TRADE DESK, INC., 10-K filed on 2/15/2024
Annual Report
v3.24.0.1
Cover - USD ($)
 12 Months Ended
Dec. 31, 2023
Jan. 31, 2024
Jun. 30, 2023
Document Information [Line Items]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2023    
Current Fiscal Year End Date --12-31    
Document Transition Report false    
Entity File Number 001-37879    
Entity Registrant Name TRADE DESK, INC.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 27-1887399    
Entity Address, Address Line One 42 N. Chestnut Street    
Entity Address, City or Town Ventura    
Entity Address, State or Province CA    
Entity Address, Postal Zip Code 93001    
City Area Code 805    
Local Phone Number 585-3434    
Title of 12(b) Security Class A Common Stock, par value $0.000001 per share    
Trading Symbol TTD    
Security Exchange Name NASDAQ    
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 Emerging Growth Company false    
Entity Small Business false    
ICFR Auditor Attestation Flag true    
Document Financial Statement Error Correction [Flag] false    
Entity Shell Company false    
Entity Public Float     $ 34,083,149,160
Documents Incorporated by Reference
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Proxy Statement for the 2024 Annual Meeting of Stockholders are incorporated by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2023.
    
Entity Central Index Key 0001671933    
Document Fiscal Year Focus 2023    
Document Fiscal Period Focus FY    
Amendment Flag false    
Class A common stock      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   445,017,931  
Class B common stock      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   43,918,900  
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Audit Information
 12 Months Ended
Dec. 31, 2023
Audit Information [Abstract]  
Auditor Firm ID 238
Auditor Name PricewaterhouseCoopers LLP
Auditor Location Los Angeles, California
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CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Current assets:    
Cash and cash equivalents $ 895,129 $ 1,030,506
Short-term investments, net 485,159 416,080
Accounts receivable, net of allowance for credit losses of $12,826 and $10,477 as of December 31, 2023 and 2022, respectively 2,870,313 2,347,195
Prepaid expenses and other current assets 63,353 51,836
TOTAL CURRENT ASSETS 4,313,954 3,845,617
Property and equipment, net 161,422 173,759
Operating lease assets 197,732 220,396
Deferred income taxes 154,849 94,028
Other assets, non-current 60,730 46,879
TOTAL ASSETS 4,888,687 4,380,679
Current liabilities:    
Accounts payable 2,317,318 1,871,419
Accrued expenses and other current liabilities 137,996 105,474
Operating lease liabilities 55,524 52,430
TOTAL CURRENT LIABILITIES 2,510,838 2,029,323
Operating lease liabilities, non-current 180,369 208,527
Other liabilities, non-current 33,261 27,490
TOTAL LIABILITIES 2,724,468 2,265,340
Commitments and contingencies (Note 13) 0 0
STOCKHOLDERS’ EQUITY    
Preferred stock, par value $0.000001; 100,000 shares authorized, zero shares issued and outstanding as of December 31, 2023 and 2022 0 0
Common stock, par value $0.000001 Class A, 1,000,000 shares authorized; 444,997 and 446,456 shares issued and outstanding as of December 31, 2023 and 2022, respectively Class B, 95,000 shares authorized; 43,919 and 44,012 shares issued and outstanding as of December 31, 2023 and 2022, respectively 0 0
Additional paid-in capital 1,967,265 1,449,825
Retained earnings 196,954 665,514
TOTAL STOCKHOLDERS’ EQUITY 2,164,219 2,115,339
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 4,888,687 $ 4,380,679
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Accounts receivable, allowance for credit losses $ 12,826 $ 10,477
Preferred stock    
Preferred stock, par value (in dollars per share) $ 0.000001 $ 0.000001
Preferred stock, authorized shares (in shares) 100,000,000 100,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock    
Common stock, par value (in dollars per share) $ 0.000001 $ 0.000001
Class A common stock    
Common stock    
Common stock, authorized shares (in shares) 1,000,000,000 1,000,000,000
Common stock, shares issued (in shares) 444,997,000 446,456,000
Common stock, shares outstanding (in shares) 444,997,000 446,456,000
Class B common stock    
Common stock    
Common stock, authorized shares (in shares) 95,000,000 95,000,000
Common stock, shares issued (in shares) 43,919,000 44,012,000
Common stock, shares outstanding (in shares) 43,919,000 44,012,000
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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Income Statement [Abstract]      
Revenue $ 1,946,120 $ 1,577,795 $ 1,196,467
Operating expenses:      
Platform operations 365,598 281,123 221,554
Sales and marketing 447,970 337,975 249,298
Technology and development 411,794 319,876 226,137
General and administrative 520,278 525,167 374,661
Total operating expenses 1,745,640 1,464,141 1,071,650
Income from operations 200,480 113,654 124,817
Other expense (income):      
Interest expense (income), net (68,508) (12,755) 1,030
Foreign currency exchange loss (gain), net 993 (961) 1,751
Total other expense (income), net (67,515) (13,716) 2,781
Income before income taxes 267,995 127,370 122,036
Provision for (benefit from) income taxes 89,055 73,985 (15,726)
Net income $ 178,940 $ 53,385 $ 137,762
Earnings per share:      
Basic (in dollars per share) $ 0.37 $ 0.11 $ 0.29
Diluted (in dollars per share) $ 0.36 $ 0.11 $ 0.28
Weighted-average shares outstanding:      
Basic (in shares) 489,261 486,937 476,851
Diluted (in shares) 500,182 499,925 498,540
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock
Additional Paid-In Capital
Retained Earnings
Balance at beginning of period (in shares) at Dec. 31, 2020 [1]   473,401    
Balance at beginning of period at Dec. 31, 2020 $ 1,013,145   $ 538,778 $ 474,367
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Exercise of common stock options (in shares) [1]   7,361    
Exercise of common stock options 61,476   61,476  
Issuance of common stock under employee stock purchase plan (in shares) [1]   1,719    
Issuance of common stock under employee stock purchase plan 29,229   29,229  
Issuance of restricted stock, net of forfeitures and shares withheld for taxes (in shares) [1]   935    
Issuance of restricted stock, net of forfeitures and shares withheld for taxes (56,855)   (56,855)  
Issuance of restricted stock related to acquisition (in shares) [1]   25    
Issuance of restricted stock related to acquisition 1,816   1,816  
Stock-based compensation 340,733   340,733  
Net income 137,762     137,762
Balance at end of period (in shares) at Dec. 31, 2021 [1]   483,441    
Balance at end of period at Dec. 31, 2021 1,527,306   915,177 612,129
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Exercise of common stock options (in shares) [1]   4,497    
Exercise of common stock options 47,525   47,525  
Issuance of common stock under employee stock purchase plan (in shares) [1]   1,121    
Issuance of common stock under employee stock purchase plan 33,062   33,062  
Issuance of restricted stock, net of forfeitures and shares withheld for taxes (in shares) [1]   1,409    
Issuance of restricted stock, net of forfeitures and shares withheld for taxes (48,595)   (48,595)  
Stock-based compensation 502,656   502,656  
Net income 53,385     53,385
Balance at end of period (in shares) at Dec. 31, 2022 [1]   490,468    
Balance at end of period at Dec. 31, 2022 2,115,339   1,449,825 665,514
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Exercise of common stock options (in shares) [1]   5,232    
Exercise of common stock options 60,525   60,525  
Issuance of common stock under employee stock purchase plan (in shares) [1]   886    
Issuance of common stock under employee stock purchase plan 38,482   38,482  
Issuance of restricted stock, net of forfeitures and shares withheld for taxes (in shares) [1]   2,450    
Issuance of restricted stock, net of forfeitures and shares withheld for taxes (78,516)   (78,516)  
Stock-based compensation 496,949   496,949  
Repurchases of Class A common stock (in shares) [1]   (10,120)    
Repurchases of Class A common stock (647,500)     (647,500)
Net income 178,940     178,940
Balance at end of period (in shares) at Dec. 31, 2023 [1]   488,916    
Balance at end of period at Dec. 31, 2023 $ 2,164,219   $ 1,967,265 $ 196,954
[1]
Refer to Note 9—Capitalization for discussion of the Company’s two classes of common stock.
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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
OPERATING ACTIVITIES:      
Net income $ 178,940 $ 53,385 $ 137,762
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 80,418 54,425 42,219
Stock-based compensation 491,621 498,642 337,413
Deferred income taxes (61,597) (11,507) (16,777)
Noncash lease expense 48,955 44,115 40,315
Provision for expected credit losses on accounts receivable 2,960 3,203 1,456
Other (20,379) 622 5,803
Changes in operating assets and liabilities:      
Accounts receivable (554,012) (291,747) (444,342)
Prepaid expenses and other current and non-current assets (26,815) 50,655 1,648
Accounts payable 475,463 187,119 309,410
Accrued expenses and other current and non-current liabilities 35,681 8,168 7,596
Operating lease liabilities (52,913) (48,346) (43,990)
Net cash provided by operating activities 598,322 548,734 378,513
INVESTING ACTIVITIES:      
Purchases of investments (608,379) (553,295) (278,387)
Sales of investments 0 1,977 4,539
Maturities of investments 555,806 338,829 253,444
Purchases of property and equipment (46,790) (84,160) (54,804)
Capitalized software development costs (8,230) (7,725) (5,169)
Business acquisition 0 0 (13,261)
Net cash used in investing activities (107,593) (304,374) (93,638)
FINANCING ACTIVITIES:      
Repurchases of Class A common stock (646,597) 0 0
Payment of debt financing costs 0 0 (1,924)
Proceeds from exercise of stock options 60,525 47,525 61,476
Proceeds from employee stock purchase plan 38,482 33,062 29,229
Taxes paid related to net settlement of restricted stock awards (78,516) (48,595) (56,855)
Net cash provided by (used in) financing activities (626,106) 31,992 31,926
Increase (decrease) in cash and cash equivalents (135,377) 276,352 316,801
Cash and cash equivalents—Beginning of year 1,030,506 754,154 437,353
Cash and cash equivalents—End of year 895,129 1,030,506 754,154
SUPPLEMENTAL CASH FLOW INFORMATION:      
Cash paid for income taxes 151,899 4,211 3,608
Cash paid for interest 967 995 518
Cash paid for operating lease liabilities 63,256 57,862 52,974
Operating lease assets obtained in exchange for operating lease liabilities 27,237 29,881 25,356
Capitalized assets financed by accounts payable 4,684 2,166 5,907
Tenant improvements paid by lessor 0 1,453 0
Asset retirement obligation 1,076 438 1,705
Stock-based compensation included in capitalized software development costs $ 5,328 $ 4,014 $ 3,320
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Nature of Operations
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Nature of Operations
Note 1—Nature of Operations
The Trade Desk, Inc. (the “Company”) is a global technology company that empowers buyers of advertising. Through the Company’s self-service, cloud-based platform, ad buyers can create, manage and optimize more expressive data-driven digital advertising campaigns across ad formats and channels, including video (which includes connected television (“CTV”)), display, audio, digital-out-of-home, native and social, on a multitude of devices, such as computers, mobile devices, televisions and streaming devices. The Company’s platform integrations with major inventory, publisher and data partners provide ad buyers reach and decisioning capabilities, and the Company’s enterprise application programming interfaces (“APIs”) enable its clients to customize and expand platform functionality.
The Company is a Delaware corporation formed in November 2009 and headquartered in Ventura, California with offices in various cities in North America, Europe, Asia and Australia.
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Basis of Presentation and Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies
Note 2—Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the operations of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.
On June 16, 2021, the Company effected a ten-for-one stock split (the “Stock Split”) of the Company’s common stock in the form of a stock dividend. Each stockholder of record on June 9, 2021 received nine additional shares of common stock for each then-held share. Trading began on a stock split-adjusted basis on June 17, 2021. The number of shares subject to outstanding equity awards and the exercise prices of the outstanding stock option awards were also adjusted to reflect the effect of the Stock Split. All share and per share amounts presented herein have been retroactively adjusted to reflect the impact of the Stock Split.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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. Actual results could differ materially from these estimates.
Management regularly evaluates its estimates, primarily those related to: (1) revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, (2) allowances for credit losses, (3) operating lease assets and liabilities, including the incremental borrowing rate and terms and provisions of each lease (4) the useful lives of property and equipment and capitalized software development costs, (5) income taxes, (6) assumptions used in the option pricing models to determine the fair value of stock-based compensation and (7) the recognition and disclosure of contingent liabilities. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances; the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
As of December 31, 2023, the impacts to the Company’s business due to geopolitical developments and macroeconomic factors, such as changes in interest rates, inflation, foreign currency exchange rates, supply chain disruptions and economic growth continue to evolve. As a result, many of the Company’s estimates and assumptions, including the allowance for credit losses, consider macroeconomic factors in the market, which require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, the Company’s estimates may change materially in future periods.
Revenue Recognition
The Company generates revenue from clients who enter into agreements with the Company to use its platform to purchase advertising inventory, data and other add-on features. The Company charges its clients a platform fee, which is a
percentage of a client’s purchases through the platform. In addition, the Company invoices its clients for the cost of advertising inventory purchased, plus data and any add-on features purchased through the platform.
The Company determines revenue recognition through the following steps:
•Identification of a contract with a client;
•Identification of the performance obligations in the contract;
•Determination of the transaction price;
•Allocation of the transaction price to the performance obligations in the contract; and
•Recognition of revenue when or as the performance obligations are satisfied.
The Company maintains agreements with each client and supplier in the form of master service agreements (“MSAs”), which set out the terms of the relationship and access to the Company’s platform. The Company’s performance obligation is to provide the use of its platform to clients to develop ad campaigns and select the advertising inventory, data and other add-on features. The Company charges clients a platform fee, based on a percentage of a client’s purchases through the platform. The Company recognizes revenue for its platform fee at a point in time when a transaction is completed, which is when a bid is won and the client’s purchase occurs through the platform. The transaction price is determined based on the consideration the Company expects to be entitled in exchange for the completion of the transaction. The associated fees are generally not subject to refund or adjustment after a bid is won. Historically, any refunds and adjustments have not been material.
Generally, the Company reports revenue net of amounts it pays suppliers for the cost of advertising inventory, third-party data and other add-on features (collectively, “Supplier Features”). Judgment is required to determine whether the Company is the principal and reports revenue on a gross basis for Supplier Features or the agent and reports revenue on a net basis for the amount of platform fees charged to the client. The Company determined that it is not primarily responsible for the purchase of Supplier Features. Rather, the Company’s primary responsibility is to provide the platform that enables clients to bid on advertising inventory and use data and other add-on features in designing and executing their campaigns. The Company does not control the Supplier Features prior to the purchase by the client, and it does not have pricing latitude with respect to the cost of such features. The platform fee the Company charges clients is a percentage of their purchases through its platform, similar to a commission, and the platform fee is not contingent on the results of an advertising campaign. Based on these and other factors, the Company determined that it is not the principal in the purchase and sale of Supplier Features and, therefore, reports revenue on a net basis for the platform fees charged to clients.
From time to time, the Company may enter into agreements with data suppliers where the purchased data is used to inform and improve the platform, generally at no additional charge to customers outside of the standard fees. Costs associated with this data (“data-related costs”) are recorded in platform operations expense.
