Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 01, 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 | SVMK | |
Entity Registrant Name | SVMK Inc. | |
Entity Central Index Key | 0001739936 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Small Business | false | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 130,101,953 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 165,910 | $ 153,807 |
Accounts receivable, net of allowance of $173 and $115 | 7,189 | 7,336 |
Deferred commissions, current | 2,248 | 1,981 |
Prepaid expenses and other current assets | 15,219 | 7,081 |
Total current assets | 190,566 | 170,205 |
Property and equipment, net | 45,532 | 117,718 |
Operating lease right-of-use assets | 60,266 | 0 |
Capitalized internal-use software, net | 33,710 | 33,280 |
Acquisition intangible assets, net | 8,299 | 9,324 |
Goodwill | 336,861 | 336,861 |
Deferred commissions, non-current | 3,932 | 3,317 |
Other assets | 8,554 | 8,643 |
Total assets | 687,720 | 679,348 |
Current liabilities: | ||
Accounts payable | 2,983 | 2,804 |
Accrued expenses and other current liabilities | 11,937 | 9,692 |
Accrued compensation | 11,730 | 20,070 |
Deferred revenue | 110,691 | 101,236 |
Operating lease liabilities, current | 6,139 | 0 |
Debt, current | 1,900 | 1,900 |
Total current liabilities | 145,380 | 135,702 |
Deferred tax liabilities | 4,341 | 4,246 |
Debt, non-current | 215,040 | 215,515 |
Financing obligation on leased facility | 0 | 92,009 |
Operating lease liabilities, non-current | 82,528 | 0 |
Other non-current liabilities | 5,436 | 12,493 |
Total liabilities | 452,725 | 459,965 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Preferred stock ($0.00001 par value; 100,000 shares authorized; no shares issued and outstanding) | 0 | 0 |
Common stock ($0.00001 par value; 800,000 shares authorized; 128,060 and 125,818 shares issued and outstanding) | 1 | 1 |
Additional paid-in capital | 582,652 | 551,937 |
Accumulated other comprehensive loss | (306) | (287) |
Accumulated deficit | (347,352) | (332,268) |
Total stockholders’ equity | 234,995 | 219,383 |
Total liabilities and stockholders’ equity | $ 687,720 | $ 679,348 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Allowance for accounts receivable | $ 173 | $ 115 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 800,000,000 | 800,000,000 |
Common stock, shares issued (in shares) | 128,060,000 | 125,818,000 |
Common stock, shares outstanding (in shares) | 128,060,000 | 125,818,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Income Statement [Abstract] | |||
Revenue | $ 68,641 | $ 58,491 | |
Cost of revenue | [1],[2] | 17,530 | 18,063 |
Gross profit | 51,111 | 40,428 | |
Operating expenses: | |||
Research and development | [2] | 20,806 | 17,940 |
Sales and marketing | [1],[2] | 26,050 | 17,421 |
General and administrative | [2] | 20,556 | 13,018 |
Restructuring | (66) | 5 | |
Total operating expenses | 67,346 | 48,384 | |
Loss from operations | (16,235) | (7,956) | |
Interest expense | 3,659 | 7,094 | |
Other non-operating income (expense), net | 1,979 | 633 | |
Loss before income taxes | (17,915) | (14,417) | |
Provision for (benefit from) income taxes | (138) | 300 | |
Net loss | $ (17,777) | $ (14,717) | |
Net loss per share, basic and diluted | $ (0.14) | $ (0.15) | |
Weighted-average shares used in computing basic and diluted net loss per share | 126,786 | 101,212 | |
[1] | Includes amortization of acquisition intangible assets as follows: Three Months Ended March 31, (in thousands) 2019 2018 Cost of revenue $488 $488 Sales and marketing 537 604 Amortization of acquisition intangible assets $1,025 $1,092 | ||
[2] | Includes stock-based compensation, net of amounts capitalized as follows: Three Months Ended March 31, (in thousands) 2019 2018 Cost of revenue $1,096 $658 Research and development 4,766 3,447 Sales and marketing 2,780 768 General and administrative 6,469 3,667 Stock-based compensation, net of amounts capitalized $15,111 $8,540 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Allocated share-based compensation expense | $ 15,111 | $ 8,540 |
Amortization of acquisition intangible assets | 1,025 | 1,092 |
Cost of revenue | ||
Allocated share-based compensation expense | 1,096 | 658 |
Amortization of acquisition intangible assets | 488 | 488 |
Research and development | ||
Allocated share-based compensation expense | 4,766 | 3,447 |
Sales and marketing | ||
Allocated share-based compensation expense | 2,780 | 768 |
Amortization of acquisition intangible assets | 537 | 604 |
General and administrative | ||
Allocated share-based compensation expense | $ 6,469 | $ 3,667 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Statement Of Income And Comprehensive Income [Abstract] | |||
Net loss | $ (17,777) | $ (14,717) | |
Other comprehensive loss: | |||
Foreign currency translation losses | [1] | (19) | (7) |
Total other comprehensive loss | [1] | (19) | (7) |
Total comprehensive loss | $ (17,796) | $ (14,724) | |
[1] | Net of tax effect which was not material. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | |
Beginning Balance at Dec. 31, 2017 | $ 40,043 | $ 1 | $ 217,594 | $ 19 | $ (177,571) | |
Beginning balance, Shares at Dec. 31, 2017 | 101,383,000 | |||||
Common stock issued upon stock option exercise | 1 | $ 0 | 1 | 0 | 0 | |
Common stock issued upon stock option exercise, Shares | 0 | |||||
Common stock issued upon vesting of restricted stock units, net of tax withholding | (1,765) | $ 0 | (1,765) | 0 | 0 | |
Common stock issued upon vesting of restricted stock units, net of tax withholding, Shares | 181,000 | |||||
Stock-based compensation expense | 8,868 | $ 0 | 8,868 | 0 | 0 | |
Comprehensive loss | (7) | [1] | 0 | 0 | (7) | 0 |
Net loss | (14,717) | 0 | 0 | 0 | (14,717) | |
Ending balance at Mar. 31, 2018 | 32,423 | $ 1 | 224,655 | 12 | (192,245) | |
Ending balance, Shares at Mar. 31, 2018 | 101,564,000 | |||||
Cumulative-effect adjustment upon adoption | Accounting Standards Update 2017-09 | 0 | $ 0 | (43) | 0 | 43 | |
Beginning Balance at Dec. 31, 2018 | 219,383 | $ 1 | 551,937 | (287) | (332,268) | |
Beginning balance, Shares at Dec. 31, 2018 | 125,818,000 | |||||
Common stock issued upon stock option exercise | $ 14,419 | $ 0 | 14,419 | 0 | 0 | |
Common stock issued upon stock option exercise, Shares | 1,327,784 | 1,328,000 | ||||
Common stock issued upon vesting of restricted stock units, Shares | 898,000 | |||||
Stock-based compensation expense | $ 16,064 | $ 0 | 16,064 | 0 | 0 | |
Comprehensive loss | (19) | [1] | 0 | 0 | (19) | 0 |
Other | 232 | $ 0 | 232 | 0 | 0 | |
Other, Shares | 16,000 | |||||
Net loss | (17,777) | $ 0 | 0 | 0 | (17,777) | |
Ending balance at Mar. 31, 2019 | 234,995 | $ 1 | 582,652 | (306) | (347,352) | |
Ending balance, Shares at Mar. 31, 2019 | 128,060,000 | |||||
Cumulative-effect adjustment upon adoption | ASC 842 | $ 2,693 | $ 0 | $ 0 | $ 0 | $ 2,693 | |
[1] | Net of tax effect which was not material. |
CONDENSED CONSOLIDATED STATEM_5
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 | $ (17,777) | $ (14,717) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 9,655 | 11,979 |
Non-cash leases expense | 1,338 | 0 |
Stock-based compensation expense, net of amounts capitalized | 15,111 | 8,540 |
Amortization of debt discount and issuance costs | 75 | 242 |
Deferred income taxes | 95 | 143 |
Gain on sale of a private company investment | (1,001) | (999) |
Other | (154) | 175 |
Changes in assets and liabilities: | ||
Accounts receivable | 163 | (763) |
Prepaid expenses and other assets | (2,184) | (1,857) |
Accounts payable and accrued liabilities | 2,991 | 1,099 |
Accrued interest on financing lease obligation, net of payments | 0 | (358) |
Accrued compensation | (8,359) | (7,449) |
Deferred revenue | 9,575 | 9,728 |
Operating lease liabilities | (1,725) | 0 |
Net cash provided by operating activities | 7,803 | 5,763 |
Cash flows from investing activities | ||
Purchases of property and equipment | (581) | (880) |
Capitalized internal-use software | (3,150) | (2,640) |
Proceeds from sale of a private company investment | 1,001 | 999 |
Net cash used in investing activities | (2,730) | (2,521) |
Cash flows from financing activities | ||
Proceeds from stock option exercises | 7,640 | 1 |
Employee payroll taxes paid for net share settlement of restricted stock units | 0 | (1,765) |
Repayment of debt | (550) | (750) |
Net cash provided by (used in) financing activities | 7,090 | (2,514) |
Effect of exchange rate changes on cash | (44) | 0 |
Net increase in cash, cash equivalents and restricted cash | 12,119 | 728 |
Cash, cash equivalents and restricted cash at beginning of period | 154,371 | 35,345 |
Cash, cash equivalents and restricted cash at end of period | 166,490 | 36,073 |
Supplemental cash flow data: | ||
Interest paid for term debt | 3,423 | 5,126 |
Interest paid for financing obligation on leased facility | 0 | 2,038 |
Cash paid for operating leases | 3,438 | 0 |
Income taxes paid (refunds received) | 247 | (33) |
Non-cash investing and financing transactions: | ||
Stock compensation included in capitalized software costs | 953 | 327 |
Proceeds receivable from stock option exercises | 6,779 | 0 |
Accrued unpaid capital expenditures | 517 | 1,893 |
Derecognized financing obligation related to building due to adoption of ASC 842 | 92,009 | 0 |
Derecognized building due to adoption of ASC 842 | 71,781 | 0 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents at beginning of period | 153,807 | 35,345 |
Restricted cash (included in other assets) at beginning of period | $ 564 | $ 0 |
Restricted Cash, Noncurrent Asset, Statement of Financial Position Extensible List | us-gaap:OtherAssetsNoncurrent | us-gaap:OtherAssetsNoncurrent |
Cash, cash equivalents and restricted cash at beginning of period | $ 154,371 | $ 35,345 |
Cash and cash equivalents at end of period | 165,910 | 36,073 |
Restricted cash (included in other assets) at end of period | $ 580 | $ 0 |
Restricted Cash, Noncurrent Asset, Statement of Financial Position Extensible List | us-gaap:OtherAssetsNoncurrent | us-gaap:OtherAssetsNoncurrent |
Cash, cash equivalents and restricted cash at end of period | $ 166,490 | $ 36,073 |
Company Overview and Basis of P
Company Overview and Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Company Overview and Basis of Presentation | 1. Company Overview and Basis of Presentation Business SVMK Inc. (the “Company”) is a global provider of survey software products and purpose-built solutions. The Company was incorporated in 2011 as a Delaware corporation and is the successor to operations originally begun in 1999. The Company’s headquarters are located in the United States and its international operations are primarily based in Ireland and Canada. Principles of Consolidation and Basis of Presentation The accompanying interim condensed consolidated balance sheet as of March 31, 2019, the statements of operations, comprehensive loss and stockholders’ equity for the three months ended March 31, 2019 and 2018, and cash flows for the three months ended March 31, 2019 and 2018 are unaudited. Such condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. These condensed consolidated financial statements include the results of operations of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated . These condensed consolidated financial statements do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. In management’s opinion, the condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2019, the results of operations for the three months ended March 31, 2019 and 2018, and cash flows for the three months ended March 31, 2019 and 2018. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year or any other future interim or annual periods. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form-10K filed with the SEC on February 26, 2019. On January 1, 2019, the Company adopted the requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting periods covered by the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable. The Company’s most significant estimates and judgments involve valuation of the Company’s stock-based awards, including the determination of fair value of common stock prior to the completion of its initial public offering (“IPO”), valuation of deferred income tax assets, estimating the period of benefit for deferred commissions, valuation of acquired goodwill and intangibles from acquisitions, tax contingencies, legal contingencies and incremental borrowing rate for operating leases. Segment Information The Company operates as a single operating segment. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews the Company’s operating results on a consolidated basis in order to make decisions about allocating resources and assessing performance for the entire company. The CODM uses one measure of profitability and does not segment the Company’s business for internal reporting. See Note 12 for additional information regarding the Company’s revenue by geographic area. Related Party Transactions Certain members of the Company’s Board of Directors (“Board”) serve as board members, are executive officers of and/or (in some cases) are investors in companies that are customers and/or vendors of the Company. The Company recognized revenue from sales of its products to a substantial stockholder of $0.4 million and $0.4 million during the three months ended March 31, 2019 and 2018, respectively. Sales to a substantial stockholder represented less than 1% of the Company’s total revenue in each of the periods presented. The Company incurred related party expenses of $0.3 million and $0.1 million during the three months ended March 31, 2019 and 2018, respectively. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Revenue Recognition and Deferred Revenue The Company generates substantially all of its revenue from the sale of subscriptions to its survey software products including subscriptions to its purpose-built solutions. The revenue the Company generates from one purpose-built solution that is delivered and recognized at a point in time is not significant. The Company normally sells each of these products in separate contracts to its customers and each product, including purpose-built solutions, is distinct. The Company’s policy is to exclude sales and other indirect taxes when measuring the transaction price of its subscription agreements. The Company accounts for revenue contracts with customers through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the Company satisfies a performance obligation. For subscription products, the Company provides customers the option of monthly, annual or multi-year contractual terms. In general, the Company’s customers elect contractual terms of one year or less. Subscription revenue is recognized on a daily basis ratably over the related subscription term beginning on the date the Company provides access to its survey product. Access to the Company’s subscription product is an obligation representing a series of distinct services (and which comprise a single performance obligation) that the Company provides to its end customer over the subscription term. The Company recognizes the majority of its revenue ratably because the customer benefits from access to the Company’s subscription products throughout the subscription term. The Company generally invoices its customers at the beginning of the term on a monthly or annual basis. The Company's contracts are generally non-cancellable and do not contain refund-type provisions. The Company’s contracts do not contain a significant amount of variable consideration as the price of its subscription offerings are generally fixed at contract inception. Based on the invoicing structure and related subscription term, the Company determined its contracts do not contain a financing component. The Company applied the practical expedient provided by ASU 2014-09, Revenue from Contracts with Customers, (“ The Company records contract liabilities to deferred revenue when cash payments are received or due. Deferred revenue consists of the unearned portion of customer billings. The Company recognized into revenue $45.1 million and $37.8 million during the three months ended March 31, 2019 and 2018, respectively, that was included in the deferred revenue balances at the beginning of each respective periods. As of March 31, 2019, future estimated revenue related to performance obligations that are unsatisfied or partially unsatisfied at the end the reporting period was $121.3 million. The substantial majority of the unsatisfied performance obligations will be satisfied over the next twelve months. Deferred Commissions Certain commissions earned by the Company’s salesforce are considered to be incremental and recoverable costs of obtaining a contract with a customer. Such costs are deferred and amortized on a straight-line basis over their estimated period of benefit which is generally estimated as four years. The period of benefit was estimated by considering factors such as historical customer attrition rates, the useful life of the Company’s technology, and the impact of competition in its industry. Amortization of deferred commissions, included in sales and marketing expense line within the statements of