ALTERYX, INC., 10-K filed on 2/14/2020
Annual Report
v3.19.3.a.u2
Cover Page - USD ($)
$ in Billions
12 Months Ended
Dec. 31, 2019
Feb. 07, 2020
Jun. 28, 2019
Document Information [Line Items]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2019    
Document Transition Report false    
Entity File Number 001-38034    
Entity Registrant Name Alteryx, Inc.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 90-0673106    
Entity Address, Address Line One 3345 Michelson Drive,    
Entity Address, Address Line Two Suite 400,    
Entity Address, City or Town Irvine,    
Entity Address, State or Province CA    
Entity Address, Postal Zip Code 92612    
City Area Code 888    
Local Phone Number 836-4274    
Title of 12(b) Security Class A Common Stock, $0.0001 par value per share    
Trading Symbol AYX    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Public Float     $ 5.4
Amendment Flag false    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Entity Central Index Key 0001689923    
Current Fiscal Year End Date --12-31    
Documents Incorporated by Reference
Portions of the registrant’s definitive proxy statement for its 2020 Annual Meeting of Stockholders, or Proxy Statement, to be filed within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, are incorporated by reference in Parts II and III. Except with respect to information specifically incorporated by reference in this Annual Report, the Proxy Statement shall not be deemed to be filed as part hereof.
   
Class A Common Stock      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   52,269,340  
Class B Common Stock      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   13,136,756  
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Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Statement [Abstract]      
Revenue $ 417,910 $ 253,570 $ 131,607
Cost of revenue 39,151 22,800 21,803
Gross profit 378,759 230,770 109,804
Operating expenses:      
Research and development 69,100 43,449 29,342
Sales and marketing 191,735 109,284 66,420
General and administrative 79,943 48,267 32,241
Total operating expenses 340,778 201,000 128,003
Income (loss) from operations 37,981 29,770 (18,199)
Interest expense (21,844) (7,378) 0
Other income (expense), net 10,434 3,042 (205)
Loss on induced conversion and debt extinguishment (20,507) 0 0
Income (loss) before benefit of income taxes 6,064 25,434 (18,404)
Benefit of income taxes (21,079) (2,586) (905)
Net income (loss) 27,143 28,020 (17,499)
Less: Accretion of Series A redeemable convertible preferred stock 0 0 (1,983)
Net income (loss) attributable to common stockholders $ 27,143 $ 28,020 $ (19,482)
Net Income (loss) per share attributable to common stockholders, basic (in dollars per share) $ 0.43 $ 0.46 $ (0.37)
Net income (loss) per share attributable to common stockholders, diluted (in dollars per share) $ 0.40 $ 0.43 $ (0.37)
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, basic (in shares) 63,424 60,829 53,006
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, diluted (in shares) 68,661 64,744 53,006
Other comprehensive income (loss), net of tax:      
Net unrealized holding gain (loss) on investments, net of tax $ 714 $ (22) $ (217)
Foreign currency translation adjustments, net of tax (1,669) (195) (128)
Other comprehensive loss, net of tax (955) (217) (345)
Total comprehensive income (loss) $ 26,188 $ 27,803 $ (17,844)
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Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 409,949 $ 89,974
Short-term investments 376,995 239,718
Accounts receivable, net of allowance for doubtful accounts and sales reserves of $2,662 and $2,297 as of December 31, 2019 and December 31, 2018, respectively 129,912 94,922
Prepaid expenses and other current assets 55,129 37,199
Total current assets 971,985 461,813
Property and equipment, net 20,296 11,729
Operating lease right-of-use assets 33,600  
Long-term investments 187,921 96,551
Goodwill 36,910 9,494
Intangible assets, net 22,083 7,491
Other assets 69,543 31,089
Total assets 1,342,338 618,167
Current liabilities:    
Accounts payable 9,383 5,028
Accrued payroll and payroll related liabilities 53,683 24,659
Accrued expenses and other current liabilities 31,715 10,878
Deferred revenue 83,895 84,015
Convertible senior notes, net 68,154 0
Total current liabilities 246,830 124,580
Convertible senior notes, net 630,321 173,647
Deferred revenue 2,733 2,130
Operating lease liabilities 29,293  
Other liabilities 2,660 4,345
Deferred income tax, net 5,594 11,647
Total liabilities 917,431 316,349
Commitments and contingencies (Note 15)
Stockholders’ equity:    
Preferred stock, $0.0001 par value: 10,000 shares authorized as of December 31, 2019 and December 31, 2018, respectively; no shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively 0 0
Common stock, $0.0001 par value: 500,000 Class A shares authorized, 52,056 and 37,832 shares issued and outstanding, as of December 31, 2019 and December 31, 2018, respectively; 500,000 Class B shares authorized, 13,204 and 23,748 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively 7 6
Additional paid-in capital 412,191 315,291
Retained earnings (accumulated deficit) 14,235 (12,908)
Accumulated other comprehensive loss (1,526) (571)
Total stockholders’ equity 424,907 301,818
Total liabilities and stockholders’ equity $ 1,342,338 $ 618,167
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Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Allowance for doubtful accounts and sales reserves $ 2,662 $ 2,297
Preferred stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized (in shares) 10,000,000 10,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Class A Common Stock    
Common stock par value per share (in dollars per share) $ 0.0001 $ 0.0001
Common stock shares authorized (in shares) 500,000,000 500,000,000
Common Stock shares issued (in shares) 52,056,000 37,832,000
Common stock shares outstanding (in shares) 52,056,000 37,832,000
Class B Common Stock    
Common stock par value per share (in dollars per share) $ 0.0001 $ 0.0001
Common stock shares authorized (in shares) 500,000,000 500,000,000
Common Stock shares issued (in shares) 13,204,000 23,748,000
Common stock shares outstanding (in shares) 13,204,000 23,748,000
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Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock
Additional Paid-in Capital
Retained Earnings (Accumulated Deficit)
Accumulated Other Comprehensive Income (Loss)
Redeemable Convertible Preferred Stock
Beginning balance (in shares) at Dec. 31, 2016           14,647
Beginning balance at Dec. 31, 2016           $ 99,182
Increase (Decrease) in Temporary Equity [Roll Forward]            
Accretion of Series A redeemable convertible preferred stock issuance costs and redemption feature           $ 1,983
Conversion redeemable convertible preferred stock to common stock (in shares)           (14,647)
Conversion redeemable convertible preferred stock to common stock           $ (101,165)
Ending balance (in shares) at Dec. 31, 2017           0
Ending balance at Dec. 31, 2017           $ 0
Beginning balance (in shares) at Dec. 31, 2016   32,674        
Beginning Balance at Dec. 31, 2016 $ (77,610) $ 3 $ 8,443 $ (86,047) $ (9)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Issuance of common stock (in shares)   10,350        
Issuance of common stock in initial public offering, net of issuance costs of $3,344 131,413 $ 1 131,412      
Accretion of Series A redeemable convertible preferred stock issuance costs and redemption feature (1,983)   (1,983)      
Conversion redeemable convertible stock to common stock (in shares)   14,647        
Conversion redeemable convertible stock to common stock 101,165 $ 1 101,164   0  
Shares issued pursuant to stock awards, net of tax withholdings related to vesting of restricted stock units (in shares)   1,687        
Shares issued pursuant to stock awards, net of tax withholdings related to vesting of restricted stock units 3,655   3,655      
Equity issued in business combination (in shares)   265        
Equity issued in business combination 5,285   5,285      
Stock-based compensation 8,886   8,886      
Equity settled contingent consideration (in shares)   12        
Equity settled contingent consideration 375   375      
Excess tax benefit from stock-based compensation 162   162      
Cumulative translation adjustment (128)       (128)  
Unrealized gain (loss) on investments (217)       (217)  
Net income (loss) (17,499)     (17,499)    
Ending balance (in shares) at Dec. 31, 2017   59,635        
Ending Balance at Dec. 31, 2017 153,504 $ 5 257,399 (103,546) (354)  
Ending balance (in shares) at Dec. 31, 2018           0
Ending balance at Dec. 31, 2018           $ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Shares issued pursuant to stock awards, net of tax withholdings related to vesting of restricted stock units (in shares)   1,925        
Shares issued pursuant to stock awards, net of tax withholdings related to vesting of restricted stock units 11,425 $ 1 11,424      
Stock-based compensation 16,647   16,647      
Equity settled contingent consideration (in shares)   19        
Equity settled contingent consideration 656   656      
Equity component of Senior Notes, net of issuance costs and tax 43,569   43,569      
Purchase of capped calls, net of tax (14,545)   (14,545)      
Cumulative translation adjustment (195)       (195)  
Unrealized gain (loss) on investments (22)       (22)  
Net income (loss) 28,020     28,020    
Ending balance (in shares) at Dec. 31, 2018   61,579        
Ending Balance at Dec. 31, 2018 301,818 $ 6 315,291 (12,908) (571)  
Ending balance (in shares) at Dec. 31, 2019           0
Ending balance at Dec. 31, 2019           $ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Conversion redeemable convertible stock to common stock (in shares)   2,190        
Conversion redeemable convertible stock to common stock (7,904) $ 1 (7,905)      
Extinguishment of capped calls (in shares)   (285)        
Receipt of Section 16(b) disgorgement, net of tax effect 3,743   3,743      
Shares issued pursuant to stock awards, net of tax withholdings related to vesting of restricted stock units (in shares)   1,755        
Shares issued pursuant to stock awards, net of tax withholdings related to vesting of restricted stock units 9,513 $ 0 9,513      
Stock-based compensation 33,125   33,125      
Equity settled contingent consideration (in shares)   21        
Equity settled contingent consideration 750   750      
Equity component of Senior Notes, net of issuance costs and tax 124,173   124,173      
Purchase of capped calls, net of tax (66,499)   (66,499)      
Cumulative translation adjustment (1,669)       (1,669)  
Unrealized gain (loss) on investments 714       714  
Net income (loss) 27,143     27,143    
Ending balance (in shares) at Dec. 31, 2019   65,260        
Ending Balance at Dec. 31, 2019 $ 424,907 $ 7 $ 412,191 $ 14,235 $ (1,526)  
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Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical)
$ in Thousands
12 Months Ended
Dec. 31, 2017
USD ($)
Statement of Stockholders' Equity [Abstract]  
Stock issuance cost $ 3,344
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Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Cash flows from operating activities:      
Net income (loss) $ 27,143 $ 28,020 $ (17,499)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:      
Depreciation and amortization 8,292 5,218 3,484
Non-cash operating lease cost 5,088    
Stock-based compensation 33,125 16,647 8,886
Amortization (accretion) of discounts and premiums on investments, net (3,030) (1,382) 473
Amortization of debt discount and issuance costs 18,625 6,652 0
Deferred income taxes (22,844) (3,434) (1,425)
Loss on induced conversion and debt extinguishment 20,507 0 0
Other non-cash operating activities, net (1,328) 1,024 2,235
Changes in operating assets and liabilities, net of effect of business acquisitions      
Accounts receivable (35,325) (45,640) (15,325)
Deferred commissions (20,461) (12,741) (3,663)
Prepaid expenses and other current assets and other assets (34,971) (16,077) (3,508)
Accounts payable 2,319 4,530 (1,483)
Accrued payroll and payroll related liabilities 28,651 12,898 4,047
Accrued expenses, other current liabilities, operating lease liabilities, and other liabilities 8,091 1,315 3,048
Deferred revenue 310 29,059 39,835
Net cash provided by operating activities 34,192 26,089 19,105
Cash flows from investing activities:      
Purchases of property and equipment (11,453) (6,728) (3,669)
Cash paid in business acquisitions, net of cash acquired (40,949) (3,537) (9,097)
Purchases of investments (602,703) (445,705)  
Purchases of investments     (91,517)
Sales and maturities of investments 377,974 185,112 37,862
Net cash used in investing activities (277,131) (270,858) (66,421)
Cash flows from financing activities:      
Proceeds from issuance of Notes, net of issuance costs 783,321 224,246 0
Principal payments on 2023 Notes (145,241) 0 0
Purchase of capped calls (87,360) (19,113) 0
Proceeds from receipt of Section 16(b) disgorgement 4,918 0 0
Proceeds from initial public offering, net of underwriting commissions and discounts 0 0 134,757
Payment of initial public offering costs 0 0 (2,396)
Proceeds from exercise of stock options 20,156 14,154 4,342
Minimum tax withholding paid on behalf of employees for restricted stock units (10,643) (2,730) (674)
Other financing activity (1,305) (577) (328)
Net cash provided by financing activities 563,846 215,980 135,701
Effect of exchange rate changes on cash and cash equivalents (444) (166) 25
Net increase (decrease) in cash, cash equivalents, and restricted cash 320,463 (28,955) 88,410
Cash, cash equivalents, and restricted cash—beginning of year 90,961 119,916 31,506
Cash, cash equivalents, and restricted cash—end of year 411,424 90,961 119,916
Supplemental disclosure of cash flow information:      
Cash paid for interest 930 617 0
Cash paid for income taxes 1,630 1,782 333
Supplemental disclosure of noncash investing and financing activities:      
Right-of-use assets obtained in exchange for new operating lease liabilities 13,312    
Property and equipment recorded in accounts payable 2,002 720 0
Consideration for business acquisition included in accrued expenses and other current liabilities and other liabilities 3,000 1,200 1,660
Contingent consideration settled through issuance of common stock 750 656 375
Conversion of Series A redeemable convertible preferred stock to common shares 0 0 101,165
Consideration for business acquisition from issuance of common stock 0 0 5,285
Accretion of Series A redeemable convertible preferred stock $ 0 $ 0 $ 1,983
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Organization and Nature of Operations
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Nature of Operations
1. Organization and Nature of Operations
Alteryx, Inc. was initially organized in California in March 1997 as SRC, LLC, commenced principal operations in November 1997, changed its name to Alteryx, LLC in March 2010, and converted into a Delaware corporation in March 2011 under the name Alteryx, Inc. Alteryx, Inc. and its subsidiaries, or we, our, or us, are headquartered in Irvine, California.
We are improving business through data science and analytics by enabling analytic producers, regardless of technical acumen, to quickly and easily transform data into actionable insights and deliver improved data-driven business outcomes. Every day, our users leverage our end-to-end analytic platform to quickly and easily discover, access, prepare, and analyze data from a multitude of sources, then deploy and share analytics at scale. The ease-of-use, speed, and sophistication that our platform provides is enhanced through intuitive and highly repeatable visual workflows.
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Significant Accounting Policies
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Significant Accounting Policies
2. Significant Accounting Policies
Principles of Consolidation and Basis of Presentation
Our consolidated financial statements are presented in accordance with accounting standards generally accepted in the United States of America, or U.S. GAAP, and include the accounts of Alteryx, Inc. and its wholly owned subsidiaries after elimination of intercompany transactions and balances.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent 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 from these estimates and assumptions.
On an ongoing basis, our management evaluates estimates and assumptions, including those related to determination of standalone selling prices of our products and services, income tax valuations, stock-based compensation, goodwill, and intangible assets valuations and recoverability. We base our estimates on historical data and experience, as well as various other factors that our 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.
Concentration of Risk
Financial instruments, which subject us to concentrations of credit risk, consist primarily of cash and cash equivalents, investments, and trade accounts receivable. We maintain our cash and cash equivalents and investments with three major financial institutions and a portion of such balances exceed or are not subject to Federal Deposit Insurance Corporation, or FDIC, insurance limits.
We extend differing levels of credit to customers, do not require collateral deposits, and, when necessary, maintain reserves for potential credit losses based upon the expected collectability of accounts receivable. We manage credit risk related to our customers by following credit approval processes, establishing credit limits, performing periodic evaluations of credit worthiness and applying other credit risk monitoring procedures.
Accounts receivable include amounts due from customers with principal operations primarily in the United States.
As of December 31, 2019 and 2018, one of our distributors accounted for 10.6% and 10.1% of our total accounts receivable balance, respectively. No other customers accounted for 10% or more of our accounts receivable balance or 10% or more of our revenue in any years presented.
Fair Value of Financial Instruments
We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. We determine fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the
following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
 
 
Level 1
Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.
 
 
Level 2
Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active near the measurement date; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
 
 
Level 3
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The fair value of our money market funds was determined based on “Level 1” inputs.
The fair value of our certificates of deposit, commercial paper, U.S. Treasury and agency bonds, and corporate bonds were determined based on “Level 2” inputs. The valuation techniques used to measure the fair value of certificates of deposit and commercial paper included observable market-based inputs for similar assets, which primarily include yield curves and time-to-maturity factors. The valuation techniques used to measure the fair value of U.S. Treasury and agency bonds and corporate bonds included standard observable inputs, including reported trades, quoted market prices, matrix pricing, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets or benchmark securities and data provided by third parties as many of the bonds are not actively traded.
There were no marketable securities measured on a recurring basis in the “Level 3” category.
We have not elected the fair value option as prescribed by ASC 825, The Fair Value Option for Financial Assets and Financial Liabilities, for our financial assets and liabilities that are not otherwise required to be carried at fair value. Under ASC 820, Fair Value Measurements and Disclosures, or ASC 820, material financial assets and liabilities not carried at fair value, such as our Notes and accounts receivable and payable, are reported at their carrying values.
Cash and Cash Equivalents and Restricted Cash
We consider cash and cash equivalents to include short-term, highly liquid investments that are readily convertible to known amounts of cash and so near their maturity that they present an insignificant risk of changes in the value, including investments that mature within three months from the date of original purchase. Amounts receivable from a credit card processor of approximately $0.6 million and $0.4 million as of December 31, 2019 and 2018, respectively, are considered cash equivalents because they were both short-term and highly liquid in nature and are typically converted to cash within three days of the sales transaction.
We had restricted cash of $1.5 million and $1.0 million as of December 31, 2019 and 2018, respectively. This balance, presented in other assets on the consolidated balance sheet, relates to amounts required to be restricted as to use by our letters of credit associated with our leases and by our credit card processor.
Investments in Marketable Securities
Our investments consist of available-for-sale marketable securities. The classification of investments is determined at the time of purchase and reevaluated at each balance sheet date. Investments are stated at fair value and are classified as current or non-current based on the nature of the securities as well as their stated maturities. The net unrealized gains or losses on available-for-sale securities are recorded as a component of accumulated other comprehensive income (loss), net of income taxes, on the consolidated statements of redeemable convertible preferred stock and stockholders' equity.
At each balance sheet date, we assess available-for-sale securities in an unrealized loss position to determine whether the unrealized loss is other than temporary. We consider factors including the significance of the decline in value as compared to the cost basis, underlying factors contributing to a decline in the prices of securities in a single asset class, how long the market value of the security has been less than its cost basis, the security’s relative performance versus its peers, sector or asset class, expected market volatility, and the market and economy in general, and, if determined to be other than temporary, will record an other than temporary impairment charge.
Accounts Receivable, Allowance for Doubtful Accounts, and Sales Reserves
Our accounts receivable consists of amounts due from customers and are typically unsecured. Accounts receivable are recorded at the invoiced amount and are non-interest bearing.
The allowance for doubtful accounts is estimated and established by assessing individual accounts receivable over a specific age and dollar value, and all other balances are pooled based on historical collection experience. Additions to the allowance are charged to general and administrative expenses or revenue in the consolidated statements of operations and comprehensive income (loss), or against deferred revenue in the consolidated balance sheets depending on the timing of the addition in relation to the contract term. Accounts receivable are written off against the allowance when an account balance is deemed uncollectible.
We estimate a sales reserve based upon the historical adjustments made to customer billings. Such reserve is recorded as a reduction of revenue and deferred revenue in the consolidated statements of operations and comprehensive income (loss) and balance sheets, respectively.
Assets Recognized from the Costs to Obtain a Contract with a Customer
We record an asset for the incremental costs of obtaining a contract with a customer, which primarily consists of sales commissions and partner referral fees that are earned upon execution of contracts. We pay commissions for new product sales as well as for renewals of existing contracts, and partner referral fees only for new product sales. For customer contracts in which the commissions paid on new business and renewals are commensurate, we generally amortize these costs over the contractual term of the contract, consistent with the pattern of revenue recognition for each performance obligation. For customer contracts in which the commissions paid on new business and renewals are not commensurate and for partner referral fees, we amortize the costs on new business over an expected period of benefit, which we have determined to be approximately four years. The expected period of benefit was determined by taking into consideration our customer contracts, the duration of our relationships with our customers and the useful life of our technology. In capitalizing and amortizing deferred commissions and partner referral fees, we have elected to apply a portfolio approach. We include amortization of this asset in sales and marketing expense in our consolidated statements of operations and comprehensive income (loss).
Royalties
We pay royalties associated with licensed third-party syndicated data sold with our platform and we recognize royalty expense to cost of revenue in our consolidated statements of operations and comprehensive income (loss) when incurred. For the years ended December 31, 2019, 2018, and 2017, we recognized royalty expense of approximately $12.2 million, $7.2 million, and $9.4 million respectively.
Property and Equipment
Property and equipment are stated at historical cost, less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or lease terms. Useful lives by asset category are as follows:
Computer equipment
  
