CYBERARK SOFTWARE LTD., 20-F filed on 3/2/2023
Annual and Transition Report (foreign private issuer)
v3.22.4
Document and Entity Information
 12 Months Ended
Dec. 31, 2022
shares
Entity Registrant Name CYBERARK SOFTWARE LTD.
Document Type 20-F
Amendment Flag false
Document Registration Statement false
Document Annual Report true
Document Transition Report false
Document Shell Company Report false
Document Period End Date Dec. 31, 2022
Current Fiscal Year End Date --12-31
Entity Filer Category Large Accelerated Filer
Entity File Number 001-36625
Entity Incorporation, State or Country Code IL
Entity Address, Address Line One 9 Hapsagot St.
Entity Address, Address Line Two Park Ofer B
Entity Address, Address Line Three P.O. BOX 3143
Entity Address, City or Town Petach-Tikva
Entity Address Country IL
Entity Address, Postal Zip Code 4951040
Title of 12(b) Security Ordinary shares, par value NIS 0.01 per share
Trading Symbol CYBR
Name of Exchange on which Security is Registered NASDAQ
Entity Common Stock, Shares Outstanding 41,028,571
Entity Well-known Seasoned Issuer Yes
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Interactive Data Current Yes
Entity Emerging Growth Company false
ICFR Auditor Attestation Flag true
Document Accounting Standard U.S. GAAP
Entity Shell Company false
Entity Central Index Key 0001598110
Document Fiscal Year Focus 2022
Document Fiscal Period Focus FY
Auditor Name KOST FORER GABBAY & KASIERER
Auditor Firm ID 1281
Auditor Location Tel-Aviv, Israel
Business Contact [Member]  
Entity Registrant Name CyberArk Software Ltd.
Contact Personnel Name Donna Rahav
Entity Address, Address Line One 9 Hapsagot St.
Entity Address, Address Line Two Park Ofer B
Entity Address, Address Line Three P.O. BOX 3143
Entity Address, City or Town Petach-Tikva
Entity Address Country IL
Entity Address, Postal Zip Code 4951040
City Area Code 972 (3)
Local Phone Number 918-0000
v3.22.4
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
CURRENT ASSETS:    
Cash and cash equivalents $ 347,338 $ 356,850
Short-term bank deposits 305,843 369,645
Marketable securities 301,101 199,933
Trade receivables (net of allowance for credit losses of $23 and $0 at December 31, 2021 and 2022, respectively) 120,817 113,211
Prepaid expenses and other current assets 22,482 22,225
Total current assets 1,097,581 1,061,864
LONG-TERM ASSETS:    
Marketable securities 227,748 300,662
Property and equipment, net 23,474 20,183
Intangible assets, net 27,508 17,866
Goodwill 153,241 123,717
Other long-term assets 217,040 121,743
Deferred tax assets 72,809 47,167
Total long-term assets 721,820 631,338
TOTAL ASSETS 1,819,401 1,693,202
CURRENT LIABILITIES:    
Trade payables 13,642 10,076
Employees and payroll accruals 77,328 75,442
Accrued expenses and other current liabilities 33,584 23,576
Deferred revenues 327,918 230,908
Total current liabilities 452,472 340,002
LONG-TERM LIABILITIES:    
Convertible senior notes, net 569,344 520,094
Deferred revenues 80,524 86,367
Other long-term liabilities 38,917 20,227
Total long-term liabilities 688,785 626,688
TOTAL LIABILITIES 1,141,257 966,690
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:    
Ordinary shares of NIS 0.01 par value – Authorized: 250,000,000 shares at December 31, 2021 and 2022; Issued and outstanding: 40,041,870 shares and 41,028,571 shares at December 31, 2021 and 2022, respectively 107 104
Additional paid-in capital 660,289 588,937
Accumulated other comprehensive income (loss) (15,560) 397
Retained earnings 33,308 137,074
Total shareholders' equity 678,144 726,512
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,819,401 $ 1,693,202
v3.22.4
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Common Stock, Shares Authorized 250,000,000 250,000,000
Common Stock, Shares, Issued 41,028,571 40,041,870
Ordinary shares, outstanding 41,028,571 40,041,870
Net of allowance for credit losses $ 0 $ 23
v3.22.4
CONSOLIDATED BALANCE SHEETS (Parenthetical 1) - ₪ / shares
Dec. 31, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Ordinary shares, par value ₪ 0.01 ₪ 0.01
v3.22.4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Revenues:      
Subscription $ 280,649 $ 134,628 $ 56,425
Perpetual license 49,964 115,738 176,061
Maintenance and professional services 261,097 252,551 231,945
Revenues 591,710 502,917 464,431
Cost of revenues:      
Subscription 46,249 25,837 17,513
Perpetual license 2,893 3,904 4,925
Maintenance and professional services 76,904 63,566 60,133
Cost of revenues 126,046 93,307 82,571
Gross profit 465,664 409,610 381,860
Operating expenses:      
Research and Development Expense 190,321 142,121 95,426
Selling and Marketing Expense 345,273 274,401 219,999
General and Administrative Expense 82,520 71,425 60,429
Total operating expenses 618,114 487,947 375,854
Operating income (loss) (152,450) (78,337) 6,006
Financial income (expense), net 15,432 (12,992) (6,395)
Loss before taxes on income (137,018) (91,329) (389)
Tax benefit (taxes on income) 6,650 7,383 (5,369)
Net loss $ (130,368) $ (83,946) $ (5,758)
Basic net loss per ordinary share $ (3.21) $ (2.12) $ (0.15)
Diluted net loss per ordinary share $ (3.21) $ (2.12) $ (0.15)
Change in net unrealized gains (losses) on marketable securities:      
Net unrealized gains (losses) arising during the year $ (11,733) $ (3,405) $ 2,152
Change in unrealized losses on marketable securities, total (11,733) (3,405) 2,152
Change in unrealized net gain (loss) on cash flow hedges:      
Net unrealized gains (losses) arising during the year (11,418) 1,702 2,676
Net gains (losses) reclassified into net loss 7,194 (2,075) (1,471)
Change in unrealized gain (loss) on cash flow hedges, Total (4,224) (373) 1,205
Other comprehensive income (loss), net of taxes of $(458), $(516) and $(2,176) for 2020, 2021 and 2022, respectively (15,957) (3,778) 3,357
Total comprehensive loss $ (146,325) $ (87,724) $ (2,401)
v3.22.4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Statement [Abstract]      
Other comprehensive income (loss), tax $ (2,176) $ (516) $ (458)
v3.22.4
STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)
$ in Thousands
Ordinary Shares [Member]
Additional paid-in capital [Member]
Accumulated other comprehensive income (loss) [Member]
Retained Earnings [Member]
Total
Balance at Dec. 31, 2019 $ 99 $ 396,437 $ 818 $ 226,778 $ 624,132
Balance, shares at Dec. 31, 2019 38,043,516        
Exercise of options and vested RSUs granted to employees $ 2 13,094 0 0 13,096
Exercise of options and vested RSUs granted to employees, shares 991,243        
Other comprehensive income (loss), net of tax $ 0 0 3,357 0 3,357
Share-based compensation 0 72,461 0 0 72,461
Net loss 0 0 0 (5,758) (5,758)
Balance at Dec. 31, 2020 $ 101 481,992 4,175 221,020 707,288
Balance, shares at Dec. 31, 2020 39,034,759        
Exercise of options and vested RSUs granted to employees $ 3 10,940 0 0 10,943
Exercise of options and vested RSUs granted to employees, shares 1,007,111        
Other comprehensive income (loss), net of tax $ 0 0 (3,778) 0 (3,778)
Share-based compensation 0 96,005 0 0 96,005
Net loss 0 0 0 (83,946) (83,946)
Balance at Dec. 31, 2021 $ 104 588,937 397 137,074 726,512
Balance, shares at Dec. 31, 2021 40,041,870        
Exercise of options and vested RSUs granted to employees $ 3 1,838 0 0 1,841
Exercise of options and vested RSUs granted to employees, shares 868,599        
Other comprehensive income (loss), net of tax $ 0 0 (15,957) 0 (15,957)
Share-based compensation 0 121,579 0 0 121,579
Issuance of ordinary shares under employee stock purchase plan $ 0 [1] 13,867 0 0 13,867
Issuance of ordinary shares under employee stock purchase plan, shares 118,102        
Adjustments from adoption of ASU 2020-06 $ 0 (65,932) 0 26,602 (39,330)
Net loss 0 0 0 (130,368) (130,368)
Balance at Dec. 31, 2022 $ 107 $ 660,289 $ (15,560) $ 33,308 $ 678,144
Balance, shares at Dec. 31, 2022 41,028,571        
[1] Represents an amount lower than $1.
v3.22.4
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Cash flows from operating activities:      
Net loss $ (130,368) $ (83,946) $ (5,758)
Adjustments to reconcile net loss to net cash provided by operating activities:      
Depreciation and amortization 16,203 14,228 15,475
Share-based compensation 120,821 95,436 71,849
Amortization of premium and accretion of discount on marketable securities, net 3,894 7,532 3,068
Deferred income taxes, net (15,630) (11,972) (1,988)
Amortization of debt discount and issuance costs 2,980 17,792 17,183
Increase in trade receivables (7,606) (20,083) (17,315)
Increase in prepaid expenses, other current and long-term assets and others (37,141) (44,423) (25,845)
Changes in operating lease right-of-use assets 4,558 6,204 5,358
Increase in trade payables 4,053 1,499 558
Increase in short-term and long-term deferred revenue 91,167 74,767 45,397
Increase in employees and payroll accruals 714 23,821 7,846
Increase (decrease) in accrued expenses and other current and long-term liabilities 4,801 (101) (4,544)
Changes in operating lease liabilities (8,738) (6,014) (4,515)
Net cash provided by operating activities 49,708 74,740 106,769
Cash flows from investing activities:      
Proceeds from (investment in) short-term and long-term deposits, net 35,669 (105,069) (123,054)
Investment in marketable securities and other (375,731) (357,210) (405,193)
Proceeds from sales and maturities of marketable securities 325,472 243,013 191,637
Purchase of property and equipment (12,517) (8,928) (7,174)
Business acquisitions, net of cash acquired (Schedule A) (41,285) 0 (68,603)
Net cash used in investing activities (68,392) (228,194) (412,387)
Cash flows from financing activities:      
Proceeds from (payments of) withholding tax related to employee stock plans (184) (789) 1,069
Proceeds from exercise of stock options 1,968 11,738 12,180
Proceeds in connection with employee stock purchase plan 15,143 0 0
Payments of contingent consideration related to acquisitions (Schedule A) (4,702) 0 0
Net cash provided by financing activities 12,225 10,949 13,249
Decrease in cash, cash equivalents and restricted cash (6,459) (142,505) (292,369)
Effect of exchange rate differences on cash, cash equivalents and restricted cash (3,053) (689) 0
Cash, cash equivalents and restricted cash at the beginning of the year 356,850 500,044 792,413
Cash, cash equivalents and restricted cash at the end of the year 347,338 356,850 500,044
Non-cash activities:      
Lease liabilities arising from obtaining right-of-use-assets 28,256 0 3,237
Non-cash purchase of property and equipment 1,769 2,165 1,639
Exercise of stock options 0 127 916
Supplemental disclosure of cash flow activities:      
Cash paid during the year for taxes, net 9,302 8,404 11,424
Reconciliation of cash, cash equivalents and restricted cash:      
Cash and cash equivalents 347,338 356,850 499,992
Restricted cash included in other long-term assets 0 0 52
Total cash, cash equivalents and restricted cash 347,338 356,850 500,044
Fair value of assets acquired and liabilities assumed at the date of acquisition:      
Goodwill 153,241 $ 123,717 $ 123,717
AAPI1, Inc. [Member]      
Fair value of assets acquired and liabilities assumed at the date of acquisition:      
Working capital, net (9)    
Goodwill 11,809    
Technology 6,716    
Deferred taxes asset, net (827)    
Total 17,689    
C3M, LLC [Member]      
Fair value of assets acquired and liabilities assumed at the date of acquisition:      
Working capital, net (293)    
Property and equipment 30    
Other long-term liabilities (445)    
Goodwill 17,715    
Technology 9,581    
Deferred taxes asset, net 1,710    
Total $ 28,298    
v3.22.4
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)
$ in Thousands
Dec. 31, 2022
USD ($)
AAPI1, Inc. [Member]  
Cash and cash equivalents acquired $ 19
C3M, LLC [Member]  
Cash and cash equivalents acquired $ 59
v3.22.4
GENERAL
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
GENERAL
NOTE 1:-       GENERAL
 
  a.
CyberArk Software Ltd. (together with its subsidiaries, the "Company") is an Israeli company that develops, markets and sells software-based security solutions and services. The Company's solutions and services secure access for any identity - human or machine - to help organizations secure critical business assets, protect their distributed workforce and customers, and accelerate business in the cloud. The Company's software extends its leadership in Privileged Access Management, or PAM, to offer a comprehensive set of Identity Security capabilities.
 
  b.
In May 2020, the Company acquired all of the share capital of IDaptive Holdings, Inc. ("Idaptive") for total gross consideration of $68,603. Idaptive specializes in Identity and Access Management as a Service (IDaaS) which provides a comprehensive Artificial Intelligence (AI)-based and security-first approach to managing identities that is both adaptive and context-aware. The Company expensed the related acquisition costs of $2,932 substantially in General and Administrative. The Company accounted for the acquisition as business combination in accordance with ASC No. 805, "Business Combinations". Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating Idaptive`s technology into the Company`s portfolio. Pro forma results of operations have not been presented because the acquisition was not material to the Company's results of operations.
 
  c.
In March 2022, the Company acquired all of the share capital of AAPI1, Inc., a Delaware corporation ("Aapi") for total gross consideration of $17,689. Aapi specializes in the field of automation of identity. With identity automation, embedded App functions, and micro access control, Aapi develops an identity, communications and incident response platform. The Company expensed the related acquisition costs of $252 in General and Administrative. The Company accounted for the acquisition as business combination in accordance with ASC No. 805, "Business Combinations". Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating Aapi`s technology into the Company`s portfolio. Pro forma results of operations have not been presented because the acquisition was not material to the Company's results of operations.
 
  d.
In July 2022, the Company acquired all of the share capital of C3M, LLC ("C3M") for total gross consideration of $28,298. C3M specializes in multi-cloud security and compliance solutions. The Company expensed the related acquisition costs of $1,992 in Research and Development and General and Administrative. The Company accounted for the acquisition as business combination in accordance with ASC No. 805, "Business Combinations". Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating C3M`s technology into the Company`s portfolio. Pro forma results of operations have not been presented because the acquisition was not material to the Company's results of operations.
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
SIGNIFICANT ACCOUNTING POLICIES

NOTE 2:-       SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP").

a.Use of estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such management estimates and assumptions are related, but not limited to contingent liabilities, income tax uncertainties, deferred taxes, share-based compensation, fair value of assets acquired and liabilities assumed in business combinations, fair value of the convertible senior notes liability, as well as the determination of standalone selling prices in revenue transactions with multiple performance obligations and the estimated period of benefit for deferred contract costs. The Company's management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

b.Principles of consolidation:

The consolidated financial statements include the financial statements of CyberArk Software Ltd. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation.

c.Financial statements in U.S. dollars:

A majority of the Company's revenues are generated in U.S. dollars. In addition, the equity investments were in U.S. dollars and a substantial portion of the Company's costs are incurred in U.S. dollars. The Company's management believes that the U.S. dollar is the currency of the primary economic environment in which the Company and each of its subsidiaries operates. Thus, the functional and reporting currency of the Company is the U.S. dollar.

Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with Accounting Standard Codification ("ASC") No. 830 "Foreign Currency Matters." All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the statement of comprehensive loss as financial income or expenses, as appropriate.

d.Cash and cash equivalents:

Cash equivalents are short-term highly liquid deposits that are readily convertible to cash with original maturities of three months or less, at the date acquired.

e.Short-term bank deposits:

Short-term bank deposits are deposits with maturities of greater than three months and remaining maturities of less than one year. As of December 31, 2021 and 2022, the Company's bank deposits are denominated in U.S. dollars and New Israeli Shekels ("NIS") and bear yearly interest at weighted average rates of 0.72% and 5.11%, respectively. Short-term bank deposits are presented at their cost, including accrued interest.

f.Investments in marketable securities:

The Company accounts for investments in marketable debt securities in accordance with ASC No. 320, "Investments - Debt Securities". The Company determines the appropriate classification of its investments at the time of purchase and reevaluates such designation at each balance sheet date. The Company classifies all of its marketable securities as available-for-sale as the Company may sell these securities at any time for use in its current operations or for other purposes, even prior to maturity. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in accumulated other comprehensive income (loss) in shareholders' equity.

The Company periodically evaluates its available-for-sale debt securities for impairment in accordance with ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. If the amortized cost of an individual security exceeds its fair value, the Company considers its intent to sell the security or whether it is more likely than not that it will be required to sell the security before recovery of its amortized basis. If either of these criteria are met, the Company writes down the security to its fair value and records the impairment charge in the Consolidated Statements of Comprehensive Loss. If neither of these criteria are met, the Company assess' whether credit loss exists. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss may exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded, limited by the amount that the fair value is less than the amortized cost basis. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive income

During the years ended December 31, 2020, 2021 and 2022, no credit loss impairments have been identified.

g.Property and equipment:

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates:

 

 

%

 

 

 

Computers, software and related equipment

 

20 - 33

Office furniture and equipment

 

15 - 20

Leasehold improvements

 

Over the shorter of the related lease period or the life of the asset

h.Long-lived assets:

The long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, "Property, Plant and Equipment", whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2020, 2021 and 2022, no impairment losses have been recognized.

i.Business combination:

The Company accounts for its business acquisitions in accordance with ASC No. 805, "Business Combinations." While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value assets acquired and liabilities assumed at the business combination date, these estimates and assumptions are subject to refinement. The total purchase price allocated to the tangible and intangible assets acquired is assigned based on the fair values as of the date of the acquisition. During the measurement period, which does not exceed one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Goodwill generated from the business combinations is primarily attributable to synergies between the Company and acquired companies` respective products and services. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.

 

j.Goodwill and other intangible assets:

Goodwill and certain other purchased intangible assets have been recorded in the Company's financial statements as a result of acquisitions. Goodwill represents excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired. Goodwill is not amortized, but rather is subject to an impairment test.

ASC No. 350, "Intangible-Goodwill and other" requires goodwill to be tested for impairment at least annually and, in certain circumstances, between annual tests. The accounting guidance gives the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The qualitative assessment considers events and circumstances that might indicate that a reporting unit's fair value is less than its carrying amount. If it is determined, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative test is performed. The Company operates as one reporting unit. The Company elects to perform an annual impairment test of goodwill as of October 1 of each year, or more frequently if impairment indicators are present.

For the years ended December 31, 2020, 2021 and 2022, no impairment losses were identified.

Purchased intangible assets with finite lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, which range from two to twelve years. Intangible assets, consisting primarily of technology and customer relationships, are amortized over their estimated useful lives on a straight-line basis or in proportion to their economic benefits realized.

k.Derivative instruments:

 
ASC No. 815, "Derivative and Hedging," requires companies to recognize all of their derivative instruments as either assets or liabilities on the balance sheet at fair value.
 
For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.
 
In accordance with ASU 2017-12, "Targeted Improvements to Accounting for Hedging Activities", gains and losses on the derivatives instruments that are designated and qualify as a cash flow hedge are recorded in accumulated other comprehensive income (loss) and reclassified into earnings in the same accounting period in which the designated forecasted transaction or hedged item affects earnings.
 
