Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 28, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
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 $0.001 per share | |
Trading Symbol | BAND | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001514416 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Class A voting common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 23,598,009 | |
Class B voting common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,965,170 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 85,298 | $ 113,641 |
Marketable securities | 38,214 | 71,231 |
Accounts receivable, net of allowance for doubtful accounts | 63,224 | 74,465 |
Deferred costs | 3,651 | 3,566 |
Prepaid expenses and other current assets | 19,569 | 16,705 |
Total current assets | 209,956 | 279,608 |
Property, plant and equipment, net | 102,075 | 99,753 |
Operating right-of-use asset, net | 8,447 | 9,993 |
Intangible assets, net | 176,242 | 177,370 |
Deferred costs, non-current | 4,935 | 4,938 |
Other long-term assets | 28,192 | 31,251 |
Goodwill | 331,275 | 326,405 |
Total assets | 861,122 | 929,318 |
Current liabilities: | ||
Accounts payable | 16,376 | 26,750 |
Accrued expenses and other current liabilities | 57,514 | 62,577 |
Current portion of deferred revenue | 7,302 | 7,181 |
Advanced billings | 7,322 | 10,049 |
Operating | 6,476 | 7,450 |
Total current liabilities | 94,990 | 114,007 |
Other liabilities | 13,312 | 11,176 |
Long-term lease obligations | 3,778 | 4,640 |
Deferred revenue, net of current portion | 8,220 | 8,306 |
Deferred tax liability | 34,328 | 38,466 |
Convertible senior notes | 417,085 | 480,546 |
Total liabilities | 571,713 | 657,141 |
Stockholders’ equity: | ||
Class A and Class B common stock | 26 | 25 |
Additional paid-in capital | 370,814 | 364,913 |
Accumulated deficit | (44,936) | (48,547) |
Accumulated other comprehensive loss | (36,495) | (44,214) |
Total stockholders’ equity | 289,409 | 272,177 |
Total liabilities and stockholders’ equity | $ 861,122 | $ 929,318 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 137,844,000 | $ 131,364,000 |
Cost of revenue | 82,191,000 | 75,950,000 |
Gross profit | 55,653,000 | 55,414,000 |
Operating expenses: | ||
Research and development | 25,661,000 | 22,427,000 |
Sales and marketing | 25,029,000 | 23,152,000 |
General and administrative | 16,719,000 | 16,705,000 |
Total operating expenses | 67,409,000 | 62,284,000 |
Operating loss | (11,756,000) | (6,870,000) |
Net gain on extinguishment of debt | 12,767,000 | 0 |
Other (expense) income, net | (528,000) | 235,000 |
Total other income, net | 12,239,000 | 235,000 |
Income (loss) before income taxes | 483,000 | (6,635,000) |
Income tax benefit (provision) | 3,128,000 | (179,000) |
Net income (loss) | $ 3,611,000 | $ (6,814,000) |
Net income (loss) per share, basic and diluted | ||
Basic (in usd per share) | $ 0.14 | $ (0.27) |
Diluted (in usd per share) | $ (0.28) | $ (0.27) |
Numerator used to compute net income (loss) per share: | ||
Net loss attribuatble to common stockholders, basic | $ 3,611,000 | $ (6,814,000) |
Net loss attributable to common stockholders, diluted | $ (8,087,000) | $ (6,814,000) |
Weighted average number of common shares outstanding, basic and diluted | ||
Weighted average number of common shares outstanding, basic (in shares) | 25,448,452 | 25,220,052 |
Weighted average number of common shares outstanding, diluted (in shares) | 29,273,258 | 25,220,052 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 3,611 | $ (6,814) |
Other comprehensive income (loss) | ||
Unrealized gain on marketable securities, net of income taxes | 72 | 0 |
Foreign currency translation, net of income taxes | 7,647 | (10,516) |
Total other comprehensive income (loss) | 7,719 | (10,516) |
Total comprehensive income (loss) | $ 11,330 | $ (17,330) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders’ Equity - USD ($) $ in Thousands | Total | Adjustment to opening retained earnings due to adoption of ASU 2020-06 | Class A voting common stock | Class B voting common stock | Common stock Class A voting common stock | Common stock Class B voting common stock | Additional paid-in capital | Additional paid-in capital Adjustment to opening retained earnings due to adoption of ASU 2020-06 | Accumulated other comprehensive income (loss) | Accumulated deficit | Accumulated deficit Adjustment to opening retained earnings due to adoption of ASU 2020-06 |
Beginning balance (in shares) at Dec. 31, 2021 | 23,177,988 | 1,965,170 | |||||||||
Beginning balance at Dec. 31, 2021 | $ 412,595 | $ (147,498) | $ 23 | $ 2 | $ 502,477 | $ (156,248) | $ (13,040) | $ (76,867) | $ 8,750 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exercises of vested stock options (in shares) | 16,095 | ||||||||||
Exercises of vested stock options | 125 | 125 | |||||||||
Vesting of restricted stock units (in shares) | 144,977 | ||||||||||
Equity awards withheld for tax liability (in shares) | (30,029) | ||||||||||
Equity awards withheld for tax liability | (1,751) | (1,751) | |||||||||
Foreign currency translation | (10,516) | (10,516) | |||||||||
Stock-based compensation | 5,346 | 5,346 | |||||||||
Net loss | (6,814) | (6,814) | |||||||||
Ending balance (in shares) at Mar. 31, 2022 | 23,309,031 | 1,965,170 | |||||||||
Ending balance at Mar. 31, 2022 | $ 251,487 | $ 23 | $ 2 | 349,949 | (23,556) | (74,931) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Accounting Standards Update | Accounting Standards Update 2020-06 [Member] | ||||||||||
Exercises of vested stock options (in shares) | 4,287 | ||||||||||
Exercises of vested stock options | $ 37 | 37 | |||||||||
Vesting of restricted stock units (in shares) | 28,351 | ||||||||||
Equity awards withheld for tax liability (in shares) | (7,005) | ||||||||||
Equity awards withheld for tax liability | (145) | (145) | |||||||||
Unrealized loss on marketable securities | (338) | (338) | |||||||||
Foreign currency translation | (29,775) | (29,775) | |||||||||
Stock-based compensation | 4,821 | 4,821 | |||||||||
Net loss | (6,248) | (6,248) | |||||||||
Ending balance (in shares) at Jun. 30, 2022 | 23,334,664 | 1,965,170 | |||||||||
Ending balance at Jun. 30, 2022 | 219,839 | $ 23 | $ 2 | 354,662 | (53,669) | (81,179) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Vesting of restricted stock units (in shares) | 30,395 | ||||||||||
Equity awards withheld for tax liability (in shares) | (6,856) | ||||||||||
Equity awards withheld for tax liability | (89) | (89) | |||||||||
Unrealized loss on marketable securities | 458 | 458 | |||||||||
Foreign currency translation | (29,702) | (29,702) | |||||||||
Stock-based compensation | 4,892 | 4,892 | |||||||||
Net loss | (802) | (802) | |||||||||
Ending balance (in shares) at Sep. 30, 2022 | 23,358,203 | 1,965,170 | |||||||||
Ending balance at Sep. 30, 2022 | 194,596 | $ 23 | $ 2 | 359,465 | (82,913) | (81,981) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exercises of vested stock options (in shares) | 86 | ||||||||||
Exercises of vested stock options | 1 | 1 | |||||||||
Vesting of restricted stock units (in shares) | 27,511 | ||||||||||
Equity awards withheld for tax liability (in shares) | (6,800) | ||||||||||
Equity awards withheld for tax liability | (149) | (149) | |||||||||
Unrealized loss on marketable securities | 194 | 194 | |||||||||
Foreign currency translation | 38,138 | 38,138 | |||||||||
Unrealized gain/loss on employee benefit pension plan | 367 | 367 | |||||||||
Stock-based compensation | 5,596 | 5,596 | |||||||||
Net loss | 33,434 | 33,434 | |||||||||
Ending balance (in shares) at Dec. 31, 2022 | 23,379,000 | 1,965,170 | 23,379,000 | 1,965,170 | |||||||
Ending balance at Dec. 31, 2022 | $ 272,177 | $ 23 | $ 2 | 364,913 | (44,214) | (48,547) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exercises of vested stock options (in shares) | 22,975 | 22,975 | |||||||||
Exercises of vested stock options | $ 155 | 155 | |||||||||
Vesting of restricted stock units (in shares) | 171,950 | ||||||||||
Vesting of restricted stock units | 1 | $ 1 | |||||||||
Equity awards withheld for tax liability (in shares) | (43,325) | ||||||||||
Equity awards withheld for tax liability | (903) | (903) | |||||||||
Unrealized loss on marketable securities | 72 | 72 | |||||||||
Foreign currency translation | 7,647 | 7,647 | |||||||||
Stock-based compensation | 6,649 | 6,649 | |||||||||
Net loss | 3,611 | 3,611 | |||||||||
Ending balance (in shares) at Mar. 31, 2023 | 23,530,600 | 1,965,170 | 23,530,600 | 1,965,170 | |||||||
Ending balance at Mar. 31, 2023 | $ 289,409 | $ 24 | $ 2 | $ 370,814 | $ (36,495) | $ (44,936) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Cash flows from operating activities | ||||
Net income (loss) | $ 3,611 | $ 33,434 | $ (6,248) | $ (6,814) |
Adjustments to reconcile net income (loss) to net cash used in operating activities | ||||
Depreciation and amortization | 8,894 | 9,170 | ||
Non-cash reduction to the right-of-use asset | 1,601 | 1,910 | ||
Amortization of debt discount and issuance costs | 1,011 | 760 | ||
Stock-based compensation | 7,378 | 5,346 | ||
Deferred taxes and other | (4,683) | 94 | ||
Net gain on extinguishment of debt | (12,767) | 0 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable, net of allowances | 11,335 | (7,416) | ||
Prepaid expenses and other assets | (1,509) | (11,334) | ||
Accounts payable | (10,707) | 11 | ||
Accrued expenses and other liabilities | (8,619) | 3,690 | ||
Operating right-of-use liability | (1,899) | (2,112) | ||
Net cash used in operating activities | (6,354) | (6,695) | ||
Cash flows from investing activities | ||||
Purchase of property, plant and equipment | (2,889) | (5,272) | ||
Capitalized software development costs | (1,657) | (653) | ||
Purchase of marketable securities | (10,849) | 0 | ||
Proceeds from sales and maturities of marketable securities | 43,938 | 0 | ||
Proceeds from sale of business | 418 | 0 | ||
Net cash provided by (used in) investing activities | 28,961 | (5,925) | ||
Cash flows from financing activities | ||||
Payments on finance leases | (55) | (48) | ||
Net cash paid for debt extinguishment | (51,146) | 0 | ||
Proceeds from exercises of stock options | 155 | 125 | ||
Value of equity awards withheld for tax liabilities | (1,016) | (1,701) | ||
Net cash used in financing activities | (52,062) | (1,624) | ||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 308 | (1,056) | ||
Net decrease in cash, cash equivalents, and restricted cash | (29,147) | (15,300) | ||
Cash, cash equivalents, and restricted cash, beginning of period | 114,622 | $ 316,989 | 332,289 | |
Cash, cash equivalents, and restricted cash, end of period | 85,475 | 114,622 | 316,989 | |
Reconciliation of cash, cash equivalents, and restricted cash, end of period | ||||
Cash and cash equivalents | 85,298 | 113,641 | 316,008 | |
Restricted cash included in prepaid expenses and other current assets | 177 | 981 | ||
Total cash, cash equivalents, and restricted cash, end of period | 85,475 | $ 114,622 | 316,989 | |
Supplemental disclosure of cash flow information | ||||
Cash (received from) paid for interest | (334) | 472 | ||
Cash (refunded) paid for taxes, net | (553) | 36 | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | 0 | 3,453 | ||
Supplemental disclosure of noncash investing and financing activities | ||||
Purchase of property, plant and equipment, accrued but not paid | 1,348 | 433 | ||
Lease incentive | $ 2,155 | $ 1,152 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2023 | |