The Company generally bills clients for the gross amount of Supplier Features they purchase through its platform and the platform fees (“Gross Billings”), net of allowances. When clients have direct payment relationships with advertising inventory suppliers, the Company bills these clients only for third-party data, other add-on features and its platform fees. The Company invoices its clients monthly for the purchases occurring during the month. Typically, invoice payment terms are between 30 to 90 days. However, certain agency clients have sequential liability terms where payment is not due to the Company until the agency has received payment from its advertiser clients. Accounts receivable is recorded based on Gross Billings, which are the amounts the Company is responsible to collect. Accounts payable is recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis.
Refer to Note 12—Segment and Geographic Information for geographic information related to Gross Billings.
Operating Expenses
The Company classifies its operating expenses into four categories and allocates overhead such as information technology infrastructure, rent, office support and occupancy charges based on headcount for all these categories:
Platform Operations. Platform operations expense consists of expenses related to hosting the Company’s platform, which includes “internet traffic” associated with the viewing of available impressions or queries per second (“QPS”), purchasing data used to inform and improve the platform and providing support to clients. Platform operations
expense includes hosting costs, personnel costs, data-related costs and amortization of acquired technology and capitalized software costs for platform development. Personnel costs include salaries, bonuses, stock-based compensation and employee benefit costs attributable to personnel who support the platform and provide clients with platform support. The Company capitalizes certain costs associated with platform development in other assets, non-current on its consolidated balance sheet and amortizes these costs into platform operations expense over their estimated useful lives.
Sales and Marketing. Sales and marketing expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and commission costs, for the Company’s sales and marketing personnel. Sales and marketing expense also includes costs for market development programs, marketing events, advertising and promotional and other marketing activities. Commissions costs are expensed as incurred.
Technology and Development. The Company’s technology and development expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs, as well as third-party consultant costs associated with the ongoing development of the Company’s platform and integrations with advertising and data inventory suppliers. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with software development that qualifies for capitalization, which are then recorded as capitalized software development costs included in other assets, non-current on the Company’s consolidated balance sheet. The Company amortizes capitalized software development costs relating to the Company’s platform to platform operations expense.
General and Administrative. The Company’s general and administrative expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs associated with the Company’s executive, finance, legal, human resources, compliance and other administrative personnel, as well as accounting and legal professional services fees and credit loss expense. Stock-based compensation in general and administrative expenses also includes expense related to the CEO Performance Option, which was granted in 2021.
Stock-Based Compensation
Stock-based compensation expense related to stock options, restricted stock awards and units (collectively, “restricted stock”) and awards granted under the Company’s employee stock purchase plan (“ESPP”) is measured and recognized in the consolidated financial statements based on the fair value of the awards granted.
The fair values of the ESPP and stock option awards are estimated on the grant date using the Black-Scholes option-pricing model, except for the CEO Performance Option, granted in 2021, that was estimated using the Monte Carlo valuation model. The fair value of restricted stock is calculated using the closing market price of the Company’s common stock on the date of grant. Determining the fair value of stock options and ESPP awards requires judgment. The Company’s use of the valuation models requires the input of subjective assumptions. The assumptions used in the Company’s valuation models represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. The Company will continue to use judgment in evaluating the assumptions related to its stock-based compensation.
These assumptions and estimates are as follows:
Risk-Free Interest Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities approximating the expected term of the awards.
Expected Term. For stock options, given the insufficient historical data relating to stock option exercises, the Company applies the simplified approach in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award. For ESPP awards, the expected term is the time period from the grant date to the respective purchase dates included within each offering period.
Volatility. Prior to 2020, the Company determined the price volatility based on a blend of the historical volatilities of a publicly traded peer group, implied volatilities from its traded options, and its historical volatility, based on daily price observations over a period equivalent to the expected term of the award. During 2020, the Company eliminated the peer group from this analysis and began to determine its price volatility based on a blend of historical and implied volatilities.
Dividend Yield. The dividend yield assumption is based on the Company’s history and current expectations of dividend payouts. The Company has never declared or paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future, so the Company used an expected dividend yield of zero.
Derived Service Period. The stock-compensation expense attribution period for the CEO Performance Option, which was granted in 2021, was developed based on a Monte Carlo simulation of daily stock prices over the performance period.
The ESPP and the CEO Performance Option have a six-month and a one-year holding period with respect to the sale or transfer of purchased or vested common shares, respectively. Due to the holding period, the Company applies a discount to reflect the non-transferability of the shares for the ESPP and the CEO Performance Option.
Stock-based compensation expense related to stock options and restricted stock is recognized on a straight-line basis over the requisite service periods of the awards, which is generally four years. Stock-based compensation for the CEO Performance Option is recognized on a graded-vesting basis over a derived service period of approximately five years but may be accelerated if the vesting criteria are met prior to the estimated performance period. Stock-based compensation expense for ESPP awards is recognized on a graded-vesting attribution basis over the requisite service period of each award. The Company accounts for forfeitures as they occur.
Income Taxes
Deferred income tax assets and liabilities are determined based upon the net tax effects of the differences between the Company’s consolidated financial statements carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. A valuation allowance is used to reduce some or all of the deferred tax assets if, based upon the weight of available evidence, it is more likely than not that those deferred tax assets will not be realized.
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 related to its uncertain tax positions in its income tax provision in the accompanying consolidated statements of operations.
The Company makes assumptions, judgments and estimates to determine the current income tax provision, tax benefits from uncertain tax positions, deferred tax asset and liabilities and valuation allowance recorded against a deferred tax asset.
The assumptions, judgments and estimates relative to the current income tax provision (benefit) take into account current tax laws, their interpretation and possible results of foreign and domestic tax audits. Changes in tax law, and their interpretation, could significantly impact the income taxes provided in the Company’s consolidated financial statements.
The evaluation of the Company’s uncertain tax positions involves significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws, and matters related to the allocation of international taxation rights between countries. Although management believes the Company’s reserves are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in the Company’s reserves. Reserves are adjusted considering changing facts and circumstances, such as the closing of a tax examination or the refinement of an estimate.
Assumptions, judgments and estimates relative to the amount of deferred income taxes, and any applicable valuation allowances, take into account future taxable income. Any of the assumptions, judgments and estimates mentioned above could cause the actual income tax obligations to differ from estimates.
Earnings Per Share
Basic earnings per share is calculated by dividing net income by the weighted-average number of common stock shares outstanding. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common stock shares outstanding adjusted for the potentially dilutive impact of stock options, restricted stock and ESPP using the two-class method required for participating securities. Restricted stock awards are considered to be participating securities due to their non-forfeitable dividend rights.
Cash, Cash Equivalents and Marketable Securities
The Company classifies all investments that are readily convertible to known amounts of cash and have maturities of three months or less from the date of purchase as cash equivalents, which consist primarily of money market funds and commercial paper and those with stated maturities of greater than three months as marketable securities, which primarily consist of corporate debt securities and U.S. government and agency securities. Investments in marketable securities with maturities beyond one year are also classified as short-term available-for-sale securities based on their highly liquid nature and because they are available for current operations.
Cash equivalents and marketable securities are carried at fair value. Realized gains and losses are recognized in other expense (income), net on the consolidated statement of operations. Unrealized gains and losses, net of taxes, are included in stockholders' equity. The Company uses Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Accounting Standards Codification (“ASC”) 326 or “CECL”), to assess the investment portfolio for impairment at the individual security level and evaluates all securities in an unrealized loss position to determine if the impairment is credit related (resulting in realized credit loss, recorded in earnings) or non-credit related (resulting in an unrealized loss, recorded in stockholders' equity). The Company has not recorded any impairment charges for unrealized losses in the periods presented. Credit losses recorded in the statements of operations for the years ended 2023, 2022 and 2021 were not material.
Refer to Note 6—Cash, Cash Equivalents and Short-Term Investments, Net for additional information regarding the fair value of cash equivalents and marketable securities.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are recorded at the invoiced amount, are unsecured and do not bear interest. The Company performs ongoing credit evaluations of its clients and certain advertisers when the Company’s agreements with its clients contain sequential liability terms such that client payments are not due to the Company until the client has received payment from its clients who are advertisers. The Company maintains an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense on the consolidated statements of operations.
The Company applies ASC 326 to assess the allowance for credit losses. ASC 326 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The Company’s impairment model utilizes an expected loss methodology in place of an incurred loss methodology related to its marketable securities and the related allowance for credit losses. Industry-specific default rates are applied to receivables subject to sequential liability or receivables for which the Company is engaged with the advertiser directly.
For the years ended December 31, 2023 and 2022, the Company’s assessment considered business and market disruptions caused by macroeconomic factors, such as changes in interest rates, inflation, foreign currency exchange rates, economic growth, supply chain disruptions and the COVID-19 pandemic, and estimates of credit defaults by industry. The Company continues to monitor the financial implications of these macroeconomic factors on expected credit losses by reviewing the allowance for credit losses on a quarterly basis. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered.
The following table presents changes in the accounts receivable allowance for credit losses (in thousands):
Year Ended December 31,
202320222021
Beginning balance$10,477 $7,374 $7,253 
Add: provision for expected credit losses
2,960 3,203 1,456 
Less: write-offs, net of recoveries(611)(100)(1,335)
Ending balance$12,826 $10,477 $7,374 
Property and Equipment, Net
Property and equipment are recorded at historical cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method based upon the following estimated useful lives:
Years
Computer and networking equipment
2 – 3
Purchased software
3 – 5
Furniture, fixtures and office equipment5
Leasehold improvements*
____________
*Leasehold improvements are amortized on a straight-line basis over the term of the lease, or the useful life of the assets, whichever is shorter.
Repair and maintenance costs are charged to expense as incurred, while improvements are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s operating results.
Capitalized Software Development Costs
The Company capitalizes certain costs associated with creating and enhancing internally developed software related to the Company’s technology infrastructure. These costs include personnel and benefit-related expenses for employees who are directly associated with and devote time to software development projects, and external direct costs of materials and services consumed in developing or obtaining the software. Software development costs that do not qualify for capitalization, as further discussed below, are expensed as incurred and recorded in technology and development expense in the consolidated statements of operations.
Software development activities typically consist of three stages: (1) the planning phase; (2) the application and infrastructure development stage; and (3) the post-implementation stage. Costs incurred in the planning and post implementation phases, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed when the preliminary project stage is completed, management implicitly or explicitly authorizes and commits to funding the project and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development phases, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software is ready for its intended purpose. Software development costs are amortized to platform operations expense using a straight-line method over the estimated useful life of two years, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived.
The Company does not transfer ownership of its internally developed software, or lease its software, to third parties.
Cloud computing arrangements (“CCAs”), such as software as a service and other hosting arrangements, are evaluated for capitalized implementation costs in a similar manner as capitalized software development costs. If a CCA includes a software license, the software license element of the arrangement is accounted for in a manner consistent with the acquisition of other software licenses. If a CCA does not include a software license, the service element of the arrangement is accounted for as a service contract. The Company capitalized certain implementation costs for its CCAs that are service contracts, which are included in other assets, non-current. The Company amortizes capitalized implementation costs in a CCA over the life of the service contract. The Company capitalized $4 million of CCA implementation costs in 2023 and $2 million of CCA implementation costs in 2022. Amortization expense was $2 million, $2 million and $1 million for 2023, 2022 and 2021, respectively.
Operating Leases
The Company enters into operating leases for its offices, which have lease terms of up to 10 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year with proper notification. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company does not have finance leases.
The Company determines if an arrangement is, or contains, a lease at inception. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right.
Operating lease assets and liabilities are initially recorded based on the present value of lease payments over the lease term, which includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate, based on the information available at the lease commencement date in determining the present value of its expected lease payments. Operating lease assets also include any initial direct costs and any lease payments made prior to the lease commencement date and are reduced by any lease incentives received. The Company has elected to not separate lease and non-lease components.
Operating lease assets are amortized on a straight-line basis in operating lease expense over the lease term on the consolidated statements of operations. The related amortization, referred to as noncash lease expense, along with the change in the operating lease liabilities are separately presented within the cash flows from operating activities on the consolidated statements of cash flows. The Company records lease expense for operating leases, some of which have escalating rent payments, on a straight-line basis over the lease term.
Certain leases contain provisions for property-related costs that are variable in nature for which the Company is responsible, including common area maintenance and other property operating services. These costs are calculated based on a variety of factors including property values, tax and utility rates, property services fees and other factors.
Refer to Note 8—Leases for additional information.
Fair Value of Financial Instruments
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. Fair value measurements are based on a fair value hierarchy, based on three levels of inputs, of which the first two are considered observable and the last unobservable, which are the following:
Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted market prices for similar assets and 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 asset or liability.
Level 3—Unobservable inputs.
Observable inputs are based on market data obtained from independent sources.
The carrying amounts of accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair value due to the short-term nature of these instruments. The carrying value of the line of credit approximates fair value based on borrowing rates currently available to the Company for financing with similar terms and were determined to be Level 2.
Certain long-lived assets including capitalized software development costs are also subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review. To date, no material impairments have been recorded on those assets.
Concentration of Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, short-term investments and accounts receivable. The Company maintains its cash and cash equivalents with financial institutions, and its cash levels exceed the Federal Deposit Insurance Corporation federally
insured limits. Short-term investments consist of investments in U.S. government securities, U.S. government agency securities, and high-credit quality corporate debt securities and commercial paper.
If all of the Company’s individual client contractual relationships were aggregated at the holding company level, one holding company would represent more than 10% of Gross Billings in 2023 and 2022, and two holding companies would each represent more than 10% of Gross Billings in 2021. In 2023, one holding company accounted for 12% of Gross Billings. In 2022, one holding company accounted for 11% of Gross Billings. In 2021, two holding companies accounted for 11% and 10% of Gross Billings, respectively. The Company generally does not have contractual relationships with holding companies. Rather, in most cases, the Company enters into separate contracts and billing relationships with various of their individual agencies and account for those agencies as separate clients.
As of December 31, 2023, two clients each accounted for at least 10%, and collectively accounted for 31%, of consolidated accounts receivable. As of December 31, 2022, four clients each accounted for at least 10%, and collectively accounted for 49%, of consolidated accounts receivable.
As of December 31, 2023, two suppliers each accounted for at least 10%, and collectively accounted for 31%, of consolidated accounts payable. As of December 31, 2022, two suppliers each accounted for at least 10% and collectively accounted for 25% of consolidated accounts payable.
Foreign Currency Transactions
The Company’s reporting currency is the U.S. Dollar, and the functional currency of each of the Company’s subsidiaries is the U.S. Dollar. Transactions in foreign currencies are translated into U.S. Dollars at the rates of exchange in effect at the date of the transaction. Net transaction gains or losses are included in foreign currency exchange loss (gain), net in the accompanying consolidated statements of operations.
The Company enters into forward contracts to hedge foreign currency exposures related primarily to the Company’s foreign currency denominated accounts receivable. The Company does not designate the foreign exchange forward contracts as hedges for accounting purposes and changes in the fair value of the foreign exchange forward contracts are recorded in foreign currency exchange loss (gain), net in the accompanying consolidated statements of operations. The Company’s forward contracts generally have terms of 30-60 days. As of December 31, 2023, and 2022, the Company had open forward contracts with aggregate notional amounts of $263 million and $142 million, respectively. The fair value of the open forward contracts was not material.
