CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
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Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 4,702 | $ 5,787 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 |
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Sep. 30, 2020 |
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Income Statement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | $ 346,974 | $ 261,926 | $ 963,238 | $ 746,066 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenue | [1] | 70,226 | 62,819 | 197,863 | 184,036 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross profit | 276,748 | 199,107 | 765,375 | 562,030 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and development | [1] | 92,112 | 64,842 | 248,721 | 184,266 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales and marketing | [1] | 172,828 | 123,737 | 495,596 | 369,442 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | [1] | 50,716 | 38,854 | 139,667 | 109,427 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total operating expenses | [1] | 315,656 | 227,433 | 883,984 | 663,135 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating loss | (38,908) | (28,326) | (118,609) | (101,105) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other income (expense), net: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | (14,762) | (14,087) | (43,768) | (29,060) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | 0 | 0 | 0 | (25,950) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and other income (expense), net | 2,386 | 3,683 | 8,430 | 12,750 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other income (expense), net | (12,376) | (10,404) | (35,338) | (42,260) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss before provision for income taxes | (51,284) | (38,730) | (153,947) | (143,365) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for income taxes | 3,133 | 1,973 | 7,842 | 4,777 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | $ (54,417) | $ (40,703) | $ (161,789) | $ (148,142) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss per share, basic (in usd per share) | $ (0.45) | $ (0.35) | $ (1.36) | $ (1.29) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss per share, diluted (in usd per share) | $ (0.45) | $ (0.35) | $ (1.36) | $ (1.29) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average shares used to compute net loss per share, basic (in shares) | 120,164 | 115,809 | 119,050 | 114,653 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average shares used to compute net loss per share, diluted (in shares) | 120,164 | 115,809 | 119,050 | 114,653 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
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Share-based compensation | $ 168,601 | $ 132,057 | ||
Cost of revenue | ||||
Share-based compensation | $ 5,343 | $ 4,831 | 15,047 | 15,077 |
Research and development | ||||
Share-based compensation | 17,189 | 13,921 | 49,886 | 39,076 |
Sales and marketing | ||||
Share-based compensation | 24,915 | 19,335 | 72,648 | 53,467 |
General and administrative | ||||
Share-based compensation | $ 12,086 | $ 8,176 | $ 31,020 | $ 24,437 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
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Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (54,417) | $ (40,703) | $ (161,789) | $ (148,142) |
Other comprehensive (loss) income, before tax: | ||||
Net unrealized (loss) gain on available-for-sale investments | (863) | (1,361) | (3,664) | 2,817 |
Net unrealized (loss) gain on derivative instruments | (2,354) | 388 | (7,972) | (848) |
Other comprehensive (loss) income, before tax | (3,217) | (973) | (11,636) | 1,969 |
Tax effect | 0 | 699 | 0 | 0 |
Other comprehensive (loss) income, net of tax | (3,217) | (274) | (11,636) | 1,969 |
Comprehensive loss | $ (57,634) | $ (40,977) | $ (173,425) | $ (146,173) |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands |
9 Months Ended |
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Sep. 30, 2020
USD ($)
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Statement of Cash Flows [Abstract] | |
Payments of debt issuance costs associated with convertible notes | $ 21,010 |
Overview and Basis of Presentation |
9 Months Ended |
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Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview and Basis of Presentation | Overview and Basis of Presentation Company and Background Zendesk was founded in Denmark in 2007 and reincorporated in Delaware in April 2009. We are a software development company that provides software as a service, or SaaS, solutions that are intended to help organizations and their customers build better experiences. Our customer experience solutions are built upon a modern architecture that enables us and our customers to rapidly innovate, adapt our technology in novel ways, and easily integrate with other products and applications. With our origins in customer service, we have evolved our offerings over time to product and platform solutions that work together to help organizations understand the broader customer journey, improve communications across all channels, and engage where and when it’s needed most. References to Zendesk, the “Company,” “our,” or “we” in these notes refer to Zendesk, Inc. and its subsidiaries on a consolidated basis. Basis of Presentation These unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K, for the year ended December 31, 2020, filed with the SEC on February 12, 2021. There have been no changes to our significant accounting policies described in the Annual Report on Form 10-K that have had a material impact on our condensed consolidated financial statements and related notes. The consolidated balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date. The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly our financial position, results of operations, comprehensive loss, stockholders’ equity, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2021. Use of Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reported periods. Significant items subject to such estimates and assumptions include: •the estimate of variable consideration related to revenue recognition; •the estimate of credit losses for accounts receivable and marketable securities; •the fair value and useful lives of acquired intangible assets; •the capitalization and useful life of capitalized costs to obtain customer contracts; •the valuation of strategic investments; •the fair value and useful lives of property and equipment; •the capitalization and useful lives of internal-use software; •the lease term and incremental borrowing rate for lease liabilities; •the fair value of our convertible senior notes; •the fair value of asset retirement obligations; •the fair value and expense recognition for certain share-based awards; •the preparation of financial forecasts used in currency hedging; •the recognition and measurement of legal contingencies; and •the recognition of tax benefits and forecasts used to determine our effective tax rate. As of the date of issuance of the financial statements, we are not aware of any material specific events or circumstances that would require us to update our estimates, judgments, or to revise the carrying values of our assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements. Concentrations of Risk As of September 30, 2021 and December 31, 2020, no customers represented 10% or greater of our total accounts receivable balance. There were no customers that individually exceeded 10% of our revenue during the three and nine months ended September 30, 2021 or 2020. Recently Issued Accounting Pronouncements In August 2020, the Financial Accounting Standards Board, or FASB, issued ASU 2020-06, regarding ASC Topic 470 “Debt” and ASC Topic 815 “Derivatives and Hedging,” which reduces the number of accounting models for convertible instruments, including amending the calculation of diluted earnings per share and the balance sheet presentation of those instruments, as well as the resulting recognition of interest expense, among other changes. The guidance is effective for annual reporting periods beginning after December 15, 2021, including interim periods within that reporting period. Early adoption is permitted. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements.
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Business Combinations |
9 Months Ended |
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Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Cleverly, Lda. In the third quarter of 2021, we completed the acquisition of Cleverly, Lda., or Cleverly, resulting in increases of $7 million and $1 million to goodwill and developed technology, respectively. From the date of the acquisition, the financial results of Cleverly have been included in and are immaterial to our condensed consolidated financial statements. Pro forma revenue and results of operations have not been presented because the historical results are not material to our condensed consolidated financial statements in any period presented. Pending Acquisition On October 28, 2021, we entered into a definitive agreement to acquire Momentive Global Inc., or Momentive, an experience management company that offers SaaS feedback solutions. Under the terms of the agreement, each issued and outstanding share of Momentive common stock will be converted into the right to receive 0.225 shares of Zendesk common stock. The agreement also provides for Zendesk’s assumption of outstanding options and other unvested equity awards held by continuing Momentive employees. The transaction, which is anticipated to close in the first half of calendar year 2022, is subject to approval by Zendesk and Momentive stockholders, the receipt of required regulatory approvals, and other customary closing conditions. A fee of up to $150 million may be payable by Zendesk or by Momentive upon termination of the transaction, as more fully described in the agreement.
