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SPT Sprout Social

Cover Page

Cover Page - shares3 Months Ended
Mar. 31, 2021May 03, 2021
Document Information [Line Items]
Document Type10-Q
Document Quarterly Reporttrue
Document Period End DateMar. 31,
2021
Document Transition Reportfalse
Entity File Number001-39156
Entity Registrant NameSPROUT SOCIAL, INC.
Entity Incorporation, State or Country CodeDE
Entity Tax Identification Number27-2404165
Entity Address, Address Line One131 South Dearborn St.
Entity Address, Address Line TwoSuite 700
Entity Address, City or TownChicago
Entity Address, State or ProvinceIL
Entity Address, Postal Zip Code60603
City Area Code(866)
Local Phone Number878-3231
Title of 12(b) SecurityClass A Common Stock, $0.0001 par value per share
Trading SymbolSPT
Security Exchange NameNASDAQ
Entity Current Reporting StatusYes
Entity Interactive Data CurrentYes
Entity Filer CategoryAccelerated Filer
Entity Small Businessfalse
Entity Emerging Growth Companytrue
Entity Ex Transition Periodfalse
Entity Shell Companyfalse
Entity Central Index Key0001517375
Current Fiscal Year End Date--12-31
Document Fiscal Year Focus2021
Document Fiscal Period FocusQ1
Amendment Flagfalse
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding44,510,545
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding9,081,622

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in ThousandsMar. 31, 2021Dec. 31, 2020
Current assets
Cash and cash equivalents $ 102,303 $ 114,515
Marketable securities65,490 49,364
Accounts receivable, net of allowances of $1,252 and $1,428 at March 31, 2021 and December 31, 2020, respectively15,928 17,178
Deferred commissions9,551 8,622
Prepaid expenses and other assets7,596 9,651
Total current assets200,868 199,330
Property and equipment, net14,352 14,925
Deferred commissions, net of current portion9,775 8,757
Operating lease, right-of-use assets9,942 10,132
Goodwill2,299 2,299
Intangible assets, net3,827 4,088
Other assets, net130 138
Total assets241,193 239,669
Current liabilities
Accounts payable705 1,543
Deferred revenue50,800 43,407
Operating lease liabilities2,513 2,155
Accrued wages and payroll related benefits6,370 9,885
Accrued expenses and other7,202 6,587
Total current liabilities67,590 63,577
Deferred revenue, net of current portion207 355
Operating lease liabilities, net of current portion22,987 23,638
Total liabilities90,784 87,570
Commitments and contingencies (Note 6)
Stockholders’ equity
Additional paid-in capital333,939 328,343
Treasury stock, at cost(30,125)(29,206)
Accumulated deficit(153,410)(147,043)
Total stockholders’ equity150,409 152,099
Total liabilities and stockholders’ equity241,193 239,669
Class A common stock
Stockholders’ equity
Common stock4 4
Class B common stock
Stockholders’ equity
Common stock $ 1 $ 1

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in ThousandsMar. 31, 2021Dec. 31, 2020
Allowance for doubtful accounts $ 1,252 $ 1,428
Class A common stock
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized value (in shares)1,000,000,000 1,000,000,000
Common stock, shares issued (in shares)47,199,895 46,698,354
Common stock, shares outstanding (in shares)44,387,761 43,898,850
Class B common stock
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized value (in shares)25,000,000 25,000,000
Common stock, shares issued (in shares)9,362,566 9,574,566
Common stock, shares outstanding (in shares)9,155,622 9,367,622

