Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 02, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40406 | |
Entity Registrant Name | ZIPRECRUITER, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-2976158 | |
Entity Address, Address Line One | 604 Arizona Avenue | |
Entity Address, City or Town | Santa Monica | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90401 | |
City Area Code | 877 | |
Local Phone Number | 252-1062 | |
Title of 12(b) Security | Class A common stock, $0.00001 par value per share | |
Trading Symbol | ZIP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001617553 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 74,470,311 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 26,433,316 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 214,526 | $ 227,380 |
Marketable securities | 304,561 | 342,975 |
Accounts receivable, net of allowances of $4,619 and $3,693 at March 31, 2023 and December 31, 2022, respectively | 36,262 | 44,421 |
Prepaid expenses and other assets | 9,697 | 12,648 |
Deferred commissions, current portion | 4,910 | 4,870 |
Total current assets | 569,956 | 632,294 |
Property and equipment, net | 7,828 | 8,103 |
Operating lease right-of-use assets | 11,925 | 12,179 |
Internal-use software, net | 16,737 | 15,758 |
Deferred commissions, net of current portion | 4,704 | 4,813 |
Goodwill | 1,724 | 1,724 |
Deferred tax assets, net | 43,260 | 38,653 |
Other assets | 973 | 1,039 |
Total assets | 657,107 | 714,563 |
Current liabilities | ||
Accounts payable | 16,145 | 21,175 |
Accrued expenses | 51,834 | 69,115 |
Accrued interest | 5,935 | 12,837 |
Deferred revenue | 19,486 | 19,580 |
Operating lease liabilities, current portion | 5,392 | 5,429 |
Other current liabilities | 4,362 | 1,527 |
Total current liabilities | 103,154 | 129,663 |
Operating lease liabilities, net of current portion | 12,291 | 13,018 |
Long-term borrowings | 541,808 | 541,559 |
Other long-term liabilities | 3,717 | 1,703 |
Total liabilities | 660,970 | 685,943 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity (deficit) | ||
Preferred Stock, $0.00001 par value; 50,000 shares authorized as of March 31, 2023 and December 31, 2022; no shares issued and outstanding as of March 31, 2023 and December 31, 2022 | 0 | 0 |
Class B treasury stock, 195 shares outstanding as of March 31, 2023 and December 31, 2022 | (644) | (644) |
Additional paid-in capital | 0 | 35,926 |
Accumulated deficit | (3,008) | (6,290) |
Accumulated other comprehensive loss | (212) | (373) |
Total stockholders' equity (deficit) | (3,863) | 28,620 |
Total liabilities and stockholders' equity (deficit) | 657,107 | 714,563 |
Common Class A | ||
Stockholders' equity (deficit) | ||
Common stock | 1 | 1 |
Common Class B | ||
Stockholders' equity (deficit) | ||
Common stock | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Accounts receivable, allowance for credit loss, current | $ 4,619 | $ 3,693 |
Stockholders' equity (deficit) | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Treasury stock (in shares) | 195,000 | 195,000 |
Common Class A | ||
Stockholders' equity (deficit) | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, issued (in shares) | 75,659,000 | 74,320,000 |
Common stock, outstanding (in shares) | 75,659,000 | 74,320,000 |
Common Class B | ||
Stockholders' equity (deficit) | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, issued (in shares) | 26,629,000 | 30,379,000 |
Common stock, outstanding (in shares) | 26,434,000 | 30,184,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 183,749 | $ 227,260 |
Cost of revenue | 20,622 | 21,606 |
Gross profit | 163,127 | 205,654 |
Operating expenses | ||
Sales and marketing | 88,352 | 137,590 |
Research and development | 38,294 | 29,644 |
General and administrative | 25,521 | 24,196 |
Total operating expenses | 152,167 | 191,430 |
Income from operations | 10,960 | 14,224 |
Other income (expense) | ||
Interest expense | (7,341) | (6,285) |
Other income (expense), net | 5,022 | (25) |
Total other expense, net | (2,319) | (6,310) |
Income before income taxes | 8,641 | 7,914 |
Income tax expense (benefit) | 3,630 | (503) |
Net income | $ 5,011 | $ 8,417 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.05 | $ 0.07 |
Diluted (in dollars per share) | $ 0.05 | $ 0.07 |
Weighted average shares used in computing net income per share: | ||
Basic (in shares) | 104,261 | 118,806 |
Diluted (in shares) | 109,984 | 127,050 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 5,011 | $ 8,417 |
Other comprehensive income, net of tax | ||
Unrealized gains on available-for-sale debt securities | 161 | 0 |
Total other comprehensive income | 161 | 0 |
Total comprehensive income | $ 5,172 | $ 8,417 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Total | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Common Class A Common Stock | Common Class B Common Stock | Common Class B Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2021 | 87,843 | 30,571 | |||||
Beginning balance at Dec. 31, 2021 | $ 234,968 | $ 303,395 | $ (67,784) | $ 0 | $ 1 | $ 0 | $ (644) |
Beginning balance (in shares) at Dec. 31, 2021 | (195) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Conversion of Class B stock to Class A stock (in shares) | 1,446 | (1,446) | |||||
Issuance of common stock upon exercise of options (in shares) | 1,180 | ||||||
Issuance of common stock upon exercise of options | 2,078 | 2,078 | |||||
Issuance of common stock upon the vesting and settlement of restricted stock units (in shares) | 354 | 433 | |||||
Stock-based compensation | 21,112 | 21,112 | |||||
Shares withheld related to net share settlement (in shares) | (133) | (181) | |||||
Shares withheld related to net share settlement | (5,902) | (5,902) | |||||
Stock issued under employee stock purchase plan (in shares) | 290 | ||||||
Shares issued under employee stock purchase plan | 5,293 | 5,293 | |||||
Repurchase and retirement of common stock (in shares) | (2,420) | 0 | |||||
Repurchase and retirement of common stock | (62,349) | (62,349) | |||||
Net income | 8,417 | 8,417 | |||||
Other comprehensive income | 0 | ||||||
Ending balance (in shares) at Mar. 31, 2022 | 87,380 | 30,557 | |||||
Ending balance at Mar. 31, 2022 | 203,617 | 263,627 | (59,367) | 0 | $ 1 | $ 0 | $ (644) |
Ending balance (in shares) at Mar. 31, 2022 | (195) | ||||||
Beginning balance (in shares) at Dec. 31, 2022 | 74,320 | 30,379 | |||||
Beginning balance at Dec. 31, 2022 | 28,620 | 35,926 | (6,290) | (373) | $ 1 | $ 0 | $ (644) |
Beginning balance (in shares) at Dec. 31, 2022 | (195) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Conversion of Class B stock to Class A stock (in shares) | 4,568 | (4,568) | |||||
Issuance of common stock upon exercise of options (in shares) | 6 | 658 | |||||
Issuance of common stock upon exercise of options | 1,298 | 1,298 | |||||
Issuance of common stock upon the vesting and settlement of restricted stock units (in shares) | 525 | 269 | |||||
Stock-based compensation | 22,088 | 22,088 | |||||
Shares withheld related to net share settlement (in shares) | (191) | (109) | |||||
Shares withheld related to net share settlement | (4,511) | (4,511) | |||||
Stock issued under employee stock purchase plan (in shares) | 237 | ||||||
Shares issued under employee stock purchase plan | 4,221 | 4,221 | |||||
Repurchase and retirement of common stock (in shares) | (3,806) | ||||||
Repurchase and retirement of common stock | (60,292) | (59,022) | (1,270) | ||||
Share repurchase excise tax | (459) | (459) | |||||
Net income | 5,011 | 5,011 | |||||
Other comprehensive income | 161 | 161 | |||||
Ending balance (in shares) at Mar. 31, 2023 | 75,659 | 26,629 | |||||
Ending balance at Mar. 31, 2023 | $ (3,863) | $ 0 | $ (3,008) | $ (212) | $ 1 | $ 0 | $ (644) |
Ending balance (in shares) at Mar. 31, 2023 | (195) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net income | $ 5,011 | $ 8,417 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Stock-based compensation expense | 21,571 | 20,494 |