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Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments Investments The following tables present information about our financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):
As of September 30, 2021 and December 31, 2020, there were no securities within Level 3 of the fair value hierarchy. There were no transfers between fair value measurement levels during the three and nine months ended September 30, 2021 or 2020. As of September 30, 2021, gross unrealized gains and losses for marketable securities were $3 million and not material, respectively. The aggregate amortized cost basis for cash equivalents and marketable securities was $1,289 million and excludes accrued interest of $3 million. The aggregate fair value of securities with unrealized losses was $292 million. As of December 31, 2020, gross unrealized gains and losses for marketable securities were $6 million and not material, respectively. The aggregate amortized cost basis for cash equivalents and marketable securities was $1,183 million and excludes accrued interest of $3 million. The aggregate fair value of securities with unrealized losses was $107 million. Unrealized losses for securities that have been in an unrealized loss position for more than 12 months as of September 30, 2021 and December 31, 2020 were not material. We have not recorded an allowance for credit losses, as we believe any such losses would be immaterial based on the high-grade credit rating for each of our marketable securities as of the end of each period. We intend to hold our marketable securities to maturity and it is unlikely that they would be sold before their cost bases are recovered. The following table classifies our marketable securities by contractual maturity (in thousands):
As of September 30, 2021 and December 31, 2020, the balance of strategic investments without readily determinable fair values was $12 million and $11 million, respectively. There have been no adjustments to the carrying values of strategic investments resulting from impairments or observable price changes. During the three months ended September 30, 2021, we sold a strategic investment and realized a gain of approximately $1 million, which was recorded in interest and other income (expense), net in our consolidated statements of operations. For our other financial instruments, including accounts receivable, accounts payable, and other current liabilities, the carrying amounts approximate their fair values due to the relatively short maturity of these balances. Derivative Instruments and Hedging Our foreign currency exposures typically arise from expenditures associated with foreign operations and sales in foreign currencies of our products. To mitigate the effect of foreign currency fluctuations on our future cash flows and earnings, we enter into foreign currency forward contracts with certain financial institutions and designate those contracts as cash flow hedges. Our foreign currency forward contracts generally have maturities of 15 months or less. We include time value related to our cash flow hedges for effectiveness testing purposes and the entire change in the unrecognized value of our hedge contracts is recorded in accumulated other comprehensive income (loss), or AOCI. As of September 30, 2021, the balance of AOCI included an unrecognized net loss of $6 million related to the changes in the fair value of foreign currency forward contracts designated as cash flow hedges. We expect to reclassify a net loss of $7 million into earnings over the next 12 months associated with our cash flow hedges. The following tables present information about our derivative instruments on our consolidated balance sheets (in thousands):
Our foreign currency forward contracts had a total notional value of $452 million and $345 million as of September 30, 2021 and December 31, 2020, respectively. We have a master netting arrangement with each of our counterparties, which permit net settlement of multiple, separate derivative contracts with a single payment. We do not have collateral requirements with any of our counterparties. GAAP permits companies to present the fair value of derivative instruments on a net basis according to master netting arrangements. We have elected to present our derivative instruments on a gross basis in our consolidated financial statements. We do not enter into any derivative contracts for trading or speculative purposes. All derivatives have been designated as hedging instruments. The following table presents information about our foreign currency forward contracts on our consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 (in thousands):
The loss recognized in AOCI related to foreign currency forward contracts was $4 million for the three months ended September 30, 2021. The gain recognized in AOCI related to foreign currency forward contracts was $1 million for the three months ended September 30, 2020. The loss recognized in AOCI related to foreign currency forward contracts was $7 million and $3 million for the nine months ended September 30, 2021 and 2020, respectively. The cash flow effects related to foreign currency forward contracts are included within operating activities on our consolidated statements of cash flows. Convertible Senior Notes As of September 30, 2021, the fair values of our 0.25% convertible senior notes due 2023 and our 0.625% convertible senior notes due 2025 were $283 million and $1,440 million, respectively. We estimate the fair value of our convertible senior notes based on their last traded prices or market observable inputs, resulting in a Level 2 classification in the fair value hierarchy. Based on the closing price of our common stock of $116.39 on the last trading day of the quarter, the if-converted values of the 2023 and 2025 convertible senior notes exceeded their remaining principal amounts by $126 million and $81 million, respectively, as of September 30, 2021.
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Costs to Obtain Customer Contracts |
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Costs to Obtain Customer Contracts | Costs to Obtain Customer ContractsThe balance of deferred costs to obtain customer contracts was $134 million and $105 million as of September 30, 2021 and December 31, 2020, respectively. Amortization expense for deferred costs was $18 million and $12 million for the three months ended September 30, 2021 and 2020, respectively, and $49 million and $32 million for the nine months ended September 30, 2021 and 2020, respectively. There were no impairment losses related to deferred costs for the periods presented.Deferred Revenue and Performance Obligations The changes in the balances of deferred revenue are as follows (in thousands):
*Other revenue primarily includes implementation and training services, Talk usage, and amounts from contract assets. For the three months ended September 30, 2021 and 2020, the majority of revenue recognized was from the deferred revenue balances at the beginning of each period. For the nine months ended September 30, 2021 and 2020, less than half of revenue recognized was from the deferred revenue balances at the beginning of each period. The aggregate balance of remaining performance obligations as of September 30, 2021 was $1,167 million. We expect to recognize $783 million of the balance as revenue in the next 12 months and the substantial majority of the remainder in the next 13-36 months. The aggregate balance of remaining performance obligations represents contracted revenue that has not yet been recognized, including contracted revenue from renewals, and does not include contract amounts which are cancellable by the customer and amounts associated with optional renewal periods.
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Property and Equipment |
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Property and Equipment | Property and Equipment Property and equipment, net consists of the following (in thousands):
Depreciation expense was $6 million and $7 million for the three months ended September 30, 2021 and 2020, respectively, and $17 million and $20 million for the nine months ended September 30, 2021 and 2020, respectively. Amortization expense of capitalized internal-use software was $2 million for each of the three months ended September 30, 2021 and 2020, and $5 million for each of the nine months ended September 30, 2021 and 2020. The carrying values of capitalized internal-use software as of September 30, 2021 and December 31, 2020 were $39 million and $32 million, respectively, including $16 million and $13 million in construction in progress, respectively.
