ZIPRECRUITER, INC., 10-K filed on 2/27/2023
Annual Report
v3.22.4
Cover - USD ($)
$ in Billions
 12 Months Ended
Dec. 31, 2022
Feb. 17, 2023
Jun. 30, 2022
Document Information [Line Items]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2022    
Current Fiscal Year End Date --12-31    
Document Transition Report false    
Entity File Number 001-40406    
Entity Registrant Name ZIPRECRUITER, INC.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 27-2976158    
Entity Address, Address Line One 604 Arizona Avenue    
Entity Address, City or Town Santa Monica    
Entity Address, State or Province CA    
Entity Address, Postal Zip Code 90401    
City Area Code 877    
Local Phone Number 252-1062    
Title of 12(b) Security Class A common stock, $0.00001 par value per share    
Trading Symbol ZIP    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Entity Public Float     $ 1.1
Documents Incorporated by Reference Information required in response to Part III of Form 10-K (Items 10, 11, 12, 13 and 14) is hereby incorporated by reference to portions of the Registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held in 2023. The Proxy Statement will be filed by the Registrant with the Securities and Exchange Commission no later than 120 days after the end of the Registrant’s fiscal year ended December 31, 2022.    
Entity Central Index Key 0001617553    
Document Fiscal Year Focus 2022    
Document Fiscal Period Focus FY    
Amendment Flag false    
Common Class A      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   74,825,822  
Common Class B      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   30,183,316  
v3.22.4
Audit Information
 12 Months Ended
Dec. 31, 2022
Audit Information [Abstract]  
Auditor Firm ID 238
Auditor Name PricewaterhouseCoopers LLP
Auditor Location Los Angeles, California
v3.22.4
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Current assets    
Cash and cash equivalents $ 227,380 $ 254,621
Marketable securities 342,975 0
Accounts receivable, net of allowances of $3,693 and $3,325 at December 31, 2022 and December 31, 2021, respectively 44,421 41,657
Prepaid expenses and other current assets 12,648 9,721
Deferred commissions, current portion 4,870 4,640
Total current assets 632,294 310,639
Property and equipment, net 8,103 8,702
Operating lease right-of-use assets 12,179 18,515
Internal use software, net 15,758 13,657
Deferred commissions, net of current portion 4,813 4,011
Goodwill 1,724 1,724
Deferred tax assets, net 38,653 38,029
Other assets 1,039 3,342
Total assets 714,563 398,619
Current liabilities    
Accounts payable 21,175 24,862
Accrued expenses 69,115 86,213
Accrued interest 12,837 0
Deferred revenue 19,580 23,253
Operating lease liabilities, current portion 5,429 6,109
Other current liabilities 1,527 2,457
Total current liabilities 129,663 142,894
Operating lease liabilities, net of current portion 13,018 19,179
Long-term borrowings 541,559 0
Other long-term liabilities 1,703 1,578
Total liabilities 685,943 163,651
Commitments and contingencies (Note 9)
Stockholders' equity    
Preferred Stock, $0.00001 par value; 50,000 shares authorized as of December 31, 2022 and December 31, 2021; no shares issued and outstanding as of December 31, 2022 and December 31, 2021 0 0
Class B treasury stock, 195 shares outstanding as of December 31, 2022 and December 31, 2021 (644) (644)
Additional paid-in capital 35,926 303,395
Accumulated deficit (6,290) (67,784)
Accumulated other comprehensive loss (373) 0
Total stockholders' equity 28,620 234,968
Total liabilities and stockholders' equity 714,563 398,619
Common Class A    
Stockholders' equity    
Common stock 1 1
Common Class B    
Stockholders' equity    
Common stock $ 0 $ 0
v3.22.4
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Current assets    
Accounts receivable, allowance for credit loss, current $ 3,693 $ 3,325
Stockholders' equity    
Preferred stock, par value (in dollars per share) $ 0.00001 $ 0.00001
Preferred stock, authorized (in shares) 50,000,000 50,000,000
Preferred stock, issued (in shares) 0 0
Preferred stock, outstanding (in shares) 0 0
Common stock, par value (in dollars per share) $ 0.00001  
Common stock, authorized (in shares) 1,450,000,000  
Treasury stock (in shares) 195,000 195,000
Common Class A    
Stockholders' equity    
Common stock, par value (in dollars per share) $ 0.00001 $ 0.00001
Common stock, authorized (in shares) 700,000,000 700,000,000
Common stock, issued (in shares) 74,320,000 87,843,000
Common stock, outstanding (in shares) 74,320,000 87,843,000
Common Class B    
Stockholders' equity    
Common stock, par value (in dollars per share) $ 0.00001 $ 0.00001
Common stock, authorized (in shares) 700,000,000 700,000,000
Common stock, issued (in shares) 30,379,000 30,571,000
Common stock, outstanding (in shares) 30,184,000 30,376,000
v3.22.4
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Statement [Abstract]      
Revenue $ 904,649 $ 741,141 $ 418,142
Cost of revenue 86,298 79,614 54,163
Gross profit 818,351 661,527 363,979
Operating expenses      
Sales and marketing 484,429 410,665 191,141
Research and development 127,737 110,470 69,408
General and administrative 108,957 148,784 38,998
Total operating expenses 721,123 669,919 299,547
Income (loss) from operations 97,228 (8,392) 64,432
Other income (expense)      
Interest expense (28,498) (916) (1,037)
Other income, net 5,354 32 942
Total other expense, net (23,144) (884) (95)
Income (loss) before income taxes 74,084 (9,276) 64,337
Income tax expense (benefit) 12,590 (12,876) (21,711)
Net income 61,494 3,600 86,048
Less: Accretion of redeemable convertible preferred stock 0 (1,480) (3,883)
Less: Undistributed earnings attributable to participating securities 0 (168) (19,148)
Net income attributable to Class A and Class B common stockholders $ 61,494 $ 1,952 $ 63,017
Net income per share attributable to Class A and Class B common stockholders:      
Basic (in dollars per share) $ 0.54 $ 0.02 $ 0.79
Diluted (in dollars per share) $ 0.51 $ 0.02 $ 0.70
Weighted average shares used in computing net income per share attributable to Class A and Class B common stockholders:      
Basic (in shares) 114,272 102,230 79,651
Diluted (in shares) 121,398 115,471 94,156
v3.22.4
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Statement of Comprehensive Income [Abstract]      
Net income $ 61,494 $ 3,600 $ 86,048
Other comprehensive loss, net of tax:      
Change in unrealized losses on available-for-sale debt securities (373) 0 0
Total other comprehensive loss (373) 0 0
Total comprehensive income $ 61,121 $ 3,600 $ 86,048
v3.22.4
Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($)
$ in Thousands
Total
Conversion Of Redeemable Convertible Preferred Stock To Common Stock
Conversion Of Convertible Notes With Related Parties To Common Stock
Conversion Of Class B Stock To Class A Stock
Cumulative Effect, Period of Adoption, Adjustment
Additional Paid-in Capital
Additional Paid-in Capital
Conversion Of Redeemable Convertible Preferred Stock To Common Stock
Additional Paid-in Capital
Conversion Of Convertible Notes With Related Parties To Common Stock
Additional Paid-in Capital
Cumulative Effect, Period of Adoption, Adjustment
Retained Earnings (Accumulated Deficit)
Retained Earnings (Accumulated Deficit)
Cumulative Effect, Period of Adoption, Adjustment
Accumulated Other Comprehensive Loss
Series A Preferred Stock
Series B Preferred Stock
Common Class A
Common Stock
Common Class A
Common Stock
Conversion Of Class B Stock To Class A Stock
Common Class B
Common Stock
Common Class B
Common Stock
Conversion Of Redeemable Convertible Preferred Stock To Common Stock
Common Class B
Common Stock
Conversion Of Convertible Notes With Related Parties To Common Stock
Common Class B
Common Stock
Conversion Of Class B Stock To Class A Stock
Common Class B
Treasury Stock
Beginning balance (in shares) at Dec. 31, 2019                         2,271,000 6,031,000              
Beginning balance at Dec. 31, 2019                         $ 83,375 $ 49,598              
Increase (Decrease) in Temporary Equity [Roll Forward]                                          
Accretion of redeemable convertible preferred stock                         $ 3,743 $ 140              
Ending balance (in shares) at Dec. 31, 2020                         2,271,000 6,031,000              
Ending balance at Dec. 31, 2020                         $ 87,118 $ 49,738              
Beginning balance (in shares) at Dec. 31, 2019                             0   79,583,000        
Beginning balance at Dec. 31, 2019 $ (122,311)       $ 0 $ 35,339     $ 426 $ (157,006) $ (426) $ 0     $ 0   $ 0       $ (644)
Beginning balance (in shares) at Dec. 31, 2019                                         (195,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                          
Issuance of common stock upon exercise of options (in shares)                                 2,184,000        
Issuance of common stock upon exercise of options 2,943         2,943                              
Repurchase and retirement of common stock (in shares)                                 (2,987,000)        
Repurchase and retirement of common stock (19,000)         (19,000)                              
Stock-based compensation 5,907         5,907                              
Capital contribution (in shares)                                 (497,000)        
Accretion of redeemable convertible preferred stock (3,883)         (3,883)                              
Net income 86,048                 86,048                      
Ending balance (in shares) at Dec. 31, 2020                             0   78,283,000        
Ending balance at Dec. 31, 2020 (50,296)         21,732       (71,384)   0     $ 0   $ 0       $ (644)
Ending balance (in shares) at Dec. 31, 2020                                         (195,000)
Increase (Decrease) in Temporary Equity [Roll Forward]                                          
Accretion of redeemable convertible preferred stock                         $ 1,427 $ 53              
Conversion of redeemable convertible preferred stock to common stock (in shares)                         (2,271,000) (6,031,000)              
Conversion of redeemable convertible preferred stock to common stock                         $ (88,545) $ (49,791)              
Ending balance (in shares) at Dec. 31, 2021                         0 0              
Ending balance at Dec. 31, 2021                         $ 0 $ 0              
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                          
Issuance of common stock upon exercise of options (in shares)                             244,000   3,278,000        
Repurchase and retirement of common stock (in shares)                                 (150,000)        
Repurchase and retirement of common stock (2,750)         (2,750)                              
Vesting of early exercised options 295         295                              
Stock-based compensation 109,143         109,143                              
Shares withheld related to net share settlement (in shares)                                 (212,000)        
Shares withheld related to net share settlement (5,239)         (5,239)                              
Accretion of redeemable convertible preferred stock (1,480)         (1,480)                              
Conversion of shares (in shares)                               87,599,000   24,202,000 3,085,000 (87,599,000)  
Conversion of shares   $ 138,336 $ 25,653 $ 0     $ 138,335 $ 25,653               $ 1   $ 1   $ (1)  
Issuance of common stock upon exercise of options (in shares)                                 9,684,000        
Issuance of common stock upon exercise of options 17,706         17,706                              
Net income 3,600                 3,600                      
Ending balance (in shares) at Dec. 31, 2021                             87,843,000   30,571,000        
Ending balance at Dec. 31, 2021 234,968         303,395       (67,784)   0     $ 1   $ 0       $ (644)
Ending balance (in shares) at Dec. 31, 2021                                         (195,000)
Ending balance (in shares) at Dec. 31, 2022                         0 0              
Ending balance at Dec. 31, 2022                         $ 0 $ 0              
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                          
Issuance of common stock upon exercise of options (in shares)                             1,333,000   1,459,000        
Repurchase and retirement of common stock (in shares)                             (18,629,000)            
Repurchase and retirement of common stock (339,256)         (339,256)                              
Vesting of early exercised options 97         97                              
Stock-based compensation 77,599         77,599                              
Shares withheld related to net share settlement (in shares)                             (468,000)   (614,000)        
Shares withheld related to net share settlement (19,157)         (19,157)                              
Conversion of shares (in shares)                               3,784,000       (3,784,000)  
Issuance of common stock upon exercise of options (in shares)                             8,000   2,747,000        
Issuance of common stock upon exercise of options 5,119         5,119                              
Shares issued under employee stock purchase plan (in shares)                             449,000            
Shares issued under employee stock purchase plan 8,129         8,129                              
Net income 61,494                 61,494                      
Other comprehensive loss (373)                     (373)                  
Ending balance (in shares) at Dec. 31, 2022                             74,320,000   30,379,000        
Ending balance at Dec. 31, 2022 $ 28,620         $ 35,926       $ (6,290)   $ (373)     $ 1   $ 0       $ (644)
Ending balance (in shares) at Dec. 31, 2022                                         (195,000)
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 income $ 61,494 $ 3,600 $ 86,048
Adjustments to reconcile net income to net cash provided by operating activities:      
Stock-based compensation expense 76,956 107,258 5,752
Depreciation and amortization 10,682 9,463 9,949
Provision for bad debts 3,904 1,796 3,218
Deferred income taxes (624) (14,946) (22,911)
Non-cash lease expense 4,433 5,387 5,562
Amortization and accretion of marketable securities (2,512) 0 0
Other 3,334 200 341
Change in operating assets and liabilities:      
Accounts receivable (6,668) (22,417) 1,321
Prepaid expenses and other current assets (2,555) (4,703) 2,218
Deferred commissions, net (1,032) (1,212) (1,680)
Other assets 1,803 (2,130) 179
Accounts payable (3,579) 11,227 5,115
Accrued expenses and other liabilities (19,161) 45,270 2,165
Accrued interest 12,705 120 12
Deferred revenue (3,671) 8,136 (3,346)
Operating lease liabilities (6,701) (2,913) (5,930)
Net cash provided by operating activities 128,808 144,136 88,013
Cash flows from investing activities      
Purchases of property and equipment (2,692) (6,083) (1,355)
Capitalized internal-use software costs (7,852) (7,253) (6,018)
Purchases of marketable securities (367,055) 0 0
Sales of marketable securities 861 0 0
Paydowns, maturities, and redemptions of marketable securities 25,604 0 0
Net cash used in investing activities (351,134) (13,336) (7,373)
Cash flows from financing activities      
Payments of issuance costs (9,378) (1,270)  
Proceeds from issuance of senior unsecured notes 550,000 0 0
Repurchase of common stock (339,256) (2,750) (19,000)
Proceeds from exercise of stock options 4,747 18,541 2,370
Payments of tax withholdings on net settlement of equity awards (19,157) (5,239) 0
Proceeds from issuance of stock under employee stock purchase plan 8,129 0 0
Proceeds from term loan 0 0 10,000
Repayment of term loan 0 0 (20,000)
Proceeds from revolving line 0 0 16,500
Repayment of revolving line 0 0 (16,500)
Proceeds from convertible notes with related parties 0 0 25,000
Net cash provided by (used in) financing activities 195,085 9,282 (1,630)
Net increase (decrease) in cash (27,241) 140,082 79,010
Beginning of period 254,621 114,539 35,529
End of period 227,380 254,621 114,539
Supplemental disclosure of cash flow information      
Income taxes paid 14,743 1,938 1,003
Interest paid 14,602 344 703
Supplemental disclosure of non-cash activities      
Capitalized assets included in accounts payable and accrued expenses 1,366 1,506 1,109
Stock-based compensation capitalized for software 2,160 1,885 155
In-transit proceeds from exercise of stock options 501 129 573
Operating lease right-of-use assets obtained in exchange for new operating lease 0 0 5,787
Decrease (increase) in operating lease right-of-use asset and operating lease liability due to lease modification 0 (1,402) 0
Accretion of redeemable convertible preferred stock 0 1,480 3,883
Conversion of redeemable convertible preferred stock 0 138,336 0
Conversion of convertible notes and accrued interest with related parties $ 0 $ 25,653 $ 0
v3.22.4
Organization and Description of Business
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Description of Business Organization and Description of Business
ZipRecruiter, Inc. was incorporated in the state of Delaware on June 29, 2010. Hereinafter, ZipRecruiter, Inc. and its wholly owned subsidiaries ZipRecruiter Israel Ltd., ZipRecruiter UK Ltd., and ZipRecruiter Canada Ltd. are collectively referred to as “ZipRecruiter” or the “Company.” The Company is a two-sided marketplace that enables employers and job seekers to connect with one another online to fill job opportunities.
Direct Listing
On May 14, 2021, the Company’s registration statement related to the direct listing of its Class A common stock on the New York Stock Exchange (“NYSE”) (the “Direct Listing”) was declared effective by the Securities and Exchange Commission (“SEC”) and on May 26, 2021, the Direct Listing was completed and the Company’s Class A common stock commenced trading.
Immediately prior to the completion of the Direct Listing, the Company filed its amended and restated certificate of incorporation, which resulted in the creation of Class A common stock and Class B common stock. All existing shares of common stock issued and outstanding or held as treasury stock were reclassified into shares of Class B common stock.
In connection with the effectiveness of the Direct Listing, all 2.3 million outstanding shares of Series A Redeemable Convertible Preferred Stock (“Series A preferred stock”) and all 6.0 million outstanding shares of Series B Redeemable Convertible Preferred Stock (“Series B preferred stock”) converted into 24.2 million shares of Class B common stock. On May 26, 2021, the Company’s convertible notes with related parties converted into 3.1 million shares of Class B common stock.
The Company incurred fees related to financial advisory services, accounting and legal expenses, the bonus earned by the Company’s Chief Executive Officer (“CEO”), and other filing costs in connection with the Direct Listing in the first half of the fiscal year 2021. These costs totaled $34.0 million for the year ended December 31, 2021 and have been recorded in general and administrative expenses.
v3.22.4
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to prior year presentation to conform to current year presentation.
Foreign Currency Remeasurement
The Company’s foreign subsidiaries operate in their local currency and their functional currency is the U.S. dollar. Monetary assets and liabilities of each subsidiary, denominated in local or other foreign currency, are remeasured at the end of each reporting period using the exchange rates at that date. Non-monetary assets and liabilities and equity are remeasured at the historical exchange rates, while results of operations in the local currency or other foreign currencies are translated into U.S. dollars at the exchange rates in effect at the date of the transaction. Net foreign transaction gains/losses for the years ended December 31, 2022, 2021, and 2020 were not material.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial
statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates include sales allowances, estimates relating to the measurement of operating lease right-of-use (“ROU”) assets and operating lease liabilities, determination of the fair value of stock-based awards, valuation of common stock in periods prior to becoming a public company, collectibility of accounts receivable, determination of the fair value of investments, impairment of investments and long-lived assets including goodwill, carrying value and useful lives of property and equipment and internal-use software, the amortization period for deferred commission costs, and income taxes. By their nature, estimates are subject to an inherent degree of uncertainty and actual results could differ from those estimates.
As of the date these consolidated financial statements are issued, the Company is not aware of any specific event or circumstance that would require an update to the Company’s estimates or judgments, or change to the carrying value of the Company’s assets or liabilities. However, these estimates and judgments may change as new events occur and additional information is obtained, which may result in changes being recognized in the consolidated financial statements in future periods. Actual results could differ from those estimates and any such differences may have a material impact on the financial statements.
Segments and Geographic Information
The Company operates as a single operating segment. The Company’s Chief Operating Decision Maker, the CEO, regularly reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources. Revenue is attributed to geographic regions based on locations where services are provided to the Company’s customers. Foreign countries outside of the United States, in aggregate, accounted for less than 2% of the Company’s revenue for the years ended December 31, 2022, 2021, and 2020. In addition, as of December 31, 2022 and 2021, property and equipment and operating lease ROU assets outside of the United States were not material.
Revenue Recognition
The Company recognizes revenue when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following five steps:
(1)Identification of the contract, or contracts, with a customer
(2)Identification of all performance obligations in the contract
(3)Determination of the transaction price
(4)Allocation of the transaction price to the performance obligations in the contract
(5)Recognition of revenue when, or as, the performance obligation or obligations are satisfied
The Company identifies enforceable revenue contracts when the terms are agreed to by the customer. Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines the standalone selling prices based on its overall pricing objectives, taking into consideration market conditions and other factors, including the value of its contracts, the products sold, and the number and types of users within the Company’s contracts.
Revenue is recognized as performance obligations are satisfied and is presented net of the sales allowance.
The Company derives its revenues from the following sources:
Subscription Revenue
Subscription revenue consists of time-based job posting plans, upsells which complement or expand visibility and prominence to job posting plans, and resume database plans. Plans are priced at a flat rate based on plan size and whether the plan is for a daily, monthly, or annual term. Customer contracts are typically subject to renewal at the end of the subscription term. Contracts are only cancelable at the end of the term and are nonrefundable.
Time-based job posting plans: Job posting plans provide customers access to cloud-based software services, where they may create job postings that are posted to the Company’s marketplace in addition to numerous other job sites or partner networks with job seeker communities. Customers may also access the Company’s software to review job applications and manage job postings. The Company recognizes revenue from job posting plans ratably over the term of the agreement beginning on the date the subscription service is made available to the customer. Once a customer requests a cancellation of their subscription, the open job postings are closed at the end of the term; however, the customer may still access the software to review past job postings or prior applications received under a separate upsell subscription. Job posting plans are billed in advance of the subscription period, which typically ranges from one to twelve months, except for daily subscription plans, which are billed in arrears based on how many days the customer uses the services.
Upsell services: Additional features to complement or expand visibility to job posting plans may be purchased as an upsell service. For these services, the Company bills the customers in advance and recognizes revenue ratably over the term of the agreement beginning on the date the upsell services are made available to the customer, which typically ranges from one to twelve months.
