Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 20, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39039 | |
Entity Registrant Name | Cloudflare, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-0805829 | |
Entity Address, Address Line One | 101 Townsend Street | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94107 | |
City Area Code | 888 | |
Local Phone Number | 993-5273 | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value | |
Trading Symbol | NET | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Entity Central Index Key | 0001477333 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 292,580,945 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 41,637,541 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 159,318 | $ 204,178 |
Available-for-sale securities | 1,425,302 | 1,445,759 |
Accounts receivable, net | 177,920 | 148,544 |
Contract assets | 8,673 | 8,292 |
Restricted cash short-term | 2,797 | 10,555 |
Prepaid expenses and other current assets | 44,050 | 70,556 |
Total current assets | 1,818,060 | 1,887,884 |
Property and equipment, net | 293,259 | 286,600 |
Goodwill | 148,047 | 148,047 |
Acquired intangible assets, net | 22,708 | 32,483 |
Operating lease right-of-use assets | 130,043 | 132,360 |
Deferred contract acquisition costs, noncurrent | 107,482 | 93,145 |
Restricted cash | 2,264 | 471 |
Other noncurrent assets | 11,345 | 6,918 |
Total assets | 2,533,208 | 2,587,908 |
Current liabilities: | ||
Accounts payable | 32,376 | 35,607 |
Accrued expenses and other current liabilities | 54,600 | 66,425 |
Accrued compensation | 46,774 | 42,014 |
Operating lease liabilities | 35,366 | 33,275 |
Liability for early exercise of unvested stock options | 693 | 1,902 |
Deferred revenue | 267,979 | 218,647 |
Current portion of convertible senior notes, net | 35,330 | 0 |
Total current liabilities | 473,118 | 397,870 |
Convertible senior notes, net | 1,281,383 | 1,436,192 |
Operating lease liabilities, noncurrent | 106,992 | 107,624 |
Deferred revenue, noncurrent | 18,860 | 11,732 |
Other noncurrent liabilities | 11,021 | 10,526 |
Total liabilities | 1,891,374 | 1,963,944 |
Commitments and contingencies (Note 8) | ||
Stockholders’ Equity | ||
Additional paid-in capital | 1,620,251 | 1,475,423 |
Accumulated deficit | (972,440) | (839,891) |
Accumulated other comprehensive loss | (6,309) | (11,896) |
Total stockholders’ equity | 641,834 | 623,964 |
Total liabilities and stockholders’ equity | 2,533,208 | 2,587,908 |
Class A common stock | ||
Stockholders’ Equity | ||
Common stock, value, issued | 291 | 286 |
Class B common stock | ||
Stockholders’ Equity | ||
Common stock, value, issued | $ 41 | $ 42 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Class A common stock | ||
Stockholders’ Equity | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 2,250,000,000 | 2,250,000,000 |
Common stock, shares issued (in shares) | 291,831,902 | 286,560,947 |
Common stock, shares outstanding (in shares) | 291,831,902 | 286,560,947 |
Class B common stock | ||
Stockholders’ Equity | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 315,000,000 | 315,000,000 |
Common stock, shares issued (in shares) | 41,807,386 | 43,524,514 |
Common stock, shares outstanding (in shares) | 41,807,386 | 43,524,514 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 308,494 | $ 234,517 | $ 598,669 | $ 446,684 |
Cost of revenue | 75,221 | 55,804 | 145,653 | 102,855 |
Gross profit | 233,273 | 178,713 | 453,016 | 343,829 |
Operating expenses: | ||||
Sales and marketing | 146,688 | 117,622 | 283,689 | 217,679 |
Research and development | 89,610 | 75,114 | 171,149 | 142,168 |
General and administrative | 53,147 | 50,518 | 101,622 | 88,547 |
Total operating expenses | 289,445 | 243,254 | 556,460 | 448,394 |
Loss from operations | (56,172) | (64,541) | (103,444) | (104,565) |
Non-operating income (expense): | ||||
Interest income | 16,536 | 1,641 | 30,023 | 2,702 |
Interest expense | (1,539) | (1,040) | (3,665) | (2,597) |
Loss on extinguishment of debt | (50,300) | 0 | (50,300) | 0 |
Other income (expense), net | (1,527) | 233 | (2,384) | (254) |
Total non-operating income (expense), net | (36,830) | 834 | (26,326) | (149) |
Loss before income taxes | (93,002) | (63,707) | (129,770) | (104,714) |
Provision for (Benefit from) income taxes | 1,465 | (170) | 2,779 | 204 |
Net loss | $ (94,467) | $ (63,537) | $ (132,549) | $ (104,918) |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.28) | $ (0.20) | $ (0.40) | $ (0.32) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.28) | $ (0.20) | $ (0.40) | $ (0.32) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 332,297 | 325,197 | 331,448 | 324,574 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 332,297 | 325,197 | 331,448 | 324,574 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (94,467) | $ (63,537) | $ (132,549) | $ (104,918) |
Other comprehensive income (loss): | ||||
Change in unrealized gain (loss) on investments, net of tax | (171) | (3,333) | 5,587 | (13,433) |
Other comprehensive income (loss) | (171) | (3,333) | 5,587 | (13,433) |
Comprehensive loss | $ (94,638) | $ (66,870) | $ (126,962) | $ (118,351) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Additional paid-in capital | Additional paid-in capital Cumulative Effect, Period of Adoption, Adjustment | Accumulated deficit | Accumulated deficit Cumulative Effect, Period of Adoption, Adjustment | Accumulated other comprehensive loss | Class A common stock | Class A common stock Common stock | Class A common stock Common stock Restricted Stock | Class B common stock | Class B common stock Common stock |
Beginning balance (in shares) at Dec. 31, 2021 | 277,708,000 | 45,904,000 | ||||||||||
Beginning balance at Dec. 31, 2021 | $ 811,359 | $ (284,437) | $ 1,494,512 | $ (318,756) | $ (680,829) | $ 34,319 | $ (2,645) | $ 277 | $ 44 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of common stock in connection with acquisition (in shares) | 522,000 | |||||||||||
Issuance of common stock in connection with acquisition | 65,505 | 65,504 | $ 1 | |||||||||
Issuance of restricted stock in connection with acquisition (in shares) | 52,000 | |||||||||||
Issuance of common stock upon exercise of stock options (in shares) | 158,000 | 1,187,000 | ||||||||||
Issuance of common stock upon exercise of stock options | 5,977 | 5,976 | $ 1 | |||||||||
Repurchases of unvested common stock (in shares) | (2,000) | |||||||||||
Issuance of common stock related to early exercised stock options (in shares) | 23,000 | |||||||||||
Vesting of shares issued upon early exercise of stock options | 1,560 | 1,559 | $ 1 | |||||||||
Issuance of common stock related to settlement of restricted stock units (RSUs) (in shares) | 818,000 | 588,000 | ||||||||||
Issuance of common stock related to settlement of restricted stock units (RSUs) | 0 | (1) | $ 1 | |||||||||
Tax withholding on RSU settlement (in shares) | (14,000) | |||||||||||
Tax withholding on RSU settlement | (1,264) | (1,264) | ||||||||||
Conversion of Class B to Class A common stock (in shares) | 3,065,000 | (3,065,000) | ||||||||||
Conversion of Class B to Class A common stock | 0 | $ 4 | $ (4) | |||||||||
Common stock issued under employee stock purchase plan (in shares) | 154,000 | |||||||||||
Common stock issued under employee stock purchase plan | 8,688 | 8,688 | ||||||||||
Settlement of common stock in connection with convertible senior notes (in shares) | 299,000 | |||||||||||
Settlement of common stock in connection with convertible senior notes | (201) | (201) | ||||||||||
Stock-based compensation | 91,654 | 91,654 | ||||||||||
Net loss | (104,918) | (104,918) | $ (90,864) | $ (14,054) | ||||||||
Other comprehensive (loss) income | (13,433) | (13,433) | ||||||||||
Ending balance (in shares) at Jun. 30, 2022 | 282,774,000 | 44,623,000 | ||||||||||
Ending balance at Jun. 30, 2022 | 580,490 | 1,347,671 | (751,428) | (16,078) | $ 282 | $ 43 | ||||||
Beginning balance (in shares) at Mar. 31, 2022 | 280,412,000 | 45,128,000 | ||||||||||
Beginning balance at Mar. 31, 2022 | 515,477 | 1,215,790 | (687,891) | (12,745) | $ 280 | $ 43 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of common stock in connection with acquisition (in shares) | 503,000 | |||||||||||
Issuance of common stock in connection with acquisition | 63,548 | 63,547 | $ 1 | |||||||||
Issuance of common stock upon exercise of stock options (in shares) | 93,000 | 418,000 | ||||||||||
Issuance of common stock upon exercise of stock options | 2,971 | 2,971 | ||||||||||
Vesting of shares issued upon early exercise of stock options | 719 | 718 | $ 1 | |||||||||
Issuance of common stock related to settlement of restricted stock units (RSUs) (in shares) | 408,000 | 289,000 | ||||||||||
Issuance of common stock related to settlement of restricted stock units (RSUs) | 0 | $ (1) | $ 1 | |||||||||
Tax withholding on RSU settlement (in shares) | (8,000) | |||||||||||
Tax withholding on RSU settlement | (516) | (516) | ||||||||||
Conversion of Class B to Class A common stock (in shares) | 1,204,000 | (1,204,000) | ||||||||||
Conversion of Class B to Class A common stock | 0 | $ 2 | $ (2) | |||||||||
Common stock issued under employee stock purchase plan (in shares) | 154,000 | |||||||||||
Common stock issued under employee stock purchase plan | 8,688 | 8,688 | ||||||||||
Stock-based compensation | 56,473 | 56,473 | ||||||||||
Net loss | (63,537) | (63,537) | $ (55,081) | $ (8,456) | ||||||||
Other comprehensive (loss) income | (3,333) | (3,333) | ||||||||||
Ending balance (in shares) at Jun. 30, 2022 | 282,774,000 | 44,623,000 | ||||||||||
Ending balance at Jun. 30, 2022 | 580,490 | 1,347,671 | (751,428) | (16,078) | $ 282 | $ 43 | ||||||
Beginning balance (in shares) at Dec. 31, 2022 | 286,560,947 | 286,561,000 | 43,524,514 | 43,525,000 | ||||||||
Beginning balance at Dec. 31, 2022 | 623,964 | 1,475,423 | (839,891) | (11,896) | $ 286 | $ 42 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of common stock upon exercise of stock options (in shares) | 240,000 | 1,280,000 | ||||||||||
Issuance of common stock upon exercise of stock options | 7,059 | 7,058 | $ 1 | |||||||||
Repurchases of unvested common stock (in shares) | (17,000) | |||||||||||
Vesting of shares issued upon early exercise of stock options | 1,171 | 1,170 | $ 1 | |||||||||
Issuance of common stock related to settlement of restricted stock units (RSUs) (in shares) | 1,533,000 | 322,000 | ||||||||||
Issuance of common stock related to settlement of restricted stock units (RSUs) | 0 | (2) | $ 2 | |||||||||
Tax withholding on RSU settlement (in shares) | (41,000) | (13,000) | ||||||||||
Tax withholding on RSU settlement | (3,383) | (3,383) | ||||||||||
Conversion of Class B to Class A common stock (in shares) | 3,307,000 | (3,307,000) | ||||||||||
Conversion of Class B to Class A common stock | 0 | $ 3 | $ (3) | |||||||||
Common stock issued under employee stock purchase plan (in shares) | 249,000 | |||||||||||
Common stock issued under employee stock purchase plan | 10,450 | 10,450 | ||||||||||
Stock-based compensation | 129,535 | 129,535 | ||||||||||
Net loss | (132,549) | (132,549) | $ (115,760) | $ (16,789) | ||||||||
Other comprehensive (loss) income | 5,587 | 5,587 | ||||||||||
Ending balance (in shares) at Jun. 30, 2023 | 291,831,902 | 291,832,000 | 41,807,386 | 41,807,000 | ||||||||
Ending balance at Jun. 30, 2023 | 641,834 | 1,620,251 | (972,440) | (6,309) | $ 291 | $ 41 | ||||||
Beginning balance (in shares) at Mar. 31, 2023 | 289,372,000 | 42,395,000 | ||||||||||
Beginning balance at Mar. 31, 2023 | 652,586 | 1,536,367 | (877,973) | (6,138) | $ 289 | $ 41 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of common stock upon exercise of stock options (in shares) | 147,000 | 567,000 | ||||||||||
Issuance of common stock upon exercise of stock options | 3,754 | 3,754 | ||||||||||
Repurchases of unvested common stock (in shares) | (17,000) | |||||||||||
Vesting of shares issued upon early exercise of stock options | 581 | 580 | $ 1 | |||||||||
Issuance of common stock related to settlement of restricted stock units (RSUs) (in shares) | 818,000 | 133,000 | ||||||||||
Issuance of common stock related to settlement of restricted stock units (RSUs) | 0 | (1) | $ 1 | |||||||||
Tax withholding on RSU settlement (in shares) | (20,000) | (5,000) | ||||||||||
Tax withholding on RSU settlement | (1,325) | (1,325) | ||||||||||
Conversion of Class B to Class A common stock (in shares) | 1,283,000 | (1,283,000) | ||||||||||
Conversion of Class B to Class A common stock | 0 | $ 1 | $ (1) | |||||||||
Common stock issued under employee stock purchase plan (in shares) | 249,000 | |||||||||||
Common stock issued under employee stock purchase plan | 10,450 | 10,450 | ||||||||||
Stock-based compensation | 70,426 | 70,426 | ||||||||||
Net loss | (94,467) | (94,467) | $ (82,620) | $ (11,847) | ||||||||
Other comprehensive (loss) income | (171) | (171) | ||||||||||
Ending balance (in shares) at Jun. 30, 2023 | 291,831,902 | 291,832,000 | 41,807,386 | 41,807,000 | ||||||||
Ending balance at Jun. 30, 2023 | $ 641,834 | $ 1,620,251 | $ (972,440) | $ (6,309) | $ 291 | $ 41 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash Flows From Operating Activities | ||
Net loss | $ (132,549) | $ (104,918) |
Adjustments to reconcile net loss to cash provided by operating activities: | ||
Depreciation and amortization expense | 65,182 | 45,352 |
Non-cash operating lease costs | 21,925 | 18,106 |
Amortization of deferred contract acquisition costs | 29,011 | 20,218 |
Stock-based compensation expense | 125,793 | 88,780 |
Amortization of debt issuance costs | 2,470 | 2,332 |
Net accretion of discounts and amortization of premiums on available-for-sale securities | (19,050) | 3,798 |
Deferred income taxes | (613) | (1,833) |
Provision for bad debt | 6,037 | 2,010 |
Loss on extinguishment of debt | 50,300 | 0 |
Other | 494 | 264 |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable, net | (35,413) | (26,947) |
Contract assets | (381) | (1,116) |
Deferred contract acquisition costs | (43,348) | (30,604) |
Prepaid expenses and other current assets | (13,996) | (5,067) |
Other noncurrent assets | (1,991) | 371 |
Accounts payable | 6,602 | 8,174 |
Accrued expenses and other current liabilities | 1,454 | (30,479) |
Operating lease liabilities | (18,149) | (20,523) |
Deferred revenue | 56,460 | 34,477 |
Other noncurrent liabilities | 627 | 389 |
Net cash provided by operating activities | 100,865 | 2,784 |
Cash Flows From Investing Activities | ||
Purchases of property and equipment | (56,289) | (61,565) |
Capitalized internal-use software | (10,703) | (10,034) |
Cash paid for acquisitions, net of cash acquired | 0 | (86,941) |
Purchases of available-for-sale securities | (795,096) | (422,374) |
Sales of available-for-sale securities | 20,248 | 0 |
Maturities of available-for-sale securities | 857,456 | 414,036 |
Other investing activities | 59 | 25 |
Net cash provided by (used in) investing activities | 15,675 | (166,853) |
Cash Flows From Financing Activities | ||
Repayments of convertible senior notes | (172,249) | (16,571) |
Proceeds from the exercise of stock options | 7,059 | 5,977 |
Proceeds from the early exercise of stock options | 0 | 62 |
Repurchases of unvested common stock | (34) | (3) |
Proceeds from the issuance of common stock for employee stock purchase plan | 10,450 | 8,688 |
Payment of tax withholding obligation on RSU settlement | (3,383) | (1,264) |
Payment of indemnity holdback | (9,208) | 0 |
Net cash used in financing activities | (167,365) | (3,111) |
Net decrease in cash, cash equivalents, and restricted cash | (50,825) | (167,180) |
Cash, cash equivalents, and restricted cash, beginning of period | 215,204 | 320,958 |
Cash, cash equivalents, and restricted cash, end of period | 164,379 | 153,778 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 595 | 642 |
Cash paid for income taxes, net of refunds | 2,557 | 990 |
Cash paid for operating lease liabilities | 18,306 | 16,761 |
Supplemental Disclosure of Non-cash Investing and Financing Activities: | ||
Stock-based compensation capitalized for software development | 3,525 | 2,656 |
Accounts payable and accrued expenses related to property and equipment additions | 8,347 | 35,217 |
Vesting of early exercised stock options | 1,171 | 1,560 |
Indemnity holdback consideration associated with business combinations | 0 | 10,582 |
Issuance of common stock related to an acquisition | 0 | 65,504 |