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Leases |
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Leases | Leases The following table presents information about leases on our consolidated balance sheets (in thousands):
As of September 30, 2021, the weighted average remaining lease term was 5.8 years and the weighted average discount rate was 4.6%. The following table presents information about leases on our consolidated statements of operations (in thousands):
The following table presents supplemental cash flow information about our leases (in thousands):
In the fourth quarter of 2020, we determined that we would no longer occupy the leased premises located at 1019 Market Street and 988 Market Street, San Francisco, California 94103 and recorded an aggregate impairment charge of $15 million related to lease right-of-use assets and leasehold improvements. In the second quarter of 2021, we executed a termination agreement for the leased premises located at 1019 Market Street, including a one-time payment of $7 million, which is not included in the supplemental cash flow table above.
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Goodwill and Acquired Intangible Assets |
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Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets The changes in the carrying amount of goodwill for the nine months ended September 30, 2021 are as follows (in thousands):
Acquired intangible assets subject to amortization consist of the following (in thousands):
In the third quarter of 2021, we removed developed technology, customer relationships, and backlog intangible assets which had become fully amortized from our consolidated balance sheet. Amortization expense of acquired intangible assets was $2 million for each of the three months ended September 30, 2021 and 2020, and $5 million and $7 million for the nine months ended September 30, 2021 and 2020, respectively. Estimated future amortization expense as of September 30, 2021 is as follows (in thousands):
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Convertible Senior Notes |
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Convertible Senior Notes | Convertible Senior Notes 2025 Convertible Senior Notes In June 2020, we issued $1,150 million aggregate principal amount of 0.625% convertible senior notes due June 15, 2025 in a private offering, the “2025 Notes.” The 2025 Notes are senior unsecured obligations and bear interest at a fixed rate of 0.625% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2020. The total net proceeds from the offering, after deducting initial purchase discounts and estimated debt issuance costs, were approximately $1,129 million. Each $1,000 principal amount of the 2025 Notes will initially be convertible into 9.1944 shares of our common stock, which is equivalent to an initial conversion price of approximately $108.76 per share, subject to adjustment upon the occurrence of specified events. The 2025 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding March 15, 2025, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the business day period after any ten consecutive trading day period in which, for each trading day of that period, the trading price per $1,000 principal amount of 2025 Notes for such trading day 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; (3) if we call any or all of the 2025 Notes for redemption, at any time prior to the close of business on the second business day immediately prior to the redemption date as discussed further below, but only with respect to the 2025 Notes called (or deemed called) for redemption; or (4) upon the occurrence of specified corporate events (as set forth in the indenture). On or after March 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2025 Notes, in minimum denominations of $1,000 or an integral multiple in excess thereof, at the option of the holders regardless of the foregoing circumstances. 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. If certain specified fundamental changes occur (as set forth in the indenture) prior to the maturity date, holders of the 2025 Notes may require us to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if specific corporate events occur prior to the applicable maturity date or if we deliver a notice of redemption, we will increase the conversion rate for a holder who elects to convert their notes in connection with such a corporate event or converts its notes called (or deemed called) for redemption in connection with such notice of redemption in certain circumstances. It is our current intent and policy to settle conversions through combination settlement with a specified dollar amount of $1,000 per $1,000 principal amount of 2025 Notes. During the three months ended September 30, 2021, the conditions allowing holders of the 2025 Notes to convert were not met. As the criteria for conversion were not met, the 2025 Notes are classified as a long-term liability as of September 30, 2021. We may not redeem the 2025 Notes prior to June 20, 2023. We may redeem for cash all or any portion of the 2025 Notes, at our option, on or after June 20, 2023 and on or prior to the 41st scheduled trading day immediately preceding the maturity date, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption, at a redemption price equal to 100% of the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2025 Notes. In accounting for the transaction, the 2025 Notes were separated into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The fair value of the liability component was estimated by calculating the present value of expected cash flows using an interest rate that reflects our incremental borrowing rate, with an estimated adjustment for our credit standing on nonconvertible debt with similar maturity. The carrying amount of the equity component representing the conversion option was $220 million and was determined by deducting the fair value of the liability component from the par value of the 2025 Notes. The equity component was recorded in additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the contractual term of the 2025 Notes at an effective interest rate of 5.00%. In accounting for the debt issuance costs of $21 million related to the 2025 Notes, we allocated the total amount incurred to the liability and equity components of the 2025 Notes based on their relative values. Issuance costs attributable to the liability component were $17 million and will be amortized to interest expense using the effective interest method over the contractual term of the 2025 Notes. Issuance costs attributable to the equity component were netted with the equity component in additional paid-in capital. The net carrying amount of the liability component of the 2025 Notes is as follows (in thousands):
The net carrying amount of the equity component of the 2025 Notes is as follows (in thousands):
The interest expense related to the 2025 Notes is as follows (in thousands):
The difference between the book and tax treatment of the debt discount and debt issuance costs of the 2025 Notes resulted in a difference between the carrying amount and tax basis of the 2025 Notes. This taxable temporary difference resulted in the recognition of a $51 million net deferred tax liability which was recorded as an adjustment to additional paid-in capital. The creation of the deferred tax liability represents a source of future taxable income which supports realization of deferred tax assets. As we continue to maintain a full valuation allowance against its deferred tax assets, this additional source of income resulted in the release of a portion of its valuation allowance. Consistent with the adoption of ASU 2019-12, the release of the valuation allowance of $51 million was recorded as an adjustment to additional paid-in capital. 2025 Capped Calls In connection with the pricing of the 2025 Notes, we entered into privately negotiated capped call transactions with certain counterparties, the “2025 Capped Calls.” The 2025 Capped Calls each have an initial strike price of approximately $108.76 per share, subject to certain adjustments, which correspond to the initial conversion price of the 2025 Notes. The 2025 Capped Calls have initial cap prices of $164.17 per share, subject to certain adjustments. The 2025 Capped Calls cover, subject to anti-dilution adjustments, approximately 10.6 million shares of our common stock. Conditions that cause adjustments to the initial strike price of the 2025 Capped Calls are similar to the conditions that result in corresponding adjustments for the 2025 Notes. The 2025 Capped Calls are generally intended to reduce or offset the potential dilution to our common stock upon any conversion of the 2025 Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. For accounting purposes, the 2025 Capped Calls are separate transactions, and not part of the terms of the 2025 Notes. As these transactions meet certain accounting criteria, the 2025 Capped Calls are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $130 million incurred in connection with the 2025 Capped Calls was recorded as a reduction to additional paid-in capital. 