3 years
Furniture and fixtures
  
3 to 7 years
Leasehold improvement
  
Shorter of useful life or lease term

Repairs and maintenance costs are charged to expense as incurred. Upon the sale or retirement of property and equipment, the cost and the related accumulated depreciation or amortization are removed from the accounts, with any resulting gain or loss included in our consolidated statements of operations and comprehensive income (loss).
Intangible Assets
Intangible assets consist primarily of acquired developed technology. We determine the appropriate useful life of our intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives of two to eight years, using the straight-line method, which approximates the pattern in which the economic benefits are consumed.
Impairment of Long-Lived Assets
We review our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be fully recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. Fair value is determined based on discounted cash flows or appraised values, depending upon the nature of the assets.
Business Combinations
The results of businesses acquired in a business combination are included in our consolidated financial statements from the date of the acquisition. We allocated the purchase price, including the fair value of any non-cash and contingent consideration, to the identifiable assets and liabilities of the relevant acquired business at their acquisition date fair values. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill.
Contingent consideration payable in cash or a fixed dollar amount settleable in a variable number of shares is classified as a liability and recorded at fair value, with changes in fair value recorded in general and administrative expenses each period. Transaction costs associated with business combinations are expensed as incurred, and are included in general and administrative expense in the consolidated statements of operations and comprehensive income (loss).
We perform valuations of assets acquired, liabilities assumed, and contingent consideration and allocate the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired, liabilities assumed, and contingent consideration requires us to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, the probability of achievement of specified milestones, and selection of comparable companies. We engage the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired, liabilities assumed, and contingent consideration in a business combination.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. We test goodwill for impairment in accordance with the provisions of ASC 350, Intangibles – Goodwill and Other, ASC 350. Goodwill is tested for impairment at least annually at the reporting unit level or whenever events or changes in circumstances indicate that goodwill might be impaired. Events or changes in circumstances which could trigger an impairment review include a significant adverse change in legal factors or in the business climate, unanticipated competition, loss of key personnel, significant changes in the use of the acquired assets or our strategy, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations.
ASC 350 provides that an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if an entity concludes otherwise, then it is required to perform an impairment test.
The impairment test involves comparing the estimated fair value of a reporting unit with its book value, including goodwill. If the estimated fair value exceeds book value, goodwill is considered not to be impaired. If, however, the fair value of the reporting unit is less than book value, then an impairment loss is recognized in an amount equal to the amount that the book value of the reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.
We have one reporting unit and we test for goodwill impairment annually during the fourth quarter of each calendar year using a quantitative assessment. At each of December 31, 2019 and 2018, we determined our goodwill was not impaired as our fair value significantly exceeded the carrying value of our net assets.
Revenue Recognition - ASC 605
We applied the provisions of ASC 605, as described below, to revenue recognized during the year ended December 31, 2017. For each of the years ended December 31, 2018 and 2019, the provisions of ASC 606, as described below, were applied.
Revenue was recognized when all four revenue recognition criteria had been met: persuasive evidence of an arrangement existed, the product had been delivered or the service had been performed, the fee was fixed or determinable, and collection was probable or reasonably assured. Determining whether and when some of these criteria had been satisfied often involved exercising
judgment and using estimates and assumptions that could have had a significant impact on the timing and amount of revenue that was recognized. Invoiced amounts had been recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria had been met.
We accounted for revenue from software and related products and services in accordance with ASC 985-605, Software, or ASC 985-605. For the duration of the license term, the customer received coterminous PCS. We did not provide PCS on a standalone or renewal basis unless the customer renewed the software subscription license and, as such, we were unable to determine vendor specific objective evidence of fair value, or VSOE, of PCS. Accordingly, revenue for the subscription-based software licenses and PCS was recognized ratably beginning on the date the license was first made available to the customer and continued through the end of the subscription term.
We also recognized revenue from the sale of a hosted version of our platform which was delivered pursuant to a hosting arrangement. Revenue from hosted services was recognized ratably beginning on the date the services were first made available to the customer and continued through the end of the contractual service term. Hosted revenue arrangements were outside the scope of ASC 986-605 software revenue recognition guidance as customers did not have the right to take possession of the software code underlying our hosted solutions.
Our arrangements may have included the resale of third-party syndicated data content pursuant to subscription arrangements, and professional services. Data subscriptions provided the customer the right to receive data that was updated periodically over the term of the license agreement, and revenue was recognized ratably over the contract period once the customer had access to the data. We recognized revenue from the resale of third-party syndicated data on a gross basis when (i) we were the primary obligor, (ii) we had latitude to establish the price charged, and (iii) we bore credit risk in the transaction. Revenue from professional services, which was comprised primarily of training and consulting services, was recognized as the services were provided.
We also entered into multiple element revenue arrangements in which a customer may have purchased a combination of software, data, and services.
For multiple element arrangements that contained only software and software-related elements, revenue was allocated and deferred for the undelivered elements based on their VSOE. In situations where VSOE existed for all elements (delivered and undelivered), the revenue to be earned under the arrangement among the various elements was allocated based on their relative fair value. For arrangements where VSOE existed only for the undelivered elements, the full fair value of the undelivered elements was deferred and the difference between the total arrangement fee and the amount deferred for the undelivered items was recognized as revenue. If VSOE did not exist for an undelivered service element, the revenue from the entire arrangement was recognized over the service period, once all services had commenced. Changes in assumptions or judgments or changes to the elements in a software arrangement could have caused a material increase or decrease in the amount of revenue recognized in a particular period.
VSOE was determined for each element, or a group of elements sold on a combined basis, such as our software and PCS, based on historical standalone sales to third parties or the price to be charged when the product or service, or group of products or services, was available. In determining VSOE, a substantial majority of the selling price for a product or service must have fallen within a reasonably narrow pricing range.
Revenue related to the delivered products or services was recognized only if (i) the above revenue recognition criteria were met, (ii) any undelivered products or services were not essential to the functionality of the delivered products and services, (iii) payment for the delivered products or services was not contingent upon delivery of the remaining products or services, and (iv) there was an enforceable claim to receive the amount due in the event that the undelivered products or services were not delivered.
For multiple-element arrangements that contained both software and non-software elements, revenue was allocated on a relative fair value basis to software or software-related elements as a group and any non-software elements separately based on the selling price hierarchy. The selling price for each deliverable was determined using VSOE of selling price, if it existed, or third-party evidence of fair value, or TPE. If neither VSOE nor TPE existed for a deliverable, best estimate of selling price, or BESP, was used. Once revenue was allocated to software or software-related elements as a group, revenue was recognized in accordance with software revenue accounting guidance. Revenue allocated to non-software elements was recognized in accordance with SEC Staff Accounting Bulletin Topic 13, Revenue Recognition. Revenue was recognized when revenue recognition criteria were met for each element.
Judgment was required to determine VSOE or BESP. For VSOE, we considered multiple factors including, but not limited to, product types, geographies, sales channels, and customer sizes and, for BESP, we also considered market conditions, competitive landscape, internal costs, gross margin objectives, and pricing practices. Pricing practices taken into consideration include historic
contractually stated prices, volume discounts, where applicable, and price lists. BESP was generally used for offerings that are not typically sold on a standalone basis or when the selling prices for a product or service did not fall within a reasonably narrow pricing range.
Revenue generated from sales arrangements through distributors was recognized in accordance with our revenue recognition policies as described above at the amount invoiced to the distributor. We recognized revenue at the net amount invoiced to the distributor, as opposed to the gross amount the distributor invoiced their end customer, as we have determined that (i) we were not the primary obligor in these arrangements, (ii) we did not have latitude to establish the price charged to the end-customer, and (iii) we did not bear credit risk in the transaction with the end-customer.
Revenue Recognition - ASC 606
Our revenue is derived from the licensing of subscription-based software, data subscription services, and professional services, including training and consulting services. The subscription-based license includes access to hosted services and software and post-contract support, or PCS, which provides the customer the right to receive when-and-if-available unspecified future updates, upgrades and enhancements, and technical product support. We implemented the provisions of ASC 606, Revenue from Contracts with Customers, or ASC 606, and all related appropriate guidance, effective as of January 1, 2018 under the modified retrospective method. The core principle of ASC 606 is to recognize revenue upon the transfer of goods or services to our customers in an amount that reflects the consideration to which we expect to be entitled. In order to adhere to this core principle, we apply the following five-step approach:
identify the contract with a customer;
identify the performance obligations in the contract;
determine the transaction price;
allocate the transaction price to the performance obligations in the contract; and
recognize revenue when (or as) we satisfy a performance obligation.
We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for goods or services we transfer to the customer.
Revenue is measured based on consideration specified in a contract with a customer, and excludes any taxes we collect concurrent with revenue-producing activities. Most of our contracts contain a fixed transaction price. Our subscription agreements typically range from one to three years and are billed annually in advance with net payment terms of 60 days or less. The primary purpose of our payment and invoicing terms is to provide customers with predictable ways to purchase our software and services, and not to provide customers with financing.
Our contracts with customers typically contain multiple performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. All of our licenses are sold as subscription-based, on-premise, licenses and are bundled with maintenance and support, or PCS, and cloud-based offerings. In addition to our on-premise licenses, we sell subscriptions to third-party syndicated data and provide professional service offerings primarily related to trainings for our customers. We allocate the transaction price of the contract to each performance obligation using the relative standalone selling price, or SSP, of each distinct good or service in the contract. We determine estimates of SSP based on sales of goods and services sold on a standalone basis, our overall pricing strategies, market conditions, including the geographic locations in which the products are sold, and market data. We review the SSP for each of our performance obligations at least every financial reporting period and update it when appropriate to ensure that the practices employed reflect our recent pricing experience and maximize the use of observable data.
We recognize revenue when we satisfy a performance obligation by transferring control of a good or service to a customer. Revenue related to our subscription-based licenses is recognized at a point in time when the platform is first made available to the customer, or the beginning of the subscription term, if later. Revenue related to PCS, cloud-based offerings, and data subscriptions is recognized ratably over the subscription terms. Professional services revenue is recognized when the services are provided to the customer, or when they expire.

Contract Assets and Contract Liabilities
Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to our contracts with customers. Contract assets primarily relate to unbilled amounts for contracts with customers for which the amount of revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional. Contract assets are recorded as current if the invoice will be delivered to the customer within the succeeding 12-month period with the remaining recorded as long-term. Current contract assets are included
in prepaid expenses and other current assets and long-term contract assets are included in other assets on our consolidated balance sheets.
Contract liabilities, or deferred revenue, are recorded for amounts that are collected in advance of the satisfaction of performance obligations. These liabilities are classified as current if the performance obligation will be satisfied during the succeeding 12-month period and the remaining portion is recorded as non-current deferred revenue in our consolidated balance sheet.
Cost of Revenue
Cost of revenue is accounted for in accordance with ASC 705, Cost of Sales and Services, and consists of employee-related costs, including salaries and bonuses, stock-based compensation expense, and employee benefit costs associated with our customer support and professional services organizations, expenses related to hosting and operating our cloud infrastructure in a third-party data center, licenses of third-party syndicated data, amortization of acquired completed technology intangible assets, and related overhead expenses. Out-of-pocket travel costs related to the delivery of professional services are typically reimbursed by the customers and are accounted for as both revenue and cost of revenue in the period in which the cost is incurred.
Research and Development
Research and development expense consists primarily of employee-related costs, including salaries and bonuses, stock-based compensation expense, and employee benefits costs, depreciation of equipment used in research and development for our research and development employees, third-party contractor costs, and related allocated overhead costs. Product development expenses, other than software development costs qualifying for capitalization, are expensed as incurred.

Software Development Costs
Costs incurred in the development of new software products and enhancements to existing software products to be accounted for under software revenue recognition guidance are accounted for in accordance with ASC 985-20, Costs of Software to be Sold, Leased, or Marketed, or ASC 985-20. These costs, consisting primarily of salaries and related payroll costs, are expensed as incurred until technological feasibility has been established. After technological feasibility is established, costs are capitalized in accordance with ASC 985-20. Because our process for developing software is completed concurrently with the establishment of technological feasibility, no internally generated software development costs have been capitalized as of December 31, 2019 and 2018.
We account for costs to develop or obtain internal-use software in accordance with ASC 350-40, Internal-Use Software, or ASC 350-40. We also account for costs of significant upgrades and enhancements resulting in additional functionality under ASC 350-40. These costs are primarily software purchased for internal-use, purchased software licenses, implementation costs, and development costs related to our hosted product which is accessed by customers on a subscription basis. Costs incurred for maintenance, training, and minor modifications or enhancements are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which is generally three years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Development costs related to internal-use software were insignificant during each of the years ended December 31, 2019 and 2018 and, therefore, have not been capitalized.

Convertible Senior Notes
Our Notes (as defined in Note 9, Convertible Senior Notes, of these notes to our consolidated financial statements) are accounted for in accordance with ASC 470‑20, Debt with Conversion and Other Options, or ASC 470-20. Pursuant to ASC 470‑20, issuers of certain convertible debt instruments that have a net settlement feature and may be settled wholly or partially in cash upon conversion are required to separately account for the liability (debt) and equity (conversion option) components of the instrument. The carrying amount of the debt component for each series of our Notes was calculated by estimating the fair value of similar liabilities that do not have associated convertible features. The carrying amount of the equity component for each series of our Notes was determined by deducting the fair value of the debt component from their respective principal amounts. The difference between the principal amount of each series of our Notes and its respective fair value of debt component are amortized to interest expense over its respective terms using the effective interest method. The equity component, net of issuance costs and deferred tax effects, of each series of our Notes is presented within additional paid-in-capital in our consolidated balance sheet, and will not be remeasured as long as it continues to meet the requirements for equity classification. In accounting for the issuance costs related to our Notes, the allocation of issuance costs incurred between the debt and equity components was based on their relative values.
Leases
Through December 31, 2018, we recognized rent expense related to operating leases on a straight-line basis over the lease term and, accordingly, recorded the difference between rent payments and rent expense as a deferred rent liability. Effective January 1, 2019, we adopted ASU 2016-02, Leases, or ASC 842. See Recently Adopted Accounting Pronouncements below.
Under ASC 842, we determine if an arrangement is a lease at contract inception. Operating leases are included in operating lease right-of-use assets, accrued expenses and other current liabilities and operating lease liabilities in our consolidated balance sheets. Operating lease charges are recorded in operating expenses in our consolidated statements of operations and comprehensive income (loss).
Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. We do not separate lease and non-lease components for all underlying asset classes. As most of our leases do not provide a readily determinable implicit rate, we estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. We determine our incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the applicable country or region. The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. The lease term includes options to extend or terminate when we are reasonably certain the option will be exercised. In general, we are not reasonably certain to exercise such options. We recognize lease expense for minimum lease payments on a straight-line basis over the lease term, while variable lease payments, such as common area maintenance, are recognized as incurred. We elected the practical expedient to not recognize operating lease right-of-use assets and operating lease liabilities that arise from short-term leases (i.e., leases with a term of 12 months or less).
Advertising Costs
Advertising costs are expensed as incurred. We incurred advertising costs of approximately $17.8 million, $9.1 million, and $5.5 million for the years ended December 31, 2019, 2018, and 2017, respectively. Such costs primarily relate to our annual user conferences, online and print advertising as well as sponsorship of public marketing events, and are reflected in sales and marketing expense in our consolidated statements of operations and comprehensive income (loss).
Stock-Based Compensation
We recognize stock-based compensation expense in accordance with the provisions of ASC 718, Compensation—Stock Compensation, or ASC 718. ASC 718 requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors based on the grant date fair values of the awards. We use the Black-Scholes option-pricing method for valuing stock options and shares granted under the employee stock purchase plan. Restricted stock units, or RSUs, are valued based on the fair value of our common stock on the date of grant, less our expected dividend yield. For awards that vest solely based on continued service, the fair value of an award is recognized as an expense over the requisite service period on a straight-line basis. For awards that contain performance conditions, the fair value of an award is recognized based on the probability of the performance condition being met using the graded vesting method. Stock-based compensation expense is included in cost of revenue and operating expenses within our consolidated statements of operations and comprehensive income (loss) based on the classification of the individual earning the award.
The determination of the grant date fair value of stock-based awards is affected by the estimated fair value per share of our common stock as well as other highly subjective assumptions, including, but not limited to, the expected term of the stock-based awards, expected stock price volatility, risk-free interest rates, and expected dividends yields, which are estimated as follows:
 
Fair value per share of our common stock. Prior to our initial public offering, in March 2017, given the absence of an active market for our common stock, our board of directors determined the fair value of our common stock at the time of grant for each stock-based award based upon several factors, including consideration of input from management and contemporaneous third-party valuations. The fair value of our common stock was determined in accordance with applicable elements of the practice aid issued by the American Institute of Certified Public Accountants, Valuation of Privately Held Company Equity Securities Issued as Compensation. Each fair value estimated was based on a variety of factors, including the prices, rights, preferences and privileges of our preferred stock relative to those of our common stock, pricing and timing of transactions in our equity, the lack of marketability of our common stock, our actual operating and financial performance, developments and milestones in our company, the market performance of comparable publicly traded companies, the likelihood of achieving a liquidity event, and U.S. and global capital market conditions, among other factors. Subsequent to our initial public offering, the fair value of our common stock is based on the closing price of our Class A common stock, as reported on the New York Stock Exchange, on the date of grant. 
Expected term. We determine the expected term of the awards using the simplified method, which estimates the expected term based on the average of the vesting period and contractual term of the stock option.
Expected volatility. We estimate the expected volatility based on the volatility of similar publicly held entities (referred to as “guideline companies”) over a period equivalent to the expected term of the awards. In evaluating the similarity of guideline companies to us, we considered factors such as industry, stage of life cycle, size, and financial leverage. We intend to continue to consistently apply this process using the same or similar guideline companies to estimate the expected volatility until sufficient historical information regarding the volatility of the share price of our common stock becomes available.
Risk-free interest rate. The risk-free interest rate used to value our stock-based awards is based on the U.S. Treasury yield in effect at the time of grant for a period consistent with the expected term of the award.
Estimated dividend yield. The expected dividend is assumed to be zero as we have never declared or paid any cash dividends and do not currently intend to declare dividends in the foreseeable future.
In addition, prior to 2018, we were required to estimate at the time of grant the expected forfeiture rate and only recognize expense for those stock-based awards expected to vest. Our estimated forfeiture rate was based on our estimate of pre-vesting award forfeitures. As a result of our adoption of ASU 2016-09 effective January 1, 2018, we now account for forfeitures as they occur rather than estimating a forfeiture rate at the time of grant.
The assumptions used in calculating the fair value of stock-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change or we use different assumptions, stock-based compensation expense could be materially different in the future.
Foreign Currency Remeasurement, Translation, and Transactions
The functional currency of our wholly owned subsidiaries is the currency of the primary economic environment in which the entity operates. Assets and liabilities denominated in currencies other than the functional currency are remeasured using the current exchange rate for monetary accounts and historical exchange rates for nonmonetary accounts, with exchange differences on remeasurement included in other income (expense), net in our consolidated statements of operations and comprehensive income (loss). Our foreign subsidiaries that utilize foreign currency as their functional currency translate such currency into U.S. dollars using (i) the exchange rate on the balance sheet dates for assets and liabilities, (ii) the average exchange rates prevailing during the period for revenues and expenses, and (iii) historical exchange rates for equity. Any translation adjustments resulting from this process are shown separately as a component of accumulated other comprehensive income (loss) within stockholder’s equity in the consolidated balance sheets.
Transactions denominated in currencies other than the U.S. dollar may result in transaction gains or losses at the end of the period and when the related receivable or payable is settled, which are recorded in other income (expense), net. Transaction gains (losses) were $1.0 million, ($1.5 million), and ($0.3 million) for the years ended December 31, 2019, 2018, and 2017, respectively.
Income Taxes
We apply the provisions of ASC 740, Income Taxes, or ASC 740. Under ASC 740, we account for our income taxes using the asset and liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the bases used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates and laws that will be in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more likely than not that we will not realize those tax assets through future operations.
We also utilize the guidance in ASC 740 to account for uncertain tax positions. ASC 740 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more likely than not to be realized and effectively settled. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately reflect actual outcomes. We recognize interest and penalties on unrecognized tax benefits as a component of benefit of income taxes in our consolidated statements of operations and comprehensive income (loss).
Net Income (Loss) Per Share Attributable to Common Stockholders
In periods in which we have net income, and a contingent event has been met, we apply the two-class method for calculating earnings per share. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. Participating securities include convertible preferred stock and our Notes. In periods in which we have net losses after accretion of convertible preferred stock, we do not attribute losses to participating securities as they are not contractually obligated to share our losses.
Under the two-class method, basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Net income (loss) attributable to common stockholders is calculated as net income (loss) including current period convertible preferred stock accretion.
Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options and convertible preferred stock as computed under the treasury stock method. In periods in which we incurred a net loss, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share.
Recently Adopted Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board, or FASB, issued ASU 2016-02, codified as ASC 842, which requires lessees to record the assets and liabilities arising from all leases, with the exception of short-term leases, on the balance sheet. Under ASC 842, lessees recognize a liability for lease payments and a right-of-use asset. This guidance retains the distinction between finance leases and operating leases and the classification criteria remain similar. For financing leases, a lessee will recognize the interest on a lease liability separate from amortization of the right-of-use asset. In addition, repayments of principal will be presented within financing activities, and interest payments will be presented within operating activities in the statement of cash flows. For operating leases, a lessee will recognize a single lease cost on a straight-line basis and classify all cash payments within operating activities in the statement of cash flows.
We adopted the new lease accounting standard effective January 1, 2019 using the optional transition method described in ASU 2018-11, Leases - Targeted Improvements, which was issued in July 2018. Under the optional transition method, we recognized the cumulative effect of initially applying the guidance as an adjustment to the operating lease right-of-use assets and operating lease liabilities on our consolidated balance sheet on January 1, 2019 in the amount of $24.8 million without retrospective application to comparative periods. The adoption of ASC 842 did not have an impact on retained earnings (accumulated deficit) on our consolidated balance sheet as of January 1, 2019 and did not have a material impact on our consolidated statements of operations and comprehensive income (loss). We elected the package of practical expedients permitted under the transition guidance within the new standard which allowed us to carry forward our historical assessments of whether contracts are or contain leases, lease classification and initial direct costs. See Note 14, Leases, of these notes to our consolidated financial statements for additional details.
Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology. As a result, we will be required to use a forward-looking expected credit loss model for accounts receivables and other commitments to extend credit. This pronouncement is effective for reporting periods beginning after December 15, 2019. Our analysis and evaluation of the new standard and its potential impact on our consolidated financial statements will continue through its effective date in the first quarter of 2020.
In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs incurred to develop or obtain internal-use software. This guidance will be effective for us for annual reporting periods beginning after December 15, 2019 and for interim periods within those annual periods, and can be applied either retrospectively or prospectively to all implementation costs after the date of adoption. Early adoption is permitted. We currently plan to adopt this new accounting standard prospectively. As a result of the adoption, we will be required to capitalize additional costs related to the implementation of cloud computing arrangements that we have historically expensed as incurred.
v3.19.3.a.u2
Revenue
12 Months Ended
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]  
Revenue
3. Revenue
We adopted the new revenue recognition accounting standard, ASC 606, effective January 1, 2018 on a modified retrospective basis and applied the new standard only to contracts that were not completed contracts prior to January 1, 2018. See Note 2, Significant Accounting Policies, of these notes to our consolidated financial statements for a description of our ASC 606 revenue recognition accounting policy. Financial results for reporting periods during 2019 and 2018 are presented in accordance with the new revenue recognition standard, including quarterly information included in Note 19, Selected Quarterly Financial Data (Unaudited). Historical financial results for reporting periods prior to 2018 have not been retroactively restated and are presented in conformity with amounts previously reported under ASC 605.
Disaggregation of Revenue
The disaggregation of revenue by region, revenue by type of performance obligation, and cost of revenue by type of performance obligation was as follows (in thousands):
 
 
Year Ended December 31,
Revenue by region:
 
2019
 
2018
 
2017
United States
 
$
296,108

 
$
178,774

 
$
101,932

International
 
121,802

 
74,796

 
29,675

Total
 
$
417,910

 
$
253,570

 
$
131,607

 
 
 
 
 
 
 
Revenue by type of performance obligation:
 
 
 
 
 
 
Subscription-based software license
 
$
229,194

 
$
124,669

 
*

PCS and services
 
188,716

 
128,901

 
*

Total
 
$
417,910

 
$
253,570

 
$
131,607

 
 
 
 
 
 
 
Costs of revenue by type of performance obligation:
 
 
 
 
 
 
Subscription-based software license
 
$
3,923

 
$
1,505

 
*

PCS and services
 
35,228

 
21,295

 
*

Total
 
$
39,151

 
$
22,800

 
$
21,803

* We adopted ASC 606 under the modified retrospective method, and therefore we did not retrospectively apply the guidance to the year ended December 31, 2017. As a result, this information is not available for the prior period.
Revenue attributable to the United Kingdom comprised 10.7% and 10.2% of total revenue for the years ended December 31, 2019 and 2018, respectively. Other than the United Kingdom for the years ended December 31, 2019 and 2018, no other country outside the United States comprised more than 10% of revenue for any of the periods presented. Our operations outside the United States include sales offices in Australia, Canada, the Czech Republic, France, Germany, Japan, Singapore, the United Arab Emirates and the United Kingdom, and a research and development center in Ukraine and the Czech Republic. Revenue by location is determined by the billing address of the customer.
Revenue recognized on our subscription-based software licenses is recognized at a point in time when the platform is first made available to the customer, or the beginning of the subscription term, if later. Revenue recognized related to PCS and services is recognized ratably over the subscription term, with the exception of professional services related to training services. Revenue related to professional services is recognized at a point in time as the services are performed, and represents less than 5% of total revenue for all periods presented.
Contract Assets and Contract Liabilities
As of December 31, 2019 and 2018, our contract assets are expected to be transferred to receivables within the next 12 to 24 months and, with respect to these contract assets, $18.5 million and $11.2 million, respectively, is included in prepaid expenses and other current assets and $39.3 million and $16.5 million, respectively, are included in other assets on our consolidated balance sheets. There were no impairments of contract assets during each of the years ended December 31, 2019 and 2018.
During the years ended December 31, 2019 and 2018, we recognized $84.0 million and $56.3 million, respectively, of revenue related to amounts that were included in deferred revenue as of January 1, 2019 and 2018, respectively.
Assets Recognized from the Costs to Obtain our Contracts with Customers
We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. This primarily consists of sales commissions and partner referral fees that are earned upon execution of contracts. We amortize these deferred commissions proportionate with related revenues over the benefit period. A summary of the activity impacting our deferred commissions during the years ended December 31, 2019 and 2018 are presented below (in thousands):
 
Year Ended December 31,
 
2019
 
2018
Beginning balance
$
22,391

 
$
11,213

Adoption of ASC 606

 
(1,154
)
Additional deferred commissions
55,024

 
30,828

Amortization of deferred commissions
(34,380
)
 
