Q2 HOLDINGS, INC., 10-K filed on 2/19/2019
Annual Report
v3.10.0.1
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2018
Jan. 31, 2019
Jun. 30, 2018
Document And Entity Information [Abstract]      
Entity Registrant Name Q2 Holdings, Inc.    
Entity Central Index Key 0001410384    
Trading Symbol qtwo    
Current Fiscal Year End Date --12-31    
Entity Filer Category Large Accelerated Filer    
Entity Common Stock Shares Outstanding   43,581,407  
Document Type 10-K    
Document Period End Date Dec. 31, 2018    
Amendment Flag false    
Document Fiscal Year Focus 2018    
Document Fiscal Period Focus FY    
Smaller Reporting Company false    
Emerging Growth Company false    
Shell Company false    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Public Float     $ 2,428,200,609
v3.10.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Current assets:    
Cash and cash equivalents $ 108,341 $ 57,961
Restricted cash 1,815 2,315
Investments 68,979 41,685
Accounts receivable, net 19,668 13,203
Contract assets, current portion 598 0
Prepaid expenses and other current assets 3,983 3,115
Deferred solution and other costs, current portion 10,501 9,246
Deferred implementation costs, current portion 4,427 3,562
Total current assets 218,312 131,087
Property and equipment, net 34,994 34,544
Deferred solution and other costs, net of current portion 16,761 12,973
Deferred implementation costs, net of current portion 9,948 8,295
Intangible assets, net 63,296 12,034
Goodwill 107,907 12,876
Contract assets, net of current portion 10,272 0
Other long-term assets 2,230 1,006
Total assets 463,720 212,815
Current liabilities:    
Accounts payable 9,169 7,621
Accrued liabilities 9,329 10,562
Accrued compensation 12,652 11,511
Deferred revenues, current portion 42,531 38,379
Total current liabilities 73,681 68,073
Convertible notes, net of current portion 182,723 0
Deferred revenues, net of current portion 23,063 28,289
Deferred rent, net of current portion 8,151 9,393
Other long-term liabilities 17,202 438
Total liabilities 304,820 106,193
Commitments and contingencies (Note 11)
Stockholders' equity:    
Preferred stock: $0.0001 par value; 5,000 shares authorized, no shares issued or outstanding as of December 31, 2018 and 2017 0 0
Common stock: $0.0001 par value; 150,000 shares authorized, 43,535 shares issued and outstanding as of December 31, 2018, and 41,994 shares issued, and 41,967 shares outstanding as of December 31, 2017 4 4
Treasury stock at cost; Zero and 27 shares at December 31, 2018 and 2017, respectively 0 (855)
Additional paid-in capital 331,355 259,726
Accumulated other comprehensive loss (37) (139)
Accumulated deficit (172,422) (152,114)
Total stockholders' equity 158,900 106,622
Total liabilities and stockholders' equity $ 463,720 $ 212,815
v3.10.0.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Preferred stock, par value (in usd per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized (in shares) 5,000,000 5,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, par value (in usd per share) $ 0.0001 $ 0.0001
Common stock, shares authorized (in shares) 150,000,000 150,000,000
Common stock, shares issued (in shares) 43,535,000 41,994,000
Common stock, shares outstanding (in shares) 43,535,000 41,967,000
Treasury stock (in shares) 0 27,000
v3.10.0.1
Consolidated Statements of Comprehensive Loss - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Income Statement [Abstract]      
Revenues $ 241,100 $ 193,978 $ 150,224
Cost of revenues [1] 121,855 99,485 77,429
Gross profit 119,245 94,493 72,795
Operating expenses:      
Sales and marketing [1] 48,124 41,170 36,284
Research and development [1] 51,334 40,338 32,460
General and administrative [1] 44,990 37,179 31,959
Acquisition related costs 4,145 1,232 6,307
Amortization of acquired intangibles 1,844 1,481 1,470
Unoccupied lease charges 658 0 33
Total operating expenses 151,095 121,400 108,513
Loss from operations (31,850) (26,907) (35,718)
Other income (expense):      
Interest and other income 2,811 553 358
Interest and other expense (10,161) (124) (567)
Total other income (expense), net (7,350) 429 (209)
Loss before income taxes (39,200) (26,478) (35,927)
Benefit from (provision for) income taxes 3,803 314 (427)
Net loss (35,397) (26,164) (36,354)
Other comprehensive gain (loss):      
Unrealized gain (loss) on available-for-sale investments 24 (85) 47
Foreign currency translation adjustment 78 0 0
Comprehensive loss $ (35,295) $ (26,249) $ (36,307)
Net loss per common share, basic and diluted (usd per share) $ (0.83) $ (0.63) $ (0.92)
Weighted average common shares outstanding:      
Basic and diluted (in shares) 42,797 41,218 39,649
[1] Includes stock-based compensation expenses as follows: Year Ended December 31, 2018 2017 2016Cost of revenues $4,773 $3,729 $2,043Sales and marketing 5,837 3,243 2,231Research and development 6,852 4,464 2,934General and administrative 11,758 9,503 5,432Total stock-based compensation expenses $29,220 $20,939 $12,640
v3.10.0.1
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Stock-based compensation expenses $ 29,220 $ 20,939 $ 12,640
Cost of revenues      
Stock-based compensation expenses 4,773 3,729 2,043
Sales and marketing      
Stock-based compensation expenses 5,837 3,243 2,231
Research and development      
Stock-based compensation expenses 6,852 4,464 2,934
General and administrative      
Stock-based compensation expenses $ 11,758 $ 9,503 $ 5,432
v3.10.0.1
Consolidated Statements of Changes in Stockholders' Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock
Treasury Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Loss
Accumulated Deficit
Common stock, beginning balance (in shares) at Dec. 31, 2015   38,891        
Beginning balance at Dec. 31, 2015 $ 117,974 $ 4 $ (41) $ 207,541 $ (101) $ (89,429)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Stock-based compensation 12,640     12,640    
Follow-on offerings, net of issuance costs 3     3    
Shares acquired to settle the exercise of stock options (in shares)   (14)        
Shares acquired to settle the exercise of stock options (376)   (376)      
Exercise of stock options (in shares)   1,379        
Exercise of stock options 6,301     6,301    
Shares issued for the vesting of restricted stock awards (in shares)   169        
Shares issued for the vesting of restricted stock awards 0          
Other comprehensive gain (loss) 47       47  
Net loss (36,354)         (36,354)
Common stock, ending balance (in shares) at Dec. 31, 2016   40,425        
Ending balance at Dec. 31, 2016 100,235 $ 4 (417) 226,485 (54) (125,783)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Adoption of new accounting standard (see Note 2)       167   (167)
Stock-based compensation 20,939     20,939    
Shares acquired to settle the exercise of stock options (in shares)   (11)        
Shares acquired to settle the exercise of stock options (438)   (438)      
Exercise of stock options (in shares)   1,205        
Exercise of stock options 12,135     12,135    
Shares issued for the vesting of restricted stock awards (in shares)   348        
Shares issued for the vesting of restricted stock awards 0          
Other comprehensive gain (loss) (85)       (85)  
Net loss $ (26,164)         (26,164)
Common stock, ending balance (in shares) at Dec. 31, 2017 41,967 41,967        
Ending balance at Dec. 31, 2017 $ 106,622 $ 4 (855) 259,726 (139) (152,114)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Stock-based compensation 29,545     29,545    
Shares acquired to settle the exercise of stock options (in shares)   (7)        
Shares acquired to settle the exercise of stock options (395)   (62) (333)    
Exercise of stock options (in shares)   1,038        
Exercise of stock options 12,982     12,982    
Shares issued for the vesting of restricted stock awards (in shares)   537        
Retirement of treasury stock 0   917 (164)   (753)
Equity component of convertible senior notes, less issuance costs 48,919     48,919    
Purchase of convertible notes hedges (41,699)     (41,699)    
Issuance of warrants 22,379     22,379    
Other comprehensive gain (loss) 102       102  
Net loss $ (35,397)         (35,397)
Common stock, ending balance (in shares) at Dec. 31, 2018 43,535 43,535        
Ending balance at Dec. 31, 2018 $ 158,900 $ 4 $ 0 $ 331,355 $ (37) $ (172,422)
v3.10.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Cash flows from operating activities:      
Net loss $ (35,397) $ (26,164) $ (36,354)
Adjustments to reconcile net loss to net cash provided by operating activities:      
Amortization of deferred implementation, solution and other costs 8,448 7,455 6,775
Depreciation and amortization 16,802 14,946 12,199
Amortization of debt issuance costs 829 28 96
Amortization of debt discount 7,646 0 0
Amortization of premiums on investments (3) 319 425
Stock-based compensation expenses 29,545 20,939 12,640
Deferred income taxes (2,050) (350) 281
Allowance for sales credits (141) (3) 17
Loss on disposal of long-lived assets 19 33 184
Impairment of intangible assets 17 0 20
Unoccupied lease charges 658 0 33
Changes in operating assets and liabilities:      
Accounts receivable, net (4,677) (961) (3,247)
Prepaid expenses and other current assets 1,844 240 (237)
Deferred solution and other costs (8,780) (5,353) (7,100)
Deferred implementation costs (6,993) (5,179) (6,076)
Contract assets (5,812) 0 0
Other long-term assets (1,359) (236) 47
Accounts payable (263) 3,367 426
Accrued liabilities 952 (4,369) 10,641
Deferred revenue 4,454 4,837 9,593
Deferred rent and other long-term liabilities (1,144) (77) 3,031
Net cash provided by operating activities 4,595 9,472 3,394
Cash flows from investing activities:      
Purchases of investments (75,674) (27,749) (40,160)
Maturities of investments 48,407 27,907 41,105
Purchases of property and equipment (13,285) (12,315) (14,349)
Business combinations and asset acquisitions, net of cash acquired (130,694) (3,816) (95)
Purchase of intangible assets (46) 0 (323)
Capitalized software development costs 0 (970) (2,692)
Net cash used in investing activities (171,292) (16,943) (16,514)
Cash flows from financing activities:      
Proceeds from issuance of convertible notes, net of issuance costs 223,167 0 0
Purchase of convertible notes bond hedge (41,699) 0 0
Proceeds from issuance of warrants 22,379 0 0
Payments on financing obligations 0 0 (4,890)
Payments on capital lease obligations 0 0 (161)
Proceeds from the issuance of common stock, net of issuance costs 0 0 (8)
Proceeds from exercise of stock options to purchase common stock 12,730 11,559 6,003
Net cash provided by financing activities 216,577 11,559 944
Net increase (decrease) in cash and cash equivalents 49,880 4,088 (12,176)
Cash, cash equivalents, and restricted cash beginning of period 60,276 56,188 68,364
Cash, cash equivalents, and restricted cash end of period 110,156 60,276 56,188
Supplemental disclosures of cash flow information:      
Cash paid for taxes 215 128 120
Cash paid for interest 810 68 217
Supplemental disclosure of non-cash investing and financing activities:      
Acquisition consideration payable to seller - hold back 0 150 0
Shares acquired to settle the exercise of stock options (395) (438) (376)
Data center assets acquired under deferred payment arrangements or financing arrangements 0 4,102 0
Reconciliation of cash, cash equivalents, and restricted cash as shown in the statement of cash flows:      
Total cash, cash equivalents, and restricted cash $ 60,276 $ 56,188 $ 68,364
v3.10.0.1
Organization and Description of Business
12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Description of Business
Organization and Description of Business
Q2 Holdings, Inc. and its wholly-owned subsidiaries, collectively the "Company," is a leading provider of secure, cloud-based digital solutions that transform the ways in which traditional and emerging financial services providers engage with account holders and end users, or End Users. The Company sells its solutions to regional and community financial institutions, alternative finance and leasing companies, and financial technology companies. The Company's solutions enable customers to deliver robust suites of digital banking, lending, leasing, and banking as a service, or BaaS, services that make it possible for account holders and End Users to transact and engage anytime, anywhere and on any device. The Company delivers its solutions to the substantial majority of its customers using a software-as-a-service, or SaaS, model under which its customers pay subscription fees for the use of the Company's solutions. The Company was incorporated in Delaware in March 2005 and is a holding company that owns 100% of the outstanding capital stock of Q2 Software, Inc. The Company's headquarters are located in Austin, Texas.
v3.10.0.1
Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, and Securities and Exchange Commission, or SEC, requirements. The consolidated financial statements include the accounts of Q2 Holdings, Inc. and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Effective January 1, 2018 the Company adopted the requirements of Accounting Standards Update, or ASU, No. 2014-09 "Revenue from Contracts with Customers (Topic 606)," or the new revenue standard, and ASU No. 2016-18 "Statement of Cash Flows (Topic 230): Restricted Cash." All amounts and disclosures set forth in this Form 10-K have been updated to comply with the new standards.
Reclassifications
Certain amounts appearing in the prior year's Consolidated Statements of Cash Flows have been reclassified to conform to the current year's presentation.
Use of Estimates
The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses. Significant items subject to such estimates include revenue recognition including determining the nature and timing of satisfaction of performance obligations, variable consideration, standalone selling price, and other revenue items requiring significant judgment; stock-based compensation; the carrying value of goodwill; the fair value of acquired intangibles; the capitalization of software development costs; the useful lives of property and equipment and long-lived intangible assets; fair value of contingent consideration; fair value of the conversion feature; and income taxes. In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments acquired with an original maturity of ninety days or less at the date of purchase to be cash equivalents. Cash equivalents are stated at cost or fair value based on the underlying security.
Restricted Cash
Restricted cash consists of deposits held as collateral for the Company's secured letters of credit issued in place of the security deposit for the Company's corporate headquarters.
Investments
Investments consist primarily of U.S. government agency bonds, corporate bonds, commercial paper, certificates of deposit and money market funds. All investments are considered available for sale and are carried at fair value.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, restricted cash, investments and accounts receivable. The Company's cash and cash equivalents, restricted cash and investments are placed with high credit quality financial institutions and issuers, and at times may exceed federally-insured limits. The Company has not experienced any loss relating to cash and cash equivalents or restricted cash in these accounts. The Company provides credit, in the normal course of business, to a number of its customers. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. No individual customer accounted for 10% or more of revenues for each of the years ended December 31, 2018, 2017 and 2016. No individual customer accounted for 10% or more of accounts receivable, net, as of December 31, 2018 and 2017.
Contract Balances
The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables (contract assets), and deferred revenues (contract liabilities). Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Contract assets that are expected to be billed during the succeeding twelve-month period are recorded in contract assets, current portion, and the remaining portion is recorded in contract assets, net of current portion on the accompanying consolidated balance sheets at the end of each reporting period. A contract liability results when the Company receives prepayments or deposits from customers in advance for implementation, maintenance and other services, as well as initial subscription fees. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed. The Company recognizes contract liabilities as revenues when the services are performed, and the corresponding revenue recognition criteria are met. Contract liabilities that are expected to be recognized as revenues during the succeeding twelve-month period are recorded in deferred revenues, current portion, and the remaining portion is recorded in deferred revenue, net of current portion, on the accompanying consolidated balance sheets at the end of each reporting period.
Accounts Receivable
Accounts receivable are stated at net realizable value, including both billed and unbilled receivables to customers. Unbilled receivable balances arise primarily when the Company provides services in advance of billing for those services. Generally, billing for revenues related to the number of End Users and the number of transactions processed by the Company's End Users that are included in the Company's minimum subscription fee occurs in the month the revenue is recognized, resulting in accounts receivable. Billing for revenues relating to the number of End Users and the number of transactions processed by the Company's End Users that are in excess of the Company's minimum subscription fees are, generally, billed in the month following the month the revenues were earned, resulting in an unbilled receivable. Included in the accounts receivable balances as of December 31, 2018 and 2017 were unbilled receivables of $3.2 million and $2.1 million, respectively.
The Company assesses the collectability of outstanding accounts receivable on an ongoing basis and maintains an allowance for doubtful accounts for accounts receivable deemed uncollectable. As of December 31, 2018 and 2017, the Company did not provide for an allowance for doubtful accounts, as all amounts outstanding were deemed collectable. Historically, the Company's collection experience has not varied significantly, and bad debt expenses have been insignificant.
The Company maintains a reserve for estimated sales credits issued to customers for billing disputes or other service-related reasons. This allowance is recorded as a reduction against current period revenues and accounts receivable. In estimating this allowance, the Company analyzes prior periods to determine the amounts of sales credits issued to customers compared to the revenues in the period that related to the original customer invoice. This estimate is analyzed quarterly and adjusted as necessary. 
The following table shows the Company's allowance for sales credits as follows:
 
 
Beginning Balance
 
Additions
 
Deductions
 
Ending Balance
Year Ended December 31, 2016
 
$
212

 
$
488

 
$
(472
)
 
$
228

Year Ended December 31, 2017
 
228

 
683

 
(685
)
 
226

Year Ended December 31, 2018
 
$
226

 
$
508

 
$
(367
)
 
$
367


Deferred Revenues
Deferred revenues primarily consist of amounts that have been billed to or received from customers in advance of revenue recognition and prepayments received from customers in advance for implementation, maintenance and other services, as well as initial subscription fees. The Company recognizes deferred revenues as revenues when the services are performed and the corresponding revenue recognition criteria are met. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed.

The net decrease in the deferred revenue balance for the year ended December 31, 2018, is primarily driven by the recognition of $37.0 million of revenue that was included in the deferred revenue balance at December 31, 2017 and a $12.0 million decrease from the adoption of the new revenue standard and the related netting of contract assets and liabilities on a contract-by-contract basis, partially offset by cash payments received or due in advance of satisfying the Company's performance obligations of $47.9 million. Amounts recognized from deferred revenues represent primarily revenue from the sale of subscription and implementation services.

The Company's payment terms vary by the type and location of its customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer.

On December 31, 2018, the Company had $872.2 million of remaining performance obligations, which represents contracted revenue minimums that have not yet been recognized, including amounts that will be invoiced and recognized as revenue in future periods. The Company expects to recognize approximately 48% percent of its remaining performance obligations as revenue in the next 24 months, an additional 41% percent in the next 25 to 48 months, and the balance thereafter.
Deferred Implementation Costs
The Company capitalizes certain personnel and other costs such as employee salaries, benefits and the associated payroll taxes that are direct and incremental to the implementation of its solutions. The Company analyzes implementation costs that may be capitalized to assess their recoverability, and only capitalizes costs that it anticipates to be recoverable. The Company assesses the recoverability of its deferred implementation costs by comparing the greater of the amount of the non-cancellable portion of a customer's contract and the non-refundable customer prepayments received as it relates to the specific implementation costs incurred. The Company begins amortizing the deferred implementation costs for an implementation once the revenue recognition criteria have been met, and the Company amortizes those deferred implementation costs ratably over the expected period of customer benefit, which has been determined to be the estimated life of the technology, which the Company estimates to be five to seven years. The Company determined the period of benefit by considering factors such as historically high renewal rates with similar customers and contracts, initial contract length, an expectation that there will still be a demand for the product at the end of its term, and the significant costs to switch to a competitor's product, all of which are governed by the estimated useful life of the technology.

The portion of deferred implementation costs expected to be amortized during the succeeding twelve-month period is recorded in current assets as deferred implementation costs, current portion, and the remainder is recorded in long-term assets as deferred implementation costs, net of current portion. The Company capitalized implementation costs in the amount of $7.3 million and $5.2 million during the years ended December 31, 2018 and 2017, respectively, and recognized $4.7 million and $4.4 million of amortization during the years ended December 31, 2018 and 2017, respectively. Amortization expense is included in cost of revenues in the accompanying consolidated statements of comprehensive loss.
Deferred Solution and Other Costs
The Company capitalizes sales commissions and other third-party costs such as third-party licenses and maintenance related to its customer agreements. The Company capitalizes sales commissions because the commission charges are so closely related to the revenues from the non-cancellable customer agreements that they should be recorded as an asset and charged to expense over the same period that the related revenue is recognized. Under the new revenue standard, the Company capitalizes commissions and bonuses for those involved in the sale, including direct employees and indirect supervisors, as these are incremental to the sale. The Company typically pays commissions in two increments. The initial payment is made after the contract has been executed and the initial deposit has been received from the customer, and the final payment is made upon commencement date. The Company requires that an individual remain employed to collect a commission when it is due. The service period between the first and second payment is considered to be a substantive service period, and as a result, the Company expenses the final payment when made. The Company begins amortizing deferred solution and other costs for a particular customer agreement once the revenue recognition criteria are met and amortizes those deferred costs over the expected period of customer benefit, which has been determined to be the estimated life of the technology, which the Company estimates to be five to seven years. The Company determined the period of benefit by considering factors such as historically high renewal rates with similar customers and contracts, initial contract length, an expectation that there will still be a demand for the product at the end of its term, and the significant costs to switch to a competitor's product, all of which are governed by the estimated useful life of the technology.

The Company analyzes solution and other costs that may be capitalized to assess their recoverability and only capitalizes costs that it anticipates being recoverable. The portion of capitalized costs expected to be amortized during the succeeding twelve-month period is recorded in current assets as deferred solution and other costs, current portion, and the remainder is recorded in long-term assets as deferred solution and other costs, net of current portion. The Company capitalized $6.7 million and $4.6 million in deferred commissions costs during the years ended December 31, 2018 and 2017, respectively, and recognized $3.6 million and $3.1 million of amortization during the years ended December 31, 2018 and 2017, respectively. Amortization expense is included in sales and marketing expenses in the accompanying consolidated statements of comprehensive loss.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the related assets. Maintenance and repairs that do not extend the life of or improve an asset are expensed in the period incurred.
The estimated useful lives of property and equipment are as follows:
Computer hardware and equipment
 
3 - 5 years
Purchased software and licenses
 
3 - 5 years
Furniture and fixtures
 
7 years
Leasehold improvements
 
Lesser of estimated useful life or lease term

Purchase Price Allocation, Intangible Assets, and Goodwill
The purchase price allocation for business combinations and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values. The Company early adopted Accounting Standards Update, or ASU, No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" as of January 1, 2017. Under ASU 2017-01, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the single asset or group of assets, as applicable, is not a business. If it is not met, the Company determines whether the single asset or group of assets, as applicable, meets the definition of a business.

In connection with the Company's acquisitions and asset purchase discussed in Note 3 - Business Combinations and Asset Acquisition, the Company recorded certain intangible assets, including acquired technology, customer relationships, trademarks, non-compete agreements and assembled workforce. Amounts allocated to the acquired intangible assets are being amortized on a straight-line basis over the estimated useful lives. The Company periodically reviews the estimated useful lives and fair values of its identifiable intangible assets, taking into consideration any events or circumstances which might result in a diminished fair value or revised useful life.

The excess purchase price over the fair value of assets acquired is recorded as goodwill. The Company tests goodwill for impairment annually in October, or whenever events or changes in circumstances indicate an impairment may have occurred. Because the Company operates in a single reporting unit, the impairment test is performed at the consolidated entity level by comparing the estimated fair value of the Company to the carrying value of the Company. The Company estimates the fair value of the reporting unit using a "step one" analysis using a fair-value-based approach based on the market capitalization or a discounted cash flow analysis of projected future results to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Determining the fair value of goodwill is subjective in nature and often involves the use of estimates and assumptions including, without limitation, use of estimates of future prices and volumes for the Company's products, capital needs, economic trends and other factors which are inherently difficult to forecast. If actual results, or the plans and estimates used in future impairment analyses are lower than the original estimates used to assess the recoverability of these assets, the Company could incur impairment charges in a future period.
Revenues
Revenues are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services over the term of the agreement, generally when the Company's solutions are implemented and made available to the customers. The promised consideration may include fixed amounts, variable amounts or both. Revenues are recognized net of sales credits and allowances.
Revenue-generating activities are directly related to the sale, implementation and support of the Company's solutions within a single operating segment. The Company derives the majority of its revenues from subscription fees for the use of its solutions hosted in either the Company's data centers or cloud-based hosting services, transaction revenue from bill-pay solutions, as well as revenues for customer support and implementation services related to the Company's solutions. The Company recognizes the corresponding revenues over time on a ratable basis over the customer agreement term. The Company accounts for revenue in accordance with the new revenue standard, Revenue from Contracts with Customers, which was adopted on January 1, 2018, using the modified retrospective method.
The following tables disaggregate the Company's revenue by major source:
 
 
Year Ended December 31, 2018
 
 
Subscription
 
Transactional
 
Services and Other
 
Consolidated
Total Revenues
 
$
168,226

 
$
39,232

 
$
33,642

 
$
241,100


Subscription Fee Revenues
The Company's software solutions are available for use as hosted application arrangements under subscription fee agreements without licensing perpetual rights to the software. Subscription fees from these applications, including contractual periodic price increases, are recognized over time on a ratable basis over the customer agreement term beginning on the date the Company's solution is made available to the customer. Amounts that have been invoiced are recorded in accounts receivable and deferred revenues or revenues, depending on whether the revenue recognition criteria have been met. Periodic price increases are estimated at contract inception and result in contract assets as revenue recognition may exceed the amount billed early in the contract. Additional fees for monthly usage above the levels included in the standard subscription fee are recognized as revenue in the month when the usage amounts are determined and reported.
A small portion of the Company's customers host and manage the Company's solutions on-premises or in third-party data centers under term license and maintenance agreements. Term licenses sold with maintenance entitle the customer to technical support, upgrades and updates to the software on a when-and-if-available basis. Under the new revenue standard, the Company recognizes software license revenue once the customer obtains control of the license, which generally occurs at the start of each license term. The Company recognizes the remaining arrangement consideration for maintenance revenue over time on a ratable basis over the term of the software license. If the expected length of time between when the Company transfers the software license to the customer and when the customer pays for it results in a significant financing component, the Company adjusts the promised amount of consideration for the effects of the time value of money, which reflects the price the customer would have paid when the license was transferred. Revenues from term licenses and maintenance agreements and the related financing component were not significant in the periods presented.
Transactional Revenues
The Company earns the majority of its transactional revenues based on the number of bill-pay transactions that End Users initiate on its digital banking platform. The Company also generates a smaller portion of its transactional revenues from interchange fees generated when End Users utilize debit cards integrated with its Q2 CorePro API or Q2 Biller Direct products. The Company recognizes revenue for bill-pay transaction services and interchange fees in the month incurred based on actual transactions.
Services and Other Revenues
Implementation services are required for each new digital banking and lending and leasing platform and Centrix standalone contract, and there is a significant level of integration and configuration for each customer. The Company's revenue for upfront implementation services are billed upfront and recognized over time on a ratable basis over the customer agreement term for its hosted application agreements. Upfront implementation services for on-premises agreements are recognized at commencement date. Under certain circumstances, the Company partners with third-party professional system integrators to support the installation and configuration process for its digital lending and leasing solutions, and therefore, the Company has determined that these services qualify as a separate performance obligation in certain markets and geographies, and the upfront implementation services for these agreements are recognized at commencement date.
Professional services revenues, which primarily consist of training, advisory services, core conversion services, web design, and other general professional services, are generally billed and recognized when delivered.
Certain out-of-pocket expenses billed to customers are recorded as revenues rather than an offset to the related expense. Revenues recorded from out-of-pocket expense reimbursements totaled approximately $1.7 million, $1.5 million and $1.5 million during the years ended December 31, 2018, 2017 and 2016, respectively. The out-of-pocket expenses are reported in cost of revenues.
Significant Judgments
Performance Obligations and Standalone Selling Price
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting in the new revenue standard. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company has contracts with customers that often include multiple performance obligations, usually including multiple subscription and implementation services. For these contracts, the Company accounts for individual performance obligations that are distinct separately by allocating the contract's total transaction price to each performance obligation in an amount based on the relative standalone selling price, or SSP, of each distinct good or service in the contract. In determining whether implementation services are distinct from subscription services, the Company considered various factors including the significant level of integration, interdependency, and interrelation between the implementation and subscription service, as well as the inability of the customer's personnel or other service providers to perform significant portions of the services. The Company has concluded that the implementation services included in contracts with multiple performance obligations in the North American banking market are not distinct and, as a result, the Company defers any arrangement fees for implementation services and recognizes such amounts over time on a ratable basis as one performance obligation with the underlying subscription revenue for the initial agreement term of the hosted application agreements. The Company has concluded that outside the North American banking market, the implementation services for its lending and leasing platform included in contracts with multiple performance obligations are distinct and, as a result, the Company recognizes implementation fees on such arrangements as the related implementation services are performed.
The majority of the Company's revenue recognized at a particular point in time is for professional services and usage revenue. These services are performed within a relatively short period of time and are recognized at the point in time in which the customer obtains control of the asset, which is generally upon completion of the service.
Judgment is required to determine the SSP for each distinct performance obligation. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The primary method used to estimate SSP is the adjusted market assessment approach, which considers its overall pricing objectives, market conditions and other factors, including the value of the Company's contracts, its discounting practices, the size and volume of its transactions, customer characteristics, price lists, go-to-market strategy, historical standalone sales and agreement prices, and the number and types of users within its contracts.
Variable Consideration
The Company recognizes usage revenue related to End Users accessing its products in excess of contracted amounts, bill-pay transactions that End Users initiate on its digital banking platform, and interchange fees that End Users generate using the Company's solutions. Judgment is required to determine the accounting for these types of revenue. The Company considers various factors including the degree to which usage is interdependent or interrelated to past services, costs to the Company per user over the contract, and contractual price per user changes and their relationship to market terms, forecasted data, and the Company's cost to fulfill the obligation. The Company has concluded that its usage revenue relates specifically to the transfer of the service to the customer and is consistent with the allocation objective of Topic 606 when considering all of the performance obligations and payment terms in the contract. Therefore, the Company recognizes usage revenue on a monthly or quarterly basis in accordance with the agreement, as determined and reported. This allocation reflects the amount the Company expects to receive for the services for the given period.
The Company sometimes provides credits or incentives to its customers. Known and estimable credits and incentives represent a form of variable consideration, which are estimated at contract inception and reduce the revenues recognized for a particular contract. These estimates are updated at the end of each reporting period as additional information becomes available. The Company believes that there will not be significant changes to its estimates of variable consideration as of December 31, 2018.
Other Considerations
The Company evaluates whether it is the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis) with respect to the vendor reseller agreements pursuant to which the Company resells certain third-party solutions along with the Company's solutions. Generally, the Company reports revenues from these types of contracts on a gross basis, meaning the amounts billed to customers are recorded as revenues, and expenses incurred are recorded as cost of revenues. Where the Company is the principal, it first obtains control of the inputs to the specific good or service and directs their use to create the combined output. The Company's control is evidenced by its involvement in the integration of the good or service on its platform before it is transferred to its customers and is further supported by the Company being primarily responsible to its customers and having a level of discretion in establishing pricing. Revenues provided from agreements in which the Company is an agent are immaterial.
Cost of Revenues
Cost of revenues is comprised primarily of salaries and other personnel-related costs, including employee benefits, bonuses and stock-based compensation, for employees providing services to the Company's customers. Costs associated with these services include the costs of the Company's implementation, customer support, data center and customer training personnel, as well as costs related to research and development personnel who perform implementation and customer support services. Cost of revenues also includes the direct costs of bill-pay and other third-party intellectual property included in the Company's solutions, the amortization of deferred solution and services costs, co-location facility costs and depreciation of the Company's data center assets, cloud-based hosting services, an allocation of general overhead costs and referral fees. Direct costs of third-party intellectual property include amounts paid for third-party licenses and related maintenance that are incorporated into the Company's software and the amortization of acquired technology from the Company's recent acquisitions, with the costs amortized to cost of revenues over the useful lives of the purchased assets.