Business Combinations
The results of a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business are generally recorded at their estimated fair values on the acquisition date, which may require management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates and selection of comparable companies. The Company engages valuation specialists to assist in determining the fair values of these acquired assets and liabilities. Any excess consideration over the fair value of these acquired assets and liabilities assumed is recognized as goodwill.
In July 2021, the Company acquired all of the equity interests of a technology company for a GAAP purchase price of $18 million, subject to purchase price adjustments. The purchase consideration was primarily attributable to non-deductible goodwill of $11 million, with the remainder allocated to acquired technology and other assets. No other acquisitions occurred in 2023, 2022 or 2021.
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which adds requirements to report significant expenses, requirements for entities with a single reportable segment to provide all disclosures otherwise required under Topic 280 and requirements to report segment information on an interim basis, among other clarifications and requirements. This guidance will be effective on a retrospective basis for annual periods beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and interim periods beginning with the Company’s Quarterly Report Form 10-Q for the fiscal quarter ended March 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and notes.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires greater disaggregation of information and consistent categories in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective on a prospective basis, with an option to apply it retrospectively, for annual periods beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and notes.
v3.24.0.1
Earnings Per Share
 12 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Earnings Per Share
Note 3—Earnings Per Share
The Company has two classes of common stock, Class A and Class B. Basic and diluted earnings per share (“EPS”) attributable to common stockholders for Class A and Class B common stock were the same because they were entitled to the same liquidation and dividend rights.
The computation of basic and diluted EPS is as follows (in thousands, except per share amounts):
Year Ended December 31,
202320222021
Numerator:
Net income$178,940 $53,385 $137,762 
Denominator:
Weighted-average shares outstanding—basic489,261 486,937 476,851 
Effect of dilutive securities10,921 12,988 21,689 
Weighted-average shares outstanding—diluted500,182 499,925 498,540 
Basic earnings per share$0.37 $0.11 $0.29 
Diluted earnings per share$0.36 $0.11 $0.28 
Anti-dilutive equity awards under stock-based award plans excluded from the determination of diluted earnings per share5,580 10,707 1,699 
v3.24.0.1
Property and Equipment, Net
 12 Months Ended
Dec. 31, 2023
Property, Plant and Equipment [Abstract]  
Property and Equipment, Net
Note 4—Property and Equipment, Net
Major classes of property and equipment were as follows (in thousands):
As of December 31,
20232022
Computer and networking equipment
$145,424 $113,053 
Purchased software10,424 10,451 
Furniture and fixtures25,632 23,545 
Construction in progress (1)
8,487 10,904 
Leasehold improvements129,992 121,700 
319,959 279,653 
Less: Accumulated depreciation(158,537)(105,894)
$161,422 $173,759 
____________
(1)
Includes leasehold improvement projects that are not yet ready for intended use.
Depreciation expense for 2023, 2022 and 2021 was $62 million, $42 million and $34 million, respectively. For the years ended December 31, 2023, 2022 and 2021 there were no material impairment charges to property and equipment.
v3.24.0.1
Capitalized Software Development Costs
 12 Months Ended
Dec. 31, 2023
Research and Development [Abstract]  
Capitalized Software Development Costs
Note 5—Capitalized Software Development Costs
Capitalized software development costs, included in other assets, non-current, were as follows (in thousands):
As of December 31,
20232022
Capitalized software development costs, gross$32,333 $24,829 
Less: Accumulated amortization(15,432)(6,285)
Capitalized software development costs, net$16,901 $18,544 
Amortization expense was $14 million, $7 million and $5 million for 2023, 2022 and 2021, respectively. For the years ended December 31, 2023, 2022 and 2021 there were no material impairment charges to capitalized software development costs.
v3.24.0.1
Cash, Cash Equivalents and Short-Term Investments, Net
 12 Months Ended
Dec. 31, 2023
Cash, Cash Equivalents, and Short-Term Investments [Abstract]  
Cash, Cash Equivalents and Short-Term Investments, Net
Note 6—Cash, Cash Equivalents and Short-Term Investments, Net
Cash, cash equivalents and short-term investments in marketable securities were as follows (in thousands):
As of December 31, 2023
Cash and
Cash
Equivalents		Short-Term
Investments, Net		Total
Cash$289,512 — $289,512 
Level 1:   
Money market funds560,673 — 560,673 
Level 2:   
Commercial paper36,013 168,224 204,237 
Corporate debt securities— 185,465 185,465 
U.S. government and agency securities8,931 131,470 140,401 
Total$895,129 $485,159 $1,380,288 
As of December 31, 2022
Cash and
Cash
Equivalents		Short-Term
Investments, Net		Total
Cash$339,717 — $339,717 
Level 1:   
Money market funds640,233 — 640,233 
Level 2:   
Commercial paper50,556 126,507 177,063 
Corporate debt securities— 180,502 180,502 
U.S. government and agency securities— 109,071 109,071 
Total$1,030,506 $416,080 $1,446,586 
The Company’s gross unrealized gains or losses from its short-term investments, recorded at fair value, for the years ended December 31, 2023, 2022 and 2021 were immaterial.
The contractual maturities of the Company’s short-term investments are as follows (in thousands):
December 31, 2023
Due in one year$439,486 
Due in one to two years45,673 
Total$485,159 
v3.24.0.1
Debt
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Debt
Note 7—Debt
Credit Facility
On June 15, 2021, the Company and a syndicate of banks, led by JPMorgan Chase Bank, N.A., as agent, entered into a Loan and Security Agreement (the “Credit Facility”). The Credit Facility consists of a $450 million revolving loan facility, with a $20 million sublimit for swingline borrowings and a $15 million sublimit for the issuance of letters of credit. Under certain circumstances, the Company has the right to increase the Credit Facility by an amount not to exceed $300 million. The Credit Facility is collateralized by substantially all of the Company’s assets, including a pledge of certain of its accounts receivable, deposit accounts, intellectual property, investment property, and equipment.
On December 17, 2021, the Company amended the Credit Facility to expand the process for issuing letters of credit and the related invoicing, particularly with respect to letters of credit not denominated in U.S. Dollars. On February 9, 2023, the Company further amended its Credit Facility (as amended, the “Amended Credit Facility”) to transition from a variable interest rate based on the London Interbank Offered Rate to a variable interest rate based on the secured overnight financing rate (“SOFR”).
Loans under the Amended Credit Facility bear interest at a rate equal to, at the Company’s option, an annual rate of either a Base Rate or an adjusted term SOFR rate (defined as SOFR for a specified term plus a credit spread adjustment of 10 basis points, subject to a 0% floor), plus an applicable margin (“Base Rate Borrowings” and “Term SOFR Borrowings”). The Base Rate is defined as a rate per annum for any day equal to the greatest of (1) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (2) the New York Federal Reserve Bank Rate in effect on such day plus half of 1% and (3) the adjusted term SOFR rate for a one-month interest period on such day plus 1%. The applicable margin is between 0.25% to 1.25% for Base Rate Borrowings and between 1.25% and 2.25% for Term SOFR Borrowings based on the Company maintaining certain leverage ratios. The fee for undrawn amounts under the Amended Credit Facility ranges, based on the applicable leverage, from 0.200% to 0.350%. The Company is also required to pay customary letter of credit fees, as necessary.
As of December 31, 2023, the Company did not have an outstanding debt balance under the Amended Credit Facility. Availability under the Amended Credit Facility was $445 million as of December 31, 2023, which is net of outstanding letters of credit of $5 million. The Amended Credit Facility matures, and all outstanding amounts become due and payable, on June 15, 2026.
The Amended Credit Facility contains customary conditions to borrowings, events of default and covenants, including covenants that restrict the Company’s ability to sell assets, make changes to the nature of the Company’s business, engage in mergers or acquisitions, incur, assume or permit to exist additional indebtedness and guarantees, create or permit to exist liens, pay dividends, issue equity instruments, make distributions or redeem or repurchase capital stock or make other investments, engage in transactions with affiliates and make payments in respect of subordinated debt. The Amended Credit Facility also requires the Company to maintain compliance with a maximum ratio of consolidated funded debt to consolidated EBITDA of 3.50 to 1.00. As of December 31, 2023, the Company was in compliance with all covenants.
v3.24.0.1
Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases
Note 8—Leases
The components of lease expense were as follows (in thousands):
Year Ended December 31,
202320222021
Operating lease cost$48,866 $51,918 $50,798 
Short-term lease cost1,898 1,668 969 
Variable lease cost12,901 9,140 6,742 
Sublease income(2,208)(2,490)(2,734)
Total lease cost$61,457 $60,236 $55,775 
Supplemental information related to leases were as follows:
Year Ended December 31,
20232022
Weighted-average remaining lease term5.2 years6.1 years
Weighted-average discount rate3.6 %3.1 %
Maturities of lease commitments as of December 31, 2023 were as follows (in thousands):
YearAmount
2024$62,412 
202559,141 
202656,200 
202748,503 
202844,059 
Thereafter51,173 
Total undiscounted lease commitments321,488 
Less: commitments for leases not yet commenced(63,340)
Less: interest(22,255)
Present value of lease liabilities235,893 
Less: operating lease liabilities, current(55,524)
Operating lease liabilities, non-current$180,369 
v3.24.0.1
Capitalization
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Capitalization
Note 9—Capitalization
The Class A and Class B common stock have the same rights and preferences including rights to dividends, except the Class B is entitled to ten votes per share and the Class A is entitled to one vote per share. Each share of Class B common stock is convertible into one share of Class A common stock at any time at the option of the holder. In addition, 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 Company’s restated certificate of incorporation, including, without limitation, certain transfers for tax and estate planning purposes. The Company’s certificate of incorporation provides that all Class B common stock will convert automatically into Class A common stock on December 22, 2025 unless converted prior to such date.
The Company’s board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of each series of preferred stock.
In February 2023, the Company’s board of directors approved a share repurchase program with authorization to purchase up to $700 million of its Class A common stock. The share repurchase program, which has no expiration date, is
designed to help offset the impact of future share dilution from employee stock issuances. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at the Company’s discretion, depending on market conditions and corporate needs. Open market repurchases are structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. This program does not obligate the Company to acquire any particular amount of Class A common stock, and may be modified, suspended or terminated at any time at the discretion of the Company’s board of directors.
During the year ended December 31, 2023, the Company repurchased and subsequently retired 10 million shares of its Class A common stock for an aggregate repurchase amount of $648 million, which included an immaterial amount related to the 1% excise tax on net share repurchases as a result of the Inflation Reduction Act of 2022 (“IRA”). As of December 31, 2023, $53 million remained available and authorized for repurchases. Activity under the share repurchase program was recognized in the consolidated financial statements on a trade-date basis. In February 2024, an additional $647 million was authorized under this program, bringing the total amount for future repurchases back to $700 million.
v3.24.0.1
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Stock-Based Compensation Expense
Stock-based compensation expense recorded in the consolidated statements of operations was as follows (in thousands):
Year Ended December 31,
202320222021
Platform operations$21,048 $18,285 $15,913 
Sales and marketing75,924 64,442 50,671 
Technology and development120,823 94,822 57,791 
General and administrative273,826 321,093 213,038 
Total$491,621 $498,642 $337,413 
On September 30, 2023, David R. Pickles stepped down as the Company’s Chief Technology Officer and from the Company’s board of directors. As a result, Mr. Pickles and the Company mutually agreed to cancel his unvested stock options and restricted stock without payment or replacement, resulting in the recognition of $14 million in incremental stock-based compensation expense, which is included in technology and development expense for the year ended December 31, 2023. No amount of stock-based compensation expense for these cancelled options and restricted stock remains unamortized.
For the years ended December 31, 2023, 2022 and 2021, the Company recognized tax benefits on total stock-based compensation expense, which are reflected in the provision for (benefit from) income taxes in the consolidated statements of operations, of $53 million, $48 million and $104 million, respectively. For the years ended December 31, 2023, 2022 and 2021, the tax benefit realized related to restricted stock vested and stock options exercised during the period was $91 million, $72 million and $121 million, respectively.
Stock-Based Award Plans
The Company is authorized to issue stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based and cash-based awards under its 2016 Incentive Award Plan. As of December 31, 2023, 81.2 million shares remained available for grant under the Company’s 2016 Incentive Award Plan. The number of shares authorized for grant is subject to increase each year on January 1, equal to the lesser of (a) 4% of the common stock outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the board of directors. On January 1, 2024, the number of shares authorized for grant under the Company’s 2016 Incentive Award Plan was increased by 19.6 million shares in accordance with plan provisions.
Stock Options
Stock options granted under the Company’s stock incentive plans generally vest over four years, subject to the holder’s continued service through the vesting date and expire no later than 10 years from the date of grant.
The following summarizes stock option activity:
 
Shares
Under Options
(in thousands)
Weighted-
Average
Exercise Price
Weighted-
Average
Contractual
Life (years)
Aggregate
Intrinsic Value
(in thousands)
Outstanding as of December 31, 2022
15,418 $19.82 
Granted2,891 62.77 
Exercised(5,232)11.49 
Expired/Forfeited/Cancelled
(819)56.63 
Outstanding as of December 31, 2023
12,258 $31.05 6.0$507,343 
Exercisable as of December 31, 2023
9,029 $19.96 5.0$472,019 
The fair value of options on the date of grant was estimated based on the Black-Scholes option pricing model. The weighted-average assumptions used to value options granted to employees for the periods presented were as follows:
Year Ended December 31,
202320222021
Expected term (years)6.06.06.0
Expected volatility64.4 %66.5 %64.3 %
Risk-free interest rate3.71 %2.91 %1.04 %
Estimated dividend yield— %— %— %
The weighted-average grant date fair value per share of stock options granted for the years ended December 31, 2023, 2022 and 2021 and were $38.69, $37.65 and $43.57, respectively. The total intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021 were $276 million, $232 million and $538 million, respectively.
At December 31, 2023, the Company had unrecognized stock-based compensation relating to stock options of approximately $120 million, which is expected to be recognized over a weighted-average period of 2.8 years.
CEO Performance Option
In October 2021, the Company granted a market-based performance award to the Company’s Chief Executive Officer (the “CEO Performance Option”) under the Company’s 2016 Incentive Award Plan. If specified target goals for the per share price of the Company’s Class A common stock (ranging from $90.00 to $340.00 per share) and certain other vesting conditions are satisfied, including the CEO’s continued service, the CEO may purchase up to a target amount of 16 million shares of Class A common stock, subject to adjustment as discussed in the following sentence, to be earned in eight equal tranches over a maximum term of 10 years. These target shares are subject to decrease or increase by up to 20% for each tranche based on the relative total shareholder return (“TSR”) of the Company’s Class A common stock as compared to the TSR of the Nasdaq-100 Index at each vesting tranche, for a maximum of 19.2 million shares. The CEO Performance Option has an exercise price of $68.29 per share and a grant-date fair value of approximately $819 million, which is expected to be expensed on a graded-vesting basis over a derived service period of approximately five years but may be accelerated if the vesting criteria are met prior to the estimated performance period.
The grant-date fair value was estimated based on a Monte Carlo valuation model using the following assumptions:
Expected volatility63.4 %
Risk-free interest rate1.55 %
Estimated dividend yield— %
The CEO Performance Option has a one-year holding period with respect to the sale or transfer of vested shares, with the exception that shares may be transferred during the holding period to cover withholding tax obligations in connection with such exercise and transfers to the CEO’s immediate family for estate planning purposes or in connection with charitable or philanthropic activities. Due to the holding period, the Company applies a discount to reflect the non-transferability of the shares.
