Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 17, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-37496 | ||
Entity Registrant Name | RAPID7, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 35-2423994 | ||
Entity Address, Address Line One | 120 Causeway Street | ||
Entity Address, City or Town | Boston | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02114 | ||
City Area Code | 617 | ||
Local Phone Number | 247-1717 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | RPD | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3,860,661,578 | ||
Entity Common Stock, Shares Outstanding | 60,040,675 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement for its 2023 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K are incorporated by reference in Part III, Items 10-14 of this Annual Report on Form 10-K. | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001560327 | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | Boston, MA |
Auditor Firm ID | 185 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 207,287 | $ 164,582 |
Short-term investments | 84,162 | 58,850 |
Accounts receivable, net of allowance for credit losses of $2,299 and $1,978 at December 31, 2022 and 2021, respectively | 152,045 | 146,094 |
Deferred contract acquisition and fulfillment costs, current portion | 34,906 | 29,974 |
Prepaid expenses and other current assets | 31,907 | 33,236 |
Total current assets | 510,307 | 432,736 |
Long-term investments | 9,756 | 34,068 |
Property and equipment, net | 57,891 | 50,225 |
Operating lease right-of-use assets | 79,342 | 83,751 |
Deferred contract acquisition and fulfillment costs, non-current portion | 68,169 | 57,191 |
Goodwill | 515,631 | 515,258 |
Intangible assets, net | 101,269 | 111,591 |
Other assets | 16,626 | 11,191 |
Total assets | 1,358,991 | 1,296,011 |
Current liabilities: | ||
Accounts payable | 10,255 | 3,521 |
Accrued expenses | 80,306 | 82,620 |
Operating lease liabilities, current portion | 12,444 | 9,630 |
Deferred revenue, current portion | 426,599 | 372,067 |
Other current liabilities | 1,663 | 842 |
Total current liabilities | 531,267 | 468,680 |
Convertible senior notes, net | 815,948 | 812,063 |
Operating lease liabilities, non-current portion | 85,946 | 90,865 |
Deferred revenue, non-current portion | 31,040 | 33,056 |
Other long-term liabilities | 14,864 | 17,342 |
Total liabilities | 1,479,065 | 1,422,006 |
Stockholders’ equity (deficit): | ||
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at December 31, 2022 and 2021; 0 shares issued and outstanding at December 31, 2021 and 2020 | 0 | 0 |
Common stock, $0.01 par value per share; 100,000,000 shares authorized at December 31, 2022 and 2021; 60,206,277 and 58,181,816 shares issued at December 31, 2022 and 2021, respectively; 59,719,469 and 57,695,008 shares outstanding at December 31, 2022 and 2021, respectively | 597 | 577 |
Treasury stock, at cost, 486,808 shares at December 31, 2022 and 2021 | (4,764) | (4,764) |
Additional paid-in-capital | 746,249 | 615,032 |
Accumulated other comprehensive loss | (1,411) | (812) |
Accumulated deficit | (860,745) | (736,028) |
Total stockholders’ equity (deficit) | (120,074) | (125,995) |
Total liabilities and stockholders’ equity (deficit) | $ 1,358,991 | $ 1,296,011 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 2,299 | $ 1,978 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 60,206,277 | 58,181,816 |
Common stock, shares outstanding (in shares) | 59,719,469 | 57,695,008 |
Treasury Stock (in shares) | 486,808 | 486,808 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue: | |||
Total revenue | $ 685,083 | $ 535,404 | $ 411,486 |
Cost of revenue: | |||
Total cost of revenue | 214,349 | 168,948 | 121,517 |
Total gross profit | 470,734 | 366,456 | 289,969 |
Operating expenses: | |||
Research and development | 189,970 | 160,779 | 108,568 |
Sales and marketing | 307,409 | 247,453 | 195,981 |
General and administrative | 84,969 | 78,289 | 59,519 |
Total operating expenses | 582,348 | 486,521 | 364,068 |
Loss from operations | (111,614) | (120,065) | (74,099) |
Other income (expense), net: | |||
Interest income | 1,813 | 365 | 1,454 |
Interest expense | (10,982) | (14,292) | (24,137) |
Other income (expense), net | (1,522) | (1,921) | (81) |
Loss before income taxes | (122,305) | (135,913) | (96,863) |
Provision for income taxes | 2,412 | 10,421 | 1,986 |
Net loss | $ (124,717) | $ (146,334) | $ (98,849) |
Net loss per share, basic (in dollars per share) | $ (2.13) | $ (2.65) | $ (1.94) |
Net loss per share, diluted (in dollars per share) | $ (2.13) | $ (2.65) | $ (1.94) |
Weighted-average common shares outstanding, basic (in Shares) | 58,552,065 | 55,270,998 | 51,036,824 |
Weighted-average common shares outstanding, diluted (in Shares) | 58,552,065 | 55,270,998 | 51,036,824 |
Products | |||
Revenue: | |||
Total revenue | $ 647,535 | $ 500,843 | $ 382,922 |
Cost of revenue: | |||
Total cost of revenue | 182,212 | 140,773 | 96,864 |
Professional services | |||
Revenue: | |||
Total revenue | 37,548 | 34,561 | 28,564 |
Cost of revenue: | |||
Total cost of revenue | $ 32,137 | $ 28,175 | $ 24,653 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (124,717) | $ (146,334) | $ (98,849) |
Other comprehensive (loss) income: | |||
Change in fair value of cash flow hedges | (3,874) | (86) | (170) |
Adjustment for net losses (gains) realized on cash flow hedges and included in net loss | 4,053 | 0 | (21) |
Total change in unrealized gains (losses) on cash flow hedges | 179 | (86) | (191) |
Change in unrealized (losses) gains on investments | (778) | (1,043) | 432 |
Adjustment for net gains realized and included in net loss | 0 | (137) | 0 |
Total change in unrealized gains (losses) on cash flow hedges | (778) | (1,180) | 432 |
Total other comprehensive (loss) income | (599) | (1,266) | 241 |
Comprehensive loss | $ (125,316) | $ (147,600) | $ (98,608) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common stock | Treasury stock | Additional paid-in-capital | Additional paid-in-capital Cumulative Effect, Period of Adoption, Adjustment | Accumulated other comprehensive loss | Accumulated deficit | Accumulated deficit Cumulative Effect, Period of Adoption, Adjustment |
Beginning Balance (in shares) at Dec. 31, 2019 | 49,911,000 | ||||||||
Treasury stock, beginning balance (in shares) at Dec. 31, 2019 | 487,000 | ||||||||
Beginning Balance at Dec. 31, 2019 | $ 83,168 | $ 499 | $ (4,764) | $ 605,650 | $ 213 | $ (518,430) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock-based compensation expense | 61,419 | 61,419 | |||||||
Issuance of common stock under employee stock purchase plan (in shares) | 233,000 | ||||||||
Issuance of common stock under employee stock purchase plan | 7,082 | $ 2 | 7,080 | ||||||
Vesting of restricted stock units (in shares) | 1,451,000 | ||||||||
Vesting of restricted stock units | 0 | $ 15 | (15) | ||||||
Shares withheld for employee taxes (in shares) | (154,000) | ||||||||
Shares withheld for employee taxes | (8,921) | $ (2) | (8,919) | ||||||
Issuance of common stock upon exercise of stock options (in shares) | 784,000 | ||||||||
Issuance of common stock upon exercise of stock options | 7,819 | $ 8 | 7,811 | ||||||
Equity component of convertible senior notes, net | 46,832 | 46,832 | |||||||
Purchase of capped called related to convertible senior notes | (27,255) | (27,255) | |||||||
Other comprehensive income (loss) | 241 | 241 | |||||||
Net loss | (98,849) | (98,849) | |||||||
Ending balance (in shares) at Dec. 31, 2020 | 52,225,000 | ||||||||
Treasury stock, ending balance (in shares) at Dec. 31, 2020 | 487,000 | ||||||||
Ending Balance at Dec. 31, 2020 | $ 71,536 | $ (71,441) | $ 522 | $ (4,764) | 692,603 | $ (99,026) | 454 | (617,279) | $ 27,585 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 [Member] | ||||||||
Stock-based compensation expense | $ 100,317 | 100,317 | |||||||
Issuance of common stock under employee stock purchase plan (in shares) | 222,000 | ||||||||
Issuance of common stock under employee stock purchase plan | 9,276 | $ 2 | 9,274 | ||||||
Vesting of restricted stock units (in shares) | 1,611,000 | ||||||||
Vesting of restricted stock units | 0 | $ 16 | (16) | ||||||
Shares withheld for employee taxes (in shares) | (157,000) | ||||||||
Shares withheld for employee taxes | (16,044) | $ (2) | (16,042) | ||||||
Issuance of common stock upon exercise of stock options (in shares) | 521,000 | ||||||||
Issuance of common stock upon exercise of stock options | 4,306 | $ 6 | 4,300 | ||||||
Purchase of capped called related to convertible senior notes | (76,020) | (76,020) | |||||||
Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes (in shares) | 2,897,000 | ||||||||
Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes | (3,065) | $ 29 | (3,094) | ||||||
Issuance of common stock in connection with inducement of convertible senior notes (in shares) | 35,000 | ||||||||
Issuance of common stock in connection with inducement of convertible senior notes | 2,740 | 2,740 | |||||||
Issuance of common stock related to acquisition (in shares) | 341,000 | ||||||||
Issuance of common stock related to acquisition | 0 | $ 4 | (4) | ||||||
Other comprehensive income (loss) | (1,266) | (1,266) | |||||||
Net loss | $ (146,334) | (146,334) | |||||||
Ending balance (in shares) at Dec. 31, 2021 | 57,695,008 | 57,695,000 | |||||||
Treasury stock, ending balance (in shares) at Dec. 31, 2021 | 486,808 | 487,000 | |||||||
Ending Balance at Dec. 31, 2021 | $ (125,995) | $ 577 | $ (4,764) | 615,032 | (812) | (736,028) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock-based compensation expense | 123,441 | 123,441 | |||||||
Issuance of common stock under employee stock purchase plan (in shares) | 218,000 | ||||||||
Issuance of common stock under employee stock purchase plan | 11,943 | $ 2 | 11,941 | ||||||
Vesting of restricted stock units (in shares) | 1,482,000 | ||||||||
Vesting of restricted stock units | 0 | $ 15 | (15) | ||||||
Shares withheld for employee taxes (in shares) | (105,000) | ||||||||
Shares withheld for employee taxes | (7,462) | $ (1) | (7,461) | ||||||
Issuance of common stock upon exercise of stock options (in shares) | 480,000 | ||||||||
Issuance of common stock upon exercise of stock options | 3,318 | $ 5 | 3,313 | ||||||
Issuance of common stock in connection with redemption, repurchase and conversion of convertible senior notes | (3) | (3) | |||||||
Issuance of common stock related to acquisition (in shares) | 33,000 | ||||||||
Issuance of common stock related to acquisition | 0 | ||||||||
Repurchase of common stock issued in relation to acquisition (in shares) | (83,000) | ||||||||
Repurchase of common stock issued in relation to acquisition | 0 | $ (1) | 1 | ||||||
Other comprehensive income (loss) | (599) | (599) | |||||||
Net loss | $ (124,717) | (124,717) | |||||||
Ending balance (in shares) at Dec. 31, 2022 | 59,719,469 | 59,720,000 | |||||||
Treasury stock, ending balance (in shares) at Dec. 31, 2022 | 486,808 | 487,000 | |||||||
Ending Balance at Dec. 31, 2022 | $ (120,074) | $ 597 | $ (4,764) | $ 746,249 | $ (1,411) | $ (860,745) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net loss | $ (124,717) | $ (146,334) | $ (98,849) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 41,038 | 33,501 | 22,631 |
Amortization of debt discount and issuance costs | 4,085 | 3,982 | 17,518 |
Stock-based compensation expense | 119,902 | 102,579 | 63,888 |
Deferred income taxes | (1,440) | 466 | 737 |
Induced conversion expense | 0 | 2,740 | 0 |
Other | (200) | 1,920 | 2,428 |
Changes in assets and liabilities: | |||
Accounts receivable | (9,050) | (25,475) | (24,380) |
Deferred contract acquisition and fulfillment costs | (15,910) | (22,526) | (13,379) |
Prepaid expenses and other assets | (2,231) | (3,355) | (8,956) |
Accounts payable | 7,977 | (2,077) | (2,394) |
Accrued expenses | 3,741 | 19,205 | 8,640 |
Deferred revenue | 52,516 | 85,562 | 37,428 |
Other liabilities | 2,493 | 3,729 | (425) |
Net cash provided by operating activities | 78,204 | 53,917 | 4,887 |
Cash flows from investing activities: | |||
Business acquisitions, net of cash acquired | 0 | (358,420) | (125,826) |
Purchases of property and equipment | (20,382) | (9,010) | (13,802) |
Capitalization of internal-use software | (17,145) | (9,854) | (6,130) |
Purchases of investments | (122,765) | (93,092) | (177,053) |
Sales and maturities of investments | 121,304 | 147,998 | 166,524 |
Other investments | (1,000) | (3,000) | 0 |
Net cash used in by investing activities | (39,988) | (325,378) | (156,287) |
Cash flows from financing activities: | |||
Proceeds from issuance of convertible senior notes, net of issuance costs of $14,976 and $7,201 for the year ended December 31, 2021 and 2020, respectively | 0 | 585,024 | 222,799 |
Purchase of capped calls related to convertible senior notes | 0 | (76,020) | (27,255) |
Payment of debt issuance costs | (71) | (300) | (440) |
Payments for redemption, repurchase and conversion of convertible senior notes | (12) | (230,000) | 0 |
Payments related to business acquisitions | (300) | (12,118) | (150) |
Taxes paid related to net share settlement of equity awards | (7,462) | (16,044) | (8,921) |
Proceeds from employee stock purchase plan | 11,943 | 9,276 | 7,082 |
Proceeds from stock option exercises | 3,318 | 4,315 | 7,810 |
Net cash provided by financing activities | 7,416 | 264,133 | 200,925 |
Effect of exchange rate changes on cash ,cash equivalents and restricted cash | (2,845) | (1,272) | 679 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 42,787 | (8,600) | 50,204 |
Cash, cash equivalents and restricted cash, beginning of period | 165,017 | 173,617 | 123,413 |
Cash, cash equivalents and restricted cash, end of period | 207,804 | 165,017 | 173,617 |
Supplemental cash flow information: | |||
Cash paid for interest on convertible senior notes | 6,675 | 7,345 | 5,463 |
Cash paid for income taxes, net of refunds | 1,571 | 3,305 | 312 |
Reconciliation of cash, cash equivalents and restricted cash: | |||
Cash and cash equivalents | 207,287 | 164,582 | 173,617 |
Restricted cash included in prepaid expenses and other assets | 517 | 435 | 0 |
Total cash, cash equivalents and restricted cash | $ 207,804 | $ 165,017 | $ 173,617 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Convertible Debt | ||
Payments of debt issuance costs | $ 14,976 | $ 7,201 |
Nature of the Business
Nature of the Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | Nature of the BusinessRapid7, Inc. and subsidiaries (“we,” “us” or “our”) are advancing security with visibility, analytics, and automation delivered through our Insight Platform. Our solutions simplify the complex, allowing security teams to work more effectively with IT and development to reduce vulnerabilities, monitor for malicious behavior, investigate and shut down attacks, and automate routine tasks. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a) Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include our results of operations and those of our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. (b) Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The management estimates include, but are not limited to the determination of standalone selling prices in revenue transactions with multiple performance obligations, the estimated period of benefit for deferred contract acquisition costs, the useful lives and recoverability of long-lived assets, the valuation for credit losses, the valuation of stock-based compensation, the fair value of assets acquired and liabilities assumed in business combinations, the incremental borrowing rate for operating leases and the valuation for deferred tax assets. We base our estimates on historical experience and on various other assumptions that we believe are reasonable. Actual results could differ from those estimates. (c) Revenue Recognition We generate revenue primarily from: (1) subscriptions from the sale of cloud-based subscriptions, managed services, term software licenses, content subscriptions and maintenance and support associated with our software licenses and (2) professional services from the sale of our deployment and training services related to our solutions, incident response services, penetration testing and security advisory services. We recognize revenue when a customer obtains control of promised products or services. The amount of revenue recognized reflects the consideration that we expect to be entitled to receive in exchange for these products or services. To achieve the core principle of this standard, we apply the following four steps: 1) Identify the contract with a customer We consider the terms and conditions of the contracts and our customary business practices in identifying our contracts. We determine we have a contract with a customer when the contract is approved, we can identify each party’s rights regarding the services to be transferred, we can identify the payment terms for the services, and we have determined the customer has the ability and intent to pay and the contract has commercial substance. We apply judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the products and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the products or services is separately identifiable from other promises in the contract. 3) Determine the transaction price The transaction price is determined based on the consideration to which we expect to be entitled in exchange for transferring products or services to the customer. Variable consideration is included in the transaction price if, in our judgment, it is probable that no significant future reversal of cumulative revenue under the contract will occur. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Examples include invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period. Sales through our channel network of distributors and resellers are generally discounted as compared to the price that we would sell to an end user. Revenue for sales through our channel network is recorded net of any distributor or reseller margin. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. The majority of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. We determine SSP of our products and services based on our overall pricing objectives using all information reasonably available to us, taking into consideration market conditions and other factors, including the geographic locations of our customers, negotiated discounts from price lists and selling method (i.e., partner or direct). When available, we use directly observable stand-alone transactions to determine SSP. When not regularly sold on a stand-alone basis, we estimate SSP for our products and services utilizing historical sales data, including discounts from list price. The historical data is aggregated and analyzed by geographic location and selling method to establish a median or average price. Once SSP is established it is applied consistently to all transactions including that product or service utilizing a portfolio approach. 