(18,496
)
Ending balance
$
43,035

 
$
22,391



As of December 31, 2019 and 2018, $17.5 million and $10.4 million, respectively, of our deferred commissions are expected to be amortized within the next 12 months, and therefore are included in prepaid assets and other current assets on our consolidated balance sheets. The remaining amount of our deferred commissions are included in other long-term assets. There were no impairments of assets related to deferred commissions during each of the years ended December 31, 2019 and 2018. There were no assets recognized related to the costs to fulfill contracts during each of the years ended December 31, 2019 and 2018 as these costs were not material.
Remaining Performance Obligations
Transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue on our consolidated balance sheets and unbilled amounts that will be recognized as revenue in future periods. As of December 31, 2019 and 2018, we had an aggregate transaction price of $407.0 million and $223.1 million, respectively, allocated to unsatisfied performance obligations related primarily to PCS, cloud-based offerings, and subscriptions to third-party syndicated data. As of December 31, 2019 and 2018, we expect to recognize $340.1 million and $196.4 million, respectively, as revenue over the next 24 months with the remaining amount recognized thereafter.
v3.19.3.a.u2
Business Combinations
12 Months Ended
Dec. 31, 2019
Business Combinations [Abstract]  
Business Combinations
4. Business Combinations
Goodwill represents the excess of the purchase price consideration over the fair value of the underlying intangible assets and net liabilities assumed. We believe the amount of goodwill resulting from acquisitions during the years ended December 31, 2019, 2018 and 2017 are primarily attributable to expected synergies from an assembled workforce, increased development capabilities, offerings to customers, and enhanced opportunities for growth and innovation.
Pro forma information and revenue and operating results of the companies acquired during the years ended December 31, 2019, 2018, and 2017 have not been presented as the impacts are not significant to our consolidated financial statements.
The consolidated financial statements include the results of operations of each acquisition commencing as of the acquisition date of the respective acquisition. Acquisition-related costs associated with the below acquisitions were not material, and are recorded in general and administrative expense in the consolidated statements of operations and comprehensive income (loss).
2019 Acquisitions
Feature Labs, Inc.
On October 3, 2019, we acquired 100% of the outstanding equity of Feature Labs, Inc., a Delaware corporation, or Feature Labs, pursuant to an Agreement and Plan of Merger, or the Feature Labs Merger Agreement, dated as of October 2, 2019. The acquisition was made to augment our machine learning capabilities and establish an engineering hub on the East Coast of the U.S. The aggregate consideration payable in exchange for all of the outstanding equity interests of Feature Labs was $25.2 million in cash, subject to customary adjustments set forth in the Feature Labs Merger Agreement.
In connection with the acquisition, we entered into employment agreements with certain employees from Feature Labs, which include up to $12.5 million in equity incentive awards based on continued employment over a period of 48 months with respect to certain time-based equity incentive awards and continued employment and the achievement of certain milestones over
a period of 36 months with respect to certain performance-based equity incentive awards. As the awards are subject to the continued employment of the employees, they were excluded from the purchase consideration, and will be recognized as post-acquisition compensation.
The purchase consideration for the acquisition of $25.2 million consisted of $7.9 million in developed technology, $18.0 million of goodwill, which was not tax deductible, and $0.7 million of net liabilities assumed.
We determined the fair value of the developed technology acquired using the multi-period excess earnings model which is a variation of the income approach that estimates the value of the assets based on the present value of the incremental after-tax cash flow attributable only to the intangible assets. This model utilizes certain unobservable inputs classified as Level 3 measurements as defined by ASC 820, Fair Value Measurements and Disclosures, or ASC 820. Key inputs utilized in the models include a discount rate of 40.0% and estimated revenue and expense forecasts. Based on the valuation model, we determined the fair value of the developed technology to be $7.9 million with an amortization period of 7.0 years.
ClearStory Data Inc.
On April 4, 2019, we acquired 100% of the outstanding equity of ClearStory Data Inc., a Delaware corporation, or ClearStory Data, pursuant to an Agreement and Plan of Merger, or the ClearStory Merger Agreement, dated as of March 28, 2019. The acquisition was made to augment our research and development team and acquire certain developed technology.
The aggregate consideration payable in exchange for all of the outstanding equity interests of ClearStory Data was $19.6 million in cash, subject to customary adjustments set forth in the ClearStory Merger Agreement. The acquisition of ClearStory Data included $3.0 million of cash consideration held back for customary indemnification matters for a period of 18 months following the acquisition date, which is included in accrued expenses and other current liabilities on our consolidated balance sheets as of December 31, 2019.
In connection with the acquisition, we entered into employment agreements with certain employees from ClearStory Data, which include up to $6.0 million in aggregate cash payments based on the achievement of certain milestones over a period of 24 months. As the awards are subject to the continued employment of the employees, they were excluded from the purchase consideration, and will be recognized as post-acquisition compensation.
The purchase consideration for the acquisition of $19.6 million consisted of $10.7 million in developed technology, $9.5 million of goodwill, which is tax deductible, and $0.6 million of net liabilities assumed.
We determined the fair value of the developed technology acquired using the replacement cost model which uses estimated costs to recreate the technology. This model utilizes certain unobservable inputs classified as Level 3 measurements as defined by ASC 820. Key inputs utilized in the models include a discount rate of 20% and estimated costs to recreate the technology. Based on the valuation model, we determined the fair value of the developed technology to be $10.7 million with an amortization period of 4.0 years.
2018 Acquisition
Alteryx ANZ Pty Limited
In February 2018, we acquired 100% of the outstanding equity of Alteryx ANZ Pty Limited, or Alteryx ANZ, in Sydney, Australia, our exclusive master distributor in Australia and New Zealand. The total purchase consideration for the acquisition was approximately $5.7 million consisting of (i) $3.3 million in cash consideration, (ii) $1.2 million in contingent consideration payable in cash, and (iii) $1.2 million for the settlement of preexisting relationships.
The allocation of the total purchase price for this acquisition was $3.2 million of net tangible assets, $1.6 million of identifiable intangible assets, consisting of customer contracts and relationships, and $0.9 million of residual goodwill, which was not tax deductible.
We determined the fair value of the customer contracts and relationships acquired in the acquisition using the multi-period excess earnings model. This model utilizes certain unobservable inputs, including discounted cash flows, historical and projected financial information, and customer attrition rates, classified as Level 3 measurements as defined by ASC 820. Based on the valuation models, we determined the fair value of the customer contracts and relationships to be $1.6 million with a weighted-average amortization period of 7.0 years.
A portion of the consideration for the acquisition is subject to earn-out provisions. Additional contingent earn-out consideration of up to $1.5 million may be paid out to the former shareholder of Alteryx ANZ over two years upon the achievement of specified milestones. We utilized a probability weighted scenario-based model to determine the fair value of the contingent consideration. Based on this valuation model, we determined the fair value of the contingent consideration to be $1.2 million as
of the acquisition date. See Note 5, Fair Value Measurements, of these notes to our consolidated financial statements for additional information on contingent earn-out consideration.
v3.19.3.a.u2
Fair Value Measurements
12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements
5. Fair Value Measurements
Instruments Measured at Fair Value on a Recurring Basis. The following tables present our cash and cash equivalents and investments’ costs, gross unrealized gains (losses), and fair value by major security type recorded as cash and cash equivalents or short-term or long-term investments (in thousands):
 


As of December 31, 2019


Cost

Net
Unrealized
Gains (Losses)

Fair Value

Cash and
Cash
Equivalents

Short-term
Investments

Long-term
Investments
Cash

$
53,039


$


$
53,039


$
53,039


$


$

Level 1:












Money market funds

223,580




223,580


223,580





Subtotal

223,580




223,580


223,580





Level 2:












Commercial paper

217,140


(6
)

217,134


98,325


118,809



Certificates of deposit

1,000




1,000






1,000

U.S. Treasury and agency bonds

294,953


199


295,152


35,005


161,767


98,380

Corporate bonds

184,516


444


184,960




96,419


88,541

Subtotal

697,609


637


698,246


133,330


376,995


187,921

Level 3












Total

$
974,228


$
637


$
974,865


$
409,949


$
376,995


$
187,921

 


As of December 31, 2018


Cost

Net
Unrealized
Losses

Fair Value

Cash and
Cash
Equivalents

Short-term
Investments

Long-term
Investments
Cash

$
78,194


$


$
78,194


$
78,194


$


$

Level 1:












Money market funds

11,780




11,780


11,780





Subtotal

11,780




11,780


11,780





Level 2:












Commercial paper

1,313




1,313




1,313



Certificates of deposit

6,101




6,101




5,351


750

U.S. Treasury and agency bonds

220,136


(139
)

219,997




158,204


61,793

Corporate bonds

108,968


(110
)

108,858




74,850


34,008

Subtotal

336,518


(249
)

336,269




239,718


96,551

Level 3












Total

$
426,492


$
(249
)

$
426,243


$
89,974


$
239,718


$
96,551


There were no transfers between Level 1, Level 2, or Level 3 securities during each of the years ended December 31, 2019 and 2018. We review our marketable securities on a regular basis to evaluate whether or not any security has experienced an other-than-temporary decline in fair value. We consider factors such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer and our intent to sell, and whether it is more likely than not we will be required to sell the investment before recovery of the investment’s amortized cost basis. We have determined the gross unrealized losses of $0.1 million and $0.2 million as of December 31, 2019 and 2018, respectively, were due to changes in market rates, and we have determined the losses are temporary in nature.
All long-term investments had maturities between one and two years in duration as of December 31, 2019 and 2018. Cash and cash equivalents, restricted cash, and investments as of December 31, 2019 and 2018 held domestically were approximately $963.4 million and $417.9 million, respectively.
Interest income from our marketable securities was $9.2 million, $5.4 million, and $0.8 million for the years ended December 31, 2019, 2018, and 2017, respectively.
Contingent Consideration. Contingent consideration in connection with acquisitions is measured at fair value each reporting period based on significant unobservable inputs, classified as Level 3 measurement. See Note 4, Business Combinations, of these notes to our consolidated financial statements for additional information on the valuation of the contingent consideration as of the acquisition date. The contingent earn-out consideration has been recorded in accrued liabilities and other liabilities in our accompanying consolidated balance sheet with any changes in fair value each reporting period recorded in general and administrative expenses in our consolidated statements of operations and comprehensive income (loss). Changes in fair value depend on several factors including estimates of the timing and ability to achieve the milestones.
The following table presents a reconciliation of the beginning and ending balances of acquisition-related accrued contingent consideration using significant unobservable inputs (Level 3) (in thousands):
 

Year Ended December 31,
 
2019
 
2018
Beginning balance
$
2,143

 
$
975

Obligations assumed

 
1,200

Change in fair value
107

 
624

Settlement
(1,750
)
 
(656
)
Ending balance
$
500

 
$
2,143


We recognized $0.1 million, $0.6 million and $0.2 million related to the change in fair value of accrued contingent consideration during the years ended December 31, 2019, 2018, and 2017, respectively.
Upon the achievement of certain milestones in connection with our acquisition of Semanta, we released 11,250 shares and 18,869 shares of Class A common stock to the former shareholders of Semanta in the years ended December 31, 2019 and 2018, respectively. In addition, upon the completion of the indemnification period in 2019, we released 10,205 shares of Class A common stock to the former shareholders of Semanta that had previously been earned, but were held back in accordance with the terms of the acquisition agreement. We also paid $1.0 million to the former shareholder of Alteryx ANZ upon achievement of certain milestones during the year ended December 31, 2019.
Instruments Not Recorded at Fair Value on a Recurring Basis. We estimate the fair value of our Notes carried at face value less unamortized discount and issuance costs quarterly for disclosure purposes. The estimated fair value of our Notes is determined by Level 2 inputs and is based on observable market data including prices for similar instruments. As of December 31, 2019 and 2018, the fair value of our Notes were $956.8 million and $343.2 million, respectively. The carrying amounts of our financial instruments, including cash, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued liabilities approximate their current fair value because of their nature and relatively short maturity dates or durations.
Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis. See Note 4, Business Combinations, and Note 8, Goodwill and Intangible Assets, of these notes to our consolidated financial statements for fair value measurements of certain assets and liabilities recorded at fair value on a non-recurring basis. These include the fair value of assets acquired and liabilities assumed in a business acquisition, and goodwill and other long-lived assets when they are held for sale or determined to be impaired.
v3.19.3.a.u2
Allowance for Doubtful Accounts
12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Allowance for Doubtful Accounts
6. Allowance for Doubtful Accounts
The following table summarizes the changes in the allowance for doubtful accounts included in accounts receivable in our consolidated balance sheets (in thousands):


Year Ended December 31,


2019

2018

2017
Beginning balance

$
1,839


$
1,455


$
670

Charge-offs

(548
)

(884
)

(337
)
Recoveries

(600
)

(693
)

(783
)
Provision

1,599


1,961


1,905

Ending balance

$
2,290


$
1,839


$
1,455


v3.19.3.a.u2
Property and Equipment
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
Property and Equipment
7. Property and Equipment
Property and equipment, net consisted of the following (in thousands): 


Year Ended December 31,


2019

2018
Computer equipment & software

$
10,521


$
8,909

Furniture and fixtures

4,972


3,685

Leasehold improvements

10,438


5,398

Construction in process

3,771


834



$
29,702


$
18,826

Less: Accumulated depreciation and amortization

(9,406
)

(7,097
)
Total property and equipment, net

$
20,296


$
11,729


Depreciation and amortization expense for the years ended December 31, 2019, 2018, and 2017 was approximately $4.3 million, $3.2 million, and $2.3 million, respectively.
v3.19.3.a.u2
Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
8. Goodwill and Intangible Assets
The change in carrying amount of goodwill was as follows (in thousands):
 

Goodwill as of December 31, 2017
$
8,750

Goodwill recorded in connection with acquisition
854

Effects of foreign currency translation
(110
)
Goodwill as of December 31, 2018
$
9,494

Goodwill recorded in connection with acquisitions
27,437

Effects of foreign currency translation
(21
)
Goodwill as of December 31, 2019
$
36,910

 
 

Intangible assets consisted of the following (in thousands, except years):
 


As of December 31, 2019


Weighted-Average
Useful
Life in Years

Gross Carrying
Value

Accumulated
Amortization

Net Carrying
Value
Customer Relationships

7.0

$
1,503


$
(402
)

$
1,101

Completed Technology

5.4

27,821


(6,839
)

20,982





$
29,324


$
(7,241
)

$
22,083


 
 
As of December 31, 2018
 
 
Weighted-Average
Useful
Life in Years
 
Gross Carrying
Value
 
Accumulated
Amortization
 
Net Carrying
Value
Customer Relationships
 
6.9
 
$
1,554

 
$
(221
)
 
$
1,333

Completed Technology
 
5.7
 
9,180

 
(3,022
)
 
6,158

 
 
 
 
$
10,734

 
$
(3,243
)
 
$
7,491




We classified intangible asset amortization expense in the accompanying consolidated statements of operations and comprehensive income (loss) as follows (in thousands): 
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
Cost of revenue

$
3,801


$
1,809


$
1,213

Sales and marketing

221


220


12

Total

$
4,022


$
2,029


$
1,225


The following table presents our estimates of remaining amortization expense for each of the five succeeding fiscal years and thereafter for intangible assets at December 31, 2019 (in thousands):
 



2020

$
4,735

2021

5,501

2022

4,955

2023

2,603

2024

1,928

Thereafter

2,361

Total amortization expense

$
22,083

 
 
 

v3.19.3.a.u2
Convertible Senior Notes
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Convertible Senior Notes
9. Convertible Senior Notes
The following table presents details of our convertible senior notes, which are further discussed below (original principal in thousands):

 
Month Issued
 
Maturity Date
 
Original Principal (including over-allotment)
 
Coupon Interest Rate
 
Effective Interest Rate
 
Conversion Rate
 
Initial Conversion Price
2023 Notes
May and June 2018
 
June 1, 2023
 
$
230,000

 
0.5
%
 
7.00
%
 
$
22.5572

 
$
44.33

2024 Notes
August 2019
 
August 1, 2024
 
$
400,000

 
0.5
%
 
4.96
%
 
$
5.2809

 
$
189.36

2026 Notes
August 2019
 
August 1, 2026
 
$
400,000

 
1.0
%
 
5.41
%
 
$
5.2809

 
$
189.36



As further defined and described below, the 2024 Notes and the 2026 Notes are together referred to as the 2024 & 2026 Notes, and the 2023 Notes and the 2024 & 2026 Notes are collectively referred to as the Notes.
The Notes are our senior unsecured obligations and rank senior in right of payment to any of our indebtedness and other liabilities that are expressly subordinated in right of payment to the Notes, equal in right of payment among all series of Notes and to any other existing and future indebtedness and other liabilities that are not subordinated, effectively junior in right of payment to any of our secured indebtedness and other liabilities to the extent of the value of the assets securing such indebtedness and other liabilities, and structurally junior in right of payment to all of our existing and future indebtedness and other liabilities (including trade payables) of our current or future subsidiaries.
2023 Notes
In May and June 2018, we sold $230.0 million aggregate principal amount of our 0.50% Convertible Senior Notes due 2023, or the 2023 Notes, including the initial purchasers’ exercise in full of their option to purchase an additional $30.0 million of the 2023 Notes, in a private offering to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended, or the Act.
The 2023 Notes are our senior, unsecured obligations, and interest is payable semi-annually in arrears on June 1 and December 1 of each year beginning December 1, 2018. Prior to the close of business on the business day immediately preceding March 1, 2023, or the 2023 Conversion Date, the 2023 Notes are convertible at the option of holders only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The conversion rate is subject to customary adjustments for certain events as described in the indenture between us and U.S. Bank National Association, as trustee, or the 2023 Notes Indenture. Upon conversion, the 2023 Notes may be settled in shares of our Class A common stock, cash or a combination of cash and shares of our Class A common stock, at our election. It is our current intent to settle the principal amount of the 2023 Notes with cash. During the year ended December 31, 2019, a portion of the 2023 Notes were exchanged, as further discussed below. As of December 31, 2019, the if-converted value of the 2023 Notes exceeded its principal amount by $106.6 million.
Prior to the close of business on the business day immediately preceding the 2023 Conversion Date, the 2023 Notes are convertible at the option of the holders under the following circumstances:
during any calendar quarter commencing after the calendar quarter subsequent to the calendar quarter in which the 2023 Notes were issued (and only during such calendar quarter), if the last reported sale price of the Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the 2023 Notes on each applicable trading day;
during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of 2023 Notes for each day of that five day consecutive trading day period was less than 98% of the product of the last reported sale price of our Class A common stock and the conversion rate of the 2023 Notes on such trading day; or
upon the occurrence of specified corporate events described in the 2023 Notes Indenture.
For at least 20 trading days during the period of 30 consecutive trading days ending December 31, 2019, the last reported sale price of our Class A common stock was greater than or equal to 130% of the conversion price of the 2023 Notes on each applicable trading day. As a result, the 2023 Notes are convertible at the option of the holders during the quarter ending March 31, 2020 and were classified as current liabilities on the consolidated balance sheet as of December 31, 2019. As of the date of this filing, none of the holders of the 2023 Notes have submitted requests for conversion.
We may not redeem the 2023 Notes prior to the maturity date. Holders of the 2023 Notes have the right to require us to repurchase for cash all or a portion of their 2023 Notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change as defined in the 2023 Notes Indenture. We are also required to increase the conversion rate for holders who convert their 2023 Notes in connection with certain corporate events occurring prior to the maturity date.
2023 Capped Call Transactions
In connection with the pricing of the 2023 Notes, we entered into privately negotiated capped call transactions with an affiliate of one of the initial purchasers of the 2023 Notes and other financial institutions. The capped call transactions are expected generally to reduce or offset potential dilution to holders of our common stock and/or offset the potential cash payments that we could be required to make in excess of the principal amount upon any conversion of the 2023 Notes under certain circumstances, with such reduction and/or offset subject to a cap based on the cap price. Under the capped call transactions, we purchased capped call options that in the aggregate relate to the total number of shares of our Class A common stock underlying the 2023 Notes, with an initial strike price of approximately $44.33 per share, which corresponds to the initial conversion price of the 2023 Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the 2023 Notes, and have a cap price of $62.22 per share. The cost of the purchased capped calls of $19.1 million was recorded as a reduction to additional paid-in-capital in our consolidated balance sheet during the three months ended June 30, 2018.
We elected to integrate the capped call options with the 2023 Notes for federal income tax purposes pursuant to applicable U.S. Treasury Regulations. Accordingly, the $19.1 million gross cost of the purchased capped calls will be deductible for income tax purposes as original discount interest over the term of the 2023 Notes. We recorded a deferred tax asset of $4.6 million, which represents the tax benefit of these deductions with an offsetting entry to additional paid-in capital.
In connection with the exchange agreements discussed below, we terminated a corresponding portion of the existing capped call transactions that we entered into in connection with the issuance of the 2023 Notes, which resulted in the net share settlement and our receipt and retirement of 285,466 shares of Class A common stock.
Exchange of 2023 Notes
In connection with the issuance of the 2024 & 2026 Notes discussed below, we entered into exchange agreements with certain holders of our outstanding 2023 Notes and, using a portion of the net proceeds from the issuance of the 2024 & 2026 Notes, we exchanged $145.2 million principal amount, together with accrued and unpaid interest thereon, of the 2023 Notes for aggregate consideration of $145.4 million in cash, representing the principal and accrued interest of the exchanged 2023 Notes, and 2.2 million shares of Class A common stock.
The exchange agreements were accounted for as an induced conversion, resulting from the issuance of shares of Class A common stock in excess of the shares that would have been issuable under the terms of the original 2023 Notes.
This exchange resulted in a loss on induced conversion and debt extinguishment of $20.5 million, consisting of (i) a $8.2 million market premium representing the excess of the fair value of the total consideration delivered over the fair value of the Class A common stock issuable for the principal amount exchanged pursuant to the original conversion terms and (ii) $12.3 million representing the difference between the fair value and the carrying value, net of unamortized issuance costs, of the liability component of the exchanged 2023 Notes.
2024 & 2026 Notes

In August 2019, we sold $400.0 million aggregate principal amount of our 0.50% Convertible Senior Notes due 2024, or the 2024 Notes, and $400.0 million aggregate principal amount of our 1.00% Convertible Senior Notes due 2026, or the 2026 Notes, including the initial purchasers’ exercise in full of their options to purchase an additional $50.0 million of the 2024 Notes and an additional $50.0 million of the 2026 Notes, in a private offering to qualified institutional buyers pursuant to Rule 144A promulgated under the Act.

The 2024 & 2026 Notes are our senior, unsecured obligations, and interest is payable semi-annually in arrears on February 1 and August 1 of each year beginning February 1, 2020. Prior to the close of business on the business day immediately preceding
May 1, 2024, or the 2024 Conversion Date, in the case of the 2024 Notes and May 1, 2026, or the 2026 Conversion Date, in the case of the 2026 Notes, the 2024 & 2026 Notes are convertible at the option of holders only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the relevant maturity date. The conversion rate is subject to customary adjustments for certain events as described in the indentures between us and U.S. Bank National Association, as trustee, or the 2024 Notes Indenture, in the case of the 2024 Notes, or the 2026 Notes Indenture, in the case of the 2026 Notes. Upon conversion, the 2024 & 2026 Notes may be settled in shares of our Class A common stock, cash or a combination of cash and shares of our Class A common stock, at our election. It is our current intent to settle the principal amount of the 2024 & 2026 Notes with cash.