At December 31, 2022, the CEO Performance Option had outstanding options of 19.2 million. No options were exercised, forfeited or expired during the fiscal year ended December 31, 2023. At December 31, 2023, the CEO Performance Option had outstanding options of 19.2 million with an aggregate intrinsic value of $70 million and a weighted-average contractual life of 7.8 years. At December 31, 2023, the CEO Performance Option had 2.4 million exercisable options with an aggregate intrinsic value of $9 million and a weighted-average contractual life of 7.8 years.
On December 10, 2021, the expense related to the first tranche of the award was accelerated due to early stock price achievement. Stock-based compensation expense of $158 million for the CEO Performance Option, including the accelerated tranche, was recorded as a component of general and administrative expense in the fourth quarter of 2021. No such acceleration occurred during the years ended December 31, 2023 and 2022. Stock-based compensation expense of $198 million and $262 million for the CEO Performance Option was recorded as a component of general and administrative expense during the years ended December 31, 2023 and 2022, respectively. At December 31, 2023, the Company had unrecognized stock-based compensation relating to the CEO Performance Option of $201 million that is expected to be recognized over a weighted-average period of 1.6 years, assuming no acceleration of vesting.
Restricted Stock
Restricted stock awards generally vest over four years, subject to the holder’s continued service through the vesting date. The following summarizes restricted stock activity:
Shares
(in thousands)
Weighted-
Average
Grant Date
Fair Value
Per Share
Unvested as of December 31, 2022
8,747 $57.41 
Granted6,898 63.81 
Vested(3,575)55.01 
Forfeited/Cancelled
(1,524)58.74 
Unvested as of December 31, 2023
10,546 $62.22 
At December 31, 2023, the Company had unrecognized stock-based compensation relating to restricted stock of approximately $605 million, which is expected to be recognized over a weighted-average period of 2.9 years.
Employee Stock Purchase Plan
In September 2016, the Company established an ESPP with 8.0 million shares of Class A common stock available for issuance. As of December 31, 2023, 14.4 million shares remained available for grant under this plan. The number of shares authorized for grant is subject to increase each year on January 1, equal to the lesser of (a) 8.0 million shares, (b) 1% of the Class A common stock outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year, and (c) such smaller number of shares as determined by the Company’s board of directors. On January 1, 2024, the number of shares available for issuance under the Company’s ESPP increased by 4.4 million shares in accordance with plan provisions.
Under the ESPP, all eligible employees are permitted to contribute up to 100% of their compensation, generally through payroll deductions, to purchase shares of Class A common stock, subject to applicable ESPP and statutory limits. The ESPP provides for offering periods generally up to two years, with purchases occurring and new offering periods commencing generally every six months. ESPP purchases generally occur on May 15th and November 15th each year. At each purchase date, employees are able to purchase shares at 85% of the lower of (1) the closing market price per share of Class A common stock on the employee’s enrollment into the applicable offering period and (2) the closing market price per share of Class A common stock on the purchase date. The ESPP has an automatic reset feature, whereby the offering
period resets if the fair value of the Company’s common stock on a purchase date is less than that on the original offering date.
The fair value of ESPP shares was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:
Year Ended December 31,
202320222021
Expected term (years)0.91.00.6
Expected volatility60.3 %74.1 %62.3 %
Risk-free interest rate4.95 %2.53 %0.09 %
Estimated dividend yield— %— %— %
The ESPP has a six-month holding period with respect to common stock purchases. Due to the holding period, the Company applies a discount to reflect the non-transferability of the shares. Stock-based compensation expense related to ESPP was $24 million, $50 million and $62 million for the years ended December 31, 2023, 2022 and 2021, respectively. At December 31, 2023, the Company had unrecognized stock-based compensation relating to ESPP awards of approximately $12 million, which is expected to be recognized over a weighted-average period of 0.7 years.
v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
Note 11—Income Taxes
The following are the domestic and foreign components of the Company’s income before income taxes (in thousands):
Year Ended December 31,
202320222021
Domestic$328,853 $169,891 $193,048 
Foreign(60,858)(42,521)(71,012)
Income before income taxes$267,995 $127,370 $122,036 
The following are the components of the provision for (benefit from) income taxes (in thousands):
Year Ended December 31,
202320222021
Current:   
Federal$120,049 $61,904 $10,332 
State and local24,827 34,797 (10,417)
Foreign5,000 3,068 2,435 
Total current provision149,876 99,769 2,350 
Deferred:   
Federal(51,822)(2,380)(21,287)
State and local(7,842)(23,465)3,193 
Foreign(1,157)61 18 
Total deferred provision(60,821)(25,784)(18,076)
Total provision for (benefit from) income taxes$89,055 $73,985 $(15,726)
A reconciliation of the statutory tax rate to the effective tax rate for the periods presented is as follows:
Year Ended December 31,
202320222021
U.S. federal statutory income tax rate21.0 %21.0 %21.0 %
State and local income taxes, net of federal benefit5.0 7.0 (5.3)
Foreign income at other than U.S. rates (1)
6.2 9.5 14.2 
Stock-based compensation8.3 31.0 (29.9)
Meals and entertainment1.0 0.4 0.2 
Nondeductible compensation0.3 1.6 1.7 
Research and development credit(8.7)(11.8)(15.3)
Other permanent items0.1 (0.6)0.5 
Effective income tax rate33.2 %58.1 %(12.9)%
____________
(1)
For the years ended December 31, 2023, 2022, and 2021, includes the impact of the valuation allowance associated with the United Kingdom (“U.K.”). For additional information, see discussion below.
Set forth below are the tax effects of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities (in thousands):
As of December 31,
20232022
Reserves and allowances$8,401 $5,428 
Accrued expenses12,217 7,466 
Net operating losses231,597 182,124 
Research and development tax credit18,220 17,359 
Stock-based compensation25,727 21,207 
Prepaid expenses(944)(1,122)
Property and equipment(27,952)(29,020)
Intangibles (1)
180,573 200,113 
Capitalized software development costs112,736 61,670 
Operating lease assets(39,826)(45,493)
Operating lease liabilities48,153 54,657 
Other1,776 1,258 
Valuation allowance(415,829)(381,619)
Total deferred tax assets, net$154,849 $94,028 
____________
(1)
As of December 31, 2023 and 2022, includes intangibles associated with international restructuring, net of amortization, offset by a reserve for uncertain tax position. See discussion below.
As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. During 2023, management recorded an additional $34 million to maintain a full valuation allowance against its U.K. net deferred tax assets, based on the history of cumulative losses and the conclusion that future taxable profit may not be available for the utilization of the deferred tax assets for U.K. income tax purposes.
As of December 31, 2023, the Company had federal, state and foreign net operating loss carryforwards of approximately $2 million, $10 million and $1,001 million, respectively. The federal, state and foreign net operating loss carryforwards are subject to limitations under applicable federal, state and foreign tax law. Federal net operating loss carryforward will carry forward indefinitely. State net operating loss carryforwards have varied expiration years beginning in 2032. Foreign net operating losses carry forward indefinitely.
As of December 31, 2023, the Company had state and foreign research and development tax credits of approximately $29 million and $2 million, respectively, which can be carried forward as prescribed under applicable state and foreign tax law. State and foreign research and development tax credits carry forward indefinitely.
As of December 31, 2023, unremitted earnings of the subsidiaries outside of the United States were approximately $7 million, on which no state taxes have been paid. The Company’s intention is to indefinitely reinvest these earnings outside the United States upon distribution of those earnings in the form of a dividend or otherwise, the Company would be subject to both state income taxes and withholding taxes payable to various foreign countries. The amounts of such tax liabilities that might be payable upon repatriation of foreign earnings are not material.
As of December 31, 2023, the Company had gross unrecognized tax benefits of approximately $98 million, $71 million of which is a reduction to deferred tax assets and the remaining $27 million which would affect the Company’s effective tax rate if recognized. As of December 31, 2022, the Company had gross unrecognized tax benefits of approximately $91 million, $70 million of which is a reduction to deferred tax assets and the remaining $21 million which would affect the Company’s effective tax rate if recognized.
The following table presents changes in gross unrecognized tax benefits (in thousands):
Year Ended December 31,
2023
2022 (1)
2021 (1)
Beginning balance$90,932 $86,331 $66,875 
Increases related to prior year tax positions229 — 13,075 
Decreases related to prior year tax positions— (84)— 
Increases related to current year tax positions6,601 4,685 6,381 
Settlements(59)— — 
Expiration of statute of limitations— — — 
Ending balance$97,703 $90,932 $86,331 
____________
(1)Includes the impact of a statutory rate change in the U.K.
Interest and penalties related to the Company’s unrecognized tax benefits accrued as of December 31, 2023 were not material.
The Company files U.S. federal, state and foreign tax returns. The Company is currently under examination by the Internal Revenue Service for the years ended December 31, 2015, 2016, 2017, 2018, 2019 and 2020. The Company is also currently under examination by various state jurisdictions. The Company does not expect to materially reduce its unrecognized tax benefits during the next twelve months.
The Company remains subject to examination for its federal and state tax returns for the periods 2015 through 2022, and 2019 through 2022, respectively. The majority of the Company’s foreign subsidiaries remain subject to examination by local taxing authorities for 2017 and subsequent years.
On August 16, 2022, the IRA (as defined in Note 9 —Capitalization) was signed into law for tax years beginning after December 31, 2022. There was no impact to the Company’s provision for income taxes, effective tax rate, unrecognized tax benefits or deferred income tax positions for the year ended December 31, 2023 from the IRA. The IRA did not result in a material excise tax on net stock repurchases for the year ended December 31, 2023.

In 2021, the Organization for Economic Cooperation and Development (“OECD”) announced an Inclusive Framework on Base Erosion and Profit Shifting, including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%. Many non-U.S. tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years. The Company does not currently anticipate that the legislation will have a material impact on its provision for income taxes or effective tax rate. The Company continues to monitor for evolving tax legislation in the individual jurisdictions in which it operates and for changes to its operations that could be impacted by legislation.
v3.24.0.1
Segment and Geographic Information
 12 Months Ended
Dec. 31, 2023
Segments, Geographical Areas [Abstract]  
Segment and Geographic Information
Note 12—Segment and Geographic Information
The Company has one primary business activity and operates in one reportable and operating segment.
The Company reports revenue net of amounts it pays suppliers for the cost of Supplier Features. The Company generally bills clients based on Gross Billings, which is the gross amount of Supplier Features they purchase through its platform and the platform fees, net of allowances. The Company’s accounts receivable are recorded at the amount of Gross Billings for the amounts it is responsible to collect, and accounts payable are recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis.
Gross Billings, based on the address of the clients or client affiliates, were as follows (in thousands):
Year Ended December 31,
202320222021
United States$8,216,446 $6,696,743 $5,286,191 
International1,214,207 937,824 843,436 
Total$9,430,653 $7,634,567 $6,129,627 
Property and equipment, net and operating lease assets presented by principal geographic area, were as follows (in thousands):
As of December 31,
20232022
United States$278,998 $316,000 
International80,156 78,155 
Total$359,154 $394,155 
v3.24.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Note 13—Commitments and Contingencies
As of December 31, 2023, the Company had non-cancelable operating lease commitments for office space that were recorded as operating lease liabilities on the consolidated balance sheets. Refer to Note 8—Leases for additional information regarding lease commitments.
As of December 31, 2023, the Company had non-cancelable commitments to its hosting services and hardware providers as well as commitments to providers of software as a service. As of December 31, 2023, these purchase obligations were as follows (in thousands):
YearAmount
2024$155,703 
2025125,368 
2026118,676 
202719,667 
2028— 
$419,414 
Guarantees and Indemnification
In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to clients, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have
been made upon the Company to provide indemnification under such agreements, and thus, there are no claims that the Company is aware of that could have a material effect on the Company’s balance sheet, statement of operations or statement of cash flows. Accordingly, no amounts for any obligation have been recorded as of December 31, 2023 and 2022.
Litigation
From time to time, the Company is subject to various legal proceedings, litigation and claims, either asserted or unasserted, that arise in the ordinary course of business. Although the outcome of the various legal proceedings, litigation and claims cannot be predicted with certainty, management does not believe that any of these proceedings or other claims will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

On May 27, 2022, a stockholder of the Company filed a derivative lawsuit captioned Huizenga v. Green, et al., No. 2022-0461, asserting claims on behalf of the Company against certain members of the Company’s board of directors in the Court of Chancery of the State of Delaware. On June 27, 2022, a second derivative lawsuit captioned Pfeiffer v. Green, et al., No. 2022-0560 was filed in the Court of Chancery of the State of Delaware alleging substantially similar claims. Those lawsuits were consolidated on August 18, 2022, and a lead plaintiff was appointed on October 7, 2022. The two complaints allege generally that the Defendants breached their fiduciary duties to the Company and its stockholders in connection with the negotiation and approval of the CEO Performance Option. The plaintiffs seek a court order rescinding the CEO Performance Option and monetary damages. On November 10, 2022, the plaintiffs filed a consolidated complaint, and on January 12, 2023, the Defendants moved to dismiss the consolidated complaint. On March 24, 2023, plaintiffs filed an opposition to defendants’ motions to dismiss. Defendants filed their replies in support of their motions to dismiss on May 19, 2023. Oral argument on the motions has been set for April 3, 2024.

Litigation is inherently uncertain and there can be no assurance regarding the likelihood that the motions to dismiss or defense of the various actions will be successful.
Employment Contracts
The Company has entered into agreements with severance terms with certain employees and officers, all of whom are employed on an at-will basis, subject to certain severance obligations in the event of certain involuntary terminations. The Company may be required to accelerate the vesting of certain stock options in the event of changes in control, as defined and involuntary terminations.
v3.24.0.1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Pay vs Performance Disclosure      
Net income $ 178,940 $ 53,385 $ 137,762
v3.24.0.1
Insider Trading Arrangements
 3 Months Ended 12 Months Ended
Dec. 31, 2023
shares
Dec. 31, 2023
shares
Trading Arrangements, by Individual    
Rule 10b5-1 Arrangement Adopted true  
Non-Rule 10b5-1 Arrangement Adopted false  
Rule 10b5-1 Arrangement Terminated true  
Non-Rule 10b5-1 Arrangement Terminated false  
Jeff T. Green [Member]    
Trading Arrangements, by Individual    
Material Terms of Trading Arrangement  
On November 13, 2023, our Chief Executive Officer, Jeff T. Green, through a personal trust over which he is a trustee, modified a trading plan with respect to the sale of our Class A common stock intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), which he had previously adopted on June 15, 2023. The modified plan covers the sale of up to 866,901 shares. The modified plan will terminate at the earlier of the execution of all trading orders in the plan or May 15, 2024.
June 2023 Plan [Member] | Jeff T. Green [Member]    
Trading Arrangements, by Individual    
Name Jeff T. Green  
Title Chief Executive Officer  
Termination Date November 13, 2023  
November 2023 Plan [Member] | Jeff T. Green [Member]    
Trading Arrangements, by Individual    
Name Jeff T. Green  
Title Chief Executive Officer  
Adoption Date November 13, 2023  
Termination Date May 15, 2024  
Arrangement Duration 184 days  
Aggregate Available 866,901 866,901
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Basis of Presentation and Principles of Consolidation
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the operations of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.