4) Recognize revenue when or as we satisfy a performance obligation Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised product or service to a customer. Revenue is recognized when control of the products or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those products or services. Subscriptions Subscriptions consists of revenue from our cloud-based subscription, term software licenses, managed services offerings, content subscriptions and maintenance and support associated with our software licenses. • We generate cloud-based subscription revenue primarily from sales of subscriptions to access our cloud platform, together with related support services to our customers. These arrangements do not provide the customer with the right to take possession of our software operating on our cloud platform at any time. Instead, customers are granted continuous access to our cloud platform over the contractual period. Revenue is recognized over time on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our cloud-based subscription contracts generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable. • Managed services offerings consist of fees generated when we operate our software and provide our capabilities on behalf of our customers. Revenue is recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our managed services offerings generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable. • For our term software licenses where the utility to the customer is dependent on the continued delivery of content subscriptions, we recognize the license revenue over the contractual term of the content subscription. For our term software licenses which are not dependent on the continued delivery of content subscriptions, the license is considered distinct from the maintenance and support, and we therefore recognize revenue attributable to the license at the time of delivery. • Content subscriptions and our maintenance and support services are sold with our perpetual and term software licenses. Revenue related to our content subscriptions associated with our software licenses is recognized ratably over the contractual period. Maintenance and support services are distinct from the perpetual and term software license and revenue attributable to maintenance and support services is recognized ratably over the contractual period. Professional Services All of our professional services are considered distinct performance obligations when sold stand alone or with other products. These contracts generally have terms of one year or less. For the majority of these arrangements, revenue is recognized over time based upon the proportion of work performed to date. Contract Balances Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period consistent with the above methodology. For the year ended December 31, 2022, we recognized revenue of $400.5 million that was included in the corresponding contract liability balance at the beginning of the period presented. Deferred revenue that will be realized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as non-current. We receive payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Unbilled receivables include amounts related to our contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced. If the right to consideration is based on satisfaction of another performance obligation in the contract other than the passage of time, we would record a contract asset. As of December 31, 2022 and 2021, unbilled receivables of $1.1 million and $1.2 million, respectively, are included in prepaid expenses and other current assets in our consolidated balance sheet. As of December 31, 2022 and 2021, we have no contract assets recorded on our consolidated balance sheet. (d) Cash and Cash Equivalents We consider all highly liquid instruments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates fair value. (e) Investments Our investments consist of U.S. government agencies, corporate bonds, commercial paper and agency bonds. We classify our investments as available-for-sale and record these investments at fair value. When the fair value of an investment declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in our consolidated statements of operations. When the fair value of the investment declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in accumulated other comprehensive income (loss), and are recognized in our consolidated statement of operations only if we sell or intend to sell the security before recovery of its cost basis. Realized gains and losses are determined based on the specific identification method, and are reflected in our consolidated statements of operations. Investments with an original maturity of greater than three months at the date of purchase and less than one year from the date of the balance sheet are classified as short-term and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheet. We do not invest in any securities with contractual maturities greater than 24 months. (f) Accounts Receivable and Allowance for Credit Losses Accounts receivable are recorded at the invoiced amount, net of allowances for credit losses for any potential uncollectible amounts. We maintain an allowance for estimated credit losses resulting from the inability of our customers to make required payments. Management regularly reviews the adequacy of the allowance for credit loss based upon historical collection experience, the age of the receivable, an evaluation of each customer's expected ability to pay and current and future economic and market conditions. Additions to the allowance for credit losses are recorded in general and administrative expense in the consolidated statement of operations. Accounts receivable deemed uncollectible are charged against the allowance for credit losses. We do not have any off-balance sheet credit exposure related to our customers. (g) Concentration of Credit Risk Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, investments and derivative financial instruments. We invest only in high-quality credit instruments and our cash and cash equivalents and available for sale investments consist primarily of fixed income securities. Management believes that the financial institutions that hold our investments are financially sound and, accordingly, are subject to minimal credit risk. Deposits held with banks may exceed the amount of insurance provided on such deposits. We provide credit to customers in the normal course of business. Collateral is not required for accounts receivable, but ongoing credit evaluations of customers’ financial condition are performed. We maintain reserves for potential credit losses. No single customer, including channel partners, accounted for 10% or more of our total revenues in 2022, 2021 or 2020 or accounts receivable as of December 31, 2022 or 2021. Our derivative financial instruments expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. We mitigate this credit risk by transacting with major financial institutions with high credit ratings. (h) Deferred Contract Acquisition Costs We defer contract costs that are recoverable and incremental to obtaining customer contracts. Contract costs, which primarily consist of sales commissions, are amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. Contract costs for a new customer, upsell or cross-sell are amortized on a straight-line basis over an estimated period of benefit of five years as sales commissions on initial sales are not commensurate with sales commissions on contract renewals. We determined the estimated period of benefit by taking into consideration the contractual term and expected renewals of customer contracts, our technology and other factors, including the fact that sales commissions paid on renewals are not commensurate with commissions paid on initial sales transactions. Contract costs relating to contract renewals are deferred and amortized on a straight-line basis over the related renewal period. Contract costs for professional services arrangements are expensed as incurred in accordance with the practical expedient as the contractual period of our professional services arrangements are one year or less. We classify deferred contract costs as short-term or long-term based on when we expect to recognize the expense. Amortization expense associated with deferred contract acquisition costs is recorded to sales and marketing expense in our consolidated statements of operations. We periodically review the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. (i) Property and Equipment Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. The following table presents the useful lives of our property and equipment: Useful Lives Computer equipment and software 3 years Furniture and fixtures 3 - 5 years Leasehold improvements Shorter of the useful life of the asset or the lease term Repairs and maintenance costs are expensed as incurred. (j) Software Development Costs Software development costs associated with the development of products for sale are recorded to research and development expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs are capitalized until the product is available for release to customers. To date, the software development costs have not been capitalized as the cost incurred and time between technological feasibility and product release was insignificant. As such, these costs are expensed as incurred and recognized in research and development expenses in our consolidated statements of operations. Costs related to software developed, acquired or modified for internal use are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post implementation stages of the project are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. These capitalized costs consist of internal compensation related costs and external direct costs. Costs related to software developed for internal use are amortized over an estimated useful life of 3 years. We capitalized $17.1 million, $9.9 million and $6.1 million of costs related to software developed for internal use in the years ended December 31, 2022, 2021 and 2020, respectively. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. (k) Leases We determine whether an arrangement is or contains a lease at inception. We evaluate the classification of a lease at inception and, as necessary, at modification. Operating leases are recognized on the consolidated balance sheet as right-of-use (“ROU”) assets, lease liabilities and, if applicable, long-term lease liabilities. Operating lease ROU assets represent our right to use an underlying asset for the lease term. Operating lease liabilities represent our obligation to make payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the present value of future lease payments at the lease commencement date. The implicit rate within our operating leases are generally not determinable and therefore we use the incremental borrowing rate at the lease commencement date to determine the present value of lease payments. We determine our incremental borrowing rate for each lease using our estimated borrowing rate, adjusted for various factors including level of collateralization, term and currency to align with the terms of the lease. The operating lease ROU asset also includes any lease prepayments and initial direct costs, offset by lease incentives. Operating lease cost is recognized on a straight-line basis over the lease term. Certain of our leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain we will exercise that option. An option to terminate is considered unless it is reasonably certain we will not exercise the option. We account for lease and non-lease components as a single lease component and do not recognize operating lease ROU assets and lease liabilities for leases with a term of one year or less. (l) Impairment of Long-Lived Assets We evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. When such events or changes in circumstances occur, recoverability of these assets or asset groups is measured by a comparison of the carrying value of the assets to the future net undiscounted cash flows directly associated with the assets. If such assets or asset groups are considered to be impaired, the impairment recognized is the amount by which the carrying value exceeds the fair value of the assets or asset groups. For the year ended December 31, 2022, there was no material impairment of our long-lived assets. (m) Business Combinations We allocate the fair value of purchase consideration to the tangible asset acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair value these identifiable assets and liabilities is recorded as goodwill. Determining the fair value of the tangible assets acquired, liabilities assumed and intangible assets requires management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, cash flows that an asset is expected to generate in the future, technology migration curves, discount rates, and useful lives. While we use our best estimates and judgements, our estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of these assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the final determination of the fair value of assets acquired or liabilities assumed any subsequent adjustments are recorded to the consolidated statements of operations. Acquisition-related transaction costs are expensed as incurred. (n) Goodwill We perform an annual goodwill impairment test on the last day of each fiscal year and whenever events or changes in circumstances indicate that the carrying amount of this asset may exceed its fair value. For our goodwill impairment analysis, we operate with a single reporting unit. To test goodwill impairment, we perform a single-step goodwill impairment test to identify potential goodwill impairment. The single-step impairment test begins with an estimation of the fair value of a reporting unit. Goodwill impairment exists when the net assets of a reporting unit exceed its fair value. In performing the single step of the goodwill impairment testing and measurement process, we estimated the fair value of our single reporting unit using our market capitalization. Based upon our assessment performed as of December 31, 2022, we concluded the fair value of our single reporting unit exceeded its' carrying value and there was no impairment of goodwill. (o) Foreign Currency The functional currency of our foreign subsidiaries is the U.S. dollar. We translate all monetary assets and liabilities denominated in foreign currencies into U.S. dollars using the exchange rates in effect at the balance sheet dates and non-monetary assets and liabilities using historical exchange rates. Foreign currency denominated expenses are re-measured using the average exchange rates for the period. Foreign currency transaction and re-measurement gains and losses are included in other income (expense), net. In 2022, foreign currency transaction losses were $1.4 million and foreign currency re-measurement gains (losses) were not material. In 2021, foreign currency transaction losses and foreign currency re-measurement losses were $0.3 million and $1.7 million, respectively. (p) Derivative and Hedging Activities We are exposed to currency exchange rate risk. Although the majority of our revenue is denominated in U.S. dollars, a portion of our operating expenses are denominated in foreign currencies, making them subject to fluctuations in foreign currency exchange rates. We enter into foreign currency derivative contracts, which we designate as cash flow hedges, to manage the foreign currency exchange risk associated with these expenses. Our derivative financial instruments are recorded at fair value and reported as either an asset or liability on our consolidated balance sheets. Gains or losses related to our cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) in our consolidated balance sheets and are reclassified into the financial statement line item associated with the underlying hedged transaction in our consolidated statement of operations when the underlying hedged transaction is recognized in our earnings. If it becomes probable that the hedged transaction will not occur, the cumulative unrealized gain or loss is reclassified immediately from accumulated other comprehensive income (loss) into the financial statement line item associated with the underlying hedged transaction in our consolidated statement of operations. Derivatives designated as cash flow hedges are classified in our consolidated statements of cash flow in the same manner as the underlying hedged transaction, primarily within cash flow from operating activities. As of December 31, 2022 and 2021, our cash flow hedges had contractual maturities of eighteen months or less, and as of December 31, 2022 and 2021, outstanding forward contracts had a total notional value of $44.9 million and $34.7 million, respectively. The notional value represents the gross amount of foreign currency that will be bought or sold upon maturity of the forward contract. During the years ended December 31, 2022 and 2021, all cash flow hedges were considered effective. Refer to Note 6, Fair Value Measurements, for the fair values of our outstanding derivative instruments. (q) Stock-Based Compensation Stock-based compensation expense related to our stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”) and purchase rights issued under our 2015 Employee Stock Purchase Plan (“ESPP”) is calculated based on the estimated fair value of the award on the grant date. The fair values of RSUs and PSUs are based on the value of our common stock on the date of grant. The fair values of stock options and ESPP purchase rights are estimated on the grant date using the Black-Scholes option pricing model which requires management to make a number of assumptions, including the expected life of the option, the volatility of the underlying stock, the risk-free interest rate and expected dividends. The assumptions used in our Black-Scholes option-pricing model represent management’s best estimates at the time of grant. These estimates involve a number of variables, uncertainties and assumptions and the application of management’s judgment, as they are inherently subjective. If any assumptions change, our stock-based compensation expense could be materially different in the future. The fair value is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. The actual number of PSUs earned and eligible to vest are determined based on the performance conditions defined when the awards are granted. We recognize share-based compensation expense for the PSUs on a straight-line basis over the requisite service period for each separately vesting portion of the award when it is probable that the performance conditions will be achieved. We reassess the probability of vesting at each reporting period for awards with performance conditions and adjust stock-based compensation cost based on its probability assessment. We recognize forfeitures as they occur and do not estimate a forfeiture rate when calculating the stock-based compensation expense. (r) Advertising Advertising costs are expensed as incurred, and are recorded in sales and marketing expense in our consolidated statement of operations. We incurred $22.7 million, $21.3 million and $16.4 million in advertising expense in 2022, 2021 and 2020, respectively. (s) Income Taxes Income taxes are accounted for using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for differences between the consolidated financial statements carrying amounts of assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards using enacted tax rates expected to apply to taxable income in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies. In the event that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. We recognize tax benefits from uncertain tax positions if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Interest and penalties associated with such uncertain tax positions are classified as a component of income tax expense. (t) Net Loss per Share We calculate basic net loss per share by dividing our net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive securities, including stock options, RSUs, PSUs, the impact of our ESPP, common shares issued in connection with acquisitions and the impact of our convertible senior notes (“Notes”). We intend to settle any conversion of our Notes in cash, shares, or a combination thereof. As a result of our adoption of Financial Accounting Standards Board (“FASB”) Accounting Standard Update (“ASU”) 2020-06 (“ASU 2020-06”) on January 1, 2021, the dilutive impact of the Notes for our calculation of diluted net loss per share is considered using the if-converted method. For periods prior to our January 1, 2021 adoption of ASU 2020-06, we considered the impact of the Notes on our diluted net loss per share calculation based on applying the treasury stock method as we had the ability, and intent, to settle any conversions of the Notes solely in cash at that time. Basic and diluted net loss per share was the same for all periods presented as the inclusion of all potentially dilutive securities outstanding was anti-dilutive. (u) Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires companies to apply revenue guidance to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination on the acquisition date, instead of measuring them at fair value. This standard is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. We early adopted this standard on January 1, 2022. This guidance will be applied prospectively to all business combinations that occur on or after January 1, 2022. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The following table summarizes revenue from contracts with customers for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (in thousands) Subscriptions $ 643,247 $ 492,608 $ 371,975 Professional services 37,548 34,561 28,564 Other 4,288 8,235 10,947 Total revenue $ 685,083 $ 535,404 $ 411,486 The following table summarizes the revenue by region based on the shipping address of customers who have contracted to use our product or service for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (in thousands) United States $ 515,894 $ 414,856 $ 329,753 All other 169,189 120,548 81,733 Total revenue $ 685,083 $ 535,404 $ 411,486 Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2022. The estimated revenues do not include unexercised contract renewals. Next Twelve Months Thereafter (in thousands) Subscriptions $ 478,174 $ 191,817 Professional services 17,404 4,496 Other 462 131 Total $ 496,040 $ 196,444 The following table summarizes the activity of the deferred contract acquisition and fulfillment costs for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 (in thousands) Beginning balance $ 87,165 $ 64,639 Capitalization of contract acquisition and fulfillment costs 51,054 48,951 Amortization of deferred contract acquisition and fulfillment costs (35,144) (26,425) Ending balance $ 103,075 $ 87,165 |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations IntSights Cyber Intelligence Ltd. On July 16, 2021, we acquired IntSights Cyber Intelligence Ltd. (“IntSights”), a provider of contextualized external threat intelligence and proactive threat remediation, for a purchase price with an aggregate fair value of $322.3 million. The purchase consideration consisted of $319.2 million in cash paid at closing, $3.4 million in deferred cash payments and a $0.3 million receivable for purchase price adjustments. The deferred cash payments were held by us to satisfy indemnification obligations and certain post-closing purchase price adjustments for a period of eighteen months from the acquisition date and were paid in January 2023. The assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The excess of the purchase price over the assets acquired and liabilities assumed was recorded as goodwill. The fair value of net assets acquired, goodwill and intangible assets were $61.1 million, $260.9 million and $65.2 million, respectively. The goodwill was allocated to our one reporting unit. The acquired goodwill and intangible assets were not deductible for tax purposes. Velocidex Enterprises Pty Ltd On April 12, 2021, we acquired Velocidex Enterprises Pty Ltd (“Velocidex”), a leading open-source technology and community used for endpoint monitoring, digital forensics, and incident response. The purchase price consisted of $2.7 million paid in cash and $0.3 million in deferred cash payments paid in April 2022. The purchase price was allocated to developed technology intangible asset which has an estimated useful life of 6 years. Alcide.IO Ltd. On January 28, 2021, we acquired Alcide.IO Ltd. (“Alcide”), a leading provider of Kubernetes security, for a purchase price of $50.5 million, which was funded in cash. The assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The excess of the purchase price over the assets acquired and liabilities assumed was recorded as goodwill. The fair value of net assets acquired, goodwill and intangible assets were $(0.7) million, $40.8 million and $10.4 million, respectively. The goodwill was allocated to our one reporting unit. The acquired goodwill and intangible assets were not deductible for tax purposes. Divvy Cloud Corporation On May 1, 2020, we acquired Divvy Cloud Corporation (“DivvyCloud”), a Cloud Security Posture Management (“CSPM”) company, for a purchase price with an aggregate fair value of $137.8 million. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Our investments, which are all classified as available-for-sale, consisted of the following: As of December 31, 2022 Amortized Gross Gross Fair Value (in thousands) Description: U.S. Government agencies $ 66,234 $ 4 $ (545) $ 65,693 Corporate bonds 14,351 — (230) 14,121 Commercial paper 7,944 — — 7,944 Agency bonds 6,231 — (71) 6,160 Total $ 94,760 $ 4 $ (846) $ 93,918 As of December 31, 2021 Amortized Gross Gross Fair Value (in thousands) Description: Commercial paper $ 37,778 $ — $ — $ 37,778 Corporate bonds 32,059 — (32) 32,027 U.S. Government agencies 22,396 — (31) 22,365 Agency bonds 749 — (1) 748 Total $ 92,982 $ — $ (64) $ 92,918 As of December 31, 2022 and 2021, our available-for-sale investments had maturities ranging from 2 to 19 months and from 2 to 23 months, respectively. Unrealized losses related to our available-for-sale investments are due to interest rate fluctuations as opposed to credit quality. We do not intend to sell any of the securities in an unrealized loss position and it is not likely that we would be required to sell these securities before recovery of their amortized cost basis, which may be at maturity. We did not recognize any credit losses related to our available-for-sale investments during the years ended December 31, 2022 and 2021. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We measure certain financial assets and liabilities 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 : Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 : Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or 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 and that are significant to the fair value of the asset or liability. We consider an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and consider an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. The following table presents our financial assets measured and recorded at fair value on a recurring basis using the above input categories: As of December 31, 2022 Level 1 Level 2 Level 3 Total (in thousands) Description: Assets: Money market funds $ 88,039 $ — $ — $ 88,039 Corporate bonds — 14,121 — 14,121 Commercial paper — 7,944 — 7,944 U.S. Government agencies 65,693 — — 65,693 Agency bonds — 6,160 — 6,160 Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets and other assets) — 988 — 988 Total assets $ 153,732 $ 29,213 $ — $ 182,945 Liabilities: Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other long term liabilities) $ — $ 1,559 $ — $ 1,559 Total liabilities $ — $ 1,559 $ — $ 1,559 As of December 31, 2021 Level 1 Level 2 Level 3 Total (in thousands) Description: Assets: Money market funds $ 86,835 $ — $ — $ 86,835 Commercial paper — 37,778 — 37,778 Corporate bonds — 32,027 — 32,027 U.S. Government agencies 22,365 — — 22,365 Agency bonds — 748 — 748 Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets and other assets) — 73 — 73 Total assets $ 109,200 $ 70,626 $ — $ 179,826 Liabilities: Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other long-term liabilities) 823 823 Total liabilities $ — $ 823 $ — $ 823 As of December 31, 2022, the fair value of our 2.25% and 0.25% convertible senior notes due 2025 and 2027, respectively, as further described in Note 10, Debt, |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and consist of the following: As of December 31, 2022 2021 (in thousands) Computer equipment and software $ 24,568 $ 19,879 Furniture and fixtures 11,823 10,360 Leasehold improvements 66,180 51,983 Total property and equipment, gross 102,571 82,222 Less accumulated depreciation (44,680) (31,997) Total property and equipment, net $ 57,891 $ 50,225 We recorded depreciation expense of $13.6 million, $12.3 million and $11.0 million in 2022, 2021 and 2020, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill was $515.6 million and $515.3 million as of December 31, 2022 and 2021, respectively. There were no goodwill impairment charges in 2022, 2021 or 2020. The following table displays the changes in the gross carrying amount of goodwill: Amount (in thousands) Balance at December 31, 2020 $ 213,601 Alcide acquisition 40,783 IntSights acquisition 260,874 Balance at December 31, 2021 515,258 IntSights acquisition adjustments 373 Balance at December 31, 2022 $ 515,631 The following table presents details of our intangible assets which include acquired identifiable intangible assets and capitalized internal-use software costs: Weighted- As of December 31, 2022 As of December 31, 2021 Gross Carrying Accumulated Net Carrying Value Gross Carrying Accumulated Net Carrying Value (in thousands) Intangible assets subject to amortization: Developed technology 5.2 $ 122,555 $ (58,645) $ 63,910 $ 122,555 $ (40,152) $ 82,403 Customer relationships 4.5 12,000 (5,146) 6,854 12,000 (2,436) 9,564 Trade names 3.1 2,619 (1,874) 745 2,619 (1,094) 1,525 Total acquired intangible assets $ 137,174 $ (65,665) $ 71,509 $ 137,174 $ (43,682) $ 93,492 Internal-use software 3.0 43,002 (13,242) 29,760 25,857 (7,758) 18,099 Total intangible assets $ 180,176 $ (78,907) $ 101,269 $ 163,031 $ (51,440) $ 111,591 Intangible assets are expensed on a straight-line basis over the useful life of the asset. Amortization expense was $27.5 million, $21.2 million and $11.6 million in 2022, 2021 and 2020, respectively. Estimated future amortization expense of the acquired identifiable intangible assets and completed capitalized internal-use software costs as of December 31, 2022 was as follows (in thousands): 2023 $ 25,988 2024 21,283 2025 17,283 2026 12,492 2027 5,206 Total $ 82,252 The table above excludes the impact of $19.0 million of capitalized internal-use software costs for projects that have not been completed as of December 31, 2022, and therefore, we have not determined the useful life of the software, nor have all the costs associated with these projects been incurred. |
Deferred Contract Acquisition a
Deferred Contract Acquisition and Fulfillment Costs | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Contract Acquisition and Fulfillment Costs | Revenue from Contracts with Customers The following table summarizes revenue from contracts with customers for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (in thousands) Subscriptions $ 643,247 $ 492,608 $ 371,975 Professional services 37,548 34,561 28,564 Other 4,288 8,235 10,947 Total revenue $ 685,083 $ 535,404 $ 411,486 The following table summarizes the revenue by region based on the shipping address of customers who have contracted to use our product or service for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (in thousands) United States $ 515,894 $ 414,856 $ 329,753 All other 169,189 120,548 81,733 Total revenue $ 685,083 $ 535,404 $ 411,486 Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2022. The estimated revenues do not include unexercised contract renewals. Next Twelve Months Thereafter (in thousands) Subscriptions $ 478,174 $ 191,817 Professional services 17,404 4,496 Other 462 131 Total $ 496,040 $ 196,444 The following table summarizes the activity of the deferred contract acquisition and fulfillment costs for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 (in thousands) Beginning balance $ 87,165 $ 64,639 Capitalization of contract acquisition and fulfillment costs 51,054 48,951 Amortization of deferred contract acquisition and fulfillment costs (35,144) (26,425) Ending balance $ 103,075 $ 87,165 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Convertible Senior Notes In May 2020, we issued $230.0 million aggregate principal amount of convertible senior notes due May 1, 2025 (the “2025 Notes”) and in March 2021, we issued $600.0 million aggregate principal amount of convertible senior notes due March 15, 2027 (the “2027 Notes”) (collectively, the “Notes”). Further details of the Notes are as follows: Issuance Maturity Date Interest Rate First Interest Payment Date Effective Interest Rate Semi-Annual Interest Payment Dates Initial Conversion Rate per $1,000 Principal Initial Conversion Price Number of Shares (in millions) 2025 Notes May 1, 2025 2.25 % November 1, 2020 2.88 % May 1 and November 1 16.3875 $ 61.02 3.8 2027 Notes March 15, 2027 0.25 % September 15, 2021 0.67 % March 15 and September 15 9.6734 $ 103.38 5.8 Terms of the Notes The holders of the Notes may convert their respective Notes at their option at any time prior to the close of business on the business day immediately preceding their respective convertible dates only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 for the 2025 Notes and March 20, 2024 for the 2027 Notes (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the respective Notes on each applicable trading day; • during the five business day period after any five consecutive trading day period for the 2025 Notes and any ten consecutive trading day period for the 2027 Notes (measurement periods) in which the trading price (as defined in the Indentures) per $1,000 principal amount of the applicable series of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate of the respective Notes on each such trading day; • if we call any or all of the respective Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the respective redemption date; or • upon the occurrence of specified corporate events (as set forth in the Indentures). The holders may convert the 2025 Notes and the 2027 Notes at any time on or after November 1, 2024 and December 15, 2026, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the circumstances set forth above. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in the manner and subject to the terms and conditions provided in the Indentures. If we undergo a fundamental change (as set forth in the Indentures) at any time prior to the maturity date, holders of the Notes will have the right, at their option, to require us to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events that occur prior to the maturity date or following our issuance of a notice of redemption, in each case as described in the Indentures, we will increase the conversion rate for a holder of the Notes who elects to convert its Notes in connection with such a corporate event or during the related redemption period in certain circumstances. The 2025 Notes and the 2027 Notes are redeemable after May 6, 2023 and March 20, 2024 (Redemption Dates), respectively. On or after the respective Redemption Dates, we may redeem for cash all or any portion of the 2025 Notes or the 2027 Notes, at our option, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including the trading day immediately preceding, the date on which we provide the redemption notice at a redemption price equal to 100% principal amount of the 2025 Notes or the 2027 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Accounting for the Notes In accounting for the issuance of the Notes, the principal less debt issuance costs are recorded as debt on our consolidated balance sheet. The debt issuance costs are amortized to interest expense using the effective interest method over the contractual term of the Notes. The net carrying amount of the Notes as of December 31, 2022 and 2021 was as follows (in thousands): 2025 Notes 2027 Notes Principal Unamortized debt issuance costs Total Principal Unamortized debt issuance costs Total Balance at December 31, 2021 $ 230,000 $ (4,905) $ 225,095 $ 600,000 $ (13,032) $ 586,968 Amortization of debt issuance costs — 1,425 1,425 — 2,468 2,468 Conversion of Notes (8) — (8) — — — Balance at December 31.2022 $ 229,992 $ (3,480) $ 226,512 $ 600,000 $ (10,564) $ 589,436 During the six months ended June 30, 2022, the 2025 Notes were convertible at the option of the holders. During this period an immaterial principal amount of the 2025 Notes were requested for conversion and settled in cash. As of December 31, 2022, the 2025 Notes and 2027 Notes were not convertible at the option of the holder. Interest expense related to the Notes was as follows (in thousands): Year Ended December 31, 2022 2021 2020 2025 Notes 2027 Notes Total 2023 Notes 2025 Notes 2027 Notes Total 2023 Notes 2025 Notes Total Contractual interest expense $ 5,174 $ 1,502 $ 6,676 $ 950 $ 5,175 $ 1,164 $ 7,289 $ 2,875 $ 3,450 $ 6,325 Amortization of debt discount — — — — — — — 10,342 5,417 15,759 Amortization of debt issuance costs 1,425 2,468 3,893 498 1,384 1,948 3,830 1,023 637 1,660 Induced conversion expense — — — 2,740 — — 2,740 — — — Total interest expense $ 6,599 $ 3,970 $ 10,569 $ 4,188 $ 6,559 $ 3,112 $ 13,859 $ 14,240 $ 9,504 $ 23,744 During the first quarter of 2021, we used a portion of the proceeds from the issuance of the 2027 Notes, together with 2.2 million shares of our common stock, to repurchase and retire $182.6 million aggregate principal amount of the convertible senior notes due August 1, 2023 (the “2023 Notes”), and paid accrued and unpaid interest thereon. The 2023 Notes repurchase was accounted for as an induced conversion in accordance with Accounting Standards Codification 470-20, Debt with Conversion and Other Options (“ASC 470-20”). The total fair value of the additional common stock issued to induce the conversion of $2.7 million was recognized as an inducement expense and classified as a component of interest expense in our consolidated statement of operations. The remaining cash and common stock consideration issued under the original terms of the 2023 Notes was accounted for under the general conversion accounting guidance where the difference between the carrying amount of the 2023 Notes retired, including unamortized debt issuance cost of $2.7 million, and the cash consideration paid and the par amount of the common stock issued, was recorded in additional paid-in capital. In addition, during the first quarter of 2021, holders of the 2023 Notes elected to convert Notes with a principal amount of $2.0 million. Cash was paid for the principal and the excess conversion spread was paid in 23,123 shares of our common stock. During the fourth quarter of 2021, we redeemed the remaining $45.4 million aggregate principal amount outstanding of the 2023 Notes. We paid $43.4 million in cash and issued 697,262 shares of our common stock to the holders of the 2023 Notes who submitted conversion notices, and the remaining $2.0 million of 2023 Notes were redeemed in cash, plus accrued and unpaid interest. Capped Calls In connection with the offering of the 2023 Notes, the 2025 Notes and the 2027 Notes, we entered into privately negotiated capped call transactions with certain counterparties (the “2023 Capped Calls”, “2025 Capped Calls” and “2027 Capped Calls”) (collectively, the “Capped Calls”). The Capped Calls are expected to reduce potential dilution to our common stock upon conversion of a given series of notes and/or offset any cash payments that we are required to make in excess of the principal amount of converted notes of such series, as the case may be, with such reduction and/or offset subject to a cap. The Capped Calls are subject to adjustment upon the occurrence of certain specified extraordinary events affecting us, including merger events, tender offers and announcement events. 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 nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings and hedging disruptions. The following table sets forth other key terms and premiums paid for the Capped Calls related to each series of Notes: Capped Calls Entered into in Connection with the Issuance of the 2023 Notes Capped Calls Entered into in Connection with the Issuance of the 2025 Notes Capped Calls Entered into in Connection with the Issuance of the 2027 Notes Initial strike price, subject to certain adjustments $ 41.59 $ 61.02 $ 103.38 Cap price, subject to certain adjustments $ 63.98 $ 93.88 $ 159.04 Total premium paid (in thousands) $ 26,910 $ 27,255 $ 76,020 Expiration dates June 2, 2023 - July 28, 2023 March 4, 2025 - April 29, 2025 January 1, 2027 - March 11, 2027 The 2023 Capped Calls were not redeemed with the repayment of the 2023 Notes and remain outstanding. For accounting purposes, the 2023 Capped Calls, the 2025 Capped Calls and the 2027 Capped Calls are separate transactions, and not part of the terms of the 2023 Notes, the 2025 Notes and the 2027 Notes. The 2023 Capped Calls, the 2025 Capped Calls and the 2027 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. Credit Agreement In April 2020, we entered into a Credit and Security Agreement (the “Credit Agreement”), with KeyBank National Association that provided for a $30.0 million revolving credit facility, with a letter of credit sublimit of $15.0 million and an accordion feature under which we could increase the credit facility to up to $70.0 million. In May 2020, we utilized the accordion feature to increase the credit facility to $50.0 million. In December 2021, we entered into an Amendment Agreement (the “Amendment”) in respect of our Credit and Security Agreement (as amended, the “Credit Agreement”, with KeyBank National Association, to, among other things, increase the credit facility from $50.0 million to $100.0 million and extend the maturity date to December 22, 2024. The Credit Agreement provides for a $100.0 million revolving credit facility, with a letter of credit sublimit of $15.0 million, and an accordion feature under which we can increase the credit facility to up to $150.0 million. We incurred fees of $0.4 million in connection with entering into the Credit Agreement. The fees are recorded in other current assets on the consolidated balance sheet and are amortized on a straight-line basis over the contractual term of the arrangement. The commitment fee of 0.2% per annum on the unused portion of the credit facility is expensed as incurred and included within interest expense on the consolidated statement of operations. The Credit Agreement contains certain financial covenants including a requirement that we maintain specified minimum recurring revenue and liquidity amounts. The borrowings under the Credit Agreement bear interest, at our option, at a rate equal to either (i) term SOFR plus a credit spread adjustment of 0.10% per annum plus a margin of 2.50% per annum or (ii) the alternate base rate (subject to a floor), plus an applicable margin equal to 0% per annum. As of December 31, 2022, we did not have any outstanding borrowings and we were in compliance with all covenants under the Credit Agreement. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases Our leases primarily relate to office facilities that have remaining terms of up to 9.3 years, some of which include one or more options to renew with renewal terms of up to 7 years and some of which include options to terminate the leases within the next 6.8 years. All of our leases are classified as operating leases. The components of lease expense were as follows: Year Ended December 31, 2022 2021 (in thousands) Operating lease costs $ 19,829 $ 16,475 Short-term lease costs 1,820 773 Variable lease costs 8,941 5,982 Total lease costs $ 30,590 $ 23,230 Supplemental balance sheet information related to the operating leases was as follows: As of December 31, 2022 2021 Weighted average remaining lease terms (in years) - operating leases 6.6 7.2 Weighted average discount rate - operating leases 6.2 % 6.2 % Supplemental cash flow information related to leases was as follows: As of December 31, 2022 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities $ 17,572 $ 17,967 ROU assets obtained in exchange for new lease obligations $ 10,327 $ 27,331 Maturities of operating lease liabilities as of December 31, 2022 were as follows (in thousands): 2023 $ 16,665 2024 18,856 2025 18,091 2026 16,721 2027 15,908 2028 and thereafter 34,782 Total lease payments $ 121,023 Less: imputed interest (22,633) Total $ 98,390 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation ( a) General In connection with our IPO, our board of directors resolved not to make future grants under our 2011 Stock Option and Grant Plan (the “2011 Plan”). The 2011 Plan will continue to govern outstanding awards granted thereunder. The 2011 Plan provided for the grant of qualified incentive stock options and nonqualified stock options or other awards such as restricted stock awards (“RSAs”) to our employees, officers, directors and outside consultants. In July 2015, our board of directors adopted and our stockholders approved our 2015 Equity Incentive Plan (the “2015 Plan”). We initially reserved 800,000 shares of our common stock for the issuance of awards under the 2015 Plan plus the number of shares of common stock reserved for issuance under the 2011 Plan at the time the 2015 Plan became effective. The 2015 Plan also provides that (i) any shares subject to awards granted under the 2011 Plan that would have otherwise returned to the 2011 Plan (such as upon the expiration or termination of a stock award prior to vesting) will be added to, and available for issuance under, the 2015 Plan and (ii) the number of shares reserved and available for issuance under the 2015 Plan automatically increases each January 1, beginning on January 1, 2016, by 4% of the outstanding number of shares of our common stock on the immediately preceding December 31 (known as the “evergreen” provision) or such lesser number of shares as determined by our board of directors. Additionally, on October 8, 2015, our board of directors amended, the 2015 Plan to reserve an additional 1,500,000 shares of our common stock for issuance of inducement awards. As of December 31, 2022, the shares of common stock authorized to be issued under the 2015 Plan totaled 20,185,353 and there were 3,811,978 shares of common stock available for grant. We recognize stock-based compensation expense for all awards on a straight-line basis over the applicable vesting period, which is generally four years. Stock-based compensation expense for restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), stock options and purchase rights issued under our employee stock purchase plan was classified in the accompanying consolidated statements of operations as follows: Year Ended December 31, 2022 2021 2020 (in thousands) Stock-based compensation expense: Cost of revenue $ 10,367 $ 6,491 $ 4,298 Research and development 49,940 46,622 24,423 Sales and marketing 31,217 23,828 16,826 General and administrative 28,378 25,638 18,341 Total stock-based compensation expense $ 119,902 $ 102,579 $ 63,888 Our Compensation Committee approved the performance goals, targets and payout formulas for our 2022, 2021 and 2020 bonus plans, including permitting our executive officers and certain other employees the opportunity to receive payment of their earned bonuses in the form of common stock (in lieu of cash). For the years ended December 31, 2022 2021, and 2020 we recognized stock-based compensation expense related to such bonuses in the amount of $1.0 million , $4.7 million and $2.5 million, respectively, based on the performance against the pre-established corporate financial objectives as of December 31, 2022, 2021 and 2020. For all employees, including executive officers, who elect to receive their bonuses in the form of common stock (in lieu of cash), the payouts are expected to be made in the form of fully vested stock awards in the first quarter of the following year pursuant to our 2015 Equity Incentive Plan, as amended. The number of shares underlying such awards is determined by dividing the dollar value of the actual bonus award payment by the closing price per share of our common stock on the date of grant. In 2021, we accelerated the vesting of a stock award which was deemed a modification of the original award resulting in $6.1 million of incremental stock-based compensation which we recorded in the year ended December 31, 2021. (b) Restricted Stock Units and Performance-Based Restricted Stock Units RSUs and PSUs activity during 2022, 2021 and 2020 was as follows: Shares Weighted- Unvested balance as of December 31, 2019 2,936,924 $ 32.43 Granted 1,725,531 57.57 Vested (1,451,618) 33.66 Forfeited (268,923) 40.56 Unvested balance as of December 31, 2020 2,941,914 45.86 Granted 1,957,794 92.74 Vested (1,610,517) 47.00 Forfeited (510,314) 66.67 Unvested balance as of December 31, 2021 2,778,877 74.40 Granted 2,327,216 86.78 Vested (1,481,333) 69.80 Forfeited (623,317) 85.93 Unvested balance as of December 31, 2022 3,001,443 $ 83.88 As of December 31, 2022, the unrecognized compensation cost related to shares of unvested RSUs and PSUs expected to vest was $231.0 million. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.7 years. (c) Stock Options The following table summarizes information about stock option activity during the reporting periods: Shares Weighted Weighted Aggregate Outstanding as of December 31, 2019 2,735,392 $ 10.10 $ 124,007 Granted — — Exercised (783,645) 9.98 $ 39,095 Forfeited/cancelled (18,734) 17.87 Outstanding as of December 31, 2020 1,933,013 10.07 $ 154,816 Granted — — Exercised (521,326) 8.26 $ 49,522 Forfeited/cancelled (300) 7.73 Outstanding as of December 31, 2021 1,411,387 10.74 $ 150,951 Granted — — Exercised (479,223) 6.92 $ 20,764 Forfeited/cancelled (38) 21.15 Outstanding as of December 31, 2022 932,126 $ 12.70 3.19 $ 19,837 Vested and exercisable as of December 31, 2022 932,126 3.19 $ 19,837 The total fair value of stock options vested in 2022, 2021 and 2020 was $0.1 million, $0.6 million and $2.2 million, respectively. (d) Employee Stock Purchase Plan The number of shares reserved and available for issuance under our 2015 Employee Stock Purchase Plan (“ESPP”) automatically increases each January 1, beginning on January 1, 2016, by 1% of the outstanding number of shares of our common stock on the immediately preceding December 31 (known as the “evergreen” provision) or such lesser number of shares as determined by our board of directors. As of December 31, 2022, the shares of common stock authorized to be issued under the ESPP totaled 4,155,805 and there were 2,484,322 shares of common stock available for grant. Under the ESPP, employees may set aside up to 15% of their gross earnings, on an after-tax basis, to purchase our common shares at a discounted price, which is calculated at 85% of the lesser of: (i) the market value of our common stock at the beginning of each offering period and (ii) the market value of our common stock on the applicable purchase date. The fair value of shares issued under our ESPP are estimated on the grant date using the Black-Scholes option pricing model. The expected term represents the term from the first day of the offering period to the purchase dates within each offering period. The expected volatility is based on the historical volatilities of our own common stock. The risk-free interest rate is based on U.S. Treasury zero-coupon securities with maturities consistent with the estimated expected term. We have not paid dividends on our common stock nor do we expect to pay dividends in the foreseeable future. The following table reflects the assumptions used in the Black-Scholes option pricing model to calculate the expense related to the ESPP: Year Ended December 31, 2022 2021 2020 Expected term (in years) 0.5 - 1.0 0.5 - 1.0 0.5 - 1.0 Expected volatility 37 - 57% 31 - 48% 47% - 53% Risk-free interest rate 0.1 – 4.0% 0.5 – 0.7% 0.1 – 0.3% Expected dividend yield — — — Grant date fair value per share $15.50 – $29.58 $20.32 –$34.98 $9.63 – $22.30 The following table provides the number of common shares issued to employees, the purchase prices and aggregate proceeds for the purchase dates in the years ended December 31, 2022, 2021 and 2020: September 15, 2022 March 15, 2022 September 15, 2021 March 15, 2021 September 15, 2020 March 15, 2020 Common shares issued 218,314 80,747 73,676 147,837 131,585 101,806 Purchase prices $45.31 $67.59 and $81.37 $52.60 and $67.59 $28.39 and $52.60 $28.39 $32.87 Aggregate proceeds $ 6.2 million $ 5.7 million $ 4.8 million $ 4.5 million $ 3.7 million $ 3.3 million |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Loss before income taxes included in the consolidated statements of operations was as follows: Year Ended December 31, 2022 2021 2020 (in thousands) United States $ (109,381) $ (106,281) $ (72,846) Foreign (12,924) (29,632) (24,017) Loss before income taxes $ (122,305) $ (135,913) $ (96,863) Income tax expense included in the consolidated statements of operations was as follows: Year Ended December 31, 2022 2021 2020 (in thousands) Current: Federal $ 1 $ 124 $ 8 State and local 243 177 122 Foreign 3,608 9,690 1,149 Total current tax expense 3,852 9,991 1,279 Deferred: Federal 10 10 9 State and local 2 2 2 Foreign (1,452) 418 696 Total deferred tax expense (benefit) (1,440) 430 707 Income tax expense $ 2,412 $ 10,421 $ 1,986 The reconciliation of the federal statutory rate of 21% to the effective income tax rate for the years ended December 31, 2022, 2021 and 2020 was as follows: Year Ended December 31, 2022 2021 2020 Federal statutory rate 21.0 % 21.0 % 21.0 % State taxes, net of federal benefit (0.1) (0.1) (0.1) Permanent differences (0.2) (0.2) (0.7) Stock-based compensation (2.4) 14.2 12.1 Federal research and development credit 1.4 1.4 1.1 Foreign rate differential 0.1 (0.5) (1.4) Change in valuation allowance (24.8) (36.7) (30.0) Excess officers' compensation (3.1) (5.9) (3.3) Tax rate change 7.8 11.2 — Tax reserves (0.2) (3.8) — Capital gain on sale — (7.0) — Other (1.4) (1.2) (0.8) Effective income tax rate (1.9) % (7.6) % (2.1) % Net deferred tax assets and liabilities, as set forth in the table below, reflect the impact of temporary differences between the amounts of assets and liabilities recorded for financial statement purposes and such amounts measured in accordance with tax laws: As of December 31, 2022 2021 (in thousands) Deferred tax assets: Accruals and reserves $ 109 $ 157 Net operating loss carryforwards 166,173 176,417 Deferred revenue 9,597 9,518 Depreciation 3,258 3,808 Research and development credits 11,047 8,950 Capitalized research and development 40,253 — Operating lease liabilities 25,134 25,235 Stock-based compensation 9,072 7,497 Tax credits 1,148 1,148 Other 1,918 3,439 Gross deferred tax assets 267,709 236,169 Valuation allowance (230,205) (187,397) Total deferred tax assets 37,504 48,772 Deferred tax liabilities: Intangible assets — (15,957) Operating lease ROU assets (20,159) (20,921) Deferred contract acquisition and fulfillment costs (22,664) (18,278) Other (55) (636) Total deferred tax liabilities (42,878) (55,792) Net deferred tax liabilities $ (5,374) $ (7,020) Beginning January 1, 2022, the Tax Cuts and Jobs Act (the "Tax Act”) eliminated the option to deduct research and development expenditures in the current year and requires taxpayers to capitalize such expenses pursuant to Internal Revenue Code (“IRC”) Section 174. The capitalized expenses are amortized over a 5-year period for domestic expenses and a 15-year period for foreign expenses. We have included the impact of this provision, which results in additional deferred tax assets of approximately $37.1 million as of December 31, 2022. As of December 31, 2022, we have evaluated the need for a valuation allowance on deferred tax assets. In assessing whether the deferred tax assets are realized, management considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Due to our history of generating losses in the United States, the United Kingdom and Ireland, we continue to record a full valuation allowance against our deferred tax assets in these jurisdictions. If we achieve future profitability, a significant portion of these deferred tax assets could be available to offset future income taxes. The valuation allowance increased by $42.8 million for the year ended December 31, 2022, primarily due to additional deferred tax assets established in the United States related to Section 174 R&D Capitalization. We plan to permanently reinvest the undistributed earnings of our foreign subsidiaries. If we repatriate these earnings, we may be required to pay U.S. state and local taxes, as well as foreign withholding taxes. As of December 31, 2022, we had federal and state net operating loss carryforwards of $450.5 million and $345.4 million, respectively. Of our federal net operating losses, $389.7 million will carry forward indefinitely. The remaining federal and state net operating loss carryforwards expire at various dates beginning in 2023. As of December 31, 2022, we had foreign net operating loss carryforwards of $246.3 million that can be carried forward indefinitely. We also had federal, state and international research and development credit carryforwards of $7.7 million, $3.1 million and $0.2 million as of December 31, 2022, respectively. These credit carryforwards expire at various dates beginning in 2023. A U.S. corporation’s ability to utilize its net operating loss carryforwards is limited under Section 382 of the Internal Revenue Code of 1986, as amended, if the corporation undergoes an ownership change by which one or more stockholders or groups of stockholders that own at least 5% of the company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. We experienced an ownership change, as defined in Section 382, in January 2018. As such, we are currently subject to the annual limitation under Sections 382 and 383 of the Internal Revenue Code. We will not be precluded from realizing the net operating loss carryforwards and tax credits but may be limited in the amount we could utilize in any given tax year in the event that the federal and state taxable income exceeds the limitation imposed by Section 382. The amount of the annual limitation is determined based on our value immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. We file income tax returns in all jurisdictions in which we operate. In the normal course of business, we are subject to examination by federal, state, and foreign tax authorities, where applicable. The statute of limitations for these jurisdictions is generally three We have established reserves to provide for additional income taxes that management believes will more likely than not be due in future years. The reserves have been established based upon our assessment of the potential exposure. Changes in our reserve for unrecognized income tax benefits for the years ended December 31, 2022 was as follows (in thousands): Balance at December 31, 2021 $ 5,041 Additions based on current year tax provisions — Balance at December 31, 2022 $ 5,041 We recorded $0.2 million of interest in 2022 related to uncertain tax positions. During the next twelve months, we do not expect any change to our uncertain tax positions other than the accrual of interest in the normal course of business. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The following table summarizes the computation of basic and diluted net loss per share of our common stock for 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (in thousands, except share and per share data) Numerator: Net loss $ (124,717) $ (146,334) $ (98,849) Denominator: Weighted-average common shares outstanding, basic and diluted 58,552,065 55,270,998 51,036,824 Net loss per share, basic and diluted $ (2.13) $ (2.65) $ (1.94) We intend to settle any conversion of our 2025 Notes and 2027 Notes in cash, shares, or a combination thereof. As a result of our adoption of ASU 2020-06 on January 1, 2021, the dilutive impact of the Notes for our calculation of diluted net income (loss) per share is considered using the if-converted method. For periods prior to our January 1, 2021 adoption of ASU 2020-06, we considered the impact of the Notes on our diluted net income (loss) per share calculation based on applying the treasury stock method as we had the ability, and intent, to settle any conversions of the Notes solely in cash at that time. For the years ended December 31, 2022 and 2021, the shares underlying the Notes were not considered in the calculation of diluted net loss per share as the effect would have been anti-dilutive under each respective method. In connection with the issuance of the 2023 Notes, the 2025 Notes and the 2027 Notes, we entered into 2023 Capped Calls, 2025 Capped Calls and 2027 Capped Calls, which were not included for the purpose of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive. As further described in Note 10, Debt, the 2023 Capped Calls were not redeemed with the redemption of the 2023 Notes. As of December 31, 2022, the 2025 Notes and 2027 Notes were not convertible at the option of the holder. We had not received any conversion notices through the issuance date of our audited consolidated financial statements. For disclosure purposes, we have calculated the potentially dilutive effect of the conversion spread, which is included in the table below. The following potentially dilutive securities outstanding, prior to the use of the treasury stock method, have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been anti-dilutive: Year Ended December 31, 2022 2021 2020 Options to purchase common stock 932,126 1,411,387 1,933,013 Unvested restricted stock units 3,001,443 2,778,877 2,941,914 Common stock to be issued to DivvyCloud founders 33,433 66,865 200,596 Common stock issued to IntSights founders 41,194 206,608 — Shares to be issued under ESPP 106,965 36,831 101,658 Convertible senior notes 9,572,955 9,573,087 9,299,432 Total 13,688,116 14,073,655 14,476,613 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Purchase Obligations As of December 31, 2022, we have non-cancellable firm purchase commitments relating to cloud infrastructure services, including with Amazon Web Services (“AWS”), and software subscriptions. The following table presents details of the future non-cancellable purchase commitments under these agreements as of December 31, 2022 (in thousands): 2023 $ 113,953 2024 131,538 2025 39,107 2026 6,265 2027 and thereafter 3,613 Total $ 294,476 (b) Warranty We provide limited product warranties. Historically, any payments made under these provisions have been immaterial. (c) Litigation and Claims In October 2018, Finjan, Inc. (“Finjan”) filed a complaint against us and our wholly-owned subsidiary, Rapid7 LLC, in the United States District Court, District of Delaware, alleging patent infringement of seven patents held by them. In the complaint, Finjan sought unspecified damages, attorneys' fees and injunctive relief. We intend to vigorously contest Finjan's claims. The final outcome, including our liability, if any, with respect to Finjan's claims, is uncertain. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. In addition, from time to time, we may be a party to litigation or subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. (d) Indemnification Obligations We agree to standard indemnification provisions in the ordinary course of business. Pursuant to these provisions, we agree to indemnify, hold harmless and reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally our customers, in connection with any United States patent, copyright or other intellectual property infringement claim by any third party arising from the use of our products or services in accordance with the agreement or arising from our gross negligence, willful misconduct or violation of the law (provided that there is not gross or willful misconduct on the part of the other party) with respect to our products or services. The term of these indemnification provisions is generally perpetual from the time of execution of the agreement. We carry insurance that covers certain third-party claims relating to our services and limits our exposure. We have never incurred costs to defend lawsuits or settle claims related to these indemnification provisions. As permitted under Delaware law, we have entered into indemnification agreements with our officers and directors, indemnifying them for certain events or occurrences while they serve as officers or directors of the company. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit PlanIn December 2008, we established a discretionary 401(k) plan in which all full-time U.S. employees above the age 18 are eligible to participate after they have been employed for us for 90 days following the applicable date of hire. Matching contributions to the 401(k) plan can be made at our discretion. In 2022, 2021 and 2020, we made discretionary contributions of $4.3 million, $3.6 million and $2.9 million, respectively, to the plan. |
Segment Information and Informa