The Company capitalizes certain personnel costs directly related to the implementation of its solutions to the extent those costs are considered to be recoverable from future revenues. The Company amortizes the costs for a particular implementation once revenue recognition commences, and the Company amortizes those implementation costs over the expected period of customer benefit, which has been determined to be the estimated life of the technology. Other costs not directly recoverable from future revenues are expensed in the period incurred. 
Software Development Costs
Software development costs include salaries and other personnel-related costs, including employee benefits and bonuses attributed to programmers, software engineers and quality control teams working on the Company's software solutions. The costs related to software development that are incurred between reaching technological feasibility of a solution and the point at which the solution is ready for general release are capitalized and are included in intangible assets, net on the consolidated balance sheet. Capitalized software development costs are computed on an individual product basis, and products available for market are amortized to cost of revenues over the products' estimated economic lives. The Company capitalized software development costs in the amount of zero, $1.0 million and $2.7 million during the years ended December 31, 2018, 2017, and 2016, respectively. The Company recognized $0.8 million and $0.5 million of amortization of capitalized software development costs for the years ended December 31, 2018 and 2017, respectively, as all of the related individual products reached general release during 2017. 
Research and Development Costs
Research and development costs include salaries and other personnel-related costs, including employee benefits, bonuses and stock-based compensation, third-party contractor expenses, software development tools, an allocation of facilities and depreciation expenses and other related expenses incurred in developing new solutions and upgrading and enhancing existing solutions. Research and development costs are expensed as incurred.
Advertising
All advertising costs of the Company are expensed the first time the advertising takes place. Advertising costs were $1.5 million, $0.7 million and $0.3 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Sales Tax
The Company presents sales taxes and other taxes collected from customers and remitted to governmental authorities on a net basis and, as such, excludes them from revenues.
Comprehensive Loss
Comprehensive loss includes net loss as well as other changes in stockholders' equity that result from transactions and economic events other than those with stockholders. Other comprehensive loss consists of net loss, unrealized gains and losses on available-for-sale investments, and foreign currency translation adjustments.
Stock-Based Compensation
Stock options, restricted stock units, and market stock units awarded to employees, directors, executives and consultants are measured at fair value at each grant date. As of January 1, 2017, the Company no longer uses a forfeiture rate to recognize compensation expense as a result of the adoption of ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting." Generally, options vest 25% on the one-year anniversary of the grant date with the balance vesting monthly over the following 36 months, and restricted stock unit awards vest in four annual installments of 25% each. Market stock units are performance-based awards that cliff vest based on the Company's stockholder return relative to the total stockholder return of the Russell 2000 Index, or Index, over a three-year period on the anniversary of the date of grant. Up to one-third of the target shares of the Company's common stock subject to each market stock unit award are eligible to be earned after the first and second years of the performance period and up to 200% of the full target number of shares subject to each market stock unit award are eligible to be earned after the completion of the three-year performance period (less any shares earned for years one and two) based on the average price of the Company's common stock relative to the Index during the performance period.
The Company values stock options using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including the risk-free interest rate, expected life, expected stock price volatility and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of the Company's employee stock options. The expected life represents the period of time the stock options are expected to be outstanding and is based on the simplified method. Under the simplified method, the expected life of an option is presumed to be the mid-point between the vesting date and end of the contractual term. The Company used the simplified method due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options. Due to the Company's limited history as a public company, expected volatility is based on historical volatilities for publicly traded stock of comparable companies over the estimated expected life of the stock options. The Company assumed no dividend yield because it does not expect to pay dividends in the near future, which is consistent with the Company's history of not paying dividends. The Company recognizes compensation expense ratably over the requisite service period of the stock option award.
The Company values restricted stock units at the closing market price on the date of grant, and recognizes compensation expense ratably over the requisite service period of the restricted stock unit award.
The Company estimates the fair value of market stock units on the date of grant using a Monte Carlo simulation model. The determination of fair value of the market stock units is affected by the Company's stock price and a number of assumptions including the expected volatility and the risk-free interest rate. The Company's expected volatility at the date of grant was based on the historical volatilities of its stock and peer firms' stocks and the Index over the performance period. The Company assumed no dividend yield and recognizes compensation expense ratably over the performance period of the market stock unit award. The Company recognizes compensation expense using the graded attribution method on a straight-line basis over the performance period for each market stock unit award.
Convertible Senior Notes
In February 2018, the Company issued $230.0 million principal amount of convertible senior notes due in February 2023, or the Convertible Notes. In accounting for the issuance of the Convertible Notes, the Company separated each of the Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value, as of the date of issuance, of a similar debt without the conversion option. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability components from the total initial proceeds. The difference between the par amount of the Convertible Notes and the carrying amount of the liability component represents debt discounts that are amortized to interest expense over the respective terms of the Convertible Notes using the effective interest rate method. The equity components are not remeasured as long as they continue to meet the conditions for equity classification. In accounting for the issuance costs related to the Convertible Notes, the Company allocated the total amount of issuance costs incurred to liability and equity components based on their relative values. Issuance costs attributable to the liability components are amortized to interest expense over the respective terms of the Convertible Notes using the effective interest rate method. The issuance costs attributable to the equity components were netted against the respective equity components in additional paid-in capital.
Contingent Consideration
On October 15, 2018, the Company's wholly-owned subsidiary, Q2 Software, Inc. acquired all of the outstanding capital stock of Cloud Lending, Inc., a Delaware corporation, or Cloud Lending. Certain former stockholders of Cloud Lending have the right to receive in the aggregate up to an additional $59.5 million earnout payment based upon satisfaction of certain financial milestones. As of December 31, 2018, the estimated fair value of the contingent consideration related to the potential earnout payment utilizing the Monte Carlo simulation method under the the option pricing model was $16.9 million, and this amount is recorded in other long-term liabilities in the consolidated balance sheets. The fair value of this contingent consideration is estimated on a quarterly basis through a collaborative effort by the Company's sales and finance departments. Changes in the fair value of the contingent consideration subsequent to the purchase price finalization will be recorded as acquisition related costs in the consolidated statements of comprehensive loss.
Income Taxes
Deferred income taxes are provided for the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and operating loss carryforwards and credits using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that deferred tax assets will be realized and recognizes a valuation allowance if it is more likely than not that some portion of the deferred tax assets will not be realized. This assessment requires judgment as to the likelihood and amounts of future taxable income by tax jurisdiction. To date, the Company has provided a valuation allowance against its deferred tax assets as it believes the objective and verifiable evidence of its historical pretax net losses outweighs any positive evidence of its forecasted future results. Although the Company believes that its tax estimates are reasonable, the ultimate tax determination involves significant judgment that is subject to audit by tax authorities in the ordinary course of business. Although the Company believes that its tax estimates are reasonable, the ultimate tax determination involves significant judgment that is subject to audit by tax authorities in the ordinary course of business. The Company will continue to monitor the positive and negative evidence, and it will adjust the valuation allowance as sufficient objective positive evidence becomes available. No tax related impact was recorded in the financial statements as a result of the adoption of the new revenue standard.

The Company evaluates its uncertain tax positions based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized. Potential interest and penalties associated with any uncertain tax positions are recorded as a component of income tax expense. Through December 31, 2018, the Company has not identified any material uncertain tax positions for which liabilities would be required to be recorded other than the liabilities related to acquisitions completed during the year.
Basic and Diluted Net Loss per Common Share
The following table sets forth the computations of net loss per share for the periods listed:
 
 
Year ended December 31,
 
 
2018

2017

2016
Numerator:
 
 
 
 
 
 
Net loss
 
$
(35,397
)
 
$
(26,164
)
 
$
(36,354
)
Denominator:
 
 
 
 
 
 
Weighted-average common shares outstanding, basic and diluted
 
42,797

 
41,218

 
39,649

Net loss per common share, basic and diluted
 
$
(0.83
)
 
$
(0.63
)
 
$
(0.92
)

Due to net losses for each of the years ended December 31, 2018, 2017 and 2016, basic and diluted loss per share were the same, as the effect of all potentially dilutive securities would have been anti-dilutive. The following table sets forth the anti-dilutive common share equivalents for the periods listed:
 
 
Year ended December 31,
 
 
2018
 
2017
 
2016
Stock options, restricted stock units, and market stock units
 
4,851

 
5,372

 
5,643


Because the Company has the intention and ability to settle the principal amount of its Convertible Notes in cash, the treasury stock method is expected to be used for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share of common stock when the average market price of common stock for a given period exceeds the conversion price of $57.38 per share for the Convertible Notes. The warrants, or Warrants, issued by the Company in connection with its Convertible Note financing will have a dilutive effect when the average market price of common stock for a given period exceeds the Warrant's strike price of $78.75 per share. 
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU No. 2014-09, which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled to when products are transferred to customers. ASU 2014-09 was modified by subsequently issued ASUs 2015-14, 2016-08, 2016-10, 2016-12 and 2016-20. Topic 606 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. Collectively, the Company refers to ASU 2014-09, as amended, and Subtopic 340-40 as the "new revenue standard." On January 1, 2018, the Company adopted the new revenue standard for all contracts which were not completed as of January 1, 2018, using the modified retrospective method. Adoption of the new revenue standard resulted in changes to the Company's accounting policies for revenue recognition, contract balances, accounts receivable, deferred revenues, deferred implementation costs, and deferred solution and other costs. The Company recognized the cumulative effect of initially applying the new revenue standard as a positive adjustment to the opening balance of accumulated deficit on the consolidated balance sheet in the amount of $15.8 million, which reflects the acceleration of revenues and deferral of incremental commission costs of obtaining subscription contracts. The comparative information in prior periods presented has not been restated and continues to be reported under the accounting standards in effect for those periods.
The most significant impact of adoption of the new revenue standard relates to the accounting for arrangements that include contractual provisions providing for periodic price increases in subscription fee arrangements. Under previous GAAP, the Company accounted for periodic price increases in the period in which they occurred, and under the new revenue standard, the Company recognizes revenue from periodic price increases on a ratable basis over the term of the contract. Additionally, under previous GAAP, for contracts in which customers host and manage the Company's solutions on-premises or in third-party data centers under term license and maintenance agreements, the Company recognized the entire arrangement consideration monthly over the term of the software license as the Company did not have VSOE of fair value for the license and maintenance. Under the new standard, the Company recognizes software license revenue once the customer obtains control of the license, which generally occurs at the commencement of each license term. Under previous GAAP, the Company also deferred only direct and incremental commission costs to obtain a contract and amortized those costs over the term of the related contract. Under the new standard, the Company defers additional incremental costs related to the customer contract and amortizes those costs over the expected period of customer benefit. Also, a portion of the commission payment is now being expensed as incurred.
The cumulative effect of the changes made to the Company's consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard were as follows:
 
 
Balance at December 31, 2017
 
Adjustments due to the new revenue standard
 
Balance at January 1, 2018
Balance sheet
 
 
 
 
 
 
Assets
 
 
 
 
 
 
Contract assets, current portion
 
$

 
$
517

 
$
517

Deferred solution and other costs, current portion
 
9,246

 
64

 
9,310

Deferred solution and other costs, net of current portion
 
12,973

 
265

 
13,238

Deferred implementation costs, net of current portion
 
8,295

 
(93
)
 
8,202

Contract assets, net of current portion
 

 
4,541

 
4,541

 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
Accrued compensation
 
11,511

 
(571
)
 
10,940

Deferred revenues, current portion
 
38,379

 
(1,803
)
 
36,576

Deferred revenues, net of current portion
 
28,289

 
(8,174
)
 
20,115

 
 
 
 
 
 
 
Stockholders' equity
 
 
 
 
 
 
Accumulated deficit
 
$
(152,114
)
 
$
15,842

 
$
(136,272
)
In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company's consolidated statement of comprehensive loss and balance sheet was as follows:
 
 
Year Ended December 31, 2018
 
 
As Reported
 
Balances without new revenue standard
 
Effect of Change Higher/(Lower)
Income statement
 
 
 
 
 
 
Revenues
 
$
241,100

 
$
233,443

 
$
7,657

 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
Cost of revenues
 
121,855

 
122,121

 
(266
)
Sales and marketing
 
48,124

 
49,429

 
(1,305
)
Interest and other income
 
2,811

 
2,676

 
135

 
 
 
 
 
 
 
Net loss
 
$
(35,397
)
 
$
(44,760
)
 
$
9,363

 
 
 
 
 
 
 
Net loss per common share, basic and diluted
 
$
(0.83
)
 
$
(1.05
)
 
$
0.22

 
 
As of December 31, 2018
 
 
As Reported
 
Balances without new revenue standard
 
Effect of Change Higher/(Lower)
Balance sheet
 
 
 
 
 
 
Assets
 
 
 
 
 
 
Contract assets, current portion
 
$
598

 
$

 
$
598

Deferred solution and other costs, current portion
 
10,501

 
10,240

 
261

Deferred implementation costs, current portion
 
4,427

 
4,053

 
374

Deferred solution and other costs, net of current portion
 
16,761

 
15,532

 
1,229

Deferred implementation costs, net of current portion
 
9,948

 
10,188

 
(240
)
Contract assets, net of current portion
 
10,272

 

 
10,272

 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
Accrued compensation
 
12,652

 
13,404

 
(752
)
Deferred revenues, current portion
 
42,531

 
53,608

 
(11,077
)
Deferred revenues, net of current portion
 
23,063

 
23,945

 
(882
)
 
 
 
 
 
 
 
Stockholders' equity
 
 
 
 
 
 
Accumulated deficit
 
$
(172,422
)
 
$
(197,627
)
 
$
25,205


In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842 (Leases)," which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. In July 2018, the FASB also issued ASU 2018-11, "Targeted Improvements," which provides the option to adopt ASU No. 2016-02 retrospectively for each prior period presented or as of the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. These standards are effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early application is permitted. The Company anticipates that the adoption of Topic 842 will impact its consolidated balance sheets as most of its operating lease commitments will be subject to the new standard and recognized as right-of-use assets and corresponding operating lease liabilities upon the adoption of Topic 842, which will increase the total assets and total liabilities that it reports relative to such amounts prior to adoption. The Company intends to adopt the standard using the adoption method outlined in ASU 2018-11, which allows entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company intends to elect the package of practical expedients permitted under the transition guidance within Topic 842, which among other things, will allow the Company to carry forward the historical lease classification and the practical expedient to not separate lease and non-lease components of an agreement. The Company expects the adoption of Topic 842 to result in the recording of additional net lease assets and lease liabilities of approximately $26 million to $28 million and approximately $35 million to $37 million, respectively, as of January 1, 2019. The difference between the additional lease assets and lease liabilities is the reclassification of deferred rent on its consolidated balance sheet at the date of adoption. The Company does not expect the standard to impact the consolidated statements of comprehensive loss or the consolidated statements of cash flows.
In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," to clarify and provide specific guidance on eight cash flow classification issues that are not addressed by current GAAP and thereby reduce the current diversity in practice. The Company adopted ASU 2016-15, effective January 1, 2018, and there was no impact on the consolidated financial statements as a result of the adoption.
In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which provides guidance on the classification of restricted cash in the statement of cash flows. The Company adopted this ASU retrospectively, effective January 1, 2018. As a result, the Company included restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts presented on the consolidated statements of cash flows, resulting in an increase in net cash of $1.8 million, $2.3 million, and $1.3 million for the years ended December 31, 2018, 2017, and 2016, respectively.
In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment," which simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test and requires an entity to write down the carrying value of goodwill up to the amount by which the carrying amount of a reporting unit exceeds its fair value. The standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years and early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.
In May 2017, the FASB issued ASU No. 2017-09, "Compensation - Stock Compensation (Topic 718)," to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of a share-based payment award. The Company adopted ASU 2017-09, effective January 1, 2018, and there was no impact on the consolidated financial statements as a result of the adoption.
In December 2017, the SEC issued Staff Accounting Bulletin, or SAB, 118 to address the application of GAAP in situations in which a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act, or the Tax Act, which was signed into law on December 22, 2017. In March 2018, the FASB issued ASU No. 2018-05, "Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update)," which amended ASC 740 to incorporate the requirements of SAB 118. Disclosures related to the effect of the Tax Act and the Company's utilization of SAB 118 appear in Note 14 - Income Taxes.
In August 2018, the FASB issued ASU No. 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40)," which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 will be effective for the Company beginning in its first quarter of 2020, with early adoption permitted. The ASU may be applied retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is anticipating early adoption of the ASU for January 1, 2019 and is currently evaluating the financial statement impact on the consolidated financial statements as a result of this adoption.
v3.10.0.1
Business Combinations and Asset Acquisitions
12 Months Ended
Dec. 31, 2018
Business Combinations [Abstract]  
Business Combinations and Asset Acquisitions
Business Combinations and Asset Acquisitions
Gro Solutions
On November 30, 2018, the Company's wholly-owned subsidiary, Q2 Software, Inc. acquired all of the outstanding shares of Gro Solutions, or Gro, a privately-owned provider of digital account opening and sales and marketing solutions. The purchase price paid was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill.
Gro was acquired for approximately $25.5 million in cash from existing balances. At closing, the Company deposited into an escrow account $0.4 million of the initial consideration, or Gro Escrow Amount, to compensate for any breach of a representation or warranty or any violation or default of any obligation by the sellers subsequent to the acquisition during an escrow period of 12 or 18 months following the acquisition date depending upon the nature of the breach, violation or default. To the extent not utilized, half of the Gro Escrow Amount less any utilized amounts shall be paid to the former stockholders of Gro at the end of each of the 12 and 18 month escrow periods unless there are any unresolved claims remaining at that time.
The Company accrues for payouts contingent upon continued and future employment of acquired employees and contractors, and the unpaid amounts due to the continuing employees are recorded in accrued compensation in the consolidated balance sheets. The Company recognized $0.1 million under these agreements in compensation expense which is included in acquisition related costs in the consolidated statement of comprehensive loss for the year ended December 31, 2018.
The Company recorded the purchase of Gro using the acquisition method of accounting and accordingly, recognized assets acquired and liabilities assumed at their fair values as of the date of acquisition. The results of Gro's operations are included in the Company's consolidated results of operations beginning with the date of acquisition. Pro forma results of operations related to this acquisition have not been presented since Gro's operating results up to the date of acquisition were not material to the Company's consolidated financial statements. Acquisition related transaction costs of $0.5 million were expensed as incurred during the year ended December 31, 2018, and were recorded within acquisition related expenses in the consolidated statements of comprehensive loss.
The table below summarizes the allocation of the purchase price based on the estimated fair value of the assets acquired and the liabilities assumed. The fair values of assets acquired and liabilities assumed, including valuations of intangible assets, accruals, and income taxes, may change as additional information is received during the measurement period. The measurement period will end no later than one year from the acquisition date.
Assets acquired:
 
 
   Cash
 
$
2,116

   Accounts receivable, net
 
335

   Prepaid expenses and other current assets
 
139

   Property and equipment, net
 
22

   Other long-term assets
 
35

   Intangible assets, net
 
8,275

   Goodwill
 
17,828

Total assets acquired
 
28,750

Liabilities assumed:
 
 
   Accounts payable and accrued liabilities
 
2,058

   Deferred revenues
 
1,200

Total liabilities assumed
 
3,258

Fair value of assets acquired and liabilities assumed
 
$
25,492


The goodwill recognized is attributable primarily to synergies expected from the integration of the acquired product offering into the Company's integrated solutions, the expanded service capabilities that are expected to become available from planned investments in the acquired products, and the value of the assembled work force in accordance with generally accepted accounting principles.
The fair value of the separately identifiable finite-lived intangible assets acquired and estimated useful lives are as follows (in thousands, except years):
 
Estimated Fair Values
 
Estimated Useful Lives
Customer Relationships
$
265

 
3
Trademark
270

 
2
Non-compete agreements
210

 
5
Acquired technology
7,530

 
5
Total acquisition-related intangible assets
$
8,275

 
 

The fair value of the intangible assets was based on the income approach using various methods such as with and without, relief from royalty, and multi-period excess earnings. Intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from two to five years. The acquisition is expected to be treated as a stock acquisition for tax purposes, resulting in no additional amortizable tax basis in acquired intangibles.
Cloud Lending
On October 15, 2018, the Company's wholly-owned subsidiary, Q2 Software, Inc. acquired all of the outstanding capital stock of Cloud Lending Inc., or Cloud Lending, a privately-owned provider of end-to-end digital lending and leasing platform solutions. The purchase price paid was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill.
Cloud Lending was acquired for approximately $107.3 million in cash from existing balances. At closing, the Company deposited into an escrow account $10.5 million of the initial consideration, or CL Escrow Amount, to compensate for any breach of a representation or warranty or any violation or default of any obligation by the sellers subsequent to the acquisition during a period of 18 months following the acquisition date. To the extent not utilized, the CL Escrow Amount shall be paid to the former stockholders of Cloud Lending at the end of the 18 month period unless there are any unresolved claims remaining at that time. The total purchase price is as follows:
 
 
Purchase Consideration
Cash purchase price
 
$
107,293

Estimated working capital and other adjustments
 
970

   Fair value contingent consideration
 
16,862

Total purchase price
 
$
125,125



Certain former stockholders of Cloud Lending also have the right to receive in the aggregate up to an additional $59.5 million earnout payment based upon satisfaction of certain financial milestones. As of December 31, 2018, the estimated fair value of the contingent consideration related to the potential earnout payment was $16.9 million.
The Company accrues for payouts contingent upon continued and future employment of acquired employees and contractors, and the unpaid amounts due to the continuing employees are recorded in accrued compensation in the consolidated balance sheets. The Company recognized $0.3 million under these agreements in compensation expense which is included in acquisition related costs in the consolidated statement of comprehensive loss for the year ended December 31, 2018.
The Company recorded the purchase of Cloud Lending using the acquisition method of accounting and accordingly, recognized assets acquired and liabilities assumed at their fair values as of the date of acquisition. The results of Cloud Lending's operations are included in the Company's consolidated statements of comprehensive loss from the date of acquisition. Acquisition related transaction costs of $2.6 million were expensed as incurred during the year ended December 31, 2018, and were recorded within acquisition related expenses in the consolidated statements of comprehensive loss.
The table below summarizes the allocation of the purchase price based on the estimated fair value of the assets acquired and the liabilities assumed. The fair values of assets acquired and liabilities assumed, including valuations of intangible assets, accruals, and income taxes, may change as additional information is received during the measurement period. The measurement period will end no later than one year from the acquisition date.
Assets acquired:
 
 
   Cash
 
$
796

   Accounts receivable, net
 
1,311

   Prepaid expenses and other current assets
 
4,704

   Property and equipment, net
 
101

   Other long-term assets
 
167

   Intangible assets, net
 
50,100

   Goodwill
 
77,203

Total assets acquired
 
134,382

Liabilities assumed:
 
 
   Accounts payable, accrued liabilities, and accrued compensation
 
6,007

     Deferred revenues
 
3,250

Total liabilities assumed
 
9,257

Fair value of assets acquired and liabilities assumed
 
$
125,125


The goodwill recognized is attributable primarily to synergies expected from the integration of the acquired product offering into the Company's integrated solutions including an increasing customer base, the expanded service capabilities that are expected to become available from planned investments in the acquired products, and the value of the assembled work force in accordance with generally accepted accounting principles.
The fair value of the separately identifiable finite-lived intangible assets acquired and estimated useful lives are as follows (in thousands, except years):
 
Estimated Fair Values
 
Estimated Useful Lives
Customer Relationships
$
7,245

 
5
Trademark
9,525

 
10
Non-compete agreements
970

 
5
Acquired technology
32,360

 
7
Total acquisition-related intangible assets
$
50,100

 
 

The fair value of the intangible assets was based on the income approach using various methods such as with and without, relief from royalty, and multi-period excess earnings. Intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from five to ten years. The acquisition is expected to be treated as a stock acquisition for tax purposes, resulting in no additional amortizable tax basis in acquired intangibles.
The pro forma statements of operations data for years ended December 31, 2018 and December 31, 2017, shown in the table below, give effect to the Cloud Lending acquisition, described above, as if it had occurred at January 1, 2017. These amounts have been calculated after applying the Company's accounting policies and adjusting the results of Cloud Lending to reflect the additional intangible amortization, stock compensation, debt payoff and related items, and the adjustments to acquired deferred revenue that would have occurred assuming the fair value adjustments had been applied and incurred since January 1, 2017. This pro forma data is presented for informational purposes only and does not purport to be indicative of the Company's future results of operations. The table below shows the pro forma statements of operations data for the respective years ending December 31:
 
 
(Unaudited)
 
 
Year ended December 31,
 
 
2018
 
2017
Total Revenues
 
$
252,541

 
$
199,220

Net loss
 
(49,033
)
 
(43,069
)

Asset Acquisition and Other Business Combinations
In January 2017, the Company acquired the outstanding shares of a privately-owned company. In accordance with ASU 2017-01, the Company determined the set of assets acquired was not a business as substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset, and the transaction was accounted for as an asset purchase. The Company acquired the assets for $1.5 million in cash from existing balances which included a hold-back of $0.2 million, which was paid in the first quarter of 2018. Consideration was allocated on a relative fair value basis and resulted in $1.5 million in intangible assets including acquired technology and assembled workforce. Intangible assets are amortized on a straight-line basis over their estimated useful lives of three years. The acquired intangible assets are not amortizable for income tax purposes, which will result in an increase to deferred tax liabilities and a decrease of valuation allowance of $0.3 million.