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Revenue
Total revenue $ 40,818 $ 30,535
Cost of revenue
Total cost of revenue9,997 8,208
Gross profit30,821 22,327
Operating expenses
Research and development8,272 7,281
Sales and marketing18,153 13,894
General and administrative10,615 12,096
Total operating expenses37,040 33,271
Loss from operations(6,219)(10,944)
Interest expense(72)(95)
Interest income52 460
Other income (expense)(119)102
Loss before income taxes(6,358)(10,477)
Income tax expense9 3
Net loss(6,367)(10,480)
Comprehensive loss $ (6,367) $ (10,480)
Net loss per share attributable to common shareholders, basic and diluted (in dollars per share) $ (0.12) $ (0.21)
Weighted-average shares outstanding used to compute net loss per share, basic and diluted (in shares)53,432,658 50,143,971
Subscription
Revenue
Total revenue $ 40,355 $ 30,329
Cost of revenue
Total cost of revenue9,705 8,086
Professional services and other
Revenue
Total revenue463 206
Cost of revenue
Total cost of revenue $ 292 $ 122

Condensed Consolidated Statem_2

Condensed Consolidated Statements Stockholders’ Equity (Unaudited) - USD ($) $ in ThousandsTotalOver-Allotment OptionVoting Common StockVoting Common StockOver-Allotment OptionAdditional Paid-in CapitalAdditional Paid-in CapitalOver-Allotment OptionTreasury StockAccumulated Deficit
Beginning balance (in shares) at Dec. 31, 201948,844,998 2,673,805
Beginning balance at Dec. 31, 2019 $ 128,130 $ 5 $ 263,943 $ (20,430) $ (115,388)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)343,682
Exercise of stock options142 142
Stock-based compensation expense3,522 3,522
Issuance of common stock from equity award settlement (in shares)504,721
Issuance of common stock from equity award settlement0
Taxes paid related to net share settlement of equity awards (in shares)159,809
Taxes paid related to net share settlement of equity awards(3,082) $ (3,082)
Proceeds from disgorgement of stockholder short-swing profits0
Issuance of common stock, net of underwriters' discounts, commissions and offering costs (in shares)629,603
Issuance of common stock, net of underwriters' discounts, commissions and offering costs $ 9,738 $ 9,738
Exercise of warrants (in shares)26,960 8,345
Exercise of warrants0 140 $ (140)
Net loss(10,480)(10,480)
Ending balance (in shares) at Mar. 31, 202050,349,964 2,841,959
Ending balance at Mar. 31, 2020127,970 $ 5 277,485 $ (23,652)(125,868)
Beginning balance (in shares) at Dec. 31, 202053,266,472 3,006,448
Beginning balance at Dec. 31, 2020152,099 $ 5 328,343 $ (29,206)(147,043)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)35,500
Exercise of stock options23 23
Stock-based compensation expense3,909 3,909
Issuance of common stock from equity award settlement (in shares)241,411
Issuance of common stock from equity award settlement0
Taxes paid related to net share settlement of equity awards (in shares)12,630
Taxes paid related to net share settlement of equity awards(919) $ (919)
Proceeds from disgorgement of stockholder short-swing profits1,664 1,664
Net loss(6,367)(6,367)
Ending balance (in shares) at Mar. 31, 202153,543,383 3,019,078
Ending balance at Mar. 31, 2021 $ 150,409 $ 5 $ 333,939 $ (30,125) $ (153,410)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Cash flows from operating activities
Net loss $ (6,367) $ (10,480)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation of property and equipment737 725
Amortization of line of credit issuance costs43 65
Amortization of premium on marketable securities177 0
Amortization of acquired intangible assets261 357
Amortization of deferred commissions2,583 1,627
Amortization of right-of-use operating lease asset190 309
Stock-based compensation expense3,909 3,522
Provision for accounts receivable allowances144 910
Changes in operating assets and liabilities
Accounts receivable1,106 (2,122)
Prepaid expenses and other current assets2,152 (313)
Deferred commissions(4,529)(2,500)
Accounts payable and accrued expenses(3,738)(305)
Deferred revenue7,245 4,299
Lease liabilities(293)(597)
Net cash provided by (used in) operating activities3,620 (4,503)
Cash flows from investing activities
Purchases of property and equipment(173)(313)
Purchases of marketable securities(25,903)0
Proceeds from maturity of marketable securities9,600 0
Net cash (used in) investing activities(16,476)(313)
Cash flows from financing activities
Proceeds from underwriters' purchase of over-allotment shares, related to the Company's initial public offering, net of underwriters’ discounts and commissions0 9,954
Payments for line of credit issuance costs(124)(132)
Proceeds from exercise of stock options23 142
Proceeds from disgorgement of stockholder short-swing profits1,664 0
Employee taxes paid related to the net share settlement of stock-based awards(919)(3,082)
Net cash provided by financing activities644 6,882
Net increase (decrease) in cash and cash equivalents(12,212)2,066
Cash and cash equivalents
Beginning of period114,515 135,310
End of period102,303 137,376
Supplemental noncash disclosures
Operating lease liability arising from operating ROU asset obtained0 5,481
Noncash exercise of stock warrants0 140
Deferred offering costs, accrued but not yet paid $ 0 $ 216