Segment Information and Information about Geographic Areas | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information and Information about Geographic Areas | Segment Information and Information about Geographic AreasWe operate in one segment. Our chief operating decision maker is our Chief Executive Officer, who makes operating decisions, assesses performance and allocates resources on a consolidated basis. Net revenues by geographic area presented based upon the location of the customer are as follows: Year Ended December 31, 2022 2021 2020 (in thousands) United States $ 515,894 $ 414,856 $ 329,753 Other 169,189 120,548 81,733 Total $ 685,083 $ 535,404 $ 411,486 Property and equipment, net by geographic area as of December 31, 2022 and 2021 is presented in the table below: As of December 31, 2022 2021 (in thousands) United States $ 41,570 $ 37,682 Other 16,321 12,543 Total $ 57,891 $ 50,225 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and ConsolidationThe accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include our results of operations and those of our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of EstimatesThe preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The management estimates include, but are not limited to the determination of standalone selling prices in revenue transactions with multiple performance obligations, the estimated period of benefit for deferred contract acquisition costs, the useful lives and recoverability of long-lived assets, the valuation for credit losses, the valuation of stock-based compensation, the fair value of assets acquired and liabilities assumed in business combinations, the incremental borrowing rate for operating leases and the valuation for deferred tax assets. We base our estimates on historical experience and on various other assumptions that we believe are reasonable. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition We generate revenue primarily from: (1) subscriptions from the sale of cloud-based subscriptions, managed services, term software licenses, content subscriptions and maintenance and support associated with our software licenses and (2) professional services from the sale of our deployment and training services related to our solutions, incident response services, penetration testing and security advisory services. We recognize revenue when a customer obtains control of promised products or services. The amount of revenue recognized reflects the consideration that we expect to be entitled to receive in exchange for these products or services. To achieve the core principle of this standard, we apply the following four steps: 1) Identify the contract with a customer We consider the terms and conditions of the contracts and our customary business practices in identifying our contracts. We determine we have a contract with a customer when the contract is approved, we can identify each party’s rights regarding the services to be transferred, we can identify the payment terms for the services, and we have determined the customer has the ability and intent to pay and the contract has commercial substance. We apply judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the products and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the products or services is separately identifiable from other promises in the contract. 3) Determine the transaction price The transaction price is determined based on the consideration to which we expect to be entitled in exchange for transferring products or services to the customer. Variable consideration is included in the transaction price if, in our judgment, it is probable that no significant future reversal of cumulative revenue under the contract will occur. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Examples include invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period. Sales through our channel network of distributors and resellers are generally discounted as compared to the price that we would sell to an end user. Revenue for sales through our channel network is recorded net of any distributor or reseller margin. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. The majority of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. We determine SSP of our products and services based on our overall pricing objectives using all information reasonably available to us, taking into consideration market conditions and other factors, including the geographic locations of our customers, negotiated discounts from price lists and selling method (i.e., partner or direct). When available, we use directly observable stand-alone transactions to determine SSP. When not regularly sold on a stand-alone basis, we estimate SSP for our products and services utilizing historical sales data, including discounts from list price. The historical data is aggregated and analyzed by geographic location and selling method to establish a median or average price. Once SSP is established it is applied consistently to all transactions including that product or service utilizing a portfolio approach. 4) Recognize revenue when or as we satisfy a performance obligation Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised product or service to a customer. Revenue is recognized when control of the products or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those products or services. Subscriptions Subscriptions consists of revenue from our cloud-based subscription, term software licenses, managed services offerings, content subscriptions and maintenance and support associated with our software licenses. • We generate cloud-based subscription revenue primarily from sales of subscriptions to access our cloud platform, together with related support services to our customers. These arrangements do not provide the customer with the right to take possession of our software operating on our cloud platform at any time. Instead, customers are granted continuous access to our cloud platform over the contractual period. Revenue is recognized over time on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our cloud-based subscription contracts generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable. • Managed services offerings consist of fees generated when we operate our software and provide our capabilities on behalf of our customers. Revenue is recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our managed services offerings generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable. • For our term software licenses where the utility to the customer is dependent on the continued delivery of content subscriptions, we recognize the license revenue over the contractual term of the content subscription. For our term software licenses which are not dependent on the continued delivery of content subscriptions, the license is considered distinct from the maintenance and support, and we therefore recognize revenue attributable to the license at the time of delivery. • Content subscriptions and our maintenance and support services are sold with our perpetual and term software licenses. Revenue related to our content subscriptions associated with our software licenses is recognized ratably over the contractual period. Maintenance and support services are distinct from the perpetual and term software license and revenue attributable to maintenance and support services is recognized ratably over the contractual period. Professional Services All of our professional services are considered distinct performance obligations when sold stand alone or with other products. These contracts generally have terms of one year or less. For the majority of these arrangements, revenue is recognized over time based upon the proportion of work performed to date. Contract Balances Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period consistent with the above methodology. For the year ended December 31, 2022, we recognized revenue of $400.5 million that was included in the corresponding contract liability balance at the beginning of the period presented. Deferred revenue that will be realized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as non-current. We defer contract costs that are recoverable and incremental to obtaining customer contracts. Contract costs, which primarily consist of sales commissions, are amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. Contract costs for a new customer, upsell or cross-sell are amortized on a straight-line basis over an estimated period of benefit of five years as sales commissions on initial sales are not commensurate with sales commissions on contract renewals. We determined the estimated period of benefit by taking into consideration the contractual term and expected renewals of customer contracts, our technology and other factors, including the fact that sales commissions paid on renewals are not commensurate with commissions paid on initial sales transactions. Contract costs relating to contract renewals are deferred and amortized on a straight-line basis over the related renewal period. Contract costs for professional services arrangements are expensed as incurred in accordance with the practical expedient as the contractual period of our professional services arrangements are one year or less. We classify deferred contract costs as short-term or long-term based on when we expect to recognize the expense. Amortization expense associated with deferred contract acquisition costs is recorded to sales and marketing expense in our consolidated statements of operations. We periodically review the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. |
Cash and Cash Equivalents | Cash and Cash EquivalentsWe consider all highly liquid instruments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates fair value. |
Investments | Investments Our investments consist of U.S. government agencies, corporate bonds, commercial paper and agency bonds. We classify our investments as available-for-sale and record these investments at fair value. When the fair value of an investment declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in our consolidated statements of operations. When the fair value of the investment declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in accumulated other comprehensive income (loss), and are recognized in our consolidated statement of operations only if we sell or intend to sell the security before recovery of its cost basis. Realized gains and losses are determined based on the specific identification method, and are reflected in our consolidated statements of operations. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit LossesAccounts receivable are recorded at the invoiced amount, net of allowances for credit losses for any potential uncollectible amounts. We maintain an allowance for estimated credit losses resulting from the inability of our customers to make required payments. Management regularly reviews the adequacy of the allowance for credit loss based upon historical collection experience, the age of the receivable, an evaluation of each customer's expected ability to pay and current and future economic and market conditions. Additions to the allowance for credit losses are recorded in general and administrative expense in the consolidated statement of operations. Accounts receivable deemed uncollectible are charged against the allowance for credit losses. We do not have any off-balance sheet credit exposure related to our customers. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, investments and derivative financial instruments. We invest only in high-quality credit instruments and our cash and cash equivalents and available for sale investments consist primarily of fixed income securities. Management believes that the financial institutions that hold our investments are financially sound and, accordingly, are subject to minimal credit risk. Deposits held with banks may exceed the amount of insurance provided on such deposits. We provide credit to customers in the normal course of business. Collateral is not required for accounts receivable, but ongoing credit evaluations of customers’ financial condition are performed. We maintain reserves for potential credit losses. No single customer, including channel partners, accounted for 10% or more of our total revenues in 2022, 2021 or 2020 or accounts receivable as of December 31, 2022 or 2021. Our derivative financial instruments expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. We mitigate this credit risk by transacting with major financial institutions with high credit ratings. |
Deferred Contract Acquisition Costs | Revenue Recognition We generate revenue primarily from: (1) subscriptions from the sale of cloud-based subscriptions, managed services, term software licenses, content subscriptions and maintenance and support associated with our software licenses and (2) professional services from the sale of our deployment and training services related to our solutions, incident response services, penetration testing and security advisory services. We recognize revenue when a customer obtains control of promised products or services. The amount of revenue recognized reflects the consideration that we expect to be entitled to receive in exchange for these products or services. To achieve the core principle of this standard, we apply the following four steps: 1) Identify the contract with a customer We consider the terms and conditions of the contracts and our customary business practices in identifying our contracts. We determine we have a contract with a customer when the contract is approved, we can identify each party’s rights regarding the services to be transferred, we can identify the payment terms for the services, and we have determined the customer has the ability and intent to pay and the contract has commercial substance. We apply judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the products and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the products or services is separately identifiable from other promises in the contract. 3) Determine the transaction price The transaction price is determined based on the consideration to which we expect to be entitled in exchange for transferring products or services to the customer. Variable consideration is included in the transaction price if, in our judgment, it is probable that no significant future reversal of cumulative revenue under the contract will occur. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Examples include invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period. Sales through our channel network of distributors and resellers are generally discounted as compared to the price that we would sell to an end user. Revenue for sales through our channel network is recorded net of any distributor or reseller margin. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. The majority of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. We determine SSP of our products and services based on our overall pricing objectives using all information reasonably available to us, taking into consideration market conditions and other factors, including the geographic locations of our customers, negotiated discounts from price lists and selling method (i.e., partner or direct). When available, we use directly observable stand-alone transactions to determine SSP. When not regularly sold on a stand-alone basis, we estimate SSP for our products and services utilizing historical sales data, including discounts from list price. The historical data is aggregated and analyzed by geographic location and selling method to establish a median or average price. Once SSP is established it is applied consistently to all transactions including that product or service utilizing a portfolio approach. 4) Recognize revenue when or as we satisfy a performance obligation Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised product or service to a customer. Revenue is recognized when control of the products or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those products or services. Subscriptions Subscriptions consists of revenue from our cloud-based subscription, term software licenses, managed services offerings, content subscriptions and maintenance and support associated with our software licenses. • We generate cloud-based subscription revenue primarily from sales of subscriptions to access our cloud platform, together with related support services to our customers. These arrangements do not provide the customer with the right to take possession of our software operating on our cloud platform at any time. Instead, customers are granted continuous access to our cloud platform over the contractual period. Revenue is recognized over time on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our cloud-based subscription contracts generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable. • Managed services offerings consist of fees generated when we operate our software and provide our capabilities on behalf of our customers. Revenue is recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our managed services offerings generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable. • For our term software licenses where the utility to the customer is dependent on the continued delivery of content subscriptions, we recognize the license revenue over the contractual term of the content subscription. For our term software licenses which are not dependent on the continued delivery of content subscriptions, the license is considered distinct from the maintenance and support, and we therefore recognize revenue attributable to the license at the time of delivery. • Content subscriptions and our maintenance and support services are sold with our perpetual and term software licenses. Revenue related to our content subscriptions associated with our software licenses is recognized ratably over the contractual period. Maintenance and support services are distinct from the perpetual and term software license and revenue attributable to maintenance and support services is recognized ratably over the contractual period. Professional Services All of our professional services are considered distinct performance obligations when sold stand alone or with other products. These contracts generally have terms of one year or less. For the majority of these arrangements, revenue is recognized over time based upon the proportion of work performed to date. Contract Balances Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period consistent with the above methodology. For the year ended December 31, 2022, we recognized revenue of $400.5 million that was included in the corresponding contract liability balance at the beginning of the period presented. Deferred revenue that will be realized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as non-current. We defer contract costs that are recoverable and incremental to obtaining customer contracts. Contract costs, which primarily consist of sales commissions, are amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. Contract costs for a new customer, upsell or cross-sell are amortized on a straight-line basis over an estimated period of benefit of five years as sales commissions on initial sales are not commensurate with sales commissions on contract renewals. We determined the estimated period of benefit by taking into consideration the contractual term and expected renewals of customer contracts, our technology and other factors, including the fact that sales commissions paid on renewals are not commensurate with commissions paid on initial sales transactions. Contract costs relating to contract renewals are deferred and amortized on a straight-line basis over the related renewal period. Contract costs for professional services arrangements are expensed as incurred in accordance with the practical expedient as the contractual period of our professional services arrangements are one year or less. We classify deferred contract costs as short-term or long-term based on when we expect to recognize the expense. Amortization expense associated with deferred contract acquisition costs is recorded to sales and marketing expense in our consolidated statements of operations. We periodically review the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. |
Property and Equipment | Property and EquipmentProperty and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. |
Software Development Costs | Software Development CostsSoftware development costs associated with the development of products for sale are recorded to research and development expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs are capitalized until the product is available for release to customers. To date, the software development costs have not been capitalized as the cost incurred and time between technological feasibility and product release was insignificant. As such, these costs are expensed as incurred and recognized in research and development expenses in our consolidated statements of operations.Costs related to software developed, acquired or modified for internal use are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post implementation stages of the project are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. These capitalized costs consist of internal compensation related costs and external direct costs. Costs related to software developed for internal use are amortized over an estimated useful life of 3 years. |