During 2015, the Company acquired all of the outstanding shares of Centrix Solutions, Inc., or Centrix, a privately-owned company that provides financial institutions with products that detect fraud, manage risk and simplify compliance and acquired all of the outstanding ownership interests of Smarty Pig, LLC, doing business as Social Money, or Social Money, a privately-owned financial services software company that offers a modern, cloud-based platform that assists financial institutions in their direct digital strategies. During 2017 and 2018, the Company paid out $7.2 million and $1.0 million, respectively, to the former Centrix shareholders based upon the achievement of certain milestone-based objectives and continued employment. During 2017, the Company paid out $0.2 million in retention bonuses to certain of the Social Money employees based upon their continued employment with the Company and also released the entire $2.5 million hold-back to the former owners of Social Money upon the expiration of the hold-back period. The Company has recognized $0.6 million and $1.1 million under these agreements in compensation expense included in acquisition related costs in the consolidated statement of comprehensive loss for the years ended December 31, 2018 and 2017, respectively.
v3.10.0.1
Fair Value Measurements
12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
The carrying values of the Company's financial instruments, principally cash equivalents, investments, accounts receivable, restricted cash and accounts payable, approximated their fair values due to the short period of time to maturity or repayment.
Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The current accounting guidance for fair value measurements defines a three-level valuation hierarchy for disclosures as follows:
Level I—Unadjusted quoted prices in active markets for identical assets or liabilities;
Level II—Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and
Level III—Unobservable inputs that are supported by little or no market activity, which requires the Company to develop its own assumptions.
The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The following table details the fair value hierarchy of the Company's financial assets measured at fair value on a recurring basis as of December 31, 2018:
 
 
 
 
Fair Value Measurements Using:
Description
 
Fair Value
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
 
Cash Equivalents:
 
 
 
 
 
 
 
 
Money market funds
 
$
54,559

 
$
54,559

 
$

 
$

 
 
 
 
 
 
 
 
 
Investments:
 
Fair Value
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
U.S. government agency bonds
 
$
22,293

 
$

 
$
22,293

 
$

Corporate bonds and commercial paper
 
44,734

 

 
44,734

 

Certificates of deposit
 
1,952

 

 
1,952

 

 
 
$
68,979

 
$

 
$
68,979

 
$

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Other long-term liabilities:
 
Fair Value
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Contingent consideration
 
$
16,862

 
$

 
$

 
$
16,862


The following table details the fair value hierarchy of the Company's financial assets measured at fair value on a recurring basis as of December 31, 2017:
 
 
 
 
Fair Value Measurements Using:
Description
 
Fair Value
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
 
Cash Equivalents:
 
 
 
 
 
 
 
 
Money market funds
 
$
9,279

 
$
9,279

 
$

 
$

 
 
 
 
 
 
 
 
 
Investments:
 
Fair Value
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
U.S. government agency bonds
 
$
16,194

 
$

 
$
16,194

 
$

Corporate bonds and commercial paper
 
15,815

 

 
15,815

 

Certificates of deposit
 
9,676

 

 
9,676

 

 
 
$
41,685

 
$

 
$
41,685

 
$


The Company determines the fair value of its investment holdings based on pricing from its pricing vendors. The valuation techniques used to measure the fair value of financial instruments having Level 2 inputs were derived from non-binding consensus prices that are corroborated by observable market data or quoted market prices for similar instruments. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs).
The Company added contingent consideration on October 15, 2018 with the acquisition of Cloud Lending, and there were no changes to the fair value during 2018. The Company's contingent consideration is valued using a Monte Carlo simulation model. The assumptions used in preparing the Monte Carlo simulation model include estimates for revenue growth rates, revenue volatility, revenue recognition periods, risk-free rates, and discount rates.
v3.10.0.1
Cash, Cash Equivalents and Investments
12 Months Ended
Dec. 31, 2018
Cash and Cash Equivalents [Abstract]  
Cash, Cash Equivalents and Investments
Cash, Cash Equivalents and Investments
The Company's cash, cash equivalents and investments as of December 31, 2018 and 2017 consisted primarily of cash, U.S. government agency bonds, corporate bonds, commercial paper, certificates of deposit and money market funds.
The Company classifies investments as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All investments are recorded at estimated fair value. Unrealized gains and losses on available-for-sale investments are included in accumulated other comprehensive loss, a component of stockholders' equity. The Company evaluates its investments to assess whether those with unrealized loss positions are other than temporarily impaired. The Company considers impairments to be other than temporary if they are related to deterioration in credit risk or if it is likely the Company will sell the investments before the recovery of their cost basis. Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net, in the consolidated statements of comprehensive loss. Interest, amortization of premiums and accretion of discount on all investments classified as available-for-sale are also included as a component of other income (expense), net, in the consolidated statements of comprehensive loss.
As of December 31, 2018 and 2017, the Company's cash was $53.8 million and $48.7 million, respectively.
A summary of the cash equivalents and investments as of December 31, 2018 is as follows:
Cash Equivalents:
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
Money market funds
 
$
54,559

 
$

 
$

 
$
54,559

Investments:
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
U.S. government agency bonds
 
$
22,330

 
$

 
$
(37
)
 
$
22,293

Corporate bonds and commercial paper
 
44,812

 

 
(78
)
 
44,734

Certificates of deposit
 
1,952

 

 

 
1,952

 
 
$
69,094

 
$

 
$
(115
)
 
$
68,979

A summary of the cash equivalents and investments as of December 31, 2017 is as follows:
Cash Equivalents:
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
Money market funds
 
$
9,279

 
$

 
$

 
$
9,279

Investments:
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
U.S. government agency bonds
 
$
16,277

 
$

 
$
(83
)
 
$
16,194

Corporate bonds and commercial paper
 
15,871

 

 
(56
)
 
15,815

Certificates of deposit
 
9,676

 

 

 
9,676

 
 
$
41,824

 
$

 
$
(139
)
 
$
41,685


The Company may sell its investments at any time, without significant penalty, for use in current operations or for other purposes, even if they have not yet reached maturity. As a result, the Company classifies its investments, including investments with maturities beyond twelve months, as current assets in the accompanying consolidated balance sheets.
The following table summarizes the estimated fair value of the Company's investments, designated as available-for-sale and classified by the contractual maturity date of the investments as of the dates shown:
 
 
December 31,
 
 
2018
 
2017
Due within one year or less
 
$
61,514

 
$
27,324

Due after one year through five years
 
7,465

 
14,361

 
 
$
68,979

 
$
41,685


The Company has certain available-for-sale investments in a gross unrealized loss position, all of which have been in such position for less than twelve months. The Company reviews its debt securities classified as short-term investments on a regular basis to evaluate whether or not any security has experienced an other than temporary decline in fair value. The Company considers factors such as the length of time and extent to which the market value has been less than the cost, the financial position and near-term prospects of the issuer and its intent to sell, or whether it is more likely than not the Company will be required to sell the investment before recovery of the investment's amortized-cost basis. If the Company determines that an other than temporary decline exists in one of these investments, the respective investment would be written down to fair value. For debt securities, the portion of the write-down related to credit loss would be recognized in other income, net in the consolidated statements of comprehensive loss. Any portion not related to credit loss would be included in accumulated other comprehensive loss. Because the Company does not intend to sell any investments which have an unrealized loss position at this time, and it is not more likely than not that the Company will be required to sell the investment before recovery of its amortized cost basis, which may be maturity, the Company does not consider the investments with unrealized loss positions to be other than temporarily impaired as of December 31, 2018.
The following table shows the fair values and the gross unrealized losses of these available-for-sale investments aggregated by investment category as of December 31, 2018:
 
 
Adjusted Cost
 
Gross Unrealized Loss
 
Fair Value
U.S. government agency bonds
 
$
22,330

 
$
(37
)
 
$
22,293

Corporate bonds and commercial paper
 
44,812

 
(78
)
 
44,734

 
 
$
67,142

 
$
(115
)
 
$
67,027


The following table shows the fair values and the gross unrealized losses of these available-for-sale investments aggregated by investment category as of December 31, 2017:
 
 
Adjusted Cost
 
Gross Unrealized Loss
 
Fair Value
U.S. government agency bonds
 
$
16,277

 
$
(83
)
 
$
16,194

Corporate bonds and commercial paper
 
15,871

 
(56
)
 
15,815

 
 
$
32,148

 
$
(139
)
 
$
32,009

v3.10.0.1
Deferred Solution and Other Costs
12 Months Ended
Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Deferred Solution and Other Costs
Deferred Solution and Other Costs
Deferred solution and other costs, current portion and net of current portion, consisted of the following:
 
 
December 31,
 
 
2018
 
2017
Deferred solution costs
 
$
7,142

 
$
6,505

Deferred commissions
 
3,359

 
2,741

Deferred solution and other costs, current portion
 
$
10,501

 
$
9,246

Deferred solution costs
 
$
6,625

 
$
5,291

Deferred commissions
 
10,136

 
7,682

Deferred solution and other costs, net of current portion
 
$
16,761

 
$
12,973

v3.10.0.1
Property and Equipment
12 Months Ended
Dec. 31, 2018
Property, Plant and Equipment [Abstract]  
Property and Equipment
Property and Equipment
Property and equipment consisted of the following:
 
 
December 31,
 
 
2018
 
2017
Computer hardware and equipment
 
$
37,825

 
$
30,734

Purchased software and licenses
 
9,687

 
8,788

Furniture and fixtures
 
5,934

 
5,387

Leasehold improvements
 
13,054

 
13,470

 
 
66,500

 
58,379

Accumulated depreciation
 
(31,506
)
 
(23,835
)
Property and equipment, net
 
$
34,994

 
$
34,544


Depreciation expense was $9.7 million, $9.2 million and $7.3 million for the years ended December 31, 2018, 2017 and 2016, respectively.
v3.10.0.1
Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
Goodwill and Intangible Assets
The carrying amount of goodwill was $107.9 million and $12.9 million at December 31, 2018 and 2017, respectively. During the fourth quarter of 2018, the Company added $77.2 million of goodwill for the Cloud Lending acquisition and $17.8 million for the Gro acquisition. Goodwill represents the excess purchase price over the fair value of assets acquired. During 2015, the Company completed the acquisitions of Centrix and Social Money. The Company has one operating segment and one reporting unit. Goodwill is tested for impairment on an annual basis, and between annual tests if indicators of potential impairment exist, using a fair-value-based approach based on the market capitalization of the reporting unit. The annual impairment test was performed as of October 31, 2018. No impairment of goodwill was identified during 2018, nor has any impairment of goodwill been recorded to date.
Intangible assets at December 31, 2018 and 2017 were as follows:
 
 
As of December 31, 2018
 
As of December 31, 2017
 
 
Gross Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Amount
 
Accumulated Amortization
 
Net Carrying Amount
Customer relationships
 
$
10,640

 
$
(2,148
)
 
$
8,492

 
$
3,130

 
$
(1,294
)
 
$
1,836

Non-compete agreements
 
2,064

 
(668
)
 
1,396

 
884

 
(451
)
 
433

Trademarks
 
11,935

 
(2,350
)
 
9,585

 
2,140

 
(1,724
)
 
416

Acquired technology
 
53,183

 
(12,030
)
 
41,153

 
13,293

 
(7,464
)
 
5,829

Assembled workforce
 
79

 
(51
)
 
28

 
121

 
(38
)
 
83

Capitalized software development costs
 
3,975

 
(1,333
)
 
2,642

 
3,975

 
(538
)
 
3,437

 
 
$
81,876

 
$
(18,580
)
 
$
63,296

 
$
23,543

 
$
(11,509
)
 
$
12,034


The estimated useful lives and weighted average amortization periods for intangible assets at December 31, 2018 are as follows (in years):
 
 
Estimated Useful Life
 
Weighted Average Amortization Period
Customer relationships
 
3 - 6
 
4.5
Non-compete agreements
 
2 - 5
 
4.3
Trademarks
 
2 - 10
 
9.8
Acquired technology
 
3 - 7
 
6.3
Assembled workforce
 
3
 
1.0
Capitalized software development costs
 
5
 
3.4
Total
 
 
 
6.4

The Company recorded intangible assets from the business combinations and asset acquisition discussed in Note 3, Business Combinations and Asset Acquisitions. Intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from two to ten years. Amortization expense included in cost of revenues in the consolidated statement of comprehensive loss was $4.5 million and $3.6 million for the years ended December 31, 2018 and 2017, respectively, and amortization expense included in operating expenses in the consolidated statement of comprehensive loss was $1.8 million and $1.5 million for the years ended December 31, 2018 and 2017, respectively.
Gross capitalized software development costs were $4.0 million as of December 31, 2018 and 2017. During the year ended 2017, all of the products related to capitalized software development costs reached general release, and the Company commenced amortization of these costs. The Company amortized $0.8 million and $0.5 million for the years ended December 31, 2018 and 2017, respectively. Capitalized software development costs are computed on an individual product basis and those products available for market are amortized to cost of revenues over the products' estimated economic lives, which are expected to be five years.
The estimated future amortization expense related to intangible assets as of December 31, 2018 was as follows:
 
 
Amortization
Year Ended December 31,
 
 
2019
 
$
12,159

2020
 
11,053

2021
 
9,919

2022
 
9,023

2023
 
8,295

Thereafter
 
12,847

Total amortization
 
$
63,296

v3.10.0.1
Accrued Liabilities
12 Months Ended
Dec. 31, 2018
Payables and Accruals [Abstract]  
Accrued Liabilities
Accrued Liabilities
Accrued liabilities consisted of the following:
 
 
December 31,
 
 
2018
 
2017
Accrued data center equipment and software purchases
 
$
81

 
$
4,410

Accrued transaction processing fees
 
2,911

 
1,687

Accrued professional services
 
1,382

 
1,419

Deferred rent
 
1,260

 
1,197

Other
 
3,695

 
1,849

 
 
$
9,329

 
$
10,562

v3.10.0.1
Debt
12 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Debt
Debt
In April 2013, the Company entered into a secured credit facility agreement, or Credit Facility, with Wells Fargo Bank, National Association, or Wells Fargo, which the Company and Wells Fargo subsequently amended several times, most recently on March 31, 2016, to modify the Credit Facility to allow for the acquisition of Social Money. The Credit Facility, as amended, provided for a line of credit of up to $25.0 million, with an accordion feature, or Accordion Feature, allowing the Company to increase its maximum borrowings by up to an additional $25.0 million, subject to certain conditions and limitations, including that borrowings at any time would be limited to 75% of the Company's trailing twelve-month recurring revenues. Access to the total borrowings available under the Credit Facility was restricted based on covenants related to the Company's minimum liquidity and adjusted EBITDA. Amounts borrowed under the Credit Facility accrued interest, at the Company's election at either: (i) the per annum rate equal to the LIBOR rate plus an applicable margin; or (ii) the then current base rate plus the greater of the U.S. Federal Funds rate plus one percentage point, the one-month LIBOR plus one percentage point, or the lending financial institution's prime rate. The Company paid a monthly fee based on the total unused borrowings balance, an annual administrative fee and the initial closing fee, which was paid in three equal annual installments over the first three years of the Credit Facility. The Accordion Feature expired in October 2016, at which time maximum borrowings under the Facility were reduced to $25.0 million.

On April 11, 2017, the Credit Facility expired pursuant to its original terms. Upon the expiration of the Credit Facility, the Company paid off the outstanding balance, which was less than $0.1 million, and the secured letter of credit which had been issued against the facility for the security deposit for its corporate headquarters is now secured by a $0.5 million restricted deposit with Wells Fargo.
Convertible Senior Notes
The Company issued $230 million principal amount of convertible senior notes in February 2018. The interest rates for the Convertible Notes are fixed at 0.75% per annum with interest payable semi-annually on February 15 and August 15 of each year, commencing on August 15, 2018. The Convertible Notes mature on February 15, 2023, unless earlier converted or repurchased in accordance with their terms prior to such date.
Each $1,000 of principal of the Convertible Notes will initially be convertible into 17.4292 shares of the Company's common stock, which is equivalent to an initial conversion price of approximately $57.38 per share. The initial conversion price for each of the Convertible Notes is subject to adjustment upon the occurrence of certain specified events.
The Convertible Notes are the Company's senior unsecured obligations and will rank senior in right of payment to any of the Company's indebtedness that is expressly subordinated in right of payment to the Convertible Notes, will rank equally in right of payment with any of the Company's indebtedness that is not so subordinated, are effectively junior in right of payment to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally junior to all indebtedness and other liabilities (including trade payables) of the Company's current or future subsidiaries.
On or after November 15, 2022, holders may convert all or any portion of their Convertible Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the succeeding conditions described herein. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election, as described in the indenture governing the Convertible Notes.
Holders may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding November 15, 2022 only under the following circumstances:
during any calendar quarter commencing after the calendar quarter ending on June 30, 2018 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
during the five consecutive business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; or
upon the occurrence of specified corporate events.
If a fundamental change (as defined in the relevant indenture governing the Convertible Notes) occurs prior to the maturity date, holders of each of the Convertible Notes may require the Company to repurchase all or a portion of their notes for cash at a repurchase price equal to 100% of the principal amount of the Convertible Notes, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of December 31, 2018, the Convertible Notes were not yet convertible.
In accordance with accounting guidance for cash conversion features, the Company valued the liability component at the estimated fair value, as of the date of issuance, of a similar debt without the conversion option. The effective interest rate for the liability component was 5.875%. The liability component of the Convertible Notes is recorded in long-term debt, and the interest payable within the next twelve months is recorded in accrued liabilities on the consolidated balance sheets as of December 31, 2018. The Company recorded the difference between the initial proceeds of the convertible debt and the fair value of the conversion feature, and the difference was allocated to additional paid-in capital on the consolidated balance sheet as the carrying amount of the equity component.
In accounting for the transaction costs for the Convertible Notes issuance, the Company allocated the costs incurred to the liability and equity components in proportion to the allocation of the proceeds from issuance to the liability and equity components. Issuance costs attributable to the liability component, totaling $5.3 million for the Convertible Notes are being amortized to expense over the expected life the Convertible Notes using the effective interest method. Issuance costs attributable to the equity component related to the conversion option, totaling $1.5 million for the Convertible Notes were netted with the equity component.
The Convertible Notes consist of the following:
 
 
As of December 31, 2018
Liability component:
 
 
Principal
 
$
230,000

Unamortized debt discount
 
(42,790
)
Unamortized debt issuance costs
 
(4,487
)
Net carrying amount
 
182,723

 
 
 
Equity component 
 
 
Net allocation of proceeds
 
31,116

Net issuance costs
 
(1,517
)
Net carrying amount
 
$
29,599


The following table sets forth total interest expense recognized related to the Convertible Notes:
 
 
As of December 31, 2018
Contractual interest expense
 
$
1,482

Amortization of debt issuance costs
 
829

Amortization of debt discount
 
7,646

Total
 
$
9,957


As of December 31, 2018, the remaining period over which the debt discount and debt issuance costs will be amortized was 4.2 years.
Bond Hedges and Warrants Transactions
Concurrent with the offering of the Convertible Notes, the Company entered into separate convertible bond hedges, or Bond Hedges, and Warrants transactions. The Bond Hedges are generally expected to reduce potential dilution to the Company's common stock upon conversion of the Convertible Notes. The Bond Hedges are call options that give the Company the option to purchase, subject to anti-dilution adjustments substantially identical to those in the Convertible Notes, approximately 0.9 million shares of its common stock for $57.38 per share, exercisable upon conversion of the Convertible Notes and expires in February 2023. The total cost of the Bond Hedges transactions was $41.7 million.
Under the Warrants, the Company issued warrants to acquire, subject to anti-dilution adjustments, up to approximately 4.0 million shares over 80 scheduled trading days beginning on May 15, 2023 at an exercise price of $78.75 per share. If the Warrants are not exercised on their exercise dates, they will expire. Pursuant to the Warrants, if the average market value per share of the Company's common stock for the reporting period, as measured under the Warrants, exceeds the exercise price of the Warrants of $78.75, the Warrants will have a dilutive effect on the Company's earnings per share, assuming the Company is profitable. The Company received $22.4 million in cash proceeds from the sale of the Warrants.
The Bond Hedges and the Warrants are separate transactions, in each case, entered into by the Company with counterparties, and are not part of the terms of the Convertible Notes and will not affect any holders' rights under the Convertible Notes. The holders of the Convertible Notes will not have any rights with respect to the Bond Hedges or Warrants transactions. The Bond Hedges and Warrants do not meet the criteria for derivative accounting as they are indexed to the Company's stock. The amounts paid for the Bond Hedges and the proceeds received from the sale of the Warrants have been included as a net reduction to additional paid-in capital.
v3.10.0.1
Commitments and Contingencies
12 Months Ended
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Commitments and Contingencies
Operating Lease Commitments
The Company leases office space under non-cancellable operating leases for its corporate headquarters in Austin, Texas in two adjacent buildings under separate lease agreements. Pursuant to the first of which the Company leases approximately 67 square feet of office space with an initial term that expires on April 30, 2021, with the option to extend the lease for an additional five-year term, and pursuant to the second of which the Company leases approximately 129 square feet of office space with an initial term that expires on April 30, 2028, with the option to extend the lease for an additional ten-year term. The Company also leases office space in south Austin, Texas; Lincoln, Nebraska; Des Moines, Iowa; Atlanta, Georgia; Asheville, North Carolina; San Mateo, California; Bangalore, India; Sydney Australia; London, United Kingdom; and Amsterdam, Netherlands. In the second quarter of 2018, the Company vacated a portion of its south Austin office and recorded an unoccupied lease charge of $0.7 million for the remaining contractual lease payments, associated asset disposal, and related fees, less estimated sublease income. The remaining associated lease liability of $0.2 million is recorded in other long-term liabilities, on the accompanying consolidated balance sheet at December 31, 2018. The Company believes its current facilities will be adequate for its needs for the current term and will evaluate its need for expansion beyond the 2021 lease expiration. Rent expense under operating leases was $4.4 million, $4.4 million and $3.7 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Future minimum payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows:
 
 
Operating Leases
Year Ended December 31,
 
 
2019
 
$
7,230

2020
 
6,507

2021
 
5,184

2022
 
4,702

2023
 
4,437

Thereafter
 
16,721

Total minimum lease payments
 
$
44,781


Contractual Commitments
The Company has non-cancelable contractual commitments related to the Convertible Notes and related interest, third-party products, co-location fees and other product costs. The Company is party to several purchase commitments for third-party products that contain both a contractual minimum obligation and a variable obligation based upon usage or other factors which can change on a monthly basis. The interest on the Convertible Notes is payable semi-annually on February 15 and August 15 of each year. The estimated amounts for usage and other factors are not included within the table below. Future minimum contractual commitments that have initial or remaining non-cancelable terms in excess of one year were as follows:
 
 
Contractual Commitments
Year Ended December 31,
 
 
2019
 
$
16,927

2020
 
13,713

2021
 
12,173

2022
 
12,136

2023 and thereafter
 
239,325

Total commitments
 
$
294,274


Legal Proceedings
From time to time, the Company may become involved in legal proceedings arising in the ordinary course of its business. The Company is not presently a party to any legal proceedings that, if determined adversely to the Company, would have a material adverse effect on the Company.
v3.10.0.1
Convertible Senior Notes
12 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Convertible Senior Notes
Debt
In April 2013, the Company entered into a secured credit facility agreement, or Credit Facility, with Wells Fargo Bank, National Association, or Wells Fargo, which the Company and Wells Fargo subsequently amended several times, most recently on March 31, 2016, to modify the Credit Facility to allow for the acquisition of Social Money. The Credit Facility, as amended, provided for a line of credit of up to $25.0 million, with an accordion feature, or Accordion Feature, allowing the Company to increase its maximum borrowings by up to an additional $25.0 million, subject to certain conditions and limitations, including that borrowings at any time would be limited to 75% of the Company's trailing twelve-month recurring revenues. Access to the total borrowings available under the Credit Facility was restricted based on covenants related to the Company's minimum liquidity and adjusted EBITDA. Amounts borrowed under the Credit Facility accrued interest, at the Company's election at either: (i) the per annum rate equal to the LIBOR rate plus an applicable margin; or (ii) the then current base rate plus the greater of the U.S. Federal Funds rate plus one percentage point, the one-month LIBOR plus one percentage point, or the lending financial institution's prime rate. The Company paid a monthly fee based on the total unused borrowings balance, an annual administrative fee and the initial closing fee, which was paid in three equal annual installments over the first three years of the Credit Facility. The Accordion Feature expired in October 2016, at which time maximum borrowings under the Facility were reduced to $25.0 million.