2023 Convertible Senior Notes In March 2018, we issued $575 million aggregate principal amount of 0.25% convertible senior notes due March 15, 2023 in a private offering, the “2023 Notes.” The 2023 Notes are unsecured obligations and bear interest at a fixed rate of 0.25% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, commencing on September 15, 2018. The total net proceeds from the offering, after deducting initial purchase discounts and estimated debt issuance costs, were approximately $561 million. In connection with the offering of the 2025 Notes, we used $618 million of the net proceeds from the offering of the 2025 Notes to repurchase $426 million aggregate principal amount of the 2023 Notes in cash through individual privately negotiated transactions, the “2023 Notes Partial Repurchase.” Of the $618 million consideration, $393 million and $225 million were allocated to the debt and equity components on our consolidated balance sheets, respectively, utilizing an effective interest rate to determine the fair value of the liability component. The fair value of the liability component is estimated by calculating the present value of expected cash flows using an interest rate that reflects our incremental borrowing rate, with an estimated adjustment for our credit standing on nonconvertible debt with similar maturity. As of the repurchase date, the carrying value of the 2023 Notes subject to the 2023 Notes Partial Repurchase, net of unamortized debt discount and issuance costs, was $367 million. The 2023 Notes Partial Repurchase resulted in a $26 million loss on early debt extinguishment. Additionally, $39 million of the total consideration was related to repayment of the debt discount and reflected as a cash outflow from operating activities. As of September 30, 2021, $149 million of principal remains outstanding on the 2023 Notes. Each $1,000 principal amount of the 2023 Notes will initially be convertible into 15.8554 shares of our common stock, the “Conversion Option,” which is equivalent to an initial conversion price of approximately $63.07 per share, subject to adjustment upon the occurrence of specified events. The 2023 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding December 15, 2022, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2018 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a 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; (2) during the business day period after any five consecutive trading day period, the “Measurement Period,” in which the trading price per $1,000 principal amount of 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 (3) upon the occurrence of specified corporate events (as set forth in the indenture). On or after December 15, 2022 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2023 Notes at any time, regardless of the foregoing circumstances. 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. If certain specified fundamental changes occur (as set forth in the indenture governing the 2023 Notes) prior to the maturity date, holders of the 2023 Notes may require us to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the 2023 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if specific corporate events occur prior to the applicable maturity date, we will increase the conversion rate for a holder who elects to convert their notes in connection with such a corporate event in certain circumstances. It is our current intent and policy to settle conversions through combination settlement with a specified dollar amount of $1,000 per $1,000 principal amount of 2023 Notes. During the three months ended September 30, 2021, the conditions allowing holders of the 2023 Notes to convert were met. The 2023 Notes are therefore convertible during the three months ending December 31, 2021, and are classified as a current liability as of September 30, 2021. To date, we have received one request for conversion for an immaterial amount of 2023 Notes. In accounting for the issuance of the 2023 Notes, the 2023 Notes were separated into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated conversion feature. The carrying amount of the equity component was determined by deducting the fair value of the liability component from the par value of the 2023 Notes. The equity component was recorded in additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the contractual term of the 2023 Notes at an effective interest rate of 5.26%. In accounting for the debt issuance costs related to the 2023 Notes, we allocated the total amount incurred to the liability and equity components of the 2023 Notes based on their relative values. Issuance costs attributable to the liability component are amortized to interest expense using the effective interest method over the contractual term of the 2023 Notes. Issuance costs attributable to the equity component were netted with the equity component in additional paid-in capital. The net carrying amount of the liability component of the 2023 Notes is as follows (in thousands):
The net carrying amount of the equity component of the 2023 Notes is as follows (in thousands):
The interest expense related to the 2023 Notes is as follows (in thousands):
2023 Capped Calls In connection with the pricing of the 2023 Notes, we entered into privately negotiated capped call transactions with certain counterparties, the “2023 Capped Calls.” The 2023 Capped Calls each have an initial strike price of approximately $63.07 per share, subject to certain adjustments, which correspond to the initial conversion price of the 2023 Notes. The 2023 Capped Calls have initial cap prices of $95.20 per share, subject to certain adjustments. The 2023 Capped Calls covered, subject to anti-dilution adjustments, approximately 9.1 million shares of our common stock. Conditions that cause adjustments to the initial strike price of the 2023 Capped Calls mirror conditions that result in corresponding adjustments for the 2023 Notes. The 2023 Capped Calls are generally intended to reduce or offset the potential dilution to our common stock upon any conversion of the 2023 Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. For accounting purposes, the 2023 Capped Calls are separate transactions, and not part of the terms of the 2023 Notes. As these transactions meet certain accounting criteria, the 2023 Capped Calls are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $64 million incurred in connection with the 2023 Capped Calls was recorded as a reduction to additional paid-in capital. In June 2020, and in connection with the 2023 Notes Partial Repurchase, we terminated the 2023 Capped Calls corresponding to approximately 6.7 million shares for cash proceeds of $83 million. The proceeds were recorded as an increase to additional paid-in capital in the consolidated balance sheets. As of September 30, 2021, there remains outstanding 2023 Capped Calls giving the Company the option to purchase approximately 2.4 million shares (subject to adjustment). The net impact to our stockholders’ equity, included in additional paid-in capital, of the above components of the 2023 Notes is as follows (in thousands):
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Commitments and Contingencies |
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Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments Except as discussed below, there were no material changes in our commitments under contractual obligations as disclosed in our audited consolidated financial statements for the year ended December 31, 2020. In April 2021, we renewed an agreement with a cloud services provider for which we have a total obligation of $64 million over a three-year period. Litigation and Loss Contingencies We accrue estimates for resolution of legal and other contingencies when losses are probable and estimable. These estimates are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel, and other information and events pertaining to a particular matter. On October 24, 2019 and November 7, 2019, purported stockholders of the Company filed two putative class action complaints in the United States District Court for the Northern District of California, entitled Charles Reidinger v. Zendesk, Inc., et al., 3:19-cv-06968-CRB and Ho v. Zendesk, Inc., et al., No. 3:19-cv-07361-WHA, respectively, against the Company and certain of the Company’s executive officers. The complaints are nearly identical and allege violations of Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934, as amended, purportedly on behalf of all persons who purchased Zendesk, Inc. common stock between February 6, 2019 and October 1, 2019, inclusive. The claims are based upon allegations that the defendants misrepresented and/or omitted material information in certain of our prior public filings. To this point, no discovery has occurred in these cases. The court appointed a lead plaintiff and consolidated the various lawsuits into a single action (Case No. 3:19-cv-06968-CRB), and the lead plaintiff filed its amended complaint on April 14, 2020 asserting the same alleged violations of securities laws as the initial complaints. On June 29, 2020, Zendesk and the executive officer defendants moved to dismiss the amended complaint. On November 9, 2020, the court granted Zendesk's motion to dismiss and granted plaintiff leave to amend its complaint. On January 8, 2021, plaintiff filed its second amended complaint and on January 22, 2021, Zendesk and the executive officer defendants moved to dismiss the second