DIGITALOCEAN HOLDINGS, INC., 10-K filed on 2/21/2024
Annual Report
v3.24.0.1
Cover Page - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Feb. 08, 2024
Jun. 30, 2023
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2023    
Current Fiscal Year End Date --12-31    
Document Transition Report false    
Entity File Number 001-40252    
Entity Registrant Name DigitalOcean Holdings, Inc.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 45-5207470    
Entity Address, Address Line One 101 6th Avenue    
Entity Address, City or Town New York    
Entity Address, State or Province NY    
Entity Address, Postal Zip Code 10013    
City Area Code 646    
Local Phone Number 827-4366    
Title of 12(b) Security Common stock, par value $0.000025 per share    
Trading Symbol DOCN    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer Yes    
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    
ICFR Auditor Attestation Flag true    
Document Financial Statement Error Correction true    
Document Financial Statement Restatement Recovery Analysis false    
Entity Shell Company false    
Entity Public Float     $ 2,500
Entity Common Stock, Shares Outstanding (in shares)   90,796,695  
Documents Incorporated by Reference
Portions of the registrant’s Proxy Statement for its 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2023.
    
Entity Central Index Key 0001582961    
Amendment Flag false    
Document Fiscal Year Focus 2023    
Document Fiscal Period Focus FY    
v3.24.0.1
Audit Information
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Audit Information [Abstract]    
Auditor Firm ID 238 42
Auditor Name PricewaterhouseCoopers LLP Ernst & Young LLP
Auditor Location Denver, Colorado New York, New York
v3.24.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Current assets:    
Cash and cash equivalents $ 317,236 $ 140,772
Marketable securities 94,532 723,462
Accounts receivable, less allowance for credit losses of $5,848 and $6,099, respectively 62,186 53,833
Prepaid expenses and other current assets 29,040 27,924
Total current assets 502,994 945,991
Noncurrent assets:    
Property and equipment, net 305,444 273,170
Restricted cash 1,747 1,935
Goodwill 348,322 315,168
Intangible assets, net 140,151 118,928
Operating lease right-of-use assets, net 155,201 153,701
Deferred tax assets 1,994 751
Other assets 5,114 5,987
Total assets 1,460,967 1,815,631
Current liabilities:    
Accounts payable 3,957 21,138
Accrued other expenses 31,046 33,987
Deferred revenue 5,340 5,550
Operating lease liabilities, current 81,320 57,432
Other current liabilities 70,982 47,409
Total current liabilities 192,645 165,516
Noncurrent liabilities:    
Deferred tax liabilities 3,533 20,757
Long-term debt 1,477,798 1,470,270
Operating lease liabilities, non-current 91,161 107,693
Other long-term liabilities 9,528 3,826
Total liabilities 1,774,665 1,768,062
Commitments and Contingencies (Note 9)
Preferred stock ($0.000025 par value per share; 10,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2023 and 2022) 0 0
Common stock ($0.000025 par value per share; 750,000,000 shares authorized; 90,243,442 and 96,732,507 issued and outstanding as of December 31, 2023 and 2022, respectively) 2 2
Additional paid-in capital 30,989 263,957
Accumulated other comprehensive loss (452) (2,048)
Accumulated deficit (344,237) (214,342)
Total stockholders’ (deficit) equity (313,698) 47,569
Total liabilities and stockholders’ (deficit) equity $ 1,460,967 $ 1,815,631
v3.24.0.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Accounts receivable, allowance for credit losses $ 5,848 $ 6,099
Preferred stock, par value (in dollars per share) $ 0.000025 $ 0.000025
Preferred stock, shares authorized (in shares) 10,000,000 10,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, par value (in dollars per share) $ 0.000025 $ 0.000025
Common stock, shares authorized (in shares) 750,000,000 750,000,000
Common stock, shares issued (in shares) 90,243,442 96,732,507
Common stock, shares outstanding (in shares) 90,243,442 96,732,507
v3.24.0.1
Consolidated Statements of Operations - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Income Statement [Abstract]      
Revenue $ 692,884 $ 576,322 $ 428,561
Cost of revenue 283,967 211,927 170,595
Gross profit 408,917 364,395 257,966
Operating expenses:      
Research and development 140,365 143,885 115,684
Sales and marketing 73,027 81,022 50,878
General and administrative 162,742 165,185 102,590
Restructuring and other charges 20,887 0 0
Total operating expenses 397,021 390,092 269,152
Income (loss) from operations 11,896 (25,697) (11,186)
Other income (expense):      
Interest expense (8,945) (8,396) (3,744)
Loss on extinguishment of debt 0 (407) (3,435)
Interest income and other income, net 23,825 10,615 164
Other income (expense), net 14,880 1,812 (7,015)
Income (loss) before income taxes 26,776 (23,885) (18,201)
Income tax expense (7,367) (3,919) (1,302)
Net income (loss) attributable to common stockholders $ 19,409 $ (27,804) $ (19,503)
Net income (loss) per share attributable to common stockholders      
Basic (in dollars per share) $ 0.22 $ (0.28) $ (0.21)
Diluted (in dollars per share) $ 0.20 $ (0.28) $ (0.21)
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders      
Basic (in shares) 90,141,000 100,806,000 93,224,000
Diluted (in shares) 96,415,000 100,806,000 93,224,000
v3.24.0.1
Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Statement of Other Comprehensive Income [Abstract]      
Net income (loss) attributable to common stockholders $ 19,409 $ (27,804) $ (19,503)
Other comprehensive income (loss):      
Foreign currency translation adjustments, net of taxes 345 (411) (129)
Unrealized gain (loss) on marketable securities, net of taxes 1,251 (1,263) 0
Other comprehensive income (loss) 1,596 (1,674) (129)
Comprehensive income (loss) $ 21,005 $ (29,478) $ (19,632)
v3.24.0.1
Consolidated Statements of Stockholders' (Deficit) Equity - USD ($)
$ in Thousands
Total
IPO
Common Stock
Common Stock
IPO
Treasury Stock
Additional Paid-In Capital
Additional Paid-In Capital
IPO
Accumulated Other Comprehen-sive Loss
Accumulated Deficit
Beginning Balance (in shares) at Dec. 31, 2020 45,472,229                
Beginning Balance at Dec. 31, 2020 $ 173,074                
Convertible Preferred Stock                  
Conversion of convertible preferred stock to common stock in connection with initial public offering (in shares) (45,472,229)   45,472,229            
Conversion of convertible preferred stock to common stock in connection with initial public offering $ (173,074)                
Ending Balance (in shares) at Dec. 31, 2021 0                
Ending Balance at Dec. 31, 2021 $ 0                
Beginning Balance (in shares) at Dec. 31, 2020     45,299,339            
Beginning Balance at Dec. 31, 2020 (72,094)   $ 1   $ (4,598) $ 99,783   $ (245) $ (167,035)
Beginning Balance (in shares) at Dec. 31, 2020         (1,968,228)        
Increase (Decrease) in Stockholders' Equity [Roll Forward]                  
Issuance of common stock in connection with initial public offering, net of underwriting discounts and issuance costs (in shares)       16,500,000          
Issuance of common stock in connection with initial public offering, net of underwriting discounts and issuance costs   $ 722,981   $ 1     $ 722,980    
Issuance of common stock under equity incentive plan, net of taxes withheld (in shares)     3,793,386            
Issuance of common stock under equity incentive plan, net of taxes withheld 15,502         15,502      
Issuance of common stock under employee stock purchase plan, net of taxes withheld (in shares)     117,996            
Issuance of common stock under employee stock purchase plan, net of taxes withheld 4,401         4,401      
Issuance of common stock for acquisition (in shares)     636,994            
Issuance of common stock for acquisition 27,566         27,566      
Exercise of common stock warrants (in shares)     296,848            
Conversion of redeemable preferred stock warrants to common stock warrants 13,906         13,906      
Conversion of convertible preferred stock to common stock in connection with initial public offering (in shares)       45,472,229          
Conversion of convertible preferred stock to common stock in connection with initial public offering   $ 173,074         $ 173,074    
Repurchase and retirement of common stock (in shares)     (2,940,929)            
Repurchase and retirement of common stock (350,000)         (350,000)      
Stock-based compensation 62,493         62,493      
Other comprehensive income (loss) (129)             (129)  
Net income (loss) attributable to common stockholders (19,503)               (19,503)
Ending Balance (in shares) at Dec. 31, 2021     109,175,863            
Ending Balance at Dec. 31, 2021 $ 578,197   $ 2   $ (4,598) 769,705   (374) (186,538)
Ending Balance (in shares) at Dec. 31, 2021         (1,968,228)        
Ending Balance (in shares) at Dec. 31, 2022 0                
Ending Balance at Dec. 31, 2022 $ 0                
Increase (Decrease) in Stockholders' Equity [Roll Forward]                  
Issuance of common stock under employee stock purchase plan, net of taxes withheld (in shares)     256,718            
Issuance of common stock under employee stock purchase plan, net of taxes withheld 7,925         7,925      
Issuance of common stock under equity incentive plan, net of taxes withheld (in shares)     2,894,748            
Issuance of common stock under equity incentive plan, net of taxes withheld (16,626)         (16,626)      
Repurchase and retirement of common stock (in shares)     (13,626,594)            
Repurchase and retirement of common stock (600,000)         (600,000)      
Retirement of treasury stock (in shares)     1,968,228   1,968,228        
Retirement of treasury stock 0       $ 4,598 (4,598)      
Stock-based compensation 107,551         107,551      
Other comprehensive income (loss) (1,674)             (1,674)  
Net income (loss) attributable to common stockholders $ (27,804)               (27,804)
Ending Balance (in shares) at Dec. 31, 2022 96,732,507   96,732,507            
Ending Balance at Dec. 31, 2022 $ 47,569   $ 2   $ 0 263,957   (2,048) (214,342)
Ending Balance (in shares) at Dec. 31, 2022         0        
Ending Balance (in shares) at Dec. 31, 2023 0                
Ending Balance at Dec. 31, 2023 $ 0                
Increase (Decrease) in Stockholders' Equity [Roll Forward]                  
Issuance of common stock under employee stock purchase plan, net of taxes withheld (in shares)     212,980            
Issuance of common stock under employee stock purchase plan, net of taxes withheld $ 4,977         4,977      
Issuance of common stock under equity incentive plan, net of taxes withheld (in shares) 6,391,424   7,785,464            
Issuance of common stock under equity incentive plan, net of taxes withheld $ 16,307         16,307      
Repurchase and retirement of common stock (in shares)     (14,487,509)            
Repurchase and retirement of common stock (488,455)         (341,312)     (147,143)
Excise taxes related to repurchase of common stock (4,884)         (2,723)     (2,161)
Stock-based compensation 89,783         89,783      
Other comprehensive income (loss) 1,596             1,596  
Net income (loss) attributable to common stockholders $ 19,409               19,409
Ending Balance (in shares) at Dec. 31, 2023 90,243,442   90,243,442            
Ending Balance at Dec. 31, 2023 $ (313,698)   $ 2   $ 0 $ 30,989   $ (452) $ (344,237)
Ending Balance (in shares) at Dec. 31, 2023         0        
v3.24.0.1
Consolidated Statements of Cash Flows - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Operating activities      
Net income (loss) attributable to common stockholders $ 19,409,000 $ (27,804,000) $ (19,503,000)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:      
Depreciation and amortization 117,866,000 102,232,000 88,372,000
Stock-based compensation 88,347,000 105,829,000 61,577,000
Provision for expected credit losses 15,357,000 16,551,000 9,207,000
Operating lease right-of-use assets and liabilities, net 5,709,000 11,417,000 0
Loss on extinguishment of debt 0 407,000 3,435,000
Net accretion of discounts and amortization of premiums on investments 1,866,000 (6,135,000) 0
Non-cash interest expense 7,949,000 7,880,000 1,357,000
Loss on impairment of long-lived assets 1,140,000 1,635,000 285,000
Revaluation of warrants 0 0 (556,000)
Deferred income taxes (67,000) (1,835,000) 17,000
Release of VAT reserve (819,000) 0 (3,188,000)
Other 627,000 166,000 (36,000)
Changes in operating assets and liabilities:      
Accounts receivable (22,668,000) (26,645,000) (20,684,000)
Prepaid expenses and other current assets (9,593,000) (1,424,000) 1,130,000
Accounts payable and accrued expenses (11,077,000) 5,500,000 9,439,000
Deferred revenue (315,000) (290,000) (51,000)
Other assets and liabilities 21,211,000 7,668,000 2,308,000
Net cash provided by operating activities 234,942,000 195,152,000 133,109,000
Investing activities      
Capital expenditures - property and equipment (119,299,000) (106,389,000) (97,072,000)
Capital expenditures - internal-use software development (5,514,000) (8,913,000) (6,391,000)
Purchase of intangible assets 0 (4,915,000) (5,636,000)
Cash paid for acquisition of businesses, net of cash acquired (99,023,000) (305,170,000) (5,000,000)
Cash paid for asset acquisitions (2,500,000) (5,400,000) 0
Purchase of marketable securities (352,313,000) (1,695,165,000) 0
Sales of marketable securities 0 19,992,000 0
Maturities of marketable securities 979,565,000 956,847,000 0
Purchased interest on marketable securities (151,000) (1,575,000) 0
Proceeds from interest on marketable securities 151,000 1,549,000 0
Proceeds from sale of equipment 236,000 981,000 494,000
Net cash provided by (used in) investing activities 401,152,000 (1,148,158,000) (113,605,000)
Financing activities      
Proceeds from issuance of convertible notes, net of issuance costs 0 0 1,462,195,000
Repayment of notes payable 0 0 (33,214,000)
Repayment of term loan 0 0 (166,813,000)
Repayment of borrowings under revolving credit facility 0 0 (63,200,000)
Payment of debt issuance costs 0 (1,520,000) 0
Proceeds related to the issuance of common stock under equity incentive plan 38,410,000 11,509,000 18,369,000
Proceeds from the issuance of common stock under employee stock purchase plan 4,977,000 7,926,000 4,970,000
Principal repayments of finance leases (2,260,000) 0 0
Employee payroll taxes paid related to net settlement of equity awards (21,575,000) (28,278,000) (3,187,000)
Proceeds from initial public offering, net of underwriting discounts and commissions and other offering costs 0 0 724,384,000
Repurchase and retirement of common stock (488,455,000) (600,000,000) (350,000,000)
Repayment of seller’s note 0 0 125,000
Net cash (used in) provided by financing activities (468,903,000) (610,363,000) 1,593,379,000
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (15,000) (249,000) 5,000
Increase (decrease) in cash, cash equivalents and restricted cash 167,176,000 (1,563,618,000) 1,612,888,000
Cash, cash equivalents and restricted cash - beginning of period 151,807,000 1,715,425,000 102,537,000
Cash, cash equivalents and restricted cash - end of period 318,983,000 151,807,000 1,715,425,000
Supplemental disclosures of cash flow information:      
Cash paid for interest 916,000 475,000 2,344,000
Cash paid for taxes, net of refunds 2,723,000 4,567,000 921,000
Operating cash flows paid for operating leases 74,248,000 49,870,000 0
Non-cash investing and financing activities:      
Capitalized stock-based compensation 1,440,000 1,722,000 916,000
Property and equipment received but not yet paid, included in Accounts payable and Accrued other expenses 4,826,000 15,689,000 12,968,000
Issuance of common stock for acquisition 0 0 27,566,000
Debt issuance costs included in accounts payable and accrued liabilities 0 0 400,000
Operating right-of-use assets obtained in exchange for operating lease liabilities 73,440,000 204,105,000 0
Finance right-of-use assets obtained in exchange for finance lease liabilities $ 11,938,000 $ 0 $ 0
v3.24.0.1
Nature of the Business and Organization
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of the Business and Organization Nature of the Business and Organization
DigitalOcean Holdings, Inc. and its subsidiaries (collectively, the “Company”, “we”, “our”, “us”) is a leading cloud computing platform offering on-demand infrastructure, platform and software tools for startups and growing digital businesses. The Company was founded with the guiding principle that the transformative benefits of the cloud should be easy to leverage, broadly accessible, reliable and affordable. The Company’s platform simplifies cloud computing, enabling its customers to rapidly accelerate innovation and increase their productivity and agility. The Company offers mission-critical solutions across Infrastructure-as-a-Service (“IaaS”), including Droplet virtual machines, storage and networking offerings; Platform-as-a-Service (“PaaS”), including Managed Database and Managed Kubernetes offerings; Software-as-a-Service (“SaaS”), including Managed Hosting and Marketplace offerings; and artificial intelligence and machine learning (“AI/ML”), including Machines, Notebooks and Deployments offerings.
The Company has adopted a holding company structure and the primary operations are performed globally through its wholly-owned operating subsidiaries.
Initial Public Offering
On March 26, 2021, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 16,500,000 shares of its common stock at a public offering price of $47.00 per share, which resulted in net proceeds of $722,981 after deducting the underwriting discounts and commissions and offering expenses payable by the Company. In connection with the IPO, all shares of the convertible preferred stock then outstanding automatically converted into 45,472,229 shares of common stock, and the redeemable convertible preferred stock warrants automatically converted into common stock warrants.
v3.24.0.1
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include accounts of the Company and all wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Reclassifications
Certain prior year amounts on the Consolidated Statements of Cash Flows have been reclassified and revised to conform to the current year presentation. Such reclassifications did not affect total revenues, operating income, or net income.
Use of Estimates
The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make, on an ongoing basis, estimates, judgments and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Such estimates include, but are not limited to, those related to revenue recognition, accounts receivable and related reserves, useful lives and realizability of long lived assets, capitalized internal-use software development costs, accounting for stock-based compensation including estimation of the probability of performance vesting conditions, the incremental borrowing rate we use to determine lease liabilities, valuation allowances against deferred tax assets, fair value of financial instruments, and the fair value and useful lives of tangible and intangible assets acquired and liabilities assumed resulting from business combinations. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Cash and Cash Equivalents
Cash and cash equivalents consist of highly liquid investments in money market funds, commercial paper and certificates of deposit, with original maturities from the date of purchase of three months or less. The carrying amounts of cash and cash equivalents approximate fair value because of the short-term maturity and highly liquid nature of these instruments.
Marketable Securities
The Company’s marketable securities consist of commercial paper, U.S. treasury securities and commercial debt securities. The Company determines the appropriate classification of its marketable securities at the time of purchase and
reevaluates such designation at each balance sheet date. The Company has classified and accounted for its marketable securities as available-for-sale securities as the Company may sell these securities at any time for use in its current operations or for other purposes, even prior to maturity. As a result, the Company classifies its marketable securities within Current assets on the Consolidated Balance Sheets.
Available-for-sale securities are recorded at fair value each reporting period. Premiums and discounts are amortized or accreted over the life of the related available-for-sale security as an adjustment to yield using the effective interest method. Interest income is recognized when earned. Unrealized gains and losses on these marketable securities are presented net of tax and reported as a separate component of Accumulated other comprehensive loss until realized. Realized gains and losses are determined based on the specific identification method and are reported in Other income (expense), net in the Consolidated Statements of Operations.
The Company periodically evaluates its marketable securities to assess whether an investment’s fair value is less than its amortized cost basis and if the decline in the fair value is attributable to a credit loss. Declines in fair value judged to be related to credit loss are reported in Other income (expense), net in the Consolidated Statements of Operations.
Foreign Currency
The reporting currency of the Company is the United States dollar (“USD”). The functional currency of the Company is USD, and the functional currency of the Company’s subsidiaries is primarily the local currency of the jurisdiction in which the foreign subsidiary is located. The assets and liabilities of the Company’s subsidiaries are translated to USD at exchange rates in effect at the balance sheet date. All income statement accounts are translated at monthly average exchange rates. Resulting foreign currency translation adjustments are recorded directly in Accumulated other comprehensive loss.
Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in Other income (expense), net on the Consolidated Statements of Operations when realized.
Restricted Cash
The following table reconciles cash, cash equivalents and restricted cash per the Consolidated Statements of Cash Flows:
December 31,
20232022
Cash and cash equivalents$317,236 $140,772 
Restricted cash included in Prepaid expenses and other current assets(1)
— 9,100 
Restricted cash(2)
1,747 1,935 
Total cash, cash equivalents and restricted cash$318,983 $151,807 
___________________
(1)Includes contingent compensation related to the Cloudways acquisition, which was paid on September 1, 2023.
(2)Includes deposits in financial institutions related to letters of credit used to secure lease agreements.
Accounts Receivable Net of Allowance for Expected Credit Losses
Accounts receivable primarily represents revenue recognized that was not invoiced at the balance sheet date and is primarily billed and collected in the following month. Trade accounts receivable are carried at the original invoiced amount less an estimated allowance for expected credit losses based on the probability of future collection. Management determines the adequacy of the allowance based on historical loss patterns, the number of days that customer invoices are past due, reasonable and supportable forecasts of future economic conditions to inform adjustments over historical loss data, and an evaluation of the potential risk of loss associated with specific accounts. When management becomes aware of circumstances that may further decrease the likelihood of collection, it records a specific allowance against amounts due, which reduces the receivable to the amount that management reasonably believes will be collected. The Company records changes in the estimate to the allowance for expected credit losses through provision for expected credit losses and reverses the accounts receivable and related allowance after the potential for recovery is considered remote.
The following table presents the changes in our allowance for expected credit losses for the period presented:
December 31,
20232022
Beginning balance$6,099 $4,212 
Provision for expected credit losses15,357 16,551 
Write-offs and other(15,608)(14,664)
Ending balance$5,848 $6,099 
Fair Value of Financial Instruments
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers the principal or most advantageous market in which to transact and the market-based risk. The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The carrying amounts reported in the consolidated financial statements approximate the fair value for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses due to their short-term nature.
Property and Equipment
Property and equipment is stated at cost, net of accumulated depreciation. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets and is included in depreciation and amortization expense in the Consolidated Statements of Operations. The Company includes the amortization of assets that are recorded under finance leases in depreciation expense. The estimated useful lives of property and equipment are as follows:
Property and Equipment CategoryUseful Life
Computers and equipment5 years
Furniture and fixtures5 years
Leasehold improvementsLesser of lease term or remaining useful life
Internal-use software3 years
Equipment under finance leasesLesser of lease term or remaining useful life
The Company periodically reviews the estimated useful lives of property and equipment.
Leases
The Company leases co-location space at data center facilities and, to a lesser extent, corporate offices, all of which are operating leases. The finance leases are for data center equipment. The Company determines if an arrangement is a lease at contract inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and current and noncurrent operating lease liabilities. Finance lease ROU assets, net of amortization are included in Property and equipment, net, and finance lease liabilities are included in Other current liabilities and Other non-current liabilities on the Company’s Consolidated Balance Sheets.
ROU assets represent the Company’s right to use an underlying asset for the lease term and the corresponding lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the unpaid lease payments over the lease term. Lease payments used to measure lease liabilities include fixed lease payments at the lease commencement date, including rental escalation provisions. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the lease terms and economic environment at commencement date in determining the present value of future payments. The ROU asset is measured as the amount of the initial lease liability and adjusted for initial direct costs, lease payments made at or before the commencement date, and reduced by tenant incentives received. The Company does not include options for renewal periods or periods beyond the termination dates in the lease in the measurement of ROU assets and lease liabilities until it is reasonably certain that those options will be exercised based on management's assessment of various relevant factors including economic, entity specific, and market-based factors among others.
The Company has lease agreements with lease and non-lease components, which it has elected to combine for all asset classes. The non-lease components of operating leases primarily consist of power. Fixed payments for non-lease components are considered part of the lease component and included in the measurement of the ROU assets and liabilities, and variable payments are expensed as incurred. Variable lease payments generally relate to non-lease components above a contractual minimum fixed amount.
Lease expenses for lease payments under operating leases are recognized on a straight-line basis over the lease term. The Company’s operating lease costs for co-location data center facilities are included in Cost of revenue in the Consolidated Statements of Operations and the operating lease costs for corporate offices are included in General and administrative expenses in the Consolidated Statements of Operations. Amortization expense of finance lease ROU assets is recognized on a straight-line basis over the lease term of one to five years, and interest expense for finance lease liabilities is recognized under the effective interest rate method based on the incremental borrowing rate. The Company includes the amortization of assets that are recorded under finance leases in depreciation expense included in Cost of revenue on the Company’s Consolidated Statements of Operations. Interest expense is included in Other income (expense), net on the Company’s Consolidated Statements of Operations. For leases with a term of 12 months or less (short-term leases), the Company elected to not recognize the ROU asset or lease liability and the lease payments are recognized in the Consolidated Statements of Operations on a straight-line basis over the lease term.
Capitalization of Internal-Use Software Development Costs
Capitalization of costs incurred in connection with software developed for internal-use commences when both the preliminary project stage is completed and management has authorized further funding for the project, based on a determination that it is probable the project will be completed and used to perform the function intended. Capitalized costs include external consulting fees, payroll and payroll-related costs, and stock-based compensation for employees on development teams who are directly associated with, and who devote time to, internal-use software projects during the application development stage. Capitalization of such costs ceases no later than the point at which the project is substantially complete and ready for its intended use. Costs incurred during the planning, training, and post-implementation stages of the software development lifecycle are expensed as incurred and have been included in Research and development expense on the Consolidated Statements of Operations.
Impairment of Long-Lived Assets
Long-lived assets, including property and equipment, intangible assets with definite lives and ROU assets, are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable. For assets that are to be held and used, impairment is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value.