operations was $0.5 million and $0.3 million during the three months ended March 31, 2019 and 2018, respectively. There was no impairment loss in relation to the deferred commissions for any period presented. Stock-Based Compensation The Company recognizes stock-based compensation expense for all share-based payments to employees based on the grant-date fair value of the Company’s common stock estimated in accordance with the provisions of ASC 718, Compensation‑Stock Compensation Stock Options and ESPP : The Company estimates the fair values of its stock options and shares issuable under the ESPP using the Black-Scholes-Merton option-pricing model, which require the input of the following key assumptions: • Expected Term : As the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior, the Company determines the expected term based on the average period the stock options or shares issuable under the ESPP are expected to remain outstanding. The expected term for stock options is generally calculated as the midpoint of the applicable vesting term and contractual expiration. For shares issuable under the ESPP, the expected term is the applicable purchase periods within an offering period. • Expected Volatility : As the Company does not have sufficient trading history of its common stock, stock price volatility is estimated at the applicable grant date by taking the weighted-average historical volatility of a group of comparable publicly-traded companies over a period equal to the expected life of the options. • Expected Dividend Rate : The Company has not paid and does not anticipate paying cash dividends on its shares of common stock in the foreseeable future; therefore, the expected dividend yield is assumed to be zero. • Risk-Free Interest Rate : The Company determined the risk-free interest rate by using a weighted average assumption equivalent to the expected term based on the U.S. Treasury constant maturity rate as of the date of grant. On September 28, 2018, the Company completed its IPO. Due to the absence of an active market for the Company’s common stock prior to its IPO, the Company obtained third-party valuations (prepared contemporaneously in connection with grants of share-based payments made prior to the Company’s IPO) to estimate the fair value of its common stock for purposes of measuring stock-based compensation expense to be recognized. The third-party valuations were prepared using methodologies, approaches, and assumptions consistent with the American Institute of Certified Public Accountants (“AICPA”) Accounting & Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation For valuations subsequent to the Company’s IPO, its board of directors determines the fair value of each share of underlying common stock based on the closing price of the Company’s common stock as reported on the date of the grant. Restricted Stock Units and Restricted Stock Awards : The fair value of the restricted stock units (including those that are performance-based) and restricted stock awards was determined based on the fair value of the Company’s common stock on the grant date. Beginning in the second quarter of 2015, the Company granted performance-based restricted stock units (“Performance RSUs”) that vest upon the satisfaction of both a service condition and a Performance Vesting Condition. The Performance Vesting Condition occurred upon the effectiveness of the registration statement for the Company's IPO, which was September 25, 2018. As a result, the Company recognized the cumulative amount of unrecognized stock-based compensation expense of $89.9 million for services already rendered using the accelerated attribution method. As of March 31, 2019, the remaining unamortized stock-based compensation related to these awards was $19.8 million, which the Company expects to recognize on an accelerated basis over the remaining weighted-average requisite service periods of 1.4 years (see Note 7 for additional discussion). Business Combinations When the Company acquires a business, the purchase consideration is allocated to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated respective fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require the Company to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. The Company’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to non-operating income (expense) in the condensed consolidated statements of operations. Impairment of Long-Lived Assets Long-lived assets with finite lives include property and equipment, capitalized internal-use software and acquisition intangible assets. Long-lived assets are depreciated or amortized over their estimated useful lives which are as follows: Building 40 years Computer equipment 2 to 5 years Furniture, fixtures, and other assets 5 years Leasehold improvements Shorter of remaining lease term or 5 years Purchased software 3 years Capitalized internal-use software 3 years Acquisition intangible assets: customer relationships 5 to 7 years Acquisition intangible assets: trade name 2 to 10 years Acquisition intangible assets: technology 3 to 8 years The Company continually evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of depreciable or amortizable long-lived assets may warrant revision or that the remaining balance may not be recoverable. When factors indicate that long-lived assets should be evaluated for possible impairment, the Company uses an estimate of the related undiscounted future cash flows over the remaining life of the long-lived assets in measuring whether they are recoverable. If the estimated undiscounted future cash flows do not exceed the carrying value of the asset, a loss is recorded as the excess of the asset’s carrying value over its fair value. The Company did not recognize any impairment of long-lived assets during each of the three months ended March 31, 2019 and 2018. The Company believes that the carrying values of long-lived assets as of March 31, 2019 are recoverable. Goodwill is not amortized but rather tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Goodwill impairment is recognized when the carrying value of goodwill exceeds the implied fair value of the Company. The Company did not recognize any impairment of goodwill during each of the three months ended March 31, 2019 and 2018. Foreign Currencies The functional currency of the Company’s foreign subsidiaries is generally the U.S. Dollar. Monetary assets and liabilities are remeasured using foreign currency exchange rates at the end of the period, and non-monetary assets are remeasured based on historical exchange rates. Gains and losses due to foreign currency are the result of either the remeasurement of subsidiary balances or transactions denominated in currencies other than the foreign subsidiaries’ functional currency and are included in other non-operating income (expense), net in the statement of operations. For subsidiaries where the functional currency is the local currency, the assets and liabilities of those foreign subsidiaries are translated from their respective functional currencies into U.S. Dollars at the rates in effect at the balance sheet date and revenue and expense amounts are translated at a rate approximating the average exchange rate for the period. Foreign currency translation gains and losses are recorded to accumulated other comprehensive income (loss). Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and accounts receivable. The Company places its cash and cash equivalents in banks, primarily in checking accounts and such amounts may at times exceed the federally insured limits. Cash equivalents consist of short-term money market funds (for which the Company had none in any of the periods presented), which are managed by reputable financial institutions. For purposes of its customer concentration disclosure, the Company defines a customer as an organization. An organization may consist of an individual paying user, multiple paying users within an organization or the organization itself. No single customer accounted for more than 10% of revenue during each of the three months ended March 31, 2019 and 2018. No customers accounted for more than 10% of accounts receivable, net as of March 31, 2019 and December 31, 2018. Fair Value of Financial Instruments The Company applies the provisions of ASC 820, Fair Value Measurement Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the condensed consolidated statements of comprehensive income until realized. See Note 4 for additional disclosures regarding fair value measurements. Private Company Investments The Company accounts for private company investments, without readily determinable fair values, either under the equity or the cost method. Investments through which the Company exercises significant influence but does not have control over the investee are accounted for under the equity method. Investments through which the Company is not able to exercise significant influence over the investee are measured and accounted for using an alternative measurement basis of a) the carrying value of a security at cost, b) less any impairment and c) plus or minus any qualifying observable price changes (with a same or similar security from the same issuer). These securities were previously accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment. If an observable price change or impairment is recognized on the Company’s private company investments, such investments would then be classified as a Level 3 financial instrument within the fair value hierarchy based on the nature of the fair value inputs. The Company classifies private company investments as other assets on the condensed consolidated balance sheets as those investments do not have stated contractual maturity dates. Any adjustments to the carrying value are recognized in other non-operating income (expense), net in the condensed consolidated statements of operations. As of March 31, 2019 and December 31, 2018, respectively, the carrying value of the Company’s private company investment at cost was $3.6 million. There were no impairments or observable price changes for the Company’s private company investment during each of the three months ended March 31, 2019 and 2018. Impairment of Investments The Company periodically reviews its investments for impairment. If the Company concludes that any of these investments are impaired, the Company determines whether such impairment is other-than-temporary. Factors considered to make such determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period and the Company’s intent to sell. For debt securities, the Company also considers whether (1) it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, and (2) the amortized cost basis cannot be recovered as a result of credit losses. If the investment is considered to be other-than-temporarily impaired, the Company will record the investment at fair value by recognizing an impairment within other non-operating income (expense) in the condensed consolidated statements of operations and establishing a new carrying value for the investment. Derivative Financial Instruments From time to time, the Company may use derivative financial instruments consisting of interest rate swaps to manage cash flow exposure under its credit facilities and accounts for such derivative financial instruments in accordance with ASC 815, Accounting for Derivative Instruments and Hedging Activities Cash and Cash Equivalents Cash and cash equivalents primarily consist of cash on deposit with banks and investments in money market funds (for which the Company had none in any of the periods presented) with maturities of 90 days or less from the date of purchase. The Company also classifies amounts in transit from payment processors for customer credit card and debit card transactions as cash equivalents, because such amounts generally convert to cash within five days with little or no default risk. Accounts Receivable Accounts receivable are customer obligations that arise due to the time taken to settle transactions through direct customer payments. The Company bills in advance for monthly contracts and generally bills annually in advance for contracts with terms of one year or longer when it has an unconditional contractual right to consideration. The Company also recognizes an immaterial amount of contract assets, or unbilled receivables, primarily relating to rights to consideration for services completed but not billed at the reporting date. Unbilled receivables are classified as receivables when the Company has the right to invoice the customer. The Company records an allowance for doubtful accounts based upon its assessment of various factors including the Company’s historical experience, the age of a customers’ accounts receivable balance, a customers’ credit quality, current economic conditions, historical bad debt expense trends and other factors that may affect a customers’ ability to pay to determine the level of allowance required. Amounts deemed uncollectible are recorded to the allowance for doubtful accounts with an offsetting charge in the statements of operations. Property and Equipment Property and equipment, excluding buildings capitalized under build-to-suit lease arrangements which are discussed below, are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Expenditures that improve an asset or extend its estimated useful life are capitalized. Costs of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Capitalized Internal-Use Software and Website Development Costs The Company incurs development costs relating to its online survey platform as well as other software solely for internal-use. Costs relating to the planning and post‑implementation phases of development are expensed as incurred. Costs incurred in the development phase are capitalized and included in capitalized internal-use software, net and amortized over their estimated useful life, generally three years. Maintenance and training costs are expensed as incurred. Leases At contract inception, the Company performs an evaluation to determine if it is conveyed the right to control the use of identified property, plant or equipment. To the extent such rights of control are conveyed, the Company further makes an assessment as to the applicable lease classification. The Company leases facilities, datacenters and equipment, which are generally accounted for as operating leases (as further described in Note 8). Lease accounting subsequent to the adoption of ASC 842 Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, current, and operating lease liabilities, non-current, in the condensed consolidated balance sheet. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating ROU assets and lease liabilities are recognized at the lease inception date based on the present value of lease payments over the lease term discounted based on the more readily determinable of (i) the rate implicit in the lease or (ii) the Company’s incremental borrowing rate (which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease). Because the Company’s operating leases generally do not provide an implicit rate, an analysis of publicly traded debt securities of companies with credit and financial profiles similar to the Company’s is used to estimate the incremental borrowing rate. The Company’s operating lease terms have generally ranged between 1 year to 12 years and may include options to extend the lease term, generally at market rates. The Company’s ROU assets are measured based on the corresponding operating lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) tenant incentives under the lease. The Company does not assume renewals or early terminations unless it is reasonably certain to exercise these options at commencement. The Company does not allocate consideration between lease and non-lease components. Lease expense is recognized on a straight-line basis over the lease term. For short-term leases, the Company records lease expense in its condensed consolidated statements of operations on a straight-line basis over the lease term and records variable lease payments as incurred. Lease accounting prior to the adoption of ASC 842 Except for the Company’s San Mateo building lease which was accounted for as a build-to-suit lease, the Company leased facilities, datacenters, and equipment which were accounted for as operating leases. Rent escalations and concession provisions were considered in determining the total estimated lease expense to be incurred and which was recognized over the lease term on a straight-line basis. The Company recorded the difference between the rent paid and the straight-line rent as a deferred rent liability in the accompanying condensed consolidated balance sheets. As of December 31, 2018, the deferred rent balance was $7.5 million ($0.3 million included in accrued expenses and other current liabilities and $7.2 million in other non-current liabilities). For certain build-to-suit lease arrangements, including the San Mateo building lease, the Company was deemed to be the building owner during the construction period for accounting purposes. As a result, the Company recorded an asset and liability for estimated construction costs incurred under a build-to-suit lease