amended complaint. On March 2, 2021, the court granted Zendesk's motion to dismiss the second amended complaint. On March 23, 2021, judgment was entered in favor of Zendesk and the executive officer defendants. On April 20, 2021, plaintiff filed a notice of appeal with the U.S. Court of Appeals for the Ninth Circuit. On July 29, 2021, plaintiff filed its opening brief in the appeal, and on October 13, 2021, the Company and the executive officer defendants filed their answering brief. On June 2, 2020, a purported stockholder of the Company filed a derivative complaint in the United States District Court for the Northern District of California, entitled Anderson v. Svane, et al., 3:20-cv-03671, against certain of the Company’s executive officers and directors. The derivative complaint alleges breaches of fiduciary duty against all defendants, and an insider trading claim and violations of Section 10(b) of the Securities Exchange Act of 1934 against the officer defendants, purportedly on behalf of the Company itself. The claims are based on nearly identical allegations as the two putative class action complaints described above, namely that the defendants misrepresented and/or omitted material information in certain of our prior public filings. On July 27, 2020, the court ordered the derivative action related to the class action. The derivative action had been stayed pending resolution of the class action. On May 6, 2021, the court approved a joint stipulation to extend the stay of action pending the outcome of the appeal of the class action. It is not possible for the Company to quantify the extent of potential liability to the individual defendants, if any. Management believes that the lawsuits lack merit and intends to vigorously defend the actions. We cannot predict the outcome of or estimate the possible loss or range of loss from the above described matter. From time to time, we may be subject to other legal proceedings, claims, investigations, and government inquiries in the ordinary course of business. We have received, and may in the future continue to receive, claims from third parties asserting, among other things, infringement of their intellectual property rights, defamation, labor and employment rights, privacy, and contractual rights. In general, the resolution of a legal matter could prevent the Company from offering its service to others, could be material to the Company’s financial condition or cash flows, or both, or could otherwise adversely affect the Company’s operating results. The outcomes of legal proceedings and other contingencies are inherently unpredictable and subject to significant uncertainties. As a result, the Company is not able to reasonably estimate the amount or range of possible losses in excess of any amounts accrued, including losses that could arise as a result of application of non-monetary remedies, with respect to the contingencies it faces. In management’s opinion, resolution of all current matters is not expected to have a material adverse impact on business, consolidated balance sheets, results of operations, comprehensive loss, or cash flows. Indemnifications In the ordinary course of business, we enter into contractual arrangements under which we agree to provide indemnification of varying scope and terms to customers, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, intellectual property infringement claims made by third parties, and other liabilities relating to or arising from our products or our acts or omissions. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract. Further, our obligations under these agreements may be limited in terms of time and/or amount, and in some instances, we may have recourse against third parties for certain payments. In addition, we have indemnification agreements with our directors and executive officers that require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The terms of such obligations may vary. To date, we have not incurred any material costs, and we have not accrued any liabilities in our consolidated financial statements, as a result of these obligations. Certain of our product offerings include service-level agreements warranting defined levels of uptime reliability and performance, which permit those customers to receive credits for future services in the event that we fail to meet those levels. To date, we have not accrued for any significant liabilities in our consolidated financial statements as a result of these service-level agreements.
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Common Stock and Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock and Stockholders' Equity | Common Stock and Stockholders’ Equity Common Stock As of September 30, 2021 and December 31, 2020, there were 400 million shares of common stock authorized for issuance with a par value of $0.01 per share, and 120.5 million and 117.5 million shares were issued and outstanding as of September 30, 2021 and December 31, 2020, respectively. Preferred Stock As of September 30, 2021 and December 31, 2020, there were 10 million shares of preferred stock authorized for issuance with a par value of $0.01 per share and no shares of preferred stock were issued or outstanding. Employee Equity Plans Employee Stock Purchase Plan Under the Employee Stock Purchase Plan, or ESPP, eligible employees are granted options to purchase shares of our common stock through payroll deductions. The ESPP provides for 18-month offering periods, which include three six-month purchase periods. At the end of each purchase period, employees are able to purchase shares at 85% of the lower of the fair market value of our common stock at the beginning of the offering period or the fair market value of our common stock at the end of the purchase period. In both May 2021 and 2020, 0.4 million shares of common stock were purchased under the ESPP. Pursuant to the terms of the ESPP, the number of shares reserved under the ESPP increased by 1.2 million shares on January 1, 2021. As of September 30, 2021, 5.6 million shares of common stock were available for issuance under the ESPP. Stock Option and Grant Plans Our board of directors adopted the 2009 Stock Option and Grant Plan, or the 2009 Plan, in July 2009. The 2009 Plan was terminated in connection with our initial public offering in May 2014, and accordingly, no shares are available for issuance under this plan. The 2009 Plan continues to govern outstanding awards granted thereunder. Our 2014 Stock Option and Incentive Plan, or the 2014 Plan, serves as the successor to our 2009 Plan. Pursuant to the terms of the 2014 Plan, the number of shares reserved for issuance under the 2014 Plan increased by 5.9 million shares on January 1, 2021. As of September 30, 2021, we had 18.9 million shares of common stock available for future grants under the 2014 Plan. A summary of restricted stock unit (“RSU”) activity for the nine months ended September 30, 2021 is as follows (in thousands, except per share information):
The total fair value of RSUs vested during the nine months ended September 30, 2021 and 2020 was $249 million and $168 million, respectively. The fair value of RSUs vested represents market value on the vesting date. A summary of stock option activity for the nine months ended September 30, 2021 is as follows (in thousands, except per share information):
The aggregate intrinsic value for options outstanding represents the difference between the closing market price of our common stock on the last trading day of the reporting period and the exercise price of outstanding, in-the-money options. The total intrinsic value of stock options exercised during the nine months ended September 30, 2021 and 2020 was $94 million and $54 million, respectively. The intrinsic value for options exercised represents the difference between the exercise price and the market value on the date of exercise. The weighted-average grant date fair value of stock options granted during the nine months ended September 30, 2021 and 2020 was $52.60 and $31.41, respectively. As of September 30, 2021, we had a total of $477 million in future expense related to all equity awards to be recognized over a weighted average period of 2.7 years. For the three and nine months ended September 30, 2021, we recorded $2 million of share-based compensation expense related to accelerated vesting of share-based awards associated with certain employee terminations. Performance Restricted Stock Units In 2018, performance-based restricted stock units, or PRSUs, representing 0.2 million shares of common stock were granted in connection with the acquisition of FutureSimple Inc. The PRSUs vested in four semi-annual tranches through March 2021 and were subject to service and performance conditions. No expense was recorded in the three months ended September 30, 2021. For the nine months ended September 30, 2021, we recorded $1 million of share-based compensation expense related to the PRSUs. For the three and nine months ended September 30, 2020, we recorded $3 million and $5 million of share-based compensation expense related to the PRSUs, respectively. For the three and nine months ended September 30, 2021, zero and 37 thousand PRSUs were vested, respectively. For the three and nine months ended September 30, 2020, 36 thousand and 62 thousand PRSUs were vested, respectively.