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. The Company is an international 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 23, 2023. The condensed consolidated balance sheet as of December 31, 2022, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by GAAP on an annual reporting basis. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive income (loss) and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2023 or any future period. Principles of Consolidation The condensed 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 condensed 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. These estimates in the condensed consolidated financial statements include, but are not limited to, allowance for doubtful accounts, reserve for expected credit losses, reserve for sales credits, recoverability of long lived and intangible assets, fair value of acquired intangible assets and goodwill, discount rates used in the valuation of right-of-use assets and lease liabilities, the fair value of the liability of the Company’s Convertible Notes (as defined herein), estimated period of benefit, valuation allowances on deferred tax assets, certain accrued expenses and contingencies, economic and demographic actuarial assumptions related to pension and other postretirement benefit costs and liabilities. 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. Marketable Securities The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. The Company may sell these securities at any time for use in current operations even if they have not yet reached maturity. As a result, the Company classifies investments with maturities greater than 90 days as marketable securities in the accompanying condensed consolidated balance sheets. The Company evaluates its investments to assess whether the amortized cost basis is in excess of estimated fair value and determines what amount of that difference, if any, is caused by expected credit losses. Allowances for credit losses are recognized as a charge in other (expense) income, net on the condensed consolidated statements of operations, and any remaining unrealized losses are included in accumulated other comprehensive loss on the condensed consolidated balance sheets. Due to the nature and investment grade of the Company’s marketable securities, there were no credit losses recorded for the three months ended March 31, 2023. There have been no impairment charges for any unrealized losses during the period. Accounts Receivable and Current Expected Credit Losses Accounts receivable are stated at realizable value, net of allowances, which includes an allowance for doubtful accounts and a reserve for expected credit losses. 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, current economic trends, and reasonable and supportable forecasts about the future. Relevant risk characteristics include customer size and historical loss patterns. Management has evaluated the expected credit losses related to trade accounts receivable and determined that an allowance of approximately $1.4 million and $1.2 million for uncollectible accounts and customer balances that are disputed was required as of March 31, 2023 and December 31, 2022, respectively. Refer to Note 4, “Financial Statement Components” to these condensed consolidated financial statements, for a rollforward of the components of the allowances as of March 31, 2023 and December 31, 2022. The Company includes unbilled receivables in its accounts receivable balance. Generally, these receivables represent earned revenue from services provided to customers, which will be billed in the next billing cycle. All amounts are considered collectible and billable. As of March 31, 2023 and December 31, 2022, unbilled receivables were $37.4 million and $33.9 million, respectively. 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. With regard to customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. The Company believes that no additional credit risk beyond amounts provided for by the allowance for doubtful accounts are inherent in accounts receivable. As of March 31, 2023 and December 31, 2022, no individual customer represented more than 10% of the Company’s accounts receivable, net of allowance for doubtful accounts. For the three months ended March 31, 2023 and 2022, no individual customer represented more than 10% of the Company’s revenue. Recently Adopted Accounting Standards The Company did not adopt any accounting pronouncements during the three months ended March 31, 2023. Recent Accounting Pronouncements Not Yet Adopted The Company did not have any applicable recent accounting pronouncements not yet adopted. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires use of observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3. Unobservable inputs for which there is little or no market data, which requires the Company to develop its own assumptions. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of March 31, 2023 and December 31, 2022 because of the relatively short duration of these instruments. Marketable securities consist of time deposits, corporate debt securities, U.S. treasury securities, and commercial paper 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. 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 tables summarize the Company’s financial assets measured at fair value as of March 31, 2023 and December 31, 2022: Amortized cost or carrying value Unrealized gains Unrealized losses Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total (In thousands) Financial assets: Cash and cash equivalents: Money market account $ 48,724 $ — $ — $ 48,724 $ — $ — $ 48,724 U.S. treasury securities 989 — — 989 — — 989 Commercial paper 12,955 — — 12,955 — — 12,955 Total included in cash and cash equivalents 62,668 — — 62,668 — — 62,668 Marketable securities: U.S. treasury securities 9,306 115 — 9,421 — — 9,421 Corporate debt securities 8,664 — (22) — 8,642 — 8,642 Commercial paper 19,858 293 — 20,151 — — 20,151 Total marketable securities 37,828 408 (22) 29,572 8,642 — 38,214 Total financial assets $ 100,496 $ 408 $ (22) $ 92,240 $ 8,642 $ — $ 100,882 Amortized cost or carrying value Unrealized gains Unrealized losses Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total (In thousands) Financial assets: Cash and cash equivalents: Money market account $ 36,728 $ — $ — $ 36,728 $ — $ — $ 36,728 Commercial paper 28,254 — — 28,254 — — 28,254 Total included in cash and cash equivalents 64,982 — — 64,982 — — 64,982 Marketable securities: Time deposits 6,645 — (15) 6,630 — — 6,630 U.S. treasury securities 14,718 74 — 14,792 — — 14,792 Corporate debt securities 23,412 — (97) — 23,315 — 23,315 Commercial paper 26,142 352 — 26,494 — — 26,494 Total marketable securities 70,917 426 (112) 47,916 23,315 — 71,231 Total financial assets $ 135,899 $ 426 $ (112) $ 112,898 $ 23,315 $ — $ 136,213 The Company classifies its marketable securities as current assets as they are available for current operating needs. The following table summarizes the contractual maturities of marketable securities as of March 31, 2023: Amortized cost Aggregate fair value (In thousands) Financial assets: Less than one year $ 37,828 $ 38,214 Total $ 37,828 $ 38,214 As of March 31, 2023, the marketable securities were in an unrealized gain position. The Company has determined that (i) it does not have the intent to sell any of these investments and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. As of March 31, 2023, the Company anticipates that it will recover the entire amortized cost basis of its marketable securities before maturity. During the three months ended March 31, 2023, there were $26.2 million in maturities of marketable securities. Proceeds from sales of marketable securities were $17.7 million for the three months ended March 31, 2023. The Company determines realized gains and losses on sale of marketable securities using the specific identification method and records such gains and losses in other (expense) income, net on the condensed consolidated statements of operations. Interest earned on marketable securities was $0.3 million for the three months ended March 31, 2023. The interest is recorded in other (expense) income, net, on the accompanying condensed consolidated statements of operations. As of March 31, 2023, the accrued interest receivable, net of allowance for credit losses, was $0.2 million. Accrued interest receivable is recorded in prepaid expenses and other current assets As of March 31, 2023, the fair value of the 2026 Convertible Notes and 2028 Convertible Notes, as further described in Note 8, “Debt,” to these condensed consolidated financial statements, was approximately $136.2 million and $161.9 million, respectively. As of December 31, 2022, the fair value of the 2026 Convertible Notes and the 2028 Convertible Notes was approximately $180.9 million and $156.5 million, respectively. The fair value was determined based on the closing price for the Convertible Notes on the last trading day of the reporting period and is considered as Level 2 in the fair value hierarchy. |
Financial Statement Components
Financial Statement Components | 3 Months Ended |
Mar. 31, 2023 | |
Financial Statement Components [Abstract] | |
Financial Statement Components | 4. Financial Statement Components Accounts receivable, net of allowances consist of the following: As of March 31, As of December 31, 2023 2022 (In thousands) Trade accounts receivable $ 27,021 $ 40,332 Unbilled accounts receivable 37,387 33,863 Allowance for doubtful accounts and reserve for expected credit losses (1,382) (1,191) Other accounts receivable 198 1,461 Total accounts receivable, net $ 63,224 $ 74,465 Components of allowance for doubtful accounts and reserve for expected credit losses are as follows: Three months ended March 31, 2023 2022 (In thousands) Allowance for doubtful accounts: Balance, beginning of period $ (1,191) $ (1,661) Charged to bad debt expense, net of reversals (304) (141) Deductions (1) 148 111 Impact of foreign currency translation (35) 11 Balance, end of period $ (1,382) $ (1,680) ________________________ (1) Write-off of uncollectible accounts after all collection efforts have been exhausted. Accrued expenses and other current liabilities consisted of the following: As of March 31, As of December 31, 2023 2022 (In thousands) Accrued expense $ 34,575 $ 29,990 Accrued compensation and benefits 9,912 21,595 Accrued sales, use, VAT and telecommunications related taxes 7,373 7,799 Current portion of finance lease 120 143 Income tax payable 4,569 2,235 Other accrued expenses 965 815 Total accrued expenses and other current liabilities $ 57,514 $ 62,577 |
Right-of-Use Asset and Lease Li
Right-of-Use Asset and Lease Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Right-of-Use Asset and Lease Liabilities | 5. Right-of-Use Asset and Lease Liabilities The Company has entered into various operating lease agreements for office space and finance lease agreements for automobiles. As of March 31, 2023, the Company had various leased properties in the United States and internationally, with remaining lease terms of two months to 3.75 years, some of which include options to extend the leases for up to 5 years. None of the options to extend the leases are recognized in operating lease right-of-use (“ROU”) assets or lease liabilities. The Company has one lease with an early-termination option, which it does not expect to exercise. The components of lease expense recorded in the condensed consolidated statements of operations were as follows: Three months ended March 31, 2023 2022 (In thousands) Operating lease cost $ 1,733 $ 2,138 Finance lease cost: Depreciation of assets 41 50 Interest on lease liabilities 4 3 Sublease income — (96) Total net lease cost $ 1,778 $ 2,095 During the three months ended March 31, 2023 and 2022, short-term operating lease expense was $0.2 million and $0.1 million, respectively. Supplemental balance sheet information related to leases was as follows: As of March 31, As of December 31, Leases Classification 2023 2022 (In thousands) Assets: Operating lease assets Operating right-of-use asset, net (1) $ 8,447 $ 9,993 Finance lease assets Property, plant and equipment, net (2) 270 307 Total lease assets $ 8,717 $ 10,300 Liabilities: Current Operating Operating lease liability, current $ 6,476 $ 7,450 Finance Accrued expenses and other current liabilities 120 143 Non-current Operating Operating lease liability, net of current portion 3,778 4,640 Finance Other liabilities 144 172 Total lease liabilities $ 10,518 $ 12,405 ________________________ (1) Operating lease assets are recorded net of accumulated amortization of $20.7 million and $17.7 million as of March 31, 2023 and December 31, 2022, respectively. (2) Finance lease assets are recorded net of accumulated depreciation of $0.4 million and $0.3 million as of March 31, 2023 and December 31, 2022, respectively. Supplemental cash flow and other information related to leases was as follows: Three months ended March 31, 2023 2022 (In thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,899 $ 2,112 Financing cash flows from finance leases 55 48 $ 1,954 $ 2,160 Weighted average remaining lease term (in years) Operating leases 2.00 2.64 Finance leases 2.39 2.46 Weighted average discount rate Operating leases 4.60 % 4.57 % Finance leases 5.59 % 3.93 % Maturities of lease liabilities were as follows: As of March 31, 2023 Operating Leases Finance Leases (In thousands) 2023 (remaining) $ 5,695 $ 101 2024 2,623 108 2025 1,597 54 2026 665 21 Total lease payments 