Cover - USD ($) $ in Millions	12 Months Ended
Cover - USD ($) $ in Millions	Dec. 31, 2022	Mar. 10, 2023	Jun. 30, 2022
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-40276
Entity Registrant Name	Semrush Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-4053265
Entity Address, Address Line One	800 Boylston Street, Suite 2475
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02199
City Area Code	(800)
Local Phone Number	851-9959
Title of 12(b) Security	Class A Common Stock, $0.00001 par value per share
Trading Symbol	SEMR
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 380.9
Documents Incorporated by Reference	Portions of the registrant's definitive Proxy Statement for the 2023 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended December 31, 2022.
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Central Index Key	0001831840
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		118,056,519
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		23,657,057

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2022
Auditor Information [Abstract]
Auditor Firm ID	42
Auditor Name	Ernst & Young LLP
Auditor Location	Boston, Massachusetts

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 79,765	$ 269,665
Short-term investments	157,774	0
Accounts receivable	3,559	2,190
Deferred contract costs, current portion	6,974	6,338
Prepaid expenses and other current assets	9,307	5,345
Total current assets	257,379	283,538
Property and equipment, net	8,076	8,270
Operating lease right-of-use assets	12,009	0
Intangible assets, net	10,286	2,925
Goodwill	6,529	1,991
Deferred contract costs, net of current portion	2,082	2,254
Other long-term assets	2,329	1,096
Total assets	298,690	300,074
Current liabilities
Accounts payable	15,495	9,942
Accrued expenses	17,847	19,479
Deferred revenue	49,354	40,232
Current portion of operating lease liabilities	3,694	0
Other current liabilities	2,311	1,896
Total current liabilities	88,701	71,549
Deferred revenue, net of current portion	122	237
Deferred tax liability	11	268
Operating lease liabilities, net of current portion	8,929	0
Other long-term liabilities	1,023	2,478
Total liabilities	98,786	74,532
Commitments and contingencies (Note 13)
Stockholders’ equity
Undesignated preferred stock, $0.00001 par value — 100,000 shares authorized, and no shares issued or outstanding as of December 31, 2022 or 2021	0	0
Additional paid-in capital	274,057	264,871
Accumulated other comprehensive deficit	(1,206)	(230)
Accumulated deficit	(72,948)	(39,100)
Total stockholders’ equity	199,904	225,542
Total liabilities and stockholders’ equity	298,690	300,074
Class A Common Stock
Stockholders’ equity
Common stock	0	0
Class B Common Stock
Stockholders’ equity
Common stock	$ 1	$ 1

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Preferred stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred stock, authorized (in shares)	100,000,000	100,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Class A Common Stock
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, issued (in shares)	43,743,000	31,842,000
Common stock, outstanding (in shares)	43,743,000	31,842,000
Class B Common Stock
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, authorized (in shares)	160,000,000	160,000,000
Common stock, issued (in shares)	97,897,000	108,975,000
Common stock, outstanding (in shares)	97,844,000	108,870,000

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Statement [Abstract]
Revenue	$ 254,316	$ 188,001	$ 124,875
Cost of revenue	48,553	41,934	29,930
Gross profit	205,763	146,067	94,945
Operating expenses
Sales and marketing	126,889	81,122	54,518
Research and development	41,204	24,322	17,528
General and administrative	62,779	43,116	29,044
Exit costs	11,264	0	0
Total operating expenses	242,136	148,560	101,090
Loss from operations	(36,373)	(2,493)	(6,145)
Other income (expense), net	3,456	(522)	(290)
Loss before income taxes	(32,917)	(3,015)	(6,435)
Provision for income taxes	931	270	577
Net loss	$ (33,848)	$ (3,285)	$ (7,012)
Net loss per share attributable to common stockholders—basic and diluted:
Basic (in dollars per share)	$ (0.24)	$ (0.03)	$ (0.07)
Diluted (in dollars per share)	$ (0.24)	$ (0.03)	$ (0.07)
Weighted-average number of shares of common stock used in computing net loss per share attributable to common stockholders—basic and diluted:
Basic (in shares)	141,160	126,586	94,803
Diluted (in shares)	141,160	126,586	94,803
Other comprehensive loss
Foreign currency translation adjustments	$ (851)	$ (230)	$ 0
Unrealized loss on investments	(125)	0	0
Comprehensive loss	$ (34,824)	$ (3,515)	$ (7,012)

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands	Total	Underwriters' Option	Follow-on Public Offering	Common Stock	Additional Paid-in Capital	Additional Paid-in Capital Underwriters' Option	Additional Paid-in Capital Follow-on Public Offering	Accumulated Other Comprehensive Loss	Accumulated Deficit	Series A	Series A-1	Series B Preferred Stock	Class A Common Stock	Class A Common Stock Common Stock	Class A Common Stock Common Stock Underwriters' Option	Class A Common Stock Common Stock Follow-on Public Offering	Class B Common Stock	Class B Common Stock Common Stock
Beginning balance (in shares) at Dec. 31, 2019										3,379,400	1,837,600
Beginning balance at Dec. 31, 2019										$ 7,789	$ 10,270
Ending balance (in shares) at Dec. 31, 2020										3,379,400	1,837,600
Ending balance at Dec. 31, 2020										$ 7,789	$ 10,270
Beginning balance (in shares) at Dec. 31, 2019												4,681,400
Beginning balance (in shares) at Dec. 31, 2019				94,592,700										0				0
Beginning balance at Dec. 31, 2019	$ (1,159)			$ 0	$ 3,644			$ 0	$ (28,803)			$ 24,000		$ 0				$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)				457,341
Issuance of common stock upon exercise of stock options	252				252
Stock-based compensation expense	1,079				1,079
Cumulative translation adjustment	0
Unrealized loss on investments	0
Net loss	(7,012)								(7,012)
Ending balance (in shares) at Dec. 31, 2020												4,681,400
Ending balance (in shares) at Dec. 31, 2020				95,050,041										0				0
Ending balance at Dec. 31, 2020	(6,840)			$ 0	4,975			0	(35,815)			$ 24,000		$ 0				$ 0
Increase (Decrease) in Temporary Equity [Roll Forward]
Conversion of preferred stock (in shares)										(3,379,400)	(1,837,600)
Conversion of preferred stock										$ (7,789)	$ (10,270)
Ending balance (in shares) at Dec. 31, 2021										0	0
Ending balance at Dec. 31, 2021										$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)																		1,194,918
Issuance of common stock upon exercise of stock options	1,327				1,327
Conversion of stock (in shares)				29,695,200								(4,681,400)		17,121,795				(17,121,795)
Conversion of preferred stock	18,058				42,058							$ (24,000)
Issuance of Class A Common Stock (in shares)														10,000,000	719,266	4,000,000
Issuance of Class A Common Stock	126,622	$ 9,245	$ 77,903		126,622	$ 9,245	$ 77,903
Reclassification of Common Stock to Class B Common Stock in connection with the initial public offering (in shares)				(124,745,241)														124,745,241
Reclassification of Common Stock to Class B Common Stock in connection with the initial public offering	0				(1)													$ 1
Vesting of Common Stock (in shares)																		51,762
Stock-based compensation expense	2,742				2,742
Cumulative translation adjustment	(230)							(230)
Unrealized loss on investments	0
Net loss	$ (3,285)								(3,285)
Ending balance (in shares) at Dec. 31, 2021	0											0
Ending balance (in shares) at Dec. 31, 2021				0									31,842,000	31,841,061			108,870,000	108,870,126
Ending balance at Dec. 31, 2021	$ 225,542			$ 0	264,871			(230)	(39,100)			$ 0		$ 0				$ 1
Ending balance (in shares) at Dec. 31, 2022										0	0
Ending balance at Dec. 31, 2022										$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)	681,860													681,860
Issuance of common stock upon exercise of stock options	$ 981				981
Conversion of stock (in shares)														11,078,315				(11,078,315)
Vesting of Common Stock (in shares)														77,182				51,759
Issuance of shares in connection with Employee Stock Purchase Plan (in shares)														64,756
Issuance of shares in connection with Employee Stock Purchase Plan	758				758
Stock-based compensation expense	7,447				7,447
Cumulative translation adjustment	(851)							(851)
Unrealized loss on investments	(125)							(125)
Net loss	$ (33,848)								(33,848)
Ending balance (in shares) at Dec. 31, 2022	0											0
Ending balance (in shares) at Dec. 31, 2022				0									43,743,000	43,743,174			97,844,000	97,843,570
Ending balance at Dec. 31, 2022	$ 199,904			$ 0	$ 274,057			$ (1,206)	$ (72,948)			$ 0		$ 0				$ 1