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ 16,636 | $ 17,537 |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization and Description of Business Cloudflare, Inc. (the Company, Cloudflare, we, us, or our) is a global cloud services provider that delivers a broad range of services to businesses of all sizes and in all geographies, making them more secure, enhancing the performance of their business-critical applications, and eliminating the cost and complexity of managing individual network hardware. Cloudflare’s network serves as a scalable, easy-to-use, unified control plane to deliver security, performance, and reliability across on-premises, hybrid, cloud, and software-as-a-service (SaaS) applications. The Company was incorporated in Delaware in July 2009. The Company is headquartered in San Francisco, California. Basis of Presentation and Principles of Consolidation The accompanying interim condensed consolidated financial statements and accompanying notes have been prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP) and applicable regulations of the Securities and Exchange Commission (the SEC) regarding interim financial reporting, and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year ends on December 31. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable required disclosures and regulations of the SEC. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 . Unaudited Interim Condensed Consolidated Financial Information The accompanying interim condensed consolidated balance sheet as of June 30, 2023, the condensed consolidated statements of operations and of comprehensive loss for the three and six months ended June 30, 2023 and 2022, the condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022, the condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2023 and 2022, and the related footnote disclosures are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim condensed consolidated financial statements include all adjustments necessary to state fairly the Company’s financial position as of June 30, 2023, its results of operations for the three and six months ended June 30, 2023 and 2022, and its cash flows for the six months ended June 30, 2023 and 2022. The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results expected for the full year ending December 31, 2023 or any future period. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 . 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 amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes to the condensed consolidated financial statements. Such estimates include, but are not limited to, allowance for doubtful accounts, deferred contract acquisitions costs, the period of benefit generated from the Company’s deferred contract acquisition costs, the capitalization and estimated useful life of internal-use software, valuation of acquired intangible assets, the assessment of recoverability of intangible assets and their estimated useful lives, useful lives of property and equipment, the determination of the incremental borrowing rate used for operating lease liabilities, the valuation and recognition of stock-based compensation awards, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Management bases these estimates and assumptions on historical experience and on various other assumptions that are believed to be reasonable. Due in part to the Russia-Ukraine |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Significant Accounting Policies The Company's significant accounting policies are discussed in the "Notes to Consolidated Financial Statements, Note 2. Summary of Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022. There have been no significant changes to these policies that have had a material impact on the Company's condensed consolidated financial statements and related notes, except as noted below. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements There have been no recently adopted accounting pronouncements since the filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2022 that may have a material impact on the Company's condensed consolidated financial statements. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue Subscription and support revenue is recognized over time and accounted for substantially all of the Company’s revenue for the three and six months ended June 30, 2023 and 2022. The following table summarizes the revenue by region based on the billing address of customers who have contracted to use the Company’s global network and products: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (dollars in thousands) Amount Percentage Amount Percentage Amount Percentage Amount Percentage United States $ 161,692 53 % $ 124,259 53 % $ 314,610 53 % $ 235,609 53 % Europe, Middle East, and Africa 84,346 27 % 61,147 26 % 162,677 27 % 116,939 26 % Asia Pacific 40,399 13 % 32,755 14 % 79,617 13 % 62,680 14 % Other 22,057 7 % 16,356 7 % 41,765 7 % 31,456 7 % Total $ 308,494 100 % $ 234,517 100 % $ 598,669 100 % $ 446,684 100 % The following table summarizes the revenue from contracts by type of customer: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (dollars in thousands) Amount Percentage Amount Percentage Amount Percentage Amount Percentage Channel partners $ 47,148 15 % $ 28,933 12 % $ 88,151 15 % $ 53,289 12 % Direct customers 261,346 85 % 205,584 88 % 510,518 85 % 393,395 88 % Total $ 308,494 100 % $ 234,517 100 % $ 598,669 100 % $ 446,684 100 % Contract Balances Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period. For the six months ended June 30, 2023 and 2022, the Company recognized revenue of $169.7 million and $92.8 million, respectively, that was included in the corresponding contract liability balance at the beginning of the periods presented. The Company receives payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. Standard payment terms are due upon receipt. Contract assets include amounts related to the Company’s contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced. The following table summarizes the activity of the deferred contract acquisition costs: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Beginning balance $ 98,427 $ 76,266 $ 93,145 $ 70,320 Capitalization of contract acquisition costs 23,957 14,996 43,348 30,604 Amortization of deferred contract acquisition costs (14,902) (10,556) (29,011) (20,218) Ending balance $ 107,482 $ 80,706 $ 107,482 $ 80,706 The Company did not recognize any impairment losses of deferred contract acquisition costs during the periods presented. Remaining Performance Obligations As of June 30, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $1,036.2 million. As of June 30, 2023, the Company expected to recognize 75% of its remaining performance obligations as revenue over the next 12 months with the remainder recognized thereafter. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received from sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities measured at fair value are classified into the following categories: • Level I: Observable inputs are unadjusted quoted prices in active markets for identical assets or liabilities; • Level II: Observable 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; and • Level III: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation. The Company's cash equivalents and restricted cash are comprised of highly liquid money market funds. The Company classifies money market funds within Level I of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company classifies its investments, which are comprised of U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate bonds, within Level II of the fair value hierarchy because the fair value of these securities is priced by using inputs based on non-binding market consensus prices that are primarily corroborated by observable market data or quoted market prices for similar instruments. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each period. There were no transfers between levels during the periods presented. The following table summarizes the Company’s cash and available-for-sale securities’ amortized cost, unrealized gains (losses), and fair value by significant investment category reported as cash and cash equivalents, restricted cash short-term, restricted cash, or available-for-sale securities as of June 30, 2023 and December 31, 2022. (in thousands) Reported as: June 30, 2023 Amortized Unrealized Unrealized Fair Value Cash & Available-for-sale securities Restricted Cash $ 132,434 $ — $ — $ 132,434 $ 127,373 $ — $ 5,061 Level I: Money market funds 25,018 — — 25,018 25,018 — — Level II: Corporate bonds 229,829 — (1,768) 228,061 — 228,061 — U.S. treasury securities 878,373 31 (4,227) 874,177 — 874,177 — U.S. government agency securities 63,663 1 (266) 63,398 — 63,398 — Commercial paper 266,597 — (4) 266,593 6,927 259,666 — Subtotal 1,438,462 32 (6,265) 1,432,229 6,927 1,425,302 — Total assets measured at fair value on a recurring basis $ 1,595,914 $ 32 $ (6,265) $ 1,589,681 $ 159,318 $ 1,425,302 $ 5,061 (in thousands) Reported as: December 31, 2022 Amortized Unrealized Unrealized Fair Cash & Available-for-sale securities Restricted Cash $ 87,719 $ — $ — $ 87,719 $ 77,164 $ — $ 10,555 Level I: Money market funds 125,450 — — 125,450 124,979 — 471 Level II: Corporate bonds 258,617 46 (2,621) 256,042 2,035 254,007 — U.S. treasury securities 818,379 20 (9,233) 809,166 — 809,166 — U.S. government agency securities 25,283 — (31) 25,252 — 25,252 — Commercial paper 357,334 — — 357,334 — 357,334 — Subtotal 1,459,613 66 (11,885) 1,447,794 2,035 1,445,759 — Total assets measured at fair value on a recurring basis $ 1,672,782 $ 66 $ (11,885) $ 1,660,963 $ 204,178 $ 1,445,759 $ 11,026 Included in prepaid expenses and other current assets on the December 31, 2022 consolidated balance sheet is $37.5 million of proceeds receivable resulting from maturities of US government agency securities that were initiated on December 31, 2022 and settled on January 3, 2023. As of June 30, 2023, the Company had $5.1 million in total restricted cash mainly related to irrevocable standby letters of credit and bank guarantees that are required under lease agreements and indemnity holdback consideration associated with business combinations. For further details on the indemnity holdback, refer to Note 13 to these condensed consolidated financial statements. The aggregate fair value of the Company’s money market funds approximated amortized cost and, as such, there were no unrealized gains or losses on money market funds as of June 30, 2023 and December 31, 2022. Realized gains and losses, net of tax, were not material for any of the periods presented. The amortized cost of available-for-sale investments with maturities less than one year was $1,315.5 million and $1,251.6 million as of June 30, 2023 and December 31, 2022, respectively. The amortized cost of available-for-sale investments with maturities greater than one year was $116.1 million and $205.9 million as of June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023, net unrealized loss on investments was $6.3 million and was included in accumulated other comprehensive income on the condensed consolidated balance sheet. As of December 31, 2022, net unrealized loss on investments was $11.9 million and was included in accumulated other comprehensive income on the condensed consolidated balance sheet. The unrealized gains and losses on available-for-sale investments are related to U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate bonds. The Company determined any unrealized losses to be temporary. Factors considered in determining whether a loss is temporary include the financial condition and near-term prospects of the investee, the extent of the loss related to the credit of the issuer, the expected cash flows from the security, the Company’s intent to sell the security, and whether or not the Company will be required to sell the security before the recovery of its amortized cost. As of June 30, 2023, the Company's investment portfolio consisted of investment grade securities with an average credit rating of AA+. The Company carries the 2026 Notes (as defined below) issued in August 2021 at face value less the unamortized issuance costs on its condensed consolidated balance sheets and presents that fair value for disclosure purposes only. As of June 30, 2023 , the fair value of the 2026 Notes was $1,098.9 million. The fair value of the 2026 Notes, which are classified as Level II financial instruments, was determined based on the quoted bid prices of the 2026 Notes in an over-the-counter market on the last trading day of the reporting period. As of June 30, 2023, t he Company carried the 2025 Notes (as defined below) issued in May 2020 at face value less the unamortized issuance costs on its condensed consolidated balance sheets and presents that fair value for disclosure purposes only. As of June 30, 2023 , the fair value of the 2025 Notes was $65.5 million. The fair value of the 2025 Notes, which are classified as Level II financial instruments, was determined based on the quoted bid prices of the 2025 Notes in an over-the-counter market on the last trading day of the reporting period. For further details on the Notes (as defined below), refer to Note 7 to these condensed consolidated financial statements. The Company classifies financial instruments in Level III of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation models for Level III financial instruments typically also rely on a number of inputs that are readily observable, either directly or indirectly. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. There were no financial instruments classified as Level III of the fair value hierarchy as of June 30, 2023 and December 31, 2022. |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Balance Sheet Components Accounts Receivable, Net As of June 30, 2023 and December 31, 2022, the Company’s allowance for doubtful accounts was $5.4 million and $3.1 million, respectively. Provision for bad debt for the three months ended June 30, 2023 and 2022 was $4.4 million and $1.0 million, respectively, and for the six months ended June 30, 2023 and 2022 was $6.0 million and $2.0 million, respectively. Write-off of uncollectible accounts receivable for the three months ended June 30, 2023 and 2022 was $2.7 million and $1.3 million, respectively, and for the six months ended June 30, 2023 and 2022 was $3.7 million and $1.8 million, respectively. Property and Equipment, Net Property and equipment, net consisted of the following: June 30, 2023 December 31, 2022 (in thousands) Property and equipment: Servers—network infrastructure $ 298,312 $ 239,828 Construction in progress 23,249 72,827 Capitalized internal-use software 102,768 88,541 Office and computer equipment 37,292 30,577 Office furniture 10,097 6,547 Software 6,417 5,962 Leasehold improvements 42,817 20,392 Asset retirement obligation 827 827 Gross property and equipment 521,779 465,501 Less accumulated depreciation and amortization (228,520) (178,901) Total property and equipment, net $ 293,259 $ 286,600 Depreciation and amortization expense on property and equipment for the three months ended June 30, 2023 and 2022 was $28.4 million and $20.0 million, respectively, and for the six months ended June 30, 2023 and 2022 was $54.2 million and $38.9 million , respectively . This includes amortization expense for capitalized internal-use software which totaled $5.3 million and $4.8 million for the three months ended June 30, 2023 and 2022, respectively, and $10.7 million and $9.6 million for the six months ended June 30, 2023 and 2022, respectively . Goodwill As of June 30, 2023 and December 31, 2022, the Company's goodwill was $148.0 million . No goodwill impairments were recorded during the six months ended June 30, 2023 and 2022. Acquired Intangible Assets, Net Acquired intangible assets, net consisted of the following: June 30, 2023 Gross Carrying Accumulated Net Book (in thousands) Developed technology $ 40,100 $ 27,816 $ 12,284 Trade name 1,700 1,063 637 Customer relationships 11,600 1,813 9,787 Total acquired intangible assets, net $ 53,400 $ 30,692 $ 22,708 December 31, 2022 Gross Carrying Accumulated Net Book (in thousands) Developed technology $ 40,100 $ 19,191 $ 20,909 Trade name 1,700 638 1,062 Customer relationships 11,600 1,088 10,512 Total acquired intangible assets, net $ 53,400 $ 20,917 $ 32,483 Amortization of acquired intangible assets was $4.9 million for the three months ended June 30, 2023 and 2022, and $9.8 million and $5.4 million for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the estimated future amortization expense of acquired intangible assets was as follows: Estimated (in thousands) Year ending December 31, 2023 (remaining six months) $ 9,628 2024 5,468 2025 1,450 2026 1,450 2027 1,450 Thereafter 3,262 Total $ 22,708 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | LeasesThe Company's lease portfolio consists of real estate and co-location agreements in the United States and internationally. The real estate leases include leases for office space and have remaining lease terms of up to 8.1 years. Certain of these leases contain options that allow the Company to extend or terminate the lease agreement. The Company's co-location leases have remaining lease terms of up to 8.3 years. All of the Company's leases are classified as operating leases. The components of lease cost related to the Company's operating leases included in the condensed consolidated statements of operations were as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Operating lease cost $ 10,864 $ 9,496 $ 21,925 $ 18,106 Total lease cost $ 10,864 $ 9,496 $ 21,925 $ 18,106 Variable lease cost and short-term lease cost for the three and six months ended June 30, 2023 and June 30, 2022 were not material. As of June 30, 2023, the Company had $43.1 million of total undiscounted future payments under operating leases that have not yet commenced, which were not included on the condensed consolidated balance sheets. These operating leases will commence between July 2023 and July 2026 and have an average lease term of 3.5 years. As of June 30, 2023, the weighted-average remaining term of the Company’s operating leases was 5.1 years and the weighted-average discount rate used to measure the present value of the operating lease liabilities was 4.3%. Maturities of the operating lease liabilities as of June 30, 2023 are as follows: June 30, 2023 (in thousands) 2023 (remaining six months) $ 21,106 2024 36,322 2025 28,734 2026 25,094 2027 21,310 Thereafter 26,645 Total lease payments $ 159,211 Less: Imputed interest $ (16,853) Total operating lease liabilities $ 142,358 |
