Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | UPWK | |
Entity Registrant Name | Upwork Inc. | |
Entity Central Index Key | 0001627475 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 107,160,359 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 49,220 | $ 129,128 |
Marketable securities | 71,999 | 0 |
Funds held in escrow, including funds in transit | 120,085 | 98,186 |
Trade and client receivables – net of allowance of $2,406 and $2,832 as of March 31, 2019 and December 31, 2018, respectively | 48,265 | 22,315 |
Prepaid expenses and other current assets | 6,681 | 6,253 |
Total current assets | 296,250 | 255,882 |
Property and equipment, net | 12,604 | 10,815 |
Goodwill | 118,219 | 118,219 |
Intangible assets, net | 5,337 | 6,004 |
Other assets, noncurrent | 1,389 | 653 |
Total assets | 433,799 | 391,573 |
Current liabilities | ||
Accounts payable | 1,542 | 2,073 |
Escrow funds payable | 120,085 | 98,186 |
Debt, current | 32,569 | 5,671 |
Accrued expenses and other current liabilities | 15,606 | 20,948 |
Deferred revenue | 891 | 722 |
Total current liabilities | 170,693 | 127,600 |
Debt, noncurrent | 16,354 | 18,239 |
Other liabilities, noncurrent | 2,780 | 1,989 |
Total liabilities | 189,827 | 147,828 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity | ||
Common stock, $0.0001 par value; 490,000,000 shares authorized as of March 31, 2019 and December 31, 2018; 106,729,758 and 106,454,321 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 11 | 11 |
Additional paid-in capital | 392,188 | 387,233 |
Accumulated deficit | (148,227) | (143,499) |
Total stockholders' equity | 243,972 | 243,745 |
Total liabilities and stockholders' equity | $ 433,799 | $ 391,573 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 2,406 | $ 2,832 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 490,000,000 | 490,000,000 |
Common stock, shares issued (in shares) | 106,729,758 | 106,454,321 |
Common stock, shares outstanding (in shares) | 106,729,758 | 106,454,321 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue | $ 68,924 | $ 59,218 |
Cost of revenue | 21,125 | 19,617 |
Gross profit | 47,799 | 39,601 |
Operating expenses | ||
Research and development | 15,800 | 13,491 |
Sales and marketing | 20,518 | 19,673 |
General and administrative | 15,677 | 11,176 |
Provision for transaction losses | 637 | 1,270 |
Total operating expenses | 52,632 | 45,610 |
Loss from operations | (4,833) | (6,009) |
Interest expense | 373 | 529 |
Other (income) expense, net | (479) | 249 |
Loss before income taxes | (4,727) | (6,787) |
Income tax benefit (provision) | (1) | 3 |
Net loss | $ (4,728) | $ (6,784) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.04) | $ (0.20) |
Weighted-average shares used to compute net loss per share, basic and diluted (in shares) | 106,639,079 | 34,192,856 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCKAND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Redeemable Convertible Preferred Stock (in shares) | 61,279,079 | |||
Redeemable Convertible Preferred Stock | $ 166,486 | |||
Beginning balance (in shares) at Dec. 31, 2017 | 33,740,323 | |||
Beginning balance at Dec. 31, 2017 | (31,367) | $ 3 | $ 92,222 | $ (123,592) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock upon exercise of stock options (in shares) | 914,037 | |||
Issuance of common stock upon exercise of stock options | 1,218 | $ 1 | 1,217 | |
Stock-based compensation expense | 1,888 | 1,888 | ||
Net loss | (6,784) | (6,784) | ||
Ending balance (in shares) at Mar. 31, 2018 | 34,654,360 | |||
Ending balance at Mar. 31, 2018 | $ (35,045) | $ 4 | 95,327 | (130,376) |
Redeemable Convertible Preferred Stock (in shares) | 61,279,079 | |||
Redeemable Convertible Preferred Stock | $ 166,486 | |||
Redeemable Convertible Preferred Stock (in shares) | 0 | |||
Redeemable Convertible Preferred Stock | $ 0 | |||
Beginning balance (in shares) at Dec. 31, 2018 | 106,454,321 | |||
Beginning balance at Dec. 31, 2018 | $ 243,745 | $ 11 | 387,233 | (143,499) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock upon exercise of stock options (in shares) | 273,105 | 273,105 | ||
Issuance of common stock upon exercise of stock options | $ 767 | 767 | ||
Stock-based compensation expense | 4,188 | 4,188 | ||
Issuance of common stock for settlement of RSUs (in shares) | 2,332 | |||
Net loss | (4,728) | (4,728) | ||
Ending balance (in shares) at Mar. 31, 2019 | 106,729,758 | |||
Ending balance at Mar. 31, 2019 | $ 243,972 | $ 11 | $ 392,188 | $ (148,227) |
Redeemable Convertible Preferred Stock (in shares) | 0 | |||
Redeemable Convertible Preferred Stock | $ 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (4,728) | $ (6,784) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Provision for transaction losses | 415 | 1,270 |
Depreciation and amortization | 1,532 | 1,064 |
Amortization of debt issuance costs | 13 | 39 |
Amortization of discount on purchases of marketable securities | (283) | 0 |
Change in fair value of redeemable convertible preferred stock warrant liability | 0 | 318 |
Change in fair value of Tides Foundation common stock warrant | 252 | 0 |
Stock-based compensation expense | 4,295 | 1,888 |
Loss on disposal of fixed assets | 0 | 29 |
Changes in operating assets and liabilities: | ||
Trade and client receivables | (26,431) | (7,660) |
Prepaid expenses and other assets | (991) | (1,111) |
Accounts payable | (596) | 51 |
Accrued expenses and other liabilities | (3,042) | 15,805 |
Deferred revenue | 169 | 91 |
Net cash provided by (used in) operating activities | (29,395) | 5,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of marketable securities | (71,713) | 0 |
Decrease (increase) in restricted cash | 250 | (101) |
Purchases of property and equipment | (3,604) | (462) |
Internal-use software and platform development costs | (1,210) | (626) |
Net cash used in investing activities | (76,277) | (1,189) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Changes in funds held in escrow, including funds in transit | (21,899) | 5,654 |
Changes in escrow funds payable | 21,899 | (5,654) |
Proceeds from exercises of stock options and common stock warrants | 764 | 1,218 |
Proceeds from borrowings on debt | 25,000 | 0 |
Payments of costs related to the initial public offering | 0 | (163) |
Net cash provided by financing activities | 25,764 | 1,055 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (79,908) | 4,866 |
Cash and cash equivalents, beginning of period | 129,128 | 21,595 |
Cash and cash equivalents, end of period | 49,220 | 26,461 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 357 | 511 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Property and equipment purchased but not yet paid | 1,210 | 1,149 |
Unpaid deferred offering costs | $ 0 | $ 1,057 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Upwork Inc. (the “Company” or “Upwork”) operates an online marketplace that enables businesses (“clients”) to find and work with highly-skilled independent professionals (“freelancers,” and, together with clients, “users”). The Company was originally incorporated in the state of Delaware in December 2013 prior to and in connection with the combination (the “Elance-oDesk Combination”) of Elance, Inc. (“Elance”) and oDesk Corporation (“oDesk”). The Company changed its name to Elance-oDesk, Inc. shortly before the Elance-oDesk Combination in March 2014, and later to Upwork Inc. in May 2015. In 2015, the Company relaunched as Upwork and commenced consolidation of its two operating platforms. In 2016, following completion of the platform consolidation, the Company began operating under a single platform. The Company is currently headquartered in Mountain View, California. Unless otherwise expressly stated or the context otherwise requires, the terms “Upwork” and the “Company” in these notes to the condensed consolidated financial statements refer to Upwork and its wholly-owned subsidiaries. Initial Public Offering In October 2018, the Company completed its initial public offering (“IPO”), in which the Company issued and sold an aggregate of 7,840,908 of the Company’s common stock, including 1,022,727 shares pursuant to the exercise of the underwriters’ option to purchase additional shares. The shares were sold to the underwriters at the IPO price of $15.00 per share less an underwriting discount of $1.05 per share. The Company received aggregate net proceeds of $109.4 million from the IPO after deducting underwriting discounts and commissions but before deducting offering expenses payable by the Company. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”), filed with the SEC on March 7, 2019. The condensed consolidated balance sheet as of December 31, 2018 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by U.S. GAAP. The condensed consolidated financial statements include the accounts of Upwork Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, changes in stockholders’ equity and cash flows for the interim periods, but do not purport to be indicative of the results of operations or financial condition to be anticipated for the full year ending December 31, 2019. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods presented. Such estimates include, but are not limited to: the useful lives of assets; assessment of the recoverability of long-lived assets; goodwill impairment; allowance for doubtful accounts; liabilities relating to transaction losses; the valuation of warrants; stock-based compensation; and accounting for income taxes. Management bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The Company evaluates its estimates, assumptions, and judgments on an ongoing basis using historical experience and other factors and revises them when facts and circumstances dictate. Actual results could materially differ from these estimates. Significant Accounting Policies The significant accounting policies applied in the Company’s audited consolidated financial statements, as disclosed in the Annual Report, are applied consistently in these unaudited interim condensed consolidated financial statements, except as noted below. Marketable Securities In the first quarter of 2019, the Company purchased various short-term, marketable securities consisting of commercial paper, treasury bills, and U.S. government securities, all of which have contractual maturities within 12 months from the date of purchase and are classified as available-for-sale marketable securities. These marketable securities are carried at estimated fair value with unrealized gains and losses, net of taxes, included within the stockholders’ equity section of the Company’s condensed consolidated balance sheet. The Company periodically reviews its available-for-sale marketable securities for other-than-temporary impairments. The Company considers factors such as the duration, severity, and the reason for any decline in value, the potential recovery period, and its intent to sell. For debt securities, the Company also considers whether (i) it is more likely than not that the Company will be required to sell the debt securities before recovery of their amortized cost basis and (ii) the amortized cost basis cannot be recovered as a result of credit losses. Unrealized losses are charged against other (income) expense, net when a decline in fair value is determined to be other-than-temporary. The Company determines realized gains or losses from the sale of marketable securities on a specific identification method and records such gains or losses as other (income) expense, net within the Company’s condensed consolidated statements of operations. Income Taxes The Company’s income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items arising in the quarter. The Company’s effective tax rate differs from the U.S. statutory tax rate primarily due to valuation allowances on the deferred tax assets as it is more likely than not that some or all of the Company’s deferred tax assets will not be realized. The Company continues to maintain a full valuation allowance against its net deferred tax assets. Due to tax losses and the offsetting valuation allowance, the income tax benefit (provision) for the three months ended March 31, 2019 and 2018, respectively, was immaterial to the Company’s condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted As an “emerging growth company,” the Jumpstart Our Business Startups Act (the “JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election. In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . Accounting Standards Codification 606— Revenue from Contracts with Customers (“ASC 606”) supersedes the revenue recognition requirements in ASC 605— Revenue Recognition , and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also includes Subtopic 340-40, Other Assets and Deferred Costs — Contracts with Customers (“Subtopic 340-40” and together with ASC 606, the “new revenue standard”), which requires the deferral of incremental costs of obtaining a contract with a customer. In August 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017. In 2016, the FASB issued amendments on this guidance with the same effective date and transition guidance. The new revenue standard may be applied retrospectively to each prior period presented (“full retrospective method”) or retrospectively with the cumulative effect recognized as of the date of adoption (“modified retrospective method”). The Company plans to adopt the new standard for the year ending December 31, 2019 during the fourth quarter of 2019, using the modified retrospective method. Interim reporting under the new standard will not be required until 2020. The Company is continuing to evaluate the potential impact that the implementation of this standard will have on its consolidated financial statements, specifically related to the following items: • identification of performance obligations; • principal agent considerations; • whether costs to obtain a contract with a customer will be capitalized or expensed; • timing of revenue recognition; and • revenue disclosures which are expected to expand and may require judgment in certain areas. The Company has concluded that the discounts offered under the Company’s tiered pricing program for freelancer service fees result in a “material right” as that term is defined in ASC 606. However, the Company has not yet determined the potential adjustment amount. The Company currently does not expect significant changes to its systems and processes from the adoption of the new standard. In January 2016, the FASB issued Accounting Standards Update 2016-01, Financial Instruments (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 makes targeted improvements to GAAP regarding financial instruments. ASU 2016-01 eliminates the requirement to classify investments in equity securities with readily determinable fair values into trading or available-for-sale categories and requires those equity securities to be measured at fair value with changes in fair value recognized in net earnings rather than in other comprehensive income. ASU 2016-01 also revises certain presentation and disclosure requirements. Under ASU 2016-01, accounting for investments in debt securities remains essentially unchanged. The guidance is effective for the Company for fiscal year 2020 and interim periods beginning fiscal year 2021. Early adoption is not permitted. The Company has not yet evaluated the impact of adopting this guidance on its consolidated financial statements and related disclosures. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) , related to how an entity should recognize lease assets and lease liabilities. The guidance specifies that an entity that is a lessee under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting for leases by lessors is largely unchanged under the new guidance. In 2018, the FASB also approved an amendment that would permit the option to adopt the new standard prospectively as of the effective date, without adjusting comparative periods presented. The new standard becomes effective for the Company for the year ending on December 31, 2020. The Company anticipates the effect of adopting this update will be recognizing right-of-use assets and corresponding lease liabilities for leases where the Company is the lessee, primarily comprised of leases for facilities. The Company is continuing to assess all implications of this new guidance on its consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company defines fair value as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance describes three levels of inputs that may be used to measure fair value: • Level I—Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets; • Level II—Observable inputs other than Level I prices, such as unadjusted quoted prices for similar assets or liabilities in active markets, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level III—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation. The categorization of a financial instrument within the fair value hierarchy is based upon the lowest level of input that is significant to its fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the assets or liability. The Company’s financial instruments that are carried at fair value consist of Level I and Level II assets as of March 31, 2019 and December 31, 2018. The following tables set forth the fair value of the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): March 31, 2019 Level I Level II Level III Total Cash equivalents Money market funds $ 32,028 $ — $ — $ 32,028 Commercial paper — 3,097 — 3,097 Marketable securities Commercial paper — 52,123 — 52,123 Treasury bills 4,960 — — 4,960 U.S. government securities 14,916 — — 14,916 Total financial assets $ 51,904 $ 55,220 $ — $ 107,124 December 31, 2018 Level I Level II Level III Total Cash equivalents—money market funds $ 117,138 $ — $ — $ 117,138 Total financial assets $ 117,138 $ — $ — $ 117,138 Prior to its IPO, the Company measured its redeemable convertible preferred stock warrant liability at fair value on a recurring basis, and it was classified within Level III because the warrants were valued using a Black-Scholes valuation model, for which some inputs were unobservable in the market. The Company recorded $0.3 million related to the revaluation of its redeemable convertible preferred stock warrant liability, which is included in other (income) expense, net in the Company’s condensed consolidated statement of operations for the three months ended March 31, 2018. Upon the closing of the IPO in October 2018, the redeemable convertible preferred stock warrant converted to a common stock warrant. As such, the Company reclassified its redeemable convertible preferred stock warrant liability to additional paid-in capital. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Balance Sheet Components Cash and Cash Equivalents Cash and cash equivalents consisted of the following (in thousands): March 31, 2019 December 31, 2018 Cash $ 14,095 $ 11,990 Money market funds 32,028 117,138 Commercial paper 3,097 — Total cash and cash equivalents $ 49,220 $ 129,128 Marketable Securities Marketable securities consisted of the following (in thousands): March 31, 2019 Commercial paper $ 52,123 Treasury bills 4,960 U.S. government securities 14,916 Total marketable securities $ 71,999 For the three months ended March 31, 2019, the gross unrealized gains and losses on the Company’s marketable securities were immaterial. As of March 31, 2019, the Company considered any decreases in market value to be temporary in nature and did not consider any of the Company’s marketable securities to be other-than-temporarily impaired. As such, the Company did not record any impairment charges during the three months ended March 31, 2019. Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): March 31, 2019 December 31, 2018 Computer equipment and software $ 3,475 $ 3,189 Internal-use software and platform development 7,390 6,287 Leasehold improvements 6,509 5,783 Office furniture and fixtures 2,524 2,545 Total property and equipment 19,898 17,804 Less: accumulated depreciation (7,294 ) (6,989 ) Property and equipment, net $ 12,604 $ 10,815 Depreciation expense related to property and equipment was $0.8 million and $0.4 million for the three months ended March 31, 2019 and 2018 , respectively. The Company capitalized $1.1 million and $0.6 million of internal-use software and platform development costs during the three months ended March 31, 2019 and 2018, respectively. Amortization expense related to the capitalized internal-use software and platform development costs was immaterial for the three months ended March 31, 2019. There was no amortization expense for the three months ended March 31, 2018 related to the internal-use software and platform development costs as the underlying assets had not been placed into service as of March 31, 2018. Intangible Assets, Net All of the Company’s identifiable intangible assets were acquired in March 2014 from the Elance-oDesk Combination. Intangible assets, net consisted of the following (in thousands): March 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names $ 2,293 $ 2,293 $ — User relationships 18,678 13,341 5,337 Developed technology 10,356 10,356 — Domain names 529 529 — Total $ 31,856 $ 26,519 $ 5,337 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names $ 2,293 $ 2,293 $ — User relationships 18,678 12,674 6,004 Developed technology 10,356 10,356 — Domain names 529 529 — Total $ 31,856 $ 25,852 $ 6,004 Total amortization expense of intangible assets was $0.7 million for each of the three months ended March 31, 2019 and 2018 . Amortization expense was included in general and administrative expenses. As of March 31, 2019 , the remaining useful life for user relationships was 2.0 years . As of December 31, 2018 , the remaining useful life for user relationships was 2.3 years . As of March 31, 2019, the estimated future amortization expense for the acquired intangible assets was as follows (in thousands): March 31, 2019 Remainder of 2019 $ 2,001 2020 2,668 2021 668 Total estimated future amortization expense $ 5,337 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, 2019 December 31, 2018 Accrued compensation and related benefits $ 5,419 $ 9,314 Accrued freelancer costs 823 2,465 Accrued indirect taxes 1,888 1,630 Accrued vendor expenses 5,993 6,002 Accrued payment processing fees 811 715 Other 672 822 Total accrued expenses and other current liabilities $ 15,606 $ 20,948 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company leases office space under five non-cancellable operating lease agreements, which expire from 2019 through 2028. The terms of the office leases contain rent escalation clauses, rent holidays, and/or tenant improvement allowances. The Company recognizes rent expense on a straight-line basis over the non-cancellable lease term and records the difference between cash payments and the recognition of rent expense as a deferred rent liability. Where leases contain escalation clauses, rent holidays, and/or tenant improvement allowances, the Company applies them in the determination of straight-line rent expense over the lease term. In February 2019, the Company entered into an agreement for a non-cancellable operating lease for new office space in Santa Clara, California. The Company took possession of the Santa Clara office space for its corporate headquarters during the first quarter of 2019 and plans to move its corporate headquarters and related operations in the second quarter of 2019 shortly after the termination of its Mountain View, California office lease. From June 1, 2019 through October 15, 2028, total minimum lease payments under the lease agreement are $14.3 million , with lease payments ranging from $1.4 million to $1.8 million per year. In 2018, the Company entered into an agreement to extend its non-cancellable operating lease for its San Francisco office through 2024. From September 1, 2019 through August 31, 2024, total minimum lease payments under the lease agreement are $15.7 million , with lease payments ranging from $1.0 million to $2.2 million per year from 2019 to 2024. Also in 2018, the Company entered into an agreement for a non-cancellable operating lease for new office space in Chicago through October 2024. In December 2018, the Company amended this agreement (the “First Amendment”) to extend the term of the original lease from October 2024 to April 2025 and to lease additional office space to accommodate continued headcount growth. From June 1, 2019 through April 30, 2025, total minimum lease payments under the original lease agreement and the First Amendment are $10.3 million , with lease payments ranging from $0.5 million to $2.0 million per year from 2019 to 2025. The Company moved its Chicago-based operations to this new office space in January 2019. In connection with this move, the Company entered into two sublease agreements that provided for the sublease of the two office spaces the Company occupied prior to its execution of the new operating lease. The Company exited the two spaces in December 2018 and January 2019, respectively. As a result, the Company accelerated the depreciation expense of its leasehold improvements and furniture and fixtures on the cease-use date for the space exited in January 2019 and accordingly recorded $0.3 million of accelerated depreciation expense during the three months ended March 31, 2019. The expected sublease income from the two sublease agreements is reflected in the future aggregate minimum lease payment table below. As of March 31, 2019, future aggregate minimum lease payments under the non-cancellable operating leases, net of sublease income, were as follows (in thousands): March 31, 2019 Remainder of 2019 $ 2,728 2020 5,861 2021 6,342 2022 6,588 2023 6,776 Thereafter 13,137 Less: sublease income (706 ) Total $ 40,726 Rent expense was $1.2 million and $1.0 million for the three months ended March 31, 2019 and 2018 , respectively. Letters of Credit In conjunction with the operating lease agreements, as of March 31, 2019 and December 31, 2018, the Company had four and three irrevocable letters of credit outstanding in the aggregate amount of $1.1 million and $0.8 million , respectively. The letters of credit are collateralized by restricted cash in the same respective amounts and begin to expire in 2019. No amounts had been drawn against these letters of credit as of March 31, 2019 and December 31, 2018. Contingencies The Company accrues contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. From time to time in the normal course of business, various claims and litigation have been asserted or commenced. Due to uncertainties inherent in litigation and other claims the Company can give no assurance that it will prevail in any such matters, which could subject the Company to significant liability or damages. Any claims or litigation could have an adverse effect on the Company’s business, financial position, results of operations, or cash flows in or following the period that claims or litigation are resolved. As of March 31, 2019 and December 31, 2018 , the Company was not a party to any material legal proceedings or claims, nor is the Company aware of any pending or threatened litigation or claims that could reasonably be expected to have a material adverse effect on its business, operating results, cash flows, or financial condition. Accordingly, the Company has determined that the existence of a material loss as of this date is neither probable nor reasonably possible. Indemnification The Company has indemnification agreements with its officers, directors, and certain key employees to indemnify them while they are serving in good faith in their respective positions. In the ordinary course of business, the Company enters into contractual arrangements under which it agrees to provide indemnification of varying scope and terms to vendors and other parties, including, but not limited to, losses arising out of the Company’s breach of such agreements. In addition, subject to the terms of the applicable agreement, as part of the Company’s Upwork Enterprise offering, the Company indemnifies clients that subscribe to worker classification services for losses arising from worker misclassification and intellectual property claims made by third parties relating to the use of the Company’s platform. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the facts and circumstances involved in each particular provision. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table presents the carrying value of the Company’s debt obligations as of March 31, 2019 and December 31, 2018 (in thousands): March 31, 2019 December 31, 2018 First Term Loan—18 months of interest-only payments ending in March 2019 followed by 36 equal monthly installments of principal plus interest, maturing March 2022; interest at prime plus 0.25% per annum $ 15,000 $ 15,000 Second Term Loan—11 months of interest-only payments ending in October 2018 followed by 47 equal monthly installments of principal plus interest, maturing September 2022. As of September 30, 2018, the Company achieved trailing six-month EBITDA of at least $1.0 million; as a result, the interest-only repayment period extended to March 2019, followed by 42 equal monthly installments of principal plus interest; bears interest at prime plus 5.25% per annum. As a result of the IPO, the interest rate was reduced to prime plus 0.25% per annum 9,000 9,000 Line of credit—interest at prime with accrued interest due monthly; matures September 2020 25,000 — Total debt 49,000 24,000 Less: unamortized debt discount issuance costs (77 ) (90 ) Balance 48,923 23,910 Debt, current (32,569 ) (5,671 ) Debt, noncurrent $ 16,354 $ 18,239 Weighted-average interest rate 5.81 % 6.89 % Under the Company’s Loan and Security Agreement, as amended (the “Loan Agreement”), the aggregate amount of the facility is up to $49.0 million , consisting of an outstanding $15.0 million term loan (the “First Term Loan”), an outstanding $9.0 million term loan (the “Second Term Loan” and, together with the First Term Loan, the “Term Loans”) and a revolving line of credit, which permits borrowings of up to $25.0 million subject to customary conditions. Among other things, the Company may only borrow funds under the revolving line of credit if, after giving effect thereto, total borrowings under the line of credit do not exceed a specified percentage of eligible trade and client accounts receivable. In September 2018, the Company entered into a second amendment (the “Second Amendment”) to the Loan Agreement, which expanded the types of eligible trade