On June 16, 2021, the Company effected a ten-for-one stock split (the “Stock Split”) of the Company’s common stock in the form of a stock dividend. Each stockholder of record on June 9, 2021 received nine additional shares of common stock for each then-held share. Trading began on a stock split-adjusted basis on June 17, 2021. The number of shares subject to outstanding equity awards and the exercise prices of the outstanding stock option awards were also adjusted to reflect the effect of the Stock Split. All share and per share amounts presented herein have been retroactively adjusted to reflect the impact of the Stock Split.
Use of Estimates
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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. Actual results could differ materially from these estimates.
Management regularly evaluates its estimates, primarily those related to: (1) revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, (2) allowances for credit losses, (3) operating lease assets and liabilities, including the incremental borrowing rate and terms and provisions of each lease (4) the useful lives of property and equipment and capitalized software development costs, (5) income taxes, (6) assumptions used in the option pricing models to determine the fair value of stock-based compensation and (7) the recognition and disclosure of contingent liabilities. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances; the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
As of December 31, 2023, the impacts to the Company’s business due to geopolitical developments and macroeconomic factors, such as changes in interest rates, inflation, foreign currency exchange rates, supply chain disruptions and economic growth continue to evolve. As a result, many of the Company’s estimates and assumptions, including the allowance for credit losses, consider macroeconomic factors in the market, which require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, the Company’s estimates may change materially in future periods.
Revenue Recognition
Revenue Recognition
The Company generates revenue from clients who enter into agreements with the Company to use its platform to purchase advertising inventory, data and other add-on features. The Company charges its clients a platform fee, which is a
percentage of a client’s purchases through the platform. In addition, the Company invoices its clients for the cost of advertising inventory purchased, plus data and any add-on features purchased through the platform.
The Company determines revenue recognition through the following steps:
•Identification of a contract with a client;
•Identification of the performance obligations in the contract;
•Determination of the transaction price;
•Allocation of the transaction price to the performance obligations in the contract; and
•Recognition of revenue when or as the performance obligations are satisfied.
The Company maintains agreements with each client and supplier in the form of master service agreements (“MSAs”), which set out the terms of the relationship and access to the Company’s platform. The Company’s performance obligation is to provide the use of its platform to clients to develop ad campaigns and select the advertising inventory, data and other add-on features. The Company charges clients a platform fee, based on a percentage of a client’s purchases through the platform. The Company recognizes revenue for its platform fee at a point in time when a transaction is completed, which is when a bid is won and the client’s purchase occurs through the platform. The transaction price is determined based on the consideration the Company expects to be entitled in exchange for the completion of the transaction. The associated fees are generally not subject to refund or adjustment after a bid is won. Historically, any refunds and adjustments have not been material.
Generally, the Company reports revenue net of amounts it pays suppliers for the cost of advertising inventory, third-party data and other add-on features (collectively, “Supplier Features”). Judgment is required to determine whether the Company is the principal and reports revenue on a gross basis for Supplier Features or the agent and reports revenue on a net basis for the amount of platform fees charged to the client. The Company determined that it is not primarily responsible for the purchase of Supplier Features. Rather, the Company’s primary responsibility is to provide the platform that enables clients to bid on advertising inventory and use data and other add-on features in designing and executing their campaigns. The Company does not control the Supplier Features prior to the purchase by the client, and it does not have pricing latitude with respect to the cost of such features. The platform fee the Company charges clients is a percentage of their purchases through its platform, similar to a commission, and the platform fee is not contingent on the results of an advertising campaign. Based on these and other factors, the Company determined that it is not the principal in the purchase and sale of Supplier Features and, therefore, reports revenue on a net basis for the platform fees charged to clients.
From time to time, the Company may enter into agreements with data suppliers where the purchased data is used to inform and improve the platform, generally at no additional charge to customers outside of the standard fees. Costs associated with this data (“data-related costs”) are recorded in platform operations expense.
The Company generally bills clients for the gross amount of Supplier Features they purchase through its platform and the platform fees (“Gross Billings”), net of allowances. When clients have direct payment relationships with advertising inventory suppliers, the Company bills these clients only for third-party data, other add-on features and its platform fees. The Company invoices its clients monthly for the purchases occurring during the month. Typically, invoice payment terms are between 30 to 90 days. However, certain agency clients have sequential liability terms where payment is not due to the Company until the agency has received payment from its advertiser clients. Accounts receivable is recorded based on Gross Billings, which are the amounts the Company is responsible to collect. Accounts payable is recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis.
Refer to Note 12—Segment and Geographic Information for geographic information related to Gross Billings.
Operating Expenses
Operating Expenses
The Company classifies its operating expenses into four categories and allocates overhead such as information technology infrastructure, rent, office support and occupancy charges based on headcount for all these categories:
Platform Operations. Platform operations expense consists of expenses related to hosting the Company’s platform, which includes “internet traffic” associated with the viewing of available impressions or queries per second (“QPS”), purchasing data used to inform and improve the platform and providing support to clients. Platform operations
expense includes hosting costs, personnel costs, data-related costs and amortization of acquired technology and capitalized software costs for platform development. Personnel costs include salaries, bonuses, stock-based compensation and employee benefit costs attributable to personnel who support the platform and provide clients with platform support. The Company capitalizes certain costs associated with platform development in other assets, non-current on its consolidated balance sheet and amortizes these costs into platform operations expense over their estimated useful lives.
Sales and Marketing. Sales and marketing expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and commission costs, for the Company’s sales and marketing personnel. Sales and marketing expense also includes costs for market development programs, marketing events, advertising and promotional and other marketing activities. Commissions costs are expensed as incurred.
Technology and Development. The Company’s technology and development expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs, as well as third-party consultant costs associated with the ongoing development of the Company’s platform and integrations with advertising and data inventory suppliers. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with software development that qualifies for capitalization, which are then recorded as capitalized software development costs included in other assets, non-current on the Company’s consolidated balance sheet. The Company amortizes capitalized software development costs relating to the Company’s platform to platform operations expense.
General and Administrative. The Company’s general and administrative expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs associated with the Company’s executive, finance, legal, human resources, compliance and other administrative personnel, as well as accounting and legal professional services fees and credit loss expense. Stock-based compensation in general and administrative expenses also includes expense related to the CEO Performance Option, which was granted in 2021.
Sales and Marketing
Sales and Marketing. Sales and marketing expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and commission costs, for the Company’s sales and marketing personnel. Sales and marketing expense also includes costs for market development programs, marketing events, advertising and promotional and other marketing activities. Commissions costs are expensed as incurred.
Technology and Development
Technology and Development. The Company’s technology and development expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs, as well as third-party consultant costs associated with the ongoing development of the Company’s platform and integrations with advertising and data inventory suppliers. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with software development that qualifies for capitalization, which are then recorded as capitalized software development costs included in other assets, non-current on the Company’s consolidated balance sheet. The Company amortizes capitalized software development costs relating to the Company’s platform to platform operations expense.
Stock-Based Compensation
Stock-Based Compensation
Stock-based compensation expense related to stock options, restricted stock awards and units (collectively, “restricted stock”) and awards granted under the Company’s employee stock purchase plan (“ESPP”) is measured and recognized in the consolidated financial statements based on the fair value of the awards granted.
The fair values of the ESPP and stock option awards are estimated on the grant date using the Black-Scholes option-pricing model, except for the CEO Performance Option, granted in 2021, that was estimated using the Monte Carlo valuation model. The fair value of restricted stock is calculated using the closing market price of the Company’s common stock on the date of grant. Determining the fair value of stock options and ESPP awards requires judgment. The Company’s use of the valuation models requires the input of subjective assumptions. The assumptions used in the Company’s valuation models represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. The Company will continue to use judgment in evaluating the assumptions related to its stock-based compensation.
These assumptions and estimates are as follows:
Risk-Free Interest Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities approximating the expected term of the awards.
Expected Term. For stock options, given the insufficient historical data relating to stock option exercises, the Company applies the simplified approach in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award. For ESPP awards, the expected term is the time period from the grant date to the respective purchase dates included within each offering period.
Volatility. Prior to 2020, the Company determined the price volatility based on a blend of the historical volatilities of a publicly traded peer group, implied volatilities from its traded options, and its historical volatility, based on daily price observations over a period equivalent to the expected term of the award. During 2020, the Company eliminated the peer group from this analysis and began to determine its price volatility based on a blend of historical and implied volatilities.
Dividend Yield. The dividend yield assumption is based on the Company’s history and current expectations of dividend payouts. The Company has never declared or paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future, so the Company used an expected dividend yield of zero.
Derived Service Period. The stock-compensation expense attribution period for the CEO Performance Option, which was granted in 2021, was developed based on a Monte Carlo simulation of daily stock prices over the performance period.
The ESPP and the CEO Performance Option have a six-month and a one-year holding period with respect to the sale or transfer of purchased or vested common shares, respectively. Due to the holding period, the Company applies a discount to reflect the non-transferability of the shares for the ESPP and the CEO Performance Option.
Stock-based compensation expense related to stock options and restricted stock is recognized on a straight-line basis over the requisite service periods of the awards, which is generally four years. Stock-based compensation for the CEO Performance Option is recognized on a graded-vesting basis over a derived service period of approximately five years but may be accelerated if the vesting criteria are met prior to the estimated performance period. Stock-based compensation expense for ESPP awards is recognized on a graded-vesting attribution basis over the requisite service period of each award. The Company accounts for forfeitures as they occur.
Income Taxes
Income Taxes
Deferred income tax assets and liabilities are determined based upon the net tax effects of the differences between the Company’s consolidated financial statements carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. A valuation allowance is used to reduce some or all of the deferred tax assets if, based upon the weight of available evidence, it is more likely than not that those deferred tax assets will not be realized.
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 related to its uncertain tax positions in its income tax provision in the accompanying consolidated statements of operations.
The Company makes assumptions, judgments and estimates to determine the current income tax provision, tax benefits from uncertain tax positions, deferred tax asset and liabilities and valuation allowance recorded against a deferred tax asset.
The assumptions, judgments and estimates relative to the current income tax provision (benefit) take into account current tax laws, their interpretation and possible results of foreign and domestic tax audits. Changes in tax law, and their interpretation, could significantly impact the income taxes provided in the Company’s consolidated financial statements.
The evaluation of the Company’s uncertain tax positions involves significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws, and matters related to the allocation of international taxation rights between countries. Although management believes the Company’s reserves are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in the Company’s reserves. Reserves are adjusted considering changing facts and circumstances, such as the closing of a tax examination or the refinement of an estimate.
Assumptions, judgments and estimates relative to the amount of deferred income taxes, and any applicable valuation allowances, take into account future taxable income. Any of the assumptions, judgments and estimates mentioned above could cause the actual income tax obligations to differ from estimates.
Earnings Per Share
Earnings Per Share
Basic earnings per share is calculated by dividing net income by the weighted-average number of common stock shares outstanding. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common stock shares outstanding adjusted for the potentially dilutive impact of stock options, restricted stock and ESPP using the two-class method required for participating securities. Restricted stock awards are considered to be participating securities due to their non-forfeitable dividend rights.
Cash, Cash Equivalents and Marketable Securities
Cash, Cash Equivalents and Marketable Securities
The Company classifies all investments that are readily convertible to known amounts of cash and have maturities of three months or less from the date of purchase as cash equivalents, which consist primarily of money market funds and commercial paper and those with stated maturities of greater than three months as marketable securities, which primarily consist of corporate debt securities and U.S. government and agency securities. Investments in marketable securities with maturities beyond one year are also classified as short-term available-for-sale securities based on their highly liquid nature and because they are available for current operations.
Cash equivalents and marketable securities are carried at fair value. Realized gains and losses are recognized in other expense (income), net on the consolidated statement of operations. Unrealized gains and losses, net of taxes, are included in stockholders' equity. The Company uses Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Accounting Standards Codification (“ASC”) 326 or “CECL”), to assess the investment portfolio for impairment at the individual security level and evaluates all securities in an unrealized loss position to determine if the impairment is credit related (resulting in realized credit loss, recorded in earnings) or non-credit related (resulting in an unrealized loss, recorded in stockholders' equity). The Company has not recorded any impairment charges for unrealized losses in the periods presented. Credit losses recorded in the statements of operations for the years ended 2023, 2022 and 2021 were not material.
Refer to Note 6—Cash, Cash Equivalents and Short-Term Investments, Net for additional information regarding the fair value of cash equivalents and marketable securities.
Accounts Receivable and Allowance for Credit Losses
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are recorded at the invoiced amount, are unsecured and do not bear interest. The Company performs ongoing credit evaluations of its clients and certain advertisers when the Company’s agreements with its clients contain sequential liability terms such that client payments are not due to the Company until the client has received payment from its clients who are advertisers. The Company maintains an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense on the consolidated statements of operations.
The Company applies ASC 326 to assess the allowance for credit losses. ASC 326 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The Company’s impairment model utilizes an expected loss methodology in place of an incurred loss methodology related to its marketable securities and the related allowance for credit losses. Industry-specific default rates are applied to receivables subject to sequential liability or receivables for which the Company is engaged with the advertiser directly.
For the years ended December 31, 2023 and 2022, the Company’s assessment considered business and market disruptions caused by macroeconomic factors, such as changes in interest rates, inflation, foreign currency exchange rates, economic growth, supply chain disruptions and the COVID-19 pandemic, and estimates of credit defaults by industry. The Company continues to monitor the financial implications of these macroeconomic factors on expected credit losses by reviewing the allowance for credit losses on a quarterly basis. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered.
The following table presents changes in the accounts receivable allowance for credit losses (in thousands):
Year Ended December 31,
202320222021
Beginning balance$10,477 $7,374 $7,253 
Add: provision for expected credit losses
2,960 3,203 1,456 
Less: write-offs, net of recoveries(611)(100)(1,335)
Ending balance$12,826 $10,477 $7,374 
Property and Equipment, Net
Property and Equipment, Net
Property and equipment are recorded at historical cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method based upon the following estimated useful lives:
Years
Computer and networking equipment
2 – 3
Purchased software
3 – 5
Furniture, fixtures and office equipment5
Leasehold improvements*
____________
*Leasehold improvements are amortized on a straight-line basis over the term of the lease, or the useful life of the assets, whichever is shorter.
Repair and maintenance costs are charged to expense as incurred, while improvements are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s operating results.
Capitalized Software Development Costs
Capitalized Software Development Costs
The Company capitalizes certain costs associated with creating and enhancing internally developed software related to the Company’s technology infrastructure. These costs include personnel and benefit-related expenses for employees who are directly associated with and devote time to software development projects, and external direct costs of materials and services consumed in developing or obtaining the software. Software development costs that do not qualify for capitalization, as further discussed below, are expensed as incurred and recorded in technology and development expense in the consolidated statements of operations.
Software development activities typically consist of three stages: (1) the planning phase; (2) the application and infrastructure development stage; and (3) the post-implementation stage. Costs incurred in the planning and post implementation phases, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed when the preliminary project stage is completed, management implicitly or explicitly authorizes and commits to funding the project and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development phases, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software is ready for its intended purpose. Software development costs are amortized to platform operations expense using a straight-line method over the estimated useful life of two years, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived.