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Operating Activities
Net loss	$ (33,848)	$ (3,285)	$ (7,012)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization expense	6,650	3,535	1,484
Intangible asset impairment expense	642	0	0
Amortization of deferred contract costs	8,988	6,489	4,623
Non-cash lease expense	4,520	0	0
Loss on disposal of subsidiaries	1,738	0	0
Stock-based compensation expense	7,393	2,742	1,079
Non-cash interest expense	242	211	0
Changes in fair value of convertible debt securities	(1,152)	0	0
Deferred taxes	(253)	59	(90)
Changes in operating assets and liabilities:
Accounts receivable	(3,317)	(791)	738
Deferred contract costs	(9,452)	(9,362)	(6,637)
Prepaid expenses and other current assets	(2,446)	(2,784)	(70)
Accounts payable	6,793	1,527	1,825
Accrued expenses	(848)	11,613	2,501
Other current liabilities	(394)	0	0
Deferred revenue	9,133	13,807	6,914
Other long-term liabilities	94	0	497
Change in operating lease liability	(4,107)	0	0
Net cash (used in) provided by operating activities	(9,624)	23,761	5,852
Investing Activities
Purchases of property and equipment	(4,234)	(2,380)	(2,367)
Purchases of short-term investments	(157,899)	0	0
Purchases of convertible debt securities	(2,000)	(500)	0
Capitalization of internal-use software development costs	(1,706)	(1,403)	(1,032)
Cash paid for acquisition of businesses, net of cash acquired	(13,993)	(350)	(2,685)
Net cash used in investing activities	(179,832)	(4,633)	(6,084)
Financing Activities
Proceeds from exercise of stock options	981	1,327	252
Proceeds from issuance of shares in connection with Employee Stock Purchase Plan	758	0	0
Payment of finance leases	(2,084)	(1,373)	0
Payment of deferred offering costs	0	0	(1,924)
Net proceeds from completing public offerings	0	215,370	0
Net cash (used in) provided by financing activities	(345)	215,324	(1,672)
Effect of exchange rate changes on cash and cash equivalents	(275)	(230)	0
(Decrease) increase in cash, cash equivalents and restricted cash	(190,076)	234,222	(1,904)
Cash, cash equivalents and restricted cash, beginning of year	269,841	35,619	37,523
Cash, cash equivalents and restricted cash, end of year	79,765	269,841	35,619
Supplemental cash flow disclosures
Cash paid for interest	229	321	0
Cash paid for income taxes	603	248	583
Deferred offering costs incurred and not paid	0	0	243
Credit facility costs incurred and not paid	0	0	303
Accrued purchase consideration	0	0	497
Acquisition of fixed assets under finance leases	1,050	5,750	0
Unrealized loss on short-term investments	125	0	0
Right-of-use assets obtained in exchange for new operating lease liabilities	5,567	0	0
Reduction of right-of-use assets and lease liabilities due to lease modifications	1,278	0	0
Reclassification of deferred rent liability to right-of-use assets upon adoption of ASC 842	213	0	0
Right-of-use assets and lease liabilities recorded upon adoption of ASC 842	$ 12,579	$ 0	$ 0