Depreciation and amortization | 2,731 | 2,485 |
Provision for bad debts | 912 | 758 |
Deferred income taxes | (4,607) | (5,359) |
Non-cash lease expense | 1,031 | 1,304 |
Amortization and accretion of marketable securities | (3,020) | 0 |
Other | 313 | 1,619 |
Change in operating assets and liabilities: | ||
Accounts receivable | 7,247 | (10,781) |
Prepaid expenses and other current assets | 2,429 | (991) |
Deferred commissions, net | 70 | 81 |
Other assets | 106 | 2,129 |
Accounts payable | (5,019) | (2,882) |
Accrued expenses and other liabilities | (13,899) | (9,306) |
Accrued interest | (6,902) | 5,957 |
Deferred revenue | (95) | 2,234 |
Operating lease liabilities | (1,509) | (1,726) |
Net cash provided by operating activities | 6,370 | 14,433 |
Cash flows from investing activities | ||
Purchases of property and equipment | (414) | (986) |
Capitalized internal-use software costs | (3,068) | (2,530) |
Purchases of marketable securities | (117,122) | 0 |
Paydowns, maturities, and redemptions of marketable securities | 158,623 | 0 |
Net cash provided by (used in) investing activities | 38,019 | (3,516) |
Cash flows from financing activities | ||
Proceeds from issuance of senior unsecured notes | 0 | 550,000 |
Payment of senior unsecured notes’ issuance fees | 0 | (9,378) |
Payments of tax withholdings on net settlement of equity awards | (4,511) | (5,902) |
Repurchase of common stock | (58,740) | (62,349) |
Proceeds from exercise of stock options | 1,787 | 2,191 |
Proceeds from issuance of stock under employee stock purchase plan | 4,221 | 5,293 |
Net cash provided by (used in) financing activities | (57,243) | 479,855 |
Net increase (decrease) in cash and cash equivalents | (12,854) | 490,772 |
Beginning of period | 227,380 | 254,621 |
End of period | 214,526 | 745,393 |
Supplemental disclosure of non-cash activities | ||
Repurchase of common stock accrued but not yet settled | $ 1,548 | $ 0 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business ZipRecruiter, Inc. was incorporated in the state of Delaware on June 29, 2010. Hereinafter, ZipRecruiter, Inc. and its wholly owned subsidiaries ZipRecruiter Israel Ltd., ZipRecruiter UK Ltd., and ZipRecruiter Canada Ltd. are collectively referred to as “ZipRecruiter” or the “Company.” The Company is a two-sided marketplace that enables employers and job seekers to connect with one another online to fill job opportunities. |
Basis of Presentation, Principl
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies | Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, certain information and disclosures normally included in consolidated financial statements presented in accordance with U.S. GAAP have been condensed or omitted. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Form 10-K”). The condensed consolidated balance sheet as of December 31, 2022 has been derived from the Company’s audited consolidated financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the condensed consolidated financial statements. There have been no changes in the Company’s accounting policies from those disclosed in the Company’s audited consolidated financial statements and the related notes included in the 2022 Form 10-K. The operating results for the three months ended March 31, 2023 are not necessarily indicative of the results expected for the full year ending December 31, 2023 or any future period. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and footnotes thereto. Actual results could differ from those estimates. Investments The Company classifies and accounts for its money market mutual funds which have readily determinable fair values as equity securities, and it carries such securities at fair value with unrealized gains and losses reported in other income (expense), net in its condensed consolidated statements of operations. The Company classifies and accounts for its debt securities as available-for-sale, and it carries such securities at fair value with unrealized gains and losses reported net of tax as a separate component of stockholders’ equity in accumulated other comprehensive loss. During the three months ended March 31, 2023, in connection with its available-for-sale debt securities, the Company recorded pre-tax unrealized gains in other comprehensive loss of $0.2 million with no associated tax benefit. The Company held no investments in available-for-sale debt securities during the three months ended March 31, 2022. The Company determines any realized gains and losses on the sale of its available-for-sale debt securities using a specific identification method, and it records such gains and losses through other income (expense), net in its condensed consolidated statements of operations. During the three months ended March 31, 2023, the Company did not have any sales of its available-for-sale debt securities and therefore reclassified no amounts out of accumulated other comprehensive income into other income (expense), net in the condensed consolidated statements of operations. Segments and Geographic Information The Company operates as a single operating segment. The Company’s Chief Operating Decision Maker, the CEO, regularly reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources. Revenue is attributed to geographic regions based on locations where services are provided to the Company’s customers. Foreign countries outside of the United States, in aggregate, accounted for less than 2% of the Company’s revenue for the three months ended March 31, 2023 and 2022. In addition, property and equipment and operating lease right-of-use (“ROU”) assets outside of the United States were not material as of March 31, 2023 and December 31, 2022. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, and accounts receivable. The Company maintains its cash accounts with large financial institutions and at times, the cash accounts may exceed Federal Deposit Insurance Corporation limits. The Company has not experienced any losses in such accounts. As of March 31, 2023, the Company maintains its cash accounts with several large financial institutions which the Company believes are financially sound. Accordingly, the Company believes minimal credit risk exists with respect to these cash balances. The Company invests only in highly rated debt and equity securities. The Company believes the financial institutions that hold its investments are financially sound, and accordingly, are subject to minimal credit risk. For the three months ended March 31, 2023, there were no customers that individually represented 10% or more of the Company’s outstanding accounts receivable. One customer accounted for 12% of the Company's outstanding accounts receivable as of December 31, 2022. The Company closely monitors the financial condition of the foregoing customer, which has been in good credit standing. As such, the Company does not consider the concentration of its accounts receivable to be a material risk. For the three months ended March 31, 2023 and 2022, there were no customers that individually represented 10% or more of revenue. The Company uses third parties to collect its credit card receivables and believes risk related to its credit card processors is minimal. Excise Tax Imposed by Inflation Reduction Act The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. The net value is determined by the fair market value of the stock repurchased during the tax year, reduced by the fair market value of stock issued during the tax year, including stock issued to employees. As of March 31, 2023, the Company reflected $0.5 million of excise tax as part of the cost basis of the stock repurchased during the three months ended March 31, 2023, and recorded a corresponding liability for the excise taxes payable in other long-term liabilities on its condensed consolidated balance sheet. Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted The Company reviewed all recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a material impact on the Company’s condensed consolidated financial statements. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share The following table presents the Company’s basic net income per share (in thousands, except per share amounts): Three Months Ended 2023 2022 Net income per share, basic: Net income $ 5,011 $ 8,417 Weighted average shares of Class A and Class B common stock outstanding 104,261 118,806 Net income per share, basic $ 0.05 $ 0.07 The following table presents the Company’s diluted net income per share (in thousands, except per share amounts): Three Months Ended 2023 2022 Net income per share, diluted: Numerator: Net income $ 5,011 $ 8,417 Denominator: Weighted average shares of Class A and Class B common stock outstanding, basic 104,261 118,806 Effect of dilutive securities: Options to purchase common stock 5,345 7,960 Unvested restricted stock units 372 284 Employee stock purchase plan 6 — Weighted average shares of Class A and Class B common stock outstanding, diluted 109,984 127,050 Net income per share, diluted $ 0.05 $ 0.07 The following table presents the weighted average number of potentially dilutive common stock equivalents excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive (in thousands): Three Months Ended 2023 2022 Options to purchase common stock — 62 Unvested restricted stock units 5,790 4,859 Employee stock purchase plan 97 224 Total shares excluded from diluted net income per share 5,887 5,145 |
Revenue Information
Revenue Information | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Information | Revenue Information The Company disaggregates revenue into two streams: subscription revenue and performance-based revenue. The following table presents the Company’s revenue streams (in thousands): Three Months Ended 2023 2022 Subscription $ 143,101 $ 174,823 Performance-based 40,648 52,437 Total revenue $ 183,749 $ 227,260 The Company recognized $18.6 million and $21.9 million of revenue during the three months ended March 31, 2023 and 2022, respectively, that was included in the deferred revenue balances as of December 31, 2022 and 2021, respectively. As of March 31, 2023 and December 31, 2022, the Company had no contract assets. Performance Obligations No revenue was recognized during the three months ended March 31, 2023 and 2022 from performance obligations satisfied in previous periods. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consist of the following (in thousands): March 31, December 31, 2023 2022 Accrued marketing $ 15,104 $ 10,937 Accrued compensation and benefits 13,376 31,791 Accrued commissions 5,923 5,716 Accrued non-income taxes 3,597 3,605 Accrued partner expenses 3,344 7,465 Accrued refunds and customer liabilities 2,974 2,863 Other accrued expenses 7,516 6,738 Total accrued expenses $ 51,834 $ 69,115 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Facility The Company has a $250.0 million credit facility which matures in April 2026. On March 28, 2023, the Company entered into a Fourth Amendment to the Credit Agreement with the administrative agent to replace the London Interbank Offered Rate (“LIBOR”) reference rate with the Secured Overnight Financing Rate (“SOFR”) reference rate (as defined therein). No other terms or conditions of the Credit Agreement were changed as a result of this amendment. The Company had no amounts outstanding under its credit facility and was in compliance with the financial covenants as of March 31, 2023. The amount available under the credit facility as of March 31, 2023 was $244.9 million, which is the credit limit less letters of credit outstanding of $5.1 million. Senior Unsecured Notes On January 12, 2022, the Company issued an aggregate principal amount of $550.0 million senior unsecured notes (the “Notes”) in a private placement. The Notes will mature on January 15, 2030 and bear interest at a rate of 5% per year. Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year. Unpaid interest amounts are included within accrued interest in the Company’s condensed consolidated balance sheets. At its sole discretion, the Company has the option to redeem the Notes at any time in whole or in part at specified redemption prices. The Company includes its Notes, net of debt issuance costs, within long-term borrowings in its condensed consolidated balance sheets. As of March 31, 2023, the Company had a carrying amount of approximately $8.2 million of debt issuance costs related to the Notes. |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. If the Company determines that it is probable that a loss has been incurred and the amount is reasonably estimable, the Company will record a liability. However, if the Company determines that a contingent loss is reasonably possible and the loss or range of loss can be estimated, the Company will disclose the possible loss in the condensed consolidated financial statements. Legal costs relating to loss contingencies are expensed as incurred. In April 2019, the Company was named as a defendant in a putative class action lawsuit filed by a former employee in the Los Angeles Superior Court alleging that the Company violated the Fair Credit Reporting Act as well as owed certain compensation to employees. In January 2020, the former employee filed a related representative action in the Los Angeles Superior Court under the Private Attorney General Act alleging similar claims regarding compensation owed to employees. In January 2021, the Company filed a motion for summary judgment or, in the alternative, summary adjudication, which was granted in part and denied in part. As of September 30, 2021, the parties agreed to settle the lawsuit for an immaterial amount and accordingly, the Company recorded a liability within accrued expenses. The settlement must be approved by the Court before it can be finalized. As of March 31, 2023, the Company anticipates that the settlement agreement will be approved in 2023. Indemnification In the ordinary course of business, the Company may provide indemnification of varying scopes and terms to customers, investors, directors and officers with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from certain claims made by third parties. These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. The Company has never paid a material claim, nor has the Company been sued in connection with these indemnification arrangements. As of March 31, 2023, the Company has not accrued a liability for these indemnification arrangements because the likelihood of incurring a payment obligation, if any, in connection with these indemnification arrangements is neither probable nor reasonably estimable. Non-income Taxes The Company collects and remits sales and use, value added and other taxes (“non-income taxes”) relating to the sale of the Company’s services in various jurisdictions. The Company accrues non-income taxes that may result from examinations by, or any anticipated negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, then the reasonably possible loss is disclosed. Due to the inherent complexity and uncertainty of these matters and judicial process in certain jurisdictions, the final outcome may be materially different from the Company’s expectations. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Financial Instruments Fair Value Measurements The following table presents the Company’s financial assets measured at fair value on a recurring basis, as well as the amortized cost basis and gross unrealized gains and losses of those assets as of March 31, 2023 (in thousands): Balance Sheet Classification Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities Level 1: Cash $ 188,349 $ — $ — $ 188,349 $ 188,349 $ — Money market mutual funds 3,823 — — 3,823 3,823 — U.S. treasury securities 188,890 47 (87) 188,850 21,134 167,716 Subtotal 381,062 47 (87) 381,022 213,306 167,716 Level 2: Commercial paper 40,454 — — 40,454 — 40,454 Certificates of deposit 9,805 — — 9,805 — 9,805 Corporate notes and obligations 42,405 17 (171) 42,251 437 41,814 Asset-backed securities 15,876 9 (33) 15,852 — 15,852 U.S. agency securities 29,697 9 (3) 29,703 783 28,920 Subtotal 138,237 35 (207) 138,065 1,220 136,845 Total cash, cash equivalents, and marketable securities $ 519,299 $ 82 $ (294) $ 519,087 $ 214,526 $ 304,561 As of December 31, 2022, the Company’s financial assets consisted of the following (in thousands): Balance Sheet Classification Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities Level 1: Cash $ 166,341 $ — $ — $ 166,341 $ 166,341 $ — Money market mutual funds 49,545 — — 49,545 49,545 — U.S. treasury securities 204,580 9 (180) 204,409 2,995 201,414 Subtotal 420,466 9 (180) 420,295 218,881 201,414 Level 2: Commercial paper 41,348 — — 41,348 — 41,348 Certificates of deposit 6,116 — — 6,116 — 6,116 Corporate notes and obligations 63,912 10 (202) 63,720 1,519 62,201 Asset-backed securities 15,150 17 (29) 15,138 — 15,138 U.S. agency securities 23,736 5 (3) 23,738 6,980 16,758 Subtotal 150,262 32 (234) 150,060 8,499 141,561 Total cash, cash equivalents, and marketable securities $ 570,728 $ 41 $ (414) $ 570,355 $ 227,380 $ 342,975 The Company’s money market mutual funds and treasury securities are measured at fair value using quoted prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. The fair values of the Company’s Level 2 commercial paper and certificates of deposit are determined using quoted prices in markets that are not active or using model-driven valuations employing significant inputs derived from observable market data. The fair values of the Company’s Level 2 corporate notes and obligations, asset-backed securities, and U.S. agency securities are determined using an evaluated price based on a compilation of reported market information, such as benchmark yield curves, credit spreads and estimated default rates. The carrying amounts of the Company’s remaining financial instruments not discussed in the above table, including accounts receivable, accounts payable, and accrued expenses, approximate fair value because of their short-term maturities, except for the Company’s senior unsecured notes which are valued on a quarterly basis for disclosure purposes only based on quoted prices for the notes in less active markets and categorized accordingly as Level 2 in the fair value hierarchy. The aggregate fair value of the Notes as of March 31, 2023 was estimated to be approximately $468.2 million. Equity Securities The Company’s investments in equity securities consist primarily of money market mutual funds. During the three months ended March 31, 2023, the Company recorded no material unrealized gains or losses in connection with its money market mutual funds held as of March 31, 2023. The Company had no investments in money market mutual funds during the three months ended March 31, 2022. Available-for-sale Debt Securities The following table summarizes the fair value of the Company’s available-for-sale debt securities by contractual maturity as of March 31, 2023 (in thousands): Due within 1 year $ 303,101 Due after 1 year through 5 years 23,815 Total available-for-sale debt securities $ 326,916 Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations. The following table summarizes the available-for-sale debt securities which have been in a continuous unrealized loss position for less than 12 months as of March 31, 2023 (in thousands): Fair Value Gross Unrealized Losses Asset-backed securities $ 10,790 $ (33) Corporate notes and obligations 38,204 (171) U.S. treasury securities 53,570 (87) U.S. agency securities 11,969 (3) Total available-for-sale debt securities $ 114,533 $ (294) The following table summarizes the available-for-sale debt securities which have been in a continuous unrealized loss position for less than 12 months as of December 31, 2022 (in thousands): Fair Value Gross Unrealized Losses Asset-backed securities $ 6,598 $ (29) Corporate notes and obligations 55,136 (202) U.S. treasury securities 149,128 (180) U.S. agency securities 7,517 (3) Total available-for-sale debt securities $ 218,379 $ (414) The Company had no available-for-sale debt securities in a continuous unrealized loss position for more than 12 months as of March 31, 2023 or December 31, 2022. The Company did not recognize any credit losses for its available-for-sale debt securities during the three months ended March 31, 2023. The Company held no investments in available-for-sale debt securities during the three months ended March 31, 2022. The Company had no ending allowance balances for credit losses as of March 31, 2023 or December 31, 2022. |
Share Repurchase Program
Share Repurchase Program | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share Repurchase Program | Share Repurchase ProgramIn 2022, the Company’s board of directors authorized the Company to repurchase up to $450.0 million of outstanding shares of its common stock pursuant to a share repurchase program (the “Program”). Under the Program, the Company may repurchase shares of common stock through open market or privately negotiated transactions, block purchases, or pursuant to one or more Rule 10b5-1 plans. The Program does not obligate the Company to repurchase shares of common stock. There is no minimum or maximum number of shares to be repurchased under the Program. During the three months ended March 31, 2023, the Company repurchased 3.9 million shares of its Class A common stock for $60.2 million under the Program, including 3.8 million shares of its Class A common stock delivered under a Rule 10b5-1 plan totaling $60.2 million, and 0.1 million shares of its Class A common stock delivered upon the final settlement of an accelerated share repurchase agreement that the Company entered into in December 2022 with a major financial institution for which the payment was made in December 2022. The number of shares delivered under a Rule 10b5-1 plan includes 0.1 million shares of Class A common stock repurchased and accrued, but not yet settled as of March 31, 2023, totaling $1.5 million. Approximately $50.5 million remains available for future repurchases of Class A common stock under the Program as of March 31, 2023. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Total stock-based compensation expense is recorded in the condensed consolidated statements of operations as follows (in thousands): Three Months Ended 2023 2022 Cost of revenue $ 227 $ 216 Sales and marketing 3,618 2,628 Research and development 9,787 8,670 General and administrative 7,939 8,980 Total stock-based compensation $ 21,571 $ 20,494 Equity Incentive Plan and Employee Stock Purchase Plan Under the Company’s 2021 Equity Incentive Plan, as of March 31, 2023, 24.1 million shares of Class A common stock were authorized, of which 14.2 million shares of Class A common stock were available for future issuance. The number of shares reserved for issuance was increased in January 2023 pursuant to the evergreen provisions set forth in the 2021 Equity Incentive Plan. Under the Company’s 2021 Employee Stock Purchase Plan (the “ESPP”), as of March 31, 2023, 3.0 million shares of Class A common stock were authorized. The number of shares reserved for issuance was increased in January 2023 pursuant to the evergreen provisions set forth in the ESPP. During the three months ended March 31, 2023, 0.2 million shares of Class A common stock were purchased under the ESPP for an aggregate amount of $4.2 million. For the ESPP, the Company recorded stock-based compensation expense of $0.6 million and $0.8 million during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, there was $0.8 million of unrecognized stock-based compensation expense that is expected to be recognized over the remaining term of the offering period ending August 