10,580 284 Less: imputed interest (326) (20) Total lease obligations 10,254 264 Less: current obligations (6,476) (120) Long-term lease obligations $ 3,778 $ 144 Future Corporate Headquarters On June 4, 2021, the Company purchased approximately 40 acres of undeveloped land (the “Property”) in Raleigh, North Carolina, from the State of North Carolina (the “State”) for $30.0 million. Additionally, as consideration for the Property, the Company agreed to construct, at its expense, a parking lot and related improvements (the “Parking Improvements”) on land owned by the State adjacent to the Property. Subsequent to the purchase of the Property, the Company sold a portion of the Property constituting approximately 23.76 acres (the “Conveyed Parcel”) to USEF Edwards Mill Owner, LLC (the “Developer”) for $17.5 million. The Company retained approximately 17.06 acres of the Property, which was recorded at cost and is included in the Company’s condensed consolidated balance sheets as a component of property, plant and equipment, net. A lease incentive was recognized for the difference between the consideration received from the Developer for the Conveyed Parcel and the cost basis of the Conveyed Parcel and is included as a component of other liabilities on the condensed consolidated balance sheets. As of March 31, 2023, the balance of the lease incentive, including additional incentives obtained during project development, was $12.6 million. On May 27, 2021, the Company entered into a Lease Agreement (the “Lease”) with the Developer for the Conveyed Parcel, together with improvements for office and related infrastructure to be constructed thereon, collectively constituting approximately 534,000 gross square feet (the “Project”). The lease became effective upon closing of the sale of the Conveyed Parcel to the Developer. When construction of the Project is completed, the Company intends to relocate its corporate headquarters to the Project. The lease term will commence upon substantial completion of the final building to be delivered, as evidenced by a certificate of occupancy issued by the City of Raleigh (the “Commencement Date”), and continue for a period of twenty No ROU assets or lease liabilities have been recognized in connection with the lease as of March 31, 2023. Future lease payments are included in Note 12, “Commitments and Contingencies.” |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 6. Property, Plant and Equipment Property, plant and equipment, net consisted of the following: As of March 31, As of December 31, 2023 2022 (In thousands) Furniture and fixtures $ 16,768 $ 16,494 Computer and office equipment 14,702 14,160 Telecommunications equipment 79,713 80,251 Leasehold improvements 7,216 6,410 Software 8,378 7,051 Internal-use software development 25,451 23,677 Automobile 675 665 Land 25,216 23,090 Total cost 178,119 171,798 Less—accumulated depreciation (76,044) (72,045) Total property, plant and equipment, net $ 102,075 $ 99,753 The Company capitalized $1.7 million and $0.7 million of software development costs for the three months ended March 31, 2023 and 2022, respectively. Amortization expense related to capitalized software development costs were $0.7 million and $0.5 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, unamortized implementation costs related to cloud computing arrangements are $0.3 million, of which $0.2 million are included in prepaid expenses and other current assets and $0.1 million are included in other long-term assets. The Company leases automobiles under leases accounted for as finance leases with expiration dates ranging from April 24, 2023 to October 5, 2026. As of March 31, 2023, cost and accumulated depreciation of the assets under finance leases recorded by the Company were $0.7 million and $0.4 million, respectively. The Company recognized depreciation expense, which includes amortization of capitalized software development costs, as follows: Three months ended March 31, 2023 2022 (In thousands) Cost of revenue $ 3,529 $ 3,376 Research and development 512 592 Sales and marketing 309 334 General and administrative 270 302 Total depreciation expense $ 4,620 $ 4,604 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7. Intangible Assets Intangible Assets Intangible assets, net consisted of the following as of March 31, 2023: Gross Accumulated Net Carrying Amortization (In thousands) (In years) Customer relationships $ 143,795 $ (27,773) $ 116,022 15 - 20 Developed technology 78,588 (18,992) 59,596 10 Other, definite lived 2,828 (2,828) — 2 - 7 Licenses, indefinite lived 624 — 624 Indefinite Total intangible assets, net $ 225,835 $ (49,593) $ 176,242 Intangible assets, net consisted of the following as of December 31, 2022: Gross Accumulated Net Carrying Amortization (In thousands) (In years) Customer relationships $ 141,146 $ (25,037) $ 116,109 15 - 20 Developed technology 77,409 (16,772) 60,637 10 Other, definite lived 2,828 (2,828) — 2 - 7 Licenses, indefinite lived 624 — 624 Indefinite Total intangible assets, net $ 222,007 $ (44,637) $ 177,370 The Company recognized amortization expense as follows: Three months ended March 31, 2023 2022 (In thousands) Cost of revenue $ 1,945 $ 2,032 Sales and marketing 2,329 2,534 Total amortization expense $ 4,274 $ 4,566 The remaining weighted average amortization period for definite lived intangible assets is 10.8 years. Future estimated amortization expense for definite lived intangible assets is as follows: As of March 31, 2023 (In thousands) 2023 (remaining) $ 12,954 2024 17,272 2025 17,272 2026 17,272 2027 17,272 Thereafter 93,576 $ 175,618 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt Revolving Credit Facility On March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation as receiver. As a result, SVB ceased normal banking operations for a period of time. Given these circumstances, on March 14, 2023 (the “Notice Date”), the Company gave notice to SVB of its desire and intent to terminate the commitments (the “Termination”) under that certain credit agreement, dated as of June 6, 2022 (the “Credit Agreement”), among the Company, as borrower, the lenders from time to time party thereto, and SVB, as administrative agent, issuing lender and swingline lender. As of the Notice Date, there were no outstanding borrowings under the Credit Agreement. The Termination became effective on March 15, 2023. As of March 31, 2023, there were no outstanding debt issuance costs. As of December 31, 2022, unamortized debt issuance costs were $0.4 million, of which $0.2 million were included in prepaid expenses and other current assets and $0.2 million were included in other long-term assets. Convertible Senior Notes and Capped Call Transactions 2026 Convertible Notes In February, 2020, the Company issued $400.0 million aggregate principal amount of 0.25% Convertible Notes due 2026 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act (the “2026 Convertible Notes”). The interest on the 2026 Convertible Notes is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2020. The 2026 Convertible Notes will mature on March 1, 2026, unless earlier repurchased, redeemed by the Company, or converted pursuant to their terms. The total net proceeds from the 2026 Convertible Notes, after deducting initial purchaser discounts, costs related to the 2026 Capped Calls (as defined herein), and debt issuance costs, paid by the Company, were approximately $344.7 million. The excess of the principal amount of the liability component over its carrying amount, or the debt discount, was amortized to interest expense at an annual effective interest rate of 0.509% over the contractual terms of the 2026 Convertible Notes. Each $1,000 principal amount of the 2026 Convertible Notes is initially convertible into 10.9857 shares of the Company’s Class A common stock, par value $0.001 per share, which is equivalent to an initial conversion price of approximately $91.03 per share. During March 2023, the Company entered into separate, privately negotiated repurchase agreements with a limited number of holders of the 2026 Convertible Notes to repurchase (the “Repurchases”) approximately $65.0 million aggregate principal amount of the 2026 Convertible Notes for an aggregate cash price of approximately $51.3 million. The Repurchases closed on March 6, 2023. The Company had previously entered into capped call transactions with certain financial institutions in connection with the 2026 Convertible Notes. All of these transactions are expected to remain in effect notwithstanding the Repurchases. Following these Repurchases, and the approximate $160.0 million repurchases that closed in November 2022, approximately $175.0 million principal amount of the 2026 Convertible Notes remain outstanding. The difference between the consideration used to repurchase the 2026 Convertible Notes and the carrying value of the 2026 Convertible Notes resulted in a gain of $12.8 million recorded within net gain on extinguishment of debt on the Company’s condensed consolidated statements of operations in the three months ended March 31, 2023. 2028 Convertible Notes In March 2021, the Company issued $250.0 million aggregate principal amount of 0.50% Convertible Notes due 2028 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act (the “2028 Convertible Notes” and, together with the 2026 Convertible Notes, the “Convertible Notes”). The interest on the 2028 Convertible Notes is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2021. The 2028 Convertible Notes will mature on April 1, 2028, unless earlier repurchased, redeemed by the Company, or converted pursuant to their terms. The total net proceeds from the 2028 Convertible Notes, after deducting initial purchaser discounts, costs related to the 2028 Capped Calls (as defined herein), and debt issuance costs, paid by the Company, were approximately $217.0 million. The excess of the principal amount of the liability component over its carrying amount, or the debt discount, was amortized to interest expense at an annual effective interest rate of 0.442% over the contractual terms of the 2028 Convertible Notes. Each $1,000 principal amount of the 2028 Convertible Notes is initially convertible into 5.5781 shares of the Company’s Class A common stock, par value $0.001 per share, which is equivalent to an initial conversion price of approximately $179.27 per share. Other Terms of the Convertible Notes The Convertible Notes are effectively subordinated to the Company’s future senior secured indebtedness to the extent of the value of the collateral securing that indebtedness. The Convertible Notes are the senior, unsecured obligations of the Company and are equal in right of payment with the Company’s future senior unsecured indebtedness, if any, senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Convertible Notes and the Convertible Notes will be structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and preferred equity, if any, of the Company’s subsidiaries. The Convertible Notes may bear special interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the indenture governing the applicable Convertible Notes (each, a “Notes Indenture” and collectively, the “Notes Indentures”) or if the Convertible Notes are not freely tradeable as required by the applicable Notes Indenture. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (which includes the calling of any Convertible Notes for redemption), as defined in the applicable Notes Indenture, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Convertible Notes in connection with such make-whole fundamental change or during the relevant redemption period. The Company may redeem the Convertible Notes at its option, on or after March 6, 2023 for the 2026 Convertible Notes, and on or after April 6, 2025 for the 2028 Convertible Notes, in each case, at a cash redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, subject to certain conditions. No sinking fund is provided for the Convertible Notes. The Convertible Notes will be convertible at certain times and upon the occurrence of certain events in the future. Further, on or after September 1, 2025 for the 2026 Convertible Notes, and on or after October 1, 2027 for the 2028 Convertible Notes, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Convertible Notes may convert all or a portion of their Convertible Notes regardless of these conditions. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of Class A common stock, or a combination of cash and shares of Class A common stock, at the Company’s election. It is the Company’s current intent to settle the principal amount of the Convertible Notes with cash. During the three months ended March 31, 2023, the conditions allowing the holders of the 2026 Convertible Notes and the 2028 Convertible Notes to convert were not met. The Convertible Notes may be convertible thereafter if one or more of the conversion conditions specified in each respective Notes Indenture are satisfied during future measurement periods. The Company continues to classify the Convertible Notes as a long-term liability in its condensed consolidated balance sheets as of March 31, 2023, based on contractual settlement provisions. Upon the occurrence of a fundamental change (as defined in the applicable Notes Indenture) prior to the maturity date, holders may require the Company to repurchase all or a portion of the 2026 Convertible Notes or 2028 Convertible Notes for cash at a price equal to the principal amount of the Convertible Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The net carrying amount of the liability components of the 2026 Convertible Notes and the 2028 Convertible Notes were as follows: As of March 31, As of December 31, 2023 2022 2026 Convertible Notes: (In thousands) Principal $ 175,000 $ 240,000 Unamortized debt issuance costs (2,533) (3,805) 2026 Convertible Notes net carrying amount 172,467 236,195 2028 Convertible Notes: Principal 250,000 250,000 Unamortized debt issuance costs (5,382) (5,649) 2028 Convertible Notes net carrying amount 244,618 244,351 Total net carrying amount $ 417,085 $ 480,546 The following table sets forth the interest expense recognized related to the 2026 and 2028 Convertible Notes: Three months ended March 31, 2023 2022 2026 Convertible Notes: (In thousands) Contractual interest expense $ 138 $ 250 Amortization of debt issuance costs 296 495 Total interest expense related to the 2026 Convertible Notes 434 745 2028 Convertible Notes: Contractual interest expense 313 313 Amortization of debt issuance costs 266 265 Total interest expense related to the 2028 Convertible Notes 579 578 Total interest expense $ 1,013 $ 1,323 Capped Calls In connection with the offering of the 2026 Convertible Notes and the 2028 Convertible Notes, the Company entered into privately negotiated capped call transactions with certain counterparties (the “2026 Capped Calls” and the “2028 Capped Calls,” respectively and, collectively, the “Capped Calls”). The initial strike price of the Convertible Notes corresponds to the initial conversion price of the 2026 Convertible Notes and the 2028 Convertible Notes. The Capped Calls are generally intended to reduce or offset the potential dilution to the Class A common stock upon any conversion of the 2026 Convertible Notes and 2028 Convertible Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. The Capped Calls expire on the earlier of (i) the last day on which any convertible securities remain outstanding and (ii) March 1, 2026 for the 2026 Capped Calls and April 1, 2028 for the 2028 Capped Calls, subject to earlier exercise. The Capped Calls are subject to either adjustment or termination upon the occurrence of specified extraordinary events affecting the Company, including a merger event, a tender offer, and a nationalization, insolvency or delisting involving the Company. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including changes in law, insolvency filings, and hedging disruptions. The Capped Call transactions are recorded in stockholders’ equity and are not accounted for as derivatives. The net cost to purchase the Capped Calls was recorded as a reduction to additional paid-in capital in the accompanying condensed consolidated balance sheets. The following table sets forth key terms and costs incurred for the Capped Calls related to the Convertible Notes: 2026 Convertible Notes 2028 Convertible Notes (In thousands, except share and per share amounts) Initial approximate strike price per share, subject to certain adjustments $ 91.03 $ 179.27 Initial cap price per share, subject to certain adjustments $ 137.40 $ 260.76 Net costs incurred $ 43,320 $ 25,500 Class A common stock covered, subject to anti-dilution adjustments 4,394,276 1,394,525 All of the Capped Calls were outstanding as of March 31, 2023. |
Geographic Information
Geographic Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Geographic Information | 9. Geographic Information The Company generates its revenue primarily in North America. Revenue by geographic area is detailed in the table below (which is apportioned based on the destination of the service): Three months ended March 31, 2023 2022 (In thousands) North America $ 115,709 $ 109,935 Rest of World 22,135 21,429 Total $ 137,844 $ 131,364 During the three months ended March 31, 2023, the Company changed its methodology for apportioning the revenue by geographic area, from basing the revenue on the customer billing address to basing the revenue on the destination of the service, in order to provide a more transparent metric and to be consistent with other information provided publicly. Accordingly, all periods presented have been conformed to the updated methodology. The Company’s long-lived assets were primarily held in North America as of March 31, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, long-lived assets held outside of North America were $9.0 million and $11.9 million, respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity Preferred Stock As of March 31, 2023 and December 31, 2022, the Company had authorized 10,000,000 shares of undesignated preferred stock, par value $0.001, of which no shares were issued and outstanding. Common Stock As of March 31, 2023 and December 31, 2022, the Company had authorized 100,000,000 shares of Class A common stock, par value $0.001 per share, with one vote per share and 20,000,000 shares of Class B common stock, par value $0.001 per share, with ten votes per share. As of March 31, 2023, 23,530,600 and 1,965,170 shares of Class A common stock and Class B common stock, respectively, were issued and outstanding. As of December 31, 2022, 23,379,000 and 1,965,170 shares of Class A common stock and Class B common stock, respectively, were issued and outstanding. Reserved Shares The Company had reserved shares of Class A common stock for issuance under stock-based award agreements as follows: As of March 31, As of December 31, 2023 2022 Stock options issued and outstanding 136,479 159,741 Nonvested restricted stock units issued and outstanding 2,475,656 2,607,106 Stock-based awards available for grant under the 2017 Plan (1) 3,051,143 1,879,368 5,663,278 4,646,215 ________________________ (1) As of March 31, 2023, the amount excludes an increase of 2,500,000 shares pursuant to the Second Amended and Restated 2017 Incentive Award Plan, effective February 21, 2023 and subject to approval of the Company ’ s stockholders at the annual stockholders ’ meeting to be held on May 18, 2023. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 11. Stock-Based Compensation Stock Options The following summarizes the stock option activity for the periods presented: Number of Weighted- Weighted- Aggregate Outstanding as of December 31, 2022 159,741 $ 10.42 2.57 $ 2,001 Granted — — Exercised (22,975) 6.74 Forfeited or cancelled (287) 9.16 Outstanding as of March 31, 2023 136,479 $ 11.05 2.70 $ 710 Options vested and exercisable at March 31, 2023 136,479 $ 11.05 2.70 $ 710 Options vested and expected to vest as of March 31, 2023 136,479 $ 11.05 2.70 $ 710 Aggregate intrinsic value of stock options exercised was $0.2 million and $0.6 million for the three months ended March 31, 2023 and 2022, respectively. No options were granted for the three months ended March 31, 2023. As of March 31, 2023, the Company had no unrecognized compensation cost related to non-vested stock options. All outstanding stock options were fully vested prior to December 31, 2022. Restricted Stock Units The following summarizes the restricted stock unit (“RSU”) activity for the period presented: Number of awards outstanding Weighted-average grant date fair value (Per share) Nonvested RSUs as of December 31, 2022 2,607,106 $ 32.33 Granted 76,196 15.90 Vested (171,950) 63.29 Forfeited or cancelled (35,696) 27.66 Nonvested RSUs as of March 31, 2023 2,475,656 $ 29.74 As of March 31, 2023, total unrecognized compensation cost related to non-vested RSUs was $65.5 million, which will be amortized over a weighted-average period of 2.63 years. Stock-Based Compensation Expense The Company recognized total stock-based compensation expense as follows: Three months ended March 31, 2023 2022 (In thousands) Cost of revenue $ 192 $ 99 Research and development 3,141 1,868 Sales and marketing 1,237 899 General and administrative 2,808 2,480 Total $ 7,378 $ 5,346 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
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 3.75 years. As of March 31, 2023, the Company has $14.9 million in future minimum rent payments for its current office space. See Note 5, “Right-of-Use Asset and Lease Liabilities” to the condensed consolidated financial statements, for additional details on the Company’s operating lease commitments. Contractual Obligations As of March 31, 2023, the Company has $15.5 million in non-cancellable purchase obligations, consisting of primarily network equipment maintenance and software license contracts, of which $12.1 million will be fulfilled within one year. On May 27, 2021, the Company entered into the Lease with the Developer for the Conveyed Parcel, together with the Project. The Lease term will commence upon the Commencement Date and continue for the Initial Term. It is anticipated that the Commencement Date will occur in mid-2023. If the Commencement Date does not occur within one hundred twenty twelve Legal Matters The Company is involved as a defendant in various litigation, including, but not limited to, (a) 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, and (b) an action brought by a non-practicing entity related to alleged patent infringement. The Company intends to vigorously defend these lawsuits and believes that it has meritorious defenses to each. However, litigation is inherently uncertain, and any judgment or injunctive relief entered against the Company or any adverse settlement could adversely affect the Company’s business, results of operations and financial condition. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes At the end of each interim reporting period, the Company determines the income tax provision by using an estimate of the annual effective tax rate, adjusted for discrete items occurring in the quarter. The effective income tax rate reflects the effect of federal, state and international income taxes and the permanent impacts of differences in book and tax accounting. The Company’s effective tax rate was (647.6)% and (2.7)% for the three months ended March 31, 2023 and 2022, respectively. The decrease in the effective tax rate is primarily due to the near breakeven year-to-date pre-tax income of $0.5 million in relation to the increase in tax benefit resulting from additional operating losses outside of the U.S., which are not offset by a valuation allowance. Judgment is required in determining whether deferred tax assets will be realized in full or in part. Management assesses the available positive and negative evidence on a jurisdictional basis to estimate if deferred tax assets will be recognized and when it is more likely than not that all or some deferred tax assets will not be realized, and a valuation allowance must be established. As of March 31, 2023, the Company continues to maintain a valuation allowance for its U.S. federal and state net deferred tax assets. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Parties | 14. Related Parties The Company has certain involvement with Relay via an ongoing Master Agreement and a Facilities Sharing Agreement. Amounts charged under these arrangements totaled less than $0.1 million and $0.4 million for the three months ended March 31, 2023 and 2022, respectively, and are included in revenue on the Company’s |
Basic and Diluted Income (Loss)
