SPROUT SOCIAL, INC., 10-K filed on 2/23/2024
Annual Report
v3.24.0.1
Cover - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Feb. 16, 2024
Jun. 30, 2023
Document Information [Line Items]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2023    
Document Transition Report false    
Entity File Number 001-39156    
Entity Registrant Name SPROUT SOCIAL, INC.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 27-2404165    
Title of 12(b) Security Class A Common Stock, $0.0001 par value per share    
Trading Symbol SPT    
Security Exchange Name NASDAQ    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
ICFR Auditor Attestation Flag true    
Entity Public Float     $ 2,200.0
Documents Incorporated by Reference Portions of the registrant’s Definitive Proxy Statement for its 2024 Annual Meeting of Stockholders, which is expected be held on May 22, 2024, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2023.    
Entity Central Index Key 0001517375    
Amendment Flag false    
Document Fiscal Year Focus 2023    
Document Fiscal Period Focus FY    
Entity Address, City or Town Chicago    
Entity Address, State or Province IL    
Entity Address, Address Line One 131 South Dearborn St.    
Entity Address, Address Line Two Suite 700    
Entity Address, Postal Zip Code 60603    
City Area Code (866)    
Local Phone Number 878-3231    
Current Fiscal Year End Date --12-31    
Document Financial Statement Error Correction [Flag] false    
Class A common stock      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   49,405,548  
Class B common stock      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   6,844,638  
v3.24.0.1
Audit Information
 12 Months Ended
Dec. 31, 2023
Audit Information [Abstract]  
Auditor Name PricewaterhouseCoopers LLP
Auditor Location Chicago, Illinois
Auditor Firm ID 238
v3.24.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Current assets    
Cash and cash equivalents $ 49,760 $ 79,917
Marketable securities 44,645 92,929
Accounts receivable, net of allowances of $2,177 and $1,789 at December 31, 2023 and 2022, respectively 63,489 35,833
Deferred commissions 27,725 20,369
Prepaid expenses and other assets 10,324 6,418
Total current assets 195,943 235,466
Marketable securities, noncurrent 3,699 12,995
Property and equipment, net 11,407 11,949
Deferred commissions, net of current portion 26,240 19,638
Operating lease, right-of-use asset 8,729 9,503
Goodwill 121,404 2,299
Intangible assets, net 28,065 2,006
Other assets, net 1,098 64
Total assets 396,585 293,920
Current liabilities    
Accounts payable 6,933 4,988
Deferred revenue 140,536 95,740
Operating lease liability 3,948 3,499
Accrued wages and payroll related benefits 18,362 14,257
Accrued expenses and other 11,260 14,322
Total current liabilities 181,039 132,806
Revolving credit facility 55,000 0
Deferred revenue, net of current portion 920 490
Operating lease liability, net of current portion 15,083 18,287
Other noncurrent liabilities 351 0
Total liabilities 252,393 151,583
Commitments and contingencies (Note 11)
Stockholders’ equity    
Additional paid-in capital 471,789 401,419
Treasury stock, at cost (35,113) (32,733)
Accumulated other comprehensive loss (77) (369)
Accumulated deficit (292,412) (225,985)
Total stockholders’ equity 144,192 142,337
Total liabilities and stockholders’ equity 396,585 293,920
Class A common stock    
Stockholders’ equity    
Common stock 4 4
Class B common stock    
Stockholders’ equity    
Common stock $ 1 $ 1
v3.24.0.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Allowance for doubtful accounts $ 2,177 $ 1,789
Class A common stock    
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common Stock, shares authorized (in shares) 1,000,000,000 1,000,000,000
Common stock, shares issued (in shares) 52,133,594 50,413,415
Common stock, shares outstanding (in shares) 49,241,563 47,562,911
Class B common stock    
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common Stock, shares authorized (in shares) 25,000,000 25,000,000
Common stock, shares issued (in shares) 7,201,140 7,667,376
Common stock, shares outstanding (in shares) 6,994,196 7,460,432
v3.24.0.1
Consolidated Statements of Operations - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Revenue      
Total revenue $ 333,643 $ 253,828 $ 187,859
Cost of revenue      
Total cost of revenue 76,268 59,858 46,788
Gross profit 257,375 193,970 141,071
Operating expenses      
Research and development 79,550 61,436 40,049
Sales and marketing 168,091 123,695 84,182
General and administrative 79,011 60,515 44,929
Total operating expenses 326,652 245,646 169,160
Loss from operations (69,277) (51,676) (28,089)
Interest expense (2,754) (153) (300)
Interest income 7,021 2,535 259
Other (expense) income, net (768) (580) (361)
Loss before income taxes (65,778) (49,874) (28,491)
Income tax (benefit) expense 649 366 211
Net loss $ (66,427) $ (50,240) $ (28,702)
Net loss per share attributable to common shareholders, basic and diluted $ (1.19) $ (0.92) $ (0.53)
Weighted Average Number of Shares Outstanding, Diluted 55,664,404 54,611,616 53,768,301
Subscription      
Revenue      
Total revenue $ 330,458 $ 251,213 $ 185,726
Cost of revenue      
Total cost of revenue 75,076 58,767 45,791
Professional services and other      
Revenue      
Total revenue 3,185 2,615 2,133
Cost of revenue      
Total cost of revenue $ 1,192 $ 1,091 $ 997
v3.24.0.1
Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Net loss $ (66,427) $ (50,240) $ (28,702)
Net unrealized gain (loss) on available-for-sale securities, net of tax 292 (369) 0
Comprehensive loss $ (66,135) $ (50,609) $ (28,702)
v3.24.0.1
Consolidated Statements of Stockholders Equity - USD ($)
$ in Thousands
Total
Voting Common Stock
Additional Paid-in Capital
Treasury Stock
Accumulated Other Comprehensive Income
Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2020   53,266,472   3,006,448    
Beginning balance at Dec. 31, 2020 $ 152,099 $ 5 $ 328,343 $ (29,206) $ 0 $ (147,043)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Exercise of stock options (in shares)   62,955        
Exercise of stock options 37   37    
Stock-based compensation expense 21,730   21,730      
Issuance of common stock from settlement of equity award (in shares)   824,344        
Issuance of common stock from settlement of equity awards 0          
Taxes paid related to net share settlement of equity awards (in shares)       19,952    
Taxes paid related to net share settlement of equity awards (1,618)     $ (1,618)    
Proceeds from disgorgement of stockholders short-swing profits 1,664   1,664      
Net loss (28,702)         (28,702)
Ending balance (in shares) at Dec. 31, 2021   54,153,771   3,026,400    
Ending balance at Dec. 31, 2021 145,210 $ 5 351,774 $ (30,824) 0 (175,745)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Exercise of stock options (in shares)   41,045        
Exercise of stock options 16   16      
Stock-based compensation expense 47,906   47,906      
Issuance of common stock from settlement of equity award (in shares)   793,023        
Issuance of common stock from settlement of equity awards 0          
Taxes paid related to net share settlement of equity awards (in shares)       31,048    
Taxes paid related to net share settlement of equity awards (1,909)     $ (1,909)    
Proceeds from disgorgement of stockholders short-swing profits 0          
Stock Issued During Period, Shares, Employee Stock Purchase Plans   35,504        
Stock Issued During Period, Value, Employee Stock Purchase Plan 1,723   1,723      
Other comprehensive gain, net of tax (369)       (369)  
Net loss (50,240)         (50,240)
Ending balance (in shares) at Dec. 31, 2022   55,023,343   3,057,448    
Ending balance at Dec. 31, 2022 $ 142,337 $ 5 401,419 $ (32,733) (369) (225,985)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Exercise of stock options (in shares) 30,000 30,000        
Exercise of stock options $ 29   29      
Stock-based compensation expense 68,002   68,002      
Issuance of common stock from settlement of equity award (in shares)   1,122,902        
Issuance of common stock from settlement of equity awards 0          
Taxes paid related to net share settlement of equity awards (in shares)       41,527    
Taxes paid related to net share settlement of equity awards (2,380)     $ (2,380)    
Proceeds from disgorgement of stockholders short-swing profits 0          
Stock Issued During Period, Shares, Employee Stock Purchase Plans   59,514        
Stock Issued During Period, Value, Employee Stock Purchase Plan 2,339   2,339      
Other comprehensive gain, net of tax 292       292  
Net loss (66,427)         (66,427)
Ending balance (in shares) at Dec. 31, 2023   56,235,759   3,098,975    
Ending balance at Dec. 31, 2023 $ 144,192 $ 5 $ 471,789 $ (35,113) $ (77) $ (292,412)
v3.24.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Cash flows from operating activities      
Net loss $ (66,427) $ (50,240) $ (28,702)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities      
Depreciation of property and equipment 3,137 2,859 2,991
Amortization of line of credit issuance costs 86 30 188
Amortization of premium (accretion of discount) on marketable securities (3,203) (625) 736
Amortization of acquired intangible assets 3,541 1,039 1,043
Amortization of deferred commissions 26,582 18,638 12,175
Amortization of right-of-use operating lease asset 1,553 1,035 673
Stock-based compensation expense 67,704 47,738 21,731
Provision for accounts receivable allowances 2,418 1,199 614
Changes in operating assets and liabilities      
Accounts receivable (26,982) (11,549) (8,920)
Prepaid expenses and other current assets 444 (125) 3,465
Deferred commissions (40,540) (30,328) (23,113)
Accounts payable and accrued expenses (226) 7,051 8,502
Deferred revenue 41,918 26,878 25,589
Lease liabilities (3,549) (2,932) (2,155)
Net cash provided by operating activities 6,456 10,668 14,817
Cash flows from investing activities      
Expenditures for property and equipment (2,073) (1,824) (926)
Payments for business acquisition, net of cash acquired (145,636) 0 0
Purchases of marketable securities (63,085) (189,962) (109,552)
Proceeds from maturity of marketable securities 118,621 154,114 88,360
Proceeds from sale of marketable securities 5,538 0 0
Net cash used in investing activities (86,635) (37,672) (22,118)
Cash flows from financing activities      
Borrowings from line of credit 75,000 0 0
Repayments of line of credit (20,000) 0 0
Payments for line of credit issuance costs (1,031) (23) (183)
Proceeds from exercise of stock options 29 16 37
Proceeds from employee stock purchase plan 2,339 1,723 0
Proceeds from disgorgement of stockholders short-swing profits 0 0 1,664
Employee taxes paid related to the net share settlement of stock-based awards (2,380) (1,909) (1,618)
Net cash provided by (used in) financing activities 53,957 (193) (100)
Net decrease in cash and cash equivalents (26,222) (27,197) (7,401)
Cash and cash equivalents      
Beginning of year 79,917 107,114 114,515
End of year 53,695 79,917 107,114
Supplemental cash flow information      
Cash paid for interest 1,588 62 111
Cash paid for income taxes 735 211 127
ROU asset obtained in exchange for operating lease liability 795 1,079 0
Capital expenditures incurred but not yet paid 137 0 4
Cash and cash equivalents 49,760 79,917 107,114
Restricted Cash $ 3,935 $ 0 $ 0
v3.24.0.1
Nature of Operations and Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Operations and Summary of Significant Accounting Policies Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
Sprout Social, Inc. (“Sprout Social” or the “Company”), a Delaware corporation, began operating on April 21, 2010 to design, develop and operate a web-based comprehensive social media management tool enabling companies to manage and measure their online presence. Customers access their accounts online via a web-based interface or a mobile application. Some customers also purchase the Company’s professional services, which primarily consist of consulting and training services. The Company’s fiscal year end is December 31. The Company’s customers are primarily located throughout the United States, and a portion of customers are located in foreign countries. The Company is headquartered in Chicago, Illinois.
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances. Actual results could differ from those estimates. The Company’s estimates and judgments include, but are not limited to, the estimated period of benefit for incremental costs of obtaining a contract with a customer, the incremental borrowing rate for operating leases, calculation of allowance for credit losses, valuation of assets and liabilities acquired as part of business combinations, useful lives of long-lived assets, stock-based compensation, income taxes, commitments and contingencies and litigation, among others.
Segment Information
The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information for purposes of making operating decisions, assessing financial performance and allocating resources. The Company’s CODM evaluates financial information on a consolidated basis. As the Company operates as one operating segment, all required segment financial information is found in the consolidated financial statements.
Fair Value of Financial Instruments
The Company has the following financial instruments: cash, cash equivalents, marketable securities, accounts receivable, accounts payable and accrued liabilities. The carrying value of the Company’s cash equivalents, accounts receivable, accounts payable and accrued liabilities approximates fair value due to their short-term nature.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates fair
value. Interest earned on cash and cash equivalents is recorded as interest income in the consolidated statement of operations.
Restricted Cash
As of December 31, 2023 and 2022, the Company’s restricted cash balance was $3.9 million and nil, respectively. Restricted cash represents cash that is held as collateral in relation to the Company’s letters of credit that are required as security for the Company’s office leases and reserves held by the Company’s credit card processor. Restricted cash is included in Prepaid expenses and other current assets within the consolidated balance sheets.
Marketable Securities
Marketable securities consist of corporate bonds, commercial paper, U.S. Treasury securities, asset-backed securities, and agency securities. The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All marketable securities are recorded at their estimated fair values. Unrealized gains and losses for the available-for-sale debt securities that are unrelated to credit loss factors are recorded in accumulated other comprehensive income (loss), or AOCI. As of December 31, 2023 and 2022, the Company’s AOCI balance was insignificant. Unrealized losses determined to be credit-related are recorded as Other (expense) income, net in the consolidated statements of operations and comprehensive loss and as an allowance for credit losses on Marketable securities on the consolidated balance sheet. As of December 31, 2023 and 2022, the gross unrealized gains and losses on available-for-sale debt securities were immaterial and there were no expected credit losses related to the Company's available-for-sale debt securities.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable primarily consist of amounts billed and currently due from customers, net of an allowance for credit losses. Subscription fees billed in advance of the related subscription term represent contract liabilities and are presented as accounts receivable and deferred revenues upon establishment of an unconditional right to payment under non-cancellable contracts. Our typical payment terms provide for customer payment within 30 days of the date of the contract.