and client accounts receivable considered for the determination of the borrowing base of the revolving line of credit. The Second Amendment also provided for a reduction in the interest rate for the Second Term Loan, from the prime rate plus 5.25% per annum to the prime rate plus 0.25% per annum, from and after the occurrence of an initial public offering by the Company with net proceeds of more than $50.0 million . This reduction became effective following the completion of the IPO in October 2018. In March 2019, the Company entered into a third amendment (the “Third Amendment”) to the Loan Agreement, which, among other changes, (i) amended the adjusted quick ratio financial covenant to provide that the Company will maintain an adjusted quick ratio of 1.75 to 1.00 (previously 1.30 to 1.00), (ii) reduced the frequency with which the Company is required to provide certain financial information to the lender during periods in which it maintains an adjusted quick ratio of 2.50 to 1.00, and (iii) eliminated the minimum EBITDA covenant with which the Company was required to comply. The Company was in compliance with its covenants under the Loan Agreement as of March 31, 2019 and December 31, 2018. To the extent the Company has not yet collected funds for hourly billings from clients that are in-transit due to timing differences in receipt of cash from clients, the Company may utilize the revolving line of credit to satisfy customary escrow funding requirements. In March 2019, the Company drew down $25.0 million under the revolving line of credit for such purpose, which the Company subsequently repaid in April 2019. See Note 14—Subsequent Events. As of March 31, 2019, the Company had $24.0 million outstanding pursuant to the Term Loans and $25.0 million outstanding under the revolving line of credit. As of December 31, 2018, the Company had $24.0 million outstanding pursuant to the Term Loans and no borrowings outstanding under the revolving line of credit. Amortization expense related to the debt discount was immaterial for the three months ended March 31, 2019 and 2018 . |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 3 Months Ended |
Mar. 31, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Convertible Preferred Stock | Redeemable Convertible Preferred Stock Prior to the IPO, the Company financed its operations and capital expenditures primarily through sales of convertible preferred stock, bank borrowings, and utilization of cash generated from operations in the periods in which the Company generated cash flows from operations. As a result of the IPO, all of the Company’s 61,279,079 shares of then-outstanding redeemable convertible preferred stock automatically converted into shares of common stock on a one -for-one basis. Therefore, there were no issued or outstanding shares of redeemable convertible preferred stock as of March 31, 2019 and December 31, 2018. |
Preferred and Common Stock Warr
Preferred and Common Stock Warrants | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Preferred and Common Stock Warrants | Preferred and Common Stock Warrants Redeemable Convertible Preferred Stock Warrants As a result of the Elance-oDesk Combination, a redeemable convertible preferred stock warrant that was originally issued by Elance prior to the Elance-oDesk Combination became exercisable to purchase up to 124,506 and 273,825 shares of the Company’s Series A-1 and Series A-2 redeemable convertible preferred stock, respectively, at an exercise price of $3.13 per share. Prior to its IPO, the Company estimated the fair value of its redeemable convertible preferred stock warrant using the Black-Scholes valuation model. The Company recorded $0.3 million related to the revaluation of its redeemable convertible preferred stock warrant liability, which is included in other (income) expense, net in the Company’s condensed consolidated statement of operations for the three months ended March 31, 2018. Upon completion of the IPO, this warrant converted to a common stock warrant exercisable for the same number of shares and was reclassified to additional paid-in capital. The common stock warrant was outstanding and exercisable as of March 31, 2019 and December 31, 2018 . In April 2019, this common stock warrant was exercised in full. See Note 14—Subsequent Events. Common Stock Warrant In 2018, the Company established The Upwork Foundation initiative. The program includes a donor-advised fund created through the Tides Foundation. In May 2018, the Company issued a warrant to purchase 500,000 shares of its common stock at an exercise price of $0.01 per share to the Tides Foundation. The vesting and exercisability provisions of the warrant became effective upon the IPO in October 2018. This warrant is exercisable as to 1/10th of the shares on each anniversary of the IPO, with proceeds from the sale of such shares to be donated in accordance with the Company’s directive. For the three months ended March 31, 2019, the Company recorded $0.2 million of expense related to the revaluation of this warrant, which is included in general and administrative expense in the Company’s condensed consolidated statement of operations. |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Common Stock | Common Stock Holders of common stock are entitled to one vote per share and are entitled to receive dividends, if any, on a pro rata basis whenever funds are legally available and when, as, and if declared by the Company’s board of directors. As of March 31, 2019 and December 31, 2018 , the Company was authorized to issue 490,000,000 shares of common stock. As of March 31, 2019 and December 31, 2018 , the Company had reserved shares of common stock for future issuance as follows: March 31, 2019 December 31, 2018 Options issued and outstanding 23,304,831 23,774,279 RSUs issued and outstanding 1,087,759 288,460 Warrant to purchase common stock 898,331 898,331 Remaining shares reserved for future issuances under 2018 Equity Incentive Plan 15,277,301 10,558,306 Remaining shares reserved for futures issuances under 2018 Employee Stock Purchase Plan 2,551,634 1,700,000 Total 43,119,856 37,219,376 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 10—Stock-Based Compensation Equity Incentive Plans The following table summarizes activity under the Company’s stock option plans: Number of Shares Underlying Outstanding Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Balances at December 31, 2018 23,774,279 $ 3.71 7.10 $ 342,262 Exercised (273,105 ) 2.81 Forfeited and canceled (196,343 ) 4.63 Balances at March 31, 2019 23,304,831 $ 3.72 6.86 $ 359,444 In 2018, the Company’s board of directors and stockholders each adopted the 2018 Equity Incentive Plan (“2018 EIP”), which became effective on the date immediately prior to the date of the IPO. Awards granted under the 2018 EIP may be (i) incentive stock options, (ii) nonqualified stock options, (iii) RSUs, (iv) restricted stock awards, or (v) stock appreciation rights, as determined by the Company’s board of directors at the time of grant. The following table summarizes the RSU activity and related information under the 2018 EIP: Number of RSUs Outstanding Weighted-Average Grant Date Fair Value Unvested balance at December 31, 2018 288,460 $ 15.00 Granted 825,320 19.34 Vested (2,332 ) 15.00 Forfeited and canceled (23,689 ) 18.85 Unvested balance at March 31, 2019 1,087,759 $ 18.21 Pursuant to the terms of the 2018 EIP, in January 2019, the number of shares available for grant was increased by 5,322,716 shares. As of March 31, 2019, 15,277,301 shares were reserved for future issuance under the 2018 EIP. In July 2018, the Company’s board of directors granted an option exercisable for up to 1,860,000 shares of common stock to the Company’s Chief Executive Officer under the 2018 EIP (the “CEO Award”). The vesting and exercisability of the CEO Award is contingent upon the recipient’s continuous service as the Chief Executive Officer and the achievement of certain measurement objectives during three separate measurement periods within the period of time beginning on January 1, 2019 and ending on December 31, 2023. Each reporting period, the Company assesses the probability that the performance criteria will be met and records expense for those shares that are probable of vesting. For the three months ended March 31, 2019, the Company recorded $0.5 million related to the CEO Award. In February 2019, the Company’s board of directors approved the omnibus Performance Bonus Plan along with the performance criteria and bonus pool for 2019 (the “Bonus Plan”), which provides for the payment of bonus compensation to selected employees of the Company, including the Company’s executive officers, upon the achievement of certain performance criteria. In lieu of a cash payment, bonus payments to certain of the Company’s management team will be paid in the form of fully vested RSUs issued from the 2018 EIP. The ultimate number of fully vested RSUs to be granted will be determined by dividing (A) the total dollar value of the bonus that would be delivered in cash by (B) the closing stock price on the day prior to the award grant date, which is expected to occur in the first quarter of 2020. The payment of the bonus in fully vested RSUs requires accounting as a stock-based award under U.S. GAAP. Because the number of fully vested RSUs to be granted is dependent upon the future closing price of the Company’s common stock, the Company has classified this award as a liability within its condensed consolidated balance sheet as of March 31, 2019. Each reporting period, the Company assesses the probability that the performance criteria will be met and records expense for those shares that are probable of vesting. Employee Stock Purchase Plan In 2018, the Company’s board of directors and stockholders each adopted the 2018 Employee Stock Purchase Plan (“2018 ESPP”), which became effective upon the completion of the IPO. Pursuant to the terms of the 2018 ESPP, in January 2019, the number of shares available for issuance was increased by 851,634 shares. As of March 31, 2019, 2,551,634 shares were reserved for future issuance under the 2018 ESPP. Stock-Based Compensation The following table summarizes the components of stock-based compensation expense recognized in the condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2019 2018 Cost of revenue $ 144 $ 52 Research and development 1,380 550 Sales and marketing 642 340 General and administrative 2,129 946 Total stock-based compensation $ 4,295 $ 1,888 |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods presented (in thousands, except share and per share data): Three Months Ended March 31, 2019 2018 Numerator: Net loss $ (4,728 ) $ (6,784 ) Denominator: Weighted-average shares used to compute net loss per share, basic and diluted 106,639,079 34,192,856 Net loss per share, basic and diluted $ (0.04 ) $ (0.20 ) The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive: As of March 31, 2019 2018 Options to purchase common stock 23,304,831 23,799,710 Common stock issuable upon conversion of redeemable convertible preferred stock — 61,279,079 Common stock issuable upon exercise of common stock warrants 898,331 45,286 Common stock issuable upon exercise and redeemable conversion of preferred stock warrants — 398,331 Common stock issuable upon vesting of restricted stock units 1,087,759 — Total 25,290,921 85,522,406 |
