Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 31, 2020 | Jun. 28, 2019 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-38285 | ||
Entity Registrant Name | BANDWIDTH INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 56-2242657 | ||
Entity Address, Address Line One | 900 Main Campus Drive | ||
Entity Address, City or Town | Raleigh | ||
Entity Address, State or Province | NC | ||
Entity Address, Postal Zip Code | 27606 | ||
City Area Code | (800) | ||
Local Phone Number | 808-5150 | ||
Title of 12(b) Security | Class A Common Stock, par value $0.001 per share | ||
Trading Symbol | BAND | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,415 | ||
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement for the 2020 Annual Meeting of Stockholders are incorporated herein by reference in Part II and Part III of this Annual Report on Form 10-K to the extent stated herein. Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2019. | ||
Entity Central Index Key | 0001514416 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Common Class A | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 18,610,208 | ||
Common Class B | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 4,927,401 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash, cash equivalents and restricted cash | $ 185,004 | $ 41,501 |
Marketable securities | 0 | 17,400 |
Accounts receivable, net of allowance for doubtful accounts | 30,187 | 24,009 |
Prepaid expenses and other current assets | 9,260 | 6,114 |
Deferred costs | 2,498 | 2,630 |
Total current assets | 226,949 | 91,654 |
Property and equipment, net | 41,654 | 25,136 |
Operating right-of-use asset | 21,031 | |
Intangible assets, net | 6,569 | 7,089 |
Deferred costs, non-current | 1,952 | 1,828 |
Other long-term assets | 1,533 | 487 |
Goodwill | 6,867 | 6,867 |
Deferred tax asset | 34,861 | 17,359 |
Total assets | 341,416 | 150,420 |
Current liabilities: | ||
Accounts payable | 4,190 | 3,418 |
Accrued expenses and other current liabilities | 27,328 | 21,393 |
Current portion of deferred revenue | 5,177 | 5,324 |
Advanced billings | 4,167 | 2,588 |
Operating lease liability, current | 4,876 | |
Total current liabilities | 45,738 | 32,723 |
Long-term lease obligations | 19,868 | |
Deferred rent, net of current portion | 2,503 | |
Deferred revenue, net of current portion | 5,720 | 6,424 |
Total liabilities | 71,326 | 41,650 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock | 0 | 0 |
Additional paid-in capital | 275,553 | 116,600 |
Accumulated deficit | (5,528) | (7,848) |
Accumulated other comprehensive (loss) income | 41 | (1) |
Total stockholders’ equity | 270,090 | 108,770 |
Total liabilities and stockholders’ equity | 341,416 | 150,420 |
Common Class A | ||
Stockholders’ equity: | ||
Class A and Class B common stock | 19 | 13 |
Common Class B | ||
Stockholders’ equity: | ||
Class A and Class B common stock | $ 5 | $ 6 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 09, 2017 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Common stock, par value (in usd per share) | $ 0.001 | ||
Common stock, shares authorized (in shares) | 120,000,000 | ||
Common Class A | |||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | |
Common stock, shares issued (in shares) | 18,584,478 | 12,912,747 | |
Common stock, shares outstanding (in shares) | 18,584,478 | 12,912,747 | |
Common Class B | |||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 | |
Common stock, shares issued (in shares) | 4,927,401 | 6,510,732 | |
Common stock, shares outstanding (in shares) | 4,927,401 | 6,510,732 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | $ 232,594 | $ 204,113 | $ 162,955 |
Cost of revenue | 124,959 | 108,145 | 89,262 |
Gross profit | 107,635 | 95,968 | 73,693 |
Operating expenses: | |||
Research and development | 31,461 | 20,897 | 10,789 |
Sales and marketing | 35,020 | 20,731 | 11,218 |
General and administrative | 58,847 | 47,588 | 37,069 |
Total operating expenses | 125,328 | 89,216 | 59,076 |
Operating (loss) income | (17,693) | 6,752 | 14,617 |
Other (expense) income: | |||
Interest (expense) income, net | 2,446 | 301 | (1,728) |
Other income, net | 23 | 0 | 0 |
Total other (expense) income | 2,469 | 301 | (1,728) |
(Loss) income before income taxes | (15,224) | 7,053 | 12,889 |
Income tax (provision) benefit | 17,718 | 10,870 | (6,918) |
Net (loss) income | 2,494 | 17,923 | 5,971 |
Earnings per share: | |||
Net income | 2,494 | 17,923 | 5,971 |
Income allocated to participating securities | 0 | 0 | 644 |
Net income attributable to common stockholders | $ 2,494 | $ 17,923 | $ 5,327 |
Net (loss) income per share | |||
Basic (in usd per share) | $ 0.11 | $ 0.96 | $ 0.42 |
Diluted (in usd per share) | $ 0.10 | $ 0.85 | $ 0.37 |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 22,640,461 | 18,573,067 | 12,590,221 |
Diluted (in shares) | 23,923,777 | 21,140,382 | 14,543,170 |
CPaaS | |||
Revenue | $ 197,944 | $ 164,415 | $ 131,572 |
Cost of revenue | 110,343 | 94,296 | 75,859 |
Other | |||
Revenue | 34,650 | 39,698 | 31,383 |
Cost of revenue | $ 14,616 | $ 13,849 | $ 13,403 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity - USD ($) $ in Thousands | Total | Conversion of Series A preferred stock to Old Class A voting common stock | Conversion of Old Class B non-voting common stock to Class A voting common stock | Conversion of Class B voting common stock to Class A voting common stock | Class A voting common stock | Class B voting common stock | Old Common Class A | Old Common Class B | Common stockClass A voting common stock | Common stockClass A voting common stockConversion of Old Class B non-voting common stock to Class A voting common stock | Common stockClass A voting common stockConversion of Class B voting common stock to Class A voting common stock | Common stockClass B voting common stock | Common stockClass B voting common stockConversion of Class B voting common stock to Class A voting common stock | Common stockOld Common Class A | Common stockOld Common Class AConversion of Series A preferred stock to Old Class A voting common stock | Common stockOld Common Class B | Common stockOld Common Class BConversion of Old Class B non-voting common stock to Class A voting common stock | Additional paid-in capital | Additional paid-in capitalConversion of Series A preferred stock to Old Class A voting common stock | Additional paid-in capitalOld Common Class A | Additional paid-in capitalOld Common Class B | Accumulated other comprehensive (loss) income | Accumulated deficit |
Series A redeemable convertible preferred stock, shares outstanding, beginning balance (in shares) at Dec. 31, 2016 | 710,000 | ||||||||||||||||||||||
Series A redeemable convertible preferred stock, beginning balance at Dec. 31, 2016 | $ 21,818 | ||||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||
Conversion of Series A preferred stock to Old Class A voting common stock (in shares) | (710,000) | ||||||||||||||||||||||
Conversion of Series A preferred stock to Old Class A voting common stock | $ (21,818) | ||||||||||||||||||||||
Series A redeemable convertible preferred stock, shares outstanding, beginning balance (in shares) at Dec. 31, 2017 | 0 | ||||||||||||||||||||||
Series A redeemable convertible preferred stock, ending balance at Dec. 31, 2017 | $ 0 | ||||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2016 | 11,779,975 | 18,590 | 0 | 0 | 11,779,975 | 18,590 | |||||||||||||||||
Beginning balance at Dec. 31, 2016 | (22,374) | $ 0 | $ 0 | $ 12 | $ 0 | $ 9,356 | $ 0 | $ (31,742) | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Issuance of common stock (in shares) | 4,000,000 | 31,510 | 16,250 | ||||||||||||||||||||
Issuance of common stock | 74,400 | $ 94 | $ 109 | $ 4 | 74,396 | $ 94 | $ 109 | ||||||||||||||||
Exercise of warrants to purchase common stock (in shares) | 17,260 | ||||||||||||||||||||||
Exercise of warrants to purchase common stock | 91 | 91 | |||||||||||||||||||||
Stock based compensation | 1,803 | 1,803 | |||||||||||||||||||||
Purchase of common stock (in shares) | (29) | ||||||||||||||||||||||
Purchase of common stock | 0 | ||||||||||||||||||||||
Conversion of stock (in shares) | 34,840 | 162,991 | 13,586,485 | (162,991) | (13,586,485) | 1,775,000 | (34,840) | ||||||||||||||||
Conversion of stock | 0 | $ 21,818 | $ 0 | $ 0 | $ 13 | $ (13) | $ 1 | $ 21,817 | |||||||||||||||
Costs in connection with offering | (5,385) | (5,385) | |||||||||||||||||||||
Termination of Shareholders’ anti-dilutive arrangement | 184 | 184 | |||||||||||||||||||||
Net income (loss) | 5,971 | 5,971 | |||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2017 | 4,197,831 | 13,440,725 | 0 | 0 | |||||||||||||||||||
Ending balance at Dec. 31, 2017 | $ 76,711 | $ 4 | $ 13 | $ 0 | $ 0 | 102,465 | 0 | (25,771) | |||||||||||||||
Series A redeemable convertible preferred stock, shares outstanding, beginning balance (in shares) at Dec. 31, 2018 | 0 | ||||||||||||||||||||||
Series A redeemable convertible preferred stock, ending balance at Dec. 31, 2018 | $ 0 | ||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Issuance of common stock (in shares) | 330 | ||||||||||||||||||||||
Issuance of common stock | 11 | 11 | |||||||||||||||||||||
Exercise of warrants to purchase common stock (in shares) | 48,904 | ||||||||||||||||||||||
Exercise of warrants to purchase common stock | 37 | 37 | |||||||||||||||||||||
Stock based compensation | 3,328 | 3,328 | |||||||||||||||||||||
Conversion of stock (in shares) | 6,929,993 | (6,929,993) | |||||||||||||||||||||
Conversion of stock | $ 7 | $ (7) | |||||||||||||||||||||
Exercises of vested stock options (in shares) | 1,724,689 | ||||||||||||||||||||||
Exercises of vested stock options | 11,046 | $ 2 | 11,044 | ||||||||||||||||||||
Vesting of restricted stock units (in shares) | 11,000 | ||||||||||||||||||||||
Costs in connection with offering | (285) | (285) | |||||||||||||||||||||
Unrealized loss on marketable securities | (1) | (1) | |||||||||||||||||||||
Net income (loss) | 17,923 | 17,923 | |||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2018 | 12,912,747 | 6,510,732 | 12,912,747 | 6,510,732 | 0 | 0 | |||||||||||||||||
Ending balance at Dec. 31, 2018 | $ 108,770 | $ 13 | $ 6 | $ 0 | $ 0 | 116,600 | (1) | (7,848) | |||||||||||||||
Series A redeemable convertible preferred stock, shares outstanding, beginning balance (in shares) at Dec. 31, 2019 | 0 | ||||||||||||||||||||||
Series A redeemable convertible preferred stock, ending balance at Dec. 31, 2019 | $ 0 | ||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Issuance of common stock (in shares) | 2,875,000 | ||||||||||||||||||||||
Issuance of common stock | 147,391 | $ 3 | 147,388 | ||||||||||||||||||||
Stock based compensation | 6,626 | 6,626 | |||||||||||||||||||||
Conversion of stock (in shares) | 1,583,331 | (1,583,331) | |||||||||||||||||||||
Conversion of stock | 1 | $ 2 | $ (1) | ||||||||||||||||||||
Exercises of vested stock options (in shares) | 1,075,482 | ||||||||||||||||||||||
Exercises of vested stock options | 7,357 | $ 1 | 7,356 | ||||||||||||||||||||
Vesting of restricted stock units (in shares) | 163,944 | ||||||||||||||||||||||
Costs in connection with offering | (834) | (834) | |||||||||||||||||||||
Equity awards withheld for tax liability (in shares) | (26,026) | ||||||||||||||||||||||
Equity awards withheld for tax liability | (1,583) | (1,583) | |||||||||||||||||||||
Unrealized loss on marketable securities | 1 | 1 | |||||||||||||||||||||
Foreign currency translation | 41 | 41 | |||||||||||||||||||||
Net income (loss) | 2,494 | 2,494 | |||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 18,584,478 | 4,927,401 | 18,584,478 | 4,927,401 | 0 | 0 | |||||||||||||||||
Ending balance at Dec. 31, 2019 | $ 270,090 | $ 19 | $ 5 | $ 0 | $ 0 | $ 275,553 | $ 41 | $ (5,528) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
Net income | $ 2,494 | $ 17,923 | $ 5,971 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | |||
Depreciation and amortization | 9,538 | 5,824 | 5,712 |
Right-of-use asset amortization | 4,269 | ||
Accretion of bond discount | (700) | (164) | 0 |
Gain on sale of marketable securities | (4) | 0 | 0 |
Amortization of debt issuance costs | 177 | 64 | 376 |
Stock-based compensation | 6,626 | 3,339 | 1,803 |
Deferred taxes | (17,502) | (10,833) | 6,168 |
Loss on disposal of property and equipment | 456 | 191 | 91 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (6,178) | (2,784) | (4,387) |
Prepaid expenses and other assets | (4,176) | (1,926) | (1,622) |
Deferred costs | (69) | 243 | (906) |
Accounts payable | 1,145 | (169) | (2,429) |
Accrued expenses and other liabilities | 5,474 | 4,826 | 1,040 |
Deferred revenue and advanced billings | 554 | 6,019 | 2,573 |
Operating right-of-use liability | (3,357) | ||
Deferred rent | 0 | 2,080 | 233 |
Net cash provided by (used in) operating activities | (1,253) | 24,633 | 14,623 |
Cash flows from investing activities | |||
Purchase of property and equipment | (22,215) | (12,419) | (5,021) |
Capitalized software development costs | (3,544) | (2,028) | (2,942) |
Purchase of marketable securities | (68,361) | (35,236) | 0 |
Proceeds from Sale and Maturity of Marketable Securities | 86,467 | 18,000 | 0 |
Net cash used in investing activities | (7,653) | (31,683) | (7,963) |
Cash flows from financing activities | |||
Borrowings on line of credit | 0 | 0 | 4,000 |
Repayments on line of credit | 0 | 0 | (9,000) |
Payments on capital leases | (92) | (73) | |
Payments on capital leases | 0 | ||
Repayments on term loan | 0 | 0 | (40,000) |
Proceeds from the initial public offering, net of underwriting discounts | 0 | 0 | 74,400 |
Proceeds from the follow-on public offering, net of underwriting discounts | 147,391 | 0 | 0 |
Payment of debt issuance costs | (167) | (25) | (25) |
Proceeds from exercises of stock options | 7,357 | 11,046 | 174 |
Proceeds from exercises of warrants | 0 | 37 | 91 |
Value of equity awards withheld for tax liabilities | (1,406) | 0 | 0 |
Net cash provided by financing activities | 152,418 | 10,681 | 24,182 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (9) | 0 | 0 |
Net increase in cash, cash equivalents, and restricted cash | 143,503 | 3,631 | 30,842 |
Cash, cash equivalents, and restricted cash, beginning of period | 41,501 | 37,870 | 7,028 |
Cash, cash equivalents, and restricted cash, end of period | 185,004 | 41,501 | 37,870 |
Supplemental disclosure of cash flow information | |||
Cash paid during the year for interest | 341 | 107 | 1,535 |
Cash paid (refunded) for taxes | (178) | 155 | 855 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 4,528 | ||
Supplemental disclosure of noncash investing and financing activities | |||
Purchase of property and equipment, accrued but not paid | 1,375 | 1,204 | 886 |
Equity awards withheld for tax liabilities, accrued but not paid | 177 | 0 | 0 |
IPO | |||
Cash flows from financing activities | |||
Payments of costs related to public offering | 0 | (285) | (5,385) |
Follow-on Public Offering | |||
Cash flows from financing activities | |||
Payments of costs related to public offering | $ (757) | $ 0 | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 2,494 | $ 17,923 | $ 5,971 |
Other comprehensive income (loss) | |||
Unrealized gain (loss) on marketable securities, net of income taxes | 1 | (1) | 0 |
Foreign currency translation | 41 | 0 | 0 |
Total other comprehensive income (loss) | 42 | (1) | 0 |
Total comprehensive (loss) income | $ 2,536 | $ 17,922 | $ 5,971 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business Bandwidth Inc. (together with its subsidiaries, “Bandwidth” or the “Company”) was founded in July 2000 and incorporated in Delaware on March 29, 2001. The Company’s headquarters are located in Raleigh, North Carolina, and the Company has subsidiaries in the Netherlands, United Kingdom, Germany and Spain. The Company is a cloud-based, software-powered communications platform-as-a-service (“CPaaS”) provider that enables enterprises to create, scale and operate voice or messaging communications services across any mobile application or connected device. The Company has two operating and reportable segments, CPaaS and Other. CPaaS revenue is derived from usage and monthly services fees charged for usage of Voice, Messaging, 911 and Phone Numbers solutions through the Company’s proprietary CPaaS software application programming interfaces. Other revenue consists of fees charged for services provided such as: SIP trunking, data resale, and a hosted Voice-over Internet Protocol (“VoIP”). The Other segment also includes revenue from traffic generated by other carriers, SMS registration fees and other miscellaneous product lines. Initial Public Offering On November 9, 2017, the Company’s Registration Statement on Form S-1 relating to the initial public offering (“IPO”) of its Class A common stock was declared effective by the SEC. In connection with the Company’s IPO, 4,000,000 shares of the Company’s Class A common stock were sold at an initial public offering price of $20.00 per share for proceeds of approximately $74,400, net of underwriting discounts and commissions of $5,600. On November 14, 2017, the outstanding term loan of $38,500 was paid in full with proceeds from the IPO. Follow-on Public Offering |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Reclassification The Company reclassified certain prior year amounts to conform to the current year presentation. These reclassifications had no impact on the previously reported total assets, liabilities, stockholder’s deficit or net income. Principles of Consolidation The consolidated financial statements include the accounts of Bandwidth Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the amounts reported in these financial statements and accompanying notes. Although the Company believes that the estimates it uses are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. These estimates in the consolidated financial statements include, but are not limited to, allowance for doubtful accounts, reserve for sales credits, recoverability of long lived and intangible assets, estimated period of benefit, valuation allowances on deferred tax assets, certain accrued expenses, and contingencies. Revenue Recognition Adoption of Accounting Standards Codification ( “ ASC ” ) 606, “ Revenue from Contracts with Customers ” On January 1, 2019, the Company adopted the guidance of ASC 606, Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2019. The Company ’ s results for reporting periods beginning after January 1, 2019 are presented in accordance with the provisions under ASC 606 and prior period amounts have not been adjusted and continue to be reported in accordance with the Company ’ s revenue recognition policy as further described in Note 2, Summary of Significant Accounting Policies, to its Annual Report on Form 10-K for the year ended December 31, 2018. In connection with the adoption of ASC 606, the Company recognized a net increase to its opening accumulated deficit of $174 as of January 1, 