On April 11, 2017, the Credit Facility expired pursuant to its original terms. Upon the expiration of the Credit Facility, the Company paid off the outstanding balance, which was less than $0.1 million, and the secured letter of credit which had been issued against the facility for the security deposit for its corporate headquarters is now secured by a $0.5 million restricted deposit with Wells Fargo.
Convertible Senior Notes
The Company issued $230 million principal amount of convertible senior notes in February 2018. The interest rates for the Convertible Notes are fixed at 0.75% per annum with interest payable semi-annually on February 15 and August 15 of each year, commencing on August 15, 2018. The Convertible Notes mature on February 15, 2023, unless earlier converted or repurchased in accordance with their terms prior to such date.
Each $1,000 of principal of the Convertible Notes will initially be convertible into 17.4292 shares of the Company's common stock, which is equivalent to an initial conversion price of approximately $57.38 per share. The initial conversion price for each of the Convertible Notes is subject to adjustment upon the occurrence of certain specified events.
The Convertible Notes are the Company's senior unsecured obligations and will rank senior in right of payment to any of the Company's indebtedness that is expressly subordinated in right of payment to the Convertible Notes, will rank equally in right of payment with any of the Company's indebtedness that is not so subordinated, are effectively junior in right of payment to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally junior to all indebtedness and other liabilities (including trade payables) of the Company's current or future subsidiaries.
On or after November 15, 2022, holders may convert all or any portion of their Convertible Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the succeeding conditions described herein. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election, as described in the indenture governing the Convertible Notes.
Holders may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding November 15, 2022 only under the following circumstances:
during any calendar quarter commencing after the calendar quarter ending on June 30, 2018 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
during the five consecutive business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; or
upon the occurrence of specified corporate events.
If a fundamental change (as defined in the relevant indenture governing the Convertible Notes) occurs prior to the maturity date, holders of each of the Convertible Notes may require the Company to repurchase all or a portion of their notes for cash at a repurchase price equal to 100% of the principal amount of the Convertible Notes, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of December 31, 2018, the Convertible Notes were not yet convertible.
In accordance with accounting guidance for cash conversion features, the Company valued the liability component at the estimated fair value, as of the date of issuance, of a similar debt without the conversion option. The effective interest rate for the liability component was 5.875%. The liability component of the Convertible Notes is recorded in long-term debt, and the interest payable within the next twelve months is recorded in accrued liabilities on the consolidated balance sheets as of December 31, 2018. The Company recorded the difference between the initial proceeds of the convertible debt and the fair value of the conversion feature, and the difference was allocated to additional paid-in capital on the consolidated balance sheet as the carrying amount of the equity component.
In accounting for the transaction costs for the Convertible Notes issuance, the Company allocated the costs incurred to the liability and equity components in proportion to the allocation of the proceeds from issuance to the liability and equity components. Issuance costs attributable to the liability component, totaling $5.3 million for the Convertible Notes are being amortized to expense over the expected life the Convertible Notes using the effective interest method. Issuance costs attributable to the equity component related to the conversion option, totaling $1.5 million for the Convertible Notes were netted with the equity component.
The Convertible Notes consist of the following:
 
 
As of December 31, 2018
Liability component:
 
 
Principal
 
$
230,000

Unamortized debt discount
 
(42,790
)
Unamortized debt issuance costs
 
(4,487
)
Net carrying amount
 
182,723

 
 
 
Equity component 
 
 
Net allocation of proceeds
 
31,116

Net issuance costs
 
(1,517
)
Net carrying amount
 
$
29,599


The following table sets forth total interest expense recognized related to the Convertible Notes:
 
 
As of December 31, 2018
Contractual interest expense
 
$
1,482

Amortization of debt issuance costs
 
829

Amortization of debt discount
 
7,646

Total
 
$
9,957


As of December 31, 2018, the remaining period over which the debt discount and debt issuance costs will be amortized was 4.2 years.
Bond Hedges and Warrants Transactions
Concurrent with the offering of the Convertible Notes, the Company entered into separate convertible bond hedges, or Bond Hedges, and Warrants transactions. The Bond Hedges are generally expected to reduce potential dilution to the Company's common stock upon conversion of the Convertible Notes. The Bond Hedges are call options that give the Company the option to purchase, subject to anti-dilution adjustments substantially identical to those in the Convertible Notes, approximately 0.9 million shares of its common stock for $57.38 per share, exercisable upon conversion of the Convertible Notes and expires in February 2023. The total cost of the Bond Hedges transactions was $41.7 million.
Under the Warrants, the Company issued warrants to acquire, subject to anti-dilution adjustments, up to approximately 4.0 million shares over 80 scheduled trading days beginning on May 15, 2023 at an exercise price of $78.75 per share. If the Warrants are not exercised on their exercise dates, they will expire. Pursuant to the Warrants, if the average market value per share of the Company's common stock for the reporting period, as measured under the Warrants, exceeds the exercise price of the Warrants of $78.75, the Warrants will have a dilutive effect on the Company's earnings per share, assuming the Company is profitable. The Company received $22.4 million in cash proceeds from the sale of the Warrants.
The Bond Hedges and the Warrants are separate transactions, in each case, entered into by the Company with counterparties, and are not part of the terms of the Convertible Notes and will not affect any holders' rights under the Convertible Notes. The holders of the Convertible Notes will not have any rights with respect to the Bond Hedges or Warrants transactions. The Bond Hedges and Warrants do not meet the criteria for derivative accounting as they are indexed to the Company's stock. The amounts paid for the Bond Hedges and the proceeds received from the sale of the Warrants have been included as a net reduction to additional paid-in capital.
v3.10.0.1
Stock-Based Compensation
12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
Stock-Based Compensation
In March 2014, the Company's board of directors approved the 2014 Equity Incentive Plan, or 2014 Plan, under which stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and units and other cash-based or stock-based awards may be granted to employees, consultants and directors. Shares of common stock that are issued and available for issuance under the 2014 Plan consist of authorized, but unissued or reacquired shares of common stock or any combination thereof.
As of December 31, 2017, a total of 7,297 shares had been reserved for issuance under the 2014 Plan. The 2014 Plan contains a provision that automatically increases the shares available for issuance under the plan on January 1 of each year subsequent to the 2014 Plan's adoption through 2024, by an amount equal to the smaller of (a) 4.5% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the Company's board of directors. On January 1, 2018, 1,889 shares were added to the 2014 Plan in accordance with the annual automatic increase provision of the 2014 Plan. In addition, the 2014 Plan reserve is automatically increased to include any shares issuable upon expiration or termination of options granted under the Company's 2007 Stock Plan, or 2007 Plan, for options that expire or terminate without having been exercised. For the year ended December 31, 2018, no shares have been transferred to the 2014 Plan from the 2007 Plan, and as of December 31, 2018, a total of 9,186 shares were allocated for issuance under the 2014 Plan. As of December 31, 2018, options to purchase a total of 2,706 shares of common stock have been granted under the 2014 Plan, 3,596 shares have been reserved under the 2014 Plan for the vesting of restricted stock units and market stock units, 567 shares have been returned to the 2014 Plan as a result of termination of options that expired or terminated without having been exercised and restricted stock awards that terminated prior to the awards vesting, and 3,451 shares of common stock remain available for future issuance under the 2014 Plan.
In July 2007, the Company adopted the 2007 Plan under which options or stock purchase rights may be granted to employees, consultants and directors. Upon the completion of the Company's initial public offering, or IPO, in March 2014, the board of directors terminated the 2007 Plan in connection with the IPO and all shares that were available for future issuance under the 2007 Plan at such time were transferred to the 2014 Plan. The 2007 Plan will continue to govern the terms and conditions of all outstanding equity awards granted under the 2007 Plan. As of December 31, 2018no shares remain available for future issuance under the 2007 Plan.

Stock Options

The following summarizes the assumptions used for estimating the fair value of stock options granted during the periods indicated:
 
 
Year Ended December 31,
 
 
2018
 
2017
 
2016
Risk-free interest rate
 
2.6%
 
1.7 - 2.1%
 
1.0 - 1.8%
Expected life (in years)
 
4.8
 
4.8
 
3.8 - 4.8
Expected volatility
 
41.0%
 
41.5 - 43.1%
 
43.9 - 46.5%
Dividend yield
 
 
 
Weighted-average grant date fair value per share          
 
$18.14
 
$14.17
 
$9.32


Stock option activity was as follows:
 
 
Number of
Options
 
Weighted Average
Exercise Price
Balance as of January 1, 2016
 
5,044

 
$
8.84

Granted
 
892

 
23.49

Exercised
 
(1,379
)
 
4.57

Forfeited
 
(123
)
 
16.08

Balance as of December 31, 2016
 
4,434

 
12.91

Granted
 
643

 
36.44

Exercised
 
(1,205
)
 
10.07

Forfeited
 
(180
)
 
19.15

Balance as of December 31, 2017
 
3,692

 
17.63

Granted
 
12

 
47.00

Exercised
 
(1,038
)
 
10.07

Forfeited
 
(12
)
 
27.93

Balance as of December 31, 2018
 
2,654

 
$
19.72



The summary of stock options outstanding as of December 31, 2018 is as follows:
 
 
Options Outstanding
 
Options Exercisable
Range of Exercise Prices
 
Number of
Options
 
Weighted Average
Exercise Price
 
Weighted Average
Remaining
Contractual Life
(in years)
 
Number of
Options
 
Weighted Average
Exercise Price
 
Weighted Average
Remaining Contractual Life
(in years)
$0.84 - $5.05
 
237

 
$
2.46

 
2.6
 
237

 
$
2.46

 
2.6
$5.93 - $13.00
 
744

 
8.52

 
2.0
 
744

 
8.52

 
2.0
$15.07 - $24.33
 
720

 
18.67

 
3.5
 
591

 
18.46

 
3.3
$24.89 - $39.75
 
875

 
32.73

 
4.9
 
392

 
32.60

 
4.8
$41.90 - $47.00
 
78

 
42.66

 
5.9
 
20

 
41.90

 
5.8
 
 
2,654

 
$
19.72

 
3.5
 
1,984

 
$
15.86

 
3.1

Restricted Stock Units
The Company's restricted stock units typically vest over a four-year period and upon vesting, the vested shares are issued to the recipient of the restricted stock units.
Restricted stock unit activity was as follows:
 
 
Number of
Shares
 
Weighted Average
Grant Date Fair Value
Nonvested as of January 1, 2016
 
716

 
$
26.19

Granted
 
751

 
25.55

Vested
 
(171
)
 
26.00

Forfeited
 
(86
)
 
25.54

Nonvested as of December 31, 2016
 
1,210

 
25.87

Granted
 
939

 
38.58

Vested
 
(349
)
 
26.35

Forfeited
 
(120
)
 
28.94

Nonvested as of December 31, 2017
 
1,680

 
32.65

Granted
 
910

 
55.60

Vested
 
(537
)
 
31.68

Forfeited
 
(116
)
 
35.96

Nonvested as of December 31, 2018
 
1,937

 
$
43.50


The aggregate intrinsic value of stock options exercised during each of the years ended December 31, 2018, 2017 and 2016 was $42.8 million, $33.9 million and $29.4 million, respectively. The total fair value of stock options vested during each of the years ended December 31, 2018, 2017 and 2016 was $7.7 million, $8.1 million and $8.7 million, respectively.
As of December 31, 2018, the aggregate intrinsic value of options outstanding was $79.1 million, the total unrecognized stock-based compensation expense related to stock options was $7.9 million, which the Company expects to recognize over the next 1.9 years, and total unrecognized stock-based compensation expense related to restricted stock units was $71.9 million, which the Company expects to recognize over the next 3.0 years.
Market Stock Units
In the first quarter of 2018, the Company began granting market stock units to certain executives under the 2014 Plan. The market stock units are performance-based awards that vest based upon the Company's relative stockholder return. The actual number of market stock units that will be eligible to vest is based on the total stockholder return of the Company relative to the total stockholder return of the Index over the three-year performance period. Up to one-third of the target shares of the Company's common stock subject to each market stock unit award are eligible to be earned after the first and second years of the performance period and up to 200% of the full target number of shares subject to each market stock unit award are eligible to be earned after the completion of the three-year performance period (less any shares earned for years one and two) based on the average price of the Company's common stock relative to the Index during the performance period. 
Market stock unit activity was as follows:
 
 
Number of Shares
 
Weighted Average Grant Date Fair Value
Nonvested as of January 1, 2018
 

 

Granted
 
260

 
21.98

Vested
 

 

Forfeited
 

 

Nonvested as of December 31, 2018
 
260

 
$
21.98


The Company estimates the fair value of market stock units on the date of grant using a Monte Carlo simulation model. The determination of fair value of the market stock units is affected by the Company's and peer firms' stock prices and a number of assumptions including the expected volatilities of the Company's and peer firms' stock and the Index, and its risk-free interest rate. The Company's expected volatility at the date of grant was based on the historical volatilities of its stock and peer firms' stocks and the Index over the performance period. The Company did not estimate a dividend rate or a forfeiture rate for the market stock units due to the limited size, the vesting period and nature of the grantee population and the lack of history of granting this type of award.

Significant assumptions used in the Monte Carlo simulation model for the market stock units granted during the year ended December 31, 2018 are as follows:
 
 
As of December 31, 2018
Volatility
 
34.5 - 36.6%
Risk-free interest rate
 
2.4 - 2.8%
Dividend yield
 
Longest remaining performance period (in years)
 
3
Total unrecognized stock-based compensation expense related to market stock units was $3.6 million, which the Company expects to recognize over the next 1.9 years.
v3.10.0.1
Provision for Income Taxes
12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Provision for Income Taxes
Provision for Income Taxes
The U.S. and non-U.S. components of loss before income taxes consisted of the following:
 
 
December 31,
 
 
2018
 
2017
U.S.
 
$
(39,360
)
 
$
(26,478
)
Non-U.S.
 
160

 

Loss before income taxes
 
$
(39,200
)
 
$
(26,478
)

The components of the Company's (benefit from) provision for income taxes consisted of the following:
 
 
Year Ended December 31,
 
 
2018
 
2017
 
2016
Current taxes:
 
 
 
 
 
 
Federal
 
$

 
$
(100
)
 
$

Foreign
 
83

 
62

 
33

State
 
69

 
74

 
112

Total current taxes
 
$
152

 
$
36

 
$
145

Deferred taxes:
 
 
 
 
 
 
Federal
 
$
(305
)
 
$
32

 
$
262

Change in valuation allowance - acquisitions
 
(2,970
)
 

 

Foreign
 
(2
)
 

 

State
 
(678
)
 
(382
)
 
20

Total deferred taxes
 
(3,955
)
 
(350
)
 
282

(Benefit from) provision for income taxes
 
$
(3,803
)
 
$
(314
)
 
$
427


The Company had federal net operating loss carryforwards of approximately $276.9 million and $168.1 million at December 31, 2018 and 2017, respectively, which will expire at various dates beginning in 2026, if not utilized. The Company also held state tax credits of $1.2 million and $0.5 million for the years ended December 31, 2018 and 2017, respectively, federal alternative minimum tax credits of zero and $0.1 million for the years ended December 31, 2018 and 2017, respectively, and federal R&D tax credits of $3.2 million and $1.2 million for the years ended December 31, 2018 and 2017, respectively. The state tax credits will expire in 2026 if not utilized, the federal R&D tax credits will expire at various dates beginning in 2027, if not utilized, and the federal alternative minimum tax credits have an indefinite carryforward period.
Utilization of the net operating losses and credit carryforwards may be subject to a substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986. The annual limitation may result in the expiration of net operating losses and credit carryforwards before utilization.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred taxes consisted of the following:
 
 
December 31,
 
 
2018
 
2017
Deferred tax assets:
 
 
 
 
NOL and credit carryforwards
 
$
69,339

 
$
40,716

Deferred revenue
 
5,064

 
8,216

Accrued expenses and other
 
5,347

 
6,802

Stock-based compensation
 
5,494

 
4,615

Foreign
 
41

 

Total deferred tax assets
 
85,285

 
60,349

Deferred tax liabilities:
 
 
 
 
Deferred expenses
 
(6,717
)
 
(6,198
)
Convertible debt
 
(10,045
)
 

Depreciation and amortization
 
(12,830
)
 
(1,426
)
Capitalized software
 
(637
)
 

Total deferred tax liabilities
 
(30,229
)
 
(7,624
)
Deferred tax assets less tax liabilities
 
55,056

 
52,725

Less: valuation allowance
 
(53,936
)
 
(52,629
)
Net deferred tax asset
 
$
1,120

 
$
96


The Company has established a valuation allowance due to uncertainties regarding the realization of deferred tax assets based on the Company's lack of earnings history. During 2018, the valuation allowance increased by approximately $19.9 million due to continuing operations. The valuation allowance change included a reduction of $3.0 million due to acquired income tax benefits as a result of the 2018 business combinations, which was recorded as an income tax benefit in the year ended December 31, 2018.
At December 31, 2018, the Company did not provide deferred income taxes on temporary differences resulting from earnings of certain foreign subsidiaries which are indefinitely reinvested. The reversal of these temporary differences could result in additional tax; however, it is not practicable to estimate the amount of any unrecognized deferred income tax liabilities at this time.
The Company's benefit from (provision for) income taxes attributable to continuing operations differs from the expected tax benefit amount computed by applying the statutory federal income tax rate of 21% to income before taxes for the year ended December 31, 2018 and applying the statutory federal income tax rate of 34% to income before taxes for the years ended December 31, 2017, and 2016 primarily as a result of the following:
 
 
Year Ended December 31,
 
 
2018
 
2017
 
2016
Income tax at U.S. statutory rate
 
21.0
 %
 
34.0
 %
 
34.0
 %
Effect of:
 
 
 
 
 
 
Increase in deferred tax valuation allowance
 
(50.6
)
 
(77.1
)
 
(36.3
)
Stock compensation
 
21.9

 
32.7

 

Acquisitions
 
5.9

 

 

R&D Credit
 
5.0

 
4.7

 

State taxes, net of federal benefit
 
7.6

 
6.2

 
1.7

Tax impact of federal law change
 

 
1.2

 

Other permanent items
 
(1.1
)
 
(0.5
)
 
(0.6
)
Income tax benefit (provision) effective rate
 
9.7
 %
 
1.2
 %
 
(1.2
)%

The Company files income tax returns in the U.S. federal jurisdiction, several state jurisdictions, and several foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years before 2015. Operating losses generated in years prior to 2015 remain open to adjustment until the statute of limitations closes for the tax year in which the net operating losses are utilized. The tax years 2015 through 2018 remain open to examination by all the major taxing jurisdictions to which the Company is subject, though the Company is not currently under examination by any major taxing jurisdiction.
The total amount of unrecognized benefits as of December 31, 2018 and 2017 was $0.3 million and zero. The reconciliation of unrecognized tax benefits at the beginning and end of the year is as follows:
 
 
Gross unrecognized tax benefits
Balance at January 1, 2018
 
$

Gross increase related to acquisitions
 
293

Balance at December 31, 2018
 
$
293


The Company's policy is to accrue interest and penalties related to uncertain tax positions as a component of income tax expense. For the years ended December 31, 2018, and 2017, the Company did not recognize any interest or penalties.
The Tax Act was enacted in December 2017. The Tax Act significantly changed U.S. tax law by, among other things, lowering U.S. corporate income tax rates, implementing a modified territorial tax system, and imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. The Tax Act reduced the U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018.
In connection with the initial analysis of the impact of the Tax Act, the Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The remeasurement of the Company's deferred tax balance was primarily offset by application of its valuation allowance. The Company applied the guidance in SAB 118 when accounting for the enactment-date effects of the Act in 2017 and throughout 2018, recording a provisional amount of $0.2 million related to the remeasurement of the deferred tax balances in the fourth quarter of 2017. During 2018, the Company completed its 2017 income tax returns and its accounting for the enactment-date income tax effects of the Act with no adjustments to the provisional amounts recorded at December 31, 2017.
While the Tax Act provides for a modified territorial tax system, beginning in 2018, global intangible low-taxed income, or GILTI, provisions will be applied providing an incremental tax on certain foreign income. The GILTI provisions require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary's tangible assets. Under GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on the future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred, or the period cost method, or (2) factoring such amounts into the Company's measurement of its deferred taxes, or the deferred method. The Company has selected the period cost method as its accounting policy with respect to the new GILTI tax rules.
v3.10.0.1
Employee Benefit Plan
12 Months Ended
Dec. 31, 2018
Retirement Benefits [Abstract]  
Employee Benefit Plan
Employee Benefit Plan
In January 2009, the Company adopted a 401(k) profit-sharing plan, or 401(k) Plan, covering substantially all employees. Employees can contribute between 1% and 90% of their total earnings. The 401(k) Plan also provides for employer contributions to be made at the Company's discretion.
For fiscal 2018, the Board of Directors elected to make matching contributions equal to 25% of employee contributions, which could be applied to up to 6% of each participant's compensation during 2018. Employees with at least 90 days of continuous service are eligible to participate, and certain employees are eligible for matching contributions after one year of continuous service. The Company's contributions vest 50% after one year of continuous service and 100% after two years of continuous service. The Company's policy prohibits participants from direct investment in shares of its common stock within the plan. The Company's contributions charged to expense were $0.9 million for the year ended December 31, 2018.
v3.10.0.1
Segments and Geographic Information
12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
Segments and Geographic Information
Segments and Geographic Information
All revenue-generating activities are directly related to the sale, implementation and support of the Company's solutions in a single operating segment. The Company's chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Substantially all of the Company's principal operations, assets and decision-making functions are located in the United States. The Company acquired Cloud Lending in the fourth quarter of 2018, adding operations internationally. The revenues and assets related to this acquisition are immaterial to the Company for the year ended December 31, 2018.
v3.10.0.1
Related Parties
12 Months Ended
Dec. 31, 2018
Related Party Transactions [Abstract]  
Related Parties
Related Parties
For the years ended December 31, 2018, 2017 and 2016, the Company recorded revenues from a related-party customer of $0.4 million, $0.4 million and $0.5 million, respectively.
v3.10.0.1
Selected Quarterly Financial Data (unaudited)
12 Months Ended
Dec. 31, 2018
Quarterly Financial Information Disclosure [Abstract]  
Selected Quarterly Financial Data (unaudited)
Selected Quarterly Financial Data (unaudited)
Selected summarized quarterly financial information for the years ended 2018 and 2017 is as follows:
 
 
Three Months Ended
 
 
March 31, 2017
 
June 30, 2017
 
September 30, 2017
 
December 31, 2017
 
March 31, 2018
 
June 30, 2018
 
September 30, 2018
 
December 31, 2018
Revenues
 
$
44,534

 
$
47,625

 
$
50,116

 
$
51,703

 
$
54,808

 
$
58,574

 
$
60,541

 
$
67,177

Cost of revenues
 
22,772

 
24,328

 
25,813

 
26,572

 
26,977

 
29,303

 
30,140

 
35,435

Gross profit
 
21,762

 
23,297

 
24,303

 
25,131

 
27,831

 
29,271

 
30,401

 
31,742

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales and marketing
 
9,878

 
11,096

 
9,904

 
10,292

 
10,966

 
12,108

 
11,467

 
13,583

Research and development
 
9,651

 
9,922

 
10,092

 
10,673

 
11,157

 
11,756

 
12,904

 
15,517

General and administrative
 
8,452

 
9,268

 
9,596

 
9,863

 
10,296

 
10,798

 
11,237

 
12,659

Acquisition related costs
 
348

 
351

 
270

 
263

 
256

 
258

 
1,811

 
1,820

Amortization of acquired intangibles
 
371

 
373

 
369

 
368

 
368

 
368

 
251

 
857

Unoccupied lease charges
 

 

 

 

 

 
658

 

 

Total operating expenses
 
28,700

 
31,010

 
30,231

 
31,459

 
33,043

 
35,946

 
37,670

 
44,436

Loss from operations
 
(6,938
)
 
(7,713
)
 
(5,928
)
 
(6,328
)
 
(5,212
)
 
(6,675
)
 
(7,269
)
 
(12,694
)
Total other income (expense), net
 
34

 
109

 
149

 
137

 
(1,023
)
 
(2,105
)
 
(1,877
)
 
(2,345
)
Loss before income taxes
 
(6,904
)
 
(7,604
)
 
(5,779
)
 
(6,191
)
 
(6,235
)
 
(8,780
)
 
(9,146
)
 
(15,039
)
Benefit from (provision for) income taxes
 
(136
)
 
(217
)
 
(3
)
 
670

 
187

 
153

 
287

 
3,176

Net loss
 
$
(7,040
)
 
$
(7,821
)
 
$
(5,782
)
 
$
(5,521
)
 
$
(6,048
)
 
$
(8,627
)
 
$
(8,859
)
 
$
(11,863
)
Net loss per common share, basic and diluted
 
$
(0.17
)
 
$
(0.19
)
 
$
(0.14
)
 
$
(0.13
)
 
$
(0.14
)
 
$
(0.20
)
 
$
(0.21
)
 
$
(0.27
)
v3.10.0.1
Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]  
Basis of Presentation and Principles of Consolidation
Basis of Presentation and Principles of Consolidation
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, and Securities and Exchange Commission, or SEC, requirements. The consolidated financial statements include the accounts of Q2 Holdings, Inc. and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Reclassifications
Reclassifications
Certain amounts appearing in the prior year's Consolidated Statements of Cash Flows have been reclassified to conform to the current year's presentation.
Use of Estimates
Use of Estimates
The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses. Significant items subject to such estimates include revenue recognition including determining the nature and timing of satisfaction of performance obligations, variable consideration, standalone selling price, and other revenue items requiring significant judgment; stock-based compensation; the carrying value of goodwill; the fair value of acquired intangibles; the capitalization of software development costs; the useful lives of property and equipment and long-lived intangible assets; fair value of contingent consideration; fair value of the conversion feature; and income taxes. In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from those estimates.
Cash and Cash Equivalents
Cash and Cash Equivalents
The Company considers all highly liquid investments acquired with an original maturity of ninety days or less at the date of purchase to be cash equivalents. Cash equivalents are stated at cost or fair value based on the underlying security.
Restricted Cash
Restricted Cash
Restricted cash consists of deposits held as collateral for the Company's secured letters of credit issued in place of the security deposit for the Company's corporate headquarters.
Investments
Investments
Investments consist primarily of U.S. government agency bonds, corporate bonds, commercial paper, certificates of deposit and money market funds. All investments are considered available for sale and are carried at fair value.
Concentration of Credit Risk
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, restricted cash, investments and accounts receivable. The Company's cash and cash equivalents, restricted cash and investments are placed with high credit quality financial institutions and issuers, and at times may exceed federally-insured limits. The Company has not experienced any loss relating to cash and cash equivalents or restricted cash in these accounts. The Company provides credit, in the normal course of business, to a number of its customers. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. 
Contract Balances, Deferred Revenue, Revenues and Cost of Revenues
Contract Balances
The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables (contract assets), and deferred revenues (contract liabilities). Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Contract assets that are expected to be billed during the succeeding twelve-month period are recorded in contract assets, current portion, and the remaining portion is recorded in contract assets, net of current portion on the accompanying consolidated balance sheets at the end of each reporting period. A contract liability results when the Company receives prepayments or deposits from customers in advance for implementation, maintenance and other services, as well as initial subscription fees. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed. The Company recognizes contract liabilities as revenues when the services are performed, and the corresponding revenue recognition criteria are met. Contract liabilities that are expected to be recognized as revenues during the succeeding twelve-month period are recorded in deferred revenues, current portion, and the remaining portion is recorded in deferred revenue, net of current portion, on the accompanying consolidated balance sheets at the end of each reporting period.
Deferred Revenues
Deferred revenues primarily consist of amounts that have been billed to or received from customers in advance of revenue recognition and prepayments received from customers in advance for implementation, maintenance and other services, as well as initial subscription fees. The Company recognizes deferred revenues as revenues when the services are performed and the corresponding revenue recognition criteria are met. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed.
Revenues
Revenues are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services over the term of the agreement, generally when the Company's solutions are implemented and made available to the customers. The promised consideration may include fixed amounts, variable amounts or both. Revenues are recognized net of sales credits and allowances.
Revenue-generating activities are directly related to the sale, implementation and support of the Company's solutions within a single operating segment. The Company derives the majority of its revenues from subscription fees for the use of its solutions hosted in either the Company's data centers or cloud-based hosting services, transaction revenue from bill-pay solutions, as well as revenues for customer support and implementation services related to the Company's solutions. The Company recognizes the corresponding revenues over time on a ratable basis over the customer agreement term. The Company accounts for revenue in accordance with the new revenue standard, Revenue from Contracts with Customers, which was adopted on January 1, 2018, using the modified retrospective method.
The following tables disaggregate the Company's revenue by major source:
 
