SERVICENOW, INC., 10-K filed on 2/28/2017
Annual Report
v3.6.0.2
Document and Entity Information - USD ($)
shares in Millions, $ in Billions
 12 Months Ended
Dec. 31, 2016
Jan. 31, 2017
Jun. 30, 2016
Document and Entity Information [Abstract]      
Entity Registrant Name SERVICENOW, INC.    
Trading Symbol NOW    
Entity Central Index Key 0001373715    
Document Type 10-K    
Document Period End Date Dec. 31, 2016    
Amendment Flag false    
Document Fiscal Year Focus 2016    
Document Fiscal Period Focus FY    
Current Fiscal Year End Date --12-31    
Entity Filer Category Large Accelerated Filer    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Common Stock, Shares Outstanding   168.0  
Entity Public Float     $ 7.6
v3.6.0.2
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2016
Dec. 31, 2015
Current assets:    
Cash and cash equivalents $ 401,238 $ 412,305
Short-term investments 498,124 388,945
Accounts receivable, net 322,757 203,333
Current portion of deferred commissions 76,780 51,976
Prepaid expenses and other current assets 43,636 29,076
Total current assets 1,342,535 1,085,635
Deferred commissions, less current portion 61,990 33,016
Long-term investments 262,658 422,667
Property and equipment, net 181,620 144,714
Intangible assets, net 65,854 43,005
Goodwill 82,534 55,669
Other assets 36,576 22,346
Total assets 2,033,767 1,807,052
Current liabilities:    
Accounts payable 38,080 37,369
Accrued expenses and other current liabilities 171,636 101,264
Current portion of deferred revenue 861,782 593,003
Total current liabilities 1,071,498 731,636
Deferred revenue, less current portion 33,319 10,751
Convertible senior notes, net 507,812 474,534
Other long-term liabilities 34,177 23,317
Total liabilities 1,646,806 1,240,238
Commitments and contingencies
Stockholders’ equity:    
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding 0 0
Common stock $0.001 par value; 600,000,000 shares authorized; 167,430,773 and 160,785,764 shares issued and outstanding at December 31, 2016 and 2015, respectively 167 160
Additional paid-in capital 1,405,317 1,140,545
Accumulated other comprehensive loss (21,133) (16,882)
Accumulated deficit (997,390) (557,009)
Total stockholders’ equity 386,961 566,814
Total liabilities and stockholders’ equity $ 2,033,767 $ 1,807,052
v3.6.0.2
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2016
Dec. 31, 2015
Preferred stock , par value (in USD per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred Stock, shares outstanding 0 0
Common stock, par value (in USD per share) $ 0.001 $ 0.001
Common stock, shares authorized 600,000,000 600,000,000
Common stock, shares, issued 167,430,773 160,785,764
Common stock, shares, outstanding 167,430,773 160,785,764
v3.6.0.2
Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Revenues:      
Subscription $ 1,221,639 $ 848,278 $ 567,217
Professional services and other 168,874 157,202 115,346
Total revenues 1,390,513 1,005,480 682,563
Cost of revenues:      
Subscription [1] 235,414 183,400 142,687
Professional services and other [1] 163,268 146,013 106,089
Total cost of revenues [1] 398,682 329,413 248,776
Gross profit 991,831 676,067 433,787
Operating expenses:      
Sales and marketing [1] 700,464 498,439 341,119
Research and development [1] 285,239 217,389 148,258
General and administrative [1] 158,936 126,604 96,245
Legal settlements [1] 270,000 0 0
Total operating expenses [1] 1,414,639 842,432 585,622
Loss from operations (422,808) (166,365) (151,835)
Interest expense (33,278) (31,097) (29,059)
Interest income and other income (expense), net 6,035 4,450 5,354
Loss before provision for income taxes (450,051) (193,012) (175,540)
Provision for income taxes 1,753 5,414 3,847
Net loss $ (451,804) $ (198,426) $ (179,387)
Net loss per share- basic and diluted (in USD per share) $ (2.75) $ (1.27) $ (1.23)
Weighted-average shares used to compute net loss per share - basic and diluted 164,533,823 155,706,643 145,355,543
Other comprehensive loss:      
Foreign currency translation adjustments $ (4,839) $ (3,177) $ (11,027)
Unrealized (loss) gain on investments, net of tax 588 (1,592) (610)
Other comprehensive loss (4,251) (4,769) (11,637)
Comprehensive loss $ (456,055) $ (203,195) $ (191,024)
[1] Includes stock-based compensation as follows:
 
Year Ended December 31,
 
2016
 
2015
 
2014
Cost of revenues:
 
 
 
 
 
Subscription
$
28,420

 
$
23,416

 
$
14,988

Professional services and other
26,442

 
23,265

 
13,116

Sales and marketing
131,571

 
102,349

 
54,006

Research and development
81,731

 
70,326

 
42,535

General and administrative
49,416

 
38,357

 
29,674
v3.6.0.2
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Stock-based compensation $ 317,580 $ 257,713 $ 154,319
Cost Of Revenues Subscription      
Stock-based compensation 28,420 23,416 14,988
Cost Of Revenues Professional Services And Other      
Stock-based compensation 26,442 23,265 13,116
Selling and Marketing Expense      
Stock-based compensation 131,571 102,349 54,006
Research and Development Expense      
Stock-based compensation 81,731 70,326 42,535
General and Administrative Expense      
Stock-based compensation $ 49,416 $ 38,357 $ 29,674
v3.6.0.2
Consolidated Statements of Changes in Stockholders' Equity - USD ($)
$ in Thousands
Total
Common stock
Additional paid-in capital
Accumulated Deficit
Accumulated other comprehensive loss
Beginning balance (in shares) at Dec. 31, 2013   140,354,605      
Beginning balance at Dec. 31, 2013 $ 394,259 $ 140 $ 573,791 $ (179,196) $ (476)
Common stock issued under employee stock plans (in shares)   9,154,487      
Common stock issued under employee stock plans 68,733 $ 10 68,723    
Tax benefit from employee stock plans 2,001   2,001    
Vesting of early exercised stock options 167   167    
Stock-based compensation 154,539   154,539    
Other comprehensive loss, net (11,637)       (11,637)
Net loss (179,387)     (179,387)  
Ending balance (in shares) at Dec. 31, 2014   149,509,092      
Ending balance at Dec. 31, 2014 428,675 $ 150 799,221 (358,583) (12,113)
Common stock issued under employee stock plans (in shares)   11,276,672      
Common stock issued under employee stock plans 93,348 $ 10 93,338    
Tax benefit from employee stock plans 2,663   2,663    
Vesting of early exercised stock options 44   44    
Taxes paid related to net share settlement of equity awards (12,795)   (12,795)    
Stock-based compensation 258,074   258,074    
Other comprehensive loss, net (4,769)       (4,769)
Net loss (198,426)     (198,426)  
Ending balance (in shares) at Dec. 31, 2015   160,785,764      
Ending balance at Dec. 31, 2015 566,814 $ 160 1,140,545 (557,009) (16,882)
Common stock issued under employee stock plans (in shares)   6,645,009      
Common stock issued under employee stock plans 66,368 $ 7 66,361    
Taxes paid related to net share settlement of equity awards (119,914)   (119,914)    
Stock-based compensation 318,325   318,325    
Other comprehensive loss, net (4,251)       (4,251)
Net loss (451,804)     (451,804)  
Ending balance (in shares) at Dec. 31, 2016   167,430,773      
Ending balance at Dec. 31, 2016 386,961 $ 167 $ 1,405,317 (997,390) $ (21,133)
Cumulative effect adjustment for ASU 2016-09 adoption $ 11,423     $ 11,423  
v3.6.0.2
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Cash flows from operating activities:      
Net loss $ (451,804) $ (198,426) $ (179,387)
Adjustments to reconcile net loss to net cash provided by operating activities:      
Depreciation and amortization 83,082 60,356 42,059
Amortization of premiums on investments 4,725 7,064 8,084
Amortization of deferred commissions 81,217 65,541 51,270
Amortization of debt discount and issuance costs 33,278 31,097 29,059
Stock-based compensation 317,580 257,713 154,319
Deferred income tax (3,424) (1,282) (1,198)
Other (962) (6,223) (4,469)
Changes in operating assets and liabilities, net of effect of business combinations:      
Accounts receivable (125,106) (50,855) (56,785)
Deferred commissions (136,459) (80,142) (73,786)
Prepaid expenses and other assets (21,500) (10,961) (5,540)
Accounts payable (3,554) 14,785 10,223
Deferred revenue 300,167 195,900 168,393
Accrued expenses and other liabilities 82,681 33,187 (1,305)
Net cash provided by operating activities(1) [1] 159,921 317,754 140,937
Cash flows from investing activities:      
Purchases of property and equipment (105,562) (87,481) (54,379)
Business combinations, net of cash acquired (34,297) (1,100) (99,813)
Purchases of other intangibles (18,750) (1,750) 0
Purchases of investments (518,664) (712,782) (521,393)
Purchases of strategic investments (500) (10,500) 0
Sales of investments 297,998 277,045 166,997
Maturities of investments 271,537 305,047 191,715
Restricted cash (210) (222) (55)
Net cash used in investing activities (108,448) (231,743) (316,928)
Cash flows from financing activities:      
Proceeds from employee stock plans 66,378 93,348 69,396
Taxes paid related to net share settlement of equity awards (119,907) (12,795) (661)
Payments on financing obligations (2,223) (223) 0
Net cash (used in) provided by financing activities(1) [1] (55,752) 80,330 68,735
Foreign currency effect on cash and cash equivalents (6,788) (6,491) (6,592)
Net increase (decrease) in cash and cash equivalents (11,067) 159,850 (113,848)
Cash and cash equivalents at beginning of period 412,305 252,455 366,303
Cash and cash equivalents at end of period 401,238 412,305 252,455
Supplemental disclosures of other cash flow information:      
Income taxes paid, net of refunds 4,338 3,630 12,604
Non-cash investing and financing activities:      
Property and equipment included in accounts payable and accrued expenses 15,381 14,427 10,313
Financing obligations for purchases of other intangibles 6,210 0 0
Financing obligation for property and equipment $ 0 0 6,161
New accounting pronouncement, early adoption, effect [Member]      
New Accounting Pronouncement, Early Adoption [Line Items]      
Net cash provided by operating activities   2,700 2,000
Net cash provided by financing activities   $ (2,700) $ (2,000)
[1] During the year ended December 31, 2016, we early adopted Accounting Standards Update 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." Refer to Note 2 Recent Accounting Pronouncements for further details. This adoption resulted in a $2.7 million increase in net cash provided by operating activities and a corresponding $2.7 million decrease in net cash provided by financing activities for the year ended December 31, 2015, and a $2.0 million increase in net cash provided by operating activities and a corresponding $2.0 million decrease in net cash provided by financing activities for the year ended December 31, 2014, as compared to the amounts previously reported.
v3.6.0.2
Description of the Business
 12 Months Ended
Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of the Business Description of the Business
 
ServiceNow is a leading provider of enterprise cloud computing solutions that define, structure, manage and automate services for global enterprises. Our mission is to help our customers improve service levels and reduce costs while scaling and automating their businesses.
v3.6.0.2
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2016
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
 
Principles of Consolidation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP), and include our accounts and the accounts of our wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation.

Prior Period Reclassification
 
Certain reclassifications of prior period amounts have been made to conform to the current period presentation.
 
Use of Estimates
 
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as reported amounts of revenues and expenses during the reporting period. Such management estimates and assumptions include, but not limited to, the best estimate of selling price of the deliverables included in multiple elements revenue arrangements, the fair value of assets acquired and liabilities assumed for business combinations, stock-based compensation expenses, the assessment of the useful life and recoverability of our property and equipment, goodwill and identifiable intangible assets, future taxable income and legal contingencies. Actual results could differ from those estimates.
 
Segments
 
We define the term “chief operating decision maker” to be our Chief Executive Officer. Our chief operating decision maker allocates resources and assesses financial performance based upon discrete financial information at the consolidated level. Accordingly, we have determined that we operate as a single operating and reportable segment. 
 
Foreign Currency Translation and Transactions
 
The functional currencies for our foreign subsidiaries are primarily their local currencies. Assets and liabilities of the wholly-owned foreign subsidiaries are translated into U.S. Dollars at exchange rates in effect at each period end. Amounts classified in stockholders’ equity are translated at historical exchange rates. Revenues and expenses are translated at the average exchange rates during the period. The resulting translation adjustments are recorded in accumulated other comprehensive loss as a component of stockholders’ equity. Foreign currency transaction gains and losses are included in interest income and other income (expense), net within the consolidated statements of comprehensive loss, and have not been material for all periods presented.
 
Allocation of Overhead Costs
 
Overhead costs associated with office facilities, IT and certain depreciation related to non-cloud-based infrastructure hardware equipment are allocated to cost of revenues and operating expenses based on headcount.
 
Revenue Recognition
 
We derive our revenues from two sources: (i) subscriptions and (ii) professional services and other. Subscription revenues are primarily comprised of subscription fees that give customers access to the ordered subscription service, related support and updates to the subscribed service during the subscription term. Our contracts typically do not give the customer the right to take possession of the software supporting the services. Professional services and other revenues consist of fees associated with the implementation and configuration of our services. Professional services and other revenues also include customer training and attendance and sponsorship fees for Knowledge, our annual user conference and other customer forums.

We commence revenue recognition when all of the following conditions are met:
 
•There is persuasive evidence of an arrangement;
•The service has been provided to the customer;
•The collection of related fees is reasonably assured; and
•The amount of fees to be paid by the customer is fixed or determinable.

Our arrangements are generally non-cancelable and do not contain refund-type provisions.

We recognize subscription revenues ratably over the contract term beginning on the commencement date of each contract, the date we make our services available to our customers. Once our services are available to customers, we record amounts due in accounts receivable and in deferred revenue. To the extent we bill customers in advance of the contract commencement date, the accounts receivable and corresponding deferred revenue amounts are netted to zero on our consolidated balance sheets, unless such amounts have been paid as of the balance sheet date.

Professional services revenues on our time-and materials arrangements are recognized as the services are delivered. Professional services revenues associated with fixed fee arrangements are recognized using a proportional performance model. In instances where certain milestones are required to be met before revenues are recognized, we defer professional services revenues and the associated costs until milestone criteria have been met.
 
We have multiple element arrangements comprised of subscription fees and professional services. To qualify as a separate unit of accounting, the delivered item must have value to the customer on a standalone basis. We have concluded that our subscription service and professional services, including implementation and configuration services, have standalone value.  

The total arrangement consideration for a multiple element arrangement is allocated to the identifiable separate units of accounting based on a relative selling price hierarchy. We determined the relative selling price for a deliverable based on its vendor-specific objective evidence (VSOE) of selling price or third-party evidence (TPE) of selling price if VSOE does not exist. If neither VSOE nor TPE of selling price exists for a deliverable, the selling price is determined using the best estimate of selling price (BESP). We determine the BESP for each deliverable primarily by considering the historical selling price of these deliverables in similar transactions as well as other factors, including, but not limited to, market competition, review of stand-alone sales and current pricing practices. In determining the appropriate pricing structure, we consider the extent of competitive pricing of similar products and marketing analysis.
 
In limited circumstances, we grant certain customers the right to deploy our subscription service on the customers’ own servers. These arrangements are subject to software revenue recognition guidance since the customer deploys our software. As we never sell the non-software elements separately from the software elements, we have determined that we do not have sufficient VSOE of fair value for all undelivered non-software elements. Consequently, we defer all revenue and related costs under the arrangement until the last element in the transaction has been delivered or starts to be delivered. Once the delivery of the last element has commenced, we recognize the entire fee and related costs from the arrangement ratably over the remaining period of the arrangement.

Deferred revenue consists primarily of payments received in advance of revenue recognition for our subscriptions and professional services and other revenues and is recognized as the revenue recognition criteria are met.

Deferred Commissions

Deferred commissions are the incremental selling costs that are directly associated with our customer contracts and consist of sales commissions paid to our direct sales force and referral fees paid to independent third-parties. The majority of commissions and referral fees are deferred and amortized on a straight-line basis over the terms of the related customer contracts. We include amortization of deferred commissions in sales and marketing expense in the consolidated statements of comprehensive loss.
 
Fair Value Measurements
 
We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized in the financial statements on a non-recurring basis or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use a fair value hierarchy that is based on three levels of inputs, of which the first two are considered observable and the last unobservable. The three levels of the fair value hierarchy are as follows:
 
Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access;
 
Level 2—Inputs other than Level 1 that are directly or indirectly observable, such as quoted prices for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities, such as interest rates, yield curves and foreign currency spot rates; and
 
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.
 
Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less. Cash and cash equivalents are stated at cost, which approximates fair value.
 
Investments
 
Investments consist of commercial paper, corporate notes and bonds, certificates of deposit and U.S. government and agency securities. We classify investments as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. All investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities are included in accumulated other comprehensive loss, a component of stockholders’ equity. We evaluate our investments to assess whether those with unrealized loss positions are other than temporarily impaired. We consider impairments to be other than temporary if they are related to deterioration in credit risk or if it is likely we will sell the securities 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 interest income and other income (expense), net in the consolidated statements of comprehensive loss.

Strategic Investments

We report our investments in non-marketable debt and equity securities in privately-held companies, in which we do not have a controlling interest or significant influence, at cost or fair value when an event or circumstance indicates an other-than-temporary decline in value has occurred. We include these strategic investments in "Other assets" on the consolidated balance sheets.
 
Accounts Receivable
 
We record trade accounts receivable at the net invoice value and such receivables are non-interest bearing. We consider receivables past due based on the contractual payment terms. We review our exposure to accounts receivable and reserve for specific amounts if collectability is no longer reasonably assured.
 
Property and Equipment
 
Property and equipment, net, are stated at cost, subject to review of impairment, and depreciated using the straight-line method over the estimated useful lives of the assets as follows:
Building
 
39 years
Computer equipment and software
  
3—5 years
Furniture and fixtures
  
3—7 years
Leasehold and other improvements
  
shorter of the lease term or estimated useful life

 
When assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in cost of revenues or operating expenses depending on whether the asset sold is being used in our provision of services to our customers. Repairs and maintenance expenses are charged to our statements of comprehensive loss as incurred.
 
Capitalized Software Development Costs
 
Software development costs for software to be sold, leased, or otherwise marketed are expensed as incurred until the establishment of technological feasibility, at which time those costs are capitalized until the product is available for general release to customers and amortized over the estimated life of the product. Technological feasibility is established upon the completion of a working prototype that has been certified as having no critical bugs and is a release candidate. To date, costs and time incurred between the establishment of technological feasibility and product release have not been significant, and all software development costs have been charged to research and development expense in our consolidated statements of comprehensive loss.

Costs incurred to develop our internal administration, finance and accounting systems are capitalized during the application development stage and amortized over the software’s estimated useful life of three to five years.
 
Leases
 
Leases are reviewed and classified as capital or operating at their inception. Some of our lease agreements contain rent escalation, rent holidays, lease incentives and renewal options. Rent escalation and rent holidays are included in the determination of rent expenses to be recorded over the lease term. Lease incentives to pay for our costs or assets are recognized as a reduction of rent expense on a straight-line basis over the term of the lease. Renewals are not assumed in the determination of the lease term unless they are deemed to be reasonably assured at the inception of the lease. We begin recognizing rent expense on the date that we obtain the legal right to use and control the leased space. The difference between rent payments and straight-line rent expense is recorded as deferred rent in the consolidated balance sheets. Deferred rent that will be recognized during the ensuing 12-month period is recorded as the current portion of deferred rent included in "Accrued expenses and other current liabilities" and the remainder is recorded as long term deferred rent included in "Other long-term liabilities".

Goodwill, Intangible Assets and Other Long Lived Assets

Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. We evaluate and test the recoverability of goodwill for impairment at least annually, during the fourth quarter, or more frequently if circumstances indicate that goodwill may not be recoverable. We perform the impairment testing by first assessing qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of its reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we perform a two-step impairment test. The first step requires the identification of the reporting units and comparison of the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the second step of the impairment test is performed to compute the amount of the impairment. Under the second step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit's goodwill over the implied fair value of that goodwill. For purposes of goodwill impairment testing, we have one reporting unit.

We periodically review the carrying amounts of long-lived assets, such as property and equipment, and purchased intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. We measure the recoverability of these assets by comparing the carrying amount of each asset to the future undiscounted cash flows we expect the asset to generate. If we consider any of these assets to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair value. In addition, we periodically evaluate the estimated remaining useful lives of long-lived assets to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation or amortization. Our intangible assets are amortized over their useful lives ranging from 18 months to ten years.

Advertising Costs

Advertising costs, excluding costs related to our annual Knowledge user conference and other customer forums, are expensed as incurred and are included in sales and marketing expense. These costs for the years ended December 31, 2016, 2015 and 2014 were $42.1 million, $26.0 million and $17.2 million, respectively.

Legal Contingencies
 
From time to time, we are a party to litigation and other legal proceedings in the ordinary course of business. We accrue for loss contingencies when we can reasonably estimate the amount of loss or range of loss and when, based on the advice of counsel, it is probable that we will incur the loss. Because of uncertainties related to these matters, we base our estimate on the information available at the time of our assessment. As additional information becomes available, we reassess our potential liability and may revise our estimate.