Nature of Operations and Summar

Nature of Operations and Summary of Significant Accounting Policies3 Months Ended
Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations and Summary of Significant Accounting PoliciesNature of Operations and Summary of Significant Accounting Policies Nature of Operations Sprout Social, Inc. (“Sprout Social” or the “Company”), a Delaware corporation, began operating on April 21, 2010 to design, develop and operate a web-based comprehensive social media management tool enabling companies to manage and measure their online presence. Customers access their accounts online via a web-based interface or a mobile application. Some customers also purchase the Company’s professional services, which primarily consist of consulting and training services. The Company’s fiscal year end is December 31. The Company’s customers are primarily located throughout the United States, and a portion of customers are located in foreign countries. The Company is headquartered in Chicago, Illinois. Principles of Consolidation and Basis of Presentation The unaudited condensed consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The Company has prepared the unaudited condensed consolidated financial statements on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2020, and these unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the results of the interim periods presented but are not necessarily indicative of the results of operations to be anticipated for the full year or any future period. The consolidated balance sheet as of December 31, 2020 included herein was derived from the audited consolidated financial statements as of that date but does not include all disclosures including certain disclosures required by GAAP on an annual basis. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The 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 for the year ended December 31, 2020, filed with the SEC on February 24, 2021. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances, including but not limited to the potential impacts arising from the COVID-19 pandemic. As the extent and duration of the impact of the COVID-19 pandemic remains uncertain, the Company’s estimates and judgments may evolve as conditions change. The Company is not aware of any events or circumstances that would require an update to its estimates and judgments or a revision of the carrying value of its assets or liabilities as of May 5, 2021, the date of issuance of this Quarterly Report on Form 10-Q. Actual results could differ from those estimates. The Company’s most significant estimates and judgments are those related to the estimated period of benefit for incremental costs of obtaining a contract with a customer, the incremental borrowing rate for operating leases, calculation of allowance for credit losses, useful lives of long-lived assets, stock-based compensation, income taxes, commitments and contingencies and litigation, among others. Summary of Significant Accounting Policies The Company’s significant accounting policies are discussed in Note 1, “Nature of Operations and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements as of and for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 24, 2021. There have been no significant changes to these policies during the three months ended March 31, 2021. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes , which simplifies certain aspects of accounting for income taxes. The guidance is effective for interim and annual reporting periods beginning after December 15, 2020, and early adoption is permitted. The Company adopted the ASU as of January 1, 2021, and the adoption did not have a material impact on the Company’s condensed consolidated financial statements.

Revenue Recognition

Revenue Recognition3 Months Ended
Mar. 31, 2021
Revenue from Contract with Customer [Abstract]
Revenue RecognitionRevenue Recognition Disaggregation of Revenue The Company provides disaggregation of revenue based on geographic region in Note 7 and based on the subscription versus professional services and other classification on the condensed consolidated statements of operations and comprehensive loss, as it believes these best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Deferred Revenue Deferred revenue is recorded upon establishment of unconditional right to payment under non-cancelable contracts and is recognized as the revenue recognition criteria are met. The Company generally invoices customers in advance in monthly, quarterly, semi-annual and annual installments. The deferred revenue balance is influenced by several factors, including the compounding effects of renewals, invoice duration, timing and size. The amount of revenue recognized during the three months ended March 31, 2021 and 2020 that was included in deferred revenue at the beginning of each period was $18.2 million and $14.4 million, respectively. As of March 31, 2021, including amounts already invoiced and amounts contracted but not yet invoiced, $74.9 million of revenue is expected to be recognized from remaining performance obligations, of which 85% is expected to be recognized in the next 12 months, with the remainder thereafter.