To hedge against the risk of changes in cash flows resulting from foreign currency salary payments during the year, the Company instituted a foreign currency cash flow hedging program. The Company hedges portions of its forecasted expenses denominated in NIS. These forward and option contracts are designated as cash flow hedges, as defined by ASC No. 815, and are all effective, as their critical terms match underlying transactions being hedged.
 
As of December 31, 2021 and 2022, the amount recorded in accumulated other comprehensive income (loss) from the Company's currency forward and option transactions was $1,086, net of tax of $148, and $(3,138), net of tax of $(428), respectively.
 
As of December 31, 2022, the notional amounts of foreign exchange forward contracts into which the Company entered were $96,246. The foreign exchange forward contracts will expire by December 2023. The fair value of derivative instruments assets balances as of December 31, 2021 and 2022, totaled $1,318 and $49, respectively. The fair value of derivative instruments liabilities balances as of December 31, 2021 and 2022, totaled $86 and $3,616, respectively.
 
The following table presents gains (losses) reclassified from accumulated other comprehensive income (loss) to the statements of comprehensive loss per line item:
 
   
Year ended
December 31,
  
   
2020
    
2021
    
2022
  
                   
Cost of revenues
  
$
(117
)
  
$
(144
)
  
$
509
  
Research and development
    
(1,084
)
    
(1,552
)
    
5,381
  
Sales and marketing
    
(185
)
    
(273
)
    
927
  
General and administrative
    
(281
)
    
(389
)
    
1,358
  
                         
Total gains (losses), before tax benefit (taxes on income)
    
(1,667
)
    
(2,358
)
    
8,175
  
Tax benefit (taxes on income)
    
196
      
283
      
(981
)
                         
Total gains (losses), net of tax benefit (taxes on income)
  
$
(1,471
)
  
$
(2,075
)
  
$
7,194
  
 
In addition to the derivatives that are designated as hedges as discussed above, the Company enters into certain foreign exchange forward transactions and holds foreign exchange deposits to economically hedge certain net asset balances in Euros, British Pounds Sterling, Canadian Dollars and NIS. Gains and losses related to such derivative instruments are recorded in financial income (expense), net. As of December 31, 2022, with respect to these transactions, the notional amounts of foreign exchange forward contracts into which the Company entered were $50,090. The foreign exchange forward contracts will expire by July 2023. The fair value of derivative instruments assets balances as of December 31, 2021 and 2022, totaled $751 and $72, respectively. The fair value of derivative instruments liabilities balances as of December 31, 2021 and 2022 totaled $36 and $1,388, respectively.
 
For the years ended December 31, 2020, 2021 and 2022, the Company recorded financial income (expense), net from hedging transactions of $(1,317), $2,099, and $2,281, respectively.

l.Severance pay:

The Israeli Severance Pay Law, 1963 ("Severance Pay Law"), specifies that employees are entitled to severance payment, following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one month salary for each year of employment, or a portion thereof.

The majority of the Company's liability for severance pay is covered by the provisions of Section 14 of the Severance Pay Law ("Section 14"). Under Section 14, employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, made on behalf of the employee with insurance companies. Payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees. 

As a result, the Company does not recognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in the Company's balance sheet.

For the Company's employees in Israel who are not subject to Section 14, the Company calculated the liability for severance pay pursuant to the Severance Pay Law based on the most recent salary of these employees multiplied by the number of years of employment as of the balance sheet date. The Company's liability for these employees is fully provided for via monthly deposits with severance pay funds, insurance policies and accruals. The value of these deposits recorded as an asset on the Company's balance sheet under other long-term assets as of December 31, 2021 and 2022 is $5,227 and $4,881, respectively. The amount of accrued severance payable recorded as a liability on the Company's balance sheet under long-term liabilities as of December 31, 2021 and 2022 is $8,271 and $7,769, respectively. 

Severance expenses for the years ended December 31, 2020, 2021 and 2022, amounted to $4,813, $6,368 and $7,836, respectively.

m.U.S. defined contribution plan:

The U.S. subsidiaries have a 401(k) defined contribution plan covering certain full time and part time employees in the U.S. who meet certain eligibility requirements, excluding leased employees and contractors. All eligible employees may elect to contribute up to an annual maximum of 100% of their annual compensation to the plan through salary deferrals, subject to Internal Revenue Service limits, but not greater than $20.5 per year (for certain employees over 50 years of age the maximum contribution is $27 per year).

The U.S. subsidiaries match amounts equal to 100% of the first 3% of the employee's compensation that they contribute to the defined contribution plan and 50% of the next 2% of their compensation that they contribute to the defined contribution plan with a limit of $12.2 per year per employee. For the years ended December 31, 2020, 2021 and 2022, the U.S. subsidiary recorded expenses for matching contributions of $3,533, $4,386 and $5,629, respectively.

n.Convertible senior notes:

For the years ended December 31, 2020 and 2021, the Company accounted for its convertible senior notes in accordance with ASC 470-20 "Debt with Conversion and Other Options". The Company allocated the principal amount of the convertible senior notes between its liability and equity component. The liability component at issuance is recognized at fair value, based on the fair value of a similar instrument of similar credit rating and maturity that does not have a conversion feature. The equity component is based on the excess of the principal amount of the convertible senior notes over the fair value of the liability component and is recorded in additional paid-in capital. The equity component, net of issuance costs and deferred tax effects is presented within additional paid-in-capital and is not remeasured. The Company allocated the total issuance costs incurred to the liability and equity components of the convertible senior notes based on the same proportions as the proceeds from the notes.

Relating to the convertible senior notes issued in 2019, issuance costs attributable to the liability and equity components were $12.9 million and $2.0 million, respectively. Issuance costs attributable to the liability are netted against the principal balance and are amortized to interest expense using the effective interest method over the contractual term of the notes. The effective interest rate of the liability component of the notes is 3.50%. Issuance costs attributable to the equity component are netted with the equity component in additional paid-in capital.

On January 1, 2022, the Company adopted ASU 2020-06, “Debt - Debt with Conversion and Other Options (subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (subtopic 815-40), which simplifies the accounting for convertible senior notes (see Note 2ac).

o.Revenue recognition:

The Company substantially generates revenues from providing the right to access its SaaS solutions and licensing the rights to use its software products, maintenance and professional services. Subscription revenues include Software as a Service ("SaaS") offerings and on-premises subscription (“Self-hosted subscription”). The Company sells its products through its direct sales force and indirectly through resellers. Payment is typically due within 30 to 90 calendar days of the invoice date. 

The Company recognizes revenues in accordance with ASC No. 606, "Revenue from Contracts with Customers" ("ASC No. 606"). As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenues when (or as) the Company satisfies a performance obligation.

The Company enters into contracts that can include combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations and may include an option to provide additional products or services. The perpetual license and self-hosted subscription are distinct as the customer can derive the economic benefit of the software without any professional services, updates or technical support. 

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer. The Company does not grant a right of return to its customers.

In instances of contracts where revenue recognition differs from the timing of invoicing, the Company generally determined that those contracts do not include a significant financing component. The primary purpose of the invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company's products and services, not to receive or provide financing. The Company uses the practical expedient and does not assess the existence of a significant financing component when the difference between payment and revenue recognition is a year or less.

 

The Company records unbilled receivables from contracts when the revenue recognized exceeds the amount billed to the customer. As of December 31, 2021 and 2022, $12,517 and $10,318 short-term unbilled receivables are included in trade receivables, respectively, and $1,873 and $928 long-term unbilled receivables are included in other long-term assets, respectively.

The Company allocates the transaction price to each performance obligation based on its relative standalone selling price. For maintenance, the Company determines the standalone selling price based on the price at which the Company separately sells a renewal contract. For professional services, the Company determines the standalone selling prices based on the prices at which the Company separately sells those services. For SaaS, self-hosted subscription and perpetual license products, the Company determines the standalone selling prices by taking into account available information such as historical selling prices, contract value, geographic location, and the Company's price list and discount policy.

Perpetual license and the license portion of self-hosted subscription are recognized at the point of time when the license is made available for download by the customer. Maintenance revenue related to perpetual license contracts and the maintenance component of the self-hosted subscription offering as well as SaaS revenues are recognized ratably, on a straight-line basis over the term of the related contract, which is generally one to three years. Professional services revenues substantially are recognized as the services are performed.

The following table presents the Company's revenue by category:

 

  

Year ended

December 31,

  

 

  

2020

    

2021

    

2022

  

 

                        

SaaS

  

$

 24,305    

$

 69,303    

$

 166,361  

Self-hosted subscription*

     32,120       65,325       114,288  

Perpetual license

     176,061       115,738       49,964  

Maintenance and support

     190,897       214,036       217,695  

Professional services

     41,048       38,515       43,402  

 

                        

 

   $ 464,431     $ 502,917     $ 591,710  

* Self-hosted subscription also includes maintenance associated with self-hosted subscriptions.

For additional information regarding disaggregated revenues, please refer to Note 16 below.

Contract liabilities consist of deferred revenue and include unearned amounts received under maintenance and support contracts and professional services that do not meet the revenue recognition criteria as of the balance sheet date. Contract liabilities also include unearned, invoiced amounts in respect of SaaS and self-hosted subscription contracts whereby there is an unconditional right for the consideration. Deferred revenues are recognized as (or when) the Company performs under the contract. During the year ended December 31, 2022, the Company recognized $221,134 that were included in the deferred revenues balance as of December 31, 2021.

Remaining Performance Obligations:

Transaction price allocated to remaining performance obligations represents non-cancelable contracts that have not yet been recognized, which includes deferred revenues and amounts not yet received that will be recognized as revenue in future periods.

The aggregate amount of the transaction price allocated to remaining performance obligations was $713 million as of December 31, 2022, out of which, the Company expects to recognize approximately 60% in 2023 and the remainder thereafter.

p.Deferred contract costs:

The Company pays sales commissions primarily to sales and certain management personnel based on their attainment of certain predetermined sales goals. Sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions paid for initial contracts, which are not commensurate with sales commissions paid for renewal contracts, are capitalized and amortized over an expected period of benefit. Based on its technology, customer contracts and other factors, the Company has determined the expected period of benefit to be approximately five years. Sales commissions for initial contracts, which are commensurate with sales commissions paid for renewal contracts, are capitalized and amortized correspondingly to the recognized revenue of the related initial contracts. Sales commissions for renewal contracts are capitalized and amortized over the related contractual renewal period and aligned with the revenue recognized from these contracts. Amortization expense of these costs are substantially included in sales and marketing expenses.

For the year ended December 31, 2021 and 2022, the amortization of deferred contract costs was $43,236 and $45,254, respectively.

As of December 31, 2021 and 2022, the Company presented deferred contract costs from contracts which are for periods of less than 12 months of $801 and $1,713 in prepaid expenses and other current assets, respectively, and deferred contract costs in respect of contracts which are greater than 12 months of $96,619 and $138,907 in other long-term assets, respectively. 

 

q.Trade Receivable and Allowances:

 

Trade receivables include original invoiced amounts less an allowance for any potential uncollectible amounts and less invoiced amounts from maintenance and professional services contracts which haven't been recognized yet. Trade receivables also include unbilled receivables amounts that will be paid in the following year. The Company makes estimates of expected credit losses for the allowance for doubtful accounts based upon its assessment of various factors, including historical experience, the age of the trade receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The estimated credit loss allowance is recorded as general and administrative expenses on the Company's consolidated statements of comprehensive loss.

r.Leases:

In accordance with (ASU) No. 2016-02, "Leases" (Topic 842)", the Company determines if an arrangement is a lease and the classification of that lease at inception based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefits from the use of the asset throughout the period, and (3) whether the Company has a right to direct the use of the asset. The Company elected to not recognize a lease liability and a right-of-use ("ROU") asset for leases with a term of twelve months or less. The Company also elected the practical expedient to not separate lease and non-lease components for its leases.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make minimum lease payments arising from the lease. ROU assets are initially measured at amounts, which represents the discounted present value of the lease payments over the lease, plus any initial direct costs incurred. The lease liability is initially measured at lease commencement date based on the discounted present value of minimum lease payments over the lease term. The implicit rate within the operating leases is generally not determinable, therefore the Company uses its Incremental Borrowing Rate ("IBR") based on the information available at commencement date in determining the present value of lease payments. The Company's IBR is estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset is located. Certain leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option.

Payments under the Company's lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease right-of-use assets and liabilities. Variable lease payments are primarily comprised of payments affected by common area maintenance and utility charges.

 

s.Research and development costs:

Research and development costs are charged to the statements of comprehensive loss as incurred except to the extent that such costs are associated with internal-use software that qualifies for capitalization.

ASC No. 985-20, "Software - Costs of Software to Be Sold, Leased, or Marketed," requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. Based on the Company's product development process, technological feasibility is established upon completion of a working model. Costs incurred by the Company between completion of the working model and the point at which the product is ready for general release, have been insignificant.

t.Internal use software and website development cost:

The Company capitalizes qualifying costs associated with the development of its website and incurred during the application development stage related to software developed for internal-use in accordance with ASC No. 350-40 "Internal-use Software" ("ASC No. 350-40"). These costs are capitalized based on qualifying criteria. Such costs are amortized over the software's estimated life of three to five years. Costs incurred to develop software applications consist of (a) certain external direct costs of materials and services incurred in developing or obtaining internal-use computer software, and (b) payroll and payroll-related costs for employees who are directly associated with, and who devote time to, the development or implementation of the software. Capitalized internal-use software and website costs are included in property and equipment, net in the consolidated balance sheets.

The Company also capitalizes implementation costs incurred in a cloud computing arrangement that is a service contract. The capitalized implementation costs and their related amortization and cash flows are presented on the financial statements in consistent with the prepaid amounts and fees related to the associated cloud computing arrangement. Capitalized implementation costs are amortized over the term of the arrangement, beginning when the module or component of the cloud computing arrangement that is a service contract is ready for its intended use.

u. Advertising and marketing expenses:

Advertising and marketing expenses consist primarily of marketing campaigns and tradeshows. Advertising and marketing expenses are charged to the statement of comprehensive loss, as incurred. Advertising and marketing expenses for the years ended December 31, 2020, 2021 and 2022, amounted to $22,082, $27,504 and $34,438, respectively.

 

v.Share-based compensation:

The Company accounts for share-based compensation in accordance with ASC No. 718, "Compensation - Stock Compensation" ("ASC No. 718"). ASC No. 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the award is recognized as an expense over the requisite service periods, which is generally the vesting period of the respective award, on a straight-line basis when the only condition to vesting is continued service. If vesting is subject to a performance condition, recognition is based on the implicit service period of the award. Expense for awards with performance conditions is estimated and adjusted on a quarterly basis based upon the assessment of the probability that the performance condition will be met and is recognized on a graded vesting basis.

The Company has selected the Black-Scholes-Merton option-pricing model as the most appropriate fair value method for its option awards and Employee Share Purchase Plan ("ESPP"). The fair value of Restricted Share Units ("RSUs ") and Performance Share Units ("PSUs ") without market conditions, is based on the closing market value of the underlying shares at the date of grant. For PSUs subject to market conditions, the Company uses a Monte Carlo simulation model, which utilizes multiple inputs to estimate payout level and the probability that market conditions will be achieved.

The Black-Scholes-Merton and Monte Carlo models require a number of assumptions, of which the most significant are the expected share price volatility and the expected option term. The Company recognizes forfeitures of equity-based awards as they occur. For graded vesting awards subject to service conditions, the Company recognizes compensation cost using the straight-line attribution method.

w.Income taxes:

The Company accounts for income taxes in accordance with ASC No. 740-10, "Income Taxes" ("ASC No. 740-10"). ASC No. 740-10 prescribes the use of the asset and liability method whereby deferred tax asset and liability account balances are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company established reserves for uncertain tax positions based on the evaluation of whether or not the Company's uncertain tax position is "more likely than not" to be sustained upon examination based on its technical merits. The Company records interest and penalties pertaining to its uncertain tax positions in the financial statements as income tax expense.

 

x.Basic and diluted net loss per share:

Basic net loss per ordinary share is computed by dividing net loss for each reporting period by the weighted-average number of ordinary shares outstanding during each year. Diluted net loss per ordinary share is computed by dividing net loss for each reporting period by the weighted average number of ordinary shares outstanding during the period, plus dilutive potential ordinary shares considered outstanding during the period, in accordance with ASC No. 260-10 "Earnings Per Share". The Company experienced a loss in the years ended December 31, 2021 and 2022; hence all potentially dilutive ordinary shares were excluded due to their anti-dilutive effect.

y.Comprehensive income (loss):

The Company accounts for comprehensive income (loss) in accordance with ASC No. 220, "Comprehensive Income." This statement establishes standards for the reporting and display of comprehensive income (loss) and its components in a full set of general purpose financial statements. Comprehensive income (loss) generally represents all changes in shareholders' equity during the period, except changes resulting from investments by, or distributions to, shareholders.

z.Concentration of credit risks:

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term bank deposits, marketable securities, trade receivables, severance pay funds and derivative instruments.

The majority of the Company's cash and cash equivalents and short-term bank deposits are invested with major banks in Israel and the United States. Such investments in the United States are in  excess of insured limits and are not insured in other jurisdictions. Generally, these investments may be redeemed upon demand and the Company believes that the financial institutions that hold the Company's cash deposits are financially sound and, accordingly, bear minimal risk.

The Company's marketable securities consist of investments, which are highly rated by credit agencies, in government, corporate and government sponsored enterprises debentures. The Company's investment policy limits the amount that the Company may invest in any one type of investment or issuer, in order to reduce credit risk concentrations.

The trade receivables of the Company are mainly derived from sales to a diverse set of customers located primarily in the United States, Europe and Asia. The Company performs ongoing credit evaluations of its customers and, to date, has not experienced any significant losses.

The Company has entered into forward contracts with major banks in Israel to protect against the risk of changes in exchange rates. The derivative instruments hedge a portion of the Company's non-dollar currency exposure.

 

aa.Fair value of financial instruments:

The estimated fair value of financial instruments has been determined by the Company using available market information and valuation methodologies. Considerable judgment is required in estimating fair values. Accordingly, the estimates may not be indicative of the amounts the Company could realize in a current market exchange.

The following methods and assumptions were used by the Company in estimating the fair value of their financial instruments:

The carrying values of cash and cash equivalents, short-term bank deposits, trade receivables, prepaid expenses and other long-term and current assets, trade payables, employees and payroll accruals and accrued expenses and other current liabilities approximate their fair values due to the short-term maturities of these instruments.

The Company applies ASC No. 820, "Fair Value Measurements and Disclosures" ("ASC No. 820"), with respect to fair value measurements of all financial assets and liabilities.

The fair value of foreign currency contracts (used for hedging purposes) is estimated by obtaining current quotes from banks and third-party valuations.

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

 

Level 1 -

Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date.
   
 

Level 2 -

Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.
   
 

Level 3 -

Inputs are unobservable inputs based on the Company's own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

 

In accordance with ASC No. 820, the Company measures its foreign currency derivative instruments, at fair value using the market approach valuation technique. Foreign currency derivative contracts as detailed in Note 2k are classified within Level 2 value hierarchy, as the valuation inputs are based on quoted prices and market observable data of similar instruments.