Stock-based Compensation
 
We recognize compensation expense related to stock options and restricted stock units (RSUs) on a straight-line basis over the requisite service period, which is generally the vesting term of four years. For RSUs granted with a performance condition, the expenses are recognized on a graded vesting basis over the vesting period, after assessing the probability of achieving requisite performance criteria. This has the impact of greater stock-based compensation expense during the initial years of the vesting period as stock-based compensation cost is recognized over the requisite service period for each separately vesting tranche of the award as though the award were, in substance, multiple awards. We recognize compensation expense related to shares issued pursuant to the employee stock purchase plan (ESPP) on a straight-line basis over the offering period. We estimate the fair value of options using the Black-Scholes options pricing model and fair value of RSUs using the fair value of our common stock on the date of grant. We recognize compensation expense net of estimated forfeiture activity, which is based on historical forfeiture rates. In some instances, shares are issued on the vesting dates net of the minimum statutory tax withholding requirements to be paid by us on behalf of our employees. In these instances, we record the liability for withholding amounts to be paid by us as a reduction to additional paid-in capital when paid, and include these payments as a reduction of cash flows from financing activities.
 
Net Loss Per Share

Basic net loss per share attributable to common stockholders is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, adjusted for the effects of dilutive common shares, which are comprised of outstanding common stock options, convertible preferred stock, RSUs, common stock subject to repurchase, ESPP obligations, convertible senior notes and warrants. The dilutive potential common shares are computed using the treasury stock method or the as-if converted method, as applicable. In periods where the effect of the conversion of preferred stock is dilutive, net loss attributable to common stockholders is adjusted by the associated preferred dividends and accretions. The effects of outstanding common stock options, convertible preferred stock, RSUs, common stock subject to repurchase, ESPP obligations, convertible senior notes and warrants are excluded from the computation of diluted net loss per common share in periods in which the effect would be antidilutive.
 
Concentration of Credit Risk and Significant Customers
 
Financial instruments potentially exposing us to credit risk consist primarily of cash, cash equivalents, investments and accounts receivable. We hold cash at financial institutions that management believes are high credit, quality financial institutions and invest in securities with a minimum rating of BBB by Standard & Poor's. Baa2 by Moody's or BBB by Fitch. We are also exposed to credit risk under the convertible note hedge (Note Hedge) transactions that may result from counterparties' non-performance.
 
Credit risk arising from accounts receivable is mitigated due to our large number of customers and their dispersion across various industries and geographies. As of December 31, 2016 and 2015, there were no customers that represented more than 10% of our accounts receivable balance. There were no customers that individually exceeded 10% of our revenues in any of the periods presented. For purposes of assessing concentration of credit risk and significant customers, a group of customers under common control or customers that are affiliates of each other are regarded as a single customer.
 
We review the composition of the accounts receivable balance, historical write-off experience and the potential risk of loss associated with delinquent accounts to determine if an allowance for doubtful accounts is necessary. Individual accounts receivable are written off when we become aware of a specific customer’s inability to meet its financial obligation, and all collection efforts are exhausted. The following table presents the changes in the allowance for doubtful accounts (in thousands):
 
Balance at Beginning of Year
 
Additions (Deductions): Charged to Operations
 
Additions (Deductions): Charged to Deferred Revenue
 
Less:
Write-offs
 
Balance at End of Year
Year ended December 31, 2016
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
1,179

 
2,219

 
(391
)
 
684

 
$
2,323

Year ended December 31, 2015
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
809

 
841

 
(70
)
 
401

 
$
1,179

Year ended December 31, 2014
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
1,143

 
395

 
(523
)
 
206

 
$
809


Warranties and Indemnification
 
Our cloud computing solutions are typically warranted to perform in material conformance with their specifications.
 
We include service level commitments to our customers that permit those customers to receive credits in the event we fail to meet those service levels. We establish an accrual based on an evaluation of the known service disruptions. Service level credit accrual charges are recorded against revenue and were not material for all periods presented.
 
We have also agreed to indemnify our directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as a director or officer of our company or that person’s services provided to any other company or enterprise at our request. We maintain director and officer insurance coverage that may enable us to recover a portion of any future amounts paid. The fair values of these obligations are not material as of each balance sheet date.
 
Our agreements include provisions indemnifying customers against intellectual property and other third-party claims. We have not incurred any costs as a result of such indemnification obligations and have not recorded any liabilities related to such obligations in the consolidated financial statements.
 
Income Taxes 

We use the asset and liability method of accounting for income taxes, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be reversed. We recognize the effect on deferred tax assets and liabilities of a change in tax rates as income and expense in the period that includes the enactment date. A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. In determining the need for a valuation allowance, we consider future growth, forecasted earnings, future taxable income, the mix of earnings in the jurisdictions in which we operate, historical earnings, taxable income in prior years, if carryback is permitted under the law, carryforward periods and prudent and feasible tax planning strategies.

Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. We recognize the tax benefit of an uncertain tax position only if it is more likely than not the position is sustainable upon examination by the taxing authority, based on the technical merits. We measure the tax benefit recognized as the largest amount of benefit which is more likely than not to be realized upon settlement with the taxing authority. We recognize interest accrued and penalties related to unrecognized tax benefits in our tax provision.

We calculate the current and deferred income tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years and record adjustments based on filed income tax returns when identified. The amount of income taxes paid is subject to examination by U.S. federal, state and foreign tax authorities. The estimate of the potential outcome of any uncertain tax issue is subject to management’s assessment of relevant risks, facts and circumstances existing at that time. To the extent the assessment of such tax position changes, we record the change in estimate in the period in which we make the determination.

New Accounting Pronouncements Adopted in 2016

In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This standard is effective for our interim and annual reporting periods beginning January 1, 2017, and early adoption is permitted. We elected to early adopt this standard during the three months ended June 30, 2016. The impact of the early adoption was as follows:

•
The standard eliminates additional paid in capital (APIC) pools and requires excess tax benefits and tax deficiencies to be recorded in the income statement as a discrete item when the awards vest or are settled. The adoption of this guidance on a prospective basis resulted in the recognition of excess tax benefits in our provision for income taxes of $2.5 million for the year ended December 31, 2016.

•
The standard requires excess tax benefits to be recognized regardless of whether the benefit reduces taxes payable. The adoption of this guidance on a modified retrospective basis resulted in the recognition of a cumulative-effect adjustment of $11.4 million that reduced our accumulated deficit and increased our foreign long-term deferred income tax as of January 1, 2016. The previously unrecognized U.S. excess tax effects were recorded as a deferred tax asset net of a valuation allowance.

•
We have elected to continue to estimate forfeitures expected to occur to determine the amount of stock-based compensation cost to be recognized in each period. As such, the guidance relating to forfeitures did not have an impact on our accumulated deficit as of January 1, 2016.

•
We elected to apply the statement of cash flows guidance that cash flows related to excess tax benefits be presented as an operating activity retrospectively, which resulted in a $2.7 million increase to net cash provided by operating activities and a corresponding decrease to net cash provided by financing activities in the accompanying consolidated statement of cash flows for the year ended December 31, 2015, and a $2.0 million increase to net cash provided by operating activities and a corresponding decrease to net cash provided by financing activities in the accompanying consolidated statement of cash flows for the year ended December 31, 2014, as compared to the amounts previously reported.

•
The statement of cash flows guidance that cash flows related to employee taxes paid for withheld shares be presented as a financing activity had no impact on our consolidated financial statements as we have historically presented such cash flows as a financing activity.

In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments (Topic 805),” which eliminates the requirement to restate prior period financial statements for measurement period adjustments in business combinations. This new standard requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. We adopted this standard during the three months ended March 31, 2016 on a prospective basis and the adoption had no material impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-05, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement." ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes software. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. We adopted this standard during the three months ended March 31, 2016 on a prospective basis and the adoption had no material impact on our consolidated financial statements.

Pending Accounting Pronouncements

In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment," which eliminates Step 2 from the goodwill impairment test. The standard requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. In addition, this new standard eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment. This standard is effective for our interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We do not anticipate this standard will have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. This standard is effective for our interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force," which requires that amounts generally described as restricted cash or restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This standard is effective for our interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We do not anticipate this standard will have a material impact on our consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory," which includes a revision of the accounting for the income tax consequences of intra-entity transfers of assets other than inventory to reduce the complexity in accounting standards. This standard is effective for our interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," which provides guidance on eight specific cash flow issues. Among these issues, this standard requires, at the settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowings, the portion of the cash payment attributable to the accreted interest related to the debt discount to be classified as cash flows for operating activities, and the portion of the cash payments attributable to the principal to be classified as cash outflows for financing activities. This standard is effective for our interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. This standard is effective for our interim and annual reporting periods beginning after December 15, 2019. We are currently evaluating the impact of this standard on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires lessees to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets, and to recognize on the income statement the expenses in a manner similar to current practice. This new standard is effective for our interim and annual periods beginning January 1, 2019 and early adoption is permitted. While we are currently evaluating the impact of this standard on our consolidated financial statements, we anticipate this standard will have a material impact on our consolidated balance sheets given that we had operating lease commitments of approximately $300 million as of December 31, 2016. However, we do not anticipate this standard will have a material impact on our consolidated statements of comprehensive loss since the expense recognition under this new standard will be similar to current practice.

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This new standard is effective for our interim and annual periods beginning January 1, 2018. We are currently evaluating the impact of this standard on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has recently issued several amendments to the standard, including clarification on accounting for licenses of intellectual property and identifying performance obligations. These new standards are effective for our interim and annual periods beginning January 1, 2018 and early adoption beginning January 1, 2017 is permitted. We are planning to adopt these new standards beginning January 1, 2018.

The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We currently anticipate adopting the standard using the full retrospective method to restate each prior reporting period presented.
 
We expect the new standard to have a material impact on the timing of revenue and expense recognition for our contracts related to on-premises offerings, in which we grant customers the right to deploy our subscription service on the customer’s own servers. Under this new standard, the requirement to have vendor specific objective evidence (VSOE) for undelivered elements is eliminated. As such, we may be required to recognize as revenue a portion of the sales price upon delivery of the software, compared to the current practice of recognizing the entire sales price ratably over an estimated subscription period due to the lack of VSOE. Currently, revenues from our on-premises offerings, under the ratable recognition model, represent less than 10% of our total revenues. Costs associated with our on-premises offerings, including commissions paid on the software, will be expensed immediately under the new standard.

In addition, we expect the new standard to impact our deferred commissions asset and the related amortization expense as the types of incremental costs requiring capitalization as well as the expense amortization period could change from our current practice. We currently expect the deferred commissions asset to increase and the related amortization expense in each reporting period to decrease under the new standard due to an increase in the average term over which such commissions are amortized.

We are continuing to evaluate the impact of the adoption of this standard on our consolidated financial statements and our preliminary assessments are subject to change.
v3.6.0.2
Investments
 12 Months Ended
Dec. 31, 2016
Available-for-sale Securities [Abstract]  
Investments Investments
 
Marketable Securities

The following is a summary of our available-for-sale investment securities, excluding those securities classified within cash and cash equivalents on the consolidated balance sheets (in thousands):
 
December 31, 2016
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
Available-for-sale securities:
 
 
 
 
 
 
 
Commercial paper
$
56,839

 
$
—

 
$
—

 
$
56,839

Corporate notes and bonds
628,054

 
91

 
(1,590
)
 
626,555

Certificates of deposit
35,355

 
—

 
—

 
35,355

U.S. government agency securities
42,088

 
7

 
(62
)
 
42,033

Total available-for-sale securities
$
762,336

 
$
98

 
$
(1,652
)
 
$
760,782



 
December 31, 2015
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
Available-for-sale securities:
 
 
 
 
 
 
 
Commercial paper
$
32,430

 
$
2

 
$
(38
)
 
$
32,394

Corporate notes and bonds
617,054

 
7

 
(2,027
)
 
615,034

Certificates of deposit
29,610

 
2

 
(17
)
 
29,595

U.S. government agency securities
134,962

 
1

 
(374
)
 
134,589

Total available-for-sale securities
$
814,056

 
$
12

 
$
(2,456
)
 
$
811,612


As of December 31, 2016, the contractual maturities of our investment securities did not exceed 24 months. The fair values of available-for-sale investment securities, by remaining contractual maturity, are as follows (in thousands):
 
December 31, 2016
Due in one year or less
$
498,124

Due in one year through two years
262,658

Total
$
760,782


The following table shows the fair values and the gross unrealized losses of these securities, classified by the length of time that the securities have been in a continuous unrealized loss position, and aggregated by investment types (in thousands): 
 
December 31, 2016
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
Fair Value
 
Gross
Unrealized
Losses
 
Fair Value
 
Gross
Unrealized
Losses
 
Fair Value
 
Gross
Unrealized
Losses
Corporate notes and bonds
$
492,503

 
$
(1,530
)
 
$
47,940

 
$
(60
)
 
$
540,443

 
$
(1,590
)
U.S. government agency securities
30,033

 
(62
)
 
—

 
—

 
30,033

 
(62
)
Total
$
522,536

 
$
(1,592
)
 
$
47,940

 
$
(60
)
 
$
570,476

 
$
(1,652
)


 
December 31, 2015
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
Fair Value
 
Gross
Unrealized
Losses
 
Fair Value
 
Gross
Unrealized
Losses
 
Fair Value
 
Gross
Unrealized
Losses
Commercial paper
$
24,913

 
$
(38
)
 
$
—

 
$
—

 
$
24,913

 
$
(38
)
Corporate notes and bonds
539,586

 
(1,897
)
 
60,099

 
(130
)
 
599,685

 
(2,027
)
Certificates of deposit
19,750

 
(17
)
 
—

 
—

 
19,750

 
(17
)
U.S. government agency securities
132,581

 
(374
)
 
—

 
—

 
132,581

 
(374
)
Total
$
716,830

 
$
(2,326
)
 
$
60,099

 
$
(130
)
 
$
776,929

 
$
(2,456
)

 As of December 31, 2016, we had a total of 274 available-for-sale securities, excluding those securities classified within cash and cash equivalents on the consolidated balance sheet in an unrealized loss position. There were no impairments considered "other-than-temporary" as it is more likely than not we will hold the securities until maturity or a recovery of the cost basis.

Strategic Investments

We account for our investments in non-marketable equity securities of certain privately-held companies under the cost method, as we have less than a 20% ownership interest and we do not have the ability to exercise significant influence over the operations of these companies. We utilize Level 3 inputs as part of our impairment analysis, including pre- and post-money valuations of recent financing events and the impact of those on its fully diluted ownership percentages, as well as other available information such as the issuer's financial results and earnings trends to identify indicators of other-than-temporary impairment. We have not recorded any impairment charges for any of our investments in privately-held companies and the carrying value of these investments was $11.0 million and $10.5 million as of December 31, 2016 and 2015, respectively.
v3.6.0.2
Fair Value Measurements
 12 Months Ended
Dec. 31, 2016
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]  
Fair Value Measurements Fair Value Measurements

The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at December 31, 2016 (in thousands): 
 
Level 1
 
Level 2
 
Total
Cash equivalents:
 
 
 
 
 
Money market funds
$
165,627

 
$
—

 
$
165,627

Short-term investments:
 
 
 
 
 
Commercial paper
—

 
56,839

 
56,839

Corporate notes and bonds


 
388,429

 
388,429

Certificates of deposit
—

 
35,355

 
35,355

U.S. government agency securities
—

 
17,501

 
17,501

Long-term investments:
 
 
 
 
 
Corporate notes and bonds
—

 
238,125

 
238,125

U.S. government agency securities
—

 
24,533

 
24,533

Total
$
165,627

 
$
760,782

 
$
926,409


 
The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at December 31, 2015 (in thousands): 
 
Level 1
 
Level 2
 
Total
Cash equivalents:
 
 
 
 
 
Money market funds
$
263,515

 
$
—

 
$
263,515

Commercial paper
—

 
2,000

 
2,000

Corporate notes and bonds
—

 
1,119

 
1,119

Short-term investments:
 
 
 
 
 
Commercial paper
—

 
32,394

 
32,394

Corporate notes and bonds
—

 
303,567

 
303,567

Certificates of deposit
—

 
23,736

 
23,736

U.S. government agency securities
—

 
29,248

 
29,248

Long-term investments:
 
 
 
 
 
Corporate notes and bonds
—

 
311,467

 
311,467

Certificates of deposit
—

 
5,859

 
5,859

U.S. government agency securities
—

 
105,341

 
105,341

Total
$
263,515

 
$
814,731

 
$
1,078,246



We determine the fair value of our security holdings based on pricing from our service provider and market prices from industry-standard independent data providers. 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), such as yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures.

See Note 9 for the fair value measurement of our convertible senior notes.
v3.6.0.2
Business Combinations
 12 Months Ended
Dec. 31, 2016
Business Combinations [Abstract]  
Business Combinations Business Combinations

2016 Business Combinations

BrightPoint Security

On June 3, 2016, we completed the acquisition of a privately-held company, BrightPoint Security, Inc. (BrightPoint), by acquiring all issued and outstanding common shares of BrightPoint for approximately $19.6 million in an all-cash transaction to expand our security operations solutions. The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date:
 
Purchase Price Allocation
(in thousands)
 
Useful Life
(in years)
Intangible assets:
 
 
 
Developed technology
$
8,100

 
6
Customer contracts and related relationships
500

 
1.5
Goodwill
15,258

 
 
Net tangible liabilities acquired
(1,339
)
 
 
Net deferred tax liabilities(1)
(2,890
)
 
 
Total purchase price
$
19,629

 
 

(1)
Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets.

ITapp

On April 8, 2016, we completed the acquisition of a privately-held company, ITapp Inc. (ITapp), by acquiring all issued and outstanding common shares of ITapp for approximately $14.5 million in an all-cash transaction to expand our IT Operations Management solutions. The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date:
 
Purchase Price Allocation
(in thousands)
 
Useful Life
(in years)
Net tangible assets acquired
$
140

 
 
Intangible assets:
 
 
 
Developed technology
4,700

 
5
Customer contracts and related relationships
200

 
1.5
Goodwill
11,437

 
 
Net deferred tax liabilities(1)
(2,015
)
 
 
Total purchase price
$
14,462

 
 

(1)
Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets.

For both business combinations, the excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. We believe the goodwill represents the synergies expected from expanded market opportunities when integrating the acquired technologies with our offerings. The goodwill balance for both business combinations is not deductible for income tax purposes. Acquisition-related costs of $1.0 million are included in general and administrative expenses in our consolidated statements of comprehensive loss.

The results of operations of both BrightPoint and ITapp have been included in our consolidated financial statements from their respective dates of purchase. The following unaudited pro forma consolidated financial information combines the results of operations from us, BrightPoint and ITapp for the years ended December 31, 2016 and 2015, as if the acquisitions of BrightPoint and ITapp had occurred on January 1, 2015 (in thousands, except share and per share data):
 
Year Ended December 31,
 
2016
 
2015
 
(Unaudited)
Revenue
$
1,391,220

 
$
1,007,752

Net loss
$
(455,146
)
 
$
(207,748
)
Weighted-average shares used to compute net loss per share - basic and diluted
164,533,823

 
155,706,643

Net loss per share - basic and diluted
$
(2.77
)
 
$
(1.33
)


The pro forma results as presented above are based on estimates and assumptions, which we believe are reasonable. They are not necessarily indicative of our consolidated results of operations in future periods or the results that actually would have been realized had we been a combined company during the periods presented. The pro forma results include adjustments primarily related to amortization of acquired intangible assets and acquisition-related costs.

2014 Business Combination

Neebula Systems Ltd.

On July 11, 2014, we completed the acquisition of a privately-held company, Neebula Systems Ltd. (Neebula), by acquiring all issued and outstanding common shares of Neebula for approximately $100 million in an all-cash transaction to expand our IT Operations Management solutions. The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date:
 
Purchase Price Allocation
(in thousands)
 
 Useful Life
(in years)
Net tangible assets acquired
$
102

 
 
Intangible assets:
 
 
 
Developed technology
56,200

 
5.5
Order backlog
600

 
1.5
Trade names
300

 
1.5
Goodwill
53,788

 
 
Net deferred tax liabilities (1)
(10,527
)
 
 
Total purchase price
$
100,463

 
 


(1)
Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets.

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. We believe the goodwill represents the synergies expected from expanded market opportunities when integrating Neebula technologies with our offerings. The goodwill balance is not deductible for U.S. income tax purposes. Acquisition-related costs of $1.2 million are primarily included in general and administrative expenses on our consolidated statements of comprehensive loss.