Accounts receivable are subject to collection risk. The Company performs evaluations of its customers’ financial positions and generally extends credit on account, without collateral. The Company determines the need for an allowance for credit losses based upon various factors, including past collection experience, credit quality of the customer, age of the receivable balance and current economic conditions.
If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Amounts are charged against the allowance for credit losses once collection efforts are unsuccessful. Credit losses on accounts receivable were $2.4 million, $1.2 million and $0.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. The allowance for credit losses was $2.2 million and $1.8 million as of December 31, 2023 and 2022, respectively. The activity related to the allowance for credit losses for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands):
Balance at December 31, 2020$1,428 
Additions614 
Write-offs, net of recoveries(744)
Balance at December 31, 2021$1,298 
Additions1,199 
Write-offs, net of recoveries(708)
Balance at December 31, 20221,789 
Additions2,418 
Write-offs, net of recoveries(2,030)
Balance at December 31, 2023$2,177 
Concentration of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk are primarily cash and cash equivalents, accounts receivable and marketable securities. The Company's cash and cash equivalents are generally held with large financial institutions. Although the Company's deposits may exceed federally insured limits, the financial institutions that the Company uses have high investment-grade credit ratings and, as a result, the Company believes that, as of December 31, 2023, its risk relating to deposits exceeding federally insured limits was not significant.
The Company has credit risk regarding trade accounts receivable as the Company generally does not require collateral. Allowances are maintained for potential credit losses. As of December 31, 2023 and 2022, there were no individual customers that accounted for more than 10% of the Company’s total revenue or net accounts receivable.
The Company’s marketable securities consist of investment-grade corporate bonds, commercial paper, U.S. Treasury securities, asset-backed securities, and agency securities. The Company limits the amount of investments in any single issuer and believes that, as of December 31, 2023, its concentration of credit risk related to marketable securities was not significant.
Property and Equipment
Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives:
Computer equipment and hardware
3-5 years
Furniture and fixtures
3-7 years
Internal-use software
3 years
Leasehold improvementsLesser of useful life or remaining lease term
Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Upon retirement or sale, the cost of assets disposed and the related accumulated depreciation are written off, and any resulting gain or loss is credited or charged to income.
Goodwill
Goodwill consists of the excess purchase price over the fair value of net assets acquired in purchase business combinations. The Company conducts a test for the impairment of goodwill on at least an annual basis as of October 1st or sooner if indicators of impairment arise. The Company first assesses qualitative factors to determine whether it is more likely than not that goodwill is impaired. As part of the qualitative assessment, the Company evaluates factors including macroeconomic conditions, industry and market considerations, cost factors and overall financial performance of its reporting unit.
The Company has a single reporting unit. If the Company concludes that it is more-likely-than-not that its single reporting unit is impaired or if the Company elects not to perform the optional qualitative assessment, a quantitative assessment is performed. For the quantitative assessment, the fair value of the Company’s reporting unit is compared with the carrying amount of net assets, including goodwill, related to the reporting unit. The Company recognizes an impairment charge for the amount, if any, by which the carrying amount of a reporting unit exceeds the fair value of the reporting unit. The Company did not record any impairment loss during the years ended December 31, 2023, 2022 and 2021.
Impairment of Long-Lived Assets
The Company evaluates the recoverability of its long-lived assets, which includes property and equipment and intangible assets, whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability of an asset is measured by comparison of its carrying amount to the anticipated future undiscounted cash flows that the asset is expected to generate. If that comparison indicates that the carrying amount is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset exceeds its fair value. The Company did not record any impairment loss during the years ended December 31, 2023, 2022 and 2021.
Revenue Recognition
The Company generates revenues from subscriptions to the Company’s web-based social media management platform under a software-as-a-service model. Our subscriptions can range from monthly to one-year or multi-year arrangements and are generally non-cancellable. The Company’s customers do not have the right to take possession of the online software solution.
The Company commences revenue recognition when control of these products is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for such products.
The Company determines revenue recognition through the following steps:
•identify the contract with a customer;
•identify the performance obligations in a contract;
•determination of the transaction price;
•allocate the transaction price to the performance obligations identified in the contract; and
•recognize revenue when (or as) performance obligations are satisfied.
Identify the contract with a customer
A customer contract is generally identified when the Company and a customer have executed an agreement or online acceptance that requires the Company to grant access to its online software products and provide professional services in exchange for consideration from the customer.
Identify the performance obligations in a contract
A performance obligation is a promise to provide a distinct service or a series of distinct services. A service that is promised to a customer is distinct if the customer can benefit from the service either on its own or together with other readily available resources, and a company’s promise to transfer the service to the customer is separately identifiable from other promises in the contract.
The Company has determined that subscriptions for its online software products are a distinct performance obligation, because no implementation work is required and the online software product is fully functional once a customer has access.
In addition, the Company sells professional services consisting of, but not limited to, implementation fees, specialized training, one-time reporting services and recurring periodic reporting services. Professional services are distinct, as they are sold separately, and the customer can benefit from the services to make better use of the online product purchased.
Determination of the transaction price
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company estimates any variable consideration it will be entitled at contract inception and will reassess as circumstances change, when determining the transaction price. The transaction price for subscription and professional services is generally fixed at contract inception; therefore, the Company’s contracts do not contain a significant amount of variable consideration. As a result, the amount of revenue recognized in the periods presented from performance obligations satisfied (or partially satisfied) in previous periods due to changes in the transaction price was not material.
Allocate the transaction price to the performance obligations identified in the contract
If the contract contains a single performance obligation, the Company allocates the entire transaction price to the single performance obligation. For contracts containing multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative standalone selling price (“SSP”) of the services provided to the customer. The Company determines the SSP based upon the prices at which the Company separately sells subscription and various professional services, and based on the Company’s overall pricing objectives, taking into consideration market conditions, value of the Company’s contracts, the types of offerings sold, customer demographics and other factors.
Recognize revenue when (or as) performance obligations are satisfied
Subscription revenues are recognized ratably over the contract terms beginning on the date the Company’s service is made available to customers, which typically begins on the commencement date of each contract as no implementation work is required. The Company’s customers do not have the right to take possession of the online software solution. The Company’s subscription service arrangements are generally non-cancellable and do not provide for refund of subscription fees.
Professional services are typically provided for a fixed fee, and revenues are recognized over time for these contracts as services are provided to the customer. Professional services revenue represents less than 1% of revenue for the periods presented.
Sales Commissions
Sales force commissions are considered incremental costs of obtaining a contract with a customer. Sales commissions are paid on initial contracts with new customers and for expansion of contracts with existing customers. Commissions are not paid on customer renewals. Sales commissions are deferred and amortized on a straight-line basis over a period of benefit of three years, as determined by the Company. The Company determined the three-year period by taking into consideration the products sold, expected customer life, expected contract renewals, technology life cycle and other factors. Amortization expense is included as a component of sales and marketing expense. Deferred commissions during the year ended December 31, 2023 increased $14.0 million as a result of deferring incremental costs of obtaining contracts with customers of $40.5 million, which was offset by $26.6 million of amortization. Deferred commissions during the year ended December 31, 2022 increased $11.7 million as a result of deferring incremental costs of obtaining contracts with customers of $30.3 million, which was offset by $18.6 million of amortization. The Company periodically reviews the deferred sales commissions for impairment and noted no impairment loss for the years ended December 31, 2023, 2022 and 2021.
Cost of Revenues
Cost of revenues primarily consist of expenses related to hosting the Company’s service and providing support to customers, depreciation associated with computers and hardware and amortization expense related to acquired developed technologies that directly benefit sales. These expenses are comprised of hosted data center global costs, fees paid to third-party data providers and personnel-related costs directly associated with cloud infrastructure and customer support, including salaries, benefits, bonuses and allocated overhead. Overhead associated with facilities and information technology is allocated to cost of revenue and operating expenses based on headcount.
Advertising Costs
Advertising costs primarily include online advertising on search engines. Advertising costs are expensed as incurred and included as a component of sales and marketing expenses. The Company incurred approximately $5.1 million, $4.4 million and $4.5 million in advertising costs during the years ended December 31, 2023, 2022 and 2021, respectively.
Research and Development Costs
Research and development expenses include payroll, employee benefits and other expenses associated with product development.
Capitalized Internal-Use Software Costs
Certain payroll and stock compensation costs incurred to develop functionality for the Company’s platform, as well as certain upgrades and enhancements that are expected to result in enhanced functionality are capitalized during the development stage. Costs incurred in the preliminary stages of development are expensed as incurred. Once software has reached the development stage, direct and incremental costs are capitalized until the software is substantially complete and ready for its intended use. Capitalized internal-use software costs are included within property and equipment, net on the
consolidated balance sheets, and are amortized over the estimated useful life of the software, which is typically three years.
Stock-Based Compensation
The Company recognizes compensation expense for equity awards based on the grant‐date fair value over the remaining requisite service period for the award. For equity awards with only service conditions, the Company recognizes compensation expense on a straight-line basis over the remaining requisite service period for the award. For equity awards with both service and performance conditions, compensation expense is recognized on a graded vesting basis over the requisite service period once the achievement of the performance condition is considered probable. The grant-date fair value of RSUs that contain a market condition is determined using a Monte Carlo valuation model. The Company recognizes forfeitures as they occur.
Foreign Currency
The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. Accordingly, monetary balance sheet accounts are remeasured using exchange rates in effect at the balance sheet dates and non-monetary items are remeasured at historical exchange rates. Expenses are generally remeasured at the average exchange rates for the period. Foreign currency related gains and losses have been immaterial during the periods presented.
Leases
The Company determines if an arrangement is a lease at inception, and all significant lease arrangements are generally recognized at lease commencement. Operating lease right-of-use, or ROU, assets and operating lease liabilities are recognized at commencement based on the present value of fixed payments not yet paid over the remaining lease term. ROU assets also include any initial indirect costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. For short-term leases of 12 months or less, no ROU asset or lease liability is recorded. The Company records rent expense in its consolidated statement of operations and comprehensive loss on a straight-line basis over the term of the lease and records variable lease payments as incurred. Additionally, the Company has elected to combine lease and non-lease components and account for them as a single component. ROU assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent its obligations to make lease payments arising from the lease. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise the option. The Company uses its incremental borrowing rate in determining the lease liabilities, as its leases generally do not provide an implicit rate. The incremental borrowing rate is an estimate of the collateralized borrowing rate the Company would incur on future lease payments over a similar term based on the information available at the commencement date. The Company does not have any finance leases.
Commitments and Contingencies
The Company evaluates all pending or threatened commitments and contingencies, if any, that are reasonably likely to have a material effect on its operations or financial position. The Company assesses the probability of an adverse outcome and records a provision for a liability when management believes that it is probable that a liability has been incurred and the amount can be reasonably estimated.
Income Taxes
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that these assets are believed to be more likely than not to be realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized. In making such a determination, all available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations.
Tax benefits for uncertain tax positions are based upon management’s evaluation of the information available at the reporting date. To be recognized in the financial statements, a tax benefit must be at least more-likely-than-not of being sustained based on technical merits. The benefit for positions meeting the recognition threshold is measured as the largest benefit more-likely-than-not of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of provision for income taxes. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheets, as applicable.
The Company files income tax returns in the U.S. federal jurisdiction, Illinois and other state jurisdictions. It is difficult to predict the final timing and resolution of any particular uncertain tax position. Based on the Company’s assessment of many factors, including past experience and complex judgments about future events, the Company does not currently anticipate significant changes in its uncertain tax positions over the next 12 months.
Net Loss per Share
The Company calculates basic net loss per share by dividing net loss attributable to common shareholders by the weighted-average number of the Company’s common stock shares outstanding during the respective period. Net loss attributable to common shareholders is net loss minus convertible preferred stock dividends declared, of which there were none during the periods presented.
The Company calculates diluted net loss per share using the treasury stock and if-converted methods, which consider the potential impacts of outstanding stock options and RSUs. Under these methods, the numerator and denominator of the net loss per share calculation are adjusted for these securities if the impact of doing so increases net loss per share. During the periods presented, the impact is to decrease net loss per share and therefore the Company is precluded from adjusting its calculation for these securities. As a result, diluted net loss per share is calculating using the same formula as basic net loss per share.
Business Combinations
The Company recognizes and measures the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date. Any excess or deficiency of the purchase consideration when compared to the fair value of the net assets acquired, if
any, is recorded as goodwill or gain from a bargain purchase. Such valuations require that management make estimates and assumptions, especially with respect to the identifiable intangible assets. The estimates in valuing intangible assets include, but are not limited to, the time and expense to recreate the assets, future expected cash flows from the asset, useful lives, customer churn rate, and discount rates.
The estimates are inherently uncertain and subject to revision as additional information is obtained during the measurement period for an acquisition, which may last up to one year from the acquisition date. During the measurement period the Company may record adjustments to the fair value of tangible and intangible assets acquired and liabilities assumed, with a corresponding offset to goodwill. After the conclusion of the measurement period or the final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to earnings.
Recently Adopted Accounting Pronouncements
In October 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update (“ASU”) No. 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). The ASU requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). ASU 2021-08 is effective for the Company’s fiscal year beginning January 1, 2023, and interim periods within that fiscal year, and should be applied on a prospective basis. Early adoption is permitted. The Company adopted the ASU as of January 1, 2023, and the adoption did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures for significant segment expenses. All disclosure requirements of ASU 2023-07 are required for entities with a single reportable segment. The ASU is effective for the Company’s fiscal year beginning January 1, 2025, and interim periods thereafter, and should be applied on a retrospective basis to all periods presented. Early adoption is permitted. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact on its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures. The ASU will be effective for the Company beginning with its annual report for the year ending December 31, 2025 and allows for adoption on a prospective basis, with a retrospective option. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
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Revenue Recognition
 12 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
Disaggregation of Revenue
The Company provides disaggregation of revenue based on geographic region in Note 12 of the Notes to the Financial Statements (Part I, Item 8 of this Annual Report) and based on the subscription versus professional services and other classification on the consolidated statements of operations and comprehensive loss, as it believes these best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
Deferred Revenue
Deferred revenue is recorded upon establishment of unconditional right to payment under non-cancellable contracts for subscription and professional services described above and is recognized as the revenue recognition criteria are met. The Company generally invoices customers in advance in monthly, quarterly, semi-annual and annual installments. The deferred revenue balance is influenced by several factors, including the compounding effects of renewals, invoice duration, timing and size.