The Company decided to cease the use of a portion of its leased New York office space in 2022 and entered into two separate subleases agreements with third party subtenants, in which the sublease income is less than the original lease payments indicating impairment. For the year ended December 31, 2022, a reduction to the carrying value of the ROU asset of $1,472 was recorded representing the carrying value amount in excess of the fair value with a corresponding impairment charge recorded to General and administrative in the Consolidated Statements of Operations.
During the years ended December 31, 2023, 2022 and 2021, the Company recorded an impairment loss of $1,140, $163 and $285, respectively, related to software that is no longer being used. These impairment losses are included in Cost of revenue and Research and development on the Consolidated Statements of Operations.
Business Combinations
The Company applies the provisions of ASC 805, Business Combinations (“ASC 805”), in accounting for acquisitions. ASC 805 requires that the Company evaluates whether a transaction pertains to an acquisition of assets or to an acquisition of a business. A business is defined as an integrated set of assets and activities that is capable of being conducted and managed for the purpose of providing a return to investors. Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets and liabilities assumed on a relative fair value basis; whereas the acquisition of a business requires the Company to recognize separately from goodwill the assets acquired and the liabilities assumed at the acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at
the acquisition date as well as any contingent consideration, where applicable, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the business acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of a business acquisition’s measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations.
Accounting for business combinations requires the Company to make significant estimates and assumptions, especially at the acquisition date, to determine the fair value of assets acquired and liabilities assumed, including the selection of valuation methodologies, estimates of future revenue and cash flows and discount rates in determining the fair value of intangible assets. Although the Company believes that the assumptions and estimates made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. The assets purchased and liabilities assumed have been reflected on the Company’s Consolidated Balance Sheets, and the results are included on the Consolidated Statements of Operations and Consolidated Statements of Cash Flows from the date of acquisition. Acquisition-related transaction costs, including legal and accounting fees and other external costs directly related to the acquisition, are recognized separately from the acquisition and expensed as incurred in General and administrative on the Consolidated Statements of Operations.
In addition, uncertain tax positions and tax related valuation allowances assumed in a business combination are initially estimated as of the acquisition date. The Company reevaluates these items quarterly based upon facts and circumstances that existed as of the acquisition date with any adjustments to our preliminary estimates being recorded to goodwill if identified within the measurement period. Subsequent to the measurement period or the final determination of the tax allowance’s or contingency’s estimated value, whichever comes first, changes to these uncertain tax positions and tax related valuation allowances will affect the provision for income taxes in our consolidated statement of operations and could have a material impact on the results of operations and financial position.
Goodwill and Indefinite-Lived Intangible Assets
Goodwill is an asset representing the future economic benefit arising from other assets acquired in a business combination which are not individually identified and separately recognized. The Company does not amortize goodwill. Goodwill has resulted from the acquisitions of Nanobox, Inc. (“Nanobox”) on April 4, 2019, Nimbella Corp. (“Nimbella”) on September 1, 2021, Cloudways Ltd. (“Cloudways”) on September 1, 2022, and Paperspace Co. (“Paperspace”) on July 5, 2023, as discussed in Note 3. Goodwill was $348,322 and $315,168 as of December 31, 2023 and 2022, respectively, and represents the excess purchase price over the fair value of identifiable net assets acquired in a business combination. As of December 31, 2023, the Company has a single reporting unit.
Goodwill is reviewed for impairment on an annual basis as of October 1st of each year, or more frequently if a triggering event occurs. The Company performs an assessment of goodwill utilizing either a qualitative or quantitative impairment test. The qualitative impairment test assesses several factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its respective carrying amount. If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its respective carrying amount, a quantitative fair value test is performed. Alternatively, the Company may elect to proceed directly to the quantitative impairment test. In a quantitative impairment test, the Company compares the carrying amount of the reporting unit to its fair value. If the carrying amount of the reporting unit exceeds its fair value, an impairment charge is recognized for the amount by which the carrying amount of the reporting unit exceeds its fair value, up to the amount of goodwill of the reporting unit.
Indefinite-lived intangible assets consist of Internet Protocol (“IP”) addresses needed for customers to host their server online. The Company evaluates these indefinite-lived intangible assets for impairment on an annual basis as of October 1st of each year and whenever events or changes in circumstances indicate that an impairment may exist. Intangible assets with indefinite lives were $44,821 as of December 31, 2023 and 2022 and are included as Intangible assets on the Consolidated Balance Sheets.
The Company performs an assessment of indefinite-lived intangible assets utilizing either a qualitative or quantitative impairment test. The qualitative impairment test assesses several factors to determine whether it is more likely than not that the fair value of the assets are less than its respective carrying amounts. If the Company concludes it is more likely than not that the fair value of the assets are less than its respective carrying amounts, a quantitative fair value test is performed. Alternatively, the Company may elect to proceed directly to the quantitative impairment test. Recoverability of
assets held and used is measured by comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds these estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceeds the fair value of the asset or asset group, based on discounted cash flows.
No impairment charges for goodwill and indefinite-lived intangible assets have been recorded during the years ended December 31, 2023, 2022 or 2021.
Intangible Assets
Intangible assets with definite lives consist of acquired developed technology, trade name, customer relationships, content and brand. Intangible assets with definite lives are stated at cost less accumulated amortization and are amortized on a basis consistent with the timing and pattern of expected cash flows used to value the intangible asset, generally on a straight-line basis over the useful life of three to ten years. Intangible assets with definite lives were $95,330 and $74,107 as of December 31, 2023 and 2022, respectively, and are included as Intangible assets on the Consolidated Balance Sheets.
Revenue Recognition
The Company recognizes revenue in accordance with FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”).
The Company accounts for revenue using the following steps:
1. Identify the contract with a customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to performance obligations in the contract
5. Recognize revenue when or as we satisfy a performance obligation
The Company provides cloud computing services, including IaaS, PaaS, SaaS and AI/ML, to its customers. The Company recognizes revenue based on the customer utilization of these resources. Customer contracts are typically month-to-month and do not include any minimum guaranteed quantities or fees. Fees are billed monthly, and payment is typically due upon invoicing. Revenue is recognized net of allowances for credits and any taxes collected from customers.
The Company’s global cloud platform is supported by various third parties. The Company considered the principal versus agent guidance in ASC 606 and concluded that it is the principal for all services provided to its customers.
The Company may offer sales incentives in the form of promotional and referral credits, and grant credits to encourage customers to use the Company’s services. These types of promotional and referral credits typically expire in two months or less if not used. For credits earned with a purchase, they are recorded as contract liabilities when earned and recognized at the earlier of redemption or expiration. The majority of credits are redeemed in the month they are earned.
Timing of revenue recognition may differ from the timing of invoicing to the Company’s customers. The Company records a receivable when revenue is recognized prior to invoicing. Any payments received in advance of billing are a contract liability, which is recorded as Deferred revenue within Total current liabilities on the Consolidated Balance Sheets. Revenue recognized during the years ended December 31, 2023, 2022 and 2021, which was included in the Deferred revenue balances at the beginning of each respective period, was $3,674, $2,894 and $2,672, respectively.
Cost of Revenue
Cost of revenue consists primarily of fees related to operating in third-party co-location facilities, personnel expenses for those directly supporting our data centers and non-personnel costs, including amortization of acquired technology, amortization of capitalized internal-use software development costs, and depreciation of our data center equipment. Third-party co-location facility costs include data center rental fees, power costs, maintenance fees, network and bandwidth. Personnel expenses include salaries, bonuses, benefits, and stock-based compensation.
Research and Development Expenses
Research and development expenses consist primarily of personnel costs including salaries, bonuses, benefits and stock-based compensation. Research and development expenses also include amortization of capitalized internal-use software development costs for research and development activities, which are amortized over three years, and professional
services, as well as costs related to our efforts to add new features to our existing offerings, develop new offerings, and ensure the security, performance, and reliability of our global cloud platform.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of personnel costs of our sales, marketing and customer support employees including salaries, bonuses, benefits and stock-based compensation. Sales and marketing expenses also include costs for marketing programs, commissions, advertising and professional service fees.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel costs of our human resources, legal, finance and other administrative functions including salaries, bonuses, benefits, and stock-based compensation. General and administrative expenses also include provision for expected credit losses, software, payment processing fees, business insurance, depreciation and amortization expenses, rent and facilities costs, impairment of long-lived assets, acquisition related compensation, and other administrative costs.
Restructuring and other charges
The Company records restructuring expenses when management commits to a restructuring plan, the restructuring plan identifies all significant actions, the period of time to complete the restructuring plan indicates that significant changes to the plan are not likely, and employees who are impacted have been notified.
Restructuring and other charges consist primarily of personnel costs, such as notice period, employee severance payments and termination benefits, as well as stock-based compensation related to vesting of certain equity awards.
Advertising and Other Promotional Costs
Advertising and other promotional costs are expensed as incurred and are included in Sales and marketing on the Consolidated Statements of Operations. Non-direct response advertising expenses were $7,857, $19,914 and $14,577 for the years ended December 31, 2023, 2022 and 2021, respectively.
Income Taxes
The Company accounts for income taxes pursuant to the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax assets and liabilities are based on enacted tax laws and rates applicable to periods in which the differences are expected to affect taxable income. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. Federal, state, and foreign income taxes are provided based on statutory rates.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law. The Tax Act requires an entity to make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to Global Intangible Low Taxed Income (“GILTI”) as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into an entity’s measurement of its deferred taxes (the “deferred method”). The Company has elected to treat taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred using the period cost method.
The Company accounts for uncertainty in income taxes using a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by the taxing authorities. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate audit settlement.
The Company recognizes interest and penalties, if any, associated with income tax matters as part of income tax expense on the Consolidated Statements of Operations and includes accrued interest and penalties with the related income tax liability in Other current liabilities on the Consolidated Balance Sheets.
Segment Information
The Company’s chief operating decision maker, the chief executive officer, reviews discrete financial information presented on a consolidated basis for purposes of regularly making operating decisions, allocation of resources, and assessing financial performance. Accordingly, the Company has one operating and reporting segment.
Geographical Information
Revenue, as determined based on the billing address of the Company’s customers, was as follows:
Year Ended December 31,
202320222021
North America37 %38 %38 %
Europe29 %30 %30 %
Asia24 %22 %22 %
Other10 %10 %10 %
Total100 %100 %100 %
Revenue derived from customers in the United States was 30% of total revenue for the year ended December 31, 2023, and 31% of total revenue for the years ended December 31, 2022 and 2021.
No country outside of the United States had revenue greater than 10% of total consolidated revenue in any period presented.
Long-lived assets includes property, equipment and leases. The geographic locations of the Company’s long-lived assets, net, based on physical location of the assets is as follows:
December 31,
20232022
United States$233,557 $206,118 
Singapore43,425 60,307 
Germany
62,224 50,274 
Netherlands
46,170 35,951 
Other
75,269 74,221 
Total$460,645 $426,871 
Concentration of Credit Risk
The amounts reflected in the consolidated balance sheets for cash and cash equivalents, marketable securities, restricted cash, and trade accounts receivable are exposed to concentrations of credit risk. Although the Company maintains cash and cash equivalents with multiple financial institutions, the deposits, at times, may exceed federally insured limits. The Company believes that the financial institutions that hold its cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with respect to these balances.
The Company’s customer base consists of a significant number of geographically dispersed customers. No customer represented 10% or more of accounts receivable, net as of December 31, 2023 and 2022. Additionally, no customer accounted for 10% or more of total revenue during the years ended December 31, 2023, 2022 and 2021, respectively.
Stock-Based Compensation
Stock Options
Compensation expense related to stock-based transactions, including employee, consultant, and non-employee director stock option awards, is measured and recognized, net of estimated forfeitures, in the Consolidated Statements of Operations based on fair value. The fair value of each option award is estimated on the grant date using the Black Scholes option-pricing model. Expense is recognized on a straight-line basis over the requisite service period. The option-pricing model requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the expected term of the option, the expected volatility of the price of the Company’s common stock, risk-free interest rates, and the expected dividend yield of the Company’s common stock. The assumptions used in the option-pricing model represent management’s best estimates.
Expected volatility is a measure of the amount by which the stock price is expected to fluctuate. Since the Company has limited trading history of its common stock at the time of issuing stock options, the Company estimates the
expected volatility of its stock options at the grant date by taking the average historical volatility of a group of comparable publicly traded companies, as well as the Company’s historical volatility, over a period equal to the expected life of the options.
The Company determined the expected term based on the average period the stock options that were expected to remain outstanding using the simplified method, generally calculated as the midpoint of the stock options’ vesting term and contractual expiration period, as the Company did not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.
The Company uses the U.S. Treasury yield for our risk-free interest rate that corresponds with the expected term. The Company utilizes a dividend yield of zero, as the Company does not currently issue dividends, nor does the Company expect to do so in the future.
The Company measures stock options granted to employees and directors based on their fair value on the date of the grant and recognize compensation expense of those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. The Company applies the straight‑line method of expense recognition to all awards with only service based vesting conditions.
Stock-based compensation for non-employee stock options is calculated using the Black-Scholes option pricing model and is recorded as the options vest.
Restricted Stock Units
The Company grants restricted stock units (“RSUs”) as incentive awards to its employees. RSUs are payable in shares of the Company’s common stock as the periodic vesting requirements are satisfied. The value of RSUs is determined using the intrinsic value method and is based on the number of shares granted and the valuation of the Company’s common stock on the date of grant.
Performance-Based Restricted Stock Units
The Company grants performance-based restricted stock units (“PRSUs”) primarily to members of the executive team and, in limited instances, to other employees in connection with a specific transaction. PRSUs have vesting conditions based on pre-established performance goals of the Company. The fair value is determined based on the closing quoted price of the Company’s common stock on the grant date and the fair value is recognized using the graded-vesting attribution method over the requisite service period. We evaluate the probability of meeting the performance criteria at each balance sheet date. Changes to the probability assessment and the estimate of shares expected to vest will result in adjustments to the related stock-based compensation that will be recorded in the period of change.
Market-Based Restricted Stock Units
The Company has granted market-based restricted stock units (“MRSUs”) to its chief executive officer. The stock-based compensation for market-based restricted stock units is measured at fair value on the date of grant. The market conditions are considered in the grant date fair value using a Monte Carlo valuation model, which utilizes multiple input variables to determine the probability of the Company achieving the specified market conditions. Stock-based compensation related to an award with a market condition will be recognized over the requisite service period regardless of whether the market condition is satisfied, provided that the requisite service period has been completed.
Employee Stock Purchase Plan
The Company offers an Employee Stock Purchase Plan (“ESPP”) that permits eligible employees to purchase shares of the Company’s common stock at a discount. The fair value of awards under the ESPP is calculated at the beginning of each offering period. The Company estimates the fair value of the awards using the Black-Scholes option valuation model. The Black-Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and the offering period. This fair value is then amortized on a straight-line basis over the offering period. Stock-based compensation is based on awards expected to be purchased at the beginning of the offering period, and therefore is reduced when participants withdraw during the offering period.
Net Income (Loss) per Share Attributable to Common Stockholders
Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Prior to the conversion of the convertible preferred stock in connection with the IPO, holders of Series Seed, Series A-1, Series B and Series C convertible preferred stock were each entitled to receive non-cumulative dividends payable prior and in preference to any dividends on any shares of the Company’s common stock. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. The holders of the convertible preferred stock did not have a contractual obligation to share in the losses of the Company. As such, the Company’s net losses for the year ended December 31, 2021 were not allocated to these participating securities.
Basic earnings per share is computed by dividing net income or loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income or loss attributable to common stockholders, adjusted for interest expense on dilutive convertible notes, by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities, if any, outstanding during the period.
Basic and diluted net loss per common share attributable to common stockholders is presented in conformity with the treasury stock method required for stock-based compensation, and in conformity with the if-converted method required for the convertible notes. Nonvested market and performance-based share awards are included in the weighted-average diluted shares outstanding each period if established market or performance criteria have been met at the end of the respective periods.
Potential shares related to certain of the Company’s outstanding stock options, restricted stock units and convertible notes were excluded because they were anti-dilutive, however, those potential shares could be dilutive in the future. Potentially dilutive securities whose effect would have been antidilutive are excluded from the computation of diluted earnings per share for periods in which the Company is in a loss position.
Recent Accounting Pronouncements – Pending Adoption
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold. Further, ASU 2023-09 requires certain disclosures of state versus federal income tax expense and taxes paid. The amendments in ASU 2023-09 are required to be adopted for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued. The amendments should be applied on a prospective basis although retrospective application is permitted. The Company is currently evaluating the impact of adoption on our financial disclosures.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024, with early application permitted. The Company is currently evaluating the impact of adopting ASU 2023-07 on its consolidated financial statements and disclosures.
v3.24.0.1
Acquisitions, Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
Acquisitions, Goodwill and Intangible Assets Acquisitions, Goodwill and Intangible Assets
Paperspace Co.
On July 5, 2023 (the “Paperspace Acquisition Date”), the Company consummated a business combination acquiring 100% of Paperspace for total cash consideration of $100,399. Included in the consideration paid is a contribution of $11,100 to an escrow account held by a third party on the Paperspace Acquisition Date to support certain post-closing indemnification obligations.
This acquisition has been accounted for as a business combination and the results of Paperspace’s operations have been included in the accompanying consolidated financial statements since the Paperspace Acquisition Date. The acquisition and integration of Paperspace’s advanced technology into the Company’s platform will extend the Company’s
offerings, enabling customers to more easily test, develop and deploy artificial intelligence and machine learning (“AI/ML”) applications, and augment and enhance existing AI/ML applications.
The determination and allocation of total consideration is based on estimates of fair value. Measurement period adjustments, if any, will be recognized in the reporting period in which the adjustment amounts are determined within twelve months from the Paperspace Acquisition Date. As of December 31, 2023, the purchase price allocation for Paperspace remains open as the Company gathers additional information regarding the assets acquired and the liabilities assumed, primarily in relation to working capital accounts and the Company’s assessment of tax related items.
The following table sets forth the allocation of the purchase price for the business combination and summarizes the fair values of the assets acquired and liabilities assumed at the Paperspace Acquisition Date:
Amount
Fair value of consideration transferred
Cash consideration$100,399 
Recognized amounts of identifiable assets acquired and liabilities assumed
Tangible assets acquired:
Cash and cash equivalents$1,376 
Accounts receivable1,042 
Prepaid expenses and other current assets193 
Property and equipment, net4,515 
Operating right-of-use asset, net4,398 
Finance lease right-of-use asset, net11,958 
Other assets
367 
Intangible assets37,690 
Liabilities assumed:
Accounts payable and accrued expenses(1,445)
Deferred revenue(105)
Operating lease liabilities, current(1,475)
Operating lease liabilities, non-current(2,923)
Finance lease liabilities, current(5,707)
Finance lease liabilities, non-current(6,251)
Deferred tax liabilities(1,074)
Total identifiable net assets acquired42,559 
Goodwill recorded in acquisition57,840 
Total purchase price allocation$100,399 
The Company amortizes its intangible assets assuming no residual value over periods in which the economic benefit of these assets is consumed (the useful life). The fair values allocated to the identifiable intangible assets and their estimated useful lives are as follows:
Estimated Fair ValueWeighted Average Useful Life (years)
Trademark/Trade Name$300 1
Developed Technology24,120 5
Customer Relationships13,270 5
Total intangible assets$37,690 
Paperspace’s assets and liabilities were measured at estimated fair values on July 5, 2023. Estimates of fair value represent management’s best estimate and require a complex series of judgments about future events and uncertainties. Third-party valuation specialists were engaged to assist management in the valuation of these assets and liabilities.
The goodwill is attributable primarily to the integration of Paperspace’s advanced technology into the Company’s platform which will extend the Company’s offerings, resulting in incremental revenue from new and existing customers, and to a lesser extent intangible assets that do not qualify for separate recognition, including the existing workforce acquired through the acquisition. None of the goodwill is expected to be deductible for income tax purposes.
Acquisition and integration related costs consist of miscellaneous professional service fees and expenses for acquisition related activities. The Company recognized approximately $5,745 of acquisition related costs that were expensed in the year ended December 31, 2023. These costs are shown primarily as part of General and administrative expenses in the accompanying Consolidated Statements of Operations.
The amount of Paperspace’s revenue and net loss included in the Company’s Consolidated Statements of Operations from the Paperspace Acquisition Date through December 31, 2023, was $6,350 and $18,914, respectively.
Contingent compensation
Contingent compensation costs relate to payments due to certain Paperspace sellers for $10,120, of which $5,060 will be earned on July 5, 2024, and $1,265 will be earned quarterly thereafter through July 5, 2025. Contingent compensation represents compensation for post-combination services because the payments are contingent on continuing employment of the Paperspace founders at each payment date. For the year ended December 31, 2023, the Company recorded an acquisition related compensation expense of $4,135 related to estimated compensation earned by the Paperspace founders to date included in General and administrative in the accompanying Consolidated Statements of Operations.
Unaudited Pro Forma Financial Information
The unaudited pro forma information below summarizes the combined results of the Company and Paperspace as if the Company’s acquisition of Paperspace closed on January 1, 2022 but does not necessarily reflect the combined actual results of operations of the Company and Paperspace that would have been achieved, nor are they necessarily indicative of future results of operations. The unaudited pro forma information reflects certain adjustments that were directly attributable to the acquisition of Paperspace, including additional amortization of acquired assets and the timing of nonrecurring acquisition and integration related costs, and other adjustments the Company believes are reasonable for the pro forma presentation. If Paperspace had been acquired on January 1, 2022 and included in the Company’s results for 2022 and 2023, it would not have had a material impact to revenue.
Pro Forma for the
Year Ended December 31,
20232022
Net loss$(280)$(61,802)
Cloudways Ltd.
On September 1, 2022 (“Cloudways Acquisition Date”), the Company acquired 100% of the outstanding equity interests of Cloudways, Ltd. (“Cloudways”) pursuant to a Share Purchase Agreement, dated as of August 19, 2022. This acquisition has been accounted for as a business combination. The results of Cloudways’ operations have been included in the accompanying consolidated financial statements since the Cloudways Acquisition Date. The acquisition of Cloudways, a leading managed cloud hosting and software-as-a-service provider for startups and growing digital businesses, strengthens the Company’s ability to simplify cloud computing by enabling customers to launch a business and scale it effortlessly. Cloudways was a customer of the Company prior to the acquisition, and the Company recognized revenue of approximately $6,000 from Cloudways from January 1, 2022 through the Cloudways Acquisition Date.
The acquisition purchase consideration, in accordance with ASC 805, totaled $311,237 and was paid in cash. The Share Purchase Agreement includes customary representations and warranties and covenants of the parties. The Company contributed $42,000 of the consideration paid to an escrow account held by a third party on the Cloudways Acquisition Date to support certain post-closing indemnification obligations. The final accounting has been completed.
The following table sets forth the components and the allocation of the purchase price for the business combination and summarizes the fair values of the assets acquired and liabilities assumed at the Cloudways Acquisition Date:
Amount
Fair value of consideration transferred
Cash paid to Cloudways sellers$278,187 
Cash contributed to escrow accounts42,000 
Other expenses150 
Less: Cash pre-funded from contingent compensation(9,100)
Total consideration paid $311,237 
Recognized amounts of identifiable assets acquired and liabilities assumed
Tangible assets acquired:
Cash and cash equivalents$5,827 
Accounts receivable 4,753 
Prepaid expenses and other current assets 547 
Other assets9 
Intangible assets72,000 
Liabilities assumed:
Accounts payable(1,820)
Accrued expenses(957)
Deferred revenue(1,013)
Deferred tax liabilities(3,417)
Other current liabilities(23,243)
Total identifiable net assets acquired52,686 
Goodwill recorded in acquisition258,551 
Total purchase price allocation$311,237 
During the year ended December 31, 2023, the Company recorded measurement period adjustments of $24,686 to decrease Goodwill and a corresponding $18,269 to decrease Deferred tax liabilities, and $6,417 to decrease Other current liabilities on the Consolidated Balance Sheets. Additionally, the change to the provisional amounts resulted in an increase to Income tax expense and Deferred tax liabilities of $1,635 and a decrease to General and administrative expenses and other current liabilities of $921, respectively. The measurement period adjustments are a result of new information obtained about facts and circumstances that existed as of the acquisition date.
The Company amortizes its intangible assets assuming no residual value over periods in which the economic benefit of these assets is consumed (the useful life). The fair values allocated to the identifiable intangible assets and their estimated useful lives are as follows:
Estimated Fair ValueWeighted Average Useful Life (years)
Trade name$9,500 10
Developed technology31,500 5
Customer relationships31,000 7
Total intangible assets$72,000 
Cloudways’ assets and liabilities were measured at estimated fair values on September 1, 2022. Estimates of fair value represent management’s best estimate and require a complex series of judgments about future events and uncertainties. Third-party valuation specialists were engaged to assist management in the valuation of these assets and liabilities. The Company used the relief from royalty method to fair value the developed technology and the trade name
intangible assets, and the multi-period excess earnings method to fair value the customer relationship intangible assets. The significant assumptions used to estimate the value of the intangible assets included discount rates, projected revenue growth rates, EBITDA margins, technology obsolescence and royalty rates.
The goodwill is attributable primarily to the revenue synergies expected from combining the operations of both entities, and intangible assets that do not qualify for separate recognition, including the existing workforce acquired through the acquisition. None of the goodwill is expected to be deductible for income tax purposes.