The results of operations of Neebula have been included in our consolidated financial statements from the date of purchase. The following unaudited pro forma consolidated financial information combines the results of operations for us and Neebula for the year ended December 31, 2014, as if the acquisition of Neebula had occurred on January 1, 2014 (in thousands, except share and per share data):
 
Year Ended December 31,
 
2014
 
(Unaudited)
Total revenues
$
683,426

Net loss
(189,457
)
Weighted-average shares used to compute net loss per share - basic and diluted
145,355,543

Net loss per share - basic and diluted
$
(1.30
)


The pro forma results as presented above are based on estimates and assumptions, which we believe are reasonable. They are not necessarily indicative of our consolidated results of operations in future periods or the results that actually would have been realized had we been a combined company during the periods presented. The pro forma results include adjustments primarily related to amortization of acquired intangible assets and acquisition-related costs.
v3.6.0.2
Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets

Goodwill balances are presented below (in thousands):
 
 
Carrying Amount
Balance as of December 31, 2014
 
$
55,016

Goodwill acquired
 
1,442

Foreign currency translation adjustments
 
(789
)
Balance as of December 31, 2015
 
55,669

Goodwill acquired
 
26,695

Foreign currency translation adjustments
 
170

Balance as of December 31, 2016
 
$
82,534



Intangible assets consist of the following (in thousands):
 
December 31, 2016
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Developed technology
$
79,206

 
$
(30,858
)
 
$
48,348

Patents
17,610

 
(867
)
 
16,743

Other
1,775

 
(1,012
)
 
763

Total intangible assets
$
98,591

 
$
(32,737
)
 
$
65,854


 
December 31, 2015
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Developed technology
$
58,144

 
$
(17,463
)
 
$
40,681

Patents
1,750

 
—

 
1,750

Other
1,945

 
(1,371
)
 
574

Total intangible assets
$
61,839

 
$
(18,834
)
 
$
43,005



Apart from the business combinations described in Note 5, we acquired $25.0 million and $1.8 million of intangible assets in patents and technology acquisitions during the years ended December 31, 2016 and December 31, 2015 respectively. Weighted average useful life for these patents and technology is approximately 9 years and 5 years, respectively.

Amortization expense for intangible assets was approximately $15.1 million, $11.8 million and $6.8 million for the years ended December 31, 2016, 2015 and 2014, respectively.

The following table presents the estimated future amortization expense related to intangible assets held at December 31, 2016 (in thousands):
Years Ending December 31,
2017
 
$
16,910

2018
 
15,762

2019
 
15,682

2020
 
6,072

2021
 
4,170

Thereafter
 
7,258

Total future amortization expense
 
$
65,854
v3.6.0.2
Property and Equipment
 12 Months Ended
Dec. 31, 2016
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment

Property and equipment, net consists of the following (in thousands):
 
December 31,
 
2016
 
2015
Computer equipment and software
$
254,780

 
$
180,197

Leasehold improvements
37,095

 
31,659

Furniture and fixtures
31,574

 
26,017

Building
6,379

 
6,318

Construction in progress
2,535

 
1,886

 
332,363

 
246,077

Less: Accumulated depreciation
(150,743
)
 
(101,363
)
Total property and equipment, net
$
181,620

 
$
144,714


 
Construction in progress consists primarily of leasehold improvements and in-process software development costs. Depreciation expense was $67.8 million, $48.5 million and $35.3 million for the years ended December 31, 2016, 2015 and 2014, respectively.
v3.6.0.2
Accrued Expenses and Other Current Liabilities
 12 Months Ended
Dec. 31, 2016
Accrued Liabilities, Current [Abstract]  
Accrued Expenses and Other Current Liabilities Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):
 
December 31,
 
2016
 
2015
Taxes payable
$
19,472

 
$
9,080

Bonuses and commissions
67,259

 
33,124

Accrued compensation
30,816

 
17,089

Other employee expenses
28,812

 
21,529

Other
25,277

 
20,442

Total accrued expenses and other current liabilities
$
171,636

 
$
101,264
v3.6.0.2
Convertible Senior Notes
 12 Months Ended
Dec. 31, 2016
Convertible Notes Payable [Abstract]  
Notes Payable Convertible Senior Notes

In November 2013, we issued 0% convertible senior notes due November 1, 2018 with an aggregate principal amount of $575 million (Notes). The Notes will not bear interest. The Notes mature on November 1, 2018 unless converted or repurchased in accordance with their terms prior to such date. We cannot redeem the Notes prior to maturity.

The Notes are unsecured obligations and do not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by us or any of our subsidiaries.

Upon conversion, we may choose to pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock. We intend to settle the principal amount of the Notes with cash.

The Notes are convertible into 7.8 million shares of our common stock at an initial conversion rate of approximately 13.54 shares of common stock per $1,000 principal amount, which is equal to an initial conversion price of approximately $73.88 per share of common stock, subject to adjustment. Holders of the Notes may convert their Notes at their option at any time prior to the close of business on the business day immediately preceding July 1, 2018, only under the following circumstances:

•
during any calendar quarter commencing after the calendar quarter ending on March 31, 2014 (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 the period of 30 consecutive trading days ending on 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 business day period after any five consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of the Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; or

•
upon the occurrence of specified corporate events.

On or after July 1, 2018, a holder may convert all or any portion of its notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the foregoing conditions. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.

The conversion price will be subject to adjustment in some events. Holders of the Notes who convert their notes in connection with certain corporate events that constitute a “make-whole fundamental change” are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a corporate event that constitutes a “fundamental change,” holders of the Notes may require us to purchase with cash all or a portion of the Notes upon the occurrence of a fundamental change, at a purchase price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest.

In accounting for the issuance of the Notes, we separated the Notes into liability and equity components. The carrying cost of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Notes. The difference between the principal amount of the Notes and the proceeds allocated to the liability component, or the debt discount, is amortized to interest expense using the effective interest method over the term of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification.

In accounting for the transaction costs related to the issuance of the Notes, we allocated the total amount incurred to the liability and equity components based on their relative fair values. Transaction costs attributable to the liability component are being amortized to interest expense over the term of the Notes, and transaction costs attributable to the equity component were netted with the equity component of the Notes in stockholders’ equity. The Notes consisted of the following (in thousands):
 
December 31,
 
2016
 
2015
Liability:
 
 
 
Principal
$
575,000

 
$
575,000

Less: debt issuance cost and debt discount, net of amortization
(67,188
)
 
(100,466
)
Net carrying amount
$
507,812

 
$
474,534


We consider the fair value of the Notes at December 31, 2016 and 2015 to be a Level 2 measurement. The estimated fair values of the Notes were $681.4 million and $741.8 million at December 31, 2016 and 2015 respectively (based on the closing trading price per $100 of the Notes on December 31, 2016 and 2015, respectively). The Notes were not convertible as of December 31, 2016 and 2015.
 
As of December 31, 2016, the remaining life of the Notes is 22 months. The following table sets forth total interest expense recognized related to the Notes (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Amortization of debt issuance cost
$
1,785

 
$
1,668

 
$
1,558

Amortization of debt discount
31,493

 
29,429

 
27,501

Total
$
33,278

 
$
31,097

 
$
29,059

Effective interest rate of the liability component
6.5%


Note Hedge

To minimize the impact of potential economic dilution upon conversion of the Notes, we entered into convertible note hedge transactions (Note Hedge), with respect to our common stock concurrent with the issuance of the Notes. The Note Hedge covers approximately 7.8 million shares of our common stock at a strike price per share that corresponds to the initial conversion price of the Notes, subject to adjustment, and is exercisable upon conversion of the Notes. We paid an aggregate amount of $135.8 million for the Note Hedge. The Note Hedge will expire upon maturity of the Notes. The Note Hedge is intended to reduce the potential economic dilution upon conversion of the Notes in the event that the fair value per share of our common stock at the time of exercise is greater than the conversion price of the Notes. The Note Hedge is a separate transaction and is not part of the terms of the Notes. The Note Hedge does not impact earnings per share, as it was entered into to offset any dilution from the Notes.

Warrants

Separately, we entered into warrant transactions (Warrants), whereby we sold warrants to acquire up to 7.8 million shares of our common stock, at a strike price of $107.46 per share, subject to adjustment. We received aggregate proceeds of $84.5 million from the sale of the Warrants. If the average market value per share of our common stock for the reporting period, as measured under the Warrants, exceeds the strike price of the Warrants, the Warrants will have a dilutive effect on our earnings per share. The Warrants are separate transactions and are not remeasured through earnings each reporting period. The Warrants are not part of the Notes or the Note Hedge, and have been accounted for as part of additional paid-in capital.
v3.6.0.2
Accumulated Other Comprehensive Loss, Net
 12 Months Ended
Dec. 31, 2016
Statement of Comprehensive Income [Abstract]  
Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss consist of the following (in thousands):
 
December 31,
 
2016
 
2015
Foreign currency translation adjustment
$
(19,277
)
 
$
(14,438
)
Net unrealized loss on investments, net of tax
(1,856
)
 
(2,444
)
        Accumulated other comprehensive loss
$
(21,133
)
 
$
(16,882
)

Reclassification adjustments out of accumulated other comprehensive loss into net loss were immaterial for all periods presented.
v3.6.0.2
Stockholders' Equity
 12 Months Ended
Dec. 31, 2016
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Stockholders' Equity

Common Stock

We are authorized to issue a total of 600,000,000 shares of common stock as of December 31, 2016. Holders of our common stock are not entitled to receive dividends unless declared by our board of directors. As of December 31, 2016, we had 167,430,773 shares of common stock outstanding and had reserved shares of common stock for future issuance as follows: 
 
 
December 31, 2016
Stock option plans:
 
 
Options outstanding
 
5,818,435

RSUs
 
12,222,282

Stock awards available for future grants:
 
 
2012 Equity Incentive Plan(1)
 
20,901,395

2012 Employee Stock Purchase Plan(1)
 
8,566,803

Total reserved shares of common stock for future issuance
 
47,508,915

 
(1)
Refer to Note 12 for a description of these plans.

During the years ended December 31, 2016 and 2015, we issued a total of 6,645,009 shares and 11,276,672 shares, respectively, from stock option exercises, vesting of RSUs and ESPP.

Preferred Stock

Our board of directors has the authority, without further action by stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series. Our board of directors may designate the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference and number of shares constituting any series or the designation of any series. The issuance of preferred stock could have the effect of restricting dividends on our common stock, diluting the voting power of our common stock, impairing the liquidation rights of our common stock, or delaying or preventing a change in control. At December 31, 2016 and 2015, no shares of preferred stock were outstanding.
v3.6.0.2
Stock Awards
 12 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Awards Stock Awards

We have a 2005 Stock Option Plan (2005 Plan) which provides for grants of stock awards, including options to purchase shares of common stock, stock purchase rights and RSUs to certain employees, officers, directors and consultants. As of December 31, 2016, there were 52,968,233 total shares of common stock authorized for issuance under the 2005 Plan, which includes shares already issued under such plan and shares reserved for issuance pursuant to outstanding options and RSUs.

On April 27, 2012, the board of directors approved the 2012 Equity Incentive Plan (2012 Plan) and the 2012 Employee Stock Purchase Plan (2012 ESPP) which became effective on June 27, 2012 and June 28, 2012, respectively.
 
Our 2012 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, RSUs, performance-based stock awards and other forms of equity compensation, or collectively, stock awards. In addition, the 2012 Plan provides for the grant of performance cash awards. Incentive stock options may be granted only to employees. All other awards may be granted to employees, including officers, as well as directors and consultants. The share reserve may increase to the extent outstanding stock options under the 2005 Plan expire or terminate unexercised. The share reserve also automatically increases on January 1 of each year until January 1, 2022, by up to 5% of the total number of shares of common stock outstanding on December 31 of the preceding year as determined by the board of directors. As of December 31, 2016, there were 45,063,064 total shares of common stock authorized for issuance under the 2012 Plan, excluding 8,371,539 shares of common stock automatically added to the 2012 Plan on January 1, 2017 pursuant to the provision described in the preceding sentence.
 
Our 2012 ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to our employees. The number of shares of common stock reserved for issuance automatically increases on January 1 of each year until January 1, 2022, by up to 1% of the total number of shares of common stock outstanding on December 31 of the preceding year as determined by the board of directors. The price at which common stock is purchased under the 2012 ESPP is equal to 85% of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. Offering periods are six months long and begin on February 1 and August 1 of each year. As of December 31, 2016, we had 8,566,803 total shares of common stock reserved for issuance under the 2012 ESPP, excluding 1,674,308 shares of common stock automatically added to the 2012 Plan on January 1, 2017.

Stock Options

The stock options are exercisable at a price equal to the market value of the underlying shares of common stock on the date of the grant as determined by our board of directors or, for those stock options issued subsequent to our IPO, the closing price of our common stock as reported on the New York Stock Exchange on the date of grant. Stock options granted under our 2005 Plan and the 2012 Plan to new employees generally vest 25% one year from the date the requisite service period begins and continue to vest monthly for each month of continued employment over the remaining three years. Options granted generally are exercisable for a period of up to ten years. Option holders under the 2005 Plan can exercise unvested options to acquire restricted stock. Upon termination of service, we have the right to repurchase at the original purchase price any unvested (but issued) shares of common stock.
 
A summary of the stock option activity was as follows:
 
Number of
Shares
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term (Years)
 
Aggregate
Intrinsic Value
(in thousands)
Outstanding at December 31, 2014
15,897,422

 
$
11.96

 
 
 
 
Granted
316,048

 
75.76

 
 
 
 
Exercised
(7,695,815
)
 
8.89

 
 
 
$
523,127

Canceled
(262,101
)
 
31.31

 
 
 
 
Outstanding at December 31, 2015
8,255,554

 
16.65

 
 
 
 
Granted
617,985

 
71.17

 
 
 
 
Exercised
(2,587,173
)
 
13.36

 
 
 
$
157,774

Canceled
(467,931
)
 
58.01

 
 
 
 
Outstanding at December 31, 2016
5,818,435

 
$
20.57

 
5.43
 
$
313,823

Vested and expected to vest as of December 31, 2016
5,721,902

 
$
19.72

 
5.36
 
$
313,398

Vested and exercisable as of December 31, 2016
4,968,001

 
$
12.53

 
4.85
 
$
307,276


 
Aggregate intrinsic value represents the difference between the estimated fair value of our common stock and the exercise price of outstanding, in-the-money options. The total intrinsic value of the options exercised was $406.6 million for the year ended December 31, 2014. The weighted-average grant date fair value per share of options granted was $28.01, $32.64 and $29.66 for the years ended December 31, 2016, 2015 and 2014, respectively. The total fair value of shares vested was $17.0 million, $34.5 million and $39.1 million for the years ended December 31, 2016, 2015 and 2014, respectively.
 
As of December 31, 2016, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options was approximately $18.9 million. The weighted-average remaining vesting period of unvested stock options at December 31, 2016 was 2.84 years.
 
RSUs

A summary of RSU activity was as follows:
 
Number of
Shares
 
Weighted Average Grant Date Fair Value
(Per Share)
 
Aggregate
Intrinsic Value
(in thousands)
Outstanding at December 31, 2014
9,941,074

 
$
51.19

 
 
Granted
6,941,008

 
73.98

 
 
Vested
(3,290,220
)
 
50.25

 
$
254,691

Forfeited
(1,174,057
)
 
59.67

 
 
Outstanding at December 31, 2015
12,417,805

 
63.38

 
 
Granted
6,870,285

 
61.22

 
 
Vested
(5,213,662
)
 
59.95

 
$
354,320

Forfeited
(1,852,146
)
 
63.18

 
 
Outstanding at December 31, 2016
12,222,282

 
$
63.66

 
$
908,604

Expected to vest as of December 31, 2016
10,221,726

 
 
 
$
759,883



RSUs granted under the 2005 Plan and the 2012 Plan to employees generally vest over a four-year period. The total intrinsic value of the RSUs vested was $73.7 million for the year ended December 31, 2014.

Included in the RSU activity table above are shares with both service and performance-based vesting criteria that were granted to certain executives. These performance RSUs are considered as eligible to vest when approved by the compensation committee in January of the year following the grant. The shares granted in each year will vest in four quarterly increments from August of the following year contingent on the continuous employment of each executive. We recognized $36.1 million, $30.8 million, and $19.2 million of stock-based compensation expense, net of actual and estimated forfeitures, associated with performance RSUs on a graded vesting basis during the year ended December 31, 2016, 2015, and 2014, respectively.

As of December 31, 2016, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs was approximately $570.4 million and the weighted-average remaining vesting period was 2.78 years.Stock-Based Compensation
 
We use the Black-Scholes options pricing model to estimate the fair value of our stock option grants. This model incorporates various assumptions including expected volatility, expected term, risk-free interest rates and expected dividend yields. The following assumptions were used for each respective period to calculate our stock-based compensation for each stock option grant on the date of the grant:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
 
 
 
 
 
Stock Options:
 
 
 
 
 
Expected volatility
41% - 42%

 
41% - 46%

 
47% - 50%

Expected term (in years)
4.89 - 5.60

 
5.50 - 6.08

 
6.08

Risk-free interest rate
1.18% - 1.87%

 
1.48% - 1.94%

 
1.78% - 2.06%

Dividend yield
—
%
 
—
%
 
—
%

 
The following assumptions were used to calculate our stock-based compensation for each stock purchase right granted under the 2012 ESPP:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
 
 
 
 
 
ESPP:
 
 
 
 
 
Expected volatility
31% - 49%

 
31% - 49%

 
33% - 49%

Expected term (in years)
0.50

 
0.50

 
0.50

Risk-free interest rate
0.17% - 0.47%

 
0.05% - 0.17%

 
0.05% - 0.08%

Dividend yield
—
%
 
—
%
 
—
%

 
Expected volatility. Prior to the third quarter of 2015, we used the historic volatility of publicly traded peer companies as an estimate for expected volatility. In considering peer companies, characteristics such as industry, stage of development, size and financial leverage are considered. Beginning in the third quarter of 2015, we began to include our own historical volatility in addition to publicly traded peers to calculate our expected volatility for a period similar to our expected term. We intend to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of our own common stock share price becomes available.
 
Expected term. Prior to the third quarter of 2015, we used the simplified method for calculating the expected term of options as described in the SEC's Staff Accounting Bulletin No. 107, Share-Based Payment. The simplified method calculates the expected term as the mid-point between the vesting date and the contractual expiration date of the award. Beginning in the third quarter of 2015, we determined the expected term based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior, because we now believe there is sufficient historical information to derive a reasonable estimate. We estimate the expected term for ESPP using the purchase period.
 
Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the stock-based award.
 
Expected dividend yield. Our expected dividend yield is zero, as we have not and do not currently intend to declare dividends in the foreseeable future.
v3.6.0.2
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]  
Stock-Based Compensation Stock Awards

We have a 2005 Stock Option Plan (2005 Plan) which provides for grants of stock awards, including options to purchase shares of common stock, stock purchase rights and RSUs to certain employees, officers, directors and consultants. As of December 31, 2016, there were 52,968,233 total shares of common stock authorized for issuance under the 2005 Plan, which includes shares already issued under such plan and shares reserved for issuance pursuant to outstanding options and RSUs.

On April 27, 2012, the board of directors approved the 2012 Equity Incentive Plan (2012 Plan) and the 2012 Employee Stock Purchase Plan (2012 ESPP) which became effective on June 27, 2012 and June 28, 2012, respectively.
 
Our 2012 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, RSUs, performance-based stock awards and other forms of equity compensation, or collectively, stock awards. In addition, the 2012 Plan provides for the grant of performance cash awards. Incentive stock options may be granted only to employees. All other awards may be granted to employees, including officers, as well as directors and consultants. The share reserve may increase to the extent outstanding stock options under the 2005 Plan expire or terminate unexercised. The share reserve also automatically increases on January 1 of each year until January 1, 2022, by up to 5% of the total number of shares of common stock outstanding on December 31 of the preceding year as determined by the board of directors. As of December 31, 2016, there were 45,063,064 total shares of common stock authorized for issuance under the 2012 Plan, excluding 8,371,539 shares of common stock automatically added to the 2012 Plan on January 1, 2017 pursuant to the provision described in the preceding sentence.
 
Our 2012 ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to our employees. The number of shares of common stock reserved for issuance automatically increases on January 1 of each year until January 1, 2022, by up to 1% of the total number of shares of common stock outstanding on December 31 of the preceding year as determined by the board of directors. The price at which common stock is purchased under the 2012 ESPP is equal to 85% of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. Offering periods are six months long and begin on February 1 and August 1 of each year. As of December 31, 2016, we had 8,566,803 total shares of common stock reserved for issuance under the 2012 ESPP, excluding 1,674,308 shares of common stock automatically added to the 2012 Plan on January 1, 2017.

Stock Options

The stock options are exercisable at a price equal to the market value of the underlying shares of common stock on the date of the grant as determined by our board of directors or, for those stock options issued subsequent to our IPO, the closing price of our common stock as reported on the New York Stock Exchange on the date of grant. Stock options granted under our 2005 Plan and the 2012 Plan to new employees generally vest 25% one year from the date the requisite service period begins and continue to vest monthly for each month of continued employment over the remaining three years. Options granted generally are exercisable for a period of up to ten years. Option holders under the 2005 Plan can exercise unvested options to acquire restricted stock. Upon termination of service, we have the right to repurchase at the original purchase price any unvested (but issued) shares of common stock.
 