Organization and Description of Business	12 Months Ended
Organization and Description of Business	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of Business	Organization and Description of Business Description of Business Semrush Holdings, Inc. (“Semrush Holdings”) and its subsidiaries (together the “Company”, or “Semrush”) provide an online visibility management software-as-a-service (“SaaS”) platform. The Company’s platform enables its subscribers to improve their online visibility and drive traffic, including on their websites and social media pages, and distribute highly relevant content to their customers on a targeted basis across various channels to drive high-quality traffic and measure the effectiveness of their digital marketing campaigns. The Company is headquartered in Boston, Massachusetts, and has wholly owned subsidiaries in Armenia, Canada, Cyprus, the Czech Republic, Germany, the Netherlands, Poland, Spain, Serbia, and the United States. The Company is subject to a number of risks and uncertainties common to companies in similar industries and stages of development that could affect future operations and financial performance. These risks include, but are not limited to, rapid technological change, competitive pressure from substitute products or larger companies, protection of proprietary technology, management of international activities, the need to obtain additional financing to support growth, and dependence on third parties and key individuals. Effects of the Russian Military Action in Ukraine Economic, civil, military, and political uncertainty exists and may increase in many of the regions where the Company operates and derives its revenue. Several countries in which the Company operates are experiencing and may continue to experience military action and civil and political unrest as a result of such action. The Company has significant development operations in the emerging market economies of Eastern Europe and more than half of the Company’s full-time employees were historically located in Russia. In late February 2022, Russian military forces launched significant military action against Ukraine, and sustained conflict and disruption in the region has been ongoing and is likely to continue. The impact to Ukraine and Russia, as well as actions taken by other countries, including new and stricter sanctions by Canada, the United Kingdom, the European Union, the U.S. and other countries and organizations against officials, individuals, regions, and industries in Russia, Ukraine and Belarus, and each country’s potential response to such sanctions, tensions, and military actions could have a material adverse effect on the Company’s operations. Any such material adverse effect from the conflict, enhanced sanctions activity, and subsequent responses may disrupt the Company’s relationships with its vendors, disrupt its delivery of services, cause the Company to shift all or portions of its work occurring in the region to other countries, and may restrict the Company’s ability to engage in certain projects in the region. During the second quarter of 2022, the Company began a large-scale relocation effort of its Russia-based workforce to other jurisdictions. The Company’s exit from Russia was substantially completed by December 31, 2022. See Note 7 for additional information on the costs associated with such relocation efforts. Sale of the Company’s Russian Subsidiaries On August 3, 2022, the Company completed the sale of its two Russian subsidiaries, Semrush RU Ltd. and Semrush SM Ltd., in connection with the winding down of its operations in Russia. The Company received an insignificant amount of consideration in connection with the sale of these two subsidiaries. See Note 7 for further detail on the sale of the Company’s Russian subsidiaries. Effects of COVID-19 The Company considered the potential effects of the COVID-19 pandemic on the Company. In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic, and numerous new strains of COVID-19 have subsequently spread throughout the world. COVID-19 has continued to impact market and economic conditions globally. In an attempt to limit the spread of the virus, various governmental restrictions have been implemented, including restrictions with respect to business activities and travel restrictions, and “shelter–at–home” orders, that have had and may continue to have an adverse impact on the Company’s business and operations. In light of the evolving nature of COVID-19 and the uncertainty it has produced around the world, it is not possible to predict the COVID-19 pandemic’s cumulative and ultimate impact on the Company’s future business operations, results of operations, financial position, liquidity, and cash flows. The extent of the impact of the pandemic on the Company’s business and financial results will depend largely on future developments, including the duration of the spread of the outbreak both globally and within the U.S., the impact on capital, foreign currencies exchange and financial markets, and governmental or regulatory orders that impact the Company’s business, all of which are highly uncertain and cannot be predicted. As of December 31, 2022, the Company has experienced long lead times for hardware affected by a semiconductor shortage attributed to the COVID-19 pandemic which may affect its ability to timely furnish the infrastructure within its data centers. The Company will continue to actively monitor the current international and domestic impacts of and responses to COVID-19 and its related risks.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the consolidated financial statements. The Company believes that a significant accounting policy is one that is both important to the portrayal of the Company’s financial condition and results, and requires management’s most difficult, subjective, or complex judgments, often as the result of the need to make estimates about the effect of matters that are inherently uncertain.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported

amounts of revenue and expenses during the reporting period. Significant estimates relied upon in preparing these consolidated financial statements include, but are not limited to, revenue recognition, expected future cash flows used to evaluate the recoverability of long-lived assets, contingent liabilities, expensing and capitalization of research and development costs for internal-use software, the average period of benefit associated with costs capitalized to obtain revenue contracts, the determination of the fair value of stock-based awards issued, stock-based compensation expense, the determination of the estimated fair value of the convertible notes held by the Company, the valuations of the intangible assets acquired through acquisitions, the estimation of the Company’s incremental borrowing rate, and the recoverability of the Company’s net deferred tax assets and related valuation allowance.

Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made.

Subsequent Events Considerations

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the consolidated financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. See Note 17.

Revenue Recognition

The Company primarily derives revenue from subscription revenues via the Semrush online visibility management platform and the Prowly public relations platform, which are comprised of subscription fees from customers accessing the Company’s SaaS services and related customer support. For the years ended December 31, 2022, 2021, and 2020, subscription revenue accounted for nearly all of the Company’s revenue. Revenue related to other revenue was not material for the years ended December 31, 2022, 2021 and 2020.

The Company offers subscriptions to its platform primarily on a monthly or annual basis. The Company sells its products and services primarily through a self-service model and also directly through its sales force. The Company’s subscription arrangements provide customers the right to access the Company’s hosted software applications. Customers do not have the right to take possession of the Company’s software during the hosting arrangement. Subscriptions are generally non-cancellable during the contractual subscription term; however, subscription contracts contain a right to a refund if requested within seven days of purchase.

The Company recognizes revenue in accordance with ASC 606. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration it expects to receive in exchange for those products or services. To achieve the core principle of ASC 606, the Company performs the following steps:

1)Identify the contract(s) with a customer;

2)Identify the performance obligations in the contract;

3)Determine the transaction price;

4)Allocate the transaction price to the performance obligations in the contract; and

5)Recognize revenue when (or as) the Company satisfies a performance obligation.

The Company recognizes subscription and support revenue ratably over the term of the contract, beginning on the date the customer is provided access to the Company’s service. These subscriptions are generally stand-ready obligations as the customer has access to the service throughout the term of the subscription, and the Company’s performance obligations are satisfied with the customer over time. The Company considers the SaaS services and related support services to have the same pattern of transfer to the customer. As such, they are accounted for as a single performance obligation.

Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. The Company primarily invoices and collects payments from customers for its services in advance on a monthly or annual basis.

Deferred revenue represents amounts billed for which revenue has not yet been recognized. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current deferred revenue, and the remaining portion is recorded as long-term deferred revenue. Deferred revenue increased by $9,007 and $13,809 during the years ended December 31, 2022 and 2021, respectively. During the years ended December 31, 2022, 2021, and 2020, $40,232, $26,537, and $19,218 of revenue was recognized that was included in deferred revenue at the beginning of each respective period.

The Company has elected to exclude amounts charged to customers for sales tax from the transaction price. Accordingly, revenue is presented net of any sales tax collected from customers.

Transaction Price Allocated to Future Performance Obligations

ASC 606 requires that the Company disclose the aggregate amount of the transaction price that is allocated to performance obligations that have not yet been satisfied as of the balance sheet dates reported.

For contracts with an original expected duration greater than one year, the aggregate amount of the transaction price allocated to the performance obligations that were unsatisfied as of December 31, 2022 was $654, which the Company expects to recognize over the next 12 months.