arrangement where the Company was involved in the construction of structural improvements or took construction risk prior to commencement of the lease. Subleases The Company additionally had entered into subleases for unoccupied leased office space. To the extent there were losses associated with the sublease, they were recognized in the period the sublease is executed. Gains are recognized over the sublease term. Any sublease payments received in excess of the straight-line rent payments for the sublease were recorded in other non-operating income (expense). The Company’s sublease agreements do not contain any variable payments, material residual value guarantees or material restrictive covenants. Legal and Other Contingencies The Company accrues a liability for either claims arising in the ordinary course of business, assessments resulting from non-income-based audits or litigation when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. See Note 9 for additional information pertaining to legal and other contingencies. Liability for Sabbatical Leave The Company provides a sabbatical leave program to its employees whereby the Company’s full-time employees are eligible for four weeks of paid time-off after four years of continuous service. The Company accounts for sabbatical leaves in accordance with ASC 710, Compensated Absences Advertising and Promotion Costs Expenses related to advertising, marketing and promotion of the Company’s product offerings are expensed as incurred. These costs mainly consist of search engine marketing related costs. The Company incurred $6.3 million and $4.7 Cost of Revenue Cost of revenue consists primarily of expenses associated with the delivery and distribution of the Company’s platform for users of the Company’s online survey platform. Cost of revenue generally consist of infrastructure costs, personnel costs and other related costs. Infrastructure costs generally include expenses related to the operation of the Company’s data centers, such as data center equipment depreciation and facility costs (such as co-location rentals), website hosting costs, credit card processing fees, amortization of capitalized software, charity donations and external sample costs. Personnel costs include salaries and bonuses, stock-based compensation expense, other employee benefits and travel-related expenses for employees whose primary responsibilities relate to supporting the Company’s infrastructure and delivering user support. Other related costs include amortization of acquired developed technology intangible assets and allocated overhead. Research and Development Research and development costs primarily include personnel costs (including salaries, bonuses, stock-based compensation expense, other employee benefits and travel-related expenses), costs for third-party consultants, depreciation of equipment used in research and development activities and allocated overhead. Except for costs associated with the development of internal-use software, research and development costs are expensed as incurred. Sales and Marketing Sales and marketing expenses relate to both self-serve and outbound sales activities. Sales and marketing expenses generally are comprised of personnel costs (including salaries, sales commissions and amortization of deferred sales commissions, stock-based compensation expense, other employee benefits and travel-related expenses), costs related to brand campaign fees, lead generation fees, amortization of acquired trade name and customer relationship intangible assets and allocated overhead. General and Administrative General and administrative expenses consist primarily of employee-related costs (including salaries, bonuses, stock-based compensation expense, other employee benefits and travel-related expenses) for legal, finance, human resources, and other administrative functions, as well as certain executives. In addition, general and administrative expenses include outside legal, accounting and other professional fees, non-income-based taxes and allocated overhead. Restructuring From time to time, the Company may implement a management-approved restructuring plan to improve efficiencies across the organization, reduce its cost structure, and/or better align its resources with the Company’s product strategy. Restructuring charges can include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations, contract cancellation costs and other related costs. In connection with such plans, the Company may incur restructuring costs comprised of employee severance and associated termination costs related to the reduction of its workforce, losses on its non-cancelable lease contracts, and other contract termination costs. Costs associated with a restructuring plan are recognized and measured at fair value in the condensed consolidated statements of operations in the period in which the liability is incurred. These restructuring initiatives may require the Company to make estimates in several areas including: (i) expenses for employee severance and other separation costs; (ii) realizable values of assets made redundant, obsolete, or excessive; and (iii) the ability to generate sublease income and to terminate lease obligations at the estimated amounts. Other Non-Operating Income (Expense) Other non-operating income (expense), net consists primarily of interest income, net foreign currency exchange gains (losses), gain on sale of private company investments, net realized gains and losses related to investments, and other. The components of other non-operating income (expense) recognized in the condensed consolidated financial statements is as follows: Three Months Ended March 31, (in thousands) 2019 2018 Interest Income $ 938 $ 56 Foreign currency losses, net (18 ) (249 ) Gain on sale of a private company investment 1,001 999 Other income (expense), net 58 (173 ) Other non-operating income (expense), net $ 1,979 $ 633 In January 2017, the Company sold a private company investment that was accounted for using the cost method of accounting. The Company recognized an initial gain upon sale and is additionally entitled to receive contingent consideration to be received over three years following the close of the transaction, subject to the private company meeting certain employee retention and financial targets. Subsequent earn-out amounts collected will be recorded as a gain when cash is received. In each of the three months ended March 31, 2019 and 2018, the Company received cash of $1.0 million, representing its share of the respective first and second installments of the earn-out payment, each of which was recognized as a gain on sale of a private company investment. Income Taxes The Company accounts for income taxes using the asset and liability method. ASC 740, Accounting for Income Taxes, Valuation allowances are established when necessary to reduce the deferred tax assets when it is more likely than not that a portion or all of the deferred tax assets will not be realized. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company records uncertain tax positions on the basis of a two-step process in which: (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of technical merits of the position, and (2) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the tax benefit as the largest amount that is cumulatively more than 50% likely to be realized upon ultimate settlement with the related tax authority. From time to time, the Company engages in certain intercompany transactions and legal entity restructurings. The Company considers many factors when evaluating these transactions, including the alignment of their corporate structure with their organizational objectives and the operational and tax efficiency of their corporate structure, as well as the long-term cash flows and cash needs of its business. These transactions may impact the Company’s overall tax rate and/or result in additional cash tax payments. The impact in any period may be significant. These transactions may be complex and the impact of such transactions on future periods may be difficult to estimate. Accounting Pronouncements Recently Adopted Leases : In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02, as modified through other ASUs issued subsequent to ASU 2016-02, supersedes the guidance in ASC 840, Leases , and generally requires companies to recognize operating and financing lease liabilities and corresponding ROU assets on the balance sheet. ASC 842 was effective for public companies with fiscal years beginning after December 15, 2018 on a modified retrospective basis and early adoption is permitted. The Company adopted the requirements of ASC 842 as of January 1, 2019 including use of the modified retrospective transition method which allows for recognition of the cumulative-effect adjustments at the beginning of t |
Cash and Cash Equivalents
Cash and Cash Equivalents | 3 Months Ended |
Mar. 31, 2019 | |
Cash And Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | 3. Cash and Cash Equivalents As of March 31, 2019 and December 31, 2018, cash and cash equivalents were $165.9 million and $153.8 million, respectively. Included in cash and cash equivalents are cash in transit from payment processors for credit and debit card transactions of $3.5 million and $2.0 million as of March 31, 2019 and December 31, 2018, respectively. Included within other assets are restricted cash of $580,000 and $564,000 as of March 31, 2019 and December 31, 2018, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements Assets and liabilities recorded at fair value in the condensed consolidated financial statements are categorized based on the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels which directly relate to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows: Level 1 – Observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs, other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amounts of the Company’s financial instruments, which generally include cash equivalents, accounts receivable and accounts payable, approximate their fair values due to their short maturities. The carrying value of the Company’s debt approximates fair value based on borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk. As of March 31, 2019 and December 31, 2018, respectively, the Company did not have any financial instruments accounted for pursuant to ASC 820. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment As of March 31, 2019 and December 31, 2018, property and equipment consisted of the following: (in thousands) March 31, 2019 December 31, 2018 Building $ — $ 71,780 Computer equipment 21,453 21,448 Leasehold improvements 55,945 56,396 Furniture, fixtures, and other assets 10,822 10,566 Gross property and equipment 88,220 160,190 Less: Accumulated depreciation (42,688 ) (42,472 ) Property and equipment, net $ 45,532 $ 117,718 Depreciation expense was $4.3 million and $4.7 million, during the three months ended March 31, 2019 and 2018, respectively. Upon adoption of ASC 842, the Company derecognized amounts previously capitalized related to its San Mateo lease included in the Building line item, as well as the related accumulated depreciation, as of December 31, 2018 (see Notes 2 and 8 for additional information). |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | 6. Intangible Assets and Goodwill Capitalized internal-use software As of March 31, 2019 and December 31, 2018, capitalized internal-use software consisted of the following: (in thousands) March 31, 2019 December 31, 2018 Gross capitalized internal-use software $ 113,298 $ 109,133 Less: Accumulated amortization (79,588 ) (75,853 ) Capitalized internal use software, net $ 33,710 $ 33,280 Amortization expense related to capitalized internal-use software was $3.7 million and $5.9 million during the three months ended March 31, 2019 and 2018, respectively, and is included in cost of revenue in the condensed consolidated statements of operations. Acquisition intangible assets, net As of March 31, 2019 and December 31, 2018, intangible assets, net consisted of the following: March 31, 2019 December 31, 2018 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 47,696 $ (42,839 ) $ 4,857 $ 47,696 $ (42,410 ) $ 5,286 Trade name 6,072 (5,904 ) 168 6,072 (5,796 ) 276 Technology 22,007 (18,733 ) 3,274 22,007 (18,245 ) 3,762 Acquisition intangible assets, net $ 75,775 $ (67,476 ) $ 8,299 $ 75,775 $ (66,451 ) $ 9,324 Amortization expense was $1.0 million and $1.1 million during the three months ended March 31, 2019 and 2018, respectively. Future amortization expense As of March 31, 2019, future amortization expense by year is expected to be as follows (in thousands): (in thousands) Capitalized internal-use software, net Acquisition intangible assets, net Remainder of 2019 $ 9,241 $ 2,814 2020 6,189 2,952 2021 1,353 1,705 2022 — 828 Total amortization expense $ 16,783 $ 8,299 Future capitalized internal-use software amortization excludes $16.9 million of costs which are currently in the development phase. Goodwill The changes in the carrying amount of goodwill were as follows (in thousands): Balance as of December 31, 2018 $ 336,861 Balance as of March 31, 2019 $ 336,861 |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2019 | |
Compensation Related Costs [Abstract] | |
Employee Benefit Plans | 7. Employee Benefit Plans Equity Incentive Plans The Company has two equity incentive plans: the 2011 Equity Incentive Plan (the “2011 Plan”) and the 2018 Equity Incentive Plan (the “2018 Plan”). To the extent that grants outstanding under the 2011 Plan terminate, cancel or are forfeited, the shares reserved for issuance under such grants are automatically transferred to the 2018 Plan and become available for subsequent grant thereunder. Under the 2018 Plan, the Board or a committee of the Board, may grant incentive and nonqualified stock options, stock appreciation rights, restricted or unrestricted stock awards, restricted stock units (“RSUs”), phantom stock, performance awards or other stock-based awards to employees, directors and other individuals providing services to the Company. The purpose of the 2018 Plan is to promote the long-term growth and profitability of the Company by (i) providing employees with incentives to improve stockholder value and to contribute to the growth and financial success of the Company through their future services, and (ii) enabling the Company to attract, retain and reward the best‑available persons. The options granted under the 2018 Plan, may be granted at a price not less than the fair market value on the grant date. The Board, or a committee of the Board, has granted options with an exercise price at or which approximates the fair value on the grant date to new hires, except for the out-of-the-money options granted to certain employees as discussed below. Grants of time-based awards generally vest over a four-year period for new hires and over a three-year period for subsequent grants to existing employees. The service condition for the majority of these awards is satisfied generally over the applicable vesting period. Options expire as determined by the Board, or committee of the Board, but not more than ten years after the date of the grant. In the second quarter of 2015, the Company began granting restricted stock units that contain both a service condition and Performance Vesting Condition. Both the service condition and Performance Vesting Condition must be met in order for these awards to vest and issue. The Performance Vesting Condition occurred upon the effectiveness of the registration statement for the Company's IPO, which was September 25, 2018. As of March 31, 2019, 9,230,406 shares of common stock remain available for grant under the 2018 Plan. The following is a summary of stock option activity for the current year period: Stock Options Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value (in thousands) Weighted Average Remaining Contractual Term (in years) Outstanding at December 31, 2018 18,452,375 $ 14.39 $ 8,482 7.5 Granted 2,225,766 $ 12.35 Exercised (1,327,784 ) $ 10.86 Forfeited (447,402 ) $ 14.33 Expired (886,650 ) $ 15.99 Outstanding, vested and expected to vest at March 31, 2019 18,016,305 $ 14.32 $ 70,104 7.7 Vested and exercisable at March 31, 2019 9,234,768 $ 14.72 $ 32,262 6.7 As of March 31, 2019, included in other current assets is $6.8 million of proceeds receivable from stock option exercises. The proceeds receivable outstanding at the end of the first quarter were fully collected on April 2, 2019. The following is a summary of restricted stock units for the current year period: Restricted Stock Units Number of Shares Weighted Average Grant-Date Fair Value Weighted Average Remaining Contractual Term (in years) Unvested at December 31, 2018 5,752,046 $ 12.77 1.2 Granted 3,820,944 $ 14.01 Vested (898,023 ) $ 12.69 Forfeited (316,238 ) $ 13.15 Unvested at March 31, 2019 8,358,729 $ 13.33 1.3 Fair Value of Stock Options The Company used the Black-Scholes-Merton option pricing model to estimate the fair value of stock options granted using the following assumptions: Three Months Ended March 31, 2019 2018 Expected life (in years) 5.9 5.8 Risk-free interest rate 2.5% 2.7% Volatility 46% 43% Dividend yield —% —% Fair value of common stock $12.35 $13.20 2018 Employee Stock Purchase Plan The Company sponsors the ESPP that allows employees to purchase shares of common stock at a discounted price from the fair market value of Company’s common stock at each purchase date. Except for the initial offering period, the ESPP provides for 24-month offering periods beginning May 22 and November 22 of each year, and each offering period will consist of four six-month purchase periods. The initial offering period began on September 25, 2018 and will end on November 22, 2020. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock on the offering date, or (2) the fair market value of its common stock on the purchase date. Stock-Based Compensation Expense Stock-based compensation expense recognized in the condensed consolidated financial statements is as follows: Three Months Ended March 31, (in thousands) 2019 2018 Cost of revenue $ 1,096 $ 658 Research and development 4,766 3,447 Sales and marketing 2,780 768 General and administrative 6,469 3,667 Stock-based compensation expense, net of amounts capitalized 15,111 8,540 Capitalized stock-based compensation expense 953 328 Stock-based compensation expense $ 16,064 $ 8,868 As of March 31, 2019, unamortized stock-based compensation was as follows: Unrecognized stock-based compensation (in thousands) Weighted average vesting period (in years) Stock options $ 49,343 2.3 Restricted stock units (service-based) 55,568 2.9 Restricted stock units (performance-based) (1) 19,784 1.4 ESPP 3,932 1.6 Total unrecognized stock-based compensation $ 128,627 (1) The Performance Vesting Condition occurred upon the effectiveness of the registration statement for the Company's IPO, which was September 25, 2018. The remaining unrecognized stock-based compensation expense is recognized on an accelerated basis over the weighted-average remaining requisite service period. 401(k) Plan In the United States, the Company offers its employees a defined contribution plan that qualifies as a deferred salary arrangement under Section 401 of the U.S. Internal Revenue Code (“401(k) Plan”). Under the 401(k) Plan, participating employees may defer a portion of their pretax earnings not to exceed the maximum amount allowed by the Internal Revenue Service. The Company currently provides a matching contribution of 25% of deferrals for eligible employees. Compensation expense for the Company's matching contributions was $1.0 million and $0.7 million during the three months ended March 31, 2019 and 2018, respectively. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | 8. Leases The Company leases certain equipment and facilities under operating leases which expire at various dates through 2028. The Company’s operating lease costs (gross lease expense) was $3.0 million and $0.9 million during the three months ended March 31, 2019 and 2018, respectively, and the Company’s short-term lease costs were nominal. The Company’s variable lease costs amounted to $1.5 million for the three months ended March 31, 2019. The Company recognized sublease income (including reimbursed expenses) of $1.8 million during the three months ended March 31, 2019. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of March 31, 2019, the weighted average remaining operating lease term was 9.53 years. As of March 31, 2019, the weighted average discount rate used to estimate operating lease liabilities was 7.7%. San Mateo Building In July 2015, the Company entered into a lease agreement for office space in San Mateo, California with a lease term until December 2028 (“San Mateo facility”). The Company uses the San Mateo facility for corporate headquarter functions, as well as product and engineering, sales and marketing, and administrative operations. The space rented is for the total office space available in the building, which was in the process of being constructed at the time the lease agreement was executed. Prior to the adoption of ASC 842, because of the Company’s involvement during the construction period, the Company was considered for accounting purposes to be the owner of the construction project pursuant to ASC 840. Accordingly, the building under construction was accounted for as owned real estate and was capitalized in the Company’s condensed consolidated balance sheets as property and equipment-building with a corresponding non-current financing obligation on leased facility. Construction was completed in 2016 and the Company capitalized $71.8 million of construction costs for the building (see Note 5 for additional information). Additionally, the Company incurred additional leasehold improvement costs of which $14.3 million was reimbursed by the landlord. As of December 31, 2018, the corresponding liability related to the construction costs incurred by the landlord totaled $92.0 million and is reflected in the condensed consolidated balance sheets as financing obligations on leased facility. As discussed in Notes 1 and 2 above, the Company adopted the requirements of ASC 842 as of January 1, 2019 using the modified retrospective transition method through a cumulative-effect adjustment to the opening accumulated deficit balance at the adoption date. At adoption, the ROU asset and operating lease liabilities also include amounts related to the Company’s San Mateo building as the amounts previously recorded in its condensed consolidated financial statements were derecognized. As of March 31, 2019, maturities of operating lease liabilities and sublease income, by year are as follows: (in thousands) Operating Lease Payments Sublease Income Remainder of 2019 $ 9,473 $ (3,524 ) 2020 12,242 (2,898 ) 2021 11,917 (2,535 ) 2022 12,296 (336 ) 2023 12,728 — Thereafter 68,831 — Gross lease payments (income) 127,487 (9,293 ) Less: Imputed interest 38,820 Total operating lease liabilities $ 88,667 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies In addition to the Company’s operating lease commitments discussed above in Note 7, as of March 31, 2019, the Company had open non-cancellable purchase orders for the procurement of goods and services in the ordinary course of business totaling $14.0 million to be received through 2024. Letters of Credit As of March 31, 2019, the Company had standby letters of credit for $5.2 million which were issued in connection with certain leases. Legal Matters From time to time, the Company is subject to legal proceedings, claims and litigation arising in the ordinary course of business, which may include, but is not limited to, patent and privacy matters, labor and employment claims, class action lawsuits, as well as inquiries, investigations, audits and other regulatory proceedings. Periodically, the Company evaluates developments in its legal matters and records a liability when it believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both the likelihood of there being, and the estimated amount of, a loss related to such matters, and the Company's judgment may be incorrect. There are currently no legal matters or claims that have arisen from the normal course of business that the Company believes would have a material impact on the Company’s financial position, results of operations or cash flows. Warranties and Indemnification The Company’s subscription services are generally warranted to perform materially in accordance with the Company’s online help documentation under normal use and circumstances. Additionally, the Company’s arrangements generally include provisions for indemnifying customers against liabilities if its subscription services infringe a third party’s intellectual property rights. Furthermore, the Company may also incur liabilities if it breaches the security or confidentiality obligations in its arrangements. To date, the Company has not incurred significant costs and has not accrued a liability in the accompanying condensed consolidated financial statements as a result of these obligations. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 10. Debt As of March 31, 2019 and December 31, 2018 the carrying values of debt were as follows: March 31, 2019 December 31, 2018 Issuance date Maturity date Amount (in thousands) Effective Interest Rate Amount (in thousands) Effective Interest Rate 2018 Refinancing Facility Agreement October 2018 October 2025 $ 218,900 6.16% - 6.28% $ 219,450 6.00% - 6.10% Less: Unamortized issuance discount and issuance costs, net 1,960 2,035 Less: Current portion of debt, net 1,900 1,900 Long term debt, net $ 215,040 $ 215,515 In October 2018, the Company entered into a Refinancing Facility Agreement (“2018 Credit Facility”), comprising a $220.0 million term loan (the “Term Loan”) and $75.0 million revolving credit facility. Loans under the 2018 Credit Facility accrue interest based upon, at the Company’s option, either at an alternate base interest rate (“ABR”) or a Eurocurrency rate, in each case plus an applicable margin. The applicable margin for the Term Loan is 2.75% in the case of a ABR loan and 3.75% in the case of a Eurocurrency loan, and the applicable margin for the revolving loan ranges from 0.75% to 1.50% in the case of a ABR loan and 1.75 to 2.50% in the case of a Eurocurrency loan, and is based on the Company’s leverage ratio. The Company will make quarterly principal payments of $550,000 on the Term Loan with any remaining principal amounts due on October 10, 2025. The principal amount on the revolving credit facility is due and all revolver commitments terminate on October 10, 2023. The Company records debt discounts and issuance costs as a reduction to the associated current and long-term portions of the debt in the condensed consolidated balance sheets. The Company records debt discounts and issuance costs as a deferred asset when there is no associated debt liability. As of March 31, 2019, unamortized issuance discount and issuance costs of $0.4 million were included in prepaid expenses and other current assets and $1.3 million were included in other assets. As of December 31, 2018, unamortized issuance discount and issuance costs of $0.4 million were included in prepaid expenses and other current assets and $1.4 million were included in other assets. The Company amortizes these costs using the straight-line method which approximates the effective interest rate method over the life of the loan. The amounts amortized are included in interest expense in the accompanying condensed consolidated statements of operations. As of March 31, 2019, the Company has $69.8 million of borrowing available under the line of credit portion of the 2018 Credit Facility. The Company’s obligations under the 2018 Credit Facility are guaranteed by certain of its subsidiaries and secured by liens on substantially all of the assets of the Company and such subsidiaries. The 2018 Credit Facility contains financial, affirmative and negative covenants that, if violated, may require the Company to pay down the loans earlier than the stated maturity dates with higher interest rates. As of March 31, 2019, the Company was compliant with all of its debt covenant requirements in the 2018 Credit Facility. The Company believes that it will continue to comply with the terms of the loan agreements through the stated maturity dates. However, if the Company’s projections do not materialize, the Company may require additional equity or debt financing. There can be no assurance that additional financing, if required, will be available on terms satisfactory to the Company. Principal and interest payments are due quarterly. As of March 31, 2019, future minimum payment obligations of principal amounts due by year under the 2018 Credit Facility were as follows, (in thousands): Remainder of 2019 $ 1,650 2020 2,200 2021 2,200 2022 2,200 2023 2,200 Thereafter 208,450 Total principal outstanding $ 218,900 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes The Company recorded an income tax benefit of $0.1 million for the three months ended March 31, 2019, as compared to an income tax expense of $0.3 million for the three months ended March 31, 2018. The decrease in the Company’s income tax provision was primarily due to additional foreign tax credits. The Company regularly evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. The realization of net deferred tax assets is dependent on several factors, including the likelihood and amount, if any, of future taxable income in relevant jurisdictions during periods in which those temporary differences become deductible. As of March 31, 2019, the Company continues to maintain a full valuation allowance on its deferred tax assets that are not realizable on a more likely than not basis. The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years. As the outcome of the audits cannot be predicted with certainty, if any issues addressed in the Company's tax audits are resolved in a manner inconsistent with management's expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. There were no material changes in gross unrecognized tax benefits during each of the three months ended March 31, 2019 and 2018. |
Geographical Information
Geographical Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Geographical Information | 12. Geographical Information Revenue by geography is generally based on the billing address of the customer. For purposes of its geographic revenue disclosure, the Company defines a customer as an organization. An organization may consist of an individual paying user, multiple paying users within an organization or the organization itself. The following table sets forth the percentage of revenue by geographic area: Three Months Ended March 31, 2019 2018 United States 65 % 64 % Rest of world 35 % 36 % No other country outside of the United States comprised 10% or greater of the Company’s revenue for the three months ended March 31, 2019 and 2018. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 13. Net Loss Per Share Basic earnings per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net loss for the period by the weighted-average number of common shares outstanding during the period which includes potential dilutive common shares assuming the dilutive effect of outstanding stock options, restricted stock units (including those that are performance-based) and restricted stock awards calculated using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, (in thousands, except per share amounts) 2019 2018 Numerator: Net loss $ (17,777 ) $ (14,717 ) Denominator: Weighted-average shares outstanding - basic and diluted 126,786 101,212 Net loss per common share - basic and diluted: $ (0.14 ) $ (0.15 ) The Company was in a loss position for the periods presented. Accordingly, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive. Prior to application of the treasury stock method, share equivalents (comprising stock options, restricted stock units (including those that are performance-based), shares issuable under the ESPP, and restricted stock awards) excluded from the calculations of diluted net loss per share were 27.3 million and 27.3 million during the three months ended March 31, 2019 and 2018, respectively. |
Restructuring Costs