As of December 31, 2022, the estimated fair value of the Company’s convertible senior notes, net as further described in Note 11, was determined based on the closing quoted price of the convertible senior note, net as of the last day of trading for the period, and is considered Level 2 measurement.

ab.Investments in privately held companies:

The Company holds equity investments, in which it does not have control or significant influence, in private companies without readily determinable fair values. These investments are measured using the measurement alternative, which is cost, less any impairment, adjusted for changes in fair value are resulted from observable transactions for identical or similar investments of the same issuer. The investments are reviewed periodically to determine if impairments or adjustments to the fair value are needed. Adjustments and impairments are recorded in financial income, net on the consolidated statements of comprehensive loss.

The investments in privately held companies are included in Other long-term assets on the consolidated balance sheets.

ac.Recently adopted accounting standards:

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): "Simplifying the Accounting for Income Taxes". The new standard simplifies the accounting for income taxes. The guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted the standard beginning January 1, 2021. The standard did not have a material impact on the consolidated financial statements. 

In August 2020, the FASB issued (“ASU”) 2020-06, “Debt - Debt with Conversion and Other Options (subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (subtopic 815-40),” The new standard reduces the number of accounting models in ASC 470-20 that require separate accounting for non-bifurcated embedded conversion features. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the effective interest rate of convertible debt instruments will be closer to the coupon interest rate. Further, the diluted net loss per share calculation for convertible instruments will require the Company to use the if-converted method. The treasury stock method should no longer be used to calculate diluted net loss per share for convertible instruments.

 

The Company adopted ASU 2020-06 as of January 1, 2022 using the modified retrospective method. As a result, the convertible notes' previously recognized equity component was combined with the liability component and the convertible notes will be accounted for as a single unit of account. The adoption of ASU 2020-06 resulted in an increase of retained earnings in an amount of $26,602, a decrease of additional paid-in capital in an amount of $65,932, an increase of convertible senior notes, net, in an amount of $46,270 and a decrease of deferred tax liabilities, net, in an amount of $6,940. 

The impact of adoption on the consolidated statements of comprehensive loss for the year ended December 31, 2022 compared to the year ended December 31, 2021 was a decrease in financial expenses by $14,812. This had the effect of decreasing basic and diluted net loss per share for the year ended December 31, 2022 by $0.36.

In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance.” The new standard improves the transparency of government assistance received by most business entities by requiring the disclosure of: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity's financial statements. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2021. The adoption of this ASU did not have a significant impact on the Company’s financial statements and disclosures.

ad.Recently issued accounting standards:

In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers". The standard requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. This ASU is currently not expected to have a material impact on our consolidated financial statements.

ae.Reclassification:

Certain comparative figures have been reclassified to conform to the current year presentation. Also, beginning in the first quarter of 2021, the Company revised the presentation of its lines of revenue and cost of revenue. The Company believes that the revised categories for revenue and cost of revenue as presented on the income statement align with how management evaluates the business and the shift toward recurring revenues. The new revenue lines consist of (a) Subscription revenue, which represents SaaS and self-hosted subscription revenue including the license portion of self-hosted subscription revenue and the ratable maintenance component of self-hosted subscription revenue, (b) Perpetual license revenue and (c) Maintenance and professional services revenue, which represents the maintenance component related to perpetual license sales and professional services revenue.
v3.22.4
MARKETABLE SECURITIES
 12 Months Ended
Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]  
MARKETABLE SECURITIES

NOTE 3:-MARKETABLE SECURITIES

The following tables summarize the amortized cost, unrealized gains and losses, and fair value of available-for-sale marketable securities as of December 31, 2021 and 2022:

 

 

December 31, 2021

 

 

 

Amortized

cost

 

 

Gross

unrealized

losses *)

 

 

Gross

unrealized

gains

 

 

Fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debentures

 

$

453,927

 

 

$

(1,493

)

 

$

881

 

 

$

453,315

 

Government debentures

 

 

47,450

 

 

 

(254

)

 

 

84

 

 

 

47,280

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

501,377

 

 

$

(1,747

)

 

$

965

 

 

$

500,595

 

*) Out of the total unrealized losses, an amount of $16 has been in a continuous unrealized loss position for twelve months or longer.

 

 

December 31, 2022

 

 

 

Amortized

cost

 

 

Gross

unrealized

losses*)

 

 

Gross

unrealized

gains

 

 

Fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debentures

 

$

414,278

 

 

$

(12,223

)

 

$

111

 

 

$

402,166

 

Government debentures

 

 

128,686

 

 

 

(2,006

)

 

 

3

 

 

 

126,683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

542,964

 

 

$

(14,229

)

 

$

114

 

 

$

528,849

 

 

*) Out of the total unrealized losses, an amount of $8,450 has been in a continuous unrealized loss position for twelve months or longer.

 

The following table summarizes the amortized cost and fair value of available-for-sale marketable securities as of December 31, 2021 and 2022, by contractual years-to maturity:

 

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

Amortized

cost

 

 

Fair value

 

 

Amortized

cost

 

 

Fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Due within one year

 

$

199,883

 

 

$

199,933

 

 

$

304,597

 

 

$

301,101

 

Due between one and five years

 

 

301,494

 

 

 

300,662

 

 

 

238,367

 

 

 

227,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

501,377

 

 

$

500,595

 

 

$

542,964

 

 

$

528,849 
v3.22.4
PREPAID EXPENSES AND OTHER CURRENT ASSETS
 12 Months Ended
Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
PREPAID EXPENSES AND OTHER CURRENT ASSETS

NOTE 4: PREPAID EXPENSES AND OTHER CURRENT ASSETS

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

Prepaid expenses

 

$

15,566

 

 

$

15,167

 

Hedging transaction assets

 

 

2,069

 

 

 

121

 

Government authorities

 

 

3,365

 

 

 

3,431

 

Deferred contract costs

 

 

801

 

 

 

1,713

 

Other current assets

 

 

424

 

 

 

2,050

 

 

 

 

 

 

 

 

 

 

 

 

$

22,225

 

 

$

22,482

 
v3.22.4
PROPERTY AND EQUIPMENT, NET
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT, NET

NOTE 5:-PROPERTY AND EQUIPMENT, NET

The composition of property and equipment, net is as follows:

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

Cost:

 

 

 

 

 

 

Computers, software and related equipment *)

 

$

35,290

 

 

$

43,300

 

Leasehold improvements

 

 

7,739

 

 

 

10,087

 

Office furniture and equipment

 

 

4,090

 

 

 

4,273

 

 

 

 

 

 

 

 

 

 

 

 

 

47,119

 

 

 

57,660

 

 

 

 

 

 

 

 

 

 

Less - accumulated depreciation

 

 

26,936

 

 

 

34,186

 

 

 

 

 

 

 

 

 

 

Depreciated cost

 

$

20,183

 

 

$

23,474

 

*) For the years ended December 31, 2021 and 2022, the Company capitalized $4,160 and $4,929 including $569 and $758 of share-based compensation costs, relating to its internal use software and website development, respectively.

Depreciation expense amounted to $6,634, $8,418 and $9,548 for the years ended December 31, 2020, 2021, and 2022 including $421, $1,471 and $2,137 relating to its internal use software and website development, respectively.
v3.22.4
GOODWILL AND OTHER INTANGIBLE ASSETS, NET
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS, NET

NOTE 6:-GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Changes in the carrying amount of goodwill:

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

Balance as of beginning of the year

 

$

123,717

 

 

$

123,717

 

Goodwill acquired

 

 

-

 

 

 

29,524

 

 

 

 

 

 

 

 

 

 

Closing balance

 

$

123,717

 

 

$

153,241

 

The composition of intangible assets is as follows:

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

Original amount:

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology

 

$

39,625

 

 

$

55,922

 

Customer relationships

 

 

9,586

 

 

 

9,586

 

Other

 

 

664

 

 

 

664

 

 

 

 

 

 

 

 

 

 

 

 

 

49,875

 

 

 

66,172

 

 

 

 

 

 

 

 

 

 

Less - accumulated amortization

 

 

32,009

 

 

 

38,664

 

 

 

 

 

 

 

 

 

 

Intangible assets, net

 

$

17,866

 

 

$

27,508

 

Amortization expense amounted to $8,841, $5,810 and $6,655 for the years ended December 31, 2020, 2021, and 2022, respectively.

As of December 31, 2022, the weighted-average remaining useful lives (in years) of Technology and Customer relationships was 3.9 and 8.9, respectively.

The estimated future amortization expense of intangible assets as of December 31, 2022 is as follows:

2023

 

 

7,365

 

2024

 

 

7,318

 

2025

 

 

4,885

 

2026

 

 

3,477

 

2027

 

 

2,563

 

Thereafter

 

 

1,900

 

 

 

 

 

 

 

 

$

27,508

 
v3.22.4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
 12 Months Ended
Dec. 31, 2022
Payables and Accruals [Abstract]  
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

NOTE 7:-ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

Government authorities

 

$

3,839

 

 

$

5,682

 

Accrued expenses

 

 

8,771

 

 

 

12,236

 

Unrecognized tax benefits

 

 

3,870

 

 

 

2,805

 

Lease liabilities, current

 

 

6,974

 

 

 

7,857

 

Hedging transaction liabilities

 

 

122

 

 

 

5,004

 

 

 

 

 

 

 

 

 

 

 

 

$

23,576

 

 

$

33,584

 
v3.22.4
COMMITMENTS AND CONTINGENT LIABILITIES
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENT LIABILITIES

NOTE 8:-COMMITMENTS AND CONTINGENT LIABILITIES

a.Legal contingencies:

 

From time to time, the Company becomes involved in legal proceedings or is subject to claims arising in its ordinary course of business. Such matters are generally subject to many uncertainties and outcomes are not predictable with assurance. The Company accrues for contingencies when the loss is probable and it can reasonably estimate the amount of any such loss. The Company is currently not a party to any material legal or administrative proceedings and is not aware of any material pending or threatened material legal or administrative proceedings against the Company.

 

b. Bank guarantees:

 

The Company obtained bank guarantees of $2,189 primarily in connection with office lease agreements.

 

c. Non-cancelable material purchase obligations:

 

The Company entered into non-cancelable material agreements for the receipt of cloud infrastructure services and subscription-based cloud services. Future payments under non-cancelable material purchase obligations as of December 31, 2022 are as follows:

 

2023
    
22,415
  
2024
    
8,942
  
2025
    
2,051
  
         
   
$
33,408
  
v3.22.4
LEASES
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
LEASES

NOTE 9:-LEASES

The Company entered into operating leases primarily for offices. The leases have remaining lease terms of up to 7 years, some of which may include options to extend the leases for up to an additional 5 years.

The components of operating lease costs were as follows:

 

 

Year ended

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

7,224

 

 

$

7,522

 

Short-term lease cost

 

 

1,188

 

 

 

1,326

 

Variable lease cost

 

 

1,302

 

 

 

1,342

 

Sublease income

 

 

(195

)

 

 

-

 

 

 

 

 

 

 

 

 

 

Total net lease costs

 

$

9,519

 

 

$

10,190

 

Supplemental balance sheet information related to operating leases is as follows:

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

Operating lease ROU assets (under other long-term assets in the balance sheets)

 

$

14,159

 

 

$

37,857

 

Operating lease liabilities, current

 

$

6,974

 

 

$

7,857

 

Operating lease liabilities, long-term (under other long-term liabilities in the balance sheets)

 

$

10,239

 

 

$

28,874

 

Weighted average remaining lease term (in years)

 

 

2.9

 

 

 

5.7

 

Weighted average discount rate

 

 

1.7

%

 

 

2.8

%

Lease liability as of December 31, 2022, are as follows:

 

 

December 31, 2022

 

 

 

 

 

 

2023

 

 

7,691

 

2024

 

 

7,384

 

2025

 

 

6,663

 

2026

 

 

5,717

 
2027    

5,174

  

Thereafter

 

 

6,670

 

 

 

 

 

 

Total undiscounted lease payments

 

 

39,299

 

Less: imputed interest

 

 

(2,568

)

 

 

 

 

 

Present value of lease liabilities

 

$

36,731

 
v3.22.4
FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

NOTE 10:-FAIR VALUE MEASUREMENTS

 

The following tables present the fair value of money market funds and marketable securities as of December 31, 2021 and 2022:

 

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

Level 1

 

 

Level 2

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Total

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

204,367

 

 

$

-

 

 

$

204,367

 

 

$

206,228

 

 

$

-

 

 

$

206,228

 

Corporate debentures

 

 

-

 

 

 

1,818

 

 

 

1,818

 

 

 

-

 

 

 

-

 

 

 

-

 

Commercial paper

 

 

-

 

 

 

14,076

 

 

 

14,076

 

 

 

-

 

 

 

2,998

 

 

 

2,998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debentures and commercial paper

 

 

-

 

 

 

453,315

 

 

 

453,315

 

 

 

-

 

 

 

402,166

 

 

 

402,166

 

Government debentures

 

 

-

 

 

 

47,280

 

 

 

47,280

 

 

 

-

 

 

 

126,683

 

 

 

126,683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets measured at fair value

 

$

204,367

 

 

$

516,489

 

 

$

720,856

 

 

$

206,228

 

 

$

531,847

 

 

$

738,075

 

 

As of December 31, 2022, the estimated fair value of the Company's convertible senior notes, as further described in Note 11, was $599.7 million. The fair value was determined based on the closing quoted price of the convertible senior notes as of the last day of trading for the period, and is considered Level 2 measurement. The fair value of the convertible senior notes is primarily affected by the trading price of the Company`s common stock and market interest rates.
v3.22.4
CONVERTIBLE SENIOR NOTES, NET
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
CONVERTIBLE SENIOR NOTES, NET

NOTE 11:-CONVERTIBLE SENIOR NOTES, NET

a.Convertible senior notes, net:

In November 2019, the Company issued $500 million aggregate principal amount, 0% coupon rate, of convertible senior notes due 2024 and an additional $75 million aggregate principal amount of such notes pursuant to the exercise in full of the over-allotment option of the initial purchasers (collectively, "Convertible Notes").

The Convertible Notes are convertible based upon an initial conversion rate of 6.3478 of the Company's ordinary shares, par value NIS 0.01 per share per $1 principal amount of Convertible Notes (equivalent to a conversion price of approximately $157.53 per ordinary share). The conversion rate will be subject to adjustment upon the occurrence of certain specified events. The Convertible Notes are senior unsecured obligations of the Company.

The Convertible Notes will mature on November 15, 2024 (the "Maturity Date"), unless earlier repurchased, redeemed or converted. Prior to May 15, 2024, a holder may convert all or a portion of its Convertible Notes only under the following circumstances:

(1)

During any calendar quarter commencing after the calendar quarter ending on March 31, 2020 (and only during such calendar quarter), if the last reported sale price of the Company's ordinary shares for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
   
(2)

During the five business day period after any 10 consecutive trading day period ("measurement period") in which the trading price, determined pursuant to the terms of the Convertible Notes, per $1 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the ordinary shares and the conversion rate on each such trading day;
   
(3)

If the Company calls such Convertible Notes for redemption in certain circumstances, at any time prior to the close of business on the third scheduled trading day immediately preceding the redemption date; or
   
(4)

Upon the occurrence of specified corporate events.

On or after May 15, 2024 until the close of business on the third scheduled trading day immediately preceding the Maturity Date, a holder may convert its Convertible Notes at any time, regardless of the foregoing circumstances.

Upon conversion, the Company can pay or deliver cash, ordinary shares or a combination of cash and ordinary shares, at the Company's election.

b.The Company may not redeem the notes prior to November 15, 2022, except in the event of certain tax law changes. The Company may, at any time and from time to time, redeem for cash all or any portion of the notes, at the Company's option, on or after November 15, 2022, if the last reported sale price of the Company`s ordinary shares has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which it delivers notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed.

Upon the occurrence of a Fundamental Change as defined in the Indenture, holders may require the Company to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased (plus accrued and unpaid special interest payable under certain circumstances set forth in the terms of the Convertible Notes (if any) to, but excluding, the fundamental change repurchase date). In addition, in connection with a make-whole fundamental change (as defined in the Indenture), or following the Company's delivery of a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its notes in connection with such a corporate event or redemption, as the case may be.

 

During the year ended December 31, 2022, the conditions allowing holders of the Notes to convert were not met. The Notes are therefore not convertible as of December 31, 2022 and are classified as long-term liability.

The net carrying amount of the liability and equity components of the Convertible Notes as of December 31, 2021 and 2022 is as follows:

 

 

December 31,

 

 

 

2021

 

 

2022

 

Liability component:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal amount

 

$

575,000

 

 

$

575,000

 

Adjustment from Adoption of ASU 2020-06

     -      

46,270

  

Unamortized discount

 

 

(46,976

)

 

 

(46,270

)

Unamortized issuance costs

 

 

(7,930

)

 

 

(5,656

)

 

 

 

 

 

 

 

 

 

Net carrying amount

 

$

520,094

 

 

$

569,344

 

 

 

 

 

 

 

 

 

 

Equity component, net of issuance costs of $2,046 and deferred taxes of $11,022

 

$

65,932

 

 

$

-

 

Interest expense related to the Convertible Notes was as follows:

 

 

Year ended

December 31,

 

 

 

2021

 

 

2022

 

Amortization of debt discount

 

$

15,380

 

 

$

-

 

Amortization of debt issuance costs

 

 

2,412

 

 

 

2,980

 
                 

Total interest expense recognized

 

$

17,792

 

 

$

2,980

 

 

c.Capped Call Transactions:

 

In connection with the pricing of the Convertible Notes and the exercise by the Initial Purchasers of the over-allotment option, the Company entered into privately negotiated capped call transactions ("Capped Call Transactions") with certain financial institutions ("Option Counterparties"). The Capped Call Transactions cover, collectively, the number of the Company's ordinary shares underlying the Convertible Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Convertible Notes.

The Capped Call Transactions have an initial strike price of approximately $157.53 per share, subject to certain adjustments, which corresponds to the approximate initial conversion price of the Convertible Notes.

The cap price of the Capped Call Transactions is initially $229.14 per share and is subject to certain adjustments under the terms of the Capped Call Transactions. The Capped Call Transactions are separate transactions, in each case, entered into by the Company with the Option Counterparties, and are not part of the terms of the Convertible Notes and will not change the holders' rights under the Convertible Notes.

 

As the Capped Call Transactions are considered indexed to the Company's stock and are considered equity classified, they are recorded in shareholders' equity on the consolidated balance sheet and are not accounted for as derivatives. The cost of the Capped Call Transactions was approximately $53.6 million and was recorded as a reduction to additional paid-in capital.
v3.22.4
SHAREHOLDERS' EQUITY
 12 Months Ended
Dec. 31, 2022
Stockholders' Equity Note [Abstract]  
SHAREHOLDERS' EQUITY

NOTE 12:-SHAREHOLDERS' EQUITY

a.Composition of share capital of the Company:

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

Authorized

 

 

Issued and

outstanding

 

 

Authorized

 

 

Issued and

outstanding

 

 

 

Number of shares

 

Ordinary shares of NIS 0.01 par value each

 

 

250,000,000

 

 

 

40,041,870

 

 

 

250,000,000

 

 

 

41,028,571

 

b.Ordinary shares:

The ordinary shares of the Company confer upon the holders the right to receive notices of and to participate and vote in general meetings of the Company, rights to receive dividends and rights to participate in distribution of assets upon liquidation.

c.Share-based compensation:

 

On January 1, 2021, the Company's ESPP became effective. The ESPP enables eligible employees and eligible employees of designated subsidiaries to elect to have payroll deductions made during a six-month offering period in an amount not exceeding 15% of the gross base compensation which the employees receive. The total number of ordinary shares initially reserved under the ESPP as of January 1, 2021 was 125,000 shares ("the ESPP Share Pool"). In connection with establishing the ESPP, the Company correspondingly reduced the number of shares available under the Company's 2014 share incentive plan (the "2014 Plan") by 125,000. On January 1 of each year between 2022 and 2026 the ESPP Share Pool will be increased by a number of ordinary shares equal to the lowest of (i) 1,000,000 shares, (ii) 1% of the Company’s outstanding shares on December 31 of the immediately preceding calendar year, and (iii) a lesser number of shares determined by the Company’s board of directors. As of December 31, 2022, 6,898 ordinary shares were reserved for issuance under the ESPP. On January 1, 2023, the aggregate number of ordinary shares reserved for issuance under the ESPP was increased by 200,000 shares. The applicable purchase price will be no less than 85% of the lesser of the fair market value of the Company’s ordinary shares on the first day or the last day of the purchase period.