 
Year Ended December 31, 2018
 
 
Subscription
 
Transactional
 
Services and Other
 
Consolidated
Total Revenues
 
$
168,226

 
$
39,232

 
$
33,642

 
$
241,100


Subscription Fee Revenues
The Company's software solutions are available for use as hosted application arrangements under subscription fee agreements without licensing perpetual rights to the software. Subscription fees from these applications, including contractual periodic price increases, are recognized over time on a ratable basis over the customer agreement term beginning on the date the Company's solution is made available to the customer. Amounts that have been invoiced are recorded in accounts receivable and deferred revenues or revenues, depending on whether the revenue recognition criteria have been met. Periodic price increases are estimated at contract inception and result in contract assets as revenue recognition may exceed the amount billed early in the contract. Additional fees for monthly usage above the levels included in the standard subscription fee are recognized as revenue in the month when the usage amounts are determined and reported.
A small portion of the Company's customers host and manage the Company's solutions on-premises or in third-party data centers under term license and maintenance agreements. Term licenses sold with maintenance entitle the customer to technical support, upgrades and updates to the software on a when-and-if-available basis. Under the new revenue standard, the Company recognizes software license revenue once the customer obtains control of the license, which generally occurs at the start of each license term. The Company recognizes the remaining arrangement consideration for maintenance revenue over time on a ratable basis over the term of the software license. If the expected length of time between when the Company transfers the software license to the customer and when the customer pays for it results in a significant financing component, the Company adjusts the promised amount of consideration for the effects of the time value of money, which reflects the price the customer would have paid when the license was transferred. Revenues from term licenses and maintenance agreements and the related financing component were not significant in the periods presented.
Transactional Revenues
The Company earns the majority of its transactional revenues based on the number of bill-pay transactions that End Users initiate on its digital banking platform. The Company also generates a smaller portion of its transactional revenues from interchange fees generated when End Users utilize debit cards integrated with its Q2 CorePro API or Q2 Biller Direct products. The Company recognizes revenue for bill-pay transaction services and interchange fees in the month incurred based on actual transactions.
Services and Other Revenues
Implementation services are required for each new digital banking and lending and leasing platform and Centrix standalone contract, and there is a significant level of integration and configuration for each customer. The Company's revenue for upfront implementation services are billed upfront and recognized over time on a ratable basis over the customer agreement term for its hosted application agreements. Upfront implementation services for on-premises agreements are recognized at commencement date. Under certain circumstances, the Company partners with third-party professional system integrators to support the installation and configuration process for its digital lending and leasing solutions, and therefore, the Company has determined that these services qualify as a separate performance obligation in certain markets and geographies, and the upfront implementation services for these agreements are recognized at commencement date.
Professional services revenues, which primarily consist of training, advisory services, core conversion services, web design, and other general professional services, are generally billed and recognized when delivered.
Certain out-of-pocket expenses billed to customers are recorded as revenues rather than an offset to the related expense. Revenues recorded from out-of-pocket expense reimbursements totaled approximately $1.7 million, $1.5 million and $1.5 million during the years ended December 31, 2018, 2017 and 2016, respectively. The out-of-pocket expenses are reported in cost of revenues.
Significant Judgments
Performance Obligations and Standalone Selling Price
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting in the new revenue standard. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company has contracts with customers that often include multiple performance obligations, usually including multiple subscription and implementation services. For these contracts, the Company accounts for individual performance obligations that are distinct separately by allocating the contract's total transaction price to each performance obligation in an amount based on the relative standalone selling price, or SSP, of each distinct good or service in the contract. In determining whether implementation services are distinct from subscription services, the Company considered various factors including the significant level of integration, interdependency, and interrelation between the implementation and subscription service, as well as the inability of the customer's personnel or other service providers to perform significant portions of the services. The Company has concluded that the implementation services included in contracts with multiple performance obligations in the North American banking market are not distinct and, as a result, the Company defers any arrangement fees for implementation services and recognizes such amounts over time on a ratable basis as one performance obligation with the underlying subscription revenue for the initial agreement term of the hosted application agreements. The Company has concluded that outside the North American banking market, the implementation services for its lending and leasing platform included in contracts with multiple performance obligations are distinct and, as a result, the Company recognizes implementation fees on such arrangements as the related implementation services are performed.
The majority of the Company's revenue recognized at a particular point in time is for professional services and usage revenue. These services are performed within a relatively short period of time and are recognized at the point in time in which the customer obtains control of the asset, which is generally upon completion of the service.
Judgment is required to determine the SSP for each distinct performance obligation. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The primary method used to estimate SSP is the adjusted market assessment approach, which considers its overall pricing objectives, market conditions and other factors, including the value of the Company's contracts, its discounting practices, the size and volume of its transactions, customer characteristics, price lists, go-to-market strategy, historical standalone sales and agreement prices, and the number and types of users within its contracts.
Variable Consideration
The Company recognizes usage revenue related to End Users accessing its products in excess of contracted amounts, bill-pay transactions that End Users initiate on its digital banking platform, and interchange fees that End Users generate using the Company's solutions. Judgment is required to determine the accounting for these types of revenue. The Company considers various factors including the degree to which usage is interdependent or interrelated to past services, costs to the Company per user over the contract, and contractual price per user changes and their relationship to market terms, forecasted data, and the Company's cost to fulfill the obligation. The Company has concluded that its usage revenue relates specifically to the transfer of the service to the customer and is consistent with the allocation objective of Topic 606 when considering all of the performance obligations and payment terms in the contract. Therefore, the Company recognizes usage revenue on a monthly or quarterly basis in accordance with the agreement, as determined and reported. This allocation reflects the amount the Company expects to receive for the services for the given period.
The Company sometimes provides credits or incentives to its customers. Known and estimable credits and incentives represent a form of variable consideration, which are estimated at contract inception and reduce the revenues recognized for a particular contract. These estimates are updated at the end of each reporting period as additional information becomes available. The Company believes that there will not be significant changes to its estimates of variable consideration as of December 31, 2018.
Other Considerations
The Company evaluates whether it is the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis) with respect to the vendor reseller agreements pursuant to which the Company resells certain third-party solutions along with the Company's solutions. Generally, the Company reports revenues from these types of contracts on a gross basis, meaning the amounts billed to customers are recorded as revenues, and expenses incurred are recorded as cost of revenues. Where the Company is the principal, it first obtains control of the inputs to the specific good or service and directs their use to create the combined output. The Company's control is evidenced by its involvement in the integration of the good or service on its platform before it is transferred to its customers and is further supported by the Company being primarily responsible to its customers and having a level of discretion in establishing pricing. Revenues provided from agreements in which the Company is an agent are immaterial.
Cost of Revenues
Cost of revenues is comprised primarily of salaries and other personnel-related costs, including employee benefits, bonuses and stock-based compensation, for employees providing services to the Company's customers. Costs associated with these services include the costs of the Company's implementation, customer support, data center and customer training personnel, as well as costs related to research and development personnel who perform implementation and customer support services. Cost of revenues also includes the direct costs of bill-pay and other third-party intellectual property included in the Company's solutions, the amortization of deferred solution and services costs, co-location facility costs and depreciation of the Company's data center assets, cloud-based hosting services, an allocation of general overhead costs and referral fees. Direct costs of third-party intellectual property include amounts paid for third-party licenses and related maintenance that are incorporated into the Company's software and the amortization of acquired technology from the Company's recent acquisitions, with the costs amortized to cost of revenues over the useful lives of the purchased assets.

The Company capitalizes certain personnel costs directly related to the implementation of its solutions to the extent those costs are considered to be recoverable from future revenues. The Company amortizes the costs for a particular implementation once revenue recognition commences, and the Company amortizes those implementation costs over the expected period of customer benefit, which has been determined to be the estimated life of the technology. Other costs not directly recoverable from future revenues are expensed in the period incurred.
Accounts Receivable
Accounts Receivable
Accounts receivable are stated at net realizable value, including both billed and unbilled receivables to customers. Unbilled receivable balances arise primarily when the Company provides services in advance of billing for those services. Generally, billing for revenues related to the number of End Users and the number of transactions processed by the Company's End Users that are included in the Company's minimum subscription fee occurs in the month the revenue is recognized, resulting in accounts receivable. Billing for revenues relating to the number of End Users and the number of transactions processed by the Company's End Users that are in excess of the Company's minimum subscription fees are, generally, billed in the month following the month the revenues were earned, resulting in an unbilled receivable. Included in the accounts receivable balances as of December 31, 2018 and 2017 were unbilled receivables of $3.2 million and $2.1 million, respectively.
The Company assesses the collectability of outstanding accounts receivable on an ongoing basis and maintains an allowance for doubtful accounts for accounts receivable deemed uncollectable. As of December 31, 2018 and 2017, the Company did not provide for an allowance for doubtful accounts, as all amounts outstanding were deemed collectable. Historically, the Company's collection experience has not varied significantly, and bad debt expenses have been insignificant.
The Company maintains a reserve for estimated sales credits issued to customers for billing disputes or other service-related reasons. This allowance is recorded as a reduction against current period revenues and accounts receivable. In estimating this allowance, the Company analyzes prior periods to determine the amounts of sales credits issued to customers compared to the revenues in the period that related to the original customer invoice. This estimate is analyzed quarterly and adjusted as necessary. 
Deferred Implementation Costs and Deferred Solution and Other Costs
Deferred Implementation Costs
The Company capitalizes certain personnel and other costs such as employee salaries, benefits and the associated payroll taxes that are direct and incremental to the implementation of its solutions. The Company analyzes implementation costs that may be capitalized to assess their recoverability, and only capitalizes costs that it anticipates to be recoverable. The Company assesses the recoverability of its deferred implementation costs by comparing the greater of the amount of the non-cancellable portion of a customer's contract and the non-refundable customer prepayments received as it relates to the specific implementation costs incurred. The Company begins amortizing the deferred implementation costs for an implementation once the revenue recognition criteria have been met, and the Company amortizes those deferred implementation costs ratably over the expected period of customer benefit, which has been determined to be the estimated life of the technology, which the Company estimates to be five to seven years. The Company determined the period of benefit by considering factors such as historically high renewal rates with similar customers and contracts, initial contract length, an expectation that there will still be a demand for the product at the end of its term, and the significant costs to switch to a competitor's product, all of which are governed by the estimated useful life of the technology.

The portion of deferred implementation costs expected to be amortized during the succeeding twelve-month period is recorded in current assets as deferred implementation costs, current portion, and the remainder is recorded in long-term assets as deferred implementation costs, net of current portion. The Company capitalized implementation costs in the amount of $7.3 million and $5.2 million during the years ended December 31, 2018 and 2017, respectively, and recognized $4.7 million and $4.4 million of amortization during the years ended December 31, 2018 and 2017, respectively. Amortization expense is included in cost of revenues in the accompanying consolidated statements of comprehensive loss.
Deferred Solution and Other Costs
The Company capitalizes sales commissions and other third-party costs such as third-party licenses and maintenance related to its customer agreements. The Company capitalizes sales commissions because the commission charges are so closely related to the revenues from the non-cancellable customer agreements that they should be recorded as an asset and charged to expense over the same period that the related revenue is recognized. Under the new revenue standard, the Company capitalizes commissions and bonuses for those involved in the sale, including direct employees and indirect supervisors, as these are incremental to the sale. The Company typically pays commissions in two increments. The initial payment is made after the contract has been executed and the initial deposit has been received from the customer, and the final payment is made upon commencement date. The Company requires that an individual remain employed to collect a commission when it is due. The service period between the first and second payment is considered to be a substantive service period, and as a result, the Company expenses the final payment when made. The Company begins amortizing deferred solution and other costs for a particular customer agreement once the revenue recognition criteria are met and amortizes those deferred costs over the expected period of customer benefit, which has been determined to be the estimated life of the technology, which the Company estimates to be five to seven years. The Company determined the period of benefit by considering factors such as historically high renewal rates with similar customers and contracts, initial contract length, an expectation that there will still be a demand for the product at the end of its term, and the significant costs to switch to a competitor's product, all of which are governed by the estimated useful life of the technology.

The Company analyzes solution and other costs that may be capitalized to assess their recoverability and only capitalizes costs that it anticipates being recoverable. The portion of capitalized costs expected to be amortized during the succeeding twelve-month period is recorded in current assets as deferred solution and other costs, current portion, and the remainder is recorded in long-term assets as deferred solution and other costs, net of current portion. The Company capitalized $6.7 million and $4.6 million in deferred commissions costs during the years ended December 31, 2018 and 2017, respectively, and recognized $3.6 million and $3.1 million of amortization during the years ended December 31, 2018 and 2017, respectively. Amortization expense is included in sales and marketing expenses in the accompanying consolidated statements of comprehensive loss.
Property and Equipment
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the related assets. Maintenance and repairs that do not extend the life of or improve an asset are expensed in the period incurred.
The estimated useful lives of property and equipment are as follows:
Computer hardware and equipment
 
3 - 5 years
Purchased software and licenses
 
3 - 5 years
Furniture and fixtures
 
7 years
Leasehold improvements
 
Lesser of estimated useful life or lease term
Purchase Price Allocation, Intangible Assets, and Goodwill
Purchase Price Allocation, Intangible Assets, and Goodwill
The purchase price allocation for business combinations and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values. The Company early adopted Accounting Standards Update, or ASU, No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" as of January 1, 2017. Under ASU 2017-01, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the single asset or group of assets, as applicable, is not a business. If it is not met, the Company determines whether the single asset or group of assets, as applicable, meets the definition of a business.

In connection with the Company's acquisitions and asset purchase discussed in Note 3 - Business Combinations and Asset Acquisition, the Company recorded certain intangible assets, including acquired technology, customer relationships, trademarks, non-compete agreements and assembled workforce. Amounts allocated to the acquired intangible assets are being amortized on a straight-line basis over the estimated useful lives. The Company periodically reviews the estimated useful lives and fair values of its identifiable intangible assets, taking into consideration any events or circumstances which might result in a diminished fair value or revised useful life.

The excess purchase price over the fair value of assets acquired is recorded as goodwill. The Company tests goodwill for impairment annually in October, or whenever events or changes in circumstances indicate an impairment may have occurred. Because the Company operates in a single reporting unit, the impairment test is performed at the consolidated entity level by comparing the estimated fair value of the Company to the carrying value of the Company. The Company estimates the fair value of the reporting unit using a "step one" analysis using a fair-value-based approach based on the market capitalization or a discounted cash flow analysis of projected future results to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Determining the fair value of goodwill is subjective in nature and often involves the use of estimates and assumptions including, without limitation, use of estimates of future prices and volumes for the Company's products, capital needs, economic trends and other factors which are inherently difficult to forecast. If actual results, or the plans and estimates used in future impairment analyses are lower than the original estimates used to assess the recoverability of these assets, the Company could incur impairment charges in a future period.
Software Development Costs
Software Development Costs
Software development costs include salaries and other personnel-related costs, including employee benefits and bonuses attributed to programmers, software engineers and quality control teams working on the Company's software solutions. The costs related to software development that are incurred between reaching technological feasibility of a solution and the point at which the solution is ready for general release are capitalized and are included in intangible assets, net on the consolidated balance sheet. Capitalized software development costs are computed on an individual product basis, and products available for market are amortized to cost of revenues over the products' estimated economic lives.
Research and Development Costs
Research and Development Costs
Research and development costs include salaries and other personnel-related costs, including employee benefits, bonuses and stock-based compensation, third-party contractor expenses, software development tools, an allocation of facilities and depreciation expenses and other related expenses incurred in developing new solutions and upgrading and enhancing existing solutions. Research and development costs are expensed as incurred.
Advertising
Advertising
All advertising costs of the Company are expensed the first time the advertising takes place.
Sales Tax
Sales Tax
The Company presents sales taxes and other taxes collected from customers and remitted to governmental authorities on a net basis and, as such, excludes them from revenues.
Comprehensive Loss
Comprehensive Loss
Comprehensive loss includes net loss as well as other changes in stockholders' equity that result from transactions and economic events other than those with stockholders. Other comprehensive loss consists of net loss, unrealized gains and losses on available-for-sale investments, and foreign currency translation adjustments.
Stock-Based Compensation
Stock-Based Compensation
Stock options, restricted stock units, and market stock units awarded to employees, directors, executives and consultants are measured at fair value at each grant date. As of January 1, 2017, the Company no longer uses a forfeiture rate to recognize compensation expense as a result of the adoption of ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting." Generally, options vest 25% on the one-year anniversary of the grant date with the balance vesting monthly over the following 36 months, and restricted stock unit awards vest in four annual installments of 25% each. Market stock units are performance-based awards that cliff vest based on the Company's stockholder return relative to the total stockholder return of the Russell 2000 Index, or Index, over a three-year period on the anniversary of the date of grant. Up to one-third of the target shares of the Company's common stock subject to each market stock unit award are eligible to be earned after the first and second years of the performance period and up to 200% of the full target number of shares subject to each market stock unit award are eligible to be earned after the completion of the three-year performance period (less any shares earned for years one and two) based on the average price of the Company's common stock relative to the Index during the performance period.
The Company values stock options using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including the risk-free interest rate, expected life, expected stock price volatility and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of the Company's employee stock options. The expected life represents the period of time the stock options are expected to be outstanding and is based on the simplified method. Under the simplified method, the expected life of an option is presumed to be the mid-point between the vesting date and end of the contractual term. The Company used the simplified method due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options. Due to the Company's limited history as a public company, expected volatility is based on historical volatilities for publicly traded stock of comparable companies over the estimated expected life of the stock options. The Company assumed no dividend yield because it does not expect to pay dividends in the near future, which is consistent with the Company's history of not paying dividends. The Company recognizes compensation expense ratably over the requisite service period of the stock option award.
The Company values restricted stock units at the closing market price on the date of grant, and recognizes compensation expense ratably over the requisite service period of the restricted stock unit award.
The Company estimates the fair value of market stock units on the date of grant using a Monte Carlo simulation model. The determination of fair value of the market stock units is affected by the Company's stock price and a number of assumptions including the expected volatility and the risk-free interest rate. The Company's expected volatility at the date of grant was based on the historical volatilities of its stock and peer firms' stocks and the Index over the performance period. The Company assumed no dividend yield and recognizes compensation expense ratably over the performance period of the market stock unit award. The Company recognizes compensation expense using the graded attribution method on a straight-line basis over the performance period for each market stock unit award.
Convertible Senior Notes
Convertible Senior Notes
In February 2018, the Company issued $230.0 million principal amount of convertible senior notes due in February 2023, or the Convertible Notes. In accounting for the issuance of the Convertible Notes, the Company separated each of the Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value, as of the date of issuance, of a similar debt without the conversion option. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability components from the total initial proceeds. The difference between the par amount of the Convertible Notes and the carrying amount of the liability component represents debt discounts that are amortized to interest expense over the respective terms of the Convertible Notes using the effective interest rate method. The equity components are not remeasured as long as they continue to meet the conditions for equity classification. In accounting for the issuance costs related to the Convertible Notes, the Company allocated the total amount of issuance costs incurred to liability and equity components based on their relative values. Issuance costs attributable to the liability components are amortized to interest expense over the respective terms of the Convertible Notes using the effective interest rate method. The issuance costs attributable to the equity components were netted against the respective equity components in additional paid-in capital.
Income Taxes
Income Taxes
Deferred income taxes are provided for the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and operating loss carryforwards and credits using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that deferred tax assets will be realized and recognizes a valuation allowance if it is more likely than not that some portion of the deferred tax assets will not be realized. This assessment requires judgment as to the likelihood and amounts of future taxable income by tax jurisdiction. To date, the Company has provided a valuation allowance against its deferred tax assets as it believes the objective and verifiable evidence of its historical pretax net losses outweighs any positive evidence of its forecasted future results. Although the Company believes that its tax estimates are reasonable, the ultimate tax determination involves significant judgment that is subject to audit by tax authorities in the ordinary course of business. Although the Company believes that its tax estimates are reasonable, the ultimate tax determination involves significant judgment that is subject to audit by tax authorities in the ordinary course of business. The Company will continue to monitor the positive and negative evidence, and it will adjust the valuation allowance as sufficient objective positive evidence becomes available. No tax related impact was recorded in the financial statements as a result of the adoption of the new revenue standard.

The Company evaluates its uncertain tax positions based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized. Potential interest and penalties associated with any uncertain tax positions are recorded as a component of income tax expense. Through December 31, 2018, the Company has not identified any material uncertain tax positions for which liabilities would be required to be recorded other than the liabilities related to acquisitions completed during the year.
Recent Accounting Pronouncements
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU No. 2014-09, which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled to when products are transferred to customers. ASU 2014-09 was modified by subsequently issued ASUs 2015-14, 2016-08, 2016-10, 2016-12 and 2016-20. Topic 606 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. Collectively, the Company refers to ASU 2014-09, as amended, and Subtopic 340-40 as the "new revenue standard." On January 1, 2018, the Company adopted the new revenue standard for all contracts which were not completed as of January 1, 2018, using the modified retrospective method. Adoption of the new revenue standard resulted in changes to the Company's accounting policies for revenue recognition, contract balances, accounts receivable, deferred revenues, deferred implementation costs, and deferred solution and other costs. The Company recognized the cumulative effect of initially applying the new revenue standard as a positive adjustment to the opening balance of accumulated deficit on the consolidated balance sheet in the amount of $15.8 million, which reflects the acceleration of revenues and deferral of incremental commission costs of obtaining subscription contracts. The comparative information in prior periods presented has not been restated and continues to be reported under the accounting standards in effect for those periods.
The most significant impact of adoption of the new revenue standard relates to the accounting for arrangements that include contractual provisions providing for periodic price increases in subscription fee arrangements. Under previous GAAP, the Company accounted for periodic price increases in the period in which they occurred, and under the new revenue standard, the Company recognizes revenue from periodic price increases on a ratable basis over the term of the contract. Additionally, under previous GAAP, for contracts in which customers host and manage the Company's solutions on-premises or in third-party data centers under term license and maintenance agreements, the Company recognized the entire arrangement consideration monthly over the term of the software license as the Company did not have VSOE of fair value for the license and maintenance. Under the new standard, the Company recognizes software license revenue once the customer obtains control of the license, which generally occurs at the commencement of each license term. Under previous GAAP, the Company also deferred only direct and incremental commission costs to obtain a contract and amortized those costs over the term of the related contract. Under the new standard, the Company defers additional incremental costs related to the customer contract and amortizes those costs over the expected period of customer benefit. Also, a portion of the commission payment is now being expensed as incurred.
The cumulative effect of the changes made to the Company's consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard were as follows:
 
 
Balance at December 31, 2017
 
Adjustments due to the new revenue standard
 
Balance at January 1, 2018
Balance sheet
 
 
 
 
 
 
Assets
 
 
 
 
 
 
Contract assets, current portion
 
$

 
$
517

 
$
517

Deferred solution and other costs, current portion
 
9,246

 
64

 
9,310

Deferred solution and other costs, net of current portion
 
12,973

 
265

 
13,238

Deferred implementation costs, net of current portion
 
8,295

 
(93
)
 
8,202

Contract assets, net of current portion
 

 
4,541

 
4,541

 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
Accrued compensation
 
11,511

 
(571
)
 
10,940

Deferred revenues, current portion
 
38,379

 
(1,803
)
 
36,576

Deferred revenues, net of current portion
 
28,289

 
(8,174
)
 
20,115

 
 
 
 
 
 
 
Stockholders' equity
 
 
 
 
 
 
Accumulated deficit
 
$
(152,114
)
 
$
15,842

 
$
(136,272
)
In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company's consolidated statement of comprehensive loss and balance sheet was as follows:
 
 
Year Ended December 31, 2018
 
 
As Reported
 
Balances without new revenue standard
 
Effect of Change Higher/(Lower)
Income statement
 
 
 
 
 
 
Revenues
 
$
241,100

 
$
233,443

 
$
7,657

 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
Cost of revenues
 
121,855

 
122,121

 
(266
)
Sales and marketing
 
48,124

 
49,429

 
(1,305
)
Interest and other income
 
2,811

 
2,676

 
135

 
 
 
 
 
 
 
Net loss
 
$
(35,397
)
 
$
(44,760
)
 
$
9,363

 
 
 
 
 
 
 
Net loss per common share, basic and diluted
 
$
(0.83
)
 
$
(1.05
)
 
$
0.22

 
 
As of December 31, 2018
 
 
As Reported
 
Balances without new revenue standard
 
Effect of Change Higher/(Lower)
Balance sheet
 
 
 
 
 
 
Assets
 
 
 
 
 
 
Contract assets, current portion
 
$
598

 
$

 
$
598

Deferred solution and other costs, current portion
 
10,501

 
10,240

 
261

Deferred implementation costs, current portion
 
4,427

 
4,053

 
374

Deferred solution and other costs, net of current portion
 
16,761

 
15,532

 
1,229

Deferred implementation costs, net of current portion
 
9,948

 
10,188

 
(240
)
Contract assets, net of current portion
 
10,272

 

 
10,272

 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
Accrued compensation
 
12,652

 
13,404

 
(752
)
Deferred revenues, current portion
 
42,531

 
53,608

 
(11,077
)
Deferred revenues, net of current portion
 
23,063

 
23,945

 
(882
)
 
 
 
 
 
 
 
Stockholders' equity
 
 
 
 
 
 
Accumulated deficit
 
$
(172,422
)
 
$
(197,627
)
 
$
25,205


In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842 (Leases)," which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. In July 2018, the FASB also issued ASU 2018-11, "Targeted Improvements," which provides the option to adopt ASU No. 2016-02 retrospectively for each prior period presented or as of the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. These standards are effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early application is permitted. The Company anticipates that the adoption of Topic 842 will impact its consolidated balance sheets as most of its operating lease commitments will be subject to the new standard and recognized as right-of-use assets and corresponding operating lease liabilities upon the adoption of Topic 842, which will increase the total assets and total liabilities that it reports relative to such amounts prior to adoption. The Company intends to adopt the standard using the adoption method outlined in ASU 2018-11, which allows entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company intends to elect the package of practical expedients permitted under the transition guidance within Topic 842, which among other things, will allow the Company to carry forward the historical lease classification and the practical expedient to not separate lease and non-lease components of an agreement. The Company expects the adoption of Topic 842 to result in the recording of additional net lease assets and lease liabilities of approximately $26 million to $28 million and approximately $35 million to $37 million, respectively, as of January 1, 2019. The difference between the additional lease assets and lease liabilities is the reclassification of deferred rent on its consolidated balance sheet at the date of adoption. The Company does not expect the standard to impact the consolidated statements of comprehensive loss or the consolidated statements of cash flows.
In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," to clarify and provide specific guidance on eight cash flow classification issues that are not addressed by current GAAP and thereby reduce the current diversity in practice. The Company adopted ASU 2016-15, effective January 1, 2018, and there was no impact on the consolidated financial statements as a result of the adoption.
In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which provides guidance on the classification of restricted cash in the statement of cash flows. The Company adopted this ASU retrospectively, effective January 1, 2018. As a result, the Company included restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts presented on the consolidated statements of cash flows, resulting in an increase in net cash of $1.8 million, $2.3 million, and $1.3 million for the years ended December 31, 2018, 2017, and 2016, respectively.
In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment," which simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test and requires an entity to write down the carrying value of goodwill up to the amount by which the carrying amount of a reporting unit exceeds its fair value. The standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years and early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.
In May 2017, the FASB issued ASU No. 2017-09, "Compensation - Stock Compensation (Topic 718)," to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of a share-based payment award. The Company adopted ASU 2017-09, effective January 1, 2018, and there was no impact on the consolidated financial statements as a result of the adoption.
In December 2017, the SEC issued Staff Accounting Bulletin, or SAB, 118 to address the application of GAAP in situations in which a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act, or the Tax Act, which was signed into law on December 22, 2017. In March 2018, the FASB issued ASU No. 2018-05, "Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update)," which amended ASC 740 to incorporate the requirements of SAB 118. Disclosures related to the effect of the Tax Act and the Company's utilization of SAB 118 appear in Note 14 - Income Taxes.
In August 2018, the FASB issued ASU No. 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40)," which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 will be effective for the Company beginning in its first quarter of 2020, with early adoption permitted. The ASU may be applied retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is anticipating early adoption of the ASU for January 1, 2019 and is currently evaluating the financial statement impact on the consolidated financial statements as a result of this adoption.
v3.10.0.1
Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]  
Schedule of Allowance for Doubtful Accounts
The following table shows the Company's allowance for sales credits as follows:
 