Restructuring Costs | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Costs | 14. Restructuring Costs November 2017 Restructuring Plan In November 2017, the Company implemented a restructuring plan (“November 2017 Plan”) to reduce its sales and marketing headcount and centralize its sales function in its San Mateo, CA headquarters. The total restructuring costs associated with the November 2017 Plan was $5.1 million and was primarily lease termination costs and employee severance, of which $0.1 million was reversed during the three months ended March 31, 2019, $3.5 million was recognized during the year ended December 31, 2018 and $1.7 million was recognized during the year ended December 31, 2017. The restructuring costs incurred during the year ended December 31, 2018 were primarily due to the changes in estimated contract termination costs resulting from lower estimated sublease cash payments, and related leasehold impairment costs as the Company estimated that the leasehold improvements at the vacated facility would not be recoverable from the estimated sublease cash flows. The restructuring costs incurred during the three months ended March 31, 2019 were primarily due to the changes in estimated contract termination costs. The November 2017 Plan was subject to applicable laws and consultation processes, as a part of the Company’s strategic plan to focus on its core product and improve efficiencies. In connection with these actions, the Company incurred the following pre-tax costs: Three Months Ended March 31, (in thousands) 2019 2018 Employee severance $ — $ 5 Contract termination and other costs (66 ) — Total restructuring costs $ (66 ) $ 5 As of December 31, 2018, $0.6 million and $0.3 million were recorded in accrued expenses and other current liabilities and other non-current liabilities, respectively. Upon adoption of ASC 842 on January 1, 2019, amounts previously accrued in restructuring for operating leases were derecognized as they are included in ROU assets in the condensed consolidated balance sheets (see Note 8 for additional information). As of March 31, 2019, the remaining amount of accrued restructuring for contract termination costs was nominal. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events Acquisition of Usabilla Holding B.V. On February 27, 2019, the Company entered into an Agreement to purchase all the outstanding shares of Usabilla Holding B.V. (“Usabilla”), a Dutch voice of customer technology company that offers its customers products to help improve their customers’ online experience by generating and processing user feedback via targeted surveys on websites, in mobile apps and emails. The Company expects the acquisition of Usabilla to complement and expand its enterprise-grade product offering. The acquisition closed on April 1, 2019 and will be accounted for as a business combination in the second quarter of 2019. On the closing date, the company issued 1,944,211 shares of its common stock pursuant to the terms of the Agreement. The estimated total purchase price for Usabilla is approximately $84.3 million, of which $54.2 million was paid as cash consideration at the closing date. Certain disclosures required by ASC Topic 805 – Business Combinations |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying interim condensed consolidated balance sheet as of March 31, 2019, the statements of operations, comprehensive loss and stockholders’ equity for the three months ended March 31, 2019 and 2018, and cash flows for the three months ended March 31, 2019 and 2018 are unaudited. Such condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. These condensed consolidated financial statements include the results of operations of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated . These condensed consolidated financial statements do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. In management’s opinion, the condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2019, the results of operations for the three months ended March 31, 2019 and 2018, and cash flows for the three months ended March 31, 2019 and 2018. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year or any other future interim or annual periods. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form-10K filed with the SEC on February 26, 2019. On January 1, 2019, the Company adopted the requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting periods covered by the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable. The Company’s most significant estimates and judgments involve valuation of the Company’s stock-based awards, including the determination of fair value of common stock prior to the completion of its initial public offering (“IPO”), valuation of deferred income tax assets, estimating the period of benefit for deferred commissions, valuation of acquired goodwill and intangibles from acquisitions, tax contingencies, legal contingencies and incremental borrowing rate for operating leases. |
Segment Information | Segment Information The Company operates as a single operating segment. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews the Company’s operating results on a consolidated basis in order to make decisions about allocating resources and assessing performance for the entire company. The CODM uses one measure of profitability and does not segment the Company’s business for internal reporting. See Note 12 for additional information regarding the Company’s revenue by geographic area. |
Related Party Transactions | Related Party Transactions Certain members of the Company’s Board of Directors (“Board”) serve as board members, are executive officers of and/or (in some cases) are investors in companies that are customers and/or vendors of the Company. The Company recognized revenue from sales of its products to a substantial stockholder of $0.4 million and $0.4 million during the three months ended March 31, 2019 and 2018, respectively. Sales to a substantial stockholder represented less than 1% of the Company’s total revenue in each of the periods presented. The Company incurred related party expenses of $0.3 million and $0.1 million during the three months ended March 31, 2019 and 2018, respectively. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue The Company generates substantially all of its revenue from the sale of subscriptions to its survey software products including subscriptions to its purpose-built solutions. The revenue the Company generates from one purpose-built solution that is delivered and recognized at a point in time is not significant. The Company normally sells each of these products in separate contracts to its customers and each product, including purpose-built solutions, is distinct. The Company’s policy is to exclude sales and other indirect taxes when measuring the transaction price of its subscription agreements. The Company accounts for revenue contracts with customers through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the Company satisfies a performance obligation. For subscription products, the Company provides customers the option of monthly, annual or multi-year contractual terms. In general, the Company’s customers elect contractual terms of one year or less. Subscription revenue is recognized on a daily basis ratably over the related subscription term beginning on the date the Company provides access to its survey product. Access to the Company’s subscription product is an obligation representing a series of distinct services (and which comprise a single performance obligation) that the Company provides to its end customer over the subscription term. The Company recognizes the majority of its revenue ratably because the customer benefits from access to the Company’s subscription products throughout the subscription term. The Company generally invoices its customers at the beginning of the term on a monthly or annual basis. The Company's contracts are generally non-cancellable and do not contain refund-type provisions. The Company’s contracts do not contain a significant amount of variable consideration as the price of its subscription offerings are generally fixed at contract inception. Based on the invoicing structure and related subscription term, the Company determined its contracts do not contain a financing component. The Company applied the practical expedient provided by ASU 2014-09, Revenue from Contracts with Customers, (“ The Company records contract liabilities to deferred revenue when cash payments are received or due. Deferred revenue consists of the unearned portion of customer billings. The Company recognized into revenue $45.1 million and $37.8 million during the three months ended March 31, 2019 and 2018, respectively, that was included in the deferred revenue balances at the beginning of each respective periods. As of March 31, 2019, future estimated revenue related to performance obligations that are unsatisfied or partially unsatisfied at the end the reporting period was $121.3 million. The substantial majority of the unsatisfied performance obligations will be satisfied over the next twelve months. |
Deferred Commissions | Deferred Commissions Certain commissions earned by the Company’s salesforce are considered to be incremental and recoverable costs of obtaining a contract with a customer. Such costs are deferred and amortized on a straight-line basis over their estimated period of benefit which is generally estimated as four years. The period of benefit was estimated by considering factors such as historical customer attrition rates, the useful life of the Company’s technology, and the impact of competition in its industry. Amortization of deferred commissions, included in sales and marketing expense line within the statements of operations was $0.5 million and $0.3 million during the three months ended March 31, 2019 and 2018, respectively. There was no impairment loss in relation to the deferred commissions for any period presented. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes stock-based compensation expense for all share-based payments to employees based on the grant-date fair value of the Company’s common stock estimated in accordance with the provisions of ASC 718, Compensation‑Stock Compensation Stock Options and ESPP : The Company estimates the fair values of its stock options and shares issuable under the ESPP using the Black-Scholes-Merton option-pricing model, which require the input of the following key assumptions: • Expected Term : As the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior, the Company determines the expected term based on the average period the stock options or shares issuable under the ESPP are expected to remain outstanding. The expected term for stock options is generally calculated as the midpoint of the applicable vesting term and contractual expiration. For shares issuable under the ESPP, the expected term is the applicable purchase periods within an offering period. • Expected Volatility : As the Company does not have sufficient trading history of its common stock, stock price volatility is estimated at the applicable grant date by taking the weighted-average historical volatility of a group of comparable publicly-traded companies over a period equal to the expected life of the options. • Expected Dividend Rate : The Company has not paid and does not anticipate paying cash dividends on its shares of common stock in the foreseeable future; therefore, the expected dividend yield is assumed to be zero. • Risk-Free Interest Rate : The Company determined the risk-free interest rate by using a weighted average assumption equivalent to the expected term based on the U.S. Treasury constant maturity rate as of the date of grant. On September 28, 2018, the Company completed its IPO. Due to the absence of an active market for the Company’s common stock prior to its IPO, the Company obtained third-party valuations (prepared contemporaneously in connection with grants of share-based payments made prior to the Company’s IPO) to estimate the fair value of its common stock for purposes of measuring stock-based compensation expense to be recognized. The third-party valuations were prepared using methodologies, approaches, and assumptions consistent with the American Institute of Certified Public Accountants (“AICPA”) Accounting & Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation For valuations subsequent to the Company’s IPO, its board of directors determines the fair value of each share of underlying common stock based on the closing price of the Company’s common stock as reported on the date of the grant. Restricted Stock Units and Restricted Stock Awards : The fair value of the restricted stock units (including those that are performance-based) and restricted stock awards was determined based on the fair value of the Company’s common stock on the grant date. Beginning in the second quarter of 2015, the Company granted performance-based restricted stock units (“Performance RSUs”) that vest upon the satisfaction of both a service condition and a Performance Vesting Condition. The Performance Vesting Condition occurred upon the effectiveness of the registration statement for the Company's IPO, which was September 25, 2018. As a result, the Company recognized the cumulative amount of unrecognized stock-based compensation expense of $89.9 million for services already rendered using the accelerated attribution method. As of March 31, 2019, the remaining unamortized stock-based compensation related to these awards was $19.8 million, which the Company expects to recognize on an accelerated basis over the remaining weighted-average requisite service periods of 1.4 years (see Note 7 for additional discussion). |
Business Combinations | Business Combinations When the Company acquires a business, the purchase consideration is allocated to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated respective fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require the Company to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. The Company’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to non-operating income (expense) in the condensed consolidated statements of operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets with finite lives include property and equipment, capitalized internal-use software and acquisition intangible assets. Long-lived assets are depreciated or amortized over their estimated useful lives which are as follows: Building 40 years Computer equipment 2 to 5 years Furniture, fixtures, and other assets 5 years Leasehold improvements Shorter of remaining lease term or 5 years Purchased software 3 years Capitalized internal-use software 3 years Acquisition intangible assets: customer relationships 5 to 7 years Acquisition intangible assets: trade name 2 to 10 years Acquisition intangible assets: technology 3 to 8 years The Company continually evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of depreciable or amortizable long-lived assets may warrant revision or that the remaining balance may not be recoverable. When factors indicate that long-lived assets should be evaluated for possible impairment, the Company uses an estimate of the related undiscounted future cash flows over the remaining life of the long-lived assets in measuring whether they are recoverable. If the estimated undiscounted future cash flows do not exceed the carrying value of the asset, a loss is recorded as the excess of the asset’s carrying value over its fair value. The Company did not recognize any impairment of long-lived assets during each of the three months ended March 31, 2019 and 2018. The Company believes that the carrying values of long-lived assets as of March 31, 2019 are recoverable. Goodwill is not amortized but rather tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Goodwill impairment is recognized when the carrying value of goodwill exceeds the implied fair value of the Company. The Company did not recognize any impairment of goodwill during each of the three months ended March 31, 2019 and 2018. |
Foreign Currencies | Foreign Currencies The functional currency of the Company’s foreign subsidiaries is generally the U.S. Dollar. Monetary assets and liabilities are remeasured using foreign currency exchange rates at the end of the period, and non-monetary assets are remeasured based on historical exchange rates. Gains and losses due to foreign currency are the result of either the remeasurement of subsidiary balances or transactions denominated in currencies other than the foreign subsidiaries’ functional currency and are included in other non-operating income (expense), net in the statement of operations. For subsidiaries where the functional currency is the local currency, the assets and liabilities of those foreign subsidiaries are translated from their respective functional currencies into U.S. Dollars at the rates in effect at the balance sheet date and revenue and expense amounts are translated at a rate approximating the average exchange rate for the period. Foreign currency translation gains and losses are recorded to accumulated other comprehensive income (loss). |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and accounts receivable. The Company places its cash and cash equivalents in banks, primarily in checking accounts and such amounts may at times exceed the federally insured limits. Cash equivalents consist of short-term money market funds (for which the Company had none in any of the periods presented), which are managed by reputable financial institutions. For purposes of its customer concentration disclosure, the Company defines a customer as an organization. An organization may consist of an individual paying user, multiple paying users within an organization or the organization itself. No single customer accounted for more than 10% of revenue during each of the three months ended March 31, 2019 and 2018. No customers accounted for more than 10% of accounts receivable, net as of March 31, 2019 and December 31, 2018. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company applies the provisions of ASC 820, Fair Value Measurement Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the condensed consolidated statements of comprehensive income until realized. See Note 4 for additional disclosures regarding fair value measurements. |
Private Company Investments | Private Company Investments The Company accounts for private company investments, without readily determinable fair values, either under the equity or the cost method. Investments through which the Company exercises significant influence but does not have control over the investee are accounted for under the equity method. Investments through which the Company is not able to exercise significant influence over the investee are measured and accounted for using an alternative measurement basis of a) the carrying value of a security at cost, b) less any impairment and c) plus or minus any qualifying observable price changes (with a same or similar security from the same issuer). These securities were previously accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment. If an observable price change or impairment is recognized on the Company’s private company investments, such investments would then be classified as a Level 3 financial instrument within the fair value hierarchy based on the nature of the fair value inputs. The Company classifies private company investments as other assets on the condensed consolidated balance sheets as those investments do not have stated contractual maturity dates. Any adjustments to the carrying value are recognized in other non-operating income (expense), net in the condensed consolidated statements of operations. As of March 31, 2019 and December 31, 2018, respectively, the carrying value of the Company’s private company investment at cost was $3.6 million. There were no impairments or observable price changes for the Company’s private company investment during each of the three months ended March 31, 2019 and 2018. |