14, 2023. As of March 31, 2023, the Company recorded a liability of $1.7 million related to the accumulated payroll deductions, which are refundable to employees who withdraw from the ESPP. This amount is included within accrued expenses in the accompanying condensed consolidated balance sheets. Stock Options A summary of the Company’s stock option activity for the three months ended March 31, 2023 is as follows (in thousands, except weighted average information): Number of Options Outstanding Weighted Average Exercise Price Per Share Outstanding at December 31, 2022 6,746 $ 2.31 Granted — — Exercised (665) 1.95 Forfeited/Canceled (1) 2.00 Outstanding at March 31, 2023 6,080 $ 2.35 Exercisable at March 31, 2023 5,872 $ 2.35 As of March 31, 2023, total remaining stock-based compensation expense for unvested stock options is $2.5 million, which is expected to be recognized over a weighted average period of 0.9 years. Restricted Stock Units The Company’s CEO Performance Award provides for a grant of 1.4 million RSUs consisting of five vesting tranches with a vesting schedule based upon achieving stock price targets as well as satisfying certain minimum service requirements. During the three months ended March 31, 2023 and 2022, the Company recorded stock-based compensation expense of $1.5 million and $1.5 million, respectively, related to the CEO Performance Award. For all RSUs, excluding the CEO Performance Award, the Company recorded stock-based compensation expense of $19.2 million and $17.7 million during the three months ended March 31, 2023 and 2022, respectively. A summary of the Company’s RSU activity for the three months ended March 31, 2023 is as follows (in thousands, except weighted average information): Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2022 7,641 $ 21.20 Granted 3,364 22.50 Vested (794) 23.68 Forfeited/Canceled (153) 21.79 Unvested at March 31, 2023 10,058 $ 21.42 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company computes its provision (benefit) for income taxes by applying the estimated annual effective tax rate to pretax income or loss and adjusts the provision for discrete tax items recorded in the period. The income tax benefits, effective tax rates, and statutory federal income tax rates for the three months ended March 31, 2023 and March 31, 2022 were as follows (in thousands, except percentages): Three Months Ended 2023 2022 Income tax expense (benefit) $ 3,630 $ (503) Effective tax rate 42.0 % (6.4) % Statutory federal income tax rate 21 % 21 % The effective tax rate for the three months ended March 31, 2023 differed from the U.S. federal statutory tax rate of 21% primarily due to book and tax differences relating to the settlement of RSUs, certain non-deductible expenses, and limitations on the amount of deductible officer compensation, partially offset by the net tax benefits from research and development tax credits. The effective tax rate for the three months ended March 31, 2022 differed from the U.S. federal statutory tax rate of 21% primarily due to excess tax benefits relating to the exercise of non-qualified stock options and settlement of RSUs and from the tax benefits from research and development tax credits, partially offset by non-deductible expenses including certain stock-based compensation expenses and limitations on the amount of deductible officer compensation. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsIn May 2023, the Company’s board of directors authorized an increase to the Program of $100.0 million. Such amount is in addition to the Company’s previous aggregate authorization of $450.0 million. |
Basis of Presentation, Princi_2
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, certain information and disclosures normally included in consolidated financial statements presented in accordance with U.S. GAAP have been condensed or omitted. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Form 10-K”). The condensed consolidated balance sheet as of December 31, 2022 has been derived from the Company’s audited consolidated financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the condensed consolidated financial statements. There have been no changes in the Company’s accounting policies from those disclosed in the Company’s audited consolidated financial statements and the related notes included in the 2022 Form 10-K. |
Use of Estimates | The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and footnotes thereto. Actual results could differ from those estimates. |
Investments | The Company classifies and accounts for its money market mutual funds which have readily determinable fair values as equity securities, and it carries such securities at fair value with unrealized gains and losses reported in other income (expense), net in its condensed consolidated statements of operations. The Company classifies and accounts for its debt securities as available-for-sale, and it carries such securities at fair value with unrealized gains and losses reported net of tax as a separate component of stockholders’ equity in accumulated other comprehensive loss. During the three months ended March 31, 2023, in connection with its available-for-sale debt securities, the Company recorded pre-tax unrealized gains in other comprehensive loss of $0.2 million with no associated tax benefit. The Company held no investments in available-for-sale debt securities during the three months ended March 31, 2022. The Company determines any realized gains and losses on the sale of its available-for-sale debt securities using a specific identification method, and it records such gains and losses through other income (expense), net in its condensed consolidated statements of operations. During the three months ended March 31, 2023, the Company did not have any sales of its available-for-sale debt securities and therefore reclassified no amounts out of accumulated other comprehensive income into other income (expense), net in the condensed consolidated statements of operations. |
Segments and Geographic Information | The Company operates as a single operating segment. The Company’s Chief Operating Decision Maker, the CEO, regularly reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources. |
Concentration of Credit Risk | Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, and accounts receivable. The Company maintains its cash accounts with large financial institutions and at times, the cash accounts may exceed Federal Deposit Insurance Corporation limits. The Company has not experienced any losses in such accounts. As of March 31, 2023, the Company maintains its cash accounts with several large financial institutions which the Company believes are financially sound. Accordingly, the Company believes minimal credit risk exists with respect to these cash balances. The Company invests only in highly rated debt and equity securities. The Company believes the financial institutions that hold its investments are financially sound, and accordingly, are subject to minimal credit risk. |
Recent Accounting Pronouncements | Accounting Pronouncements Not Yet Adopted The Company reviewed all recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a material impact on the Company’s condensed consolidated financial statements. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method | The following table presents the Company’s basic net income per share (in thousands, except per share amounts): Three Months Ended 2023 2022 Net income per share, basic: Net income $ 5,011 $ 8,417 Weighted average shares of Class A and Class B common stock outstanding 104,261 118,806 Net income per share, basic $ 0.05 $ 0.07 |