The balance of deferred revenue, including current and non-current balances, as of December 31, 2023 and 2022 were $141.5 million and $96.2 million, respectively. For the year ended December 31, 2023, the additions to our deferred revenue balance were due to $375.6 million of additional invoicing and $3.2 million and $0.1 million of deferred revenue acquired from the Tagger and Repustate acquisitions, respectively, which was offset by $333.6 million of revenue recognized during the same period. Deferred revenue during the year ended December 31, 2022, increased $26.9 million as a result of $280.7 million of additional invoicing which was offset by $253.8 million of revenue recognized during the same period. The amount of revenue recognized during the years ended December 31, 2023 and 2022 that was included in deferred revenue at the beginning of each period was $94.4 million and $68.6 million, respectively.
As of December 31, 2023, including amounts already invoiced and amounts contracted but not yet invoiced, $275.0 million of revenue is expected to be recognized from remaining performance obligations, of which 72% is expected to be recognized in the next 12 months, 21% is expected to be recognized in the subsequent 12 months and the remainder thereafter.
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Property and Equipment
 12 Months Ended
Dec. 31, 2023
Property, Plant and Equipment [Abstract]  
Property and Equipment
As of the dates specified below, property and equipment consisted of the following (in thousands):
As of December 31,
20232022
Leasehold improvements$18,336 $18,308 
Furniture and fixtures4,114 4,015 
Computer equipment and hardware4,539 4,528 
Internal-use software2,165 774 
Total property and equipment29,154 27,625 
Less: Accumulated depreciation and amortization(17,747)(15,676)
Total property and equipment, net$11,407 $11,949 
The Company recognized depreciation and amortization expense on property and equipment of $3.1 million, $2.9 million and $3.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.
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Business Combinations and Asset Acquisitions
 12 Months Ended
Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
Business Combination Disclosure
Tagger Media, Inc.
On August 2, 2023, the Company completed its acquisition of all the outstanding equity of Tagger Media, Inc. (“Tagger”), an influencer marketing and social intelligence platform. The Company acquired Tagger in order to expand into the influencer marketing category. Tagger’s platform enables marketers to
discover influencers, plan and manage campaigns, analyze competitor strategies, report on trends and measure return on investment.
The Company acquired Tagger for a total preliminary purchase consideration of $144 million in cash, which incorporates the impact of various customary adjustments such as working capital, cash and indebtedness.
The Company funded the purchase consideration with a combination of cash on hand and $75 million borrowed under the revolving credit facility further described in Note 8 of the Notes to the Financial Statements (Part I, Item 8 of this Annual Report). For the year ended December 31, 2023, the Company incurred $4.3 million acquisition-related costs which primarily related to advisory and legal costs, and were recorded within General and administrative expense in the consolidated statements of operations.
The excess of purchase consideration over the fair value of net assets acquired was recorded as goodwill, and is primarily attributable to expanded market opportunities from integrating the acquired developed technologies with the Company’s offerings. Goodwill is not deductible for income tax purposes.
The fair values of the tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. These estimates are based on preliminary information and may be subject to further revision as additional information is obtained during the measurement period, which may last up to 12 months from the date of the acquisition. The primary area that remains preliminary as of December 31, 2023 relates to income taxes. The Company expects to finalize the fair value measurements as soon as practicable, but not later than 12 months from the date of acquisition.
The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands):
August 2, 2023
Cash and cash equivalents$4,648 
Accounts receivable2,979 
Other current and noncurrent assets932 
Intangible assets27,800 
Accounts payable, accrued expenses and other liabilities(1,758)
Deferred revenue(3,243)
Net assets acquired, excluding Goodwill31,358 
Goodwill112,494 
Total consideration$143,852 
Cash and cash equivalents acquired(4,648)
Cash paid for acquisition of business, net of cash acquired$139,204 
There have been no significant measurement period adjustments following the date of acquisition.
The Company engaged a third-party valuation expert to aid its analysis of the acquired identifiable intangible assets. All estimates, key assumptions and forecasts were either provided by or reviewed by the Company. While the Company chose to utilize a third-party valuation expert for assistance, the fair value analysis and related valuations reflect the conclusions of management and not those of any third party.
The fair values of the acquired technology and the trademark identified intangible assets were determined utilizing the relief from royalty method under the income approach. The fair values of the customer relationships were valued using the multi-period excess-earnings method. The Company applied judgment which involved the use of the assumptions with respect to revenue growth rates, customer attrition rate, discount rate, royalty rate, obsolescence rate and total operating expenses.
Acquired intangible assets are being amortized over the estimated useful lives on a straight-line basis. The following table summarizes the estimated preliminary fair values (in thousands) and estimated useful lives for the identifiable intangible assets acquired as of the acquisition date:
Fair ValueExpected Useful Life
Customer Relationships$12,400 7 years
Acquired Technology14,100 5 years
Trademark1,300 5 years
$27,800 
The Company has included the financial results of Tagger in its consolidated financial statements from the date of acquisition. Separate financial results and pro forma financial information for Tagger have not been presented as the effect of this acquisition was not material to the Company’s financial results.
Repustate, Inc.
On January 19, 2023, the Company completed the acquisition of all the outstanding equity of Repustate, Inc. The acquisition has increased the Company’s power, breadth and automation of social listening, messaging, and customer care capabilities with added sentiment analysis, natural language processing (NLP) and artificial-intelligence (AI).
The total final purchase consideration for the acquisition was approximately $8.3 million, consisting of approximately $6.8 million in cash paid at the closing of the acquisition and a holdback of $1.5 million in cash to be paid as purchase consideration after the one-year anniversary of the closing of the acquisition, assuming no claims by the Company against the holdback amount for post-closing purchase price adjustments or indemnification matters. The purchase price holdback was paid in full in January 2024.
The excess of purchase consideration over the fair value of net assets acquired was recorded as goodwill, and is primarily attributable to expected post-acquisition synergies from integrating the technology into Sprout’s platform. The goodwill is not deductible for income tax purposes.
The fair values of the tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The allocation of fair value of purchase consideration was finalized in the fourth quarter of 2023, and there were no material changes to the fair value of assets acquired and liabilities assumed, as previously reported.
The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands):
January 19, 2023
Cash and cash equivalents$366 
Intangible assets1,800 
Deferred tax liability(477)
Other net tangible assets and liabilities assumed(4)
Net assets acquired, excluding Goodwill1,685 
Goodwill6,611 
Total consideration$8,296 
Deferred consideration related to holdback(1,498)
Cash and cash equivalents acquired(366)
Cash paid for acquisition of business, net of cash acquired$6,432 
The following table summarizes the estimated fair values (in thousands) and estimated useful lives for the identifiable intangible assets acquired as of the acquisition date:
Fair ValueExpected Useful Life
Customer Relationships$200 1 year
Acquired Technology1,600 5 years
$1,800 
The Company has included the financial results of Repustate in its consolidated financial statements from the date of acquisition. Separate financial results and pro forma financial information for Repustate have not been presented as the effect of this acquisition was not material to the Company’s financial results.
Goodwill
The changes in the carrying amount of goodwill during the year ended December 31, 2023 were as follows (in thousands):
Goodwill balance as of December 31, 2022
$2,299 
Addition - acquisition of Tagger112,494 
Addition - acquisition of Repustate6,611 
Goodwill balance as of December 31, 2023
$121,404 
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Intangible Assets
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets
As of the dates specified below, intangible assets, net consisted of the following (in thousands):
As of December 31,
20232022
Customer relationships19,900 7,300 
Acquired Technology15,700 — 
Trademark1,300 — 
36,900 7,300 
Less: Accumulated amortization
Customer relationships(7,259)(5,294)
Acquired Technology(1,468)— 
Trademark(108)— 
(8,835)(5,294)
Intangible assets, net$28,065 $2,006 

The change in the gross carrying amount of intangible assets for the year ended December 31, 2023 is related to the acquisitions of Tagger and Repustate. Refer to Note 4 of the Notes to the Financial Statements (Part I, Item 8 of this Annual Report).
Intangible assets are all finite-lived and are being amortized on a straight-line basis over their expected useful lives. Amortization of intangible assets totaled $3.5 million, $1.0 million, and $1.0 million for the years ended December 31, 2023, 2022 and 2021, respectively. The expected future amortization of intangible assets as of December 31, 2023 is summarized as follows (in thousands):
Years Ending December 31,Amortization Expense
20246,153 
20255,171 
20265,171 
20275,171 
20283,595 
Thereafter2,804 
$28,065 
The following table sets forth the weighted-average amortization period, in total and by major intangible asset class:
Asset ClassWeighted-Average Amortization Period
(in years)
Customer relationships7
Acquired Technology5
Trademark5
All Intangible Assets6
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Operating Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Operating Leases
The Company has operating lease agreements for offices in Chicago, Illinois, Seattle, Washington, Santa Monica, California, and Dublin, Ireland. The Chicago lease expires in January 2028, the Seattle lease expires in January 2031, the Santa Monica lease expires in January 2025, and the Dublin lease expires in June 2025. These operating leases require escalating monthly rental payments ranging from approximately $14,000 to $280,000. Under the terms of the lease agreements, the Company is also responsible for its proportionate share of taxes and operating costs, which are treated as variable lease costs. The Company’s operating leases typically contain options to extend or terminate the term of the lease. The Company currently does not include any options to extend leases in its lease terms as it is not reasonably certain to exercise them. As such, it has recorded lease obligations only through the initial optional termination dates above.
On August 2, 2023, upon completion of the acquisition of Tagger, the Company assumed an operating lease for an office suite located in Santa Monica, California. Refer to Note 4 of the Notes to the Financial Statements (Part I, Item 8 of this Annual Report) for further discussion. The right-of-use assets and operating lease liabilities that the Company assumed with the Santa Monica lease were not significant.
During the fourth quarter of 2023, the Company reassessed the term of the Dublin office lease and determined it was reasonably certain to not exercise its option to early terminate the lease. As a result of this determination, the Company remeasured the operating lease liability and associated right-of-use asset based on an expected expiration date of June 2025.
The following table provides a summary of operating lease assets and liabilities as of December 31, 2023 (in thousands):
Assets
Operating lease right-of-use assets$8,729 
Liabilities
Operating lease liabilities3,948 
Operating lease liabilities, non-current15,083 
Total operating lease liabilities$19,031 

Operating lease expense for the year ended December 31, 2023, 2022, and 2021 was $2.7 million, $2.3 million and $2.0 million, respectively. Variable lease costs for the year ended December 31,
2023, 2022 and 2021 was $3.6 million, $3.5 million and $3.3 million, respectively. Cash payments related to operating leases for the year ended December 31, 2023, 2022 and 2021 were $8.2 million, $7.7 million and $6.7 million, respectively. There was no sublease rental income recognized for any of the periods presented.
As of December 31, 2023, the weighted-average remaining lease term is 4.9 years and the weighted-average discount rate is 5.5%.
Remaining maturities of operating lease liabilities as of December 31, 2023 are as follows (in thousands):
Years ending December 31,
2024$4,873 
20254,503 
20264,298 
20274,392 
20281,277 
Thereafter2,326 
Total future minimum lease payments$21,669 
Less: imputed interest(2,638)
Total operating lease liabilities$19,031 
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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
The components of loss before income taxes are as follows (in thousands):
Year Ended December 31,
202320222021
Domestic$(64,497)$(49,177)$(27,097)
Foreign(1,281)(697)(1,394)
Loss before income taxes$(65,778)$(49,874)$(28,491)
There is no provision for domestic income taxes because the Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets. In 2023, 2022, and 2021, the Company recognized an immaterial provision related to foreign income taxes.
A reconciliation of the difference between the federal statutory rate and the effective income tax rate as a percentage of income before taxes for the years ended December 31, 2023, 2022, and 2021 is as follows (in thousands):
Year Ended December 31,
202320222021
AmountTax RateAmountTax RateAmountTax Rate
Federal statutory income tax$(13,813)21.00 %$(10,474)21.00 %$(5,983)21.00 %
State income tax, net of federal tax benefit(2,423)3.68 (1,863)3.74 (1,024)3.59 
Foreign tax(75)0.11 43 (0.09)(91)0.32 
Section 162(m) limitation1,693 (2.57)2,371 (4.75)2,591 (9.09)
Other304 (0.46)687 (1.38)516 (1.72)
Valuation allowance net of deferred tax assets18,389 (27.96)12,075 (24.21)16,485 (57.86)
Stock-based compensation2,051 (3.12)(2,412)4.84 (11,865)41.64 
R&D Credit(6,100)9.27 — — — — 
Acquisitions603 (0.92)— — — — 
Return to provision20 (0.03)(61)0.12 (418)1.47 
Effective income tax rate$649 (1.0)%$366 (0.7)%$211 (0.7)%
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax
purposes. Significant components of the Company’s deferred taxes at December 31, 2023 and 2022 are as follows (in thousands):
As of December 31,
20232022
Deferred tax assets
Net operating loss carryforwards$77,309 $66,912 
Research & Development Costs15,001 5,846 
Operating lease liability4,677 5,363 
Stock-based compensation6,073 4,622 
Research & Development Credits7,368 — 
Other1,892 1,644 
Total deferred tax assets112,320 84,387 
Deferred tax liabilities
Depreciation and amortization(7,727)(1,986)
Deferred commissions and bonus(13,261)(9,849)
Operating lease right-of-use asset(2,145)(2,340)
Other(823)(940)
Total deferred tax liabilities(23,956)(15,115)
Less: Valuation allowance(88,670)(69,272)
Net deferred tax asset (liability)$(306)$— 
The Company assesses all available positive and negative evidence to evaluate the realizability of its deferred tax assets and whether or not a valuation allowance is necessary. The Company’s three-year cumulative loss position was significant negative evidence in assessing the need for a valuation allowance. The weight given to positive and negative evidence is commensurate with the extent such evidence may be objectively verified. Given the weight of objectively verifiable historical losses from operations, the Company has recorded a full valuation allowance on its deferred tax assets. The Company may be able to reverse the valuation allowance when sufficient positive evidence exists to support the reversal of the valuation allowance.