Under the 2014 Plan and ESPP, options, RSUs, PSUs and other share-based awards may be granted to employees, officers, non-employee consultants and directors of the Company.

Under the 2014 Plan and ESPP, as of December 31, 2022, an aggregate number of 1,303,628 ordinary shares were reserved for future grant. Any share underlying an award that is cancelled, terminated or forfeited for any reason without having been exercised will automatically be available for grant under the 2014 Plan.

The total share-based compensation expense related to all of the Company's equity-based awards, recognized for the years ended December 31, 2020, 2021 and 2022 is comprised as follows:

 

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

$

8,734

 

 

$

11,158

 

 

$

15,060

 

Research and development

 

 

14,691

 

 

 

20,498

 

 

 

27,102

 

Sales and marketing

 

 

28,220

 

 

 

38,546

 

 

 

51,099

 

General and administrative

 

 

20,204

 

 

 

25,234

 

 

 

27,560

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total share-based compensation expense

 

$

71,849

 

 

$

95,436

 

 

$

120,821

 

The total unrecognized compensation cost amounted to $239,489 as of December 31, 2022 and is expected to be recognized over a weighted average period of 2.59 years.

d.Options granted to employees:

A summary of the activity in options granted to employees for the year ended December 31, 2022 is as follows:

 

 

Amount

of

options

 

 

Weighted

average

exercise

price

 

 

Weighted

average

remaining

contractual

term

(in years)

 

 

Aggregate

intrinsic

value

 
                                 

Balance as of December 31, 2021

 

 

460,852

 

 

 

68.78

 

 

 

5.44

 

 

 

48,261

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

21,900

 

 

 

157.22

 

 

 

 

 

 

 

 

 

Exercised

 

 

33,493

 

 

 

54.97

 

 

 

 

 

 

 

 

 

Forfeited

 

 

8,375

 

 

 

169.55

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2022

 

 

440,884

 

 

 

72.31

 

 

 

4.59

 

 

 

26,338

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable as of December 31, 2022

 

 

398,350

 

 

 

64.81

 

 

 

4.16

 

 

 

26,034

 

The expected volatility of the Company's common stock is based on the Company's historical volatility. The expected option term represents the period of time that options granted are expected to be outstanding, based upon historical experience.

 

The Company has historically not paid dividends and has no foreseeable plans to pay dividends and, therefore, uses an expected dividend yield of zero in the option pricing model. The risk-free interest rate is based on the yield of U.S. treasury bonds with equivalent terms.

 

The following tables sets forth the parameters used in computation of the options and ESPP compensation to employees for the years ended December 31, 2020, 2021 and 2022:

 

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

Options

 

 

 

 

 

 

 

 

 
                         

Expected volatility

 

 

40%-41%

 

 

 

44%-46%

 

 

 

46%-50%

 

Expected dividends

 

 

0%

 

 

 

0%

 

 

 

0%

 

Expected term (in years)

 

 

4.02-4.20

 

 

 

3.65-3.88

 

 

 

3.73-3.76

 

Risk free rate

 

 

0.22%-1.61%

 

 

 

0.49%-0.99%

 

 

 

1.67%-4.40%

 
       

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

ESPP

 

 

 

 

 

 

 

 

 
                         

Expected volatility

 

 

-

 

 

 

33.63%

 

 

 

55.67%-64.20%

 

Expected dividends

 

 

-

 

 

 

0%

 

 

 

0%

 

Expected term (in years)

 

 

-

 

 

 

0.5

 

 

 

0.5

 

Risk free rate

 

 

-

 

 

 

0.1%

 

 

 

2.15%-4.65%

 

 

A summary of options data for the years ended December 31, 2020, 2021 and 2022, is as follows:

 

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Weighted-average grant date fair value of options granted

 

$

33.82

 

 

$

55.50

 

 

$

39.69

 

Total intrinsic value of the options exercised

 

$

18,790

 

 

$

20,742

 

 

$

30,031

 

 

The aggregate intrinsic value is calculated as the difference between the per-share exercise price and the fair value of an ordinary share for each share subject to an option multiplied by the number of shares subject to options at the date of exercise.

e.A summary of RSUs and PSUs activity for the year ended December 31, 2022 is as follows:

 

 

Amount

of RSUs and

PSUs

 

 

Weighted

average

grant date

fair value

 

 

 

 

 

 

 

 

Unvested as of December 31, 2021

 

 

2,179,714

 

 

$

123.54

 

 

 

 

 

 

 

 

 

 

Granted

 

 

1,325,429

 

 

 

127.10

 

Vested

 

 

835,106

 

 

 

114.21

 

Forfeited

 

 

185,229

 

 

 

129.63

 

 

 

 

 

 

 

 

 

 

Unvested as of December 31, 2022

 

 

2,484,808

 

 

$

128.12

 

 

The total fair value of RSUs and PSUs vested (based on fair value of the Company's ordinary shares at vesting date) during the years ended December 31, 2020, 2021 and 2022 was $76,027, $113,918 and $117,812, respectively.
v3.22.4
INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 13:-INCOME TAXES

CyberArk Software Ltd.'s subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity.

a.Corporate tax in Israel:

Ordinary taxable income is subject to a corporate tax rate of 23% for the years 2020-2022.

b.Loss before taxes on Income is comprised as follows:

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Domestic loss

 

$

(12,643

)

 

$

(113,339

)

 

$

(167,606

)

Foreign income

 

 

12,254

 

 

 

22,010

 

 

 

30,588

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(389

)

 

$

(91,329

)

 

$

(137,018

)

c.Deferred income taxes:

Deferred taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts recorded for tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:

 

 

December 31,

 

 

 

2021

 

 

2022

 

Deferred tax assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Carry-forwards losses and credits

 

$

42,202

 

 

$

48,824

 

Capital losses carry-forwards

 

 

96

 

 

 

89

 

Research and development expenses

 

 

11,848

 

 

 

16,367

 

Deferred revenues

 

 

11,005

 

 

 

12,343

 

Intangible assets

 

 

7,730

 

 

 

9,063

 

Share-based compensation

 

 

15,046

 

 

 

21,024

 

Operating lease liability

 

 

1,088

 

 

 

5,691

 

Accruals and other

 

 

4,638

 

 

 

12,224

 

 

 

 

 

 

 

 

 

 

Gross deferred tax assets before valuation allowance

 

 

93,653

 

 

 

125,625

 

 

 

 

 

 

 

 

 

 

Less: Valuation allowance

 

 

20,614

 

 

 

21,741

 

 

 

 

 

 

 

 

 

 

Total deferred tax assets

 

$

73,039

 

 

$

103,884

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangible assets

 

$

2,189

 

 

$

2,892

 

Convertible senior notes

 

 

6,946

 

 

 

6

 

Deferred commission

 

 

14,969

 

 

 

21,885

 

Operating lease ROU asset

 

 

827

 

 

 

5,417

 

Property and equipment and other

 

 

941

 

 

 

875

 

 

 

 

 

 

 

 

 

 

Gross deferred tax liabilities

 

$

25,872

 

 

$

31,075

 
                 

Net deferred tax assets

 

$

47,167

 

 

$

72,809

 

As of December 31, 2022, $72,857 of undistributed earnings held by the Company's foreign subsidiaries are designated as indefinitely reinvested. If these earnings were repatriated to Israel, it would be subject to Israeli income taxes and to foreign withholding taxes and an adjustment for foreign tax credits.

d.Income taxes are comprised as follows:

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

7,357

 

 

$

4,589

 

 

$

8,980

 

Deferred

 

 

(1,988

)

 

 

(11,972

)

 

 

(15,630

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

5,369

 

 

$

(7,383

)

 

$

(6,650

)

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

$

(1,431

)

 

$

(12,171

)

 

$

(19,716

)

Foreign

 

 

6,800

 

 

 

4,788

 

 

 

13,066

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

5,369

 

 

$

(7,383

)

 

$

(6,650

)

e.A reconciliation of the Company's theoretical income tax expense (benefit) to actual income tax expense (benefit) is as follows:

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

$

(389

)

 

$

(91,329

)

 

$

(137,018

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Statutory tax rate

 

 

23.0

%

 

 

23.0

%

 

 

23.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Theoretical tax benefit

 

 

(89

)

 

 

(21,006

)

 

 

(31,514

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Excess tax benefits related to share-based compensation

 

 

(3,645

)

 

 

(4,424

)

 

 

(1,817

)

Non-deductible expenses

 

 

3,054

 

 

 

3,988

 

 

 

6,325

 

Intra-entity intellectual property transfer

     5,036       -       -  
Valuation allowance     -       1,896       1,538  

Unrecognized tax benefits

 

 

(322

)

 

 

(1,638

)

 

 

(1,914

)

Foreign and preferred enterprise tax rates differential

 

 

1,714

 

 

 

12,171

 

 

 

18,450

 

Impact of CARES Act

 

 

(683

)

 

 

-

 

 

 

-

 

Prior years and others

 

 

304

 

 

 

1,630

 

 

 

2,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (tax benefit)

 

$

5,369

 

 

$

(7,383

)

 

$

(6,650

)

f.Net operating loss carry-forwards:

As of December 31, 2022, the Company had net operating losses substantially derived from excess tax benefits from share-based payments and capital tax losses, totaling $132,285 and $436, respectively, out of which $119,657 and none of the losses, respectively, were federal net operating losses attributed to the U.S. subsidiary. The rest were attributed to Israel and can be carried forward indefinitely. Out of these federal net operating losses attributed to the U.S. subsidiary, $21,727 are limited to a carryforward period of up to 20-years. The remaining $97,930 can be carried forward indefinitely, but are subject to the 80% taxable income limitation upon utilization. Utilization of some of these U.S. net operating losses are subject to annual limitation due to the "change in ownership" provisions of the U.S. Internal Revenue Code and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.

g.Tax benefits under the Law for the Encouragement of Capital Investments, 1959:

As of December 31, 2022, approximately $14,452 was derived from tax exempt profits earned by the Company's "Approved Enterprises" and "Beneficiary Enterprise". The Company and its Board of Directors have determined that such tax-exempt income will not be distributed as dividends and intends to reinvest the amount of its tax-exempt income earned by the Company. Accordingly, no provision for deferred income taxes has been provided on income attributable to the Company's "Approved Enterprises" and "Beneficiary Enterprises" as such income is essentially permanently reinvested.

If the Company's retained tax-exempt income is distributed, the income would be taxed at the applicable corporate tax rate as if it had not elected the alternative tax benefits under the Law for the Encouragement of Capital Investments ("Investment Law") and an income tax liability of up to $3,548 would be incurred as of December 31, 2022.

In December 2016, the Israeli Knesset passed Amendment 73 to the Investment Law which included a number of changes to the Investment Law regimes through regulations approved on May 1, 2017 and that have come into effect from January 1, 2017.

Applicable benefits under the new regime include:

-Introduction of a benefit regime for "Preferred Technology Enterprises" ("PTE") granting a 12% tax rate in central Israel – on qualified income deriving from Benefited Intellectual Property, subject to a number of conditions being fulfilled, including a minimal amount or ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual income derived from exports to large markets.

-A 12% capital gains tax rate on the sale of a preferred intangible asset to a foreign affiliated enterprise, provided that the asset was initially purchased from a foreign resident at an amount of NIS 200 million or more.

-A withholding tax rate of 20% for dividends paid from PTE income (with an exemption from such withholding tax applying to dividends paid to an Israeli company). Such rate may be reduced to 4% on dividends paid to a foreign resident company, subject to certain conditions regarding percentage of foreign ownership of the distributing entity.

The Company adopted the PTE since 2017 and believes it is generally eligible for its benefits.

In addition the Company received a comprehensive ruling from the Israeli tax authorities which approves the PTE's benefits.

h.Tax benefits under the Law for the Encouragement of Industry (Taxation), 1969:

Management believes that the Company currently qualifies as an "industrial company" under the above law and as such, is entitled to certain tax benefits including accelerated depreciation, deduction of public offering expenses in three equal annual installments and amortization of other intangible property rights for tax purposes.

j. Tax assessments:

As of December 31, 2022, the Company has reached a corporate tax assessment agreement with the Israeli Tax Authorities in relation to tax years through 2020, as reflected below in the unrecognized tax benefits schedule.

As of that date, the U.K. subsidiary's tax years until December 31, 2020 are subject to statutes of limitation effective in the U.K.

For the U.S. subsidiary's tax years ended December 31, 2019 through 2022, the statute of limitations has not yet expired.

k.Unrecognized tax benefits:

A reconciliation of the opening and closing amounts of total unrecognized tax benefits is as follows:

 

 

Year ended

December 31,

  

 

 

2020

 

 

2021

 

   2022  

 

 

 

 

 

 

 

        

Opening balance

 

$

3,728

 

 

$

4,633

 

  

$

 3,870  

Decrease related to settlements with taxing authorities

 

 

(796

)

 

 

(2,382

)

     (2,353 )

Increase related to prior year tax positions

 

 

74

 

 

 

976

 

     429  

Decrease related to expiration of statutes of limitations

 

 

(92

)

 

 

-

 

     -  

Increase related to current year tax positions

 

 

1,719

 

 

 

643

 

     859  

 

 

 

 

 

 

 

 

 

        

Closing balance

 

$

4,633

 

 

$

3,870

 

  

$

 2,805  

During the years ended December 31, 2020, 2021 and 2022, the Company recorded $21, $(21) and $(87), respectively, for interest expense (income) related to uncertain tax positions. As of December 31, 2021 and 2022, accrued interest was $112 and $25, respectively.

Although the Company believes that it has adequately provided for any reasonably foreseeable outcomes related to tax audits and settlement, there is no assurance that the final tax outcome of its tax audits will not be different from that which is reflected in the Company's income tax provisions. Such differences could have a material effect on the Company's income tax provision, cash flow from operating activities and net loss in the period in which such determination is made.
v3.22.4
FINANCIAL INCOME (EXPENSE), NET
 12 Months Ended
Dec. 31, 2022
Other Income and Expenses [Abstract]  
FINANCIAL INCOME (EXPENSE), NET

NOTE 14:-FINANCIAL INCOME (EXPENSE), NET

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Bank charges

 

$

(275

)

 

$

(250

)

 

$

(269

)

Exchange rate income (loss), net

 

 

683

 

 

 

(509

)

 

 

1,564

 

Interest income

 

 

10,380

 

 

 

5,559

 

 

 

17,117

 

Amortization of debt discount and issuance costs

 

 

(17,183

)

 

 

(17,792

)

 

 

(2,980

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial income (expense), net

 

$

(6,395

)

 

$

(12,992

)

 

$

15,432

 
v3.22.4
BASIC AND DILUTED NET LOSS PER SHARE
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
BASIC AND DILUTED NET LOSS PER SHARE

NOTE 15:-BASIC AND DILUTED NET LOSS PER SHARE

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss available to shareholders of ordinary shares

 

$

(5,758

)

 

$

(83,946

)

 

$

(130,368

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing basic and diluted net loss per ordinary shares 

 

 

38,628,770

 

 

 

39,645,453

 

 

 

40,583,002

 

 

The total weighted average number of shares related to outstanding options, RSUs and PSUs that have been excluded from the computation of diluted net loss per ordinary share due to their antidilutive effect was 2,823,985, 2,734,308 and 2,839,883 for the years ended December 31, 2020, 2021 and 2022, respectively.

Additionally, approximately 3.6 million shares underlying the Convertible Notes are not considered in the calculation of diluted net loss per share as the effect would be anti-dilutive.
v3.22.4
SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION

NOTE 16:-SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION

a.The Company identifies operating segments in accordance with ASC Topic 280, "Segment Reporting". Operating segments are defined as components of an entity for which separate financial information is available and is regularly reviewed by the chief operating decision maker in making decisions regarding resource allocation and evaluating financial performance. The Company determined it operates in one reportable segment as the Company's chief operating decision maker is the Chairman and Chief Executive Officer who makes operating decisions, assesses performance and allocates resources on a consolidated basis, accompanied by information about revenue by geographic region.

b.The total revenues are attributed to geographic areas based on the location of the Company's channel partners which are considered as end customers, as well as direct customers of the Company.

The following tables present total revenues for the years ended December 31, 2020, 2021 and 2022 and long-lived assets as of December 31, 2021 and 2022:

Revenues:

 

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

246,811

 

 

$

253,811

 

 

$

312,816

 

Israel

 

 

7,312

 

 

 

7,416

 

 

 

6,302

 

United Kingdom

 

 

33,101

 

 

 

35,530

 

 

 

41,297

 

Europe, the Middle East and Africa *)

 

 

101,453

 

 

 

120,382

 

 

 

130,745

 

Other

 

 

75,754

 

 

 

85,778

 

 

 

100,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

464,431

 

 

$

502,917

 

 

$

591,710

 

For the years ended December 31, 2020, 2021 and 2022, no single customer contributed more than 10% to the Company's total revenues.

Long-lived assets, including property and equipment, net and operating lease right-of-use assets:

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

United States

 

$

6,813

 

 

$

5,353

 

Israel

 

 

24,391

 

 

 

41,948

 

United Kingdom

 

 

1,294

 

 

 

4,858

 

Europe, the Middle East and Africa *)

 

 

474

 

 

 

525

 

Other

 

 

1,370

 

 

 

8,647

 

 

 

 

 

 

 

 

 

 

 

 

$

34,342

 

 

$

61,331

 

*) Excluding United Kingdom and Israel
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Policies)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Use of estimates

a.Use of estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such management estimates and assumptions are related, but not limited to contingent liabilities, income tax uncertainties, deferred taxes, share-based compensation, fair value of assets acquired and liabilities assumed in business combinations, fair value of the convertible senior notes liability, as well as the determination of standalone selling prices in revenue transactions with multiple performance obligations and the estimated period of benefit for deferred contract costs. The Company's management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Principles of consolidation

b.Principles of consolidation:

The consolidated financial statements include the financial statements of CyberArk Software Ltd. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation.
Financial statements in U.S. dollars

c.Financial statements in U.S. dollars:

A majority of the Company's revenues are generated in U.S. dollars. In addition, the equity investments were in U.S. dollars and a substantial portion of the Company's costs are incurred in U.S. dollars. The Company's management believes that the U.S. dollar is the currency of the primary economic environment in which the Company and each of its subsidiaries operates. Thus, the functional and reporting currency of the Company is the U.S. dollar.

Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with Accounting Standard Codification ("ASC") No. 830 "Foreign Currency Matters." All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the statement of comprehensive loss as financial income or expenses, as appropriate.
Cash and cash equivalents

d.Cash and cash equivalents:

Cash equivalents are short-term highly liquid deposits that are readily convertible to cash with original maturities of three months or less, at the date acquired.
Short-term bank deposits

e.Short-term bank deposits:

Short-term bank deposits are deposits with maturities of greater than three months and remaining maturities of less than one year. As of December 31, 2021 and 2022, the Company's bank deposits are denominated in U.S. dollars and New Israeli Shekels ("NIS") and bear yearly interest at weighted average rates of 0.72% and 5.11%, respectively. Short-term bank deposits are presented at their cost, including accrued interest.
Investments in marketable securities

f.Investments in marketable securities:

The Company accounts for investments in marketable debt securities in accordance with ASC No. 320, "Investments - Debt Securities". The Company determines the appropriate classification of its investments at the time of purchase and reevaluates such designation at each balance sheet date. The Company classifies all of its marketable securities as available-for-sale as the Company may sell these securities at any time for use in its current operations or for other purposes, even prior to maturity. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in accumulated other comprehensive income (loss) in shareholders' equity.

The Company periodically evaluates its available-for-sale debt securities for impairment in accordance with ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. If the amortized cost of an individual security exceeds its fair value, the Company considers its intent to sell the security or whether it is more likely than not that it will be required to sell the security before recovery of its amortized basis. If either of these criteria are met, the Company writes down the security to its fair value and records the impairment charge in the Consolidated Statements of Comprehensive Loss. If neither of these criteria are met, the Company assess' whether credit loss exists. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss may exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded, limited by the amount that the fair value is less than the amortized cost basis. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive income

During the years ended December 31, 2020, 2021 and 2022, no credit loss impairments have been identified.
Property and equipment

g.Property and equipment:

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates:

 

 

%

 

 

 

Computers, software and related equipment

 

20 - 33

Office furniture and equipment

 

15 - 20

Leasehold improvements

 

Over the shorter of the related lease period or the life of the asset
Long-lived assets

h.Long-lived assets:

The long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, "Property, Plant and Equipment", whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2020, 2021 and 2022, no impairment losses have been recognized.
Business combination

i.Business combination:

The Company accounts for its business acquisitions in accordance with ASC No. 805, "Business Combinations." While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value assets acquired and liabilities assumed at the business combination date, these estimates and assumptions are subject to refinement. The total purchase price allocated to the tangible and intangible assets acquired is assigned based on the fair values as of the date of the acquisition. During the measurement period, which does not exceed one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Goodwill generated from the business combinations is primarily attributable to synergies between the Company and acquired companies` respective products and services. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Goodwill and other intangible assets

j.Goodwill and other intangible assets:

Goodwill and certain other purchased intangible assets have been recorded in the Company's financial statements as a result of acquisitions. Goodwill represents excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired. Goodwill is not amortized, but rather is subject to an impairment test.

ASC No. 350, "Intangible-Goodwill and other" requires goodwill to be tested for impairment at least annually and, in certain circumstances, between annual tests. The accounting guidance gives the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The qualitative assessment considers events and circumstances that might indicate that a reporting unit's fair value is less than its carrying amount. If it is determined, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative test is performed. The Company operates as one reporting unit. The Company elects to perform an annual impairment test of goodwill as of October 1 of each year, or more frequently if impairment indicators are present.

For the years ended December 31, 2020, 2021 and 2022, no impairment losses were identified.

Purchased intangible assets with finite lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, which range from two to twelve years. Intangible assets, consisting primarily of technology and customer relationships, are amortized over their estimated useful lives on a straight-line basis or in proportion to their economic benefits realized.
Derivative instruments

k.Derivative instruments:

 
ASC No. 815, "Derivative and Hedging," requires companies to recognize all of their derivative instruments as either assets or liabilities on the balance sheet at fair value.
 
For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.
 
In accordance with ASU 2017-12, "Targeted Improvements to Accounting for Hedging Activities", gains and losses on the derivatives instruments that are designated and qualify as a cash flow hedge are recorded in accumulated other comprehensive income (loss) and reclassified into earnings in the same accounting period in which the designated forecasted transaction or hedged item affects earnings.
 
To hedge against the risk of changes in cash flows resulting from foreign currency salary payments during the year, the Company instituted a foreign currency cash flow hedging program. The Company hedges portions of its forecasted expenses denominated in NIS. These forward and option contracts are designated as cash flow hedges, as defined by ASC No. 815, and are all effective, as their critical terms match underlying transactions being hedged.
 
As of December 31, 2021 and 2022, the amount recorded in accumulated other comprehensive income (loss) from the Company's currency forward and option transactions was $1,086, net of tax of $148, and $(3,138), net of tax of $(428), respectively.
 
As of December 31, 2022, the notional amounts of foreign exchange forward contracts into which the Company entered were $96,246. The foreign exchange forward contracts will expire by December 2023. The fair value of derivative instruments assets balances as of December 31, 2021 and 2022, totaled $1,318 and $49, respectively. The fair value of derivative instruments liabilities balances as of December 31, 2021 and 2022, totaled $86 and $3,616, respectively.
 
The following table presents gains (losses) reclassified from accumulated other comprehensive income (loss) to the statements of comprehensive loss per line item:
 
   
Year ended
December 31,
  
   
2020
    
2021
    
2022
  
                   
Cost of revenues
  
$
(117
)
  
$
(144
)
  
$
509
  
Research and development
    
(1,084
)
    
(1,552
)
    
5,381
  
Sales and marketing
    
(185
)
    
(273
)
    
927
  
General and administrative
    
(281
)
    
(389
)
    
1,358
  
                         
Total gains (losses), before tax benefit (taxes on income)
    
(1,667
)
    
(2,358
)
    
8,175
  
Tax benefit (taxes on income)
    
196
      
283
      
(981
)
                         
Total gains (losses), net of tax benefit (taxes on income)
  
$
(1,471
)
  
$
(2,075
)
  
$
7,194
  
 
In addition to the derivatives that are designated as hedges as discussed above, the Company enters into certain foreign exchange forward transactions and holds foreign exchange deposits to economically hedge certain net asset balances in Euros, British Pounds Sterling, Canadian Dollars and NIS. Gains and losses related to such derivative instruments are recorded in financial income (expense), net. As of December 31, 2022, with respect to these transactions, the notional amounts of foreign exchange forward contracts into which the Company entered were $50,090. The foreign exchange forward contracts will expire by July 2023. The fair value of derivative instruments assets balances as of December 31, 2021 and 2022, totaled $751 and $72, respectively. The fair value of derivative instruments liabilities balances as of December 31, 2021 and 2022 totaled $36 and $1,388, respectively.
 
For the years ended December 31, 2020, 2021 and 2022, the Company recorded financial income (expense), net from hedging transactions of $(1,317), $2,099, and $2,281, respectively.
Severance pay

l.Severance pay:

The Israeli Severance Pay Law, 1963 ("Severance Pay Law"), specifies that employees are entitled to severance payment, following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one month salary for each year of employment, or a portion thereof.

The majority of the Company's liability for severance pay is covered by the provisions of Section 14 of the Severance Pay Law ("Section 14"). Under Section 14, employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, made on behalf of the employee with insurance companies. Payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees. 

As a result, the Company does not recognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in the Company's balance sheet.

For the Company's employees in Israel who are not subject to Section 14, the Company calculated the liability for severance pay pursuant to the Severance Pay Law based on the most recent salary of these employees multiplied by the number of years of employment as of the balance sheet date. The Company's liability for these employees is fully provided for via monthly deposits with severance pay funds, insurance policies and accruals. The value of these deposits recorded as an asset on the Company's balance sheet under other long-term assets as of December 31, 2021 and 2022 is $5,227 and $4,881, respectively. The amount of accrued severance payable recorded as a liability on the Company's balance sheet under long-term liabilities as of December 31, 2021 and 2022 is $8,271 and $7,769, respectively. 

Severance expenses for the years ended December 31, 2020, 2021 and 2022, amounted to $4,813, $6,368 and $7,836, respectively.
U.S. defined contribution plan

m.U.S. defined contribution plan:

The U.S. subsidiaries have a 401(k) defined contribution plan covering certain full time and part time employees in the U.S. who meet certain eligibility requirements, excluding leased employees and contractors. All eligible employees may elect to contribute up to an annual maximum of 100% of their annual compensation to the plan through salary deferrals, subject to Internal Revenue Service limits, but not greater than $20.5 per year (for certain employees over 50 years of age the maximum contribution is $27 per year).

The U.S. subsidiaries match amounts equal to 100% of the first 3% of the employee's compensation that they contribute to the defined contribution plan and 50% of the next 2% of their compensation that they contribute to the defined contribution plan with a limit of $12.2 per year per employee. For the years ended December 31, 2020, 2021 and 2022, the U.S. subsidiary recorded expenses for matching contributions of $3,533, $4,386 and $5,629, respectively.
Convertible senior notes

n.Convertible senior notes:

For the years ended December 31, 2020 and 2021, the Company accounted for its convertible senior notes in accordance with ASC 470-20 "Debt with Conversion and Other Options". The Company allocated the principal amount of the convertible senior notes between its liability and equity component. The liability component at issuance is recognized at fair value, based on the fair value of a similar instrument of similar credit rating and maturity that does not have a conversion feature. The equity component is based on the excess of the principal amount of the convertible senior notes over the fair value of the liability component and is recorded in additional paid-in capital. The equity component, net of issuance costs and deferred tax effects is presented within additional paid-in-capital and is not remeasured. The Company allocated the total issuance costs incurred to the liability and equity components of the convertible senior notes based on the same proportions as the proceeds from the notes.

Relating to the convertible senior notes issued in 2019, issuance costs attributable to the liability and equity components were $12.9 million and $2.0 million, respectively. Issuance costs attributable to the liability are netted against the principal balance and are amortized to interest expense using the effective interest method over the contractual term of the notes. The effective interest rate of the liability component of the notes is 3.50%. Issuance costs attributable to the equity component are netted with the equity component in additional paid-in capital.

On January 1, 2022, the Company adopted ASU 2020-06, “Debt - Debt with Conversion and Other Options (subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (subtopic 815-40), which simplifies the accounting for convertible senior notes (see Note 2ac).
Revenue recognition

o.Revenue recognition:

The Company substantially generates revenues from providing the right to access its SaaS solutions and licensing the rights to use its software products, maintenance and professional services. Subscription revenues include Software as a Service ("SaaS") offerings and on-premises subscription (“Self-hosted subscription”). The Company sells its products through its direct sales force and indirectly through resellers. Payment is typically due within 30 to 90 calendar days of the invoice date. 

The Company recognizes revenues in accordance with ASC No. 606, "Revenue from Contracts with Customers" ("ASC No. 606"). As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenues when (or as) the Company satisfies a performance obligation.

The Company enters into contracts that can include combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations and may include an option to provide additional products or services. The perpetual license and self-hosted subscription are distinct as the customer can derive the economic benefit of the software without any professional services, updates or technical support. 

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer. The Company does not grant a right of return to its customers.

In instances of contracts where revenue recognition differs from the timing of invoicing, the Company generally determined that those contracts do not include a significant financing component. The primary purpose of the invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company's products and services, not to receive or provide financing. The Company uses the practical expedient and does not assess the existence of a significant financing component when the difference between payment and revenue recognition is a year or less.

 

The Company records unbilled receivables from contracts when the revenue recognized exceeds the amount billed to the customer. As of December 31, 2021 and 2022, $12,517 and $10,318 short-term unbilled receivables are included in trade receivables, respectively, and $1,873 and $928 long-term unbilled receivables are included in other long-term assets, respectively.

The Company allocates the transaction price to each performance obligation based on its relative standalone selling price. For maintenance, the Company determines the standalone selling price based on the price at which the Company separately sells a renewal contract. For professional services, the Company determines the standalone selling prices based on the prices at which the Company separately sells those services. For SaaS, self-hosted subscription and perpetual license products, the Company determines the standalone selling prices by taking into account available information such as historical selling prices, contract value, geographic location, and the Company's price list and discount policy.

Perpetual license and the license portion of self-hosted subscription are recognized at the point of time when the license is made available for download by the customer. Maintenance revenue related to perpetual license contracts and the maintenance component of the self-hosted subscription offering as well as SaaS revenues are recognized ratably, on a straight-line basis over the term of the related contract, which is generally one to three years. Professional services revenues substantially are recognized as the services are performed.

The following table presents the Company's revenue by category:

 

  

Year ended

December 31,

  

 

  

2020

    

2021

    

2022

  

 

                        

SaaS

  

$

 24,305    

$

 69,303    

$

 166,361  

Self-hosted subscription*

     32,120       65,325       114,288  

Perpetual license

     176,061       115,738       49,964  

Maintenance and support

     190,897       214,036       217,695  

Professional services

     41,048       38,515       43,402  

 

                        

 

   $ 464,431     $ 502,917     $ 591,710  

* Self-hosted subscription also includes maintenance associated with self-hosted subscriptions.

For additional information regarding disaggregated revenues, please refer to Note 16 below.

Contract liabilities consist of deferred revenue and include unearned amounts received under maintenance and support contracts and professional services that do not meet the revenue recognition criteria as of the balance sheet date. Contract liabilities also include unearned, invoiced amounts in respect of SaaS and self-hosted subscription contracts whereby there is an unconditional right for the consideration. Deferred revenues are recognized as (or when) the Company performs under the contract. During the year ended December 31, 2022, the Company recognized $221,134 that were included in the deferred revenues balance as of December 31, 2021.

Remaining Performance Obligations:

Transaction price allocated to remaining performance obligations represents non-cancelable contracts that have not yet been recognized, which includes deferred revenues and amounts not yet received that will be recognized as revenue in future periods.

The aggregate amount of the transaction price allocated to remaining performance obligations was $713 million as of December 31, 2022, out of which, the Company expects to recognize approximately 60% in 2023 and the remainder thereafter.
Deferred contract costs

p.Deferred contract costs:

The Company pays sales commissions primarily to sales and certain management personnel based on their attainment of certain predetermined sales goals. Sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions paid for initial contracts, which are not commensurate with sales commissions paid for renewal contracts, are capitalized and amortized over an expected period of benefit. Based on its technology, customer contracts and other factors, the Company has determined the expected period of benefit to be approximately five years. Sales commissions for initial contracts, which are commensurate with sales commissions paid for renewal contracts, are capitalized and amortized correspondingly to the recognized revenue of the related initial contracts. Sales commissions for renewal contracts are capitalized and amortized over the related contractual renewal period and aligned with the revenue recognized from these contracts. Amortization expense of these costs are substantially included in sales and marketing expenses.

For the year ended December 31, 2021 and 2022, the amortization of deferred contract costs was $43,236 and $45,254, respectively.

As of December 31, 2021 and 2022, the Company presented deferred contract costs from contracts which are for periods of less than 12 months of $801 and $1,713 in prepaid expenses and other current assets, respectively, and deferred contract costs in respect of contracts which are greater than 12 months of $96,619 and $138,907 in other long-term assets, respectively. 
Trade Receivable and Allowances

q.Trade Receivable and Allowances:

 

Trade receivables include original invoiced amounts less an allowance for any potential uncollectible amounts and less invoiced amounts from maintenance and professional services contracts which haven't been recognized yet. Trade receivables also include unbilled receivables amounts that will be paid in the following year. The Company makes estimates of expected credit losses for the allowance for doubtful accounts based upon its assessment of various factors, including historical experience, the age of the trade receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The estimated credit loss allowance is recorded as general and administrative expenses on the Company's consolidated statements of comprehensive loss.
Leases

r.Leases:

In accordance with (ASU) No. 2016-02, "Leases" (Topic 842)", the Company determines if an arrangement is a lease and the classification of that lease at inception based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefits from the use of the asset throughout the period, and (3) whether the Company has a right to direct the use of the asset. The Company elected to not recognize a lease liability and a right-of-use ("ROU") asset for leases with a term of twelve months or less. The Company also elected the practical expedient to not separate lease and non-lease components for its leases.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make minimum lease payments arising from the lease. ROU assets are initially measured at amounts, which represents the discounted present value of the lease payments over the lease, plus any initial direct costs incurred. The lease liability is initially measured at lease commencement date based on the discounted present value of minimum lease payments over the lease term. The implicit rate within the operating leases is generally not determinable, therefore the Company uses its Incremental Borrowing Rate ("IBR") based on the information available at commencement date in determining the present value of lease payments. The Company's IBR is estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset is located. Certain leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option.

Payments under the Company's lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease right-of-use assets and liabilities. Variable lease payments are primarily comprised of payments affected by common area maintenance and utility charges.
Research and development costs

s.Research and development costs:

Research and development costs are charged to the statements of comprehensive loss as incurred except to the extent that such costs are associated with internal-use software that qualifies for capitalization.

ASC No. 985-20, "Software - Costs of Software to Be Sold, Leased, or Marketed," requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. Based on the Company's product development process, technological feasibility is established upon completion of a working model. Costs incurred by the Company between completion of the working model and the point at which the product is ready for general release, have been insignificant.
Internal use software and Website Development cost

t.Internal use software and website development cost:

The Company capitalizes qualifying costs associated with the development of its website and incurred during the application development stage related to software developed for internal-use in accordance with ASC No. 350-40 "Internal-use Software" ("ASC No. 350-40"). These costs are capitalized based on qualifying criteria. Such costs are amortized over the software's estimated life of three to five years. Costs incurred to develop software applications consist of (a) certain external direct costs of materials and services incurred in developing or obtaining internal-use computer software, and (b) payroll and payroll-related costs for employees who are directly associated with, and who devote time to, the development or implementation of the software. Capitalized internal-use software and website costs are included in property and equipment, net in the consolidated balance sheets.

The Company also capitalizes implementation costs incurred in a cloud computing arrangement that is a service contract. The capitalized implementation costs and their related amortization and cash flows are presented on the financial statements in consistent with the prepaid amounts and fees related to the associated cloud computing arrangement. Capitalized implementation costs are amortized over the term of the arrangement, beginning when the module or component of the cloud computing arrangement that is a service contract is ready for its intended use.
Advertising and marketing expenses

u. Advertising and marketing expenses:

Advertising and marketing expenses consist primarily of marketing campaigns and tradeshows. Advertising and marketing expenses are charged to the statement of comprehensive loss, as incurred. Advertising and marketing expenses for the years ended December 31, 2020, 2021 and 2022, amounted to $22,082, $27,504 and $34,438, respectively.
Share-based compensation

v.Share-based compensation:

The Company accounts for share-based compensation in accordance with ASC No. 718, "Compensation - Stock Compensation" ("ASC No. 718"). ASC No. 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the award is recognized as an expense over the requisite service periods, which is generally the vesting period of the respective award, on a straight-line basis when the only condition to vesting is continued service. If vesting is subject to a performance condition, recognition is based on the implicit service period of the award. Expense for awards with performance conditions is estimated and adjusted on a quarterly basis based upon the assessment of the probability that the performance condition will be met and is recognized on a graded vesting basis.

The Company has selected the Black-Scholes-Merton option-pricing model as the most appropriate fair value method for its option awards and Employee Share Purchase Plan ("ESPP"). The fair value of Restricted Share Units ("RSUs ") and Performance Share Units ("PSUs ") without market conditions, is based on the closing market value of the underlying shares at the date of grant. For PSUs subject to market conditions, the Company uses a Monte Carlo simulation model, which utilizes multiple inputs to estimate payout level and the probability that market conditions will be achieved.