2019, related to a discount present in one of its contracts. Prior to the adoption of ASC 606, the Company recognized the majority of its revenue based on the usage of its customers in the period the traffic traversed the Company ’ s network. The Company determined that ASC 606 continues to support the recognition of revenue over time for the majority of the Company ’ s contracts due to the continuous transfer of control to the customer. The adoption of ASC 606 did not result in a change in the Company ’ s accounting for its commission costs, which will continue to be expensed as incurred. The Company pays commissions over time and a corresponding requisite substantive service condition exists for the employee to receive the commission. The Company determined the timing of the commission payments and the underlying service performed by the employee were commensurate. The impact on the Company ’ s balance sheet presentation includes separately presenting customer refundable prepayments as advanced billings, whereas under ASC 605 these were included in the current portion of deferred revenue and advanced billings. Revenue Recognition Policy Revenue recognition commences upon transfer of control of promised goods or services to customers in an amount that the Company expects to receive in exchange for those products or services. The Company determines revenue recognition through the following steps: • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue, when, or as, the Company satisfies a performance obligation. Nature of Products and Services Revenue consists primarily of the sale of communications services offered through Application Programming Interface (“API”) software solutions to large enterprise, as well as small and medium-sized business, customers and is generally derived from usage and service fees in both the CPaaS and Other segments. Usage revenue includes voice communication (primarily driven by inbound minutes, outbound minutes and toll-free minutes) and messaging communication (driven by the number of messages) that traverse the platform and network. Service fees include the provision and management of phone numbers and emergency services access. The majority of the Company ’ s revenue is generated from usage-based fees earned from customers accessing the Company ’ s communications platform. Access to the Company ’ s communication platform is considered a series of distinct services, with continuous transfer of control to the customer, comprising one performance obligation and usage-based fees are recognized in revenue in the period the traffic traverses the Company ’ s network. For the years ended December 31, 2017, 2018 and 2019 the revenue from usage-based fees represented $76,148, $105,481 and $131,626 of CPaaS revenue, respectively, and $22,473, $32,524 and $29,012 of Other revenue, respectively. Revenue from service fees is recognized on a ratable basis as the service is provided, which is typically one month. For the years ended December 31, 2017, 2018 and 2019 the revenue from service fees represented $52,580, $55,719 and $61,193 of CPaaS revenue, respectively, and $8,910, $7,174 and $5,638 of Other revenue, respectively. The remaining $2,844, $3,215 and $5,125 of CPaaS revenue for the years ended December 31, 2017, 2018 and 2019 respectively, are generated from other miscellaneous services. Infrequently, Bandwidth’s contracts with customers may include multiple performance obligations. For such arrangements, revenues are allocated to each performance obligation based on its relative standalone selling price. Generally, standalone selling prices are determined based on the prices charged to similar customers for similar services. When required as part of providing service, revenues and associated expenses related to nonrefundable, upfront service activation and setup fees are deferred and recognized over the longer of the associated service contract period or estimated customer life. The Company’s contracts do not contain general rights of return. However, occasionally credits may be issued. The Company’s contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in accounts receivable and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met. The Company maintains a reserve for sales credits. Credits are accounted for as variable consideration and are estimated based on several inputs including historical experience and current trends of credit issuances. Adjustments to the reserve are recorded against revenue. The Company has various sales commission plans for which eligible employees can earn commissions from the sale of products and services to customers. Eligible employees must be employed at the time of payment in order to receive a commission. The Company pays commissions over time and a corresponding requisite substantive service condition exists for the employee to receive the commission. The Company determined that the timing of the commission payments and the underlying service performed by the employee were commensurate. Accordingly, sales commissions are generally expensed as incurred. These costs are recorded within sales and marketing expenses. Contract Assets and Liabilities The following table provides information about receivables and contract liabilities from contracts with customers: |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements The Company evaluated its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following table summarizes the assets measured at fair value as of December 31, 2018 and 2019: Amortized cost or carrying value Unrealized gains Unrealized losses Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents: Money market account $ 8,194 $ — $ — $ 8,194 $ — $ — $ 8,194 U.S. Reverse repurchase agreements 26,000 — — — 26,000 — 26,000 Total included in cash and cash equivalents 34,194 — — 8,194 26,000 — 34,194 Marketable securities: U.S. treasury securities 17,402 — (2) 17,400 — — 17,400 Total marketable securities 17,402 — (2) 17,400 — — 17,400 Total financial assets $ 51,596 $ — $ (2) $ 25,594 $ 26,000 $ — $ 51,594 Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents: Money market account $ 25,000 $ — $ — $ 25,000 Time deposits 75,250 — 75,250 Total financial assets $ 100,250 — — $ 100,250 The Company classifies its marketable securities as current assets as they are available for current operating needs. There were no marketable securities as of December 31, 2019. The Company monitors the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. There were no transfers between Levels 1, 2 or 3 during the years ended December 31, 2018 and 2019. The money market account is included in cash, cash equivalents and restricted cash in the consolidated balance sheets as of December 31, 2018 and 2019. During the years ended December 31, 2017, 2018 and 2019 there were $0, $18,000 and $69,000 in maturities of marketable securities, respectively. There were no sales of marketable securities for the years ended December 31, 2017 and 2018. Proceeds and gross realized gains from sales of marketable securities were $17,467 and $4, respectively, for the year ended December 31, 2019. The cost of the securities sold was based on the specific identification method and the gross realized gain is recorded as other income, net, in the consolidated statements of operations. Interest earned on marketable securities was $0, $77 and $6 for the years ended December 31, 2017, 2018 and 2019 respectively, and is recorded within interest (expense) income, net, in the accompanying consolidated statements of operations. |
Financial Statement Components
Financial Statement Components | 12 Months Ended |
Dec. 31, 2019 | |
Financial Statement Components [Abstract] | |
Financial Statement Components | 4. Financial Statement Components Accounts receivable, net of allowance for doubtful accounts consist of the following: As of December 31, 2018 2019 Trade accounts receivable $ 13,620 $ 14,692 Unbilled accounts receivable 11,174 16,200 Allowance for doubtful accounts (906) (769) Other accounts receivable 121 64 Total accounts receivable, net $ 24,009 $ 30,187 Components of allowance for doubtful accounts are as follows: Year ended December 31, 2018 2019 Allowance for doubtful accounts: Balance, beginning of period $ (32,463) $ (906) Charged to bad debt expense (460) (1,543) Deductions (1) 1,138 1,680 Billings deemed not probable of collection (2) (357) — Write-off of previously outstanding and fully reserved billings related to settlement 24,968 — Revenue recognized from outstanding billings previously deemed uncollectible related to settlement 6,268 — Balance, end of period $ (906) $ (769) ________________________ (1) Write off of uncollectible accounts after all collection efforts have been exhausted. (2) Represents amounts billed in the period but where collectability is not probable based on customer's collection experience. Amounts were charged to a contra-revenue account. On January 29, 2018, the Company and Verizon entered into a settlement agreement to resolve an ongoing dispute and litigation with Verizon, which is a CABS customer of the Company. The settlement agreement also resolved Verizon’s counter-claims against the Company. Pursuant to the settlement agreement, Verizon made a lump sum payment to the Company on February 8, 2018 of $4,400, which was recognized as revenue. Immediately following receipt of the $4,400 payment, the Company issued to Verizon credits with respect to other CABS amounts previously billed to Verizon and fully reserved of $24,968. The amount credited to Verizon comprised the majority of the allowance for CABS revenue as of December 31, 2017. The Company recognized as revenue $6,268, including the $4,400 payment made on February 8, 2018 and the other current outstanding Verizon CABS receivables which had been previously reserved as uncollectible, but for which collection was no longer in doubt as a result of the settlement. The settlement agreement also specifies certain terms for the Company’s CABS billings to Verizon prospectively. Accrued expenses and other current liabilities consisted of the following: As of December 31, 2018 2019 Accrued expense $ 8,292 $ 12,701 Accrued compensation and benefits 7,323 8,284 Accrued sales, use, and telecom related taxes 4,742 5,439 Deferred rent, current portion 298 — Other accrued expenses 738 904 Total accrued expenses and other current liabilities $ 21,393 $ 27,328 |
Right-of-Use Asset and Lease Li
Right-of-Use Asset and Lease Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Right-of-Use Asset and Lease Liabilities | 5. Right-of-Use Asset and Lease Liabilities ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company did not have any finance leases as of December 31, 2019. As the Company’s leases do not generally provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any restrictive covenants, variable lease payments or residual value guarantees. All leases with an initial term of 12 months or less are not recorded on the balance sheet and are not material. The Company presents the operating leases in long-term assets and current and long-term liabilities in the accompanying consolidated balance sheet as of December 31, 2019. The Company leases approximately 216,000 square feet of office space under operating lease agreements that expire at various dates beginning in 2022 and extend through 2025 in several locations within the United States including its headquarters, which is located in Raleigh, NC. The leases contain escalation clauses and various landlord concessions including tenant improvement allowances. On January 1, 2019, the Company entered into an amendment to an office building lease for the Company’s headquarters. The amendment provides an additional 30,114 square feet to the previous 87,605 square feet and extends the lease term to January 31, 2024. In addition, this amendment gives the Company the option to extend the lease for an additional five On April 4, 2019, the Company entered into an amendment to an office building lease. The amendment provides an additional 5,286 square feet to the previous 4,122 square feet for a total of 9,408 square feet of office space and extends the lease term to September 30, 2024. In addition, this amendment gives the Company the option to extend the lease for an additional five On January 1, 2019, the Company entered into an amendment to an office building lease relating to 40,657 square feet of office space, which the Company sub-leases to a related party, Republic Wireless, Inc. (“Republic”). The amendment gives the Company the options to extend the lease for an additional period of approximately 18 months and a subsequent additional five On May 29, 2019, the Company further amended the sub-lease to reduce the square feet of office space sub-leased to 17,073. No other terms were amended. The amendment to the office building sub-lease commenced in June 2019. Future minimum sub-lease receipts required under the non-cancellable lease are as follows: As of December 31, 2019 2020 $ 447 2021 457 2022 249 $ 1,153 As of December 31, 2019, the Company had six leased properties, with remaining lease terms of 2.58 years to 5.67 years, some of which include options to extend the leases for up to five The components of lease expense recorded in the consolidated statement of operations were as follows: Year ended December 31, 2019 Operating lease cost $ 5,548 Sublease income (1) (643) Total net lease cost $ 4,905 ________________________ (1) See Note 15, “Related Parties” to these consolidated financial statements for additional details on sublease income. Supplemental balance sheet information related to leases was as follows: Leases Classification As of December 31, 2019 Assets: Operating lease assets Operating right-of-use asset, net of accumulated amortization (1) $ 21,031 Total leased assets $ 21,031 Liabilities: Current Operating Operating lease liability, current $ 4,876 Non-current Operating Operating lease liability, non-current 19,868 Total lease liabilities $ 24,744 ________________________ (1) Operating lease assets are recorded net of accumulated amortization of $4,269 as of December 31, 2019. Supplemental cash flow and other information related to leases was as follows: Year ended December 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities: $ 3,357 Weighted average remaining operating lease term (in years): 4.35 Weighted average operating lease discount rate: 4.98 % Maturities of operating lease liabilities were as follows: As of December 31, 2019 2020 $ 5,907 2021 6,587 2022 6,302 2023 5,926 2024 1,987 Thereafter 949 Total lease payments 27,658 Less: imputed interest (2,894) Less: accrued lease incentive (20) Total lease obligations 24,744 Less: current obligations (4,876) Long-term lease obligations $ 19,868 Disclosures related to periods prior to adoption of the New Lease Standard Rent expense was $3,327 and $4,331 in the years ended December 31, 2017 and 2018, respectively. Future minimum lease payment obligations under non-cancelable operating and finance leases were as follows: As of December 31, 2018 2019 $ 5,044 2020 5,180 2021 5,254 2022 3,438 2023 1,399 Thereafter 2,343 $ 22,658 In conjunction with the sub-lease under the Facilities Service Agreement with Republic, the Company recorded a reduction of rent expense of $949 and $1,005 for the years ended December 31, 2017 and 2018, respectively, which is included in general and administrative expenses in the consolidated statements of operations. Future minimum sub-lease receipts required under the non-cancellable lease are as follows: As of December 31, 2018 2019 $ 1,042 2020 1,065 2021 1,089 2022 594 $ 3,790 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 6. Property and Equipment Property and equipment, net consisted of the following: As of December 31, 2018 2019 Furniture and fixtures $ 1,741 $ 2,373 Computer and office equipment 7,662 4,627 Telecommunications equipment 28,889 44,324 Leasehold improvements 2,438 5,263 Software 1,805 2,018 Internal-use software development 16,293 17,952 Automobile 10 10 Total cost 58,838 76,567 Less—accumulated depreciation (33,702) (34,913) Total property and equipment, net $ 25,136 $ 41,654 The Company capitalizes the costs to design software for internal use related to the development of its platform during the application development stage of the projects. The costs are primarily comprised of salaries and benefits of the projects’ engineers and product development teams. Internally developed software is reported at cost less accumulated amortization. Amortization begins once the project is substantially complete and ready for its intended use. The Company amortizes the asset on a straight-line basis over the useful life, which is estimated to be three Amortization expense related to capitalized software development costs were $2,133, $1,482 and $2,024 for the years ended December 31, 2017, 2018 and 2019 respectively. The Company recognized an impairment of $81, $158 and $275 during the years ended December 31, 2017, 2018 and 2019, respectively, related to capitalized software development costs that provided no future benefit and therefore were impaired. This expense is reflected within cost of revenue in the accompanying consolidated statements of operations. The Company capitalized $2,942, $2,028 and $3,612 of software development costs in the years ended December 31, 2017, 2018 and 2019, respectively. The Company recognized depreciation expense, which includes amortization of capitalized software development costs, as follows: Year ended December 31, 2017 2018 2019 Cost of revenue $ 4,315 $ 4,490 $ 6,583 Research and development 81 161 268 Sales and marketing 27 51 112 General and administrative 450 568 2,055 Total depreciation expense $ 4,873 $ 5,270 $ 9,018 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7. Intangible Assets Intangible assets, net consisted of the following as of December 31, 2018: Gross Accumulated Net Carrying Amortization (Years) Customer relationships $ 10,396 $ (4,071) $ 6,325 20 Other, definite lived 3,933 (3,933) — 2 - 7 Licenses, indefinite lived 764 — 764 Indefinite Total intangible assets, net $ 15,093 $ (8,004) $ 7,089 Intangible assets, net consisted of the following as of December 31, 2019: |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt On March 1, 2019, the Company amended and restated its Credit and Security Agreement with KeyBank National Association (“KeyBank”). The agreement is for a $25,000 revolving loan, which includes a swing line of up to $1,000 and limits letters of credit commitments to a maximum of $2,500. The term of the amended and restated Credit and Security Agreement is three years and matures on March 1, 2022. Loans under the Credit Agreement will bear interest at the highest of (i) the bank’s prime rate, (ii) the federal funds effective rate plus 0.5 percent, and (iii) the London Interbank Offered Rate plus 1.00 percent. This agreement requires that a specified minimum liquidity amount must be maintained in cash and cash equivalents at all times and that the Company meet a minimum revenue clause on a quarterly basis. In connection with amending its Credit and Security Agreement on March 1, 2019, the Company incurred $142 in debt issuance costs. Unamortized debt issuance costs from the original Credit and Security Agreement of $106 were recorded as interest expense. In addition, the Company incurred and capitalized $25 of periodic loan fees. As of December 31, 2018, unamortized debt issuance costs, which were included in prepaid expenses and other current assets in the accompanying consolidated balance sheets, were $136. As of December 31, 2019 the outstanding debt issuance costs are $125, of which $70 are included in prepaid expenses and other current assets and $55 are included in other long-term assets. On June 4, 2019, KeyBank and Pacific Western Bank entered into an Assignment and Acceptance Agreement, whereby KeyBank, as the Assignor, sold and assigned $10,000 of the Company's Revolving Credit Commitment to Pacific Western Bank, the Assignee. KeyBank retains $15,000 of the Revolving Credit Commitment. As of December 31, 2018 and December 31, 2019, the Company had $0 outstanding on the revolving loan and was in compliance with all financial and non-financial covenants for all periods presented. The available borrowing capacity under the revolving loan was $25,000 as of December 31, 2019. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 9. Segment and Geographic Information The Company has two reportable segments, CPaaS and Other. Segments are primarily evaluated based on revenue and gross profit. The Company does not allocate operating expenses, interest expense or income tax expense to its segments. Accordingly, the Company does not report such information. Additionally, the Chief Operating Decision Maker does not evaluate the Company’s operating segments using discrete asset information. The segments share the majority of the Company’s assets. Therefore, no segment asset information is reported. Year ended December 31, 2017 2018 2019 CPaaS Revenue $ 131,572 $ 164,415 $ 197,944 Cost of revenue 75,859 94,296 110,343 Gross profit $ 55,713 $ 70,119 $ 87,601 Other Revenue $ 31,383 $ 39,698 $ 34,650 Cost of revenue 13,403 13,849 14,616 Gross profit $ 17,980 $ 25,849 $ 20,034 Consolidated Revenue $ 162,955 $ 204,113 $ 232,594 Cost of revenue 89,262 108,145 124,959 Gross profit $ 73,693 $ 95,968 $ 107,635 The Company's long-lived assets were primarily held in the United States as of December 31, 2018 and December 31, 2019. As of December 31, 2018 and December 31, 2019, long-lived assets held outside of the United States were $0 and $2,924, respectively. The Company generates its revenue primarily in the United States. Revenue by geographic area is detailed in the table below (which is determined based on the customer billing address): Year ended December 31, 2017 2018 2019 CPaaS United States $ 131,263 $ 164,135 $ 192,506 International 309 280 5,438 Total $ 131,572 $ 164,415 $ 197,944 Other United States $ 31,130 $ 39,432 $ 33,664 International 253 266 986 Total $ 31,383 $ 39,698 $ 34,650 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity Prior to the IPO, the Company had three classes of stock: 1) Series A redeemable convertible preferred stock (“Series A preferred stock”), 2) Old Class A common stock, and 3) Old Class B common stock. On October 19, 2017, the Company’s Board of Directors approved, and on October 23, 2017 the Company effected, a 2.5-to-1 split of its common stock. In connection with the common stock split, each share of outstanding common stock, option to purchase common stock and warrant to purchase common stock was increased to 2.5 shares of common stock and the exercise price of each outstanding option or warrant to purchase common stock was proportionately decreased. The stock split has been reflected retrospectively in these consolidated financial statements. In connection with the stock split, the conversion ratio of each share of outstanding Series A preferred stock was also adjusted such that each share of outstanding Series A preferred stock converted into 2.5 shares of Old Class A common stock after the 2.5-to-1 split. Redeemable Convertible Preferred Stock As of December 31, 2016, the Company had 710,000 issued and outstanding shares of Series A preferred stock. On November 9, 2017, each share of Series A preferred stock converted into 2.5 shares of Old Class A common stock at the stockholders’ option resulting in the issuance of 1,775,000 shares of Old Class A common stock. Preferred Stock On November 9, 2017, the Company filed its second amended and restated certificate of incorporation and authorized 10,000,000 shares of undesignated preferred stock, par value $0.001, of which no shares were issued and outstanding as of December 31, 2018 and 2019. Common Stock As of December 31, 2016, the Company had two classes of common stock: (1) Old Class A common stock and (2) Old Class B common stock. The Old Class A common stock had one vote per share and the Old Class B common stock had no voting rights. As of December 31, 2016, there were 11,779,975 shares of Old Class A common stock issued and outstanding at $0.001 par value per share. As of December 31, 2016, there were 18,590 shares of Old Class B common stock issued and outstanding at $0.001 par value per share. On November 9, 2017, the Company filed its second amended and restated certificate of incorporation. Upon the effectiveness of the Company’s second amended and restated certificate of incorporation and the effectiveness of the Company’s second amended and restated bylaws, i) each share of Old Class A common stock was reclassified as one share of Class B common stock with ten votes per share, ii) each share of Old Class B common stock was reclassified as one share of Class A common stock with one vote per share. Consequently, the Series A preferred stock, that had previously converted into 2.5 shares of the Old Class A common stock, at the option of the holder, was converted into 1,775,000 shares of Class B common stock. Subsequent to the effectiveness of the Company’s second amended and restated certificate of incorporation, the Company’s common stock consists of 120,000,000 authorized shares, par value $0.001 per share, of which the authorized Class A common stock consists of 100,000,000 shares and the authorized Class B common stock consists of 20,000,000 shares as of December 31, 2018 and 2019. As of December 31, 2018 and 2019, there were 12,912,747 and 18,584,478 shares, respectively, of Class A common stock issued and outstanding at $0.001 par value per share. As of December 31, 2018 and 2019, there were 6,510,732 and 4,927,401 shares, respectively, of Class B common stock issued and outstanding at $0.001 par value per share. Shares of Class B common stock are convertible into shares of Class A common stock upon the stockholder’s voluntary written notice to the Company’s transfer agent or a transfer by the stockholder, subject to limited exceptions for transfers for estate planning purposes. Voting Rights The holders of Class A common stock and Class B common stock have identical rights, except that holders of Class A voting common stock are entitled to one vote per share of Class A common stock and holder of Class B common stock are entitled to ten votes per share of Class B common stock. Dividends Any dividends or distributions paid or payable to the holders of shares of Class A common stock and Class B common stock shall be paid pro-rata, on an equal priority. During the years ended December 31, 2017, 2018 and 2019, no dividends were declared. Dividend payments are subject to a restriction by the Company’s Credit and Security Agreement prohibiting the Company to pay any dividends or any other distribution or payment on account of or in redemption, retirement or purchase of any capital stock through the term of the agreement. Reserved Shares The Company had reserved shares of Class A common stock for issuance under stock-based award agreements as follows: As of December 31, 2018 2019 Stock options issued and outstanding 1,937,370 853,399 Nonvested restricted stock units issued and outstanding 324,252 392,351 Stock-based awards available for grant under the 2017 Plan 896,760 1,310,354 3,158,382 2,556,104 |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | 11. Stock Based Compensation 2010 Stock Option Plan As of July 26, 2010, the Company adopted the 2010 Equity Compensation Plan (the “2010 Plan”). On August 24, 2017, the 2010 Plan was amended to provide for a total of 3,466,275 shares of common stock reserved for issuance under the 2010 Plan. Eligible plan participants include employees, directors and consultants. The 2010 Plan permits the granting of incentive stock options and non-qualified stock options. On November 9, 2017, the 2010 Plan was terminated in connection with the Company’s IPO. Accordingly, no shares are available for future issuance under the 2010 Plan. However, the 2010 Plan continues to govern the terms and conditions of the outstanding awards granted thereunder. On November 9, 2017, the Company filed its second amended and restated certificate of incorporation. Upon the effectiveness of the Company’s second amended and restated certificate of incorporation and the effectiveness of the Company’s second amended and restated bylaws, options exercisable into shares of Old Class A common stock and Old Class B common stock became exercisable into shares of Class B common stock and Class A common stock, respectively. 2017 Incentive Award Plan The Company’s 2017 Incentive Award Plan (the “2017 Plan”) became effective on November 9, 2017. The 2017 Plan provides for the grant of stock options, including incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, dividend equivalents, restricted stock units, and other stock or cash based awards to employees, consultants and directors of the Company. A total of 1,050,000 shares of the Company’s Class A common stock were originally reserved for issuance under the 2017 Plan. These available shares automatically increase each January 1, beginning on January 1, 2018, by 5% of the number of shares of the Company’s Class A common stock outstanding on the final day of the immediately preceding calendar year. On January 1, 2019, the shares available for grant under the 2017 Plan were automatically increased by 645,637 shares. The terms of the stock option grants are determined by the Company’s Board of Directors. The Company’s stock options vest based on terms of the stock option agreements, which is generally over four years. The stock options have a contractual life of ten years. Restricted stock units (“RSU”) granted under the 2017 Plan are subject to a time-based vesting condition. The compensation expense related to these awards is based on the grant date fair value of the RSUs and is recognized on a ratable basis over the applicable service period. The Company granted restricted stock units to its non-employee Board of Directors, some of which vested immediately while others vest 25% as of each calendar quarter immediately following the grant date. Certain RSUs awarded to executives vest over four years with 50% vesting in the first year in 12.5% increments on each calendar quarter immediately following the grant date and the remaining 50% earned over years two, three and four. Other RSUs awarded to executives and employees generally are earned over a service period of four years. Stock Options The following summarizes the stock option activity for the periods presented: Number of Weighted- Weighted- Aggregate Outstanding as of December 31, 2018 1,937,370 $ 7.41 4.00 $ 64,596 Granted — — Exercised (1,075,482) 6.84 57,159 Forfeited or cancelled (8,489) 12.36 Outstanding as of December 31, 2019 853,399 $ 8.07 3.41 $ 47,770 Options vested and exercisable at December 31, 2019 752,402 $ 7.27 2.88 $ 42,722 Options vested and expected to vest as of December 31, 2019 851,389 $ 8.06 3.40 $ 47,672 Aggregate intrinsic value is computed based on the difference between the option exercise price and the fair value of the Company’s common stock as of December 31, 2019 based on the Company’s Class A common stock price as reported on the NASDAQ Global Select Market. The weighted average grant-date fair value of stock options granted was $7.72 and $11.10 for the years ended December 31, 2017 and 2018, respectively. No options were granted for the year ended December 31, 2019. The total estimated grant date fair value of options vested was $1,299, $979 and $729 for the years ended December 31, 2017, 2018 and 2019, respectively. As of December 31, 2019, total unrecognized compensation cost related to all non-vested stock options was $519, which will be amortized over a weighted-average period of 1.42 years. Restricted Stock Units The following summarizes the restricted stock unit activity for the periods presented: Number of awards outstanding Weighted-average grant date fair value (per share) Nonvested RSUs as of December 31, 2018 324,252 $ 26.95 Granted 241,376 44.76 Vested (163,944) 32.79 Forfeited or cancelled (9,333) 37.60 Nonvested RSUs as of December 31, 2019 392,351 $ 35.22 As of December 31, 2019, total unrecognized compensation cost related to non-vested RSUs was $11,252, which will be amortized over a weighted-average period of 2.76 years. Stock-Based Compensation Expense The Company recognized total stock-based compensation expense as follows: Year ended December 31, 2017 2018 2019 Cost of revenue $ 80 $ 114 $ 211 Research and development 155 555 1,461 Sales and marketing 172 511 1,199 General and administrative (1) (2) 1,396 2,159 3,755 Total $ 1,803 $ 3,339 $ 6,626 ________________________ (1) On September 1, 2017, the Company reached a separation agreement with an executive. The agreement resulted in a modification of the former employee ’ s 194,234 outstanding options to purchase common stock, which accelerated the vesting period and extended the exercise period, resulting in the recognition of $394 of additional stock compensation expense for the year ended December 31, 2017. (2) On December 21, 2018, the Company reached a separation agreement with an executive. The agreement resulted in a modification of the former employee ’ s 17,725 non-vested restricted stock units, which accelerated the vesting period, resulting in the recognition of $535 of additional stock compensation expense for the year ended December 31, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Operating Leases The Company leases office space under operating lease agreements that expire over the next 5.67 years. See Note 5, “Right-of-Use Asset and Lease Liabilities” to the consolidated financial statements for additional details on the Company's operating lease commitments. Contractual Obligations On October 25, 2015, the Company entered into an agreement with a telecommunications service provider. The service agreement requires the Company to pay a monthly recurring charge beginning on January 1, 2016 associated with the services received. The service agreement is non-cancellable and contains annual minimum commitments of $1,200, to be fulfilled over five years or for as long as the Company continues to receive services from this vendor. In addition, as of December 31, 2019 the Company has $8,565 in other non-cancellable purchase obligations, consisting of primarily network equipment maintenance and software license contracts, of which $4,915 will be fulfilled within a year. Legal Matters The Company is involved as a defendant in various lawsuits alleging that the Company failed to bill, collect and remit certain taxes and surcharges associated with the provision of 911 services pursuant to applicable laws in various jurisdictions. In August 2016, the Company received a Civil Investigative Demand from the Consumer Protection Division of the North Carolina Department of Justice, though the Company has not been served with a complaint in connection with that investigation. The North Carolina Department of Justice is investigating the billing, collection and remission of certain taxes and surcharges associated with 911 service pursuant to applicable laws of the State of North Carolina. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | 13. Employee Benefit Plan The Company sponsors a defined contribution 401(k) plan which allows eligible employees to defer a portion of their compensation. The Company, at its discretion, may make matching contributions. The Company made matching contributions of $806, $1,117 and $1,731 for the years ended December 31, 2017, 2018 and 2019, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes The following table presents domestic and foreign components of income (loss) before income taxes for the tax years ended December 31, 2017, 2018 and 2019: Year ended December 31, 2017 2018 2019 United States $ 12,889 $ 7,053 $ (15,229) International — — 5 Income (loss) before income taxes $ 12,889 $ 7,053 $ (15,224) (Provision) benefit for income taxes from operations consists of the following: Year ended December 31, 2017 2018 2019 Current: Federal $ (448) $ 162 $ 81 State (302) (125) 132 Foreign — — 3 Total (750) 37 216 Deferred: Federal (5,983) 8,945 15,205 State (185) 1,888 2,297 Total (6,168) 10,833 17,502 Income tax (provision) benefit $ (6,918) $ 10,870 $ 17,718 The following table presents a reconciliation of the statutory federal tax rate and the Company’s effective tax rate for the years ended December 31, 2017, 2018 and 2019: Year ended December 31, 2017 2018 2019 Federal Tax Rate 34.0 % 21.0 % 21.0 % State Tax Rate 4.7 6.3 3.1 Non-deductible expenses 1.2 1.7 (1.6) Research credit (1.5) (13.6) 7.2 Stock-based compensation 0.1 (168.0) 88.6 Deferred tax rate change 16.1 (0.7) (0.3) Other (0.9) (0.8) (1.6) Total 53.7 % (154.1) % 116.4 % The following table presents the significant components of the Company’s net deferred tax assets: As of December 31, 2018 2019 Deferred tax assets: Allowance for doubtful accounts $ 57 $ 97 Accrued liabilities 2,755 2,083 Operating lease liabilities — 6,335 Deferred revenue 734 1,682 Intangibles 85 — Stock-based compensation - deferred tax asset 3,486 2,109 Tax credits 2,690 3,710 Net operating losses 11,359 30,835 Other deferred tax assets 61 90 Net deferred tax assets 21,227 46,941 Deferred tax liabilities: Property and equipment 2,993 5,793 Goodwill 729 855 Intangibles — 41 Operating lease assets — 5,295 Other liability 146 96 Total deferred tax liabilities 3,868 12,080 Net deferred tax asset $ 17,359 $ 34,861 The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered the historic performance of Bandwidth, the nature of the Company’s deferred tax assets and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. Based on an analysis of these factors, the Company determined that in 2019 no valuation allowance against deferred tax assets was required. As of December 31, 2019, the Company had approximately $125,367 in federal net operating loss carryforwards and $5,078 in federal tax credits. All federal net operating loss carryforwards were generated after the enactment of the Tax Cuts and Jobs Act (the “Act”) and as such do not expire, but can only be utilized to offset up to 80% of taxable income in any given year. The federal tax credits start to expire at various dates beginning in 2032. As of December 31, 2019, the Company had approximately $79,890 in state net operating loss carryforwards. If not utilized, some state net operating loss carryforwards will expire at various dates beginning in 2023. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year ended December 31, 2018 2019 Unrecognized tax benefits—January 1, $ 731 $ 1,046 Gross increases—tax positions in prior period 56 — Gross decreases—tax positions in prior period — (15) Gross increases—tax positions in current period 287 367 Lapse of statute of limitations (28) — Unrecognized tax benefits—December 31, $ 1,046 $ 1,398 If the $1,398 of unrecognized tax benefit is recognized, it would impact the effective tax rate. The Company has not incurred any material tax interest or penalties with respect to income taxes in the years ended December 31, 2017, 2018 and 2019. The Company expects no material changes in the twelve months following December 31, 2019 in its uncertain tax positions. The Company files U.S. federal income tax returns as well as income tax returns in many U.S. states. The tax years 2014 - 2018 remain open to examination by the major jurisdictions in which the Company is subject to tax due to the carryforward of net operating losses. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Parties | 15. Related Parties On April 20, 2015, the Company created a wholly owned subsidiary, Republic, which was incorporated in Delaware. On November 30, 2016, the Company completed a pro-rata distribution of the common stock of Republic to its stockholders of record as of the close of business. Each of its stockholders received one share of Republic common stock for each share of Bandwidth common or redeemable convertible preferred stock held as of the close of business on November 30, 2016. In addition, the Company distributed $30,000 in cash to Republic in connection with the Spin-Off. Accordingly, the net assets distributed to the stockholders in connection with the Spin-Off was $28,899. Bandwidth has not otherwise provided nor does it intend to provide financial support to Republic. Given the nature of the Spin-Off transaction, the equity holders of Bandwidth are comprised of substantially the same individuals and entities that are the equity owners of Republic. The Company determined the equity owners of Republic are related parties of Bandwidth. As described below, the Company has certain involvement with Republic via ongoing services arrangements, with these ongoing services arrangements creating a variable interest in Republic. The Company assessed the relationship with Republic under guidance for variable interest entities, and because investors in Republic have disproportionate voting rights, the Company concluded that Republic is a VIE. Republic is a provider of Wi-Fi centric mobile services directly to retail consumers. Bandwidth determined it is not the primary beneficiary of Republic, as Bandwidth and its related parties do not individually have power to direct the activities that most significantly impact Republic’s economic performance and power is not shared. Bandwidth’s involvement with Republic involves providing certain support services through the Transition Services Agreement, which does not give it power over key activities. Key activities are directed by the Board of Directors Republic, which require majority approval. Bandwidth does not have direct representation on the Board of Republic and is not able to exert power over its key activities. Bandwidth does not have an implicit variable interest in Republic. Republic is financed primarily through the cash distribution in connection with the Spin-off and its own ongoing operations. The Company’s maximum exposure to loss relating to this variable interest entity is limited to amounts due under the service agreements between Bandwidth and Republic as described further below. The Company believes that for US Federal income tax purposes, the Spin-Off qualifies as tax-free for Republic, Bandwidth and its stockholders. The Company entered into a tax sharing agreement with Republic that governs rights and obligations after the Spin-Off regarding income taxes and other taxes, including tax liabilities and benefits, attributes, returns and contests. In connection with the Spin-Off on November 30, 2016, the Company and Republic entered into certain agreements in order to govern the ongoing relationships between the two companies after the Spin-Off and to provide for an orderly transition. The agreements include a Transition Services Agreement, Facilities Sharing Agreement, Tax Sharing Agreement, and Master Services Agreement. The equity holders of Bandwidth pre-initial public offering are comprised of substantially the same individuals and entities that are the equity owners of Republic. The Transition Services Agreement specified certain services to be provided by the Company for a period of up to two years from the Spin-Off, which ended in November 2018. These services included insurance administration, billing and collections, and other technical support as well as legal services related to intellectual property. The Company was compensated by Republic for these services based on costs incurred by the Company. The Company received net compensation under the Transition Services Agreement of $575 and $80 for the years ended December 31, 2017 and 2018, respectively, which is included in general and administrative expenses in the consolidated statements of operations. No amounts were due to the Company under the Transition Services Agreement as of December 31, 2018. The Facilities Sharing Agreement specifies that the Company will sublet office space to Republic for at least 63 months. The Company recorded a reduction of rent expense under the Facilities Sharing Agreement of $949, $1,005 and $643 for the years ended December 31, 2017, 2018 and 2019, respectively, which is included in general and administrative expenses in the consolidated statements of operations. No amounts were due to the Company under the Facilities Sharing Agreement as of December 31, 2018 and 2019. The Tax Sharing Agreement governs rights and obligations after the Spin-Off regarding income taxes and other taxes, including tax liabilities and benefits, attributes, returns and contests. There were no amounts outstanding or payable under this agreement as of December 31, 2018 and 2019. The Master Services Agreement specifies certain wholesale telecommunications services to be provided by the Company. The agreement is cancellable at any time by either party. The Company provided telecommunication services to Republic of $2,451, $3,884 and $2,602 for the years ended December 31, 2017, 2018 and 2019, respectively. The Company recognized such amounts as revenue in the accompanying consolidated statements of operations. As of December 31, 2018 and 2019, the Company had a receivable of $327 and $161, respectively, under the Master Services Agreement. On March 1, 2019, an amendment to the current Master Services Agreement was executed. Pursuant to the terms of the new agreement, Republic receives reduced pricing on its messaging services, effective April 1, 2019. All other terms and conditions of the existing agreement remain. On June 20, 2019, Republic executed a further amendment to the current Master Services Agreement. Pursuant to the terms of the June 20, 2019 amendment, Republic receives reduced pricing on its outbound voice services effective on June 20, 2019. Republic also executed a revenue commitment schedule on June 20, 2019. Pursuant to the revenue commitment schedule, Republic agreed to spend a minimum of $100 per month during the 11-month period commencing July 1, 2019 through May 31, 2020. Subsequent to the expiration of the 180-day IPO blackout window on May 9, 2018, Republic employees that held Bandwidth stock options began exercising their options. Upon exercise, Bandwidth withholds the employee tax amounts due from the proceeds. Bandwidth had collected on behalf of, and remitted withholding tax to, Republic of $0, $9,213 and $1,781 for the years ended December 31, 2017, 2018 and 2019 respectively. There were no amounts outstanding or payable as of December 31, 2018 and 2019. On September 30, 2019, the Company entered into a services agreement with Republic. Pursuant to the terms of the new agreement, Republic receives services performed by the Company’s legal department, effective September 30, 2019. The Company is compensated by Republic for these services based on costs incurred by the Company. The Company received net compensation under this agreement of $31 for the year ended December 31, 2019, which is included in general and administrative expenses in the consolidated statements of operations. As of December 31, 2019, the Company had a receivable of $10 under this agreement. |
Basic and Diluted Income per Co
Basic and Diluted Income per Common Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Income per Common Share | 16. Basic and Diluted Income per Common Share During the year ended December 31, 2017, the Company used the two-class method to compute net income per common share, because it had issued securities, other than common stock, that contractually entitled the holders to participate in dividends and earnings. These participating securities included the Company’s redeemable convertible preferred stock which had non-forfeitable rights to participate in any dividends declared on the Company’s common stock. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings. Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses. Diluted net income per common share is computed under the two-class method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options and warrants. The Company analyzed the potential dilutive effect of any outstanding dilutive securities under the “if-converted” method and treasury-stock method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period or date of issuance, if later. The Company reports the more dilutive of the approaches (two-class or “if-converted”) as its diluted net income per share during the period. Subsequent to the IPO in November 2017, the Company no longer had outstanding securities other than common stock, which required holders’ participation in dividends and earnings; therefore, the Company was no longer required to calculate EPS under the two-class method. Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by giving effect to all potential shares of common stock, including stock options, stock related to unvested restricted stock awards, and outstanding warrants to the extent dilutive. The components of basic and diluted income per share are as follows: Year ended December 31, 2017 2018 2019 Earnings per share Net income $ 5,971 $ 17,923 $ 2,494 Less: net income allocated to participating securities 644 — — Net income attributable to common stockholders $ 5,327 $ 17,923 $ 2,494 Net income per share: Basic $ 0.42 $ 0.96 $ 0.11 Diluted $ 0.37 $ 0.85 $ 0.10 Weighted Average Number of Common Shares Outstanding Basic 12,590,221 18,573,067 22,640,461 Dilutive effect of stock options, restricted stock units, and warrants 1,952,949 2,567,315 1,283,316 Diluted 14,543,170 21,140,382 23,923,777 The following common share equivalents have been excluded from the calculation of weighted-average common shares outstanding, because the effect is anti-dilutive for the periods presented: Year ended December 31, 2017 2018 2019 Anti-dilutive disclosure Series A redeemable convertible preferred stock outstanding 1,522,123 — — Stock options issued and outstanding 50,604 — — |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Reclassification | Reclassification The Company reclassified certain prior year amounts to conform to the current year presentation. These reclassifications had no impact on the previously reported total assets, liabilities, stockholder’s deficit or net income. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Bandwidth Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of EstimatesThe preparation of the Company’s consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the amounts reported in these financial statements and accompanying notes. Although the Company believes that the estimates it uses are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. These estimates in the consolidated financial statements include, but are not limited to, allowance for doubtful accounts, reserve for sales credits, recoverability of long lived and intangible assets, estimated period of benefit, valuation allowances on deferred tax assets, certain accrued expenses, and contingencies. |
Revenue Recognition | Revenue Recognition Adoption of Accounting Standards Codification ( “ ASC ” ) 606, “ Revenue from Contracts with Customers ” On January 1, 2019, the Company adopted the guidance of ASC 606, Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2019. The Company ’ s results for reporting periods beginning after January 1, 2019 are presented in accordance with the provisions under ASC 606 and prior period amounts have not been adjusted and continue to be reported in accordance with the Company ’ s revenue recognition policy as further described in Note 2, Summary of Significant Accounting Policies, to its Annual Report on Form 10-K for the year ended December 31, 2018. In connection with the adoption of ASC 606, the Company recognized a net increase to its opening accumulated deficit of $174 as of January 1, 2019, related to a discount present in one of its contracts. Prior to the adoption of ASC 606, the Company recognized the majority of its revenue based on the usage of its customers in the period the traffic traversed the Company ’ s network. The Company determined that ASC 606 continues to support the recognition of revenue over time for the majority of the Company ’ s contracts due to the continuous transfer of control to the customer. The adoption of ASC 606 did not result in a change in the Company ’ s accounting for its commission costs, which will continue to be expensed as incurred. The Company pays commissions over time and a corresponding requisite substantive service condition exists for the employee to receive the commission. The Company determined the timing of the commission payments and the underlying service performed by the employee were commensurate. The impact on the Company ’ s balance sheet presentation includes separately presenting customer refundable prepayments as advanced billings, whereas under ASC 605 these were included in the current portion of deferred revenue and advanced billings. Revenue Recognition Policy Revenue recognition commences upon transfer of control of promised goods or services to customers in an amount that the Company expects to receive in exchange for those products or services. The Company determines revenue recognition through the following steps: • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue, when, or as, the Company satisfies a performance obligation. Nature of Products and Services Revenue consists primarily of the sale of communications services offered through Application Programming Interface (“API”) software solutions to large enterprise, as well as small and medium-sized business, customers and is generally derived from usage and service fees in both the CPaaS and Other segments. Usage revenue includes voice communication (primarily driven by inbound minutes, outbound minutes and toll-free minutes) and messaging communication (driven by the number of messages) that traverse the platform and network. Service fees include the provision and management of phone numbers and emergency services access. The majority of the Company ’ s revenue is generated from usage-based fees earned from customers accessing the Company ’ s communications platform. Access to the Company ’ s communication platform is considered a series of distinct services, with continuous transfer of control to the customer, comprising one performance obligation and usage-based fees are recognized in revenue in the period the traffic traverses the Company ’ s network. For the years ended December 31, 2017, 2018 and 2019 the revenue from usage-based fees represented $76,148, $105,481 and $131,626 of CPaaS revenue, respectively, and $22,473, $32,524 and $29,012 of Other revenue, respectively. Revenue from service fees is recognized on a ratable basis as the service is provided, which is typically one month. For the years ended December 31, 2017, 2018 and 2019 the revenue from service fees represented $52,580, $55,719 and $61,193 of CPaaS revenue, respectively, and $8,910, $7,174 and $5,638 of Other revenue, respectively. The remaining $2,844, $3,215 and $5,125 of CPaaS revenue for the years ended December 31, 2017, 2018 and 2019 respectively, are generated from other miscellaneous services. Infrequently, Bandwidth’s contracts with customers may include multiple performance obligations. For such arrangements, revenues are allocated to each performance obligation based on its relative standalone selling price. Generally, standalone selling prices are determined based on the prices charged to similar customers for similar services. When required as part of providing service, revenues and associated expenses related to nonrefundable, upfront service activation and setup fees are deferred and recognized over the longer of the associated service contract period or estimated customer life. The Company’s contracts do not contain general rights of return. However, occasionally credits may be issued. The Company’s contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in accounts receivable and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met. The Company maintains a reserve for sales credits. Credits are accounted for as variable consideration and are estimated based on several inputs including historical experience and current trends of credit issuances. Adjustments to the reserve are recorded against revenue. The Company has various sales commission plans for which eligible employees can earn commissions from the sale of products and services to customers. Eligible employees must be employed at the time of payment in order to receive a commission. The Company pays commissions over time and a corresponding requisite substantive service condition exists for the employee to receive the commission. The Company determined that the timing of the commission payments and the underlying service performed by the employee were commensurate. Accordingly, sales commissions are generally expensed as incurred. These costs are recorded within sales and marketing expenses. Contract Assets and Liabilities The following table provides information about receivables and contract liabilities from contracts with customers: December 31, 2019 Receivables (1) $ 30,187 Contract liabilities (2) 10,897 ________________________ (1) Included in accounts receivable, net of allowance for doubtful accounts on the consolidated balance sheet. (2) Included in current portion of deferred revenue and deferred revenue, net of current portion on the consolidated balance sheet. Deferred revenue is recorded when cash payments are received in advance of future usage on contracts. Revenue is typically recognized in the following month when service is rendered or, in the case of nonrefundable upfront fees, over the estimated period of benefit. Customer refundable payments are recorded as advanced billings. During the year ended December 31, 2019, the Company recognized revenue of $5,324 related to contract liabilities recorded at the beginning of the year. The Company expects to recognize $5,177 in revenue over the next twelve months related to its contract liabilities as of December 31, 2019. Cost of Revenue CPaaS cost of revenue consists primarily of fees paid to other network service providers from whom the Company buys services such as minutes of use, phone numbers, messages, porting of customer numbers, and network circuits. Cost of revenue also contains costs related to the support of the network, web services and cloud infrastructure, capacity planning and management, rent for network facilities, software licenses, hardware and software maintenance fees, and network engineering services. Personnel costs (including non-cash stock-based compensation expenses) associated with personnel who are responsible for the delivery of services, operation and maintenance of the communications network, customer support, as well as, third party support agreements, and depreciation are also recorded as cost of revenue. Other cost of revenue consists of amortization of capital software development costs related to platform applications supporting non-CPaaS services including circuit costs paid to third party providers, internet connectivity expenses, minutes of use, contractors, regulatory fees and surcharges, depreciation, and software and hardware maintenance fees. |