The increase in the valuation allowance for deferred tax assets was approximately $19.4 million for the year ended December 31, 2023, $12.1 million for the year ended December 31, 2022, and $16.5 million for the year ended December 31, 2021. The increase in the valuation allowance was primarily due to the increase in the net operating loss deferred tax asset, the establishment of a deferred tax asset for research and development (R&D) credits, and the increase in the deferred tax asset for capitalized R&D costs.
The Company commissioned a multi-year R&D credit study in 2023, which was completed during the fourth quarter of 2023, and resulted in a favorable adjustment to the Company’s effective tax rate. None of the R&D credits have been utilized as of December 31, 2023. The recorded net carryover R&D credit as of December 31, 2023 expected to be utilized in future periods is $7.4 million (net of any reserves).
The Tax Cuts and Jobs Act (TCJA) of 2017 proposed changes to the Internal Revenue Code (IRC) section 174, which governs the treatment of R&D costs for tax purposes. The changes require
companies to capitalize R&D costs incurred after December 31, 2021. Under new IRC Section 174(c)(3), software development costs are treated as R&D expenditures. The Company has capitalized and amortized relevant software development costs under IRC section 174 and recorded a resulting deferred tax asset of $15.0 million as of December 31, 2023.
The Company elected to account for Global Intangible Low-Taxed Income (“GILTI”) as a current-period expense when incurred. Therefore, the Company has not recorded deferred taxes for basis differences expected to reverse in the future periods.
The Company has total tax effected net operating loss carryforwards for U.S. federal income tax purposes of approximately $64.8 million as of December 31, 2023, which begin to expire in 2031. The Company has total tax effected net operating loss carryforwards for U.S. state income tax purposes of approximately $12.5 million as of December 31, 2023, which begin to expire in 2031. The operating loss carryforwards may be limited due to a change in control in the Company’s ownership as defined by the Internal Revenue Code Sections 382. Any future changes in the Company’s ownership may limit the use of such carryforward benefits.
The Company recognizes tax benefits from uncertain tax positions if it is more likely than not that the tax position will be sustained by the tax authority upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. If a tax position meets the more-likely-than-not threshold, the Company measures the tax position as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement.
The total amount of uncertain tax positions as of December 31, 2023 and 2022 was $2.5 million and nil, respectively. The reconciliation of uncertain tax positions at the beginning and end of the years below is as follows (in thousands):
As of December 31,
20232022
Beginning balance— — 
Gross increase (decrease) related to prior year positions— — 
Gross decrease related to settlements— — 
Gross increase related to current year positions2,456 — 
Ending balance2,456 — 
At December 31, 2023, approximately $2.5 million would reduce the Company’s annual effective tax rate, if recognized. The Company recognizes interest and, if applicable, penalties for any uncertain tax positions. Interest and penalties related to uncertain tax positions are recorded as a component of income tax expense. In the years ended December 31, 2023, 2022, and 2021, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits.
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Due to its operating loss carryforwards, the U.S. federal statute of limitations remains open for tax year 2010 and onward and the Company continues to be subject to examination by the Internal Revenue Service for tax years 2010 and later. The resolutions of any examinations are not expected to be material to these financial statements.
The Company does not provide for U.S. income taxes on unremitted earnings of foreign subsidiaries. Unremitted earnings of foreign subsidiaries were immaterial at December 31, 2023.
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Revolving Line of Credit
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Revolving Line of Credit
On August 1, 2023, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, the banks and other financial institutions or entities party thereto as lenders and MUFG Bank, LTD. as administrative agent and collateral agent. The Credit Agreement provides for a $100 million senior secured revolving credit facility (the “Facility”), maturing on August 1, 2028. Borrowings under the Facility may be used to finance acquisitions and other investments permitted under the terms of the Credit Agreement, to pay related fees and expenses and for general corporate purposes. At December 31, 2023, the Company had an outstanding balance of $55 million under the Facility.
Borrowings under the Facility may be designated as SOFR Loans or ABR Loans (each as defined in the Credit Agreement), subject to certain terms and conditions under the Credit Agreement, and bear interest at a rate of either (i) SOFR (subject to a 1.0% floor), plus 0.10%, plus a margin ranging from 2.75% to 3.25% based on the Company’s liquidity or (ii) ABR (subject to a 2.0% floor) plus a margin ranging from 1.75% to 2.25% based on the Company’s liquidity. The Facility also includes a quarterly commitment fee on the unused portion of the Facility of 0.30% or 0.35% based on the Company’s liquidity. As of December 31, 2023, the borrowings under the Facility were designated as SOFR Loans and the interest rate in effect for the outstanding balance was approximately 8.23%.
Debt issuance costs associated with the Facility were recorded to Other assets, net within the consolidated balance sheets and are being amortized as interest expense on a straight-line basis over the term of the Facility.
The Credit Agreement includes customary conditions to credit extensions, affirmative and negative covenants, and customary events of default. The customary conditions also include restrictions on the Company’s ability to incur liens, incur indebtedness, make or hold investments, execute certain change of control transactions, business combinations or other fundamental changes to its business, dispose of assets, make certain types of restricted payments or enter into certain related party transactions, subject to customary exceptions. In addition, the Credit Agreement contains financial covenants as to (i) minimum liquidity, requiring the maintenance, at all times and measured at the end of each fiscal quarter, of cash and cash equivalents of not less than the greater of (x) $30 million and (y) 30% of the total revolving commitments, and (ii) minimum recurring revenue growth, requiring recurring revenue growth for the trailing four fiscal quarter period, measured at the end of each fiscal quarter, of not less than 115% of the actual recurring revenue for the same period in the prior fiscal year. As of December 31, 2023, the Company was in compliance with the covenants in the Credit Agreement.

The Company is contingently liable under two standby letters of credit which are required as security for the Company’s current office leases (Note 6). At December 31, 2023, the Company had $2.7 million in secured letters of credit outstanding. At December 31, 2022, the Company had $2.7 million in unsecured letters of credit outstanding.
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Stockholders Equity
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Convertible Preferred Stock and Stockholders Equity
Common Stock
As of December 31, 2023, the Company has authorized 1,000,000,000 shares of Class A common stock with a par value of $0.0001 per share and 25,000,000 shares of Class B common stock with a par value of $0.0001 per share. Each holder of Class A and Class B common stock shall be entitled to one and ten votes, respectively, for each share held as of the record date and shall be entitled to receive dividends, when, as and if declared by the Board of Directors. Each share of Class B common stock is convertible into one share of Class A common stock at any time and will convert automatically upon certain transfers and upon the earlier of (i) the first date on which the voting power of all then
outstanding shares of Class B common stock represents less than 10% of the combined voting power of all then outstanding shares of Class A common stock and Class B common stock, (ii) the date that is seven (7) years from the closing of the IPO on December 17, 2019 and (iii) the date specified by a vote of the holders of a majority of the then outstanding shares of Class B common stock, voting as a separate class. Following such conversion, each share of Class A common stock will have one vote per share and the rights of the holders of all outstanding shares of common stock will be identical. The total Class A and Class B common stock outstanding as of December 31, 2023 is 49,241,563 and 6,994,196 shares, respectively.
v3.24.0.1
Incentive Stock Plan
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Incentive Stock Plan
On April 27, 2016, the Company established the Sprout Social, Inc. 2016 Stock Plan (the “2016 Plan”) as an amendment and restatement of the Sprout Social, Inc. 2010 Amended and Restated Stock Incentive Plan, under which awards, including options, restricted stock purchases rights, restricted stock bonus or restricted stock unit awards, for up to 5,467,862 shares of common stock may, at the discretion of the Board of Directors, be issued to employees, consultants, and directors of the Company. Under the 2016 Plan, any shares withheld upon settlement of RSUs, as elected by the employee to cover withholding taxes, will again be available for future grants under the plan. There were no changes to existing stock options outstanding as a result of the amendment and restatement. The exercise price for each award is determined by the Board of Directors. However, each option must have an exercise price of at least the fair market value of the option and no less than 110% of fair market value for options granted to a 10% owner optionee. The Company continues to maintain the 2016 Plan, although no further grants are authorized under the 2016 Plan following the effectiveness of the 2019 Incentive Award Plan.
Effective October 17, 2019, the Company established the Sprout Social, Inc. 2019 Incentive Award Plan (the “2019 Plan”), under which awards, including options, stock appreciation rights, restricted stock awards, restricted stock unit awards, other stock or cash based awards and dividend equivalent awards, for up to 5,293,497 shares of Class A common stock may, at the discretion of the Board of Directors, be issued to employees, consultants, and directors of the Company.
Effective December 12, 2019, the Company established the Sprout Social, Inc. 2019 Class B Incentive Award Plan (the “Class B Plan”), under which cash and equity incentive awards, for up to 550,000 shares of Class B common stock were, at the discretion of the Board of Directors, issued to employees, consultants, and directors of the Company, with the expectation that shares would only be issued to the Company’s CEO depending on the valuation of the Company in connection with the IPO and the achievement of market capitalization thresholds thereafter. There are no further grants authorized under the Class B Plan.
The only awards granted as of December 31, 2023 are stock options and restricted stock units.
Stock-based Compensation Expense
    Stock-based compensation expense is included in the consolidated statement of operations and comprehensive loss as follows (in thousands):
Years Ended December 31,
202320222021
Cost of revenue$3,224 $2,491 $1,062 
Research and development18,478 11,280 4,039 
Sales and marketing30,116 23,066 10,636 
General and administrative15,886 10,901 5,993 
Total stock-based compensation expense
$67,704 $47,738 $21,730 

For the periods presented, stock-based compensation expense consisted of expense from restricted stock units. There was no expense related to stock options.
Restricted Stock Units
At the end of 2015, the Company began issuing restricted stock units. The general terms of the restricted stock units issued under the 2016 Plan require both a service and performance condition to be satisfied prior to vesting. The service condition is satisfied upon the participant’s completion of a required period of continuous service from the vesting start date. The performance condition was satisfied upon the completion of the IPO. The general terms of the restricted stock units issued under the 2019 Plan require only a service condition to be satisfied prior to vesting. However, certain executive grants issued under the 2019 Plan require both the satisfaction of a service condition and a performance condition which includes the achievement of subscription revenue targets, prior to vesting.
The table below summarizes the activity regarding unvested restricted stock units for the year ended December 31, 2023:
Restricted
Stock Units
Weighted
Average Grant
Date Fair Value
Unvested at December 31, 20222,692,277 $62.71 
Granted2,613,736 50.75 
Vested(1,177,073)55.77 
Forfeited(404,233)59.27 
Unvested at December 31, 20233,724,707 $56.89 
The weighted-average grant date fair value per share for restricted stock units granted during the years ended December 31, 2023, 2022 and 2021 was $50.75, $64.17 and $85.69, respectively. The total unrecognized stock-based compensation expense relating to these awards as of December 31, 2023 was $182.9 million, which is expected to be recognized over a weighted-average period of 3.0 years.
Stock Options
The options become fully vested at such time or times, or upon such event or events, and subject to such terms, conditions, performance criteria, and restrictions as shall be determined by the Board of Directors and set forth in each stock option notice; provided, however, that no exercise period shall exceed ten years from the grant date.
The fair value of each option is estimated on the date of grant based on the Black-Scholes option pricing model. The annual rate of dividends is expressed as a dividend yield which is a constant percentage of the stock price, which is determined by the board of directors with input from a third-party valuation specialist. The expected life of an option represents the period of time that an option is expected to be outstanding. The risk‐free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards.
The Company has not paid dividends and does not anticipate paying a cash dividend on common stock in the foreseeable future and, accordingly, uses an expected dividend yield of zero. As the Company was privately held during the life of the options, there is no historical basis of the stock volatility. Accordingly, the expected volatility is based primarily on the historical volatilities of similar entities’ common stock over the most recent period commensurate with the estimated expected term of the awards. The expected term of an award is determined using the simplified method for plain vanilla options, consistent with applicable accounting guidance.
At the end of 2015, the Company ceased issuing stock options.
The table below summarizes the stock option activity for the year ended December 31, 2023:
Number of
Options
Weighted
Average
Exercise
Price
Weighted
Average
Contractual
Term
Aggregate
Intrinsic
Value
(in years)(in thousands)
Outstanding at beginning of period57,010 $1.01 1.93$3,161 
Granted at fair value— — 
Exercised(30,000)0.95 
Forfeited— — 
Outstanding at end of period27,010 $1.08 1.05$1,630 
Options exercisable at December 31, 202327,010 $1.08 1.05$1,630 
The Company has computed the aggregate intrinsic value of amounts disclosed in the above table based on the difference between the original exercise price of the options and the estimated fair value of the Company’s common stock as of December 31, 2023.
The intrinsic value of options exercised for the years ended December 31, 2023, 2022 and 2021 was $1.8 million, $2.3 million and $5.7 million, respectively.
The following summarizes information about the Company’s options outstanding as of December 31, 2023:
Options OutstandingOptions Exercisable
Exercise PriceShares
Weighted-
Average
Remaining
Contractual
Term
SharesWeighted-
Average
Remaining
Contractual
Term
(in years)(in years)
$0.70 - $1.08
27,010 1.0527,010 1.05
27,010 27,010 
v3.24.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Contractual Obligations
The Company has non-cancellable minimum guaranteed purchase commitments for data and services. Material contractual commitments as of December 31, 2023 that are not disclosed elsewhere are as follows (in thousands):
Years ending December 31,
2024$6,285 
20254,046 
20261,371 
2027236 
2028— 
Thereafter— 
Total contractual obligations$11,938 

Legal Matters
From time to time in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings. There were no material such matters as of and for the year ended December 31, 2023.
Indemnification
In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with third parties, including vendors, customers, investors and the Company’s directors and officers. Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. There were no material obligations under such indemnification agreements as of and for the year ended December 31, 2023.
v3.24.0.1
Geographic Data
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Geographic Data
As described in the Summary of Significant Accounting Policies, the Company operates as one operating segment.
Long-lived assets by geographical region are based on the location of the legal entity that owns the assets. As of December 31, 2023 and 2022, there were no significant long-lived assets held by entities outside of the United States.