Contingent compensation
Contingent compensation costs relate to payments due to a Cloudways seller for $38,830, of which $16,851 was earned and paid on September 1, 2023, and $7,326 will be earned on each of March 1, 2024, September 1, 2024 and March 1, 2025. Contingent compensation represents compensation for post-combination services because the payments are contingent on continuing employment of the Cloudways seller, with limited exceptions, at each payment date.
Unaudited Pro Forma Financial Information
The unaudited pro forma information below summarizes the combined results of the Company and Cloudways as if the Company’s acquisition of Cloudways closed on January 1, 2021 but does not necessarily reflect the combined actual results of operations of the Company and Cloudways that would have been achieved, nor are they necessarily indicative of future results of operations. The unaudited pro forma information reflects certain adjustments that were directly attributable to the acquisition of Cloudways, including additional amortization adjustments for the fair value of the assets acquired and liabilities assumed and other adjustments the Company believes are reasonable for the pro forma presentation. The pro forma net loss for the year ended December 31, 2022 was adjusted to exclude nonrecurring acquisition related costs of $2,139.
Pro Forma for the
Year Ended December 31,
20222021
Revenue$607,191 $459,845 
Net loss(20,780)(53,227)
2023 Asset Acquisition
In January 2023, the Company acquired certain assets of SnapShooter Limited for $2,500, which was accounted for as an asset acquisition as substantially all of the fair value of the assets acquired was concentrated in a developed technology intangible asset and will be amortized over five years.
Additionally, the Company recognized a contingent compensation liability of $1,000 that is payable one year from the date of acquisition, contingent on continuing employment and will be recognized as compensation expense over the period that it is earned.
2022 Asset Acquisitions
In March 2022, the Company acquired the assets of the CSS Tricks website from Midwest Coast Studios LLC for total purchase consideration of $4,000. The intangible assets will be amortized over three to five years.
In June 2022, the Company acquired intangible assets from JournalDev IT Services Private Limited for total purchase consideration of $1,400 to be amortized over three years.
Goodwill
Movements in goodwill during the years ended December 31, 2023 and 2022 were as follows:
Balance at January 1, 2022$32,170 
Acquisition of Cloudways283,237
Measurement period adjustment(1)
(239)
Balance at December 31, 2022315,168
Acquisition of Paperspace57,840 
Measurement period adjustments(2)
(24,686)
Balance at December 31, 2023
$348,322 
___________________
(1)The Company finalized and adjusted the purchase price for the Nimbella acquisition to reflect a decrease of $239 to Goodwill related to the final 2021 pre-acquisition tax return.
(2)The Company finalized and adjusted the purchase price for the Cloudways acquisition as discussed above.
Intangible Assets, net
Intangible assets, net consisted of the following amounts:
December 31,
20232022
Asset Type
IP addresses$44,821 $44,821 
Developed technology62,330 35,710 
Customer relationships44,270 31,000 
Trade name9,800 9,500 
Content4,400 4,400 
Brand1,000 1,000 
Total carrying value$166,621 $126,431 
Accumulated Amortization
Developed technology$(14,737)$(4,477)
Customer relationships(7,203)(1,476)
Trade name(1,413)(317)
Content(2,534)(1,067)
Brand(583)(166)
Total accumulated amortization(26,470)(7,503)
Total intangible assets, net$140,151 $118,928 
Amortization expense was $18,967, $6,301 and $645 for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the weighted-average remaining amortization period for amortizable intangible assets was five years for developed technology, six years for customer relationships, ten years for trade name, three years for content, and two years for brand. Amortization expense for the next five years and thereafter, based on valuations and
determinations of useful lives, is expected to be as follows:
2024$22,426 
202520,057 
202619,657 
202717,557 
20289,198 
Thereafter6,435 
Total estimated future intangible amortization expense$95,330 
v3.24.0.1
Marketable Securities
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Marketable Securities Marketable Securities
The following is a summary of available-for-sale marketable securities, excluding those securities classified within cash and cash equivalents, on the Consolidated Balance Sheets as of December 31, 2023 and 2022.
December 31, 2023
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. treasury securities$69,456 $6 $(6)$69,456 
Commercial paper25,088 — (12)25,076 
Total Marketable securities$94,544 $6 $(18)$94,532 
December 31, 2022
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. treasury securities$549,944 $29 $(849)$549,124 
Corporate debt securities35,293 — (86)35,207 
Commercial paper139,489 9 (367)139,131 
Total Marketable securities$724,726 $38 $(1,302)$723,462 
Interest income from investments was $23,767, $11,881 and $123 for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, all of the Company’s available-for-sale short-term investments were due within one year.
As of December 31, 2023, the Company held three securities that were in an unrealized loss position. The Company does not intend to sell and expects that it is more likely than not that it will not be required to sell these securities until such time as the value recovers or the securities mature. Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates and not credit-related factors based on the Company’s evaluation of available evidence. To determine whether a decline in value is related to credit loss, the Company evaluates, among other factors: the extent to which the fair value is less than the amortized cost basis, changes to the rating of the security by a rating agency and any adverse conditions specifically related to an issuer of a security or its industry. Management does not believe any remaining unrealized losses represent impairments based on our evaluation of available evidence. Unrealized gains and losses on marketable securities are presented net of tax.
v3.24.0.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The fair value of our financial assets measured on a recurring basis is as follows:
December 31, 2023
Level ILevel IITotal
Cash and cash equivalents:
Cash$54,871 $— $54,871 
Money market funds262,365 — 262,365 
Total Cash and cash equivalents$317,236 $— $317,236 
Marketable securities:
U.S. treasury securities$69,456 $— $69,456 
Commercial paper— 25,07625,076 
Total Marketable securities$69,456 $25,076 $94,532 
December 31, 2022
Level ILevel IITotal
Cash and cash equivalents:
Cash$95,117 $— $95,117 
Money market funds45,655 — 45,655 
Total Cash and cash equivalents$140,772 $— $140,772 
Marketable securities:
U.S. treasury securities$549,124 $— $549,124 
Corporate debt securities— 35,207 35,207 
Commercial paper— 139,131 139,131 
Total Marketable securities$549,124 $174,338 $723,462 
The Company classifies its highly liquid money market funds and U.S. treasury securities within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company classifies its commercial paper and corporate debt securities within Level 2 because they are valued using inputs other than quoted prices that are directly or indirectly observable in the market, including readily available pricing sources for the identical underlying security which may not be actively traded. The Company had no Level 3 financial assets as of December 31, 2023 and 2022.
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
The Company reports financial instruments at fair value, with the exception of the 0% Convertible Senior Notes due December 1, 2026 (“Convertible Notes”). Financial instruments that are not recorded at fair value on a recurring basis are measured at fair value on a quarterly basis for disclosure purposes. The carrying values and estimated fair values of financial instruments not recorded at fair value are as follows:
December 31, 2023December 31, 2022
Carrying ValueFair ValueCarrying ValueFair Value
Convertible Notes$1,477,798 $1,235,625 $1,470,270 $1,134,030 
The carrying value of the Convertible Notes as of December 31, 2023 and 2022 was net of unamortized debt issuance costs of $22,202 and $29,730, respectively.
The total fair value of the Convertible Notes was determined based on the closing trading price as of the last day of trading for the period. The Company considers the fair value to be a Level 2 valuation due to the limited trading activity.
v3.24.0.1
Balance Sheet Details
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Balance Sheet Details Balance Sheet Details
Property and equipment, net
Property and equipment, net consisted of the following:
December 31,
20232022
Computers and equipment$657,505 $564,763 
Furniture and fixtures1,511 1,511 
Leasehold improvements6,820 6,820 
Internal-use software84,279 78,649 
Equipment under finance leases11,938 — 
Property and equipment, gross$762,053 $651,743 
Less: accumulated depreciation$(387,083)$(317,329)
Less: accumulated amortization (69,526)(61,244)
Property and equipment, net $305,444 $273,170 
Depreciation expense on property and equipment was $90,466, $83,814 and $74,278 for the years ended December 31, 2023, 2022 and 2021, respectively.
The Company capitalized costs related to the development of computer software for internal use of $6,958, $10,636 and $7,307 for the years ended December 31, 2023, 2022 and 2021, respectively, which is included in internal-use software costs within Property and equipment, net. Amortization expense related to internal-use software was $8,433, $12,117 and $13,424 for the years ended December 31, 2023, 2022 and 2021, respectively.
Other current liabilities
Other current liabilities consisted of the following:
December 31,
20232022
Income taxes$44,887 $40,848 
Contingent compensation 15,433 5,617 
Finance leases5,221 — 
Excise taxes related to repurchase of common stock4,884 — 
Employee contributions under the ESPP557 944 
Total other current liabilities
$70,982 $47,409 
v3.24.0.1
Debt
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Debt Debt
Credit Facility
In February and March 2020, the Company entered into and subsequently amended a second amended and restated credit agreement with KeyBank National Association as administrative agent. In November 2021, the Company further amended such credit agreement to revise certain covenants that restricted the incurrence of indebtedness to permit the issuance of the convertible notes discussed below. In March 2022, the Company entered into a third amended and restated credit agreement (the “Credit Facility”) to, among other modifications,
(i) remove the term loan component of the existing credit facility which had been previously repaid in full;
(ii) increase the maximum borrowing limit of the revolving credit facility from $150,000 to $250,000;
(iii) extend the maturity date;
(iv) replace the existing maximum total net leverage ratio financial covenant with a maximum senior secured net leverage ratio financial covenant;
(v) eliminate the financial covenant requirement of maintaining a minimum debt service coverage ratio;
(vi) reduce the interest rates applicable to any principal amounts outstanding on the revolving credit facility as well as the annual commitment fee for unused amounts on the revolving credit facility; and
(vii) replace the benchmark reference rate for U.S. Dollar loans from LIBOR to the forward-looking term rate based on the secured overnight financing rate plus a customary adjustment (“Adjusted Term SOFR”).
At December 31, 2023, the Company had available borrowing capacity of $250,000 on the Credit Facility. The Credit Facility will mature on the earlier of (a) March 29, 2027 and (b) 90 days before the maturity date applicable to any outstanding convertible notes issued by the Company in an aggregate principal amount equal to or greater than $100,000.
The Credit Facility is secured by a first-priority security interest in substantially all of the assets of the Company. The Credit Facility contains certain financial and operational covenants, including a maximum senior secured net leverage ratio financial covenant of 3.50x. As of December 31, 2023, the Company was in compliance with all covenants under the Credit Facility.
The per annum interest rate applicable to any principal amounts outstanding under the Credit Facility for U.S. Dollar loans will be equal to (i) Adjusted Term SOFR plus (ii) an applicable margin varying from 1.25% to 2.00%, subject to a pricing grid based on the senior secured net leverage ratio. The Credit Facility provides for an annual commitment fee varying from 0.20% to 0.30%, also subject to a pricing grid based on the senior secured net leverage ratio, applied to the average daily unused amount of the revolving credit facility. The Company incurred commitment fees on the unused balance of the Credit Facility of $506, $477 and $362 for the years ended December 31, 2023, 2022 and 2021, respectively.
In connection with the Credit Facility, the Company incurred $1,295 of additional debt issuance costs which, together with $662 of the then unamortized financing fees, will be amortized over the remaining term of the facility. The Company recognized a loss on extinguishment of debt of $407 for the year ended December 31, 2022. The loss on extinguishment of debt is classified as a non-cash adjustment to reconcile net income to net cash provided by operating activities within the Consolidated Statements of Cash Flows.
Amortization of deferred financing fees was $420, $398 and $2,243 for the years ended December 31, 2023, 2022 and 2021, respectively.
Convertible Notes
In November 2021, the Company issued $1,500,000 aggregate principal amount of Convertible Senior Notes in a private offering, including the exercise in full of the over-allotment option granted to the initial purchasers of $200,000. The Convertible Notes are senior unsecured obligations of the Company and do not bear regular interest, and the principal amount of the Convertible Notes does not accrete. The Convertible Notes will mature on December 1, 2026 unless earlier converted, redeemed, or repurchased. The net proceeds from this offering were $1,461,795, after deducting underwriting fees, expenses and commissions. Amortization of deferred financing fees for the years ended December 31, 2023, 2022 and 2021 was $7,529, $7,481 and $881, respectively.
Each $1 of principal of the Convertible Notes will initially be convertible into 5.6018 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $178.51 per share, subject to adjustment as set forth in the indenture governing the Convertible Notes. Holders of these Convertible Notes may convert their Convertible Notes at their option at any time prior to the close of the business day immediately preceding June 1, 2026, only under the following circumstances:
1.during any calendar quarter commencing after the calendar quarter ending on March 31, 2022, if the last reported sale price of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter on each applicable trading day;
2.during the five business day period after any ten consecutive trading day period (such ten consecutive trading day period, the “measurement period”) in which the trading price of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the common stock on such trading day and the conversion rate on such trading day;
3.if the Company calls such Convertible Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; and
4.upon the occurrence of specified corporate events or distributions on the common stock.
As none of the above circumstances have occurred as of December 31, 2023, the Convertible Notes were not convertible for the fiscal year ended December 31, 2023.
On or after June 1, 2026 until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Notes at the option of the holder regardless of the foregoing circumstances.
Upon conversion of the Convertible Notes, the Company will pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election. It is the Company's current intent to settle the principal amount of the Convertible Notes with common stock.
The Company may redeem for cash all or any portion of the Convertible Notes, at its option, on or after December 2, 2024 and on or before the 25th scheduled trading day immediately before the maturity date, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price then in effect on each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the trading day immediately preceding the date on which the Company provides a notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus any accrued and unpaid special interest and additional interest, if any, to, but excluding, the redemption date.
Upon the occurrence of a fundamental change (as defined in the indenture governing the Convertible Notes), subject to certain conditions, holders may require the Company to repurchase all or a portion of the Convertible Notes for cash at a price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus any accrued and unpaid special interest and additional interest, if any, to, but excluding, the fundamental change repurchase date.
Outstanding Borrowings
As of December 31, 2023, the $1,500,000 aggregate principal of the Convertible Notes is expected to mature on December 1, 2026 with no other payments required prior to that date.
v3.24.0.1
Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases Leases
The Company leases co-location space at data center facilities and, to a lesser extent, corporate offices, all of which are operating leases. Most of the leases have lease terms within three to five years and many contain renewal options and/or termination provisions. As part of the Paperspace acquisition on July 5, 2023, the Company recognized finance leases for data center equipment.
The Company entered into separate sublease agreements related to its New York office space effective as of March 2022 and June 2022, respectively. As defined within the lease and sublease agreements, the Company remains primarily liable to the landlord for the performance of all obligations in the event that the sublessees do not perform their obligations under their respective leases. The rental amounts payable to the Company pursuant to the sublease agreements increase approximately 2% each year, and both the lease and the related subleases terminate in July 2025.
The components of lease expense were as follows:
December 31,
20232022
Finance lease expense:
Amortization of finance lease right-of-use assets$2,656 N/A
Interest on finance lease liabilities410 N/A
Operating lease expense80,639 $54,440 
Variable lease expense11,317 6,149 
Short-term lease expense418 1,799 
Total lease expense$95,440 $62,388 
Supplemental balance sheet information related to leases were as follows:
December 31,
20232022
Finance leases:
Property and equipment, net$9,282 N/A
Other current liabilities5,221 N/A
Other long-term liabilities4,521N/A
Operating leases:
Operating lease right-of-use assets, net$155,201 $153,701 
Operating lease liabilities, current81,320 57,432
Operating lease liabilities, non-current91,161107,693 
Weighted average remaining lease term and discount rate were as follows:
December 31,
20232022
Finance leases:
Weighted-average remaining lease term (in years)2.0N/A
Weighted-average discount rate8%N/A
Operating leases:
Weighted-average remaining lease term (in years)2.72.8
Weighted-average discount rate8%5%
For the years ended December 31, 2023 and 2022, the Company recorded $1,677 and $1,202, respectively, in sublease income for operating leases, which was recorded as a reduction to General and administrative operating expenses. No sublease income was recorded for the year ended December 31, 2021 as the Company entered into separate sublease agreements in 2022.
Maturities of lease liabilities as of December 31, 2023 were as follows:
Finance Leases
Operating Leases(1)
2024$5,838 $87,283 
20253,684 47,630 
2026805 29,403 
2027210 20,116 
202838 1,609 
Total undiscounted lease liabilities10,575186,041
Less: Imputed interest(833)(13,560)
Total present value of lease liabilities9,742172,481
Less: Current portion of lease liabilities(5,221)(81,320)
Lease liabilities, non-current$4,521 $91,161 
___________________
(1)Sublease proceeds for the fiscal years ending December 31, 2024 and 2025 of $2,073 and $1,051, respectively, are not included in the table above.
Leases Leases
The Company leases co-location space at data center facilities and, to a lesser extent, corporate offices, all of which are operating leases. Most of the leases have lease terms within three to five years and many contain renewal options and/or termination provisions. As part of the Paperspace acquisition on July 5, 2023, the Company recognized finance leases for data center equipment.
The Company entered into separate sublease agreements related to its New York office space effective as of March 2022 and June 2022, respectively. As defined within the lease and sublease agreements, the Company remains primarily liable to the landlord for the performance of all obligations in the event that the sublessees do not perform their obligations under their respective leases. The rental amounts payable to the Company pursuant to the sublease agreements increase approximately 2% each year, and both the lease and the related subleases terminate in July 2025.
The components of lease expense were as follows:
December 31,
20232022
Finance lease expense:
Amortization of finance lease right-of-use assets$2,656 N/A
Interest on finance lease liabilities410 N/A
Operating lease expense80,639 $54,440 
Variable lease expense11,317 6,149 
Short-term lease expense418 1,799 
Total lease expense$95,440 $62,388 
Supplemental balance sheet information related to leases were as follows:
December 31,
20232022
Finance leases:
Property and equipment, net$9,282 N/A
Other current liabilities5,221 N/A
Other long-term liabilities4,521N/A
Operating leases:
Operating lease right-of-use assets, net$155,201 $153,701 
Operating lease liabilities, current81,320 57,432
Operating lease liabilities, non-current91,161107,693 
Weighted average remaining lease term and discount rate were as follows:
December 31,
20232022
Finance leases:
Weighted-average remaining lease term (in years)2.0N/A
Weighted-average discount rate8%N/A
Operating leases:
Weighted-average remaining lease term (in years)2.72.8
Weighted-average discount rate8%5%
For the years ended December 31, 2023 and 2022, the Company recorded $1,677 and $1,202, respectively, in sublease income for operating leases, which was recorded as a reduction to General and administrative operating expenses. No sublease income was recorded for the year ended December 31, 2021 as the Company entered into separate sublease agreements in 2022.
Maturities of lease liabilities as of December 31, 2023 were as follows:
Finance Leases
Operating Leases(1)
2024$5,838 $87,283 
20253,684 47,630 
2026805 29,403 
2027210 20,116 
202838 1,609 
Total undiscounted lease liabilities10,575186,041
Less: Imputed interest(833)(13,560)
Total present value of lease liabilities9,742172,481
Less: Current portion of lease liabilities(5,221)(81,320)
Lease liabilities, non-current$4,521 $91,161 
___________________
(1)Sublease proceeds for the fiscal years ending December 31, 2024 and 2025 of $2,073 and $1,051, respectively, are not included in the table above.
Leases Leases
The Company leases co-location space at data center facilities and, to a lesser extent, corporate offices, all of which are operating leases. Most of the leases have lease terms within three to five years and many contain renewal options and/or termination provisions. As part of the Paperspace acquisition on July 5, 2023, the Company recognized finance leases for data center equipment.
The Company entered into separate sublease agreements related to its New York office space effective as of March 2022 and June 2022, respectively. As defined within the lease and sublease agreements, the Company remains primarily liable to the landlord for the performance of all obligations in the event that the sublessees do not perform their obligations under their respective leases. The rental amounts payable to the Company pursuant to the sublease agreements increase approximately 2% each year, and both the lease and the related subleases terminate in July 2025.
The components of lease expense were as follows:
December 31,
20232022
Finance lease expense:
Amortization of finance lease right-of-use assets$2,656 N/A
Interest on finance lease liabilities410 N/A
Operating lease expense80,639 $54,440 
Variable lease expense11,317 6,149 
Short-term lease expense418 1,799 
Total lease expense$95,440 $62,388 
Supplemental balance sheet information related to leases were as follows:
December 31,
20232022
Finance leases:
Property and equipment, net$9,282 N/A
Other current liabilities5,221 N/A
Other long-term liabilities4,521N/A
Operating leases:
Operating lease right-of-use assets, net$155,201 $153,701 
Operating lease liabilities, current81,320 57,432
Operating lease liabilities, non-current91,161107,693 
Weighted average remaining lease term and discount rate were as follows:
December 31,
20232022
Finance leases:
Weighted-average remaining lease term (in years)2.0N/A
Weighted-average discount rate8%N/A
Operating leases:
Weighted-average remaining lease term (in years)2.72.8
Weighted-average discount rate8%5%
For the years ended December 31, 2023 and 2022, the Company recorded $1,677 and $1,202, respectively, in sublease income for operating leases, which was recorded as a reduction to General and administrative operating expenses. No sublease income was recorded for the year ended December 31, 2021 as the Company entered into separate sublease agreements in 2022.
Maturities of lease liabilities as of December 31, 2023 were as follows:
Finance Leases
Operating Leases(1)
2024$5,838 $87,283 
20253,684 47,630 
2026805 29,403 
2027210 20,116 
202838 1,609 
Total undiscounted lease liabilities10,575186,041
Less: Imputed interest(833)(13,560)
Total present value of lease liabilities9,742172,481
Less: Current portion of lease liabilities(5,221)(81,320)
Lease liabilities, non-current$4,521 $91,161 
___________________
(1)Sublease proceeds for the fiscal years ending December 31, 2024 and 2025 of $2,073 and $1,051, respectively, are not included in the table above.
v3.24.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Purchase Commitments
As of December 31, 2023, the Company had long-term commitments for bandwidth usage with various networks and internet service providers and entered into purchase orders with various vendors. The total minimum future commitments for bandwidth usage and purchase orders as of December 31, 2023 were as follows:
2024$21,419 
20256,732 
2026884 
2027957 
2028— 
Thereafter— 
Total purchase commitments$29,992 
Letters of Credit
In conjunction with the execution of certain office space operating leases, letters of credit in the aggregate amount of $1,747 and $1,935 were issued and outstanding as of December 31, 2023 and 2022, respectively. No draws have been made under such letters of credit. These funds are included as Restricted cash on the Consolidated Balance Sheets as they are related to long-term operating leases and are included in beginning and ending Cash, cash equivalents and restricted cash in the Consolidated Statements of Cash Flows. As of December 31, 2023, one letter of credit remained and the deposit currently held is the minimum threshold required until the lease expiration.
Legal Proceedings
The Company may be involved in various legal proceedings and litigation arising in the ordinary course of business. While it is not feasible to predict or determine the ultimate disposition of any such litigation matters, the Company believes that any such legal proceedings will not have a material adverse effect on its consolidated financial position, results of operations, or liquidity.
On September 12, 2023, a putative class action lawsuit was filed in the United States District Court for the Southern District of New York against us and certain of our current and former executive officers for alleged violations of the U.S. federal securities laws. The complaint in the lawsuit, captioned Agarwal v. DigitalOcean Holdings, Inc., et. al. (Case 1:23-cv-08060), asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of a proposed class consisting of those who acquired our common stock between February 16, 2023 and August 25, 2023 (the “Putative Class Period”), and alleged that we made materially false and misleading statements regarding our business during the Putative Class Period. On January 3, 2024, the plaintiff in the federal class action lawsuit voluntarily dismissed the action without prejudice.
On December 12, 2023 and December 14, 2023, respectively, we were named a nominal defendant in two putative stockholder derivative actions filed in the United States District Court for the District of Delaware against our directors and our former chief executive officer and member of the board. The complaints in the two lawsuits, captioned Flanagan v. Spruill, et al. (Case No. 1:23-cv-01424-RGA) and Reynolds v. Spruill, et al. (Case No. 1:23-cv-01433-RGA), alleged, among other things, violations of federal law and breaches of fiduciary duty, in relation to substantially the same factual allegations as the above-described federal class action lawsuit captioned Agarwal v. DigitalOcean Holdings, Inc., et. al. (Case 1:23-cv-08060). On January 12, 2024, the two cases were consolidated. On February 7, 2024, the consolidated action was voluntarily dismissed without prejudice.
v3.24.0.1
Stockholders’ Equity
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Stockholders’ Equity Stockholders’ Equity
Common Stock
The Company’s amended and restated certificate of incorporation authorizes the issuance of common and preferred stock. Holders of common stock are entitled to one vote per share.
As of December 31, 2023 and 2022, the Company was authorized to issue 750,000,000 shares of common stock with a par value of $0.000025 per share.
Preferred Stock
In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 10,000,000 shares of preferred stock with a par value of $0.000025 per share with rights and preferences, including voting rights, designated from time to time by the Company’s Board of Directors. No shares of preferred stock were issued or outstanding as of December 31, 2023 or 2022.