Research and Development | Research and Development Research and development expenses consist primarily of personnel costs (including non-cash stock-based compensation expenses), outsourced software development and engineering services and cloud infrastructure fees for staging and development outsourced engineering services. |
Sales and Marketing | Sales and Marketing Sales and marketing expenses consist primarily of personnel costs, including commissions for sales employees and non-cash stock-based compensation expenses. Sales and marketing expenses also include expenditures related to advertising, marketing, brand awareness activities, sales support and professional services fees. General and Administrative General and administrative expenses consist primarily of personnel costs for support personnel and executives in accounting, finance, legal, information services, human resources and administrative functions. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company classifies all highly liquid investments with stated maturities of three months or less from the date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months from the date of purchase as current marketable securities. Cash deposits are primarily in financial institutions in the US. However, cash for monthly operating costs of international operations are deposited in banks outside the US. The Company has a policy of making investments only with commercial institutions that have at least an investment grade credit rating. The Company invests its cash primarily in government securities and obligations, corporate debt securities, money market funds and reverse repurchase agreements (“RRAs”). RRAs are collateralized by deposits in the form of Government Securities and Obligations for an amount not less than 102% of their value. The Company does not record an asset or liability as the Company is not permitted to sell or repledge the associated collateral. The Company has a policy that the collateral has at least an “A” (or equivalent) credit rating. The Company utilizes a third-party custodian to manage the exchange of funds and ensure that collateral received is maintained at 102% of the value of the RRAs on a daily basis. RRAs with stated maturities of greater than three months from the date of purchase are classified as marketable securities. As of December 31, 2018 and 2019, cash and cash equivalents were $41,261 and $184,414, respectively. Restricted cash consists primarily of customer deposits, employee withholding tax liability and employee benefits contributions not yet remitted. The Company has classified this asset as a short-term asset in order to match the expected period of restriction. As of December 31, 2018 and 2019, restricted cash was $240 and $590, respectively. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of its customer accounts. The Company regularly reviews the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness and current economic trends. If the financial condition of customers were to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be required and would increase bad debt expense. Management has evaluated the collectability of trade accounts receivable and determined that allowances of approximately $906 and $769 for uncollectible accounts and customer balances that are disputed were required as of December 31, 2018 and 2019, respectively. Refer to Note 4, “Financial Statement Components,” for a rollforward of the components of the allowance for doubtful accounts as of December 31, 2018 and 2019. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and trade accounts receivable. Cash deposits may be in excess of insured limits. The Company believes that the financial institutions that hold its cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances. |
Property and Equipment, net | Property and Equipment, net Property and equipment, net is stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Computer hardware and software 2 to 5 years Internal-use software development costs 3 years Furniture and fixtures 2 to 7 years Leasehold improvements Shorter of the estimated lease term or useful life Maintenance and repairs are charged to expense as incurred. |
Deferred Costs | Deferred Costs The Company defers certain direct and incremental upfront costs related to the generation of a revenue stream or obtaining a new customer agreement. These costs include installment fees, activation and other telecommunication fees. The Company capitalizes these costs and amortizes them over the longer of the term of the customer contract or the estimated period of benefit, which is approximately three years. |
Internal-Use Software Development Costs | Internal-Use Software Development Costs Internal-use software includes software that has been acquired, internally developed, or modified exclusively to meet the Company’s needs. The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed, and (ii) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when the expenditures will result in additional functionality, and expenses costs incurred for maintenance and minor upgrades and enhancements. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred. Capitalized costs of platform and other software applications are included in property and equipment. These costs are amortized over the estimated useful life of the software on a straight-line basis over three years. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. |
Debt Issuance Costs | Debt Issuance CostsThe Company incurred debt issuance costs associated with obtaining and entering into credit agreements. These costs customarily include non-refundable structuring fees, commitment fees, up-front fees and syndication expenses. The Company has a policy to defer and amortize these costs based on the effective interest method over the term of the credit agreements. |
Goodwill | Goodwill The Company reviews goodwill and indefinite-lived intangible assets at least annually, as of December 31, for possible impairment. Goodwill and indefinite-lived intangible assets are reviewed for possible impairment at an interim date if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit or indefinite-lived intangible asset below its carrying value. The Company tests goodwill at the reporting unit level and has determined that it has two-reporting units, CPaaS and Other. All Goodwill is allocated to the CPaaS reporting unit. Management may first evaluate qualitative factors to assess if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine if a two-step impairment test is necessary. Management may choose to proceed directly to the two-step evaluation, bypassing the initial qualitative assessment. The first step of the impairment test involves comparing the fair value of the reporting unit to its net book value, including goodwill. If the carrying value exceeds its fair value, then the Company would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. The impairment loss would be calculated by comparing the implied fair value of the goodwill to its carrying value. In calculating the implied fair value of goodwill, the fair value of the entity would be allocated to all of the other assets and liabilities based on their fair values. The excess of the fair value of the entity over the amount assigned to other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value. The Company makes assumptions regarding estimated future cash flows, discount rates, long-term growth rates and market values to determine each reporting unit’s and indefinite-lived intangible asset’s estimated fair value. If these estimates or related assumptions change in the future, the Company may be required to record an impairment charge. As of December 31, 2018 and 2019, the Company has recorded goodwill of $6,867. No goodwill impairment charges were recorded for the years ended December 31, 2017, 2018 and 2019. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates long-lived assets, including property and equipment and definite lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. |
Advertising Costs | Advertising CostsThe Company expenses advertising costs as incurred. |
Commissions | Commissions Commissions consist of variable compensation earned by sales personnel and third-party resellers. Sales commissions associated with the acquisition of a new customer contract are paid over time, based on monthly revenues, and are recognized as sales and marketing expense in the period incurred. |
Share-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation expense related to all stock-based awards based on the fair value of the award on the grant date. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period, which is generally four years. The fair value of the restricted stock units is determined using the fair value of the Company’s Class A common stock on the date of grant. The Company uses the Black-Scholes option pricing model, net of estimated forfeitures, to measure the fair value of its stock options. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates. The Company recognizes the effect of a change in tax rates on deferred tax assets and liabilities in the period that includes the enactment date. The Company reduces the measurement of a deferred tax asset, if necessary, by a valuation allowance if it is more likely than not that it will not realize some or all the deferred tax asset. Quarterly, the Company reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and the implementation of prudent and feasible tax planning strategies. The evaluation of the recoverability of deferred tax assets requires judgment in assessing future profitability. Should there be a change in the ability to recover deferred tax assets, the Company’s income tax provision would increase or decrease in the period in which the assessment is changed. The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon technical merits, it is more likely than not that the position will be sustained upon examination. The tax benefit recognized is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. The Company recognizes potential accrued interest and penalties associated with unrecognized tax positions in income tax expense. |
Operating Segments | Operating Segments Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to make operating decisions, allocate resources and in assessing performance. The Company has two operating segments, CPaaS and Other, which are deemed to be reportable segments. The Company’s CODM is its Chief Executive Officer. The CODM evaluates the performance of the Company’s operating segments primarily based on revenue and gross profit. The Company does not analyze discrete segment balance sheet information related to long-term assets. All other financial information is evaluated on a consolidated basis. |
Earnings Per Share | Earnings per Share Basic earnings per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share is calculated by giving effect to all potentially dilutive common stock when determining the weighted-average number of common shares outstanding. For purposes of the diluted net income (loss) per share calculation, options and warrants to purchase common stock and redeemable convertible preferred stock are considered to be potential common stock. Historically, the Company issued securities other than common stock that participated in dividends (“Participating Securities”), and therefore utilized the two-class method to calculate net income per share. These Participating Securities included the Series A redeemable convertible preferred stock. The two-class method requires a portion of net income to be allocated to the Participating Securities to determine the net income |
Foreign currency translation | Foreign currency translation The Company has foreign operations with non-USD functional currencies. The Euro and British Pound are the functional currencies for the Company’s international operations. Foreign exchange gains and losses, which result from the process of remeasuring foreign currency transactions into the appropriate functional currency, are included in other income, net in the Company’s consolidated statements of operations. The Company recorded $9 in related gains during the year ended December 31, 2019. The impact of changes in foreign currency exchange rates resulting from the translation of foreign currency financial statements into U.S. dollars for financial reporting purposes is included in other comprehensive (loss) income, which is a separate component of stockholders’ equity. Assets and liabilities are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at average rates for the period. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, marketable securities, accounts receivable, accounts payable and accrued expenses approximate fair value as of December 31, 2018 and December 31, 2019 because of the relatively short duration of these instruments. Marketable securities consist of U.S. treasury securities not otherwise classified as cash equivalents. All marketable securities are considered to be available-for-sale and are recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive (loss) income. The Company minimizes its credit risk associated with investments by investing primarily in investment grade, liquid securities. The Company policy is designed to preserve capital, maintain liquidity and minimize credit risk, and the policy limits exposure to any one issuer and also establishes minimum credit ratings of approved investments. Periodic evaluations of relative credit standing of those issuers are considered in the Company's investment strategy. |
Comprehensive Income | Comprehensive Income Comprehensive income refers to net income and other revenue, expenses, gains and losses that, under generally accepted accounting principles, are recorded as an element of stockholders’ equity but are excluded from the calculation of net income. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842) , which was further clarified in July 2018 by ASU 2018-10, Codification Improvements to Topic 842, Leases , ASU 2018-11, Leases-Targeted Improvements , and ASU 2019-01, Leases (Topic 842): Codification Improvements, . ASU 2018-10 provides narrow amendments to clarify how to apply certain aspects of the new lease standard. ASU 2018-11 addresses implementation issues related to the new lease standard. ASU 2019-01 clarifies how to apply certain aspects of the new lease standard. Under the new standard, lessees are required to recognize in the balance sheet the right-of-use (“ROU”) assets and lease liabilities that arise from operating leases. As a result of the Company no longer qualifying for emerging growth Company filing status based on its public float as of the most recent second fiscal quarter, the ASU was adopted as of December 31, 2019 with an effective date as of the beginning of the Company’s fiscal year, January 1, 2019. The standard was applied to the operating leases that existed on that date using the optional alternative method on a prospective basis. Prior year comparative financial information was not recast under the new standard and continues to be presented under ASC 840. The Company elected to utilize the package of practical expedients available for expired or existing contracts which allowed the Company to carryforward historical assessments of (a) whether contracts are or contain leases, (b) lease classification, and (c) initial direct costs. The Company also elected to apply the short-term lease exception for all leases. The Company did not elect the use of hindsight practical expedient in determining the lease term and assessing the likelihood that lease renewal, termination or purchase option will be exercised. Under the short-term lease exception, the Company will not recognize ROU assets or lease liabilities for leases that, at the acquisition date, have a remaining lease term of 12 months or less. As a result of losing emerging growth status on June 30, 2019, the Company implemented this guidance for the year ended December 31, 2019. The Company recognized a $20,772 operating ROU asset and a $23,808 operating lease liability in its consolidated balance sheet as of January 1, 2019, with no material impact to its consolidated statements of operations. The Company measured the lease liability at the present value of the future lease payments as of January 1, 2019. The Company used its incremental borrowing rate to discount the lease payments as of January 1, 2019. The Company derived the discount rate, adjusted for differences in the term and payment patterns, from the information available at the adoption date. The right-of-use asset is valued at the amount of the lease liability adjusted for the remaining December 31, 2018, balance of unamortized lease incentives, prepaid rent and deferred rent. The lease liability is subsequently measured at the present value of unpaid future lease payments as of the reporting date with a corresponding adjustment to the right-of-use asset. Absent a lease modification, the Company will continue to utilize the January 1, 2019, incremental borrowing rate. The Company recognizes operating lease costs on a straight-line basis and presents these costs as operating expenses within the consolidated statements of operations. Within the consolidated statements of cash flows the Company presents the lease payments made on the operating leases within cash flows from operating activities and principal payments made on the finance leases as part of financing activities. The financial results for the year ended December 31, 2019 are presented under the new standard, while the comparative periods presented are not adjusted and continue to be reported in accordance with the Company’s historical accounting policy. See Note 5, “Right-of-Use Asset and Lease Liabilities” for further information. Recent Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, I ncome Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. The Company is evaluating the effect of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company’s financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract . This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 will be effective for the Company in interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. ASU 2018-13 is effective for the Company for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. The Company is evaluating the effect of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company’s financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , which simplifies the accounting for goodwill impairment. The ASU requires impairment charges to be based on the first step in today’s two-step impairment test. ASU 2017-04 is effective for the Company in periods beginning after December 15, 2019. Management does not expect the adoption of this guidance to have a significant impact on the Company’s financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments–Credit Losses: Measurement of Credit Losses on Financial Instruments , which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses , which clarifies that receivables arising from operating leases are not within the scope of Topic 326, Financial Instruments – Credit Losses. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which clarifies how to apply certain aspects of the new credit losses standard. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates , which amends certain effective dates for the new standard. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses , which clarifies how to apply certain aspects of the new credit losses standard. The accounting standard is effective for the Company for annual and interim periods beginning after December 15, 2019. The Company is evaluating the effect of adopting this accounting guidance, but does not expect adoption will have a material impact to its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Contract Assets and Liabilities | Contract Assets and Liabilities The following table provides information about receivables and contract liabilities from contracts with customers: December 31, 2019 Receivables (1) $ 30,187 Contract liabilities (2) 10,897 ________________________ (1) Included in accounts receivable, net of allowance for doubtful accounts on the consolidated balance sheet. (2) Included in current portion of deferred revenue and deferred revenue, net of current portion on the consolidated balance sheet. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value on a Recurring Basis | The following table summarizes the assets measured at fair value as of December 31, 2018 and 2019: Amortized cost or carrying value Unrealized gains Unrealized losses Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents: Money market account $ 8,194 $ — $ — $ 8,194 $ — $ — $ 8,194 U.S. Reverse repurchase agreements 26,000 — — — 26,000 — 26,000 Total included in cash and cash equivalents 34,194 — — 8,194 26,000 — 34,194 Marketable securities: U.S. treasury securities 17,402 — (2) 17,400 — — 17,400 Total marketable securities 17,402 — (2) 17,400 — — 17,400 Total financial assets $ 51,596 $ — $ (2) $ 25,594 $ 26,000 $ — $ 51,594 Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents: Money market account $ 25,000 $ — $ — $ 25,000 Time deposits 75,250 — 75,250 Total financial assets $ 100,250 — — $ 100,250 |
Financial Statement Components
Financial Statement Components (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financial Statement Components [Abstract] | |
Schedule of Accounts Receivable, net, and Allowance for Doubtful Accounts | Accounts receivable, net of allowance for doubtful accounts consist of the following: As of December 31, 2018 2019 Trade accounts receivable $ 13,620 $ 14,692 Unbilled accounts receivable 11,174 16,200 Allowance for doubtful accounts (906) (769) Other accounts receivable 121 64 Total accounts receivable, net $ 24,009 $ 30,187 Components of allowance for doubtful accounts are as follows: Year ended December 31, 2018 2019 Allowance for doubtful accounts: Balance, beginning of period $ (32,463) $ (906) Charged to bad debt expense (460) (1,543) Deductions (1) 1,138 1,680 Billings deemed not probable of collection (2) (357) — Write-off of previously outstanding and fully reserved billings related to settlement 24,968 — Revenue recognized from outstanding billings previously deemed uncollectible related to settlement 6,268 — Balance, end of period $ (906) $ (769) ________________________ (1) Write off of uncollectible accounts after all collection efforts have been exhausted. (2) Represents amounts billed in the period but where collectability is not probable based on customer's collection experience. Amounts were charged to a contra-revenue account. |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: As of December 31, 2018 2019 Accrued expense $ 8,292 $ 12,701 Accrued compensation and benefits 7,323 8,284 Accrued sales, use, and telecom related taxes 4,742 5,439 Deferred rent, current portion 298 — Other accrued expenses 738 904 Total accrued expenses and other current liabilities $ 21,393 $ 27,328 |
Right-of-Use Asset and Lease _2
Right-of-Use Asset and Lease Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Receipts for Operating Lease | Future minimum sub-lease receipts required under the non-cancellable lease are as follows: As of December 31, 2019 2020 $ 447 2021 457 2022 249 $ 1,153 |
Components of Lease Expense | The components of lease expense recorded in the consolidated statement of operations were as follows: Year ended December 31, 2019 Operating lease cost $ 5,548 Sublease income (1) (643) Total net lease cost $ 4,905 ________________________ (1) See Note 15, “Related Parties” to these consolidated financial statements for additional details on sublease income. Supplemental cash flow and other information related to leases was as follows: Year ended December 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities: $ 3,357 Weighted average remaining operating lease term (in years): 4.35 Weighted average operating lease discount rate: 4.98 % |
Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases was as follows: Leases Classification As of December 31, 2019 Assets: Operating lease assets Operating right-of-use asset, net of accumulated amortization (1) $ 21,031 Total leased assets $ 21,031 Liabilities: Current Operating Operating lease liability, current $ 4,876 Non-current Operating Operating lease liability, non-current 19,868 Total lease liabilities $ 24,744 ________________________ (1) Operating lease assets are recorded net of accumulated amortization of $4,269 as of December 31, 2019. |
Schedule of Maturities of Lease Liabilities | Maturities of operating lease liabilities were as follows: As of December 31, 2019 2020 $ 5,907 2021 6,587 2022 6,302 2023 5,926 2024 1,987 Thereafter 949 Total lease payments 27,658 Less: imputed interest (2,894) Less: accrued lease incentive (20) Total lease obligations 24,744 Less: current obligations (4,876) Long-term lease obligations $ 19,868 |
Schedule of Future Minimum Lease Payments for Operating Leases | Future minimum lease payment obligations under non-cancelable operating and finance leases were as follows: As of December 31, 2018 2019 $ 5,044 2020 5,180 2021 5,254 2022 3,438 2023 1,399 Thereafter 2,343 $ 22,658 In conjunction with the sub-lease under the Facilities Service Agreement with Republic, the Company recorded a reduction of rent expense of $949 and $1,005 for the years ended December 31, 2017 and 2018, respectively, which is included in general and administrative expenses in the consolidated statements of operations. Future minimum sub-lease receipts required under the non-cancellable lease are as follows: As of December 31, 2018 2019 $ 1,042 2020 1,065 2021 1,089 2022 594 $ 3,790 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net consisted of the following: As of December 31, 2018 2019 Furniture and fixtures $ 1,741 $ 2,373 Computer and office equipment 7,662 4,627 Telecommunications equipment 28,889 44,324 Leasehold improvements 2,438 5,263 Software 1,805 2,018 Internal-use software development 16,293 17,952 Automobile 10 10 Total cost 58,838 76,567 Less—accumulated depreciation (33,702) (34,913) Total property and equipment, net $ 25,136 $ 41,654 |
Schedule of Depreciation Expense | The Company recognized depreciation expense, which includes amortization of capitalized software development costs, as follows: Year ended December 31, 2017 2018 2019 Cost of revenue $ 4,315 $ 4,490 $ 6,583 Research and development 81 161 268 Sales and marketing 27 51 112 General and administrative 450 568 2,055 Total depreciation expense $ 4,873 $ 5,270 $ 9,018 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets, net consisted of the following as of December 31, 2018: Gross Accumulated Net Carrying Amortization (Years) Customer relationships $ 10,396 $ (4,071) $ 6,325 20 Other, definite lived 3,933 (3,933) — 2 - 7 Licenses, indefinite lived 764 — 764 Indefinite Total intangible assets, net $ 15,093 $ (8,004) $ 7,089 Intangible assets, net consisted of the following as of December 31, 2019: Gross Accumulated Net Carrying Amortization (Years) Customer relationships $ 10,396 $ (4,591) $ 5,805 20 Other, definite lived 3,933 (3,933) — 2 - 7 Licenses, indefinite lived 764 — 764 Indefinite Total intangible assets, net $ 15,093 $ (8,524) $ 6,569 |
Schedule of Future Estimated Amortization Expense | Future estimated amortization expense for definite lived intangible assets is as follows: As of December 31, 2019 2020 $ 520 2021 520 2022 520 2023 520 2024 520 Thereafter 3,205 $ 5,805 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Year ended December 31, 2017 2018 2019 CPaaS Revenue $ 131,572 $ 164,415 $ 197,944 Cost of revenue 75,859 94,296 110,343 Gross profit $ 55,713 $ 70,119 $ 87,601 Other Revenue $ 31,383 $ 39,698 $ 34,650 Cost of revenue 13,403 13,849 14,616 Gross profit $ 17,980 $ 25,849 $ 20,034 Consolidated Revenue $ 162,955 $ 204,113 $ 232,594 Cost of revenue 89,262 108,145 124,959 Gross profit $ 73,693 $ 95,968 $ 107,635 |
Schedule of Revenue by Geographical Area | The Company generates its revenue primarily in the United States. Revenue by geographic area is detailed in the table below (which is determined based on the customer billing address): Year ended December 31, 2017 2018 2019 CPaaS United States $ 131,263 $ 164,135 $ 192,506 International 309 280 5,438 Total $ 131,572 $ 164,415 $ 197,944 Other United States $ 31,130 $ 39,432 $ 33,664 International 253 266 986 Total $ 31,383 $ 39,698 $ 34,650 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Reserved Shares of Common Stock for Issuance | The Company had reserved shares of Class A common stock for issuance under stock-based award agreements as follows: As of December 31, 2018 2019 Stock options issued and outstanding 1,937,370 853,399 Nonvested restricted stock units issued and outstanding 324,252 392,351 Stock-based awards available for grant under the 2017 Plan 896,760 1,310,354 3,158,382 2,556,104 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | The following summarizes the stock option activity for the periods presented: Number of Weighted- Weighted- Aggregate Outstanding as of December 31, 2018 1,937,370 $ 7.41 4.00 $ 64,596 Granted — — Exercised (1,075,482) 6.84 57,159 Forfeited or cancelled (8,489) 12.36 Outstanding as of December 31, 2019 853,399 $ 8.07 3.41 $ 47,770 Options vested and exercisable at December 31, 2019 752,402 $ 7.27 2.88 $ 42,722 Options vested and expected to vest as of December 31, 2019 851,389 $ 8.06 3.40 $ 47,672 |
Summary of Restricted Stock Unit Activity | The following summarizes the restricted stock unit activity for the periods presented: Number of awards outstanding Weighted-average grant date fair value (per share) Nonvested RSUs as of December 31, 2018 324,252 $ 26.95 Granted 241,376 44.76 Vested (163,944) 32.79 Forfeited or cancelled (9,333) 37.60 Nonvested RSUs as of December 31, 2019 392,351 $ 35.22 |
Schedule of Stock-Based Compensation Expense | The Company recognized total stock-based compensation expense as follows: Year ended December 31, 2017 2018 2019 Cost of revenue $ 80 $ 114 $ 211 Research and development 155 555 1,461 Sales and marketing 172 511 1,199 General and administrative (1) (2) 1,396 2,159 3,755 Total $ 1,803 $ 3,339 $ 6,626 ________________________ (1) On September 1, 2017, the Company reached a separation agreement with an executive. The agreement resulted in a modification of the former employee ’ s 194,234 outstanding options to purchase common stock, which accelerated the vesting period and extended the exercise period, resulting in the recognition of $394 of additional stock compensation expense for the year ended December 31, 2017. (2) On December 21, 2018, the Company reached a separation agreement with an executive. The agreement resulted in a modification of the former employee ’ s 17,725 non-vested restricted stock units, which accelerated the vesting period, resulting in the recognition of $535 of additional stock compensation expense for the year ended December 31, 2018. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Domestic and Foreign Components of Income (Loss) | The following table presents domestic and foreign components of income (loss) before income taxes for the tax years ended December 31, 2017, 2018 and 2019: Year ended December 31, 2017 2018 2019 United States $ 12,889 $ 7,053 $ (15,229) International — — 5 Income (loss) before income taxes $ 12,889 $ 7,053 $ (15,224) |
Components of (Provision) Benefit for Income Taxes from Continuing Operations | (Provision) benefit for income taxes from operations consists of the following: Year ended December 31, 2017 2018 2019 Current: Federal $ (448) $ 162 $ 81 State (302) (125) 132 Foreign — — 3 Total (750) 37 216 Deferred: Federal (5,983) 8,945 15,205 State (185) 1,888 2,297 Total (6,168) 10,833 17,502 Income tax (provision) benefit $ (6,918) $ 10,870 $ 17,718 |
Schedule of Effective Income Tax Rate Reconciliation | The following table presents a reconciliation of the statutory federal tax rate and the Company’s effective tax rate for the years ended December 31, 2017, 2018 and 2019: Year ended December 31, 2017 2018 2019 Federal Tax Rate 34.0 % 21.0 % 21.0 % State Tax Rate 4.7 6.3 3.1 Non-deductible expenses 1.2 1.7 (1.6) Research credit (1.5) (13.6) 7.2 Stock-based compensation 0.1 (168.0) 88.6 Deferred tax rate change 16.1 (0.7) (0.3) Other (0.9) (0.8) (1.6) Total 53.7 % (154.1) % 116.4 % |
Significant Components of Deferred Tax Assets and Liabilities | The following table presents the significant components of the Company’s net deferred tax assets: As of December 31, 2018 2019 Deferred tax assets: Allowance for doubtful accounts $ 57 $ 97 Accrued liabilities 2,755 2,083 Operating lease liabilities — 6,335 Deferred revenue 734 1,682 Intangibles 85 — Stock-based compensation - deferred tax asset 3,486 2,109 Tax credits 2,690 3,710 Net operating losses 11,359 30,835 Other deferred tax assets 61 90 Net deferred tax assets 21,227 46,941 Deferred tax liabilities: Property and equipment 2,993 5,793 Goodwill 729 855 Intangibles — 41 Operating lease assets — 5,295 Other liability 146 96 Total deferred tax liabilities 3,868 12,080 Net deferred tax asset $ 17,359 $ 34,861 |
Summary of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year ended December 31, 2018 2019 Unrecognized tax benefits—January 1, $ 731 $ 1,046 Gross increases—tax positions in prior period 56 — Gross decreases—tax positions in prior period — (15) Gross increases—tax positions in current period 287 367 Lapse of statute of limitations (28) — Unrecognized tax benefits—December 31, $ 1,046 $ 1,398 |
Basic and Diluted Income per _2
Basic and Diluted Income per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The components of basic and diluted income per share are as follows: Year ended December 31, 2017 2018 2019 Earnings per share Net income $ 5,971 $ 17,923 $ 2,494 Less: net income allocated to participating securities 644 — — Net income attributable to common stockholders $ 5,327 $ 17,923 $ 2,494 Net income per share: Basic $ 0.42 $ 0.96 $ 0.11 Diluted $ 0.37 $ 0.85 $ 0.10 Weighted Average Number of Common Shares Outstanding Basic 12,590,221 18,573,067 22,640,461 Dilutive effect of stock options, restricted stock units, and warrants 1,952,949 2,567,315 1,283,316 Diluted 14,543,170 21,140,382 23,923,777 |
Schedule of Anti-dilutive Shares Excluded from Weighted-average Shares Outstanding | The following common share equivalents have been excluded from the calculation of weighted-average common shares outstanding, because the effect is anti-dilutive for the periods presented: Year ended December 31, 2017 2018 2019 Anti-dilutive disclosure Series A redeemable convertible preferred stock outstanding 1,522,123 — — Stock options issued and outstanding 50,604 — — |
Organization and Description _2
Organization and Description of Business (Details) $ / shares in Units, $ in Thousands | Mar. 11, 2019USD ($)$ / sharesshares | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of operating segments | segment | 2 | |||
Number of reportable segments | segment | 2 | |||
Proceeds from follow-on public offering | $ 146,557 | |||
IPO | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Underwriting discounts and commissions | $ 0 | $ 285 | $ 5,385 | |
Follow-on Public Offering | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Underwriting discounts and commissions | $ 757 | $ 0 | $ 0 | |
Follow-on Public Offering | Common Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued (in shares) | shares | 2,875,000 | |||
Shares issued, price (in usd per share) | $ / shares | $ 54.25 | |||
Over-Allotment Option | Common Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued (in shares) | shares | 375,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Concentration Risk [Line Items] | ||||