Operating Leases

Operating Leases3 Months Ended
Mar. 31, 2021
Leases [Abstract]
Operating LeasesOperating Leases The Company has operating lease agreements for offices in Chicago, Illinois, and Seattle, Washington. The Chicago lease expires in January 2028 and the Seattle lease expired in July 2020. In January 2020, the Company entered a new lease agreement for an office in Seattle and this lease commenced in September 2020 and expires in January 2031. The Company’s existing operating leases require escalating monthly rental payments ranging from $72,000 to $280,000. Under the terms of the lease agreements, the Company is also responsible for its proportionate share of taxes and operating costs, which are treated as variable lease costs. The Company’s operating leases typically contain options to extend or terminate the term of the lease. The Company currently does not include any options to extend leases in its lease terms as it is not reasonably certain to exercise them. As such, it has recorded lease obligations only through the initial optional termination dates above. The following table provides a summary of operating lease assets and liabilities as of March 31, 2021 (in thousands): Assets Operating lease right-of-use assets $ 9,942 Liabilities Operating lease liabilities 2,513 Operating lease liabilities, non-current 22,987 Total operating lease liabilities $ 25,500 The following table provides information about leases on the condensed consolidated statements of operations and comprehensive loss (in thousands): Three Months Ended March 31, 2021 2020 Operating lease expense $ 499 $ 674 Variable lease expense 839 776 Sublease income — 102 Within the condensed consolidated statements of operations and comprehensive loss, operating and variable lease expense are recorded in General and administrative expenses and sublease income is recorded in Other income (expense), net. Cash payments related to operating leases for the three months ended March 31, 2021 and March 31, 2020 were $1.4 million and $1.6 million, respectively. As of March 31, 2021, the weighted-average remaining lease term is 7.7 years and the weighted-average discount rate is 5.6%. Remaining maturities of operating lease liabilities as of March 31, 2021 are as follows (in thousands): Years ending December 31, 2021 $ 2,888 2022 3,930 2023 4,021 2024 4,112 2025 4,205 Thereafter 12,292 Total future minimum lease payments $ 31,448 Less: imputed interest (5,948) Total operating lease liabilities $ 25,500

Income Taxes

Income Taxes3 Months Ended
Mar. 31, 2021
Income Tax Disclosure [Abstract]
Income TaxesIncome Taxes The provision for income taxes for interim periods is generally determined using an estimate of the Company’s annual effective tax rate, excluding jurisdictions for which no tax benefit can be recognized due to valuation allowances. The Company’s effective tax rate generally differs from the U.S. federal statutory rate primarily due to a valuation allowance related to the Company’s federal and state deferred tax assets. The Company accounts for Global Intangible Low–Taxed Income (“GILTI”) as a current-period expense when incurred. Therefore, the Company has not recorded deferred taxes for basis differences expected to reverse in the future periods. There has historically been no federal or state provision for income taxes because the Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets. For the three months ended March 31, 2021, the Company recognized an immaterial provision related to foreign income taxes.