Segment and Geographical Inform
Segment and Geographical Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment and Geographical Information | Segment and Geographical Information The Company operates as one operating and reportable segment for purposes of allocating resources and evaluating financial performance. The following table sets forth total revenue by type of service for the periods presented (in thousands): Three Months Ended March 31, 2019 2018 Marketplace $ 60,903 $ 51,959 Managed services 8,021 7,259 Total revenue $ 68,924 $ 59,218 The Company generates its revenue from freelancers and clients. The following table sets forth total revenue by geographic area based on the billing address of its freelancers and clients for the periods presented (in thousands): Three Months Ended March 31, 2019 2018 Freelancers United States $ 11,888 $ 9,103 India 6,630 6,106 Philippines 4,577 3,955 Rest of world 21,695 19,025 Total freelancers 44,790 38,189 Clients United States 17,674 15,462 Rest of world 6,460 5,567 Total clients 24,134 21,029 Total revenue $ 68,924 $ 59,218 Substantially all of the Company’s long-lived assets were located in the United States as of March 31, 2019 and December 31, 2018 . |
401(k) Plan
401(k) Plan | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
401(k) Plan | 401(k) Plan The Company offers the Upwork Retirement Savings Plan (the “Retirement Plan”), a defined contribution plan that allows employees to contribute a portion of their salary, subject to the annual limits. Under the Retirement Plan, eligible employees may defer a portion of their pretax salaries, but not more than the statutory limits. The Retirement Plan provides for a discretionary employer matching contribution. The Company makes matching contributions equal to 50% of each dollar contributed, subject to a maximum contribution of $5,000 annually per participant. The Company’s total expense for the matching contributions was $0.9 million and $0.8 million for the three months ended March 31, 2019 and 2018 , respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In April 2019, the Company repaid $25.0 million outstanding under the Company’s line of credit that was drawn down in March in order to satisfy the Company’s escrow funding requirements as of March 31, 2019. Also in April 2019, a warrant to purchase 398,331 shares of the Company’s common stock was exercised in full at a total cost of $1.2 million . In lieu of a cash payment, the holder of the warrant surrendered 64,646 shares to cover the exercise price. The Company issued 333,685 shares as a result of this exercise. In May 2019, the Compensation Committee of the Board of Directors granted 61,760 RSUs to Hayden Brown in connection with her promotion to Chief Marketing and Product Officer. The RSUs vest in equal quarterly installments over 16 quarters of continuous service with the first vesting date to occur June 18, 2019. Each subsequent vest date will occur on the 18th day of the third month of each quarter. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”), filed with the SEC on March 7, 2019. The condensed consolidated balance sheet as of December 31, 2018 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by U.S. GAAP. The condensed consolidated financial statements include the accounts of Upwork Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, changes in stockholders’ equity and cash flows for the interim periods, but do not purport to be indicative of the results of operations or financial condition to be anticipated for the full year ending December 31, 2019. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods presented. Such estimates include, but are not limited to: the useful lives of assets; assessment of the recoverability of long-lived assets; goodwill impairment; allowance for doubtful accounts; liabilities relating to transaction losses; the valuation of warrants; stock-based compensation; and accounting for income taxes. Management bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The Company evaluates its estimates, assumptions, and judgments on an ongoing basis using historical experience and other factors and revises them when facts and circumstances dictate. Actual results could materially differ from these estimates. |
Marketable Securities | Marketable Securities In the first quarter of 2019, the Company purchased various short-term, marketable securities consisting of commercial paper, treasury bills, and U.S. government securities, all of which have contractual maturities within 12 months from the date of purchase and are classified as available-for-sale marketable securities. These marketable securities are carried at estimated fair value with unrealized gains and losses, net of taxes, included within the stockholders’ equity section of the Company’s condensed consolidated balance sheet. The Company periodically reviews its available-for-sale marketable securities for other-than-temporary impairments. The Company considers factors such as the duration, severity, and the reason for any decline in value, the potential recovery period, and its intent to sell. For debt securities, the Company also considers whether (i) it is more likely than not that the Company will be required to sell the debt securities before recovery of their amortized cost basis and (ii) the amortized cost basis cannot be recovered as a result of credit losses. Unrealized losses are charged against other (income) expense, net when a decline in fair value is determined to be other-than-temporary. The Company determines realized gains or losses from the sale of marketable securities on a specific identification method and records such gains or losses as other (income) expense, net within the Company’s condensed consolidated statements of operations. |
Income Taxes | Income Taxes The Company’s income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items arising in the quarter. The Company’s effective tax rate differs from the U.S. statutory tax rate primarily due to valuation allowances on the deferred tax assets as it is more likely than not that some or all of the Company’s deferred tax assets will not be realized. The Company continues to maintain a full valuation allowance against its net deferred tax assets. Due to tax losses and the offsetting valuation allowance, the income tax benefit (provision) for the three months ended March 31, 2019 and 2018, respectively, was immaterial to the Company’s condensed consolidated financial statements. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted As an “emerging growth company,” the Jumpstart Our Business Startups Act (the “JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election. In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . Accounting Standards Codification 606— Revenue from Contracts with Customers (“ASC 606”) supersedes the revenue recognition requirements in ASC 605— Revenue Recognition , and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 also includes Subtopic 340-40, Other Assets and Deferred Costs — Contracts with Customers (“Subtopic 340-40” and together with ASC 606, the “new revenue standard”), which requires the deferral of incremental costs of obtaining a contract with a customer. In August 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017. In 2016, the FASB issued amendments on this guidance with the same effective date and transition guidance. The new revenue standard may be applied retrospectively to each prior period presented (“full retrospective method”) or retrospectively with the cumulative effect recognized as of the date of adoption (“modified retrospective method”). The Company plans to adopt the new standard for the year ending December 31, 2019 during the fourth quarter of 2019, using the modified retrospective method. Interim reporting under the new standard will not be required until 2020. The Company is continuing to evaluate the potential impact that the implementation of this standard will have on its consolidated financial statements, specifically related to the following items: • identification of performance obligations; • principal agent considerations; • whether costs to obtain a contract with a customer will be capitalized or expensed; • timing of revenue recognition; and • revenue disclosures which are expected to expand and may require judgment in certain areas. The Company has concluded that the discounts offered under the Company’s tiered pricing program for freelancer service fees result in a “material right” as that term is defined in ASC 606. However, the Company has not yet determined the potential adjustment amount. The Company currently does not expect significant changes to its systems and processes from the adoption of the new standard. In January 2016, the FASB issued Accounting Standards Update 2016-01, Financial Instruments (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 makes targeted improvements to GAAP regarding financial instruments. ASU 2016-01 eliminates the requirement to classify investments in equity securities with readily determinable fair values into trading or available-for-sale categories and requires those equity securities to be measured at fair value with changes in fair value recognized in net earnings rather than in other comprehensive income. ASU 2016-01 also revises certain presentation and disclosure requirements. Under ASU 2016-01, accounting for investments in debt securities remains essentially unchanged. The guidance is effective for the Company for fiscal year 2020 and interim periods beginning fiscal year 2021. Early adoption is not permitted. The Company has not yet evaluated the impact of adopting this guidance on its consolidated financial statements and related disclosures. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) , related to how an entity should recognize lease assets and lease liabilities. The guidance specifies that an entity that is a lessee under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting for leases by lessors is largely unchanged under the new guidance. In 2018, the FASB also approved an amendment that would permit the option to adopt the new standard prospectively as of the effective date, without adjusting comparative periods presented. The new standard becomes effective for the Company for the year ending on December 31, 2020. The Company anticipates the effect of adopting this update will be recognizing right-of-use assets and corresponding lease liabilities for leases where the Company is the lessee, primarily comprised of leases for facilities. The Company is continuing to assess all implications of this new guidance on its consolidated financial statements. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Liabilities Measured at Fair Value on a Recurring Basis | The following tables set forth the fair value of the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): March 31, 2019 Level I Level II Level III Total Cash equivalents Money market funds $ 32,028 $ — $ — $ 32,028 Commercial paper — 3,097 — 3,097 Marketable securities Commercial paper — 52,123 — 52,123 Treasury bills 4,960 — — 4,960 U.S. government securities 14,916 — — 14,916 Total financial assets $ 51,904 $ 55,220 $ — $ 107,124 December 31, 2018 Level I Level II Level III Total Cash equivalents—money market funds $ 117,138 $ — $ — $ 117,138 Total financial assets $ 117,138 $ — $ — $ 117,138 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Cash and Cash Equivalents | Cash and cash equivalents consisted of the following (in thousands): March 31, 2019 December 31, 2018 Cash $ 14,095 $ 11,990 Money market funds 32,028 117,138 Commercial paper 3,097 — Total cash and cash equivalents $ 49,220 $ 129,128 |
Marketable Securities | Marketable securities consisted of the following (in thousands): March 31, 2019 Commercial paper $ 52,123 Treasury bills 4,960 U.S. government securities 14,916 Total marketable securities $ 71,999 |
Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): March 31, 2019 December 31, 2018 Computer equipment and software $ 3,475 $ 3,189 Internal-use software and platform development 7,390 6,287 Leasehold improvements 6,509 5,783 Office furniture and fixtures 2,524 2,545 Total property and equipment 19,898 17,804 Less: accumulated depreciation (7,294 ) (6,989 ) Property and equipment, net $ 12,604 $ 10,815 |
Intangible Assets, Net | : March 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names $ 2,293 $ 2,293 $ — User relationships 18,678 13,341 5,337 Developed technology 10,356 10,356 — Domain names 529 529 — Total $ 31,856 $ 26,519 $ 5,337 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names $ 2,293 $ 2,293 $ — User relationships 18,678 12,674 6,004 Developed technology 10,356 10,356 — Domain names 529 529 — Total $ 31,856 $ 25,852 $ 6,004 |
Estimated Future Amortization Expense for Acquired Intangible Assets | he estimated future amortization expense for the acquired intangible assets was as follows (in thousands): March 31, 2019 Remainder of 2019 $ 2,001 2020 2,668 2021 668 Total estimated future amortization expense $ 5,337 |
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, 2019 December 31, 2018 Accrued compensation and related benefits $ 5,419 $ 9,314 Accrued freelancer costs 823 2,465 Accrued indirect taxes 1,888 1,630 Accrued vendor expenses 5,993 6,002 Accrued payment processing fees 811 715 Other 672 822 Total accrued expenses and other current liabilities $ 15,606 $ 20,948 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Aggregate Minimum Lease Payments Under Non-Cancelable Operating Leases | As of March 31, 2019, future aggregate minimum lease payments under the non-cancellable operating leases, net of sublease income, were as follows (in thousands): March 31, 2019 Remainder of 2019 $ 2,728 2020 5,861 2021 6,342 2022 6,588 2023 6,776 Thereafter 13,137 Less: sublease income (706 ) Total $ 40,726 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Carrying Value of Debt | The following table presents the carrying value of the Company’s debt obligations as of March 31, 2019 and December 31, 2018 (in thousands): March 31, 2019 December 31, 2018 First Term Loan—18 months of interest-only payments ending in March 2019 followed by 36 equal monthly installments of principal plus interest, maturing March 2022; interest at prime plus 0.25% per annum $ 15,000 $ 15,000 Second Term Loan—11 months of interest-only payments ending in October 2018 followed by 47 equal monthly installments of principal plus interest, maturing September 2022. As of September 30, 2018, the Company achieved trailing six-month EBITDA of at least $1.0 million; as a result, the interest-only repayment period extended to March 2019, followed by 42 equal monthly installments of principal plus interest; bears interest at prime plus 5.25% per annum. As a result of the IPO, the interest rate was reduced to prime plus 0.25% per annum 9,000 9,000 Line of credit—interest at prime with accrued interest due monthly; matures September 2020 25,000 — Total debt 49,000 24,000 Less: unamortized debt discount issuance costs (77 ) (90 ) Balance 48,923 23,910 Debt, current (32,569 ) (5,671 ) Debt, noncurrent $ 16,354 $ 18,239 Weighted-average interest rate 5.81 % 6.89 % |
Common Stock (Tables)
Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Summary of Common Stock Shares Reserved for Future Issuance | As of March 31, 2019 and December 31, 2018 , the Company had reserved shares of common stock for future issuance as follows: March 31, 2019 December 31, 2018 Options issued and outstanding 23,304,831 23,774,279 RSUs issued and outstanding 1,087,759 288,460 Warrant to purchase common stock 898,331 898,331 Remaining shares reserved for future issuances under 2018 Equity Incentive Plan 15,277,301 10,558,306 Remaining shares reserved for futures issuances under 2018 Employee Stock Purchase Plan 2,551,634 1,700,000 Total 43,119,856 37,219,376 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Activity under Stock Option Plans | The following table summarizes activity under the Company’s stock option plans: Number of Shares Underlying Outstanding Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Balances at December 31, 2018 23,774,279 $ 3.71 7.10 $ 342,262 Exercised (273,105 ) 2.81 Forfeited and canceled (196,343 ) 4.63 Balances at March 31, 2019 23,304,831 $ 3.72 6.86 $ 359,444 |
Summary of Activity under RSU Plans | The following table summarizes the RSU activity and related information under the 2018 EIP: Number of RSUs Outstanding Weighted-Average Grant Date Fair Value Unvested balance at December 31, 2018 288,460 $ 15.00 Granted 825,320 19.34 Vested (2,332 ) 15.00 Forfeited and canceled (23,689 ) 18.85 Unvested balance at March 31, 2019 1,087,759 $ 18.21 |
Summary of Components of Stock-Based Compensation Expense Recognized | The following table summarizes the components of stock-based compensation expense recognized in the condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2019 2018 Cost of revenue $ 144 $ 52 Research and development 1,380 550 Sales and marketing 642 340 General and administrative 2,129 946 Total stock-based compensation $ 4,295 $ 1,888 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods presented (in thousands, except share and per share data): Three Months Ended March 31, 2019 2018 Numerator: Net loss $ (4,728 ) $ (6,784 ) Denominator: Weighted-average shares used to compute net loss per share, basic and diluted 106,639,079 34,192,856 Net loss per share, basic and diluted $ (0.04 ) $ (0.20 ) |
Schedule of Potentially Dilutive Shares Excluded from Computation of Diluted Net Loss Per Share Attributable to Common Stockholders | The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive: As of March 31, 2019 2018 Options to purchase common stock 23,304,831 23,799,710 Common stock issuable upon conversion of redeemable convertible preferred stock — 61,279,079 Common stock issuable upon exercise of common stock warrants 898,331 45,286 Common stock issuable upon exercise and redeemable conversion of preferred stock warrants — 398,331 Common stock issuable upon vesting of restricted stock units 1,087,759 — Total 25,290,921 85,522,406 |
Segment and Geographical Info_2
Segment and Geographical Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Revenue by Type of Service | The following table sets forth total revenue by type of service for the periods presented (in thousands): Three Months Ended March 31, 2019 2018 Marketplace $ 60,903 $ 51,959 Managed services 8,021 7,259 Total revenue $ 68,924 $ 59,218 |
Revenue by Geographic Area Based on Billing Address of Freelancers and Clients | The following table sets forth total revenue by geographic area based on the billing address of its freelancers and clients for the periods presented (in thousands): Three Months Ended March 31, 2019 2018 Freelancers United States $ 11,888 $ 9,103 India 6,630 6,106 Philippines 4,577 3,955 Rest of world 21,695 19,025 Total freelancers 44,790 38,189 Clients United States 17,674 15,462 Rest of world 6,460 5,567 Total clients 24,134 21,029 Total revenue $ 68,924 $ 59,218 |
Organization and Description _2
Organization and Description of Business (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended |
Oct. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2015platform | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of operating platforms consolidated | platform | 2 | |
Subsidiary, Sale of Stock [Line Items] | ||
Consideration received on stock transaction | $ | $ 109.4 | |
IPO | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of shares issued in stock transaction | shares | 7,840,908 | |
Price per share of stock transaction (in dollars per share) | $ / shares | $ 15 | |
Underwriters' Option | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of shares issued in stock transaction | shares | 1,022,727 | |
Price per share of stock transaction (in dollars per share) | $ / shares | $ 1.05 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | $ 107,124 | $ 117,138 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 32,028 | 117,138 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,097 | |
Marketable securities | 52,123 | |
Treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 4,960 | |
U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 14,916 | |
Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 51,904 | 117,138 |
Level I | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 32,028 | 117,138 |
Level I | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Marketable securities | 0 | |
Level I | Treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 4,960 | |
Level I | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 14,916 | |
Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 55,220 | 0 |
Level II | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level II | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,097 | |
Marketable securities | 52,123 | |
Level II | Treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | |
Level II | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | |
Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | 0 |
Level III | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | $ 0 |
Level III | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Marketable securities | 0 | |
Level III | Treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | |
Level III | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other (income) expense, net | $ 479 | $ (249) |
Redeemable Convertible Preferred Stock Warrant Liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other (income) expense, net | $ (300) |
Balance Sheet Components - Cash
Balance Sheet Components - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||||
Cash | $ 14,095 | $ 11,990 | ||
Money market funds | 32,028 | 117,138 | ||
Commercial paper | 3,097 | 0 | ||
Total cash and cash equivalents | $ 49,220 | $ 129,128 | $ 26,461 | $ 21,595 |
Balance Sheet Components - Mark
Balance Sheet Components - Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Marketable Securities [Line Items] | ||
Total marketable securities | $ 71,999 | $ 0 |
Commercial paper | ||
Marketable Securities [Line Items] | ||
Total marketable securities | 52,123 | |
Treasury bills | ||
Marketable Securities [Line Items] | ||
Total marketable securities | 4,960 | |
U.S. government securities | ||
Marketable Securities [Line Items] | ||
Total marketable securities | $ 14,916 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 19,898 | $ 17,804 | |
Less: accumulated depreciation | (7,294) | (6,989) | |
Property and equipment, net | 12,604 | 10,815 | |
Depreciation expense | 800 | $ 400 | |
Computer equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 3,475 | 3,189 | |
Internal-use software and platform development | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 7,390 | 6,287 | |
Capitalized costs | 1,100 | $ 600 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 6,509 | 5,783 | |
Office furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 2,524 | $ 2,545 |
Balance Sheet Components - Inta
Balance Sheet Components - Intangible Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 31,856 | $ 31,856 |
Accumulated Amortization | 26,519 | 25,852 |
Net Carrying Amount | 5,337 | 6,004 |
Amortization expense of intangible assets | 700 | |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,293 | 2,293 |
Accumulated Amortization | 2,293 | 2,293 |
User relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 18,678 | 18,678 |
Accumulated Amortization | 13,341 | 12,674 |
Net Carrying Amount | $ 5,337 | $ 6,004 |
Remaining useful life | 2 years | 2 years 3 months |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 10,356 | $ 10,356 |
Accumulated Amortization | 10,356 | 10,356 |
Domain names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 529 | 529 |
Accumulated Amortization | $ 529 | $ 529 |
Balance Sheet Components - Esti
Balance Sheet Components - Estimated Future Amortization Expense for Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Remainder of 2019 | $ 2,001 | |
2020 | 2,668 | |
2021 | 668 | |
Net Carrying Amount | $ 5,337 | $ 6,004 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued compensation and related benefits | $ 5,419 | $ 9,314 |
Accrued freelancer costs | 823 | 2,465 |
Accrued indirect taxes | 1,888 | 1,630 |
Accrued vendor expenses | 5,993 | 6,002 |
Accrued payment processing fees | 811 | 715 |
Other | 672 | 822 |
Total accrued expenses and other current liabilities | $ 15,606 | $ 20,948 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)agreement | Mar. 31, 2018USD ($) | Dec. 31, 2018agreementoffice_space | |
Lessee, Lease, Description [Line Items] | |||
Number of non-cancellable operating lease agreements | agreement | 5 | ||
Lease payment, year 2 | $ 5,861 | ||
Lease payment, year 3 | 6,342 | ||
Lease payment, year 4 | 6,588 | ||
Lease payment, year 5 | 6,776 | ||
Lease payment, thereafter | 13,137 | ||
Accelerated depreciation | 300 | ||
Rent expense | 1,200 | $ 1,000 | |
Santa Clara | |||
Lessee, Lease, Description [Line Items] | |||
Total minimum lease payments | 14,300 | ||
Santa Clara | Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Total minimum lease payments | 1,400 | ||
Lease payment, year 1 | 1,400 | ||
Lease payment, year 2 | 1,400 | ||
Lease payment, year 3 | 1,400 | ||
Lease payment, year 4 | 1,400 | ||
Lease payment, year 5 | 1,400 | ||
Lease payment, thereafter | 1,400 | ||
Santa Clara | Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Total minimum lease payments | 1,800 | ||
Lease payment, year 1 | 1,800 | ||
Lease payment, year 2 | 1,800 | ||
Lease payment, year 3 | 1,800 | ||
Lease payment, year 4 | 1,800 | ||
Lease payment, year 5 | 1,800 | ||
Lease payment, thereafter | 1,800 | ||
San Francisco | |||
Lessee, Lease, Description [Line Items] | |||
Total minimum lease payments | 15,700 | ||
San Francisco | Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Total minimum lease payments | 1,000 | ||
Lease payment, year 1 | 1,000 | ||
Lease payment, year 2 | 1,000 | ||
Lease payment, year 3 | 1,000 | ||
Lease payment, year 4 | 1,000 | ||
Lease payment, year 5 | 1,000 | ||
San Francisco | Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Total minimum lease payments | 2,200 | ||
Lease payment, year 1 | 2,200 | ||
Lease payment, year 2 | 2,200 | ||
Lease payment, year 3 | 2,200 | ||
Lease payment, year 4 | 2,200 | ||
Lease payment, year 5 | 2,200 | ||
Chicago | |||
Lessee, Lease, Description [Line Items] | |||
Total minimum lease payments | 10,300 | ||
Number of sublease agreements | agreement | 2 | ||
Number of leased spaces | office_space | 2 | ||
Chicago | Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Total minimum lease payments | 500 | ||
Lease payment, year 1 | 500 | ||
Lease payment, year 2 | 500 | ||
Lease payment, year 3 | 500 | ||
Lease payment, year 4 | 500 | ||
Lease payment, year 5 | 500 | ||
Lease payment, thereafter | 500 | ||
Chicago | Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Total minimum lease payments | 2,000 | ||
Lease payment, year 1 | 2,000 | ||
Lease payment, year 2 | 2,000 | ||
Lease payment, year 3 | 2,000 | ||
Lease payment, year 4 | 2,000 | ||
Lease payment, year 5 | 2,000 | ||
Lease payment, thereafter | $ 2,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Aggregate Minimum Lease Payments Under Non-Cancelable Operating Leases (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2019 | $ 2,728 |
2020 | 5,861 |
2021 | 6,342 |
2022 | 6,588 |
2023 | 6,776 |
Thereafter | 13,137 |
Less: sublease income | (706) |
Total | $ 40,726 |
Commitments and Contingencies_3
Commitments and Contingencies - Letters of Credit (Details) $ in Millions | Mar. 31, 2019USD ($)letter | Dec. 31, 2018USD ($)letter |
Commitments and Contingencies Disclosure [Abstract] | ||
Letters Of Credit Held | letter | 4 | 3 |
Letters of Credit Outstanding, Amount | $ | $ 1.1 | $ 0.8 |
Debt - Summary of Carrying Valu
Debt - Summary of Carrying Value of Debt (Details) | 1 Months Ended | 3 Months Ended | 8 Months Ended | ||
Oct. 31, 2018 | Sep. 30, 2018USD ($)installment | Mar. 31, 2019USD ($)installment | Aug. 31, 2018 | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |||||
Total debt | $ 49,000,000 | $ 24,000,000 | |||
Less: unamortized debt discount issuance costs | (77,000) | (90,000) | |||
Balance | 48,923,000 | 23,910,000 | |||
Debt, current | (32,569,000) | (5,671,000) | |||
Debt, noncurrent | $ 16,354,000 | $ 18,239,000 | |||
Weighted-average interest rate | 5.81% | 6.89% | |||
First Term Loan | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 15,000,000 | $ 15,000,000 | |||
Interest only payments term | 18 months | ||||
Number of equal monthly installments of principal and interest | installment | 36 | ||||
First Term Loan | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Debt, variable rate | 0.25% | ||||
Second Term Loan | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 9,000,000 | 9,000,000 | |||
Interest only payments term | 11 months | ||||
Number of equal monthly installments of principal and interest | installment | 42 | 47 | |||
EBITDA, trailing period | 6 months | ||||
EBITDA | $ 1,000,000 | ||||
Second Term Loan | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Debt, variable rate | 0.25% | 5.25% | 5.25% | ||
Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 25,000,000 | $ 0 |
Debt - Additional Information (
Debt - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 8 Months Ended | 12 Months Ended | ||