 
Beginning Balance
 
Additions
 
Deductions
 
Ending Balance
Year Ended December 31, 2016
 
$
212

 
$
488

 
$
(472
)
 
$
228

Year Ended December 31, 2017
 
228

 
683

 
(685
)
 
226

Year Ended December 31, 2018
 
$
226

 
$
508

 
$
(367
)
 
$
367

Schedule of Useful Lives of Property and Equipment
The estimated useful lives of property and equipment are as follows:
Computer hardware and equipment
 
3 - 5 years
Purchased software and licenses
 
3 - 5 years
Furniture and fixtures
 
7 years
Leasehold improvements
 
Lesser of estimated useful life or lease term
Property and equipment consisted of the following:
 
 
December 31,
 
 
2018
 
2017
Computer hardware and equipment
 
$
37,825

 
$
30,734

Purchased software and licenses
 
9,687

 
8,788

Furniture and fixtures
 
5,934

 
5,387

Leasehold improvements
 
13,054

 
13,470

 
 
66,500

 
58,379

Accumulated depreciation
 
(31,506
)
 
(23,835
)
Property and equipment, net
 
$
34,994

 
$
34,544

Schedule of Disaggregation of Revenue by Major Source
The following tables disaggregate the Company's revenue by major source:
 
 
Year Ended December 31, 2018
 
 
Subscription
 
Transactional
 
Services and Other
 
Consolidated
Total Revenues
 
$
168,226

 
$
39,232

 
$
33,642

 
$
241,100

Schedule of Net Loss Per Share, Basic and Diluted
The following table sets forth the computations of net loss per share for the periods listed:
 
 
Year ended December 31,
 
 
2018

2017

2016
Numerator:
 
 
 
 
 
 
Net loss
 
$
(35,397
)
 
$
(26,164
)
 
$
(36,354
)
Denominator:
 
 
 
 
 
 
Weighted-average common shares outstanding, basic and diluted
 
42,797

 
41,218

 
39,649

Net loss per common share, basic and diluted
 
$
(0.83
)
 
$
(0.63
)
 
$
(0.92
)
Schedule of Antidilutive Securities Excluded from Computation of Loss Per Share
The following table sets forth the anti-dilutive common share equivalents for the periods listed:
 
 
Year ended December 31,
 
 
2018
 
2017
 
2016
Stock options, restricted stock units, and market stock units
 
4,851

 
5,372

 
5,643

Schedule of Impact of New Accounting Pronouncements
The cumulative effect of the changes made to the Company's consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard were as follows:
 
 
Balance at December 31, 2017
 
Adjustments due to the new revenue standard
 
Balance at January 1, 2018
Balance sheet
 
 
 
 
 
 
Assets
 
 
 
 
 
 
Contract assets, current portion
 
$

 
$
517

 
$
517

Deferred solution and other costs, current portion
 
9,246

 
64

 
9,310

Deferred solution and other costs, net of current portion
 
12,973

 
265

 
13,238

Deferred implementation costs, net of current portion
 
8,295

 
(93
)
 
8,202

Contract assets, net of current portion
 

 
4,541

 
4,541

 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
Accrued compensation
 
11,511

 
(571
)
 
10,940

Deferred revenues, current portion
 
38,379

 
(1,803
)
 
36,576

Deferred revenues, net of current portion
 
28,289

 
(8,174
)
 
20,115

 
 
 
 
 
 
 
Stockholders' equity
 
 
 
 
 
 
Accumulated deficit
 
$
(152,114
)
 
$
15,842

 
$
(136,272
)
In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company's consolidated statement of comprehensive loss and balance sheet was as follows:
 
 
Year Ended December 31, 2018
 
 
As Reported
 
Balances without new revenue standard
 
Effect of Change Higher/(Lower)
Income statement
 
 
 
 
 
 
Revenues
 
$
241,100

 
$
233,443

 
$
7,657

 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
Cost of revenues
 
121,855

 
122,121

 
(266
)
Sales and marketing
 
48,124

 
49,429

 
(1,305
)
Interest and other income
 
2,811

 
2,676

 
135

 
 
 
 
 
 
 
Net loss
 
$
(35,397
)
 
$
(44,760
)
 
$
9,363

 
 
 
 
 
 
 
Net loss per common share, basic and diluted
 
$
(0.83
)
 
$
(1.05
)
 
$
0.22

 
 
As of December 31, 2018
 
 
As Reported
 
Balances without new revenue standard
 
Effect of Change Higher/(Lower)
Balance sheet
 
 
 
 
 
 
Assets
 
 
 
 
 
 
Contract assets, current portion
 
$
598

 
$

 
$
598

Deferred solution and other costs, current portion
 
10,501

 
10,240

 
261

Deferred implementation costs, current portion
 
4,427

 
4,053

 
374

Deferred solution and other costs, net of current portion
 
16,761

 
15,532

 
1,229

Deferred implementation costs, net of current portion
 
9,948

 
10,188

 
(240
)
Contract assets, net of current portion
 
10,272

 

 
10,272

 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
Accrued compensation
 
12,652

 
13,404

 
(752
)
Deferred revenues, current portion
 
42,531

 
53,608

 
(11,077
)
Deferred revenues, net of current portion
 
23,063

 
23,945

 
(882
)
 
 
 
 
 
 
 
Stockholders' equity
 
 
 
 
 
 
Accumulated deficit
 
$
(172,422
)
 
$
(197,627
)
 
$
25,205

v3.10.0.1
Business Combinations and Asset Acquisitions (Tables)
12 Months Ended
Dec. 31, 2018
Business Combinations [Abstract]  
Schedule of Purchase Price Allocation
The table below summarizes the allocation of the purchase price based on the estimated fair value of the assets acquired and the liabilities assumed. The fair values of assets acquired and liabilities assumed, including valuations of intangible assets, accruals, and income taxes, may change as additional information is received during the measurement period. The measurement period will end no later than one year from the acquisition date.
Assets acquired:
 
 
   Cash
 
$
2,116

   Accounts receivable, net
 
335

   Prepaid expenses and other current assets
 
139

   Property and equipment, net
 
22

   Other long-term assets
 
35

   Intangible assets, net
 
8,275

   Goodwill
 
17,828

Total assets acquired
 
28,750

Liabilities assumed:
 
 
   Accounts payable and accrued liabilities
 
2,058

   Deferred revenues
 
1,200

Total liabilities assumed
 
3,258

Fair value of assets acquired and liabilities assumed
 
$
25,492

Assets acquired:
 
 
   Cash
 
$
796

   Accounts receivable, net
 
1,311

   Prepaid expenses and other current assets
 
4,704

   Property and equipment, net
 
101

   Other long-term assets
 
167

   Intangible assets, net
 
50,100

   Goodwill
 
77,203

Total assets acquired
 
134,382

Liabilities assumed:
 
 
   Accounts payable, accrued liabilities, and accrued compensation
 
6,007

     Deferred revenues
 
3,250

Total liabilities assumed
 
9,257

Fair value of assets acquired and liabilities assumed
 
$
125,125

Schedule of Finite-Lived Intangible Assets Acquired and Estimated Useful Lives
The fair value of the separately identifiable finite-lived intangible assets acquired and estimated useful lives are as follows (in thousands, except years):
 
Estimated Fair Values
 
Estimated Useful Lives
Customer Relationships
$
7,245

 
5
Trademark
9,525

 
10
Non-compete agreements
970

 
5
Acquired technology
32,360

 
7
Total acquisition-related intangible assets
$
50,100

 
 
The fair value of the separately identifiable finite-lived intangible assets acquired and estimated useful lives are as follows (in thousands, except years):
 
Estimated Fair Values
 
Estimated Useful Lives
Customer Relationships
$
265

 
3
Trademark
270

 
2
Non-compete agreements
210

 
5
Acquired technology
7,530

 
5
Total acquisition-related intangible assets
$
8,275

 
 
Schedule of Pro Forma Financial Information
The table below shows the pro forma statements of operations data for the respective years ending December 31:
 
 
(Unaudited)
 
 
Year ended December 31,
 
 
2018
 
2017
Total Revenues
 
$
252,541

 
$
199,220

Net loss
 
(49,033
)
 
(43,069
)
Schedule of Total Purchase Price
The total purchase price is as follows:
 
 
Purchase Consideration
Cash purchase price
 
$
107,293

Estimated working capital and other adjustments
 
970

   Fair value contingent consideration
 
16,862

Total purchase price
 
$
125,125

v3.10.0.1
Fair Value Measurements (Tables)
12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table details the fair value hierarchy of the Company's financial assets measured at fair value on a recurring basis as of December 31, 2018:
 
 
 
 
Fair Value Measurements Using:
Description
 
Fair Value
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
 
Cash Equivalents:
 
 
 
 
 
 
 
 
Money market funds
 
$
54,559

 
$
54,559

 
$

 
$

 
 
 
 
 
 
 
 
 
Investments:
 
Fair Value
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
U.S. government agency bonds
 
$
22,293

 
$

 
$
22,293

 
$

Corporate bonds and commercial paper
 
44,734

 

 
44,734

 

Certificates of deposit
 
1,952

 

 
1,952

 

 
 
$
68,979

 
$

 
$
68,979

 
$

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Other long-term liabilities:
 
Fair Value
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Contingent consideration
 
$
16,862

 
$

 
$

 
$
16,862


The following table details the fair value hierarchy of the Company's financial assets measured at fair value on a recurring basis as of December 31, 2017:
 
 
 
 
Fair Value Measurements Using:
Description
 
Fair Value
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
 
Cash Equivalents:
 
 
 
 
 
 
 
 
Money market funds
 
$
9,279

 
$
9,279

 
$

 
$

 
 
 
 
 
 
 
 
 
Investments:
 
Fair Value
 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
U.S. government agency bonds
 
$
16,194

 
$

 
$
16,194

 
$

Corporate bonds and commercial paper
 
15,815

 

 
15,815

 

Certificates of deposit
 
9,676

 

 
9,676

 

 
 
$
41,685

 
$

 
$
41,685

 
$

v3.10.0.1
Cash, Cash Equivalents and Investments (Tables)
12 Months Ended
Dec. 31, 2018
Cash and Cash Equivalents [Abstract]  
Summary of Cash, Cash Equivalents and Investments
A summary of the cash equivalents and investments as of December 31, 2018 is as follows:
Cash Equivalents:
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
Money market funds
 
$
54,559

 
$

 
$

 
$
54,559

Investments:
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
U.S. government agency bonds
 
$
22,330

 
$

 
$
(37
)
 
$
22,293

Corporate bonds and commercial paper
 
44,812

 

 
(78
)
 
44,734

Certificates of deposit
 
1,952

 

 

 
1,952

 
 
$
69,094

 
$

 
$
(115
)
 
$
68,979

A summary of the cash equivalents and investments as of December 31, 2017 is as follows:
Cash Equivalents:
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
Money market funds
 
$
9,279

 
$

 
$

 
$
9,279

Investments:
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
U.S. government agency bonds
 
$
16,277

 
$

 
$
(83
)
 
$
16,194

Corporate bonds and commercial paper
 
15,871

 

 
(56
)
 
15,815

Certificates of deposit
 
9,676

 

 

 
9,676

 
 
$
41,824

 
$

 
$
(139
)
 
$
41,685

Investments Classified by Contractual Maturity Date
The following table summarizes the estimated fair value of the Company's investments, designated as available-for-sale and classified by the contractual maturity date of the investments as of the dates shown:
 
 
December 31,
 
 
2018
 
2017
Due within one year or less
 
$
61,514

 
$
27,324

Due after one year through five years
 
7,465

 
14,361

 
 
$
68,979

 
$
41,685

Schedule of Fair Values and Gross Unrealized Losses for Available-for-sale Securities
The following table shows the fair values and the gross unrealized losses of these available-for-sale investments aggregated by investment category as of December 31, 2018:
 
 
Adjusted Cost
 
Gross Unrealized Loss
 
Fair Value
U.S. government agency bonds
 
$
22,330

 
$
(37
)
 
$
22,293

Corporate bonds and commercial paper
 
44,812

 
(78
)
 
44,734

 
 
$
67,142

 
$
(115
)
 
$
67,027


The following table shows the fair values and the gross unrealized losses of these available-for-sale investments aggregated by investment category as of December 31, 2017:
 
 
Adjusted Cost
 
Gross Unrealized Loss
 
Fair Value
U.S. government agency bonds
 
$
16,277

 
$
(83
)
 
$
16,194

Corporate bonds and commercial paper
 
15,871

 
(56
)
 
15,815

 
 
$
32,148

 
$
(139
)
 
$
32,009

v3.10.0.1
Deferred Solution and Other Costs (Tables)
12 Months Ended
Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of Deferred Solution and Other Costs
Deferred solution and other costs, current portion and net of current portion, consisted of the following:
 
 
December 31,
 
 
2018
 
2017
Deferred solution costs
 
$
7,142

 
$
6,505

Deferred commissions
 
3,359

 
2,741

Deferred solution and other costs, current portion
 
$
10,501

 
$
9,246

Deferred solution costs
 
$
6,625

 
$
5,291

Deferred commissions
 
10,136

 
7,682

Deferred solution and other costs, net of current portion
 
$
16,761

 
$
12,973

v3.10.0.1
Property and Equipment (Tables)
12 Months Ended
Dec. 31, 2018
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment
The estimated useful lives of property and equipment are as follows:
Computer hardware and equipment
 
3 - 5 years
Purchased software and licenses
 
3 - 5 years
Furniture and fixtures
 
7 years
Leasehold improvements
 
Lesser of estimated useful life or lease term
Property and equipment consisted of the following:
 
 
December 31,
 
 
2018
 
2017
Computer hardware and equipment
 
$
37,825

 
$
30,734

Purchased software and licenses
 
9,687

 
8,788

Furniture and fixtures
 
5,934

 
5,387

Leasehold improvements
 
13,054

 
13,470

 
 
66,500

 
58,379

Accumulated depreciation
 
(31,506
)
 
(23,835
)
Property and equipment, net
 
$
34,994

 
$
34,544

v3.10.0.1
Goodwill and Intangible Assets (Tables)
12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Intangible Assets
Intangible assets at December 31, 2018 and 2017 were as follows:
 
 
As of December 31, 2018
 
As of December 31, 2017
 
 
Gross Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Amount
 
Accumulated Amortization
 
Net Carrying Amount
Customer relationships
 
$
10,640

 
$
(2,148
)
 
$
8,492

 
$
3,130

 
$
(1,294
)
 
$
1,836

Non-compete agreements
 
2,064

 
(668
)
 
1,396

 
884

 
(451
)
 
433

Trademarks
 
11,935

 
(2,350
)
 
9,585

 
2,140

 
(1,724
)
 
416

Acquired technology
 
53,183

 
(12,030
)
 
41,153

 
13,293

 
(7,464
)
 
5,829

Assembled workforce
 
79

 
(51
)
 
28

 
121

 
(38
)
 
83

Capitalized software development costs
 
3,975

 
(1,333
)
 
2,642

 
3,975

 
(538
)
 
3,437

 
 
$
81,876

 
$
(18,580
)
 
$
63,296

 
$
23,543

 
$
(11,509
)
 
$
12,034

Schedule of Useful Life
The estimated useful lives and weighted average amortization periods for intangible assets at December 31, 2018 are as follows (in years):
 
 
Estimated Useful Life
 
Weighted Average Amortization Period
Customer relationships
 
3 - 6
 
4.5
Non-compete agreements
 
2 - 5
 
4.3
Trademarks
 
2 - 10
 
9.8
Acquired technology
 
3 - 7
 
6.3
Assembled workforce
 
3
 
1.0
Capitalized software development costs
 
5
 
3.4
Total
 
 
 
6.4
Estimated Future Amortization Expense
The estimated future amortization expense related to intangible assets as of December 31, 2018 was as follows:
 
 
Amortization
Year Ended December 31,
 
 
2019
 
$
12,159

2020
 
11,053

2021
 
9,919

2022
 
9,023

2023
 
8,295

Thereafter
 
12,847

Total amortization
 
$
63,296

v3.10.0.1
Accrued Liabilities (Tables)
12 Months Ended
Dec. 31, 2018
Payables and Accruals [Abstract]  
Schedule of Accrued Liabilities
Accrued liabilities consisted of the following:
 
 
December 31,
 
 
2018
 
2017
Accrued data center equipment and software purchases
 
$
81

 
$
4,410

Accrued transaction processing fees
 
2,911

 
1,687

Accrued professional services
 
1,382

 
1,419

Deferred rent
 
1,260

 
1,197

Other
 
3,695

 
1,849

 
 
$
9,329

 
$
10,562

v3.10.0.1
Commitments and Contingencies (Tables)
12 Months Ended
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Future Minimum Rental Payments for Operating Leases
Future minimum payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year at December 31, 2018 were as follows:
 
 
Operating Leases
Year Ended December 31,
 
 
2019
 
$
7,230

2020
 
6,507

2021
 
5,184

2022
 
4,702

2023
 
4,437

Thereafter
 
16,721

Total minimum lease payments
 
$
44,781

Schedule of Future Minimum Contractual Commitments
The estimated amounts for usage and other factors are not included within the table below. Future minimum contractual commitments that have initial or remaining non-cancelable terms in excess of one year were as follows:
 
 
Contractual Commitments
Year Ended December 31,
 
 
2019
 
$
16,927

2020
 
13,713

2021
 
12,173

2022
 
12,136

2023 and thereafter
 
239,325

Total commitments
 
$
294,274

v3.10.0.1
Convertible Senior Notes (Tables)
12 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Summary of Convertible Notes
The Convertible Notes consist of the following:
 
 
As of December 31, 2018
Liability component:
 
 
Principal
 
$
230,000

Unamortized debt discount
 
(42,790
)
Unamortized debt issuance costs
 
(4,487
)
Net carrying amount
 
182,723

 
 
 
Equity component 
 
 
Net allocation of proceeds
 
31,116

Net issuance costs
 
(1,517
)
Net carrying amount
 
$
29,599

Summary of Interest Expense
The following table sets forth total interest expense recognized related to the Convertible Notes:
 
 
As of December 31, 2018
Contractual interest expense
 
$
1,482

Amortization of debt issuance costs
 
829

Amortization of debt discount
 
7,646

Total
 
$
9,957

v3.10.0.1
Stock-Based Compensation (Tables)
12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of Share-based Payment Award Assumptions for Estimating Fair Value of Stock Option Grants
The following summarizes the assumptions used for estimating the fair value of stock options granted during the periods indicated:
 
 
Year Ended December 31,
 
 
2018
 
2017
 
2016
Risk-free interest rate
 
2.6%
 
1.7 - 2.1%
 
1.0 - 1.8%
Expected life (in years)
 
4.8
 
4.8
 
3.8 - 4.8
Expected volatility
 
41.0%
 
41.5 - 43.1%
 
43.9 - 46.5%
Dividend yield
 
 
 
Weighted-average grant date fair value per share          
 
$18.14
 
$14.17
 
$9.32
Schedule of Share-based Compensation, Stock Options, Activity
Stock option activity was as follows:
 
 
Number of
Options
 
Weighted Average
Exercise Price
Balance as of January 1, 2016
 
5,044

 
$
8.84

Granted
 
892

 
23.49

Exercised
 
(1,379
)
 
4.57

Forfeited
 
(123
)
 
16.08

Balance as of December 31, 2016
 
4,434

 
12.91

Granted
 
643

 
36.44

Exercised
 
(1,205
)
 
10.07

Forfeited
 
(180
)
 
19.15

Balance as of December 31, 2017
 
3,692

 
17.63

Granted
 
12

 
47.00

Exercised
 
(1,038
)
 
10.07

Forfeited
 
(12
)
 
27.93

Balance as of December 31, 2018
 
2,654

 
$
19.72

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range
The summary of stock options outstanding as of December 31, 2018 is as follows:
 
 
Options Outstanding
 
Options Exercisable
Range of Exercise Prices
 
Number of
Options
 
Weighted Average
Exercise Price
 
Weighted Average
Remaining
Contractual Life
(in years)
 
Number of
Options
 
Weighted Average
Exercise Price
 
Weighted Average
Remaining Contractual Life
(in years)
$0.84 - $5.05
 
237

 
$
2.46

 
2.6
 
237

 
$
2.46

 
2.6
$5.93 - $13.00
 
744

 
8.52

 
2.0
 
744

 
8.52

 
2.0
$15.07 - $24.33
 
720

 
18.67

 
3.5
 
591

 
18.46

 
3.3
$24.89 - $39.75
 
875

 
32.73

 
4.9
 
392

 
32.60

 
4.8
$41.90 - $47.00
 
78

 
42.66

 
5.9
 
20

 
41.90

 
5.8
 
 
2,654

 
$
19.72

 
3.5
 
1,984

 
$
15.86

 
3.1
Schedule of Restricted Stock Units Activity
Restricted stock unit activity was as follows:
 
 
Number of
Shares
 
Weighted Average
Grant Date Fair Value
Nonvested as of January 1, 2016
 
716

 
$
26.19

Granted
 
751

 
25.55

Vested
 
(171
)
 
26.00

Forfeited
 
(86
)
 
25.54

Nonvested as of December 31, 2016
 
1,210

 
25.87

Granted
 
939

 
38.58

Vested
 
(349
)
 
26.35

Forfeited
 
(120
)
 
28.94

Nonvested as of December 31, 2017
 
1,680

 
32.65

Granted
 
910

 
55.60

Vested
 
(537
)
 
31.68

Forfeited
 
(116
)
 
35.96

Nonvested as of December 31, 2018
 
1,937

 
$
43.50

Schedule of Market Unit Activity
Market stock unit activity was as follows:
 
 
Number of Shares
 
Weighted Average Grant Date Fair Value
Nonvested as of January 1, 2018
 

 

Granted
 
260

 
21.98

Vested
 

 

Forfeited
 

 

Nonvested as of December 31, 2018
 
260

 
$
21.98

v3.10.0.1
Provision for Income Taxes (Tables)
12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Schedule of U.S. and Non-U.S. Components of Loss Before Income Taxes
The U.S. and non-U.S. components of loss before income taxes consisted of the following:
 
 
December 31,
 
 
2018
 
2017
U.S.
 
$
(39,360
)
 
$
(26,478
)
Non-U.S.
 
160

 

Loss before income taxes
 
$
(39,200
)
 
$
(26,478
)
Schedule of Components of Provision for Income Taxes
The components of the Company's (benefit from) provision for income taxes consisted of the following:
 
 
Year Ended December 31,
 
 
2018
 
2017
 
2016
Current taxes:
 
 
 
 
 
 
Federal
 
$

 
$
(100
)
 
$

Foreign
 
83

 
62

 
33

State
 
69

 
74

 
112

Total current taxes
 
$
152

 
$
36

 
$
145

Deferred taxes:
 
 
 
 
 
 
Federal
 
$
(305
)
 
$
32

 
$
262

Change in valuation allowance - acquisitions
 
(2,970
)
 

 

Foreign
 
(2
)
 

 

State
 
(678
)
 
(382
)
 
20

Total deferred taxes
 
(3,955
)
 
(350
)
 
282

(Benefit from) provision for income taxes
 
$
(3,803
)
 
$
(314
)
 
$
427

Significant Components of Deferred Taxes
Significant components of the Company's deferred taxes consisted of the following:
 
 
December 31,
 
 
2018
 
2017
Deferred tax assets:
 
 
 
 
NOL and credit carryforwards
 
$
69,339

 
$
40,716

Deferred revenue
 
5,064

 
8,216

Accrued expenses and other
 
5,347

 
6,802

Stock-based compensation
 
5,494

 
4,615

Foreign
 
41

 

Total deferred tax assets
 
85,285

 
60,349

Deferred tax liabilities:
 
 
 
 
Deferred expenses
 
(6,717
)
 
(6,198
)
Convertible debt
 
(10,045
)
 

Depreciation and amortization
 
(12,830
)
 
(1,426
)
Capitalized software
 
(637
)
 

Total deferred tax liabilities
 
(30,229
)
 
(7,624
)
Deferred tax assets less tax liabilities
 
55,056

 
52,725

Less: valuation allowance
 
(53,936
)
 
(52,629
)
Net deferred tax asset
 
$
1,120

 
$
96

Schedule of Effective Income Tax Rate Reconciliation
The Company's benefit from (provision for) income taxes attributable to continuing operations differs from the expected tax benefit amount computed by applying the statutory federal income tax rate of 21% to income before taxes for the year ended December 31, 2018 and applying the statutory federal income tax rate of 34% to income before taxes for the years ended December 31, 2017, and 2016 primarily as a result of the following:
 
 
Year Ended December 31,
 
 
2018
 
2017
 
2016
Income tax at U.S. statutory rate
 
21.0
 %
 
34.0
 %
 
34.0
 %
Effect of:
 
 
 
 
 
 
Increase in deferred tax valuation allowance
 
(50.6
)
 
(77.1
)
 
(36.3
)
Stock compensation
 
21.9

 
32.7

 

Acquisitions
 
5.9

 

 

R&D Credit
 
5.0

 
4.7

 

State taxes, net of federal benefit
 
7.6

 
6.2

 
1.7

Tax impact of federal law change
 

 
1.2

 

Other permanent items
 
(1.1
)
 
(0.5
)
 
(0.6
)
Income tax benefit (provision) effective rate
 
9.7
 %
 
1.2
 %
 
(1.2
)%
Schedule of Unrecognized Tax Benefits
The reconciliation of unrecognized tax benefits at the beginning and end of the year is as follows:
 
 
Gross unrecognized tax benefits
Balance at January 1, 2018
 
$

Gross increase related to acquisitions
 
293

Balance at December 31, 2018
 
$
293

v3.10.0.1
Selected Quarterly Financial Data (unaudited) (Tables)
12 Months Ended
Dec. 31, 2018
Quarterly Financial Information Disclosure [Abstract]  
Schedule of Quarterly Financial Data
Selected summarized quarterly financial information for the years ended 2018 and 2017 is as follows:
 
 
Three Months Ended
 
 
March 31, 2017
 
June 30, 2017
 
September 30, 2017
 
December 31, 2017
 
March 31, 2018
 
June 30, 2018
 
September 30, 2018
 
December 31, 2018
Revenues
 
$
44,534

 
$
47,625

 
$
50,116

 
$
51,703

 
$
54,808

 
$
58,574

 
$
60,541

 
$
67,177

Cost of revenues
 
22,772

 
24,328

 
25,813

 
26,572

 
26,977

 
29,303

 
30,140

 
35,435

Gross profit
 
21,762

 
23,297

 
24,303

 
25,131

 
27,831

 
29,271

 
30,401

 
31,742

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales and marketing
 
9,878

 
11,096

 
9,904

 
10,292

 
10,966

 
12,108

 
11,467

 
13,583

Research and development
 
9,651

 
9,922

 
10,092

 
10,673

 
11,157

 
11,756

 
12,904

 
15,517

General and administrative
 
8,452

 
9,268

 
9,596

 
9,863

 
10,296

 
10,798

 
11,237

 
12,659

Acquisition related costs
 
348

 
351

 
270

 
263

 
256

 
258

 
1,811

 
1,820

Amortization of acquired intangibles
 
371

 
373

 
369

 
368

 
368

 
368

 
251

 
857

Unoccupied lease charges
 

 

 

 

 

 
658

 

 