Leases | LeasesThe Company's lease portfolio consists of real estate and co-location agreements in the United States and internationally. The real estate leases include leases for office space and have remaining lease terms of up to 8.1 years. Certain of these leases contain options that allow the Company to extend or terminate the lease agreement. The Company's co-location leases have remaining lease terms of up to 8.3 years. All of the Company's leases are classified as operating leases. The components of lease cost related to the Company's operating leases included in the condensed consolidated statements of operations were as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Operating lease cost $ 10,864 $ 9,496 $ 21,925 $ 18,106 Total lease cost $ 10,864 $ 9,496 $ 21,925 $ 18,106 Variable lease cost and short-term lease cost for the three and six months ended June 30, 2023 and June 30, 2022 were not material. As of June 30, 2023, the Company had $43.1 million of total undiscounted future payments under operating leases that have not yet commenced, which were not included on the condensed consolidated balance sheets. These operating leases will commence between July 2023 and July 2026 and have an average lease term of 3.5 years. As of June 30, 2023, the weighted-average remaining term of the Company’s operating leases was 5.1 years and the weighted-average discount rate used to measure the present value of the operating lease liabilities was 4.3%. Maturities of the operating lease liabilities as of June 30, 2023 are as follows: June 30, 2023 (in thousands) 2023 (remaining six months) $ 21,106 2024 36,322 2025 28,734 2026 25,094 2027 21,310 Thereafter 26,645 Total lease payments $ 159,211 Less: Imputed interest $ (16,853) Total operating lease liabilities $ 142,358 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt 2026 Convertible Senior Notes In August 2021, the Company issued $1,293.8 million aggregate principal amount of 0% Convertible Senior Notes due 2026 (the 2026 Notes) in a private offering to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act, including the initial purchasers’ exercise in full of their option to purchase an additional $168.8 million aggregate principal amount of the 2026 Notes. The total proceeds from the issuance of the 2026 Notes, net of initial purchaser discounts and commissions and debt issuance costs, were $1,274.0 million. The 2026 Notes are senior unsecured obligations of the Company and will mature on August 15, 2026, unless earlier redeemed, repurchased, or converted, and are governed by the terms of the Indenture dated August 13, 2021 (the 2026 Indenture). The 2026 Notes are 0% convertible senior notes and therefore do not bear regular cash interest. The 2026 Notes are convertible at an initial conversion rate of 5.2263 shares of the Company's Class A common stock per $1,000 principal amount of the 2026 Notes, which is equivalent to an initial conversion price of approximately $191.34 per share, subject to adjustment upon the occurrence of specified events in accordance with the terms of the 2026 Indenture. The 2026 Notes may be converted at any time on or after May 15, 2026, until the close of business on the second scheduled trading day immediately preceding the maturity date. Holders of the 2026 Notes may convert all or any portion of their 2026 Notes at their option at any time prior to the close of business on the business day immediately preceding May 15, 2026, only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company's Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's Class A common stock and the conversion rate on each such trading day; (3) if the Company calls such 2026 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. None of the circumstances described in the paragraphs above were met during the quarter ended June 30, 2023. In addition, if the 2026 Notes are converted prior to the maturity date following certain specified corporate events or because the Company issues a notice of redemption, the Company will increase the conversion rate for such 2026 Notes converted in connection with such a corporate event or during the related redemption period, as the case may be, in certain circumstances set forth in the 2026 Indenture. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company's Class A common stock, or a combination of cash and shares of the Company's Class A common stock, at the Company's election. It is the Company’s current intent to settle the principal amount of 2026 Notes in cash. The Company may not redeem the 2026 Notes prior to August 20, 2024. The Company may redeem for cash all or any portion of the 2026 Notes (subject to the partial redemption limitation (as defined below)), at its option, on or after August 20, 2024, if the last reported sale price of the Company’s Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus any accrued and unpaid special interest to, but excluding, the redemption date. If the Company elects to redeem fewer than all of the outstanding 2026 Notes, at least $100.0 million aggregate principal amount of 2026 Notes must be outstanding and not subject to redemption as of the relevant redemption date. No sinking fund is provided for the 2026 Notes. If the Company undergoes a fundamental change (as defined in the 2026 Indenture), holders of the 2026 Notes may require the Company to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid special interest to, but excluding, the fundamental change repurchase date. 2026 Capped Call Transactions In connection with the offering of the 2026 Notes, the Company entered into privately-negotiated capped call option transactions (the 2026 Capped Calls) with certain financial institution counterparties. The 2026 Capped Calls each have an initial strike price of approximately $191.34 per share of the Company's Class A common stock, subject to certain adjustments, which corresponds to the initial conversion price of the 2026 Notes. The 2026 Capped Calls each have an initial cap price of approximately $250.94 per share, subject to certain adjustments. The 2026 Capped Calls initially cover, subject to anti-dilution adjustments, approximately 6.8 million shares of the Company's Class A common stock. The 2026 Capped Calls are intended to generally offset potential dilution to the Company's Class A common stock upon conversion of the 2026 Notes and/or offset the potential cash payments that the Company could be required to make in excess of the principal amount upon any conversion, subject to the cap price. The 2026 Capped Calls are subject to either adjustment or termination upon the occurrence of certain specified events affecting the Company, including a merger event, a tender offer, and a nationalization, insolvency, or delisting involving the Company. The 2026 Capped Calls expire in incremental components on each trading date between July 17, 2026 and August 13, 2026. As of June 30, 2023, the terms of the 2026 Capped Calls have not been adjusted. The 2026 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The premium paid for the purchase of the 2026 Capped Calls of $86.3 million was recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets. 2025 Convertible Senior Notes In May 2020, the Company issued $575.0 million aggregate principal amount of 0.75% Convertible Senior Notes due 2025 (the 2025 Notes, and together with the 2026 Notes, the Notes) in a private offering to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act, including t he initial purchasers' exercise in full of their option to purchase an additional $75.0 million aggregate principal amount of the 2025 Notes. The total net proceeds from the issuance of the 2025 Notes, after deducting initial purchaser discounts and debt issuance costs, were $562.5 million . After the closings of the 2025 Notes Exchange (defined below), other conversions, and the 2025 Notes Repurchases (defined below) that have since been completed, $35.4 million in aggregate principal amount of the 2025 Notes remained outstanding as of June 30, 2023. In August 2021, the Company exchanged approximately $400.0 million principal amount of the 2025 Notes (the 2025 Notes Exchange) for an aggregate of $400.7 million in cash (including accrued interest) and approximately 7.6 million shares of the Company’s Class A common stock (the Exchange Shares) for aggregate consideration worth $1,321.0 million. As a result, the Company recorded a debt extinguishment loss of $72.2 million, representing the difference between the fair value of the liability component of $355.3 million and the carrying value of the 2025 Notes Exchange of $283.1 million at the closing date. The fair value of the liability component was calculated by using an effective interest rate of 4.08%, which was determined by measuring the fair value of similar debt instruments that did not have an associated convertible feature and adjusted to reflect the term of the remaining 2025 Notes. The aggregate consideration of $1,321.0 million was allocated between the fair value of the liability component of $355.3 million and the reacquisition of the equity component of $965.7 million, which was recorded as a reduction to additional paid-in capital and offset by the additional paid-in capital for the Exchange Shares issued. In May 2023, the Company repurchased $123.0 million principal amount of the 2025 Notes (the 2025 Notes Repurchases) for $172.7 million in cash, including accrued interest payable of $0.5 million. The 2025 Notes Repurchases resulted in a $50.3 million loss on extinguishment of debt, of which $1.1 million consisted of unamortized debt issuance costs, during the three months ended June 30, 2023. The 2025 Notes are senior unsecured obligations of the Company and will mature on May 15, 2025, unless earlier redeemed, repurchased, or converted, and are governed by the terms of the Indenture dated May 15, 2020 (the 2025 Indenture, and together with the 2026 Indenture, the Indentures). Interest on the 2025 Notes is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2020, at a rate of 0.75% per year. The 2025 Notes are convertible at an initial conversion rate of 26.7187 shares of the Company's Class A common stock per $1,000 principal amount of the 2025 Notes, which is equivalent to an initial conversion price of approximately $37.43 per share, subject to adjustment upon the occurrence of specified events in accordance with the terms of the 2025 Indenture. The 2025 Notes may be converted at any time on or after February 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date. Holders of the 2025 Notes may convert all or any portion of their 2025 Notes at their option at any time prior to the close of business on the business day immediately preceding February 15, 2025 only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company's Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 2025 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's Class A common stock and the conversion rate on each such trading day; (3) if the Company calls such 2025 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. The circumstances described in paragraphs (1) and (3) above were met during the quarter ended June 30, 2023 and as a result, the 2025 Notes are convertible at the option of the holder from July 1, 2023 until September 30, 2023. In addition, if the 2025 Notes are converted prior to the maturity date following certain specified corporate events or because the Company issues a notice of redemption, the Company will increase the conversion rate for such 2025 Notes converted in connection with such a corporate event or during the related redemption period, as the case may be, in certain circumstances set forth in the 2025 Indenture. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company's Class A common stock, or a combination of cash and shares of the Company's Class A common stock, at the Company's election. It is the Company’s current intent to settle the principal amount of 2025 Notes in cash. The Company may redeem for cash all or any portion of the 2025 Notes, at its option, on or after May 20, 2023, if the last reported sale price of the Company’s Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2025 Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2025 Notes. If the Company undergoes a fundamental change (as defined in the 2025 Indenture), holders of the 2025 Notes may require the Company to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. During the year ended December 31, 2022, the Company settled conversions of approximately $16.6 million aggregate principal amount of the 2025 Notes. The Company elected to settle the conversions in a combination of cash equal to the principal amount of the 2025 Notes converted and the issuance of 298,909 shares of the Company's Class A common stock for the remainder of the conversion value in excess of such principal amount converted. The difference between the settlement consideration and the carrying value of the 2025 Notes converted was recorded to additional paid-in-capital on the Company's condensed consolidated balance sheets. In May 2023, the Company issued a notice to the holders of the 2025 Notes to redeem the remaining aggregate principal amount of the 2025 Notes outstanding (the 2025 Notes Redemption). In connection with the Company's delivery of such notice, holders of the 2025 Notes had the right to convert their 2025 Notes at any time before the close of business on July 14, 2023, and each of the holders exercised this right on or before the deadline. Pursuant to the terms of the 2025 Indenture, the conversion rate in effect upon issuance of the Redemption Notice was 28.5913 shares of the Company's Class A common stock per $1,000 principal amount of the 2025 Notes, inclusive of 1.8726 additional shares to the initial conversion rate. The Company elected to settle the conversions in a combination of cash equal to the principal amount of the 2025 Notes converted and issuance of the Company's Class A common stock for the remainder of the conversion value in excess of such principal amount converted. The Company classified the $35.4 million aggregate principal amount outstanding of the 2025 Notes as a current liability on its condensed consolidated balance sheet as of June 30, 2023. In July 2023, the Company paid approximately $35.4 million in cash and delivered approximately 0.5 million shares of the Company's Class A common stock to settle the conversion of approximately $35.4 million aggregate principal amount of the 2025 Notes in connection with the 2025 Notes Redemption. The accounting assessment for this conversion is in progress. 