Schedule of Earnings Per Share, Diluted, by Common Class, Including Two Class Method | The following table presents the Company’s diluted net income per share (in thousands, except per share amounts): Three Months Ended 2023 2022 Net income per share, diluted: Numerator: Net income $ 5,011 $ 8,417 Denominator: Weighted average shares of Class A and Class B common stock outstanding, basic 104,261 118,806 Effect of dilutive securities: Options to purchase common stock 5,345 7,960 Unvested restricted stock units 372 284 Employee stock purchase plan 6 — Weighted average shares of Class A and Class B common stock outstanding, diluted 109,984 127,050 Net income per share, diluted $ 0.05 $ 0.07 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the weighted average number of potentially dilutive common stock equivalents excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive (in thousands): Three Months Ended 2023 2022 Options to purchase common stock — 62 Unvested restricted stock units 5,790 4,859 Employee stock purchase plan 97 224 Total shares excluded from diluted net income per share 5,887 5,145 |
Revenue Information (Tables)
Revenue Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents the Company’s revenue streams (in thousands): Three Months Ended 2023 2022 Subscription $ 143,101 $ 174,823 Performance-based 40,648 52,437 Total revenue $ 183,749 $ 227,260 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consist of the following (in thousands): March 31, December 31, 2023 2022 Accrued marketing $ 15,104 $ 10,937 Accrued compensation and benefits 13,376 31,791 Accrued commissions 5,923 5,716 Accrued non-income taxes 3,597 3,605 Accrued partner expenses 3,344 7,465 Accrued refunds and customer liabilities 2,974 2,863 Other accrued expenses 7,516 6,738 Total accrued expenses $ 51,834 $ 69,115 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Assets Measured at Fair Value on a Recurring Basis | The following table presents the Company’s financial assets measured at fair value on a recurring basis, as well as the amortized cost basis and gross unrealized gains and losses of those assets as of March 31, 2023 (in thousands): Balance Sheet Classification Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities Level 1: Cash $ 188,349 $ — $ — $ 188,349 $ 188,349 $ — Money market mutual funds 3,823 — — 3,823 3,823 — U.S. treasury securities 188,890 47 (87) 188,850 21,134 167,716 Subtotal 381,062 47 (87) 381,022 213,306 167,716 Level 2: Commercial paper 40,454 — — 40,454 — 40,454 Certificates of deposit 9,805 — — 9,805 — 9,805 Corporate notes and obligations 42,405 17 (171) 42,251 437 41,814 Asset-backed securities 15,876 9 (33) 15,852 — 15,852 U.S. agency securities 29,697 9 (3) 29,703 783 28,920 Subtotal 138,237 35 (207) 138,065 1,220 136,845 Total cash, cash equivalents, and marketable securities $ 519,299 $ 82 $ (294) $ 519,087 $ 214,526 $ 304,561 As of December 31, 2022, the Company’s financial assets consisted of the following (in thousands): Balance Sheet Classification Amortized Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities Level 1: Cash $ 166,341 $ — $ — $ 166,341 $ 166,341 $ — Money market mutual funds 49,545 — — 49,545 49,545 — U.S. treasury securities 204,580 9 (180) 204,409 2,995 201,414 Subtotal 420,466 9 (180) 420,295 218,881 201,414 Level 2: Commercial paper 41,348 — — 41,348 — 41,348 Certificates of deposit 6,116 — — 6,116 — 6,116 Corporate notes and obligations 63,912 10 (202) 63,720 1,519 62,201 Asset-backed securities 15,150 17 (29) 15,138 — 15,138 U.S. agency securities 23,736 5 (3) 23,738 6,980 16,758 Subtotal 150,262 32 (234) 150,060 8,499 141,561 Total cash, cash equivalents, and marketable securities $ 570,728 $ 41 $ (414) $ 570,355 $ 227,380 $ 342,975 |
Investments Classified by Contractual Maturity Date | The following table summarizes the fair value of the Company’s available-for-sale debt securities by contractual maturity as of March 31, 2023 (in thousands): Due within 1 year $ 303,101 Due after 1 year through 5 years 23,815 Total available-for-sale debt securities $ 326,916 |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value | The following table summarizes the available-for-sale debt securities which have been in a continuous unrealized loss position for less than 12 months as of March 31, 2023 (in thousands): Fair Value Gross Unrealized Losses Asset-backed securities $ 10,790 $ (33) Corporate notes and obligations 38,204 (171) U.S. treasury securities 53,570 (87) U.S. agency securities 11,969 (3) Total available-for-sale debt securities $ 114,533 $ (294) The following table summarizes the available-for-sale debt securities which have been in a continuous unrealized loss position for less than 12 months as of December 31, 2022 (in thousands): Fair Value Gross Unrealized Losses Asset-backed securities $ 6,598 $ (29) Corporate notes and obligations 55,136 (202) U.S. treasury securities 149,128 (180) U.S. agency securities 7,517 (3) Total available-for-sale debt securities $ 218,379 $ (414) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Arrangement, Expensed and Capitalized, Amount | Total stock-based compensation expense is recorded in the condensed consolidated statements of operations as follows (in thousands): Three Months Ended 2023 2022 Cost of revenue $ 227 $ 216 Sales and marketing 3,618 2,628 Research and development 9,787 8,670 General and administrative 7,939 8,980 Total stock-based compensation $ 21,571 $ 20,494 |
Schedule of Stock Options Roll Forward | A summary of the Company’s stock option activity for the three months ended March 31, 2023 is as follows (in thousands, except weighted average information): Number of Options Outstanding Weighted Average Exercise Price Per Share Outstanding at December 31, 2022 6,746 $ 2.31 Granted — — Exercised (665) 1.95 Forfeited/Canceled (1) 2.00 Outstanding at March 31, 2023 6,080 $ 2.35 Exercisable at March 31, 2023 5,872 $ 2.35 |
Schedule of Nonvested Restricted Stock Units Activity | A summary of the Company’s RSU activity for the three months ended March 31, 2023 is as follows (in thousands, except weighted average information): Number of Shares Weighted Average Grant Date Fair Value Per Share Unvested at December 31, 2022 7,641 $ 21.20 Granted 3,364 22.50 Vested (794) 23.68 Forfeited/Canceled (153) 21.79 Unvested at March 31, 2023 10,058 $ 21.42 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The income tax benefits, effective tax rates, and statutory federal income tax rates for the three months ended March 31, 2023 and March 31, 2022 were as follows (in thousands, except percentages): Three Months Ended 2023 2022 Income tax expense (benefit) $ 3,630 $ (503) Effective tax rate 42.0 % (6.4) % Statutory federal income tax rate 21 % 21 % |
Basis of Presentation, Princi_3
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Jun. 30, 2022 | |
Concentration Risk [Line Items] | |||
Gain (loss) recognized in other comprehensive income | $ 200 | ||
Associated tax benefit | 0 | ||
Available for sale debt securities | 326,916 | $ 0 | |
Available for sale debt securities, reclassified | 0 | ||
Excise tax | $ 500 | ||
Accounts Receivable | Customer Concentration Risk | Customer One | |||
Concentration Risk [Line Items] | |||
Concentration risk (as a percent) | 12% | ||
Revenue Benchmark | Geographic Concentration Risk | Non-US | |||
Concentration Risk [Line Items] | |||
Concentration risk (as a percent) | 2% | 2% |
Net Income Per Share - Schedule
Net Income Per Share - Schedule of Earnings Per Share - Basic (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net income per share, basic: | ||
Net income | $ 5,011 | $ 8,417 |
Weighted average shares of Class A and Class B common stock outstanding basic (in shares) | 104,261 | 118,806 |
Net income (loss) per share attributable to Class A and Class B common stockholders, basic (in dollars per share) | $ 0.05 | $ 0.07 |
Net Income Per Share - Schedu_2
Net Income Per Share - Schedule of Earnings Per Share - Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net income | $ 5,011 | $ 8,417 |
Denominator: | ||
Weighted average shares of Class A and Class B common stock outstanding basic (in shares) | 104,261 | 118,806 |