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Deferred Revenue and Performance Obligations |
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Deferred Revenue and Performance Obligations | Costs to Obtain Customer ContractsThe balance of deferred costs to obtain customer contracts was $134 million and $105 million as of September 30, 2021 and December 31, 2020, respectively. Amortization expense for deferred costs was $18 million and $12 million for the three months ended September 30, 2021 and 2020, respectively, and $49 million and $32 million for the nine months ended September 30, 2021 and 2020, respectively. There were no impairment losses related to deferred costs for the periods presented.Deferred Revenue and Performance Obligations The changes in the balances of deferred revenue are as follows (in thousands):
*Other revenue primarily includes implementation and training services, Talk usage, and amounts from contract assets. For the three months ended September 30, 2021 and 2020, the majority of revenue recognized was from the deferred revenue balances at the beginning of each period. For the nine months ended September 30, 2021 and 2020, less than half of revenue recognized was from the deferred revenue balances at the beginning of each period. The aggregate balance of remaining performance obligations as of September 30, 2021 was $1,167 million. We expect to recognize $783 million of the balance as revenue in the next 12 months and the substantial majority of the remainder in the next 13-36 months. The aggregate balance of remaining performance obligations represents contracted revenue that has not yet been recognized, including contracted revenue from renewals, and does not include contract amounts which are cancellable by the customer and amounts associated with optional renewal periods.
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Net Loss Per Share |
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Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including those related to outstanding share-based awards and our convertible senior notes, to the extent dilutive. Basic and diluted net loss per share were the same for each period presented as the inclusion of all potential common stock outstanding would have been anti-dilutive. The following table presents the calculation of basic and diluted net loss per share for the periods presented (in thousands, except per share data):
The anti-dilutive securities excluded from the shares used to calculate diluted net loss per share are as follows (in thousands):
The shares related to convertible senior notes in the table above are calculated based on the average market price of our common stock for the three months ended September 30, 2021 and 2020, respectively. We expect to settle the principal amount of both the 2023 Notes and 2025 Notes in cash and therefore use the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread has a dilutive impact on diluted net income per share when the average market price of our common stock for a given reporting period exceeds the initial conversion prices of $63.07 and $108.76 per share for the 2023 Notes and 2025 Notes, respectively. Based on the initial conversion price, potential dilution related to the 2023 Notes and 2025 Notes is approximately 2.4 million and 10.6 million shares, respectively.
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Income Taxes |
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Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesWe reported income tax expense of $3 million and $2 million for the three months ended September 30, 2021 and 2020, respectively. We reported income tax expense of $8 million and $5 million for the nine months ended September 30, 2021 and 2020, respectively. The effective tax rate for each period differs from the statutory rate primarily as a result of not recognizing a deferred tax asset for U.S. losses due to having a full valuation allowance against U.S. deferred tax assets. |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Geographic Information | Geographic Information Our chief operating decision maker reviews the financial information presented on a consolidated basis for purposes of allocating resources and evaluating our financial performance. Accordingly, we have determined that we operate in a single reporting segment. Revenue The following table presents our revenue by geographic area, as determined based on the billing address of our customers (in thousands):
Long-Lived Assets The following table presents our long-lived assets by geographic area (in thousands):
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Overview and Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | These unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K, for the year ended December 31, 2020, filed with the SEC on February 12, 2021. There have been no changes to our significant accounting policies described in the Annual Report on Form 10-K that have had a material impact on our condensed consolidated financial statements and related notes. The consolidated balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date. The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly our financial position, results of operations, comprehensive loss, stockholders’ equity, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year ending December 31, 2021.
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Use of Estimates | The preparation of our consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reported periods. Significant items subject to such estimates and assumptions include: •the estimate of variable consideration related to revenue recognition; •the estimate of credit losses for accounts receivable and marketable securities; •the fair value and useful lives of acquired intangible assets; •the capitalization and useful life of capitalized costs to obtain customer contracts; •the valuation of strategic investments; •the fair value and useful lives of property and equipment; •the capitalization and useful lives of internal-use software; •the lease term and incremental borrowing rate for lease liabilities; •the fair value of our convertible senior notes; •the fair value of asset retirement obligations; •the fair value and expense recognition for certain share-based awards; •the preparation of financial forecasts used in currency hedging; •the recognition and measurement of legal contingencies; and •the recognition of tax benefits and forecasts used to determine our effective tax rate. As of the date of issuance of the financial statements, we are not aware of any material specific events or circumstances that would require us to update our estimates, judgments, or to revise the carrying values of our assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements.