Impairment of Investments | Impairment of Investments The Company periodically reviews its investments for impairment. If the Company concludes that any of these investments are impaired, the Company determines whether such impairment is other-than-temporary. Factors considered to make such determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period and the Company’s intent to sell. For debt securities, the Company also considers whether (1) it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, and (2) the amortized cost basis cannot be recovered as a result of credit losses. If the investment is considered to be other-than-temporarily impaired, the Company will record the investment at fair value by recognizing an impairment within other non-operating income (expense) in the condensed consolidated statements of operations and establishing a new carrying value for the investment. |
Derivative Financial Instruments | Derivative Financial Instruments From time to time, the Company may use derivative financial instruments consisting of interest rate swaps to manage cash flow exposure under its credit facilities and accounts for such derivative financial instruments in accordance with ASC 815, Accounting for Derivative Instruments and Hedging Activities |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents primarily consist of cash on deposit with banks and investments in money market funds (for which the Company had none in any of the periods presented) with maturities of 90 days or less from the date of purchase. The Company also classifies amounts in transit from payment processors for customer credit card and debit card transactions as cash equivalents, because such amounts generally convert to cash within five days with little or no default risk. |
Accounts Receivable | Accounts Receivable Accounts receivable are customer obligations that arise due to the time taken to settle transactions through direct customer payments. The Company bills in advance for monthly contracts and generally bills annually in advance for contracts with terms of one year or longer when it has an unconditional contractual right to consideration. The Company also recognizes an immaterial amount of contract assets, or unbilled receivables, primarily relating to rights to consideration for services completed but not billed at the reporting date. Unbilled receivables are classified as receivables when the Company has the right to invoice the customer. The Company records an allowance for doubtful accounts based upon its assessment of various factors including the Company’s historical experience, the age of a customers’ accounts receivable balance, a customers’ credit quality, current economic conditions, historical bad debt expense trends and other factors that may affect a customers’ ability to pay to determine the level of allowance required. Amounts deemed uncollectible are recorded to the allowance for doubtful accounts with an offsetting charge in the statements of operations. |
Property and Equipment | Property and Equipment Property and equipment, excluding buildings capitalized under build-to-suit lease arrangements which are discussed below, are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Expenditures that improve an asset or extend its estimated useful life are capitalized. Costs of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. |
Capitalized Internal-Use Software and Website Development Costs | Capitalized Internal-Use Software and Website Development Costs The Company incurs development costs relating to its online survey platform as well as other software solely for internal-use. Costs relating to the planning and post‑implementation phases of development are expensed as incurred. Costs incurred in the development phase are capitalized and included in capitalized internal-use software, net and amortized over their estimated useful life, generally three years. Maintenance and training costs are expensed as incurred. |
Leases | Leases At contract inception, the Company performs an evaluation to determine if it is conveyed the right to control the use of identified property, plant or equipment. To the extent such rights of control are conveyed, the Company further makes an assessment as to the applicable lease classification. The Company leases facilities, datacenters and equipment, which are generally accounted for as operating leases (as further described in Note 8). Lease accounting subsequent to the adoption of ASC 842 Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, current, and operating lease liabilities, non-current, in the condensed consolidated balance sheet. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating ROU assets and lease liabilities are recognized at the lease inception date based on the present value of lease payments over the lease term discounted based on the more readily determinable of (i) the rate implicit in the lease or (ii) the Company’s incremental borrowing rate (which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease). Because the Company’s operating leases generally do not provide an implicit rate, an analysis of publicly traded debt securities of companies with credit and financial profiles similar to the Company’s is used to estimate the incremental borrowing rate. The Company’s operating lease terms have generally ranged between 1 year to 12 years and may include options to extend the lease term, generally at market rates. The Company’s ROU assets are measured based on the corresponding operating lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) tenant incentives under the lease. The Company does not assume renewals or early terminations unless it is reasonably certain to exercise these options at commencement. The Company does not allocate consideration between lease and non-lease components. Lease expense is recognized on a straight-line basis over the lease term. For short-term leases, the Company records lease expense in its condensed consolidated statements of operations on a straight-line basis over the lease term and records variable lease payments as incurred. Lease accounting prior to the adoption of ASC 842 Except for the Company’s San Mateo building lease which was accounted for as a build-to-suit lease, the Company leased facilities, datacenters, and equipment which were accounted for as operating leases. Rent escalations and concession provisions were considered in determining the total estimated lease expense to be incurred and which was recognized over the lease term on a straight-line basis. The Company recorded the difference between the rent paid and the straight-line rent as a deferred rent liability in the accompanying condensed consolidated balance sheets. As of December 31, 2018, the deferred rent balance was $7.5 million ($0.3 million included in accrued expenses and other current liabilities and $7.2 million in other non-current liabilities). For certain build-to-suit lease arrangements, including the San Mateo building lease, the Company was deemed to be the building owner during the construction period for accounting purposes. As a result, the Company recorded an asset and liability for estimated construction costs incurred under a build-to-suit lease arrangement where the Company was involved in the construction of structural improvements or took construction risk prior to commencement of the lease. Subleases The Company additionally had entered into subleases for unoccupied leased office space. To the extent there were losses associated with the sublease, they were recognized in the period the sublease is executed. Gains are recognized over the sublease term. Any sublease payments received in excess of the straight-line rent payments for the sublease were recorded in other non-operating income (expense). The Company’s sublease agreements do not contain any variable payments, material residual value guarantees or material restrictive covenants. |
Legal and Other Contingencies | Legal and Other Contingencies The Company accrues a liability for either claims arising in the ordinary course of business, assessments resulting from non-income-based audits or litigation when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. See Note 9 for additional information pertaining to legal and other contingencies. |
Liability for Sabbatical Leave | Liability for Sabbatical Leave The Company provides a sabbatical leave program to its employees whereby the Company’s full-time employees are eligible for four weeks of paid time-off after four years of continuous service. The Company accounts for sabbatical leaves in accordance with ASC 710, Compensated Absences |
Advertising and Promotion Costs | Advertising and Promotion Costs Expenses related to advertising, marketing and promotion of the Company’s product offerings are expensed as incurred. These costs mainly consist of search engine marketing related costs. The Company incurred $6.3 million and $4.7 |
Cost of Revenue | Cost of Revenue Cost of revenue consists primarily of expenses associated with the delivery and distribution of the Company’s platform for users of the Company’s online survey platform. Cost of revenue generally consist of infrastructure costs, personnel costs and other related costs. Infrastructure costs generally include expenses related to the operation of the Company’s data centers, such as data center equipment depreciation and facility costs (such as co-location rentals), website hosting costs, credit card processing fees, amortization of capitalized software, charity donations and external sample costs. Personnel costs include salaries and bonuses, stock-based compensation expense, other employee benefits and travel-related expenses for employees whose primary responsibilities relate to supporting the Company’s infrastructure and delivering user support. Other related costs include amortization of acquired developed technology intangible assets and allocated overhead. |
Research and Development | Research and Development Research and development costs primarily include personnel costs (including salaries, bonuses, stock-based compensation expense, other employee benefits and travel-related expenses), costs for third-party consultants, depreciation of equipment used in research and development activities and allocated overhead. Except for costs associated with the development of internal-use software, research and development costs are expensed as incurred. |
Sales and Marketing, General and Administrative | Sales and Marketing Sales and marketing expenses relate to both self-serve and outbound sales activities. Sales and marketing expenses generally are comprised of personnel costs (including salaries, sales commissions and amortization of deferred sales commissions, stock-based compensation expense, other employee benefits and travel-related expenses), costs related to brand campaign fees, lead generation fees, amortization of acquired trade name and customer relationship intangible assets and allocated overhead. General and Administrative General and administrative expenses consist primarily of employee-related costs (including salaries, bonuses, stock-based compensation expense, other employee benefits and travel-related expenses) for legal, finance, human resources, and other administrative functions, as well as certain executives. In addition, general and administrative expenses include outside legal, accounting and other professional fees, non-income-based taxes and allocated overhead. |
Restructuring | Restructuring From time to time, the Company may implement a management-approved restructuring plan to improve efficiencies across the organization, reduce its cost structure, and/or better align its resources with the Company’s product strategy. Restructuring charges can include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations, contract cancellation costs and other related costs. In connection with such plans, the Company may incur restructuring costs comprised of employee severance and associated termination costs related to the reduction of its workforce, losses on its non-cancelable lease contracts, and other contract termination costs. Costs associated with a restructuring plan are recognized and measured at fair value in the condensed consolidated statements of operations in the period in which the liability is incurred. These restructuring initiatives may require the Company to make estimates in several areas including: (i) expenses for employee severance and other separation costs; (ii) realizable values of assets made redundant, obsolete, or excessive; and (iii) the ability to generate sublease income and to terminate lease obligations at the estimated amounts. |
Other Non-Operating Income (Expense) | Other Non-Operating Income (Expense) Other non-operating income (expense), net consists primarily of interest income, net foreign currency exchange gains (losses), gain on sale of private company investments, net realized gains and losses related to investments, and other. The components of other non-operating income (expense) recognized in the condensed consolidated financial statements is as follows: Three Months Ended March 31, (in thousands) 2019 2018 Interest Income $ 938 $ 56 Foreign currency losses, net (18 ) (249 ) Gain on sale of a private company investment 1,001 999 Other income (expense), net 58 (173 ) Other non-operating income (expense), net $ 1,979 $ 633 In January 2017, the Company sold a private company investment that was accounted for using the cost method of accounting. The Company recognized an initial gain upon sale and is additionally entitled to receive contingent consideration to be received over three years following the close of the transaction, subject to the private company meeting certain employee retention and financial targets. Subsequent earn-out amounts collected will be recorded as a gain when cash is received. In each of the three months ended March 31, 2019 and 2018, the Company received cash of $1.0 million, representing its share of the respective first and second installments of the earn-out payment, each of which was recognized as a gain on sale of a private company investment. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. ASC 740, Accounting for Income Taxes, Valuation allowances are established when necessary to reduce the deferred tax assets when it is more likely than not that a portion or all of the deferred tax assets will not be realized. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company records uncertain tax positions on the basis of a two-step process in which: (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of technical merits of the position, and (2) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the tax benefit as the largest amount that is cumulatively more than 50% likely to be realized upon ultimate settlement with the related tax authority. From time to time, the Company engages in certain intercompany transactions and legal entity restructurings. The Company considers many factors when evaluating these transactions, including the alignment of their corporate structure with their organizational objectives and the operational and tax efficiency of their corporate structure, as well as the long-term cash flows and cash needs of its business. These transactions may impact the Company’s overall tax rate and/or result in additional cash tax payments. The impact in any period may be significant. These transactions may be complex and the impact of such transactions on future periods may be difficult to estimate. |