Upsell services also include job posting enhancements which are applied to individual job postings. Such services enhance job postings by providing customers with a temporary boost in the prominence of the job postings, expanding visibility to job postings by inviting candidates to apply to the job, or highlighting key attributes of job postings to make them stand out to job seekers. Individual job posting enhancements may be purchased by a customer when needed, or in recurring monthly prepaid bundles to complement their job posting subscription plan, and are billed in advance of use. Typically these prepaid bundles can be used over a period ranging from one to twelve months. Revenue from job posting enhancements is recognized as the customer uses the enhancement on their job postings. Unused prepaid job enhancements are not refundable, and the Company recognizes revenue for the estimated portion of prepaid job enhancements that are expected to expire unused (“breakage”) based on estimates considering historical breakage levels for upsell plans. Breakage is recognized as revenue in proportion to the pattern of actual usage by customers.
Resume database plans: Access to the Company’s resume database is purchased on a subscription basis and allows a customer to search for and view resumes. Resume database plans are priced based on how many resumes the customer would like to view in a month and may be purchased independent of, or in addition to, a job posting plan. Resume database plans are billed in advance of the subscription period, which typically ranges from one to twelve months. Revenue is recognized ratably over the subscription period.
Performance-based Revenue
Performance-based revenue consists of customers who pay on a per click by job applicant or per job application basis for the job postings they wish to distribute through the Company’s software. Customers pay an amount per click or per application that is usually capped at a contractual maximum per recruitment campaign, with campaigns typically lasting from one to three months. Customers on this pricing model do not have access to the Company’s software for subscription customers though they may purchase resume database subscription plans separately. Customers that use performance-based plans are typically companies with consistent hiring needs and sophisticated recruitment campaigns where they manage incoming applications and job postings on their own applicant tracking systems.
Performance-based revenue is typically billed monthly, in arrears, and revenue is recognized as job applicants click on or apply to the distributed job postings, up to the contractual maximum per recruitment campaign.
Sales Allowance
The Company establishes a sales allowance to estimate refunds and credits that it may grant to customers in the future for cancellations of subscriptions and concessions to customers who are not satisfied with services received. While subscriptions are noncancelable once the contract term has commenced, the Company may at times allow customers who miss their cancellation window prior to an autorenewal to cancel their contract, and the Company may issue refunds or credits to maintain overall customer satisfaction. The sales allowance is estimated by considering historical results and trends, and is accounted for as a reduction to revenue or deferred revenue for contracts where payments are received upfront and revenue is recognized over time.
The following table summarizes the changes in the sales allowance (in thousands):
Year Ended December 31,
202220212020
Sales allowance, at beginning of year$5,919 $4,362 $8,781 
Recorded as a reduction to revenue39,877 35,118 15,548 
Recorded as a reduction to deferred revenue4,852 3,730 6,086 
Utilization of allowance for refunds and credits(46,397)(37,291)(26,053)
Sales allowance, at end of year$4,251 $5,919 $4,362 
Of the total sales allowance balance of $4.3 million at December 31, 2022, $1.9 million was presented net of accounts receivable and $2.4 million was presented within accrued expenses on the Consolidated Balance Sheets. Of the total sales allowance balance of $5.9 million at December 31, 2021, $2.9 million was presented net of accounts receivable and $3.0 million was presented within accrued expenses on the Consolidated Balance Sheets. The amount netted against accounts receivable represents estimated future credits expected to be granted to customers who had not yet paid for services as of December 31, 2022 and 2021, and the amount included in accrued expenses represents estimated refunds expected to be granted to customers who had already paid.
Cost of Revenue
Cost of revenue consists of web hosting, credit card processing fees, personnel-related costs (including salaries, bonuses, benefits and stock-based compensation) for customer support employees, partner revenue share amounts, job distribution costs from performance-based revenue, and amortization of capitalized software costs associated with the Company’s marketplace technology to provide services to its customers. In addition, the Company allocates a portion of overhead costs, such as rent, IT costs, supplies and depreciation and amortization, to cost of revenue based on headcount.
Sales and Marketing
Sales and marketing expense consists of personnel-related costs (including salaries, sales commissions, bonuses, benefits, and stock-based compensation) for the Company’s sales and marketing employees and marketing activities. Marketing activities include advertising, online lead generation, customer and industry events and candidate acquisition. The Company allocates a portion of overhead costs, such as rent, IT costs, supplies and depreciation and amortization, to sales and marketing expense based on headcount. Sales and marketing costs are expensed as incurred.
Advertising costs principally represent online advertising costs, direct mailing, television, podcast and radio advertisements. Advertising expense was $280.1 million, $255.6 million, and $98.3 million for the years ended December 31, 2022, 2021, and 2020, respectively.
At times, the Company may prepay certain advertising expenses, which are deferred and subsequently recognized as expense when the advertisement is released. The Company had $2.6 million and $3.2 million of prepaid advertising costs included in prepaid expenses in the Consolidated Balance Sheets as of December 31, 2022 and 2021, respectively.
Research and Development
Research and development expense consists of personnel-related costs (including salaries, bonuses, benefits and stock-based compensation) for the Company’s research and development employees, amortization of capitalized software costs associated with the development of internal databases, candidate insights, and reporting that support the Company’s marketplace technology and the cost of certain third-party service providers. The Company allocates a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to research and development expense based on headcount. Research and development costs, other than software development costs qualifying for capitalization, are expensed as incurred.
General and Administrative
General and administrative expense consists of personnel-related costs (including salaries, bonuses, benefits and stock-based compensation) for employees in the Company’s executive, finance, human resource and administrative departments, and fees for third party professional services, including consulting, legal and accounting services. General and administrative expense also consists of costs as part of the Company’s transition to a publicly traded company and includes fees paid to its financial advisors in connection with its Direct Listing. In addition, the Company allocates a portion of overhead costs, such as rent, IT costs, supplies and depreciation and amortization, to general and administrative expense based on headcount.
Stock-Based Compensation
The Company estimates the fair value of employee stock-based compensation awards on the grant date and recognizes forfeitures as they occur. The Company has elected to treat stock-based compensation awards with graded vesting schedules and time-based service conditions as a single award and recognizes stock-based compensation on a straight-line basis over the requisite service period. For awards that contain both performance and service vesting conditions, the grant date fair value is recognized as stock-based compensation expense using a graded vesting attribution model. No expense is recognized for awards with performance conditions until the performance condition is probable of being met.
The Company estimates the fair value of restricted stock units (“RSUs”) based on the fair value of its common stock. The Company estimates the fair value of stock options using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the Company to make certain assumptions including the fair value of the underlying common stock, the expected term, the expected volatility, the risk-free interest rate and the dividend yield.
Prior to the completion of the Company’s Direct Listing on May 26, 2021, a public market did not exist for the Company’s common stock, and therefore, the board of directors determined the fair value of the common stock at the time of the grant by considering a number of objective and subjective factors including valuation of comparable companies, operating and financial performance and general and industry-specific economic outlook, amongst other factors. The fair value was determined in accordance with applicable elements of the practice aid issued by the American Institute of Certified Public Accountants titled, Valuation of Privately Held Company Equity Securities Issued as Compensation. Subsequent to the completion of the Company’s Direct Listing, the fair value of the common stock is determined based on the NYSE closing price on the date prior to the date of grant.
Given that the Company does not have sufficient exercise history to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior, the Company determines the expected term for its plain vanilla stock options using the simplified method, which is calculated as the midpoint of the stock option vesting term and the expiration date of the stock option.
For its stock options, because the Company’s common stock has limited trading history, the Company estimates the expected volatility of the awards from the historical volatility of selected public companies that represent similar but alternative investment opportunities to an investment in the Company. Characteristics considered in identifying guideline public companies include similarity in size, lines of business, market capitalization, revenue and financial leverage. The Company determines the expected volatility assumption using the frequency of daily historical prices of comparable public company common stock for a period equal to the expected term of the option. The Company periodically assesses the comparable companies and other relevant factors used to measure expected volatility for stock option grants.
The risk-free interest rate assumption is based upon observed interest rates on the United States government securities appropriate for the expected term of the Company’s employee stock options.
The dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The Company has never declared nor paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the foreseeable future.
Stock-based Compensation for Awards with a Market Condition
In April 2021, the Company granted an RSU award (the “CEO Performance Award”), which included service, market, and performance-based vesting conditions. The fair value of the award is determined using a Monte Carlo simulation model. The associated stock-based compensation expense is recorded over the requisite service period, using a graded attribution method. The requisite service period is the longer of the service period derived from the Monte Carlo simulation model and the explicit service period the CEO is required to remain employed to vest in the award. The market condition is satisfied upon achieving certain stock price targets for a period following the completion of the Company’s Direct Listing. The CEO Performance Award also contains an implied performance-based vesting condition as the CEO’s ability to earn the award was contingent upon the completion of the Direct Listing. Accordingly, no expense was recognized prior to the completion of the Company’s Direct Listing on May 26, 2021, as vesting was not considered probable for accounting purposes until the Direct Listing occurred. Provided that Ian Siegel continues to be the CEO of the Company, stock-based compensation expense is recognized over the requisite service period, regardless of whether the stock price targets are achieved. If the stock price targets are met sooner than the derived service period, the Company will accelerate the recognition of stock-based compensation expense to reflect the cumulative expense associated with the vested shares.
Stock-based Compensation Under the Employee Stock Purchase Plan
In August 2021, the Company launched an employee stock purchase plan (the “ESPP”). The ESPP will allow eligible employees the option to purchase shares of the Company's Class A common stock at a 15% discount through payroll deductions of their eligible compensation, subject to certain plan limitations. The ESPP provides for six-month offering periods beginning February and August of each year. On each purchase date, eligible employees purchase the Company’s stock at a price per share equal to 85% of the lesser of the fair market value of the Company’s Class A common stock on (i) the offering date or (ii) the purchase date.
The Company recognizes stock-based compensation expense related to shares issued pursuant to its ESPP on a straight-line basis over the offering period.
Net Share Settlement
In October 2021, the Company’s board of directors approved a “net share settlement” approach for satisfaction of tax withholding obligations in connection with settlement of taxes for RSUs, and exercises of non-qualified stock options, at the Company’s discretion. As a result, the Company currently withholds shares upon vesting of RSUs, and the withheld shares are immediately canceled. The Company has presented “Shares withheld related to net share settlement” in its Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) as a reduction, separate from the total number of shares issued upon vesting and settlement. The Company has not withheld any
shares as part of any option exercises. Upon payment of the withholding taxes to the appropriate taxing jurisdiction, the Company reflects the cash payment as a financing outflow in the Consolidated Statements of Cash Flows.
Income Taxes
The Company accounts for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes. Current tax liabilities and assets are recognized for the estimated taxes payable or refundable, respectively, on the tax returns for the current year. Deferred tax assets and liabilities are determined based on 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 must also make judgments in evaluating whether deferred tax assets will be realized from future taxable income. To the extent that it believes that realizability is not likely, the Company establishes or maintains a valuation allowance. A valuation allowance is established for deferred tax assets which the Company does not believe meet the “more likely than not” threshold for realizability. The Company’s judgments regarding future taxable income may change over time due to market conditions, tax laws, tax planning strategies or other factors. If the Company’s assumptions and estimates change in the future, the valuation allowance may materially increase or decrease, resulting in an increase or decrease in income tax expense and the related impact on the Company’s reported net income or loss.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties accrued with respect to uncertain tax positions, if any, in the provision (benefit) for income taxes in the Consolidated Statements of Operations.
Investments
The Company maintains an investment portfolio of primarily highly rated debt securities and money market mutual funds to manage its excess cash reserves. The Company’s primary objectives in investing its excess cash reserves are to preserve capital, provide sufficient liquidity to satisfy both operational cash flow requirements and potential strategic investment opportunities, and to obtain a reasonable or market rate of return on investments.
The Company’s investments are all highly liquid and available for use in current operations, including those with maturity dates beyond one year, and therefore the Company classifies these securities within current assets in its Consolidated Balance Sheets. The Company considers its highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Investments not considered cash equivalents are classified as marketable securities in the Company’s Consolidated Balance Sheets.
The Company classifies and accounts for its money market mutual funds which have readily determinable fair values as equity securities, and it carries such securities at fair value with unrealized gains and losses reported in other income, net in its Consolidated Statement of Operations.
The Company classifies and accounts for its debt securities as available-for-sale, and it carries such securities at fair value with unrealized gains and losses excluded from earnings and reported net of tax as a separate component of stockholders’ equity in accumulated other comprehensive loss until the security is sold or matures. During the twelve months ended December 31, 2022, in connection with its available-for-sale debt securities, the Company recorded pretax unrealized losses in other comprehensive loss of $0.4 million with no associated tax benefit. The Company held no investments in available-for-sale debt securities during the twelve months ended December 31, 2021 and December 31, 2020.
The Company determines any realized gains and losses on the sale of its available-for-sale debt securities using a specific identification method, and it records such gains and losses through other
income, net in its Consolidated Statement of Operations. During the twelve months ended December 31, 2022, the Company recorded $0.9 million in proceeds related to sales of its available-for-sale debt securities. Because the Company first purchased these investments during the twelve months ended December 31, 2022, it did not reclassify any net amounts out of beginning accumulated other comprehensive loss into other income, net in the Consolidated Statement of Operations.
If an available-for-sale debt security’s fair value declines below its amortized cost basis, the Company evaluates whether it intends to sell the security, or whether it more likely than not will be required to sell the security before the recovery of its amortized cost basis. If either condition is met, the Company records an impairment loss on the security through other income, net in its Consolidated Statement of Operations. If neither condition is met, the Company evaluates whether the decline is the result of credit-related factors, in which case the Company records the credit-related portion of the impairment loss through other income, net in its Consolidated Statement of Operations, and records the non-credit-related portion of the impairment loss, net of tax, through other comprehensive loss in the Consolidated Statement of Comprehensive Income.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, and accounts receivable. The Company maintains its cash accounts with large financial institutions and at times, the cash accounts may exceed Federal Deposit Insurance Corporation limits. The Company has not experienced any losses in such accounts.
The Company invests only in highly rated debt and equity securities. The Company believes the financial institutions that hold its investments are financially sound, and accordingly, are subject to minimal credit risk.
One customer accounted for 12% and 16% of the Company's outstanding accounts receivable as of December 31, 2022 and December 31, 2021, respectively. The Company closely monitors the financial condition of the foregoing customer, which has been in good credit standing. No other customer individually accounted for 10% or more of the Company’s outstanding accounts receivable as of December 31, 2022 and December 31, 2021. As such, the Company does not consider the concentration of its accounts receivable to be a material risk. There were no customers that individually represented 10% or more of revenue for the years ended December 31, 2022, 2021, and 2020.
The Company uses third parties to collect its credit card receivables and believes risk related to its credit card processors is minimal.
Accounts Receivable and Allowance for Doubtful Accounts
The Company receives payments via credit card, electronic payment or check. The Company’s accounts receivable consists of receivables from the Company’s credit card processing merchants and customers. Credit card payment is required unless the plan qualifies for credit terms which the Company may grant in the normal course of business. The Company does not normally require collateral or other security to support credit sales. Accounts receivable from customers do not bear interest, are typically due within 30 days and are recorded at the invoiced amount. The Company reduces accounts receivable by its allowance for doubtful accounts.
The Company regularly monitors collections and payments from customers and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. Prior to the Company’s adoption of Topic 326 during the year ended December 31, 2022, management estimated its allowance for doubtful accounts by considering factors such as historical credit loss experience and current conditions, such as the length of time accounts receivables are past due, customer payment histories, and any specific customer collection issues identified. Subsequent to the Company’s adoption of Topic 326, management has expanded its approach and estimates its allowance for doubtful accounts by considering the above factors, current market conditions which may
affect customer financial condition, and reasonable and supportable forecasts of future credit losses. The Company writes off accounts receivables that have become uncollectible.
The Company’s allowance for doubtful accounts was $1.8 million, $0.5 million, and $2.0 million as of December 31, 2022, 2021 and 2020, respectively, which was recorded net within accounts receivable on the Consolidated Balance Sheets.
Property and Equipment
Property and equipment is initially recorded at cost, and depreciated using the straight-line method over the estimated useful lives of the assets, which is generally three years for computer hardware and software and five years for furniture and equipment. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life. Costs of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation are removed from the Consolidated Balance Sheets and the resulting gain or loss is reflected in loss from operations in the Consolidated Statements of Operations.
Leases
The Company determines at contract inception whether the arrangement is a lease based on its ability to control a physically distinct asset and determines the classification of the lease as either operating or finance. For all leases, the Company combines all components of the lease including related non-lease components as a single component. Operating leases are reflected as operating lease ROU assets and operating lease liabilities in the Consolidated Balance Sheets. The Company has also elected to utilize the short-term lease recognition exemption and, for those leases that qualify, the Company has not recognized operating lease ROU assets or operating lease liabilities. The Company does not have any finance leases.
Operating lease ROU assets represent the Company’s right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate in determining the present value of lease payments. The Company estimates the incremental borrowing rate to reflect the profile of collateralized borrowing over the expected term of the leases based on the information available at the later of the initial date of adoption of ASC 842, Leases, on January 1, 2019, or the lease commencement date.
The operating lease ROU asset also includes any lease payments made prior to lease commencement date and is reduced by lease incentives that the Company estimates it will realize. Lease terms may include options to extend or terminate the lease when the Company is reasonably certain that it will exercise the option. Lease expense is recognized on a straight-line basis over the lease term in the Consolidated Statements of Operations. Certain lease agreements may contain variable costs such as utilities and common area maintenance. Variable lease costs are expensed when the cost is incurred.
The Company computes rental income from subleasing certain of its office facilities on a straight-line basis over the sublease term in the Consolidated Statements of Operations. The difference between rental income and rental payments over the lease term is recorded as an unbilled rent receivable.
Internal-Use Software
The Company capitalizes eligible costs associated with the development of its internal-use software in accordance with ASC 350-40, Internal-Use Software. Accordingly, the Company capitalizes costs incurred during the development phase including: (1) external direct costs of materials and services consumed in developing or obtaining the software, and (2) payroll and payroll-related costs for employees who are directly associated with the project. The Company expenses all costs as incurred that relate to the planning and post implementation phases of its software development cycle and costs associated with minor enhancements and maintenance. Capitalized costs are amortized using the straight-line
method over three years. Amortization of internal-use software costs associated with the Company’s marketplace technology to provide services to its customers is recorded in cost of revenue. Amortization of internal-use software costs associated with internal databases, candidate insights, and reporting are recorded in research and development and general and administrative expenses in the Consolidated Statements of Operations. Amortization of these costs is allocated in the Consolidated Statements of Operations based on the nature of the underlying projects.
Intangible Assets
Intangible assets are amortized over their estimated useful life using the straight-line method which approximates the pattern in which the economic benefits are consumed.
Impairment of Long-Lived Assets
The Company periodically evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets may warrant revision or that the remaining balance of long-lived assets may not be recoverable in accordance with ASC 360, Property, Plant and Equipment, Accounting for the Impairment or Disposal of Long-Lived Assets. In determining whether an asset is impaired, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. When factors indicate that long-lived assets should be evaluated for possible impairment, the Company uses an estimate of the related undiscounted future cash flows over the remaining life of the long-lived assets in measuring whether they are recoverable. If the estimated undiscounted future cash flows are less than the carrying value of the asset, a loss is recorded as the excess of the asset’s carrying value over its fair value. There were no impairment charges related to long-lived assets during the years ended December 31, 2022, 2021, and 2020.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of net assets acquired and liabilities assumed in a business combination. The Company tests for impairment at least annually, in the fourth quarter, or whenever events or changes in circumstances indicate that goodwill might be impaired. The Company currently has one reporting unit.
In testing for goodwill impairment, the Company has an option to first make an assessment of qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, it is determined that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if concluded otherwise, the quantitative impairment test is performed.
The quantitative test compares the estimated fair value of a reporting unit to its carrying amount, including goodwill. If the estimated fair value exceeds its carrying amount, goodwill is considered not to be impaired. However, if the carrying amount exceeds the fair value of the reporting unit, then an impairment charge is recorded in an amount equal to the excess but limited to the total amount of goodwill. There were no impairment charges in the periods presented.
Senior Unsecured Notes
On January 12, 2022, the Company issued an aggregate principal amount of $550.0 million senior unsecured notes due 2030 in a private placement. The Company includes its senior unsecured notes, net of debt issuance costs, within long-term borrowings in its Consolidated Balance Sheets. The Company accounts for the debt issuance costs incurred related to the senior unsecured notes using the effective interest method, under which the debt issuance costs are amortized as interest expense until the applicable maturity date. As of December 31, 2022, the Company had a carrying amount of approximately $8.4 million of debt issuance costs related to the senior unsecured notes. For the year ended December 31, 2022, the Company recognized $27.6 million in interest expense related to the senior unsecured notes with an effective interest rate of 5.4%. Such interest expense includes $0.9 million
related to the amortization of debt issuance costs, for the year ended December 31, 2022. For more information on the senior unsecured notes, please see Note 8.
Share Repurchase Program
All shares repurchased under the Company’s share repurchase program are purchased for immediate retirement. Repurchased shares reduce the Company’s outstanding shares and its weighted average number of common shares outstanding for purposes of calculating basic and diluted earnings per share. All excess of repurchase price over par value for shares repurchased is allocated to additional paid-in capital in the Company’s Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit). The Company may repurchase shares of common stock through open market or privately negotiated transactions, block purchases, or pursuant to one or more Rule 10b5-1 plans. For more information on the Company’s share repurchase program, please see Note 13.
Recent Accounting Pronouncements
Becoming a Large Accelerated Filer
Prior to December 31, 2022, the Company qualified as an emerging growth company (“EGC”) and was allowed by the Jumpstart Our Business Startups Act to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company elected to use the adoption dates applicable to private companies. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies.