Leases | Leases We determine whether an arrangement is or contains a lease at inception. We evaluate the classification of a lease at inception and, as necessary, at modification. Operating leases are recognized on the consolidated balance sheet as right-of-use (“ROU”) assets, lease liabilities and, if applicable, long-term lease liabilities. Operating lease ROU assets represent our right to use an underlying asset for the lease term. Operating lease liabilities represent our obligation to make payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the present value of future lease payments at the lease commencement date. The implicit rate within our operating leases are generally not determinable and therefore we use the incremental borrowing rate at the lease commencement date to determine the present value of lease payments. We determine our incremental borrowing rate for each lease using our estimated borrowing rate, adjusted for various factors including level of collateralization, term and currency to align with the terms of the lease. The operating lease ROU asset also includes any lease prepayments and initial direct costs, offset by lease incentives. Operating lease cost is recognized on a straight-line basis over the lease term. Certain of our leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain we will exercise that option. An option to terminate is considered unless it is reasonably certain we will not exercise the option. We account for lease and non-lease components as a single lease component and do not recognize operating lease ROU assets and lease liabilities for leases with a term of one year or less. |
Impairment of Long-Lived Assets | Impairment of Long-Lived AssetsWe evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. When such events or changes in circumstances occur, recoverability of these assets or asset groups is measured by a comparison of the carrying value of the assets to the future net undiscounted cash flows directly associated with the assets. If such assets or asset groups are considered to be impaired, the impairment recognized is the amount by which the carrying value exceeds the fair value of the assets or asset groups. |
Business Combinations | Business Combinations We allocate the fair value of purchase consideration to the tangible asset acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair value these identifiable assets and liabilities is recorded as goodwill. Determining the fair value of the tangible assets acquired, liabilities assumed and intangible assets requires management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, cash flows that an asset is expected to generate in the future, technology migration curves, discount rates, and useful lives. While we use our best estimates and judgements, our estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of these assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the final determination of the fair value of assets acquired or liabilities assumed any subsequent adjustments are recorded to the consolidated statements of operations. Acquisition-related transaction costs are expensed as incurred. |
Goodwill | GoodwillWe perform an annual goodwill impairment test on the last day of each fiscal year and whenever events or changes in circumstances indicate that the carrying amount of this asset may exceed its fair value. For our goodwill impairment analysis, we operate with a single reporting unit. To test goodwill impairment, we perform a single-step goodwill impairment test to identify potential goodwill impairment. The single-step impairment test begins with an estimation of the fair value of a reporting unit. Goodwill impairment exists when the net assets of a reporting unit exceed its fair value. In performing the single step of the goodwill impairment testing and measurement process, we estimated the fair value of our single reporting unit using our market capitalization. Based upon our assessment performed as of December 31, 2022, we concluded the fair value of our single reporting unit exceeded its' carrying value and there was no impairment of goodwill. |
Foreign Currency | Foreign CurrencyThe functional currency of our foreign subsidiaries is the U.S. dollar. We translate all monetary assets and liabilities denominated in foreign currencies into U.S. dollars using the exchange rates in effect at the balance sheet dates and non-monetary assets and liabilities using historical exchange rates. Foreign currency denominated expenses are re-measured using the average exchange rates for the period. Foreign currency transaction and re-measurement gains and losses are included in other income (expense), net. |
Derivative and Hedging Activities | Derivative and Hedging Activities We are exposed to currency exchange rate risk. Although the majority of our revenue is denominated in U.S. dollars, a portion of our operating expenses are denominated in foreign currencies, making them subject to fluctuations in foreign currency exchange rates. We enter into foreign currency derivative contracts, which we designate as cash flow hedges, to manage the foreign currency exchange risk associated with these expenses. Our derivative financial instruments are recorded at fair value and reported as either an asset or liability on our consolidated balance sheets. Gains or losses related to our cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) in our consolidated balance sheets and are reclassified into the financial statement line item associated with the underlying hedged transaction in our consolidated statement of operations when the underlying hedged transaction is recognized in our earnings. If it becomes probable that the hedged transaction will not occur, the cumulative unrealized gain or loss is reclassified immediately from accumulated other comprehensive income (loss) into the financial statement line item associated with the underlying hedged transaction in our consolidated statement of operations. Derivatives designated as cash flow hedges are classified in our consolidated statements of cash flow in the same manner as the underlying hedged transaction, primarily within cash flow from operating activities. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense related to our stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”) and purchase rights issued under our 2015 Employee Stock Purchase Plan (“ESPP”) is calculated based on the estimated fair value of the award on the grant date. The fair values of RSUs and PSUs are based on the value of our common stock on the date of grant. The fair values of stock options and ESPP purchase rights are estimated on the grant date using the Black-Scholes option pricing model which requires management to make a number of assumptions, including the expected life of the option, the volatility of the underlying stock, the risk-free interest rate and expected dividends. The assumptions used in our Black-Scholes option-pricing model represent management’s best estimates at the time of grant. These estimates involve a number of variables, uncertainties and assumptions and the application of management’s judgment, as they are inherently subjective. If any assumptions change, our stock-based compensation expense could be materially different in the future. |
Advertising | AdvertisingAdvertising costs are expensed as incurred, and are recorded in sales and marketing expense in our consolidated statement of operations. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for differences between the consolidated financial statements carrying amounts of assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards using enacted tax rates expected to apply to taxable income in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies. In the event that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. We recognize tax benefits from uncertain tax positions if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Interest and penalties associated with such uncertain tax positions are classified as a component of income tax expense. |
Net Loss per Share | Net Loss per Share We calculate basic net loss per share by dividing our net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive securities, including stock options, RSUs, PSUs, the impact of our ESPP, common shares issued in connection with acquisitions and the impact of our convertible senior notes (“Notes”). We intend to settle any conversion of our Notes in cash, shares, or a combination thereof. As a result of our adoption of Financial Accounting Standards Board (“FASB”) Accounting Standard Update (“ASU”) 2020-06 (“ASU 2020-06”) on January 1, 2021, the dilutive impact of the Notes for our calculation of diluted net loss per share is considered using the if-converted method. For periods prior to our January 1, 2021 adoption of ASU 2020-06, we considered the impact of the Notes on our diluted net loss per share calculation based on applying the treasury stock method as we had the ability, and intent, to settle any conversions of the Notes solely in cash at that time. Basic and diluted net loss per share was the same for all periods presented as the inclusion of all potentially dilutive securities outstanding was anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires companies to apply revenue guidance to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination on the acquisition date, instead of measuring them at fair value. This standard is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. We early adopted this standard on January 1, 2022. This guidance will be applied prospectively to all business combinations that occur on or after January 1, 2022. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Property and Equipment | The following table presents the useful lives of our property and equipment: Useful Lives Computer equipment and software 3 years Furniture and fixtures 3 - 5 years Leasehold improvements Shorter of the useful life of the asset or the lease term Property and equipment are recorded at cost and consist of the following: As of December 31, 2022 2021 (in thousands) Computer equipment and software $ 24,568 $ 19,879 Furniture and fixtures 11,823 10,360 Leasehold improvements 66,180 51,983 Total property and equipment, gross 102,571 82,222 Less accumulated depreciation (44,680) (31,997) Total property and equipment, net $ 57,891 $ 50,225 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenue | The following table summarizes revenue from contracts with customers for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (in thousands) Subscriptions $ 643,247 $ 492,608 $ 371,975 Professional services 37,548 34,561 28,564 Other 4,288 8,235 10,947 Total revenue $ 685,083 $ 535,404 $ 411,486 The following table summarizes the revenue by region based on the shipping address of customers who have contracted to use our product or service for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (in thousands) United States $ 515,894 $ 414,856 $ 329,753 All other 169,189 120,548 81,733 Total revenue $ 685,083 $ 535,404 $ 411,486 |
Summary of Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2022. The estimated revenues do not include unexercised contract renewals. Next Twelve Months Thereafter (in thousands) Subscriptions $ 478,174 $ 191,817 Professional services 17,404 4,496 Other 462 131 Total $ 496,040 $ 196,444 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments Classified as Available-for-sale | Our investments, which are all classified as available-for-sale, consisted of the following: As of December 31, 2022 Amortized Gross Gross Fair Value (in thousands) Description: U.S. Government agencies $ 66,234 $ 4 $ (545) $ 65,693 Corporate bonds 14,351 — (230) 14,121 Commercial paper 7,944 — — 7,944 Agency bonds 6,231 — (71) 6,160 Total $ 94,760 $ 4 $ (846) $ 93,918 As of December 31, 2021 Amortized Gross Gross Fair Value (in thousands) Description: Commercial paper $ 37,778 $ — $ — $ 37,778 Corporate bonds 32,059 — (32) 32,027 U.S. Government agencies 22,396 — (31) 22,365 Agency bonds 749 — (1) 748 Total $ 92,982 $ — $ (64) $ 92,918 As of December 31, 2022 and 2021, our available-for-sale investments had maturities ranging from 2 to 19 months and from 2 to 23 months, respectively. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured and Recorded at Fair Value on Recurring Basis | The following table presents our financial assets measured and recorded at fair value on a recurring basis using the above input categories: As of December 31, 2022 Level 1 Level 2 Level 3 Total (in thousands) Description: Assets: Money market funds $ 88,039 $ — $ — $ 88,039 Corporate bonds — 14,121 — 14,121 Commercial paper — 7,944 — 7,944 U.S. Government agencies 65,693 — — 65,693 Agency bonds — 6,160 — 6,160 Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets and other assets) — 988 — 988 Total assets $ 153,732 $ 29,213 $ — $ 182,945 Liabilities: Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other long term liabilities) $ — $ 1,559 $ — $ 1,559 Total liabilities $ — $ 1,559 $ — $ 1,559 As of December 31, 2021 Level 1 Level 2 Level 3 Total (in thousands) Description: Assets: Money market funds $ 86,835 $ — $ — $ 86,835 Commercial paper — 37,778 — 37,778 Corporate bonds — 32,027 — 32,027 U.S. Government agencies 22,365 — — 22,365 Agency bonds — 748 — 748 Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets and other assets) — 73 — 73 Total assets $ 109,200 $ 70,626 $ — $ 179,826 Liabilities: Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other long-term liabilities) 823 823 Total liabilities $ — $ 823 $ — $ 823 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | The following table presents the useful lives of our property and equipment: Useful Lives Computer equipment and software 3 years Furniture and fixtures 3 - 5 years Leasehold improvements Shorter of the useful life of the asset or the lease term Property and equipment are recorded at cost and consist of the following: As of December 31, 2022 2021 (in thousands) Computer equipment and software $ 24,568 $ 19,879 Furniture and fixtures 11,823 10,360 Leasehold improvements 66,180 51,983 Total property and equipment, gross 102,571 82,222 Less accumulated depreciation (44,680) (31,997) Total property and equipment, net $ 57,891 $ 50,225 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Gross Carrying Amount of Goodwill | The following table displays the changes in the gross carrying amount of goodwill: Amount (in thousands) Balance at December 31, 2020 $ 213,601 Alcide acquisition 40,783 IntSights acquisition 260,874 Balance at December 31, 2021 515,258 IntSights acquisition adjustments 373 Balance at December 31, 2022 $ 515,631 |
Schedule of Identifiable Intangible Assets | The following table presents details of our intangible assets which include acquired identifiable intangible assets and capitalized internal-use software costs: Weighted- As of December 31, 2022 As of December 31, 2021 Gross Carrying Accumulated Net Carrying Value Gross Carrying Accumulated Net Carrying Value (in thousands) Intangible assets subject to amortization: Developed technology 5.2 $ 122,555 $ (58,645) $ 63,910 $ 122,555 $ (40,152) $ 82,403 Customer relationships 4.5 12,000 (5,146) 6,854 12,000 (2,436) 9,564 Trade names 3.1 2,619 (1,874) 745 2,619 (1,094) 1,525 Total acquired intangible assets $ 137,174 $ (65,665) $ 71,509 $ 137,174 $ (43,682) $ 93,492 Internal-use software 3.0 43,002 (13,242) 29,760 25,857 (7,758) 18,099 Total intangible assets $ 180,176 $ (78,907) $ 101,269 $ 163,031 $ (51,440) $ 111,591 |
Schedule of Estimated Amortization Expense | Estimated future amortization expense of the acquired identifiable intangible assets and completed capitalized internal-use software costs as of December 31, 2022 was as follows (in thousands): 2023 $ 25,988 2024 21,283 2025 17,283 2026 12,492 2027 5,206 Total $ 82,252 |
Deferred Contract Acquisition_2
Deferred Contract Acquisition and Fulfillment Costs (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Capitalized Contract Cost | The following table summarizes the activity of the deferred contract acquisition and fulfillment costs for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 (in thousands) Beginning balance $ 87,165 $ 64,639 Capitalization of contract acquisition and fulfillment costs 51,054 48,951 Amortization of deferred contract acquisition and fulfillment costs (35,144) (26,425) Ending balance $ 103,075 $ 87,165 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Further details of the Notes are as follows: Issuance Maturity Date Interest Rate First Interest Payment Date Effective Interest Rate Semi-Annual Interest Payment Dates Initial Conversion Rate per $1,000 Principal Initial Conversion Price Number of Shares (in millions) 2025 Notes May 1, 2025 2.25 % November 1, 2020 2.88 % May 1 and November 1 16.3875 $ 61.02 3.8 2027 Notes March 15, 2027 0.25 % September 15, 2021 0.67 % March 15 and September 15 9.6734 $ 103.38 5.8 |
Schedule of Liability and Equity Components of Convertible Debt | The net carrying amount of the Notes as of December 31, 2022 and 2021 was as follows (in thousands): 2025 Notes 2027 Notes Principal Unamortized debt issuance costs Total Principal Unamortized debt issuance costs Total Balance at December 31, 2021 $ 230,000 $ (4,905) $ 225,095 $ 600,000 $ (13,032) $ 586,968 Amortization of debt issuance costs — 1,425 1,425 — 2,468 2,468 Conversion of Notes (8) — (8) — — — Balance at December 31.2022 $ 229,992 $ (3,480) $ 226,512 $ 600,000 $ (10,564) $ 589,436 During the six months ended June 30, 2022, the 2025 Notes were convertible at the option of the holders. During this period an immaterial principal amount of the 2025 Notes were requested for conversion and settled in cash. As of December 31, 2022, the 2025 Notes and 2027 Notes were not convertible at the option of the holder. Interest expense related to the Notes was as follows (in thousands): Year Ended December 31, 2022 2021 2020 2025 Notes 2027 Notes Total 2023 Notes 2025 Notes 2027 Notes Total 2023 Notes 2025 Notes Total Contractual interest expense $ 5,174 $ 1,502 $ 6,676 $ 950 $ 5,175 $ 1,164 $ 7,289 $ 2,875 $ 3,450 $ 6,325 Amortization of debt discount — — — — — — — 10,342 5,417 15,759 Amortization of debt issuance costs 1,425 2,468 3,893 498 1,384 1,948 3,830 1,023 637 1,660 Induced conversion expense — — — 2,740 — — 2,740 — — — Total interest expense $ 6,599 $ 3,970 $ 10,569 $ 4,188 $ 6,559 $ 3,112 $ 13,859 $ 14,240 $ 9,504 $ 23,744 |
Schedule of Other Key Terms and Premiums Paid for the Capped Calls Related to Each Series of Notes | The following table sets forth other key terms and premiums paid for the Capped Calls related to each series of Notes: Capped Calls Entered into in Connection with the Issuance of the 2023 Notes Capped Calls Entered into in Connection with the Issuance of the 2025 Notes Capped Calls Entered into in Connection with the Issuance of the 2027 Notes Initial strike price, subject to certain adjustments $ 41.59 $ 61.02 $ 103.38 Cap price, subject to certain adjustments $ 63.98 $ 93.88 $ 159.04 Total premium paid (in thousands) $ 26,910 $ 27,255 $ 76,020 Expiration dates June 2, 2023 - July 28, 2023 March 4, 2025 - April 29, 2025 January 1, 2027 - March 11, 2027 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Summary of Components of Lease Expense and Supplemental Cash Flow Information Related to Leases | The components of lease expense were as follows: Year Ended December 31, 2022 2021 (in thousands) Operating lease costs $ 19,829 $ 16,475 Short-term lease costs 1,820 773 Variable lease costs 8,941 5,982 Total lease costs $ 30,590 $ 23,230 Supplemental cash flow information related to leases was as follows: As of December 31, 2022 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities $ 17,572 $ 17,967 ROU assets obtained in exchange for new lease obligations $ 10,327 $ 27,331 |
Summary of Supplemental Balance Sheet Information Related to Operating Leases | Supplemental balance sheet information related to the operating leases was as follows: As of December 31, 2022 2021 Weighted average remaining lease terms (in years) - operating leases 6.6 7.2 Weighted average discount rate - operating leases 6.2 % 6.2 % |
Summary of Maturities of Operating Lease Liabilities and Future Minimum Payments under Non-cancellable Leases | Maturities of operating lease liabilities as of December 31, 2022 were as follows (in thousands): 2023 $ 16,665 2024 18,856 2025 18,091 2026 16,721 2027 15,908 2028 and thereafter 34,782 Total lease payments $ 121,023 Less: imputed interest (22,633) Total $ 98,390 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense for restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), stock options and purchase rights issued under our employee stock purchase plan was classified in the accompanying consolidated statements of operations as follows: Year Ended December 31, 2022 2021 2020 (in thousands) Stock-based compensation expense: Cost of revenue $ 10,367 $ 6,491 $ 4,298 Research and development 49,940 46,622 24,423 Sales and marketing 31,217 23,828 16,826 General and administrative 28,378 25,638 18,341 Total stock-based compensation expense $ 119,902 $ 102,579 $ 63,888 |
Summary of Restricted Stock Units and Performance-Based Restricted Stock Units | RSUs and PSUs activity during 2022, 2021 and 2020 was as follows: Shares Weighted- Unvested balance as of December 31, 2019 2,936,924 $ 32.43 Granted 1,725,531 57.57 Vested (1,451,618) 33.66 Forfeited (268,923) 40.56 Unvested balance as of December 31, 2020 2,941,914 45.86 Granted 1,957,794 92.74 Vested (1,610,517) 47.00 Forfeited (510,314) 66.67 Unvested balance as of December 31, 2021 2,778,877 74.40 Granted 2,327,216 86.78 Vested (1,481,333) 69.80 Forfeited (623,317) 85.93 Unvested balance as of December 31, 2022 3,001,443 $ 83.88 |