Accounting Pronouncements Recently Adopted | Accounting Pronouncements Recently Adopted Leases : In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02, as modified through other ASUs issued subsequent to ASU 2016-02, supersedes the guidance in ASC 840, Leases , and generally requires companies to recognize operating and financing lease liabilities and corresponding ROU assets on the balance sheet. ASC 842 was effective for public companies with fiscal years beginning after December 15, 2018 on a modified retrospective basis and early adoption is permitted. The Company adopted the requirements of ASC 842 as of January 1, 2019 including use of the modified retrospective transition method which allows for recognition of the cumulative-effect adjustments at the beginning of the adoption period and the election to use certain practical expedients and, therefore, did not reassess: (i) whether contractual arrangements that expired prior to the adoption date are, or contain leases, (ii) the classification of leases that expired prior to or existed as of the adoption date, or (iii) initial direct costs for leases that existed as of the adoption date. As such, the Company’s condensed consolidated financial statements are presented pursuant to ASC 842 subsequent to January 1, 2019 and presented pursuant to ASC 840 prior to January 1, 2019. The adoption of ASC 842 resulted in the recognition of ROU assets of $63.1 million and operating lease liabilities of $92.8 million at the adoption date. The ROU asset and operating lease liabilities also include amounts related to the Company’s San Mateo building as the amounts previously recorded in its condensed consolidated financial statements were derecognized on the ASC 842 adoption date. Additionally, lease payments related to the Company’s San Mateo building lease will be accounted for on a prospective basis as lease expense in the Company’s condensed consolidated statements of operations. For periods prior to the adoption of ASC 842, periodic lease payments for the Company’s San Mateo building lease were primarily classified as interest expense in the condensed consolidated statements of operations. Internal-Use Software : In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"). ASU 2018-15 amends current guidance to align the accounting for costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs associated with developing or obtaining internal-use software. Capitalized implementation costs must be expensed over the term of the hosting arrangement and presented in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement. ASU 2018-15 is effective for public companies with fiscal years beginning after December 15, 2019, with early adoption permitted. The Company adopted ASU 2018-15 as of January 1, 2019 on a prospective basis with no material impact upon adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Long-Lived Assets | Long-lived assets are depreciated or amortized over their estimated useful lives which are as follows: Building 40 years Computer equipment 2 to 5 years Furniture, fixtures, and other assets 5 years Leasehold improvements Shorter of remaining lease term or 5 years Purchased software 3 years Capitalized internal-use software 3 years Acquisition intangible assets: customer relationships 5 to 7 years Acquisition intangible assets: trade name 2 to 10 years Acquisition intangible assets: technology 3 to 8 years |
Components of Other Non-Operating Income (Expense) Recognized in Condensed Consolidated Financial Statements | The components of other non-operating income (expense) recognized in the condensed consolidated financial statements is as follows: Three Months Ended March 31, (in thousands) 2019 2018 Interest Income $ 938 $ 56 Foreign currency losses, net (18 ) (249 ) Gain on sale of a private company investment 1,001 999 Other income (expense), net 58 (173 ) Other non-operating income (expense), net $ 1,979 $ 633 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | As of March 31, 2019 and December 31, 2018, property and equipment consisted of the following: (in thousands) March 31, 2019 December 31, 2018 Building $ — $ 71,780 Computer equipment 21,453 21,448 Leasehold improvements 55,945 56,396 Furniture, fixtures, and other assets 10,822 10,566 Gross property and equipment 88,220 160,190 Less: Accumulated depreciation (42,688 ) (42,472 ) Property and equipment, net $ 45,532 $ 117,718 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, net | As of March 31, 2019 and December 31, 2018, capitalized internal-use software consisted of the following: (in thousands) March 31, 2019 December 31, 2018 Gross capitalized internal-use software $ 113,298 $ 109,133 Less: Accumulated amortization (79,588 ) (75,853 ) Capitalized internal use software, net $ 33,710 $ 33,280 As of March 31, 2019 and December 31, 2018, intangible assets, net consisted of the following: March 31, 2019 December 31, 2018 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 47,696 $ (42,839 ) $ 4,857 $ 47,696 $ (42,410 ) $ 5,286 Trade name 6,072 (5,904 ) 168 6,072 (5,796 ) 276 Technology 22,007 (18,733 ) 3,274 22,007 (18,245 ) 3,762 Acquisition intangible assets, net $ 75,775 $ (67,476 ) $ 8,299 $ 75,775 $ (66,451 ) $ 9,324 |
Summary of Future Amortization Expense | As of March 31, 2019, future amortization expense by year is expected to be as follows (in thousands): (in thousands) Capitalized internal-use software, net Acquisition intangible assets, net Remainder of 2019 $ 9,241 $ 2,814 2020 6,189 2,952 2021 1,353 1,705 2022 — 828 Total amortization expense $ 16,783 $ 8,299 |
Schedule of Carrying Amount of Goodwill, Net | The changes in the carrying amount of goodwill were as follows (in thousands): Balance as of December 31, 2018 $ 336,861 Balance as of March 31, 2019 $ 336,861 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Stock Option Activity | The following is a summary of stock option activity for the current year period: Stock Options Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value (in thousands) Weighted Average Remaining Contractual Term (in years) Outstanding at December 31, 2018 18,452,375 $ 14.39 $ 8,482 7.5 Granted 2,225,766 $ 12.35 Exercised (1,327,784 ) $ 10.86 Forfeited (447,402 ) $ 14.33 Expired (886,650 ) $ 15.99 Outstanding, vested and expected to vest at March 31, 2019 18,016,305 $ 14.32 $ 70,104 7.7 Vested and exercisable at March 31, 2019 9,234,768 $ 14.72 $ 32,262 6.7 |
Summary of Estimated Fair Value of Stock Options on Grant Date | The Company used the Black-Scholes-Merton option pricing model to estimate the fair value of stock options granted using the following assumptions Three Months Ended March 31, 2019 2018 Expected life (in years) 5.9 5.8 Risk-free interest rate 2.5% 2.7% Volatility 46% 43% Dividend yield —% —% Fair value of common stock $12.35 $13.20 |
Summary of Stock-based Compensation Expense Recognized in Financial Statements | Stock-based compensation expense recognized in the condensed consolidated financial statements is as follows: Three Months Ended March 31, (in thousands) 2019 2018 Cost of revenue $ 1,096 $ 658 Research and development 4,766 3,447 Sales and marketing 2,780 768 General and administrative 6,469 3,667 Stock-based compensation expense, net of amounts capitalized 15,111 8,540 Capitalized stock-based compensation expense 953 328 Stock-based compensation expense $ 16,064 $ 8,868 |
Summary of Unamortized Stock-based Compensation | As of March 31, 2019, unamortized stock-based compensation was as follows: Unrecognized stock-based compensation (in thousands) Weighted average vesting period (in years) Stock options $ 49,343 2.3 Restricted stock units (service-based) 55,568 2.9 Restricted stock units (performance-based) (1) 19,784 1.4 ESPP 3,932 1.6 Total unrecognized stock-based compensation $ 128,627 (1) The Performance Vesting Condition occurred upon the effectiveness of the registration statement for the Company's IPO, which was September 25, 2018. The remaining unrecognized stock-based compensation expense is recognized on an accelerated basis over the weighted-average remaining requisite service period. |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Restricted Stock Awards and Restricted Stock Units | As of March 31, 2019, included in other current assets is $6.8 million of proceeds receivable from stock option exercises. The proceeds receivable outstanding at the end of the first quarter were fully collected on April 2, 2019. The following is a summary of restricted stock units for the current year period: Restricted Stock Units Number of Shares Weighted Average Grant-Date Fair Value Weighted Average Remaining Contractual Term (in years) Unvested at December 31, 2018 5,752,046 $ 12.77 1.2 Granted 3,820,944 $ 14.01 Vested (898,023 ) $ 12.69 Forfeited (316,238 ) $ 13.15 Unvested at March 31, 2019 8,358,729 $ 13.33 1.3 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities and Sublease Income | As of March 31, 2019, maturities of operating lease liabilities and sublease income, by year are as follows: (in thousands) Operating Lease Payments Sublease Income Remainder of 2019 $ 9,473 $ (3,524 ) 2020 12,242 (2,898 ) 2021 11,917 (2,535 ) 2022 12,296 (336 ) 2023 12,728 — Thereafter 68,831 — Gross lease payments (income) 127,487 (9,293 ) Less: Imputed interest 38,820 Total operating lease liabilities $ 88,667 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values of Debt | As of March 31, 2019 and December 31, 2018 the carrying values of debt were as follows: March 31, 2019 December 31, 2018 Issuance date Maturity date Amount (in thousands) Effective Interest Rate Amount (in thousands) Effective Interest Rate 2018 Refinancing Facility Agreement October 2018 October 2025 $ 218,900 6.16% - 6.28% $ 219,450 6.00% - 6.10% Less: Unamortized issuance discount and issuance costs, net 1,960 2,035 Less: Current portion of debt, net 1,900 1,900 Long term debt, net $ 215,040 $ 215,515 |
Schedule of Future Minimum Payment Obligations of Principal Amounts Due | Principal and interest payments are due quarterly. As of March 31, 2019, future minimum payment obligations of principal amounts due by year under the 2018 Credit Facility were as follows, (in thousands): Remainder of 2019 $ 1,650 2020 2,200 2021 2,200 2022 2,200 2023 2,200 Thereafter 208,450 Total principal outstanding $ 218,900 |
Geographical Information (Table
Geographical Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Percentage of Revenue by Geographic Area | The following table sets forth the percentage of revenue by geographic area: Three Months Ended March 31, 2019 2018 United States 65 % 64 % Rest of world 35 % 36 % |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, (in thousands, except per share amounts) 2019 2018 Numerator: Net loss $ (17,777 ) $ (14,717 ) Denominator: Weighted-average shares outstanding - basic and diluted 126,786 101,212 Net loss per common share - basic and diluted: $ (0.14 ) $ (0.15 ) |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring And Related Activities [Abstract] | |
Summary of Pre-tax Costs Incurred | The November 2017 Plan was subject to applicable laws and consultation processes, as a part of the Company’s strategic plan to focus on its core product and improve efficiencies. In connection with these actions, the Company incurred the following pre-tax costs: Three Months Ended March 31, (in thousands) 2019 2018 Employee severance $ — $ 5 Contract termination and other costs (66 ) — Total restructuring costs $ (66 ) $ 5 |
Company Overview and Basis of_2
Company Overview and Basis of Presentation - Segment Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2019Segment | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Number of operating segment | 1 |
Company Overview and Basis of_3
Company Overview and Basis of Presentation - Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Related party expenses | $ 0.3 | $ 0.1 |
Maximum | Customer Concentration Risk | Sales Revenue, Net | ||
Related Party Transaction [Line Items] | ||
Substantial stockholder revenue percentage | 1.00% | 1.00% |
Substantial Stockholder | ||
Related Party Transaction [Line Items] | ||
Revenue | $ 0.4 | $ 0.4 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | Sep. 25, 2018USD ($) | Mar. 31, 2019USD ($)Instrument | Mar. 31, 2018USD ($)Instrument | Dec. 31, 2018USD ($) | Jan. 01, 2019USD ($) |
Summary Of Significant Accounting Policies [Line Items] | |||||
Deferred revenue, revenue recognized | $ 45,100,000 | $ 37,800,000 | |||
Deferred commissions, amortization period | 4 years | ||||
Amortization of deferred commissions | $ 500,000 | 300,000 | |||
Impairment loss related to deferred commissions | $ 0 | $ 0 | |||
Share-based compensation, fair value assumptions, expected dividend rate | 0.00% | 0.00% | |||
Cumulative amount of unrecognized stock-based compensation expense recognized | $ 89,900,000 | $ 15,111,000 | $ 8,540,000 | ||
Remaining unamortized stock-based compensation | $ 19,800,000 | ||||
Remaining weighted-average requisite service periods | 1 year 4 months 24 days | ||||
Impairment of long-lived assets | $ 0 | 0 | |||
Impairment of goodwill | 0 | 0 | |||
Private company investment | 3,600,000 | $ 3,600,000 | |||
Impairments on private company investment | 0 | 0 | |||
Observable price changes for private company investment | $ 0 | $ 0 | |||
Derivative financial instruments outstanding | Instrument | 0 | 0 | |||
Deferred rent balance | 7,500,000 | ||||
Liability for sabbatical leave, accrued balance | $ 4,700,000 | 4,400,000 | |||
Advertising and promotion costs | $ 6,300,000 | $ 4,700,000 | |||
Sale of private company investment, period of contingent consideration to be received | 3 years | ||||
Earn-out payment received | $ 1,000,000 | $ 1,000,000 | |||
Recognition of ROU assets | 60,266,000 | 0 | |||
Operating lease liabilities | 88,667,000 | ||||
Accrued Expenses And Other Current Liabilities | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Deferred rent balance | 300,000 | ||||
Other Non-Current Liabilities | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Deferred rent balance | 7,200,000 | ||||
Liability for sabbatical leave, accrued balance | 2,400,000 | 2,100,000 | |||
Accrued Compensation | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Liability for sabbatical leave, accrued balance | $ 2,300,000 | $ 2,300,000 | |||
ASC 842 | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Recognition of ROU assets | $ 63,100,000 | ||||
Operating lease liabilities | $ 92,800,000 | ||||
ASC 842 | Minimum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Operating lease terms | 1 year | ||||
ASC 842 | Maximum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Operating lease terms | 12 years | ||||
Capitalized Internal-Use Software | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Intangible assets estimated useful life | 3 years | ||||
Customer Concentration Risk | Sales Revenue, Net | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration of credit risk, customer | No single customer accounted for more than 10% of revenue | No single customer accounted for more than 10% of revenue | |||
Customer Concentration Risk | Accounts Receivable | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration of credit risk, customer | No customers accounted for more than 10% of accounts receivable, net | No customers accounted for more than 10% of accounts receivable, net | |||
Equity Incentive Plans | Time-Based Awards | New Hires | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Stock-based compensation, requisite service period | 4 years | ||||
Equity Incentive Plans | Time-Based Awards | Existing Employees | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Stock-based compensation, requisite service period | 3 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details 1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-04-01 $ in Millions | Mar. 31, 2019USD ($) |
Summary Of Significant Accounting Policies [Line Items] | |
Revenue, unsatisfied performance obligation | $ 121.3 |
Performance obligation, expected timing of satisfaction, period | 12 months |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Long-Lived Assets (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Building | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Property and equipment, estimated useful life | 40 years |
Computer Equipment | Minimum | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Property and equipment, estimated useful life | 2 years |
Computer Equipment | Maximum | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Furniture, Fixtures, and Other Assets | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Leasehold Improvements | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Property and equipment, estimated useful life | Shorter of remaining lease term or 5 years |
Leasehold Improvements | Maximum | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Purchased software | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Property and equipment, estimated useful life | 3 years |
Capitalized Internal-Use Software | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Acquisition intangible assets, estimated useful life | 3 years |
Customer Relationships | Minimum | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Acquisition intangible assets, estimated useful life | 5 years |
Customer Relationships | Maximum | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Acquisition intangible assets, estimated useful life | 7 years |
Trade Name | Minimum | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Acquisition intangible assets, estimated useful life | 2 years |
Trade Name | Maximum | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Acquisition intangible assets, estimated useful life | 10 years |
Technology | Minimum | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Acquisition intangible assets, estimated useful life | 3 years |
Technology | Maximum | |
Estimated Useful Lives Of Long Lived Assets [Line Items] | |
Acquisition intangible assets, estimated useful life | 8 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Components of Other Non-Operating Income (Expense) Recognized in Condensed Consolidated Financial Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Nonoperating Income Expense [Abstract] | ||