Revenue by geographical region is determined by location of the Company’s customers. Revenue from customers outside of the United States was approximately 28% for each of the years ended December 31, 2023, 2022 and 2021. Revenue by geographical region is as follows (in thousands):
Year Ended December 31,
202320222021
Americas$262,290 $199,516 $148,241 
EMEA54,753 42,419 30,229 
Asia Pacific16,600 11,893 9,389 
Total$333,643 $253,828 $187,859 
v3.24.0.1
Net Loss per Share
 12 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Net Loss per Share
Basic net loss per share is calculated by dividing the net loss by the weighted average number of outstanding shares of common stock each period. Diluted net loss per share is calculated by giving effect to all potential dilutive common stock equivalents, which includes stock options and restricted stock units. Because the Company incurred net losses each period, the basic and diluted calculations are the same. Basic and diluted net loss per share are the same for each class of common stock, as both Class A and Class B stockholders are entitled to the same liquidation and dividend rights.
The following table presents the calculation for basic and diluted net loss per share (in thousands, except share and per share data):
Year Ended December 31,
202320222021
Net loss attributable to common shareholders$(66,427)$(50,240)$(28,702)
Weighted average common shares outstanding55,664,404 54,611,616 53,768,301 
Net loss per share, basic and diluted$(1.19)$(0.92)$(0.53)
The following outstanding shares of common stock equivalents were excluded from the calculation of diluted net loss per share for each period, as the impact of including them would have been anti-dilutive.
As of December 31,
202320222021
Stock options outstanding27,01057,01098,055
RSUs outstanding3,724,7072,692,277 1,999,930
Total potentially dilutive shares3,751,717 2,749,287 2,097,985 
v3.24.0.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements
The Company measures certain financial assets at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows:
•Level 1: Quoted prices in active markets for identical assets or liabilities.
•Level 2: Observable inputs, other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•Level 3: Unobservable inputs that are supported by little or no market activity.
The following tables present information about the Company’s financial assets that are measured at fair value and indicate the fair value hierarchy of the valuation inputs used (in thousands):
December 31, 2023
Level 1Level 2Level 3Total
Marketable Securities:
Commercial paper$— $33,287 $— $33,287 
Corporate bonds— 9,906 — 9,906 
U.S. Treasury securities— 495 — 495 
U.S. agency securities— 4,289 — 4,289 
Asset-backed securities— 367 — 367 
Total assets$— $48,344 $— $48,344 
December 31, 2022
Level 1Level 2Level 3Total
Marketable Securities:
  Commercial paper$— $43,489 $— $43,489 
  Corporate bonds— 33,183 — 33,183 
  U.S. Treasury securities— 14,145 — 14,145 
U.S. agency securities— 12,950 — 12,950 
Asset-backed securities— 2,157 — 2,157 
Total assets$— $105,924 $— $105,924 
Marketable securities are classified within Level 2 because they are valued using inputs other than quoted prices that are directly or indirectly observable in the market.
The carrying amounts of certain financial instruments, including cash held in banks, cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to their short-term maturities and are excluded from the fair value tables above.
As of December 31, 2023 and December 31, 2022, the Company held investment-grade marketable securities which were accounted for as available-for-sale securities. There was not a significant difference between the amortized cost and fair value of these securities. The gross unrealized gains and losses associated with these securities were immaterial in the periods presented
The following table classifies our marketable securities by contractual maturity (in thousands):
December 31, 2023December 31, 2022
Due in one year or less$44,645 $92,929 
Due after one year and within two years3,699 12,995 
Total$48,344 $105,924 
v3.24.0.1
Employee Benefit Plan
 12 Months Ended
Dec. 31, 2023
Postemployment Benefits [Abstract]  
Employee Benefit Plan
The Company sponsors a qualified 401(k) defined contribution plan for the benefit of its employees. The Company made matching contributions to the plan totaling $3.7 million, $2.8 million and $2.2 million for the years ended December 31, 2023, 2022 and 2021, respectively.
v3.24.0.1
Related Party Transactions
 12 Months Ended
Dec. 31, 2023
Related Party Transactions [Abstract]  
Related Party Transactions
During the year ended December 31, 2021, the Company received $1.7 million in cash for the disgorgement of stockholder short-swing profits under Section 16(b) of the Exchange Act. The amount was recorded as an increase to additional paid-in capital on the consolidated balance sheet.
There were no related party transactions for the years ended December 31, 2023 and 2022.
v3.24.0.1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Pay vs Performance Disclosure      
Net loss $ (66,427) $ (50,240) $ (28,702)
v3.24.0.1
Insider Trading Arrangements
 3 Months Ended
Dec. 31, 2023
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.0.1
Nature of Operations and Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.
Basis of Presentation The consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances. Actual results could differ from those estimates. The Company’s estimates and judgments include, but are not limited to, the estimated period of benefit for incremental costs of obtaining a contract with a customer, the incremental borrowing rate for operating leases, calculation of allowance for credit losses, valuation of assets and liabilities acquired as part of business combinations, useful lives of long-lived assets, stock-based compensation, income taxes, commitments and contingencies and litigation, among others.
Segment Information
Segment Information
The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information for purposes of making operating decisions, assessing financial performance and allocating resources. The Company’s CODM evaluates financial information on a consolidated basis. As the Company operates as one operating segment, all required segment financial information is found in the consolidated financial statements.
Fair Value of Financial Instruments
Fair Value of Financial Instruments
The Company has the following financial instruments: cash, cash equivalents, marketable securities, accounts receivable, accounts payable and accrued liabilities. The carrying value of the Company’s cash equivalents, accounts receivable, accounts payable and accrued liabilities approximates fair value due to their short-term nature.
Cash and Cash Equivalents
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are recorded at cost, which approximates fair
value. Interest earned on cash and cash equivalents is recorded as interest income in the consolidated statement of operations.
Restricted Cash
As of December 31, 2023 and 2022, the Company’s restricted cash balance was $3.9 million and nil, respectively. Restricted cash represents cash that is held as collateral in relation to the Company’s letters of credit that are required as security for the Company’s office leases and reserves held by the Company’s credit card processor. Restricted cash is included in Prepaid expenses and other current assets within the consolidated balance sheets.
Marketable Securities
Marketable Securities
Marketable securities consist of corporate bonds, commercial paper, U.S. Treasury securities, asset-backed securities, and agency securities. The Company classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All marketable securities are recorded at their estimated fair values. Unrealized gains and losses for the available-for-sale debt securities that are unrelated to credit loss factors are recorded in accumulated other comprehensive income (loss), or AOCI. As of December 31, 2023 and 2022, the Company’s AOCI balance was insignificant. Unrealized losses determined to be credit-related are recorded as Other (expense) income, net in the consolidated statements of operations and comprehensive loss and as an allowance for credit losses on Marketable securities on the consolidated balance sheet. As of December 31, 2023 and 2022, the gross unrealized gains and losses on available-for-sale debt securities were immaterial and there were no expected credit losses related to the Company's available-for-sale debt securities.
Accounts Receivable
Accounts Receivable and Allowance for Credit Losses
Accounts receivable primarily consist of amounts billed and currently due from customers, net of an allowance for credit losses. Subscription fees billed in advance of the related subscription term represent contract liabilities and are presented as accounts receivable and deferred revenues upon establishment of an unconditional right to payment under non-cancellable contracts. Our typical payment terms provide for customer payment within 30 days of the date of the contract.
Allowance for Doubtful Accounts
Accounts receivable are subject to collection risk. The Company performs evaluations of its customers’ financial positions and generally extends credit on account, without collateral. The Company determines the need for an allowance for credit losses based upon various factors, including past collection experience, credit quality of the customer, age of the receivable balance and current economic conditions.
If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Amounts are charged against the allowance for credit losses once collection efforts are unsuccessful.
Concentration of Credit Risk
Concentration of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk are primarily cash and cash equivalents, accounts receivable and marketable securities. The Company's cash and cash equivalents are generally held with large financial institutions. Although the Company's deposits may exceed federally insured limits, the financial institutions that the Company uses have high investment-grade credit ratings and, as a result, the Company believes that, as of December 31, 2023, its risk relating to deposits exceeding federally insured limits was not significant.
The Company has credit risk regarding trade accounts receivable as the Company generally does not require collateral. Allowances are maintained for potential credit losses. As of December 31, 2023 and 2022, there were no individual customers that accounted for more than 10% of the Company’s total revenue or net accounts receivable.
The Company’s marketable securities consist of investment-grade corporate bonds, commercial paper, U.S. Treasury securities, asset-backed securities, and agency securities. The Company limits the amount of investments in any single issuer and believes that, as of December 31, 2023, its concentration of credit risk related to marketable securities was not significant.
Property and Equipment
Property and Equipment
Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives:
Computer equipment and hardware
3-5 years
Furniture and fixtures
3-7 years
Internal-use software
3 years
Leasehold improvementsLesser of useful life or remaining lease term
Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Upon retirement or sale, the cost of assets disposed and the related accumulated depreciation are written off, and any resulting gain or loss is credited or charged to income.
Goodwill
Goodwill
Goodwill consists of the excess purchase price over the fair value of net assets acquired in purchase business combinations. The Company conducts a test for the impairment of goodwill on at least an annual basis as of October 1st or sooner if indicators of impairment arise. The Company first assesses qualitative factors to determine whether it is more likely than not that goodwill is impaired. As part of the qualitative assessment, the Company evaluates factors including macroeconomic conditions, industry and market considerations, cost factors and overall financial performance of its reporting unit.
The Company has a single reporting unit. If the Company concludes that it is more-likely-than-not that its single reporting unit is impaired or if the Company elects not to perform the optional qualitative assessment, a quantitative assessment is performed. For the quantitative assessment, the fair value of the Company’s reporting unit is compared with the carrying amount of net assets, including goodwill, related to the reporting unit. The Company recognizes an impairment charge for the amount, if any, by which the carrying amount of a reporting unit exceeds the fair value of the reporting unit.
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets
The Company evaluates the recoverability of its long-lived assets, which includes property and equipment and intangible assets, whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Recoverability of an asset is measured by comparison of its carrying amount to the anticipated future undiscounted cash flows that the asset is expected to generate. If that comparison indicates that the carrying amount is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset exceeds its fair value.
Revenue Recognition
Revenue Recognition
The Company generates revenues from subscriptions to the Company’s web-based social media management platform under a software-as-a-service model. Our subscriptions can range from monthly to one-year or multi-year arrangements and are generally non-cancellable. The Company’s customers do not have the right to take possession of the online software solution.
The Company commences revenue recognition when control of these products is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for such products.
The Company determines revenue recognition through the following steps:
•identify the contract with a customer;
•identify the performance obligations in a contract;
•determination of the transaction price;
•allocate the transaction price to the performance obligations identified in the contract; and
•recognize revenue when (or as) performance obligations are satisfied.
Identify the contract with a customer
A customer contract is generally identified when the Company and a customer have executed an agreement or online acceptance that requires the Company to grant access to its online software products and provide professional services in exchange for consideration from the customer.
Identify the performance obligations in a contract
A performance obligation is a promise to provide a distinct service or a series of distinct services. A service that is promised to a customer is distinct if the customer can benefit from the service either on its own or together with other readily available resources, and a company’s promise to transfer the service to the customer is separately identifiable from other promises in the contract.
The Company has determined that subscriptions for its online software products are a distinct performance obligation, because no implementation work is required and the online software product is fully functional once a customer has access.
In addition, the Company sells professional services consisting of, but not limited to, implementation fees, specialized training, one-time reporting services and recurring periodic reporting services. Professional services are distinct, as they are sold separately, and the customer can benefit from the services to make better use of the online product purchased.
Determination of the transaction price
The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company estimates any variable consideration it will be entitled at contract inception and will reassess as circumstances change, when determining the transaction price. The transaction price for subscription and professional services is generally fixed at contract inception; therefore, the Company’s contracts do not contain a significant amount of variable consideration. As a result, the amount of revenue recognized in the periods presented from performance obligations satisfied (or partially satisfied) in previous periods due to changes in the transaction price was not material.
Allocate the transaction price to the performance obligations identified in the contract
If the contract contains a single performance obligation, the Company allocates the entire transaction price to the single performance obligation. For contracts containing multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative standalone selling price (“SSP”) of the services provided to the customer. The Company determines the SSP based upon the prices at which the Company separately sells subscription and various professional services, and based on the Company’s overall pricing objectives, taking into consideration market conditions, value of the Company’s contracts, the types of offerings sold, customer demographics and other factors.
Recognize revenue when (or as) performance obligations are satisfied
Subscription revenues are recognized ratably over the contract terms beginning on the date the Company’s service is made available to customers, which typically begins on the commencement date of each contract as no implementation work is required. The Company’s customers do not have the right to take possession of the online software solution. The Company’s subscription service arrangements are generally non-cancellable and do not provide for refund of subscription fees.
Professional services are typically provided for a fixed fee, and revenues are recognized over time for these contracts as services are provided to the customer. Professional services revenue represents less than 1% of revenue for the periods presented.
Sales Commissions
Sales Commissions
Sales force commissions are considered incremental costs of obtaining a contract with a customer. Sales commissions are paid on initial contracts with new customers and for expansion of contracts with existing customers. Commissions are not paid on customer renewals. Sales commissions are deferred and amortized on a straight-line basis over a period of benefit of three years, as determined by the Company. The Company determined the three-year period by taking into consideration the products sold, expected customer life, expected contract renewals, technology life cycle and other factors. Amortization expense is included as a component of sales and marketing expense.
Cost of Revenues
Cost of Revenues
Cost of revenues primarily consist of expenses related to hosting the Company’s service and providing support to customers, depreciation associated with computers and hardware and amortization expense related to acquired developed technologies that directly benefit sales. These expenses are comprised of hosted data center global costs, fees paid to third-party data providers and personnel-related costs directly associated with cloud infrastructure and customer support, including salaries, benefits, bonuses and allocated overhead. Overhead associated with facilities and information technology is allocated to cost of revenue and operating expenses based on headcount.
Advertising Costs
Advertising Costs
Advertising costs primarily include online advertising on search engines. Advertising costs are expensed as incurred and included as a component of sales and marketing expenses.
Research and Development Costs
Research and Development Costs
Research and development expenses include payroll, employee benefits and other expenses associated with product development.
