assets at their respective estimated fair values at the date of acquisition. Purchased intangible assets are being amortized using the straight-line method over their estimated useful lives, which range from three |
Long-Lived Assets with Finite Lives | Long-Lived Assets with Finite Lives Long-lived assets are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. We evaluate the recoverability of each of our long-lived assets, including property and equipment and purchased intangible assets, by comparison of its carrying amount to the future discounted cash flows we expect the asset to generate. If we consider the asset to be impaired, we measure the amount of any impairment as the difference between the carrying amount and the fair value of the impaired asset. |
Stock-Based Compensation | Stock-Based Compensation We use the estimated grant-date fair value method of accounting in accordance with ASC Topic 718 Compensation—Stock Compensation We recognize compensation costs for awards with service and performance vesting conditions and for our ESPP on an accelerated method over the requisite service period of the award. For stock options or restricted stock unit grants with no performance condition, we recognize compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of four years. |
Research and Development | Research and Development Because we estimate that our software is essentially completed concurrent with the establishment of technological feasibility, we have charged all research and development to expense as incurred. |
Advertising | Advertising Advertising costs are expensed and included in sales and marketing expense when incurred. Advertising expense for the three and nine months ended September 30, 2020 and 2019 was not significant. |
Income Taxes | Income Taxes We account for income taxes in accordance with ASC Topic 740, Income Taxes We use a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. A tax position is recognized when it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation processes. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority. The standard also provides guidance on derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure and transition. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits net operating loss (“NOL”) carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. We are currently evaluating the impact of the CARES Act, but at present do not expect that the NOL carryback provision of the CARES Act would result in a cash benefit to us. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. Recently Adopted Accounting Guidance In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments,” which introduces a model based on expected losses to estimate credit losses for most financial assets and certain other instruments. In addition, for available-for-sale debt securities with unrealized losses, the losses are recognized as allowances rather than reductions in the amortized cost of the securities. The standard was effective for annual reporting periods beginning after December 15, 2019. Entities apply the standard’s provisions by recording a cumulative-effect adjustment to retained earnings. We adopted ASU 2016-13 effective January 1, 2020. The adoption of this ASU did not have a material impact on our consolidated balance sheet, results of operations, cash flows and disclosures for the three and nine months ended September 30, 2020. In August 2018, the FASB issued ASU 2018-15 “Intangibles—Goodwill and Other—Internal-Use Software.” The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The standard was effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. We adopted ASU 2018-15 effective January 1, 2020. The adoption of this ASU did not have a material impact on our consolidated balance sheet, results of operations, or cash flows for the three and nine months ended September 30, 2020. Accounting Guidance Not Yet Adopted Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” This ASU simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. This ASU should be applied on a prospective basis. The ASU is effective for annual and interim reporting periods beginning after December 15, 2021. Early adoption is permitted. We do not expect the adoption of this ASU to have a material impact on our consolidated balance sheet, results of operations, or cash flows. Simplifying Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating consolidated income taxes to separate financial statements of entities not subject to income tax. ASU 2019-12 is effective for annual and interim periods in fiscal years beginning after December 15, 2020. |
Description of Business and S_3
Description of Business and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Description of Business and Significant Accounting Policies | |
Schedule of changes in deferred commissions | Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Balance, beginning of the period $ 16,736 $ 17,727 $ 17,902 $ 17,331 Deferral of commissions earned 3,519 4,271 11,967 12,862 Recognition of commission expense (4,272) (4,867) (13,846) (12,844) Impairment of deferred commissions — (21) (40) (239) Balance, end of the period $ 15,983 $ 17,110 $ 15,983 $ 17,110 |
Significant Balance Sheet Com_2
Significant Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Significant Balance Sheet Components | |
Schedule of accounts receivable, net | September 30, 2020 December 31, 2019 Accounts receivable - billed $ 37,331 $ 57,184 Accounts receivable - unbilled 2,300 2,043 Allowance for doubtful accounts (511) (412) Accounts receivable, net $ 39,120 $ 58,815 |