Adjustment to opening retained earnings due to adoption of ASC 606 | $ 174 | |||
Revenue | $ 232,594 | $ 204,113 | $ 162,955 | |
Revenue recognized related to its contract liabilities | 5,324 | |||
CPaaS, Usage-Based Fees | ||||
Concentration Risk [Line Items] | ||||
Revenue | 131,626 | 105,481 | 76,148 | |
Other, Usage-Based Fees | ||||
Concentration Risk [Line Items] | ||||
Revenue | 29,012 | 32,524 | 22,473 | |
CPaaS, Service Fees | ||||
Concentration Risk [Line Items] | ||||
Revenue | 61,193 | 55,719 | 52,580 | |
Other, Service Fees | ||||
Concentration Risk [Line Items] | ||||
Revenue | 5,638 | 7,174 | 8,910 | |
Other miscellaneous services | ||||
Concentration Risk [Line Items] | ||||
Revenue | $ 5,125 | $ 3,215 | $ 2,844 | |
Retained earnings | ||||
Concentration Risk [Line Items] | ||||
Adjustment to opening retained earnings due to adoption of ASC 606 | 174 | |||
Retained earnings | ASC 606 | ||||
Concentration Risk [Line Items] | ||||
Adjustment to opening retained earnings due to adoption of ASC 606 | $ 174 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Contract Assets and Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Accounting Policies [Abstract] | |
Receivables | $ 30,187 |
Contract liabilities | $ 10,897 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Remaining Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 $ in Thousands | Dec. 31, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 5,177 |
Revenue, remaining performance obligation, amount, expected timing of satisfaction, period | 12 months |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
RRAs collateralized by deposits in form of Government Securities and Obligations as percentage of value | 102.00% | |
Cash and cash equivalents | $ 184,414 | $ 41,261 |
Restricted cash | $ 590 | $ 240 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 769 | $ 906 |
Unbilled accounts receivable | $ 16,200 | $ 11,174 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Customer One | Accounts Receivable | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 18.00% |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Property and Equipment, net and Deferred Costs (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Computer hardware and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 2 years |
Computer hardware and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Internal-use software development costs | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 2 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 7 years |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Goodwill, Advertising Costs, Stock-Based Compensation, Operating Segments, Foreign Currency Translation (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Accounting Policies [Abstract] | |||
Goodwill | $ 6,867 | $ 6,867 | |
Goodwill impairment charges | 0 | 0 | $ 0 |
Advertising costs | $ 1,528 | $ 953 | $ 464 |
Number of reportable segments | segment | 2 | ||
Number of operating segments | segment | 2 | ||
Foreign currency transaction gain | $ 9 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Recently Adopted Accounting Standards (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating right-of-use asset | $ 21,031 | |
Operating lease liability | $ 24,744 | |
ASU 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating right-of-use asset | $ 20,772 | |
Operating lease liability | $ 23,808 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Money market account | $ 185,004 | $ 41,501 | $ 37,870 | $ 7,028 |
Cash and cash equivalents, amortized cost or carrying value | 184,414 | 41,261 | ||
Marketable securities, amortized cost or carrying value | 17,402 | |||
Marketable securities, unrealized gains | 0 | |||
Marketable securities, unrealized losses | (2) | |||
Money market account | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Money market account | 8,194 | |||
Money market account, unrealized gains | 0 | |||
Money market account, unrealized losses | 0 | |||
U.S. Reverse repurchase agreements | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, amortized cost or carrying value | 26,000 | |||
Cash and cash equivalents, unrealized gains | 0 | |||
Cash and cash equivalents, unrealized losses | 0 | |||
Total included in cash and cash equivalents | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, amortized cost or carrying value | 34,194 | |||
Cash and cash equivalents, unrealized gains | 0 | |||
Cash and cash equivalents, unrealized losses | 0 | |||
U.S. treasury securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Marketable securities, amortized cost or carrying value | 17,402 | |||
Marketable securities, unrealized gains | 0 | |||
Marketable securities, unrealized losses | (2) | |||
Financial assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets, fair value | 51,596 | |||
Financial assets, unrealized gains | 0 | |||
Financial assets, unrealized losses | (2) | |||
Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Marketable securities, fair value | 17,400 | |||
Fair Value, Measurements, Recurring | Money market account | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Money market account, fair value | 8,194 | |||
Cash and cash equivalents, fair value | 25,000 | |||
Fair Value, Measurements, Recurring | Time deposits | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, fair value | 75,250 | |||
Fair Value, Measurements, Recurring | U.S. Reverse repurchase agreements | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, fair value | 26,000 | |||
Fair Value, Measurements, Recurring | Total included in cash and cash equivalents | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, fair value | 34,194 | |||
Fair Value, Measurements, Recurring | U.S. treasury securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Marketable securities, fair value | 17,400 | |||
Fair Value, Measurements, Recurring | Financial assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets, fair value | 100,250 | 51,594 | ||
Level 1 | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Marketable securities, fair value | 17,400 | |||
Level 1 | Fair Value, Measurements, Recurring | Money market account | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Money market account, fair value | 8,194 | |||
Cash and cash equivalents, fair value | 25,000 | |||
Level 1 | Fair Value, Measurements, Recurring | Time deposits | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, fair value | 75,250 | |||
Level 1 | Fair Value, Measurements, Recurring | U.S. Reverse repurchase agreements | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, fair value | 0 | |||
Level 1 | Fair Value, Measurements, Recurring | Total included in cash and cash equivalents | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, fair value | 8,194 | |||
Level 1 | Fair Value, Measurements, Recurring | U.S. treasury securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Marketable securities, fair value | 17,400 | |||
Level 1 | Fair Value, Measurements, Recurring | Financial assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets, fair value | 100,250 | 25,594 | ||
Level 2 | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Marketable securities, fair value | 0 | |||
Level 2 | Fair Value, Measurements, Recurring | Money market account | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Money market account, fair value | 0 | |||
Cash and cash equivalents, fair value | 0 | |||
Level 2 | Fair Value, Measurements, Recurring | Time deposits | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, fair value | ||||
Level 2 | Fair Value, Measurements, Recurring | U.S. Reverse repurchase agreements | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, fair value | 26,000 | |||
Level 2 | Fair Value, Measurements, Recurring | Total included in cash and cash equivalents | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, fair value | 26,000 | |||
Level 2 | Fair Value, Measurements, Recurring | U.S. treasury securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Marketable securities, fair value | 0 | |||
Level 2 | Fair Value, Measurements, Recurring | Financial assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets, fair value | 0 | 26,000 | ||
Level 3 | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Marketable securities, fair value | 0 | |||
Level 3 | Fair Value, Measurements, Recurring | Money market account | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Money market account, fair value | 0 | |||
Cash and cash equivalents, fair value | 0 | |||
Level 3 | Fair Value, Measurements, Recurring | Time deposits | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, fair value | 0 | |||
Level 3 | Fair Value, Measurements, Recurring | U.S. Reverse repurchase agreements | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, fair value | 0 | |||
Level 3 | Fair Value, Measurements, Recurring | Total included in cash and cash equivalents | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, fair value | 0 | |||
Level 3 | Fair Value, Measurements, Recurring | U.S. treasury securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Marketable securities, fair value | 0 | |||
Level 3 | Fair Value, Measurements, Recurring | Financial assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total financial assets, fair value | $ 0 | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |||
Maturities of marketable securities | $ 69,000,000 | $ 18,000,000 | $ 0 |
Gross realized gains from sales of marketable securities | 17,467,000 | ||
Gain on sale of marketable securities | 4,000 | 0 | 0 |
Interest earned on marketable securities | $ 6,000 | $ 77,000 | $ 0 |
Financial Statement Component_2
Financial Statement Components - Accounts Receivable, Net of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financial Statement Components [Abstract] | ||
Trade accounts receivable | $ 14,692 | $ 13,620 |
Unbilled accounts receivable | 16,200 | 11,174 |
Allowance for doubtful accounts | (769) | (906) |
Other accounts receivable | 64 | 121 |
Total accounts receivable, net | $ 30,187 | $ 24,009 |
Financial Statement Component_3
Financial Statement Components - Allowance For Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance, beginning of period | $ (906) | $ (32,463) |
Balance, end of period | (769) | (906) |
Accounts Receivable, Excluding Carrier Access Billing (CAB) | ||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Charged to bad debt expense | (1,543) | (460) |
Deductions | 1,680 | 1,138 |
Billings deemed not probable of collection | 0 | (357) |
Carrier Access Billing (CAB) | ||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Write-off of previously outstanding and fully reserved billings related to settlement | 0 | 24,968 |
Revenue recognized from outstanding billings previously deemed uncollectible related to settlement | $ 0 | $ 6,268 |
Financial Statement Component_4
Financial Statement Components - Additional Information (Details) - USD ($) $ in Thousands | Feb. 08, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Carrier Access Billing (CAB) | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Write-off of previously outstanding and fully reserved billings related to settlement | $ 0 | $ 24,968 | |
Revenue recognized from outstanding billings previously deemed uncollectible related to settlement | $ 0 | $ 6,268 | |
Carrier Access Billing (CAB) | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Settlement agreement lump sum payment | $ 4,400 |
Financial Statement Component_5
Financial Statement Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financial Statement Components [Abstract] | ||
Accrued expense | $ 12,701 | $ 8,292 |
Accrued compensation and benefits | 8,284 | 7,323 |
Accrued sales, use, and telecom related taxes | 5,439 | 4,742 |
Deferred rent, current portion | 298 | |
Other accrued expenses | 904 | 738 |
Total accrued expenses and other current liabilities | $ 27,328 | $ 21,393 |
Right-of-Use Asset and Lease _3
Right-of-Use Asset and Lease Liabilities - Additional Information (Details) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2019property | Dec. 31, 2018USD ($)ft² | Dec. 31, 2017USD ($) | May 29, 2019ft² | Apr. 04, 2019ft² | Apr. 03, 2019ft² | Jan. 01, 2019ft² | |
Lessee, Lease, Description [Line Items] | |||||||
Office space (in square foot) | 87,605 | 17,073 | 9,408 | 4,122 | 216,000 | ||
Increase of office space (in square foot) | 5,286 | ||||||
Lessee, operating lease, renewal term | 5 years | 5 years | |||||
Lessee, operating lease, additional renewal term | 18 months | ||||||
Number of leased properties | property | 6 | ||||||
Remaining lease term | 4 years 4 months 6 days | ||||||
Option to extend, term | 5 years | ||||||
Rent expense | $ | $ 4,331 | $ 3,327 | |||||
General and administrative | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Reduction of rent expense | $ | $ 1,005 | $ 949 | |||||
Minimum | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Remaining lease term | 2 years 6 months 29 days | ||||||
Maximum | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Remaining lease term | 5 years 8 months 1 day | ||||||
Republic | Affiliated Entity | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Office space (in square foot) | 40,657 | ||||||
Raleigh, NC | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Office space (in square foot) | 120,041 | ||||||
Increase of office space (in square foot) | 2,322 | 30,114 | |||||
Lessee, operating lease, renewal term | 5 years |
Right-of-Use Asset and Lease _4
Right-of-Use Asset and Lease Liabilities - Future Minimum Sub-lease Receipts (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 447 |
2021 | 457 |
2022 | 249 |
Total | $ 1,153 |
Right-of-Use Asset and Lease _5
Right-of-Use Asset and Lease Liabilities - Components of Lease Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 5,548 |
Sublease income | (643) |
Total net lease cost | $ 4,905 |
Right-of-Use Asset and Lease _6
Right-of-Use Asset and Lease Liabilities - Assets And Liabilities, Lessee (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Operating right-of-use asset, net of accumulated amortization | $ 21,031 |
Operating lease liability, current | 4,876 |
Long-term lease obligations | 19,868 |
Total lease liabilities | 24,744 |
Accumulated amortization | $ 4,269 |
Right-of-Use Asset and Lease _7
Right-of-Use Asset and Lease Liabilities - Supplemental Cash Flow and Other Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of operating lease liabilities: | $ 3,357 |
Weighted average remaining operating lease term (in years): | 4 years 4 months 6 days |
Weighted average operating lease discount rate: | 4.98% |
Right-of-Use Asset and Lease _8
Right-of-Use Asset and Lease Liabilities - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 5,907 |
2021 | 6,587 |
2022 | 6,302 |
2023 | 5,926 |
2024 | 1,987 |
Thereafter | 949 |
Total lease payments | 27,658 |
Less: imputed interest | (2,894) |
Less: accrued lease incentive | (20) |
Total lease liabilities | 24,744 |
Less: current obligations | (4,876) |
Long-term lease obligations | $ 19,868 |
Right-of-Use Asset and Lease _9
Right-of-Use Asset and Lease Liabilities - Schedule of Future Minimum Lease Payments for Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
2019 | $ 5,044 | |
2020 | $ 5,180 | |
2021 | 5,254 | |
2022 | 3,438 | |
2023 | 1,399 | |
Thereafter | 2,343 | |
Future minimum payments due, total | $ 22,658 |
Right-of-Use Asset and Lease_10
Right-of-Use Asset and Lease Liabilities - Future Minimum Lease Receipts (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 1,042 |
2020 | 1,065 |
2021 | 1,089 |
2022 | 594 |
Future minimum lease receipts, total | $ 3,790 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 76,567 | $ 58,838 |
Less—accumulated depreciation | (34,913) | (33,702) |
Total property and equipment, net | 41,654 | 25,136 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 2,373 | 1,741 |
Computer and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 4,627 | 7,662 |
Telecommunications equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 44,324 | 28,889 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 5,263 | 2,438 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 2,018 | 1,805 |
Internal-use software development | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 17,952 | 16,293 |
Automobile | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 10 | $ 10 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Property and equipment, useful life | 3 years | ||
Unamortized software development costs | $ 5,746 | $ 4,355 | |
Amortization of capitalized software development costs | 2,024 | 1,482 | $ 2,133 |
Capitalized software impairments | 275 | 158 | 81 |
Capitalized software development costs, additions | $ 3,612 | $ 2,028 | $ 2,942 |
Property and Equipment - Deprec
Property and Equipment - Depreciation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Depreciation Expense [Line Items] | |||
Total depreciation expense | $ 9,018 | $ 5,270 | $ 4,873 |
Cost of revenue | |||
Depreciation Expense [Line Items] | |||
Total depreciation expense | 6,583 | 4,490 | 4,315 |
Research and development | |||
Depreciation Expense [Line Items] | |||
Total depreciation expense | 268 | 161 | 81 |
Sales and marketing | |||
Depreciation Expense [Line Items] | |||
Total depreciation expense | 112 | 51 | 27 |
General and administrative | |||
Depreciation Expense [Line Items] | |||
Total depreciation expense | $ 2,055 | $ 568 | $ 450 |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (8,524) | $ (8,004) |
Finite-lived intangible assets, net | 5,805 | |
Gross amount | 15,093 | 15,093 |
Net carrying value | 6,569 | 7,089 |
Licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Licenses, indefinite lived | 764 | 764 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 10,396 | 10,396 |
Accumulated amortization | (4,591) | (4,071) |
Finite-lived intangible assets, net | $ 5,805 | $ 6,325 |
Amortization period | 20 years | 20 years |
Other, definite lived | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 3,933 | |
Accumulated amortization | (3,933) | |
Finite-lived intangible assets, net | $ 0 | |
Other, definite lived | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 2 years | 2 years |
Other, definite lived | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | 7 years | 7 years |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 520,000 | $ 554,000 | $ 839,000 |
Weighted average amortization period | 11 years | ||
Impairment of indefinite-lived intangible assets | $ 0 | $ 0 |
Intangible Assets - Future Esti
Intangible Assets - Future Estimated Amortization Expense (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 520 |
2021 | 520 |
2022 | 520 |
2023 | 520 |
2024 | 520 |
Thereafter | 3,205 |
Finite-lived intangible assets, net | $ 5,805 |
Debt (Details)
Debt (Details) - USD ($) | Mar. 01, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Jun. 04, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||||