The Company does not transfer ownership of its internally developed software, or lease its software, to third parties.
Cloud computing arrangements (“CCAs”), such as software as a service and other hosting arrangements, are evaluated for capitalized implementation costs in a similar manner as capitalized software development costs. If a CCA includes a software license, the software license element of the arrangement is accounted for in a manner consistent with the acquisition of other software licenses. If a CCA does not include a software license, the service element of the arrangement is accounted for as a service contract. The Company capitalized certain implementation costs for its CCAs that are service contracts, which are included in other assets, non-current. The Company amortizes capitalized implementation costs in a CCA over the life of the service contract.
Operating Leases
Operating Leases
The Company enters into operating leases for its offices, which have lease terms of up to 10 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year with proper notification. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company does not have finance leases.
The Company determines if an arrangement is, or contains, a lease at inception. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right.
Operating lease assets and liabilities are initially recorded based on the present value of lease payments over the lease term, which includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate, based on the information available at the lease commencement date in determining the present value of its expected lease payments. Operating lease assets also include any initial direct costs and any lease payments made prior to the lease commencement date and are reduced by any lease incentives received. The Company has elected to not separate lease and non-lease components.
Operating lease assets are amortized on a straight-line basis in operating lease expense over the lease term on the consolidated statements of operations. The related amortization, referred to as noncash lease expense, along with the change in the operating lease liabilities are separately presented within the cash flows from operating activities on the consolidated statements of cash flows. The Company records lease expense for operating leases, some of which have escalating rent payments, on a straight-line basis over the lease term.
Certain leases contain provisions for property-related costs that are variable in nature for which the Company is responsible, including common area maintenance and other property operating services. These costs are calculated based on a variety of factors including property values, tax and utility rates, property services fees and other factors.
Refer to Note 8—Leases for additional information.
Fair Value of Financial Instruments
Fair Value of Financial Instruments
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. Fair value measurements are based on a fair value hierarchy, based on three levels of inputs, of which the first two are considered observable and the last unobservable, which are the following:
Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted market prices for similar assets and 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 asset or liability.
Level 3—Unobservable inputs.
Observable inputs are based on market data obtained from independent sources.
The carrying amounts of accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair value due to the short-term nature of these instruments. The carrying value of the line of credit approximates fair value based on borrowing rates currently available to the Company for financing with similar terms and were determined to be Level 2.
Certain long-lived assets including capitalized software development costs are also subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review
Concentration of Risk
Concentration of Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, short-term investments and accounts receivable. The Company maintains its cash and cash equivalents with financial institutions, and its cash levels exceed the Federal Deposit Insurance Corporation federally
insured limits. Short-term investments consist of investments in U.S. government securities, U.S. government agency securities, and high-credit quality corporate debt securities and commercial paper.
Foreign Currency Transactions
Foreign Currency Transactions
The Company’s reporting currency is the U.S. Dollar, and the functional currency of each of the Company’s subsidiaries is the U.S. Dollar. Transactions in foreign currencies are translated into U.S. Dollars at the rates of exchange in effect at the date of the transaction. Net transaction gains or losses are included in foreign currency exchange loss (gain), net in the accompanying consolidated statements of operations.
The Company enters into forward contracts to hedge foreign currency exposures related primarily to the Company’s foreign currency denominated accounts receivable. The Company does not designate the foreign exchange forward contracts as hedges for accounting purposes and changes in the fair value of the foreign exchange forward contracts are recorded in foreign currency exchange loss (gain), net in the accompanying consolidated statements of operations. The Company’s forward contracts generally have terms of 30-60 days. As of December 31, 2023, and 2022, the Company had open forward contracts with aggregate notional amounts of $263 million and $142 million, respectively. The fair value of the open forward contracts was not material.
Business Combinations
Business Combinations
The results of a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business are generally recorded at their estimated fair values on the acquisition date, which may require management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates and selection of comparable companies. The Company engages valuation specialists to assist in determining the fair values of these acquired assets and liabilities. Any excess consideration over the fair value of these acquired assets and liabilities assumed is recognized as goodwill.
Recent Accounting Pronouncements
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which adds requirements to report significant expenses, requirements for entities with a single reportable segment to provide all disclosures otherwise required under Topic 280 and requirements to report segment information on an interim basis, among other clarifications and requirements. This guidance will be effective on a retrospective basis for annual periods beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and interim periods beginning with the Company’s Quarterly Report Form 10-Q for the fiscal quarter ended March 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and notes.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires greater disaggregation of information and consistent categories in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective on a prospective basis, with an option to apply it retrospectively, for annual periods beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and notes.
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Schedule of Changes in Accounts Receivable Allowance for Credit Losses
The following table presents changes in the accounts receivable allowance for credit losses (in thousands):
Year Ended December 31,
202320222021
Beginning balance$10,477 $7,374 $7,253 
Add: provision for expected credit losses
2,960 3,203 1,456 
Less: write-offs, net of recoveries(611)(100)(1,335)
Ending balance$12,826 $10,477 $7,374 
Schedule of Useful Lives of PPE Depreciation is computed using the straight-line method based upon the following estimated useful lives:
Years
Computer and networking equipment
2 – 3
Purchased software
3 – 5
Furniture, fixtures and office equipment5
Leasehold improvements*
____________
*Leasehold improvements are amortized on a straight-line basis over the term of the lease, or the useful life of the assets, whichever is shorter.
v3.24.0.1
Earnings Per Share (Tables)
 12 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Computation of Basic and Diluted EPS
The computation of basic and diluted EPS is as follows (in thousands, except per share amounts):
Year Ended December 31,
202320222021
Numerator:
Net income$178,940 $53,385 $137,762 
Denominator:
Weighted-average shares outstanding—basic489,261 486,937 476,851 
Effect of dilutive securities10,921 12,988 21,689 
Weighted-average shares outstanding—diluted500,182 499,925 498,540 
Basic earnings per share$0.37 $0.11 $0.29 
Diluted earnings per share$0.36 $0.11 $0.28 
Anti-dilutive equity awards under stock-based award plans excluded from the determination of diluted earnings per share5,580 10,707 1,699 
v3.24.0.1
Property and Equipment, Net (Tables)
 12 Months Ended
Dec. 31, 2023
Property, Plant and Equipment [Abstract]  
Schedule of Major Classes of Property and Equipment
Major classes of property and equipment were as follows (in thousands):
As of December 31,
20232022
Computer and networking equipment
$145,424 $113,053 
Purchased software10,424 10,451 
Furniture and fixtures25,632 23,545 
Construction in progress (1)
8,487 10,904 
Leasehold improvements129,992 121,700 
319,959 279,653 
Less: Accumulated depreciation(158,537)(105,894)
$161,422 $173,759 
____________
(1)
Includes leasehold improvement projects that are not yet ready for intended use.
v3.24.0.1
Capitalized Software Development Costs (Tables)
 12 Months Ended
Dec. 31, 2023
Research and Development [Abstract]  
Schedule of Capitalized Computer Software, Net
Capitalized software development costs, included in other assets, non-current, were as follows (in thousands):
As of December 31,
20232022
Capitalized software development costs, gross$32,333 $24,829 
Less: Accumulated amortization(15,432)(6,285)
Capitalized software development costs, net$16,901 $18,544 
v3.24.0.1
Cash, Cash Equivalents and Short-Term Investments, Net (Tables)
 12 Months Ended
Dec. 31, 2023
Cash, Cash Equivalents, and Short-Term Investments [Abstract]  
Schedule of Cash, Cash Equivalents and Net Short-term Investments in Marketable Securities
Cash, cash equivalents and short-term investments in marketable securities were as follows (in thousands):
As of December 31, 2023
Cash and
Cash
Equivalents		Short-Term
Investments, Net		Total
Cash$289,512 — $289,512 
Level 1:   
Money market funds560,673 — 560,673 
Level 2:   
Commercial paper36,013 168,224 204,237 
Corporate debt securities— 185,465 185,465 
U.S. government and agency securities8,931 131,470 140,401 
Total$895,129 $485,159 $1,380,288 
As of December 31, 2022
Cash and
Cash
Equivalents		Short-Term
Investments, Net		Total
Cash$339,717 — $339,717 
Level 1:   
Money market funds640,233 — 640,233 
Level 2:   
Commercial paper50,556 126,507 177,063 
Corporate debt securities— 180,502 180,502 
U.S. government and agency securities— 109,071 109,071 
Total$1,030,506 $416,080 $1,446,586 
Schedule of Contractual Maturities of Short-Term Investments
The contractual maturities of the Company’s short-term investments are as follows (in thousands):
December 31, 2023
Due in one year$439,486 
Due in one to two years45,673 
Total$485,159 
v3.24.0.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Summary of Components of Lease Expense
The components of lease expense were as follows (in thousands):
Year Ended December 31,
202320222021
Operating lease cost$48,866 $51,918 $50,798 
Short-term lease cost1,898 1,668 969 
Variable lease cost12,901 9,140 6,742 
Sublease income(2,208)(2,490)(2,734)
Total lease cost$61,457 $60,236 $55,775 
Summary of Supplemental Information Related to Leases
Supplemental information related to leases were as follows:
Year Ended December 31,
20232022
Weighted-average remaining lease term5.2 years6.1 years
Weighted-average discount rate3.6 %3.1 %
Summary of Maturities of Lease Commitments
Maturities of lease commitments as of December 31, 2023 were as follows (in thousands):
YearAmount
2024$62,412 
202559,141 
202656,200 
202748,503 
202844,059 
Thereafter51,173 
Total undiscounted lease commitments321,488 
Less: commitments for leases not yet commenced(63,340)
Less: interest(22,255)
Present value of lease liabilities235,893 
Less: operating lease liabilities, current(55,524)
Operating lease liabilities, non-current$180,369 
v3.24.0.1
Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Schedule of Stock-Based Compensation Expense
Stock-based compensation expense recorded in the consolidated statements of operations was as follows (in thousands):
Year Ended December 31,
202320222021
Platform operations$21,048 $18,285 $15,913 
Sales and marketing75,924 64,442 50,671 
Technology and development120,823 94,822 57,791 
General and administrative273,826 321,093 213,038 
Total$491,621 $498,642 $337,413 
Summary of Stock Option Activity
The following summarizes stock option activity:
 
Shares
Under Options
(in thousands)
Weighted-
Average
Exercise Price
Weighted-
Average
Contractual
Life (years)
Aggregate
Intrinsic Value
(in thousands)
Outstanding as of December 31, 2022
15,418 $19.82 
Granted2,891 62.77 
Exercised(5,232)11.49 
Expired/Forfeited/Cancelled
(819)56.63 
Outstanding as of December 31, 2023
12,258 $31.05 6.0$507,343 
Exercisable as of December 31, 2023
9,029 $19.96 5.0$472,019 
Schedule of Weighted-Average Assumptions Used to Value Options Granted to Employees
The fair value of options on the date of grant was estimated based on the Black-Scholes option pricing model. The weighted-average assumptions used to value options granted to employees for the periods presented were as follows:
Year Ended December 31,
202320222021
Expected term (years)6.06.06.0
Expected volatility64.4 %66.5 %64.3 %
Risk-free interest rate3.71 %2.91 %1.04 %
Estimated dividend yield— %— %— %
The grant-date fair value was estimated based on a Monte Carlo valuation model using the following assumptions:
Expected volatility63.4 %
Risk-free interest rate1.55 %
Estimated dividend yield— %
Summary of Restricted Stock Activity The following summarizes restricted stock activity:
Shares
(in thousands)
Weighted-
Average
Grant Date
Fair Value
Per Share
Unvested as of December 31, 2022
8,747 $57.41 
Granted6,898 63.81 
Vested(3,575)55.01 
Forfeited/Cancelled
(1,524)58.74 
Unvested as of December 31, 2023
10,546 $62.22 
Schedule of Weighted-Average Assumptions Used to Estimate the Fair Value of ESPP Shares
The fair value of ESPP shares was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:
Year Ended December 31,
202320222021
Expected term (years)0.91.00.6
Expected volatility60.3 %74.1 %62.3 %
Risk-free interest rate4.95 %2.53 %0.09 %
Estimated dividend yield— %— %— %
v3.24.0.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Domestic and Foreign Components of Income Before Income Taxes
The following are the domestic and foreign components of the Company’s income before income taxes (in thousands):
Year Ended December 31,
202320222021
Domestic$328,853 $169,891 $193,048 
Foreign(60,858)(42,521)(71,012)
Income before income taxes$267,995 $127,370 $122,036 
Components of Provision for (Benefit from) Income Taxes
The following are the components of the provision for (benefit from) income taxes (in thousands):
Year Ended December 31,
202320222021
Current:   
Federal$120,049 $61,904 $10,332 
State and local24,827 34,797 (10,417)
Foreign5,000 3,068 2,435 
Total current provision149,876 99,769 2,350 
Deferred:   
Federal(51,822)(2,380)(21,287)
State and local(7,842)(23,465)3,193 
Foreign(1,157)61 18 
Total deferred provision(60,821)(25,784)(18,076)
Total provision for (benefit from) income taxes$89,055 $73,985 $(15,726)
Reconciliation of Statutory Tax Rate to Effective Tax Rate
A reconciliation of the statutory tax rate to the effective tax rate for the periods presented is as follows:
Year Ended December 31,
202320222021
U.S. federal statutory income tax rate21.0 %21.0 %21.0 %
State and local income taxes, net of federal benefit5.0 7.0 (5.3)
Foreign income at other than U.S. rates (1)
6.2 9.5 14.2 
Stock-based compensation8.3 31.0 (29.9)
Meals and entertainment1.0 0.4 0.2 
Nondeductible compensation0.3 1.6 1.7 
Research and development credit(8.7)(11.8)(15.3)
Other permanent items0.1 (0.6)0.5 
Effective income tax rate33.2 %58.1 %(12.9)%
____________
(1)
For the years ended December 31, 2023, 2022, and 2021, includes the impact of the valuation allowance associated with the United Kingdom (“U.K.”). For additional information, see discussion below.
Tax Effects of Temporary Differences that Give Rise to a Significant Portion of Deferred Tax Assets and Deferred Tax Liabilities
Set forth below are the tax effects of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities (in thousands):
As of December 31,
20232022
Reserves and allowances$8,401 $5,428 
Accrued expenses12,217 7,466 
Net operating losses231,597 182,124 
Research and development tax credit18,220 17,359 
Stock-based compensation25,727 21,207 
Prepaid expenses(944)(1,122)
Property and equipment(27,952)(29,020)
Intangibles (1)
180,573 200,113 
Capitalized software development costs112,736 61,670 
Operating lease assets(39,826)(45,493)
Operating lease liabilities48,153 54,657 
Other1,776 1,258 
Valuation allowance(415,829)(381,619)
Total deferred tax assets, net$154,849 $94,028 
____________
(1)
As of December 31, 2023 and 2022, includes intangibles associated with international restructuring, net of amortization, offset by a reserve for uncertain tax position. See discussion below.