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Concentrations of Risk | As of September 30, 2021 and December 31, 2020, no customers represented 10% or greater of our total accounts receivable balance. There were no customers that individually exceeded 10% of our revenue during the three and nine months ended September 30, 2021 or 2020. |
Recently Issued Accounting Pronouncements | In August 2020, the Financial Accounting Standards Board, or FASB, issued ASU 2020-06, regarding ASC Topic 470 “Debt” and ASC Topic 815 “Derivatives and Hedging,” which reduces the number of accounting models for convertible instruments, including amending the calculation of diluted earnings per share and the balance sheet presentation of those instruments, as well as the resulting recognition of interest expense, among other changes. The guidance is effective for annual reporting periods beginning after December 15, 2021, including interim periods within that reporting period. Early adoption is permitted. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements. |
Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets Measured at Fair Value on Recurring Basis | The following tables present information about our financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):
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Schedule of Marketable Securities Classified by Contractual Maturity | The following table classifies our marketable securities by contractual maturity (in thousands):
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Schedule of Derivative Instruments on Consolidated Balance Sheets | The following tables present information about our derivative instruments on our consolidated balance sheets (in thousands):
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Schedule of Derivative Instruments on Statement of Operations | The following table presents information about our foreign currency forward contracts on our consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 (in thousands):
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Property and Equipment (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment, Net | Property and equipment, net consists of the following (in thousands):
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Impact on Balance Sheet | The following table presents information about leases on our consolidated balance sheets (in thousands):
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Schedule of Lease Cost and Supplemental Cash Flow Information | The following table presents information about leases on our consolidated statements of operations (in thousands):
The following table presents supplemental cash flow information about our leases (in thousands):
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Goodwill and Acquired Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the nine months ended September 30, 2021 are as follows (in thousands):
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Summary of Intangible Assets Acquired | Acquired intangible assets subject to amortization consist of the following (in thousands):
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Summary of Estimated Future Amortization Expense | Estimated future amortization expense as of September 30, 2021 is as follows (in thousands):
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Convertible Senior Notes (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Carrying Amount of Liability and Equity Component of Convertible Notes | The net carrying amount of the liability component of the 2025 Notes is as follows (in thousands):
The net carrying amount of the equity component of the 2025 Notes is as follows (in thousands):
The net carrying amount of the liability component of the 2023 Notes is as follows (in thousands):
The net carrying amount of the equity component of the 2023 Notes is as follows (in thousands):
The net impact to our stockholders’ equity, included in additional paid-in capital, of the above components of the 2023 Notes is as follows (in thousands):
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Schedule of Interest Expense | The interest expense related to the 2025 Notes is as follows (in thousands):
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Common Stock and Stockholders' Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option and RSU Award Activity | A summary of restricted stock unit (“RSU”) activity for the nine months ended September 30, 2021 is as follows (in thousands, except per share information):
A summary of stock option activity for the nine months ended September 30, 2021 is as follows (in thousands, except per share information):
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Deferred Revenue and Performance Obligations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Balance of Deferred Revenue | The changes in the balances of deferred revenue are as follows (in thousands):
*Other revenue primarily includes implementation and training services, Talk usage, and amounts from contract assets.
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Net Loss Per Share (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Net Loss per Share | The following table presents the calculation of basic and diluted net loss per share for the periods presented (in thousands, except per share data):
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Schedule of Anti-Dilutive Securities Excluded from the Diluted per Share Calculation | The anti-dilutive securities excluded from the shares used to calculate diluted net loss per share are as follows (in thousands):
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Geographic Information (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Geographic Areas | The following table presents our revenue by geographic area, as determined based on the billing address of our customers (in thousands):
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Schedule of Long-Lived Assets by Geographic Areas | The following table presents our long-lived assets by geographic area (in thousands):
|
Business Combinations - Narrative (Details) - USD ($) $ in Thousands |
Oct. 28, 2021 |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Increase in goodwill | $ 176,765 | $ 169,662 | |
Cleverly Lda. | |||
Business Acquisition [Line Items] | |||
Increase in goodwill | 7,000 | ||
Cleverly Lda. | Developed technology | |||
Business Acquisition [Line Items] | |||
Increase in developed technology | $ 1,000 | ||
Milky Way | Subsequent Event | |||
Business Acquisition [Line Items] | |||
Entity shares issued per acquiree share (in shares) | 0.225 | ||
Fee payable upon termination of transaction | $ 150,000 |
Financial Instruments - Marketable Securities by Contractual Maturity (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Due in one year or less | $ 421,328 | $ 565,593 |
Due after one year and within five years | 591,153 | 428,678 |
Total | $ 1,012,481 | $ 994,271 |
Financial Instruments - Schedule of Derivative Instruments on Consolidated Balance Sheets (Details) - Designated as hedging instrument - Level 2 - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Derivatives Fair Value [Line Items] | ||
Asset Derivatives | $ 5,268 | $ 7,922 |
Liability Derivatives | 9,874 | 5,768 |
Foreign currency forward contracts | Other current assets | ||
Derivatives Fair Value [Line Items] | ||
Asset Derivatives | 5,268 | 7,922 |
Foreign currency forward contracts | Accrued liabilities | ||
Derivatives Fair Value [Line Items] | ||
Liability Derivatives | $ 9,874 | $ 5,768 |
Costs to Obtain Customer Contracts (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Revenue from Contract with Customer [Abstract] | |||||
Deferred costs to obtain customer contracts | $ 134,000,000 | $ 134,000,000 | $ 105,000,000 | ||
Amortization of deferred costs | 18,000,000 | $ 12,000,000 | 48,739,000 | $ 32,390,000 | |
Impairment related to deferred costs | $ 0 | $ 0 | $ 0 | $ 0 |
Property and Equipment - Components of Property and Equipment (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Total | $ 207,547 | $ 197,641 |
Less: accumulated depreciation and amortization | (114,024) | (103,433) |
Property and equipment, net | 93,523 | 94,208 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | 79,702 | 91,205 |