The Black-Scholes-Merton and Monte Carlo models require a number of assumptions, of which the most significant are the expected share price volatility and the expected option term. The Company recognizes forfeitures of equity-based awards as they occur. For graded vesting awards subject to service conditions, the Company recognizes compensation cost using the straight-line attribution method.
Income taxes

w.Income taxes:

The Company accounts for income taxes in accordance with ASC No. 740-10, "Income Taxes" ("ASC No. 740-10"). ASC No. 740-10 prescribes the use of the asset and liability method whereby deferred tax asset and liability account balances are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company established reserves for uncertain tax positions based on the evaluation of whether or not the Company's uncertain tax position is "more likely than not" to be sustained upon examination based on its technical merits. The Company records interest and penalties pertaining to its uncertain tax positions in the financial statements as income tax expense.
Basic and diluted net loss per share:

x.Basic and diluted net loss per share:

Basic net loss per ordinary share is computed by dividing net loss for each reporting period by the weighted-average number of ordinary shares outstanding during each year. Diluted net loss per ordinary share is computed by dividing net loss for each reporting period by the weighted average number of ordinary shares outstanding during the period, plus dilutive potential ordinary shares considered outstanding during the period, in accordance with ASC No. 260-10 "Earnings Per Share". The Company experienced a loss in the years ended December 31, 2021 and 2022; hence all potentially dilutive ordinary shares were excluded due to their anti-dilutive effect.
Comprehensive income (loss)

y.Comprehensive income (loss):

The Company accounts for comprehensive income (loss) in accordance with ASC No. 220, "Comprehensive Income." This statement establishes standards for the reporting and display of comprehensive income (loss) and its components in a full set of general purpose financial statements. Comprehensive income (loss) generally represents all changes in shareholders' equity during the period, except changes resulting from investments by, or distributions to, shareholders.
Concentration of credit risks

z.Concentration of credit risks:

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term bank deposits, marketable securities, trade receivables, severance pay funds and derivative instruments.

The majority of the Company's cash and cash equivalents and short-term bank deposits are invested with major banks in Israel and the United States. Such investments in the United States are in  excess of insured limits and are not insured in other jurisdictions. Generally, these investments may be redeemed upon demand and the Company believes that the financial institutions that hold the Company's cash deposits are financially sound and, accordingly, bear minimal risk.

The Company's marketable securities consist of investments, which are highly rated by credit agencies, in government, corporate and government sponsored enterprises debentures. The Company's investment policy limits the amount that the Company may invest in any one type of investment or issuer, in order to reduce credit risk concentrations.

The trade receivables of the Company are mainly derived from sales to a diverse set of customers located primarily in the United States, Europe and Asia. The Company performs ongoing credit evaluations of its customers and, to date, has not experienced any significant losses.

The Company has entered into forward contracts with major banks in Israel to protect against the risk of changes in exchange rates. The derivative instruments hedge a portion of the Company's non-dollar currency exposure.
Fair value of financial instruments

aa.Fair value of financial instruments:

The estimated fair value of financial instruments has been determined by the Company using available market information and valuation methodologies. Considerable judgment is required in estimating fair values. Accordingly, the estimates may not be indicative of the amounts the Company could realize in a current market exchange.

The following methods and assumptions were used by the Company in estimating the fair value of their financial instruments:

The carrying values of cash and cash equivalents, short-term bank deposits, trade receivables, prepaid expenses and other long-term and current assets, trade payables, employees and payroll accruals and accrued expenses and other current liabilities approximate their fair values due to the short-term maturities of these instruments.

The Company applies ASC No. 820, "Fair Value Measurements and Disclosures" ("ASC No. 820"), with respect to fair value measurements of all financial assets and liabilities.

The fair value of foreign currency contracts (used for hedging purposes) is estimated by obtaining current quotes from banks and third-party valuations.

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

 

Level 1 -

Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date.
   
 

Level 2 -

Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.
   
 

Level 3 -

Inputs are unobservable inputs based on the Company's own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

 

In accordance with ASC No. 820, the Company measures its foreign currency derivative instruments, at fair value using the market approach valuation technique. Foreign currency derivative contracts as detailed in Note 2k are classified within Level 2 value hierarchy, as the valuation inputs are based on quoted prices and market observable data of similar instruments.

As of December 31, 2022, the estimated fair value of the Company’s convertible senior notes, net as further described in Note 11, was determined based on the closing quoted price of the convertible senior note, net as of the last day of trading for the period, and is considered Level 2 measurement.
Investments in privately held companies

ab.Investments in privately held companies:

The Company holds equity investments, in which it does not have control or significant influence, in private companies without readily determinable fair values. These investments are measured using the measurement alternative, which is cost, less any impairment, adjusted for changes in fair value are resulted from observable transactions for identical or similar investments of the same issuer. The investments are reviewed periodically to determine if impairments or adjustments to the fair value are needed. Adjustments and impairments are recorded in financial income, net on the consolidated statements of comprehensive loss.

The investments in privately held companies are included in Other long-term assets on the consolidated balance sheets.
Recently adopted accounting standards

ac.Recently adopted accounting standards:

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): "Simplifying the Accounting for Income Taxes". The new standard simplifies the accounting for income taxes. The guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted the standard beginning January 1, 2021. The standard did not have a material impact on the consolidated financial statements. 

In August 2020, the FASB issued (“ASU”) 2020-06, “Debt - Debt with Conversion and Other Options (subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (subtopic 815-40),” The new standard reduces the number of accounting models in ASC 470-20 that require separate accounting for non-bifurcated embedded conversion features. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. By removing those separation models, the effective interest rate of convertible debt instruments will be closer to the coupon interest rate. Further, the diluted net loss per share calculation for convertible instruments will require the Company to use the if-converted method. The treasury stock method should no longer be used to calculate diluted net loss per share for convertible instruments.

 

The Company adopted ASU 2020-06 as of January 1, 2022 using the modified retrospective method. As a result, the convertible notes' previously recognized equity component was combined with the liability component and the convertible notes will be accounted for as a single unit of account. The adoption of ASU 2020-06 resulted in an increase of retained earnings in an amount of $26,602, a decrease of additional paid-in capital in an amount of $65,932, an increase of convertible senior notes, net, in an amount of $46,270 and a decrease of deferred tax liabilities, net, in an amount of $6,940. 

The impact of adoption on the consolidated statements of comprehensive loss for the year ended December 31, 2022 compared to the year ended December 31, 2021 was a decrease in financial expenses by $14,812. This had the effect of decreasing basic and diluted net loss per share for the year ended December 31, 2022 by $0.36.

In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance.” The new standard improves the transparency of government assistance received by most business entities by requiring the disclosure of: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity's financial statements. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2021. The adoption of this ASU did not have a significant impact on the Company’s financial statements and disclosures.
Recently issued accounting standards

ad.Recently issued accounting standards:

In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers". The standard requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. This ASU is currently not expected to have a material impact on our consolidated financial statements.
Reclassification

ae.Reclassification:

Certain comparative figures have been reclassified to conform to the current year presentation. Also, beginning in the first quarter of 2021, the Company revised the presentation of its lines of revenue and cost of revenue. The Company believes that the revised categories for revenue and cost of revenue as presented on the income statement align with how management evaluates the business and the shift toward recurring revenues. The new revenue lines consist of (a) Subscription revenue, which represents SaaS and self-hosted subscription revenue including the license portion of self-hosted subscription revenue and the ratable maintenance component of self-hosted subscription revenue, (b) Perpetual license revenue and (c) Maintenance and professional services revenue, which represents the maintenance component related to perpetual license sales and professional services revenue.
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Tables)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Schedule Of Property And Equipment Estimated Useful Life

 

 

%

 

 

 

Computers, software and related equipment

 

20 - 33

Office furniture and equipment

 

15 - 20

Leasehold improvements

 

Over the shorter of the related lease period or the life of the asset
Schedule of gains (losses) reclassified from accumulated other comprehensive income (loss) to the statements of comprehensive loss
   
Year ended
December 31,
  
   
2020
    
2021
    
2022
  
                   
Cost of revenues
  
$
(117
)
  
$
(144
)
  
$
509
  
Research and development
    
(1,084
)
    
(1,552
)
    
5,381
  
Sales and marketing
    
(185
)
    
(273
)
    
927
  
General and administrative
    
(281
)
    
(389
)
    
1,358
  
                         
Total gains (losses), before tax benefit (taxes on income)
    
(1,667
)
    
(2,358
)
    
8,175
  
Tax benefit (taxes on income)
    
196
      
283
      
(981
)
                         
Total gains (losses), net of tax benefit (taxes on income)
  
$
(1,471
)
  
$
(2,075
)
  
$
7,194
  
Schedule of Company's Revenue by Category

 

  

Year ended

December 31,

  

 

  

2020

    

2021

    

2022

  

 

                        

SaaS

  

$

 24,305    

$

 69,303    

$

 166,361  

Self-hosted subscription*

     32,120       65,325       114,288  

Perpetual license

     176,061       115,738       49,964  

Maintenance and support

     190,897       214,036       217,695  

Professional services

     41,048       38,515       43,402  

 

                        

 

   $ 464,431     $ 502,917     $ 591,710  
v3.22.4
MARKETABLE SECURITIES (Table)
 12 Months Ended
Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]  
Schedule of summarizes the amortized cost, unrealized gains and losses, and fair value of available-for-sale marketable securities

 

 

December 31, 2021

 

 

 

Amortized

cost

 

 

Gross

unrealized

losses *)

 

 

Gross

unrealized

gains

 

 

Fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debentures

 

$

453,927

 

 

$

(1,493

)

 

$

881

 

 

$

453,315

 

Government debentures

 

 

47,450

 

 

 

(254

)

 

 

84

 

 

 

47,280

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

501,377

 

 

$

(1,747

)

 

$

965

 

 

$

500,595

 

*) Out of the total unrealized losses, an amount of $16 has been in a continuous unrealized loss position for twelve months or longer.

 

 

December 31, 2022

 

 

 

Amortized

cost

 

 

Gross

unrealized

losses*)

 

 

Gross

unrealized

gains

 

 

Fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debentures

 

$

414,278

 

 

$

(12,223

)

 

$

111

 

 

$

402,166

 

Government debentures

 

 

128,686

 

 

 

(2,006

)

 

 

3

 

 

 

126,683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

542,964

 

 

$

(14,229

)

 

$

114

 

 

$

528,849

 

 

*) Out of the total unrealized losses, an amount of $8,450 has been in a continuous unrealized loss position for twelve months or longer.
Schedule of summarizes the amortized cost and fair value of available-for-sale marketable securities

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

Amortized

cost

 

 

Fair value

 

 

Amortized

cost

 

 

Fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Due within one year

 

$

199,883

 

 

$

199,933

 

 

$

304,597

 

 

$

301,101

 

Due between one and five years

 

 

301,494

 

 

 

300,662

 

 

 

238,367

 

 

 

227,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

501,377

 

 

$

500,595

 

 

$

542,964

 

 

$

528,849 
v3.22.4
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)
 12 Months Ended
Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of Prepaid Expenses And Other Current Assets

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

Prepaid expenses

 

$

15,566

 

 

$

15,167

 

Hedging transaction assets

 

 

2,069

 

 

 

121

 

Government authorities

 

 

3,365

 

 

 

3,431

 

Deferred contract costs

 

 

801

 

 

 

1,713

 

Other current assets

 

 

424

 

 

 

2,050

 

 

 

 

 

 

 

 

 

 

 

 

$

22,225

 

 

$

22,482

 
v3.22.4
PROPERTY AND EQUIPMENT, NET (Tables)
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Schedule of Property And Equipment

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

Cost:

 

 

 

 

 

 

Computers, software and related equipment *)

 

$

35,290

 

 

$

43,300

 

Leasehold improvements

 

 

7,739

 

 

 

10,087

 

Office furniture and equipment

 

 

4,090

 

 

 

4,273

 

 

 

 

 

 

 

 

 

 

 

 

 

47,119

 

 

 

57,660

 

 

 

 

 

 

 

 

 

 

Less - accumulated depreciation

 

 

26,936

 

 

 

34,186

 

 

 

 

 

 

 

 

 

 

Depreciated cost

 

$

20,183

 

 

$

23,474

 

*) For the years ended December 31, 2021 and 2022, the Company capitalized $4,160 and $4,929 including $569 and $758 of share-based compensation costs, relating to its internal use software and website development, respectively.
v3.22.4
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables)
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of carrying amount of goodwill

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

Balance as of beginning of the year

 

$

123,717

 

 

$

123,717

 

Goodwill acquired

 

 

-

 

 

 

29,524

 

 

 

 

 

 

 

 

 

 

Closing balance

 

$

123,717

 

 

$

153,241

 
Schedule of Intangible Assets

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

Original amount:

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology

 

$

39,625

 

 

$

55,922

 

Customer relationships

 

 

9,586

 

 

 

9,586

 

Other

 

 

664

 

 

 

664

 

 

 

 

 

 

 

 

 

 

 

 

 

49,875

 

 

 

66,172

 

 

 

 

 

 

 

 

 

 

Less - accumulated amortization

 

 

32,009

 

 

 

38,664

 

 

 

 

 

 

 

 

 

 

Intangible assets, net

 

$

17,866

 

 

$

27,508

 
Schedule of Future Amortization Expense

2023

 

 

7,365

 

2024

 

 

7,318

 

2025

 

 

4,885

 

2026

 

 

3,477

 

2027

 

 

2,563

 

Thereafter

 

 

1,900

 

 

 

 

 

 

 

 

$

27,508

 
v3.22.4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)
 12 Months Ended
Dec. 31, 2022
Payables and Accruals [Abstract]  
Schedule Of Accrued Expenses And Other Current Liabilities

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

Government authorities

 

$

3,839

 

 

$

5,682

 

Accrued expenses

 

 

8,771

 

 

 

12,236

 

Unrecognized tax benefits

 

 

3,870

 

 

 

2,805

 

Lease liabilities, current

 

 

6,974

 

 

 

7,857

 

Hedging transaction liabilities

 

 

122

 

 

 

5,004

 

 

 

 

 

 

 

 

 

 

 

 

$

23,576

 

 

$

33,584

 
v3.22.4
COMMITMENTS AND CONTINGENT LIABILITIES (Tables)
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Schedule of future payments under non-cancelable material purchase obligations
2023
    
22,415
  
2024
    
8,942
  
2025
    
2,051
  
         
   
$
33,408
  
v3.22.4
LEASES (Tables)
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Schedule of Components of Lease Costs

 

 

Year ended

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

Operating lease cost

 

$

7,224

 

 

$

7,522

 

Short-term lease cost

 

 

1,188

 

 

 

1,326

 

Variable lease cost

 

 

1,302

 

 

 

1,342

 

Sublease income

 

 

(195

)

 

 

-

 

 

 

 

 

 

 

 

 

 

Total net lease costs

 

$

9,519

 

 

$

10,190

 
Schedule of Supplemental Balance Sheet Information Related to Operating Leases

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

Operating lease ROU assets (under other long-term assets in the balance sheets)

 

$

14,159

 

 

$

37,857

 

Operating lease liabilities, current

 

$

6,974

 

 

$

7,857

 

Operating lease liabilities, long-term (under other long-term liabilities in the balance sheets)

 

$

10,239

 

 

$

28,874

 

Weighted average remaining lease term (in years)

 

 

2.9

 

 

 

5.7

 

Weighted average discount rate

 

 

1.7

%

 

 

2.8

%
Schedule of Minimum Lease Payments for Company's ROU Assets Over Remaining Lease Periods

 

 

December 31, 2022

 

 

 

 

 

 

2023

 

 

7,691

 

2024

 

 

7,384

 

2025

 

 

6,663

 

2026

 

 

5,717

 
2027    

5,174

  

Thereafter

 

 

6,670

 

 

 

 

 

 

Total undiscounted lease payments

 

 

39,299

 

Less: imputed interest

 

 

(2,568

)

 

 

 

 

 

Present value of lease liabilities

 

$

36,731

 
v3.22.4
FAIR VALUE MEASUREMENTS (Table)
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Schedule of fair value of financial assets and liabilities

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

Level 1

 

 

Level 2

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Total

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

204,367

 

 

$

-

 

 

$

204,367

 

 

$

206,228

 

 

$

-

 

 

$

206,228

 

Corporate debentures

 

 

-

 

 

 

1,818

 

 

 

1,818

 

 

 

-

 

 

 

-

 

 

 

-

 

Commercial paper

 

 

-

 

 

 

14,076

 

 

 

14,076

 

 

 

-

 

 

 

2,998

 

 

 

2,998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debentures and commercial paper

 

 

-

 

 

 

453,315

 

 

 

453,315

 

 

 

-

 

 

 

402,166

 

 

 

402,166

 

Government debentures

 

 

-

 

 

 

47,280

 

 

 

47,280

 

 

 

-

 

 

 

126,683

 

 

 

126,683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets measured at fair value

 

$

204,367

 

 

$

516,489

 

 

$

720,856

 

 

$

206,228

 

 

$

531,847

 

 

$

738,075

 
v3.22.4
CONVERTIBLE SENIOR NOTES, NET (Tables)
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Schedule of Net Carrying Amount of Liability and Equity Components of Notes

 

 

December 31,

 

 

 

2021

 

 

2022

 

Liability component:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal amount

 

$

575,000

 

 

$

575,000

 

Adjustment from Adoption of ASU 2020-06

     -      

46,270

  

Unamortized discount

 

 

(46,976

)

 

 

(46,270

)

Unamortized issuance costs

 

 

(7,930

)

 

 

(5,656

)

 

 

 

 

 

 

 

 

 

Net carrying amount

 

$

520,094

 

 

$

569,344

 

 

 

 

 

 

 

 

 

 

Equity component, net of issuance costs of $2,046 and deferred taxes of $11,022

 

$

65,932

 

 

$

-

 
Schedule of Interest Expense Related to Notes

 

 

Year ended

December 31,

 

 

 

2021

 

 

2022

 

Amortization of debt discount

 

$

15,380

 

 

$

-

 

Amortization of debt issuance costs

 

 

2,412

 

 

 

2,980

 
                 

Total interest expense recognized

 

$

17,792

 

 

$

2,980

 
v3.22.4
SHAREHOLDERS' EQUITY (Tables)
 12 Months Ended
Dec. 31, 2022
Stockholders' Equity Note [Abstract]  
Schedule of Shares Capital

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

Authorized

 

 

Issued and

outstanding

 

 

Authorized

 

 

Issued and

outstanding

 

 

 

Number of shares

 

Ordinary shares of NIS 0.01 par value each

 

 

250,000,000

 

 

 

40,041,870

 

 

 

250,000,000

 

 

 

41,028,571

 
Schedule of Share Based Compensation Expense

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

$

8,734

 

 

$

11,158

 

 

$

15,060

 

Research and development

 

 

14,691

 

 

 

20,498

 

 

 

27,102

 

Sales and marketing

 

 

28,220

 

 

 

38,546

 

 

 

51,099

 

General and administrative

 

 

20,204

 

 

 

25,234

 

 

 

27,560

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total share-based compensation expense

 

$

71,849

 

 

$

95,436

 

 

$

120,821

 
Schedule of Stock Option Activity

 

 

Amount

of

options

 

 

Weighted

average

exercise

price

 

 

Weighted

average

remaining

contractual

term

(in years)

 

 

Aggregate

intrinsic

value

 
                                 

Balance as of December 31, 2021

 

 

460,852

 

 

 

68.78

 

 

 

5.44

 

 

 

48,261

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

21,900

 

 

 

157.22

 

 

 

 

 

 

 

 

 

Exercised

 

 

33,493

 