Basic and Diluted Income (Loss) per Common Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Income (Loss) per Common Share | 15. Basic and Diluted Income (Loss) per Common Share Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by giving effect to all potential shares of common stock, including stock options and stock related to unvested restricted stock awards. The components of basic and diluted income (loss) per share are as follows: Three months ended March 31, 2023 2022 (In thousands, except share and per share amounts) Earnings per share Net income (loss) attributable to common stockholders $ 3,611 $ (6,814) Net income (loss) per share: Basic $ 0.14 $ (0.27) Diluted $ (0.28) $ (0.27) Numerator used to compute net income (loss) per share: Basic $ 3,611 $ (6,814) Net gain on extinguishment of debt, net of taxes (12,707) — Interest expense on convertible notes, net of taxes 1,009 — Diluted (1) $ (8,087) $ (6,814) Weighted average number of common shares outstanding: Basic 25,448,452 25,220,052 Convertible debt conversion 3,824,806 — Diluted 29,273,258 25,220,052 ________________________ (1) Net income is adjusted for the reversal of the net gain on extinguishment of debt and add back of interest expense as part of the calculation for diluted Non-GAAP earnings per share. The following common share equivalents were excluded from the weighted average shares used to calculate net income (loss) per common share because their effects would have been anti-dilutive: As of March 31, 2023 2022 Stock options issued and outstanding 136,479 164,114 Restricted stock units issued and outstanding 2,475,656 793,848 Convertible senior notes 3,824,806 5,788,805 Total 6,436,941 6,746,767 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 23, 2023. The condensed consolidated balance sheet as of December 31, 2022, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by GAAP on an annual reporting basis. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive income (loss) and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2023 or any future period. |
Principles of Consolidation | Principles of Consolidation The condensed 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 Estimates The preparation of the Company’s condensed 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. These estimates in the condensed consolidated financial statements include, but are not limited to, allowance for doubtful accounts, reserve for expected credit losses, reserve for sales credits, recoverability of long lived and intangible assets, fair value of acquired intangible assets and goodwill, discount rates used in the valuation of right-of-use assets and lease liabilities, the fair value of the liability of the Company’s Convertible Notes (as defined herein), estimated period of benefit, valuation allowances on deferred tax assets, certain accrued expenses and contingencies, economic and demographic actuarial assumptions related to pension and other postretirement benefit costs and liabilities. Although the Company believes that the estimates it uses are |
Marketable Securities | Marketable SecuritiesThe Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. The Company may sell these securities at any time for use in current operations even if they have not yet reached maturity. As a result, the Company classifies investments with maturities greater than 90 days as marketable securities in the accompanying condensed consolidated balance sheets. The Company evaluates its investments to assess whether the amortized cost basis is in excess of estimated fair value and determines what amount of that difference, if any, is caused by expected credit losses. Allowances for credit losses are recognized as a charge in other (expense) income, net on the condensed consolidated statements of operations, and any remaining unrealized losses are included in accumulated other comprehensive loss on the condensed consolidated balance sheets. |
Accounts Receivable and Current Expected Credit Losses | Accounts Receivable and Current Expected Credit Losses Accounts receivable are stated at realizable value, net of allowances, which includes an allowance for doubtful accounts and a reserve for expected credit losses. 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, current economic trends, and reasonable and supportable forecasts about the future. Relevant risk characteristics include customer size and historical loss patterns. Management has evaluated the expected credit losses related to trade accounts receivable and determined that an allowance of approximately $1.4 million and $1.2 million for uncollectible accounts and customer balances that are disputed was required as of March 31, 2023 and December 31, 2022, respectively. Refer to Note 4, “Financial Statement Components” to these condensed consolidated financial statements, for a rollforward of the components of the allowances as of March 31, 2023 and December 31, 2022. |
Current Expected Credit Losses | Accounts Receivable and Current Expected Credit Losses Accounts receivable are stated at realizable value, net of allowances, which includes an allowance for doubtful accounts and a reserve for expected credit losses. 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, current economic trends, and reasonable and supportable forecasts about the future. Relevant risk characteristics include customer size and historical loss patterns. Management has evaluated the expected credit losses related to trade accounts receivable and determined that an allowance of approximately $1.4 million and $1.2 million for uncollectible accounts and customer balances that are disputed was required as of March 31, 2023 and December 31, 2022, respectively. Refer to Note 4, “Financial Statement Components” to these condensed consolidated financial statements, for a rollforward of the components of the allowances as of March 31, 2023 and December 31, 2022. |
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. |
Recently Adopted Accounting Standards and Recent Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Standards The Company did not adopt any accounting pronouncements during the three months ended March 31, 2023. Recent Accounting Pronouncements Not Yet Adopted The Company did not have any applicable recent accounting pronouncements not yet adopted. |
Fair Value of Financial Instruments | The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires use of observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3. Unobservable inputs for which there is little or no market data, which requires the Company to develop its own assumptions. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of March 31, 2023 and December 31, 2022 because of the relatively short duration of these instruments. Marketable securities consist of time deposits, corporate debt securities, U.S. treasury securities, and commercial paper 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. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value on a Recurring Basis | The following tables summarize the Company’s financial assets measured at fair value as of March 31, 2023 and December 31, 2022: Amortized cost or carrying value Unrealized gains Unrealized losses Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total (In thousands) Financial assets: Cash and cash equivalents: Money market account $ 48,724 $ — $ — $ 48,724 $ — $ — $ 48,724 U.S. treasury securities 989 — — 989 — — 989 Commercial paper 12,955 — — 12,955 — — 12,955 Total included in cash and cash equivalents 62,668 — — 62,668 — — 62,668 Marketable securities: U.S. treasury securities 9,306 115 — 9,421 — — 9,421 Corporate debt securities 8,664 — (22) — 8,642 — 8,642 Commercial paper 19,858 293 — 20,151 — — 20,151 Total marketable securities 37,828 408 (22) 29,572 8,642 — 38,214 Total financial assets $ 100,496 $ 408 $ (22) $ 92,240 $ 8,642 $ — $ 100,882 Amortized cost or carrying value Unrealized gains Unrealized losses Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total (In thousands) Financial assets: Cash and cash equivalents: Money market account $ 36,728 $ — $ — $ 36,728 $ — $ — $ 36,728 Commercial paper 28,254 — — 28,254 — — 28,254 Total included in cash and cash equivalents 64,982 — — 64,982 — — 64,982 Marketable securities: Time deposits 6,645 — (15) 6,630 — — 6,630 U.S. treasury securities 14,718 74 — 14,792 — — 14,792 Corporate debt securities 23,412 — (97) — 23,315 — 23,315 Commercial paper 26,142 352 — 26,494 — — 26,494 Total marketable securities 70,917 426 (112) 47,916 23,315 — 71,231 Total financial assets $ 135,899 $ 426 $ (112) $ 112,898 $ 23,315 $ — $ 136,213 |
Schedule of Contractual Maturities of Marketable Securities | The following table summarizes the contractual maturities of marketable securities as of March 31, 2023: Amortized cost Aggregate fair value (In thousands) Financial assets: Less than one year $ 37,828 $ 38,214 Total $ 37,828 $ 38,214 |
Financial Statement Components
Financial Statement Components (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Financial Statement Components [Abstract] | |
Schedule of Accounts Receivable, net of Allowances | Accounts receivable, net of allowances consist of the following: As of March 31, As of December 31, 2023 2022 (In thousands) Trade accounts receivable $ 27,021 $ 40,332 Unbilled accounts receivable 37,387 33,863 Allowance for doubtful accounts and reserve for expected credit losses (1,382) (1,191) Other accounts receivable 198 1,461 Total accounts receivable, net $ 63,224 $ 74,465 Components of allowance for doubtful accounts and reserve for expected credit losses are as follows: Three months ended March 31, 2023 2022 (In thousands) Allowance for doubtful accounts: Balance, beginning of period $ (1,191) $ (1,661) Charged to bad debt expense, net of reversals (304) (141) Deductions (1) 148 111 Impact of foreign currency translation (35) 11 Balance, end of period $ (1,382) $ (1,680) ________________________ (1) Write-off of uncollectible accounts after all collection efforts have been exhausted. |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: As of March 31, As of December 31, 2023 2022 (In thousands) Accrued expense $ 34,575 $ 29,990 Accrued compensation and benefits 9,912 21,595 Accrued sales, use, VAT and telecommunications related taxes 7,373 7,799 Current portion of finance lease 120 143 Income tax payable 4,569 2,235 Other accrued expenses 965 815 Total accrued expenses and other current liabilities $ 57,514 $ 62,577 |
Right-of-Use Asset and Lease _2
Right-of-Use Asset and Lease Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Components of Lease Expense and Supplemental Cash Flow and Other Information | The components of lease expense recorded in the condensed consolidated statements of operations were as follows: Three months ended March 31, 2023 2022 (In thousands) Operating lease cost $ 1,733 $ 2,138 Finance lease cost: Depreciation of assets 41 50 Interest on lease liabilities 4 3 Sublease income — (96) Total net lease cost $ 1,778 $ 2,095 Supplemental cash flow and other information related to leases was as follows: Three months ended March 31, 2023 2022 (In thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,899 $ 2,112 Financing cash flows from finance leases 55 48 $ 1,954 $ 2,160 Weighted average remaining lease term (in years) Operating leases 2.00 2.64 Finance leases 2.39 2.46 Weighted average discount rate Operating leases 4.60 % 4.57 % Finance leases 5.59 % 3.93 % |
Schedule of Supplemental Balance Sheet Lease Information | Supplemental balance sheet information related to leases was as follows: As of March 31, As of December 31, Leases Classification 2023 2022 (In thousands) Assets: Operating lease assets Operating right-of-use asset, net (1) $ 8,447 $ 9,993 Finance lease assets Property, plant and equipment, net (2) 270 307 Total lease assets $ 8,717 $ 10,300 Liabilities: Current Operating Operating lease liability, current $ 6,476 $ 7,450 Finance Accrued expenses and other current liabilities 120 143 Non-current Operating Operating lease liability, net of current portion 3,778 4,640 Finance Other liabilities 144 172 Total lease liabilities $ 10,518 $ 12,405 ________________________ (1) Operating lease assets are recorded net of accumulated amortization of $20.7 million and $17.7 million as of March 31, 2023 and December 31, 2022, respectively. (2) Finance lease assets are recorded net of accumulated depreciation of $0.4 million and $0.3 million as of March 31, 2023 and December 31, 2022, respectively. |
Schedule of Maturities of Operating Lease Liabilities | Maturities of lease liabilities were as follows: As of March 31, 2023 Operating Leases Finance Leases (In thousands) 2023 (remaining) $ 5,695 $ 101 2024 2,623 108 2025 1,597 54 2026 665 21 Total lease payments 10,580 284 Less: imputed interest (326) (20) Total lease obligations 10,254 264 Less: current obligations (6,476) (120) Long-term lease obligations $ 3,778 $ 144 |