2025 Capped Call Transactions In connection with the offering of the 2025 Notes, the Company entered into privately-negotiated capped call option transactions (the 2025 Capped C alls and, together with the 2026 Capped Calls, the capped call transactions) with certain financial institution counterparties . The 2025 Capped Calls each have an initial strike price of approximately $37.43 per share of the Company's Class A common stock, subject to certain adjustments, which corresponds to the initial conversion price of the 2025 Notes. The 2025 Capped Calls each have an initial cap price of $57.58 per share, subject to certain adjustments. The 2025 Capped Calls initially cover, subject to anti-dilution adjustments, approximately 15.4 million shares of the Company's Class A common stock. The 2025 Capped Calls were intended to generally offset potential dilution to the Company's Class A common stock upon conversion of the 2025 Notes and/or offset the potential cash payments that the Company could be required to make in excess of the principal amount upon any conversion, subject to the cap price. The 2025 Capped Calls are subject to either adjustment or termination upon the occurrence of certain specified events affecting the Company, including a merger event, a tender offer, and a nationalization, insolvency, or delisting involving the Company. The 2025 Capped Calls expire in incremental components on each trading date between March 18, 2025 and May 13, 2025. As of June 30, 2023, the terms of the 2025 Capped Calls have not been adjusted and no 2025 Capped Calls were exercised or terminated in connection with the 2025 Notes Exchange, the 2025 Notes Repurchases, or any of the conversions of the 2025 Notes. The 2025 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The premium paid for the purchase of the 2025 Capped Calls of $67.3 million was recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets. As of August 3, 2023, no 2025 Capped Calls had been exercised. The net carrying amounts of the Notes were as follows: June 30, 2023 December 31, 2022 2026 Notes 2025 Notes 2026 Notes 2025 Notes (in thousands) Principal $ 1,293,750 $ 35,400 $ 1,293,750 $ 158,429 Unamortized debt issuance costs (12,367) (70) (14,348) (1,639) Carrying amount, net $ 1,281,383 $ 35,330 $ 1,279,402 $ 156,790 The following tables set forth total interest expense recognized related to the Notes: Three Months Ended June 30, 2023 2022 2026 Notes 2025 Notes 2026 Notes 2025 Notes (in thousands) Coupon interest expense $ — $ 168 $ — $ 297 Amortization of debt issuance costs 991 316 989 173 Total $ 991 $ 484 $ 989 $ 470 Six Months Ended June 30, 2023 2022 2026 Notes 2025 Notes 2026 Notes 2025 Notes (in thousands) Coupon interest expense $ — $ 465 $ — $ 607 Amortization of debt issuance costs 1,981 489 1,979 353 Total $ 1,981 $ 954 $ 1,979 $ 960 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments Open purchase commitments are for the purchase of goods and services under non-cancelable contracts. They are not recorded as liabilities on the condensed consolidated balance sheet as of June 30, 2023 as the Company has not yet received the related goods and services. Refer to the table below for purchase commitments under non-cancelable contracts with various vendors as of June 30, 2023. Bandwidth & Co-location Commitments The Company enters into long-term non-cancelable agreements with providers in various countries to purchase capacity, such as bandwidth and co-location space, for the Company’s global network. Bandwidth and co-location costs for paying customers are recorded as cost of revenue in the condensed consolidated statements of operations and as sales and marketing expense in the condensed consolidated statements of operations for free customers. Such costs totaled $35.9 million and $27.9 million for the three months ended June 30, 2023 and 2022, respectively, and $70.6 million and $53.7 million for the six months ended June 30, 2023 and 2022, respectively. Refer to the table below for long-term bandwidth and co-location commitments under non-cancelable contracts with various networks and Internet service providers as of June 30, 2023. For the lease components of co-location agreements, refer to Note 6 to these condensed consolidated financial statements. Payments Due by Period as of June 30, 2023 Total 2023 (remaining six months) 2024 2025 2026 2027 Thereafter (in thousands) Non-cancelable: Open purchase agreements (1) $ 99,398 $ 22,744 $ 21,755 $ 43,958 $ 4,469 $ 2,495 $ 3,977 Bandwidth and other co-location related commitments (2) 116,302 26,312 39,009 20,746 14,277 10,956 5,002 Other commitments (3) 1,275 1,275 — — — — — Total $ 216,975 $ 50,331 $ 60,764 $ 64,704 $ 18,746 $ 13,451 $ 8,979 (1) Open purchase commitments are for the purchase of goods and services under non-cancelable contracts. They were not recorded as liabilities on the condensed consolidated balance sheet as of June 30, 2023 as the Company had not yet received the related goods and services. (2) Long-term commitments for bandwidth usage and other co-location related commitments with various networks and Internet service providers. The costs for services not yet received were not recorded as liabilities on the condensed consolidated balance sheet as of June 30, 2023. (3) Indemnity holdback consideration associated with the Vectrix acquisition. See Note 13. Legal Matters From time to time the Company is a party to various legal proceedings that arise in the ordinary course of business. In addition, third parties may from time to time assert claims against the Company in the form of letters and other communications. Management currently believes that there is no pending or threatened legal proceeding to which the Company is a party that is likely to have a material adverse effect on the Company’s condensed consolidated financial statements. However, the results of legal proceedings are inherently unpredictable and if an unfavorable ruling were to occur in any of the legal proceedings there exists the possibility of a material adverse effect on the Company’s financial position, results of operations, and cash flows. The Company accrues for legal proceedings that it considers probable and for which the loss can be reasonably estimated. The Company also discloses material contingencies when it believes a loss is not probable but reasonably possible. Legal costs incurred and expected to be incurred related to litigation matters are expensed as incurred. The Company’s network and associated products are subject to various restrictions under U.S. export control and sanctions laws and regulations, including the U.S. Department of Commerce’s Export Administration Regulations (EAR) and various economic and trade sanctions regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Controls (OFAC). The U.S. export control laws and U.S. economic sanctions laws include restrictions or prohibitions on the sale or supply of certain products and services to U.S. embargoed or sanctioned countries, governments, persons and entities and also require authorization for the export of certain encryption items. In addition, various countries regulate the import of certain encryption technology, including through import permitting and licensing requirements and have enacted or could enact laws that could limit the Company’s ability to distribute its products through its network. Although the Company takes precautions to prevent its network and associated products from being accessed or used in violation of such laws, the Company may have inadvertently allowed its network and associated products to be accessed or used by some customers in apparent violation of U.S. economic sanctions laws, including by users in embargoed or sanctioned countries, and the Company may have exported or allowed the download of certain software prior to making required filings with the U.S. Department of Commerce’s Bureau of Industry and Security. As a result, the Company has submitted to OFAC and to the Bureau of Industry and Security a voluntary self-disclosure concerning potential violations, and the Company has submitted a voluntary self-disclosure to the Census Bureau regarding potential violations of the Foreign Trade Regulations related to some incorrect electronic export information statements to the U.S. government for certain hardware exports, which were authorized. The voluntary self-disclosure to the Census Bureau was completed with no penalties in November 2019, and the voluntary self-disclosure to the Bureau of Industry and Security was completed with no penalties in June 2020. The voluntary self-disclosure to OFAC remains under review. If the Company is found to be in violation of U.S. economic sanctions or export control laws, it could result in substantial fines and penalties for the Company and for the individuals working for the Company. The Company may also be adversely affected through other penalties, reputational harm, loss of access to certain markets or otherwise. No loss has been recognized in the consolidated financial statements for this loss contingency as it is not probable a loss has been incurred and the range of a possible loss is not yet estimable. Guarantees and Indemnifications If the Company's services do not meet certain service level commitments, its contracted customers and certain of its pay-as-you-go customers are entitled to receive service credits, and in certain cases, refunds, each representing a form of variable consideration. To date, the Company has not incurred any material costs as a result of such commitments. The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third-party’s intellectual property rights. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the condensed consolidated financial statements. The Company has also agreed to indemnify its directors, executive officers, and certain other employees for costs associated with any fees, expenses, judgments, fines, and settlement amounts incurred by them in any action or proceeding to which any of them are, or are threatened to be, made a party by reason of their service as a director or officer. The Company maintains director and officer insurance coverage that would generally enable it to recover a portion of any future amounts paid. The Company also may be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions. |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Common Stock | Common Stock The Company’s amended and restated certificate of incorporation authorizes the issuance of Class A common stock and Class B common stock. The holder of each share of Class A common stock is entitled to one vote per share, while the holder of each share of Class B common stock is entitled to 10 votes per share. As of June 30, 2023 and December 31, 2022, the Company was authorized to issue 2,250,000,000 shares of Class A common stock and 315,000,000 shares of Class B common stock, each with a par value of $0.001 per share. There were 291,831,902 and 286,560,947 shares of Class A common stock issued and outstanding as of June 30, 2023 and December 31, 2022, respectively. The number of shares of Class B common stock issued and outstanding was 41,807,386 and 43,524,514, as of June 30, 2023 and December 31, 2022, respectively. Holders of the Company’s Class A common stock and Class B common stock are entitled to dividends when, as and if, declared by the Company’s Board of Directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. Any dividends paid to the holders of the Class A common stock and Class B common stock will be paid on a pro rata basis. As of June 30, 2023 and December 31, 2022, the Company had not declared any dividends. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Shares of the Company's Class B common stock are convertible into an equivalent number of shares of the Company's Class A common stock and generally convert into shares of the Company's Class A common stock upon cessation of employment or transfer, except for certain transfers described in the Company's amended and restated certificate of incorporation. Class A common stock and Class B common stock are referred to, collectively, as common stock throughout the notes to these condensed consolidated financial statements, unless otherwise indicated. Common Stock Reserved for Future Issuance Shares of common stock reserved for future issuance, on an as-if converted basis, are as follows: June 30, 2023 December 31, 2022 (in thousands) 2025 Notes 1,238 5,503 2026 Notes 10,311 10,311 Stock options issued and outstanding 13,952 15,886 Remaining shares available for issuance under the 2019 Plan 58,148 44,693 Outstanding and unsettled RSUs 11,257 10,196 Shares available for issuance under the Employee Stock Purchase Plan (ESPP) 14,042 10,990 Total shares of common stock reserved 108,948 97,579 |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Equity Incentive Plans In 2010, the Company's Board of Directors adopted and stockholders approved the 2010 Equity Incentive Plan (2010 Plan). The 2010 Plan is a broad-based retention program and is intended to attract and retain talented employees, directors, and non-employee consultants. The 2010 Plan provides for the granting of stock options, restricted stock, RSUs, and stock appreciation rights to employees, directors, and consultants. Incentive stock options may be granted only to employees. All other awards under the 2010 Plan, including non-qualified stock options, may be granted to employees, directors, and consultants. Except for qualifying assumptions and substitutions of options, the exercise price of an incentive stock option and non-qualified stock option shall not be less than 100% of the fair market value of such shares on the date of grant. Prior to the Company's IPO, stock-based awards forfeited, canceled, or repurchased generally were returned to the pool of shares of common stock available for issuance under the 2010 Plan. In connection with the IPO, the 2010 Plan was terminated effective immediately prior to the effectiveness of the 2019 Equity Incentive Plan (2019 Plan) and the Company ceased granting any additional awards under the 2010 Plan. All outstanding awards under the 2010 Plan at the time of the termination of the 2010 Plan remain subject to the terms of the 2010 Plan, and any shares underlying stock options that expire or terminate or are forfeited or repurchased by the Company under the 2010 Plan will be automatically transferred to the 2019 Plan. In 2019, the Company's Board of Directors adopted and stockholders approved the 2019 Plan, which became effective one business day prior to the effective date of the Company's registration statement on Form S-1 for the IPO. The 2019 Plan provides for the granting of stock options, restricted stock, RSUs, stock appreciation rights, performance shares, performance stock units, and performance awards for the Company's Class A common stock to the Company's employees, directors, and consultants. Except as otherwise indicated below, the maximum number of shares of Class A common stock that may be issued under the 2019 Plan will not exceed 66,661,953 shares of the Company's Class A common stock, which is the sum of (1) 29,335,000 new shares, plus (2) an additional number of shares of Class A common stock not to exceed 37,326,953, consisting of the total number of shares of Class A or Class B common stock subject to outstanding awards granted under the 2010 Plan that, on or after the 2019 Plan became effective, are canceled, expire, or otherwise terminate prior to exercise or settlement; are repurchased by the Company because of the failure to vest; or are forfeited, tendered to, or withheld by the Company (or not issued) to satisfy a tax withholding obligation or the payment of an exercise price, if any, as such shares become available from time to time. Stock-based awards under the 2019 Plan that expire or are forfeited, canceled, or repurchased generally are returned to the pool of shares of Class A common stock available for issuance under the 2019 Plan. In addition, the number of shares of the Company's Class A common stock reserved for issuance under the 2019 Plan will automatically increase on January 1 of each calendar year, starting on January 1, 2021 through January 1, 2029, in an amount equal to the least of (i) 29,335,000 shares, (ii) 5% of the total number of shares of Class A and Class B common stock outstanding on December 31 of the fiscal year before the date of each automatic increase, or (iii) a lesser number of shares determined by the compensation committee of the Company's Board of Directors prior to the applicable January 1. Stock Options Under the 2010 Plan and 2019 Plan, at exercise, stock option awards entitle the holder to receive one share of Class B or Class A common stock, in the case of the 2010 Plan, or one share of Class A common stock, in the case of the 2019 Plan. The stock options granted under the 2010 Plan and the 2019 Plan generally vest over a four-year period subject to remaining continuously employed and expire no more than 10 years from the date of grant. As of June 30, 2023, there was $223.5 million of unrecognized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of 4.6 years . During the year ended December 31, 2022, the Company granted to certain executive officers and other key employees 10-year stock options with market conditions that vest and becomes exercisable only if the Company achieves certain stock price milestones and the employee continues to provide service to the Company through the applicable vesting dates (the Performance Options). The Performance Options were granted under the 2019 Plan and consist of 10-year options to purchase an aggregate of 5,575,000 shares of the Company’s Class A common stock. During the six months ended June 30, 2023, the Company granted to new key employees the Performance Options to purchase an aggregate of 860,000 shares of the Company’s Class A common stock. In April 2023, the Company's compensation committee and Board of Directors approved amendments to the Performance Options, effective as of May 1, 2023. These amendments reduced the exercise price per share of the Performance Options to the fair market value per share of the Company's Class A common stock on the effective date of the amendment, and modified the structure of the Performance Options to contain a total of nine separate tranches with added stock price milestones. These amendments resulted in an additional stock-based compensation expense of approximately $25.8 million to be recognized over a weighted-average requisite service period. The Company recognizes stock-based compensation expense for the Performance Options based on the grant date fair value and using a graded attribution method over the weighted-average requisite service period. The total stock-based compensation expense for the Performance Options for the three months ended June 30, 2023 and 2022 were $7.4 million and $12.6 million, respectively, and for the six months ended June 30, 2023 and 2022 were $14.3 million and $12.6 million, respectively. As of June 30, 2023, there was $210.8 million of unrecognized stock-based compensation expense related to the Performance Options that is expected to be recognized over a weighted-average period of 4.9 years . In connection with the acquisition of Area 1 Security, Inc. (Area 1), each unvested option to purchase shares of Area 1’s common stock held by Area 1 employees who have joined the Company were assumed and converted into stock option awards to purchase the Company's Class A common stock (the Assumed Area 1 Stock Options). The Assumed Area 1 Stock Options are subject