 

 

54.97

 

 

 

 

 

 

 

 

 

Forfeited

 

 

8,375

 

 

 

169.55

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2022

 

 

440,884

 

 

 

72.31

 

 

 

4.59

 

 

 

26,338

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable as of December 31, 2022

 

 

398,350

 

 

 

64.81

 

 

 

4.16

 

 

 

26,034

 
Schedule of Fair Value Assumptions

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

Options

 

 

 

 

 

 

 

 

 
                         

Expected volatility

 

 

40%-41%

 

 

 

44%-46%

 

 

 

46%-50%

 

Expected dividends

 

 

0%

 

 

 

0%

 

 

 

0%

 

Expected term (in years)

 

 

4.02-4.20

 

 

 

3.65-3.88

 

 

 

3.73-3.76

 

Risk free rate

 

 

0.22%-1.61%

 

 

 

0.49%-0.99%

 

 

 

1.67%-4.40%

 
       

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

ESPP

 

 

 

 

 

 

 

 

 
                         

Expected volatility

 

 

-

 

 

 

33.63%

 

 

 

55.67%-64.20%

 

Expected dividends

 

 

-

 

 

 

0%

 

 

 

0%

 

Expected term (in years)

 

 

-

 

 

 

0.5

 

 

 

0.5

 

Risk free rate

 

 

-

 

 

 

0.1%

 

 

 

2.15%-4.65%

 
Schedule of Options Data

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Weighted-average grant date fair value of options granted

 

$

33.82

 

 

$

55.50

 

 

$

39.69

 

Total intrinsic value of the options exercised

 

$

18,790

 

 

$

20,742

 

 

$

30,031

 
Schedule of RSUs and PSUs Activity

 

 

Amount

of RSUs and

PSUs

 

 

Weighted

average

grant date

fair value

 

 

 

 

 

 

 

 

Unvested as of December 31, 2021

 

 

2,179,714

 

 

$

123.54

 

 

 

 

 

 

 

 

 

 

Granted

 

 

1,325,429

 

 

 

127.10

 

Vested

 

 

835,106

 

 

 

114.21

 

Forfeited

 

 

185,229

 

 

 

129.63

 

 

 

 

 

 

 

 

 

 

Unvested as of December 31, 2022

 

 

2,484,808

 

 

$

128.12

 
v3.22.4
INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Schedule of Income Before Income Taxes

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Domestic loss

 

$

(12,643

)

 

$

(113,339

)

 

$

(167,606

)

Foreign income

 

 

12,254

 

 

 

22,010

 

 

 

30,588

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(389

)

 

$

(91,329

)

 

$

(137,018

)
Schedule of Deferred Tax Assets and Liabilities

 

 

December 31,

 

 

 

2021

 

 

2022

 

Deferred tax assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Carry-forwards losses and credits

 

$

42,202

 

 

$

48,824

 

Capital losses carry-forwards

 

 

96

 

 

 

89

 

Research and development expenses

 

 

11,848

 

 

 

16,367

 

Deferred revenues

 

 

11,005

 

 

 

12,343

 

Intangible assets

 

 

7,730

 

 

 

9,063

 

Share-based compensation

 

 

15,046

 

 

 

21,024

 

Operating lease liability

 

 

1,088

 

 

 

5,691

 

Accruals and other

 

 

4,638

 

 

 

12,224

 

 

 

 

 

 

 

 

 

 

Gross deferred tax assets before valuation allowance

 

 

93,653

 

 

 

125,625

 

 

 

 

 

 

 

 

 

 

Less: Valuation allowance

 

 

20,614

 

 

 

21,741

 

 

 

 

 

 

 

 

 

 

Total deferred tax assets

 

$

73,039

 

 

$

103,884

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangible assets

 

$

2,189

 

 

$

2,892

 

Convertible senior notes

 

 

6,946

 

 

 

6

 

Deferred commission

 

 

14,969

 

 

 

21,885

 

Operating lease ROU asset

 

 

827

 

 

 

5,417

 

Property and equipment and other

 

 

941

 

 

 

875

 

 

 

 

 

 

 

 

 

 

Gross deferred tax liabilities

 

$

25,872

 

 

$

31,075

 
                 

Net deferred tax assets

 

$

47,167

 

 

$

72,809

 
Schedule of Income Taxes

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

7,357

 

 

$

4,589

 

 

$

8,980

 

Deferred

 

 

(1,988

)

 

 

(11,972

)

 

 

(15,630

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

5,369

 

 

$

(7,383

)

 

$

(6,650

)

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

$

(1,431

)

 

$

(12,171

)

 

$

(19,716

)

Foreign

 

 

6,800

 

 

 

4,788

 

 

 

13,066

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

5,369

 

 

$

(7,383

)

 

$

(6,650

)
Schedule of Reconciliation of Income Taxes

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

$

(389

)

 

$

(91,329

)

 

$

(137,018

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Statutory tax rate

 

 

23.0

%

 

 

23.0

%

 

 

23.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Theoretical tax benefit

 

 

(89

)

 

 

(21,006

)

 

 

(31,514

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Excess tax benefits related to share-based compensation

 

 

(3,645

)

 

 

(4,424

)

 

 

(1,817

)

Non-deductible expenses

 

 

3,054

 

 

 

3,988

 

 

 

6,325

 

Intra-entity intellectual property transfer

     5,036       -       -  
Valuation allowance     -       1,896       1,538  

Unrecognized tax benefits

 

 

(322

)

 

 

(1,638

)

 

 

(1,914

)

Foreign and preferred enterprise tax rates differential

 

 

1,714

 

 

 

12,171

 

 

 

18,450

 

Impact of CARES Act

 

 

(683

)

 

 

-

 

 

 

-

 

Prior years and others

 

 

304

 

 

 

1,630

 

 

 

2,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (tax benefit)

 

$

5,369

 

 

$

(7,383

)

 

$

(6,650

)
Schedule of Unrecognized Tax Benefits

 

 

Year ended

December 31,

  

 

 

2020

 

 

2021

 

   2022  

 

 

 

 

 

 

 

        

Opening balance

 

$

3,728

 

 

$

4,633

 

  

$

 3,870  

Decrease related to settlements with taxing authorities

 

 

(796

)

 

 

(2,382

)

     (2,353 )

Increase related to prior year tax positions

 

 

74

 

 

 

976

 

     429  

Decrease related to expiration of statutes of limitations

 

 

(92

)

 

 

-

 

     -  

Increase related to current year tax positions

 

 

1,719

 

 

 

643

 

     859  

 

 

 

 

 

 

 

 

 

        

Closing balance

 

$

4,633

 

 

$

3,870

 

  

$

 2,805  
v3.22.4
FINANCIAL INCOME (EXPENSE), NET (Tables)
 12 Months Ended
Dec. 31, 2022
Other Income and Expenses [Abstract]  
Schedule of Financial income (expense), net

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

Bank charges

 

$

(275

)

 

$

(250

)

 

$

(269

)

Exchange rate income (loss), net

 

 

683

 

 

 

(509

)

 

 

1,564

 

Interest income

 

 

10,380

 

 

 

5,559

 

 

 

17,117

 

Amortization of debt discount and issuance costs

 

 

(17,183

)

 

 

(17,792

)

 

 

(2,980

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial income (expense), net

 

$

(6,395

)

 

$

(12,992

)

 

$

15,432

 
v3.22.4
BASIC AND DILUTED NET LOSS PER SHARE (Tables)
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
Schedule of Basic and Diluted Income (Loss) per Share

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss available to shareholders of ordinary shares

 

$

(5,758

)

 

$

(83,946

)

 

$

(130,368

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing basic and diluted net loss per ordinary shares 

 

 

38,628,770

 

 

 

39,645,453

 

 

 

40,583,002

 
v3.22.4
SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION (Tables)
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Schedule of Revenue by Geographic Location

 

 

Year ended

December 31,

 

 

 

2020

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

246,811

 

 

$

253,811

 

 

$

312,816

 

Israel

 

 

7,312

 

 

 

7,416

 

 

 

6,302

 

United Kingdom

 

 

33,101

 

 

 

35,530

 

 

 

41,297

 

Europe, the Middle East and Africa *)

 

 

101,453

 

 

 

120,382

 

 

 

130,745

 

Other

 

 

75,754

 

 

 

85,778

 

 

 

100,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

464,431

 

 

$

502,917

 

 

$

591,710

 
Schedule of Long-Lived Assets by Geographic Location

 

 

December 31,

 

 

 

2021

 

 

2022

 

 

 

 

 

 

 

 

United States

 

$

6,813

 

 

$

5,353

 

Israel

 

 

24,391

 

 

 

41,948

 

United Kingdom

 

 

1,294

 

 

 

4,858

 

Europe, the Middle East and Africa *)

 

 

474

 

 

 

525

 

Other

 

 

1,370

 

 

 

8,647

 

 

 

 

 

 

 

 

 

 

 

 

$

34,342

 

 

$

61,331

 