Prior to the close of business on the business day immediately preceding the 2024 Conversion Date, in the case of the 2024 Notes, or the 2026 Conversion Date, in the case of the 2026 Notes, the 2024 Notes and the 2026 Notes, respectively, are convertible at the option of the holders under the following circumstances:

during any calendar quarter commencing after the calendar quarter ended December 31, 2019 (and only during such calendar quarter), if the last reported sale price of our Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the 2024 Notes or the 2026 Notes, as applicable, on each applicable trading day;

during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 2024 Notes or the 2026 Notes, as applicable, for each day of that five day consecutive trading day period was less than 98% of the product of the last reported sale price of our Class A common stock and the conversion rate of such series of Notes on such trading day; or

upon the occurrence of specified corporate events described in the 2024 Notes Indenture or the 2026 Notes Indenture, as applicable.
The 2024 & 2026 Notes are not currently convertible.
We may not redeem the 2024 Notes or the 2026 Notes prior to the relevant maturity date. Holders of the 2024 & 2026 Notes have the right to require us to repurchase for cash all or a portion of their 2024 & 2026 Notes, as applicable, at 100% of their respective principal amounts, plus any accrued and unpaid interest, upon the occurrence of a fundamental change as defined in the 2024 Notes Indenture, in the case of the 2024 Notes, or the 2026 Notes Indenture, in the case of the 2026 Notes. We are also required to increase the conversion rate for holders who convert their 2024 Notes or 2026 Notes in connection with certain corporate events occurring prior to the relevant maturity date.
2024 and 2026 Capped Call Transactions
In connection with the pricing of the 2024 & 2026 Notes, we entered into privately negotiated capped call transactions with other financial institutions. The capped call transactions are expected generally to reduce or offset potential dilution to holders of our common stock and/or offset the potential cash payments that we could be required to make in excess of the principal amount upon any conversion of the relevant series of the 2024 & 2026 Notes under certain circumstances, with such reduction and/or offset subject to a cap based on the cap price. Under the capped call transactions, we purchased capped call options that in the aggregate relate to the total number of shares of our Class A common stock underlying the relevant series of the 2024 & 2026 Notes, with an initial strike price of approximately $189.36 per share, which corresponds to the initial conversion price of each of the 2024 & 2026 Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of each of the 2024 & 2026 Notes, and have a cap price of $315.60 per share. The cost of the purchased capped calls of $87.4 million was recorded as a reduction to additional paid-in-capital in our consolidated balance sheet during the three months ended September 30, 2019.
We elected to integrate the capped call options with the 2024 & 2026 Notes for federal income tax purposes pursuant to applicable U.S. Treasury Regulations. Accordingly, the $87.4 million gross cost of the purchased capped calls will be deductible for income tax purposes as original discount interest over the term of the relevant series of the 2024 & 2026 Notes. We recorded a deferred tax asset of $20.9 million, which represents the tax benefit of these deductions with an offsetting entry to additional paid-in capital.
The Notes consisted of the following (in thousands):
 
 
As of December 31, 2019
 
As of December 31, 2018
 
 
2023 Notes
 
2024 Notes
 
2026 Notes
 
2023 Notes
Liability:
 
 
 
 
 
 
 
 
Principal
 
$
84,759

 
$
400,000

 
$
400,000

 
$
230,000

Less: debt discount and issuance costs, net of amortization
 
(16,605
)
 
(72,669
)
 
(97,010
)
 
(56,353
)
Net carrying amount
 
$
68,154

 
$
327,331

 
$
302,990

 
$
173,647

 
 
 
 
 
 
 
 
 
Equity, net of issuance costs
 
$
46,474

 
69,749

 
93,380

 
$
57,251



The following table sets forth interest expense recognized related to the Notes (in thousands):
 
 
Year Ended December 31,
 
 
2019
2018
Contractual interest expense
 
$
3,186

 
$
712

Amortization of debt issuance costs and discount
 
18,625

 
6,652

Total
 
$
21,811

 
$
7,364



The following table sets forth future contractual obligations of contractual interest and principal related to the Notes (in thousands):
 
 
Payments Due by Period
 
 
Total
 
Less Than 1 Year
 
1 to 3 Years
 
3 to 5 Years
 
More Than 5 Years
Notes and related interest
 
$
924,059

 
$
6,240

 
$
12,848

 
$
496,971

 
$
408,000


v3.19.3.a.u2
Accrued Payroll and Payroll-Related Liabilities
12 Months Ended
Dec. 31, 2019
Payables and Accruals [Abstract]  
Accrued Payroll and Payroll-Related Liabilities
10. Accrued Payroll and Payroll-Related Liabilities
Accrued payroll and payroll-related liabilities included accrued commissions and bonuses as follows (in thousands):


As of December 31,


2019

2018
Accrued commissions

$
23,037


$
8,589

Accrued bonuses

$
16,730


$
7,300


v3.19.3.a.u2
Redeemable Convertible Preferred Stock and Stockholders' Equity
12 Months Ended
Dec. 31, 2019
Equity [Abstract]  
Redeemable Convertible Preferred Stock and Stockholders' Equity
11. Redeemable Convertible Preferred Stock and Stockholders’ Equity
Redeemable Convertible Preferred Stock
Upon the closing of our initial public offering in March 2017, all shares of our then-outstanding convertible preferred stock automatically converted on a one-for-one basis into shares of Class B common stock.
Dual Class Common Stock Structure
In February 2017, we implemented a dual class common stock structure in which each then existing share of common stock converted into a share of Class B common stock and we also authorized a new class of common stock, the Class A common stock. The Class A common stock is entitled to one vote per share and the Class B common stock is entitled to ten votes per share. The Class A common stock and Class B common stock have the same dividend and liquidation rights, and the Class B common stock converts to Class A common stock at any time at the option of the holder, or automatically upon the date that is the earliest of (i) the date specified by a vote of the holders of at least 66 2/3% of the outstanding shares of Class B common stock, (ii) March 29, 2027, and (iii) the date that the total number of shares of Class B common stock outstanding cease to represent at least 10% of the aggregate number of shares of Class A common stock and Class B common stock then outstanding. 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
permitted transfers described in our restated certificate of incorporation, or the Restated Certificate. Upon the creation of the dual class common stock structure all outstanding options to purchase common stock became options to purchase an equivalent number of shares of Class B common stock, and all RSUs became RSUs for an equivalent number of shares of Class B common stock.
Upon the effectiveness of the Restated Certificate in March 2017, the number of shares of capital stock that were authorized to be issued consisted of 500,000,000 shares of Class A common stock, $0.0001 par value per share, 500,000,000 shares of Class B common stock, $0.0001 par value per share, and 10,000,000 shares of undesignated preferred stock, $0.0001 par value per share.
Preferred Stock
Our board of directors is authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences, and rights of the shares of each series and any of its qualifications, limitations, or restrictions, in each case without further vote or action by our stockholders. As of December 31, 2019no shares of preferred stock were outstanding.
v3.19.3.a.u2
Equity Awards
12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]  
Equity Awards
12. Equity Awards
Amended and Restated 2013 Stock Plan
We granted options and RSUs under our Amended and Restated 2013 Stock Plan, or 2013 Plan, until March 22, 2017, when the plan was terminated in connection with our IPO. Accordingly, no shares are available for future issuance under the 2013 Plan following the IPO. The 2013 Plan continues to govern outstanding equity awards granted thereunder.
2017 Equity Incentive Plan
In February 2017, our board of directors adopted, and our stockholders approved, the 2017 Equity Incentive Plan, or 2017 Plan. The 2017 Plan became effective on March 22, 2017 and is the successor plan to the 2013 Plan. Under the 2017 Plan, we initially reserved (i) 5.1 million shares of Class A common stock for future issuance and (ii) 0.5 million shares of Class A common stock equal to the number of Class B shares reserved but not issued under the 2013 Plan as of the effective date of the 2017 Plan. The number of shares of Class A common stock reserved for issuance under our 2017 Plan will increase automatically on the first day of January of each of 2018 through 2027 by the lesser of (a) 5% of the total outstanding shares of our Class A and Class B common stock as of the immediately preceding December 31 and (b) the number of shares determined by our board of directors. The share reserve may also increase to the extent that outstanding awards under our 2013 Plan expire or terminate. As of December 31, 2019, an aggregate of 9.3 million shares of Class A common stock were reserved for issuance under the 2017 Plan.
2017 Employee Stock Purchase Plan
In February 2017, our board of directors adopted, and our stockholders approved, the 2017 Employee Stock Purchase Plan, or 2017 ESPP. The 2017 ESPP became effective on March 23, 2017. Under the 2017 ESPP, we reserved 1.1 million shares of Class A common stock for future issuance. The number of shares of Class A common stock reserved for issuance under our 2017 ESPP will increase automatically on the first day of January of each of 2018 through 2027 by the lesser of (a) 1% of the total outstanding shares of our Class A and Class B common stock as of the immediately preceding December 31 and (b) the number of shares determined by our board of directors. The aggregate number of shares issued over the term of the 2017 ESPP may not exceed 11,000,000 shares of Class A common stock.
Under the 2017 ESPP, eligible employees are allowed to purchase shares of our Class A common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to plan limitations. Except for the first offering period, which began on the date our Registration Statement on Form S-1 covering the initial public offering of our shares of Class A common stock was declared effective by the SEC, purchase periods are approximately six months in duration starting on the first trading date on or after February 15th and August 15th of each year. Participants are able to purchase shares of our Class A common stock at 85% of the lower of its fair market value on (i) the first day of the purchase period or on (ii) the purchase date, which is the last day of the purchase period.
In 2019, employees purchased 0.1 million shares of Class A common stock at a price per share of $52.53. As of December 31, 2019, 2.0 million shares of Class A common stock were available for future issuance under the 2017 ESPP.
Stock Options
Stock options generally vest over a period of three to four years and expire ten years from the date of grant. Unvested stock options will be forfeited in case of a termination of employment or service before the satisfaction of the vesting schedule. Vested stock options generally expire three months after termination of employment.
Stock option activity, excluding activity related to the ESPP, during the year ended December 31, 2019 consisted of the following (in thousands, except weighted-average information):
 


Options
Outstanding

Weighted-
Average
Exercise
Price

Aggregate Intrinsic Value

Weighted-Average Remaining Contractual Term (Years)
Options outstanding at December 31, 2018

4,049


$
12.48


$
190,277


7.2
Granted

392


80.88





Exercised

(1,452
)

10.90


$
115,409



Cancelled/forfeited

(277
)

18.68





Options outstanding at December 31, 2019

2,712


$
22.58


$
211,488


6.6
Exercisable

1,629


$
9.15


$
148,119


5.6
Vested and expected to vest at December 31, 2019

2,712


$
22.58


$
211,488


6.6

The total intrinsic value of options exercised in the years ended December 31, 2018 and 2017 was $56.9 million and $25.7 million, respectively. The weighted-average exercise price of options granted in the years ended December 31, 2018 and 2017 was $28.26 and $17.48, respectively.
As of December 31, 2019, there was $15.9 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 2.1 years.
Valuation Assumptions
The following table presents the weighted-average assumptions used for stock options granted under our 2017 Plan and for shares of our Class A common stock issued under our ESPP for each of the years indicated:
 


Stock Options

Employee Stock Purchase Plan


2019

2018

2017

2019

2018

2017
Expected term (in years)

5.8


6.1


6.1


0.5


0.5


0.4

Estimated volatility

38
%

41
%

42
%

56
%

52
%

29
%
Risk-free interest rate

2
%

2
%

2
%

2
%

2
%

1
%
Estimated dividend yield












Weighted average fair value

$
32.20


$
12.09


$
7.53


$
30.02


$
12.13


$
4.02



Restricted Stock Units

RSUs granted under the 2017 Plan generally vest over a period of three to four years and expire ten years from date of grant. RSUs will be forfeited in case of a termination of employment or service before the satisfaction of the vesting schedule. RSU activity during the year ended December 31, 2019 consisted of the following (in thousands, except weighted-average information):


Awards
Outstanding

Weighted-
Average
Grant Date
Fair Value

Aggregate Intrinsic Value
RSUs outstanding at December 31, 2018

1,215


$
31.93


$
72,266

Granted

908


90.00



Vested

(340
)

30.79


$
30,214

Cancelled/forfeited

(207
)

40.97



RSUs outstanding at December 31, 2019

1,576


$
64.46


$
157,752

RSUs expected to vest at December 31, 2019
 
1,576

 
$
64.46

 
$
157,752


The total intrinsic value of RSUs vested in the years ended December 31, 2018 and 2017 was $9.8 million and $1.8 million, respectively. The weighted-average grant date fair value of RSUs granted in the years ended December 31, 2018 and 2017 was $35.51 and $20.43, respectively.
As of December 31, 2019, total unrecognized compensation expense related to unvested RSUs was approximately $80.6 million, which is expected to be recognized over a weighted-average period of 2.5 years.
We classified stock-based compensation expense in the accompanying consolidated statements of operations and comprehensive income (loss) as follows (in thousands):
 
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
Cost of revenue

$
1,634


$
797


$
485

Research and development

6,954


3,699


1,635

Sales and marketing

12,659


6,153


2,302

General and administrative

11,878


5,998


4,519

Total

$
33,125


$
16,647


$
8,941


v3.19.3.a.u2
Retirement Plan
12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Retirement Plan
13. Retirement Plan
We established a savings plan that qualifies as a defined contribution plan under Section 401(k) of the Internal Revenue Code of 1986, as amended, or the Code, for the benefit of our employees. Our contributions to the savings plan are discretionary and vest immediately. We contributed approximately $3.9 million, $2.4 million and $1.6 million to the savings plan for the years ended December 31, 2019, 2018, and 2017, respectively.
v3.19.3.a.u2
Leases
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Leases
14. Leases
We have various non-cancelable operating leases for our corporate offices in California, Colorado, Illinois, Massachusetts, Michigan, New York, Texas and Virginia in the United States and Australia, Brazil, Canada, the Czech Republic, France, Germany, Japan, Singapore, Ukraine, the United Arab Emirates and the United Kingdom. These leases expire at various times through 2028. Certain lease agreements contain renewal options, rent abatement, and escalation clauses that are factored into our determination of lease payments when appropriate.
The table below presents lease-related assets and liabilities recorded on the consolidated balance sheet (in thousands):
 
Classification
 
As of December 31, 2019
Assets



Operating lease right-of-use assets
Operating lease right-of-use assets

$
33,600





Liabilities



Operating lease liabilities (current)
Accrued expenses and other current liabilities

$
6,627

Operating lease liabilities (noncurrent)
Operating lease liabilities

29,293

Total lease liabilities


$
35,920


Lease Costs
The following lease costs were included in our consolidated statements of operations and comprehensive income (loss) (in thousands):
 
Year Ended December 31, 2019
 
Operating lease cost
$
7,066

 
Short-term lease cost
1,604

 
Variable lease cost
1,767

 
Total lease cost
$
10,437

 
Supplemental Information
The table below presents supplemental information related to operating leases during the year ended December 31, 2019 (in thousands, except weighted-average information):
Cash paid for amounts included in the measurement of operating lease liabilities
$
6,040

Weighted-average remaining lease term
5.9

Weighted-average discount rate
6.18
%


In addition to the leases included on our consolidated balance sheet as of December 31, 2019, we have three leases that have been executed but not yet commenced as of December 31, 2019 with lease terms that range from seven to nine years. As of December 31, 2019, we have not gained access to any of these three leased assets nor do we have control of the underlying assets while under construction. We anticipate that these operating leases will commence during the year ended December 31, 2020. We expect to pay approximately $73.5 million in minimum rent payments related to these leases, $13.0 million of which will be paid over the next 24 months.
Undiscounted Cash Flows
The table below reconciles the undiscounted cash flows of the operating leases for each of the first five years, and total of the remaining years, to the operating lease liabilities recorded on the consolidated balance sheet as of December 31, 2019 (in thousands):
2020
$
8,621

2021
7,768

2022
7,106

2023
5,562

2024
5,331

2025
4,434

Thereafter
4,641

Total minimum lease payments
$
43,463

Less imputed interest
(7,543
)
Present value of future minimum lease payments
$
35,920

Less current obligations under leases
(6,627
)
Long-term lease obligations
$
29,293


Disclosures Related to Periods Prior to Adoption of ASC 842
Minimum lease payments under operating leases with non-cancelable terms in excess of one year as of December 31, 2018, were as follows (in thousands):
2019
$
6,389

2020
6,781

2021
6,326

2022
6,276

2023
5,163

Thereafter
9,427

Total minimum lease payments
$
40,362


v3.19.3.a.u2
Commitments and Contingencies
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
15. Commitments and Contingencies
In the ordinary course of business, we enter into purchase orders with vendors for the purchase of goods and services including non-cancelable agreements for software licenses and royalty agreements. Our minimum purchase obligations as of December 31, 2019 were as follows (in thousands):
2020
$
16,270

2021
9,061

2022
7,544

2023

2024

Thereafter

Total minimum payments
$
32,875


Indemnification
In the ordinary course of business, we enter into agreements in which we may agree to indemnify other parties with respect to certain matters, including losses resulting from claims of intellectual property infringement, damages to property or persons, business losses, or other liabilities. In addition, we have entered into indemnification agreements with our directors, executive officers, and certain other employees that will require us to indemnify them against liabilities that may arise by reason of their status or service as directors, officers, or employees. The term of these indemnification agreements with our directors, executive officers, and other employees, are generally perpetual after execution of the agreement. The maximum potential amount of future payments we could be required to make under these indemnification provisions is unlimited; however, we maintain insurance that reduces our exposure and enables us to recover a portion of any future amounts paid. As of each of December 31, 2019 and December 31, 2018, we have not accrued a liability for these indemnification provisions because the likelihood of incurring a payment obligation, if any, in connection with these arrangements is not probable or reasonably estimable.
Litigation
From time to time, we may be involved in lawsuits, claims, investigations, and proceedings, consisting of intellectual property, commercial, employment, and other matters, which arise in the ordinary course of business. We are not currently party to any material legal proceedings or claims, nor are we aware of any pending or threatened legal proceedings or claims that could have a material adverse effect on our business, operating results, cash flows, or financial condition should such legal proceedings or claims be resolved unfavorably.
Warranty
We provide an assurance-type warranty to customers that our platform will operate substantially in accordance with its specifications. Historically, no significant costs have been incurred related to product warranties and none are expected in the future and, as such, no accruals for product warranty costs have been made.
v3.19.3.a.u2
Income Taxes
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Income Taxes
16. Income Taxes
The components of income (loss) before benefit of income taxes were as follows (in thousands):
 


Year Ended December 31,


2019

2018

2017
Domestic

$
9,259


$
27,849


$
24,460

Foreign

(3,195
)

(2,415
)

(42,864
)
Total

$
6,064


$
25,434


$
(18,404
)

The components of the benefit of income taxes were as follows (in thousands):
 

 
Year Ended December 31,

 
2019

2018

2017
Current:
 





Federal
 
$
(375
)

$
(14
)

$
38

State
 
158


314


70

Foreign
 
1,176


587


297

Total current income tax expense
 
$
959


$
887


$
405

Deferred:
 





Federal
 
$
(18,684
)

$
(2,321
)

$
(1,564
)
State
 
(3,406
)

(869
)


Foreign
 
52


(283
)

254

Total deferred income tax benefit:
 
$
(22,038
)

$
(3,473
)

$
(1,310
)
Total
 
$
(21,079
)

$
(2,586
)

$
(905
)


The following table reconciles our benefit of income taxes at the statutory rate to that at the effective tax rate, using a U.S. federal statutory tax rate of 21% for each of 2019 and 2018, and 34% for 2017 (in thousands):


Year Ended December 31,


2019

2018

2017
Income tax at federal statutory rate

$
1,273


$
5,341


$
(6,257
)
Increase/(decrease) in tax resulting from:






State income tax expense, net of federal

(2,567
)

(438
)

1,428

Foreign rate differential

789


853


15,375

Stock-based compensation

(20,913
)

(7,916
)

(1,086
)
Change in valuation allowance

18,129


510


(20,500
)
Tax impact due to tax law change





2,627

Meals and entertainment
 
658

 
310

 
229

Change in uncertain tax position reserves





7,854

Research credits

(3,177
)

(1,563
)

(2,249
)
Tax basis step-up due to internal reorganization

(15,321
)




Other

50


317


1,674

Total benefit of income taxes

$
(21,079
)

$
(2,586
)

$
(905
)

The following table shows the significant components of deferred income tax assets (liabilities) (in thousands):
 


As of December 31,


2019

2018
Deferred tax assets:
 
 
 
 
    Deferred revenue

$
739


$
577

    Net operating losses

10,997


3,424

    Accruals and reserves

5,679


3,039

    Research & other credits
 
11,027

 
5,185

    Intangibles
 
12,291

 

    Operating lease liabilities
 
7,586

 

    Effect of Section 163(j) on interest expense
 
4,046

 

    Stock-based compensation

6,623


3,361

    State taxes
 
269

 
440

    Other
 
84

 
695

Total deferred tax assets
 
59,341

 
16,721

Less valuation allowance
 
(19,683
)
 
(1,138
)
Net deferred tax assets
 
39,658

 
15,583

 
 
 
 
 
Deferred tax liabilities:
 
 
 
 
    Property and equipment
 
(48
)
 
(953
)
    Operating lease right-of-use assets
 
(7,002
)
 

    Deferred commissions
 
(8,924
)
 
(4,595
)
    Convertible senior notes

(20,459
)

(8,499
)
    Effects of ASC 606 adoption
 
(8,819
)
 
(13,113
)
Total deferred tax liabilities
 
(45,252
)
 
(27,160
)
Net deferred tax liabilities

$
(5,594
)

$
(11,577
)

We have evaluated the available positive and negative evidence supporting the realization of our gross deferred tax assets, including our cumulative income, and the amount and timing of future taxable income. With the adoption of ASC 606 effective January 1, 2018, we filed proper tax forms to change our method of accounting for U.S. federal and state income tax reporting purposes. We deferred and are recognizing over four tax years, starting in 2018, the taxable portion of the income we recognized and recorded to the accumulated deficit at January 1, 2018, from adopting ASC 606. As a result, we recorded a related deferred tax liability, representing a source of significant future taxable income and constituting persuasive positive evidence supporting realization of our gross deferred assets. On that basis, we concluded it was more likely than not that we would realize a substantial portion of our deferred tax assets at January 1, 2018. Accordingly, we released $6.7 million of our $7.3 million valuation allowance at January 1, 2018. The release of the U.S. valuation allowance resulted in a tax benefit that is a part of the cumulative effect adjustment to accumulated deficit at January 1, 2018. Our valuation allowance at December 31, 2019 pertains to deferred tax assets that we are not more likely than not to realize, consisting of U.S. foreign tax credits, a U.S. capital loss carryforward, and all U.K. deferred tax assets.
The following table shows the changes in our valuation allowance (in thousands):
 


Year Ended December 31,


2019

2018

2017
Beginning balance

$
1,138


$
7,304


$
27,804

Decrease in valuation allowance due to Yhat acquisition





(998
)
Decrease in valuation allowance due to adoption of ASC 606
 

 
$
(6,676
)


Increase in valuation allowance due to internal reorganization
 
15,321

 

 

Other increase (decrease) in valuation allowance

3,224


510


(19,502
)
Ending balance

$
19,683


$
1,138


$
7,304



In 2019, through an internal reorganization, our U.K. subsidiary acquired foreign exploitation rights to intellectual property from two other of our subsidiaries. The U.K. subsidiary acquired the rights for their fair market value and that amount became the U.K. tax basis in such rights, which exceeds their carrying amount under U.S. GAAP. Accordingly, we recorded a deferred tax asset for the excess of U.K. tax basis over the U.S. GAAP carrying amount. Based on cumulative U.K. losses, we have concluded it was more likely than not that we would not realize our U.K. deferred tax asset, and accordingly, we have recorded a full valuation allowance against it.

As of December 31, 2019, we had U.S. federal and state income tax net operating loss carryforwards of approximately $56.5 million and $32.4 million, respectively. The U.S. federal and state net operating losses will begin to expire in 2035 and 2024, respectively, unless previously utilized.
Under Sections 382 and 383 of the Code, annual use of our net operating loss carryforwards and tax credits may be limited if a cumulative change in ownership of more than 50% occurs within a three-year period. We determined that ownership changes occurred in 2015 and 2019, which limit the future annual use of our net operating loss carryforwards and tax credits, but neither of which permanently disallows any of those tax attributes.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017, or the Tax Act, became law. The legislation adopts significant changes to the Code that include, among other things, reduction of the U.S. federal corporate income tax rate from 35% to 21%, effective for tax years beginning after December 31, 2018, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and imposition of a one-time transition tax on cumulative foreign earnings at December 31, 2018. Under the Tax Act, we remeasured our U.S. deferred tax assets and liabilities that would reverse after December 31, 2017, at the reduced U.S. federal corporate income tax rate of 21%. As a result, we reduced our net U.S. deferred tax asset and our valuation allowance by $2.6 million, which resulted in no net income tax expense for the year ended December 31, 2017. We had no cumulative foreign earnings at December 31, 2017, and as a result, were not impacted by the one-time transition tax included in the Tax Act. As of December 31, 2017, we completed our accounting for the income tax effects of the Tax Act, including our election of an accounting policy, the period cost method, which recognizes the tax effects of future inclusions of global intangible low-taxed income, or GILTI, in the period we become subject to GILTI. The Tax Act had minimal impact on our income tax provision and income tax accruals as of and for the years ended December 31, 2019 and 2018.
Other provisions in the Tax Act that took effect in 2018, such as those relevant to us pertaining to GILTI, covering foreign income earned in low-tax countries, and the deduction for foreign derived intangible income, or FDII, had no impact on our income tax provision and income tax accruals as of and for the year ended December 31, 2019. However, we expect the GILTI tax and the FDII deduction to impact our income tax provision and accruals after 2019.
The Tax Act changed the tax deductibility of interest expense through the new Section 163(j) of the Code, which limits our U.S. tax deduction for interest expense for tax years beginning after December 31, 2017 to the sum of our interest income and 30% of our adjusted taxable income, each as defined in the Tax Act. Disallowed interest expense in a tax year can be carried forward indefinitely to the next succeeding tax year(s) and is treated as business interest paid and deductible in that year(s), subject to the Section 163(j) limitation.
We have not accrued U.S. state income taxes or foreign withholding taxes on the earnings of our foreign subsidiaries, as these amounts are intended to be indefinitely reinvested in operations outside the United States. As of December 31, 2019, there are immaterial cumulative amounts of undistributed earnings at our foreign subsidiaries.
We are subject to taxation in the United States and various states and international jurisdictions. Our U.S. federal tax returns are open for examination for tax years 2016 and forward, and our state tax returns are open for examination for tax years 2014 and forward. Our tax returns for international jurisdictions are open for examination for tax years 2015 and forward. However, net operating loss and other tax attribute carryforwards utilized in subsequent years continue to be subject to examination by the tax authorities until the year to which the net operating loss and/or other tax attributes are carried forward is no longer subject to examination. Neither we nor any of our subsidiaries are currently under examination from tax authorities in the jurisdictions in which we do business.
At December 31, 2019, we had approximately $7.6 million of unrecognized tax benefits. If fully recognized, $7.0 million of the unrecognized tax benefits would reduce our effective tax rate. In the next 12 months, we do not expect our unrecognized tax benefits to decrease. We had no accruals for interest or penalties related to our uncertain tax positions at December 31, 2019 and 2018.
The following table shows the activity in gross unrecognized tax benefits (in thousands):


Year Ended December 31,


2019

2018

2017
Balance at beginning of year

$
6,234


$
5,794


$

Additions based on tax position related to the current year

1,322


391


5,624

Additions for tax positions of prior years



49


170

Balance at end of year

$
7,556


$
6,234


$
5,794


v3.19.3.a.u2
Basic and Diluted Net Income (Loss) Per Share
12 Months Ended
Dec. 31, 2019
Earnings Per Share [Abstract]  
Basic and Diluted Net Income (Loss) Per Share
17. Basic and Diluted Net Income (Loss) Per Share
The following table presents the computation of net income (loss) per share (in thousands except per share data):
 