to the terms and conditions set forth in the Area 1 stock incentive plan and consist of options to purchase an aggregate of 156,770 shares of the Company’s Class A common stock. The Assumed Area 1 Stock Options are generally subject to annual vesting on a ratable basis over the three years from the Area 1 acquisition date, in each case subject to remaining continuously employed by the Company or any of its subsidiaries. The total stock-based compensation expense for the Assumed Area 1 Stock Options for the three and six months ended June 30, 2023 were not material. As of June 30, 2023, there was $6.8 million of unrecognized stock-based compensation expense related to the Assumed Area 1 Stock Options that is expected to be recognized over a weighted-average period of 1.8 years. For further details on the Area 1 acquisition, refer to Note 13 to these condensed consolidated financial statements. Early Exercises of Stock Options The 2010 Plan allows for the early exercise of stock options for certain individuals as determined by the Company’s Board of Directors. Shares of common stock issued upon early exercises of unvested options are not deemed, for accounting purposes, to be issued until those shares vest according to their respective vesting schedules and accordingly, the consideration received for early exercises is initially recorded as a liability and reclassified to common stock and additional paid-in capital as the underlying awards vest. Stock options that are early exercised are subject to a repurchase option that allows the Company to repurchase within six months of an individual’s termination for any reason, including death and disability (or in the case of shares issued upon exercise of an option after termination, within six months of the date of exercise), any unvested shares of such individual for a repurchase price equal to the amount previously paid by the individual for such unvested shares. As of June 30, 2023 and December 31, 2022, the Company had $0.7 million and $1.9 million, respectively, recorded in liability for early exercise of unvested stock options, and the related number of unvested shares subject to repurchase was 318,649 and 899,691, respectively. Restricted Stock and Restricted Stock Units RSUs granted under the 2010 Plan generally vest upon the satisfaction of both a service-based vesting condition and a performance vesting condition, as defined below, occurring before these RSUs expire. RSUs granted under the 2019 Plan generally vest upon the satisfaction of a service-based vesting condition. The service-based vesting condition for employees under both the 2010 Plan and the 2019 Plan is typically satisfied over a four-year period, subject to remaining continuously employed. The performance vesting condition under the 2010 Plan was deemed satisfied upon the effective date of the Company's registration statement on Form S-1 filed with the SEC in connection with the IPO. The total stock-based compensation expense for RSUs for the three months ended June 30, 2023 and 2022 was $55.2 million and $32.6 million, respectively, and for the six months ended June 30, 2023 and 2022 was $99.5 and $61.9 million, respectively. As of June 30, 2023, the total unrecognized stock-based compensation expense related to unvested RSUs was $638.6 million that is expected to be recognized over a weighted-average period of 3.1 years. 2019 Employee Stock Purchase Plan In September 2019, the Company's Board of Directors adopted and stockholders approved the ESPP, which became effective one business day prior to the effective date of the Company's registration statement on Form S-1 filed with the SEC in connection with the IPO. A total of 5,870,000 shares of Class A common stock were initially reserved for sale under the ESPP. The number of shares of Class A common stock reserved for issuance includes an annual increase on the first day of each fiscal year, beginning on January 1, 2021, by the least of (1) 5,870,000 shares of Class A common stock, (2) 1% of the total number of shares of Class A and Class B common stock outstanding on December 31 of the fiscal year before the date of each automatic increase; or (3) such lesser amount as the compensation committee of the Company's Board of Directors may determine prior to the applicable January 1. Generally, all regular employees, including executive officers, employed by the Company or by any of its designated subsidiaries, except for those holding 5% or more of the total combined voting power or value of all classes of common stock, may participate in the ESPP and may contribute, normally through payroll deductions, up to 10% of their eligible compensation for the purchase of Class A common stock under the ESPP. Unless otherwise determined by the compensation committee of the Board of Directors, Class A common stock will be purchased for the accounts of employees participating in the ESPP at a price per share that is the lesser of (1) 85% of the fair market value of a share of the Company's Class A common stock on the first date of an offering period, or (2) 85% of the fair market value of a share of the Company's Class A common stock on the date of purchase. The ESPP generally provides for six-month offering periods beginning on the first day of trading on or after November 15 and May 15 of each year and terminating on the last trading day before May 15 and November 15, approximately six months later, with identical purchase periods. Current employees cannot sell the shares of Class A common stock purchased under the ESPP until the day after the one-year anniversary of the purchase date of such shares, except for the withholding or sale of shares by the Company to meet any applicable tax withholding obligations. No employee may purchase (i) during each purchase period more than 1,500 shares of Class A common stock and (ii) shares under the ESPP at a rate in excess of $25,000 worth of the Company's Class A common stock based on the fair market value per share of the Company's Class A common stock at the beginning of an offering for each calendar year such purchase right is outstanding. 248,738 and 153,974 shares of Class A common stock were purchased under the ESPP during the three and six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the total unrecognized stock-based compensation expense related to the ESPP was $3.3 million and is expected to be recognized over a weighted average period of 0.4 years. Stock-based Compensation Expense The following table sets forth the total stock-based compensation expense included in the Company’s condensed consolidated statements of operations: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Cost of revenue $ 2,047 $ 1,888 $ 3,730 $ 2,966 Sales and marketing 20,014 12,216 34,834 21,135 Research and development 34,651 26,659 62,388 45,488 General and administrative 11,680 14,052 24,841 19,191 Total stock-based compensation expense $ 68,392 $ 54,815 $ 125,793 $ 88,780 |
Net Loss per Share Attributable
Net Loss per Share Attributable to Common Stockholders | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Class A Class B Class A Class B Class A Class B Class A Class B (in thousands, except per share data) Net loss attributable to common stockholders $ (82,620) $ (11,847) $ (55,081) $ (8,456) $ (115,760) $ (16,789) $ (90,864) $ (14,054) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 290,623 41,674 281,915 43,282 289,466 41,982 281,097 43,477 Net loss per share attributable to common stockholders, basic and diluted $ (0.28) $ (0.28) $ (0.20) $ (0.20) $ (0.40) $ (0.40) $ (0.32) $ (0.32) Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been antidilutive. The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows: June 30, 2023 2022 (in thousands) 2025 Notes 1,012 4,233 2026 Notes 6,762 6,762 Shares subject to repurchase 319 1,465 Unexercised stock options 13,952 17,303 Unvested restricted stock and RSUs 11,320 7,620 Shares issuable pursuant to the ESPP 228 187 Total 33,593 37,570 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The computation of the provision for (benefit from) income taxes for interim periods is determined by applying the estimated annual effective tax rate to year-to-date earnings from recurring operations and adjusting for discrete tax items recorded in the period. The Company's ability to estimate the geographic mix of earnings is impacted by the relatively high-growth nature of the business, fluctuations of business operations by country, and implementation of tax planning strategies. The Company recorded an income tax expense of $1.5 million and an income tax benefit of $0.2 million f or the three months ended June 30, 2023 and 2022, respectively, and an income tax expense of $2.8 million and $0.2 million for the six months ended June 30, 2023 and 2022, respectively. The income tax expense of $1.5 million for the three months ended June 30, 2023 was primarily related to withholding taxes in the U.S. and income tax expense from profitable foreign jurisdictions. The income tax benefit of $0.2 million for the three months ended June 30, 2022 was primarily related to the partial release of the U.S. valuation allowance in connection with an acquisition, offset by withholding taxes in the U.S. and income tax expense from profitable foreign jurisdictions. The income tax expense of $2.8 million for the six months ended June 30, 2023 was primarily related to withholding taxes in the U.S. and income tax expense from profitable foreign jurisdictions. The income tax expense of $0.2 million for the six months ended June 30, 2022 was primarily related to withholding taxes in the U.S. and income tax expense from profitable foreign jurisdictions, offset by the partial release of the U.S. valuation allowance in connection with acquisitions. In determining the need for a valuation allowance, the Company weighs both positive and negative evidence in the various jurisdictions in which it operates to determine whether it is more likely than not that its deferred tax assets are realizable. A full valuation allowance has been established in the U.S. and U.K. and no deferred tax assets and related tax benefits have been recognized in the consolidated financial statements. There is no valuation allowance associated with any other foreign jurisdictions. |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Area 1 On April 1, 2022, the Company acquired all of the outstanding shares of Area 1, a company that has developed cloud-native email security technology, for a total purchase consideration of $156.6 million. The total purchase consideration included (i) acquisition-date cash payments of $82.6 million, net of $2.5 million of cash acquired, (ii) $63.5 million in shares of the Company’s Class A common stock, (iii) a cash holdback of $9.3 million, which the Company retained for up to 12 months and was then payable to the previous owners of Area 1, subject to offset by the Company for any of the previous owners’ indemnification obligations in connection with the acquisition, and (iv) a separate cash holdback of $1.1 million. The cash holdback of $9.3 million and $1.1 million were subsequently paid to the previous owners of Area 1 as of the six months ended June 30, 2023. Concurrent with the closing of the acquisition, the Company made a cash payment of $4.1 million to repay Area 1’s debt, which was part of the acquisition-date cash payments included in the purchase consideration. In connection with the acquisition, the Company entered into compensation arrangements for stock-based and cash awards with a value totaling $15.9 million. Of the total stock-based and cash awards, $1.4 million cash awards were recognized as compensation expense on the acquisition date. Refer to Note 10 to these condensed consolidated financial statements for further details on the share-based awards. The transaction-related costs for the acquisition were not material and were included in general and administrative expenses during the three months and six months ended June 30, 2022. The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands): Accounts receivable, net $ 1,634 Prepaids and other current assets 953 Acquired Intangible Assets 43,300 Goodwill 119,743 Total assets acquired 165,630 Accounts Payable (254) Accrued expense and other current liabilities (595) Deferred revenue (5,736) Deferred revenue, noncurrent (1,213) Other noncurrent liabilities (1,267) Total purchase price $ 156,565 The acquired assets and assumed liabilities were recorded at their estimated fair values, except for deferred revenue which was recorded under ASC 606 in accordance with the early adoption of ASU 2021-08 Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers effective January 1, 2022. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is expected to be deductible for tax purposes. Goodwill is primarily attributable to the assembled workforce as well as the anticipated synergies from the integration of Area 1’s technology with the Company's technology. An immaterial purchase accounting adjustment to revise purchase consideration and goodwill was made during the year ended December 31, 2022. This acquisition did not have a material impact on the Company’s reported revenue or net loss amounts for any period presented; therefore, historical and pro forma disclosures have not been presented. Vectrix On January 14, 2022, the Company acquired all of the outstanding shares of Vectrix Security, Inc. (Vectrix), a company that has developed an online security technology that gives users the ability to scan and monitor SaaS applications for security issues, for a total purchase consideration of $7.6 million. The total purchase consideration included (i) acquisition-date cash payments of $4.3 million, net of $0.8 million of cash acquired, (ii) $2.0 million in shares of the Company’s Class A common stock, and (iii) a cash holdback of $1.3 million, which the Company is retaining for up to 18 months and will be payable to the previous owners of Vectrix, subject to offset by the Company for any of the previous owners’ indemnification obligations in connection with the acquisition. Concurrent with the closing of the acquisition, the Company made a cash payment of $2.0 million to cancel and settle Vectrix’s other existing equity-related agreements, which was part of the acquisition-date cash payments included in the purchase consideration. In connection with the acquisition, the Company entered into compensation arrangements for stock-based and cash awards with a value totaling $8.0 million, of which $2.6 million was recognized as compensation expense on the acquisition date. Additional compensation expense during the three and six months ended June 30, 2023 and June 30, 2022 were not material. The remaining compensation amount is not material and will be recognized through the year ended December 31, 2026. The transaction-related costs for the acquisition were not material and are included in general and administrative expenses in the condensed consolidated statement of operations for the three and six months ended June 30, 2022. The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands): Developed technology $ 3,100 Goodwill 4,962 Total assets acquired 8,062 Accounts Payable (20) Other noncurrent liabilities (430) Total purchase price $ 7,612 The acquired assets and assumed liabilities were recorded at their estimated fair values. The estimated useful life for the acquired developed technology is two years. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is expected to be deductible for tax purposes. Goodwill is primarily attributable to the assembled workforce as well as the anticipated synergies from the integration of Vectrix's technology with the Company's technology. An immaterial purchase accounting adjustment to revise purchase consideration and goodwill was made during the year ended December 31, 2022. This acquisition did not have a material impact on the Company’s condensed consolidated financial statements; therefore, historical and pro forma disclosures have not been presented. Zaraz On October 15, 2021, the Company acquired all of the outstanding shares of Zaraz Inc. (Zaraz), a remote-first company, that has developed a server-side rendering technology, for a total purchase consideration of $7.2 million. The total purchase consideration included (i) acquisition-date cash payments of $5.6 million, net of $0.8 million of cash acquired, and (ii) $1.6 million in shares of the Company’s Class A common stock. Concurrent with the closing of the acquisition, the Company made a cash payment of $1.1 million to cancel and settle Zaraz’s existing equity arrangements, which was part of the acquisition-date cash payments included in the purchase consideration. In connection with the acquisition, the Company entered into compensation arrangements for stock-based and cash awards with a value totaling $6.5 million, of which $0.5 million was recorded as compensation expense during the year ended December 31, 2021. Additional compensation expense during the three and six months ended June 30, 2023 and June 30, 2022 were not material. The remaining compensation amount is not material and will be recognized through the year ended December 31, 2024. The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands): Developed technology $ 1,400 Goodwill 6,176 Total assets acquired 7,576 Accrued compensation (82) Other noncurrent liabilities (322) Total purchase price $ 7,172 The acquired assets and assumed liabilities were recorded at their estimated fair values. The estimated useful life for the acquired developed technology is two years. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is expected to be deductible for tax purposes. Goodwill is primarily attributable to the assembled workforce as well as the anticipated synergies from the integration of Zaraz's technology with the Company's technology. An immaterial purchase accounting adjustment to revise purchase consideration and goodwill was made during the year ended December 31, 2022. This acquisition did not have a material impact on the Company’s condensed consolidated financial statements; therefore, historical and pro forma disclosures have not been presented. |