The Company became a large accelerated filer and no longer qualifies as an EGC at the conclusion of the fiscal year ended December 31, 2022. The adoption dates discussed below for recently adopted accounting pronouncements reflect the updated transition periods required as a result of becoming a large accelerated filer as of December 31, 2022. For all future new or revised accounting pronouncements, the Company will be required to adopt in accordance with public company timelines.
Accounting Pronouncements Not Yet Adopted
The Company reviewed all recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a material impact on the Company’s consolidated financial statements.
Recently Adopted Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and which removes certain conditions that should be considered in the derivative scope exception evaluation under Subtopic 815-40. The Company early adopted ASU 2020-06 on January 1, 2022 and applied the changes using a modified retrospective approach. The adoption did not have a material impact on the Company’s consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing model for measuring the allowance for credit losses for financial assets measured at amortized cost (including accounts receivable) to a model that is based on the expected losses rather than incurred losses. Under the new credit loss model, lifetime expected credit losses on such financial assets are measured and recognized at each reporting date based on historical, current, and forecasted information. Subsequent to ASU 2016-13, the FASB issued various ASUs to provide supplemental guidance and clarification to ASU 2016-13 which must be adopted concurrently with the adoption of ASU 2016-13. These ASUs are cumulatively referred to as “Topic 326.” The Company adopted Topic 326 for the fiscal year ended December 31, 2022 and applied the changes using a modified retrospective approach. The adoption did not have a material impact on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which enhances and simplifies various aspects of income tax accounting guidance. The Company adopted ASU 2019-12 for the fiscal year ended December 31, 2022 and applied the changes using a modified retrospective approach. The adoption did not have a material impact on the Company’s consolidated financial statements.
v3.22.4
Net Income Per Share
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
Net Income Per Share Net Income Per Share
Basic and diluted net income per share are computed using the two-class method as required when there are participating securities and multiple classes of common stock. Basic net income per share is computed using the weighted-average number of shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period.
Prior to May 14, 2021, when the Company’s Series A preferred stock and Series B preferred stock converted into shares of Class B common stock, the Company’s redeemable convertible preferred stock were participating securities as the holders of the redeemable convertible preferred stock were entitled to participate in dividends with common stock. In periods of net income, net income after deducting the accretion of redeemable convertible preferred stock was attributed to common stockholders and participating securities based on their participation rights. Net losses after deducting the accretion of redeemable convertible preferred stock are not allocated to the participating securities as the participating securities do not have a contractual obligation to share in any losses.
In April 2021, the Company filed its amended and restated certificate of incorporation, which resulted in the creation of Class A common stock and Class B common stock. As the liquidation and dividend rights are identical for Class A and Class B common stock (see Note 12), the undistributed earnings under the two-class method are allocated on a proportional basis and the resulting net income per share attributable to common stockholders is, therefore, the same for both Class A and Class B common stock on an individual or combined basis.
The following table presents the Company’s basic net income per share (in thousands, except per share amounts):
Year Ended December 31,
202220212020
Net income per share, basic:
Net income$61,494 $3,600 $86,048 
Less: Accretion of redeemable convertible preferred stock— (1,480)(3,883)
Less: Undistributed earnings attributable to participating securities— (168)(19,148)
Net income attributable to Class A and Class B common stockholders$61,494 $1,952 $63,017 
Weighted average shares of Class A and Class B common stock outstanding114,272 102,230 79,651 
Net income per share attributable to Class A and Class B common stockholders, basic$0.54 $0.02 $0.79 
The Company computes diluted net income per share under the two-class method where income is reallocated between common stock, potential common stock and participating securities. Potential common stock primarily includes stock options and RSUs computed using the treasury stock method and the conversion of the convertible notes and accrued interest using the if converted method.
The following table presents the Company’s diluted net income per share (in thousands, except per share amounts):
Year Ended December 31,
202220212020
Net income per share, diluted:
Numerator:
Net income attributable to Class A and Class B common stockholders$61,494 $1,952 $63,017 
Add:
Reallocation of net income attributable to participating securities— 18 2,346 
Interest on convertible notes with related parties, net of tax— — 275 
Net income attributable to Class A and Class B common stockholders, diluted$61,494 $1,970 $65,638 
Denominator:
Weighted average shares of Class A and Class B common stock outstanding, basic114,272 102,230 79,651 
Effect of dilutive securities:
Options to purchase common stock6,943 12,471 12,506 
Convertible notes with related parties— — 1,999 
Restricted stock units183 725 — 
Employee stock purchase plan— 12 — 
Unvested early exercise common stock— 33 — 
Weighted average shares of Class A and Class B common stock outstanding, diluted121,398 115,471 94,156 
Net income per share attributable to Class A and Class B common stockholders, diluted$0.51 $0.02 $0.70 
The following table presents the weighted average number of potentially dilutive common stock equivalents excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive (in thousands):
Year Ended December 31,
202220212020
Options to purchase common stock71 3 3,747 
Unvested restricted stock units5,681 153 4,148 
Convertible notes with related parties, if converted basis— 1,226 — 
Employee stock purchase plan240 45 — 
Total shares excluded from diluted net income per share5,992 1,427 7,895 
The CEO Performance Award is excluded from the above table because none of the market conditions had been met as of December 31, 2022.
v3.22.4
Revenue Information
 12 Months Ended
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]  
Revenue Information Revenue Information
Contract Balances
Contract liabilities are recorded as deferred revenue when customer payments are received in advance of the Company meeting all the revenue recognition criteria under ASC 606. Deferred revenue includes prepaid subscription and performance-based revenue. Generally, the remaining performance obligations will be satisfied within one to twelve months after prepayment. The Company recognized $23.3 million, $15.1 million, and $18.5 million of revenue during the years ended December 31, 2022, 2021, and 2020, respectively, that were included in the deferred revenue balance as of December 31, 2021, 2020, and 2019, respectively.
As of December 31, 2022 and 2021, the Company had no contract assets.
Deferred Commissions
ASC 606 requires the deferral of the recognition of incremental costs to obtain a contract, which the Company has identified as certain of its sales commissions paid to internal sales representatives for the sale of the Company’s services. The Company amortizes deferred commissions over the expected period of benefit unless the amortization period is less than one year, in which case, the Company has elected to apply the practical expedient to expense those costs as incurred. The estimated period of benefit includes anticipated customer renewals. If the Company pays commissions on contract renewals that are commensurate with the initial commission, the amortization period is the initial contract term. If the renewal commission is not commensurate with the initial commission, commissions are deferred and subsequently amortized on a straight-line basis over the expected customer life, which has been estimated to be three years based on an analysis of historical data and other qualitative factors, such as new product offerings, the seasonality of certain customer relationships and estimated useful life of the Company’s marketplace technology. Amortization expense is included within sales and marketing expense in the Consolidated Statements of Operations.
For the years ended December 31, 2022, 2021, and 2020, amortization expense for deferred sales commissions was $5.4 million, $4.3 million, and $3.1 million, respectively. There was no impairment to capitalized deferred commissions in the periods presented.
Disaggregation of Revenue
The Company disaggregates revenue into two streams: subscription revenue and performance-based revenue. The following table presents the Company’s revenue streams (in thousands):
Year Ended December 31,
202220212020
Subscription$696,334 $600,090 $346,781 
Performance-based208,315 141,051 71,361 
Total revenue$904,649 $741,141 $418,142 
Performance Obligations
No revenue was recognized during the years ended December 31, 2022, 2021 and 2020 from performance obligations satisfied in previous periods.
As of December 31, 2022, the Company did not have any material remaining performance obligations expected to be recognized in the future. Generally, any remaining performance obligations relate primarily to subscription services such as time-based job posting plans, upsell services, and resume database plans that will be invoiced in future periods, and exclude (i) contracts with an original expected term of one year or less and (ii) contracts for which the Company only recognizes revenue at the amount to which it has the right to invoice for services performed.
v3.22.4
Property and Equipment, net
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Property and Equipment, net Property and Equipment, net
Property and equipment consist of the following (in thousands):
December 31,
20222021
Computer, equipment and software$8,626 $7,141 
Furniture and fixtures1,081 1,818 
Leasehold improvements8,709 8,605 
Construction in progress— 3 
18,416 17,567 
Less: Accumulated depreciation(10,313)(8,865)
Total property and equipment, net$8,103 $8,702 
Depreciation expense for the years ended December 31, 2022, 2021, and 2020 was $2.8 million, $2.3 million, and $2.2 million, respectively.
v3.22.4
Internal-Use Software, net
 12 Months Ended
Dec. 31, 2022
Research and Development [Abstract]  
Internal-Use Software, net Internal-Use Software, net
Internal-use software consists of the following (in thousands):
December 31,
20222021
Internal-use software$39,628 $31,902 
Less: Accumulated amortization(23,870)(18,245)
Total internal-use software, net$15,758 $13,657 
Amortization expense for internal-use software for the years ended December 31, 2022, 2021, and 2020 was $7.9 million, $7.2 million, and $7.4 million, respectively.
Future amortization expense of the Company’s internal-use software as of December 31, 2022 is as follows for the years ending December 31, (in thousands):
2023$6,703 
20245,625 
20252,797 
2026633 
Total future amortization expense$15,758 
v3.22.4
Accrued Expenses
 12 Months Ended
Dec. 31, 2022
Payables and Accruals [Abstract]  
Accrued Expenses Accrued Expenses
Accrued expenses consist of the following (in thousands):
December 31,
20222021
Accrued compensation and benefits$31,791 $26,621 
Accrued marketing10,937 22,493 
Accrued partner expenses7,465 8,457 
Accrued commissions5,716 5,790 
Accrued non-income taxes3,605 11,250 
Accrued refunds and customer liabilities2,863 3,646 
Other accrued expenses6,738 7,956 
Total accrued expenses$69,115 $86,213 
s
v3.22.4
Debt
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt Debt
Convertible Notes with Related Parties
On June 22, 2020, the Company issued subordinated secured convertible promissory notes ("Convertible Notes") to related parties who were then holders of the Company’s Redeemable Convertible Preferred Stock. The Convertible Notes totaled $25.0 million and had a maturity date of June 22, 2023.
The principal and accrued interest balance of the Convertible Notes was automatically convertible into common stock upon a Direct Listing with a conversion price equal to the lower of (i) 75% of the volume-weighted average price of the common stock on the first trading day following such listing and (ii) $8.2909.
On May 26, 2021, the principal and accrued contractual interest balance of the Convertible Notes was $25.6 million, which converted into 3.1 million shares of Class B common stock at a conversion price of $8.2909 per share.
Prior Credit Facility
On September 2, 2020 the Company executed an amendment to the Amended and Restated Loan and Security Agreement (the “Second Amended and Restated Loan and Security Agreement”), which increased the amount available under the credit facility outstanding at the time (the “prior credit facility”) from $25.0 million to $35.0 million, changed the maturity date of the prior credit facility to September 2, 2022 and modified the interest rate on the prior credit facility to be the floating per annum rate equal to the greater of (i) 0.25% above the bank’s Prime Rate, and (ii) 4.5%. The prior credit facility was terminated in April 2021 and replaced with a new credit facility as described further below. Total interest
expense incurred under the prior credit facility was immaterial for the years ended December 31, 2021, and 2020 and was mostly attributable to fees on the unused portion of the credit facility.
Credit Facility
In April 2021, the Company terminated its Second Amended and Restated Loan and Security Agreement dated September 2, 2020 and entered into a new $250.0 million credit facility agreement with a syndicate of banks. The credit facility has a maturity date of April 30, 2026 and bears interest at a rate based upon the Company’s Net Leverage Ratio. The Company’s Net Leverage Ratio is defined as total debt less total cash and permitted investments outstanding at period end, with a maximum total cash and permitted investments adjustment of $550.0 million, divided by the trailing 12 months of earnings, adjusted for items such as non-cash expenses and other nonrecurring transactions. The Company is also obligated to pay other customary fees including a commitment fee on a quarterly basis based on amounts committed but unused under the credit facility at a rate between 0.25% to 0.35%, depending on the Company’s Net Leverage Ratio.
The credit facility is collateralized by security interests in substantially all of the Company’s assets and includes customary events of default such as non-payment of principal, non-payment of interest or fees, inaccuracy of representations and warranties, violation of certain covenants, cross default to certain other indebtedness, bankruptcy and insolvency events, material judgments against the Company, and a change of control. The occurrence of an event of default could result in the acceleration of the obligations under the credit facility.
The credit facility agreement contains customary representations, warranties, affirmative covenants, such as financial statement reporting requirements, negative covenants, and financial covenants, such as maintenance of certain net leverage ratio requirements. The negative covenants include restrictions that, among other things, restrict the Company’s ability to incur liens and indebtedness, make certain investments, declare dividends, dispose of, transfer or sell assets, make stock repurchases and consummate certain other matters, all subject to certain exceptions.
On November 19, 2021, the Company entered into an amendment to the credit agreement with a syndicate of banks and the lenders named therein (the “Credit Agreement”), to amend certain other provisions under the Credit Agreement relating to how letters of credit denominated in currencies other than U.S. Dollars are valued under the Credit Agreement. 
On January 10, 2022, the Company entered into a Second Amendment to the Credit Agreement (the “Second Amendment”) with a syndicate of banks and the lenders named therein. The Second Amendment increased the maximum amount of liquidity (including cash and permitted investments) that may be netted against the Company’s total indebtedness from $100.0 million to $550.0 million for purposes of calculating the Company’s total Net Leverage Ratio under the Credit Agreement.
On April 26, 2022, the Company entered into a Third Amendment to the Credit Agreement with the administrative agent to clarify the amounts to be held with the administrative agent.
The Company had no amounts outstanding under the Credit Agreement and was in compliance with the financial covenants as of December 31, 2022. The amount available under the credit facility as of December 31, 2022 was $244.6 million, which is the credit limit less letters of credit outstanding of $5.4 million.
Issuance of Senior Unsecured Notes
On January 12, 2022, the Company issued an aggregate principal amount of $550.0 million senior unsecured notes due 2030 (the “Notes”) in a private placement. The Notes and the guarantees are senior unsecured obligations of ZipRecruiter, Inc.
The Notes were issued pursuant to an indenture dated as of January 12, 2022 (the “Indenture”) between the Company and the trustee. Pursuant to the Indenture, the Notes will mature on January 15,
2030 and bear interest at a rate of 5% per year. Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year. Unpaid amounts are included within accrued interest in the Company’s Consolidated Balance Sheets.
The Indenture contains certain customary negative covenants, including but not limited to, limitations on the incurrence of debt, liens, consolidations or mergers, and asset sales. The Indenture also contains customary events of default.
At its sole discretion, the Company has the option to redeem all or a part of the Notes as follows:
(i) At any time prior to January 15, 2025, the Company may redeem all or part of the Notes, at its option, at a redemption price equal to 100% of the principal amount plus a make-whole premium as defined in the Indenture, and any accrued and unpaid interest, if any;
(ii) Prior to January 15, 2025, the Company has the option to redeem up to 40% of the aggregate principal amount of the Notes from net cash proceeds from certain equity offerings at a redemption price equal to 105% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest; and
(iii) At any time on or after January 15, 2025, the Company may redeem all or any portion of the Notes, at the redemption prices equal to the percentage of principal amount set forth below, plus accrued and unpaid interest, if any, if redeemed during the 12-month period beginning on January 15 of the year indicated below:
YearPercentage
2025102.50 %
2026101.25 %
2027 and thereafter100.00 %
Upon the occurrence of a change of control triggering event (as defined in the Indenture), the Company must offer to repurchase the Notes at a repurchase price equal to 101% of the aggregate principal amount of the Notes to be repurchased, and any accrued and unpaid interest.
The Company includes its Notes, net of debt issuance costs, within long-term borrowings in its Consolidated Balance Sheets.
The Company accounts for the debt issuance costs incurred related to the Notes using the effective interest method, under which the debt issuance costs are amortized as interest expense until the applicable maturity date. As of December 31, 2022, the Company had a carrying amount of approximately $8.4 million of debt issuance costs related to the Notes.
For the year ended December 31, 2022, the Company recognized $27.6 million in interest expense related to the Notes with an effective interest rate of 5.4%. Such interest expense includes $0.9 million related to the amortization of debt issuance costs.
v3.22.4
Commitment and Contingencies
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Purchase Commitments
As of December 31, 2022, the Company had various noncancelable purchase commitments relating to software service agreements. Future minimum commitments are $7.7 million for 2023, $10.5 million for 2024, $8.3 million for 2025, and no further commitments for 2026 and beyond.
Legal Matters
The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. If the Company determines that it is probable that a loss has been incurred and the amount is reasonably estimable, the Company will record a liability. However, if the Company determines that a
contingent loss is reasonably possible and the loss or range of loss can be estimated, the Company will disclose the possible loss in the consolidated financial statements. Legal costs relating to loss contingencies are expensed as incurred.
In April 2019, the Company was named as a defendant in a putative class action lawsuit filed by a former employee in the Los Angeles Superior Court alleging that the Company violated the Fair Credit Reporting Act as well as owed certain compensation to employees. In January 2020, the former employee filed a related representative action in the Los Angeles Superior Court under the Private Attorney General Act alleging similar claims regarding compensation owed to employees. In January 2021, the Company filed a motion for summary judgment or, in the alternative, summary adjudication, which was granted in part and denied in part. As of September 30, 2021, the parties agreed to settle the lawsuit for an immaterial amount and accordingly, the Company recorded a liability within accrued expenses. The settlement must be approved by the Court before it can be finalized. As of December 31, 2022, the Company anticipates that the settlement agreement will be approved in 2023.
Indemnification
In the ordinary course of business, the Company may provide indemnification of varying scopes and terms to customers, investors, directors and officers with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from certain claims made by third parties. These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. The Company has never paid a material claim, nor has the Company been sued in connection with these indemnification arrangements. As of December 31, 2022, the Company has not accrued a liability for these indemnification arrangements because the likelihood of incurring a payment obligation, if any, in connection with these indemnification arrangements is neither probable nor reasonably estimable.
Non-income Taxes
The Company collects and remits sales and use, value added, and other taxes (“non-income taxes”) relating to the sale of the Company’s services in various jurisdictions. The Company accrues non-income taxes that may result from examinations by, or any anticipated negotiated agreements with, these tax authorities when a loss is probable and reasonably estimable. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, then the reasonably possible loss is disclosed. Due to the inherent complexity and uncertainty of these matters and judicial process in certain jurisdictions, the final outcome may be materially different from the Company’s expectations. During the years ended December 31, 2022, and 2021, the Company recognized a benefit of $0.8 million and an expense of $8.7 million, respectively, in non-income tax expense recorded in general and administrative expense.
Restructuring
On March 31, 2020, the Company announced and committed to a restructuring plan to contain costs and further strengthen its liquidity profile in response to the impact of the COVID-19 pandemic. This plan resulted in a reduction in the Company’s workforce of approximately 40%. The Company recorded restructuring costs of $5.7 million in the first quarter of 2020 primarily related to employee severance and continuation of health benefits. Included in the $5.7 million restructuring costs is a non-cash charge of $0.8 million pertaining mainly to the modification of stock option awards for terminated employees. These awards were modified to extend the post-termination exercise period of vested options. Restructuring costs are presented as $3.7 million in sales and marketing, $1.0 million in research and development, and $1.0 million in general and administrative expenses within the Consolidated Statement of Operations. The Company reversed the remaining amounts of $0.2 million associated with the restructuring costs liability
that were outstanding as of December 31, 2020 during 2021 when it was determined the remaining costs would not need to be paid, and no new costs were recorded during 2022 and 2021.
The following table presents the roll forward of the restructuring costs liability for the years ended December 31, 2022, 2021 and 2020 (in thousands), which is included in accrued expenses in the Company’s Consolidated Balance Sheets:
Year Ended December 31,
202220212020
Accrual, at beginning of year$— $233 $— 
Expense— — 4,947 
Cash payments— — (4,281)
Non-cash adjustments— (233)(433)
Accrual, at end of year$— $— $233 
v3.22.4
Financial Instruments
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Financial Instruments Financial Instruments
Fair Value Measurements
The Company measures certain of its financial instruments at fair value on a recurring basis. Financial instruments measured at fair value on a recurring basis primarily include the Company’s cash equivalents and marketable securities.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounting standards describe a fair value hierarchy based on the following three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:
- Level 1 — Quoted prices in active markets for identical assets, liabilities, or funds.
- Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
- Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following table presents the Company’s financial assets measured at fair value on a recurring basis, as well as the amortized cost basis and gross unrealized gains and losses of those assets as of December 31, 2022 (in thousands):
Balance Sheet Classification
Amortized Cost BasisGross Unrealized GainsGross Unrealized LossesFair ValueCash and Cash EquivalentsMarketable Securities
Level 1:
Cash$166,341 $— $— $166,341 $166,341 $— 
Money market mutual funds49,545 — — 49,545 49,545 — 
U.S. treasury securities204,580 9 (180)204,409 2,995 201,414 
Subtotal420,466 9 (180)420,295 218,881 201,414 
Level 2:
Commercial paper41,348 — — 41,348 — 41,348 
Certificates of deposit6,116 — — 6,116 — 6,116 
Corporate notes and obligations63,912 10 (202)63,720 1,519 62,201 
Asset-backed securities15,150 17 (29)15,138 — 15,138 
U.S. agency securities23,736 5 (3)23,738 6,980 16,758 
Subtotal150,262 32 (234)150,060 8,499 141,561 
Total cash, cash equivalents, and marketable securities$570,728 $41 $(414)$570,355 $227,380 $342,975 
The Company did not have any financial assets measured at fair value on a recurring basis as of December 31, 2021.