A summary of the stock option activity was as follows:
 
Number of
Shares
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term (Years)
 
Aggregate
Intrinsic Value
(in thousands)
Outstanding at December 31, 2014
15,897,422

 
$
11.96

 
 
 
 
Granted
316,048

 
75.76

 
 
 
 
Exercised
(7,695,815
)
 
8.89

 
 
 
$
523,127

Canceled
(262,101
)
 
31.31

 
 
 
 
Outstanding at December 31, 2015
8,255,554

 
16.65

 
 
 
 
Granted
617,985

 
71.17

 
 
 
 
Exercised
(2,587,173
)
 
13.36

 
 
 
$
157,774

Canceled
(467,931
)
 
58.01

 
 
 
 
Outstanding at December 31, 2016
5,818,435

 
$
20.57

 
5.43
 
$
313,823

Vested and expected to vest as of December 31, 2016
5,721,902

 
$
19.72

 
5.36
 
$
313,398

Vested and exercisable as of December 31, 2016
4,968,001

 
$
12.53

 
4.85
 
$
307,276


 
Aggregate intrinsic value represents the difference between the estimated fair value of our common stock and the exercise price of outstanding, in-the-money options. The total intrinsic value of the options exercised was $406.6 million for the year ended December 31, 2014. The weighted-average grant date fair value per share of options granted was $28.01, $32.64 and $29.66 for the years ended December 31, 2016, 2015 and 2014, respectively. The total fair value of shares vested was $17.0 million, $34.5 million and $39.1 million for the years ended December 31, 2016, 2015 and 2014, respectively.
 
As of December 31, 2016, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options was approximately $18.9 million. The weighted-average remaining vesting period of unvested stock options at December 31, 2016 was 2.84 years.
 
RSUs

A summary of RSU activity was as follows:
 
Number of
Shares
 
Weighted Average Grant Date Fair Value
(Per Share)
 
Aggregate
Intrinsic Value
(in thousands)
Outstanding at December 31, 2014
9,941,074

 
$
51.19

 
 
Granted
6,941,008

 
73.98

 
 
Vested
(3,290,220
)
 
50.25

 
$
254,691

Forfeited
(1,174,057
)
 
59.67

 
 
Outstanding at December 31, 2015
12,417,805

 
63.38

 
 
Granted
6,870,285

 
61.22

 
 
Vested
(5,213,662
)
 
59.95

 
$
354,320

Forfeited
(1,852,146
)
 
63.18

 
 
Outstanding at December 31, 2016
12,222,282

 
$
63.66

 
$
908,604

Expected to vest as of December 31, 2016
10,221,726

 
 
 
$
759,883



RSUs granted under the 2005 Plan and the 2012 Plan to employees generally vest over a four-year period. The total intrinsic value of the RSUs vested was $73.7 million for the year ended December 31, 2014.

Included in the RSU activity table above are shares with both service and performance-based vesting criteria that were granted to certain executives. These performance RSUs are considered as eligible to vest when approved by the compensation committee in January of the year following the grant. The shares granted in each year will vest in four quarterly increments from August of the following year contingent on the continuous employment of each executive. We recognized $36.1 million, $30.8 million, and $19.2 million of stock-based compensation expense, net of actual and estimated forfeitures, associated with performance RSUs on a graded vesting basis during the year ended December 31, 2016, 2015, and 2014, respectively.

As of December 31, 2016, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs was approximately $570.4 million and the weighted-average remaining vesting period was 2.78 years.Stock-Based Compensation
 
We use the Black-Scholes options pricing model to estimate the fair value of our stock option grants. This model incorporates various assumptions including expected volatility, expected term, risk-free interest rates and expected dividend yields. The following assumptions were used for each respective period to calculate our stock-based compensation for each stock option grant on the date of the grant:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
 
 
 
 
 
Stock Options:
 
 
 
 
 
Expected volatility
41% - 42%

 
41% - 46%

 
47% - 50%

Expected term (in years)
4.89 - 5.60

 
5.50 - 6.08

 
6.08

Risk-free interest rate
1.18% - 1.87%

 
1.48% - 1.94%

 
1.78% - 2.06%

Dividend yield
—
%
 
—
%
 
—
%

 
The following assumptions were used to calculate our stock-based compensation for each stock purchase right granted under the 2012 ESPP:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
 
 
 
 
 
ESPP:
 
 
 
 
 
Expected volatility
31% - 49%

 
31% - 49%

 
33% - 49%

Expected term (in years)
0.50

 
0.50

 
0.50

Risk-free interest rate
0.17% - 0.47%

 
0.05% - 0.17%

 
0.05% - 0.08%

Dividend yield
—
%
 
—
%
 
—
%

 
Expected volatility. Prior to the third quarter of 2015, we used the historic volatility of publicly traded peer companies as an estimate for expected volatility. In considering peer companies, characteristics such as industry, stage of development, size and financial leverage are considered. Beginning in the third quarter of 2015, we began to include our own historical volatility in addition to publicly traded peers to calculate our expected volatility for a period similar to our expected term. We intend to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of our own common stock share price becomes available.
 
Expected term. Prior to the third quarter of 2015, we used the simplified method for calculating the expected term of options as described in the SEC's Staff Accounting Bulletin No. 107, Share-Based Payment. The simplified method calculates the expected term as the mid-point between the vesting date and the contractual expiration date of the award. Beginning in the third quarter of 2015, we determined the expected term based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior, because we now believe there is sufficient historical information to derive a reasonable estimate. We estimate the expected term for ESPP using the purchase period.
 
Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the stock-based award.
 
Expected dividend yield. Our expected dividend yield is zero, as we have not and do not currently intend to declare dividends in the foreseeable future.
v3.6.0.2
Net Loss Per Share
 12 Months Ended
Dec. 31, 2016
Earnings Per Share [Abstract]  
Net Loss Per Share Net Loss Per Share
 
The following tables present the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Numerator:
 
 
 
 
 
Net loss
$
(451,804
)
 
$
(198,426
)
 
$
(179,387
)
Denominator:
 
 
 
 
 
Weighted-average shares outstanding - basic and diluted
164,533,823

 
155,706,643

 
145,355,543

Net loss per share - basic and diluted
$
(2.75
)
 
$
(1.27
)
 
$
(1.23
)

 
Potentially dilutive securities that are not included in the calculation of diluted net loss per share because doing so would be antidilutive are as follows:
 
Year Ended December 31,
 
2016
 
2015
 
2014
Common stock options
5,818,435

 
8,255,554

 
15,897,422

Restricted stock units
12,222,282

 
12,417,805

 
9,941,074

Common stock subject to repurchase
—

 
—

 
13,597

ESPP obligations
366,529

 
254,728

 
272,294

Convertible senior notes
7,783,023

 
7,783,023

 
7,783,023

Warrants related to the issuance of convertible senior notes
7,783,023

 
7,783,023

 
7,783,023

Total potentially dilutive securities
33,973,292

 
36,494,133

 
41,690,433
v3.6.0.2
Income Taxes
 12 Months Ended
Dec. 31, 2016
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes

The provision for income taxes consists of the following (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Current provision:
 
 
 
 
 
Federal
$
(55
)
 
$
682

 
$
2

State
135

 
211

 
216

Foreign
5,097

 
6,125

 
5,046

 
5,177

 
7,018

 
5,264

Deferred provision:
 
 
 
 
 
Federal
(4,462
)
 
—

 
(232
)
State
(746
)
 
—

 
(24
)
Foreign
1,784

 
(1,604
)
 
(1,161
)
 
(3,424
)
 
(1,604
)
 
(1,417
)
Provision for income taxes
$
1,753

 
$
5,414

 
$
3,847


 
The components of loss before provision for income taxes by U.S. and foreign jurisdictions were as follows (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
United States
$
(432,631
)
 
$
(150,593
)
 
$
(109,087
)
Foreign
(17,420
)
 
(42,419
)
 
(66,453
)
Total
$
(450,051
)
 
$
(193,012
)
 
$
(175,540
)

 
The effective income tax rate differs from the federal statutory income tax rate applied to the loss before provision for income taxes due to the following (in thousands): 
 
Year Ended December 31,
 
2016
 
2015
 
2014
Tax computed at U.S. federal statutory rate
$
(153,017
)
 
$
(65,624
)
 
$
(59,684
)
State taxes, net of federal benefit
37

 
53

 
95

Tax rate differential for international subsidiaries
10,910

 
18,681

 
26,169

Stock-based compensation
(27,133
)
 
13,597

 
9,049

Tax credits
(16,452
)
 
(11,961
)
 
(9,481
)
Other
2,642

 
2,865

 
2,231

Valuation allowance
184,766

 
47,803

 
35,468

Provision for income taxes
$
1,753

 
$
5,414

 
$
3,847



Significant components of our deferred tax assets are shown below (in thousands). A valuation allowance has been recognized to offset our deferred tax assets, as necessary, by the amount of any tax benefits that, based on evidence, are not expected to be realized.

 
December 31,
 
2016
 
2015
Deferred tax assets:
 
 
 
Net operating loss carryforwards
$
640,312

 
$
27,570

Accrued expenses
10,424

 
6,030

Credit carryforwards
50,559

 
32,824

Stock-based compensation
46,530

 
53,249

Note Hedge
20,520

 
30,593

Other
13,733

 
12,025

Total deferred tax assets
782,078

 
162,291

Less valuation allowance
(728,870
)
 
(110,311
)
 
53,208

 
51,980

Deferred tax liabilities:
 
 
 
Depreciation and amortization
(18,914
)
 
(13,103
)
Convertible notes
(23,605
)
 
(35,054
)
Other
—

 
(4
)
Net deferred tax assets
$
10,689

 
$
3,819


 
As of December 31, 2016, we had U.S. federal net operating loss and federal tax credit carryforwards of approximately $1.7 billion and $40.5 million, respectively. The federal net operating loss carryforwards and federal tax credits will begin to expire in 2024 if not utilized. In addition, we had state net operating loss and state tax credit carryforwards of approximately $941.7 million and $32.5 million, respectively. The state net operating loss will begin to expire in 2017 if not utilized, and the tax effected amount due to expire in 2017 is immaterial. State tax credits can be carried forward indefinitely. Utilization of our net operating loss and credit carryforwards may be subject to annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration of the net operating loss and tax credit carryforwards before utilization.
 
We maintain a full valuation allowance against our U.S. deferred tax assets as of December 31, 2016. We regularly assess the need for a valuation allowance against our deferred tax assets. In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. Due to cumulative losses over recent years and based on all available evidence, we have determined that it is more likely than not that net deferred tax assets in the United States will not be realized. We have determined that $10.7 million related to deferred tax assets in certain foreign jurisdictions are realizable since the foreign entities have cumulative income and expected future income. The valuation allowance increased $618.6 million during the year ended December 31, 2016. This change is primarily attributable to an increase in current year net operating loss carryforwards of $186.5 million and an increase of $417.0 million related to the early adoption of ASU 2016-09 "Improvements to Employee Share-Based Payment Accounting," upon which previously unrecognized U.S. excess tax effects have been recorded as additional net operating loss carryforwards within our deferred tax asset. We will continue to assess the likelihood of realization of the deferred tax assets in each of the applicable jurisdictions in future periods and will adjust the valuation allowance accordingly.

We have not recorded a provision for deferred U.S. tax expense that could result from the remittance of foreign undistributed earnings since we intend to reinvest the earnings of the foreign subsidiaries indefinitely.

Our share of the undistributed earnings of foreign corporations not included in our consolidated federal income tax returns that could be subject to additional U.S. income tax if remitted is immaterial. The determination of the amount of unrecognized U.S federal deferred income tax liability for undistributed earnings is not practicable.

A reconciliation of the beginning and ending balance of total unrecognized tax benefits is as follows (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Balance, beginning period
$
11,737

 
$
9,158

 
$
4,810

Tax positions taken in prior period:
 
 
 
 
 
Gross increases
1,122

 
2

 
45

Gross decreases
(50
)
 
(1,017
)
 
(313
)
Tax positions taken in current period:
 
 
 
 
 
Gross increases
5,673

 
3,768

 
4,704

Gross decreases
—

 
(73
)
 
—

Lapse of statute of limitations
(42
)
 
(101
)
 
(88
)
Balance, end of period
$
18,440

 
$
11,737

 
$
9,158


 
As of December 31, 2016, we had gross unrecognized tax benefits of approximately $18.4 million, of which $4.0 million would impact the effective tax rate, if recognized. We recognize accrued interest and penalties related to unrecognized tax benefits as income tax expense. Accrued interest and penalties included in our liability related to unrecognized tax benefits were $0.4 million and $0.5 million at December 31, 2016 and 2015, respectively. The amount of unrecognized tax benefits could be reduced upon expiration of the applicable statutes of limitations. The potential reduction in unrecognized tax benefits during the next 12 months is not expected to be material. Interest and penalties accrued on these uncertain tax positions will be released upon the expiration of the statutes of limitations and these amounts are also not material.
 
We are subject to taxation in the United States and foreign jurisdictions. As of December 31, 2016, our tax years 2004 to 2016 remain subject to examination in most jurisdictions.
 
There are differing interpretations of tax laws and regulations, and as a result, disputes may arise with tax authorities involving issues of the timing and amount of deductions and allocations of income among various tax jurisdictions. We periodically evaluate our exposures associated with our tax filing positions. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from these examinations, and we do not anticipate a significant impact to our gross unrecognized tax benefits within the next 12 months related to these years. Although the timing of the resolution, settlement, and closure of any audit is highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits could significantly change in the next 12 months. However, given the number of years that remain subject to examination, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits.
v3.6.0.2
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies

Operating Leases and Other Contractual Commitments
 
For some of our offices and data centers, we have entered into non-cancelable operating lease agreements with various expiration dates. Rent expense associated with office space leases was $34.2 million, $22.0 million and $15.0 million for the years ended December 31, 2016, 2015 and 2014, respectively.
 
Payments for data center square footage as well as data center capacity for certain data centers, are primarily included in cost of revenues. These costs were $17.3 million, $13.7 million and $13.1 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Future minimum payments under our non-cancelable operating leases and other contractual commitments as of December 31, 2016 are presented in the table below (in thousands):
 
Leases, net of Sublease Income
 
Purchase Obligations (1)
 
Other
 
Total
Years Ending December 31,
 
 
 
 
 
 
 
2017
$
33,855

 
$
17,933

 
$
517

 
$
52,305

2018
35,887

 
13,401

 
517

 
49,805

2019
36,042

 
6,529

 
517

 
43,088

2020
35,197

 
3,950

 
517

 
39,664

2021
34,847

 
2,127

 
517

 
37,491

Thereafter
122,643

 
—

 
1,465

 
124,108

Total
$
298,471

 
$
43,940

 
$
4,050

 
$
346,461


 
(1)
Consists of future minimum payments under non-cancelable purchase commitments primarily related to data center and IT operations. Not included in the table above are certain purchase commitments related to our future Knowledge user conferences. If we were to cancel these agreements as of December 31, 2016, we would have been obligated to pay cancellation penalties of approximately $18.1 million in aggregate.

In November 2012, we entered into a lease agreement for 148,704 square feet of office space located in Santa Clara, California. The lease commenced in April 2013 and has a term of approximately 11 years. Rent is paid on a monthly basis and will increase incrementally over the term of the lease for total minimum lease payments of approximately $48.8 million.

In December 2014, we entered into a lease agreement for 328,867 square feet of space, located in Santa Clara, California. The lease commenced in August 2015 for an initial term of 12 years, with two options to renew the lease for additional terms of five years each. Rent is paid on a monthly basis and will increase incrementally over the term of the lease for total minimum lease payments of approximately $151.1 million.

Subsequent to the year ended December 31, 2016, we entered into certain lease agreements for additional office space. Total future minimum lease payments under these operating leases of approximately $52.1 million in aggregate are not included in the table above. $29.6 million of the $52.1 million relates to an expansion and lease term extension of our existing San Diego office facility.

In addition to the amounts above, the repayment of our 0% convertible senior notes with an aggregate principal amount of $575 million is due on November 1, 2018. Refer to Note 9 for further information regarding our convertible senior notes.

Legal Proceedings
 
From time to time, we are party to litigation and other legal proceedings in the ordinary course of business. While the results of any litigation or other legal proceedings are uncertain, management does not believe the ultimate resolution of any pending legal matters is likely to have a material adverse effect on our financial position, results of operations or cash flows, except as discussed below and for those matters for which we have recorded a loss contingency. We accrue for loss contingencies when it is both probable that we will incur the loss and when we can reasonably estimate the amount of the loss or range of loss.

Generally, our subscription agreements require us to defend our customers for third-party intellectual property infringement and other claims. Any adverse determination related to intellectual property claims or other litigation could prevent us from offering our services and adversely affect our financial condition and results of operations.

On February 6, 2014, Hewlett-Packard Company (Hewlett-Packard) filed a lawsuit against us in the U.S. District Court for the Northern District of California. The lawsuit alleged patent infringement and sought damages and an injunction. On or about November 1, 2015, Hewlett Packard Enterprise Company (HPE) separated from Hewlett-Packard as an independent company, and Hewlett-Packard assigned to HPE all right, title, and interest in the eight Hewlett-Packard patents in the lawsuit and HPE was substituted as plaintiff in the litigation. On March 4, 2016, we entered into a confidential settlement agreement resolving the lawsuit with HPE (HPE Settlement). As a result, on March 9, 2016, the lawsuit was dismissed.

BMC Software, Inc. (BMC) filed lawsuits against us in the U.S. District Court for the Eastern District of Texas on September 23, 2014 and February 12, 2016, and in the Dusseldorf (Germany) Regional Court, Patent Division, on March 2, 2016. Each of the lawsuits alleged patent infringement and sought damages and an injunction. On April 8, 2016, we entered into a confidential settlement agreement resolving all the lawsuits with BMC (BMC Settlement). As a result, the second Texas lawsuit was dismissed on April 14, 2016, and each of the initial Texas lawsuit and the German lawsuit was dismissed on April 25, 2016.

These settlements are considered multiple element arrangements for accounting purposes. We evaluated the accounting treatment of these settlements by identifying each element of the arrangements, which included amongst other elements, a release of past infringement claims and a covenant not to sue for a specified term of years. The primary benefit we received from the arrangements was the settlement and termination of all existing litigation, the avoidance of future litigation expenses and the avoidance of future management and customer disruptions. We determined that none of the elements of the settlement agreements have identifiable future benefits that would be capitalized as an asset. Accordingly, we recorded charges for aggregate legal settlements of $270.0 million in our consolidated statement of comprehensive loss for the year ended December 31, 2016. The charge covers the fulfillment by us of all financial obligations under both the BMC Settlement and HPE Settlement with no remaining financial obligations under either settlement.
v3.6.0.2
Information about Geographic Areas and Products
 12 Months Ended
Dec. 31, 2016
Segments, Geographical Areas [Abstract]  
Information About Geographic Areas and Products Information about Geographic Areas and Products

Revenues by geographic area, based on the location of our users, were as follows for the periods presented (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Revenues by geography
 
 
 
 
 
North America (1)
$
946,956

 
$
702,985

 
$
465,332

EMEA (2)
339,341

 
233,378

 
173,635

Asia Pacific and other
104,216

 
69,117

 
43,596

Total revenues
$
1,390,513

 
$
1,005,480

 
$
682,563


Property and equipment, net by geographic area were as follows (in thousands):
 
December 31,
 
2016
 
2015
Property and equipment, net:
 
 
 
North America (3)
$
132,671

 
$
104,085

EMEA (2)
37,449

 
32,027

Asia Pacific and other
11,500

 
8,602

Total property and equipment, net
$
181,620

 
$
144,714

 
(1)
Revenues attributed to the United States were approximately 95% of North America revenues for the years ended December 31, 2016 and 2015, and 94% for the year ended December 31, 2014.
(2)
Europe, the Middle East and Africa (EMEA)
(3)
Property and equipment, net attributed to the United States were approximately 92% and 98% of property and equipment, net attributable to North America for the years ended December 31, 2016 and 2015, respectively.

Subscription revenues consist of the following (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Service Management solutions
$
1,108,846

 
$
783,603

 
$
532,045

IT Operations Management solutions
112,793

 
64,675

 
35,172

Total subscription revenues
$
1,221,639

 
$
848,278

 
$
567,217



Our Service Management solutions include ServiceNow Platform, IT Service Management, IT Business Management, Customer Service, Human Resources and Security Operations, which have similar features and functions, and are generally priced on a per user basis. Our IT Operations Management solutions, which improve visibility, availability and agility of enterprise services, are generally priced on a per node basis.
v3.6.0.2
Related Party Transactions
 12 Months Ended
Dec. 31, 2016
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
 
We have entered into indemnification agreements with each of our directors, executive officers and certain other officers. These agreements require us to indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with us.

All contracts with related parties are executed in ordinary course of business. There were no material related party transactions in 2016, 2015 or 2014. As of December 31, 2016 and 2015, there were no material amounts payable to or amounts receivable from related parties.
v3.6.0.2
Subsequent Events
 12 Months Ended
Dec. 31, 2016
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
 
Events subsequent to December 31, 2016 have been evaluated through the date these consolidated financial statements were issued to determine whether they should be disclosed to keep the consolidated financial statements from being misleading. Our management noted the following subsequent events that should be disclosed:

On January 20, 2017, we acquired all issued and outstanding common shares of DxContinuum, Inc. for approximately $15.0 million in an all-cash transaction to enhance the predictive capabilities of our solutions. Our accounting and analysis of this transaction is pending completion.