Schedule of property and equipment | September 30, 2020 December 31, 2019 Computers and appliances $ 13,670 $ 13,300 Purchased software 4,252 4,235 Furniture and fixtures 1,745 1,745 Leasehold improvements 3,834 3,403 Total property and equipment 23,501 22,683 Accumulated depreciation and amortization (20,155) (17,879) Total property and equipment—net $ 3,346 $ 4,804 |
Schedule of accrued expenses | September 30, 2020 December 31, 2019 Accrued commissions $ 3,450 $ 4,810 Accrued bonus 9,249 6,875 Employee Stock Purchase Plan liability 882 2,187 Other accrued payroll-related expenses 3,748 2,839 Accrued royalties 2,758 2,386 Other accrued liabilities 6,749 5,695 Total accrued expenses $ 26,836 $ 24,792 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurement | |
Schedule of financial instruments measured at fair market value | As of September 30, 2020 (in thousands) Level 1 Level 2 Level 3 Total Money market funds $ 51,821 $ — $ — $ 51,821 Total $ 51,821 $ — $ — $ 51,821 As of December 31, 2019 (in thousands) Level 1 Level 2 Level 3 Total Money market funds $ 82,411 $ — $ — $ 82,411 Total $ 82,411 $ — $ — $ 82,411 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Acquisitions | |
Schedule of preliminary purchase price allocation | Intangible assets: Tradename $ 163 Contractual customer relationship 1,415 Developed technology 1,546 Goodwill 2,932 Cash 279 Unearned revenue (275) Other assets and liabilities, net (113) Net assets acquired $ 5,947 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets | |
Schedule of intangible assets subject to amortization | September 30, 2020 Gross Carrying Accumulated Net Book Amount Amortization Impairment Value Tradename $ 163 $ (23) — $ 140 Contractual customer relationship 1,415 (118) — 1,297 Developed technology 1,546 (161) — 1,385 Total $ 3,124 $ (302) $ — $ 2,822 |
Schedule of estimated remaining intangible asset amortization expense | Year 2020 $ 181 2021 724 2022 724 2023 687 2024 412 Thereafter 94 Total $ 2,822 |
Schedule of goodwill | Balance, December 31, 2019 $ 5,475 Additions 2,932 Balance, September 30, 2020 $ 8,407 |
Restructuring Expense (Tables)
Restructuring Expense (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring Expense | |
Summary of restructuring activities | Severance and Other Restructuring Costs Three Months Ended Nine Months Ended September 30, 2020 Accrued restructuring, beginning of the period $ 419 $ 282 Provision for restructuring expense — 579 Cash payments (121) (563) Accrued restructuring, end of the period $ 298 $ 298 |
Common Stock (Tables)
Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Common Stock | |
Schedule of reserved shares of common stock for issuance | September 30, December 31, 2020 2019 Options outstanding 2,293,276 2,898,977 Unvested restricted stock units outstanding 12,730,746 12,639,066 Unvested performance stock units outstanding 835,000 — Shares available for grant under the 2014 Equity Incentive Plan and 2015 Inducement Plan 1,692,599 1,301,881 Shares available for purchase under the Employee Stock Purchase Plan 385,094 378,525 Total 17,936,715 17,218,449 |
Share Based Awards (Tables)
Share Based Awards (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share Based Awards | |
Schedule of restricted stock unit activity | Restricted Stock Units Weighted- Average Number of Grant Date Shares Fair Value Unvested, December 31, 2019 12,639,066 $ 5.20 Granted 7,543,265 4.54 Vested (5,786,845) 4.84 Forfeitures (1,664,740) 4.94 Unvested, September 30, 2020 12,730,746 $ 5.01 |
Schedule of PSU activity | Performance Stock Units Weighted- Average Number of Grant Date Shares Fair Value Unvested, December 31, 2019 — $ n/a Granted 1,005,000 3.27 Vested — n/a Forfeitures (170,000) 3.27 Unvested, September 30, 2020 835,000 $ 3.27 |
Schedule of stock option activity under the 2008 Plan, 2014 Plan and 2015 Inducement Plan | Options Outstanding Weighted- Number of Average Aggregate Shares Weighted- Remaining Intrinsic Available Number of Average Contractual Value for Issuance Shares Exercise Price Term (Years) (In thousands) Balance—December 31, 2019 1,301,881 2,898,977 $ 5.17 4.89 $ 1,556 Authorized 5,636,269 — Stock options granted — — Issuance of shares under Bonus Plans (1,730,682) — Shares withheld from net settlement of restricted stock units 1,305,947 Restricted stock units granted (5,812,583) — Performance stock units granted(1) (1,005,000) — Exercised — (443,674) 4.12 Stock options canceled 162,027 (162,027) 5.46 Restricted and Performance stock units forfeited 1,834,740 — Balance—September 30, 2020 1,692,599 2,293,276 $ 5.36 4.07 $ 4,358 Vested and exercisable—September 30, 2020 2,068,275 $ 5.45 3.76 $ 3,800 Vested and expected to vest(2)—September 30, 2020 2,261,882 $ 5.37 3.94 $ 4,281 (1) Performance stock units granted are reflected in the table as a decrease in the number of shares available for issuance at target achievement for tracking and reporting purposes but do not technically reduce shares available for issuance until earned. (2) Options expected to vest reflect an estimated forfeiture rate. |
Schedule of stock-based compensation expense recognized | Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Cost of revenue $ (57) $ 1,052 $ 2,739 $ 3,859 Research and development 367 3,279 8,710 11,015 Sales and marketing 1,208 2,029 6,670 6,367 General and administrative 1,126 1,652 5,604 5,918 Total $ 2,644 $ 8,012 $ 23,723 $ 27,159 |
Schedule of assumptions used to estimate fair value of stock options granted to employees | Nine Months Ended September 30, 2020 2019 Expected dividend yield n/a — Risk-free interest rate n/a 2.5% Expected volatility n/a 50% Expected life (in years) n/a 6.1 |