For contracts with an original expected duration of one year or less, the Company has applied the practical expedient available under ASC 606 to not disclose the amount of transaction price allocated to unsatisfied performance obligations as of December 31, 2022. For performance obligations not satisfied as of December 31, 2022, and to which this expedient applies, the nature of the performance obligations is consistent with performance obligations satisfied as of December 31, 2022. The remaining durations are less than one year.

Costs to Obtain a Contract

The incremental direct costs of obtaining a contract, which primarily consist of sales commissions paid for new subscription contracts, are deferred and recorded as deferred contract costs in the consolidated balance sheet and are amortized over a period of approximately 24 months on a systematic basis, consistent with the pattern of transfer of the goods or services to which the asset relates. The 24-month period represents the estimated benefit period of the customer relationship and has been determined by taking into consideration the type of product sold, the commitment term of the customer contract, the nature of the Company’s technology development life-cycle, and an estimated customer relationship period based on historical experience and future expectations. Deferred contract costs that will be recorded as expense during the succeeding 12-month period are recorded as current deferred contract costs, and the remaining portion is recorded as deferred contract costs, net of current portion. Amortization of deferred contract costs is included in sales and marketing expense in the accompanying consolidated statements of operations and comprehensive loss.

Cost of Revenue

Cost of revenue primarily consists of expenses related to supporting and hosting the Company’s SaaS platforms, acquiring data and providing support to the Company’s customers. These costs include salaries, benefits, incentive compensation and stock-based compensation expense related to the management of the Company’s data centers, the customer support team, and data acquisition costs. In addition to these expenses, the Company incurs third-party service provider costs, such as data center and networking expenses, allocated overhead costs, and depreciation and amortization expense associated with the Company’s property and equipment and capitalized internal-use software development costs.

Cash, Cash Equivalents and Investments

The Company considers all highly liquid instruments purchased with an original maturity date of 90 days or less from the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and amounts held in interest-bearing money market funds. Cash equivalents are carried at cost, which approximates their fair market value. Investments not classified as cash equivalents are presented as either short-term or long-term investments based on both their stated maturities as well as the time period the Company intends to hold such securities. The Company determines the appropriate classification of investments at the time of purchase and reevaluates such designation at each balance sheet date. The Company adjusts the cost of investments for amortization of premiums and accretion of discounts to maturity. The Company includes such amortization and accretion in interest income in the consolidated statements of operations.

When the Company holds debt investments classified as available-for-sale pursuant to ASC 320, Investments — Debt Securities (“ASC 320”), it records available-for-sale securities at fair value, with unrealized gains and losses included in accumulated other comprehensive loss in stockholders’ equity. The Company includes interest and dividends on securities classified as available-for-sale in interest income in the consolidated statements of operations and comprehensive loss. Realized gains and losses are recorded in the consolidated statements of operations and comprehensive loss based on the specific-identification method. There were no material realized gains or losses on investments for the years ended December 31, 2022, 2021, or 2020. The Company did not hold any debt investments as of December 31, 2021.

The Company reviews investments for other-than-temporary impairment whenever the fair value of an investment is less than its amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. Other-than-temporary impairments of investments are recognized in the consolidated statements of operations if the Company has experienced a credit loss, has the intent to sell the investments, or if it is more likely than not that the Company will be required to sell the investment before recovery of the amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with the Company’s investment policy, the severity and the duration of the impairment and changes in value subsequent to the end of the period. As of December 31, 2022, the aggregate fair value of investments held by the Company in an unrealized loss position for less than twelve months was $137,816. For the year ended December 31, 2022, the Company determined that no other-than-temporary impairments were required to be recognized in the consolidated statements of operations. The Company did not hold any debt investments prior to fiscal year 2022.

The following is a summary of cash, cash equivalents and investments as of December 31, 2022:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2022:
Cash and cash equivalents	$	79,765	$	—	$	—	$	79,765
Investments:
U.S. treasury securities due in one year or less	153,604		5		(108)		153,501
Corporate Securities due in one year or less	4,295		—		(22)		4,273
Total investments	157,899		5		(130)		157,774
Total cash, cash equivalents and investments	$	237,664	$	5	$	(130)	$	237,539

Restricted Cash

As of December 31, 2021, restricted cash was $176 and related to cash held at a separate financial institution in an interest-bearing cash account as collateral for a letter of credit related to the contractual provisions for one of the Company’s building leases. During 2022, this cash was returned to the Company and a corresponding reduction was made to the Company’s line of credit. See Note 9 for detail on this credit facility. Restricted cash is included in “other long-term assets” in the accompanying consolidated balance sheets as of December 31, 2021 based on the maturity date of the letter of credit.

The following table is a reconciliation of cash, cash equivalents and restricted cash included in the accompanying consolidated balance sheets that sum to the total cash, cash equivalents and restricted cash included in the accompanying consolidated statements of cash flows.


	As of December 31,
	2022		2021
Cash and cash equivalents	$	79,765	$	269,665
Restricted cash included in “other long-term assets”	—		176
	$	79,765	$	269,841

Concentrations of Credit Risk and Significant Customers

The Company has no off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivables. The Company maintains its cash and cash equivalents with multiple financial institutions that management believes to be of high-credit quality. At times, the deposits with these financial institutions may exceed federally insured limits.

Credit risk with respect to accounts receivable is dispersed due to the large number of customers of the Company. The Company routinely assesses the creditworthiness of its customers and generally does not require its customers to provide collateral or other security to support accounts receivable. Credit losses historically have not been significant and the Company generally has not experienced any material losses related to receivables from individual customers, or groups of customers. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable.

As of December 31, 2022 and 2021, no individual customer represented more than 10% of the Company’s accounts receivable. During the years ended December 31, 2022, 2021, and 2020, no individual customer represented more than 10% of the Company’s revenue.

Allowance for doubtful accounts

The Company reduces gross trade accounts receivable by an allowance for doubtful accounts based upon the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable and based upon historical loss patterns, the number of days that billings are past due, and an evaluation of the potential risk of loss associated with specific accounts. Provisions for the allowance for doubtful accounts are recorded in general and administrative expense. As of December 31, 2022 and 2021, the Company did not record an allowance for doubtful accounts.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related asset. The estimated useful lives of the Company’s property and equipment are as follows:


			Estimated Useful Life
			(In Years)
Computer equipment			2 to 5
Furniture and office equipment			5 to 7
Leasehold improvements			2 to 4

Expenditures for maintenance and repairs are charged to expense as incurred, whereas major betterments are capitalized as additions to property and equipment.