Schedule of Changes in Gross Unrecognized Tax Benefits
The following table presents changes in gross unrecognized tax benefits (in thousands):
Year Ended December 31,
2023
2022 (1)
2021 (1)
Beginning balance$90,932 $86,331 $66,875 
Increases related to prior year tax positions229 — 13,075 
Decreases related to prior year tax positions— (84)— 
Increases related to current year tax positions6,601 4,685 6,381 
Settlements(59)— — 
Expiration of statute of limitations— — — 
Ending balance$97,703 $90,932 $86,331 
____________
(1)Includes the impact of a statutory rate change in the U.K.
v3.24.0.1
Segment and Geographic Information (Tables)
 12 Months Ended
Dec. 31, 2023
Segments, Geographical Areas [Abstract]  
Gross Billings, Based on Billing Address of Clients or Client Affiliates
Gross Billings, based on the address of the clients or client affiliates, were as follows (in thousands):
Year Ended December 31,
202320222021
United States$8,216,446 $6,696,743 $5,286,191 
International1,214,207 937,824 843,436 
Total$9,430,653 $7,634,567 $6,129,627 
Property and Equipment, Net and Operating Lease Assets, Presented by Principal Geographic Area
Property and equipment, net and operating lease assets presented by principal geographic area, were as follows (in thousands):
As of December 31,
20232022
United States$278,998 $316,000 
International80,156 78,155 
Total$359,154 $394,155 
v3.24.0.1
Commitments and Contingencies (Tables)
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Purchase Obligations As of December 31, 2023, these purchase obligations were as follows (in thousands):
YearAmount
2024$155,703 
2025125,368 
2026118,676 
202719,667 
2028— 
$419,414 
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies - Basis of Presentation and Principles of Consolidation (Details)
Jun. 16, 2021
shares
Accounting Policies [Abstract]  
Stock split ratio 10
Additional shares of common stock 9
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies - Stock-Based Compensation (Details)
 1 Months Ended 12 Months Ended
Oct. 31, 2021
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Basis of Presentation and Summary of Significant Accounting Policies        
Dividend yield   0.00%    
Requisite service period   4 years    
Forfeiture method   The Company accounts for forfeitures as they occur.    
Performance Option        
Basis of Presentation and Summary of Significant Accounting Policies        
Holding period for sale or transfer of purchased or vested shares   1 year    
Performance Option | Chief Executive Officer        
Basis of Presentation and Summary of Significant Accounting Policies        
Dividend yield 0.00% 0.00%    
Derived service period   5 years    
ESPP        
Basis of Presentation and Summary of Significant Accounting Policies        
Dividend yield   0.00% 0.00% 0.00%
Holding period for sale or transfer of purchased or vested shares   6 months    
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Changes in Accounts Receivable Allowance for Credit Losses (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Accounts receivable, allowance for credit loss [Roll Forward]      
Beginning balance $ 10,477 $ 7,374 $ 7,253
Add: provision for expected credit losses 2,960 3,203 1,456
Less: write-offs, net of recoveries (611) (100) (1,335)
Ending balance $ 12,826 $ 10,477 $ 7,374
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies - Property and Equipment, Net (Detail)
Dec. 31, 2023
Computer and networking equipment | Minimum  
Property, Plant and Equipment [Line Items]  
Property and equipment, useful life 2 years
Computer and networking equipment | Maximum  
Property, Plant and Equipment [Line Items]  
Property and equipment, useful life 3 years
Purchased software | Minimum  
Property, Plant and Equipment [Line Items]  
Property and equipment, useful life 3 years
Purchased software | Maximum  
Property, Plant and Equipment [Line Items]  
Property and equipment, useful life 5 years
Furniture, fixtures and office equipment  
Property, Plant and Equipment [Line Items]  
Property and equipment, useful life 5 years
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies - Capitalized Software Development Costs (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Basis of Presentation and Summary of Significant Accounting Policies      
Software development cost, amortization period 2 years    
Service contracts included in other assets , noncurrent $ 16,901 $ 18,544  
Amortization expenses 14,000 7,000 $ 5,000
Cloud Computing Arrangement      
Basis of Presentation and Summary of Significant Accounting Policies      
Service contracts included in other assets , noncurrent 4,000 2,000  
Amortization expenses $ 2,000 $ 2,000 $ 1,000
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies - Operating Leases (Detail)
Dec. 31, 2023
New Accounting Pronouncements or Change in Accounting Principle [Line Items]  
Remaining lease term 10 years
Option to extend operating leases, term (in years) 5 years
Option to terminate operating leases, term (in years) 1 year
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Detail) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Basis of Presentation and Summary of Significant Accounting Policies      
Impairments of long-lived assets $ 0 $ 0 $ 0
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies - Concentration of Risk (Detail)
 12 Months Ended
Dec. 31, 2023
HoldingCompany
Client
Supplier
Dec. 31, 2022
Client
Supplier
HoldingCompany
Dec. 31, 2021
HoldingCompany
Concentration Risk [Line Items]      
Number of holding companies | HoldingCompany 1 1 2
Revenue Benchmark | Customer Concentration Risk | Holding Company One      
Concentration Risk [Line Items]      
Concentration risk, percentage 12.00% 11.00% 11.00%
Revenue Benchmark | Customer Concentration Risk | Holding Company Two      
Concentration Risk [Line Items]      
Concentration risk, percentage     10.00%
Consolidated Accounts Receivable | Customer Concentration Risk      
Concentration Risk [Line Items]      
Number of clients | Client 2 4  
Consolidated Accounts Receivable | Customer Concentration Risk | Two Clients      
Concentration Risk [Line Items]      
Concentration risk, percentage 31.00%    
Consolidated Accounts Receivable | Customer Concentration Risk | Four Clients      
Concentration Risk [Line Items]      
Concentration risk, percentage   49.00%  
Trade Accounts Payable | Supplier Concentration Risk      
Concentration Risk [Line Items]      
Number of suppliers | Supplier 2 2  
Trade Accounts Payable | Supplier Concentration Risk | Two Suppliers      
Concentration Risk [Line Items]      
Concentration risk, percentage 31.00% 25.00%  
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies - Foreign Currency Transactions (Detail) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Minimum    
Foreign Currency Translation [Line Items]    
Forward contracts terms 30 days  
Maximum    
Foreign Currency Translation [Line Items]    
Forward contracts terms 60 days  
Forward Contracts    
Foreign Currency Translation [Line Items]    
Notional amounts of open forward contracts $ 263 $ 142
v3.24.0.1
Basis of Presentation and Summary of Significant Accounting Policies - Business Combinations (Details)
$ in Millions
 1 Months Ended 12 Months Ended
Jul. 31, 2021
USD ($)
Dec. 31, 2023
business
Dec. 31, 2022
business
Dec. 31, 2021
business
Business Acquisition [Line Items]        
Number of businesses acquired | business   0 0 0
Technology Company        
Business Acquisition [Line Items]        
Business combination, purchase price $ 18      
Non-deductible goodwill $ 11      
v3.24.0.1
Earnings Per Share - Additional Information (Detail)
Dec. 31, 2023
Class
Earnings Per Share [Abstract]  
Number of classes of common stock 2
v3.24.0.1
Earnings Per Share - Computation of Basic and Diluted EPS (Detail) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Numerator:      
Net income $ 178,940 $ 53,385 $ 137,762
Denominator:      
Weighted-average shares outstanding—basic (in shares) 489,261 486,937 476,851
Effect of dilutive securities (in shares) 10,921 12,988 21,689
Weighted-average shares outstanding—diluted (in shares) 500,182 499,925 498,540
Basic earnings per share (in dollars per share) $ 0.37 $ 0.11 $ 0.29
Diluted earnings per share (in dollars per share) $ 0.36 $ 0.11 $ 0.28
Anti-dilutive equity awards under stock-based award plans excluded from the determination of diluted earnings per share (in shares) 5,580 10,707 1,699
v3.24.0.1
Property and Equipment, Net - Schedule of Major Classes of Property and Equipment (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 319,959 $ 279,653
Less: Accumulated depreciation (158,537) (105,894)
Property and equipment, net 161,422 173,759
Computer and networking equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 145,424 113,053
Purchased software    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 10,424 10,451
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 25,632 23,545
Construction in progress    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 8,487 10,904
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 129,992 $ 121,700
v3.24.0.1
Property and Equipment, Net - Additional Information (Detail) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Property, Plant and Equipment [Abstract]      
Depreciation expense $ 62,000,000 $ 42,000,000 $ 34,000,000
Impairment charges to property and equipment $ 0 $ 0 $ 0
v3.24.0.1
Capitalized Software Development Costs - Schedule of Capitalized Computer Software, Net (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Research and Development [Abstract]    
Capitalized software development costs, gross $ 32,333 $ 24,829
Less: Accumulated amortization (15,432) (6,285)
Capitalized software development costs, net $ 16,901 $ 18,544
v3.24.0.1
Capitalized Software Development Costs - Additional Information (Detail) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Research and Development [Abstract]      
Amortization expenses $ 14,000,000 $ 7,000,000 $ 5,000,000
Impairment charges $ 0 $ 0 $ 0
v3.24.0.1
Cash, Cash Equivalents and Short-Term Investments, Net - Schedule of Cash, Cash Equivalents and Net Short-term Investments in Marketable Securities (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Schedule Of Available For Sale Securities [Line Items]    
Cash and cash equivalents $ 895,129 $ 1,030,506
Short-Term Investments, Net 485,159 416,080
Total 1,380,288 1,446,586
Cash    
Schedule Of Available For Sale Securities [Line Items]    
Cash and cash equivalents 289,512 339,717
Total 289,512 339,717
Level 1 | Money market funds    
Schedule Of Available For Sale Securities [Line Items]    
Cash and cash equivalents 560,673 640,233
Total 560,673 640,233
Level 2 | Commercial paper    
Schedule Of Available For Sale Securities [Line Items]    
Cash and cash equivalents 36,013 50,556
Short-Term Investments, Net 168,224 126,507
Total 204,237 177,063
Level 2 | Corporate debt securities    
Schedule Of Available For Sale Securities [Line Items]    
Cash and cash equivalents 0 0
Short-Term Investments, Net 185,465 180,502
Total 185,465 180,502
Level 2 | U.S. government and agency securities    
Schedule Of Available For Sale Securities [Line Items]    
Cash and cash equivalents 8,931 0
Short-Term Investments, Net 131,470 109,071
Total $ 140,401 $ 109,071
v3.24.0.1
Cash, Cash Equivalents and Short-Term Investments, Net - Schedule of Contractual Maturities of Short-Term Investments (Detail)
$ in Thousands
Dec. 31, 2023
USD ($)
Cash, Cash Equivalents, and Short-Term Investments [Abstract]  
Due in one year $ 439,486
Due in one to two years 45,673
Total $ 485,159
v3.24.0.1
Debt - Additional Information (Detail) - USD ($)
Feb. 09, 2023
Jun. 15, 2021
Dec. 31, 2023
Loan and Security Agreement Revolving Loan Facility      
Long-term debt:      
Line of credit facility   $ 450,000,000  
Loan and Security Agreement Revolving Loan Facility Swingline Borrowings      
Long-term debt:      
Line of credit facility   20,000,000  
Loan and Security Agreement Revolving Loan Facility Letter of Credit      
Long-term debt:      
Line of credit facility   15,000,000  
Loan and Security Agreement      
Long-term debt:      
Line of credit maximum amount right to increase   $ 300,000,000  
Amended Credit Facility      
Long-term debt:      
Outstanding debt balance     $ 0
Availability under the credit facility     445,000,000
Outstanding letters of credit     $ 5,000,000
Maximum ratio of consolidated funded debt to consolidated EBITDA     350.00%
Amended Credit Facility | Minimum      
Long-term debt:      
Fee percentage for undrawn amounts 0.20%    
Amended Credit Facility | Maximum      
Long-term debt:      
Fee percentage for undrawn amounts 0.35%    
Amended Credit Facility | NYFRB Rate      
Long-term debt:      
Basis spread on variable rate 0.50%    
Amended Credit Facility | Base Rate | Minimum      
Long-term debt:      
Basis spread on variable rate 0.25%    
Amended Credit Facility | Base Rate | Maximum      
Long-term debt:      
Basis spread on variable rate 1.25%    
Amended Credit Facility | SOFR Rate      
Long-term debt:      
Variable rate floor 0.00%    
Basis spread on variable rate 0.10%    
Amended Credit Facility | SOFR Rate | Minimum      
Long-term debt:      
Basis spread on variable rate 1.25%    
Amended Credit Facility | SOFR Rate | Maximum      
Long-term debt:      
Basis spread on variable rate 2.25%    
Amended Credit Facility | Adjusted SOFR Rate      
Long-term debt:      
Basis spread on variable rate 1.00%    
v3.24.0.1
Leases - Summary of Components of Lease Expense (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Leases [Abstract]      
Operating lease cost $ 48,866 $ 51,918 $ 50,798
Short-term lease cost 1,898 1,668 969
Variable lease cost 12,901 9,140 6,742
Sublease income (2,208) (2,490) (2,734)
Total lease cost $ 61,457 $ 60,236 $ 55,775
v3.24.0.1
Leases - Summary of Supplemental Information Related to Leases (Detail)
Dec. 31, 2023
Dec. 31, 2022
Leases [Abstract]    
Weighted-average remaining lease term 5 years 2 months 12 days 6 years 1 month 6 days
Weighted-average discount rate 3.60% 3.10%
v3.24.0.1
Leases - Summary of Maturities of Lease Commitments (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Leases [Abstract]    
2024 $ 62,412  
2025 59,141  
2026 56,200  
2027 48,503  
2028 44,059  
Thereafter 51,173  
Total undiscounted lease commitments 321,488  
Less: commitments for leases not yet commenced (63,340)  
Less: interest (22,255)  
Present value of lease liabilities 235,893  
Less: operating lease liabilities, current (55,524) $ (52,430)
Operating lease liabilities, non-current $ 180,369 $ 208,527
v3.24.0.1
Capitalization - Common and Preferred Stock (Detail)
$ in Thousands, shares in Millions
 12 Months Ended
Dec. 31, 2023
USD ($)
Vote
shares
Feb. 15, 2024
USD ($)
Feb. 28, 2023
USD ($)
Class of Stock [Line Items]      
Share repurchase program, aggregate repurchase amount $ 647,500    
Class B common stock      
Class of Stock [Line Items]      
Number of votes per share of common stock | Vote 10    
Ratio for conversion into Class A common stock 1    
Class A common stock      
Class of Stock [Line Items]      
Number of votes per share of common stock | Vote 1    
Class A common stock | 2023 Stock Repurchase Program      
Class of Stock [Line Items]      
Share repurchase program, authorized amount     $ 700,000
Share repurchase program, shares repurchased and retired (in shares) | shares 10    
Share repurchase program, aggregate repurchase amount $ 648,000    
Share repurchase program, amount available and authorized for repurchases remaining $ 53,000    
Class A common stock | 2023 Stock Repurchase Program | Subsequent Event      
Class of Stock [Line Items]      
Share repurchase program, additional repurchase amount   $ 647,000  
Share repurchase program, amount available and authorized for repurchases remaining   $ 700,000  
v3.24.0.1