Summary of Stock Option Activity | The following table summarizes information about stock option activity during the reporting periods: Shares Weighted Weighted Aggregate Outstanding as of December 31, 2019 2,735,392 $ 10.10 $ 124,007 Granted — — Exercised (783,645) 9.98 $ 39,095 Forfeited/cancelled (18,734) 17.87 Outstanding as of December 31, 2020 1,933,013 10.07 $ 154,816 Granted — — Exercised (521,326) 8.26 $ 49,522 Forfeited/cancelled (300) 7.73 Outstanding as of December 31, 2021 1,411,387 10.74 $ 150,951 Granted — — Exercised (479,223) 6.92 $ 20,764 Forfeited/cancelled (38) 21.15 Outstanding as of December 31, 2022 932,126 $ 12.70 3.19 $ 19,837 Vested and exercisable as of December 31, 2022 932,126 3.19 $ 19,837 |
Summary of Share Based Compensation Valuation of Options Granted Assumptions | The following table reflects the assumptions used in the Black-Scholes option pricing model to calculate the expense related to the ESPP: Year Ended December 31, 2022 2021 2020 Expected term (in years) 0.5 - 1.0 0.5 - 1.0 0.5 - 1.0 Expected volatility 37 - 57% 31 - 48% 47% - 53% Risk-free interest rate 0.1 – 4.0% 0.5 – 0.7% 0.1 – 0.3% Expected dividend yield — — — Grant date fair value per share $15.50 – $29.58 $20.32 –$34.98 $9.63 – $22.30 |
Schedule of Common Shares Issued to Employees | The following table provides the number of common shares issued to employees, the purchase prices and aggregate proceeds for the purchase dates in the years ended December 31, 2022, 2021 and 2020: September 15, 2022 March 15, 2022 September 15, 2021 March 15, 2021 September 15, 2020 March 15, 2020 Common shares issued 218,314 80,747 73,676 147,837 131,585 101,806 Purchase prices $45.31 $67.59 and $81.37 $52.60 and $67.59 $28.39 and $52.60 $28.39 $32.87 Aggregate proceeds $ 6.2 million $ 5.7 million $ 4.8 million $ 4.5 million $ 3.7 million $ 3.3 million |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Summary of Components of Loss Before Income Taxes | Loss before income taxes included in the consolidated statements of operations was as follows: Year Ended December 31, 2022 2021 2020 (in thousands) United States $ (109,381) $ (106,281) $ (72,846) Foreign (12,924) (29,632) (24,017) Loss before income taxes $ (122,305) $ (135,913) $ (96,863) |
Summary of Income Tax (Benefit) Expense | Income tax expense included in the consolidated statements of operations was as follows: Year Ended December 31, 2022 2021 2020 (in thousands) Current: Federal $ 1 $ 124 $ 8 State and local 243 177 122 Foreign 3,608 9,690 1,149 Total current tax expense 3,852 9,991 1,279 Deferred: Federal 10 10 9 State and local 2 2 2 Foreign (1,452) 418 696 Total deferred tax expense (benefit) (1,440) 430 707 Income tax expense $ 2,412 $ 10,421 $ 1,986 |
Summary of Reconciliation of Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes | The reconciliation of the federal statutory rate of 21% to the effective income tax rate for the years ended December 31, 2022, 2021 and 2020 was as follows: Year Ended December 31, 2022 2021 2020 Federal statutory rate 21.0 % 21.0 % 21.0 % State taxes, net of federal benefit (0.1) (0.1) (0.1) Permanent differences (0.2) (0.2) (0.7) Stock-based compensation (2.4) 14.2 12.1 Federal research and development credit 1.4 1.4 1.1 Foreign rate differential 0.1 (0.5) (1.4) Change in valuation allowance (24.8) (36.7) (30.0) Excess officers' compensation (3.1) (5.9) (3.3) Tax rate change 7.8 11.2 — Tax reserves (0.2) (3.8) — Capital gain on sale — (7.0) — Other (1.4) (1.2) (0.8) Effective income tax rate (1.9) % (7.6) % (2.1) % |
Summary of Components of Net Deferred Tax Assets and Liabilities | Net deferred tax assets and liabilities, as set forth in the table below, reflect the impact of temporary differences between the amounts of assets and liabilities recorded for financial statement purposes and such amounts measured in accordance with tax laws: As of December 31, 2022 2021 (in thousands) Deferred tax assets: Accruals and reserves $ 109 $ 157 Net operating loss carryforwards 166,173 176,417 Deferred revenue 9,597 9,518 Depreciation 3,258 3,808 Research and development credits 11,047 8,950 Capitalized research and development 40,253 — Operating lease liabilities 25,134 25,235 Stock-based compensation 9,072 7,497 Tax credits 1,148 1,148 Other 1,918 3,439 Gross deferred tax assets 267,709 236,169 Valuation allowance (230,205) (187,397) Total deferred tax assets 37,504 48,772 Deferred tax liabilities: Intangible assets — (15,957) Operating lease ROU assets (20,159) (20,921) Deferred contract acquisition and fulfillment costs (22,664) (18,278) Other (55) (636) Total deferred tax liabilities (42,878) (55,792) Net deferred tax liabilities $ (5,374) $ (7,020) |
Schedule of Unrecognized Tax Benefits Roll Forward | The reserves have been established based upon our assessment of the potential exposure. Changes in our reserve for unrecognized income tax benefits for the years ended December 31, 2022 was as follows (in thousands): Balance at December 31, 2021 $ 5,041 Additions based on current year tax provisions — Balance at December 31, 2022 $ 5,041 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Loss Per Share of Common Stock | The following table summarizes the computation of basic and diluted net loss per share of our common stock for 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 (in thousands, except share and per share data) Numerator: Net loss $ (124,717) $ (146,334) $ (98,849) Denominator: Weighted-average common shares outstanding, basic and diluted 58,552,065 55,270,998 51,036,824 Net loss per share, basic and diluted $ (2.13) $ (2.65) $ (1.94) |
Summary of Anti-Dilutive Securities Excluded from Computation Diluted Weighted Average Shares Outstanding | The following potentially dilutive securities outstanding, prior to the use of the treasury stock method, have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been anti-dilutive: Year Ended December 31, 2022 2021 2020 Options to purchase common stock 932,126 1,411,387 1,933,013 Unvested restricted stock units 3,001,443 2,778,877 2,941,914 Common stock to be issued to DivvyCloud founders 33,433 66,865 200,596 Common stock issued to IntSights founders 41,194 206,608 — Shares to be issued under ESPP 106,965 36,831 101,658 Convertible senior notes 9,572,955 9,573,087 9,299,432 Total 13,688,116 14,073,655 14,476,613 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Contractual Obligation, Fiscal Year Maturity | The following table presents details of the future non-cancellable purchase commitments under these agreements as of December 31, 2022 (in thousands): 2023 $ 113,953 2024 131,538 2025 39,107 2026 6,265 2027 and thereafter 3,613 Total $ 294,476 |
Segment Information and Infor_2
Segment Information and Information about Geographic Areas (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Summary of Net Revenues of Customer by Geographic Area | Net revenues by geographic area presented based upon the location of the customer are as follows: Year Ended December 31, 2022 2021 2020 (in thousands) United States $ 515,894 $ 414,856 $ 329,753 Other 169,189 120,548 81,733 Total $ 685,083 $ 535,404 $ 411,486 |
Summary of Property and Equipment, Net By Geographic Area | Property and equipment, net by geographic area as of December 31, 2022 and 2021 is presented in the table below: As of December 31, 2022 2021 (in thousands) United States $ 41,570 $ 37,682 Other 16,321 12,543 Total $ 57,891 $ 50,225 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||
Liability, revenue recognized | $ 400,500,000 | ||
Unbilled receivables | 1,100,000 | $ 1,200,000 | |
Contracts assets | $ 0 | 0 | |
Amortization period | 3 years | ||
Capitalized computer software, additions | $ 17,100,000 | 9,900,000 | $ 6,100,000 |
Impairment of long-lived assets | 0 | ||
Foreign currency transactional losses | 1,400,000 | 300,000 | |
Foreign currency re-measurement losses | 1,700,000 | ||
Sales and marketing | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||
Advertising costs | $ 22,700,000 | $ 21,300,000 | $ 16,400,000 |
Foreign currency forward contracts designated as cash flow hedges | Designated as Hedging Instrument | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||
Term of contract | 18 months | 18 months | |
Notional amount | $ 44,900,000 | $ 34,700,000 | |
New Customer, Up-sell or Cross-sell | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||
Amortization period | 5 years | ||
Professional Services Arrangements | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure And Significant Accounting Policies [Line Items] | |||
Amortization period | 1 year |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Computer equipment and software | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Minimum | Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Maximum | Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Summary of Revenue from Contracts with Customers and Revenue by Region (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 685,083 | $ 535,404 | $ 411,486 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 515,894 | 414,856 | 329,753 |
All other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 169,189 | 120,548 | 81,733 |
Subscriptions | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 643,247 | 492,608 | 371,975 |
Professional services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 37,548 | 34,561 | 28,564 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 4,288 | $ 8,235 | $ 10,947 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 496,040 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | 196,444 |
Subscriptions | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 478,174 |
Revenue recognition period | 1 year |
Subscriptions | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 191,817 |
Revenue recognition period | |
Professional services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 17,404 |
Revenue recognition period | 1 year |
Professional services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 4,496 |
Revenue recognition period | |
Other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 462 |
Revenue recognition period | 1 year |
Other | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 131 |
Revenue recognition period |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Thousands | 12 Months Ended | ||||||
Jul. 16, 2021 USD ($) | Apr. 12, 2021 USD ($) | Jan. 28, 2021 USD ($) reportingUnit | May 01, 2020 USD ($) reportingUnit | Dec. 31, 2022 USD ($) reportingUnit | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 515,631 | $ 515,258 | $ 213,601 | ||||
Number of reporting units | reportingUnit | 1 | ||||||
Useful life (in years) | 3 years | ||||||
IntSights | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price, aggregate fair value | $ 322,300 | ||||||
Payments to acquire businesses, gross | 319,200 | ||||||
Deferred cash consideration | 3,400 | ||||||
Purchase price adjustments | $ 300 | ||||||
Indemnification period | 18 months | ||||||
Net assets acquired | $ 61,100 | ||||||
Goodwill | 260,900 | ||||||
Intangible assets | $ 65,200 | ||||||
Velocidex | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire businesses, gross | $ 2,700 | ||||||
Deferred cash consideration | $ 300 | ||||||
Velocidex | Developed technology | |||||||
Business Acquisition [Line Items] | |||||||
Useful life (in years) | 6 years | ||||||
Alcide.IO Ltd. | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price, aggregate fair value | $ 50,500 | ||||||
Net assets acquired | (700) | ||||||
Goodwill | 40,800 | ||||||
Intangible assets | $ 10,400 | ||||||
Number of reporting units | reportingUnit | 1 | ||||||
Divvy Cloud Corporation | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price, aggregate fair value | $ 137,800 | ||||||
Net assets acquired | 900 | ||||||
Goodwill | 115,700 | ||||||
Intangible assets | $ 21,200 | ||||||
Number of reporting units | reportingUnit | 1 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | $ 94,760 | $ 92,982 |
Gross Unrealized Gains | 4 | 0 |
Gross Unrealized Losses | (846) | (64) |
Fair Value | $ 93,918 | $ 92,918 |
Minimum | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Remaining maturity | 2 months | 2 months |
Maximum | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Remaining maturity | 19 months | 23 months |
U.S. Government agencies | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | $ 66,234 | $ 22,396 |
Gross Unrealized Gains | 4 | 0 |
Gross Unrealized Losses | (545) | (31) |
Fair Value | 65,693 | 22,365 |
Corporate bonds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 14,351 | 32,059 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (230) | (32) |
Fair Value | 14,121 | 32,027 |
Commercial paper | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 7,944 | 37,778 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 7,944 | 37,778 |
Agency bonds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized Cost | 6,231 | 749 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (71) | (1) |
Fair Value | $ 6,160 | $ 748 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured and Recorded at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Fair Value | $ 93,918 | $ 92,918 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other assets, Prepaid expenses and other current assets | |
Liabilities: | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other current liabilities, Other long-term liabilities | |
2025 Notes | Convertible Debt | ||
Liabilities: | ||
Interest Rate | 2.25% | |
Convertible debt, fair value disclosures | $ 220,300 | |
2027 Notes | Convertible Debt | ||
Liabilities: | ||
Interest Rate | 0.25% | |
Convertible debt, fair value disclosures | $ 468,600 | |
Corporate bonds | ||
Assets: | ||
Fair Value | 14,121 | 32,027 |
Commercial paper | ||
Assets: | ||
Fair Value | 7,944 | 37,778 |
U.S. Government agencies | ||
Assets: | ||
Fair Value | 65,693 | 22,365 |
Agency bonds | ||
Assets: | ||
Fair Value | 6,160 | 748 |
Recurring | ||
Assets: | ||
Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets and other assets) | 988 | 73 |
Total assets | 182,945 | 179,826 |
Liabilities: | ||
Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other long term liabilities) | 1,559 | 823 |
Total liabilities | 1,559 | 823 |
Recurring | Corporate bonds | ||
Assets: | ||
Fair Value | 14,121 | 32,027 |
Recurring | Commercial paper | ||
Assets: | ||
Fair Value | 7,944 | 37,778 |
Recurring | U.S. Government agencies | ||
Assets: | ||
Fair Value | 65,693 | 22,365 |
Recurring | Agency bonds | ||
Assets: | ||
Fair Value | 6,160 | 748 |
Recurring | Money market funds | ||
Assets: | ||
Money market funds | 88,039 | 86,835 |
Recurring | Level 1 | ||
Assets: | ||
Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets and other assets) | 0 | 0 |
Total assets | 153,732 | 109,200 |
Liabilities: | ||
Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other long term liabilities) | 0 | |
Total liabilities | 0 | 0 |
Recurring | Level 1 | Corporate bonds | ||
Assets: | ||
Fair Value | 0 | 0 |
Recurring | Level 1 | Commercial paper | ||
Assets: | ||
Fair Value | 0 | 0 |
Recurring | Level 1 | U.S. Government agencies | ||
Assets: | ||
Fair Value | 65,693 | 22,365 |
Recurring | Level 1 | Agency bonds | ||
Assets: | ||
Fair Value | 0 | 0 |
Recurring | Level 1 | Money market funds | ||
Assets: | ||
Money market funds | 88,039 | 86,835 |
Recurring | Level 2 | ||
Assets: | ||
Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets and other assets) | 988 | 73 |
Total assets | 29,213 | 70,626 |
Liabilities: | ||
Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other long term liabilities) | 1,559 | 823 |
Total liabilities | 1,559 | 823 |
Recurring | Level 2 | Corporate bonds | ||
Assets: | ||
Fair Value | 14,121 | 32,027 |
Recurring | Level 2 | Commercial paper | ||
Assets: | ||
Fair Value | 7,944 | 37,778 |
Recurring | Level 2 | U.S. Government agencies | ||
Assets: | ||
Fair Value | 0 | 0 |
Recurring | Level 2 | Agency bonds | ||
Assets: | ||
Fair Value | 6,160 | 748 |
Recurring | Level 2 | Money market funds | ||
Assets: | ||
Money market funds | 0 | 0 |
Recurring | Level 3 | ||
Assets: | ||
Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets and other assets) | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other long term liabilities) | 0 | |
Total liabilities | 0 | 0 |
Recurring | Level 3 | Corporate bonds | ||
Assets: | ||
Fair Value | 0 | 0 |
Recurring | Level 3 | Commercial paper | ||
Assets: | ||
Fair Value | 0 | 0 |
Recurring | Level 3 | U.S. Government agencies | ||
Assets: | ||
Fair Value | 0 | 0 |
Recurring | Level 3 | Agency bonds | ||
Assets: | ||
Fair Value | 0 | 0 |
Recurring | Level 3 | Money market funds | ||
Assets: | ||
Money market funds | $ 0 | $ 0 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 102,571 | $ 82,222 |
Less accumulated depreciation | (44,680) | (31,997) |
Total property and equipment, net | 57,891 | 50,225 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 24,568 | 19,879 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 11,823 | 10,360 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 66,180 | $ 51,983 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 13.6 | $ 12.3 | $ 11 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 515,631,000 | $ 515,258,000 | $ 213,601,000 |
Impairment of goodwill | 0 | 0 | 0 |
Amortization expense | 27,500,000 | $ 21,200,000 | $ 11,600,000 |
Capitalized internal-use software costs | $ 19,000,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Change in Gross Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 515,258 | $ 213,601 |
Goodwill, ending balance | 515,631 | 515,258 |
Alcide acquisition | ||
Goodwill [Roll Forward] | ||
Goodwill, acquired during period | 40,783 | |
IntSights acquisition adjustments | ||
Goodwill [Roll Forward] | ||
Goodwill, acquired during period | $ 373 | $ 260,874 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Identifiable Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Estimated Useful Life (years) | 3 years | |
Total acquired intangible assets, gross carrying amount | $ 137,174 | $ 137,174 |
Total intangible assets, gross carrying amount | 180,176 | 163,031 |
Accumulated Amortization | (78,907) | (51,440) |
Total acquired intangible assets, accumulated amortization | (65,665) | (43,682) |
Net Carrying Value | 82,252 | |
Total acquired intangible assets, net book value | 71,509 | 93,492 |
Intangible assets, net book value | $ 101,269 | 111,591 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Estimated Useful Life (years) | 5 years 2 months 12 days | |
Gross Carrying Amount | $ 122,555 | 122,555 |
Accumulated Amortization | (58,645) | (40,152) |
Net Carrying Value | $ 63,910 | 82,403 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Estimated Useful Life (years) | 4 years 6 months | |
Gross Carrying Amount | $ 12,000 | 12,000 |
Accumulated Amortization | (5,146) | (2,436) |
Net Carrying Value | $ 6,854 | 9,564 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Estimated Useful Life (years) | 3 years 1 month 6 days | |
Gross Carrying Amount | $ 2,619 | 2,619 |
Accumulated Amortization | (1,874) | (1,094) |
Net Carrying Value | 745 | 1,525 |
Internal-use software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 43,002 | 25,857 |
Accumulated Amortization | (13,242) | (7,758) |
Net Carrying Value | $ 29,760 | $ 18,099 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Estimated Amortization Expense (Detail) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 25,988 |
2024 | 21,283 |
2025 | 17,283 |
2026 | 12,492 |
2027 | 5,206 |
Net Carrying Value | $ 82,252 |
Deferred Contract Acquisition_3
Deferred Contract Acquisition and Fulfillment Costs (Details) - Contract Acquisition And Fulfillment Costs - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Capitalized Contract Costs [Roll Forward] | ||
Beginning balance | $ 87,165 | $ 64,639 |
Capitalization of contract acquisition and fulfillment costs | 51,054 | 48,951 |
Amortization of deferred contract acquisition and fulfillment costs | (35,144) | (26,425) |
Ending balance | $ 103,075 | $ 87,165 |
Debt - Additional Information (
Debt - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2021 USD ($) | May 31, 2020 USD ($) day | Dec. 31, 2021 USD ($) shares | Mar. 31, 2021 USD ($) shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Apr. 30, 2020 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Induced conversion expense | $ 0 | $ 2,740,000 | $ 0 | |||||||
Convertible Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Threshold trading days | day | 5 | |||||||||
Induced conversion expense | 0 | 2,740,000 | 0 | |||||||
Convertible Debt | Debt Covenant One | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Threshold trading days | day | 20 | |||||||||
Threshold consecutive trading days | day | 30 | |||||||||
Threshold percentage of stock price trigger | 130% | |||||||||
Convertible Debt | Debt Covenant Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Threshold trading days | day | 5 | |||||||||
Threshold consecutive trading days | day | 10 | |||||||||
Threshold percentage of stock price trigger | 98% | |||||||||
Convertible Debt | Debt Covenant Three | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Threshold percentage of stock price trigger | 130% | |||||||||