 
Year Ended December 31,
 
 
2019

2018

2017
Numerator:
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
 
$
27,143


$
28,020


$
(19,482
)
Denominator:
 
 
 
 
 
 
Weighted-average shares used to compute net income (loss) per
   share attributable to common stockholders, basic
 
63,424


60,829


53,006

Effect of dilutive securities:
 
 
 
 
 
 
Convertible senior notes
 
1,975

 
409

 

Employee stock awards
 
3,259

 
3,506

 

Contingently issuable shares
 
3

 

 

Weighted-average shares used to compute net income (loss) per
   share attributable to common stockholders, diluted
 
68,661

 
64,744

 
53,006

Net income (loss) per share attributable to common stockholders,
   basic
 
$
0.43

 
$
0.46

 
$
(0.37
)
Net income (loss) per share attributable to common stockholders,
   diluted
 
$
0.40

 
$
0.43

 
$
(0.37
)

The following weighted-average equivalent shares of common stock, excluding the impact of the treasury stock method, were excluded from the diluted net income (loss) per share calculation because their inclusion would have been anti-dilutive (in thousands):


Year Ended December 31,


2019

2018

2017
Stock awards

209


510


6,312

Convertible senior notes
 
1,644

 

 

Conversion of convertible preferred stock





3,290

Contingently issuable shares





7

Total shares excluded from net income (loss) per share

1,853


510


9,609


It is our current intent to settle the principal amount of the Notes with cash, and therefore, we use the treasury stock method for calculating any potential dilutive effect of the conversion option on diluted net income per share. The conversion options may have a dilutive impact on net income per share of common stock when the average market price per share of our Class A common stock for a given period exceeds the initial conversion price of the 2023 Notes and the 2024 & 2026 Notes of $44.33 and $189.36 per share, respectively.
v3.19.3.a.u2
Segment and Geographic Information
12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Segment and Geographic Information
18. Segment and Geographic Information
Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker, or CODM, who is our chief executive officer, in deciding how to allocate resources and assess our financial and operational performance. Our CODM evaluates our financial information and resources and assesses the
performance of these resources on a consolidated and aggregated basis. As a result, we have determined that our business operates in a single operating segment.
Long-lived assets classified by geographic location, and with countries over 10% of this total, were as follows (in thousands):
 
 
As of December 31,
Long-lived assets:
 
2019
 
2018
United States
 
$
39,641

 
$
10,610

United Kingdom
 
7,263

 
650

Other countries
 
6,992

 
469

Total
 
$
53,896

 
$
11,729


v3.19.3.a.u2
Selected Quarterly Financial Data (Unaudited)
12 Months Ended
Dec. 31, 2019
Quarterly Financial Information Disclosure [Abstract]  
Selected Quarterly Financial Data (Unaudited)
19. Selected Quarterly Financial Data (Unaudited)
The following table sets forth unaudited quarterly financial information for the years ended December 31, 2019 and 2018. We have prepared the unaudited quarterly consolidated statements of operations data on a basis consistent with the audited annual consolidated financial statements. In the opinion of management, the financial information in this table reflects all adjustments, consisting of normal and recurring adjustments, necessary for the fair statement of this data (in thousands except per share data):
 


2019


Quarter Ended


March 31

June 30

September 30

December 31
Revenue

$
76,020


$
82,043


$
103,397


$
156,450

Gross margin

68,020


72,748


93,752


144,239

Income (loss) from operations

(4,402
)

(8,288
)

11,936


38,735

Net income (loss)

5,914


(3,219
)

(6,240
)

30,688

Diluted income (loss) per share

0.09


(0.05
)

(0.10
)

$
0.44

 


2018


Quarter Ended


March 31

June 30

September 30

December 31
Revenue

$
50,329


$
51,502


$
62,589


$
89,150

Gross margin

45,325


46,233


56,779


82,433

Income (loss) from operations

2,683


(3,425
)

9,394


21,118

Net income (loss)

4,897


(4,239
)

10,821


16,541

Diluted income (loss) per share

0.08


(0.07
)

0.17


0.25


v3.19.3.a.u2
Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Principles of Consolidation and Basis of Presentation
Our consolidated financial statements are presented in accordance with accounting standards generally accepted in the United States of America, or U.S. GAAP, and include the accounts of Alteryx, Inc. and its wholly owned subsidiaries after elimination of intercompany transactions and balances.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent 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 from these estimates and assumptions.
On an ongoing basis, our management evaluates estimates and assumptions, including those related to determination of standalone selling prices of our products and services, income tax valuations, stock-based compensation, goodwill, and intangible assets valuations and recoverability. We base our estimates on historical data and experience, as well as various other factors that our 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.
Concentration of Risk
Financial instruments, which subject us to concentrations of credit risk, consist primarily of cash and cash equivalents, investments, and trade accounts receivable. We maintain our cash and cash equivalents and investments with three major financial institutions and a portion of such balances exceed or are not subject to Federal Deposit Insurance Corporation, or FDIC, insurance limits.
We extend differing levels of credit to customers, do not require collateral deposits, and, when necessary, maintain reserves for potential credit losses based upon the expected collectability of accounts receivable. We manage credit risk related to our customers by following credit approval processes, establishing credit limits, performing periodic evaluations of credit worthiness and applying other credit risk monitoring procedures.
Accounts receivable include amounts due from customers with principal operations primarily in the United States.
As of December 31, 2019 and 2018, one of our distributors accounted for 10.6% and 10.1% of our total accounts receivable balance, respectively. No other customers accounted for 10% or more of our accounts receivable balance or 10% or more of our revenue in any years presented.
Fair Value of Financial Instruments
We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. We determine fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the
following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
 
 
Level 1
Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.
 
 
Level 2
Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active near the measurement date; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
 
 
Level 3
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The fair value of our money market funds was determined based on “Level 1” inputs.
The fair value of our certificates of deposit, commercial paper, U.S. Treasury and agency bonds, and corporate bonds were determined based on “Level 2” inputs. The valuation techniques used to measure the fair value of certificates of deposit and commercial paper included observable market-based inputs for similar assets, which primarily include yield curves and time-to-maturity factors. The valuation techniques used to measure the fair value of U.S. Treasury and agency bonds and corporate bonds included standard observable inputs, including reported trades, quoted market prices, matrix pricing, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets or benchmark securities and data provided by third parties as many of the bonds are not actively traded.
Cash and Cash Equivalents and Restricted Cash
We consider cash and cash equivalents to include short-term, highly liquid investments that are readily convertible to known amounts of cash and so near their maturity that they present an insignificant risk of changes in the value, including investments that mature within three months from the date of original purchase. Amounts receivable from a credit card processor of approximately $0.6 million and $0.4 million as of December 31, 2019 and 2018, respectively, are considered cash equivalents because they were both short-term and highly liquid in nature and are typically converted to cash within three days of the sales transaction.
Investments in Marketable Securities
Our investments consist of available-for-sale marketable securities. The classification of investments is determined at the time of purchase and reevaluated at each balance sheet date. Investments are stated at fair value and are classified as current or non-current based on the nature of the securities as well as their stated maturities. The net unrealized gains or losses on available-for-sale securities are recorded as a component of accumulated other comprehensive income (loss), net of income taxes, on the consolidated statements of redeemable convertible preferred stock and stockholders' equity.
At each balance sheet date, we assess available-for-sale securities in an unrealized loss position to determine whether the unrealized loss is other than temporary. We consider factors including the significance of the decline in value as compared to the cost basis, underlying factors contributing to a decline in the prices of securities in a single asset class, how long the market value of the security has been less than its cost basis, the security’s relative performance versus its peers, sector or asset class, expected market volatility, and the market and economy in general, and, if determined to be other than temporary, will record an other than temporary impairment charge.
Accounts Receivable, Allowance for Doubtful Accounts, and Sales Reserves
Our accounts receivable consists of amounts due from customers and are typically unsecured. Accounts receivable are recorded at the invoiced amount and are non-interest bearing.
The allowance for doubtful accounts is estimated and established by assessing individual accounts receivable over a specific age and dollar value, and all other balances are pooled based on historical collection experience. Additions to the allowance are charged to general and administrative expenses or revenue in the consolidated statements of operations and comprehensive income (loss), or against deferred revenue in the consolidated balance sheets depending on the timing of the addition in relation to the contract term. Accounts receivable are written off against the allowance when an account balance is deemed uncollectible.
We estimate a sales reserve based upon the historical adjustments made to customer billings. Such reserve is recorded as a reduction of revenue and deferred revenue in the consolidated statements of operations and comprehensive income (loss) and balance sheets, respectively.
Assets Recognized from the Costs to Obtain a Contract with Customer, Royalties, Revenue Recognition, Deferred Revenue, Cost of Revenue
We record an asset for the incremental costs of obtaining a contract with a customer, which primarily consists of sales commissions and partner referral fees that are earned upon execution of contracts. We pay commissions for new product sales as well as for renewals of existing contracts, and partner referral fees only for new product sales. For customer contracts in which the commissions paid on new business and renewals are commensurate, we generally amortize these costs over the contractual term of the contract, consistent with the pattern of revenue recognition for each performance obligation. For customer contracts in which the commissions paid on new business and renewals are not commensurate and for partner referral fees, we amortize the costs on new business over an expected period of benefit, which we have determined to be approximately four years. The expected period of benefit was determined by taking into consideration our customer contracts, the duration of our relationships with our customers and the useful life of our technology. In capitalizing and amortizing deferred commissions and partner referral fees, we have elected to apply a portfolio approach. We include amortization of this asset in sales and marketing expense in our consolidated statements of operations and comprehensive income (loss).
Revenue Recognition - ASC 605
We applied the provisions of ASC 605, as described below, to revenue recognized during the year ended December 31, 2017. For each of the years ended December 31, 2018 and 2019, the provisions of ASC 606, as described below, were applied.
Revenue was recognized when all four revenue recognition criteria had been met: persuasive evidence of an arrangement existed, the product had been delivered or the service had been performed, the fee was fixed or determinable, and collection was probable or reasonably assured. Determining whether and when some of these criteria had been satisfied often involved exercising
judgment and using estimates and assumptions that could have had a significant impact on the timing and amount of revenue that was recognized. Invoiced amounts had been recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria had been met.
We accounted for revenue from software and related products and services in accordance with ASC 985-605, Software, or ASC 985-605. For the duration of the license term, the customer received coterminous PCS. We did not provide PCS on a standalone or renewal basis unless the customer renewed the software subscription license and, as such, we were unable to determine vendor specific objective evidence of fair value, or VSOE, of PCS. Accordingly, revenue for the subscription-based software licenses and PCS was recognized ratably beginning on the date the license was first made available to the customer and continued through the end of the subscription term.
We also recognized revenue from the sale of a hosted version of our platform which was delivered pursuant to a hosting arrangement. Revenue from hosted services was recognized ratably beginning on the date the services were first made available to the customer and continued through the end of the contractual service term. Hosted revenue arrangements were outside the scope of ASC 986-605 software revenue recognition guidance as customers did not have the right to take possession of the software code underlying our hosted solutions.
Our arrangements may have included the resale of third-party syndicated data content pursuant to subscription arrangements, and professional services. Data subscriptions provided the customer the right to receive data that was updated periodically over the term of the license agreement, and revenue was recognized ratably over the contract period once the customer had access to the data. We recognized revenue from the resale of third-party syndicated data on a gross basis when (i) we were the primary obligor, (ii) we had latitude to establish the price charged, and (iii) we bore credit risk in the transaction. Revenue from professional services, which was comprised primarily of training and consulting services, was recognized as the services were provided.
We also entered into multiple element revenue arrangements in which a customer may have purchased a combination of software, data, and services.
For multiple element arrangements that contained only software and software-related elements, revenue was allocated and deferred for the undelivered elements based on their VSOE. In situations where VSOE existed for all elements (delivered and undelivered), the revenue to be earned under the arrangement among the various elements was allocated based on their relative fair value. For arrangements where VSOE existed only for the undelivered elements, the full fair value of the undelivered elements was deferred and the difference between the total arrangement fee and the amount deferred for the undelivered items was recognized as revenue. If VSOE did not exist for an undelivered service element, the revenue from the entire arrangement was recognized over the service period, once all services had commenced. Changes in assumptions or judgments or changes to the elements in a software arrangement could have caused a material increase or decrease in the amount of revenue recognized in a particular period.
VSOE was determined for each element, or a group of elements sold on a combined basis, such as our software and PCS, based on historical standalone sales to third parties or the price to be charged when the product or service, or group of products or services, was available. In determining VSOE, a substantial majority of the selling price for a product or service must have fallen within a reasonably narrow pricing range.
Revenue related to the delivered products or services was recognized only if (i) the above revenue recognition criteria were met, (ii) any undelivered products or services were not essential to the functionality of the delivered products and services, (iii) payment for the delivered products or services was not contingent upon delivery of the remaining products or services, and (iv) there was an enforceable claim to receive the amount due in the event that the undelivered products or services were not delivered.
For multiple-element arrangements that contained both software and non-software elements, revenue was allocated on a relative fair value basis to software or software-related elements as a group and any non-software elements separately based on the selling price hierarchy. The selling price for each deliverable was determined using VSOE of selling price, if it existed, or third-party evidence of fair value, or TPE. If neither VSOE nor TPE existed for a deliverable, best estimate of selling price, or BESP, was used. Once revenue was allocated to software or software-related elements as a group, revenue was recognized in accordance with software revenue accounting guidance. Revenue allocated to non-software elements was recognized in accordance with SEC Staff Accounting Bulletin Topic 13, Revenue Recognition. Revenue was recognized when revenue recognition criteria were met for each element.
Judgment was required to determine VSOE or BESP. For VSOE, we considered multiple factors including, but not limited to, product types, geographies, sales channels, and customer sizes and, for BESP, we also considered market conditions, competitive landscape, internal costs, gross margin objectives, and pricing practices. Pricing practices taken into consideration include historic
contractually stated prices, volume discounts, where applicable, and price lists. BESP was generally used for offerings that are not typically sold on a standalone basis or when the selling prices for a product or service did not fall within a reasonably narrow pricing range.
Revenue generated from sales arrangements through distributors was recognized in accordance with our revenue recognition policies as described above at the amount invoiced to the distributor. We recognized revenue at the net amount invoiced to the distributor, as opposed to the gross amount the distributor invoiced their end customer, as we have determined that (i) we were not the primary obligor in these arrangements, (ii) we did not have latitude to establish the price charged to the end-customer, and (iii) we did not bear credit risk in the transaction with the end-customer.
Revenue Recognition - ASC 606
Our revenue is derived from the licensing of subscription-based software, data subscription services, and professional services, including training and consulting services. The subscription-based license includes access to hosted services and software and post-contract support, or PCS, which provides the customer the right to receive when-and-if-available unspecified future updates, upgrades and enhancements, and technical product support. We implemented the provisions of ASC 606, Revenue from Contracts with Customers, or ASC 606, and all related appropriate guidance, effective as of January 1, 2018 under the modified retrospective method. The core principle of ASC 606 is to recognize revenue upon the transfer of goods or services to our customers in an amount that reflects the consideration to which we expect to be entitled. In order to adhere to this core principle, we apply the following five-step approach:
identify the contract with a customer;
identify the performance obligations in the contract;
determine the transaction price;
allocate the transaction price to the performance obligations in the contract; and
recognize revenue when (or as) we satisfy a performance obligation.
We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for goods or services we transfer to the customer.
Revenue is measured based on consideration specified in a contract with a customer, and excludes any taxes we collect concurrent with revenue-producing activities. Most of our contracts contain a fixed transaction price. Our subscription agreements typically range from one to three years and are billed annually in advance with net payment terms of 60 days or less. The primary purpose of our payment and invoicing terms is to provide customers with predictable ways to purchase our software and services, and not to provide customers with financing.
Our contracts with customers typically contain multiple performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. All of our licenses are sold as subscription-based, on-premise, licenses and are bundled with maintenance and support, or PCS, and cloud-based offerings. In addition to our on-premise licenses, we sell subscriptions to third-party syndicated data and provide professional service offerings primarily related to trainings for our customers. We allocate the transaction price of the contract to each performance obligation using the relative standalone selling price, or SSP, of each distinct good or service in the contract. We determine estimates of SSP based on sales of goods and services sold on a standalone basis, our overall pricing strategies, market conditions, including the geographic locations in which the products are sold, and market data. We review the SSP for each of our performance obligations at least every financial reporting period and update it when appropriate to ensure that the practices employed reflect our recent pricing experience and maximize the use of observable data.
We recognize revenue when we satisfy a performance obligation by transferring control of a good or service to a customer. Revenue related to our subscription-based licenses is recognized at a point in time when the platform is first made available to the customer, or the beginning of the subscription term, if later. Revenue related to PCS, cloud-based offerings, and data subscriptions is recognized ratably over the subscription terms. Professional services revenue is recognized when the services are provided to the customer, or when they expire.

Contract Assets and Contract Liabilities
Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to our contracts with customers. Contract assets primarily relate to unbilled amounts for contracts with customers for which the amount of revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional. Contract assets are recorded as current if the invoice will be delivered to the customer within the succeeding 12-month period with the remaining recorded as long-term. Current contract assets are included
in prepaid expenses and other current assets and long-term contract assets are included in other assets on our consolidated balance sheets.
Contract liabilities, or deferred revenue, are recorded for amounts that are collected in advance of the satisfaction of performance obligations. These liabilities are classified as current if the performance obligation will be satisfied during the succeeding 12-month period and the remaining portion is recorded as non-current deferred revenue in our consolidated balance sheet.
Cost of Revenue
Cost of revenue is accounted for in accordance with ASC 705, Cost of Sales and Services, and consists of employee-related costs, including salaries and bonuses, stock-based compensation expense, and employee benefit costs associated with our customer support and professional services organizations, expenses related to hosting and operating our cloud infrastructure in a third-party data center, licenses of third-party syndicated data, amortization of acquired completed technology intangible assets, and related overhead expenses. Out-of-pocket travel costs related to the delivery of professional services are typically reimbursed by the customers and are accounted for as both revenue and cost of revenue in the period in which the cost is incurred.
We pay royalties associated with licensed third-party syndicated data sold with our platform and we recognize royalty expense to cost of revenue in our consolidated statements of operations and comprehensive income (loss) when incurred.
Property and Equipment
Property and equipment are stated at historical cost, less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or lease terms. Useful lives by asset category are as follows:
Computer equipment
  
3 years
Furniture and fixtures
  
3 to 7 years
Leasehold improvement
  
Shorter of useful life or lease term

Repairs and maintenance costs are charged to expense as incurred. Upon the sale or retirement of property and equipment, the cost and the related accumulated depreciation or amortization are removed from the accounts, with any resulting gain or loss included in our consolidated statements of operations and comprehensive income (loss).
Intangible Assets
Intangible assets consist primarily of acquired developed technology. We determine the appropriate useful life of our intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives of two to eight years, using the straight-line method, which approximates the pattern in which the economic benefits are consumed.
Impairment of Long-Lived Assets
We review our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be fully recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted cash flows attributable to such assets to their carrying value. If the carrying value of the assets exceeds the forecasted undiscounted cash flows, then the assets are written down to their fair value. Fair value is determined based on discounted cash flows or appraised values, depending upon the nature of the assets.
Business Combinations
The results of businesses acquired in a business combination are included in our consolidated financial statements from the date of the acquisition. We allocated the purchase price, including the fair value of any non-cash and contingent consideration, to the identifiable assets and liabilities of the relevant acquired business at their acquisition date fair values. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill.
Contingent consideration payable in cash or a fixed dollar amount settleable in a variable number of shares is classified as a liability and recorded at fair value, with changes in fair value recorded in general and administrative expenses each period. Transaction costs associated with business combinations are expensed as incurred, and are included in general and administrative expense in the consolidated statements of operations and comprehensive income (loss).
We perform valuations of assets acquired, liabilities assumed, and contingent consideration and allocate the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired, liabilities assumed, and contingent consideration requires us to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, the probability of achievement of specified milestones, and selection of comparable companies. We engage the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired, liabilities assumed, and contingent consideration in a business combination.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination. We test goodwill for impairment in accordance with the provisions of ASC 350, Intangibles – Goodwill and Other, ASC 350. Goodwill is tested for impairment at least annually at the reporting unit level or whenever events or changes in circumstances indicate that goodwill might be impaired. Events or changes in circumstances which could trigger an impairment review include a significant adverse change in legal factors or in the business climate, unanticipated competition, loss of key personnel, significant changes in the use of the acquired assets or our strategy, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations.
ASC 350 provides that an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if an entity concludes otherwise, then it is required to perform an impairment test.
The impairment test involves comparing the estimated fair value of a reporting unit with its book value, including goodwill. If the estimated fair value exceeds book value, goodwill is considered not to be impaired. If, however, the fair value of the reporting unit is less than book value, then an impairment loss is recognized in an amount equal to the amount that the book value of the reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.
We have one reporting unit and we test for goodwill impairment annually during the fourth quarter of each calendar year using a quantitative assessment.
Research and Development
Research and development expense consists primarily of employee-related costs, including salaries and bonuses, stock-based compensation expense, and employee benefits costs, depreciation of equipment used in research and development for our research and development employees, third-party contractor costs, and related allocated overhead costs. Product development expenses, other than software development costs qualifying for capitalization, are expensed as incurred.
Software Development Costs We account for costs to develop or obtain internal-use software in accordance with ASC 350-40, Internal-Use Software, or ASC 350-40. We also account for costs of significant upgrades and enhancements resulting in additional functionality under ASC 350-40. These costs are primarily software purchased for internal-use, purchased software licenses, implementation costs, and development costs related to our hosted product which is accessed by customers on a subscription basis. Costs incurred for maintenance, training, and minor modifications or enhancements are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which is generally three years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.Costs incurred in the development of new software products and enhancements to existing software products to be accounted for under software revenue recognition guidance are accounted for in accordance with ASC 985-20, Costs of Software to be Sold, Leased, or Marketed, or ASC 985-20. These costs, consisting primarily of salaries and related payroll costs, are expensed as incurred until technological feasibility has been established. After technological feasibility is established, costs are capitalized in accordance with ASC 985-20.
Leases
Through December 31, 2018, we recognized rent expense related to operating leases on a straight-line basis over the lease term and, accordingly, recorded the difference between rent payments and rent expense as a deferred rent liability. Effective January 1, 2019, we adopted ASU 2016-02, Leases, or ASC 842. See Recently Adopted Accounting Pronouncements below.
Under ASC 842, we determine if an arrangement is a lease at contract inception. Operating leases are included in operating lease right-of-use assets, accrued expenses and other current liabilities and operating lease liabilities in our consolidated balance sheets. Operating lease charges are recorded in operating expenses in our consolidated statements of operations and comprehensive income (loss).
Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. We do not separate lease and non-lease components for all underlying asset classes. As most of our leases do not provide a readily determinable implicit rate, we estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. We determine our incremental borrowing rate for each lease based primarily on the lease term and the economic environment of the applicable country or region. The operating lease right-of-use asset also includes any lease payments made and excludes lease incentives. The lease term includes options to extend or terminate when we are reasonably certain the option will be exercised. In general, we are not reasonably certain to exercise such options. We recognize lease expense for minimum lease payments on a straight-line basis over the lease term, while variable lease payments, such as common area maintenance, are recognized as incurred. We elected the practical expedient to not recognize operating lease right-of-use assets and operating lease liabilities that arise from short-term leases (i.e., leases with a term of 12 months or less).
Advertising Costs
Advertising costs are expensed as incurred. We incurred advertising costs of approximately $17.8 million, $9.1 million, and $5.5 million for the years ended December 31, 2019, 2018, and 2017, respectively. Such costs primarily relate to our annual user conferences, online and print advertising as well as sponsorship of public marketing events, and are reflected in sales and marketing expense in our consolidated statements of operations and comprehensive income (loss).
Stock-Based Compensation
We recognize stock-based compensation expense in accordance with the provisions of ASC 718, Compensation—Stock Compensation, or ASC 718. ASC 718 requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors based on the grant date fair values of the awards. We use the Black-Scholes option-pricing method for valuing stock options and shares granted under the employee stock purchase plan. Restricted stock units, or RSUs, are valued based on the fair value of our common stock on the date of grant, less our expected dividend yield. For awards that vest solely based on continued service, the fair value of an award is recognized as an expense over the requisite service period on a straight-line basis. For awards that contain performance conditions, the fair value of an award is recognized based on the probability of the performance condition being met using the graded vesting method. Stock-based compensation expense is included in cost of revenue and operating expenses within our consolidated statements of operations and comprehensive income (loss) based on the classification of the individual earning the award.
The determination of the grant date fair value of stock-based awards is affected by the estimated fair value per share of our common stock as well as other highly subjective assumptions, including, but not limited to, the expected term of the stock-based awards, expected stock price volatility, risk-free interest rates, and expected dividends yields, which are estimated as follows:
 