On February 27, 2017, we announced Frank Slootman will resign from his position as President and Chief Executive Officer, effective April 3, 2017. Mr. Slootman will continue to serve as Chairman of our board of directors. We also announced on February 27, 2017 that our board of directors approved and appointed John J. Donahoe as President and Chief Executive Officer and expects to appoint Mr. Donahoe as a member of our board of directors each effective as of April 3, 2017.
v3.6.0.2
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2016
Accounting Policies [Abstract]  
Principles of Consolidation Principles of Consolidation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP), and include our accounts and the accounts of our wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation.
Reclassification Prior Period Reclassification
 
Certain reclassifications of prior period amounts have been made to conform to the current period presentation.
Use of Estimates Use of Estimates
 
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as reported amounts of revenues and expenses during the reporting period. Such management estimates and assumptions include, but not limited to, the best estimate of selling price of the deliverables included in multiple elements revenue arrangements, the fair value of assets acquired and liabilities assumed for business combinations, stock-based compensation expenses, the assessment of the useful life and recoverability of our property and equipment, goodwill and identifiable intangible assets, future taxable income and legal contingencies. Actual results could differ from those estimates.
Segments Segments
 
We define the term “chief operating decision maker” to be our Chief Executive Officer. Our chief operating decision maker allocates resources and assesses financial performance based upon discrete financial information at the consolidated level. Accordingly, we have determined that we operate as a single operating and reportable segment.
Foreign Currency Translation and Transactions Foreign Currency Translation and Transactions
 
The functional currencies for our foreign subsidiaries are primarily their local currencies. Assets and liabilities of the wholly-owned foreign subsidiaries are translated into U.S. Dollars at exchange rates in effect at each period end. Amounts classified in stockholders’ equity are translated at historical exchange rates. Revenues and expenses are translated at the average exchange rates during the period. The resulting translation adjustments are recorded in accumulated other comprehensive loss as a component of stockholders’ equity. Foreign currency transaction gains and losses are included in interest income and other income (expense), net within the consolidated statements of comprehensive loss, and have not been material for all periods presented.
Allocation of Overhead Costs Allocation of Overhead Costs
 
Overhead costs associated with office facilities, IT and certain depreciation related to non-cloud-based infrastructure hardware equipment are allocated to cost of revenues and operating expenses based on headcount.
Revenue Recognition Revenue Recognition
 
We derive our revenues from two sources: (i) subscriptions and (ii) professional services and other. Subscription revenues are primarily comprised of subscription fees that give customers access to the ordered subscription service, related support and updates to the subscribed service during the subscription term. Our contracts typically do not give the customer the right to take possession of the software supporting the services. Professional services and other revenues consist of fees associated with the implementation and configuration of our services. Professional services and other revenues also include customer training and attendance and sponsorship fees for Knowledge, our annual user conference and other customer forums.

We commence revenue recognition when all of the following conditions are met:
 
•There is persuasive evidence of an arrangement;
•The service has been provided to the customer;
•The collection of related fees is reasonably assured; and
•The amount of fees to be paid by the customer is fixed or determinable.

Our arrangements are generally non-cancelable and do not contain refund-type provisions.

We recognize subscription revenues ratably over the contract term beginning on the commencement date of each contract, the date we make our services available to our customers. Once our services are available to customers, we record amounts due in accounts receivable and in deferred revenue. To the extent we bill customers in advance of the contract commencement date, the accounts receivable and corresponding deferred revenue amounts are netted to zero on our consolidated balance sheets, unless such amounts have been paid as of the balance sheet date.

Professional services revenues on our time-and materials arrangements are recognized as the services are delivered. Professional services revenues associated with fixed fee arrangements are recognized using a proportional performance model. In instances where certain milestones are required to be met before revenues are recognized, we defer professional services revenues and the associated costs until milestone criteria have been met.
 
We have multiple element arrangements comprised of subscription fees and professional services. To qualify as a separate unit of accounting, the delivered item must have value to the customer on a standalone basis. We have concluded that our subscription service and professional services, including implementation and configuration services, have standalone value.  

The total arrangement consideration for a multiple element arrangement is allocated to the identifiable separate units of accounting based on a relative selling price hierarchy. We determined the relative selling price for a deliverable based on its vendor-specific objective evidence (VSOE) of selling price or third-party evidence (TPE) of selling price if VSOE does not exist. If neither VSOE nor TPE of selling price exists for a deliverable, the selling price is determined using the best estimate of selling price (BESP). We determine the BESP for each deliverable primarily by considering the historical selling price of these deliverables in similar transactions as well as other factors, including, but not limited to, market competition, review of stand-alone sales and current pricing practices. In determining the appropriate pricing structure, we consider the extent of competitive pricing of similar products and marketing analysis.
 
In limited circumstances, we grant certain customers the right to deploy our subscription service on the customers’ own servers. These arrangements are subject to software revenue recognition guidance since the customer deploys our software. As we never sell the non-software elements separately from the software elements, we have determined that we do not have sufficient VSOE of fair value for all undelivered non-software elements. Consequently, we defer all revenue and related costs under the arrangement until the last element in the transaction has been delivered or starts to be delivered. Once the delivery of the last element has commenced, we recognize the entire fee and related costs from the arrangement ratably over the remaining period of the arrangement.

Deferred revenue consists primarily of payments received in advance of revenue recognition for our subscriptions and professional services and other revenues and is recognized as the revenue recognition criteria are met.
Deferred Commissions Deferred Commissions

Deferred commissions are the incremental selling costs that are directly associated with our customer contracts and consist of sales commissions paid to our direct sales force and referral fees paid to independent third-parties. The majority of commissions and referral fees are deferred and amortized on a straight-line basis over the terms of the related customer contracts. We include amortization of deferred commissions in sales and marketing expense in the consolidated statements of comprehensive loss.
Fair Value Measurements Fair Value Measurements
 
We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized in the financial statements on a non-recurring basis or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use a fair value hierarchy that is based on three levels of inputs, of which the first two are considered observable and the last unobservable. The three levels of the fair value hierarchy are as follows:
 
Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access;
 
Level 2—Inputs other than Level 1 that are directly or indirectly observable, such as quoted prices for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities, such as interest rates, yield curves and foreign currency spot rates; and
 
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.
Cash and Cash Equivalents Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less. Cash and cash equivalents are stated at cost, which approximates fair value.
Investments Investments
 
Investments consist of commercial paper, corporate notes and bonds, certificates of deposit and U.S. government and agency securities. We classify investments as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. All investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities are included in accumulated other comprehensive loss, a component of stockholders’ equity. We evaluate our investments to assess whether those with unrealized loss positions are other than temporarily impaired. We consider impairments to be other than temporary if they are related to deterioration in credit risk or if it is likely we will sell the securities 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 interest income and other income (expense), net in the consolidated statements of comprehensive loss.
Strategic Investments Strategic Investments

We report our investments in non-marketable debt and equity securities in privately-held companies, in which we do not have a controlling interest or significant influence, at cost or fair value when an event or circumstance indicates an other-than-temporary decline in value has occurred. We include these strategic investments in "Other assets" on the consolidated balance sheets.
Accounts Receivable Accounts Receivable
 
We record trade accounts receivable at the net invoice value and such receivables are non-interest bearing. We consider receivables past due based on the contractual payment terms. We review our exposure to accounts receivable and reserve for specific amounts if collectability is no longer reasonably assured.
Property and Equipment Property and Equipment
 
Property and equipment, net, are stated at cost, subject to review of impairment, and depreciated using the straight-line method over the estimated useful lives of the assets as follows:
Building
 
39 years
Computer equipment and software
  
3—5 years
Furniture and fixtures
  
3—7 years
Leasehold and other improvements
  
shorter of the lease term or estimated useful life

 
When assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in cost of revenues or operating expenses depending on whether the asset sold is being used in our provision of services to our customers. Repairs and maintenance expenses are charged to our statements of comprehensive loss as incurred.
Capitalized Software Development Costs Capitalized Software Development Costs
 
Software development costs for software to be sold, leased, or otherwise marketed are expensed as incurred until the establishment of technological feasibility, at which time those costs are capitalized until the product is available for general release to customers and amortized over the estimated life of the product. Technological feasibility is established upon the completion of a working prototype that has been certified as having no critical bugs and is a release candidate. To date, costs and time incurred between the establishment of technological feasibility and product release have not been significant, and all software development costs have been charged to research and development expense in our consolidated statements of comprehensive loss.

Costs incurred to develop our internal administration, finance and accounting systems are capitalized during the application development stage and amortized over the software’s estimated useful life of three to five years.
Leases Leases
 
Leases are reviewed and classified as capital or operating at their inception. Some of our lease agreements contain rent escalation, rent holidays, lease incentives and renewal options. Rent escalation and rent holidays are included in the determination of rent expenses to be recorded over the lease term. Lease incentives to pay for our costs or assets are recognized as a reduction of rent expense on a straight-line basis over the term of the lease. Renewals are not assumed in the determination of the lease term unless they are deemed to be reasonably assured at the inception of the lease. We begin recognizing rent expense on the date that we obtain the legal right to use and control the leased space. The difference between rent payments and straight-line rent expense is recorded as deferred rent in the consolidated balance sheets. Deferred rent that will be recognized during the ensuing 12-month period is recorded as the current portion of deferred rent included in "Accrued expenses and other current liabilities" and the remainder is recorded as long term deferred rent included in "Other long-term liabilities".
Goodwill, Intangible Assets and Other Long Lived Assets Goodwill, Intangible Assets and Other Long Lived Assets

Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. We evaluate and test the recoverability of goodwill for impairment at least annually, during the fourth quarter, or more frequently if circumstances indicate that goodwill may not be recoverable. We perform the impairment testing by first assessing qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of its reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we perform a two-step impairment test. The first step requires the identification of the reporting units and comparison of the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the second step of the impairment test is performed to compute the amount of the impairment. Under the second step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit's goodwill over the implied fair value of that goodwill. For purposes of goodwill impairment testing, we have one reporting unit.

We periodically review the carrying amounts of long-lived assets, such as property and equipment, and purchased intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. We measure the recoverability of these assets by comparing the carrying amount of each asset to the future undiscounted cash flows we expect the asset to generate. If we consider any of these assets to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair value. In addition, we periodically evaluate the estimated remaining useful lives of long-lived assets to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation or amortization. Our intangible assets are amortized over their useful lives ranging from 18 months to ten years.
Advertising Costs Advertising Costs

Advertising costs, excluding costs related to our annual Knowledge user conference and other customer forums, are expensed as incurred and are included in sales and marketing expense. These costs for the years ended December 31, 2016, 2015 and 2014 were $42.1 million, $26.0 million and $17.2 million, respectively.
Legal Contingencies Legal Contingencies
 
From time to time, we are a party to litigation and other legal proceedings in the ordinary course of business. We accrue for loss contingencies when we can reasonably estimate the amount of loss or range of loss and when, based on the advice of counsel, it is probable that we will incur the loss. Because of uncertainties related to these matters, we base our estimate on the information available at the time of our assessment. As additional information becomes available, we reassess our potential liability and may revise our estimate.
Stock-based Compensation Stock-based Compensation
 
We recognize compensation expense related to stock options and restricted stock units (RSUs) on a straight-line basis over the requisite service period, which is generally the vesting term of four years. For RSUs granted with a performance condition, the expenses are recognized on a graded vesting basis over the vesting period, after assessing the probability of achieving requisite performance criteria. This has the impact of greater stock-based compensation expense during the initial years of the vesting period as stock-based compensation cost is recognized over the requisite service period for each separately vesting tranche of the award as though the award were, in substance, multiple awards. We recognize compensation expense related to shares issued pursuant to the employee stock purchase plan (ESPP) on a straight-line basis over the offering period. We estimate the fair value of options using the Black-Scholes options pricing model and fair value of RSUs using the fair value of our common stock on the date of grant. We recognize compensation expense net of estimated forfeiture activity, which is based on historical forfeiture rates. In some instances, shares are issued on the vesting dates net of the minimum statutory tax withholding requirements to be paid by us on behalf of our employees. In these instances, we record the liability for withholding amounts to be paid by us as a reduction to additional paid-in capital when paid, and include these payments as a reduction of cash flows from financing activities.
Net Loss Per Share Net Loss Per Share

Basic net loss per share attributable to common stockholders is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, adjusted for the effects of dilutive common shares, which are comprised of outstanding common stock options, convertible preferred stock, RSUs, common stock subject to repurchase, ESPP obligations, convertible senior notes and warrants. The dilutive potential common shares are computed using the treasury stock method or the as-if converted method, as applicable. In periods where the effect of the conversion of preferred stock is dilutive, net loss attributable to common stockholders is adjusted by the associated preferred dividends and accretions. The effects of outstanding common stock options, convertible preferred stock, RSUs, common stock subject to repurchase, ESPP obligations, convertible senior notes and warrants are excluded from the computation of diluted net loss per common share in periods in which the effect would be antidilutive.
Concentration of Credit Risk and Significant Customers Concentration of Credit Risk and Significant Customers
 
Financial instruments potentially exposing us to credit risk consist primarily of cash, cash equivalents, investments and accounts receivable. We hold cash at financial institutions that management believes are high credit, quality financial institutions and invest in securities with a minimum rating of BBB by Standard & Poor's. Baa2 by Moody's or BBB by Fitch. We are also exposed to credit risk under the convertible note hedge (Note Hedge) transactions that may result from counterparties' non-performance.
 
Credit risk arising from accounts receivable is mitigated due to our large number of customers and their dispersion across various industries and geographies. As of December 31, 2016 and 2015, there were no customers that represented more than 10% of our accounts receivable balance. There were no customers that individually exceeded 10% of our revenues in any of the periods presented. For purposes of assessing concentration of credit risk and significant customers, a group of customers under common control or customers that are affiliates of each other are regarded as a single customer.
 
We review the composition of the accounts receivable balance, historical write-off experience and the potential risk of loss associated with delinquent accounts to determine if an allowance for doubtful accounts is necessary. Individual accounts receivable are written off when we become aware of a specific customer’s inability to meet its financial obligation, and all collection efforts are exhausted.
Warranties and Indemnification Warranties and Indemnification
 
Our cloud computing solutions are typically warranted to perform in material conformance with their specifications.
 
We include service level commitments to our customers that permit those customers to receive credits in the event we fail to meet those service levels. We establish an accrual based on an evaluation of the known service disruptions. Service level credit accrual charges are recorded against revenue and were not material for all periods presented.
 
We have also agreed to indemnify our directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as a director or officer of our company or that person’s services provided to any other company or enterprise at our request. We maintain director and officer insurance coverage that may enable us to recover a portion of any future amounts paid. The fair values of these obligations are not material as of each balance sheet date.
 
Our agreements include provisions indemnifying customers against intellectual property and other third-party claims. We have not incurred any costs as a result of such indemnification obligations and have not recorded any liabilities related to such obligations in the consolidated financial statements.
Income Taxes Income Taxes 

We use the asset and liability method of accounting for income taxes, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be reversed. We recognize the effect on deferred tax assets and liabilities of a change in tax rates as income and expense in the period that includes the enactment date. A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. In determining the need for a valuation allowance, we consider future growth, forecasted earnings, future taxable income, the mix of earnings in the jurisdictions in which we operate, historical earnings, taxable income in prior years, if carryback is permitted under the law, carryforward periods and prudent and feasible tax planning strategies.

Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. We recognize the tax benefit of an uncertain tax position only if it is more likely than not the position is sustainable upon examination by the taxing authority, based on the technical merits. We measure the tax benefit recognized as the largest amount of benefit which is more likely than not to be realized upon settlement with the taxing authority. We recognize interest accrued and penalties related to unrecognized tax benefits in our tax provision.

We calculate the current and deferred income tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years and record adjustments based on filed income tax returns when identified. The amount of income taxes paid is subject to examination by U.S. federal, state and foreign tax authorities. The estimate of the potential outcome of any uncertain tax issue is subject to management’s assessment of relevant risks, facts and circumstances existing at that time. To the extent the assessment of such tax position changes, we record the change in estimate in the period in which we make the determination.
Recent Accounting Pronouncements New Accounting Pronouncements Adopted in 2016

In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This standard is effective for our interim and annual reporting periods beginning January 1, 2017, and early adoption is permitted. We elected to early adopt this standard during the three months ended June 30, 2016. The impact of the early adoption was as follows:

•
The standard eliminates additional paid in capital (APIC) pools and requires excess tax benefits and tax deficiencies to be recorded in the income statement as a discrete item when the awards vest or are settled. The adoption of this guidance on a prospective basis resulted in the recognition of excess tax benefits in our provision for income taxes of $2.5 million for the year ended December 31, 2016.

•
The standard requires excess tax benefits to be recognized regardless of whether the benefit reduces taxes payable. The adoption of this guidance on a modified retrospective basis resulted in the recognition of a cumulative-effect adjustment of $11.4 million that reduced our accumulated deficit and increased our foreign long-term deferred income tax as of January 1, 2016. The previously unrecognized U.S. excess tax effects were recorded as a deferred tax asset net of a valuation allowance.

•
We have elected to continue to estimate forfeitures expected to occur to determine the amount of stock-based compensation cost to be recognized in each period. As such, the guidance relating to forfeitures did not have an impact on our accumulated deficit as of January 1, 2016.

•
We elected to apply the statement of cash flows guidance that cash flows related to excess tax benefits be presented as an operating activity retrospectively, which resulted in a $2.7 million increase to net cash provided by operating activities and a corresponding decrease to net cash provided by financing activities in the accompanying consolidated statement of cash flows for the year ended December 31, 2015, and a $2.0 million increase to net cash provided by operating activities and a corresponding decrease to net cash provided by financing activities in the accompanying consolidated statement of cash flows for the year ended December 31, 2014, as compared to the amounts previously reported.

•
The statement of cash flows guidance that cash flows related to employee taxes paid for withheld shares be presented as a financing activity had no impact on our consolidated financial statements as we have historically presented such cash flows as a financing activity.

In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments (Topic 805),” which eliminates the requirement to restate prior period financial statements for measurement period adjustments in business combinations. This new standard requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. We adopted this standard during the three months ended March 31, 2016 on a prospective basis and the adoption had no material impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-05, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement." ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes software. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. We adopted this standard during the three months ended March 31, 2016 on a prospective basis and the adoption had no material impact on our consolidated financial statements.

Pending Accounting Pronouncements

In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment," which eliminates Step 2 from the goodwill impairment test. The standard requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. In addition, this new standard eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment. This standard is effective for our interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We do not anticipate this standard will have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. This standard is effective for our interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force," which requires that amounts generally described as restricted cash or restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This standard is effective for our interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We do not anticipate this standard will have a material impact on our consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory," which includes a revision of the accounting for the income tax consequences of intra-entity transfers of assets other than inventory to reduce the complexity in accounting standards. This standard is effective for our interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," which provides guidance on eight specific cash flow issues. Among these issues, this standard requires, at the settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowings, the portion of the cash payment attributable to the accreted interest related to the debt discount to be classified as cash flows for operating activities, and the portion of the cash payments attributable to the principal to be classified as cash outflows for financing activities. This standard is effective for our interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. This standard is effective for our interim and annual reporting periods beginning after December 15, 2019. We are currently evaluating the impact of this standard on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires lessees to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets, and to recognize on the income statement the expenses in a manner similar to current practice. This new standard is effective for our interim and annual periods beginning January 1, 2019 and early adoption is permitted. While we are currently evaluating the impact of this standard on our consolidated financial statements, we anticipate this standard will have a material impact on our consolidated balance sheets given that we had operating lease commitments of approximately $300 million as of December 31, 2016. However, we do not anticipate this standard will have a material impact on our consolidated statements of comprehensive loss since the expense recognition under this new standard will be similar to current practice.

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This new standard is effective for our interim and annual periods beginning January 1, 2018. We are currently evaluating the impact of this standard on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has recently issued several amendments to the standard, including clarification on accounting for licenses of intellectual property and identifying performance obligations. These new standards are effective for our interim and annual periods beginning January 1, 2018 and early adoption beginning January 1, 2017 is permitted. We are planning to adopt these new standards beginning January 1, 2018.

The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We currently anticipate adopting the standard using the full retrospective method to restate each prior reporting period presented.
 
We expect the new standard to have a material impact on the timing of revenue and expense recognition for our contracts related to on-premises offerings, in which we grant customers the right to deploy our subscription service on the customer’s own servers. Under this new standard, the requirement to have vendor specific objective evidence (VSOE) for undelivered elements is eliminated. As such, we may be required to recognize as revenue a portion of the sales price upon delivery of the software, compared to the current practice of recognizing the entire sales price ratably over an estimated subscription period due to the lack of VSOE. Currently, revenues from our on-premises offerings, under the ratable recognition model, represent less than 10% of our total revenues. Costs associated with our on-premises offerings, including commissions paid on the software, will be expensed immediately under the new standard.

In addition, we expect the new standard to impact our deferred commissions asset and the related amortization expense as the types of incremental costs requiring capitalization as well as the expense amortization period could change from our current practice. We currently expect the deferred commissions asset to increase and the related amortization expense in each reporting period to decrease under the new standard due to an increase in the average term over which such commissions are amortized.

We are continuing to evaluate the impact of the adoption of this standard on our consolidated financial statements and our preliminary assessments are subject to change.
Debt In accounting for the issuance of the Notes, we separated the Notes into liability and equity components. The carrying cost of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Notes. The difference between the principal amount of the Notes and the proceeds allocated to the liability component, or the debt discount, is amortized to interest expense using the effective interest method over the term of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification.