The fair values of the Company’s Level 2 commercial paper and certificates of deposit are determined using quoted prices in markets that are not active or using model-driven valuations employing significant inputs derived from observable market data. The fair values of the Company’s Level 2 corporate notes and obligations, asset-backed securities, and U.S. agency securities are determined using an evaluated price based on a compilation of reported market information, such as benchmark yield curves, credit spreads and estimated default rates.
The carrying amounts of the Company’s remaining financial instruments not discussed in the above table, including accounts receivable, accounts payable, and accrued expenses, approximate fair value because of their short-term maturities, except for the Company’s senior unsecured notes which are valued based on quoted prices for the Notes in an inactive market. The value of the Notes represents a Level 2 input in the fair value hierarchy. The aggregate fair value of the Notes as of December 31, 2022 was estimated to be approximately $451.0 million.
Certain assets, including operating leases and goodwill, are also subject to measurement at fair value on a non-recurring basis using Level 2 or Level 3 inputs, respectively, but only when they are deemed to be impaired. As of December 31, 2022 and December 31, 2021, no material impairments were identified on those assets required to be measured at fair value on a non-recurring basis.
Equity Securities
The Company’s investments in equity securities consist primarily of money market mutual funds. During the year ended December 31, 2022, the Company recorded no material unrealized gains and losses in connection with its money market mutual funds held as of December 31, 2022. The Company had no investments in money market mutual funds during the years ended December 31, 2021 and 2020.
Available-for-sale Debt Securities
The following table summarizes the fair value of the Company’s available-for-sale debt securities by contractual maturity as of December 31, 2022 (in thousands):
Due within 1 year$321,119 
Due after 1 year through 5 years33,350 
Total available-for-sale debt securities$354,469 
Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations.
The following table summarizes the available-for-sale debt securities which have been in a continuous unrealized loss position for less than 12 months as of December 31, 2022 (in thousands):
Fair ValueGross Unrealized Losses
Asset-backed securities$6,598 $(29)
Corporate notes and obligations55,136 (202)
U.S. treasury securities149,128 (180)
U.S. agency securities7,517 (3)
Total available-for-sale debt securities$218,379 $(414)
The Company had no available-for-sale debt securities in a continuous unrealized loss position for more than 12 months as of December 31, 2022.
The Company did not recognize any credit losses for its available-for-sale debt securities during the year ended December 31, 2022. The Company held no investments in available-for-sale debt securities during the years ended December 31, 2021 and 2020.
During the year ended December 31, 2022, the Company recorded $0.9 million in proceeds related to sales of its available-for-sale debt securities. The Company recorded no material gross realized gains and gross realized losses in its Consolidated Statement of Operations as a result of those sales.
v3.22.4
Leases
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases Leases
The Company has various noncancelable operating leases for its offices. These existing leases have remaining lease terms ranging from 1 to 8 years. Certain lease agreements contain renewal options, termination rights, rent abatement and/or escalation clauses with renewal terms that can extend the lease term from 1 to 10 years.
The Company signed an operating lease on March 2, 2020 with a term of 128 months commencing on August 29, 2020. The execution of the lease resulted in an operating lease ROU asset obtained in exchange for new operating lease liabilities of $5.8 million. The Company had the option to terminate a portion of the leased building (“Partial Premises”) on the last day of the 12th month of the lease term for a fee. The Company was reasonably certain it would exercise the Partial Premises termination option at lease commencement and subsequently exercised this termination option.
The Company cannot determine with reasonable certainty that any other options will be exercised and therefore only the Partial Premises termination option is considered when recording the Company’s operating lease ROU assets, operating lease liabilities or lease expense.
The components of lease cost related to the Company’s operating leases are as follows (in thousands):
Year Ended
December 31,
202220212020
Operating lease cost$5,502 $6,816 $7,572 
Short-term lease cost391 7 237 
Variable lease cost1,497 1,203 1,399 
Sublease income(597)(151)(1,051)
Net lease cost$6,793 $7,875 $8,157 
The Company made cash payments for amounts included in the measurement of operating lease liabilities of $7.6 million, $4.3 million, and $7.3 million, net of tenant improvement allowances received of $0.1 million, $3.9 million, and $0.5 million for the years ended December 31, 2022, 2021, and 2020, respectively.
Supplemental information related to the Company’s operating leases is as follows:
December 31,
202220212020
Weighted-average remaining lease term5.2 years5.4 years5.5 years
Weighted-average incremental borrowing rate5.0 %5.1 %5.2 %
Future undiscounted lease payments for the Company’s operating lease liabilities and a reconciliation of these payments to its operating lease liabilities as of December 31, 2022 are as follows (in thousands):
2023$6,207 
20244,988 
20252,742 
20261,228 
20271,260 
Thereafter4,433 
Total lease payments20,858 
Less: imputed interest(2,411)
Present value of operating lease liabilities$18,447 
v3.22.4
Common Stock and Redeemable Convertible Preferred Stock
 12 Months Ended
Dec. 31, 2022
Equity and Temporary Equity [Abstract]  
Common Stock and Redeemable Convertible Preferred Stock Common Stock and Redeemable Convertible Preferred Stock
Common Stock
The Company is authorized to issue a total of 1.45 billion shares consisting of 700 million shares of Class A common stock, 700 million shares of Class B common stock, and 50 million shares of preferred stock all with a par value per share of $0.00001.
The Class A common stock is entitled to one vote per share and the Class B common stock is entitled to twenty votes per share. The Class A and Class B common stock have the same dividend and liquidation rights. The Class B common stock converts to Class A common stock at any time at the option of the holder. Additionally, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, except for certain transfers described in the amended and restated certificate of incorporation.
Redeemable Convertible Preferred Stock
In April 2021, the Company amended and restated its certificate of incorporation such that the redeemable convertible preferred stock would automatically convert into shares of common stock upon the effectiveness of the Direct Listing.
On May 14, 2021, the holders of the Series A preferred stock and Series B preferred stock converted all outstanding shares of preferred stock into 24.2 million shares of Class B common stock.
v3.22.4
Share Repurchase Program
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Share Repurchase Program Share Repurchase Program
In February 2022, the Company’s board of directors authorized the Company to repurchase up to $100.0 million of outstanding shares of its common stock pursuant to a new share repurchase program (the “Program”). Additionally, the Company’s board of directors authorized increases to the Program of $150.0 million and $200.0 million, in June 2022 and November 2022, respectively, which resulted in a total of $450.0 million of outstanding shares of its common stock authorized to be repurchased under the Program.
The Company may repurchase shares of common stock through open market or privately negotiated transactions, block purchases, or pursuant to one or more Rule 10b5-1 plans. The Program has no expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason by the board of directors.
The Program does not obligate the Company to repurchase shares of common stock. There is no minimum or maximum number of shares to be repurchased under the Program. The timing and actual number of shares repurchased will depend on a variety of factors including price, market conditions, corporate and regulatory requirements, and other investment opportunities.
During the year ended December 31, 2022, and prior to entering into a new accelerated share repurchase agreement in December 2022 (the “December ASR”, as discussed below), the Company completed repurchases of 16.0 million shares of its Class A common stock for $289.3 million under the share repurchase program, including 5.1 million shares of its Class A common stock delivered under two accelerated share repurchase agreements which were completed in the year, totaling $100.0 million, 7.9 million shares of its Class A common stock delivered under a Rule 10b5-1 plan totaling $137.7 million, and 3.0 million shares of its Class A common stock totaling $51.6 million through open market purchases.
In December 2022, the Company entered into the December ASR with a major financial institution, to repurchase an aggregate of $50.0 million in shares of the Company’s Class A common stock. The Company made a payment of $50.0 million and received an initial delivery of 2.6 million shares, which represented $42.5 million (or 85%) of the December ASR. The payment of $50.0 million was recognized in additional paid-in capital in the Company’s Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) in December 2022. The final number of shares to be repurchased will be based on the volume-weighted average price of the Company’s Class A common stock during the term of the December ASR, net of fees. The final settlement of the December ASR will occur during the first quarter of 2023.
Approximately $110.7 million remains available for future repurchases of the Company’s common stock under the Company’s share repurchase program as of December 31, 2022.
v3.22.4
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Total stock-based compensation expense is recorded in the Consolidated Statements of Operations as follows (in thousands):
Year Ended December 31,
202220212020
Cost of revenue$807 $1,093 $73 
Sales and marketing10,858 17,865 704 
Research and development30,985 34,230 3,050 
General and administrative34,306 54,070 1,925 
Total stock-based compensation$76,956 $107,258 $5,752 
2012 and 2014 Equity Incentive Plans
Prior to adoption of the 2021 Equity Incentive Plan (the “2021 Plan”), the Company granted awards under the 2012 Equity Incentive Plan (the “2012 Plan”) or 2014 Equity Incentive Plan (the “2014 Plan”, and together with the “2012 Plan”, the “Prior Plans”). All awards currently are granted from the 2021 Plan. However, the Prior Plans continue to govern the terms and conditions of the outstanding awards previously granted under the 2012 Plan and 2014 Plan.
The Prior Plans permitted the grant of incentive stock options to employees and the grant of non-qualified stock options, restricted stock, restricted stock awards, RSUs, stock appreciation rights, performance units and performance shares to the Company’s employees, directors and consultants at the sole discretion of the board of directors. The Prior Plans also allowed for the administrator of the plan to include terms in an award agreement that the option holder may exercise in whole or part of the option prior to the full vesting of those options.
Under the amended and restated certificate of incorporation, all outstanding options to purchase common stock became options to purchase an equivalent number of shares of Class B common stock and all RSUs became RSUs for an equivalent number of shares of Class B common stock under the Prior Plans.
2021 Equity Incentive Plan
In April 2021, the Company adopted the 2021 Plan, which became effective on May 14, 2021 in connection with the Direct Listing. The 2021 Plan permits the grant of incentive stock options to employees and the grant of non-qualified stock options, restricted stock, restricted stock awards, RSUs, stock appreciation rights, performance units, performance shares and stock bonus awards to the Company’s employees, directors, and consultants. Under the 2021 Plan, 10.7 million shares of Class A common stock were initially reserved for issuance. The number of shares initially reserved for issuance pursuant to awards under the 2021 Plan will be increased by (i) (a) any reserved shares not issued or subject to outstanding awards granted under the Prior Plans that cease to be subject to such awards by forfeiture or otherwise after the effective date, (b) shares issued under the Prior Plans before or after the effective date pursuant to the exercise of stock options that are, after the effective date, forfeited, (c) shares issued under the Prior Plans that are repurchased by the Company at the original purchase price or are otherwise forfeited, and (d) shares that are subject to stock options or other awards under the Prior Plans that are used to pay the exercise price of a stock option or withheld to satisfy the tax withholding obligations related to any award and (ii) an annual increase on January 1st of each year beginning in 2022 through 2031, by the lesser of (a) 5% of the number of shares of all classes of the Company’s common stock issued and outstanding on December 31 immediately prior to the date of increase or (b) such number of shares determined by the board of directors. Under the 2021 Plan, as of December 31, 2022, 18.7 million shares of Class A common stock were authorized, of which 12.1 million shares of Class A common stock were available for future issuance.
2021 Employee Stock Purchase Plan
In August 2021, the Company launched the ESPP. The ESPP provides for concurrent six-month offering and purchase periods beginning February 15 and August 15 of each year. The Company has initially reserved 1.3 million shares of its Class A common stock for issuance and sale under the ESPP. On January 1 of each of year, 2022 through 2031, the aggregate number of shares of Class A common stock reserved for issuance under the ESPP shall be increased automatically by the number of shares equal to 1% of the total number of outstanding shares of Class A common stock and shares of preferred stock of the Company (on an as converted to common stock basis) on the immediately preceding December 31; provided that the board of directors or compensation committee may in its sole discretion reduce the amount of the increase in any particular year. As of December 31, 2022, 2.2 million shares of Class A common stock were authorized of which 1.8 million shares of Class A common stock were available for future issuance.
The ESPP allows eligible employees the option to purchase shares of the Company's Class A common stock at a 15% discount through payroll deductions of their eligible compensation, subject to certain plan limitations. On each purchase date, eligible employees can purchase the Company’s Class A common stock at a price per share equal to 85% of the lesser of the fair market value of the Company’s Class A common stock on (i) the offering date or (ii) the purchase date. The purchase date is the last day of any concurrent offering and purchase period. During the year ended December 31, 2022, 0.4 million shares of Class A common stock were purchased under the ESPP for an aggregate amount of $8.1 million. During the year ended December 31, 2021, no shares of Class A common stock were purchased under the ESPP.
For the ESPP, the Company recorded stock-based compensation expense of $2.6 million and $1.4 million during the years ended December 31, 2022 and December 31, 2021, respectively. As of December 31, 2022, there was $0.4 million of unrecognized stock-based compensation expense that is expected to be recognized over the remaining term of the offering period ending on February 14, 2023. As of December 31, 2022, the Company recorded a liability of $3.7 million related to the accumulated payroll deductions, which are refundable to employees who withdraw from the ESPP. This amount is included within accrued expenses in the accompanying Consolidated Balance Sheet.
Stock Options
Under the Prior Plans and the 2021 Plan (collectively, the “Plans”), options must be granted with exercise prices not less than the fair value of the underlying common stock on the date of grant. Options granted generally vest over periods of up to four years and expire ten years from the grant date. In 2019, the Company amended the terms and conditions of the Israeli Sub-Plan of the 2014 Plan. The Israeli Sub-Plan amendment allows the Company to grant options to Israeli employees or Israeli non-employees
with exercise prices less than the fair market value of the underlying common stock on the date of grant. The Company’s policy is to issue new shares of common stock upon the exercise of stock options.
A summary of the Company’s stock option activity under Plans for the year ended December 31, 2022 is as follows (in thousands, except weighted average information):
Number of Options OutstandingWeighted Average Exercise Price Per ShareWeighted Average Remaining Contractual Term (in years)Aggregate Intrinsic Value
Outstanding at December 31, 2021
9,841 $2.27 4.9$223,112 
Granted— — 
Exercised(2,755)1.88 
Forfeited/Canceled(340)4.63 
Outstanding at December 31, 2022
6,746 $2.31 4.2$95,188 
Exercisable at December 31, 2022
6,487 $2.30 4.1$91,602 
No stock options were granted by the Company during the year ended December 31, 2022. The weighted-average grant date fair value per share of options granted for the years ended December 31, 2021, and 2020 were $23.34, and $4.05, respectively. The total intrinsic value of options exercised in 2022, 2021, and 2020 were $48.6 million, $182.5 million, and $8.5 million, respectively. This intrinsic value represents the difference between the fair market value of the Company’s common stock on the date of exercise and the exercise price of each option. During the year ended December 31, 2022, the tax benefit realized from stock option exercises was approximately $8.4 million.
The weighted average assumptions that were used to calculate the grant date fair value of the Company’s stock option grants for the years ended December 31, 2021 and 2020 were as follows:
20212020
Expected dividend yield— %— %
Expected stock price volatility58.0 %59.4 %
Risk-free interest rate1.0 %0.6 %
Expected term (in years)6.26.0
Fair value of common stock$25.10 $5.52 
During the years ended December 31, 2022, 2021, and 2020, the Company recorded stock-based compensation expense for stock option awards of $2.8 million, $4.3 million and $5.7 million, respectively, under the Plans. As of December 31, 2022, total remaining stock-based compensation expense for unvested stock options is $2.9 million, which is expected to be recognized over a weighted average period of 1.0 years.
Restricted Stock Units
The Company has granted RSUs to certain employees and directors of the Company. RSUs granted prior to the Company’s Direct Listing vest upon the satisfaction of both a time-based service condition and a liquidity event requirement. The time-based service condition for these awards is generally satisfied over four years. The liquidity event requirement is satisfied upon the earliest to occur of a qualifying event, defined as a change of control transaction or after a set period of time following the effective date of the Company’s initial public offering pursuant to an effective registration statement under the Securities Act for the offer and sale of shares by the Company. A direct listing in which the Company did not sell its equity securities would not have satisfied the liquidity event performance condition; however, on April 19, 2021, the Company’s board of directors waived the liquidity event performance condition for the 6.9 million RSUs then outstanding so those that had satisfied the service condition would vest upon the
earlier of the first day of trading of the Company’s common stock on the NYSE, or March 15, 2022. As the satisfaction of the performance condition was not probable for accounting purposes prior to the waiver, the waiver of the liquidity event performance condition resulted in the remeasurement of the modified awards at fair value on the date of the waiver, which management estimated to be $25.04 per share or approximately $172.6 million.
On April 19, 2021, the Company also granted the CEO Performance Award, which provides for a grant of 1.4 million RSUs. The CEO Performance Award consists of five vesting tranches with a vesting schedule based on achieving stock price targets ranging from $67.61 per share to $157.75 per share, which is calculated as the volume-weighted average over a 30-day trading window following the first day the Company becomes a publicly traded company, as well as satisfying certain minimum service requirements of one to five years. The award expires ten years after the grant date.
TrancheNumber of RSUs Eligible to VestCompany Stock Price TargetMinimum Service Period (in years)
1279,600$67.611
2279,600$82.632
3279,600$102.663
4279,600$127.704
5279,600$157.755
The Company estimated the grant date fair value of this award using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation. A Monte Carlo simulation model also was used to estimate a derived service period for each of the five vesting tranches, which is the measure of the expected time to achieve each of the stock price targets. The various assumptions used in the Monte Carlo simulation included an expected dividend yield of zero, expected term of ten years, estimated volatility of 59%, and a risk-free interest rate of 1.6%. Using these inputs, the weighted average grant date fair value was estimated to be $16.34 per share. The weighted average derived service period of each tranche was estimated to be 4.1 years and ranged from 3.2 to 5.0 years. The Company will recognize aggregate stock-based compensation expense of $22.8 million over the derived service period of each tranche using a graded attribution method.
During the year ended December 31, 2022 and December 31, 2021, the Company recorded stock-based compensation expense of $5.9 million and $3.6 million, respectively, related to the CEO Performance Award.
On September 21, 2021, the Company’s former Chief Operating Officer (“COO”) resigned and entered into a transition and separation agreement with the Company, whereby all RSUs awarded to the former COO prior to the resignation will continue to vest for a certain period of time. This agreement resulted in modifications to the RSUs and options on the date of the separation agreement. Approximately $4.2 million of stock-based compensation expense was recognized by the Company
during the year ended December 31, 2021 related to the modification of the awards, representing the incremental fair value of the awards on the date of the modification.
For all RSUs, excluding the CEO Performance Award and modification of the COO awards, the Company recorded stock-based compensation expense of $65.6 million and $93.9 million during the years ended December 31, 2022 and December 31, 2021, respectively.
A summary of the Company’s RSU activity for the year ended December 31, 2022 is as follows (in thousands, except weighted average information):
Number of SharesWeighted Average Grant Date Fair Value Per Share
Unvested at December 31, 2021
7,532 $24.20 
Granted4,337 19.30 
Vested(2,719)24.65 
Forfeited/Canceled(1,509)24.53 
Unvested at December 31, 2022
7,641 $21.20 
The weighted-average grant date fair value per share of RSUs granted for the years ended December 31, 2022, 2021, and 2020 were $19.30, $23.75, and $5.72, respectively. The total fair value of RSUs vested during the years ended December 31, 2022 and 2021 was $48.1 million and $79.8 million, respectively. No RSUs vested during the year ended December 31, 2020, as none of the Company’s outstanding RSUs vested until completion of the Company’s Direct Listing on May 26, 2021.