Schedule of Maturities of Finance Lease Liabilities | Maturities of lease liabilities were as follows: As of March 31, 2023 Operating Leases Finance Leases (In thousands) 2023 (remaining) $ 5,695 $ 101 2024 2,623 108 2025 1,597 54 2026 665 21 Total lease payments 10,580 284 Less: imputed interest (326) (20) Total lease obligations 10,254 264 Less: current obligations (6,476) (120) Long-term lease obligations $ 3,778 $ 144 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, Net | Property, plant and equipment, net consisted of the following: As of March 31, As of December 31, 2023 2022 (In thousands) Furniture and fixtures $ 16,768 $ 16,494 Computer and office equipment 14,702 14,160 Telecommunications equipment 79,713 80,251 Leasehold improvements 7,216 6,410 Software 8,378 7,051 Internal-use software development 25,451 23,677 Automobile 675 665 Land 25,216 23,090 Total cost 178,119 171,798 Less—accumulated depreciation (76,044) (72,045) Total property, plant and equipment, net $ 102,075 $ 99,753 |
Schedule of Depreciation Expense | The Company recognized depreciation expense, which includes amortization of capitalized software development costs, as follows: Three months ended March 31, 2023 2022 (In thousands) Cost of revenue $ 3,529 $ 3,376 Research and development 512 592 Sales and marketing 309 334 General and administrative 270 302 Total depreciation expense $ 4,620 $ 4,604 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite Lived Intangible Assets | Intangible assets, net consisted of the following as of March 31, 2023: Gross Accumulated Net Carrying Amortization (In thousands) (In years) Customer relationships $ 143,795 $ (27,773) $ 116,022 15 - 20 Developed technology 78,588 (18,992) 59,596 10 Other, definite lived 2,828 (2,828) — 2 - 7 Licenses, indefinite lived 624 — 624 Indefinite Total intangible assets, net $ 225,835 $ (49,593) $ 176,242 Intangible assets, net consisted of the following as of December 31, 2022: Gross Accumulated Net Carrying Amortization (In thousands) (In years) Customer relationships $ 141,146 $ (25,037) $ 116,109 15 - 20 Developed technology 77,409 (16,772) 60,637 10 Other, definite lived 2,828 (2,828) — 2 - 7 Licenses, indefinite lived 624 — 624 Indefinite Total intangible assets, net $ 222,007 $ (44,637) $ 177,370 |
Schedule of Infinite Lived Intangible Assets | Intangible assets, net consisted of the following as of March 31, 2023: Gross Accumulated Net Carrying Amortization (In thousands) (In years) Customer relationships $ 143,795 $ (27,773) $ 116,022 15 - 20 Developed technology 78,588 (18,992) 59,596 10 Other, definite lived 2,828 (2,828) — 2 - 7 Licenses, indefinite lived 624 — 624 Indefinite Total intangible assets, net $ 225,835 $ (49,593) $ 176,242 Intangible assets, net consisted of the following as of December 31, 2022: Gross Accumulated Net Carrying Amortization (In thousands) (In years) Customer relationships $ 141,146 $ (25,037) $ 116,109 15 - 20 Developed technology 77,409 (16,772) 60,637 10 Other, definite lived 2,828 (2,828) — 2 - 7 Licenses, indefinite lived 624 — 624 Indefinite Total intangible assets, net $ 222,007 $ (44,637) $ 177,370 |
Schedule of Amortization Expense | The Company recognized amortization expense as follows: Three months ended March 31, 2023 2022 (In thousands) Cost of revenue $ 1,945 $ 2,032 Sales and marketing 2,329 2,534 Total amortization expense $ 4,274 $ 4,566 |
Schedule of Future Estimated Amortization Expense | Future estimated amortization expense for definite lived intangible assets is as follows: As of March 31, 2023 (In thousands) 2023 (remaining) $ 12,954 2024 17,272 2025 17,272 2026 17,272 2027 17,272 Thereafter 93,576 $ 175,618 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Net Carrying Amount of Liability and Equity Component of Notes | The net carrying amount of the liability components of the 2026 Convertible Notes and the 2028 Convertible Notes were as follows: As of March 31, As of December 31, 2023 2022 2026 Convertible Notes: (In thousands) Principal $ 175,000 $ 240,000 Unamortized debt issuance costs (2,533) (3,805) 2026 Convertible Notes net carrying amount 172,467 236,195 2028 Convertible Notes: Principal 250,000 250,000 Unamortized debt issuance costs (5,382) (5,649) 2028 Convertible Notes net carrying amount 244,618 244,351 Total net carrying amount $ 417,085 $ 480,546 |
Schedule of Interest Income and Interest Expense Disclosure | The following table sets forth the interest expense recognized related to the 2026 and 2028 Convertible Notes: Three months ended March 31, 2023 2022 2026 Convertible Notes: (In thousands) Contractual interest expense $ 138 $ 250 Amortization of debt issuance costs 296 495 Total interest expense related to the 2026 Convertible Notes 434 745 2028 Convertible Notes: Contractual interest expense 313 313 Amortization of debt issuance costs 266 265 Total interest expense related to the 2028 Convertible Notes 579 578 Total interest expense $ 1,013 $ 1,323 |
Schedule of Capped Call Transactions | The following table sets forth key terms and costs incurred for the Capped Calls related to the Convertible Notes: 2026 Convertible Notes 2028 Convertible Notes (In thousands, except share and per share amounts) Initial approximate strike price per share, subject to certain adjustments $ 91.03 $ 179.27 Initial cap price per share, subject to certain adjustments $ 137.40 $ 260.76 Net costs incurred $ 43,320 $ 25,500 Class A common stock covered, subject to anti-dilution adjustments 4,394,276 1,394,525 |
Geographic Information (Tables)
Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographical Area | The Company generates its revenue primarily in North America. Revenue by geographic area is detailed in the table below (which is apportioned based on the destination of the service): Three months ended March 31, 2023 2022 (In thousands) North America $ 115,709 $ 109,935 Rest of World 22,135 21,429 Total $ 137,844 $ 131,364 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, As of December 31, 2023 2022 Stock options issued and outstanding 136,479 159,741 Nonvested restricted stock units issued and outstanding 2,475,656 2,607,106 Stock-based awards available for grant under the 2017 Plan (1) 3,051,143 1,879,368 5,663,278 4,646,215 ________________________ (1) As of March 31, 2023, the amount excludes an increase of 2,500,000 shares pursuant to the Second Amended and Restated 2017 Incentive Award Plan, effective February 21, 2023 and subject to approval of the Company ’ s stockholders at the annual stockholders ’ meeting to be held on May 18, 2023. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule 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, 2022 159,741 $ 10.42 2.57 $ 2,001 Granted — — Exercised (22,975) 6.74 Forfeited or cancelled (287) 9.16 Outstanding as of March 31, 2023 136,479 $ 11.05 2.70 $ 710 Options vested and exercisable at March 31, 2023 136,479 $ 11.05 2.70 $ 710 Options vested and expected to vest as of March 31, 2023 136,479 $ 11.05 2.70 $ 710 |
Schedule of Restricted Stock Unit Activity | The following summarizes the restricted stock unit (“RSU”) activity for the period presented: Number of awards outstanding Weighted-average grant date fair value (Per share) Nonvested RSUs as of December 31, 2022 2,607,106 $ 32.33 Granted 76,196 15.90 Vested (171,950) 63.29 Forfeited or cancelled (35,696) 27.66 Nonvested RSUs as of March 31, 2023 2,475,656 $ 29.74 |
Schedule of Stock-Based Compensation Expense | The Company recognized total stock-based compensation expense as follows: Three months ended March 31, 2023 2022 (In thousands) Cost of revenue $ 192 $ 99 Research and development 3,141 1,868 Sales and marketing 1,237 899 General and administrative 2,808 2,480 Total $ 7,378 $ 5,346 |
Basic and Diluted Income (Los_2
Basic and Diluted Income (Loss) per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The components of basic and diluted income (loss) per share are as follows: Three months ended March 31, 2023 2022 (In thousands, except share and per share amounts) Earnings per share Net income (loss) attributable to common stockholders $ 3,611 $ (6,814) Net income (loss) per share: Basic $ 0.14 $ (0.27) Diluted $ (0.28) $ (0.27) Numerator used to compute net income (loss) per share: Basic $ 3,611 $ (6,814) Net gain on extinguishment of debt, net of taxes (12,707) — Interest expense on convertible notes, net of taxes 1,009 — Diluted (1) $ (8,087) $ (6,814) Weighted average number of common shares outstanding: Basic 25,448,452 25,220,052 Convertible debt conversion 3,824,806 — Diluted 29,273,258 25,220,052 ________________________ (1) Net income is adjusted for the reversal of the net gain on extinguishment of debt and add back of interest expense as part of the calculation for diluted Non-GAAP earnings per share. |
Schedule of Anti-dilutive Common Shares Excluded from Calculation of Net Loss | The following common share equivalents were excluded from the weighted average shares used to calculate net income (loss) per common share because their effects would have been anti-dilutive: As of March 31, 2023 2022 Stock options issued and outstanding 136,479 164,114 Restricted stock units issued and outstanding 2,475,656 793,848 Convertible senior notes 3,824,806 5,788,805 Total 6,436,941 6,746,767 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Accounts Receivable and Current Expected Credit Losses (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 1,382 | $ 1,191 |
Unbilled accounts receivable | $ 37,387 | $ 33,863 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 85,298 | $ 113,641 | $ 316,008 |
Amortized cost | 37,828 | 70,917 | |
Unrealized gains | 408 | 426 | |
Unrealized losses | (22) | (112) | |
Total marketable securities | 38,214 | ||
Total financial assets | 100,496 | 135,899 | |
Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 48,724 | 36,728 | |
Time deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Amortized cost | 6,645 | ||
Unrealized gains | 0 | ||
Unrealized losses | (15) | ||
U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 989 | ||
Amortized cost | 9,306 | 14,718 | |
Unrealized gains | 115 | 74 | |
Unrealized losses | 0 | 0 | |
Corporate debt securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Amortized cost | 8,664 | 23,412 | |
Unrealized gains | 0 | 0 | |
Unrealized losses | (22) | (97) | |
Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 12,955 | 28,254 | |
Amortized cost | 19,858 | 26,142 | |
Unrealized gains | 293 | 352 | |
Unrealized losses | 0 | 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 | 62,668 | 64,982 | |
Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 38,214 | 71,231 | |
Total financial assets | 100,882 | 136,213 | |
Recurring | Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 48,724 | 36,728 | |
Recurring | Time deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 6,630 | ||
Recurring | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 989 | ||
Total marketable securities | 9,421 | 14,792 | |
Recurring | Corporate debt securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 8,642 | 23,315 | |
Recurring | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 12,955 | 28,254 | |
Total marketable securities | 20,151 | 26,494 | |
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 | 62,668 | 64,982 | |
Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 29,572 | 47,916 | |
Total financial assets | 92,240 | 112,898 | |
Recurring | Level 1 | Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 48,724 | 36,728 | |
Recurring | Level 1 | Time deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 6,630 | ||
Recurring | Level 1 | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 989 | ||
Total marketable securities | 9,421 | 14,792 | |
Recurring | Level 1 | Corporate debt securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 0 | 0 | |
Recurring | Level 1 | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 12,955 | 28,254 | |
Total marketable securities | 20,151 | 26,494 | |
Recurring | Level 1 | Total included in cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 62,668 | 64,982 | |
Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 8,642 | 23,315 | |
Total financial assets | 8,642 | 23,315 | |
Recurring | Level 2 | Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Recurring | Level 2 | Time deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 0 | ||
Recurring | Level 2 | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | ||
Total marketable securities | 0 | 0 | |