Effect of dilutive securities: | ||
Weighted average shares of Class A and Class B common stock outstanding, diluted (in shares) | 109,984 | 127,050 |
Net income per share, diluted (in dollars per share) | $ 0.05 | $ 0.07 |
Options to purchase common stock | ||
Effect of dilutive securities: | ||
Share based payment arrangements (in shares) | 5,345 | 7,960 |
Unvested restricted stock units | ||
Effect of dilutive securities: | ||
Share based payment arrangements (in shares) | 372 | 284 |
Employee stock purchase plan | ||
Effect of dilutive securities: | ||
Share based payment arrangements (in shares) | 6 | 0 |
Net Income Per Share - Schedu_3
Net Income Per Share - Schedule of Antidilutive Options (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares excluded from diluted net income (loss) per share (in shares) | 5,887 | 5,145 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares excluded from diluted net income (loss) per share (in shares) | 0 | 62 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares excluded from diluted net income (loss) per share (in shares) | 5,790 | 4,859 |
Employee stock purchase plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total shares excluded from diluted net income (loss) per share (in shares) | 97 | 224 |
Revenue Information - Narrative
Revenue Information - Narrative (Details) | 3 Months Ended | ||
Mar. 31, 2023 USD ($) revenueStream | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Revenue from Contract with Customer [Abstract] | |||
Number of revenue streams | revenueStream | 2 | ||
Revenue that was included in deferred revenue balances | $ 18,600,000 | $ 21,900,000 | |
Contract assets | 0 | $ 0 | |
Revenue recognized from performance obligations satisfied in previous periods | $ 0 | $ 0 |
Revenue Information - Schedule
Revenue Information - Schedule of Revenue Streams (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 183,749 | $ 227,260 |
Subscription | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 143,101 | 174,823 |
Performance-based | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 40,648 | $ 52,437 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued marketing | $ 15,104 | $ 10,937 |
Accrued compensation and benefits | 13,376 | 31,791 |
Accrued commissions | 5,923 | 5,716 |
Accrued non-income taxes | 3,597 | 3,605 |
Accrued partner expenses | 3,344 | 7,465 |
Accrued refunds and customer liabilities | 2,974 | 2,863 |
Other accrued expenses | 7,516 | 6,738 |
Total accrued expenses | $ 51,834 | $ 69,115 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Jan. 12, 2022 | |
Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility | $ 250,000,000 | ||
Line of credit, amount available | 244,900,000 | ||
Line of Credit | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Long-term debt outstanding | 0 | ||
Line of Credit | Letter of Credit | |||
Line of Credit Facility [Line Items] | |||
Long-term debt outstanding | 5,100,000 | ||
Senior Notes | |||
Line of Credit Facility [Line Items] | |||
Debt issuance costs | 8,200,000 | ||
Senior Notes | Senior Notes Due 2030 | |||
Line of Credit Facility [Line Items] | |||
Convertible notes issued | $ 550,000,000 | ||
Debt instrument, stated rate (as a percent) | 5% | ||
Interest expense | $ 7,100,000 | $ 6,100,000 | |
Effective interest rate (as a percent) | 5.40% | ||
Amortization of debt issuance costs | $ 200,000 | $ 200,000 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) | Mar. 31, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Accrued liability for indemnification arrangements | $ 0 |
Financial Instruments - Amortiz
Financial Instruments - Amortized Cost, Unrealized Gains and Losses, and Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Debt Securities, Available-for-Sale [Line Items] | |||
Available for sale debt securities | $ 326,916 | $ 0 | |
Balance Sheet Classification, Cash and Cash Equivalents | 214,526 | $ 227,380 | |
Marketable securities | 304,561 | 342,975 | |
U.S. treasury securities | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Balance Sheet Classification, Cash and Cash Equivalents | 21,134 | 2,995 | |
Marketable securities | 167,716 | 201,414 | |
Commercial paper | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Balance Sheet Classification, Cash and Cash Equivalents | 0 | 0 | |
Marketable securities | 40,454 | 41,348 | |
Certificates of deposit | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Marketable securities | 9,805 | 6,116 | |
Corporate notes and obligations | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Balance Sheet Classification, Cash and Cash Equivalents | 437 | 1,519 | |
Marketable securities | 41,814 | 62,201 | |
Asset-backed securities | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Marketable securities | 15,852 | 15,138 | |
U.S. agency securities | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Balance Sheet Classification, Cash and Cash Equivalents | 783 | 6,980 | |
Marketable securities | 28,920 | 16,758 | |
Fair Value, Measurements, Recurring | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Gross Unrealized Gains | 82 | 41 | |
Fair Value Measurement, Gross Unrealized Losses | (294) | (414) | |
Total cash, cash equivalents, and marketable securities | 519,087 | 570,355 | |
Debt Securities, Available-For-Sale, Amortized Cost And Cash And Cash Equivalents | 519,299 | 570,728 | |
Fair Value, Inputs, Level 1 | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Balance Sheet Classification, Cash and Cash Equivalents | 213,306 | 218,881 | |
Marketable securities | 167,716 | 201,414 | |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Gross Unrealized Gains | 47 | 9 | |
Fair Value Measurement, Gross Unrealized Losses | (87) | (180) | |
Total cash, cash equivalents, and marketable securities | 381,022 | 420,295 | |
Debt Securities, Available-For-Sale, Amortized Cost And Cash And Cash Equivalents | 381,062 | 420,466 | |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | U.S. treasury securities | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Amortized Cost Basis | 188,890 | 204,580 | |
Fair Value Measurement, Gross Unrealized Gains | 47 | 9 | |
Fair Value Measurement, Gross Unrealized Losses | (87) | (180) | |
Available for sale debt securities | 188,850 | 204,409 | |
Fair Value, Inputs, Level 2 | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Balance Sheet Classification, Cash and Cash Equivalents | 1,220 | 8,499 | |
Marketable securities | 136,845 | 141,561 | |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Gross Unrealized Gains | 35 | 32 | |
Fair Value Measurement, Gross Unrealized Losses | (207) | (234) | |
Total cash, cash equivalents, and marketable securities | 138,065 | 150,060 | |
Debt Securities, Available-For-Sale, Amortized Cost And Cash And Cash Equivalents | 138,237 | 150,262 | |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Commercial paper | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Amortized Cost Basis | 40,454 | 41,348 | |
Available for sale debt securities | 40,454 | 41,348 | |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Certificates of deposit | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Amortized Cost Basis | 9,805 | 6,116 | |
Available for sale debt securities | 9,805 | 6,116 | |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Corporate notes and obligations | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Amortized Cost Basis | 42,405 | 63,912 | |
Fair Value Measurement, Gross Unrealized Gains | 17 | 10 | |
Fair Value Measurement, Gross Unrealized Losses | (171) | (202) | |
Available for sale debt securities | 42,251 | 63,720 | |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Asset-backed securities | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Amortized Cost Basis | 15,876 | 15,150 | |
Fair Value Measurement, Gross Unrealized Gains | 9 | 17 | |
Fair Value Measurement, Gross Unrealized Losses | (33) | (29) | |