Schedule of assumptions used to estimate the fair value of Employee Stock Purchase Plan awards | Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Expected dividend yield — — — — Risk-free interest rate 0.1% 1.7% 0.8% 2.1% Expected volatility 57% 40% 51% 41% Expected life (in years) 1.3 1.3 1.3 1.3 |
Schedule of unrecognized stock-based compensation expense and its remaining weighted-average recognition period | Unrecognized Remaining Stock-based Weighted-Average Compensation Recognition Expense Period (in millions) (in years) Stock options $ 0.3 2.0 Restricted stock units 47.8 2.7 Performance stock units 2.4 1.6 ESPP 2.1 1.5 Total $ 52.6 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Summary of future maturities of lease liabilities | Year 2020 (remaining) $ 1,400 2021 4,968 2022 3,526 2023 1,518 2024 355 Thereafter 579 Total lease payments 12,346 Less: imputed interest (913) Total lease liability $ 11,433 |
Unearned Revenue (Tables)
Unearned Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Unearned Revenue | |
Schedule of changes in unearned revenue | Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2020 2019 2020 2019 Balance, beginning of period $ 113,213 $ 106,399 $ 118,211 $ 105,837 Billings, excluding billings for customer arrangements with termination rights 40,123 46,246 133,961 135,904 Additions to unearned revenue upon expiration of termination rights 4,634 5,056 13,878 15,118 Recognition of revenue, net of change in unbilled accounts receivable* (50,079) (50,900) (158,434) (150,058) Acquired unearned revenue — — 275 — Balance, end of period $ 107,891 $ 106,801 $ 107,891 $ 106,801 * Reconciliation to Revenue Reported per Condensed Consolidated Statement of Operations: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2020 2019 2020 2019 Revenue billed as of the end of period $ 50,079 $ 50,900 $ 158,434 $ 150,058 Increase (decrease) in total unbilled accounts receivable (80) 1,301 188 1,090 Revenue Reported in Condensed Consolidated Statement of Operations $ 49,999 $ 52,201 $ 158,622 $ 151,148 |
Segment and Disaggregated Rev_2
Segment and Disaggregated Revenue Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment and Disaggregated Revenue Information | |
Schedule of revenue by geographic region | Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2020 2019 2020 2019 Revenue United States $ 22,448 $ 23,376 $ 67,746 $ 64,849 International 27,551 28,825 90,876 86,299 Total $ 49,999 $ 52,201 $ 158,622 $ 151,148 |
Revenue from recurring and non-recurring contractual arrangements | Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2020 2019 2020 2019 Cloud subscriptions - ratable $ 20,890 $ 17,591 $ 59,073 $ 49,163 On-premise subscriptions - point-in-time 5,139 5,964 14,240 17,394 On-premise subscriptions - ratable 5,267 4,902 15,232 13,872 Software support on perpetual licenses - ratable 16,132 16,363 48,305 48,669 Recurring revenue 47,428 44,820 136,850 129,098 Perpetual license - point-in-time 1,326 6,252 18,314 18,420 Professional services - point-in-time 1,245 1,129 3,458 3,630 Non-recurring revenue 2,571 7,381 21,772 22,050 Total revenue $ 49,999 $ 52,201 $ 158,622 $ 151,148 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Net Loss per Share | |
Computation of basic and diluted net loss per share | The following table sets forth the computation of basic and diluted net loss per share for the three and nine months ended September 30, 2020 and 2019 (in thousands, except per share data): Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Numerator: Net loss $ (16,272) $ (8,203) $ (37,441) $ (40,892) Denominator: Weighted–average shares used to compute basic and diluted net loss per share 117,703 110,831 116,192 109,147 Basic and diluted net loss per share $ (0.14) $ (0.07) $ (0.32) $ (0.37) |
Schedule of antidilutive securities excluded from computation of diluted weighted-average shares outstanding | September 30, September 30, 2020 2019 Stock options outstanding, net of unvested exercised stock options 2,293,276 2,929,095 Unvested restricted stock units 12,730,746 13,806,088 Unvested performance stock units 835,000 — ESPP shares 226,673 194,622 Stock-settled bonus shares — 499,612 Total potentially dilutive securities 16,085,695 17,429,417 |
Description of Business and S_4
Description of Business and Significant Accounting Policies - Entry into a Material Definitive Agreement (Details) - Merger Agreement - USD ($) $ / shares in Units, $ in Thousands | Sep. 26, 2020 | Sep. 30, 2020 |
Description Of Business And Significant Accounting Policies [Line Items] | ||
Merger consideration (US Dollars per share ) | $ 7.05 | $ 7.05 |
Maximum termination period (in days) | 5 days | |
Maximum adjustment period (in days) | 1 day | |
Termination fees payable | $ 30,450 | |
Term of termination fees receivable (in days) | 2 days | |
Termination fees receivable | $ 65,250 |
Description of Business and S_5
Description of Business and Significant Accounting Policies (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($)item | Sep. 30, 2019USD ($)item | Sep. 30, 2020USD ($)segmentitem | Sep. 30, 2019USD ($)item | Dec. 31, 2019USD ($) | |
Description Of Business And Significant Accounting Policies [Line Items] | |||||
AAA-rated money market funds | $ 51,800,000 | $ 51,800,000 | |||
Number of Money Market Funds | item | 2 | 2 | |||
Accounts receivable, allowance | $ 511,000 | $ 511,000 | $ 412,000 | ||
Bad Debt Expense | $ 119,000 | ||||
Number of reportable segments | segment | 1 | ||||
Other income (expense)-net | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Foreign currency gain/(loss) | $ 236,000 | $ (420,000) | $ (189,000) | $ (612,000) | |