Recurring | Level 2 | Corporate debt securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 8,642 | 23,315 | |
Recurring | Level 2 | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Total marketable securities | 0 | 0 | |
Recurring | Level 2 | Total included in cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 0 | 0 | |
Total financial assets | 0 | 0 | |
Recurring | Level 3 | Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Recurring | Level 3 | Time deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 0 | ||
Recurring | Level 3 | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | ||
Total marketable securities | 0 | 0 | |
Recurring | Level 3 | Corporate debt securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total marketable securities | 0 | 0 | |
Recurring | Level 3 | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Total marketable securities | 0 | 0 | |
Recurring | Level 3 | Total included in cash and cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 0 | $ 0 |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities of Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Amortized cost | ||
Less than one year | $ 37,828 | |
Total | 37,828 | $ 70,917 |
Aggregate fair value | ||
Less than one year | 38,214 | |
Total | $ 38,214 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Maturities of marketable securities | $ 26.2 | |
Proceeds from sale of marketable securities | 17.7 | |
Interest earned on marketable securities (less than) | 0.3 | |
Accrued interest, after allowance for credit loss | $ 0.2 | |
Financing Receivable, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other current assets | Prepaid expenses and other current assets |
Convertible notes | 2026 Convertible Notes: | ||
Debt Instrument [Line Items] | ||
Fair value | $ 136.2 | $ 180.9 |
Convertible notes | 2028 Convertible Notes: | ||
Debt Instrument [Line Items] | ||
Fair value | $ 161.9 | $ 156.5 |
Financial Statement Component_2
Financial Statement Components - Schedule of Accounts Receivable, net of Allowances (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Financial Statement Components [Abstract] | ||
Trade accounts receivable | $ 27,021 | $ 40,332 |
Unbilled accounts receivable | 37,387 | 33,863 |
Allowance for doubtful accounts and reserve for expected credit losses | (1,382) | (1,191) |
Other accounts receivable | 198 | 1,461 |
Total accounts receivable, net | $ 63,224 | $ 74,465 |
Financial Statement Component_3
Financial Statement Components - Allowance For Doubtful Accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance, beginning of period | $ (1,191) | $ (1,661) |
Charged to bad debt expense, net of reversals | (304) | (141) |
Deductions | 148 | 111 |
Impact of foreign currency translation | (35) | 11 |
Balance, end of period | $ (1,382) | $ (1,680) |
Financial Statement Component_4
Financial Statement Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Financial Statement Components [Abstract] | ||
Accrued expense | $ 34,575 | $ 29,990 |
Accrued compensation and benefits | 9,912 | 21,595 |
Accrued sales, use, VAT and telecommunications related taxes | 7,373 | 7,799 |
Current portion of finance lease | 120 | 143 |
Income tax payable | 4,569 | 2,235 |
Other accrued expenses | 965 | 815 |
Total accrued expenses and other current liabilities | $ 57,514 | $ 62,577 |
Right-of-Use Asset and Lease _3
Right-of-Use Asset and Lease Liabilities - Additional Information (Details) ft² in Thousands | 3 Months Ended | ||||
Jun. 05, 2021 USD ($) a | Jun. 04, 2021 USD ($) a | May 27, 2021 USD ($) ft² lease | Mar. 31, 2023 USD ($) lease | Mar. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |||||
Option to extend, term (up to) | 5 years | ||||
Number of leases with early-termination option | lease | 1 | ||||
Short-term operating lease expense | $ 200,000 | $ 100,000 | |||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 0 | $ 3,453,000 | |||
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Remaining lease term (in years) | 2 months | ||||
Property | |||||
Lessee, Lease, Description [Line Items] | |||||
Land (acres) | a | 17.06 | 40 | |||
Consideration for the proposed Land purchase | $ 30,000,000 | ||||
Lease incentive | $ 12,600,000 | ||||
Property | Developer | |||||
Lessee, Lease, Description [Line Items] | |||||
Area of land sold (acres) | a | 23.76 | ||||
Proceeds from sale of land | $ 17,500,000 | ||||
Lease not yet commenced | |||||
Lessee, Lease, Description [Line Items] | |||||
Office space (in square foot) | ft² | 534 | ||||
Term of lease | 20 years | ||||
Number of option to extend | lease | 2 | ||||
Term of option to extend | 10 years | ||||
Market rental rate (as a percent) | 100% | ||||
Escrow to fund | $ 21,700,000 | ||||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 0 | ||||
Lease not yet commenced | Developer | |||||
Lessee, Lease, Description [Line Items] | |||||
Security deposit | $ 2,500,000 |
Right-of-Use Asset and Lease _4
Right-of-Use Asset and Lease Liabilities - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 1,733 | $ 2,138 |
Depreciation of assets | 41 | 50 |
Interest on lease liabilities | 4 | 3 |
Sublease income | 0 | (96) |
Total net lease cost | $ 1,778 | $ 2,095 |
Right-of-Use Asset and Lease _5
Right-of-Use Asset and Lease Liabilities - Supplemental Balance Sheet Lease Information (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Operating lease assets | $ 8,447 | $ 9,993 |
Finance lease assets | 270 | 307 |
Total lease assets | 8,717 | 10,300 |
Current | ||
Operating | 6,476 | 7,450 |
Finance | 120 | 143 |
Non-current | ||
Operating | 3,778 | 4,640 |
Finance | 144 | 172 |
Total lease liabilities | $ 10,518 | $ 12,405 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities |
Accumulated amortization | $ 20,700 | $ 17,700 |
Accumulated depreciation of assets under finance leases | $ 400 | $ 300 |
Right-of-Use Asset and Lease _6
Right-of-Use Asset and Lease Liabilities - Supplemental Cash Flow and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 1,899 | $ 2,112 |
Financing cash flows from finance leases | 55 | 48 |
Lease liabilities | $ 1,954 | $ 2,160 |
Weighted average remaining lease term (in years) | ||
Operating leases | 2 years | 2 years 7 months 20 days |
Finance leases | 2 years 4 months 20 days | 2 years 5 months 15 days |
Weighted average discount rate | ||
Operating leases | 4.60% | 4.57% |
Finance leases | 5.59% | 3.93% |
Right-of-Use Asset and Lease _7
Right-of-Use Asset and Lease Liabilities - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2023 (remaining) | $ 5,695 | |
2024 | 2,623 | |
2025 | 1,597 | |
2026 | 665 | |
Total lease payments | 10,580 | |
Less: imputed interest | (326) | |
Total lease obligations | 10,254 | |
Less: current obligations | (6,476) | $ (7,450) |
Long-term lease obligations | 3,778 | 4,640 |
Finance Leases | ||
2023 (remaining) | 101 | |
2024 | 108 | |
2025 | 54 | |
2026 | 21 | |
Total lease payments | 284 | |
Less: imputed interest | (20) | |
Total lease obligations | 264 | |
Less: current obligations | (120) | (143) |
Long-term lease obligations | $ 144 | $ 172 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 178,119 | $ 171,798 |
Less—accumulated depreciation | (76,044) | (72,045) |
Total property, plant and equipment, net | 102,075 | 99,753 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 16,768 | 16,494 |
Computer and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 14,702 | 14,160 |
Telecommunications equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 79,713 | 80,251 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 7,216 | 6,410 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 8,378 | 7,051 |
Internal-use software development | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 25,451 | 23,677 |
Automobile | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 675 | 665 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 25,216 | $ 23,090 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Capitalized software development costs, additions | $ 1.7 | $ 0.7 | |
Amortization of capitalized software development costs | 0.7 | $ 0.5 | |
Capitalized implementation costs related to cloud computing arrangements | 0.3 | ||
Cost of assets under finance leases | 0.7 | ||
Accumulated depreciation of assets under finance leases | 0.4 | $ 0.3 | |
Prepaid expenses and other current assets | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized implementation costs related to cloud computing arrangements | 0.2 | ||
Other long-term assets | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized implementation costs related to cloud computing arrangements | $ 0.1 |
Property, Plant and Equipment_3
Property, Plant and Equipment - Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | $ 4,620 | $ 4,604 |
Cost of revenue | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | 3,529 | 3,376 |
Research and development | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | 512 | 592 |
Sales and marketing | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | 309 | 334 |
General and administrative | ||
Property, Plant and Equipment [Line Items] | ||
Total depreciation expense | $ 270 | $ 302 |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | $ (49,593) | $ (44,637) |
Net Carrying Value | 175,618 | |
Gross Amount | 225,835 | 222,007 |
Net Carrying Value | 176,242 | 177,370 |
Licenses, indefinite lived | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Licenses, indefinite lived | 624 | 624 |
Customer relationships | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Amount | 143,795 | 141,146 |
Accumulated Amortization | (27,773) | (25,037) |
Net Carrying Value | $ 116,022 | $ 116,109 |
Customer relationships | Minimum | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Amortization Period | 15 years | 15 years |
Customer relationships | Maximum | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Amortization Period | 20 years | 20 years |
Developed technology | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Amount | $ 78,588 | $ 77,409 |
Accumulated Amortization | (18,992) | (16,772) |
Net Carrying Value | $ 59,596 | $ 60,637 |
Amortization Period | 10 years | 10 years |
Other, definite lived | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Amount | $ 2,828 | $ 2,828 |
Accumulated Amortization | (2,828) | (2,828) |
Net Carrying Value | $ 0 | $ 0 |
Other, definite lived | Minimum | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Amortization Period | 2 years | 2 years |
Other, definite lived | Maximum | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Amortization Period | 7 years | 7 years |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Goodwill [Line Items] | ||
Total amortization expense | $ 4,274 | $ 4,566 |
Cost of revenue | ||
Goodwill [Line Items] | ||
Total amortization expense | 1,945 | 2,032 |
Sales and marketing | ||
Goodwill [Line Items] | ||
Total amortization expense | $ 2,329 | $ 2,534 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Weighted average useful life | 10 years 9 months 18 days |
Intangible Assets - Future Esti
Intangible Assets - Future Estimated Amortization Expense (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 (remaining) | $ 12,954 |
2024 | 17,272 |
2025 | 17,272 |
2026 | 17,272 |
2027 | 17,272 |
Thereafter | 93,576 |
Net Carrying Value | $ 175,618 |
Debt - Revolving Loan (Details)
Debt - Revolving Loan (Details) - USD ($) | Mar. 31, 2023 | Mar. 14, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | |||
Outstanding unamortized loan fees | $ 0 | $ 400,000 | |
Silicon Valley Bank Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Line of credit | $ 0 | ||
Prepaid expenses and other current assets | |||
Debt Instrument [Line Items] | |||
Outstanding unamortized loan fees | 200,000 | ||
Other long-term assets | |||
Debt Instrument [Line Items] | |||
Outstanding unamortized loan fees | $ 200,000 |
Debt - 2026 Convertible Notes (
Debt - 2026 Convertible Notes (Details) | 1 Months Ended | 3 Months Ended | ||||||
Mar. 16, 2021 | Mar. 31, 2023 USD ($) $ / shares | Feb. 28, 2020 USD ($) $ / shares | Mar. 31, 2023 USD ($) $ / shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares | Nov. 30, 2022 USD ($) | Mar. 31, 2021 $ / shares | |
Debt Instrument [Line Items] | ||||||||
Net gain on extinguishment of debt | $ 12,767,000 | $ 0 | ||||||
Class A voting common stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||
2026 Convertible Notes: | ||||||||
Debt Instrument [Line Items] | ||||||||
Cash redemption price (as a percent) | 100% | |||||||