Share Buyback Program
On February 23, 2022, the Company’s Board of Directors approved the repurchase of up to an aggregate of $300,000 of the Company’s common stock throughout fiscal year 2022 (“First 2022 Share Buyback Program”). As of May 16, 2022, the Company repurchased shares representing the entire amount available under the First 2022 Share Buyback Program. On May 23, 2022, the Company’s Board of Directors approved a new stock repurchase program authorizing the repurchase of up to an additional $300,000 of its common stock throughout fiscal year 2022 (the “Second 2022 Share Buyback Program”). As of August 19, 2022, the Company repurchased shares representing the entire amount available under the Second 2022 Share Buyback Program. During the year ended December 31, 2022, the Company repurchased and retired 13,626,594 shares of common stock in the open market for an aggregate purchase price of $600,000 pursuant to the First 2022 Share Buyback Program and Second 2022 Share Buyback Program.
On February 14, 2023, the Company’s Board of Directors approved the repurchase of up to an aggregate of $500,000 of the Company’s common stock (the “2023 Share Buyback Program”). Pursuant to the 2023 Share Buyback Program, repurchases of the Company’s common stock could occur using a variety of methods, which could include but was not limited to open market purchases, the implementation of a 10b5-1 plan, and/or any other available methods in accordance with SEC and other applicable legal requirements. The 2023 Share Buyback Program was authorized throughout fiscal year 2023 and expired on December 31, 2023.
During the year ended December 31, 2023, the Company repurchased and retired 14,487,509 shares of common stock for an aggregate purchase price of $488,455, which excludes the 1% excise tax of $4,884, pursuant to the 2023 Share Buyback Program.
All purchased shares were retired and are reflected as a reduction of Common stock for the par value of shares, with the excess applied to Additional paid-in capital and Accumulated deficit.
v3.24.0.1
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Equity Incentive Plan
In March 2021, the Company’s Board of Directors adopted, and the stockholders approved, the 2021 Equity Incentive Plan. The 2021 Equity Incentive Plan is a successor to and continuation of the 2013 Stock Plan. The 2021 Equity Incentive Plan became effective on the date of the IPO with no further grants being made under the 2013 Stock Plan, however, awards outstanding under the 2013 Stock Plan will continue to be governed by their existing terms. The 2021 Equity Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units awards (“RSUs”), performance awards, and other awards to employees, directors, and consultants. Shares issued pursuant to the exercise of these awards are transferable by the holder.
In February 2023, the Company initiated a restructuring plan to adjust its cost structure and accelerate its timeline to achieve 20% or better adjusted free cash flow margins (the “Restructuring Plan”), which includes both the elimination of positions across the Company as well as the shifting of additional positions across a broader geographical footprint. In connection with the Restructuring Plan, the Company recorded $3,937 of stock-based compensation related to the accelerated vesting of certain restricted stock, performance-based restricted stock units (“PRSUs”), and RSU awards during the year ended December 31, 2023. Refer to Note 15, Restructuring, for further details of the Restructuring Plan.
Stock Options
Stock options granted have a maximum term of ten years from the grant date, are exercisable upon vesting and typically vest over a period of four years. Stock option activity for the year ended December 31, 2023 was as follows:
Number of Options OutstandingWeighted-Average Exercise PriceWeighted-Average Remaining Life in YearsAggregate Intrinsic Value
Outstanding at January 1, 202310,153,916 $7.23 6.16$185,188 
Granted46,799 28.86 
Exercised(6,391,424)6.01 
Forfeited or cancelled(520,272)10.16 
Outstanding at December 31, 20233,289,019 $9.43 4.17$89,671 
Vested and exercisable at December 31, 20232,943,420 8.65 3.8882,531 
Vested and unvested expected to vest at December 31, 20233,242,866 $9.34 4.14$88,697 
The aggregate intrinsic value represents the difference between the fair value of common stock and the exercise price of outstanding in-the-money options. The aggregate intrinsic value of exercised options for the years ended December 31, 2023, 2022 and 2021 was $156,819, $81,912 and $189,422, respectively. The tax benefit from stock options exercised was $108,164, $25,143 and $103,820 for the years ended December 31, 2023, 2022 and 2021, respectively.
During the year ended December 31, 2023, 46,799 options were granted. No options were granted during the years ended December 31, 2022 or 2021. The aggregate estimated fair value of stock options granted to participants that vested during the years ended December 31, 2023 and 2022 was $12,888 and $17,529, respectively.
The following weighted-average assumptions were used to estimate the grant date fair value of stock options issued during the year ended December 31, 2023:
Expected volatility59.30%
Expected life in years10
Risk-free interest rate4.25%
Dividend yield0%
Weighted-average fair value of awards$20.83
As of December 31, 2023, there was $5,216 of unrecognized stock-based compensation related to outstanding stock options granted that is expected to be recognized over a weighted-average period of 0.75 years.
RSUs
RSUs granted typically vest over four years. RSU activity for the year ended December 31, 2023 was as follows:
SharesWeighted-Average Fair Value
Unvested balance at January 1, 20234,802,435 $44.25 
Granted6,110,576 33.77 
Vested(2,042,503)39.95 
Forfeited or cancelled(2,562,009)42.81 
Unvested balance at December 31, 20236,308,499 36.07 
Vested and expected to vest at December 31, 20234,202,720 $36.41 
Forfeitures and cancellations were primarily due to the Restructuring Plan.
As of December 31, 2023, there was $139,430 of unrecognized stock-based compensation related to outstanding RSUs granted that is expected to be recognized over a weighted-average period of 2.77 years.
PRSUs
The Company issued PRSUs which will vest based on the achievement of each award’s established performance targets. PRSU activity for the year ended December 31, 2023 was as follows:
SharesWeighted-Average Fair Value
Unvested balance at January 1, 2023666,122 $57.41 
Granted1,118,528 31.75 
Vested(51,594)41.24 
Forfeited or cancelled(758,954)34.96 
Adjusted by performance factor(436,387)60.72 
Unvested balance at December 31, 2023537,715 $35.25 
At the end of each reporting period, the Company will adjust compensation expense for the PRSUs based on its best estimate of attainment of specified performance metrics. The cumulative effect on current and prior periods of a change in the estimated number of PRSUs that are expected to be earned during the performance period will be recognized as an adjustment to earnings in the period of the revision. Compensation cost in connection with the probable number of shares that will vest will be recognized using the accelerated attribution method.
LTIP PRSUs
The Company grants Long Term Incentive Plan (“LTIP”) PRSUs to certain executives of the Company during the first fiscal quarter of each fiscal year. A percentage of the LTIP PRSUs will become eligible to vest based on the Company’s financial performance level at the end of each fiscal year. The financial performance level is determined as the percentage equal to the sum of the revenue growth percentage and profitability percentage.
The number of LTIP PRSUs received will depend on the achievement of financial metrics relative to the approved performance targets. Depending on the actual financial metrics achieved relative to the target financial metrics throughout the defined performance period of the award, the number of LTIP PRSUs that vest could range from 0% to 200% of the target amount and are subject to the Board of Directors’ approval of the level of achievement against the approved performance targets.
Assuming the minimum performance target is achieved, one-third of the aggregate number of the LTIP PRSUs shall vest on the later of (i) March 1 of the year after grant or (ii) two trading days following the public release of the Company’s financial results, and the remainder shall vest in eight equal quarterly installments subject, in each case, to the individual’s continuous service through the applicable vesting date.
On February 24, 2022, the financial performance of the LTIP PRSUs granted in 2021 was determined to be achieved at 155% of the target amount. This resulted in a performance factor reduction of 89,769 shares from the original maximum shares achievable of 398,949.
On February 16, 2023, it was determined that the financial performance of the LTIP PRSUs granted in 2022 was not achieved. This resulted in a performance factor reduction of 436,387 shares from the original maximum shares achievable of 436,387.
On March 1, 2023, the Company granted an LTIP PRSU award (the “2023 LTIP PRSU”) with a maximum shares achievable of 1,118,528, subject to the actual financial metrics achieved relative to the target financial metrics for fiscal year 2023. As of December 31, 2023, the Company determined that it was probable that a percentage of the 2023 LTIP PRSUs granted with respect to the Company’s 2023 financial performance would vest.
There is $1,121 of unrecognized stock-based compensation that is expected to be recognized over a weighted-average period of 1.21 years in regards to the LTIP PRSUs.
Other PRSUs
In addition to the above awards, certain other PRSUs have been awarded subject to other various performance measures including the achievement of revenue targets.
As part of the Restructuring Plan, 20,000 PRSU shares were deemed achieved and will vest in early fiscal year 2024. This resulted in $1,262 of stock-based compensation, which was included in Restructuring and other charges in the Consolidated Statements of Operations for the year ended December 31, 2023.
During the period ended June 30, 2023, 40,000 PRSUs shares were deemed achieved and will vest in early fiscal year 2024. This resulted in $2,524 of stock-based compensation, which was included in Research and development in the Consolidated Statements of Operations for year ended December 31, 2023.
MRSUs
On July 27, 2021, the Company’s Board of Directors granted a market-based restricted stock unit (“MRSU”) award for 3,000,000 shares of the Company’s common stock to the Company’s former CEO, Yancey Spruill, which will vest upon the satisfaction of certain service conditions and the achievement of certain Company stock price goals, as described below.
The MRSU, which has a grant date fair value of $75,300 derived by using a discrete model based on multiple stock price-paths developed through the use of a Monte Carlo simulation, is divided into five tranches that will be earned based on the achievement of stock price goals, measured based on the average of the Company’s closing stock price over a consecutive ninety trading day period during the performance period as set forth in the table below.
TrancheCompany Stock Price TargetNumber of Eligible MRSUs
1$93.50475,000
2$140.00575,000
3$187.00650,000
4$233.50650,000
5$280.50650,000
To the extent earned based on the stock price targets set forth above, the MRSU will vest over a seven-year period beginning on the date of grant in annual amounts equal to 14%, 14%, 14%, 14%, 14%, 15% and 15%, respectively, on each anniversary of the date of grant.
MRSU activity for the year ended December 31, 2023 was as follows:
SharesWeighted-Average Fair Value
Unvested balance at January 1, 20233,000,000 $25.12 
Granted— — 
Unvested balance at December 31, 20233,000,000 $25.12 
On August 24, 2023, the Company announced its implementation of a leadership succession plan to identify the Company’s next CEO. As a result, none of the MRSUs are expected to vest and $31,279 of recognized stock-based compensation related to the former CEO’s MRSUs was estimated to be forfeited and reversed for the year ended December 31, 2023.
As of December 31, 2023, there was no unrecognized stock-based compensation related to the MRSUs granted remaining to be recognized.
ESPP
In March 2021, the Company’s Board of Directors adopted, and the stockholders approved, the 2021 Employee Stock Purchase Plan (“ESPP”). Eligible employees enroll in the offering period at the start of each purchase period, whereby they may purchase a number of shares at a price per share equal to 85% of the lesser of (1) the stock price at the employee’s first participation in the offering period or (2) the fair market value of the Company’s common stock on the purchase date. After the end of an offering period, a new offering will automatically begin on the date that immediately follows the conclusion of the preceding offering.

2022 Offerings
A new offering period commenced on May 23, 2022 and was scheduled to consist of two purchase periods, with purchase dates of November 18, 2022 and May 19, 2023 (the “First 2022 Offering”). In connection with the purchase period that ended on November 18, 2022, there were 111,851 shares of common stock, net of shares withheld for taxes, purchased by employees at a price of $24.03. Under the terms of the ESPP, since the Company’s stock price on the first day of the purchase period beginning on November 21, 2022 was lower than the stock price at the beginning of the First 2022 Offering, the First 2022 Offering terminated and a new 12 month offering automatically commenced on November 21, 2022, with scheduled purchase dates on May 19, 2023 and November 20, 2023 (the “Second 2022 Offering”). In connection with the purchase period that ended on May 19, 2023, there were 120,348 shares of common stock, net of shares withheld for taxes, purchased by employees at a price of $23.51. In connection with the purchase period that ended on November 20, 2023, there were 92,632 shares of common stock, net of shares withheld for taxes, purchased by employees at a price of either $24.31 or $23.51 depending upon when the employee entered the plan.
The termination of the First 2022 Offering and commencement of the Second 2022 Offering was accounted for as a modification, which resulted in an incremental stock-based compensation of $2,069, which was recognized over the remaining term of Second 2022 Offering.
The Company recorded stock-based compensation associated with the ESPP of $2,290, $4,380 and $3,097 for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, $557 has been withheld on behalf of employees.
Restricted Shares
In connection with the closing of the Nimbella acquisition on September 1, 2021, the Company issued 200,204 shares of restricted stock for $63.11 per share for a total value of $12,635 to the founders of Nimbella. These shares vest equally on March 1, 2023 and September 1, 2024 and are expensed on a straight line basis over 36 months. The restricted stock is subject to forfeiture and dependent upon each founder’s continuous service on the vesting date.
As part of the Restructuring Plan, during the three months ended March 31, 2023, 33,963 shares of restricted stock that were issued to a former founder were vested upon the employee’s departure and $2,147 of stock-based compensation was included in Restructuring and other charges in the Consolidated Statements of Operations for the year ended December 31, 2023.
During the three months ended June 30, 2023, 66,139 shares of restricted stock that were issued to the two remaining founders of Nimbella were vested upon their departure. This resulted in $3,946 of stock-based compensation which was included in Research and development in the Consolidated Statements of Operations for the year ended December 31, 2023.
For the restricted shares, total stock-based compensation was $6,093, $4,212 and $1,407 for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the restricted shares in connection with the Nimbella acquisition have been fully amortized.
Stock-Based Compensation
Stock-based compensation was included in the Consolidated Statements of Operations as follows:
Year Ended December 31,
202320222021
Cost of revenue$1,836 $1,820 $1,147 
Research and development43,315 39,354 23,315 
Sales and marketing15,751 14,909 8,471 
General and administrative23,508 49,746 28,644 
Restructuring and other charges3,937 — — 
Total$88,347 $105,829 $61,577 
Excess income tax benefit related to stock-based compensation$89,272 $27,657 $108,041 
In September 2023, certain executives had the terms of their equity awards amended, which could result in approximately 469,000 awards accelerating up to twelve months in the event the individuals are terminated without cause or resign for good reason, as defined in their amended employment agreement.
v3.24.0.1
Net Income (Loss) per Share Attributable to Common Stockholders
 12 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Net Income (Loss) per Share Attributable to Common Stockholders Net Income (Loss) per Share Attributable to Common Stockholders
The following table presents the calculation of basic and diluted net income (loss) per share:
Year Ended December 31,
(In thousands, except per share amounts)202320222021
Basic net income (loss) per share:
Numerator:
Net income (loss) attributable to common stockholders$19,409 $(27,804)$(19,503)
Denominator:
Weighted average shares used to compute net income (loss) per share90,141 100,806 93,224 
Basic net income (loss) per share attributable to common stockholders$0.22 $(0.28)$(0.21)
Diluted net income (loss) per share:
Numerator:
Net income (loss) attributable to common stockholders
$19,409 $(27,804)$(19,503)
Denominator:
Number of shares used in basic calculation 90,141 100,806 93,224 
Weighted-average effect of diluted securities:
Stock Options
5,698 — — 
RSUs
495 — — 
PRSUs
81 — — 
Number of shares used in diluted calculation
96,415 100,806 93,224 
Diluted net income (loss) per share attributable to common stockholders
$0.20 $(0.28)$(0.21)
Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:
Year Ended December 31,
(In thousands)202320222021
Stock Options41 4 3 
RSUs1,574 434 21 
PRSUs14 — — 
Convertible Notes8,403 8,403 8,403 
Total10,032 8,841 8,427 
v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income (loss) before income taxes from U.S. and foreign operations were as follows:
Year Ended December 31,
202320222021
U.S.$174 $(16,866)$(20,285)
Foreign26,602 (7,019)2,084 
Total income (loss) before income taxes$26,776 $(23,885)$(18,201)
Total income tax expense included in the Consolidated Statements of Operations is comprised of the following:
Year Ended December 31,
202320222021
Current:
Federal$829 $— $— 
State(99)242 138 
Foreign6,835 5,482 1,147 
Total current$7,565 $5,724 $1,285 
Deferred:
Federal$140 $368 $(103)
State(120)44 45 
Foreign(218)(2,217)75 
Total deferred(198)(1,805)17 
Income tax expense$7,367 $3,919 $1,302 
The following table reconciles our benefit of income taxes at the statutory rate to the effective tax rate, using a U.S. federal statutory tax rate of 21%:
Year Ended December 31,
202320222021
Income tax expense (benefit) at federal statutory rate$5,623 $(5,016)$(3,836)
State and local taxes, net of federal benefit(2,509)(205)(239)
Foreign tax rate differential1,030 168 207 
Stock-based compensation deductions(17,998)(3,077)(22,071)
Unrealized loss on warrant liability— — 3,150 
Nondeductible expenses(984)3,603 473 
Unrecognized tax positions1,083 1,482 (40)
Net change in valuation allowance138 4,442 21,969 
Global intangible low-tax income— 427 — 
162(m) limitation17,072 7,058 4,927 
U.S. R&D tax credits(2,810)(4,432)— 
Warrant exercise— — (3,419)
Valuation allowance release related to acquisition(1,074)— — 
Acquisition related compensation7,811 — — 
Other(15)(531)181 
Total income tax expense$7,367 $3,919 $1,302 
The components of deferred tax assets and liabilities are as follows:
December 31,
20232022
Deferred tax assets:
Accounts receivable$1,223 $1,337 
Accrued expenses982 4,288 
Capitalized research and development30,918 32,374 
Operating lease liability 44,443 38,934 
Net operating loss carryforwards28,222 24,435 
Stock-based compensation5,419 953 
Tax credit carryforwards18,338 4,184 
Other989 511 
Gross deferred tax assets130,534 107,016 
Less: valuation allowance(60,520)(47,361)
Total net deferred tax asset$70,014 $59,655 
Deferred tax liability
Depreciation and amortization$(31,808)$(43,137)
Operating lease ROU asset(39,745)(36,524)
Total deferred tax liability(71,553)(79,661)
Total net deferred tax liability$(1,539)$(20,006)
As of December 31, 2023, the Company had approximately $106,734 in federal net operating loss (“NOL”) carryforwards and $23,717 in federal tax credits. If not utilized, the federal tax credit carryforwards will expire at various dates beginning in 2038. The federal NOL carryforward of $106,734 can be carried forward indefinitely. As of December 31, 2023, the Company had approximately $49,307 in state NOL carryforwards and $2,956 in California tax credits. If not utilized, the state NOL carryforwards will expire at various dates beginning in 2025. The California state tax credits can be carried forward indefinitely. The Company had $7,152 of foreign NOLs that do not expire.
The total NOL and expirations are as follows:
NOL Carryforward
Total1-3 Years3-5 YearsMore than 5 YearsUnlimited
Federal$106,734 $— $— $— $106,734 
State and local49,307 168 90 45,066 3,983 
Foreign7,152 — — — 7,152 
Total$163,193 $168 $90 $45,066 $117,869 
Certain tax attributes may be subject to an annual limitation as a result of the issuance of stock, which may constitute a change of ownership as defined under Internal Revenue Code Section 382. The Internal Revenue Code Section 382 study is in process as of December 31, 2023.
The Company assesses the likelihood of its ability to realize the benefit of its deferred tax assets in each jurisdiction by evaluating all relevant positive and negative evidence. A valuation allowance is established if it is determined that any portion of the deferred tax assets is not more likely than not to be realized. For the year ended December 31, 2023, the Company has maintained a valuation allowance against its U.S. deferred tax assets as they are not more-likely than not to be realized.
The valuation allowance activity for the periods indicated is as follows:
December 31,
20232022
Balance as of the beginning of period$(47,361)$(42,919)
Additions charged to expense(13,159)(4,442)
Balance as of the end of period$(60,520)$(47,361)

The Company provides for U.S. and foreign income taxes on the undistributed earnings of foreign subsidiaries unless they are considered indefinitely reinvested outside the U.S. On December 31, 2023, the amount of unrecognized deferred tax liability for temporary differences on undistributed earnings in foreign subsidiaries upon which U.S. and foreign income taxes have not been provided is not material.
In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. The amount of undistributed earnings of non-U.S. subsidiaries at December 31, 2023, as well as the related deferred income tax, if any, is not material.
The Company files U.S. federal income tax returns as well as various state, local, and foreign jurisdictions. As of December 31, 2023, tax years 2017 and later remain open for examination.
ASC 740 clarifies the accounting and reporting for uncertainties in income tax law and prescribes a comprehensive model for financial statement recognition measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. ASC 740 requires that tax effects of an uncertain tax position be recognized only if it is “more likely than not” to be sustained by the taxing authority as of the reporting date.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Year Ended December 31,
202320222021
Balance of unrecognized tax benefits at beginning of year$17,044 $721 $822 
Additions based on tax positions related to the current period1,571 3,014 — 
Additions for tax positions of prior periods1,947 2,833 — 
Additions recorded as part of business combination — 11,106 — 
Reductions for tax positions of prior periods— (630)(101)
Release due to expiration of statute of limitations(225)— — 
Balance of unrecognized tax benefits at end of year$20,337 $17,044 $721 
Amounts included in the balance of unrecognized tax benefits as of December 31, 2023, 2022 and 2021, if recognized, would affect the effective tax rate upon recognition. The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate is $12,755 as of December 31, 2023.
For the year ended December 31, 2023, the Company recognized $3,611 of interest and penalties related to unrecognized tax benefits in the provision for taxes.
The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. The outcomes and timing of such events are highly uncertain. However, the Company’s reasonable estimate of the range of gross unrecognized tax benefits, excluding interest and penalties, that could potentially be reduced during the next twelve months is $20,337.
v3.24.0.1
Restructuring
 12 Months Ended
Dec. 31, 2023
Restructuring and Related Activities [Abstract]  
Restructuring Restructuring
In February 2023, the Company initiated the Restructuring Plan to adjust its cost structure and accelerate its timeline to achieve 20% or better adjusted free cash flow margins, which included both the elimination of positions across the Company as well as the shifting of additional positions across a broader geographical footprint. The aggregate restructuring charges in connection with the Restructuring Plan is approximately $21,000, which was substantially completed by the end of the third quarter of 2023.
The Company recorded Restructuring and other charges of $16,950 for the year ended December 31, 2023 primarily related to one time severance and benefit payments, as well as $3,937 of stock-based compensation related to vesting of certain equity awards. As of December 31, 2023, $133 of these restructuring charges were not yet settled and are included within Other accrued expenses in the Consolidated Balance Sheets. The Company expects substantially all of this liability balance to be settled by the first quarter of fiscal year 2024.
v3.24.0.1
Employee Benefit Plan
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Employee Benefit Plan Employee Benefit Plan
The Company offers U.S. employees a voluntary retirement savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”), which permits employees to elect to contribute a portion of their pre-tax wages to the 401(k) Plan. Under this plan, the Company matches 100% of participants’ contributions up to 3% of compensation and 50% of participants’ contributions between 3% and 5%. For the years ended December 31, 2023, 2022 and 2021, the Company incurred expense of $2,987, $3,846 and $2,963 to the 401(k) Plan, respectively.
v3.24.0.1
Related Party Transactions
 12 Months Ended
Dec. 31, 2023
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
In November 2023, the Company entered into an arrangement with an affiliate (the “related party affiliate”) of Access Industries, a greater than 5% beneficial owner of the Company's common stock at the time of the transaction. Pursuant to this arrangement, the related party affiliate receives referral fees and other related payments in exchange for referring customers to the Company. The agreement expires on March 31, 2029, and can be terminated earlier without penalty if the contractual net revenue minimum commitment has not been met. Referral fees are incurred when the Company collects amounts due from the customer in exchange for services rendered. Other fees paid to the related party affiliate includes fixed payments to be used exclusively for marketing and referral activities as well as certain reimbursable compensation costs. Amounts owed to the related party affiliate are recorded to Sales and marketing in the Consolidated Statements of Operations. During the year ended December 31, 2023, the Company recognized related party affiliate expense of $549, which consist of the marketing and referral activity fee of $224, reimbursable compensation cost of $273, and referral fees of $52.
In connection with the Company’s acquisition of Cloudways, the Company entered into a transition services agreement (as amended, the “Transition Services Agreement”) with Gaditek Associates (“Gaditek”). Our Chief Revenue Officer, Aaqib Gadit, is the former CEO of Cloudways and owns 14.3% of Gaditek. Fees under the Transition Services Agreement are primarily determined on a usage basis. For the years ended December 31, 2023 and 2022, the Company incurred approximately $792 and $300, respectively, in fees to Gaditek pursuant to the Transition Services Agreement. The Transition Services Agreement will expire in June 2024.
v3.24.0.1
Subsequent Events
 12 Months Ended
Dec. 31, 2023
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
Equity Awards
On January 17, 2024, the Company announced the hiring of Padmanabhan Srinivasan to become the Company’s CEO, effective February 12, 2024. As part of his employment agreement, Mr. Srinivasan received an RSU award valued at
$17 million, with 25% of the shares underlying the grant scheduled to vest after approximately one year from his start date and the remaining shares scheduled to vest in 12 equal quarterly installments thereafter, subject to his continuous service.