Incentive Stock Plan

Incentive Stock Plan3 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]
Incentive Stock PlanIncentive Stock Plan Stock-based compensation expense is included in the unaudited condensed consolidated statements of operations and comprehensive loss as follows: Three Months Ended March 31, 2021 2020 (in thousands) Cost of revenue $ 184 $ 295 Research and development 717 484 Sales and marketing 1,752 469 General and administrative 1,256 2,274 Total stock-based compensation $ 3,909 $ 3,522

Commitments and Contingencies

Commitments and Contingencies3 Months Ended
Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and ContingenciesCommitments and Contingencies Contractual Obligations The Company has non-cancellable minimum guaranteed purchase commitments for data and services. Contractual commitments as of March 31, 2021 are as follows (in thousands): Years ending December 31, 2021 $ 15,365 2022 27,495 2023 15,222 2024 — 2025 — Thereafter — Total contract commitments $ 58,082 Legal Matters From time to time in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings. There were no material such matters as of and for the period ended March 31, 2021. Indemnification In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with third parties, including vendors, customers, investors and the Company’s directors and officers. Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. There were no material obligations under such indemnification agreements as of and for the period ended March 31, 2021.

Segment and Geographic Data

Segment and Geographic Data3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]
Segment and Geographic DataSegment and Geographic Data The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information for purposes of making operating decisions, assessing financial performance and allocating resources. The Company’s CODM evaluates financial information on a consolidated basis. As the Company operates as one operating segment, all required segment financial information is found in the condensed consolidated financial statements. Long-lived assets by geographical region are based on the location of the legal entity that owns the assets. As of March 31, 2021 and December 31, 2020, there were no significant long-lived assets held by entities outside of the United States. Revenue by geographical region is determined by location of the Company’s customers. Revenue from customers outside of the United States was approximately 29% for each of the three months ended March 31, 2021 and 2020, respectively. Revenue by geographical region is as follows (in thousands): Three Months Ended March 31, 2021 2020 Americas $ 32,078 $ 23,800 EMEA 6,600 5,011 Asia Pacific 2,140 1,724 Total $ 40,818 $ 30,535

Net Loss per Share

Net Loss per Share3 Months Ended
Mar. 31, 2021
Earnings Per Share [Abstract]
Net Loss per ShareNet Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of outstanding shares of common stock each period. Diluted net loss per share is calculated by giving effect to all potential dilutive common stock equivalents, which includes stock options, restricted stock units, and restricted stock awards. Because the Company incurred net losses each period, the basic and diluted calculations are the same. Basic and diluted net loss per share are the same for each class of common stock, as both Class A and Class B stockholders are entitled to the same liquidation and dividend rights. The following table presents the calculation for basic and diluted net loss per share (in thousands, except share and per share data): Three Months Ended March 31, 2021 2020 Net loss attributable to common shareholders $ (6,367) $ (10,480) Weighted average common shares outstanding 53,432,658 50,143,971 Net loss per share, basic and diluted $ (0.12) $ (0.21) The following outstanding shares of common stock equivalents were excluded from the calculation of diluted net loss per share for each period, as the impact of including them would have been anti-dilutive. March 31, 2021 2020 Stock options outstanding 125,510 833,241 RSUs 2,146,001 2,152,165 Total potentially dilutive shares 2,271,511 2,985,406

Fair Value Measurements

Fair Value Measurements3 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]
Fair Value MeasurementsFair Value MeasurementsThe Company measures certain financial assets at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows: • Level 1: Quoted prices in active markets for identical assets or liabilities. • Level 2: Observable inputs, other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3: Unobservable inputs that are supported by little or no market activity. The following tables present information about the Company’s financial assets that are measured at fair value and indicate the fair value hierarchy of the valuation inputs used (in thousands): March 31, 2021 Level 1 Level 2 Level 3 Total Marketable Securities: Corporate bonds $ — $ 19,383 $ — $ 19,383 Commercial paper — 36,075 — 36,075 U.S. Treasury securities — 10,032 — 10,032 Total assets $ — $ 65,490 $ — $ 65,490 December 31, 2020 Level 1 Level 2 Level 3 Total Marketable Securities: Corporate bonds $ — $ 22,810 $ — $ 22,810 Commercial paper — 16,477 — 16,477 U.S. Treasury securities — 10,077 — 10,077 Total assets $ — $ 49,364 $ — $ 49,364 Marketable securities are classified within Level 2 because they are valued using inputs other than quoted prices that are directly or indirectly observable in the market. The carrying amounts of certain financial instruments, including cash held in banks, cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their short-term maturities and are excluded from the fair value tables above. As of March 31, 2021 and December 31, 2020, the Company held investment-grade marketable securities that had maturities within one year and were accounted for as available-for-sale securities. There was not a significant difference between the amortized cost and fair value of these securities. The gross unrealized gains and losses associated with these securities were immaterial for the periods presented.