Internal Use Software, Policy
Capitalized Internal-Use Software Costs
Certain payroll and stock compensation costs incurred to develop functionality for the Company’s platform, as well as certain upgrades and enhancements that are expected to result in enhanced functionality are capitalized during the development stage. Costs incurred in the preliminary stages of development are expensed as incurred. Once software has reached the development stage, direct and incremental costs are capitalized until the software is substantially complete and ready for its intended use. Capitalized internal-use software costs are included within property and equipment, net on the
consolidated balance sheets, and are amortized over the estimated useful life of the software, which is typically three years.
Share-Based Compensation
Stock-Based Compensation
The Company recognizes compensation expense for equity awards based on the grant‐date fair value over the remaining requisite service period for the award. For equity awards with only service conditions, the Company recognizes compensation expense on a straight-line basis over the remaining requisite service period for the award. For equity awards with both service and performance conditions, compensation expense is recognized on a graded vesting basis over the requisite service period once the achievement of the performance condition is considered probable. The grant-date fair value of RSUs that contain a market condition is determined using a Monte Carlo valuation model. The Company recognizes forfeitures as they occur.
Foreign Currency
Foreign Currency
The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. Accordingly, monetary balance sheet accounts are remeasured using exchange rates in effect at the balance sheet dates and non-monetary items are remeasured at historical exchange rates. Expenses are generally remeasured at the average exchange rates for the period. Foreign currency related gains and losses have been immaterial during the periods presented.
Leases
Leases
The Company determines if an arrangement is a lease at inception, and all significant lease arrangements are generally recognized at lease commencement. Operating lease right-of-use, or ROU, assets and operating lease liabilities are recognized at commencement based on the present value of fixed payments not yet paid over the remaining lease term. ROU assets also include any initial indirect costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. For short-term leases of 12 months or less, no ROU asset or lease liability is recorded. The Company records rent expense in its consolidated statement of operations and comprehensive loss on a straight-line basis over the term of the lease and records variable lease payments as incurred. Additionally, the Company has elected to combine lease and non-lease components and account for them as a single component. ROU assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent its obligations to make lease payments arising from the lease. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise the option. The Company uses its incremental borrowing rate in determining the lease liabilities, as its leases generally do not provide an implicit rate. The incremental borrowing rate is an estimate of the collateralized borrowing rate the Company would incur on future lease payments over a similar term based on the information available at the commencement date. The Company does not have any finance leases.
Commitments and Contingencies
Commitments and Contingencies
The Company evaluates all pending or threatened commitments and contingencies, if any, that are reasonably likely to have a material effect on its operations or financial position. The Company assesses the probability of an adverse outcome and records a provision for a liability when management believes that it is probable that a liability has been incurred and the amount can be reasonably estimated.
Income Taxes
Income Taxes
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that these assets are believed to be more likely than not to be realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized. In making such a determination, all available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations.
Tax benefits for uncertain tax positions are based upon management’s evaluation of the information available at the reporting date. To be recognized in the financial statements, a tax benefit must be at least more-likely-than-not of being sustained based on technical merits. The benefit for positions meeting the recognition threshold is measured as the largest benefit more-likely-than-not of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of provision for income taxes. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheets, as applicable.
The Company files income tax returns in the U.S. federal jurisdiction, Illinois and other state jurisdictions. It is difficult to predict the final timing and resolution of any particular uncertain tax position. Based on the Company’s assessment of many factors, including past experience and complex judgments about future events, the Company does not currently anticipate significant changes in its uncertain tax positions over the next 12 months.
Net Loss per Share
Net Loss per Share
The Company calculates basic net loss per share by dividing net loss attributable to common shareholders by the weighted-average number of the Company’s common stock shares outstanding during the respective period. Net loss attributable to common shareholders is net loss minus convertible preferred stock dividends declared, of which there were none during the periods presented.
The Company calculates diluted net loss per share using the treasury stock and if-converted methods, which consider the potential impacts of outstanding stock options and RSUs. Under these methods, the numerator and denominator of the net loss per share calculation are adjusted for these securities if the impact of doing so increases net loss per share. During the periods presented, the impact is to decrease net loss per share and therefore the Company is precluded from adjusting its calculation for these securities. As a result, diluted net loss per share is calculating using the same formula as basic net loss per share.
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted
Recently Adopted Accounting Pronouncements
In October 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update (“ASU”) No. 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). The ASU requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). ASU 2021-08 is effective for the Company’s fiscal year beginning January 1, 2023, and interim periods within that fiscal year, and should be applied on a prospective basis. Early adoption is permitted. The Company adopted the ASU as of January 1, 2023, and the adoption did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures for significant segment expenses. All disclosure requirements of ASU 2023-07 are required for entities with a single reportable segment. The ASU is effective for the Company’s fiscal year beginning January 1, 2025, and interim periods thereafter, and should be applied on a retrospective basis to all periods presented. Early adoption is permitted. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact on its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures. The ASU will be effective for the Company beginning with its annual report for the year ending December 31, 2025 and allows for adoption on a prospective basis, with a retrospective option. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
Business Combinations Policy
Business Combinations
The Company recognizes and measures the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date. Any excess or deficiency of the purchase consideration when compared to the fair value of the net assets acquired, if
any, is recorded as goodwill or gain from a bargain purchase. Such valuations require that management make estimates and assumptions, especially with respect to the identifiable intangible assets. The estimates in valuing intangible assets include, but are not limited to, the time and expense to recreate the assets, future expected cash flows from the asset, useful lives, customer churn rate, and discount rates.
The estimates are inherently uncertain and subject to revision as additional information is obtained during the measurement period for an acquisition, which may last up to one year from the acquisition date. During the measurement period the Company may record adjustments to the fair value of tangible and intangible assets acquired and liabilities assumed, with a corresponding offset to goodwill. After the conclusion of the measurement period or the final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to earnings.
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy
As of December 31, 2023 and 2022, the Company’s restricted cash balance was $3.9 million and nil, respectively. Restricted cash represents cash that is held as collateral in relation to the Company’s letters of credit that are required as security for the Company’s office leases and reserves held by the Company’s credit card processor. Restricted cash is included in Prepaid expenses and other current assets within the consolidated balance sheets.
v3.24.0.1
Nature of Operations and Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Activity related to the allowance for doubtful accounts The activity related to the allowance for credit losses for the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands):
Balance at December 31, 2020$1,428 
Additions614 
Write-offs, net of recoveries(744)
Balance at December 31, 2021$1,298 
Additions1,199 
Write-offs, net of recoveries(708)
Balance at December 31, 20221,789 
Additions2,418 
Write-offs, net of recoveries(2,030)
Balance at December 31, 2023$2,177 
Schedule of property and equipment Depreciation and amortization are computed using the straight-line method over the following estimated useful lives:
Computer equipment and hardware
3-5 years
Furniture and fixtures
3-7 years
Internal-use software
3 years
Leasehold improvementsLesser of useful life or remaining lease term
As of the dates specified below, property and equipment consisted of the following (in thousands):
As of December 31,
20232022
Leasehold improvements$18,336 $18,308 
Furniture and fixtures4,114 4,015 
Computer equipment and hardware4,539 4,528 
Internal-use software2,165 774 
Total property and equipment29,154 27,625 
Less: Accumulated depreciation and amortization(17,747)(15,676)
Total property and equipment, net$11,407 $11,949 
v3.24.0.1
Property and Equipment (Tables)
 12 Months Ended
Dec. 31, 2023
Property, Plant and Equipment [Abstract]  
Schedule of property and equipment Depreciation and amortization are computed using the straight-line method over the following estimated useful lives:
Computer equipment and hardware
3-5 years
Furniture and fixtures
3-7 years
Internal-use software
3 years
Leasehold improvementsLesser of useful life or remaining lease term
As of the dates specified below, property and equipment consisted of the following (in thousands):
As of December 31,
20232022
Leasehold improvements$18,336 $18,308 
Furniture and fixtures4,114 4,015 
Computer equipment and hardware4,539 4,528 
Internal-use software2,165 774 
Total property and equipment29,154 27,625 
Less: Accumulated depreciation and amortization(17,747)(15,676)
Total property and equipment, net$11,407 $11,949 
v3.24.0.1
Business Combinations and Asset Acquisitions (Tables)
 12 Months Ended
Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands):
August 2, 2023
Cash and cash equivalents$4,648 
Accounts receivable2,979 
Other current and noncurrent assets932 
Intangible assets27,800 
Accounts payable, accrued expenses and other liabilities(1,758)
Deferred revenue(3,243)
Net assets acquired, excluding Goodwill31,358 
Goodwill112,494 
Total consideration$143,852 
Cash and cash equivalents acquired(4,648)
Cash paid for acquisition of business, net of cash acquired$139,204 
The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands):
January 19, 2023
Cash and cash equivalents$366 
Intangible assets1,800 
Deferred tax liability(477)
Other net tangible assets and liabilities assumed(4)
Net assets acquired, excluding Goodwill1,685 
Goodwill6,611 
Total consideration$8,296 
Deferred consideration related to holdback(1,498)
Cash and cash equivalents acquired(366)
Cash paid for acquisition of business, net of cash acquired$6,432 
Schedule of Acquired Finite-Lived Intangible Assets by Major Class
Acquired intangible assets are being amortized over the estimated useful lives on a straight-line basis. The following table summarizes the estimated preliminary fair values (in thousands) and estimated useful lives for the identifiable intangible assets acquired as of the acquisition date:
Fair ValueExpected Useful Life
Customer Relationships$12,400 7 years
Acquired Technology14,100 5 years
Trademark1,300 5 years
$27,800 
The following table summarizes the estimated fair values (in thousands) and estimated useful lives for the identifiable intangible assets acquired as of the acquisition date:
Fair ValueExpected Useful Life
Customer Relationships$200 1 year
Acquired Technology1,600 5 years
$1,800 
Schedule of Goodwill
The changes in the carrying amount of goodwill during the year ended December 31, 2023 were as follows (in thousands):
Goodwill balance as of December 31, 2022
$2,299 
Addition - acquisition of Tagger112,494 
Addition - acquisition of Repustate6,611 
Goodwill balance as of December 31, 2023
$121,404 
v3.24.0.1
Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of finite-lived intangible assets
As of the dates specified below, intangible assets, net consisted of the following (in thousands):
As of December 31,
20232022
Customer relationships19,900 7,300 
Acquired Technology15,700 — 
Trademark1,300 — 
36,900 7,300 
Less: Accumulated amortization
Customer relationships(7,259)(5,294)
Acquired Technology(1,468)— 
Trademark(108)— 
(8,835)(5,294)
Intangible assets, net$28,065 $2,006 
The following table sets forth the weighted-average amortization period, in total and by major intangible asset class:
Asset ClassWeighted-Average Amortization Period
(in years)
Customer relationships7
Acquired Technology5
Trademark5
All Intangible Assets6
Finite-lived intangible assets amortization expense The expected future amortization of intangible assets as of December 31, 2023 is summarized as follows (in thousands):
Years Ending December 31,Amortization Expense
20246,153 
20255,171 
20265,171 
20275,171 
20283,595 
Thereafter2,804 
$28,065 
v3.24.0.1
Operating Leases (Tables)
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Summary of operating lease assets and liabilities
The following table provides a summary of operating lease assets and liabilities as of December 31, 2023 (in thousands):
Assets
Operating lease right-of-use assets$8,729 
Liabilities
Operating lease liabilities3,948 
Operating lease liabilities, non-current15,083 
Total operating lease liabilities$19,031 
Schedule of remaining maturities of operating lease liabilities
Remaining maturities of operating lease liabilities as of December 31, 2023 are as follows (in thousands):
Years ending December 31,
2024$4,873 
20254,503 
20264,298 
20274,392 
20281,277 
Thereafter2,326 
Total future minimum lease payments$21,669 
Less: imputed interest(2,638)
Total operating lease liabilities$19,031 
v3.24.0.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Schedule of components of loss before income taxes
The components of loss before income taxes are as follows (in thousands):
Year Ended December 31,
202320222021
Domestic$(64,497)$(49,177)$(27,097)
Foreign(1,281)(697)(1,394)
Loss before income taxes$(65,778)$(49,874)$(28,491)
Schedule of effective income tax rate reconciliation
A reconciliation of the difference between the federal statutory rate and the effective income tax rate as a percentage of income before taxes for the years ended December 31, 2023, 2022, and 2021 is as follows (in thousands):
Year Ended December 31,
202320222021
AmountTax RateAmountTax RateAmountTax Rate
Federal statutory income tax$(13,813)21.00 %$(10,474)21.00 %$(5,983)21.00 %
State income tax, net of federal tax benefit(2,423)3.68 (1,863)3.74 (1,024)3.59 
Foreign tax(75)0.11 43 (0.09)(91)0.32 
Section 162(m) limitation1,693 (2.57)2,371 (4.75)2,591 (9.09)
Other304 (0.46)687 (1.38)516 (1.72)
Valuation allowance net of deferred tax assets18,389 (27.96)12,075 (24.21)16,485 (57.86)
Stock-based compensation2,051 (3.12)(2,412)4.84 (11,865)41.64 
R&D Credit(6,100)9.27 — — — — 
Acquisitions603 (0.92)— — — — 
Return to provision20 (0.03)(61)0.12 (418)1.47 
Effective income tax rate$649 (1.0)%$366 (0.7)%$211 (0.7)%
Schedule of deferred tax assets and liabilities Significant components of the Company’s deferred taxes at December 31, 2023 and 2022 are as follows (in thousands):
As of December 31,
20232022
Deferred tax assets
Net operating loss carryforwards$77,309 $66,912 
Research & Development Costs15,001 5,846 
Operating lease liability4,677 5,363 
Stock-based compensation6,073 4,622 
Research & Development Credits7,368 — 
Other1,892 1,644 
Total deferred tax assets112,320 84,387 
Deferred tax liabilities
Depreciation and amortization(7,727)(1,986)
Deferred commissions and bonus(13,261)(9,849)
Operating lease right-of-use asset(2,145)(2,340)
Other(823)(940)
Total deferred tax liabilities(23,956)(15,115)
Less: Valuation allowance(88,670)(69,272)
Net deferred tax asset (liability)$(306)$— 
Schedule of Unrecognized Tax Benefits Roll Forward The reconciliation of uncertain tax positions at the beginning and end of the years below is as follows (in thousands):
As of December 31,
20232022
Beginning balance— — 
Gross increase (decrease) related to prior year positions— — 
Gross decrease related to settlements— — 
Gross increase related to current year positions2,456 — 
Ending balance2,456 — 
v3.24.0.1
Incentive Stock Plan (Tables)
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Schedule of Stock-Based Compensation Expense Stock-based compensation expense is included in the consolidated statement of operations and comprehensive loss as follows (in thousands):
Years Ended December 31,
202320222021
Cost of revenue$3,224 $2,491 $1,062 
Research and development18,478 11,280 4,039 
Sales and marketing30,116 23,066 10,636 
General and administrative15,886 10,901 5,993 
Total stock-based compensation expense
$67,704 $47,738 $21,730 
Summary of Restricted Stock Units
The table below summarizes the activity regarding unvested restricted stock units for the year ended December 31, 2023:
Restricted
Stock Units
Weighted
Average Grant
Date Fair Value
Unvested at December 31, 20222,692,277 $62.71 
Granted2,613,736 50.75 
Vested(1,177,073)55.77 
Forfeited(404,233)59.27 
Unvested at December 31, 20233,724,707 $56.89 
Schedule of Stock Option Activity
The table below summarizes the stock option activity for the year ended December 31, 2023:
Number of
Options
Weighted
Average
Exercise
Price
Weighted
Average
Contractual
Term
Aggregate
Intrinsic
Value
(in years)(in thousands)
Outstanding at beginning of period57,010 $1.01 1.93$3,161 
Granted at fair value— — 
Exercised(30,000)0.95 
Forfeited— — 
Outstanding at end of period27,010 $1.08 1.05$1,630 
Options exercisable at December 31, 202327,010 $1.08 1.05$1,630 
Schedule of Stock Options by Exercise Price Range The following summarizes information about the Company’s options outstanding as of December 31, 2023:
Options OutstandingOptions Exercisable
Exercise PriceShares
Weighted-
Average
Remaining
Contractual
Term
SharesWeighted-
Average
Remaining
Contractual
Term
(in years)(in years)
$0.70 - $1.08
27,010 1.0527,010 1.05
27,010 27,010 
v3.24.0.1
Commitments and Contingencies (Tables)
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Schedule of contractual commitments Material contractual commitments as of December 31, 2023 that are not disclosed elsewhere are as follows (in thousands):
Years ending December 31,
2024$6,285 
20254,046 
20261,371 
2027236 
2028— 
Thereafter— 
Total contractual obligations$11,938 
v3.24.0.1
Geographic Data (Tables)
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Schedule of revenue by geographical region Revenue by geographical region is as follows (in thousands):
Year Ended December 31,
202320222021
Americas$262,290 $199,516 $148,241 
EMEA54,753 42,419 30,229 
Asia Pacific16,600 11,893 9,389 
Total$333,643 $253,828 $187,859 
v3.24.0.1
Net Loss per Share (Tables)
 12 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Schedule of basic and diluted net loss per share
The following table presents the calculation for basic and diluted net loss per share (in thousands, except share and per share data):
Year Ended December 31,
202320222021
Net loss attributable to common shareholders$(66,427)$(50,240)$(28,702)
Weighted average common shares outstanding55,664,404 54,611,616 53,768,301 
Net loss per share, basic and diluted$(1.19)$(0.92)$(0.53)
Schedule of shares excluded from the calculation of diluted net loss per share
The following outstanding shares of common stock equivalents were excluded from the calculation of diluted net loss per share for each period, as the impact of including them would have been anti-dilutive.