Customer concentration risk | Reseller | Total revenue | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Concentration risk, number of resellers | item | 1 | 1 | |||
Concentration risk, percentage | 10.00% | 10.00% | |||
Customer concentration risk | Reseller | Net accounts receivable | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Concentration risk, number of resellers | item | 2 | ||||
Customer concentration risk | Reseller one | Net accounts receivable | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 18.00% | ||||
Customer concentration risk | Reseller two | Net accounts receivable | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 12.00% |
Description of Business and S_6
Description of Business and Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Unbilled receivables, current | $ 2,300,000 | $ 2,300,000 | $ 2,000,000 | ||
Deferred commissions balance, beginning of period | 16,736,000 | $ 17,727,000 | 17,902,000 | $ 17,331,000 | 17,331,000 |
Deferral of commissions earned | 3,519,000 | 4,271,000 | 11,967,000 | 12,862,000 | |
Recognition of commission expense | (4,272,000) | (4,867,000) | (13,846,000) | (12,844,000) | |
Impairment of deferred commissions | (21,000) | (40,000) | (239,000) | ||
Deferred commissions balance, end of period | 15,983,000 | $ 17,110,000 | 15,983,000 | $ 17,110,000 | 17,902,000 |
Other assets | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Unbilled receivables, noncurrent | 726,000 | 726,000 | 795,000 | ||
Unbilled | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Accounts receivable | $ 2,300,000 | $ 2,300,000 | $ 2,043,000 | ||
Minimum | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Payment terms | 30 days | ||||
Maximum | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Payment terms | 60 days | ||||
Total revenue | Product | Appliance | Maximum | |||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 1.00% |
Description of Business and S_7
Description of Business and Significant Accounting Policies - Others (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Description Of Business And Significant Accounting Policies [Line Items] | ||||
Differences between net loss and comprehensive loss | $ 0 | $ 0 | $ 0 | $ 0 |
Capitalized development costs of software to be sold or marketed | 0 | 0 | ||
Capitalized development costs of software for internal use | $ 0 | $ 0 | ||
Stock-based compensation, vesting term (in years) | 4 years | |||
Minimum | ||||
Description Of Business And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives (in years) | 3 years | |||
Maximum | ||||
Description Of Business And Significant Accounting Policies [Line Items] | ||||
Estimated useful lives (in years) | 5 years | |||
Computers and appliances | ||||
Description Of Business And Significant Accounting Policies [Line Items] | ||||
Property plant and equipment useful life | 3 years | |||
Furniture and fixtures | ||||
Description Of Business And Significant Accounting Policies [Line Items] | ||||
Property plant and equipment useful life | 5 years |
Significant Balance Sheet Com_3
Significant Balance Sheet Components - Accounts Receivable, Net (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Accounts Receivable, Net | ||
Allowance for doubtful accounts | $ (511,000) | $ (412,000) |
Accounts receivable, net | 39,120,000 | 58,815,000 |
Billed | ||
Accounts Receivable, Net | ||
Accounts receivable | 37,331,000 | 57,184,000 |
Unbilled | ||
Accounts Receivable, Net | ||
Accounts receivable | $ 2,300,000 | $ 2,043,000 |
Significant Balance Sheet Com_4
Significant Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 23,501 | $ 22,683 |
Accumulated depreciation and amortization | (20,155) | (17,879) |
Total property and equipment-net | 3,346 | 4,804 |
Computers and appliances | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 13,670 | 13,300 |
Purchased software | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 4,252 | 4,235 |
Furniture and fixtures | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 1,745 | 1,745 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 3,834 | $ 3,403 |
Significant Balance Sheet Com_5
Significant Balance Sheet Components - Prepaid royalties, Accrued expenses (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Accrued commissions | $ 3,450,000 | $ 4,810,000 |
Accrued bonus | 9,249,000 | 6,875,000 |
Employee Stock Purchase Plan liability | 882,000 | 2,187,000 |
Other accrued payroll-related expenses | 3,748,000 | 2,839,000 |
Accrued royalties | 2,758,000 | 2,386,000 |
Other accrued liabilities | 6,749,000 | 5,695,000 |
Total accrued expenses | 26,836,000 | 24,792,000 |
Prepaid expenses and other current assets | ||
Prepaid royalties | 7,100,000 | 6,300,000 |
Other assets | ||
Prepaid royalties | 1,500,000 | $ 3,000,000 |
Restricted cash | $ 348,000 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial and nonfinancial liabilities measured at fair value | $ 0 | $ 0 |
Nonfinancial assets measured at fair value | 0 | 0 |
Recurring basis | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total | 51,821 | 82,411 |
Recurring basis | Level 1 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total | 51,821 | 82,411 |
Recurring basis | Money market funds | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total | 51,821 | 82,411 |
Recurring basis | Money market funds | Level 1 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total | $ 51,821 | $ 82,411 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) | Apr. 24, 2020 | Sep. 30, 2020 | Sep. 30, 2020 |
Acquisitions | |||
Cash paid | $ 5,668,000 | ||
incapptic | |||
Acquisitions | |||
Cash paid | $ 5,900,000 | ||
Paid to an escrow account | $ 1,100,000 | ||
Term of escrow account distributed to former acquiree's shareholders (in months) | 24 months | ||