Related Party Transactions

Related Party Transactions3 Months Ended
Mar. 31, 2021
Related Party Transactions [Abstract]
Related Party TransactionsRelated Party TransactionsDuring the quarter ended March 31, 2021, the Company received $1.7 million in cash for the disgorgement of stockholder short-swing profits under Section 16(b) of the Exchange Act. The amount was recorded as an increase to additional paid-in capital on the condensed consolidated balance sheet.

Subsequent Events

Subsequent Events3 Months Ended
Mar. 31, 2021
Subsequent Events [Abstract]
Subsequent EventsSubsequent EventsThe Company has evaluated subsequent events after the balance sheet date through May 5, 2021, the date the financial statements were issued. Management has determined that no events or transactions have occurred subsequent to the balance sheet date that require disclosure in the financial statements.

Nature of Operations and Summ_2

Nature of Operations and Summary of Significant Accounting Policies (Policies)3 Months Ended
Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of PresentationThe unaudited condensed consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The Company has prepared the unaudited condensed consolidated financial statements on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2020, and these unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the results of the interim periods presented but are not necessarily indicative of the results of operations to be anticipated for the full year or any future period. The consolidated balance sheet as of December 31, 2020 included herein was derived from the audited consolidated financial statements as of that date but does not include all disclosures including certain disclosures required by GAAP on an annual basis. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.
Principles of ConsolidationAll significant intercompany transactions and balances have been eliminated in consolidation.
Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances, including but not limited to the potential impacts arising from the COVID-19 pandemic. As the extent and duration of the impact of the COVID-19 pandemic remains uncertain, the Company’s estimates and judgments may evolve as conditions change. The Company is not aware of any events or circumstances that would require an update to its estimates and judgments or a revision of the carrying value of its assets or liabilities as of May 5, 2021, the date of issuance of this Quarterly Report on Form 10-Q. Actual results could differ from those estimates. The Company’s most significant estimates and judgments are those related to the estimated period of benefit for incremental costs of obtaining a contract with a customer, the incremental borrowing
Recently Adopted Accounting PronouncementsRecently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes , which simplifies certain aspects of accounting for income taxes. The guidance is effective for interim and annual reporting periods beginning after December 15, 2020, and early adoption is permitted. The Company adopted the ASU as of January 1, 2021, and the adoption did not have a material impact on the Company’s condensed consolidated financial statements.
Deferred RevenueDeferred revenue is recorded upon establishment of unconditional right to payment under non-cancelable contracts and is recognized as the revenue recognition criteria are met. The Company generally invoices customers in advance in monthly, quarterly, semi-annual and annual installments. The deferred revenue balance is influenced by several factors, including the compounding effects of renewals, invoice duration, timing and size.

Operating Leases (Tables)

Operating Leases (Tables)3 Months Ended
Mar. 31, 2021
Leases [Abstract]
Summary of operating lease assets and liabilitiesThe following table provides a summary of operating lease assets and liabilities as of March 31, 2021 (in thousands): Assets Operating lease right-of-use assets $ 9,942 Liabilities Operating lease liabilities 2,513 Operating lease liabilities, non-current 22,987 Total operating lease liabilities $ 25,500
Schedule of lease costThe following table provides information about leases on the condensed consolidated statements of operations and comprehensive loss (in thousands): Three Months Ended March 31, 2021 2020 Operating lease expense $ 499 $ 674 Variable lease expense 839 776 Sublease income — 102
Schedule of remaining maturities of operating lease liabilitiesRemaining maturities of operating lease liabilities as of March 31, 2021 are as follows (in thousands): Years ending December 31, 2021 $ 2,888 2022 3,930 2023 4,021 2024 4,112 2025 4,205 Thereafter 12,292 Total future minimum lease payments $ 31,448 Less: imputed interest (5,948) Total operating lease liabilities $ 25,500