Oct. 31, 2018 | Sep. 30, 2018USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Aug. 31, 2018 | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 49,000,000 | |||||
Net proceeds | $ 50,000,000 | |||||
Adjusted quick ratio | 1.75 | 1.30 | ||||
Adjusted quick ratio to maintain to reduce frequency of providing financial information | 2.50 | |||||
Proceeds from borrowings on debt | $ 25,000,000 | $ 0 | ||||
Outstanding debt | 48,923,000 | $ 23,910,000 | ||||
Outstanding line of credit | 25,000,000 | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | 25,000,000 | |||||
First Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 15,000,000 | |||||
First Term Loan | Prime Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt, variable rate | 0.25% | |||||
Second Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 9,000,000 | |||||
Second Term Loan | Prime Rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt, variable rate | 0.25% | 5.25% | 5.25% | |||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding debt | $ 24,000,000 | $ 24,000,000 |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock (Details) - shares | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Temporary Equity Disclosure [Abstract] | ||||
Redeemable convertible preferred stock, shares outstanding | 0 | 0 | 61,279,079 | 61,279,079 |
Conversion ratio | 100.00% | |||
Redeemable convertible preferred stock, shares issued | 0 | 0 |
Preferred and Common Stock Wa_2
Preferred and Common Stock Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | May 31, 2018 | |
Class of Warrant or Right [Line Items] | |||
Change in fair value of redeemable convertible preferred stock warrant liability | $ 0 | $ 318 | |
Change in fair value of Tides Foundation common stock warrant | $ 252 | $ 0 | |
Redeemable Convertible Preferred Stock Warrants | Series A-1 Redeemable Convertible Preferred Stock | |||
Class of Warrant or Right [Line Items] | |||
Number of shares issued upon exercisable of warrants | 124,506 | ||
Exercise price of warrants (in dollars per share) | $ 3.13 | ||
Redeemable Convertible Preferred Stock Warrants | Series A-2 Redeemable Convertible Preferred Stock | |||
Class of Warrant or Right [Line Items] | |||
Number of shares issued upon exercisable of warrants | 273,825 | ||
Common Stock Warrant | Tides Foundation | |||
Class of Warrant or Right [Line Items] | |||
Number of shares issued upon exercisable of warrants | 500,000 | ||
Exercise price of warrants (in dollars per share) | $ 0.01 |
Common Stock - Additional Infor
Common Stock - Additional Information (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Common Stock, voting rights | one vote per share | |
Common stock, shares authorized | 490,000,000 | 490,000,000 |
Common Stock - Summary of Commo
Common Stock - Summary of Common Stock Shares Reserved for Future Issuance (Details) - shares | Mar. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance | 43,119,856 | 37,219,376 |
2018 ESPP | ||
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance | 2,551,634 | 1,700,000 |
2018 Equity Incentive Plan | ||
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance | 15,277,301 | 10,558,306 |
Options issued and outstanding | ||
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance | 23,304,831 | 23,774,279 |
RSUs issued and outstanding | ||
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance | 1,087,759 | 288,460 |
Warrant to purchase common stock | ||
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance | 898,331 | 898,331 |
Stock-Based Compensation - Acti
Stock-Based Compensation - Activity under Stock Option Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Number of Shares Underlying Outstanding Options | ||
Balances at beginning of period (in shares) | 23,774,279 | |
Exercised (in shares) | (273,105) | |
Forfeited and canceled (in shares) | (196,343) | |
Balances at end of period (in shares) | 23,304,831 | 23,774,279 |
Weighted-Average Exercise Price | ||
Balances at beginning of period (in dollars per share) | $ 3.71 | |
Exercised (in dollars per share) | 2.81 | |
Forfeited and canceled (in dollars per share) | 4.63 | |
Balances at beginning of period (in dollars per share) | $ 3.72 | $ 3.71 |
Weighted-Average Remaining Contractual Term (Years) | 6 years 10 months 10 days | 7 years 1 month 6 days |
Aggregate Intrinsic Value | $ 359,444 | $ 342,262 |
Stock-Based Compensation - Ac_2
Stock-Based Compensation - Activity under RSU Plans (Details) - RSUs | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Number of RSUs Outstanding | |
Unvested Balance at beginning of period (in shares) | shares | 288,460 |
Granted (in shares) | shares | 825,320 |
Vested (in shares) | shares | (2,332) |
Forfeited and Canceled (in shares) | shares | (23,689) |
Unvested Balance at end of period (in shares) | shares | 1,087,759 |
Weighted-Average Grant Date Fair Value | |
Unvested Balance at beginning of period (in dollars per share) | $ / shares | $ 15 |
Granted (in dollars per share) | $ / shares | 19.34 |
Vested (in dollars per share) | $ / shares | 15 |
Forfeited and Canceled (in dollars per share) | $ / shares | 18.85 |
Unvested Balance at end of period (in dollars per share) | $ / shares | $ 18.21 |
Stock-Based Compensation - Equi
Stock-Based Compensation - Equity Incentive Plans, Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Jan. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jul. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock shares reserved for future issuance | 43,119,856 | 37,219,376 | |||
Share-based expense | $ 4,295 | $ 1,888 | |||
Chief Executive Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Option to purchase shares of common stock, granted | 1,860,000 | ||||
Share-based expense | $ 500 | ||||
2018 EIP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Increase in number of shares available for issuance | 5,322,716 | ||||
Common stock shares reserved for future issuance | 15,277,301 | 10,558,306 |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - shares | 1 Months Ended | ||
Jan. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock shares reserved for future issuance | 43,119,856 | 37,219,376 | |
2018 ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in number of shares available for issuance | 851,634 | ||
Common stock shares reserved for future issuance | 2,551,634 | 1,700,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | $ 4,295 | $ 1,888 |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 144 | 52 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 1,380 | 550 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 642 | 340 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | $ 2,129 | $ 946 |
Net Loss per Share - Summary of
Net Loss per Share - Summary of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net loss | $ (4,728) | $ (6,784) |
Denominator: | ||
Weighted-average shares used to compute net loss per share, basic and diluted (in shares) | 106,639,079 | 34,192,856 |
Net loss per share, basic and diluted (in dollars per share) | $ (0.04) | $ (0.20) |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders | 25,290,921 | 85,522,406 |
Options to Purchase Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders | 23,304,831 | 23,799,710 |
Common Stock Issuable upon Conversion of Redeemable Convertible Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders | 0 | 61,279,079 |
Common Stock Issuable upon Exercise of Common Stock Warrant | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders | 898,331 | 45,286 |
Common Stock Issuable upon Exercise and Redeemable Conversion of Preferred Stock Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders | 0 | 398,331 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders | 1,087,759 | 0 |
Segment and Geographical Info_3
Segment and Geographical Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Segment and Geographical Info_4
Segment and Geographical Information - Revenue by Type of Service (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 68,924 | $ 59,218 |
Marketplace | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 60,903 | 51,959 |
Managed services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 8,021 | $ 7,259 |
Segment and Geographical Info_5
Segment and Geographical Information - Revenue by Geographic Area Based on Billing Address of Freelancers and Clients (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 68,924 | $ 59,218 |
Freelancers | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 44,790 | 38,189 |
Freelancers | United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 11,888 | 9,103 |
Freelancers | India | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 6,630 | 6,106 |
Freelancers | Philippines | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 4,577 | 3,955 |
Freelancers | Rest of world | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 21,695 | 19,025 |
Clients | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 24,134 | 21,029 |
Clients | United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 17,674 | 15,462 |
Clients | Rest of world | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 6,460 | $ 5,567 |
401(k) Plan (Details)
401(k) Plan (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Company matching cash contributions | 50.00% | |
Maximum annual contributions per employee | $ 5,000 | |
Expense for matching contributions | $ 900,000 | $ 800,000 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | May 08, 2019quartershares | Apr. 30, 2019USD ($)shares | Mar. 31, 2019shares |
RSUs | |||
Subsequent Event [Line Items] | |||
Number of shares granted | 825,320 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Repayment of line of credit | $ | $ 25 | ||
Proceeds from exercise of common stock warrant | $ | $ 1.2 | ||
Number of warrants exercised (in shares) | 398,331 | ||
Number of warrants surrendered (in shares) | 64,646 | ||
Number of shares issued related to exercise of common stock warrant (in shares) | 333,685 | ||
Subsequent Event | RSUs | Chief Marketing and Product Officer | |||
Subsequent Event [Line Items] | |||
Number of shares granted | 61,760 | ||
Number of quarters in which the units vest | quarter | 16 |