Mr. Srinivasan also received an MRSU with an estimated grant date fair value of approximately $8 million, which will vest upon the satisfaction of certain service conditions and the achievement of certain Company stock price goals during a five-year performance period, as described below. A cumulative percentage of the MRSU target will be earned based on the achievement of stock price goals, measured based on the average of the Company’s closing stock price over a consecutive 60 trading day period during the performance period as set forth in the table below:
TrancheCompany Stock Price TargetNumber of MRSUs
1$65.00
25% of Target MRSUs
2$100.00
50% of Target MRSUs
3$135.00
100% of Target MRSUs
4$170.00
150% of Target MRSUs
There will be no pro-rata or straight-line interpolation vesting for achievement of a stock price target between the stock price targets, except in the event of a qualifying termination.
If the stock price targets are achieved during the first three years following the grant date (the “First Performance Period”), 50% of the MRSUs eligible to vest will vest on the third anniversary of the grant date and the remaining 50% of the eligible MRSUs will vest on the fifth anniversary of the grant date. Each tranche of MRSUs whose stock price target was not achieved during the First Performance Period that is subsequently achieved during the period between the third anniversary of the grant date and fifth anniversary of the grant date will vest on the fifth anniversary of the grant date.
2024 Share Buyback Program
On February 20, 2024, the Company’s Board of Directors approved the repurchase of up to an aggregate of $140 million of its common stock (“2024 Share Buyback Program”). Pursuant to the 2024 Share Buyback Program, repurchases of the Company’s common stock will be made at prevailing market prices through open market purchases or in negotiated transactions off the market. The repurchase program is authorized through fiscal year 2025; however, the Company is not obligated to acquire any particular amount of common stock and the program may be extended, modified, suspended or discontinued at any time at the Company’s discretion.
v3.24.0.1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Pay vs Performance Disclosure      
Net income (loss) attributable to common stockholders $ 19,409 $ (27,804) $ (19,503)
v3.24.0.1
Insider Trading Arrangements
 3 Months Ended 12 Months Ended
Dec. 31, 2023
shares
Dec. 31, 2023
shares
Trading Arrangements, by Individual    
Material Terms of Trading Arrangement   On November 21, 2023, Plato Partners LLC (an entity substantially owned by Amy Butte, a member of the Company’s board of directors) entered into a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (the “Butte 10b5-1 Plan”). The Butte 10b5-1 Plan contemplates the sale of up to 3,760 shares of the Company’s common stock and 5,220 shares of the Company’s common stock issuable upon the vesting of restricted stock units, which are scheduled to vest in June 2024. The Butte 10b5-1 Plan is expected to become effective on or about February 26, 2024 and is scheduled to terminate upon the earlier of the sale of all shares contemplated under the Butte 10b5-1 Plan or August 20, 2024.
Non-Rule 10b5-1 Arrangement Adopted false  
Rule 10b5-1 Arrangement Terminated false  
Non-Rule 10b5-1 Arrangement Terminated false  
Amy Butte [Member]    
Trading Arrangements, by Individual    
Name Amy Butte  
Title board of directors  
Rule 10b5-1 Arrangement Adopted true  
Adoption Date November 21, 2023  
Arrangement Duration 177 days  
Amy Butte, Trading Arrangement One [Member] | Amy Butte [Member]    
Trading Arrangements, by Individual    
Aggregate Available 3,760 3,760
Amy Butte, Trading Arrangement Two [Member] | Amy Butte [Member]    
Trading Arrangements, by Individual    
Aggregate Available 5,220 5,220
v3.24.0.1
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Basis of Presentation and Principles of Consolidation
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include accounts of the Company and all wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Reclassifications
Reclassifications
Certain prior year amounts on the Consolidated Statements of Cash Flows have been reclassified and revised to conform to the current year presentation. Such reclassifications did not affect total revenues, operating income, or net income.
Use of Estimates
Use of Estimates
The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make, on an ongoing basis, estimates, judgments and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Such estimates include, but are not limited to, those related to revenue recognition, accounts receivable and related reserves, useful lives and realizability of long lived assets, capitalized internal-use software development costs, accounting for stock-based compensation including estimation of the probability of performance vesting conditions, the incremental borrowing rate we use to determine lease liabilities, valuation allowances against deferred tax assets, fair value of financial instruments, and the fair value and useful lives of tangible and intangible assets acquired and liabilities assumed resulting from business combinations. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Cash and Cash Equivalents
Cash and Cash Equivalents
Cash and cash equivalents consist of highly liquid investments in money market funds, commercial paper and certificates of deposit, with original maturities from the date of purchase of three months or less. The carrying amounts of cash and cash equivalents approximate fair value because of the short-term maturity and highly liquid nature of these instruments.
Marketable Securities
Marketable Securities
The Company’s marketable securities consist of commercial paper, U.S. treasury securities and commercial debt securities. The Company determines the appropriate classification of its marketable securities at the time of purchase and
reevaluates such designation at each balance sheet date. The Company has classified and accounted for its marketable securities as available-for-sale securities as the Company may sell these securities at any time for use in its current operations or for other purposes, even prior to maturity. As a result, the Company classifies its marketable securities within Current assets on the Consolidated Balance Sheets.
Available-for-sale securities are recorded at fair value each reporting period. Premiums and discounts are amortized or accreted over the life of the related available-for-sale security as an adjustment to yield using the effective interest method. Interest income is recognized when earned. Unrealized gains and losses on these marketable securities are presented net of tax and reported as a separate component of Accumulated other comprehensive loss until realized. Realized gains and losses are determined based on the specific identification method and are reported in Other income (expense), net in the Consolidated Statements of Operations.
The Company periodically evaluates its marketable securities to assess whether an investment’s fair value is less than its amortized cost basis and if the decline in the fair value is attributable to a credit loss. Declines in fair value judged to be related to credit loss are reported in Other income (expense), net in the Consolidated Statements of Operations.
Foreign Currency
Foreign Currency
The reporting currency of the Company is the United States dollar (“USD”). The functional currency of the Company is USD, and the functional currency of the Company’s subsidiaries is primarily the local currency of the jurisdiction in which the foreign subsidiary is located. The assets and liabilities of the Company’s subsidiaries are translated to USD at exchange rates in effect at the balance sheet date. All income statement accounts are translated at monthly average exchange rates. Resulting foreign currency translation adjustments are recorded directly in Accumulated other comprehensive loss.
Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in Other income (expense), net on the Consolidated Statements of Operations when realized.
Restricted Cash
Restricted Cash
The following table reconciles cash, cash equivalents and restricted cash per the Consolidated Statements of Cash Flows:
December 31,
20232022
Cash and cash equivalents$317,236 $140,772 
Restricted cash included in Prepaid expenses and other current assets(1)
— 9,100 
Restricted cash(2)
1,747 1,935 
Total cash, cash equivalents and restricted cash$318,983 $151,807 
___________________
(1)Includes contingent compensation related to the Cloudways acquisition, which was paid on September 1, 2023.
(2)Includes deposits in financial institutions related to letters of credit used to secure lease agreements.
Accounts Receivable Net of Allowance for Expected Credit Losses
Accounts Receivable Net of Allowance for Expected Credit Losses
Accounts receivable primarily represents revenue recognized that was not invoiced at the balance sheet date and is primarily billed and collected in the following month. Trade accounts receivable are carried at the original invoiced amount less an estimated allowance for expected credit losses based on the probability of future collection. Management determines the adequacy of the allowance based on historical loss patterns, the number of days that customer invoices are past due, reasonable and supportable forecasts of future economic conditions to inform adjustments over historical loss data, and an evaluation of the potential risk of loss associated with specific accounts. When management becomes aware of circumstances that may further decrease the likelihood of collection, it records a specific allowance against amounts due, which reduces the receivable to the amount that management reasonably believes will be collected. The Company records changes in the estimate to the allowance for expected credit losses through provision for expected credit losses and reverses the accounts receivable and related allowance after the potential for recovery is considered remote.
Fair Value of Financial Instruments
Fair Value of Financial Instruments
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers the principal or most advantageous market in which to transact and the market-based risk. The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The carrying amounts reported in the consolidated financial statements approximate the fair value for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses due to their short-term nature.
Property and Equipment
Property and Equipment
Property and equipment is stated at cost, net of accumulated depreciation. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets and is included in depreciation and amortization expense in the Consolidated Statements of Operations. The Company includes the amortization of assets that are recorded under finance leases in depreciation expense. The estimated useful lives of property and equipment are as follows:
Property and Equipment CategoryUseful Life
Computers and equipment5 years
Furniture and fixtures5 years
Leasehold improvementsLesser of lease term or remaining useful life
Internal-use software3 years
Equipment under finance leasesLesser of lease term or remaining useful life
The Company periodically reviews the estimated useful lives of property and equipment.
Leases
Leases
The Company leases co-location space at data center facilities and, to a lesser extent, corporate offices, all of which are operating leases. The finance leases are for data center equipment. The Company determines if an arrangement is a lease at contract inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and current and noncurrent operating lease liabilities. Finance lease ROU assets, net of amortization are included in Property and equipment, net, and finance lease liabilities are included in Other current liabilities and Other non-current liabilities on the Company’s Consolidated Balance Sheets.
ROU assets represent the Company’s right to use an underlying asset for the lease term and the corresponding lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the unpaid lease payments over the lease term. Lease payments used to measure lease liabilities include fixed lease payments at the lease commencement date, including rental escalation provisions. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the lease terms and economic environment at commencement date in determining the present value of future payments. The ROU asset is measured as the amount of the initial lease liability and adjusted for initial direct costs, lease payments made at or before the commencement date, and reduced by tenant incentives received. The Company does not include options for renewal periods or periods beyond the termination dates in the lease in the measurement of ROU assets and lease liabilities until it is reasonably certain that those options will be exercised based on management's assessment of various relevant factors including economic, entity specific, and market-based factors among others.
The Company has lease agreements with lease and non-lease components, which it has elected to combine for all asset classes. The non-lease components of operating leases primarily consist of power. Fixed payments for non-lease components are considered part of the lease component and included in the measurement of the ROU assets and liabilities, and variable payments are expensed as incurred. Variable lease payments generally relate to non-lease components above a contractual minimum fixed amount.
Lease expenses for lease payments under operating leases are recognized on a straight-line basis over the lease term. The Company’s operating lease costs for co-location data center facilities are included in Cost of revenue in the Consolidated Statements of Operations and the operating lease costs for corporate offices are included in General and administrative expenses in the Consolidated Statements of Operations. Amortization expense of finance lease ROU assets is recognized on a straight-line basis over the lease term of one to five years, and interest expense for finance lease liabilities is recognized under the effective interest rate method based on the incremental borrowing rate. The Company includes the amortization of assets that are recorded under finance leases in depreciation expense included in Cost of revenue on the Company’s Consolidated Statements of Operations. Interest expense is included in Other income (expense), net on the Company’s Consolidated Statements of Operations. For leases with a term of 12 months or less (short-term leases), the Company elected to not recognize the ROU asset or lease liability and the lease payments are recognized in the Consolidated Statements of Operations on a straight-line basis over the lease term.
Capitalization of Internal-Use Software Development Costs
Capitalization of Internal-Use Software Development Costs
Capitalization of costs incurred in connection with software developed for internal-use commences when both the preliminary project stage is completed and management has authorized further funding for the project, based on a determination that it is probable the project will be completed and used to perform the function intended. Capitalized costs include external consulting fees, payroll and payroll-related costs, and stock-based compensation for employees on development teams who are directly associated with, and who devote time to, internal-use software projects during the application development stage. Capitalization of such costs ceases no later than the point at which the project is substantially complete and ready for its intended use. Costs incurred during the planning, training, and post-implementation stages of the software development lifecycle are expensed as incurred and have been included in Research and development expense on the Consolidated Statements of Operations.
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets
Long-lived assets, including property and equipment, intangible assets with definite lives and ROU assets, are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable. For assets that are to be held and used, impairment is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value.
The Company decided to cease the use of a portion of its leased New York office space in 2022 and entered into two separate subleases agreements with third party subtenants, in which the sublease income is less than the original lease payments indicating impairment.
Business Combinations
Business Combinations
The Company applies the provisions of ASC 805, Business Combinations (“ASC 805”), in accounting for acquisitions. ASC 805 requires that the Company evaluates whether a transaction pertains to an acquisition of assets or to an acquisition of a business. A business is defined as an integrated set of assets and activities that is capable of being conducted and managed for the purpose of providing a return to investors. Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets and liabilities assumed on a relative fair value basis; whereas the acquisition of a business requires the Company to recognize separately from goodwill the assets acquired and the liabilities assumed at the acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at
the acquisition date as well as any contingent consideration, where applicable, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the business acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of a business acquisition’s measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations.
Accounting for business combinations requires the Company to make significant estimates and assumptions, especially at the acquisition date, to determine the fair value of assets acquired and liabilities assumed, including the selection of valuation methodologies, estimates of future revenue and cash flows and discount rates in determining the fair value of intangible assets. Although the Company believes that the assumptions and estimates made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. The assets purchased and liabilities assumed have been reflected on the Company’s Consolidated Balance Sheets, and the results are included on the Consolidated Statements of Operations and Consolidated Statements of Cash Flows from the date of acquisition. Acquisition-related transaction costs, including legal and accounting fees and other external costs directly related to the acquisition, are recognized separately from the acquisition and expensed as incurred in General and administrative on the Consolidated Statements of Operations.
In addition, uncertain tax positions and tax related valuation allowances assumed in a business combination are initially estimated as of the acquisition date. The Company reevaluates these items quarterly based upon facts and circumstances that existed as of the acquisition date with any adjustments to our preliminary estimates being recorded to goodwill if identified within the measurement period. Subsequent to the measurement period or the final determination of the tax allowance’s or contingency’s estimated value, whichever comes first, changes to these uncertain tax positions and tax related valuation allowances will affect the provision for income taxes in our consolidated statement of operations and could have a material impact on the results of operations and financial position.
Goodwill and Indefinite-Lived Intangible Assets and Intangible Assets
Goodwill and Indefinite-Lived Intangible Assets
Goodwill is an asset representing the future economic benefit arising from other assets acquired in a business combination which are not individually identified and separately recognized. The Company does not amortize goodwill. Goodwill has resulted from the acquisitions of Nanobox, Inc. (“Nanobox”) on April 4, 2019, Nimbella Corp. (“Nimbella”) on September 1, 2021, Cloudways Ltd. (“Cloudways”) on September 1, 2022, and Paperspace Co. (“Paperspace”) on July 5, 2023, as discussed in Note 3. Goodwill was $348,322 and $315,168 as of December 31, 2023 and 2022, respectively, and represents the excess purchase price over the fair value of identifiable net assets acquired in a business combination. As of December 31, 2023, the Company has a single reporting unit.
Goodwill is reviewed for impairment on an annual basis as of October 1st of each year, or more frequently if a triggering event occurs. The Company performs an assessment of goodwill utilizing either a qualitative or quantitative impairment test. The qualitative impairment test assesses several factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its respective carrying amount. If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its respective carrying amount, a quantitative fair value test is performed. Alternatively, the Company may elect to proceed directly to the quantitative impairment test. In a quantitative impairment test, the Company compares the carrying amount of the reporting unit to its fair value. If the carrying amount of the reporting unit exceeds its fair value, an impairment charge is recognized for the amount by which the carrying amount of the reporting unit exceeds its fair value, up to the amount of goodwill of the reporting unit.
Indefinite-lived intangible assets consist of Internet Protocol (“IP”) addresses needed for customers to host their server online. The Company evaluates these indefinite-lived intangible assets for impairment on an annual basis as of October 1st of each year and whenever events or changes in circumstances indicate that an impairment may exist. Intangible assets with indefinite lives were $44,821 as of December 31, 2023 and 2022 and are included as Intangible assets on the Consolidated Balance Sheets.
The Company performs an assessment of indefinite-lived intangible assets utilizing either a qualitative or quantitative impairment test. The qualitative impairment test assesses several factors to determine whether it is more likely than not that the fair value of the assets are less than its respective carrying amounts. If the Company concludes it is more likely than not that the fair value of the assets are less than its respective carrying amounts, a quantitative fair value test is performed. Alternatively, the Company may elect to proceed directly to the quantitative impairment test. Recoverability of
assets held and used is measured by comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds these estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceeds the fair value of the asset or asset group, based on discounted cash flows.
No impairment charges for goodwill and indefinite-lived intangible assets have been recorded during the years ended December 31, 2023, 2022 or 2021.
Intangible Assets
Intangible assets with definite lives consist of acquired developed technology, trade name, customer relationships, content and brand. Intangible assets with definite lives are stated at cost less accumulated amortization and are amortized on a basis consistent with the timing and pattern of expected cash flows used to value the intangible asset, generally on a straight-line basis over the useful life of three to ten years.
Revenue Recognition and Cost of Revenue
Revenue Recognition
The Company recognizes revenue in accordance with FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”).
The Company accounts for revenue using the following steps:
1. Identify the contract with a customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to performance obligations in the contract
5. Recognize revenue when or as we satisfy a performance obligation
The Company provides cloud computing services, including IaaS, PaaS, SaaS and AI/ML, to its customers. The Company recognizes revenue based on the customer utilization of these resources. Customer contracts are typically month-to-month and do not include any minimum guaranteed quantities or fees. Fees are billed monthly, and payment is typically due upon invoicing. Revenue is recognized net of allowances for credits and any taxes collected from customers.
The Company’s global cloud platform is supported by various third parties. The Company considered the principal versus agent guidance in ASC 606 and concluded that it is the principal for all services provided to its customers.
The Company may offer sales incentives in the form of promotional and referral credits, and grant credits to encourage customers to use the Company’s services. These types of promotional and referral credits typically expire in two months or less if not used. For credits earned with a purchase, they are recorded as contract liabilities when earned and recognized at the earlier of redemption or expiration. The majority of credits are redeemed in the month they are earned.
Timing of revenue recognition may differ from the timing of invoicing to the Company’s customers. The Company records a receivable when revenue is recognized prior to invoicing. Any payments received in advance of billing are a contract liability, which is recorded as Deferred revenue within Total current liabilities on the Consolidated Balance Sheets. Revenue recognized during the years ended December 31, 2023, 2022 and 2021, which was included in the Deferred revenue balances at the beginning of each respective period, was $3,674, $2,894 and $2,672, respectively.
Cost of Revenue
Cost of revenue consists primarily of fees related to operating in third-party co-location facilities, personnel expenses for those directly supporting our data centers and non-personnel costs, including amortization of acquired technology, amortization of capitalized internal-use software development costs, and depreciation of our data center equipment. Third-party co-location facility costs include data center rental fees, power costs, maintenance fees, network and bandwidth. Personnel expenses include salaries, bonuses, benefits, and stock-based compensation.
Research and Development Expense
Research and Development Expenses
Research and development expenses consist primarily of personnel costs including salaries, bonuses, benefits and stock-based compensation. Research and development expenses also include amortization of capitalized internal-use software development costs for research and development activities, which are amortized over three years, and professional
services, as well as costs related to our efforts to add new features to our existing offerings, develop new offerings, and ensure the security, performance, and reliability of our global cloud platform.
Sales, Marketing, General, Administrative, Restructuring, Advertising, and Other Promotional Expenses/Costs
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of personnel costs of our sales, marketing and customer support employees including salaries, bonuses, benefits and stock-based compensation. Sales and marketing expenses also include costs for marketing programs, commissions, advertising and professional service fees.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel costs of our human resources, legal, finance and other administrative functions including salaries, bonuses, benefits, and stock-based compensation. General and administrative expenses also include provision for expected credit losses, software, payment processing fees, business insurance, depreciation and amortization expenses, rent and facilities costs, impairment of long-lived assets, acquisition related compensation, and other administrative costs.
Restructuring and other charges
The Company records restructuring expenses when management commits to a restructuring plan, the restructuring plan identifies all significant actions, the period of time to complete the restructuring plan indicates that significant changes to the plan are not likely, and employees who are impacted have been notified.
Restructuring and other charges consist primarily of personnel costs, such as notice period, employee severance payments and termination benefits, as well as stock-based compensation related to vesting of certain equity awards.
Advertising and Other Promotional Costs
Advertising and other promotional costs are expensed as incurred and are included in Sales and marketing on the Consolidated Statements of Operations.
Income Taxes
Income Taxes
The Company accounts for income taxes pursuant to the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future. Such deferred income tax assets and liabilities are based on enacted tax laws and rates applicable to periods in which the differences are expected to affect taxable income. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. Federal, state, and foreign income taxes are provided based on statutory rates.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law. The Tax Act requires an entity to make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to Global Intangible Low Taxed Income (“GILTI”) as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into an entity’s measurement of its deferred taxes (the “deferred method”). The Company has elected to treat taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred using the period cost method.
The Company accounts for uncertainty in income taxes using a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by the taxing authorities. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate audit settlement.
The Company recognizes interest and penalties, if any, associated with income tax matters as part of income tax expense on the Consolidated Statements of Operations and includes accrued interest and penalties with the related income tax liability in Other current liabilities on the Consolidated Balance Sheets.
Segment Information
Segment Information
The Company’s chief operating decision maker, the chief executive officer, reviews discrete financial information presented on a consolidated basis for purposes of regularly making operating decisions, allocation of resources, and assessing financial performance. Accordingly, the Company has one operating and reporting segment.
Concentration of Credit Risk
Concentration of Credit Risk
The amounts reflected in the consolidated balance sheets for cash and cash equivalents, marketable securities, restricted cash, and trade accounts receivable are exposed to concentrations of credit risk. Although the Company maintains cash and cash equivalents with multiple financial institutions, the deposits, at times, may exceed federally insured limits. The Company believes that the financial institutions that hold its cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with respect to these balances.
The Company’s customer base consists of a significant number of geographically dispersed customers. No customer represented 10% or more of accounts receivable, net as of December 31, 2023 and 2022. Additionally, no customer accounted for 10% or more of total revenue during the years ended December 31, 2023, 2022 and 2021, respectively.
Stock-Based Compensation
Stock-Based Compensation
Stock Options
Compensation expense related to stock-based transactions, including employee, consultant, and non-employee director stock option awards, is measured and recognized, net of estimated forfeitures, in the Consolidated Statements of Operations based on fair value. The fair value of each option award is estimated on the grant date using the Black Scholes option-pricing model. Expense is recognized on a straight-line basis over the requisite service period. The option-pricing model requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the expected term of the option, the expected volatility of the price of the Company’s common stock, risk-free interest rates, and the expected dividend yield of the Company’s common stock. The assumptions used in the option-pricing model represent management’s best estimates.
Expected volatility is a measure of the amount by which the stock price is expected to fluctuate. Since the Company has limited trading history of its common stock at the time of issuing stock options, the Company estimates the
expected volatility of its stock options at the grant date by taking the average historical volatility of a group of comparable publicly traded companies, as well as the Company’s historical volatility, over a period equal to the expected life of the options.
The Company determined the expected term based on the average period the stock options that were expected to remain outstanding using the simplified method, generally calculated as the midpoint of the stock options’ vesting term and contractual expiration period, as the Company did not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.
The Company uses the U.S. Treasury yield for our risk-free interest rate that corresponds with the expected term. The Company utilizes a dividend yield of zero, as the Company does not currently issue dividends, nor does the Company expect to do so in the future.
The Company measures stock options granted to employees and directors based on their fair value on the date of the grant and recognize compensation expense of those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. The Company applies the straight‑line method of expense recognition to all awards with only service based vesting conditions.
Stock-based compensation for non-employee stock options is calculated using the Black-Scholes option pricing model and is recorded as the options vest.
Restricted Stock Units
The Company grants restricted stock units (“RSUs”) as incentive awards to its employees. RSUs are payable in shares of the Company’s common stock as the periodic vesting requirements are satisfied. The value of RSUs is determined using the intrinsic value method and is based on the number of shares granted and the valuation of the Company’s common stock on the date of grant.
Performance-Based Restricted Stock Units
The Company grants performance-based restricted stock units (“PRSUs”) primarily to members of the executive team and, in limited instances, to other employees in connection with a specific transaction. PRSUs have vesting conditions based on pre-established performance goals of the Company. The fair value is determined based on the closing quoted price of the Company’s common stock on the grant date and the fair value is recognized using the graded-vesting attribution method over the requisite service period. We evaluate the probability of meeting the performance criteria at each balance sheet date. Changes to the probability assessment and the estimate of shares expected to vest will result in adjustments to the related stock-based compensation that will be recorded in the period of change.
Market-Based Restricted Stock Units
The Company has granted market-based restricted stock units (“MRSUs”) to its chief executive officer. The stock-based compensation for market-based restricted stock units is measured at fair value on the date of grant. The market conditions are considered in the grant date fair value using a Monte Carlo valuation model, which utilizes multiple input variables to determine the probability of the Company achieving the specified market conditions. Stock-based compensation related to an award with a market condition will be recognized over the requisite service period regardless of whether the market condition is satisfied, provided that the requisite service period has been completed.
Employee Stock Purchase Plan
The Company offers an Employee Stock Purchase Plan (“ESPP”) that permits eligible employees to purchase shares of the Company’s common stock at a discount. The fair value of awards under the ESPP is calculated at the beginning of each offering period. The Company estimates the fair value of the awards using the Black-Scholes option valuation model. The Black-Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and the offering period. This fair value is then amortized on a straight-line basis over the offering period. Stock-based compensation is based on awards expected to be purchased at the beginning of the offering period, and therefore is reduced when participants withdraw during the offering period.