Segment and Geographic Informat
Segment and Geographic Information | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information The Company’s chief operating decision maker (CODM) is its CEO, President and COO, and CFO. Collectively, the CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company has no segment managers who are held accountable by the CODM for operations, operating results, and planning for levels or components below the consolidated unit level. Accordingly, the Company has determined it has a single operating segment. Refer to Note 3 to these condensed consolidated financial statements for revenue by geography. The Company’s property and equipment, net, by geographic area were as follows: June 30, 2023 December 31, 2022 (in thousands) United States $ 179,295 $ 184,753 Rest of the world 113,964 101,847 Total property and equipment, net $ 293,259 $ 286,600 No single country other than the United States accounted for more than 10% of total property and equipment, net as of June 30, 2023 and December 31, 2022. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net loss | $ (94,467) | $ (63,537) | $ (132,549) | $ (104,918) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying interim condensed consolidated financial statements and accompanying notes have been prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP) and applicable regulations of the Securities and Exchange Commission (the SEC) regarding interim financial reporting, and include the accounts of the Company and its wholly-owned subsidiaries. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable required disclosures and regulations of the SEC. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 . |
Principles of Consolidation | Principles of ConsolidationAll intercompany balances and transactions have been eliminated in consolidation. |
Fiscal Period | The Company’s fiscal year ends on December 31. |
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 amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes to the condensed consolidated financial statements. Such estimates include, but are not limited to, allowance for doubtful accounts, deferred contract acquisitions costs, the period of benefit generated from the Company’s deferred contract acquisition costs, the capitalization and estimated useful life of internal-use software, valuation of acquired intangible assets, the assessment of recoverability of intangible assets and their estimated useful lives, useful lives of property and equipment, the determination of the incremental borrowing rate used for operating lease liabilities, the valuation and recognition of stock-based compensation awards, uncertain tax positions, and the recognition and measurement of current and deferred income tax assets and liabilities. Management bases these estimates and assumptions on historical experience and on various other assumptions that are believed to be reasonable. Due in part to the Russia-Ukraine |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements There have been no recently adopted accounting pronouncements since the filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2022 that may have a material impact on the Company's condensed consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table summarizes the revenue by region based on the billing address of customers who have contracted to use the Company’s global network and products: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (dollars in thousands) Amount Percentage Amount Percentage Amount Percentage Amount Percentage United States $ 161,692 53 % $ 124,259 53 % $ 314,610 53 % $ 235,609 53 % Europe, Middle East, and Africa 84,346 27 % 61,147 26 % 162,677 27 % 116,939 26 % Asia Pacific 40,399 13 % 32,755 14 % 79,617 13 % 62,680 14 % Other 22,057 7 % 16,356 7 % 41,765 7 % 31,456 7 % Total $ 308,494 100 % $ 234,517 100 % $ 598,669 100 % $ 446,684 100 % The following table summarizes the revenue from contracts by type of customer: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (dollars in thousands) Amount Percentage Amount Percentage Amount Percentage Amount Percentage Channel partners $ 47,148 15 % $ 28,933 12 % $ 88,151 15 % $ 53,289 12 % Direct customers 261,346 85 % 205,584 88 % 510,518 85 % 393,395 88 % Total $ 308,494 100 % $ 234,517 100 % $ 598,669 100 % $ 446,684 100 % |
Schedule of Deferred Contract Acquisition Costs | The following table summarizes the activity of the deferred contract acquisition costs: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Beginning balance $ 98,427 $ 76,266 $ 93,145 $ 70,320 Capitalization of contract acquisition costs 23,957 14,996 43,348 30,604 Amortization of deferred contract acquisition costs (14,902) (10,556) (29,011) (20,218) Ending balance $ 107,482 $ 80,706 $ 107,482 $ 80,706 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value by Significant Investment Category | The following table summarizes the Company’s cash and available-for-sale securities’ amortized cost, unrealized gains (losses), and fair value by significant investment category reported as cash and cash equivalents, restricted cash short-term, restricted cash, or available-for-sale securities as of June 30, 2023 and December 31, 2022. (in thousands) Reported as: June 30, 2023 Amortized Unrealized Unrealized Fair Value Cash & Available-for-sale securities Restricted Cash $ 132,434 $ — $ — $ 132,434 $ 127,373 $ — $ 5,061 Level I: Money market funds 25,018 — — 25,018 25,018 — — Level II: Corporate bonds 229,829 — (1,768) 228,061 — 228,061 — U.S. treasury securities 878,373 31 (4,227) 874,177 — 874,177 — U.S. government agency securities 63,663 1 (266) 63,398 — 63,398 — Commercial paper 266,597 — (4) 266,593 6,927 259,666 — Subtotal 1,438,462 32 (6,265) 1,432,229 6,927 1,425,302 — Total assets measured at fair value on a recurring basis $ 1,595,914 $ 32 $ (6,265) $ 1,589,681 $ 159,318 $ 1,425,302 $ 5,061 (in thousands) Reported as: December 31, 2022 Amortized Unrealized Unrealized Fair Cash & Available-for-sale securities Restricted Cash $ 87,719 $ — $ — $ 87,719 $ 77,164 $ — $ 10,555 Level I: Money market funds 125,450 — — 125,450 124,979 — 471 Level II: Corporate bonds 258,617 46 (2,621) 256,042 2,035 254,007 — U.S. treasury securities 818,379 20 (9,233) 809,166 — 809,166 — U.S. government agency securities 25,283 — (31) 25,252 — 25,252 — Commercial paper 357,334 — — 357,334 — 357,334 — Subtotal 1,459,613 66 (11,885) 1,447,794 2,035 1,445,759 — Total assets measured at fair value on a recurring basis $ 1,672,782 $ 66 $ (11,885) $ 1,660,963 $ 204,178 $ 1,445,759 $ 11,026 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following: June 30, 2023 December 31, 2022 (in thousands) Property and equipment: Servers—network infrastructure $ 298,312 $ 239,828 Construction in progress 23,249 72,827 Capitalized internal-use software 102,768 88,541 Office and computer equipment 37,292 30,577 Office furniture 10,097 6,547 Software 6,417 5,962 Leasehold improvements 42,817 20,392 Asset retirement obligation 827 827 Gross property and equipment 521,779 465,501 Less accumulated depreciation and amortization (228,520) (178,901) Total property and equipment, net $ 293,259 $ 286,600 |
Schedule of Acquired Intangible Assets, Net | Acquired intangible assets, net consisted of the following: June 30, 2023 Gross Carrying Accumulated Net Book (in thousands) Developed technology $ 40,100 $ 27,816 $ 12,284 Trade name 1,700 1,063 637 Customer relationships 11,600 1,813 9,787 Total acquired intangible assets, net $ 53,400 $ 30,692 $ 22,708 December 31, 2022 Gross Carrying Accumulated Net Book (in thousands) Developed technology $ 40,100 $ 19,191 $ 20,909 Trade name 1,700 638 1,062 Customer relationships 11,600 1,088 10,512 Total acquired intangible assets, net $ 53,400 $ 20,917 $ 32,483 |
Schedule of Estimated Future Amortization Expense of Acquired Intangible Assets | As of June 30, 2023, the estimated future amortization expense of acquired intangible assets was as follows: Estimated (in thousands) Year ending December 31, 2023 (remaining six months) $ 9,628 2024 5,468 2025 1,450 2026 1,450 2027 1,450 Thereafter 3,262 Total $ 22,708 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Schedule of Lease Costs | The components of lease cost related to the Company's operating leases included in the condensed consolidated statements of operations were as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Operating lease cost $ 10,864 $ 9,496 $ 21,925 $ 18,106 Total lease cost $ 10,864 $ 9,496 $ 21,925 $ 18,106 |
Schedule of Lease Liability Maturities | Maturities of the operating lease liabilities as of June 30, 2023 are as follows: June 30, 2023 (in thousands) 2023 (remaining six months) $ 21,106 2024 36,322 2025 28,734 2026 25,094 2027 21,310 Thereafter 26,645 Total lease payments $ 159,211 Less: Imputed interest $ (16,853) Total operating lease liabilities $ 142,358 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Debt | The net carrying amounts of the Notes were as follows: June 30, 2023 December 31, 2022 2026 Notes 2025 Notes 2026 Notes 2025 Notes (in thousands) Principal $ 1,293,750 $ 35,400 $ 1,293,750 $ 158,429 Unamortized debt issuance costs (12,367) (70) (14,348) (1,639) Carrying amount, net $ 1,281,383 $ 35,330 $ 1,279,402 $ 156,790 |
Schedule of Interest Expense | The following tables set forth total interest expense recognized related to the Notes: Three Months Ended June 30, 2023 2022 2026 Notes 2025 Notes 2026 Notes 2025 Notes (in thousands) Coupon interest expense $ — $ 168 $ — $ 297 Amortization of debt issuance costs 991 316 989 173 Total $ 991 $ 484 $ 989 $ 470 Six Months Ended June 30, 2023 2022 2026 Notes 2025 Notes 2026 Notes 2025 Notes (in thousands) Coupon interest expense $ — $ 465 $ — $ 607 Amortization of debt issuance costs 1,981 489 1,979 353 Total $ 1,981 $ 954 $ 1,979 $ 960 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Purchase Commitments | Refer to the table below for long-term bandwidth and co-location commitments under non-cancelable contracts with various networks and Internet service providers as of June 30, 2023. For the lease components of co-location agreements, refer to Note 6 to these condensed consolidated financial statements. Payments Due by Period as of June 30, 2023 Total 2023 (remaining six months) 2024 2025 2026 2027 Thereafter (in thousands) Non-cancelable: Open purchase agreements (1) $ 99,398 $ 22,744 $ 21,755 $ 43,958 $ 4,469 $ 2,495 $ 3,977 Bandwidth and other co-location related commitments (2) 116,302 26,312 39,009 20,746 14,277 10,956 5,002 Other commitments (3) 1,275 1,275 — — — — — Total $ 216,975 $ 50,331 $ 60,764 $ 64,704 $ 18,746 $ 13,451 $ 8,979 (1) Open purchase commitments are for the purchase of goods and services under non-cancelable contracts. They were not recorded as liabilities on the condensed consolidated balance sheet as of June 30, 2023 as the Company had not yet received the related goods and services. (2) Long-term commitments for bandwidth usage and other co-location related commitments with various networks and Internet service providers. The costs for services not yet received were not recorded as liabilities on the condensed consolidated balance sheet as of June 30, 2023. (3) Indemnity holdback consideration associated with the Vectrix acquisition. See Note 13. |
Common Stock (Tables)
Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Common Stock Reserved for Future Issuance | Shares of common stock reserved for future issuance, on an as-if converted basis, are as follows: June 30, 2023 December 31, 2022 (in thousands) 2025 Notes 1,238 5,503 2026 Notes 10,311 10,311 Stock options issued and outstanding 13,952 15,886 Remaining shares available for issuance under the 2019 Plan 58,148 44,693 Outstanding and unsettled RSUs 11,257 10,196 Shares available for issuance under the Employee Stock Purchase Plan (ESPP) 14,042 10,990 Total shares of common stock reserved 108,948 97,579 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The following table sets forth the total stock-based compensation expense included in the Company’s condensed consolidated statements of operations: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (in thousands) Cost of revenue $ 2,047 $ 1,888 $ 3,730 $ 2,966 Sales and marketing 20,014 12,216 34,834 21,135 Research and development 34,651 26,659 62,388 45,488 General and administrative 11,680 14,052 24,841 19,191 Total stock-based compensation expense $ 68,392 $ 54,815 $ 125,793 $ 88,780 |
Net Loss per Share Attributab_2
Net Loss per Share Attributable to Common Stockholders (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss per Share Attributable to Common Stockholders | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Class A Class B Class A Class B Class A Class B Class A Class B (in thousands, except per share data) Net loss attributable to common stockholders $ (82,620) $ (11,847) $ (55,081) $ (8,456) $ (115,760) $ (16,789) $ (90,864) $ (14,054) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 290,623 41,674 281,915 43,282 289,466 41,982 281,097 43,477 Net loss per share attributable to common stockholders, basic and diluted $ (0.28) $ (0.28) $ (0.20) $ (0.20) $ (0.40) $ (0.40) $ (0.32) $ (0.32) |
Schedule of Potential Shares of Common Stock Excluded from Computation of Basic and Diluted Net Loss per Share Attributable to Common Stockholders | The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows: June 30, 2023 2022 (in thousands) 2025 Notes 1,012 4,233 2026 Notes 6,762 6,762 Shares subject to repurchase 319 1,465 Unexercised stock options 13,952 17,303 Unvested restricted stock and RSUs 11,320 7,620 Shares issuable pursuant to the ESPP 228 187 Total 33,593 37,570 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands): Accounts receivable, net $ 1,634 Prepaids and other current assets 953 Acquired Intangible Assets 43,300 Goodwill 119,743 Total assets acquired 165,630 Accounts Payable (254) Accrued expense and other current liabilities (595) Deferred revenue (5,736) Deferred revenue, noncurrent (1,213) Other noncurrent liabilities (1,267) Total purchase price $ 156,565 The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands): Developed technology $ 3,100 Goodwill 4,962 Total assets acquired 8,062 Accounts Payable (20) Other noncurrent liabilities (430) Total purchase price $ 7,612 The fair values of assets acquired and liabilities assumed on the acquisition date are summarized as follows (in thousands): Developed technology $ 1,400 Goodwill 6,176 Total assets acquired 7,576 Accrued compensation (82) Other noncurrent liabilities (322) Total purchase price $ 7,172 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Property and Equipment, Net by Geographic Area | The Company’s property and equipment, net, by geographic area were as follows: June 30, 2023 December 31, 2022 (in thousands) United States $ 179,295 $ 184,753 Rest of the world 113,964 101,847 Total property and equipment, net $ 293,259 $ 286,600 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 308,494 | $ 234,517 | $ 598,669 | $ 446,684 |
Geographic Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 100% | 100% | 100% | 100% |
Sales Channel Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 100% | 100% | 100% | 100% |
Channel partners | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 47,148 | $ 28,933 | $ 88,151 | $ 53,289 |
Channel partners | Sales Channel Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 15% | 12% | 15% | 12% |
Direct customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 261,346 | $ 205,584 | $ 510,518 | $ 393,395 |
Direct customers | Sales Channel Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 85% | 88% | 85% | 88% |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 161,692 | $ 124,259 | $ 314,610 | $ 235,609 |
United States | Geographic Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 53% | 53% | 53% | 53% |
Europe, Middle East, and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 84,346 | $ 61,147 | $ 162,677 | $ 116,939 |
Europe, Middle East, and Africa | Geographic Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 27% | 26% | 27% | 26% |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 40,399 | $ 32,755 | $ 79,617 | $ 62,680 |
Asia Pacific | Geographic Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 13% | 14% | 13% | 14% |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 22,057 | $ 16,356 | $ 41,765 | $ 31,456 |
Other | Geographic Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of Revenue | 7% | 7% | 7% | 7% |