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Stock-based compensation expense, by operating expense category      
Stock-based compensation expense $ 491,621 $ 498,642 $ 337,413
Platform operations      
Stock-based compensation expense, by operating expense category      
Stock-based compensation expense 21,048 18,285 15,913
Sales and marketing      
Stock-based compensation expense, by operating expense category      
Stock-based compensation expense 75,924 64,442 50,671
Technology and development      
Stock-based compensation expense, by operating expense category      
Stock-based compensation expense 120,823 94,822 57,791
General and administrative      
Stock-based compensation expense, by operating expense category      
Stock-based compensation expense $ 273,826 $ 321,093 $ 213,038
v3.24.0.1
Stock-Based Compensation - Stock-Based Compensation Expense - Additional Information (Detail) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Stock-Based Compensation      
Tax benefit on stock-based compensation expense $ 53 $ 48 $ 104
Tax benefit to stock options exercised 91 $ 72 $ 121
Chief Technology Officer | Technology and development      
Stock-Based Compensation      
Stock-based compensation cost $ 14    
v3.24.0.1
Stock-Based Compensation - Stock-Based Award Plans - Additional Information (Detail) - 2016 Incentive Award Plan - shares
shares in Millions
Jan. 01, 2024
Dec. 31, 2023
Stock-Based Compensation    
Shares remained available for grant   81.2
Maximum annual increase in shares available for issuance, percentage of outstanding shares   4.00%
Subsequent Event    
Stock-Based Compensation    
Number of additional shares authorized for grant 19.6  
v3.24.0.1
Stock-Based Compensation - Stock Options - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Share-based Payment Arrangement, Option      
Stock-Based Compensation      
Weighted average grant date fair value per share $ 38.69 $ 37.65 $ 43.57
Total intrinsic value of options exercised $ 276 $ 232 $ 538
Unrecognized stock-based compensation $ 120    
Unrecognized stock-based compensation, recognition period 2 years 9 months 18 days    
2016 Incentive Award Plan      
Stock-Based Compensation      
Vesting period 4 years    
Stock incentive plans, expiration period 10 years    
v3.24.0.1
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - Share-based Payment Arrangement, Option - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Shares Under Option      
Outstanding at the beginning of the period (in shares) 15,418    
Granted (in shares) 2,891    
Exercised (in shares) (5,232)    
Expired/Forfeited/Cancelled (in shares) (819)    
Outstanding at the end of the period (in shares) 12,258 15,418  
Exercisable at end of period (in shares) 9,029    
Weighted-Average Exercise Price      
Outstanding at the beginning of the period (in dollars per share) $ 19.82    
Granted (in dollars per share) 62.77    
Exercised (in dollars per share) 11.49    
Expired/Forfeited/Cancelled (in dollars per share) 56.63    
Outstanding at the end of the period (in dollars per share) 31.05 $ 19.82  
Exercisable at end of period (in dollars per share) $ 19.96    
Stock Options, additional disclosures      
Weighted-Average Contractual Life, outstanding 6 years    
Weighted-Average Contractual Life, exercisable 5 years    
Aggregate Intrinsic Value, Exercised $ 276,000 $ 232,000 $ 538,000
Aggregate Intrinsic Value, Outstanding 507,343    
Aggregate Intrinsic Value, Exercisable $ 472,019    
v3.24.0.1
Stock-Based Compensation - Schedule of Weighted-Average Assumptions Used to Value Options Granted to Employees (Detail)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Weighted average assumptions used to value options granted to employees      
Estimated dividend yield 0.00%    
Share-based Payment Arrangement, Option      
Weighted average assumptions used to value options granted to employees      
Expected term (years) 6 years 6 years 6 years
Expected volatility 64.40% 66.50% 64.30%
Risk-free interest rate 3.71% 2.91% 1.04%
Estimated dividend yield 0.00% 0.00% 0.00%
v3.24.0.1
Stock-Based Compensation - CEO Performance Option - Additional Information (Detail) - Performance Option - Chief Executive Officer
$ / shares in Units, $ in Millions
 1 Months Ended 12 Months Ended
Dec. 10, 2021
USD ($)
Oct. 31, 2021
USD ($)
tranche
$ / shares
shares
Dec. 31, 2023
USD ($)
shares
Dec. 31, 2022
USD ($)
shares
Stock-Based Compensation        
Derived service period     5 years  
2016 Incentive Award Plan        
Stock-Based Compensation        
Stock-based compensation expense | $ $ 158   $ 198 $ 262
Unrecognized stock-based compensation | $     $ 201  
Weighted-average period for recognition of stock based expense (in years)     1 year 7 months 6 days  
2016 Incentive Award Plan | Class A common stock        
Stock-Based Compensation        
Target amount of shares that can be purchased   16,000,000    
Number of tranches | tranche   8    
Increase/decrease of shares to be purchased based on relative shareholder return   20.00%    
Vesting period   10 years    
Granted (in shares)   19,200,000    
Exercise price (in dollars per share) | $ / shares   $ 68.29    
Grant-date fair value | $   $ 819    
Derived service period   5 years    
Holding period for sales after the first offering period     1 year  
Share-based compensation, options granted     19,200,000 19,200,000
Exercise of common stock options (in shares)     0  
Share-based compensation, options forfeited or expired     0  
Share-based compensation, options outstanding with aggregate intrinsic value | $     $ 70  
Share-based compensation, options outstanding with weighted average contractual life     7 years 9 months 18 days  
Share-based compensation, options exercisable with aggregate intrinsic value | $     $ 9  
Exercisable at end of period (in shares)     2,400,000  
Share-based compensation, options exercisable with weighted-average contractual life     7 years 9 months 18 days  
2016 Incentive Award Plan | Class A common stock | Maximum        
Stock-Based Compensation        
Target price per share | $ / shares   $ 340.00    
2016 Incentive Award Plan | Class A common stock | Minimum        
Stock-Based Compensation        
Target price per share | $ / shares   $ 90.00    
v3.24.0.1
Stock-Based Compensation - CEO Performance Option (Detail)
 1 Months Ended 12 Months Ended
Oct. 31, 2021
Dec. 31, 2023
Stock-Based Compensation    
Estimated dividend yield   0.00%
Performance Option | Chief Executive Officer    
Stock-Based Compensation    
Expected volatility 63.40%  
Risk-free interest rate 1.55%  
Estimated dividend yield 0.00% 0.00%
v3.24.0.1
Stock-Based Compensation - Restricted Stock - Additional Information (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Stock-Based Compensation      
Stock-based compensation expense $ 491,621 $ 498,642 $ 337,413
Restricted Stock      
Stock-Based Compensation      
Vesting period 4 years    
Unrecognized employee stock-based compensation $ 605,000    
Weighted-average period for recognition of stock based expense (in years) 2 years 10 months 24 days    
v3.24.0.1
Stock-Based Compensation - Summary of Restricted Stock Activity (Detail)
shares in Thousands
 12 Months Ended
Dec. 31, 2023
$ / shares
shares
Shares (in thousands)  
Unvested, Shares, beginning balance (in shares) | shares 8,747
Granted (in shares) | shares 6,898
Vested (in shares) | shares (3,575)
Forfeited/Cancelled (in shares) | shares (1,524)
Unvested, Shares, ending balance (in shares) | shares 10,546
Weighted- Average Grant Date Fair Value Per Share  
Unvested, beginning balance (in dollars per share) | $ / shares $ 57.41
Granted (in dollars per share) | $ / shares 63.81
Vested (in dollars per share) | $ / shares 55.01
Forfeited/Cancelled (in dollars per share) | $ / shares 58.74
Unvested, ending balance (in dollars per share) | $ / shares $ 62.22
v3.24.0.1
Stock-Based Compensation - ESPP - Additional Information (Detail) - USD ($)
$ in Thousands
 1 Months Ended 12 Months Ended
Jan. 01, 2024
Sep. 30, 2016
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Stock-Based Compensation          
Stock-based compensation expense     $ 491,621 $ 498,642 $ 337,413
ESPP          
Stock-Based Compensation          
Shares remained available for grant     14,400,000    
Maximum annual increase in shares available for grant (in shares)   8,000,000      
Maximum employee payroll deduction (as a percent)   100.00%      
Maximum offering period   2 years      
Period between purchases   6 months      
Price of ESPP shares as percentage of market price   85.00%      
Holding period for purchases after the first offering period   6 months      
Stock-based compensation expense     $ 24,000 $ 50,000 $ 62,000
Unrecognized employee stock-based compensation     $ 12,000    
Unrecognized stock-based compensation, recognition period     8 months 12 days    
ESPP | Subsequent Event          
Stock-Based Compensation          
Number of additional shares authorized for grant 4,400,000        
ESPP | Class A common stock          
Stock-Based Compensation          
Stock available for issuance (in shares)   8,000,000      
Maximum annual increase in shares available for issuance, percentage of outstanding shares   1.00%      
v3.24.0.1
Stock-Based Compensation - ESPP (Detail)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Weighted-average assumptions used to estimate the fair value of ESPP shares      
Estimated dividend yield 0.00%    
ESPP      
Weighted-average assumptions used to estimate the fair value of ESPP shares      
Expected term (years) 10 months 24 days 1 year 7 months 6 days
Expected volatility 60.30% 74.10% 62.30%
Risk-free interest rate 4.95% 2.53% 0.09%
Estimated dividend yield 0.00% 0.00% 0.00%
v3.24.0.1
Income Taxes - Domestic and Foreign Components of Income Before Income Taxes (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Income Tax Contingency [Line Items]      
Income before income taxes $ 267,995 $ 127,370 $ 122,036
Domestic      
Income Tax Contingency [Line Items]      
Income before income taxes 328,853 169,891 193,048
Foreign      
Income Tax Contingency [Line Items]      
Income before income taxes $ (60,858) $ (42,521) $ (71,012)
v3.24.0.1
Income Taxes - Components of Provision for (Benefit from) Income Taxes (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Current:      
Federal $ 120,049 $ 61,904 $ 10,332
State and local 24,827 34,797 (10,417)
Foreign 5,000 3,068 2,435
Total current provision 149,876 99,769 2,350
Deferred:      
Federal (51,822) (2,380) (21,287)
State and local (7,842) (23,465) 3,193
Foreign (1,157) 61 18
Total deferred provision (60,821) (25,784) (18,076)
Total provision for (benefit from) income taxes $ 89,055 $ 73,985 $ (15,726)
v3.24.0.1
Income Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Detail)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]      
U.S. federal statutory income tax rate 21.00% 21.00% 21.00%
State and local income taxes, net of federal benefit 5.00% 7.00% (5.30%)
Foreign income at other than U.S. rates 6.20% 9.50% 14.20%
Stock-based compensation 8.30% 31.00% (29.90%)
Meals and entertainment 1.00% 0.40% 0.20%
Nondeductible compensation 0.30% 1.60% 1.70%
Research and development credit (8.70%) (11.80%) (15.30%)
Other permanent items 0.10% (0.60%) 0.50%
Effective income tax rate 33.20% 58.10% (12.90%)
v3.24.0.1
Income Taxes - Tax Effects of Temporary Differences that Give Rise to Significant Portion of Deferred Tax Assets and Deferred Tax Liabilities (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Deferred tax assets (liabilities):    
Reserves and allowances $ 8,401 $ 5,428
Accrued expenses 12,217 7,466
Net operating losses 231,597 182,124
Research and development tax credit 18,220 17,359
Stock-based compensation 25,727 21,207
Prepaid expenses (944) (1,122)
Property and equipment (27,952) (29,020)
Intangibles 180,573 200,113
Capitalized software development costs 112,736 61,670
Operating lease assets (39,826) (45,493)
Operating lease liabilities 48,153 54,657
Other 1,776 1,258
Valuation allowance (415,829) (381,619)
Total deferred tax assets, net $ 154,849 $ 94,028
v3.24.0.1
Income Taxes - Additional Information (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax Contingency [Line Items]        
Research and development tax credits $ 18,220 $ 17,359    
Cash paid for income taxes 151,899 4,211 $ 3,608  
Gross unrecognized tax benefits 97,703 90,932 $ 86,331 $ 66,875
Unrecognized tax benefits, reduction to deferred tax assets 71,000 70,000    
Unrecognized tax benefits that would impact effective tax rate 27,000 21,000    
Other Liabilities, Noncurrent        
Income Tax Contingency [Line Items]        
Gross unrecognized tax benefits 98,000 $ 91,000    
Federal        
Income Tax Contingency [Line Items]        
Operating loss carryforwards 2,000      
State        
Income Tax Contingency [Line Items]        
Operating loss carryforwards 10,000      
Research and development tax credits 29,000      
Foreign        
Income Tax Contingency [Line Items]        
Operating loss carryforwards 1,001,000      
Research and development tax credits 2,000      
UNITED KINGDOM        
Income Tax Contingency [Line Items]        
Additional valuation allowance recorded 34,000      
International        
Income Tax Contingency [Line Items]        
Unremitted earnings of subsidiaries, foreign 7,000      
International | State        
Income Tax Contingency [Line Items]        
Cash paid for income taxes $ 0      
v3.24.0.1
Income Taxes - Schedule of Changes in Gross Unrecognized Tax Benefits (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]      
Beginning balance $ 90,932 $ 86,331 $ 66,875
Increases related to prior year tax positions 229 0 13,075
Decreases related to prior year tax positions 0 (84) 0
Increases related to current year tax positions 6,601 4,685 6,381
Settlements (59) 0 0
Expiration of statute of limitations 0 0 0
Ending balance $ 97,703 $ 90,932 $ 86,331
v3.24.0.1
Segment and Geographical Information - Additional Information (Detail)
 12 Months Ended
Dec. 31, 2023
Business
Segment
Segments, Geographical Areas [Abstract]  
Number of business activity | Business 1
Number of operating segments 1
Number of reportable segments 1
v3.24.0.1
Segment and Geographical Information - Gross Billings, Based on Billing Address of Clients or Client Affiliates (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Revenues From External Customers and Long-Lived Assets [Line Items]      
Gross Billings $ 9,430,653 $ 7,634,567 $ 6,129,627
US      
Revenues From External Customers and Long-Lived Assets [Line Items]      
Gross Billings 8,216,446 6,696,743 5,286,191
International      
Revenues From External Customers and Long-Lived Assets [Line Items]      
Gross Billings $ 1,214,207 $ 937,824 $ 843,436
v3.24.0.1
Segment and Geographical Information - Property and Equipment, Net and Operating Lease Assets, Presented by Principal Geographic Area (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Revenues From External Customers and Long-Lived Assets [Line Items]    
Property and equipment, net and operating lease assets $ 359,154 $ 394,155
US    
Revenues From External Customers and Long-Lived Assets [Line Items]    
Property and equipment, net and operating lease assets 278,998 316,000
International    
Revenues From External Customers and Long-Lived Assets [Line Items]    
Property and equipment, net and operating lease assets $ 80,156 $ 78,155
v3.24.0.1
Commitments and Contingencies - Schedule of Purchase Obligations (Detail)
$ in Thousands
Dec. 31, 2023
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2024 $ 155,703
2025 125,368
2026 118,676
2027 19,667
2028 0
Total $ 419,414
v3.24.0.1
Commitments and Contingencies - Additional Information (Detail)
 1 Months Ended
Jun. 27, 2022
complaint
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Other Commitments [Line Items]      
Number of litigation complaints | complaint 2    
Indemnifications      
Other Commitments [Line Items]      
Recorded obligation | $   $ 0 $ 0