Capitalized internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Total | 57,849 | 48,730 |
Computer equipment and licensed software and patents | ||
Property, Plant and Equipment [Line Items] | ||
Total | 37,871 | 30,725 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total | 14,644 | 13,759 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 17,481 | $ 13,222 |
Property and Equipment - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Abstract] | |||||
Depreciation expense | $ 6 | $ 7 | $ 17 | $ 20 | |
Amortization expense of capitalized internal-use software | 2 | $ 2 | 5 | $ 5 | |
Carrying value of capitalized internal-use software | 39 | 39 | $ 32 | ||
Capitalized internal-use software included in construction in progress | $ 16 | $ 16 | $ 13 |
Leases - Schedule of Lease Impact on Balance Sheet (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Assets | ||
Lease right-of-use assets | $ 73,094 | $ 84,013 |
Liabilities | ||
Lease liabilities | 20,201 | 23,533 |
Lease liabilities, noncurrent | $ 66,733 | $ 85,275 |
Leases - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
Sep. 30, 2021 |
|
Lessee, Lease, Description [Line Items] | |||
Weighted average remaining lease term | 5 years 9 months 18 days | ||
Weighted average discount rate | 4.60% | ||
Termination payment | $ 7 | ||
General and administrative | |||
Lessee, Lease, Description [Line Items] | |||
Aggregate impairment charge | $ 15 |
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Leases [Abstract] | ||||
Operating lease expense | $ 5,455 | $ 6,573 | $ 16,583 | $ 19,590 |
Short-term lease expense | 130 | 128 | 386 | 451 |
Variable lease expense | 1,297 | 1,412 | 3,759 | 4,614 |
Sublease income | $ (450) | $ (422) | $ (1,324) | $ (1,281) |
Leases - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 20,460 | $ 24,029 |
Operating lease assets obtained in exchange for new lease liabilities | $ 4,452 | $ 14,960 |
Goodwill and Acquired Intangible Assets - Schedule of Carrying Amount of Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2021
USD ($)
| |
Goodwill [Roll Forward] | |
Balance as of December 31, 2020 | $ 169,662 |
Goodwill acquired | 7,103 |
Balance as of September 30, 2021 | $ 176,765 |
Goodwill and Acquired Intangible Assets - Acquired Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 42,300 | $ 48,110 |
Accumulated Amortization | (20,119) | (21,554) |
Net | 22,181 | 26,556 |
Developed technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 28,000 | 30,200 |
Accumulated Amortization | (12,528) | (12,445) |
Net | $ 15,472 | $ 17,755 |
Weighted Average Remaining Useful Life | 3 years 3 months 18 days | 4 years 1 month 6 days |
Customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 14,300 | $ 14,710 |
Accumulated Amortization | (7,591) | (6,076) |
Net | $ 6,709 | $ 8,634 |
Weighted Average Remaining Useful Life | 3 years 4 months 24 days | 4 years |
Backlog | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 3,200 | |
Accumulated Amortization | (3,033) | |
Net | $ 167 | |
Weighted Average Remaining Useful Life | 3 months 18 days |
Goodwill and Acquired Intangible Assets - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 2 | $ 2 | $ 5 | $ 7 |
Goodwill and Acquired Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2021 | $ 1,861 | |
2022 | 7,279 | |
2023 | 6,583 | |
2024 | 4,839 | |
2025 | 972 | |
Thereafter | 647 | |
Net | $ 22,181 | $ 26,556 |
Convertible Senior Notes - Schedule of Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Debt Instrument [Line Items] | ||||
Total interest expense | $ 14,762 | $ 14,087 | $ 43,768 | $ 29,060 |
Convertible debt | Convertible senior notes due 2025 | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 1,797 | 1,797 | 5,391 | 2,076 |
Amortization of Debt Discount | 10,281 | 9,785 | 30,465 | 11,297 |
Amortization of issuance costs | 735 | 660 | 2,147 | 761 |
Total interest expense | 12,813 | 12,242 | 38,003 | 14,134 |
Convertible debt | Convertible senior notes due 2023 | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 93 | 93 | 279 | 770 |
Amortization of Debt Discount | 1,699 | 1,614 | 5,032 | 13,097 |
Amortization of issuance costs | 151 | 135 | 441 | 1,075 |
Total interest expense | $ 1,943 | $ 1,842 | $ 5,752 | $ 14,942 |
Convertible Senior Notes - Summary of Impact to Stockholder's Equity (Details) - USD ($) $ in Thousands |
1 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2018 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Debt Instrument [Line Items] | |||||
Net impact to stockholder's equity | $ 216,026 | ||||
Convertible debt | Convertible senior notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Conversion Option | $ 124,976 | $ 124,976 | $ 32,427 | $ 32,427 | |
Purchase of Capped Calls | (63,940) | ||||
Issuance Costs | (2,948) | (2,948) | $ (765) | $ (765) | |
Net deferred tax liability | (13,784) | (13,784) | |||
Net impact to stockholder's equity | $ 44,304 | $ (64,000) |
Commitments and Contingencies (Details) $ in Millions |
1 Months Ended | ||
---|---|---|---|
Apr. 30, 2021
USD ($)
|
Jun. 02, 2020
complaint
|
Nov. 07, 2019
complaint
|
|
Ho v. Zendesk And Reidinger v. Zendesk | |||
Other Commitments [Line Items] | |||
Putative class action complaints | 2 | ||
Anderson v. Svane | |||
Other Commitments [Line Items] | |||
Putative class action complaints | 2 | ||
Cloud Infrastructure | |||
Other Commitments [Line Items] | |||
Total obligation | $ | $ 64 | ||
Obligation period | 3 years |
Deferred Revenue and Performance Obligations - Schedule of Changes in Balance of Deferred Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Change in Balances of Deferred Revenue [Roll Forward] | ||||
Balance, beginning of period | $ 442,463 | $ 316,113 | $ 383,358 | $ 323,962 |
Billings | 352,580 | 273,464 | 1,027,949 | 749,755 |
Balance, end of period | 448,069 | 327,651 | 448,069 | 327,651 |
Subscription and Services | ||||
Change in Balances of Deferred Revenue [Roll Forward] | ||||
Revenue recognized | (327,812) | (249,052) | (912,665) | (707,715) |
Other Revenue | ||||
Change in Balances of Deferred Revenue [Roll Forward] | ||||
Revenue recognized | $ (19,162) | $ (12,874) | $ (50,573) | $ (38,351) |
Net Loss Per Share - Computation of Basic and Diluted Net Loss per Share of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Earnings Per Share [Abstract] | ||||
Net loss | $ (54,417) | $ (40,703) | $ (161,789) | $ (148,142) |
Weighted-average shares used to compute net loss per share, basic (in shares) | 120,164 | 115,809 | 119,050 | 114,653 |
Weighted-average shares used to compute net loss per share, diluted (in shares) | 120,164 | 115,809 | 119,050 | 114,653 |
Net loss per share, basic (in usd per share) | $ (0.45) | $ (0.35) | $ (1.36) | $ (1.29) |
Net loss per share, diluted (in usd per share) | $ (0.45) | $ (0.35) | $ (1.36) | $ (1.29) |
Net Loss Per Share - Narrative (Details) - $ / shares shares in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2020 |
Mar. 31, 2018 |
|
Convertible senior notes due 2023 | |||
Debt Instrument [Line Items] | |||
Potential dilution based on initial conversion price (in shares) | 2.4 | ||
Convertible senior notes due 2025 | |||
Debt Instrument [Line Items] | |||
Potential dilution based on initial conversion price (in shares) | 10.6 | ||
Convertible debt | Convertible senior notes due 2023 | |||
Debt Instrument [Line Items] | |||
Conversion price (in usd per share) | $ 63.07 | ||
Convertible debt | Convertible senior notes due 2025 | |||
Debt Instrument [Line Items] | |||
Conversion price (in usd per share) | $ 108.76 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 3,133 | $ 1,973 | $ 7,842 | $ 4,777 |
Geographic Information - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2021
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Geographic Information - Schedule of Revenue by Geographic Areas (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | $ 346,974 | $ 261,926 | $ 963,238 | $ 746,066 |
United States | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | 174,264 | 136,491 | 489,476 | 391,025 |
EMEA | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | 102,889 | 73,798 | 282,323 | 210,487 |
APAC | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | 35,730 | 28,954 | 98,700 | 81,105 |
Other | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | $ 34,091 | $ 22,683 | $ 92,739 | $ 63,449 |