Capitalized Software Development Costs

Costs incurred to develop software applications used in the Company’s SaaS platform consist of certain direct costs of materials and services incurred in developing or obtaining internal-use computer software, and payroll and payroll-related costs for employees who are directly associated with, and who devote time to, the project. These costs generally consist of internal labor during configuration, coding, and testing activities. Research and development costs incurred during the preliminary project stage or costs incurred for data conversion activities, training, maintenance, and general and administrative or overhead costs are expensed as incurred. Once a project has reached the application development stage, internal and external costs, if direct and incremental, are capitalized until the project is substantially complete and ready for its intended use. Qualified costs incurred during the post-implementation stage of the Company’s software applications relating to upgrades and enhancements are capitalized to the extent it is probable that they will result in added functionality, while costs incurred for maintenance of, and minor upgrades and enhancements to, internal-use software are expensed as incurred.

Capitalized software development costs are amortized on a straight-line basis over their estimated useful life of 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.

During the years ended December 31, 2022, 2021, and 2020, the Company capitalized $1,760, $1,403, and $1,032, respectively, of software development costs, which are classified as intangible assets on the accompanying consolidated balance sheets. The Company recorded amortization expense associated with its capitalized software development costs of $570, $482, and $305 for the years ended

December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022 and 2021, the net book value of capitalized software development costs was $1,962 and $1,959, respectively.

Business Combinations

In accordance with ASC 805, Business Combinations (“ASC 805”), the Company recognizes the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. Determining these fair values requires management to make significant estimates and assumptions, especially with respect to intangible assets.

The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair value. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair value of the assets acquired and the liabilities assumed and represents the expected future economic benefits arising from other assets acquired that are not individually identified and separately recognized. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, its estimates are inherently uncertain and subject to refinement. Assumptions may be incomplete or inaccurate, and unanticipated events or circumstances may occur, which may affect the accuracy or validity of such assumptions, estimates, or actual results. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations.

The Company records contingent consideration resulting from a business combination at its fair value on the acquisition date. The Company generally determines the fair value of the contingent consideration using the Monte Carlo simulation model. Each reporting period thereafter, these obligations are revalued and increases or decreases in their fair value are recorded as an adjustment to operating expenses within the consolidated statements of operations and comprehensive loss. Changes in the fair value of the contingent consideration can result from changes in assumed discount periods and rates, and from changes pertaining to the achievement of the defined milestones. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the assumptions described above, can materially impact the amount of contingent consideration expense the Company records in any given period.

Goodwill and acquired intangible assets

Goodwill is not amortized, but is evaluated for impairment annually, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has determined that there is a single reporting unit for the purpose of conducting this goodwill impairment assessment and the fair value of its reporting unit has been determined based on the Company’s enterprise value. As part of the annual goodwill impairment test, the Company has the option to perform a qualitative assessment to determine whether further impairment testing is necessary. Examples of events and circumstances that might indicate that the reporting unit’s fair value is less than its carrying amount include macro-economic conditions such as deterioration in the entity’s operating environment or industry or market considerations; entity-specific events such as increasing costs, declining financial performance, or loss of key personnel; or other events such as a sustained decrease in the stock price on either an absolute basis or relative to peers. If, as a result of its qualitative assessment, it is more likely than not (i.e., greater than 50% chance) that the fair value of the Company’s reporting unit is less than its carrying amount, the quantitative impairment test will be required. Otherwise, no further testing will be required. The Company completed its

qualitative assessment and concluded that as of October 1, 2022, it is not more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount.

Intangible assets acquired in a business combination are recorded at their estimated fair values at the date of acquisition. The Company amortizes acquired definite-lived intangible assets over their estimated useful lives based on the pattern of consumption of the economic benefits or, if that pattern cannot be readily determined, on a straight-line basis. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. The Company considered potential impairment indicators of acquired intangible assets and noted no indicators of impairment as of December 31, 2022.

Impairment of Long-Lived Assets

Long-lived assets consist of property and equipment, intangible assets, and capitalized software development costs. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flows.

For the year ended December 31, 2022, the Company recorded $642 of impairment expense related to its capitalized software development costs. Impairment expense related to capitalized software development costs is included in “research and development” in the accompanying consolidated statement of operations for the year ended December 31, 2022. For the year ended December 31, 2021, the Company did not identify any indicators of impairment of its long-lived assets. For the year ended December 31, 2020, the Company recorded an immaterial amount of impairment expense relating to capitalized software development costs.

Disclosure of Fair Value of Financial Instruments

The Company’s financial instruments include cash, cash equivalents, investments, accounts receivable, accounts payable, and accrued expenses. The company’s investments are classified as available-for-sale and reported at fair value in accordance with the market approach utilizing quoted prices that were directly or indirectly observable. The carrying amount of the remainder of the Company’s financial instruments approximated their fair values as of December 31, 2022 and 2021, due to the short-term nature of these instruments.

The Company has evaluated the estimated fair value of financial instruments using available market information. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. See below for further discussion.

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), establishes a three-level valuation hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s

assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

This guidance further identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

Level 1 inputs—Unadjusted observable quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 inputs—Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs—Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions of that market.

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The Company evaluates assets and liabilities subject to fair value measurements on a recurring and nonrecurring basis to determine the appropriate level to classify them for each reporting period.

The following table summarizes financial assets and liabilities measured and recorded at fair value on a recurring basis in the accompanying consolidated balance sheets as of December 31, 2022, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:


	December 31, 2022
	Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs)		Significant Other Observable Inputs (Level 2 Inputs)		Significant Unobservable Inputs (Level 3 Inputs)		Total
Assets:
Money market funds	$	36,222	$	—	$	—	$	36,222
U.S. treasury securities	—		153,501		—		153,501
Corporate securities	—		4,273		—		4,273
Convertible debt securities (See Note 5)	—		—		3,652		3,652
Total assets	$	36,222	$	157,774	$	3,652	$	197,648

Liabilities:
Contingent consideration	$	—	$	—	$	227	$	227
Total liabilities	$	—	$	—	$	227	$	227

Cash equivalents include money market funds with original maturities of 90 days or less from the date of purchase. The fair value measurement of these assets is based on quoted market prices in active markets for identical assets and, therefore, these assets are recorded at fair value on a recurring basis and classified as Level 1 in the fair value hierarchy. The Company’s investments primarily consist of short-term U.S. treasury securities and corporate securities. The fair value measurement of these assets is based on significant other observable inputs and, therefore, these assets are recorded at fair value on a recurring basis and classified as Level 2 in the fair value hierarchy.