Transaction costs associated with the acquisition | $ 0 | ||
incapptic | General and administrative | |||
Acquisitions | |||
Transaction costs associated with the acquisition | $ 347,000 |
Acquisitions - preliminary purc
Acquisitions - preliminary purchase price allocation (Details) - USD ($) $ in Thousands | Apr. 24, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Preliminary purchase price allocation | |||
Goodwill | $ 8,407 | $ 5,475 | |
incapptic | |||
Preliminary purchase price allocation | |||
Goodwill | $ 2,932 | ||
Cash | 279 | ||
Unearned revenue | (275) | ||
Other assets and liabilities, net | (113) | ||
Net assets acquired | 5,947 | ||
incapptic | Tradename | |||
Preliminary purchase price allocation | |||
Intangible assets | $ 163 | ||
Estimated useful lives (in years) | 3 years | ||
incapptic | Contractual customer relationship | |||
Preliminary purchase price allocation | |||
Intangible assets | $ 1,415 | ||
Estimated useful lives (in years) | 5 years | ||
incapptic | Developed technology | |||
Preliminary purchase price allocation | |||
Intangible assets | $ 1,546 | ||
Estimated useful lives (in years) | 4 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 3,124,000 | $ 3,124,000 | |||
Accumulated Amortization | (302,000) | (302,000) | |||
Net Book Value | 2,822,000 | 2,822,000 | $ 0 | ||
Amortization of intangible assets | 178,000 | $ 0 | $ 302,000 | $ 0 | |
Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Weighted average remaining life of intangible assets (in years) | 4 years 1 month 6 days | ||||
Tradename | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 163,000 | $ 163,000 | |||
Accumulated Amortization | (23,000) | (23,000) | |||
Net Book Value | 140,000 | 140,000 | |||
Contractual customer relationship | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 1,415,000 | 1,415,000 | |||
Accumulated Amortization | (118,000) | (118,000) | |||
Net Book Value | 1,297,000 | 1,297,000 | |||
Developed technology | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 1,546,000 | 1,546,000 | |||
Accumulated Amortization | (161,000) | (161,000) | |||
Net Book Value | $ 1,385,000 | $ 1,385,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Estimated remaining intangible asset amortization expense (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets | ||
2020 | $ 181,000 | |
2021 | 724,000 | |
2022 | 724,000 | |
2023 | 687,000 | |
2024 | 412,000 | |
Thereafter | 94,000 | |
Net Book Value | $ 2,822,000 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill and Intangible Assets | |
Balance, beginning of the period | $ 5,475 |
Additions | 2,932 |
Balance, end of the period | $ 8,407 |
Restructuring Expense (Details)
Restructuring Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Activity in accrued restructuring expense | ||
Accrued restructuring, beginning of the period | $ 282 | |
Provision for restructuring expense | 579 | |
Cash payments | (563) | |
Accrued restructuring, end of the period | $ 298 | 298 |
Termination of certain employees and exit of an office facility | ||
Activity in accrued restructuring expense | ||
Accrued restructuring, beginning of the period | 419 | |
Cash payments | (121) | |
Accrued restructuring, end of the period | $ 298 | $ 298 |
Line of Credit (Details)
Line of Credit (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
May 31, 2015 | Sep. 30, 2020 | Nov. 30, 2017 | |
Line Of Credit Facility [Line Items] | |||
Revolving line of credit, maximum borrowing capacity | $ 20 | ||
Base interest rate | 3.25% | ||
Percentage spread on variable rate | 0.25% | ||
Adjusted quick ratio | 1.25 | ||
Borrowing capacity | $ 15.5 | ||
LIBOR | |||
Line Of Credit Facility [Line Items] | |||
Revolving line of credit, basis spread over variable rate | 3.00% | ||
Prime rate | |||
Line Of Credit Facility [Line Items] | |||
Revolving line of credit, basis spread over applicable rate on default | 5.00% | ||
Revolving line of credit | |||
Line Of Credit Facility [Line Items] | |||
Bank guarantee to customer | $ 3 | ||
Letter of credit | |||
Line Of Credit Facility [Line Items] | |||
Amount drawn from revolving line of credit | $ 1.5 |
Preferred Stock (Details)
Preferred Stock (Details) - shares | Sep. 30, 2020 | Dec. 31, 2019 |
Preferred Stock | ||
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Convertible preferred stock, shares issued | 0 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Common Stock (Details)
Common Stock (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Common Stock | ||
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, voting rights | one | one |
Common Stock - Shares of common
Common Stock - Shares of common stock reserved for issuance (Details) - shares | Sep. 30, 2020 | Dec. 31, 2019 |
Options outstanding | 2,293,276 | 2,898,977 |
Shares available for grant | 1,692,599 | 1,301,881 |
Shares available for purchase/reserved for issuance | 17,936,715 | 17,218,449 |
Restricted stock units | ||
Unvested stock units outstanding | 12,730,746 | 12,639,066 |
Performance Stock Units (PSUs) | ||
Unvested stock units outstanding | 835,000 | |
2014 equity plan and 2015 inducement plan | ||
Shares available for grant | 1,692,599 | 1,301,881 |
2014 Employee Stock Purchase Plan/ESPP | ||
Shares available for purchase/reserved for issuance | 385,094 | 378,525 |
Common Stock - Repurchase Progr
Common Stock - Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Oct. 31, 2018 | |
Common Stock | ||||
Common stock authorized to repurchase | $ 25,000 | |||
Common stock repurchased (in shares) | 210,618 | |||
Average price (in dollars per share) | $ 3.25 | |||
Total cost of common stock repurchased | $ 2,033 | $ 684 | $ 8,624 | |