In accounting for the transaction costs related to the issuance of the Notes, we allocated the total amount incurred to the liability and equity components based on their relative fair values. Transaction costs attributable to the liability component are being amortized to interest expense over the term of the Notes, and transaction costs attributable to the equity component were netted with the equity component of the Notes in stockholders’ equity.
v3.6.0.2
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2016
Accounting Policies [Abstract]  
Summary of Property and Equipment Useful Life Property and equipment, net, are stated at cost, subject to review of impairment, and depreciated using the straight-line method over the estimated useful lives of the assets as follows:
Building
 
39 years
Computer equipment and software
  
3—5 years
Furniture and fixtures
  
3—7 years
Leasehold and other improvements
  
shorter of the lease term or estimated useful life

Property and equipment, net consists of the following (in thousands):
 
December 31,
 
2016
 
2015
Computer equipment and software
$
254,780

 
$
180,197

Leasehold improvements
37,095

 
31,659

Furniture and fixtures
31,574

 
26,017

Building
6,379

 
6,318

Construction in progress
2,535

 
1,886

 
332,363

 
246,077

Less: Accumulated depreciation
(150,743
)
 
(101,363
)
Total property and equipment, net
$
181,620

 
$
144,714
Changes in Allowance for Doubtful Accounts The following table presents the changes in the allowance for doubtful accounts (in thousands):
 
Balance at Beginning of Year
 
Additions (Deductions): Charged to Operations
 
Additions (Deductions): Charged to Deferred Revenue
 
Less:
Write-offs
 
Balance at End of Year
Year ended December 31, 2016
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
1,179

 
2,219

 
(391
)
 
684

 
$
2,323

Year ended December 31, 2015
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
809

 
841

 
(70
)
 
401

 
$
1,179

Year ended December 31, 2014
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
1,143

 
395

 
(523
)
 
206

 
$
809
v3.6.0.2
Investments (Tables)
 12 Months Ended
Dec. 31, 2016
Available-for-sale Securities [Abstract]  
Summary of Investments The following is a summary of our available-for-sale investment securities, excluding those securities classified within cash and cash equivalents on the consolidated balance sheets (in thousands):
 
December 31, 2016
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
Available-for-sale securities:
 
 
 
 
 
 
 
Commercial paper
$
56,839

 
$
—

 
$
—

 
$
56,839

Corporate notes and bonds
628,054

 
91

 
(1,590
)
 
626,555

Certificates of deposit
35,355

 
—

 
—

 
35,355

U.S. government agency securities
42,088

 
7

 
(62
)
 
42,033

Total available-for-sale securities
$
762,336

 
$
98

 
$
(1,652
)
 
$
760,782



 
December 31, 2015
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair Value
Available-for-sale securities:
 
 
 
 
 
 
 
Commercial paper
$
32,430

 
$
2

 
$
(38
)
 
$
32,394

Corporate notes and bonds
617,054

 
7

 
(2,027
)
 
615,034

Certificates of deposit
29,610

 
2

 
(17
)
 
29,595

U.S. government agency securities
134,962

 
1

 
(374
)
 
134,589

Total available-for-sale securities
$
814,056

 
$
12

 
$
(2,456
)
 
$
811,612
Investments Classified by Contractual Maturity Date The fair values of available-for-sale investment securities, by remaining contractual maturity, are as follows (in thousands):
 
December 31, 2016
Due in one year or less
$
498,124

Due in one year through two years
262,658

Total
$
760,782
Fair Values and Gross Unrealized Losses of Available-for-Sale Securities Aggregated by Investment Category The following table shows the fair values and the gross unrealized losses of these securities, classified by the length of time that the securities have been in a continuous unrealized loss position, and aggregated by investment types (in thousands): 
 
December 31, 2016
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
Fair Value
 
Gross
Unrealized
Losses
 
Fair Value
 
Gross
Unrealized
Losses
 
Fair Value
 
Gross
Unrealized
Losses
Corporate notes and bonds
$
492,503

 
$
(1,530
)
 
$
47,940

 
$
(60
)
 
$
540,443

 
$
(1,590
)
U.S. government agency securities
30,033

 
(62
)
 
—

 
—

 
30,033

 
(62
)
Total
$
522,536

 
$
(1,592
)
 
$
47,940

 
$
(60
)
 
$
570,476

 
$
(1,652
)


 
December 31, 2015
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
Fair Value
 
Gross
Unrealized
Losses
 
Fair Value
 
Gross
Unrealized
Losses
 
Fair Value
 
Gross
Unrealized
Losses
Commercial paper
$
24,913

 
$
(38
)
 
$
—

 
$
—

 
$
24,913

 
$
(38
)
Corporate notes and bonds
539,586

 
(1,897
)
 
60,099

 
(130
)
 
599,685

 
(2,027
)
Certificates of deposit
19,750

 
(17
)
 
—

 
—

 
19,750

 
(17
)
U.S. government agency securities
132,581

 
(374
)
 
—

 
—

 
132,581

 
(374
)
Total
$
716,830

 
$
(2,326
)
 
$
60,099

 
$
(130
)
 
$
776,929

 
$
(2,456
)
v3.6.0.2
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2016
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]  
Assets and Liabilities Measured at Fair Value on Recurring Basis The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at December 31, 2016 (in thousands): 
 
Level 1
 
Level 2
 
Total
Cash equivalents:
 
 
 
 
 
Money market funds
$
165,627

 
$
—

 
$
165,627

Short-term investments:
 
 
 
 
 
Commercial paper
—

 
56,839

 
56,839

Corporate notes and bonds


 
388,429

 
388,429

Certificates of deposit
—

 
35,355

 
35,355

U.S. government agency securities
—

 
17,501

 
17,501

Long-term investments:
 
 
 
 
 
Corporate notes and bonds
—

 
238,125

 
238,125

U.S. government agency securities
—

 
24,533

 
24,533

Total
$
165,627

 
$
760,782

 
$
926,409


 
The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis at December 31, 2015 (in thousands): 
 
Level 1
 
Level 2
 
Total
Cash equivalents:
 
 
 
 
 
Money market funds
$
263,515

 
$
—

 
$
263,515

Commercial paper
—

 
2,000

 
2,000

Corporate notes and bonds
—

 
1,119

 
1,119

Short-term investments:
 
 
 
 
 
Commercial paper
—

 
32,394

 
32,394

Corporate notes and bonds
—

 
303,567

 
303,567

Certificates of deposit
—

 
23,736

 
23,736

U.S. government agency securities
—

 
29,248

 
29,248

Long-term investments:
 
 
 
 
 
Corporate notes and bonds
—

 
311,467

 
311,467

Certificates of deposit
—

 
5,859

 
5,859

U.S. government agency securities
—

 
105,341

 
105,341

Total
$
263,515

 
$
814,731

 
$
1,078,246
v3.6.0.2
Business Combinations (Tables)
 12 Months Ended
Dec. 31, 2016
BrightPoint Security [Member]  
Business Acquisition [Line Items]  
Schedule of Purchase Price Allocation The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date:
 
Purchase Price Allocation
(in thousands)
 
Useful Life
(in years)
Intangible assets:
 
 
 
Developed technology
$
8,100

 
6
Customer contracts and related relationships
500

 
1.5
Goodwill
15,258

 
 
Net tangible liabilities acquired
(1,339
)
 
 
Net deferred tax liabilities(1)
(2,890
)
 
 
Total purchase price
$
19,629

 
 

(1)
Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets.
ITapp [Member]  
Business Acquisition [Line Items]  
Schedule of Purchase Price Allocation The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date:
 
Purchase Price Allocation
(in thousands)
 
Useful Life
(in years)
Net tangible assets acquired
$
140

 
 
Intangible assets:
 
 
 
Developed technology
4,700

 
5
Customer contracts and related relationships
200

 
1.5
Goodwill
11,437

 
 
Net deferred tax liabilities(1)
(2,015
)
 
 
Total purchase price
$
14,462

 
 

(1)
Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets.
BrightPoint Security and ITapp [Member]  
Business Acquisition [Line Items]  
Business Acquisition, Pro Forma Information The following unaudited pro forma consolidated financial information combines the results of operations from us, BrightPoint and ITapp for the years ended December 31, 2016 and 2015, as if the acquisitions of BrightPoint and ITapp had occurred on January 1, 2015 (in thousands, except share and per share data):
 
Year Ended December 31,
 
2016
 
2015
 
(Unaudited)
Revenue
$
1,391,220

 
$
1,007,752

Net loss
$
(455,146
)
 
$
(207,748
)
Weighted-average shares used to compute net loss per share - basic and diluted
164,533,823

 
155,706,643

Net loss per share - basic and diluted
$
(2.77
)
 
$
(1.33
)
Neebula Systems Ltd. [Member]  
Business Acquisition [Line Items]  
Schedule of Purchase Price Allocation The following table summarizes the allocation of the purchase price to the fair value of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date:
 
Purchase Price Allocation
(in thousands)
 
 Useful Life
(in years)
Net tangible assets acquired
$
102

 
 
Intangible assets:
 
 
 
Developed technology
56,200

 
5.5
Order backlog
600

 
1.5
Trade names
300

 
1.5
Goodwill
53,788

 
 
Net deferred tax liabilities (1)
(10,527
)
 
 
Total purchase price
$
100,463

 
 


(1)
Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets.
Business Acquisition, Pro Forma Information The following unaudited pro forma consolidated financial information combines the results of operations for us and Neebula for the year ended December 31, 2014, as if the acquisition of Neebula had occurred on January 1, 2014 (in thousands, except share and per share data):
 
Year Ended December 31,
 
2014
 
(Unaudited)
Total revenues
$
683,426

Net loss
(189,457
)
Weighted-average shares used to compute net loss per share - basic and diluted
145,355,543

Net loss per share - basic and diluted
$
(1.30
)
v3.6.0.2
Goodwill and Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill Goodwill balances are presented below (in thousands):
 
 
Carrying Amount
Balance as of December 31, 2014
 
$
55,016

Goodwill acquired
 
1,442

Foreign currency translation adjustments
 
(789
)
Balance as of December 31, 2015
 
55,669

Goodwill acquired
 
26,695

Foreign currency translation adjustments
 
170

Balance as of December 31, 2016
 
$
82,534
Schedule of Intangible Assets Intangible assets consist of the following (in thousands):
 
December 31, 2016
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Developed technology
$
79,206

 
$
(30,858
)
 
$
48,348

Patents
17,610

 
(867
)
 
16,743

Other
1,775

 
(1,012
)
 
763

Total intangible assets
$
98,591

 
$
(32,737
)
 
$
65,854


 
December 31, 2015
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Developed technology
$
58,144

 
$
(17,463
)
 
$
40,681

Patents
1,750

 
—

 
1,750

Other
1,945

 
(1,371
)
 
574

Total intangible assets
$
61,839

 
$
(18,834
)
 
$
43,005
Expected Future Amortization Expense Related to Intangible Assets The following table presents the estimated future amortization expense related to intangible assets held at December 31, 2016 (in thousands):
Years Ending December 31,
2017
 
$
16,910

2018
 
15,762

2019
 
15,682

2020
 
6,072

2021
 
4,170

Thereafter
 
7,258

Total future amortization expense
 
$
65,854
v3.6.0.2
Property and Equipment (Tables)
 12 Months Ended
Dec. 31, 2016
Property, Plant and Equipment [Abstract]  
Summary of Property and Equipment, Net Property and equipment, net, are stated at cost, subject to review of impairment, and depreciated using the straight-line method over the estimated useful lives of the assets as follows:
Building
 
39 years
Computer equipment and software
  
3—5 years
Furniture and fixtures
  
3—7 years
Leasehold and other improvements
  
shorter of the lease term or estimated useful life

Property and equipment, net consists of the following (in thousands):
 
December 31,
 
2016
 
2015
Computer equipment and software
$
254,780

 
$
180,197

Leasehold improvements
37,095

 
31,659

Furniture and fixtures
31,574

 
26,017

Building
6,379

 
6,318

Construction in progress
2,535

 
1,886

 
332,363

 
246,077

Less: Accumulated depreciation
(150,743
)
 
(101,363
)
Total property and equipment, net
$
181,620

 
$
144,714
v3.6.0.2
Accrued Expenses and Other Current Liabilities (Tables)
 12 Months Ended
Dec. 31, 2016
Accrued Liabilities, Current [Abstract]  
Summary of Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands):
 
December 31,
 
2016
 
2015
Taxes payable
$
19,472

 
$
9,080

Bonuses and commissions
67,259

 
33,124

Accrued compensation
30,816

 
17,089

Other employee expenses
28,812

 
21,529

Other
25,277

 
20,442

Total accrued expenses and other current liabilities
$
171,636

 
$
101,264
v3.6.0.2
Convertible Senior Notes (Tables)
 12 Months Ended
Dec. 31, 2016
Convertible Notes Payable [Abstract]  
Schedule of Convertible Notes The Notes consisted of the following (in thousands):
 
December 31,
 
2016
 
2015
Liability:
 
 
 
Principal
$
575,000

 
$
575,000

Less: debt issuance cost and debt discount, net of amortization
(67,188
)
 
(100,466
)
Net carrying amount
$
507,812

 
$
474,534
Interest Expense Recognized Related to the Notes The following table sets forth total interest expense recognized related to the Notes (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Amortization of debt issuance cost
$
1,785

 
$
1,668

 
$
1,558

Amortization of debt discount
31,493

 
29,429

 
27,501

Total
$
33,278

 
$
31,097

 
$
29,059

Effective interest rate of the liability component
6.5%
v3.6.0.2
Accumulated Other Comprehensive Loss (Tables)
 12 Months Ended
Dec. 31, 2016
Statement of Comprehensive Income [Abstract]  
Schedule of Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss consist of the following (in thousands):
 
December 31,
 
2016
 
2015
Foreign currency translation adjustment
$
(19,277
)
 
$
(14,438
)
Net unrealized loss on investments, net of tax
(1,856
)
 
(2,444
)
        Accumulated other comprehensive loss
$
(21,133
)
 
$
(16,882
)
v3.6.0.2
Stockholders' Equity (Tables)
 12 Months Ended
Dec. 31, 2016
Stockholders' Equity Note [Abstract]  
Common Stock Outstanding and Reserved Shares of Common Stock for Future Issuance As of December 31, 2016, we had 167,430,773 shares of common stock outstanding and had reserved shares of common stock for future issuance as follows: 
 
 
December 31, 2016
Stock option plans:
 
 
Options outstanding
 
5,818,435

RSUs
 
12,222,282

Stock awards available for future grants:
 
 
2012 Equity Incentive Plan(1)
 
20,901,395

2012 Employee Stock Purchase Plan(1)
 
8,566,803

Total reserved shares of common stock for future issuance
 
47,508,915

 
(1)
Refer to Note 12 for a description of these plans.
v3.6.0.2
Stock Awards (Tables)
 12 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Information About Outstanding And Vested Stock Options A summary of the stock option activity was as follows:
 
Number of
Shares
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Term (Years)
 
Aggregate
Intrinsic Value
(in thousands)
Outstanding at December 31, 2014
15,897,422

 
$
11.96

 
 
 
 
Granted
316,048

 
75.76

 
 
 
 
Exercised
(7,695,815
)
 
8.89

 
 
 
$
523,127

Canceled
(262,101
)
 
31.31

 
 
 
 
Outstanding at December 31, 2015
8,255,554

 
16.65

 
 
 
 
Granted
617,985

 
71.17

 
 
 
 
Exercised
(2,587,173
)
 
13.36

 
 
 
$
157,774

Canceled
(467,931
)
 
58.01

 
 
 
 
Outstanding at December 31, 2016
5,818,435

 
$
20.57

 
5.43
 
$
313,823

Vested and expected to vest as of December 31, 2016
5,721,902

 
$
19.72

 
5.36
 
$
313,398

Vested and exercisable as of December 31, 2016
4,968,001

 
$
12.53

 
4.85
 
$
307,276
Restricted Stock Unit Table A summary of RSU activity was as follows:
 
Number of
Shares
 
Weighted Average Grant Date Fair Value
(Per Share)
 
Aggregate
Intrinsic Value
(in thousands)
Outstanding at December 31, 2014
9,941,074

 
$
51.19

 
 
Granted
6,941,008

 
73.98

 
 
Vested
(3,290,220
)
 
50.25

 
$
254,691

Forfeited
(1,174,057
)
 
59.67

 
 
Outstanding at December 31, 2015
12,417,805

 
63.38

 
 
Granted
6,870,285

 
61.22

 
 
Vested
(5,213,662
)
 
59.95

 
$
354,320

Forfeited
(1,852,146
)
 
63.18

 
 
Outstanding at December 31, 2016
12,222,282

 
$
63.66

 
$
908,604

Expected to vest as of December 31, 2016
10,221,726

 
 
 
$
759,883
v3.6.0.2
Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]  
Estimated Weighted-average Fair Value per Share of Options Granted The following assumptions were used for each respective period to calculate our stock-based compensation for each stock option grant on the date of the grant:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
 
 
 
 
 
Stock Options:
 
 
 
 
 
Expected volatility
41% - 42%

 
41% - 46%

 
47% - 50%

Expected term (in years)
4.89 - 5.60

 
5.50 - 6.08

 
6.08

Risk-free interest rate
1.18% - 1.87%

 
1.48% - 1.94%

 
1.78% - 2.06%

Dividend yield
—
%
 
—
%
 
—
%
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions The following assumptions were used to calculate our stock-based compensation for each stock purchase right granted under the 2012 ESPP:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
 
 
 
 
 
ESPP:
 
 
 
 
 
Expected volatility
31% - 49%

 
31% - 49%

 
33% - 49%

Expected term (in years)
0.50

 
0.50

 
0.50

Risk-free interest rate
0.17% - 0.47%

 
0.05% - 0.17%

 
0.05% - 0.08%

Dividend yield
—
%
 
—
%
 
—
%
v3.6.0.2
Net Loss Per Share (Tables)
 12 Months Ended
Dec. 31, 2016
Earnings Per Share [Abstract]  
Calculation of Basic and Diluted Net Income (Loss) Per Share The following tables present the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Numerator:
 
 
 
 
 
Net loss
$
(451,804
)
 
$
(198,426
)
 
$
(179,387
)
Denominator:
 
 
 
 
 
Weighted-average shares outstanding - basic and diluted
164,533,823

 
155,706,643

 
145,355,543

Net loss per share - basic and diluted
$
(2.75
)
 
$
(1.27
)
 
$
(1.23
)
Summary of Potentially Dilutive Securities Potentially dilutive securities that are not included in the calculation of diluted net loss per share because doing so would be antidilutive are as follows:
 
Year Ended December 31,
 
2016
 
2015
 
2014
Common stock options
5,818,435

 
8,255,554

 
15,897,422

Restricted stock units
12,222,282

 
12,417,805

 
9,941,074

Common stock subject to repurchase
—

 
—

 
13,597

ESPP obligations
366,529

 
254,728

 
272,294

Convertible senior notes
7,783,023

 
7,783,023

 
7,783,023

Warrants related to the issuance of convertible senior notes
7,783,023

 
7,783,023

 
7,783,023

Total potentially dilutive securities
33,973,292

 
36,494,133

 
41,690,433
v3.6.0.2
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2016
Income Tax Disclosure [Abstract]  
Components of Provision for Income Taxes The provision for income taxes consists of the following (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Current provision:
 
 
 
 
 
Federal
$
(55
)
 
$
682

 
$
2

State
135

 
211

 
216

Foreign
5,097

 
6,125

 
5,046

 
5,177

 
7,018

 
5,264

Deferred provision:
 
 
 
 
 
Federal
(4,462
)
 
—

 
(232
)
State
(746
)
 
—

 
(24
)
Foreign
1,784

 
(1,604
)
 
(1,161
)
 
(3,424
)
 
(1,604
)
 
(1,417
)
Provision for income taxes
$
1,753

 
$
5,414

 
$
3,847
Components of Loss From Continuing Operations Before Income Taxes The components of loss before provision for income taxes by U.S. and foreign jurisdictions were as follows (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
United States
$
(432,631
)
 
$
(150,593
)
 
$
(109,087
)
Foreign
(17,420
)
 
(42,419
)
 
(66,453
)
Total
$
(450,051
)
 
$
(193,012
)
 
$
(175,540
)
Reconciliation of Federal Income Tax Rate The effective income tax rate differs from the federal statutory income tax rate applied to the loss before provision for income taxes due to the following (in thousands): 
 
Year Ended December 31,
 
2016
 
2015
 
2014
Tax computed at U.S. federal statutory rate
$
(153,017
)
 
$
(65,624
)
 
$
(59,684
)
State taxes, net of federal benefit
37

 
53

 
95

Tax rate differential for international subsidiaries
10,910

 
18,681

 
26,169

Stock-based compensation
(27,133
)
 
13,597

 
9,049

Tax credits
(16,452
)
 
(11,961
)
 
(9,481
)
Other
2,642

 
2,865

 
2,231

Valuation allowance
184,766

 
47,803

 
35,468

Provision for income taxes
$
1,753

 
$
5,414

 
$
3,847
Reconciliation of Deferred Tax Assets and Liabilities Significant components of our deferred tax assets are shown below (in thousands). A valuation allowance has been recognized to offset our deferred tax assets, as necessary, by the amount of any tax benefits that, based on evidence, are not expected to be realized.