As of December 31, 2022, total unrecognized stock-based compensation expense for RSUs associated with the CEO Performance Award was $13.4 million, which is expected to be recognized over a weighted average period of 2.5 years. Additionally, as of December 31, 2022, there was $1.0 million of unrecognized stock-based compensation expense related to performance-based RSUs which will be recognized by the second quarter of 2028 if achievement of the performance condition becomes probable. For the remaining RSUs, total unrecognized stock-based compensation expense for unvested RSUs as of December 31, 2022 was $129.7 million, which is expected to be recognized over a weighted average period of 1.5 years.
v3.22.4
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following are domestic and foreign components of the Company’s income (loss) before income taxes (in thousands):
Year Ended December 31,
202220212020
Domestic$71,136 $(11,127)$63,075 
Foreign2,948 1,851 1,262 
Income (loss) before income taxes$74,084 $(9,276)$64,337 
The components of the Company's income tax expense (benefit) are as follows (in thousands):
Year Ended December 31,
202220212020
Current:
Federal$6,099 $— $— 
State and local4,394 438 572 
Foreign2,373 1,632 633 
Total current income tax expense12,866 2,070 1,205 
Deferred:
Federal(5,517)(10,147)(14,189)
State and local5,191 (4,702)(8,582)
Foreign50 (97)(145)
Total deferred income tax benefit(276)(14,946)(22,916)
Total income tax expense (benefit)$12,590 $(12,876)$(21,711)
A reconciliation of the income taxes computed at the U.S. federal statutory tax rate of 21% to the income tax expense (benefit) is as follows (in thousands):
Year Ended December 31,
202220212020
U.S. federal statutory income tax rate$15,559 $(1,948)$13,511 
State and local income taxes, net of federal benefit3,451 (2,102)4,699 
Foreign rate differential56 250 (63)
Stock-based compensation expense(435)(18,518)349 
Transaction costs— 4,792 — 
Officers compensation limitation2,146 7,828 — 
Non-deductible expenses315 235 359 
Tax credits(17,598)(3,112)(205)
Change in valuation allowance12,654 — (40,048)
Return to provision(3,775)(389)(382)
Other217 88 69 
Income tax expense (benefit)$12,590 $(12,876)$(21,711)
The components of deferred tax assets and liabilities are as follows (in thousands):
Year Ended December 31,
20222021
Deferred income tax assets:
Net operating loss carryforwards$1,116 $14,655 
Stock-based compensation3,471 3,634 
Accrued expenses7,201 7,712 
Tax credit carryforwards16,792 16,744 
Capitalized development26,578 — 
Operating lease liabilities4,471 6,501 
Total deferred tax assets59,629 49,246 
Less valuation allowance(12,748)— 
Net deferred tax assets46,881 49,246 
Deferred tax liabilities:
Property and equipment(927)(971)
Operating lease right-of-use assets(2,842)(4,760)
Intangible assets and goodwill(2,006)(3,262)
Unremitted earnings of foreign subsidiaries(348)— 
Deferred commissions(2,454)(2,224)
Total deferred tax liabilities(8,577)(11,217)
Total net deferred tax assets$38,304 $38,029 
The Company regularly assesses the need for a valuation allowance against its deferred tax assets as prescribed by ASC 740, Income Taxes. In making that assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, which includes historical operating performance and the Company’s ability to generate sufficient taxable income in the future, whether it is more likely than not that some or all the deferred tax assets will not be realized. As a result of the Company’s profitability in 2020 and estimates of future taxable income, the Company determined that it was more likely than not the deferred tax assets will be realized, and accordingly, released the valuation allowance of $40.0 million against the deferred tax assets during 2020. Although the Company incurred a current year pretax profit and maintains a recent history of cumulative earnings, during the year ended December 31, 2022, it recorded a valuation allowance of $12.7 million against the deferred tax asset associated with carried forward California Research and Development Credits as the Company believes that it is more likely than not that it will not generate sufficient California sourced taxable income in future years to utilize that deferred tax asset.
The change in the valuation allowance was comprised of the following (in thousands):
Year Ended December 31,
202220212020
Valuation allowance, at beginning of year$— $— $40,048 
Increase in valuation allowance recorded through earnings12,654 — — 
Release of valuation allowance recorded through earnings— — (40,048)
Increase in valuation allowance recorded through other comprehensive income94 — — 
Valuation allowance, at end of year$12,748 $— $— 
As of December 31, 2022 the Company had no gross U.S. federal operating loss carryforwards, and $21.2 million of gross state operating loss carryforwards, of which $0.1 million of the state operating loss carryforwards carryforward indefinitely. The remaining gross state operating loss carryforwards as of December 31, 2022 will expire at various dates beginning in the year ending December 31, 2029, if not utilized. As of December 31, 2021, the Company had gross U.S. federal operating loss carryforwards of $54.0 million, and gross state operating loss carryforwards of $58.3 million. Additionally, as of December 31, 2022 and 2021, the Company had U.S. federal credit carryforwards of $13.6 million and $14.7 million, respectively, and state credit carryforwards of $19.6 million and $9.9 million, respectively. These amounts differ from the listing of deferred taxes above due to the federal detriment of state benefits, and unrecognized tax benefits recorded against the deferred tax. The federal credit carryforwards will begin to expire at various dates beginning in 2040 while the majority of gross state credit carryforwards are not subject to expiration.
Utilization of net operating loss and credit carryforwards may be subject to an annual limitation provided for in the Internal Revenue Code and similar state codes. Such annual limitation could result in the expiration of net operating loss and credit carryforwards before utilization. The Company does not believe that such limitation rules will have a material impact on the consolidated financial statements.
The following is a reconciliation of the total amounts of unrecognized tax benefits (in thousands):
Year Ended December 31,
202220212020
Unrecognized tax benefit, beginning of year:$6,337 $5,121 $4,728 
Gross increases - tax positions in prior year7,720 281 — 
Gross increases - tax positions in current year3,020 935 752 
Gross decreases - tax positions in prior year— — (359)
Gross decreases - tax positions in current year— — — 
Unrecognized tax benefit, end of year$17,077 $6,337 $5,121 
For the years ended December 31, 2022 and 2021, the Company had gross unrecognized tax benefits of $17.1 million and $6.3 million, respectively. If recognized, $10.7 million of unrecognized tax benefits would impact the Company’s effective tax rate. The Company has not accrued interest or penalties related to unrecognized tax benefits reflected in the consolidated financial statements during the years ended December 31, 2022, 2021, and 2020. The Company believes that any change to the unrecognized tax benefits in the next 12 months will not be material to the consolidated financial statements.
In the normal course of business, the Company is subject to taxation in and is regularly audited by federal, state, and foreign tax authorities. As of December 31, 2022, the Company is not under audit by the Internal Revenue Service, any state authority, or any material foreign jurisdiction for income taxes for any open years. Due to the Company’s net operating loss carryforwards, the Company’s domestic income tax returns are open to examination by the Internal Revenue Service beginning with tax year 2012 and by state taxing authorities beginning with tax year 2011.
As of December 31, 2022, the Company no longer considers the available cash balances related to undistributed earnings of its foreign subsidiaries to be indefinitely reinvested.
v3.22.4
Subsequent Events
 12 Months Ended
Dec. 31, 2022
Subsequent Events [Abstract]  
Subsequent Events Subsequent EventsIn February 2023, subsequent to year end, the purchase period for the December ASR ended and an additional 0.1 million shares were delivered to the Company. In total, 2.7 million shares were purchased by the Company under the ASR at a volume-weighted average price of $18.74 per share, net of fees.
v3.22.4
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to prior year presentation to conform to current year presentation.
Foreign Currency Remeasurement The Company’s foreign subsidiaries operate in their local currency and their functional currency is the U.S. dollar. Monetary assets and liabilities of each subsidiary, denominated in local or other foreign currency, are remeasured at the end of each reporting period using the exchange rates at that date. Non-monetary assets and liabilities and equity are remeasured at the historical exchange rates, while results of operations in the local currency or other foreign currencies are translated into U.S. dollars at the exchange rates in effect at the date of the transaction.
Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial
statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates include sales allowances, estimates relating to the measurement of operating lease right-of-use (“ROU”) assets and operating lease liabilities, determination of the fair value of stock-based awards, valuation of common stock in periods prior to becoming a public company, collectibility of accounts receivable, determination of the fair value of investments, impairment of investments and long-lived assets including goodwill, carrying value and useful lives of property and equipment and internal-use software, the amortization period for deferred commission costs, and income taxes. By their nature, estimates are subject to an inherent degree of uncertainty and actual results could differ from those estimates.
As of the date these consolidated financial statements are issued, the Company is not aware of any specific event or circumstance that would require an update to the Company’s estimates or judgments, or change to the carrying value of the Company’s assets or liabilities. However, these estimates and judgments may change as new events occur and additional information is obtained, which may result in changes being recognized in the consolidated financial statements in future periods. Actual results could differ from those estimates and any such differences may have a material impact on the financial statements.
Segments and Geographic Information The Company operates as a single operating segment. The Company’s Chief Operating Decision Maker, the CEO, regularly reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources.
Revenue Recognition
The Company recognizes revenue when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following five steps:
(1)Identification of the contract, or contracts, with a customer
(2)Identification of all performance obligations in the contract
(3)Determination of the transaction price
(4)Allocation of the transaction price to the performance obligations in the contract
(5)Recognition of revenue when, or as, the performance obligation or obligations are satisfied
The Company identifies enforceable revenue contracts when the terms are agreed to by the customer. Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines the standalone selling prices based on its overall pricing objectives, taking into consideration market conditions and other factors, including the value of its contracts, the products sold, and the number and types of users within the Company’s contracts.
Revenue is recognized as performance obligations are satisfied and is presented net of the sales allowance.
The Company derives its revenues from the following sources:
Subscription Revenue
Subscription revenue consists of time-based job posting plans, upsells which complement or expand visibility and prominence to job posting plans, and resume database plans. Plans are priced at a flat rate based on plan size and whether the plan is for a daily, monthly, or annual term. Customer contracts are typically subject to renewal at the end of the subscription term. Contracts are only cancelable at the end of the term and are nonrefundable.
Time-based job posting plans: Job posting plans provide customers access to cloud-based software services, where they may create job postings that are posted to the Company’s marketplace in addition to numerous other job sites or partner networks with job seeker communities. Customers may also access the Company’s software to review job applications and manage job postings. The Company recognizes revenue from job posting plans ratably over the term of the agreement beginning on the date the subscription service is made available to the customer. Once a customer requests a cancellation of their subscription, the open job postings are closed at the end of the term; however, the customer may still access the software to review past job postings or prior applications received under a separate upsell subscription. Job posting plans are billed in advance of the subscription period, which typically ranges from one to twelve months, except for daily subscription plans, which are billed in arrears based on how many days the customer uses the services.
Upsell services: Additional features to complement or expand visibility to job posting plans may be purchased as an upsell service. For these services, the Company bills the customers in advance and recognizes revenue ratably over the term of the agreement beginning on the date the upsell services are made available to the customer, which typically ranges from one to twelve months.
Upsell services also include job posting enhancements which are applied to individual job postings. Such services enhance job postings by providing customers with a temporary boost in the prominence of the job postings, expanding visibility to job postings by inviting candidates to apply to the job, or highlighting key attributes of job postings to make them stand out to job seekers. Individual job posting enhancements may be purchased by a customer when needed, or in recurring monthly prepaid bundles to complement their job posting subscription plan, and are billed in advance of use. Typically these prepaid bundles can be used over a period ranging from one to twelve months. Revenue from job posting enhancements is recognized as the customer uses the enhancement on their job postings. Unused prepaid job enhancements are not refundable, and the Company recognizes revenue for the estimated portion of prepaid job enhancements that are expected to expire unused (“breakage”) based on estimates considering historical breakage levels for upsell plans. Breakage is recognized as revenue in proportion to the pattern of actual usage by customers.
Resume database plans: Access to the Company’s resume database is purchased on a subscription basis and allows a customer to search for and view resumes. Resume database plans are priced based on how many resumes the customer would like to view in a month and may be purchased independent of, or in addition to, a job posting plan. Resume database plans are billed in advance of the subscription period, which typically ranges from one to twelve months. Revenue is recognized ratably over the subscription period.
Performance-based Revenue
Performance-based revenue consists of customers who pay on a per click by job applicant or per job application basis for the job postings they wish to distribute through the Company’s software. Customers pay an amount per click or per application that is usually capped at a contractual maximum per recruitment campaign, with campaigns typically lasting from one to three months. Customers on this pricing model do not have access to the Company’s software for subscription customers though they may purchase resume database subscription plans separately. Customers that use performance-based plans are typically companies with consistent hiring needs and sophisticated recruitment campaigns where they manage incoming applications and job postings on their own applicant tracking systems.
Performance-based revenue is typically billed monthly, in arrears, and revenue is recognized as job applicants click on or apply to the distributed job postings, up to the contractual maximum per recruitment campaign.
Sales Allowance
The Company establishes a sales allowance to estimate refunds and credits that it may grant to customers in the future for cancellations of subscriptions and concessions to customers who are not satisfied with services received. While subscriptions are noncancelable once the contract term has commenced, the Company may at times allow customers who miss their cancellation window prior to an autorenewal to cancel their contract, and the Company may issue refunds or credits to maintain overall customer satisfaction. The sales allowance is estimated by considering historical results and trends, and is accounted for as a reduction to revenue or deferred revenue for contracts where payments are received upfront and revenue is recognized over time.
ASC 606 requires the deferral of the recognition of incremental costs to obtain a contract, which the Company has identified as certain of its sales commissions paid to internal sales representatives for the sale of the Company’s services. The Company amortizes deferred commissions over the expected period of benefit unless the amortization period is less than one year, in which case, the Company has elected to apply the practical expedient to expense those costs as incurred. The estimated period of benefit includes anticipated customer renewals. If the Company pays commissions on contract renewals that are commensurate with the initial commission, the amortization period is the initial contract term. If the renewal commission is not commensurate with the initial commission, commissions are deferred and subsequently amortized on a straight-line basis over the expected customer life, which has been estimated to be three years based on an analysis of historical data and other qualitative factors, such as new product offerings, the seasonality of certain customer relationships and estimated useful life of the Company’s marketplace technology. Amortization expense is included within sales and marketing expense in the Consolidated Statements of Operations.
Cost of Revenue Cost of revenue consists of web hosting, credit card processing fees, personnel-related costs (including salaries, bonuses, benefits and stock-based compensation) for customer support employees, partner revenue share amounts, job distribution costs from performance-based revenue, and amortization of capitalized software costs associated with the Company’s marketplace technology to provide services to its customers. In addition, the Company allocates a portion of overhead costs, such as rent, IT costs, supplies and depreciation and amortization, to cost of revenue based on headcount.
Sales and Marketing Sales and marketing expense consists of personnel-related costs (including salaries, sales commissions, bonuses, benefits, and stock-based compensation) for the Company’s sales and marketing employees and marketing activities. Marketing activities include advertising, online lead generation, customer and industry events and candidate acquisition. The Company allocates a portion of overhead costs, such as rent, IT costs, supplies and depreciation and amortization, to sales and marketing expense based on headcount. Sales and marketing costs are expensed as incurred.
Advertising Cost Advertising costs principally represent online advertising costs, direct mailing, television, podcast and radio advertisements.
Research and Development Research and development expense consists of personnel-related costs (including salaries, bonuses, benefits and stock-based compensation) for the Company’s research and development employees, amortization of capitalized software costs associated with the development of internal databases, candidate insights, and reporting that support the Company’s marketplace technology and the cost of certain third-party service providers. The Company allocates a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to research and development expense based on headcount. Research and development costs, other than software development costs qualifying for capitalization, are expensed as incurred.
General and Administrative General and administrative expense consists of personnel-related costs (including salaries, bonuses, benefits and stock-based compensation) for employees in the Company’s executive, finance, human resource and administrative departments, and fees for third party professional services, including consulting, legal and accounting services. General and administrative expense also consists of costs as part of the Company’s transition to a publicly traded company and includes fees paid to its financial advisors in connection with its Direct Listing. In addition, the Company allocates a portion of overhead costs, such as rent, IT costs, supplies and depreciation and amortization, to general and administrative expense based on headcount.
Stock-based Compensation for Awards with a Market Condition
The Company estimates the fair value of employee stock-based compensation awards on the grant date and recognizes forfeitures as they occur. The Company has elected to treat stock-based compensation awards with graded vesting schedules and time-based service conditions as a single award and recognizes stock-based compensation on a straight-line basis over the requisite service period. For awards that contain both performance and service vesting conditions, the grant date fair value is recognized as stock-based compensation expense using a graded vesting attribution model. No expense is recognized for awards with performance conditions until the performance condition is probable of being met.
The Company estimates the fair value of restricted stock units (“RSUs”) based on the fair value of its common stock. The Company estimates the fair value of stock options using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the Company to make certain assumptions including the fair value of the underlying common stock, the expected term, the expected volatility, the risk-free interest rate and the dividend yield.
Prior to the completion of the Company’s Direct Listing on May 26, 2021, a public market did not exist for the Company’s common stock, and therefore, the board of directors determined the fair value of the common stock at the time of the grant by considering a number of objective and subjective factors including valuation of comparable companies, operating and financial performance and general and industry-specific economic outlook, amongst other factors. The fair value was determined in accordance with applicable elements of the practice aid issued by the American Institute of Certified Public Accountants titled, Valuation of Privately Held Company Equity Securities Issued as Compensation. Subsequent to the completion of the Company’s Direct Listing, the fair value of the common stock is determined based on the NYSE closing price on the date prior to the date of grant.
Given that the Company does not have sufficient exercise history to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior, the Company determines the expected term for its plain vanilla stock options using the simplified method, which is calculated as the midpoint of the stock option vesting term and the expiration date of the stock option.
For its stock options, because the Company’s common stock has limited trading history, the Company estimates the expected volatility of the awards from the historical volatility of selected public companies that represent similar but alternative investment opportunities to an investment in the Company. Characteristics considered in identifying guideline public companies include similarity in size, lines of business, market capitalization, revenue and financial leverage. The Company determines the expected volatility assumption using the frequency of daily historical prices of comparable public company common stock for a period equal to the expected term of the option. The Company periodically assesses the comparable companies and other relevant factors used to measure expected volatility for stock option grants.
The risk-free interest rate assumption is based upon observed interest rates on the United States government securities appropriate for the expected term of the Company’s employee stock options.
The dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The Company has never declared nor paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the foreseeable future.
Stock-based Compensation for Awards with a Market Condition
In April 2021, the Company granted an RSU award (the “CEO Performance Award”), which included service, market, and performance-based vesting conditions. The fair value of the award is determined using a Monte Carlo simulation model. The associated stock-based compensation expense is recorded over the requisite service period, using a graded attribution method. The requisite service period is the longer of the service period derived from the Monte Carlo simulation model and the explicit service period the CEO is required to remain employed to vest in the award. The market condition is satisfied upon achieving certain stock price targets for a period following the completion of the Company’s Direct Listing. The CEO Performance Award also contains an implied performance-based vesting condition as the CEO’s ability to earn the award was contingent upon the completion of the Direct Listing. Accordingly, no expense was recognized prior to the completion of the Company’s Direct Listing on May 26, 2021, as vesting was not considered probable for accounting purposes until the Direct Listing occurred. Provided that Ian Siegel continues to be the CEO of the Company, stock-based compensation expense is recognized over the requisite service period, regardless of whether the stock price targets are achieved. If the stock price targets are met sooner than the derived service period, the Company will accelerate the recognition of stock-based compensation expense to reflect the cumulative expense associated with the vested shares.
Stock-based Compensation Under the Employee Stock Purchase Plan
In August 2021, the Company launched an employee stock purchase plan (the “ESPP”). The ESPP will allow eligible employees the option to purchase shares of the Company's Class A common stock at a 15% discount through payroll deductions of their eligible compensation, subject to certain plan limitations. The ESPP provides for six-month offering periods beginning February and August of each year. On each purchase date, eligible employees purchase the Company’s stock at a price per share equal to 85% of the lesser of the fair market value of the Company’s Class A common stock on (i) the offering date or (ii) the purchase date.
The Company recognizes stock-based compensation expense related to shares issued pursuant to its ESPP on a straight-line basis over the offering period.
Net Share Settlement
In October 2021, the Company’s board of directors approved a “net share settlement” approach for satisfaction of tax withholding obligations in connection with settlement of taxes for RSUs, and exercises of non-qualified stock options, at the Company’s discretion. As a result, the Company currently withholds shares upon vesting of RSUs, and the withheld shares are immediately canceled. The Company has presented “Shares withheld related to net share settlement” in its Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) as a reduction, separate from the total number of shares issued upon vesting and settlement. The Company has not withheld any
shares as part of any option exercises. Upon payment of the withholding taxes to the appropriate taxing jurisdiction, the Company reflects the cash payment as a financing outflow in the Consolidated Statements of Cash Flows.
Income Taxes
The Company accounts for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes. Current tax liabilities and assets are recognized for the estimated taxes payable or refundable, respectively, on the tax returns for the current year. Deferred tax assets and liabilities are determined based on 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 must also make judgments in evaluating whether deferred tax assets will be realized from future taxable income. To the extent that it believes that realizability is not likely, the Company establishes or maintains a valuation allowance. A valuation allowance is established for deferred tax assets which the Company does not believe meet the “more likely than not” threshold for realizability. The Company’s judgments regarding future taxable income may change over time due to market conditions, tax laws, tax planning strategies or other factors. If the Company’s assumptions and estimates change in the future, the valuation allowance may materially increase or decrease, resulting in an increase or decrease in income tax expense and the related impact on the Company’s reported net income or loss.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties accrued with respect to uncertain tax positions, if any, in the provision (benefit) for income taxes in the Consolidated Statements of Operations.
Investments
The Company maintains an investment portfolio of primarily highly rated debt securities and money market mutual funds to manage its excess cash reserves. The Company’s primary objectives in investing its excess cash reserves are to preserve capital, provide sufficient liquidity to satisfy both operational cash flow requirements and potential strategic investment opportunities, and to obtain a reasonable or market rate of return on investments.
The Company’s investments are all highly liquid and available for use in current operations, including those with maturity dates beyond one year, and therefore the Company classifies these securities within current assets in its Consolidated Balance Sheets. The Company considers its highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Investments not considered cash equivalents are classified as marketable securities in the Company’s Consolidated Balance Sheets.
The Company classifies and accounts for its money market mutual funds which have readily determinable fair values as equity securities, and it carries such securities at fair value with unrealized gains and losses reported in other income, net in its Consolidated Statement of Operations.
The Company classifies and accounts for its debt securities as available-for-sale, and it carries such securities at fair value with unrealized gains and losses excluded from earnings and reported net of tax as a separate component of stockholders’ equity in accumulated other comprehensive loss until the security is sold or matures. During the twelve months ended December 31, 2022, in connection with its available-for-sale debt securities, the Company recorded pretax unrealized losses in other comprehensive loss of $0.4 million with no associated tax benefit. The Company held no investments in available-for-sale debt securities during the twelve months ended December 31, 2021 and December 31, 2020.
The Company determines any realized gains and losses on the sale of its available-for-sale debt securities using a specific identification method, and it records such gains and losses through other
income, net in its Consolidated Statement of Operations. During the twelve months ended December 31, 2022, the Company recorded $0.9 million in proceeds related to sales of its available-for-sale debt securities. Because the Company first purchased these investments during the twelve months ended December 31, 2022, it did not reclassify any net amounts out of beginning accumulated other comprehensive loss into other income, net in the Consolidated Statement of Operations.