Incentive Stock Plan (Tables)

Incentive Stock Plan (Tables)3 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]
Schedule of stock-based compensation expenseStock-based compensation expense is included in the unaudited condensed consolidated statements of operations and comprehensive loss as follows: Three Months Ended March 31, 2021 2020 (in thousands) Cost of revenue $ 184 $ 295 Research and development 717 484 Sales and marketing 1,752 469 General and administrative 1,256 2,274 Total stock-based compensation $ 3,909 $ 3,522

Commitments and Contingencies (

Commitments and Contingencies (Tables)3 Months Ended
Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Schedule of contractual commitmentsContractual commitments as of March 31, 2021 are as follows (in thousands): Years ending December 31, 2021 $ 15,365 2022 27,495 2023 15,222 2024 — 2025 — Thereafter — Total contract commitments $ 58,082

Segment and Geographic Data (Ta

Segment and Geographic Data (Tables)3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]
Schedule of revenue by geographical regionRevenue by geographical region is as follows (in thousands): Three Months Ended March 31, 2021 2020 Americas $ 32,078 $ 23,800 EMEA 6,600 5,011 Asia Pacific 2,140 1,724 Total $ 40,818 $ 30,535

Net Loss per Share (Tables)

Net Loss per Share (Tables)3 Months Ended
Mar. 31, 2021
Earnings Per Share [Abstract]
Schedule of basic and diluted net loss per shareThe following table presents the calculation for basic and diluted net loss per share (in thousands, except share and per share data): Three Months Ended March 31, 2021 2020 Net loss attributable to common shareholders $ (6,367) $ (10,480) Weighted average common shares outstanding 53,432,658 50,143,971 Net loss per share, basic and diluted $ (0.12) $ (0.21)
Schedule of shares excluded from the calculation of diluted net loss per shareThe following outstanding shares of common stock equivalents were excluded from the calculation of diluted net loss per share for each period, as the impact of including them would have been anti-dilutive. March 31, 2021 2020 Stock options outstanding 125,510 833,241 RSUs 2,146,001 2,152,165 Total potentially dilutive shares 2,271,511 2,985,406

Fair Value Measurements (Tables

Fair Value Measurements (Tables)3 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]
Schedule of financial assets measured at fair valueThe following tables present information about the Company’s financial assets that are measured at fair value and indicate the fair value hierarchy of the valuation inputs used (in thousands): March 31, 2021 Level 1 Level 2 Level 3 Total Marketable Securities: Corporate bonds $ — $ 19,383 $ — $ 19,383 Commercial paper — 36,075 — 36,075 U.S. Treasury securities — 10,032 — 10,032 Total assets $ — $ 65,490 $ — $ 65,490 December 31, 2020 Level 1 Level 2 Level 3 Total Marketable Securities: Corporate bonds $ — $ 22,810 $ — $ 22,810 Commercial paper — 16,477 — 16,477 U.S. Treasury securities — 10,077 — 10,077 Total assets $ — $ 49,364 $ — $ 49,364

Revenue Recognition (Details)

Revenue Recognition (Details) - USD ($) $ in Millions3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Revenue from Contract with Customer [Abstract]
Revenue recognized previously deferred $ 18.2 $ 14.4
Revenue expected to be recognized $ 74.9
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized, percentage85.00%
Revenue, remaining performance obligation, period12 months

Operating Leases - Narrative (D

Operating Leases - Narrative (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020Dec. 31, 2020
Lessee, Lease, Description [Line Items]
Operating lease, right-of-use assets $ 9,942 $ 10,132
Operating lease liability25,500
Payments related to operating leases $ 1,400 $ 1,600
Weighted-average remaining lease term7 years 8 months 12 days
Weighted-average discount rate5.60%
Minimum
Lessee, Lease, Description [Line Items]
Monthly rental payments $ 72
Maximum
Lessee, Lease, Description [Line Items]
Monthly rental payments $ 280