Fair value per share of our common stock. Prior to our initial public offering, in March 2017, given the absence of an active market for our common stock, our board of directors determined the fair value of our common stock at the time of grant for each stock-based award based upon several factors, including consideration of input from management and contemporaneous third-party valuations. The fair value of our common stock was determined in accordance with applicable elements of the practice aid issued by the American Institute of Certified Public Accountants, Valuation of Privately Held Company Equity Securities Issued as Compensation. Each fair value estimated was based on a variety of factors, including the prices, rights, preferences and privileges of our preferred stock relative to those of our common stock, pricing and timing of transactions in our equity, the lack of marketability of our common stock, our actual operating and financial performance, developments and milestones in our company, the market performance of comparable publicly traded companies, the likelihood of achieving a liquidity event, and U.S. and global capital market conditions, among other factors. Subsequent to our initial public offering, the fair value of our common stock is based on the closing price of our Class A common stock, as reported on the New York Stock Exchange, on the date of grant. 
Expected term. We determine the expected term of the awards using the simplified method, which estimates the expected term based on the average of the vesting period and contractual term of the stock option.
Expected volatility. We estimate the expected volatility based on the volatility of similar publicly held entities (referred to as “guideline companies”) over a period equivalent to the expected term of the awards. In evaluating the similarity of guideline companies to us, we considered factors such as industry, stage of life cycle, size, and financial leverage. We intend to continue to consistently apply this process using the same or similar guideline companies to estimate the expected volatility until sufficient historical information regarding the volatility of the share price of our common stock becomes available.
Risk-free interest rate. The risk-free interest rate used to value our stock-based awards is based on the U.S. Treasury yield in effect at the time of grant for a period consistent with the expected term of the award.
Estimated dividend yield. The expected dividend is assumed to be zero as we have never declared or paid any cash dividends and do not currently intend to declare dividends in the foreseeable future.
In addition, prior to 2018, we were required to estimate at the time of grant the expected forfeiture rate and only recognize expense for those stock-based awards expected to vest. Our estimated forfeiture rate was based on our estimate of pre-vesting award forfeitures. As a result of our adoption of ASU 2016-09 effective January 1, 2018, we now account for forfeitures as they occur rather than estimating a forfeiture rate at the time of grant.
The assumptions used in calculating the fair value of stock-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change or we use different assumptions, stock-based compensation expense could be materially different in the future.
Foreign Currency Remeasurement and Transactions
The functional currency of our wholly owned subsidiaries is the currency of the primary economic environment in which the entity operates. Assets and liabilities denominated in currencies other than the functional currency are remeasured using the current exchange rate for monetary accounts and historical exchange rates for nonmonetary accounts, with exchange differences on remeasurement included in other income (expense), net in our consolidated statements of operations and comprehensive income (loss). Our foreign subsidiaries that utilize foreign currency as their functional currency translate such currency into U.S. dollars using (i) the exchange rate on the balance sheet dates for assets and liabilities, (ii) the average exchange rates prevailing during the period for revenues and expenses, and (iii) historical exchange rates for equity. Any translation adjustments resulting from this process are shown separately as a component of accumulated other comprehensive income (loss) within stockholder’s equity in the consolidated balance sheets.
Transactions denominated in currencies other than the U.S. dollar may result in transaction gains or losses at the end of the period and when the related receivable or payable is settled, which are recorded in other income (expense), net.
Income Taxes
We apply the provisions of ASC 740, Income Taxes, or ASC 740. Under ASC 740, we account for our income taxes using the asset and liability method whereby deferred tax assets and liabilities are determined based on temporary differences between the bases used for financial reporting and income tax reporting purposes. Deferred income taxes are provided based on the enacted tax rates and laws that will be in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for deferred tax assets if it is more likely than not that we will not realize those tax assets through future operations.
We also utilize the guidance in ASC 740 to account for uncertain tax positions. ASC 740 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more likely than not to be realized and effectively settled. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately reflect actual outcomes. We recognize interest and penalties on unrecognized tax benefits as a component of benefit of income taxes in our consolidated statements of operations and comprehensive income (loss).
Net Income (Loss) Per Share Attributable to Common Stockholders
In periods in which we have net income, and a contingent event has been met, we apply the two-class method for calculating earnings per share. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. Participating securities include convertible preferred stock and our Notes. In periods in which we have net losses after accretion of convertible preferred stock, we do not attribute losses to participating securities as they are not contractually obligated to share our losses.
Under the two-class method, basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Net income (loss) attributable to common stockholders is calculated as net income (loss) including current period convertible preferred stock accretion.
Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options and convertible preferred stock as computed under the treasury stock method. In periods in which we incurred a net loss, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share.
Recent Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board, or FASB, issued ASU 2016-02, codified as ASC 842, which requires lessees to record the assets and liabilities arising from all leases, with the exception of short-term leases, on the balance sheet. Under ASC 842, lessees recognize a liability for lease payments and a right-of-use asset. This guidance retains the distinction between finance leases and operating leases and the classification criteria remain similar. For financing leases, a lessee will recognize the interest on a lease liability separate from amortization of the right-of-use asset. In addition, repayments of principal will be presented within financing activities, and interest payments will be presented within operating activities in the statement of cash flows. For operating leases, a lessee will recognize a single lease cost on a straight-line basis and classify all cash payments within operating activities in the statement of cash flows.
We adopted the new lease accounting standard effective January 1, 2019 using the optional transition method described in ASU 2018-11, Leases - Targeted Improvements, which was issued in July 2018. Under the optional transition method, we recognized the cumulative effect of initially applying the guidance as an adjustment to the operating lease right-of-use assets and operating lease liabilities on our consolidated balance sheet on January 1, 2019 in the amount of $24.8 million without retrospective application to comparative periods. The adoption of ASC 842 did not have an impact on retained earnings (accumulated deficit) on our consolidated balance sheet as of January 1, 2019 and did not have a material impact on our consolidated statements of operations and comprehensive income (loss). We elected the package of practical expedients permitted under the transition guidance within the new standard which allowed us to carry forward our historical assessments of whether contracts are or contain leases, lease classification and initial direct costs. See Note 14, Leases, of these notes to our consolidated financial statements for additional details.
Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology. As a result, we will be required to use a forward-looking expected credit loss model for accounts receivables and other commitments to extend credit. This pronouncement is effective for reporting periods beginning after December 15, 2019. Our analysis and evaluation of the new standard and its potential impact on our consolidated financial statements will continue through its effective date in the first quarter of 2020.
In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs incurred to develop or obtain internal-use software. This guidance will be effective for us for annual reporting periods beginning after December 15, 2019 and for interim periods within those annual periods, and can be applied either retrospectively or prospectively to all implementation costs after the date of adoption. Early adoption is permitted. We currently plan to adopt this new accounting standard prospectively. As a result of the adoption, we will be required to capitalize additional costs related to the implementation of cloud computing arrangements that we have historically expensed as incurred.
v3.19.3.a.u2
Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Schedule of Useful Lives of Assets Useful lives by asset category are as follows:
Computer equipment
  
3 years
Furniture and fixtures
  
3 to 7 years
Leasehold improvement
  
Shorter of useful life or lease term

Property and equipment, net consisted of the following (in thousands): 


Year Ended December 31,


2019

2018
Computer equipment & software

$
10,521


$
8,909

Furniture and fixtures

4,972


3,685

Leasehold improvements

10,438


5,398

Construction in process

3,771


834



$
29,702


$
18,826

Less: Accumulated depreciation and amortization

(9,406
)

(7,097
)
Total property and equipment, net

$
20,296


$
11,729


v3.19.3.a.u2
Revenue (Tables)
12 Months Ended
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue
The disaggregation of revenue by region, revenue by type of performance obligation, and cost of revenue by type of performance obligation was as follows (in thousands):
 
 
Year Ended December 31,
Revenue by region:
 
2019
 
2018
 
2017
United States
 
$
296,108

 
$
178,774

 
$
101,932

International
 
121,802

 
74,796

 
29,675

Total
 
$
417,910

 
$
253,570

 
$
131,607

 
 
 
 
 
 
 
Revenue by type of performance obligation:
 
 
 
 
 
 
Subscription-based software license
 
$
229,194

 
$
124,669

 
*

PCS and services
 
188,716

 
128,901

 
*

Total
 
$
417,910

 
$
253,570

 
$
131,607

 
 
 
 
 
 
 
Costs of revenue by type of performance obligation:
 
 
 
 
 
 
Subscription-based software license
 
$
3,923

 
$
1,505

 
*

PCS and services
 
35,228

 
21,295

 
*

Total
 
$
39,151

 
$
22,800

 
$
21,803

* We adopted ASC 606 under the modified retrospective method, and therefore we did not retrospectively apply the guidance to the year ended December 31, 2017. As a result, this information is not available for the prior period.
Contract Assets and Contract Liabilities A summary of the activity impacting our deferred commissions during the years ended December 31, 2019 and 2018 are presented below (in thousands):
 
Year Ended December 31,
 
2019
 
2018
Beginning balance
$
22,391

 
$
11,213

Adoption of ASC 606

 
(1,154
)
Additional deferred commissions
55,024

 
30,828

Amortization of deferred commissions
(34,380
)
 
(18,496
)
Ending balance
$
43,035

 
$
22,391


v3.19.3.a.u2
Fair Value Measurements (Tables)
12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Summary of Cash and Cash Equivalents and Investments' Costs, Gross Unrealized Gains (Losses), and Fair Value by Major Security Type Recorded as Cash and Cash Equivalents or Short-Term or Long-Term Investments The following tables present our cash and cash equivalents and investments’ costs, gross unrealized gains (losses), and fair value by major security type recorded as cash and cash equivalents or short-term or long-term investments (in thousands):
 


As of December 31, 2019


Cost

Net
Unrealized
Gains (Losses)

Fair Value

Cash and
Cash
Equivalents

Short-term
Investments

Long-term
Investments
Cash

$
53,039


$


$
53,039


$
53,039


$


$

Level 1:












Money market funds

223,580




223,580


223,580





Subtotal

223,580




223,580


223,580





Level 2:












Commercial paper

217,140


(6
)

217,134


98,325


118,809



Certificates of deposit

1,000




1,000






1,000

U.S. Treasury and agency bonds

294,953


199


295,152


35,005


161,767


98,380

Corporate bonds

184,516


444


184,960




96,419


88,541

Subtotal

697,609


637


698,246


133,330


376,995


187,921

Level 3












Total

$
974,228


$
637


$
974,865


$
409,949


$
376,995


$
187,921

 


As of December 31, 2018


Cost

Net
Unrealized
Losses

Fair Value

Cash and
Cash
Equivalents

Short-term
Investments

Long-term
Investments
Cash

$
78,194


$


$
78,194


$
78,194


$


$

Level 1:












Money market funds

11,780




11,780


11,780





Subtotal

11,780




11,780


11,780





Level 2:












Commercial paper

1,313




1,313




1,313



Certificates of deposit

6,101




6,101




5,351


750

U.S. Treasury and agency bonds

220,136


(139
)

219,997




158,204


61,793

Corporate bonds

108,968


(110
)

108,858




74,850


34,008

Subtotal

336,518


(249
)

336,269




239,718


96,551

Level 3












Total

$
426,492


$
(249
)

$
426,243


$
89,974


$
239,718


$
96,551


Reconciliation of Beginning and Ending Balances of Acquisition-Related Accrued Contingent Consideration
The following table presents a reconciliation of the beginning and ending balances of acquisition-related accrued contingent consideration using significant unobservable inputs (Level 3) (in thousands):
 

Year Ended December 31,
 
2019
 
2018
Beginning balance
$
2,143

 
$
975

Obligations assumed

 
1,200

Change in fair value
107

 
624

Settlement
(1,750
)
 
(656
)
Ending balance
$
500

 
$
2,143


v3.19.3.a.u2
Allowance for Doubtful Accounts (Tables)
12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Summary of Changes in the Allowance for Doubtful Accounts
The following table summarizes the changes in the allowance for doubtful accounts included in accounts receivable in our consolidated balance sheets (in thousands):


Year Ended December 31,


2019

2018

2017
Beginning balance

$
1,839


$
1,455


$
670

Charge-offs

(548
)

(884
)

(337
)
Recoveries

(600
)

(693
)

(783
)
Provision

1,599


1,961


1,905

Ending balance

$
2,290


$
1,839


$
1,455


v3.19.3.a.u2
Property and Equipment (Tables)
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment [Abstract]  
Property and equipment, net Useful lives by asset category are as follows:
Computer equipment
  
3 years
Furniture and fixtures
  
3 to 7 years
Leasehold improvement
  
Shorter of useful life or lease term

Property and equipment, net consisted of the following (in thousands): 


Year Ended December 31,


2019

2018
Computer equipment & software

$
10,521


$
8,909

Furniture and fixtures

4,972


3,685

Leasehold improvements

10,438


5,398

Construction in process

3,771


834



$
29,702


$
18,826

Less: Accumulated depreciation and amortization

(9,406
)

(7,097
)
Total property and equipment, net

$
20,296


$
11,729


v3.19.3.a.u2
Goodwill and Intangible Assets (Tables)
12 Months Ended
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Change in Carrying Amount of Goodwill
The change in carrying amount of goodwill was as follows (in thousands):
 

Goodwill as of December 31, 2017
$
8,750

Goodwill recorded in connection with acquisition
854

Effects of foreign currency translation
(110
)
Goodwill as of December 31, 2018
$
9,494

Goodwill recorded in connection with acquisitions
27,437

Effects of foreign currency translation
(21
)
Goodwill as of December 31, 2019
$
36,910

 
 

Schedule of Intangible Assets
Intangible assets consisted of the following (in thousands, except years):
 


As of December 31, 2019


Weighted-Average
Useful
Life in Years

Gross Carrying
Value

Accumulated
Amortization

Net Carrying
Value
Customer Relationships

7.0

$
1,503


$
(402
)

$
1,101

Completed Technology

5.4

27,821


(6,839
)

20,982





$
29,324


$
(7,241
)

$
22,083


 
 
As of December 31, 2018
 
 
Weighted-Average
Useful
Life in Years
 
Gross Carrying
Value
 
Accumulated
Amortization
 
Net Carrying
Value
Customer Relationships
 
6.9
 
$
1,554

 
$
(221
)
 
$
1,333

Completed Technology
 
5.7
 
9,180

 
(3,022
)
 
6,158

 
 
 
 
$
10,734

 
$
(3,243
)
 
$
7,491


Schedule of Intangible Asset Amortization Expense
We classified intangible asset amortization expense in the accompanying consolidated statements of operations and comprehensive income (loss) as follows (in thousands): 
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
Cost of revenue

$
3,801


$
1,809


$
1,213

Sales and marketing

221


220


12

Total

$
4,022


$
2,029


$
1,225


Schedule of Finite-Lived Intangible Assets Estimated Remaining Amortization Expense
The following table presents our estimates of remaining amortization expense for each of the five succeeding fiscal years and thereafter for intangible assets at December 31, 2019 (in thousands):
 



2020

$
4,735

2021

5,501

2022

4,955

2023

2,603

2024

1,928

Thereafter

2,361

Total amortization expense

$
22,083

 
 
 

v3.19.3.a.u2
Convertible Senior Notes (Tables)
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Convertible Debt
The following table presents details of our convertible senior notes, which are further discussed below (original principal in thousands):

 
Month Issued
 
Maturity Date
 
Original Principal (including over-allotment)
 
Coupon Interest Rate
 
Effective Interest Rate
 
Conversion Rate
 
Initial Conversion Price
2023 Notes
May and June 2018
 
June 1, 2023
 
$
230,000

 
0.5
%
 
7.00
%
 
$
22.5572

 
$
44.33

2024 Notes
August 2019
 
August 1, 2024
 
$
400,000

 
0.5
%
 
4.96
%
 
$
5.2809

 
$
189.36

2026 Notes
August 2019
 
August 1, 2026
 
$
400,000

 
1.0
%
 
5.41
%
 
$
5.2809

 
$
189.36


The Notes consisted of the following (in thousands):
 
 
As of December 31, 2019
 
As of December 31, 2018
 
 
2023 Notes
 
2024 Notes
 
2026 Notes
 
2023 Notes
Liability:
 
 
 
 
 
 
 
 
Principal
 
$
84,759

 
$
400,000

 
$
400,000

 
$
230,000

Less: debt discount and issuance costs, net of amortization
 
(16,605
)
 
(72,669
)
 
(97,010
)
 
(56,353
)
Net carrying amount
 
$
68,154

 
$
327,331

 
$
302,990

 
$
173,647

 
 
 
 
 
 
 
 
 
Equity, net of issuance costs
 
$
46,474

 
69,749

 
93,380

 
$
57,251


Schedule of Convertible Senior Notes
The following table sets forth interest expense recognized related to the Notes (in thousands):
 
 
Year Ended December 31,
 
 
2019
2018
Contractual interest expense
 
$
3,186

 
$
712

Amortization of debt issuance costs and discount
 
18,625

 
6,652

Total
 
$
21,811

 
$
7,364


Schedule of Contractual Obligations and Contractual Interest
The following table sets forth future contractual obligations of contractual interest and principal related to the Notes (in thousands):
 
 
Payments Due by Period
 
 
Total
 
Less Than 1 Year
 
1 to 3 Years
 
3 to 5 Years
 
More Than 5 Years
Notes and related interest
 
$
924,059

 
$
6,240

 
$
12,848

 
$
496,971

 
$
408,000


Our minimum purchase obligations as of December 31, 2019 were as follows (in thousands):
2020
$
16,270

2021
9,061

2022
7,544

2023

2024

Thereafter

Total minimum payments
$
32,875


v3.19.3.a.u2
Accrued Payroll and Payroll-Related Liabilities (Tables)
12 Months Ended
Dec. 31, 2019
Payables and Accruals [Abstract]  
Schedule of Accounts Payable and Accrued Liabilities
Accrued payroll and payroll-related liabilities included accrued commissions and bonuses as follows (in thousands):


As of December 31,


2019

2018
Accrued commissions

$
23,037


$
8,589

Accrued bonuses

$
16,730


$
7,300


v3.19.3.a.u2
Equity Awards (Tables)
12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]  
Schedule of Stock Option Activity
Stock option activity, excluding activity related to the ESPP, during the year ended December 31, 2019 consisted of the following (in thousands, except weighted-average information):
 


Options
Outstanding

Weighted-
Average
Exercise
Price

Aggregate Intrinsic Value

Weighted-Average Remaining Contractual Term (Years)
Options outstanding at December 31, 2018

4,049


$
12.48


$
190,277


7.2
Granted

392


80.88





Exercised

(1,452
)

10.90


$
115,409



Cancelled/forfeited

(277
)

18.68





Options outstanding at December 31, 2019

2,712


$
22.58


$
211,488


6.6
Exercisable

1,629


$
9.15


$
148,119


5.6
Vested and expected to vest at December 31, 2019

2,712


$
22.58


$
211,488


6.6

Schedule of Weighted-average Assumption Used for Stock Options
The following table presents the weighted-average assumptions used for stock options granted under our 2017 Plan and for shares of our Class A common stock issued under our ESPP for each of the years indicated:
 


Stock Options

Employee Stock Purchase Plan


2019

2018

2017

2019

2018

2017
Expected term (in years)

5.8


6.1


6.1


0.5


0.5


0.4

Estimated volatility

38
%

41
%

42
%

56
%

52
%

29
%
Risk-free interest rate

2
%

2
%

2
%

2
%

2
%

1
%
Estimated dividend yield












Weighted average fair value

$
32.20


$
12.09


$
7.53


$
30.02


$
12.13


$
4.02


Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions
The following table presents the weighted-average assumptions used for stock options granted under our 2017 Plan and for shares of our Class A common stock issued under our ESPP for each of the years indicated:
 


Stock Options

Employee Stock Purchase Plan


2019

2018

2017

2019

2018

2017
Expected term (in years)

5.8


6.1


6.1


0.5


0.5


0.4

Estimated volatility

38
%

41
%

42
%

56
%

52
%

29
%
Risk-free interest rate

2
%

2
%

2
%

2
%

2
%

1
%
Estimated dividend yield












Weighted average fair value

$
32.20


$
12.09


$
7.53


$
30.02


$
12.13


$
4.02


Schedule of RSU Activity RSU activity during the year ended December 31, 2019 consisted of the following (in thousands, except weighted-average information):


Awards
Outstanding

Weighted-
Average
Grant Date
Fair Value

Aggregate Intrinsic Value
RSUs outstanding at December 31, 2018

1,215


$
31.93


$
72,266

Granted

908


90.00



Vested

(340
)

30.79


$
30,214

Cancelled/forfeited

(207
)

40.97



RSUs outstanding at December 31, 2019

1,576


$
64.46


$
157,752

RSUs expected to vest at December 31, 2019
 
1,576

 
$
64.46

 
$
157,752


Schedule of Stock-based Compensation Expense
We classified stock-based compensation expense in the accompanying consolidated statements of operations and comprehensive income (loss) as follows (in thousands):
 
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
Cost of revenue

$
1,634


$
797


$
485

Research and development

6,954


3,699


1,635

Sales and marketing

12,659


6,153


2,302

General and administrative

11,878


5,998


4,519

Total

$
33,125


$
16,647


$
8,941


v3.19.3.a.u2
Leases (Tables)
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Lease-Related Assets and Liabilities
The table below presents lease-related assets and liabilities recorded on the consolidated balance sheet (in thousands):
 
Classification
 
As of December 31, 2019
Assets



Operating lease right-of-use assets
Operating lease right-of-use assets

$
33,600





Liabilities



Operating lease liabilities (current)
Accrued expenses and other current liabilities

$
6,627

Operating lease liabilities (noncurrent)
Operating lease liabilities

29,293

Total lease liabilities


$
35,920


Lease Costs and Supplemental Information
The following lease costs were included in our consolidated statements of operations and comprehensive income (loss) (in thousands):
 
Year Ended December 31, 2019
 
Operating lease cost
$
7,066

 
Short-term lease cost
1,604

 
Variable lease cost
1,767

 
Total lease cost
$
10,437

 
Supplemental Information
The table below presents supplemental information related to operating leases during the year ended December 31, 2019 (in thousands, except weighted-average information):
Cash paid for amounts included in the measurement of operating lease liabilities
$
6,040

Weighted-average remaining lease term
5.9

Weighted-average discount rate
6.18
%

Undiscounted Cash Flows for Operating Lease Liabilities
The table below reconciles the undiscounted cash flows of the operating leases for each of the first five years, and total of the remaining years, to the operating lease liabilities recorded on the consolidated balance sheet as of December 31, 2019 (in thousands):
2020
$
8,621

2021
7,768

2022
7,106

2023
5,562

2024
5,331

2025
4,434

Thereafter
4,641

Total minimum lease payments
$
43,463

Less imputed interest
(7,543
)
Present value of future minimum lease payments
$
35,920

Less current obligations under leases
(6,627
)
Long-term lease obligations
$
29,293


Minimum Lease Payments Prior to Adoption of ASC 842
Minimum lease payments under operating leases with non-cancelable terms in excess of one year as of December 31, 2018, were as follows (in thousands):
2019
$
6,389

2020
6,781

2021
6,326

2022
6,276

2023
5,163

Thereafter
9,427

Total minimum lease payments
$
40,362


v3.19.3.a.u2
Commitments and Contingencies (Tables)
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Undiscounted Future Minimum Rental Payment Under Non-Cancelable Operating Leases
The following table sets forth future contractual obligations of contractual interest and principal related to the Notes (in thousands):
 
 
Payments Due by Period
 
 
Total
 
Less Than 1 Year
 
1 to 3 Years
 
3 to 5 Years
 
More Than 5 Years
Notes and related interest
 
$
924,059

 
$
6,240

 
$
12,848

 
$
496,971

 
$
408,000


Our minimum purchase obligations as of December 31, 2019 were as follows (in thousands):
2020
$
16,270

2021
9,061

2022
7,544

2023

2024

Thereafter

Total minimum payments
$
32,875


v3.19.3.a.u2
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Components of Income (Loss) Before Provision for (Benefit of) Income Taxes
The components of income (loss) before benefit of income taxes were as follows (in thousands):
 


Year Ended December 31,


2019

2018

2017
Domestic

$
9,259


$
27,849


$
24,460

Foreign

(3,195
)

(2,415
)

(42,864
)
Total

$
6,064


$
25,434


$
(18,404
)

Components of Provision for (Benefit of) Income Taxes
The components of the benefit of income taxes were as follows (in thousands):
 

 
Year Ended December 31,

 
2019

2018

2017
Current:
 





Federal
 
$
(375
)

$
(14
)