 
December 31,
 
2016
 
2015
Deferred tax assets:
 
 
 
Net operating loss carryforwards
$
640,312

 
$
27,570

Accrued expenses
10,424

 
6,030

Credit carryforwards
50,559

 
32,824

Stock-based compensation
46,530

 
53,249

Note Hedge
20,520

 
30,593

Other
13,733

 
12,025

Total deferred tax assets
782,078

 
162,291

Less valuation allowance
(728,870
)
 
(110,311
)
 
53,208

 
51,980

Deferred tax liabilities:
 
 
 
Depreciation and amortization
(18,914
)
 
(13,103
)
Convertible notes
(23,605
)
 
(35,054
)
Other
—

 
(4
)
Net deferred tax assets
$
10,689

 
$
3,819
Reconciliation of Beginning and Ending Balance of Total Unrecognized Tax Benefits A reconciliation of the beginning and ending balance of total unrecognized tax benefits is as follows (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Balance, beginning period
$
11,737

 
$
9,158

 
$
4,810

Tax positions taken in prior period:
 
 
 
 
 
Gross increases
1,122

 
2

 
45

Gross decreases
(50
)
 
(1,017
)
 
(313
)
Tax positions taken in current period:
 
 
 
 
 
Gross increases
5,673

 
3,768

 
4,704

Gross decreases
—

 
(73
)
 
—

Lapse of statute of limitations
(42
)
 
(101
)
 
(88
)
Balance, end of period
$
18,440

 
$
11,737

 
$
9,158
v3.6.0.2
Commitments and Contingencies (Tables)
 12 Months Ended
Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]  
Annual Future Minimum Payments Under Operating Leases Future minimum payments under our non-cancelable operating leases and other contractual commitments as of December 31, 2016 are presented in the table below (in thousands):
 
Leases, net of Sublease Income
 
Purchase Obligations (1)
 
Other
 
Total
Years Ending December 31,
 
 
 
 
 
 
 
2017
$
33,855

 
$
17,933

 
$
517

 
$
52,305

2018
35,887

 
13,401

 
517

 
49,805

2019
36,042

 
6,529

 
517

 
43,088

2020
35,197

 
3,950

 
517

 
39,664

2021
34,847

 
2,127

 
517

 
37,491

Thereafter
122,643

 
—

 
1,465

 
124,108

Total
$
298,471

 
$
43,940

 
$
4,050

 
$
346,461


 
(1)
Consists of future minimum payments under non-cancelable purchase commitments primarily related to data center and IT operations. Not included in the table above are certain purchase commitments related to our future Knowledge user conferences. If we were to cancel these agreements as of December 31, 2016, we would have been obligated to pay cancellation penalties of approximately $18.1 million in aggregate.
v3.6.0.2
Information about Geographic Areas and Products (Tables)
 12 Months Ended
Dec. 31, 2016
Segments, Geographical Areas [Abstract]  
Revenues by Geographic Area, Based on Billing Location of Customer Revenues by geographic area, based on the location of our users, were as follows for the periods presented (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Revenues by geography
 
 
 
 
 
North America (1)
$
946,956

 
$
702,985

 
$
465,332

EMEA (2)
339,341

 
233,378

 
173,635

Asia Pacific and other
104,216

 
69,117

 
43,596

Total revenues
$
1,390,513

 
$
1,005,480

 
$
682,563
Schedule of Long Lived Assets by Geographic Area Property and equipment, net by geographic area were as follows (in thousands):
 
December 31,
 
2016
 
2015
Property and equipment, net:
 
 
 
North America (3)
$
132,671

 
$
104,085

EMEA (2)
37,449

 
32,027

Asia Pacific and other
11,500

 
8,602

Total property and equipment, net
$
181,620

 
$
144,714

 
(1)
Revenues attributed to the United States were approximately 95% of North America revenues for the years ended December 31, 2016 and 2015, and 94% for the year ended December 31, 2014.
(2)
Europe, the Middle East and Africa (EMEA)
(3)
Property and equipment, net attributed to the United States were approximately 92% and 98% of property and equipment, net attributable to North America for the years ended December 31, 2016 and 2015, respectively.

Schedule of Subscription Revenue by Products Subscription revenues consist of the following (in thousands):
 