Operating Leases - Summary of o

Operating Leases - Summary of operating lease assets and liabilities (Details) - USD ($) $ in ThousandsMar. 31, 2021Dec. 31, 2020
Leases [Abstract]
Operating lease, right-of-use assets $ 9,942 $ 10,132
Operating lease liabilities2,513 2,155
Operating lease liabilities, net of current portion22,987 $ 23,638
Total operating lease liabilities $ 25,500

Operating Leases - Lease cost (

Operating Leases - Lease cost (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Leases [Abstract]
Operating lease expense $ 499 $ 674
Variable lease expense839 776
Sublease income $ 0 $ 102

Operating Leases - Remaining ma

Operating Leases - Remaining maturities of operating lease liabilities (Details) $ in ThousandsMar. 31, 2021USD ($)
Leases [Abstract]
2021 $ 2,888
20223,930
20234,021
20244,112
20254,205
Thereafter12,292
Total future minimum lease payments31,448
Less: imputed interest(5,948)
Total operating lease liabilities $ 25,500

Incentive Stock Plan (Details)

Incentive Stock Plan (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation $ 3,909 $ 3,522
Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation184 295
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation717 484
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation1,752 469
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation $ 1,256 $ 2,274

Commitments and Contingencies_2

Commitments and Contingencies (Details) $ in ThousandsMar. 31, 2021USD ($)
Commitments and Contingencies Disclosure [Abstract]
2021 $ 15,365
202227,495
202315,222
20240
20250
Thereafter0
Total contract commitments $ 58,082

Segment and Geographic Data (De

Segment and Geographic Data (Details) $ in Thousands3 Months Ended
Mar. 31, 2021USD ($)segmentMar. 31, 2020USD ($)
Segment Reporting [Abstract]
Number of operating segments | segment1
Disaggregation of Revenue [Line Items]
Total revenue $ 40,818 $ 30,535
Americas
Disaggregation of Revenue [Line Items]
Total revenue32,078 23,800
EMEA
Disaggregation of Revenue [Line Items]
Total revenue6,600 5,011
Asia Pacific
Disaggregation of Revenue [Line Items]
Total revenue $ 2,140 $ 1,724
Geographic Concentration Risk | Revenue from Contract with Customer Benchmark | Outside of the United States
Disaggregation of Revenue [Line Items]
Concentration risk percentage29.00%29.00%

Net Loss per Share - Basic and

Net Loss per Share - Basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Earnings Per Share [Abstract]
Net loss attributable to common shareholders $ (6,367) $ (10,480)
Weighted average common shares outstanding (in shares)53,432,658 50,143,971
Net loss per share, basic and diluted (in dollars per share) $ (0.12) $ (0.21)
Comprehensive loss $ (6,367) $ (10,480)

Net Loss per Share - Shares exc

Net Loss per Share - Shares excluded from the calculation of diluted net loss per share (Details) - shares3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares (in shares)2,271,511 2,985,406
Stock options outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares (in shares)125,510 833,241
RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares (in shares)2,146,001 2,152,165

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in ThousandsMar. 31, 2021Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets $ 65,490 $ 49,364
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets0 0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets65,490 49,364
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets0 0
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities19,383 22,810
Corporate bonds | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities0 0
Corporate bonds | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities19,383 22,810
Corporate bonds | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities0 0
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities36,075 16,477
Commercial paper | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities0 0
Commercial paper | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities36,075 16,477
Commercial paper | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities0 0
U.S. Treasury securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities10,032 10,077
U.S. Treasury securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities0 0
U.S. Treasury securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities10,032 10,077
U.S. Treasury securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities $ 0 $ 0

Related Party Disclosures (Deta

Related Party Disclosures (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Related Party Transactions [Abstract]
Proceeds from disgorgement of stockholder short-swing profits $ 1,664 $ 0