Net Income (Loss) per Share Attributable to Common Stockholders
Net Income (Loss) per Share Attributable to Common Stockholders
Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Prior to the conversion of the convertible preferred stock in connection with the IPO, holders of Series Seed, Series A-1, Series B and Series C convertible preferred stock were each entitled to receive non-cumulative dividends payable prior and in preference to any dividends on any shares of the Company’s common stock. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. The holders of the convertible preferred stock did not have a contractual obligation to share in the losses of the Company. As such, the Company’s net losses for the year ended December 31, 2021 were not allocated to these participating securities.
Basic earnings per share is computed by dividing net income or loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income or loss attributable to common stockholders, adjusted for interest expense on dilutive convertible notes, by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities, if any, outstanding during the period.
Basic and diluted net loss per common share attributable to common stockholders is presented in conformity with the treasury stock method required for stock-based compensation, and in conformity with the if-converted method required for the convertible notes. Nonvested market and performance-based share awards are included in the weighted-average diluted shares outstanding each period if established market or performance criteria have been met at the end of the respective periods.
Potential shares related to certain of the Company’s outstanding stock options, restricted stock units and convertible notes were excluded because they were anti-dilutive, however, those potential shares could be dilutive in the future. Potentially dilutive securities whose effect would have been antidilutive are excluded from the computation of diluted earnings per share for periods in which the Company is in a loss position.
Recent Accounting Pronouncements – Pending Adoption and Adopted
Recent Accounting Pronouncements – Pending Adoption
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold. Further, ASU 2023-09 requires certain disclosures of state versus federal income tax expense and taxes paid. The amendments in ASU 2023-09 are required to be adopted for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued. The amendments should be applied on a prospective basis although retrospective application is permitted. The Company is currently evaluating the impact of adoption on our financial disclosures.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024, with early application permitted. The Company is currently evaluating the impact of adopting ASU 2023-07 on its consolidated financial statements and disclosures.
v3.24.0.1
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Reconciliation of Cash and Cash Equivalents
The following table reconciles cash, cash equivalents and restricted cash per the Consolidated Statements of Cash Flows:
December 31,
20232022
Cash and cash equivalents$317,236 $140,772 
Restricted cash included in Prepaid expenses and other current assets(1)
— 9,100 
Restricted cash(2)
1,747 1,935 
Total cash, cash equivalents and restricted cash$318,983 $151,807 
___________________
(1)Includes contingent compensation related to the Cloudways acquisition, which was paid on September 1, 2023.
(2)Includes deposits in financial institutions related to letters of credit used to secure lease agreements.
Reconciliation of Restricted Cash
The following table reconciles cash, cash equivalents and restricted cash per the Consolidated Statements of Cash Flows:
December 31,
20232022
Cash and cash equivalents$317,236 $140,772 
Restricted cash included in Prepaid expenses and other current assets(1)
— 9,100 
Restricted cash(2)
1,747 1,935 
Total cash, cash equivalents and restricted cash$318,983 $151,807 
___________________
(1)Includes contingent compensation related to the Cloudways acquisition, which was paid on September 1, 2023.
(2)Includes deposits in financial institutions related to letters of credit used to secure lease agreements.
Disclosure of Changes in Allowance for Doubtful Accounts
The following table presents the changes in our allowance for expected credit losses for the period presented:
December 31,
20232022
Beginning balance$6,099 $4,212 
Provision for expected credit losses15,357 16,551 
Write-offs and other(15,608)(14,664)
Ending balance$5,848 $6,099 
Schedule of Property and Equipment Useful Lives The estimated useful lives of property and equipment are as follows:
Property and Equipment CategoryUseful Life
Computers and equipment5 years
Furniture and fixtures5 years
Leasehold improvementsLesser of lease term or remaining useful life
Internal-use software3 years
Equipment under finance leasesLesser of lease term or remaining useful life
Property and equipment, net consisted of the following:
December 31,
20232022
Computers and equipment$657,505 $564,763 
Furniture and fixtures1,511 1,511 
Leasehold improvements6,820 6,820 
Internal-use software84,279 78,649 
Equipment under finance leases11,938 — 
Property and equipment, gross$762,053 $651,743 
Less: accumulated depreciation$(387,083)$(317,329)
Less: accumulated amortization (69,526)(61,244)
Property and equipment, net $305,444 $273,170 
Revenue by Geographic Areas
Revenue, as determined based on the billing address of the Company’s customers, was as follows:
Year Ended December 31,
202320222021
North America37 %38 %38 %
Europe29 %30 %30 %
Asia24 %22 %22 %
Other10 %10 %10 %
Total100 %100 %100 %
Long-lived Assets by Geographic Areas
Long-lived assets includes property, equipment and leases. The geographic locations of the Company’s long-lived assets, net, based on physical location of the assets is as follows:
December 31,
20232022
United States$233,557 $206,118 
Singapore43,425 60,307 
Germany
62,224 50,274 
Netherlands
46,170 35,951 
Other
75,269 74,221 
Total$460,645 $426,871 
v3.24.0.1
Acquisitions, Goodwill and Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
Schedule of Purchase Price Allocation
The following table sets forth the allocation of the purchase price for the business combination and summarizes the fair values of the assets acquired and liabilities assumed at the Paperspace Acquisition Date:
Amount
Fair value of consideration transferred
Cash consideration$100,399 
Recognized amounts of identifiable assets acquired and liabilities assumed
Tangible assets acquired:
Cash and cash equivalents$1,376 
Accounts receivable1,042 
Prepaid expenses and other current assets193 
Property and equipment, net4,515 
Operating right-of-use asset, net4,398 
Finance lease right-of-use asset, net11,958 
Other assets
367 
Intangible assets37,690 
Liabilities assumed:
Accounts payable and accrued expenses(1,445)
Deferred revenue(105)
Operating lease liabilities, current(1,475)
Operating lease liabilities, non-current(2,923)
Finance lease liabilities, current(5,707)
Finance lease liabilities, non-current(6,251)
Deferred tax liabilities(1,074)
Total identifiable net assets acquired42,559 
Goodwill recorded in acquisition57,840 
Total purchase price allocation$100,399 
The following table sets forth the components and the allocation of the purchase price for the business combination and summarizes the fair values of the assets acquired and liabilities assumed at the Cloudways Acquisition Date:
Amount
Fair value of consideration transferred
Cash paid to Cloudways sellers$278,187 
Cash contributed to escrow accounts42,000 
Other expenses150 
Less: Cash pre-funded from contingent compensation(9,100)
Total consideration paid $311,237 
Recognized amounts of identifiable assets acquired and liabilities assumed
Tangible assets acquired:
Cash and cash equivalents$5,827 
Accounts receivable 4,753 
Prepaid expenses and other current assets 547 
Other assets9 
Intangible assets72,000 
Liabilities assumed:
Accounts payable(1,820)
Accrued expenses(957)
Deferred revenue(1,013)
Deferred tax liabilities(3,417)
Other current liabilities(23,243)
Total identifiable net assets acquired52,686 
Goodwill recorded in acquisition258,551 
Total purchase price allocation$311,237 
Schedule of Intangible Assets Acquired The fair values allocated to the identifiable intangible assets and their estimated useful lives are as follows:
Estimated Fair ValueWeighted Average Useful Life (years)
Trademark/Trade Name$300 1
Developed Technology24,120 5
Customer Relationships13,270 5
Total intangible assets$37,690 
The fair values allocated to the identifiable intangible assets and their estimated useful lives are as follows:
Estimated Fair ValueWeighted Average Useful Life (years)
Trade name$9,500 10
Developed technology31,500 5
Customer relationships31,000 7
Total intangible assets$72,000 
Schedule of Pro Forma Information
The unaudited pro forma information below summarizes the combined results of the Company and Paperspace as if the Company’s acquisition of Paperspace closed on January 1, 2022 but does not necessarily reflect the combined actual results of operations of the Company and Paperspace that would have been achieved, nor are they necessarily indicative of future results of operations. The unaudited pro forma information reflects certain adjustments that were directly attributable to the acquisition of Paperspace, including additional amortization of acquired assets and the timing of nonrecurring acquisition and integration related costs, and other adjustments the Company believes are reasonable for the pro forma presentation. If Paperspace had been acquired on January 1, 2022 and included in the Company’s results for 2022 and 2023, it would not have had a material impact to revenue.
Pro Forma for the
Year Ended December 31,
20232022
Net loss$(280)$(61,802)
The unaudited pro forma information below summarizes the combined results of the Company and Cloudways as if the Company’s acquisition of Cloudways closed on January 1, 2021 but does not necessarily reflect the combined actual results of operations of the Company and Cloudways that would have been achieved, nor are they necessarily indicative of future results of operations. The unaudited pro forma information reflects certain adjustments that were directly attributable to the acquisition of Cloudways, including additional amortization adjustments for the fair value of the assets acquired and liabilities assumed and other adjustments the Company believes are reasonable for the pro forma presentation. The pro forma net loss for the year ended December 31, 2022 was adjusted to exclude nonrecurring acquisition related costs of $2,139.
Pro Forma for the
Year Ended December 31,
20222021
Revenue$607,191 $459,845 
Net loss(20,780)(53,227)
Schedule of Movements in Goodwill
Movements in goodwill during the years ended December 31, 2023 and 2022 were as follows:
Balance at January 1, 2022$32,170 
Acquisition of Cloudways283,237
Measurement period adjustment(1)
(239)
Balance at December 31, 2022315,168
Acquisition of Paperspace57,840 
Measurement period adjustments(2)
(24,686)
Balance at December 31, 2023
$348,322 
___________________
(1)The Company finalized and adjusted the purchase price for the Nimbella acquisition to reflect a decrease of $239 to Goodwill related to the final 2021 pre-acquisition tax return.
(2)The Company finalized and adjusted the purchase price for the Cloudways acquisition as discussed above.
Schedule of Intangible Assets and Goodwill
Intangible assets, net consisted of the following amounts:
December 31,
20232022
Asset Type
IP addresses$44,821 $44,821 
Developed technology62,330 35,710 
Customer relationships44,270 31,000 
Trade name9,800 9,500 
Content4,400 4,400 
Brand1,000 1,000 
Total carrying value$166,621 $126,431 
Accumulated Amortization
Developed technology$(14,737)$(4,477)
Customer relationships(7,203)(1,476)
Trade name(1,413)(317)
Content(2,534)(1,067)
Brand(583)(166)
Total accumulated amortization(26,470)(7,503)
Total intangible assets, net$140,151 $118,928 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense Amortization expense for the next five years and thereafter, based on valuations and
determinations of useful lives, is expected to be as follows:
2024$22,426 
202520,057 
202619,657 
202717,557 
20289,198 
Thereafter6,435 
Total estimated future intangible amortization expense$95,330 
v3.24.0.1
Marketable Securities (Tables)
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Marketable Securities
The following is a summary of available-for-sale marketable securities, excluding those securities classified within cash and cash equivalents, on the Consolidated Balance Sheets as of December 31, 2023 and 2022.
December 31, 2023
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. treasury securities$69,456 $6 $(6)$69,456 
Commercial paper25,088 — (12)25,076 
Total Marketable securities$94,544 $6 $(18)$94,532 
December 31, 2022
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
U.S. treasury securities$549,944 $29 $(849)$549,124 
Corporate debt securities35,293 — (86)35,207 
Commercial paper139,489 9 (367)139,131 
Total Marketable securities$724,726 $38 $(1,302)$723,462 
v3.24.0.1
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Schedule of Liabilities Measured on a Recurring Basis
The fair value of our financial assets measured on a recurring basis is as follows:
December 31, 2023
Level ILevel IITotal
Cash and cash equivalents:
Cash$54,871 $— $54,871 
Money market funds262,365 — 262,365 
Total Cash and cash equivalents$317,236 $— $317,236 
Marketable securities:
U.S. treasury securities$69,456 $— $69,456 
Commercial paper— 25,07625,076 
Total Marketable securities$69,456 $25,076 $94,532 
December 31, 2022
Level ILevel IITotal
Cash and cash equivalents:
Cash$95,117 $— $95,117 
Money market funds45,655 — 45,655 
Total Cash and cash equivalents$140,772 $— $140,772 
Marketable securities:
U.S. treasury securities$549,124 $— $549,124 
Corporate debt securities— 35,207 35,207 
Commercial paper— 139,131 139,131 
Total Marketable securities$549,124 $174,338 $723,462 
The carrying values and estimated fair values of financial instruments not recorded at fair value are as follows:
December 31, 2023December 31, 2022
Carrying ValueFair ValueCarrying ValueFair Value
Convertible Notes$1,477,798 $1,235,625 $1,470,270 $1,134,030 
v3.24.0.1
Balance Sheet Details (Tables)
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Property and Equipment, Net The estimated useful lives of property and equipment are as follows:
Property and Equipment CategoryUseful Life
Computers and equipment5 years
Furniture and fixtures5 years
Leasehold improvementsLesser of lease term or remaining useful life
Internal-use software3 years
Equipment under finance leasesLesser of lease term or remaining useful life
Property and equipment, net consisted of the following:
December 31,
20232022
Computers and equipment$657,505 $564,763 
Furniture and fixtures1,511 1,511 
Leasehold improvements6,820 6,820 
Internal-use software84,279 78,649 
Equipment under finance leases11,938 — 
Property and equipment, gross$762,053 $651,743 
Less: accumulated depreciation$(387,083)$(317,329)
Less: accumulated amortization (69,526)(61,244)
Property and equipment, net $305,444 $273,170 
Schedule of Other Current Liabilities
Other current liabilities consisted of the following:
December 31,
20232022
Income taxes$44,887 $40,848 
Contingent compensation 15,433 5,617 
Finance leases5,221 — 
Excise taxes related to repurchase of common stock4,884 — 
Employee contributions under the ESPP557 944 
Total other current liabilities
$70,982 $47,409 
v3.24.0.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Components of Lease Expense
The components of lease expense were as follows:
December 31,
20232022
Finance lease expense:
Amortization of finance lease right-of-use assets$2,656 N/A
Interest on finance lease liabilities410 N/A
Operating lease expense80,639 $54,440 
Variable lease expense11,317 6,149 
Short-term lease expense418 1,799 
Total lease expense$95,440 $62,388 
Supplemental Balance Sheet Information
Supplemental balance sheet information related to leases were as follows:
December 31,
20232022
Finance leases:
Property and equipment, net$9,282 N/A
Other current liabilities5,221 N/A
Other long-term liabilities4,521N/A
Operating leases:
Operating lease right-of-use assets, net$155,201 $153,701 
Operating lease liabilities, current81,320 57,432
Operating lease liabilities, non-current91,161107,693 
Weighted average remaining lease term and discount rate were as follows:
December 31,
20232022
Finance leases:
Weighted-average remaining lease term (in years)2.0N/A
Weighted-average discount rate8%N/A
Operating leases:
Weighted-average remaining lease term (in years)2.72.8
Weighted-average discount rate8%5%
Operating Lease Maturity
Maturities of lease liabilities as of December 31, 2023 were as follows:
Finance Leases
Operating Leases(1)
2024$5,838 $87,283 
20253,684 47,630 
2026805 29,403 
2027210 20,116 
202838 1,609 
Total undiscounted lease liabilities10,575186,041
Less: Imputed interest(833)(13,560)
Total present value of lease liabilities9,742172,481
Less: Current portion of lease liabilities(5,221)(81,320)
Lease liabilities, non-current$4,521 $91,161 
___________________
(1)Sublease proceeds for the fiscal years ending December 31, 2024 and 2025 of $2,073 and $1,051, respectively, are not included in the table above.
Finance Lease Maturity
Maturities of lease liabilities as of December 31, 2023 were as follows:
Finance Leases
Operating Leases(1)
2024$5,838 $87,283 
20253,684 47,630 
2026805 29,403 
2027210 20,116 
202838 1,609 
Total undiscounted lease liabilities10,575186,041
Less: Imputed interest(833)(13,560)
Total present value of lease liabilities9,742172,481
Less: Current portion of lease liabilities(5,221)(81,320)
Lease liabilities, non-current$4,521 $91,161 
___________________
(1)Sublease proceeds for the fiscal years ending December 31, 2024 and 2025 of $2,073 and $1,051, respectively, are not included in the table above.
v3.24.0.1
Commitments and Contingencies (Tables)
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Total Minimum Future Purchase Commitments The total minimum future commitments for bandwidth usage and purchase orders as of December 31, 2023 were as follows:
2024$21,419 
20256,732 
2026884 
2027957 
2028— 
Thereafter— 
Total purchase commitments$29,992 
v3.24.0.1
Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Schedule of Stock Option Activity Stock option activity for the year ended December 31, 2023 was as follows:
Number of Options OutstandingWeighted-Average Exercise PriceWeighted-Average Remaining Life in YearsAggregate Intrinsic Value
Outstanding at January 1, 202310,153,916 $7.23 6.16$185,188 
Granted46,799 28.86 
Exercised(6,391,424)6.01 
Forfeited or cancelled(520,272)10.16 
Outstanding at December 31, 20233,289,019 $9.43 4.17$89,671 
Vested and exercisable at December 31, 20232,943,420 8.65 3.8882,531 
Vested and unvested expected to vest at December 31, 20233,242,866 $9.34 4.14$88,697 
Schedule of Weighted-Average Assumptions
The following weighted-average assumptions were used to estimate the grant date fair value of stock options issued during the year ended December 31, 2023:
Expected volatility59.30%
Expected life in years10
Risk-free interest rate4.25%
Dividend yield0%
Weighted-average fair value of awards$20.83
Schedule of RSU Activity RSU activity for the year ended December 31, 2023 was as follows:
SharesWeighted-Average Fair Value
Unvested balance at January 1, 20234,802,435 $44.25 
Granted6,110,576 33.77 
Vested(2,042,503)39.95 
Forfeited or cancelled(2,562,009)42.81 
Unvested balance at December 31, 20236,308,499 36.07 
Vested and expected to vest at December 31, 20234,202,720 $36.41 
Schedule of PRSU Activity PRSU activity for the year ended December 31, 2023 was as follows:
SharesWeighted-Average Fair Value
Unvested balance at January 1, 2023666,122 $57.41 
Granted1,118,528 31.75 
Vested(51,594)41.24 
Forfeited or cancelled(758,954)34.96 
Adjusted by performance factor(436,387)60.72 
Unvested balance at December 31, 2023537,715 $35.25 
Summary of Share-Based Payment Arrangement and Price Targets
The MRSU, which has a grant date fair value of $75,300 derived by using a discrete model based on multiple stock price-paths developed through the use of a Monte Carlo simulation, is divided into five tranches that will be earned based on the achievement of stock price goals, measured based on the average of the Company’s closing stock price over a consecutive ninety trading day period during the performance period as set forth in the table below.