$
38

State
 
158


314


70

Foreign
 
1,176


587


297

Total current income tax expense
 
$
959


$
887


$
405

Deferred:
 





Federal
 
$
(18,684
)

$
(2,321
)

$
(1,564
)
State
 
(3,406
)

(869
)


Foreign
 
52


(283
)

254

Total deferred income tax benefit:
 
$
(22,038
)

$
(3,473
)

$
(1,310
)
Total
 
$
(21,079
)

$
(2,586
)

$
(905
)

Reconciliation of Provision for (Benefit of) Income Taxes at Statutory Rate and Provision for (Benefit of) Income Taxes
The following table reconciles our benefit of income taxes at the statutory rate to that at the effective tax rate, using a U.S. federal statutory tax rate of 21% for each of 2019 and 2018, and 34% for 2017 (in thousands):


Year Ended December 31,


2019

2018

2017
Income tax at federal statutory rate

$
1,273


$
5,341


$
(6,257
)
Increase/(decrease) in tax resulting from:






State income tax expense, net of federal

(2,567
)

(438
)

1,428

Foreign rate differential

789


853


15,375

Stock-based compensation

(20,913
)

(7,916
)

(1,086
)
Change in valuation allowance

18,129


510


(20,500
)
Tax impact due to tax law change





2,627

Meals and entertainment
 
658

 
310

 
229

Change in uncertain tax position reserves





7,854

Research credits

(3,177
)

(1,563
)

(2,249
)
Tax basis step-up due to internal reorganization

(15,321
)




Other

50


317


1,674

Total benefit of income taxes

$
(21,079
)

$
(2,586
)

$
(905
)

Significant Components of Deferred Income Tax Assets (Liabilities)
The following table shows the significant components of deferred income tax assets (liabilities) (in thousands):
 


As of December 31,


2019

2018
Deferred tax assets:
 
 
 
 
    Deferred revenue

$
739


$
577

    Net operating losses

10,997


3,424

    Accruals and reserves

5,679


3,039

    Research & other credits
 
11,027

 
5,185

    Intangibles
 
12,291

 

    Operating lease liabilities
 
7,586

 

    Effect of Section 163(j) on interest expense
 
4,046

 

    Stock-based compensation

6,623


3,361

    State taxes
 
269

 
440

    Other
 
84

 
695

Total deferred tax assets
 
59,341

 
16,721

Less valuation allowance
 
(19,683
)
 
(1,138
)
Net deferred tax assets
 
39,658

 
15,583

 
 
 
 
 
Deferred tax liabilities:
 
 
 
 
    Property and equipment
 
(48
)
 
(953
)
    Operating lease right-of-use assets
 
(7,002
)
 

    Deferred commissions
 
(8,924
)
 
(4,595
)
    Convertible senior notes

(20,459
)

(8,499
)
    Effects of ASC 606 adoption
 
(8,819
)
 
(13,113
)
Total deferred tax liabilities
 
(45,252
)
 
(27,160
)
Net deferred tax liabilities

$
(5,594
)

$
(11,577
)

Summary of Changes in the Valuation Allowance
The following table shows the changes in our valuation allowance (in thousands):
 


Year Ended December 31,


2019

2018

2017
Beginning balance

$
1,138


$
7,304


$
27,804

Decrease in valuation allowance due to Yhat acquisition





(998
)
Decrease in valuation allowance due to adoption of ASC 606
 

 
$
(6,676
)


Increase in valuation allowance due to internal reorganization
 
15,321

 

 

Other increase (decrease) in valuation allowance

3,224


510


(19,502
)
Ending balance

$
19,683


$
1,138


$
7,304



Schedule of Activity in Gross Unrecognized Tax Benefits
The following table shows the activity in gross unrecognized tax benefits (in thousands):


Year Ended December 31,


2019

2018

2017
Balance at beginning of year

$
6,234


$
5,794


$

Additions based on tax position related to the current year

1,322


391


5,624

Additions for tax positions of prior years



49


170

Balance at end of year

$
7,556


$
6,234


$
5,794


v3.19.3.a.u2
Basic and Diluted Net Loss Per Share (Tables)
12 Months Ended
Dec. 31, 2019
Earnings Per Share [Abstract]  
Schedule of Computation of Net Income (Loss) per Share
The following table presents the computation of net income (loss) per share (in thousands except per share data):
 
 
Year Ended December 31,
 
 
2019

2018

2017
Numerator:
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
 
$
27,143


$
28,020


$
(19,482
)
Denominator:
 
 
 
 
 
 
Weighted-average shares used to compute net income (loss) per
   share attributable to common stockholders, basic
 
63,424


60,829


53,006

Effect of dilutive securities:
 
 
 
 
 
 
Convertible senior notes
 
1,975

 
409

 

Employee stock awards
 
3,259

 
3,506

 

Contingently issuable shares
 
3

 

 

Weighted-average shares used to compute net income (loss) per
   share attributable to common stockholders, diluted
 
68,661

 
64,744

 
53,006

Net income (loss) per share attributable to common stockholders,
   basic
 
$
0.43

 
$
0.46

 
$
(0.37
)
Net income (loss) per share attributable to common stockholders,
   diluted
 
$
0.40

 
$
0.43

 
$
(0.37
)

Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Net Loss Per Share
The following weighted-average equivalent shares of common stock, excluding the impact of the treasury stock method, were excluded from the diluted net income (loss) per share calculation because their inclusion would have been anti-dilutive (in thousands):


Year Ended December 31,


2019

2018

2017
Stock awards

209


510


6,312

Convertible senior notes
 
1,644

 

 

Conversion of convertible preferred stock





3,290

Contingently issuable shares





7

Total shares excluded from net income (loss) per share

1,853


510


9,609


v3.19.3.a.u2
Segment and Geographic Information Segment and Geographic Information (Tables)
12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Schedule of Long-lived Assets Classified By Geographic Location
Long-lived assets classified by geographic location, and with countries over 10% of this total, were as follows (in thousands):
 
 
As of December 31,
Long-lived assets:
 
2019
 
2018
United States
 
$
39,641

 
$
10,610

United Kingdom
 
7,263

 
650

Other countries
 
6,992

 
469

Total
 
$
53,896

 
$
11,729


v3.19.3.a.u2
Selected Quarterly Financial Data (Unaudited) (Tables)
12 Months Ended
Dec. 31, 2019
Quarterly Financial Information Disclosure [Abstract]  
Schedule of Quarterly Financial Data
The following table sets forth unaudited quarterly financial information for the years ended December 31, 2019 and 2018. We have prepared the unaudited quarterly consolidated statements of operations data on a basis consistent with the audited annual consolidated financial statements. In the opinion of management, the financial information in this table reflects all adjustments, consisting of normal and recurring adjustments, necessary for the fair statement of this data (in thousands except per share data):
 


2019


Quarter Ended


March 31

June 30

September 30

December 31
Revenue

$
76,020


$
82,043


$
103,397


$
156,450

Gross margin

68,020


72,748


93,752


144,239

Income (loss) from operations

(4,402
)

(8,288
)

11,936


38,735

Net income (loss)

5,914


(3,219
)

(6,240
)

30,688

Diluted income (loss) per share

0.09


(0.05
)

(0.10
)

$
0.44

 


2018


Quarter Ended


March 31

June 30

September 30

December 31
Revenue

$
50,329


$
51,502


$
62,589


$
89,150

Gross margin

45,325


46,233


56,779


82,433

Income (loss) from operations

2,683


(3,425
)

9,394


21,118

Net income (loss)

4,897


(4,239
)

10,821


16,541

Diluted income (loss) per share

0.08


(0.07
)