As of December 31,
202320222021
Stock options outstanding27,01057,01098,055
RSUs outstanding3,724,7072,692,277 1,999,930
Total potentially dilutive shares3,751,717 2,749,287 2,097,985 
v3.24.0.1
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Schedule of financial assets measured at fair value
The following tables present information about the Company’s financial assets that are measured at fair value and indicate the fair value hierarchy of the valuation inputs used (in thousands):
December 31, 2023
Level 1Level 2Level 3Total
Marketable Securities:
Commercial paper$— $33,287 $— $33,287 
Corporate bonds— 9,906 — 9,906 
U.S. Treasury securities— 495 — 495 
U.S. agency securities— 4,289 — 4,289 
Asset-backed securities— 367 — 367 
Total assets$— $48,344 $— $48,344 
December 31, 2022
Level 1Level 2Level 3Total
Marketable Securities:
  Commercial paper$— $43,489 $— $43,489 
  Corporate bonds— 33,183 — 33,183 
  U.S. Treasury securities— 14,145 — 14,145 
U.S. agency securities— 12,950 — 12,950 
Asset-backed securities— 2,157 — 2,157 
Total assets$— $105,924 $— $105,924 
Investments Classified by Contractual Maturity Date
The following table classifies our marketable securities by contractual maturity (in thousands):
December 31, 2023December 31, 2022
Due in one year or less$44,645 $92,929 
Due after one year and within two years3,699 12,995 
Total$48,344 $105,924 
v3.24.0.1
Nature of Operations and Summary of Significant Accounting Policies - Initial Public Offering and Over Allotment Offering (Details) - shares
Dec. 31, 2023
Dec. 31, 2022
Class A common stock    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Common Stock, shares authorized (in shares) 1,000,000,000 1,000,000,000
Class B common stock    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Common Stock, shares authorized (in shares) 25,000,000 25,000,000
v3.24.0.1
Nature of Operations and Summary of Significant Accounting Policies - Accounts Receivable and Allowance for Doubtful Accounts (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
segment
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Number of operating segments | segment 1    
Bad debt expense $ 2,418 $ 1,199 $ 614
Allowance for doubtful accounts 2,177 1,789 1,298
Accounts Receivable, Allowance for Credit Loss [Roll Forward]      
Beginning balance 1,789 1,298 1,428
Additions 2,418 1,199 614
Write-offs, net of recoveries (2,030) (708) (744)
Ending balance $ 2,177 $ 1,789 $ 1,298
v3.24.0.1
Nature of Operations and Summary of Significant Accounting Policies - Property and Equipment, Goodwill and Impairment of Long-Lived Assets (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Property, Plant and Equipment [Line Items]    
Goodwill impairment loss $ 0 $ 0
Impairment of long-lived assets $ 0 $ 0
Software and Software Development Costs    
Property, Plant and Equipment [Line Items]    
Useful life 3 years  
Minimum | Computer equipment and hardware    
Property, Plant and Equipment [Line Items]    
Useful life 3 years  
Minimum | Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Useful life 3 years  
Maximum | Computer equipment and hardware    
Property, Plant and Equipment [Line Items]    
Useful life 5 years  
Maximum | Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Useful life 7 years  
v3.24.0.1
Nature of Operations and Summary of Significant Accounting Policies - Sales Commissions, Advertising Costs (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Deferred amortization period (in years) 3 years    
Increase in deferred commissions $ 14,000,000 $ 11,700,000  
Deferred commissions 40,540,000 30,328,000 $ 23,113,000
Amortization of deferred commissions 26,582,000 18,638,000 12,175,000
Deferred sales impairment loss 0 0  
Advertising costs $ 5,100,000 $ 4,400,000 $ 4,500,000
v3.24.0.1
Revenue Recognition (Details) - USD ($)
$ in Thousands
 12 Months Ended
Aug. 02, 2023
Jan. 19, 2023
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Revenue from Contract with Customer [Abstract]          
Increase in deferred revenue     $ 41,918 $ 26,878 $ 25,589
Additional invoices     375,600 280,700  
Revenue     333,643 253,828 $ 187,859
Revenue recognized previously deferred     94,400 $ 68,600  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]          
Contract with Customer, Liability, Increase (Decrease) for Contract Acquired in Business Combination $ 3,200 $ 100      
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01          
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]          
Revenue expected to be recognized     $ 275,000    
Revenue expected to be recognized, percentage     72.00%    
Revenue, remaining performance obligation, period     12 months    
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01          
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]          
Revenue expected to be recognized, percentage     21.00%    
Revenue, remaining performance obligation, period     12 months    
v3.24.0.1
Property and Equipment (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Property, Plant and Equipment [Line Items]      
Total property and equipment $ 29,154 $ 27,625  
Less: Accumulated depreciation and amortization (17,747) (15,676)  
Total property and equipment, net 11,407 11,949  
Depreciation 3,137 2,859 $ 2,991
Leasehold improvements      
Property, Plant and Equipment [Line Items]      
Total property and equipment 18,336 18,308  
Furniture and fixtures      
Property, Plant and Equipment [Line Items]      
Total property and equipment 4,114 4,015  
Computer equipment and hardware      
Property, Plant and Equipment [Line Items]      
Total property and equipment 4,539 4,528  
Software Development      
Property, Plant and Equipment [Line Items]      
Total property and equipment $ 2,165 $ 774  
v3.24.0.1
Business Combinations - Narrative (Details) - USD ($)
$ in Thousands
 11 Months Ended 12 Months Ended
Aug. 02, 2023
Jan. 19, 2023
Dec. 31, 2023
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Business Combination, Separately Recognized Transactions [Line Items]            
Payments for business acquisition, net of cash acquired       $ 145,636 $ 0 $ 0
Tagger Media            
Business Combination, Separately Recognized Transactions [Line Items]            
Business Combination, Consideration Transferred $ 144,000          
Business Combination, Acquisition Related Costs       $ 4,300    
Payments for business acquisition, net of cash acquired 139,204          
Tagger Media | Line of Credit            
Business Combination, Separately Recognized Transactions [Line Items]            
Revolving credit facility $ 75,000          
Repustate Inc.            
Business Combination, Separately Recognized Transactions [Line Items]            
Business Combination, Consideration Transferred   $ 8,300        
Payments for business acquisition, net of cash acquired   6,800 $ 6,432      
Deferred Consideration Related to Holdback   $ 1,500 $ (1,498)      
v3.24.0.1
Business Combinations - Fair Value of Assets and Liabilities Assumed (Details) - USD ($)
$ in Thousands
 11 Months Ended 12 Months Ended
Aug. 02, 2023
Jan. 19, 2023
Dec. 31, 2023
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Schedule Of Identified Assets Acquired And Liabilities Assumed [Line Items]            
Goodwill     $ 121,404 $ 121,404 $ 2,299  
Payments for business acquisition, net of cash acquired       $ 145,636 $ 0 $ 0
Tagger Media            
Schedule Of Identified Assets Acquired And Liabilities Assumed [Line Items]            
Cash and cash equivalents $ 4,648          
Accounts receivable 2,979          
Other current and noncurrent assets 932          
Intangible assets 27,800          
Accounts payable, accrued expenses and other liabilities (1,758)          
Deferred revenue (3,243)          
Net assets acquired, excluding Goodwill 31,358          
Total consideration 143,852          
Cash and cash equivalents acquired (4,648)          
Payments for business acquisition, net of cash acquired $ 139,204          
Repustate Inc.            
Schedule Of Identified Assets Acquired And Liabilities Assumed [Line Items]            
Cash and cash equivalents   $ 366        
Intangible assets   1,800        
Deferred tax liability   (477)        
Other net tangible assets and liabilities assumed   (4)        
Net assets acquired, excluding Goodwill   1,685        
Goodwill   6,611        
Total consideration   8,296        
Deferred Consideration Related to Holdback   1,500 (1,498)      
Cash and cash equivalents acquired   (366)        
Payments for business acquisition, net of cash acquired   $ 6,800 $ 6,432      
v3.24.0.1
Business Combinations - Intangible Assets Acquired (Details) - USD ($)
$ in Thousands
Aug. 02, 2023
Jan. 19, 2023
Tagger Media    
Business Acquisition [Line Items]    
Fair Value $ 27,800  
Tagger Media | Customer relationships    
Business Acquisition [Line Items]    
Fair Value $ 12,400  
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life 7 years  
Tagger Media | Acquired Technology    
Business Acquisition [Line Items]    
Fair Value $ 14,100  
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life 5 years  
Tagger Media | Trademark    
Business Acquisition [Line Items]    
Fair Value $ 1,300  
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life 5 years  
Repustate Inc.    
Business Acquisition [Line Items]    
Fair Value   $ 1,800
Repustate Inc. | Customer relationships    
Business Acquisition [Line Items]    
Fair Value   $ 200
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life   1 year
Repustate Inc. | Trademark    
Business Acquisition [Line Items]    
Fair Value   $ 1,600
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life   5 years
v3.24.0.1
Business Combinations - Changes in Goodwill (Details) - USD ($)
$ in Thousands
Aug. 02, 2023
Jan. 19, 2023
Tagger Media    
Acquired Indefinite-Lived Intangible Assets [Line Items]    
Addition - acquisition $ 112,494  
Repustate Inc.    