Maximum remaining dollar value of shares yet to be purchased under the Repurchase Program | $ 9,200 |
Share Based Awards (Details)
Share Based Awards (Details) - shares | Jan. 01, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Jan. 05, 2016 | Dec. 20, 2015 |
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Options granted, exercisable term | 3 years 9 months 3 days | ||||
Shares of common stock available for issuance | 17,936,715 | 17,218,449 | |||
Additional shares authorized | 5,636,269 | ||||
2008 Stock Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Expiry term of exercisable options | 10 years | ||||
2014 Equity Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Shares of common stock, authorized for issuance | 8,142,857 | ||||
Maximum annual percentage increase in shares issuable | 5.00% | ||||
Additional shares authorized | 5,636,269 | ||||
Additional shares authorized as a percentage of common stock outstanding | 5.00% | ||||
Amended And Restated 2015 Inducement Plan [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Shares of common stock, authorized for issuance | 1,600,000 | ||||
Shares of common stock available for issuance | 1,970,000 | ||||
Shares outstanding under the 2015 Inducement Plan | 312,500 | ||||
2014 Employee Stock Purchase Plan/ESPP | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Shares of common stock available for issuance | 385,094 | 378,525 | |||
Maximum annual percentage increase in shares issuable | 1.00% | ||||
Additional shares authorized | 1,127,253 | ||||
Additional shares authorized as a percentage of common stock outstanding | 1.00% | ||||
Maximum percentage of employee base compensation that may be utilized to purchase common stock under the ESPP | 15.00% | ||||
Percentage of purchase price of common stock at fair market value | 85.00% | ||||
Maximum increase in shares issuable | 2,142,857 | ||||
Minimum | 2008 Stock Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Options granted, exercisable term | 3 years | ||||
Maximum | 2008 Stock Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Options granted, exercisable term | 4 years | ||||
Maximum | 2014 Equity Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Shares of common stock available for issuance | 16,312,202 |
Share Based Awards - RSUs and P
Share Based Awards - RSUs and PSUs (Details) | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Unvested, Beginning Balance | shares | 12,639,066 |
Granted | shares | 7,543,265 |
Vested | shares | (5,786,845) |
Cancelled/Forfeited | shares | (1,664,740) |
Unvested, Ending Balance | shares | 12,730,746 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Unvested, Beginning Balance | $ / shares | $ 5.20 |
Granted (in dollars per share) | $ / shares | 4.54 |
Vested (in dollars per share) | $ / shares | 4.84 |
Cancelled/Forfeited (in dollars per share) | $ / shares | 4.94 |
Unvested, Ending Balance | $ / shares | $ 5.01 |
Performance Stock Units (PSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Granted | shares | 1,005,000 |
Cancelled/Forfeited | shares | (170,000) |
Unvested, Ending Balance | shares | 835,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Granted (in dollars per share) | $ / shares | $ 3.27 |
Cancelled/Forfeited (in dollars per share) | $ / shares | 3.27 |
Unvested, Ending Balance | $ / shares | $ 3.27 |
Share-Based Awards - Bonus Plan
Share-Based Awards - Bonus Plans (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 26, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award | ||||||||||
Share withholding | 1,305,947 | |||||||||
Taxes paid for net settlement of stock-settled bonus | $ 6,485,000 | $ 5,492,000 | ||||||||
Stock-based compensation expense | $ 2,644,000 | $ 8,012,000 | $ 23,723,000 | 27,159,000 | ||||||
Merger Agreement | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||||||||
Merger price (US Dollar per share) | $ 7.05 | $ 7.05 | $ 7.05 | $ 7.05 | ||||||
2018 Bonus Plan | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||||||||
Shares granted, net of shares withheld for taxes | 1,338,220 | |||||||||
Share withholding | 832,635 | |||||||||
Taxes paid for net settlement of stock-settled bonus | $ 4,100,000 | |||||||||
Stock-based compensation expense | 1,100,000 | |||||||||
2019 Bonus Plan | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||||||||
Shares granted, net of shares withheld for taxes | 1,061,165 | |||||||||
Share withholding | 669,517 | |||||||||
Taxes paid for net settlement of stock-settled bonus | $ 2,900,000 | |||||||||
Stock-based compensation expense | $ 559,000 | $ 757,000 | $ 5,500,000 | |||||||
2020 Bonus Plan | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||||||||
Stock-based compensation expense | $ 5,700,000 | $ 5,700,000 | ||||||||
Minimum payout (as a percentage) | 100.00% | |||||||||
Bonus expense | $ 3,500,000 | |||||||||
Cumulative expense catch-up recorded in bonus expense for revising performance estimates | 515,000 | |||||||||
2020 Bonus Plan | Adjustment | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||||||||
Stock-based compensation expense | (5,700,000) | |||||||||
Bonus expense | $ 5,700,000 |
Share Based Awards - Shares ava
Share Based Awards - Shares available and options activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Shares Available for Issuance, Beginning Balance | 1,301,881 | |
Number of Shares Available for Issuance, Authorized | 5,636,269 | |
Shares withheld for net settlement of equity awards (in shares) | 1,305,947 | |
Number of Shares Available for Issuance, Ending Balance | 1,692,599 | 1,301,881 |
Options Activity Rollforward | ||
Options outstanding, Beginning Balance | 2,898,977 | |