TrancheCompany Stock Price TargetNumber of Eligible MRSUs
1$93.50475,000
2$140.00575,000
3$187.00650,000
4$233.50650,000
5$280.50650,000
Schedule of MRSU Activity
MRSU activity for the year ended December 31, 2023 was as follows:
SharesWeighted-Average Fair Value
Unvested balance at January 1, 20233,000,000 $25.12 
Granted— — 
Unvested balance at December 31, 20233,000,000 $25.12 
Summary of Stock-Based Compensation Expense
Stock-based compensation was included in the Consolidated Statements of Operations as follows:
Year Ended December 31,
202320222021
Cost of revenue$1,836 $1,820 $1,147 
Research and development43,315 39,354 23,315 
Sales and marketing15,751 14,909 8,471 
General and administrative23,508 49,746 28,644 
Restructuring and other charges3,937 — — 
Total$88,347 $105,829 $61,577 
Excess income tax benefit related to stock-based compensation$89,272 $27,657 $108,041 
v3.24.0.1
Net Income (Loss) per Share Attributable to Common Stockholders (Tables)
 12 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Schedule of Calculation of Basic and Diluted Net Loss Per Share
The following table presents the calculation of basic and diluted net income (loss) per share:
Year Ended December 31,
(In thousands, except per share amounts)202320222021
Basic net income (loss) per share:
Numerator:
Net income (loss) attributable to common stockholders$19,409 $(27,804)$(19,503)
Denominator:
Weighted average shares used to compute net income (loss) per share90,141 100,806 93,224 
Basic net income (loss) per share attributable to common stockholders$0.22 $(0.28)$(0.21)
Diluted net income (loss) per share:
Numerator:
Net income (loss) attributable to common stockholders
$19,409 $(27,804)$(19,503)
Denominator:
Number of shares used in basic calculation 90,141 100,806 93,224 
Weighted-average effect of diluted securities:
Stock Options
5,698 — — 
RSUs
495 — — 
PRSUs
81 — — 
Number of shares used in diluted calculation
96,415 100,806 93,224 
Diluted net income (loss) per share attributable to common stockholders
$0.20 $(0.28)$(0.21)
Schedule of Anti-Dilutive Securities Excluded from Computation of Net Loss Per Share
Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:
Year Ended December 31,
(In thousands)202320222021
Stock Options41 4 3 
RSUs1,574 434 21 
PRSUs14 — — 
Convertible Notes8,403 8,403 8,403 
Total10,032 8,841 8,427 
v3.24.0.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Schedule of Income before Income Tax, Domestic and Foreign
Income (loss) before income taxes from U.S. and foreign operations were as follows:
Year Ended December 31,
202320222021
U.S.$174 $(16,866)$(20,285)
Foreign26,602 (7,019)2,084 
Total income (loss) before income taxes$26,776 $(23,885)$(18,201)
Schedule of Components of Income Tax Expense (Benefit)
Total income tax expense included in the Consolidated Statements of Operations is comprised of the following:
Year Ended December 31,
202320222021
Current:
Federal$829 $— $— 
State(99)242 138 
Foreign6,835 5,482 1,147 
Total current$7,565 $5,724 $1,285 
Deferred:
Federal$140 $368 $(103)
State(120)44 45 
Foreign(218)(2,217)75 
Total deferred(198)(1,805)17 
Income tax expense$7,367 $3,919 $1,302 
Schedule of Effective Income Tax Rate Reconciliation
The following table reconciles our benefit of income taxes at the statutory rate to the effective tax rate, using a U.S. federal statutory tax rate of 21%:
Year Ended December 31,
202320222021
Income tax expense (benefit) at federal statutory rate$5,623 $(5,016)$(3,836)
State and local taxes, net of federal benefit(2,509)(205)(239)
Foreign tax rate differential1,030 168 207 
Stock-based compensation deductions(17,998)(3,077)(22,071)
Unrealized loss on warrant liability— — 3,150 
Nondeductible expenses(984)3,603 473 
Unrecognized tax positions1,083 1,482 (40)
Net change in valuation allowance138 4,442 21,969 
Global intangible low-tax income— 427 — 
162(m) limitation17,072 7,058 4,927 
U.S. R&D tax credits(2,810)(4,432)— 
Warrant exercise— — (3,419)
Valuation allowance release related to acquisition(1,074)— — 
Acquisition related compensation7,811 — — 
Other(15)(531)181 
Total income tax expense$7,367 $3,919 $1,302 
Schedule of Deferred Tax Assets and Liabilities
The components of deferred tax assets and liabilities are as follows:
December 31,
20232022
Deferred tax assets:
Accounts receivable$1,223 $1,337 
Accrued expenses982 4,288 
Capitalized research and development30,918 32,374 
Operating lease liability 44,443 38,934 
Net operating loss carryforwards28,222 24,435 
Stock-based compensation5,419 953 
Tax credit carryforwards18,338 4,184 
Other989 511 
Gross deferred tax assets130,534 107,016 
Less: valuation allowance(60,520)(47,361)
Total net deferred tax asset$70,014 $59,655 
Deferred tax liability
Depreciation and amortization$(31,808)$(43,137)
Operating lease ROU asset(39,745)(36,524)
Total deferred tax liability(71,553)(79,661)
Total net deferred tax liability$(1,539)$(20,006)
Schedule of Operating Loss Carryforwards
The total NOL and expirations are as follows:
NOL Carryforward
Total1-3 Years3-5 YearsMore than 5 YearsUnlimited
Federal$106,734 $— $— $— $106,734 
State and local49,307 168 90 45,066 3,983 
Foreign7,152 — — — 7,152 
Total$163,193 $168 $90 $45,066 $117,869 
Schedule of Valuation Allowance
The valuation allowance activity for the periods indicated is as follows:
December 31,
20232022
Balance as of the beginning of period$(47,361)$(42,919)
Additions charged to expense(13,159)(4,442)
Balance as of the end of period$(60,520)$(47,361)
Schedule of Unrecognized Tax Benefits Roll Forward
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Year Ended December 31,
202320222021
Balance of unrecognized tax benefits at beginning of year$17,044 $721 $822 
Additions based on tax positions related to the current period1,571 3,014 — 
Additions for tax positions of prior periods1,947 2,833 — 
Additions recorded as part of business combination — 11,106 — 
Reductions for tax positions of prior periods— (630)(101)
Release due to expiration of statute of limitations(225)— — 
Balance of unrecognized tax benefits at end of year$20,337 $17,044 $721 
v3.24.0.1
Subsequent Events (Tables)
 12 Months Ended
Dec. 31, 2023
Subsequent Events [Abstract]  
Schedule of Stock Price Goals A cumulative percentage of the MRSU target will be earned based on the achievement of stock price goals, measured based on the average of the Company’s closing stock price over a consecutive 60 trading day period during the performance period as set forth in the table below:
TrancheCompany Stock Price TargetNumber of MRSUs
1$65.00
25% of Target MRSUs
2$100.00
50% of Target MRSUs
3$135.00
100% of Target MRSUs
4$170.00
150% of Target MRSUs
v3.24.0.1
Nature of the Business and Organization (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Mar. 26, 2021
Dec. 31, 2021
Subsidiary, Sale of Stock [Line Items]    
Conversion of convertible preferred stock to common stock in connection with initial public offering (in shares)   45,472,229
Common Stock    
Subsidiary, Sale of Stock [Line Items]    
Conversion of convertible preferred stock to common stock in connection with initial public offering (in shares)   (45,472,229)
IPO    
Subsidiary, Sale of Stock [Line Items]    
Sale of stock, price per share (in dollars per share) $ 47.00  
Net proceeds after transaction $ 722,981  
IPO | Common Stock    
Subsidiary, Sale of Stock [Line Items]    
Sale of stock, shares issued in transaction (in shares) 16,500,000  
v3.24.0.1
Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Accounting Policies [Abstract]        
Cash and cash equivalents $ 317,236 $ 140,772    
Restricted cash included in Prepaid expenses and other current assets 0 9,100    
Restricted cash 1,747 1,935    
Total cash, cash equivalents and restricted cash $ 318,983 $ 151,807 $ 1,715,425 $ 102,537
v3.24.0.1
Summary of Significant Accounting Policies - Disclosure of Changes in Allowance for Doubtful Accounts (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Accounts Receivable, Allowance for Credit Loss [Roll Forward]      
Beginning Balance $ 6,099 $ 4,212  
Provision for expected credit losses 15,357 16,551 $ 9,207
Write-offs and other (15,608) (14,664)  
Ending Balance $ 5,848 $ 6,099 $ 4,212
v3.24.0.1
Summary of Significant Accounting Policies - Narrative (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
segment
Dec. 31, 2022
USD ($)
agreement
Dec. 31, 2021
USD ($)
Nov. 30, 2021
Concentration Risk [Line Items]        
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] Other current liabilities, Other long-term liabilities Other current liabilities, Other long-term liabilities    
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Other current liabilities      
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] Other long-term liabilities Other long-term liabilities    
Number of separate sublease agreements | agreement   2    
Loss on impairment of long-lived assets $ 1,140 $ 1,635 $ 285  
Impairment loss 1,140 163 285  
Goodwill 348,322 315,168 32,170  
Intangible assets with indefinite lives 44,821 44,821    
Intangible assets with definite lives 95,330 74,107    
Revenue recognized during period 3,674 2,894 2,672  
Advertising expense $ 7,857 19,914 $ 14,577  
Number of operating segments | segment 1      
Number of reportable segments | segment 1      
Dividend yield 0.00%      
Minimum        
Concentration Risk [Line Items]        
Finance lease, term 1 year      
Minimum | JournalDev IT        
Concentration Risk [Line Items]        
Useful life 3 years      
Maximum        
Concentration Risk [Line Items]        
Finance lease, term 5 years      
Maximum | JournalDev IT        
Concentration Risk [Line Items]        
Useful life 10 years      
Convertible Senior Notes Due 2026 | Senior Notes        
Concentration Risk [Line Items]        
Interest rate       0.00%
Right-Of-Use Asset        
Concentration Risk [Line Items]        
Loss on impairment of long-lived assets   $ 1,472    
Internal-use software        
Concentration Risk [Line Items]        
Useful Life 3 years      
Geographic Concentration Risk | Revenue from Contract with Customer        
Concentration Risk [Line Items]        
Revenue derived from customers, percent 100.00% 100.00% 100.00%  
United States | Geographic Concentration Risk | Revenue from Contract with Customer        
Concentration Risk [Line Items]        
Revenue derived from customers, percent 30.00% 31.00% 31.00%  
v3.24.0.1
Summary of Significant Accounting Policies - Useful Lives of Property and Equipment (Details)
Dec. 31, 2023
Computers and equipment  
Property, Plant and Equipment [Line Items]  
Useful Life 5 years
Furniture and fixtures  
Property, Plant and Equipment [Line Items]  
Useful Life 5 years
Internal-use software  
Property, Plant and Equipment [Line Items]  
Useful Life 3 years
v3.24.0.1
Summary of Significant Accounting Policies - Revenue by Geographic Areas (Details) - Geographic Concentration Risk - Revenue from Contract with Customer
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total 100.00% 100.00% 100.00%
North America      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total 37.00% 38.00% 38.00%
Europe      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total 29.00% 30.00% 30.00%
Asia      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total 24.00% 22.00% 22.00%
Other      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total 10.00% 10.00% 10.00%
v3.24.0.1
Summary of Significant Accounting Policies -Long-Lived Assets by Geographic Area (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total $ 460,645 $ 426,871
United States    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total 233,557 206,118
Singapore    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total 43,425 60,307
Germany    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total 62,224 50,274
Netherlands    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total 46,170 35,951
Other    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total $ 75,269 $ 74,221
v3.24.0.1
Acquisitions, Goodwill and Intangible Assets - Narrative (Details) - USD ($)
$ in Thousands
 1 Months Ended 6 Months Ended 8 Months Ended 12 Months Ended
Jul. 05, 2023
Sep. 01, 2022
Jan. 31, 2023
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2023
Aug. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Business Acquisition [Line Items]                    
Measurement period adjustment, decrease to goodwill               $ 24,686 $ 239  
Purchase of intangible assets               0 4,915 $ 5,636
Amortization of intangible assets               $ 18,967 6,301 $ 645
Amortization expense           5 years   5 years    
Developed technology                    
Business Acquisition [Line Items]                    
Useful life           5 years   5 years    
Customer relationships                    
Business Acquisition [Line Items]                    
Useful life           6 years   6 years    
Trade name                    
Business Acquisition [Line Items]                    
Useful life           10 years   10 years    
Content                    
Business Acquisition [Line Items]                    
Useful life           3 years   3 years    
Brand                    
Business Acquisition [Line Items]                    
Useful life           2 years   2 years    
Snap Shooter Limited                    
Business Acquisition [Line Items]                    
Payments to acquire businesses     $ 2,500              
Useful life     5 years              
Asset acquisition, contingent consideration     $ 1,000              
CSS Tricks                    
Business Acquisition [Line Items]                    
Payments to acquire businesses         $ 4,000          
CSS Tricks | Minimum                    
Business Acquisition [Line Items]                    
Useful life         3 years          
CSS Tricks | Maximum                    
Business Acquisition [Line Items]                    
Useful life         5 years          
JournalDev IT                    
Business Acquisition [Line Items]                    
Useful life       3 years            
Purchase of intangible assets       $ 1,400            
Paperspace Co. Acquisition                    
Business Acquisition [Line Items]                    
Business acquisition, percentage of voting interests acquired 100.00%                  
Payments to acquire businesses $ 100,399                  
Cash contributed to escrow accounts 11,100                  
Acquisition related costs               $ 5,745    
Revenue of acquiree since acquisition date           $ 6,350        
Loss of acquiree since acquisition date           $ 18,914        
Contingent compensations costs 10,120                  
Acquisition related compensation expense               4,135    
Paperspace Co. Acquisition | Earned On July 5, 2024                    
Business Acquisition [Line Items]                    
Contingent compensations costs 5,060                  
Paperspace Co. Acquisition | Earned Quarterly After July 5, 2024 Through July 5, 2025                    
Business Acquisition [Line Items]                    
Contingent compensations costs $ 1,265                  
Cloudways Ltd. Acquisition                    
Business Acquisition [Line Items]                    
Business acquisition, percentage of voting interests acquired   100.00%                
Payments to acquire businesses   $ 278,187                
Cash contributed to escrow accounts   42,000                
Acquisition related costs                 $ 2,139  
Contingent compensations costs   38,830                
Revenue recognized prior to acquisition             $ 6      
Measurement period adjustment, decrease to goodwill               24,686    
Measurement period adjustment, decrease to deferred tax liabilities               18,269    
Measurement period adjustment, decrease to other current liabilities               6,417    
Measurement period adjustment, increase to income tax expense and deferred tax liabilities               1,635    
Measurement period adjustment, decrease to general and administrative expenses and other current liabilities               $ 921    
Cloudways Ltd. Acquisition | Earned September1 2023                    
Business Acquisition [Line Items]                    
Contingent compensations costs   16,851                
Cloudways Ltd. Acquisition | Earned On March 1, 2024, September 1, 2024, and March 1, 2025                    
Business Acquisition [Line Items]                    
Contingent compensations costs   $ 7,326                
v3.24.0.1
Acquisitions, Goodwill and Intangible Assets - Purchase Price Allocation (Details) - USD ($)
$ in Thousands
Jul. 05, 2023
Sep. 01, 2022
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Liabilities assumed:          
Goodwill recorded in acquisition     $ 348,322 $ 315,168 $ 32,170
Paperspace Co. Acquisition          
Fair value of consideration transferred          
Cash consideration $ 100,399        
Cash contributed to escrow accounts 11,100        
Tangible assets acquired:          
Cash and cash equivalents 1,376        
Accounts receivable 1,042        
Prepaid expenses and other current assets 193        
Property and equipment, net 4,515        
Operating right-of-use asset, net 4,398        
Finance lease right-of-use asset, net 11,958        
Other assets 367        
Intangible assets 37,690        
Liabilities assumed:          
Accounts payable and accrued expenses (1,445)        
Deferred revenue (105)        
Operating lease liabilities, current (1,475)        
Operating lease liabilities, non-current (2,923)        
Finance lease liabilities, current (5,707)        
Finance lease liabilities, non-current (6,251)        
Deferred tax liabilities (1,074)        
Total identifiable net assets acquired 42,559        
Goodwill recorded in acquisition 57,840        
Total purchase price allocation $ 100,399        
Cloudways Ltd. Acquisition          
Fair value of consideration transferred          
Cash consideration   $ 278,187      
Cash contributed to escrow accounts   42,000      
Other expenses   150      
Less: Cash pre-funded from contingent compensation   (9,100)      
Total consideration paid   311,237      
Tangible assets acquired:          
Cash and cash equivalents   5,827      
Accounts receivable   4,753      
Prepaid expenses and other current assets   547      
Other assets   9      
Intangible assets   72,000      
Liabilities assumed:          
Accounts payable   (1,820)      
Accrued expenses   (957)      
Deferred revenue   (1,013)      
Deferred tax liabilities   (3,417)      
Other current liabilities   (23,243)      
Total identifiable net assets acquired   52,686      
Goodwill recorded in acquisition   258,551      
Total purchase price allocation   $ 311,237      
v3.24.0.1
Acquisitions, Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($)
$ in Thousands
Jul. 05, 2023
Sep. 01, 2022
Paperspace Co. Acquisition    
Acquired Finite-Lived Intangible Assets [Line Items]    
Estimated Fair Value $ 37,690  
Cloudways Ltd. Acquisition    
Acquired Finite-Lived Intangible Assets [Line Items]    
Estimated Fair Value   $ 72,000
Trademark/Trade Name | Paperspace Co. Acquisition    
Acquired Finite-Lived Intangible Assets [Line Items]    
Estimated Fair Value $ 300  
Weighted Average Useful Life (years) 1 year  
Trade name | Cloudways Ltd. Acquisition    
Acquired Finite-Lived Intangible Assets [Line Items]    
Estimated Fair Value   $ 9,500
Weighted Average Useful Life (years)   10 years
Developed technology | Paperspace Co. Acquisition    
Acquired Finite-Lived Intangible Assets [Line Items]    
Estimated Fair Value $ 24,120  
Weighted Average Useful Life (years) 5 years  
Developed technology | Cloudways Ltd. Acquisition    
Acquired Finite-Lived Intangible Assets [Line Items]    
Estimated Fair Value   $ 31,500
Weighted Average Useful Life (years)   5 years
Customer relationships | Paperspace Co. Acquisition    
Acquired Finite-Lived Intangible Assets [Line Items]    
Estimated Fair Value $ 13,270  
Weighted Average Useful Life (years) 5 years  
Customer relationships | Cloudways Ltd. Acquisition    
Acquired Finite-Lived Intangible Assets [Line Items]    
Estimated Fair Value   $ 31,000
Weighted Average Useful Life (years)   7 years
v3.24.0.1
Acquisitions, Goodwill and Intangible Assets - Pro Forma (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Paperspace Co. Acquisition      
Acquired Finite-Lived Intangible Assets [Line Items]      
Net loss $ (280) $ (61,802)  
Cloudways Ltd. Acquisition      
Acquired Finite-Lived Intangible Assets [Line Items]      
Revenue   607,191 $ 459,845
Net loss   $ (20,780) $ (53,227)
v3.24.0.1
Acquisitions, Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Goodwill [Roll Forward]    
Beginning Balance $ 315,168 $ 32,170
Measurement period adjustments (24,686) (239)
Ending Balance 348,322 315,168
Cloudways Ltd. Acquisition    
Goodwill [Roll Forward]    
Acquisition   $ 283,237
Measurement period adjustments (24,686)  
Paperspace Co. Acquisition    
Goodwill [Roll Forward]    
Acquisition $ 57,840  
v3.24.0.1
Acquisitions, Goodwill and Intangible Assets - Schedule of Definite Life Intangibles (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]    
Total carrying value $ 166,621 $ 126,431
Finite-Lived Intangible Assets, Accumulated Amortization (26,470) (7,503)
Total intangible assets, net 140,151 118,928
IP addresses    
Finite-Lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross 44,821 44,821
Developed technology    
Finite-Lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross 62,330 35,710
Finite-Lived Intangible Assets, Accumulated Amortization (14,737) (4,477)
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross 44,270 31,000
Finite-Lived Intangible Assets, Accumulated Amortization (7,203) (1,476)
Trade name    
Finite-Lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross 9,800 9,500
Finite-Lived Intangible Assets, Accumulated Amortization (1,413) (317)
Content    
Finite-Lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross 4,400 4,400
Finite-Lived Intangible Assets, Accumulated Amortization (2,534) (1,067)
Brand    
Finite-Lived Intangible Assets [Line Items]    
Finite-Lived Intangible Assets, Gross 1,000 1,000
Finite-Lived Intangible Assets, Accumulated Amortization $ (583) $ (166)
v3.24.0.1
Acquisitions, Goodwill and Intangible Assets - Schedule of Future Amortization (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract]    
2024 $ 22,426  
2025 20,057  
2026 19,657  
2027 17,557  
2028 9,198  
Thereafter 6,435  
Total estimated future intangible amortization expense $ 95,330 $ 74,107
v3.24.0.1
Marketable Securities - Summary of Securities (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost $ 94,544 $ 724,726
Gross Unrealized Gains 6 38
Gross Unrealized Losses (18) (1,302)
Fair Value 94,532 723,462
U.S. treasury securities    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 69,456 549,944
Gross Unrealized Gains 6 29
Gross Unrealized Losses (6) (849)
Fair Value 69,456 549,124
Corporate debt securities    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost   35,293
Gross Unrealized Gains   0
Gross Unrealized Losses   (86)
Fair Value   35,207
Commercial paper    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 25,088 139,489
Gross Unrealized Gains 0 9
Gross Unrealized Losses (12) (367)
Fair Value $ 25,076 $ 139,131
v3.24.0.1
Marketable Securities - Narrative (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
security
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Investments, Debt and Equity Securities [Abstract]      
Interest income | $ $ 23,767 $ 11,881 $ 123
Number of securities held in unrealized loss position | security 3    
v3.24.0.1
Fair Value Measurements - Schedule of Fair Value on Recurring Basis (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Marketable securities: $ 94,532 $ 723,462
Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Cash and cash equivalents: 317,236 140,772
Marketable securities: 94,532 723,462
Level I | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Cash and cash equivalents: 317,236 140,772
Marketable securities: 69,456 549,124
Level II | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Cash and cash equivalents: 0 0
Marketable securities: 25,076 174,338
Cash | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Cash and cash equivalents: 54,871 95,117
Cash | Level I | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Cash and cash equivalents: 54,871 95,117
Cash | Level II | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Cash and cash equivalents: 0 0
Money market funds | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Cash and cash equivalents: 262,365 45,655
Money market funds | Level I | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Cash and cash equivalents: 262,365 45,655
Money market funds | Level II | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Cash and cash equivalents: 0 0
U.S. treasury securities    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Marketable securities: 69,456 549,124
U.S. treasury securities | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Marketable securities: 69,456 549,124
U.S. treasury securities | Level I | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Marketable securities: 69,456 549,124
U.S. treasury securities | Level II | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Marketable securities: 0 0
Commercial paper    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Marketable securities: 25,076 139,131
Commercial paper | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Marketable securities: 25,076 139,131
Commercial paper | Level I | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Marketable securities: 0 0
Commercial paper | Level II | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Marketable securities: $ 25,076 139,131
Corporate debt securities | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Marketable securities:   35,207
Corporate debt securities | Level I | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Marketable securities:   0
Corporate debt securities | Level II | Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Marketable securities:   $ 35,207
v3.24.0.1
Fair Value Measurements - Narrative (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Nov. 30, 2021
Convertible Notes      
Fair Value Measurement Inputs and Valuation Techniques [Line Items]      
Unamortized discount and debt issuance costs $ 22,202 $ 29,730  
Convertible Senior Notes Due 2026 | Senior Notes      
Fair Value Measurement Inputs and Valuation Techniques [Line Items]      
Interest rate     0.00%
v3.24.0.1
Fair Value Measurements - Convertible Notes Measurement (Details) - Convertible Notes - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Convertible Notes $ 1,477,798 $ 1,470,270
Fair Value, Recurring    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Convertible Notes $ 1,235,625 $ 1,134,030
v3.24.0.1
Balance Sheet Details - Schedule of Property, Plant and Equipment (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 762,053 $ 651,743
Less: accumulated depreciation (387,083) (317,329)
Less: accumulated amortization (69,526) (61,244)
Property and equipment, net 305,444 273,170
Computers and equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 657,505 564,763
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 1,511 1,511
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 6,820 6,820
Internal-use software    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 84,279 78,649
Equipment under finance leases    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 11,938 $ 0
v3.24.0.1
Balance Sheet Details - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Depreciation $ 90,466 $ 83,814 $ 74,278
Capitalized computer software 6,958 10,636 7,307
Amortization expense related to internal-use software $ 8,433 $ 12,117 $ 13,424
v3.24.0.1
Balance Sheet Details - Summary of Other Current Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Income taxes $ 44,887 $ 40,848
Contingent compensation 15,433 5,617
Finance leases 5,221 0
Excise taxes related to repurchase of common stock 4,884 0
Employee contributions under the ESPP 557 944
Total other current liabilities $ 70,982 $ 47,409
v3.24.0.1
Debt - Narrative (Details)
 1 Months Ended 12 Months Ended
Nov. 30, 2021
USD ($)
trading_day
$ / shares
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Mar. 31, 2022
USD ($)
Debt Instrument [Line Items]          
Loss on extinguishment of debt   $ 0 $ (407,000) $ (3,435,000)  
Interest and amortization of deferred financing fees   8,945,000 8,396,000 3,744,000  
Proceeds from issuance of convertible notes, net of issuance costs $ 1,461,795,000 0 0 1,462,195,000  
Senior Notes          
Debt Instrument [Line Items]          
Debt instrument, face amount   1,500,000,000      
Secured debt          
Debt Instrument [Line Items]          
Loss on extinguishment of debt     (407,000)    
Credit Facility          
Debt Instrument [Line Items]          
Commitment fees on unused balance   $ 506,000 477,000 362,000  
Credit Facility | KayBank National Association          
Debt Instrument [Line Items]          
Debt service coverage ratio   3.50      
Credit Facility | Minimum          
Debt Instrument [Line Items]          
Debt instrument, face amount   $ 100,000,000      
Credit Facility | Revolving Credit Facility          
Debt Instrument [Line Items]          
Line of credit facility, maximum borrowing capacity 150,000,000 $ 250,000     $ 250,000,000
Credit Facility | Revolving Credit Facility | Minimum          
Debt Instrument [Line Items]          
Commitment fee percentage   0.20%      
Credit Facility | Revolving Credit Facility | Maximum          
Debt Instrument [Line Items]          
Commitment fee percentage   0.30%      
Credit Facility | Line of Credit          
Debt Instrument [Line Items]          
Debt issuance costs   $ 1,295,000      
Financing fees   662,000      
Interest and amortization of deferred financing fees   $ 420,000 398,000 2,243,000  
Credit Facility | Line of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Variable Rate Component One | Minimum          
Debt Instrument [Line Items]          
Variable rate   1.25%      
Credit Facility | Line of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Variable Rate Component One | Maximum          
Debt Instrument [Line Items]          
Variable rate   2.00%      
Convertible Senior Notes Due 2026 | Senior Notes          
Debt Instrument [Line Items]          
Debt instrument, face amount $ 1,500,000,000        
Interest and amortization of deferred financing fees   $ 7,529,000 $ 7,481,000 $ 881,000  
Conversion ratio, number of shares 5.6018        
Conversion price (in dollars per share) | $ / shares $ 178.51        
Scheduled trading days 25 days        
Redemption price, percentage 100.00%        
Convertible Senior Notes Due 2026 | Senior Notes | Debt Conversion, Period One          
Debt Instrument [Line Items]          
Percentage of stock price trigger 130.00%        
Trading days | trading_day 20,000        
Consecutive trading days | trading_day 30,000        
Convertible Senior Notes Due 2026 | Senior Notes | Debt Conversion, Period Two          
Debt Instrument [Line Items]          
Consecutive trading days | trading_day 10,000        
Business days after trading period | trading_day 5,000        
Redemption price, percentage 98.00%        
Convertible Senior Notes Due 2026 | Senior Notes | Underwriters' Option          
Debt Instrument [Line Items]          
Consideration received $ 200,000,000        
v3.24.0.1
Leases - Narrative (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Lessee, Lease, Description [Line Items]    
Increase in rental amounts payable (in percent) 0.02  
Sublease income $ 1,677 $ 1,202
Minimum    
Lessee, Lease, Description [Line Items]    
Operating lease, term 3 years  
Maximum    
Lessee, Lease, Description [Line Items]    
Operating lease, term 5 years  
v3.24.0.1
Leases - Schedule of Lease Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Finance lease expense:    
Amortization of finance lease right-of-use assets $ 2,656  
Interest on finance lease liabilities 410  
Operating lease expense 80,639 $ 54,440
Variable lease expense 11,317 6,149
Short-term lease expense 418 1,799
Total lease expense $ 95,440 $ 62,388
v3.24.0.1
Leases - Supplemental Balance Sheet Information (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Finance leases:    
Property and equipment, net $ 9,282  
Other current liabilities 5,221 $ 0
Other long-term liabilities 4,521  
Operating leases:    
Operating lease right-of-use assets, net 155,201 153,701
Operating lease liabilities, current 81,320 57,432
Operating lease liabilities, non-current $ 91,161 $ 107,693
Finance leases:    
Weighted-average remaining lease term (in years) 2 years  
Weighted-average discount rate 8.00%  
Operating leases:    
Weighted-average remaining lease term (in years) 2 years 8 months 12 days 2 years 9 months 18 days
Weighted-average discount rate 8.00% 5.00%
v3.24.0.1
Leases - Maturities of Leases (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Jan. 31, 2022
Finance Leases      
2024 $ 5,838    