If an available-for-sale debt security’s fair value declines below its amortized cost basis, the Company evaluates whether it intends to sell the security, or whether it more likely than not will be required to sell the security before the recovery of its amortized cost basis. If either condition is met, the Company records an impairment loss on the security through other income, net in its Consolidated Statement of Operations. If neither condition is met, the Company evaluates whether the decline is the result of credit-related factors, in which case the Company records the credit-related portion of the impairment loss through other income, net in its Consolidated Statement of Operations, and records the non-credit-related portion of the impairment loss, net of tax, through other comprehensive loss in the Consolidated Statement of Comprehensive Income.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, and accounts receivable. The Company maintains its cash accounts with large financial institutions and at times, the cash accounts may exceed Federal Deposit Insurance Corporation limits. The Company has not experienced any losses in such accounts.
The Company invests only in highly rated debt and equity securities. The Company believes the financial institutions that hold its investments are financially sound, and accordingly, are subject to minimal credit risk.
One customer accounted for 12% and 16% of the Company's outstanding accounts receivable as of December 31, 2022 and December 31, 2021, respectively. The Company closely monitors the financial condition of the foregoing customer, which has been in good credit standing. No other customer individually accounted for 10% or more of the Company’s outstanding accounts receivable as of December 31, 2022 and December 31, 2021. As such, the Company does not consider the concentration of its accounts receivable to be a material risk. There were no customers that individually represented 10% or more of revenue for the years ended December 31, 2022, 2021, and 2020.
The Company uses third parties to collect its credit card receivables and believes risk related to its credit card processors is minimal.
Accounts Receivable and Allowance for Doubtful Accounts
The Company receives payments via credit card, electronic payment or check. The Company’s accounts receivable consists of receivables from the Company’s credit card processing merchants and customers. Credit card payment is required unless the plan qualifies for credit terms which the Company may grant in the normal course of business. The Company does not normally require collateral or other security to support credit sales. Accounts receivable from customers do not bear interest, are typically due within 30 days and are recorded at the invoiced amount. The Company reduces accounts receivable by its allowance for doubtful accounts.
The Company regularly monitors collections and payments from customers and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. Prior to the Company’s adoption of Topic 326 during the year ended December 31, 2022, management estimated its allowance for doubtful accounts by considering factors such as historical credit loss experience and current conditions, such as the length of time accounts receivables are past due, customer payment histories, and any specific customer collection issues identified. Subsequent to the Company’s adoption of Topic 326, management has expanded its approach and estimates its allowance for doubtful accounts by considering the above factors, current market conditions which may
affect customer financial condition, and reasonable and supportable forecasts of future credit losses. The Company writes off accounts receivables that have become uncollectible.
Property and Equipment Property and equipment is initially recorded at cost, and depreciated using the straight-line method over the estimated useful lives of the assets, which is generally three years for computer hardware and software and five years for furniture and equipment. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life. Costs of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation are removed from the Consolidated Balance Sheets and the resulting gain or loss is reflected in loss from operations in the Consolidated Statements of Operations.
Leases
The Company determines at contract inception whether the arrangement is a lease based on its ability to control a physically distinct asset and determines the classification of the lease as either operating or finance. For all leases, the Company combines all components of the lease including related non-lease components as a single component. Operating leases are reflected as operating lease ROU assets and operating lease liabilities in the Consolidated Balance Sheets. The Company has also elected to utilize the short-term lease recognition exemption and, for those leases that qualify, the Company has not recognized operating lease ROU assets or operating lease liabilities. The Company does not have any finance leases.
Operating lease ROU assets represent the Company’s right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate in determining the present value of lease payments. The Company estimates the incremental borrowing rate to reflect the profile of collateralized borrowing over the expected term of the leases based on the information available at the later of the initial date of adoption of ASC 842, Leases, on January 1, 2019, or the lease commencement date.
The operating lease ROU asset also includes any lease payments made prior to lease commencement date and is reduced by lease incentives that the Company estimates it will realize. Lease terms may include options to extend or terminate the lease when the Company is reasonably certain that it will exercise the option. Lease expense is recognized on a straight-line basis over the lease term in the Consolidated Statements of Operations. Certain lease agreements may contain variable costs such as utilities and common area maintenance. Variable lease costs are expensed when the cost is incurred.
The Company computes rental income from subleasing certain of its office facilities on a straight-line basis over the sublease term in the Consolidated Statements of Operations. The difference between rental income and rental payments over the lease term is recorded as an unbilled rent receivable.
Internal-Use Software The Company capitalizes eligible costs associated with the development of its internal-use software in accordance with ASC 350-40, Internal-Use Software. Accordingly, the Company capitalizes costs incurred during the development phase including: (1) external direct costs of materials and services consumed in developing or obtaining the software, and (2) payroll and payroll-related costs for employees who are directly associated with the project. The Company expenses all costs as incurred that relate to the planning and post implementation phases of its software development cycle and costs associated with minor enhancements and maintenance. Capitalized costs are amortized using the straight-line method over three years. Amortization of internal-use software costs associated with the Company’s marketplace technology to provide services to its customers is recorded in cost of revenue. Amortization of internal-use software costs associated with internal databases, candidate insights, and reporting are recorded in research and development and general and administrative expenses in the Consolidated Statements of Operations. Amortization of these costs is allocated in the Consolidated Statements of Operations based on the nature of the underlying projects.
Intangible Assets Intangible assets are amortized over their estimated useful life using the straight-line method which approximates the pattern in which the economic benefits are consumed.
Impairment of Long-Lived Assets The Company periodically evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets may warrant revision or that the remaining balance of long-lived assets may not be recoverable in accordance with ASC 360, Property, Plant and Equipment, Accounting for the Impairment or Disposal of Long-Lived Assets. In determining whether an asset is impaired, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. When factors indicate that long-lived assets should be evaluated for possible impairment, the Company uses an estimate of the related undiscounted future cash flows over the remaining life of the long-lived assets in measuring whether they are recoverable. If the estimated undiscounted future cash flows are less than the carrying value of the asset, a loss is recorded as the excess of the asset’s carrying value over its fair value.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of net assets acquired and liabilities assumed in a business combination. The Company tests for impairment at least annually, in the fourth quarter, or whenever events or changes in circumstances indicate that goodwill might be impaired. The Company currently has one reporting unit.
In testing for goodwill impairment, the Company has an option to first make an assessment of qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, it is determined that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if concluded otherwise, the quantitative impairment test is performed.
The quantitative test compares the estimated fair value of a reporting unit to its carrying amount, including goodwill. If the estimated fair value exceeds its carrying amount, goodwill is considered not to be impaired. However, if the carrying amount exceeds the fair value of the reporting unit, then an impairment charge is recorded in an amount equal to the excess but limited to the total amount of goodwill.
Share Repurchase Program All shares repurchased under the Company’s share repurchase program are purchased for immediate retirement. Repurchased shares reduce the Company’s outstanding shares and its weighted average number of common shares outstanding for purposes of calculating basic and diluted earnings per share. All excess of repurchase price over par value for shares repurchased is allocated to additional paid-in capital in the Company’s Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit).
Recent Accounting Pronouncements
Becoming a Large Accelerated Filer
Prior to December 31, 2022, the Company qualified as an emerging growth company (“EGC”) and was allowed by the Jumpstart Our Business Startups Act to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company elected to use the adoption dates applicable to private companies. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies.
The Company became a large accelerated filer and no longer qualifies as an EGC at the conclusion of the fiscal year ended December 31, 2022. The adoption dates discussed below for recently adopted accounting pronouncements reflect the updated transition periods required as a result of becoming a large accelerated filer as of December 31, 2022. For all future new or revised accounting pronouncements, the Company will be required to adopt in accordance with public company timelines.
Accounting Pronouncements Not Yet Adopted
The Company reviewed all recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a material impact on the Company’s consolidated financial statements.
Recently Adopted Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and which removes certain conditions that should be considered in the derivative scope exception evaluation under Subtopic 815-40. The Company early adopted ASU 2020-06 on January 1, 2022 and applied the changes using a modified retrospective approach. The adoption did not have a material impact on the Company’s consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing model for measuring the allowance for credit losses for financial assets measured at amortized cost (including accounts receivable) to a model that is based on the expected losses rather than incurred losses. Under the new credit loss model, lifetime expected credit losses on such financial assets are measured and recognized at each reporting date based on historical, current, and forecasted information. Subsequent to ASU 2016-13, the FASB issued various ASUs to provide supplemental guidance and clarification to ASU 2016-13 which must be adopted concurrently with the adoption of ASU 2016-13. These ASUs are cumulatively referred to as “Topic 326.” The Company adopted Topic 326 for the fiscal year ended December 31, 2022 and applied the changes using a modified retrospective approach. The adoption did not have a material impact on the Company’s consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which enhances and simplifies various aspects of income tax accounting guidance. The Company adopted ASU 2019-12 for the fiscal year ended December 31, 2022 and applied the changes using a modified retrospective approach. The adoption did not have a material impact on the Company’s consolidated financial statements.
Net Income Per Share
Basic and diluted net income per share are computed using the two-class method as required when there are participating securities and multiple classes of common stock. Basic net income per share is computed using the weighted-average number of shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period.
Prior to May 14, 2021, when the Company’s Series A preferred stock and Series B preferred stock converted into shares of Class B common stock, the Company’s redeemable convertible preferred stock were participating securities as the holders of the redeemable convertible preferred stock were entitled to participate in dividends with common stock. In periods of net income, net income after deducting the accretion of redeemable convertible preferred stock was attributed to common stockholders and participating securities based on their participation rights. Net losses after deducting the accretion of redeemable convertible preferred stock are not allocated to the participating securities as the participating securities do not have a contractual obligation to share in any losses.
In April 2021, the Company filed its amended and restated certificate of incorporation, which resulted in the creation of Class A common stock and Class B common stock. As the liquidation and dividend rights are identical for Class A and Class B common stock (see Note 12), the undistributed earnings under the two-class method are allocated on a proportional basis and the resulting net income per share attributable to common stockholders is, therefore, the same for both Class A and Class B common stock on an individual or combined basis.
v3.22.4
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Accounts Receivable, Allowance for Credit Loss
The following table summarizes the changes in the sales allowance (in thousands):
Year Ended December 31,
202220212020
Sales allowance, at beginning of year$5,919 $4,362 $8,781 
Recorded as a reduction to revenue39,877 35,118 15,548 
Recorded as a reduction to deferred revenue4,852 3,730 6,086 
Utilization of allowance for refunds and credits(46,397)(37,291)(26,053)
Sales allowance, at end of year$4,251 $5,919 $4,362 
v3.22.4
Net Income Per Share (Tables)
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method
The following table presents the Company’s basic net income per share (in thousands, except per share amounts):
Year Ended December 31,
202220212020
Net income per share, basic:
Net income$61,494 $3,600 $86,048 
Less: Accretion of redeemable convertible preferred stock— (1,480)(3,883)
Less: Undistributed earnings attributable to participating securities— (168)(19,148)
Net income attributable to Class A and Class B common stockholders$61,494 $1,952 $63,017 
Weighted average shares of Class A and Class B common stock outstanding114,272 102,230 79,651 
Net income per share attributable to Class A and Class B common stockholders, basic$0.54 $0.02 $0.79 
Schedule of Earnings Per Share, Diluted, by Common Class, Including Two Class Method
The following table presents the Company’s diluted net income per share (in thousands, except per share amounts):
Year Ended December 31,
202220212020
Net income per share, diluted:
Numerator:
Net income attributable to Class A and Class B common stockholders$61,494 $1,952 $63,017 
Add:
Reallocation of net income attributable to participating securities— 18 2,346 
Interest on convertible notes with related parties, net of tax— — 275 
Net income attributable to Class A and Class B common stockholders, diluted$61,494 $1,970 $65,638 
Denominator:
Weighted average shares of Class A and Class B common stock outstanding, basic114,272 102,230 79,651 
Effect of dilutive securities:
Options to purchase common stock6,943 12,471 12,506 
Convertible notes with related parties— — 1,999 
Restricted stock units183 725 — 
Employee stock purchase plan— 12 — 
Unvested early exercise common stock— 33 — 
Weighted average shares of Class A and Class B common stock outstanding, diluted121,398 115,471 94,156 
Net income per share attributable to Class A and Class B common stockholders, diluted$0.51 $0.02 $0.70 
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
The following table presents the weighted average number of potentially dilutive common stock equivalents excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive (in thousands):
Year Ended December 31,
202220212020
Options to purchase common stock71 3 3,747 
Unvested restricted stock units5,681 153 4,148 
Convertible notes with related parties, if converted basis— 1,226 — 
Employee stock purchase plan240 45 — 
Total shares excluded from diluted net income per share5,992 1,427 7,895 
v3.22.4
Revenue Information (Tables)
 12 Months Ended
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue The following table presents the Company’s revenue streams (in thousands):
Year Ended December 31,
202220212020
Subscription$696,334 $600,090 $346,781 
Performance-based208,315 141,051 71,361 
Total revenue$904,649 $741,141 $418,142 
v3.22.4
Property and Equipment, net (Tables)
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment
Property and equipment consist of the following (in thousands):
December 31,
20222021
Computer, equipment and software$8,626 $7,141 
Furniture and fixtures1,081 1,818 
Leasehold improvements8,709 8,605 
Construction in progress— 3 
18,416 17,567 
Less: Accumulated depreciation(10,313)(8,865)
Total property and equipment, net$8,103 $8,702 
v3.22.4
Internal-Use Software, net (Tables)
 12 Months Ended
Dec. 31, 2022
Research and Development [Abstract]  
Schedule Of Capitalized Computer Software
Internal-use software consists of the following (in thousands):
December 31,
20222021
Internal-use software$39,628 $31,902 
Less: Accumulated amortization(23,870)(18,245)
Total internal-use software, net$15,758 $13,657 
Schedule of Capitalized Computer Software, Future Amortization Expense
Future amortization expense of the Company’s internal-use software as of December 31, 2022 is as follows for the years ending December 31, (in thousands):
2023$6,703 
20245,625 
20252,797 
2026633 
Total future amortization expense$15,758 
v3.22.4
Accrued Expenses (Tables)
 12 Months Ended
Dec. 31, 2022
Payables and Accruals [Abstract]  
Schedule of Accrued Liabilities
Accrued expenses consist of the following (in thousands):
December 31,
20222021
Accrued compensation and benefits$31,791 $26,621 
Accrued marketing10,937 22,493 
Accrued partner expenses7,465 8,457 
Accrued commissions5,716 5,790 
Accrued non-income taxes3,605 11,250 
Accrued refunds and customer liabilities2,863 3,646 
Other accrued expenses6,738 7,956 
Total accrued expenses$69,115 $86,213 
v3.22.4
Debt (Tables)
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt Instrument Redemption At any time on or after January 15, 2025, the Company may redeem all or any portion of the Notes, at the redemption prices equal to the percentage of principal amount set forth below, plus accrued and unpaid interest, if any, if redeemed during the 12-month period beginning on January 15 of the year indicated below:
YearPercentage
2025102.50 %
2026101.25 %
2027 and thereafter100.00 %
v3.22.4
Commitment and Contingencies (Tables)
 12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Restructuring and Related Costs
The following table presents the roll forward of the restructuring costs liability for the years ended December 31, 2022, 2021 and 2020 (in thousands), which is included in accrued expenses in the Company’s Consolidated Balance Sheets:
Year Ended December 31,
202220212020
Accrual, at beginning of year$— $233 $— 
Expense— — 4,947 
Cash payments— — (4,281)
Non-cash adjustments— (233)(433)
Accrual, at end of year$— $— $233 
v3.22.4
Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Financial Assets Measured at Fair Value on a Recurring Basis
The following table presents the Company’s financial assets measured at fair value on a recurring basis, as well as the amortized cost basis and gross unrealized gains and losses of those assets as of December 31, 2022 (in thousands):
Balance Sheet Classification
Amortized Cost BasisGross Unrealized GainsGross Unrealized LossesFair ValueCash and Cash EquivalentsMarketable Securities
Level 1:
Cash$166,341 $— $— $166,341 $166,341 $— 
Money market mutual funds49,545 — — 49,545 49,545 — 
U.S. treasury securities204,580 9 (180)204,409 2,995 201,414 
Subtotal420,466 9 (180)420,295 218,881 201,414 
Level 2:
Commercial paper41,348 — — 41,348 — 41,348 
Certificates of deposit6,116 — — 6,116 — 6,116 
Corporate notes and obligations63,912 10 (202)63,720 1,519 62,201 
Asset-backed securities15,150 17 (29)15,138 — 15,138 
U.S. agency securities23,736 5 (3)23,738 6,980 16,758 
Subtotal150,262 32 (234)150,060 8,499 141,561 
Total cash, cash equivalents, and marketable securities$570,728 $41 $(414)$570,355 $227,380 $342,975 
Investments Classified by Contractual Maturity Date
The following table summarizes the fair value of the Company’s available-for-sale debt securities by contractual maturity as of December 31, 2022 (in thousands):
Due within 1 year$321,119 
Due after 1 year through 5 years33,350 
Total available-for-sale debt securities$354,469 
Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value
The following table summarizes the available-for-sale debt securities which have been in a continuous unrealized loss position for less than 12 months as of December 31, 2022 (in thousands):
Fair ValueGross Unrealized Losses
Asset-backed securities$6,598 $(29)
Corporate notes and obligations55,136 (202)
U.S. treasury securities149,128 (180)
U.S. agency securities7,517 (3)
Total available-for-sale debt securities$218,379 $(414)
v3.22.4
Leases (Tables)
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Schedule of Lease Cost
The components of lease cost related to the Company’s operating leases are as follows (in thousands):
Year Ended
December 31,
202220212020
Operating lease cost$5,502 $6,816 $7,572 
Short-term lease cost391 7 237 
Variable lease cost1,497 1,203 1,399 
Sublease income(597)(151)(1,051)
Net lease cost$6,793 $7,875 $8,157 
Supplemental information related to the Company’s operating leases is as follows:
December 31,
202220212020
Weighted-average remaining lease term5.2 years5.4 years5.5 years
Weighted-average incremental borrowing rate5.0 %5.1 %5.2 %
Operating Lease Maturity
Future undiscounted lease payments for the Company’s operating lease liabilities and a reconciliation of these payments to its operating lease liabilities as of December 31, 2022 are as follows (in thousands):
2023$6,207 
20244,988 
20252,742 
20261,228 
20271,260 
Thereafter4,433 
Total lease payments20,858 
Less: imputed interest(2,411)
Present value of operating lease liabilities$18,447 
v3.22.4
Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Share-based Payment Arrangement, Expensed and Capitalized, Amount
Total stock-based compensation expense is recorded in the Consolidated Statements of Operations as follows (in thousands):
Year Ended December 31,
202220212020
Cost of revenue$807 $1,093 $73 
Sales and marketing10,858 17,865 704 
Research and development30,985 34,230 3,050 