Year Ended December 31,
 
2016
 
2015
 
2014
Service Management solutions
$
1,108,846

 
$
783,603

 
$
532,045

IT Operations Management solutions
112,793

 
64,675

 
35,172

Total subscription revenues
$
1,221,639

 
$
848,278

 
$
567,217
v3.6.0.2
Summary of Significant Accounting Policies - Additional Information (Detail)
$ in Millions
 12 Months Ended
Dec. 31, 2016
USD ($)
segment
Dec. 31, 2015
USD ($)
Dec. 31, 2014
USD ($)
Summary Of Significant Accounting Policies [Line Items]      
Maturities of cash and cash equivalents Three months or less    
Deferred rent recognition period (in months) 12 months    
Number of reporting units | segment 1    
Advertising costs | $ $ 42.1 $ 26.0 $ 17.2
Stock options vesting period (in years) 4 years    
Minimum      
Summary Of Significant Accounting Policies [Line Items]      
Intangible assets useful life 18 months    
Maximum      
Summary Of Significant Accounting Policies [Line Items]      
Intangible assets useful life 10 years    
v3.6.0.2
Summary of Significant Accounting Policies - Property and Equipment, Net Estimated Useful Lives (Detail)
 12 Months Ended
Dec. 31, 2016
Computer software, intangible asset | Minimum  
Property and equipment estimated useful lives  
Property, plant and equipment, useful life (in years) 3 years
Computer software, intangible asset | Maximum  
Property and equipment estimated useful lives  
Property, plant and equipment, useful life (in years) 5 years
Building  
Property and equipment estimated useful lives  
Property, plant and equipment, useful life (in years) 39 years
Computer equipment and software | Minimum  
Property and equipment estimated useful lives  
Property, plant and equipment, useful life (in years) 3 years
Computer equipment and software | Maximum  
Property and equipment estimated useful lives  
Property, plant and equipment, useful life (in years) 5 years
Furniture and fixtures | Minimum  
Property and equipment estimated useful lives  
Property, plant and equipment, useful life (in years) 3 years
Furniture and fixtures | Maximum  
Property and equipment estimated useful lives  
Property, plant and equipment, useful life (in years) 7 years
v3.6.0.2
Summary of Significant Accounting Policies - Concentration (Details) - Customer
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Concentration Risk [Line Items]      
Percentage of accounts receivable balance 10.00%    
Percentage of revenue 10.00%    
Customer concentration risk [Member]      
Concentration Risk [Line Items]      
Number of customers represented more than ten percent of the accounts receivable balance 0 0  
Number of significant revenue customers 0 0 0
v3.6.0.2
Summary of Significant Accounting Policies - Changes in Allowance for Doubtful Accounts (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Changes in the allowance for doubtful accounts      
Balance at beginning of period $ 1,179 $ 809 $ 1,143
Additions (Deductions): charged to operations 2,219 841 395
Additions (Deductions): charged to deferred revenue (391) (70) (523)
Allowance for doubtful accounts receivable, write-offs 684 401 206
Balance at end of period $ 2,323 $ 1,179 $ 809
v3.6.0.2
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Jan. 01, 2016
New Accounting Pronouncement, Early Adoption [Line Items]        
Effective income tax rate reconciliation, share-based compensation, excess tax benefit $ 2,500      
Operating leases, future minimum payments due $ 298,471      
New accounting pronouncement, early adoption, effect [Member]        
New Accounting Pronouncement, Early Adoption [Line Items]        
Cumulative effect of change on equity       $ 11,400
Net cash provided by operating activities   $ 2,700 $ 2,000  
Net cash provided by financing activities   $ 2,700 $ 2,000  
v3.6.0.2
Investments - Summary of Investments (Detail) - USD ($)
$ in Thousands
Dec. 31, 2016
Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost $ 762,336 $ 814,056
Gross unrealized gains 98 12
Gross unrealized losses (1,652) (2,456)
Estimated fair value 760,782 811,612
Commercial paper [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 56,839 32,430
Gross unrealized gains 0 2
Gross unrealized losses 0 (38)
Estimated fair value 56,839 32,394
Corporate notes and bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 628,054 617,054
Gross unrealized gains 91 7
Gross unrealized losses (1,590) (2,027)
Estimated fair value 626,555 615,034
Certificates of deposit [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 35,355 29,610
Gross unrealized gains 0 2
Gross unrealized losses 0 (17)
Estimated fair value 35,355 29,595
US government and agency securities [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized cost 42,088 134,962
Gross unrealized gains 7 1
Gross unrealized losses (62) (374)
Estimated fair value $ 42,033 $ 134,589
v3.6.0.2
Investments - Additional Information (Detail)
 12 Months Ended
Dec. 31, 2016
USD ($)
security
Dec. 31, 2015
USD ($)
Available-for-sale Securities [Abstract]    
Contractual maturities term (maximum) 24 months  
Other-than-temporary impairments considered $ 0  
Available-for-sale, securities in unrealized loss positions | security 274  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments $ 498,124,000 $ 388,945,000
Long-term investments- due in one year through two years 262,658,000  
Estimated fair value 760,782,000 811,612,000
Other assets [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cost method investments $ 11,000,000.0 $ 10,500,000
v3.6.0.2
Investments - Fair Values and Gross Unrealized Losses of Available-for-Sale Securities Aggregated by Investment Category (Detail) - USD ($)
$ in Thousands
Dec. 31, 2016
Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value $ 522,536 $ 716,830
Available-for-sale securities, continuous unrealized loss position, less than twelve months, accumulated loss (1,592) (2,326)
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, fair value 47,940 60,099
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, accumulated loss (60) (130)
Fair value 570,476 776,929
Gross unrealized losses (1,652) (2,456)
Commercial paper [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value   24,913
Available-for-sale securities, continuous unrealized loss position, less than twelve months, accumulated loss   (38)
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, fair value   0
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, accumulated loss   0
Fair value   24,913
Gross unrealized losses   (38)
Corporate notes and bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value 492,503 539,586
Available-for-sale securities, continuous unrealized loss position, less than twelve months, accumulated loss (1,530) (1,897)
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, fair value 47,940 60,099
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, accumulated loss (60) (130)
Fair value 540,443 599,685
Gross unrealized losses (1,590) (2,027)
Certificates of deposit [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value   19,750
Available-for-sale securities, continuous unrealized loss position, less than twelve months, accumulated loss   (17)
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, fair value   0
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, accumulated loss   0
Fair value   19,750
Gross unrealized losses   (17)
US government and agency securities [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities, continuous unrealized loss position, less than twelve months, fair value 30,033 132,581
Available-for-sale securities, continuous unrealized loss position, less than twelve months, accumulated loss (62) (374)
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, fair value 0 0
Available-for-sale securities, continuous unrealized loss position, twelve months or longer, accumulated loss 0 0
Fair value 30,033 132,581
Gross unrealized losses $ (62) $ (374)
v3.6.0.2
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($)
$ in Thousands
Dec. 31, 2016
Dec. 31, 2015
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments $ 760,782 $ 811,612
Total 926,409 1,078,246
Commercial paper [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 56,839 32,394
Corporate notes and bonds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 626,555 615,034
Certificates of deposit [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 35,355 29,595
US government and agency securities [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 42,033 134,589
Cash equivalents [Member] | Money market funds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Cash equivalents 165,627 263,515
Cash equivalents [Member] | Commercial paper [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Cash equivalents   2,000
Cash equivalents [Member] | Corporate notes and bonds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Cash equivalents   1,119
Short-term investments [Member] | Commercial paper [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 56,839 32,394
Short-term investments [Member] | Corporate notes and bonds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 388,429 303,567
Short-term investments [Member] | Certificates of deposit [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 35,355 23,736
Short-term investments [Member] | US government and agency securities [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 17,501 29,248
Other long-term investments [Member] | Corporate notes and bonds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 238,125 311,467
Other long-term investments [Member] | Certificates of deposit [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments   5,859
Other long-term investments [Member] | US government and agency securities [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 24,533 105,341
Level 1 [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Total 165,627 263,515
Level 1 [Member] | Cash equivalents [Member] | Money market funds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Cash equivalents 165,627 263,515
Level 1 [Member] | Cash equivalents [Member] | Commercial paper [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Cash equivalents   0
Level 1 [Member] | Cash equivalents [Member] | Corporate notes and bonds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Cash equivalents   0
Level 1 [Member] | Short-term investments [Member] | Commercial paper [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 0 0
Level 1 [Member] | Short-term investments [Member] | Corporate notes and bonds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 0
Level 1 [Member] | Short-term investments [Member] | Certificates of deposit [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 0 0
Level 1 [Member] | Short-term investments [Member] | US government and agency securities [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 0 0
Level 1 [Member] | Other long-term investments [Member] | Corporate notes and bonds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 0 0
Level 1 [Member] | Other long-term investments [Member] | Certificates of deposit [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments   0
Level 1 [Member] | Other long-term investments [Member] | US government and agency securities [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 0 0
Level 2 [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Total 760,782 814,731
Level 2 [Member] | Cash equivalents [Member] | Money market funds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Cash equivalents 0 0
Level 2 [Member] | Cash equivalents [Member] | Commercial paper [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Cash equivalents   2,000
Level 2 [Member] | Cash equivalents [Member] | Corporate notes and bonds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Cash equivalents   1,119
Level 2 [Member] | Short-term investments [Member] | Commercial paper [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 56,839 32,394
Level 2 [Member] | Short-term investments [Member] | Corporate notes and bonds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 388,429 303,567
Level 2 [Member] | Short-term investments [Member] | Certificates of deposit [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 35,355 23,736
Level 2 [Member] | Short-term investments [Member] | US government and agency securities [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 17,501 29,248
Level 2 [Member] | Other long-term investments [Member] | Corporate notes and bonds [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments 238,125 311,467
Level 2 [Member] | Other long-term investments [Member] | Certificates of deposit [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments   5,859
Level 2 [Member] | Other long-term investments [Member] | US government and agency securities [Member]    
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]    
Investments $ 24,533 $ 105,341
v3.6.0.2
Business Combinations BrightPoint Security (Details) - USD ($)
$ in Thousands
Jun. 03, 2016
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Business Acquisition [Line Items]        
Goodwill   $ 82,534 $ 55,669 $ 55,016
BrightPoint Security [Member]        
Business Acquisition [Line Items]        
Consideration transferred $ 19,629      
Goodwill 15,258      
Net tangible liabilities acquired (1,339)      
Net deferred tax liabilities(1) [1] (2,890)      
Customer Contracts [Member] | BrightPoint Security [Member]        
Business Acquisition [Line Items]        
Intangible assets: $ 500      
Intangible assets useful life 1 year 6 months      
Developed Technology Rights [Member] | BrightPoint Security [Member]        
Business Acquisition [Line Items]        
Intangible assets: $ 8,100      
Intangible assets useful life 6 years      
[1] Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets.
v3.6.0.2
Business Combinations ITapp (Details) - USD ($)
$ in Thousands
Apr. 08, 2016
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Business Acquisition [Line Items]        
Goodwill   $ 82,534 $ 55,669 $ 55,016
General and Administrative Expense        
Business Acquisition [Line Items]        
Business acquisition, transaction costs   $ 1,000    
ITapp [Member]        
Business Acquisition [Line Items]        
Net tangible assets acquired $ 140      
Goodwill 11,437      
Net deferred tax liabilities(1) [1] (2,015)      
Consideration transferred 14,462      
Customer Contracts [Member] | ITapp [Member]        
Business Acquisition [Line Items]        
Intangible assets: $ 200      
Intangible assets useful life 1 year 6 months      
Developed Technology Rights [Member] | ITapp [Member]        
Business Acquisition [Line Items]        
Intangible assets: $ 4,700      
Intangible assets useful life 5 years      
[1] Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets.
v3.6.0.2
Business Combinations (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Jul. 11, 2014
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Business Acquisition [Line Items]        
Payments to acquire businesses, net of cash acquired   $ 34,297 $ 1,100 $ 99,813
Goodwill   $ 82,534 $ 55,669 $ 55,016
Weighted-average shares used to compute net loss per share - basic and diluted   164,533,823 155,706,643 145,355,543
Neebula Systems Ltd. [Member]        
Business Acquisition [Line Items]        
Payments to acquire businesses, net of cash acquired $ 100,000      
Net tangible liabilities acquired 102      
Goodwill 53,788      
Net deferred tax liabilities(1) [1] (10,527)      
Business combination, recognized identifiable assets acquired, goodwill, and liabilities assumed, net 100,463      
Business acquisition, transaction costs 1,200      
Business acquisition, pro forma revenue       $ 683,426
Business acquisition, pro forma net income (loss)       $ (189,457)
Weighted-average shares used to compute net loss per share - basic and diluted       145,355,543
Business acquisition, pro forma earnings per share, basic (in USD per share)       $ (1.30)
Business acquisition, pro forma earnings per share, diluted (in USD per share)       $ (1.30)
Neebula Systems Ltd. [Member] | Developed Technology Rights [Member]        
Business Acquisition [Line Items]        
Business combination, recognized identifiable assets acquired and liabilities assumed, intangible assets, other than goodwill $ 56,200      
Intangible assets useful life 5 years 6 months      
Neebula Systems Ltd. [Member] | Order or production backlog [Member]        
Business Acquisition [Line Items]        
Business combination, recognized identifiable assets acquired and liabilities assumed, intangible assets, other than goodwill $ 600      
Intangible assets useful life 1 year 6 months      
Neebula Systems Ltd. [Member] | Trade names [Member]        
Business Acquisition [Line Items]        
Business combination, recognized identifiable assets acquired and liabilities assumed, intangible assets, other than goodwill $ 300      
Intangible assets useful life 1 year 6 months      
BrightPoint Security and ITapp [Member]        
Business Acquisition [Line Items]        
Business acquisition, pro forma revenue   $ 1,391,220 $ 1,007,752  
Business acquisition, pro forma net income (loss)   $ (455,146) $ (207,748)  
Weighted-average shares used to compute net loss per share - basic and diluted   164,533,823 155,706,643  
Business acquisition, pro forma earnings per share, basic (in USD per share)   $ (2.77) $ (1.33)  
Business acquisition, pro forma earnings per share, diluted (in USD per share)   $ (2.77) $ (1.33)  
[1] Deferred tax liabilities, net primarily relates to purchased identifiable intangible assets and is shown net of deferred tax assets.
v3.6.0.2
Schedule of Goodwill (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Goodwill [Roll Forward]      
Goodwill $ 82,534 $ 55,669 $ 55,016
Goodwill acquired 26,695 1,442  
Foreign currency translation adjustment $ 170 $ (789)  
v3.6.0.2
Schedule of Intangible Assets (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible assets, gross (excluding goodwill) $ 98,591 $ 61,839  
Accumulated amortization (32,737) (18,834)  
Intangible assets, net (excluding goodwill) 65,854 43,005  
Amortization of intangible assets 15,100 11,800 $ 6,800
Developed Technology Rights [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible assets, gross (excluding goodwill) 79,206 58,144  
Accumulated amortization (30,858) (17,463)  
Intangible assets, net (excluding goodwill) 48,348 $ 40,681  
Acquired finite-lived intangible assets, weighted average useful life (in years)   5 years  
Patents [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible assets, gross (excluding goodwill) 17,610 $ 1,750  
Accumulated amortization (867) 0  
Intangible assets, net (excluding goodwill) $ 16,743 1,750  
Acquired finite-lived intangible assets, weighted average useful life (in years) 9 years    
Other acquisition-related intangible assets [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible assets, gross (excluding goodwill) $ 1,775 1,945  
Accumulated amortization (1,012) (1,371)  
Intangible assets, net (excluding goodwill) 763 574  
Intellectual Property [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible assets, net (excluding goodwill) $ 25,000 $ 1,800  
v3.6.0.2
Schedule of Estimated Future Amortization of Intangible Assets (Details)
$ in Thousands
Dec. 31, 2016
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
2017 $ 16,910
2018 15,762
2019 15,682
2020 6,072
2021 4,170
Thereafter 7,258
Total future amortization expense $ 65,854
v3.6.0.2
Property and Equipment (Detail) - USD ($)
$ in Thousands
Dec. 31, 2016
Dec. 31, 2015
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 332,363 $ 246,077
Less: accumulated depreciation (150,743) (101,363)
Total property and equipment, net 181,620 144,714
Computer equipment and software    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 254,780 180,197
Leasehold Improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 37,095 31,659
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 31,574 26,017
Building    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 6,379 6,318
Construction in Progress [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 2,535 $ 1,886
v3.6.0.2
Property and Equipment - Additional Information (Detail) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Property, Plant and Equipment [Abstract]      
Depreciation $ 67.8 $ 48.5 $ 35.3
v3.6.0.2
Accrued Expenses and Other Current Liabilities - (Detail) - USD ($)
$ in Thousands
Dec. 31, 2016
Dec. 31, 2015
Accrued Liabilities, Current [Abstract]    
Taxes payable $ 19,472 $ 9,080
Bonuses and commissions 67,259 33,124
Accrued compensation 30,816 17,089
Other employee expenses 28,812 21,529
Other 25,277 20,442
Total accrued expenses and other current liabilities $ 171,636 $ 101,264
v3.6.0.2
Convertible Senior Notes (Details)
$ / shares in Units, shares in Millions
 1 Months Ended 12 Months Ended
Nov. 30, 2013
USD ($)
shares
day
$ / shares
Dec. 31, 2016
USD ($)
Dec. 31, 2014
USD ($)
Dec. 31, 2015
USD ($)
Convertible Notes Payable [Abstract]        
Contractual interest rate - Notes 0.00%      
Notes, par value $ 575,000,000 $ 575,000,000   $ 575,000,000
Converted number of shares | shares 7.8      
Conversion rate (in USD per share) 13.54      
Conversion of notes, base conversion price $ 1,000      
Initial conversion price (in USD per share) | $ / shares $ 73.88      
Terms of conversion feature Jul. 01, 2018      
Earliest date of conversion Mar. 31, 2014      
Number of days out of 30 that common stock price exceeded conversion price, days | day 20      
Debt Conversion [Line Items]        
Number of consecutive trading days in a period 30 days      
Percentage of purchase price of Notes which should be paid upon fundamental change 100.00%      
Fair value of Notes   $ 681,400,000   741,800,000
Fair value measurement debt basis amount       $ 100
Remaining life of the Notes   22 months    
Note hedged shares of common stock covered | shares 7.8      
Purchase of convertible note hedge     $ 135,800,000  
Issuance of warrants (in shares) | shares 7.8      
Exercise price of warrants issued (in USD per share) | $ / shares $ 107.46      
Proceeds from issuance of warrants $ 84,500,000      
Measurement period [Member]        
Debt Conversion [Line Items]        
Number of consecutive trading days in a period 5 days      
Debt instrument, convertible, threshold trading days 5 days      
Minimum | Calendar quarter end [Member]        
Debt Conversion [Line Items]        
Threshold percentage of stock price trigger 130.00%      
Maximum | Measurement period [Member]        
Debt Conversion [Line Items]        
Threshold percentage of stock price trigger 98.00%      
v3.6.0.2
Convertible Senior Notes - Schedule of Notes Payable (Details) - USD ($)
Dec. 31, 2016
Dec. 31, 2015
Nov. 30, 2013
Convertible Notes Payable [Abstract]      
Notes, par value $ 575,000,000 $ 575,000,000 $ 575,000,000
Less: debt discount, net of amortization (67,188,000) (100,466,000)  
Convertible senior notes, net $ 507,812,000 $ 474,534,000  
v3.6.0.2
Convertible Senior Notes - Schedule of Interest Expense Recognized (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Convertible Notes Payable [Abstract]      
Amortization of debt issuance cost $ 1,785 $ 1,668 $ 1,558
Amortization of debt discount 31,493 29,429 27,501
Amortization of debt discount and issuance costs $ 33,278 $ 31,097 $ 29,059
Effective interest rate of the liability component 6.50% 6.50% 6.50%
v3.6.0.2
Accumulated Other Comprehensive Loss - (Details) - USD ($)
$ in Thousands
Dec. 31, 2016
Dec. 31, 2015
Statement of Comprehensive Income [Abstract]    
Foreign currency translation adjustment $ (19,277) $ (14,438)
Net unrealized loss on investments, net of tax (1,856) (2,444)
Accumulated other comprehensive loss $ (21,133) $ (16,882)
v3.6.0.2
Stockholders' Equity - Additional Information (Detail) - shares
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Stockholders' Equity      
Shares of common stock, authorized 600,000,000 600,000,000  
Shares of common stock, issued and sold (in shares) 167,430,773 160,785,764  
Preferred stock, shares authorized 10,000,000 10,000,000  
Preferred Stock, shares outstanding 0 0  
Common stock      
Stockholders' Equity      
Common stock issued under employee stock plans (in shares) 6,645,009 11,276,672 9,154,487
v3.6.0.2
Stockholders' Equity - Outstanding and Reserved Shares of Common Stock for Future Issuance (Detail) - shares
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Common stock outstanding and reserved shares of common stock for future issuance      
Options outstanding (in shares) 5,818,435 8,255,554 15,897,422
Total reserved shares of common stock for future issuance 47,508,915    
2012 Equity Incentive Plan [Member]      
Common stock outstanding and reserved shares of common stock for future issuance      
Total reserved shares of common stock for future issuance [1] 20,901,395    
2012 Employee Stock Purchase Plan [Member]      
Common stock outstanding and reserved shares of common stock for future issuance      
Total reserved shares of common stock for future issuance [1] 8,566,803    
Stock options [Member]      
Common stock outstanding and reserved shares of common stock for future issuance      
Options outstanding (in shares) 5,818,435    
Restricted Stock Units (RSUs) [Member]      
Common stock outstanding and reserved shares of common stock for future issuance      
RSUs (in shares) 12,222,282 12,417,805 9,941,074
[1] Refer to Note 12 for a description of these plans.
v3.6.0.2
Stock Awards - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Jan. 01, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Shares of common stock, authorized   600,000,000 600,000,000  
Shares of common stock reserved for issuance   47,508,915    
Total intrinsic value of options exercised   $ 157,774 $ 523,127 $ 406,600
Weighted-average grant date fair value of options granted (in USD per share)   $ 28.01 $ 32.64 $ 29.66
Fair value of vested shares   $ 17,000 $ 34,500 $ 39,100
Total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options   $ 18,900    
Weighted-average remaining vesting period   2 years 10 months 2 days    
Restricted Stock Units (RSUs) [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Compensation expense recognized, vesting term (in years)   4 years    
Restricted stock units (RSUs) granted in period   6,870,285 6,941,008  
Unrecognized compensation expense expected to be recognized   $ 570,400    
Weighted-average remaining vesting period   2 years 9 months 10 days    
Performance shares [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Allocated share-based compensation expense   $ 36,100 $ 30,800 $ 19,200
Share-based compensation award, tranche one [Member] | Performance shares [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Compensation expense recognized, vesting term (in years)   3 months    
Share-based compensation award, tranche two [Member] | Performance shares [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Compensation expense recognized, vesting term (in years)   3 months    
Share-based compensation award, tranche three [Member] | Performance shares [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Compensation expense recognized, vesting term (in years)   3 months    
Share-based compensation award, tranche four [Member] | Performance shares [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Compensation expense recognized, vesting term (in years)   3 months    
2005 Stock Option Plan [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Shares of common stock, authorized   52,968,233    
2012 Equity Incentive Plan [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Shares of common stock, authorized   45,063,064    
Number of shares of common stock outstanding, increase, percentage   5.00%    
2012 Employee Stock Purchase Plan [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares of common stock outstanding, increase, percentage   1.00%    
Offering period   6 months    
Shares of common stock reserved for issuance   8,566,803    
2005 Stock Plan and 2012 Plan [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock options granted to new employees vest, percentage per annum   25.00%    
Requisite service period to vest employment continuation period   3 years    
Options granted, exercisable period   10 years    
Subsequent event [Member] | 2012 Equity Incentive Plan [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Shares of common stock automatically added 8,371,539      
Subsequent event [Member] | 2012 Employee Stock Purchase Plan [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Shares of common stock automatically added 1,674,308      
v3.6.0.2
Stock Awards - Summary of Stock Option Activity (Detail) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Summary of Stock Option Activity      
Number of shares, outstanding, beginning balance 8,255,554 15,897,422  
Number of shares, granted 617,985 316,048  
Number of shares, exercised (2,587,173) (7,695,815)  
Number of shares, canceled (467,931) (262,101)  
Number of shares, outstanding, ending balance 5,818,435 8,255,554 15,897,422
Number of shares, vested and expected to vest 5,721,902    
Number of shares, vested and exercisable 4,968,001    
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]      
Weighted-average exercise price, outstanding, beginning balance, (in USD per share) $ 16.65 $ 11.96  
Weighted-average exercise price, granted, (in USD per share) 71.17 75.76  
Weighted-average exercise price, exercised, (in USD per share) 13.36 8.89  
Weighted-average exercise price, forfeited, (in USD per share) 58.01 31.31  
Weighted-average exercise price, outstanding, ending balance, (in USD per share) 20.57 $ 16.65 $ 11.96
Weighted-average exercise price, vested and expected to vest, (in USD per share) 19.72    
Weighted-average exercise price, vested and exercisable, (in USD per share) $ 12.53    
Weighted-average remaining contractual life (in years) 5 years 5 months 4 days    
Weighted-average remaining contractual term, vested and expected to vest (in years) 5 years 4 months 9 days    
Weighted-average remaining contractual term, vested and exercisable (in years) 4 years 10 months 6 days    
Total intrinsic value of options exercised $ 157,774 $ 523,127 $ 406,600
Aggregate intrinsic value, outstanding 313,823    
Aggregate intrinsic value, vested and expected to vest 313,398    
Aggregate intrinsic value, vested and exercisable $ 307,276    
v3.6.0.2
Stock Awards Stock Awards - Restricted Stock Unit Table (Details) - Restricted Stock Units (RSUs) [Member] - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Class of Stock [Line Items]      
Compensation expense recognized, vesting term (in years) 4 years    
Shares Outstanding      
Non-vested shares units beginning balance 12,417,805 9,941,074  
Restricted stock units (RSUs) granted in period 6,870,285 6,941,008  
Number of shares, vested (5,213,662) (3,290,220)  
Number of shares, forfeited (1,852,146) (1,174,057)  
Non-vested shares units ending balance 12,222,282 12,417,805 9,941,074
Expected to vest 10,221,726    
Weighted-Average Grant Date Fair Value      
Weighted-average grant date fair value, outstanding, beginning balance, (in USD per share) $ 63.38 $ 51.19  
Weighted-average grant date fair value, granted (in USD per share) 61.22 73.98  
Weighted-average grant date fair value, vested, ( in USD per share) 59.95 50.25  
Weighted-average grant date fair value, repurchased (in USD per share) 63.18 59.67  
Weighted-average grant date fair value, outstanding, ending balance, (in USD per share) $ 63.66 $ 63.38 $ 51.19
Aggregate intrinsic value, vested $ 354,320 $ 254,691 $ 73,700
Aggregate intrinsic value, non-vested 908,604    
Aggregated intrinsic value, expected to vest $ 759,883    
v3.6.0.2
Stock-Based Compensation (Detail)
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Employee stock purchase plan [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected volatility, minimum 31.00% 31.00% 33.00%
Expected volatility, maximum 49.00% 49.00% 49.00%
Expected term 6 months 6 months 6 months
Risk-free interest rate, minimum 0.17% 0.05% 0.05%
Risk-free interest rate, maximum 0.47% 0.17% 0.08%
Dividend yield 0.00% 0.00% 0.00%
Common stock options [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected volatility, minimum 41.00% 41.00% 47.00%
Expected volatility, maximum 42.00% 46.00% 50.00%
Expected term     6 years 29 days
Risk-free interest rate, minimum 1.18% 1.48% 1.78%
Risk-free interest rate, maximum 1.87% 1.94% 2.06%
Dividend yield 0.00% 0.00% 0.00%
Common stock options [Member] | Minimum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected term 4 years 10 months 21 days 5 years 6 months  
Common stock options [Member] | Maximum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected term 5 years 7 months 7 days 6 years 29 days  
v3.6.0.2
Net Loss Per Share - Calculation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Detail) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Numerator:      
Net loss $ (451,804) $ (198,426) $ (179,387)
Denominator:      
Weighted-average shares used to compute net loss per share - basic and diluted 164,533,823 155,706,643 145,355,543
Net loss per share- basic and diluted (in USD per share) $ (2.75) $ (1.27) $ (1.23)
v3.6.0.2
Net Loss Per Share - Summary of Potentially Dilutive Securities (Detail) - shares
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total potentially dilutive securities (in shares) 33,973,292 36,494,133 41,690,433
Common stock options [Member]      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total potentially dilutive securities (in shares) 5,818,435 8,255,554 15,897,422
Restricted Stock Units (RSUs) [Member]      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total potentially dilutive securities (in shares) 12,222,282 12,417,805 9,941,074
Common stock subject to repurchase [Member]      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total potentially dilutive securities (in shares) 0 0 13,597
ESPP obligations [Member]      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total potentially dilutive securities (in shares) 366,529 254,728 272,294
Convertible senior notes [Member]      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total potentially dilutive securities (in shares) 7,783,023 7,783,023 7,783,023
Warrants [Member]      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total potentially dilutive securities (in shares) 7,783,023 7,783,023 7,783,023
v3.6.0.2
Income Taxes - Components of Provision for Income Taxes (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Current provision:      
Federal $ (55) $ 682 $ 2
State 135 211 216
Foreign 5,097 6,125 5,046
Total current provision 5,177 7,018 5,264
Deferred provision:      
Federal (4,462) 0 (232)
State (746) 0 (24)
Foreign 1,784 (1,604) (1,161)
Total deferred provision (3,424) (1,604) (1,417)
Provision for income taxes $ 1,753 $ 5,414 $ 3,847
v3.6.0.2
Income Taxes - Components of Loss From Continuing Operations Before Income Taxes (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]      
United States $ (432,631) $ (150,593) $ (109,087)
Foreign (17,420) (42,419) (66,453)
Loss before provision for income taxes $ (450,051) $ (193,012) $ (175,540)
v3.6.0.2
Income Taxes - Reconciliation of Federal Income Tax Rate (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]      
Tax computed at the federal statutory rate $ (153,017) $ (65,624) $ (59,684)
State taxes, net of federal benefit 37 53 95
Tax rate differential for international subsidiaries 10,910 18,681 26,169
Stock-based compensation (27,133) 13,597 9,049
Tax credits (16,452) (11,961) (9,481)
Other 2,642 2,865 2,231
Valuation allowance 184,766 47,803 35,468
Provision for income taxes $ 1,753 $ 5,414 $ 3,847
v3.6.0.2
Income Taxes - Reconciliation of Deferred Tax Assets and Liabilities (Detail) - USD ($)
$ in Thousands
Dec. 31, 2016
Dec. 31, 2015
Deferred tax assets:    
Net operating loss carryforwards $ 640,312 $ 27,570
Accrued expenses 10,424 6,030
Credit carryforwards 50,559 32,824
Stock-based compensation 46,530 53,249
Note Hedge 20,520 30,593
Other 13,733 12,025
Total deferred tax assets 782,078 162,291
Less valuation allowance (728,870) (110,311)
Deferred tax assets net 53,208 51,980
Deferred tax liabilities:    
Depreciation (18,914) (13,103)
Convertible notes (23,605) (35,054)
Other 0 (4)
Net deferred tax assets $ 10,689 $ 3,819
v3.6.0.2
Income Taxes - Additional Information (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Taxes [Line Items]        
Net operating losses, federal $ 1,700,000      
Tax credit carryforwards 50,559 $ 32,824    
Net operating losses, state 941,700      
Deferred tax assets, gross 782,078 162,291    
Valuation allowance comparison 618,600      
Operating loss carryforwards 186,500      
Total unrecognized tax benefit 18,440 11,737 $ 9,158 $ 4,810
Unrecognized tax benefits that would impact effective tax rate 4,000      
Unrecognized tax benefits, income tax interest and penalties accrued 400 $ 500    
Federal [Member]        
Income Taxes [Line Items]        
Tax credit carryforwards 40,500      
State [Member]        
Income Taxes [Line Items]        
Tax credit carryforwards 32,500      
Foreign Tax Authority [Member]        
Income Taxes [Line Items]        
Deferred tax assets, gross 10,700      
Accounting Standards Update 2016-09 [Member]        
Income Taxes [Line Items]        
Operating loss carryforwards $ 417,000      
v3.6.0.2
Income Taxes - Reconciliation of Beginning and Ending Balance of Total Unrecognized Tax Benefits (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Reconciliation of beginning and ending balance of total unrecognized tax benefits      
Beginning balance $ 11,737 $ 9,158 $ 4,810
Gross increases - tax positions in prior year 1,122 2 45
Gross decreases - tax positions in prior period (50) (1,017) (313)
Gross increases - tax positions in current period 5,673 3,768 4,704
Gross decreases -tax positions in current period 0 (73) 0
Lapse of statue of limitations (42) (101) (88)
Ending balance $ 18,440 $ 11,737 $ 9,158
v3.6.0.2
Commitments and Contingencies - Additional Information (Detail)
 1 Months Ended 12 Months Ended
Aug. 15, 2015
Apr. 30, 2013
USD ($)
Dec. 31, 2016
USD ($)
Dec. 31, 2015
USD ($)
ft²
Dec. 31, 2014
USD ($)
Feb. 28, 2017
USD ($)
Nov. 30, 2013
USD ($)
Nov. 30, 2012
ft²
Operating Leased Assets [Line Items]                
Rent expense     $ 34,200,000 $ 22,000,000.0 $ 15,000,000.0      
Convertible senior notes, net     507,812,000 474,534,000        
Notes, par value     575,000,000 $ 575,000,000     $ 575,000,000  
Litigation settlement, amount     (270,000,000.0)          
Santa Clara Office Lease [Member]                
Operating Leased Assets [Line Items]                
Area of building under lease (in sq. ft) | ft²               148,704
Operating leases, term of contract   11 years            
Rent payments   $ 48,800,000            
Santa Clara Office Lease Two [Member]                
Operating Leased Assets [Line Items]                
Area of building under lease (in sq. ft) | ft²       328,867        
Operating leases, term of contract 12 years              
Rent payments       $ 151,100,000        
Operating leases, renewal term 5 years              
Cost of sales [Member]                
Operating Leased Assets [Line Items]                
Service charges and operating lease expense     $ 17,300,000 $ 13,700,000 $ 13,100,000      
Subsequent event [Member]                
Operating Leased Assets [Line Items]                
Rent payments           $ 52,100,000    
Subsequent event [Member] | San Diego Office Lease [Member]                
Operating Leased Assets [Line Items]                
Rent payments           $ 29,600,000    
v3.6.0.2
Commitments and Contingencies - Annual Future Minimum Payments Under Operating Leases / Facility Exit Obligation (Detail)
$ in Thousands
Dec. 31, 2016
USD ($)
Operating Leases, Rent Expense, Net of Sublease Income [Abstract]  
2017 $ 33,855
2018 35,887
2019 36,042
2020 35,197
2021 34,847
Thereafter 122,643
Operating leases, net of sublease income, total 298,471
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity Schedule [Abstract]  
2017 17,933 [1]
2018 13,401 [1]
Unrecorded Unconditional Purchase Obligation, Due within Three Years 6,529 [1]
2020 3,950 [1]
2021 2,127 [1]
Thereafter 0 [1]
Purchase obligation, total 43,940 [1]
Other Commitment, Fiscal Year Maturity [Abstract]  
2017 517
2018 517
2019 517
2020 517
2021 517
Thereafter 1,465
Other commitment, total 4,050
Annual future minimum payments under these operating leases  
2017 52,305
2018 49,805
2019 43,088
2020 39,664
2021 37,491
Thereafter 124,108
Total minimum lease payments 346,461
Operating leases, cancellation penalty $ 18,100
[1] Consists of future minimum payments under non-cancelable purchase commitments primarily related to data center and IT operations. Not included in the table above are certain purchase commitments related to our future Knowledge user conferences. If we were to cancel these agreements as of December 31, 2016, we would have been obligated to pay cancellation penalties of approximately $18.1 million in aggregate.
v3.6.0.2
Information about Geographic Areas and Products- Revenues by Geographic Areas (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Segment Reporting Information [Line Items]      
Revenues $ 1,390,513 $ 1,005,480 $ 682,563
Revenues by geography      
Percentage of North America revenues 95.00% 95.00% 94.00%
North America      
Segment Reporting Information [Line Items]      
Revenues [1] $ 946,956 $ 702,985 $ 465,332
EMEA [Member]      
Segment Reporting Information [Line Items]      
Revenues [2] 339,341 233,378 173,635
Asia Pacific and other      
Segment Reporting Information [Line Items]      
Revenues $ 104,216 $ 69,117 $ 43,596
[1] Revenues attributed to the United States were approximately 95% of North America revenues for the years ended December 31, 2016 and 2015, and 94% for the year ended December 31, 2014
[2] Europe, the Middle East and Africa (EMEA
v3.6.0.2
Information about Geographic Areas and Products- Long-lived Assets by Geographic Area (Detail) - USD ($)
$ in Thousands
Dec. 31, 2016
Dec. 31, 2015
Segment Reporting Information [Line Items]    
Long-lived assets $ 181,620 $ 144,714
Percentage of U.S. long-lived assets in North America 92.00% 98.00%
North America    
Segment Reporting Information [Line Items]    
Long-lived assets [1] $ 132,671 $ 104,085
EMEA [Member]    
Segment Reporting Information [Line Items]    
Long-lived assets [2] 37,449 32,027
Asia Pacific and other    
Segment Reporting Information [Line Items]    
Long-lived assets $ 11,500 $ 8,602
[1] Property and equipment, net attributed to the United States were approximately 92% and 98% of property and equipment, net attributable to North America for the years ended December 31, 2016 and 2015, respectively.
[2] Europe, the Middle East and Africa (EMEA
v3.6.0.2
Information about Geographic Areas and Products - Subscription Revenues by Products (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Segments, Geographical Areas [Abstract]      
Service Management solutions $ 1,108,846 $ 783,603 $ 532,045
IT Operations Management solutions 112,793 64,675 35,172
Total subscription revenues $ 1,221,639 $ 848,278 $ 567,217
v3.6.0.2
Subsequent Events (Details)
$ in Millions
Jan. 20, 2017
USD ($)
DxContinuum [Member] | Subsequent event [Member]  
Subsequent Event [Line Items]  
Consideration transferred $ 15.0