2025 3,684    
2026 805    
2027 210    
2028 38    
Total undiscounted lease liabilities 10,575    
Less: Imputed interest (833)    
Total present value of lease liabilities 9,742    
Less: Current portion of lease liabilities (5,221) $ 0  
Lease liabilities, non-current 4,521    
Operating Leases      
2024     $ 87,283
2025     47,630
2026     29,403
2027     20,116
2028     1,609
Total undiscounted lease liabilities     $ 186,041
Less: Imputed interest (13,560)    
Total present value of lease liabilities 172,481    
Less: Current portion of lease liabilities (81,320) (57,432)  
Lease liabilities, non-current 91,161 $ 107,693  
Sublease proceeds for fiscal year December 31, 2024 2,073    
Sublease proceeds for fiscal year December 31, 2025 $ 1,051    
v3.24.0.1
Commitments and Contingencies - Scheduled of Future Purchase Commitments (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2024 $ 21,419
2025 6,732
2026 884
2027 957
2028 0
Thereafter 0
Purchase Obligation, Total $ 29,992
v3.24.0.1
Commitments and Contingencies - Narrative (Details)
$ in Thousands
Dec. 14, 2023
claim
Feb. 07, 2024
claim
Jan. 12, 2024
claim
Dec. 31, 2023
USD ($)
debt_instrument
Dec. 31, 2022
USD ($)
Commitments and Contingencies Disclosure [Abstract]          
Letters of credit outstanding, amount | $       $ 1,747 $ 1,935
Letters of credit, number remaining | debt_instrument       1  
Stockholder Derivative Litigation | Pending Litigation          
Loss Contingencies [Line Items]          
Number of claims filed 2        
Stockholder Derivative Litigation | Pending Litigation | Subsequent Event          
Loss Contingencies [Line Items]          
Number of claims consolidated     2    
Stockholder Derivative Litigation | Dismissed With Prejudice | Subsequent Event          
Loss Contingencies [Line Items]          
Number of claims voluntarily dismissed without prejudice   2      
v3.24.0.1
Stockholders’ Equity - Narrative (Details)
 12 Months Ended
Dec. 31, 2023
USD ($)
vote
$ / shares
shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
Feb. 14, 2023
USD ($)
May 23, 2022
USD ($)
Feb. 23, 2022
USD ($)
Class of Stock [Line Items]            
Common stock, voting rights | vote 1          
Common stock, shares authorized (in shares) | shares 750,000,000 750,000,000        
Common stock, par value (in dollars per share) | $ / shares $ 0.000025 $ 0.000025        
Preferred stock, shares authorized (in shares) | shares 10,000,000 10,000,000        
Preferred stock, par value (in dollars per share) | $ / shares $ 0.000025 $ 0.000025        
Preferred stock, shares outstanding (in shares) | shares 0 0        
Preferred stock, shares issued (in shares) | shares 0 0        
Stock repurchase program, authorized amount | $         $ 300,000,000 $ 300,000,000
Repurchase and retirement of common stock | $ $ 488,455,000 $ 600,000,000 $ 350,000,000      
2022 Share Buyback Program            
Class of Stock [Line Items]            
Repurchase and retirement of common stock (in shares) | shares   13,626,594        
Repurchase and retirement of common stock | $   $ 600,000,000        
2023 Share Buyback Program            
Class of Stock [Line Items]            
Stock repurchase program, authorized amount | $       $ 500,000,000    
Repurchase and retirement of common stock (in shares) | shares 14,487,509          
Repurchase and retirement of common stock | $ $ 488,455,000          
Excise taxes imposed | $ $ 4,884,000          
v3.24.0.1
Stock-Based Compensation - Narrative (Details)
$ / shares in Units, $ in Thousands
 1 Months Ended 3 Months Ended 12 Months Ended
Nov. 20, 2023
$ / shares
shares
May 19, 2023
$ / shares
shares
Mar. 01, 2023
shares
Feb. 16, 2023
shares
Nov. 18, 2022
$ / shares
shares
Feb. 24, 2022
shares
Sep. 01, 2021
USD ($)
$ / shares
shares
Jul. 27, 2021
USD ($)
trading_day
tranche
shares
Jun. 10, 2021
trading_day
installment
Sep. 30, 2023
shares
Feb. 28, 2023
Mar. 31, 2021
Sep. 30, 2023
USD ($)
shares
Jun. 30, 2023
shares
Dec. 31, 2023
USD ($)
shares
Dec. 31, 2022
USD ($)
shares
Dec. 31, 2021
USD ($)
shares
Mar. 31, 2023
shares
May 23, 2022
purchase_period
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Adjusted free cash flow margin                     0.20                
Total | $                             $ 88,347 $ 105,829 $ 61,577    
Stock options, exercised in period, intrinsic value | $                             156,819 81,912 189,422    
Tax benefit from stock options exercised | $                             $ 108,164 $ 25,143 $ 103,820    
Options, granted, number (in shares) | shares                             46,799 0 0    
Stock options, granted in period, aggregate estimated fair value | $                             $ 12,888 $ 17,529      
Stock options, unrecognized stock-based compensation expense | $                             5,216        
Restructuring and other charges | $                             20,887 0 $ 0    
Research and development | $                             140,365 143,885 115,684    
Certain Executives                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Number of awards could potentially accelerate up to twelve months, if circumstances met (in shares) | shares                   469,000                  
The Restructuring Plan                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Adjusted free cash flow margin                     0.20                
Total | $                             $ 3,937        
Minimum                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Vesting percentage                             0.00%        
Maximum                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Vesting percentage                             200.00%        
Stock Options                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Stock options, expiration period                             10 years        
Stock options, vesting period                             4 years        
Unrecognized stock-based compensation expense, average recognition period                             9 months        
RSUs                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Stock options, vesting period                             4 years        
Unrecognized stock-based compensation expense | $                             $ 139,430        
Unrecognized stock-based compensation expense, average recognition period                             2 years 9 months 7 days        
Granted (in shares) | shares                             6,110,576        
Shares, vested (in shares) | shares                             2,042,503        
RSUs | The Restructuring Plan                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Restructuring and other charges | $                             $ 2,147        
Shares, issued (in shares) | shares                                   33,963  
PRSUs                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Options, granted, number (in shares) | shares     1,118,528     398,949                          
Unrecognized stock-based compensation expense | $                             $ 1,121        
Unrecognized stock-based compensation expense, average recognition period                             1 year 2 months 15 days        
Quarterly installments | installment                 8                    
Percentage of target award (in percent)           155.00%                          
Increase (decrease) in performance factor (in shares) | shares           89,769                          
Shares, accelerated vesting, number (in shares) | shares                         40,000            
Restructuring and other charges | $                         $ 2,524            
Granted (in shares) | shares                             1,118,528        
Shares, vested (in shares) | shares                             51,594        
PRSUs | The Restructuring Plan                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Shares, accelerated vesting, number (in shares) | shares                             20,000        
Restructuring and other charges | $                             $ 1,262        
PRSUs | 1                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Vesting percentage                 33.33%                    
PRSUs | Maximum                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Options, granted, number (in shares) | shares       436,387                              
Number of trading days | trading_day                 2                    
MRSU                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Stock options, vesting period               7 years                      
Number of trading days | trading_day               90                      
Shares of common stock reserved for future issuance, number available for grant (in shares) | shares               3,000,000                      
Grant date fair value | $               $ 75,300                      
Number of tranches | tranche               5                      
Stock-based compensation expense, reversal | $                             $ 31,279        
Granted (in shares) | shares                             0        
MRSU | 1                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Vesting percentage               14.00%                      
Shares of common stock reserved for future issuance, number available for grant (in shares) | shares               475,000                      
MRSU | 2                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Vesting percentage               14.00%                      
Shares of common stock reserved for future issuance, number available for grant (in shares) | shares               575,000                      
MRSU | 3                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Vesting percentage               14.00%                      
Shares of common stock reserved for future issuance, number available for grant (in shares) | shares               650,000                      
MRSU | 4                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Vesting percentage               14.00%                      
Shares of common stock reserved for future issuance, number available for grant (in shares) | shares               650,000                      
MRSU | 5                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Vesting percentage               14.00%                      
Shares of common stock reserved for future issuance, number available for grant (in shares) | shares               650,000                      
MRSU | 6                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Vesting percentage               15.00%                      
MRSU | 7                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Vesting percentage               15.00%                      
Employee Stock                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Number of purchase periods | purchase_period                                     2
2021 Employee Stock Purchase Plan | Employee Stock                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Purchase price of common stock, percent                       85.00%              
2021 Employee Stock Purchase Plan | Restricted Stock                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Total | $                             $ 6,093 4,212 1,407    
2022 Employee Stock Purchase Plan | Employee Stock                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Issuance of common stock under employee stock purchase plan, net of taxes withheld (in shares) | shares 92,632 120,348     111,851                            
Purchase price of shares (in usd per share) | $ / shares   $ 23.51     $ 24.03                            
2022 Employee Stock Purchase Plan | Employee Stock | Minimum                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Purchase price of shares (in usd per share) | $ / shares $ 23.51                                    
2022 Employee Stock Purchase Plan | Employee Stock | Maximum                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Purchase price of shares (in usd per share) | $ / shares $ 24.31                                    
Second 2022 Offering | Employee Stock                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Total | $                             2,290 4,380 3,097    
Incremental stock-based compensation | $                             2,069        
Share-based award, amount withheld for employees | $                             557        
Acquisition of Nimbella | Restricted Stock                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Stock options, vesting period             36 months                        
Granted (in shares) | shares             200,204                        
Restricted stock share price (in dollars per share) | $ / shares             $ 63.11                        
Value of restricted stock granted to founders of Nimbella | $             $ 12,635                        
Research and development | $                             3,946        
Acquisition of Nimbella | Restricted Stock | Two Remaining Founders                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Shares, vested (in shares) | shares                           66,139          
Restructuring Charges                                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                                      
Total | $                             $ 3,937 $ 0 $ 0    
v3.24.0.1
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Number of Options Outstanding      
Number of options outstanding at the beginning of the period (in shares) 10,153,916    
Granted (in shares) 46,799 0 0
Exercised (in shares) (6,391,424)    
Forfeited or cancelled (in shares) (520,272)    
Number of options outstanding at the end of the period (in shares) 3,289,019 10,153,916  
Vested and exercisable at end of period (in shares) 2,943,420    
Vested and unvested expected to vest at end of period (in shares) 3,242,866    
Weighted-Average Exercise Price      
Weighted-average exercise price outstanding at beginning of period (in dollars per share) $ 7.23    
Granted (in dollars per share) 28.86    
Exercised (in dollars per share) 6.01    
Forfeited or cancelled (in dollars per share) 10.16    
Weighted-average exercise price outstanding at end of period (in dollars per share) 9.43 $ 7.23  
Vested and exercisable at end of period (in dollars per share) 8.65    
Vested and unvested expected to vest at end of period (in dollars per share) $ 9.34    
Weighted-Average Remaining Life in Years      
Weighted average remaining life (in years) 4 years 2 months 1 day 6 years 1 month 28 days  
Vested and exercisable at end of period (in years) 3 years 10 months 17 days    
Vested and unvested expected to vest at end of period (in years) 4 years 1 month 20 days    
Aggregate Intrinsic Value      
Aggregate intrinsic value at beginning of period $ 185,188    
Aggregate intrinsic value at end of period 89,671 $ 185,188  
Vested and exercisable at December 31, 2023 82,531    
Vested and unvested expected to vest at December 31, 2023 $ 88,697    
v3.24.0.1
Stock-Based Compensation - Weighted-Average Assumptions (Details)
 12 Months Ended
Dec. 31, 2023
$ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Dividend yield 0.00%
Stock Options  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Expected volatility 59.30%
Expected life in years 10 years
Risk-free interest rate 4.25%
Dividend yield 0.00%
Weighted-average fair value of awards (in dollars per share) $ 20.83
v3.24.0.1
Stock-Based Compensation - Schedule of RSU & PRSU Activity (Details)
 12 Months Ended
Dec. 31, 2023
$ / shares
shares
RSUs  
Shares  
Unvested balance at beginning of period (in shares) | shares 4,802,435
Granted (in shares) | shares 6,110,576
Vested (in shares) | shares (2,042,503)
Forfeited or cancelled (in shares) | shares (2,562,009)
Unvested balance at end of period (in shares) | shares 6,308,499
Vested and expected to vest (in shares) | shares 4,202,720
Weighted-Average Fair Value  
Unvested balance at beginning of period (in dollars per share) | $ / shares $ 44.25
Granted (in dollars per share) | $ / shares 33.77
Vested (in dollars per share) | $ / shares 39.95
Forfeited or cancelled (in dollars per share) | $ / shares 42.81
Unvested balance at end of period (in dollars per share) | $ / shares 36.07
Vested and expected to vest (in dollars per share) | $ / shares $ 36.41
PRSUs  
Shares  
Unvested balance at beginning of period (in shares) | shares 666,122
Granted (in shares) | shares 1,118,528
Vested (in shares) | shares (51,594)
Forfeited or cancelled (in shares) | shares (758,954)
Adjusted by performance factor (in shares) | shares (436,387)
Unvested balance at end of period (in shares) | shares 537,715
Weighted-Average Fair Value  
Unvested balance at beginning of period (in dollars per share) | $ / shares $ 57.41
Granted (in dollars per share) | $ / shares 31.75
Vested (in dollars per share) | $ / shares 41.24
Forfeited or cancelled (in dollars per share) | $ / shares 34.96
Adjusted for performance factor (in usd per share) | $ / shares 60.72
Unvested balance at end of period (in dollars per share) | $ / shares $ 35.25
v3.24.0.1
Stock-Based Compensation - MRSUs Share-Based Payment Arrangements and Price Targets (Details) - MRSU
Jul. 27, 2021
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Number of eligible MRSUs (in shares) 3,000,000
1  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Company stock price target (in dollars per share) | $ / shares $ 93.50
Number of eligible MRSUs (in shares) 475,000
2  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Company stock price target (in dollars per share) | $ / shares $ 140.00
Number of eligible MRSUs (in shares) 575,000
3  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Company stock price target (in dollars per share) | $ / shares $ 187.00
Number of eligible MRSUs (in shares) 650,000
4  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Company stock price target (in dollars per share) | $ / shares $ 233.50
Number of eligible MRSUs (in shares) 650,000
5  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Company stock price target (in dollars per share) | $ / shares $ 280.50
Number of eligible MRSUs (in shares) 650,000
v3.24.0.1
Stock-Based Compensation - Schedule of MRSU Activity (Details) - MRSU
 12 Months Ended
Dec. 31, 2023
$ / shares
shares
Shares  
Unvested balance at beginning of period (in shares) | shares 3,000,000
Granted (in shares) | shares 0
Unvested balance at end of period (in shares) | shares 3,000,000
Weighted-Average Fair Value  
Unvested balance at beginning of period (in dollars per share) | $ / shares $ 25.12
Granted (in dollars per share) | $ / shares 0
Unvested balance at end of period (in dollars per share) | $ / shares $ 25.12
v3.24.0.1
Stock-Based Compensation - Summary of 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 $ 88,347 $ 105,829 $ 61,577
Excess income tax benefit related to stock-based compensation 89,272 27,657 108,041
Cost of Sales [Member]      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total 1,836 1,820 1,147
Research and Development Expense [Member]      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total 43,315 39,354 23,315
Selling and Marketing Expense [Member]      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total 15,751 14,909 8,471
General and Administrative Expense [Member]      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total 23,508 49,746 28,644
Restructuring Charges      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total $ 3,937 $ 0 $ 0
v3.24.0.1
Net Income (Loss) per Share Attributable to Common Stockholders - Schedule of Net Income (Loss) Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Numerator:      
Net income (loss) attributable to common stockholders $ 19,409 $ (27,804) $ (19,503)
Weighted average shares used to compute net income (loss) per share (in shares) 90,141,000 100,806,000 93,224,000
Basic net income (loss) per share (in usd per share) $ 0.22 $ (0.28) $ (0.21)
Diluted net income (loss) per share:      
Number of shares used in basic calculation (in shares) 90,141,000 100,806,000 93,224,000
Diluted (in shares) 96,415,000 100,806,000 93,224,000
Net loss per share attributable to common stockholders, diluted (in dollars per share) $ 0.20 $ (0.28) $ (0.21)
Stock Options      
Diluted net income (loss) per share:      
Diluted (in shares) 5,698,000 0 0
RSUs      
Diluted net income (loss) per share:      
Diluted (in shares) 495,000 0 0
PRSUs      
Diluted net income (loss) per share:      
Diluted (in shares) 81,000 0 0
v3.24.0.1
Net Income (Loss) per Share Attributable to Common Stockholders - Schedule of Antidilutive Securities Excluded from Computation of 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]      
Antidilutive securities excluded from computation of loss per share, amount (in shares) 10,032,000 8,841,000 8,427,000
Stock Options      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of loss per share, amount (in shares) 41,000 4,000 3,000
RSUs      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of loss per share, amount (in shares) 1,574,000 434,000 21,000
PRSUs      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of loss per share, amount (in shares) 14,000 0 0
Convertible Notes      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive securities excluded from computation of loss per share, amount (in shares) 8,403,000 8,403,000 8,403,000
v3.24.0.1
Income Taxes - Total Loss Before Income Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]      
U.S. $ 174 $ (16,866) $ (20,285)
Foreign 26,602 (7,019) 2,084
Income (loss) before income taxes $ 26,776 $ (23,885) $ (18,201)
v3.24.0.1
Income Taxes - Schedule of Current and Deferred Income Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Current:      
Federal $ 829 $ 0 $ 0
State (99) 242 138
Foreign 6,835 5,482 1,147
Total current 7,565 5,724 1,285
Deferred:      
Federal 140 368 (103)
State (120) 44 45
Foreign (218) (2,217) 75
Total deferred (198) (1,805) 17
Income tax expense $ 7,367 $ 3,919 $ 1,302
v3.24.0.1
Income Taxes - Tax Rate Reconciliation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]      
Income tax expense (benefit) at federal statutory rate $ 5,623 $ (5,016) $ (3,836)
State and local taxes, net of federal benefit (2,509) (205) (239)
Foreign tax rate differential 1,030 168 207
Stock-based compensation deductions (17,998) (3,077) (22,071)
Unrealized loss on warrant liability 0 0 3,150
Nondeductible expenses (984) 3,603 473
Unrecognized tax positions 1,083 1,482 (40)
Net change in valuation allowance 138 4,442 21,969
Global intangible low-tax income 0 427 0
162(m) limitation 17,072 7,058 4,927
U.S. R&D tax credits (2,810) (4,432) 0
Warrant exercise 0 0 (3,419)
Valuation allowance release related to acquisition (1,074) 0 0
Acquisition related compensation 7,811 0 0
Other (15) (531) 181
Income tax expense $ 7,367 $ 3,919 $ 1,302
v3.24.0.1
Income Taxes - Deferred Tax Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Deferred tax assets:      
Accounts receivable $ 1,223 $ 1,337  
Accrued expenses 982 4,288  
Capitalized research and development 30,918 32,374  
Operating lease liability 44,443 38,934  
Net operating loss carryforwards 28,222 24,435  
Stock-based compensation 5,419 953  
Tax credit carryforwards 18,338 4,184  
Other 989 511  
Gross deferred tax assets 130,534 107,016  
Less: valuation allowance (60,520) (47,361) $ (42,919)
Deferred tax assets 70,014 59,655  
Deferred tax liability      
Depreciation and amortization (31,808) (43,137)  
Operating lease ROU asset (39,745) (36,524)  
Total deferred tax liability (71,553) (79,661)  
Total net deferred tax liability $ (1,539) $ (20,006)  
v3.24.0.1
Income Taxes - Narrative (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
Income Tax Disclosure [Abstract]  
Unrecognized tax benefits that would impact effective tax rate $ 12,755
Uncertain tax positions expense 3,611
Decrease in unrecognized tax benefits is reasonably possible 20,337
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 163,193
Unlimited  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 117,869
Federal  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 106,734
Tax credits 23,717
Federal | Unlimited  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 106,734
State and local  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 49,307
Tax credits 2,956
State and local | Unlimited  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 3,983
Foreign Tax Authority  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 7,152
Foreign Tax Authority | Unlimited  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward $ 7,152
v3.24.0.1
Income Taxes - Schedule of NOLs (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Operating Loss Carryforwards [Line Items]  
NOL Carryforward $ 163,193
1-3 Years  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 168
3-5 Years  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 90
More than 5 Years  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 45,066
Unlimited  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 117,869
Federal  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 106,734
Federal | 1-3 Years  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 0
Federal | 3-5 Years  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 0
Federal | More than 5 Years  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 0
Federal | Unlimited  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 106,734
State and local  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 49,307
State and local | 1-3 Years  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 168
State and local | 3-5 Years  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 90
State and local | More than 5 Years  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 45,066
State and local | Unlimited  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 3,983
Foreign Tax Authority  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 7,152
Foreign Tax Authority | 1-3 Years  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 0
Foreign Tax Authority | 3-5 Years  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 0
Foreign Tax Authority | More than 5 Years  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward 0
Foreign Tax Authority | Unlimited  
Operating Loss Carryforwards [Line Items]  
NOL Carryforward $ 7,152
v3.24.0.1
Income Taxes - Valuation Allowance (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Summary of Valuation Allowance, Rollforward    
Balance as of the beginning of period $ (47,361) $ (42,919)
Additions charged to expense (13,159) (4,442)
Balance as of the end of period $ (60,520) $ (47,361)
v3.24.0.1
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance of unrecognized tax benefits at beginning of year $ 17,044 $ 721 $ 822
Additions based on tax positions related to the current period 1,571 3,014 0
Additions for tax positions of prior periods 1,947 2,833 0
Additions recorded as part of business combination 0 11,106 0
Reductions for tax positions of prior periods 0 (630) (101)
Release due to expiration of statute of limitations (225) 0 0
Balance of unrecognized tax benefits at end of year $ 20,337 $ 17,044 $ 721
v3.24.0.1
Restructuring - Narrative (Details)
$ in Thousands
 1 Months Ended 12 Months Ended
Feb. 28, 2023
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Restructuring Cost and Reserve [Line Items]        
Adjusted free cash flow margin 0.20      
Total   $ 88,347 $ 105,829 $ 61,577
Restructuring Charges        
Restructuring Cost and Reserve [Line Items]        
Total   3,937 $ 0 $ 0
The Restructuring Plan        
Restructuring Cost and Reserve [Line Items]        
Adjusted free cash flow margin 0.20      
Severance and benefit costs   16,950    
Total   3,937    
The Restructuring Plan | Restructuring Charges        
Restructuring Cost and Reserve [Line Items]        
Restructuring charges   21,000    
The Restructuring Plan | Employee Severance        
Restructuring Cost and Reserve [Line Items]        
Restructuring reserve   $ 133    
v3.24.0.1
Employee Benefit Plan (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Defined Contribution Plan Disclosure [Line Items]      
Percent of employees' gross pay 3.00%    
Contributions made $ 2,987 $ 3,846 $ 2,963
Contributions up to 3% of gross pay      
Defined Contribution Plan Disclosure [Line Items]      
Company's match (percent) 100.00%    
Contributions up to 3%-5% of gross pay      
Defined Contribution Plan Disclosure [Line Items]      
Company's match (percent) 50.00%    
Minimum      
Defined Contribution Plan Disclosure [Line Items]      
Percent of employees' gross pay 3.00%    
Maximum      
Defined Contribution Plan Disclosure [Line Items]      
Percent of employees' gross pay 5.00%    
v3.24.0.1
Related Party Transactions (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Related Party Transaction [Line Items]    
Expenses from transactions with related parties $ 549  
Gaditek Associates    
Related Party Transaction [Line Items]    
Related party fees 792 $ 300
Marketing and Referral Activity Fee    
Related Party Transaction [Line Items]    
Expenses from transactions with related parties 224  
Reimbursable Compensation Related    
Related Party Transaction [Line Items]    
Expenses from transactions with related parties 273  
Referral Fee    
Related Party Transaction [Line Items]    
Expenses from transactions with related parties $ 52  
Chief Revenue Officer | Gaditek Associates | Aaqib Gadit | Affiliated Entity    
Related Party Transaction [Line Items]    
Ownership percentage 14.30%  
v3.24.0.1
Subsequent Events - Narrative (Details)
 12 Months Ended
Feb. 12, 2024
USD ($)
trading_day
installment
Jul. 27, 2021
USD ($)
trading_day
Dec. 31, 2023
Feb. 20, 2024
USD ($)
May 23, 2022
USD ($)
Feb. 23, 2022
USD ($)
Subsequent Event [Line Items]            
Stock repurchase program, authorized amount         $ 300,000,000 $ 300,000,000
RSUs            
Subsequent Event [Line Items]            
Vesting period     4 years      
MRSU            
Subsequent Event [Line Items]            
Grant date fair value   $ 75,300,000        
Vesting period   7 years        
Number of trading days | trading_day   90        
MRSU | 1            
Subsequent Event [Line Items]            
Vesting percentage   14.00%        
Subsequent Event            
Subsequent Event [Line Items]            
Stock repurchase program, authorized amount       $ 140,000,000    
Subsequent Event | RSUs | Chief Executive Officer            
Subsequent Event [Line Items]            
Grant date fair value $ 17,000,000          
Subsequent Event | RSUs | Chief Executive Officer | 1            
Subsequent Event [Line Items]            
Vesting percentage 25.00%          
Vesting period 1 year          
Subsequent Event | RSUs | Chief Executive Officer | 2 through 13            
Subsequent Event [Line Items]            
Number of quarterly installments | installment 12          
Subsequent Event | MRSU | Chief Executive Officer            
Subsequent Event [Line Items]            
Grant date fair value $ 8,000,000          
Vesting period 5 years          
Number of trading days | trading_day 60          
Subsequent Event | MRSU | Chief Executive Officer | 1            
Subsequent Event [Line Items]            
Vesting period 3 years          
Subsequent Event | MRSU | Chief Executive Officer | 1, If Stock Price Targets Achieved During First Three Years, Third Anniversary of Grant | First Performance Period            
Subsequent Event [Line Items]            
Vesting percentage 50.00%          
Subsequent Event | MRSU | Chief Executive Officer | 2, If Stock Price Targets Achieved During First Three Years, Fifth Anniversary of Grant | First Performance Period            
Subsequent Event [Line Items]            
Vesting percentage 50.00%          
v3.24.0.1
Subsequent Events - Schedule of Stock Price Goals (Details) - MRSU - $ / shares
Feb. 12, 2024
Jul. 27, 2021
1    
Subsequent Event [Line Items]    
Company Stock Price Target (in dollars per share)   $ 93.50
2    
Subsequent Event [Line Items]    
Company Stock Price Target (in dollars per share)   140.00
3    
Subsequent Event [Line Items]    
Company Stock Price Target (in dollars per share)   187.00
4    
Subsequent Event [Line Items]    
Company Stock Price Target (in dollars per share)   $ 233.50
Subsequent Event | 1 | Chief Executive Officer    
Subsequent Event [Line Items]    
Company Stock Price Target (in dollars per share) $ 65.00  
Number of MRSUs 25.00%  
Subsequent Event | 2 | Chief Executive Officer    
Subsequent Event [Line Items]    
Company Stock Price Target (in dollars per share) $ 100.00  
Number of MRSUs 50.00%  
Subsequent Event | 3 | Chief Executive Officer    
Subsequent Event [Line Items]    
Company Stock Price Target (in dollars per share) $ 135.00  
Number of MRSUs 100.00%  
Subsequent Event | 4 | Chief Executive Officer    
Subsequent Event [Line Items]    
Company Stock Price Target (in dollars per share) $ 170.00  
Number of MRSUs 150.00%