2026 Convertible Notes: | Convertible notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount | $ 175,000,000 | $ 400,000,000 | $ 175,000,000 | $ 240,000,000 | ||||
Stated rate (as a percent) | 0.25% | |||||||
Effective interest rate (as a percent) | 0.509% | |||||||
Total net proceeds | $ 344,700,000 | |||||||
Conversion price (in usd per share) | $ / shares | $ 91.03 | |||||||
Repurchased face amount | 65,000,000 | 65,000,000 | $ 160,000,000 | |||||
Repayments of debt | $ 51,300,000 | |||||||
Net gain on extinguishment of debt | $ 12,800,000 | |||||||
2026 Convertible Notes: | Convertible notes | Class A voting common stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Conversion ratio | 0.0109857 | 0.0109857 | 0.0109857 |
Debt - 2028 Convertible Notes (
Debt - 2028 Convertible Notes (Details) | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2021 USD ($) $ / shares | Mar. 31, 2023 USD ($) $ / shares | Mar. 31, 2022 | Dec. 31, 2022 USD ($) $ / shares | Feb. 28, 2020 $ / shares | |
Class A voting common stock | |||||
Debt Instrument [Line Items] | |||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
2028 Convertible Notes: | Convertible notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ | $ 250,000,000 | $ 250,000,000 | $ 250,000,000 | ||
Stated rate (as a percent) | 0.50% | ||||
Total net proceeds | $ | $ 217,000,000 | ||||
Effective interest rate (as a percent) | 0.442% | ||||
Conversion price (in usd per share) | $ / shares | $ 179.27 | ||||
2028 Convertible Notes: | Convertible notes | Class A voting common stock | |||||
Debt Instrument [Line Items] | |||||
Conversion ratio | 0.0055781 | 0.0055781 | 0.0055781 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - Convertible notes - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2021 | Feb. 28, 2020 |
Debt Instrument [Line Items] | ||||
Total net carrying amount | $ 417,085,000 | $ 480,546,000 | ||
2026 Convertible Notes: | ||||
Debt Instrument [Line Items] | ||||
Principal | 175,000,000 | 240,000,000 | $ 400,000,000 | |
Unamortized debt issuance costs | (2,533,000) | (3,805,000) | ||
Total net carrying amount | 172,467,000 | 236,195,000 | ||
2028 Convertible Notes: | ||||
Debt Instrument [Line Items] | ||||
Principal | 250,000,000 | 250,000,000 | $ 250,000,000 | |
Unamortized debt issuance costs | (5,382,000) | (5,649,000) | ||
Total net carrying amount | $ 244,618,000 | $ 244,351,000 |
Debt - Interest Income and Inte
Debt - Interest Income and Interest Expense Disclosure (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Debt Instrument [Line Items] | ||
Total interest expense | $ 1,013 | $ 1,323 |
2026 Convertible Notes: | ||
Debt Instrument [Line Items] | ||
Contractual interest expense | 138 | 250 |
Amortization of debt issuance costs | 296 | 495 |
Total interest expense | 434 | 745 |
2028 Convertible Notes: | ||
Debt Instrument [Line Items] | ||
Contractual interest expense | 313 | 313 |
Amortization of debt issuance costs | 266 | 265 |
Total interest expense | $ 579 | $ 578 |
Debt - Convertible Senior Notes
Debt - Convertible Senior Notes and Capped Call Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 16, 2021 | Feb. 28, 2020 |
Debt Instrument [Line Items] | ||
Net cost of capped call purchase | $ 25,500 | $ 43,320 |
Class A voting common stock | ||
Debt Instrument [Line Items] | ||
Capped call shares (in shares) | 1,394,525 | 4,394,276 |
Convertible notes | 2026 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Initial conversion strike price (in usd per share) | $ 91.03 | |
Initial cap price (in usd per share) | $ 137.40 | |
Convertible notes | 2028 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Initial conversion strike price (in usd per share) | $ 179.27 | |
Initial cap price (in usd per share) | $ 260.76 |
Geographic Information - Reconc
Geographic Information - Reconciliation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Assets | $ 861,122 | $ 929,318 | |
Revenue | 137,844 | $ 131,364 | |
North America | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 115,709 | 109,935 | |
Rest of World | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Assets | 9,000 | $ 11,900 | |
Revenue | $ 22,135 | $ 21,429 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Equity [Abstract] | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) | Mar. 31, 2023 vote $ / shares shares | Dec. 31, 2022 vote $ / shares shares | Mar. 31, 2021 $ / shares | Feb. 28, 2020 $ / shares |
Class A voting common stock | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock voting rights | vote | 1 | 1 | ||
Common stock, shares issued (in shares) | 23,530,600 | 23,379,000 | ||
Common stock, shares outstanding (in shares) | 23,530,600 | 23,379,000 | ||
Class B voting common stock | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 | ||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Common stock voting rights | vote | 10 | 10 | ||
Common stock, shares issued (in shares) | 1,965,170 | 1,965,170 | ||
Common stock, shares outstanding (in shares) | 1,965,170 | 1,965,170 |
Stockholders' Equity - Reserved
Stockholders' Equity - Reserved Shares of Common Stock for Issuance (Details) - shares | May 18, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | |||
Common stock reserved for future issuance (in shares) | 5,663,278 | 4,646,215 | |
Forecast | |||
Class of Stock [Line Items] | |||
Increase in shares available for grant (in shares) | 2,500,000 | ||
Stock options issued and outstanding | |||
Class of Stock [Line Items] | |||
Common stock reserved for future issuance (in shares) | 136,479 | 159,741 | |
Nonvested restricted stock units issued and outstanding | |||
Class of Stock [Line Items] | |||
Common stock reserved for future issuance (in shares) | 2,475,656 | 2,607,106 | |
Stock-based awards available for grant under the 2017 Plan (1) | |||
Class of Stock [Line Items] | |||
Common stock reserved for future issuance (in shares) | 3,051,143 | 1,879,368 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Number of options outstanding | ||
Beginning balance (in shares) | shares | 159,741 | |
Granted (in shares) | shares | 0 | |
Exercised (in shares) | shares | (22,975) | |
Forfeited or cancelled (in shares) | shares | (287) | |
Ending balance (in shares) | shares | 136,479 | 159,741 |
Options vested and exercisable (in shares) | shares | 136,479 | |
Options vested and expected to vest (in shares) | shares | 136,479 | |
Weighted- average exercise price (Per share) | ||
Beginning balance (in usd per share) | $ / shares | $ 10.42 | |
Granted (in usd per share) | $ / shares | 0 | |
Exercised (in usd per share) | $ / shares | 6.74 | |
Forfeited or cancelled (in usd per share) | $ / shares | 9.16 | |
Ending balance (in usd per share) | $ / shares | 11.05 | $ 10.42 |
Weighted-average exercise price, Options vested and exercisable (in usd per share) | $ / shares | 11.05 | |
Weighted-average exercise price, Options vested and expected to vest (in usd per share) | $ / shares | $ 11.05 | |
Weighted- average remaining contract life (In years) | ||
Outstanding (in years) | 2 years 8 months 12 days | 2 years 6 months 25 days |
Options vested and exercisable at March 31, 2023 | 2 years 8 months 12 days | |
Options vested and expected to vest as of March 31, 2023 | 2 years 8 months 12 days | |
Aggregate intrinsic value (In thousands) | ||
Options outstanding | $ | $ 710 | $ 2,001 |
Options vested and exercisable at March 31, 2023 | $ | 710 | |
Options vested and expected to vest as of March 31, 2023 | $ | $ 710 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate intrinsic value of stock options exercised | $ 200,000 | $ 600,000 |
Granted (in shares) | 0 | |
Unrecognized cost for stock based compensation | $ 0 | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost related to non-vested RSUs | $ 65,500,000 | |
Unrecognized cost for stock based compensation, period for recognition (in years) | 2 years 7 months 17 days |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Activity (Details) - RSUs | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of awards outstanding | |
Beginning balance (in shares) | shares | 2,607,106 |
Granted (in shares) | shares | 76,196 |
Vested (in shares) | shares | (171,950) |
Forfeited or cancelled (in shares) | shares | (35,696) |
Ending balance (in shares) | shares | 2,475,656 |
Weighted-average grant date fair value (Per share) | |
Beginning balance (in usd per share) | $ / shares | $ 32.33 |
Granted (in usd per share) | $ / shares | 15.90 |
Vested (in usd per share) | $ / shares | 63.29 |
Forfeited or cancelled (in usd per share) | $ / shares | 27.66 |
Ending balance (in usd per share) | $ / shares | $ 29.74 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 7,378 | $ 5,346 |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 192 | 99 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 3,141 | 1,868 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 1,237 | 899 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 2,808 | $ 2,480 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | May 27, 2021 USD ($) lease | Mar. 31, 2023 USD ($) |
Lessee, Lease, Description [Line Items] | ||
Lease payments of initial term | $ 10,580 | |
Non-cancellable purchase obligation | 15,500 | |
Non-cancellable purchase obligation, fulfilled within a year | 12,100 | |
Project | ||
Lessee, Lease, Description [Line Items] | ||
Lease payments of initial term | $ 495,700 | |
Commencement date, rent abatement period | 120 days | |
Commencement delivered period | 12 months | |
Number of option to extend | lease | 2 | |
Term of option to extend | 10 years | |
Base rent percentage (as a percent) | 1.85% | |
Office Space | ||
Lessee, Lease, Description [Line Items] | ||
Lease payments of initial term | $ 14,900 | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term (in years) | 3 years 9 months |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (as a percent) | (647.60%) | (2.70%) |
Income (loss) before income taxes | $ 483 | $ (6,635) |
Related Parties (Details)
Related Parties (Details) - Relay - Master Services Agreement - Affiliated Entity - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 0.1 | $ 0.4 | |
Receivable (less than) | $ 0.1 | $ 0.1 |
Basic and Diluted Income (Los_3
Basic and Diluted Income (Loss) per Common Share - Components of Basic and Diluted Earnings per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss attribuatble to common stockholders, basic | $ 3,611,000 | $ (6,814,000) |
Net income (loss) per share: | ||
Net loss per share, basic (in usd per share) | $ 0.14 | $ (0.27) |
Net loss per share, diluted (in usd per share) | $ (0.28) | $ (0.27) |
Numerator used to compute net income (loss) per share: | ||
Net gain on extinguishment of debt | $ (12,707,000) | $ 0 |
Interest expense on convertible notes, net of taxes | 1,009,000 | 0 |
Net Income (Loss) Available to Common Stockholders, Diluted | $ (8,087,000) | $ (6,814,000) |
Weighted average number of common shares outstanding: | ||
Weighted average number of common shares outstanding, basic (in shares) | 25,448,452 | 25,220,052 |
Convertible debt conversion | 3,824,806 | 0 |
Weighted average number of common shares outstanding, diluted (in shares) | 29,273,258 | 25,220,052 |
Basic and Diluted Income (Los_4
Basic and Diluted Income (Loss) per Common Share - Schedule of Antidilutive Common Share Equivalents Excluded from Earnings Per Share (Details) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2021 $ / shares | Feb. 28, 2020 $ / shares | Mar. 31, 2023 shares | Mar. 31, 2022 shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 6,436,941 | 6,746,767 | ||
Convertible notes | 2026 Convertible Notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Conversion price (in usd per share) | $ / shares | $ 91.03 | |||
Convertible notes | 2026 Convertible Notes | Class A voting common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Conversion ratio | 0.0109857 | 0.0109857 | 0.0109857 | |
Convertible notes | 2028 Convertible Notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Conversion price (in usd per share) | $ / shares | $ 179.27 | |||
Convertible notes | 2028 Convertible Notes | Class A voting common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Conversion ratio | 0.0055781 | 0.0055781 | 0.0055781 | |
Stock options issued and outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 136,479 | 164,114 | ||
Nonvested restricted stock units issued and outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 2,475,656 | 793,848 | ||
Convertible senior notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 3,824,806 | 5,788,805 |