General and administrative34,306 54,070 1,925 
Total stock-based compensation$76,956 $107,258 $5,752 
Schedule of Stock Options Roll Forward
A summary of the Company’s stock option activity under Plans for the year ended December 31, 2022 is as follows (in thousands, except weighted average information):
Number of Options OutstandingWeighted Average Exercise Price Per ShareWeighted Average Remaining Contractual Term (in years)Aggregate Intrinsic Value
Outstanding at December 31, 2021
9,841 $2.27 4.9$223,112 
Granted— — 
Exercised(2,755)1.88 
Forfeited/Canceled(340)4.63 
Outstanding at December 31, 2022
6,746 $2.31 4.2$95,188 
Exercisable at December 31, 2022
6,487 $2.30 4.1$91,602 
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions
The weighted average assumptions that were used to calculate the grant date fair value of the Company’s stock option grants for the years ended December 31, 2021 and 2020 were as follows:
20212020
Expected dividend yield— %— %
Expected stock price volatility58.0 %59.4 %
Risk-free interest rate1.0 %0.6 %
Expected term (in years)6.26.0
Fair value of common stock$25.10 $5.52 
Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity
TrancheNumber of RSUs Eligible to VestCompany Stock Price TargetMinimum Service Period (in years)
1279,600$67.611
2279,600$82.632
3279,600$102.663
4279,600$127.704
5279,600$157.755
Schedule of Nonvested Restricted Stock Units Activity
A summary of the Company’s RSU activity for the year ended December 31, 2022 is as follows (in thousands, except weighted average information):
Number of SharesWeighted Average Grant Date Fair Value Per Share
Unvested at December 31, 2021
7,532 $24.20 
Granted4,337 19.30 
Vested(2,719)24.65 
Forfeited/Canceled(1,509)24.53 
Unvested at December 31, 2022
7,641 $21.20 
v3.22.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Schedule of Income before Income Tax, Domestic and Foreign
The following are domestic and foreign components of the Company’s income (loss) before income taxes (in thousands):
Year Ended December 31,
202220212020
Domestic$71,136 $(11,127)$63,075 
Foreign2,948 1,851 1,262 
Income (loss) before income taxes$74,084 $(9,276)$64,337 
Schedule of Components of Income Tax Expense (Benefit)
The components of the Company's income tax expense (benefit) are as follows (in thousands):
Year Ended December 31,
202220212020
Current:
Federal$6,099 $— $— 
State and local4,394 438 572 
Foreign2,373 1,632 633 
Total current income tax expense12,866 2,070 1,205 
Deferred:
Federal(5,517)(10,147)(14,189)
State and local5,191 (4,702)(8,582)
Foreign50 (97)(145)
Total deferred income tax benefit(276)(14,946)(22,916)
Total income tax expense (benefit)$12,590 $(12,876)$(21,711)
Schedule of Effective Income Tax Rate Reconciliation
A reconciliation of the income taxes computed at the U.S. federal statutory tax rate of 21% to the income tax expense (benefit) is as follows (in thousands):
Year Ended December 31,
202220212020
U.S. federal statutory income tax rate$15,559 $(1,948)$13,511 
State and local income taxes, net of federal benefit3,451 (2,102)4,699 
Foreign rate differential56 250 (63)
Stock-based compensation expense(435)(18,518)349 
Transaction costs— 4,792 — 
Officers compensation limitation2,146 7,828 — 
Non-deductible expenses315 235 359 
Tax credits(17,598)(3,112)(205)
Change in valuation allowance12,654 — (40,048)
Return to provision(3,775)(389)(382)
Other217 88 69 
Income tax expense (benefit)$12,590 $(12,876)$(21,711)
Schedule of Deferred Tax Assets and Liabilities
The components of deferred tax assets and liabilities are as follows (in thousands):
Year Ended December 31,
20222021
Deferred income tax assets:
Net operating loss carryforwards$1,116 $14,655 
Stock-based compensation3,471 3,634 
Accrued expenses7,201 7,712 
Tax credit carryforwards16,792 16,744 
Capitalized development26,578 — 
Operating lease liabilities4,471 6,501 
Total deferred tax assets59,629 49,246 
Less valuation allowance(12,748)— 
Net deferred tax assets46,881 49,246 
Deferred tax liabilities:
Property and equipment(927)(971)
Operating lease right-of-use assets(2,842)(4,760)
Intangible assets and goodwill(2,006)(3,262)
Unremitted earnings of foreign subsidiaries(348)— 
Deferred commissions(2,454)(2,224)
Total deferred tax liabilities(8,577)(11,217)
Total net deferred tax assets$38,304 $38,029 
Summary of Valuation Allowance
The change in the valuation allowance was comprised of the following (in thousands):
Year Ended December 31,
202220212020
Valuation allowance, at beginning of year$— $— $40,048 
Increase in valuation allowance recorded through earnings12,654 — — 
Release of valuation allowance recorded through earnings— — (40,048)
Increase in valuation allowance recorded through other comprehensive income94 — — 
Valuation allowance, at end of year$12,748 $— $— 
Schedule of Unrecognized Tax Benefits Roll Forward
The following is a reconciliation of the total amounts of unrecognized tax benefits (in thousands):
Year Ended December 31,
202220212020
Unrecognized tax benefit, beginning of year:$6,337 $5,121 $4,728 
Gross increases - tax positions in prior year7,720 281 — 
Gross increases - tax positions in current year3,020 935 752 
Gross decreases - tax positions in prior year— — (359)
Gross decreases - tax positions in current year— — — 
Unrecognized tax benefit, end of year$17,077 $6,337 $5,121 
v3.22.4
Organization and Description of Business (Details) - USD ($)
shares in Millions, $ in Millions
 12 Months Ended
May 26, 2021
May 14, 2021
Dec. 31, 2021
May 25, 2021
Class of Stock [Line Items]        
Issuance costs incurred in connection with Direct Listing     $ 34.0  
Series A Redeemable Convertible Preferred Stock        
Class of Stock [Line Items]        
Redeemable convertible preferred stock, outstanding (in shares)       2.3
Series B Redeemable Convertible Preferred Stock        
Class of Stock [Line Items]        
Redeemable convertible preferred stock, outstanding (in shares)       6.0
Common Class B        
Class of Stock [Line Items]        
Conversion of redeemable convertible preferred stock to common stock (in shares)   24.2    
Common Class B | Common Stock        
Class of Stock [Line Items]        
Conversion of redeemable convertible preferred stock to common stock (in shares) 3.1 24.2    
v3.22.4
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies - Narrative (Details)
 1 Months Ended 3 Months Ended 12 Months Ended
Aug. 31, 2021
Dec. 31, 2022
USD ($)
Dec. 31, 2022
USD ($)
reporting_unit
segment
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Jan. 12, 2022
USD ($)
Dec. 31, 2019
USD ($)
Class of Stock [Line Items]              
Number of operating segments | segment     1        
Total sales allowance   $ 4,251,000 $ 4,251,000 $ 5,919,000 $ 4,362,000   $ 8,781,000
Advertising expense     280,100,000 255,600,000 98,300,000    
Prepaid advertising expense   2,600,000 2,600,000 3,200,000      
Gain (loss) recognized in other comprehensive income     (400,000)        
Associated tax benefit     0        
Total available-for-sale debt securities   354,469,000 354,469,000 0 0    
Sales of marketable securities     861,000 0 0    
Allowance for doubtful accounts   $ 1,800,000 $ 1,800,000 500,000 2,000,000    
Capitalized costs, amortization period   3 years 3 years        
Impairment charges related to long-lived assets     $ 0 $ 0 $ 0    
Number of reporting units | reporting_unit     1        
Senior Notes Due 2030 | Senior Notes              
Class of Stock [Line Items]              
Notes issued           $ 550,000,000  
Debt issuance costs   $ 8,400,000 $ 8,400,000        
Interest expense   $ 27,600,000          
Effective interest rate (as a percent)   5.40% 5.40%        
Amortization of issuance costs for credit facility   $ 900,000          
Revenue Benchmark | Geographic Concentration Risk | Non-US              
Class of Stock [Line Items]              
Concentration risk (as a percent)     2.00% 2.00% 2.00%    
Customer One | Accounts Receivable Concentration Risk | Customer Concentration Risk              
Class of Stock [Line Items]              
Concentration risk (as a percent)     12.00% 16.00%      
Computer, equipment and software              
Class of Stock [Line Items]              
Useful life     3 years        
Furniture and fixtures              
Class of Stock [Line Items]              
Useful life     5 years        
Employee stock purchase plan | ESPP              
Class of Stock [Line Items]              
ESPP discount percentage from market price, beginning of purchase period (as a percent) 15.00%            
ESPP, concurrent offering and purchase period 6 months            
ESPP purchase price of common stock, percent of market price (as a percent) 85.00%            
Accounts Receivable              
Class of Stock [Line Items]              
Total sales allowance   1,900,000 $ 1,900,000 $ 2,900,000      
Accrued Expenses              
Class of Stock [Line Items]              
Total sales allowance   $ 2,400,000 $ 2,400,000 $ 3,000,000      
v3.22.4
Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies - Summary of Changes in Sales Allowances (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Accounts Receivable, Allowance for Credit Loss [Roll Forward]      
Sales allowance, at beginning of year $ 5,919 $ 4,362 $ 8,781
Recorded as a reduction to revenue 39,877 35,118 15,548
Recorded as a reduction to deferred revenue 4,852 3,730 6,086
Utilization of allowance for refunds and credits (46,397) (37,291) (26,053)
Sales allowance, at end of year $ 4,251 $ 5,919 $ 4,362
v3.22.4
Net Income Per Share - Schedule of Earnings Per Share - Basic (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Net income per share, basic:      
Net income $ 61,494 $ 3,600 $ 86,048
Less: Accretion of redeemable convertible preferred stock 0 (1,480) (3,883)
Less: Undistributed earnings attributable to participating securities 0 (168) (19,148)
Net income attributable to Class A and Class B common stockholders $ 61,494 $ 1,952 $ 63,017
Weighted average shares of Class A and Class B common stock outstanding, basic (in shares) 114,272 102,230 79,651
Net income per share attributable to Class A and Class B common stockholders, basic (in dollars per share) $ 0.54 $ 0.02 $ 0.79
v3.22.4
Net Income Per Share - Schedule of Earnings Per Share - Diluted (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Numerator:      
Net income attributable to Class A and Class B common stockholders $ 61,494 $ 1,952 $ 63,017
Reallocation of net income attributable to participating securities 0 18 2,346
Interest on convertible notes with related parties, net of tax 0 0 275
Net income attributable to Class A and Class B common stockholders, diluted $ 61,494 $ 1,970 $ 65,638
Denominator:      
Weighted average shares of Class A and Class B common stock outstanding, basic (in shares) 114,272 102,230 79,651
Effect of dilutive securities:      
Convertible notes with related parties (in shares) 0 0 1,999
Weighted average shares of Class A and Class B common stock outstanding, diluted (in shares) 121,398 115,471 94,156
Net income per share attributable to Class A and Class B common stockholders - diluted (in dollars per share) $ 0.51 $ 0.02 $ 0.70
Options to purchase common stock      
Effect of dilutive securities:      
Share based payment arrangements (in shares) 6,943 12,471 12,506
Unvested restricted stock units      
Effect of dilutive securities:      
Share based payment arrangements (in shares) 183 725 0
Employee stock purchase plan      
Effect of dilutive securities:      
Share based payment arrangements (in shares) 0 12 0
Unvested early exercise common stock      
Effect of dilutive securities:      
Share based payment arrangements (in shares) 0 33 0
v3.22.4
Net Income Per Share - Schedule of Antidilutive Options (Details) - shares
shares in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total shares excluded from diluted net income (loss) per share (in shares) 5,992 1,427 7,895
Options to purchase common stock      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total shares excluded from diluted net income (loss) per share (in shares) 71 3 3,747
Unvested restricted stock units      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total shares excluded from diluted net income (loss) per share (in shares) 5,681 153 4,148
Convertible notes with related parties, if converted basis      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total shares excluded from diluted net income (loss) per share (in shares) 0 1,226 0
Employee stock purchase plan      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total shares excluded from diluted net income (loss) per share (in shares) 240 45 0
v3.22.4
Revenue Information - Narrative (Details)
 12 Months Ended
Dec. 31, 2022
USD ($)
revenueStream
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Revenue from Contract with Customer [Abstract]      
Revenue that was included in deferred revenue balances $ 23,300,000 $ 15,100,000 $ 18,500,000
Contract assets $ 0 0  
Expected customer life 3 years    
Amortization expense for deferred sales commissions $ 5,400,000 4,300,000 3,100,000
Impairment to capitalized deferred commissions $ 0 0 0
Number of revenue streams | revenueStream 2    
Revenue recognized from performance obligations satisfied in previous periods $ 0 $ 0 $ 0
v3.22.4
Revenue Information - Schedule of Revenue Streams (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Disaggregation of Revenue [Line Items]      
Total revenue $ 904,649 $ 741,141 $ 418,142
Subscription      
Disaggregation of Revenue [Line Items]      
Total revenue 696,334 600,090 346,781
Performance-based      
Disaggregation of Revenue [Line Items]      
Total revenue $ 208,315 $ 141,051 $ 71,361
v3.22.4
Property and Equipment, net (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 18,416 $ 17,567  
Less: Accumulated depreciation (10,313) (8,865)  
Total property and equipment, net 8,103 8,702  
Depreciation expense 2,800 2,300 $ 2,200
Computer, equipment and software      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 8,626 7,141  
Furniture and fixtures      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 1,081 1,818  
Leasehold improvements      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross 8,709 8,605  
Construction in progress      
Property, Plant and Equipment [Line Items]      
Property and equipment, gross $ 0 $ 3  
v3.22.4
Internal-Use Software, net - Schedule of Internal-Use Software, Net (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Research and Development [Abstract]      
Internal-use software $ 39,628 $ 31,902  
Less: Accumulated amortization (23,870) (18,245)  
Total internal-use software, net 15,758 13,657  
Amortization expense $ 7,900 $ 7,200 $ 7,400
v3.22.4
Internal-Use Software, net - Schedule of Future Amortization Expense (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Research and Development [Abstract]    
2023 $ 6,703  
2024 5,625  
2025 2,797  
2026 633  
Total internal-use software, net $ 15,758 $ 13,657
v3.22.4
Accrued Expenses (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Payables and Accruals [Abstract]    
Accrued marketing $ 10,937 $ 22,493
Accrued compensation and benefits 31,791 26,621
Accrued partner expenses 7,465 8,457
Accrued commissions 5,716 5,790
Accrued refunds and customer liabilities 2,863 3,646
Accrued non-income taxes 3,605 11,250
Other accrued expenses 6,738 7,956
Total accrued expenses $ 69,115 $ 86,213
v3.22.4
Debt - Narrative (Details) - USD ($)
$ / shares in Units, shares in Millions
 1 Months Ended 3 Months Ended
Jan. 12, 2022
May 26, 2021
Sep. 02, 2020
Jun. 22, 2020
Apr. 30, 2021
Dec. 31, 2022
Jan. 10, 2022
Sep. 01, 2020
Line of Credit Facility [Line Items]                
Maximum amount of liquidity that my be netted against total indebtedness         $ 100,000,000      
Convertible Subordinated Debt | Affiliated Entity                
Line of Credit Facility [Line Items]                
Convertible notes issued       $ 25,000,000        
Convertible debt, threshold percentage of stock price trigger (as a percent)       75.00%        
Convertible debt, conversion price (in dollars per share)   $ 8.2909   $ 8.2909        
Long-term debt outstanding   $ 25,600,000            
Convertible Subordinated Debt | Affiliated Entity | Common Class B                
Line of Credit Facility [Line Items]                
Convertible debt, shares converted (in shares)   3.1            
Line of Credit                
Line of Credit Facility [Line Items]                
Line of credit facility         250,000,000      
Maximum amount of liquidity that my be netted against total indebtedness         $ 550,000,000   $ 550,000,000  
Line of credit, amount available           $ 244,600,000    
Line of Credit | Minimum                
Line of Credit Facility [Line Items]                
Commitment fee (as a percent)         0.25%      
Line of Credit | Maximum                
Line of Credit Facility [Line Items]                
Commitment fee (as a percent)         0.35%      
Line of Credit | Revolving Credit Facility                
Line of Credit Facility [Line Items]                
Long-term debt outstanding           0    
Line of credit facility     $ 35,000,000         $ 25,000,000
Debt instrument, floating per annum rate (as a percent)     4.50%          
Line of Credit | Revolving Credit Facility | Prime Rate                
Line of Credit Facility [Line Items]                
Debt instrument, floating per annum rate (as a percent)     0.25%          
Line of Credit | Letter of Credit                
Line of Credit Facility [Line Items]                
Long-term debt outstanding           5,400,000    
Senior Notes | Senior Notes Due 2030                
Line of Credit Facility [Line Items]                
Convertible notes issued $ 550,000,000              
Debt instrument, interest rate (as a percent) 5.00%              
Redemption price, percent of principal (as a percent) 100.00%              
Redemption of aggregate principal amount (as a percent) 40.00%              
Debt issuance costs           8,400,000    
Interest expense           $ 27,600,000    
Effective interest rate (as a percent)           5.40%    
Amortization of issuance costs for credit facility           $ 900,000    
Senior Notes | Senior Notes Due 2030 | Prior to January 15, 2025                
Line of Credit Facility [Line Items]                
Redemption price, percent of principal (as a percent) 105.00%              
Senior Notes | Senior Notes Due 2030 | Upon occurrence of change of control triggering event                
Line of Credit Facility [Line Items]                
Redemption price, percent of principal (as a percent) 101.00%              
v3.22.4
Debt - Schedule of Redemption Percentages (Details) - Senior Notes Due 2030 - Senior Notes
Jan. 12, 2022
Line of Credit Facility [Line Items]  
Redemption price, percent of principal (as a percent) 100.00%
2025  
Line of Credit Facility [Line Items]  
Redemption price, percent of principal (as a percent) 102.50%
2026  
Line of Credit Facility [Line Items]  
Redemption price, percent of principal (as a percent) 101.25%
2027 and thereafter  
Line of Credit Facility [Line Items]  
Redemption price, percent of principal (as a percent) 100.00%
v3.22.4
Commitment and Contingencies - Narrative (Details) - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2020
Mar. 31, 2020
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Loss Contingencies [Line Items]          
Future minimum payments, year one     $ 7,700,000    
Future minimum payments, year two     10,500,000    
Future minimum payments, year three     8,300,000    
Future minimum payments, year four     0    
Accrued liability for indemnification arrangements     0    
Restructuring charges     0 $ 0 $ 4,947,000
Non-cash adjustments     0 (233,000) $ (433,000)
COVID-19 Pandemic          
Loss Contingencies [Line Items]          
Reduction in workforce (as a percent) 40.00%        
Restructuring charges   $ 5,700,000 0 0  
Noncash charge   800,000      
Sales and marketing | COVID-19 Pandemic          
Loss Contingencies [Line Items]          
Restructuring charges   3,700,000      
Research and development          
Loss Contingencies [Line Items]          
Non-income taxes     $ 800,000 $ 8,700,000  
Research and development | COVID-19 Pandemic          
Loss Contingencies [Line Items]          
Restructuring charges   1,000,000      
General and administrative | COVID-19 Pandemic          
Loss Contingencies [Line Items]          
Restructuring charges   $ 1,000,000      
v3.22.4
Commitment and Contingencies - Rollforward of Restructuring Cost Liability (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Restructuring Reserve [Roll Forward]      
Accrual, at beginning of year $ 0 $ 233 $ 0
Expense 0 0 4,947
Cash payments 0 0 (4,281)
Non-cash adjustments 0 (233) (433)
Accrual, at end of year $ 0 $ 0 $ 233
v3.22.4
Financial Instruments - Amortized Cost, Unrealized Gains and Losses, and Fair Value (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Debt Securities, Available-for-Sale [Line Items]      
Total available-for-sale debt securities $ 354,469 $ 0 $ 0
Balance Sheet Classification, Cash and Cash Equivalents 227,380 254,621  
Marketable securities 342,975 0  
US Treasury Securities      
Debt Securities, Available-for-Sale [Line Items]      
Balance Sheet Classification, Cash and Cash Equivalents 2,995    
Marketable securities 201,414    
Commercial Paper      
Debt Securities, Available-for-Sale [Line Items]      
Balance Sheet Classification, Cash and Cash Equivalents 0    
Marketable securities 41,348    
Certificates of Deposit      
Debt Securities, Available-for-Sale [Line Items]      
Marketable securities 6,116    
Corporate Notes and Obligations      
Debt Securities, Available-for-Sale [Line Items]      
Balance Sheet Classification, Cash and Cash Equivalents 1,519    
Marketable securities 62,201    
Asset-Backed Securities      
Debt Securities, Available-for-Sale [Line Items]      
Marketable securities 15,138    
U.S. agency securities      
Debt Securities, Available-for-Sale [Line Items]      
Balance Sheet Classification, Cash and Cash Equivalents 6,980    
Marketable securities 16,758    
Fair Value, Recurring      
Debt Securities, Available-for-Sale [Line Items]      
Fair Value Measurement, Gross Unrealized Gains 41    
Fair Value Measurement, Gross Unrealized Losses (414)    
Total cash, cash equivalents, and marketable securities 570,728    
Total cash, cash equivalents, and marketable securities 570,355    
Fair Value, Inputs, Level 1      
Debt Securities, Available-for-Sale [Line Items]      
Balance Sheet Classification, Cash and Cash Equivalents 218,881    
Marketable securities 201,414    
Fair Value, Inputs, Level 1 | Fair Value, Recurring      
Debt Securities, Available-for-Sale [Line Items]      
Fair Value Measurement, Gross Unrealized Gains 9    
Fair Value Measurement, Gross Unrealized Losses (180)    
Total cash, cash equivalents, and marketable securities 420,466    
Total cash, cash equivalents, and marketable securities 420,295    
Fair Value, Inputs, Level 1 | Fair Value, Recurring | US Treasury Securities      
Debt Securities, Available-for-Sale [Line Items]      
Fair Value Measurement, Amortized Cost Basis 204,580    
Fair Value Measurement, Gross Unrealized Gains 9    
Fair Value Measurement, Gross Unrealized Losses (180)    
Total available-for-sale debt securities 204,409    
Fair Value, Inputs, Level 2      
Debt Securities, Available-for-Sale [Line Items]      
Balance Sheet Classification, Cash and Cash Equivalents 8,499    
Marketable securities 141,561    
Fair Value, Inputs, Level 2 | Fair Value, Recurring      
Debt Securities, Available-for-Sale [Line Items]      
Fair Value Measurement, Gross Unrealized Gains 32    
Fair Value Measurement, Gross Unrealized Losses (234)    
Total cash, cash equivalents, and marketable securities 150,262    
Total cash, cash equivalents, and marketable securities 150,060    
Fair Value, Inputs, Level 2 | Fair Value, Recurring | Commercial Paper      