0.17


0.25


v3.19.3.a.u2
Significant Accounting Policies - Additional Information (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
reporting_unit
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Jan. 01, 2019
USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Amounts receivable from a credit card processor $ 600 $ 400    
Restricted cash $ 1,500 1,000    
Capitalized contract costs, amortization period 4 years      
Recognized royalty expense $ 12,200 7,200 $ 9,400  
Number of reporting units | reporting_unit 1      
Revenue, performance obligation, description of timing one to three years and are billed annually in advance with net payment terms of 60 days or less.      
Advertising expenses $ 17,800 9,100 5,500  
Transaction gains (losses) 1,000 $ (1,500) $ (300)  
Operating lease right-of-use assets 33,600      
Present value of future minimum lease payments $ 35,920      
Minimum        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Intangible assets estimated useful lives 2 years      
Maximum        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Intangible assets estimated useful lives 8 years      
Accounts Receivable | Customer Concentration Risk        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Concentration risk, percent 10.60% 10.10%    
Accounting Standards Update 2018-11        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Operating lease right-of-use assets       $ 24,800
Present value of future minimum lease payments       $ 24,800
Software and Software Development Costs        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Property and equipment, useful life 3 years      
v3.19.3.a.u2
Significant Accounting Policies - Schedule of Useful Lives by Asset Category (Details)
12 Months Ended
Dec. 31, 2019
Computer equipment  
Property, Plant and Equipment [Line Items]  
Property and equipment, useful life 3 years
Furniture and fixtures | Minimum  
Property, Plant and Equipment [Line Items]  
Property and equipment, useful life 3 years
Furniture and fixtures | Maximum  
Property, Plant and Equipment [Line Items]  
Property and equipment, useful life 7 years
v3.19.3.a.u2
Revenue - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Disaggregation of Revenue [Line Items]                      
Revenue $ 156,450 $ 103,397 $ 82,043 $ 76,020 $ 89,150 $ 62,589 $ 51,502 $ 50,329 $ 417,910 $ 253,570 $ 131,607
Cost of revenue                 39,151 22,800 21,803
United States                      
Disaggregation of Revenue [Line Items]                      
Revenue                 296,108 178,774 101,932
International                      
Disaggregation of Revenue [Line Items]                      
Revenue                 121,802 74,796 $ 29,675
Subscription-based software license                      
Disaggregation of Revenue [Line Items]                      
Revenue                 229,194 124,669  
Cost of revenue                 3,923 1,505  
PCS and services                      
Disaggregation of Revenue [Line Items]                      
Revenue                 188,716 128,901  
Cost of revenue                 $ 35,228 $ 21,295  
Geographic Concentration Risk | Revenue from Contract with Customer | United Kingdom                      
Disaggregation of Revenue [Line Items]                      
Concentration risk, percent                 10.70% 10.20%  
Professional Services | Revenue from Contract with Customer                      
Disaggregation of Revenue [Line Items]                      
Concentration risk, percent                 5.00%    
v3.19.3.a.u2
Revenue - Contract Assets and Contract Liabilities (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Contract with Customer, Asset, Net, Current $ 17.5 $ 10.4
Revenue recognized 84.0 56.3
Prepaid Expenses and Other Current Assets    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Contract with Customer, Asset, Net, Current 18.5 11.2
Other Assets    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Contract asset $ 39.3 $ 16.5
Minimum    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Transferred to receivables period 12 years  
Maximum    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Transferred to receivables period 24 months  
v3.19.3.a.u2
Revenue - Assets Recognized from the Costs to Obtain Our Contracts with Customers (Details) - USD ($)
12 Months Ended
Jan. 01, 2018
Dec. 31, 2019
Dec. 31, 2018
Change in Contract with Customer, Asset [Roll Forward]      
Beginning Balance $ 11,213,000 $ 22,391,000 $ 11,213,000
Adoption of ASC 606 $ (1,154,000)    
Additional deferred commissions   55,024,000 30,828,000
Amortization of deferred commissions   (34,380,000) (18,496,000)
Ending Balance   43,035,000 22,391,000
Deferred contract costs   17,500,000 10,400,000
Impairments of assets   $ 0 $ 0
v3.19.3.a.u2
Revenue - Remaining Performance Obligation (Details) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]    
Remaining performance obligation, amount $ 407.0 $ 223.1
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01    
Revenue from Contract with Customer [Abstract]    
Remaining performance obligation, amount $ 340.1 $ 196.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]    
Remaining performance obligation, period 24 months  
v3.19.3.a.u2
Business Combinations (Detail)
$ in Thousands
1 Months Ended 12 Months Ended
Oct. 03, 2019
USD ($)
Apr. 04, 2019
USD ($)
Feb. 28, 2018
USD ($)
May 31, 2017
USD ($)
Jan. 31, 2017
USD ($)
Dec. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Business Acquisition [Line Items]                
Goodwill           $ 36,910 $ 9,494 $ 8,750
Completed Technology                
Business Acquisition [Line Items]                
Intangible assets estimated useful lives           5 years 4 months 24 days 5 years 8 months 12 days  
Completed Technology | Level 3                
Business Acquisition [Line Items]                
Finite lived intangible assets acquired               $ 9,200
Weighted average amortization period               5 years 8 months 12 days
Feature Labs Inc.                
Business Acquisition [Line Items]                
Business combination acquired percentage 100.00%              
Total consideration $ 25,200              
Share-based compensation agreement, value, shares issued $ 12,500              
Business combination, employee retention compensation period 48 months              
Business combination, employee retention compensation and milestones achievement period 36 months              
Goodwill $ 18,000              
Purchase price allocation, assets acquired and liabilities assumed, net 700              
Feature Labs Inc. | Completed Technology | Level 3                
Business Acquisition [Line Items]                
Finite lived intangible assets acquired $ 7,900              
Intangible assets estimated useful lives 7 years              
ClearStory Data Inc.                
Business Acquisition [Line Items]                
Business combination acquired percentage   100.00%            
Total consideration   $ 19,600            
Business combination, employee retention compensation and milestones achievement period   24 months            
Goodwill   $ 9,500            
Purchase price allocation, assets acquired and liabilities assumed, net   600            
Cash consideration held back for customary indemnification matters amount   $ 3,000            
Cash consideration held back for customary indemnification matters period   18 months            
Business combination, employee retention compensation   $ 6,000            
ClearStory Data Inc. | Completed Technology | Level 3                
Business Acquisition [Line Items]                
Finite lived intangible assets acquired   $ 10,700            
Intangible assets estimated useful lives   4 years            
Alteryx ANZ Pty Limited                
Business Acquisition [Line Items]                
Business combination acquired percentage     100.00%          
Total consideration     $ 5,700          
Goodwill     900          
Purchase price allocation, assets acquired and liabilities assumed, net     3,200          
Business combination, purchase price in cash     3,300          
Contingent consideration paid in cash     1,200          
Settlement of preexisting relationships     1,200          
Contingent earn out consideration     $ 1,500          
Contingent earn-out consideration payment period     2 years          
Alteryx ANZ Pty Limited | Customer-Related Intangible Assets                
Business Acquisition [Line Items]                
Completed technology intangible assets     $ 1,600          
Alteryx ANZ Pty Limited | Customer-Related Intangible Assets | Level 3                
Business Acquisition [Line Items]                
Finite lived intangible assets acquired     $ 1,600          
Weighted average amortization period     7 years          
Semanto s.r.o                
Business Acquisition [Line Items]                
Business combination acquired percentage         100.00%      
Total consideration         $ 5,600      
Cash consideration held back for customary indemnification matters period         24 months      
Contingent consideration paid in cash         $ 1,200      
Contingent earn-out consideration payment period         2 years      
Contingent earn-out consideration         $ 2,300      
Yhat, Inc.                
Business Acquisition [Line Items]                
Business combination acquired percentage       100.00%        
Total consideration       $ 10,800        
Semanta, s.r.o and Yhat, Inc.                
Business Acquisition [Line Items]                
Total consideration               $ 16,400
Goodwill               8,700
Purchase price allocation, assets acquired and liabilities assumed, net               $ 1,500
Measurement Input, Discount Rate | Feature Labs Inc. | Completed Technology | Level 3                
Business Acquisition [Line Items]                
Business combination, measurement input, discount rate 0.400              
Measurement Input, Discount Rate | ClearStory Data Inc. | Completed Technology | Level 3                
Business Acquisition [Line Items]                
Business combination, measurement input, discount rate   0.20            
Market Participant Income Tax Rate | Semanta, s.r.o and Yhat, Inc. | Completed Technology | Level 3                
Business Acquisition [Line Items]                
Discount rate               0.40
Minimum                
Business Acquisition [Line Items]                
Intangible assets estimated useful lives           2 years    
Minimum | Measurement Input, Discount Rate | Completed Technology | Level 3                
Business Acquisition [Line Items]                
Discount rate               0.35
Maximum                
Business Acquisition [Line Items]                
Intangible assets estimated useful lives           8 years    
Maximum | Measurement Input, Discount Rate | Completed Technology | Level 3                
Business Acquisition [Line Items]                
Discount rate               0.45
v3.19.3.a.u2
Fair Value Measurements - Summary of Cash and Cash Equivalents and Investments' Costs, Gross Unrealized Losses, and Fair Value by Major Security Type Recorded as Cash and Cash Equivalents or Short-Term or Long-Term Investments (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents $ 409,949 $ 89,974
Gross unrealized losses (100) (200)
Short-term investments 376,995 239,718
Long-term investments 187,921 96,551
Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 409,949 89,974
Gross unrealized gains (losses) 637  
Gross unrealized losses   (249)
Cash and cash equivalents and investment, cost 974,228 426,492
Cash and cash equivalents and investment, fair value 974,865 426,243
Short-term investments 376,995 239,718
Long-term investments 187,921 96,551
Fair Value, Measurements, Recurring | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 223,580 11,780
Cash and cash equivalents, fair value 223,580 11,780
Fair Value, Measurements, Recurring | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 133,330  
Investments, cost 697,609 336,518
Gross unrealized gains (losses) 637  
Gross unrealized losses   (249)
Investments, fair value 698,246 336,269
Short-term investments 376,995 239,718
Long-term investments 187,921 96,551
Fair Value, Measurements, Recurring | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments, cost 0 0
Gross unrealized gains (losses) 0  
Gross unrealized losses   0
Investments, fair value 0 0
Short-term investments 0 0
Long-term investments 0 0
Cash | Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 53,039 78,194
Cash and cash equivalents, fair value 53,039 78,194
Money market funds | Fair Value, Measurements, Recurring | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 223,580 11,780
Cash and cash equivalents, fair value 223,580 11,780
Commercial paper | Fair Value, Measurements, Recurring | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 98,325 0
Investments, cost 217,140 1,313
Gross unrealized gains (losses) (6)  
Gross unrealized losses   0
Investments, fair value 217,134 1,313
Short-term investments 118,809 1,313
Long-term investments 0 0
Certificates of deposit | Fair Value, Measurements, Recurring | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments, cost 1,000 6,101
Gross unrealized gains (losses) 0  
Gross unrealized losses   0
Investments, fair value 1,000 6,101
Short-term investments 0 5,351
Long-term investments 1,000 750
U.S. Treasury and agency bonds | Fair Value, Measurements, Recurring | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 35,005  
Investments, cost 294,953 220,136
Gross unrealized gains (losses) 199  
Gross unrealized losses   (139)
Investments, fair value 295,152 219,997
Short-term investments 161,767 158,204
Long-term investments 98,380 61,793
Corporate bonds | Fair Value, Measurements, Recurring | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments, cost 184,516 108,968
Gross unrealized gains (losses) 444  
Gross unrealized losses   (110)
Investments, fair value 184,960 108,858
Short-term investments 96,419 74,850
Long-term investments $ 88,541 $ 34,008
v3.19.3.a.u2
Fair Value Measurements - Additional Information (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Gross unrealized losses $ 100 $ 200    
Cash and cash equivalents, restricted cash and investments 411,424 90,961 $ 119,916 $ 31,506
Interest income from marketable securities 9,200 5,400 800  
Change in fair value $ 107 $ 624 $ 200  
Business acquisition, number of shares issued to Semanta (in shares) 11,250 18,869    
Number of shares held back (in shares) 10,205      
Payment for to former shareholders upon achievement of certain milestones $ 1,000      
Convertible debt, fair value $ 956,800 $ 343,200    
Minimum        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Long-term investments maturity period 1 year      
Maximum        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Long-term investments maturity period 2 years      
Domestic Cash And Investments        
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]        
Cash and cash equivalents, restricted cash and investments $ 963,400 $ 417,900    
v3.19.3.a.u2
Fair Value Measurements - Reconciliation of Beginning and Ending Balances of Acquisition-Related Accrued Contingent Consideration (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]      
Beginning balance $ 2,143 $ 975  
Obligations assumed 0 1,200  
Change in fair value 107 624 $ 200
Settlement (1,750) (656)  
Ending balance $ 500 $ 2,143 $ 975
v3.19.3.a.u2
Allowance for Doubtful Accounts (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Accounts Receivable, Allowance for Credit Loss [Roll Forward]      
Beginning balance $ 1,839 $ 1,455 $ 670
Charge-offs (548) (884) (337)
Recoveries (600) (693) (783)
Provision 1,599 1,961 1,905
Ending balance $ 2,290 $ 1,839 $ 1,455
v3.19.3.a.u2
Property and Equipment - Schedule of Property and Equipment, Net (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 29,702 $ 18,826
Less: Accumulated depreciation and amortization (9,406) (7,097)
Total property and equipment, net 20,296 11,729
Computer equipment & software    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 10,521 8,909
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 4,972 3,685
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 10,438 5,398
Construction in process    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 3,771 $ 834
v3.19.3.a.u2
Property and Equipment - Additional Information (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Property, Plant and Equipment [Abstract]      
Depreciation and amortization expense $ 4.3 $ 3.2 $ 2.3
v3.19.3.a.u2
Goodwill and Intangible Assets - Schedule of Change in Carrying Amount of Goodwill (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Goodwill [Roll Forward]    
Goodwill at beginning of year $ 9,494 $ 8,750
Goodwill recorded in connection with acquisitions 27,437 854
Effects of foreign currency translation (21) (110)
Goodwill at end of year $ 36,910 $ 9,494
v3.19.3.a.u2
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Value $ 29,324 $ 10,734
Accumulated Amortization (7,241) (3,243)
Net Carrying Value $ 22,083 $ 7,491
Customer Relationships    
Finite-Lived Intangible Assets [Line Items]    
Weighted-Average Useful Life in Years 7 years 6 years 10 months 24 days
Gross Carrying Value $ 1,503 $ 1,554
Accumulated Amortization (402) (221)
Net Carrying Value $ 1,101 $ 1,333
Completed Technology    
Finite-Lived Intangible Assets [Line Items]    
Weighted-Average Useful Life in Years 5 years 4 months 24 days 5 years 8 months 12 days
Gross Carrying Value $ 27,821 $ 9,180
Accumulated Amortization (6,839) (3,022)
Net Carrying Value $ 20,982 $ 6,158
v3.19.3.a.u2
Goodwill and Intangible Assets - Schedule of Intangible Asset Amortization Expense (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]      
Amortization of intangible assets $ 4,022 $ 2,029 $ 1,225
Cost of revenue      
Finite-Lived Intangible Assets [Line Items]      
Amortization of intangible assets 3,801 1,809 1,213
Sales and marketing      
Finite-Lived Intangible Assets [Line Items]      
Amortization of intangible assets $ 221 $ 220 $ 12
v3.19.3.a.u2
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets Estimated Remaining Amortization Expense (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]    
2020 $ 4,735  
2021 5,501  
2022 4,955  
2023 2,603  
2024 1,928  
Thereafter 2,361  
Net Carrying Value $ 22,083 $ 7,491
v3.19.3.a.u2
Convertible Senior Notes - Schedule Of Convertible Senior Notes (Details) - Convertible Debt
1 Months Ended 3 Months Ended
Aug. 31, 2019
USD ($)
$ / shares
Jun. 30, 2018
USD ($)
$ / shares
Dec. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Convertible Senior Notes due 2023, 0.5%        
Debt Instrument [Line Items]        
Original Principal (including over-allotment)   $ 230,000,000.0 $ 84,759,000 $ 230,000,000
Coupon Interest Rate   0.50%    
Effective Interest Rate   7.00%    
Conversion Rate   0.0225572    
Initial Conversion Price | $ / shares   $ 44.33    
Principal   $ 230,000,000.0 84,759,000 230,000,000
Less: debt discount and issuance costs, net of amortization     (16,605,000) (56,353,000)
Net carrying amount     68,154,000 173,647,000
Equity, net of issuance costs     46,474,000 $ 57,251,000
0.50% Convertible Seniors Notes Due 2024        
Debt Instrument [Line Items]        
Original Principal (including over-allotment) $ 400,000,000.0   400,000,000  
Coupon Interest Rate 0.50%      
Effective Interest Rate 4.96%      
Conversion Rate 0.0052809      
Initial Conversion Price | $ / shares $ 189.36      
Principal $ 400,000,000.0   400,000,000  
Less: debt discount and issuance costs, net of amortization     (72,669,000)  
Net carrying amount     327,331,000  
Equity, net of issuance costs     69,749,000  
Convertible Notes Due 2026, 1.0%        
Debt Instrument [Line Items]        
Original Principal (including over-allotment) $ 400,000,000   400,000,000  
Coupon Interest Rate 1.00%      
Effective Interest Rate 5.41%      
Conversion Rate 0.0052809      
Initial Conversion Price | $ / shares $ 189.36      
Principal $ 400,000,000   400,000,000  
Less: debt discount and issuance costs, net of amortization     (97,010,000)  
Net carrying amount     302,990,000  
Equity, net of issuance costs     $ 93,380,000  
Debt Instrument, Conversion, Option One | Convertible Senior Notes due 2023, 0.5%        
Debt Instrument [Line Items]        
debt extinguishment with interest $ 145,400,000      
v3.19.3.a.u2
Convertible Senior Notes - Additional Information (Details)
1 Months Ended 3 Months Ended 12 Months Ended
Jan. 01, 2020
day
Aug. 31, 2019
USD ($)
$ / option
shares
Jun. 30, 2018
USD ($)
day
$ / option
Dec. 31, 2019
USD ($)
day
shares
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Debt Instrument [Line Items]            
Capped calls, cost   $ 87,400,000 $ 19,100,000      
Capped calls, deferred tax asset   20,900,000     $ 4,600,000  
Loss on induced conversion and debt extinguishment       $ 20,507,000 0 $ 0
Loss on induced conversion and debt extinguishment       (20,507,000) 0 $ 0
Convertible Debt | Convertible Senior Notes due 2023, 0.5%            
Debt Instrument [Line Items]            
Principal     $ 230,000,000.0 84,759,000 $ 230,000,000  
Coupon Interest Rate     0.50%      
Senior notes in excess of principal       106,600,000    
Redemption price, percentage     100.00%      
Convertible Debt | Convertible Senior Notes due 2023, Over-Allotment Option, 0.5%            
Debt Instrument [Line Items]            
Principal     $ 30,000,000.0      
Convertible Debt | 0.50% Convertible Seniors Notes Due 2024            
Debt Instrument [Line Items]            
Principal   $ 400,000,000.0   400,000,000    
Coupon Interest Rate   0.50%        
Convertible Debt | Convertible Notes Due 2026, 1.0%            
Debt Instrument [Line Items]            
Principal   $ 400,000,000   $ 400,000,000    
Coupon Interest Rate   1.00%        
Convertible Debt | Convertible Senior Notes due 2024, Over-Allotment Option, 0.5%            
Debt Instrument [Line Items]            
Principal   $ 50,000,000.0        
Convertible Debt | Convertible Senior Notes due 2026, Over-Allotment Option, 1.0%            
Debt Instrument [Line Items]            
Principal   50,000,000.0        
Debt Instrument, Conversion, Option One | Convertible Debt | Convertible Senior Notes due 2023, 0.5%            
Debt Instrument [Line Items]            
Threshold trading days | day     20 20    
Threshold consecutive trading days | day     30 30    
Threshold percentage of stock price trigger     130.00% 130.00%    
Convertible debt, converted instrument, original amount   145,200,000        
debt extinguishment with interest   $ 145,400,000        
Debt Instrument, Conversion, Option Two | Convertible Debt | Convertible Senior Notes due 2023, 0.5%            
Debt Instrument [Line Items]            
Threshold trading days | day     5      
Threshold consecutive trading days | day     5      
Threshold percentage of stock price trigger     98.00%      
Price Risk Derivative            
Debt Instrument [Line Items]            
Capped calls, initial strike price (in dollars per share) | $ / option   189.36 44.33      
Capped calls, cap price (in dollars per share) | $ / option   315.60 62.22      
Class A Common Stock            
Debt Instrument [Line Items]            
Capped calls, retirement of common stock (in shares) | shares       285,466    
Class A Common Stock | Debt Instrument, Conversion, Option Two            
Debt Instrument [Line Items]            
Convertible debt, converted instrument, shares issued | shares   2,200,000        
Convertible Debt | Debt Instrument, Conversion, Option Two | Convertible Senior Notes due 2023, 0.5%            
Debt Instrument [Line Items]            
Loss on induced conversion and debt extinguishment   $ 20,500,000        
Convertible debt, consideration given in excess of original conversion terms   8,200,000        
Loss on induced conversion and debt extinguishment   $ 12,300,000        
Forecast | Debt Instrument, Conversion, Option One | Convertible Debt | 0.05% and 1.0% Convertible Senior Notes Due 2024 and 2026            
Debt Instrument [Line Items]            
Threshold trading days | day 20          
Threshold consecutive trading days | day 30          
Threshold percentage of stock price trigger 130.00%          
Forecast | Debt Instrument, Conversion, Option Two | Convertible Debt | 0.05% and 1.0% Convertible Senior Notes Due 2024 and 2026            
Debt Instrument [Line Items]            
Threshold trading days | day 5          
Threshold consecutive trading days | day 5          
Threshold percentage of stock price trigger 98.00%          
v3.19.3.a.u2
Convertible Senior Notes - Schedule Of Interest Expense Related To Convertible Senior Notes (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Debt Instrument [Line Items]      
Amortization of debt discount and issuance costs $ 18,625 $ 6,652 $ 0
Convertible Debt | Convertible senior notes      
Debt Instrument [Line Items]      
Contractual interest expense 3,186 712  
Amortization of debt discount and issuance costs 18,625 6,652  
Total $ 21,811 $ 7,364  
v3.19.3.a.u2
Convertible Senior Notes - Schedule Of Contractual Obligations and Contractual Interest (Details)
$ in Thousands
Dec. 31, 2019
USD ($)
Debt Disclosure [Abstract]  
Notes and related interest due, total $ 924,059
Notes and related interest due, less than 1 year 6,240
Notes and related interest due, 1 to 3 years 12,848
Notes and related interest due, 3 to 5 years 496,971
Notes and related interest due, more than 5 years $ 408,000
v3.19.3.a.u2
Accrued Payroll and Payroll-Related Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Payables and Accruals [Abstract]    
Accrued commissions $ 23,037 $ 8,589
Accrued bonuses $ 16,730 $ 7,300
v3.19.3.a.u2
Redeemable Convertible Preferred Stock and Stockholders' Equity (Details)
1 Months Ended
Feb. 28, 2017
Vote
Dec. 31, 2019
$ / shares
shares
Dec. 31, 2018
$ / shares
shares
Mar. 31, 2017
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Preferred stock, conversion ratio       1
Minimum percentage of votes required for stock conversion 66.67%      
Preferred stock, shares authorized (in shares)   10,000,000 10,000,000  
Preferred stock, par value (in dollars per share) | $ / shares   $ 0.0001 $ 0.0001  
Preferred stock, shares outstanding (in shares)   0 0  
Class A Common Stock        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of votes per share | Vote 1      
Common stock shares authorized (in shares)   500,000,000 500,000,000 500,000,000
Common stock par value per share (in dollars per share) | $ / shares   $ 0.0001 $ 0.0001 $ 0.0001
Class B Common Stock        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of votes per share | Vote 10      
Threshold percentage of common stock conversion 10.00%      
Common stock conversion ratio 1      
Common stock shares authorized (in shares)   500,000,000 500,000,000 500,000,000
Common stock par value per share (in dollars per share) | $ / shares   $ 0.0001 $ 0.0001 $ 0.0001
Undesignated Preferred Stock        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Preferred stock, shares authorized (in shares)       10,000,000
Preferred stock, par value (in dollars per share) | $ / shares       $ 0.0001
v3.19.3.a.u2
Equity Awards - Additional Information (Details) - USD ($)
$ / shares in Units, $ in Thousands
1 Months Ended 12 Months Ended
Feb. 28, 2017
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Share-based payment award, options, exercises in period, intrinsic value   $ 115,409 $ 56,900 $ 25,700
Share-based payment award, options, grants in period (in dollars per share)   $ 80.88 $ 28.26 $ 17.48
Amended and Restated 2013 Stock Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares available for future grant (in shares)   0    
2017 Employee Stock Purchase Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock plan, offering period 6 months      
Stock Options        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Awards expiration period from date of grant   10 years    
Unrecognized compensation cost related to unvested stock options   $ 15,900    
Weighted average period   2 years 1 month 6 days    
Stock Options | Minimum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Awards vesting period upon service condition satisfied   3 years    
Stock Options | Maximum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Awards vesting period upon service condition satisfied   4 years    
Unvested restricted stock units        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Weighted average period   2 years 6 months    
Share-based payment award, options,vested in period, intrinsic value   $ 30,214 $ 9,800 $ 1,800
Share-based payment award, options, granted in period (in dollars per share)   $ 90.00 $ 35.51 $ 20.43
Unrecognized compensation expense, adjusted for estimated forfeitures, related to unvested RSUs   $ 80,600    
Unvested restricted stock units | 2017 Equity Incentive Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Awards expiration period from date of grant   10 years    
Unvested restricted stock units | 2017 Equity Incentive Plan | Minimum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Awards vesting period upon service condition satisfied   3 years    
Unvested restricted stock units | 2017 Equity Incentive Plan | Maximum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Awards vesting period upon service condition satisfied   4 years    
Class A Common Stock | 2017 Equity Incentive Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares available for future grant (in shares)   9,300,000    
Stock reserved for issuance under equity award plans (in shares) 5,100,000      
Class A Common Stock | 2013 Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock reserved for issuance under equity award plans (in shares) 500,000      
Class A Common Stock | 2017 Employee Stock Purchase Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares available for future grant (in shares)   2,000,000.0    
Stock reserved for issuance under equity award plans (in shares) 1,100,000      
Percentage of maximum deduction of eligible compensation 15.00%      
Stock issued during period, shares, employee stock purchase plans (in shares)   100,000    
Common stock par value per share (in dollars per share)   $ 52.53    
Class A Common Stock | 2017 Employee Stock Purchase Plan | Maximum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Aggregate number of shares issued (in shares) 11,000,000      
Common Class A and Class B | 2017 Equity Incentive Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock outstanding percentage 5.00%      
Common Class A and Class B | 2017 Employee Stock Purchase Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock outstanding percentage 1.00%      
Percentage of purchase price of common stock 85.00%      
v3.19.3.a.u2
Equity Awards - Schedule of Stock Option Activity (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Options Outstanding      
Options outstanding, beginning balance (in shares) 4,049    
Granted (in shares) 392    
Exercised (in shares) (1,452)    
Cancelled/forfeited (in shares) (277)    
Options outstanding, ending balance (in shares) 2,712 4,049  
Exercisable (in shares) 1,629    
Vested and expected to vest (in shares) 2,712    
Weighted- Average Exercise Price      
Options outstanding, beginning balance (in dollars per share) $ 12.48    
Granted (in dollars per share) 80.88 $ 28.26 $ 17.48
Exercised (in dollars per share) 10.90    
Cancelled/forfeited (in dollars per share) 18.68    
Options outstanding, ending balance (in dollars per share) 22.58 $ 12.48  
Exercisable (in dollars per share) 9.15    
Vested and expected to vest (in dollars per share) $ 22.58    
Aggregate Intrinsic Value      
Options outstanding at beginning of period $ 190,277    
Exercised 115,409 $ 56,900 $ 25,700
Options outstanding at end of period 211,488 $ 190,277  
Exercisable 148,119    
Vested and expected to vest at December 31, 2019 $ 211,488    
Weighted-Average Remaining Contractual Term (Years)      
Options outstanding (in years) 6 years 7 months 6 days 7 years 2 months 12 days  
Exercisable (in years) 5 years 7 months 6 days    
Vested and expected to vest (in years) 6 years 7 months 6 days    
v3.19.3.a.u2
Equity Awards - Schedule of Weighted-average Assumption Used for Stock Options (Details) - $ / shares
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Stock Options      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected term (in years) 5 years 9 months 18 days 6 years 1 month 6 days 6 years 1 month 6 days
Estimated volatility 38.00% 41.00% 42.00%
Risk-free interest rate 2.00% 2.00% 2.00%
Estimated dividend yield 0.00% 0.00% 0.00%
Weighted average fair value (in dollars per share) $ 32.20 $ 12.09 $ 7.53
Employee Stock Purchase Plan      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected term (in years) 6 months 6 months 4 months 24 days
Estimated volatility 56.00% 52.00% 29.00%
Risk-free interest rate 2.00% 2.00% 1.00%
Estimated dividend yield 0.00% 0.00% 0.00%
Weighted average fair value (in dollars per share) $ 30.02 $ 12.13 $ 4.02
v3.19.3.a.u2
Equity Awards - Schedule RSU Activity (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]      
Vested and expected to vest (in shares) 2,712    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date [Roll Forward]      
Vested and expected to vest (in dollars per share) $ 22.58    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Roll Forward]      
Vested and expected to vest at December 31, 2019 $ 211,488    
Unvested restricted stock units      
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]      
Awards outstanding, beginning balance (in shares) 1,215    
Granted (in shares) 908    
Vested (in shares) (340)    
Cancelled/forfeited (in shares) (207)    
Awards outstanding, ending balance (in shares) 1,576 1,215  
Vested and expected to vest (in shares) 1,576    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date [Roll Forward]      
Awards outstanding, beginning of year (in dollars per share) $ 31.93    
Granted (in dollars per share) 90.00 $ 35.51 $ 20.43
Vested (in dollars per share) 30.79    
Cancelled/forfeited (in dollars per share) 40.97    
Awards outstanding, end of year (in dollars per share) 64.46 $ 31.93  
Vested and expected to vest (in dollars per share) $ 64.46    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Roll Forward]      
Aggregate intrinsic value at beginning of period $ 72,266    
Aggregate intrinsic value, vested 30,214 $ 9,800 $ 1,800
Aggregate intrinsic value at end of period 157,752 $ 72,266  
Vested and expected to vest at December 31, 2019 $ 157,752    
v3.19.3.a.u2
Equity Awards - Schedule of Stock-based Compensation Expense (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense $ 33,125 $ 16,647 $ 8,941
Cost of revenue      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense 1,634 797 485
Research and development      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense 6,954 3,699 1,635
Sales and marketing      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense 12,659 6,153 2,302
General and administrative      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense $ 11,878 $ 5,998 $ 4,519
v3.19.3.a.u2
Retirement Plan (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Retirement Benefits [Abstract]      
Contributed to savings plan $ 3.9 $ 2.4 $ 1.6
v3.19.3.a.u2
Leases - Lease-Related Assets and Liabilities (Details)
$ in Thousands
Dec. 31, 2019
USD ($)
Leases [Abstract]  
Operating lease right-of-use assets $ 33,600
Operating lease liabilities (current) 6,627
Operating lease liabilities (noncurrent) 29,293
Total lease liabilities $ 35,920
v3.19.3.a.u2
Leases - Lease Costs (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Leases [Abstract]  
Operating lease cost $ 7,066
Short-term lease cost 1,604
Variable lease cost 1,767
Total lease cost $ 10,437
v3.19.3.a.u2
Leases - Supplemental Information (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Leases [Abstract]  
Cash paid for amounts included in the measurement of operating lease liabilities $ 6,040
Weighted-average remaining lease term 5 years 10 months 24 days
Weighted-average discount rate 6.18%
v3.19.3.a.u2
Leases - Additional Information (Details)
$ in Millions
Dec. 31, 2019
USD ($)
Lessee, Lease, Description [Line Items]  
Operating lease not yet commenced, payments due total $ 73.5
Operating lease not yet commenced, payments due year two $ 13.0
Minimum  
Lessee, Lease, Description [Line Items]  
Operating lease not yet commenced, term 7 years
Maximum  
Lessee, Lease, Description [Line Items]  
Operating lease not yet commenced, term 9 years
v3.19.3.a.u2
Leases - Undiscounted Cash Flows (Details)
$ in Thousands
Dec. 31, 2019
USD ($)
Leases [Abstract]  
2020 $ 8,621
2021 7,768
2022 7,106
2023 5,562
2024 5,331
2025 4,434
Thereafter 4,641
Total minimum lease payments 43,463
Less imputed interest (7,543)
Present value of future minimum lease payments 35,920
Less current obligations under leases (6,627)
Operating lease liabilities (noncurrent) $ 29,293
v3.19.3.a.u2
Leases - Minimum Payments Prior to Adoption of ASC 842 (Details)
$ in Thousands
Dec. 31, 2018
USD ($)
Leases [Abstract]  
2019 $ 6,389
2020 6,781
2021 6,326
2022 6,276
2023 5,163
Thereafter 9,427
Total minimum lease payments $ 40,362
v3.19.3.a.u2
Commitments and Contingencies - Contractual Obligations (Details)
$ in Thousands
Dec. 31, 2019
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2020 $ 16,270
2021 9,061
2022 7,544
2023 0
2024 0
Thereafter 0
Total minimum payments $ 32,875
v3.19.3.a.u2
Commitments and Contingencies - Additional Information (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Loss Contingencies [Line Items]    
Warranty accrual $ 0  
Indemnification Agreement    
Loss Contingencies [Line Items]    
Accrued liability $ 0 $ 0
v3.19.3.a.u2
Income Taxes - Components of Income (Loss) Before Provision for (Benefit of) Income Taxes (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Tax Disclosure [Abstract]      
Domestic $ 9,259 $ 27,849 $ 24,460
Foreign (3,195) (2,415) (42,864)
Income (loss) before benefit of income taxes $ 6,064 $ 25,434 $ (18,404)
v3.19.3.a.u2
Income Taxes - Components of Provision for (Benefit of) Income Taxes (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Current:      
Federal $ (375) $ (14) $ 38
State 158 314 70
Foreign 1,176 587 297
Total current income tax expense 959 887 405
Deferred:      
Federal (18,684) (2,321) (1,564)
State (3,406) (869) 0
Foreign 52 (283) 254
Total deferred income tax benefit: (22,038) (3,473) (1,310)
Total $ (21,079) $ (2,586) $ (905)
v3.19.3.a.u2
Income Taxes - Additional Information (Details) - USD ($)
12 Months Ended
Jan. 01, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Income Taxes [Line Items]          
Effective tax rate of statutory   21.00% 34.00% 34.00%  
Increase (decrease) in valuation allowance $ (6,700,000) $ 3,224,000 $ 510,000 $ (19,502,000)  
Valuation allowance   19,683,000 1,138,000 7,304,000 $ 27,804,000
Change in tax rate, deferred tax assets and valuation allowance       2,600,000  
Pre-tax unrecognized tax benefits related to stock-based compensation expense   7,556,000 6,234,000 $ 5,794,000 $ 0
Amount which would impact effective tax rate   7,000,000.0      
Penalties and interest accrued   0 $ 0    
Federal          
Income Taxes [Line Items]          
Income tax net operating loss carryforwards   56,500,000      
State          
Income Taxes [Line Items]          
Income tax net operating loss carryforwards   $ 32,400,000      
v3.19.3.a.u2
Income Taxes - Schedule of Provision for (Benefit of) Income Taxes and Effective Tax Rates (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Tax Disclosure [Abstract]      
Income tax at federal statutory rate $ 1,273 $ 5,341 $ (6,257)
State income tax expense, net of federal (2,567) (438) 1,428
Foreign rate differential 789 853 15,375
Stock-based compensation (20,913) (7,916) (1,086)
Change in valuation allowance 18,129 510 (20,500)
Tax impact due to tax law change 0 0 2,627
Meals and entertainment 658 310 229
Change in uncertain tax position reserves 0 0 7,854
Research credits (3,177) (1,563) (2,249)
Tax basis step-up due to internal reorganization 15,321 0 0
Other 50 317 1,674
Total $ (21,079) $ (2,586) $ (905)
v3.19.3.a.u2
Income Taxes - Components of Deferred Income Tax Assets (Liabilities) (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Deferred tax assets:        
Deferred revenue $ 739 $ 577    
Net operating losses 10,997 3,424    
Accruals and reserves 5,679 3,039    
Research & other credits 11,027 5,185    
Intangibles 12,291 0    
Operating lease liabilities 7,586      
Effect of Section 163(j) on interest expense 4,046 0    
Stock-based compensation 6,623 3,361    
State taxes 269 440    
Other 84 695    
Total deferred tax assets 59,341 16,721    
Less valuation allowance (19,683) (1,138) $ (7,304) $ (27,804)
Net deferred tax assets 39,658 15,583    
Deferred tax liabilities:        
Property and equipment (48) (953)    
Operating lease right-of-use assets (7,002)      
Deferred commissions (8,924) (4,595)    
Convertible senior notes (20,459) (8,499)    
Effects of ASC 606 adoption (8,819) (13,113)    
Total deferred tax liabilities (45,252) (27,160)    
Net deferred tax liabilities $ (5,594) $ (11,577)    
v3.19.3.a.u2
Income Taxes - Change in Valuation Allowance (Details) - USD ($)
$ in Thousands
12 Months Ended
Jan. 01, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Changes In Valuation Allowance [Roll Forward]        
Beginning balance $ 7,304 $ 1,138 $ 7,304 $ 27,804
Increase (decrease) in valuation allowance $ (6,700) 3,224 510 (19,502)
Ending balance   19,683 1,138 7,304
Yhat        
Changes In Valuation Allowance [Roll Forward]        
Increase (decrease) in valuation allowance   0 0 (998)
Accounting Standards Update 2014-09        
Changes In Valuation Allowance [Roll Forward]        
Increase (decrease) in valuation allowance   0 (6,676) 0
Internal Reorganization        
Changes In Valuation Allowance [Roll Forward]        
Increase (decrease) in valuation allowance   $ 15,321 $ 0 $ 0
v3.19.3.a.u2
Income Taxes - Schedule of Activity in Gross Unrecognized Tax Benefits (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance at beginning of year $ 6,234 $ 5,794 $ 0
Additions based on tax position related to the current year 1,322 391 5,624
Additions for tax positions of prior years 0 49 170
Balance at end of year $ 7,556 $ 6,234 $ 5,794
v3.19.3.a.u2
Basic and Diluted Net Income (Loss) Per Share - Schedule of Computation of Net Income (Loss) per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Numerator:                      
Net loss attributable to common stockholders                 $ 27,143 $ 28,020 $ (19,482)
Denominator:                      
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, basic (in shares)                 63,424 60,829 53,006
Effect of dilutive securities:                      
Convertible senior notes (in shares)                 1,975 409 0
Employee stock awards (in shares)                 3,259 3,506 0
Contingently issuable shares (in shares)                 3 0 0
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, diluted (in shares)                 68,661 64,744 53,006
Net Income (loss) per share attributable to common stockholders, basic (in dollars per share)                 $ 0.43 $ 0.46 $ (0.37)
Net income (loss) per share attributable to common stockholders, diluted (in dollars per share) $ 0.44 $ (0.10) $ (0.05) $ 0.09 $ 0.25 $ 0.17 $ (0.07) $ 0.08 $ 0.40 $ 0.43 $ (0.37)
v3.19.3.a.u2
Basic and Diluted Net Income (Loss) Per Share - Weighted-average Equivalent Shares Excluded From Diluted Net Income (Loss) per Share Calculation (Details) - shares
shares in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total shares excluded from net loss per share (in shares) 1,853 510 9,609
Stock awards      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total shares excluded from net loss per share (in shares) 209 510 6,312
Convertible senior notes      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total shares excluded from net loss per share (in shares) 1,644 0 0
Conversion of convertible preferred stock      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total shares excluded from net loss per share (in shares) 0 0 3,290
Contingently issuable shares      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total shares excluded from net loss per share (in shares) 0 0 7
v3.19.3.a.u2
Segment and Geographic Information Schedule of Long-lived Assets Classified By Geographic Location (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Revenues from External Customers and Long-Lived Assets [Line Items]    
Long-lived assets $ 53,896 $ 11,729
United States    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Long-lived assets 39,641 10,610
United Kingdom    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Long-lived assets 7,263 650
Other countries    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Long-lived assets $ 6,992 $ 469
v3.19.3.a.u2
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Quarterly Financial Information Disclosure [Abstract]                      
Revenue $ 156,450 $ 103,397 $ 82,043 $ 76,020 $ 89,150 $ 62,589 $ 51,502 $ 50,329 $ 417,910 $ 253,570 $ 131,607
Gross margin 144,239 93,752 72,748 68,020 82,433 56,779 46,233 45,325 378,759 230,770 109,804
Income (loss) from operations 38,735 11,936 (8,288) (4,402) 21,118 9,394 (3,425) 2,683 37,981 29,770 (18,199)
Net income (loss) $ 30,688 $ (6,240) $ (3,219) $ 5,914 $ 16,541 $ 10,821 $ (4,239) $ 4,897 $ 27,143 $ 28,020 $ (17,499)
Diluted income (loss) per share (in dollars per share) $ 0.44 $ (0.10) $ (0.05) $ 0.09 $ 0.25 $ 0.17 $ (0.07) $ 0.08 $ 0.40 $ 0.43 $ (0.37)
v3.19.3.a.u2
Label Element Value
Accounting Standards Update 2014-09 [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption $ 64,197,000
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption 64,197,000
Accounting Standards Update, All Other [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption (1,438,000)
Accounting Standards Update, All Other [Member] | Retained Earnings [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption (1,579,000)
Accounting Standards Update, All Other [Member] | Additional Paid-in Capital [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption $ 141,000