As of December 31, 2021, the Company did not have any assets or liabilities measured at fair value on a recurring basis using significant other observable inputs (Level 2). The Company held cash equivalents in money market funds that totaled $21,366 and were classified as Level 1 in the fair value hierarchy.

As of December 31, 2022 and 2021, the Company measured its investments in convertible debt securities (see Note 5) and its contingent consideration associated with the acquisition of Prowly.com sp. Z o.o (“Prowly”) on a recurring basis using significant unobservable inputs (Level 3).

Convertible Debt Securities

The Company records its convertible debt securities at fair value on the purchase date. The Company determines the fair value of these investments using the Black-Scholes Merton model. Each reporting period thereafter, these investments are revalued and increases or decreases in their fair values are recorded as adjustments to other income, net within the consolidated statements of operations and comprehensive loss to reflect the gains and losses. Changes in the fair value of these investments can result from changes in the estimated enterprise value of the issuers, the likelihoods and methods of such conversions, and other market factors. Significant judgment is employed in determining the appropriateness of these assumptions as of the purchase date and for each subsequent period. Accordingly, changes in any of the assumptions described above can materially impact the amount of gain or loss the Company records in any given period.

A rollforward of the fair value measurements of the convertible debt securities for the years ended December 31, 2021 and 2022 is as follows:


Balance as of December 31, 2020	$	—
Investment in convertible debt securities	500
Change in fair value included in other income, net	—
Balance as of December 31, 2021	500
Additional investment in convertible debt securities	2,000
Change in fair value included in other income, net	1,152
Balance as of December 31, 2022	$	3,652

Contingent consideration

The Company records contingent consideration resulting from a business combination at its fair value on the acquisition date. The Company generally determines the fair value of the contingent consideration using the Monte Carlo simulation model. Each reporting period thereafter, these obligations are revalued and increases or decreases in their fair values are recorded as an adjustment to operating expenses within the consolidated statements of operations and comprehensive loss. Changes in the fair value of the contingent consideration can result from changes in assumed discount periods and rates, and from changes pertaining to the estimated or actual achievement of the defined milestones. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for

each subsequent period. Accordingly, future business and economic conditions, as well as changes in any of the assumptions described above, can materially impact the amount of contingent consideration expense the Company records in any given period. The total estimated fair value of the contingent consideration payable was $227 and $424 as of December 31, 2022 and 2021, respectively. The following table represents the key inputs used in the fair value calculation:


	As of
	December 31, 2022		December 31, 2021
Risk free interest rate	4.72	%	0.45	%
Projected year of payment	2023		2022 — 2023
Revenue volatility	20.1	%	22.3	%
Discount rate	9.72	%	5.87	%

Changes in the estimated fair value of the contingent consideration payable are recognized over the three-year service period. A rollforward of the fair value measurements of the contingent consideration liability for the years ended December 31, 2022 and 2021, is as follows:


Balance as of December 31, 2020	78
Expense recognized related to service period rendered	516
Payments made	(170)
Balance as of December 31, 2021	424
Expense recognized related to service period rendered	$	(20)
Payments made	(177)
Balance as of December 31, 2022	$	227

Advertising Costs

Advertising costs are expensed as incurred. Advertising expense, which is included within sales and marketing expense in the consolidated statements of operations and comprehensive loss, was $66,319, $42,677, and $25,467 for the years ended December 31, 2022, 2021, and 2020, respectively.

Leases

Since the Company is an Emerging Growth Company and have elected to use the extended transition period for complying with any new or revised financial accounting standards, the Company adopted the ASU 2016-02 during the fourth quarter of 2022 and applied the modified retrospective method of adoption with a cumulative transition adjustment at January 1, 2022. Subsequent to the adoption of ASU 2016-02, the Company classifies leases at the lease commencement date. At the commencement date, the Company will recognize a right-of-use asset (“ROUA”) and a lease liability on the balance sheet for all leases with the exception of those with a lease term of 12 months or less. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company has elected to account for lease and non-lease components as a single lease component.

Lease liabilities and their corresponding ROUAs are recorded based on the present value of lease payments over the expected lease term. The implicit rate within the Company’s leases is generally not determinable and therefore the Company uses the incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The Company determines its incremental borrowing rate for each lease based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term.

Certain of the Company’s leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROUA and lease liability when it is reasonably certain the Company will exercise that option. An option to terminate is considered unless it is reasonably certain the Company will not exercise the option.

See Note 3 for further information.

Foreign Currency Translation

The Company operates in a multi-currency environment having transactions in such currencies as the U.S. dollar, Russian ruble, Czech koruna, euro, and others. The reporting currency of the Company is the U.S. dollar.

For all periods up to and including the year ended December 31, 2021, the functional currency of the Company’s foreign subsidiaries was the U.S. dollar, with the exception of Prowly, where the functional currency is the local currency, the zloty. For all other entities, foreign currency transactions were measured initially in the functional currency of the recording entity by use of the exchange rate in effect at that date. As each subsequent balance sheet date, foreign currency denominated assets and liabilities of these international subsidiaries were remeasured into U.S. dollars using the exchange rates in effect at the balance sheet date or historical rates, as appropriate. Any differences resulting from the remeasurement of foreign denominated assets and liabilities of the international subsidiaries to the U.S. dollar functional currency were recorded within other income (expense) in the consolidated statement of operations and comprehensive loss.

Beginning on January 1, 2022, as a result of changes in the economic facts and circumstances of its business environment, the Company reassessed its functional currency determinations for all foreign subsidiaries and determined that the functional currencies of the Company’s foreign subsidiaries is the local currency at each of its subsidiary locations, with the exception of its former Russian subsidiaries where the U.S. dollar remained the functional currency. As of August 10, 2022, the Company no longer has operating subsidiaries in Russia. See Note 7 for more information on the sale of the Company’s Russian subsidiaries. Accordingly, beginning January 1, 2022, assets and liabilities of the Company’s foreign subsidiaries that maintain local currencies as functional currencies are translated into U.S. dollars using period-end exchange rates, and revenues and expenses are translated into U.S. dollars using average exchange rates in effect during each period. The Company includes the effects of these foreign currency translation adjustments in accumulated other comprehensive income (loss), a separate component of stockholders’ equity.

The foreign currency exchange loss included in other income (expense), net for the years ended December 31, 2022, 2021, and 2020 was $1,302, $4, and $672, respectively.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that these assets may not be realized.

The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions. Amounts recognized are based on a determination of whether a tax benefit taken by the Company is more likely than not to be sustained upon audit. The amount recognized is equal to the largest amount that is more than 50% likely to be sustained. Interest and penalties associated with such

uncertain tax positions are recorded as a component of income tax expense. As of December 31, 2022 and 2021 the Company has not identified any uncertain tax positions.