Redemption price, percentage | 100% | |||||||||
2025 Notes | Convertible Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face amount | $ 230,000,000 | |||||||||
Induced conversion expense | 0 | 0 | 0 | |||||||
2027 Notes | Convertible Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face amount | $ 600,000,000 | |||||||||
Shares issued upon conversion (in shares) | shares | 2,200,000 | |||||||||
Induced conversion expense | $ 0 | 0 | ||||||||
Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Credit sublimit | $ 15,000,000 | $ 15,000,000 | 15,000,000 | |||||||
Credit Agreement | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 0% | |||||||||
Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Sofr Spread Rate | 0.10% | |||||||||
Basis spread on variable rate | 2.50% | |||||||||
Credit Agreement | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Current borrowing capacity | 100,000,000 | $ 50,000,000 | 100,000,000 | 100,000,000 | $ 30,000,000 | |||||
Credit sublimit | 15,000,000 | |||||||||
Maximum borrowing capacity | 100,000,000 | 100,000,000 | 100,000,000 | $ 50,000,000 | ||||||
Fee amount | $ 400,000 | 400,000 | 400,000 | |||||||
Commitment fee percentage | 0.20% | |||||||||
Credit Agreement | Letter of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 150,000,000 | 150,000,000 | 150,000,000 | $ 70,000,000 | ||||||
Long-term line of credit | $ 9,800,000 | |||||||||
2023 Notes | Convertible Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face amount | 45,400,000 | $ 45,400,000 | 45,400,000 | |||||||
Shares issued upon conversion (in shares) | shares | 697,262 | 23,123 | ||||||||
Repurchased face amount | $ 2,000,000 | $ 2,000,000 | $ 182,600,000 | 2,000,000 | ||||||
Induced conversion expense | $ 2,700,000 | $ 2,740,000 | $ 0 | |||||||
Converted amount | $ 43,400,000 | $ 2,000,000 | ||||||||
2023 Notes | Convertible Debt | Debt Covenant Three | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Threshold trading days | day | 20 | |||||||||
Threshold consecutive trading days | day | 30 | |||||||||
Redemption price, percentage | 100% |
Debt - Details of Notes (Detail
Debt - Details of Notes (Details) - Convertible Debt shares in Millions | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
2025 Notes | |
Debt Instrument [Line Items] | |
Interest Rate | 2.25% |
Effective Interest Rate | 2.88% |
Initial Conversion Rate per $1,000 Principal | 0.0163875 |
Initial Conversion Price (in dollars per share) | $ / shares | $ 61.02 |
Number of shares (in shares) | shares | 3.8 |
2027 Notes | |
Debt Instrument [Line Items] | |
Interest Rate | 0.25% |
Effective Interest Rate | 0.67% |
Initial Conversion Rate per $1,000 Principal | 0.009673 |
Initial Conversion Price (in dollars per share) | $ / shares | $ 103.38 |
Number of shares (in shares) | shares | 5.8 |
Debt - Carrying Amount of Liabi
Debt - Carrying Amount of Liability Component (Details) - Convertible Debt - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||
Amortization of debt issuance costs | $ 3,893 | $ 3,830 | $ 1,660 |
2025 Notes | |||
Debt Instrument [Line Items] | |||
Principal | 229,992 | 230,000 | |
Unamortized debt issuance costs | (3,480) | (4,905) | |
Total | 226,512 | 225,095 | |
Amortization of debt issuance costs | 1,425 | 1,384 | $ 637 |
Conversion of Notes | (8) | ||
2027 Notes | |||
Debt Instrument [Line Items] | |||
Principal | 600,000 | 600,000 | |
Unamortized debt issuance costs | (10,564) | (13,032) | |
Total | 589,436 | 586,968 | |
Amortization of debt issuance costs | $ 2,468 | $ 1,948 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||
Induced conversion expense | $ 0 | $ 2,740 | $ 0 |
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Contractual interest expense | 6,676 | 7,289 | 6,325 |
Amortization of debt discount | 0 | 0 | 15,759 |
Amortization of debt issuance costs | 3,893 | 3,830 | 1,660 |
Induced conversion expense | 0 | 2,740 | 0 |
Total interest expense | 10,569 | 13,859 | 23,744 |
Convertible Debt | 2023 Notes | |||
Debt Instrument [Line Items] | |||
Contractual interest expense | 950 | 2,875 | |
Amortization of debt discount | 0 | 10,342 | |
Amortization of debt issuance costs | 498 | 1,023 | |
Induced conversion expense | 2,700 | 2,740 | 0 |
Total interest expense | 4,188 | 14,240 | |
Convertible Debt | 2025 Notes | |||
Debt Instrument [Line Items] | |||
Contractual interest expense | 5,174 | 5,175 | 3,450 |
Amortization of debt discount | 0 | 0 | 5,417 |
Amortization of debt issuance costs | 1,425 | 1,384 | 637 |
Induced conversion expense | 0 | 0 | 0 |
Total interest expense | 6,599 | 6,559 | $ 9,504 |
Convertible Debt | 2027 Notes | |||
Debt Instrument [Line Items] | |||
Contractual interest expense | 1,502 | 1,164 | |
Amortization of debt discount | 0 | 0 | |
Amortization of debt issuance costs | 2,468 | 1,948 | |
Induced conversion expense | 0 | 0 | |
Total interest expense | $ 3,970 | $ 3,112 |
Debt - Other Key Terms and Prem
Debt - Other Key Terms and Premiums Paid for the Capped Calls (Details) - Call Option - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||
Induced conversion expense | $ 0 | $ 2,740 | $ 0 |
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Induced conversion expense | 0 | 2,740 | 0 |
Amortization of debt discount | 0 | 0 | 15,759 |
Capped Calls Entered into in Connection with the Issuance of the 2023 Notes | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Induced conversion expense | $ 2,700 | 2,740 | 0 |
Amortization of debt discount | 0 | 10,342 | |
Capped Calls Entered into in Connection with the Issuance of the 2023 Notes | Call Option | |||
Debt Instrument [Line Items] | |||
Initial strike price, subject to certain adjustments (in dollars per share) | $ 41.59 | ||
Cap price, subject to certain adjustments (in dollars per share) | $ 63.98 | ||
Total premium paid (in thousands) | $ 26,910 | ||
Capped Calls Entered into in Connection with the Issuance of the 2025 Notes | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Induced conversion expense | 0 | 0 | 0 |
Amortization of debt discount | $ 0 | 0 | $ 5,417 |
Capped Calls Entered into in Connection with the Issuance of the 2025 Notes | Call Option | |||
Debt Instrument [Line Items] | |||
Initial strike price, subject to certain adjustments (in dollars per share) | $ 61.02 | ||
Cap price, subject to certain adjustments (in dollars per share) | $ 93.88 | ||
Total premium paid (in thousands) | $ 27,255 | ||
Capped Calls Entered into in Connection with the Issuance of the 2027 Notes | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Induced conversion expense | 0 | 0 | |
Amortization of debt discount | $ 0 | $ 0 | |
Capped Calls Entered into in Connection with the Issuance of the 2027 Notes | Call Option | |||
Debt Instrument [Line Items] | |||
Initial strike price, subject to certain adjustments (in dollars per share) | $ 103.38 | ||
Cap price, subject to certain adjustments (in dollars per share) | $ 159.04 | ||
Total premium paid (in thousands) | $ 76,020 |
Leases - Additional Information
Leases - Additional Information (Details) - leaseRenewalOption | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Weighted average remaining lease terms (in years) - operating leases | 6 years 7 months 6 days | 7 years 2 months 12 days |
Renewal term | 7 years | |
Termination period | 6 years 9 months 18 days | |
Office Building | ||
Lessee, Lease, Description [Line Items] | ||
Weighted average remaining lease terms (in years) - operating leases | 9 years 3 months 18 days | |
Number of lease renewal options | 1 |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 19,829 | $ 16,475 |
Short-term lease costs | 1,820 | 773 |
Variable lease costs | 8,941 | 5,982 |
Total lease costs | $ 30,590 | $ 23,230 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Balance Sheet Information Related to Operating Leases (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted average remaining lease terms (in years) - operating leases | 6 years 7 months 6 days | 7 years 2 months 12 days |
Weighted average discount rate - operating leases | 6.20% | 6.20% |
Leases - Summary of Supplemen_2
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 17,572 | $ 17,967 |
ROU assets obtained in exchange for new lease obligations | $ 10,327 | $ 27,331 |
Leases - Summary of Maturities
Leases - Summary of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 16,665 |
2024 | 18,856 |
2025 | 18,091 |
2026 | 16,721 |
2027 | 15,908 |
2028 and thereafter | 34,782 |
Total lease payments | 121,023 |
Less: imputed interest | (22,633) |
Total | $ 98,390 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Oct. 08, 2015 | Jul. 31, 2015 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Share-based payment arrangement, expense | $ 119,902 | $ 102,579 | $ 63,888 | |||
Accelerated cost | 6,100 | |||||
ESSP, percentage | 15% | |||||
Purchase price of common stock by employees percentage | 85% | |||||
RSUs and PSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation cost, restricted stock | $ 231,000 | |||||
Unrecognized compensation, recognition period | 2 years 8 months 12 days | |||||
Options to purchase common stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options vested, fair value | $ 100 | 600 | 2,200 | |||
2015 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares of common stock reserved for future issuance (in shares) | 800,000 | |||||
Increase in number of shares reserved and available for issuance as percentage under the plan | 4% | |||||
Increase in number of shares authorized (in shares) | 1,500,000 | |||||
Number of shares authorized (in shares) | 20,185,353 | |||||
Shares available for grant (in shares) | 3,811,978 | |||||
2020 Bonus Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based payment arrangement, expense | $ 1,000 | $ 4,700 | $ 2,500 | |||
Shares to be issued under ESPP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Increase in number of shares reserved and available for issuance as percentage under the plan | 1% | |||||
Number of shares authorized (in shares) | 4,155,805 | |||||
Shares available for grant (in shares) | 2,484,322 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment arrangement, expense | $ 119,902 | $ 102,579 | $ 63,888 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment arrangement, expense | 10,367 | 6,491 | 4,298 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment arrangement, expense | 49,940 | 46,622 | 24,423 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment arrangement, expense | 31,217 | 23,828 | 16,826 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment arrangement, expense | $ 28,378 | $ 25,638 | $ 18,341 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock Units and Performance-Based Restricted Stock Units (Detail) - RSUs and PSUs - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | |||
Unvested balance, Beginning balance (in shares) | 2,778,877 | 2,941,914 | 2,936,924 |
Granted (in shares) | 2,327,216 | 1,957,794 | 1,725,531 |
Vested (in shares) | (1,481,333) | (1,610,517) | (1,451,618) |
Forfeited (in shares) | (623,317) | (510,314) | (268,923) |
Unvested balance, Ending balance (in shares) | 3,001,443 | 2,778,877 | 2,941,914 |
Weighted- Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 74.40 | $ 45.86 | $ 32.43 |
Granted (in dollars per share) | 86.78 | 92.74 | 57.57 |
Vested (in dollars per share) | 69.80 | 47 | 33.66 |
Forfeited (in dollars per share) | 85.93 | 66.67 | 40.56 |
Ending Balance (in dollars per share) | $ 83.88 | $ 74.40 | $ 45.86 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Shares | ||||
Beginning balance (in shares) | 1,411,387 | 1,933,013 | 2,735,392 | |
Granted (in shares) | 0 | 0 | 0 | |
Exercised (in shares) | (479,223) | (521,326) | (783,645) | |
Forfeited/cancelled (in shares) | (38) | (300) | (18,734) | |
Ending balance (in shares) | 932,126 | 1,411,387 | 1,933,013 | |
Vested and exercisable (in shares) | 932,126 | |||
Weighted Average Exercise Price | ||||
Beginning balance (in dollars per share) | $ 10.74 | $ 10.07 | $ 10.10 | |
Granted (in dollars per share) | 0 | 0 | 0 | |
Exercised (in dollars per share) | 6.92 | 8.26 | 9.98 | |
Forfeited/cancelled (in dollars per share) | 21.15 | 7.73 | 17.87 | |
Ending balance (in dollars per share) | 12.70 | $ 10.74 | $ 10.07 | |
Vested and exercisable (in dollars per share) | ||||
Weighted Average Remaining Contractual Life (in years) | ||||
Outstanding | 3 years 2 months 8 days | |||
Vested and exercisable | 3 years 2 months 8 days | |||
Aggregate Intrinsic Value (in thousands) | ||||
Exercised | $ 20,764 | $ 49,522 | $ 39,095 | |
Outstanding | 19,837 | $ 150,951 | $ 154,816 | $ 124,007 |
Vested and exercisable | $ 19,837 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Share Based Compensation Valuation of Options Granted Assumptions (Detail) - Shares to be issued under ESPP - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility, minimum | 37% | 31% | 47% |
Expected volatility, maximum | 57% | 48% | 53% |
Risk-free interest rate, minimum | 0.10% | 0.50% | 0.10% |
Risk-free interest rate, maximum | 4% | 0.70% | 0.30% |
Expected dividend yield | 0% | 0% | 0% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 6 months | 6 months | 6 months |
Grant date fair value per share, maximum (in dollars per share) | $ 15.50 | $ 20.32 | $ 9.63 |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 1 year | 1 year | 1 year |
Grant date fair value per share, maximum (in dollars per share) | $ 29.58 | $ 34.98 | $ 22.30 |
Stock-Based Compensation - Purc
Stock-Based Compensation - Purchase Prices and Aggregate Proceeds (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 15, 2022 | Mar. 15, 2022 | Sep. 15, 2021 | Mar. 15, 2021 | Sep. 15, 2020 | Mar. 15, 2020 | May 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common shares issued | 218,314 | 80,747 | 73,676 | 147,837 | 131,585 | 101,806 | |
Purchase prices (in dollars per share) | $ 45.31 | $ 28.39 | $ 32.87 | ||||
Aggregate proceeds | $ 6.2 | $ 5.7 | $ 4.8 | $ 4.5 | $ 3.7 | $ 3.3 | |
Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Purchase prices (in dollars per share) | $ 67.59 | $ 52.60 | $ 28.39 | ||||
Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Purchase prices (in dollars per share) | $ 81.37 | $ 67.59 | $ 52.60 |
Income Taxes - Components of Lo
Income Taxes - Components of Loss Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (109,381) | $ (106,281) | $ (72,846) |
Foreign | (12,924) | (29,632) | (24,017) |
Loss before income taxes | $ (122,305) | $ (135,913) | $ (96,863) |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax (Benefit) Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 1 | $ 124 | $ 8 |
State and local | 243 | 177 | 122 |
Foreign | 3,608 | 9,690 | 1,149 |
Total current tax expense | 3,852 | 9,991 | 1,279 |
Deferred: | |||
Federal | 10 | 10 | 9 |
State and local | 2 | 2 | 2 |
Foreign | (1,452) | 418 | 696 |
Total deferred tax expense (benefit) | (1,440) | 430 | 707 |
Income tax expense | $ 2,412 | $ 10,421 | $ 1,986 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes (Detail) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 21% | 21% | 21% |
State taxes, net of federal benefit | (0.10%) | (0.10%) | (0.10%) |
Permanent differences | (0.20%) | (0.20%) | (0.70%) |
Stock-based compensation | (2.40%) | 14.20% | 12.10% |
Federal research and development credit | 1.40% | 1.40% | 1.10% |
Foreign rate differential | 0.10% | (0.50%) | (1.40%) |
Change in valuation allowance | (24.80%) | (36.70%) | (30.00%) |
Excess officers' compensation | (3.10%) | (5.90%) | (3.30%) |
Tax rate change | 7.80% | 11.20% | 0% |
Tax reserves | (0.20%) | (3.80%) | 0% |
Capital gain on sale | 0% | (7.00%) | 0% |
Other | (1.40%) | (1.20%) | (0.80%) |
Effective income tax rate | (1.90%) | (7.60%) | (2.10%) |
Income Taxes - Components of Ne
Income Taxes - Components of Net Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Accruals and reserves | $ 109 | $ 157 |
Net operating loss carryforwards | 166,173 | 176,417 |
Deferred revenue | 9,597 | 9,518 |
Depreciation | 3,258 | 3,808 |
Research and development credits | 11,047 | 8,950 |
Capitalized research and development | 40,253 | 0 |
Operating lease liabilities | 25,134 | 25,235 |
Stock-based compensation | 9,072 | 7,497 |
Tax credits | 1,148 | 1,148 |
Other | 1,918 | 3,439 |
Gross deferred tax assets | 267,709 | 236,169 |
Valuation allowance | (230,205) | (187,397) |
Total deferred tax assets | 37,504 | 48,772 |
Deferred tax liabilities: | ||
Intangible assets | 0 | (15,957) |
Operating lease ROU assets | (20,159) | (20,921) |
Deferred contract acquisition and fulfillment costs | (22,664) | (18,278) |
Other | (55) | (636) |
Total deferred tax liabilities | (42,878) | (55,792) |
Net deferred tax liabilities | $ (5,374) | $ (7,020) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Amortization period | 3 years | |
Increase in deferred tax assets | $ 37,100 | |
Net operating loss carryforwards, federal | 450,500 | |
Net operating loss carryforwards, state | 345,400 | |
Unrecognized tax benefits | 5,041 | $ 5,041 |
Unrecognized tax benefits, interest on income taxes expense | $ 200 | |
Minimum | ||
Operating Loss Carryforwards [Line Items] | ||
Statue of limitation jurisdictions period | 3 years | |
Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Statue of limitation jurisdictions period | 7 years | |
Deferred Tax Assets Operating Loss Carryforwards | ||
Operating Loss Carryforwards [Line Items] | ||
Increase in valuation allowance | $ 42,800 | |
Domestic Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Amortization period | 5 years | |
Amount not subject to expiration | $ 389,700 | |
Research and development credit carryforwards | $ 7,700 | |
Foreign Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Amortization period | 15 years | |
Amount not subject to expiration | $ 246,300 | |
Research and development credit carryforwards | 200 | |
State and Local Jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
Research and development credit carryforwards | $ 3,100 |
Income Taxes - Changes in Reser
Income Taxes - Changes in Reserves for Unrecognized Income Tax Benefits (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Beginning balance | $ 5,041 |
Additions based on current year tax provisions | 0 |
Ending balance | $ 5,041 |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Basic and Diluted Net Loss Per Share of Common Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net loss | $ (124,717) | $ (146,334) | $ (98,849) |
Denominator: | |||
Weighted-average common shares outstanding, basic (in Shares) | 58,552,065 | 55,270,998 | 51,036,824 |
Weighted-average common shares outstanding, diluted (in Shares) | 58,552,065 | 55,270,998 | 51,036,824 |
Net loss per share, basic (in dollars per share) | $ (2.13) | $ (2.65) | $ (1.94) |
Net loss per share, diluted (in dollars per share) | $ (2.13) | $ (2.65) | $ (1.94) |
Net Loss Per Share - Summary _2
Net Loss Per Share - Summary of Antidilutive Securities Excluded From Computation Diluted Weighted Average Shares Outstanding (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 13,688,116 | 14,073,655 | 14,476,613 |
Unvested restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 3,001,443 | 2,778,877 | 2,941,914 |
Common stock to be issued to DivvyCloud founders | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 33,433 | 66,865 | 200,596 |
Common stock issued to IntSights founders | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 41,194 | 206,608 | 0 |
Shares to be issued under ESPP | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 106,965 | 36,831 | 101,658 |
Convertible senior notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 9,572,955 | 9,573,087 | 9,299,432 |
Options to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 932,126 | 1,411,387 | 1,933,013 |
Commitment and Contingencies -
Commitment and Contingencies - Purchase Obligations (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 113,953 |
2024 | 131,538 |
2025 | 39,107 |
2026 | 6,265 |
2027 and thereafter | 3,613 |
Total | $ 294,476 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 1 Months Ended |
Oct. 31, 2018 patent | |
Commitments and Contingencies Disclosure [Abstract] | |
Patents allegedly infringed, number | 7 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Requisite service period for eligibility in 401(k) plan | 90 days | ||
Employer discretionary contributions | $ 4.3 | $ 3.6 | $ 2.9 |
Segment Information and Infor_3
Segment Information and Information about Geographic Areas - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2022 segment | |
Segment Reporting [Abstract] | |
Number of operating segment | 1 |
Segment Information and Infor_4
Segment Information and Information about Geographic Areas - Net Revenues of Customer by Geographic Area (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | $ 685,083 | $ 535,404 | $ 411,486 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | 515,894 | 414,856 | 329,753 |
Other | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | $ 169,189 | $ 120,548 | $ 81,733 |
Segment Information and Infor_5
Segment Information and Information about Geographic Areas - Property and Equipment, Net By Geographic Area (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 57,891 | $ 50,225 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 41,570 | 37,682 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 16,321 | $ 12,543 |