Available for sale debt securities | 15,852 | 15,138 | |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | U.S. agency securities | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair Value Measurement, Amortized Cost Basis | 29,697 | 23,736 | |
Fair Value Measurement, Gross Unrealized Gains | 9 | 5 | |
Fair Value Measurement, Gross Unrealized Losses | (3) | (3) | |
Available for sale debt securities | 29,703 | 23,738 | |
Cash | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Balance Sheet Classification, Cash and Cash Equivalents | 188,349 | 166,341 | |
Cash | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Cash and cash equivalent | 188,349 | 166,341 | |
Money Market Funds | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Balance Sheet Classification, Cash and Cash Equivalents | 3,823 | 49,545 | $ 0 |
Money Market Funds | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Cash and cash equivalent | $ 3,823 | $ 49,545 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | |
Debt Securities, Available-for-Sale [Line Items] | |||
Cash and cash equivalents | $ 214,526 | $ 227,380 | |
Credit losses recorded for available-for-sale debt securities | 0 | ||
Money Market Funds | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Cash and cash equivalents | 3,823 | 49,545 | $ 0 |
Fair Value, Inputs, Level 2 | |||
Debt Securities, Available-for-Sale [Line Items] | |||
Fair value of debt | 468,200 | ||
Cash and cash equivalents | $ 1,220 | $ 8,499 |
Financial Instruments - Availab
Financial Instruments - Available-for-sale Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Available-for-Sale Securities, Debt Maturities [Abstract] | ||
Due within 1 year | $ 303,101 | |
Due after 1 year through 5 years | 23,815 | |
Total available-for-sale debt securities | $ 326,916 | $ 0 |
Financial Instruments - Avail_2
Financial Instruments - Available-for-sale Debt Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-Sale [Line Items] | ||
Fair Value | $ 114,533 | $ 218,379 |
Gross Unrealized Losses | (294) | (414) |
Asset-backed securities | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Fair Value | 10,790 | 6,598 |
Gross Unrealized Losses | (33) | (29) |
Corporate notes and obligations | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Fair Value | 38,204 | 55,136 |
Gross Unrealized Losses | (171) | (202) |
U.S. treasury securities | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Fair Value | 53,570 | 149,128 |
Gross Unrealized Losses | (87) | (180) |
U.S. agency securities | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Fair Value | 11,969 | 7,517 |
Gross Unrealized Losses | $ (3) | $ (3) |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) shares in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Accelerated Share Repurchases [Line Items] | |||
Authorized amount for repurchase | $ 450,000,000 | ||
Repurchase of common stock accrued but not yet settled | $ 1,548,000 | $ 0 | |
Common Class A | |||
Accelerated Share Repurchases [Line Items] | |||
Common shares repurchased (in shares) | 3.9 | ||
Common shares repurchased, amount | $ 60,200,000 | ||
Repurchase of common stock accrued but not yet settled | 1,500,000 | ||
Stock repurchase program, remaining authorized amount for future purchase | $ 50,500,000 | ||
Share Repurchased under Plan | Common Class A | |||
Accelerated Share Repurchases [Line Items] | |||
Common shares repurchased (in shares) | 3.8 | ||
Common shares repurchased, amount | $ 60,200,000 | ||
Accelerated Share Repurchase Agreement | Common Class A | |||
Accelerated Share Repurchases [Line Items] | |||
Common shares repurchased (in shares) | 0.1 |
Stock-Based Compensation - Tota
Stock-Based Compensation - Total Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | $ 21,571 | $ 20,494 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | 227 | 216 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | 3,618 | 2,628 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | 9,787 | 8,670 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | $ 7,939 | $ 8,980 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 USD ($) tranche shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 21,571 | $ 20,494 | |
Total remaining stock-based compensation expense for unvested stock options | $ 2,500 | ||
Stock based compensation, weighted average period of recognition (in years) | 10 months 24 days | ||
Unvested restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 19,200 | 17,700 | |
Unrecognized stock based compensation expense | $ 182,400 | ||
Restricted stock units granted (in shares) | shares | 3,364,000 | ||
Performance-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized stock based compensation expense | $ 1,000 | ||
Stock based compensation, weighted average period of recognition (in years) | 1 year 7 months 6 days | ||
Chief Executive Officer | Unvested restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 1,500 | 1,500 | |
Unrecognized stock based compensation expense | $ 11,900 | ||
Stock based compensation, weighted average period of recognition (in years) | 2 years 2 months 12 days | ||
Restricted stock units granted (in shares) | shares | 1,400,000 | ||
Number of vesting tranches | tranche | 5 | ||
Common Class A | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock, authorized (in shares) | shares | 700,000,000 | 700,000,000 | |
Shares reserved for issuance (in shares) | shares | 3,000,000 | ||
Shares purchased under ESPP (in shares) | shares | 200,000 | ||
Aggregate amount of shares purchased | $ 4,200 | ||
Equity Incentive Plan 2021 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock, authorized (in shares) | shares | 24,100,000 | ||
Shares initially reserved for issuance (in shares) | shares | 14,200,000 | ||
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 600 | $ 800 | |
Unrecognized stock based compensation expense | 800 | ||
Accrued employee stock purchase plan contribution | $ 1,700 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) - Equity Incentive Plans, 2012, 2014, 2021 | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Options Outstanding | |
Beginning balance (in shares) | shares | 6,746,000 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (665,000) |
Forfeited/cancelled (in shares) | shares | (1,000) |
Ending balance (in shares) | shares | 6,080,000 |
Exercisable (in shares) | shares | 5,872,000 |
Weighted Average Exercise Price Per Share | |
Beginning balance, outstanding (in dollars per share) | $ / shares | $ 2.31 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 1.95 |
Forfeited/Cancelled (in dollars per share) | $ / shares | 2 |
Ending balance, outstanding (in dollars per share) | $ / shares | 2.35 |
Exercisable (in dollars per share) | $ / shares | $ 2.35 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of RSU Activity (Details) - Unvested restricted stock units | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Shares | |
Beginning balance (in shares) | shares | 7,641,000 |
Granted (in shares) | shares | 3,364,000 |
Vested (in shares) | shares | (794,000) |
Forfeited/Canceled (in shares) | shares | (153,000) |
Ending balance (in shares) | shares | 10,058,000 |
Weighted Average Grant Date Fair Value Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 21.20 |
Granted (in dollars per share) | $ / shares | 22.50 |
Vested (in dollars per share) | $ / shares | 23.68 |
Forfeited/Canceled (in dollars per share) | $ / shares | 21.79 |
Ending balance (in dollars per share) | $ / shares | $ 21.42 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 3,630 | $ (503) |
Effective tax rate | 42% | (6.40%) |
Statutory federal income tax rate | 21% | 21% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | May 09, 2023 | Dec. 31, 2022 |
Subsequent Event [Line Items] | ||
Authorized amount for repurchase | $ 450,000,000 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock repurchase program, increased limit | $ 100,000,000 |