Acquired Indefinite-Lived Intangible Assets [Line Items]    
Addition - acquisition   $ 6,611
Goodwill balance as of September 30, 2023   $ 6,611
v3.24.0.1
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]    
Intangible assets, gross $ 36,900 $ 7,300
Less: Accumulated amortization (8,835) (5,294)
Intangible assets, net 28,065 2,006
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets, gross 19,900 7,300
Less: Accumulated amortization (7,259) (5,294)
Acquired Technology    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets, gross 15,700 0
Less: Accumulated amortization (1,468) 0
Trademark    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets, gross 1,300 0
Less: Accumulated amortization $ (108) $ 0
v3.24.0.1
Intangible Assets - Amortization Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]      
Amortization of intangible assets $ 3,541 $ 1,039 $ 1,043
2024 6,153    
2025 5,171    
2026 5,171    
2027 5,171    
2028 3,595    
Thereafter 2,804    
Intangible assets, net $ 28,065 $ 2,006  
v3.24.0.1
Intangible Assets - Amortization Periods (Details) - Weighted average
 12 Months Ended
Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]  
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life 6 years
Customer relationships  
Finite-Lived Intangible Assets [Line Items]  
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life 7 years
Acquired Technology  
Finite-Lived Intangible Assets [Line Items]  
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life 5 years
Trademark  
Finite-Lived Intangible Assets [Line Items]  
Acquired Finite-Lived Intangible Assets, Weighted Average Useful Life 5 years
v3.24.0.1
Operating Leases - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Lessee, Lease, Description [Line Items]      
Operating lease expense $ 2,700 $ 2,300 $ 2,000
Variable lease expense 3,600 3,500 3,300
Payments related to operating leases 8,200 7,700 6,700
Sublease income $ 0 $ 0 $ 0
Weighted-average remaining lease term (in years) 4 years 10 months 24 days    
Weighted-average discount rate 5.50%    
Minimum      
Lessee, Lease, Description [Line Items]      
Monthly rental payments $ 14    
Maximum      
Lessee, Lease, Description [Line Items]      
Monthly rental payments $ 280    
v3.24.0.1
Operating Leases - Summary of operating lease assets and liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Leases [Abstract]    
Operating lease, right-of-use asset $ 8,729 $ 9,503
Operating lease liability 3,948 3,499
Operating lease liability, net of current portion 15,083 $ 18,287
Total operating lease liabilities $ 19,031  
v3.24.0.1
Operating Leases - Remaining maturities of operating lease liabilities (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Leases [Abstract]  
2024 $ 4,873
2025 4,503
2026 4,298
2027 4,392
2028 1,277
Thereafter 2,326
Total future minimum lease payments 21,669
Less: imputed interest (2,638)
Operating lease liability $ 19,031
v3.24.0.1
Income Taxes - Components of Provision (Benefit) for Income Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]      
Domestic $ (64,497) $ (49,177) $ (27,097)
Foreign (1,281) (697) (1,394)
Loss before income taxes (65,778) (49,874) (28,491)
Increase in valuation allowance $ 19,400 $ 12,100 $ 16,500
v3.24.0.1
Income Taxes - Effective Income Tax Reconciliation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Amount      
Federal statutory income tax $ (13,813) $ (10,474) $ (5,983)
State income tax, net of federal tax benefit (2,423) (1,863) (1,024)
Foreign tax (75) 43 (91)
Section 162(m) limitation 1,693 2,371 2,591
Other 304 687 516
Valuation allowance net of deferred tax assets 18,389 12,075 16,485
Stock-based compensation 2,051 (2,412) (11,865)
R&D Credit (6,100) 0 0
Acquisitions 603 0 0
Return to provision 20 (61) (418)
Effective income tax rate $ 649 $ 366 $ 211
Tax Rate      
Federal statutory income tax 21.00% 21.00% 21.00%
State income tax, net of federal tax benefit 3.68% 3.74% 3.59%
Foreign tax 0.11% (0.09%) 0.32%
Section 162(m) limitation (2.57%) (4.75%) (9.09%)
Other (0.46%) (1.38%) (1.72%)
Valuation allowance net of deferred tax assets (27.96%) (24.21%) (57.86%)
Stock-based compensation (3.12%) 4.84% 41.64%
R&D Credit 9.27% 0.00% 0.00%
Acquisitions (0.92%) 0.00% 0.00%
Return to provision (0.03%) 0.12% 1.47%
Effective income tax rate (1.00%) (0.70%) (0.70%)
v3.24.0.1
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Deferred tax assets    
Net operating loss carryforwards $ 77,309 $ 66,912
Research & Development Costs 15,001 5,846
Operating lease liability 4,677 5,363
Stock-based compensation 6,073 4,622
Research & Development Credits 7,368 0
Other 1,892 1,644
Total deferred tax assets 112,320 84,387
Deferred tax liabilities    
Depreciation and amortization (7,727) (1,986)
Deferred commissions and bonus (13,261) (9,849)
Operating lease right-of-use asset (2,145) (2,340)
Other (823) (940)
Total deferred tax liabilities (23,956) (15,115)
Less: Valuation allowance (88,670) (69,272)
Net deferred tax asset (liability) $ (306) $ 0
v3.24.0.1
Income Taxes - Reconciliation of Uncertain Tax Positions (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Text Block [Abstract]    
Beginning balance $ 0 $ 0
Gross increase (decrease) related to prior year positions 0 0
Gross decrease related to settlements 0 0
Gross increase related to current year positions 2,456 0
Ending balance $ 2,456 $ 0
v3.24.0.1
Income Taxes - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Operating Loss Carryforwards [Line Items]      
Increase in valuation allowance $ 19,400 $ 12,100 $ 16,500
Research & Development Costs 15,001 5,846  
Tax Credit Carryforward, Amount 15,000    
Unrecognized Tax Benefits 2,456 $ 0 $ 0
Federal tax authority      
Operating Loss Carryforwards [Line Items]      
Operating loss carryforwards 64,800    
State and local jurisdiction      
Operating Loss Carryforwards [Line Items]      
Operating loss carryforwards $ 12,500    
v3.24.0.1
Revolving Line of Credit (Details)
$ in Thousands
Aug. 01, 2023
USD ($)
Dec. 31, 2023
USD ($)
letter_of_credit
Dec. 31, 2022
USD ($)
Debt Instrument [Line Items]      
Outstanding balance   $ 55,000 $ 0
Number of standby letters of credit | letter_of_credit   2  
Letters of Credit Outstanding, Amount   $ 2,700  
Revolving Credit Facility | Line of Credit      
Debt Instrument [Line Items]      
Maximum borrowing capacity $ 100,000    
Revolving Credit Facility | Line of Credit | SOFR      
Debt Instrument [Line Items]      
Additional basis spread 0.10%    
Variable rate floor 1.00%    
Weighted average interest rate   8.23%  
Revolving Credit Facility | Line of Credit | SOFR | Minimum      
Debt Instrument [Line Items]      
Basis spread on variable rate 2.75%    
Unused capacity commitment fee percentage 0.30%    
Revolving Credit Facility | Line of Credit | SOFR | Maximum      
Debt Instrument [Line Items]      
Basis spread on variable rate 3.25%    
Unused capacity commitment fee percentage 0.35%    
Revolving Credit Facility | Line of Credit | ABR      
Debt Instrument [Line Items]      
Variable rate floor 2.00%    
Revolving Credit Facility | Line of Credit | ABR | Minimum      
Debt Instrument [Line Items]      
Basis spread on variable rate 1.75%    
Revolving Credit Facility | Line of Credit | ABR | Maximum      
Debt Instrument [Line Items]      
Basis spread on variable rate 2.25%    
v3.24.0.1
Stockholders Equity - Narrative (Details)
 12 Months Ended
Dec. 31, 2023
vote
$ / shares
shares
Dec. 31, 2022
$ / shares
shares
Class of Stock [Line Items]    
Maximum combined voting power, percent 10.00%  
Period from closing of initial public offering (in years) 7 years  
Class A common stock    
Class of Stock [Line Items]    
Common Stock, shares authorized (in shares) 1,000,000,000 1,000,000,000
Common stock, par value (in dollars per share) | $ / shares $ 0.0001 $ 0.0001
Number of votes | vote 1  
Common stock, shares outstanding (in shares) 49,241,563 47,562,911
Class B common stock    
Class of Stock [Line Items]    
Common Stock, shares authorized (in shares) 25,000,000 25,000,000
Common stock, par value (in dollars per share) | $ / shares $ 0.0001 $ 0.0001
Number of votes | vote 10  
Conversion feature (in shares) 1  
Common stock, shares outstanding (in shares) 6,994,196 7,460,432
v3.24.0.1
Incentive Stock Plan - Narrative (Details) - USD ($)
 12 Months Ended
Apr. 27, 2016
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Dec. 12, 2019
Oct. 17, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Total stock-based compensation expense   $ 67,704,000 $ 47,738,000 $ 21,730,000    
Intrinsic value of options exercised   $ 1,800,000 2,300,000 $ 5,700,000    
2016 Stock Plan            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Number of shares authorized (in shares) 5,467,862          
2019 Incentive Award Plan            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Number of shares authorized (in shares)           5,293,497
Class B Incentive Award Plan | Class B common stock            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Number of shares authorized (in shares)         550,000  
Stock Options            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Maximum exercise period (in years)   10 years        
Dividend yield   0.00%        
Total stock-based compensation expense   $ 0 $ 0      
Stock Options | 2016 Stock Plan            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Minimum fair market value of option, percent 110.00%          
Option ownership percentage 10.00%          
Restricted Stock Units            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Weighted average grant date fair value (in dollars per share)   $ 50.75 $ 64.17 $ 85.69    
Unrecognized stock-based compensation expense   $ 182,900,000        
Recognition period (in years)   3 years        
Grants in period (in shares)   2,613,736        
v3.24.0.1
Incentive Stock Plan - Stock-based Compensation Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation expense $ 67,704 $ 47,738 $ 21,730
Cost of revenue      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation expense 3,224 2,491 1,062
Research and development      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation expense 18,478 11,280 4,039
Sales and marketing      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation expense 30,116 23,066 10,636
General and administrative      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation expense $ 15,886 $ 10,901 $ 5,993
v3.24.0.1
Incentive Stock Plan - Restricted Stock Units (Details) - Restricted Stock Units - $ / shares
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]      
Unvested at beginning of period (in shares) 2,692,277    
Granted 2,613,736    
Vested (1,177,073)    
Forfeited (404,233)    
Unvested at end of period (in shares) 3,724,707 2,692,277  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]      
Unvested at beginning of period (in dollars per share) $ 62.71    
Granted 50.75 $ 64.17 $ 85.69
Vested 55.77    
Forfeited 59.27    
Unvested at end of period (in dollars per share) $ 56.89 $ 62.71  
v3.24.0.1
Incentive Stock Plan - Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Number of Options    
Outstanding at beginning of period (in shares) 57,010  
Granted at fair value (in shares) 0  
Exercised (in shares) (30,000)  
Forfeited (in shares) 0  
Outstanding at end of period (in shares) 27,010 57,010
Exercisable at end of the period (in shares) 27,010  
Weighted Average Exercise Price    
Outstanding at beginning of period (in dollars per share) $ 1.01  
Granted at fair value (in dollars per share) 0  
Exercised (in dollars per share) 0.95  
Forfeited (in dollars per share) 0  
Outstanding at end of period (in dollars per share) 1.08 $ 1.01
Exercisable at the end of the period (in dollars per share) $ 1.08  
Outstanding, weighted-average contractual term (years) 1 year 18 days 1 year 11 months 4 days
Exercisable, weighted-average contractual term (years) 1 year 18 days  
Outstanding, aggregate intrinsic value $ 1,630 $ 3,161
Exercisable, aggregate intrinsic value $ 1,630  
v3.24.0.1
Incentive Stock Plan - Stock Options Outstanding and Exercisable (Details)
 12 Months Ended
Dec. 31, 2023
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Options outstanding, shares (in shares) 27,010
Options exercisable, shares (in shares) 27,010
$0.70 - $1.08  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Exercise price range, lower range limit (in dollars per share) | $ / shares $ 0.70
Exercise price range, upper range limit (in dollars per share) | $ / shares $ 1.08
Options outstanding, shares (in shares) 27,010
Options outstanding, weighted average remaining contractual term 1 year 18 days
Options exercisable, shares (in shares) 27,010
Options exercisable, weighted average remaining contractual term 1 year 18 days
v3.24.0.1
Commitments and Contingencies (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2024 $ 6,285
2025 4,046
2026 1,371
2027 236
2028 0
Thereafter 0
Total contractual obligations $ 11,938
v3.24.0.1
Geographic Data (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
segment
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Segment Reporting [Abstract]      
Number of operating segments | segment 1    
Disaggregation of Revenue [Line Items]      
Total revenue $ 333,643 $ 253,828 $ 187,859
Americas      
Disaggregation of Revenue [Line Items]      
Total revenue 262,290 199,516 148,241
EMEA      
Disaggregation of Revenue [Line Items]      
Total revenue 54,753 42,419 30,229
Asia Pacific      
Disaggregation of Revenue [Line Items]      
Total revenue $ 16,600 $ 11,893 $ 9,389
Geographic concentration risk | Revenue from contract with customer benchmark | Outside of the United States      
Disaggregation of Revenue [Line Items]      
Concentration risk percentage 28.00%    
v3.24.0.1
Net Loss per Share - Basic and diluted net loss per share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Earnings Per Share [Abstract]      
Net loss attributable to common shareholders $ (66,427) $ (50,240) $ (28,702)
Weighted Average Number of Shares Outstanding, Diluted 55,664,404 54,611,616 53,768,301
Net loss per share attributable to common shareholders, basic and diluted $ (1.19) $ (0.92) $ (0.53)
v3.24.0.1
Net Loss per Share - Shares excluded from the calculation of diluted net loss per share (Details) - shares
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total potentially dilutive shares (in shares) 3,751,717 2,749,287 2,097,985
Stock options outstanding      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total potentially dilutive shares (in shares) 27,010 57,010 98,055
RSUs outstanding      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total potentially dilutive shares (in shares) 3,724,707 2,692,277 1,999,930
v3.24.0.1
Fair Value Measurements (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities $ 44,645 $ 92,929
Marketable securities, noncurrent 3,699 12,995
Total assets 48,344 105,924
Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets 0 0
Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets 48,344 105,924
Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets 0 0
Corporate Bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 9,906 33,183
Corporate Bonds | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 0 0
Corporate Bonds | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 9,906 33,183
Corporate Bonds | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 0 0
Commercial Paper    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 33,287 43,489
Commercial Paper | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 0 0
Commercial Paper | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 33,287 43,489
Commercial Paper | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 0 0
U.S. Treasury securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 495 14,145
U.S. Treasury securities | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 0 0
U.S. Treasury securities | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 495 14,145
U.S. Treasury securities | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 0 0
Asset-backed Securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 367 2,157
Asset-backed Securities | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 0 0
Asset-backed Securities | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 367 2,157
Asset-backed Securities | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 0 0
US Government Agencies Debt Securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 4,289 12,950
US Government Agencies Debt Securities | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 0 0
US Government Agencies Debt Securities | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities 4,289 12,950
US Government Agencies Debt Securities | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities $ 0 $ 0
v3.24.0.1
Employee Benefit Plan (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Postemployment Benefits [Abstract]      
Matching contributions $ 3.7 $ 2.8 $ 2.2
v3.24.0.1
Related Party Transactions (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Related Party Transaction [Line Items]      
Proceeds from disgorgement of stockholders short-swing profits $ 0 $ 0 $ 1,664
Amount of transaction with related party $ 0 $ 0