*) Excluding United Kingdom and Israel
v3.22.4
GENERAL (Narrative) (Details) - USD ($)
$ in Thousands
 1 Months Ended
Jul. 31, 2022
Mar. 31, 2022
May 31, 2020
Idaptive [Member]      
General [Line Items]      
Total gross consideration     $ 68,603
Acquisition costs     $ 2,932
AAPI1, Inc. [Member]      
General [Line Items]      
Total gross consideration   $ 17,689  
Acquisition costs   $ 252  
C3M, LLC [Member]      
General [Line Items]      
Total gross consideration $ 28,298    
Acquisition costs $ 1,992    
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Jan. 01, 2022
Nov. 30, 2019
Significant Accounting Policies [Line Items]            
Weighted average rate, deposit short term 5.11% 0.72%        
Accumulated other comprehensive income (loss), currency forward and option, net of tax $ (3,138,000) $ 1,086,000        
Accumulated other comprehensive income (loss), currency forward and option, net of tax $ (428,000) 148,000        
Percentage Of Severance Benefits Covered By Contributory Funded Contract Type Corporate Pension Plans 8.33%          
Severance expenses $ 7,836,000 6,368,000 $ 4,813,000      
Maximum annual contribution per employee $ 20,500          
Defined contribution plan, employer matching contribution, percent of employees' gross pay 100.00%          
Maximum employer's annual contribution per employee $ 12,200          
Matching contribution expense 5,629,000 4,386,000 3,533,000      
Marketing expenses 34,438,000 27,504,000 22,082,000      
Retained earnings 33,308,000 137,074,000        
Aggregate amount of the transaction price allocated to remaining performance obligation $ 713,000,000          
Revenue remaining performance obligations percentage 60.00%          
Prepaid expenses and other current assets $ 22,482,000 22,225,000        
Other long-term assets 217,040,000 121,743,000        
Deposits in other long-term assets 4,881,000 5,227,000        
Accrued severance payable liability 7,769,000 8,271,000        
Amortization of deferred contract costs 45,254,000 43,236,000        
Issuance costs attributable to liability       $ 12,900,000    
Issuance costs attributable to equity components       $ 2,000,000    
Unbilled Contracts Receivable Non Current 928,000 1,873,000        
Unbilled receivables 10,318,000 12,517,000        
Recognized deferred revenues 221,134,000          
Additional paid-in capital 660,289,000 588,937,000        
Decrease of deferred tax liabilities 11,022,000          
Decrease in financial expenses $ 14,812,000          
Decrease basic and diluted net loss per share $ 0.36          
ASU 2021-08 (Member)            
Significant Accounting Policies [Line Items]            
Retained earnings         $ 26,602,000  
Additional paid-in capital         65,932,000  
Increase of convertible senior notes         46,270,000  
Decrease of deferred tax liabilities         $ 6,940,000  
Convertible Senior Note [Member]            
Significant Accounting Policies [Line Items]            
Effective interest rate       3.50%   0.00%
Deferred contract costs [Member]            
Significant Accounting Policies [Line Items]            
Prepaid expenses and other current assets $ 1,713,000 801,000        
Other long-term assets $ 138,907,000 96,619,000        
First Three Percent Pay Contribution [Member]            
Significant Accounting Policies [Line Items]            
Defined contribution plan, employer matching contribution, percent of match 100.00%          
Defined contribution plan, employer matching contribution, percent of employees' gross pay 3.00%          
Next Two Percent Contribution [Member]            
Significant Accounting Policies [Line Items]            
Defined contribution plan, employer matching contribution, percent of match 50.00%          
Defined contribution plan, employer matching contribution, percent of employees' gross pay 2.00%          
Employees Over Fifty Years [Member]            
Significant Accounting Policies [Line Items]            
Maximum annual contribution per employee $ 27,000          
Minimum [Member]            
Significant Accounting Policies [Line Items]            
Useful Life Of Finite Lived Intangible Asset 2 years          
Maximum [Member]            
Significant Accounting Policies [Line Items]            
Useful Life Of Finite Lived Intangible Asset 12 years          
Foreign Exchange Forward and Option [Member]            
Significant Accounting Policies [Line Items]            
Notional amounts $ 50,090,000          
Fair value of derivative asset 72,000 751,000        
Foreign Exchange Forward and Option [Member] | Derivative Liabilities [Member]            
Significant Accounting Policies [Line Items]            
Fair value of derivative liability 1,388,000 36,000        
Foreign Exchange Forward [Member]            
Significant Accounting Policies [Line Items]            
Financial Income Expenses Hedging Transaction 2,281,000 (2,099,000) $ (1,317,000)      
Foreign Exchange Forward [Member] | Derivative Assets [Member]            
Significant Accounting Policies [Line Items]            
Fair value of derivative asset 49,000 1,318,000        
fair value of derivative instruments liabilities 3,616,000 $ 86,000        
Foreign Exchange Forward [Member] | Derivative Liabilities [Member]            
Significant Accounting Policies [Line Items]            
Notional amounts $ 96,246,000          
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Depreciation Rates) (Details)
 12 Months Ended
Dec. 31, 2022
Computers, software and Related Equipment [Member] | Minimum [Member]  
Property, Plant and Equipment [Line Items]  
Property, plant and equipment, estimated useful lives 20
Computers, software and Related Equipment [Member] | Maximum [Member]  
Property, Plant and Equipment [Line Items]  
Property, plant and equipment, estimated useful lives 33
Office furniture and equipment [Member] | Minimum [Member]  
Property, Plant and Equipment [Line Items]  
Property, plant and equipment, estimated useful lives 15
Office furniture and equipment [Member] | Maximum [Member]  
Property, Plant and Equipment [Line Items]  
Property, plant and equipment, estimated useful lives 20
Leasehold improvements [Member]  
Property, Plant and Equipment [Line Items]  
Property, plant and equipment, estimated useful lives Over the shorter of the related lease period or the life of the asset
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Schedule of gains (losses) reclassified from accumulated other comprehensive income (loss) to the statements of comprehensive loss) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Significant Accounting Policies [Line Items]      
Cost of revenues $ (126,046) $ (93,307) $ (82,571)
Research and development (190,321) (142,121) (95,426)
Sales and marketing (345,273) (274,401) (219,999)
General and administrative (82,520) (71,425) (60,429)
Total gains (losses), net of tax benefit (taxes on income) (7,194) 2,075 1,471
Derivative instruments [Member]      
Significant Accounting Policies [Line Items]      
Cost of revenues (117) (144) 509
Research and development (1,084) (1,552) 5,381
Sales and marketing (185) (273) 927
General and administrative (281) (389) 1,358
Total gains (losses), before tax benefit (taxes on income) (1,667) (2,358) 8,175
Tax benefit (taxes on income) 196 283 (981)
Total gains (losses), net of tax benefit (taxes on income) $ (1,471) $ (2,075) $ 7,194
v3.22.4
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Company's Revenue by Category) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Disaggregation of Revenue [Line Items]      
Revenue $ 591,710 $ 502,917 $ 464,431
Saas [Member]      
Disaggregation of Revenue [Line Items]      
Revenue 166,361 69,303 24,305
Self-hosted subscription (Member)      
Disaggregation of Revenue [Line Items]      
Revenue [1] 114,288 65,325 32,120
Perpetual License [Member]      
Disaggregation of Revenue [Line Items]      
Revenue 49,964 115,738 176,061
Maintenance and support [Member]      
Disaggregation of Revenue [Line Items]      
Revenue 217,695 214,036 190,897
Professional services [Member]      
Disaggregation of Revenue [Line Items]      
Revenue $ 43,402 $ 38,515 $ 41,048
[1] Self-hosted subscription also includes maintenance associated with self-hosted subscriptions.
v3.22.4
MARKETABLE SECURITIES (Schedule of amortized cost, unrealized gains and losses, and fair value of available-for-sale) (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Marketable Securities [Line Items]    
Amortized cost $ 542,964 $ 501,377
Gross unrealized losses (14,229) [1] (1,747) [2]
Gross unrealized gains 114 965
Fair value 528,849 500,595
Available-for-sale securities, continuous unrealized loss position for twelve months or longer 8,450 16
Corporate debentures [Member]    
Marketable Securities [Line Items]    
Amortized cost 414,278 453,927
Gross unrealized losses (12,223) [1] (1,493) [2]
Gross unrealized gains 111 881
Fair value 402,166 453,315
Government debentures [Member]    
Marketable Securities [Line Items]    
Amortized cost 128,686 47,450
Gross unrealized losses (2,006) [1] (254) [2]
Gross unrealized gains 3 84
Fair value $ 126,683 $ 47,280
[1] Out of the total unrealized losses, an amount of $8,450 has been in a continuous unrealized loss position for twelve months or longer.
[2] Out of the total unrealized losses, an amount of $16 has been in a continuous unrealized loss position for twelve months or longer.
v3.22.4
MARKETABLE SECURITIES (Schedule of amortized cost and fair value of available-for-sale marketable securities) (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Amortized cost    
Available For Sale Securities Debt Maturities Within One Year Amortized Cost $ 304,597 $ 199,883
Due between one and five years 238,367 301,494
Amortized cost 542,964 501,377
Fair value    
Due within one year 301,101 199,933
Due between one and five years 227,748 300,662
Debt Securities, Available-for-sale, Total $ 528,849 $ 500,595
v3.22.4
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Prepaid expenses $ 15,167 $ 15,566
Hedging transaction assets 121 2,069
Government authorities 3,431 3,365
Deferred contract costs 1,713 801
Other current assets 2,050 424
Prepaid expenses and other current assets $ 22,482 $ 22,225
v3.22.4
PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Line Items]      
Depreciation expense $ 9,548 $ 8,418 $ 6,634
Computers, software and Related Equipment [Member]      
Property, Plant and Equipment [Line Items]      
Depreciation expense 2,137 1,471 $ 421
Property and equipment capitalized costs 4,929 4,160  
Share-based compensation costs capitalized during the period $ 758 $ 569  
v3.22.4
PROPERTY AND EQUIPMENT, NET (Schedule of Property and Equipment) (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross $ 57,660 $ 47,119
Less - accumulated depreciation 34,186 26,936
Depreciated cost 23,474 20,183
Computers, software and related equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross [1] 43,300 35,290
Leasehold improvements [Member]    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross 10,087 7,739
Office Furniture and Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment, gross $ 4,273 $ 4,090
[1] For the years ended December 31, 2021 and 2022, the Company capitalized $4,160 and $4,929 including $569 and $758 of share-based compensation costs, relating to its internal use software and website development, respectively.
v3.22.4
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Narrative) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]      
Amortization expense $ 6,655 $ 5,810 $ 8,841
Technology [Member]      
Finite-Lived Intangible Assets [Line Items]      
Weighted-average remaining useful lives 3 years 10 months 24 days    
Customer Relationships [Member]      
Finite-Lived Intangible Assets [Line Items]      
Weighted-average remaining useful lives 8 years 10 months 24 days    
v3.22.4
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Schedule of carrying amount of goodwill) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]    
Balance as of beginning of the year $ 123,717 $ 123,717
Goodwill acquired 29,524 0
Closing balance $ 153,241 $ 123,717
v3.22.4
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Schedule of Intangible Assets) (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]    
Original amount $ 66,172 $ 49,875
Less - accumulated amortization 38,664 32,009
Intangible assets, net 27,508 17,866
Technology [Member]    
Finite-Lived Intangible Assets [Line Items]    
Original amount 55,922 39,625
Customer relationships [Member]    
Finite-Lived Intangible Assets [Line Items]    
Original amount 9,586 9,586
Other [Member]    
Finite-Lived Intangible Assets [Line Items]    
Original amount $ 664 $ 664
v3.22.4
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Schedule of Future Amortization Expense) (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]    
2023 $ 7,365  
2024 7,318  
2025 4,885  
2026 3,477  
2027 2,563  
Thereafter 1,900  
Intangible assets, net $ 27,508 $ 17,866
v3.22.4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Accrued expenses and other current liabilities $ 33,584 $ 23,576
Accrued Expenses and Other Current Liabilities [Member]    
Government authorities 5,682 3,839
Accrued expenses 12,236 8,771
Unrecognized tax benefits 2,805 3,870
Lease liabilities, current 7,857 6,974
Hedging transaction liabilities $ 5,004 $ 122
v3.22.4
COMMITMENTS AND CONTINGENT LIABILITIES (Narrative) (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Bank guarantee $ 2,189
Non-cancelable material purchase obligations $ 33,408
v3.22.4
COMMITMENTS AND CONTINGENT LIABILITIES (Schedule of future payments under non-cancelable material purchase obligations) (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2023 $ 22,415
2024 8,942
2025 2,051
Non-cancelable material purchase obligations $ 33,408
v3.22.4
LEASES (Narrative) (Details)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Lessee, Lease, Description [Line Items]    
Weighted average remaining lease term (in years) 5 years 8 months 12 days 2 years 10 months 24 days
Number of years in which lease term can be extended 5 years  
Maximum [Member]    
Lessee, Lease, Description [Line Items]    
Weighted average remaining lease term (in years) 7 years  
v3.22.4
LEASES (Schedule of Components of Operating Lease Costs) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Leases [Abstract]    
Operating lease cost $ 7,522 $ 7,224
Short-term lease cost 1,326 1,188
Variable lease cost 1,342 1,302
Sublease income 0 (195)
Total net lease costs $ 10,190 $ 9,519
v3.22.4
LEASES (Schedule of Supplemental Balance Sheet Information Related to Operating Leases) (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Operating lease ROU assets (under other long-term assets in the balance sheets) $ 37,857 $ 14,159
Weighted average remaining lease term (in years) 5 years 8 months 12 days 2 years 10 months 24 days
Weighted average discount rate 2.80% 1.70%
Accrued Expenses and Other Current Liabilities [Member]    
Operating lease liabilities, current $ 7,857 $ 6,974
Non-current Liabilities [Member]    
Operating lease liabilities, long-term (under other long-term liabilities in the balance sheets) $ 28,874 $ 10,239
v3.22.4
LEASES (Schedule of Minimum Lease Payments for Company's ROU Assets Over Remaining Lease Periods) (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
2023 $ 7,691
2024 7,384
2025 6,663
2026 5,717
2027 5,174
Thereafter 6,670
Total undiscounted lease payments 39,299
Less: imputed interest (2,568)
Liabilities [Member]  
Present value of lease liabilities $ 36,731
v3.22.4
FAIR VALUE MEASUREMENTS (Narrative) (Details)
$ in Millions
Dec. 31, 2022
USD ($)
SeniorNotesMember  
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]  
Estimated fair value $ 599.7
v3.22.4
FAIR VALUE MEASUREMENTS (Schedule of fair value of financial assets and liabilities) (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair Value Money Market And Marketable Securities $ 738,075 $ 720,856
Corporate Debentures [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 0 1,818
Available For Sale Marketable Securities 402,166 453,315
Government debentures [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Available For Sale Marketable Securities 126,683 47,280
Commercial paper [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 2,998 14,076
Cash equivalent and Money market funds [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 206,228 204,367
Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair Value Money Market And Marketable Securities 206,228 204,367
Level 1 [Member] | Corporate Debentures [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 0 0
Available For Sale Marketable Securities 0 0
Level 1 [Member] | Government debentures [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Available For Sale Marketable Securities 0 0
Level 1 [Member] | Commercial paper [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 0 0
Level 1 [Member] | Cash equivalent and Money market funds [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 206,228 204,367
Level 2 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Fair Value Money Market And Marketable Securities 531,847 516,489
Level 2 [Member] | Corporate Debentures [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 0 1,818
Available For Sale Marketable Securities 402,166 453,315
Level 2 [Member] | Government debentures [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Available For Sale Marketable Securities 126,683 47,280
Level 2 [Member] | Commercial paper [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents 2,998 14,076
Level 2 [Member] | Cash equivalent and Money market funds [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash equivalents $ 0 $ 0
v3.22.4
CONVERTIBLE SENIOR NOTES, NET (Narrative) (Details)
$ / shares in Units, $ in Thousands
 1 Months Ended
Nov. 30, 2019
USD ($)
$ / shares
Dec. 31, 2022
₪ / shares
Dec. 31, 2022
USD ($)
$ / shares
Dec. 31, 2021
₪ / shares
Dec. 31, 2021
USD ($)
Dec. 31, 2019
Debt Instrument [Line Items]            
Common Stock, Par or Stated Value Per Share | ₪ / shares   ₪ 0.01   ₪ 0.01    
Cost of capped call transactions $ 53,600          
Capped call initial strike price | $ / shares     $ 157.53      
Issuance costs     $ 2,046      
Deferred Tax Liabilities, Net     11,022      
Convertible Senior Note [Member]            
Debt Instrument [Line Items]            
Principal amount $ 500,000   $ 575,000   $ 575,000  
Coupon rate 0.00%         3.50%
Due date 2024-11-15          
Debt Instrument Additional Face Amount $ 75,000          
Conversion rate description The Convertible Notes are convertible based upon an initial conversion rate of 6.3478 of the Company's ordinary shares, par value NIS 0.01 per share per $1 principal amount of Convertible Notes (equivalent to a conversion price of approximately $157.53 per ordinary share).          
Conversion rate percentage 130.00%          
Principal amount of convertible notes for each trading day $ 1          
Percentage of measurement period of product of last reported sale price 98.00%          
Percentage of repurchase price equal to principal amount of convertible notes 100.00%          
Cap price of the capped call transactions | $ / shares $ 229.14          
v3.22.4
CONVERTIBLE SENIOR NOTES, NET (Schedule of Net Carrying Amount of Liability and Equity Components of Notes) (Details) - Convertible Senior Note [Member] - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Nov. 30, 2019
Net carrying amount of the liability and equity components:      
Principal amount $ 575,000 $ 575,000 $ 500,000
Adjustment from Adoption of ASU 2020-06 46,270 0  
Unamortized discount (46,270) (46,976)  
Unamortized issuance costs (5,656) (7,930)  
Net carrying amount 569,344 520,094  
Equity component, net of issuance costs of $2,046 and deferred taxes of $11,022 $ 0 $ 65,932  
v3.22.4
CONVERTIBLE SENIOR NOTES, NET (Schedule of Interest Expense Related to Notes) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Debt Disclosure [Abstract]      
Amortization of debt discount $ 0 $ 15,380  
Amortization of debt issuance costs 2,980 2,412  
Total interest expense recognized $ 2,980 $ 17,792 $ 17,183
v3.22.4
SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Class of Stock [Line Items]      
Number of shares reserved for future grants 1,303,628    
Unrecognized share based compensation expense $ 239,489    
Unrecognized share based compensation expense recognition period 2 years 7 months 2 days    
Total fair value of RSUs and PSUs vested $ 117,812 $ 113,918 $ 76,027
Employee Stock Purchase Plan ("ESPP")      
Class of Stock [Line Items]      
Number of shares reserved for future grants 6,898    
Percentage of amount not exceeding share based compensation employees receive. 15.00%    
Number of ordinary shares reserved 125,000    
Increase in number of ordinary shares 1,000,000    
Percentage of fair value of ordinary shares 85.00%    
Number of increase in ordinary shares reserved for issuance 200,000    
v3.22.4
SHAREHOLDERS' EQUITY (Schedule of Shares Capital) (Details) - ₪ / shares
Dec. 31, 2022
Dec. 31, 2021
Stockholders' Equity Note [Abstract]    
Ordinary shares, Authorized 250,000,000 250,000,000
Common Stock, Shares, Issued 41,028,571 40,041,870
Common Stock, Shares, Outstanding 41,028,571 40,041,870
Common Stock, Par or Stated Value Per Share ₪ 0.01 ₪ 0.01
v3.22.4
SHAREHOLDERS' EQUITY (Schedule of Share Based Compensation Expense) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense $ 120,821 $ 95,436 $ 71,849
Cost of revenues [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense 15,060 11,158 8,734
Research and development [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense 27,102 20,498 14,691
Sales and marketing [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense 51,099 38,546 28,220
General and administrative [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense $ 27,560 $ 25,234 $ 20,204
v3.22.4
SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Amount of options    
Beginning balance 460,852  
Granted 21,900  
Exercised 33,493  
Forfeited 8,375  
Ending balance 440,884 460,852
Exercisable 398,350  
Weighted average exercise price    
Beginning balance $ 68.78  
Granted 157.22  
Exercised 54.97  
Forfeited 169.55  
Ending balance 72.31 $ 68.78
Exercisable $ 64.81  
Weighted average remaining contractual term (in years)    
Options outstanding 4 years 7 months 2 days 5 years 5 months 8 days
Exercisable as of December 31, 2022 4 years 1 month 28 days  
Aggregate intrinsic value    
Options outstanding $ 26,338 $ 48,261
Exercisable $ 26,034  
v3.22.4
SHAREHOLDERS' EQUITY (Schedule of Fair Value Assumptions) (Details)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
ESPP [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected volatility   33.63% 0.00%
Expected dividends 0.00% 0.00% 0.00%
Expected term (in years) 6 months 6 months 0 years
Risk free rate   0.10% 0.00%
Minimum [Member] | ESPP [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected volatility 55.67%    
Risk free rate 2.15%    
Maximum [Member] | ESPP [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected volatility 64.20%    
Risk free rate 4.65%    
Options [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected dividends 0.00% 0.00% 0.00%
Options [Member] | Minimum [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected volatility 46.00% 44.00% 40.00%
Expected term (in years) 3 years 8 months 23 days 3 years 7 months 24 days 4 years 7 days
Risk free rate 1.67% 0.49% 0.22%
Options [Member] | Maximum [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected volatility 50.00% 46.00% 41.00%
Expected term (in years) 3 years 9 months 3 days 3 years 10 months 17 days 4 years 2 months 12 days
Risk free rate 4.40% 0.99% 1.61%
v3.22.4
SHAREHOLDERS' EQUITY (Schedule of Options Data) (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Stockholders' Equity Note [Abstract]      
Weighted-average grant date fair value of options granted $ 39.69 $ 55.5 $ 33.82
Total intrinsic value of the options exercised $ 30,031 $ 20,742 $ 18,790
v3.22.4
SHAREHOLDERS' EQUITY (Schedule of RSUs and PSUs Activity) (Details)
 12 Months Ended
Dec. 31, 2022
$ / shares
shares
Amount of RSUs and PSUs  
Unvested beginning balance | shares 2,179,714
Granted | shares 1,325,429
Vested | shares 835,106
Forfeited | shares 185,229
Unvested ending balance | shares 2,484,808
Weighted average grant date fair value  
Unvested beginning balance | $ / shares $ 123.54
Granted | $ / shares 127.1
Vested | $ / shares 114.21
Forfeited | $ / shares 129.63
Unvested ending balance | $ / shares $ 128.12
v3.22.4
INCOME TAXES (Narrative) (Details)
$ in Thousands, ₪ in Millions
 12 Months Ended
Dec. 31, 2022
ILS (₪)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Operating Loss Carryforwards [Line Items]        
Corporate tax rate in effect 23.00% 23.00% 23.00% 23.00%
Undistributed earnings   $ 72,857    
Operating loss carry-forwards   132,285    
Capital tax losses   $ 436    
Operating loss carry-forward expiration term 20 years 20 years    
Operating loss carry-forward post tax act losses   $ 97,930    
Percentage of taxable income limitation 80.00% 80.00%    
Tax exempt profits   $ 14,452    
Income tax liability that would have been incurred if retained tax exempt income is distributed   $ 3,548    
Capital gains tax rate 12.00% 12.00%    
Percentage of annual income derived from exports 25.00% 25.00%    
Purchase of intangible assets from foreign resident | ₪ ₪ 200      
Foreign tax rate 4.00% 4.00%    
Withholding tax rate 20.00% 20.00%    
Interest expense (income) related to uncertain tax positions   $ (87) $ (21) $ 21
Total accrual for interest   25 $ 112  
U.S. [Member]        
Operating Loss Carryforwards [Line Items]        
Operating loss carry-forwards   119,657    
Foreign Country Subsidiary [Member]        
Operating Loss Carryforwards [Line Items]        
Operating loss carry-forwards   $ 21,727    
Israel [Member]        
Operating Loss Carryforwards [Line Items]        
Corporate tax rate in effect 12.00% 12.00%    
v3.22.4
INCOME TAXES (Schedule of Loss Before Taxes on Income ) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
Domestic loss $ (167,606) $ (113,339) $ (12,643)
Foreign income 30,588 22,010 12,254
Loss before taxes on income $ (137,018) $ (91,329) $ (389)
v3.22.4
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Deferred tax assets:    
Carry-forwards losses and credits $ 48,824 $ 42,202
Capital losses carry-forwards 89 96
Research and development expenses 16,367 11,848
Deferred revenues 12,343 11,005
Intangible assets 9,063 7,730
Share-based compensation 21,024 15,046
Operating lease liability 5,691 1,088
Accruals and other 12,224 4,638
Gross deferred tax assets before valuation allowance 125,625 93,653
Less: Valuation allowance 21,741 20,614
Total deferred tax assets 103,884 73,039
Deferred tax liabilities:    
Intangible assets 2,892 2,189
Convertible senior notes 6 6,946
Deferred commission 21,885 14,969
Operating lease ROU asset 5,417 827
Property and equipment and other 875 941
Gross deferred tax liabilities 31,075 25,872
Net deferred tax assets $ 72,809 $ 47,167
v3.22.4
INCOME TAXES (Schedule of Income Taxes) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
Current $ 8,980 $ 4,589 $ 7,357
Deferred (15,630) (11,972) (1,988)
Domestic (19,716) (12,171) (1,431)
Foreign 13,066 4,788 6,800
Income tax expense $ (6,650) $ (7,383) $ 5,369
v3.22.4
INCOME TAXES (Schedule of Reconciliation of Income Taxes) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
Loss before income taxes $ (137,018) $ (91,329) $ (389)
Statutory tax rate 23.00% 23.00% 23.00%
Theoretical tax benefit $ (31,514) $ (21,006) $ (89)
Excess tax benefits related to share-based compensation (1,817) (4,424) (3,645)
Non-deductible expenses 6,325 3,988 3,054
Intra-entity intellectual property transfer 0 0 5,036
Valuation allowance 1,538 1,896 0
Unrecognized tax benefits (1,914) (1,638) (322)
Foreign and preferred enterprise tax rates differential 18,450 12,171 1,714
Impact of CARES Act 0 0 (683)
Prior years and others 2,282 1,630 304
Income tax expense (tax benefit) $ (6,650) $ (7,383) $ 5,369
v3.22.4
INCOME TAXES (Schedule of Unrecognized Tax Benefits) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
Opening balance $ 3,870 $ 4,633 $ 3,728
Decrease related to settlements with taxing authorities (2,353) (2,382) (796)
Increase related to prior year tax positions 429 976 74
Decrease related to expiration of statutes of limitations 0 0 (92)
Increase related to current year tax positions 859 643 1,719
Closing balance $ 2,805 $ 3,870 $ 4,633
v3.22.4
FINANCIAL INCOME (EXPENSE), NET (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Other Income and Expenses [Abstract]      
Bank charges $ (269) $ (250) $ (275)
Exchange rate income (loss), net 1,564 (509) 683
Interest income 17,117 5,559 10,380
Amortization of debt discount and issuance costs (2,980) (17,792) (17,183)
Financial income (expense), net $ 15,432 $ (12,992) $ (6,395)
v3.22.4
BASIC AND DILUTED NET LOSS PER SHARE (Narrative) (Details) - shares
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Antidilutive securities excluded from computation of earnings per share, amount 2,839,883 2,734,308 2,823,985
Number of additional antidilutive securities excluded from computation of earnings per share amount 3,600,000    
v3.22.4
BASIC AND DILUTED NET LOSS PER SHARE (Schedule of Basic Income per Share) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Numerator:      
Net loss available to shareholders of ordinary shares, basic $ (130,368) $ (83,946) $ (5,758)
Denominator:      
Shares used in computing basic net loss per ordinary shares 40,583,002 39,645,453 38,628,770
v3.22.4
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE (Schedule of Diluted Income per Share) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Numerator:      
Net loss available to shareholders of ordinary shares, diluted $ (130,368) $ (83,946) $ (5,758)
Denominator:      
Shares used in computing diluted net loss per ordinary shares 40,583,002 39,645,453 38,628,770
v3.22.4
SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION (Narrative) (Details)
 36 Months Ended
Dec. 31, 2022
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Single Customer [Member]  
Segment Reporting Information [Line Items]  
Revenue Percentage 10.00%
v3.22.4
SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION (Schedule of Revenue by Geographic Location) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Segment Reporting Information [Line Items]      
Revenue $ 591,710 $ 502,917 $ 464,431
United States [Member]      
Segment Reporting Information [Line Items]      
Revenue 312,816 253,811 246,811
Israel [Member]      
Segment Reporting Information [Line Items]      
Revenue 6,302 7,416 7,312
United Kingdom [Member]      
Segment Reporting Information [Line Items]      
Revenue 41,297 35,530 33,101
Europe, the Middle East and Africa [Member]      
Segment Reporting Information [Line Items]      
Revenue [1] 130,745 120,382 101,453
Other [Member]      
Segment Reporting Information [Line Items]      
Revenue $ 100,550 $ 85,778 $ 75,754
[1] Excluding United Kingdom and Israel
v3.22.4
SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION (Schedule of Long-Lived Assets by Geographic Location) (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Segment Reporting Information [Line Items]    
Long Lived Assets $ 61,331 $ 34,342
United States [Member]    
Segment Reporting Information [Line Items]    
Long Lived Assets 5,353 6,813
Israel [Member]    
Segment Reporting Information [Line Items]    
Long Lived Assets 41,948 24,391
United Kingdom [Member]    
Segment Reporting Information [Line Items]    
Long Lived Assets 4,858 1,294
Europe, the Middle East and Africa [Member]    
Segment Reporting Information [Line Items]    
Long Lived Assets [1] 525 474
Other [Member]    
Segment Reporting Information [Line Items]    
Long Lived Assets $ 8,647 $ 1,370
[1] Excluding United Kingdom and Israel