Options exercised | (443,674) | |
Options cancelled | (162,027) | |
Options outstanding, Ending Balance | 2,293,276 | 2,898,977 |
Vested and exercisable- end of the period | 2,068,275 | |
Vested and expected to vest - end of the period | 2,261,882 | |
Options Activity, Weighted Average Exercise Price Rollforward | ||
Options Outstanding, Weighted-Average Exercise Price, Beginning Balance | $ / shares | $ 5.17 | |
Options Outstanding, Weighted Average Exercise Price Exercised | $ / shares | 4.12 | |
Options Outstanding, Weighted Average Exercise Price Cancelled | $ / shares | 5.46 | |
Options Outstanding, Weighted-Average Exercise Price, Ending Balance | $ / shares | 5.36 | $ 5.17 |
Options Outstanding, Weighted-Average Exercise Price, Vested and exercisable | $ / shares | 5.45 | |
Options Outstanding, Weighted-Average Exercise Price, Vested and expected to vest | $ / shares | $ 5.37 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Options Outstanding, Weighted-Average Remaining Contractual Term (Years) | 4 years 25 days | 4 years 10 months 20 days |
Options Outstanding, Weighted-Average Remaining Contractual Term Vested and exercisable (Years) | 3 years 9 months 3 days | |
Options Outstanding, Weighted-Average Remaining Contractual Term Vested and expected to vest (Years) | 3 years 11 months 8 days | |
Options Outstanding, Aggregate Intrinsic Value | $ | $ 4,358 | $ 1,556 |
Options Outstanding, Vested and exercisable, Aggregate Intrinsic Value | $ | 3,800 | |
Options Outstanding, Vested and expected to vest, Aggregate Intrinsic Value | $ | $ 4,281 | |
Shares under Bonus Plans | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares issued | (1,730,682) | |
Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares cancelled or forfeited | 162,027 | |
Restricted stock units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares issued | (5,812,583) | |
Performance Stock Units (PSUs) | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares issued | (1,005,000) | |
Restricted and Performance stock units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares cancelled or forfeited | 1,834,740 |
Share Based Awards - Compensati
Share Based Awards - Compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Allocation of employee service stock-based compensation expense | ||||
Stock-based compensation expense | $ 2,644 | $ 8,012 | $ 23,723 | $ 27,159 |
Cost of revenue | ||||
Allocation of employee service stock-based compensation expense | ||||
Stock-based compensation expense | (57) | 1,052 | 2,739 | 3,859 |
Research and development | ||||
Allocation of employee service stock-based compensation expense | ||||
Stock-based compensation expense | 367 | 3,279 | 8,710 | 11,015 |
Sales and marketing | ||||
Allocation of employee service stock-based compensation expense | ||||
Stock-based compensation expense | 1,208 | 2,029 | 6,670 | 6,367 |
General and administrative | ||||
Allocation of employee service stock-based compensation expense | ||||
Stock-based compensation expense | $ 1,126 | $ 1,652 | $ 5,604 | $ 5,918 |
Share Based Awards - Valuation
Share Based Awards - Valuation assumptions (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award | ||||
Options granted | 0 | 0 | 0 | |
Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||
Risk-free interest rate (as a percent) | 2.50% | |||
Expected volatility (as a percent) | 50.00% | |||
Expected life (in years) | 6 years 1 month 6 days | |||
ESPP | ||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||
Risk-free interest rate (as a percent) | 0.10% | 1.70% | 0.80% | 2.10% |
Expected volatility (as a percent) | 57.00% | 40.00% | 51.00% | 41.00% |
Expected life (in years) | 1 year 3 months 18 days | 1 year 3 months 18 days | 1 year 3 months 18 days | 1 year 3 months 18 days |
Share Based Awards - Unrecogniz
Share Based Awards - Unrecognized expense (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Unrecognized stock-based compensation expense | $ 52.6 |
Options | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Unrecognized stock-based compensation expense | $ 0.3 |
Unrecognized stock-based compensation expense, Remaining Weighted-Average Recognition Period (in years) | 2 years |
Restricted stock units | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Unrecognized stock-based compensation expense | $ 47.8 |
Unrecognized stock-based compensation expense, Remaining Weighted-Average Recognition Period (in years) | 2 years 8 months 12 days |
Performance Stock Units (PSUs) | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Unrecognized stock-based compensation expense | $ 2.4 |
Unrecognized stock-based compensation expense, Remaining Weighted-Average Recognition Period (in years) | 1 year 7 months 6 days |
ESPP | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Unrecognized stock-based compensation expense | $ 2.1 |
Unrecognized stock-based compensation expense, Remaining Weighted-Average Recognition Period (in years) | 1 year 6 months |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Employee Benefit Plan | |
Age restriction of employees | 21 years |
Employee's contribution to plan 401(k) plan | $ 19,500 |
Catch up contribution limit for employees age 50 or older | $ 6,500 |
Minimum age of employees with catch up contribution limit | 50 years |
Employer match of employee contribution, as a percent | 100.00% |
Maximum employee contribution eligible for match, as a percent | 3.00% |
Employer maximum annual contribution per employee | $ 2,000 |
Commitments and Contingencies -
Commitments and Contingencies - Indemnification (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies | |
Refund term | 3 years |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Leases | |||||
Options to extend the leases | true | ||||
Options to terminate | true | ||||
Termination term | 1 year | ||||
Current lease commitment liabilities | $ 4,753 | $ 4,753 | $ 5,664 | ||
Noncurrent lease commitment liabilities | 6,680 | 6,680 | 10,088 | ||
Right-of-use asset | 10,346 | 10,346 | $ 13,683 | ||
Operating lease cost | $ 1,300 | $ 1,300 | $ 3,700 | $ 4,700 | |
Minimum | |||||
Leases | |||||
Remaining lease terms (in years) | 1 year | 1 year | |||
Maximum | |||||
Leases | |||||
Remaining lease terms (in years) | 7 years | 7 years | |||
Renewal term | 5 years | 5 years |
Leases - Future maturities of l
Leases - Future maturities of lease liabilities (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Future maturities of lease liabilities | |
2020 (remaining) | $ 1,400 |
2021 | 4,968 |
2022 | 3,526 |
2023 | 1,518 |
2024 | 355 |
Thereafter | 579 |
Total lease payments | 12,346 |
Less: imputed interest | (913) |
Total lease liability | $ 11,433 |
Leases - Weighted average disco
Leases - Weighted average discount rate and remaining lease term (Details) | Sep. 30, 2020 |
Leases | |
Weighted average discount rate | 5.30% |
Weighted average remaining lease term | 35 months |
Unearned Revenue - Changes in U
Unearned Revenue - Changes in Unearned Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Unearned Revenue | ||||
Balance, beginning of period | $ 113,213 | $ 106,399 | $ 118,211 | $ 105,837 |
Billings, excluding billings for customer arrangements with termination rights | 40,123 | 46,246 | 133,961 | 135,904 |
Additions to unearned revenue upon expiration of termination rights | (4,634) | (5,056) | (13,878) | (15,118) |
Recognition of revenue | (50,079) | (50,900) | (158,434) | (150,058) |
Acquired unearned revenue | 275 | |||
Balance, end of period | 107,891 | 106,801 | 107,891 | 106,801 |
Increase (decrease) in total unbilled accounts receivable | (80) | 1,301 | 188 | 1,090 |
Revenue Reported in Consolidated Statement of Operations | $ 49,999 | $ 52,201 | $ 158,622 | $ 151,148 |
Unearned Revenue - Narratives (
Unearned Revenue - Narratives (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 118,900 | |
Customer arrangements with termination rights | $ 11,268 | $ 16,130 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percentage of remaining performance obligation expected to be recognized in period | 76.00% | |
Period of remaining performance obligation expected to be recognized | 12 months |
Segment and Disaggregated Rev_3
Segment and Disaggregated Revenue Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)personsegment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Number of business activities | segment | 1 | ||||
Number of segment managers | person | 0 | ||||
Property and equipment-net | $ 3,346 | $ 3,346 | $ 4,804 | ||
Revenue | 49,999 | $ 52,201 | 158,622 | $ 151,148 | |
Recurring revenue | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 47,428 | 44,820 | 136,850 | 129,098 | |
Cloud services | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 20,890 | 17,591 | 59,073 | 49,163 | |
On-premise subscriptions - point-in-time | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 5,139 | 5,964 | 14,240 | 17,394 | |
On-premise subscriptions - ratable | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 5,267 | 4,902 | 15,232 | 13,872 | |
Software support on perpetual licenses- ratable | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 16,132 | 16,363 | 48,305 | 48,669 | |
Non-recurring revenue | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 2,571 | 7,381 | 21,772 | 22,050 | |
Perpetual license - point-in-time | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 1,326 | 6,252 | 18,314 | 18,420 | |
Professional services - point-in-time | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 1,245 | 1,129 | 3,458 | 3,630 | |
India | Net Property and Equipment | Geographic | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Property and equipment-net | 1,400 | $ 1,400 | $ 2,000 | ||
Concentration risk, percentage | 41.00% | 42.00% | |||
United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 22,448 | 23,376 | $ 67,746 | 64,849 | |
International | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | $ 27,551 | $ 28,825 | $ 90,876 | $ 86,299 | |
Germany | Total revenue | Geographic | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Concentration risk, percentage | 13.00% | 14.00% | 15.00% | 15.00% | |
Revenue | $ 6,500 | $ 7,300 | $ 23,600 | $ 23,400 |
Net Loss per Share (Details)
Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||
Net loss | $ (16,272) | $ (8,203) | $ (37,441) | $ (40,892) |
Denominator: | ||||
Weighted-average shares used to compute basic and diluted net loss per share | 117,703 | 110,831 | 116,192 | 109,147 |
Basic and diluted net loss per share | $ (0.14) | $ (0.07) | $ (0.32) | $ (0.37) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive (Details) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from net loss per share (shares) | 16,085,695 | 17,429,417 |
Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from net loss per share (shares) | 2,293,276 | 2,929,095 |
Restricted stock units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from net loss per share (shares) | 12,730,746 | 13,806,088 |
Performance Stock Units (PSUs) | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from net loss per share (shares) | 835,000 | |
ESPP | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from net loss per share (shares) | 226,673 | 194,622 |
Stock-settled bonus shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from net loss per share (shares) | 499,612 |