Net Loss Per Share

In March 2021, the Company amended its certificate of incorporation to create two classes of common stock outstanding: Class A common stock and Class B common stock. As more fully described in Note 11 “Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)”, the rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one (1) vote per share and each share of Class B common stock is entitled to ten (10) votes per share. Each share of Class B common stock is convertible into one share of Class A common stock at the option of the holder at any time. Shares of Class B common stock are automatically converted into Class A common stock upon sale or transfer, subject to certain limited exceptions. Shares of Class A common stock are not convertible. See Note 11 “Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)” for additional information regarding the current conversion and transfer terms of the Company’s common stock. The Company allocates undistributed earnings attributable to common stock between the common stock classes on a one-to-one basis when computing net loss per share. As a result, basic and diluted net loss per share of Class A common stock and share of Class B common stock are equivalent.

Net loss per share information is determined using the two-class method, which includes the weighted-average number of shares of common stock outstanding during the period and other securities that participate in dividends (a participating security). With respect to shares of Preferred Stock that were issued and outstanding prior to the IPO, the Company considers the shares of Preferred Stock to be participating securities because they include rights to participate in dividends with the common stock.

Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share attributable to common stockholders is computed using the more dilutive of (1) the two-class method or (2) the if-converted method. The Company allocates net income first to the holders of the Preferred Stock based on dividend rights under the Company’s certificate of incorporation and then to preferred and common stockholders based on ownership interests. Net losses are not allocated to preferred stockholders as they do not have an obligation to share in the Company’s net losses.

Diluted net loss per share gives effect to all potentially dilutive securities. Potential dilutive securities consist of shares of common stock issuable upon the exercise of stock options, shares of common stock issuable upon the conversion of the outstanding shares of Preferred Stock, and shares of common stock issuable upon the vesting of restricted stock awards.

For the years ended December 31, 2022, 2021, and 2020, the net loss attributable to common stockholders is divided by the weighted-average number of shares of common stock outstanding during the period to calculate diluted earnings per share. The dilutive effect of common stock equivalents has been excluded from the calculation as their effect would have been anti-dilutive due to the net losses incurred for these periods.

The following potentially dilutive common stock equivalents have been excluded from the calculation of diluted weighted-average shares outstanding for the period presented:


	Year ended December 31,
	2022	2021	2020
Stock options outstanding	6,865,265	6,329,822	7,611,258
Shares of Preferred Stock	—	—	29,695,200
Unvested RSAs, RSUs, and PSUs	1,328,714	345,026	156,852

Stock-Based Compensation

The Company accounts for stock-based compensation awards in accordance with the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the recognition of expense related to the fair value of stock-based compensation awards in the statements of operations. For service-based awards, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period of the award with actual forfeitures recognized as they occur.

See Note 12 for further description of the Company’s stock-based compensation plans and a summary of the stock-based award activity for the years ended December 31, 2022, 2021, and 2020.

Comprehensive loss

Comprehensive loss is comprised of two components: net loss and other comprehensive loss, which includes other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. Such changes include the cumulative foreign currency translation adjustment and unrealized gains or losses on available-for-sale securities. The tax effect of the cumulative foreign currency translation adjustment and unrealized gains or losses on available-for-sale securities is not significant for the years ended December 31, 2022 and 2021. Comprehensive loss equaled total net loss for the year ended December 31, 2020.

Contingent Liabilities

The Company has certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues for loss contingencies when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. The Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible, but not probable; however, it discloses the range of such reasonably possible losses.

Segment Information

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the chief executive officer (“CEO”). The Company and the CEO view the Company’s operations and manage its business as one operating segment.

Emerging Growth Company Status

The Company is an "emerging growth company," as defined in the Jumpstart Our Business Startups Act, or JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies." The Company may take advantage of these exemptions until the Company is no longer an "emerging growth company."

Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards and, as a result of this election, its financial statements may not be comparable to companies that comply with public company effective dates. The Company may take advantage of these exemptions up until the last day of the year following the fifth anniversary of an offering or such earlier time that it is no longer an emerging growth company. The Company would cease to be an emerging growth company if it has more than $1.07 billion in annual revenue, has more than $700.0 million in market value of its stock held by non-affiliates (as of the last day of the Company’s then fiscal second quarter), or it issues more than $1.0 billion of non-convertible debt securities over a three-year period.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASC 842”). ASU 2016-02 requires a lessee to recognize most leases on the balance sheet but recognize expenses on the income statement in a manner similar to current practice. The update states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying assets for the lease term. Leases will continue to be classified as either financing or operating, with classification affecting the recognition, measurement, and presentation of expenses and cash flows arising from a lease. Since the Company is an Emerging Growth Company and have elected to use the extended transition period for complying with any new or revised financial accounting standards, the Company adopted the ASU 2016-02 during the fourth quarter of 2022 and applied the modified retrospective method of adoption with a cumulative transition adjustment at January 1, 2022. See Note 3 for further detail of the impact to the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses ("ASC 326”): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires that credit losses be reported as an allowance using an expected losses model, representing the entity’s current estimate of credit losses expected to be incurred. The accounting guidance currently in effect is based on an incurred loss model. ASU 2016-13 affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for public entities for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years. For non-public companies, ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The Company plans to adopt this guidance in the year ended December 31, 2023. The Company is currently evaluating ASU 2016-13 and the potential impact on its consolidated financial statements and financial statement disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The new guidance simplifies the accounting for income taxes by removing several exceptions in the current standard and adding guidance to reduce complexity in certain areas, such as requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. For public companies, the ASU is effective for years beginning after December 15, 2020, and interim periods within those years, with early adoption permitted. For non-public companies, the new standard is effective for years beginning after December 15, 2021, with early adoption permitted. The Company adopted this guidance in the year ended December 31, 2022 and it did not have a material impact on its consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 changes the accounting for contract assets and liabilities acquired in a business combination by requiring an acquiring entity to measure contract assets and liabilities in accordance with ASC 606, Revenue from Contracts with Customers. For public business entities, the amendments in ASU 2021-08 are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The amendments in ASU 2021-08 should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption of the amendments is permitted. The Company adopted this guidance in the year ended December 31, 2022 which resulted in the recognition of $613 deferred revenue associated with the Kompyte acquisition.

Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Lease Portfolio Overview

The Company’s operating lease obligations consist of various leases for office space in areas that include, among others, Austin, Texas; Boston, Massachusetts; Dallas, Texas; Trevose, Pennsylvania; Barcelona, Spain; Limassol, Cyprus; and Prague, Czech Republic.

On October 13, 2022, the Company entered into an operating lease in Austin, Texas at 720 Brazos Street for the lease of 5,396 square feet of office space. The commencement date was November 1, 2022, and the lease has a non-cancellable term through December, 2027, with two five year Company extension options. The lease provided for a tenant improvement allowance, and for annual rent increases through the term of the lease.

On June 30, 2022, the Company entered into an operating lease in Barcelona, Spain at Carrer de Tanger 98 for the lease of 19,763 square feet of office space with a commencement date of July 1, 2022. The lease has a Company option to terminate the lease after three years, with six months prior notice, otherwise the lease term concludes in June, 2027. The lease provided for annual rent increases through the term of the lease.

On May 2, 2022, the Company entered into an operating lease in Dallas, Texas at 3838 Oak Lawn Avenue for the lease of 4,365 square feet of office space. The commencement date was May 1, 2022, and the lease has a non-cancellable term through August, 2025. The lease provided for tenant improvement allowance, and for annual rent increases through the term of the lease.

On April 28, 2022, the Company entered into an operating lease in Trevose, Pennsylvania at 3800 Horizon Boulevard for the lease of 10,450 square feet of office space. The commencement date was October 14, 2022, and the lease has a non-cancellable term through June, 2027, with a five year Company extension option. The lease provided for a turn-key fit-out, an additional upgrade allowance, and for annual rent increases through the term of the lease.

On June 23, 2021, the Company amended its operating lease, which was originally entered into on October 24, 2018, to expand its lease to a total of 16,467 square feet of office space in Boston, Massachusetts at 800 Boylston Street. The lease amendment provided for a turn-key fit-out and for annual rent increases through the term of the lease. The commencement date of the amended lease was January 1, 2022, and extended the non-cancellable lease term to March 2027. The lease provides for a Company option to extend the lease term for an additional period of five years.

On July 9, 2020, the Company entered into an operating lease in Limassol, Cyprus at Grosvenor Tower for the lease of 8,890 square feet of office space, with the commencement date of August 1, 2020, and lease term through July 2023. The lease provides for a Company option to terminate the lease at any point after two years, with two months prior notice. The lease provides for a Company option with Landlord consent to renew the lease for an additional three-year term. The lease provided for a turn-key fit-out and no annual rent increases permitted.

On May 28, 2020, the Company amended its operating lease in Prague, Czech Republic at Kavci Hory Office Park, which was originally entered into on December 14, 2016, to extend the term through July 2025. The amendment provided for a Company option to terminate the lease as of July 31, 2022, with 12 months prior notice. The Company did not exercise the termination option.

Prior to the adoption of ASC 842, the Company categorized leases at their inception as either operating or capital leases. On certain lease arrangements, the Company may have received rent holidays or other incentives. The Company recognized lease costs on a straight‑line basis once it achieved control of the space, without regard to deferred payment terms, such as rent holidays, that deferred the

commencement date of required payments or escalating payment amounts. The Company recorded the difference between required lease payments and rent expense as deferred rent. Additionally, incentives received were treated as a reduction of costs over the term of the agreement, as they were considered an inseparable part of the lease agreement.

Subsequent to the adoption of ASC 842, the Company categorizes leases at commencement as either operating or finance leases. The Company has operating leases for data centers and facilities and finance leases for certain equipment. The leases have remaining lease terms of less than a year to 6 years, some of which include options to extend the leases for up to 10 years. The Company recognizes lease expense for operating leases on a straight-line basis over the lease term. Variable costs, which are based on actual usage, are not included in the measurement of ROUAs and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs. Amortization expense of the ROUA for finance leases is recognized on a straight-line basis over the lease term and interest expense for finance leases is recognized based on the effective interest method using an incremental borrowing rate.

Adoption of ASC 842 resulted in the recording of $12,366 in ROUAs and $12,579 in lease liabilities as of January 1, 2022. Incremental borrowing rates as of January 1, 2022, the date the new standard was adopted, were used to calculate the present value of the Company’s lease portfolio as of that date. The Company determines its incremental borrowing rate for each lease based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. There was no impact on retained earnings or other components of equity from the adoption. The Company elected to apply ASC 842 at the beginning of the period of adoption through a cumulative adjustment in accordance with ASC 842-10-65-1(c)(2).

The Company elected the three practical expedients as a package and applied them consistently to all leases, which allowed it to forgo reassessing whether any expired or existing contract contain leases, the classification for any expired or existing leases, and the initial direct costs for existing leases. The Company also made an accounting policy election to not recognize a lease liability or right-of-use asset on its consolidated balance sheet for leases with an initial term of twelve months or less, and instead recognizes such lease payments in the consolidated statements of operations and comprehensive loss on a straight-line basis over the lease term.

The components of lease expense were as follows:


	Year Ended December 31,
	2022
Operating lease cost	$	3,936
Short-term lease cost	1,128
Variable lease cost	7,340
Total lease cost	$	12,404


	Year Ended December 31,
	2022
Amortization of lease assets	$	2,106
Interest on lease liabilities	115
Total finance lease cost	$	2,221

Weighted-average remaining lease term and discount rate were as follows:


	As of December 31,
	2022
Weighted-average remaining lease term (in years)
Operating leases	3.9
Finance leases	1.6
Weighted-average discount rate
Operating leases	5.08	%
Finance leases	3.69	%

Future minimum amounts payable as of December 31, 2022 were as follows:


Year Ending December 31,	Operating Leases		Finance Leases
2023	$	4,033	$	2,393
2024	3,004		865
2025	2,578		194
2026	2,617		—
2027	1,167		—
Thereafter	154		—
Total lease payments	13,553		3,452
Less: imputed interest	(930)		(134)
Total lease liabilities	$	12,623	$	3,318

As of December 31, 2022 the Company had no additional operating or finance leases that have not yet commenced.

Rent expense related to the Company’s office facilities was $5,064, $3,817, and $4,334 for the years ended December 31, 2022, 2021, and 2020, respectively.

As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and under the previous lease accounting standard, future minimum payments for operating leases and capital leases as of December 31, 2021 were as follows:


Year Ending December 31,	Operating Leases		Capital Leases
2022	$	4,051	$	2,195
2023	2,734		2,346
2024	1,738		679
2025	1,341		151
2026 and thereafter	1,597		—
Total future lease payments	11,461		5,371
Less: imputed interest	—		(416)
Total	$	11,461	$	4,955