Debt Securities, Available-for-Sale [Line Items]      
Fair Value Measurement, Amortized Cost Basis 41,348    
Total available-for-sale debt securities 41,348    
Fair Value, Inputs, Level 2 | Fair Value, Recurring | Certificates of Deposit      
Debt Securities, Available-for-Sale [Line Items]      
Fair Value Measurement, Amortized Cost Basis 6,116    
Total available-for-sale debt securities 6,116    
Fair Value, Inputs, Level 2 | Fair Value, Recurring | Corporate Notes and Obligations      
Debt Securities, Available-for-Sale [Line Items]      
Fair Value Measurement, Amortized Cost Basis 63,912    
Fair Value Measurement, Gross Unrealized Gains 10    
Fair Value Measurement, Gross Unrealized Losses (202)    
Total available-for-sale debt securities 63,720    
Fair Value, Inputs, Level 2 | Fair Value, Recurring | Asset-Backed Securities      
Debt Securities, Available-for-Sale [Line Items]      
Fair Value Measurement, Amortized Cost Basis 15,150    
Fair Value Measurement, Gross Unrealized Gains 17    
Fair Value Measurement, Gross Unrealized Losses (29)    
Total available-for-sale debt securities 15,138    
Fair Value, Inputs, Level 2 | Fair Value, Recurring | U.S. agency securities      
Debt Securities, Available-for-Sale [Line Items]      
Fair Value Measurement, Amortized Cost Basis 23,736    
Fair Value Measurement, Gross Unrealized Gains 5    
Fair Value Measurement, Gross Unrealized Losses (3)    
Total available-for-sale debt securities 23,738    
Cash      
Debt Securities, Available-for-Sale [Line Items]      
Balance Sheet Classification, Cash and Cash Equivalents 166,341    
Cash | Fair Value, Inputs, Level 1 | Fair Value, Recurring      
Debt Securities, Available-for-Sale [Line Items]      
Cash and cash equivalent 166,341    
Money Market Funds      
Debt Securities, Available-for-Sale [Line Items]      
Balance Sheet Classification, Cash and Cash Equivalents 49,545 $ 0 $ 0
Money Market Funds | Fair Value, Inputs, Level 1 | Fair Value, Recurring      
Debt Securities, Available-for-Sale [Line Items]      
Cash and cash equivalent $ 49,545    
v3.22.4
Financial Instruments - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Debt Securities, Available-for-Sale [Line Items]      
Unrealized gains (losses) on equity securities $ 0    
Cash and cash equivalents 227,380 $ 254,621  
Credit losses recorded for available-for-sale debt securities 0    
12 months or longer, gross unrealized losses   0 $ 0
Sales of marketable securities 861 0 0
Money Market Funds      
Debt Securities, Available-for-Sale [Line Items]      
Cash and cash equivalents 49,545 0 $ 0
Fair Value, Nonrecurring      
Debt Securities, Available-for-Sale [Line Items]      
Material impairments on assets 0 $ 0  
Fair Value, Inputs, Level 2      
Debt Securities, Available-for-Sale [Line Items]      
Fair value of debt 451,000    
Cash and cash equivalents $ 8,499    
v3.22.4
Financial Instruments - Available-for-sale Debt Securities by Contractual Maturity (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Available-for-Sale Securities, Debt Maturities [Abstract]      
Due within 1 year $ 321,119    
Due after 1 year through 5 years 33,350    
Total available-for-sale debt securities $ 354,469 $ 0 $ 0
v3.22.4
Financial Instruments - Available-for-sale Debt Securities (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Debt Securities, Available-for-Sale [Line Items]  
Fair Value $ 218,379
Gross Unrealized Losses (414)
Asset-Backed Securities  
Debt Securities, Available-for-Sale [Line Items]  
Fair Value 6,598
Gross Unrealized Losses (29)
Corporate Notes and Obligations  
Debt Securities, Available-for-Sale [Line Items]  
Fair Value 55,136
Gross Unrealized Losses (202)
US Treasury Securities  
Debt Securities, Available-for-Sale [Line Items]  
Fair Value 149,128
Gross Unrealized Losses (180)
U.S. agency securities  
Debt Securities, Available-for-Sale [Line Items]  
Fair Value 7,517
Gross Unrealized Losses $ (3)
v3.22.4
Leases - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Aug. 29, 2020
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Lessee, Lease, Description [Line Items]        
Lease term 128 months      
Operating lease right-of-use assets obtained in exchange for new operating lease $ 5,800 $ 0 $ 0 $ 5,787
Lease termination period 12 months      
Cash payments for operating lease liabilities   7,600 4,300 7,300
Tenant improvement allowances received   $ 100 $ 3,900 $ 500
Minimum        
Lessee, Lease, Description [Line Items]        
Lease term   1 year    
Renewal term   1 year    
Maximum        
Lessee, Lease, Description [Line Items]        
Lease term   8 years    
Renewal term   10 years    
v3.22.4
Leases - Schedule of Lease Cost (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Leases [Abstract]      
Operating lease cost $ 5,502 $ 6,816 $ 7,572
Short-term lease cost 391 7 237
Variable lease cost 1,497 1,203 1,399
Sublease income (597) (151) (1,051)
Net lease cost $ 6,793 $ 7,875 $ 8,157
v3.22.4
Leases - Supplemental Information (Details)
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Leases [Abstract]      
Weighted-average remaining lease term (in years) 5 years 2 months 12 days 5 years 4 months 24 days 5 years 6 months
Weighted-average incremental borrowing rate (as a percent) 5.00% 5.10% 5.20%
v3.22.4
Leases - Future Undiscounted Lease Payments (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Leases [Abstract]  
2023 $ 6,207
2024 4,988
2025 2,742
2026 1,228
2027 1,260
Thereafter 4,433
Total lease payments 20,858
Less: imputed interest (2,411)
Present value of operating lease liabilities $ 18,447
v3.22.4
Common Stock and Redeemable Convertible Preferred Stock (Details)
May 14, 2021
shares
Dec. 31, 2022
vote
$ / shares
shares
Dec. 31, 2021
$ / shares
shares
Class of Stock [Line Items]      
Common stock, authorized (in shares)   1,450,000,000  
Preferred stock, authorized (in shares)   50,000,000 50,000,000
Common stock, par value (in dollars per share) | $ / shares   $ 0.00001  
Preferred stock, par value (in dollars per share) | $ / shares   $ 0.00001 $ 0.00001
Common Class A      
Class of Stock [Line Items]      
Common stock, authorized (in shares)   700,000,000 700,000,000
Common stock, par value (in dollars per share) | $ / shares   $ 0.00001 $ 0.00001
Number of votes entitled per share | vote   1  
Common Class B      
Class of Stock [Line Items]      
Common stock, authorized (in shares)   700,000,000 700,000,000
Common stock, par value (in dollars per share) | $ / shares   $ 0.00001 $ 0.00001
Number of votes entitled per share | vote   20  
Conversion of redeemable convertible preferred stock to common stock (in shares) 24,200,000    
v3.22.4
Share Repurchase Program (Details)
shares in Millions
 1 Months Ended 12 Months Ended
Dec. 31, 2022
USD ($)
shares
Dec. 31, 2022
USD ($)
agreement
shares
Nov. 30, 2022
USD ($)
Jun. 30, 2022
USD ($)
Feb. 28, 2022
USD ($)
Accelerated Share Repurchases [Line Items]          
Authorized amount for repurchase     $ 450,000,000   $ 100,000,000
Stock repurchase program, increased limit     $ 200,000,000 $ 150,000,000  
Number of accelerated share repurchase agreements | agreement   2      
Accelerated Share Repurchase Agreement          
Accelerated Share Repurchases [Line Items]          
Common shares repurchased (in shares) | shares 2.6 5.1      
Common shares repurchased, amount   $ 100,000,000      
Amount repurchased of ASR $ 42,500,000        
Accelerated share repurchase program, amount representing total amount (as a percent) 85.00%        
Share Repurchased Under Rule 10b5-1 Plan          
Accelerated Share Repurchases [Line Items]          
Common shares repurchased (in shares) | shares   7.9      
Common shares repurchased, amount   $ 137,700,000      
Open Market Purchases          
Accelerated Share Repurchases [Line Items]          
Common shares repurchased (in shares) | shares   3.0      
Common shares repurchased, amount   $ 51,600,000      
Common Class A          
Accelerated Share Repurchases [Line Items]          
Common shares repurchased (in shares) | shares   16.0      
Common shares repurchased, amount   $ 289,300,000      
Stock repurchase program, remaining authorized amount for future purchase $ 110,700,000 110,700,000      
Common Class A | Accelerated Share Repurchase Agreement          
Accelerated Share Repurchases [Line Items]          
Authorized amount for repurchase $ 50,000,000 $ 50,000,000      
v3.22.4
Stock-Based Compensation - Total Stock Based Compensation Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation $ 107,258 $ 76,956 $ 5,752
Cost of revenue      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation 1,093 807 73
Sales and marketing      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation 17,865 10,858 704
Research and development      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation 34,230 30,985 3,050
General and administrative      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation $ 54,070 $ 34,306 $ 1,925
v3.22.4
Stock-Based Compensation - Narrative (Details)
$ / shares in Units, $ in Thousands
 1 Months Ended 12 Months Ended
Apr. 19, 2021
USD ($)
tranche
$ / shares
shares
Oct. 31, 2021
Aug. 31, 2021
shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
$ / shares
shares
Dec. 31, 2020
USD ($)
$ / shares
May 14, 2021
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Total remaining stock-based compensation expense for unvested stock options       $ 2,900      
Other accrued expenses       6,738 $ 7,956    
Weighted average grant date fair value (in dollars per share) | $ / shares         $ 23.34 $ 4.05  
Intrinsic value of options exercised       48,600 $ 182,500 $ 8,500  
Tax benefit from realized stock option exercises       8,400      
Total stock-based compensation       $ 107,258 $ 76,956 $ 5,752  
Stock based compensation, weighted average period of recognition       1 year      
Accelerated cost       $ 4,200      
Common Class A              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Shares purchased under ESPP (in shares) | shares       400,000 0    
Aggregate amount of shares purchased       $ 8,100      
Unvested restricted stock units              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Unrecognized stock based compensation expense       129,700      
Total stock-based compensation       $ 65,600 $ 93,900    
Stock based compensation, weighted average period of recognition       1 year 6 months      
Restricted stock units granted (in shares) | shares       4,337,000      
Service period       4 years      
RSUs outstanding (in shares) | shares 6,900,000     7,641,000 7,532,000    
Fair value of RSUs (in dollars per share) | $ / shares $ 25.04            
Value of RSUs $ 172,600            
Weighted average grant date fair value (in dollars per share) | $ / shares       $ 21.20 $ 24.20    
Granted (in dollars per share) | $ / shares       $ 19.30 $ 23.75 $ 5.72  
Fair value of options vested       $ 48,100 $ 79,800 $ 0  
Award vesting (as a percent)   6.25%          
Unvested restricted stock units | Chief Executive Officer              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Unrecognized stock based compensation expense       $ 13,400      
Expiration period       10 years      
Total stock-based compensation       $ 5,900 3,600    
Stock based compensation, weighted average period of recognition       2 years 6 months      
Restricted stock units granted (in shares) | shares 1,400,000            
Number of vesting tranches | tranche 5            
Trading window (in days) 30 days            
Aggregate stock based compensation expense over derived service period $ 22,800            
Unvested restricted stock units | Chief Executive Officer | Monte Carlo Simulation              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Service period       4 years 1 month 6 days      
Fair value assumptions, expected dividend yield       0.00%      
Fair value assumptions, expected term       10 years      
Fair value assumptions, estimated volatility (as a percent)       59.00%      
Fair value assumptions, risk-free rate (as a percent)       1.60%      
Weighted average grant date fair value (in dollars per share) | $ / shares       $ 16.34      
Unvested restricted stock units | Chief Executive Officer | Minimum              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Service period       1 year      
RSUs vested in period, amount per share (in dollars per share) | $ / shares $ 67.61            
Unvested restricted stock units | Chief Executive Officer | Minimum | Monte Carlo Simulation              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Service period       3 years 2 months 12 days      
Unvested restricted stock units | Chief Executive Officer | Maximum              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Service period       5 years      
RSUs vested in period, amount per share (in dollars per share) | $ / shares $ 157.75            
Unvested restricted stock units | Chief Executive Officer | Maximum | Monte Carlo Simulation              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Service period       5 years      
Options to purchase common stock              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Award vesting period       4 years      
Expiration period       10 years      
Total stock-based compensation       $ 2,800 $ 4,300 $ 5,700  
Fair value assumptions, expected dividend yield         0.00% 0.00%  
Fair value assumptions, expected term         6 years 2 months 12 days 6 years  
Fair value assumptions, estimated volatility (as a percent)         58.00% 59.40%  
Fair value assumptions, risk-free rate (as a percent)         1.00% 0.60%  
Performance Shares              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Unrecognized stock based compensation expense       $ 1,000      
Equity Incentive Plan 2021              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Shares initially reserved for issuance (in shares) | shares             10,700,000
Shares reserved for issuance as a percent of common stock issued and outstanding (as a percent)             5.00%
Number of shares authorized (in shares) | shares       18,700,000      
Shares initially reserved for issuance (in shares) | shares       12,100,000      
ESPP              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Total remaining stock-based compensation expense for unvested stock options       $ 2,600 $ 1,400    
Unrecognized stock based compensation expense       400      
Other accrued expenses       $ 3,700      
ESPP | Common Class A              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Shares initially reserved for issuance (in shares) | shares       2,200,000      
Shares initially reserved for issuance (in shares) | shares       1,800,000      
ESPP | Employee stock purchase plan              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Shares initially reserved for issuance (in shares) | shares     1,300,000        
ESPP, concurrent offering and purchase period     6 months        
Increase in common stock reserved for issuance (as a percent)     1.00%        
ESPP discount percentage from market price, beginning of purchase period (as a percent)     15.00%        
ESPP purchase price of common stock, percent of market price (as a percent)     85.00%        
Equity Incentive Plans, 2012, 2014, 2021              
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]              
Granted (in shares) | shares       0      
Issuance of common stock upon exercise of options (in shares) | shares       2,755,000      
v3.22.4
Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Weighted Average Exercise Price Per Share    
Outstanding, weighted average remaining contractual term (in years) 4 years 2 months 12 days 4 years 10 months 24 days
Exercisable, weighted average remaining contractual term (in years) 4 years 1 month 6 days  
Outstanding, aggregate intrinsic value $ 95,188 $ 223,112
Exercisable, aggregate intrinsic value $ 91,602  
Equity Incentive Plans, 2012, 2014, 2021    
Number of Options Outstanding    
Beginning balance (in shares) 9,841  
Granted (in shares) 0  
Exercised (in shares) (2,755)  
Forfeited/cancelled (in shares) (340)  
Ending balance (in shares) 6,746 9,841
Exercisable (in shares) 6,487  
Weighted Average Exercise Price Per Share    
Beginning balance, outstanding (in dollars per share) $ 2.27  
Granted (in dollars per share) 0  
Exercised (in dollars per share) 1.88  
Forfeited/Cancelled (in dollars per share) 4.63  
Ending balance, outstanding (in dollars per share) 2.31 $ 2.27
Exercisable (in dollars per share) $ 2.30  
v3.22.4
Stock-Based Compensation - Schedule of Weighted Average Assumptions (Details) - Options to purchase common stock - $ / shares
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Fair value assumptions, expected dividend yield 0.00% 0.00%
Fair value assumptions, estimated volatility (as a percent) 58.00% 59.40%
Fair value assumptions, risk-free rate (as a percent) 1.00% 0.60%
Fair value assumptions, expected term 6 years 2 months 12 days 6 years
Weighted average grant date fair value (in dollars per share) $ 25.10 $ 5.52
v3.22.4
Stock-Based Compensation - Schedule of RSU Information (Details) - Unvested restricted stock units - $ / shares
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Apr. 19, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Number of RSUs Eligible to Vest (in shares) 7,641,000 7,532,000 6,900,000
Minimum Service Period (in years) 4 years    
Tranche 1 | Chief Executive Officer      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Number of RSUs Eligible to Vest (in shares) 279,600    
Company Stock Price Target (in dollars per share) $ 67.61    
Minimum Service Period (in years) 1 year    
Tranche 2 | Chief Executive Officer      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Number of RSUs Eligible to Vest (in shares) 279,600    
Company Stock Price Target (in dollars per share) $ 82.63    
Minimum Service Period (in years) 2 years    
Tranche 3 | Chief Executive Officer      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Number of RSUs Eligible to Vest (in shares) 279,600    
Company Stock Price Target (in dollars per share) $ 102.66    
Minimum Service Period (in years) 3 years    
Tranche 4 | Chief Executive Officer      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Number of RSUs Eligible to Vest (in shares) 279,600    
Company Stock Price Target (in dollars per share) $ 127.70    
Minimum Service Period (in years) 4 years    
Tranche 5 | Chief Executive Officer      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Number of RSUs Eligible to Vest (in shares) 279,600    
Company Stock Price Target (in dollars per share) $ 157.75    
Minimum Service Period (in years) 5 years    
v3.22.4
Stock-Based Compensation - Summary of RSU Activity (Details) - Unvested restricted stock units - $ / shares
 12 Months Ended
Apr. 19, 2021
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Number of Shares        
Beginning balance (in shares)   7,532,000    
Granted (in shares)   4,337,000    
Vested (in shares)   (2,719,000)    
Forfeited/Canceled (in shares)   (1,509,000)    
Ending balance (in shares) 6,900,000 7,641,000 7,532,000  
Weighted Average Grant Date Fair Value Per Share        
Beginning balance (in dollars per share)   $ 24.20    
Granted (in dollars per share)   19.30 $ 23.75 $ 5.72
Vested (in dollars per share)   24.65    
Forfeited/Canceled (in dollars per share)   24.53    
Ending balance (in dollars per share)   $ 21.20 $ 24.20  
v3.22.4
Income Taxes - Schedule of Domestic and Foreign Income Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
Domestic $ 71,136 $ (11,127) $ 63,075
Foreign 2,948 1,851 1,262
Income (loss) before income taxes $ 74,084 $ (9,276) $ 64,337
v3.22.4
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Current:      
Federal $ 6,099 $ 0 $ 0
State and local 4,394 438 572
Foreign 2,373 1,632 633
Total current income tax expense 12,866 2,070 1,205
Deferred:      
Federal (5,517) (10,147) (14,189)
State and local 5,191 (4,702) (8,582)
Foreign 50 (97) (145)
Total deferred income tax benefit (276) (14,946) (22,916)
Total income tax expense (benefit) $ 12,590 $ (12,876) $ (21,711)
v3.22.4
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Disclosure [Abstract]      
U.S. federal statutory income tax rate $ 15,559 $ (1,948) $ 13,511
State and local income taxes, net of federal benefit 3,451 (2,102) 4,699
Foreign rate differential 56 250 (63)
Stock-based compensation expense (435) (18,518) 349
Transaction costs 0 4,792 0
Officers compensation limitation 2,146 7,828 0
Non-deductible expenses 315 235 359
Tax credits (17,598) (3,112) (205)
Change in valuation allowance 12,654 0 (40,048)
Return to provision (3,775) (389) (382)
Other 217 88 69
Total income tax expense (benefit) $ 12,590 $ (12,876) $ (21,711)
v3.22.4
Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Deferred income tax assets:        
Net operating loss carryforwards $ 1,116 $ 14,655    
Stock-based compensation 3,471 3,634    
Accrued expenses 7,201 7,712    
Tax credit carryforwards 16,792 16,744    
Capitalized development 26,578 0    
Operating lease liabilities 4,471 6,501    
Total deferred tax assets 59,629 49,246    
Less valuation allowance (12,748) 0 $ 0 $ (40,048)
Net deferred tax assets 46,881 49,246    
Deferred tax liabilities:        
Property and equipment (927) (971)    
Operating lease right-of-use assets (2,842) (4,760)    
Intangible assets and goodwill (2,006) (3,262)    
Unremitted earnings of foreign subsidiaries (348) 0    
Deferred commissions (2,454) (2,224)    
Total deferred tax liabilities (8,577) (11,217)    
Total net deferred tax assets $ 38,304 $ 38,029    
v3.22.4
Income Taxes - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Tax Credit Carryforward [Line Items]        
Release of valuation allowance $ 0 $ 0 $ 40,048  
Increase in valuation allowance recorded through earnings 12,654 0 0  
Tax credit carryforwards   14,700    
Unrecognized tax benefits 17,077 6,337 $ 5,121 $ 4,728
Unrecognized tax benefits that would impact effective tax rate 10,700      
Federal Tax Authority        
Tax Credit Carryforward [Line Items]        
Operating loss carryforwards 0 54,000    
Tax credit carryforwards 13,600      
State and Local Jurisdiction        
Tax Credit Carryforward [Line Items]        
Operating loss carryforwards 21,200 58,300    
Tax credit carryforwards 19,600 $ 9,900    
State and Local Jurisdiction | Indefinite Carryforward        
Tax Credit Carryforward [Line Items]        
Operating loss carryforwards $ 100      
v3.22.4
Income Taxes - Schedule of Change in Valuation Allowance (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Deferred Tax Assets, Valuation Allowance [Roll Forward]      
Valuation allowance, at beginning of year $ 0 $ 0 $ 40,048
Increase in valuation allowance recorded through earnings 12,654 0 0
Release of valuation allowance recorded through earnings 0 0 (40,048)
Increase in valuation allowance recorded through other comprehensive income 94 0 0
Valuation allowance, at end of year $ 12,748 $ 0 $ 0
v3.22.4
Income Taxes - Schedule of Reconciliation of Unrecognized Tax Benefits (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Unrecognized tax benefit, beginning of year: $ 6,337 $ 5,121 $ 4,728
Gross increases - tax positions in prior year 7,720 281 0
Gross increases - tax positions in current year 3,020 935 752
Gross decreases - tax positions in prior year 0 0 (359)
Gross decreases - tax positions in current year 0 0 0
Unrecognized tax benefit, end of year $ 17,077 $ 6,337 $ 5,121
v3.22.4
Subsequent Events (Details) - Accelerated Share Repurchase Agreement - $ / shares
shares in Millions
 1 Months Ended 3 Months Ended 12 Months Ended
Feb. 28, 2023
Dec. 31, 2022
Feb. 28, 2023
Dec. 31, 2022
Subsequent Event [Line Items]        
Common shares repurchased (in shares)   2.6   5.1
Subsequent Event | Forecast        
Subsequent Event [Line Items]        
Common shares repurchased (in shares) 0.1   2.7  
Volume weighted-average price (in dollars per share) $ 18.74