Debt instrument, term | 3 years | ||||
Unamortized debt issuance costs | $ 136,000 | ||||
Debt issuance costs | $ 142,000 | ||||
Previous unamortized loan fees expensed | $ 106,000 | ||||
Periodic loan fees | $ 25,000 | ||||
Outstanding unamortized loan fees | 125,000 | ||||
Prepaid Expenses and Other Current Assets | |||||
Debt Instrument [Line Items] | |||||
Outstanding unamortized loan fees | 70,000 | ||||
Noncurrent assets | |||||
Debt Instrument [Line Items] | |||||
Outstanding unamortized loan fees | 55,000 | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | ||||
Available borrowing capacity | 25,000,000 | ||||
Debt outstanding | $ 0 | $ 0 | |||
Revolving Credit Facility | Pacific Western Bank | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 10,000,000 | ||||
Revolving Credit Facility | KeyBank National Association | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | $ 15,000,000 | ||||
Revolving Credit Facility | Federal Funds Effective Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
Swing line | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 1,000,000 | ||||
Letters of credit | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 2,500,000 |
Segment and Geographic Inform_3
Segment and Geographic Information - Reconciliation of Segment Profit (Loss) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 2 | ||
Segment Reporting Information [Line Items] | |||
Revenue | $ 232,594 | $ 204,113 | $ 162,955 |
Cost of revenue | 124,959 | 108,145 | 89,262 |
Gross profit | 107,635 | 95,968 | 73,693 |
CPaaS | |||
Segment Reporting Information [Line Items] | |||
Revenue | 197,944 | 164,415 | 131,572 |
Cost of revenue | 110,343 | 94,296 | 75,859 |
Gross profit | 87,601 | 70,119 | 55,713 |
Other | |||
Segment Reporting Information [Line Items] | |||
Revenue | 34,650 | 39,698 | 31,383 |
Cost of revenue | 14,616 | 13,849 | 13,403 |
Gross profit | $ 20,034 | $ 25,849 | $ 17,980 |
Segment and Geographic Inform_4
Segment and Geographic Information - Reconciliation of Revenue by Geographic Area (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | $ 232,594,000 | $ 204,113,000 | $ 162,955,000 |
Assets | 341,416,000 | 150,420,000 | |
International | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Assets | 2,924,000 | 0 | |
CPaaS | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 197,944,000 | 164,415,000 | 131,572,000 |
CPaaS | United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 192,506,000 | 164,135,000 | 131,263,000 |
CPaaS | International | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 5,438,000 | 280,000 | 309,000 |
Other | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 34,650,000 | 39,698,000 | 31,383,000 |
Other | United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 33,664,000 | 39,432,000 | 31,130,000 |
Other | International | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | $ 986,000 | $ 266,000 | $ 253,000 |
Stockholders' Equity - Redeemab
Stockholders' Equity - Redeemable Convertible Preferred Stock (Details) | Nov. 09, 2017shares | Oct. 23, 2017 | Dec. 31, 2019shares | Dec. 31, 2018shares | Dec. 31, 2017shares | Dec. 31, 2016shares |
Class of Stock [Line Items] | ||||||
Stock split conversion ratio | 2.5 | |||||
Series A redeemable convertible preferred stock, shares issued (in shares) | 710,000 | |||||
Series A redeemable convertible preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | 710,000 | ||
Old Common Class A | ||||||
Class of Stock [Line Items] | ||||||
Stock split conversion ratio | 2.5 | |||||
Common Class B | ||||||
Class of Stock [Line Items] | ||||||
Shares converted (in shares) | 1,775,000 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 09, 2017 |
Equity [Abstract] | |||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Preferred A stock, shares outstanding (in shares) | 0 | 0 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) | Nov. 09, 2017$ / sharesshares | Oct. 23, 2017 | Dec. 31, 2019vote$ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017$ / shares | Dec. 31, 2016vote$ / sharesshares |
Class of Stock [Line Items] | ||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | |||||
Stock split conversion ratio | 2.5 | |||||
Common stock, shares authorized (in shares) | 120,000,000 | |||||
Common stock, dividends declared (in usd per share) | $ / shares | $ 0 | $ 0 | $ 0 | |||
Old Common Class A | ||||||
Class of Stock [Line Items] | ||||||
Common stock voting rights, votes per share | vote | 1 | |||||
Common stock, shares issued (in shares) | 11,779,975 | |||||
Common stock, shares outstanding (in shares) | 11,779,975 | |||||
Stock split conversion ratio | 2.5 | |||||
Old Common Class B | ||||||
Class of Stock [Line Items] | ||||||
Common stock voting rights, votes per share | vote | 0 | |||||
Common stock, shares issued (in shares) | 18,590 | |||||
Common stock, shares outstanding (in shares) | 18,590 | |||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | |||||
Common Class B | ||||||
Class of Stock [Line Items] | ||||||
Common stock voting rights, votes per share | vote | 10 | |||||
Common stock, shares issued (in shares) | 4,927,401 | 6,510,732 | ||||
Common stock, shares outstanding (in shares) | 4,927,401 | 6,510,732 | ||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | ||||
Shares converted (in shares) | 1,775,000 | |||||
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 | ||||
Common Class A | ||||||
Class of Stock [Line Items] | ||||||
Common stock voting rights, votes per share | vote | 1 | |||||
Common stock, shares issued (in shares) | 18,584,478 | 12,912,747 | ||||
Common stock, shares outstanding (in shares) | 18,584,478 | 12,912,747 | ||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | ||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Stockholders' Equity - Reserved
Stockholders' Equity - Reserved Shares of Common Stock for Issuance (Details) - shares | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 2,556,104 | 3,158,382 |
Stock options issued and outstanding | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 853,399 | 1,937,370 |
Nonvested restricted stock units issued and outstanding | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 392,351 | 324,252 |
Stock-based awards available for grant under the 2017 Plan | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 1,310,354 | 896,760 |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2019 | Jan. 01, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 09, 2017 | Aug. 24, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance (in shares) | 2,556,104 | 3,158,382 | |||||
Weighted average grant-date fair value of stock options granted (in usd per share) | $ 11.10 | $ 7.72 | |||||
Estimated grant date fair value of options vested | $ 729 | $ 979 | $ 1,299 | ||||
Unrecognized cost for stock based compensation | 519 | ||||||
Unrecognized compensation cost related to non-vested RSUs | $ 11,252 | ||||||
Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized cost for stock based compensation, period for recognition (in years) | 1 year 5 months 1 day | ||||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance (in shares) | 392,351 | 324,252 | |||||
Vesting percentage | 25.00% | ||||||
Share-based compensation arrangement, requisite service period | 4 years | ||||||
Unrecognized cost for stock based compensation, period for recognition (in years) | 2 years 9 months 3 days | ||||||
Restricted Stock Units (RSUs) | Non-employee Board of Directors | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period (in years) | 4 years | ||||||
Restricted Stock Units (RSUs) | Non-employee Board of Directors | Year one vesting | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 50.00% | ||||||
Restricted Stock Units (RSUs) | Non-employee Board of Directors | First quarter vesting | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 12.50% | ||||||
Restricted Stock Units (RSUs) | Non-employee Board of Directors | Second quarter vesting | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 12.50% | ||||||
Restricted Stock Units (RSUs) | Non-employee Board of Directors | Third quarter vesting | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 12.50% | ||||||
Restricted Stock Units (RSUs) | Non-employee Board of Directors | Forth quarter vesting | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 12.50% | ||||||
Restricted Stock Units (RSUs) | Non-employee Board of Directors | Year two, three and four vesting | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 50.00% | ||||||
2010 Equity Compensation Plan | Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance (in shares) | 3,466,275 | ||||||
2017 Equity Compensation Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance (in shares) | 1,050,000 | ||||||
Common stock reserved for future issuance, percent increase | 5.00% | ||||||
Increase in shares available for grant (in shares) | 645,637 | ||||||
2017 Equity Compensation Plan | Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period (in years) | 4 years | ||||||
Contractual life (in years) | 10 years |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock Option Activity (Details) - Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of options outstanding | ||
Number of options outstanding, beginning balance (in shares) | 1,937,370 | |
Number of options, granted (in shares) | 0 | |
Number of options exercised (in shares) | (1,075,482) | |
Number of options, forfeited or cancelled (in shares) | (8,489) | |
Number of options outstanding, ending balance (in shares) | 853,399 | 1,937,370 |
Options vested and exercisable (in shares) | 752,402 | |
Options vested and expected to vest (in shares) | 851,389 | |
Weighted- average exercise price (per share) | ||
Weighted-average exercise price, beginning balance (in usd per share) | $ 7.41 | |
Weighted-average exercise price, granted (in usd per share) | 0 | |
Weighted-average exercise price, exercised (in usd per share) | 6.84 | |
Weighted-average exercise price, forfeited or cancelled (in usd per share) | 12.36 | |
Weighted-average exercise price, ending balance (in usd per share) | 8.07 | $ 7.41 |
Weighted-average exercise price, options vested and exercisable (in usd per share) | 7.27 | |
Weighted average exercise price, options vested and expected to vest (in usd per share) | $ 8.06 | |
Weighted-average remaining contract life, options outstanding (in years) | 3 years 4 months 28 days | 4 years |
Weighted-average remaining contract life, options vested and exercisable (in years) | 2 years 10 months 17 days | |
Weighted average remaining contract life, options vested and expected to vest | 3 years 4 months 24 days | |
Aggregate intrinsic value, options outstanding | $ 47,770 | $ 64,596 |
Aggregate intrinsic value, options exercised | 57,159 | |
Aggregate intrinsic value, options vested and exercisable | 42,722 | |
Aggregate intrinsic value, options vested and expected to vest | $ 47,672 |
Stock Based Compensation - Rest
Stock Based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of awards outstanding | |
Number of nonvested RSUs outstanding, beginning balance (in shares) | shares | 324,252 |
Number of nonvested RSUs, granted (in shares) | shares | 241,376 |
Number of nonvested RSUs, vested (in shares) | shares | (163,944) |
Number of nonvested RSUs, forfeited or cancelled (in shares) | shares | (9,333) |
Number of nonvested RSUs outstanding, ending balance (in shares) | shares | 392,351 |
Weighted-average grant date fair value (per share) | |
Weighted-average grant date fair value, beginning balance (in usd per share) | $ / shares | $ 26.95 |
Weighted average grant-date fair value of nonvested RSUs, granted (in usd per share) | $ / shares | 44.76 |
Weighted-average grant date fair value of nonvested RSUs, vested (in usd per share) | $ / shares | 32.79 |
Weighted-average grant date fair value of nonvested restricted RSUs, forfeited or cancelled (in usd per share) | $ / shares | 37.60 |
Weighted-average grant date fair value, ending balance (in usd per share) | $ / shares | $ 35.22 |
Stock Based Compensation - St_2
Stock Based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 21, 2018 | Sep. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | $ 6,626 | $ 3,339 | $ 1,803 | ||
Cost of revenue | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | 211 | 114 | 80 | ||
Research and development | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | 1,461 | 555 | 155 | ||
Sales and marketing | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | 1,199 | 511 | 172 | ||
General and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | $ 3,755 | 2,159 | 1,396 | ||
Separation agreement with an executive | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Number of outstanding options modified (in shares) | 17,725 | 194,234 | |||
Separation agreement with an executive | General and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | $ 535 | $ 394 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | Oct. 25, 2015 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 4 years 4 months 6 days | |
Service agreement, annual minimum commitments | $ 1,200 | |
Service agreement, term of agreement (in years) | 5 years | |
Non-cancellable purchase obligation | $ 8,565 | |
Non-cancellable purchase obligation, fulfilled within a year | $ 4,915 | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 5 years 8 months 1 day |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Matching contributions | $ 1,731 | $ 1,117 | $ 806 |
Income Taxes - Schedule of Dome
Income Taxes - Schedule of Domestic and Foreign Components of Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (15,229) | $ 7,053 | $ 12,889 |
International | 5 | 0 | 0 |
Income (loss) before income taxes | $ (15,224) | $ 7,053 | $ 12,889 |
Income Taxes - Components of (P
Income Taxes - Components of (Provision) Benefit for Income Taxes from Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||
Federal | $ 81 | $ 162 | $ (448) |
State | 132 | (125) | (302) |
Foreign | 3 | 0 | 0 |
Total | 216 | 37 | (750) |
Deferred: | |||
Federal | 15,205 | 8,945 | (5,983) |
State | 2,297 | 1,888 | (185) |
Total | 17,502 | 10,833 | (6,168) |
Income tax (provision) benefit | $ 17,718 | $ 10,870 | $ (6,918) |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal Tax Rate | 21.00% | 21.00% | 34.00% |
State Tax Rate | 3.10% | 6.30% | 4.70% |
Non-deductible expenses | (1.60%) | 1.70% | 1.20% |
Research credit | 7.20% | (13.60%) | (1.50%) |
Stock-based compensation | 88.60% | (168.00%) | 0.10% |
Deferred tax rate change | (0.30%) | (0.70%) | 16.10% |
Other | (1.60%) | (0.80%) | (0.90%) |
Total | 116.40% | (154.10%) | 53.70% |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 97 | $ 57 |
Accrued liabilities | 2,083 | 2,755 |
Operating lease liabilities | 6,335 | 0 |
Deferred revenue | 1,682 | 734 |
Intangibles | 0 | 85 |
Stock-based compensation - deferred tax asset | 2,109 | 3,486 |
Tax credits | 3,710 | 2,690 |
Net operating losses | 30,835 | 11,359 |
Other deferred tax assets | 90 | 61 |
Total deferred tax assets | 46,941 | 21,227 |
Deferred tax liabilities: | ||
Property and equipment | 5,793 | 2,993 |
Goodwill | 855 | 729 |
Intangibles | 41 | 0 |
Operating lease assets | 5,295 | 0 |
Other liability | 96 | 146 |
Total deferred tax liabilities | 12,080 | 3,868 |
Net deferred tax asset | $ 34,861 | $ 17,359 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Loss Carryforwards [Line Items] | |
Federal tax credits | $ 5,078 |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 125,367 |
State | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 79,890 |
Income Taxes - Summary of Unrec
Income Taxes - Summary of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits—January 1, | $ 1,046 | $ 731 |
Gross increases—tax positions in prior period | 0 | 56 |
Gross decreases—tax positions in prior period | (15) | 0 |
Gross increases—tax positions in current period | 367 | 287 |
Lapse of statute of limitations | 0 | (28) |
Unrecognized tax benefits—December 31, | $ 1,398 | $ 1,046 |
Related Parties (Details)
Related Parties (Details) - USD ($) | Jun. 20, 2019 | Nov. 30, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | |||||
Rental payments received | $ 643,000 | ||||
Spin-off | |||||
Related Party Transaction [Line Items] | |||||
Number of shares issued for each share held | 1 | ||||
Cash distributed | $ 30,000,000 | ||||
Net assets distributed | $ 28,899,000 | ||||
Affiliated Entity | Republic | |||||
Related Party Transaction [Line Items] | |||||
Amount collected on behalf | $ 1,781,000 | $ 9,213,000 | $ 0 | ||
Affiliated Entity | Republic | Transition Services Agreement | |||||
Related Party Transaction [Line Items] | |||||
Service term, period from spin-off | 2 years | ||||
Revenue from related parties | 80,000 | 575,000 | |||
Affiliated Entity | Republic | Facilities Sharing Agreement | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | $ 0 | 0 | |||
Sublease term | 63 months | ||||
Rental payments received | 949,000 | ||||
Rental payments received | $ 643,000 | 1,005,000 | |||
Affiliated Entity | Republic | Tax Sharing Agreement | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | 0 | 0 | |||
Affiliated Entity | Republic | Master Services Agreement | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 2,602,000 | 3,884,000 | $ 2,451,000 | ||
Accounts receivable, related parties | 161,000 | $ 327,000 | |||
Minimum monthly revenue expected from related party | $ 100,000 | ||||
Minimum monthly revenue expected from related party, period | 11 months | ||||
Affiliated Entity | Republic | Services Agreement | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 31,000 | ||||
Accounts receivable, related parties | $ 10,000 |
Basic and Diluted Income per _3
Basic and Diluted Income per Common Share - Components of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Net income | $ 2,494 | $ 17,923 | $ 5,971 |
Less: net income allocated to participating securities | 0 | 0 | 644 |
Net income (loss) attributable to common stockholders | $ 2,494 | $ 17,923 | $ 5,327 |
Net income per share: | |||
Basic (in usd per share) | $ 0.11 | $ 0.96 | $ 0.42 |
Diluted (in usd per share) | $ 0.10 | $ 0.85 | $ 0.37 |
Weighted Average Number of Common Shares Outstanding | |||
Basic (in shares) | 22,640,461 | 18,573,067 | 12,590,221 |
Dilutive effect of stock options, restricted stock units, and warrants (in shares) | 1,283,316 | 2,567,315 | 1,952,949 |
Diluted (in shares) | 23,923,777 | 21,140,382 | 14,543,170 |
Basic and Diluted Income per _4
Basic and Diluted Income per Common Share - Additional Information (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Series A redeemable convertible preferred stock outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from calculation of weighted-average common shares outstanding (in shares) | 0 | 0 | 1,522,123 |
Employee Stock Option | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from calculation of weighted-average common shares outstanding (in shares) | 0 | 0 | 50,604 |