Total operating expenses
 
28,700

 
31,010

 
30,231

 
31,459

 
33,043

 
35,946

 
37,670

 
44,436

Loss from operations
 
(6,938
)
 
(7,713
)
 
(5,928
)
 
(6,328
)
 
(5,212
)
 
(6,675
)
 
(7,269
)
 
(12,694
)
Total other income (expense), net
 
34

 
109

 
149

 
137

 
(1,023
)
 
(2,105
)
 
(1,877
)
 
(2,345
)
Loss before income taxes
 
(6,904
)
 
(7,604
)
 
(5,779
)
 
(6,191
)
 
(6,235
)
 
(8,780
)
 
(9,146
)
 
(15,039
)
Benefit from (provision for) income taxes
 
(136
)
 
(217
)
 
(3
)
 
670

 
187

 
153

 
287

 
3,176

Net loss
 
$
(7,040
)
 
$
(7,821
)
 
$
(5,782
)
 
$
(5,521
)
 
$
(6,048
)
 
$
(8,627
)
 
$
(8,859
)
 
$
(11,863
)
Net loss per common share, basic and diluted
 
$
(0.17
)
 
$
(0.19
)
 
$
(0.14
)
 
$
(0.13
)
 
$
(0.14
)
 
$
(0.20
)
 
$
(0.21
)
 
$
(0.27
)