Interest Income | $ 938 | $ 56 |
Foreign currency losses, net | (18) | (249) |
Gain on sale of a private company investment | 1,001 | 999 |
Other income (expense), net | 58 | (173) |
Other non-operating income (expense), net | $ 1,979 | $ 633 |
Cash and Cash Equivalents - Add
Cash and Cash Equivalents - Additional Information (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Cash And Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 165,910,000 | $ 153,807,000 | $ 36,073,000 | $ 35,345,000 |
Cash in transit for credit and debit card transactions | 3,500,000 | 2,000,000 | ||
Restricted cash | $ 580,000 | $ 564,000 | ||
Restricted cash, asset, statement of financial position [extensible list] | us-gaap:OtherAssets |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Line Items] | ||
Gross property and equipment | $ 88,220 | $ 160,190 |
Less: Accumulated depreciation | (42,688) | (42,472) |
Property and equipment, net | 45,532 | 117,718 |
Building | ||
Property Plant And Equipment [Line Items] | ||
Gross property and equipment | 0 | 71,780 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Gross property and equipment | 21,453 | 21,448 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Gross property and equipment | 55,945 | 56,396 |
Furniture, Fixtures, and Other Assets | ||
Property Plant And Equipment [Line Items] | ||
Gross property and equipment | $ 10,822 | $ 10,566 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property Plant And Equipment [Abstract] | ||
Depreciation expense | $ 4.3 | $ 4.7 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Schedule of Capitalized Internal-Use Software (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Capitalized Computer Software Net [Abstract] | ||
Gross capitalized internal-use software | $ 113,298 | $ 109,133 |
Less: Accumulated amortization | (79,588) | (75,853) |
Capitalized internal use software, net | $ 33,710 | $ 33,280 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Finite Lived Intangible Assets [Line Items] | |||
Amortization expense related to capitalized internal-use software | $ 3,700 | $ 5,900 | |
Amortization expense | 1,025 | $ 1,092 | |
Capitalized internal-use software, net | 33,710 | $ 33,280 | |
Capitalized Internal-Use Software Net in Development Phase [Member] | |||
Finite Lived Intangible Assets [Line Items] | |||
Capitalized internal-use software, net | $ 16,900 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
Acquisition intangible assets, net, Gross Carrying Amount | $ 75,775 | $ 75,775 |
Acquisition intangible assets, net, Accumulated Amortization | (67,476) | (66,451) |
Acquisition intangible assets, net, Net Carrying Amount | 8,299 | 9,324 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquisition intangible assets, net, Gross Carrying Amount | 47,696 | 47,696 |
Acquisition intangible assets, net, Accumulated Amortization | (42,839) | (42,410) |
Acquisition intangible assets, net, Net Carrying Amount | 4,857 | 5,286 |
Trade Name | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquisition intangible assets, net, Gross Carrying Amount | 6,072 | 6,072 |
Acquisition intangible assets, net, Accumulated Amortization | (5,904) | (5,796) |
Acquisition intangible assets, net, Net Carrying Amount | 168 | 276 |
Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquisition intangible assets, net, Gross Carrying Amount | 22,007 | 22,007 |
Acquisition intangible assets, net, Accumulated Amortization | (18,733) | (18,245) |
Acquisition intangible assets, net, Net Carrying Amount | $ 3,274 | $ 3,762 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Summary of Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
Acquisition intangible assets, net, Net Carrying Amount | $ 8,299 | $ 9,324 |
Capitalized Internal-Use Software, Net | ||
Finite Lived Intangible Assets [Line Items] | ||
Remainder of 2019 | 9,241 | |
2020 | 6,189 | |
2021 | 1,353 | |
2022 | 0 | |
Acquisition intangible assets, net, Net Carrying Amount | 16,783 | |
Acquisition Intangible Assets, Net | ||
Finite Lived Intangible Assets [Line Items] | ||
Remainder of 2019 | 2,814 | |
2020 | 2,952 | |
2021 | 1,705 | |
2022 | 828 | |
Acquisition intangible assets, net, Net Carrying Amount | $ 8,299 |
Intangible Assets and Goodwil_6
Intangible Assets and Goodwill - Schedule of Carrying Amount of Goodwill, Net (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Beginning balance | $ 336,861 |
Ending Balance | $ 336,861 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($)offering_periodshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value assumptions, method used | Black-Scholes-Merton option pricing model |
Other Current Assets | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Proceeds receivable from stock option exercises. | $ | $ 6.8 |
2018 Employee Stock Purchase Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Offering period | 24 months |
Number of offering periods | offering_period | 4 |
Length of purchase period | 6 months |
Employee share purchase price percentage | 85.00% |
Initial offering period start date | Sep. 25, 2018 |
Initial offering period end date | Nov. 22, 2020 |
Time-Based Awards | Equity Incentive Plans | New Hires | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 4 years |
Time-Based Awards | Equity Incentive Plans | Existing Employees | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Maximum | Equity Incentive Plans | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration period | 10 years |
Common Stock | 2018 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares available for grant | 9,230,406 |
Common Stock | 2018 Employee Stock Purchase Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares available for grant | 2,673,444 |
Employee Benefit Plans - Summar
Employee Benefit Plans - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Outstanding, vested and expected to vest at December 31, 2018 | 18,452,375 | |
Granted | 2,225,766 | |
Exercised | (1,327,784) | |
Forfeited | (447,402) | |
Expired | (886,650) | |
Outstanding, vested and expected to vest at March 31, 2019 | 18,016,305 | 18,452,375 |
Vested and exercisable at March 31, 2019 | 9,234,768 | |
Weighted Average Exercise Price | ||
Outstanding, vested and expected to vest at December 31, 2018 | $ 14.39 | |
Granted | 12.35 | |
Exercised | 10.86 | |
Forfeited | 14.33 | |
Expired | 15.99 | |
Outstanding, vested and expected to vest at March 31, 2019 | 14.32 | $ 14.39 |
Vested and exercisable at March 31, 2019 | $ 14.72 | |
Additional Disclosures | ||
Outstanding, vested and expected to vest, Aggregate Intrinsic Value, Beginning balance | $ 70,104 | $ 8,482 |
Vested and exercisable at March 31, 2019 | $ 32,262 | |
Outstanding, vested and expected to vest, Weighted Average Remaining Contractual Term | 7 years 8 months 12 days | 7 years 6 months |
Vested and exercisable, Weighted Average Remaining Contractual Term | 6 years 8 months 12 days |
Employee Benefit Plans - Summ_2
Employee Benefit Plans - Summary of Restricted Stock Units (Details) - Restricted Stock Units - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Unvested at December 31, 2018 | 5,752,046 | |
Granted | 3,820,944 | |
Vested | (898,023) | |
Forfeited | (316,238) | |
Unvested at March 31, 2019 | 8,358,729 | 5,752,046 |
Weighted Average Grant-Date Fair Value | ||
Unvested at December 31, 2018 | $ 12.77 | |
Granted | 14.01 | |
Vested | 12.69 | |
Forfeited | 13.15 | |
Unvested at March 31, 2019 | $ 13.33 | $ 12.77 |
Weighted Average Remaining Contractual Term (in years) | ||
Unvested, Weighted Average Remaining Contractual Term | 1 year 3 months 19 days | 1 year 2 months 12 days |
Employee Benefit Plans - Summ_3
Employee Benefit Plans - Summary of Estimated Fair Value of Stock Options and ESPP (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (in years) | 5 years 10 months 25 days | 5 years 9 months 18 days |
Risk-free interest rate | 2.50% | 2.70% |
Volatility | 46.00% | 43.00% |
Dividend yield | 0.00% | 0.00% |
Fair value of common stock | $ 12.35 | $ 13.20 |
Employee Benefit Plans - Summ_4
Employee Benefit Plans - Summary of Stock-based Compensation Expense Recognized in Financial Statements (Details) - USD ($) $ in Thousands | Sep. 25, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense, net of amounts capitalized | $ 89,900 | $ 15,111 | $ 8,540 |
Capitalized stock-based compensation expense | 953 | 328 | |
Stock-based compensation expense | 16,064 | 8,868 | |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense, net of amounts capitalized | 1,096 | 658 | |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense, net of amounts capitalized | 4,766 | 3,447 | |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense, net of amounts capitalized | 2,780 | 768 | |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense, net of amounts capitalized | $ 6,469 | $ 3,667 |
Employee Benefit Plans - Unamor
Employee Benefit Plans - Unamortized Stock-based Compensation (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation (in thousands) | $ 128,627 |
Weighted average vesting period (in years) | 1 year 4 months 24 days |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation (in thousands) | $ 49,343 |
Weighted average vesting period (in years) | 2 years 3 months 19 days |
Restricted Stock Units (Service-Based) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation (in thousands) | $ 55,568 |
Weighted average vesting period (in years) | 2 years 10 months 25 days |
Restricted Stock Units (Performance-Based) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation (in thousands) | $ 19,784 |
Weighted average vesting period (in years) | 1 year 4 months 24 days |
ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation (in thousands) | $ 3,932 |
Weighted average vesting period (in years) | 1 year 7 months 6 days |
Employee Benefit Plans - 401(k)
Employee Benefit Plans - 401(k) Plan - Additional Information (Details) - United States - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Matching contribution of deferrals for eligible employees | 25.00% | |
Matching contribution compensation expense | $ 1 | $ 0.7 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jul. 31, 2015 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2018 | |
Operating Leased Assets [Line Items] | |||||
Operating lease costs (gross lease expense) | $ 3,000 | $ 900 | |||
Variable Lease Costs | 1,500 | ||||
Sublease Income | $ 1,800 | ||||
Operating lease, Weighted average remaining operating lease term | 9 years 6 months 10 days | ||||
Operating lease, weighted average discount rate, percent | 7.70% | ||||
Financing obligation on leased facility | $ 0 | $ 92,009 | |||
San Mateo Facility | |||||
Operating Leased Assets [Line Items] | |||||
Operating lease expiration period | Dec. 31, 2028 | ||||
Capitalized construction costs | $ 71,800 | ||||
Leasehold improvement costs reimbursed by landlord | $ 14,300 | ||||
Financing obligation on leased facility | $ 92,000 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities and Sublease Income (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Operating Leases Payments | |
Remainder of 2019 | $ 9,473 |
2020 | 12,242 |
2021 | 11,917 |
2022 | 12,296 |
2023 | 12,728 |
Thereafter | 68,831 |
Gross lease payments (income) | 127,487 |
Less: Imputed interest | 38,820 |
Operating lease liabilities | 88,667 |
Sublease Income | |
Remainder of 2019 | (3,524) |
2020 | (2,898) |
2021 | (2,535) |
2022 | (336) |
2023 | 0 |
Thereafter | 0 |
Gross lease payments (income) | $ (9,293) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Mar. 31, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Non-cancellable purchase orders for procurement of goods and services to be received through 2021 | $ 14 |
Standby letters of credit issued | $ 5.2 |
Debt - Schedule of Carrying Val
Debt - Schedule of Carrying Values of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Total debt | $ 218,900 | |
Less: Unamortized issuance discount and issuance costs, net | 1,960 | $ 2,035 |
Debt, current | 1,900 | 1,900 |
Long term debt, net | $ 215,040 | 215,515 |
2018 Refinancing Facility Agreement | ||
Debt Instrument [Line Items] | ||
Issuance date | Oct. 31, 2018 | |
Maturity date | Oct. 10, 2025 | |
Total debt | $ 218,900 | $ 219,450 |
2018 Refinancing Facility Agreement | Minimum | ||
Debt Instrument [Line Items] | ||
Effective Interest Rate | 6.16% | 6.00% |
2018 Refinancing Facility Agreement | Maximum | ||
Debt Instrument [Line Items] | ||
Effective Interest Rate | 6.28% | 6.10% |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Oct. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Unamortized issuance discount and issuance costs | $ (1,960,000) | $ (2,035,000) | |
Prepaid Expenses and Other Current Assets | |||
Debt Instrument [Line Items] | |||
Unamortized issuance discount and issuance costs | 400,000 | 400,000 | |
Other Assets | |||
Debt Instrument [Line Items] | |||
Unamortized issuance discount and issuance costs | $ 1,300,000 | $ 1,400,000 | |
2018 Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt instrument, due date | Oct. 10, 2025 | ||
Line of credit facility, remaining borrowing capacity | $ 69,800,000 | ||
2018 Credit Facility | Term Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 220,000,000 | ||
Debt instrument, quarterly principal payments | $ 550,000 | ||
Debt instrument, due date | Oct. 10, 2025 | ||
2018 Credit Facility | Domestic Line of Credit | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 75,000,000 | ||
Debt instrument, due date | Oct. 10, 2023 | ||
2018 Credit Facility | Alternate Base Rate | Term Loan | |||
Debt Instrument [Line Items] | |||
Applicable margin | 2.75% | ||
2018 Credit Facility | Alternate Base Rate | Domestic Line of Credit | Minimum | |||
Debt Instrument [Line Items] | |||
Applicable margin | 0.75% | ||
2018 Credit Facility | Alternate Base Rate | Domestic Line of Credit | Maximum | |||
Debt Instrument [Line Items] | |||
Applicable margin | 1.50% | ||
2018 Credit Facility | Eurocurrency Rate | Term Loan | |||
Debt Instrument [Line Items] | |||
Applicable margin | 3.75% | ||
2018 Credit Facility | Eurocurrency Rate | Domestic Line of Credit | Minimum | |||
Debt Instrument [Line Items] | |||
Applicable margin | 1.75% | ||
2018 Credit Facility | Eurocurrency Rate | Domestic Line of Credit | Maximum | |||
Debt Instrument [Line Items] | |||
Applicable margin | 2.50% |
Debt - Schedule of Future Minim
Debt - Schedule of Future Minimum Payment Obligations of Principal Amounts Due (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2019 | $ 1,650 |
2020 | 2,200 |
2021 | 2,200 |
2022 | 2,200 |
2023 | 2,200 |
Thereafter | 208,450 |
Total principal outstanding | $ 218,900 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision (benefit) | $ (138) | $ 300 |
Geographical Information - Sche
Geographical Information - Schedule of Percentage of Revenue by Geographic Area (Details) - Geographic Concentration Risk - Revenue | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
United States | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Percentage of revenue by geographic area | 65.00% | 64.00% |
Rest of World | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Percentage of revenue by geographic area | 35.00% | 36.00% |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net loss | $ (17,777) | $ (14,717) |
Denominator: | ||
Weighted-average shares outstanding - basic and diluted | 126,786 | 101,212 |
Net loss per common share - basic and diluted: | $ (0.14) | $ (0.15) |
Net Loss Per Share - Additional
Net Loss Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of net loss per share | 27.3 | 27.3 |
Restructuring Costs - Additiona
Restructuring Costs - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 17 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2019 | |
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring costs | $ (66) | $ 5 | |||
Accrued Expenses And Other Current Liabilities | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Balances recorded in accrued expenses and other current liabilities | $ 600 | ||||
Other Non-Current Liabilities | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Balances recorded in other non-current liabilities | 300 | ||||
November 2017 Restructuring Plan | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring costs | $ 3,500 | $ 1,700 | $ 5,100 | ||
Restructuring cost reversed | $ (100) |
Restructuring Costs - Summary o
Restructuring Costs - Summary of Pre-tax Costs Incurred (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring Cost And Reserve [Line Items] | ||
Restructuring costs | $ (66) | $ 5 |
Employee Severance | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring costs | 0 | 5 |
Contract Termination And Other Costs | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring costs | $ (66) | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Usabilla Holding B.V. - Subsequent Event $ in Millions | Apr. 01, 2019USD ($)shares |
Subsequent Event [Line Items] | |
Closing date of acquisition | Apr. 1, 2019 |
Estimated total purchase price | $ 84.3 |
Common stock issued in connection with acquisition | shares | 1,944,211 |
Payments to acquire businesses gross | $ 54.2 |