Revenue - Narratives (Details)
Revenue - Narratives (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||||
Revenue recognized | $ 169,700,000 | $ 92,800,000 | ||
Impairment loss | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue - Deferred Contract Acq
Revenue - Deferred Contract Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Capitalized Contract Cost [Roll Forward] | ||||
Beginning balance | $ 98,427 | $ 76,266 | $ 93,145 | $ 70,320 |
Capitalization of contract acquisition costs | 23,957 | 14,996 | 43,348 | 30,604 |
Amortization of deferred contract acquisition costs | (14,902) | (10,556) | (29,011) | (20,218) |
Ending balance | $ 107,482 | $ 80,706 | $ 107,482 | $ 80,706 |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligations (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 1,036.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percent | 75% |
Remaining performance obligation, expected timing of satisfaction | 12 months |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Cash and Available-for-sale Debt Securities' Amortized Cost, Unrealized Gains (Losses) and Fair Value by Significant Investment Category (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | $ 159,318,000 | $ 204,178,000 |
Amortized Cost | 1,595,914,000 | 1,672,782,000 |
Unrealized Gain | 32,000 | 66,000 |
Unrealized (Loss) | (6,265,000) | (11,885,000) |
Fair Value | 1,589,681,000 | 1,660,963,000 |
Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 132,434,000 | 87,719,000 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 132,434,000 | 87,719,000 |
Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Level I | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 25,018,000 | 125,450,000 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | 0 | 0 |
Fair Value | 25,018,000 | 125,450,000 |
Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 1,438,462,000 | 1,459,613,000 |
Unrealized Gain | 32,000 | 66,000 |
Unrealized (Loss) | (6,265,000) | (11,885,000) |
Fair Value | 1,432,229,000 | 1,447,794,000 |
Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 229,829,000 | 258,617,000 |
Unrealized Gain | 0 | 46,000 |
Unrealized (Loss) | (1,768,000) | (2,621,000) |
Fair Value | 228,061,000 | 256,042,000 |
Level II | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 878,373,000 | 818,379,000 |
Unrealized Gain | 31,000 | 20,000 |
Unrealized (Loss) | (4,227,000) | (9,233,000) |
Fair Value | 874,177,000 | 809,166,000 |
Level II | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 63,663,000 | 25,283,000 |
Unrealized Gain | 1,000 | 0 |
Unrealized (Loss) | (266,000) | (31,000) |
Fair Value | 63,398,000 | 25,252,000 |
Level II | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amortized Cost | 266,597,000 | 357,334,000 |
Unrealized Gain | 0 | 0 |
Unrealized (Loss) | (4,000) | 0 |
Fair Value | 266,593,000 | 357,334,000 |
Cash & Cash Equivalents | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets measured at fair value on a recurring basis | 159,318,000 | 204,178,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 127,373,000 | 77,164,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Level I | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 25,018,000 | 124,979,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 6,927,000 | 2,035,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 2,035,000 |
Cash & Cash Equivalents | Fair Value, Recurring | Level II | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Cash & Cash Equivalents | Fair Value, Recurring | Level II | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Cash & Cash Equivalents | Fair Value, Recurring | Level II | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 6,927,000 | 0 |
Available-for-sale securities | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 1,425,302,000 | 1,445,759,000 |
Available-for-sale securities | Fair Value, Recurring | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Available-for-sale securities | Fair Value, Recurring | Level I | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Available-for-sale securities | Fair Value, Recurring | Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 1,425,302,000 | 1,445,759,000 |
Available-for-sale securities | Fair Value, Recurring | Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 228,061,000 | 254,007,000 |
Available-for-sale securities | Fair Value, Recurring | Level II | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 874,177,000 | 809,166,000 |
Available-for-sale securities | Fair Value, Recurring | Level II | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 63,398,000 | 25,252,000 |
Available-for-sale securities | Fair Value, Recurring | Level II | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 259,666,000 | 357,334,000 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets measured at fair value on a recurring basis | 5,061,000 | 11,026,000 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | Cash | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 5,061,000 | 10,555,000 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | Level I | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 471,000 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | Level II | Corporate bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | Level II | U.S. treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | Level II | U.S. government agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Restricted Cash (Current and Non-Current) | Fair Value, Recurring | Level II | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narratives (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 | Jan. 14, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Restricted cash | $ 5,100,000 | ||
Amortized cost of available-for-sale investments with maturities less than one year | 1,315,500,000 | $ 1,251,600,000 | |
Amortized cost of available-for-sale investments with maturities greater than one year | 116,100,000 | 205,900,000 | |
Net loss on investments, net of tax | 6,300,000 | 11,900,000 | |
Convertible Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument, fair value | 65,500,000 | ||
Convertible Debt | 2026 Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument, fair value | 1,098,900,000 | ||
Money market funds | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Unrealized gain | 0 | 0 | |
Unrealized loss | $ 0 | 0 | |
Vectrix, Inc. | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Consideration held back | $ 1,300,000 | ||
U.S. government agency securities | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Proceeds receivable from sale of securities | $ 37,500,000 |
Balance Sheet Components - Acco
Balance Sheet Components - Accounts Receivable, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Allowance for doubtful accounts | $ 5.4 | $ 5.4 | $ 3.1 | ||
Provision for bad debt expense | 4.4 | $ 1 | 6 | $ 2 | |
Write-off of uncollectible accounts receivable | $ 2.7 | $ 1.3 | $ 3.7 | $ 1.8 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | $ 521,779 | $ 521,779 | $ 465,501 | ||
Less accumulated depreciation and amortization | (228,520) | (228,520) | (178,901) | ||
Total property and equipment, net | 293,259 | 293,259 | 286,600 | ||
Depreciation and amortization expense | 28,400 | $ 20,000 | 54,200 | $ 38,900 | |
Servers—network infrastructure | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 298,312 | 298,312 | 239,828 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 23,249 | 23,249 | 72,827 | ||
Capitalized internal-use software | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 102,768 | 102,768 | 88,541 | ||
Office and computer equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 37,292 | 37,292 | 30,577 | ||
Office furniture | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 10,097 | 10,097 | 6,547 | ||
Software | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 6,417 | 6,417 | 5,962 | ||
Depreciation and amortization expense | 5,300 | $ 4,800 | 10,700 | $ 9,600 | |
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | 42,817 | 42,817 | 20,392 | ||
Asset retirement obligation | |||||
Property, Plant and Equipment [Line Items] | |||||
Gross property and equipment | $ 827 | $ 827 | $ 827 |
Balance Sheet Components - Good
Balance Sheet Components - Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Goodwill | $ 148,047 | $ 148,047 | |
Goodwill, impairment loss | $ 0 | $ 0 |
Balance Sheet Components - Acqu
Balance Sheet Components - Acquired Intangible Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 53,400 | $ 53,400 | $ 53,400 | ||
Accumulated Amortization | 30,692 | 30,692 | 20,917 | ||
Net Book Value | 22,708 | 22,708 | 32,483 | ||
Amortization of acquired intangible assets | 4,900 | $ 4,900 | 9,800 | $ 5,400 | |
Developed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 40,100 | 40,100 | 40,100 | ||
Accumulated Amortization | 27,816 | 27,816 | 19,191 | ||
Net Book Value | 12,284 | 12,284 | 20,909 | ||
Trade name | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 1,700 | 1,700 | 1,700 | ||
Accumulated Amortization | 1,063 | 1,063 | 638 | ||
Net Book Value | 637 | 637 | 1,062 | ||
Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 11,600 | 11,600 | 11,600 | ||
Accumulated Amortization | 1,813 | 1,813 | 1,088 | ||
Net Book Value | $ 9,787 | $ 9,787 | $ 10,512 |
Balance Sheet Components - Esti
Balance Sheet Components - Estimated Future Amortization Expense of Acquired Intangible Assets, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
2023 (remaining six months) | $ 9,628 | |
2024 | 5,468 | |
2025 | 1,450 | |
2026 | 1,450 | |
2027 | 1,450 | |
Thereafter | 3,262 | |
Net Book Value | $ 22,708 | $ 32,483 |
Leases - Narratives (Details)
Leases - Narratives (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Lessee, Lease, Description [Line Items] | |
Remaining lease term (up to) | 8 years 1 month 6 days |
Lease not yet commenced, undiscounted amount | $ 43.1 |
Lease not yet commenced, term of contract | 3 years 6 months |
Weighted average remaining lease term | 5 years 1 month 6 days |
Operating lease, weighted average discount rate, percent | 4.30% |
Co-location Asset Lease | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term (up to) | 8 years 3 months 18 days |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease cost | $ 10,864 | $ 9,496 | $ 21,925 | $ 18,106 |
Total lease cost | $ 10,864 | $ 9,496 | $ 21,925 | $ 18,106 |
Leases - Lease Liability Maturi
Leases - Lease Liability Maturities (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Leases [Abstract] | |
2023 (remaining six months) | $ 21,106 |
2024 | 36,322 |
2025 | 28,734 |
2026 | 25,094 |
2027 | 21,310 |
Thereafter | 26,645 |
Total lease payments | 159,211 |
Less: Imputed interest | (16,853) |
Total operating lease liabilities | $ 142,358 |
Debt - 2026 Convertible Senior
Debt - 2026 Convertible Senior Notes (Details) - 2026 Notes - Convertible Debt | 1 Months Ended | |
Aug. 31, 2021 USD ($) day $ / shares | Aug. 31, 2021 USD ($) day $ / shares | |
Debt Instrument [Line Items] | ||
Debt principal amount | $ | $ 1,293,800,000 | $ 1,293,800,000 |
Interest rate | 0% | 0% |
Face amount, additional principal issuable | $ | $ 168,800,000 | $ 168,800,000 |
Proceeds from convertible debt | $ | $ 1,274,000,000 | |
Convertible debt, conversion ratio | 0.0052263 | |
Conversion price (in dollars per share) | $ / shares | $ 191.34 | $ 191.34 |
Redemption price, percentage | 100% | 100% |
Minimum redeemable face amount | $ | $ 100,000,000 | $ 100,000,000 |
Last Reported Stock Price At Lease 130% Of The Debt Conversion Price | ||
Debt Instrument [Line Items] | ||
Conversion requirement, threshold trading days (at least) | day | 20 | 20 |
Conversion requirement, threshold consecutive trading days | day | 30 | |
Conversion requirement, threshold percentage of stock price trigger (at least) | 130% | 130% |
Principal Amount Less Than 98% of the Product | ||
Debt Instrument [Line Items] | ||
Conversion requirement, threshold trading days (at least) | day | 5 | |
Conversion requirement, threshold consecutive trading days | day | 5 | |
Conversion requirement, threshold percentage of stock price trigger (at least) | 98% |
Debt - 2026 Capped Call Transac
Debt - 2026 Capped Call Transactions (Details) - 2026 Notes - Convertible Debt - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | |
Aug. 30, 2021 | Aug. 31, 2021 | |
Debt Instrument [Line Items] | ||
Purchases of capped calls related to convertible senior notes | $ 86.3 | |
Class A common stock | ||
Debt Instrument [Line Items] | ||
Shares covered by capped calls (in shares) | 6.8 | |
Capped Calls | Long | Class A common stock | ||
Debt Instrument [Line Items] | ||
Strike price (in dollars per share) | $ 191.34 | |
Capped call, initial cap price (in dollars per share) | $ 250.94 |
Debt - 2025 Convertible Senior
Debt - 2025 Convertible Senior Notes (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Aug. 13, 2021 USD ($) shares | Jul. 31, 2023 shares | May 31, 2023 USD ($) shares | May 31, 2020 USD ($) day $ / shares | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) shares | |
Debt Instrument [Line Items] | |||||||||
Loss on extinguishment of debt | $ 50,300,000 | $ 0 | $ 50,300,000 | $ 0 | |||||
Convertible Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, fair value | 65,500,000 | 65,500,000 | |||||||
2025 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from convertible debt | $ 562,500,000 | ||||||||
Conversion price (in dollars per share) | $ / shares | $ 37.43 | ||||||||
2025 Notes | Last Reported Stock Price At Lease 130% Of The Debt Conversion Price | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion requirement, threshold trading days (at least) | day | 20 | ||||||||
Conversion requirement, threshold consecutive trading days | day | 30 | ||||||||
Conversion requirement, threshold percentage of stock price trigger (at least) | 130% | ||||||||
2025 Notes | Principal Amount Less Than 98% of the Product | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion requirement, threshold trading days (at least) | day | 5 | ||||||||
Conversion requirement, threshold consecutive trading days | day | 5 | ||||||||
Conversion requirement, threshold percentage of stock price trigger (at least) | 98% | ||||||||
2025 Notes | Convertible Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt principal amount | $ 575,000,000 | ||||||||
Interest rate | 0.75% | ||||||||
Face amount, additional principal issuable | $ 75,000,000 | ||||||||
Principal | 35,400,000 | 35,400,000 | $ 158,429,000 | ||||||
Repurchased face amount | $ 400,000,000 | $ 123,000,000 | |||||||
Repayments of convertible debt | 400,700,000 | 172,700,000 | |||||||
Interest payable | $ 500,000 | ||||||||
Debt conversion, converted instrument, amount | 1,321,000,000 | ||||||||
Loss on extinguishment of debt | 72,200,000 | 50,300,000 | |||||||
Debt instrument, fair value | 355,300,000 | ||||||||
Carrying amount, net | $ 283,100,000 | 35,330,000 | $ 35,330,000 | $ 156,790,000 | |||||
Effective interest rate | 4.08% | ||||||||
Equity component of convertible debt | $ 965,700,000 | ||||||||
Deferred debt issuance cost, write-off | $ 1,100,000 | ||||||||
Convertible debt, conversion ratio | 0.0285913 | 0.0267187 | |||||||
Redemption price, percentage | 100% | ||||||||
2025 Notes | Convertible Debt | Class A common stock | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of shares issued upon debt conversion (in shares) | shares | 7,600,000 | 298,909,000,000 | |||||||
Debt conversion converted instrument additional shares initial conversion (in shares) | shares | 1.8726 | ||||||||
2025 Notes | Convertible Debt | Class A common stock | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of shares issued upon debt conversion (in shares) | shares | 500,000 | ||||||||
2025 Notes | Convertible Debt | Certain Holders Conversion | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt conversion, converted instrument, amount | $ 16,600,000 |
Debt - 2025 Capped Call Transac
Debt - 2025 Capped Call Transactions (Details) - 2025 Notes - Convertible Debt $ / shares in Units, shares in Millions, $ in Millions | May 31, 2020 USD ($) $ / shares shares |
Debt Instrument [Line Items] | |
Purchases of capped calls related to convertible senior notes | $ | $ 67.3 |
Capped Calls | Long | Class A common stock | |
Debt Instrument [Line Items] | |
Strike price (in dollars per share) | $ 37.43 |
Capped call, initial cap price (in dollars per share) | $ 57.58 |
Shares covered by capped calls (in shares) | shares | 15.4 |
Debt - Schedule of Net Carrying
Debt - Schedule of Net Carrying Amount of Notes (Details) - Convertible Debt - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Aug. 13, 2021 |
2026 Notes | |||
Debt Instrument [Line Items] | |||
Principal | $ 1,293,750 | $ 1,293,750 | |
Unamortized debt issuance costs | (12,367) | (14,348) | |
Carrying amount, net | 1,281,383 | 1,279,402 | |
2025 Notes | |||
Debt Instrument [Line Items] | |||
Principal | 35,400 | 158,429 | |
Unamortized debt issuance costs | (70) | (1,639) | |
Carrying amount, net | $ 35,330 | $ 156,790 | $ 283,100 |
Debt - Schedule of Interest Com
Debt - Schedule of Interest Components (Details) - Convertible Debt - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
2026 Notes | ||||
Debt Instrument [Line Items] | ||||
Coupon interest expense | $ 0 | $ 0 | $ 0 | $ 0 |