v3.10.0.1
Organization and Description of Business (Details)
Dec. 31, 2018
Q2 Software, Inc.  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Ownership percentage 100.00%
v3.10.0.1
Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Allowance for Doubtful Accounts Receivable [Roll Forward]      
Beginning Balance $ 226 $ 228 $ 212
Additions 508 683 488
Deductions (367) (685) (472)
Ending Balance $ 367 $ 226 $ 228
v3.10.0.1
Summary of Significant Accounting Policies - Narrative (Details) - USD ($)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Oct. 15, 2018
Feb. 28, 2018
Accounting Policies [Abstract]          
Unbilled receivables $ 3,200,000 $ 2,100,000      
Capitalized software development costs 0 1,000,000 $ 2,700,000    
Amortization of capitalized software development costs 800,000 500,000      
Advertising costs 1,500,000 $ 700,000 $ 300,000    
Debt Instrument [Line Items]          
Warrant strike price (usd per share)         $ 78.75
Cloud Lending, Inc.          
Debt Instrument [Line Items]          
Fair value of contingent earn-out payments       $ 59,500,000  
Fair value contingent consideration       $ 16,862,000  
Other Noncurrent Liabilities | Cloud Lending, Inc.          
Debt Instrument [Line Items]          
Fair value contingent consideration $ 16,900,000        
Convertible Senior Notes Due February 2023 | Convertible Debt          
Debt Instrument [Line Items]          
Principal amount         $ 230,000,000.0
Conversion price (usd per share)         $ 57.38
v3.10.0.1
Summary of Significant Accounting Policies - Deferred Revenue (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]      
Revenue recognized that was included in the contract liability balance $ 37,000    
Decrease in deferred revenue (4,454) $ (4,837) $ (9,593)
Cash received in advance and not recognized as revenue 47,900    
Accounting Standards Update 2014-09 | ASC 606 Adjustments      
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]      
Decrease in deferred revenue $ 12,000    
v3.10.0.1
Summary of Significant Accounting Policies - Performance Obligations (Details)
$ in Millions
Dec. 31, 2018
USD ($)
Accounting Policies [Abstract]  
Revenue from remaining performance obligations $ 872.2
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, percentage 48.00%
Performance obligations expected to be satisfied, expected timing 24 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, percentage 41.00%
Performance obligations expected to be satisfied, expected timing 24 months
v3.10.0.1
Summary of Significant Accounting Policies - Deferred Implementation Costs, Deferred Solution and Other Costs (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Minimum    
Capitalized Contract Cost [Line Items]    
Expected period of customer benefit 5 years  
Maximum    
Capitalized Contract Cost [Line Items]    
Expected period of customer benefit 7 years  
Deferred Implementation Costs    
Capitalized Contract Cost [Line Items]    
Capitalization of implementation costs $ 7.3 $ 5.2
Amortization of capitalized implementation costs 4.7 4.4
Deferred Commissions    
Capitalized Contract Cost [Line Items]    
Capitalization of implementation costs 6.7 4.6
Amortization of capitalized implementation costs $ 3.6 $ 3.1
v3.10.0.1
Summary of Significant Accounting Policies - Schedule of Useful Lives of Property and Equipment (Details)
12 Months Ended
Dec. 31, 2018
Computer hardware and equipment | Minimum  
Property, Plant and Equipment [Line Items]  
Estimated useful life 3 years
Computer hardware and equipment | Maximum  
Property, Plant and Equipment [Line Items]  
Estimated useful life 5 years
Purchased software and licenses | Minimum  
Property, Plant and Equipment [Line Items]  
Estimated useful life 3 years
Purchased software and licenses | Maximum  
Property, Plant and Equipment [Line Items]  
Estimated useful life 5 years
Furniture and fixtures  
Property, Plant and Equipment [Line Items]  
Estimated useful life 7 years
v3.10.0.1
Summary of Significant Accounting Policies - Disaggregation of Revenues by Major Source (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Disaggregation of Revenue [Line Items]                      
Total Revenues $ 67,177 $ 60,541 $ 58,574 $ 54,808 $ 51,703 $ 50,116 $ 47,625 $ 44,534 $ 241,100 $ 193,978 $ 150,224
Subscription                      
Disaggregation of Revenue [Line Items]                      
Total Revenues                 168,226    
Transactional                      
Disaggregation of Revenue [Line Items]                      
Total Revenues                 39,232    
Services and Other                      
Disaggregation of Revenue [Line Items]                      
Total Revenues                 $ 33,642    
v3.10.0.1
Summary of Significant Accounting Policies - Services and Other Revenues (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Technology Services, Other      
Revenue from External Customer [Line Items]      
Revenues $ 1.7 $ 1.5 $ 1.5
v3.10.0.1
Summary of Significant Accounting Policies - Stock-Based Compensation (Details)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Dividend yield 0.00% 0.00% 0.00%
Stock Options      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting period 36 months    
Stock Options | Tranche One      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting rights (percentage) 25.00%    
Award vesting period 1 year    
Restricted Stock Units (RSUs)      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting period 4 years    
Restricted Stock Units (RSUs) | Tranche One      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting rights (percentage) 25.00%    
Restricted Stock Units (RSUs) | Tranche Two      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting rights (percentage) 25.00%    
Restricted Stock Units (RSUs) | Tranche Three      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting rights (percentage) 25.00%    
Restricted Stock Units (RSUs) | Tranche Four      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting rights (percentage) 25.00%    
Market Stock Units      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting period 3 years    
Dividend yield 0.00%    
Market Stock Units | Tranche One      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting rights (percentage) 33.00%    
Market Stock Units | Tranche Two      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting rights (percentage) 33.00%    
Market Stock Units | Tranche Three      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting rights (percentage) 200.00%    
v3.10.0.1
Summary of Significant Accounting Policies - Summary of Basic and Diluted Net Loss per Common Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Earnings Per Share, Basic and Diluted [Abstract]                      
Net loss $ (11,863) $ (8,859) $ (8,627) $ (6,048) $ (5,521) $ (5,782) $ (7,821) $ (7,040) $ (35,397) $ (26,164) $ (36,354)
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract]                      
Weighted-average common shares outstanding, basic and diluted (in shares)                 42,797 41,218 39,649
Net loss per common share, basic and diluted (usd per share) $ (0.27) $ (0.21) $ (0.20) $ (0.14) $ (0.13) $ (0.14) $ (0.19) $ (0.17) $ (0.83) $ (0.63) $ (0.92)
Stock options, restricted stock units, and market stock units                      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                      
Antidilutive securities excluded from computation of earnings per share (in shares)                 4,851 5,372 5,643
v3.10.0.1
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Jan. 01, 2019
Jan. 01, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Positive adjustment to opening balance of accumulated deficit $ (172,422) $ (152,114)     $ (136,272)
Increase in net cash flow from adoption of new accounting guidance 49,880 4,088 $ (12,176)    
Accounting Standards Update 2014-09 | ASC 606 Adjustments          
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Positive adjustment to opening balance of accumulated deficit 25,205       $ 15,842
Accounting Standards Update 2016-18          
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Increase in net cash flow from adoption of new accounting guidance $ 1,800 $ 2,300 $ 1,300    
Forecast | Minimum | Accounting Standards Update 2016-02          
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Right-of-use asset, operating lease       $ 26,000  
Operating lease liability       35,000  
Forecast | Maximum | Accounting Standards Update 2016-02          
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]          
Right-of-use asset, operating lease       28,000  
Operating lease liability       $ 37,000  
v3.10.0.1
Summary of Significant Accounting Policies - Schedule of Cumulative Effects of New Revenue Standard on Balance Sheet (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Assets      
Contract assets, current portion $ 598 $ 517 $ 0
Deferred solution and other costs, current portion 10,501 9,310 9,246
Deferred solution and other costs, net of current portion 16,761 13,238 12,973
Deferred implementation costs, net of current portion 9,948 8,202 8,295
Contract assets, net of current portion 10,272 4,541 0
Liabilities      
Accrued compensation 12,652 10,940 11,511
Deferred revenues, current portion 42,531 36,576 38,379
Deferred revenues, net of current portion 23,063 20,115 28,289
Stockholders' equity:      
Accumulated deficit (172,422) (136,272) (152,114)
Before ASC 606      
Assets      
Contract assets, current portion 0   0
Deferred solution and other costs, current portion 10,240   9,246
Deferred solution and other costs, net of current portion 15,532   12,973
Deferred implementation costs, net of current portion 10,188   8,295
Contract assets, net of current portion 0   0
Liabilities      
Accrued compensation 13,404   11,511
Deferred revenues, current portion 53,608   38,379
Deferred revenues, net of current portion 23,945   28,289
Stockholders' equity:      
Accumulated deficit (197,627)   $ (152,114)
ASC 606 Adjustments | Accounting Standards Update 2014-09      
Assets      
Contract assets, current portion 598 517  
Deferred solution and other costs, current portion 261 64  
Deferred solution and other costs, net of current portion 1,229 265  
Deferred implementation costs, net of current portion (240) (93)  
Contract assets, net of current portion 10,272 4,541  
Liabilities      
Accrued compensation (752) (571)  
Deferred revenues, current portion (11,077) (1,803)  
Deferred revenues, net of current portion (882) (8,174)  
Stockholders' equity:      
Accumulated deficit $ 25,205 $ 15,842  
v3.10.0.1
Summary of Significant Accounting Policies - Schedule of Impact of New Revenue Standard on Statement of Comprehensive Loss (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]                      
Revenues $ 67,177 $ 60,541 $ 58,574 $ 54,808 $ 51,703 $ 50,116 $ 47,625 $ 44,534 $ 241,100 $ 193,978 $ 150,224
Costs and expenses                      
Cost of revenues 35,435 30,140 29,303 26,977 26,572 25,813 24,328 22,772 121,855 [1] 99,485 [1] 77,429 [1]
Sales and marketing 13,583 11,467 12,108 10,966 10,292 9,904 11,096 9,878 48,124 [1] 41,170 [1] 36,284 [1]
Interest and other income                 2,811 553 358
Net loss $ (11,863) $ (8,859) $ (8,627) $ (6,048) $ (5,521) $ (5,782) $ (7,821) $ (7,040) $ (35,397) $ (26,164) $ (36,354)
Net loss per common share, basic and diluted (usd per share) $ (0.27) $ (0.21) $ (0.20) $ (0.14) $ (0.13) $ (0.14) $ (0.19) $ (0.17) $ (0.83) $ (0.63) $ (0.92)
Before ASC 606                      
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]                      
Revenues                 $ 233,443    
Costs and expenses                      
Cost of revenues                 122,121    
Sales and marketing                 49,429    
Interest and other income                 2,676    
Net loss                 $ (44,760)    
Net loss per common share, basic and diluted (usd per share)                 $ (1.05)    
ASC 606 Adjustments | Accounting Standards Update 2014-09                      
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]                      
Revenues                 $ 7,657    
Costs and expenses                      
Cost of revenues                 (266)    
Sales and marketing                 (1,305)    
Interest and other income                 135    
Net loss                 $ 9,363    
Net loss per common share, basic and diluted (usd per share)                 $ 0.22    
[1] Includes stock-based compensation expenses as follows: Year Ended December 31, 2018 2017 2016Cost of revenues $4,773 $3,729 $2,043Sales and marketing 5,837 3,243 2,231Research and development 6,852 4,464 2,934General and administrative 11,758 9,503 5,432Total stock-based compensation expenses $29,220 $20,939 $12,640
v3.10.0.1
Summary of Significant Accounting Policies - Schedule of Impact of New Revenue Standard on Balance Sheet (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Assets      
Contract assets, current portion $ 598 $ 517 $ 0
Deferred solution and other costs, current portion 10,501 9,310 9,246
Deferred implementation costs, current portion 4,427   3,562
Deferred solution and other costs, net of current portion 16,761 13,238 12,973
Deferred implementation costs, net of current portion 9,948 8,202 8,295
Contract assets, net of current portion 10,272 4,541 0
Liabilities      
Accrued compensation 12,652 10,940 11,511
Deferred revenues, current portion 42,531 36,576 38,379
Deferred revenues, net of current portion 23,063 20,115 28,289
Stockholders' equity:      
Accumulated deficit (172,422) (136,272) (152,114)
Before ASC 606      
Assets      
Contract assets, current portion 0   0
Deferred solution and other costs, current portion 10,240   9,246
Deferred implementation costs, current portion 4,053    
Deferred solution and other costs, net of current portion 15,532   12,973
Deferred implementation costs, net of current portion 10,188   8,295
Contract assets, net of current portion 0   0
Liabilities      
Accrued compensation 13,404   11,511
Deferred revenues, current portion 53,608   38,379
Deferred revenues, net of current portion 23,945   28,289
Stockholders' equity:      
Accumulated deficit (197,627)   $ (152,114)
Accounting Standards Update 2014-09 | ASC 606 Adjustments      
Assets      
Contract assets, current portion 598 517  
Deferred solution and other costs, current portion 261 64  
Deferred implementation costs, current portion 374    
Deferred solution and other costs, net of current portion 1,229 265  
Deferred implementation costs, net of current portion (240) (93)  
Contract assets, net of current portion 10,272 4,541  
Liabilities      
Accrued compensation (752) (571)  
Deferred revenues, current portion (11,077) (1,803)  
Deferred revenues, net of current portion (882) (8,174)  
Stockholders' equity:      
Accumulated deficit $ 25,205 $ 15,842  
v3.10.0.1
Business Combinations and Asset Acquisitions - Narrative (Details) - USD ($)
$ in Thousands
1 Months Ended 12 Months Ended
Nov. 30, 2018
Oct. 15, 2018
Jan. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Business Acquisition [Line Items]          
Estimated Useful Lives       6 years 5 months 6 days  
Payments to acquire assets from existing balances     $ 1,500    
Hold-back payable     200    
Acquired Technology and Assembled Workforce          
Business Acquisition [Line Items]          
Intangible assets acquired     $ 1,500    
Estimated useful life     3 years    
Increase in deferred tax liabilities related to intangible assets     $ 300    
Minimum          
Business Acquisition [Line Items]          
Estimated useful life       2 years  
Maximum          
Business Acquisition [Line Items]          
Estimated useful life       10 years  
Gro Solutions          
Business Acquisition [Line Items]          
Cash payment to acquire business from existing balances $ 25,500        
Initial consideration deposited in escrow $ 400        
Compensation expense       $ 100  
Acquisition related transaction costs       500  
Gro Solutions | Minimum          
Business Acquisition [Line Items]          
Estimated Useful Lives 2 years        
Gro Solutions | Maximum          
Business Acquisition [Line Items]          
Estimated Useful Lives 5 years        
Cloud Lending, Inc.          
Business Acquisition [Line Items]          
Cash payment to acquire business from existing balances   $ 107,293      
Initial consideration deposited in escrow   10,500      
Compensation expense   300      
Acquisition related transaction costs       2,600  
Fair value of contingent earn-out payments   59,500      
Fair value contingent consideration   $ 16,862      
Cloud Lending, Inc. | Other Noncurrent Liabilities          
Business Acquisition [Line Items]          
Fair value contingent consideration       16,900  
Cloud Lending, Inc. | Minimum          
Business Acquisition [Line Items]          
Estimated Useful Lives   5 years      
Cloud Lending, Inc. | Maximum          
Business Acquisition [Line Items]          
Estimated Useful Lives   10 years      
Centrix Solutions, Inc.          
Business Acquisition [Line Items]          
Compensation expense       600 $ 1,100
Milestone and retention bonuses       $ 1,000 7,200
Social Money          
Business Acquisition [Line Items]          
Milestone and retention bonuses         200
Release of hold-back deposit         $ 2,500
v3.10.0.1
Business Combinations and Asset Acquisitions - Purchase Price Allocation (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Nov. 30, 2018
Oct. 15, 2018
Dec. 31, 2017
Assets acquired:        
Intangible assets, net $ 63,296     $ 12,034
Goodwill $ 107,907     $ 12,876
Gro Solutions        
Assets acquired:        
Cash   $ 2,116    
Accounts receivable, net   335    
Prepaid expenses and other current assets   139    
Property and equipment, net   22    
Other long-term assets   35    
Intangible assets, net   8,275    
Goodwill   17,828    
Total assets acquired   28,750    
Liabilities assumed:        
Accounts payable, accrued liabilities, and accrued compensation   2,058    
Deferred revenues   1,200    
Total liabilities assumed   3,258    
Fair value of assets acquired and liabilities assumed   $ 25,492    
Cloud Lending, Inc.        
Assets acquired:        
Cash     $ 796  
Accounts receivable, net     1,311  
Prepaid expenses and other current assets     4,704  
Property and equipment, net     101  
Other long-term assets     167  
Intangible assets, net     50,100  
Goodwill     77,203  
Total assets acquired     134,382  
Liabilities assumed:        
Accounts payable, accrued liabilities, and accrued compensation     6,007  
Deferred revenues     3,250  
Total liabilities assumed     9,257  
Fair value of assets acquired and liabilities assumed     $ 125,125  
v3.10.0.1
Business Combinations and Asset Acquisitions - Finite-Lived Intangible Assets Acquired and Estimated Useful Lives (Details) - USD ($)
$ in Thousands
12 Months Ended
Nov. 30, 2018
Oct. 15, 2018
Dec. 31, 2018
Business Acquisition [Line Items]      
Estimated Useful Lives     6 years 5 months 6 days
Gro Solutions      
Business Acquisition [Line Items]      
Estimated Fair Values $ 8,275    
Cloud Lending, Inc.      
Business Acquisition [Line Items]      
Estimated Fair Values   $ 50,100  
Customer Relationships      
Business Acquisition [Line Items]      
Estimated Useful Lives     4 years 6 months 6 days
Customer Relationships | Gro Solutions      
Business Acquisition [Line Items]      
Estimated Fair Values $ 265    
Estimated Useful Lives 3 years    
Customer Relationships | Cloud Lending, Inc.      
Business Acquisition [Line Items]      
Estimated Fair Values   $ 7,245  
Estimated Useful Lives   5 years  
Trademark      
Business Acquisition [Line Items]      
Estimated Useful Lives     9 years 9 months 6 days
Trademark | Gro Solutions      
Business Acquisition [Line Items]      
Estimated Fair Values $ 270    
Estimated Useful Lives 2 years    
Trademark | Cloud Lending, Inc.      
Business Acquisition [Line Items]      
Estimated Fair Values   $ 9,525  
Estimated Useful Lives   10 years  
Non-compete agreements      
Business Acquisition [Line Items]      
Estimated Useful Lives     4 years 4 months 6 days
Non-compete agreements | Gro Solutions      
Business Acquisition [Line Items]      
Estimated Fair Values $ 210    
Estimated Useful Lives 5 years    
Non-compete agreements | Cloud Lending, Inc.      
Business Acquisition [Line Items]      
Estimated Fair Values   $ 970  
Estimated Useful Lives   5 years  
Acquired technology      
Business Acquisition [Line Items]      
Estimated Useful Lives     6 years 4 months 6 days
Acquired technology | Gro Solutions      
Business Acquisition [Line Items]      
Estimated Fair Values $ 7,530    
Estimated Useful Lives 5 years    
Acquired technology | Cloud Lending, Inc.      
Business Acquisition [Line Items]      
Estimated Fair Values   $ 32,360  
Estimated Useful Lives   7 years  
v3.10.0.1
Business Combinations and Asset Acquisitions - Pro Forma Financial Information (Details) - Cloud Lending, Inc. - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Business Acquisition [Line Items]    
Total Revenues $ 252,541 $ 199,220
Net loss $ (49,033) $ (43,069)
v3.10.0.1
Business Combinations and Asset Acquisitions - Purchase Consideration (Details) - Cloud Lending, Inc.
$ in Thousands
Oct. 15, 2018
USD ($)
Business Acquisition [Line Items]  
Cash purchase price $ 107,293
Estimated working capital and other adjustments 970
Fair value contingent consideration 16,862
Total purchase price $ 125,125
v3.10.0.1
Fair Value Measurements (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Money market funds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents at fair value $ 54,559 $ 9,279
Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 68,979 41,685
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 0 0
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 68,979 41,685
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 0 0
Fair Value, Measurements, Recurring | Contingent Consideration    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial and non-financial liabilities at fair value 16,862  
Fair Value, Measurements, Recurring | Contingent Consideration | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial and non-financial liabilities at fair value 0  
Fair Value, Measurements, Recurring | Contingent Consideration | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial and non-financial liabilities at fair value 0  
Fair Value, Measurements, Recurring | Contingent Consideration | Significant Unobservable Inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Financial and non-financial liabilities at fair value 16,862  
Fair Value, Measurements, Recurring | U.S. government agency bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 22,293 16,194
Fair Value, Measurements, Recurring | U.S. government agency bonds | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 0 0
Fair Value, Measurements, Recurring | U.S. government agency bonds | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 22,293 16,194
Fair Value, Measurements, Recurring | U.S. government agency bonds | Significant Unobservable Inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 0 0
Fair Value, Measurements, Recurring | Corporate bonds and commercial paper    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 44,734 15,815
Fair Value, Measurements, Recurring | Corporate bonds and commercial paper | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 0 0
Fair Value, Measurements, Recurring | Corporate bonds and commercial paper | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 44,734 15,815
Fair Value, Measurements, Recurring | Corporate bonds and commercial paper | Significant Unobservable Inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 0 0
Fair Value, Measurements, Recurring | Certificates of deposit    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 1,952 9,676
Fair Value, Measurements, Recurring | Certificates of deposit | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 0 0
Fair Value, Measurements, Recurring | Certificates of deposit | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 1,952 9,676
Fair Value, Measurements, Recurring | Certificates of deposit | Significant Unobservable Inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments at fair value 0 0
Fair Value, Measurements, Recurring | Money market funds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents at fair value 54,559 9,279
Fair Value, Measurements, Recurring | Money market funds | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents at fair value 54,559 9,279
Fair Value, Measurements, Recurring | Money market funds | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents at fair value 0 0
Fair Value, Measurements, Recurring | Money market funds | Significant Unobservable Inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents at fair value $ 0 $ 0
v3.10.0.1
Cash, Cash Equivalents and Investments - Summary of Cash, Cash Equivalents and Investments (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Debt Securities, Available-for-sale [Line Items]      
Cash equivalents, amortized cost $ 108,341 $ 57,961 $ 54,873
Investments, amortized cost 69,094 41,824  
Gross unrealized gains 0 0  
Gross unrealized losses (115) (139)  
Investments, fair value 68,979 41,685  
U.S. government agency bonds      
Debt Securities, Available-for-sale [Line Items]      
Investments, amortized cost 22,330 16,277  
Gross unrealized gains 0 0  
Gross unrealized losses (37) (83)  
Investments, fair value 22,293 16,194  
Corporate bonds and commercial paper      
Debt Securities, Available-for-sale [Line Items]      
Investments, amortized cost 44,812 15,871  
Gross unrealized gains 0 0  
Gross unrealized losses (78) (56)  
Investments, fair value 44,734 15,815  
Certificates of deposit      
Debt Securities, Available-for-sale [Line Items]      
Investments, amortized cost 1,952 9,676  
Gross unrealized gains 0 0  
Gross unrealized losses 0 0  
Investments, fair value 1,952 9,676  
Cash      
Debt Securities, Available-for-sale [Line Items]      
Cash equivalents, amortized cost 53,800 48,700  
Money market funds      
Debt Securities, Available-for-sale [Line Items]      
Cash equivalents, amortized cost 54,559 9,279  
Cash equivalents, fair value $ 54,559 $ 9,279  
v3.10.0.1
Cash, Cash Equivalents and Investments - Contractual Maturities (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Cash and Cash Equivalents [Abstract]    
Due within one year or less $ 61,514 $ 27,324
Due after one year through five years 7,465 14,361
Total $ 68,979 $ 41,685
v3.10.0.1
Cash, Cash Equivalents and Investments - Securities in Continuous Loss Position (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost $ 67,142 $ 32,148
Gross Unrealized Loss (115) (139)
Fair Value 67,027 32,009
U.S. government agency bonds    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost 22,330 16,277
Gross Unrealized Loss (37) (83)
Fair Value 22,293 16,194
Corporate bonds and commercial paper    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost 44,812 15,871
Gross Unrealized Loss (78) (56)
Fair Value $ 44,734 $ 15,815
v3.10.0.1
Deferred Solution and Other Costs (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]      
Deferred solution costs $ 7,142   $ 6,505
Deferred commissions 3,359   2,741
Deferred solution and other costs, current portion 10,501 $ 9,310 9,246
Deferred solution costs 6,625   5,291
Deferred commissions 10,136   7,682
Deferred solution and other costs, net of current portion $ 16,761 $ 13,238 $ 12,973
v3.10.0.1
Property and Equipment (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 66,500 $ 58,379  
Accumulated depreciation (31,506) (23,835)  
Property and equipment, net 34,994 34,544  
Depreciation and amortization 16,802 14,946 $ 12,199
Fixed Assets [Member]      
Property, Plant and Equipment [Line Items]      
Depreciation and amortization 9,700 9,200 $ 7,300
Computer hardware and equipment      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 37,825 30,734  
Purchased software and licenses      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 9,687 8,788  
Furniture and fixtures      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 5,934 5,387  
Leasehold improvements      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 13,054 $ 13,470  
v3.10.0.1
Goodwill and Intangible Assets - Narrative (Details)
3 Months Ended 12 Months Ended
Dec. 31, 2018
USD ($)
Sep. 30, 2018
USD ($)
Jun. 30, 2018
USD ($)
Mar. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Sep. 30, 2017
USD ($)
Jun. 30, 2017
USD ($)
Mar. 31, 2017
USD ($)
Dec. 31, 2018
USD ($)
operating_segment
reporting_unit
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Nov. 30, 2018
USD ($)
Oct. 15, 2018
USD ($)
Finite-Lived Intangible Assets [Line Items]                          
Goodwill $ 107,907,000       $ 12,876,000       $ 107,907,000 $ 12,876,000      
Number of operating segments | operating_segment                 1        
Number of reporting units | reporting_unit                 1        
Impairment of goodwill                 $ 0        
Amortization of acquired intangibles 857,000 $ 251,000 $ 368,000 $ 368,000 368,000 $ 369,000 $ 373,000 $ 371,000 1,844,000 1,481,000 $ 1,470,000    
Capitalized software and development costs 81,876,000       23,543,000       81,876,000 23,543,000      
Amortization of capitalized software development costs                 $ 800,000 500,000      
Capitalized software development costs                          
Finite-Lived Intangible Assets [Line Items]                          
Estimated useful life                 5 years        
Capitalized software and development costs $ 3,975,000       $ 3,975,000       $ 3,975,000 3,975,000      
Cost of revenues                          
Finite-Lived Intangible Assets [Line Items]                          
Amortization of acquired intangibles                 4,500,000 3,600,000      
Operating Expense                          
Finite-Lived Intangible Assets [Line Items]                          
Amortization of acquired intangibles                 $ 1,800,000 $ 1,500,000      
Minimum                          
Finite-Lived Intangible Assets [Line Items]                          
Estimated useful life                 2 years        
Maximum                          
Finite-Lived Intangible Assets [Line Items]                          
Estimated useful life                 10 years        
Maximum | Capitalized software development costs                          
Finite-Lived Intangible Assets [Line Items]                          
Estimated useful life                 5 years        
Cloud Lending, Inc.                          
Finite-Lived Intangible Assets [Line Items]                          
Goodwill                         $ 77,203,000
Gro Solutions                          
Finite-Lived Intangible Assets [Line Items]                          
Goodwill                       $ 17,828,000  
v3.10.0.1
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]    
Gross Amount $ 81,876 $ 23,543
Accumulated Amortization (18,580) (11,509)
Net Carrying Amount 63,296 12,034
Customer Relationships    
Finite-Lived Intangible Assets [Line Items]    
Gross Amount 10,640 3,130
Accumulated Amortization (2,148) (1,294)
Net Carrying Amount 8,492 1,836
Non-compete agreements    
Finite-Lived Intangible Assets [Line Items]    
Gross Amount 2,064 884
Accumulated Amortization (668) (451)
Net Carrying Amount 1,396 433
Trademark    
Finite-Lived Intangible Assets [Line Items]    
Gross Amount 11,935 2,140
Accumulated Amortization (2,350) (1,724)
Net Carrying Amount 9,585 416
Acquired technology    
Finite-Lived Intangible Assets [Line Items]    
Gross Amount 53,183 13,293
Accumulated Amortization (12,030) (7,464)
Net Carrying Amount 41,153 5,829
Assembled workforce    
Finite-Lived Intangible Assets [Line Items]    
Gross Amount 79 121
Accumulated Amortization (51) (38)
Net Carrying Amount 28 83
Capitalized software development costs    
Finite-Lived Intangible Assets [Line Items]    
Gross Amount 3,975 3,975
Accumulated Amortization (1,333) (538)
Net Carrying Amount $ 2,642 $ 3,437
v3.10.0.1
Goodwill and Intangible Assets - Intangible Asset Useful Life (Details)
12 Months Ended
Dec. 31, 2018
Acquired Finite-Lived Intangible Assets [Line Items]  
Weighted Average Amortization Period 6 years 5 months 6 days
Customer Relationships  
Acquired Finite-Lived Intangible Assets [Line Items]  
Weighted Average Amortization Period 4 years 6 months 6 days
Non-compete agreements  
Acquired Finite-Lived Intangible Assets [Line Items]  
Weighted Average Amortization Period 4 years 4 months 6 days
Trademark  
Acquired Finite-Lived Intangible Assets [Line Items]  
Weighted Average Amortization Period 9 years 9 months 6 days
Acquired technology  
Acquired Finite-Lived Intangible Assets [Line Items]  
Weighted Average Amortization Period 6 years 4 months 6 days
Assembled workforce  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 3 years
Weighted Average Amortization Period 1 year 6 days
Capitalized software development costs  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 5 years
Weighted Average Amortization Period 3 years 5 months 6 days
Minimum  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 2 years
Minimum | Customer Relationships  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 3 years
Minimum | Non-compete agreements  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 2 years
Minimum | Trademark  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 2 years
Minimum | Acquired technology  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 3 years
Maximum  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 10 years
Maximum | Customer Relationships  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 6 years
Maximum | Non-compete agreements  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 5 years
Maximum | Trademark  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 10 years
Maximum | Acquired technology  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 7 years
Maximum | Capitalized software development costs  
Acquired Finite-Lived Intangible Assets [Line Items]  
Estimated Useful Life 5 years
v3.10.0.1
Goodwill and Intangible Assets - Estimated Amortization Expense (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]    
2019 $ 12,159  
2020 11,053  
2021 9,919  
2022 9,023  
2023 8,295  
Thereafter 12,847  
Net Carrying Amount $ 63,296 $ 12,034
v3.10.0.1
Accrued Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Payables and Accruals [Abstract]    
Accrued data center equipment and software purchases $ 81 $ 4,410
Accrued transaction processing fees 2,911 1,687
Accrued professional services 1,382 1,419
Deferred rent 1,260 1,197
Other 3,695 1,849
Total accrued liabilities $ 9,329 $ 10,562
v3.10.0.1
Debt (Details) - 2013 Secured Credit Facility - Wells Fargo
1 Months Ended 12 Months Ended
Apr. 11, 2017
USD ($)
Apr. 30, 2013
annual_installment
Dec. 31, 2018
USD ($)
Oct. 31, 2016
USD ($)
Mar. 31, 2016
USD ($)
Line of Credit          
Line of Credit Facility [Line Items]          
Line of credit facility, maximum borrowing capacity       $ 25,000,000.0 $ 25,000,000.0
Line of credit facility, increase to borrowing capacity (up to)         $ 25,000,000.0
Line of credit facility, maximum borrowing capacity as a percentage of the Company's trailing twelve-month recurring revenues         75.00%
Line of credit facility, initial closing fee, number of annual installments | annual_installment   3      
Period of repayment for initial closing fee on line of credit facility   3 years      
Payment of outstanding balance on credit facility $ 100,000        
Line of Credit | U.S. Federal Funds Rate          
Line of Credit Facility [Line Items]          
Basis spread on variable interest rate     1.00%    
Line of Credit | One Month LIBOR          
Line of Credit Facility [Line Items]          
Basis spread on variable interest rate     1.00%    
Letter of Credit          
Line of Credit Facility [Line Items]          
Secured letters of credit amount     $ 500,000    
v3.10.0.1
Commitments and Contingencies - Narrative (Details)
ft² in Thousands, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
USD ($)
Sep. 30, 2018
USD ($)
Jun. 30, 2018
USD ($)
Mar. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Sep. 30, 2017
USD ($)
Jun. 30, 2017
USD ($)
Mar. 31, 2017
USD ($)
Dec. 31, 2018
USD ($)
ft²
building
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Long-term Purchase Commitment [Line Items]                      
Number of buildings occupied | building                 2    
Unoccupied lease charges $ 0 $ 0 $ 658 $ 0 $ 0 $ 0 $ 0 $ 0 $ 658 $ 0 $ 33
Lease liability, non-current $ 200               200    
Monthly rent expense under operating lease                 $ 4,400 $ 4,400 $ 3,700
Lease One                      
Long-term Purchase Commitment [Line Items]                      
Leased square feet | ft²                 67    
Lease renewal term 5 years               5 years    
Lease Two                      
Long-term Purchase Commitment [Line Items]                      
Leased square feet | ft²                 129    
Lease renewal term 10 years               10 years    
v3.10.0.1
Commitments and Contingencies - Future Minimum Payments for Operating Leases (Details)
$ in Thousands
Dec. 31, 2018
USD ($)
Operating Leases  
2019 $ 7,230
2020 6,507
2021 5,184
2022 4,702
2023 4,437
Thereafter 16,721
Total minimum lease payments $ 44,781
v3.10.0.1
Commitments and Contingencies - Future Minimum Payments for Contractual Commitments (Details)
$ in Thousands
Dec. 31, 2018
USD ($)
Contractual Commitments  
2019 $ 16,927
2020 13,713
2021 12,173
2022 12,136
2023 239,325
Total commitments $ 294,274
v3.10.0.1
Convertible Senior Notes - Narrative (Details)
$ / shares in Units, shares in Millions
1 Months Ended 12 Months Ended
Feb. 28, 2018
USD ($)
day
$ / shares
shares
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Debt Instrument [Line Items]        
Total cost of bond hedge $ 41,700,000      
Number of warrants issued, subject to anti-dilution adjustments (in shares) | shares 4.0      
Warrant strike price (usd per share) | $ / shares $ 78.75      
Proceeds from warrants $ 22,400,000 $ 22,379,000 $ 0 $ 0
Convertible Debt | Convertible Senior Notes Due February 2023        
Debt Instrument [Line Items]        
Principal amount $ 230,000,000.0      
Interest rate 0.75%      
Initial conversion rate of common stock   0.0174292    
Conversion price (usd per share) | $ / shares $ 57.38      
Limitation on sale of common stock, sale price threshold, number of trading days | day 20      
Limitation on sale of common stock, sale price threshold, trading period | day 30      
Threshold percentage of stock price trigger 130.00%      
Number of consecutive business days   5 days    
Percentage of closing sale price in excess of convertible notes   98.00%    
Redemption price percentage 100.00%      
Effective interest rate for liability component 5.875%      
Issuance costs attributable to the liability component   $ 5,300,000    
Net issuance costs   $ 1,500,000    
Remaining discount and issuance costs amortization period   4 years 2 months 16 days    
Number of securities called by warrants (in shares) | shares 0.9      
v3.10.0.1
Convertible Senior Notes - Schedule of Convertible Notes (Details) - Convertible Debt - Convertible Senior Notes Due February 2023
$ in Thousands
Dec. 31, 2018
USD ($)
Liability component:  
Principal $ 230,000
Unamortized debt discount (42,790)
Unamortized debt issuance costs (4,487)
Net carrying amount 182,723
Equity component  
Net issuance costs (1,500)
Additional Paid-In Capital  
Equity component  
Net allocation of proceeds 31,116
Net issuance costs (1,517)
Net carrying amount $ 29,599
v3.10.0.1
Convertible Senior Notes - Schedule of Interest Expense (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Debt Instrument [Line Items]      
Amortization of debt issuance costs $ 829 $ 28 $ 96
Amortization of debt discount 7,646 $ 0 $ 0
Convertible Senior Notes Due February 2023 | Convertible Debt      
Debt Instrument [Line Items]      
Contractual interest expense 1,482    
Amortization of debt issuance costs 829    
Amortization of debt discount 7,646    
Total $ 9,957    
v3.10.0.1
Stock-Based Compensation - Narrative (Details) - USD ($)
$ in Millions
1 Months Ended 12 Months Ended
Jan. 01, 2018
Mar. 31, 2014
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Granted (in shares)     12,000 643,000 892,000
Aggregate intrinsic value of options exercised in period     $ 42.8 $ 33.9 $ 29.4
Aggregate intrinsic value of options outstanding     79.1    
Unrecognized stock-based compensation expense, related to stock options     $ 7.9    
2014 Stock Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares reserved for future issuance under the plan (in shares)       7,297,000  
Additional shares authorized under the plan, percentage increase   4.50%      
Shares added to plan, automatic increase provision (in shares) 1,889,000        
Shares transferred from the previous plan that expired or terminated (in shares)     0    
Initial reserve of shares under the plan (in shares)     9,186,000    
Granted (in shares)     2,706,000    
Shares available for future issuance under the plan (in shares)     3,451,000    
Total fair market value of stock options vested during the period     $ 7.7 $ 8.1 $ 8.7
2007 Stock Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares available for future issuance under the plan (in shares)     0    
Restricted Stock Units (RSUs)          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period     4 years    
Unrecognized stock-based compensation, period for recognition     3 years    
Unrecognized stock-based compensation expense     $ 71.9    
Restricted Stock Units (RSUs) | Tranche One          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting rights (percentage)     25.00%    
Restricted Stock Units (RSUs) | Tranche Two          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting rights (percentage)     25.00%    
Restricted Stock Units (RSUs) | Tranche Three          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting rights (percentage)     25.00%    
Restricted Stock Units (RSUs) | 2014 Stock Plan          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares reserved for future issuance under the plan (in shares)     3,596,000    
Shares transferred from the previous plan that expired or terminated (in shares)     567,000    
Stock Options          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period     36 months    
Unrecognized stock-based compensation, period for recognition     1 year 11 months    
Stock Options | Tranche One          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period     1 year    
Award vesting rights (percentage)     25.00%    
Market Stock Units          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period     3 years    
Unrecognized stock-based compensation, period for recognition     1 year 11 months    
Unrecognized stock-based compensation expense     $ 3.6    
Market Stock Units | Tranche One          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting rights (percentage)     33.00%    
Market Stock Units | Tranche Two          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting rights (percentage)     33.00%    
Market Stock Units | Tranche Three          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting rights (percentage)     200.00%    
v3.10.0.1
Stock-Based Compensation - Assumptions Used in Estimating Fair Value of Options Granted (Details) - $ / shares
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Risk-free interest rate 2.60%    
Risk-free interest rate, minimum   1.70% 1.00%
Risk-free interest rate, maximum   2.10% 1.80%
Expected life (in years) 4 years 9 months 18 days 4 years 9 months 18 days  
Expected volatility 41.00%    
Expected volatility, minimum   41.50% 43.90%
Expected volatility, maximum   43.10% 46.50%
Dividend yield 0.00% 0.00% 0.00%
Weighted-average grant date fair value per share (in dollars per share) $ 18.14 $ 14.17 $ 9.32
Minimum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected life (in years)     3 years 9 months 18 days
Maximum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected life (in years)     4 years 9 months 18 days
v3.10.0.1
Stock-Based Compensation - Stock Option Activity (Details) - $ / shares
shares in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Number of Options      
Beginning balance (in shares) 3,692 4,434 5,044
Granted (in shares) 12 643 892
Exercised (in shares) (1,038) (1,205) (1,379)
Forfeited (in shares) (12) (180) (123)
Ending balance (in shares) 2,654 3,692 4,434
Weighted Average Exercise Price      
Options outstanding, beginning (in dollars per share) $ 17.63 $ 12.91 $ 8.84
Granted (in dollars per share) 47.00 36.44 23.49
Exercised (in dollars per share) 10.07 10.07 4.57
Forfeited (in dollars per share) 27.93 19.15 16.08
Options outstanding, ending (in dollars per share) $ 19.72 $ 17.63 $ 12.91
v3.10.0.1
Stock-Based Compensation - Stock Options by Range of Exercise Prices (Details)
shares in Thousands
12 Months Ended
Dec. 31, 2018
$ / shares
shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Options outstanding, number of options (in shares) | shares 2,654
Options outstanding, weighted average exercise price (in dollars per share) $ 19.72
Options outstanding, weighted average remaining contractual life (in years) 3 years 6 months
Options exercisable, number of options (in shares) | shares 1,984
Options exercisable, weighted average exercise price (in dollars per share) $ 15.86
Options exercisable, weighted average remaining contractual life (in years) 3 years 1 month
$0.84 - $5.05  
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Exercise price range, lower range limit (in dollars per share) $ 0.84
Exercise price range, upper range limit (in dollars per share) $ 5.05
Options outstanding, number of options (in shares) | shares 237
Options outstanding, weighted average exercise price (in dollars per share) $ 2.46
Options outstanding, weighted average remaining contractual life (in years) 2 years 7 months
Options exercisable, number of options (in shares) | shares 237
Options exercisable, weighted average exercise price (in dollars per share) $ 2.46
Options exercisable, weighted average remaining contractual life (in years) 2 years 7 months
$5.93 - $13.00  
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Exercise price range, lower range limit (in dollars per share) $ 5.93
Exercise price range, upper range limit (in dollars per share) $ 13.00
Options outstanding, number of options (in shares) | shares 744
Options outstanding, weighted average exercise price (in dollars per share) $ 8.52
Options outstanding, weighted average remaining contractual life (in years) 2 years
Options exercisable, number of options (in shares) | shares 744
Options exercisable, weighted average exercise price (in dollars per share) $ 8.52
Options exercisable, weighted average remaining contractual life (in years) 2 years
$15.07 - $24.33  
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Exercise price range, lower range limit (in dollars per share) $ 15.07
Exercise price range, upper range limit (in dollars per share) $ 24.33
Options outstanding, number of options (in shares) | shares 720
Options outstanding, weighted average exercise price (in dollars per share) $ 18.67
Options outstanding, weighted average remaining contractual life (in years) 3 years 6 months
Options exercisable, number of options (in shares) | shares 591
Options exercisable, weighted average exercise price (in dollars per share) $ 18.46
Options exercisable, weighted average remaining contractual life (in years) 3 years 4 months
$24.89 - $39.75  
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Exercise price range, lower range limit (in dollars per share) $ 24.89
Exercise price range, upper range limit (in dollars per share) $ 39.75
Options outstanding, number of options (in shares) | shares 875
Options outstanding, weighted average exercise price (in dollars per share) $ 32.73
Options outstanding, weighted average remaining contractual life (in years) 4 years 11 months
Options exercisable, number of options (in shares) | shares 392
Options exercisable, weighted average exercise price (in dollars per share) $ 32.60
Options exercisable, weighted average remaining contractual life (in years) 4 years 10 months
$41.90 - $47.00  
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]  
Exercise price range, lower range limit (in dollars per share) $ 41.90
Exercise price range, upper range limit (in dollars per share) $ 47.00
Options outstanding, number of options (in shares) | shares 78
Options outstanding, weighted average exercise price (in dollars per share) $ 42.66
Options outstanding, weighted average remaining contractual life (in years) 5 years 11 months
Options exercisable, number of options (in shares) | shares 20
Options exercisable, weighted average exercise price (in dollars per share) $ 41.90
Options exercisable, weighted average remaining contractual life (in years) 5 years 10 months
v3.10.0.1
Stock-Based Compensation - Restricted Stock and Market Unit Activity (Details) - $ / shares
shares in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Restricted Stock Units (RSUs)        
Number of Shares        
Nonvested, beginning (in shares) 1,680 1,210 716  
Granted (in shares) 910 939 751  
Vested (in shares) (537) (349) (171)  
Forfeited (in shares) (116) (120) (86)  
Nonvested, ending (in shares) 1,937 1,680 1,210  
Weighted Average Grant Date Fair Value        
Nonvested, beginning (in dollars per share) $ 43.50 $ 32.65 $ 25.87 $ 26.19
Granted (in dollars per share) 55.60 38.58 25.55  
Vested (in dollars per share) 31.68 26.35 26.00  
Forfeited (in dollars per share) 35.96 28.94 25.54  
Nonvested, ending (in dollars per share) $ 43.50 $ 32.65 $ 25.87  
Market Stock Units        
Number of Shares        
Nonvested, beginning (in shares) 0      
Granted (in shares) 260      
Vested (in shares) 0      
Forfeited (in shares) 0      
Nonvested, ending (in shares) 260 0    
Weighted Average Grant Date Fair Value        
Nonvested, beginning (in dollars per share) $ 21.98 $ 0.00    
Granted (in dollars per share) 21.98      
Vested (in dollars per share) 0.00      
Forfeited (in dollars per share) 0.00      
Nonvested, ending (in dollars per share) $ 21.98 $ 0.00    
v3.10.0.1
Stock-Based Compensation - Monte Carlo Simulation For Market Stock Units Granted (Details)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Volatility, minimum   41.50% 43.90%
Volatility, maximum   43.10% 46.50%
Risk-free interest rate, minimum   1.70% 1.00%
Risk-free interest rate, maximum   2.10% 1.80%
Dividend yield 0.00% 0.00% 0.00%
Longest remaining performance period (in years) 4 years 9 months 18 days 4 years 9 months 18 days  
Market Stock Units      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Volatility, minimum 34.50%    
Volatility, maximum 36.60%    
Risk-free interest rate, minimum 2.40%    
Risk-free interest rate, maximum 2.80%    
Dividend yield 0.00%    
Longest remaining performance period (in years) 3 years    
v3.10.0.1
Provision for Income Taxes - Components of Loss Before Income Taxes (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Income (Loss) Before Taxes [Line Items]                      
Loss before income taxes $ (15,039) $ (9,146) $ (8,780) $ (6,235) $ (6,191) $ (5,779) $ (7,604) $ (6,904) $ (39,200) $ (26,478) $ (35,927)
U.S.                      
Income (Loss) Before Taxes [Line Items]                      
Loss before income taxes                 (39,360) (26,478)  
Non-U.S.                      
Income (Loss) Before Taxes [Line Items]                      
Loss before income taxes                 $ 160 $ 0  
v3.10.0.1
Provision for Income Taxes - Components of Income Tax Provision (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Current taxes:                      
Federal                 $ 0 $ (100) $ 0
Foreign                 83 62 33
State                 69 74 112
Total current taxes                 152 36 145
Deferred taxes:                      
Federal                 (305) 32 262
Change in valuation allowance - acquisitions                 (2,970) 0 0
Foreign                 (2) 0 0
State                 (678) (382) 20
Total deferred taxes                 (3,955) (350) 282
(Benefit from) provision for income taxes $ (3,176) $ (287) $ (153) $ (187) $ (670) $ 3 $ 217 $ 136 $ (3,803) $ (314) $ 427
v3.10.0.1
Provision for Income Taxes - Narrative (Details) - USD ($)
3 Months Ended 12 Months Ended
Dec. 31, 2017
Dec. 31, 2018
Operating Loss Carryforwards [Line Items]    
Increase (decrease) in valuation allowance   $ 19,900,000
Unrecognized tax benefits $ 0 293,000
Tax benefit related to remeasurement 200,000  
Federal    
Operating Loss Carryforwards [Line Items]    
Net operating loss carryforwards 168,100,000 276,900,000
State    
Operating Loss Carryforwards [Line Items]    
Tax credits 500,000 1,200,000
Alternative Minimum Tax Credit Carryforward | Federal    
Operating Loss Carryforwards [Line Items]    
Tax credits 100,000 0
Research Tax Credit Carryforward | Federal    
Operating Loss Carryforwards [Line Items]    
Tax credits $ 1,200,000 3,200,000
2018 Business Acquisitions    
Operating Loss Carryforwards [Line Items]    
Increase (decrease) in valuation allowance   $ 3,000,000
v3.10.0.1
Provision for Income Taxes - Significant Components of Deferred Taxes (Details) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Deferred tax assets:    
NOL and credit carryforwards $ 69,339 $ 40,716
Deferred revenue 5,064 8,216
Accrued expenses and other 5,347 6,802
Stock-based compensation 5,494 4,615
Foreign 41 0
Total deferred tax assets 85,285 60,349
Deferred tax liabilities:    
Deferred expenses (6,717) (6,198)
Convertible debt (10,045) 0
Depreciation and amortization (12,830) (1,426)
Capitalized software (637) 0
Total deferred tax liabilities (30,229) (7,624)
Deferred tax assets less tax liabilities 55,056 52,725
Less: valuation allowance (53,936) (52,629)
Net deferred tax asset $ 1,120 $ 96
v3.10.0.1
Provision for Income Taxes - Income Tax Rate Reconciliation (Details)
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Income Tax Disclosure [Abstract]      
Income tax at U.S. statutory rate 21.00% 34.00% 34.00%
Increase in deferred tax valuation allowance (50.60%) (77.10%) (36.30%)
Stock compensation 21.90% 32.70% 0.00%
Acquisitions 5.90% 0.00% 0.00%
R&D Credit 5.00% 4.70% 0.00%
State taxes, net of federal benefit 7.60% 6.20% 1.70%
Tax impact of federal law change 0.00% 1.20% 0.00%
Other permanent items (1.10%) (0.50%) (0.60%)
Income tax benefit (provision) effective rate 9.70% 1.20% (1.20%)
v3.10.0.1
Provision for Income Taxes - Unrecognized Tax Benefits (Details)
12 Months Ended
Dec. 31, 2018
USD ($)
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]  
Unrecognized tax benefits, beginning balance $ 0
Gross increase related to acquisitions 293,000
Unrecognized tax benefits, ending balance $ 293,000
v3.10.0.1
Employee Benefit Plan - Narrative (Details) - 401(k) Plan
$ in Millions
12 Months Ended
Dec. 31, 2018
USD ($)
Defined Benefit Plan Disclosure [Line Items]  
401(K) Plan, minimum annual contributions per employee, percent of total earnings 1.00%
401 (K) Plan, maximum annual contributions per employee, percent of total earnings 90.00%
Percentage match of employee contributions 25.00%
Percentage match of each participant's compensation 6.00%
Discretionary contribution $ 0.9
Tranche One  
Defined Benefit Plan Disclosure [Line Items]  
Employer's contribution vesting percentage 50.00%
Vesting period of employer contributions 1 year
Tranche Two  
Defined Benefit Plan Disclosure [Line Items]  
Employer's contribution vesting percentage 100.00%
Vesting period of employer contributions 2 years
v3.10.0.1
Related Parties (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Related Party Transactions [Abstract]      
Revenue from a related-party customer $ 0.4 $ 0.4 $ 0.5
v3.10.0.1
Selected Quarterly Financial Data (unaudited) (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Quarterly Financial Information Disclosure [Abstract]                      
Revenues $ 67,177 $ 60,541 $ 58,574 $ 54,808 $ 51,703 $ 50,116 $ 47,625 $ 44,534 $ 241,100 $ 193,978 $ 150,224
Cost of revenues 35,435 30,140 29,303 26,977 26,572 25,813 24,328 22,772 121,855 [1] 99,485 [1] 77,429 [1]
Gross profit 31,742 30,401 29,271 27,831 25,131 24,303 23,297 21,762 119,245 94,493 72,795
Operating expenses:                      
Sales and marketing 13,583 11,467 12,108 10,966 10,292 9,904 11,096 9,878 48,124 [1] 41,170 [1] 36,284 [1]
Research and development 15,517 12,904 11,756 11,157 10,673 10,092 9,922 9,651 51,334 [1] 40,338 [1] 32,460 [1]
General and administrative 12,659 11,237 10,798 10,296 9,863 9,596 9,268 8,452 44,990 [1] 37,179 [1] 31,959 [1]
Acquisition related costs 1,820 1,811 258 256 263 270 351 348 4,145 1,232 6,307
Amortization of acquired intangibles 857 251 368 368 368 369 373 371 1,844 1,481 1,470
Unoccupied lease charges 0 0 658 0 0 0 0 0 658 0 33
Total operating expenses 44,436 37,670 35,946 33,043 31,459 30,231 31,010 28,700 151,095 121,400 108,513
Loss from operations (12,694) (7,269) (6,675) (5,212) (6,328) (5,928) (7,713) (6,938) (31,850) (26,907) (35,718)
Total other income (expense), net (2,345) (1,877) (2,105) (1,023) 137 149 109 34 (7,350) 429 (209)
Loss before income taxes (15,039) (9,146) (8,780) (6,235) (6,191) (5,779) (7,604) (6,904) (39,200) (26,478) (35,927)
Benefit from (provision for) income taxes 3,176 287 153 187 670 (3) (217) (136) 3,803 314 (427)
Net loss $ (11,863) $ (8,859) $ (8,627) $ (6,048) $ (5,521) $ (5,782) $ (7,821) $ (7,040) $ (35,397) $ (26,164) $ (36,354)
Net loss per common share, basic and diluted (usd per share) $ (0.27) $ (0.21) $ (0.20) $ (0.14) $ (0.13) $ (0.14) $ (0.19) $ (0.17) $ (0.83) $ (0.63) $ (0.92)
[1] Includes stock-based compensation expenses as follows: Year Ended December 31, 2018 2017 2016Cost of revenues $4,773 $3,729 $2,043Sales and marketing 5,837 3,243 2,231Research and development 6,852 4,464 2,934General and administrative 11,758 9,503 5,432Total stock-based compensation expenses $29,220 $20,939 $12,640
v3.10.0.1
Label Element Value
Accounting Standards Update 2014-09 [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption $ 15,842,000
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption $ 15,842,000