Amortization of debt issuance costs | 991 | 989 | 1,981 | 1,979 |
Total | 991 | 989 | 1,981 | 1,979 |
2025 Notes | ||||
Debt Instrument [Line Items] | ||||
Coupon interest expense | 168 | 297 | 465 | 607 |
Amortization of debt issuance costs | 316 | 173 | 489 | 353 |
Total | $ 484 | $ 470 | $ 954 | $ 960 |
Commitments and Contingencies -
Commitments and Contingencies - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Cost and expenses related to bandwidth and other co-location commitments | $ 35.9 | $ 27.9 | $ 70.6 | $ 53.7 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Purchase Commitments (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Open purchase agreements | |
Total | $ 99,398 |
2023 (remaining three months) | 22,744 |
2024 | 21,755 |
2025 | 43,958 |
2026 | 4,469 |
2027 | 2,495 |
Thereafter | 3,977 |
Bandwidth and other co-location related commitments | |
Total | 116,302 |
2023 (remaining three months) | 26,312 |
2024 | 39,009 |
2025 | 20,746 |
2026 | 14,277 |
2027 | 10,956 |
Thereafter | 5,002 |
Other commitments | |
Total | 1,275 |
2023 (remaining three months) | 1,275 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
Thereafter | 0 |
Total | |
Total | 216,975 |
2023 (remaining three months) | 50,331 |
2024 | 60,764 |
2025 | 64,704 |
2026 | 18,746 |
2027 | 13,451 |
Thereafter | $ 8,979 |
Common Stock - Narratives (Deta
Common Stock - Narratives (Details) | Jun. 30, 2023 vote $ / shares shares | Dec. 31, 2022 $ / shares shares |
Class A common stock | ||
Class of Stock [Line Items] | ||
Common stock, number of votes per share | vote | 1 | |
Common stock, shares authorized (in shares) | 2,250,000,000 | 2,250,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 291,831,902 | 286,560,947 |
Common stock, shares outstanding (in shares) | 291,831,902 | 286,560,947 |
Class B common stock | ||
Class of Stock [Line Items] | ||
Common stock, number of votes per share | vote | 10 | |
Common stock, shares authorized (in shares) | 315,000,000 | 315,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 41,807,386 | 43,524,514 |
Common stock, shares outstanding (in shares) | 41,807,386 | 43,524,514 |
Common Stock - Schedule of Comm
Common Stock - Schedule of Common Stock Reserved for Future Issuance (Details) - shares shares in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 108,948 | 97,579 |
Remaining shares available for issuance under the 2019 Plan | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 58,148 | 44,693 |
Stock options issued and outstanding | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 13,952 | 15,886 |
Outstanding and unsettled RSUs | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 11,257 | 10,196 |
Shares available for issuance under the Employee Stock Purchase Plan (ESPP) | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 14,042 | 10,990 |
Convertible Debt | 2025 Notes | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 1,238 | 5,503 |
Convertible Debt | 2026 Notes | ||
Class of Stock [Line Items] | ||
Shares of common stock reserved (in shares) | 10,311 | 10,311 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
May 01, 2023 USD ($) tranche | Apr. 01, 2022 USD ($) shares | Feb. 14, 2022 shares | Sep. 30, 2019 USD ($) shares | Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 USD ($) shares | Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 USD ($) shares | Dec. 31, 2022 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock-based compensation | $ | $ 70,426,000 | $ 56,473,000 | $ 129,535,000 | $ 91,654,000 | |||||
Stock-based compensation expense | $ | $ 68,392,000 | 54,815,000 | $ 125,793,000 | 88,780,000 | |||||
2019 Equity Incentive Plan | Class A common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized for issuance (in shares) | shares | 66,661,953 | 66,661,953 | |||||||
Number of new shares authorized for issuance (in shares) | shares | 29,335,000 | 29,335,000 | |||||||
Number of additional shares authorized for issuance (in shares) | shares | 37,326,953 | 37,326,953 | |||||||
2019 Equity Incentive Plan | Class A and Class B Common Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Potential increase in number of shares authorized, as a percentage of total common stock outstanding | 5% | ||||||||
Stock options issued and outstanding | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 4 years | ||||||||
Expiration period | 10 years | ||||||||
Options unrecognized stock-based compensation expense | $ | $ 6,800,000 | $ 6,800,000 | |||||||
Weighted-average remaining vesting period | 1 year 9 months 18 days | ||||||||
Repurchase period | 6 months | ||||||||
Liability for early exercise of stock options | $ | 700,000 | $ 700,000 | $ 1,900,000 | ||||||
Number of unvested shares expected to be repurchased (in shares) | shares | 318,649 | 899,691 | |||||||
Stock options issued and outstanding | Area 1 Security, Inc | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 3 years | ||||||||
Stock-based compensation expense | $ | $ 1,400,000 | $ 0 | $ 0 | ||||||
Stock options issued and outstanding | Class A common stock | Area 1 Security, Inc | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares available for issuance (in shares) | shares | 156,770 | ||||||||
Stock options issued and outstanding | 2010 Equity Incentive Plan | Common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price of common stock, percentage of fair market value | 100% | ||||||||
Stock options issued and outstanding | 2010 Equity Incentive Plan | Class A common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise stock option awards (in shares) | shares | 1 | 1 | |||||||
Stock options issued and outstanding | 2010 Equity Incentive Plan | Class B common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise stock option awards (in shares) | shares | 1 | 1 | |||||||
Stock options issued and outstanding | 2019 Equity Incentive Plan | Class A common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise stock option awards (in shares) | shares | 1 | 1 | |||||||
Stock options issued and outstanding | 2010 Plan And 2019 Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Options unrecognized stock-based compensation expense | $ | $ 223,500,000 | $ 223,500,000 | |||||||
Weighted-average remaining vesting period | 4 years 7 months 6 days | ||||||||
Other Performance Awards | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Options unrecognized stock-based compensation expense | $ | 210,800,000 | $ 210,800,000 | |||||||
Weighted-average remaining vesting period | 4 years 10 months 24 days | ||||||||
Stock-based compensation expense | $ | 7,400,000 | 12,600,000 | $ 14,300,000 | 12,600,000 | |||||
Other Performance Awards | Executive Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expiration period | 10 years | 10 years | |||||||
Other Performance Awards | Other Key Employees | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expiration period | 10 years | 10 years | |||||||
Other Performance Awards | Class A common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized for issuance (in shares) | shares | 5,575,000 | ||||||||
Expiration period | 10 years | ||||||||
Number of separate tranches | tranche | 9 | ||||||||
Stock-based compensation | $ | $ 25,800,000 | ||||||||
Other Performance Awards | Class A common stock | Other Key Employees | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | shares | 860,000 | ||||||||
Restricted Stock Units (RSUs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 4 years | ||||||||
Weighted-average remaining vesting period | 3 years 1 month 6 days | ||||||||
Stock-based compensation expense | $ | 55,200,000 | $ 32,600,000 | $ 99,500,000 | $ 61,900,000 | |||||
Unrecognized stock-based compensation expense | $ | 638,600,000 | $ 638,600,000 | |||||||
Shares issuable pursuant to the ESPP | 2019 Employee Stock Purchase Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted-average remaining vesting period | 4 months 24 days | ||||||||
Unrecognized stock-based compensation expense | $ | $ 3,300,000 | $ 3,300,000 | |||||||
Maximum ownership percentage threshold for participation | 5% | ||||||||
Maximum contribution percentage per employee | 10% | ||||||||
Shares issuable pursuant to the ESPP | 2019 Employee Stock Purchase Plan | Class A common stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of additional shares allowable under the plan (in shares) | shares | 5,870,000 | ||||||||
Purchase price of common stock, percentage of fair value | 85% | ||||||||
Offering period | 6 months | ||||||||
Purchase period | 6 months | ||||||||
Shares purchase period | 1 year | ||||||||
Maximum number of shares available for repurchase for each employee (more than, in shares) | shares | 1,500 | ||||||||
Maximum value of shares available for repurchase for each employee | $ | $ 25,000 | ||||||||
Number of shares repurchased (in shares) | shares | 248,738 | 153,974 | 248,738 | 153,974 | |||||
Shares issuable pursuant to the ESPP | 2019 Employee Stock Purchase Plan | Class A and Class B Common Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Potential increase in number of share authorized, as a percentage of total common stock outstanding | 1% |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 68,392 | $ 54,815 | $ 125,793 | $ 88,780 |
Cost of revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 2,047 | 1,888 | 3,730 | 2,966 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 20,014 | 12,216 | 34,834 | 21,135 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 34,651 | 26,659 | 62,388 | 45,488 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 11,680 | $ 14,052 | $ 24,841 | $ 19,191 |
Net Loss per Share Attributab_3
Net Loss per Share Attributable to Common Stockholders - Schedule of Computation of Basic and Diluted Earnings per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net loss attributable to common stockholders | $ (94,467) | $ (63,537) | $ (132,549) | $ (104,918) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 332,297 | 325,197 | 331,448 | 324,574 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 332,297 | 325,197 | 331,448 | 324,574 |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.28) | $ (0.20) | $ (0.40) | $ (0.32) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.28) | $ (0.20) | $ (0.40) | $ (0.32) |
Class A | Common stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net loss attributable to common stockholders | $ (82,620) | $ (55,081) | $ (115,760) | $ (90,864) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 290,623 | 281,915 | 289,466 | 281,097 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 290,623 | 281,915 | 289,466 | 281,097 |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.28) | $ (0.20) | $ (0.40) | $ (0.32) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.28) | $ (0.20) | $ (0.40) | $ (0.32) |
Class B | Common stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net loss attributable to common stockholders | $ (11,847) | $ (8,456) | $ (16,789) | $ (14,054) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 41,674 | 43,282 | 41,982 | 43,477 |
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 41,674 | 43,282 | 41,982 | 43,477 |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.28) | $ (0.20) | $ (0.40) | $ (0.32) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.28) | $ (0.20) | $ (0.40) | $ (0.32) |
Net Loss per Share Attributab_4
Net Loss per Share Attributable to Common Stockholders - Schedule of Potential Shares of Common Stock Excluded from Computation of Basic and Diluted Net Loss per Share Attributable to Common Stockholders (Details) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 33,593 | 37,570 |
2025 Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 1,012 | 4,233 |
2026 Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 6,762 | 6,762 |
Shares subject to repurchase | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 319 | 1,465 |
Unexercised stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 13,952 | 17,303 |
Unvested restricted stock and RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 11,320 | 7,620 |
Shares issuable pursuant to the ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential shares of common stock excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 228 | 187 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Provision for (Benefit from) income taxes | $ 1,465 | $ (170) | $ 2,779 | $ 204 |
Business Combinations - Narrati
Business Combinations - Narratives (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Apr. 01, 2022 | Jan. 14, 2022 | Oct. 15, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2022 | |
Business Acquisition [Line Items] | ||||||||||
Cash paid for acquisitions | $ 0 | $ 86,941,000 | ||||||||
Stock-based compensation expense | $ 68,392,000 | $ 54,815,000 | 125,793,000 | $ 88,780,000 | ||||||
Area 1 Security, Inc | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 156,600,000 | |||||||||
Cash paid for acquisitions | 82,600,000 | |||||||||
Cash acquired | 2,500,000 | |||||||||
Value of shares issued | 63,500,000 | |||||||||
Payments to settle acquiree's outstanding debt | 4,100,000 | |||||||||
Goodwill expected to be tax deductible | $ 0 | |||||||||
Goodwill purchase accounting adjustments | $ 0 | |||||||||
Purchase accounting adjustment | 0 | |||||||||
Area 1 Security, Inc | Scenario One | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Cash holdback | $ 9,300,000 | |||||||||
Contingent consideration, liability, period | 12 months | |||||||||
Area 1 Security, Inc | Scenario Two | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Cash holdback | $ 1,100,000 | |||||||||
Area 1 Security, Inc | Stock options issued and outstanding | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Compensation arrangements value | 15,900,000 | |||||||||
Stock-based compensation expense | $ 1,400,000 | $ 0 | $ 0 | |||||||
Vectrix, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 7,600,000 | |||||||||
Cash paid for acquisitions | 4,300,000 | |||||||||
Cash acquired | 800,000 | |||||||||
Value of shares issued | $ 2,000,000 | |||||||||
Contingent consideration, liability, period | 18 months | |||||||||
Payments to settle acquiree's outstanding debt | $ 2,000,000 | |||||||||
Compensation arrangements value | 8,000,000 | |||||||||
Goodwill purchase accounting adjustments | 0 | |||||||||
Purchase accounting adjustment | 0 | |||||||||
Consideration held back | 1,300,000 | |||||||||
Compensation arrangement with individual, compensation expense | $ 2,600,000 | |||||||||
Vectrix, Inc. | Developed technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life of acquired developed technology | 2 years | |||||||||
Zaraz | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 7,200,000 | |||||||||
Cash paid for acquisitions | 5,600,000 | |||||||||
Cash acquired | 800,000 | |||||||||
Value of shares issued | 1,600,000 | |||||||||
Payments to settle acquiree's outstanding debt | 1,100,000 | |||||||||
Compensation arrangements value | $ 6,500,000 | |||||||||
Goodwill purchase accounting adjustments | 0 | |||||||||
Purchase accounting adjustment | $ 0 | |||||||||
Compensation arrangement with individual, compensation expense | $ 500,000 | |||||||||
Zaraz | Developed technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life of acquired developed technology | 2 years |
Business Combinations - Schedul
Business Combinations - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jan. 14, 2022 | Oct. 15, 2021 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 148,047 | $ 148,047 | ||
Area 1 Security, Inc | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable, net | 1,634 | |||
Prepaids and other current assets | 953 | |||
Goodwill | 119,743 | |||
Total assets acquired | 165,630 | |||
Accounts Payable | (254) | |||
Accrued expense and other current liabilities | (595) | |||
Deferred revenue | (5,736) | |||
Deferred revenue, noncurrent | (1,213) | |||
Other noncurrent liabilities | (1,267) | |||
Total purchase price | 156,565 | |||
Area 1 Security, Inc | Developed technology | ||||
Business Acquisition [Line Items] | ||||
Acquired Intangible Assets | $ 43,300 | |||
Vectrix, Inc. | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 4,962 | |||
Total assets acquired | 8,062 | |||
Accounts Payable | (20) | |||
Other noncurrent liabilities | (430) | |||
Total purchase price | 7,612 | |||
Vectrix, Inc. | Developed technology | ||||
Business Acquisition [Line Items] | ||||
Developed technology | $ 3,100 | |||
Zaraz | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 6,176 | |||
Total assets acquired | 7,576 | |||
Other noncurrent liabilities | (322) | |||
Accrued compensation | (82) | |||
Total purchase price | 7,172 | |||
Zaraz | Developed technology | ||||
Business Acquisition [Line Items] | ||||
Developed technology | $ 1,400 |
Segment and Geographic Inform_3
Segment and Geographic Information - Narratives (Details) | 6 Months Ended |
Jun. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Property and Equipment, Net by Geographic Area (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 293,259 | $ 286,600 |
United States | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 179,295 | 184,753 |
Rest of the world | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 113,964 | $ 101,847 |
Uncategorized Items - cloud-202
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-02 [Member] |